<PAGE>
As filed with the Securities and Exchange Commission on November 5, 1999
Registration No. 333-_________________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
DTM CORPORATION
(Exact name of registrant as specified in its charter)
Texas 74-248705
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1611 Headway Circle, Building 2, Austin, Texas 78754
(Address of principal executive offices) (Zip code)
----------------
DTM CORPORATION
1999 STOCK INCENTIVE PLAN
(Full title of the Plan)
----------------
Geoffrey W. Kreiger
DTM CORPORATION
1611 Headway Circle, Building 2, Austin, Texas 78754
(Name and address of agent for service)
(512) 339-2922
(Telephone number, including area code, of agent for service)
With a copy to:
J. Matthew Lyons, Esq.
BROBECK, PHLEGER & HARRISON LLP
301 Congress Avenue, Suite 1200
Austin, Texas 78701
Facsimile: (512) 477-5813
----------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) per Share Price Fee
---------- ------------- --------- ----- ---
1999 Stock
Incentive Plan
- --------------
Common Stock,
$0.0002 par value 907,755 shares:
---------------
<S> <C> <C> <C> <C>
250,000 shares(2) $1.00(2) 250,000(2) $69.50
357,755 shares(3) N/A(5) N/A(5) N/A
300,000 shares(4) N/A(5) N/A(5) N/A
</TABLE>
<PAGE>
================================================================================
(1) This Registration Statement shall also cover any additional shares of the
Common Stock of DTM Corporation (the "Registrant") which become issuable
under the DTM Corporation 1999 Stock Incentive Plan (the "1999 Plan") by
reason of any stock dividend, stock split, recapitalization or other
similar transaction effected without the Registrant's receipt of
consideration which results in an increase in the number of the outstanding
shares of Registrant's Common Stock.
(2) 250,000 new shares were approved for issuance under the 1999 Plan effective
as of May 25, 1999. The filing fee with respect to such shares is
calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933 on the basis of the average of the high and low
selling price per share of Registrant's Common Stock on November 3, 1999,
as reported by the Nasdaq National Market.
(3) 357,755 shares were incorporated into the 1999 Plan from the Registrant's
1996 Stock Option Plan (the "1996 Plan"). Such shares were previously
registered on Form S-8 Registration Statement No. 333-26985 filed on May
13, 1997, (the "1997 Registration Statement").
(4) 300,000 shares were incorporated into the 1999 Plan from the Registrant's
1998 Stock Option Plan. Such shares were previously registered on S-8
Registration Statement No. 333-62823 filed on September 3, 1998 (the "1998
Registration Statement").
(5) Under General Instruction E, the Registration Fee with respect to the 1999
Plan is calculated solely on the basis of 250,000 shares of Common Stock
newly authorized for issuance under the 1999 Plan. The applicable filing
fees for the 357,755 shares in the aggregate incorporated into the 1999
Plan from the 1996 Plan were paid in connection with the 1997 Registration
Statement and the applicable filing fees for the 300,000 shares
incorporated into the 1999 Plan from the 1998 Plan were paid in connection
with the 1998 Registration Statement.
================================================================================
<PAGE>
PART II
Information Required in the Registration Statement
Item 3. Incorporation of Documents by Reference
---------------------------------------
DTM Corporation (the "Registrant") hereby incorporates by reference
into this Registration Statement the following documents previously filed with
the Securities and Exchange Commission (the "Commission"):
(a) The Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, filed with the Commission on March 31, 1999;
(b) The Registrant's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1999 and June 30, 1999, filed with the
Commission on May 17, 1999 and August 13, 1999, respectively; and
(c) The Registrant's Registration Statement No. 000-20993 on Form 8-A,
filed with the Commission on July 11, 1996, as amended on April 28,
1997, pursuant to Section 12 of the Securities and Exchange Act of
1934, as amended (the "1934 Act"), in which there is described the
terms, rights and provisions applicable to the Registrant's
outstanding Common Stock.
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of
this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained in any subsequently filed document
which also is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such 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
-------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel
--------------------------------------
Not applicable.
Item 6. Indemnification of Directors and Officers
-----------------------------------------
The Registrant's Amended and Restated Articles of Incorporation
include provisions to permit the Registrant to indemnify its directors and
officers to the fullest extent permitted by Texas law. Article 2.02-1 of the
Texas Business Corporation Act makes provision for the indemnification of
officers and directors in terms sufficiently broad as to include indemnification
under certain circumstances for liabilities (including reimbursement of expenses
incurred) arising under the Securities Act of 1933, as amended (the "Securities
Act"). In addition, as permitted by Article 2.02-1 of the Texas Business
Corporation Act, the Registrant's Amended and Restated Articles of Incorporation
provide that a director of the Registrant shall not be liable to the Registrant
or its shareholders for monetary damages for acts or omissions in the director's
capacity as such, except for liability (i) for any breach of the director's duty
of loyalty to the Registrant or its shareholders, (ii) for any transaction from
which the director received an improper benefit, whether or not the benefit
resulted from an act taken within the scope of the director's office, (iv) for
acts or omissions for which the liability of a director is expressly provided by
statute or (v) for acts related to an unlawful stock repurchase or payment of a
dividend. The Registrant's Amended and Restated Articles of Incorporation
further provide that directors receive the benefit of any future amendment to
Texas statutes that further limits the liability of a director.
The Underwriting Agreement, dated May 2, 1997, between the Registrant
and A.G. Edwards & Sons, Inc. and Ladenburg Thalmann & Co. Inc., as
representatives of the several underwriters listed on Schedule II
<PAGE>
thereto, provides for indemnification by the Underwriters of the Registrant, the
Selling Shareholders named therein and the Registrant's officers and directors
for certain liabilities arising under the Securities Act, or otherwise.
Item 7. Exemption from Registration Claimed
-----------------------------------
Not applicable.
Item 8. Exhibits
--------
Exhibit Number Exhibit
- -------------- -------
4 Instruments Defining Rights of Shareholders. Reference is made
to Registrant's Registration Statement No. 000-20993 on Form 8-
A, including the exhibits thereto, which are incorporated herein
by reference pursuant to Item 3(c).
5.1 Opinion and Consent of Brobeck, Phleger & Harrison LLP
23.1 Consent of Independent Auditors.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 The DTM Corporation 1999 Stock Incentive Plan.
99.2 Form of Notice of Grant of Stock Option.
99.3 Form of Stock Option Agreement.
99.4 Form of Notice of Grant of Non-Employee Director Automatic Stock
Option - Initial.
99.5 Form of Notice of Grant of Non-Employee Director Automatic Stock
Option - Annual.
99.6 Form of Automatic Stock Option Agreement.
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 1933 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 clauses (1)(i) and (1)(ii) shall not apply if
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 1934 Act that are incorporated by reference
into the Registration Statement; (2) that for the purpose of determining any
liability under the 1933 Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and (3) to remove from registration by means
of a post-effective amendment any of the securities being registered which
remain unsold at the termination of the Registrant's 1999 Stock Incentive Plan.
B. The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is
incorporated by reference into 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 1933
Act may be permitted to directors, officers or controlling persons of the
Registrant pursuant to the indemnification provisions summarized in Item 6 above
or otherwise, the Registrant has been informed that, in the opinion of the
Commission, such indemnification is against public policy as expressed in the
1933 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 1933 Act and
will be governed by the final adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, 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 Austin, State of Texas, on this 5th day of
November 1999.
DTM CORPORATION
By: /s/ John S. Murchison, III
--------------------------------------
John S. Murchison, III
Chief Executive Officer, President
and Director
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of DTM Corporation, a
Texas corporation, do hereby constitute and appoint John S. Murchison, III and
Geoffrey W. Kreiger and each of them, the lawful attorneys and agents, with full
power and authority to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, and any one of them, determine may
be necessary or advisable or required to enable said corporation to comply with
the Securities Act of 1933, as amended, and any rules or regulations or
requirements of the Securities and Exchange Commission in connection with this
Registration Statement. Without limiting the generality of the foregoing power
and authority, the powers granted include the power and authority to sign the
names of the undersigned officers and directors in the capacities indicated
below to this Registration Statement, to any and all amendments, both pre-
effective and post-effective, and supplements to this Registration Statement,
and to any and all instruments or documents filed as part of or in conjunction
with this Registration Statement or amendments or supplements thereof, and each
of the undersigned hereby ratifies and confirms all that said attorneys and
agents, or any of them, shall do or cause to be done by virtue hereof. This
Power of Attorney may be signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signatures Title Date
- ---------- ----- ----
/s/John S. Murchison, III Chief Executive Officer, November 5, 1999
- -------------------------- President and Director
John S. Murchison, III (Principal Executive
Officer)
/s/Geoffrey W. Kreiger Chief Financial Officer and November 5, 1999
- -------------------------- Secretary (Principal Financial
Geoffrey W. Kreiger and Accounting Officer)
/s/Lawrence Goldstein Director November 5, 1999
- --------------------------
Lawrence Goldstein
II-3
<PAGE>
Signatures Title Date
- ---------- ----- ----
/s/Anthony Mariotti Director November 5, 1999
- --------------------------
Anthony Mariotti
/s/Thomas G. Ricks Director November 5, 1999
- --------------------------
Thomas G. Ricks
/s/James B. Skaggs Director November 5, 1999
- --------------------------
James B. Skaggs
II-4
<PAGE>
EXHIBIT INDEX
-------------
Exhibit Number Exhibit
- -------------- -------
4 Instruments Defining Rights of Shareholders. Reference is made
to Registrant's Registration Statement No. 000-20993 on Form 8-
A, including the exhibits thereto, which are incorporated
herein by reference pursuant to Item 3(c).
5.1 Opinion and Consent of Brobeck, Phleger & Harrison LLP
23.1 Consent of Independent Auditors.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 DTM Corporation 1999 Stock Incentive Plan.
99.2 Form of Notice of Grant of Stock Option.
99.3 Form of Stock Option Agreement.
99.4 Form of Notice of Grant of Non-Employee Director Automatic
Stock Option - Initial
99.5 Form of Notice of Grant of Non-Employee Director Automatic
Stock Option - Annual.
99.6 Form of Automatic Stock Option Agreement.
<PAGE>
Exhibit 5.1
Opinion and Consent of Brobeck, Phleger & Harrison LLP
November 5, 1999
DTM Corporation
1611 Headway Circle, Building 2
Austin, TX 78754
Re: DTM Corporation Registration Statement on Form S-8 for 907,755
Shares of Common Stock and Related Stock Options
--------------------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to DTM Corporation, a Texas corporation (the
"Company"), in connection with the registration on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended, of 907,755 shares of
common stock and related stock options for issuance under the Company's 1999
Stock Incentive Plan (the "Plan").
This opinion is being furnished in accordance with the requirements of
Item 8 of Form S-8 and Item 601(b)(5)(i) of Regulation S-K.
We have reviewed the Company's charter documents and the corporate
proceedings taken by the Company in connection with the establishment and
amendment of the Plan. Based on such review, we are of the opinion that, if, as
and when the shares of common stock are issued and sold (and the consideration
therefor received) pursuant to (a) the provisions of option agreements duly
authorized under the Plan and in accordance with the Registration Statement, or
(b) duly authorized direct stock issuances in accordance with the Plan and the
Registration Statement, such shares will be duly authorized, legally issued,
fully paid and non-assessable.
We consent to the filing of this opinion letter as Exhibit 5.1 to the
Registration Statement.
This opinion letter is rendered as of the date first written above and
we disclaim any obligation to advise you of facts, circumstances, events or
developments which hereafter may be brought to our attention and which may
alter, affect or modify the opinion expressed herein. Our opinion is expressly
limited to the matters set forth above and we render no opinion, whether by
implication or otherwise, as to any other matters relating to the Company, the
Plan or the shares of common stock issuable under such plan.
Very truly yours,
/s/ BROBECK, PHLEGER & HARRISON LLP
BROBECK, PHLEGER & HARRISON LLP
<PAGE>
DRAFT EXHIBIT 23.1
- -----
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the 1999 Stock Incentive Plan of DTM Corporation of our
report dated February 5, 1999, except for Note 14 as to which the date is
February 19, 1999, with respect to the consolidated financial statements of DTM
Corporation included in the Annual Report (Form 10-K) for the year ended
December 31, 1998.
/s/ERNST & YOUNG LLP
----------------------------------
ERNST & YOUNG LLP
Austin, Texas
November 4, 1999
<PAGE>
EXHIBIT 99.1
DTM CORPORATION
1999 STOCK INCENTIVE PLAN
-------------------------
ARTICLE ONE
GENERAL PROVISIONS
------------------
I. PURPOSE OF THE PLAN
This 1999 Stock Incentive Plan is intended to promote the interests of
DTM Corporation, a Texas corporation, by providing eligible persons with the
opportunity to acquire a proprietary interest, or otherwise increase their
proprietary interest, in the Corporation as an incentive for them to remain in
the service of the Corporation.
Capitalized terms shall have the meanings assigned to such terms in
the attached Appendix.
II. STRUCTURE OF THE PLAN
The Plan shall be divided into three separate equity programs:
(i) the Discretionary Option Grant Program under which
eligible persons may, at the discretion of the Plan Administrator, be
granted options to purchase shares of Common Stock,
(ii) the Stock Issuance Program under which eligible persons
may, at the discretion of the Plan Administrator, be issued shares of
Common Stock directly, either through the immediate purchase of such shares
or as a bonus for services rendered the Corporation (or any Parent or
Subsidiary), and
(iii) the Automatic Option Grant Program under which eligible
non-employee Board members shall automatically receive options at periodic
intervals to purchase shares of Common Stock.
The provisions of Articles One and Five shall apply to all equity
programs under the Plan and shall govern the interests of all persons under the
Plan.
III. ADMINISTRATION OF THE PLAN
A. The Board shall have the authority to administer the
Discretionary Option Grant and Stock Issuance Programs with respect to Section
16 Insiders but may delegate such authority in whole or in part to the Primary
Committee.
Administration of the Discretionary Option Grant and Stock Issuance
Programs with respect to all other persons eligible to participate in those
programs may, at the Board's
1.
<PAGE>
discretion, be vested in the Primary Committee or a Secondary Committee, or the
Board may retain the power to administer those programs with respect to all such
persons.
B. Each Plan Administrator shall, within the scope of its
administrative jurisdiction under the Plan, have full power and authority
subject to the provisions of the Plan:
(i) to establish such rules as it may deem appropriate for
proper administration of the Plan, to make all factual determinations, to
construe and interpret the provisions of the Plan and the awards thereunder
and to resolve any and all ambiguities thereunder;
(ii) to determine, with respect to awards made under the
Discretionary Option Grant and Stock Issuance Programs, which eligible
persons are to receive such awards, the time or times when such awards are
to be made, the number of shares to be covered by each such award, the
vesting schedule (if any) applicable to the award, the status of a granted
option as either an Incentive Option or a Non-Statutory Option and the
maximum term for which the option is to remain outstanding;
(iii) to amend, modify or cancel any outstanding award with the
consent of the holder or accelerate the vesting of such award; and
(iv) to take such other discretionary actions as permitted
pursuant to the terms of the applicable program.
Decisions of each Plan Administrator within the scope of its
administrative functions under the Plan shall be final and binding on all
parties.
C. Members of the Primary Committee or any Secondary Committee
shall serve for such period of time as the Board may determine and may be
removed by the Board at any time. The Board may also at any time terminate the
functions of any Secondary Committee and reassume all powers and authority
previously delegated to such committee.
D. Service on the Primary Committee or the Secondary Committee
shall constitute service as a Board member, and members of each such committee
shall accordingly be entitled to full indemnification and reimbursement as Board
members for their service on such committee. No member of the Primary Committee
or the Secondary Committee shall be liable for any act or omission made in good
faith with respect to the Plan or any options or stock issuances under the Plan.
E. Administration of the Automatic Option Grant Program shall be
self-executing in accordance with the terms of that program.
IV. ELIGIBILITY
A. The persons eligible to participate in the Discretionary Option
Grant and Stock Issuance Programs are as follows:
2.
<PAGE>
(i) Employees,
(ii) non-employee members of the Board or the board of
directors of any Parent or Subsidiary, and
(iii) consultants and other independent advisors who provide
services to the Corporation (or any Parent or Subsidiary).
B. Only non-employee Board members shall be eligible to participate
in the Automatic Option Grant Program.
V. STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares of authorized
but unissued or reacquired Common Stock, including shares repurchased by the
Corporation on the open market. The maximum number of shares of Common Stock
initially reserved for issuance over the term of the Plan shall not exceed
907,755 shares. Such authorized share reserve consists of (i) the aggregate
number of shares which remain available for issuance, as of the Plan Effective
Date, under the Predecessor Plans as last approved by the Corporation's
shareholders, including the shares subject to the outstanding options to be
incorporated into the Plan and the additional shares which would otherwise be
available for future grant under the Predecessors Plans, plus (ii) an increase
of Two Hundred Fifty Thousand (250,000) shares authorized by the Board in March
1999 and subsequently approved by the shareholders at the 1999 Annual Meeting.
B. No one person participating in the Plan may receive options and
direct stock issuances for more than One Hundred Thousand (100,000) shares of
Common Stock in the aggregate per calendar year, beginning with the 1999
calendar year.
C. Shares of Common Stock subject to outstanding options (including
options incorporated into this Plan from the Predecessor Plans) shall be
available for subsequent issuance under the Plan to the extent those options
expire, terminate or are cancelled for any reason prior to exercise in full.
Unvested shares issued under the Plan and subsequently repurchased by the
Corporation, at the original exercise or issue price paid per share, pursuant to
the Corporation's repurchase rights under the Plan shall be added back to the
number of shares of Common Stock reserved for issuance under the Plan and shall
accordingly be available for reissuance through one or more subsequent options
or direct stock issuances under the Plan. However, should the exercise price of
an option under the Plan be paid with shares of Common Stock or should shares of
Common Stock otherwise issuable under the Plan be withheld by the Corporation in
satisfaction of the withholding taxes incurred in connection with the exercise
of an option or the vesting of a stock issuance under the Plan, then the number
of shares of Common Stock available for issuance under the Plan shall be reduced
by the gross number of shares for which the option is exercised or which vest
under the stock issuance, and not by the net number of shares of Common Stock
issued to the holder of such option or stock issuance.
D. If any change is made to the Common Stock by reason of any stock
split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without
the Corporation's receipt of
3.
<PAGE>
consideration, appropriate adjustments shall be made to (i) the maximum number
and/or class of securities issuable under the Plan, (ii) the number and/or class
of securities for which any one person may be granted options and direct stock
issuances under this Plan per calendar year, (iii) the number and/or class of
securities for which grants are subsequently to be made under the Automatic
Option Grant Program to new and continuing non-employee Board members, (iv) the
number and/or class of securities and the exercise price per share in effect
under each outstanding option under the Plan, and (v) the number and/or class of
securities and price per share in effect under each outstanding option
incorporated into this Plan from the Predecessor Plans. Such adjustments to the
outstanding options are to be effected in a manner which shall preclude the
enlargement or dilution of rights and benefits under such options. The
adjustments determined by the Plan Administrator shall be final, binding and
conclusive.
4.
<PAGE>
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
----------------------------------
I. OPTION TERMS
Each option shall be evidenced by one or more documents in the form
approved by the Plan Administrator; provided, however, that each such document
--------
shall comply with the terms specified below. Each document evidencing an
Incentive Option shall, in addition, be subject to the provisions of the Plan
applicable to such options.
A. Exercise Price.
--------------
1. The exercise price per share shall be fixed by the Plan
Administrator at the time of the option grant but in no event shall be less than
one hundred percent (100%) of the Fair Market Value per share of Common Stock in
the option grant date.
2. The exercise price shall become immediately due upon
exercise of the option and shall, subject to the provisions of Section II of
Article Five and the documents evidencing the option, be payable in one or more
of the forms specified below:
(i) cash or check made payable to the Corporation;
(ii) shares of Common Stock held for the requisite
period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the
Exercise Date, or
(iii) to the extent the option is exercised for vested
shares, through a special sale and remittance procedure pursuant to which the
Optionee shall concurrently provide irrevocable instructions to (a) a
Corporation-approved brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased shares plus all applicable Federal,
state and local income and employment taxes required to be withheld by the
Corporation by reason of such exercise and (b) the Corporation to deliver the
certificates for the purchased shares directly to such brokerage firm in order
to complete the sale.
Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.
5.
<PAGE>
B. Exercise and Term of Options. Each option shall be exercisable
at such time or times, during such period and for such number of shares as shall
be determined by the Plan Administrator and set forth in the documents
evidencing the option. However, no option shall have a term in excess of ten
(10) years measured from the option grant date.
C. Cessation of Service.
1. The following provisions shall govern the exercise of any
options outstanding at the time of the Optionee's cessation of Service or death:
(i) Any option outstanding at the time of the Optionee's
cessation of Service for any reason shall remain exercisable for such
period of time thereafter as shall be determined by the Plan Administrator
and set forth in the documents evidencing the option, but no such option
shall be exercisable after the expiration of the option term.
(ii) Any option exercisable in whole or in part by the
Optionee at the time of death may be subsequently exercised by his or her
Beneficiary.
(iii) During the applicable post-Service exercise period, the
option may not be exercised in the aggregate for more than the number of
vested shares for which the option is exercisable on the date of the
Optionee's cessation of Service. Upon the expiration of the applicable
exercise period or (if earlier) upon the expiration of the option term, the
option shall terminate and cease to be outstanding for any vested shares
for which the option has not been exercised. However, the option shall,
immediately upon the Optionee's cessation of Service, terminate and cease
to be outstanding to the extent the option is not otherwise at that time
exercisable for vested shares.
(iv) Should the Optionee's Service be terminated for
Misconduct or should the Optionee engage in Misconduct while his or her
options are outstanding, then all such options shall terminate immediately
and cease to be outstanding.
2. The Plan Administrator shall have complete discretion,
exercisable either at the time an option is granted or at any time while the
option remains outstanding:
(i) to extend the period of time for which the option is to
remain exercisable following the Optionee's cessation of Service to such
period of time as the Plan Administrator shall deem appropriate, but in no
event beyond the expiration of the option term, and/or
(ii) to permit the option to be exercised, during the
applicable post-Service exercise period, for one or more additional
installments in which the Optionee would have vested had the Optionee
continued in Service.
6.
<PAGE>
D. Shareholder Rights. The holder of an option shall have no
------------------
shareholder rights with respect to the shares subject to the option until such
person shall have exercised the option, paid the exercise price and become a
holder of record of the purchased shares.
E. Repurchase Rights. The Plan Administrator shall have the
-----------------
discretion to grant options which are exercisable for unvested shares of Common
Stock. Should the Optionee cease Service while holding such unvested shares, the
Corporation shall have the right to repurchase, at the exercise price paid per
share, any or all of those unvested shares. The terms upon which such repurchase
right shall be exercisable (including the period and procedure for exercise and
the appropriate vesting schedule for the purchased shares) shall be established
by the Plan Administrator and set forth in the document evidencing such
repurchase right.
F. Limited Transferability of Options. During the lifetime of the
----------------------------------
Optionee, Incentive Options shall be exercisable only by the Optionee and shall
not be assignable or transferable other than by will or by the laws of descent
and distribution following the Optionee's death. Non-Statutory Options shall be
subject to the same restrictions, except that a Non-Statutory Option may, to the
extent permitted by the Plan Administrator, be assigned in whole or in part
during the Optionee's lifetime pursuant to a domestic relations order or to one
or more members of the Optionee's family or to a trust established exclusively
for Optionee and/or one or more such family members. The terms applicable to the
assigned portion shall be the same as those in effect for the option immediately
prior to such assignment and shall be set forth in such documents issued to the
assignee as the Plan Administrator may deem appropriate.
II. INCENTIVE OPTIONS
The terms specified below shall be applicable to all Incentive
Options. Except as modified by the provisions of this Section II, all the
provisions of Articles One, Two and Five shall be applicable to Incentive
Options. Options which are specifically designated as Non-Statutory Options
when issued under the Plan shall not be subject to the terms of this Section II.
---
A. Eligibility. Incentive Options may only be granted to Employees.
-----------
B. Dollar Limitation. The aggregate Fair Market Value of the shares
of Common Stock (determined as of the respective date or dates of grant) for
which one or more options granted to any Employee under the Plan (or any other
option plan of the Corporation or any Parent or Subsidiary) may for the first
time become exercisable as Incentive Options during any one calendar year shall
not exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the
Employee holds two (2) or more such options which become exercisable for the
first time in the same calendar year, the foregoing limitation on the
exercisability of such options as Incentive Options shall be applied on the
basis of the order in which such options are granted.
C. 10% Shareholder. If any Employee to whom an Incentive Option is
granted is a 10% Shareholder, then the exercise price per share shall not be
less than one hundred ten percent (110%) of the Fair Market Value per share of
Common Stock on the option grant date, and the option term shall not exceed five
(5) years measured from the option grant date.
7.
<PAGE>
III. CHANGE IN CONTROL
A. Each option outstanding at the time of a Change in Control but
not otherwise fully vested shall automatically accelerate so that each such
option shall, immediately prior to the effective date of the Change in Control,
become exercisable for all of the shares of Common Stock at the time subject to
that option and may be exercised for any or all of those shares as fully-vested
shares of Common Stock. However, an outstanding option shall not so accelerate
if and to the extent: (i) such option is, in connection with the Change in
Control, assumed or otherwise continued in full force and effect by the
successor corporation (or parent thereof) pursuant to the terms of the Change in
Control, (ii) such option is replaced with a cash incentive program of the
successor corporation which preserves the spread existing at the time of the
Change in Control on the shares of Common Stock for which the option is not
otherwise at that time exercisable and provides for subsequent payout in
accordance with the same vesting schedule applicable to those option shares or
(iii) the acceleration of such option is subject to other limitations imposed by
the Plan Administrator at the time of the option grant.
B. All outstanding repurchase rights shall also terminate
automatically, and the shares of Common Stock subject to those terminated rights
shall immediately vest in full, in the event of any Change in Control, except to
the extent: (i) those repurchase rights are assigned to the successor
corporation (or parent thereof) or otherwise continue in full force and effect
pursuant to the terms of the Change in Control or (ii) such accelerated vesting
is precluded by other limitations imposed by the Plan Administrator at the time
the repurchase right is issued.
C. Immediately following the consummation of the Change in Control,
all outstanding options shall terminate and cease to be outstanding, except to
the extent assumed by the successor corporation (or parent thereof) or otherwise
expressly continued in full force and effect pursuant to the terms of the Change
in Control.
D. Each option which is assumed in connection with a Change in
Control shall be appropriately adjusted, immediately after such Change in
Control, to apply to the number and class of securities which would have been
issuable to the Optionee in consummation of such Change in Control had the
option been exercised immediately prior to such Change in Control. Appropriate
adjustments to reflect such Change in Control shall also be made to (i) the
exercise price payable per share under each outstanding option, provided the
--------
aggregate exercise price payable for such securities shall remain the same,
(ii) the maximum number and/or class of securities available for issuance over
the remaining term of the Plan and (iii) the maximum number and/or class of
securities for which any one person may be granted options and direct stock
issuances under the Plan per calendar year.
E. The Plan Administrator may at any time provide that one or more
options will automatically accelerate in connection with a Change in Control,
whether or not those options are assumed or otherwise continued in full force
and effect pursuant to the terms of the Change in Control. Any such option shall
accordingly become exercisable, immediately prior to the effective date of such
Change in Control, for all of the shares of Common Stock at the time subject to
that option and may be exercised for any or all of those shares as fully-vested
shares of Common Stock. In addition, the Plan Administrator may at any time
provide that one or more of
8.
<PAGE>
the Corporation's repurchase rights shall not be assignable in connection with
such Change in Control and shall terminate upon the consummation of such Change
in Control.
F. The Plan Administrator may at any time provide that one or more
options will automatically accelerate upon an Involuntary Termination of the
Optionee's Service within a designated period (not to exceed twelve (12) months)
following the effective date of any Change in Control in which those options do
not otherwise accelerate. Any options so accelerated shall remain exercisable
for fully-vested shares until the earlier of (i) the expiration of the option
-------
term or (ii) the expiration of the one (1) year period measured from the
effective date of the Involuntary Termination. In addition, the Plan
Administrator may at any time provide that one or more of the Corporation's
repurchase rights shall immediately terminate upon such Involuntary Termination.
G. The portion of any Incentive Option accelerated in connection
with a Change in Control shall remain exercisable as an Incentive Option only to
the extent the applicable One Hundred Thousand Dollar ($100,000) limitation is
not exceeded. To the extent such dollar limitation is exceeded, the accelerated
portion of such option shall be exercisable as a Non-Statutory Option under the
Federal tax laws.
9.
<PAGE>
ARTICLE THREE
STOCK ISSUANCE PROGRAM
----------------------
I. STOCK ISSUANCE TERMS
Shares of Common Stock may be issued under the Stock Issuance Program
through direct and immediate issuances without any intervening options. Shares
of Common Stock may also be issued under the Stock Issuance Program pursuant to
share right awards which entitle the recipients to receive those shares upon the
attainment of designated performance goals or Service requirements. Each such
award shall be evidenced by one or more documents which comply with the terms
specified below.
A. Purchase Price.
--------------
1. The purchase price per share of Common Stock subject to
direct issuance shall be fixed by the Plan Administrator that shall in no event
be less than one hundred percent (100%) of the Fair Market Value per share of
Common Stock on the issue date.
2. Subject to the provisions of Section II of Article Five,
Shares of Common Stock may be issued under the Stock Issuance Program for any of
the following items of consideration which the Plan Administrator may deem
appropriate in each individual instance:
(i) cash or check made payable to the Corporation, or
(ii) past services rendered to the Corporation (or any
Parent or Subsidiary).
B. Vesting/Issuance Provisions.
---------------------------
1. The Plan Administrator may issue shares of Common Stock
which are fully and immediately vested upon issuance or which are to vest in one
or more installments over the Participant's period of Service or upon attainment
of specified performance objectives. Alternatively, the Plan Administrator may
issue share right awards which shall entitle the recipient to receive a
specified number of vested shares of Common Stock upon the attainment of one or
more performance goals or Service requirements established by the Plan
Administrator.
2. Any new, substituted or additional securities or other
property (including money paid other than as a regular cash dividend) which the
Participant may have the right to receive with respect to his or her unvested
shares of Common Stock by reason of any stock dividend, stock split,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation's
receipt of consideration shall be issued subject to (i) the same vesting
requirements applicable to the Participant's unvested shares of Common Stock and
(ii) such escrow arrangements as the Plan Administrator shall deem appropriate.
3. The Participant shall have full shareholder rights with
respect to the issued shares of Common Stock, whether or not the Participant's
interest in those shares is
10.
<PAGE>
vested. Accordingly, the Participant shall have the right to vote such shares
and to receive any regular cash dividends paid on such shares.
4. Should the Participant cease to remain in Service while
holding one or more unvested shares of Common Stock, or should the performance
objectives not be attained with respect to one or more such unvested shares of
Common Stock, then those shares shall be immediately surrendered to the
Corporation for cancellation, and the Participant shall have no further
shareholder rights with respect to those shares. To the extent the surrendered
shares were previously issued to the Participant for consideration paid in cash
or cash equivalent (including the Participant's purchase-money indebtedness),
the Corporation shall repay to the Participant the cash consideration paid for
the surrendered shares and shall cancel the unpaid principal balance of any
outstanding purchase-money note of the Participant attributable to the
surrendered shares.
5. The Plan Administrator may waive the surrender and
cancellation of one or more unvested shares of Common Stock (or other assets
attributable thereto) which would otherwise occur upon the cessation of the
Participant's Service or the non-attainment of the performance objectives
applicable to those shares. Such waiver shall result in the immediate vesting of
the Participant's interest in the shares of Common Stock as to which the waiver
applies. Such waiver may be effected at any time, whether before or after the
Participant's cessation of Service or the attainment or non-attainment of the
applicable performance objectives.
6. Outstanding share right awards shall automatically
terminate, and no shares of Common Stock shall actually be issued in
satisfaction of those awards, if the performance goals or Service requirements
established for such awards are not attained. The Plan Administrator, however,
shall have the authority to issue shares of Common Stock in satisfaction of one
or more outstanding share right awards as to which the designated performance
goals or Service requirements are not attained.
II. CHANGE IN CONTROL
A. All of the Corporation's outstanding repurchase rights shall
terminate automatically, and all the shares of Common Stock subject to those
terminated rights shall immediately vest in full, in the event of any Change in
Control, except to the extent (i) those repurchase rights are assigned to the
successor corporation (or parent thereof) or otherwise continue in full force
and effect pursuant to the terms of the Change in Control or (ii) such
accelerated vesting is precluded by other limitations imposed by the Plan
Administrator at the time the repurchase right is issued.
B. The Plan Administrator may at any time provide for the automatic
termination of one or more of those outstanding repurchase rights and the
immediate vesting of the shares of Common Stock subject to those terminated
rights upon (i) a Change in Control or (ii) an Involuntary Termination of the
Participant's Service within a designated period (not to exceed twelve (12)
months) following the effective date of any Change in Control in which those
repurchase rights are assigned to the successor corporation (or parent thereof)
or otherwise continue in full force and effect.
11.
<PAGE>
III. SHARE ESCROW/LEGENDS
Unvested shares may, in the Plan Administrator's discretion, be held
in escrow by the Corporation until the Participant's interest in such shares
vests or may be issued directly to the Participant with restrictive legends on
the certificates evidencing those unvested shares.
12.
<PAGE>
ARTICLE FOUR
AUTOMATIC OPTION GRANT PROGRAM
------------------------------
I. OPTION TERMS
A. Grant Dates. Options shall be made on the dates specified below:
------------
1. Each individual serving as a non-employee Board member on
the Plan Effective Date shall automatically be granted on such date a Non-
Statutory Option to purchase Twenty-Four Thousand (24,000) shares of Common
Stock, provided such individual has not previously been in the employ of the
Corporation or any Parent or Subsidiary.
2. Each individual who is first elected or appointed as a
non-employee Board member on or at any time after the Plan Effective Date shall
automatically be granted, on the date of such initial election or appointment, a
Non-Statutory Option to purchase Twenty-Four Thousand (24,000) shares of Common
Stock, provided such individual has not previously been in the employ of the
Corporation or any Parent or Subsidiary.
3. On the date of each Annual Shareholders Meeting held
after the Plan Effective Date, beginning with the 1999 Annual Shareholders
Meetings, each individual who is to continue to serve as a non-employee Board
member, whether or not that individual is standing for re-election to the Board,
shall automatically be granted a Non-Statutory Option to purchase Five Thousand
(5,000) shares of Common Stock, provided such individual has served as a non-
employee Board member for at least six (6) months.
B. Exercise Price.
---------------
1. The exercise price per share shall be equal to one
hundred percent (100%) of the Fair Market Value per share of Common Stock on the
option grant date.
2. The exercise price shall be payable in one or more of the
alternative forms authorized under the Discretionary Option Grant Program.
Except to the extent the sale and remittance procedure specified thereunder is
utilized, payment of the exercise price for the purchased shares must be made on
the Exercise Date.
C. Option Term. Each option shall have a term of ten (10) years
------------
measured from the option grant date.
D. Exercise and Vesting of Options. Each option shall be
--------------------------------
immediately exercisable for any or all of the option shares. However, any shares
purchased under the option shall be subject to repurchase by the Corporation, at
the exercise price paid per share, upon the Optionee's cessation of Board
service prior to vesting in those shares. Each initial Twenty-Four Thousand
(24,000)-share option shall vest, and the Corporation's repurchase right shall
13.
<PAGE>
lapse, in a series of three (3) successive equal annual installments upon the
Optionee's completion of each year of Board service over the three (3)-year
period measured from the grant date. Each annual Five Thousand (5,000)-share
option shall vest, and the Corporation's repurchase right shall lapse, upon the
Optionee's completion of one (1) year of Board service measured from the grant
date.
E. Cessation of Board Service. The following provisions shall
---------------------------
govern the exercise of any options outstanding at the time of the Optionee's
cessation of Board service:
(i) Any option outstanding at the time of the Optionee's
cessation of Board service for any reason shall remain exercisable for a
twelve (12)-month period following the date of such cessation of Board
service, but in no event shall such option be exercisable after the
expiration of the option term.
(ii) Any option exercisable in whole or in part by the
Optionee at the time of death may be subsequently exercised by his or her
Beneficiary.
(iii) Following the Optionee's cessation of Board service, the
option may not be exercised in the aggregate for more than the number of
shares in which the Optionee was vested on the date of such cessation of
Board service. Upon the expiration of the applicable exercise period or (if
earlier) upon the expiration of the option term, the option shall terminate
and cease to be outstanding for any vested shares for which the option has
not been exercised. However, the option shall, immediately upon the
Optionee's cessation of Board service, terminate and cease to be
outstanding for any and all shares in which the Optionee is not otherwise
at that time vested.
(iv) However, should the Optionee cease to serve as a Board
member by reason of death or Permanent Disability, then all shares at the
time subject to the option shall immediately vest so that such option may,
during the twelve (12)-month exercise period following such cessation of
Board service, be exercised for all or any portion of those shares as
fully-vested shares of Common Stock.
II. CHANGE IN CONTROL
A. In the event of any Change in Control, the shares of Common
Stock at the time subject to each outstanding option but not otherwise vested
shall automatically vest in full so that each such option may, immediately prior
to the effective date of such Change in Control, be exercised for all or any
portion of those shares as fully-vested shares of Common Stock. Each such option
accelerated in connection with a Change in Control shall terminate upon the
Change in Control, except to the extent assumed by the successor corporation (or
parent thereof) or otherwise continued in full force and effect pursuant to the
terms of the Change in Control.
B. All outstanding repurchase rights shall also terminate
automatically, and the shares of Common Stock subject to those terminated rights
shall immediately vest in full, in the event of any Change in Control.
14.
<PAGE>
C. Each option which is assumed in connection with a Change in
Control shall be appropriately adjusted to apply to the number and class of
securities which would have been issuable to the Optionee in consummation of
such Change in Control had the option been exercised immediately prior to such
Change in Control. Appropriate adjustments shall also be made to the exercise
price payable per share under each outstanding option, provided the aggregate
--------
exercise price payable for such securities shall remain the same.
III. REMAINING TERMS
The remaining terms of each option granted under the Automatic Option
Grant Program shall be the same as the terms in effect for options made under
the Discretionary Option Grant Program.
15.
<PAGE>
ARTICLE FIVE
MISCELLANEOUS
-------------
I. NO IMPAIRMENT OF AUTHORITY
Outstanding awards shall in no way affect the right of the Corporation
to adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.
II. FINANCING
The Plan Administrator may permit any Optionee or Participant to pay
the option exercise price under the Discretionary Option Grant Program or the
purchase price of shares issued under the Stock Issuance Program by delivering a
full-recourse, interest bearing promissory note payable in one or more
installments. The terms of any such promissory note (including the interest
rate and the terms of repayment) shall be established by the Plan Administrator
in its sole discretion. In no event may the maximum credit available to the
Optionee or Participant exceed the sum of (i) the aggregate option exercise
price or purchase price payable for the purchased shares plus (ii) any Federal,
state and local income and employment tax liability incurred by the Optionee or
the Participant in connection with the option exercise or share purchase.
III. TAX WITHHOLDING
A. The Corporation's obligation to deliver shares of Common Stock
upon the exercise of options or the issuance or vesting of such shares under the
Plan shall be subject to the satisfaction of all applicable Federal, state and
local income and employment tax withholding requirements.
B. The Plan Administrator may, in its discretion, provide any or
all holders of Non-Statutory Options or unvested shares of Common Stock under
the Plan with the right to use shares of Common Stock in satisfaction of all or
part of the Taxes incurred by such holders in connection with the exercise of
their options or the vesting of their shares. Such right may be provided to any
such holder in either or both of the following formats:
Stock Withholding: The election to have the Corporation
-----------------
withhold, from the shares of Common Stock otherwise issuable upon the exercise
of such Non-Statutory Option or the vesting of such shares, a portion of those
shares with an aggregate Fair Market Value equal to the percentage of the Taxes
(not to exceed one hundred percent (100%)) designated by the holder.
Stock Delivery: The election to deliver to the Corporation, at
--------------
the time the Non-Statutory Option is exercised or the shares vest, one or more
shares of Common Stock previously acquired by such holder (other than in
connection with the option exercise or share vesting triggering the Taxes) with
an aggregate Fair Market Value equal to the percentage of the Taxes (not to
exceed one hundred percent (100%)) designated by the holder.
16.
<PAGE>
IV. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan shall become effective immediately upon the Plan
Effective Date. Options may be granted under the Discretionary Option Grant or
Automatic Option Grant Program at any time on or after the Plan Effective Date.
B. The Plan shall serve as the successor to the Predecessor Plans,
and no further options or other stock awards, shall be made under the
Predecessor Plans after the Plan Effective Date. All options outstanding under
the Predecessor Plan on the Plan Effective Date shall be incorporated into the
Plan at that time and shall be treated as outstanding options under the Plan.
However, each outstanding option so incorporated shall continue to be governed
solely by the terms of the documents evidencing such option, and no provision of
the Plan shall be deemed to affect or otherwise modify the rights or obligations
of the holders of such incorporated options with respect to their acquisition of
shares of Common Stock.
C. One or more provisions of the Plan, including (without
limitation) the option/vesting acceleration provisions of Article Two relating
to Changes in Control, may, in the Plan Administrator's discretion, be extended
to one or more options incorporated from the Predecessor Plans which do not
otherwise contain such provisions.
D. The Plan shall terminate upon the earliest of (i) the expiration
--------
of the ten (10)-year period measured from and after the Plan Effective Date,
(ii) the date on which all shares available for issuance under the Plan shall
have been issued as fully-vested shares or (iii) the termination of all
outstanding options in connection with a Change in Control. Upon such plan
termination, all outstanding options and unvested stock issuances shall
thereafter continue to have force and effect in accordance with the provisions
of the documents evidencing such grants or issuances.
V. AMENDMENT OF THE PLAN
A. The Board shall have complete and exclusive power and authority
to amend or modify the Plan in any or all respects. However, no such amendment
or modification shall adversely affect the rights and obligations with respect
to stock options or unvested stock issuances at the time outstanding under the
Plan unless the Optionee or the Participant consents to such amendment or
modification. In addition, certain amendments may require shareholder approval
pursuant to applicable laws or regulations.
B. Options to purchase shares of Common Stock may be granted under
the Discretionary Option Grant Program and shares of Common Stock may be issued
under the Stock Issuance Program that are in each instance in excess of the
number of shares then available for issuance under the Plan, provided any excess
shares actually issued under those programs shall be held in escrow until there
is obtained shareholder approval of an amendment sufficiently increasing the
number of shares of Common Stock available for issuance under the Plan. If such
shareholder approval is not obtained within twelve (12) months after the date
the first such excess issuances are made, then (i) any unexercised options
granted on the basis of such excess shares shall terminate and cease to be
outstanding and (ii) the Corporation shall promptly refund to the Optionees and
the Participants the exercise or purchase price paid for any excess shares
17.
<PAGE>
issued under the Plan and held in escrow, together with interest (at the
applicable Short Term Federal Rate) for the period the shares were held in
escrow, and such shares shall thereupon be automatically cancelled and cease to
be outstanding.
VI. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares
of Common Stock under the Plan shall be used for general corporate purposes.
VII. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any stock option
under the Plan and the issuance of any shares of Common Stock (i) upon the
exercise of any granted option or (ii) under the Stock Issuance Program shall be
subject to the Corporation's procurement of all approvals and permits required
by regulatory authorities having jurisdiction over the Plan, the stock options
granted under it and the shares of Common Stock issued pursuant to it.
B. No shares of Common Stock or other assets shall be issued or
delivered under the Plan unless and until there shall have been compliance with
all applicable requirements of Federal and state securities laws, including the
filing and effectiveness of the Form S-8 registration statement for the shares
of Common Stock issuable under the Plan, and all applicable listing requirements
of any stock exchange (or the Nasdaq National Market, if applicable) on which
Common Stock is then listed for trading.
VIII. NO EMPLOYMENT/SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee or the Participant
any right to continue in Service for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Corporation
(or any Parent or Subsidiary employing or retaining such person) or of the
Optionee or the Participant, which rights are hereby expressly reserved by each,
to terminate such person's Service at any time for any reason, with or without
cause.
18.
<PAGE>
APPENDIX
--------
The following definitions shall be in effect under the Plan:
A. Automatic Option Grant Program shall mean the automatic option
------------------------------
grant program in effect under the Plan.
B. Beneficiary shall mean, in the event the Plan Administrator
-----------
implements a beneficiary designation procedure, the person designated by an
Optionee or Participant, pursuant to such procedure, to succeed to such person's
rights under any outstanding awards held by him or her at the time of death. In
the absence of such designation or procedure, the Beneficiary shall be the
personal representative of the estate of the Optionee or Participant or the
person or persons to whom the award is transferred by will or the laws of
descent and distribution.
C. Board shall mean the Corporation's Board of Directors.
-----
D. Change in Control shall mean a change in ownership or control of
-----------------
the Corporation effected through any of the following transactions:
(i) a merger, consolidation or reorganization approved by the
Corporation's shareholders, unless securities representing more than fifty
------
percent (50%) of the total combined voting power of the voting securities
of the successor corporation are immediately thereafter beneficially owned,
directly or indirectly and in substantially the same proportion, by the
persons who beneficially owned the Corporation's outstanding voting
securities immediately prior to such transaction,
(ii) any shareholder-approved transfer or other disposition of
all or substantially all of the Corporation's assets, or
(iii) the acquisition, directly or indirectly by any person or
related group of persons (other than the Corporation or a person that directly
or indirectly controls, is controlled by, or is under common control with, the
Corporation), of beneficial ownership (within the meaning of Rule 13d-3 of the
1934 Act) of securities possessing more than eighty percent (80%) of the total
combined voting power of the Corporation's outstanding securities pursuant to a
tender or exchange offer made directly to the Corporation's shareholders.
E. Code shall mean the Internal Revenue Code of 1986, as amended.
----
F. Common Stock shall mean the Corporation's common stock.
------------
19.
<PAGE>
G. Corporation shall mean DTM Corporation, a Texas corporation, and
-----------
its successors.
H. Discretionary Option Grant Program shall mean the discretionary
----------------------------------
option grant program in effect under the Plan.
I. Employee shall mean an individual who is in the employ of the
--------
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
J. Exercise Date shall mean the date on which the Corporation shall
-------------
have received written notice of the option exercise.
K. Fair Market Value per share of Common Stock on any relevant date
-----------------
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question, as such price is
reported on the Nasdaq National Market or any successor system. If there is
no closing selling price for the Common Stock on the date in question, then
the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question on the Stock Exchange
determined by the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape of
transactions on such exchange. If there is no closing selling price for the
Common Stock on the date in question, then the Fair Market Value shall be
the closing selling price on the last preceding date for which such
quotation exists.
L. Incentive Option shall mean an option which satisfies the
----------------
requirements of Code Section 422.
M. Involuntary Termination shall mean the termination of the
-----------------------
Service of any individual which occurs by reason of:
(i) such individual's involuntary dismissal or discharge by
the Corporation for reasons other than Misconduct, or
(ii) such individual's voluntary resignation following (A) a
change in his or her position with the Corporation or Parent or Subsidiary
employing the individual which materially reduces his or her duties and
responsibilities or the level of management to which he or she reports, (B)
a reduction in his or her level of compensation (including base salary,
fringe benefits and target bonus under any performance based bonus or
incentive
20.
<PAGE>
programs) by more than fifteen percent (15%) or (C) a relocation of such
individual's place of employment by more than fifty (50) miles, provided
and only if such change, reduction or relocation is effected by the
Corporation without the individual's consent.
N. Misconduct shall mean the commission of any act of fraud,
----------
embezzlement or dishonesty by the Optionee or Participant, any unauthorized use
or disclosure by such person of confidential information or trade secrets of the
Corporation (or any Parent or Subsidiary), or any intentional wrongdoing by such
person, whether by omission or commission, which adversely affects the business
or affairs of the Corporation (or any Parent or Subsidiary) in a material
manner. This shall not limit the grounds for the dismissal or discharge of any
person in the Service of the Corporation (or any Parent or Subsidiary).
O. 1934 Act shall mean the Securities Exchange Act of 1934, as
--------
amended.
P. Non-Statutory Option shall mean an option not intended to
--------------------
satisfy the requirements of Code Section 422.
Q. Optionee shall mean any person to whom an option is granted
--------
under the Discretionary Option Grant or Automatic Option Grant Program.
R. Parent shall mean any corporation (other than the Corporation)
------
in an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
S. Participant shall mean any person who is issued shares of Common
-----------
Stock under the Stock Issuance Program.
T. Permanent Disability or Permanently Disabled shall mean the
--------------------------------------------
inability of the Optionee or the Participant to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment expected to result in death or to be of continuous duration of twelve
(12) months or more. However, solely for purposes of the Automatic Option Grant
Program, Permanent Disability or Permanently Disabled shall mean the inability
of the non-employee Board member to perform his or her usual duties as a Board
member by reason of any medically determinable physical or mental impairment
expected to result in death or to be of continuous duration of twelve (12)
months or more.
U. Plan shall mean the Corporation's 1999 Stock Incentive Plan, as
----
set forth in this document.
V. Plan Administrator shall mean the particular entity, whether the
------------------
Primary Committee, the Board or the Secondary Committee, which is authorized to
administer the Discretionary Option Grant and Stock Issuance Programs with
respect to one or more classes of eligible persons, to the extent such entity is
carrying out its administrative functions under those programs with respect to
the persons under its jurisdiction. However, the Primary Committee shall have
the plenary authority to make all factual determinations and to construe and
interpret
21.
<PAGE>
any and all ambiguities under the Plan to the extent such authority is not
otherwise expressly delegated to any other Plan Administrator.
W. Plan Effective Date shall mean the date on which the Plan is
-------------------
approved by the Corporation's shareholders.
X. Predecessor Plans shall mean the Corporation's 1996 and 1998
-----------------
Stock Option Plans.
Y. Primary Committee shall mean the committee of two (2) or more
-----------------
non-employee Board members appointed by the Board to administer the
Discretionary Option Grant and Stock Issuance Programs with respect to Section
16 Insiders.
Z. Secondary Committee shall mean a committee of one (1) or more
-------------------
Board members appointed by the Board to administer the Discretionary Option
Grant and Stock Issuance Programs with respect to eligible persons other than
Section 16 Insiders.
AA. Section 16 Insider shall mean an officer or director of the
------------------
Corporation subject to the short-swing profit liabilities of Section 16 of the
1934 Act.
BB. Service shall mean the performance of services for the
-------
Corporation (or any Parent or Subsidiary) by a person in the capacity of an
Employee, a non-employee member of the board of directors or a consultant or
independent advisor, except to the extent otherwise specifically provided in the
documents evidencing the option grant or stock issuance.
CC. Stock Exchange shall mean either the American Stock Exchange or
--------------
the New York Stock Exchange.
DD. Stock Issuance Program shall mean the stock issuance program in
----------------------
effect under the Plan.
EE. Subsidiary shall mean any corporation (other than the
----------
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in the
unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
FF. Taxes shall mean the withholding taxes payable by the holder of
-----
Non-Statutory Options or unvested shares of Common Stock in connection with the
exercise of those options or the vesting of those shares.
GG. 10% Shareholder shall mean the owner of stock (as determined
---------------
under Code Section 424(d)) possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Corporation (or any Parent
or Subsidiary).
22.
<PAGE>
EXHIBIT 99.2
DTM CORPORATION
NOTICE OF GRANT OF STOCK OPTION
-------------------------------
Notice is hereby given of the following option grant (the "Option") to
purchase shares of the Common Stock of DTM Corporation (the "Corporation"):
Optionee:
-------- ------------------------------------------------------------
Grant Date:
---------- ----------------------------------------------------------
Vesting Commencement Date:
------------------------- -------------------------------------------
Exercise Price: $ per share
-------------- -------------------------------------------
Number of Option Shares: shares
----------------------- --------------------------------------
Expiration Date:
--------------- -----------------------------------------------------
Type of Option: Incentive Stock Option
-------------- ------
Non-Statutory Stock Option
------
Exercise Schedule: The Option Shares shall become exercisable in a
-----------------
series of installments over the three (3)-year period of Optionee's
Service measured from and after the Vesting Commencement Date in
accordance with the following schedule:
<TABLE>
<CAPTION>
Number of Option Percentage of Total Option
Shares To Become Shares To Become
Date Exercisable Exercisable
-------------------------- ----------------------- --------------------------
<S> <C> <C>
[First Anniversary of _____ shares 35%
Vesting Commencement Date]
[Second Anniversary of additional _____ shares additional 35%
Vesting Commencement Date]
[Third Anniversary of additional _____ shares additional 30%
Vesting Commencement Date]
</TABLE>
In no event shall the Option become exercisable for any additional
Option Shares after Optionee's cessation of Service.
Optionee understands and agrees that the Option is granted subject to
and in accordance with the terms of the DTM Corporation 1999 Stock Incentive
Plan (the "Plan"). Optionee further agrees to be bound by the terms of the Plan
and the terms of the Option as set forth in the Stock Option Agreement attached
hereto as Exhibit A. A copy of the Plan is available upon request made to the
---------
Corporate Secretary at the Corporation's principal offices.
<PAGE>
No Employment or Service Contract. Nothing in this Notice or in the
---------------------------------
attached Stock Option Agreement or in the Plan shall confer upon Optionee any
right to continue in Service for any period of specific duration or interfere
with or otherwise restrict in any way the rights of the Corporation (or any
Parent or Subsidiary employing or retaining Optionee) or of Optionee, which
rights are hereby expressly reserved by each, to terminate Optionee's Service at
any time for any reason, with or without cause.
Definitions. All capitalized terms in this Notice shall have the
-----------
meaning assigned to them in this Notice or in the attached Stock Option
Agreement.
DATED:_______________________, 199 ___
DTM CORPORATION
By:
---------------------------------------------
Title:
------------------------------------------
------------------------------------------------
OPTIONEE
Address:
----------------------------------------
------------------------------------------------
ATTACHMENT
- ----------
Exhibit A - Stock Option Agreement
2.
<PAGE>
EXHIBIT A
---------
STOCK OPTION AGREEMENT
----------------------
<PAGE>
EXHIBIT 99.3
DTM CORPORATION
STOCK OPTION AGREEMENT
----------------------
RECITALS
- --------
A. The Board has adopted the Plan for the purpose of retaining the
services of selected Employees, non-employee members of the Board or of the
board of directors of any Parent or Subsidiary and consultants and other
independent advisors who provide services to the Corporation (or any Parent or
Subsidiary).
B. Optionee is to render valuable services to the Corporation (or a
Parent or Subsidiary), and this Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection with the
Corporation's grant of an option to Optionee.
C. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. Grant of Option. The Corporation hereby grants to Optionee, as of
---------------
the Grant Date, an option to purchase up to the number of Option Shares
specified in the Grant Notice. The Option Shares shall be purchasable from time
to time during the option term specified in paragraph 2 at the Exercise Price.
2. Option Term. This option shall have a maximum term of ten (10)
-----------
years measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.
3. Limited Transferability.
------------------------
(a) This option shall be neither transferable nor assignable by
Optionee other than by will or the laws of inheritance following Optionee's
death and may be exercised, during Optionee's lifetime, only by Optionee.
However, Optionee may designate one or more persons as the beneficiary or
beneficiaries of this option, and this option shall, in accordance with such
designation, automatically be transferred to such beneficiary or beneficiaries
upon Optionee's death while holding this option. Such beneficiary or
beneficiaries shall take the transferred option subject to all the terms and
conditions of this Agreement, including (without limitation) the limited time
period during which this option may, pursuant to Paragraph 5, be exercised
following Optionee's death.
(b) If this option is designated a Non-Statutory Option in the
Grant Notice, then this option may be assigned in whole or in part during
Optionee's lifetime pursuant to a domestic relations order or to one or more
members of Optionee's immediate family or to a trust established for the
exclusive benefit of one or more such family members. The assigned portion shall
be exercisable only by the person or persons who acquire a proprietary interest
in the option pursuant to such assignment. The terms applicable to the assigned
portion shall be the same as those in effect for this option immediately prior
to such assignment.
<PAGE>
4. Dates of Exercise. This option shall become exercisable for the
-----------------
Option Shares in one or more installments as specified in the Grant Notice. As
the option becomes exercisable for such installments, those installments shall
accumulate, and the option shall remain exercisable for the accumulated
installments until the Expiration Date or sooner termination of the option term
under Paragraph 5 or 6.
5. Cessation of Service. The option term specified in Paragraph 2 shall
--------------------
terminate (and this option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:
(i) Should Optionee cease to remain in Service for any reason
(other than death, Permanent Disability, Retirement or Misconduct) while this
option is outstanding, then this option shall remain exercisable until the
earlier of (i) the expiration of the three (3)-month period measured from the
-------
date of such cessation of Service or (ii) the Expiration Date.
(ii) Should Optionee die while holding this option, then the
personal representative of Optionee's estate or the person or persons to whom
the option is transferred pursuant to Optionee's will or the laws of
inheritance shall have the right to exercise this option. However, if Optionee
has designated one or more beneficiaries of this option, then those persons
shall have the exclusive right to exercise this option following Optionee's
death. Any such right to exercise this option shall lapse, and this option
shall cease to be outstanding, upon the earlier of (i) the expiration of the
-------
twelve (12)-month period measured from the date of Optionee's death or (ii)
the Expiration Date.
(iii) Should Optionee cease Service by reason of Permanent
Disability or Retirement while this option is outstanding, then this option
shall remain exercisable until the earlier of (i) the expiration of the twelve
-------
(12)-month period measured from the date of such cessation of Service or (ii)
the Expiration Date.
(iv) During the applicable post-Service exercise period, this
option may not be exercised in the aggregate for more than the number of
vested Option Shares for which the option is exercisable on the date of
Optionee's cessation of Service. Upon the expiration of the applicable
exercise period or (if earlier) upon the Expiration Date, this option shall
terminate and cease to be outstanding for any vested Option Shares for which
the option has not been exercised. However, this option shall, immediately
upon Optionee's cessation of Service for any reason, terminate and cease to be
outstanding to the extent this option is not otherwise at that time
exercisable for vested shares.
(v) Should Optionee's Service be terminated for Misconduct or
should Optionee engage in Misconduct while this option is outstanding, then
this option shall terminate immediately and cease to be outstanding.
(vi) In the event of a Change in Control, the provisions of
Paragraph 6 shall govern the period for which this option is to remain
exercisable
2
<PAGE>
following Optionee's cessation of Service and shall supersede any provisions
to the contrary in this Paragraph.
6. Change in Control.
-----------------
(a) This option, to the extent outstanding at the time of a Change in
Control but not otherwise fully exercisable, shall automatically accelerate so
that this option shall, immediately prior to the effective date of such Change
in Control, become exercisable for all of the Option Shares at the time subject
to this option and may be exercised for any or all of those option shares as
fully vested shares of Common Stock. No such acceleration of this option shall
occur, however, if and to the extent: (i) this option is, in connection with the
Change in Control, assumed or otherwise continued in full force and effect by
the successor corporation (or parent thereof) pursuant to the terms of the
Change in Control or (ii) this option is replaced with a cash incentive program
of the successor corporation which preserves the spread existing at the time of
the Change in Control on the shares of Common Stock for which this option is not
otherwise at that time exercisable (the excess of the Fair Market Value of those
shares over the Exercise Price payable for such shares) and provides for
subsequent pay-out in accordance with the Exercise Schedule set forth in the
Grant Notice.
(b) Immediately following the consummation of the Change in Control,
this option shall terminate and cease to be outstanding, except to the extent
assumed by the successor corporation (or parent thereof) or otherwise expressly
continued in full force and effect pursuant to the terms of the Change in
Control.
(c) If this option is assumed in the Change in Control, then this
option shall be appropriately adjusted, immediately after such Change in
Control, to apply to the number and class of securities which would have been
issuable to Optionee in consummation of the Change in Control if the option had
been exercised immediately prior to such Change in Control, and the appropriate
adjustments shall also be made to the Exercise Price; provided the aggregate
--------
Exercise Price shall remain the same.
(d) To the extent this option does not accelerate in connection with
a Change in Control, the option shall continue, over Optionee's period of
Service after the Change in Control, to become exercisable for the Option Shares
in one or more installments in accordance with the Exercise Schedule set forth
in the Grant Notice. However, immediately upon an Involuntary Termination of
Optionee's Service within twelve (12) months following such Change in Control,
this option, to the extent outstanding at that time but not otherwise fully
exercisable, shall automatically accelerate so that the option shall become
immediately exercisable for all the Option Shares at the time subject to the
option and may be exercised for any or all of those Option Shares as fully
vested shares of Common Stock. The option as so accelerated shall remain so
exercisable until the earlier of (i) the Expiration Date or (ii) the
-------
expiration of the one (1)-year period measured from the date of Optionee's
Involuntary Termination.
(e) This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure
3
<PAGE>
or to merge, consolidate, dissolve, liquidate or sell or transfer all or any
part of its business or assets.
7. Adjustment in Option Shares. Should any change be made to the Common
---------------------------
Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.
8. Shareholder Rights. The holder of this option shall not have any
------------------
shareholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.
9. Manner of Exercising Option. In order to exercise this option with
---------------------------
respect to all or any part of the Option Shares for which this option is at the
time exercisable, Optionee (or any other person or persons exercising the
option) must take the following actions:
(i) Execute and deliver to the Corporation a Notice of Exercise
for the Option Shares for which the option is exercised.
(ii) Pay the aggregate Exercise Price for the purchased shares in
one or more of the following forms:
(A) cash or check made payable to the Corporation;
(B) a promissory note payable to the Corporation, but only
to the extent authorized by the Plan Administrator in accordance
with Paragraph 13;
(C) shares of Common Stock held by Optionee (or any other
person or persons exercising the option) for the requisite period
necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on
the Exercise Date; or
(D) through a special sale and remittance procedure
pursuant to which Optionee (or any other person or persons
exercising the option) shall concurrently provide irrevocable
instructions (I) to a Corporation-approved brokerage firm to
effect the immediate sale of the purchased shares and remit to
the Corporation, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate Exercise
Price payable for the purchased shares plus all applicable income
and employment taxes required to be withheld by the Corporation
by reason of such exercise and (II) to the Corporation to deliver
the certificates for the purchased shares directly to such
brokerage firm in order to complete the sale.
4
<PAGE>
Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the
Exercise Price must accompany the Notice of Exercise delivered to
the Corporation in connection with the option exercise.
(iii) Furnish to the Corporation appropriate documentation
that the person or persons exercising the option (if other than Optionee)
have the right to exercise this option.
(iv) Make appropriate arrangements with the Corporation
(or Parent or Subsidiary employing or retaining Optionee) for the
satisfaction of all income and employment tax withholding requirements
applicable to the option exercise.
(b) As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate for the purchased Option Shares,
with the appropriate legends affixed thereto.
(c) In no event may this option be exercised for any fractional
shares.
10. Compliance with Laws and Regulations.
------------------------------------
(a) The exercise of this option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the Corporation and
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange (or the Nasdaq National Market, if
applicable) on which the Common Stock may be listed for trading at the time of
such exercise and issuance.
(b) The inability of the Corporation to obtain approval from any
regulatory body having authority deemed by the Corporation to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option shall
relieve the Corporation of any liability with respect to the non-issuance or
sale of the Common Stock as to which such approval shall not have been obtained.
The Corporation, however, shall use its best efforts to obtain all such
approvals.
11. Successors and Assigns. Except to the extent otherwise provided
----------------------
in Paragraphs 3 and 6, the provisions of this Agreement shall inure to the
benefit of, and be binding upon, the Corporation and its successors and assigns
and Optionee and Optionee's assigns and beneficiaries.
12. Notices. Any notice required to be given or delivered to the
-------
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to be
given or delivered to Optionee shall be in writing and addressed to Optionee at
the address indicated below Optionee's signature line on the Grant Notice. All
notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.
13. Financing. The Plan Administrator may, in its absolute
---------
discretion and without any obligation to do so, permit Optionee to pay the
Exercise Price for the purchased
5
<PAGE>
Option Shares by delivering a full-recourse promissory note payable to the
Corporation. The terms of any such promissory note (including the interest
rate, the requirements for collateral and the terms of repayment) shall be
established by the Plan Administrator in its sole discretion.
14. Construction. This Agreement and the option evidenced hereby are
------------
made and granted pursuant to the Plan and are in all respects limited by and
subject to the terms of the Plan. All decisions of the Plan Administrator with
respect to any question or issue arising under the Plan or this Agreement shall
be conclusive and binding on all persons having an interest in this option.
15. Governing Law. The interpretation, performance and enforcement
-------------
of this Agreement shall be governed by the laws of the State of Texas without
resort to that State's conflict-of-laws rules.
16. Excess Shares. If the Option Shares covered by this Agreement
-------------
exceed, as of the Grant Date, the number of shares of Common Stock which may
without shareholder approval be issued under the Plan, then this option shall be
void with respect to those excess shares, unless shareholder approval of an
amendment sufficiently increasing the number of shares of Common Stock issuable
under the Plan is obtained in accordance with the provisions of the Plan.
17. Additional Terms Applicable to an Incentive Option. In the event
--------------------------------------------------
this option is designated an Incentive Option in the Grant Notice, the following
terms and conditions shall also apply to the grant:
(i) This option shall cease to qualify for favorable tax
treatment as an Incentive Option if (and to the extent) this option is
exercised for one or more Option Shares: (A) more than three (3) months
after the date Optionee ceases to be an Employee for any reason other than
death or Permanent Disability or (B) more than twelve (12) months after the
date Optionee ceases to be an Employee by reason of Permanent Disability.
(ii) No installment under this option shall qualify for
favorable tax treatment as an Incentive Option if (and to the extent) the
aggregate Fair Market Value (determined at the Grant Date) of the Common
Stock for which such installment first becomes exercisable hereunder would,
when added to the aggregate value (determined as of the respective date or
dates of grant) of the Common Stock or other securities for which this
option or any other Incentive Options granted to Optionee prior to the
Grant Date (whether under the Plan or any other option plan of the
Corporation or any Parent or Subsidiary) first become exercisable during
the same calendar year, exceed One Hundred Thousand Dollars ($100,000) in
the aggregate. Should such One Hundred Thousand Dollar ($100,000)
limitation be exceeded in any calendar year, this option shall nevertheless
become exercisable for the excess shares in such calendar year as a Non-
Statutory Option.
(iii) Should the exercisability of this option be accelerated
upon a Change in Control, then this option shall qualify for favorable tax
treatment as an
6
<PAGE>
Incentive Option only to the extent the aggregate Fair Market Value
(determined at the Grant Date) of t he Common Stock for which this option
first becomes exercisable in the calendar year in which the Change in
Control occurs does not, when added to the aggregate value (determined as
of the respective date or dates of grant) of the Common Stock or other
securities for which this option or one or more other Incentive Options
granted to Optionee prior to the Grant Date (whether under the Plan or any
other option plan of the Corporation or any Parent or Subsidiary) first
become exercisable during the same calendar year, exceed One Hundred
Thousand Dollars ($100,000) in the aggregate. Should the applicable One
Hundred Thousand Dollar ($100,000) limitation be exceeded in the calendar
year of such Change in Control, the option may nevertheless be exercised
for the excess shares in such calendar year as a Non-Statutory Option.
(iv) Should Optionee hold, in addition to this option, one or
more other options to purchase Common Stock which become exercisable for
the first time in the same calendar year as this option, then the foregoing
limitations on the exercisability of such options as Incentive Options
shall be applied on the basis of the order in which such options are
granted.
7
<PAGE>
APPENDIX
--------
The following definitions shall be in effect under the Agreement:
A. Agreement shall mean this Stock Option Agreement.
---------
B. Board shall mean the Corporation's Board of Directors.
-----
C. Change in Control shall mean a change in ownership or control of
-----------------
the Corporation effected through any of the following transactions:
(i) a merger, consolidation or reorganization approved by the
Corporation's shareholders, unless securities representing more than fifty
------
percent (50%) of the total combined voting power of the voting securities of the
successor corporation are immediately thereafter beneficially owned, directly or
indirectly and in substantially the same proportion, by the persons who
beneficially owned the Corporation's outstanding voting securities immediately
prior to such transaction,
(ii) any shareholder-approved transfer or other disposition of
all or substantially all of the Corporation's assets, or
(iii) the acquisition, directly or indirectly by any person or
related group of persons (other than the Corporation or a person that directly
or indirectly controls, is controlled by, or is under common control with, the
Corporation), of beneficial ownership (within the meaning of Rule 13d-3 of the
1934 Act) of securities possessing more than eighty percent (80%) of the total
combined voting power of the Corporation's outstanding securities pursuant to a
tender or exchange offer made directly to the Corporation's shareholders which
the Board recommends such shareholders to accept.
D. Code shall mean the Internal Revenue Code of 1986, as amended.
----
E. Common Stock shall mean the Corporation's common stock.
------------
F. Corporation shall mean DTM Corporation, a Texas corporation and
-----------
any successor corporation to all or substantially all of the assets or voting
stock of DTM Corporation.
G. Employee shall mean an individual who is in the employ of the
--------
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
H. Exercise Date shall mean the date on which the option shall have
-------------
been exercised in accordance with Paragraph 9 of the Agreement.
I. Exercise Price shall mean the exercise price per share as
--------------
specified in the Grant Notice.
J. Expiration Date shall mean the date on which the option expires as
specified in the Grant Notice.
A-1
<PAGE>
K. Fair Market Value per share of Common Stock on any relevant date
-----------------
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing selling price
per share of Common Stock on the date in question, as the price is reported by
the National Association of Securities Dealers on the Nasdaq National Market or
any successor system. If there is no closing selling price for the Common Stock
on the date in question, then the Fair Market Value shall be the closing selling
price on the last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question on the Stock Exchange determined
by the Plan Administrator to be the primary market for the Common Stock, as such
price is officially quoted in the composite tape of transactions on such
exchange. If there is no closing selling price for the Common Stock on the date
in question, then the Fair Market Value shall be the closing selling price on
the last preceding date for which such quotation exists.
L. Grant Date shall mean the date of grant of the option as specified
----------
in the Grant Notice.
M. Grant Notice shall mean the Notice of Grant of Stock Option
------------
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.
N. Incentive Option shall mean an option which satisfies the
----------------
requirements of Code Section 422.
O. "Involuntary Termination" shall mean the termination of Optionee's
-----------------------
Service by reason of:
(i) Optionee's involuntary dismissal or discharge by the
Corporation for reasons other than Misconduct, or
(ii) Optionee's voluntary resignation following (i) a change in
Optionee's position with the Corporation (or Parent or Subsidiary employing
Optionee) which materially reduces Optionee's duties and responsibilities or the
level of management to which Optionee reports, (ii) a reduction in Optionee's
level of compensation (including base salary, fringe benefits and target bonus
under any performance-based bonus or incentive programs) by more than fifteen
percent (15%) in the aggregate, or (iii) a relocation of Optionee's place of
employment by more than fifty (50) miles, provided and only if such change,
reduction or relocation is effected without Optionee's consent.
P. Misconduct shall mean the commission of any act of fraud,
----------
embezzlement or dishonesty by Optionee, any unauthorized use or disclosure by
Optionee of confidential information or trade secrets of the Corporation (or any
Parent or Subsidiary), or any intentional wrongdoing by Optionee, whether by
omission or commission, which adversely affects the business or affairs of the
Corporation (or any Parent or Subsidiary) or in a material
A-2
<PAGE>
manner. The foregoing definition shall not limit the grounds for the dismissal
or discharge of Optionee or any other individual in the Service of the
Corporation (or any Parent or Subsidiary).
Q. Non-Statutory Option shall mean an option not intended to satisfy
-------------
the requirements of Code Section 422.
R. Notice of Exercise shall mean the notice of exercise in the form
------------------
attached hereto as Exhibit I.
S. Option Shares shall mean the number of shares of Common Stock
-------------
subject to the option as specified in the Grant Notice.
T. Optionee shall mean the person to whom the option is granted as
--------------
specified in the Grant Notice.
U. Parent shall mean any corporation (other than the Corporation) in
------
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
V. Permanent Disability shall mean the inability of Optionee to
--------------------
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which is expected to result in death
or has lasted or can be expected to last for a continuous period of twelve (12)
months or more.
W. Plan shall mean the Corporation's 1999 Stock Incentive Plan.
----
X. Plan Administrator shall mean either the Board or a committee of
------------------
the Board acting in its administrative capacity under the Plan.
Y. Retirement shall mean Optionee's retirement from Service with the
----------
Corporation on a date on which Optionee is at least 55 years of age and has
completed at least ten (10) years of continuous Service with the Corporation.
Z. Service shall mean Optionee's performance of services for the
-------
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor.
AA. Stock Exchange shall mean the American Stock Exchange or the New
--------------
York Stock Exchange.
BB. Subsidiary shall mean any corporation (other than the Corporation)
----------
in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.
A-3
<PAGE>
EXHIBIT I
NOTICE OF EXERCISE
I hereby notify DTM Corporation (the "Corporation") that I elect to
purchase _________ shares of the Corporation's Common Stock (the "Purchased
Shares") at the option exercise price of $ per share (the "Exercise
Price") pursuant to that certain option (the "Option") granted to me under the
Corporation's 1999 Stock Incentive Plan on ____________, 199___.
Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price.
__________________, 199__
Date
__________________________________
Optionee
Address:__________________________
__________________________________
__________________________________
Print name in exact manner
it is to appear on the
stock certificate: __________________________________
Address to which certificate
is to be sent, if different
from address above: __________________________________
__________________________________
Social Security Number: __________________________________
Employee Number: __________________________________
<PAGE>
EXHIBIT 99.4
INITIAL GRANT
-------------
DTM CORPORATION
NOTICE OF GRANT OF NON-EMPLOYEE DIRECTOR
AUTOMATIC STOCK OPTION
Notice is hereby given of the following option grant (the "Option") to
purchase shares of the Common Stock of DTM Corporation (the "Corporation"):
Optionee:
------------------------------------------------------------
Grant Date:
----------------------------------------------------------
Exercise Price: $ per share
--------------------------------------------
Number of Option Shares: 24,000 shares
Expiration Date:
-----------------------------------------------------
Type of Option: Non-Statutory Stock Option
Date Exercisable: Immediately Exercisable
Vesting Schedule: The Option Shares shall initially be unvested and
subject to repurchase by the Corporation at the Exercise Price paid
per share. Optionee shall acquire a vested interest in, and the
Corporation's repurchase right shall accordingly lapse with respect
to, one-third (1/3) of the Option Shares upon Optionee's completion of
each year of service as a member of the Corporation's Board of
Directors (the "Board") over the three (3)-year period measured from
the Grant Date, with the first such installment to vest on the first
anniversary of the Grant Date. In no event shall any additional
Option Shares vest after Optionee's cessation of Board service.
Optionee understands and agrees that the Option is granted subject to
and in accordance with the terms of the automatic option grant program under the
DTM Corporation 1999 Stock Incentive Plan (the "Plan"). Optionee further agrees
to be bound by the terms of the Plan and the terms of the Option as set forth in
the Automatic Stock Option Agreement attached hereto as Exhibit A. A copy of
the Plan is available upon request made to the Corporate Secretary at the
Corporation's principal offices.
<PAGE>
REPURCHASE RIGHT. OPTIONEE HEREBY AGREES THAT ALL UNVESTED OPTION
SHARES ACQUIRED UPON THE EXERCISE OF THE OPTION SHALL NOT BE TRANSFERABLE AND
SHALL BE SUBJECT TO REPURCHASE BY THE CORPORATION, AT THE EXERCISE PRICE PAID
PER SHARE, UPON OPTIONEE'S TERMINATION OF SERVICE AS A MEMBER OF THE
CORPORATION'S BOARD OF DIRECTORS PRIOR TO VESTING IN THOSE SHARES. THE TERMS
AND CONDITIONS OF SUCH REPURCHASE RIGHT SHALL BE SPECIFIED IN A STOCK PURCHASE
AGREEMENT, IN FORM AND SUBSTANCE SATISFACTORY TO THE CORPORATION, EXECUTED BY
OPTIONEE AT THE TIME OF THE OPTION EXERCISE.
No Impairment of Rights. Nothing in this Notice or in the attached
Automatic Stock Option Agreement or the Plan shall interfere with or otherwise
restrict in any way the rights of the Corporation or the Corporation's
shareholders to remove Optionee from the Board at any time in accordance with
the provisions of applicable law.
Definitions. All capitalized terms in this Notice shall have the
meaning assigned to them in this Notice or in the attached Automatic Stock
Option Agreement.
DATED: ____________________, 199_
DTM CORPORATION
By:
-------------------------------------------
Title:
-------------------------------------------
-------------------------------------------
OPTIONEE
Address:
-----------------------------------------
-----------------------------------------
ATTACHMENT
Exhibit A - Automatic Stock Option Agreement
<PAGE>
EXHIBIT A
AUTOMATIC STOCK OPTION AGREEMENT
<PAGE>
EXHIBIT 99.5
ANNUAL GRANT
------------
DTM CORPORATION
NOTICE OF GRANT OF NON-EMPLOYEE DIRECTOR
AUTOMATIC STOCK OPTION
Notice is hereby given of the following option grant (the "Option") to
purchase shares of the Common Stock of DTM Corporation (the "Corporation"):
Optionee:
------------------------------------------------------------
Grant Date:
----------------------------------------------------------
Exercise Price: $ per share
--------------------------------------------
Number of Option Shares: 5,000 shares
Expiration Date:
-----------------------------------------------------
Type of Option: Non-Statutory Stock Option
Date Exercisable: Immediately Exercisable
Vesting Schedule: The Option Shares shall initially be unvested and
subject to repurchase by the Corporation at the Exercise Price paid
per share. Optionee shall acquire a vested interest in, and the
Corporation's repurchase right shall accordingly lapse with respect
to, all of the Option Shares upon Optionee's completion of one year of
service as a member of the Corporation's Board of Directors (the
"Board") measured from and after the Grant Date. In no event shall
any additional Option Shares vest after Optionee's cessation of Board
service.
Optionee understands and agrees that the Option is granted subject to
and in accordance with the terms of the automatic option grant program under the
DTM Corporation 1999 Stock Incentive Plan (the "Plan"). Optionee further agrees
to be bound by the terms of the Plan and the terms of the Option as set forth in
the Automatic Stock Option Agreement attached hereto as Exhibit A. A copy of the
Plan is available upon request made to the Corporate Secretary at the
Corporation's principal offices.
<PAGE>
REPURCHASE RIGHT. OPTIONEE HEREBY AGREES THAT ALL UNVESTED OPTION
SHARES ACQUIRED UPON THE EXERCISE OF THE OPTION SHALL NOT BE TRANSFERABLE AND
SHALL BE SUBJECT TO REPURCHASE BY DTM CORPORATION, AT THE EXERCISE PRICE PAID
PER SHARE, UPON OPTIONEE'S TERMINATION OF SERVICE AS A MEMBER OF DTM
CORPORATION'S BOARD OF DIRECTORS PRIOR TO VESTING IN THOSE SHARES. THE TERMS
AND CONDITIONS OF SUCH REPURCHASE RIGHT SHALL BE SPECIFIED IN A STOCK PURCHASE
AGREEMENT, IN FORM AND SUBSTANCE SATISFACTORY TO DTM CORPORATION, EXECUTED BY
OPTIONEE AT THE TIME OF THE OPTION EXERCISE.
No Impairment of Rights. Nothing in this Notice or in the attached
Automatic Stock Option Agreement or the Plan shall interfere with or otherwise
restrict in any way the rights of the Corporation or the Corporation's
shareholders to remove Optionee from the Board at any time in accordance with
the provisions of applicable law.
Definitions. All capitalized terms in this Notice shall have the
meaning assigned to them in this Notice or in the attached Automatic Stock
Option Agreement.
DATED: __________________________, 199__
DTM CORPORATION
By:
-------------------------------------------
Title:
-------------------------------------------
-------------------------------------------
OPTIONEE
Address:
-----------------------------------------
-----------------------------------------
ATTACHMENT
- ----------
Exhibit A - Automatic Stock Option Agreement
2.
<PAGE>
EXHIBIT A
AUTOMATIC STOCK OPTION AGREEMENT
<PAGE>
EXHIBIT 99.6
DTM CORPORATION
AUTOMATIC STOCK OPTION AGREEMENT
RECITALS
A. The Corporation has implemented an automatic option grant program
under the Corporation's 1999 Stock Incentive Plan pursuant to which eligible
non-employee members of the Corporation's Board will automatically receive
special option grants at designated intervals over their period of Board service
in order to provide such individuals with a meaningful incentive to continue to
serve as a member of the Board.
B. Optionee is an eligible non-employee Board member, and this Agreement
is executed pursuant to, and is intended to carry out the purposes of, the Plan
in connection with the automatic grant of a stock option to purchase shares of
the Corporation's Common Stock under the Plan.
C. The granted option is intended to be a non-statutory option which does
not meet the requirements of Section 422 of the Internal Revenue Code.
D. All capitalized terms in this Agreement, to the extent not otherwise
defined in the Agreement, shall have the meaning assigned to them in the
attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. Grant of Option. The Corporation hereby grants to Optionee, as of
the Grant Date, a Non-Statutory Option to purchase up to the number of Option
Shares specified in the Grant Notice. The Option Shares shall be purchasable
from time to time during the option term specified in Paragraph 2 at the
Exercise Price.
2. Option Term. This option shall have a maximum term of ten (10)
years measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.
3. Limited Transferability.
(a) This option may be assigned in whole or in part during
Optionee's lifetime pursuant to a domestic relations order or to one or more
members of Optionee's immediate family or to a trust established exclusively for
Optionee and/or one or more such family members. The assigned portion shall be
exercisable only by the person or persons who acquire a proprietary interest in
the option pursuant to such assignment. The terms applicable to the assigned
portion shall be the same as those in effect for this option immediately prior
to such assignment and shall be set forth in such documents issued to the
assignee as the Corporation may deem appropriate.
<PAGE>
(b) Should Optionee die while holding this option, then this
option shall be transferred in accordance with Optionee's will or the laws of
inheritance. However, Optionee may designate one or more persons as the
beneficiary or beneficiaries of this option, and this option shall, in
accordance with such designation, automatically be transferred to such
beneficiary or beneficiaries upon Optionee's death while holding such option.
Such beneficiary or beneficiaries shall take the transferred option subject to
all the terms and conditions of this Agreement, including (without limitation)
the limited time period during which this option may, pursuant to Paragraph 5,
be exercised following Optionee's death.
4. Exercisability/Vesting.
(a) This option shall be immediately exercisable for any or all
of the Option Shares, whether or not the Option Shares are vested in accordance
with the Vesting Schedule, and shall remain so exercisable until the Expiration
Date or the sooner termination of the option term under Paragraph 5 or 6.
(b) Optionee shall, in accordance with the Vesting Schedule,
vest in the Option Shares in a series of installments over his or her period of
Board service. Vesting in the Option Shares may be accelerated pursuant to the
provisions of Paragraph 5 or 6. In no event, however, shall any additional
Option Shares vest following Optionee's cessation of service as a Board member.
5. Cessation of Board Service. The option term specified in
Paragraph 2 shall terminate (and this option shall cease to be outstanding)
prior to the Expiration Date should any of the following provisions become
applicable:
(a) Should Optionee cease to serve as a Board member for any
reason (other than death or Permanent Disability) while this option is
outstanding, then the period during which this option may be exercised shall be
reduced to a twelve (12)-month period measured from the date of such cessation
of Board service, but in no event shall this option be exercisable at any time
after the Expiration Date. During such limited period of exercisability, this
option may not be exercised in the aggregate for more than the number of Option
Shares (if any) in which Optionee is vested on the date of his or her cessation
of Board service. Upon the earlier of (i) the expiration of such twelve (12)-
month period or (ii) the specified Expiration Date, the option shall terminate
and cease to be exercisable with respect to any vested Option Shares for which
the option has not been exercised.
(b) Should Optionee die during the twelve (12)-month period
following his or her cessation of Board service and hold this option at the time
of his or her death, then the personal representative of Optionee's estate or
the person or persons to whom the option is transferred pursuant to Optionee's
will or the laws of inheritance or the designated beneficiary or beneficiaries
of this option (as the case may be) shall have the right to exercise this option
for any or all of the Option Shares in which Optionee is vested at the time of
Optionee's cessation of Board service (less any Option Shares purchased by
Optionee after such cessation of Board service but prior to death). Any such
right to exercise this option shall terminate, and this option shall accordingly
cease to be exercisable for such vested Option
2.
<PAGE>
Shares, upon the earlier of (i) the expiration of the twelve (12)-month period
measured from the date of Optionee's cessation of Board service or (ii) the
specified Expiration Date.
(c) Should Optionee cease service as a Board member by reason of
death or Permanent Disability, then any Option Shares at the time subject to
this option but not otherwise vested shall vest in full so that this option may
be exercised for any or all of the Option Shares as fully vested shares of
Common Stock at any time prior to the earlier of (i) the expiration of the
twelve (12)-month period measured from the date of Optionee's cessation of Board
service or (ii) the specified Expiration Date, whereupon this option shall
terminate and cease to be outstanding.
(d) Upon Optionee's cessation of Board service for any reason
other than death or Permanent Disability, this option shall immediately
terminate and cease to be outstanding with respect to any and all Option Shares
in which Optionee is not otherwise at that time vested in accordance with the
normal Vesting Schedule or the special vesting acceleration provisions of
Paragraph 6 below.
6. Change in Control.
(a) In the event of a Change in Control, all Option Shares at
the time subject to this option but not otherwise vested shall automatically
vest so that this option shall, immediately prior to the effective date for the
Change in Control, become fully exercisable for all of the Option Shares at the
time subject to this option and may be exercised for any or all of those Option
Shares as fully-vested shares of Common Stock. Immediately following the
consummation of the Change in Control, this option shall terminate and cease to
be outstanding, except to the extent assumed by the successor corporation (or
parent thereof) or otherwise continued in full force and effect pursuant to the
terms of the Change in Control.
(b) If this option is assumed in connection with a Change in
Control, then this option shall be appropriately adjusted, immediately after
such Change in Control, to apply to the number and class of securities which
would have been issuable to Optionee in consummation of such Change in Control
had the option been exercised immediately prior to such Change in Control, and
appropriate adjustments shall also be made to the Exercise Price, provided the
aggregate Exercise Price shall remain the same.
7. Adjustment in Option Shares. Should any change be made to the
Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the number and/or
class of securities subject to this option and (ii) the Exercise Price in order
to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder; provided, however, that the aggregate Exercise Price shall
remain the same.
8. Shareholder Rights. The holder of this option shall not have any
shareholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.
3.
<PAGE>
9. Manner of Exercising Option.
(a) In order to exercise this option for all or any part of the
Option Shares for which the option is at the time exercisable, Optionee (or any
other person or persons exercising this option) must take the following actions:
(i) Execute and deliver to the Secretary of the
Corporation a Notice of Exercise (or, to the extent that the option is
exercised for one or more unvested Option Shares, a Purchase
Agreement) for the Option Shares for which the option is exercised.
(ii) Pay the aggregate Exercise Price for the purchased
shares in one or more of the following forms:
(A) cash or check made payable to the Corporation;
(B) shares of Common Stock held by Optionee (or
any other person or persons exercising the option) for the requisite
period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the
Exercise Date; or
(C) to the extent the option is exercised for
vested Option Shares, through a special sale and remittance procedure
pursuant to which Optionee (or any other person or persons exercising
this option) shall provide irrevocable instructions (I) to a
Corporation-approved brokerage firm to effect the immediate sale of
the vested shares purchased under the option and remit to the
Corporation, out of the sale proceeds available on the settlement
date, sufficient funds to cover the aggregate Exercise Price payable
for those shares plus all applicable income and employment taxes
required to be withheld by the Corporation by reason of such exercise
and (II) to the Corporation to deliver the certificates for the
purchased shares directly to such brokerage firm in order to complete
the sale.
Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the
Exercise Price must accompany the Notice of Exercise (or Purchase
Agreement) delivered to the Corporation in connection with the option
exercise.
(iii) Furnish to the Corporation appropriate documentation
that the person or persons exercising the option (if other than Optionee)
have the right to exercise this option.
4.
<PAGE>
(iv) Make appropriate arrangements with the Corporation
for the satisfaction of all income and employment tax withholding
requirements applicable to the option exercise.
(b) As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate for the purchased Option Shares.
To the extent any such Option Shares are unvested, the certificates for those
Option Shares shall be endorsed with an appropriate legend evidencing the
Corporation's repurchase rights and may be held in escrow with the Corporation
until such shares vest.
(c) In no event may this option be exercised for any fractional
shares.
10. No Impairment of Rights. This Agreement shall not in any way
affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets. Nor shall this Agreement in any way be construed or interpreted so as to
affect adversely or otherwise impair the right of the Corporation or its
shareholders to remove Optionee from the Board at any time in accordance with
the provisions of applicable law.
11. Compliance with Laws and Regulations.
(a) The exercise of this option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the Corporation and
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange (or the Nasdaq National Market, if
applicable) on which the Common Stock may be listed for trading at the time of
such exercise and issuance.
(b) The inability of the Corporation to obtain approval from any
regulatory body having authority deemed by the Corporation to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option shall
relieve the Corporation of any liability with respect to the non-issuance or
sale of the Common Stock as to which such approval shall not have been obtained.
However, the Corporation shall use its best efforts to obtain all such
applicable approvals.
12. Successors and Assigns. Except to the extent otherwise provided
in Paragraph 3 or 6, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the Corporation and its successors and assigns and
Optionee and Optionee's assigns and beneficiaries.
13. Notices. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to be
given or delivered to Optionee shall be in writing and addressed to Optionee at
the address indicated below Optionee's signature line on the Grant Notice. All
notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.
5.
<PAGE>
14. Construction/Governing Law. This Agreement and the option
evidenced hereby are made and granted pursuant to the automatic option grant
program in effect under the Plan and are in all respects limited by and subject
to the express terms and provisions of that program. The interpretation,
performance, and enforcement of this Agreement shall be governed by the laws of
the State of Texas without resort to that State's conflict-of-laws rules.
6.
<PAGE>
EXHIBIT I
NOTICE OF EXERCISE
I hereby notify DTM Corporation (the "Corporation") that I elect to
purchase __________ shares of the Corporation's Common Stock (the "Purchased
Shares") at the option exercise price of $___________ per share (the "Exercise
Price") pursuant to that certain option (the "Option") granted to me pursuant to
the Automatic Option Grant Program under the Corporation's 1999 Stock Incentive
Plan on ____________________, 199___.
Concurrently with the delivery of this Exercise Notice to the
Secretary of the Corporation, I shall hereby pay to the Corporation the Exercise
Price for the Purchased Shares in accordance with the provisions of my agreement
with the Corporation evidencing the Option and shall deliver whatever additional
documents may be required by such agreement as a condition for exercise.
Alternatively, I may utilize the special broker-dealer sale and remittance
procedure specified in my agreement to effect payment of the Exercise Price for
any Purchased Shares in which I am vested at the time of exercise.
_______________, 199__
Date
--------------------------------------
OPTIONEE
Address:
--------------------------------------
--------------------------------------
Print name in exact manner it is
to appear on the stock certificate: --------------------------------------
Address to which certificate is
to be sent, if different from
address above: --------------------------------------
Social Security Number: --------------------------------------
<PAGE>
APPENDIX
The following definitions shall be in effect under the Agreement:
A. Agreement shall mean this Automatic Stock Option Agreement.
B. Board shall mean the Corporation's Board of Directors.
C. Change in Control shall mean shall mean a change in ownership or
control of the Corporation effected through any of the following transactions:
(i) a merger, consolidation or reorganization approved by the
Corporation's shareholders, unless securities representing more than fifty
percent (50%) of the total combined voting power of the voting securities
of the successor corporation are immediately thereafter beneficially owned,
directly or indirectly and in substantially the same proportion, by the
persons who beneficially owned the Corporation's outstanding voting
securities immediately prior to such transaction,
(ii) any shareholder-approved transfer or other disposition of all
or substantially all of the Corporation's assets, or
(iii) the acquisition, directly or indirectly by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation), of beneficial ownership (within the meaning
of Rule 13d-3 of the 1934 Act) of securities possessing more than eighty
percent (80%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly
to the Corporation's shareholders which the Board recommends such
shareholders to accept.
D. Code shall mean the Internal Revenue Code of 1986, as amended.
E. Common Stock shall mean the Corporation's common stock.
F. Corporation shall mean DTM Corporation, a Texas corporation.
G. Exercise Date shall mean the date on which the option shall have been
exercised in accordance with Paragraph 9 of this Agreement.
H. Exercise Price shall mean the exercise price payable per share as
specified in the Grant Notice.
I. Expiration Date shall mean the date on which the option term expires
as specified in the Grant Notice.
A-1.
<PAGE>
J. Fair Market Value per share of Common Stock on any relevant date shall
be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question, as the price is
reported by the National Association of Securities Dealers on the Nasdaq
National Market or any successor system. If there is no closing selling
price for the Common Stock on the date in question, then the Fair Market
Value shall be the closing selling price on the last preceding date for
which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question on the Stock Exchange
determined by the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape of
transactions on such exchange. If there is no closing selling price for the
Common Stock on the date in question, then the Fair Market Value shall be
the closing selling price on the last preceding date for which such
quotation exists.
K. Grant Date shall mean the date of grant of the option as specified in
the Grant Notice.
L. Grant Notice shall mean the Notice of Grant of Automatic Stock Option
accompanying this Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.
M. 1934 Act shall mean the Securities Exchange Act of 1934, as amended.
N. Non-Statutory Option shall mean an option not intended to satisfy the
requirements of Code Section 422.
O. Notice of Exercise shall mean the notice of exercise in the form
attached hereto as Exhibit I.
P. Option Shares shall mean the number of shares of Common Stock subject
to the option.
Q. Optionee shall mean the person to whom the option is granted as
specified in the Grant Notice.
R. Permanent Disability shall mean the inability of Optionee to perform
his or her usual duties as a Board member by reason of any medically
determinable physical or mental impairment which is expected to result in death
or has lasted or can be expected to last for a continuous period of twelve (12)
months or more.
S. Plan shall mean the Corporation's 1999 Stock Incentive Plan.
A-2.
<PAGE>
T. Purchase Agreement shall mean the stock purchase agreement (in form
and substance satisfactory to the Corporation) which must be executed at the
time the option is exercised for unvested Option Shares and which will
accordingly (i) grant the Corporation the right to repurchase, at the Exercise
Price, any and all of those Option Shares in which Optionee is not otherwise
vested at the time of his or her cessation of service as a Board member and (ii)
preclude the sale, transfer or other disposition of any of the Option Shares
purchased under such agreement while those Option Shares remain subject to the
repurchase right.
U. Stock Exchange shall mean the American Stock Exchange or the New York
Stock Exchange.
V. Vesting Schedule shall mean the vesting schedule specified in the
Grant Notice, pursuant to which Optionee shall vest in the Option Shares in one
or more installments over his or her period of Board service, subject to
acceleration in accordance with the provisions of the Agreement.
A-3.
