As filed with the Securities and Exchange Commission on May 8, 2013
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CADENCE DESIGN SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
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Delaware
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77-0148231
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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2655 Seely Avenue, Building 5
San Jose, California 95134
(Address of Principal Executive Offices) (Zip Code)
Options Assumed by Cadence Design Systems, Inc.
originally granted under the
Tensilica, Inc. 2007 Stock Incentive Plan
(Full title of the plan)
James J. Cowie, Esq.
Senior Vice President, General Counsel and
Secretary
Cadence Design Systems, Inc.
2655 Seely Avenue, Building 5
San Jose, California 95134
(Name and address of agent for service)
(408) 943-1234
(Telephone number, including area code, of agent for
service)
Copy to:
Stewart L. McDowell, Esq.
Gibson, Dunn & Crutcher LLP
555 Mission Street, Suite 3000
San Francisco, California 94105
(415) 393-8200
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated
filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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x
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Accelerated filer
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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CALCULATION OF REGISTRATION FEE
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Title of Securities
to be Registered
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Amount to be
Registered
(1)
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Proposed Maximum
Offering Price Per
Share
(2)
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Proposed Maximum
Aggregate Offering
Price
(2)
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Amount of
Registration Fee
(2)
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Common Stock, par value $0.01 per share
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1,495,107
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$2.46
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$3,677,963.22
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$501.68
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(1)
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This Registration Statement on Form S-8 shall also cover any additional shares of Registrant’s common stock that become issuable upon the exercise of options
granted under the Tensilica, Inc. 2007 Stock Incentive Plan by reason of any stock dividend, stock split, recapitalization or other similar transaction effected without the receipt of consideration that results in an increase in the number of the
outstanding shares of Cadence Design Systems, Inc. common stock.
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(2)
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Calculated solely for purposes of calculating the amount of the registration fee under Rule 457(h) of the Securities Act of 1933, as amended, on the basis of the
weighted average offering price per share at which such options may be exercised.
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PART I
Information Required in the Section 10(a) Prospectus
Pursuant to the
instructions to Form S-8, Part I (Information Required in the Section 10(a) Prospectus) is not filed as part of this Registration Statement.
The shares of common stock registered hereunder are subject to options registered hereunder that have been assumed by Cadence Design Systems, Inc. (the “Registrant”) pursuant to an Agreement and
Plan of Merger, dated as of March 11, 2013, by and among the Registrant, Tensilica, Inc., Tundra Holdings, Inc., a wholly-owned subsidiary of the Registrant, Tundra Subsidiary Corporation, an indirect subsidiary of the Registrant, and, solely
in its capacity as the agent for the former security holders of Tensilica, Shareholder Representative Services LLC. These options were originally granted to directors, employees, consultants, advisors and officers of Tensilica, Inc. under the
Tensilica, Inc. 2007 Stock Incentive Plan (the “Plan”).
PART II
Information Required in the Registration Statement
Item 3.
Incorporation of Documents by Reference
The Registrant hereby
incorporates by reference into this Registration Statement the following documents previously filed with the Securities and Exchange Commission (the “Commission”):
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(a)
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The Registrant’s Annual Report on Form 10-K for the fiscal year ended December 29, 2012, including all material incorporated by reference therein;
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(b)
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The Registrant’s Current Reports on Form 8-K filed with the Commission on February 12, 2012, March 11, 2013, April 2, 2013 and
April 24, 2013;
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(c)
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The Registrant’s Quarterly Report on Form 10-Q filed with the Commission on April 25, 2013; and
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(d)
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The description of the Registrant’s common stock to be offered hereby contained in the Registrant’s Registration Statement on Form 8-A filed with the
Commission on January 12, 2006.
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All documents filed pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), after the date of this Registration Statement and prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall be deemed to be incorporated by reference into this Registration Statement and to be a part hereof from the date of filing of such documents.
Any document, and any statement contained in a document, incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein, or in any other subsequently filed document that also is incorporated or deemed to be incorporated by reference herein, modifies
or supersedes such document or statement. Any such document or statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. Subject to the foregoing, all
information appearing in this Registration Statement is qualified in its entirety by the information appearing in the documents incorporated by reference.
Item 4.
Description of Securities
Not Applicable.
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Item 5.
Interests of Named Experts and Counsel
Not Applicable.
Item 6.
Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law permits a
corporation to indemnify any of its directors or officers who was or is a party or is threatened to be made a party to any third party proceeding by reason of the fact that such person is or was a director or officer of the corporation against
expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, if such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe that such person’s conduct was unlawful. In a derivative
action, i.e., one by or in the right of a corporation, the corporation is permitted to indemnify any of its directors or officers against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with
the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made if
such person shall have been adjudged liable to the corporation, unless and only to the extent that the court in which such action or suit was brought shall determine upon application that such person is fairly and reasonably entitled to indemnity
for such expenses despite such adjudication of liability.
Article VII of the Registrant’s currently effective
Certificate of Incorporation eliminates the personal liability of its directors for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the corporation
or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law or (iv) for any transaction
from which the director derived an improper personal benefit. In addition, as permitted by Section 145 of the Delaware General Corporation Law, the Bylaws of the Registrant provide that: (a) the Registrant is required to indemnify its
directors and officers and persons serving in such capacities in other business entities (including, for example, subsidiaries of the Registrant) at the Registrant’s request (such directors, officers and other persons are hereinafter referred
to collectively as, “Covered Persons”), to the fullest extent permitted by Delaware law, including those circumstances in which indemnification would otherwise be discretionary; (b) the Registrant is required to advance expenses as
incurred to such Covered Persons in connection with defending a proceeding; (c) the indemnitee(s) of the Registrant have the right to bring suit, and to be paid the expenses of prosecuting such suit, if successful, to enforce the rights to
indemnification under the Bylaws or to advancement of expenses under the Bylaws; (d) the rights conferred in the Bylaws are not exclusive and the Registrant is authorized to enter into indemnification agreements with such directors, officers
and employees; (e) the Registrant is required to maintain director and officer liability insurance to the extent reasonably available; and (f) the Registrant may not retroactively amend the Bylaws indemnification provision in a way that is
adverse to such Covered Persons.
The Registrant has entered into indemnity agreements with each of its executive officers and
directors that provide the maximum indemnity allowed to officers and directors by Section 145 of the Delaware General Corporation Law and the Bylaws, as well as certain additional procedural protections. The Registrant also maintains a limited
amount of director and officer insurance. The indemnification provision in the Bylaws, and the indemnity agreements entered into between the Registrant and its officers or directors, may be sufficiently broad to permit indemnification of the
Registrant’s officers and directors for liability arising under the Securities Act.
Item 7.
Exemption from Registration
Claimed
Not Applicable.
II-2
Item 8.
Exhibits
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Exhibit
Number
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Exhibit
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4.01
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Instruments Defining Rights of Stockholders. Reference is made to the Registrant’s Registration Statement on Form 8-A filed with the Commission on January 12, 2006
incorporated by reference pursuant to Item 3(d).
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5.01
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Opinion and consent of Gibson, Dunn & Crutcher LLP.
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23.01
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Consent of Independent Registered Public Accounting Firm.
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23.02
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Consent of Gibson, Dunn & Crutcher LLP (contained in Exhibit 5.01).
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24.01
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Power of Attorney (included on the signature pages to this Registration Statement on Form S-8).
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99.01
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Tensilica, Inc. 2007 Stock Incentive Plan.
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Item 9.
Undertakings
A. The undersigned Registrant hereby undertakes: (1) to file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement
(i) to include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) to reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement; and (iii) to include any material information with respect to the plan of distribution not
previously disclosed in this Registration Statement or any material change to such information in this Registration Statement;
provided, however
, that clauses (1)(i) and (1)(ii) shall not apply if the information required to be
included in a post-effective amendment by those clauses is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference into this Registration Statement; (2) that for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and (3) to remove from registration by means of a post-effective amendment any of the securities being registered which
remain unsold upon the termination of the offering under the Plan.
B. The undersigned Registrant hereby undertakes
that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference into this
Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or
controlling persons of the Registrant pursuant to the indemnity provisions incorporated by reference in Item 6, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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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 this 8th day of May, 2013.
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CADENCE DESIGN SYSTEMS, INC.
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By:
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/s/ Lip-Bu Tan
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Lip-Bu Tan
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President, Chief Executive Officer and Director
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Lip-Bu
Tan, Geoffrey G. Ribar and James J. Cowie, and each of them, his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes
as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitutes or substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the date indicated.
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Signature
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Title
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Date
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/s/ Lip-Bu Tan
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President, Chief Executive Officer and Director
(Principal Executive Officer)
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May 8, 2013
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Lip-Bu Tan
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/s/ Geoffrey G. Ribar
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Senior Vice President and Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
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May 8, 2013
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Geoffrey G. Ribar
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/s/ Dr. John B. Shoven
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Chairman of the Board of Directors
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May 8, 2013
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Dr. John B. Shoven
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/s/ Susan L. Bostrom
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Director
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May 8, 2013
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Susan L. Bostrom
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/s/ Dr. James D. Plummer
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Director
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May 8, 2013
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Dr. James D. Plummer
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/s/ Dr. Alberto Sangiovanni-Vincentelli
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Director
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May 8, 2013
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Dr. Alberto Sangiovanni-Vincentelli
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/s/ George M. Scalise
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Director
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May 8, 2013
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George M. Scalise
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/s/ Roger S. Siboni
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Director
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May 8, 2013
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Roger S. Siboni
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/s/ Young K. Sohn
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Director
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May 8, 2013
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Young K. Sohn
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EXHIBIT INDEX
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Exhibit
Number
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Exhibit
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4.01
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Instruments Defining Rights of Stockholders. Reference is made to the Registrant’s Registration Statement on Form 8-A filed with the Commission on January 12, 2006
incorporated by reference pursuant to Item 3(d).
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5.01
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Opinion and consent of Gibson, Dunn & Crutcher LLP.
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23.01
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Consent of Independent Registered Public Accounting Firm
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23.02
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Consent of Gibson, Dunn & Crutcher LLP (contained in Exhibit 5.01).
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24.01
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Power of Attorney (included on the signature pages to this Registration Statement on Form S-8).
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99.01
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Tensilica, Inc. 2007 Stock Incentive Plan.
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Exhibit 5.01
May 8, 2013
Cadence Design Systems, Inc.
2655 Seely Avenue, Building 5
San Jose, CA 95134
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Re:
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Cadence Design Systems, Inc. Registration Statement on Form S-8
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Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8
(the “Registration Statement”) of Cadence Design Systems, Inc., a Delaware corporation (the “Company”), filed with the Securities and Exchange Commission (the “Commission”) pursuant to the Securities Act of 1933, as
amended (the “Securities Act”), in connection with the offering by the Company of up to 1,495,107 shares of the Company’s common stock, par value $0.01 per share (the “Shares”), that are subject to issuance by the Company
upon the exercise of options granted under the Tensilica, Inc. 2007 Stock Incentive Plan (the “2007 Plan”). The options issuable under the 2007 Plan were assumed by the Company pursuant to the terms of that certain Agreement and Plan of
Merger, dated as of March 11, 2013, by and among the Company, Tensilica, Inc., Tundra Holdings, Inc., a wholly-owned subsidiary of the Company, Tundra Subsidiary Corporation, an indirect subsidiary of the Company, and, solely in its capacity as
the agent for the former security holders of Tensilica, Shareholder Representative Services LLC.
We have examined the
originals, or photostatic or certified copies, of such records of the Company and certificates of officers of the Company and of public officials and such other documents as we have deemed relevant and necessary as the basis for the opinions set
forth below. In our examination, we have assumed the genuineness of all signatures, the legal capacity and competency of all natural persons, the authenticity of all documents submitted to us as originals and the conformity to original documents of
all documents submitted to us as copies.
Based upon the foregoing examination and in reliance thereon, and subject to the
assumptions stated and in reliance on statements of fact contained in the documents that we have examined, we are of the opinion that the Shares, when issued and sold in accordance with the terms set forth in the 2007 Plan and against payment
therefor, and when the Registration Statement has become effective under the Securities Act, will be validly issued, fully paid and non-assessable.
We consent to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required
under Section 7 of the Securities Act or the Rules and Regulations of the Commission.
Very truly
yours,
/s/ Gibson, Dunn & Crutcher LLP
Exhibit 23.01
The Board of Directors
Cadence Design Systems, Inc.:
We consent to the use of our reports dated February 21, 2013, with respect to the consolidated balance sheets of Cadence Design Systems, Inc. and
subsidiaries as of December 29, 2012 and December 31, 2011, and the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the years in the three-year period ended
December 29, 2012, and the related financial statement schedule, and the effectiveness of internal control over financial reporting as of December 29, 2012, incorporated herein by reference.
/s/ KPMG LLP
Santa Clara, California
May 8, 2013
Exhibit 99.01
TENSILICA, INC.
2007 S
TOCK
I
NCENTIVE
P
LAN
Adopted by the Board of Directors
on May 18, 2007
and Amended on October 25, 2012
TABLE OF CONTENTS
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TENSILICA, INC.
2007 STOCK INCENTIVE PLAN
SECTION 1.
PURPOSE.
The Plan was adopted by the Board of Directors effective May 18, 2007. The purpose of the Plan is to offer selected service providers the opportunity to acquire equity in the Company through awards
of Options (which may constitute incentive stock options or nonstatutory stock options) and the award or sale of Shares.
The
award of Options and the award or sale of Shares under the Plan is intended to be exempt from the securities qualification requirements of the California Corporations Code by satisfying the exemption under section 25102(o) of the California
Corporations Code. However, awards of Options and the award or sale of Shares may be made in reliance upon other state securities law exemptions. To the extent that such other exemptions are relied upon, the terms of this Plan which are included
only to comply with section 25102(o) shall be disregarded to the extent provided in the Stock Option Agreement or Restricted Share Agreement. In addition, to the extent that section 25102(o) or the regulations promulgated thereunder are amended to
delete any requirements set forth in such law or regulations, the terms of this Plan which are included only to comply with section 25102(o) or the regulations promulgated thereunder as in effect prior to any such amendment shall be disregarded to
the extent permitted by applicable law.
SECTION 2.
DEFINITIONS.
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2.1
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“Board”
shall mean the Board of Directors of the Company, as constituted from time to time.
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2.2
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“Change in Control”
shall mean the occurrence of any of the following events:
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(a)
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The consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if persons who were not stockholders of
the Company immediately prior to such merger, consolidation or other reorganization own immediately after such merger, consolidation or other reorganization fifty percent (50%) or more of the voting power of the outstanding securities of each
of (A) the continuing or surviving entity and (B) any direct or indirect parent corporation of such continuing or surviving entity;
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(b)
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The consummation of the sale, transfer or other disposition of all or substantially all of the Company’s assets or the stockholders of the Company approve a plan
of complete liquidation of the Company; or
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(c)
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Any “person” (as defined below) who, by the acquisition or aggregation of securities, is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities ordinarily (and apart
from rights accruing under special circumstances) having the right to vote at elections of directors (the
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“Base Capital Stock”); except that any change in the relative beneficial ownership of the Company’s securities by any person resulting solely from a reduction in the aggregate
number of outstanding shares of Base Capital Stock, and any decrease thereafter in such person’s ownership of securities, shall be disregarded until such person increases in any manner, directly or indirectly, such person’s beneficial
ownership of any securities of the Company.
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For purposes of Section 2.2(c), the term “person” shall have the
same meaning as when used in sections 13(d) and 14(d) of the Exchange Act but shall exclude (1) a trustee or other fiduciary holding securities under an employee benefit plan maintained by the Company or a Parent or Subsidiary and (2) a
corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the Stock.
Notwithstanding the foregoing, the term “Change in Control” shall not include a transaction the sole purpose of which is (a) to change the state of the Company’s incorporation,
(b) to form a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction; or (c) to make an initial public offering of the
Company’s Stock.
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2.3
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“Code”
shall mean the Internal Revenue Code of 1986, as amended.
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2.4
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“Committee”
shall mean the committee designated by the Board, which is authorized to administer the Plan, as described in
Section 3 hereof.
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2.5
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“Company”
shall mean Tensilica, Inc., a Delaware corporation.
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2.6
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“Consultant”
shall mean a consultant or advisor who is not an Employee or Outside Director and who performs bona fide
services for the Company, a Parent or Subsidiary.
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2.7
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“Disability”
shall mean a condition that renders an individual unable to engage in substantial gainful activity by reason of
any medically determinable physical or mental impairment.
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2.8
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“Employee”
shall mean any individual who is a common-law employee of the Company, a Parent or a Subsidiary and who is an
“employee” within the meaning of section 3401(c) of the Code and regulations issued thereunder.
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2.9
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“Exchange Act”
shall mean the U.S. Securities and Exchange Act of 1934, as amended.
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2.10
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“Exercise Price”
shall mean the amount for which one Share may be purchased upon the exercise of an Option, as specified in
a Stock Option Agreement.
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2.11
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“Fair Market Value”
means, with respect to a Share, the market price of one Share of Stock, determined by the Board in good
faith. Such determination shall be conclusive and binding on all persons.
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2.12
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“ISO”
shall mean an incentive stock option described in section 422(b) of the Code.
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2.13
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“NSO”
shall mean a stock option that is not an ISO.
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2.14
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“Option”
shall mean an ISO or NSO granted under the Plan and entitling the holder to purchase Shares.
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2.15
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“Optionee”
shall mean an individual or estate that holds an Option.
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2.16
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“Outside Director”
shall mean a member of the Board of the Company, a Parent or a Subsidiary who is not an Employee.
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2.17
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“Parent”
shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the Company,
if each of the corporations other than the Company owns 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. A corporation that attains the
status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date.
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2.18
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“Plan”
shall mean the Tensilica, Inc. 2007 Stock Incentive Plan.
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2.19
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“Prior Plan”
shall mean the Tensilica, Inc. 1998 Stock Option Plan.
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2.20
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“Purchase Price”
shall mean the consideration for which one Share may be acquired under the Plan (other than upon exercise
of an Option).
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2.21
|
“Purchaser”
shall mean a person to whom the Board has offered the right to acquire Shares under the Plan (other than upon
exercise of an Option).
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2.22
|
“Restricted Share Agreement”
shall mean the agreement between the Company and a Purchaser who acquires Shares under the Plan
that contains the terms, conditions and restrictions pertaining to the acquisition of such Shares.
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2.23
|
“Securities Act”
shall mean the U.S. Securities Act of 1933, as amended.
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2.24
|
“Service”
shall mean service as an Employee, a Consultant or an Outside Director, subject to such further limitations as may
be set forth in the applicable Stock Option Agreement or Restricted Share Agreement. Service shall be deemed to continue during a bona fide leave of absence approved by the Company in writing if and to the extent that continued crediting of Service
for purposes of the Plan is expressly required by the terms of such leave or by applicable law, as determined by the Company. However, for purposes of determining whether an Option is entitled to ISO status, and to the extent required under the
Code, an Employee’s employment will be treated as terminating ninety (90) days after such Employee went on leave, unless such Employee’s right to return to active work is guaranteed by law or by a contract or such Employee immediately
returns to active work. The Company determines which leaves count toward Service, and when Service terminates for all purposes under the Plan.
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2.25
|
“Share”
shall mean one share of Stock, as adjusted in accordance with Section 9 (if applicable).
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2.26
|
“Stock”
shall mean the common stock of the Company.
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|
2.27
|
“Stock Option Agreement”
shall mean the agreement between the Company and an Optionee which contains the terms, conditions
and restrictions pertaining to the Optionee’s Option.
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2.28
|
“Subsidiary”
means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company,
if each of the corporations other than the last corporation in the unbroken chain owns 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. A
corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.
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2.29
|
“Ten-Percent Stockholder”
means an individual who owns more than ten percent (10%) of the total combined voting power
of all classes of outstanding stock of the Company, its Parent or any of its Subsidiaries. In determining stock ownership for purposes of this Section 2.28, the attribution rules of section 424(d) of the Code shall be applied.
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SECTION 3.
ADMINISTRATION.
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3.1
|
General Rule.
The Plan shall be administered by the Board. However, the Board may delegate any or all administrative functions under
the Plan otherwise exercisable by the Board to one or more Committees. Each Committee shall consist of at least one member of the Board who has been appointed by the Board. Each Committee shall have the authority and be responsible for such
functions as the Board has assigned to it. If a Committee has been appointed, any reference to the Board in the Plan shall be construed as a reference to the Committee to whom the Board has assigned a particular function. The Board may also
authorize one or more officers of the Company to designate Employees, other than such authorized officer or officers, to receive Awards and/or to determine the number of such Awards to be received by such persons; provided, however, that the Board
shall specify the total number of Awards that such officer or officers may so award.
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3.2
|
Board Authority and Responsibility.
Subject to the provisions of the Plan, the Board shall have full authority and discretion to take
any actions it deems necessary or advisable for the administration of the Plan. All decisions, interpretations and any other actions of the Board with respect to the Plan shall be final and binding on all persons deriving rights under the Plan.
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SECTION 4.
ELIGIBILITY.
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4.1
|
General Rule.
Only Employees shall be eligible for the grant of ISOs. Only Employees, Consultants and Outside Directors shall be
eligible for the grant of NSOs or the award or sale of Shares.
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SECTION 5.
STOCK SUBJECT TO
PLAN.
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5.1
|
Share Limit.
Shares offered under the Plan shall be authorized but unissued Shares. The maximum aggregate number of
Shares which may be issued under the Plan shall not exceed 11,221,960 Shares, plus any Shares remaining available for grant of awards under the Prior Plan on the effective date of the Plan (including Shares subject to outstanding
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options under the Prior Plan on the effective date of this Plan that are subsequently forfeited or terminate for any other reason before being exercised and unvested Shares that are forfeited
pursuant to such Prior Plan after the effective date of this Plan). The limitations of this Section 5.1 shall be subject to adjustment pursuant to Section 9. The number of Shares that are subject to Options or other rights outstanding at
any time under the Plan shall not exceed the number of Shares which then remain available for issuance under the Plan. The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the
requirements of the Plan.
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5.2
|
Additional Shares.
In the event that any outstanding Option or other right expires or is canceled for any reason, the Shares allocable
to the unexercised portion of such Option or other right shall remain available for issuance pursuant to the Plan. If a Share previously issued under the Plan is reacquired by the Company pursuant to a forfeiture provision, right of repurchase or
right of first refusal, then such Share shall again become available for issuance under the Plan.
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SECTION 6.
RESTRICTED SHARES.
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6.1
|
Restricted Share Agreement.
Each award or sale of Shares under the Plan (other than upon exercise of an Option) shall be evidenced by
a Restricted Share Agreement between the Purchaser and the Company. Such award or sale shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions imposed by the Board, as set forth in the
Restricted Share Agreement, that are not inconsistent with the Plan. The provisions of the various Restricted Share Agreements entered into under the Plan need not be identical.
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6.2
|
Duration of Offers and Nontransferability of Purchase Rights.
Any right to acquire Shares (other than an Option) shall automatically
expire if not exercised by the Purchaser within thirty (30) days after the Company communicates the grant of such right to the Purchaser. Such right shall be nontransferable and shall be exercisable only by the Purchaser to whom the right was
granted.
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6.3
|
Purchase Price.
The Purchase Price of Shares offered under the Plan shall not be less than eighty-five percent (85%) of the Fair
Market Value of such Shares; provided, however, if the Purchaser is a Ten-Percent Stockholder, the Purchase Price shall not be less than one hundred percent (100%) of the Fair Market Value of such Shares. Subject to the foregoing in this
Section 6.3, the Board shall determine the amount of the Purchase Price in its sole discretion. The Purchase Price shall be payable in a form described in Section 8.
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6.4
|
Repurchase Rights and Transfer Restrictions.
Each award or sale of Shares shall be subject to such forfeiture conditions, rights of
repurchase, rights of first refusal and other transfer restrictions as the Board may determine, subject to the requirements of Section 10. Such restrictions shall be set forth in the applicable Restricted Share Agreement and shall apply in addition
to any restrictions otherwise applicable to holders of Shares generally.
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SECTION 7.
STOCK OPTIONS.
|
7.1
|
Stock Option Agreement.
Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and
the Company. The Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions imposed by the Board, as set forth in the Stock Option Agreement, which are not inconsistent with the
Plan. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical.
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7.2
|
Number of Shares; Kind of Option.
Each Stock Option Agreement shall specify the number of Shares that are subject to the Option and
shall provide for the adjustment of such number in accordance with Section 9. The Stock Option Agreement shall also specify whether the Option is intended to be an ISO or an NSO.
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7.3
|
Exercise Price.
Each Stock Option Agreement shall set forth the Exercise Price, which shall be payable in a form described in
Section 8. Subject to the following requirements, the Exercise Price under any Option shall be determined by the Board in its sole discretion:
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|
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(a)
|
Minimum Exercise Price for ISOs
. The Exercise Price per Share of an ISO shall not be less than one hundred percent (100%) of the Fair Market Value of a
Share on the date of grant; provided, however, that the Exercise Price per Share of an ISO granted to a Ten-Percent Stockholder shall not be less than one hundred ten percent (110%) of the Fair Market Value of a Share on the date of grant.
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(b)
|
Minimum Exercise Price for NSOs
. The Exercise Price per Share of an NSO shall not be less than eighty five percent (85%) of the Fair Market Value of a Share
on the date of grant; provided, however, that the Exercise Price per Share of an NSO granted to a Ten-Percent Stockholder shall not be less than one hundred ten percent (110%) of the Fair Market Value of a Share on the date of grant.
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7.4
|
Term.
Each Stock Option Agreement shall specify the term of the Option. The term of an Option shall in no event exceed ten
(10) years from the date of grant. The term of an ISO granted to a Ten-Percent Stockholder shall not exceed five (5) years from the date of grant. Subject to the foregoing, the Board in its sole discretion shall determine when an Option
shall expire.
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7.5
|
Exercisability.
Each Stock Option Agreement shall specify the date when all or any installment of the Option is to become exercisable;
provided, however, that no Option shall be exercisable unless the Optionee has delivered to the Company an executed copy of the Stock Option Agreement. Subject to the following restrictions, the Board in its sole discretion shall determine when all
or any installment of an Option is to become exercisable and may, in its discretion, provide for accelerated exercisability in the event of a Change in Control or other events:
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(a)
|
Options Granted to Employees
. An Option granted to an Optionee who is not a Consultant or an officer or director of the Company, a Parent or a Subsidiary, to the
extent required by California law, shall be exercisable at the minimum rate of twenty percent (20%) per year for each of the first five (5) years starting from the date of grant, subject to reasonable conditions such as continued Service.
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-6-
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(b)
|
Options Granted to Outside Directors, Consultants or Officers
. An Option granted to an Optionee who is a Consultant or an officer or director of the Company, a
Parent or a Subsidiary shall be exercisable at any time or during any period established by the Board, subject to reasonable conditions such as continued Service; provided, however, that the exercisability of an Option granted to an Optionee for
service as an Outside Director shall be automatically accelerated in full in the event of a Change in Control.
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(c)
|
Early Exercise
. A Stock Option Agreement may permit the Optionee to exercise the Option as to Shares that are subject to a right of repurchase by the Company in
accordance with the requirements of Section 10.1.
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7.6
|
Repurchase Rights and Transfer Restrictions.
Shares purchased on exercise of Options shall be subject to such forfeiture conditions,
rights of repurchase, rights of first refusal and other transfer restrictions as the Board may determine, subject to the requirements of Section 10. Such restrictions shall be set forth in the applicable Stock Option Agreement and shall apply
in addition to any restrictions otherwise applicable to holders of Shares generally.
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7.7
|
Transferability of Options.
During an Optionee’s lifetime, his or her Options shall be exercisable only by the Optionee or by the
Optionee’s guardian or legal representatives, and shall not be transferable other than by beneficiary designation, will or the laws of descent and distribution. Notwithstanding the foregoing, however, to the extent permitted by the Board in its
sole discretion, an NSO may be transferred by the Optionee to one or more family members or a trust established for the benefit of the Optionee and/or one or more family members to the extent permitted by section 260.140.41 (d) of Title 10 of
the California Code of Regulations and Rule 701 of the Securities Act.
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7.8
|
Exercise of Options on Termination of Service.
Each Option shall set forth the extent to which the Optionee shall have the right to
exercise the Option following termination of the Optionee’s Service. Each Stock Option Agreement shall provide the Optionee with the right to exercise the Option following the Optionee’s termination of Service during the Option term, to
the extent the Option was exercisable for vested Shares upon termination of Service, for at least thirty (30) days if termination of Service is due to any reason other than cause, death or Disability, and for at least six (6) months after
termination of Service if due to death or Disability (but in no event later than the expiration of the Option term). If the Optionee’s Service is terminated for cause, the Stock Option Agreement may provide that the Optionee’s right to
exercise the Option terminates immediately on the effective date of the Optionee’s termination. To the extent the Option was not exercisable for vested Shares upon termination of Service, the Option shall terminate when the Optionee’s
Service terminates. Subject to the foregoing, such provisions shall be determined in the sole discretion of the Board, need not be uniform among all Options issued pursuant to the Plan, and may reflect distinctions based on the reasons for
termination of Service.
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-7-
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7.9
|
No Rights as a Stockholder.
An Optionee, or a transferee of an Optionee, shall have no rights as a stockholder with respect to any
Shares covered by the Option until such person becomes entitled to receive such Shares by filing a notice of exercise and paying the Exercise Price pursuant to the terms of the Option. No adjustments shall be made, except as provided in
Section 9.
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|
7.10
|
Modification, Extension and Renewal of Options.
Within the limitations of the Plan, the Board may modify, extend or renew outstanding
Options or may accept the cancellation of outstanding Options (to the extent not previously exercised), whether or not granted hereunder, in return for the grant of new Options for the same or a different number of Shares and at the same or a
different Exercise Price. The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, impair his or her rights or increase the Optionee’s obligations under such Option.
|
SECTION 8.
PAYMENT FOR SHARES.
|
8.1
|
General.
The entire Purchase Price or Exercise Price of Shares issued under the Plan shall be payable in cash, cash equivalents or one
of the other forms provided in this Section 8.
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8.2
|
Surrender of Stock.
To the extent permitted by the Board in its sole discretion, payment may be made in whole or in part by
surrendering, or attesting to ownership of, Shares which have already been owned by the Optionee; provided, however, that payment may not be made in such form if such action would cause the Company to recognize any (or additional) compensation
expense with respect to the Option for financial reporting purposes. Such Shares shall be surrendered to the Company in good form for transfer and shall be valued at their Fair Market Value on the date of Option exercise.
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|
8.3
|
Services Rendered.
As determined by the Board in its discretion, Shares may be awarded under the Plan in consideration of past
services rendered to the Company, a Parent or Subsidiary.
|
|
8.4
|
Promissory Notes.
To the extent permitted by the Board in its sole discretion, payment may be made in whole or in part with a
full-recourse promissory note executed by the Optionee or Purchaser. The interest rate payable under the promissory note shall not be less than the minimum rate required to avoid the imputation of income for U.S. federal income tax purposes. Shares
shall be pledged as security for payment of the principal amount of the promissory note, and interest thereon; provided that if the Optionee or Purchaser is a Consultant, such note must be collateralized with such additional security to the extent
required by applicable laws. In no event shall the stock certificate(s) representing such Shares be released to the Optionee or Purchaser until such note is paid in full. Subject to the foregoing, the Board shall determine the term, interest rate
and other provisions of the note.
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|
8.5
|
Exercise/Sale.
To the extent permitted by the Board in its sole discretion, and if a public market for the Shares exists, payment may
be made in whole or in part by delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of all
or part of the Exercise Price and any withholding taxes.
|
-8-
|
8.6
|
Exercise/Pledge.
To the extent permitted by the Board in its sole discretion, and if a public market for the Shares exists, payment
may be made in whole or in part by delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker or lender approved by the Company to pledge Shares, as security for a loan, and to deliver all or part of the loan
proceeds to the Company in payment of all or part of the Exercise Price and any withholding taxes.
|
|
8.7
|
Other Forms of Payment.
To the extent permitted by the Board in its sole discretion, payment may be made in any other form that is
consistent with applicable laws, regulations and rules.
|
SECTION 9.
ADJUSTMENT OF SHARES.
|
9.1
|
General.
In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a declaration of an
extraordinary dividend payable in a form other than Shares in an amount that has a material effect on the Fair Market Value of the Stock, a combination or consolidation of the outstanding Stock into a lesser number of Shares, a recapitalization, a
spin-off, a reclassification, or a similar occurrence, the Board shall make appropriate adjustments to one or more of the following: (i) the number of Shares available for future awards under Section 5; (ii) the number of Shares
covered by each outstanding Option; (iii) the Exercise Price under each outstanding Option; or (iv) the price of Shares subject to the Company’s right of repurchase.
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|
9.2
|
Dissolution or Liquidation.
To the extent not previously exercised or settled, Options shall terminate immediately prior to the
dissolution or liquidation of the Company.
|
|
9.3
|
Mergers and Consolidations.
In the event that the Company is a party to a merger or other consolidation, or in the event of a
transaction providing for the sale of all or substantially all of the Company’s stock or assets, outstanding Options shall be subject to the agreement of merger, consolidation or sale. Such agreement may provide for one or more of the
following: (i) the continuation of the outstanding Options by the Company, if the Company is a surviving corporation; (ii) the assumption of the Plan and outstanding Options by the surviving corporation or its parent; (iii) the
substitution by the surviving corporation or its parent of options with substantially the same terms for such outstanding Options; (iv) immediate exercisability of such outstanding Options followed by the cancellation of such Options; or
(v) settlement of the full value of the outstanding Options (whether or not then exercisable) in cash or cash equivalents followed by the cancellation of such Options; in each case without the Optionee’s consent.
|
|
9.4
|
Reservation of Rights.
Except as provided in this Section 9, an Optionee or offeree shall have no rights by reason of any
subdivision or consolidation of shares of stock of any class, the payment of any dividend or any other increase or decrease in the number of shares of stock of any class. Any issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Shares subject to an Option. The grant of an Option pursuant to the Plan shall not
affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its
business or assets.
|
-9-
SECTION 10.
REPURCHASE RIGHTS.
|
10.1
|
Company’s Right To Repurchase Shares.
The Company shall have the right to repurchase Shares that have been acquired through an
award or sale of Shares or exercise of an Option upon termination of the Purchaser’s or Optionee’s Service if provided in the applicable Restricted Share Agreement or Stock Option Agreement. Subject to the following restrictions, the Board
in its sole discretion shall determine when the right to repurchase shall lapse as to all or any portion of the Shares, and may, in its discretion, provide for accelerated vesting in the event of a Change in Control or other events; provided,
however, that the right to repurchase shall lapse as to all of the Shares issued to an Outside Director for service as an Outside Director in the event of a Change in Control. The following restrictions shall apply in the case of a Purchaser or
Optionee who is not a Consultant or an officer or director of the Company, a Parent or Subsidiary:
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|
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(a)
|
Repurchase Price
. If the Company retains a right to repurchase the Shares at not less than the Fair Market Value of the Shares on the date that the
Purchaser’s Service terminates, then such repurchase right shall terminate when the Company’s Stock becomes publicly traded. If the Company retains a right to repurchase the Shares at the original Purchase Price or Exercise Price, then
such repurchase right shall lapse at the minimum rate of twenty percent (20%) per year over the five (5) year period starting on the date of the award or sale of Shares or grant of the Option.
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|
(b)
|
Exercise of Repurchase Right
. The Company’s right of repurchase under this Section 10.1 may be exercised only within ninety (90) days of the date
on which the Purchaser’s or Optionee’s Service terminates or, if the Optionee acquired the Shares upon exercise of an Option after the date of termination, within ninety (90) days from the date of exercise.
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|
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(c)
|
Payment of Repurchase Price
. The Company shall pay the repurchase price in cash, cash equivalents or for cancellation of indebtedness incurred in purchasing the
Shares.
|
SECTION 11.
WITHHOLDING TAXES.
|
11.1
|
General.
An Optionee or Purchaser or his or her successor shall pay, or make arrangements satisfactory to the Board for the
satisfaction of, any federal, state, local or foreign withholding tax obligations that may arise in connection with the Plan. The Company shall not be required to issue any Shares or make any cash payment under the Plan until such obligations are
satisfied.
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|
11.2
|
Share Withholding.
The Board may permit an Optionee or Purchaser to satisfy all or part of his or her withholding or
income tax obligations by having the Company withhold all or a portion of any Shares that otherwise would be issued to him or her or by surrendering all or a portion of any Shares that he or she previously acquired; provided, however, that in no
event may an Optionee or Purchaser surrender Shares in excess of the
|
-10-
|
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legally required withholding amount. Such Shares shall be valued at their Fair Market Value on the date when taxes otherwise would be withheld in cash. Any payment of taxes by assigning Shares to
the Company may be subject to restrictions, including any restrictions required by rules of any federal or state regulatory body or other authority.
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11.3
|
Cashless Exercise/Pledge.
The Board may provide that if Company Shares are publicly traded at the time of exercise, arrangements may
be made to meet the Optionee’s or Purchaser’s withholding obligation by cashless exercise or pledge.
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11.4
|
Other Forms of Payment.
The Board may permit such other means of tax withholding as it deems appropriate.
|
SECTION 12.
SECURITIES LAW REQUIREMENTS.
|
12.1
|
General.
Shares shall not be issued under the Plan unless the issuance and delivery of such Shares complies with (or is exempt from)
all applicable requirements of law, including (without limitation) the Securities Act, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange or other securities market on
which the Company’s securities may then be listed.
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12.2
|
Voting and Dividend Rights.
The holders of Shares acquired under the Plan shall have the same voting, dividend and other rights as the
Company’s other stockholders. A Restricted Share Agreement, however, may require that the holders of Shares invest any cash dividends received in additional Shares. Such additional Shares shall be subject to the same conditions and restrictions
as the award with respect to which the dividends were paid.
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|
12.3
|
Financial Reports.
At least annually, the Company shall furnish its financial statements, including a balance sheet regarding the
Company’s financial condition and results of operations, to Optionees, Purchasers and stockholders who have received Shares under the Plan, unless such persons are key employees whose duties at the Company assure them access to equivalent
information. Financial statements need not be audited.
|
SECTION 13.
NO RETENTION RIGHTS.
No provision of the Plan, or any right or Option granted under the Plan, shall be construed to give any Optionee or Purchaser
any right to become an Employee, to be treated as an Employee, or to continue in Service for any period of time, or restrict in any way the rights of the Company (or Parent or subsidiary to whom the Optionee or Purchaser provides Service), which
rights are expressly reserved, to terminate the Service of such person at any time and for any reason, with or without cause, without thereby incurring any liability to him or her.
SECTION 14.
DURATION AND AMENDMENTS.
|
14.1
|
Term of the Plan.
The Plan, as set forth herein, shall become effective on the date of its adoption by the Board,
subject to the approval of the Company’s stockholders. In the event that the stockholders fail to approve the Plan within twelve (12) months after its adoption by the Board, any grants, exercises or sales that have already occurred under
the
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-11-
|
|
Plan shall be rescinded, and no additional grants, exercises or sales shall be made under the Plan after such date. The Plan shall terminate automatically ten (10) years after its adoption
by the Board. The Plan may be terminated on any earlier date pursuant to Section 14.2 below.
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14.2
|
Right to Amend or Terminate the Plan.
The Board may amend, suspend, or terminate the Plan at any time and for any reason. An amendment
of the Plan shall not be subject to the approval of the Company’s stockholders unless it (i) increases the number of Shares available for issuance under the Plan (except as provided in Section 9) or (ii) materially changes the
class of persons who are eligible for the grant of Options or the award or sale of Shares. At least two-thirds (2/3) of the Company’s Shares entitled to vote must affirmatively approve an increase in the number of Shares available for
issuance if the total number of Shares that may be issued upon the exercise of all outstanding Options and the total number of Shares provided under any stock bonus or similar plan of the Company exceed thirty percent (30%) of all outstanding
Shares of the Company.
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|
14.3
|
Effect of Amendment or Termination.
No Shares shall be issued or sold under the Plan after the termination thereof, except upon
exercise of an Option granted prior to such termination. The termination of the Plan, or any amendment thereof, shall not adversely affect any Shares previously issued or any Option previously granted under the Plan without the holder’s
consent.
|
SECTION 15.
EXECUTION.
To record the adoption of the Plan by the Board on May 18, 2007, effective on such date, the Company has caused its authorized
officer to execute the same.
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TENSILICA, INC.
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By
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/s/ Christopher Rowen
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Its
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President and CEO
|
-12-