AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON JUNE 1, 1995
REGISTRATION NO. 33-______________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
ADVANCED LOGIC RESEARCH, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 33-0084573
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
9401 JERONIMO ROAD
IRVINE, CALIFORNIA 92718-1908
(Address of principal executive offices) (Zip code)
FLEXIBLE STOCK INCENTIVE PLAN
(Full title of the Plan)
GENE LU
CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
ADVANCED LOGIC RESEARCH, INC.
9401 JERONIMO ROAD, IRVINE, CALIFORNIA 92718-1908
(714) 581-6770
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration Registered
Registered<F1> per Share<F2> Price<F2> Fee
<S> <C> <C> <C> <C>
Options to purchase 1,780,390 N/A N/A N/A Common
Stock
Common Stock, 1,780,390 shares $5.875 $10,459,791.25 $3,606.82 $0.01 par
value
<F1> This Registration Statement shall also cover any additional
shares of Common Stock which become issuable under the Flexible Stock
Incentive Plan by reason of any stock dividend, stock split,
recapitalization or any other similar transaction without receipt of
consideration which results in an increase in the number of
outstanding shares of Common Stock of Advanced Logic Research, Inc.
<F2> Calculated solely for purposes of this offering under Rule
457(h) of the Securities Act of 1933, as amended, on the basis of the
average of the high and low selling prices per share of Common Stock
of Advanced Logic Research, Inc. on May 26, 1995, as reported by the
Nasdaq National Market.
</TABLE>
TOTAL PAGES _____
EXHIBIT INDEX ON PAGE _____
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
Advanced Logic Research, Inc. (the "Registrant") hereby
incorporates by reference into this Registration Statement the
following documents previously filed with the Securities and Exchange
Commission (the "SEC"):
(a) The Registrant's Annual Report on Form 10-K for the
fiscal year ended September 30, 1994, filed with the SEC on December 23,
1994;
(b) (1) The Registrant's Quarterly Report on Form 10-Q
for the fiscal quarter ended December 31, 1994 filed with the SEC on
February 14, 1995;
(2) The Registrant's Quarterly Report on Form 10-Q
for the fiscal quarter ended March 31, 1995 filed with the SEC on May 15,
1995; and
(c) The Registrant's Registration Statement No. 33-40369 on
Form S-1 filed with the SEC on May 3, 1991, as amended on May 17, 1991 and
May 23, 1991, in which there is described the terms, rights and provisions
applicable to the Registrant's outstanding Common Stock.
(d) Any similar report filed subsequently with the SEC
and distributed to the Registrant's stockholders.
All reports and definitive proxy or information statements
filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), after the date of
this Registration Statement and prior to the filing of a post-
effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities then
remaining unsold shall be deemed to be incorporated by reference into
this Registration Statement and to be a part hereof from the date of
filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As authorized by the Delaware General Corporation Law, as
amended (the "Delaware Law"), the Registrant's charter documents
provide that no director of the Registrant will be personally liable
to the Registrant or its stockholders for monetary damages for breach
of fiduciary duty as a director except for liability (i) for any
breach of the director's duty of loyalty to the Registrant or its
stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)
in respect of certain
<PAGE>
unlawful dividend payments or stock redemptions or repurchases and
(iv) for any transaction from which the director derives an improper
personal benefit. The effect of this provision is to eliminate the
rights of the Registrant and its stockholders (through stockholders'
derivative suits on behalf of the Registrant) to recover monetary
damages against a director for breach of the fiduciary duty of care
as a director (including breaches resulting from negligent or grossly
negligent behavior) except in the situations described in clauses (i)
through (iv) above. This provision does not limit or eliminate the
rights of the Registrant or any stockholder to seek nonmonetary
relief such as an injunction or rescission in the event of a breach
of a director's duty of care. In addition, the Registrant's charter
documents provide for indemnification of the directors and officers
of the Registrant to the fullest extent authorized under Delaware
Law, and that if the Delaware Law is amended to authorize broader
indemnification of officers and directors or the further elimination
or limitation of the liability of a director, then such
indemnification shall be increased and such liability shall be
eliminated or limited to the fullest extent permitted by the Delaware
Law, as so amended.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8. EXHIBITS
EXHIBIT NO. EXHIBIT
5 Opinion of Brobeck, Phleger & Harrison.
23.1 Consent of Independent Accountants -- KPMG Peat
Marwick LLP.
23.2 Consent of Brobeck, Phleger & Harrison is
contained in Exhibit 5.
24 Power of Attorney. Reference is made to page
II-4 of this Registration Statement.
99.1 Flexible Stock Incentive Plan.
99.2 Form of Incentive Stock Option Agreement.
99.3 Form of Non-Qualified Stock Option Agreement.
99.4 Form of Non-Qualified Stock Option Agreement.
99.5 Form of Restricted Stock Purchase Agreement.
99.6 Form of Restricted Stock Bonus Agreement.
II-2
<PAGE>
ITEM 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes: (1) to file,
during any period in which offers or sales are being made, a post-
effective amendment to this Registration Statement (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act of
1933, as amended (the "1933 Act"), (ii) to reflect in the prospectus
any facts or events arising after the effective date of this
Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this Registration
Statement and (iii) to include any material information with respect
to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in
this Registration Statement; provided, however, that clauses (1)(i)
and (1)(ii) shall not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the 1934 Act that are incorporated by
reference into this Registration Statement; (2) that for the purpose
of determining any liability under the 1933 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; and (3) to remove from
registration by means of a post-effective amendment any of the
securities being registered which remain unsold upon the termination
of the Registrant's Flexible Stock Incentive Plan.
B. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the 1933 Act, each filing
of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the 1934 Act that is incorporated by reference into
this Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under
the 1933 Act may be permitted to directors, officers or controlling
persons of the Registrant pursuant to the indemnity provisions
incorporated by reference in Item 6, or otherwise, the Registrant has
been informed that in the opinion of the SEC such indemnification is
against public policy as expressed in the 1933 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
1933 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, as
amended, 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
Irvine, State of California on this 25th day of May 1995.
ADVANCED LOGIC RESEARCH, INC.
By: /S/GENE LU
Gene Lu
Chairman of the Board,
President
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of Advanced Logic
Research, Inc., a Delaware corporation, do hereby constitute and
appoint Gene Lu and Ronald J. Sipkovich, and each of them, the lawful
attorneys-in-fact and agents, with full power and authority to do any
and all acts and things and to execute any and all instruments which
said attorneys and agents, or either one of them, determine may be
necessary or advisable or required to enable said corporation to
comply with the Securities Act of 1933, as amended, and any rules or
regulation or requirements of the Securities and Exchange Commission
in connection with this Registration Statement. Without limiting the
generality of the foregoing power and authority, the powers granted
include the power and authority to sign the names of the undersigned
officers and directors in the capacities indicated below to this
Registration Statement, to any and all amendments, both pre-effective
and post-effective, and supplements to this Registration Statement
and to any and all instruments or documents filed as part of or in
conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and
confirms all that said attorneys and agents, or either one of them,
shall do or cause to be done by virtue hereof. This Power of
Attorney may be signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this
Power of Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933,
as amended, this Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
SIGNATURES TITLE DATE
/S/GENE LU Chairman of the Board, May 25, 1995
Gene Lu President and Chief
Executive Officer
(Principal Executive
Officer)
II-4
<PAGE>
<PAGE>
SIGNATURES TITLE DATE
/S/RONALD J. SIPKOVICH Vice President, May 25, 1995
Ronald J. Sipkovich Finance and
Administration,
Chief Financial
Officer and Secretary
(Principal Financial
and Accounting
Officer)
/S/PHILIP A. HARDING Director May 25, 1995
Philip A. Harding
/S/THERESE E. MYERS Director May 25, 1995
Therese E. Myers
/S/KENNETH W. SIMONDS Director May 25, 1995
Kenneth W. Simonds
/S/CHUN WIN WONG Director May 25, 1995
Chun Win Wong
II-5
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
ADVANCED LOGIC RESEARCH, INC.
<PAGE>
<PAGE>
EXHIBIT INDEX
Sequentially Numbered
EXHIBIT NO. EXHIBIT PAGE
5 Opinion of Brobeck, Phleger & Harrison.
23.1 Consent of Independent Accountants -- KPMG Peat
Marwick LLP.
23.2 Consent of Brobeck, Phleger & Harrison is
contained in Exhibit 5.
24 Power of Attorney. Reference is made to page
II-4 of this Registration Statement.
99.1 Flexible Stock Incentive Plan.
99.2 Form of Incentive Stock Option Agreement.
99.3 Form of Non-Qualified Stock Option Agreement.
99.4 Form of Non-Qualified Stock Option Agreement.
99.5 Form of Restricted Stock Purchase Agreement.
99.6 Form of Restricted Stock Bonus Agreement.
EXHIBIT 5
Opinion of Brobeck, Phleger & Harrison
<PAGE>
May 25, 1995
ADVANCED LOGIC RESEARCH, INC.
9401 Jeronimo Road
Irvine, California 92718-1908
RE: ADVANCED LOGIC RESEARCH, INC. (THE "CORPORATION") --
REGISTRATION STATEMENT FOR OFFERING OF 1,107,500
SHARES OF COMMON STOCK
Ladies and Gentlemen:
We refer to your registration on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended, of
1,107,500 shares of the Corporation's Common Stock authorized for
issuance under the Flexible Stock Incentive Plan (the "Plan"). We
advise you that, in our opinion, when such shares have been issued
and sold pursuant to the provisions of the Plan, and in accordance
with the Registration Statement, such shares will be validly issued, fully
paid and non-assessable shares of the Corporation's Common
Stock.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement.
Very truly yours,
BROBECK, PHLEGER & HARRISON
EXHIBIT 23.1
Consent of Independent Accountants - KPMG Peat Marwick LLP
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Advanced Logic Research, Inc.:
We consent to incorporation by reference in the registration
statement on Form S-8 of Advanced Logic Research, Inc. of our
report dated November 9, 1994, relating to the consolidated
balance sheets of Advanced Logic Research, inc. and subsidiaries
as of September 30, 1994 and 1993, and the related consolidated
statements of operations, stockholders' equity, and cash flows
for each of the years in the three-year period ended
September 30, 1994, and related schedule, which report appears in
the September 30, 1994 annual report on Form 10-K of Advanced
Logic research, Inc.
KPMG Peat Marwick LLP
Orange County, California
May 26, 1995
<PAGE>
EXHIBIT 23.2
Consent of Brobeck, Phleger & Harrison is
contained in Exhibit 5
<PAGE>
EXHIBIT 24
Power of Attorney. Reference is made to
page II-4 of this Registration Statement.
EXHIBIT 99.1
Flexible Stock Incentive Plan
<PAGE>
ADVANCED LOGIC RESEARCH, INC.
FLEXIBLE STOCK INCENTIVE PLAN
1. ESTABLISHMENT, PURPOSE, AND DEFINITIONS.
(a) There is hereby adopted the Flexible Stock Incentive
Plan (the "Plan") of Advanced Logic Research, Inc. (the "Company").
The Plan shall have three components: a stock option component, a
stock bonus/stock purchase component and a stock appreciation
rights component.
(b) The purpose of this Plan is to provide incentives to
selected individuals ("Participants") for increased efforts and
successful achievements on behalf of or in the interests of the
Company and its affiliates and to maximize the rewards due them for
such increased efforts and successful achievements.
(c) The stock option component is intended to provide a
means whereby Participants may be given an opportunity to purchase
shares of Stock, (as defined in Paragraph 3 of the Plan) of the
Company (the "Stock") pursuant to (i) options which may qualify as
incentive stock options under Section 422A of the Internal Revenue
Code as amended from time to time (referred to as "incentive stock
options"), or (ii) options which may not so qualify (referred to as
"nonqualified stock options"). The stock bonus/stock purchase
component is intended to provide a means whereby Participants may
receive bonuses of Stock or the right to purchase Stock, including
Stock subject to such restrictions, if any, imposed by the
committee of the Board of Directors of the Company charged with
administering the Plan (the "Committee"). The stock appreciation
rights component is intended to provide a means whereby
Participants may receive compensation based on appreciation in the
value of the Stock. Stock appreciation rights may be granted
either separately or in tandem with stock options, as determined by
the Committee.
(d) The term "affiliates" as used in the Plan means
parent or subsidiary corporations, as defined in Section 425(e) and
(f) of the Internal Revenue Code (but substituting "the Company"
for "employer corporation"), including parents or subsidiaries
which become such after adoption of the Plan.
1
<PAGE>
2. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by the Committee.
The Committee shall consist of at least three members of the Board
of Directors of the Company (the "Board") or such lesser number of
members of the Board as permitted by Rule 16b-3 promulgated under
the Securities Exchange Act of 1934. None of the members of the
Committee shall be, while serving on the Committee or for one year
thereafter, or shall have been for the year preceding appointment
to the Committee, eligible to receive a grant or award under the
Plan or any other plan of the Company or its affiliates under which
the participants are entitled to acquire Stock (including
restricted Stock), stock options, stock bonuses, related rights or
stock appreciation rights of the Company or any of its affiliates.
Members of the Committee shall serve at the pleasure of the Board.
(b) The Committee may from time to time determine which
employees of the Company or its affiliates or other individuals
shall be granted options, Stock bonuses, stock appreciation rights
or the right to purchase Stock under the Plan, the terms thereof,
and the number of shares for which an option or options, bonuses of
Stock, rights to purchase Stock and stock appreciation rights may
be granted. The Committee may, in its discretion, at the time of
granting bonuses of Stock or rights to purchase Stock impose such
restrictions on transfer of the shares of Stock covered thereby
(such as, without limitation, permitting transfer only in
installments over a period of years or following retirement, death
or termination of employment) as it may deem to be in the best
interests of the Company and/or the Participant concerned, or the
Participant's successor-in-interest, and in so doing may subject
such shares to a substantial risk of forfeiture while so
restricted.
(c) If restrictions on transfer of Stock are imposed,
the Committee may, in its sole discretion, accelerate, in whole or
in part, the time for lapsing of the restrictions on disposition of
shares of such Stock in the event that any financial hardship may
arise with respect to a Participant who has been issued restricted
Stock hereunder, or any successor-in-interest of such Participant
(including, without limitation, any financial hardship to a
successor-in-interest of such Participant occasioned by death taxes
becoming payable as a result of such Participant's death), or in
the event of any change in existing tax or other applicable laws,
regulations or rulings which would have a substantial adverse
effect on Participant's treatment of the additional compensation
provided for herein for tax purposes thereby resulting in financial
hardship to a Participant.
2
<PAGE>
(d) If restrictions on transfer of Stock are imposed,
the certificates evidencing such shares of Stock awarded hereunder,
although issued in the name of the Participant concerned, shall be
held by the Company or a third party designated by the Committee in
escrow subject to delivery to the Participant or to the Company at
such times and in such amounts as shall be directed by the Board
under the terms of this Plan.
(e) The Committee shall have the sole authority, in its
absolute discretion, to adopt, amend, and rescind such rules and
regulations as, in its opinion, may be advisable in the
administration of the Plan, to construe and interpret the Plan, the
rules and regulations, and the instruments evidencing options,
bonuses of Stock, rights to purchase Stock and stock appreciation
rights granted under the Plan and to make all other determinations
deemed necessary or advisable for the administration of the Plan.
All decisions, determinations, and interpretations of the Board
shall be binding on all Participants in the Plan.
3. STOCK SUBJECT TO THE PLAN.
(a) Stock shall mean Common Stock, without par value, of
the Company or such stock as the Common Stock may be changed as
contemplated by subparagraph 3(c) below.
(b) Options, bonuses of Stock or rights to purchase
Stock may be granted under the Plan from time to time to eligible
persons to purchase an aggregate of not more than the greater of 5%
of authorized shares of Stock or 15% of shares outstanding as of
the close of business on the last day of the Company's prior fiscal
year. Notwithstanding the foregoing, the number of shares
available for grants of incentive stock options shall be limited to
15% of the authorized shares on the date this Plan is adopted. If
any option is surrendered for cash or for any other reason (except
surrender for shares of Stock) or ceases to be exercisable in whole
or in part, the shares which were subject to such option but as to
which the option had not been exercised shall continue to be
available under the Plan. Any shares of Stock forfeited to the
Company pursuant to the Plan shall continue to be available under
the Plan.
(c) If there shall be any change in the Stock subject to
the Plan, including Stock subject to any option granted hereunder,
through merger, consolidation, reorganization, reincorporation, or
other similar change in the corporate structure of the Company,
appropriate
3
<PAGE>
adjustments may be made by the Committee in order to preserve but
not to increase the benefits to Participants, including adjustments
in the aggregate number of shares subject to the Plan and the
number of shares and the price per share subject to outstanding
options and outstanding rights to purchase Stock granted hereunder.
Consistent with the foregoing, in the event that the outstanding
Common Stock of the Company is changed into another class or series
of capital stock of the Company, outstanding options or rights to
purchase Stock granted under the Plan shall become options or
rights to purchase such other class or series and the provisions of
this subparagraph 3(c) shall apply to such new class or series.
4. ELIGIBILITY.
Persons who shall be eligible to have granted to them
options, Stock bonuses, rights to purchase Stock, or stock
appreciation rights provided for by the Plan shall be such
individuals in the service of the Company or its affiliates as the
Committee in its discretion determines, should be awarded such
incentives given the best interests of the Company; provided,
however that (i) incentive stock options may only be granted to
employees of the Company or its affiliates, (ii) any person holding
10% or more of the Company's outstanding Stock or any affiliate of
any such 10% shareholder shall not be eligible to receive options,
Stock bonuses, rights to purchase Stock or stock appreciation
rights under the Plan; members of the Committee shall not be
eligible to receive options, Stock bonuses, rights to purchase
Stock or stock appreciation rights while serving on the Committee
and for one year thereafter.
5. EXERCISE PRICE FOR OPTIONS GRANTED UNDER THE PLAN; STOCK
PURCHASE PRICE.
The exercise price of the Stock covered by each incentive
stock option shall not be less than the per-share fair market value
of such Stock on the date the option is granted. The price of an
incentive stock option, of a nonqualified stock option, or other
right to purchase Stock granted under the Plan shall be subject to
adjustment to the extent provided in subparagraph 3(c), above.
The exercise price of the Stock covered by a nonqualified
stock option or the purchase price for other rights to purchase
Stock (other than an incentive stock option) granted under the Plan
shall be the price determined by the Committee on the date the
option or right is granted, but in no event less than 85% of the
per-share fair market value of the Stock on the grant date. Stock
bonuses may be granted by the Committee under the Plan without the
payment of consideration, in any form by the
4
<PAGE>
Participant, or such consideration as is necessary to comply with
applicable law.
6. TERMS AND CONDITIONS OF OPTIONS; STOCK BONUSES AND RIGHTS
TO PURCHASE RESTRICTED STOCK.
(a) Each option granted pursuant to the Plan shall be
evidenced by a written stock option agreement executed by the
Company and the person to whom such option is granted. The option
agreement shall designate whether the option is an incentive stock
option or a non-qualified stock option. If restrictions are
imposed on Stock bonuses or rights to purchase Stock, the Stock
issued thereunder shall be subject to a written agreement executed
by the Company and the Participant to whom the Stock bonus or right
to purchase Stock is granted.
(b) The term of each stock option shall be for no more
than ten years and no stock option shall be granted more than ten
years after the earlier of (i) the date the Plan was adopted or
(ii) the date the Plan was approved by the shareholders.
(c) In the case of incentive stock options, the
aggregate fair market value (determined as of the time such option
is granted) of the Stock with respect to incentive stock options
which are exercisable for the first time by such individual during
any calendar year (under this Plan and any other plans of the
Company, its parent or subsidiaries, if any) shall not exceed the
amount specified in Section 422A(d) of the Internal Revenue Code,
as amended, or any successor provision in effect at the time an
incentive stock option becomes exercisable.
(d) The stock option agreement or agreement covering
Stock issued under the Plan may contain such other terms,
provisions, and conditions as may be determined by the Committee
and not inconsistent with this Plan. If an option, or any part
thereof, is intended to qualify as an incentive stock option, the
stock option agreement shall contain those terms and conditions
which are necessary to so qualify it. No option or stock
appreciation right granted under the Plan may be exercised prior to
six months after the date of grant nor may any Stock bonus or
shares of Stock acquired pursuant to any other right to purchase
Stock under the Plan be sold prior to six months after the date
such Stock was acquired by a Participant.
5
<PAGE>
7. USE OF PROCEEDS.
Cash proceeds realized from the sale of Stock pursuant to
Stock issued under the Plan shall constitute general funds of the
Company.
8. AMENDMENT SUSPENSION OR TERMINATION OF THE PLAN.
(a) The Board may at any time suspend or terminate the
Plan, and may amend it from time to time in such respects as the
Board may deem advisable provided that such amendment, suspension
or termination complies with all applicable state and federal
requirements and requirements of any stock exchange on which the
stock is then listed, including any applicable requirement that the
Plan or an amendment to the Plan be approved by the shareholders.
The Plan will in all events terminate on _________________.
(b) No option, Stock bonus, right to purchase Stock or
stock appreciation right may be granted during an suspension or
after the termination of the Plan, and no amendment, suspension or
termination of the Plan shall, without the Participant's consent,
alter or impair any rights or obligations under any option, Stock
bonus, right to purchase Stock or stock appreciation right granted
under the Plan; provided, however, that the Board shall have the
right to amend, suspend or terminate any option, Stock bonus, right
to purchase restricted stock or stock appreciation right to
(a) convert outstanding incentive stock options into nonqualified
stock options, (b) provide for a forfeiture of the Participant's
rights in the event the Participant competes with the Company or
(c) if the Participant is an employee, in the event the Participant
is terminated for cause.
9. ASSIGNABILITY OF OPTIONS.
Each option or right to purchase Stock granted pursuant
to this Plan shall, during the Participant's lifetime, be
exercisable only by him, and neither the option nor any right to
purchase Stock shall be transferable by the Participant by
operation of law or otherwise other than by will or the laws of
descent and distribution.
10. PAYMENT UPON EXERCISE.
Payment of the purchase price upon exercise of any option
or right to purchase Stock granted under this Plan shall be made in
whole or in part with (i) cash, (ii) stock or stock rights held by
the Participant, (iii) notes, or (iv) such other valuable
consideration as the Committee, in its discretion, determines and
is consistent with the
6
<PAGE>
Plan's purpose and applicable law. Any Stock used to exercise
options to purchase Stock shall be valued at its fair market value
on the date of the exercise of the option or the date the Stock is
purchased. Any notes used to exercise options or to purchase Stock
shall be full recourse, interest-bearing obligations containing
such terms as the Committee shall determine.
11. STOCK APPRECIATION RIGHTS.
(a) The Committee may, under such terms and conditions
as it deems appropriate, authorize the issuance of stock
appreciation rights evidenced by a written stock appreciation right
agreement (which, in cases of tandem options, may be part of the
stock option agreement to which the right relates) executed by the
Company and the person to whom such right is granted. The stock
appreciation right agreement may contain such terms, provisions and
conditions as may be determined by the Committee and not
inconsistent with the Plan. In addition, the Committee may
authorize the surrender by an optionee of all or part of an
unexercised option and authorize a payment in consideration thereof
of an amount equal to the difference obtained by subtracting the
option price of the shares then subject to exercise under such
option from the fair market value of the Stock represented by such
shares on the date of surrender, provided that the Committee
determines that such settlement is consistent with the purpose of
the Plan. Such payment may be made in shares of Stock valued at
their fair market value on the date of surrender of such option or
in cash, or partly in shares and partly in cash. Acceptance of
such surrender and the manner of payment shall be in the discretion
of the Committee.
(b) The Committee shall have the authority in its
discretion to grant the holder of any option the right ("Cash-out
Right") to surrender all or part of his unexercised option
("Related Option") to the Company for cancellation under the
circumstances set forth below (whether or not such Related Option
is then exercisable) and to receive upon such surrender the cash
payment described in subparagraph (b)(i) below; provided that no
Related Option shall be surrendered pursuant to a Cash-out Right
until the expiration of six months from the date of grant of such
Cash-out Right. A Cash-out Right may not be granted except in
connection with a Related Option. A Cash-out Right may be granted
either at the time of the grant of the Related Option or at any
time thereafter during its term. Upon the surrender of a Related
Option pursuant to a Cash-out Right, the Related Option shall cease
to be exercisable to the extent of the shares of Stock as to which
the Related Option
7
<PAGE>
is surrendered and cancelled. Upon the exercise or termination of
a Related Option, a Cash-out Right shall concurrently cease to be
available to the optionee to the extent of the shares of stock as
to which the Related Option is exercised or terminated. Each Cash-
out Right grant shall be on such terms and conditions as the
Committee may prescribe that are not inconsistent with this Plan
and shall be evidenced by the stock option agreement contemplated
by paragraph 6.
(i) The term "Offer" as used in this subparagraph
11(b) shall mean any tender offer or exchange offer for shares of
Stock, other than one made by the Company. An Offer shall be
deemed to have commenced for the purposes of this Plan when all of
the material terms of the tender offer or exchange offer shall have
been publicly disclosed or on such earlier date as shall be
determined by the Committee.
(ii) The term "Reorganization Agreement" as used in
this subparagraph 11(b) shall mean a definitive agreement for the
merger, consolidation or other similar reorganization of the
Company, involving a change in or an exchange of the Stock, or a
definitive agreement for the sale of all or substantially all of
the assets of the Company.
(iii) The term "Transaction Price per Share" as used
in this subparagraph 11(b) shall mean the highest price per share
of Stock (i) paid in the Offer or (ii) provided for in the
Reorganization Agreement during the period beginning on the 60th
day prior to the date on which the Related Option is surrendered
pursuant to the Cash-out Right and ending on such date of
surrender. Any securities or property that are part or all of the
consideration paid for Stock in the Offer or provided for in
exchange for Stock pursuant to the Reorganization Agreement shall
be valued in determining the Transaction Price per Share at the
valuation placed on such securities or property by the Committee.
(iv) In the case of an Offer, an optionee may
surrender his Related Option pursuant to a Cash-out Right only
during the period beginning on the first day following the date of
public disclosure of the first purchase of shares of Stock pursuant
to the Offer and ending on the 30th day following such date. Under
a Cash-out Right, an optionee may surrender his or her Related
Option in whole or in part; provided that, in its discretion, the
Committee may limit the percentage of shares as to which such
Related Option is surrendered to the lesser of (i) 50% or (ii) the
percentage that the number of shares of Stock purchased in
8
<PAGE>
the Offer bears to the total number of shares of Stock tendered or
exchanged in the Offer (including as "Stock" for such purposes any
shares of Stock represented by securities of the Company
convertible into Stock that are tendered or exchanged in the
Offer).
(v) In the case of a Reorganization Agreement, an
optionee may surrender his Related Option pursuant to a Cash-out
Right only during the period (i) beginning with the later of the
execution of the Reorganization Agreement or approval, if required,
of the Reorganization Agreement by the Company's shareholders and
appropriate regulatory agencies, and (ii) ending with the earlier
of the consummation of the transactions contemplated by the
Reorganization Agreement or the termination of such Reorganization
Agreement.
(vi) Upon a proper surrender by an optionee of his
Related Option for cancellation pursuant to a Cash-out Right, the
optionee shall receive a cash payment with respect to each share of
Stock covered by the Cash-out Right equal to the difference between
(i) the Transaction Price per Share and (ii) the per-share exercise
price of the surrendered Related Option.
12. WITHHOLDING TAXES.
(a) Shares of Stock issued hereunder shall be delivered
to a Participant only upon payment by such person to the Company of
the amount of any withholding tax which may be imposed thereon
under the provisions of the Internal Revenue Code as then in effect
or any law of any other taxing jurisdiction requiring such
withholding tax.
(b) The Committee may, under such terms and conditions
as it deems appropriate, authorize a Participant to satisfy
withholding tax obligations under this paragraph 12 by electing to
have the Company withhold from the Stock to be issued to the
Participant shares of Stock having a fair market value equal to the
amount of the withholding tax required to be withheld.
9
<PAGE>
EXHIBIT "A"
AMENDMENTS TO
FLEXIBLE STOCK INCENTIVE PLAN
The following sections to the Advanced Logic Research,
Inc. Flexible Stock Incentive Plan are hereby amended to read in
their entirety as follows:
2. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by the
Committee. The Committee shall consist of two or more members of
the Board of Directors of the Company (the "Board") or such lesser
number of members of the Board as permitted by Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended,
("Rule 16b-3"). None of the members of the Committee shall
receive, while serving on the Committee, or during the year
preceding appointment to the Committee, a grant or award of equity
securities under (i) the Plan or (ii) any other plan of the Company
or its affiliates under which the participants are entitled to
acquire Stock (including restricted Stock), stock options, stock
bonuses, related rights or stock appreciation rights of the Company
or any of its affiliates, other than pursuant to transactions in
any such other plan which do not disqualify a director from being a
disinterested person under Rule 16b-3. Members of the Committee
shall serve at the pleasure of the Board.
3. STOCK SUBJECT TO THE PLAN.
(b) Options, bonuses of Stock or rights to purchase
Stock may be granted under the Plan from time to time to eligible
persons to purchase an aggregate of not more than the greater of 5%
of authorized shares of Stock or 15% of shares outstanding as of
the close of business on the last day of the Company's prior fiscal
year. Notwithstanding the foregoing, the number of shares
available for grants of incentive stock options shall be limited to
15% of the authorized shares on the date this Plan is adopted.
Should one or more outstanding options under this Plan expire or
terminate for any reason prior to exercise in full, then the shares
subject to the portion of each option not so exercised shall be
available for subsequent option grant or share issuance under the
Plan. Shares subject to any option or portion thereof surrendered
or cancelled in accordance with Paragraph 10 or 12, repurchased by
the Company pursuant to its repurchase rights under the Plan or
otherwise surrendered for cancellation
EXHIBIT "A"
<PAGE>
under Paragraph 12 shall not be available for subsequent option
grant or stock issuance under the Plan.
6. TERMS AND CONDITIONS OF OPTIONS; STOCK BONUSES AND
RIGHTS TO PURCHASE RESTRICTED STOCK.
(d) The stock option agreement or agreement
covering Stock issued under the Plan may contain such other terms,
provisions, and conditions as may be determined by the Committee
and not inconsistent with this Plan. If an option, or any part
thereof, is intended to qualify as an incentive stock option, the
stock option agreement shall contain those terms and conditions
which are necessary to so qualify it. No option or stock
appreciation right granted under the Plan may be exercised prior to
six months after the date of grant nor may any Stock bonus or
shares of Stock acquired pursuant to any other right to purchase
Stock under the Plan be sold prior to six months after the date
such Stock was acquired by a Participant who is at the time of such
grant or issuance required to file reports under Section 16(a) of
the Securities Exchange Act of 1934, as amended.
9. ASSIGNABILITY OF OPTIONS.
Each option or right to purchase Stock granted
pursuant to this Plan shall, during the Participant's lifetime, be
exercisable only by him, and neither the option nor any right to
purchase Stock shall be transferable by the Participant by
operation of law or otherwise other than by will, the laws of
descent and distribution or pursuant to a qualified domestic
relations order as defined by the Internal Revenue Code, or Title I
of the Employee Retirement Income Security Act of 1974, as amended,
or the rules thereunder, or otherwise as permitted by Rule 16b-3.
10. PAYMENT UPON EXERCISE.
Payment of the purchase price upon exercise of any
option or right to purchase Stock granted under this Plan shall be
made in whole or in part with (i) cash or, (ii) such other
consideration as the Committee, in its discretion, determines
(including, without limitation, Stock or Stock rights held by the
Participant, withholding of shares otherwise delivered upon
exercise of an option and/or notes) and is consistent with the
Plan's purpose and applicable law. Any Stock used to exercise
options to purchase Stock (including Stock withheld upon the
exercise of an option to pay the purchase price of the shares of
Stock as to which the option is exercised) shall be valued at its
fair market value on the date of the exercise of the option. Any
notes used to exercise options or to purchase Stock shall be full
recourse, interest-bearing obligations containing such terms as the
Committee shall determine. If
2.
<PAGE>
accepted by the Committee in its discretion, such consideration
also may be paid through a broker-dealer sale and remittance
procedure pursuant to which the Participant (I) shall provide
irrevocable written instructions to a designated brokerage firm to
effect the immediate sale of the purchased shares and remit to the
Company, out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate option price payable for
the purchased shares plus all applicable Federal and State income
and employment taxes required to be withheld by the Company in
connection with such purchase and (II) shall provide written
directives to the Company to deliver the certificates for the
purchased shares directly to such brokerage firm in order to
complete the sale transaction.
12. WITHHOLDING TAXES.
(b) The Committee may, under such terms and
conditions as it deems appropriate, authorize a Participant to
satisfy withholding tax obligations under this Paragraph 12 by
delivering shares of Stock or by electing to have the Company
withhold from the Stock to be issued to the Participant shares of
Stock, in each case having a fair market value equal to the amount
of the withholding tax required to be withheld.
3.
<PAGE>
EXHIBIT "B"
AMENDMENT #2 TO
ADVANCED LOGIC RESEARCH, INC.
FLEXIBLE STOCK INCENTIVE PLAN
The Advanced Logic Research, Inc. Flexible Stock
Incentive Plan (the "Plan") is hereby amended, effective January 4,
1995 as follows:
1. Section V.C. of Article One is hereby amended in its
entirety to read as follows:
C. Should any change be made to the Common Stock
issuable under the Plan by reason of any stock split, stock
dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a
class without the Corporation's receipt of consideration, then
appropriate adjustments shall be made to (i) the maximum number
and/or class of securities issuable under the Plan, (ii) the
maximum number and/or class of securities for which any one
individual participating in the Plan may be granted stock options,
separately exercisable stock appreciation rights and direct stock
issuances in the aggregate over the term of the Plan, (iii) the
number and/or class of securities for which automatic option grants
are to be subsequently made per non-employee Board member under the
Automatic Option Grant Program, (iv) the number and/or class of
securities and price per share in effect under each option
outstanding under either the Discretionary Option Grant or
Automatic Option Grant Program and (v) the number and/or class of
securities and price per share in effect under each outstanding
option incorporated into this Plan from the 1990 Plan. Such
adjustments to the outstanding options are to be effected in a
manner which shall preclude the enlargement or dilution of rights
and benefits under such options. The adjustments determined by the
Plan Administrator shall be final, binding and conclusive.
2. There is hereby added a new subsection D to
Section V of Article One of the Plan to read as follows:
D. From and after March 31, 1994, in no event may any
one individual participating in the Plan be granted stock options,
separately exercisable stock appreciation rights and receive direct
stock issuances exceeding 500,000 shares in the aggregate over the
term of the Plan, subject to periodic adjustment for certain
changes in the Company's capital structure in accordance with the
provisions of this Section V.C.
3. Except as modified by this plan amendment, the
<PAGE>
terms and provisions of the Advanced Logic Research, Inc. Flexible
Stock Incentive Plan as in effect on the date hereof shall continue
in full force and effect.
IN WITNESS WHEREOF, Advanced Logic Research, Inc. has
caused this plan amendment to be executed on its behalf by its
duly-authorized officer effective as of January 4, 1995.
ADVANCED LOGIC RESEARCH, INC.
By ________________________________
Title: ____________________________
EXHIBIT 99.2
Form of Incentive Stock Option Agreement
<PAGE>
ADVANCED LOGIC RESEARCH, INC.
INCENTIVE STOCK OPTION AGREEMENT
This Agreement is made as of _______________, 199__ (the
"Grant Date"), between Advanced Logic Research, Inc., a
_______________ corporation (the "Company"), and
_______________________________ ("Optionee").
WITNESSETH:
WHEREAS, the Company has adopted the Advanced Logic
Research, Inc., Flexible Stock Incentive Plan (the "Plan"), which
Plan is incorporated in this Agreement by reference and made a part
of it; and
WHEREAS, the Company [recognizes the past efforts by
Optionee on behalf of the Company and its affiliates and] desires
to motivate Optionee in Optionee's work for the Company and its
affiliates; and
WHEREAS, the Company has determined that it would be to
the advantage and interest of the Company and its shareholders to
grant the options provided for in this Agreement to Optionee as [a
reward and] an incentive for increased efforts during such service;
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth, the parties to this Agreement hereby agree
as follows:
1. OPTION GRANT. The Company hereby grants to Optionee
the right and option to purchase from the Company on the terms and
conditions hereinafter set forth, all or any part of an aggregate
of ____________ shares of the Common Stock of the Company (the
"Stock"). The purchase price of the Stock subject to this option
shall be $_________ per share, which price is not less than the per
share fair market value [or, if the optionee is a 10% or more
shareholder, not less than 110% of fair market value] of such Stock
as of the Grant Date as determined by the committee of the Board of
Directors of the Company which administers the Plan (the
"Committee"). This option is intended to satisfy the requirements
of Section 422A of the Internal Revenue Code (the "Code").
2. OPTION PERIOD. This option shall be exercisable only during
the Option Period, and during such Option Period, the
exercisability of the option shall be subject to the limitations of
paragraph 3 and the vesting
1
<PAGE>
provisions of paragraph 4. The Option Period shall commence on the
Grant Date and except as provided in paragraph 3, shall end on the
Terminal Date which shall be [ten years] [or, if the optionee is a
10% or more shareholder, not less than 5 years] from the [Grant
Date].
3. LIMITS ON OPTION PERIOD. The Option Period may end
before the Terminal Date, as follows:
(a) If Optionee ceases to be a bona fide employee
of the Company or an affiliate for any reason other than cause,
disability (within the meaning of subparagraph (c)) or death during
the Option Period, the Option Period shall terminate [three months]
after the date of such cessation of employment or on the Terminal
Date, whichever shall first occur, and the option shall be
exercisable only to the extent exercisable under paragraph 4 on the
date of Optionee's cessation of employment.
(b) If Optionee should die while in the employ of
the Company or its affiliates, the Option Period shall end [one
year] after the date of death or on the Terminal Date, whichever
shall first occur, and Optionee's executor or administrator or the
person or persons to whom Optionee's rights under this option shall
pass by will or by the applicable laws of descent and distribution
may exercise the entire unexercised portion of this option (or any
lesser amount).
(c) If Optionee's employment is terminated by
reason of disability (within the meaning of Section 105(d)(4) of
the Code), the Option Period shall end [one year] after the date of
Optionee's cessation of employment or on the Terminal Date,
whichever shall first occur, and the option shall be exercisable
only to the extent exercisable under paragraph 4 on the date of
Optionee's cessation of employment.
(d) If Optionee is on a leave of absence from the
Company or an affiliate because of his disability, or for the
purpose of serving the government of the country in which the
principal place of employment of Optionee is located, either in a
military or civilian capacity, or for such other purpose or reason
as the Committee may approve, Optionee shall not be deemed during
the period of such absence, by virtue of such absence alone, to
have terminated employment with the Company or an affiliate except
as the Committee may otherwise expressly provide.
(e) If Optionee's employment with the Company or an
affiliate terminates for cause during the Option
2
<PAGE>
Period, the Option Period shall terminate on the date of such
Optionee's termination of employment and shall not thereafter be
exercisable to any extent.
4. VESTING OF RIGHT TO EXERCISE OPTIONS. The shares
covered by this option shall vest in accordance with the following
schedule:
[(i) As to [25%] of the number of shares
covered by the option, at any time after one year from the Grant
Date;
(ii) As to an additional [25%] of the number of
shares covered by the option, at any time after two years from the
Grant Date;
(iii)As to an additional [25%] of the number of
shares covered by the option, at any time after three years from
the Grant Date; and
(iv) As to the remaining [25%] of the number of
shares covered by the option, at any time after four years from the
Grant Date.]
Any portion of the option that is not exercised
shall accumulate and may be exercised at any time during the Option
Period prior to the Terminal Date. No partial exercise of this
option may be for less than 5 percent of the total number of shares
then available under this option to purchase shares of Stock. In
no event shall the Company be required to issue fractional shares.
5. METHOD OF EXERCISE. Optionee may exercise the
option with respect to all or any part of the shares of Stock then
subject to such exercise as follows:
(a) By giving the Company written notice of such
exercise, specifying the number of such shares as to which this
option is exercised. Such notice shall be accompanied by an amount
equal to the option price of such shares, in the form of any one or
combination of the following: cash; a certified check, bank draft,
postal or express money order payable to the order of the Company
in lawful money of the United States; or if permitted by the Board,
shares of Stock valued at fair market value in accordance with
procedures established by the Board, or a full-recourse, interest-
bearing note, containing such terms as the Board determines are
appropriate. In the event Optionee tenders shares of Stock to pay
the Option Price, tender of Stock acquired through exercise of any
incentive stock option may result in unfavorable income tax
3
<PAGE>
consequences unless such Stock is held for at least one year before
such tender.
(b) If required by the Company, Optionee shall give
the Company satisfactory assurance in writing, signed by Optionee
or his legal representative, as the case may be, that such shares
are being purchased for investment and not with a view to the
distribution thereof, provided that such assurance shall be deemed
inapplicable to (1) any sale of such shares by such Optionee made
in accordance with the terms of a registration statement covering
such sale, which has heretofore been (or may hereafter be) filed
and become effective under the Securities Act of 1933, as amended,
and with respect to which no stop order suspending the
effectiveness thereof has been issued, and (2) any other sale of
such shares with respect to which in the opinion of counsel for the
Company, such assurance is not required to be given in order to
comply with the provisions of the Securities Act of 1933, as
amended.
As soon as practicable after receipt of the notice
required in paragraph 5(a) and satisfaction of the conditions set
forth in paragraph 5(b), the Company shall, without transfer or
issue tax and without other incidental expense to Optionee, deliver
to Optionee at the office of the Company, at 9401 Jeronimo, Irvine,
California 92718, or such other place as may be mutually acceptable
to the Company and Optionee, a certificate or certificates of such
shares of Stock; provided, however, that the time of such delivery
may be postponed by the Company for such period as may be required
for it with reasonable diligence to comply with applicable
registration requirements under the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, any
applicable listing requirements of any national securities
exchange, and requirements under any other law or regulation
applicable to the issuance or transfer of such shares. If Optionee
fails to accept delivery of and pay for all or any part of the
number of shares specified in such notice upon tender or delivery
thereof, his right to purchase such undelivered shares may be
terminated by the Company at its election.
6. CORPORATE TRANSACTIONS. If there should be any
change in the Stock subject to this option, through merger,
consolidation, reorganization, reincorporation, or other similar
change in the corporate structure of the Company, the Company may
make appropriate adjustments in order to preserve, but not to
increase, the benefits to Optionee, including adjustments in the
number of shares subject to this option and in the price per share.
If there shall be any change in the Stock subject to the option
4
<PAGE>
herein granted, through recapitalization, stock split, stock
dividend (in excess of two percent) or other similar change in the
corporate structure of the Company, adjustments shall automatically
occur to preserve but not increase the benefits to the Optionee,
including adjustments in the number of shares subject to this
option and in the price per share. Any adjustment made pursuant to
this paragraph 6 as a consequence of a change in the corporate
structure of the Company shall not entitle Optionee to acquire a
number of shares of Stock of the Company or shares of stock of any
successor company greater than the number of shares Optionee would
receive if, prior to such change, Optionee had actually held a
number of shares of Stock equal to the number of shares subject to
this option.
7. STOCK APPRECIATION RIGHTS. Optionee shall have the
right to surrender all or any part of this option and receive a
payment with respect to each share of Stock as to which this option
is surrendered equal to the difference between the per-share
exercise price of this option and the per-share fair market value
of the Stock on the date of such surrender, such payment to be in
shares of Stock valued at fair market value on the date of
surrender or in cash, or partly in such shares and partly in cash,
as specified by Optionee in this request; provided, however, that
the Committee shall have the sole discretion to consent to or
disapprove the election of Optionee to surrender all or a part of
this option for cash or a combination of Stock and cash. (Note:
This paragraph can be expanded to include cash-out rights under
paragraph 11(b) of the Plan.)]
8. LIMITATIONS ON TRANSFER. This option shall, during
Optionee's lifetime, be exercisable only by him, and neither this
option nor any right hereunder shall be transferable by Optionee by
operation of law or otherwise other than by will or the laws of
descent and distribution. In the event of any attempt by Optionee
to alienate, assign, pledge, hypothecate, or otherwise dispose of
this option or of any right hereunder, except as provided for in
this Agreement, or in the event of the levy of any attachment,
execution, or similar process upon the rights or interest hereby
conferred, the Company at its election may terminate this option by
notice to Optionee and this option shall thereupon become null and
void.
9. NO SHAREHOLDER RIGHTS. Neither Optionee nor any
person entitled to exercise Optionee's rights in the event of his
death shall have any of the rights of a shareholder with respect to
the shares of Stock subject to this option except to the extent the
certificates for such shares shall have been issued upon the
exercise of this option.
5
<PAGE>
10. NO EFFECT ON TERMS OF EMPLOYMENT. Notwithstanding
any prior express or implied agreement to the contrary, the Company
shall have the right to terminate or change the terms of employment
of Optionee at any time and for any reason, with or without cause.
<F1>
11. NOTICE. Any notice required to be given under the
terms of this Agreement shall be addressed to the Company in care
of its Corporate Secretary at the office of the Company at 9401
Jeronimo, Irvine, California 92718, and any notice to be given to
Optionee shall be addressed to him at the address given by him
beneath his signature to this Agreement, or such other address as
either party to this Agreement may hereafter designate in writing
to the other. Any such notice shall be deemed to have been duly
given when enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, registered or certified and deposited
(postage or registration or certification fee prepaid) in a post
office or branch post office regularly maintained by the United
States.
12. COMMITTEE DECISIONS CONCLUSIVE. All decisions of
the Committee upon any question arising under the Plan or under
this Agreement shall be conclusive.
13. SUCCESSORS. This Agreement shall be binding upon
and inure to the benefit of any successor or successors of the
Company. Where the context permits, "Optionee" as used in this
Agreement shall include Optionee's executor, administrator or other
legal representative or the person or persons to whom Optionee's
rights pass by will or the applicable laws of descent and
distribution.
14. EARLY DISPOSITIONS. Optionee agrees, as partial
consideration for the designation of this option as an incentive
stock option under Section 422A of the Code, to notify the Company
in writing within thirty (30) days of any disposition of any shares
acquired by exercise of this option if such disposition occurs
within two (2) years from the Grant Date or within one (1) year
from the date Optionee purchased such shares by exercise of this
option.
15. WITHHOLDING. Optionee agrees to make appropriate
arrangements with the Company for satisfaction of any applicable
federal, state or local income tax withholding requirements or
social security requirements.
<F1> This clause must be modified in cases where an existing
written employment agreement sets a higher standard for
termination.
6
<PAGE>
16. GOVERNING LAW. The interpretation, performance, and
enforcement of this Agreement shall be governed by the laws of the
State of California.
IN WITNESS WHEREOF, the Company has caused these presents
to be executed on its behalf by its President, and Optionee has
hereunto set his hand as of the day and year first above written.
ADVANCED LOGIC RESEARCH, INC.
By ________________________________
___________________________________
Optionee
Address: __________________________
___________________________________
___________________________________
7
EXHIBIT 99.3
Form of Non-Qualified Stock Option Agreement
<PAGE>
ADVANCED LOGIC RESEARCH, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
This Agreement is made as of December 15, 1993 (the "Grant
Date") between ADVANCED LOGIC RESEARCH, INC., a Delaware
corporation (the "Company"), and [FIRSTNAME] [LASTNAME]
("Optionee").
WITNESSETH:
WHEREAS, the Company has adopted the Advanced Logic Research,
Inc. Flexible Stock Incentive Plan (the "Plan"), which Plan is
incorporated in this Agreement by reference and made a part of it;
WHEREAS, the Company recognizes the past efforts by Optionee
on behalf of the Company and its affiliates and desires to motivate
Optionee in Optionee's work for the Company and its affiliates; and
WHEREAS, the Company has determined that it would be to the
advantage and in the interest of the Company and its shareholders
to grant the options provided for in the Agreement to Optionee as a
reward and an incentive for increased efforts on behalf of the
Company and its affiliates;
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth, the parties to this Agreement hereby agree
as follows:
1. OPTION GRANT. The Company hereby grants to Optionee the
right and option to purchase from the Company on the terms and
conditions hereinafter set forth, all or any part of an aggregate
of [# of Shs] shares of the Common Stock of the Company (the
"Stock"). The purchase price of the Stock subject to this option
shall be $_____ per share.
2. OPTION PERIOD. This option shall be exercisable only
during the Option Period, and during such Option Period, the
exercisability of the option shall be subject to the limitations of
Paragraph 3 and the vesting provisions of Paragraph 4. The Option
Period shall commence on the Grant Date and except as provided in
Paragraph 3, shall end on the Terminal Date which shall be ten
years and one month from the Grant Date.
Page 1 of 6
<PAGE>
3. LIMITS ON OPTION PERIOD. The Option Period may end
before the Terminal Date, as follows:
(a) If Optionee ceases to be a bona fide employee of the
Company or an affiliate for any reason other than cause, disability
(within the meaning of subparagraph (c)) or death during the Option
Period, the Option Period shall terminate three months after the
date of such cessation of employment or on the Terminal Date,
whichever shall first occur, and the option shall be exercisable
only to the extent exercisable under Paragraph 4 on the date of
Optionee's cessation of employment.
(b) If Optionee should die while in the employ of the
Company or its affiliates, the Option Period shall end one year
after the date of death or on the Terminal Date, whichever shall
first occur, and Optionee's executor or administrator or the person
or persons to whom Optionee's rights under this option shall pass
by will or by the applicable laws of descent and distribution may
exercise the entire unexercised portion of this option (or any
lesser amount).
(c) If Optionee's employment is terminated by reason of
disability, as defined below, the Option Period shall end one year
after the date of Optionee's cessation of employment or on the
Terminal Date, whichever shall first occur, and the option shall be
exercisable only to the extent exercisable under Paragraph 4 on the
date of Optionee's cessation of employment. For purposes of this
subparagraph (c), an individual is permanently and totally disabled
if he is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment
which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than 12
months. An individual shall not be considered to be permanently
and totally disabled unless he furnishes proof of the existence
thereof in such form and manner, and at such times, as the
Committee of the Board of Directors that administers the Plan (the
"Committee") may require.
(d) If Optionee is on a leave of absence from the
Company or an affiliate because of his disability, or for the
purpose of serving the government of the country in which the
principal place of employment of Optionee is located, either in a
military or civilian capacity, or for such other purpose or reason
as may be approved by the Committee, Optionee shall not be deemed
during the period of such absence, by virtue of such absence alone,
to have terminated employment with the Company or an affiliate
except as the Committee may otherwise expressly provide.
(e) If Optionee's employment with the Company or an
affiliate terminates for cause during the Option Period, the Option
Period shall terminate on the date of such Optionee's termination
of employment and shall not thereafter be exercisable to any
extent.
Page 2 of 6
<PAGE>
4. VESTING OF RIGHT TO EXERCISE OPTIONS. The shares covered
by this option shall vest in accordance with the following
schedule:
(a) As to 33.33% of the number of shares covered by the
option, at any time after one year from the Grant Date;
(b) As to the remaining 66.67% of the number of shares
covered by the option, 2.78% of the number of shares covered by the
option shall vest each month beginning 13 months from the Grant
Date. All the shares covered by the option shall have vested 36
months from the Grant Date.
Any portion of the option not exercised shall accumulate
and be exercisable at any time during the Option Period prior to
the Terminal Date. No partial exercise of this option may be for
less than five percent of the total number of shares then available
under this option to purchase shares of Stock. In no event shall
the Company be required to issue fractional shares.
5. METHOD OF EXERCISE. Optionee may exercise the option
with respect to all or any part of the shares of Stock then subject
to such exercise as follows:
(a) By giving the Company written notice of such
exercise, specifying the number of such shares as to which this
option is exercised. Such notice shall be accompanied by an amount
equal to the option price of such shares, in the form of any one or
combination of the following: cash; a certified check, bank draft,
postal or express money order payable to the order of the Company
in lawful money of the United States; or, if permitted by the
Board, shares of Stock valued at fair market value in accordance
with procedures established by the Board (including Stock withheld
upon the exercise of an option to pay the purchase price of the
shares of Stock as to which the option is exercised), or a full-
recourse, interest-bearing note including such terms as the Board
determines appropriate. If accepted by the Committee in its
discretion, such consideration also may be paid through a broker-
dealer sale and remittance procedure pursuant to which Optionee
(i) shall provide irrevocable written instructions to a designated
brokerage firm to effect the immediate sales of the purchased
shares and remit to the Company, out of the sale proceeds available
on the settlement date, sufficient funds to cover the aggregate
option price payable for the purchased shares plus all applicable
Federal and State income and employment taxes required to be
withheld by the Company in connection with such purchase and (ii)
shall provide written directives to the Company to deliver the
certificates for the purchased shares directly to such brokerage
firm in order to complete the sale transaction.
Page 3 of 6
<PAGE>
(b) If required by the Company, Optionee shall give the
Company satisfactory assurance in writing, signed by Optionee or
his legal representative, as the case may be, that such shares are
being purchased for investment and not with a view to the
distribution thereof, provided that such assurance shall be deemed
inapplicable to (i) any sale of such shares by such Optionee made
in accordance with the terms of a registration statement covering
such sale, which has heretofore been (or may hereafter be) filed
and become effective under the Securities Act of 1933, as amended
("the Securities Act"), and with respect to which no stop order
suspending the effectiveness thereof has been issued, and (ii) any
other sale of such shares with respect to which, in the opinion of
counsel for the Company, such assurance is not required to be given
in order to comply with the provisions of the Securities Act.
As soon as practicable after receipt of the notice required in
Paragraph 5(a) and satisfaction of the conditions set forth in
Paragraph 5(b), the Company shall, without transfer or issue tax
and without other incidental expense to Optionee, deliver to
Optionee at the office of the Company, at 9401 Jeronimo Road,
Irvine, California 92718, attention of the Corporate Secretary, or
such other place as may be mutually acceptable to the Company and
Optionee, a certificate or certificates of such shares of Stock;
provided, however, that the time of such delivery may be postponed
by the Company for such period as may be required for it with
reasonable diligence to comply with applicable registration
requirements under the Securities Act, the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), any applicable listing
requirements of any national securities exchange, and requirements
under any other law or regulation applicable to the issuance or
transfer of such shares. If Optionee fails to accept delivery of
and pay for all or any part of the number of Shares specified in
such notice upon tender or delivery thereof, his right to purchase
such undelivered shares may be terminated by the Company at its
election.
6. CORPORATE TRANSACTIONS. If there should be any change in
the Stock subject to this option, through merger, consolidation,
reorganization, reincorporation, or other similar change in the
corporate structure of the Company, the Company may make
appropriate adjustments in order to preserve, but not to increase,
the benefits to Optionee, including adjustments in the number of
shares subject to this option and in the price per share. If there
shall be any change in the Stock subject to the option herein
granted, through recapitalization, stock split, stock dividend (in
excess of two percent) or other similar change in the corporate
structure of the Company, adjustments shall automatically occur to
preserve but not increase the benefits to the Optionee, including
adjustments in the number of shares subject to this option and in
the price per share. Any adjustment made pursuant to this
Paragraph 6 as a consequence of a change in the corporate structure
of the Company shall not entitle Optionee to acquire a number of
shares of Stock of the Company or shares of stock of any successor
company greater than the number of shares Optionee would receive
if, prior to such change, Optionee had actually held a number of
shares of Stock equal to the number of shares then subject to this
option.
Page 4 of 6
<PAGE>
7. STOCK APPRECIATION RIGHTS. Optionee shall have the right
to surrender all or any part of this option and receive a payment
with respect to each share of Stock as to which this option is
surrendered equal to the difference between the per-share exercise
price of this option and the per-share fair market value of the
Stock on the date of such surrender, such payment to be in shares
of Stock valued at fair market value on the date of surrender or in
cash, or partly in such shares and partly in cash, as specified by
Optionee in this request; provided, however, that the Committee
shall have the sole discretion to consent to or disapprove the
election of Optionee to surrender all or a part of this option for
cash or a combination of Stock and cash.
8. LIMITATIONS ON TRANSFER. This option shall, during
Optionee's lifetime, be exercisable only by him, and neither this
option nor any right hereunder shall be transferable by Optionee by
operation of law or otherwise other than by will, the laws of
descent and distribution, or pursuant to a qualified domestic
relations order as defined by the Internal Revenue Code of 1986, as
amended (the "Internal Revenue Code"), or Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or
the rules thereunder, or otherwise as permitted by Rule 16b-3
("Rule 16b-3") of the Exchange Act. In the event of any attempt by
Optionee to alienate, assign, pledge, hypothecate, or otherwise
dispose of this option or of any right hereunder, except as
provided for in this Agreement, or in the event of the levy of any
attachment, execution, or similar process upon the rights or
interest hereby conferred, the Company at its election may
terminate this option by notice to Optionee and this option shall
thereupon become null and void.
9. NO SHAREHOLDER RIGHTS. Neither Optionee nor any person
entitled to exercise Optionee's rights in the event of his death
shall have any of the rights of a shareholder with respect to the
shares of Stock subject to this option except to the extent the
certificates for such shares shall have been issued upon the
exercise of this option.
10. NO EFFECT ON TERMS OF EMPLOYMENT. Notwithstanding any
prior express or implied agreement to the contrary, except for a
written employment agreement, the Company shall have the right to
terminate or change the terms of employment of Optionee at any time
and for any reason, with or without cause.
11. NOTICE. Any notice required to be given under the terms
of this Agreement shall be addressed to the Company in care of its
Corporate Secretary at the office of the Company at 9401 Jeronimo
Road, Irvine, California 92718, and any notice to be given to
Optionee shall be addressed to him at the address given by him
beneath his signature to this Agreement, or such other address as
either party to this Agreement may hereafter designate in writing
to the other. Any such notice shall be deemed to have been duly
given when enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, registered or certified and deposited
(postage or registration or certification fee prepaid) in a post
office or branch post office regularly maintained by the United
States.
Page 5 of 6
<PAGE>
12. COMMITTEE DECISIONS CONCLUSIVE. All decisions of
the Committee which administers the Plan upon any question arising
under the Plan or under this Agreement shall be conclusive.
13. SUCCESSORS. This Agreement shall be binding upon
and inure to the benefit of any successor or successors of the
Company. Where the context permits, "Optionee" as used in this
Agreement shall include Optionee's executor, administrator or other
legal representative or the person or persons to whom Optionee's
rights pass by will, the applicable laws of descent and
distribution, or pursuant to a qualified domestic relations order
as defined by the Internal Revenue Code, or Title I of ERISA, or
the rules thereunder, or otherwise as permitted by Rule 16b-3.
14. WITHHOLDING. Optionee will make appropriate
arrangements with the Company and his employer for satisfaction of
any applicable federal, state or local income tax withholding
requirements or social security requirements.
15. GOVERNING LAW. The interpretation, performance, and
enforcement of this Agreement shall be governed by the laws of the
State of California.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
ADVANCED LOGIC RESEARCH, INC.
_______________________________________
Ronald J. Sipkovich,
Chief Financial Officer
_______________________________________
[FirstName] [LastName], Optionee
S.S #: [SS]
Address: [Address1]
[Address2]
[Address3]
[City], [State] [Zip]
Page 6 of 6
<PAGE>
EXHIBIT "C"
THE PLAN AGREEMENTS
EXHIBIT "C"
EXHIBIT 99.4
Form of Non-Qualified Stock Option Agreement
<PAGE>
ADVANCED LOGIC RESEARCH, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
This Agreement is made as of _____________ 199__ (the "Grant
Date"), between ADVANCED LOGIC RESEARCH, INC., a _______________
corporation (the "Company"), and _____________________________
("Optionee").
WITNESSETH:
WHEREAS, the Company has adopted the Advanced Logic
Research, Inc. Flexible Stock Incentive Plan (the "Plan"), which
Plan is incorporated in this Agreement by reference and made a part
of it; and
WHEREAS, the Company [recognizes the past efforts by
Optionee on behalf of the Company and its affiliates and] desires
to motivate Optionee in Optionee's work for the Company and its
affiliates; and
WHEREAS, the Company has determined that it would be to
the advantage and in the interest of the Company and its
shareholders to grant the options provided for in the Agreement to
Optionee as a reward and an incentive for increased efforts on
behalf of the Company and its affiliates;
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth, the parties to this Agreement hereby agree
as follows:
1. OPTION GRANT. The Company hereby grants to Optionee
the right and option to purchase from the Company on the terms and
conditions hereinafter set forth, all or any part of an aggregate
of _______________ (_______) shares of the Common Stock of the
Company (the "Stock"). The purchase price of the Stock subject to
this option shall be $____ per share.
2. OPTION PERIOD. This option shall be exercisable
only during the Option Period, and during such Option Period, the
exercisability of the option shall be subject to the limitations of
paragraph 3 and the vesting provisions of paragraph 4. The Option
Period shall commence on the Grant Date and except as provided in
paragraph 3, shall end on the Terminal Date which shall be ten
years and one month from the Grant Date.
<PAGE>
3. LIMITS ON OPTION PERIOD. The Option Period may end
before the Terminal Date, as follows:
(a) If Optionee ceases to be a bona fide employee
of the Company or an affiliate for any reason other than cause,
disability (within the meaning of subparagraph (c)) or death during
the Option Period, the Option Period shall terminate [three months]
after the date of such cessation of employment or on the Terminal
Date, whichever shall first occur, and the option shall be
exercisable only to the extent exercisable under paragraph 4 on the
date of Optionee's cessation of employment.
(b) If Optionee should die while in the employ of
the Company or its affiliates, the Option Period shall end [one
year] after the date of death or on the Terminal Date, whichever
shall first occur, and Optionee's executor or administrator or the
person or persons to whom Optionee's rights under this option shall
pass by will or by the applicable laws of descent and distribution
may exercise the entire unexercised portion of this option (or any
lesser amount).
(c) If Optionee's employment is terminated by
reason of disability (within the meaning of Section 105(d)(4) of
the Code), the Option Period shall end [one year] after the date of
Optionee's cessation of employment or on the Terminal Date,
whichever shall first occur, and the option shall be exercisable
only to the extent exercisable under paragraph 4 on the date of
Optionee's cessation of employment.
(d) If Optionee is on a leave of absence from the
Company or an affiliate because of his disability, or for the
purpose of serving the government of the country in which the
principal place of employment of Optionee is located, either in a
military or civilian capacity, or for such other purpose or reason
as may be approved by the Committee of the Board of Directors which
administers the Plan (the "Committee"), Optionee shall not be
deemed during the period of such absence, by virtue of such absence
alone, to have terminated employment with the Company or an
affiliate except as the Committee may otherwise expressly provide.
(e) If Optionee's employment with the Company or an
affiliate terminates for cause during the Option Period, the Option
Period shall terminate on the date of such Optionee's termination
of employment and shall not thereafter be exercisable to any
extent.
2
<PAGE>
4. VESTING OF RIGHT TO EXERCISE OPTIONS. The shares
covered by this option shall vest in accordance with the following
schedule:
(a) As to [25%] of the number of shares covered by
the option, at any time after one year from the Grant Date;
(b) As to an additional [25%] of the number of
shares covered by the option, at any time after two years from the
Grant Date;
(c) As to an additional [25%] of the number of
shares covered by the option, at any time after three years from
the Grant Date; and
(d) As to the remaining [25%] of the number of
shares covered by the option, at any time after four years from the
Grant Date.
Any portion of the option not exercised shall accumulate and
be exercisable at any time during the Option Period prior to the
Terminal Date. No partial exercise of this option may be for less
than five percent of the total number of shares then available
under this option to purchase shares of Stock. In no event shall
the Company be required to issue fractional shares.
5. METHOD OF EXERCISE. Optionee may exercise the
option with respect to all or any part of the shares of Stock then
subject to such exercise as follows:
(a) By giving the Company written notice of such
exercise, specifying the number of such shares as to which this
option is exercised. Such notice shall be accompanied by an amount
equal to the option price of such shares, in the form of any one or
combination of the following: cash; a certified check, bank draft,
postal or express money order payable to the order of the Company
in lawful money of the United States; or, if permitted by the
Board, shares of Stock valued at fair market value in accordance
with procedures established by the Board, or a full-recourse,
interest-bearing note including such terms as the Board determines
appropriate.
(b) If required by the Company, Optionee shall give
the Company satisfactory assurance in writing, signed by Optionee
or his legal representative, as the case may be, that such shares
are being purchased for investment and not with a view to the
distribution thereof, provided that such assurance shall be deemed
inapplicable to (1) any
3
<PAGE>
sale of such shares by such Optionee made in accordance with the
terms of a registration statement covering such sale, which has
heretofore been (or may hereafter be) filed and become effective
under the Securities Act of 1933, as amended, and with respect to
which no stop order suspending the effectiveness thereof has been
issued, and (2) any other sale of such shares with respect to which
in the opinion of counsel for the Company, such assurance is not
required to be given in order to comply with the provisions of the
Securities Act of 1933, as amended.
As soon as practicable after receipt of the notice
required in paragraph 5(a) and satisfaction of the conditions set
forth in paragraph 5(b), the Company shall, without transfer or
issue tax and without other incidental expense to Optionee, deliver
to Optionee at the office of the Company, at 9401 Jeronimo, Irvine,
California 92718, attention of the Corporate Secretary, or such
other place as may be mutually acceptable to the Company and
Optionee, a certificate or certificates of such shares of Stock;
provided, however, that the time of such delivery may be postponed
by the Company for such period as may be required for it with
reasonable diligence to comply with applicable registration
requirements under the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, any applicable listing
requirements of any national securities exchange, and requirements
under any other law or regulation applicable to the issuance or
transfer of such shares. If Optionee fails to accept delivery of
and pay for all or any part of the number of shares specified in
such notice upon tender or delivery thereof, his right to purchase
such undelivered shares may be terminated by the Company at its
election.
6. CORPORATE TRANSACTIONS. If there should be any
change in the Stock subject to this option, through merger,
consolidation, reorganization, reincorporation, or other similar
change in the corporate structure of the Company, the Company may
make appropriate adjustments in order to preserve, but not to
increase, the benefits to Optionee, including adjustments in the
number of shares subject to this option and in the price per share.
If there shall be any change in the Stock subject to the option
herein granted, through recapitalization, stock split, stock
dividend (in excess of two percent) or other similar change in the
corporate structure of the Company, adjustments shall automatically
occur to preserve but not increase the benefits to the Optionee,
including adjustments in the number of shares subject to this
option and in the price per share. Any adjustment made pursuant to
this paragraph 6 as a consequence of a change in the corporate
structure of the
4
<PAGE>
Company shall not entitle Optionee to acquire a number of shares of
Stock of the Company or shares of stock of any successor company
greater than the number of shares Optionee would receive if, prior
to such change, Optionee had actually held a number of shares of
Stock equal to the number of shares subject to this option.
[7. STOCK APPRECIATION RIGHTS. Optionee shall have the
right to surrender all or any part of this option and receive a
payment with respect to each share of Stock as to which this option
is surrendered equal to the difference between the per-share
exercise price of this option and the per-share fair market value
of the Stock on the date of such surrender, such payment to be in
shares of Stock valued at fair market value on the date of
surrender or in cash, or partly in such shares and partly in cash,
as specified by Optionee in this request; provided, however, that
the Committee shall have the sole discretion to consent to or
disapprove the election of Optionee to surrender all or a part of
this option for cash or a combination of Stock and cash. (Note:
This paragraph can be expanded to include cash-out rights under
paragraph 11(b) of the Plan.)]
8. LIMITATIONS ON TRANSFER. This option shall, during
Optionee's lifetime, be exercisable only by him, and neither this
option nor any right hereunder shall be transferable by Optionee by
operation of law or otherwise other than by will or the laws of
descent and distribution. In the event of any attempt by Optionee
to alienate, assign, pledge, hypothecate, or otherwise dispose of
this option or of any right hereunder, except as provided for in
this Agreement, or in the event of the levy of any attachment,
execution, or similar process upon the rights or interest hereby
conferred, the Company at its election may terminate this option by
notice to Optionee and this option shall thereupon become null and
void.
9. NO SHAREHOLDER RIGHTS. Neither Optionee nor any
person entitled to exercise Optionee's rights in the event of his
death shall have any of the rights of a shareholder with respect to
the shares of Stock subject to this option except to the extent the
certificates for such shares shall have been issued upon the
exercise of this option.
10. NO EFFECT ON TERMS OF EMPLOYMENT. Notwithstanding
any prior express or implied agreement to the contrary, except for
a written employment agreement, the Company shall have the right to
terminate or change the
5
<PAGE>
terms of employment of Optionee at any time and for any reason,
with or without cause.<F1>
11. NOTICE. Any notice required to be given under the
terms of this Agreement shall be addressed to the Company in care
of its Corporate Secretary at the office of the Company at 9401
Jeronimo, Irvine, California 92718, and any notice to be given to
Optionee shall be addressed to him at the address given by him
beneath his signature to this Agreement, or such other address as
either party to this Agreement may hereafter designate in writing
to the other. Any such notice shall be deemed to have been duly
given when enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, registered or certified and deposited
(postage or registration or certification fee prepaid) in a post
office or branch post office regularly maintained by the United
States.
12. COMMITTEE DECISIONS CONCLUSIVE. All decisions of
the Committee which administers the Plan upon any question arising
under the Plan or under this Agreement shall be conclusive.
13. SUCCESSORS. This Agreement shall be binding upon
and inure to the benefit of any successor or successors of the
Company. Where the context permits, "Optionee" as used in this
Agreement shall include Optionee's executor, administrator or other
legal representative or the person or persons to whom Optionee's
rights pass by will or the applicable laws of descent and
distribution.
14. WITHHOLDING. Optionee agrees to make appropriate
arrangements with the Company and his employer for satisfaction of
any applicable federal, state or local income tax withholding
requirements or social security requirements.
15. GOVERNING LAW. The interpretation, performance, and
enforcement of this Agreement shall be governed by the laws of the
State of California.
<F1> This clause must be modified in cases where an existing
written employment agreement sets a higher standard for
termination.
6
<PAGE>
IN WITNESS WHEREOF, the Company has caused these presents to be
executed on its behalf by its President, and Optionee has
hereunto set his hand as of the day and year first above written.
ADVANCED LOGIC RESEARCH, INC.
By___________________________
_____________________________
___________________, Optionee
Address:_____________________
_____________________________
_____________________________
7
EXHIBIT 99.5
Form of Restricted Stock Purchase Agreement
<PAGE>
ADVANCED LOGIC RESEARCH, INC.
RESTRICTED STOCK PURCHASE AGREEMENT
THIS AGREEMENT, entered into as of the ____ day of
______________ 199__, between ADVANCED LOGIC RESEARCH, INC., a
____________________ corporation (hereinafter called "Company"),
___________________________ (hereinafter called "Recipient"), and
_______________________ (hereinafter called "Escrow Holder").
W I T N E S S E T H:
WHEREAS, Company has adopted the Advanced Logic Research,
Inc. Flexible Stock Incentive Plan (the "Plan"), which Plan is
incorporated in this Agreement by reference and made a part of it;
and
WHEREAS, the Company [recognizes the past efforts by
Recipient on behalf of the Company and its affiliates and] desires
to motivate Recipient in Recipient's work for the Company and its
affiliates; and
WHEREAS, the Company has determined that it would be to
the advantage and interest of the Company and its shareholders to
issue the restricted stock provided for in this Agreement to the
Recipient as [a reward and] an incentive for increased efforts and
successful achievements;
NOW, THEREFORE, in consideration of the foregoing
premises, and the mutual covenants herein contained, the parties
hereto agree with each other as follows:
1. RESTRICTED STOCK PURCHASE. Contemporaneously with
the execution of this Agreement, Company will issue to Recipient
__________ shares of its Common Stock (hereinafter called the
"Stock") for a consideration of $_____ per share ("Purchase
Price"). Payment for the Stock shall be made by delivery to the
Company upon execution of this Agreement of [cash in the amount of
the Purchase Price] [Recipient's full-recourse promissory note in
the form attached as Exhibit A hereto ("Promissory Note")], or
[shares of Stock owned by Recipient having a fair market value on
the date the Stock subject to this Agreement is purchased] in
accordance with procedures established by the committee Board of
Directors of the Company administering the Plan (the "Committee").
Stock certificates evidencing the Stock will be delivered to Escrow
Holder, accompanied by blank stock powers executed by Recipient, to
be held by the Escrow Holder for the periods set forth in paragraph
3 below, for the use and benefit of, and subject to the rights of
and
<PAGE>
limitations upon Recipient as the owner thereof as herein set
forth. All shares of Stock issued hereunder shall be deemed issued
to Recipient as fully paid and nonassessable shares, and Recipient
shall have all rights of a shareholder with respect thereto,
including the right to vote, to receive dividends (including stock
dividends), to participate in stock splits or other
recapitalizations, and to exchange such shares in a merger,
consolidation or other reorganization. Company shall pay the costs
and charges of Escrow Holder and any applicable stock transfer
taxes. Recipient hereby acknowledges that Recipient is acquiring
the Stock issued hereunder for investment and not with a view to
the distribution thereof, and that Recipient does not intend to
subdivide Recipient's interest in the Stock with any other person.
2. RESTRICTIONS. During the period when any shares of
Stock issued hereunder are required to be held in escrow pursuant
to paragraph 3 below, such shares of the Stock held in escrow shall
be deemed to be "Restricted Securities" and shall not be sold,
transferred by gift, pledged, hypothecated or otherwise transferred
or disposed of by Recipient until the restrictions on such
Restricted Securities shall lapse as provided in paragraph 3
hereof. Should Recipient terminate his or her employment with the
Company without the approval of Company, or should Recipient be
discharged for cause prior to the lapse of restrictions on any
Restricted Securities held by Escrow Holder for such Recipient's
benefit, the Company, for one hundred eighty (180) days after
Recipient's termination of employment, shall have the right to
repurchase such Restricted Securities by delivery to the Escrow
Holder for Recipient's benefit of cash, check or a promissory note
in the amount of the Purchase Price originally paid Recipient for
the Restricted Securities to be repurchased by the Company. [In
the event Recipient's Promissory Note is still outstanding, the
Company may, at its option, pay for such Restricted Securities by
cancelling outstanding principal and accrued interest on the
Promissory Note in an amount equal to the Purchase Price (adjusted
to take into account any Additional Securities issued with respect
to the Stock as contemplated by Section 5 hereof) times the number
of Restricted Securities to be repurchased by the Company.]
3. TERMINATION OF RESTRICTIONS. The restrictions
imposed on the Restricted Securities pursuant to paragraph 2 above
shall lapse as to ________ % of the Stock issued to Recipient
hereunder on ___________________ , 19__, and as to an additional
_________% of the Stock issued to Recipient hereunder on each
[MONTH AND DAY] thereafter so long as Recipient remains an
employee of the Company or an affiliate of the Company; provided,
however, that if, prior to such date:
2
<PAGE>
(a) Recipient dies,
(b) Recipient terminates employment with the approval of
Company, or
(c) Recipient retires,
then the restrictions on all such Stock shall immediately lapse.
After restrictions on such Stock shall lapse, Escrow Holder shall,
without further order or instruction, transmit to Recipient (or, in
the case of Recipient's death, to Recipient's successor(s) in
interest) the certificate evidencing such Stock, subject, however,
to satisfaction of any withholding obligations described in
paragraph 6 below.
4. ACCELERATION OF TIME FOR LAPSING OF RESTRICTIONS. In
the event that any financial hardship may arise with respect to
Recipient, or any successor-in-interest of the Recipient, or in the
event of any change in existing tax or other applicable laws,
regulations or rulings which would have a substantial adverse
effect on Recipient's treatment of the additional compensation
provided for herein for tax purposes thereby resulting in financial
hardship to Recipient, Company may, in its sole discretion,
accelerate, in whole or in part, the time for lapsing of the
restrictions on disposition of Restricted Securities set forth in
paragraph 3 above.
5. ADDITIONAL SECURITIES. Any securities received as
the result of ownership of Restricted Securities (hereinafter
called "Additional Securities"), including, but not by way of
limitation, warrants and securities received as a stock dividend or
stock split, or as a result of a recapitalization or
reorganization, shall be held by Escrow Holder in escrow in the
same manner and subject to the same conditions as the Restricted
Securities with respect to which they were issued. Recipient shall
be entitled to direct Escrow Holder to exercise any warrant or
option received as Additional Securities upon supplying the funds
necessary to do so, in which event the securities so purchased
shall constitute Additional Securities, or Recipient may direct
Escrow Holder to sell any such warrant or option, in which event
the proceeds thereof shall be remitted to Recipient. In the event
any Restricted Securities or Additional Securities consist of a
security by its terms or otherwise convertible into or exchangeable
for another security at the election of the holder thereof,
Recipient may exercise any such right of conversion or exchange in
the event the failure to exercise or delay in exercising such right
would result in its loss or diminution in value, and
3
<PAGE>
any securities so acquired shall be deemed Additional Securities.
In the event of any change in certificates evidencing Restricted
Securities or Additional Securities by reason of any
recapitalization, reorganization or other transaction which results
in the creation of Additional Securities, Escrow Holder shall be
authorized to deliver to the issuer the certificates evidencing
Restricted Securities or Additional Securities in exchange for the
certificates which they replace, which shall be deemed to be
Additional Securities. Additional Securities shall be subject to
the conditions imposed by paragraphs 2 and 3 above in the same
manner as the conditions thereunder are or would be applicable to
the Restricted Securities with respect to which they were
delivered.
6. LAPSE OF RESTRICTIONS. Upon lapse of restrictions on
Restricted Securities and/or Additional Securities under paragraph
3 above, Recipient shall pay Company the amount necessary to
satisfy all applicable federal, state, and local income tax
withholding requirements and social security tax withholding
requirements. If Recipient does not pay such amount to Company,
Company shall be authorized on behalf of Recipient to sell any of
Recipient's Stock held in escrow in order to satisfy any such
withholding requirements in respect of Recipient.
7. DISTRIBUTIONS. Company shall transmit to Escrow
Holder for the account of Recipient all dividends, interest and
other distributions paid or made with respect to Restricted
Securities and Additional Securities. Escrow Holder shall, upon
receipt thereof, disburse forthwith to Recipient, less any
applicable federal or state withholding taxes, any dividends,
interest or other distributions paid or made in cash or property
(other than securities) on Restricted Securities or Additional
Securities, and shall hold as Additional Securities subject to the
provisions of this Agreement, any securities so received.
8. NO EFFECT ON TERMS OF ENGAGEMENT. Notwithstanding
any prior express or implied agreement to the contrary, the Company
shall have the right to terminate or change the terms of employment
of Recipient at any time and for any reason, with or without
cause.<F1>
<F1> This clause must be modified in case where an existing
written employment agreement sets a higher standard for
termination.
4
<PAGE>
9. SUCCESSORS. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, successors and
assigns.
10. NOTICE. Any notice or other paper required to be
given or sent pursuant to the terms of this Agreement shall be
sufficiently given or served hereunder to any party when
transmitted by registered or certified mail, postage prepaid,
addressed to the party to be served as follows:
Company: 9401 Jeronimo
Irvine, California 92718
Attn: Corporate Secretary
Recipient: At Recipient's address as it
appears under Recipient's
signature to this Agreement,
or to such other address as
Recipient may specify in
writing to Escrow Holder
Any party may designate another address for receipt of notices so
long as notice is given in accordance with this Section 10.
11. COMMITTEE DECISIONS CONCLUSIVE. All decisions of
the Committee arising under the Plan or under this Agreement shall
be conclusive.
12. GOVERNING LAW. The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the
State of California.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Restricted Stock Purchase Agreement as of the date first above
written.
ADVANCED LOGIC RESEARCH, INC.
By ________________________________
Its _______________________________
___________________________________
Recipient
___________________________________
Printed Name
___________________________________
Street Address
___________________________________
City State ZIP
[ESCROW HOLDER]
___________________________________
By ________________________________
Its _______________________________
6
EXHIBIT 99.6
Form of Restricted Stock Bonus Agreement
<PAGE>
ADVANCED LOGIC RESEARCH, INC.
RESTRICTED STOCK BONUS AGREEMENT
THIS AGREEMENT, entered into as of the ____ day of
______________ 199__, between ADVANCED LOGIC RESEARCH, INC., a
____________________ corporation (hereinafter called "Company"),
___________________________ (hereinafter called "Recipient"), and
_______________________ (hereinafter called "Escrow Holder").
W I T N E S S E T H:
WHEREAS, Company has adopted the Advanced Logic Research,
Inc. Flexible Stock Incentive Plan (the "Plan"), which Plan is
incorporated in this Agreement by reference and made a part of it;
and
WHEREAS, the Company [recognizes the past efforts by
Recipient on behalf of the Company and its affiliates and] desires
to motivate Recipient in Recipient's work for the Company and its
affiliates; and
WHEREAS, the Company has determined that it would be to
the advantage and interest of the Company and its shareholders to
issue the restricted stock provided for in this Agreement to the
Recipient as [a reward and] an incentive for increased efforts and
successful achievements;
NOW, THEREFORE, in consideration of the foregoing
premises, and the mutual covenants herein contained, the parties
hereto agree with each other as follows:
1. RESTRICTED STOCK PURCHASE. Contemporaneously with
the execution of this Agreement, Company will issue to Recipient
__________ shares of its Common Stock (hereinafter called the
"Stock") as a stock bonus. Stock certificates evidencing the Stock
will be delivered to Escrow Holder, accompanied by blank stock
powers executed by Recipient, to be held by the Escrow Holder for
the periods set forth in paragraph 3 below, for the use and benefit
of, and subject to the rights of and limitations upon Recipient as
the owner thereof as herein set forth. All shares of Stock issued
hereunder shall be deemed issued to Recipient as fully paid and
nonassessable shares, and Recipient shall have all rights of a
shareholder with respect thereto, including the right to vote, to
receive dividends (including stock dividends), to participate in
stock splits or other recapitalizations, and to exchange such
shares in a merger, consolidation or other reorganization. Company
shall pay
1
<PAGE>
the costs and charges of Escrow Holder and any applicable stock
transfer taxes. Recipient hereby acknowledges that Recipient is
acquiring the Stock issued hereunder for investment and not with a
view to the distribution thereof, and that Recipient does not
intend to subdivide Recipient's interest in the Stock with any
other person.
2. RESTRICTIONS. During the period when any shares of
Stock issued hereunder are required to be held in escrow pursuant
to paragraph 3 below, such shares of the Stock held in escrow shall
be deemed to be "Restricted Securities" and shall not be sold,
transferred by gift, pledged, hypothecated or otherwise transferred
or disposed of by Recipient until the restrictions on such
Restricted Securities shall lapse as provided in paragraph 3
hereof. Should Recipient terminate his or her employment with the
Company without the approval of Company, or should Recipient be
discharged for cause prior to the lapse of restrictions on any
Restricted Securities held by Escrow Holder for such Recipient's
benefit, such Restricted Securities shall be transferred and
delivered to the Company by the Escrow Holder without payment of
any consideration to the Recipient therefor.
3. TERMINATION OF RESTRICTIONS. The restrictions
imposed on the Restricted Securities pursuant to paragraph 2 above
shall lapse as to ________ % of the Stock issued to Recipient
hereunder on ___________________ , 19__, and as to an additional
_________% of the Stock issued to Recipient hereunder on each
[MONTH AND DAY] thereafter so long as Recipient remains an
employee of the Company or an affiliate of the Company; provided,
however, that if, prior to such date:
(a) Recipient dies,
(b) Recipient terminates employment with the approval of
Company, or
(c) Recipient retires,
then the restrictions on all such Stock shall immediately lapse.
After restrictions on such Stock shall lapse, Escrow Holder shall,
without further order or instruction, transmit to Recipient (or, in
the case of Recipient's death, to Recipient's successor(s) in
interest) the certificate evidencing such Stock, subject, however,
to satisfaction of any withholding obligations described in
paragraph 6 below.
4. ACCELERATION OF TIME FOR LAPSING OF RESTRICTIONS. In
the event that any financial hardship may arise
2
<PAGE>
with respect to Recipient, or any successor-in-interest of the
Recipient, or in the event of any change in existing tax or other
applicable laws, regulations or rulings which would have a
substantial adverse effect on Recipient's treatment of the
additional compensation provided for herein for tax purposes
thereby resulting in financial hardship to Recipient, Company may,
in its sole discretion, accelerate, in whole or in part, the time
for lapsing of the restrictions on disposition of Restricted
Securities set forth in paragraph 3 above.
5. ADDITIONAL SECURITIES. Any securities received as
the result of ownership of Restricted Securities (hereinafter
called "Additional Securities"), including, but not by way of
limitation, warrants and securities received as a stock dividend or
stock split, or as a result of a recapitalization or
reorganization, shall be held by Escrow Holder in escrow in the
same manner and subject to the same conditions as the Restricted
Securities with respect to which they were issued. Recipient shall
be entitled to direct Escrow Holder to exercise any warrant or
option received as Additional Securities upon supplying the funds
necessary to do so, in which event the securities so purchased
shall constitute Additional Securities, or Recipient may direct
Escrow Holder to sell any such warrant or option, in which event
the proceeds thereof shall be remitted to Recipient. In the event
any Restricted Securities or Additional Securities consist of a
security by its terms or otherwise convertible into or exchangeable
for another security at the election of the holder thereof,
Recipient may exercise any such right of conversion or exchange in
the event the failure to exercise or delay in exercising such right
would result in its loss or diminution in value, and any securities
so acquired shall be deemed Additional Securities. In the event of
any change in certificates evidencing Restricted Securities or
Additional Securities by reason of any recapitalization,
reorganization or other transaction which results in the creation
of Additional Securities, Escrow Holder shall be authorized to
deliver to the issuer the certificates evidencing Restricted
Securities or Additional Securities in exchange for the
certificates which they replace, which shall be deemed to be
Additional Securities. Additional Securities shall be subject to
the conditions imposed by paragraphs 2 and 3 above in the same
manner as the conditions thereunder are or would be applicable to
the Restricted Securities with respect to which they were
delivered.
6. LAPSE OF RESTRICTIONS. Upon lapse of restrictions on
Restricted Securities and/or Additional Securities under paragraph
3 above, Recipient shall pay
3
<PAGE>
Company the amount necessary to satisfy all applicable federal,
state, and local income tax withholding requirements and social
security tax withholding requirements. If Recipient does not pay
such amount to Company, Company shall be authorized on behalf of
Recipient to sell any of Recipient's Stock held in escrow in order
to satisfy any such withholding requirements in respect of
Recipient.
7. DISTRIBUTIONS. Company shall transmit to Escrow
Holder for the account of Recipient all dividends, interest and
other distributions paid or made with respect to Restricted
Securities and Additional Securities. Escrow Holder shall, upon
receipt thereof, disburse forthwith to Recipient, less any
applicable federal or state withholding taxes, any dividends,
interest or other distributions paid or made in cash or property
(other than securities) on Restricted Securities or Additional
Securities, and shall hold as Additional Securities subject to the
provisions of this Agreement, any securities so received.
8. NO EFFECT ON TERMS OF ENGAGEMENT. Notwithstanding
any prior express or implied agreement to the contrary, the Company
shall have the right to terminate or change the terms of employment
of Recipient at any time and for any reason, with or without
cause.<F1>
9. SUCCESSORS. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, successors and
assigns.
10. NOTICE. Any notice or other paper required to be
given or sent pursuant to the terms of this Agreement shall be
sufficiently given or served hereunder to any party when
transmitted by registered or certified mail, postage prepaid,
addressed to the party to be served as follows:
Company: Advanced Logic Research, Inc.
9401 Jeronimo
Irvine, California 92718
Attn: Corporate Secretary
<F1> This clause must be modified in cases where an existing
written employment agreement sets a higher standard for
termination.
4
<PAGE>
Recipient: At Recipient's address as it
appears under Recipient's
signature to this Agreement,
or to such other address as
Recipient may specify in
writing to Escrow Holder
Any party may designate another address for receipt of notices so
long as notice is given in accordance with this paragraph 10.
11. COMMITTEE DECISIONS CONCLUSIVE. All decisions of
the committee of the Board of Directors which administers the Plan
or under this Agreement shall be conclusive.
12. GOVERNING LAW. The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the
State of California.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Restricted Stock Purchase Agreement as of the date first above
written.
ADVANCED LOGIC RESEARCH, INC.
By ________________________________
Its _______________________________
___________________________________
Recipient
___________________________________
Printed Name
___________________________________
Street Address
___________________________________
City State ZIP
5
<PAGE>
[ESCROW HOLDER]
___________________________________
By ________________________________
Its _______________________________
6
