-----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, KCYyhk2POLtWhmSAhB8t2THtgTL+3i/9S+yiufbqI5XsmV9D8TsM99Yksi5xpgUW 001dJWUx6GiUnckCf2hH3w== 0000950103-01-000120.txt : 20010214 0000950103-01-000120.hdr.sgml : 20010214 ACCESSION NUMBER: 0000950103-01-000120 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20010213 EFFECTIVENESS DATE: 20010213 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VITESSE SEMICONDUCTOR CORP CENTRAL INDEX KEY: 0000880446 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 770138960 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-55466 FILM NUMBER: 1535503 BUSINESS ADDRESS: STREET 1: 741 CALLE PLANO CITY: CAMARILLO STATE: CA ZIP: 93012 BUSINESS PHONE: 8053883700 MAIL ADDRESS: STREET 1: 741 CALLE PLANO CITY: CAMARILLO STATE: CA ZIP: 93012 S-8 1 0001.txt As filed with the Securities and Exchange Commission on February 12, 2001 Registration No. 333-_______ ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 VITESSE SEMICONDUCTOR CORPORATION (Exact name of registrant as specified in its charter) Delaware 77-0138960 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 741 Calle Plano Camarillo, California 93012 (Address of Principal Executive Offices) (Zip code) FirstPass 2000 Stock Option Plan Vitesse Semiconductor Corporation 1991 Stock Option Plan Vitesse Semiconductor Corporation Option Agreements with Certain Employees Vitesse Semiconductor Corporation 2001 Stock Incentive Plan (Full title of the plan) ----------------------- Eugene F. Hovanec Chief Financial Officer Vitesse Semiconductor Corporation 741 Calle Plano Camarillo, California 93012 (Name and address of agent for service) (805) 388-3700 (Telephone number, including area code, of agent for service) ----------------------- Copy to: Francis S. Currie, Esq. Davis Polk & Wardwell 1600 El Camino Real Menlo Park, California 94025 (650) 752-2000 CALCULATION OF REGISTRATION FEE ===================================================================================================================== Proposed maximum Proposed maximum Amount of Title of securities Amount to be offering price aggregate registration to be registered registered per share offering price fee - --------------------------------------------------------------------------------------------------------------------- FirstPass 2000 Stock Option Plan $.01 par value(1)......................... 378,028 $ 42.37(2) $ 16,017,050 $ 4,005 Vitesse Semiconductor Corporation 1991 Stock Option Plan............................... 6,301,820 $ 62.75(3) $395,439,205 $ 98,860 Vitesse Semiconductor Corporation Option Agreements with Certain Employees, Common Stock, $.01 par value..................... 192,283 $ 49.353(2) $ 9,489,750 $ 2,375 Vitesse Semiconductor Corporation 2001 Stock Incentive Plan............................ 7,500,000 $ 62.75(3) $470,625,000 $117,650 - --------------------------------------------------------------------------------------------------------------------- Totals.................................... 14,372,121 N/A $891,571,005 $222,900 =====================================================================================================================
- ------------------- (1) All options outstanding under the FirstPass 2000 Stock Option Plan were assumed by the Registrant in connection with its acquisition of FirstPass, and such options are now exercisable for the Registrant's Common Stock. (2) Represents weighted average exercise price per share of the Registrant's common stock underlying outstanding options, pursuant to Rule 457(h) under the Securities Act of 1933 ("Rule 457(h)"). (3) Estimated in accordance with Rule 457(h) solely for the purpose of calculating the total registration fee. Computed based on the closing price for the Registrant's Common Stock on February 7, 2001. ================================================================================ PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference This Registration Statement incorporates herein by reference the following documents which have been filed with the Commission by the Registrant: 1. The Registrant's Annual Report on Form 10-K for the fiscal year ended September 30, 2000, filed pursuant to Section 13 of the Securities and Exchange Act of 1934 (the "Exchange Act"). 2. The description of the Registrant's Common Stock, par value $.01 per share, contained in its registration statement on Form 8-A filed with the Securities and Exchange Commission on November 8, 1991, including any amendment or report filed for the purpose of updating such description. All other documents filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this Registration Statement and prior to the filing of a post-effective amendment to this Registration Statement which indicates that all securities offered have been sold or which de-registers all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing of such documents (such documents, and the documents enumerated above, being hereinafter referred to collectively as the "Incorporated Documents"). Item 4. Description of Securities. Not applicable. Item 5. Interest of Named Experts and Counsel. Not applicable. Item 6. Indemnification of Directors and Officers. The Registrant has adopted provisions in its Amended and Restated Certificate of Incorporation which (i) eliminate the personal liability of its directors to the Registrant and its shareholders for monetary damages arising from a breach of their fiduciary duties in certain circumstances, and (ii) authorize the Registrant to indemnify its directors and officers to the fullest extent permitted by law. The limitation of liability does not affect the availability of equitable remedies, such as injunctive relief or rescission. In addition, the Registrant's bylaws provide that the Registrant shall indemnify its directors and officers to the fullest extent permitted by applicable law. The Registrant has entered into separate indemnification agreements with each of its officers and directors that contain provisions which are in some respects broader than the specific indemnification provisions contained in the Delaware General Corporation Law. The indemnification agreements may require the Registrant, among other things, to indemnify such officers and directors against certain liabilities that may arise by reason of their status or service as directors or officers (other than liabilities arising from willful misconduct of a culpable nature), to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified, and to obtain director's and officer's insurance, if available on reasonable terms. Item 7. Exemption for Registration Claimed. Not applicable. 2 Item 8. Exhibits. The following are filed as part of this Registration Statement: Exhibit No. Description - ------- ----------- 4.1 FirstPass, Inc. 2000 Stock Option Plan (filed herewith) 4.2 Vitesse Semiconductor 1991 Stock Option Plan (incorporated herein by reference to Exhibit 4.9 to the Company's Registration Statement on Form S-8 (File No. 333-53463) 4.3 Form of Vitesse Semiconductor Corporation Option Agreement (incorporated herein by reference to Exhibit 4.4 to the Company's Registration Statement on Form S-8 (File No. 333-40822) 4.4 Vitesse Semiconductor Corporation 2001 Stock Incentive Plan (filed herewith) 5.1 Opinion of Davis Polk & Wardwell as to the legality of securities being registered (filed herewith) 23.1 Consent of KPMG LLP (filed herewith) 23.2 Consent of Davis Polk & Wardwell (included in Exhibit 5.1) 24 Power of Attorney (Included on signature pages of this Registration Statement) Item 9. Undertakings. (a) The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933 (the "Securities Act"), each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report, pursuant to Section 13(a) or Section 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. (c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. 3 SIGNATURES Pursuant to the requirements of the Securities Act, 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 Camarillo, State of California, on the 12th day of February 2001. VITESSE SEMICONDUCTOR CORPORATION By: /s/ Eugene F. Hovanec -------------------------------- Eugene F. Hovanec Vice President, Finance and Chief Financial Officer POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Louis R. Tomasetta and Eugene F. Hovanec, jointly and severally, his attorneys-in-fact, each with the power of substitution, for him in any and all capacities, to sign any amendments to this Registration Statement on Form S-8, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act, as amended, this Registration Statement has been signed by the following persons in the capacities and on the date indicated. Signature Title Date --------- ----- ---- /s/ Louis R. Tomasetta President, Chief Executive Officer and Director February 12, 2001 - ------------------------ (Principal Executive Officer) Louis R. Tomasetta /s/ Eugene F. Hovanec Vice President of Finance and Chief Financial February 12, 2001 - ------------------------ Officer (Principal Financial and Accounting Eugene F. Hovanec Officer) /s/ James A. Cole Director February 12, 2001 - ------------------------ James A. Cole /s/ Pierre R. Lamond Chairman of the Board of Directors February 12, 2001 - ------------------------ Pierre R. Lamond /s/ John C. Lewis Director February 12, 2001 - ------------------------ John C. Lewis /s/ Alex Daly Director February 12, 2001 - ------------------------ Alex Daly /s/ Vincent Chan Director February 12, 2001 - ------------------------ Vincent Chan
S-1 EXHIBIT INDEX Exhibit No. Description - ------- ----------- 4.1 FirstPass, Inc. 2000 Stock Option Plan (filed herewith) 4.2 Vitesse Semiconductor 1991 Stock Option Plan (incorporated herein by reference to Exhibit 4.9 to the Company's Registration Statement on Form S-8 (File No. 333-53463) 4.3 Form of Vitesse Semiconductor Corporation Option Agreement (incorporated herein by reference to Exhibit 4.4 to the Company's Registration Statement on Form S-8 (File No. 333-40822), effective July 5, 2000) 4.4 Vitesse Semiconductor Corporation 2001 Stock Incentive Plan (filed herewith) 5.1 Opinion of Davis Polk & Wardwell as to the legality of securities being registered (filed herewith) 23.1 Consent of KPMG LLP (filed herewith) 23.2 Consent of Davis Polk & Wardwell (included in Exhibit 5.1) 24 Power of Attorney (Included on signature pages of this Registration Statement) EX-4.1 2 0002.txt EXHIBIT 4.1 FIRSTPASS, INC. 2000 STOCK OPTION PLAN ADOPTED October 3, 2000 1. Purposes of the Plan. The purposes of this Stock Option Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to the Employees and Consultants of FirstPass, Inc. (the "Company") and to promote the success of the Company's business. Options granted hereunder may be either "incentive stock options," as defined in Section 422 of the Internal Revenue Code of 1986, as amended, or "nonstatutory stock options," at the discretion of the Board and as reflected in the terms of the written Option Agreement. 2. Definitions. As used herein, the following definitions shall apply: (a) "Board" shall mean the Committee, if one has been appointed, or the Board of Directors of the Company, if no committee is appointed. (b) "Cause" means: (1) an optionee's willful dishonesty towards, fraud upon, crime against, deliberate or attempted injury or bad faith action with respect to the Company; or (2) Optionee's conviction for any felony crime (c) "Change in Control" means: (1) a dissolution, liquidation or sale of substantially all of the assets of the Company; (2) a merger or consolidation in which the Company is not the surviving corporation (other than a merger solely for the purpose of changing the state of incorporation); or (3) a reverse merger in which the Company is the surviving corporation but the shares of the Company's common stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise; (d) "Code" shall mean the Internal Revenue Code of 1986, as amended. (e) "Common Stock" shall mean the Common Stock of the Company. (f) "Company" shall mean First Pass, Inc. a Colorado corporation. (g) "Committee" shall mean the Committee appointed by the Board of Directors in accordance with paragraph (a) of Section 4 of the Plan, if one is appointed. (h) "Consultant" shall mean any person who is engaged by the Company or any subsidiary to render consulting services and is compensated for such consulting services, and any director of the Company whether compensated for such services or not. (i) "Continuous Status as an Employee or Consultant" shall mean the absence of any interruption or termination of service as an Employee or Consultant. Continuous Status as 1 an Employee or Consultant shall not be considered interrupted in the case of sick leave, military leave, or any other leave of absence approved by the Board; provided that such leave is for a period of not more than 90 days or reemployment upon the expiration of such leave is guaranteed by contract or statute. (j) "Employee" shall mean any person, including officers and directors, employed by the Company or any Parent or Subsidiary of the Company. The payment of a director's fee by the Company shall not be sufficient to constitute "employment" by the Company. (k) "Good Reason" means: (1) a material reduction in compensation; (2) a relocation of the Optionee's principal worksite to a location more than fifteen (15) miles from Optionee's pre-Change of Control worksite; or (3) for an executive officer, a material reduction in responsibilities or authority as in effect before the Change in Control. (l) "Incentive Stock Option" shall mean an Option intended to qualify as an Incentive Stock Option within the meaning of Section 422 of the Code. (m) "Option" shall mean a Stock Option granted pursuant to the Plan. (n) "Option Stock" shall mean the Common Stock subject to an Option. (o) "Optionee" shall mean an Employee or Consultant who receives an Option. (p) "Parent" shall mean a "parent corporation," whether now or hereafter existing, as defined in Section 425(e) of the Code. (q) "Plan" shall mean this 2000 Stock Option Plan. (r) "Share" shall mean a share of the Common Stock, as adjusted in accordance with Section 11 of the Plan. (s) "Subsidiary" shall mean a subsidiary corporation, whether now or hereafter existing, as defined in Section 425(f) of the Code. 3. Stock Subject to the Plan. Subject to the provisions of Section 11 of the Plan, the maximum aggregate number of shares which may be optioned and sold under the Plan is 26,666,667 shares of Common Stock, which may be authorized, but unissued, Common Stock. If an Option should expire or become unexercisable for any reason without having been exercised in full, the unpurchased Shares which were subject thereto shall, unless the Plan shall have been terminated, become available for future grant under the Plan. 4. Administration of the Plan. (a) Procedure. The Plan shall be administered by the Board of Directors; provided, however, that (i) the Board of Directors may appoint a Committee to administer the Plan; and (ii) shall appoint a Committee to administer the Plan, if necessary, to provide the officers and directors of the Company with the benefits of Rule 16b-3 promulgated by the SEC. If appointed, 2 the Committee shall continue to serve until otherwise directed by the Board of Directors. Subject to the foregoing, from time-to-time the Board of Directors may increase the size of the Committee and appoint additional members in substitution therefor, fill vacancies however caused, or remove all members of the Committee and thereafter directly administer the Plan. (b) Powers of the Board. Subject to the provisions of the Plan, the Board shall have the authority, in its discretion: (i) to grant Incentive Stock Options, in accordance with Section 422 of the Code, or "nonstatutory stock options;" (ii) to determine, upon review of relevant information and in accordance with Section 8(b) of the Plan, the fair market value of the Common Stock; (iii) to determine the exercise price per share of Options to be granted, which exercise price shall be determined in accordance with Section 8(a) of the Plan; (iv) to determine the Employees or Consultants to whom, and the time or times at which, Options shall be granted and the number of shares to be represented by each Option; (v) to interpret the Plan; (vi) to prescribe, amend and rescind rules and regulations relating to the Plan; (vii) to determine the terms and provisions of each Option granted (which need not be identical) and, with the consent of the holder thereof, modify or amend each Option; (viii) to accelerate or defer (with the consent of the Optionee as to any deferral) the exercise date of any Option consistent with the provisions of Section 6 of the Plan; (ix) to authorize any person to execute on behalf of the Company any instrument required to effectuate the grant of an Option previously granted by the Board; and (x) to make all other determinations deemed necessary or advisable for the administration of the Plan. (c) Effect of Board's Decision. All decisions, determinations and interpretations of the Board or its Committee shall be final and binding on all Optionees and any other holders of any Options granted under the Plan. 5. Eligibility. (a) Options may be granted only to Employees and Consultants. Incentive Stock Options may be granted only to Employees. An Employee or Consultant who has been granted an Option may, if he is otherwise eligible, be granted an additional Option or Options. (b) No Incentive Stock Option may be granted to an Employee which, when aggregated with all other incentive stock Options granted to such Employee by the Company or any Parent or Subsidiary, would result in Shares having an aggregate fair market value (determined for each Share as of the date of grant of the Option covering such Share) in excess of $100,000 becoming first available for purchase upon exercise of one or more Incentive Stock Options during any calendar year. (c) Section 5(b) of the Plan shall apply only to an Incentive Stock Option evidenced by a written Option agreement which shall expressly identify the Option as an Incentive Stock Option. Section 5(b) of the Plan shall not apply to any Option evidenced by an Option agreement which sets forth the intention of the Company and the Optionee that such Option shall be a nonstatutory Stock Option. (d) The Plan shall not confer upon any Optionee any right with respect to continuation of employment or consulting relationship with the Company, nor shall it interfere in any way with his right or the Company's right to terminate his employment or consulting 3 relationship at any time. 6. Term of Plan. The Plan shall become effective upon the earlier to occur of its adoption by the Board of Directors or its approval by the Shareholders of the Company as described in Section 17 of the Plan. It shall continue in effect for a term of ten (10) years unless sooner terminated under Section 13 of the Plan. 7. Term of Option. The term of each Incentive Stock Option shall be ten (10) years from the date of grant thereof or such shorter term as may be provided in the Stock Option agreement. The term of each Option that is not an Incentive Stock Option shall be (10) years and one (1) day from the date of grant thereof or such shorter term as may be provided in the Stock Option agreement. However, in the case of an Option granted to an Optionee who, at the time the Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, (a) if the Option is an Incentive Stock Option, the term of the Option shall be five (5) years from the date of grant thereof or such shorter time as may be provided in the Stock Option agreement, or (b) if the Option is not an Incentive Stock Option, the term of the Option shall be five (5) years and one (1) day from the date of grant thereof or such shorter term as may be provided in the Stock Option agreement. 8. Exercise Price and Consideration. (a) The per Share exercise price for the Shares to be issued pursuant to exercise of an Option shall be such price as is determined by the Board, but shall be subject to the following: (i) In the case of an Incentive Stock Option: (A) granted to an Employee who, at the time of the grant of such Incentive Stock Option, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price shall be no less than 110% of the fair market value per Share on the date of grant. (B) granted to an Employee, the per Share exercise price shall be no less than 100% of the fair market value per Share on the date of grant. (ii) In the case of a nonstatutory Stock Option, the per Share exercise price shall be no less than the price per Share set by the Board on the date of grant. (b) The fair market value shall be determined in the following manner. If the stock is unlisted, the fair market value shall be determined by the Board of Directors, in its discretion. If listed, the value shall be the average Closing Sales Price of the Company's Common Stock as reported on the NASDAQ National Market System for the five (5) business days preceding the date of grant. In the event the Common Stock is listed on a stock exchange, the fair market value per share shall be the average closing price on such exchange for the five (5) business days preceding the date of grant, as reported in the Wall Street Journal. (c) The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment shall be determined by the Board and may consist entirely 4 of cash, check, promissory note, other Shares of Common Stock having a fair market value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option shall be exercised, or any combination of such methods of payment, or such other consideration and method of payment for the issuance of Shares to the extent permitted under the Colorado Business Corporation Act. In making its determination as to the type of consideration to accept, the Board shall consider if acceptance of such consideration may be reasonably expected to benefit the Company. 9. Exercise of Option. (a) Procedure for Exercise; Rights as a Shareholder. Any Option granted hereunder shall be exercisable at such times and under such conditions as determined by the Board, including performance criteria with respect to the Company and/or the Optionee, and as shall be permissible under the terms of the Plan. An Option may not be exercised for a fraction of a Share. An Option shall be deemed to be exercised when written notice of such exercise has been given to the Company in accordance with the terms of the Option by the person entitled to exercise the Option and full payment for the Shares with respect to which the Option is exercised has been received by the Company. Full payment may, as authorized by the Board, consist of any consideration and method of payment allowable under Section 8(c) of the Plan. Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the Stock Certificate evidencing such shares, no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Stock Certificate is issued, except as provided in Section 11 of the Plan. Exercise of an Option in any manner shall result in a decrease in the number of Shares which thereafter may be available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised. (b) Termination of Status as an Employee or Consultant. (i) If an Employee or Consultant ceases to serve as an Employee or Consultant (as the case may be) due to termination without Cause, or voluntary resignation for Good Reason, the Option shall become immediately vested as to all Option Stock and he may, but only within ninety (90) days (or such other period of time not exceeding three (3) months as is determined by the Board at the time of grant of the Option) after the date he ceases to be an Employee or Consultant (as the case may be) of the Company, exercise his Option as to all Option Stock. If he does not exercise such Option, or exercises the Option only partially, within the time specified herein, the Option shall terminate to the extent not exercised. (ii) If an Employee or Consultant ceases to serve as an Employee or Consultant (as the case may be) because of termination for Cause or voluntary resignation for any reason other than Good Reason, then he may, but only within ninety (90) days (or such other period of time not exceeding three (3) months as is determined by the Board), exercise the Option only to the extent that such Option was vested on the date of his termination. (c) Disability of Optionee. In the event an Employee or Consultant is unable to continue his employment or consulting relationship (as the case may be) with the Company as a 5 result of his Total and Permanent Disability , he may, but only within twelve (12) months (or such other period of time not less than six (6) months nor more than twelve (12) months as is determined by the Board) from the date of termination, exercise his Option as to all Option Stock whether vested or unvested. If he does not exercise such Option, or exercises the Option only partially, within the time specified herein, the Option shall terminate to the extent not exercised. For purposes of the Plan, Total and Permanent Disability shall be defined as the complete inability of the Optionee to perform the Optionee's primary job responsibilities as a result of a physical or mental impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 36 months and provided further that such Optionee shall provide the written opinion of a medical doctor as to the above facts and circumstances. (d) Death of Optionee. In the event of the death of an Optionee during the term of the Optionee who is at the time of his death an Employee or Consultant of the Company and who shall have been in Continuous Status as an Employee or Consultant since the date of grant of the Option, the Option may be exercised, at any time within twelve (12) months following the date of death, by the Optionee's estate or by a person who acquired the right to exercise the Option by bequest or inheritance, as to all Option Stock whether vested or unvested at the date of the Optionee's death. 10. Nontransferability of Options. The Option may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee. 11. Adjustments Upon Certain Changes. (a) Stock Split or Reclassification. Subject to any required action by the Shareholders of the Company, the number of Shares of Common Stock covered by each outstanding Option, and the number of shares of Common Stock which have been authorized for issuance under the Plan but as to which no Options have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Option, as well as the price per Share of Common Stock covered by each such outstanding Option, shall be proportionately adjusted for any increase or decrease in the number of shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration." Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into Shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares of Common Stock subject to an Option. (b) Liquidation or Dissolution. In the event of the proposed dissolution or liquidation of the Company, the Option will terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Board. The Board may, in the exercise of its sole discretion in such instances, declare that any Option shall terminate as of the date fixed by the Board and give each Optionee the right to exercise his Option as to all or any part of the 6 Optioned Stock, including Shares as to which the Option would not otherwise be exercisable. (c) Change in Control. (i) Assumption of Remaining Amount. In the event of a Change of Control, to the extent permitted by applicable law and with respect to the portion of any Options which are unvested as of the date of the Change in Control (the "Remaining Amount"), any surviving corporation or an Affiliate of such surviving corporation shall assume or continue the Remaining Amount, or substitute similar Options for the Remaining Amount. (ii) Failure to Assume Remaining Amount. If the surviving corporation or an Affiliate of such surviving corporation refuses to assume or continue the Remaining Amount, or substitute similar Options for the Remaining Amount, then: (A) each Optionee shall become fully vested as to all Option Stock immediately before the Change in Control; and (B) any amount of any Option which is not vested, or which is vested but unexercised at the date of the Change of Control shall be terminated if not exercised prior to the consummation of the Change of Control. 12. Time of Granting Options. The date of grant of an Option shall, for all purposes, be the date on which the Board makes the determination granting such Option. Notice of the determination shall be given to each Employee or Consultant to whom an Option is so granted within a reasonable time after the date of such grant. 13. Amendment and Termination of the Plan. (a) Amendment and Termination. The Board may amend or terminate the Plan from time-to-time in such respects as the Board may deem advisable; provided that, the following revisions or amendments shall require approval of the Shareholders of the Company in the manner described in Section 17 of the Plan: (i) any increase in the number of Shares subject to the Plan, other than in connection with an adjustment under Section 11 of the Plan; (ii) any change in the designation of the class of Employees or Consultants eligible to be granted Options; (iii) any material increase in the benefits accruing to participate under the Plan. (b) Shareholder Approval. In the event any amendment requiring Shareholder approval under Section 13(a) of the Plan is made, such Shareholder approval shall be solicited as described in Section 17 of the Plan. (c) Effect of Amendment or Termination. Any such amendment or termination 7 of the Plan shall not affect Options already granted and such Options shall remain in full force and effect as if this Plan had not been amended or terminated, unless mutually agreed otherwise between the Optionee and the Board, which agreement must be in writing and signed by the Optionee and the Company. 14. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant to the exercise of an Option unless the exercise of such Option and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities Act of 1933, as amended, the Securities and Exchange Act of 1934, as amended, the rules and regulations promulgated thereunder, state securities laws, and the requirements of any stock exchange upon which the Shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance. As a condition to the exercise of an Option, the Company may require the person exercising such Option to render to the Company a written statement containing such representations and warranties as, in the opinion of counsel for the Company, may be required to ensure compliance with any of the aforementioned relevant provisions of law, including a representation that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares, if, in the opinion of counsel for the Company, such representation is required. 15. Reservation of Shares. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. 16. Option Agreement. Options shall be evidenced by written option agreements in such form as the Board shall approve. No option grant shall be effective against the Company until the Optionee has executed and delivered a written option agreement. 17. Shareholder Approval. Continuance of the Plan shall be subject to approval by the shareholders of the Company within twelve (12) months before or after the date the Plan is adopted. If such Shareholder approval is obtained at a duly held Shareholders' Meeting, it may be obtained by the affirmative vote of the holders of a majority of the Share of the Company present or represented and entitled to vote thereon. In the case of approval by written consent, it must be obtained by the written consent of all shareholders of the Company, or by written consent of a smaller percentage of shareholders but only if the Board determines, on the basis of advice of the Company's legal counsel, that the written consent of such a smaller percentage of shareholders will comply with all applicable laws and will not adversely affect the qualifications of the Plan under Section 422 of the Code. 18. Information to Optionees. The Company shall provide to each Optionee, during the period for which such Optionee has one or more Options outstanding, copies of all annual reports and other information which are provided to all shareholders of the Company. The Company shall not be required to provide such information if the issuance of Options under the Plan is limited to key employees whose duties in connection with the Company assure their access to equivalent information. EX-4.4 3 0003.txt EXHIBIT 4.4 VITESSE SEMICONDUCTOR CORPORATION 2001 STOCK INCENTIVE PLAN 1. Purposes of Plan. The purposes of this 2001 Stock Incentive Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees, Consultants and Directors of the Company and its Subsidiaries and to promote the success of the Company's business. Awards granted under the Plan may be incentive stock options (as defined under Section 422 of the Code) or non-statutory stock options, as determined by the Administrator at the time of grant of an option and subject to the applicable provisions of Section 422 of the Code and the regulations promulgated thereunder, and any other awards selected by the Administrator to be granted under the plan from time to time. 2. Definitions. As used herein, the following definitions shall apply: "Administrator" means the Board or any Committee selected to administer the Plan, in accordance with Section 4 of the Plan. "Award" means an Option or any other award selected by the Committee to be granted under this Plan. "Board" means the Board of Directors of the Company. "Code" means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto. "Committee" means a Committee, if any, appointed by the Board in accordance with paragraph (a) of Section 4 of the Plan. "Common Stock" means the Common Stock, no par value per share, of the Company. "Company" means Vitesse Semiconductor Corporation, a Delaware corporation. "Consultant" means any person, including an advisor, who is engaged by the Company or any Parent or Subsidiary to render services and is compensated for such services, provided the term Consultant shall not include Directors who are not compensated for their services or are paid only a Director's fee by the Company. "Continuous Status as an Employee or Consultant" means the absence of any interruption or termination of service as an Employee or Consultant. Continuous Status as an Employee or Consultant shall not be considered interrupted in the case of: (i) any leave of absence approved by the Administrator, including sick leave, military leave, or any other personal leave; provided, however, that for purposes of Incentive Stock Options any such leave may not exceed ninety (90) days, unless reemployment upon the expiration of such leave is guaranteed by contract (including certain Company policies) or statute; or (ii) transfers between locations of the Company or between the Company, its Parent, its Subsidiaries, or its successor. 1 "Director" shall mean a member of the Board. "Disability" means total and permanent disability, as defined in Section 22(e)(3) of the Code. "Employee" means any person, including Officers and Directors, employed by the Company, Parent or any Subsidiary. The payment of Directors' fees by the Company shall not be sufficient to constitute "employment" by the Company. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Fair Market Value" means, as of any date the value of Common Stock determined as follows: (a) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the National Market System of the National Association of Securities Dealers, Inc. Automated Quotation ("NASDAQ") System, the Fair Market Value of a Share of Common Stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange (or, if listed on more than one exchange, the exchange with the greatest volume of trading in Common Stock) or system on the last market trading day prior to the day of determination, as reported in the Wall Street Journal or such other source as the Administrator deems reliable; (b) If the Common Stock is quoted on the NASDAQ System (but not on the National market System thereof) or regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share of Common Stock shall be the mean between the bid and asked prices for the Common Stock on the last market trading day prior to the day of determination, as reported in the Wall Street Journal or such other source as the Administrator deems reliable; (c) In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Administrator. "Incentive Stock Option" means an Option that satisfies the provisions of Section 422 of the Code. "Issued Shares" means, for any fiscal year, the number of shares of the Company's Common Stock outstanding on the last day of the fiscal year, plus any shares reacquired by the Company during the preceding fiscal year. "Nonstatutory Stock Option" means an Option that is not an Incentive Stock Option. "Officer" means an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. "Option" means a stock option granted pursuant to the Plan. "Optioned Stock" means the Common Stock subject to an Option. 2 "Optionee" means an Employee, Director or Consultant who holds an Option. "Outside Director" means a Director who is not an Employee. "Parent" corporation shall have the meaning defined in Section 424(e) of the Code. "Participant" means a holder of an Award under this Plan. "Plan" means this 2001 Stock Option Plan. "Share" means a share of the Common Stock, as adjusted in accordance with Section 10 of the Plan. "Substitute Awards" shall mean awards granted in assumption of, or in substitution for, outstanding awards previously granted by a company acquired by the Company or with which the Company combines. "Subsidiary" corporation shall have the meaning defined in Section 424(f) of the Code. In addition, the terms "Rule 16b-3" and "Applicable Laws," the term "10% Stockholder," and the term "Tax Date" shall have the meanings set forth, respectively, in Sections 4, 7 and 8 below. 3. Stock Subject to the Plan. (a) Subject to the provisions of Section 10 of the Plan, the maximum aggregate number of Shares which may be subject to Awards under the Plan is Nine Million (9,000,000) shares, plus an annual increase to be added on the first day of the Company's fiscal year beginning in 2002 by the lesser of (i) a number of shares equal to 5.0% of the Issued Shares on the last day of the fiscal year immediately preceding the year in which such adjustment is made, and (ii) Fifteen Million (15,000,000) shares, plus shares issued or subject to issuance on exercise or settlement of Awards pursuant to the Incentive Plan that are forfeited to the Company under award terms or conditions. (b) The Shares may be authorized, but unissued, or reacquired Common Stock. (c) If an Award should expire or become unexercisable or otherwise forfeited for any reason without having been exercised in full or settled in stock, the unpurchased Shares which were subject thereto shall, unless the Plan shall have been terminated, become available for other Awards under the Plan. If the Company reacquires Shares which were issued pursuant to the exercise of an Option, such Shares shall not become available for future grant under the Plan; provided, however, that if Shares of restricted stock issued pursuant to Section 7(d) hereof are repurchased by the Company at their original purchase price, such Shares shall become available for future grant under the Plan. (e) Shares underlying Substitute Awards shall not reduce the number of Shares remaining available for issuance under the Plan. 3 4. Administration of the Plan. (a) Composition of Administrator. (i) Administration With Respect to Directors. With respect to grants of Awards to Outside Directors of the Company, the Plan shall be administered by the Board. (ii) Administration With Respect to Consultants and Other Employees. With respect to grants of Awards to Employees or Consultants of the Company, the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board intended to satisfy the requirements of Rule 16b-3 of the Exchange Act and Section 162(m) of the Code, which Committee shall be constituted in such a manner as to satisfy the Applicable Laws. (iii) Multiple Administrative Bodies. If permitted by Rule 16b-3 and by the Applicable Laws, the Plan may (but need not) be administered by different administrative bodies with respect to Directors, non-Director Officers, and Employees and Consultants who are neither Directors nor Officers. (iv) General. Once a Committee has been appointed pursuant to subsection (i) or (ii) of this Section 4(a), such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. From time to time the Board may increase the size of any Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution therefore, fill vacancies (however caused) or remove all members of the Committee and thereafter directly administer the Plan, all to the extent permitted by the Applicable Laws, and, in the case of a Committee appointed under subsection (i) hereof, to the extent permitted by Rule 16b-3 as it applies to a plan intended to qualify thereunder as a discretionary plan. (b) Powers of the Administrator with respect to Employees and Consultants. Subject to the provisions of the Plan, and, in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator shall have the authority, in its discretion: (i) to determine the Fair Market Value of the Common Stock, in accordance with Section 2(m) of the Plan; (ii) to select the Officers, Consultant and Employees to whom Awards may from time to time be granted hereunder; (iii) to determine whether and to what extent Options are granted hereunder; (iv) to determine the number of shares of Common Stock to be covered by each such Option granted hereunder; (v) to approve forms of agreement for use under the Plan; 4 (vi) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder (including, but not limited to, whether such Option is an Incentive Stock Option or a Nonstatutory Stock Option, the exercise price and any restriction or limitation, or any vesting acceleration or waiver of forfeiture restrictions regarding any Option or other award and/or the shares of Common Stock relating thereto, based in each case on such factors as the Administrator shall determine, in its sole discretion) and to provide for the grant of Awards other than Options on terms determined in their discretion; provided, however, that in the event of a merger or asset sale, the applicable provisions of Section 10 of the Plan shall govern vesting acceleration; (vii) to determine whether and under what circumstances an Option may be settled in cash under subsection 7(a)(vii) instead of Common Stock; (viii) to reduce the exercise price of any Option to the then current Fair Market Value if the Fair Market Value of the Common Stock covered by such Option shall have declined since the date the Option was granted; (ix) to interpret the Plan; (x) to prescribe, amend and rescind rules and regulations relating to the Plan; (xi) with the consent of the holder thereof, to modify or amend each Option; and (xii) to make all other determinations deemed necessary or advisable for the administration of the Plan. (c) Powers of the Board with respect to Directors. Subject to the provisions and restrictions of the Plan, the Board shall have the authority, in its discretion: (i) to determine, upon review of relevant information and in accordance with Section 2(m) of the Plan, the Fair Market Value of the Common Stock; (ii) to interpret the Plan; (iii) to prescribe, amend and rescind rules and regulations relating to the Plan; (iv) to authorize any person to execute on behalf of the Company any instrument required to effectuate the grant of an Award previously granted hereunder; and (v) to make all other determinations deemed necessary or advisable for the administration of the Board. (d) Effect of Administrator's Decision. All decisions, determinations and interpretations of the Administrator shall be final and binding on all Optionees. 5. Eligibility. (a) Eligibility for Employees and Consultants. Nonstatutory Stock Options and other Awards may be granted to Employees and Consultants. Incentive Stock Options may be granted only to Employees. An Optionee who has been granted an Option may, if he or she is otherwise eligible, be granted additional Options. 5 (b) Eligibility for Outside Directors. Awards may be granted to Outside Directors. All Options shall be automatically granted in accordance with the terms set forth in Section 7 hereof. An Outside Director who has been granted an Option may, if he or she is otherwise eligible, be granted an additional Option or Options in accordance with such provisions. (c) No Employment Agreement. Neither the Plan nor any Option agreement shall confer upon any Optionee any right with respect to continuation of employment by or service as a Director or Consultant to the Company, no shall it interfere in any way with the Optionee's right or the Company's right to terminate the Optionee's employment or other relationship at any time. (d) Limitation on Grants. No Employee shall be granted, in any fiscal year of the ompany, Options to purchase more than 2,500,000 Shares. 6. Term of Plan. Subject to Section 15 of the Plan, the Plan shall become effective upon the earlier to occur of its adoption by the Board or its approval by the stockholders of the Company as described in Section 15. It shall continue in effect for a term of ten (10) years unless sooner terminated under Section 12 of the Plan. 7. Options. (a) Grants with respect to Outside Directors. All grants of Options to Outside Directors hereunder shall be automatic and non-discretionary and shall be made strictly in accordance with the following provisions: (i) No person shall have any discretion to select which Outside Directors shall be granted Options or to determine the number of Shares to be covered by Options granted to Outside Directors. (ii) During the term of the Plan, each Outside Director shall automatically receive an Option to purchase 40,000 Shares (except in the case of the Chairman of the Board, who shall receive an Option to purchase 60,000 shares) (the "Annual Option") on each January 1 following the approval of this Plan. (iii) Unless otherwise provided for by the Board, each Outside Director who is nominated or elected to the Board during the term of the Plan shall receive an Option to purchase 40,000 Shares (except in the case of the Chairman of the Board, who shall receive an Option to purchase 60,000 Shares) on the date of such election or nomination (the "New Director Grant"). Notwithstanding the foregoing, the Board shall have the authority to grant a pro rata portion of the New Director Grant to reflect the portion of the year served or to determine that the New Director Grant is not necessary. (iv) The terms of each Option granted hereunder shall be as follows: (A) the term of the Option shall be ten (10) years; and 6 (B) the Option shall be exercisable only while the Outside Director remains a Directors of the Company, except as set forth in Section 7(c) hereof; and (C) the exercise price per Share shall be 100% of the Fair Market Value per Share on the date of grant of the Option; and (D) the Option shall be exercisable in installments cumulatively as to 2% of the Optioned Stock for each full month that expires following the date of grant that the Optionee remains a Director. (v) In the event that any Option granted under the Plan would cause the number of Shares subject to outstanding Options plus the number of Shares previously purchased upon exercise of Options to exceed the number of authorized Shares under Section 3 hereof, then each such automatic grant shall be for that number of Shares determined by dividing the total number of Shares remaining available for grant by the number of Outside Directors on the automatic grant date. No further grants shall be made until such time, if any, as additional Shares become available for grant under the Plan through action of the stockholders to increase the number of Shares which may be issued under the Plan or through cancellation or expiration of Options previously granted hereunder. (b) Grants with respect to Employees and Consultants. The Administrator, in its discretion, may grant Options to eligible participants and shall determine whether such Options shall be Incentive Stock Options or Nonstatutory Stock Options. Each Option shall be evidenced by a written Option agreement which shall expressly identify the Options as Incentive Stock Options or as Nonstatutory Stock Options, and be in such form and contain such provisions as the Administrator shall from time to time deem appropriate. Without limiting the foregoing, the Administrator may, at any time, or from time to time, authorize the Company, with the consent of the respective recipients, to issue Options in exchange for the surrender and cancellation of any or all outstanding Options. Option agreements shall contain the following terms and conditions: (i) Exercise Price; Number of Shares. The per Share exercise price for the Shares issuable upon exercise an Option shall be such price as is determined by the Administrator. The Option agreement shall specify the number of Shares to which it pertains. (ii) Waiting Period; Exercisability; Term. At the time an Option is granted, the Administrator will determine the terms and conditions to be satisfied before Shares may be purchased, including the dates on which Shares subject to the Option may first be purchased or the conditions which must be satisfied prior to the purchase. The Administrator may specify that an Option may not be exercised until the completion of the service period specified at the time of grant. (Any such period is referred to herein as the "waiting period.") At the time an Option is granted, the Administrator shall fix the period within which the Option may be exercised, which shall not be less than the waiting period, if any, nor more than ten (10) years from the date of grant. (iii) Form of Payment. The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by 7 the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of grant) and may consist entirely of (1) cash, (2) check, (3) promissory note, (4) other Shares which (x) in the case of Shares acquired upon exercise of an Option, have been owned by the Optionee for more than six months on the date of surrender and (y) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option shall be exercised, (5) delivery of a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company the amount of sale or loan proceeds required to pay the exercise price, (6) any combination of the foregoing methods of payment, or (7) such other consideration and method of payment for the issuance of Shares to the extent permitted under Applicable Laws. (iv) Special Incentive Stock Option Provisions. In addition to the foregoing, Options granted under the Plan which are intended to be Incentive Stock Options under Section 422 of the Code shall be subject to the following terms and conditions: (A) Exercise Price. The per share exercise price for the Shares issuable upon exercise of the Option shall be no less than 100% of the Fair Market Value of Common Stock, determined as of the date of the grant of the Option. (B) Dollar Limitation. To the extent that the aggregate Fair Market Value of (i) the Shares with respect to which Options designated as Incentive Stock Options plus (ii) the shares of stock of the Company, Parent and any Subsidiary with respect to which other incentive stock options are exercisable for the first time by an Optionee during any calendar year under all plans of the Company and any Parent and Subsidiary exceeds $100,000, such Options shall be treated as Nonstatutory Stock Options. For purposes of the preceding sentence, (i) Options shall be taken into account in the order in which they were granted, and (ii) the Fair Market Value of the Shares shall be determined as of the time the Option or other incentive stock option is granted. (C) General. Except as modified by the preceding provisions of this subsection 7(a)(iv) and except as otherwise limited by Section 422 of the Code, all of the provisions of the Plan shall be applicable to the Incentive Stock Options granted hereunder. (v) 10% Stockholder. If any Optionee to whom an Incentive Stock Option is to be granted pursuant to the provisions of the Plan is, on the date of grant, the owner of Common Stock (as determined under Section 424(d) of the Code) possessing more than 10% of the total combined voting power of all classes of stock of the Company or any Subsidiary (a "10% Stockholder"), then the following special provisions shall be applicable to the Option granted to such individual: (A) The per Share Option price of Shares subject to such Incentive Stock Option shall not be less than 110% of the Fair Market Value of Common Stock on the date of grant; and (B) The Option shall not have a term in excess of five (5) years from the date of grant. 8 (vi) Rule 16b-3. Grants of options to Directors, Officers and 10% Stockholders must comply with the applicable provisions of Rule 16b-3 and such Options shall contain such additional conditions or restrictions, if any, as may be required by Rule 16b-3 to be in the written Option Agreement in order to qualify for the maximum exemption from Section 16 of the Exchange Act with respect to Plan transactions. (vii) Other Provisions. Each Option granted under the Plan may contain such other terms, provisions, and conditions not inconsistent with the Plan as may be determined by the Administrator. (viii) Buyout Provisions. The Administrator may at any time offer to buy out, for a payment in cash or Shares, an Option previously granted, based on such terms and conditions as the Administrator shall establish and communicate to the Optionee at the time that such offer is made. Any such cash offer made to an Officer or Director shall comply with the provisions of Rule 16b-3 relating to cash settlement of stock appreciation rights. This provision is intended only to clarify the powers of the Administrator and shall not in any way be deemed to create any rights on the part of Optionees to buyout offers or payments. (c) Method of Exercise. (i) Exercisability. Any Option granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator and as shall be permissible under the terms of the Plan. (ii) No Fractional Shares. An Option may not be exercised for a fraction of a Share. (iii) Procedure for Exercise; Rights as a Stockholder. An Option shall be deemed to be exercised when the Company receives: (i) written notice of such exercise in accordance with the terms of the Option from the person entitled to exercise the Option and (ii) full payment for the Shares with respect to which the Option is exercised. Full payment may consist of any consideration and method of payment allowable under subsection 7(a)(iii) of the Plan, as authorized by the Administrator (and, in the case of an Incentive Stock Option, determined at the time of grant) and permitted by the Option Agreement. Shares issued upon exercise of an Option shall be issued in the name of the Optionee or, if requested by the Optionee, in the name of the Optionee and his or her spouse. Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the stock certificate evidencing such Shares, no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided in Section 10 of the Plan. (iv) Effect of Exercise. Exercise of an Option in any manner shall result in a decrease in the number of Shares which thereafter shall be available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised. 9 (d) Effect of Termination. (i) Termination of Status as a Director. If an Outside Director ceases to serve as a Director, he or she may, but only within three (3) months after the date he or she ceases to be a Director of the Company, exercise his or her Option to the extent that he or she was entitled to exercise it at the date of such termination. Notwithstanding the foregoing, in no event may the Option be exercised after its ten year term has expired. To the extent that he or she was not entitled to exercise an Option at the date of such termination, of if he or she does not exercise such Option (which he or she was entitled to exercise) within the time specified herein, the Option shall terminate. (ii) Termination of Employment or Consulting Relationship. In the event an Optionee's Continuous Status as an Employee or Consultant terminates (other than upon the Optionee's death or disability), the Optionee may exercise his or her Option, but only within such period of time not to exceed six months as is determined by the Administrator (with such determination being made at the time of grant and not exceeding ninety (90) days in the case of an Incentive Stock Option) from the date of such termination, and only to the extent that the Optionee was entitled to exercise it at the date of such termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). If, at the date of termination, the Optionee is not entitled to exercise his or her entire Option, the Shares covered by the unexercisable portion of the Option shall be returned to the Plan as of the termination date. If, after termination, the Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate, and all remaining Shares covered by such Option shall be returned to the Plan at the end of such period. (iii) Disability of Optionee. In the event an Optionee's Continuous Status as an Employee or Consultant terminates as a result of the Optionee's Disability, the Optionee may exercise his or her Option, but only within six months from the date of such termination, and only to the extent that the Optionee was entitled to exercise it at the date of such termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). If, at the date of termination due to Disability, the Optionee is not entitled to exercise his or her entire Option, the Shares covered by the unexercisable portion of the Option shall be returned to the Plan as of the date of Disability. If, after such termination, the Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate, and all remaining Shares covered by such Option shall be returned to the Plan at the end of such period. (iv) Death of Optionee. In the event of an Optionee's death, the Optionee's estate or a person who acquired the right to exercise the deceased Optionee's Option by bequest or inheritance may exercise the Option, but only within six months following the date of death, and only to the extent that the Optionee was entitled to exercise it at the date of death (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). If, at the time of death, the Optionee was not entitled to exercise his or her entire Option, the Shares covered by the unexercisable portion of the Option shall be returned to the Plan as of the date of death. If, after death, the Optionee's estate or a person who acquired the right to exercise the Option by bequest or inheritance does not exercise the Option within the 10 time specified herein, the Option shall terminate, and the Shares covered by such Option shall be returned to the Plan at the end of such period. (d) Early Exercise. Options may, but need not, include a provision whereby the Optionee may elect at any time before the Optionee's Continuous Service terminates to exercise the Option as to any part of all of the shares of Common Stock subject to the Option prior to the full vesting of the Option. Any unvested shares of Common Stock so purchased may be subject to a repurchase option in favor of the Company or to any other restriction the Board determines to be appropriate. 8. Stock Withholding to Satisfy Withholding Tax Obligations. (a) Ability to Use Stock for Withholding. At the discretion of the Administrator, Optionees may satisfy withholding obligations as provided in this Section 8. When an Optionee incurs tax liability in connection with the exercise of an Option, which tax liability is subject to tax withholding under applicable tax laws, and the Optionee is obligated to pay the Company an amount required to be withheld under applicable tax laws, the Optionee may satisfy the withholding tax obligation by electing to have the Company withhold from the Shares to be issued upon exercise of the Option that number of Shares having a Fair Market Value equal to the amount required to be withheld. The Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined ("Tax Date"). (b) Election to Have Stock Withheld. All elections by an Optionee to have Shares withheld for this purpose shall be made in writing in a form acceptable to the Administrator and shall be subject to the following restrictions: (i) the election must be made on or prior to the applicable Tax Date; (ii) once made, the election shall be irrevocable as to the particular Shares of the Option as to which the election is made (unless otherwise permitted by applicable tax regulations under the Code); (iii) all elections shall be subject to the consent or disapproval of the Administrator; and (iv) if the Optionee is a Director, Officer or 10% Stockholder, the election must comply with the applicable provisions of Rule 16b-3 and shall be subject to such additional conditions or restrictions as may be required thereunder to qualify for the maximum exemption from Section 16 of the Exchange Act with respect to Plan transactions. (c) Section 83(b) Election. In the event the election to have Shares withheld is made by an Optionee, no election is filed under Section 83(b) of the Code and the Tax Date is deferred under Section 83 of the Code, the Optionee shall receive the full number of Shares with respect to which the Option is exercised but such Optionee shall be unconditionally obligated to tender back to the Company the proper number of Shares on the Tax Date. 11 9. Limitations on Transfer. Options granted under this Plan, and any interest therein, shall not be transferable or assignable by the Optionee, and may not be subject to execution, attachment or similar process, otherwise than by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act, or the rules thereunder. The designation of a beneficiary by an Optionee does not constitute a transfer. An Option shall be exercisable during the lifetime of the Optionee only by the Optionee; provided, however, that Nonstatutory Stock Options held by an Optionee may be transferred to such family members, trusts and charitable institutions as the Administrator, in its sole discretion, shall approve, unless otherwise restricted from such transfer under the terms of the grant. 10. Adjustments Upon Changes in Capitalization or Merger. (a) Stock Splits and Similar Events. Subject to any required action by the stockholders of the Company, the number of Shares covered by each outstanding Award, and the number of Shares which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Option, as well as the price per Share covered by each outstanding Option, shall be proportionately adjusted for any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the aggregate number of issued Shares effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed for this purpose to have been "effected without receipt of consideration". Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. (b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, all outstanding Awards will terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Board. The Board may, in the exercise of its sole discretion in such instances, declare that any Award shall terminate as of a date fixed by the Board and give each Optionee the right to exercise his or her Award as to all or any part of the Optioned Stock, including Shares as to which the Option would not otherwise be exercisable. (c) Sale of Assets or Merger. In the event of a merger of the Company with or into another corporation, the Award shall be assumed or an equivalent option or award shall be substituted by the successor corporation or a Parent or Subsidiary of such successor corporation. In the event that such successor corporation does not agree to assume the Award or to substitute an equivalent option or award, the Board shall, in lieu of such assumption or substitution, provide for the Optionee to have the right to exercise the Award as to all of the Optioned Stock, including Shares as to which the Option or Stock Purchase Right would not otherwise be exercisable. If the Board makes an Award fully exercisable (or vested) in lieu of assumption or substitution in the event of a merger, the Board shall notify the Participant that the Option shall be fully exercisable for a period of fifteen (15) days from the date of such notice, and the Option will terminate upon the expiration of such period. For the purposes of this paragraph, the Option shall be considered assumed if, following the merger or sale of assets, the assumed option confers the right to purchase, for each Share of Optioned Stock subject to the Option 12 immediately prior to the merger or sale of assets, the consideration (whether stock, cash, or other securities or property) received in the merger or sale of assets by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger or sale of assets was not solely common stock of the successor corporation or its Parent, the Board may, with the consent of the successor corporation and the participant, provide for the consideration to be received upon the exercise of the Option, for each Share of Optioned Stock subject to the Option, to be solely common stock of the successor corporation or its Parent equal in Fair Market Value to the per share consideration received by holders of Common Stock in the merger or sale of assets. (d) No Other Adjustments. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares subject to an Award. 11. Time of Granting Options. The date of grant of an Award shall, for all purposes, be the date on which the Administrator makes the determination granting such Award, or such other later date as is determined by the Administrator. Notice of the determination shall be given to each Employee or Consultant to whom an Award is so granted within a reasonable time after the date of such grant. 12. Amendment and Termination of the Plan. (a) Amendment and Termination. The Board may at any time amend, alter, suspend, or terminate the Plan. The Company shall obtain stockholder approval of any Plan amendment in such a manner and to such a degree as is to the extent necessary and desirable to comply with Rule 16b-3 under the Exchange Act or Section 422 of the Code (or any other applicable law or regulation, including the requirements of any exchange or quotation system on which the Common Stock is) in such a manner and to such a degree as is listed or quoted in such a manner and to such a degree as is required by such law or regulation. (b) Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan shall impair the rights of any Participant with respect to Awards already granted unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing signed by the Participant and the Company. 13. Conditions Upon Issuance of Shares. (a) Compliance with Laws. Shares shall not be issued upon exercise of an Option or the vesting of an Award unless such exercise and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, state securities laws and the requirements of any stock exchange or quotation system upon which the Shares may then be listed or quoted, and shall be further subject to the approval of counsel for the Company with respect to such compliance. 13 (b) Investment Intent. As a condition to the exercise of an Option or the issuance of Shares upon exercise of an Option, the Company may require the person exercising such Option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required. (c) No Company Liability. Inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the non-issuance or sale of such Shares as to which such requisite authority shall not have been obtained. (d) Grants Exceeding Allotted Shares. If the Stock covered by an Award exceeds, as of the date of grant, the number of Shares which may be issued under the Plan without additional stockholder approval, such Option shall be void with respect to such excess stock, unless stockholder approval of an amendment sufficiently increasing the number of Shares subject to the Plan to permit full exercise or settlement of the Award is timely obtained in accordance with Section 15 of the Plan. 14. Reservation of Shares. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan and the Awards granted hereunder. 15. Stockholder Approval. (a) Requirement. Continuance of the Plan shall be subject to approval by the stockholders of the Company within twelve (12) months before or after the date the Plan is adopted as provided in Section 6 and at or prior to the first annual meeting of stockholders held subsequent to the first granting of an Option hereunder. Such stockholder approval shall be obtained in the manner and to the degree that is required under applicable federal and state laws. (b) Manner of Solicitation. Approval of the Plan by the stockholders of the Company shall be solicited substantially in accordance with Section 14(a) of the Exchange Act and the rules and regulation promulgated thereunder. EX-5.1 4 0004.txt EXHIBIT 5.1 [Davis Polk & Wardwell Letterhead] 650-752-2018 February 9, 2001 Re: Registration Statement on Form S-8 Vitesse Semiconductor Corporation 741 Calle Plano Camarillo, CA 93012 Ladies and Gentlemen: We are acting as counsel for Vitesse Semiconductor Corporation (the "Company") in connection with the filing of a Registration Statement (the "Registration Statement") on Form S-8 under the Securities Act of 1933, as amended, relating to (i) 378,028 shares of the company's common stock, par value $0.01 per share (the "Common Stock"), for options outstanding under the FirstPass 2000 Stock Option Plan, (ii) 6,301,820 shares of the Company's Common Stock, par value $0.01 deliverable in accordance with the 1991 Stock Option Plan, (iii) 192,283 shares of the Company's common stock, par value $0.01 deliverable in accordance with the Vitesse Semiconductor Option Agreements with Certain Employees, and (iv) 7,500,000 shares of the Company's common stock deliverable in accordance with the Vitesse Semiconductor 2001 Stock Incentive Plan, as referred to in such Form S-8 and together (the "plans"). We have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments relating to the adoption of the Plans as we have deemed necessary or advisable fo the purposes of this opinion. Upon the basis of the foregoing, we are of the opinion that the Common Stock deliverable pursuant to the Plans, when delivered in accordance with the Plans upon receipt by the Company of adequate consideration therefor, will be duly authorized, validly issued, fully paid and nonassessable. We consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement. Very truly yours, /s/ Davis Polk & Wardwell EX-23.1 5 0005.txt EXHIBIT 23.1 Consent of Independent Accountants The Board of Directors Vitesse Semiconductor Corporation: We consent to incorporation by reference in the registration statement (No. 333-____________________) on Form S-8 of Vitesse Semiconductor Corporation of our report dated October 16, 2000, relating to the consolidated balance sheets of Vitesse Semiconductor Corporation and subsidiaries as of September 30, 2000, and 1999, and the related consolidated statements of operations, shareholders' equity, and cash flows for each of the years in the three-year period ended September 30, 2000, and related schedule, which report appears in the September 30, 2000, annual report on Form 10-K of Vitesse Semiconductor Corporation. /s/KPMG LLP Los Angeles, California February 7, 2001 -----END PRIVACY-ENHANCED MESSAGE-----