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EXHIBIT 10.5
ADVANCED MICRO DEVICES, INC.
1986 STOCK APPRECIATION RIGHTS PLAN
1. Purpose. The purpose of this Plan is to advance the interests of
Advanced Micro Devices, Inc. ("the Corporation") and its stockholders by
providing means by which the Corporation and its subsidiaries may remain
competitive in the search for and in the motivation and retention of
outstanding management personnel. The Corporation seeks to attract and retain
in its employ and in the employ of its subsidiaries management personnel of
training, experience and ability, and to furnish additional incentive to
executives upon whose judgment, initiative and efforts the successful conduct
of the business of the Corporation and its subsidiaries largely depends. It is
believed that the granting of stock appreciation rights as provided herein will
assist the Company in attracting and retaining employees of unusual competence
and, by increasing their equity interests in the Corporation, will provide
incentive and inducement to them to use their best efforts in the Corporation's
behalf.
2. Definitions. The terms defined in this Section 2 shall have the
respective meanings set forth herein, unless the context otherwise requires.
(a) Award Price: The term "Award Price" shall mean a price
designated by the Board or its delegate and which is not less than fifty
percent (50%) of the Fair Market Value per Share on the date the Stock
Appreciation Right is granted. In the case of a General Right which is
exercisable only in lieu of exercising a Related Option, unless otherwise
specified in the Right Agreement the Award Price shall be the purchase price of
such Related Option.
(b) Board or its delegate: The term "Board or its delegate"
shall mean the Corporation's Board of Directors or its delegate as set forth in
Section 3(c) hereinbelow.
(c) Disinterested Director: The term "Disinterested
Director" shall mean a member of the Board of Directors of the Company who has
not, during the one year prior to service as an administrator of the Plan, or
during such service, been granted or awarded equity securities of the Company
pursuant to this Plan or any other plan of the Company or any of its
affiliates, except for options granted automatically pursuant to the formula
set forth in the Advanced Micro Devices, Inc. 1992 Stock Incentive Plan.
(d) Fair Market Value per Share: The term "Fair Market Value
per Share" shall mean as of any day (i) the closing price for Shares on the New
York Stock Exchange as reported on the Composite Tape on the day as of which
such determination is being made or, if there was no sale of Shares reported on
the Composite Tape on such day, on the most recently preceding day on which
there was such a sale, or (ii) if the Shares are not listed or admitted to
trading on the New York Stock Exchange on the day as of which the determination
is made, the amount determined by the Board or its
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delegate to be the fair market value of a Share on such day.
(e) 1986 Plan: The term "1986 Plan" shall mean the
Corporation's 1986 Stock Option Plan as amended.
(f) Optionee: The term "Optionee" shall mean any person
eligible to receive a Stock Option or a Stock Appreciation Right.
(g) Plan: The term "Plan" or this "Plan" shall mean this
1986 Stock Appreciation Rights Plan, as originally adopted, and, if amended or
modified as herein provided, as so amended or modified.
(h) Shares: The term "Shares" shall mean shares of Common
Stock of the Corporation and any shares of stock or other securities received
as a result of the adjustments provided for in Section 9 of this Plan.
(i) Stock Appreciation Right: The term "Stock Appreciation
Right" shall mean the right to receive, without payment to the Corporation,
cash and/or Shares equivalent in value to the Spread as defined in Sections 6
and 7 of this Plan.
(j) Stock Option: The term "Stock Option" shall mean (except
as herein otherwise provided) a stock option granted under the 1986 Plan.
(k) Stock Option Plans: The term "Stock Option Plan" shall
mean the 1986 Plan.
(l) Related Option: The term "Related Option" shall mean an
option, if any, with respect to which a Right has been granted.
(m) Rights: The term "General Right" shall mean a Stock
Appreciation Right granted by the Board or its delegate pursuant to the
provisions of Section 6 of this Plan. The term "Limited Right" shall mean a
Stock Appreciation Right granted by the Board or its delegate pursuant to the
provisions of Section 7 of this Plan. The term "Right" shall mean any General
Right or Limited Right.
3. Administration
(a) The Board of Directors (the "Board"), whose authority
shall be plenary, shall administer the Plan and may delegate part or all of the
powers designated in Section 3(b) with respect to part or all of the Plan
pursuant to Section 3(c); provided, however, that the Board of Directors shall
delegate administration of the Plan to the extent required by Section 3(d).
(b) The Board shall have the power, subject to and within the
limits of the express provisions of the Plan:
(1) To grant Rights pursuant to the Plan.
(2) To determine from time to time which of the
eligible persons shall be granted Rights under the Plan, the number of Shares
for which each Right shall be granted, the term of each
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granted Right and the time or times during the term of each Right within which
all or portions of each Right may be exercised, (which at the discretion of the
Board may be accelerated).
(3) To grant Rights in exchange for cancellation
of Rights granted earlier at different exercise prices.
(4) To prescribe the terms and provisions of each
Right granted (which need not be identical) and the form of written instrument
that shall constitute the Right agreement.
(5) To take appropriate action to amend any Right
hereunder; provided, however, that no such action may be taken by the Board
without the written consent of the affected holder of the Right.
(6) To construe and interpret the Plan and Rights
granted under the Plan, and to establish, amend and revoke rules and
regulations for administration of the Plan. The Board, in the exercise of this
power, shall generally determine all questions of policy and expediency that
may arise and may correct any defect, omission or inconsistency in the Plan or
in any Right agreement in a manner and to the extent it shall deem necessary or
expedient to make the Plan fully effective.
(7) Generally, to exercise such powers and to
perform such acts as are deemed necessary or expedient to promote the best
interests of the Company.
(c) Subject to the limits set forth below, the Board may, by
resolution, delegate its administrative powers set forth in Section 3(b) above
under either or both of the following:
(1) with respect to the participation of or
granting of Rights to an employee who is not subject to Section 16 of the
Exchange Act, to a committee of one or more members of the Board, whether or
not such members of the Board are Disinterested Directors;
(2) with respect to ministerial matters, i.e.,
matters other than the selection for participation in the Plan and substantive
decisions concerning the timing, pricing, amount or other material term of a
Right, to a committee of one or more members of the Board, whether or not such
members of the Board are Disinterested Directors, or to one or more officers of
the Company.
(d) Unless each member of the Board is a Disinterested
Director, the Board shall, by resolution, delegate administration of the Plan
with respect to the participation in the Plan of employees who are subject to
Section 16 of the Exchange Act, including its powers to select such employees
for participation in the Plan, to make substantive decisions concerning the
timing, pricing, amount or any other material term of a Right granted to such
an employee, to a committee of two or more Disinterested Directors. Any
committee to which administration of the Plan is so delegated may also
administer the Plan with respect to an employee
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described in Section 3(c)(1) above.
(e) Except as required by Section 3(d) above, the Board shall
have complete discretion to determine the composition, structure, form, term
and operations of any committee established to administer the Plan. If
administration is delegated to a committee, unless the Board otherwise
provides, the committee shall have, with respect to the administration of the
Plan, all of the powers and discretion theretofore possessed by the Board and
delegable to such committee, subject to any constraints which may be adopted by
the Board from time to time and which are not inconsistent with the provisions
of the Plan. The Board at any time may revest in the Board any of its
administrative powers under the Plan, except under circumstances where a
committee is required to administer the Plan under Section 3(d) above.
(f) The determinations of the Board or its delegate shall be
conclusive and binding on all persons having any interest in this Plan or in
any awards granted hereunder.
4. Shares Subject to Plan and to Options.
(a) The total sum of the Shares with respect to which Rights
may be exercised under the Plan plus the Shares which may be sold pursuant to
options granted under the 1986 Stock Option Plan shall not exceed in the
aggregate one million (1,000,000) shares of the Corporation's authorized Common
Stock. This number of authorized Rights and options shall take into account
adjustments pursuant to Section 9, and shall include stock dividends with
respect to shares previously issued pursuant to this Plan. If any Rights
granted under the Plan shall for any reason terminate or expire without having
been exercised in full, the stock not purchased under such options shall be
available again for the purposes of the Plan.
(b) On the exercise of any General Right a Related Option
shall be considered to have been exercised to the extent such General Right is
exercised for the purpose of determining the number of shares and Rights
available for the grant of further stock options or Rights pursuant to the
Plan. On the exercise of a General Right, a Related Option, if any, shall
cease to be exercisable to the extent of the Shares with respect to which such
General Right is exercised, but such Related Option shall be considered to have
been exercised to such extent for purposes of determining the number of Shares
available for the grant of further Stock Options pursuant to the Stock Option
Plan.
5. Eligibility. Rights may be granted only to full or part time
employees of the Corporation and/or of any parent or subsidiary. Members of
the Board of Directors of the Corporation who are not also employees of the
Corporation shall not be eligible for the benefits of the Plan. Any employee
may hold more than one Right at any time.
6. Stock Appreciation Rights - General Rights.
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(a) The Board or its delegate shall have authority in its
discretion to grant a General Right to any eligible employee. A General Right
may be granted to an Optionee irrespective of whether such Optionee holds, is
being granted, or has been granted an option under any Stock Option Plan of the
Corporation. A General Right may be granted to an Optionee irrespective of
whether such Optionee holds, is being granted, or has been granted a Limited or
General Right. A General Right may be made exercisable without regard to the
exercisability of any option. On the exercise or termination of a Related
Option, the General Right with respect to such Related Option shall terminate
to the extent of the number of Shares with respect to which the Related Option
is exercised or terminated.
(b) With respect to the exercise of any General Right for
Shares, the term "Spread" as used in this Section 6 shall mean an amount equal
to the product computed by multiplying (i) the excess of (A) the Fair Market
Value per Share on the date such General Right is exercised over (B) the Award
Price by (ii) the number of Shares with respect to which such General Right is
being exercised. With respect to the exercise of any General Right for cash,
the term "Spread" as used in this Section 6 shall mean an amount equal to the
product computed by multiplying (i) the excess of (A) the highest Fair Market
Value per Share during the period described in paragraph (e) of this Section 6
over (B) the Award Price by (ii) the number of Shares with respect to which
such General Right is being exercised.
(c) On the exercise of a General Right as provided in
Paragraph (j) of this Section 6, the holder thereof, except as provided in
Paragraph (d) of this Section 6, shall be entitled at his election to receive
either:
(i) a number of Shares equal to the quotient computed by
dividing the Spread by the Fair Market Value per Share on the date of
exercise of the General Right, provided, however, that in lieu of
fractional Shares the Corporation shall pay cash equal to the same
fraction of the Fair Market Value per Share on the date of exercise
of the General Right; or
(ii) an amount in cash equal to the Spread; or
(iii) a combination of cash in the amount specified in
such holder's notice of exercise, and a number of Shares calculated
as provided in Clause (i) of this Paragraph (c), after reducing the
Spread by such cash amount, plus cash in lieu of any fractional Share
as provided above.
(d) Notwithstanding the provisions of Paragraph (c) of this
Section 6, the Board or its delegate shall have sole discretion to consent to
or disapprove, in whole or in part, the election pursuant to either Clause (ii)
or (iii) of Paragraph (c) of this Section 6 of a holder of a General Right to
receive cash upon the exercise of a General Right ("Cash election"). Such
consent or disapproval may be given at any time after the Cash Election to
which it relates. If the Board or its delegate shall disapprove a
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Cash Election, in lieu of paying the cash (or any portion thereof) specified
in such Cash Election, the Board or its delegate shall determine the cash, if
any, to be paid pursuant to such Cash Election and shall issue a number of
Shares calculated as provided in Clause (i) of Paragraph (c) of this Section
6, after reducing the Spread by such cash to be paid plus cash in lieu of any
fractional Share.
(e) Notwithstanding the provisions of Paragraph (c) of this
Section 6, a Cash Election may be made only during the period beginning on the
third business day following the date of release for publication of the
quarterly and annual summary statements of sales and earnings of the
Corporation and ending on the 12th business day following such date.
(f) The Corporation intends that this Section 6 shall comply
with the requirements of Rule 16b-3 (the "Rule") under the Securities Exchange
Act of 1934 during the term of this Plan. Should any provision of this Section
6 be unnecessary to comply with the requirements of the Rule, the Board of
Directors of the Corporation may amend this Plan to add to or modify the
provisions of this Plan accordingly.
(g) No General Right shall be transferable except by will or
by the laws of descent and distribution. During the life of a holder of a
General Right, the General Right shall be exercisable only by him or his
guardian or legal representative.
(h) A person exercising a General Right shall not be treated
as having become the registered owner of any Shares issued on such exercise
until such Shares are issued.
(i) Each General Right shall be on such terms and conditions
not inconsistent with this Plan as the Board or its delegate may determine and
shall be evidenced by Right Agreement setting forth such terms and conditions
executed by the Corporation and the holder of the General Right.
(j) To exercise a General Right, the holder shall (i) give
notice thereof to the Corporation in form satisfactory to the Board or its
delegate addressed to the Secretary of the Corporation specifying (A) the
number of Shares with respect to which he is exercising the General Right and
(B) the amount he elects to receive in cash, if any, and the amount he elects
to receive in Shares with respect to the exercise of the General Right; (ii)
deliver to the Corporation such written representations, warranties and
covenants as the Corporation may require under Section 10 of this Plan; and
(iii) if requested by the Corporation, deliver the Right Agreement relating to
the General Right being exercised and the Option Agreement for the Related
Option to the Secretary of the Corporation who shall endorse thereon a notation
of such exercise and return the Right Agreement and the Option Agreement to the
Optionee. The date of exercise of a General Right which is validly exercised
shall be the date on which the Corporation shall have received the notice
referred to in the first sentence of this Paragraph (j).
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7. Stock Appreciation Rights - Limited Rights.
(a) The Board or its delegate shall have authority in its
discretion to grant a Limited Right to the Holder of any Stock Option (the
"Related Option") granted under the Stock Option Plans with respect to all or
some of the Shares covered by such Related Option. A Limited Right may be
granted either at the time of grant of the Related Option or at any time
thereafter during its term. A Limited Right may be granted to an Optionee
irrespective of whether such Optionee is being granted or has been granted a
General Right. A Limited Right may be exercised only during the period
beginning on the first day following the date of expiration of any Offer (as
that term is defined in Paragraph (b) of this Section 7) for Shares and ending
on the thirtieth day following such date. Each Limited Right shall be
exercisable for not more than the number of Shares that the Related Option is
exercisable. Notwithstanding the provisions of the two immediately preceding
sentences, no Limited Right may be exercised until the expiration of six months
from the date of grant of such Limited Right. On the exercise of a Limited
Right, the Related Option shall cease to be exercisable to the extent of the
number of Shares with respect to which such Limited Right is exercised, but
such Related Option shall be considered to have been exercised to such extent
for purposes of determining the number of shares available for the grant of
further Stock Options pursuant to the Stock Option Plans. Upon the exercise or
termination of a Related Option, the Limited Right with respect to such Related
Option shall terminate to the extent of the number of Shares with respect to
which the Related Option is exercised or terminated.
(b) The term "Offer" as used in this Section 7 shall mean any
tender offer or exchange offer for Shares, other than one made by the
Corporation, provided that the corporation, person or other entity making the
offer acquires Shares pursuant to such offer and following expiration or
termination of the Offer the offeror owns 25% or more of the outstanding
Shares.
(c) The term "Offer Price per Share" as used in this Section
7 with respect to the exercise of any Limited Right shall mean the highest
price per Share paid in any Offer which Offer is in effect at any time during
the period beginning on the sixtieth day prior to the date on which such
Limited Right is exercised and ending on the date on which such Limited Right
is exercised. Any securities or property which are part or all of the
consideration paid for Shares in the Offer shall be valued in determining the
Offer Price per Share at the higher of (A) the valuation placed on such
securities or property by the corporation, person or other entity making such
Offer or (B) the valuation placed on such securities or property by the Board
or its delegate.
(d) The term "Spread" as used in this Section 7 with respect
to the exercise of any Limited Right shall mean an amount equal to the product
computed by multiplying (i) the excess of (A) the Offer Price per Share over
(B) the Award Price per Share at which the Related Option is exercisable, by
(ii) the number of Shares with respect to which such Limited Right is being
exercised.
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(e) Upon the exercise of a Limited Right as provided in
Paragraph (j) of this Section 7, the holder thereof shall receive an amount in
cash equal to the Spread.
(f) Notwithstanding any other provision of this Plan, no
General Right may be exercised at a time when any Limited Right held by the
holder of such General Right may be exercised.
(g) The Corporation intends that this Section 7 shall comply
with the requirements of Rule 16b-3 (the "Rule") under the Securities Exchange
Act of 1934 during the term of this Plan. Should any provision of this Section
7 be unnecessary to comply with the requirements of the Rule or should any
additional provisions be necessary for this Section 7 to comply with the
requirements of the Rule, the Board of Directors of the Corporation may amend
this Plan to add or to modify the provisions of this Plan accordingly.
(h) No Limited Right shall be transferable except by will or
by the laws of descent and distribution. During the life of a holder of a
Limited Right, the Limited Right shall be exercisable only by him or his
guardian or legal representative.
(i) Each Limited Right shall be on such terms and conditions
not inconsistent with the Plan as the Board or its delegate may determine and
shall be evidenced by a Right Agreement setting forth such terms and conditions
executed by the Corporation and the holder of the Limited Right.
(j) To exercise a Limited Right, the holder shall (i) give
notice thereof to the Corporation in form satisfactory to the Board or its
delegate specifying the number of Shares with respect to which he is
exercising the Limited Right, and (ii) if requested by the Corporation, deliver
the Right Agreement relating to the Limited Right being exercised and the
Option Agreement for a Related Option to the Secretary of the Corporation who
shall endorse thereon a notation of such exercise and return the Right
Agreement and the Option Agreement to the employee. The date of exercise of a
Limited Right which is validly exercised shall be deemed to be the date on
which the Corporation shall have received the notice referred to in the first
sentence of this Paragraph (j).
8. Effectiveness and Term of the Plan.
(a) No Right granted under this Plan shall be exercisable
until the Plan is approved by the holders of outstanding shares of Common Stock
of the Corporation constituting a majority of such shares present in person or
represented by proxy and entitled to vote at a meeting of shareholders of the
Corporation duly called and held.
(b) Unless previously terminated in accordance with Section
11 of this Plan, this Plan shall terminate on the close of business on June 10,
1996, after which no Rights shall be granted under this Plan. Such termination
shall not affect any Stock Options or Rights granted prior to such termination.
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9. Certain Adjustments.
(a) In the event that the Corporation shall pay a stock
dividend in, or split-up, combine, reclassify or substitute other securities
for, its outstanding Shares, the Board or its delegate shall forthwith take
such action, if any, as is consistent with the provisions of this Plan and as
in its judgment shall be necessary to preserve to the holders of Rights such
rights as are substantially proportionate to the rights held by them
immediately prior to such an event. Any adjustment may provide for the
elimination of any fractional Shares which might otherwise become subject to a
Right.
(b) In case the Corporation is merged or consolidated with
another corporation and the Corporation is not the surviving corporation, or
all or substantially all of the assets of the Corporation are transferred to
another corporation, such action shall be taken, if any, which in the judgment
of the Board of Directors is necessary to substitute for Shares covered by any
outstanding Right the type of securities or property of the corporation
surviving such merger or consolidation or acquiring such assets which are
issuable by reason of such merger, consolidation or transfer to the holders of
the shares of Common Stock of the Corporation.
(c) Notwithstanding and in addition to the provisions of this
Plan, the Board or its delegate shall have the authority to provide in any
Right Agreement, either at the time of grant or by amendment, that, upon the
date of a determination by the Board of Directors that within six months next
succeeding the date of such determination there is a reasonable possibility a
public market for the Shares may cease to exist, or such Shares may fail to
remain qualified for listing on the New York Stock Exchange, any General or
Limited Right related thereto shall become fully exercisable as to all Shares
subject thereto; provided, however, that except in the case of the death or
physical or mental incapacity of the Right holder, no Right shall be
exercisable prior to the expiration of six months following (i) the date of the
grant of the Related Option, or (ii) the date on which the Right was granted,
whichever is later.
(d) In addition to the authority conferred to the Board or
its delegate in (c) hereinabove, the Board or its delegate shall also have the
authority to modify or otherwise amend any Right Agreement as it deems
necessary or appropriate, provided that the holder of the Right subject to any
such Right Agreement to be modified or amended shall have consented thereto.
10. Compliance with Law.
(a) Each employee, to permit the Corporation to comply with
the Securities Act of 1933, as amended (the "Act"), and any applicable blue sky
or state securities laws, may be required by the Corporation to represent in
writing to the Corporation at the time of grant of a Right and at the time of
the issuance of any Shares thereunder that he does not contemplate and shall
not make
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any transfer of any Shares to be acquired under Rights except in compliance
with the Act, and he shall enter into such agreements and make such other
representations as, in the opinion of counsel to the Corporation, shall be
sufficient to enable the Corporation legally to issue the Shares. Certificates
representing Shares to be acquired under Rights shall bear such legends as
counsel for the Corporation may indicate are necessary or appropriate to
accomplish the purposes of Paragraphs (a) and (b) of this Section 10.
(b) If at any time the Board of Directors shall determine
that the listing, registration or qualification of the Shares subject to any
Right upon any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory authority, is necessary or
desirable as a condition of, or in connection with, the granting of, or
issuance of Shares under, such Right, such Shares shall not be issued unless
such listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Board of
Directors.
(c) Where in the opinion of counsel to the Company, the
Company has or will have an obligation to withhold taxes relating to the
exercise of a Right, a Participant may elect (a "Withholding Election") to pay
his required minimum withholding tax obligation by the withholding of Shares
from the total number of Shares deliverable pursuant to the exercise of a Right
in whole or in part for Shares, or by delivering to the Company a sufficient
number of previously acquired Shares, and may elect to have additional taxes
paid by the delivery of previously acquired shares, in each case in accordance
with rules and procedures established by the Board or its delegate. Previously
owned shares delivered in payment for such taxes must have been owned for at
least six months prior to the exercise date, or may be subject to such other
conditions as the Board or its delegate may require. The value of Shares
withheld or delivered shall be the Fair Market Value per Share on the date the
exercise becomes taxable. All Withholding Elections are subject to the
approval of the Board or its delegate and must be made in compliance with rules
and procedures established by the Board or its delegate.
11. Amendment of the Plan. The Board of Directors at any
time and from time to time, may amend the Plan, subject to the limitation that,
except as provided in Section 9 (relating to adjustments upon changes in
stock), no amendment shall be effective unless approved within twelve (12)
months before or after the date of such amendment's adoption, by the vote or
written consent of a majority of the outstanding shares of the
Company/Corporation entitled to vote, where such amendment will:
(a) increase the number of Rights which may be exercised
under the Plan;
(b) materially increase the benefits accruing to participants
under the Plan; or
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(c) materially modify the requirements of Section 5 as to
eligibility for participation in the Plan.
It is expressly contemplated that the Board may amend the Plan in any
respect necessary to provide the Company's employees with the maximum benefits
provided or to be provided under Section 422A of the Code and the regulations
promulgated thereunder relating to employee incentive stock options and/or to
bring the Plan or Rights granted under it into compliance therewith.
Rights and obligations under any Right granted before any amendment
of the Plan shall not be altered or impaired by amendment of the Plan, except
with the consent, which may be obtained in any manner deemed by the Board or
its delegate to be appropriate, of the person to whom the Right was granted.
12. No Obligations. Neither this Plan nor the grant of any
Right shall confer any right on any employee to remain in the employ of the
Corporation or any subsidiary or restrict the right of the Corporation or any
subsidiary to terminate his employment.
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