As filed with the Securities and Exchange Commission on May 1, 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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SIGA TECHNOLOGIES, INC.
(Exact name of issuer as specified in its charter)
------------------------------------
Delaware 13-364870
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
420 Lexington Avenue
Suite 620
New York, New York 10170
(Address of Principal Executive Offices) (Zip Code)
-----------------------------------
Siga Technologies, Inc.
Amended 1996 Incentive and Non-Qualified Stock Option Plan
(Full Title of the Plan)
-----------------------------------
Joshua D. Schein, Ph.D.
Chief Executive Officer
Siga Technologies, Inc.
420 Lexington Avenue, Suite 620
New York, New York 10170
(Name and address of agent for service)
(212) 672-9100
(Telephone number, including area code, of agent for service)
Copy to:
Lawrence B. Fisher, Esq.
Orrick, Herrington & Sutcliffe LLP
666 Fifth Avenue
New York, New York 10103
(212) 506-5000
(212) 506-5151 (Fax)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==========================================================================================================
Proposed
Proposed Maximum Amount of
Title of Securities Amount to be Maximum Offering Aggregate Registration
to be Registered Registered Price Per Share* Offering Price* Fee
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$0.0001 per Share 12,000 $2.00 $778,893 $206
45,000 4.63
<PAGE>
300,000 1.13
2,824 5.00
4,235 5.50
80,250 2.12
* Pursuant to Rule 457(h)(1), the proposed maximum offering price and the proposed maximum aggregate
offering price have been calculated on the basis of the exercise prices of options previously granted.
</TABLE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information *
Item 2. Registrant Information and Employee Plan Annual Information *
* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance
with Rule 428 under the Securities Act of 1933, as amended (the
"Securities Act"), and the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRAT
<PAGE>
ON STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed by Siga Technologies, Inc. (the
"Registrant") with the Securities and Exchange Commission (the
"Commission") are hereby incorporated by reference in this
Registration Statement:
(a) The audited financial statements of the Registrant contained
in the Registrant's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1999 (File No. 000-23047).
(b) The description of the Registrant's Common Stock contained
in the Registrant's Registration Statement on Form 8-A filed with the
Securities and Exchange Commission on September 5, 1997 (File No.
000-23047), including any subsequent amendment or report filed for
the purpose of updating that description.
In addition, all documents subsequently filed by the Registrant pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), prior to the filing of a post-effective
amendment indicating that all of the securities offered hereunder have been sold
or deregistering all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference in this Registration
Statement shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained herein or in any
subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
Item 4. Description of Securities
Inapplicable.
Item 5. Interests of Named Experts and Counsel
<PAGE>
The validity of the Common Stock offered hereby will be passed upon
for the Registrant by Orrick, Herrington & Sutcliffe LLP, New York,
New York.
Item 6. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers, as well as other
employees and individuals, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by any such person in connection with any
threatened, pending or completed actions, suits or proceedings in
which such person is made a party by reason of such person being or
having been a director, officer, employee or agent of the Registrant.
The Delaware General Corporation Law provides that Section 145 is not
exclusive of other rights to which those seeking indemnification may
be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise. The Registrant's Bylaws provide
for indemnification by the Registrant of its directors and officers
to the fullest extent permitted by the Delaware General Corporation
Law.
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a
director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach
of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)
for unlawful payments of dividends or unlawful stock repurchases,
redemptions or other distributions, or (iv) for any transaction from
which the director derived an improper personal benefit. The
Registrant's Certificate of Incorporation provides for
indemnification of its directors in connection with any proceeding to
the fullest extent permitted by law.
The Registrant has obtained directors' and officers' insurance
providing indemnification for certain of the Registrant's directors,
officers and employees for certain liabilities.
Item 7. Exemption From Registration Claimed
Inapplicable.
Item 8. Exhibits
Exhibit
Number Description
5.1 Opinion of Orrick, Herrington & Sutcliffe LLP.
23.1 Consent of Orrick, Herrington & Sutcliffe LLP (included
in Exhibit 5.1 to this Registration Statement).
23.2 Consent of PricewaterhouseCoopers LLP.
24 Power of Attorney (included on the signature
page of this Registration Statement).
<PAGE>
99.1 Amended 1996 Incentive and Non-Qualified Stock Option Plan.
Item 9. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of 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; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement; provided,
however, that paragraphs (a)(1)(i)and (a)(1)(ii) do not
apply if the information required to be included in a
post-effective amendment by those paragraphs is contained
in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has
<PAGE>
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
<PAGE>
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 New York, State of New York on the 1st of May, 2000.
SIGA TECHNOLOGIES, INC.
(Registrant)
By: /s/Joshua D. Schein
--------------------------------
Joshua D. Schein, Ph.D.
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS that each person whose signature appears
below each severally constitutes and appoints Joshua D. Schein and Judson A.
Cooper, and each of them, as true and lawful attorneys-in-fact and agents, with
full powers of substitution and resubstitution, for them in their name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as they might or could do in
person, hereby ratifying and confirming all which said attorneys-in-fact and
agents, or any of them, or their substitute or substitutes, may lawfully do, or
cause to be done by virtue thereof.
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
dates indicated.
Signature Capacity Date
/s/Joshua D. Schein Chief Executive Officer and Director
- ----------------------- (Principal Executive Officer) May 1, 2000
Joshua D. Schein
/s/Judson A. Cooper Chairman of the Board and
- ----------------------- Executive Vice President May 1, 2000
Judson A. Cooper
/s/Thomas Konatich Chief Financial Officer May 1, 2000
- ----------------------- (Principal Financial Officer)
Thomas Konatich
/s/Jeffrey Rubin
- ----------------------- Director April 26, 2000
Jeffrey Rubin
<PAGE>
/s/Scott Eagle Director May 1, 2000
- --------------------------
Scott Eagle
/s/Thomas N. Lanier Director May 1, 2000
- --------------------------
Thomas N. Lanier
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
5.1 Opinion of Orrick, Herrington & Sutcliffe LLP.
23.1 Consent of Orrick, Herrington & Sutcliffe LLP (included in Exhibit
5.1 to this Registration Statement).
23.2 Consent of Pricewaterhousecoopers LLP.
24 Power of Attorney (included on the signature page of this
Registration Statement).
99.1 Amended 1996 Incentive and Non-Qualified Stock Option Plan.
Exhibit 5.1
May 1, 2000
Siga Technologies, Inc.
420 Lexington Avenue - Suite 620
New York, New York 10170
Ladies and Gentlemen:
At your request, we are rendering this opinion in connection with the
proposed issuance pursuant to the Siga Technologies,, Inc. 1996 Amended and
Restated Incentive and Non-Qualified Stock Option Plan (the "Plan"), of up to
444,309 shares (the "Shares"), of common stock, $0.0001 par value ("Common
Stock") of Siga Technologies, Inc., a Delaware corporation (the "Company").
We have examined instruments, documents, and records which we deemed
relevant and necessary for the basis of our opinion hereinafter expressed. In
such examination, we have assumed the following: (a) the authenticity of
original documents and the genuineness of all signatures; (b) the conformity to
the originals of all documents submitted to us as copies; and (c) the truth,
accuracy and completeness of the information, representations and warranties
contained in the records, documents, instruments and certificates we have
reviewed.
Based on such examination, we are of the opinion that the Shares of
Common Stock issuable by the Company pursuant to the Plan are duly authorized
shares of Common Stock, and, when issued in accordance with the provisions of
the Plan, will be validly issued, fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
above referenced Registration Statement on Form S-8. In giving such consent, we
do not consider that we are "experts" within the meaning of such term as used in
the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission issued thereunder with respect to any part of
the Registration Statement, including this opinion, as an exhibit or otherwise.
Very truly yours,
/s/Orrick, Herrington & Sutcliffe LLP
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 18, 2000, except as to Note
13 which is as of March 30, 2000, relating to the financial statements, which
appear in Siga Technologies, Inc.'s Annual Report on Form 10-K for the year
ended December 31, 1999.
PricewaterhouseCoopers LLP
New York, New York
April 27, 2000
Exhibit 99.1
SIGA TECHNOLOGIES, INC.
a Delaware corporation
Amended 1996 Incentive and Non-Qualified Stock Option Plan
1. Purpose. The purposes of this Amended 1996 Incentive and Non-Qualified
Stock Option Plan are to attract and retain the best available personnel, to
provide additional incentive to the Employees, Consultants and Outside Directors
of Siga Technologies. Inc., a Delaware corporation (the "Company"), and to
promote the success of the Company's business.
Options granted hereunder may, consistent with the terms of this Plan, be
either Incentive Stock Options or Nonstatutory Stock Options, at the discretion
of the Committee and as reflected in the terms of the written option agreement.
2. Definitions. As used in this Plan, the following definitions shall apply:
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations promulgated thereunder.
(c) "Commission" means the United States Securities and Exchange
Commission.
(d) "Committee" means the Committee appointed by the Board or otherwise
determined in accordance with Section 4(a) of this Plan.
(e) "Common Stock" means the common stock of the Company, par value
$0.0001 per share.
(f) "Consultant" means any person who is engaged by the Company or any
Parent or Subsidiary to render consulting services and is compensated for such
consulting services; provided that the term Consultant shall not include
directors who are not compensated for their services or are paid only a
director's fee by the Company.
(g) "Continuous Status as an Employee, Consultant or Outside Director"
means the absence of any interruption or termination of service as an Employee,
Consultant or Outside Director, as applicable. Continuous Status as an Employee,
Consultant or Outside Director shall not be considered interrupted in the case
of sick leave or military leave, any other leave provided pursuant to a written
policy of the Company in effect at the time of determination, or any other leave
of absence approved by the Board or the Committee; provided that such leave is
for a period of not more than the greatest of (i) 90 days, (ii) the date of the
resumption of such service upon the expiration of such leave which is guaranteed
by contract or statute or is provided in a written policy of the Company which
was in effect upon the commencement of such leave, or (iii) such period of leave
as may be determined by the Board or the Committee in its sole discretion.
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(h) "Disinterested Person" shall have the meaning set forth in Rule 16b-3
(d) (3), or any successor definition adopted by the Commission, provided the
person is also an "outside director" under Section 162(m) of the Code.
(i) "Employee" means any person employed by the Company or any Parent or
Subsidiary of the Company, including employees who are also officers or
directors or both of the Company or any Parent or Subsidiary of the Company. The
payment of a director's fee by the Company shall not be sufficient to constitute
"employment" by the Company.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and the rules and regulations promulgated thereunder.
(k) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code, and the
rules and regulations promulgated thereunder.
(l) "Nonstatutory Stock Option" means an Option not intended to qualify as
an Incentive Stock Option.
(m) "Option" means a stock option granted pursuant to this Plan.
(n) "Optioned Stock" means the Common Stock subject to an Option.
(o) "Optionee" means an Employee, Consultant or Outside Director who
receives an Option.
(p) "Outside Director" means any member of the Board of Directors of the
Company who is not an Employee or Consultant.
(q) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(r) "Plan" means this 1996 Incentive and Non-Qualified Stock Option Plan,
as amended from time to time.
(s) "Rule 16b-3" means Rule 16b-3, as promulgated by the Commission under
Section 16(b) of the Exchange Act, as such rule is amended from time to time and
as interpreted by the Commission.
(t) "Securities Act" means the Securities Act of 1933, as amended from
time to time, and the rules and regulations promulgated thereunder.
(u) "Share" means a share of the Common Stock, as adjusted in accordance
with Section 10 of this Plan.
(v) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
2
<PAGE>
3. Scope of Plan. Subject to the provisions of Section 10 of this Plan, and
unless otherwise amended by the Board and approved by the stockholders of the
Company as required by law, the maximum aggregate number of Shares issuable
under this Plan is 1,500,000, and such Shares are hereby made available and
shall be reserved for issuance under this Plan. The Shares may be authorized but
unissued, or reacquired, Common Stock.
If an Option shall expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares subject thereto shall
(unless this Plan shall have terminated) become available for grants of other
Options under this Plan.
4. Administration of Plan.
(a) Procedure. This Plan shall be administered by the Committee appointed
pursuant to this Section 4(a). The Committee shall consist of two or more
Outside Directors appointed by the Board, but all Committee members must be
Disinterested Persons. If the Board fails to appoint such persons, the Committee
shall consist of all Outside Directors who are Disinterested Persons.
(b) Powers of Committee. Subject to Section 5(b) below and otherwise
subject to the provisions of this Plan, the Committee shall have full and final
authority in its discretion to: (i) grant Incentive Stock Options and
Nonstatutory Stock Options, (ii) determine, upon review of relevant information
and in accordance with Section 7 below, the Fair Market Value of the Common
Stock; (iii) determine the exercise price per share of Options to be granted, in
accordance with this Plan, (iv) 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 represented by each Option; (v) cancel, with the consent of the
Optionee, outstanding Options and grant new Options in substitution therefor;
(vi) interpret this Plan; (vii) accelerate or defer (with the consent of
Optionee) the exercise date of any Option; (viii) prescribe, amend and rescind
rules and regulations relating to this Plan; (ix) determine the terms and
provisions of each Option granted (which need not be identical) by which Options
shall be evidenced and, with the consent of the holder thereof, modify or amend
any provisions (including without limitation provisions relating to the exercise
price and the obligation of any Optionee to sell purchased Shares to the Company
upon specified terms and conditions) of any Option; (x) require withholding from
or payment by an Optionee of any federal, state or local taxes; (xi) appoint and
compensate agents, counsel, auditors or other specialists as the Committee deems
necessary or advisable; (xii) correct any defect or supply any omission or
reconcile any inconsistency in this Plan and any agreement relating to any
Option, in such manner and to such extent the Committee determines to carry out
the purposes of this Plan, and; (xiii) construe and interpret this Plan, any
agreement relating to any Option, and make all other determinations deemed by
the Committee to be necessary or advisable for the administration of this Plan.
A majority of the Committee shall constitute a quorum at any meeting, and
the acts of a majority of the members present, or acts unanimously approved in
writing by the entire Committee without a meeting, shall be the acts of the
Committee. A member of the Committee shall not participate in any decisions with
respect to himself under this Plan.
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<PAGE>
(c) Effect of Committee's Decision. All decisions, determinations and
interpretations of the Committee shall be final and binding on all Optionees and
any other holders of any Options Granted under this Plan.
5. Eligibility.
(a) Options may be Granted to any Employee, Consultant or Outside Director
as the Committee may from time to time designate, provided that (i) Incentive
Stock Options may be granted only to Employees, and (ii) Options may be granted
to Outside Directors only in accordance with the provisions of Section 5(b)
below. In selecting the individuals to whom Options shall be Granted, as well as
in determining the number of Options granted, the Committee shall take into
consideration such factors as it deems relevant in connection with accomplishing
the purpose of this Plan. Subject to the provisions of Section 3 above, an
Optionee may, if he or she is otherwise eligible, be granted an additional
Option or Options if the Committee shall so determine.
(b) All grants of Options to Outside Directors under this Plan shall be
automatic and non-discretionary and shall be made strictly in accordance with
the following provisions:
(i) No person shall have any discretion to select which Outside Directors
shall be granted options or to determine the number of Shares to be covered by
options granted to Outside Directors; provided, that nothing in this Plan shall
be construed to prevent an Outside Director from declining to receive an Option
under this Plan.
(ii) The terms of each Option granted pursuant to this Section 5(b) shall
be as follows:
(A) the term of the option shall be ten (10) years;
(B) the Option shall become exercisable cumulatively with respect to
one-third of the Shares on each of the first, second and third
anniversaries of the date of grant; provided, however, that in
no event shall any option be exercisable prior to obtaining
stockholder approval of this Plan; and
(C) the exercise price per share of Common Stock shall be 100% of
the "Fair Market Value" (as defined in Section 7(b) below) on
the date of grant of the Option.
(c) Each Option granted pursuant to Section 5(b) above shall be a
Nonstatutory Stock Option. Each other Option shall be designated in the written
option agreement as either an Incentive Stock Option or a Nonstatutory Stock
Option. Notwithstanding such designations, if and 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 during any calendar year (under all plans of the Company) exceeds
$100,000, such options shall be treated as Nonstatutory Stock Options. For
purposes of this Section 5(c), Options shall be taken into account in the order
in which they are 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.
4
<PAGE>
(d) This Plan shall not confer upon any Optionee any right with respect to
continuation of employment by or the rendition of services to the Company or any
Parent or Subsidiary, nor shall it interfere in any way with his or her right or
the right of the Company or any Parent or Subsidiary to terminate his or her
employment or services at any time, with or without cause. The terms of this
Plan or any Options granted hereunder shall not be construed to give any
Optionee the right to any benefits not specifically provided by this Plan or in
any manner modify the Company's right to modify, amend or terminate any of its
pension or retirement plans.
6. Term of Plan. This Plan shall become effective upon its adoption by the
Board of Directors of the Company subject to the approval thereof by vote of the
holders of a majority of the outstanding shares of the Company present, or
represented, and entitled to vote at a meeting to be duly held in accordance
with the applicable laws of the State of Delaware. Such meeting shall be held
within twelve months of the adoption of the Plan by the Board of Directors. The
Plan shall terminate no later than January 1, 2006. No grants shall be made
under this Plan after the date of termination of this Plan. Any termination,
either partially or wholly, shall not affect any Options then outstanding under
this Plan.
7. 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 determined by the Committee as
follows:
(i) In the case of an Incentive Stock Option 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, but if granted to an Employee who, at the time of
the grant of such Incentive Stock Option, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less than 110% of
the Fair Market Value per Share on the date of grant.
(ii) With respect to (i) above, the per Share exercise price is subject to
adjustment as provided in Section 10 below. For purposes of this Section 7(a),
if an Option is amended to reduce the exercise price, the date of grant of such
option shall thereafter be considered to be the date of such amendment.
(b) Fair Market Value. The "Fair Market Value" of the Common Stock shall
be determined by the Committee in its discretion; provided, that if the Common
Stock is listed on a stock exchange, the Fair Market Value per Share shall be
the closing price on such exchange on the date of grant of the Option as
reported in the Wall Street Journal (or, (i) if not so reported, as otherwise
reported by the exchange, and (ii) if not reported on the date of grant, then on
the last prior date on which a sale of the Common Stock was reported); or if not
listed on an exchange but traded on the National Association of Securities
Dealers Automated Quotation National Market System ("NASDAQ"), the Fair Market
Value per Share shall be the closing price per share of the Common Stock for the
date of grant, as reported in the Wall Street Journal (or, (i) if not so
reported, as otherwise reported by NASDAQ, and (ii) if not reported on the date
of grant, then on the last prior date on which a sale of the Common Stock was
reported); or, if the
5
<PAGE>
Common Stock is otherwise publicly traded, the mean of the closing bid price and
asked price for the last known sale.
(c) 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 Committee (and in the case of an Incentive Stock Option, shall
be determined at the time of grant) and may consist entirely of (i) cash: (ii)
check; (iii) the Optionee's personal interest bearing full recourse promissory
note with such terms and provisions as the Committee may authorize provided that
no person who is not an Employee of the Company may purchase Shares with a
promissory note); (iv) other Shares of Common Stock which (X) either have been
owned by the Optionee for more than six (6) 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 (determined without regard to any
limitations on transferability imposed by securities laws) equal to the
aggregate exercise price of the Shares as to which said Option shall be
exercised; (v) any combination of such methods of payment; or (vi) such other
consideration and method of payment for the issuance of Shares to the extent
permitted under applicable laws.
(d) Withholding. No later than the date as of which an amoun first becomes
includable in the gross income of the Optionee for federal income tax purposes
with respect to an option, the Optionee shall pay to the Company (or other
entity identified by the Committee), or make arrangements satisfactory to the
Company or other entity identified by the Committee regarding the payment of,
any federal, state, local or foreign taxes of any kind required by law to be
withheld with respect to such amount required in order for the Company to obtain
a current deduction. Unless otherwise determined by the Committee, withholding
obligations may be settled with Common Stock, including Common Stock underlying
the subject option, provided that any applicable requirements under Section 16
of the Exchange Act are satisfied so as to avoid liability thereunder. The
obligations of the Company under this Plan shall be conditional upon such
payment or arrangements, and the Company shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment otherwise due to the
Optionee.
8. Options.
(a) Term of Option. The term of each Option granted (other than an Option
granted under Section 5(b) above) shall be for a period of no more than 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, 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.
(b) Exercise of Options.
(i) Procedure for Exercise; Rights as a Stockholder. Any Option granted
under this Plan (other than an Option granted pursuant to Section 5(b) above)
shall be exercisable at such times and under such conditions as determined by
the Committee. including performance criteria with respect to the Company and/or
the Optionee, and as shall otherwise be permissible under the terms of this
Plan.
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An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Committee, consist of any
consideration and method of payment allowable under Section 7 of this 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 stockholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Option. If the
exercise of an Option is treated in part as the exercise of an Incentive Stock
Option and in part as the exercise of a Nonstatutory Stock Option pursuant to
Section S(b) above, the Company shall issue a separate stock certificate
evidencing the Shares treated as acquired upon exercise of an Incentive Stock
Option and a separate stock certificate evidencing the Shares treated as
acquired upon exercise of a Nonstatutory Stock Option and shall identify each
such certificate accordingly in its stock transfer records. No adjustment will
be made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 10 of this
Plan.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of this
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(ii) Method of Exercise. An Optionee may exercise an Option, in whole or
in part, at any time during the option period by the Optionee's giving written
notice of exercise on a form provided by the Committee (if available) to the
Company specifying the number of shares of Common Stock subject to the Option to
be purchased. Such notice shall be accompanied by payment in full of the
purchase price by cash or check or such other form of payment as the Company may
accept. If approved by the Committee. payment in full or in part may also be
made (A) by delivering Common Stock already owned by the Optionee having a total
Fair Market Value on the date of such delivery equal to the exercise price of
the subject Option; (B) by the execution and delivery of a note or other
evidence of indebtedness (and any security agreement thereunder) satisfactory to
the Committee; (C) by authorizing the Company to retain shares of Common Stock
which would otherwise be issuable upon exercise of the Option having a total
Fair Market Value on the date of delivery equal to the exercise price of the
subject Option; (D) by the delivery of cash by a broker-dealer to whom the
Optionee has submitted an irrevocable notice of exercise (in accordance with
Part 220, Chapter II, Title 12 of the Code of Federal Regulations, so-called
"cashless" exercise); or (E) by any combination of the foregoing. In the case of
an Incentive Stock Option, the right to make a payment in the form of already
owned shares of Common Stock of the same class as the Common Stock subject to
the Option may be authorized only at the time the Option is granted. No shares
of Common Stock shall be issued until full payment therefor has been made. An
Optionee shall have all of the rights of a stockholder of the Company holding
the class of Common Stock that is subject to such Option (including, if
applicable, the right to vote the shares and the right to receive dividends),
when the Optionee has given written notice of exercise, has paid in full for
such shares and such shares
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have been recorded on the Company's official stockholder records as having been
issued or transferred.
(iii) Termination of Status as an Employee, Consultant or Outside
Director. If an Optionee's Continuous Status as an Employee, Consultant or
Outside Director (as the case may be) is terminated for any reason whatever,
such Optionee may, but only within such period of time as provided in the Option
agreement, 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 and determined by the Committee), exercise the Option to the extent
that such Employee, Consultant or Outside Director was entitled to exercise it
at the date of such termination pursuant to the terms of the Option agreement.
To the extent that such Employee, Consultant or Outside Director was not
entitled to exercise the Option at the date of such termination, or if such
Employee, Consultant or Outside Director does not exercise such Option (which
such Employee, Consultant or Outside Director was entitled to exercise) within
the time specified in the Option agreement, the Option shall terminate.
(iv) Company Loan or Guarantee. Upon the exercise of any Option and
subject to the pertinent Option agreement and the discretion of the Committee,
the Company may at the request of the Optionee; (A) lend to the Optionee, with
recourse, an amount equal to such portion of the option exercise price as the
Committee may determine; or (B) guarantee a loan obtained by the Optionee from a
third-party for the purpose of tendering the option exercise price.
9. Non-transferability of Options. An Option granted hereunder shall by its
terms not be sold, pledged, assigned, hypothecated, transferred, or disposed of
in any manner other than by will or the laws of descent and distribution. An
Option may be exercised during the Optionee's lifetime only by the Optionee.
10. Adjustments Upon Changes in Capitalization or Merger.
(a) Capitalization. Subject to any required action by the stockholders of
the Company, the number of shares of Common Stock which have been authorized for
issuance under this Plan but as to which no Options have yet been granted or
which have been returned to this Plan upon cancellation or expiration of an
Option, and the number of shares of Common Stock subject to each outstanding
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, reverse stock split, stock dividend, combination or reclassification of
the Common Stock of the Company or the payment of a stock dividend with respect
to the Common Stock. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to an Option.
(b) Dissolution or Liquidation. In the event of the proposed dissolution
or liquidation of the Company, each Option will terminate immediately prior to
the consummation of such proposed action, unless otherwise provided by the
Committee. The Committee may, in the exercise of its sole discretion in such
instances, declare that any Option shall terminate as of a
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date fixed by the Committee and give each Optionee the right to exercise his or
her Option as to all or any part of the Optioned Stock, including Shares as to
which the Option would not otherwise be exercisable.
(c) Sale or Merger. "Sale" means: (i) sale (other than a sale by the
Company) of securities entitled to more than 75 % of the voting power of the
Company in a single transaction or a related series of transactions; or (ii)
sale of substantially all of the assets of the Company; or (iii) approval by the
stockholders of the Company of a reorganization. merger or consolidation of the
Company, as a result of which the persons who were the stockholders of the
Company immediately prior to such reorganization, merger or consolidation do not
own securities immediately after the reorganization, merger or consolidation
entitled to more than 50 % of the voting power of the reorganized, merged or
consolidated company. Immediately prior to a Sale, each Optionee may exercise
his or her Option as to all Shares then subject to the Option, regardless of any
vesting conditions otherwise expressed in the Option. Voting power, as used in
this Section 10(c), shall refer to those securities entitled to vote generally
in the election of directors, and securities of the Company not entitled to vote
but which are convertible into, or exercisable for, securities of the Company
entitled to vote generally in the election of directors shall be counted as if
converted or exercised, and each unit of voting securities shall be counted in
proportion to the number of votes such unit is entitled to cast.
(d) Purchased Shares. No adjustment under this Section 10 shall apply to
any purchased Shares already deemed issued at the time any adjustment would
occur.
(e) Notice of Adjustments. Whenever the purchase price or the number or
kind of securities issuable upon the exercise of the Option shall be adjusted
pursuant to Section 10, the Company shall give each Optionee written notice
setting forth, in reasonable detail, the event requiring the adjustment, the
amount of the adjustment, and the method by which such adjustment was
calculated.
(f) Certain Cash Payments. If an Optionee would not be permitted to
exercise an Option or any portion thereof (for purposes of this subsection (f)
only, each such Option being referred to as a "Subject Option") or dispose of
the Shares received upon the exercise thereof without loss or liability (other
than a loss or liability for the exercise price, applicable withholding or any
associated transactional cost), or if the Board determines that the Optionee may
not be permitted to exercise the same rights or receive the same consideration
with respect to the Sale of the Company as a stockholder of the Company with
respect to any Subject Options or portion thereof or the Shares received upon
the exercise thereof, then notwithstanding any other provision of this Plan and
unless the Committee shall provide otherwise in an agreement with such Optionee
with respect to any Subject Options, such Optionee shall have the right, whether
or not the Subject Option is fully exercisable or may be otherwise realized by
the Optionee, by giving notice during the 60-day period from and after a Sale to
the Company, to elect to surrender all or part of any Subject Options to the
Company and to receive cash, within 30 days of such notice, in an amount equal
to the amount by which the "Sale Price" (as defined herein) per share of Common
Stock on the date of such election shall exceed the amount which the Optionee
must pay to exercise the Subject Options per share of Common Stock under such
Subject Options (the "Spread") multiplied by the number of shares of Common
Stock granted under the Subject Options as to which the right granted hereunder
shall be applicable and shall
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<PAGE>
have been exercised: provided, however, that if the end of such 60 day period
from and after a Sale is within six months of the date of grant of a Subject
Option held by an Optionee (except an Optionee who has deceased during such six
month period) who is an officer or director of the Company (within the meaning
of Section 16(b) of the Exchange Act), such Subject Option shall be canceled in
exchange for a payment to the Optionee, effective on the day which is six months
and one day after the date of grant of such Subject Option, equal to the Spread
multiplied by the number of shares of Common Stock granted under the Subject
Option. With respect to any Optionee who is an officer or director of the
Company (within the meaning of Section 16(b) of the Exchange Act), the 60-day
period shall be extended, if necessary, to include the "window period" of Rule
16(b)-3 which first commences on or after the date of the Sale, and the
Committee shall have sole discretion, if necessary, to approve the Optionee's
exercise hereunder and the date on which the Spread is calculated may be
adjusted, if necessary. to a later date if necessary to avoid liability to such
Optionee under Section 16(b). For purposes of the Plan, "Sale Price" means the
higher of (a) the highest reported sales price of a share of Common Stock in any
transaction reported on the principal exchange on which such shares are listed
or on NASDAQ during the 60-day period prior to and including the date of a Sale
or (b) if the Sale is the result of a tender or exchange offer or a corporate
transaction, the highest price per share of Common Stock paid in such tender or
exchange offer or a corporate transaction, except that, in the case of Incentive
Stock Options, such price shall be based only on the Fair Market Value of the
Common Stock on the date such Incentive Stock Option is exercised. To the extent
that the consideration paid in any such transaction described above consists all
or in part of securities or other non-cash consideration, the value of such
securities or other non-cash consideration shall be determined in the sole
discretion of the Committee.
(g) Mitigation of Excise Tax. If any payment or right accruing to an
Optionee under this Plan (without the application of this Section), either alone
or together with other payments or rights accruing to the Optionee from the
Company or an affiliate ("Total Payments") would constitute a "parachute
payment" (as defined in Section 2806 of the Code and regulations thereunder),
the Committee may in each particular instance determine to (i) reduce such
payment or right to the largest amount or greatest right that will result in no
portion of the amount payable or right accruing under the Plan being subject to
an excise tax under Section 4999 of the Code or being disallowed as a deduction
under Section 2806 of the Code, or (ii) take such other actions, or make such
other arrangements or payments with respect to any such payment or right as the
Committee may determine in the circumstances. Any such determination shall be
made by the Committee in the exercise of its sole discretion, and such
determination shall be conclusive and binding on the Optionee. The Optionee
shall cooperate as may be requested by the Committee in connection with the
Committee's determination, including providing the Committee with such
information concerning such Optionee as the Committee may deem relevant to its
determination.
11. Time of Granting Options. The date of grant of an Option shall, for all
purposes, be the date on which the Committee makes the determination granting
such Option. Notice of the determination shall be given to each Employee,
Consultant or Outside Director to whom an Option is so granted within a
reasonable time after the date of such grant. If the Committee cancels, with the
consent of Optionee, any Option granted under this Plan, and a new Option is
substituted therefor, the date that the canceled Option was originally granted
shall be the date used to determine the earliest date for exercising the new
substituted Option under Section 7 so
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that the Optionee may exercise the substituted Option at the same time as if the
Optionee had held the substituted Option since the date the canceled Option was
granted.
12. Amendment and Termination of Plan.
(a) Amendment and Termination. The Board or the Committee may amend, waive
or terminate this Plan from time to time in such respects as it shall deem
advisable: provided that, to the extent necessary to comply with Rule 16b-3 or
with Section 422 of the Code (or any other successor or applicable law or
regulation), the Company shall obtain stockholder approval of any Plan amendment
in such a manner and to such a degree as is required by the applicable law, rule
or regulation. Notwithstanding the foregoing, neither the provisions of Section
5(b) of this Plan, nor any other provisions pertaining to the automatic option
Grants to Outside Directors, shall be amended more than once every six months,
other than to comport with changes in the Code or other applicable laws or any
rules or regulations promulgated thereunder.
(b) Effect of Amendment or Termination. Any such amendment or termination
of this Plan shall not affect Options already granted and such Options shall
remain in full force and effect as if this Plan had not been amended or
terminated, unless mutually agreed otherwise between the Optionee and the
Committee, which agreement must be in writing and signed by the Optionee and the
Company.
13. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant to
the exercise of an Option unless the exercise of such Option and the issuance
and delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act, the
Exchange Act, and the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the Shares may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance.
As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law.
14. Restrictions on Shares. Shares of Common Stock issued upon exercise of an
Option shall be subject to the terms and conditions specified herein and to such
other terms, conditions and restrictions as the Committee in its discretion may
determine or provide in the grant. The Company shall not be required to issue or
deliver any certificates for shares of Common Stock. cash or other property
prior to (a) the listing of such shares on any stock exchange (or other public
market) on which the Common Stock may then be listed (or regularly traded), (b)
the completion of any registration or qualification of such shares under federal
or state law, or any ruling or regulation of any government body which the
Committee determines to be necessary or advisable, and (c) the satisfaction of
any applicable withholding obligation in order for the Company or an affiliate
to obtain a deduction with respect to the exercise of an Option. The Company may
cause any certificate for any share of Common Stock to be delivered to be
properly marked with a legend or other notation reflecting the limitations on
transfer of
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such Common Stock as provided in this Plan or as the Committee may otherwise
require. The Committee may require any person exercising an Option to make such
representations and furnish such information as it may consider appropriate in
connection with the issuance or delivery of the shares of Common Stock in
compliance with applicable law or otherwise. Fractional shares shall not be
delivered, but shall be rounded to the next lower whole number of shares.
15. Stockholder Rights. No person shall have any rights of a stockholder as to
shares of Common Stock subject to an Option until, after proper exercise of the
Option or other action required, such shares shall have been recorded on the
Company's official stockholder records as having been issued or transferred.
Subject to the preceding Section and upon exercise of the Option or any portion
thereof, the Company will have thirty (30) days in which to issue the shares,
and the Optionee will not be treated as a stockholder for any purpose whatsoever
prior to such issuance. No adjustment shall be made for cash dividends or other
rights for which the record date is prior to the date such shares are recorded
as issued or transferred in the Company's official stockholder records, except
as provided herein or in an agreement.
16. Best Efforts To Register. If there has been a public offering, the Company
may register under the Securities Act the Common Stock delivered or deliverable
pursuant to Options on Commission Form S-8 if available to the Company for this
purpose (or any successor or alternate form that is substantially similar to
that form to the extent available to effect such registration), in accordance
with the rules and regulations governing such forms, as soon as such forms are
available for registration to the Company for this purpose. The Company will, if
it so determines, use its good faith efforts to cause the registration statement
to become effective as soon as possible and will file such supplements and
amendments to the registration statement as may be necessary to, keep the
registration statement in effect until the earliest of (a) one year following
the expiration of the option period of the last Option outstanding, (b) the date
the Company is no longer a reporting company under the Exchange Act and (c) the
date all Optionees have disposed of all shares delivered pursuant to any Option.
The Company may delay the foregoing actions at any time and from time to time if
the Committee determines in its discretion that any such registration would
materially and adversely affect the Company's interests or if there is no
material benefit to Optionees.
17. 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 permit the exercise of all Options outstanding under this Plan.
The 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 issue or sell such Shares
as to which such requisite authority shall not have been obtained for any
reason.
18. Option Agreements. Options shall be evidenced by written Option agreements
in such form as the Committee shall approve.
19. Information to Optionees. To the extent required by applicable law, the
Company shall provide to each Optionee, during the period for which such
Optionee has one or more Options outstanding, copies of all annual reports and
other information which are provided to all
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stockholders of the Company. Except as otherwise noted in the foregoing
sentence, the Company shall have no obligation or duty to affirmatively disclose
to any Optionee, and no Optionee shall have any right to be advised of, any
material information regarding the Company or any Parent or Subsidiary at any
time prior to, upon or otherwise in connection with, the exercise of an Option.
20. Funding. Benefits payable under this Plan to any person shall be paid
directly by the Company. The Company shall not be required to fund or otherwise
segregate assets to be used for payment of benefits under this Plan.
21. Indemnification. In addition to such other rights of indemnification as
they may have as directors or as members of the Committee, the members of the
Committee shall be indemnified by the Company against the reasonable expenses,
including attorneys' fees, actually and necessarily incurred in connection with
the defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a patty by reason of any action
taken or failure to act under or in connection with this Plan or any option
granted hereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
the Company) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding; provided that within 60 days after institution of any such
action, suit or proceeding a Committee member shall in writing offer the Company
the opportunity, at its own expense, to handle and defend the same. The
foregoing right of indemnification shall not be exclusive and shall be
independent of any other rights of indemnification to which such persons may be
entitled under the Company's Certificate of Incorporation or bylaws, by
contract, as a matter of law, or otherwise. 22. Controlling Law. This Plan shall
be governed by the laws of the State of Delaware applicable to contracts made
and performed wholly in Delaware between Delaware residents.
