<PAGE> 1
As Filed With the Securities and Exchange Commission on October 30, 1998.
Registration No. 333-___________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON. D.C. 20549
----------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------
QLOGIC CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 33-0537669
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3545 HARBOR BOULEVARD, COSTA MESA, CALIFORNIA 92626
(Address of Principal Executive Offices) (Zip Code)
----------
EMPLOYEE STOCK PURCHASE PLAN
STOCK AWARDS PLAN
(Full titles of the plans)
----------
Thomas R. Anderson, Vice President and Chief Financial Officer
QLogic Corporation
3545 Harbor Boulevard
Costa Mesa, California 92626
(Name and address of agent for service)
(714) 438-2200
(Telephone number, including area code, of agent for service)
Copy to:
Nick E. Yocca, Esq.
Stradling Yocca Carlson & Rauth, a Professional Corporation
660 Newport Center Drive, Suite 1600, Newport Beach, California 92660
(949) 725-4000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================================
Proposed Maximum Proposed Maximum
Title of Securities Amount To Be Offering Price Aggregate Amount of
To Be Registered Registered(1) Per Share Offering Price Registration Fee
===============================================================================================
<S> <C> <C> <C> <C>
Common Stock,
$0.10 par value 675,000 shares $86.625(2) $58,471,875.00(2) $16,256.00
===============================================================================================
</TABLE>
(1) Includes additional shares of Common Stock that may become issuable
pursuant to the anti-dilution adjustment provisions of the Employee Stock
Purchase Plan (the "Purchase Plan") and the Stock Awards Plan (the "Awards
Plan").
(2) In accordance with Rule 457(h), the aggregate offering price of 300,000
shares of Common Stock registered hereby which the Registrant is authorized
to issue under the Purchase Plan and of the additional 375,000 shares which
the Registrant is authorized to issue under the Awards Plan is estimated
solely for purposes of calculating the registration fee on the basis of the
price of securities of the same class, as determined in accordance with
Rule 457(c), using the average of the high and low price reported by the
Nasdaq National Market for the Common Stock on October 26, 1998, which was
$86.625 per share.
PAGE 1 OF ___ PAGES EXHIBIT INDEX ON PAGE [__]
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
This registration statement relates to both the Stock Awards Plan, as
amended ("Awards Plan"), of the Registrant and the Employee Stock Purchase Plan
("ESPP") of the Registrant. An aggregate of 1,350,000 shares of the Registrant's
common stock issuable pursuant to the Awards Plan have previously been
registered on Form S-8, Registration No. 33-75814, filed February 28, 1994, and
Form S-8, Registration No. 333-13137, filed October 1, 1996, and the contents of
both such registration statements are incorporated by reference except as
revised herein. On August 1, 1997, the Registrant's Board of Directors amended
the Awards Plan to further increase the number of shares issuable thereunder by
375,000, from 1,350,000 shares to 1,725,000 shares, and on August 11, 1997,
amended the Awards Plan to establish 500,000 shares as the maximum number of
derivative securities and shares of common stock that may be granted to any one
participant in any calendar year. Both such amendments were adopted subject to
stockholder approval, which was obtained at the Registrant's Annual Meeting of
Stockholders held on September 23, 1997. Pursuant to General Instruction E of
Form S-8, this registration statement registers the additional 375,000 shares
issuable under the Awards Plan.
Item 3. Incorporation of Documents by Reference.
The following documents are incorporated herein by reference:
(a) The contents of the Registrant's Registration Statement on Form S-8
(Registration No. 33-75814) as filed with the Securities and Exchange Commission
(the "Commission") on February 28, 1994;
(b) The contents of the Registrant's Registration Statement on Form S-8
(Registration No. 333-13137) as filed with the Commission on October 1, 1996;
(c) The Registrant's Annual Report on Form 10-K for its fiscal year
ended March 29, 1998, filed with the Commission under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") on June 17, 1998;
(d) The Registrant's Quarterly Report on Form 10-Q for its fiscal
quarter ended June 28, 1998, filed with the Commission under the Exchange Act on
August 11, 1998;
(e) All other reports filed by the Registrant pursuant to Section 13(a)
or 15(d) of the Exchange Act since the end of the fiscal year covered by the
report referred to in (c) above;
(f) The description of the Registrant's Common Stock that is contained
in the Registrant's Registration Statement on Form 10 (Commission file number
0-23298) filed with the Commission under the Exchange Act on February 15, 1994;
(g) The description of the Rights to Purchase Series A Junior
Participating Preferred Stock (the "Rights") and of the Series A Junior
Participating Preferred Stock, par value $0.001 per share, that is contained in
the Registrant's Registration Statement on Form 8-A filed with the Commission
under Section 12 of the Exchange Act on June 19, 1996, including any amendment
or report filed for the purpose of updating that description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all of such securities then remaining unsold, shall be
deemed to be incorporated herein by reference and to be a part hereof from the
date of filing of such documents, except as to any portion of any future annual
or quarterly report to stockholders or document that is not deemed filed under
such provisions. For the purposes of this registration statement, any statement
in a document incorporated by reference shall be deemed to be modified or
superseded to the extent that a statement contained in this registration
statement modifies or supersedes a statement in such document. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this registration statement.
Item 6. Indemnification of Directors and Officers.
(a) Section 145 of the Delaware General Corporation Law makes provision
for the indemnification of officers and directors in terms sufficiently broad to
include indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "1933 Act"). Section 145 of the Delaware General Corporation law
permits indemnification by the corporation of its officers and directors against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by them in connection with actions
or proceedings against them if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reason to believe their conduct was unlawful. Section 145 provides that no
indemnification may be made, however, without court approval, in respect of any
claim as to which the officer or director is adjudged to be liable to the
corporation. Such indemnification provisions of Delaware law are expressly not
exclusive of any other rights which the officers or directors may have under the
corporation's by-laws or agreements, pursuant to the vote of stockholders or
disinterested directors or otherwise.
(b) The Restated Certificate of Incorporation of the Registrant provides
that the Registrant will, to the maximum extent permitted by law, indemnify each
of its officers and directors against expenses, judgments, fines, settlements
and other amounts actually and reasonably incurred in connection with any
proceeding arising by reason of the fact any such person is or was a director or
officer of the Registrant. The Company also carries directors and officers
liability insurance.
(c) The Company has entered into separate indemnification agreements
with its directors and officers. These agreements require the Company, among
other things, to indemnify them against liabilities that may arise by reason of
their status or service as directors or officers (other than liabilities arising
from actions not taken in good faith or in a manner the indemnitee believed to
be opposed to the best interests of the Company), and to advance their expenses
incurred as a result of any proceeding against them as to which they could be
indemnified. Insofar as indemnification for liabilities arising under the 1933
Act may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Commission, such indemnification is against public policy as
expressed in the 1933 Act and is therefore unenforceable.
2
<PAGE> 3
Item 8. Exhibits.
The following exhibits are filed as part of this Registration Statement:
Number Description
------ -----------
4.1 Stock Awards Plan, As Amended (the "Awards Plan").
4.2 Employee Stock Purchase Plan.
5.1 Opinion of Stradling Yocca Carlson & Rauth, a Professional
Corporation, Counsel to the Registrant.
23.1 Consent of Stradling Yocca Carlson & Rauth, a Professional
Corporation (included in the Opinion filed as Exhibit
5.1).
23.2 Consent of KPMG Peat Marwick LLP, independent auditors.
24.1 Power of Attorney (included on signature page to the
Registration Statement at page S-1).
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;
(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 the registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) shall
not apply if the information required to be included in a post-effective
amendment by these paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
3
<PAGE> 4
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities 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 Securities
Act and will be governed by the final adjudication of such issue.
4
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Costa Mesa, State of California, on the 30th day
of October, 1998.
QLOGIC CORPORATION
By: /s/ Thomas R. Anderson
----------------------------------
Thomas R. Anderson
Vice President and Chief
Financial Officer
POWER OF ATTORNEY
We, the undersigned directors and officers of QLogic Corporation, do
hereby constitute and appoint H.K. Desai and Thomas R. Anderson, or either of
them, our true and lawful attorneys and agents, to sign for us or any of us in
our names and in the capacities indicated below, any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto and other documents required in
connection therewith, and to do any and all acts and things in our names and in
the capacities indicated below, which said attorneys and agents, or either of
them, may deem necessary or advisable to enable said corporation to comply with
the Securities Act of 1933, as amended, and any rules, regulations, and
requirements of the Securities and Exchange Commission, in connection with this
Registration Statement; and we do hereby ratify and confirm all that the said
attorneys and agents, or either of them, shall do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ GARY LIEBL Chairman of the Board of Directors October 28, 1998
- --------------------------------------
GARY E. LIEBL
/s/ H.K. DESAI President and Chief Executive Officer October 28, 1998
- -------------------------------------- (Principal Executive Officer)
H.K. DESAI
/s/ THOMAS R. ANDERSON Vice President and Chief Financial October 28, 1998
- -------------------------------------- Officer (Principal Financial and
THOMAS R. ANDERSON Accounting Officer)
/s/ MICHAEL R. MANNING Secretary and Treasurer October 28, 1998
- --------------------------------------
MICHAEL R. MANNING
</TABLE>
5
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<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ JAMES A. BIXBY Director October 28, 1998
- --------------------------------------
JAMES A. BIXBY
/s/ CAROL L. MILTNER Director October 28, 1998
- --------------------------------------
Carol L. Miltner
/s/ GEORGE D. WELLS Director October 28, 1998
- --------------------------------------
GEORGE D. WELLS
</TABLE>
6
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequential
Number Description Page Number
------ ----------- -----------
<S> <C> <C>
4.1 Stock Awards Plan, As Amended
4.2 Employee Stock Purchase Plan
5.1 Opinion of Stradling Yocca Carlson & Rauth, a Professional
Corporation, Counsel to the Registrant.
23.1 Consent of Stradling Yocca Carlson & Rauth, a Professional
Corporation (included in the Opinion filed as Exhibit
5.1).
23.2 Consent of KPMG Peat Marwick LLP, independent auditors.
24.1 Power of Attorney (included on signature page to the
Registration Statement at page S-1).
</TABLE>
<PAGE> 1
Exhibit 4.1
QLOGIC CORPORATION
STOCK AWARDS PLAN
-----------------
(AS AMENDED - SEPTEMBER 23, 1997)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<C> <S> <C>
1. Purpose.............................................................................1
2. Definitions.........................................................................1
2.1 Award........................................................................1
2.2 Board........................................................................1
2.3 Code.........................................................................1
2.4 Company......................................................................1
2.5 Common Stock.................................................................1
2.6 Deferred Stock Award.........................................................1
2.7 Disabled or Disability.......................................................1
2.8 Fair Market Value............................................................1
2.9 Incentive Stock Option.......................................................2
2.10 Nonqualified Stock Option....................................................2
2.11 Optionee.....................................................................2
2.12 Other Stock-Based Award......................................................2
2.13 Performance Unit Award.......................................................2
2.14 Plan.........................................................................2
2.15 Plan Administrator...........................................................2
2.16 Restricted Stock Award.......................................................2
2.17 Stock Appreciation Right.....................................................2
2.18 Stock Option.................................................................2
2.19 Unrestricted Stock Award.....................................................2
3. Awards Under the Plan...............................................................2
4. Administration......................................................................2
4.1 Administration by Board......................................................2
4.2 Administration by Compensation Committee.....................................3
5. Eligibility.........................................................................3
6. Shares Subject to the Plan..........................................................3
6.1 Available Shares.............................................................3
6.2 Limitation on Number of Shares Subject to Awards.............................4
6.3 Capital Structure Adjustments................................................4
</TABLE>
i
<PAGE> 3
<TABLE>
<C> <S> <C>
7. Terms and Conditions of Stock Options...............................................4
7.1 Number of Shares Subject to Stock Option.....................................4
7.2 Stock Option Price...........................................................4
7.3 Notice and Payment...........................................................4
7.4 Term of Stock Option.........................................................5
7.5 Exercise of Stock Option.....................................................6
7.6 No Transfer of Stock Option..................................................6
7.7 Limit on Incentive Stock Options.............................................6
7.8 No Fractional Shares.........................................................6
7.9 Exercisability in the Event of Death.........................................6
7.10 Modification, Extension, and Renewal of Stock Options........................6
7.11 1994 Distribution............................................................7
7.12 Other Provisions.............................................................8
8. Stock Appreciation Rights...........................................................8
8.1 General......................................................................8
8.2 Grant and Exercise...........................................................9
8.3 Terms and Conditions of Stock Appreciation Rights............................9
8.4 Rules Relating to Exercise..................................................10
9. Restricted Stock...................................................................10
9.1 General.....................................................................10
9.2 Award Agreement and Certificates............................................10
9.3 Rights as a Stockholder.....................................................11
9.4 Restrictions................................................................11
9.5 Section 83(b) Election......................................................11
10. Unrestricted Stock.................................................................12
11. Deferred Stock Awards..............................................................12
11.1 General.....................................................................12
11.2 Award Agreement.............................................................12
11.3 Elective Deferral...........................................................12
11.4 Termination.................................................................12
11.5 Payments in Respect of Deferred Stock.......................................12
12. Performance Unit Awards............................................................12
12.1 General.....................................................................12
12.2 Award Agreement.............................................................13
12.3 Termination.................................................................13
12.4 Acceleration; Waiver........................................................13
12.5 Exercise....................................................................13
13. Other Stock-Based Awards...........................................................13
13.1 General.....................................................................13
</TABLE>
ii
<PAGE> 4
<TABLE>
<C> <S> <C>
13.2 Purchase Price; Form of Payment.............................................14
13.3 Forfeiture of Awards; Repurchase of Stock; Acceleration of Waiver of
Restrictions................................................................14
13.4 Award Agreements............................................................14
13.5 Deemed Dividend Payments; Deferrals.........................................14
14. Supplemental Grants................................................................14
14.1 Loans.......................................................................14
14.2 Cash Payments...............................................................15
15. Termination or Amendment of the Plan...............................................15
16. Indemnification....................................................................16
17. Withholding........................................................................16
17.1 Irrevocable Election........................................................16
17.2 Approval by Plan Administrator..............................................16
17.3 Timing of Election..........................................................16
17.4 Window Period...............................................................16
17.5 Timing of Delivery..........................................................17
17.6 Terms in Agreement..........................................................17
18. Unfunded Status of Plan............................................................17
19. General Provisions.................................................................17
19.1 Restrictions on Issuance of Shares..........................................17
19.2 Rights as a Stockholder or Employee.........................................18
19.3 Governing Law...............................................................18
20. Effective Date of Plan.............................................................18
21. Term of Plan.......................................................................18
</TABLE>
iii
<PAGE> 5
QLOGIC CORPORATION
STOCK AWARDS PLAN
(AS AMENDED - SEPTEMBER 23, 1997)
1. PURPOSE. The purpose of this QLogic Corporation Stock Awards Plan is
to further the growth and development of QLogic Corporation by providing an
incentive to officers and other key employees who are in a position to
contribute materially to the prosperity of the Company to participate in the
long-term growth of the Company by receiving the opportunity to acquire shares
of the Company's common stock and to provide for additional compensation based
on appreciation in the Company's shares. The Plan provides a means to increase
such persons' interests in the Company's welfare, to encourage them to continue
their services to the Company or its subsidiaries, and to attract individuals of
outstanding ability to enter the employment of the Company or its subsidiaries.
2. DEFINITIONS. The following definitions are applicable to the Plan:
2.1 AWARD. Except where referring to a particular category of grant
under the Plan, "Award" or "Awards" shall include Incentive Stock Options,
Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards,
Unrestricted Stock Awards, Deferred Stock Awards, Performance Unit Awards and
Other Stock-Based Awards.
2.2 BOARD. The Board of Directors of the Company.
2.3 CODE. The Internal Revenue Code of 1986, as amended from time to
time.
2.4 COMPANY. QLogic Corporation, a Delaware corporation.
2.5 COMMON STOCK. The shares of the common stock of the Company.
2.6 DEFERRED STOCK AWARD. An Award made pursuant to Section 11 below
of the right to receive Common Stock at the end of a specified deferral period.
2.7 DISABLED OR DISABILITY. For the purposes of Section 7.4, a
disability of the type defined in Section 22(e)(3) of the Code. The
determination of whether an individual is Disabled or has a Disability shall be
determined under procedures established by the Plan Administrator.
2.8 FAIR MARKET VALUE. For purposes of the Plan, the "fair market
value" of any share of Common Stock of the Company at any date shall be (a) if
the Common Stock is listed on an established stock exchange or exchanges, the
last reported sale price per share on the last trading day immediately preceding
such date on the principal exchange on which it is traded, or if no sale was
made on such day on such principal exchange, at the closing reported bid price
on such day on such exchange, or (b) if the Common Stock is not then listed on
an exchange, the last reported sale price per share on the last trading day
immediately preceding such date reported by NASDAQ, or if sales are not reported
by NASDAQ or no sale was made on such date, the average of the closing bid and
asked prices per share for the Common Stock in the over-the-counter market as
quoted on NASDAQ on the day prior to such date, or (c) if the Common Stock is
not then listed on an exchange or quoted on NASDAQ, an amount determined in good
faith by the Plan Administrator.
<PAGE> 6
2.9 INCENTIVE STOCK OPTION. Any Stock Option intended to be and
designated as an "incentive stock option" within the meaning of Section 422 of
the Code.
2.10 NONQUALIFIED STOCK OPTION. Any Stock Option that is not an
Incentive Stock Option.
2.11 OPTIONEE. The recipient of a Stock Option Award.
2.12 OTHER STOCK-BASED AWARD. An Award made pursuant to Section 13
below of the right to receive debt or other securities convertible into or
exchangeable for Common Stock.
2.13 PERFORMANCE UNIT AWARD. An Award made pursuant to Section 12
below of the right to receive cash or Common Stock upon the attainment of
specified performance goals.
2.14 PLAN. The QLogic Corporation Stock Awards Plan, as amended from
time to time.
2.15 PLAN ADMINISTRATOR. The Board or the Compensation Committee
designated pursuant to Section 4 to administer, construe and interpret the terms
of the Plan.
2.16 RESTRICTED STOCK AWARD. An Award of shares of Common Stock that
are subject to restrictions pursuant to Section 9.
2.17 STOCK APPRECIATION RIGHT. An Award made pursuant to Section 8
below.
2.18 STOCK OPTION. Any option to purchase shares of Common Stock
granted pursuant to Section 7.
2.19 UNRESTRICTED STOCK AWARD. An Award made pursuant to Section 10
below.
3. AWARDS UNDER THE PLAN. Two types of Stock Options (referred to herein
as "Stock Options" without distinction between such two types) may be granted
under the Plan: Stock Options intended to qualify as Incentive Stock Options and
Nonqualified Stock Options. The Plan also permits the Award of Stock
Appreciation Rights that provide additional compensation based on appreciation
in the Company's Common Stock, Restricted Stock Awards, Unrestricted Stock
Awards, Deferred Stock Awards, Performance Unit Awards and Other Stock-Based
Awards.
4. ADMINISTRATION.
4.1 ADMINISTRATION BY BOARD. Subject to Section 4.2, the Plan
Administrator shall be the Board of Directors of the Company (the "Board")
during such periods of time as all members of the Board are "disinterested
persons" as defined in Rule 16b-3(c)(2)(i) promulgated by the Securities and
Exchange Commission (a "disinterested person"). Subject to the provisions of the
Plan, the Plan Administrator shall have authority to construe and interpret the
Plan, to promulgate, amend, and rescind rules and regulations relating to its
administration, from time to time to select from among the eligible employees
(as determined pursuant to Section 5) of the Company and its subsidiaries those
employees to whom Awards will be granted, to determine the timing and manner of
the grant of the Awards, to determine the exercise price, the number of shares
covered by and all of the terms of the Awards, to determine the duration and
purpose of leaves of absence which may
2
<PAGE> 7
be granted to Award holders without constituting termination of their employment
for purposes of the Plan, and to make all of the determinations necessary or
advisable for administration of the Plan. The interpretation and construction by
the Plan Administrator of any provision of the Plan, or of any agreement issued
and executed under the Plan, shall be final and binding upon all parties. No
member of the Board shall be liable for any action or determination undertaken
or made in good faith with respect to the Plan or any agreement executed
pursuant to the Plan.
4.2 ADMINISTRATION BY COMPENSATION COMMITTEE. The Board may, in its sole
discretion, delegate any or all of its duties as Plan Administrator, and at any
time the Board includes any person who is not a disinterested person, the Board
shall delegate all of its duties as Plan Administrator during such period of
time, to a committee (the "Compensation Committee") of not fewer than two (2)
members of the Board, all of the members of which Compensation Committee shall
be persons who, in the opinion of counsel to the Company, are disinterested
persons, to be appointed by and serve at the pleasure of the Board. From time to
time, the Board may increase or decrease (to not less than two members) the size
of the Compensation Committee, and add additional members to, or remove members
from, the Compensation Committee. The Compensation Committee shall act pursuant
to a majority vote, or the written consent of a majority of its members, and
minutes shall be kept of all of its meetings and copies thereof shall be
provided to the Board. Subject to the provisions of the Plan and the directions
of the Board, the Compensation Committee may establish and follow such rules and
regulations for the conduct of its business as it may deem advisable. No member
of the Compensation Committee shall be liable for any action or determination
undertaken or made in good faith with respect to the Plan or any agreement
executed pursuant to the Plan.
5. ELIGIBILITY. Any employee (including any officer who is an employee)
of the Company or any of its subsidiaries shall be eligible to receive an Award
under the Plan; provided, however, that no person who owns stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company or any of its parent or subsidiary corporations shall be eligible to
receive an Incentive Stock Option under the Plan unless at the time such Stock
Option is granted the Stock Option price (determined in the manner provided in
Section 7.2) is at least 110% of the Fair Market Value of the shares subject to
the Stock Option and such Stock Option by its terms is not exercisable after the
expiration of five years from the date such Stock Option is granted. An employee
may receive more than one Award under the Plan.
6. SHARES SUBJECT TO THE PLAN.
6.1 AVAILABLE SHARES. The shares available for grant of Awards under
the Plan shall be shares of the Company's authorized but unissued, or
reacquired, Common Stock. The aggregate number of shares which may be issued
pursuant to exercise of Awards granted under the Plan shall not exceed 1,725,000
shares of Common Stock (after giving effect to a one-for-two reverse stock split
and as subject to further adjustment as provided in Section 6.2). In the event
that the grant of any Award under the Plan for any reason expires, is terminated
or surrendered without being exercised in full or is exercised or surrendered
without the distribution of shares, the shares of Common Stock allocable to the
unexercised portion of the Award shall again be available for grant and
distribution under the Plan as if no Award had been granted with respect to such
shares.
3
<PAGE> 8
6.2 LIMITATION ON NUMBER OF SHARES SUBJECT TO AWARDS. In no event
shall any participant in the Plan be granted Awards in any one calendar year
pursuant to which the aggregate number of shares of Common Stock that may be
acquired thereunder exceeds 500,000 shares.
6.3 CAPITAL STRUCTURE ADJUSTMENTS. Except as otherwise provided
herein, appropriate and proportionate capital structure adjustments shall be
made in the number and class of shares subject to the Plan, to the Award rights
granted under the Plan, and the exercise price of such Award rights, in the
event of a stock dividend (but only on Common Stock), stock split, reverse stock
split, recapitalization, reorganization, merger, consolidation, separation, or
like change in the corporate or capital structure of the Company. In the event
of a liquidation of the Company, or a merger, reorganization, or consolidation
of the Company with any other corporation in which the Company is not the
surviving corporation or the Company becomes a wholly owned subsidiary of
another corporation, any unexercised Award rights theretofore granted under the
Plan shall be deemed cancelled unless the surviving corporation in any such
merger, reorganization, or consolidation elects to assume the Award rights under
the Plan or to use substitute Award rights in place thereof; provided, however,
that, notwithstanding the foregoing, if such Award rights would otherwise be
cancelled in accordance with the foregoing, the Award recipient shall have the
right, exercisable during a ten-day period ending on the fifth day prior to such
liquidation, merger, or consolidation, to exercise the Award rights without
regard to any restrictions on exercisability. To the extent that the foregoing
adjustments relate to stock or securities of the Company, such adjustments shall
be made by the Plan Administrator, the determination of which in that respect
shall be final, binding, and conclusive, provided that each Incentive Stock
Option granted pursuant to the Plan shall not be adjusted in a manner that
causes it to fail to continue to qualify as an incentive stock option within the
meaning of Section 422 of the Code.
7. TERMS AND CONDITIONS OF STOCK OPTIONS. Stock Options granted under
the Plan shall be evidenced by agreements (which need not be identical) in such
form and containing such provisions which are consistent with the Plan as the
Plan Administrator shall from time to time approve. Such agreements may
incorporate all or any of the terms hereof by reference and shall comply with
and be subject to the following terms and conditions:
7.1 NUMBER OF SHARES SUBJECT TO STOCK OPTION. Each Stock Option
agreement shall specify the number of shares subject to the Stock Option.
7.2 STOCK OPTION PRICE. The purchase price for the shares subject to
any Stock Option shall be such amount as is determined by the Plan
Administrator, but not less than par value per share. Anything to the contrary
notwithstanding, the purchase price for the shares subject to any Incentive
Stock Option shall not be less than 100% of the Fair Market Value of the shares
of Common Stock of the Company on the date the Stock Option is granted. In the
case of an Incentive Stock Option granted to an employee who owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or any of its parent or subsidiary corporations, the Stock
Option price shall not be less than 110% of the Fair Market Value of the shares
of Common Stock of the Company on the date the Stock Option is granted.
7.3 NOTICE AND PAYMENT. Any exercisable portion of a Stock Option may
be exercised only by:
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(a) delivery of a written notice to the Company, prior to the
time when such Stock Option becomes unexercisable under Section 7.4, stating the
number of shares being purchased and complying with all applicable rules
established by the Plan Administrator;
(b) payment in full of the exercise price of such Option by, as
applicable, (i) cash or check for an amount equal to the aggregate Stock Option
exercise price for the number of shares being purchased, (ii) in the discretion
of the Plan Administrator, upon such terms as the Plan Administrator shall
approve, a copy of instructions to a broker directing such broker to sell the
Common Stock for which such Option is exercised, and to remit to the Company the
aggregate exercise price of such Options (a "cashless exercise"), or (iii) in
the discretion of the Plan Administrator, upon such terms as the Plan
Administrator shall approve, the Optionee may pay all or a portion of the
purchase price for the number of shares being purchased by tendering shares of
the Company's Common Stock owned by the Optionee, duly endorsed for transfer to
the Company, with a Fair Market Value on the date of delivery equal to the
aggregate purchase price of the shares with respect to which such Stock Option
or portion is thereby exercised (a "stock-for-stock exercise");
(c) payment of the amount of tax required to be withheld (if any)
by the Company or any parent or subsidiary corporation as a result of the
exercise of a Stock Option. At the discretion of the Plan Administrator, upon
such terms as the Plan Administrator shall approve, the Optionee may pay all or
a portion of the tax withholding by (i) cash or check payable to the Company,
(ii) cashless exercise, (iii) stock-for-stock exercise, or (iv) a combination of
(1), (2) and (3); and
(d) delivery of a written notice to the Company requesting that
the Company direct the transfer agent to issue to the Optionee (or to his
designee) a certificate for the number of shares of Common Stock for which the
Option was exercised or, in the case of a cashless exercise, for any shares that
were not sold in the cashless exercise.
Notwithstanding the foregoing, the Company may extend and maintain, or
arrange for the extension and maintenance of, credit to any Optionee to finance
the Optionee's purchase of shares pursuant to exercise of any Stock Option, on
such terms as may be approved by the Plan Administrator, subject to applicable
regulations of the Federal Reserve Board and any other laws or regulations in
effect at the time such credit is extended. The Plan Administrator may, at any
time and in its discretion, authorize a cash payment, determined in accordance
with Section 8.3(f), which shall not exceed the amount required to pay in full
the federal, state and local tax consequences of an exercise of any Stock Option
granted under the Plan.
7.4 TERM OF STOCK OPTION. No Stock Option shall be exercisable after
the expiration of the earliest of (a) ten years after the date the Stock Option
is granted, (b) three months after the date the Optionee's employment with the
Company and its subsidiaries terminates if such termination is for any reason
other than Disability or death, or (c) one year after the date the Optionee's
employment with the Company and its subsidiaries terminates if such termination
is a result of death or Disability; provided, however, that the Stock Option
agreement for any Stock Option may provide for shorter periods in each of the
foregoing instances. In the case of an Incentive Stock Option granted to an
employee who owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or any of its parent or subsidiary
corporations, the term set forth in (a), above, shall not be more than five
years after the date the Stock Option is granted.
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7.5 EXERCISE OF STOCK OPTION. No Stock Option shall be exercisable
during the lifetime of an Optionee by any person other than the Optionee.
Subject to the foregoing, the Plan Administrator shall have the power to set the
time or times within which each Stock Option shall be exercisable and to
accelerate the time or times of exercise. Unless otherwise provided by the Plan
Administrator, each Stock Option granted under the Plan shall become exercisable
on a cumulative basis as to 25% of the total number of shares covered thereby at
any time after one year from the date the Stock Option is granted and an
additional 6 1/4% of such total number of shares at any time after the end of
each consecutive calendar quarter thereafter until the Stock Option has become
exercisable as to all of such total number of shares. To the extent that an
Optionee has the right to exercise a Stock Option and purchase shares pursuant
thereto, the Stock Option may be exercised from time to time as provided in
Section 7.3.
7.6 NO TRANSFER OF STOCK OPTION. No Stock Option shall be
transferable by an Optionee otherwise than by will or the laws of descent and
distribution.
7.7 LIMIT ON INCENTIVE STOCK OPTIONS. The aggregate fair market value
(determined at the time the Option is granted) of the stock with respect to
which Incentive Stock Options granted under this Plan are exercisable for the
first time by an Optionee during any calendar year shall not exceed $100,000. To
the extent that the aggregate Fair Market Value (determined at the time the
Stock Option is granted) of the stock with respect to which Incentive Stock
Options are exercisable for the first time by an Optionee during any calendar
year (under all Incentive Stock Option plans of the Company and any parent or
subsidiary corporations) exceeds $100,000, such Stock Options shall be treated
as Nonqualified Stock Options. The determination of which Stock Options shall be
treated as Nonqualified Stock Options shall be made by taking Stock Options into
account in the order in which they were granted.
7.8 NO FRACTIONAL SHARES. In no event shall the Company be required
to issue fractional shares upon the exercise of a Stock Option.
7.9 EXERCISABILITY IN THE EVENT OF DEATH. In the event of the death
of the Optionee, any Stock Option or unexercised portion thereof granted to the
Optionee, to the extent exercisable by him or her on the date of death, may be
exercised by the Optionee's personal representatives, heirs, or legatees subject
to the provisions of Section 7.4 hereof.
7.10 MODIFICATION, EXTENSION, AND RENEWAL OF STOCK OPTIONS. Subject
to the terms and conditions and within the limitations of the Plan, the Plan
Administrator may modify, extend, or renew outstanding Stock Options granted
under the Plan, accept the surrender of outstanding Stock Options (to the extent
not theretofore exercised) and authorize the granting of new Stock Options in
substitution therefor (to the extent not theretofore exercised). The Plan
Administrator may modify any outstanding Stock Options so as to specify a lower
exercise price or accept the surrender of outstanding Stock Options and
authorize the grant of new Stock Options in substitution therefor specifying a
lower price. The Plan Administrator shall not, however, without the consent of
the Optionee, modify any outstanding Incentive Stock Option in any manner which
would cause the Stock Option not to qualify as an Incentive Stock Option within
the meaning of Section 422 of the Code. Notwithstanding the foregoing, no
modification of a Stock Option shall, without the consent of the Optionee, alter
or impair any rights of the Optionee under the Stock Option.
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7.11 1994 DISTRIBUTION. The following provisions shall apply to the
options issued under this Plan in connection with the conversion and adjustment
of options which are outstanding under the Emulex Corporation Employee Stock
Option Plan (the "Emulex Plan") on the "Distribution Date" specified in the
Distribution Agreement (the "Distribution Agreement") providing for the
distribution of all of the outstanding common stock of the Company (the
"Distribution") to the stockholders of Emulex Corporation, a Delaware
corporation ("Emulex"), on the Distribution Date and a reverse stock split of
the outstanding shares of common stock of the Company in connection with the
Distribution pursuant to which each two outstanding shares of common stock of
the Company on the Distribution Date will be combined to become one share of
common stock of the Company (the "Reverse Stock Split"), with all fractional
shares being acquired by the Company for cash:
(a) Adjustment of Options for Reverse Stock Split. Upon the
effectiveness of the Reverse Stock Split, each option then outstanding under the
Emulex Plan shall be automatically adjusted pursuant to the terms of the Emulex
Plan so that the total number of shares of common stock of Emulex purchasable
under such option and the number of shares of such common stock purchasable as
of any given point in time shall be halved and the purchase price per share of
such common stock shall be doubled.
(b) Conversion of Options Upon the Distribution. Upon the
Distribution, except as otherwise provided in a written instrument with respect
to a specified option outstanding under the Plan on the date of the
Distribution, each option then outstanding under the Emulex Plan (an
"Outstanding Option") shall be automatically converted into two separately
exercisable options (collectively, the "New Options"), one to purchase common
stock of the Company (a "Company Option") and the other to purchase common stock
of Emulex (a "New Emulex Option"). Each Company Option will be deemed granted
under the Plan and each New Emulex Option will be deemed granted under the
Emulex Plan. Each New Option shall be exercisable for a number of shares equal
to the number of shares subject to purchase under the unexercised portion of the
related Outstanding Option (as adjusted as a result of the Reverse Stock Split
as provided herein).
(c) Option Terms and Conditions. Except as otherwise provided in
this Section 7.11, each New Option shall contain and continue to be subject to
the same terms and conditions of the related Outstanding Option, including,
without limitation, provisions relating to the term and expiration of the
option; exercisability of the option; payment for shares purchased upon exercise
of the option; adjustments in the shares and exercise price under the option,
cancellation of the option, and/or acceleration of exercisability of the option
in the event of any stock dividend, stock split, reverse stock split, merger,
consolidation, liquidation, recapitalization or reorganization of the Company or
Emulex, as the case may be; or acceleration of exercisability of the option as a
result of a change in control of the Company or Emulex, as the case may be. For
purposes of determining expiration of the term and vesting of the right to
exercise a Company Option received in connection with the conversion of an
Outstanding Option held by a person who is employed by Emulex immediately after
the Distribution (an "Emulex Employee"), such Emulex Employee's employment with
Emulex following the Distribution shall be treated the same as if such Emulex
Employee had continued to be employed by the Company or one of its subsidiaries;
and termination of such Emulex Employee's employment with Emulex and its
subsidiaries after the Distribution shall be treated as termination of such
Emulex Employee's employment with the Company and its subsidiaries, irrespective
of whether such Emulex Employee may become employed by the Company or one of its
subsidiaries following termination of his or her employment with Emulex and
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its subsidiaries. For purposes of determining expiration of the term and vesting
of the right to exercise a New Emulex Option received in connection with the
conversion of an Outstanding Option held by a person who is employed by the
Company or one of its subsidiaries immediately after the Distribution (a
"Company Employee"), such Company Employee's employment with the Company (or any
of its subsidiaries) following the Distribution shall be treated the same as if
such Company Employee were employed by Emulex or one of its subsidiaries; and
termination of such Company Employee's employment with the Company and its
subsidiaries after the Distribution shall be treated as termination of his or
her employment with Emulex and its subsidiaries, irrespective of whether such
Company Employee may become employed by Emulex or one of its subsidiaries
following termination of his or her employment with the Company and its
subsidiaries.
(d) Option Price. Upon the Distribution, the purchase price per
share of stock purchasable under each New Option shall be adjusted to give
effect to the Distribution by allocating the purchase price per share of the
stock purchasable under the related Outstanding Option between the Company
Option and the New Emulex Option proportionately such that the purchase price
per share under the Company Option shall be equal to the product of the purchase
price per share under the related Outstanding Option (adjusted as a result of
the Reverse Stock Split as provided herein) multiplied by a fraction, the
numerator of which is the fair market value of a share of common stock of the
Company and the denominator of which is the sum of the fair market value of a
share of common stock of the Company plus the fair market value of a share of
common stock of Emulex; and the purchase price per share under the Emulex Option
shall be equal to the product of the purchase price per share under the related
Outstanding Option (adjusted as a result of the Reverse Stock Split as provided
herein) multiplied by a fraction, the numerator of which is the fair market
value of a share of common stock of Emulex and the denominator of which is the
sum of the fair market value of a share of common stock of Emulex plus the fair
market value of a share of common stock of the Company.
(e) Fair Market Value. For purposes of this Section 7.11, the
fair market value of a share of common stock of the Company and a share of
common stock of Emulex shall be the average of the closing sales prices per
share of common stock of the Company and common stock of Emulex, respectively,
as quoted on the NASDAQ National Market System as reported in the Wall Street
Journal for each of the 20 trading days beginning on the day following the
Distribution Date, and if there is no closing sale price reported on the NASDAQ
National Market System for either common stock of the Company or common stock of
Emulex for one or more days during such period, the determination shall be made
utilizing the earliest 20 days following the day following the Distribution Date
on which closing sales prices are reported for such stock.
7.12 OTHER PROVISIONS. Each Stock Option may contain such other
terms, provisions, and conditions not inconsistent with the Plan as may be
determined by the Plan Administrator.
8. STOCK APPRECIATION RIGHTS.
8.1 GENERAL. A Stock Appreciation Right is a grant entitling the
recipient to receive an amount in cash or shares of the Common Stock of the
Company or a combination thereof having a value equal to (or if the Plan
Administrator shall so determine at time of grant, less than) the excess of the
Fair Market Value of a share on the date of exercise over the Fair Market Value
of a share on the date of grant (or over the Stock Option exercise price, if the
Stock Appreciation
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Rights are granted in tandem with a Stock Option) multiplied by the number of
shares with respect to which the Stock Appreciation Rights shall have been
exercised, with the Plan Administrator having the sole discretion to determine
the form of payment. In any event, cash shall be paid in lieu of fractional
shares.
8.2 GRANT AND EXERCISE. Stock Appreciation Rights may be granted in
tandem with the grant of any Stock Option or independent of any Stock Option
granted under the Plan. In the case of a tandem grant with a Nonqualified Stock
Option, such Stock Appreciation Rights may be granted either at or after the
grant of such Nonqualified Stock Option. In the case of a tandem grant with an
Incentive Stock Option, Stock Appreciation Rights may be granted only at the
time of the grant of such Incentive Stock Option. Stock Appreciation Rights or
any applicable portion thereof granted in tandem with a given Stock Option shall
terminate and no longer be exercisable upon the termination or exercise of the
related Stock Option, except that, unless otherwise provided by the Plan
Administrator at the time of grant, a right granted with respect to less than
the full number of shares covered by a related tandem Stock Option shall be
reduced only if and to the extent that the number of shares covered by the
exercise or termination of the related tandem Stock Option exceeds the number of
shares not covered by the Stock Appreciation Rights.
8.3 TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS. Stock
Appreciation Rights shall be subject to the following terms and conditions and
to such other terms and conditions not inconsistent with the Plan as the Plan
Administrator may from time to time determine:
(a) No Stock Appreciation Rights shall be exercisable in whole or
in part during the first six months of the grant term.
(b) Stock Appreciation Rights granted in tandem with a Stock
Option shall be exercisable by the Optionee (or such other person entitled under
the Plan to exercise the Stock Option contained in the tandem grant) only at
such time or times, and to the extent, that the related tandem Stock Option is
exercisable and only when the Fair Market Value of the stock subject to the
tandem Stock Option exceeds the exercise price of such Stock Option. Upon the
exercise of Stock Appreciation Rights, the applicable portion of any related
tandem Stock Option shall be surrendered. Stock Appreciation Rights granted
independent of any Stock Option shall be exercisable by the holder in such
manner and within such period or periods as shall be determined by the Plan
Administrator pursuant to the terms of the Stock Appreciation Rights agreement
evidencing the grant.
(c) Stock Appreciation Rights granted in tandem with a Stock
Option shall be transferable only with such Stock Option. Stock Appreciation
Rights shall not be transferable otherwise than by will or the laws of descent
and distribution. All Stock Appreciation Rights shall be exercisable during the
holder's lifetime only by the holder or the holder's legal representative or
guardian.
(d) The Plan Administrator may, at any time and in its
discretion, authorize a cash payment in respect of a grant or exercise under the
Plan which shall not exceed the amount required to pay in full the federal,
state and local tax consequences of an exercise of any Award granted under this
Plan. The Plan Administrator shall have sole and complete authority to decide
whether to make such cash payments in any case, to make provision for such
payments either simultaneously with or after any grant, and to determine the
amount of any such payment.
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8.4 RULES RELATING TO EXERCISE. In the case of a holder subject to
Section 16(b) of the Securities Exchange Act of 1934, as amended from time to
time, no Stock Appreciation Rights shall be exercised except in compliance with
any applicable requirements of Rule 16b-3(e) promulgated by the Securities and
Exchange Commission or any successor rule. The Plan Administrator may impose
such conditions on the exercise of Stock Appreciation Rights (including, without
limitation, to limit the time of exercise to specified window periods following
the release of quarterly and annual statements of sales and earnings or to fixed
dates that are outside the control of the Stock Appreciation Rights holder) as
may be required to satisfy the requirements of Rule 16b-3 or any successor rule.
9. RESTRICTED STOCK.
9.1 GENERAL. A Restricted Stock Award is an Award entitling the
recipient to acquire shares of Common Stock, subject to such conditions,
including the right of the Company during a specified period or periods to
repurchase such shares at their original price or to require forfeiture of such
shares (if no cash consideration was paid) upon the participant's termination of
employment, as the Plan Administrator may determine at the time of grant. The
Plan Administrator may award shares of Restricted Stock (i) at no cost to the
recipient (or for a purchase price not in excess of the par value of the shares)
or (ii) for a purchase price determined by the Plan Administrator on the date of
grant. Shares of Restricted Stock may be granted or sold in respect of past
services or other valid consideration.
9.2 AWARD AGREEMENT AND CERTIFICATES. A participant who is granted a
Restricted Stock Award shall have no rights with respect to such Award unless
the participant shall have accepted the Award within sixty days (or such shorter
period as the Plan Administrator may specify) following the Award date by
executing and delivering to the Company a Restricted Stock Award agreement in
such form as the Plan Administrator shall determine and by making payment to the
Company by certified or bank check or instrument acceptable to the Plan
Administrator any cash consideration required to be paid in connection with such
Restricted Stock Award. Each participant receiving a Restricted Stock Award
shall be issued a certificate in respect of such shares of Restricted Stock.
Such certificate shall be registered in the name of the participant and
deposited with the Company or its designee, and shall bear an appropriate legend
referring to the terms, conditions and restrictions applicable to such Award,
substantially in the following form:
"This certificate and the shares of stock represented
hereby are subject to the terms and conditions (including
forfeiture and restrictions against transfer) contained in the
QLogic Corporation Stock Awards Plan and an agreement entered
into between the registered owner and QLogic Corporation. Release
from such terms and conditions shall be obtained only in
accordance with the provisions of the Plan and the agreement,
copies of which are on file in the office of the Secretary of
QLogic Corporation."
The Plan Administrator may require that, as a condition of any
Restricted Stock Award, the participant shall have delivered to the Company a
stock power, endorsed in blank, relating to the Stock covered by such Award.
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<PAGE> 15
9.3 RIGHTS AS A STOCKHOLDER. Upon complying with Section 9.2 above, a
participant shall have all the rights of a stockholder with respect to the
Restricted Stock including voting and dividend rights, subject to
nontransferability restrictions, Company repurchase or forfeiture rights and any
other condition described in this Section 9 or contained in the Restricted Stock
Award agreement. The Restricted Stock Award agreement may require or permit the
immediate payment, waiver, deferral, or investment of dividends paid on the
Restricted Stock.
9.4 RESTRICTIONS. Shares of Restricted Stock may not be sold,
assigned, transferred, pledged, or otherwise encumbered or disposed of except as
specifically provided herein and in the Restricted Stock Award agreement. Unless
the Plan Administrator in its discretion provides otherwise, all shares of
Restricted Stock shall be subject to the restrictions against transfer and to
the Company's right to repurchase or require forfeiture set forth in this
Section 9.4 for a period of six months from the date of grant.
The Plan Administrator shall specify the date or dates (which may
depend upon or be related to the attainment of performance goals or such other
factors or criteria as the Plan Administrator shall determine) on which the
nontransferability of the Restricted Stock and the obligation to forfeit or
resell such shares to the Company shall lapse. The Plan Administrator may
provide for the lapse of such restrictions in installments and at any time may
accelerate such date or dates and otherwise waive or, subject to Section 15
below, amend any terms and conditions of the Award.
Except as otherwise may be provided in the Award agreement or
determined by the Plan Administrator at any time after the date of grant, in the
event of termination of employment of a participant with the Company and its
subsidiaries for any reason (including death), the participant or the
participant's legal representative shall resell to the Company, at the cash
consideration paid therefor, all Restricted Stock, and the Company shall
purchase such shares at that price, or if no cash consideration was paid, all
shares of Restricted Stock awarded to the participant shall automatically be
forfeited to the Company.
Any shares of Stock or other securities of the Company or any
other entity which are issued as a distribution on, or in exchange for,
Restricted Stock or into which Restricted Stock is converted as a result of a
recapitalization, stock dividend, distribution of securities, stock split or
combination of shares or a merger, consolidation or sale of substantially all of
the assets of the Company shall be subject to the restrictions set forth in the
Restricted Stock Award agreement, which shall inure to the benefit of any
surviving or successor corporation which is the issuer of such securities. Upon
the lapse of the restrictions applicable to a participant's Restricted Stock,
certificates for shares of Stock free of any restrictive legend shall be
delivered to the participant or his legal representative or guardian.
9.5 SECTION 83(b) ELECTION. Any Restricted Stock Award agreement may
provide that the participant may not elect to be taxed with respect to such
Award in accordance with Section 83(b) of the Code.
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10. UNRESTRICTED STOCK. The Plan Administrator may, in its sole
discretion, grant (or sell at a purchase price determined by the Plan
Administrator at the time of sale) to any participant shares of Common Stock
free of restrictions under the Plan ("Unrestricted Stock"). Shares of
Unrestricted Stock may be granted or sold as described in the preceding sentence
in respect of past services or other valid consideration. Any purchase of
Unrestricted Stock by a recipient must take place within sixty days after the
time of grant of the right to purchase such shares. Notwithstanding the
foregoing, any shares of Unrestricted Stock granted to a participant subject to
Section 16(b) of the Act may not be sold or otherwise disposed of for value for
a period of six months from the date of grant.
11. DEFERRED STOCK AWARDS.
11.1 GENERAL. A Deferred Stock Award is an Award entitling the
recipient to acquire shares of Common Stock without payment in one or more
installments at a future date or dates, all as determined by the Plan
Administrator. The Plan Administrator may also condition such acquisition on the
attainment of specified performance goals or such other factors or criteria as
the Plan Administrator shall determine. Unless the Plan Administrator in its
discretion provides otherwise, the deferral with respect to any Deferred Stock
Award shall be no less than six months from the date of grant.
11.2 AWARD AGREEMENT. A participant who is granted a Deferred Stock
Award shall have no rights with respect to such Award unless within sixty days
of the grant of such Award (or such shorter period as the Plan Administrator may
specify) the participant shall have accepted the Award by executing and
delivering to the Company a Deferred Stock Award agreement.
11.3 ELECTIVE DEFERRAL. A participant may elect to further defer
receipt of the Common Stock payable under a Deferred Stock Award (or an
installment of the Award) for a specified period or until a specified event,
subject in each case to the Plan Administrator's approval and under such terms
as determined by the Plan Administrator. Subject to any exceptions adopted by
the Plan Administrator, such election must generally be made at least 12 months
prior to completion of the deferral period for the Award (or for such
installment of the Award).
11.4 TERMINATION. Except as may otherwise be provided in the
Deferred Stock Award agreement, a participant's rights in all Deferred Stock
Awards shall automatically terminate upon the participant's termination of
employment with the Company and its Subsidiaries for any reason (including
death). At any time prior to the participant's termination of employment, the
Plan Administrator may in its discretion accelerate, waive, or, subject to
Section 15 below, amend any or all of the restrictions or conditions imposed
under any Deferred Stock Award.
11.5 PAYMENTS IN RESPECT OF DEFERRED STOCK. Without limiting the
right of the Plan Administrator to specify different terms, the Deferred Stock
Award agreement may either make no provisions for, or may require or permit the
immediate payment, deferral, or investment of amounts equal to, or less than,
any cash dividends which would have been payable on the Deferred Stock had such
Stock been outstanding, all as determined by the Plan Administrator in its sole
discretion.
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12. PERFORMANCE UNIT AWARDS.
12.1 GENERAL. A Performance Unit Award is an Award entitling the
recipient to acquire cash or shares of Common Stock, or a combination of cash
and Common Stock, upon the attainment of specified performance goals. The Plan
Administrator in its sole discretion shall determine whether and to whom
Performance Unit Awards shall be made, the performance goals applicable under
each such Award, the periods during which performance is to be measured, and all
other limitations and conditions applicable to the Performance Unit Award.
Notwithstanding the foregoing, no Performance Unit Award shall be exercisable in
whole or in part during the first six months following the date of grant.
Performance goals may vary from participant to participant and between groups of
participants and shall be based upon such Company, business unit or individual
performance factors or criteria as the Plan Administrator may deem appropriate.
Performance periods may overlap and participants may participate simultaneously
with respect to Performance Unit Awards that are subject to different
performance periods and different performance goals. The Plan Administrator may
adjust the performance goals and periods applicable to a Performance Unit Award
to take into account changes in law and accounting and tax rules, and to make
such adjustments as the Plan Administrator deems necessary or appropriate to
reflect the inclusion or exclusion of the impact of extraordinary or unusual
items, events or circumstances in order to avoid windfalls or hardships.
Performance Units may be awarded independent of or in connection with the grant
of any other Award under the Plan.
12.2 AWARD AGREEMENT. A participant shall have no rights with
respect to a Performance Unit Award unless within sixty days of the grant of
such Award (or such shorter period as the Plan Administrator may specify) the
participant shall have accepted the Award by executing and delivering to the
Company a Performance Unit Award agreement.
12.3 TERMINATION. Except as may otherwise be provided by the Plan
Administrator at any time prior to the termination of employment, a
participant's rights and all Performance Unit Awards shall automatically
terminate upon the participant's termination of employment by the Company and
its Subsidiaries for any reason (including death).
12.4 ACCELERATION; WAIVER. At any time prior to the participant's
termination of employment with the Company and its Subsidiaries, the Plan
Administrator may in its sole discretion accelerate, waive, or, subject to
Section 15 below, amend any or all of the goals, restrictions or conditions
imposed under any Performance Unit Award.
12.5 EXERCISE. The Plan Administrator in its sole discretion shall
establish procedures to be followed in exercising any Performance Unit Award,
which procedure shall be set forth in the Performance Unit Award agreement. The
Plan Administrator may at any time provide that payment under a Performance Unit
Award shall be made, upon satisfaction of the applicable performance goals,
without any exercise by the participant. Except as otherwise specified by the
Plan Administrator, (i) a Performance Unit granted in tandem with a Stock Option
is exercisable, and (ii) the exercise of a Performance Unit granted in tandem
with any Award shall reduce the number of shares of Common Stock subject to the
related Award on such basis as is specified in the Performance Unit Award
agreement.
13. OTHER STOCK-BASED AWARDS.
13.1 GENERAL. The Plan Administrator may grant other Awards under
which Common Stock is or may in the future be acquired ("Other Stock-Based
Awards"). Such Awards
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may include, without limitation, debt securities convertible into or
exchangeable for shares of Common Stock upon such conditions, including
attainment of performance goals, as the Plan Administrator shall determine. No
Other Stock-Based Award shall be exercisable in whole or in part during the
first six months following the date of grant or, if shares of Common Stock are
awarded to a participant on the date of grant, such Stock shall be subject to
restrictions against transfer for a period of no less than six months from the
date of grant. Subject to the purchase price limitations in Section 13.2 below,
such convertible or exchangeable securities may have such terms and conditions
as the Plan Administrator may determine at the time of grant. However, no
convertible or exchangeable debt shall be issued unless the Plan Administrator
shall have provided (by the Company's right of repurchase, right to require
conversion or exchange, or other means deemed appropriate by the Plan
Administrator) a means of avoiding any right of the holders of such debt to
prevent a Company transaction by reason of covenants in such debt.
13.2 PURCHASE PRICE; FORM OF PAYMENT. The Plan Administrator may
determine the consideration, if any, payable upon the issuance or exercise of an
Other Stock-Based Award. However, no shares of Common Stock (whether acquired by
purchase, conversion, or exchange or otherwise) shall be issued unless (i)
issued at no cost to the recipient (or for a purchase price not in excess of the
par value of the shares), or (ii) sold, exchanged, or converted by the Company,
and the Company shall have received payment for such Stock or securities so
sold, exchanged, or converted equal to at least 50% of Fair Market Value of the
Stock on the grant or effective date, or the exchange or conversion date, under
the Award, as specified by the Plan Administrator. The Plan Administrator may
permit payment by certified check or bank check or other instrument acceptable
to the Plan Administrator or by surrender of other shares of Common Stock
(excluding shares then subject to restrictions under the Plan).
13.3 FORFEITURE OF AWARDS; REPURCHASE OF STOCK; ACCELERATION OF
WAIVER OF RESTRICTIONS. The Plan Administrator may determine the conditions
under which an other Stock-Based Award shall be forfeited or, in the case of an
Award involving a payment by the recipient, the conditions under which the
Company may or must repurchase such Award or related Stock. At any time the Plan
Administrator may in its sole discretion accelerate, waive, or, subject to
Section 15 below, amend any or all of the limitations or conditions imposed
under any Other Stock-Based Award.
13.4 AWARD AGREEMENTS. A participant shall have no rights with
respect to any Other Stock-Based Award unless within sixty days after the grant
of such Award (or such shorter period as the Plan Administrator may specify) the
participant shall have accepted the Award by executing and delivering to the
Company an Other Stock-Based Award agreement.
13.5 DEEMED DIVIDEND PAYMENTS; DEFERRALS. Without limiting the right
of the Plan Administrator to specify different terms, an Other Stock-Based Award
agreement may require or permit the immediate payment, waiver, deferral, or
investment of dividends or deemed dividends payable or deemed payable on Stock
subject to the Award.
14. SUPPLEMENTAL GRANTS.
14.1 LOANS. The Company may extend and maintain, or arrange for the
extension and maintenance of, credit to any Award recipient to finance the
participant's purchase of shares pursuant to the exercise of any Award, on such
terms as may be approved by the Plan Administrator,
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subject to applicable regulations of the Federal Reserve Board and any other
laws or regulations in effect at the time such credit is extended, either on or
after the date of grant of such Award. Such loans may be either in connection
with the grant or exercise of any Award, or in connection with the payment of
any federal, state and local income taxes in respect of income recognized under
an Award. The Plan Administrator shall have full authority to decide whether to
make a loan hereunder and to determine the amount, term, and provisions of any
such loan, including the interest rate (which may be zero) charged in respect of
any such loan, whether the loan is to be secured or unsecured, the terms on
which the loan is to be repaid and the conditions, if any, under which it may be
forgiven. However, no loan hereunder shall provide or reimburse to the borrower
the amount used by him for the payment of the par value of any shares of Stock
issued, have a term (including extensions) exceeding ten years in duration, or
be an amount exceeding the total exercise or purchase price paid by the borrower
under an Award or for related Stock under the Plan plus an amount equal to the
cash payment permitted in Section 14.2 below.
14.2 CASH PAYMENTS. The Plan Administrator may, at any time and in
its discretion, authorize a cash payment, in respect of the grant or exercise of
an Award under the Plan or the lapse or waiver of restrictions under an Award,
which shall not exceed the amount which would be required in order to pay in
full the federal, state and local income taxes due as a result of income
recognized by the recipient as a consequence of (i) the receipt of an Award or
the exercise of rights thereunder and (ii) the receipt of such cash payment. The
Plan Administrator shall have complete authority to decide whether to make such
cash payments in any case, to make provisions for such payments either
simultaneously with or after the grant of the associated Award, and to determine
the amount of any such payment.
15. TERMINATION OR AMENDMENT OF THE PLAN. The Board may at any time
terminate or amend the Plan; provided that, without approval of the stockholders
of the Company, there shall be, except by operation of the provisions of Section
6.2, no increase in the total number of shares covered by the Plan, no change in
the class of persons eligible to receive Awards granted under the Plan or other
material modification of the requirements as to eligibility for participation in
the Plan, no material increase in the benefits accruing to participants under
the Plan, no reduction in the exercise price of Awards granted under the Plan,
and no extension of the latest date upon which Awards may be exercised; and
provided further that, without the consent of the Award recipient, no amendment
may adversely affect any then outstanding Awards or any unexercised portion
thereof.
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16. INDEMNIFICATION. In addition to such other rights of indemnification
as they may have as members of the Board or the Compensation Committee, the
members of the Plan Administrator shall be indemnified by the Company against
reasonable expense, including attorney's fees, actually and necessarily incurred
in connection with the defense of any action, suit, or proceeding, or in
connection with any appeal therein, to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection with the
Plan or any grant thereunder, and against all amounts paid by them in settlement
thereof (provided such settlement is approved by independent legal counsel
selected by the Company) or paid by them in satisfaction of a judgment in any
action, suit, or proceeding, except in relation to matters as to which it shall
be adjudged in such action, suit, or proceeding that such member is liable for
negligence or misconduct in the performance of his duties, provided that within
60 days after institution of any such action, suit, or proceeding, the member
shall in writing offer the Company the opportunity, at its own expense, to
handle and defend the same.
17. WITHHOLDING. Whenever the Company proposes or is required to issue
or transfer shares under the Plan, the Company shall have the right to require
the recipient to remit to the Company an amount sufficient to satisfy any
federal, state and local withholding tax requirements prior to the delivery of
any certificate or certificates for such shares of Common Stock. If a
participant surrenders shares acquired pursuant to the exercise of an Incentive
Stock Option in payment of the exercise price of an Award and such surrender
constitutes a disqualifying disposition for purposes of obtaining Incentive
Stock Option treatment under the Code, the Company shall have the right to
require the Optionee to remit to the Company an amount sufficient to satisfy any
federal, state and local withholding tax requirements prior to the delivery of
any certificate or certificates for such shares. Whenever under the Plan
payments are to be made in cash, such payments shall be net of an amount
sufficient to satisfy any federal, state and local withholding tax requirements.
A recipient may elect with respect to any Award which is paid in whole or in
part in shares of Common Stock, to surrender previously acquired shares of
Common Stock or authorize the Company to withhold shares (valued at Fair Market
Value on the date of surrender or withholding of the shares) in satisfaction of
all such withholding requirements (the "Share Surrender Withholding Election")
in accordance with the following:
17.1 IRREVOCABLE ELECTION. Any Share Surrender Withholding Election
shall be made by written notice to the Company and thereafter shall be
irrevocable by the recipient.
17.2 APPROVAL BY PLAN ADMINISTRATOR. If a recipient is subject to
Section 16 of the Securities Exchange Act of 1934, as amended, or any successor
law, any Share Surrender Withholding Election shall be subject to the consent or
disapproval of the Plan Administrator in accordance with rules established from
time to time by the Plan Administrator.
17.3 TIMING OF ELECTION. Any Share Surrender Withholding Election
must be made prior to the date on which the recipient recognizes taxable income
with respect to the receipt of such shares (the "Tax Date").
17.4 WINDOW PERIOD. If a recipient is subject to Section 16 of the
Securities Exchange Act of 1934, as amended, or any successor law, such person
must make any Share Surrender Withholding Election:
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<PAGE> 21
(a) more than six months after the date of grant with respect
to which such election is made (except whenever such election is made by a
Disabled recipient or the estate or personal representative of a deceased
recipient); and
(b) either at least six months prior to the Tax Date or during
the period of ten business days beginning on the third business day following
the release for publication of the Company's summary statement of sales and
earnings for a quarter or fiscal year.
17.5 TIMING OF DELIVERY. When the Tax Date falls after the exercise
of an Award and the recipient makes a Share Surrender Withholding Election, the
full number of shares subject to the Award being exercised will be issued, but
the recipient will be unconditionally obligated to deliver to the Company on the
Tax Date the number of shares having a value on the Tax Date equal to the
recipient's federal, state and local withholding tax requirements.
17.6 TERMS IN AGREEMENT. For purposes of this Section 15, the Plan
Administrator shall have the discretion to provide (by general rule or a
provision in the specific Award agreement) that, at the election of the
recipient, "federal, state and local withholding tax requirements" shall be
deemed to be any amount designated by the recipient which does not exceed his
estimated federal, state and local tax obligations associated with the
transaction, including FICA taxes to the extent applicable.
18. UNFUNDED STATUS OF PLAN. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a participant by the Company, nothing set forth herein
shall give any such participant any rights that are greater than those of a
general unsecured creditor of the Company. In its sole discretion, the Plan
Administrator may authorize the creation of trusts or other arrangements to meet
the obligations created under the Plan to deliver shares or cash with respect to
the exercise of Awards hereunder, provided, however, that the existence of such
trusts or other arrangements is consistent with the unfunded status of the Plan.
19. GENERAL PROVISIONS.
19.1 RESTRICTIONS ON ISSUANCE OF SHARES. The issuance of Awards and
shares of Common Stock shall be subject to compliance with all of the applicable
requirements of law with respect to the issuance and sale of securities,
including, without limitation, any required qualification under the California
Corporate Securities Law of 1968, as amended. If a participant acquires shares
of Common Stock pursuant to the exercise of an Award, the Plan Administrator, in
its sole discretion, may require as a condition of issuance of shares covered by
his or her Award, to represent that the shares to be acquired pursuant to
exercise of the Award will be acquired for investment and without a view to
distribution thereof; and in such case, the Company may place a legend on the
certificate evidencing the shares reflecting the fact that they were acquired
for investment and cannot be sold or transferred unless registered under the
Securities Act of 1933, as amended, or unless counsel for the Company is
satisfied that the circumstances of the proposed transfer do not require such
registration. The Company may place a legend on the certificates evidencing the
shares reflecting the fact that they are subject to restrictions on transfer
under the terms of this Section 20.1. In addition, any participant may be
required to execute a buy-sell or right of first refusal agreement in favor of
the Company or its designee with respect to all or any of the shares so
acquired. In such event, the terms of such agreement shall apply to such shares.
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19.2 RIGHTS AS A STOCKHOLDER OR EMPLOYEE. A participant or
transferee of an Award shall have no right as a stockholder of the Company with
respect to any shares covered by any grant under this Plan until the date of the
issuance of a share certificate for such shares. No adjustment shall be made for
dividends (ordinary or extraordinary, whether cash, securities, or other
property) or distributions or other rights for which the record date is prior to
the date such share certificate is issued, except as provided in Section 6.2.
Nothing in the Plan or in any Award agreement shall confer upon any participant
any right to continue in the employ of the Company or any of its subsidiaries or
interfere in any way with any right of the Company or any subsidiary to
terminate the participant's employment at any time.
19.3 GOVERNING LAW. This Plan shall be governed by, and construed in
accordance with, the laws of the state of California.
20. EFFECTIVE DATE OF PLAN. The Plan shall be adopted and become
effective on the date of execution specified below subject, however, to the
approval of the Plan by the stockholders of the Company within twelve months of
the Effective Date. Unless stockholder approval is obtained within twelve months
of the Effective Date, this Plan and any Awards hereunder shall become void.
21. TERM OF PLAN. Unless sooner terminated by the Board in its sole
discretion, the Plan will expire and no Awards may be made hereunder on and
after December 1, 2003.
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<PAGE> 1
Exhibit 4.2
QLOGIC CORPORATION
1998 EMPLOYEE STOCK PURCHASE PLAN
---------------------------------
This 1998 EMPLOYEE STOCK PURCHASE PLAN (the "Plan") is hereby
established by QLOGIC CORPORATION, a Delaware corporation (the "Company") on
this 9th day of April, 1998, and effective as of the "Effective Date."
ARTICLE 1
PURPOSE OF THE PLAN
1.1 PURPOSE. The Company has determined that it is in its best interest
to provide incentives to attract and retain employees and to increase employee
morale by providing a program through which employees of the Company, and of
such of the Company's subsidiaries as the Company's Board of Directors may from
time to time designate (each a "Designated Subsidiary," and collectively,
"Designated Subsidiaries") may acquire a proprietary interest in the Company
through the purchase of shares of the common stock of the Company ("Company
Stock"). The Plan is hereby established by the Company to permit employees to
subscribe for and purchase directly from the Company shares of the Company Stock
at a discount from the market price, and to pay the purchase price in
installments by payroll deductions. The Plan is intended to qualify as an
"employee stock purchase plan" under Section 423 of the Internal Revenue Code of
1986, as amended from time to time (the "Code"). The provisions of the Plan are
to be construed in a matter consistent with the requirements of Section 423 of
the Code. The Plan is not intended to be an employee benefit plan under the
Employee Retirement Income Security Act of 1974, and therefore is not required
to comply with that Act.
ARTICLE 2
DEFINITIONS
2.1 ADMINISTRATOR. "Administrator" shall refer to the committee of the
Board of Directors of the Company appointed to administer the Plan, and if no
such committee has been appointed, the term Administrator shall mean the Board
of Directors. The initial Administrator of the Plan shall be the Compensation
Committee of the Board of Directors.
2.2 COMPANY. "Company" means QLogic Corporation, and its majority-owned
subsidiaries and wholly-owned subsidiaries of its majority-owned subsidiaries,
as well as any parent corporation of QLogic Corporation.
2.3 COMPENSATION. "Compensation" includes salary, annual
bonus/incentive, annual profit sharing, overtime, lead premium, commissions and
shift differential, but expressly excludes other forms of compensation such as
relocation, housing, car allowances, phone allowances, sign-on bonuses and
referral bonuses.
2.4 EFFECTIVE DATE. "Effective Date" means November 2, 1998.
<PAGE> 2
2.5 EMPLOYEE. "Employee" means each person currently employed by the
Company or any of its Designated Subsidiaries, any portion of whose income is
subject to withholding of income tax or for whom Social Security retirement
contributions are made by the Company or any Designated Subsidiary.
2.6 ENTRY DATE. "Entry Date" means the first day of the second month of
each calendar quarter (February 1, May 1, August 1 and November 1).
2.7 GRANT DATE. "Grant Date" means the first day of each Offering Period
(February 1, May 1, August 1 and November 1) under the Plan. However, for the
first Offering Period, the Grant Date shall be the Effective Date.
2.8 OFFERING PERIOD. "Offering Period" means the three-month periods
from February 1 through April 30, May 1 through July 31, August 1 through
October 31, and November 1 through January 31 of each calendar year. The first
Offering Period shall commence on the Effective Date and end January 31, 1999.
2.9 5% OWNER. "5% Owner" means an Employee who, immediately after the
grant of any rights under the Plan, would own Company Stock or hold outstanding
options to purchase Company Stock possessing 5% or more of the total combined
voting power of all classes of stock of the Company. For purposes of this
Section, the ownership attribution rules of Code Section 425(d) shall apply.
2.10 PARTICIPANT. "Participant" means an Employee who has satisfied the
eligibility requirements of Section 3.1 and has become a participant in the Plan
in accordance with Section 3.2.
2.11 PURCHASE DATE. "Purchase Date" means the last day of each Offering
Period (April 30, July 31, October 31, or January 31).
ARTICLE 3
ELIGIBILITY AND PARTICIPATION
3.1 ELIGIBILITY. Each Employee of the Company, or any Designated
Subsidiary, who has attained age eighteen (18) on the Entry Date and who
regularly works at least 30 hours per week for more than five months per year in
the rendition of personal services to the Company may become a Participant in
the Plan on the Entry Date coincident with or next following his satisfaction of
such requirements of employment with the Company.
3.2 PARTICIPATION. An Employee who has satisfied the eligibility
requirements of Section 3.1 may become a Participant in the Plan upon his
completion and delivery to the Administrator of the Company of a stock purchase
agreement provided by the Company (the "Stock Purchase Agreement") authorizing
payroll deductions. Payroll deductions for a Participant shall commence on the
Entry Date coincident with or next following the filing of the Participant's
Stock Purchase Agreement and shall remain in effect until revoked by the
Participant by the filing of a notice of withdrawal from the Plan under Article
8 or by the filing of a new Stock Purchase Agreement providing for a change in
the Participant's payroll deduction rate under Section 5.2.
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<PAGE> 3
3.3 SPECIAL RULES. Under no circumstances shall:
a. A 5% Owner be granted an option to purchase Company Stock under
the Plan;
b. A Participant be entitled to purchase Company Stock under the
Plan which, when aggregated with all other employee stock purchase plans of the
Company, exceed an amount equal to the Aggregate Maximum. "Aggregate Maximum"
means an amount equal to $25,000 worth of Company Stock (determined using the
fair market value of such Company Stock at each applicable Grant Date) during
each calendar year; or
c. The number of shares of Company Stock purchasable by a
Participant in any calendar year shall not exceed 5,000 shares, subject to
periodic adjustments under Section 10.4.
ARTICLE 4
OFFERING PERIODS
4.1 OFFERING PERIODS. The initial grant of the right to purchase Company
Stock under the Plan shall occur on the Effective Date and terminate on January
31, 1999. Thereafter, the Plan shall provide for Offering Periods commencing on
each Grant Date and terminating on the next following Purchase Date.
ARTICLE 5
PAYROLL DEDUCTIONS
5.1 PARTICIPANT ELECTION. Upon completion of the Stock Purchase
Agreement, each Participant shall designate the amount of payroll deductions to
be made from his or her paycheck to purchase Company Stock under the Plan. The
amount of payroll deductions shall be designated in whole percentages of
Compensation, not to exceed 10%, which percentage may be increased or decreased
from time to time in the discretion of the Administrator, but in no event shall
the maximum amount be increased to an amount in excess of 15% of Compensation.
The amount so designated upon the Stock Purchase Agreement shall be effective as
of the next Grant Date and shall continue until terminated or altered in
accordance with Section 5.2 below.
5.2 CHANGES IN ELECTION. Any Participant may change any election
(increase or decrease the rate of payroll deductions) under this Section one
time during any Offering Period by completing and delivering to the
Administrator a new Stock Purchase Agreement setting forth the desired change at
least 15 days prior to the end of the Offering Period. A Participant may
terminate participation in the Plan at any time prior to the close of an
Offering Period as provided in Article 8. A Participant may also terminate
payroll deductions and have accumulated deductions for the Offering Period
applied to the purchase of Company Stock as of the next Purchase Date by
completing and delivering to the Administrator a new Stock Purchase Agreement
setting forth the desired change. Any change under this Section shall become
effective on the next payroll period (to the extent practical under the
Company's payroll practices) following the delivery of the new Stock Purchase
Agreement.
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<PAGE> 4
5.3 PARTICIPANT ACCOUNTS. The Company shall establish and maintain a
separate account ("Account") for each Participant. The amount of each
Participant's payroll deductions shall be credited to his Account. Subject to
Section 11.2, no interest will be paid or allowed on amounts credited to a
Participant's Account. All payroll deductions received by the Company under the
Plan are general corporate assets of the Company and may be used by the Company
for any corporate purpose. The Company is not obligated to segregate such
payroll deductions.
ARTICLE 6
GRANT OF OPTION
6.1 OPTION TO PURCHASE SHARES. On each Grant Date, each Participant
shall be granted an option to purchase at the price determined under Section 6.2
that number of shares and partial shares of Company Stock that can be purchased
or issued by the Company based upon that price with the amounts held in his
Account, subject to the limits set forth in Section 3.3. In the event that there
are amounts held in a Participant's Account that are not used to purchase
Company Stock, such amounts shall remain in the Participant's Account and shall
be eligible to purchase Company Stock in any subsequent Offering Period.
6.2 PURCHASE PRICE. The purchase price for any Offering Period shall be
the lesser of:
a. 85% of the Fair Market Value of Company Stock on the Grant Date;
or
b. 85% of the Fair Market Value of Company Stock on the Purchase
Date.
6.3 FAIR MARKET VALUE. "Fair Market Value" shall mean the value of one
share of Company Stock, determined as follows:
a. If the Company Stock is then listed or admitted to trading on the
Nasdaq National Market System or a stock exchange which reports closing sale
prices, the Fair Market Value shall be the closing sale price on the date of
valuation on the Nasdaq National Market System or principal stock exchange on
which the Company Stock is then listed or admitted to trading, or, if no closing
sale price is quoted or no sale takes place on such day, then the Fair Market
Value shall be the closing sale price of the Company Stock on the Nasdaq
National Market System or such exchange on the next preceding day on which a
sale occurred.
b. If the Company Stock is not then listed or admitted to trading on
the Nasdaq National Market System or a stock exchange which reports closing sale
prices, the Fair Market Value shall be the average of the closing bid and asked
prices of the Company Stock in the over-the-counter market on the date of
valuation.
c. If neither (a) nor (b) is applicable as of the date of valuation,
then the Fair Market Value shall be determined by the Administrator in good
faith using any reasonable method of valuation, which determination shall be
conclusive and binding on all interested parties.
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<PAGE> 5
ARTICLE 7
PURCHASE OF STOCK
7.1 EXERCISE OF OPTION.
a. On each Purchase Date, the Participant will be deemed to exercise
the option expiring on that Purchase Date. Notwithstanding the above, a
Participant may exercise any option granted to him or her under the Plan on any
Purchase Date during the Offering Period by executing and delivering the
appropriate form to the Administrator. In addition, a Participant may direct the
Company not to purchase Company Stock on the last Purchase Date in the Offering
Period, but to continue to hold and accumulate the amounts in the Participant's
account until the next Offering Period.
b. Upon exercise of an option, the Plan shall purchase on behalf of
each Participant the maximum number of full shares of Company Stock subject to
such option at the option price determined under Section 6.2 above as can be
purchased with the amounts held in each Participant's Account. Any amounts
remaining in a Participant's Account shall be held in the Participant's Account
and carried forward for the rest of the Offering Period or to the next Offering
Period.
7.2 DELIVERY OF COMPANY STOCK. The time of issuance and delivery of the
shares may be postponed for such period as may be necessary to comply with the
registration requirements under the Securities Act of 1933, as amended, the
listing requirements of any securities exchange on which the Company Stock may
then be listed, or the requirements under other laws or regulations applicable
to the issuance or sale of such shares.
ARTICLE 8
WITHDRAWAL
8.1 IN SERVICE WITHDRAWALS. At any time prior to the Purchase Date of an
Offering Period, any Participant may withdraw the amounts held in his Account by
executing and delivering to the Administrator a written notice of withdrawal on
the form provided by the Company. In such a case, the entire balance of the
Participant's Account shall be paid to the Participant, without interest, as
soon as is practicable. Upon such notification, the Participant shall cease to
participate in the Plan for the remainder of the Offering Period in which the
notice is given. A reduction in contributions to zero during any Offering Period
with an instruction to hold the funds in a Participant's Account to purchase
shares as of the Close of the Offering Period shall not be deemed a withdrawal.
Any Employee who has withdrawn under this Section shall be excluded from
participation in the Plan for the remainder of the Offering Period in which the
withdrawal occurred and the next succeeding Offering Period, but may then be
reinstated as a Participant thereafter by executing and delivering a new Stock
Purchase Agreement to the Administrator.
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<PAGE> 6
8.2 TERMINATION OF EMPLOYMENT.
a. In the event that a Participant's employment with the Company
terminates for any reason, the Participant shall cease to participate in the
Plan on the date of termination. As soon as is practical following the date of
termination, the entire balance of the Participant's Account shall be paid to
the Participant or his beneficiary in cash, without interest.
b. A Participant may file a written designation of a beneficiary who
is to receive any shares of Company Stock purchased under the Plan or any cash
from the Participant's Account in the event of his or her death subsequent to a
Purchase Date, but prior to delivery of such shares and cash. In addition, a
Participant may file a written designation of a beneficiary who is to receive
any cash from the Participant's Account under the Plan in the event of his death
prior to a Purchase Date under paragraph (a) above.
c. Any beneficiary designation under paragraph (b) above may be
changed by the Participant at any time by written notice. In the event of the
death of a Participant, the Administrator may rely upon the most recent
beneficiary designation it has on file as being the appropriate beneficiary. In
the event of the death of a Participant where no valid beneficiary designation
exists or the beneficiary has predeceased the Participant, the Administrator
shall deliver any cash or shares of Company Stock to the executor or
administrator of the estate of the Participant, or if no such executor or
administrator has been appointed to the knowledge of the Administrator, the
Administrator, in its sole discretion, may deliver such shares of Company Stock
or cash to the spouse or any one or more dependents or relatives of the
Participant, or if no spouse, dependent or relative is known to the
Administrator, then to such other person as the Administrator may designate.
ARTICLE 9
PLAN ADMINISTRATION
9.1 PLAN ADMINISTRATION.
a. Authority to control and manage the operation and administration
of the Plan shall be vested in the Board of Directors (the "Board") for the
Company, or a committee ("Committee") thereof. Members of the Committee may be
appointed from time to time by, and shall serve at the pleasure of, the Board.
As used herein, the term "Administrator" shall mean the Board or, with respect
to any matter as to which responsibility has been delegated to the Committee,
the term Administrator shall mean the Committee. The initial Administrator of
the Plan shall be the Compensation Committee of the Board of Directors. The
Administrator shall have all powers necessary to supervise the administration of
the Plan and control its operations.
b. In addition to any powers and authority conferred on the
Administrator elsewhere in the Plan or by law, the Administrator shall have the
following powers and authority:
(i) To designate agents to carry out responsibilities relating to
the Plan;
(ii) To administer, interpret, construe and apply this Plan and
to answer all questions which may arise or which may be raised under this Plan
by a Participant, his beneficiary or any other person whatsoever;
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<PAGE> 7
(iii) To establish rules and procedures from time to time for the
conduct of its business and for the administration and effectuation of its
responsibilities under the Plan; and
(iv) To perform or cause to be performed such further acts as it
may deem to be necessary, appropriate, or convenient for the operation of the
Plan.
c. Any action taken in good faith by the Administrator in the
exercise of authority conferred upon it by this Plan shall be conclusive and
binding upon a Participant and his beneficiaries. All discretionary powers
conferred upon the Administrator shall be absolute.
9.2 LIMITATION ON LIABILITY. No Employee of the Company nor member of
the Board or Committee shall be subject to any liability with respect to his
duties under the Plan unless the person acts fraudulently or in bad faith. To
the extent permitted by law, the Company shall indemnify each member of the
Board or Committee, and any other Employee of the Company with duties under the
Plan who was or is a party, or is threatened to be made a party, to any
threatened, pending or completed proceeding, whether civil, criminal,
administrative, or investigative, by reason of the person's conduct in the
performance of his duties under the Plan.
ARTICLE 10
COMPANY STOCK
10.1 LIMITATIONS ON PURCHASE OF SHARES. The maximum number of shares of
Company Stock that shall be made available for sale under the Plan shall be
300,000 shares, subject to adjustment under Section 10.4 below. The shares of
Company Stock to be sold to Participants under the Plan will be issued by the
Company. If the total number of shares of Company Stock that would otherwise be
issuable pursuant to rights granted pursuant to Section 6.1 of the Plan at the
Purchase Date exceeds the number of shares then available under the Plan, the
Administrator shall make a pro rata allocation of the shares remaining available
in as uniform and equitable manner as is practicable. In such event, the
Administrator shall give written notice of such reduction of the number of
shares to each Participant affected thereby and any unused payroll deductions
shall be returned to such Participant if necessary.
10.2 VOTING COMPANY STOCK. The Participant will have no interest or
voting right in shares to be purchased under Section 6.1 of the Plan until such
shares have been purchased.
10.3 REGISTRATION OF COMPANY STOCK. Shares to be delivered to a
Participant under the Plan will be registered in the name of the Participant
unless designated otherwise by the Participant.
10.4 CHANGES IN CAPITALIZATION OF THE COMPANY. Subject to any required
action by the stockholders of the Company, the number of shares of Company Stock
covered by each right under the Plan which has not yet been exercised and the
number of shares of Company Stock which have been authorized for issuance under
the Plan but have not yet been placed under rights or which have been returned
to the Plan upon the cancellation of a right, as well as the purchase price per
share of Company Stock covered by each right under the Plan which has not yet
been exercised, shall be proportionately adjusted for any increase or decrease
in the number of issued shares of Company Stock resulting from a stock split,
stock dividend, spin-off, reorganization, recapitalization, merger,
consolidation, exchange of shares or the like. Such adjustment shall be made by
the Administrator, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issue by the Company of
shares of stock of any class, or securities convertible
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into shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of Company
Stock subject to any option granted hereunder.
10.5 MERGER OF COMPANY. In the event that the Company at any time
proposes to merge into, consolidate with or enter into any other reorganization
pursuant to which the Company is not the surviving entity (including the sale of
substantially all of its assets or a "reverse" merger in which the Company is
the surviving entity), the Plan shall terminate, unless provision is made in
writing in connection with such transaction for the continuance of the Plan and
for the assumption of options theretofore granted, or the substitution for such
options of new options covering the shares of a successor corporation, with
appropriate adjustments as to number and kind of shares and prices, in which
event the Plan and the options theretofore granted or the new options
substituted therefor, shall continue in the manner and under the terms so
provided. If such provision is not made in such transaction for the continuance
of the Plan and the assumption of options theretofore granted or the
substitution for such options of new options covering the shares of a successor
corporation, then the Administrator shall cause written notice of the proposed
transaction to be given to the persons holding options not less than 10 days
prior to the anticipated effective date of the proposed transaction, and,
concurrent with the effective date of the proposed transaction, such options
shall be exercised automatically in accordance with Section 7.1 as if such
effective date were a Purchase Date of the applicable Offering Period unless a
Participant withdraws from the Plan as provided in Section 8.1.
ARTICLE 11
MISCELLANEOUS MATTERS
11.1 AMENDMENT AND TERMINATION. The Plan shall terminate on December 31,
2008. Since future conditions affecting the Company cannot be anticipated or
foreseen, the Company reserves the right to amend, modify, or terminate the Plan
at any time. Upon termination of the Plan, all benefits shall become payable
immediately. Notwithstanding the foregoing, no such amendment or termination
shall affect rights previously granted, nor may an amendment make any change in
any right previously granted which adversely affects the rights of any
Participant. In addition, no amendment may be made without prior approval of the
stockholders of the Company if such amendment would:
a. Increase the number of shares of Company Stock that may be
issued under the Plan;
b. Materially modify the requirements as to eligibility for
participation in the Plan; or
c. Materially increase the benefits which accrue to Participants
under the Plan.
11.2 STOCKHOLDER APPROVAL. Continuance of the Plan and the effectiveness
of any right granted hereunder shall be subject to approval by the stockholders
of the Company, within six (6) months before or after the date the Plan is
adopted by the Board. In the event the stockholders of the Company do not
approve the Plan, the Company shall return to each Participant the funds paid by
such Participant to purchase options, with interest at a rate of five percent
(5%).
11.3 BENEFITS NOT ALIENABLE. Benefits under the Plan may not be assigned
or alienated, whether voluntarily or involuntarily. Any attempt at assignment,
transfer, pledge or other
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disposition shall be without effect, except that the Company may treat such act
as an election to withdraw funds in accordance with Article 8.
11.4 NO ENLARGEMENT OF EMPLOYEE RIGHTS. This Plan is strictly a
voluntary undertaking on the part of the Company and shall not be deemed to
constitute a contract between the Company and any Employee or to be
consideration for, or an inducement to, or a condition of, the employment of any
Employee. Nothing contained in the Plan shall be deemed to give the right to any
Employee to be retained in the employ of the Company or to interfere with the
right of the Company to discharge any Employee at any time.
11.5 GOVERNING LAW. To the extent not preempted by Federal law, all
legal questions pertaining to the Plan shall be determined in accordance with
the laws of the State of California.
11.6 NON-BUSINESS DAYS. When any act under the Plan is required to be
performed on a day that falls on a Saturday, Sunday or legal holiday, that act
shall be performed on the next succeeding day which is not a Saturday, Sunday or
legal holiday. Notwithstanding the above, Fair Market Value shall be determined
in accordance with Section 6.3.
11.7 COMPLIANCE WITH SECURITIES LAWS. Notwithstanding any provision of
the Plan, the Administrator shall administer the Plan in such a way to ensure
that the Plan at all times complies with any requirements of Federal Securities
Laws. For example, affiliates may be required to make irrevocable elections in
accordance with the rules set forth under Section 16b-3 of the Securities
Exchange Act of 1934.
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EXHIBIT 5.1
STRADLING YOCCA CARLSON & RAUTH
A PROFESSIONAL CORPORATION
ATTORNEYS AT LAW
660 NEWPORT CENTER DRIVE, SUITE 1600
NEWPORT BEACH, CALIFORNIA 92660-6441
TELEPHONE (949) 725-4000
FACSIMILE (949) 725-4100
SAN FRANCISCO OFFICE
44 MONTGOMERY STREET, SUITE 2950
SAN FRANCISCO, CALIFORNIA 94104
TELEPHONE (415) 765-9180
FACSIMILE (415) 765-9187
October 30, 1998
QLogic Corporation
3545 Harbor Boulevard
Costa Mesa, California 92626
RE: Registration Statement on Form S-8
Ladies and Gentlemen:
At your request, we have examined the form of Registration Statement on
Form S-8 (the "Registration Statement") being filed by QLogic Corporation, a
Delaware corporation (the "Company"), with the Securities and Exchange
Commission in connection with the registration under the Securities Act of 1933,
as amended, of an aggregate of 675,000 shares of the Company's common stock,
$0.10 par value ("Common Stock"), issuable under the Company's Employee Stock
Purchase Plan and Stock Awards Plan, as amended (the "Plans").
We have examined the proceedings heretofore taken and are familiar with
the additional proceedings proposed to be taken by the Company in connection
with the authorization, issuance and sale of the securities referred to above.
Based on the foregoing, it is our opinion that the 675,000 shares of
Common Stock, when issued under the Plans and against full payment therefor in
accordance with the respective terms and conditions of the Plans, will be
legally and validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ STRADLING YOCCA CARLSON & RAUTH
-----------------------------------
STRADLING YOCCA CARLSON & RAUTH
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EXHIBIT 23.2
The Board of Directors
QLogic Corporation:
We consent to incorporation by reference in the registration statement on Form
S-8 of QLogic Corporation of our report dated May 12, 1998, relating to the
consolidated balance sheets of QLogic Corporation and subsidiary as of March 29,
1998, and March 30, 1997, and the related consolidated statements of income,
stockholders' equity, and cash flows for each of the years in the three-year
period ended March 29, 1998, and all related schedules, which report appears in
the March 29, 1998, annual report on Form 10-K of QLogic Corporation.
/s/ KPMG Peat Marwick LLP
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KPMG Peat Marwick LLP
Orange County, California
October 30, 1998
