-----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, AzIPHdM+t5j4eWKywF5baHeJMkdBc+0FEyLKDZh6ql81tRcuF6c4cdSQPxamwUr1 uEVjYgPjiwk8heMbu63x3w== 0000891554-00-000944.txt : 20000405 0000891554-00-000944.hdr.sgml : 20000405 ACCESSION NUMBER: 0000891554-00-000944 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 20000404 EFFECTIVENESS DATE: 20000404 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLEXTRONICS INTERNATIONAL LTD CENTRAL INDEX KEY: 0000866374 STANDARD INDUSTRIAL CLASSIFICATION: PRINTED CIRCUIT BOARDS [3672] IRS NUMBER: 000000000 FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-34016 FILM NUMBER: 593523 BUSINESS ADDRESS: STREET 1: 11 UBI ROAD 1 STREET 2: #07 01 02 MEIBAN INDUSTRIAL BLDG CITY: SINGAPORE 408723 STATE: U0 BUSINESS PHONE: 0654495255 FORMER COMPANY: FORMER CONFORMED NAME: FLEX HOLDINGS PTE LTD DATE OF NAME CHANGE: 19940201 S-8 1 FORM S-8 As filed with the Securities and Exchange Commission on April 4, 2000 Registration No. 333- ________ - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Flextronics International Ltd. (Exact Name of Registrant as Specified in Its Charter) Singapore Not Applicable (State or Other Jurisdiction (I.R.S. Employer of Incorporation or Organization) Identification No.) 11 Ubi Road 1, #07-01/02, Meiban Industrial Building, Singapore 408723 (Address of Principal Executive Offices) Flextronics International Ltd. 1993 Share Option Plan Share options granted under The DII Group, Inc. 1993 Stock Option Plan assumed by the Registrant Share options granted under The DII Group, Inc. 1994 Stock Incentive Plan assumed by the Registrant Share options granted under the Orbit Semiconductor, Inc. 1994 Stock Incentive Plan assumed by the Registrant Share options granted under the KMOS Semi-Customs, Inc. 1989 Stock Option Plan assumed by the Registrant Share options granted under the KMOS Semi-Customs 1990 Non-Qualified Stock Option Plan assumed by the Registrant (Full Title of the Plans) Michael E. Marks Chairman and Chief Executive Officer Flextronics International Ltd. 11 Ubi Road 1, #07-01/02 Meiban Industrial Building Singapore 408723 (65) 844-3366 (Name, Address and Telephone Number of Agent For Service) ---------- Copies to: David K. Michaels, Esq. Tram T. Phi, Esq. Fenwick & West LLP Two Palo Alto Square Palo Alto, California 94306 This Registration Statement shall become effective immediately upon filing with the Securities and Exchange Commission, and sales of the registered securities will begin as soon as reasonably practicable after such effective date. CALCULATION OF REGISTRATION FEE
Title of Amount Proposed Maximum Proposed Securities to be Offering Price Maximum Aggregate Amount of to be Registered Registered Per Share Offering Price (6) Registration Fee ---------------- ---------- --------- ------------------ ---------------- Ordinary Shares, S$0.01 par value 4,000,000 (1) $66.7500(6) $267,000,000.00 $70,488.00 Ordinary Shares, S$0.01 par value 1,243,634 (2) $5.9517 (7) $7,401,736.48 $1,954.06 Ordinary Shares, S$0.01 par value 3,885,239 (3) $10.3511 (7) $40,216,497.41 $10,617.16 Ordinary Shares, S$0.01 par value 106,222 (4) $5.6998 (7) $605,444.16 $159.84 Ordinary Shares, S$0.01 par value 5,957 (5) $1.3003 (7) $7,745.89 $2.04
(1) Represents additional shares available for issuance under the Flextronics International Ltd. 1993 Share Option Plan. Pursuant to Rule 429 promulgated under the Securities Act of 1933, as amended (the "Securities Act"), the prospectuses relating to this Registration Statement also relate to the shares registered under Form S-8 Registration Statement Nos. 33-99924, 333-42255, 333-71049 and 333-95189. A total of 16,400,000 shares issuable under the 1993 Share Option Plan has previously been registered under the Securities Act. (2) Represents shares subject to assumed outstanding share options as of April 4, 2000 granted under The DII Group, Inc. 1993 Stock Option Plan. (3) Represents shares subject to assumed outstanding share options as of April 4, 2000 granted under The DII Group, Inc. 1994 Stock Incentive Plan. (4) Represents shares subject to assumed outstanding share options as of April 4, 2000 granted under the Orbit Semiconductor, Inc. 1994 Stock Incentive Plan. (5) Represents shares subject to assumed outstanding share options as of April 4, 2000 granted under the KMOS Semi-Customs, Inc. 1989 Stock Option Plan and the KMOS Semi-Customs 1990 Non-Qualified Stock Option Plan. (6) 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 prices per Ordinary Share of Flextronics International Ltd. on March 30, 2000 as reported by the Nasdaq National Market. (7) Represents weighted average per share exercise price for such outstanding options, calculated pursuant to Rule 457(h)(1) solely for the purpose of calculating the registration fee. - -------------------------------------------------------------------------------- Item 3. Incorporation of Documents by Reference. The following documents filed with the Securities and Exchange Commission (the "Commission") are incorporated herein by reference: (a) the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 1999, as amended, filed pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which Annual Report contains audited financial statements for the fiscal year ended March 31, 1999; (b) the Registrant's Quarterly Reports on Form 10-Q for the fiscal quarters ended June 25, 1999, September 24, 1999 and December 31, 1999 filed pursuant to Section 13(a) of the Exchange Act; (c) the Registrant's Current Reports on Form 8-K filed with the Commission on October 29, 1999, December 6, 1999 and December 23, 1999; and (d) the description of the Registrant's Ordinary Shares contained in the Registrant's registration statement on Form 8-A filed with the Commission under Section 12(g) of the Exchange Act. All documents subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective amendment which indicates that all securities registered hereby have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference herein and to be a part hereof from the date of the filing of such documents. Item 4. Description of Securities. Not Applicable. Item 5. Interests of Named Experts and Counsel. Not Applicable. Item 6. Indemnification of Directors and Officers. Article 155 of the Flextronics articles provides that, subject to the Singapore Companies Act, every director or other officer shall be entitled to be indemnified by Flextronics against all liabilities incurred by him in the execution and discharge of his duties or in relation thereto, including any liability in defending any proceedings, civil or criminal, which relate to anything done or omitted or alleged to have been done or omitted by him as an officer or employee of Flextronics and in which judgment is given in his favor, or the proceedings otherwise disposed of without finding or admission of any material breach of duty; in which he is acquitted; or in connection with any application under any statute for relief from liability for any act or omission in which relief is granted to him by the court. In addition, no director or other officer shall be liable for the acts, receipts, neglects or defaults of any other director or officer, joining in any receipt or other act for conformity, any loss or expense happening to Flextronics, through the insufficiency or deficiency of title to any property acquired by order of the directors for Flextronics or for the insufficiency or deficiency of any security upon which any of the moneys of Flextronics are invested or for any loss or damage arising from the bankruptcy, insolvency or tortious act of any person with whom any moneys, securities or effects are deposited, or any other loss or misfortune which happens in the execution of his duties, unless the same happens through his own negligence, willful default, breach of duty or breach of trust. Section 172 of the Companies Act renders void any provision for indemnifying a company's directors or officers against liability which by law would otherwise attach to them for any negligence, default, breach of duty or breach of trust of which they may be guilty relating to the company. However, a company is not prohibited from purchasing and maintaining insurance against any such liability except where the liability arises out of conduct involving dishonesty or a willful breach of duty, or indemnifying a director or officer against any liability incurred in defending any proceedings, whether civil or criminal, in which judgment is given in his favor or in which he is acquitted, or in connection with any application in relation to liability in which relief is granted to him by the court. Flextronics has entered into indemnification agreements with its officers and directors. These indemnification agreements provide Flextronics' officers and directors with indemnification to the maximum extent permitted by the Companies Act. Flextronics has also obtained a policy of directors' and officers' liability insurance that will insure directors and officers against the cost of defense, settlement or payment of a judgment under certain circumstances. Item 7. Exemption from Registration Claimed. Not Applicable. Item 8. Exhibits. 4.1 Indenture dated as of October 15, 1997 between the Registrant and State Street Bank and Trust Company of California, N.A., as trustee. (Incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K for the event reported on October 15, 1997.) 4.2 1993 Share Option Plan. 4.3 The DII Group, Inc. 1993 Stock Option Plan. 4.4 The DII Group, Inc. 1994 Stock Incentive Plan. 4.5 Orbit Semiconductor, Inc. 1994 Stock Incentive Plan. 4.6 KMOS Semi-Customs, Inc. 1989 Stock Option Plan. 4.7 KMOS Semi-Customs, Inc. 1990 Non-Qualified Stock Option Plan. 5.1 Opinion of Allen & Gledhill. 23.1 Consent of Arthur Andersen LLP. 23.2 Consent of Moore Stephens. 23.3 Consent of Allen & Gledhill (included in Exhibit 5.1). 24.1 Power of Attorney. Reference is made to the signature page of this Registration Statement. Item 9. Undertakings. The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the Registration Statement is on Form S-3, Form S-8 or Form F-3, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions discussed in Item 6 hereof, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered hereby, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all 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 San Jose, State of California, on the 4th day of April, 2000. FLEXTRONICS INTERNATIONAL LTD. By: /s/ Michael E. Marks ----------------------------------- Michael E. Marks Chairman of the Board, Chief Executive Officer and Authorized U.S. Representative POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints jointly and severally, Michael E. Marks and Robert R.B. Dykes and each one of them, his attorneys-in-fact, each with the power of substitution, for him in any and all capacities, to sign any and all amendments to this registration statement (including any and all amendments, including post-effective amendments), 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 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 below by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE - --------- ----- ---- /s/ Michael E. Marks Chairman of the Board, and Chief Executive April 4, 2000 - ------------------------------------ Officer (principal executive officer) Michael E. Marks /s/ Tsui Sung Lam Director April 4, 2000 - ------------------------------------ Tsui Sung Lam /s/ Robert R.B. Dykes President, Systems Group and Chief April 4, 2000 - ------------------------------------ Financial Officer (principal financial Robert R.B. Dykes and accounting officer) /s/ Michael J. Moritz Director April 4, 2000 - ------------------------------------ Michael J. Moritz /s/ Richard L. Sharp Director April 4, 2000 - ------------------------------------ Richard L. Sharp /s/ Patrick Foley Director April 4, 2000 - ------------------------------------ Patrick Foley /s/ Alain Ahkong Director April 4, 2000 - ------------------------------------ Alain Ahkong /s/ Shing Leong Hui Director April 4, 2000 - ------------------------------------ Shing Leong Hui
EXHIBIT INDEX Exhibit Number Document Description - ------ -------------------- 4.1 Indenture dated as of October 15, 1997 between the Registrant and State Street Bank and Trust Company of California, N.A., as trustee. (Incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K for the event reported on October 15, 1997.) 4.2 1993 Share Option Plan. 4.3 The DII Group, Inc. 1993 Stock Option Plan. 4.4 The DII Group, Inc. 1994 Stock Incentive Plan. 4.5 Orbit Semiconductor, Inc. 1994 Stock Incentive Plan. 4.6 KMOS Semi-Customs, Inc. 1989 Stock Option Plan. 4.7 KMOS Semi-Customs, Inc. 1990 Non-Qualified Stock Option Plan. 5.1 Opinion of Allen & Gledhill. 23.1 Consent of Arthur Andersen LLP. 23.2 Consent of Moore Stephens. 23.3 Consent of Allen & Gledhill (included in Exhibit 5.1). 24.1 Power of Attorney. Reference is made to the signature page of this Registration Statement. EX-4.2 2 1993 SHARE OPTION PLAN Exhibit 4.2 FLEXTRONICS INTERNATIONAL LTD. 1993 SHARE OPTION PLAN (As Amended and Restated through March 30, 2000) ARTICLE ONE GENERAL I. PURPOSE OF THE PLAN A. This 1993 Share Option Plan (the "Plan") is intended to promote the interests of Flextronics International Ltd., a Singapore corporation (the "Corporation"), by providing (i) key employees (including officers) of the Corporation (or its parent or subsidiary corporations) who are responsible for the management, growth and financial success of the Corporation (or its parent or subsidiary corporations), (ii) certain non-employee members of the Corporation's Board of Directors (the "Board") and (iii) certain consultants and other independent contractors who provide valuable services to the Corporation (or its parent or subsidiary corporations) with the opportunity to acquire a proprietary interest, or otherwise increase their proprietary interest, in the Corporation as an incentive for them to remain in the service of the Corporation (or its parent or subsidiary corporations). B. The Plan shall become effective on December 1, 1993 upon adoption by the Board, and such date shall accordingly constitute the Effective Date of the Plan. II. DEFINITIONS A. For purposes of the Plan, the following definitions shall be in effect: Board: the Corporation's Board of Directors. Change in Control: a change in ownership or control of the Corporation effected through either of the following transactions: a. the direct or indirect acquisition by any 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) of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation's outstanding securities pursuant to a tender or exchange offer made directly to the Corporation's stockholders which the Board does not recommend such stockholders to accept; or b. a change in the composition of the Board over a period of thirty-six (36) consecutive months or less such that a majority of the Board members (rounded up to the next whole number) ceases, by reason of one or more proxy contests for the election of Board members, to be comprised of individuals who either (i) have been Board members continuously since the beginning of such period or (ii) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause (i) who were still in office at the time such election or nomination was approved by the Board. Code: the U.S. Internal Revenue Code of 1986, as amended. Corporate Transaction: any of the following stockholder-approved transactions to which the Corporation is a party: a. a merger or consolidation in which the Corporation is not the surviving entity, except for a transaction the principal purpose of which is to change the state in which the Corporation is incorporated, b. the sale, transfer or other disposition of all or substantially all of the assets of the Corporation in complete liquidation or dissolution of the Corporation, or c. any reverse merger in which the Corporation is the surviving entity but in which securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation's outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such merger. Employee: an individual who performs services while in the employ of the Corporation or one or more parent or subsidiary corporations, subject to the control and direction of the employer entity not only as to the work to be performed but also as to the manner and method of performance. Exercise Date: the date on which the Corporation shall have received written notice of the option exercise. Fair Market Value: the Fair Market Value per Ordinary Share determined in accordance with the following provisions: a. If the Ordinary Shares are not at the time listed or admitted to trading on any U.S. national stock exchange but are traded on the Nasdaq National Market, the Fair Market Value shall be the closing selling price per Ordinary Share on the date in question, as such price is reported by the National Association of Securities Dealers through the Nasdaq National Market or any successor system. If there is no reported closing selling price for the Ordinary Shares on the date in question, then the closing selling price per Ordinary Share on the last preceding date for which such quotation exists shall be determinative of Fair Market Value. b. If the Ordinary Shares are at the time listed or admitted to trading on any U.S. national stock exchange, then the Fair Market Value shall be the closing selling price per Ordinary Share on the date in question on the U.S. exchange determined by the Plan Administrator to be the primary market for the Ordinary Shares, as such price is officially quoted in the composite tape of transactions on such exchange. If there is no reported sale of the Ordinary Shares on such exchange on the date in question, then the Fair Market Value shall be the closing selling price per Ordinary Share on the exchange on the last preceding date for which such quotation exists. c. If the Ordinary Shares are on the date in question neither listed nor admitted to trading on any U.S. national stock exchange nor traded on the Nasdaq National Market, then the Fair Market Value per Ordinary Share on such date shall be determined by the Plan Administrator after taking into account such factors as the Plan Administrator shall deem appropriate. Hostile Take-Over: a change in ownership of the Corporation effected through the following transaction: a. the direct or indirect acquisition by any 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) of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation's outstanding securities pursuant to a tender or exchange offer made directly to the Corporation's stockholders which the Board does not recommend such stockholders to accept, and b. the acceptance of more than fifty percent (50%) of the securities so acquired in such tender or exchange offer from holders other than Section 16 Insiders. Incentive Option: a stock option which satisfies the requirements of Code Section 422. Initial Automatic Grant Date: January 24, 1994. 1934 Act: the U.S. Securities and Exchange Act of 1934, as amended from time to time. Non-Statutory Option: a stock option not intended to meet the requirements of Code Section 422. Optionee: any person to whom an option is granted under the Discretionary Option Grant or Automatic Option Grant Program in effect under the Plan. Ordinary Shares: ordinary shares of the Corporation with a par value of S$0.01 per share. Parent: any corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation, provided each corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing more than fifty percent (50%) of the total combined voting power of all classes of stock in one of the other corporations in such chain. Permanent Disability or Permanently Disabled: the inability of the Optionee or the Participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment expected to result in death or to be of continuous duration of twelve (12) months or more. Plan Administrator: the particular entity, whether the Primary Committee, the Board or the Secondary Committee, which is authorized to administer the Discretionary Option Grant Program with respect to one or more classes of eligible persons, to the extent such entity is carrying out its administrative functions under that program with respect to the persons under its jurisdiction. Primary Committee: the committee of two (2) or more non-employee Board members appointed by the Board to administer the Discretionary Option Grant Program with respect to Section 16 Insiders. Secondary Committee: the committee of one (1) or more Board members appointed by the Board to administer the Discretionary Option Grant Program with respect to eligible persons other than Section 16 Insiders. Service: the performance of services on a periodic basis to the Corporation (or any parent or subsidiary corporation) in the capacity of an Employee, a non-employee member of the Board or an independent consultant or advisor, except to the extent otherwise specifically provided in the applicable stock option agreement. Section 12(g) Registration Date: the date on which the initial registration of the Ordinary Shares under Section 12(g) of the 1934 Act becomes effective. Section 16 Insider: an officer or director of the Corporation subject to the short-swing profit restrictions of Section 16 of the 1934 Act. Subsidiary: any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing more than fifty percent (50%) of the total combined voting power of all classes of stock in one of the other corporations in such chain. Take-Over Price: the greater of (a) the Fair Market Value per Ordinary Share on the date the particular option to purchase Ordinary Shares is surrendered to the Corporation in connection with a Hostile Take-Over or (b) the highest reported price per Ordinary Share paid by the tender offeror in effecting such Hostile Take-Over. However, if the surrendered option is an Incentive Option, the Take-Over Price shall not exceed the clause (a) price per share. Underwriting Execution Date: the date on which the Underwriting Agreement for the initial public offering of the Ordinary Shares in the U.S. is executed and priced. B. The following provisions shall be applicable in determining the parent and subsidiary corporations of the Corporation: Any corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation shall be considered to be a parent of the Corporation, provided each such corporation in the unbroken chain (other than the Corporation) 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. Each corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation shall be considered to be a subsidiary of the Corporation, provided each such corporation in the unbroken chain (other than the last corporation) 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. III. STRUCTURE OF THE PLAN A. Stock Programs. The Plan shall be divided into two (2) components: the Discretionary Option Grant Program specified in Article Two and the Automatic Option Grant Program specified in Article Three. Under the Discretionary Option Grant Program, eligible individuals may, at the discretion of the Plan Administrator, be granted options to purchase Ordinary Shares in accordance with the provisions of Article Two. Under the Automatic Option Grant Program, non-employee members of the Board will receive special option grants at periodic intervals to purchase Ordinary Shares in accordance with the provisions of Article Three. B. General Provisions. Unless the context clearly indicates otherwise, the provisions of Articles One and Four shall apply to the Discretionary Option Grant and the Automatic Option Grant Programs and shall accordingly govern the interests of all individuals under the Plan. IV. ADMINISTRATION OF THE PLAN A. The Primary Committee shall have sole and exclusive authority to administer the Discretionary Option Grant Program with respect to Section 16 Insiders. No non-employee Board member shall be eligible to serve on the Primary Committee if such individual has, during the twelve (12)-month period immediately preceding the date of his or her appointment to the Committee or (if shorter) the period commencing with the Section 12(g) Registration Date and ending with the date of his or her appointment to the Primary Committee, received an option grant under the Plan or any other stock option, stock appreciation, stock bonus or other stock plan of the Corporation (or any parent or subsidiary corporation), other than pursuant to the Automatic Option Grant Program. B. Administration of the Discretionary Option Grant Program with respect to all other persons eligible to participate in that program may, at the Board's discretion, be vested in the Primary Committee or a Secondary Committee, or the Board may retain the power to administer that program with respect to all such persons. The members of the Secondary Committee may be Board members who are Employees eligible to receive discretionary option grants under the Plan or any other stock option, stock appreciation, stock bonus or other stock plan of the Corporation (or any Parent or Subsidiary). C. Members of the Primary Committee or any Secondary Committee shall serve for such period of time as the Board may determine and may be removed by the Board at any time. The Board may also at any time terminate the functions of any Secondary Committee and reassume all powers and authority previously delegated to such committee. D. Each Plan Administrator shall, within the scope of its administrative functions under the Plan, have full power and authority (subject to the provisions of the Plan) to establish such rules and regulations as it may deem appropriate for proper administration of the Discretionary Option Grant Program and to make such determinations under, and issue such interpretations of the provisions of such program and any outstanding options or stock issuances thereunder as it may deem necessary or advisable. Decisions of the Plan Administrator within the scope of its administrative functions under the Plan shall be final and binding on all parties who have an interest in the Discretionary Option Grant Program under its jurisdiction or any option grant thereunder. E. Service on the Primary Committee or the Secondary Committee shall constitute service as a Board member, and members of each such committee shall accordingly be entitled to full indemnification and reimbursement as Board members for their service on such committee. No member of the Primary Committee or the Secondary Committee shall be liable for any act or omission made in good faith with respect to the Plan or any option grants under the Plan. F. Administration of the Automatic Option Grant Program shall be self-executing in accordance with the terms and conditions of that program, and no Plan Administrator shall exercise any discretionary functions with respect to any option grants made under that program. V. OPTION GRANTS A. The persons eligible to participate in the Discretionary Option Grant Program under Article Two shall be limited to the following: l. officers and other key employees of the Corporation (or its parent or subsidiary corporations) who render services which contribute to the management, growth and financial success of the Corporation (or its parent or subsidiary corporations); and 2. those consultants or other independent contractors who provide valuable services to the Corporation (or its parent or subsidiary corporations) but who are not residents of Singapore. B. Non-employee Board members shall not be eligible to participate in the Discretionary Option Grant Program. Such individuals shall, however, be eligible to receive automatic option grants pursuant to the provisions of Article Three, provided such individuals are not residents of Singapore. C. The Plan Administrator shall have full authority to determine which eligible individuals are to receive option grants under the Discretionary Option Grant Program, the number of Ordinary Shares to be covered by each such grant, the status of the granted option as either an Incentive Option or a Non-Statutory Option, the time or times at which each granted option is to become exercisable and the maximum term for which the option may remain outstanding. VI. STOCK SUBJECT TO THE PLAN A. The maximum number of Ordinary Shares which may be issued over the term of the Plan shall not exceed 20,400,000* Ordinary Shares, subject to adjustment from time to time in accordance with the provisions of this Section VI. The Ordinary Shares reserved for issuance under the Plan shall be drawn from the Corporation's authorized but unissued Ordinary Shares. B. In no event may the aggregate number of Ordinary Shares for which any one individual participating in the Plan may be granted stock options exceed 2,000,000* Ordinary Shares annually. C. Should one or more outstanding options under this Plan expire or terminate for any reason prior to exercise in full (including any option cancelled in accordance with the cancellation-regrant provisions of Section IV of Article Two of the Plan), then the Ordinary Shares subject to the portion of each option not so exercised shall be available for subsequent issuance under the Plan. Ordinary Shares subject to any option or portion thereof surrendered in accordance with Section V of Article Two or Section III of Article Three and all Ordinary Shares issued under the Plan shall reduce on a share-for-share basis the number of Ordinary Shares available for subsequent issuance the Plan. D. Should any change be made to the Ordinary Shares issuable under the Plan by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Ordinary Shares as a class without the Corporation's receipt of consideration, then appropriate adjustments shall be made to (i) the maximum number and/or class of securities issuable under the Plan, (ii) the maximum number and/or class of securities for which any one individual participating in the Plan may be granted stock options over the term of the Plan, (iii) the number and/or class of securities for which automatic option grants are to be subsequently made per newly-elected or continuing non-employee Board member under the Automatic Option Grant Program and (iv) the number and/or class of securities and price per share in effect under each option outstanding under the Discretionary Option Grant or Automatic Option Grant Program. Such adjustments to the outstanding options are to be effected in a manner which shall preclude the enlargement or dilution of rights and benefits under such options. The adjustments determined by the Plan Administrator shall be final, binding and conclusive. ARTICLE TWO DISCRETIONARY OPTION GRANT PROGRAM I. TERMS AND CONDITIONS OF OPTIONS Options granted pursuant to the Discretionary Option Grant Program shall be authorized by action of the Plan Administrator and may, at the Plan Administrator's discretion, be either Incentive Options or Non-Statutory Options. Individuals who are not Employees of the Corporation 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 the form approved by the Plan Administrator; 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 Section II of this Article Two. A. Exercise Price. 1. The exercise price per Ordinary Share shall be fixed by the Plan Administrator in accordance with the following provisions: a. The exercise price per Ordinary Share subject to an Incentive Option shall in no event be less than one hundred percent (100%) of the Fair Market Value per Ordinary Share on the grant date. b. The exercise price per Ordinary Share subject to a Non-Statutory Option shall in no event be less than eighty-five percent (85%) of the Fair Market Value per Ordinary Share on the grant date. c. In no event may the exercise price per Ordinary Share subject to any Incentive or Non-Statutory Option be less than the par value of such Ordinary Share. 2. The exercise price shall become immediately due upon exercise of the option and, subject to the provisions of Section I of Article Four and the instrument evidencing the grant, shall be payable in one of the following alternative forms specified below: a. full payment in cash or check made payable to the Corporation's order; b. full payment through a broker-dealer sale and remittance procedure pursuant to which the Optionee shall provide concurrent irrevocable written instructions (i) to a Corporation-designated brokerage firm to effect the immediate sale of the purchased Ordinary Shares and remit to the Corporation, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased Ordinary Shares plus all applicable Federal, state and local income and employment taxes required to be withheld by the Corporation in connection with such purchase and (ii) to the Corporation to deliver the certificates for the purchased Ordinary Shares directly to such brokerage firm in order to complete the sale transaction; or c. conversion of a convertible note issued by the Corporation or a Subsidiary, the terms of which provide that it is convertible into Ordinary Shares issuable pursuant to the 1993 Plan (with the principal amount and any accrued interest being converted and credited dollar for dollar to the payment of the exercise price). B. Term and Exercise of Options. Each option granted under this Discretionary Option Grant Program shall be exercisable at such time or times and during such period as is determined by the Plan Administrator and set forth in the instrument evidencing the grant. No such option, however, shall have a maximum term in excess of five (5) years measured from the grant date. The option, together with any stock appreciation rights pertaining to such option, shall be assignable or transferable by the Optionee. The Optionee shall be required to comply with all applicable laws in connection with any such transfer or assignment, and the Plan Administrator shall have the discretion to adopt such rules as it deems necessary to ensure that any assignment or transfer is in compliance with all applicable laws. C. Termination of Service. 1. The following provisions shall govern the exercise period applicable to any outstanding options held by the Optionee at the time of cessation of Service or death. a. Should an Optionee cease Service for any reason (including death or Permanent Disability) while holding one or more outstanding options under this Article Two, then none of those options shall (except to the extent otherwise provided pursuant to subparagraph 3 below) remain exercisable for more than a twenty-four (24)-month period (or such shorter period determined by the Plan Administrator and set forth in the instrument evidencing the grant) measured from the date of such cessation of Service. b. Any option held by the Optionee under this Article Two and exercisable in whole or in part on the date of his or her death may be subsequently exercised 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. However, the right to exercise such option shall lapse upon the earlier of (i) the second anniversary of the date of the Optionee's death (or such shorter period determined by the Plan Administrator and set forth in the instrument evidencing the grant) or (ii) the specified expiration date of the option term. Accordingly, upon the occurrence of the earlier event, the option shall terminate and cease to remain outstanding. c. Under no circumstances shall any such option be exercisable after the specified expiration date of the option term. d. During the applicable post-Service exercise period, the option may not be exercised in the aggregate for more than the number of Ordinary Shares (if any) for which that option is exercisable at the time of the Optionee's cessation of Service. Upon the expiration of the limited post-Service exercise period or (if earlier) upon the specified expiration date of the option term, each such option shall terminate and cease to be outstanding with respect to any vested Ordinary Shares for which the option has not otherwise been exercised. However, each outstanding option shall immediately terminate and cease to be outstanding, at the time of the Optionee's cessation of Service, with respect to any Ordinary Shares for which the option is not otherwise at that time exercisable or in which Optionee is not otherwise vested. e. Should (i) the Optionee's Service be terminated for misconduct (including, but not limited to, any act of dishonesty, willful misconduct, fraud or embezzlement) or (ii) the Optionee make any unauthorized use or disclosure of confidential information or trade secrets of the Corporation or its parent or subsidiary corporations, then in any such event all outstanding options held by the Optionee under this Article Two shall terminate immediately and cease to remain outstanding. 2. The Plan Administrator shall have complete discretion, exercisable either at the time the option is granted or at any time while the option remains outstanding, to permit one or more options held by the Optionee under this Article Two to be exercised, during the limited post-Service exercise period applicable under this paragraph C., not only with respect to the number of vested Ordinary Shares for which each such option is exercisable at the time of the Optionee's cessation of Service but also with respect to one or more subsequent installments of vested Ordinary Shares for which the option would otherwise have become exercisable had such cessation of Service not occurred. 3. The Plan Administrator shall also have full power and authority, exercisable either at the time the option is granted or at any time while 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 or death from the limited period in effect under subparagraph 1. above to such greater period of time as the Plan Administrator shall deem appropriate. In no event, however, shall such option be exercisable after the specified expiration date of the option term. D. Stockholder Rights. An optionee shall have no stockholder rights with respect to the Ordinary Shares subject to the option until such individual shall have exercised the option and paid the exercise price for the purchased Ordinary Shares. II. INCENTIVE OPTIONS The terms and conditions specified below shall be applicable to all Incentive Options granted under this Article Two. Incentive Options may only be granted to individuals who are Employees of the Corporation. Options which are specifically designated as Non-Statutory Options when issued under the Plan shall not be subject to such terms and conditions. Except as so modified by this Section II, the provisions of Articles One, Two and Four of the Plan shall apply to all Incentive Options granted hereunder. A. Dollar Limitation. The aggregate Fair Market Value (determined as of the respective date or dates of grant) of the Ordinary Shares for which one or more options granted to any Employee under this Plan (or any other option plan of the Corporation or its parent or subsidiary corporations) may for the first time become exercisable as incentive stock options under the Code during any one calendar year shall not exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the Employee holds two (2) or more such options which become exercisable for the first time in the same calendar year, the foregoing limitation on the exercisability of such options as incentive stock options under the Code shall be applied on the basis of the order in which such options are granted. Should the number of Ordinary Shares for which any Incentive Option first becomes exercisable in any calendar year exceed the applicable One Hundred Thousand Dollar ($100,000) limitation, then that option may nevertheless be exercised in such calendar year for the excess number of shares as a non-statutory option under the Code. B. 10% Stockholder. If any individual to whom an Incentive Option is granted is the owner of stock (as determined under Section 424(d) of the Code) possessing ten percent (10%) or more of the total combined voting power of all classes of stock of the Corporation or any one of its parent or subsidiary corporations, then the exercise price per Ordinary Share shall not be less than the greater of (i) one hundred and ten percent (110%) of the Fair Market Value per Ordinary Share on the grant date or (ii) the par value of such Ordinary Share. III. CORPORATE TRANSACTION/CHANGE IN CONTROL A. In the event of any Corporate Transaction, each option which is at the time outstanding under this Article Two shall automatically accelerate so that each such option shall, immediately prior to the specified effective date for the Corporate Transaction, become fully exercisable with respect to the total number of Ordinary Shares at the time subject to such option and may be exercised for all or any portion of such Ordinary Shares. However, an outstanding option under this Article Two shall not so accelerate 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 to be replaced with a comparable option to purchase shares of the capital stock of the successor corporation or parent thereof, (ii) such option is to be replaced with a cash incentive program of the successor corporation which preserves the option spread existing at the time of the Corporate Transaction and provides for subsequent payout in accordance with the same vesting schedule applicable to such option or (iii) the acceleration of such option is subject to other limitations imposed by the Plan Administrator at the time of the option grant. The determination of option comparability under clause (i) above shall be made by the Plan Administrator, and its determination shall be final, binding and conclusive. B. Immediately following the consummation of the Corporate Transaction, all outstanding options under this Article Two shall terminate and cease to remain outstanding, except to the extent assumed by the successor corporation or its parent company. C. Each outstanding option under this Article Two 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 issued to the option holder, in consummation of such Corporate Transaction, had such person exercised the option immediately prior to such Corporate Transaction. Appropriate adjustments shall also be made to the exercise price payable per share, provided the aggregate exercise 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. D. The Plan Administrator shall have the discretion, exercisable either in advance of any actually-anticipated Corporate Transaction or at the time of an actual Corporate Transaction, to provide (upon such terms as it may deem appropriate) for the automatic acceleration of one or more outstanding options granted under the Plan which are assumed or replaced in the Corporate Transaction and do not otherwise accelerate at that time, in the event the Optionee's Service should subsequently terminate within a designated period following such Corporate Transaction. E. The Plan Administrator shall have the discretionary authority, exercisable either in advance of any actually-anticipated Change in Control or at the time of an actual Change in Control, to provide for the automatic acceleration of one or more outstanding options under this Article Two upon the occurrence of the Change in Control. The Plan Administrator shall also have full power and authority to condition any such option acceleration upon the subsequent termination of the Optionee's Service within a specified period following the Change in Control. F. Any options accelerated in connection with the Change in Control shall remain fully exercisable until the expiration or sooner termination of the option term. G. The grant of options under this Article Two 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. H. The portion of any Incentive Option accelerated under this Section III in connection with a Corporate Transaction or Change in Control shall remain exercisable as an incentive stock option under the Code only to the extent the dollar limitation of Section II of this Article Two is not exceeded. To the extent such dollar limitation is exceeded, the accelerated portion of such option shall be exercisable as a non-statutory option under the Code. IV. CANCELLATION AND REGRANT 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 Optionees, the cancellation of any or all outstanding options under this Article Two and to grant in substitution new options under the Plan covering the same or different numbers of Ordinary Shares but with an exercise price per Ordinary Share not less than (i) eighty-five percent (85%) of the Fair Market Value per Ordinary Share on the new grant date or (ii) one hundred percent (100%) of such Fair Market Value in the case of an Incentive Option, but in no event shall the exercise price per Ordinary Share be less than the par value of such Ordinary Share. V. STOCK APPRECIATION RIGHTS A. Provided and only if the Plan Administrator determines in its discretion to implement the stock appreciation right provisions of this Section V, one or more Optionees may be granted the right, exercisable upon such terms and conditions as the Plan Administrator may establish, to surrender all or part of an unexercised option under this Article Two in exchange for a distribution from the Corporation in an amount equal to the excess of (i) the Fair Market Value (on the option surrender date) of the number of vested Ordinary Shares for which the surrendered option (or surrendered portion thereof) is at the time exercisable over (ii) the aggregate exercise price payable for such vested Ordinary Shares. B. No surrender of an option shall be effective hereunder unless it is approved by the Plan Administrator. If the surrender is so approved, then the distribution to which the Optionee shall accordingly become entitled under this Section V may be made in Ordinary Shares valued at Fair Market Value on the option surrender date, in cash, or partly in Ordinary Shares and partly in cash, as the Plan Administrator shall in its sole discretion deem appropriate. C. If the surrender of an option is rejected by the Plan Administrator, then the Optionee shall retain whatever rights the Optionee had under the surrendered option (or surrendered portion thereof) on the option surrender date and may exercise such rights at any time prior to the later of (i) five (5) business days after the 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 more than five (5) years after the date of the option grant. D. One or more Section 16 Insiders may, in the Plan Administrator's sole discretion, be granted limited stock appreciation rights in tandem with their outstanding options under this Article Two. Upon the occurrence of a Hostile Take-Over, the Section 16 Insider shall have a thirty (30)-day period in which he or she may surrender any outstanding options with such a limited stock appreciation right in effect for at least six (6) months to the Corporation, to the extent such option is at the time exercisable for vested Ordinary Shares. The Section 16 Insiders shall in return be entitled to a cash distribution from the Corporation in an amount equal to the excess of (i) the Take-Over Price of the vested Ordinary Shares for which each surrendered option (or surrendered portion thereof) is at the time exercisable over (ii) the aggregate exercise price payable for such Ordinary Shares. The cash distribution payable upon such option surrender shall be made within five (5) days following the date the option is surrendered to the Corporation. Neither the approval of the Plan Administrator nor the consent of the Board shall be required in connection with such option surrender and cash distribution. Any unsurrendered portion of the option shall continue to remain outstanding and become exercisable in accordance with the terms of the instrument evidencing such grant. E. The Ordinary Shares subject to any option surrendered for an appreciation distribution pursuant to this Section V shall not be available for subsequent issuance under the Plan. ARTICLE THREE AUTOMATIC OPTION GRANT PROGRAM I. ELIGIBILITY A. Eligible Directors. The individuals eligible to receive automatic option grants pursuant to the provisions of this Article Three shall be limited to (i) those individuals who are serving as non-employee Board members on the Initial Automatic Grant Date, (ii) those individuals who are first elected or appointed as non-employee Board members after the Initial Automatic Grant Date, whether through appointment by the Board or election by the Corporation's stockholders, and (iii) those individuals who continue to serve as non-employee Board members at one or more Annual Stockholders Meetings held after the Underwriting Execution Date. In no event, however, may any non-employee Board member who is a Singapore resident participate in this Automatic Option Grant Program. Any non-employee Board member eligible to participate in the Automatic Option Grant Program pursuant to the foregoing criteria shall be designated an Eligible Director for purposes of the Plan. B. Limitation. Except for the option grants to be made pursuant to the provisions of this Automatic Option Grant Program, a non-employee Board member shall not be entitled to receive any additional option grants or stock issuances under this Plan or any other stock plan of the Corporation (or its parent or subsidiaries) during his or her period of Board service. II. TERMS AND CONDITIONS OF AUTOMATIC OPTION GRANTS A. Grant Dates. Option grants shall be made under this Article Three on the dates specified below: 1. Initial Grant. Each individual serving as an Eligible Director on the Initial Automatic Grant Date shall automatically be granted on such date a Non-Statutory Option to purchase the number of Ordinary Shares as determined by the Plan Administrator upon the terms and conditions of this Article Three. Each individual who first becomes an Eligible Director after the Initial Automatic Grant Date, whether through election by the stockholders or appointment by the Board, shall automatically be granted, at the time of such initial election or appointment, a Non-Statutory Option to purchase the number of Ordinary Shares as determined by the Plan Administrator upon the terms and conditions of this Article Three. 2. Annual Grant. On the date of each Annual Stockholders Meeting held after the Underwriting Execution Date, each individual who is at that time serving as an Eligible Director, whether or not such individual is standing for reelection as a Board member at that Annual Meeting, shall automatically be granted a Non-Statutory Option to purchase an additional 12,000* Ordinary Shares upon the terms and conditions of this Article Three, provided such individual has served as a Board member for at least six (6) months. B. There shall be no limit on the number of such 12,000* Ordinary Share option grants any one Eligible Director may receive over his or her period of Board service. The number of Ordinary Shares for which the automatic option grants are to be made to each newly elected or continuing Eligible Director shall be subject to periodic adjustment pursuant to the applicable provisions of Section VI.C. of Article One. C. Exercise Price. The exercise price per Ordinary Share subject to each automatic option grant made under this Article Three shall be determined as follows: - For each automatic option grant made on the Initial Automatic Grant Date, the exercise price per Ordinary Share shall be equal to the Fair Market Value per Ordinary Share on such date as shall be determined by the Plan Administrator after taking into account such factors as the Plan Administrator deems relevant. - For all other automatic option grants, the exercise price per Ordinary Share shall be equal to one hundred percent (100%) of the Fair Market Value per Ordinary Share on the automatic grant date, but in no event less than the par value of such Ordinary Share. D. Payment. The exercise price shall be payable in one of the alternative forms specified below: 1. full payment in cash or check made payable to the Corporation's order; or 2. to the extent the option is exercised for vested Ordinary Shares, full payment through a sale and remittance procedure pursuant to which the non-employee Board member shall provide concurrent irrevocable written instructions (i) to a Corporation-designated brokerage firm to effect the immediate sale of the purchased Ordinary Shares and remit to the Corporation, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased Ordinary Shares and (ii) to the Corporation to deliver the certificates for the purchased Ordinary Shares directly to such brokerage firm in order to complete the sale transaction. E. Option Term. Each automatic grant under this Article Three shall have a maximum term of five (5) years measured from the automatic grant date. F. Exercisability. Each automatic grant shall become exercisable for the Ordinary Shares subject to that grant in a series of successive equal monthly installments upon the Optionee's completion of each month of Board service over the twenty-four (24) month period measured from the automatic grant date. The exercisability of each such grant shall be subject to acceleration as provided in Section II.G and Section III of this Article Three. In no event, however, shall any automatic option grant become exercisable for any additional Ordinary Shares after the Optionee's cessation of Board service. G. Transferability. Each automatic option grant, together with the limited stock appreciation right pertaining to such option, shall be assignable or transferable by the Optionee. The Optionee shall be required to comply with all applicable laws in connection with any such transfer or assignment, and the Plan Administrator shall have the discretion to adopt such rules as it deems necessary to ensure that any assignment or transfer is in compliance with all applicable laws. H. Termination of Board Service. 1. Should the Optionee cease to serve as a Board member for any reason (other than death or Permanent Disability) while holding one or more automatic option grants under this Article Three, then such individual shall have a six (6)-month period following the date of such cessation of Board service in which to exercise each such option for any or all of the option shares for which the option is exercisable at the time of such cessation of Board service. Each such option shall immediately terminate and cease to remain outstanding, at the time of the Optionee's cessation of Board service, with respect to any option shares for which the option is not otherwise at that time exercisable. 2. Should the Optionee die within six (6) months after cessation of Board service, then any automatic option grant held by the Optionee at the time of death may subsequently be exercised, for any or all of the option shares for which the option is exercisable at the time of the Optionee's cessation of Board service (less any option shares subsequently purchased by the Optionee 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. The right to exercise each such option shall lapse upon the expiration of the twelve (12)-month period measured from the date of the Optionee's death. 3. Should the Optionee die or become Permanently Disabled while serving as a Board member, then each automatic option grant held by such Optionee under this Article Three shall immediately become exercisable for all the Ordinary Shares subject to that option, and the Optionee (or the representative of the Optionee's estate or the person or persons to whom the option is transferred upon the Optionee's death) shall have a twelve (12)-month period following the date of the Optionee's cessation of Board service in which to exercise such option for any or all of those Ordinary Shares as fully-vested shares. 4. In no event shall any automatic grant under this Article Three remain exercisable after the expiration date of the five (5)-year option term. Upon the expiration of the applicable post-service exercise period under subparagraphs 1. through 3. above or (if earlier) upon the expiration of the five (5)-year option term, the automatic grant shall terminate and cease to be outstanding for any option shares for which the option was exercisable at the time of the Optionee's cessation of Board service but for which such option was not otherwise exercised. I. Stockholder Rights. The holder of an automatic option grant under this Article Three shall have none of the rights of a stockholder with respect to the Ordinary Shares subject to such option until such individual shall have exercised the option and paid the exercise price for the purchased Ordinary Shares. J. Remaining Terms. The remaining terms and conditions of each automatic option grant shall be as set forth in the form Automatic Stock Option Agreement attached as Exhibit A. III. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER A. In the event of any Corporate Transaction, each option at the time outstanding under this Article Three but not otherwise fully exercisable shall, immediately prior to the specified effective date for the Corporate Transaction, automatically accelerate and become fully exercisable for all of the Ordinary Shares at the time subject to that option and may be exercised for all or any portion of those shares as fully vested Ordinary Shares. Immediately following the consummation of the Corporate Transaction, all automatic option grants under this Article Three shall terminate and cease to remain outstanding. B. In connection with any Change in Control of the Corporation, each option at the time outstanding under this Article Three but not otherwise fully exercisable shall, immediately prior to the specified effective date for the Change in Control, automatically accelerate and become fully exercisable for all of the Ordinary Shares at the time subject to that option and may be exercised for all or any portion of those shares as fully vested Ordinary Shares. Each such option shall remain so exercisable for the option shares until the expiration or sooner termination of the option term. C. Upon the occurrence of a Hostile Take-Over, the Optionee shall have a thirty (30)-day period in which to surrender to the Corporation each option held by him or her under this Article Three for a period of at least six (6) months. The Optionee shall in return be entitled to a cash distribution from the Corporation in an amount equal to the excess of (i) the Take-Over Price of the Ordinary Shares at the time subject to the surrendered option (whether or not the option is otherwise at the time exercisable for those Ordinary Shares) over (ii) the aggregate exercise price payable for such Ordinary Shares. Such cash distribution shall be paid within five (5) days following the surrender of the option to the Corporation. Neither the approval of the Plan Administrator nor the consent of the Board shall be required in connection with such option surrender and cash distribution. The Ordinary Shares subject to each option surrendered in connection with the Hostile Take-Over shall not be available for subsequent issuance under the Plan. D. The automatic option grants outstanding under this Article Three 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. IV. AMENDMENT OF THE AUTOMATIC GRANT PROVISIONS A. Limited Amendments. The provisions of this Automatic Option Grant Program, together with the automatic option grants outstanding under this Article Three, may not be amended at intervals more frequently than once every six (6) months, other than to the extent necessary to comply with applicable U.S. income tax laws and regulations. ARTICLE FOUR MISCELLANEOUS I. LOANS OR INSTALLMENT PAYMENTS A. The Plan Administrator may, in its discretion but subject to any prohibition imposed by any applicable laws, assist any Optionee, to the extent such Optionee is an Employee (including an Optionee or Participant who is an officer of the Corporation), in the exercise of one or more stock options granted to such Optionee under the Discretionary Option Grant Program, including the satisfaction of any Federal, state and local income and employment tax obligations arising therefrom, by (i) authorizing the extension of a loan from the Corporation to such Optionee or (ii) permitting the Optionee to pay the exercise price for the purchased shares in installments over a period of years. The terms of any loan or installment method of payment (including the interest rate and terms of repayment) shall be upon such terms as the Plan Administrator specifies in the applicable option agreement or otherwise deems appropriate under the circumstances. Loans or installment payments may be authorized with or without security or collateral. However, the maximum credit available to the Optionee may not exceed the exercise price of the acquired Ordinary Shares (less the par value of such shares) plus any Federal, state and local income and employment tax liability incurred by the Optionee in connection with the acquisition of the Ordinary Shares. B. The Plan Administrator may, in its absolute discretion, determine that one or more loans extended under this financial assistance program shall be subject to forgiveness by the Corporation in whole or in part upon such terms and conditions as the Plan Administrator may deem appropriate. C. All financial assistance provided under this Section I of Article Four shall be effected in compliance with the applicable provisions of Section 76(9)(b) of the Companies Act, Chapter 50 of Singapore (or any successor statutory provision). II. AMENDMENT OF THE PLAN AND AWARDS A. The Board has complete and exclusive power and authority to amend or modify the Plan (or any component thereof) in any or all respects whatsoever. However, (i) no such amendment or modification shall adversely affect rights and obligations with respect to options at the time outstanding under the Plan, unless the Optionee consents to such amendment, and (ii) any amendment made to the Automatic Option Grant Program (or any options outstanding thereunder) shall be in compliance with the limitation of Section IV of Article Three. In addition, the Board may not, without the approval of the Corporation's stockholders, amend the Plan to (i) materially increase the maximum number of Ordinary Shares issuable under the Plan or the number of Ordinary Shares for which options may be granted per newly-elected or continuing Eligible Director under Article Three of the Plan or the maximum number of Ordinary Shares for which any one individual participating in the Plan may be granted stock options over the term of the Plan, except for permissible adjustments under Section VI.C. of Article One, (ii) materially modify the eligibility requirements for plan participation or (iii) materially increase the benefits accruing to plan participants. B. Options to purchase Ordinary Shares may be granted under the Discretionary Option Grant Program which are in excess of the number of Ordinary Shares then available for issuance under the Plan. However, no such option shall become exercisable in whole or in part for the excess Ordinary Shares subject to that option until stockholder approval is obtained for a sufficient increase in the number of Ordinary Shares available for issuance under the Plan. If such stockholder approval is not obtained within twelve (12) months after the date the first such excess option grants are made, then such options shall terminate and cease to be exercisable with respect to the excess number of Ordinary Shares, and no further option grants shall be made under the Plan. III. TAX WITHHOLDING The Corporation's obligation to deliver Ordinary Shares upon the exercise of stock options for such shares under the Plan shall be subject to the satisfaction of all applicable income and employment tax withholding requirements. IV. EFFECTIVE DATE AND TERM OF PLAN A. This Plan became effective when adopted by the Board and approved by the stockholders in 1993. On June 8, 1995, the Board approved an amendment to the Plan to (i) increase the aggregate number of Ordinary Shares issuable over the term thereof from 3,600,000* shares to 6,000,000* shares and (ii) increase the number of Ordinary Shares for which options may be granted to any one individual from 1,200,000* shares to 2,000,000* shares. The shareholders approved those amendments at the 1995 Annual Meeting. B. In June 1996, the Board amended the Plan to (i) increase the aggregate number of Ordinary Shares issuable over the term of the Plan from 3,000,000* Ordinary Shares to 4,000,000* Ordinary Shares. The stockholders approved such amendment at the 1996 Annual Meeting. C. On August 15, 1996, the Board amended and restated the Plan to authorize, among other things, the separate but concurrent jurisdiction of the Discretionary Option Grant Program by the Primary Committee and one or more Secondary Committees of the Board, with the Primary Committee to have the sole authority to administer such program with respect to Section 16 Insiders. D. In September 1997, the Board approved an amendment to the Plan to increase the aggregate number of Ordinary Shares issuable over the term thereof from 8,000,000* to 10,400,000* shares. The shareholders approved those amendments at the 1997 Annual Meeting. E. In August 1998, the Board approved an amendment to the Plan to increase the aggregate number of Ordinary Shares issuable over the term thereof from 10,400,000* to 14,400,000* shares. The shareholders approved this amendment at the 1998 Annual Meeting. F. In July 1999, the Board approved an amendment to the Plan to increase the aggregate number of Ordinary Shares issuable over the term of the Plan from 14,400,000* Ordinary Shares to 16,400,000* Ordinary Shares. The shareholders approved this amendment at the 1999 Annual Meeting. G. In November 1999, the Board approved an amendment to the Plan to increase the aggregate number of Ordinary Shares issuable over the term of the Plan from 16,400,000* Ordinary Shares to 20,400,000* Ordinary Shares. The shareholders approved this amendment at the 2000 Extraordinary General Meeting. H. The Plan shall terminate upon the earlier of (i) November 30, 2003 or (ii) the date on which all Ordinary Shares available for issuance under the Plan shall have been issued or cancelled pursuant to the exercise, surrender or cash-out of the options granted under the Plan. If the date of termination is determined under clause (i) above, then all option grants outstanding on such date shall thereafter continue to have force and effect in accordance with the provisions of the instruments evidencing such grants. V. USE OF PROCEEDS Any cash proceeds received by the Corporation from the sale of Ordinary Shares pursuant to option grants under the Plan shall be used for general corporate purposes. VI. REGULATORY APPROVALS A. The implementation of the Plan, the granting of any stock option or stock appreciation right under the Plan, the issuance of any Ordinary Shares upon the exercise or surrender of the stock options or stock appreciation rights granted hereunder shall be subject to the Corporation's procurement of all approvals and permits required by regulatory authorities having jurisdiction over the Plan, the stock options and stock appreciation rights granted under it and the Ordinary Shares issued pursuant to it. B. No Ordinary Shares or other assets or securities shall be issued or delivered under this Plan unless and until there shall have been compliance with (i) all applicable requirements of U.S. and state securities laws, including the filing and effectiveness of the Form S-8 registration statement for the Ordinary Shares issuable under the Plan, (ii) all applicable listing requirements of any securities exchange on which the Ordinary Shares are then listed for trading and (iii) all applicable requirements of Singapore law. VII. NO EMPLOYMENT/SERVICE RIGHTS Neither the action of the Corporation in establishing the Plan, nor any action taken by the Plan Administrator hereunder, nor any provision of the Plan shall be construed so as to grant any individual the right to remain in the Service of the Corporation (or any parent or subsidiary corporation) for any period of specific duration, and the Corporation (or any parent or subsidiary corporation retaining the services of such individual) may terminate such individual's Service at any time and for any reason, with or without cause. VIII. MISCELLANEOUS PROVISIONS A. Except to the extent otherwise expressly provided in the Plan, the right to acquire Ordinary Shares or other assets or securities under the Plan may not be assigned, encumbered or otherwise transferred by any Optionee. B. The provisions of the Plan shall inure to the benefit of, and be binding upon, the Corporation and its successors or assigns, whether by Corporate Transaction or otherwise, and the Participants and Optionees, the legal representatives of their respective estates, their respective heirs or legatees and their permitted assignees. * Reflects two for one stock splits in the form of a bonus issue (the equivalent of a stock dividend) effective December 22, 1998 and December 22, 1999. EX-4.3 3 1993 STOCK OPTION PLAN Exhibit 4.3 THE DII GROUP, INC. 1993 STOCK OPTION PLAN I. PURPOSES AND SCOPE OF PLAN. DOVatron International, Inc. (the "Company") desires to afford certain salaried officers and other salaried key employees of the Company and its subsidiaries who are in a position to affect materially the profitability and growth of the Company and its subsidiaries an opportunity to acquire a proprietary interest in the Company, and thus to create in such persons interest in and a greater concern for the welfare of the Company. Directors who are salaried key employees within the meaning of the foregoing are eligible to participate in the Plan. The stock options offered pursuant to this 1993 Stock Option Plan (the "Plan") are a matter of separate inducement and are not in lieu of any salary or other compensation for services. The Company, by means of the Plan, seeks to retain the services of persons now holding key positions and to secure the services of persons capable of filling such positions. The options granted under the Plan may be designated as either incentive stock options ("Incentive Options") within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or options that do not meet the requirements for Incentive Options ("Non-Qualified Options") but the Company makes no warranty as to the qualification of any option as an Incentive Option. II. AMOUNT OF STOCK SUBJECT TO THE PLAN The total number of ordinary shares of the Company which may be purchased pursuant to the exercise of options granted under the Plan, including the shares that are subject to options ("Substituted Options") that are substituted for options to purchase shares of common stock of Dover Corporation ("Dover") in connection with the distribution (the "Distribution") by Dover of all of the outstanding common stock of the Company held by Dover to the holders of the common stock of Dover, shall not exceed, in the aggregate, 550,000 shares of the authorized shares, S$0.01 par value, per share, of the Company (the "Shares"), subject to adjustment pursuant to Article XII of the Plan. Shares which may be acquired under the Plan shall be authorized but unissued Shares. If and to the extent that options granted under the Plan expire or terminate without having been exercised, new options may be granted with respect to the Shares covered by such expired or terminated option, provided that the grant and the terms of such new options shall in all respects comply with the provisions of the Plan. Except as provided in Article XX, the Company may, from time to time during the period beginning on the date (the "Distribution Date") that all of the outstanding common stock of the Company is distributed to the holders of the common stock of Dover (the "Effective Date") and ending ten years from the date thereof (the "Termination Date") grant options to certain salaried officers and other salaried key employees under the terms hereinafter set forth. III. ADMINISTRATION The Compensation Committee (the "Committee"), or the Board of Directors of the Company (the "Board of Directors") if there is no Committee, will have sole and exclusive authority to administer the Plan. The Committee shall consist of no fewer than two (2) members of the Board of Directors, each of whom shall be a "disinterested person" within the meaning of Rule 16b-3 (or any successor rule or regulation) ("Rule 16b-3") promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Committee shall administer the Plan so as to comply at all times with Rule 16b-3. A majority of the members of the Committee shall constitute a quorum, and the act of a majority of the members of the Committee shall be the act of the Committee. Any member of the Committee may be removed at any time, either with or without cause, by resolution adopted by a majority of the Board of Directors, and any vacancy on the Committee may at any time be filled by resolution adopted by a majority of the Board of Directors. Any or all powers and functions of the Committee may at any time and from time to time be exercised by the Board of Directors; provided, however, that, with respect to the participation in the Plan by persons who are members of the Board of Directors, such powers and functions of the Committee may be exercised by the Board of Directors only if, at the time of such exercise, all of the members of the Board of Directors acting in the particular matter, are "disinterested persons" within the meaning of Rule 16b-3 (or any successor rule or regulation) promulgated under the Exchange Act. Subject to the express provisions of the Plan, the Board of Directors or the Committee, as the case may be, shall have authority, in its discretion, to determine the persons to whom options shall be granted, the time when such options shall be granted, the number of Shares which shall be subject to each option, the purchase price of each Share which shall be subject to each option, the period(s) during which such options shall be exercisable (whether in whole or in part), whether such options shall be Incentive Options or Non-Qualified Options and the other terms and provisions thereof. In determining the employees to whom options shall be granted and the number of Shares for which options shall be granted to each person, the Board of Directors or the Committee, as the case may be, shall consider the length of service, the amount of earnings, and the responsibilities and duties of such person. Subject to the express provisions of the Plan, the Board of Directors or the Committee, as the case may be, also shall have authority to construe the Plan and options granted thereunder, to amend the Plan and options granted thereunder, to prescribe, amend and rescind rules and regulations relating to the Plan, to determine the terms and provisions of the respective options (which need not be identical) and to make all other determinations necessary or advisable for administering the Plan. The Board of Directors or the Committee, as the case may be, also shall have the authority to require, in its discretion, as a condition of the granting of any such option, that the optionee agree not to sell or otherwise dispose of Shares acquired pursuant to the option for a period of six (6) months following the latest of (i) the date of the grant of such option or (ii) the date when the exercise price of an option is fixed if such exercise price is not fixed on the date of grant. The determination of the Board of Directors or the Committee, as the case may be, on matters referred to in this Article III shall be conclusive. The Board of Directors or the Committee, as the case may be, may employ such legal counsel, consultants and agents as it may deem desirable for the administration of the Plan and may rely upon any opinion received from any such counsel or consultant and any computation received from any such consultant or agent. Expenses incurred by the Board of Directors or the Committee in the engagement of such counsel, consultant or agent shall be paid by the Company. No member or former member of the Committee or of the Board of Directors shall be liable for any action or determination made in good faith with respect to the Plan or any option granted hereunder. IV. ELIGIBILITY Options may be granted only to certain salaried officers and other salaried key employees of the Company and its subsidiaries who are not members of the Committee; provided, that no person shall be eligible for any option if the granting of such option to such person would prevent the satisfaction by the Plan of the general exemptive conditions of Rule 16b-3. An Incentive Option shall not be granted to any person who, at the time the option is granted, owns shares of the Company or any subsidiary or parent of the Company possessing more than ten percent (10%) of the total combined voting power of all classes of shares of the Company or of any subsidiary or parent of the Company unless (i) the option price is at least one hundred ten percent (110%) of the fair market value per share (as defined in Article VI) of the shares subject to the option and (ii) the option is not exercisable after the fifth anniversary of the date of grant of the option. In determining share ownership of an employee, the rules of Section 424(d) of the Code shall be applied, and the Board of Directors or the Committee, as the case may be, may rely on representations of fact made to it by the employee and believed by it to be true. V. MAXIMUM ALLOTMENT OF INCENTIVE OPTIONS If the aggregate fair market value of shares with respect to which Incentive Options are exercisable for the first time by an employee during any calendar year (under all stock option plans of the Company and any parent or any subsidiary of the Company) exceeds $100,000, any options which otherwise qualify as Incentive Options, to the extent of the excess, will be treated as Non-Qualified Options. VI. OPTION PRICE AND PAYMENT Except with respect to the Substitute Options and the Distribution Date Options (as hereinafter defined), the price per Share under any option granted hereunder shall be such amount as the Board of Directors or the Committee, as the case may be, shall determine, provided, however, such price shall not be less than one hundred percent (100%) of the fair market value of the Shares subject to such option, as determined in good faith by the Board of Directors or the Committee, as the case may be, at the date the option is granted and provided further that in no event may the price be less than the par value of a share. In the case of Substitute Options, the price shall be determined according to the formula set forth in the employee matters agreement, dated as of May 4, 1993, between the Company and Dover entered into in connection with the Distribution. In the case of options granted on the Distribution Date ("Distribution Date Options"), the price per Share shall be the average closing price per share of the Company's common stock on the National Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") for the 30 trading days beginning 5 days after the Distribution Date. If the Shares are listed on a national securities exchange in the United States on the date any option is granted, the fair market value per Share shall be deemed to be the highest sales price at which such Shares are sold on such national securities exchange in the United States on the date upon which the option is granted, but if the Shares are not traded on such date, or such national securities exchange is not open for business on such date, the fair market value per Share shall be the Closing price per share determined as of the closest preceding date on which such exchange shall have been open for business and the Shares were traded. If the Shares are listed on more than one national securities exchange in the United States on the date any such option is granted, the Board of Directors or the Committee, as the case may be, shall determine which national securities exchange shall be used for the purpose of determining the fair market value per Share. If the Shares are not listed on a national securities exchange but are reported on NASDAQ, the fair market value per share shall be deemed to be the average of the high bid and low asked prices on the date upon which the option is granted as reported by NASDAQ. For purposes of this Plan, the determination by the Board of Directors or the Committee, as the case may be, of the fair market value of a Share shall be conclusive. Upon the exercise of an option granted hereunder, the Company shall cause the purchased Shares to be issued only when it shall have received the full purchase price for the Shares in cash. VII. USE OF PROCEEDS The cash proceeds of the sale of Shares subject to the options granted hereunder are to be added to the general funds of the Company and used for its general corporate purposes as the Board of Directors shall determine. VIII. TERM OF OPTIONS AND LIMITATIONS ON THE RIGHT OF EXERCISE Except with respect to the Substituted Options, the terms of each option will be for such period as the Board of Directors or the Committee, as the case may be, shall determine, but in no event may any option granted hereunder be exercisable more than ten (10) years from the date of grant of such option. The Substituted options shall, to the extent permitted by all applicable laws, contain terms and conditions applicable to the options for which they are substituted. The Board of Directors or the Committee, as the case may be, shall have the right to limit, restrict or prohibit, in whole or in part, from time to time, conditionally or unconditionally, rights to exercise any option granted hereunder. To the extent that an option is not exercised within the period of exercisability specified therein, it shall expire as to the then unexercised part. IX. EXERCISE OF OPTIONS Options granted under the Plan shall be exercised by the optionee as to all or part of the Shares covered thereby by the giving of written notice of the exercise thereof to the Company at the principal business office of the Company, specifying the number of Shares to be purchased, accompanied by a check payable to the Company for the full purchase price of such shares. The date of actual receipt by the Company of such notice shall be deemed the date of exercise of the option with respect to the Shares being purchased. Subject to the terms of Articles XV, XVI, XVII and XVIII, the Company shall cause certificates for the Shares so purchased to be delivered to the optionee, against payment of the full purchase price. X. NONTRANSFERABILITY OF OPTIONS An option granted hereunder shall not be transferable, whether by operation of law or otherwise, other than by will or the laws of descent and distribution, and any option granted hereunder shall be exercisable, during the lifetime of the holder, only by such holder. The option of any person to acquire shares and all his rights thereunder shall terminate immediately if the holder: (a) attempts to or does sell, assign, transfer, pledge, hypothecate or otherwise dispose of the option or any rights thereunder to any other person except as permitted above: or (b) becomes insolvent or bankrupt or becomes involved in any manner so that the option or any rights thereunder becomes subject to being taken from him to satisfy his debts or liabilities. The Company will stamp all share certificates delivered to the shareholder with an appropriate legend if the Shares are not registered under the Securities Act of 1933, as amended (the "Act") or are otherwise not free to be transferred by the holder and will issue appropriate stop-order instructions to the transfer agent for the Shares, if and to the extent such stamping or instructions may then be required by the Act or by any rule or regulation of the Securities and Exchange Commission issued pursuant to the Act. XI. TERMINATION OF EMPLOYMENT Upon termination of employment of any option holder, any option previously granted to such option holder, unless otherwise specified by the Board of Directors or the Committee, as the case may be, shall, to the extent not theretofore exercised, terminate and become null and void, provided that: (a) if the option holder shall die while in the employ of the Company or any subsidiary of the Company, and at a time when such employee was entitled to exercise an option as herein provided, his estate or the legatees or distributees of his estate or of the option, as the case may be, of such option holder, may, within one (1) year following the date of death, but not beyond that time and in no event later than the expiration date of the option, exercise such option, to the extent not theretofore exercised, in respect of any or all of such number of Shares which the option holder was entitled to purchase; and (b) if the employment of any option holder to whom such option shall have been granted shall terminate by reason of the option holder's retirement on or after he reaches the age of 60 years in such manner as would entitle him to receive full Social Security benefits if he were then 65 years of age, or disability (as described in Section 22(e)(3) of the Code), and while such employee is entitled to exercise such option as herein provided, such option holder shall have the right to purchase under the option the number of Shares, if any, which he is entitled to purchase at the time of such termination, at any time up to and including three (3) months after the date of such termination of employment, but not beyond that time and in no event shall an option be exercised later than the expiration date of the option. In no event shall any person be entitled to exercise any option after the expiration of the period of exercisability of such option as specified therein. Other than as set forth above, if an option holder voluntarily terminates his or her employment, or is discharged, any option granted hereunder shall be canceled and the option holder shall have no further rights to exercise any such option and all of the option holder's rights thereunder shall terminate as of the effective date of such termination of employment. If an option granted hereunder shall be exercised by the legal representative of a deceased option holder or former option holder or by a person who acquired an option granted hereunder by bequest or inheritance or by reason of the death of any option holder or former option holder, written notice of such exercise shall be accompanied by a certified copy of letters testamentary or equivalent proof of the right of such legal representative or other person to exercise such option. For the purposes of the Plan, an employment relationship shall be deemed to exist between an individual and a corporation if, at the time of the determination, the individual was an "employee" of such corporation for purposes of Section 422 (a) of the Code. A termination of employment shall not be deemed to occur by reason of (i) the transfer of an employee from employment by the Company to employment by a subsidiary of the Company or (ii) the transfer of an employee from employment by a subsidiary of the Company to employment by the Company or by another subsidiary of the Company. XII. ADJUSTMENT OF SHARES: EFFECT OF CERTAIN TRANSACTIONS In the event of any change in the outstanding Shares through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, or other like change in capital structure of the Company, an adjustment shall, to the extent permitted by all applicable laws, be made to each outstanding option such that each such option shall thereafter be exercisable for such securities, cash and/or other property as would have been received in respect of the Shares subject to such option had such option been exercised in full immediately prior to such change, and such an adjustment shall be made successively each time any such change shall occur. The term "Shares" shall after any such change refer to the securities, cash and/or property then receivable upon exercise of an option. In addition, in the event of any such change, the Board of Directors or the Committee, as the case may be, shall make any further adjustment as may be appropriate to the maximum number of Shares subject to the Plan, the maximum number of Shares for which options may be granted to any one employee, and the number of Shares and price per Share subject to outstanding options as shall be equitable to prevent dilution or enlargement of rights under such options, and the determination of the Board of Directors or the Committee, as the case may be, as to these matters shall be conclusive. Notwithstanding the foregoing, (i) each such adjustment with respect to an Incentive Option shall comply with the rules of Section 424 (a) of the Code, and (ii) in no event shall any adjustment be made which would render any Incentive Option granted hereunder other than an incentive stock option for purposes of Section 422 of the Code without the consent of the grantee. XIII. RIGHT TO TERMINATE EMPLOYMENT The granting of any option hereunder shall not alter or otherwise affect the rights of the Company or of its subsidiaries to change the duties of any option holder or the services to be performed by him or the place of performance of such service or his compensation, and shall not lessen, restrict or otherwise affect the right of the option holder's employer to terminate his employment at any time. Any person who is granted an option under the plan agrees upon acceptance of such option to remain in the employment of the Company or its subsidiaries, as the case may be, for at least 12 months from the date of the option, at his then base salary (or at such other salary as may be mutually satisfactory to the individual and the employer), except in the event of his earlier death or illness or other disability incapacitating him. XIV. CHANGE OF CONTROL Upon a Change of Control (as defined below) of the Company, all options shall immediately vest and become exercisable in full during the remaining term thereof, and shall remain so, whether or not the option holder to whom such options have been granted remains an employee of the Company or its subsidiaries. A Change of Control shall be deemed to have taken place upon the occurrence of any of the following events: (i) any Person (which shall mean and include any individual, corporation, partnership, group, association or other "person", as such term is used in Sections 13 and 14 of the Securities Exchange Act of 1934) is, becomes, or has the right to become the beneficial owner, directly or indirectly, of securities of the Company representing 20% or more of the Shares then outstanding, whether or not such Person continues to be the beneficial owner of securities representing 20% or more of the outstanding Shares; or (ii) as the result of, or in connection with, any tender or exchange offer, merger or other business combination, sale of assets or contested election, any announcement of an intention to make any of the foregoing transactions, or any combination of the foregoing transactions (a "Transaction"), those persons who were directors of the Company before the Transaction and were otherwise unaffiliated with any other party to the Transaction shall cease to constitute a majority of the Board of Directors of the Company or any successor to the Company (a "Change in the Board"); or (iii) the shareholders of the Company approve any merger, consolidation, reorganization, liquidation, dissolution, or sale of all or substantially all of the Company's assets in which neither the Company nor a successor resulting from a change in domicile or form of organization will survive as an independent, publicly owned corporation. (b) Notwithstanding anything herein to the contrary, no Change of Control shall be deemed to have occurred by virtue of any event which results in any of the following: (i) the acquisition, directly or indirectly, of 20% or more of the outstanding Shares by (A) the option holder or a Person including the option holder, (B) the Company, or (C) any employee benefit plan of the Company or of a subsidiary, or any entity holding securities of the company recognized, appointed, or established by the Company or by a subsidiary for or pursuant to the terms of such plan: or (ii) a Change in the Board resulting from any Transaction in which the option holder or a Person including the option holder participates directly or indirectly with any party to the Transaction other than the Company. XV. PURCHASE FOR INVESTMENT Except as hereafter provided, the holder of an option granted hereunder shall, upon any exercise thereof, execute and deliver to the Company a written statement, in form satisfactory to the Company, in which such holder represents and warrants that such holder is purchasing or acquiring the Shares acquired thereunder for such holder's own account, for investment only and not with a view to the resale or distribution thereof, and agrees that any subsequent offer for sale or sale or distribution of any of such Shares shall be made only pursuant to either (a) a Registration Statement on an appropriate form under the Act, which Registration Statement has become effective and is current with regard to the Shares being offered or sold, or (b) a specific exemption from the registration requirements of the Securities Act, but in claiming such exemption the holder shall, prior to any offer for sale or sale of such Shares, obtain a prior favorable written opinion, in form and substance satisfactory to the Company, from counsel for or approved by the Company, as to the applicability of such exemption thereto. The foregoing restriction shall not apply to (i) issuances by the Company so long as the Shares being issued are registered under the Securities Act and a prospectus in respect thereof is current or (ii) reofferings of Shares by affiliates of the Company (as defined in Rule 405 or any successor rule or regulation promulgated under the Act) if the Shares being reoffered are registered under the Act and a prospectus in respect thereof is current. XVI. ISSUANCE OF CERTIFICATES; LEGENDS; PAYMENT OF EXPENSES Upon any exercise of an option which may be granted hereunder and payment of the purchase price, a certificate or certificates for the Shares as to which the option has been exercised shall be issued by the Company in the name of the person exercising the option and shall be delivered to or upon the order of such person or persons. The Company may endorse such legend or legends upon the certificates for Shares issued upon exercise of an option granted hereunder and may issue such "stop transfer" instructions to its transfer agent in respect of such Shares as, in its discretion, it determines to be necessary or appropriate to (i) prevent a violation of, or to perfect an exemption from, the registration requirements of the Act, (ii) implement the provisions of the Plan and any agreement between the Company and the optionee or grantee with respect to such Shares, or (iii) permit the Company to determine the occurrence of a disqualifying disposition, as described in Section 421(b) of the Code, of Shares transferred upon exercise of an Incentive Option granted under the Plan. The Company shall pay all issue taxes with respect to the issuance of Shares upon exercise of an option, as well as all fees and expenses necessarily incurred by the Company in connection with such issuance, except fees and expenses which may be necessitated by the filing or amending of a Registration Statement under the Act, which fees and expenses shall be borne by the recipient of the Shares unless such Registration Statement has been filed by the Company for its own corporate purposes (and the Company so states) in which event the recipient of the Shares shall bear only such fees and expenses as are attributable solely to the inclusion of the Shares he or she receives in the Registration Statement, provided that the Company shall have no obligation to include any shares in any Registration Statement. All Shares issued as provided herein shall be fully paid and non-assessable to the extent permitted by law. XVII. WITHHOLDING TAXES The Company may require an employee exercising a Non-Qualified Option or disposing of Shares acquired pursuant to the exercise of an Incentive Option in a disqualifying disposition (within the meaning of Section 421(b) of the Code) to reimburse the corporation that employs such employee for any taxes required by any government to be withheld or otherwise deducted and paid by such corporation in respect of the issuance or disposition of Shares. In lieu thereof, the corporation that employs such employee shall have the right to withhold the amount of such taxes from any other sums due or to become due from such corporation to the employee upon such terms and conditions as the Board of Directors of the Committee, as the case may be, shall prescribe. XVIII. LISTING OF SHARES AND RELATED MATTERS If at any time the Board of Directors shall determine in its discretion that the listing, registration or qualification of the Shares covered by the Plan upon any national securities exchange or under any state or federal law or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the sale or purchase of Shares under the Plan, no Shares shall be issued unless and until such listing, registration, qualification, consent or approval shall have been effected or obtained, or otherwise provided for, free of any conditions not acceptable to the Board of Directors. XIX. AMENDMENT OF THE PLAN The Board of Directors may, from time to time, amend the Plan, provided that no amendment shall be made, without the approval of the shareholders of the Company, that will (i) increase the total number of Shares which may be issued under the Plan (other than an increase resulting from an adjustment provided for in Article XII), (ii) reduce the exercise price of any Incentive Option granted hereunder below the price required by Article VI (provided that in no event shall the exercise price for each share be less than the par value of a share), (iii) modify the provisions of the Plan relating to eligibility, (iv) materially increase the benefits accruing to participants under the Plan, or (v) extend the term of the Plan. The Board of Directors or the Committee, as the case may be, shall be authorized to amend the Plan and the options granted hereunder to permit the Incentive Options granted hereunder to qualify as incentive stock options within the meaning of Section 422 of the Code. The rights and obligations under any option granted before amendment of the Plan or any unexercised portion of such option shall not be adversely affected by amendment of the Plan or the option without the consent of the holder of the option. XX. TERMINATION OR SUSPENSION OF THE PLAN The Board of Directors may at any time suspend or terminate the Plan. The Plan, unless sooner terminated by action of the Board of Directors, shall terminate at the close of business on the Termination Date. An option may not be granted while the Plan is suspended or after it is terminated. Rights and obligations under any option granted while the Plan is in effect shall not be altered or impaired by suspension or termination of the Plan, except upon the consent of the person to whom the option was granted. The power of the Board of Directors or the Committee, as the case may be, to construe and administer any options granted prior to the termination or suspension of the Plan under Article III nevertheless shall continue after such termination or during such suspension. XXI. GOVERNING LAW The Plan, such options as may be granted thereunder and all related matters shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware. XXII. PARTIAL INVALIDITY The invalidity or illegality of any provision herein shall not be deemed to affect the validity of any other provision. XXIII. EFFECTIVE DATE The Plan shall become effective only upon the approval of the Board of Directors. EX-4.4 4 STOCK INCENTIVE PLAN The DII Group, Inc. 1994 STOCK INCENTIVE PLAN As Amended through May 6, 1999 I. PURPOSES AND SCOPE OF PLAN The DII Group, Inc. (the "Company") desires to afford certain salaried officers and other salaried key employees of the Company and its subsidiaries who are in a position to affect materially the profitability and growth of the Company and its subsidiaries an opportunity to acquire a proprietary interest in the Company, and thus to create in such persons interest in and a greater concern for the welfare of the Company. Directors who are salaried key employees within the meaning of the foregoing are eligible to participate in the 1994 Stock Incentive Plan (the "Plan"). These objectives will be promoted through the granting to such key employees of equity instruments including (i) incentive stock options ("Incentive Options") which are intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"); (ii) options which are not intended to so qualify ("NQSOs"); and (iii) performance shares ("Performance Shares"). The awards offered pursuant to this Plan are a matter of separate inducement and are not in lieu of any salary or other compensation for services. The Company, by means of the Plan, seeks to retain the services of persons now holding key positions and to secure the services of persons capable of filling such positions. II. AMOUNT OF STOCK SUBJECT TO THE PLAN The total number of shares of the Company reserved and available for distribution pursuant to options and awards granted hereunder shall not exceed, in the aggregate, 5,500,000 shares, S$0.01 par value, per share, of the Company (the "Shares"), subject to adjustment described below. Shares which may be acquired under the Plan shall be authorized but unissued Shares. Whenever any outstanding option or award or portion thereof expires, is canceled, is forfeited or is otherwise terminated for any reason without having been exercised or payment having been made in respect of the entire option or award, the Shares allocable to the expired, canceled, forfeited or otherwise terminated portion of the option or award may again be the subject of options or awards granted hereunder. In the event of any stock dividend, stock split, combination or exchange of Shares, recapitalization or other change in the capital structure of the Company, corporate separation or division (including, but not limited to, split-up, spin-off or distribution to Company shareholders other than a normal cash dividend), sale by the Company of all or a substantial portion of its assets, rights offering, merger, consolidation, reorganization or partial or complete liquidation, or any other corporate transaction or event having an effect similar to any of the foregoing, the aggregate number of Shares reserved for issuance under the Plan, the number and option price of Shares subject to outstanding options, the financial performance goals of the Shares contained in a Performance Share award, the number of Shares subject to a Performance Share award agreement and any other characteristics or terms of the options and awards as the Committee (as hereinafter defined) shall deem necessary or appropriate to reflect equitably the effects of such changes to the holders of options and awards, shall be appropriately substituted for new shares or adjusted, as determined by the Committee in its discretion. Notwithstanding the foregoing, (i) each such adjustment with respect to an Incentive Option shall comply with the rules of Section 424(a) of the Code, and (ii) in no event shall any adjustment be made which would render any Incentive Option granted hereunder other than an incentive stock option for purposes of Section 422 of the Code without the consent of the grantee. III. ADMINISTRATION The Compensation Committee (the "Committee"), or the Board of Directors of the Company (the "Board of Directors") if there is no Committee, will have sole and exclusive authority to administer the Plan. The Committee 1 shall consist of no fewer than two (2) members of the Board of Directors, each of whom shall be a "non-employee Director" within the meaning of Rule 16b-3 or any successor rule or regulation ("Rule 16b-3") promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Committee shall administer the Plan so as to comply at all times with Rule 16b-3. A majority of the members of the Committee shall constitute a quorum, and a resolution passed by a majority of the members of the Committee shall be a resolution of the Committee. Any member of the Committee may be removed at any time, either with or without cause, by resolution adopted by a majority of the Board of Directors, and any vacancy on the Committee may at any time be filled by resolution adopted by a majority of the Board of Directors. Subject to the express provisions of the Plan, the Board of Directors or the Committee, as the case may be, shall have authority, in its discretion, to (i) select employees of the Company as recipients of options or awards; (ii) determine the number and type of options or awards to be granted; (iii) determine the terms and conditions, not inconsistent with the terms hereof, of any options or awards granted; (iv) adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall, from time to time, deem advisable; (v) interpret the terms and provisions of the Plan and any option or award granted and any agreements relating thereto; and (vi) otherwise supervise the administration of the Plan. The determination of the Board of Directors or the Committee, as the case may be, on matters referred to in this Article III shall be conclusive. The Board of Directors or the Committee, as the case may be, may employ such legal counsel, consultants and agents as it may deem desirable for the administration of the Plan and may rely upon any opinion received from any such counsel or consultant and any computation received from any such consultant or agent. Expenses incurred by the Board of Directors or the Committee in the engagement of such counsel, consultant or agent shall be paid by the Company. No member or former member of the Committee or of the Board of Directors shall be liable for any action or determination made in good faith with respect to the Plan or any option or award granted hereunder. The Company shall indemnify each member of the Committee for all costs and expenses and, to the extent permitted by applicable law, any liability incurred in connection with defending any proceedings arising in connection with any actions in administering the Plan or in authorizing or denying authorization to any transaction hereunder in which judgment is given in his favor or in which he is acquitted or in connection with any application, in relation to such liability, in which relief is granted to him by the court. IV. ELIGIBILITY Options and Performance Share awards may be granted only to certain salaried officers and other salaried key employees of the Company and its subsidiaries who are not members of the Committee; provided, that no person shall be eligible for any award if the granting of such award to such person would prevent the satisfaction by the Plan of the general exemptive conditions of Rule 16b-3. No employee shall be granted or awarded stock option and Performance Shares covering, in aggregate, more than 300,000 Shares in any fiscal year of the Company (subject to adjustment as provided in II. above). V. SHARE OPTIONS 1. General. Options may be granted alone or in addition to other awards granted under the Plan. Any options granted under the Plan shall be on such terms as the Committee may from time to time approve and the provisions of the option grants need not be the same with respect to each optionee. Options granted under the Plan may be either Incentive Options or NQSOs. The Committee may grant to any optionee Incentive Options, NQSOs or both types of options. Options granted under the Plan shall be subject to the following terms and conditions and shall contain such additional terms and conditions not inconsistent with the terms of the Plan, as the Committee deems appropriate. Each option grant shall be evidenced by an agreement executed on behalf of the Company by an officer designated by the Committee and accepted by the optionee. Such agreement shall describe the options and state that such 2 options are subject to all the terms and provisions of the Plan and shall contain such other terms and provisions, consistent with the Plan, as the Committee may approve. 2. Exercise Price and Payment. The price per Share under any option granted hereunder shall be such amount as the Board of Directors or the Committee, as the case may be, shall determine, provided, however, that such price shall not be less than one hundred percent (100%) of the fair market value of the Shares subject to such option, as determined below, at the date the option is granted (110% in the case of an Incentive Option granted to any person who, at the time the option is granted, owns shares of the Company or any subsidiary or parent of the Company possessing more than ten percent (10%) of the total combined voting power of all classes of shares of the Company or of any subsidiary or parent of the Company (a "10% Shareholder")), and provided further that in no event may the price be less than the par value of a Share. If the Shares are listed on a national securities exchange in the United States on the date any option is granted, the fair market value per Share shall be deemed to be the highest sales price at which such Shares are sold on such national securities exchange in the United States on the date upon which the option is granted, but if the Shares are not traded on such date, or such national securities exchange is not open for business on such date, the fair market value per Share shall be the closing price per share determined as of the closest preceding date on which such exchange shall have been open for business and the Shares were traded. If the Shares are listed on more than one national securities exchange in the United States on the date any such option is granted, the Board of Directors or the Committee, as the case may be, shall determine which national securities exchange shall be used for the purpose of determining the fair market value per Share. If the Shares are not listed on a national securities exchange but are reported on the National Association of Securities Dealers, Inc. Automated Quotation System ("Nasdaq"), the fair market value per share shall be deemed to be the average of the high bid and low asked prices on the date upon which the option is granted as reported by Nasdaq. For purposes of this Plan, the determination by the Board of Directors or the Committee, as the case may be, of the fair market value of a Share shall be conclusive. 3. Term of Options and Limitations on the Right of Exercise. The term of each option will be for such period as the Board of Directors or the Committee, as the case may be, shall determine, provided that, except as otherwise provided herein, in no event may any option granted hereunder be exercisable more than ten (10) years from the date of grant of such option (five years in the case of an Incentive Option granted to a 10% Shareholder). Each option shall become exercisable in such installments and at such times as may be designated by the Board of Directors or the Committee, as the case may be, and set forth in the agreement related to the grant of options. To the extent not exercised, installments shall accumulate and be exercisable, in whole or in part, at any time after becoming exercisable, but not later than the date the option expires. The Board of Directors or the Committee, as the case may be, shall have the right to limit, restrict or prohibit, in whole or in part, from time to time, conditionally or unconditionally, rights to exercise any option granted hereunder. To the extent that an option is not exercised within the period of exercisability specified therein, it shall expire as to the then unexercised part. 4. Exercise of Options. Options granted under the Plan shall be exercised by the optionee as to all or part of the Shares covered thereby by the giving of written notice of the exercise thereof to the Company at the principal business office of the Company, specifying the number of Shares to be purchased, accompanied by payment therefor made to the Company for the full purchase price of such Shares. The date of actual receipt by the Company of such notice shall be deemed the date of exercise of the option with respect to the Shares being purchased. Upon the exercise of an option granted hereunder, the Company shall cause the purchased Shares to be issued only when it shall have received the full purchase price for the Shares in cash. 3 Notwithstanding the foregoing, the Company, in its sole discretion, may establish cashless exercise procedures whereby an option holder, subject to the requirements of Rule 16b-3, Regulation T, federal income tax laws, and other federal, state and local tax and securities laws, can exercise an option or a portion thereof without making a direct payment of the option price to the Company, including a program whereby option shares would be sold on behalf of and at the request of an option holder by a designated broker and the exercise price would be satisfied out of the sale proceeds and delivered to the Company. If the Company so elects to establish a cashless exercise program, the Company shall determine, in its sole discretion, and from time to time, such administrative procedures and policies as it deems appropriate and such procedures and policies shall be binding on any option holder wishing to utilize the cashless exercise program. 5. Nontransferability of Options. An option granted hereunder shall not be transferable, whether by operation of law or otherwise, other than by will or the laws of descent and distribution, and any option granted hereunder shall be exercisable, during the lifetime of the holder, only by such holder. The option of any person to acquire Shares and all his rights thereunder shall terminate immediately if the holder: (a) attempts to or does sell, assign, transfer, pledge, hypothecate or otherwise dispose of the option or any rights thereunder to any other person except as permitted above; or (b) becomes insolvent or bankrupt or becomes involved in any manner so that the option or any rights thereunder becomes subject to being taken from him to satisfy his debts or liabilities. 6. Termination of Employment. Upon termination of employment of any option holder, any option previously granted to such option holder, unless otherwise specified by the Board of Directors or the Committee, as the case may be, shall, to the extent not theretofore exercised, terminate and become null and void, provided that: (a) if the option holder shall die while in the employ of the Company or any subsidiary of the Company, and at a time when such employee was entitled to exercise an option as herein provided, his estate or the legatees or distributees of his estate or of the option, as the case may be, of such option holder, may, within one (1) year following the date of death, but not beyond that time and in no event later than the expiration date of the option, exercise such option, to the extent not theretofore exercised, in respect of any or all of such number of Shares which the option holder was entitled to purchase; and (b) if the employment of any option holder to whom such option shall have been granted shall terminate by reason of the option holder's retirement on or after he reaches the age of 60 years in such manner as would entitle him to receive full Social Security benefits if he were then 65 years of age, or disability (as described in Section 22(e)(3) of the Code), and while such employee is entitled to exercise such option as herein provided, such option holder shall have the right to purchase under the option the number of Shares, if any, which he was entitled to purchase at the time of such termination, at any time up to and including three (3) months after the date of such termination of employment, but not beyond that time and in no event shall an option be exercised later than the expiration date of the option. In no event shall any person be entitled to exercise any option after the expiration of the period of exercisability of such option as specified therein. Except as otherwise determined by the Board of Directors or the Committee, as the case may be, and other than as set forth above, if an option holder voluntarily terminates his or her employment, or is discharged, any option granted hereunder shall be canceled and the option holder shall have no further rights to exercise any such option and all of the option holder's rights thereunder shall terminate as of the effective date of such termination of employment. If an option granted hereunder shall be exercised by the legal representative of a deceased option holder or former option holder or by a person who acquired an option granted hereunder by bequest or inheritance or by reason of the death of any option holder or former option holder, written notice of such exercise shall be accompanied by a certified copy of letters testamentary or equivalent proof of the right of such legal representative or other person to exercise such option. 4 For the purposes of the Plan, an employment relationship shall be deemed to exist between an individual and a corporation if, at the time of the determination, the individual was an "employee" of such corporation for purposes of Section 422(a) of the Code. A termination of employment shall not be deemed to occur by reason of (i) the transfer of an employee from employment by the Company to employment by a subsidiary of the Company or (ii) the transfer of an employee from employment by a subsidiary of the Company to employment by the Company or by another subsidiary of the Company. 7. Maximum Allotment of Incentive Options. If the aggregate fair market value of Shares with respect to which Incentive Options are exercisable for the first time by an employee during any calendar year (under all share option plans of the Company and any parent or any subsidiary of the Company) exceeds $100,000, any options which otherwise qualify as Incentive Options, to the extent of the excess, will be treated as NQSOs. VI. PERFORMANCE SHARES 1. General. Performance Shares may be granted alone or in addition to any other awards granted under the Plan. The provisions of Performance Share awards need not be the same with respect to each recipient. Performance Share awards granted under the Plan shall be in such form as the Board of Directors or the Committee, as the case may be, may from time to time approve. Each grant of a Performance Share award shall be evidenced by an agreement executed on behalf of the Company by an officer designated by the Board of Directors or the Committee, as the case may be, and accepted by the recipient. Such agreement shall describe the Performance Share award and state that such award is subject to all the terms and provisions of the Plan and shall contain such other terms and provisions, consistent with the Plan, as the Board of Directors or the Committee, as the case may be, may approve. 2. Price. The purchase price for Performance Shares shall be such amount as the Board of Directors or the Committee, as the case may be, shall determine, and subject to applicable law, such purchase price may be zero. The purchase price for Performance Shares, if any, shall be made in cash 3. Restrictions. Each Performance Share award shall be subject to restrictions related to (A) the passage of time and/or (B) the attainment by the Company of specified performance objectives. Company financial performance objectives may be expressed in terms of (i) earnings per Share, (ii) pre-tax profits, (iii) net earnings or net worth, (iv) return on equity or assets, (v) any combination of the foregoing, or (vi) any other standard or standards deemed appropriate by the Board of Directors or the Committee, as the case may be, at the time the award is granted. Such time periods (the "Performance Period") and financial performance goals shall be set by the Board of Directors or the Committee, as the case may be, in its sole discretion. Performance Shares shall become vested in a recipient upon the lapse of the Performance Period, if any, and the attainment of the associated financial performance goals set forth in the agreement between the recipient and the Company or, in the discretion of the Board of Directors or the Committee, as the case may be, upon the death, disability or retirement of the recipient. 4. Share Certificate and Legends. Performance Shares shall be registered in the name of the recipient of an award thereof, provided that the recipient has executed a Performance Share agreement evidencing the award, appropriate blank stock powers and, in the discretion of the Board of Directors or the Committee, as the case may be, an escrow agreement and any other documents which the Board of Directors or the Committee, as the case may be, may require as a condition to the issuance of such Shares. If a recipient shall fail to execute the agreement evidencing a Performance Share award, the appropriate blank stock powers and, in the discretion of the Board of Directors or the Committee, as the case may be, an escrow agreement and any other documents which the Board of Directors or the Committee, as the case may be, may require within the time period prescribed by the Board of Directors or the Committee, as the case may be, at the time the award is granted, the award shall be null and void. At the discretion of the Board of Directors or the Committee, as the case may be, Shares issued in connection with a Performance Share award shall be deposited together with the stock powers with an escrow agent (which may be the Company) designated by the Board of Directors or the Committee, as the case may be. 5 5. Treatment of Dividends. At the time the Performance Share award is granted, the Board of Directors or the Committee, as the case may be, may, in its discretion, determine that the payment to the recipient of dividends, or a specified portion thereof, declared or paid on such Shares by the Company shall be (i) deferred until the lapsing of the restrictions imposed upon such Performance Shares and (ii) held by the Company for the account of the recipient until such time. Payment of deferred dividends in respect of Performance Shares shall be made upon the lapsing of restrictions imposed on the Performance Shares in respect of which the deferred dividends were paid, and any dividends deferred in respect of any Performance Shares shall be forfeited upon the forfeiture of such Performance Shares. 6. Share Restrictions. Subject to the provisions of this Plan and the applicable agreement, during the period when the Performance Shares have not vested, the recipient shall not be permitted to sell, transfer, pledge, assign or otherwise encumber Performance Shares awarded under the Plan. 7. Shareholder Rights. Subject to applicable laws, the recipient shall have no rights, with respect to the Performance Shares until they have vested, including no right to vote the Performance Shares. 8. Termination of Employment. Upon termination of employment with the Company because of death, disability or retirement, the Committee, at its discretion, may provide for waiver of all or a portion of the restrictions applicable to unvested Performance Shares. If termination occurs for any other reason, all shares still subject to restriction shall be forfeited by the recipient. VII. CHANGE OF CONTROL Notwithstanding anything to the contrary contained herein, upon a Change of Control (as defined below) of the Company, (i) all options shall immediately vest and become exercisable in full during the remaining term thereof, and shall remain so, whether or not the option holder to whom such options have been granted remains an employee of the Company or its subsidiaries, and (ii) the restrictions applicable to any or all Performance Share awards shall lapse and such awards shall be fully vested. A Change of Control shall be deemed to have taken place upon the occurrence of any of the following events: (i) any Person (which shall mean and include any individual, corporation, partnership, group, association or other "person", as such term is used in Sections 13 and 14 of the Exchange Act) is, becomes, or has the right to become the beneficial owner, directly or indirectly, of securities of the Company representing 20% or more of the Shares then outstanding, whether or not such Person continues to be the beneficial owner of securities representing 20% or more of the outstanding Shares; or (ii) as the result of, or in connection with, any tender or exchange offer, merger or other business combination, sale of assets or contested election, any announcement of an intention to make any of the foregoing transactions, or any combination of the foregoing transactions (a "Transaction"), those persons who were directors of the Company before the Transaction and were otherwise unaffiliated with any other party to the Transaction shall cease to constitute a majority of the Board of Directors of the Company or any successor to the Company (a "Change in the Board"); or (iii) the shareholders of the Company approve any merger, consolidation, reorganization, liquidation, dissolution, or sale of all or substantially all of the Company's assets in which neither the Company nor a successor resulting from a change in domicile or form of organization will survive as an independent, publicly owned corporation. Notwithstanding anything herein to the contrary, no Change of Control (only with respect to the particular option holder or award grantee referred to therein in the case of (i)(A) and (ii) below) shall be deemed to have occurred by virtue of any event which results in any of the following: 6 (i) the acquisition, directly or indirectly, of 20% or more of the outstanding Shares by (A) the option holder or Performance Share recipient or a person including the option holder or Performance Share recipient, (B) the Company, or (C) any employee benefit plan of the Company or of a subsidiary, or any entity holding securities of the Company recognized, appointed, or established by the Company or by a subsidiary for or pursuant to the terms of such plan; or (ii) a Change in the Board resulting from any Transaction in which the option holder or Performance Share recipient or a Person including the option holder or Performance Share recipient participates directly or indirectly with any party to the Transaction other than the Company. VIII. PURCHASE FOR INVESTMENT Except as hereafter provided, the Company may require the recipient of Shares pursuant to an option or award granted hereunder, upon receipt thereof, to execute and deliver to the Company a written statement, in form satisfactory to the Company, in which such holder represents and warrants that such holder is purchasing or acquiring the Shares acquired thereunder for such holder's own account, for investment only and not with a view to the resale or distribution thereof, and agrees that any subsequent offer for sale or sale or distribution of any of such Shares shall be made only pursuant to either (a) a Registration Statement on an appropriate form under the Securities Act of 1993, as amended (the "Act"), which Registration Statement has become effective and is current with regard to the Shares being offered or sold, or (b) a specific exemption from the registration requirements of the Act, but in claiming such exemption the holder shall, prior to any offer for sale or sale of such Shares, obtain a prior favorable written opinion, in form and substance satisfactory to the Company, from counsel for or approved by the Company, as to the applicability of such exemption thereto. The foregoing restriction shall not apply to (i) issuances by the Company so long as the Shares being issued are registered under the Act and a prospectus in respect thereof is current or (ii) reofferings of Shares by affiliates of the Company (as defined in Rule 405 or any successor rule or regulation promulgated under the Act) if the Shares being reoffered are registered under the Act and a prospectus in respect thereof is current. IX. ISSUANCE OF CERTIFICATES; LEGENDS; PAYMENT OF EXPENSES The Company may endorse such legend or legends upon the certificates for Shares issued pursuant to a grant hereunder and may issue such "stop transfer" instructions to its transfer agent in respect of such Shares as, in its discretion, it determines to be necessary or appropriate to (i) prevent a violation of, or to perfect an exemption from, the registration requirements of the Act, (ii) implement the provisions of the Plan and any agreement between the Company and the optionee or grantee with respect to such Shares, or (iii) permit the Company to determine the occurrence of a disqualifying disposition, as described in Section 421(b) of the Code, of Shares transferred upon exercise of an Incentive Option granted under the Plan. The Company shall pay all issue or transfer taxes with respect to the issuance or transfer of Shares upon exercise of an option or issuance of Performance Shares, as well as all fees and expenses necessarily incurred by the Company in connection with such issuance or transfer, except fees and expenses which may be necessitated by the filing or amending of a Registration Statement under the Act, which fees and expenses shall be borne by the recipient of the Shares unless such Registration Statement has been filed by the Company for its own corporate purposes (and the Company so states) in which event the recipient of the Shares shall bear only such fees and expenses as are attributable solely to the inclusion of the Shares he or she receives in the Registration Statement, provided that the Company shall have no obligation to include any Shares in any Registration Statement. All Shares issued as provided herein shall be fully paid and non-assessable to the extent permitted by law. X. WITHHOLDING TAXES The Company may require an employee exercising an NQSO or disposing of Shares acquired pursuant to the exercise of an Incentive Option in a disqualifying disposition (within the meaning of Section 421(b) of the Code) or pursuant to the award of Performance Shares to reimburse the Company for any taxes required by any government to be withheld or otherwise deducted and paid by the Company in respect of the issuance or disposition 7 of Shares. In lieu thereof, the Company shall have the right to withhold the amount of such taxes from any other sums due or to become due from the Company to the employee upon such terms and conditions as the Board of Directors or the Committee, as the case may be, shall prescribe. Notwithstanding the foregoing, the Committee may, by the adoption of rules or otherwise, modify the provisions of this Article X or impose such other restrictions or limitations as may be necessary to ensure that the withholding transactions described above will be exempt transactions under Section 16(b) of the Exchange Act. If an optionee makes a disposition, within the meaning of Section 424(c) of the Code and regulations promulgated thereunder, of any Share or Shares issued to such optionee pursuant to the exercise of an Incentive Option within the two-year period commencing on the day after the date of the grant, the optionee shall, within ten (10) days of such disposition, notify the Company thereof, by delivery of written notice to the Company at its principal executive office. XI. LISTING OF SHARES AND RELATED MATTERS If at any time the Board of Directors or the Committee, as the case may be, shall determine in its discretion that the listing, registration or qualification of the Shares covered by the Plan upon any national securities exchange or under any state or federal law or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the sale or purchase of Shares under the Plan, no Shares shall be issued unless and until such listing, registration, qualification, consent or approval shall have been effected or obtained, or otherwise provided for, free of any conditions not acceptable to the Board of Directors or the Committee, as the case may be. XII. AMENDMENT OF THE PLAN The Board of Directors or the Committee, as the case may be, may, from time to time, amend the Plan, provided that no amendment shall be made, without the approval of the shareholders of the Company, that will (i) increase the total number of Shares which may be issued under the Plan (other than an increase resulting from an adjustment provided for in Article II), (ii) modify the provisions of the Plan relating to eligibility, (iii) materially increase the benefits accruing to participants under the Plan, or (iv) extend the maximum period of the Plan. The Board of Directors or the Committee, as the case may be, shall be authorized to amend the Plan and the awards granted hereunder to permit the Incentive Options granted hereunder to qualify as incentive stock options within the meaning of Section 422 of the Code. The rights and obligations under any option or award granted before amendment of the Plan or any unexercised portion of such option shall not be adversely affected by amendment of the Plan or the option without the consent of the holder of the option. XIII. TERMINATION OR SUSPENSION OF THE PLAN The Board of Directors or the Committee, as the case may be, may at any time suspend or terminate the Plan. The Plan, unless sooner terminated by action of the Board of Directors or the Committee, as the case may be, shall terminate at the close of business on March 14, 2004. An option or award may not be granted while the Plan is suspended or after it is terminated. Rights and obligations under any option or award granted while the Plan is in effect shall not be altered or impaired by suspension or termination of the Plan, except upon the consent of the person to whom the option or award was granted. The power of the Board of Directors or the Committee, as the case may be, to construe and administer any options and awards granted prior to the termination or suspension of the Plan under Article III nevertheless shall continue after such termination or during such suspension. XIV. GOVERNING LAW The Plan, such options and awards as may be granted thereunder and all related matters shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware. 8 XV. PARTIAL INVALIDITY The invalidity or illegality of any provision herein shall not be deemed to affect the validity of any other provision. XVI. EFFECTIVE DATE The Plan shall become effective upon the adoption by the Board of Directors. XVII. DEFERRAL An employee may elect to defer (i) all or part of his Performance Shares upon vesting or (ii) the Option Profit (as hereinafter defined) with respect to any Shares subject to an NQSO, all in accordance with the provisions of the Company's Deferred Compensation Plan. Any such deferral shall be made in writing in accordance with the provisions of the Deferred Compensation Plan. In cases of deferral, Shares otherwise issuable to the employee shall be issued to the Trust established pursuant to the Deferred Compensation Plan. For purposes of this provision, Option Profit shall mean the amount by which the fair market value of a Share subject to an NQSO exceeds the exercise price of an NQSO, as calculated under the Deferred Compensation Plan. 9 EX-4.5 5 1994 STOCK INCENTIVE PLAN Exhibit 4.5 ORBIT SEMICONDUCTOR, INC. 1994 STOCK INCENTIVE PLAN Section 1. Purpose. The purpose of this stock incentive plan (the "Plan") is to promote the interests of Orbit Semiconductor, Inc., a Delaware corporation (the "Company"), its affiliates, and its stockholders by providing officers, directors, consultants, and other key employees on whom rests the major responsibility for the present and future success of the Company, with an opportunity to acquire a proprietary interest in the Company, and thereby develop a stronger incentive to put forth maximum effort for the continued success and growth of the Company and its affiliates. The opportunity to acquire a proprietary interest in the Company will aid in attracting and retaining key personnel of outstanding ability. This Plan is an amendment and complete restatement of, and replaces, the former Share Option/Stock Issuance Plan of the Company in its entirety. Section 2. Administration. All administrative duties hereunder shall rest with the Board of Directors of the Company (the "Board"), except to the extent the Board appoints from among its members a committee to administer the Plan (in either case, the group administering the Plan is hereinafter referred to as the "Compensation Committee" or "Committee"). The Committee shall have the duty and authority, subject to the provisions of the Plan, to: (a) determine which individuals shall receive awards under the Plan and the nature of each award; (b) grant the awards under the Plan; and issue shares in connection with such awards, as provided in the Plan. (c) determine the terms and conditions of the awards, which need not be identical, including exercise dates, limitations on exercise, restrictions, and the price and payment terms; (d) determine the limitation, if any, on the number of shares acquired under an award which may be sold by an awardee in any year; (e) prescribe the form or forms of the instruments evidencing any awards made under the Plan and of any of the instruments required under the Plan, and to change such forms from time to time; (f) adopt, amend and rescind such rules and regulations and to make all other determinations in connection with the administration of the Plan as it deems necessary or appropriate; and (g) correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Award agreement in the manner and to the extent it shall deem expedient to carry the plan into effect. In making the foregoing determinations, the Committee may take into account the nature of the services rendered by the respective awardees, their present and potential contributions to the Company's success, and such other factors as the Committee, in its discretion, shall deem relevant. The construction and interpretation by the Committee of the terms and provisions of the Plan and the agreements entered into thereunder shall be final and conclusive. No Committee member or director shall be liable for any action or determination taken or made under or with respect to the Plan or any Award in good faith. Section 3. Awards. Awards made under the Plan ("Awards") may be in the form of share options ("Options"), stock appreciation rights ("SARs"), grants of Company shares subject to certain restrictions ("Restricted Stock"), or any combination thereof, as described hereinafter. Section 4. Eligibility. (a) Individuals eligible to participate in the Plan shall be those officers, directors, executives, supervisory personnel and consultants, as well as other employees of the Company or an Affiliate (as defined in Section 18) determined in the sole discretion of the Committee, who are in a position to make a significant contribution to the profitability and growth of the Company and its Affiliates. In no event, however, may any person who is not an employee of the Company or any of its related corporations participate in the Plan if such participation is (a) prohibited, or (b) restricted (either absolutely or subject to various securities requirements, whether legal or administrative, being complied with), in the jurisdiction in which such person is resident under the relevant securities laws of that jurisdiction. Provided Always That in the case of (b) above, the relevant person's participation in the Plan may be effected at the absolute discretion of the Committee if compliance with the relevant securities requirements of the jurisdiction in which such person is resident is not impractical (having regard to the nature of those requirements) and would not involve undue expense. An individual who is the grantee of an Award shall be hereinafter known as a "Participant." (b) To the extent required by Rule 16b-3 of the Exchange Act (as defined in Section 18) or Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), any person who is a director or officer of the Company or any Affiliate shall be granted Awards only if such person has been selected for participation and the terms and provisions of such Awards have been determined solely by, and in the sole discretion of, a Committee of two or more directors, each of whom is a Disinterested Person (defined below) and an Outside Director (defined below). The foregoing provision does not apply to any grant which occurs prior to the date the Company first registers its Ordinary Shares (as defined in Section 5) under Section 12 of the Securities Exchange Act of 1934. (c) Unless otherwise permitted under Rule 16b-3, any right of the Company under the Plan regarding the determination or approval of the form of payment by the Company to the participant who is a director or officer of the Company, shall be made solely by a Committee of two or more directors each of whom is a "Disinterested Person." (d) For the purposes of the Plan, (i) a person is a "Disinterested Person" only either (x) if such director has not, during the one year prior to service as an administrator of this Plan or during such service, been granted or awarded any Awards under this Plan or any equity securities (as defined in Rule 16a-4 of the Exchange Act) of any other plan of the Company or an Affiliate or (y) if such person is not disqualified from being a "disinterested person" under paragraph (c)(2) of Rule 16b-2 of the Exchange Act; and (ii) the term "officer" shall have the same meaning as in paragraph (f) of Rule 16a-1 of the Exchange Act. (iii) the term "Outside Director" shall have the same meaning as in Section 162(m) of the Code and the regulations promulgated thereunder. Section 5. Shares Subject to the Plan. The shares that may be issued pursuant to Awards under the Plan shall be ordinary shares, S$0.01 par value, of the Company ("Ordinary Shares"). The total shares subject to Awards issued pursuant to the grant of options pursuant to the Plan shall not exceed 2,250,000 Ordinary Shares, and the total shares subject to all Awards issued pursuant to the Plan shall not exceed, in the aggregate, 2,250,000 Ordinary Shares (one or more shares per Award). To the extent required to satisfy the performance goal requirement of Section 162(m) of the Code, no employee may be granted more than 100,000 Options during the term of the Plan. If any Award lapses or terminates for any reason without having been exercised in full prior to the lapse or termination, the shares covered by such Award or portion thereof remaining unexercised, may become subject to subsequent Awards made or to be made under the Plan. Shares issued under the Plan shall be authorized but previously unissued shares. Ordinary Shares issuable upon exercise of Awards granted under the Plan may be subject to such restrictions on transfer, forfeitability, repurchase rights, rights of first refusal, or other restrictions as shall be determined by the Committee. Section 6. Options. (a) Granting of Options. Subject to the terms and conditions of the Plan, the Committee may grant Options to purchase Ordinary Shares subject to such terms and conditions as the Committee may determine. The day on which the Committee approves the granting of an Option shall be considered as the date on which such Option is granted unless the Committee approves a future date as the date of grant. Options shall be designated as either incentive stock options ("ISOs") or nonstatutory stock options ("NSOs") at the time of grant. ISOs shall comply with the requirements of Section 422 of the Code. No person shall be granted any ISO under the Plan unless at the time such Option is granted, such person is an employee of the Company or of any Parent Corporation or Subsidiary (as such terms are defined in Section 18), and unless the requirements of paragraph (c) are satisfied, does not own, directly or indirectly, shares possessing more than 10% of the total combined voting power of all classes of shares of the Company or of any Parent Corporation or Subsidiary. (b) Option Price. The purchase price per Ordinary Share subject to an Option (the "Option Price") shall be fixed by the Committee at the time the Option is granted Provided Always That in no event may the purchase price be less than the par value of an Ordinary Share. In the case of ISOs, such purchase price shall not be less than the fair market value ("Fair Market Value") of Ordinary Shares at the time the Option is granted. Fair Market Value, for all applicable purposes under the Plan, shall be determined by the Board in good faith taking into account any applicable requirements of law. (c) Incentive Stock Options. Options granted under the Plan which are intended to be ISOs shall be specifically designated as ISOs and shall be subject to the following additional terms and conditions: (i) 10% Stockholder. If any employee to whom an ISO is to be granted under the Plan is at the time of the grant of such option the owner, directly or indirectly, of shares possessing more than 10% of the total combined voting power of all classes of shares of the Company or of any Parent Corporation or any Subsidiary ("10% Stock Holder"), then the following special provisions shall be applicable to the ISO granted to such individual: (x) The Option Price per share shall not be less than 110% of the Fair Market Value of one Ordinary Share at the time of grant; and (y) The option exercise period shall not exceed five (5) years from the date of grant. (d) Method of Exercising Options. A Participant may exercise an Option granted hereunder by delivering to the Company at its main office (to the attention of the Secretary) written notice of exercise, which notice shall specify the number of shares with respect to which the Option is being exercised, together with payment in cash of the Option Price in exchange for the Company's issuance and delivery of certificates therefor. The Committee, in its discretion, may permit cash payments of the Option Price to be in installments or pursuant to a recourse note upon such terms as the Committee deems appropriate. At the request of a Participant, and to the extent permitted by applicable law, the Committee may approve arrangements with a brokerage firm under which such firm, on behalf of the Participant, will pay the Option Price to the Company and the Company will promptly deliver to such firm the share certificates in respect to the shares exercised, so that the firm may sell such shares, or a portion thereof, for the account of the Participant subject to the terms of the Option. (e) Amount Exercisable. (i) Each Option may be exercised, from time to time, in whole or in part, so long as it is valid and outstanding, subject to any limitations with respect to the number of shares for which the Option may be exercised at a particular time and to such other conditions as the Committee in its discretion may specify upon granting the Option. (ii) Ordinary Shares of the Company that are acquired pursuant to the exercise of an ISO which has been granted to an employee under the Plan shall be deemed to be acquired pursuant to the exercise of an incentive stock option under Code Section 422, only to the extent that the aggregate fair market value (determined as of the respective date or dates of grant) of the Ordinary Shares with respect to which such ISO, and all other incentive stock options which are granted to such employee under the Plan (and under any other incentive stock option plans of the Company and any Parent Corporation and any Subsidiary) are exercisable for the first time by such employee in any one calendar year, does not exceed $100,000. (iii) To effectuate the provisions of paragraph (e)(ii), the Committee may designate the Ordinary Shares that are treated as acquired pursuant to the exercise of an incentive stock option under Code Section 422 by issuing a separate certificate for such shares and identifying such certificates as incentive stock option shares in its statutory register. Section 7. Stock Appreciation Rights. (a) Each SAR is the right to receive payment of an amount equal to the increase, if any, in the Fair Market Value of one Ordinary Share over the period of time between the date of grant of the SAR and the date of exercise. (b) SARs may be granted in conjunction with an Option, either at the time of grant or thereafter, or separately. SARs shall be credited to an SAR account to be maintained for the Participant. An Award of an SAR shall not entitle a Participant to any dividend, voting or other rights of a shareholder of the Company. (c) SARs issued in conjunction with an Option shall be exercisable to the extent that such Option shall be exercisable and in lieu of the exercise of such Option which, to the extent of the exercise of the SAR, shall lapse. SARs which are granted independent of an Option shall be exercisable during the exercise period set forth in the SAR agreement. (d) Upon the exercise of an SAR, the Participant shall receive, in respect thereof, payment in cash, Ordinary Shares or a combination of both as the Committee, in its sole discretion, shall determine, of the amount by which the Fair Market Value of an Ordinary Share on the date of exercise exceeds the Fair Market value of such share on the date of the SAR's grant. Section 8. Restricted Stock Awards. (a) Restricted Stock means one or more shares of Ordinary Shares awarded to a Participant pursuant to this Section 8, which are subject to certain limitations during a specified restriction period. Restricted Stock shall be issued to a Participant without payment of any consideration. A certificate for Restricted Stock so awarded shall be issued in the name of each Participant receiving the Award and shall bear a restrictive legend prohibiting the sale, transfer, pledge or hypothecation of the Restricted Stock evidenced thereby until the expiration of the restriction period set forth therein. (b) Holders of Restricted Stock shall have the right to vote such shares. In granting an Award of Restricted Stock, the Committee, in its sole discretion, may authorize the Participant to receive cash dividends or other distributions with respect to such Ordinary Shares or may direct that they be retained by the Company. (c) Upon the expiration of the restriction period contained in an Award, all restrictions upon such Restricted Stock shall lapse and a new certificate representing such shares will be issued without the restrictive legend described in (a) above. Section 9. Non-Transferability of Awards. Awards of Options and SARs and Awards of Restricted Stock to the extent the restriction period has not expired, shall not be transferable by a Participant other than by will or under the laws of descent and distribution, and with respect to Options and SARs shall be exercisable during his lifetime only by him except as provided in Section 10. Section 10. Exercise Period for Options and SARs. (a) Generally. Each Award of an Option or SAR shall expire on such date as the Committee shall determine on the date such Award is granted, but in no event after the expiration of ten years from the day on which such Award is granted (or five years in the case of ISOs granted to persons described in Section 6(c)(i) and Participants who are not employees of the Company or any of its related corporations on the relevant date of grant), and in all cases each Award shall be subject to earlier termination as provided in the Plan. (b) Effect of Termination of Employment. No Award of an Option or SAR may be exercised by a Participant unless, at the time of such exercise, the Participant is, and continuously since the date of grant of his or her Award, has been an employee or a director of or a consultant for one or more of the Company or an Affiliate, except that subject to Section 11, and if and to the extent the Award agreement or instrument so provides: (i) the Award may be exercised within the period of three months after the date the Participant ceases to be an employee or director of or consultant for any of the foregoing entities (or within such lesser period as may be specified in the Award agreement or instrument); (ii) if the Participant dies while an employee or a director of or a consultant for the Company or an Affiliate, or within three months after the Participant ceases to be such an employee or director or consultant, the Award may be exercised by the person to whom it is transferred by will or the laws of descent and distribution within the period of one year after the date of death (or within such lesser period as may be specified in the Award agreement or instrument); and (iii) if the Participant becomes disabled (within the meaning of Section 22(e)(3) of the Code) while an employee or a director of or consultant for the Company or an Affiliate, the Award may be exercised within the period of one year after the date the Participant ceases to be an employee or director of or consultant for any of the foregoing entities because of such disability (or within such lesser period as may be specified in the Award agreement or instrument); provided, however, that in no event may any such Award be exercised after the expiration date of the Award. Any Award or portion thereof that is not exercised during the applicable time period specified above (or any shorter period specified in Award agreement or instrument) shall be deemed terminated at the end of the applicable time period for purposes of Section 5 hereof. (c) Effective Date of Exercise. Subject to the provisions of paragraphs (a) and (b) of this paragraph and Section 11, the exercise of an Award of an Option or SAR by a Participant for cash, in whole or in part, shall take effect on the date of receipt by the Company of written notice of exercise by the Participant, together with any required payment for such exercise; provided, however, if, (i) such Award is owned by an officer or director of the Company, (ii) such date of receipt does not occur during the period beginning on the third business day following the date of release of the financial data specified in paragraph (e)(1)(ii) of Rule 16b-3 and ending on the twelfth business day following such date, and (iii) the Company has not received a no-action letter from the Securities and Exchange Commission that such Award or class of Awards is exempt from the exercise period requirements of paragraph (e)(3) of Rule 16b-3, the Company shall, within 10 days of receipt of the notice of exercise, notify the Participant in writing of the lack of a no-action letter, and the exercise of the Award shall take effect as of the first day of the period described above in clause (ii) next following the date of such receipt, unless the Participant responds, in writing, in substance and form satisfactory to the Company, within 5 days of receipt of the Company's notification, that the date of receipt is to remain effective. Section 11. Vesting of Awards. (a) An Option or SAR may be exercised, and payment shall be made upon the exercise of such Award, only to the extent that such Award has vested. An Award of Restricted Stock may also be subject to a vesting schedule. Awards shall vest in accordance with the schedule or terms set forth in the Award agreement executed by the Participant and a duly authorized officer of the Company. An Award agreement may, subject to compliance with applicable laws, provide that an Award may be forfeited for cause (as defined in the agreement) or that an Award's vested status may be accelerated at any time in the sole discretion of the Board of Directors. Notwithstanding the foregoing, unless the Board of Directors specifically authorizes a different vesting schedule with respect to an Award, an Award shall vest based on the collective number of full years of service that such Participant has completed with the Company and Affiliates since the Award's date of grant, in accordance with the following schedule: Number of Years of Service Percentage of Award Available Since Date of Grant for Exercise (Cumulative) -------------------------- ----------------------------- 1 25% 2 50% 3 75% 4 or more 100% (b) Notwithstanding anything to the contrary in this Section 11, upon the exercise of an Option or SAR by a director or officer of the Company, the Company shall determine if such exercise complies with paragraph (c)(1) or (e)(4) of Rule 16b-3. If such exercise does not so comply, the Company shall, within 5 days of receipt of the notice of exercise, notify the Participant, in writing, of such non-compliance and such exercise shall not be given effect unless the Participant responds in writing, in substance and form satisfactory to the Company, within 5 days of receipt of the Company's notification, that such exercise is to remain effective. Section 12. Capital Adjustments Affecting Ordinary Shares. In the event that the outstanding Ordinary Shares of the Company are changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of any recapitalization, reclassification, stock split, stock dividend, combination or subdivision, merger, consolidation, or other similar transaction, appropriate adjustment shall be made in the number and kind of shares available under the Plan and under any Awards granted under the Plan. Such adjustment to outstanding Awards shall be made without change in the total value applicable to the unexercised portion of such Awards as of the date of the adjustment. No such adjustment shall be made with respect to an ISO which would, within the meaning of any applicable provisions of the Code, constitute a modification, extension or renewal of any such option or a grant of additional benefits to the holder of such Option. Section 13. Change In Control. Notwithstanding anything contained herein to the contrary, in the event of a Chance In Control, as hereinafter defined, (i) all Awards then outstanding shall become immediately exercisable and (ii) any restrictions then outstanding on any Award of Restricted Stock which have not lapsed shall immediately lapse. For purposes of this section, a "Change In Control" is deemed to occur at the time when either (i) any entity, person or group (other than the Company or an Affiliate or any savings, pension or other benefit plan for the benefit of employees of the Company) which theretofore beneficially owned less than forty percent (40%) of the Ordinary Shares then outstanding acquires Ordinary Shares in a transaction or series of transactions, not previously approved by the Board, that results in such entity, person or group erectly or indirectly owning forty percent (40s) or more of the outstanding Ordinary Shares, or (ii) the election or appointment, within a twelve (12) month period, of persons to the Board who are not Board members at the beginning of such twelve (12) month period, whose election or appointment was not approved by a majority of those persons who were Board members at the beginning of such period, and which newly elected or appointed Board members shall constitute a majority of the Board. Section 14. General Restrictions. (a) Investment Representations; Legends. The Company may require any person to whom an Award is granted, as a condition of exercising such Award, to (i) give written assurances, in substance and form satisfactory to the Company, that such person is acquiring the Ordinary Shares subject to the Award for his own account for investment and not with any present intention of selling or otherwise distributing the same, and to such other effects as the Company deems necessary or appropriate in order to comply with federal and applicable state securities laws; (ii) if the Participant is a director or officer, give written assurances, in substance and form satisfactory to the Company, that such person has consulted with competent counsel as to the application of Section 16(b) of the Securities Exchange Act of 1934 to such exercise. Certificates representing shares issued upon exercise of the Award shall bear a legend prohibiting transfer of such shares unless, in the opinion of competent counsel, such transfer is not inconsistent with any of the requirements of any applicable securities law or such legend is not required. (b) Compliance With Securities Laws. (i) Each Award shall be subject to the requirement that, if at any time counsel to the Company shall determine that the listing, registration or qualification of such Award or the shares subject to such Award upon any securities exchange or under any state or federal law, or the consent or approval of any governmental or regulatory body, is necessary as a condition of, or in connection with the grant of such Award or the issuance or purchase of shares thereunder, such Award shall not be effective and shall not be accepted or exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained on conditions acceptable to the Board of Directors. Nothing herein shall be deemed to require the Company to apply for or to obtain such listing, registration or qualification. (ii) The Company shall provide each Participant with such information, statements, discussions and analyses with respect to the Company in such manner and at such times as may be required under state or federal securities laws. Section 15. Tax Withholding. Tax withholding obligations, if any, in connection with an Award shall be satisfied by a cash payment by the person receiving the Ordinary Shares subject to the Award to the Company. Section 16. No Rights as Shareholder. No recipient of an Award shall have rights as a shareholder with respect to Ordinary Shares covered by his Award until the date of allotment and issue of such Ordinary Shares subject to any applicable restrictions thereon; and, except as otherwise provided in Section 12 herein or in an Award agreement, no adjustment for dividends, or otherwise, shall be made if the record date therefor is prior to the date of issuance of such shares. Section 17. Employment Obligation and Employee Benefits. The granting of any award shall not impose upon the Company any obligation to employ or retain the services or continue to employ or retain the services of a Participant. The right of the Company to terminate the employment of any employee or consultant shall not be diminished or affected in any way by reason of the fact that an Award has been granted to him. The amount of any income deemed to be received by an Award Owner as a result of the exercise of an Award or the sale of shares received upon such exercise shall not constitute "compensation" or "earnings" with respect to which any other benefits of such person are determined, including without limitation benefits under any pension, profit sharing, life insurance or salary continuation plan. Section 18. Definition of Parent Corporation and Affiliate. (a) Affiliate. The term "Affiliate" shall mean a corporation or other person which, at the time of reference, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the company. The status of a person as an "Affiliate" shall be determined as set forth above at the time of (1) the grant of the Award for purposes of Section 4; (2) the Participant's cessation of services for purposes of Section 10(b); (3) the vesting date for purposes of Section 11; and (4) the date of the Change In Control for purposes of Section 13. (b) Exchange Act. The term "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, or any successor rule. (c) Parent Corporation. The term "Parent Corporation" shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with ownership of the Company if, at the time of the grant of the Award, each of the corporations other than the Company owns stock possessing more than 50% of the combined voting power of all classes of stock in one of the other corporations in such chain. The status of a person as a "Parent Corporation" shall be determined as set forth above at the time of the grant of the Award. (d) Subsidiary. The term "Subsidiary" shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with ownership by the Company if, at the time of the grant of the Award, each of the corporations other than the last corporation in the unbroken chain owns stock possessing more than 50% of the total combined voting power of all classes of stock in one of the other corporations in such chain. The status of a person as a "Subsidiary" shall be determined as set forth above at the time of the grant of the Award. Section 19. Written Agreement. Each Award made hereunder shall be embodied in a written agreement which shall be subject to the terms and conditions prescribed above and shall be signed by the Participant and by the Chief Executive Officer or other duly authorized officer of the Company for and on behalf of the Company prior to such Award becoming effective. Such agreement shall contain such other provisions as the Committee, in its sole discretion, shall deem advisable. Each agreement shall be substantially in one of the forms attached hereto or in such other form not inconsistent with the Plan as shall be specified by the Committee at the time such Award is authorized to be granted. Section 20. Amendment of the Plan. (a) The Board of Directors may at any time and from time to time modify or amend the Plan in any respect, except that without the approval of the shareholders of the Company, the Board of Directors may not make any amendments that require approval of the shareholders under Rule 16b-3. As of July 1994, Rule 16b-3 required shareholder approval of amendments that materially increase the benefits accruing to individuals who participate in the Plan, (ii) materially increase the maximum number of shares which may be issued under the Plan (except for permissible adjustments provided in the Plan), or (iii) materially modify the requirements as to eligibility for participation in the Plan. In addition, the Board shall not modify or amend the Plan in a manner that would require shareholder approval under Section 422 of the Internal Revenue Code, without obtaining such approval, if such amendment would affect the status of any outstanding ISO as an incentive stock option under Section 422 of the Code. As of July 1994, Section 422 of the Code required shareholder approval of amendments that (A) increase the aggregate number of shares that may be issued pursuant to ISOs (except for permissible adjustments provided in the Plan), or (B) change the designation of employees or class of employees eligible to receive ISOs. The termination or any modification or amendment of the Plan shall not, without the consent of a Participant, affect his or her rights under an Award previously granted to him or her. With the consent of the Participant affected, the Committee may amend outstanding Award agreements in a manner not inconsistent with the Plan. (b) Notwithstanding the foregoing provisions of paragraph (a)(i) and (iii), the Board of Directors shall have the right, but not the obligation, without the consent of the Company's shareholders, to (i) amend or modify the terms and provisions of the Plan and of any outstanding ISOs granted under the Plan or any shares to be issued thereunder to the extent necessary to qualify any or all such options or shares for such favorable federal income tax treatment (including deferral of taxation upon exercise), as may be afforded incentive stock options under Section 422 of the Code; and (ii) amend or modify the terms and provisions of the Plan and of any outstanding Award granted under the Plan or any shares to be issued thereunder to the extent necessary to comply with any securities law to which, in the opinion of counsel to the Company, the Plan or Award or shares is subject. Section 21. Governing Law. The Plan and all Award agreements issued hereunder shall be governed by the laws of the State of Delaware. Section 22. Expenses of Administration. All costs and expenses incurred in the operation and administration of this Plan shall be borne by the Company. Section 23. Effective Date and Duration of the Plan. (a) Effective Date. The Plan shall become effective when adopted by the Board of Directors. Awards may be granted under the Plan at any time after the effective date and before the date fixed for termination of the Plan. (b) Termination. The Plan shall terminate upon the earlier of (i) the close of business on the day next preceding the tenth anniversary of the date of its adoption by the Board of Directors, or (ii) the date on which all shares available for issuance under the Plan shall have been issued pursuant to the exercise or cancellation of Awards granted under the Plan. If the date of termination is determined under (i) above, then Awards outstanding on such date shall continue to have force and effect in accordance with the provisions of the Plan as then in effect and with the instruments evidencing such Awards. EX-4.6 6 1989 STOCK OPTION PLAN Exhibit 4.6 KMOS SEMI-CUSTOM DESIGNS, INC. 1989 STOCK OPTION PLAN 1. Purpose of the Plan. The purpose of the 1989 Stock Option Plan (the "Plan) of KMOS Semi-Custom Designs, Inc. (the "Company") is to: (a) Furnish incentive to certain key employees chosen to receive options because they are considered capable of responding by improving operations and increasing profits; (b) Encourage selected employees to accept or continue employment with the Company or its Affiliates; and (c) Increases the interest of selected employees in the Company's welfare through their participation in the growth in value of the ordinary shares, S$0.01 par value, of the Company ("Ordinary Shares"). To accomplish the foregoing objectives, this Plan provides a means whereby employees may receive options to purchase Ordinary Shares. Options granted under this Plan ("Options") will be either nonqualified options ("NQOs") or Incentive Stock Options ("ISOs") as defined in Section 422A of the Internal Revenue Code of 1986, as amended (the "Code"). 2. Eligible Persons. Every person who at the date of grant is an employee of the Company or of any Affiliate of the Company is eligible to receive NQOs or ISOs under this Plan; provided, however, that an ISO may to be granted under this Plan to any person who owns, directly or indirectly, shares of the Company constituting more than ten percent of the total combined voting power of the Company's Outstanding Ordinary Shares, or the stock of an Affiliate of the Company, unless the exercise price of the ISO at the time the option is granted is at least 110 percent of the fair market value of the shares subject to the option, and the option is exercisable for no more than five years after the date of grant, as set forth in Section 6.2. The term "Affiliate" as used in this Plan; means a parent or subsidiary corporation, as defined in the applicable provisions (currently Section 425) of the Code. The term "employee" shall have the meaning ascribed for purposes of Section 3401(c) of the Code and the Treasury Regulations promulgated thereunder and shall include an office or a Director who is also an employee. 3. Shares Subject To This Plan. The total number of shares that may be issued upon the exercise of Options is Three Million (3,000,000) Ordinary Shares. The shares covered by the portion of any grant that expires unexercised under this Plan shall become available again for grants under this Plan. All shares issued under this Plan shall be counted against the Three Million (3,000,000) share limitation. The number of shares reserved for purchase under this Plan is subject to adjustment in accordance with the provisions for adjustment in this Plan. Shares shall be issued from authorized but previously unissued shares. 4. Administration. This Plan shall be administrative by the Board of Directors of the Company (the "Board") or by a committee appointed by the Board which shall not have less than one Board member (in either case, the "Administrator"). No option shall be granted to a director of the Company except (i) by the Board when a majority of the members of the Board, and a majority of the directors acting in the matter, are disinterested persons, or (ii) by the Administrator when the Administrator is composed of three or more persons having full authority to act in the matter and each member of the Administrator is a disinterested person. No Option shall be granted to an officer of the Company except (i) by the Board, or (ii) by the Administrator when the Administrator is composed solely of three or more directors, or is composed of three or more persons having full authority to act in the matter and each member of the Administrator is a disinterested person. "Disinterested person" for this purpose, shall have the same meaning as in Rule 16b-3 or any successor rule ("Rule 16b-3") under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). This Administrator may delegate nondiscretionary administrative duties to such employees of the Company as it deems proper. Subject to the provisions of this Plan, the Administrator shall have the authority to select the persons to receive Options under this Plan, to fix the number of shares that each optionee may purchase, to set the terms and conditions of each Option (including whether each Option should be a NQO or an ISO) and to determine all other matters relating to this Plan. To the extent permitted under all applicable laws, no member of the Administrator shall be liable for any act or omission on such member's own part, including but not limited to the exercise of any power or discretion given to such member under this Plan, except for those acts or omissions resulting from such member's own gross negligence or willful misconduct. All questions of interpretation, implementation, and application of this Plan shall be determined by the Administrator. Such determinations shall be final and binding on all persons. 5. Granting of Rights. 5.1 Ten-Year Limitation. No Options shall be granted under this Plan after ten years from the date of adoption of this Plan by the Board of Directors. 5.2 Written Agreement; Effect. Each Option shall be evidenced by a written agreement, in form satisfactory to the Company, executed by the Company and the person to whom such Option is Granted. If the agreement relates to an ISO or NQO, the agreement shall specify whether each option it evidence is an NQO or an ISO. Failure of the grantee to execute an agreement shall not void or invalidate the grant of an Option; the Option ay not be exercised, however, until the agreement is executed. 5.3 Annual $100,000 Limitation. In no event shall an ISO be granted pursuant to this Plan which would cause the grantee to be in receipt of ISOs covering shares of the Company which are exercisable for the first time during any calendar year having an aggregate fair market value, determined for each Option as of the date of grant thereof, in excess of $100,000. 5.4 Advance Approvals. The Administrator may approve the grant of Options under this Plan to persons who are expected to become employees of the Company, but are not employees at the date of approval. In such cases, the Option shall be deemed granted (and the exercise price determined with reference to the fair market value of the underlying shares), without further approval, on the date the grantee becomes an employee and satisfies all requirements of this Plan for Options granted on that date. 6. Terms and Conditions of Options. Each Option shall be designated as an ISO or an NQO and shall be subject to the terms and conditions set forth in Section 6.1. NQOs shall also be subject to the terms and conditions set forth in Section 6.2, but not those set forth in Section 6.3. ISOs shall also be subject to the terms and conditions set forth in Section 6.3, but not those set forth in Section 6.2. 6.1 Terms and Conditions to Which All Options Are Subject. All Options shall be subject to the following terms and conditions: 6.1.1 Changes in Capital Structure. Subject to Section 6.1.2, if the shares of the Company is changed by reason of a stock split, reverse stock split, stock dividend, or recapitalization, or converted into or exchanged for other securities as a result of a merger, consolidation or reorganization, appropriate adjustments shall be made in (A) the number and class of shares subject to this Plan and each Option outstanding under this Plan, and (B) the exercise price of each outstanding Option; provided, however, that the Company shall not be required to issue fractional shares as a result of any such adjustment. Each such adjustment shall be determined by the Administrator in its sole discretion, which determination shall be final and binding on all persons. 6.1.2 Corporate Transactions. New option rights may be substituted for the Options granted under this Plan, or the Company's obligations to Options outstanding under this Plan may be assumed, by an employer corporation other than the Company, or by a parent or subsidiary of such employer corporation, in connection with any merger, consolidation, acquisition, separation, reorganization, liquidation or like occurrence in which the Company is involved, in such manner that the then outstanding Options which are ISOs will continue to be "incentive stock options" within the meaning of Section 422A of the Code to the full extent permitted thereby. Notwithstanding the foregoing or the provisions of Section 6.1.1, if such employer corporation, or parent or subsidiary of such employer corporation, does not substitute new option rights for, and substantially equivalent to, the Options granted hereunder, or assume the Options granted hereunder, the Options shall terminate (A) upon dissolution or liquidation of the Company, or similar occurrence, or (B) upon any merger, consolidation, acquisition, separation, or similar occurrence, where the Company will not in economic substance be the surviving corporation; provided, however, that each optionee shall be mailed notice at least 15 days prior to such dissolution, liquidation, merger, consolidation, acquisition, separation, or similar occurrence, and shall have at least 10 days after the mailing of such notice to exercise any unexpired option rights granted hereunder. All Options are considered 100% vested in such event. 6.1.3 Option Term. Each Option granted under this Plan shall expire ten years from the date of its grant or such earlier date as may be set by the Administrator on the date of its grant. 6.1.4 Time of Option Exercise. Subject to Section 6.3.3, Options shall be exercisable in accordance with the terms of each eligible person's Option, and shall be exercisable in whole or in part. 6.1.5 Option Grant Date. Except in the case of advance approvals described in Section 5.4, the date of grant of an Option under this Plan shall be the date as of which the Administrator approves the grant. 6.1.6 Nonassignability of Option Rights. No Option shall be assignable or otherwise transferable by the optionee except by will or by the laws of descent and distribution. During the life of the optionee, an Option shall be exercisable only by the optionee or the optionee's guardian or legal representative in the event of disability of the optionee. In the event of voluntary termination of employment or disability, the optionee must offer unexpired options to the Company under the terms of any shareholders' agreement in force on the date of such event. 6.1.7 Payment. Payment in full, in cash, shall be made for all shares purchased at the time written notice of exercise of an Option is given to the Company, and proceeds of any payment shall constitute general funds of the Company. 6.1.8 Termination of Employment. Option rights granted to an optionee under this Plan, to the extent such rights have not then expired or been exercised, shall terminate three months after the optionee ceases, for any reason and with or without cause, to be an employee of the Company or any Affiliate of the Company (in either case, "Employment Termination"), and shall not be exercisable on or after said date. In no event, however, shall any such option be exercisable after the specified expiration date of the option term. 6.1.9 Other Provisions. Each Option may contain such other terms, provisions, and conditions not inconsistent with this Plan as may be determined by the Administrator, and each ISO granted under this Plan shall include such provisions and conditions as are necessary to qualify the Option as an "incentive stock option" within the meaning of Section 422A of the Code. 6.2 Terms and Conditions to Which Only NQOs Are Subject. Options granted under this Plan which are designated as NQOs or which become NQOs shall be subject to the following terms and conditions: 6.2.1 Exercise Price. The exercise price of an NQO shall be determined by the Administrator provided that in no event shall the exercise price per share be less than the par value of a share. 6.2.2 Withholding and Employment Taxes. At the time of exercise of an NQO, the optionee shall remit to the Company in cash all applicable federal and state withholding and employment taxes. 6.3 Terms and Conditions to Which Only ISOs Are Subject. Options granted under this Plan which are designated as ISOs shall be subject to the following terms and conditions: 6.3.1 Exercise Price. The exercise price of an ISO, which shall be approved by the Board of Directors, shall be determined in accordance with the applicable provisions of the Code and shall in no event be less than the fair market value (determined as described in this Section 6.3.1) of the shares covered by the ISO at the time the ISO is granted, except that the exercise price of an ISO granted to any person who owns, directly or indirectly (or is treated as owning by reason of attribution rules, currently set forth in Code Section 425), shares of the Company constituting more than ten percent of the total combined voting power of the Company's outstanding shares, or the stock of any affiliate of the Company, shall in no event be less than 110 percent of such fair market value. In the absence of an established market for the shares; the fair market value thereof shall be determined in good faith by the Administrator, with reference to the Company's net worth, prospective earning power, dividend-paying capacity, and other relevant factors, including the goodwill of the Company, the economic outlook in the Company's industry, the Company's position in the industry and its management, and the values of stock of other corporations in the same or a similar line of business. If the shares in the Company is regularly quoted by a recognized securities dealer, its fair market value shall be the mean between the closing high bid and low asked quotations for the shares on the date the ISO is granted (or if there are no quoted prices for the date of grant, then for the last preceding business day on which there were quoted prices) as quoted on the National Association of Securities Dealers Automated Quotation System ("NASDAQ"), or any similar system of automated dissemination of quotations of securities prices then in common use, as reported in the Wall Street Journal or similar publication. If the shares of the Company are listed on any established stock exchange, its fair market value shall be the mean between the highest and lowest selling price or the closing bid if no sale occurred, as quoted on such exchange (or the largest such exchange) for the date the ISO is granted (or if there are no sales for such date of grant, then for the last preceding business day on which there were sales), as reported in the Wall Street Journal or similar publication. 6.3.2 Expiration. Unless an earlier expiration date is specified by the Administrator at the time of grant, each ISO granted under this Plan shall expire ten years from the date of its grant, except that an ISO granted to any person who owns, directly or indirectly (or is treated as owning by reason of applicable attribution rules, currently set forth in Code Section 425), shares of the Company constituting more than ten percent of the total combined voting power of the Company's outstanding shares, or the stock of any Affiliate of the Company, shall expire five years from the date of its grant. 6.3.3 Disqualifying Dispositions. If shares acquired by exercise of an ISO granted pursuant to this Plan is disposed of within two years from the date of grant of the ISO or within one year after the transfer of the shares to the optionee, the holder of the shares immediately prior to the disposition shall promptly notify the Company in writing of the date and terms of the disposition and shall provide such other information regarding the disposition as the Company may require. Such holder shall pay to the Company any withholding and employment taxes which the Company in its sole discretion deems applicable to such disposition. Any disposition not in accordance with this Section 6.3.3 shall be void and of no effect. The Company may instruct its shares transfer agent by appropriate means, including placement of legends or stock certificates, not to transfer shares acquired by exercise of an ISO unless it has been advised by the Company that the requirements of this Section 6.3.3 have been satisfied. 6.3.4 Withholding and Employment Taxes. At such time or times as the Administrator determines, at or following the time of exercise of an ISO, the optionee shall remit to the Company in cash all federal and state withholding and employment taxes which the Administrator in its sole discretion deems applicable to the exercise of an ISO or the disposition of shares acquired by such exercise. The Administrator may, in the exercise of the Administrator's sole discretion, permit an optionee to pay some or all of such taxes by means of a promissory note on such terms as the Administrator deems appropriate. 7. Manner Of Exercise. An optionee wishing to exercise an Option shall give written notice to the Company at its principal executive office, accomplished by an executed stock purchase agreement in form and substance satisfactory to the Company and by payment of the exercise price as provided in Section 6.1.7. The date the Company receives written notice of an exercise hereunder accomplished by payment of the exercise price will be considered as the date such Option was exercised. Promptly after receipt of written notice of exercise of an option, the Company shall allot and issue the shares in respect of which the option is being exercised and deliver to the optionee or such other person a certificate or certificates for the requisite number of shares. An optionee shall not have any privileges as shareholder with respect to any shares covered by the Option until the date of allotment and issuance of the shares. 8. Employment Relationship. Nothing in this Plan or any Option granted hereunder shall interfere with or limit in any way the right of the Company or of any of its Affiliates to terminate an optionee's employment or status as a director at any time, nor confer upon any optionee any right to continue in the employ of, or as a director of, the Company or any of its Affiliates. 9. Amendment, Suspension, Or Termination of This Plan. The Board may at any time amend, alter, suspend, or discontinue this Plan, except to the extent that shareholder approval is required by applicable law; provided, however, no amendment, alteration, suspension, or discontinuation shall be made that would impair the rights of any grantee under any Option theretofore granted, without the grantee's consent. The Board shall have the power to make such changes in this Plan and in the regulations and administrative provisions hereunder or in any outstanding Option and in the opinion of counsel for the Company may be necessary or appropriate from time to time to enable any Option granted pursuant to this Plan to qualify as an incentive stock option under Section 422A of the Code, subject in al events to the consent of the holder of such Option. However, in the event of a change of control of the voting shares or the sale of substantially all of the assets of the Company, all Options issued under this Plan shall become immediately 100% vested. 10. Indemnification of Administrator. The Company shall indemnify each present and future member of the group constituting the Administrator against, and each member of the group constituting the Administrator shall be entitled without further act on his/her part to indemnify from the Company for, all expenses (including the amount of judgments and the amount of approved settlements made with a view to the curtailment of costs of litigation, other than amounts paid to the Company itself) reasonably incurred by such person in connection with or arising out of any action, suit, or proceeding to the full extent permitted by the laws of the State of California and by the Bylaws of the Company. 11. Effective Date Of This Plan. This Plan shall become effective upon adoption by the Board. EX-4.7 7 990 NON-QUALIFIED STOCK OPTION PLAN Exhibit 4.7 The KMOS Semi-Custom Designs, Inc. 1990 Non-Qualified Stock Option Plan 1. Purpose. The purpose of this Plan is to strengthen KMOS Semi-Custom Designs, Inc. (the "Company"), by providing additional means of retaining and attracting competent management personnel and key independent contractors, and by providing to participating key employees and independent contractors added incentive for high levels of performance and for unusual efforts to increase the earnings of the Company. The Plan seeks to accomplish these purposes and results by providing a means whereby such key persons may purchase shares of the Company pursuant to options. 2. Administration. This Plan shall be administered by a committee (the "Committee") consisting of members selected by, and serving at the pleasure of, the Board of Directors of the Company (the "Board"). Any action of the Committee with respect to the administration of the Plan shall be taken pursuant to a majority vote, or to the written consent of a majority, of its members. Subject to the express provisions of the Plan, the Committee shall have the authority to construe and interpret the Plan, and to define the terms used therein, to prescribe, amend, and rescind rules and regulations relating to the administration of the Plan, and to make all other determinations necessary or advisable for the administration of the Plan. The determinations of the Committee on the foregoing matters shall be conclusive. Subject to the express provisions of the Plan, the Committee shall determine from the eligible class the individuals who shall receive options, and the terms and provisions of the options (which need not be identical); provided, however, that all grants of options shall be by the Board. 3. Participation. Key employees and independent contractors of the Company or of any subsidiary corporation shall be eligible for selection to participate in the Plan; provided, however, that members of the Committee shall not, while members of the Committee, be eligible to receive the grant of options under the Plan. In no event, however, may any independent contractor participate in the Plan if such participation is (a) prohibited, or (b) restricted (either absolutely or subject to various securities requirements, whether legal or administrative, being complied with), in the jurisdiction in which such independent contractor is resident under the relevant securities laws of that jurisdiction. Provided Always That in the case of (b) above, the relevant independent contractor's participation in the Plan may be effected at the absolute discretion of the Committee if compliance with the relevant securities requirements of the jurisdiction in which such independent contractor is resident is not impractical (having regard to the nature of those requirements) and would not involve undue expense. An individual who has been granted an option may, if otherwise eligible, be granted an additional option or options if the Board shall so determine. 4. Shares Subject to the Plan. Subject to adjustments as provided in Section 11 hereof, the shares to be offered under the Plan shall be shares of the Company's authorized but unissued ordinary shares (hereinafter called "Shares") and the aggregate amount of stock to be delivered upon the exercise of all options granted under the Plan shall not exceed Five Hundred Thousand Shares (500,000), subject to adjustment as set forth in Section 11 of this Plan. If any option granted hereunder shall expire or terminate for any reason without having been fully exercised in full, the unpurchased shares subject thereto shall again be available for the purposes of this Plan. Subject to the general limitations contained in this Plan, the Board may make any adjustment in the exercise price, the number of shares subject to, or the term of an option by cancellation of an outstanding option and a subsequent regranting of an option, amendment, or substitution, or regrant may have an exercise price which is higher or lower than the prior option, provide for a greater or lesser number of shares subject to the option, or a longer or shorter term than the prior option. 5. Option Price. The purchase price of Shares covered by each option shall be determined by the Committee Provided That in no event shall the purchase price per share be less than the par value of a share The purchase price of any shares purchased shall be paid in full in cash or by check at the time of each purchase. 6. Option Period. Each option and all rights or obligations thereunder shall expire on such date as the Committee or the Board shall determine, but not later than the seventh (7th) anniversary of the date on which the option is granted, and shall be subject to earlier termination as hereinafter provided. 7. Exercise of Options. Each person to whom an option is granted must agree, at the request of the Company, to remain either (i) in the continuous employ of the Company or a subsidiary or parent corporation or (ii) under written or oral contract to perform services as an independent contractor for the Company or a subsidiary or parent corporation, following the date of the granting of the option for a period to be determined by the Committee and then included in the specific Stock Option Agreement to be executed with each option holder. Nothing contained in the Plan (or in any option granted pursuant to the Plan) shall confer upon any employee or independent contractor any right to continue in the employ of the Company or of any subsidiary or parent, corporation or constitute any contract or agreement of employment or independent contract or interfere in any way with the right of the Company or any subsidiary or parent corporation to reduce such person's compensation from the rate in existence at the time of the granting of an option or to terminate such person's employment or other contractual relationship, but nothing contained herein or in any option agreement shall affect any contractual rights of an employee or independent contractor. Each option shall become exercisable and the total number of shares subject thereto shall be purchasable, in such installments, which need not be equal, as the Committee shall determine; provided, however, that if the holder of an option shall not in any given installment period purchase all of the shares that such holder is entitled to purchase in such installment period, such holder's right to purchase any shares not purchased in such installment period shall continue until the expiration or sooner termination of such holder's option. No option or installment thereof shall be exercisable except in respect of whole shares, and fractional share interests shall be disregarded. No less than 10 shares may be purchased at one time unless the number purchased is at the time the total number available for purchase under the option. The option holder shall have the right to receive property at the time of exercise of the option so long as the property is subject to inclusion in income under Internal Revenue Code Section 83. 8. Nontransferability of Options. An option granted under this Plan shall, by its terms, be non-transferable by the option holder other than by will or the laws of descent and distribution, and shall be exercisable during his lifetime only by the option holder. 9. Termination of Employment or Independent Contractor Relationship. If the option holder ceases to be employed by or ceases to be an independent contractor of the Company or any subsidiary or parent, because of discharge for cause, such holder's option shall expire concurrently with such discharge for cause. The term "cause" as used herein with respect to the discharge by the Company of any option holder, shall mean failure by such option holder to perform in a satisfactory manner such holder's duties as an employee or independent contractor of the Company, as determined by the Board in its discretion, or conduct on the part of such option holder which the Board, in good faith shall determine would reflect to seriously upon the public reputation of the option holder, if such conduct became publicly known, as to prejudice substantially the Company's interests is such option holder were retained as an employee or independent contractor of the Company or any subsidiary or parent. If the option holder ceases to be employed by or ceases to be an independent contractor of the Company or any subsidiary or parent, for any reason other than death or discharge for cause, such holder's option shall, subject to earlier termination pursuant to Section 6, expire as may be provided in the option. 10. Death of Employee. If any option holder dies while employed by or under contract to the Company or any subsidiary or parent, or during the period referred to in Section 9 hereof, such holder's option shall, subject to earlier termination pursuant to Section 6, expire one year after the date of such death (or after such shorter period as may be provided in the option), and during such period after such death such option may, to the extent that installments, if any, had accrued as of the date of the termination of such holder's employment, be exercised by the person or persons to whom the option holder's rights under the option shall pass by will or by the applicable laws of descent and distribution. In no event, however, shall any such option be exercisable after the specified expiration date of the option term. 11. Adjustments Upon Changes in Capitalization. If the outstanding shares of the Company are increased, decreased, or changed into, or exchanged for a different number or kind of shares or securities of the Company through reorganization, merger, recapitalization, reclassification, stock split-up, stock dividend, stock consolidation, or otherwise, an adjustment to the options granted pursuant to this Plan shall either be made or not made, said determination to be made by the Committee and included in the specific Stock Option Agreement to be executed with each option holder. Upon the dissolution or liquidation of the Company, or upon a reorganization, merger, or consolidation of the Company with one or more corporations as a result of which the Company is not the surviving corporation, or upon a sale of substantially all the property of the Company to another corporation, this Plan shall terminate, unless provision be made in connection with such transaction for the assumption of options theretofore granted, or the substitution for such options of new options covering the stock of a successor employer corporation, or a parent or subsidiary thereof, with appropriate adjustments as to number and kind of shares and prices. 12. Amendment and Termination. The Board may at any time suspend, amend, or terminate this Plan and may, with the consent of an option holder, make such modifications of the terms and conditions of such holder's option as it shall deem advisable. No option may be granted during any suspension of the Plan or after such termination. The amendment, suspension, or termination of the Plan shall not, without the consent of the option holder, alter or impair any rights or obligations under any option theretofore granted under this Plan. 13. Time for Granting of Options. The granting of an option pursuant to this Plan shall take place at the time of the Committee's action, as described in the second paragraph of Section 3 hereof; provided, however, that if the appropriate resolutions of the Committee indicate that an option is to be granted as of and at some future date, the date of grant shall be such future date. In the event action by the Committee is taken by unanimous written consent of its members, the action of the Committee shall be deemed to be at the time the last member signs the consent. 14. Privileges of Share Ownership; Nodistributive Intent. The holder of an option shall not be entitled to the privilege of share ownership as to any shares not actually issued and delivered to him. Upon the exercise of an option at a time when there is not in effect under the Securities Act of 1933 a registration statement relating to the shares issuable upon exercise thereof and available for delivery a prospectus meeting the requirements of Section 10(a)(3) of said Act, the option holder shall represent and warrant in writing to the Company that the shares purchased are not being acquired with a view to the distribution thereof. No shares shall be issued upon the exercise of any option unless and until any then applicable requirements of the Securities and Exchange Commission, the California Commissioner of Corporations, or other regulatory agencies having jurisdiction and of any exchanges upon which shares of the Company may be listed shall have been fully complied with. 15. Effective Date of the Plan. This Plan shall be effective upon approval thereof by the Board of Directors. 16. Termination. Unless previously terminated by the Board of Directors, this Plan shall terminate at the close of business on October 1, 2000, and no options shall be granted under it thereafter, but such termination shall not affect any option theretofore granted. EX-5.1 8 COUNSEL OPINION Exhibit 5.1 [On the letterhead of Allen & Gledhill] Flextronics International Ltd. 11 Ubi Road 1, #07-01/02, Meiban Industrial Building, Singapore 408723. 4th April, 2000 Dear Sirs, Registration Statement on Form S-8 of Flextronics International Ltd. (the "Company") 1. At your request, we have examined the Registration Statement on Form S-8 (the "Registration Statement") filed or to be filed by the Company with the Securities and Exchange Commission on or about 4th April, 2000 in connection with the registration under the Securities Act of 1933, as amended, of:- (a) an aggregate of 4,000,000 ordinary shares of S$0.01 each in the capital of the Company ("Ordinary Shares") (the "1993 Option Shares") subject to issuance by the Company upon the valid exercise of subscription rights represented by outstanding share options granted under 1993 Share Option Plan adopted by the Company (the "1993 Plan"); (b) an aggregate of 1,243,634 Ordinary Shares (the "1993 DII Option Shares") subject to issuance by the Company upon the valid exercise of subscription rights represented by outstanding share options granted under The DII Group, Inc. 1993 Share Option Plan adopted by the Company (the "1993 DII Plan"); (c) an aggregate of 3,885,239 Ordinary Shares (the "1994 DII Option Shares") subject to issuance by the Company upon the valid exercise of subscription rights represented by outstanding share options granted under The DII Group, Inc. 1994 Stock Incentive Plan adopted by the Company (the "1994 DII Plan"); (d) an aggregate of 106,222 Ordinary Shares (the "Orbit Option Shares") subject to issuance by the Company upon the valid exercise of subscription rights represented by outstanding share options granted under the Orbit Semiconductor, Inc. 1994 Stock Incentive Plan adopted by the Company (the "Orbit Plan"); and (e) an aggregate of 5,957 Ordinary Shares (the "KMOS Option Shares") subject to issuance by the Company upon the valid exercise of subscription rights represented by outstanding share options granted under the KMOS Semi-Custom Designs, Inc. 1989 Stock Option Plan adopted by the Company (the "1989 KMOS Plan") and the KMOS Semi-Custom Designs, Inc. 1990 Non-Qualified Stock Option Plan adopted by the Company (the "1990 KMOS Plan"); (the 1993 Option Shares, the 1993 DII Option Shares, the 1994 DII Option Shares, the Orbit Option Shares and the KMOS Option Shares are hereinafter collectively referred to as the "Option Shares"). 2. As your Singapore counsel, we have examined the proceedings taken by the Company in connection with:- (a) the adoption of each of the 1993 Plan, the 1993 DII Plan, the 1994 DII Plan, the Orbit Plan, the 1989 KMOS Plan and the 1990 KMOS Plan; (b) the increase in the maximum number of Ordinary Shares authorised for issuance under the 1993 Plan; and (c) the allotment and issuance of new Ordinary Shares arising from the exercise of the subscription/purchase rights represented by outstanding share options granted under each of the 1993 Plan, the 1993 DII Plan, the 1994 DII Plan, the Orbit Plan, the 1989 KMOS Plan and the 1990 KMOS Plan respectively (the "Company's Allotment Procedures"). 3. We have also made such other examinations of law and fact as we have considered necessary in order to form a basis for the opinion hereafter expressed. 4. Based on the foregoing and assuming that:- (a) the total issued and paid-up share capital of the Company consequent upon the issue of the Option Shares from time to time will not exceed the authorised share capital of the Company at any time; and (b) there shall be subsisting a valid authority given pursuant to Section 161 of the Singapore Companies Act, Chapter 50 in respect of the issue of the Option Shares from time to time, we are of the opinion that the Option Shares allotted and issued by the Company (i) upon the exercise of the subscription rights represented by outstanding share options granted under each of the 1993 Plan, the 1993 DII Plan, the 1994 DII Plan, the Orbit Plan, the 1989 KMOS Plan and the 1990 KMOS Plan in accordance with their respective terms against full payment of the applicable exercise price, (ii) pursuant to the Company's Allotment Procedures, and (iii) represented by share certificates issued by the Company in respect of such Option Shares, will be legally issued and fully-paid. 5. We consent to the use of this opinion as an exhibit to the Registration Statement and further consent to all references to us, if any, in the Registration Statement and any amendments thereto. Yours faithfully, /s/ Allen & Gledhill EX-23.1 9 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS Exhibit 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the use of our report for the year ended March 31, 1999 dated December 22, 1999 included in Flextronics International Ltd.'s Form 8-K filed on December 23, 1999 and to all references to our Firm included in this registration statement. Our report dated April 21, 1999 included in Flextronics International Ltd.'s Form 10-K for the year ended March 31, 1999 is no longer appropriate since restated financial statements have been presented giving effect to a business combination accounted for as a pooling-of-interests. /s/ Arthur Andersen LLP ARTHUR ANDERSEN LLP San Jose, California April 4, 2000 EX-23.2 10 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS Exhibit 23.2 [LETTERHEAD OF MOORE STEPHENS] Our Reference: 85/25725 3 April 2000 Flextronics International Limited 2241 Fortune Drive San Jose CA 95131 USA FLEXTRONICS INTERNATIONAL LIMITED FORM S-8 As independent public accountants, we hereby consent to the use of our reports (and all references to our Firm) included in or made a part of this registration statement. /s/ Moore Stephens Moore Stephens -----END PRIVACY-ENHANCED MESSAGE-----