<PAGE>
As filed with the Securities and Exchange Commission on June 18, 1999
Registration No. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------
LATTICE SEMICONDUCTOR CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 93-0835214
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5555 N.E. Moore Court
Hillsboro, Oregon 97124-6421
(Address of Principal Executive Offices, including Zip Code)
---------------
Vantis Corporation
1999 Performance Award Plan
- and -
Vantis Corporation
1999 Leadership Award Plan
(Full title of the plans)
---------------
Stephen A. Skaggs
Chief Financial Officer
LATTICE SEMICONDUCTOR CORPORATION
5555 N.E. Moore Court
Hillsboro, Oregon 97124-6421
(503) 268-8000
(Name, address and telephone number of agent for service)
---------------
Copy to:
John A. Fore, Esq.
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
650 Page Mill Road
Palo Alto, CA 94304
(415) 493-9300
---------------
================================================================================
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
============================== ==================== ==================== ==================== ====================
Proposed Maximum Proposed Maximum
Title of Securities to Amount to be Offering Price Aggregate Offering Amount of
be Registered Registered Per Share(1) Price Registration Fee
<S> <C> <C> <C> <C>
Common Stock, 1,165,000 $41.43 $48,265,950 $13,514.47
$0.01 par value per share
============================== ==================== ==================== ==================== ====================
</TABLE>
(1) The Proposed Maximum Offering Price Per Share was estimated in accordance
with Rule 457(h) under the Securities Act of 1933, as amended (the
"Securities Act"), under which rule the per share price is estimated by
reference to the exercise price of the securities, which exercise price is
$41.43.
<PAGE>
REGISTRATION STATEMENT ON FORM S-8
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents and information previously filed with the
Securities and Exchange Commission (the "Commission") by Lattice Semiconductor
Corporation (the "Company") are hereby incorporated by reference in this
Registration Statement:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
March 28, 1998, filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
(b) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended January 2, 1999, filed pursuant to Section 13(a) or 15(d) of the
Exchange Act.
(c) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 26, 1998, filed pursuant to Section 13(a) or 15(d) of
the Exchange Act.
(d) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended June 27, 1998, filed pursuant to Section 13(a) or 15(d) of the
Exchange Act.
(e) The Company's Current Report on Form 8-K filed on May 7, 1999,
pursuant to the Exchange Act.
(f) The description of the Company's Common Stock which is contained in
the Company's Registration Statement on Form 8-A filed with the
Commission on September 27, 1989 pursuant to Section 12 of the
Exchange Act, including any amendment or report filed for the purpose
of updating any such description.
(g) All other documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act since the end of the fiscal
year covered by the annual report referred to in (d) above.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities registered 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 of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
II-1
<PAGE>
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Restated Certificate of Incorporation, as amended, limits
the personal liability of directors for monetary damages for their conduct as a
director. The Company's Bylaws provide that the Company shall indemnify its
officers and directors and may indemnify its employees and other agents to the
fullest extent permitted by the Delaware General Corporation Law ("Delaware
Law").
Section 145 of the Delaware Law provides that a corporation may
indemnify a director, officer, employee or agent made a party to an action by
reason of the fact that he was a director, officer, employee or agent of the
corporation or was serving at the request of the corporation against expenses
actually and reasonably incurred by him in connection with such action if he
acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the corporation and with respect to any
criminal action, had no reasonable cause to believe his conduct was unlawful.
Delaware Law does not permit a corporation to eliminate a director's
duty of care, and the provisions of the Company's Restated Certificate of
Incorporation have no effect on the availability of equitable remedies such as
injunction or rescission, based upon a director's breach of the duty of care.
Insofar as indemnification for liabilities arising under the Securities Act, may
be permitted to directors, officers or persons controlling the Company pursuant
to the foregoing provisions, the Company has been informed that in the opinion
of the staff of the Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
------- ---------------------------------------------------------------
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, Counsel to the Company.
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, Counsel to the Company (see Exhibit 5.1).
24.1 Power of Attorney (see page II-4).
99.1 Vantis Corporation 1999 Performance Award Plan.
99.2 Vantis Corporation 1999 Leadership Award Plan.
II-2
<PAGE>
ITEM 9. UNDERTAKINGS.
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, 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 purposes of determining any liability under the
Securities Act, each filing of the Registrant'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 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.
(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Exchange Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Exchange Act
and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Hillsboro, State of Oregon, on this 18th day of June,
1999.
LATTICE SEMICONDUCTOR CORPORATION
By: /s/ Cyrus Y. Tsui
--------------------------------------
Cyrus Y. Tsui
President, Chief Executive Officer and
Chairman of the Board
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Cyrus Y. Tsui and Stephen A.
Skaggs, and each of them acting individually, as his attorney-in-fact, each with
full power of substitution, for him in any and all capacities, to sign any and
all amendments to this Registration Statement on Form S-8, 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 any substitute, 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:
SIGNATURE TITLE DATE
- -------------------------- ---------------------------------- -------------
/s/ Cyrus Y. Tsui President, Chief Executive Officer June 18, 1999
- -------------------------- (Principal Executive Officer) and
Cyrus Y. Tsui Chairman of the Board of Directors
/s/ Stephen A. Skaggs Senior Vice President, Chief June 18, 1999
- -------------------------- Financial Officer (Principal
Stephen A. Skaggs Financial Officer) and Secretary
/s/ Mark O. Hatfield Director June 18, 1999
- --------------------------
Mark O. Hatfield
/s/ Daniel S. Hauer Director June 18, 1999
- --------------------------
Daniel S. Hauer
/s/ Harry A. Merlo Director June 18, 1999
- --------------------------
Harry A. Merlo
II-4
<PAGE>
SIGNATURE TITLE DATE
- -------------------------- ---------------------------------- -------------
/s/ Larry W. Sonsini Director June 18, 1999
- --------------------------
Larry W. Sonsini
/s/ Douglas C. Strain Director June 18, 1999
- --------------------------
Douglas C. Strain
II-5
<PAGE>
LATTICE SEMICONDUCTOR CORPORATION
REGISTRATION STATEMENT ON FORM S-8
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- ---------------------------------------------------------------
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, Counsel to the Company.
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, Counsel to the Company (see Exhibit 5.1).
24.1 Power of Attorney (see page II-4).
99.1 Vantis Corporation 1999 Performance Award Plan.
99.2 Vantis Corporation 1999 Leadership Award Plan.
II-6
<PAGE>
EXHIBIT 5.1
June 17, 1999
Lattice Semiconductor Corporation
5555 N.E. Moore Court
Hillsboro, Oregon 97124-6421
RE: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed
by you with the Securities and Exchange Commission on or about June 18, 1999
(the "Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended (the "Act"), of an aggregate of 1,125,000
shares (the "Shares") of your Common Stock reserved for issuance pursuant to
the Vantis Corporation 1999 Performance Award Plan and 1999 Leadership Award
Plan (the "Plans"). As your counsel in connection with this transaction, we
have examined the proceedings taken and are familiar with the proceedings
proposed to be taken by you in connection with the issuance of the Shares
under 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 non-assessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement, and further consent to the use of our name wherever
appearing in the Registration Statement and any amendments thereto.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ WILSON SONSINI GOODRICH & ROSATI
--------------------------------------
<PAGE>
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 April 15, 1998,
relating to the consolidated financial statements, which appears in the 1998
Annual Report to Shareholders of Lattice Semiconductor Corporation, which is
incorporated by reference in Lattice Semiconductor Corporation's Annual
Report on Form 10-K for the year ended March 28, 1998. We also consent to the
incorporation by reference of our report dated April 15, 1998 relating to the
financial statement schedule, which appears in such Annual Report on Form
10-K.
/s/ PricewaterhouseCoopers LLP
- --------------------------------
PricewaterhouseCoopers LLP
Portland, Oregon
June 15, 1999
<PAGE>
Exhibit 99.1
VANTIS CORPORATION
1999 PERFORMANCE AWARD PLAN
<PAGE>
TABLE OF CONTENTS
Page
----
1. The Plan...................................................................1
1.1 Purpose...........................................................1
1.2 Administration and Authorization; Power and Procedure.............1
1.3 Participation.....................................................2
1.4 Shares Available for Awards; Share Limits.........................2
1.5 Grant of Awards...................................................3
1.6 Award Period......................................................3
1.7 Limitations on Exercise and Vesting of Awards.....................3
1.8 Acceptance of Promissory Notes to Finance Exercise................4
1.9 Transfer Restrictions and Exceptions..............................4
1.10 Repricing/Cancellation and Regrant/Waiver of Restrictions.........5
2. Options....................................................................5
2.1 Grants............................................................5
2.2 Option Price......................................................5
2.3 Minimum Vesting/Exercisability of Options.........................6
2.4 Limitations on Grant and Terms of Incentive Stock Options.........6
2.5 Limits on 10% Holders.............................................7
2.6 Termination of Employment; Discretionary Authority................7
2.7 Delivery of Financial Statements..................................8
3. Stock Appreciation Rights..................................................8
3.1 Grants............................................................8
3.2 Pricing Limits....................................................8
3.3 Exercise of Stock Appreciation Rights.............................9
3.4 Payment...........................................................9
3.5 Limited Stock Appreciation Rights................................10
4. Restricted Stock Awards...................................................10
4.1 Grants...........................................................10
4.2 Restrictions.....................................................10
4.3 Return to the Company............................................11
5. Performance Share Awards and Stock Bonuses................................11
5.1 Grants of Performance Share Awards...............................11
5.2 Special (Section 162(m)) Performance-Based Awards................11
5.3 Other Stock Bonuses..............................................12
5.4 Deferred Payments................................................13
5.5 Cash Bonuses.....................................................13
5.6 Alternative Payments.............................................13
i
<PAGE>
6. Other Provisions..........................................................13
6.1 Rights of Eligible Persons, Participants and Beneficiaries.......13
6.2 Adjustments; Acceleration........................................14
6.3 Effect of Termination of Service on Awards.......................16
6.4 Compliance with Laws.............................................16
6.5 Tax Matters......................................................17
6.6 Plan Amendment, Termination and Suspension.......................17
6.7 Privileges of Stock Ownership....................................18
6.8 Effective Date of the Plan.......................................18
6.9 Term of the Plan.................................................18
6.10 Construction/Severability........................................18
6.11 Captions.........................................................19
6.12 Awards in Substitution for Awards Granted by Other Entities......19
6.13 Non-Exclusivity of Plan..........................................19
7. Definitions...............................................................19
ii
<PAGE>
VANTIS CORPORATION
1999 PERFORMANCE AWARD PLAN
1. THE PLAN
1.1 PURPOSE. The purposes of this Plan are (a) to promote the success of
the Company and the interests of its stockholders by attracting,
motivating, retaining and rewarding Eligible Persons with awards and
incentives for high levels of individual performance and improved
Company financial performance and (b) to further align the interests of
Participants with those of stockholders generally through awards of
stock-based incentives. Capitalized terms are defined in Section 7.
1.2 ADMINISTRATION AND AUTHORIZATION; POWER AND PROCEDURE.
1.2.1 COMMITTEE. This Plan shall be administered by, and all Awards to
Eligible Persons shall be authorized by, the Committee. Actions of the
Committee with respect to the administration of this Plan shall be
taken pursuant to a majority vote or by unanimous written consent of
its members.
1.2.2 PLAN AWARDS; INTERPRETATION; POWERS OF COMMITTEE. Subject to the
express provisions of this Plan and any express limitations on the
delegated authority of a Committee, the Committee shall have the
authority to:
(a) determine Eligible Persons;
(b) grant Awards to Eligible Persons; determine the Award Date
(which may be a date on or after, but not before, the
Committee's authorization of the Award); determine the price
at which securities shall be offered or awarded and the amount
of such securities to be offered or awarded; determine,
consistent with the express limitations of this Plan, the
other specific terms and conditions of such Awards; subject to
Section 2.3, establish the installments (if any) in which such
Awards shall vest or become exercisable, or determine that no
delayed exercisability or vesting is required; and establish
the events of termination or reversion of such Awards;
(c) approve the forms of Award Agreements (which need not be
identical either as to type of Award or among Participants);
(d) construe and interpret this Plan and any agreements
defining the rights and obligations of the Company and
Participants under this Plan; further define the terms used in
this Plan; and prescribe, amend and rescind rules and
regulations relating to the administration of this Plan;
(e) subject to any required consent under Section 6.6, cancel,
modify, or waive the Company's rights with respect to, or
modify, discontinue, suspend, or terminate, any or all
outstanding Awards held by Eligible Persons;
<PAGE>
(f) subject to Sections 1.6 and 1.7, accelerate or extend the
vesting or exercisability of any or all outstanding Awards or
extend the term thereof; and
(g) make all other determinations and take such other actions
as contemplated by this Plan or as may be necessary or
advisable for the administration of this Plan and the
effectuation of its purposes.
1.2.3 BINDING DETERMINATIONS. Any action or inaction of the Company or
the Committee relating or pursuant to this Plan shall be within the
absolute discretion of such entity or body and shall be conclusive and
binding upon all Persons. No member of the Committee, or any officer of
the Company, shall be liable for any action or inaction of such entity
or body, or any another Person, member or officer, except in
circumstances involving bad faith on the part of such member or
officer. Subject only to compliance with the express provisions hereof,
the Board and Committee may act in their absolute discretion in matters
within their authority related to this Plan.
1.2.4 RELIANCE ON EXPERTS. In making any determination or in taking or
not taking any action under this Plan, the Committee or the Board, as
the case may be, may obtain and may rely upon the advice of experts,
including professional advisors to the Company. No director, officer or
agent of the Company shall be liable for any such action or
determination taken, made or omitted in good faith.
1.2.5 BIFURCATION OF PLAN ADMINISTRATION; DELEGATION. Subject to the
restrictions set forth in the definition of the term "Committee," the
Board may delegate differing levels of administrative and granting
authority to separate Committees; PROVIDED that each Committee granting
Awards hereunder shall consist exclusively of a member or members of
the Board. A majority of the members of any Committee shall constitute
a quorum. The vote of a majority of the members, assuming the presence
of a quorum, or the unanimous written consent of the Committee shall
constitute action by the Committee. The Committee may delegate
ministerial, non-discretionary functions to individuals who are
officers or employees of the Company.
1.3 PARTICIPATION. Awards may be granted by the Committee only to those
Persons whom the Committee determines to be Eligible Persons. An
Eligible Person who has been granted an Award may, if otherwise
eligible, be granted additional Awards if the Committee so determines.
1.4 SHARES AVAILABLE FOR AWARDS; SHARE LIMITS.
1.4.1 SHARES AVAILABLE. Subject to the provisions of Section 6.2, the
capital stock which may be delivered under this Plan shall be shares of
the Company's authorized but unissued Common Stock and any shares of
its Common Stock held as treasury shares. The shares may be delivered
for any lawful consideration.
1.4.2 SHARE LIMITS. The maximum number of shares of Common Stock which
may be delivered pursuant to Awards shall not exceed five million
5,000,000 shares (the "SHARE LIMIT"). The number of shares subject to
Awards outstanding at any time shall not exceed the number of shares
remaining available for issuance under the Plan. Subject to
2
<PAGE>
adjustment as contemplated by this Section 1.4 and Section 6.2, the
aggregate number of shares subject to Options and SARs which are
granted to any one Participant during any calendar year shall not
exceed 2,000,000, and the aggregate number of shares subject to all
Awards which are granted during any calendar year shall not exceed
4,000,000.
1.4.3 SHARE RESERVATION; REPLENISHMENT AND REISSUE OF UNVESTED AWARDS.
No Award may be granted under this Plan unless, on the Award Date, the
sum of (a) the maximum number of shares issuable at any time pursuant
to such Award PLUS (b) the number of shares issued prior to the Award
Date pursuant to all other Awards, other than shares available for
reissue consistent with applicable legal limitations, PLUS (c) the
maximum number of shares issuable at any time on or after the Award
Date pursuant to outstanding Awards, is less than or equal to the
lesser of the Share Limit or any applicable limitations under federal
or state securities laws. Shares which are subject to or underlie
Awards which expire or for any reason are canceled, terminated,
forfeited, fail to vest, or for any other reason are not paid or
delivered under this Plan, as well as any reacquired shares, shall be
available for subsequent Awards under the Plan, except to the extent
prohibited by applicable law (including Section 162(m)). Except as
limited by applicable law (including Section 162(m)), if an Award is or
may be settled only in cash, such Award need not be counted against any
of the limits under this Section 1.4.
1.5 GRANT OF AWARDS. Subject to the express provisions of this Plan, the
Committee shall determine the number of shares of Common Stock subject
to each Award, the price (if any) to be paid for the shares or the
Award and, in the case of Performance Share Awards, in addition to the
matters addressed in Section 1.2.2, the specific objectives, goals and
performance criteria (such as an increase in sales, market value,
earnings or book value over a base period, the years of service before
vesting, the relevant job classification or level of responsibility or
other factors) which further define the terms of the Performance Share
Award. Each Award shall be evidenced by an Award Agreement signed by
the Company and, if required by the Committee, the Participant.
1.6 AWARD PERIOD. Any and all Options, SARs, warrants and similar rights
shall expire, and any other Awards shall either vest or be forfeited,
no later than 120 months after the Award Date or such earlier date as
the Committee may provide in the Award Agreement.
1.7 LIMITATIONS ON EXERCISE AND VESTING OF AWARDS.
1.7.1 LIMITATION ON EXERCISE. Unless otherwise expressly provided
herein, in the Award Agreement, or by the Committee, no Award shall
become exercisable or shall vest until at least six months after the
initial Award Date, and once exercisable an Award shall remain
exercisable until the expiration or earlier termination of the Award.
1.7.2 PROCEDURE FOR EXERCISE. Any vested Award shall be deemed
exercised upon (a) receipt by the Company of written notice of exercise
from the Participant, (b) receipt by the Company of the required
payment in accordance with Section 2.2.2 and (c) satisfaction by the
Participant of any other requirements of exercise, including those
contained in Section 6.4.
3
<PAGE>
1.7.3 FRACTIONAL SHARES/MINIMUM ISSUE. Awards may only be exercised for
whole shares. The Committee, however, may determine that cash, other
securities, or other property shall be paid or transferred in lieu of
any fractional share interests. No fewer than 100 shares at a time may
be purchased upon the exercise of any Award, unless the number of
shares purchased at such time is the total number of shares then
available for purchase under the Award.
1.8 ACCEPTANCE OF PROMISSORY NOTES TO FINANCE EXERCISE. With the
Committee's express approval, the Company may, in its sole discretion,
accept one or more promissory notes from any Participant in connection
with the exercise or receipt of an outstanding Award; but any such note
shall be subject to the following terms and conditions:
1.8.1 PRINCIPAL. The principal of the note shall not exceed the amount
required to be paid to the Company upon the exercise or receipt of such
Award, and the note shall be delivered directly to the Company in
consideration of such exercise or receipt.
1.8.2 TERM. The initial term of the note shall be determined by the
Committee; but the term of the note, including extensions, shall not
exceed a period of five years.
1.8.3 RECOURSE; SECURITY. The note shall provide for full recourse to
the Participant and shall bear interest at a rate determined by the
Committee; PROVIDED that such interest rate shall not be less than the
interest rate necessary to avoid the imputation of interest under the
Code. If required by the Committee in accordance with applicable law,
the note shall be secured by a pledge of any shares or rights financed
thereby. The terms, repayment provisions, and collateral release
provisions of the note and the pledge securing the note shall conform
with applicable rules and regulations of the Federal Reserve Board as
then in effect.
1.8.4 TERMINATION OF EMPLOYMENT. If the employment or service of the
Participant terminates, the unpaid principal balance of the note shall
become due and payable no later than the 10th business day after such
termination.
1.8.5 OTHER CONDITIONS. Participants who are not employees or directors
of the Company shall not be entitled to purchase shares of Common Stock
with a promissory note, unless the note is adequately secured by
collateral other than the shares of Common Stock. If newly issued
shares of Common Stock are delivered to a Participant under the Plan,
that portion of the exercise or purchase price which is equivalent to
any par value of such shares must be paid in cash, for services
rendered or for other valid consideration.
1.9 TRANSFER RESTRICTIONS AND EXCEPTIONS.
1.9.1 LIMIT ON EXERCISE AND TRANSFER. Unless otherwise expressly
provided in (or pursuant to) this Section 1.9 or required by applicable
law: (a) all Awards are non-transferable and shall not be subject in
any manner to sale, transfer, anticipation, alienation, assignment,
pledge, encumbrance or charge; (b) Awards may be exercised only by the
Participant; and (c) amounts payable or shares issuable pursuant to an
Award shall be delivered only to (or for the account of) the
Participant.
4
<PAGE>
1.9.2 EXCEPTIONS TO LIMITS ON TRANSFER. The exercise and transfer
restrictions in Section 1.9.1 shall not apply to:
(a) the designation of a Beneficiary by the Participant; if
the Participant has died, transfers to or exercises by the
Participant's Beneficiary; or, in the absence of a validly
designated Beneficiary, transfers by will or the laws of
descent and distribution; or
(b) the authorization by the Committee of "cashless exercise"
procedures with third parties who provide financing for or
otherwise facilitate the exercise of Awards consistent with
applicable laws and the express authorization of the
Committee.
1.10 REPRICING/CANCELLATION AND REGRANT/WAIVER OF RESTRICTIONS. Subject to
Section 1.4 and Section 6.6 and the specific limitations on Awards
contained in this Plan, the Committee may from time to time authorize,
generally or in specific cases only, for the benefit of any
Participant, any adjustment in the term, exercise or purchase price, or
vesting schedule of, the number of shares subject to, or the
restrictions upon an Option, SAR or other Award by cancellation of an
outstanding Award and a subsequent regranting of a replacement Award,
amendment, substitution of an outstanding Award, waiver or any other
legally valid means. Such amendment or other action may result in,
among other things, an exercise, base or purchase price which is higher
or lower than the exercise, base or purchase price of the original or
prior Award, provide for a greater or lesser number of shares subject
to the Award, or provide for a longer or shorter vesting or exercise
period; PROVIDED, that the terms of any regranted, amended or
substitute Award shall meet the requirements of this Plan as of the
date of regrant, amendment, substitution or other action.
2. OPTIONS
2.1 GRANTS. One or more Options may be granted under this Section to any
Eligible Person. Each Option granted shall be designated by the
Committee, in the applicable Award Agreement, as either an Incentive
Stock Option (subject to Section 2.4) or a Nonqualified Stock Option.
2.2 OPTION PRICE.
2.2.1 PRICING LIMITS. The purchase price per share of the Common Stock
covered by each Option shall be determined by the Committee at the time
the Award is authorized, but, for so long as required by applicable
law, the purchase price per share shall be at least 85% (110% in the
case of a Participant described in Section 2.5) of the Fair Market
Value of the Common Stock as of the Award Date (or at the time of
amendment, if the exercise price is amended) and at least equal to the
par value of the Common Stock.
2.2.2 PAYMENT PROVISIONS. The purchase price of any shares purchased on
exercise of an Option shall be paid in full at the time of each
purchase in one or a combination of the following methods:
5
<PAGE>
(a) in cash or by electronic funds transfer;
(b) by certified or cashier's check payable to the order of
the Company;
(c) if authorized by the Committee or specified in the
applicable Award Agreement, by a promissory note of the
Participant consistent with the requirements of Section 1.8
and 6.4;
(d) by notice and third party payment in such manner as may be
authorized by the Committee; or
(e) by the delivery of shares of Common Stock already owned by
the Participant; PROVIDED that the Committee may in its
absolute discretion limit the Participant's ability to
exercise an Award by delivering such shares, and any shares
delivered which were initially acquired from the Company must
have been owned by the Participant for at least six months as
of the date of delivery. Shares of Common Stock used to
satisfy the exercise price of an Option shall be valued at
their Fair Market Value on the date of exercise.
2.2.3 "CASHLESS EXERCISE" PROVISIONS. Without limiting the generality
of the foregoing, the Committee may provide that an Option can be
exercised and payment made by delivering a properly executed exercise
notice together with irrevocable instructions to a broker to promptly
deliver to the Company the amount of sale proceeds necessary to pay the
exercise price and, unless otherwise prohibited by the Committee or
applicable law, any applicable tax withholding under Section 6.5.
2.2.4 DELIVERY CONDITION. The Company shall not be obligated to deliver
certificates for any shares of Common Stock on exercise of an Option
unless and until it receives full payment of the exercise price and any
related withholding obligations have been satisfied.
2.3 MINIMUM VESTING/EXERCISABILITY OF OPTIONS. For so long as required by
applicable law, and subject to Sections 2.6 and 6.2-.4 and to other
reasonable conditions such as continued employment, each Option issued
to an Eligible Person who is not an officer, director or consultant of
the Company or any affiliate shall vest and become exercisable at the
rate of at least 20% per year over five years from the date of grant of
the Option.
2.4 LIMITATIONS ON GRANT AND TERMS OF INCENTIVE STOCK OPTIONS.
2.4.1 $100,000 LIMIT. If incentive stock options of a Participant
become exercisable during any calendar year such that Common Stock
issuable pursuant to such newly-exercisable incentive stock options has
an aggregate Fair Market Value in excess of $100,000, taking into
account both Common Stock subject to Incentive Stock Options under this
Plan and Common Stock subject to incentive stock options under all
other plans of Vantis Corporation or any other includable parent or
subsidiary corporations (as these terms are used under Section 422(d)
and defined in Section 424(e) and (f) of the Code), such options shall
be treated as nonqualified stock options to the extent of such excess.
For this purpose, the Fair Market Value of the Common Stock subject to
6
<PAGE>
exercisable options shall be determined as of the date the options were
awarded. In reducing the number of options treated as incentive stock
options to meet the $100,000 limit, the most recently granted options
shall be redesignated first. To the extent a redesignation of
simultaneously granted options is necessary to meet the $100,000 limit,
the Committee may, in the manner and to the extent permitted by law,
designate which shares of Common Stock are to be treated as shares
acquired pursuant to the exercise of an incentive stock option.
2.4.2 OPTION PERIOD. Subject to Section 1.6, each Option and all rights
thereunder shall expire no later than 120 months after the Award Date.
2.4.3 OTHER CODE LIMITS. Incentive Stock Options may only be granted to
Eligible Employees of the Company who meet the other eligibility
requirements of the Code. Any Award Agreement relating to Incentive
Stock Options shall impose such other terms and conditions as from time
to time may be necessary to qualify the Option as an "incentive stock
option," as defined in Section 422 of the Code.
2.5 LIMITS ON 10% HOLDERS. No Incentive Stock Option may be granted to any
Eligible Employee who, at the time such Option is granted, owns (or is
deemed to own under Section 424(d) of the Code) shares of outstanding
common stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or AMD, unless the
exercise price of such Option is at least 110% of the Fair Market Value
of the Common Stock subject to the Option and such Option by its terms
is not exercisable after the expiration of five years from the Award
Date.
2.6 TERMINATION OF EMPLOYMENT; DISCRETIONARY AUTHORITY.
2.6.1 OPTIONS - RESIGNATION; ETC. If a Participant's employment by, or
other approved, specific service to, the Company terminates for any
reason other than Total Disability or death, and such termination is
not a Termination for Cause, the Participant shall have, subject to
earlier expiration or termination pursuant to or as contemplated by
Section 1.6 or 6.2, 90 days after the Severance Date (or such other
period as may be provided in such Participant's Award Agreement in
accordance with Section 25102(o) of the California Corporate Securities
Law of 1968, or any successor provision, and the regulations
promulgated thereunder) to exercise any Option which has vested on or
before the Severance Date; PROVIDED that an Option which is designated
as an Incentive Stock Option must be exercised within 3 months of the
Severance Date in order to qualify as an "incentive stock option" under
Section 422 of the Code. Unless the Committee otherwise provides in the
Participant's Award Agreement, any Option which has not vested on or
before the Severance Date shall terminate on the Severance Date.
2.6.2 OPTIONS - TERMINATION FOR CAUSE. If a termination of employment
or other service is a Termination for Cause or a voluntary resignation
in anticipation of or in connection with a Termination for Cause, the
Participant's Options, whether vested or not, shall terminate on the
Severance Date.
7
<PAGE>
2.6.3 OPTIONS - DEATH OR TOTAL DISABILITY. If a Participant's
employment by, or other approved, specific service to, the Company
terminates as a result of Total Disability or death, the Participant,
the Participant's Personal Representative or the Participant's
Beneficiary, as the case may be, shall have, subject to earlier
expiration or termination pursuant to or as contemplated by Section 1.6
or 6.2, 12 months after the Severance Date (or such shorter period as
may be provided in such Participant's Award Agreement in accordance
with Section 25102(o) of the California Corporate Securities Law of
1968, or any successor provision, and the regulations promulgated
thereunder) to exercise any Option which has vested on or before the
Severance Date; PROVIDED that, in the case of Total Disability which is
not within the meaning of Section 22(e)(3) of the Code, an Option which
is designated as an Incentive Stock Option must be exercised within 3
months of the Severance Date in order to qualify as an "incentive stock
option" under Section 422 of the Code. Unless the Committee otherwise
provides in the Participant's Award Agreement, any Option which has not
vested on or before the Severance Date shall terminate on the Severance
Date.
2.6.4 CERTAIN SARS. Unless the Committee otherwise provides, any SAR
granted concurrently or in tandem with an Option shall have the same
post-termination provisions and exercisability periods as the Option to
which it relates.
2.6.5 COMMITTEE DISCRETION. Notwithstanding the foregoing provisions of
this Section 2.6, in the event of, or in anticipation of, a termination
of employment or service with the Company which does not qualify as a
Termination for Cause, the Committee may increase that portion of the
Participant's Award which is available to the Participant, the
Participant's Personal Representative or the Participant's Beneficiary,
as the case may be, or, subject to the provisions of Section 1.6, may
extend the exercisability period of such Participant's Award, all upon
such terms as the Committee expressly approves by resolution or by
amendment to the Award Agreement.
2.7 DELIVERY OF FINANCIAL STATEMENTS. To the extent required and
applicable, the Company shall deliver to Participants annual financial
statements of the Company sufficient to satisfy the requirements of
Section 260.140.46 of Title 10 of the California Code of Regulations.
3. STOCK APPRECIATION RIGHTS
(INCLUDING LIMITED STOCK APPRECIATION RIGHTS)
3.1 GRANTS. Subject to any applicable limitations under California law, the
Committee may grant Stock Appreciation Rights to any Eligible Person
concurrently with the grant of another Award, in respect of all or any
part of an outstanding Award, or independently of any other Award. Any
Stock Appreciation Right granted in connection with an Incentive Stock
Option shall contain such terms as may be required to comply with the
provisions of Section 422 of the Code and the regulations promulgated
thereunder, unless the holder agrees otherwise.
3.2 PRICING LIMITS. The pricing restrictions applicable to Options under
Section 2.2.1 of this Plan shall apply as well to the base or reference
price of SARs granted under this Plan.
8
<PAGE>
3.3 EXERCISE OF STOCK APPRECIATION RIGHTS.
3.3.1 EXERCISABILITY. Unless the Award Agreement or the Committee
otherwise provides, a Stock Appreciation Right related to another Award
shall become exercisable at such time or times as, and to the extent
that, the related Award becomes exercisable.
3.3.2 EFFECT ON AVAILABLE SHARES. To the extent that a Stock
Appreciation Right is exercised, only the actual number of delivered
shares of Common Stock shall be charged against the maximum amount of
Common Stock which may be delivered pursuant to Awards under this Plan.
The number of shares subject to the Stock Appreciation Right and the
related Option of the Participant shall, however, be counted (without
duplication) for purposes of the individual limits in Section 1.4.2
and, on exercise, shall reduce the number of underlying shares as to
which the SAR and the Option thereafter relate, unless the Award
Agreement otherwise provides.
3.3.3 STAND-ALONE SARS. A Stock Appreciation Right granted
independently of any other Award shall become exercisable pursuant to
the terms of the Award Agreement.
3.3.4 PROPORTIONATE REDUCTION. If an SAR extends to less than all the
shares covered by the related Award, and if a portion of the related
Award is thereafter exercised, the number of shares subject to the
unexercised SAR shall be reduced only if and to the extent that the
remaining number of shares covered by such related Award is less than
the remaining number of shares subject to such SAR.
3.4 PAYMENT.
3.4.1 AMOUNT. Unless the Committee otherwise provides, upon exercise of
a Stock Appreciation Right and the attendant surrender of an
exercisable portion of any related Award, the Participant shall be
entitled to receive, subject to Section 6.5, payment of an amount
determined by multiplying:
(a) the difference obtained by subtracting the exercise or
base reference price per share of Common Stock under the
related Award (if applicable), or the initial share value
specified in the Award, from the Fair Market Value of a share
of Common Stock on the date of exercise of the Stock
Appreciation Right, TIMES
(b) the number of shares with respect to which the Stock
Appreciation Right has been exercised.
3.4.2 FORM OF PAYMENT. The Committee, in its sole discretion, shall
determine the form in which payment shall be made of the amount
determined under Section 3.4.1 above, either solely in cash, solely in
shares of Common Stock (valued at Fair Market Value on the date of
exercise of the Stock Appreciation Right), or partly in such shares and
partly in cash; PROVIDED that the Committee has determined that such
exercise and payment are consistent with applicable law. If the
Committee permits the Participant to elect to receive cash or shares
(or a combination thereof) upon such exercise, the election shall be
subject to any further conditions which the Committee may impose.
9
<PAGE>
3.5 LIMITED STOCK APPRECIATION RIGHTS. Subject to any applicable
limitations under California law, the Committee may grant to any
Eligible Person Stock Appreciation Rights exercisable only upon or in
respect of a Change in Control Event or any other specified event
("LIMITED SARS"), and such Limited SARs may relate to, operate in
tandem or combination with, or substitute for Options, other SARs or
other Awards (or any combination thereof) and may be payable in cash or
shares based on the spread between the base price of the SAR and a
price based upon or equal to the Fair Market Value of the shares during
a specified period or at a specified time within a specified period
before, after or including the date of such event.
4. RESTRICTED STOCK AWARDS
4.1 GRANTS. Subject to any applicable limitations under California law, the
Committee may grant one or more Restricted Stock Awards to any Eligible
Person. Each Restricted Stock Award Agreement shall specify the number
of shares of Common Stock to be issued to the Participant, the date of
such issuance, the consideration to be paid by the Participant for such
shares (which consideration shall not be less than the minimum lawful
consideration under applicable state law), the extent (if any) to which
and the time (if ever) at which the Participant shall be entitled to
dividends and voting or other rights in respect of the shares prior to
vesting, the restrictions imposed on such shares (which may be based on
performance objectives, the passage of time or other factors or any
combination thereof), and the conditions of release or lapse of such
restrictions. Such restrictions shall not lapse earlier than six months
after the Award Date, except to the extent the Committee otherwise
provides. Stock certificates evidencing shares of Restricted Stock
currently subject to restrictions ("RESTRICTED SHARES") shall bear a
legend making appropriate reference to the restrictions imposed
hereunder and shall be held by the Company or by a third party
designated by the Committee until the restrictions on such shares have
lapsed and the shares have vested in accordance with the provisions of
the Award and Section 1.7. Upon issuance of a Restricted Stock Award,
the Participant may be required to provide such further assurance and
documents as the Committee may require to enforce the restrictions.
4.2 RESTRICTIONS.
4.2.1 PRE-VESTING RESTRAINTS. Except as provided in Sections 4.1 and
1.9, Restricted Shares comprising any Restricted Stock Award may not be
sold, assigned, transferred, pledged or otherwise disposed of or
encumbered, either voluntarily or involuntarily, until the restrictions
on such shares have lapsed and the shares have become vested.
4.2.2 DIVIDEND AND VOTING RIGHTS. Unless otherwise provided in the
applicable Award Agreement, a Participant receiving a Restricted Stock
Award shall be entitled to cash dividend and voting rights for all
shares issued even though they are not vested, but such rights shall
terminate immediately as to any Restricted Shares which cease to be
eligible for vesting.
4.2.3 CASH PAYMENTS. If the Participant has been paid or received cash
(including any dividends) in connection with the Restricted Stock
Award, the Award Agreement shall
10
<PAGE>
specify whether and to what extent such cash shall be returned (with or
without an earnings factor) as to any Restricted Shares which cease to
be eligible for vesting.
4.3 RETURN TO THE COMPANY. Unless the Committee otherwise expressly
provides, Restricted Shares which remain subject to restrictions at the
time of termination of employment or service or are subject to other
conditions to vesting which have not been satisfied by the time
specified in the applicable Award Agreement shall not vest and shall be
returned to the Company in such manner and on such terms as the
Committee provides.
5. PERFORMANCE SHARE AWARDS AND STOCK BONUSES
5.1 GRANTS OF PERFORMANCE SHARE AWARDS. Subject to any applicable
limitations under California law, the Committee may grant Performance
Share Awards to Eligible Employees based upon such factors as the
Committee deems relevant in light of the specific type and terms of the
Award. An Award Agreement shall specify the maximum number of shares of
Common Stock (if any) subject to the Performance Share Award, the
consideration to be paid for any such shares as may be issuable to the
Participant (but not less than the minimum lawful consideration), the
duration of the Award and the conditions upon which delivery of any
shares or cash to the Participant shall be based. The amount of cash or
shares or other property which may be deliverable pursuant to such
Award shall be based upon the degree of attainment over a specified
period of not more than 10 years (a "PERFORMANCE CYCLE") of such
measure(s) of the performance of the Company (or any part thereof) or
the Participant as may be established by the Committee. The Committee
may provide for full or partial credit, prior to completion of such
Performance Cycle or the attainment of the performance achievement
specified in the Award, in the event of the Participant's death,
retirement, or Total Disability, a Change in Control Event or in such
other circumstances as the Committee (consistent with Section
6.10.2(b), if applicable) may determine.
5.2 SPECIAL (SECTION 162(M)) PERFORMANCE-BASED AWARDS. Options or SARs
which are granted to Eligible Employees with an exercise price of not
less than Fair Market Value at the applicable date of grant for
purposes of Section 162(m), and which otherwise satisfy the conditions
to deductibility under Section 162(m), are deemed "QUALIFYING AWARDS."
Without limiting the generality of the foregoing, and in addition to
Qualifying Awards granted under other provisions of this Plan, other
performance-based awards within the meaning of Section 162(m)
("PERFORMANCE-BASED AWARDS"), whether in the form of restricted stock,
performance stock, phantom stock or other rights, the vesting of which
depends on the performance of the Company on a consolidated, segment,
subsidiary, or division basis, with reference to revenue growth, net
earnings (before or after taxes or before or after taxes, interest,
depreciation, and/or amortization), net cash flow, return on equity,
assets or net investment, cost containment or reduction, or any
combination thereof (the "BUSINESS CRITERIA"), relative to
preestablished performance goals, may be granted under this Section
5.2, subject to any applicable limitations under California law. The
foregoing terms are used as applied under generally accepted accounting
principles and in the Company's financial reporting. The applicable
Business Criteria and the specific performance goals must be approved
by the Committee in advance of applicable deadlines under the Code and
while the performance relating to
11
<PAGE>
such goals remains substantially uncertain. The applicable performance
measurement period may be not less than one (except as provided in
Section 1.6) nor more than 10 years. The following provisions relate to
all Performance-Based Awards:
5.2.1 ELIGIBLE CLASS. The class of Persons eligible for
Performance-Based Awards is officers of the Company.
5.2.2 MAXIMUM AWARD. Performance-Based Awards may be paid in cash or
shares or any combination thereof. In no event shall grants of
Performance-Based Awards (exclusive of Qualifying Awards) made in any
calendar year to any Eligible Employee relate to more than 500,000
shares of Common Stock. In no event shall grants of Performance-Based
Awards made to any Eligible Employee payable only in cash and not
related to shares provide for payment of more than (a) the lesser of
200% of base salary as of the beginning of the applicable performance
period or $500,000 TIMES (b) the number of years (not more than five)
in the applicable performance period.
5.2.3 COMMITTEE CERTIFICATION. To the extent required by Section
162(m), before any Performance-Based Award is paid, the Committee must
certify that the material terms of the Performance-Based Award were
satisfied.
5.2.4 TERMS AND CONDITIONS OF AWARDS. The Committee shall have
discretion to determine the restrictions or other limitations of the
individual Performance-Based Awards (including the authority to reduce
such Awards, payouts or vesting or to pay no Awards, in its sole
discretion, if the Committee preserves such authority at the time of
grant by language to this effect in its authorizing resolutions or
otherwise).
5.2.5 STOCK PAYOUT FEATURES. In lieu of cash payment of a
Performance-Based Award, the Committee may require or allow all or a
portion of the Performance-Based Award to be paid in the form of shares
of Common Stock, Stock Units, Restricted Shares, an Option, or another
Award.
5.2.6 ADJUSTMENTS FOR MATERIAL CHANGES. Performance goals or other
features of a Performance-Based Award may provide that they (a) shall
be adjusted to reflect a change in corporate capitalization, a
corporate transaction (such as a reorganization, combination,
separation, or merger) or a complete or partial corporate liquidation,
(b) shall be calculated either without regard for or to reflect any
change in accounting policies or practices affecting the Company and/or
the Business Criteria or performance goals or targets, and/or (c) shall
be adjusted for any other circumstance or event, but only to the extent
in each case that such adjustment or determination in respect of
Performance-Based Awards would be consistent with the requirements of
Section 162(m) to qualify as performance-based compensation.
5.3 OTHER STOCK BONUSES. Subject to any applicable limitations under
California law, the Committee may grant a Stock Bonus to any Eligible
Person to reward exceptional or special services, contributions or
achievements in the manner and on such terms and conditions (including
any restrictions on such shares) as determined from time to time by the
Committee. The number of shares so awarded shall be determined by the
Committee.
12
<PAGE>
The Award may be granted independently or in lieu of a cash bonus and
may be paid in the form of Common Stock, Restricted Shares, an Option,
Stock Units (payable in Common Stock or cash) or other Award.
5.4 DEFERRED PAYMENTS. Subject to any applicable limitations under
California law, the Committee may authorize for the benefit of any
Eligible Person the deferral of any payment of cash or shares which may
become due or otherwise payable under this Plan or otherwise, in the
form of Stock Units payable in cash or shares or by other means, and
may provide for accretion thereof based upon such deferment, at the
election or request of such Participant, subject to the other terms of
this Plan. Such deferral shall be subject to such further conditions,
restrictions or requirements as the Committee may impose, subject to
any then vested rights of Participants, and the Committee may provide
for the crediting of dividend equivalents or other earnings thereon.
5.5 CASH BONUSES. The Committee may establish a program of annual cash
incentive awards to be based upon the extent to which performance goals
are met during the performance period. The performance goals may depend
upon the performance of the Company on a consolidated, subsidiary or
division basis with reference to revenues, net earnings (before or
after interest, taxes, depreciation, or amortization), cash flow,
return on equity, assets or net investment, cost containment or
reduction, or achievement of strategic goals (or any combination of
such factors). In addition, the award may depend upon the Eligible
Employee's individual performance.
5.6 ALTERNATIVE PAYMENTS. In lieu of a cash payment of an Award payable in
cash, the Committee may require or allow all or a portion of the Award
to be paid or credited in the form of shares of Common Stock,
Restricted Shares, Stock Units, an Option or other Award.
6. OTHER PROVISIONS
6.1 RIGHTS OF ELIGIBLE PERSONS, PARTICIPANTS AND BENEFICIARIES.
6.1.1 NO COMMITMENT BASED ON ELIGIBILITY. Status as an Eligible Person
shall not be construed as a commitment that any Award shall be made
under this Plan to an Eligible Person or to Eligible Persons generally.
6.1.2 NO EMPLOYMENT CONTRACT. Nothing contained in this Plan, in any
other documents under this Plan, or in any Award shall confer upon any
Eligible Person or Participant any right to continue in the employ or
other service of the Company, constitute any contract or agreement of
employment or other service, affect such Person's status as an
employee-at-will, or interfere in any way with the right of the Company
to change such Person's compensation or other benefits or to terminate
the employment or other service of such Person, with or without cause;
PROVIDED, HOWEVER, that nothing contained in this Section is intended
to adversely affect any express independent right of such Person under
a separate employment or service contract other than an Award
Agreement.
13
<PAGE>
6.1.3 PLAN NOT FUNDED. Awards payable under this Plan shall be payable
in shares or from the general assets of the Company, and (except as
provided in Section 1.4.3) no special or separate reserve, fund or
deposit shall be made to assure payment of such Awards. No Participant,
Beneficiary or other Person shall have any right, title or interest in
any fund or in any specific asset (including shares of Common Stock,
except as expressly otherwise provided) of the Company by reason of any
Award hereunder. Neither the provisions of this Plan (or of any related
documents), the creation or adoption of this Plan, nor any action taken
pursuant to the provisions of this Plan shall create, or be construed
to create, a trust of any kind or a fiduciary relationship between the
Company and any Participant, Beneficiary or other Person. To the extent
that a Participant, Beneficiary or other Person acquires a right to
receive payment pursuant to any Award hereunder, such right shall be no
greater than the right of any unsecured general creditor of the
Company.
6.2 ADJUSTMENTS; ACCELERATION.
6.2.1 ADJUSTMENTS. Upon or in contemplation of any reclassification,
recapitalization, stock split (including a stock split in the form of a
stock dividend) or reverse stock split; any merger, combination,
consolidation or other reorganization ("REORGANIZATION") or any
liquidation or dissolution; any spin-off, split-up, or similar
extraordinary dividend distribution in respect of the Common Stock
(whether in the form of securities or property) ("SPIN-OFF"); any
exchange or other disposition of more than 80% of the Common Stock and
other voting securities of the Company, or any similar, unusual or
extraordinary corporate transaction in respect of the Common Stock
("STOCK SALE"); or a sale of all or substantially all the assets of the
Company as an entirety ("ASSET SALE"); then the Committee shall, in
such manner, to such extent (if any) and at such time as it deems
appropriate and equitable in the circumstances:
(a) in any of such events, proportionately adjust any or all
of (1) the number and type of shares of Common Stock (or other
securities) which thereafter may be made the subject of Awards
(including the specific maxima and numbers of shares set forth
elsewhere in this Plan), (2) the number, amount and type of
shares of Common Stock (or other securities or property)
subject to any or all outstanding Awards, (3) the grant,
purchase, or exercise price of any or all outstanding Awards,
(4) the securities, cash or other property deliverable upon
exercise of any outstanding Awards, or (5) (subject to
limitations under Section 6.10.2(b)) the performance standards
appropriate to any outstanding Awards; or
(b) in any of such events, other than a stock split (including
a stock split in the form of a stock dividend) or reverse
stock split, provide for Settlement of any or all outstanding
Awards, based upon the exercise price of the Award and/or the
distribution or consideration payable to holders of the Common
Stock upon or in respect of such event.
In any of such events, adjustments may be made which would cause
Incentive Stock Options to fail to meet the applicable requirements
thereof without the consent of holders of the affected Incentive Stock
Options.
14
<PAGE>
In any of such events, the Committee may take such action prior to such
event as the Committee deems necessary to permit the Participant to
realize the benefits intended to be conveyed with respect to the
underlying shares in the same manner as is or shall be available to
stockholders generally.
6.2.2 POSSIBLE ACCELERATION OF AWARDS; TERMINATION. The Committee may
expressly provide in an Award Agreement or otherwise, on a case-by-case
basis or as to all Awards of one or more types, that prior to the
occurrence of a Change in Control Event or an event described in
Section 6.2.1 which the Company does not survive, the vesting or
exercisability of an Award or certain or limited benefits thereunder
shall accelerate. The Committee may also accord any Participant the
right to refuse such acceleration, whether pursuant to the Award
Agreement or otherwise, in such circumstances as the Committee may
approve. If the vesting or exercisability of an Award has been
accelerated pursuant to this Section 6.2.2, but the Award is not timely
exercised at or before the applicable event, then the Award shall
terminate, unless the Committee otherwise provides.
Any acceleration of Awards shall comply with applicable legal
requirements and, if necessary to accomplish the purposes of the
acceleration or the circumstances require, may be deemed by the
Committee to occur (subject to Section 6.2.5) a limited period of time
before the event. No discretion with respect to acceleration of an
Award shall apply in the case of a transaction intended to be accounted
for as a pooling of interests transaction, to the extent exercise of
the discretion would be inconsistent with that accounting method.
6.2.3 TERMINATION UPON SETTLEMENT. If the Committee has provided for
Settlement of at least the vested portion of an outstanding Award
pursuant to Section 6.2.1(b) upon or in anticipation of a Change in
Control Event approved by the Board or an event which the Company does
not survive, then the entire outstanding Award shall terminate upon
consummation of the event, unless the Committee otherwise provides.
6.2.4 ACCELERATION UPON TERMINATION OF SERVICE FOLLOWING A CHANGE IN
CONTROL EVENT. If any Participant's employment is terminated by the
Company upon or within one year after a Change in Control Event, and
the termination is not the result of death, Total Disability or a
Termination for Cause, then, subject to the other provisions of this
Section 6.2 (including without limitation Section 6.2.3) and Section
6.4, all outstanding Options held by the Participant shall be deemed
fully vested immediately prior to the Severance Date, irrespective of
the vesting provisions of the Participant's Award Agreement.
6.2.5 POSSIBLE RESCISSION OF ACCELERATION. If the vesting of an Award
has been accelerated expressly in anticipation of an event or subject
to stockholder approval of an event, and the Committee or the Board
later determines that the event will not occur, the Committee may
rescind the effect of the acceleration as to any then outstanding,
unexercised Awards.
6.2.6 GOLDEN PARACHUTE LIMITATION. In no event shall an Award be
accelerated under this Plan to an extent or in a manner which would not
be fully deductible by the Company for federal income tax purposes due
to Section 280G of the Code, nor shall any
15
<PAGE>
payment hereunder be accelerated if any portion of such accelerated
payment would not be deductible by the Company due to Section 280G of
the Code. If a Participant would be entitled to benefits or payments
hereunder and under any other plan or program which would constitute
"parachute payments" as defined in Section 280G of the Code, then the
Participant may by written notice to the Company designate the order in
which such parachute payments shall be reduced or modified so that the
Company is not denied federal income tax deductions for any "parachute
payments" under Section 280G of the Code. Notwithstanding the
foregoing, an employment or other agreement with the Participant,
including an Award Agreement, may expressly provide for benefits in
excess of amounts determined by applying the foregoing Section 280G
limitations.
6.3 EFFECT OF TERMINATION OF SERVICE ON AWARDS. Subject to the provisions
hereof and applicable law, the Committee shall establish the effect of
a termination of employment or service on the rights and benefits of
each Award and in so doing may make distinctions based upon the cause
of termination.
6.3.1 TERMINATION OF CONSULTING OR AFFILIATE SERVICES. If the
Participant is not an Eligible Employee or director and provides
services as an Other Eligible Person, the Committee shall be the sole
judge of whether the Participant continues to render services to the
Company, unless a contract or the Award otherwise provides. If the
Committee notifies the Participant in writing that a termination of
services of the Participant for purposes of this Plan has occurred,
then (unless the contract or Award otherwise expressly provides) the
Participant's termination of services for purposes of Section 2.6, 3,
4.3 or 5 shall be the date which is 10 days after the Committee's
mailing of the notice or, in the case of a Termination for Cause, the
date of the mailing of the notice.
6.3.2 EVENTS NOT DEEMED TERMINATIONS OF SERVICE. Unless the Committee
otherwise provides, the employment or service relationship shall not be
considered terminated in the case of (i) sick leave, (ii) military
leave, or (iii) any other leave of absence authorized by the Committee;
PROVIDED that, unless reemployment upon the expiration of such leave is
guaranteed by contract or law, such leave is for a period of not more
than 90 days. In the case of any Eligible Employee on an approved leave
of absence, continued vesting of the Award while on leave from the
employ of the Company shall be suspended, unless the Committee
otherwise provides or applicable law otherwise requires. In no event
shall an Award be exercised after the expiration of the term set forth
in the Award Agreement.
6.3.3 EFFECT OF CHANGE OF SUBSIDIARY STATUS. For purposes of this Plan
and any Award, if an entity ceases to be a Subsidiary, a termination of
employment or service shall be deemed to have occurred with respect to
each Eligible Person employed by or providing services to the
Subsidiary who does not continue as an Eligible Person in respect of
another entity within the Company.
6.4 COMPLIANCE WITH LAWS. This Plan, the granting and vesting of Awards,
the offer, issuance and delivery of shares of Common Stock, the
acceptance of promissory notes and/or the payment of money under this
Plan or under Awards are subject to compliance with all applicable
federal and state laws, rules and regulations (including but not
limited to state and federal securities law and federal margin
requirements) and to such approvals
16
<PAGE>
by any listing, regulatory or governmental authority as may, in the
opinion of counsel for the Company, be necessary or advisable in
connection therewith. In addition, any securities delivered under this
Plan may be subject to any special restrictions which the Committee may
require to preserve a pooling of interests under generally accepted
accounting principles. Participants granted Awards or acquiring any
securities under this Plan shall provide such assurances and
representations to the Company as the Committee may deem necessary or
desirable to assure compliance with all applicable legal and accounting
requirements.
6.5 TAX MATTERS.
6.5.1 PROVISION FOR TAX WITHHOLDING OR OFFSET. Upon any exercise,
vesting, or payment of any Award or upon the disposition of shares of
Common Stock acquired pursuant to the exercise of an Incentive Stock
Option prior to satisfaction of the holding period requirements of
Section 422 of the Code, the Company shall have the right at its option
to (a) require the Participant (or Personal Representative or
Beneficiary, as the case may be) to pay or provide for payment of the
amount of any taxes which the Company may be required to withhold with
respect to such Award event or payment or (b) deduct from any amount
payable in cash the amount of any taxes which the Company may be
required to withhold with respect to such cash payment. In any case
where a tax is required to be withheld in connection with the delivery
of shares of Common Stock under this Plan, the Committee may in its
sole discretion (subject to Section 6.4) grant to the Participant
(either at the time of the Award or thereafter) the right to elect,
pursuant to such rules and subject to such conditions as the Committee
may establish, to have the Company reduce the number of shares to be
delivered by (or otherwise reacquire) the appropriate number of shares
valued at their then Fair Market Value to satisfy such withholding
obligation.
6.5.2 TAX LOANS. If so provided in the Award Agreement, the Company
may, to the extent permitted by law, authorize a loan to a Participant
in the amount of any taxes which the Company may be required to
withhold with respect to shares of Common Stock received (or disposed
of, as the case may be) by such Participant pursuant to a transaction
described in Section 6.5.1. Such a loan shall be for a term, at a rate
of interest and pursuant to such other terms and conditions as the
Company may establish under applicable law, and such loan need not
comply with the provisions of Section 1.8.
6.6 PLAN AMENDMENT, TERMINATION AND SUSPENSION.
6.6.1 BOARD AUTHORIZATION. The Board may, at any time, terminate or,
from time to time, amend, modify or suspend this Plan, in whole or in
part. No Awards may be granted during any suspension of this Plan or
after termination of this Plan, but the Committee shall retain
jurisdiction as to Awards then outstanding in accordance with the terms
of this Plan.
6.6.2 STOCKHOLDER APPROVAL. To the extent then required under Sections
422 and 424 of the Code or any other applicable law, or to the extent
deemed necessary or advisable by the Board, any amendment to this Plan
shall be subject to stockholder approval.
17
<PAGE>
6.6.3 AMENDMENTS TO AWARDS. Without limiting any other express
authority of the Committee under this Plan, and subject to the express
limits of this Plan, the Committee may, by agreement or resolution and
without the consent of a Participant, waive conditions of or
limitations on Awards which the Committee in the prior exercise of its
discretion has imposed and may make other changes to the terms and
conditions of Awards which do not materially adversely affect the
Participant's rights and benefits under an Award.
6.6.4 LIMITATIONS ON AMENDMENTS TO PLAN AND AWARDS. No amendment,
suspension or termination of this Plan or change of or affecting any
outstanding Award shall, without written consent of the Participant,
materially adversely affect any rights or benefits of the Participant
or obligations of the Company under any Award granted prior to the
effective date of such change. Changes contemplated by Section 6.2
shall not be deemed to constitute changes or amendments for purposes of
this Section 6.6.
6.7 PRIVILEGES OF STOCK OWNERSHIP. Except as otherwise expressly authorized
by the Committee or this Plan, a Participant shall not be entitled to
any right or privilege of stock ownership as to any shares of Common
Stock not actually delivered to and held of record by the Participant.
No adjustment shall be made for dividends or other rights as a
stockholder for which a record date is prior to such date of delivery.
6.8 EFFECTIVE DATE OF THE PLAN. This Plan is effective as of April 2, 1999.
The Plan was approved by the Company's sole stockholder and by the
Board on April 2, 1999.
6.9 TERM OF THE PLAN. No Award shall be granted under this Plan after
February 23, 2009 (the "TERMINATION DATE") or before April 7, 1999.
Unless otherwise expressly provided in this Plan or in an applicable
Award Agreement, any Award granted prior to the Termination Date may
extend beyond such date, and all authority of the Committee with
respect to Awards hereunder, including the authority to amend an Award,
shall continue during any suspension of this Plan and in respect of
Awards outstanding on the Termination Date.
6.10 CONSTRUCTION/SEVERABILITY.
6.10.1 SEVERABILITY. If a court of competent jurisdiction holds any
provision of this Plan or any Award Agreement invalid and
unenforceable, the remaining provisions of this Plan or such Award
Agreement shall continue in effect.
6.10.2 PLAN CONSTRUCTION.
(a) RULE 16B-3. It is the intent of the Company that the
Awards and transactions permitted by Awards generally satisfy
and be interpreted in a manner which, in the case of
Participants who are or may be Section 16 Persons, satisfies
the applicable requirements of Rule 16b-3 so that such Persons
(unless they otherwise agree) shall be entitled to the
benefits of Rule 16b-3 or other exemptive rules under Section
16 of the Exchange Act in respect of those transactions and
shall not be subjected to avoidable liability.
18
<PAGE>
(b) SECTION 162(M). It is the further intent of the Company
that (to the extent the Company or Awards may be or become
subject to limitations on deductibility under Section 162(m))
the Initial Options and Options or SARs subsequently granted
with an exercise or base price not less than Fair Market Value
on the date of grant, and Performance-Based Awards under
Section 5.2 of this Plan which are granted to or held by a
Person subject to Section 162(m), shall qualify as
performance-based compensation or otherwise be exempt from
deductibility limitations under Section 162(m), to the extent
that the Committee authorizing the Award (or the payment
thereof, as the case may be) satisfies any applicable
administrative requirements thereof. This Plan shall be
interpreted consistent with such intent.
6.11 CAPTIONS. Captions and headings are given to the sections and
subsections of this Plan solely as a convenience to facilitate
reference. Such headings shall not be deemed in any way material or
relevant to the construction or interpretation of this Plan or any
provision hereof.
6.12 AWARDS IN SUBSTITUTION FOR AWARDS GRANTED BY OTHER ENTITIES. Awards in
substitution for employee stock options, stock appreciation rights,
restricted stock or other stock-based awards granted by other entities
may be granted to Persons who are or will become Eligible Persons in
connection with (a) a distribution, merger or reorganization by or with
such other entity or an affiliated entity or (b) the acquisition by the
Company, directly or indirectly, of all or a substantial part of the
stock or assets of such other entity.
6.13 NON-EXCLUSIVITY OF PLAN. Nothing in this Plan shall limit or be deemed
to limit the authority of the Committee to grant awards or authorize
any other compensation, with or without reference to the Common Stock,
under any other plan or authority.
7. DEFINITIONS
"AMD" means Advanced Micro Devices, Inc., a Delaware corporation, and its
successors (if any).
"AMD GROUP" means (a) AMD, (b) any affiliate of AMD (as the term "affiliate"
(and the term "control" as used therein) are defined in Rule 405 under the
Securities Act), and (c) any employee benefit plan (or related trust) sponsored
or maintained by one or more of the foregoing, or their respective successors.
"AWARD" means an award of any Option, Stock Appreciation Right, Restricted
Stock, Stock Bonus, Performance Share Award, dividend equivalent or deferred
payment right or other right or security which would constitute a "derivative
security" under Rule 16a-1(c) of the Exchange Act, or any combination thereof,
whether alternative or cumulative, authorized by and granted under this Plan.
"AWARD AGREEMENT" means any writing setting forth the terms of an Award which
has been authorized by the Committee, as such writing may be amended from time
to time.
19
<PAGE>
"AWARD DATE" means the date upon which the Committee took the action granting an
Award or such later date as the Committee designates as the grant or award date
at the time of the Award.
"AWARD PERIOD" means the period beginning on an Award Date and ending on the
expiration date of the applicable Award.
"BENEFICIARY" means the Person, Persons, trust or trusts designated by a
Participant or, in the absence of a designation, entitled by will or the laws of
descent and distribution to receive the benefits specified in the Award
Agreement and under this Plan if the Participant dies; PROVIDED that
"BENEFICIARY" shall mean the Participant's executor or administrator if no other
Beneficiary is designated and able to act under the circumstances.
"BOARD" means the Board of Directors of Vantis Corporation.
"CHANGE IN CONTROL EVENT" means any of the following:
(a) Approval by the stockholders of the Company of the dissolution or
liquidation of Vantis Corporation (other than a dissolution or
liquidation which is approved while members of the AMD Group
beneficially own a majority of the Common Stock); or
(b) Consummation of a merger, consolidation, or other reorganization of
the Company with or into, or a sale or other disposition of all or
substantially all of the Company's business and/or assets as an
entirety to, one or more entities which are not Subsidiaries or other
affiliates of the Company (each, a "BUSINESS COMBINATION"), unless (i)
as a result of the Business Combination at least 50% of the voting
securities then entitled to vote generally in the election of directors
(the "VOTING STOCK") of the entity surviving or resulting from the
Business Combination, or a parent thereof (the "SUCCESSOR ENTITY"),
immediately after the Business Combination are or will be directly or
indirectly owned by stockholders of the Company immediately before the
Business Combination, (ii) no Person (excluding the Successor Entity or
an Excluded Person) directly or indirectly beneficially owns more than
50% of the combined voting power of the Voting Stock of the Successor
Entity, after giving effect to the Business Combination, except to the
extent that such ownership existed prior to the Business Combination,
and (iii) at least 50% of the members of the board of directors of the
Successor Entity were members of the Board at the time of execution of
the initial agreement or action of the Board providing for the Business
Combination; or
(c) Any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), other than an Excluded Person, becomes the direct or
indirect beneficial owner (as defined in Rule 13d-3 under the Exchange
Act) of securities of the Company representing more than 30% of the
combined voting power of Voting Stock of the Company, other than as a
result of (i) an acquisition directly from the Company, (ii) an
acquisition by the Company, (iii) an acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company
or a Successor Entity, or (iv) an acquisition by any entity pursuant to
a transaction which is expressly excluded under subparagraph (b) above;
or
(d) During any period not longer than two consecutive years,
individuals who at the beginning of such period constituted the Board,
and any new director (other than any
20
<PAGE>
individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board)
whose appointment, election, or nomination for election by Vantis
Corporation's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose appointment, election
or nomination for election was previously so approved, cease for any
reason to constitute a majority of the Board.
For purposes of determining whether a Change in Control Event has occurred, a
transaction includes all transactions in a series of related transactions.
"CODE" means the Internal Revenue Code of 1986, as amended from time to time.
"COMMISSION" means the Securities and Exchange Commission.
"COMMITTEE" means (a) any one or more committees of director(s) appointed by the
Board to administer this Plan with respect to the Awards, acting within the
scope of authority delegated thereto by the Board, or (b) the Board as a whole.
At least one Committee shall be comprised of two or more directors, each of whom
in respect of any decision involving both (1) a Participant affected by the
decision who is or may be subject to limits under Section 162(m) in respect of a
particular Award and (2) compensation intended as a performance-based
compensation within the meaning of Section 162(m), shall be an "outside
director" as defined in Section 162(m). In acting on any grant or Award-related
transaction with or for the benefit of a Section 16 Person, "COMMITTEE" means a
committee comprised entirely of "non-employee directors" within the meaning of
Rule 16b-3 under the Exchange Act, or the Board as a whole; PROVIDED, HOWEVER,
that if one or more directors acting on such grant or transaction fail to
qualify as "non-employee directors" within the meaning of such rule, the
validity of any action taken by such directors or by the Committee or the Board
shall not be affected thereby.
"COMMON STOCK" means the common stock, par value $0.01 per share, of Vantis
Corporation and such other securities or property as may become the subject of
Awards, or become subject to Awards, pursuant to an adjustment made under
Section 6.2 of this Plan.
"COMPANY" means Vantis Corporation and/or its Subsidiaries, as the context
requires; PROVIDED that with respect to Common Stock, the grant, exercise or
disposition of an Award or the provisions of Sections 1.8, 5.2.1, 6.2.1, 6.2.3,
6.4 and 6.10, "COMPANY" means only Vantis Corporation.
"ELIGIBLE EMPLOYEE" means an officer (whether or not a director) or employee of
the Company.
"ELIGIBLE PERSON" means an Eligible Employee, or any Other Eligible Person, as
determined by the Committee; PROVIDED that Eligible Persons shall be limited to
those persons eligible under Section 25102(o) of the California Corporate
Securities Law of 1968 and Rule 701 under the Securities Act, as each may be
amended from time to time.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from time
to time.
21
<PAGE>
"EXCLUDED PERSON" means (a) any Person described in and satisfying the
conditions of Rule 13d-1(b)(1) under the Exchange Act, (b) AMD (or an affiliate,
successor, heir, descendant or related party of or to AMD), (c) the Company or
(d) an employee benefit plan (or related trust) sponsored or maintained by the
Company or the Successor Entity.
"FAIR MARKET VALUE" with respect to any stock means, as of the date of
determination:
(a) if the stock is listed or admitted to trade on a national
securities exchange, the closing price of the stock on such date on the
composite tape of the principal such exchange, or, if there is no
trading of the stock on such date, then the closing price of the stock
as quoted on such composite tape on the next preceding date on which
there was trading in such shares;
(b) if the stock is not listed or admitted to trade on a national
securities exchange, the closing price for the stock on such date, as
reported by the National Association of Securities Dealers, Inc.
("NASD") through the Nasdaq National Market or a similar reporting
system, or by a similar reporting organization if the NASD is no longer
reporting such information on a reporting system;
(c) if the stock is not listed or admitted to trade on a national
securities exchange and is not reported by the NASD or a similar
reporting organization, the mean between the bid and asked price for
the stock on such date, as furnished by the NASD or a similar
organization; or
(d) if the stock is not listed or admitted to trade on a national
securities exchange and is not reported by the NASD or a similar
reporting organization, and if bid and asked prices for the stock are
not furnished by the NASD or a similar organization, the value
established by the Committee as of such date for purposes of this Plan.
Notwithstanding the foregoing, the Fair Market Value of the Common Stock for
purposes of determining the exercise price of the Initial Options shall be based
on the results of an independent appraisal of the equity value of Vantis
conducted prior to the time such Options are granted.
"INCENTIVE STOCK OPTION" or "ISO" means an Option which is designated and
intended as an incentive stock option within the meaning of Section 422 of the
Code, the award of which contains such provisions (including but not limited to
the receipt of stockholder approval of this Plan, if the award is made prior to
such approval) and is made under such circumstances and to such Persons as may
be necessary to comply with that section.
"INITIAL OPTIONS" means the Options granted to Participants concurrently with or
shortly after the adoption of this Plan.
"NONQUALIFIED STOCK OPTION" means an Option which is designated as a
nonqualified stock option and includes any Option intended as an Incentive Stock
Option which fails to meet the applicable legal requirements thereof. Any Option
granted hereunder which is not designated as an Incentive Stock Option shall be
deemed to be a nonqualified stock option and not an incentive stock option under
the Code.
22
<PAGE>
"OPTION" means an option to purchase Common Stock granted under this Plan. The
Committee shall designate any Option granted to an Eligible Person as a
Nonqualified Stock Option or an Incentive Stock Option.
"OTHER ELIGIBLE PERSON" means any director, individual consultant, advisor or
(to the extent provided below) agent, including an employee or officer of a
parent corporation, who renders or has rendered bona fide services (including
services as a director but not including services in connection with the
offering or sale of securities of the Company in a capital raising transaction)
to the Company and who is selected to participate in this Plan by the Committee.
A director of Vantis Corporation who is a Section 16 Person shall not be
selected as an Other Eligible Person, unless such decision is approved by the
Board. A non-employee agent providing bona fide services to the Company (other
than as an eligible advisor or consultant) may be selected as an Other Eligible
Person only if such agent's participation in this Plan would not adversely
affect (a) Vantis Corporation's eligibility to use Form S-8 in the future to
register under the Securities Act the offering of securities issuable under this
Plan by the Company or (b) the Company's compliance with any other applicable
laws.
"PARTICIPANT" means an Eligible Person who has been granted an Award under this
Plan.
"PERFORMANCE SHARE AWARD" means an Award of a right to receive shares of Common
Stock under Section 5.1, or a Performance-Based Award under Section 5.2, the
issuance or payment of which is contingent upon, among other conditions, the
attainment of performance objectives specified by the Committee.
"PERSON" means an association, corporation, individual, partnership, trust or
any other entity or organization, including a governmental entity and a "person"
as that term is used under Section 13(d) or 14(d) of the Exchange Act.
"PERSONAL REPRESENTATIVE" means the Person or Persons who, upon the disability
or legal incompetence of a Participant, have acquired on behalf of the
Participant, by legal proceeding or otherwise, the power to exercise rights or
receive benefits under this Plan by virtue of having become the legal
representative of the Participant.
"PLAN" means this 1999 Performance Award Plan.
"RESTRICTED SHARES" or "RESTRICTED STOCK" means shares of Common Stock awarded
to a Participant under this Plan, subject to payment of such consideration, if
any, such conditions on vesting (which may include, among other things, the
passage of time, achievement of specified performance objectives or other
factors) and such transfer and other restrictions as are established in or
pursuant to this Plan and the related Award Agreement, for so long as such
shares remain unvested or restricted under the terms of the applicable Award
Agreement.
"RULE 16B-3" means Rule 16b-3 as promulgated by the Commission under the
Exchange Act, as such rule may be amended from time to time.
"SECTION 16 PERSON" means a Person subject to Section 16(a) of the Exchange Act.
"SECTION 162(M)" means Section 162(m) of the Code.
23
<PAGE>
"SECURITIES ACT" means the Securities Act of 1933, as amended from time to time.
"SETTLEMENT" means a cash payment, conversion, assumption or exchange with
respect to an outstanding Award.
"SEVERANCE DATE" means the date on which a Participant's employment by, or other
specified service to, the Company terminates.
"STOCK APPRECIATION RIGHT" or "SAR" means a right authorized under this Plan to
receive a number of shares of Common Stock or an amount of cash, or a
combination of shares and cash, the aggregate amount or value of which is
determined by reference to a change in the Fair Market Value of the Common
Stock.
"STOCK BONUS" means an Award of shares of Common Stock granted under this Plan
for no consideration other than past services and without restriction other than
such transfer or other restrictions as the Committee may deem advisable to
assure compliance with law.
"STOCK UNIT" means a bookkeeping entry which serves as a unit of measurement
relative to a share of Common Stock for purposes of determining the payment of a
deferred benefit or right under the Plan.
"SUBSIDIARY" means any corporation or other entity a majority of whose
outstanding voting stock or voting power is beneficially owned directly or
indirectly by Vantis Corporation.
"TERMINATION FOR CAUSE" with respect to a Participant means (unless otherwise
expressly provided in the applicable Award Agreement or other contract) a
termination of service based upon a finding by the Committee, acting in good
faith and based on its reasonable belief at the time, that the Participant:
(a) is or has been dishonest, incompetent, or negligent in the
discharge of such Participant's duties to the Company; or has refused
to perform stated or assigned duties; or
(b) has committed an act of theft, embezzlement or fraud, a breach of
confidentiality, an unauthorized disclosure or use of inside
information, customer lists, trade secrets or other confidential
information, a breach of fiduciary duty, or a willful material
violation of any law, rule or regulation or rule or policy of the
Company or an affiliate; or has been convicted of a felony or
misdemeanor (other than minor traffic violations or similar offenses);
or
(c) has materially breached any of the provisions of any agreement with
the Company or a parent corporation; or
(d) has engaged in unfair competition with, or otherwise acted
intentionally in a manner injurious to the reputation, business or
assets of, the Company or an affiliate; has induced a customer to break
or terminate any contract with the Company or an affiliate; or has
induced any principal for whom the Company or an affiliate acts as
agent to terminate such agency relationship.
24
<PAGE>
A Termination for Cause shall be deemed to occur (subject to reinstatement upon
a contrary final determination by the Committee) on the date on which the
Company first delivers written notice to the Participant of a finding of
Termination for Cause.
"TOTAL DISABILITY" means any medically determinable physical or mental condition
or impairment which prevents the Participant from performing the essential
functions of such Participant's job.
"VANTIS CORPORATION" means Vantis Corporation, a Delaware corporation, and its
successors (if any).
25
<PAGE>
Exhibit 99.2
VANTIS CORPORATION
1999 LEADERSHIP AWARD PLAN
<PAGE>
TABLE OF CONTENTS
Page
----
1. The Plan...................................................................1
1.1 Purpose...........................................................1
1.2 Administration and Authorization; Power and Procedure.............1
1.3 Participation.....................................................2
1.4 Shares Available for Awards; Share Limits.........................2
1.5 Grant of Awards...................................................3
1.6 Award Period......................................................3
1.7 Limitations on Exercise and Vesting of Awards.....................3
1.8 Acceptance of Promissory Notes to Finance Exercise................4
1.9 Transfer Restrictions and Exceptions..............................4
1.10 Repricing/Cancellation and Regrant/Waiver of Restrictions.........5
2. Options....................................................................5
2.1 Grants............................................................5
2.2 Option Price......................................................5
2.3 Limitations on Grant and Terms of Incentive Stock Options.........6
2.4 Limits on 10% Holders.............................................7
2.5 Termination of Employment; Discretionary Authority................7
3. Stock Appreciation Rights..................................................8
3.1 Grants............................................................8
3.2 Pricing Limits....................................................8
3.3 Exercise of Stock Appreciation Rights.............................8
3.4 Payment...........................................................9
3.5 Limited Stock Appreciation Rights.................................9
4. Restricted Stock Awards....................................................9
4.1 Grants............................................................9
4.2 Restrictions.....................................................10
4.3 Return to the Company............................................10
5. Performance Share Awards and Stock Bonuses................................10
5.1 Grants of Performance Share Awards...............................10
5.2 Special (Section 162(m)) Performance-Based Awards................11
5.3 Other Stock Bonuses..............................................12
5.4 Deferred Payments................................................12
5.5 Cash Bonuses.....................................................12
5.6 Alternative Payments.............................................13
i
<PAGE>
6. Other Provisions..........................................................13
6.1 Rights of Eligible Persons, Participants and Beneficiaries.......13
6.2 Adjustments; Acceleration........................................14
6.3 Effect of Termination of Service on Awards.......................15
6.4 Compliance with Laws.............................................16
6.5 Tax Matters......................................................16
6.6 Plan Amendment, Termination and Suspension.......................17
6.7 Privileges of Stock Ownership....................................18
6.8 Effective Date of the Plan.......................................18
6.9 Term of the Plan.................................................18
6.10 Construction/Severability........................................18
6.11 Captions.........................................................19
6.12 Awards in Substitution for Awards Granted by Other Entities......19
6.13 Non-Exclusivity of Plan..........................................19
7. Definitions...............................................................19
ii
<PAGE>
VANTIS CORPORATION
1999 LEADERSHIP AWARD PLAN
1. THE PLAN
1.1 PURPOSE. The purposes of this Plan are (a) to promote the success of
the Company and the interests of its stockholders by attracting,
motivating, retaining and rewarding Eligible Persons with awards and
incentives for high levels of individual performance and improved
Company financial performance and (b) to further align the interests of
Participants with those of stockholders generally through awards of
stock-based incentives. Capitalized terms are defined in Section 7.
1.2 ADMINISTRATION AND AUTHORIZATION; POWER AND PROCEDURE.
1.2.1 COMMITTEE. This Plan shall be administered by, and all Awards to
Eligible Persons shall be authorized by, the Committee. Actions of the
Committee with respect to the administration of this Plan shall be
taken pursuant to a majority vote or by unanimous written consent of
its members.
1.2.2 PLAN AWARDS; INTERPRETATION; POWERS OF COMMITTEE. Subject to the
express provisions of this Plan and any express limitations on the
delegated authority of a Committee, the Committee shall have the
authority to:
(a) determine Eligible Persons;
(b) grant Awards to Eligible Persons; determine the Award Date
(which may be a date on or after, but not before, the
Committee's authorization of the Award); determine the price
at which securities shall be offered or awarded and the amount
of such securities to be offered or awarded; determine,
consistent with the express limitations of this Plan, the
other specific terms and conditions of such Awards; establish
the installments (if any) in which such Awards shall vest or
become exercisable, or determine that no delayed
exercisability or vesting is required; and establish the
events of termination or reversion of such Awards;
(c) approve the forms of Award Agreements (which need not be
identical either as to type of Award or among Participants);
(d) construe and interpret this Plan and any agreements
defining the rights and obligations of the Company and
Participants under this Plan; further define the terms used in
this Plan; and prescribe, amend and rescind rules and
regulations relating to the administration of this Plan;
(e) subject to any required consent under Section 6.6, cancel,
modify, or waive the Company's rights with respect to, or
modify, discontinue, suspend, or terminate, any or all
outstanding Awards held by Eligible Persons;
<PAGE>
(f) subject to Sections 1.6 and 1.7, accelerate or extend the
vesting or exercisability of any or all outstanding Awards or
extend the term thereof; and
(g) make all other determinations and take such other actions
as contemplated by this Plan or as may be necessary or
advisable for the administration of this Plan and the
effectuation of its purposes.
1.2.3 BINDING DETERMINATIONS. Any action or inaction of the Company or
the Committee relating or pursuant to this Plan shall be within the
absolute discretion of such entity or body and shall be conclusive and
binding upon all Persons. No member of the Committee, or any officer of
the Company, shall be liable for any action or inaction of such entity
or body, or any another Person, member or officer, except in
circumstances involving bad faith on the part of such member or
officer. Subject only to compliance with the express provisions hereof,
the Board and Committee may act in their absolute discretion in matters
within their authority related to this Plan.
1.2.4 RELIANCE ON EXPERTS. In making any determination or in taking or
not taking any action under this Plan, the Committee or the Board, as
the case may be, may obtain and may rely upon the advice of experts,
including professional advisors to the Company. No director, officer or
agent of the Company shall be liable for any such action or
determination taken, made or omitted in good faith.
1.2.5 BIFURCATION OF PLAN ADMINISTRATION; DELEGATION. Subject to the
restrictions set forth in the definition of the term "Committee," the
Board may delegate differing levels of administrative and granting
authority to separate Committees; PROVIDED that each Committee granting
Awards hereunder shall consist exclusively of a member or members of
the Board. A majority of the members of any Committee shall constitute
a quorum. The vote of a majority of the members, assuming the presence
of a quorum, or the unanimous written consent of the Committee shall
constitute action by the Committee. The Committee may delegate
ministerial, non-discretionary functions to individuals who are
officers or employees of the Company.
1.3 PARTICIPATION. Awards may be granted by the Committee only to those
Persons whom the Committee determines to be Eligible Persons. An
Eligible Person who has been granted an Award may, if otherwise
eligible, be granted additional Awards if the Committee so determines.
1.4 SHARES AVAILABLE FOR AWARDS; SHARE LIMITS.
1.4.1 SHARES AVAILABLE. Subject to the provisions of Section 6.2, the
capital stock which may be delivered under this Plan shall be shares of
the Company's authorized but unissued Common Stock and any shares of
its Common Stock held as treasury shares. The shares may be delivered
for any lawful consideration.
1.4.2 SHARE LIMITS. The maximum number of shares of Common Stock which
may be delivered pursuant to Awards shall not exceed six million
6,000,000 shares (the "SHARE LIMIT"). The number of shares subject to
Awards outstanding at any time shall not exceed the number of shares
remaining available for issuance under the Plan. Subject
2
<PAGE>
to adjustment as contemplated by this Section 1.4 and Section 6.2, the
aggregate number of shares subject to Options and SARs which are
granted to any one Participant during any calendar year shall not
exceed 3,500,000, and the aggregate number of shares subject to all
Awards which are granted during any calendar year shall not exceed
4,000,000.
1.4.3 SHARE RESERVATION; REPLENISHMENT AND REISSUE OF UNVESTED AWARDS.
No Award may be granted under this Plan unless, on the Award Date, the
sum of (a) the maximum number of shares issuable at any time pursuant
to such Award PLUS (b) the number of shares issued prior to the Award
Date pursuant to all other Awards, other than shares available for
reissue consistent with applicable legal limitations, PLUS (c) the
maximum number of shares issuable at any time on or after the Award
Date pursuant to outstanding Awards, is less than or equal to the
lesser of the Share Limit or any applicable limitations under federal
or state securities laws. Shares which are subject to or underlie
Awards which expire or for any reason are canceled, terminated,
forfeited, fail to vest, or for any other reason are not paid or
delivered under this Plan, as well as any reacquired shares, shall be
available for subsequent Awards under the Plan, except to the extent
prohibited by applicable law (including Section 162(m)). Except as
limited by applicable law (including Section 162(m)), if an Award is or
may be settled only in cash, such Award need not be counted against any
of the limits under this Section 1.4.
1.5 GRANT OF AWARDS. Subject to the express provisions of this Plan, the
Committee shall determine the number of shares of Common Stock subject
to each Award, the price (if any) to be paid for the shares or the
Award and, in the case of Performance Share Awards, in addition to the
matters addressed in Section 1.2.2, the specific objectives, goals and
performance criteria (such as an increase in sales, market value,
earnings or book value over a base period, the years of service before
vesting, the relevant job classification or level of responsibility or
other factors) which further define the terms of the Performance Share
Award. Each Award shall be evidenced by an Award Agreement signed by
the Company and, if required by the Committee, the Participant.
1.6 AWARD PERIOD. Any and all Options, SARs, warrants and similar rights
shall expire, and any other Awards shall either vest or be forfeited,
no later than 120 months after the Award Date or such earlier date as
the Committee may provide in the Award Agreement.
1.7 LIMITATIONS ON EXERCISE AND VESTING OF AWARDS.
1.7.1 LIMITATION ON EXERCISE. Unless otherwise expressly provided
herein, in the Award Agreement, or by the Committee, no Award shall
become exercisable or shall vest until at least six months after the
initial Award Date, and once exercisable an Award shall remain
exercisable until the expiration or earlier termination of the Award.
1.7.2 PROCEDURE FOR EXERCISE. Any vested Award shall be deemed
exercised upon (a) receipt by the Company of written notice of exercise
from the Participant, (b) receipt by the Company of the required
payment in accordance with Section 2.2.2 and (c) satisfaction by the
Participant of any other requirements of exercise, including those
contained in Section 6.4.
3
<PAGE>
1.7.3 FRACTIONAL SHARES/MINIMUM ISSUE. Awards may only be exercised for
whole shares. The Committee, however, may determine that cash, other
securities, or other property shall be paid or transferred in lieu of
any fractional share interests. No fewer than 100 shares at a time may
be purchased upon the exercise of any Award, unless the number of
shares purchased at such time is the total number of shares then
available for purchase under the Award.
1.8 ACCEPTANCE OF PROMISSORY NOTES TO FINANCE EXERCISE. With the
Committee's express approval, the Company may, in its sole discretion,
accept one or more promissory notes from any Participant in connection
with the exercise or receipt of an outstanding Award; but any such note
shall be subject to the following terms and conditions:
1.8.1 PRINCIPAL. The principal of the note shall not exceed the amount
required to be paid to the Company upon the exercise or receipt of such
Award, and the note shall be delivered directly to the Company in
consideration of such exercise or receipt.
1.8.2 TERM. The initial term of the note shall be determined by the
Committee; but the term of the note, including extensions, shall not
exceed a period of five years.
1.8.3 RECOURSE; SECURITY. The note shall provide for full recourse to
the Participant and shall bear interest at a rate determined by the
Committee; PROVIDED that such interest rate shall not be less than the
interest rate necessary to avoid the imputation of interest under the
Code. If required by the Committee in accordance with applicable law,
the note shall be secured by a pledge of any shares or rights financed
thereby. The terms, repayment provisions, and collateral release
provisions of the note and the pledge securing the note shall conform
with applicable rules and regulations of the Federal Reserve Board as
then in effect.
1.8.4 TERMINATION OF EMPLOYMENT. If the employment or service of the
Participant terminates, the unpaid principal balance of the note shall
become due and payable no later than the 10th business day after such
termination.
1.8.5 OTHER CONDITIONS. Participants who are not employees or directors
of the Company shall not be entitled to purchase shares of Common Stock
with a promissory note, unless the note is adequately secured by
collateral other than the shares of Common Stock. If newly issued
shares of Common Stock are delivered to a Participant under the Plan,
that portion of the exercise or purchase price which is equivalent to
any par value of such shares must be paid in cash, for services
rendered or for other valid consideration.
1.9 TRANSFER RESTRICTIONS AND EXCEPTIONS.
1.9.1 LIMIT ON EXERCISE AND TRANSFER. Unless otherwise expressly
provided in (or pursuant to) this Section 1.9 or required by applicable
law: (a) all Awards are non-transferable and shall not be subject in
any manner to sale, transfer, anticipation, alienation, assignment,
pledge, encumbrance or charge; (b) Awards may be exercised only by the
Participant; and (c) amounts payable or shares issuable pursuant to an
Award shall be delivered only to (or for the account of) the
Participant.
4
<PAGE>
1.9.2 EXCEPTIONS TO LIMITS ON TRANSFER. The exercise and transfer
restrictions in Section 1.9.1 shall not apply to:
(a) the designation of a Beneficiary by the Participant; if
the Participant has died, transfers to or exercises by the
Participant's Beneficiary; or, in the absence of a validly
designated Beneficiary, transfers by will or the laws of
descent and distribution; or
(b) the authorization by the Committee of "cashless exercise"
procedures with third parties who provide financing for or
otherwise facilitate the exercise of Awards consistent with
applicable laws and the express authorization of the
Committee.
1.10 REPRICING/CANCELLATION AND REGRANT/WAIVER OF RESTRICTIONS. Subject to
Section 1.4 and Section 6.6 and the specific limitations on Awards
contained in this Plan, the Committee may from time to time authorize,
generally or in specific cases only, for the benefit of any
Participant, any adjustment in the term, exercise or purchase price, or
vesting schedule of, the number of shares subject to, or the
restrictions upon an Option, SAR or other Award by cancellation of an
outstanding Award and a subsequent regranting of a replacement Award,
amendment, substitution of an outstanding Award, waiver or any other
legally valid means. Such amendment or other action may result in,
among other things, an exercise, base or purchase price which is higher
or lower than the exercise, base or purchase price of the original or
prior Award, provide for a greater or lesser number of shares subject
to the Award, or provide for a longer or shorter vesting or exercise
period; PROVIDED, that the terms of any regranted, amended or
substitute Award shall meet the requirements of this Plan as of the
date of regrant, amendment, substitution or other action.
2. OPTIONS
2.1 GRANTS. One or more Options may be granted under this Section to any
Eligible Person. Each Option granted shall be designated by the
Committee, in the applicable Award Agreement, as either an Incentive
Stock Option (subject to Section 2.3) or a Nonqualified Stock Option.
2.2 OPTION PRICE.
2.2.1 PRICING LIMITS. The purchase price per share of the Common Stock
covered by each Option shall be determined by the Committee at the time
the Award is authorized, but in no event shall the purchase price per
share be less than 100% (110% in the case of a Participant described in
Section 2.4) of the Fair Market Value of the Common Stock as of the
Award Date (or at the time of amendment, if the exercise price is
amended) nor less than the par value of the Common Stock.
2.2.2 PAYMENT PROVISIONS. The purchase price of any shares purchased on
exercise of an Option shall be paid in full at the time of each
purchase in one or a combination of the following methods:
5
<PAGE>
(a) in cash or by electronic funds transfer;
(b) by certified or cashier's check payable to the order of
the Company;
(c) if authorized by the Committee or specified in the
applicable Award Agreement, by a promissory note of the
Participant consistent with the requirements of Section 1.8
and 6.4;
(d) by notice and third party payment in such manner as may be
authorized by the Committee; or
(e) by the delivery of shares of Common Stock already owned by
the Participant; PROVIDED that the Committee may in its
absolute discretion limit the Participant's ability to
exercise an Award by delivering such shares, and any shares
delivered which were initially acquired from the Company must
have been owned by the Participant for at least six months as
of the date of delivery. Shares of Common Stock used to
satisfy the exercise price of an Option shall be valued at
their Fair Market Value on the date of exercise.
2.2.3 "CASHLESS EXERCISE" PROVISIONS. Without limiting the generality
of the foregoing, the Committee may provide that an Option can be
exercised and payment made by delivering a properly executed exercise
notice together with irrevocable instructions to a broker to promptly
deliver to the Company the amount of sale proceeds necessary to pay the
exercise price and, unless otherwise prohibited by the Committee or
applicable law, any applicable tax withholding under Section 6.5.
2.2.4 DELIVERY CONDITION. The Company shall not be obligated to deliver
certificates for any shares of Common Stock on exercise of an Option
unless and until it receives full payment of the exercise price and any
related withholding obligations have been satisfied.
2.3 LIMITATIONS ON GRANT AND TERMS OF INCENTIVE STOCK OPTIONS.
2.3.1 $100,000 LIMIT. If incentive stock options of a Participant
become exercisable during any calendar year such that Common Stock
issuable pursuant to such newly-exercisable incentive stock options has
an aggregate Fair Market Value in excess of $100,000, taking into
account both Common Stock subject to Incentive Stock Options under this
Plan and Common Stock subject to incentive stock options under all
other plans of Vantis Corporation or any other includable parent or
subsidiary corporations (as these terms are used under Section 422(d)
and defined in Section 424(e) and (f) of the Code), such options shall
be treated as nonqualified stock options to the extent of such excess.
For this purpose, the Fair Market Value of the Common Stock subject to
exercisable options shall be determined as of the date the options were
awarded. In reducing the number of options treated as incentive stock
options to meet the $100,000 limit, the most recently granted options
shall be redesignated first. To the extent a redesignation of
simultaneously granted options is necessary to meet the $100,000 limit,
the Committee may, in the manner and to the extent permitted by law,
designate which
6
<PAGE>
shares of Common Stock are to be treated as shares acquired pursuant to
the exercise of an incentive stock option.
2.3.2 OPTION PERIOD. Subject to Section 1.6, each Option and all rights
thereunder shall expire no later than 120 months after the Award Date.
2.3.3 OTHER CODE LIMITS. Incentive Stock Options may only be granted to
Eligible Employees of the Company who meet the other eligibility
requirements of the Code. Any Award Agreement relating to Incentive
Stock Options shall impose such other terms and conditions as from time
to time may be necessary to qualify the Option as an "incentive stock
option," as defined in Section 422 of the Code.
2.4 LIMITS ON 10% HOLDERS. No Incentive Stock Option may be granted to any
Eligible Employee who, at the time such Option is granted, owns (or is
deemed to own under Section 424(d) of the Code) shares of outstanding
common stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or AMD, unless the
exercise price of such Option is at least 110% of the Fair Market Value
of the Common Stock subject to the Option and such Option by its terms
is not exercisable after the expiration of five years from the Award
Date.
2.5 TERMINATION OF EMPLOYMENT; DISCRETIONARY AUTHORITY. .
2.5.1 OPTIONS - RESIGNATION; ETC. If a Participant's employment by, or
other approved, specific service to, the Company terminates for any
reason other than Total Disability or death, and such termination is
not a Termination for Cause, the Participant shall have, subject to
earlier expiration or termination pursuant to or as contemplated by
Section 1.6 or 6.2, 12 months after the Severance Date (or such shorter
period as may be provided in such Participant's Award Agreement) to
exercise any Option which has vested on or before the Severance Date;
PROVIDED that an Option which is designated as an Incentive Stock
Option must be exercised within 3 months of the Severance Date in order
to qualify as an "incentive stock option" under Section 422 of the
Code. Unless the Committee otherwise provides in the Participant's
Award Agreement, any Option which has not vested on or before the
Severance Date shall terminate on the Severance Date.
2.5.2 OPTIONS - TERMINATION FOR CAUSE. If a termination of employment
or other service is a Termination for Cause or a voluntary resignation
in anticipation of or in connection with a Termination for Cause, the
Participant's Options, whether vested or not, shall terminate on the
Severance Date.
2.5.3 OPTIONS - DEATH OR TOTAL DISABILITY. If a Participant's
employment by, or other approved, specific service to, the Company
terminates as a result of Total Disability or death, the Participant,
the Participant's Personal Representative or the Participant's
Beneficiary, as the case may be, shall have, subject to earlier
expiration or termination pursuant to or as contemplated by Section 1.6
or 6.2, 12 months after the Severance Date (or such shorter period as
may be provided in such Participant's Award Agreement) to exercise any
Option which has vested on or before the Severance Date; PROVIDED that,
in the case of Total Disability which is not within the meaning of
Section 22(e)(3) of the
7
<PAGE>
Code, an Option which is designated as an Incentive Stock Option must
be exercised within 3 months of the Severance Date in order to qualify
as an "incentive stock option" under Section 422 of the Code. Unless
the Committee otherwise provides in the Participant's Award Agreement,
any Option which has not vested on or before the Severance Date shall
terminate on the Severance Date.
2.5.4 CERTAIN SARS. Unless the Committee otherwise provides, any SAR
granted concurrently or in tandem with an Option shall have the same
post-termination provisions and exercisability periods as the Option to
which it relates.
2.5.5 COMMITTEE DISCRETION. Notwithstanding the foregoing provisions of
this Section 2.5, in the event of, or in anticipation of, a termination
of employment or service with the Company which does not qualify as a
Termination for Cause, the Committee may increase that portion of the
Participant's Award which is available to the Participant, the
Participant's Personal Representative or the Participant's Beneficiary,
as the case may be, or, subject to the provisions of Section 1.6, may
extend the exercisability period of such Participant's Award, all upon
such terms as the Committee expressly approves by resolution or by
amendment to the Award Agreement.
3. STOCK APPRECIATION RIGHTS
(INCLUDING LIMITED STOCK APPRECIATION RIGHTS)
3.1 GRANTS. Subject to any applicable limitations under California law, the
Committee may grant Stock Appreciation Rights to any Eligible Person
concurrently with the grant of another Award, in respect of all or any
part of an outstanding Award, or independently of any other Award. Any
Stock Appreciation Right granted in connection with an Incentive Stock
Option shall contain such terms as may be required to comply with the
provisions of Section 422 of the Code and the regulations promulgated
thereunder, unless the holder agrees otherwise.
3.2 PRICING LIMITS. The pricing restrictions applicable to Options under
Section 2.2.1 of this Plan shall apply as well to the base or reference
price of SARs granted under this Plan.
3.3 EXERCISE OF STOCK APPRECIATION RIGHTS.
3.3.1 EXERCISABILITY. Unless the Award Agreement or the Committee
otherwise provides, a Stock Appreciation Right related to another Award
shall become exercisable at such time or times as, and to the extent
that, the related Award becomes exercisable.
3.3.2 EFFECT ON AVAILABLE SHARES. To the extent that a Stock
Appreciation Right is exercised, only the actual number of delivered
shares of Common Stock shall be charged against the maximum amount of
Common Stock which may be delivered pursuant to Awards under this Plan.
The number of shares subject to the Stock Appreciation Right and the
related Option of the Participant shall, however, be counted (without
duplication) for purposes of the individual limits in Section 1.4.2
and, on exercise, shall reduce the number of underlying shares as to
which the SAR and the Option thereafter relate, unless the Award
Agreement otherwise provides.
8
<PAGE>
3.3.3 STAND-ALONE SARS. A Stock Appreciation Right granted
independently of any other Award shall become exercisable pursuant to
the terms of the Award Agreement.
3.3.4 PROPORTIONATE REDUCTION. If an SAR extends to less than all the
shares covered by the related Award, and if a portion of the related
Award is thereafter exercised, the number of shares subject to the
unexercised SAR shall be reduced only if and to the extent that the
remaining number of shares covered by such related Award is less than
the remaining number of shares subject to such SAR.
3.4 PAYMENT.
3.4.1 AMOUNT. Unless the Committee otherwise provides, upon exercise of
a Stock Appreciation Right and the attendant surrender of an
exercisable portion of any related Award, the Participant shall be
entitled to receive, subject to Section 6.5, payment of an amount
determined by multiplying:
(a) the difference obtained by subtracting the exercise or
base reference price per share of Common Stock under the
related Award (if applicable), or the initial share value
specified in the Award, from the Fair Market Value of a share
of Common Stock on the date of exercise of the Stock
Appreciation Right, TIMES
(b) the number of shares with respect to which the Stock
Appreciation Right has been exercised.
3.4.2 FORM OF PAYMENT. The Committee, in its sole discretion, shall
determine the form in which payment shall be made of the amount
determined under Section 3.4.1 above, either solely in cash, solely in
shares of Common Stock (valued at Fair Market Value on the date of
exercise of the Stock Appreciation Right), or partly in such shares and
partly in cash; PROVIDED that the Committee has determined that such
exercise and payment are consistent with applicable law. If the
Committee permits the Participant to elect to receive cash or shares
(or a combination thereof) upon such exercise, the election shall be
subject to any further conditions which the Committee may impose.
3.5 LIMITED STOCK APPRECIATION RIGHTS. Subject to any applicable
limitations under California law, the Committee may grant to any
Eligible Person Stock Appreciation Rights exercisable only upon or in
respect of a Change in Control Event or any other specified event
("LIMITED SARS"), and such Limited SARs may relate to, operate in
tandem or combination with, or substitute for Options, other SARs or
other Awards (or any combination thereof) and may be payable in cash or
shares based on the spread between the base price of the SAR and a
price based upon or equal to the Fair Market Value of the shares during
a specified period or at a specified time within a specified period
before, after or including the date of such event.
4. RESTRICTED STOCK AWARDS
4.1 GRANTS. Subject to any applicable limitations under California law, the
Committee may grant one or more Restricted Stock Awards to any Eligible
Person. Each Restricted Stock Award Agreement shall specify the number
of shares of Common Stock to be
9
<PAGE>
issued to the Participant, the date of such issuance, the consideration
to be paid by the Participant for such shares (which consideration
shall not be less than the minimum lawful consideration under
applicable state law), the extent (if any) to which and the time (if
ever) at which the Participant shall be entitled to dividends and
voting or other rights in respect of the shares prior to vesting, the
restrictions imposed on such shares (which may be based on performance
objectives, the passage of time or other factors or any combination
thereof), and the conditions of release or lapse of such restrictions.
Such restrictions shall not lapse earlier than six months after the
Award Date, except to the extent the Committee otherwise provides.
Stock certificates evidencing shares of Restricted Stock currently
subject to restrictions ("RESTRICTED SHARES") shall bear a legend
making appropriate reference to the restrictions imposed hereunder and
shall be held by the Company or by a third party designated by the
Committee until the restrictions on such shares have lapsed and the
shares have vested in accordance with the provisions of the Award and
Section 1.7. Upon issuance of a Restricted Stock Award, the Participant
may be required to provide such further assurance and documents as the
Committee may require to enforce the restrictions.
4.2 RESTRICTIONS.
4.2.1 PRE-VESTING RESTRAINTS. Except as provided in Sections 4.1 and
1.9, Restricted Shares comprising any Restricted Stock Award may not be
sold, assigned, transferred, pledged or otherwise disposed of or
encumbered, either voluntarily or involuntarily, until the restrictions
on such shares have lapsed and the shares have become vested.
4.2.2 DIVIDEND AND VOTING RIGHTS. Unless otherwise provided in the
applicable Award Agreement, a Participant receiving a Restricted Stock
Award shall be entitled to cash dividend and voting rights for all
shares issued even though they are not vested, but such rights shall
terminate immediately as to any Restricted Shares which cease to be
eligible for vesting.
4.2.3 CASH PAYMENTS. If the Participant has been paid or received cash
(including any dividends) in connection with the Restricted Stock
Award, the Award Agreement shall specify whether and to what extent
such cash shall be returned (with or without an earnings factor) as to
any Restricted Shares which cease to be eligible for vesting.
4.3 RETURN TO THE COMPANY. Unless the Committee otherwise expressly
provides, Restricted Shares which remain subject to restrictions at the
time of termination of employment or service or are subject to other
conditions to vesting which have not been satisfied by the time
specified in the applicable Award Agreement shall not vest and shall be
returned to the Company in such manner and on such terms as the
Committee provides.
5. PERFORMANCE SHARE AWARDS AND STOCK BONUSES
5.1 GRANTS OF PERFORMANCE SHARE AWARDS. Subject to any applicable
limitations under California law, the Committee may grant Performance
Share Awards to Eligible Employees based upon such factors as the
Committee deems relevant in light of the specific type and terms of the
Award. An Award Agreement shall specify the maximum
10
<PAGE>
number of shares of Common Stock (if any) subject to the Performance
Share Award, the consideration to be paid for any such shares as may be
issuable to the Participant (but not less than the minimum lawful
consideration), the duration of the Award and the conditions upon which
delivery of any shares or cash to the Participant shall be based. The
amount of cash or shares or other property which may be deliverable
pursuant to such Award shall be based upon the degree of attainment
over a specified period of not more than 10 years (a "PERFORMANCE
CYCLE") of such measure(s) of the performance of the Company (or any
part thereof) or the Participant as may be established by the
Committee. The Committee may provide for full or partial credit, prior
to completion of such Performance Cycle or the attainment of the
performance achievement specified in the Award, in the event of the
Participant's death, retirement, or Total Disability, a Change in
Control Event or in such other circumstances as the Committee
(consistent with Section 6.10.2(b), if applicable) may determine.
5.2 SPECIAL (SECTION 162(M)) PERFORMANCE-BASED AWARDS. Options or SARs
which are granted to Eligible Employees with an exercise price of not
less than Fair Market Value at the applicable date of grant for
purposes of Section 162(m), and which otherwise satisfy the conditions
to deductibility under Section 162(m), are deemed "QUALIFYING AWARDS."
Without limiting the generality of the foregoing, and in addition to
Qualifying Awards granted under other provisions of this Plan, other
performance-based awards within the meaning of Section 162(m)
("PERFORMANCE-BASED AWARDS"), whether in the form of restricted stock,
performance stock, phantom stock or other rights, the vesting of which
depends on the performance of the Company on a consolidated, segment,
subsidiary, or division basis, with reference to revenue growth, net
earnings (before or after taxes or before or after taxes, interest,
depreciation, and/or amortization), net cash flow, return on equity,
assets or net investment, cost containment or reduction, or any
combination thereof (the "BUSINESS CRITERIA"), relative to
preestablished performance goals, may be granted under this Section
5.2, subject to any applicable limitations under California law. The
foregoing terms are used as applied under generally accepted accounting
principles and in the Company's financial reporting. The applicable
Business Criteria and the specific performance goals must be approved
by the Committee in advance of applicable deadlines under the Code and
while the performance relating to such goals remains substantially
uncertain. The applicable performance measurement period may be not
less than one (except as provided in Section 1.6) nor more than 10
years. The following provisions relate to all Performance-Based Awards:
5.2.1 ELIGIBLE CLASS. The class of Persons eligible for
Performance-Based Awards is officers of the Company.
5.2.2 MAXIMUM AWARD. Performance-Based Awards may be paid in cash or
shares or any combination thereof. In no event shall grants of
Performance-Based Awards (exclusive of Qualifying Awards) made in any
calendar year to any Eligible Employee relate to more than 500,000
shares of Common Stock. In no event shall grants of Performance-Based
Awards made to any Eligible Employee payable only in cash and not
related to shares provide for payment of more than (a) the lesser of
200% of base salary as of the beginning of the applicable performance
period or $500,000 TIMES (b) the number of years (not more than five)
in the applicable performance period.
11
<PAGE>
5.2.3 COMMITTEE CERTIFICATION. To the extent required by Section
162(m), before any Performance-Based Award is paid, the Committee must
certify that the material terms of the Performance-Based Award were
satisfied.
5.2.4 TERMS AND CONDITIONS OF AWARDS. The Committee shall have
discretion to determine the restrictions or other limitations of the
individual Performance-Based Awards (including the authority to reduce
such Awards, payouts or vesting or to pay no Awards, in its sole
discretion, if the Committee preserves such authority at the time of
grant by language to this effect in its authorizing resolutions or
otherwise).
5.2.5 STOCK PAYOUT FEATURES. In lieu of cash payment of a
Performance-Based Award, the Committee may require or allow all or a
portion of the Performance-Based Award to be paid in the form of shares
of Common Stock, Stock Units, Restricted Shares, an Option, or another
Award.
5.2.6 ADJUSTMENTS FOR MATERIAL CHANGES. Performance goals or other
features of a Performance-Based Award may provide that they (a) shall
be adjusted to reflect a change in corporate capitalization, a
corporate transaction (such as a reorganization, combination,
separation, or merger) or a complete or partial corporate liquidation,
(b) shall be calculated either without regard for or to reflect any
change in accounting policies or practices affecting the Company and/or
the Business Criteria or performance goals or targets, and/or (c) shall
be adjusted for any other circumstance or event, but only to the extent
in each case that such adjustment or determination in respect of
Performance-Based Awards would be consistent with the requirements of
Section 162(m) to qualify as performance-based compensation.
5.3 OTHER STOCK BONUSES. Subject to any applicable limitations under
California law, the Committee may grant a Stock Bonus to any Eligible
Person to reward exceptional or special services, contributions or
achievements in the manner and on such terms and conditions (including
any restrictions on such shares) as determined from time to time by the
Committee. The number of shares so awarded shall be determined by the
Committee. The Award may be granted independently or in lieu of a cash
bonus and may be paid in the form of Common Stock, Restricted Shares,
an Option, Stock Units (payable in Common Stock or cash) or other
Award.
5.4 DEFERRED PAYMENTS. Subject to any applicable limitations under
California law, the Committee may authorize for the benefit of any
Eligible Person the deferral of any payment of cash or shares which may
become due or otherwise payable under this Plan or otherwise, in the
form of Stock Units payable in cash or shares or by other means, and
may provide for accretion thereof based upon such deferment, at the
election or request of such Participant, subject to the other terms of
this Plan. Such deferral shall be subject to such further conditions,
restrictions or requirements as the Committee may impose, subject to
any then vested rights of Participants, and the Committee may provide
for the crediting of dividend equivalents or other earnings thereon.
5.5 CASH BONUSES. The Committee may establish a program of annual cash
incentive awards to be based upon the extent to which performance goals
are met during the performance
12
<PAGE>
period. The performance goals may depend upon the performance of the
Company on a consolidated, subsidiary or division basis with reference
to revenues, net earnings (before or after interest, taxes,
depreciation, or amortization), cash flow, return on equity, assets or
net investment, cost containment or reduction, or achievement of
strategic goals (or any combination of such factors). In addition, the
award may depend upon the Eligible Employee's individual performance.
5.6 ALTERNATIVE PAYMENTS. In lieu of a cash payment of an Award payable in
cash, the Committee may require or allow all or a portion of the Award
to be paid or credited in the form of shares of Common Stock,
Restricted Shares, Stock Units, an Option or other Award.
6. OTHER PROVISIONS
6.1 RIGHTS OF ELIGIBLE PERSONS, PARTICIPANTS AND BENEFICIARIES.
6.1.1 NO COMMITMENT BASED ON ELIGIBILITY. Status as an Eligible Person
shall not be construed as a commitment that any Award shall be made
under this Plan to an Eligible Person or to Eligible Persons generally.
6.1.2 NO EMPLOYMENT CONTRACT. Nothing contained in this Plan, in any
other documents under this Plan, or in any Award shall confer upon any
Eligible Person or Participant any right to continue in the employ or
other service of the Company, constitute any contract or agreement of
employment or other service, affect such Person's status as an
employee-at-will, or interfere in any way with the right of the Company
to change such Person's compensation or other benefits or to terminate
the employment or other service of such Person, with or without cause;
PROVIDED, HOWEVER, that nothing contained in this Section is intended
to adversely affect any express independent right of such Person under
a separate employment or service contract other than an Award
Agreement.
6.1.3 PLAN NOT FUNDED. Awards payable under this Plan shall be payable
in shares or from the general assets of the Company, and (except as
provided in Section 1.4.3) no special or separate reserve, fund or
deposit shall be made to assure payment of such Awards. No Participant,
Beneficiary or other Person shall have any right, title or interest in
any fund or in any specific asset (including shares of Common Stock,
except as expressly otherwise provided) of the Company by reason of any
Award hereunder. Neither the provisions of this Plan (or of any related
documents), the creation or adoption of this Plan, nor any action taken
pursuant to the provisions of this Plan shall create, or be construed
to create, a trust of any kind or a fiduciary relationship between the
Company and any Participant, Beneficiary or other Person. To the extent
that a Participant, Beneficiary or other Person acquires a right to
receive payment pursuant to any Award hereunder, such right shall be no
greater than the right of any unsecured general creditor of the
Company.
13
<PAGE>
6.2 ADJUSTMENTS; ACCELERATION.
6.2.1 ADJUSTMENTS. Upon or in contemplation of any reclassification,
recapitalization, stock split (including a stock split in the form of a
stock dividend) or reverse stock split; any merger, combination,
consolidation or other reorganization ("REORGANIZATION") or any
liquidation or dissolution; any spin-off, split-up, or similar
extraordinary dividend distribution in respect of the Common Stock
(whether in the form of securities or property) ("SPIN-OFF"); any
exchange or other disposition of more than 80% of the Common Stock and
other voting securities of the Company, or any similar, unusual or
extraordinary corporate transaction in respect of the Common Stock
("STOCK SALE"); or a sale of all or substantially all the assets of the
Company as an entirety ("ASSET SALE"); then the Committee shall, in
such manner, to such extent (if any) and at such time as it deems
appropriate and equitable in the circumstances:
(a) in any of such events, proportionately adjust any or all
of (1) the number and type of shares of Common Stock (or other
securities) which thereafter may be made the subject of Awards
(including the specific maxima and numbers of shares set forth
elsewhere in this Plan), (2) the number, amount and type of
shares of Common Stock (or other securities or property)
subject to any or all outstanding Awards, (3) the grant,
purchase, or exercise price of any or all outstanding Awards,
(4) the securities, cash or other property deliverable upon
exercise of any outstanding Awards, or (5) (subject to
limitations under Section 6.10.2(b)) the performance standards
appropriate to any outstanding Awards; or
(b) in any of such events, other than a stock split (including
a stock split in the form of a stock dividend) or reverse
stock split, provide for Settlement of any or all outstanding
Awards, based upon the exercise price of the Award and/or the
distribution or consideration payable to holders of the Common
Stock upon or in respect of such event.
In any of such events, adjustments may be made which would cause
Incentive Stock Options to fail to meet the applicable requirements
thereof without the consent of holders of the affected Incentive Stock
Options.
In any of such events, the Committee may take such action prior to such
event as the Committee deems necessary to permit the Participant to
realize the benefits intended to be conveyed with respect to the
underlying shares in the same manner as is or shall be available to
stockholders generally.
6.2.2 POSSIBLE ACCELERATION OF AWARDS; TERMINATION. The Committee may
expressly provide in an Award Agreement or otherwise, on a case-by-case
basis or as to all Awards of one or more types, that prior to the
occurrence of a Change in Control Event or an event described in
Section 6.2.1 which the Company does not survive, the vesting or
exercisability of an Award or certain or limited benefits thereunder
shall accelerate. The Committee may also accord any Participant the
right to refuse such acceleration, whether pursuant to the Award
Agreement or otherwise, in such circumstances as the Committee may
approve. If the vesting or exercisability of an Award has been
accelerated pursuant
14
<PAGE>
to this Section 6.2.2, but the Award is not timely exercised at or
before the applicable event, then the Award shall terminate, unless the
Committee otherwise provides.
Any acceleration of Awards shall comply with applicable legal
requirements and, if necessary to accomplish the purposes of the
acceleration or the circumstances require, may be deemed by the
Committee to occur (subject to Section 6.2.5) a limited period of time
before the event. No discretion with respect to acceleration of an
Award shall apply in the case of a transaction intended to be accounted
for as a pooling of interests transaction, to the extent exercise of
the discretion would be inconsistent with that accounting method.
6.2.3 TERMINATION UPON SETTLEMENT. If the Committee has provided for
Settlement of at least the vested portion of an outstanding Award
pursuant to Section 6.2.1(b) upon or in anticipation of a Change in
Control Event approved by the Board or an event which the Company does
not survive, then the entire outstanding Award shall terminate upon
consummation of the event, unless the Committee otherwise provides.
6.2.4 ACCELERATION UPON TERMINATION OF SERVICE FOLLOWING A CHANGE IN
CONTROL EVENT. If any Participant's employment is terminated by the
Company upon or within one year after a Change in Control Event, and
the termination is not the result of death, Total Disability or a
Termination for Cause, then, subject to the other provisions of this
Section 6.2 (including without limitation Section 6.2.3) and Section
6.4, all outstanding Options held by the Participant shall be deemed
fully vested immediately prior to the Severance Date, irrespective of
the vesting provisions of the Participant's Award Agreement.
6.2.5 POSSIBLE RESCISSION OF ACCELERATION. If the vesting of an Award
has been accelerated expressly in anticipation of an event or subject
to stockholder approval of an event, and the Committee or the Board
later determines that the event will not occur, the Committee may
rescind the effect of the acceleration as to any then outstanding,
unexercised Awards.
6.2.6 GOLDEN PARACHUTE LIMITATION. In no event shall an Award be
accelerated under this Plan to an extent or in a manner which would not
be fully deductible by the Company for federal income tax purposes due
to Section 280G of the Code, nor shall any payment hereunder be
accelerated if any portion of such accelerated payment would not be
deductible by the Company due to Section 280G of the Code. If a
Participant would be entitled to benefits or payments hereunder and
under any other plan or program which would constitute "parachute
payments" as defined in Section 280G of the Code, then the Participant
may by written notice to the Company designate the order in which such
parachute payments shall be reduced or modified so that the Company is
not denied federal income tax deductions for any "parachute payments"
under Section 280G of the Code. Notwithstanding the foregoing, an
employment or other agreement with the Participant, including an Award
Agreement, may expressly provide for benefits in excess of amounts
determined by applying the foregoing Section 280G limitations.
6.3 EFFECT OF TERMINATION OF SERVICE ON AWARDS. Subject to the provisions
hereof and applicable law, the Committee shall establish the effect of
a termination of employment
15
<PAGE>
or service on the rights and benefits of each Award and in so doing may
make distinctions based upon the cause of termination.
6.3.1 TERMINATION OF CONSULTING OR AFFILIATE SERVICES. If the
Participant is not an Eligible Employee or director and provides
services as an Other Eligible Person, the Committee shall be the sole
judge of whether the Participant continues to render services to the
Company, unless a contract or the Award otherwise provides. If the
Committee notifies the Participant in writing that a termination of
services of the Participant for purposes of this Plan has occurred,
then (unless the contract or Award otherwise expressly provides) the
Participant's termination of services for purposes of Section 2.5, 3,
4.3 or 5 shall be the date which is 10 days after the Committee's
mailing of the notice or, in the case of a Termination for Cause, the
date of the mailing of the notice.
6.3.2 EVENTS NOT DEEMED TERMINATIONS OF SERVICE. Unless the Committee
otherwise provides, the employment or service relationship shall not be
considered terminated in the case of (i) sick leave, (ii) military
leave, or (iii) any other leave of absence authorized by the Committee;
PROVIDED that, unless reemployment upon the expiration of such leave is
guaranteed by contract or law, such leave is for a period of not more
than 90 days. In the case of any Eligible Employee on an approved leave
of absence, continued vesting of the Award while on leave from the
employ of the Company shall be suspended, unless the Committee
otherwise provides or applicable law otherwise requires. In no event
shall an Award be exercised after the expiration of the term set forth
in the Award Agreement.
6.3.3 EFFECT OF CHANGE OF SUBSIDIARY STATUS. For purposes of this Plan
and any Award, if an entity ceases to be a Subsidiary, a termination of
employment or service shall be deemed to have occurred with respect to
each Eligible Person employed by or providing services to the
Subsidiary who does not continue as an Eligible Person in respect of
another entity within the Company.
6.4 COMPLIANCE WITH LAWS. This Plan, the granting and vesting of Awards,
the offer, issuance and delivery of shares of Common Stock, the
acceptance of promissory notes and/or the payment of money under this
Plan or under Awards are subject to compliance with all applicable
federal and state laws, rules and regulations (including but not
limited to state and federal securities law and federal margin
requirements) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the
Company, be necessary or advisable in connection therewith. In
addition, any securities delivered under this Plan may be subject to
any special restrictions which the Committee may require to preserve a
pooling of interests under generally accepted accounting principles.
Participants granted Awards or acquiring any securities under this Plan
shall provide such assurances and representations to the Company as the
Committee may deem necessary or desirable to assure compliance with all
applicable legal and accounting requirements.
6.5 TAX MATTERS.
6.5.1 PROVISION FOR TAX WITHHOLDING OR OFFSET. Upon any exercise,
vesting, or payment of any Award or upon the disposition of shares of
Common Stock acquired pursuant to
16
<PAGE>
the exercise of an Incentive Stock Option prior to satisfaction of the
holding period requirements of Section 422 of the Code, the Company
shall have the right at its option to (a) require the Participant (or
Personal Representative or Beneficiary, as the case may be) to pay or
provide for payment of the amount of any taxes which the Company may be
required to withhold with respect to such Award event or payment or (b)
deduct from any amount payable in cash the amount of any taxes which
the Company may be required to withhold with respect to such cash
payment. In any case where a tax is required to be withheld in
connection with the delivery of shares of Common Stock under this Plan,
the Committee may in its sole discretion (subject to Section 6.4) grant
to the Participant (either at the time of the Award or thereafter) the
right to elect, pursuant to such rules and subject to such conditions
as the Committee may establish, to have the Company reduce the number
of shares to be delivered by (or otherwise reacquire) the appropriate
number of shares valued at their then Fair Market Value to satisfy such
withholding obligation.
6.5.2 TAX LOANS. If so provided in the Award Agreement, the Company
may, to the extent permitted by law, authorize a loan to a Participant
in the amount of any taxes which the Company may be required to
withhold with respect to shares of Common Stock received (or disposed
of, as the case may be) by such Participant pursuant to a transaction
described in Section 6.5.1. Such a loan shall be for a term, at a rate
of interest and pursuant to such other terms and conditions as the
Company may establish under applicable law, and such loan need not
comply with the provisions of Section 1.8.
6.6 PLAN AMENDMENT, TERMINATION AND SUSPENSION.
6.6.1 BOARD AUTHORIZATION. The Board may, at any time, terminate or,
from time to time, amend, modify or suspend this Plan, in whole or in
part. No Awards may be granted during any suspension of this Plan or
after termination of this Plan, but the Committee shall retain
jurisdiction as to Awards then outstanding in accordance with the terms
of this Plan.
6.6.2 STOCKHOLDER APPROVAL. To the extent then required under Sections
422 and 424 of the Code or any other applicable law, or to the extent
deemed necessary or advisable by the Board, any amendment to this Plan
shall be subject to stockholder approval.
6.6.3 AMENDMENTS TO AWARDS. Without limiting any other express
authority of the Committee under this Plan, and subject to the express
limits of this Plan, the Committee may, by agreement or resolution and
without the consent of a Participant, waive conditions of or
limitations on Awards which the Committee in the prior exercise of its
discretion has imposed and may make other changes to the terms and
conditions of Awards which do not materially adversely affect the
Participant's rights and benefits under an Award.
6.6.4 LIMITATIONS ON AMENDMENTS TO PLAN AND AWARDS. No amendment,
suspension or termination of this Plan or change of or affecting any
outstanding Award shall, without written consent of the Participant,
materially adversely affect any rights or benefits of the Participant
or obligations of the Company under any Award granted prior to the
effective
17
<PAGE>
date of such change. Changes contemplated by Section 6.2 shall not be
deemed to constitute changes or amendments for purposes of this Section
6.6.
6.7 PRIVILEGES OF STOCK OWNERSHIP. Except as otherwise expressly authorized
by the Committee or this Plan, a Participant shall not be entitled to
any right or privilege of stock ownership as to any shares of Common
Stock not actually delivered to and held of record by the Participant.
No adjustment shall be made for dividends or other rights as a
stockholder for which a record date is prior to such date of delivery.
6.8 EFFECTIVE DATE OF THE PLAN. This Plan is effective as of April 2, 1999.
The Plan was approved by the Company's sole stockholder and by the
Board on April 2, 1999.
6.9 TERM OF THE PLAN. No Award shall be granted under this Plan after
February 23, 2009 (the "TERMINATION DATE") or before April 7, 1999.
Unless otherwise expressly provided in this Plan or in an applicable
Award Agreement, any Award granted prior to the Termination Date may
extend beyond such date, and all authority of the Committee with
respect to Awards hereunder, including the authority to amend an Award,
shall continue during any suspension of this Plan and in respect of
Awards outstanding on the Termination Date.
6.10 CONSTRUCTION/SEVERABILITY.
6.10.1 SEVERABILITY. If a court of competent jurisdiction holds any
provision of this Plan or any Award Agreement invalid and
unenforceable, the remaining provisions of this Plan or such Award
Agreement shall continue in effect.
6.10.2 PLAN CONSTRUCTION.
(a) RULE 16B-3. It is the intent of the Company that the
Awards and transactions permitted by Awards generally satisfy
and be interpreted in a manner which, in the case of
Participants who are or may be Section 16 Persons, satisfies
the applicable requirements of Rule 16b-3 so that such Persons
(unless they otherwise agree) shall be entitled to the
benefits of Rule 16b-3 or other exemptive rules under Section
16 of the Exchange Act in respect of those transactions and
shall not be subjected to avoidable liability.
(b) SECTION 162(M). It is the further intent of the Company
that (to the extent the Company or Awards may be or become
subject to limitations on deductibility under Section 162(m))
the Initial Options and Options or SARs subsequently granted
with an exercise or base price not less than Fair Market Value
on the date of grant, and Performance-Based Awards under
Section 5.2 of this Plan which are granted to or held by a
Person subject to Section 162(m), shall qualify as
performance-based compensation or otherwise be exempt from
deductibility limitations under Section 162(m), to the extent
that the Committee authorizing the Award (or the payment
thereof, as the case may be) satisfies any applicable
administrative requirements thereof. This Plan shall be
interpreted consistent with such intent.
18
<PAGE>
6.11 CAPTIONS. Captions and headings are given to the sections and
subsections of this Plan solely as a convenience to facilitate
reference. Such headings shall not be deemed in any way material or
relevant to the construction or interpretation of this Plan or any
provision hereof.
6.12 AWARDS IN SUBSTITUTION FOR AWARDS GRANTED BY OTHER ENTITIES. Awards in
substitution for employee stock options, stock appreciation rights,
restricted stock or other stock-based awards granted by other entities
may be granted to Persons who are or will become Eligible Persons in
connection with (a) a distribution, merger or reorganization by or with
such other entity or an affiliated entity or (b) the acquisition by the
Company, directly or indirectly, of all or a substantial part of the
stock or assets of such other entity.
6.13 NON-EXCLUSIVITY OF PLAN. Nothing in this Plan shall limit or be deemed
to limit the authority of the Committee to grant awards or authorize
any other compensation, with or without reference to the Common Stock,
under any other plan or authority.
7. DEFINITIONS
"AMD" means Advanced Micro Devices, Inc., a Delaware corporation, and its
successors (if any).
"AMD GROUP" means (a) AMD, (b) any affiliate of AMD (as the term "affiliate"
(and the term "control" as used therein) are defined in Rule 405 under the
Securities Act), and (c) any employee benefit plan (or related trust) sponsored
or maintained by one or more of the foregoing, or their respective successors.
"AWARD" means an award of any Option, Stock Appreciation Right, Restricted
Stock, Stock Bonus, Performance Share Award, dividend equivalent or deferred
payment right or other right or security which would constitute a "derivative
security" under Rule 16a-1(c) of the Exchange Act, or any combination thereof,
whether alternative or cumulative, authorized by and granted under this Plan.
"AWARD AGREEMENT" means any writing setting forth the terms of an Award which
has been authorized by the Committee, as such writing may be amended from time
to time.
"AWARD DATE" means the date upon which the Committee took the action granting an
Award or such later date as the Committee designates as the grant or award date
at the time of the Award.
"AWARD PERIOD" means the period beginning on an Award Date and ending on the
expiration date of the applicable Award.
"BENEFICIARY" means the Person, Persons, trust or trusts designated by a
Participant or, in the absence of a designation, entitled by will or the laws of
descent and distribution to receive the benefits specified in the Award
Agreement and under this Plan if the Participant dies; PROVIDED that
"BENEFICIARY" shall mean the Participant's executor or administrator if no other
Beneficiary is designated and able to act under the circumstances.
"BOARD" means the Board of Directors of Vantis Corporation.
19
<PAGE>
"CHANGE IN CONTROL EVENT" means any of the following:
(a) Approval by the stockholders of the Company of the dissolution or
liquidation of Vantis Corporation (other than a dissolution or
liquidation which is approved while members of the AMD Group
beneficially own a majority of the Common Stock); or
(b) Consummation of a merger, consolidation, or other reorganization of
the Company with or into, or a sale or other disposition of all or
substantially all of the Company's business and/or assets as an
entirety to, one or more entities which are not Subsidiaries or other
affiliates of the Company (each, a "BUSINESS COMBINATION"), unless (i)
as a result of the Business Combination at least 50% of the voting
securities then entitled to vote generally in the election of directors
(the "VOTING STOCK") of the entity surviving or resulting from the
Business Combination, or a parent thereof (the "SUCCESSOR Entity"),
immediately after the Business Combination are or will be directly or
indirectly owned by stockholders of the Company immediately before the
Business Combination, (ii) no Person (excluding the Successor Entity or
an Excluded Person) directly or indirectly beneficially owns more than
50% of the combined voting power of the Voting Stock of the Successor
Entity, after giving effect to the Business Combination, except to the
extent that such ownership existed prior to the Business Combination,
and (iii) at least 50% of the members of the board of directors of the
Successor Entity were members of the Board at the time of execution of
the initial agreement or action of the Board providing for the Business
Combination; or
(c) Any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), other than an Excluded Person, becomes the direct or
indirect beneficial owner (as defined in Rule 13d-3 under the Exchange
Act) of securities of the Company representing more than 30% of the
combined voting power of Voting Stock of the Company, other than as a
result of (i) an acquisition directly from the Company, (ii) an
acquisition by the Company, (iii) an acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company
or a Successor Entity, or (iv) an acquisition by any entity pursuant to
a transaction which is expressly excluded under subparagraph (b) above;
or
(d) During any period not longer than two consecutive years,
individuals who at the beginning of such period constituted the Board,
and any new director (other than any individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or consents by or
on behalf of a Person other than the Board) whose appointment,
election, or nomination for election by Vantis Corporation's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the
beginning of the period or whose appointment, election or nomination
for election was previously so approved, cease for any reason to
constitute a majority of the Board.
For purposes of determining whether a Change in Control Event has occurred, a
transaction includes all transactions in a series of related transactions.
"CODE" means the Internal Revenue Code of 1986, as amended from time to time.
20
<PAGE>
"COMMISSION" means the Securities and Exchange Commission.
"COMMITTEE" means (a) any one or more committees of director(s) appointed by the
Board to administer this Plan with respect to the Awards, acting within the
scope of authority delegated thereto by the Board, or (b) the Board as a whole.
At least one Committee shall be comprised of two or more directors, each of whom
in respect of any decision involving both (1) a Participant affected by the
decision who is or may be subject to limits under Section 162(m) in respect of a
particular Award and (2) compensation intended as a performance-based
compensation within the meaning of Section 162(m), shall be an "outside
director" as defined in Section 162(m). In acting on any grant or Award-related
transaction with or for the benefit of a Section 16 Person, "COMMITTEE" means a
committee comprised entirely of "non-employee directors" within the meaning of
Rule 16b-3 under the Exchange Act, or the Board as a whole; PROVIDED, HOWEVER,
that if one or more directors acting on such grant or transaction fail to
qualify as "non-employee directors" within the meaning of such rule, the
validity of any action taken by such directors or by the Committee or the Board
shall not be affected thereby.
"COMMON STOCK" means the common stock, par value $0.01 per share, of Vantis
Corporation and such other securities or property as may become the subject of
Awards, or become subject to Awards, pursuant to an adjustment made under
Section 6.2 of this Plan.
"COMPANY" means Vantis Corporation and/or its Subsidiaries, as the context
requires; PROVIDED that with respect to Common Stock, the grant, exercise or
disposition of an Award or the provisions of Sections 1.8, 5.2.1, 6.2.1, 6.2.3,
6.4 and 6.10, "COMPANY" means only Vantis Corporation.
"ELIGIBLE EMPLOYEE" means an officer (whether or not a director) or key employee
of the Company.
"ELIGIBLE PERSON" means an Eligible Employee, or any Other Eligible Person, as
determined by the Committee; PROVIDED that, with respect to decisions made prior
to registration under the Securities Act of the offer and sale of shares
issuable pursuant to Awards, the aggregate number and qualifications of Eligible
Persons shall be limited by the requirements of Section 25102(f) of the
California Corporate Securities Law of 1968 and Section 4(2) of the Securities
Act, as each may be amended from time to time.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from time
to time.
"EXCLUDED PERSON" means (a) any Person described in and satisfying the
conditions of Rule 13d-1(b)(1) under the Exchange Act, (b) AMD (or an affiliate,
successor, heir, descendant or related party of or to AMD), (c) the Company or
(d) an employee benefit plan (or related trust) sponsored or maintained by the
Company or the Successor Entity.
"FAIR MARKET VALUE" with respect to any stock means, as of the date of
determination:
(a) if the stock is listed or admitted to trade on a national
securities exchange, the closing price of the stock on such date on the
composite tape of the principal such exchange, or, if there is no
trading of the stock on such date, then the closing price of the
21
<PAGE>
stock as quoted on such composite tape on the next preceding date on
which there was trading in such shares;
(b) if the stock is not listed or admitted to trade on a national
securities exchange, the closing price for the stock on such date, as
reported by the National Association of Securities Dealers, Inc.
("NASD") through the Nasdaq National Market or a similar reporting
system, or by a similar reporting organization if the NASD is no longer
reporting such information on a reporting system;
(c) if the stock is not listed or admitted to trade on a national
securities exchange and is not reported by the NASD or a similar
reporting organization, the mean between the bid and asked price for
the stock on such date, as furnished by the NASD or a similar
organization; or
(d) if the stock is not listed or admitted to trade on a national
securities exchange and is not reported by the NASD or a similar
reporting organization, and if bid and asked prices for the stock are
not furnished by the NASD or a similar organization, the value
established by the Committee as of such date for purposes of this Plan.
Notwithstanding the foregoing, the Fair Market Value of the Common Stock for
purposes of determining the exercise price of the Initial Options shall be based
on the results of an independent appraisal of the equity value of Vantis
conducted prior to the time such Options are granted.
"INCENTIVE STOCK OPTION" or "ISO" means an Option which is designated and
intended as an incentive stock option within the meaning of Section 422 of the
Code, the award of which contains such provisions (including but not limited to
the receipt of stockholder approval of this Plan, if the award is made prior to
such approval) and is made under such circumstances and to such Persons as may
be necessary to comply with that section.
"INITIAL OPTIONS" means the Options granted to Participants concurrently with or
shortly after the adoption of this Plan.
"NONQUALIFIED STOCK OPTION" means an Option which is designated as a
nonqualified stock option and includes any Option intended as an Incentive Stock
Option which fails to meet the applicable legal requirements thereof. Any Option
granted hereunder which is not designated as an Incentive Stock Option shall be
deemed to be a nonqualified stock option and not an incentive stock option under
the Code.
"OPTION" means an option to purchase Common Stock granted under this Plan. The
Committee shall designate any Option granted to an Eligible Person as a
Nonqualified Stock Option or an Incentive Stock Option.
"OTHER ELIGIBLE PERSON" means any director, individual consultant, advisor or
(to the extent provided below) agent, including an employee or officer of a
parent corporation, who renders or has rendered bona fide services (including
services as a director but not including services in connection with the
offering or sale of securities of the Company in a capital raising transaction)
to the Company and who is selected to participate in this Plan by the Committee.
A director of
22
<PAGE>
Vantis Corporation who is a Section 16 Person shall not be selected as an Other
Eligible Person, unless such decision is approved by the Board. A non-employee
agent providing bona fide services to the Company (other than as an eligible
advisor or consultant) may be selected as an Other Eligible Person only if such
agent's participation in this Plan would not adversely affect (a) Vantis
Corporation's eligibility to use Form S-8 in the future to register under the
Securities Act the offering of securities issuable under this Plan by the
Company or (b) the Company's compliance with any other applicable laws.
"PARTICIPANT" means an Eligible Person who has been granted an Award under this
Plan.
"PERFORMANCE SHARE AWARD" means an Award of a right to receive shares of Common
Stock under Section 5.1, or a Performance-Based Award under Section 5.2, the
issuance or payment of which is contingent upon, among other conditions, the
attainment of performance objectives specified by the Committee.
"PERSON" means an association, corporation, individual, partnership, trust or
any other entity or organization, including a governmental entity and a "person"
as that term is used under Section 13(d) or 14(d) of the Exchange Act.
"PERSONAL REPRESENTATIVE" means the Person or Persons who, upon the disability
or legal incompetence of a Participant, have acquired on behalf of the
Participant, by legal proceeding or otherwise, the power to exercise rights or
receive benefits under this Plan by virtue of having become the legal
representative of the Participant.
"PLAN" means this 1999 Leadership Award Plan.
"RESTRICTED SHARES" or "RESTRICTED STOCK" means shares of Common Stock awarded
to a Participant under this Plan, subject to payment of such consideration, if
any, such conditions on vesting (which may include, among other things, the
passage of time, achievement of specified performance objectives or other
factors) and such transfer and other restrictions as are established in or
pursuant to this Plan and the related Award Agreement, for so long as such
shares remain unvested or restricted under the terms of the applicable Award
Agreement.
"RULE 16B-3" means Rule 16b-3 as promulgated by the Commission under the
Exchange Act, as such rule may be amended from time to time.
"SECTION 16 PERSON" means a Person subject to Section 16(a) of the Exchange Act.
"SECTION 162(M)" means Section 162(m) of the Code.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time to time.
"SETTLEMENT" means a cash payment, conversion, assumption or exchange with
respect to an outstanding Award.
"SEVERANCE DATE" means the date on which a Participant's employment by, or other
specified service to, the Company terminates.
23
<PAGE>
"STOCK APPRECIATION RIGHT" or "SAR" means a right authorized under this Plan to
receive a number of shares of Common Stock or an amount of cash, or a
combination of shares and cash, the aggregate amount or value of which is
determined by reference to a change in the Fair Market Value of the Common
Stock.
"STOCK BONUS" means an Award of shares of Common Stock granted under this Plan
for no consideration other than past services and without restriction other than
such transfer or other restrictions as the Committee may deem advisable to
assure compliance with law.
"STOCK UNIT" means a bookkeeping entry which serves as a unit of measurement
relative to a share of Common Stock for purposes of determining the payment of a
deferred benefit or right under the Plan.
"SUBSIDIARY" means any corporation or other entity a majority of whose
outstanding voting stock or voting power is beneficially owned directly or
indirectly by Vantis Corporation.
"TERMINATION FOR CAUSE" with respect to a Participant means (unless otherwise
expressly provided in the applicable Award Agreement or other contract) a
termination of service based upon a finding by the Committee, acting in good
faith and based on its reasonable belief at the time, that the Participant:
(a) is or has been dishonest, incompetent, or negligent in the
discharge of such Participant's duties to the Company; or has refused
to perform stated or assigned duties; or
(b) has committed an act of theft, embezzlement or fraud, a breach of
confidentiality, an unauthorized disclosure or use of inside
information, customer lists, trade secrets or other confidential
information, a breach of fiduciary duty, or a willful material
violation of any law, rule or regulation or rule or policy of the
Company or an affiliate; or has been convicted of a felony or
misdemeanor (other than minor traffic violations or similar offenses);
or
(c) has materially breached any of the provisions of any agreement with
the Company or a parent corporation; or
(d) has engaged in unfair competition with, or otherwise acted
intentionally in a manner injurious to the reputation, business or
assets of, the Company or an affiliate; has induced a customer to break
or terminate any contract with the Company or an affiliate; or has
induced any principal for whom the Company or an affiliate acts as
agent to terminate such agency relationship.
A Termination for Cause shall be deemed to occur (subject to reinstatement upon
a contrary final determination by the Committee) on the date on which the
Company first delivers written notice to the Participant of a finding of
Termination for Cause.
"TOTAL DISABILITY" means any medically determinable physical or mental
condition or impairment which prevents the Participant from performing the
essential functions of such Participant's job.
24
<PAGE>
"VANTIS CORPORATION" means Vantis Corporation, a Delaware corporation, and its
successors (if any).
25
