-----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, Avl4UU00LmwvC9nwJ2DAyAw1nf9ZTFi5u8RbVBKHGA7K5U3teKa9KG6GliDOEj7b sjF/i8bf0WnNzqFXuDXRwQ== 0000891618-96-001905.txt : 19960828 0000891618-96-001905.hdr.sgml : 19960828 ACCESSION NUMBER: 0000891618-96-001905 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19960827 EFFECTIVENESS DATE: 19960915 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADVANCED LOGIC RESEARCH INC CENTRAL INDEX KEY: 0000861289 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPUTERS [3571] IRS NUMBER: 330084573 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-10865 FILM NUMBER: 96621195 BUSINESS ADDRESS: STREET 1: 9401 JERONIMO ROAD CITY: IRVINE STATE: CA ZIP: 92718 BUSINESS PHONE: 7145816770 MAIL ADDRESS: STREET 1: ADVANCED LOGIC RESEARCH INC STREET 2: 9401 JERONIMO CITY: IRVINE STATE: CA ZIP: 92718 S-8 1 FORM S-8 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 27, 1996 REGISTRATION NO. 333-____________ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________ FORM S-8 REGISTRATION STATEMENT Under The Securities Act of 1933 ______________________ ADVANCED LOGIC RESEARCH, INC. (Exact name of Registrant as specified in its charter) ______________________ DELAWARE 33-0084573 (State or other jurisdiction (I.R.S. Employer Identification No.) of incorporation or organization) 9401 JERONIMO ROAD IRVINE, CALIFORNIA 92718-1908 (Address of principal executive offices) (Zip code) ______________________ DIRECTORS' NON-QUALIFIED STOCK OPTION PLAN (Full title of the Plan) ______________________ GENE LU CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER ADVANCED LOGIC RESEARCH, INC. 9401 JERONIMO ROAD, IRVINE, CALIFORNIA 92718-1908 (Address, including zip code, of agent for service) (714) 581-6770 (Telephone number, including area code, of agent for service) ______________________ CALCULATION OF REGISTRATION FEE
Proposed Proposed Title of Maximum Maximum Securities Amount Offering Aggregate Amount of to be to be Price Offering Registration Registered Registered(1) per Share(2) Price(2) Fee Options to purchase 120,000 N/A N/A N/A Common Stock Common Stock, 120,000 shares $7.375 $885,000 $305.17 $0.01 par value
(1) This Registration Statement shall also cover any additional shares of Common Stock which become issuable under the Directors' Non-Qualified Stock Option Plan by reason of any stock dividend, stock split, recapitalization or any other similar transaction without receipt of consideration which results in an increase in the number of outstanding shares of Common Stock of Advanced Logic Research, Inc. (2) Calculated solely for purposes of this offering under Rule 457(h) of the Securities Act of 1933, as amended, on the basis of the average of the high and low selling prices per share of Common Stock of Advanced Logic Research, Inc. on August 22, 1996, as reported by the Nasdaq National Market. 2 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE Advanced Logic Research, Inc. (the "Registrant") hereby incorporates by reference into this Registration Statement the following documents previously filed with the Securities and Exchange Commission (the "SEC"): (a) The Registrant's Annual Report on Form 10-K for the fiscal year ended September 30, 1995, filed with the SEC on December 27, 1995; (b) The Registrant's Quarterly Reports on Form 10-Q for the fiscal quarters ended December 31, 1995, March 31, 1996, and June 30, 1996, filed with the SEC on February 14, 1996, May 15, 1996, and August 14, 1996, respectively; (c) The Registrant's Registration Statement No. 00-018753 on Form 8-A, filed with the SEC on August 8, 1990, in which there is described the terms, rights and provisions applicable to the Registrant's outstanding Common Stock. All reports and definitive proxy or information statements filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the "1934 Act"), after the date of this Registration Statement and prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold shall be deemed to be incorporated by reference into this Registration Statement and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any subsequently filed document which also is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. ITEM 4. DESCRIPTION OF SECURITIES Not Applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL Not Applicable. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS As authorized by the Delaware General Corporation Law, as amended (the "Delaware Law"), the Registrant's charter documents provide that no director of the Registrant will be personally liable to the Registrant or its stockholders for monetary damages for breach of fiduciary duty as a director except for liability (i) for any breach of the director's duty of loyalty to the Registrant or its stockholders, (ii) for acts or omissions 3 not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) in respect of certain unlawful dividend payments or stock redemptions or repurchases and (iv) for any transaction from which the director derives an improper personal benefit. The effect of this provision is to eliminate the rights of the Registrant and its stockholders (through stockholders' derivative suits on behalf of the Registrant) to recover monetary damages against a director for breach of the fiduciary duty of care as a director (including breaches resulting from negligent or grossly negligent behavior) except in the situations described in clauses (i) through (iv) above. This provision does not limit or eliminate the rights of the Registrant or any stockholder to seek nonmonetary relief such as an injunction or rescission in the event of a breach of a director's duty of care. In addition, the Registrant's charter documents provide for indemnification of the directors and officers of the Registrant to the fullest extent authorized under Delaware Law, and that if the Delaware Law is amended to authorize broader indemnification of officers and directors or the further elimination or limitation of the liability of a director, then such indemnification shall be increased and such liability shall be eliminated or limited to the fullest extent permitted by the Delaware Law, as so amended. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED Not Applicable. ITEM 8. EXHIBITS
Exhibit No. Exhibit - ----------- ------- 4 Instruments Defining Rights of Stockholders. Reference is made to Registrant's Registration Statement No. 00-018753 on Form 8-A which is incorporated herein by reference pursuant to Item 3(c). 5 Opinion of Brobeck, Phleger & Harrison LLP. 23.1 Consent of Independent Accountants -- KPMG Peat Marwick LLP. 23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in Exhibit 5. 24 Power of Attorney. Reference is made to page II-4 of this Registration Statement. 99.1 Directors' Non-Qualified Stock Option Plan. 99.2 Form of Directors' Non-Qualified Stock Option Agreement.
ITEM 9. UNDERTAKINGS A. The undersigned Registrant hereby undertakes: (1) to file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the "1933 Act"), (ii) to reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement and (iii) to include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; provided, however, that clauses (1)(i) and (1)(ii) shall not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the 1934 Act that are incorporated by reference into this Registration Statement; (2) that for the purpose of determining any liability under the 1933 Act, each such post-effective amendment shall be deemed to be a new registration statement 4 relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and (3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold upon the termination of the Registrant's Directors' Non-Qualified Stock Option Plan. B. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the 1933 Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is incorporated by reference into this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. C. Insofar as indemnification for liabilities arising under the 1933 Act may be permitted to directors, officers or controlling persons of the Registrant pursuant to the indemnity provisions incorporated by reference in Item 6, or otherwise, the Registrant has been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the 1933 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the 1933 Act and will be governed by the final adjudication of such issue. 5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Irvine, State of California on this 22nd day of August, 1996. ADVANCED LOGIC RESEARCH, INC. By: /s/ Gene Lu ------------------------------------- Gene Lu Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: That the undersigned officers and directors of Advanced Logic Research, Inc., a Delaware corporation, do hereby constitute and appoint Gene Lu and Ronald J. Sipkovich, and each of them, the lawful attorneys-in-fact and agents, with full power and authority to do any and all acts and things and to execute any and all instruments which said attorneys and agents, or either one of them, determine may be necessary or advisable or required to enable said corporation to comply with the Securities Act of 1933, as amended, and any rules or regulation or requirements of the Securities and Exchange Commission in connection with this Registration Statement. Without limiting the generality of the foregoing power and authority, the powers granted include the power and authority to sign the names of the undersigned officers and directors in the capacities indicated below to this Registration Statement, to any and all amendments, both pre-effective and post-effective, and supplements to this Registration Statement and to any and all instruments or documents filed as part of or in conjunction with this Registration Statement or amendments or supplements thereof, and each of the undersigned hereby ratifies and confirms all that said attorneys and agents, or either one of them, shall do or cause to be done by virtue hereof. This Power of Attorney may be signed in several counterparts. IN WITNESS WHEREOF, each of the undersigned has executed this Power of Attorney as of the date indicated. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
Signatures Title Date - ---------- ----- ---- /s/ Gene Lu Chairman of the Board, President August 22, 1996 - ---------------------------- and Chief Executive Officer Gene Lu (Principal Executive Officer)
6
Signatures Title Date - ---------- ----- ---- /s/ Ronald J. Sipkovich Vice President, Finance and August 22, 1996 - --------------------------- Administration, Chief Financial Ronald J. Sipkovich Officer and Secretary (Principal Financial and Accounting Officer) /s/ Chun Win Wong Director August 22, 1996 - --------------------------- Chun Win Wong /s/ Philip A. Harding Director August 22, 1996 - --------------------------- Philip A. Harding /s/ Therese E. Myers Director August 22, 1996 - --------------------------- Therese E. Myers Director , 1996 - --------------------------- --------- Kenneth W. Simonds
7 EXHIBIT INDEX
Exhibit No. Exhibit - ----------- ------- 4 Instruments Defining Rights of Stockholders. Reference is made to Registrant's Registration Statement No. 00-018753 on Form 8-A, which is incorporated herein by reference pursuant to Item 3(c). 5 Opinion of Brobeck, Phleger & Harrison LLP. 23.1 Consent of Independent Accountants - KPMG Peat Marwick LLP. 23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in Exhibit 5. 24 Power of Attorney. Reference is made to page II-4 of this Registration Statement. 99.1 Directors' Non-Qualified Stock Option Plan. 99.2 Form of Directors' Non-Qualified Stock Option Agreement.
EX-5 2 OPINION OF BROBECK PHLEGER & HARRISON LLP 1 EXHIBIT 5 Opinion of Brobeck, Phleger & Harrison LLP August 26, 1996 ADVANCED LOGIC RESEARCH, INC. 9401 Jeronimo Road Irvine, California 92718-1908 RE: ADVANCED LOGIC RESEARCH, INC. (THE "CORPORATION") -- REGISTRATION STATEMENT FOR OFFERING OF 120,000 SHARES OF COMMON STOCK Ladies and Gentlemen: We refer to your registration on Form S-8 (the "Registration Statement") under the Securities Act of 1933, as amended, of 120,000 shares of the Corporation's Common Stock authorized for issuance under the Directors' Non-Qualified Stock Option Plan (the "Plan"). We advise you that, in our opinion, when such shares have been issued and sold pursuant to the provisions of the Plan, and in accordance with the Registration Statement, such shares will be validly issued, fully paid and non-assessable shares of the Corporation's Common Stock. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. Very truly yours, /s/ BROBECK, PHLEGER & HARRISON LLP ----------------------------------- BROBECK, PHLEGER & HARRISON LLP EX-23.1 3 CONSENT OF INDEPENDENT ACCOUNTANTS 1 Exhibit 23.1 CONSENT OF INDEPENDENT AUDITORS The Board of Directors Advanced Logic Research, Inc.: We consent to incorporation by reference in the registration statement on Form S-8 of Advanced Logic Research, Inc. of our report dated November 2, 1995, relating to the consolidated balance sheets of Advanced Logic Research, Inc. and subsidiaries as of September 30, 1995 and 1994, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the years in the three-year period ended September 30, 1995, and related schedule, which report appears in the September 30, 1995 annual report on Form 10-K of Advanced Logic Research, Inc. /s/ KPMG PEAT MARWICK LLP ------------------------- Orange County, California August 22, 1996 EX-99.1 4 DIRECTORS' NON-QUALIFIED STOCK OPTION PLAN 1 Exhibit 99.1 ADVANCED LOGIC RESEARCH, INC. DIRECTORS' NON-QUALIFIED STOCK OPTION PLAN (As amended through November 8, 1995) 1. Establishment, Purpose, and Definitions. (a) There is hereby adopted the Directors' Non-Qualified Stock Option Plan (the "Plan") of Advanced Logic Research, Inc. (the "Company"). The Plan is intended to provide a means whereby eligible directors of the Company, as described in subparagraph 3(b) ("Participants"), may be given an opportunity to purchase shares of Stock (as defined in Paragraph 3 of the Plan) of the Company (the "Stock") pursuant to options which are not intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code as amended from time to time. (b) The purpose of this Plan is to provide incentives to Participants for increased efforts and successful achievements on behalf of or in the interests of the Company while serving on the Company's Board of Directors (the "Board") and to maximize the rewards due them for such increased efforts and successful achievements. (c) The term "affiliates" as used in the Plan means parent or subsidiary corporations, as defined in Section 424(e) and (f) of the Internal Revenue Code (but substituting "the Company" for "employer corporation"), including parents or subsidiaries which become such after adoption of the Plan. 2. Administration of the Plan. Administration of the Plan shall be self-executing in accordance with the express terms of the Plan and neither the Board nor any committee of the Board shall exercise any discretionary function with respect to option grants made thereunder. 3. Stock Subject to the Plan. (a) Stock shall mean Common Stock, $0.01 par value, of the Company or such stock as the Common Stock may be changed into as contemplated by subparagraph 3(c) below. The maximum number of shares of Stock which may be issued over the term of the Plan shall not exceed 120,000(1) shares. (b) An option to purchase 5,000 shares of Stock shall be granted ("Initial Grant") to each director who is not an officer of the Company ("Non-Employee Director"), such Initial Grant to be made on the later of (i) the date of adoption by the - -------- (1)Includes the 60,000-share increase approved by the Board on November 8, 1995, and approved by the Company's stockholders at the 1996 Annual Meeting. 2 Board of the Plan or (ii) the date the Non-Employee Director is initially elected to serve on the Board. Thereafter, immediately following each annual meeting of the Company's stockholders, each Non-Employee Director who continues as a Non-Employee Director following such annual meeting shall be granted an option to purchase 2,500 shares of Stock ("Subsequent Grant"), provided that no Subsequent Grant shall be made to any such Non- Employee Director who has not served as a director of the Company for at least one (1) year from the date of his or her Initial Grant. Each such Subsequent Grant shall be made on the date of the annual stockholders' meeting in question. If any option ceases to be exercisable in whole or in part, the shares which were subject to such option but as to which the option had not been exercised shall continue to be available under the Plan. (c) If there shall be any change in the Stock subject to the Plan, including Stock subject to any option granted hereunder, through merger, consolidation, reorganization, reincorporation, or other similar change in the corporate structure of the Company, appropriate adjustments may be made by the Board in order to preserve but not to increase the benefits to Participants, including adjustments in the number of shares and the price per share subject to outstanding options granted hereunder. Consistent with the foregoing, in the event that the outstanding Common Stock of the Company is changed into another class or series of capital stock of the Company, outstanding options granted under the Plan shall become options to purchase such other class or series and the provisions of this subparagraph 3(c) shall apply to such new class or series. 4. Eligibility. All Non-Employee Directors shall be eligible to receive grants of Stock options as provided in subparagraph 3(b) hereof. 5. Exercise Price for Options Granted Under the Plan. The exercise price of the Stock covered by each option shall be the per-share fair market value of such Stock on the date the option is granted. The price of an option granted under the Plan shall be subject to adjustment to the extent provided in subparagraph 3(c), above. 6. Terms and Conditions of Options. (a) Each option granted pursuant to the Plan shall be evidenced by a written stock option agreement executed by the Company and the person to whom such option is granted. (b) Each option granted pursuant to the Plan shall have a term of ten (10) years and one (1) month measured from the option grant date. (c) No option granted under the Plan may be exercised prior to six (6) months following the date of grant. After such six (6)-month period, the option may be exercised for any or all of the shares of Stock subject to such option as fully vested shares of Stock. 2. 3 (d) Should a Participant cease to serve as a Non-Employee Director for any reason during the six (6)-month period following the date of grant of an option, then such option shall, immediately upon such cessation of Board service, terminate and cease to be outstanding. (e) Should a Participant cease to serve as a Non-Employee Director for any reason after the six (6)-month period following the date of grant of an option, then such Participant shall have a one (1)-year period following the date of such cessation of Board service in which to exercise such option for any or all of the shares of Stock subject to such option as fully vested shares of Common Stock. In no event, however, shall an option remain exercisable after the expiration of the option term. Upon expiration of the one (1)-year post-service exercise period or (if earlier) upon the expiration of the option term, the option shall terminate and cease to be outstanding with respect to any shares of Stock for which the option has not been exercised. 7. Use of Proceeds. Cash proceeds realized from the sale of Stock pursuant to Stock issued under the Plan shall constitute general funds of the Company. 8. Amendment of the Plan. The Board shall have complete and exclusive power and authority to amend or modify the Plan in any or all respects. However, (i) the Plan, together with the option grants outstanding hereunder, may not be amended at intervals more frequently than once every six (6) months, other than to the extent necessary to comply with applicable Federal income tax laws and regulations and (ii) no such amendment or modification shall adversely affect the rights and obligations with respect to options at the time outstanding under the Plan unless the Participant consents to such amendment or modification. In addition, the Board shall not, without the approval of the Company's stockholders, (i) materially increase the maximum number of shares issuable under the Plan or the number of shares for which options may be granted to each Participant, except for permissible adjustments in the event of certain changes in the Company's capitalization, (ii) materially modify the eligibility requirements for Plan participation or (iii) materially increase the benefits accruing to Participants. 9. Assignability of Options. Each option to purchase Stock granted pursuant to this Plan shall, during the Participant's lifetime, be exercisable only by the Participant, and the option shall not be transferable by the Participant by operation of law or otherwise other than by will, the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Internal Revenue Code, or Title I of ERISA, or the rules thereunder, or otherwise as permitted by Rule 16b-3 of the Securities and Exchange Commission. 10. Payment Upon Exercise. Payment of the exercise price upon exercise of any option to purchase Stock granted under this Plan shall be made in whole or in part with (i) cash, (ii) shares of Stock held by the Participant for the requisite period necessary to avoid a charge to the Company's earnings for financial reporting purposes and valued at 3. 4 fair market value on the date of the exercise of the option, or (iii) through a special sale and remittance procedure pursuant to which the Participant shall concurrently provide irrevocable written instructions to (A) a Company-designated brokerage firm to effect the immediate sale of the purchased shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate option exercise price payable for the purchased shares plus all applicable Federal and State income and employment taxes required to be withheld by the Company in connection with such exercise and (B) the Company to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale transaction. 11. Withholding Taxes. (a) Shares of Stock issued hereunder shall be delivered to a Participant only upon payment by such person to the Company of the amount of any withholding tax which may be imposed thereon under the provisions of the Internal Revenue Code as then in effect or any law or any other taxing jurisdiction requiring such withholding tax. (b) The Board may, under such terms and conditions as it deems appropriate, authorize a Participant to satisfy withholding tax obligations under this paragraph 11 by delivering shares of Stock or by electing to have the Company withhold from the Stock to be issued to the Participant shares of Stock having a fair market value equal to the amount of the withholding tax required to be withheld. 12. Effective Date of Plan. The Plan became effective when adopted by the Board in August 1990 and was approved by the Company's stockholders in February 1991. On May 12, 1992, the Board amended the Plan to bring it into compliance with the requirements of Rule 16b-3 of the Securities and Exchange Commission. On November 8, 1995, the Board further amended the Plan to increase the maximum number of shares of Stock reserved for issuance over the term thereof from 60,000 to 120,000 shares. Such 60,000-share increase was approved by the Company's stockholders at the 1996 Annual Meeting. 4. EX-99.2 5 DIRECTORS' NON-QUALIFIED STOCK OPTION AGREEMENT 1 Exhibit 99.2 ADVANCED LOGIC RESEARCH, INC. DIRECTORS' NON-QUALIFIED STOCK OPTION AGREEMENT This agreement is made as of _______________, 199__ (the "Grant Date"), between ADVANCED LOGIC RESEARCH, INC., a Delaware corporation (the "Company"), and _________________ ("Optionee") (the "Agreement"). WITNESSETH: WHEREAS, the Company has adopted the Advanced Logic Research, Inc. Directors' Non-Qualified Stock Option Plan (the "Plan"), which Plan is incorporated in this Agreement by reference and made a part of it; WHEREAS, the Company desires to provide additional incentives and rewards for Optionee's work as a director of the Company; and WHEREAS, the Company has determined that it would be to the advantage and in the interest of the Company and its stockholders to grant the options provided for in the Agreement to Optionee for that purpose. NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties to this Agreement hereby agree as follows: 1. Option Grant. Subject to obtaining approval of the Plan by the Company's stockholders, the Company hereby grants to Optionee the right and option to purchase from the Company on the terms and conditions hereinafter set forth, all or any part of an aggregate of ( ) shares of the Common Stock of the Company (the "Stock"). The exercise price of the stock subject to this option shall be $ per share. 2. Option Period. This option shall be exercisable only during the Option Period, and during such Option Period, the exercisability of the option shall be subject to the limitations of paragraph 3 and the vesting provisions of paragraph 4. The Option Period shall commence on the Grant Date and, except as provided in paragraph 3, shall end on the Terminal Date which shall be ten years and one month from the Grant Date. 3. Limits on Option Period. The Option Period may end before the Terminal Date, as follows: a. If Optionee ceases to be a director on the Company's Board of 2 Directors (the "Board") for any reason other than cause, disability (within the meaning of subparagraph (c)) or death during the Option Period, the Option Period shall terminate one year after the date Optionee ceases to be a director or on the Terminal Date, whichever shall first occur, and the option shall be exercisable only to the extent exercisable under paragraph 4 on the date Optionee ceases to be a director. b. If Optionee should die while serving on the Company's Board, the Option Period shall end one year after the date of death or on the Terminal Date, whichever shall first occur, and Optionee's executor or administrator or the person or persons to whom Optionee's rights under this option shall pass by will or by the applicable laws of descent and distribution may exercise the entire unexercised portion of this option (or any lesser amount). c. If Optionee ceases to be a director by reason of disability, as defined below, the Option Period shall end one year after the date Optionee ceases to be a director or on the Terminal Date, whichever shall first occur, and the option shall be exercisable only to the extent exercisable under paragraph 4 on the date Optionee ceases to be a director. For purposes of this subparagraph (c), an individual is permanently and totally disabled if he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which as lasted or can be expected to last for a continuous period of not less than 12 months. An individual shall not be considered to be permanently and totally disabled unless he furnishes proof of the existence thereof in such form and manner, and at such times, as the Board may require. d. If Optionee is removed from the Board for cause during the Option Period, the Option Period shall terminate on the date of such Optionee's removal as a director and shall not thereafter be exercisable to any extent. 4. Vesting of Right to Exercise Options. The shares covered by this option shall vest as to one hundred percent (100%) of the number of shares covered by the option, at any time after six months from the Grant Date. No partial exercise of this option may be for less than five percent (5%) of the total number of shares then available under this option to purchase shares of Stock. In no event shall the Company be required to issue fractional shares. 5. Method of Exercise. Optionee may exercise the option with respect to all of any part of the shares of Stock then subject to such exercise as follows: a. By giving the Company written notice of such exercise, specifying the number of such shares as to which this option is exercised. Such notice shall be accompanied by an amount equal to the exercise price of such shares, in the form of any one or combination of the following: cash; a certified check, bank draft, postal or express money order payable to the order of the Company in lawful money of 2. 3 the United States; or, if permitted by the Board, shares of Stock valued at fair market value in accordance with procedures established by the Board, or a full-recourse, interest-bearing note including such terms as the Board determines appropriate. b. If required by the Company, Optionee shall give the Company satisfactory assurance in writing, signed by Optionee or Optionee's legal representative, as the case may be, that such shares are being purchased for investment and not with a view to the distribution thereof, provided that such assurance shall be deemed inapplicable to (1) any sale of such shares by such Optionee made in accordance with the terms of a registration statement covering such sale, which has heretofore been (or may hereafter be) filed and become effective under the Securities Act of 1933, as amended, and with respect to which no stop order suspending the effectiveness thereof has been issued, and (2) any other sale of such shares with respect to which in the opinion of counsel for the Company, such assurance is not required to be given in order to comply with the provisions of the Securities Act of 1993, as amended. As soon as practicable after receipt of the notice required in paragraph 5(a) and satisfaction of the conditions set forth in paragraph 5(b), the Company shall, without transfer or issue tax and without other incidental expense to Optionee, deliver to Optionee at the office of the Company, at 9401 Jeronimo, Irvine, California 92718, attention of the Corporate Secretary, or such other place as may be mutually acceptable to the Company and Optionee, a certificate or certificates of such shares of Stock; provided, however, that the time of such delivery may be postponed by the Company for such period as may be required for it with reasonable diligence to comply with applicable registration requirements under the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, any applicable listing requirements of any national securities exchange, and requirements under any other law or regulation applicable to the issuance or transfer of such shares. If Optionee fails to accept delivery of and pay for all or any part of the number of shares specified in such notice upon tender or delivery thereof, Optionee's right to purchase such shares may be terminated by the Company at its election. 6. Corporate Transactions. If there should be any change in the Stock subject to this option, through merger, consolidation, reorganization, reincorporation, or other similar change in the corporate structure of the Company, the Company may make appropriate adjustments in order to preserve, but not to increase, the benefits to Optionee, including adjustments in the number of shares subject to this option and in the exercise price per share. If there shall be any change in the Stock subject to the option herein granted, through recapitalization, stock split, stock dividend (in excess of two percent) or other similar change in the corporate structure of the Company, adjustments shall automatically occur to preserve but not increase the benefits to the Optionee, including adjustments in the number of shares subject to this option and in the exercise price per share. Any adjustment made pursuant to this paragraph 6 as a consequence of a change in the corporate structure of the Company shall not entitle Optionee to acquire 3. 4 a number of shares of Stock of the Company or shares of stock of any successor company greater than the number of shares Optionee would receive if, prior to such change, Optionee had actually held a number of shares of Stock equal to the number of shares then subject to this option. 7. Limitations on Transfer. This option shall, during Optionee's lifetime, be exercisable only by Optionee, and neither this option nor any right hereunder shall be transferable by Optionee by operation of law or otherwise other than by will or the laws of descent and distribution. In the event of any attempt by Optionee to alienate, assign, pledge, hypothecate, or otherwise dispose of this option or of any right hereunder, except as provided for in this Agreement, or in the event of the levy of any attachment, execution, or similar process upon the rights or interest hereby conferred, the Company at its election may terminate this option by notice to Optionee and this option shall thereupon become null and void. 8. No Stockholder Rights. Neither Optionee nor any person entitled to exercise Optionee's rights in the event of Optionee's death shall have any of the rights of a stockholder with respect to the shares of Stock subject to this option except to the extent the certificates for such shares shall have been issued upon the exercise of this option. 9. Notice. Any notice required to be given under the terms of this Agreement shall be addressed to the Company in care of its Corporate Secretary at the office of the Company at 9401 Jeronimo, Irvine, California 92718, and any notice to be given to Optionee shall be addressed to Optionee at the address given by Optionee beneath Optionee's signature to this Agreement, or such other address as either party to this Agreement may hereafter designate in writing to the other. Any such notice shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified and deposited (postage and registration or certification fee prepaid) in a post office or branch post office regularly maintained by the United States. 10. Board Decisions Conclusive. All decisions of the Board upon any question arising under the Plan or under this Agreement shall be conclusive. 11. Successors. This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company. Where the context permits, "Optionee" as used in this Agreement shall include Optionee's executor, administrator or other legal representative or the person or persons to whom Optionee's rights pass by will or the applicable laws of descent and distribution. 12. Withholding. Optionee agrees to make appropriate arrangements with the Company for satisfaction of any applicable federal, state or local income tax withholding requirements or social security requirements. 4. 5 13. Governing Law. The interpretation, performance, and enforcement of this Agreement shall be governed by the laws of the State of California. IN WITNESS WHEREOF, this Agreement has been executed as of the day and year first written above. ADVANCED LOGIC RESEARCH, INC. By_______________________________ _________________________________ _______________________, Optionee Address: _________________________________ _________________________________ 5. -----END PRIVACY-ENHANCED MESSAGE-----