As filed with the Securities and Exchange Commission on May 23, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SCG Holding Corporation
(Exact Name of Registrant as Specified in Its Charter)
Delaware 36-3840979
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
5005 E. McDowell Road
Phoenix, AZ 85008
(602) 244-6600
(Address of Registrant's Principal Executive Offices)
SCG HOLDING CORPORATION
2000 STOCK INCENTIVE PLAN
(Full Title of the Plan)
-----------------
George H. Cave, Esq.
SCG Holding Corporation
5005 E. McDowell Road
Phoenix, AZ 85008
(602) 244-5226
with a copy to:
Arthur H. Kohn, Esq.
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, NY 10006
(Name, Address, and Telephone Number, Including Area Code, of Agent for Service)
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CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
Title of each class Amount to Proposed Proposed Amount
of securities be registered (1) maximum maximum of
to be registered offering aggregate registration
price per offering price fee
share (2)
- --------------------------------------------------------------------------------
Common Stock, par
value $.01 per share 7,000,000 $21.4375 $150,062,500 $39,616.50
- --------------------------------------------------------------------------------
(1) Together with an indeterminate number of shares that may be necessary to
adjust the number of shares reserved for issuance pursuant to the SCG
Holding Corporation 2000 Stock Incentive Plan as the result of a stock
split, stock dividend or similar adjustment of the outstanding common
stock of SCG Holding Corporation.
(2) With respect to shares of common stock of SCG Holding Corporation (the
"Shares") covered by options, estimated solely for the purposes of
calculating the registration fee with respect to the Shares being
registered hereby pursuant to Rule 457 under the Securities Act of 1933,
as amended (the "Securities Act") and based upon the average of the high
and low prices of the common shares of the Corporation as reported on the
NASDAQ on May 22, 2000.
The contents of the Corporation's Registration Statement on Form S-8 filed
with the Securities and Exchange Commission (the "Commission") on April 6, 2000
(Registration No. 333-34130) are incorporated by reference in this Registration
Statement.
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents, which previously have been filed by SCG Holding
Corporation (the "Corporation" or the "Registrant") with the Commission, are
incorporated herein by reference and made a part hereof:
(i) The prospectus of the Corporation, dated May 1, 2000, filed pursuant to
Rule 424(b) under the Securities Act of 1933, as amended (the "Securities Act"),
relating to the Corporation's Registration Statement on Form S-1 (Registration
No. 333-30670) filed with the Commission on February 18, 2000 as amended by
Amendment No. 1, Amendment No. 2 and Amendment No. 3 thereto filed by the
Corporation under the Securities Act with the Commission on March 24, 2000,
April 7, 2000, and April 25, 2000, respectively;
(ii) The Corporation's Annual Report on Form 10-K, filed with the
Commission on May 1, 2000;
(iii) The Corporation's Quarterly Report on Form 10-Q for the quarterly
period ended April 1, 2000, filed with the Commission on May 15, 2000;
(iv) The Corporation's Current Reports on Form 8-K, filed with the
Commission on February 25, 2000, April 10, 2000 and April 25, 2000;
(v) The description of the Shares contained in the Corporation's
registration statement on Form 8-A, filed with the Commission on April 21, 2000;
and
(vi) All other reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), since the end
of the fiscal year covered by registration document referred to in (i) above.
All reports and other documents filed by the Corporation pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Registration Statement and prior to the filing of a post-effective
amendment hereto, which indicates that all securities offered hereunder have
been sold or which deregisters all securities remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents.
For purposes of this Registration Statement, any document or any statement
contained in a document incorporated or deemed to be incorporated herein by
reference shall be deemed to be modified or superseded to the extent that a
subsequently filed document or a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated herein
by reference modifies or supersedes such document or such 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 8. Exhibits.
The following exhibits are filed with or incorporated by reference into
this Registration Statement (numbering corresponds to Exhibit Table in Item 601
of Regulation S-K):
4.1 SCG Holding Corporation 2000 Stock Incentive Plan (As Adopted by the
Board of Directors on February 17, 2000, and As Amended and Restated
April 21, 2000)
4.2 Amended and Restated Certificate of Incorporation of SCG Holding
Corporation (filed as Exhibit 3.1 to the Corporation's Amendment No. 3
to Form S-1 Registration Statement (No. 333-30670) and incorporated
herein by reference)
4.3 By-Laws of SCG Holding Corporation (filed as Exhibit 3.2 to the
Corporation's Amendment No. 1 to Form S-1 Registration Statement (No.
333-30670) and incorporated herein by reference)
5.1 Opinion of George H. Cave, Esq., regarding the validity of the
securities being registered
23.1 Consent of KPMG LLP, Independent Auditors
23.2 Consent of PricewaterhouseCoopers LLP, Independent Accountants
23.3 Consent of George H. Cave, Esq. (included in Exhibit 5.1)
24.1 Power of Attorney (included on signature page)
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of the prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the Registrant pursuant to Section 13 or 15(d) of the
Exchange Act that are incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(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 15(d) of the Exchange
Act (and, where applicable, each filing of the employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(h) 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 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-8, and has duly caused this Registration
Statement to be signed on its behalf, thereunto duly authorized, in the City of
Phoenix, State of Arizona, on this day of May 23, 2000.
SCG HOLDING CORPORATION
By: /s/ Steven Hanson
------------------------------
Steven Hanson, Chief Executive
Officer and Member, Board
of Directors
POWER OF ATTORNEY
Each person whose signature appears below on this Registration Statement
hereby constitutes and appoints Steven Hanson, James Thorburn and Dario
Sacomani, and each of them, with full power to act without the other, his true
and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities (unless revoked in writing) to sign any and all amendments (including
post-effective amendments thereto) to this Registration Statement to which this
power of attorney is attached, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting to such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as full to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that such attorneys-in-fact and agents or any of them, or their
or his substitute or substitutes, may lawfully 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 indicated, on May 23, 2000.
Signature Title
--------- -----
/s/ Steven Hanson
- --------------------- President, Chief Executive Officer and Director
Steven Hanson
/s/ Dario Sacomani
- --------------------- Senior Vice President, Chief Financial Officer
Dario Sacomani and Chief Accounting Officer
/s/ Curtis J. Crawford
- --------------------- Chairman of the Board of Directors
Curtis J. Crawford
/s/ David Bonderman
- --------------------- Director
David Bonderman
/s/ Richard W. Boyce
- --------------------- Director
Richard W. Boyce
/s/ Justin T. Chang
- --------------------- Director
Justin T. Chang
/s/ William A. Franke
- --------------------- Director
William A. Franke
/s/ David M. Stanton
- --------------------- Director
David M. Stanton
/s/ Jerome N. Gregoire
- --------------------- Director
Jerome N. Gregoire
/s/ Alberto Hugo-Martinez
- --------------------- Director
Alberto Hugo-Martinez
EXHIBIT INDEX
Exhibit Description Method of Filing Sequentially
Number Numbered Page
Location
4.1 SCG Holding Corporation 2000 Stock Incentive Plan, (As Filed herewith
Adopted by the Board of Directors on February 17, 2000, 9
and As Amended and Restated April 21, 2000)
4.2 Amended and Restated Certificate of Incorporation of SCG Filed as Exhibit 3.1 --
Holding Corporation to the Corporation's
Amendment No. 3 to
Form S-1 Registration
Statement (No.
333-30670) and
incorporated herein by
reference
4.3 By-Laws of SCG Holding Corporation Filed as Exhibit 3.2 --
to the Corporation's
Amendment No. 1 to
Form S-1 Registration
Statement (No.
333-30670) and
incorporated herein by
reference
5.1 Opinion of George H. Cave, Esq., regarding the validity of Filed herewith 28
the securities being registered
23.1 Consent of KPMG LLP, Independent Auditors Filed herewith 29
23.2 Consent of PricewaterhouseCoopers LLP, Independent Filed herewith 30
Accountants
23.3 Consent of George H. Cave, Esq. (included in Exhibit 5.1) Filed herewith 28
24.1 Power of Attorney (included on signature page) Filed herewith 6
SCG HOLDING CORPORATION
2000 STOCK INCENTIVE PLAN
(As Adopted by the Board of Directors on February 17, 2000; Amended
and Restated April 21, 2000)
ARTICLE 1
PURPOSE
1.1 GENERAL. The purpose of the SCG Holding Corporation 2000 Stock
Incentive Plan (the "Plan") is to promote the success and enhance the value of
SCG Holding Corporation (the "Company") by linking the personal interests of its
members of the Board, employees, officers, and executives of, and consultants
and advisors to, the Company to those of Company stockholders and by providing
such individuals with an incentive for outstanding performance in order to
generate superior returns to shareholders of the Company. The Plan is further
intended to provide flexibility to the Company in its ability to motivate,
attract, and retain the services of members of the Board, employees, officers,
and executives of, and consultants and advisors to, the Company upon whose
judgment, interest, and special effort the successful conduct of the Company's
operation is largely dependent.
ARTICLE 2
EFFECTIVE DATE
2.1 EFFECTIVE DATE. The Plan is effective as of the date the Plan is
approved by the Board (the "Effective Date"). Within 12 months of the Effective
Date, the Plan must be approved by the Company's shareholders. The Plan will be
deemed to be approved by the shareholders if it receives the affirmative vote of
the holders of a majority of the shares of stock of the Company present or
represented and entitled to vote at a meeting duly held in accordance with the
applicable provisions of the Company's Bylaws or by written consent of a
majority of the Company's shareholders in lieu of a meeting. Any awards granted
under the Plan prior to shareholder approval are effective when made (unless the
Committee specifies otherwise at the time of grant), but no Award may be
exercised or settled and no restrictions relating to any Award may lapse before
the Plan is approved by the shareholders as provided above. If the shareholders
fail to approve the Plan, any Award previously made shall be automatically
canceled without any further act.
ARTICLE 3
DEFINITIONS AND CONSTRUCTION
3.1 DEFINITIONS. When a word or phrase appears in this Plan with the
initial letter capitalized, and the word or phrase does not commence a sentence,
the word or phrase shall generally be given the meaning ascribed to it in this
Section or in Sections 1.1 or 2.1 unless a clearly different meaning is required
by the context. The following words and phrases shall have the following
meanings:
(a) "Award" means any Option, Stock Appreciation Right, Restricted Stock
Award, Performance Share Award, Performance-Based Award, or Take Ownership Grant
granted to a Participant under the Plan.
(b) "Award Agreement" means any written agreement, contract, or other
instrument or document evidencing an Award.
(c) "Board" means the Board of Directors of the Company.
(d) "Cause" means (except as otherwise provided in an Award Agreement)
if the Committee, in its reasonable and good faith discretion, determines that
the Participant (i) fails to substantially perform his duties (other than as a
result of Disability), after the Board or the executive to which the Participant
reports delivers to the Participant a written demand for substantial performance
that specifically identifies the manner in which the Participant has not
substantially performed his duties; (ii) engages in willful misconduct or gross
negligence that is materially injurious to the Company or a Subsidiary; (iii)
breaches his duty of loyalty to the Company or a Subsidiary; (iv) unauthorized
removal from the premises of the Company or a Subsidiary of a document (of any
media or form) relating to the Company or a Subsidiary or the customers of the
Company or a Subsidiary; or (v) has committed a felony or a serious crime
involving moral turpitude. Any rights the Company or any of its Subsidiaries may
have hereunder in respect of the events giving rise to Cause shall be in
addition to the rights the Company or any of its Subsidiaries may have under any
other agreement with the Participant or at law or in equity. If, subsequent to a
Participant's termination of employment or services, it is discovered that such
Participant's employment or services could have been terminated for Cause, the
Participant's employment or services shall, at the election of the Board, in its
sole discretion, be deemed to have been terminated for Cause retroactively to
the date the events giving rise to Cause occurred.
(e) "Change of Control" shall mean the occurrence of any of the
following events: (i) any sale, lease, exchange, or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company or the Operating Subsidiary to any Person or group of
related persons for purposes of Section 13(d) of the Exchange Act (a "Group"),
together with any affiliates thereof other than TPG Semiconductor Holdings LLC,
TPG Partners II, L.P., or any of their affiliates (hereafter collectively
referred to as "TPG"); (ii) the approval by the holders of Stock and the
consummation of any plan or proposal for the liquidation or dissolution of the
Company; (iii) (A) any Person or Group (other than TPG) shall become the
beneficial owner, directly or indirectly, of shares representing more than 25%
of the aggregate voting power of the issued and outstanding stock entitled to
vote in the election of directors (the "Voting Stock") of the Company and such
Person or Group has the power and authority to vote such shares and (B) TPG
beneficially owns (within the meaning of Section 13(d) of the Exchange Act),
directly or indirectly, in the aggregate a lesser percentage of the Voting Stock
of the Company than such other Person or Group; (iv) the actual replacement of a
majority of the Board over a two-year period from the individual directors who
constituted the Board at the beginning of such period, and such replacement
shall not have been approved by a vote of at least a majority of the Board then
still in office who either were members of such Board at the beginning of such
period or whose election as a member of such Board was previously so approved or
who were nominated by, or designees of, TPG; (v) any Person or Group other than
TPG shall have acquired shares of Voting Stock of the Company such that such
Person or Group has the power and authority to elect a majority of the members
of the Board of Directors of the Company; or (vi) the consummation of a merger
or consolidation of the Company with another entity in which holders of the
Stock immediately prior to the consummation of the transaction hold, directly or
indirectly, immediately following the consummation of the transaction, 50% or
less of the common equity interest in the surviving corporation in such
transaction. Notwithstanding the foregoing, in no event shall a Change of
Control be deemed to have occurred as a result of an initial public offering of
the Stock.
(f) "Code" means the Internal Revenue Code of 1986, as amended.
(g) "Committee" means the committee of the Board described in Article 4.
(h) "Covered Employee" means an Employee who is a "covered employee"
within the meaning of Section 162(m) of the Code.
(i) "Disability" shall mean (unless otherwise defined in an employment
agreement between the Company or any of its Subsidiaries and the Participant or
in the Participant's Award Agreement) any illness or other physical or mental
condition of a Participant which renders the Participant incapable of performing
his customary and usual duties for the Company, or any medically determinable
illness or other physical or mental condition resulting from a bodily injury,
disease or mental disorder which in the judgment of the Committee is permanent
and continuous in nature. The Committee may require such medical or other
evidence as it deems necessary to judge the nature and permanency of the
Participant's condition.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(k) "Fair Market Value" means, as of any given date, the fair market
value of Stock on a particular date determined by such methods or procedures as
may be established from time to time by the Committee. Unless otherwise
determined by the Committee, the Fair Market Value of Stock as of any date shall
be the closing price for the Stock as reported on the NASDAQ National Market
System (or on any national securities exchange on which the Stock is then
listed) for that date or, if no closing price is reported for that date, the
closing price on the next preceding date for which a closing price was reported.
(l) "Incentive Stock Option" means an Option that is intended to meet
the requirements of Section 422 of the Code or any successor provision thereto.
(m) "Non-Employee Director" means a member of the Board who qualifies as
a "Non-Employee Director" as defined in Rule 16b-3(b)(3) of the Exchange Act, or
any successor definition adopted by the Board.
(n) "Non-Qualified Stock Option" means an Option that is not intended to
be an Incentive Stock Option.
(o) "Operating Subsidiary" means Semiconductor Components Industries,
LLC.
(p) "Option" means a right granted to a Participant under Article 7 or
Article 12 of the Plan to purchase Stock at a specified price during specified
time periods. An Option may be either an Incentive Stock Option or a
Non-Qualified Stock Option.
(q) "Participant" means a person who, as a member of the Board,
employee, officer, or executive of, or consultant or advisor providing services
to, the Company or any Subsidiary, has been granted an Award under the Plan.
(r) "Performance-Based Awards" means the Performance Share Awards and
Restricted Stock Awards granted to selected Covered Employees pursuant to
Articles 9 and 10, but which are subject to the terms and conditions set forth
in Article 11. All Performance-Based Awards are intended to qualify as
"performance-based compensation" under Section 162(m) of the Code.
(s) "Performance Criteria" means the criteria that the Committee selects
for purposes of establishing the Performance Goal or Performance Goals for a
Participant for a Performance Period. The Performance Criteria that will be used
to establish Performance Goals are limited to the following: pre- or after-tax
net earnings, sales growth, operating earnings, operating cash flow, return on
net assets, return on stockholders' equity, return on assets, return on capital,
Stock price growth, stockholder returns, gross or net profit margin, earnings
per share, price per share of Stock, and market share, any of which may be
measured either in absolute terms or as compared to any incremental increase or
as compared to results of a peer group. The Committee shall, within the time
prescribed by Section 162(m) of the Code, define in an objective fashion the
manner of calculating the Performance Criteria it selects to use for such
Performance Period for such Participant.
(t) "Performance Goals" means, for a Performance Period, the goals
established in writing by the Committee for the Performance Period based upon
the Performance Criteria. Depending on the Performance Criteria used to
establish such Performance Goals, the Performance Goals may be expressed in
terms of overall Company performance or the performance of a division, business
unit, or an individual. The Committee, in its discretion, may, within the time
prescribed by Section 162(m) of the Code, adjust or modify the calculation of
Performance Goals for such Performance Period in order to prevent the dilution
or enlargement of the rights of Participants (i) in the event of, or in
anticipation of, any unusual or extraordinary corporate item, transaction,
event, or development, or (ii) in recognition of, or in anticipation of, any
other unusual or nonrecurring events affecting the Company, or the financial
statements of the Company, or in response to, or in anticipation of, changes in
applicable laws, regulations, accounting principles, or business conditions.
(u) "Performance Period" means the one or more periods of time, which
may be of varying and overlapping durations, as the Committee may select, over
which the attainment of one or more Performance Goals will be measured for the
purpose of determining a Participant's right to, and the payment of, a
Performance-Based Award.
(v) "Performance Share" means a right granted to a Participant under
Article 9, to receive cash, Stock, or other Awards, the payment of which is
contingent upon achieving certain performance goals established by the
Committee.
(w) "Plan" means the SCG Holding Corporation 2000 Stock Incentive Plan,
as amended.
(x) "Restricted Stock Award" means Stock granted to a Participant under
Article 10 that is subject to certain restrictions and to risk of forfeiture.
(y) "Stock" means the common stock of the Company and such other
securities of the Company that may be substituted for Stock pursuant to Article
14.
(z) "Stock Appreciation Right" or "SAR" means a right granted to a
Participant under Article 8 to receive a payment equal to the difference between
the Fair Market Value of a share of Stock as of the date of exercise of the SAR
over the grant price of the SAR, all as determined pursuant to Article 8.
(aa) "Subsidiary" means any corporation or other entity of which a
majority of the outstanding voting stock or voting power is beneficially owned
directly or indirectly by the Company.
(bb) "Take Ownership Grant" means the Option granted to each eligible
Participant pursuant to Article 12.
ARTICLE 4
ADMINISTRATION
4.1 COMMITTEE. The Plan shall be administered by the Board or a Committee
appointed by, and which serves at the discretion of, the Board. If the Board
appoints a Committee, the Committee shall consist of at least two individuals,
each of whom qualifies as (i) a Non-Employee Director, and (ii) an "outside
director" under Code Section 162(m) and the regulations issued thereunder.
Reference to the Committee shall refer to the Board if the Board does not
appoint a Committee.
4.2 ACTION BY THE COMMITTEE. A majority of the Committee shall constitute a
quorum. The acts of a majority of the members present at any meeting at which a
quorum is present, and acts approved in writing by a majority of the Committee
in lieu of a meeting, shall be deemed the acts of the Committee. Each member of
the Committee is entitled to, in good faith, rely or act upon any report or
other information furnished to that member by any officer or other employee of
the Company or any Subsidiary, the Company's independent certified public
accountants, or any executive compensation consultant or other professional
retained by the Company to assist in the administration of the Plan.
4.3 AUTHORITY OF COMMITTEE. Subject to any specific designation in the
Plan, the Committee has the exclusive power, authority and discretion to:
(a) Designate Participants to receive Awards;
(b) Determine the type or types of Awards to be granted to each
Participant;
(c) Determine the number of Awards to be granted and the number of
shares of Stock to which an Award will relate;
(d) Determine the terms and conditions of any Award granted under the
Plan including but not limited to, the exercise price, grant price, or purchase
price, any restrictions or limitations on the Award, any schedule for lapse of
forfeiture restrictions or restrictions on the exercisability of an Award, and
accelerations or waivers thereof, based in each case on such considerations as
the Committee in its sole discretion determines; provided, however, that the
Committee shall not have the authority to accelerate the vesting or waive the
forfeiture of any Performance-Based Awards;
(e) Amend, modify, or terminate any outstanding Award, with the
Participant's consent unless the Committee has the authority to amend, modify,
or terminate an Award without the Participant's consent under any other
provision of the Plan.
(f) Determine whether, to what extent, and under what circumstances an
Award may be settled in, or the exercise price of an Award may be paid in, cash,
Stock, other Awards, or other property, or an Award may be canceled, forfeited,
or surrendered;
(g) Prescribe the form of each Award Agreement, which need not be
identical for each Participant;
(h) Decide all other matters that must be determined in connection with
an Award;
(i) Establish, adopt, or revise any rules and regulations as it may deem
necessary or advisable to administer the Plan; and
(j) Interpret the terms of, and any matter arising under, the Plan or
any Award Agreement;
(k) Make all other decisions and determinations that may be required
under the Plan or as the Committee deems necessary or advisable to administer
the Plan.
4.4 DECISIONS BINDING. The Committee's interpretation of the Plan, any
Awards granted under the Plan, any Award Agreement and all decisions and
determinations by the Committee with respect to the Plan are final, binding, and
conclusive on all parties.
ARTICLE 5
SHARES SUBJECT TO THE PLAN
5.1 NUMBER OF SHARES. Subject to adjustment provided in Section 14.1, the
aggregate number of shares of Stock reserved and available for grant under the
Plan shall be 10,000,000.
5.2 LAPSED AWARDS. To the extent that an Award terminates, expires, or
lapses for any reason, any shares of Stock subject to the Award will again be
available for the grant of an Award under the Plan.
5.3 STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award may
consist, in whole or in part, of authorized and unissued Stock, treasury Stock
or Stock purchased on the open market.
5.4 LIMITATION ON NUMBER OF SHARES SUBJECT TO AWARDS. Notwithstanding any
provision in the Plan to the contrary, and subject to the adjustment in Section
14.1, the maximum number of shares of Stock with respect to one or more Awards
that may be granted to any one Participant during the Company's fiscal year
shall be 1,000,000.
ARTICLE 6
ELIGIBILITY AND PARTICIPATION
6.1 ELIGIBILITY.
(a) GENERAL. Persons eligible to participate in this Plan include all
members of the Board, employees, officers, and executives of, and consultants
and advisors to, the Company or a Subsidiary, as determined by the Committee.
(b) FOREIGN PARTICIPANTS. Subject to the provisions of Article 16 of the
Plan, in order to assure the viability of Awards granted to Participants
employed in foreign countries, the Committee may provide for such special terms
as it may consider necessary or appropriate to accommodate differences in local
law, tax policy, or custom. Moreover, the Committee may approve such supplements
to, or amendments, restatements, or alternative versions of the Plan as it may
consider necessary or appropriate for such purposes without thereby affecting
the terms of the Plan as in effect for any other purpose; provided, however,
that no such supplements, amendments, restatements, or alternative versions
shall increase the share limitations contained in Section 5.1 of the Plan.
6.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from among all eligible individuals,
those to whom Awards shall be granted and shall determine the nature and amount
of each Award. No individual shall have any right to be granted an Award under
this Plan.
ARTICLE 7
STOCK OPTIONS
7.1 GENERAL. The Committee is authorized to grant Options to Participants
on the following terms and ------- conditions:
(a) EXERCISE PRICE. The exercise price per share of Stock under an
Option shall be determined by the Committee and set forth in the Award
Agreement. It is the intention under the Plan that the exercise price for any
Option shall not be less than the Fair Market Value as of the date of grant;
provided, however that the Committee may, in its discretion, grant Options
(other than Options that are intended to be Incentive Stock Options or Options
that are intended to qualify as performance-based compensation under Code
Section 162(m)) with an exercise price of less than Fair Market Value on the
date of grant.
(b) TIME AND CONDITIONS OF EXERCISE. The Committee shall determine the
time or times at which an Option may be exercised in whole or in part. The
Committee shall also determine the performance or other conditions, if any, that
must be satisfied before all or part of an Option may be exercised. Unless
otherwise provided in an Award Agreement, an Option will lapse immediately if a
Participant's employment or services are terminated for Cause.
(c) PAYMENT. The Committee shall determine the methods by which the
exercise price of an Option may be paid, the form of payment, including, without
limitation, cash, promissory note, shares of Stock (through actual tender or by
attestation), or other property (including broker-assisted "cashless exercise"
arrangements), and the methods by which shares of Stock shall be delivered or
deemed to be delivered to Participants.
(d) EVIDENCE OF GRANT. All Options shall be evidenced by a written Award
Agreement between the Company and the Participant. The Award Agreement shall
include such additional provisions as may be specified by the Committee.
7.2 INCENTIVE STOCK OPTIONS. Incentive Stock Options shall be granted only
to employees and the terms of any Incentive Stock Options granted under the Plan
must comply with the following additional rules:
(a) EXERCISE PRICE. The exercise price per share of Stock shall be set
by the Committee, provided that the exercise price for any Incentive Stock
Option may not be less than the Fair Market Value as of the date of the grant.
(b) EXERCISE. In no event, may any Incentive Stock Option be exercisable
for more than ten years from the date of its grant.
(c) LAPSE OF OPTION. An Incentive Stock Option shall lapse under the
following circumstances.
(1) The Incentive Stock Option shall lapse ten years from the date
it is granted, unless an earlier time is set in the Award Agreement.
(2) The Incentive Stock Option shall lapse upon termination of
employment for Cause or for any other reason, other than the Participant's
death or Disability, unless otherwise provided in the Award Agreement.
(3) If the Participant terminates employment on account of
Disability or death before the Option lapses pursuant to paragraph (1) or
(2) above, the Incentive Stock Option shall lapse, unless it is previously
exercised, on the earlier of (i) the date on which the Option would have
lapsed had the Participant not become Disabled or lived and had his
employment status (i.e., whether the Participant was employed by the
Company on the date of his Disability or death or had previously terminated
employment) remained unchanged; or (ii) 12 months after the date of the
Participant's termination of employment on account of Disability or death.
Upon the Participant's Disability or death, any Incentive Stock Options
exercisable at the Participant's Disability or death may be exercised by
the Participant's legal representative or representatives, by the person or
persons entitled to do so under the Participant's last will and testament,
or, if the Participant fails to make testamentary disposition of such
Incentive Stock Option or dies intestate, by the person or persons entitled
to receive the Incentive Stock Option under the applicable laws of descent
and distribution.
(d) INDIVIDUAL DOLLAR LIMITATION. The aggregate Fair Market Value
(determined as of the time an Award is made) of all shares of Stock with respect
to which Incentive Stock Options are first exercisable by a Participant in any
calendar year may not exceed $100,000.00 or such other limitation as imposed by
Section 422(d) of the Code, or any successor provision. To the extent that
Incentive Stock Options are first exercisable by a Participant in excess of such
limitation, the excess shall be considered Non-Qualified Stock Options.
(e) TEN PERCENT OWNERS. An Incentive Stock Option shall be granted to
any individual who, at the date of grant, owns stock possessing more than ten
percent of the total combined voting power of all classes of Stock of the
Company only if such Option is granted at a price that is not less than 110% of
Fair Market Value on the date of grant and the Option is exercisable for no more
than five years from the date of grant.
(f) EXPIRATION OF INCENTIVE STOCK OPTIONS. No Award of an Incentive
Stock Option may be made pursuant to
this Plan after the tenth anniversary of the Effective Date.
(g) RIGHT TO EXERCISE. During a Participant's lifetime, an Incentive
Stock Option may be exercised only by the Participant.
ARTICLE 8
STOCK APPRECIATION RIGHTS
8.1 GRANT OF SARs. The Committee is authorized to grant SARs to
Participants on the following terms and conditions:
(a) RIGHT TO PAYMENT. Upon the exercise of a Stock Appreciation Right,
the Participant to whom it is granted has the right to receive the excess, if
any, of:
(1) The Fair Market Value of a share of Stock on the date of
exercise; over
(2) The grant price of the Stock Appreciation Right as determined by
the Committee, which shall not be less than the Fair Market Value of a
share of Stock on the date of grant in the case of any SAR related to any
Incentive Stock Option.
(b) OTHER TERMS. All awards of Stock Appreciation Rights shall be
evidenced by an Award Agreement. The terms, methods of exercise, methods of
settlement, form of consideration payable in settlement, and any other terms and
conditions of any Stock Appreciation Right shall be determined by the Committee
at the time of the grant of the Award and shall be reflected in the Award
Agreement.
ARTICLE 9
PERFORMANCE SHARES
9.1 GRANT OF PERFORMANCE SHARES. The Committee is authorized to grant
Performance Shares to Participants on such terms and conditions as may be
selected by the Committee. The Committee shall have the complete discretion to
determine the number of Performance Shares granted to each Participant. All
Awards of Performance Shares shall be evidenced by an Award Agreement.
9.2 RIGHT TO PAYMENT. A grant of Performance Shares gives the Participant
rights, valued as determined by the Committee, and payable to, or exercisable
by, the Participant to whom the Performance Shares are granted, in whole or in
part, as the Committee shall establish at grant or thereafter. Subject to the
terms of the Plan, the Committee shall set performance goals and other terms or
conditions to payment of the Performance Shares in its discretion which,
depending on the extent to which they are met, will determine the number and
value of Performance Shares that will be paid to the Participant.
9.3 OTHER TERMS. Performance Shares may be payable in cash, Stock, or other
property, and have such other terms and conditions as determined by the
Committee and reflected in the Award Agreement.
ARTICLE 10
RESTRICTED STOCK AWARDS
10.1 GRANT OF RESTRICTED STOCK. The Committee is authorized to make Awards
of Restricted Stock to Participants in such amounts and subject to such terms
and conditions as determined by the Committee. All Awards of Restricted Stock
shall be evidenced by a Restricted Stock Award Agreement.
10.2 ISSUANCE AND RESTRICTIONS. Restricted Stock shall be subject to such
restrictions on transferability and other restrictions as the Committee may
impose (including, without limitation, limitations on the right to vote
Restricted Stock or the right to receive dividends on the Restricted Stock).
These restrictions may lapse separately or in combination at such times, under
such circumstances, in such installments, or otherwise, as the Committee
determines at the time of the grant of the Award or thereafter.
10.3 FORFEITURE. Except as otherwise determined by the Committee at the
time of the grant of the Award or thereafter, upon termination of employment
during the applicable restriction period, Restricted Stock that is at that time
subject to restrictions shall be forfeited, provided, however, that the
Committee may provide in any Restricted Stock Award Agreement that restrictions
or forfeiture conditions relating to Restricted Stock will be waived in whole or
in part in the event of terminations resulting from specified causes, and the
Committee may in other cases waive in whole or in part restrictions or
forfeiture conditions relating to Restricted Stock.
10.4 CERTIFICATES FOR RESTRICTED STOCK. Restricted Stock granted under the
Plan may be evidenced in such manner as the Committee shall determine. If
certificates representing shares of Restricted Stock are registered in the name
of the Participant, certificates must bear an appropriate legend referring to
the terms, conditions, and restrictions applicable to such Restricted Stock, and
the Company may, at its discretion, retain physical possession of the
certificate until such time as all applicable restrictions lapse.
ARTICLE 11
PERFORMANCE-BASED AWARDS
11.1 PURPOSE. The purpose of this Article 11 is to provide the Committee
the ability to qualify the Performance Share Awards under Article 9 and the
Restricted Stock Awards under Article 10 as "performance-based compensation"
under Section 162(m) of the Code. If the Committee, in its discretion, decides
to grant a Performance-Based Award to a Covered Employee, the provisions of this
Article 11 shall control over any contrary provision contained in Articles 9 or
10.
11.2 APPLICABILITY. This Article 11 shall apply only to those Covered
Employees selected by the Committee to receive Performance-Based Awards. The
Committee may, in its discretion, grant Restricted Stock Awards or Performance
Share Awards to Covered Employees that do not satisfy the requirements of this
Article 11. The designation of a Covered Employee as a Participant for a
Performance Period shall not in any manner entitle the Participant to receive an
Award for the period. Moreover, designation of a Covered Employee as a
Participant for a particular Performance Period shall not require designation of
such Covered Employee as a Participant in any subsequent Performance Period and
designation of one Covered Employee as a Participant shall not require
designation of any other Covered Employees as a Participant in such period or in
any other period.
11.3 DISCRETION OF COMMITTEE WITH RESPECT TO PERFORMANCE AWARDS. With
regard to a particular Performance Period, the Committee shall have full
discretion to select the length of such Performance Period, the type of
Performance-Based Awards to be issued, the kind and/or level of the Performance
Goal, and whether the Performance Goal is to apply to the Company, a Subsidiary
or any division or business unit thereof.
11.4 PAYMENT OF PERFORMANCE AWARDS. Unless otherwise provided in the
relevant Award Agreement, a Participant must be employed by the Company or a
Subsidiary on the last day of the Performance Period to be eligible for a
Performance Award for such Performance Period. Furthermore, a Participant shall
be eligible to receive payment under a Performance-Based Award for a Performance
Period only if the Performance Goals for such period are achieved. In
determining the actual size of an individual Performance-Based Award, the
Committee may reduce or eliminate the amount of the Performance-Based Award
earned for the Performance Period, if in its sole and absolute discretion, such
reduction or elimination is appropriate.
11.5 MAXIMUM AWARD PAYABLE. The maximum Performance-Based Award payable to
any one Participant under the Plan for a Performance Period is 1,000,000 shares
of Stock, or in the event the Performance-Based Award is paid in cash, such
maximum Performance-Based Award shall be determined by multiplying 1,000,000 by
the Fair Market Value of one share of Stock as of the date of grant of the
Performance-Based Award.
ARTICLE 12
TAKE OWNERSHIP GRANTS
12.1 TAKE OWNERSHIP GRANTS. The Take Ownership Grants shall be awarded to
Participants selected by the Committee and shall be subject to the following
terms and conditions:
(a) EFFECTIVE DATE OF GRANTS. The effective date of the Take Ownership
Grants shall be on the day on which the Company's initial public offering of
Stock is consummated; provided, however, that Take Ownership Grants shall not be
made to those persons who are not United States residents if the jurisdiction in
which any such person resides prohibits such Grants or makes it impractical for
the Company to make such Grants.
(b) EXERCISE PRICE FOR GRANTS. Notwithstanding any other provision
hereof, the exercise price per share of Stock under the Take Ownership Grants
shall be the price at which the Company's Stock is offered under its initial
public offering of Stock ("IPO Price"), provided, however, that, with respect to
Participants who do not reside in the United States, if the day on which the
Company receives approval by the applicable foreign jurisdiction to offer Stock
to Participants residing in that jurisdiction is later than the day on which the
Company's initial public offering becomes effective, the exercise price per
share of Stock under the Take Ownership Grants shall be the Fair Market Value on
the day on which the Company receives approval by the applicable foreign
jurisdiction to offer Stock to such Participants.
(c) AMOUNT OF THE TAKE OWNERSHIP GRANTS. Each Participant selected to
receive a Take Ownership Grant shall be entitled to receive an Option to
purchase 50 shares of Stock. Such Option shall be designated as a Non-Qualified
Stock Option.
(d) TIME AND CONDITIONS OF EXERCISE. The Take Ownership Grants shall
become fully exercisable on the second anniversary of the date of grant.
(e) PAYMENT. The Committee shall determine the methods by which the
exercise price of the Take Ownership Grants may be paid, the form of payment,
including, without limitation, cash, promissory note, shares of Stock (through
actual tender or by attestation), or other property (including broker-assisted
"cashless exercise" arrangements), and the methods by which shares of Stock
shall be delivered or deemed to be delivered to Participants.
(f) EVIDENCE OF GRANT. All Take Ownership Grants shall be evidenced by a
written Award Agreement between the Company and the Participant. The Award
Agreement shall provide that upon a Participant's termination of employment or
service with the Company or a Subsidiary for any reason, the Participant may, at
any time within 90 days after the effective date of the Participant's
termination, exercise the Take Ownership Grant to the extent that the
Participant was entitled to exercise the Take Ownership Grant at the date of
termination, provided that in no event shall the Take Ownership Grant be
exercisable after its expiration date, as provided in the Award Agreement. The
Award Agreement shall also include such other provisions as determined by the
Committee.
ARTICLE 13
PROVISIONS APPLICABLE TO AWARDS
13.1 STAND-ALONE AND TANDEM AWARDS. Awards granted under the Plan may, in
the discretion of the Committee, be granted either alone, in addition to, or in
tandem with, any other Award granted under the Plan. Awards granted in addition
to or in tandem with other Awards may be granted either at the same time as or
at a different time from the grant of such other Awards.
13.2 EXCHANGE PROVISIONS. The Committee may at any time offer to exchange
or buy out any previously granted Award for a payment in cash, Stock, or another
Award, based on the terms and conditions the Committee determines and
communicates to the Participant at the time the offer is made.
13.3 TERM OF AWARD. The term of each Award shall be for the period as
determined by the Committee, provided that in no event shall the term of any
Incentive Stock Option or a Stock Appreciation Right granted in tandem with the
Incentive Stock Option exceed a period of ten years from the date of its grant.
13.4 FORM OF PAYMENT FOR AWARDS. Subject to the terms of the Plan and any
applicable law or Award Agreement, payments or transfers to be made by the
Company or a Subsidiary on the grant or exercise of an Award may be made in such
forms as the Committee determines at or after the time of grant, including
without limitation, cash, promissory note, Stock, other Awards, or other
property, or any combination, and may be made in a single payment or transfer,
in installments, or on a deferred basis, in each case determined in accordance
with rules adopted by, and at the discretion of, the Committee.
13.5 LIMITS ON TRANSFER. No right or interest of a Participant in any Award
may be pledged, encumbered, or hypothecated to or in favor of any party other
than the Company or a Subsidiary, or shall be subject to any lien, obligation,
or liability of such Participant to any other party other than the Company or a
Subsidiary. Except as otherwise provided by the Committee, no Award shall be
assignable or transferable by a Participant other than by will or the laws of
descent and distribution.
13.6 BENEFICIARIES. Notwithstanding Section 13.5, a Participant may, in the
manner determined by the Committee, designate a beneficiary to exercise the
rights of the Participant and to receive any distribution with respect to any
Award upon the Participant's death. A beneficiary, legal guardian, legal
representative, or other person claiming any rights under the Plan is subject to
all terms and conditions of the Plan and any Award Agreement applicable to the
Participant, except to the extent the Plan and Award Agreement otherwise
provide, and to any additional restrictions deemed necessary or appropriate by
the Committee. If the Participant is married, a designation of a person other
than the Participant's spouse as his beneficiary with respect to more than 50 %
of the Participant's interest in the Award shall not be effective without the
written consent of the Participant's spouse. If no beneficiary has been
designated or survives the Participant, payment shall be made to the person
entitled thereto under the Participant's will or the laws of descent and
distribution. Subject to the foregoing, a beneficiary designation may be changed
or revoked by a Participant at any time provided the change or revocation is
filed with the Committee.
13.7 STOCK CERTIFICATES. Notwithstanding anything herein to the contrary,
the Company shall not be required to issue or deliver any certificates
evidencing shares of Stock pursuant to the exercise of any Awards, unless and
until the Board has determined, with advice of counsel, that the issuance and
delivery of such certificates is in compliance with all applicable laws,
regulations of governmental authorities and, if applicable, the requirements of
any exchange on which the shares of Stock are listed or traded. All Stock
certificates delivered under the Plan are subject to any stop-transfer orders
and other restrictions as the Committee deems necessary or advisable to comply
with Federal, state, or foreign jurisdiction, securities or other laws, rules
and regulations and the rules of any national securities exchange or automated
quotation system on which the Stock is listed, quoted, or traded. The Committee
may place legends on any Stock certificate to reference restrictions applicable
to the Stock. In addition to the terms and conditions provided herein, the Board
may require that a Participant make such reasonable covenants, agreements, and
representations as the Board, in its discretion, deems advisable in order to
comply with any such laws, regulations, or requirements.
13.8 ACCELERATION UPON A CHANGE OF CONTROL. If a Change of Control occurs,
all outstanding Options, Stock Appreciation Rights, and other Awards shall
become fully exercisable and all restrictions on outstanding Awards shall lapse.
To the extent that this provision causes Incentive Stock Options to exceed the
dollar limitation set forth in Section 7.2(d), the excess Options shall be
deemed to be Non-Qualified Stock Options. Upon, or in anticipation of, such an
event, the Committee may cause every Award outstanding hereunder to terminate at
a specific time in the future and shall give each Participant the right to
exercise Awards during a period of time as the Committee, in its sole and
absolute discretion, shall determine.
ARTICLE 14
CHANGES IN CAPITAL STRUCTURE
14.1 GENERAL.
(a) SHARES AVAILABLE FOR GRANT. In the event of any change in the number
of shares of Stock outstanding by reason of any stock dividend or split,
recapitalization, merger, consolidation, combination or exchange of shares or
similar corporate change, the maximum aggregate number of shares of Stock with
respect to which the Committee may grant Awards shall be appropriately adjusted
by the Committee. In the event of any change in the number of shares of Stock
outstanding by reason of any other event or transaction, the Committee may, but
need not, make such adjustments in the number and class of shares of Stock with
respect to which Awards may be granted as the Committee may deem appropriate.
(b) OUTSTANDING AWARDS - INCREASE OR DECREASE IN ISSUED SHARES WITHOUT
CONSIDERATION. Subject to any required action by the shareholders of the
Company, in the event of any increase or decrease in the number of issued shares
of Stock resulting from a subdivision or consolidation of shares of Stock or the
payment of a stock dividend (but only on the shares of Stock), or any other
increase or decrease in the number of such shares effected without receipt or
payment of consideration by the Company, the Committee shall proportionally
adjust the number of shares of Stock subject to each outstanding Award and the
exercise price per share of Stock of each such Award.
(c) OUTSTANDING AWARDS - CERTAIN MERGERS. Subject to any required action
by the shareholders of the Company, in the event that the Company shall be the
surviving corporation in any merger or consolidation (except a merger or
consolidation as a result of which the holders of shares of Stock receive
securities of another corporation), each Award outstanding on the date of such
merger or consolidation shall pertain to and apply to the securities which a
holder of the number of shares of Stock subject to such Award would have
received in such merger or consolidation.
(d) OUTSTANDING AWARDS - CERTAIN OTHER TRANSACTIONS. In the event of (i)
a dissolution or liquidation of the Company, (ii) a sale of all or substantially
all of the Company's assets, (iii) a merger or consolidation involving the
Company in which the Company is not the surviving corporation or (iv) a merger
or consolidation involving the Company in which the Company is the surviving
corporation but the holders of shares of Stock receive securities of another
corporation and/or other property, including cash, the Committee shall, in its
absolute discretion, have the power to:
(1) cancel, effective immediately prior to the occurrence of such
event, each Award outstanding immediately prior to such event (whether or
not then exercisable), and, in full consideration of such cancellation, pay
to the Participant to whom such Award was granted an amount in cash, for
each share of Stock subject to such Award, respectively, equal to the
excess of (A) the value, as determined by the Committee in its absolute
discretion, of the property (including cash) received by the holder of a
share of Stock as a result of such event over (B) the exercise of such
Award; or
(2) provide for the exchange of each Award outstanding immediately
prior to such event (whether or not then exercisable) for an option, a
stock appreciation right, restricted stock award, performance share award
or performance-based award with respect to, as appropriate, some or all of
the property for which such Award is exchanged and, incident thereto, make
an equitable adjustment as determined by the Committee in its absolute
discretion in the exercise price or value of the option, stock appreciate
right, restricted stock award, performance share award or performance-based
award or the number of shares or amount of property subject to the option,
stock appreciation right, restricted stock award, performance share award
or performance-based award or, if appropriate, provide for a cash payment
to the Participant to whom such Award was granted in partial consideration
for the exchange of the Award.
(e) OUTSTANDING AWARDS - OTHER CHANGES. In the event of any other change
in the capitalization of the Company or corporate change other than those
specifically referred to in Article 14, the Committee may, in its absolute
discretion, make such adjustments in the number and class of shares subject to
Awards outstanding on the date on which such change occurs and in the per share
exercise price of each Award as the Committee may consider appropriate to
prevent dilution or enlargement of rights.
(f) NO OTHER RIGHTS. Except as expressly provided in the Plan, no
Participant shall have any rights by reason of any subdivision or consolidation
of shares of stock of any class, the payment of any dividend, any increase or
decrease in the number of shares of stock of any class or any dissolution,
liquidation, merger, or consolidation of the Company or any other corporation.
Except as expressly provided in the Plan, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number of shares of Stock subject to an Award or the exercise
price of any Award.
ARTICLE 15
AMENDMENT, MODIFICATION, AND TERMINATION
15.1 AMENDMENT, MODIFICATION, AND TERMINATION. With the approval of the
Board, at any time and from time to time, the Committee may terminate, amend or
modify the Plan; provided, however, that to the extent necessary and desirable
to comply with any applicable law, regulation, or stock exchange rule, the
Company shall obtain shareholder approval of any Plan amendment in such a manner
and to such a degree as required.
15.2 AWARDS PREVIOUSLY GRANTED. Except as otherwise provided in the Plan,
including without limitation, the provisions of Article 14, no termination,
amendment, or modification of the Plan shall adversely affect in any material
way any Award previously granted under the Plan, without the written consent of
the Participant.
ARTICLE 16
PROVISIONS RELATING TO FRENCH EMPLOYEES
Notwithstanding any other provisions of the Plan to the contrary, the
following provisions shall apply to Awards granted to any employee who is a
French citizen or who works primarily in France as of the grant date (referred
to herein as "French Employee").
16.1 CONSULTANTS. Notwithstanding anything to the contrary herein, no
French Employee who would otherwise be considered a consultant under French law
may be granted an Award under the Plan.
16.2 TERMINATION FOR CAUSE. The last sentence of Section 3.1(d) (definition
of Cause) shall not apply to French Employees.
16.3 TEN PERCENT OWNERS. Notwithstanding Section 6.1(a) above, no Award
shall be granted to any French Employee who holds more than ten percent of the
Stock on the grant date.
16.4 EXERCISE PRICE. Notwithstanding Section 7.1(a) above, all Awards
granted to French Employees shall be granted at an exercise price per share
equal to Fair Market Value per share as of the grant date.
16.5 TIME LIMITATIONS. No Options shall be granted to any French Employee
five years after the later of (a) the date the Company's stockholders initially
approved the Plan, or (b) the date the Plan has been subsequently re-authorized,
in its original form or as amended from time to time by the Board, by the
Company's stockholders.
16.6 VESTING OF OPTIONS. Notwithstanding Section 7.1(b) above, no portion
of any Award granted to a French Employee shall become exercisable before the
five-year anniversary of the grant date.
16.7 EFFECT OF PARTICIPANT'S DEATH. Notwithstanding Section 7.1(b) or any
other provision hereof, upon a French Employee's death, the vested portion of
such Participant's Award shall remain exercisable for a period of six months
after the date of his death and shall be exercisable by his heirs.
16.8 EXCHANGE OF OPTIONS. Notwithstanding Section 13.2 above, the Company
shall not terminate any portion of an Award granted to any French Employee.
16.9 ADJUSTMENT OF OPTIONS. Notwithstanding Section 14.1 herein, any
adjustment made to any Award granted to a French Employee shall comply with
applicable French law.
ARTICLE 17
GENERAL PROVISIONS
17.1 NO RIGHTS TO AWARDS. No Participant, employee, or other person shall
have any claim to be granted any Award under the Plan, and neither the Company
nor the Committee is obligated to treat Participants, employees, and other
persons uniformly.
17.2 NO STOCKHOLDERS RIGHTS. No Award gives the Participant any of the
rights of a stockholder of the Company unless and until shares of Stock are in
fact issued to such person in connection with such Award.
17.3 WITHHOLDING. The Company or any Subsidiary shall have the authority
and the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy Federal, state, and local taxes
(including the Participant's FICA obligation) required by law to be withheld
with respect to any taxable event arising as a result of this Plan. With the
Committee's consent, a Participant may elect to have the Company withhold from
those Stock that would otherwise be received upon the exercise of any Option, a
number of shares having a Fair Market Value equal to the minimum statutory
amount necessary to satisfy the Company's applicable federal, state, local and
foreign income and employment tax withholding obligations.
17.4 NO RIGHT TO EMPLOYMENT OR SERVICES. Nothing in the Plan or any Award
Agreement shall interfere with or limit in any way the right of the Company or
any Subsidiary to terminate any Participant's employment or services at any
time, nor confer upon any Participant any right to continue in the employ of the
Company or any Subsidiary.
17.5 UNFUNDED STATUS OF AWARDS. The Plan is intended to be an "unfunded"
plan for incentive compensation. With respect to any payments not yet made to a
Participant pursuant to an Award, nothing contained in the Plan or any Award
Agreement shall give the Participant any rights that are greater than those of a
general creditor of the Company or any Subsidiary.
17.6 INDEMNIFICATION. To the extent allowable under applicable law, each
member of the Committee or of the Board shall be indemnified and held harmless
by the Company from any loss, cost, liability, or expense that may be imposed
upon or reasonably incurred by such member in connection with or resulting from
any claim, action, suit, or proceeding to which he or she may be a party or in
which he or she may be involved by reason of any action or failure to act under
the Plan and against and from any and all amounts paid by him or her in
satisfaction of judgment in such action, suit, or proceeding against him or her
provided he or she gives the Company an opportunity, at its own expense, to
handle and defend the same before he or she undertakes to handle and defend it
on his or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Company's Articles of Incorporation or Bylaws, as a matter of
law, or otherwise, or any power that the Company may have to indemnify them or
hold them harmless.
17.7 RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan shall be
taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance, welfare or other benefit plan of the
Company or any Subsidiary.
17.8 EXPENSES. The expenses of administering the Plan shall be borne by the
Company and its Subsidiaries.
17.9 TITLES AND HEADINGS. The titles and headings of the Sections in the
Plan are for convenience of reference only, and in the event of any conflict,
the text of the Plan, rather than such titles or headings, shall control.
17.10 FRACTIONAL SHARES. No fractional shares of stock shall be issued and
the Committee shall determine, in its discretion, whether cash shall be given in
lieu of fractional shares or whether such fractional shares shall be eliminated
by rounding up or down as appropriate.
17.11 SECURITIES LAW COMPLIANCE. With respect to any person who is, on the
relevant date, obligated to file reports under Section 16 of the Exchange Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent
any provision of the Plan or action by the Committee fails to so comply, it
shall be void to the extent permitted by law and voidable as deemed advisable by
the Committee.
17.12 GOVERNMENT AND OTHER REGULATIONS. The obligation of the Company to
make payment of awards in Stock or otherwise shall be subject to all applicable
laws, rules, and regulations, and to such approvals by government agencies as
may be required. The Company shall be under no obligation to register under the
Securities Act of 1933, as amended, any of the shares of Stock paid under the
Plan. If the shares paid under the Plan may in certain circumstances be exempt
from registration under the Securities Act of 1933, as amended, the Company may
restrict the transfer of such shares in such manner as it deems advisable to
ensure the availability of any such exemption.
17.13 GOVERNING LAW. The Plan and all Award Agreements shall be construed
in accordance with and governed by the laws of the State of Delaware.
[GRAPHIC OMITTED]
SCG HOLDING CORPORATION
May 23, 2000
SCG Holding Corporation
5005 McDowell Rd.
Phoenix, AZ 85008
Dear Sirs:
I refer to the Registration Statement on Form S-8 (the "Registration
Statement") to be filed by SCG Holding Corporation today with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act"), relating to the shares of Common Stock, $.01 par value, of
SCG Holding Corporation to be issued under the SCG Holding Corporation 2000
Stock Incentive Plan, as amended (the "Plan").
In connection with the foregoing registration, I have acted as the general
counsel of SCG Holding Corporation and have examined and am relying on
originals, or copies certified or otherwise identified to my satisfaction, of
such corporate records and such other instruments, and I have made such
investigations of law, as I have deemed appropriate as a basis for the opinion
expressed below.
Based on the foregoing, it is my opinion that the shares of SCG Holding
Corporation issuable under the Plan are duly authorized and, when issued in
accordance with the terms of the Plan, at prices in excess of the par value
thereof, will be validly issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. By giving such consent, I do not thereby admit that I am
an expert with respect to any part of the Registration Statement, including this
exhibit, within the meaning of the term "expert" as used in the Act or the rules
and regulations of the Commission issued thereunder.
Very truly yours,
/s/ George H. Cave
------------------
George H. Cave, Esq.
EXHIBIT 23.1
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CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of SCG Holding Corporation of our report dated January 31, 2000
relating to the combined balance sheet of the Semiconductor Components Group of
Motorola, Inc. as of December 31, 1998 and the related combined statements of
revenues less direct and allocated expenses before taxes for each of the years
in the two-year period ended December 31, 1998 and the period from January 1,
1999 through August 3, 1999, which report appears in the 1999 Form 10-K of SCG
Holdings Corporation.
KPMG LLP
/s/ KPMG LLP
- ----------------
Phoenix, Arizona
May 23, 2000
EXHIBIT 23.2
------------
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 17, 2000 relating to the
consolidated financial statements of SCG Holding Corportion, which appears in
SCG Holding Corporation's Annual Report on Form 10-K for the year ended December
31, 1999. We also consent to the incorporation by reference of our report dated
February 17, 2000 relating t the financial statement schedule, which appears in
such Annual Report on Form 10-K.
PricewaterhouseCoopers LLP
/s/ PricewaterhouseCoopers LLP
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Phoenix, Arizona
May 19, 2000