-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IBW1MDlfIgRMXuNGGcDDZ9Qxq7mT1N4gx89WnTCcJfEl5uxtAQy0OSXaNwaYsCwj 9DZaZxUcGSf12+zQ5gACxQ== 0000891618-99-002826.txt : 19990625 0000891618-99-002826.hdr.sgml : 19990625 ACCESSION NUMBER: 0000891618-99-002826 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19990624 EFFECTIVENESS DATE: 19990624 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LSI LOGIC CORP CENTRAL INDEX KEY: 0000703360 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 942712976 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-81435 FILM NUMBER: 99651218 BUSINESS ADDRESS: STREET 1: 1551 MCCARTHY BLVD STREET 2: MS D 106 CITY: MILPITAS STATE: CA ZIP: 95035 BUSINESS PHONE: 4084338000 MAIL ADDRESS: STREET 1: 1551 MCCARTHY BLVD STREET 2: MS D 106 CITY: MILPITAS STATE: CA ZIP: 95035 S-8 1 FORM S-8 1 As filed with the Securities and Exchange Commission on June 24, 1999 to Registration No. _____ - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------- LSI LOGIC CORPORATION (Exact name of issuer as specified in its charter) DELAWARE 94-2712976 (State of Incorporation) (I.R.S. Employer Identification No.) 1551 McCarthy Boulevard Milpitas, California 95035 (Address of Principal Executive Offices) SEEQ TECHNOLOGY, INC. 1982 STOCK OPTION PLAN AMENDED AND RESTATED SEEQ TECHNOLOGY, INC. 1989 NONEMPLOYEE DIRECTOR STOCK OPTION PLAN AMENDED (Full title of the Plan) DAVID E. SANDERS Vice President, General Counsel LSI LOGIC CORPORATION 1551 McCarthy Boulevard, Milpitas, California 95035 (408) 433-8000 (Name, address and telephone number of agent for service) CALCULATION OF REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------- Proposed Proposed Maximum Title of Securities Amount to be Maximum Offering Aggregate Amount of to be Registered Registered Price Per Unit* Offering Price* Registration Fee - ---------------------------------------------------------------------------------------------------------------- Common Stock 378,043 shares $15.04 $5,685,767 $1,581.00
================================================================================ *Computed in accordance with Rule 457(h) under the Securities Act of 1933, as amended, solely for the purpose of calculating the registration fee. Computation based upon the price at which the options may be exercised. 2 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. There are hereby incorporated by reference in this Registration Statement the following documents and information heretofore filed with the Securities and Exchange Commission: (a) The Company's Annual Report on Form 10-K and 10-K/A for the fiscal year ended December 31, 1998 filed pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the " Exchange Act"); (b) The Company's Quarterly Report on Form 10-Q for the quarter ended March 28, 1999, filed pursuant to Section 13 of the Exchange Act. (c) The description of the Company's Common Stock contained in the Company's Registration Statement on Form 8-A filed on August 29, 1989, pursuant to Section 12(b) of the Exchange Act; (d) The description of the Company's Amended and Restated Preferred Shares Rights Agreement contained in the Company's Registration Statement on Form 8-A-12G/A filed on December 8, 1998, pursuant to Section 12(g) of the Exchange Act; and (e) The Company's Current Report on Form 8-K/A, filed on May 28, 1999, pursuant to Section 13 of the Exchange Act. (f) The Company's Current Report on Form 8-K, filed on June 2, 1999, pursuant to Section 13 of the Exchange Act. All documents filed by the Company pursuant to Sections 13(a) and (c), 14 and 15(d) of the Exchange Act on or after the date of this Registration Statement and prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be part hereof from the date of filing such documents. ITEM 4. DESCRIPTION OF SECURITIES. Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. Not applicable. 2 3 ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 145 of the Delaware General Corporation Law authorizes a court to award, or a corporation's Board of Directors to grant, indemnity to directors and officers in terms sufficiently broad to permit such indemnification under certain circumstances for liabilities (including reimbursement for expenses incurred) arising under the Securities Act of 1933. Section 11 of the Certificate of Incorporation and Article VI of the Bylaws of the Company provide for indemnification of certain agents to the maximum extent permitted by the Delaware General Corporation Law. Persons covered by these indemnification provisions include current and former directors, officers, employees and other agents of the Company, as well as persons, who serve at the request of the Company as directors, officers, employees or agents of another enterprise. In addition, the Company has entered into indemnification agreements with its directors and officers pursuant to which the Company has agreed to indemnify such individuals and to advance expenses incurred in defending any action or proceeding to the fullest extent permitted by Section 145 of the Delaware General Corporation Law. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable. ITEM 8. EXHIBITS.
Exhibit Number -------------- 3.1 Amended and Restated Certificate of Incorporation of the Company(1) 4.1 Amended and Restated Preferred Shares Rights Agreement, dated November 20, 1998(2) 4.2 SEEQ Technology, Inc. Amended and Restated 1982 Stock Option Plan 4.3 SEEQ Technology, Inc. Amended 1989 Nonemployee Director Stock Option Plan 5.1 Opinion of Counsel as to legality of securities being registered. 23.1 Consent of Independent Accountants. 23.2 Consent of Counsel (contained in Exhibit 5.1 hereto). 24.1 Power of Attorney (see page 6).
- -------------------------------------------------------------------------------- (1) Incorporated by reference to exhibits filed with the Company's Registration Statement Form S-8 (No. 333-57563) filed June 24, 1998 (2) Incorporated by reference to exhibits filed with the Company's Form 8-A12G/A filed on December 8, 1998 3 4 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 to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, 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 of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) 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. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the Delaware General Corporation Law, the By-Law provisions, Section 11 of the Certificate of Incorporation of the registrant and the indemnification agreements described above in Item 6, 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 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 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 hereunder, 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 of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. 4 5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant, LSI Logic Corporation, a corporation organized and existing under the laws of the State of Delaware, 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 Milpitas, State of California, on this 22nd day of June, 1999. LSI LOGIC CORPORATION By: /s/ R. Douglas Norby ------------------------------------- R. Douglas Norby Executive Vice President, Finance and Chief Financial Officer 5 6 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Wilfred J. Corrigan and R. Douglas Norby, jointly and severally, his attorneys-in-fact, each with the power of substitution, for him in any and all capacities, to sign any amendments to this Registration Statement, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- Chairman, Chief Executive Officer and Director June __, 1999 - ----------------------------------- (Principal Executive Officer) Wilfred J. Corrigan /s/ R. Douglas Norby Executive Vice President, Chief Financial June 22, 1999 - ------------------------------------- Officer and Director (Principal Financial R. Douglas Norby Officer and Principal Accounting Officer) /s/ T.Z. Chu Director June 22, 1999 - ------------------------------------- T.Z. Chu /s/ Malcolm R. Currie Director June 22, 1999 - ------------------------------------- Malcolm R. Currie /s/ James H. Keyes Director June 22, 1999 - ------------------------------------- James H. Keyes /s/ Matthew J. O'Rourke Director June 22, 1999 - ------------------------------------- Matthew J. O'Rourke
6 7 EXHIBIT INDEX
Exhibit Number Description -------------- ----------- 3.1 Amended and Restated Certificate of Incorporation of the Company 4.1 Amended and Restated Preferred Shares Rights Agreement, dated November 20, 1998 4.2 SEEQ Technology, Inc. Amended and Restated 1982 Stock Option Plan 4.3 SEEQ Technology, Inc. Amended and 1989 Nonemployee Director Stock Option Plan 5.1 Opinion of Counsel as to legality of securities being registered. 23.1 Consent of Independent Accountants. 23.2 Consent of Counsel (contained in Exhibit 5.1 hereto). 24.1 Power of Attorney (see page 6).
7 EX-4.2 2 SEEQ TECHNOLOGY, INC. AMNDED AND RESTATED 1982 1 EXHIBIT 4.2 SEEQ TECHNOLOGY INCORPORATED RESTATED 1982 STOCK OPTION PLAN (Amended and Restated through January 13, 1998) I. PURPOSE OF THE PLAN This Restated 1982 Stock Option Plan (the "Plan") is intended to promote the interests of SEEQ Technology Incorporated, a Delaware corporation ("Company"), by providing a method whereby (i) employees (including officers and employee members of the Board) of the Company and its parent or subsidiary corporations who are primarily responsible for the management, growth and financial success of the Company and its parent or subsidiary corporations and (ii) consultants or other independent contractors (other than non-employee members of the Board) who perform valuable services for the Company and its parent or subsidiary corporations may be offered incentives and rewards which will encourage them to acquire a proprietary interest, or otherwise increase their proprietary interest, in the Company and continue to render services to the Company or its parent or subsidiary corporations. II. ADMINISTRATION OF THE PLAN The Plan shall be administered in accordance with the following standards: (a) The Company's Board of Directors (the "Board") shall appoint a committee ("Committee") consisting of not less than two (2) Board members to administer the Plan, including (without limitation) the power to grant options under the Plan, the power to accelerate the exercisability of granted options and the power to administer the option surrender provisions of the Plan. This committee shall function as the "Primary Committee" under the Plan and shall have sole and exclusive authority to grant stock options to officers of the Company. No Board member shall be eligible to serve on the Primary Committee if such individual has, within the twelve (12)-month period immediately preceding the date he or she is to be appointed to the Primary Committee, received an option grant under this Plan or an option grant or stock issuance under any other stock option, stock appreciation, stock bonus or other stock plan of the Company (or any parent or subsidiary corporation), other than the SEEQ Technology Incorporated 1989 Nonemployee Director Stock Option Plan. (b) Administration of the Plan with respect to the officers of the Company and all other individuals eligible to participate in the Plan may, at the Board's discretion, be vested in the Primary Committee or in a secondary committee of two or more Board members appointed by the Board, or the Board may retain the power to administer the Plan with respect to all individuals. Should a secondary committee be appointed, the membership may include Board members who are employees of the Company eligible to receive option grants under this Plan or 2 option grants or stock issuances under any other stock option, stock appreciation, stock bonus or other stock plan of the Company (or any parent or subsidiary corporation). (c) Members of the Primary Committee or any secondary committee shall serve for such term as the Board may determine and shall be subject to removal by the Board at any time. (d) The term "Plan Administrator" as used from time to time in this plan document shall mean the particular entity, whether the Primary Committee or any secondary committee, which is authorized to administer the option grant and option surrender provisions of the Plan with respect to one or more classes of eligible individuals, to the extent such entity is carrying out its administrative functions under the Plan with respect to those individuals. (e) The Plan Administrator shall have full power and authority (subject to the express provisions of the Plan) to establish such rules and regulations as it may deem appropriate for the proper administration of the plan functions within the scope of its administrative authority and to make any and all determinations with respect to those functions which it may deem necessary or advisable. All decisions of the Plan Administrator within the scope of its administrative authority under the Plan shall be final and binding on all parties who have an interest in any outstanding option granted pursuant to such authority. III. ELIGIBILITY FOR OPTION GRANTS (a) The persons who shall be eligible to receive options pursuant to the Plan are those employees (including officers) and consultants or other independent contractors (other than non-employee members of the Board) of the Company or its parent or subsidiary corporations who render services which tend to contribute materially to the success of the Company or its parent or subsidiary corporations or which may reasonably be anticipated to contribute materially to the future success of the Company or its parent or subsidiary corporations. (b) Non-employee members of the Board shall not be eligible to participate in the Plan or in any other stock bonus, stock purchase, stock option or other stock plan of the Company or its parent or subsidiary corporations other than the SEEQ Technology Incorporated 1989 Nonemployee Director Stock Option Plan. (c) The Plan Administrator shall have the sole and exclusive authority, within the scope of its administrative functions under the Plan, to select the eligible individuals who are to receive option grants under the Plan and to determine the number of shares to be covered by each such option grant, the status of the granted option as either an incentive stock option ("Incentive Option") which satisfies the requirements of Section 422 of the Internal Revenue Code or a non-statutory option not intended to meet such requirements, the time or times at which such option is to become exercisable and the maximum term for which the option is to remain outstanding. (d) For purposes of this Plan, the following provisions shall be applicable in determining the parent and subsidiary corporations of the Company: 3 (i) Any corporation (other than the Company) in an unbroken chain of corporations ending with the Company shall be considered to be a parent corporation of the Company, provided each such corporation in the unbroken chain (other than the Company) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. (ii) Each corporation (other than the Company) in an unbroken chain of corporations beginning with the Company shall be considered to be a subsidiary of the Company, provided each such corporation (other than the last corporation) in the unbroken chain owns, at the time of determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. IV. STOCK SUBJECT TO THE PLAN (a) The stock issuable under the Plan shall be shares of the Company's authorized but unissued or reacquired common stock ("Common Stock"). The aggregate number of shares of Common Stock issuable over the term of the Plan shall not exceed 8,760,000 shares and not more than 6,171,481 shares shall be issued under the Plan after January 15, 1998. However, the number of shares issued under the Plan is subject to adjustment from time to time in accordance with paragraph IV(b) of the Plan. Should an option terminate for any reason prior to exercise or surrender in full (including options cancelled in accordance with the cancellation-regrant provisions of Article VIII of the Plan), the shares subject to the portion of the option not so exercised or surrendered shall be available for subsequent option grants under this Plan. Shares subject to any option or portion thereof surrendered or cancelled in accordance with Article IX of the Plan and all share issuances under the Plan, whether or not the shares are subsequently repurchased by the Company pursuant to its repurchase rights under the Plan, shall reduce on a share-for-share basis the number of shares of Common Stock available for subsequent option grants under the Plan. In addition, should the exercise price of an outstanding option under the Plan be paid with shares of Common Stock or should shares of Common Stock otherwise issuable under the Plan be withheld by the Company in satisfaction of the withholding taxes incurred in connection with the exercise of an outstanding option under the Plan, then the number of shares of Common Stock available for issuance under the Plan shall not be reduced by the gross number of shares for which the option is exercised, but by the net number of shares of Common Stock actually issued to the option holder. (b) In the event any change is made to the Common Stock issuable under the Plan by reason of any stock dividend, stock split, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding shares of the Common Stock as a class without the Company's receipt of consideration, appropriate adjustments shall be made to (i) the aggregate number and/or class of securities issuable under the Plan, (ii) the maximum number of shares issuable per participant under the Plan after December 31, 1993 and (iii) the number 4 and/or class of shares and the price per share of the securities subject to each outstanding option in order to prevent the dilution or enlargement of benefits thereunder. The adjustments determined by the Primary Committee shall be final, binding and conclusive. (c) No one person participating in the Plan may receive options for more than 2,500,000 shares of the Common Stock over the term of the Plan, exclusive of options granted prior to December 31, 1993. V. TERMS AND CONDITIONS OF OPTIONS Options granted pursuant to the Plan shall be authorized by action of the Plan Administrator and may, at the discretion of the Plan Administrator, be either Incentive Options or non-statutory options. Individuals who are not employees of the Company or its parent or subsidiary corporations may only be granted non-statutory options. Each granted option shall be evidenced by one or more instruments in such form as the Plan Administrator shall from time to time approve; provided, however, that each such instrument shall comply with the terms and conditions specified below. Each instrument evidencing an Incentive Option shall, in addition, be subject to the applicable provisions of Article VI. 1. Option Price. a. The option price per share shall be fixed by the Plan Administrator, but in no event shall the option price per share be less than eighty-five percent (85%) of the fair market value per share of Common Stock on the grant date. b. If any individual to whom an option is to be granted pursuant to the provisions of the Plan is on the date of grant the owner of stock (as determined under Section 424(d) of the Internal Revenue Code) possessing more than 10% of the total combined voting power of all classes of stock of the Company or any one of its parent or subsidiary corporations (such person to be herein referred to as a 10% Stockholder, then the option price per share shall not be less than one hundred ten percent (110%) of the fair market value per share of Common Stock on the grant date. c. The option price shall become immediately due upon exercise of the option and shall, subject to the provisions of Article X, be payable in one of the alternative forms specified below: (i) full payment in cash or check payable to the Company's order; or (ii) full payment in shares of Common Stock held for the requisite period necessary to avoid a charge to the Company's earnings for financial reporting purposes and valued at fair market value on the Exercise Date (as such term is defined below) equal to the option price; or 5 (iii) full payment through a special sale and remittance procedure pursuant to which the optionee is to provide irrevocable written instructions (I) to a designated brokerage firm to effect the immediate sale of the purchased shares and remit to the Company, out of the sale proceeds available on the settlement date, an amount sufficient to cover the aggregate option price payable for the purchased shares plus all applicable Federal and state income and employment taxes required to be withheld by the Company by reason of such purchase and (II) to the Company to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale transaction; or (iv) any combination of the foregoing so long as the total payment equals the aggregate option price for the purchased shares. For purposes of this subparagraph c, the Exercise Date shall be the date on which written notice of the option exercise is delivered to the Company. Except to the extent the sale and remittance procedure is utilized in connection with the option exercise, payment of the option price for the purchased shares must accompany such exercise notice. d. The fair market value of a share of Common Stock on any relevant date under subparagraph a, b or c above (and for all other valuation purposes under the Plan) shall be determined in accordance with the following provisions: (i) If the Common Stock is not at the time listed or admitted to trading on any stock exchange but is traded in the over-the-counter market, the fair market value shall be the mean between the highest bid and lowest asked prices (or, if such information is available, the closing selling price) of the Common Stock on the date in question in the over-the-counter market, as such prices are reported by the National Association of Securities Dealers through its Nasdaq National Market System or any successor system. If there are no reported bid and asked prices (or closing selling price) on the date in question, then the mean between the highest bid price and lowest asked price (or the closing selling price) on the last preceding date for which such quotations exist shall be determinative of fair market value. (ii) If the Common Stock is at the time listed or admitted to trading on any stock exchange, then the fair market value shall be the closing selling price per share of Common Stock on the date in question on the stock exchange determined by the Plan Administrator to be the primary market for the Common Stock, as such price is officially quoted on such exchange. If there is no reported sale of Common Stock on such exchange on the date in question, then the fair market value shall be the closing selling price of the Common Stock on the exchange on the last preceding date for which such quotation exists. 2. Term and Exercise of Options. Each option granted under the Plan shall be exercisable at such time or times, during such period, and for such number of shares as shall be determined by the Plan Administrator and set forth in the instrument evidencing such option. However, no option granted under this Plan shall have a term in excess of ten (10) years from the grant date. No option or stock appreciation right outstanding under the Plan shall be assignable 6 or transferable by the optionee other than a transfer of the option by will or by the laws of descent and distribution following the optionee's death, and during the optionee's lifetime the option and all stock appreciation rights pertaining to such option shall be exercisable only by the optionee. 3. Effect of Termination of Employment. a. Should an optionee cease Service with the Company for any reason (including death or permanent disability as defined in Section 22(e)(3) of the Internal Revenue Code) while the holder of one or more outstanding options granted to such optionee under the Plan, then such option or options shall in no event remain exercisable for more than a twenty-four (24) month period (or such shorter period as is determined by the Plan Administrator and set forth in the option agreement) following the date of such cessation of Service, but under no circumstances shall any such option be exercisable after the specified expiration date of the option term. Each such option shall, during such twenty-four (24) month or shorter period, be exercisable only to the extent of the number of shares (if any) for which the option is exercisable on the date of such cessation of Service. Upon the expiration of such twenty-four (24) month or shorter period or (if earlier) upon the expiration of the option term, the option shall terminate and cease to be exercisable. b. Any option granted to an optionee under the Plan and exercisable in whole or in part on the date of the optionee's death may be subsequently exercised, but only to the extent of the number of shares (if any) for which the option is exercisable on the date of the optionee's cessation of Service (less any option shares which the Optionee may have purchased prior to death), by the personal representative of the optionee's estate or by the person or persons to whom the option is transferred pursuant to the optionee's will or in accordance with the laws of descent and distribution, provided and only if such exercise occurs prior to the earlier of (i) the expiration of the eighteen-(18) month period following the death of the optionee or (ii) the specified expiration date of the option term. Upon the occurrence of the earlier event, the option shall terminate and cease to be exercisable. c. If (i) the optionee's Service is terminated for cause (including, but not limited to, any act of dishonesty, willful misconduct, fraud or embezzlement or any unauthorized disclosure or use of confidential information or trade secrets) or (ii) the optionee makes or attempts to make any unauthorized use or disclosure of confidential information or trade secrets of the Company or its parent or subsidiary corporations, then in any such event all outstanding options granted the optionee under the Plan shall immediately terminate and cease to be exercisable. d. Notwithstanding subparagraphs a and b above, the Plan Administrator shall have complete discretion, exercisable either at the time the option is granted or at the time during which the option remains outstanding, to extend the period of time for which the option is to remain exercisable following the optionee's cessation of Service from the twenty-four (24) month or such shorter period previously established by the Plan Administrator and set forth 7 in the option agreement to such greater period of time as the Plan Administrator shall deem appropriate; provided, however, that no option shall be exercisable after the specified expiration date of the option term and that such discretion shall not be available where the optionee has been terminated for cause. The Plan Administrator shall have similar discretion, except with respect to optionees terminated for cause, to establish as a provision applicable to the exercise of one or more options granted under the Plan that during the period of exercisability following cessation of Service (as provided in subparagraph V.3.a or V.3.b above), the option may be exercised not only with respect to the number of shares for which it is exercisable at the time of the optionee's cessation of Service but also with respect to one or more installments of purchasable shares for which the option otherwise would have become exercisable had such cessation of Service not occurred. e. For purposes of the foregoing provisions of this Paragraph V.3, the optionee shall be deemed to be an Employee of the Company for so long as the optionee remains in the employ of the Company or one or more parent or subsidiary corporations. For purposes of the foregoing provisions of this Paragraph V.3, optionee shall be deemed to be in Service if optionee is an Employee, independent consultant or Board member of the Company, its parent or subsidiary. 4. Stockholder Rights. An option holder shall have none of the rights of a stockholder with respect to any shares covered by the option until such individual shall have exercised the option, paid the option price and been issued a stock certificate for the purchased shares. 5. Repurchase Price. The shares of Common Stock acquired upon the exercise of options granted under the Plan may be subject to one or more repurchase rights of the Company in accordance with the following provisions: (a) The Company (or its assigns) shall have the right, exercisable upon the optionee's cessation of Service, to repurchase at the original option price any or all of the unvested shares of Common Stock previously acquired by the optionee upon the exercise of such option(s). Any such repurchase right shall be exercisable by the Company (or its assigns) upon such terms and conditions (including the establishment of the appropriate vesting schedule and other provisions of the expiration of such right in one or more installments) as the Plan Administrator may specify in the instrument evidencing such right. (b) The Plan Administrator effecting the option grants shall also have full power and authority to provide for the automatic termination of the Company's outstanding repurchase rights, in whole or in part, and thereby vest the optionees in one or more of the shares purchased or purchasable under the granted options, upon the occurrence of any Corporate Transaction specified in Article VII or any Change in Control specified in Article IX. 8 VI. INCENTIVE OPTIONS The terms and conditions specified below shall be applicable to all Incentive Options granted under the Plan. Options which are specifically designated as "non-statutory" or "non-statutory" options when issued under the Plan shall not be subject to such terms and conditions: (a) Option Price. The option price per share of the Common Stock subject to an Incentive Option shall in no event be less than one hundred percent (100%) of the fair market value per share of Common Stock on the grant date. (b) Dollar Limitation. The aggregate fair market value (determined as of the respective date or dates of grant) of the Common Stock for which one or more options to any Employee under this Plan (or any other option plan of the Company or its parent or subsidiary corporations) may for the first time become exercisable as an Incentive Option during any one calendar year shall not exceed the sum of $100,000. To the extent the Employee holds two or more such options which become exercisable for the first time in the same calendar year, the foregoing limitation on the exercisability thereof as Incentive Options shall be applied on the basis of the order in which such options are granted. (c) Maximum Term. If the individual to whom the Incentive Option is granted is a 10% Stockholder (as defined in subparagraph V.1.b above) on the date of the option grant, then the option shall not have a term in excess of five years from the grant date, and the exercise price may not be less than 110% of fair market value. Except as modified by the preceding provisions of this Article VI, all the terms and conditions of the Plan shall be applicable to the Incentive Options granted hereunder. VII. CORPORATE TRANSACTION (a) In the event of one or more of the following transactions to which the Company is a party ("Corporate Transaction"): (i) a merger or acquisition in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the State of the Company's incorporation; (ii) the sale, transfer or other disposition of all or substantially all of the assets of the Company; or (iii) any reverse merger in which the Company is the surviving entity, then each option outstanding under the Plan shall automatically become exercisable, during the five (5) business day period immediately prior to the specified effective date for the Corporate Transaction, with respect to the full number of shares of Common Stock at 9 the time subject to such option and may be exercised for all or any portion of such shares. However, an outstanding option under the Plan shall not be so accelerated if and to the extent: (i) such option is, in connection with the Corporate Transaction, either to be assumed by the successor corporation or parent thereof or be replaced with a comparable option to purchase shares of the capital stock of the successor corporation or parent thereof or (ii) the acceleration of such option would, when added to the present value of certain other payments in the nature of compensation which become due and payable to the option holder in connection with the Corporate Transaction, result in the payment to such individual of an excess parachute payment under Section 280G(b) of the Internal Revenue Code. In addition, outstanding repurchase rights under the Plan will terminate upon the Corporate Transaction, unless (i) the repurchase right is to be assigned to the successor corporation or (ii) the termination of such repurchase right would, when added to the present value of certain other payments in the nature of compensation which become due and payable to the option holder in connection with the Corporate Transaction, result in the payment to such individual of an excess parachute payment under Section 280G(b) of the Internal Revenue Code. The existence of any such excess parachute payment shall be determined by the Plan Administrator in the exercise of its reasonable business judgment and on the basis of tax counsel provided the Company. Upon the consummation of the Corporate Transaction, all outstanding options under the Plan shall, to the extent not previously exercised or assumed by the successor corporation or its parent corporation, terminate and cease to be exercisable. (b) Each outstanding option which is assumed in connection with the Corporate Transaction or is otherwise to continue in effect shall be appropriately adjusted, immediately after such Corporate Transaction, to apply and pertain to the number and class of securities which would have been issuable, in consummation of such Corporate Transaction, to an actual holder of the same number of shares of Common Stock as are subject to such option immediately prior to such Corporate Transaction. Appropriate adjustments shall also be made to the option price payable per share, provided the aggregate option price payable for such securities shall remain the same. In addition, the class and number of securities available for issuance under the Plan following the consummation of the Corporate Transaction shall be appropriately adjusted. (c) In connection with any Corporate Transaction, the exercisability of an incentive stock option under the Federal tax laws of any accelerated option shall be subject to the applicable dollar limitation of paragraph VI(c)(i). The grant of options under this Plan shall in no way affect the right of the Company to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merger, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. VIII. CANCELLATION AND NEW GRANT OF OPTIONS The Plan Administrator shall have the authority to effect, at any time and from time to time, with the consent of the affected option holders, the cancellation of any or all outstanding 10 options under the Plan and to grant in substitution therefor new options under the Plan covering the same or different numbers of shares of Common Stock but having an option price per share not less than (I) eighty-five percent (85%) of the fair market value per share of Common Stock on the new grant date, or (ii) one hundred percent (100%) of such fair market value if the new option is to be an Incentive Option or (iii) one hundred ten percent (110%) of fair market value in the case of a 10% Stockholder. IX. SURRENDER OF OPTIONS FOR CASH OR STOCK (a) One or more option holders may, upon such terms and conditions as the Plan Administrator may establish at the time of the option grant or at any time thereafter, be granted the right to surrender all or part of an unexercised option in exchange for a distribution equal in amount to the excess of (i) the fair market value (on the option surrender date) of the number of shares in which the optionee is at the time vested under the surrendered option (or surrendered portion) over (ii) the aggregate option price payable for such shares. No surrender of an option, however, shall be effective unless it is approved by the Plan Administrator granting such right. If the surrender is so approved, then the distribution to which the option holder shall accordingly become entitled under this Article IX may be made in shares of Common Stock valued at fair market value at date of surrender, in cash, or partly in shares and partly in cash, as the Plan Administrator granting such right shall in its sole discretion deem appropriate. (b) If the surrender of the option is not approved by the Plan Administrator granting such right, then the option holder shall retain whatever rights the option holder had under the surrendered option (or surrendered portion thereof) on the date of surrender and may exercise such rights at any time prior to the later of (i) the expiration of the 5 business-day period following receipt of the rejection notice or (ii) the last day on which the option is otherwise exercisable in accordance with the terms of the instrument evidencing such option, but in no event may such rights be exercised at any time after ten (10) years from the date of the option grant. (c) Special limited stock appreciation rights may be granted by the Plan Administrator in tandem with one or more option grants made under the Plan. The grant and exercise of such rights shall be subject to the following terms and conditions: Pre-September 1, 1992 Grants. Limited rights may be granted prior to September 1, 1992 to one or more officers or directors of the Company subject to the short-swing profit restrictions of Section 16(b) of the Securities Exchange Act of 1934 ("Section 16 Insider"). Such limited rights shall be exercisable as follows: a. Upon the occurrence of a Change in Control at a time when one or more classes of the Company's equity securities are registered under Section 12(g) of the Exchange Act, each Section 16 Insider who holds such a limited right in tandem with one or more of his/her outstanding options under the Plan may surrender those options, to the 11 extent such options (I) have been outstanding with such limited rights for at least six (6) months and (II) are at the time exercisable for one or more shares. In exchange for each option so surrendered, the Section 16 Insider shall receive an Appreciation Distribution from the Company in an amount equal to the excess of (i) the Change in Control Price of the number of shares for which the surrendered option (or surrendered portion) is at the time exercisable over (ii) the aggregate option price payable for such shares. b. Neither the approval of the Plan Administrator granting the limited right nor the consent of the Board shall be required in connection with the exercise of such right, and the Appreciation Distribution shall be made entirely in cash. c. For purposes of such Appreciation Distribution, the following definitions shall be in effect: Change-in-Control: the occurrence of any of the following transactions: (i) the acquisition by a person or related group of persons, other than the Company or a person that directly or indirectly controls, is controlled by or is under common control with the Company, of twenty-five percent (25%) or more of the Company's outstanding Common Stock pursuant to a tender or exchange offer which the Board does not recommend the stockholders to accept, (ii) the acquisition by a person or related group of persons, other than the Company or a person that directly or indirectly controls, is controlled by or is under common control with the Company, of fifty percent (50%) or more of the Company's outstanding Common Stock in a single transaction or in a series of related transactions (other than a Corporate Transaction), or (iii) a change in the composition of the Board such that the individuals elected to the Board at the last meeting of the stockholders at which there is not a contested election subsequently cease to comprise a majority of the Board by reason of a contested election for Board membership. Chance in Control Price: the greater of (a) the fair market value per share of Common Stock on the date of the option surrender, as determined in accordance with the normal valuation provisions of the Plan, or (b) the highest reported price per share paid in acquiring ownership of the twenty-five percent (25%) or greater interest in the Company's outstanding Common Stock in connection with the Change in Control. However, if the surrendered option is an Incentive Option, then the Change in Control Price per share of the Common Stock subject to the surrendered option shall not exceed the value per share determined under clause (a). Post-August 31, 1992 Grants. One or more Section 16 Insiders may, in the discretion of the Plan Administrator, be granted limited stock appreciation rights on or after September 1, 1992 in tandem with the option grants made to such individuals under the Plan. Any limited right so granted shall become exercisable as follows: 12 a. Upon the occurrence of a Hostile Take-Over at a time when one or more classes of the Company's equity securities are registered under Section 12(g) of the Exchange Act, each outstanding option held by the Section 16(b) Insider with such a limited right in effect for at least six (6) months shall automatically be cancelled, to the extent such option is at the time exercisable for fully-vested shares of Common Stock. The Section 16(b) Insider shall in return be entitled to a cash distribution from the Company in an amount equal to the excess of (I) the Take-Over Price of the shares of Common Stock which are at the time vested under the cancelled option (or cancelled portion) over (II) the aggregate exercise price payable for such vested shares. The balance of the option (if any) shall continue in full force and effect in accordance with the instrument evidencing such grant. b. The cash distribution payable upon such cancellation shall be made within five (5) days following the consummation of the Hostile Take-Over. Neither the approval of the Plan Administrator nor the consent of the Board shall be required in connection with such option cancellation and cash distribution. c. For purposes of such option cancellation and cash distribution, the following definitions shall be in effect: A Hostile Take-Over shall be deemed to occur in the event (i) any person or related group of persons (other than the Company or a person that directly or indirectly controls, is controlled by, or is under common control with, the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of twenty-five percent (25%) or more of Company's outstanding Common Stock pursuant to a tender or exchange offer made directly to the Company's stockholders which the Board does not recommend such stockholders to accept and (ii) more than fifty percent (50%) of the securities so acquired in such tender or exchange offer are accepted from holders other than Company officers and directors participating in this Plan or the 1989 Nonemployee Director Stock Option Plan. The Take-Over Price per share shall be deemed to be equal to the greater of (I) the fair market value per share on the option cancellation date, as determined pursuant to the normal valuation provisions of the Plan, or (ii) the highest reported price per share paid in effecting such Hostile Take-Over. However, if the cancelled option is an Incentive Option, then the Take-Over Price per share of the Common Stock subject to the cancelled option shall not exceed the value per share determined under clause (I). X. LOANS OR GUARANTEES OF LOANS The Plan Administrator may assist any optionee (including any officer or director) in the exercise of one or more options granted by such Plan Administrator to such optionee under the Plan by (a) authorizing the extension of a loan to such optionee from the Company, 13 (b) permitting the optionee to pay the option price for the purchased Common Stock in installments over a period of years or (c) authorizing a guarantee by the Company of a third-party loan to the optionee. The terms of any loan, installment method of payment or guarantee (including the interest rate and terms of repayment) will be established by the Plan Administrator in its sole discretion. Loans, installment payments and guarantees may be granted without security or collateral (other than to optionees who are consultants or independent contractors, in which event the loan must be adequately secured by collateral other than the purchased shares), but the maximum credit available to the optionee shall not exceed the sum of (I) the aggregate option price payable for the purchased shares (less the par value of those shares), plus (ii) any Federal and State income and employment tax liability incurred by the optionee in connection with the exercise of the option. XI. SPECIAL TAX WITHHOLDING ELECTION The Plan Administrator may, in its discretion and in accordance with the provisions of this Article XI and such supplemental rules as the Plan Administrator may from time to time adopt, provide any or all holders of the non-statutory options granted by such Plan Administrator under the Plan with the right to use shares of the Common Stock in satisfaction of the Federal and State income and employment tax withholding liability incurred by such holders in connection with the exercise of their options (the "Withholding Taxes"). Such right may be provided to any such option holder in either or both of the following formats: 1. Stock Withholding: The holder of the non-statutory option may be provided with the election to have the Company withhold, from the shares of Common Stock otherwise issuable upon the exercise of such non-statutory option, a portion of such shares with an aggregate fair market value equal to the designated percentage (up to 100% as specified by the option holder) of the applicable Withholding Taxes. Any such stock withholding election shall be subject to the following terms and conditions: (i) The election must be made on or before the date the amount of the Federal and State income and employment tax liability incurred by the option holder in connection with the exercise of the option is determined (the "Tax Determination Date"). (ii) The election shall be irrevocable. (iii) The election shall be subject to the approval of the Plan Administrator, and none of the shares of Common Stock for which the option is exercised shall be withheld in satisfaction of the Withholding Taxes incurred in connection with such exercise except to the extent the Plan Administrator approves the election. 14 (iv) The shares of Common Stock withheld pursuant to the election shall be valued at fair market value on the Tax Determination Date in accordance with the valuation procedures of the Plan. (v) In no event may the number of shares requested to be withheld exceed in value the dollar amount of Withholding Taxes incurred by the option holder in connection with the exercise of the nonqualified option. If the stock withholding election is to be made by a Section 16 Insider, then the following limitations, in addition to the preceding provisions of this Article XI, shall also be applicable: (i) The election shall not become effective at any time prior to the expiration of the six (6)-month period measured from the later of the grant date of the non-statutory option to which such election pertains or the actual grant date of the stock withholding election, and no shares shall accordingly be withheld in connection with any Tax Determination Date which occurs before the expiration of such six (6)-month period. (ii) The election must be effected in accordance with either of the following guidelines: - The election must be made six (6) months or more prior to the Tax Determination Date, or - The exercise of such election and the exercise of the non-statutory option to which it relates must occur concurrently within a quarterly "window" period. Quarterly window periods shall begin on the third (3rd) business day following the date of public release of each quarterly or annual summary statement of the Company's sales and earnings and end on the earlier of the twelfth (12th) business day following such release date or the Tax Determination Date. (iii) The six (6)-month period specified in clauses (i) and (ii) shall not be applicable in the event of the option holder's death or disability. 2. Stock Delivery: The Plan Administrator may, in its discretion, provide the holder of the non-statutory option with the election to deliver, at the time the non-statutory option is exercised, one or more shares of Common Stock already held by such individual with an aggregate fair market value equal to the designated percentage (up to 100% as specified by the option holder) of the Withholding Taxes incurred by such individual in connection with such option exercise. Any such stock delivery election shall be subject to the following terms and conditions: 15 (i) The election must be made on or before the date the amount of the Federal and State income and employment tax liability incurred by the option holder in connection with the exercise of the option is determined (the "Tax Determination Date"). (ii) The election shall be irrevocable. (iii) The election shall be subject to the approval of the Plan Administrator, and none of the delivered shares of Common Stock shall be accepted in satisfaction of the Withholding Taxes incurred in connection with the option exercise except to the extent the election is approved by the Plan Administrator. (iv) The shares of Common Stock delivered in satisfaction of such Withholding Taxes shall be valued at fair market value on the Tax Determination Date in accordance with the valuation procedures of the Plan. (v) In no event may the number of delivered shares exceed in value the dollar amount of Withholding Taxes incurred by the option holder in connection with the exercise of the non-statutory option. Any stock delivery election made by an individual who is at the time a Section 16 Insider shall not be subject to any of the special limitations which would otherwise be applicable to such individual in connection with the exercise of the stock withholding election specified above. XII. AMENDMENT OF THE PLAN The Board shall have complete and exclusive power and authority to amend or modify the Plan in any or all respects whatsoever; provided, however, that no such amendment or modification shall, without the consent of the holders, adversely affect rights and obligations with respect to options at the time outstanding under the Plan. In addition, the Board shall not, without the approval of the Company's stockholders, (I) increase the maximum number of shares issuable under the Plan, except for permissible adjustments under paragraph IV(b), or (ii) materially modify the eligibility requirements for the grant of options under the Plan. XIII. EFFECTIVE DATE AND TERM OF PLAN (a) The restated Plan was adopted by the Board in August 1987, and approved by the Company's stockholders in February 1988, as a consolidation of the Company's 1982 Incentive Stock Option Plan and 1982 Supplemental Stock Option Plan. The Plan supersedes those two plans and serves as their successor. The Plan was restated in October 1988, and amended in November 1990, November 1991, February 1995, and February 1996, to increase the number of shares issuable under the Plan by 750,000, 1,000,000, 1,400,000 1,000,000 and 1,400,000 shares, respectively. The October 1988 restatement, November 1990, November 1991, December 1993 and February 1996 amendments were approved by the Company's stockholders in February 16 1989, February l991, February l992, February 1994 and March 1996, respectively. The Plan was restated on January 13, 1998 to increase the number of shares issuable thereunder, to extend the term of the Plan and to delete obsolete provisions and the restatement was approved by the stockholders on March 10, 1998. (b) The Plan Administrator may, within the scope of its administrative functions under the Plan, grant stock options and stock appreciation rights under the Plan at any time after the date the Plan was initially adopted and prior to the date the Plan is to terminate in accordance with paragraph (e) below. (c) The Plan was restated by the Board effective July 30, 1992 to bring the Plan in compliance with the applicable requirements of revised SEC Rule 16b-3, as amended May 1, 1991, under the Securities Exchange Act of 1934. Such restatement shall apply only to options granted under the Plan from and after the July 30, 1992 effective date. Each option (together with any related stock appreciation rights) issued and outstanding under the Plan immediately prior to such effective date shall continue to be governed by the terms and conditions of the Plan (and the instrument evidencing such option) as in effect on the date such option was previously granted, and nothing in the July 30, 1992 restatement shall be deemed to affect or otherwise modify the rights or obligations of the holders of such options with respect to the acquisition of shares thereunder or the exercise of their outstanding stock appreciation rights. (d) The sale and remittance procedure authorized for the exercise of outstanding options shall be available for all options granted under the Plan from and after July 30, 1992 and for all non-statutory options exercised under the Plan on or after May 1, 1991. The Primary Committee may also allow such procedure to be utilized in connection with one or more disqualifying dispositions of incentive stock option shares effected on or after May 1, l991. (e) Unless sooner terminated in accordance with Article VII, the Plan shall terminate upon the earlier of (i) January 12, 2008 or (ii) the date on which all shares available for issuance under the restated Plan shall have been issued or cancelled pursuant to the exercise, surrender or cancellation of the options granted hereunder. If the date of termination is determined under clause (i) above, then any options outstanding on such date (together with any stock appreciation rights pertaining to such options) shall not be affected by the termination of the Plan and shall continue to have force and effect in accordance with the provisions of the instruments evidencing such options (or related stock appreciation rights). (f) Options may be granted under this Plan to purchase shares of Common Stock in excess of the number of shares then available for issuance under the Plan, provided (I) an amendment to increase the maximum number of shares issuable under the Plan is adopted by the Board prior to the initial grant of any such option and is thereafter submitted to the Company's stockholders for approval and (ii) each option so granted is not to become exercisable, in whole or in part, at any time prior to the obtaining of such stockholder approval. 17 XIV. USE OF PROCEEDS Any cash proceeds received by the Company from the sale of shares pursuant to options granted under the Plan shall be used for general corporate purposes. XV. REGULATORY APPROVALS The implementation of the Plan, the granting of any option hereunder, and the issuance of Common Stock upon the exercise or surrender of any such option shall be subject to the Company's procurement of all approvals and permits required by regulatory authorities having jurisdiction over the Plan, the options granted under it and the Common Stock issued pursuant to it. EX-4.3 3 SEEQ TECHNOLOGY, INC. 1989 NONEMPLOYEE DIRECTOR 1 EXHIBIT 4.3 SEEQ TECHNOLOGY INCORPORATED 1989 NONEMPLOYEE DIRECTOR STOCK OPTION PLAN (As Amended January 13, 1998) ARTICLE I GENERAL PROVISIONS PURPOSES OF THE PLAN This 1989 Nonemployee Director Stock Option Plan (the "Plan") is intended to promote the interests of SEEQ Technology Incorporated, a Delaware corporation (the "Corporation"), by offering nonemployee members of the Board of Directors the opportunity to participate in a special stock option program designed to provide them with significant incentives to remain in the service of the Corporation. ELIGIBILITY A. Each nonemployee member of the Corporation's Board of Directors (the "Board") shall be eligible to receive automatic option grants pursuant to the provisions of Article II below. B. Except for the automatic option grants to be made pursuant to the provisions of Article II below, nonemployee Board members shall not be eligible to receive any additional option grants or stock issuances under this Plan or any other stock plan of the Corporation or its Parent or Subsidiary corporations. STOCK SUBJECT TO THE PLAN A. The stock issuable under the Plan shall be shares of the Corporation's common stock ("Common Stock"). Such shares may be made available from authorized but unissued shares of Common Stock or shares of Common Stock reacquired by the Corporation. The aggregate number of issuable shares shall not exceed 300,000 shares, subject to adjustment from time to time in accordance with subparagraph D below. B. Should an option expire or terminate for any reason prior to exercise in full, the shares subject to the portion of the option not so exercised shall be available for subsequent option grants under this Plan. In the event that shares issued under the Plan are reacquired by the Company pursuant to any forfeiture provision, or right of repurchase, such 2 shares shall again be available for subsequent option grants under the Plan. Shares subject to any option canceled in accordance with the automatic cancellation provisions of the Plan and all share issuances under the Plan shall reduce on a share-for-share basis the number of shares of Common Stock available for subsequent option grants under the Plan. In addition, should the exercise price of any outstanding option under the Plan be paid through the delivery of existing shares of Common Stock, the number of shares of Common Stock available for subsequent option grants under the Plan shall not be reduced by the gross number of shares of Common Stock for which the option is exercised, but by the net number of shares actually issued to the option holder. C. Should the total number of shares at the time available for grant under the Plan not be sufficient for the automatic grants to be made at that particular time to the nonemployee Board members, then the available shares shall be allocated proportionately among all the automatic grants to be made at that time. D. In the event any change is made to the Common Stock issuable under the Plan by reason of any stock split, stock dividend, combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without receipt of consideration, then appropriate adjustments will be made to (i) the aggregate number and/or class of shares of Common Stock available for issuance under the Plan, (ii) the number of shares of Common Stock to be made the subject of each subsequent automatic grant and (iii) the number and/or class of shares of Common Stock purchasable under each outstanding option and the exercise price payable per share in order to prevent the dilution or enlargement of benefits thereunder. VALUATION For purposes of establishing the option price and for all other valuation purposes under the Plan, the Fair Market Value per share of the Common Stock on any relevant date shall be determined in accordance with the following rules: A. If the Common Stock is not at the time listed or admitted to trading on any national securities exchange but is traded on the Nasdaq National Market, then the fair market value shall be the closing selling price per share of Common Stock on the date in question, as such price is reported by the National Association of Securities Dealers, Inc. on the Nasdaq National Market. If there is no reported closing selling price for the Common Stock on the date in question, then the closing selling price on the last preceding date for which such quotation exists shall be determinative of fair market value. B. If the Common Stock is at the time listed or admitted to trading on any national securities exchange, then the fair market value shall be the closing selling price per share of Common Stock on the date in question on the securities exchange serving as the primary market for the Common Stock as such price is officially quoted on such exchange. If there is no reported sale of Common Stock on such exchange on the date in question, then the fair market 3 value shall be the closing selling price on the exchange on the last preceding date for which such quotation exists. PARENT AND SUBSIDIARY CORPORATIONS A. A corporation shall be deemed to be a Parent of the Corporation if it is one of the corporations (other than the Corporation) in an unbroken chain of corporations ending with the Corporation, provided each such corporation (other than the Corporation) owns, at the time of determination, stock possessing fifty (50) percent or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. B. A corporation shall be deemed to be a Subsidiary of the Corporation if it is one of the corporations (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation, provided each such corporation (other than the last corporation in the unbroken chain) owns, at the time of determination, stock possessing fifty (50) percent or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. For purposes of the Corporate Transaction provisions of the Plan, the term "Subsidiary" shall also include any partnership, joint venture or other business entity of which the Corporation owns, directly or indirectly through another subsidiary corporation, more than a fifty percent (50%) interest in voting power, capital or profits. ARTICLE II AUTOMATIC GRANT PROGRAM GRANT DATES A. Each individual who was serving as a nonemployee member of the Board on November 8, 1989 was automatically awarded, on such date, a nonstatutory option to purchase 20,000 shares of Common Stock. Commencing with the 1991 Annual Meeting and continuing in effect for each subsequent Annual Meeting of the Corporation's stockholders, each individual who is at the time reelected as a nonemployee member of the Board shall receive an additional grant under the Plan for 10,000 shares. An individual who is first elected or appointed as a nonemployee Board member at any time after the 1990 Annual Meeting shall receive his/her initial automatic grant for 20,000 shares at the time of his/her initial election or appointment to the Board and shall be eligible for subsequent 10,000 share grants commencing with the second Annual Meeting following the date of his/her initial election or appointment as a nonemployee Board member. B. In no event shall any nonemployee Board member be eligible to receive an initial 20,000-share option grant or any 10,000-share annual option grants under the Plan if such 4 individual has been appointed or elected to the Board pursuant to any contractual or other right or arrangement. TERMS AND CONDITIONS OF GRANT Each option granted in accordance with the automatic grant provisions of this Article II shall be evidenced by an instrument in the form of the prototype non-statutory stock option agreement and restricted stock purchase agreement attached to the Plan as Exhibits A and B. Accordingly, each such automatic grant shall be subject to the following terms and conditions: 1. Option Price. The option price per share shall be one hundred percent (100%) of the Fair Market Value per share of Common Stock on the automatic grant date. 2. Term and Exercisability of Options. (a) Each option granted on or after March 10, 1998 under the initial automatic grant shall become exercisable in twenty-four (24) equal monthly installments from the date of the Annual Stockholder Meeting at which it is granted. Each option granted on or after March 10, 1998 under the annual automatic grant shall become exercisable in twelve (12) equal monthly installments from the date of the Annual Stockholders Meeting at which it is granted. The option shall thereafter remain so exercisable until the expiration or sooner termination of the option term. (b) Upon the non-employee Board member's cessation of Board service for reason of death or permanent disability, all of the automatic options granted shall become fully exercisable. For all relevant purposes under this Article II, disability shall mean the optionee's inability, by reason of any physical or mental injury or illness expected to result in death or to be of continuous duration of twelve (12) consecutive months or more, to perform his/her normal and usual duties as a Board member. (c) Each granted option shall have a maximum term of ten (10) years measured from the automatic grant date. 3. Exercise of Option. Upon exercise of the option, the option price for the purchased shares shall become immediately payable in one of the alternate forms specified below: (a) cash or cash equivalents (such as a personal check payable to the Corporation's order); or 5 (b) shares of Common Stock held by the optionee for the requisite period necessary to avoid a charge to the Corporation's reported earnings and valued at Fair Market Value on the date of exercise; or (c) full payment through a special sale and remittance procedure pursuant to which the Optionee is to provide irrevocable written instructions (i) to a Corporation-designated brokerage firm to effect the immediate sale of the purchased shares and remit to the Corporation, out of the sale proceeds available on the settlement date, an amount sufficient to cover the aggregate option price payable for the purchased shares and (ii) to the Corporation to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale transaction; or (d) any combination of the foregoing so long as the total payment equals the aggregate option price for the purchased shares. 4. Nontransferability. During the lifetime of the optionee, the option, together with any stock appreciation right pertaining to such option, shall be exercisable only by the optionee and shall not be assignable or transferable by the optionee other than a transfer of the option by will or by the laws of descent and distribution following the optionee's death. 5. Effect of Termination of Board Membership. (a) Should an optionee cease to be a member of the Board for any reason (other than death) prior to the expiration of one or more automatic grants under this Article II, then each such grant shall remain exercisable, for any shares of Common Stock for which the option is exercisable or in which the optionee is vested at the time of cessation of Board membership, for a three (3) month period following the date of such cessation of Board membership. (b) Should an optionee cease to be a member of the Board by reason of optionee's death, then any outstanding automatic grant held by the optionee at the time of death may be subsequently exercised, for any or all of the option shares, by the personal representative of the optionee's estate or by the person or persons to whom the option is transferred pursuant to the optionee's will or in accordance with the laws of descent and distribution. Any such exercise must, however, occur within twelve (12) months after the date of the optionee's death. (c) In no event shall any automatic option grant remain exercisable after the specified expiration date of the ten (10)-year option term. Upon the expiration of the applicable exercise period specified in subparagraphs a and b above or (if earlier) upon the expiration of the ten (10) year option term, the option shall terminate and cease to be exercisable. 6 6. Stockholder Rights. An option holder shall have none of the rights of a stockholder with respect to any shares covered by the automatic grant until such individual shall have exercised the option, paid the option price and been issued a stock certificate for the purchased shares. CORPORATE TRANSACTION In the event of one or more of the following transactions ("Corporate Transaction"): 1. a merger or acquisition in which the Corporation is not the surviving entity, except for a transaction the principal purpose of which is to change the State of the Corporation's incorporation; 2. the sale, transfer or other disposition of all or substantially all of the assets of the Corporation to any entity other than a Subsidiary of the Corporation; or 3. any reverse merger in which the Corporation is the surviving entity but in which fifty (50) percent or more of the Corporation's outstanding voting stock is transferred to holders different from those who held the stock immediately prior to such merger; then each automatic option grant at the time outstanding under this Article II Program and not otherwise at the time fully exercisable shall automatically accelerate and become immediately exercisable for any or all of the shares subject to the option, and any unvested shares at that time outstanding under the Plan or otherwise issuable pursuant to outstanding option grants under the Plan will immediately vest in full. Immediately following the consummation of such Corporate Transaction, all outstanding options under this Article II shall terminate and cease to be exercisable, except to the extent assumed by the successor corporation (or its parent company). CHANGE IN CONTROL A. In the event there should occur a Change in Control (as defined below), then each automatic option grant at the time outstanding under the Plan and not otherwise at the time fully exercisable shall automatically accelerate and become fully exercisable for any or all of the shares at the time subject to such option, and any unvested shares at that time outstanding under the Plan or otherwise issuable pursuant to outstanding option grants under the Plan will immediately vest in full. B. In addition, each option which has been outstanding for at least six months will be automatically canceled on the tenth business day following the Change in Control, in exchange for a cash payment from the Corporation equal to the excess of (i) the fair market value on the date of cancellation of the shares of Common Stock for which the canceled option is at the 7 time exercisable, whether or not such shares are otherwise at the time vested, over (ii) the option price payable for such shares. For purposes of determining the amount payable to an optionee upon cancellation of the option, the fair market value of the shares for which the canceled option is exercisable will be deemed to be equal to the greater of the Fair Market Value per share on the date of cancellation or, if applicable, the highest reported price per share paid by the tender offeror in effecting the Change in Control. C. A Change in Control shall be deemed to occur should (i) a person or related group of persons, other than the Corporation or a person that directly or indirectly controls, is controlled by, or is under common control with the Corporation, acquire twenty-five percent (25%) or more of the outstanding Common Stock pursuant to a tender or exchange offer which the Board does not recommend the stockholders to accept or should (ii) a change in the composition of the Board occur such that the individuals elected to the Board at the last stockholder meeting at which there is not a contested election subsequently cease to comprise a majority of the Board by reason of a contested election for Board membership. RESERVATION OF RIGHTS The automatic grants in effect under this Article II shall in no way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. ARTICLE III MISCELLANEOUS PROVISIONS AMENDMENT OF THE PLAN The Board shall have complete and exclusive power and authority to amend or modify the Plan in any or all respects whatsoever; provided, however, that in no event shall any amendments or modifications be made to the Plan which (i) alter rights and obligations with respect to options at the time outstanding under the Plan without the optionee's consent, or (ii) require stockholder approval without obtaining stockholder approval to the extent required by law for any such amendments. EFFECTIVE DATE AND TERM OF PLAN A. The Plan became effective on the date of its adoption by the Board. The Plan was amended on January 13, 1998 to increase the number of shares issuable, to simplify the vesting schedules, to extend the term, and to delete obsolete provisions. The amendment was approved by the stockholders at the 1998 Annual Meeting. 8 B. The Plan shall terminate upon the earliest to occur of (i) January 12, 2008, (ii) the date on which all shares available for issuance under the Plan shall have been issued pursuant to the exercise of the automatic grants made hereunder or (iii) the date on which all outstanding options are cashed out in connection with the Change in Control provisions of the Plan. If the date of termination is determined under clause (i) or (ii) above, then any option grants or unvested shares outstanding on such date shall not be affected by the termination of the Plan and shall continue to have force and effect in accordance with the provisions of the instruments evidencing such grants or issuances. CASH PROCEEDS Any cash proceeds received by the Corporation from the sale of shares pursuant to the automatic grants made under the Plan shall be used for general corporate purposes. REGULATORY APPROVALS The implementation of the Plan, the granting of any option hereunder, and the issuance of Common Stock upon the exercise of any such option shall be subject to the Corporation's procurement of all approvals and permits required by regulatory authorities having jurisdiction over the Plan, the options granted under it and the Common Stock issued pursuant to it. NO IMPAIRMENT OF RIGHTS Nothing in this Plan or any automatic grant made pursuant to the Plan shall be construed or interpreted so as to affect adversely or otherwise impair the Corporation's right to remove any Optionee from service on the Board at any time in accordance with the provisions of applicable law. ARTICLE IV SPECIAL ONE-TIME OPTION GRANTS SPECIAL GRANTS On the date of the 1996 Annual Stockholders Meeting, a special one-time option grant shall be made to the following nonemployee Board members: an option grant for 40,000 shares of Common Stock to the Corporation's Chairman of the Board, Mr. Alan V. Gregory, and an option for 10,000 shares of Common Stock to the other eligible nonemployee Board member who has not been appointed to the Board pursuant to any contractual or other right or arrangement, Mr. Charles C. Harwood. These special one-time grants were approved by the stockholders at the 1996 Annual Meeting. 9 TERMS AND CONDITIONS OF SPECIAL GRANT Each option granted in accordance with the provisions of this Article IV shall be subject to the following terms and conditions and shall be evidenced by a stock option agreement incorporating such terms and conditions: 1. Option Price. The option price per share shall be one hundred percent (100%) of the Fair Market Value per share of Common Stock on the grant date. 2. Term and Exercisability of Options. (a) Each option shall become exercisable for any or all of the option shares upon the optionee's completion of six (6) months of Board service measured from the grant date. (b) Each option shall have a maximum term of ten (10) years measured from the grant date. 3. Repurchase Rights. Any unvested shares of Common Stock purchased upon the exercise of an Article IV grant shall be subject to repurchase by the Corporation, at the original option price paid per share, upon the optionee's cessation of Board membership for any reason other than death or disability prior to his completion of one (1) year of Board service measured from the grant date. 4. Nontransferability. During the lifetime of the optionee, the option, together with any stock appreciation right pertaining to such option, shall be exercisable only by the optionee and shall not be assignable or transferable by the optionee other than a transfer of the option by will or by the laws of descent and distribution following the optionee's death. 5. Remaining Terms and Provisions. All the remaining terms and provisions of the special one-time option grants to be made pursuant to this Article IV shall be the same as those in effect for the automatic option grants made pursuant to the Article II Program. EX-5.1 4 OPINION OF COUNSEL 1 EXHIBIT 5.1 June 24, 1999 LSI Logic Corporation 1551 McCarthy Blvd. Milpitas, CA 95035 RE: REGISTRATION STATEMENT ON FORM S-8 Ladies and Gentlemen: We have acted as counsel to LSI Logic Corporation, a Delaware corporation (the "Company" or "you") and have examined the Registration Statement on Form S-8 (the "Registration Statement") to be filed by the Company with the Securities and Exchange Commission on or about June 24, 1999 in connection with the registration under the Securities Act of 1933, as amended (the "1933 Act") of 378,043 shares of your Common Stock (the "Shares"), reserved for issuance under the SEEQ Technology Incorporated Restated 1982 Stock Plan, as Amended and Restated and the SEEQ Technology Incorporated 1989 Nonemployee Director Stock Option, Plan, as Amended (collectively, the "Plans"). As your legal counsel, we have examined the Restated Certificate of Incorporation and Bylaws of the Company, the Plans and such other documents of the Company as we have deemed necessary or appropriate for the purposes of the opinion expressed herein, and are familiar with the proceedings proposed to be taken by you in connection with the operation and administration of the Plans and the sale and issuance of the Shares pursuant to the Plans. It is our opinion that, upon completion of the actions being taken, or contemplated by us as your counsel to be taken by you prior to the issuance of the Shares pursuant to the Registration Statement and the Plans, and upon completion of the actions being taken in order to permit such transactions to be carried out in accordance with the securities laws of the various states where required, the Shares will be legally and validly issued, fully paid and nonassessable. We consent to the use of this opinion as an exhibit to the Registration Statement and further consent to the use of our name wherever appearing in the Registration Statement and any subsequent amendment thereto. Very truly yours, WILSON SONSINI GOODRICH & ROSATI Professional Corporation /s/ WILSON SONSINI GOODRICH & ROSATI EX-23.1 5 CONSENT OF INDEPENDENT ACCOUNTANTS 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 pertaining to the SEEQ Technology Incorporated Restated 1982 Stock Plan, as Amended and Restated and the SEEQ Technology Incorporated 1989 Nonemployee Director Stock Option, Plan, as Amended, of our report dated February 22, 1999, which appears on page 58 of the LSI Logic Corporation's Annual Report on Form 10-K and 10-K/A for the year ended December 31, 1998 and the related financial statement schedule included therein, filed with the Securities and Exchange Commission. /s/ PricewaterhouseCoopers LLP June 24, 1999 San Jose, California -----END PRIVACY-ENHANCED MESSAGE-----