<PAGE> 1
As filed with the Securities and Exchange Commission on March 28, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SCANSOFT, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------------
DELAWARE 94-3156479
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
9 CENTENNIAL DRIVE
PEABODY, MA 01970
(978) 977-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------------
CAERE CORPORATION 1981 INCENTIVE STOCK OPTION PLAN
CAERE CORPORATION 1981 SUPPLEMENTAL STOCK OPTION PLAN
CAERE CORPORATION 1992 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
CAERE CORPORATION 1997 NON-OFFICER STOCK OPTION PLAN
CALERA 1993 STOCK OPTION PLAN
(FULL NAME OF PLAN)
----------------------
JOHN J. ROGERS, JR.
CHIEF FINANCIAL OFFICER
SCANSOFT, INC.
9 CENTENNIAL DRIVE
PEABODY, MA 01970
(978) 977-2000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
----------------------
Copies to:
KATHARINE A. MARTIN, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CA 94304
(650) 493-9300
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS AMOUNT OFFERING AGGREGATE AMOUNT OF
OF SECURITIES TO TO BE PRICE OFFERING REGISTRATION
BE REGISTERED REGISTERED (1) PER SHARE (2) PRICE (2) FEE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.001 par value
to be issued upon exercise of
options granted and outstanding
under the Caere Corporation 1981
Incentive Stock Option Plan........... 2,452,667 $4.00832 $9,831,074.19 $2,595.40
- ------------------------------------------------------------------------------------------------------------------------------
to be issued upon exercise of options
granted and outstanding under the
Caere Corporation 1981 Supplemental
Stock Option Plan..................... 1,229,746 $4.0848 $5,023,266.46 $1,326.14
- ------------------------------------------------------------------------------------------------------------------------------
to be issued upon exercise of
options granted and outstanding
under the Caere Corporation 1992
Non-Employee Directors' Stock
Option Plan........................... 388,385 $3.77635 $1,466,677.70 $ 387.20
- ------------------------------------------------------------------------------------------------------------------------------
to be issued upon exercise of
options granted and outstanding
under the Caere Corporation 1997
Non-Officer Stock Option Plan......... 431,851 $3.52427 $1,521,959.52 $ 401.80
- ------------------------------------------------------------------------------------------------------------------------------
to be issued upon exercise of
options granted and outstanding
under the Calera 1993 Stock Option
Plan.................................. 1,798 $4.09 $ 7,353.82 $ 1.94
- ------------------------------------------------------------------------------------------------------------------------------
TOTALS................................ 4,504,447 $4,712.48
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</TABLE>
(1) This Registration Statement shall also cover any additional shares of Common
Stock which become issuable under the Plans being registered pursuant to
this Registration Statement by reason of any stock dividend, stock split,
recapitalization or any other similar transaction effected without the
receipt of consideration which results in an increase in the number of the
Registrant's outstanding shares of Common Stock.
(2) Price per share and aggregate offering price estimated in accordance with
Rule 457 (h) under the Securities Act of 1933, as amended, solely for the
purpose of calculating the registration fee.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
There are hereby incorporated by reference in this Registration
Statement the following documents and information heretofore filed with the
Securities and Exchange Commission (the "Commission"):
(a) The Registrant's Annual Report on Form 10-K for the year ended January 3,
1999, as amended, as filed with the Commission.
(b) The Registrant's Quarterly Reports on Form 10-Q for the fiscal quarters
ended March 31, 1999, June 30, 1999 and September 30, 1999, filed pursuant
to the Exchange Act.
(c) The Registrant's Current Reports on Form 8-K dated April 9, 1999 and July
14, 1999 filed with the Commission.
(d) The description of the Registrant's Common Stock contained in the
Registration Statement on Form S-4 (File No. 333-70603) filed by the
Registrant with the Commission on January 14, 1999 and any amendment or
report filed hereafter for the purpose of updating such description.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act subsequent to the filing of this Registration
Statement, and prior to the filing of a post-effective amendment 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 the
Registration Statement and to be part hereof from the date of filing of such
documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a court
to award, or a corporation's Board of Directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933, as amended. The Registrant's
Certificate of Incorporation, as amended, and Bylaws provide for indemnification
of its officers, directors, employees and other agents to the maximum extent
permitted by the Delaware Law. In addition, the Registrant has entered into
Indemnification Agreements with its officers and directors, the form of which is
attached as an Exhibit to the Registrant's Registration Statement on Form S-1
(No. 333-74343) filed with the Commission on October 19, 1995.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMS.
Not applicable.
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ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
5.1 Opinion of counsel as to legality of Securities being
registered.
10.1 Form of Indemnification Agreement is incorporated herein
by reference to the Registrant's Registration Statement
on Form S-1 (Registration No. 333-98356), filed with the
Commission on October 19, 1995.
10.2 Caere Corporation 1981 Incentive Stock Option Plan.
10.3 Caere Corporation 1981 Supplemental Stock Option Plan.
10.4 Caere Corporation 1992 Non-Employee Directors' Stock
Option Plan.
10.5 Caere Corporation 1997 Non-Officer Stock Option Plan.
10.6 Calera 1993 Stock Option Plan.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Counsel (contained in Exhibit 5.1).
24.1 Power of Attorney (see page II-4).
</TABLE>
ITEM 9. UNDERTAKINGS.
(a) Rule 415 Offering. The undersigned registrant hereby undertakes:
1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement.
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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
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Securities Exchange Act of 1934) 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 Delaware General Corporations Law, the
Certificate of Incorporation of the Registrant, the Bylaws of the Registrant,
Indemnification Agreements entered into between the Registrant and its officers
and directors, or otherwise, the registrant has been advised that in the opinion
of the Securities and Exchange 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 Act and
will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Peabody, State of Massachusetts, on March 27, 2000.
SCANSOFT, INC.
By: /s/ MICHAEL K. TIVNAN
--------------------------------------
Michael K. Tivnan
President and Chief Executive Officer
(Principal Executive Officer)
POWER OF ATTORNEY
KNOW ALL THESE PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Michael K. Tivnan and John J.
Rogers, Jr. 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 conforming all that each 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 of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Date: March 27, 2000 /s/ PAUL RICCI
-----------------------------------------
Paul Ricci, Chairman of the Board
Date: March 27, 2000 /s/ MICHAEL K. TIVNAN
-----------------------------------------
Michael K. Tivnan, President, Chief
Executive Officer and Director (Principal
Executive Officer)
Date: March 27, 2000 /s/ JOHN J. ROGERS
-----------------------------------------
John J. Rogers, Jr., Chief Financial
Officer, (Principal Financial Officer &
Principal Accounting Officer)
Date: March 27, 2000 /s/ J. LARRY SMART
-----------------------------------------
J. Larry Smart, Director
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Date: March 27, 2000 /s/ MARK MYERS
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Mark Myers, Director
Date: March 27, 2000 /s/ KATHARINE A. MARTIN
-----------------------------------------
Katharine A. Martin, Director
Date: March 27, 2000 /s/ ROBERT G. TERESI
-----------------------------------------
Robert G. Teresi, Director
Date: March 27, 2000 /s/ ROBERT J. FRANKENBERG
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Robert J. Frankenberg, Director
Date: March 27, 2000 /s/ ANNE M. MULCAHY
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Anne M. Mulcahy, Director
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
5.1 Opinion of counsel as to legality of Securities being
registered.
10.1 Form of Indemnification Agreement is incorporated herein
by reference to the Registrant's Registration Statement
on Form S-1 (Registration No. 333-98356), filed with the
Commission on October 19, 1995.
10.2 Caere Corporation 1981 Incentive Stock Option Plan.
10.3 Caere Corporation 1981 Supplemental Stock Option Plan.
10.4 Caere Corporation 1992 Non-Employee Directors' Stock
Option Plan.
10.5 Caere Corporation 1997 Non-Officer Stock Option Plan.
10.6 Calera 1993 Stock Option Plan.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Counsel (contained in Exhibit 5.1).
24.1 Power of Attorney (see page II-4).
</TABLE>
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<PAGE> 1
Exhibit 5.1
March 27, 2000
ScanSoft, Inc.
9 Centennial Drive
Peabody, MA 01970
Re: REGISTRATION STATEMENT ON FORM S-8
Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed by
you with the Securities and Exchange Commission on or about the date hereof (the
"Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, of an aggregate of 4,504,447 shares of your
Common Stock (the "Shares") reserved for issuance under the Caere Corporation
1981 Incentive Stock Option Plan, Caere Corporation 1981 Supplemental Stock
Option Plan, Caere Corporation 1992 Non-Employee Directors' Stock Option Plan,
Caere Corporation 1997 Non-Officer Stock Option Plan, and Calera 1993 Stock
Option Plan. As your legal counsel, we have examined the proceedings taken and
are familiar with the proceedings proposed to be taken by you in connection with
the sale and issuance of the Shares under the plans. In addition, for purposes
of this opinion we have assumed that the consideration received by the Company
in connection with each issuance of the Shares will include an amount in the
form of cash, services rendered or property that exceeds the greater of (i) the
aggregate par value of such Shares or (ii) the portion of such consideration
determined by the Company's Board of Directors to be "capital" for purposes of
the Delaware General Corporation Law.
Based upon the foregoing, it is our opinion that, when issued and sold
in the manner referred to in the Plans and pursuant to the agreements which
accompany the Plans, the Shares issued and sold thereby will be legally and
validly issued, fully paid and non-assessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in the
Registration Statement, including any Prospectus constituting a part thereof,
and any amendments thereto.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ Wilson Sonsini Goodrich & Rosati
---------------------------------------
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<PAGE> 1
EXHIBIT 10.2
CAERE CORPORATION
1981 INCENTIVE STOCK OPTION PLAN
Adopted December 17, 1981
Approved by the Shareholders February 24, 1982
Amended July 12, 1983
Amendment Approved by the Shareholders September 21, 1983
Amended June 25, 1985
Amendment Approved by the Shareholders June 24, 1986
Amended October 21, 1986 and February 17, 1987
Amendments Approved by the Shareholders October 20, 1987
Amended April 19, 1989
Amendment Approved by the Stockholders September 26, 1989
Amended February 15, 1990
Amendment Approved by the Stockholders May 3, 1990
Amended February 27, 1992
Amendment Approved by the Stockholders May 5, 1992
Amended February 18, 1993
Amendment Approved by the Stockholders May 4, 1993
Amended February 10, 1994
Amendment Approved by the Stockholders May 25, 1994
Amended October 14, 1994
Amendment Approved by the Stockholders December 20, 1994
Amended February 21, 1996
Amendment Approved by the Stockholders May 14, 1996
Amended August 19, 1996
1. PURPOSE.
(a) The purpose of the Plan is to provide a means by which
selected key employees of Caere Corporation (the "Company") and its Affiliates,
as defined in subparagraph l(b), may be given an opportunity to purchase stock
of the Company.
(b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company, as those terms are defined
in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended from time to time (the "Code").
(c) The Company, by means of the Plan, seeks to retain the
services of persons now holding key positions, to secure and retain the services
of persons capable of filling such positions, and to provide incentives for such
persons to exert maximum efforts for the success of the Company.
(d) The Company intends that the options issued under the Plan be
incentive stock options as that term is used in Section 422 of the Code.
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2. ADMINISTRATION.
(a) The Plan shall be administered by the Board of Directors (the
"Board") of the Company unless and until the Board delegates administration to a
committee, as provided in subparagraph 2(c). Whether or not the Board has
delegated administration, the Board shall have the final power to determine all
questions of policy and expediency that may arise in the administration of the
Plan.
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the
persons eligible under the Plan shall be granted options; when and how the
option shall be granted; the provisions of each option granted (which need not
be identical), including the time or times during the term of each option within
which all or portions of such option may be exercised; and the number of shares
for which an option shall be granted to each such person.
(2) To construe and interpret the Plan and options
granted under it, and to establish, amend and revoke rules and regulations for
its administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any option agreement, in a
manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.
(3) To amend the Plan as provided in paragraph 10.
(4) Generally, to exercise such powers and to
perform such acts as the Board deems necessary or expedient to promote the best
interests of the Company.
(c) The Board may delegate administration of the Plan to a
committee composed of one (1) or more members of the Board, all of the members
of which committee may (but need not) be, in the discretion of the Board,
non-employee directors and/or outside directors, as defined by the provisions of
subparagraphs 2(d) and 2(e), respectively. If administration is delegated to a
Committee, the Committee shall have, in connection with the administration of
the Plan, the powers theretofore possessed by the Board, including the power to
delegate to a subcommittee of two or more outside directors any of the
administrative powers the committee is authorized to exercise, subject, however,
to such resolutions, not inconsistent with the provisions of the Plan, as may be
adopted from time to time by the Board. The Board may abolish the Committee at
any time and revest in the Board the administration of the Plan. Additionally,
prior to the date of the first registration of an equity security of the Company
under Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and notwithstanding anything to the contrary contained herein,
the Board may delegate administration of the Plan to any person or persons and
the term "Committee" shall apply to any person or persons to whom such authority
has been delegated.
(d) The term "non-employee director," as used in this Plan, shall
mean a director who either (i) is not a current employee or officer of the
Company or its parent or subsidiary, does not receive compensation (directly or
indirectly) from the Company or its parent or subsidiary for services rendered
as a consultant or in any capacity other than as a director
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(except for an amount as to which disclosure would not be required under Item
404(a) of Regulation S-K ("Regulation S-K") promulgated pursuant to the
Securities Act of 1933 (the "Securities Act"), does not possess an interest in
any other transaction as to which disclosure would be required under Item 404(a)
of Regulation S-K, and is not engaged in a business relationship as to which
disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is
otherwise considered a "non-employee director" for purposes of Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
(e) The term "outside director," as used in this Plan, shall mean
a director who either (i) is not a current employee of the Company or an
"affiliated corporation" (within the meaning of Treasury regulations promulgated
under Section 162(m) of the Code), is not a former employee of the Company or an
"affiliated corporation" receiving compensation for prior services (other than
benefits under a tax qualified pension plan), was not an officer of the Company
or an "affiliated corporation" at any time, and is not currently receiving
direct or indirect remuneration from the Company or an "affiliated corporation"
for services in any capacity other than as a director, or (ii) is otherwise
considered an "outside director" for purposes of Section 162(m) of the Code.
3. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of paragraph 9 relating to
adjustments upon changes in stock, the stock that may be sold pursuant to
options granted under the Plan shall not exceed in the aggregate three million
five hundred ninety-five thousand (3,595,000) shares of the Company's common
stock; provided, however, that such aggregate number of shares shall be reduced
to reflect the number of shares of the Company's common stock that have been
sold pursuant to, or may be sold pursuant to outstanding options granted under,
the Company's 1981 Supplemental Stock Option Plan to the same extent as if such
sales had been made or options had been granted pursuant to this Plan. If any
option granted under the Plan shall for any reason expire or otherwise terminate
without having been exercised in full, the stock not purchased under such option
shall again become available for the Plan.
(b) The stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.
(c) An option may be granted to an eligible person under the Plan
only if the aggregate fair market value (determined at the time the option is
granted) of the stock with respect to which incentive stock options (as defined
in the Code) granted after 1986 are exercisable for the first time by such
optionee during any calendar year under all incentive stock option plans of the
Company and its Affiliates does not exceed one hundred thousand dollars
($100,000). Should it be determined that an option granted under the Plan
exceeds such maximum for any reason other than the failure of a good faith
attempt to value the stock subject to the option, such option shall be
considered a nonstatutory stock option to the extent, but only to the extent, of
such excess; provided, however, that should it be determined that an entire
option or any portion thereof does not qualify for treatment as an incentive
stock option by reason of exceeding such maximum, such option or the applicable
portion shall be considered a nonstatutory stock option.
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(d) Subject to the provisions of paragraph 9 relating to
adjustments upon changes in stock, no person shall be eligible to be granted in
any calendar year options under this Plan covering more than an aggregate of
three hundred thousand (300,000) shares of the Company's common stock, when
combined with options granted in the same calendar year under the Company's 1981
Supplemental Stock Option Plan. Shares subject to an option that is canceled
shall continue to be counted against the maximum number of shares that may be
covered by options granted to a person pursuant to this subparagraph 3(c). If an
option is amended, exchanged or otherwise altered in a manner that results in a
reduction of the exercise price, such transaction shall be deemed to be a
cancellation of the original option and the grant of a new option for purposes
of this subparagraph. In such event, both the original option and the new option
shall be counted in the applicable year against the maximum limitation specified
by this subparagraph in accordance with regulations promulgated under Section
162(m) of the Code.
4. ELIGIBILITY.
(a) Options may be granted only to key employees (including
officers) of the Company or its Affiliates. A director of the Company shall not
be eligible for the benefits of the Plan unless such director is also a key
employee (including an officer) of the Company or any Affiliate.
(b) No person shall be eligible for the grant of an option under
the Plan if, at the time of grant, such person owns (or is deemed to own
pursuant to the attribution rules of Section 424(d) of the Code) stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or of any of its Affiliates unless the option
price is at least one hundred ten percent (110%) of the fair market value of
such stock at the date of grant and the term of the option does not exceed five
(5) years from the date of grant.
5. OPTION PROVISIONS.
Each option shall be in such form and shall contain such terms
and conditions as the Board or the Committee shall deem appropriate. The
provisions of separate options need not be identical, but each option shall
include (through incorporation of provisions hereof by reference in the option
or otherwise) the substance of each of the following provisions:
(a) The term of any option shall not be greater than ten (10)
years from the date it was granted.
(b) The exercise price of each option shall be not less than one
hundred percent (100%) of the fair market value of the stock subject to the
option on the date the option is granted.
(c) The purchase price of stock acquired pursuant to an option
shall be paid, to the extent permitted by applicable statutes and regulations,
either (i) in cash at the time the option is exercised, or (ii) at the
discretion of the Board or the Committee, either at the time of grant or
exercise of the option (A) by delivery to the Company of other common stock of
the Company, (B) according to a deferred payment or other arrangement (which may
include, without limiting the generality of the foregoing, the use of other
common stock of the Company)
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with the person to whom the option is granted or to whom the option is
transferred pursuant to subparagraph 5(d), or (C) in any other form of legal
consideration that may be acceptable to the Board or Committee in their
discretion.
In the case of any deferred payment arrangement, interest shall be
payable at least annually and shall be charged at the minimum rate of interest
necessary to avoid the treatment as interest, under any applicable provisions of
the Code, of any amounts other than amounts stated to be interest under the
deferred payment arrangement.
(d) An option shall not be transferable except by will or by the
laws of descent and distribution, and shall be exercisable during the lifetime
of the person to whom the option is granted only by such person. Notwithstanding
the foregoing, the person to whom an option is granted may, by delivering
written notice to the Company, in a form satisfactory to the Company, designate
a third party who, in the event of the death of the optionee, shall thereafter
be entitled to exercise the option.
(e) The total number of shares of stock subject to an option may,
but need not, be allotted in periodic installments (which may, but need not, be
equal). From time to time during each of such installment periods, the option
may be exercised with respect to some or all of the shares allotted to that
period, and/or with respect to some or all of the shares allotted to any prior
period as to which the option was not fully exercised. During the remainder of
the term of the option (if its term extends beyond the end of the installment
periods), the option may be exercised from time to time with respect to any
shares then remaining subject to the option. The provisions of this subparagraph
5(e) are subject to any option provisions governing the minimum number of shares
as to which an option may be exercised.
(f) The Company may require any optionee, or any person to whom
an option is transferred under subparagraph 5(d), as a condition of exercising
any such option: (1) to give written assurances satisfactory to the Company as
to the optionee's knowledge and experience in financial and business matters
and/or to employ a purchaser representative reasonably satisfactory to the
Company who is knowledgeable and experienced in financial and business matters,
and that he or she is capable of evaluating, alone or together with the
purchaser representative, the merits and risks of exercising the option; and (2)
to give written assurances satisfactory to the Company stating that such person
is acquiring the stock subject to the option for such person's own account and
not with any present intention of selling or otherwise distributing the stock.
These requirements, and any assurances given pursuant to such requirements,
shall be inoperative if (i) the issuance of the shares upon the exercise of the
option has been registered under a then currently effective registration
statement under the Securities Act, or (ii) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not
be met in the circumstances under the then applicable securities laws.
(g) An option shall terminate three (3) months after termination
of the optionee's employment with the Company or an Affiliate, unless (i) the
termination of employment of the optionee is due to such person's permanent and
total disability, within the meaning of Section 422(c)(6) of the Code, in which
case the option may, but need not, provide that it may be exercised at any time
within one (l) year following such termination of
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employment; or (ii) the optionee dies while in the employ of the Company or an
Affiliate, or within not more than three (3) months after termination of such
employment, in which case the option may, but need not, provide that it may be
exercised at any time within eighteen (18) months following the death of the
optionee by the person or persons to whom the optionee's rights under such
option pass by will or by the laws of descent and distribution; or (iii) the
option by its terms specifies either (a) that it shall terminate sooner than
three (3) months after termination of the optionee's employment, or (b) that it
may be exercised more than three (3) months after termination of the optionee's
employment with the Company or an Affiliate. This subparagraph 5(g) shall not be
construed to extend the term of any option or to permit anyone to exercise the
option after expiration of its term, nor shall it be construed to increase the
number of shares as to which any option is exercisable from the amount
exercisable on the date of termination of the optionee's employment.
(h) The option may, but need not, include a provision whereby the
optionee may elect at any time during the term of his or her employment with the
Company or any Affiliate to exercise the option as to any part or all of the
shares subject to the option prior to the stated vesting date of the option or
of any installment or installments specified in the option. Any shares so
purchased from any unvested installment or option may be subject to a repurchase
right in favor of the Company or to any other restriction the Board or the
Committee determines to be appropriate.
(i) To the extent provided by the terms of an option, the
optionee may satisfy any federal, state or local tax withholding obligation
relating to the exercise of such option by any of the following means or by a
combination of such means: (1) tendering a cash payment; (2) authorizing the
Company to withhold from the shares of the common stock otherwise issuable to
the participant as a result of the exercise of the stock option a number of
shares having a fair market value less than or equal to the amount of the
withholding tax obligation; or (3) delivering to the Company owned and
unencumbered shares of the common stock having a fair market value less than or
equal to the amount of the withholding tax obligation.
6. COVENANTS OF THE COMPANY.
(a) During the terms of the options granted under the Plan, the
Company shall keep available at all times the number of shares of stock required
to satisfy such options.
(b) The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be
required to issue and sell shares of stock upon exercise of the options granted
under the Plan; provided, however, that this undertaking shall not require the
Company to register under the Securities Act either the Plan, any option granted
under the Plan or any stock issued or issuable pursuant to any such option. If,
after reasonable efforts, the Company is unable to obtain from any such
regulatory commission or agency the authority that counsel for the Company deems
necessary for the lawful issuance and sale of stock under the Plan, the Company
shall be relieved from any liability for failure to issue and sell stock upon
exercise of such options unless and until such authority is obtained.
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7. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to options granted under the
Plan shall constitute general funds of the Company.
8. MISCELLANEOUS.
(a) The Board or the Committee shall have the power to accelerate
the time during which an option may be exercised, or the time during which an
option or any portion thereof will vest pursuant to subparagraph 5(e),
notwithstanding the provisions in the option stating the time during which it
may be exercised or the time during which it will vest.
(b) Neither an optionee nor any person to whom an option is
transferred under subparagraph 5(d) shall be deemed to be the holder of, or to
have any of the rights of a holder with respect to, any shares subject to such
option unless and until such person has satisfied all requirements for exercise
of the option pursuant to its terms.
(c) Throughout the term of any option granted pursuant to the
Plan, the Company shall make available to the holder of such option, not later
than one hundred twenty (120) days after the close of each of the Company's
fiscal years during the option term, upon request, such financial and other
information regarding the Company as comprises the annual report to the
shareholders of the Company provided for in the bylaws of the Company.
(d) Nothing in the Plan or any instrument executed or option
granted pursuant thereto shall confer upon any eligible employee or optionee any
right to continue in the employ of the Company or any Affiliate or shall affect
the right of the Company or any Affiliate to terminate the employment of any
eligible employee or optionee with or without cause.
9. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or
subject to any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or otherwise), appropriate adjustments
will be made in the class(es) and maximum number of shares subject to the Plan
pursuant to subparagraph 3(a), the class(es) and maximum number of shares that
may be subject to options pursuant to subparagraph 3(d) and the class(es) and
number of shares and price per share of stock subject to outstanding options.
(b) In the event of: (l) a dissolution or liquidation of the
Company; (2) a merger or consolidation in which the Company is not the surviving
corporation; (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; or (4) any other capital
reorganization in which more than fifty percent (50%) of the shares of the
Company entitled to vote are exchanged then, at the sole discretion of the Board
to the extent permitted by law, (i) any surviving corporation shall assume
options outstanding under the Plan or substitute similar options for those
outstanding under the Plan, (ii) the time during which options
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outstanding under the Plan may be exercised shall be accelerated and the options
terminated if not exercised prior to such event, or (iii) options outstanding
under the Plan shall continue in full force and effect.
10. AMENDMENT OF THE PLAN.
(a) The Board at any time, and from time to time, may amend the
Plan. However, except as provided in paragraph 9 relating to adjustments upon
changes in stock, no amendment shall be effective unless approved by the
stockholders within twelve (12) months before or after the adoption of the
amendment, where the amendment will:
(i) Increase the number of shares reserved for options
under the Plan;
(ii) Modify the requirements as to eligibility for
participation in the Plan (to the extent such modification requires stockholder
approval in order for the Plan to satisfy the requirements of Section 422 of the
Code); or
(iii) Modify the Plan in any other way if such
modification requires stockholder approval in order for the Plan to satisfy the
requirements of Section 422 of the Code or to comply with the requirements of
Rule 16b-3 promulgated under the Exchange Act.
(b) It is expressly contemplated that the Board may amend the
Plan in any respect the Board deems necessary or advisable to provide optionees
with the maximum benefits provided or to be provided under the provisions of the
Code and the regulations promulgated thereunder relating to employee incentive
stock options and/or to bring the Plan and/or options granted under it into
compliance therewith.
(c) Rights and obligations under any option granted before
amendment of the Plan shall not be altered or impaired by any amendment of the
Plan unless (i) the Company requests the consent of the person to whom the
option was granted and (ii) such person consents in writing.
(d) The Board may in its sole discretion submit any other
amendment to the Plan for stockholder approval, including, but not limited to,
amendments to the Plan intended to satisfy the requirements of Section 162(m) of
the Code and the regulations promulgated thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers.
11. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any time.
Unless sooner terminated, the Plan shall terminate on January 31, 2000. No
options may be granted under the Plan while the Plan is suspended or after it is
terminated.
(b) Rights and obligations under any option granted while the
Plan is in effect shall not be altered or impaired by suspension or termination
of the Plan, except with the consent of the person to whom the option was
granted.
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12. EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the Board, but no
options granted under the Plan shall be exercised unless and until the Plan has
been approved by the stockholders and, if required, an appropriate permit has
been issued by the Commissioner of Corporations of the State of California.
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EXHIBIT 10.3
CAERE CORPORATION
1981 SUPPLEMENTAL STOCK OPTION PLAN
Adopted December 17, 1981
Approved by the Shareholders February 24, 1982
Amended June 25, 1985
Amended October 21, 1986
Amendment Approved by the Shareholders October 20, 1987
Amended April 19, 1989
Amendment Approved by the Stockholders September 26, 1989
Amended February 15, 1990
Amendment Approved by the Stockholders May 3, 1990
Amended February 27, 1992
Amendment Approved by the Stockholders May 5, 1992
Amended February 18, 1993
Amendment Approved by the Stockholders May 4, 1993
Amended February 10, 1994
Amendment Approved by the Stockholders May 25, 1994
Amended October 14, 1994
Amendment Approved by the Stockholders December 20, 1994
Amended February 21, 1996
Amendment Approved by the Stockholders May 14, 1996
Amended August 19, 1996
1. PURPOSE.
(a) The purpose of the Plan is to provide a means by which
selected key employees and directors of and consultants to Caere Corporation, a
California corporation (the "Company"), and its affiliates, as defined in
subparagraph 1(b), may be given an opportunity to purchase stock of the Company.
(b) The word "affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company as those terms are defined
in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended from time to time (the "Code").
(c) The Company, by means of the Plan, seeks to retain the
services of persons now holding key positions, to secure and retain the services
of persons capable of filling such positions, and to provide incentives for such
persons to exert maximum efforts for the success of the Company.
(d) The Company intends that the options issued under the Plan
not be incentive stock options as that term is used in Section 422 of the Code.
2. ADMINISTRATION.
(a) The Plan shall be administered by the Board of Directors (the
"Board") of the Company unless and until the Board delegates administration to a
committee, as provided in
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subparagraph 2(c). Whether or not the Board has delegated administration, the
Board shall have the final power to determine all questions of policy and
expediency that may arise in the administration of the Plan.
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the
persons eligible under the Plan shall be granted options; when and how the
option shall be granted; the provisions of each option granted (which need not
be identical), including the time or times during the term of each option within
which all or portions of such option may be exercised; and the number of shares
for which an option shall be granted to each such person.
(2) To construe and interpret the Plan and options
granted under it, and to establish, amend and revoke rules and regulations for
its administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any option agreement, in a
manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.
(3) To amend the Plan as provided in paragraph 10.
(4) Generally, to exercise such powers and to
perform such acts as the Board deems necessary or expedient to promote the best
interests of the Company.
(c) The Board may delegate administration of the Plan to a
committee composed of one (1) or more members of the Board, all of the members
of which committee may (but need not) be, in the discretion of the Board,
non-employee directors and/or outside directors, as defined by the provisions of
subparagraphs 2(d) and 2(e), respectively. If administration is delegated to a
committee, the committee shall have, in connection with the administration of
the Plan, the powers theretofore possessed by the Board, including the power to
delegate to a subcommittee of two or more outside directors any of the
administrative powers the committee is authorized to exercise, subject, however,
to such resolutions, not inconsistent with the provisions of the Plan, as may be
adopted from time to time by the Board. The Board may abolish the committee at
any time and revest in the Board the administration of the Plan.
(d) The term "non-employee director," as used in this Plan, shall
mean a director who either (i) is not a current employee or officer of the
Company or its parent or subsidiary, does not receive compensation (directly or
indirectly) from the Company or its parent or subsidiary for services rendered
as a consultant or in any capacity other than as a director (except for an
amount as to which disclosure would not be required under Item 404(a) of
Regulation S-K ("Regulation S-K") promulgated pursuant to the Securities Act of
1933 (the "Securities Act"), does not possess an interest in any other
transaction as to which disclosure would be required under Item 404(a) of
Regulation S-K, and is not engaged in a business relationship as to which
disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is
otherwise considered a "non-employee director" for purposes of Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
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(e) The term "outside director," as used in this Plan, shall mean
a director who either (i) is not a current employee of the Company or an
"affiliated corporation" (within the meaning of Treasury regulations promulgated
under Section 162(m) of the Code), is not a former employee of the Company or an
"affiliated corporation" receiving compensation for prior services (other than
benefits under a tax qualified pension plan), was not an officer of the Company
or an "affiliated corporation" at any time, and is not currently receiving
direct or indirect remuneration from the Company or an "affiliated corporation"
for services in any capacity other than as a director, or (ii) is otherwise
considered an "outside director" for purposes of Section 162(m) of the Code.
3. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of paragraph 9 relating to
adjustments upon changes in stock, the stock that may be sold pursuant to
options granted under the Plan shall not exceed in the aggregate three million
five hundred ninety-five thousand (3,595,000) shares of the Company's common
stock; provided, however, that such aggregate number of shares shall be reduced
to reflect the number of shares of the Company's common stock that have been
sold pursuant to, or may be sold pursuant to outstanding options granted under,
the Company's 1981 Incentive Stock Option Plan to the same extent as if such
sales had been made or options had been granted pursuant to this Plan. If any
option granted under the Plan shall for any reason expire or otherwise terminate
without having been exercised in full, the stock not purchased under such option
shall again become available for the Plan.
(b) The stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.
(c) Subject to the provisions of paragraph 9 relating to
adjustments upon changes in stock, no person shall be eligible to be granted in
any calendar year options under this Plan covering more than an aggregate of
three hundred thousand (300,000) shares of the Company's common stock, when
combined with options granted in the same calendar year under the Company's 1981
Incentive Stock Option Plan. Shares subject to an option that is canceled shall
continue to be counted against the maximum number of shares that may be covered
by options granted to a person pursuant to this subparagraph 3(c). If an option
is amended, exchanged or otherwise altered in a manner that results in a
reduction of the exercise price, such transaction shall be deemed to be a
cancellation of the original option and the grant of a new option for purposes
of this subparagraph. In such event, both the original option and the new option
shall be counted in the applicable year against the maximum limitation specified
by this subparagraph in accordance with regulations promulgated under Section
162(m) of the Code.
4. ELIGIBILITY.
Options may be granted only to key employees (including
officers), directors of or consultants to the Company or its affiliates.
5. OPTION PROVISIONS.
Each option shall be in such form and shall contain such terms and
conditions as the Board or the committee shall deem appropriate. The provisions
of separate options need not
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be identical, but each option shall include (through incorporation of provisions
hereof by reference in the option or otherwise) the substance of each of the
following provisions:
(a) The term of any option shall not be greater than ten (10)
years from the date it was granted.
(b) The exercise price of each option shall be not less than
eighty-five percent (85%) of the fair market value of the stock subject to the
option on the date the option is granted.
(c) The purchase price of stock acquired pursuant to an option
shall be paid, as specified in the option, either (i) in cash at the time the
option is exercised, or (ii) at the discretion of the Board or the committee,
(A) by delivery to the Company of other common stock of the Company, (B)
according to a deferred payment or other arrangement (which may include, without
limiting the generality of the foregoing, the use of other common stock of the
Company) with the person to whom the option is granted or to whom the option is
transferred pursuant to subparagraph 5(d), or (C) in any other form of legal
consideration that may be acceptable to the Board or the committee in their
discretion, either at the time of grant or exercise of the option.
In the case of any deferred payment arrangement, interest shall
be payable at least annually and shall be charged at the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement.
(d) An option shall not be transferable except by will or by the
laws of descent and distribution, and shall be exercisable during the lifetime
of the person to whom the option is granted only by such person, unless
otherwise specified in the option, in which case the option may be transferred
upon such terms and conditions as are set forth in the option, as the Board or
the committee shall determine in its discretion, including (without limitation)
pursuant to a "domestic relations order" within the meaning of such rules,
regulations or interpretations of the Securities and Exchange Commission as are
applicable for purposes of Section 16 of the Exchange Act. Notwithstanding the
foregoing, the person to whom an option is granted may, by delivering written
notice to the Company, in a form satisfactory to the Company, designate a third
party who, in the event of the death of the optionee, shall thereafter be
entitled to exercise the option.
(e) The total number of shares of stock subject to an option may,
but need not, be allotted in periodic installments (which may, but need not, be
equal). From time to time during each of such installment periods, the option
may be exercised with respect to some or all of the shares allotted to that
period, and/or with respect to some or all of the shares allotted to any prior
period as to which the option was not fully exercised. During the remainder of
the term of the option (if its term extends beyond the end of the installment
periods), the option may be exercised from time to time with respect to any
shares then remaining subject to the option. The provisions of this subparagraph
5(e) are subject to any option provisions governing the minimum number of shares
as to which an option may be exercised.
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(f) The Company may require any optionee, or any person to whom
an option is transferred under subparagraph 5(d), as a condition of exercising
any such option to give written assurances satisfactory to the Company stating
that such person is acquiring the stock subject to the option for such person's
own account not with any present intention of selling or otherwise distributing
the stock. The requirement of providing written assurances and any assurances
given pursuant to the requirement, shall be inoperative if (i) the issuance of
the shares upon the exercise of the option has been registered under a then
currently effective registration statement under the Securities Act, or (ii) a
determination is made by counsel for the Company that such written assurances
are not required in the circumstances under the then applicable federal
securities laws.
(g) An option shall terminate three (3) months after termination
of the optionee's employment with the Company or an affiliate, unless (i) the
termination of employment of the optionee is due to such person's permanent and
total disability, within the meaning of Section 422(c)(6) of the Code, in which
case the option may, but need not, provide that it may be exercised at any time
within one (l) year following such termination of employment; or (ii) the
optionee dies while in the employ of the Company or an affiliate, or within not
more than three (3) months after termination of such employment, in which case
the option may, but need not, provide that it may be exercised at any time
within eighteen (18) months following the death of the optionee by the person or
persons to whom the optionee's rights under such option pass by will or by the
laws of descent and distribution; or (iii) the option by its terms specifies
either (a) that it shall terminate sooner than three (3) months after
termination of the optionee's employment, or (b) that it may be exercised more
than three (3) months after termination of the optionee's employment with the
Company or an affiliate. This subparagraph 5(g) shall not be construed to extend
the term of any option or to permit anyone to exercise the option after
expiration of its term, nor shall it be construed to increase the number of
shares as to which any option is exercisable from the amount exercisable on the
date of termination of the optionee's employment.
(h) The option may, but need not, include a provision whereby the
optionee may elect at any time during the term of his or her employment with the
Company or any affiliate to exercise the option as to any part or all of the
shares subject to the option prior to the stated vesting date of the option or
of any installment or installments specified in the option. Any shares so
purchased from any unvested installment or option may be subject to a repurchase
right in favor of the Company or to any other restriction the Board or the
committee determines to be appropriate.
(i) To the extent provided by the terms of an option, the
optionee may satisfy any federal, state or local tax withholding obligation
relating to the exercise of such option by any of the following means or by a
combination of such means: (1) tendering a cash payment; (2) authorizing the
Company to withhold from the shares of the common stock otherwise issuable to
the participant as a result of the exercise of the stock option a number of
shares having a fair market value less than or equal to the amount of the
withholding tax obligation; or (3) delivering to the Company owned and
unencumbered shares of the common stock having a fair market value less than or
equal to the amount of the withholding tax obligation.
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6. COVENANTS OF THE COMPANY.
(a) During the terms of the options granted under the Plan, the
Company shall keep available at all times the number of shares of stock required
to satisfy such options.
(b) The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be
required to issue and sell shares of stock upon exercise of the options granted
under the Plan; provided, however, that this undertaking shall not require the
Company to register under the Securities Act either the Plan, any option granted
under the Plan or any stock issued or issuable pursuant to any such option. If
the Company is unable to obtain from any such regulatory commission or agency
the authority which counsel for the Company deems necessary for the lawful
issuance and sale of stock under the Plan, the Company shall be relieved from
any liability for failure to issue and sell stock upon exercise of such options
unless and until such authority is obtained.
7. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to options granted under
the Plan shall constitute general funds of the Company.
8. MISCELLANEOUS.
(a) The Board or the committee shall have the power to accelerate
the time during which an option may be exercised, or the time during which an
option or any portion thereof will vest pursuant to subparagraph 5(e),
notwithstanding the provisions in the option stating the time during which it
may be exercised.
(b) Neither an optionee nor any person to whom an option is
transferred under subparagraph 5(d) shall be deemed to be the holder of, or to
have any of the rights of a holder with respect to, any shares subject to such
option unless and until such person has satisfied all requirements for exercise
of the option pursuant to its terms.
9. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or
subject to any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or otherwise), appropriate adjustments
will be made in the class(es) and maximum number of shares subject to the Plan
pursuant to subparagraph 3(a), the class(es) and maximum number of shares that
may be subject to options pursuant to subparagraph 3(c) and the class(es) and
number of shares and price per share of stock subject to outstanding options.
(b) In the event of: (l) a dissolution or liquidation of the
Company; (2) a merger or consolidation in which the Company is not the surviving
corporation; (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; or (4) any other
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capital reorganization in which more than fifty percent (50%) of the shares of
the Company entitled to vote are exchanged then, at the sole discretion of the
Board to the extent permitted by law, (i) any surviving corporation shall either
assume options outstanding under the Plan or substitute similar options for
those outstanding under the Plan, (ii) the time during which options outstanding
under the Plan may be exercised shall be accelerated and the options terminated
if not exercised prior to such event, or (iii) options outstanding under the
Plan shall continue in full force and effect.
10. AMENDMENT OF THE PLAN.
(a) The Board at any time, and from time to time, may amend the
Plan. However, except as provided in paragraph 9 relating to adjustments upon
changes in stock, no amendment shall be effective unless approved by the
stockholders within twelve (12) months before or after the adoption of the
amendment, where the amendment will:
(i) Increase the number of shares reserved for options
under the Plan; or
(ii) Modify the Plan in any other way if such modification
requires stockholder approval in order for the Plan to comply with the
requirements of Rule 16b-3 promulgated under the Exchange Act.
(b) Rights and obligations under any option granted before
amendment of the Plan shall not be altered or impaired by any amendment of the
Plan, except with the consent of the person to whom the option was granted.
(c) The Board may in its sole discretion submit any other
amendment to the Plan for stockholder approval, including, but not limited to,
amendments to the Plan intended to satisfy the requirements of Section 162(m) of
the Code and the regulations promulgated thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers.
11. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any time.
Unless sooner terminated, the Plan shall terminate on January 31, 2000. No
options may be granted under the Plan while the Plan is suspended or after it is
terminated.
(b) Rights and obligations under any option granted while the
Plan is in effect shall not be altered or impaired by suspension or termination
of the Plan, except with the consent of the person to whom the option was
granted.
12. EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the Board, but no
options granted under the Plan shall be exercised unless and until the Plan has
been approved by the stockholders and, if required, an appropriate permit has
been issued by the Commissioner of Corporations of the State of California.
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EXHIBIT 10.4
CAERE CORPORATION
1992 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
Adopted on February 27, 1992
Approved by the Stockholders May 5, 1992
Amended by the Board of Directors August 25, 1994
Amended by the Board of Directors March 2, 1995
Approved by the Stockholders May 5, 1995
Amended by the Board of Directors February 21, 1996
Approved by the Stockholders May 14, 1996
Amended August 19, 1996
1. PURPOSE.
(a) The purpose of the 1992 Non-Employee Directors' Stock Option Plan
(the "Plan") is to provide a means by which each director of Caere Corporation,
a Delaware corporation (the "Company"), who is not otherwise an employee of the
Company or of any Affiliate of the Company (each such person being hereafter
referred to as a "Non-Employee Director") will be given an opportunity to
purchase stock of the Company.
(b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company as those terms are defined
in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended (the "Code").
(c) The Company, by means of the Plan, seeks to retain the services of
persons now serving as Non-Employee Directors of the Company, to secure and
retain the services of persons capable of serving in such capacity, and to
provide incentives for such persons to exert maximum efforts for the success of
the Company.
(d) The Company intends that the options issued under the Plan not be
incentive stock options as that term is used in Section 422 of the Code.
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2. ADMINISTRATION.
(a) The Plan shall be administered by the Board of Directors of the
Company (the "Board") unless and until the Board delegates administration to a
committee, as provided in subparagraph 2(c).
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(1) To construe and interpret the Plan and options granted under
it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any option agreement, in a
manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.
(2) To amend the Plan as provided in paragraph 11.
(3) Generally, to exercise such powers and to perform such acts
as the Board deems necessary or expedient to promote the best interests of the
Company.
(c) The Board may delegate administration of the Plan to a committee
composed of one (1) or more members of the Board (the "Committee"), all of the
members of which Committee may (but need not) be, in the discretion of the
Board, "non-employee directors" within the meaning of Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board, subject, however, to such resolutions, not inconsistent with the
provisions of the Plan,
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as may be adopted from time to time by the Board. The Board may abolish the
Committee at any time and revest in the Board the administration of the Plan.
3. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of paragraph 10 relating to adjustments
upon changes in stock, the stock that may be sold pursuant to options granted
under the Plan shall not exceed in the aggregate Two Hundred Thirty Thousand
(230,000) shares of the Company's common stock. If any option granted under the
Plan shall for any reason expire or otherwise terminate without having been
exercised in full, the stock not purchased under such option shall again become
available for the Plan.
(b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.
4. ELIGIBILITY.
Options shall be granted only to Non-Employee Directors of the Company.
5. NON-DISCRETIONARY GRANTS.
(a) Each person who is, after March 2, 1996 (the "Amendment Effective
Date"), elected for the first time to be a Non-Employee Director of the Company
shall, upon the date of his or her initial election to be a Non-Employee
Director by the Board or stockholders of the Company, be automatically granted
an option to purchase Thirty Thousand (30,000) shares of common stock of the
Company on the terms and conditions set forth herein. Thereafter, so long as any
such person remains a Non-Employee Director of the Company and the Plan remains
in effect, he or she shall, on each three-year anniversary of such initial
grant, be automatically granted an option to purchase Thirty Thousand (30,000)
shares of common stock of the Company on the terms and conditions set forth
herein.
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(b) Each person who is, as of the Amendment Effective Date, a
Non-Employee Director of the Company shall, on each three-year anniversary of
such person's receipt of an option grant covering shares of common stock of the
Company that most recently preceded the Amendment Effective Date (the "Preceding
Option"), be automatically granted an option to purchase Thirty Thousand
(30,000) shares of common stock of the Company on the terms and conditions set
forth herein.
(c) Each person who is, on the Amendment Effective Date, a Non-Employee
Director of the Company shall, on the Amendment Effective Date, be automatically
granted an option to purchase, on the terms and conditions set forth herein, the
number of shares of common stock of the Company (rounded to the nearest whole
share) determined by multiplying Three Thousand Three Hundred Thirty-Three
(3,333) shares by a fraction (which may exceed one), the numerator of which is
the number of days remaining, as of the Amendment Effective Date, until the
third anniversary of such person's receipt of his or her Preceding Option and
the denominator of which is 365.
6. OPTION PROVISIONS.
Each option (including options outstanding on the Amendment Effective
Date) shall contain the following terms and conditions, to the extent
applicable:
(a) No option shall be exercisable after the expiration of ten (10)
years from the date it was granted.
(b) The exercise price of each option shall be one hundred percent
(100%) of the fair market value of the stock subject to such option on the date
such option is granted.
(c) The purchase price of stock acquired pursuant to an option shall be
paid, to the extent permitted by applicable statutes and regulations, either (1)
in cash at the time the option is
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exercised, or (2) by delivery to the Company of shares of common stock of the
Company that have been held for the requisite period necessary to avoid a charge
to the Company's reported earnings and valued at the fair market value on the
date of exercise, or (3) by a combination of such methods of payment.
(d) An option shall not be transferable except by will or by the laws of
descent and distribution, and shall be exercisable during the lifetime of the
person to whom the option is granted only by such person or by his or her
guardian or legal representative, unless otherwise specified in the option, in
which case the option may be transferred upon such terms and conditions as are
set forth in the option, as the Board or the Committee shall determine in its
discretion, including (without limitation) pursuant to a "domestic relations
order" within the meaning of such rules, regulations or interpretations of the
Securities and Exchange Commission as are applicable for purposes of Section 16
of the Exchange Act. Notwithstanding the foregoing, the person to whom an option
is granted may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a third party who, in the event of the
death of the optionee, shall thereafter be entitled to exercise the option.
(e) Except as otherwise provided in this subparagraph 6(e), an option
shall vest with respect to each optionee in three (3) equal annual installments
commencing on the date one year after the date of grant of the option, provided
that the optionee has, during the entire one year period prior to such vesting
date, continuously served as a Non-Employee Director of the Company whereupon
such option shall become fully exercisable in accordance with its terms with
respect to that portion of the shares represented by that installment.
Notwithstanding the foregoing:
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(1) An option granted on the Amendment Effective Date pursuant to
subparagraph 5(c) shall vest, subject to the service conditions specified above,
on the third anniversary of the optionee's Preceding Option as to 3,333 shares
and on the second anniversary of the optionee's Preceding Option as to the
remaining balance of the shares in excess of 3,333.
(2) In the event of the voluntary resignation from the Board of
Directors or the death of a Non-Employee Director, his or her options shall vest
in full and shall be exercisable in their entirety, provided that the optionee
has, during the entire five-year period prior to such voluntary resignation or
death, continuously served as a Non-Employee Director of the Company.
(f) The Company may require any optionee, or any person to whom an
option is transferred under subparagraph 6(d), as a condition of exercising any
such option: (1) to give written assurances satisfactory to the Company as to
the optionee's knowledge and experience in financial and business matters; and
(2) to give written assurances satisfactory to the Company stating that such
person is acquiring the stock subject to the option for such person's own
account and not with any present intention of selling or otherwise distributing
the stock. These requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (i) the issuance of the shares upon the
exercise of the option has been registered under a then-currently-effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), or (ii), as to any particular requirement, a determination is
made by counsel for the Company that such requirement need not be met in the
circumstances under the then-applicable securities laws.
(g) Notwithstanding anything to the contrary contained herein, an option
may not be exercised unless the shares issuable upon exercise of such option are
then registered under the
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Securities Act or, if such shares are not then so registered, the Company has
determined that such exercise and issuance would be exempt from the registration
requirements of the Securities Act.
7. COVENANTS OF THE COMPANY.
(a) During the terms of the options granted under the Plan, the Company
shall keep available at all times the number of shares of stock required to
satisfy such options.
(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the options granted under the
Plan; provided, however, that this undertaking shall not require the Company to
register under the Securities Act either the Plan, any option granted under the
Plan, or any stock issued or issuable pursuant to any such option. If the
Company is unable to obtain from any such regulatory commission or agency the
authority which counsel for the Company deems necessary for the lawful issuance
and sale of stock under the Plan, the Company shall be relieved from any
liability for failure to issue and sell stock upon exercise of such options.
8. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to options granted under the
Plan shall constitute general funds of the Company.
9. MISCELLANEOUS.
(a) Neither an optionee nor any person to whom an option is transferred
under subparagraph 6(d) shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares subject to such option unless
and until such person has satisfied all requirements for exercise of the option
pursuant to its terms.
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(b) Nothing in the Plan or in any instrument executed pursuant thereto
shall confer upon any Non-Employee Director any right to continue in the service
of the Company or any Affiliate or shall affect any right of the Company, its
Board or stockholders or any Affiliate to terminate the service of any
Non-Employee Director with or without cause.
(c) No Non-Employee Director, individually or as a member of a group,
and no beneficiary or other person claiming under or through him or her, shall
have any right, title or interest in or to any option reserved for the purposes
of the Plan except as to such shares of common stock, if any, as shall have been
reserved for him or her pursuant to an option granted to him or her.
(d) In connection with each option made pursuant to the Plan, it shall
be a condition precedent to the Company's obligation to issue or transfer shares
to a Non-Employee Director, or an affiliate of such Non-Employee Director, or to
evidence the removal of any restrictions on transfer, that such Non-Employee
Director make arrangements satisfactory to the Company to insure that the amount
of any federal or other withholding tax required to be withheld with respect to
such sale or transfer, or such removal or lapse, is made available to the
Company for timely payment of such tax.
10. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or subject
to any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or otherwise), the Plan and outstanding
options will be appropriately adjusted in the class(es) and maximum number of
shares subject to
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the Plan and the class(es) and number of shares and price per share of stock
subject to outstanding options.
(b) In the event of: (1) a dissolution or liquidation of the Company or
sale of all or substantially all of the assets of the Company; (2) a
reorganization, merger or consolidation with respect to which persons who were
the stockholders of the Company immediately prior to such reorganization, merger
or consolidation do not, immediately thereafter, own more than 50% of the
Combined Voting Power (as defined below) of the reorganized, merged or
consolidated company's then outstanding voting securities; (3) the acquisition
(other than from the Company) by any person, entity or "group," within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (excluding for this
purpose, the Company or its Affiliates, or any employee benefit plan of the
Company or its Affiliates), of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 50% or more of either (i) the then
outstanding shares of common stock of the Company or (ii) the Combined Voting
Power; or (4) individuals who, as of the Amendment Effective Date constitute the
Board (the "Incumbent Board") ceasing for any reason to constitute at least a
majority of the Board, then the time during which such options may be exercised
shall be automatically accelerated and such options shall be exercisable in
their entirety immediately prior to such event. In addition, in the case of a
dissolution or liquidation of the Company, or a reorganization, merger or
consolidation in which the Company is not the surviving corporation or in which
more than fifty percent (50%) of the shares of the Company's common stock
outstanding immediately preceding such transaction are converted into other
property (whether in the form of securities, cash or otherwise), at the sole
discretion of the Board and to the extent permitted by applicable law, any
surviving corporation may elect to assume such options outstanding under the
Plan or may substitute similar options
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for those outstanding under the Plan, and any options outstanding hereunder will
terminate if not exercised or assumed prior to such event. For purposes of this
subparagraph 10(b), "Combined Voting Power" means the combined voting power of
the Company's then outstanding securities ordinarily (and apart from rights
accruing under special circumstances) having the right to vote at elections of
directors; and any person who becomes a director subsequent to the Amendment
Effective Date whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board (other than an election or nomination of an
individual whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the directors of the
Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) shall be considered as though such person were a member
of the Incumbent Board.
11. AMENDMENT OF THE PLAN.
(a) The Board at any time, and from time to time, may amend the Plan.
Except as provided in paragraph 10 relating to adjustments upon changes in
stock, no amendment shall be effective unless approved by the stockholders of
the Company within twelve (12) months before or after the adoption of the
amendment, where the amendment will:
(1) Increase the number of shares reserved for options under the
Plan;
(2) Modify the requirements as to eligibility for participation
in the Plan (to the extent such modification requires stockholder approval in
order for the Plan to comply with the requirements of Rule 16b-3 promulgated
under the Exchange Act); or
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(3) Modify the Plan in any other way if such modification
requires stockholder approval in order for the Plan to comply with the
requirements of Rule 16b-3 promulgated under the Exchange Act.
(b) Rights and obligations under any option granted before any amendment
of the Plan shall not be altered or impaired by such amendment of the Plan
unless (i) the Company requests the consent of the person to whom the option was
granted and (ii) such person consents in writing.
12. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate on February 27, 2002. No options may
be granted under the Plan while the Plan is suspended or after it is terminated.
(b) Rights and obligations under any option granted while the Plan is in
effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom the option was granted.
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13. EFFECTIVE DATE OF PLAN; CONDITIONS OF EXERCISE.
(a) The Plan shall become effective upon adoption by the Board of
Directors, subject to the condition subsequent that the Plan is approved by the
stockholders of the Company.
(b) No option granted under the Plan shall be exercised or exercisable
unless and until the condition of subparagraph 13(a) above has been met.
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EXHIBIT 10.5
CAERE CORPORATION
1997 NON-OFFICER STOCK OPTION PLAN
ADOPTED BY THE BOARD ON MAY 5, 1997
1. PURPOSES.
(a) The purpose of the Plan is to provide a means by which selected
Employees of and Consultants to the Company, and its Affiliates, may be given an
opportunity to benefit from increases in value of the stock of the Company
through the granting of Nonstatutory Stock Options, as defined below.
(b) The Company, by means of the Plan, seeks to retain the services of
persons (other than Directors and Employees serving as Officers of the Company
or its Affiliates) who are now Employees of or Consultants to the Company or its
Affiliates, to secure and retain the services of new Employees and Consultants,
and to provide incentives for such persons to exert maximum efforts for the
success of the Company and its Affiliates.
(c) The Company intends that the options issued under the Plan not be
incentive stock options as that term is used in Section 422 of the code.
2. DEFINITIONS.
(a) "AFFILIATE" means any parent corporation or subsidiary corporation,
whether now or hereafter existing, as those terms are defined in Sections 424(e)
and (f), respectively, of the Code.
(b) "BOARD" means the Board of Directors of the Company.
(c) "CODE" means the Internal Revenue Code of 1986, as amended.
(d) "COMMITTEE" means a Committee appointed by the Board in accordance
with subsection 3(c) of the Plan.
(e) "COMPANY" means Caere Corporation, a Delaware corporation.
(f) "CONSULTANT" means any person, including an advisor, engaged by the
Company or an Affiliate to render consulting services and who is compensated for
such services, provided that the term "Consultant" shall not include those
persons who render services as a Director.
(g) "CONTINUOUS STATUS AS AN EMPLOYEE OR CONSULTANT" means that the
service of an individual to the Company, whether as an Employee or Consultant,
is not interrupted or terminated. The Board, in its sole discretion, may
determine whether Continuous Status as an Employee or Consultant shall be
considered interrupted in the case of: (i) any leave of absence
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approved by the Board, including sick leave, military leave, or any other
personal leave; or (ii) transfers between locations of the Company or between
the Company, Affiliates or their successors.
(h) "DIRECTOR" means a member of the Board.
(i) "DISABILITY" means permanent and total disability as defined in
Section 22(e)(3) of the Code.
(j) "EMPLOYEE" means any person employed by the Company or any Affiliate
of the Company. Neither service as a Director nor payment of a director's fee by
the Company shall be sufficient to constitute "employment" by the Company.
(k) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(l) "FAIR MARKET VALUE" means, as of any date, the value of the common
stock of the Company, determined as follows:
(1) If the common stock is listed on any established stock
exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap Market,
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 market (or the exchange or market with the greatest volume
of trading in the Company's 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 Board deems reliable.
(2) In the absence of such markets for the common stock,
the Fair Market Value shall be determined in good faith by the Board.
(m) "NONSTATUTORY STOCK OPTION" means an Option not intended to qualify
as an incentive stock option pursuant to Section 422 of the Code and the
regulations promulgated thereunder.
(n) "OFFICER" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(o) "OPTION" means a stock option granted pursuant to the Plan.
(p) "OPTION AGREEMENT" means a written agreement between the Company and
an Optionee evidencing the terms and conditions of an individual Option grant.
Each Option Agreement shall be subject to the terms and conditions of the Plan.
(q) "OPTIONEE" means an Employee or Consultant who holds an outstanding
Option.
(r) "PLAN" means this 1997 Non-Officer Equity Incentive Plan.
3. ADMINISTRATION.
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(a) The Plan shall be administered by the Board unless and until the
Board delegates administration to a Committee, as provided in subsection 3(c).
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the persons
eligible under the Plan shall be granted options; when and how each option shall
be granted; the provisions of each option granted (which need not be identical),
including the time or times when a person shall be permitted to receive stock
pursuant to an option; and the number of shares with respect to which an option
shall be granted to each such person.
(2) To construe and interpret the Plan and options granted
under it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Option Agreement, in a
manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.
(3) To amend the Plan or an option as provided in Section
11.
(4) Generally, to exercise such powers and to perform such
acts as the Board deems necessary or expedient to promote the best interests of
the Company which are not in conflict with the provisions of the Plan.
(c) The Board may delegate administration of the Plan to a committee
composed of one or more members of the Board (the "Committee"). If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board (and references in this Plan to the Board shall thereafter be to
the Committee), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan.
4. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of Section 10 relating to adjustments upon
changes in stock, the number of shares of stock that may be issued pursuant to
options shall not exceed in the aggregate two hundred fifty thousand (250,000)
shares of the Company's common stock. If any Option shall for any reason expire
or otherwise terminate, in whole or in part, without having been exercised in
full, the stock not acquired under such Option shall revert to and again become
available for issuance under the Plan.
(b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.
5. ELIGIBILITY.
Options may be granted only to Employees or Consultants who are not (i)
Officers, (ii) Directors, or (iii) then subject to Section 16 of the Exchange
Act.
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6. OPTION PROVISIONS.
Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. The provisions of separate
Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:
(a) TERM. No Option shall be exercisable after the expiration of ten
(10) years from the date it was granted.
(b) PRICE. The exercise price of each Nonstatutory Stock Option shall be
not less than eighty-five percent (85%) of the Fair Market Value of the stock
subject to the Option on the date the Option is granted.
(c) CONSIDERATION. The purchase price of stock acquired pursuant to an
Option shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the time the Option is exercised, or (ii) at
the discretion of the Board or the Committee, at the time of the grant of the
Option, (A) by delivery to the Company of other common stock of the Company, (B)
according to a deferred payment arrangement, (which may include, without
limiting the generality of the foregoing, the use of other common stock of the
Company) with the person to whom the Option is granted or to whom the Option is
transferred pursuant to subsection 6(d), except that payment of the common
stock's "par value" (as defined in the Delaware General Corporation Law) shall
not be made by deferred payment or other arrangement, or (C) in any other form
of legal consideration that may be acceptable to the Board.
In the case of any deferred payment arrangement, interest shall be
payable at least annually and shall be charged at the minimum rate of interest
necessary to avoid the treatment as interest, under any applicable provisions of
the Code, of any amounts other than amounts stated to be interest under the
deferred payment arrangement.
(d) TRANSFERABILITY. An Option shall not be transferable except by will
or by the laws of descent and distribution, and shall be exercisable during the
lifetime of the person to whom the Option is granted only by such person, unless
otherwise specified in the Option Agreement, in which case the option may be
transferred upon such terms and conditions as are set forth in the Option
Agreement, as the Board or Committee shall determine in its discretion,
including (without limitation) pursuant to a "domestic relations order" within
the meaning of such rules, regulations or interpretations of the Exchange Act.
Notwithstanding the foregoing, the person to whom the Option is granted may, by
delivering written notice to the Company, in a form satisfactory to the Company,
designate a third party who, in the event of the death of the Optionee, shall
thereafter be entitled to exercise the Option.
(e) VESTING. The total number of shares of stock subject to an Option
may, but need not, be allotted in periodic installments (which may, but need
not, be equal). The Option Agreement may provide that from time to time during
each of such installment periods, the Option may become exercisable ("vest")
with respect to some or all of the shares allotted to that period, and may be
exercised with respect to some or all of the shares allotted to such period
and/or any prior period as to which the Option became vested but was not fully
exercised. The
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Option may be subject to such other terms and conditions on the time or times
when it may be exercised (which may be based on performance or other criteria)
as the Board may deem appropriate. The vesting provisions of individual Options
may vary. The provisions of this subsection 6(e) are subject to any Option
provisions governing the minimum number of shares as to which an Option may be
exercised.
(f) 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 (to the extent that the Optionee was entitled to exercise it as of
the date of termination) but only within such period of time ending on the
earlier of (i) the date three (3) months following the termination of the
Optionee's Continuous Status as an Employee or Consultant (or such longer or
shorter period specified in the Option Agreement), or (ii) the expiration of the
term of the 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 revert to
the Plan. If, after termination, the Optionee does not exercise his or her
Option within the time specified in the Option Agreement, the Option shall
terminate, and the shares covered by such Option shall revert to and again
become available for issuance under the Plan.
An Optionee's Option Agreement may also provide that if the exercise of
the Option following the termination of the Optionee's Continuous Status as an
Employee or Consultant (other than upon the Optionee's death or disability)
would result in liability under Section 16(b) of the Exchange Act, then the
Option shall terminate on the earlier of (i) the expiration of the term of the
Option set forth in the Option Agreement, or (ii) the tenth (10th) day after the
last date on which such exercise would result in such liability under Section
16(b) of the Exchange Act. Finally, an Optionee's Option Agreement may also
provide that if the exercise of the Option following the termination of the
Optionee's Continuous Status as an Employee or Consultant (other than upon the
Optionee's death or disability) would be prohibited at any time solely because
the issuance of shares would violate the registration requirements under the
Act, then the Option shall terminate on the earlier of (i) the expiration of the
term of the Option set forth in the first paragraph of this subsection 6(f), or
(ii) the expiration of a period of three (3) months after the termination of the
Optionee's Continuous Status as an Employee or Consultant during which the
exercise of the Option would not be in violation of such registration
requirements.
(g) 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 (to the extent that the
Optionee was entitled to exercise it as of the date of termination), but only
within such period of time ending on the earlier of (i) one (1) year following
such termination (or such longer or shorter period specified in the Option
Agreement), or (ii) the expiration of the term of the 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 revert to and again become available for issuance
under the Plan. If, after termination, the Optionee does not exercise his or her
Option within the time specified herein, the Option shall terminate, and the
shares covered by such Option shall revert to and again become available for
issuance under the Plan.
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(h) DEATH OF OPTIONEE. In the event of the death of an Optionee during,
or within a period specified in the Option Agreement after the termination of,
the Optionee's Continuous Status as an Employee or Consultant, the Option may be
exercised (to the extent the Optionee was entitled to exercise the Option as of
the date of death) by the Optionee's estate, by a person who acquired the right
to exercise the Option by bequest or inheritance, but only within the period
ending on the earlier of (i) the date eighteen (18) months following the date of
death (or such longer or shorter period specified in the Option Agreement), or
(ii) 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 revert to and again become available for issuance under the Plan.
If, after death, the Option is not exercised within the time specified herein,
the Option shall terminate, and the shares covered by such Option shall revert
to and again become available for issuance under the Plan.
(i) EARLY EXERCISE. The Option may, but need not, include a provision
whereby the Optionee may elect at any time while an Employee or Consultant to
exercise the Option as to any part or all of the shares subject to the Option
prior to the full vesting of the Option. Any unvested shares so purchased may be
subject to a repurchase right in favor of the Company or to any other
restriction the Board determines to be appropriate.
7. COVENANTS OF THE COMPANY.
(a) During the terms of the options, the Company shall keep available at
all times the number of shares of stock required to satisfy such options.
(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the Option; provided, however,
that this undertaking shall not require the Company to register under the
Securities Act of 1933, as amended (the "Securities Act") either the Plan, any
Option or any stock issued or issuable pursuant to any such Option. If, after
reasonable efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority which counsel for the Company deems necessary
for the lawful issuance and sale of stock under the Plan, the Company shall be
relieved from any liability for failure to issue and sell stock upon exercise of
such options unless and until such authority is obtained.
8. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to options shall constitute
general funds of the Company.
9. MISCELLANEOUS.
(a) The Board shall have the power to accelerate the time at which an
option may first be exercised or the time during which an option or any part
thereof will vest pursuant to subsection 6(e), notwithstanding the provisions in
the Option stating the time at which it may first be exercised or the time
during which it will vest.
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(b) Neither an Employee or Consultant, nor any person to whom an option
is transferred under subsection 6(d) shall be deemed to be the holder of, or to
have any of the rights of a holder with respect to, any shares subject to such
Option unless and until such person has satisfied all requirements for exercise
of the Option pursuant to its terms.
(c) Nothing in the Plan or any instrument executed or Option granted
pursuant thereto shall confer upon any Employee, Consultant or other holder of
options any right to continue in the employ of the Company or any Affiliate (or
to continue acting as a Consultant) or shall affect the right of the Company or
any Affiliate to terminate the employment of any Employee with or without cause,
or to terminate the relationship of any Consultant in accordance with the terms
of that Consultant's agreement with the Company or Affiliate to which such
Consultant is providing services.
(d) SECURITIES LAW COMPLIANCE. The Company may require any person to
whom an option is granted, or any person to whom an option is transferred
pursuant to subsection 6(d), as a condition of exercising or acquiring stock
under any Option, (1) to give written assurances satisfactory to the Company as
to such person's knowledge and experience in financial and business matters
and/or to employ a purchaser representative reasonably satisfactory to the
Company who is knowledgeable and experienced in financial and business matters,
and that he or she is capable of evaluating, alone or together with the
purchaser representative, the merits and risks of exercising the Option; and (2)
to give written assurances satisfactory to the Company stating that such person
is acquiring the stock subject to the Option for such person's own account and
not with any present intention of selling or otherwise distributing the stock.
The foregoing requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (i) the issuance of the shares upon the
exercise or acquisition of stock under the Option has been registered under a
then currently effective registration statement under the Securities Act, or
(ii) as to any particular requirement, a determination is made by counsel for
the Company that such requirement need not be met in the circumstances under the
then applicable securities laws. The Company may require the holder of the
Option to provide such other representations, written assurances or information
which the Company shall determine is necessary, desirable or appropriate to
comply with applicable securities and other laws as a condition of granting an
option to such person or permitting the holder of the Option to exercise the
Option. The Company may, upon advice of counsel to the Company, place legends on
stock certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws, including, but
not limited to, legends restricting the transfer of the stock.
(e) WITHHOLDING. To the extent provided by the terms of an option
Agreement, the person to whom an option is granted may satisfy any federal,
state or local tax withholding obligation relating to the exercise or
acquisition of stock under an option by any of the following means or by a
combination of such means: (1) tendering a cash payment; (2) authorizing the
Company to withhold shares from the shares of the common stock otherwise
issuable to the participant as a result of the exercise or acquisition of stock
under the Option; or
(3) delivering to the Company owned and unencumbered shares of the
common stock of the Company.
10. ADJUSTMENTS UPON CHANGES IN STOCK.
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(a) If any change is made in the stock subject to the Plan, or subject
to any Option, without the receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by the
Company), the Plan will be appropriately adjusted in the class(es) and the
maximum number of shares subject to the Plan pursuant to subsection 4(a), and
the outstanding options will be appropriately adjusted in the class(es) and
number of shares and price per share of stock subject to such outstanding
options. Such adjustments shall be made by the Board or the Committee, the
determination of which shall be final, binding and conclusive. (The conversion
of any convertible securities of the Company shall not be treated as a
"transaction not involving the receipt of consideration by the Company.")
(b) In the event of a Change in Control, (1) any surviving or acquiring
corporation shall assume Options outstanding under the Plan or shall substitute
similar Options for those outstanding under the Plan, or (2) in the event any
surviving or acquiring corporation refuses to assume such Options or to
substitute similar Options for those outstanding under the Plan, (a) with
respect to Options held by persons then performing services as Employees or
Consultants, the vesting of such Options and the time during which such Options
may be exercised shall be accelerated prior to such event and the Options
terminated if not exercised after such acceleration and at or prior to such
event, and (b) with respect to any other Options outstanding under the Plan,
such Options shall be terminated if not exercised prior to such event.
(c) For purposes of this Plan, "Change in Control" means: (1) a
dissolution, liquidation, or sale of all or substantially all of the assets of
the Company, (2) a merger or consolidation in which the Company is not the
surviving corporation, (3) a reverse merger in which the Company is the
surviving corporation but Shares outstanding immediately preceding the merger
are converted by virtue of the merger into other property, whether in the form
of securities, cash or otherwise, or (4) the acquisition by any person, entity
or group within the meaning of Section 13(d) or 14(d) of the Exchange Act, or
any comparable successor provisions (excluding any employee benefit plan, or
related trust, sponsored or maintained by the Company or any Affiliate of the
Company) of the beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act, or comparable successor rule) of securities
of the Company representing at least fifty percent (50%) of the combined voting
power entitled to vote in the election of directors.
11. AMENDMENT OF THE PLAN AND OPTIONS.
(a) The Board at any time, and from time to time, may amend the Plan.
(b) The Board, in its sole discretion, may submit the Plan and/or any
amendment to the Plan for stockholder approval.
(c) It is expressly contemplated that the Board may amend the Plan in
any respect the Board deems necessary or advisable to provide those eligible
with the maximum benefits provided or to be provided under the provisions of the
Code and the regulations promulgated thereunder.
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(d) Rights and obligations under any Option granted before amendment of
the Plan shall not be impaired by any amendment of the Plan unless (i) the
Company requests the consent of the person to whom the Option was granted and
(ii) such person consents in writing.
(e) The Board at any time, and from time to time, may amend the terms of
any one or more Option; provided, however, that the rights and obligations under
any Option shall not be impaired by any such amendment unless (i) the Company
requests the consent of the person to whom the Option was granted and (ii) such
person consents in writing.
12. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate at the time all of the shares
reserved for issuance under the Plan have been issued. No options may be granted
under the Plan while the Plan is suspended or after it is terminated.
(b) Rights and obligations under any Option granted while the Plan is in
effect shall not be impaired by suspension or termination of the Plan, except
with the written consent of the person to whom the Option was granted.
13. EFFECTIVE DATE OF PLAN.
The Plan shall become effective on May 5, 1997.
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Exhibit 10.6
CALERA RECOGNITION SYSTEMS, INC.
1993 STOCK OPTION PLAN
(As adopted by the Board of Directors
on June 8, 1993 and approved by the shareholders
on June 8, 1993 and amended on October 28, 1993)
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 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 Code or "non-statutory stock options", at the
discretion of the Administrator and as reflected in the terms of the written
option agreement.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" shall mean the Board or any of its committees
as shall be administering the Plan, in accordance with Section 4 hereof.
(b) "Applicable Laws" shall mean the legal requirements relating
to the administration of stock option and equity incentive plans under
applicable state corporate and securities laws and under the Code.
(c) "Board" shall mean the Board of Directors of the Company.
(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 CALERA RECOGNITION SYSTEMS, INC., a
California corporation.
(g) "Committee" shall mean a Committee appointed by the Board of
Directors in accordance with paragraph (a) of Section 4 of the Plan.
(h) "Consultant" shall mean 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 and any director of the Company whether
compensated for such service or not, provided, however, that if and in the
event that the Company registers any class of its equity securities pursuant to
the Exchange Act, the term Consultant shall thereafter not include directors
who are not compensated for their consulting services or who are paid only
standard directors' compensation by the Company. The term "Consultant" shall
include a sales representative only if such person renders additional
<PAGE> 2
services other than as a sale representative to the Company, as determined by
the Board, and is compensated for such services.
(i) "Continuous Status as an Employee or Consultant" shall mean
that the employment or consulting relationship with the Company is not
terminated or interrupted. Continuous Status as 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, however, that such leave
is for a period of not more than ninety (90) days or reemployment upon the
expiration of such leave is guaranteed by contract or statute.
(j) "Director" shall mean a member of the Board.
(k) "Employee" shall mean any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of standard directors' compensation by the Company shall not be
sufficient to constitute "employment" by the Company.
(l) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(m) "Incentive Stock Option" shall mean an Option that qualifies
as an incentive stock option within the meaning of Section 422 of the Code.
(n) "Nonstatutory Stock Option" shall mean an Option that does not
qualify as an Incentive Stock Option.
(o) "Officer" shall mean an "officer" as defined in Rule 16a-1(f)
promulgated under the Exchange Act.
(p) "Option" shall mean a stock option granted pursuant to the
Plan.
(q) "Option Agreement" shall mean the written agreement
evidencing Options granted under the Plan.
(r) "Optioned Stock" shall mean the Common Stock subject to an
Option.
(s) "Optionee" shall mean an Employee or Consultant who receives
an Option.
(t) "Parent" shall mean a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(u) "Plan" shall mean this 1993 Stock Option Plan.
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(v) "Share" shall mean a share of Common Stock, as adjusted in
accordance with Section 11 of the Plan.
(w) "Subsidiary" shall mean a "subsidiary corporation", whether
now or hereafter existing, as defined in Section 424(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 3,000,000 shares of Common Stock. The Shares may be
authorized, but unissued, or reacquired 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 or a
Committee, as described herein.
(i) Subject to subsection (ii) of this Section 4(a), the
Board may administer the Plan itself or may appoint a Committee consisting of
not less than two members of the Board to serve as Administrator and administer
the Plan, subject to such terms and conditions as the Board may prescribe.
Members of the Administrator who are either eligible for Options or have been
granted Options may vote on any matters affecting the administration of the
Plan or the grant of any Options pursuant to the Plan, except that no such
member shall act upon the granting of an Option to himself or herself, but any
such member may be counted in determining the existence of a quorum at any
meeting of the Administrator during which action is taken with respect to the
granting of Options to him or her.
(ii) Notwithstanding the foregoing subsection (i), if and in
the event the Company registers any class of its equity securities pursuant to
Section 12 of the Exchange Act, the Plan shall, from the effective date of such
registration until six months after the termination of such registration, be
administered by (A) the Board, if the Board may administer the Plan in
compliance with the rules governing a plan intended to qualify as a
discretionary grant or award plan under Rule 16b-3, or (B) a Committee appointed
by the Board to administer the Plan, which Committee shall be constituted (1) in
such a manner as to permit the Plan to comply with the rules governing a plan
intended to qualify as a discretionary grant or award plan under Rule 16b-3 and
(II) in such a manner as to satisfy the Applicable Laws.
(iii) In the event that a Committee is appointed pursuant to
subsection (i) or (ii) of this Section 4, 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
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Committee and appoint additional members thereof, remove members (with or
without cause) and appoint additional members in substitution therefor, 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 (ii), to the extent
permitted by Rule 16b-3 as it applies to a plan intended to qualify thereunder
as a discretionary grant or award plan.
(b) Powers of the Administrator. Subject to the provisions of
the Plan, the Administrator shall have the authority, in its discretion: (i) to
grant Incentive Stock Options 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 and Consultants to whom, and the time or times at which, Options
shall be granted and the number of shares to be subject to 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 conditions of each
Option granted (which need not be identical) and, subject to Section 13 hereof,
to modify or amend each Option; (viii) to accelerate or, subject to Section 13
hereof, to defer the exercise date of any Option; (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 Administrator; (x) to reduce, in
the Administrator's sole discretion, the exercise price of any Option to the
then current fair market value, as determined in accordance with Section 8(b),
if the fair market value of the Common Stock covered by such Option shall have
declined since the date the Option was granted; (xi) subject to Section 9
hereof, to extend the period during which an Option may be exercised by the
Optionee following termination of Continuous Status as an Employee or
Consultant beyond the period set forth in the Option Agreement evidencing such
Option; and (xii) to make all other determinations deemed necessary or
advisable for the administration of the Plan.
(c) Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees and any other holders of any Options granted under the
Plan.
5. Eligibility; Type of Options; No Employment Rights.
(a) Eligibility. Nonstatutory Stock Options may be granted 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
otherwise eligible, be granted additional Options.
(b) Type of Options. Each Option shall be designated in the
Option Agreement as either an Incentive Stock Option or a Nonstatutory Stock
Option. However, notwithstanding such designation, to the extent that the
aggregate fair market value of the Shares with respect to which options
designated as incentive stock options are exercisable for the first time by any
Optionee
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during any calendar year (under all plans of the Company or any Parent or
Subsidiary) exceeds $100,000, such excess options shall be treated as
nonstatutory stock options. For purposes of this Section 5(b), incentive stock
options shall be taken into account in the order in which they were granted,
and the fair market value of the Shares shall be determined as of the time the
option with respect to such Shares is granted.
(c) No Right to Continued Service. 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 or her right or the Company's right to terminate his or her employment
or consulting relationship at any time, with or without cause. The vesting of
Shares pursuant to an Option is earned only by continuing service as an
Employee or Consultant and not through the act of being hired, being granted an
Option or acquiring Shares thereunder.
6. Duration of Plan. The Plan shall become effective upon the earlier
to occur of its adoption by the Board or its approval by the affirmative vote
of the holders of a majority of the outstanding shares of the Company's stock
entitled to vote on the adoption of the Plan and present (or represented) at a
duly held meeting of the shareholders. It shall continue in effect for a term
of ten (10) years unless sooner terminated under Section 13 of the Plan.
7. Term of Options. The term of each Option shall be ten (10) years
from the date of grant thereof or such shorter term as may be provided in the
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 "10% Shareholder"), 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 Option Agreement.
8. Exercise Price and Consideration.
(a) Exercise Price. 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, is a 10% Shareholder, 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 any Employee, the per Share exercise
price shall be no less than 100% of the fair market value per Share on the date
of grant.
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(ii) In the case of a Nonstatutory Stock Option
(A) granted to an Employee or Consultant who, at the
time of the grant of such Option, is a 10% Shareholder, the per Share exercise
price shall be no less than 110% of the Fair Market Value per Share on the date
of the grant.
(B) granted to any Employee or Consultant, the per
Share exercise price shall be no less than 85% of the fair market value per
Share on the date of grant.
(b) Fair Market Value. The fair market value shall be determined
by the Administrator in good faith and in its discretion; provided, however,
that if there is a public market for the Common Stock, the fair market value of
Common Stock shall be determined as follows:
(i) 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, its fair market value shall be the closing or last
sale price for such stock (or the closing bid, if no sales were reported, as
quoted on such exchange or system) for the last market trading day that ended
prior to the time of determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable;
(ii) 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, its fair market value
shall be the mean between the high bid and low asked prices for the Common
Stock for the last market trading day that ended prior to the time of
determination.
(c) Form of Consideration. 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 Administrator and may consist entirely of
(i) cash, (ii) check, (iii) promissory note, (iv) other Shares which (x) in the
case of Shares acquired upon exercise of an option, either have been owned by
the Optionee for more than six months on the date of surrender or were not
acquired, directly or indirectly, from the Company, 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, (v) delivery of a properly
executed exercise notice together with such other documentation as the
Administrator and the broker, if applicable, shall require to effect an
exercise of the Option and delivery to the Company of the sale or loan proceeds
required to pay the exercise price, or (vi) such other consideration and method
of payment for the issuance of Shares to the extent permitted under Sections
408 and 409 of the California General Corporation Law. In making its
determination as to the type of consideration to accept, the Administrator
shall consider if acceptance of such consideration may be reasonably expected
to benefit the Company.
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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 are determined by the Administrator and set forth in the Option Agreement,
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 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 Administrator, 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.
An Option may not be exercised for a fraction of a Share.
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. In the
event of termination of an Optionee's Continuous Status as an Employee or
Consultant, such Optionee may, but only within thirty (30) days (or such other
period of time, not exceeding twelve (12) months, as is determined by the
Administrator) after the date of such termination (but in no event later than
the date of expiration of the term of such Option as set forth in the Option
Agreement), exercise any Option held to the extent that such Optionee was
entitled to exercise it at the date of such termination. To the extent that the
Optionee was not entitled to exercise the Option at the date of such
termination, or if the Optionee does not exercise such Option (which he or she
was entitled to exercise) within the time specified herein, the Option shall
terminate.
(c) Disability of Optionee. Notwithstanding the provisions of
Section 9(b) above, in the event an Optionee is unable to continue his or her
employment or consulting relationship with the Company as a result of his or
her disability, such Optionee may, but only within twelve (12) months from the
date of termination, exercise any Option held to the extent that such Optionee
was entitled to exercise it at the date of such termination. To the extent
that the Optionee was not entitled to exercise the Option at the date of
termination, or if the Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.
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(d) Death of Optionee. In the event of the death of an Optionee:
(i) during the term of the Option and while the Optionee is
an Employee or Consultant of the Company and has 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, but only as to (A) the number of Shares
subject to the Option as to which the right to exercise had accrued to the
Optionee a the date of death, plus (B) 50% of the number of Shares subject to
the Option as to which the right to exercise had not yet accrued to the Optionee
at the date of death; or
(ii) within thirty (30) days after the termination of
Continuous Status as an Employee or Consultant, 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, but only to the extent of the right to exercise that
had accrued at the date of termination.
(e) Rule 16b-3. Options granted to persons subject to Section 16
of the Exchange Act must comply with Rule 16b-3 and shall contain 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.
10. Non-Transferability of Options. Options may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will, by the laws of descent or 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, and may be exercised,
during the lifetime of the Optionee, only by the Optionee or by a transferee
permitted by this Section 10.
11. Adjustments Upon Changes in Capitalization or Merger.
(a) Changes in Capitalization. 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 issued shares of Common Stock resulting
from a stock split or the payment of a stock dividend with respect to 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 Administrator, whose determination in that
respect shall be final, binding and conclusive. Except as
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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) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify the
Optionee a least fifteen (15) days prior to such proposed action. To the extent
it has not been previously exercised, the Option will terminate immediately
prior to the consummation of such proposed action.
(c) Merger or Sale of Assets. In the event of a proposed merger
of the Company with or into another corporation, or the sale of all or
substantially all of the assets of the Company, the Option shall be assumed or
an equivalent option shall be substituted by the successor corporation or a
Parent or Subsidiary of such successor corporation. In the event that such
successor corporation refuses to assume the Option or to substitute an
equivalent option, the Optionee shall have the right to exercise the Option as
to the number of Shares which were exercisable immediately prior to such merger
or sale of assets. The Option shall be deemed to be assumed if, following the
merger or sale of assets, the Option confers the right to purchase, for each
share of Optioned Stock subject to the Option 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 of Common Stock held on the effective date of the
transaction (and if such holders were offered a choice of consideration, the
type of consideration chosen by the holders of a majority of the outstanding
shares of Common Stock); 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 of Directors may, with the consent of the
successor corporation and the Optionee, provide for the consideration to be
received upon exercise of 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; provided
further, that with respect to a sale of assets, the consideration per Share
shall be determined by dividing (x) the aggregate consideration paid to the
Company by the purchaser for the assets by (y) the number of Shares outstanding
on the closing date for such sale of assets, computed on an as-if-converted and
fully diluted basis. If the Administrator makes an Option fully exercisable in
lieu of assumption or substitution in the event of a merger or sale of assets,
the Administrator shall notify the Optionee that the Option shall be fully
exercisable for a period of thirty (30) days from the date of such notice, and
the Option will terminate upon the expiration of such period.
12. Time of Granting Options. The date of grant of an Option shall,
for all purposes, be the date on which the Administrator makes the
determination granting such Option. Notice of the determination shall be given
to each Employee and Consultant to whom an Option is so granted within a
reasonable time after the date of such grant.
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13. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan. In addition, to the extent necessary and
desirable to comply with Rule 16b-3 under the Exchange Act (but only at such
time as the Company has a class of its equity securities registered pursuant to
Section 12 of the Exchange Act), or with Section 422 of the Code (or any other
applicable law or regulation), the Company shall obtain shareholder approval of
any such Plan amendment in such a manner and to such a degree as is required.
(b) Effect of Amendment or Termination. Any such amendment,
alteration, suspension, or termination of the Plan shall not impair the rights
of any Optionee under any grant theretofore made, without his or her consent;
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 Company, which agreement must be in writing and signed by the Optionee and
the Company.
14. Conditions Upon Issuance of Shares.
(a) Compliance with Laws. 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 Exchange Act, the rules and regulations promulgated thereunder, and
the requirements of any stock exchange or quotation system upon which the Shares
may then be listed (or, if the Company's Common Stock is quoted on the NASDAQ
System or the NASDAQ National Market System, the rules of the National
Association of Securities Dealers, Inc.), and shall further subject to the
approval of counsel for the Company with respect to such compliance.
(b) Investment Representation. As a condition to the 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 well or
distribute each Shares if, in the opinion of counsel for the Company, such a
representation is required by any of the aforementioned relevant provisions of
law.
(c) Lack of Regulatory Authority. 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 failure to issued or sell such Shares as to which such requisite
authority shall not have been obtained.
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.
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16. Option Agreement. Options shall be evidenced by Option Agreements
in such form as the Administrator shall approve.
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 by the Board. Such shareholder approval
shall be obtained to the degree and in the manner required under applicable
state and federal law.
18. Information to Optionees and Purchasers. The Company shall provide
to each Optionee and to each individual who acquires Shares pursuant to the
Plan, during the period such Optionee or purchaser has one or more Options
outstanding, and, in the case of an individual who acquires Shares pursuant to
the Plan, during the period such individual owns such Shares, 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 to
key employees whose duties in connection with the Company assure their access
to equivalent information.
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Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 27, 1999, except for Note 3,
which is as of March 2, 1999, relating to the financial statements, which
appears on page 33 of ScanSoft, Inc.'s Annual Report on Form 10-K for the year
ended January 3, 1999. We also consent to the incorporation by reference of our
report dated January 27, 1999 relating to the financial statement schedule,
which appears on page 50 of such Annual Report on Form 10-K.
PRICEWATERHOUSECOOPERS LLP
San Jose, California
March 24, 2000
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