<PAGE>
As filed with the Securities and Exchange Commission on April 27, 1999
Registration No. 333-______
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
HAMBRECHT & QUIST GROUP
(Exact name of Registrant as specified in its charter)
DELAWARE 94-3246636
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
One Bush Street
San Francisco, California 94104
(Address of principal executive offices, including zip code)
(415) 439-3000
(Registrant's telephone number, including area code)
1996 EQUITY PLAN
(Full title of the Plan)
STEVEN N. MACHTINGER
General Counsel and Secretary
Hambrecht & Quist Group
One Bush Street
San Francisco, California 94104
(415) 439-3000
(Name, address and telephone number of agent for service)
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED (1) PER SHARE OFFERING PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, $.01 3,250,000 $32.50 $105,625,000(2) $29,363.75
par value
</TABLE>
(1) Represents additional shares issuable pursuant to Registrant's 1996 Equity
Plan (the "Plan") following (i) automatic annual increase of 750,000 shares
issuable under the Plan pursuant to Section 3.2 of the Plan and (ii) stockholder
approval of an amendment to the Plan increasing the number of shares issuable
under Plan by 2,500,000 shares obtained at the Registrant's Annual Meeting held
on February 24, 1999.
(2) Estimated in accordance with Rule 457(c) under the Securities Act of 1933 as
to 3,250,000 shares of Common Stock, solely for the purpose of calculating the
registration fee. The computation is based upon the average of the high and low
price of the Registrant's Common Stock as reported on the New York Stock
Exchange on April 20, 1999.
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Pursuant to General Instruction E to Form S-8, except as set forth herein,
the contents of the Registration Statement filed by the Registrant under
Registration Number 333-56957 are hereby incorporated by reference herein, and
the opinions and consents listed below are annexed hereto.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
As of April 14, 1999, Steven N. Machtinger, General Counsel and Secretary
of the Registant, beneficially owned 136,431 shares of the Registrant's Common
Stock and held options to purchase 62,225 shares of the Registrant's Common
Stock.
ITEM 8. EXHIBITS.
EXHIBIT
NUMBER DOCUMENT
5.01 Opinion of Counsel, as to the legality of securities being registered
23.01 Consent of Independent Public Accountants
24.01 Power of Attorney (see page 4)
99.01 Registrant's 1996 Equity Plan, as amended
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of San Francisco, State of California on April 27, 1999.
HAMBRECHT & QUIST GROUP
a Delaware corporation
By: /s/ Daniel H. Case III
--------------------------
Daniel H. Case III
Chairman and Chief Executive Officer
By: /s/ Patrick J. Allen
--------------------------
Patrick J. Allen
Chief Financial Officer
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<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Daniel
H. Case III, Patrick J. Allen and Steven N. Machtinger, or any of them (with
full power to each of them to act alone), his attorneys-in-fact, each with full
power of substitution, for him in any and all capacities, to sign any amendments
to this Registration Statement on Form S-8, and to file them and any other
related documents, with the Securities and Exchange Commission. Each person
further ratifies and confirms all that each of the attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done with regard to this
Registration Statement on Form S-8.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
/s/ Daniel H. Case III Chairman of the Board and Chief April 27, 1999
- ----------------------- Executive Officer (Principal
Daniel H. Case III Executive Officer)
/s/ William R. Timken Vice Chairman of the April 27, 1999
- ----------------------- Board of Directors
William R. Timken
/s/ Patrick J. Allen Chief Financial Officer (Principal April 27, 1999
- ----------------------- Accounting and Financial Officer)
Patrick J. Allen
- ----------------------- Director _________, 1999
David A. Coulter
/s/ Howard B. Hillman Director April 27, 1999
- -----------------------
Howard B. Hillman
/s/ William E. Mayer Director April 27, 1999
- -----------------------
William E. Mayer
/s/ William J. Perry Director April 27, 1999
- -----------------------
William J. Perry
/s/ Edmund H. Shea, Jr. Director April 27, 1999
- -----------------------
Edmund H. Shea, Jr.
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<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DOCUMENT
5.01 Opinion of Counsel, as to the legality of securities being registered
23.01 Consent of Independent Public Accountants
24.01 Power of Attorney (see page 4)
99.01 Registrant's 1996 Equity Plan, as amended
-5-
EXHIBIT 5.01
Hambrecht & Quist Group
One Bush Street
San Francisco, CA 94104
April 27, 1999
Hambrecht & Quist Group
One Bush Street
San Francisco, CA 94104
RE: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
I have examined the Registration Statement on Form S-8 to be filed by you
with the Securities and Exchange Commission on or about April 27, 1999 (the
"Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, of 3,250,000 additional shares of common
stock (the "Shares") under the 1996 Equity Plan (the "Plan"). As General Counsel
for Hambrecht & Quist Group, I have examined the proceedings taken and am
familiar with the proceedings proposed to be taken in connection with the
issuance and sale of the Shares pursuant to the Plan.
It is my opinion that the Shares, when issued and sold in the manner
described in the Plan and pursuant to the agreement that accompanies each grant
under the Plan, will be legally and validly issued, fully-paid and
non-assessable.
Very truly yours,
/s/ Steven N. Machtinger
Steven N. Machtinger
General Counsel and Secretary
EXHIBIT 23.01
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated November 13, 1998,
on the consolidated financial statements of Hambrecht & Quist Group and
Subsidiaries for the fiscal year ended September 30, 1998 included in Hambrecht
& Quist Group's Form 10-K for the year ended September 30, 1998.
ARTHUR ANDERSEN LLP
San Francisco, California
April 21, 1999
HAMBRECHT & QUIST GROUP
1996 EQUITY PLAN
ARTICLE 1. INTRODUCTION
The Plan was adopted by the Board effective June 19, 1996. The Plan was
amended and restated by the Board on December 14, 1998 and approved by the
Company's stockholders on February 24, 1999.
The purpose of the Plan is to promote the long-term success of the Company
and the creation of stockholder value by (a) encouraging Employees, Outside
Directors and Consultants to focus on critical long-range objectives, (b)
encouraging the attraction and retention of Employees, Outside Directors and
Consultants with exceptional qualifications and (c) linking Employees, Outside
Directors and Consultants directly to stockholder interests through increased
stock ownership. The Plan seeks to achieve this purpose by providing for Awards
in the form of Plan Shares or Options (which may constitute incentive stock
options or nonstatutory stock options).
The Plan shall be governed by, and construed in accordance with, the laws
of the State of California (except their choice-of-law provisions).
ARTICLE 2. ADMINISTRATION
2.1 COMMITTEE COMPOSITION. The Plan shall be administered by one or more
Committees that shall consist of either the full Board of Directors or one or
more directors of the Company, who shall be appointed by the Board. If more than
one Committee is appointed, each such committee shall be included in the
definition of "Committee" whenever used herein.
2.2 COMMITTEE RESPONSIBILITIES. The Committee shall (a) select the
Employees, Outside Directors and Consultants who are to receive Awards under the
Plan, (b) determine the type, number, vesting requirements and other features
and conditions of such Awards, (c) interpret the Plan and (d) make all other
decisions relating to the operation of the Plan. The Committee may adopt such
rules or guidelines as it deems appropriate to implement the Plan. The
Committee's determinations under the Plan shall be final and binding on all
persons.
ARTICLE 3. SHARES AVAILABLE FOR GRANTS.
3.1 BASIC LIMITATION. Common Shares issued pursuant to the Plan may be
authorized but unissued shares or treasury shares. The aggregate number of
Common Shares that may be awarded under the Plan either as Option or Plan Shares
shall not exceed 7,500,000. The limitations of this Section 3.1 shall be subject
to adjustment pursuant to Article 8.
3.2 ANNUAL INCREASE. In addition to the number of Common Shares issuable
under the Plan pursuant to Section 3.1, as of January 1, of each year,
commencing with the year 1999, the aggregate number of shares authorized for
issuance either as Option or Plan Shares shall automatically increase by a
number equal to the lesser of (i) 3.0% of the total number of shares of Common
Stock of the Company then outstanding and (ii) 750,000 shares.
3.3 ADDITIONAL SHARES. If Options are forfeited or terminate for any other
reason before being exercised, then the corresponding Common Shares shall again
become available for the grant of Options or Plan Shares under the Plan. If Plan
Shares are forfeited, then the
<PAGE>
corresponding Common Shares shall again become available for the grant of NSOs
or Plan Shares under the Plan. The aggregate number of Common Shares that may be
issued under the Plan upon the exercise of ISOs shall not be increased when Plan
Shares or other Common Shares are forfeited.
ARTICLE 4. ELIGIBILITY
4.1 NONSTATUTORY STOCK OPTIONS. Only Employees, Outside Directors and
Consultants shall be eligible for the grant of NSOs.
4.2 INCENTIVE STOCK OPTIONS AND PLAN SHARES. Only Employees, Outside
Directors and Consultants shall be eligible for the grant of Plan Shares. Only
Employees who are common-law employees of the Company, a Parent or a Subsidiary
shall be eligible for the grant of ISOs. In addition, an Employee who owns more
than 10% of the total combined voting power of all classes of outstanding stock
of the Company or any of its Parents or Subsidiaries shall not be eligible for
the grant of an ISO unless the requirements set forth in section 422(c)(6) of
the Code are satisfied.
ARTICLE 5. OPTIONS
5.1 STOCK OPTION AGREEMENT. Each grant of an Option under the Plan shall be
evidenced by a Stock Option Agreement between the Optionee and the Company. Such
Option shall be subject to all applicable terms of the Plan and may be subject
to any other terms that are not inconsistent with the Plan. The Stock Option
Agreement shall specify whether the Option is an ISO or an NSO. The provisions
of the various Stock Option Agreements entered into under the Plan need not be
identical. Options may be granted in consideration of a cash payment or in
consideration of a reduction in the Optionee's other compensation. A Stock
Option Agreement may provide that a new Option will be granted automatically to
the Optionee when he or she exercises a prior Option and pays the Exercise Price
in the form described in Section 6.2.
5.2 NUMBER OF SHARES. Each Stock Option Agreement shall specify the number
of Common Shares subject to the Option and shall provide for the adjustment of
such number in accordance with Article 8. Options granted to any Optionee in a
single fiscal year of the Company shall not cover more than 500,000 Common
Shares, except that Options granted to a new Employee in the fiscal year of the
Company in which his or her service as an Employee first commences shall not
cover more than 1,000,000 Common Shares. The limitations set forth in the
preceding sentence shall be subject to adjustment in accordance with Article 8.
5.3 EXERCISE PRICE. Each Stock Option Agreement shall specify the Exercise
Price, provided that the Exercise Price under an ISO shall in no event be less
than 100% of the Fair Market Value of a Common Share on the date of grant. In
the case of an NSO, a Stock Option Agreement may specify an Exercise Price that
varies in accordance with a predetermined formula while the NSO is outstanding.
5.4 EXERCISABILITY AND TERM. Each Stock Option Agreement shall specify the
date when all or any installment of the Option is to become exercisable. The
Stock Option Agreement shall also specify the term of the Option, provided that
the term of an ISO shall in no event exceed 10 years from the date of grant. A
Stock Option Agreement may provide for accelerated exercisability in the event
of the Optionee's death, disability or retirement or other events and may
provide for expiration prior to the end of its term in the event of the
termination of the Optionee's service. NSOs may also be awarded in combination
with Plan Shares, and such an Award may provide that the NSOs will not be
exercisable unless the related Plan Shares are forfeited.
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<PAGE>
5.5 EFFECT OF CHANGE IN CONTROL. The Committee may determine, at the time
of granting an Option or thereafter, that all or part of such Option shall
become exercisable as to all Common Shares subject to such Option in the event
that a Change in Control occurs with respect to the Company. Absent a contrary
determination by the Committee, if (a) a Change in Control occurs with respect
to the Company and (b) the surviving corporation or its parent or subsidiary
does not continue or assume outstanding Options or substitute its own options
for such Options, then such Options shall become exercisable to the extent that
they otherwise would have become exercisable within 12 months after such Change
in Control. For purposes of this Section 5.5 and Section 8.3, an Option shall be
considered assumed or replaced by a substitute option if the new option confers
the right to purchase, for each Common Share subject to the Option immediately
prior to the Change in Control, the consideration (whether stock, cash or other
securities or property) received in the Change in Control by the Company's
stockholders for each Common Share held on the effective date of the Change in
Control (and if stockholders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Common
Shares); provided, however, that if such consideration received in the Change in
Control is not solely common stock of the successor corporation or its parent
corporation, the Committee may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Option,
for each Common Share subject to the Option, to be solely common stock of the
successor corporation or its parent corporation equal in fair market value to
the per share consideration received by holders of Common Shares in the Change
in Control.
5.6 MODIFICATION OR ASSUMPTION OF OPTIONS. Within the limitations of the
Plan, the Committee may modify, extend or assume outstanding options or may
accept the cancellation of outstanding options (whether granted by the Company
or by another issuer) in return for the grant of new options for the same or a
different number of shares and at the same or a different exercise price. The
foregoing notwithstanding, no modification of an Option shall, without the
consent of the Optionee, alter or impair his or her rights or obligations under
such Option.
5.7 BUYOUT PROVISIONS. The Committee may at any time (a) offer to buy out
for a payment in cash or cash equivalents an Option previously granted or (b)
authorize an Optionee to elect to cash out an Option previously granted, in
either case at such time and based upon such terms and conditions as the
Committee shall establish.
ARTICLE 6. PAYMENT FOR OPTION SHARES
6.1 GENERAL RULE. The entire Exercise Price of Common Shares issued upon
exercise of Options shall be payable in cash or cash equivalents at the time
when such Common Shares are purchased, except as follows:
(a) In the case of an ISO granted under the Plan,
payment shall be made only pursuant to the express provisions of the
applicable Stock Option Agreement. The Stock Option Agreement may
specify that payment may be made in any form(s) described in this
Article 6.
(b) In the case of an NSO, the Committee, in its sole
and absolute discretion, may at any time accept payment in any form(s)
described in this Article 6.
6.2 SURRENDER OF STOCK. To the extent applicable under Section 6.1, payment
for all or any part of the Exercise Price may be made with Common Shares which
are already owned by the Optionee. Such Common Shares shall be valued at their
Fair Market Value on the date when the new Common Shares are purchased under the
Plan. The Optionee shall not surrender Common Shares in payment of the Exercise
Price if such surrender would cause the
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<PAGE>
Company to recognize compensation expense with respect to the Option for
financial reporting purposes.
6.3 EXERCISE/SALE. To the extent applicable under Section 6.1, payment may
be made by the delivery (on a form prescribed by the Company) of an irrevocable
direction to a securities broker approved by the Company to sell Common Shares
and to deliver all or part of the sales proceeds to the Company in payment of
all or part of the Exercise Price and any withholding taxes.
6.4 EXERCISE/PLEDGE. To the extent applicable under Section 6.1, payment
may be made by the delivery (on a form prescribed by the Company) of an
irrevocable direction to pledge Common Shares to a securities broker or lender
approved by the Company, as security for a loan, and to deliver all or part of
the loan proceeds to the Company in payment of all or part of the Exercise Price
and any withholding taxes.
6.5 PROMISSORY NOTE. To the extent applicable under Section 6.1, payment
may be made with a promissory note; provided that the par value of the Common
Shares shall be paid in cash or cash equivalents.
6.6 OTHER FORMS OF PAYMENT. To the extent applicable under Section 6.1,
payment may be made in any other form that is consistent with applicable laws,
regulations and rules.
ARTICLE 7. PLAN SHARES
7.1 TIME, AMOUNT AND FORM OF AWARDS. Awards under the Plan may be granted
in the form of Plan Shares. Plan Shares may also be awarded in combination with
NSOs, and such an Award may provide that the Plan Shares will be forfeited in
the event that the related NSOs are exercised.
7.2 PAYMENT FOR AWARDS. To the extent that an Award is granted in the form
of newly issued Plan Shares, the Award recipient, as a condition to the grant of
such Award, shall be required to pay the Company in cash or cash equivalents an
amount equal to the par value of such Plan Shares. To the extent that an Award
is granted in the form of Plan Shares from the Company's treasury, no cash
consideration shall be required of the Award recipients. To the extent payment
is not made in cash or cash equivalents, it may be made with a promissory note
if the Stock Agreement so provides.
7.3 VESTING CONDITIONS. Each Award of Plan Shares may or may not be subject
to vesting. Vesting may occur in full or in installments, upon satisfaction of
the conditions specified in the Stock Agreement. A Stock Agreement may provide
for accelerated vesting in the event of the Participant's death, disability or
retirement or other events. If a Change in Control occurs with respect to the
Company, then all outstanding Plan Shares shall become vested to the extent that
they otherwise would have become vested within twelve months after such Change
of Control. The Committee may include among such conditions the requirement that
the performance of the Company or a business unit of the Company for a specified
period of one or more years equal or exceed a target determined in advance by
the Committee. Such performance shall be determined by the Company's independent
auditors. Such a target shall be based upon one or more of the following
criteria: return on equity, operating income, earnings per share, market share
results or revenue targets. The Committee shall determine such target not later
than the 90th day of such period. In no event shall the number of Plan Shares
which are subject to performance-based vesting conditions and which are granted
to any Participant in a single calendar year exceed 250,000, subject to
adjustment in accordance with Article 8.
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<PAGE>
7.4 VOTING AND DIVIDEND RIGHTS. The holders of Plan Shares subject to
vesting awarded under the Plan shall have the same voting, dividend and other
rights as the Company's other stockholders.
ARTICLE 8. PROTECTION AGAINST DILUTION
8.1 ADJUSTMENTS. In the event of a subdivision of the outstanding Common
Shares, a declaration of a dividend payable in Common Shares, a declaration of a
dividend payable in a form other than Common Shares in an amount that has a
material effect on the price of Common Shares, a combination or consolidation of
the outstanding Common Shares (by reclassification or otherwise) into a lesser
number of Common Shares, a recapitalization, a spin-off or a similar occurrence,
the Committee shall make such adjustments as it, in its sole discretion, deems
appropriate in one or more of (a) the number of Options and Plan Shares
available for future Awards under Article 3, (b) the limitations set forth in
Section 5.2, (c) the number of Common Shares covered by each outstanding Option
or (d) the Exercise Price under each outstanding Option. Except as provided in
this Article 8, a Participant shall have no rights by reason of any issue by the
Company of stock of any class or securities convertible into stock of any class,
any subdivision or consolidation of shares of stock of any class, the payment of
any stock dividend or any other increase or decrease in the number of shares of
stock of any class.
8.2 DISSOLUTION OR LIQUIDATION. In the event of the proposed dissolution or
liquidation of the Company, the Committee shall notify each Optionee as soon as
practicable prior to the effective date of such proposed transaction. The
Committee in its discretion may provide for an Optionee to have the right to
exercise his or her Options until 10 days prior to such transaction as to some
or all of the Common Shares covered thereby, including Common Shares as to which
the Options would not otherwise be exercisable. In addition, the Committee may
provide that any Company repurchase option applicable to any Shares purchased
upon exercise of an Option or to any Plan Shares shall lapse as to some or all
such Shares, provided the proposed dissolution or liquidation takes place at the
time and in the manner contemplated. To the extent not previously exercised,
Options shall terminate immediately prior to the consummation of such proposed
action.
8.3 REORGANIZATIONS. In the event that the Company is a party to a merger
or other reorganization, outstanding Options and Plan Shares shall be subject to
the agreement of merger or reorganization. Such agreement may provide, without
limitation, for the continuation of outstanding Awards by the Company (if the
Company is a surviving corporation), for their assumption by the surviving
corporation or its parent or subsidiary, for the substitution by the surviving
corporation or its parent or subsidiary of its own awards for such Awards, for
accelerated vesting and accelerated expiration, or for settlement in cash or
cash equivalents.
ARTICLE 9. AWARDS UNDER OTHER PLANS
The Company may grant awards under other plans or programs. Such awards may be
settled in the form of Common Shares issued under this Plan. Such Common Shares
shall be treated for all purposes under the Plan like Plan Shares and shall,
when issued, reduce the number of Common Shares available for the grant of Plan
Shares under Article 3.
ARTICLE 10. LIMITATION ON RIGHTS
10.1 RETENTION RIGHTS. Neither the Plan nor any Award granted under the
Plan shall be deemed to give any individual a right to remain an Employee,
Outside Director or Consultant. The Company and its Parents, Subsidiaries and
Affiliates reserve the right to terminate the service of any Employee, Outside
Director or Consultant at any time, with or without cause, subject to applicable
laws, the Company's certificate of incorporation and by-laws and a written
employment agreement (if any).
-5-
<PAGE>
10.2 STOCKHOLDERS' RIGHTS. An Optionee shall have no dividend rights,
voting rights or other rights as a stockholder with respect to any Common Shares
covered by his or her Award prior to the time when he or she becomes entitled to
receive such Common Shares by filing a notice of exercise and paying the
Exercise Price. No adjustment shall be made for cash dividends or other rights
for which the record date is prior to such time, except as expressly provided in
the Plan.
10.3 REGULATORY REQUIREMENTS. Any other provision of the Plan
notwithstanding, the obligation of the Company to issue Common Shares under the
Plan shall be subject to all applicable laws, rules and regulations and such
approval by any regulatory body as may be required. The Company reserves the
right to restrict, in whole or in part, the delivery of Common Shares pursuant
to any Award prior to the satisfaction of all legal requirements relating to the
issuance of such Common Shares, to their registration, qualification or listing
or to an exemption from registration, qualification or listing.
ARTICLE 11. WITHHOLDING TAXES
11.1 GENERAL. To the extent required by applicable federal, state, local or
foreign law, a Participant or his or her successor shall make arrangements
satisfactory to the Company for the satisfaction of any withholding tax
obligations that arise in connection with the Plan. The Company shall not be
required to issue any Common Shares or make any cash payment under the Plan
until such obligations are satisfied.
11.2 SHARE WITHHOLDING. The Committee may permit a Participant to satisfy
all or part of his or her withholding or income tax obligations by having the
Company withhold all or a portion of any Common Shares that otherwise would be
issued to him or her or by surrendering all or a portion of any Common Shares
that he or she previously acquired. Such Common Shares shall be valued at their
Fair Market Value on the date when taxes otherwise would be withheld in cash.
ARTICLE 12. FUTURE OF THE PLAN
12.1 TERM OF THE PLAN. The Plan became effective on October 1, 1996. The
Plan shall remain in effect until it is terminated under Section 12.2, except
that no ISOs shall be granted after June 18, 2006.
12.2 AMENDMENT OR TERMINATION. The Board may, at any time and for any
reason, amend or terminate the Plan. An amendment of the Plan shall be subject
to the approval of the Company's stockholders only to the extent required by
applicable laws, regulations or rules. No Awards shall be granted under the Plan
after the termination thereof. The termination of the Plan, or any amendment
thereof, shall not affect any Award previously granted under the Plan.
ARTICLE 13. DEFERRAL OF DELIVERY OF SHARES
The Committee (in its sole discretion) may permit or require an Optionee to have
Common Shares that otherwise would be delivered to such Optionee as a result of
the exercise of an Option converted into amounts credited to a deferred
compensation account established for such Optionee by the Committee as an entry
on the Company's books. Such amounts shall be determined by reference to the
Fair Market Value of such Common Shares as of the date when they otherwise would
have been delivered to such Optionee. A deferred compensation account
established under this Article 13 may be credited with interest or other forms
of investment return, as determined by the Committee. An Optionee for whom such
an account is established shall have no rights other than those of a general
creditor of the Company. Such an account shall represent an unfunded and
unsecured obligation of the Company and shall be subject to the terms and
conditions of the
-6-
<PAGE>
applicable agreement between such Optionee and the Company. If the conversion of
Options is permitted or required, the Committee (in its sole discretion) may
establish rules, procedures and forms pertaining to such conversion, including
(without limitation) the settlement of deferred compensation accounts
established under this Article 13.
ARTICLE 14. DEFINITIONS
14.1 "AFFILIATE" means any entity other than a Subsidiary, if the Company
and/or one or more Subsidiaries own not less than 50% of such entity.
14.2 "AWARD" means any award of an Option or a Plan Share under the Plan.
14.3 "BOARD" means the Company's Board of Directors, as constituted from
time to time.
14.4 "CHANGE IN CONTROL" shall mean (i) a merger or other reorganization in
which the stockholders of the Company immediately prior to such transaction do
not hold directly indirectly at least 50% of the voting power of the surviving
entity or the parent corporation of the surviving entity immediately following
such merger or other reorganization or (ii) the sale of all or substantially all
of the Company's assets.
14.5 "CODE" means the Internal Revenue Code of 1986, as amended.
14.6 "COMMITTEE" means a committee of the Board, as described in Article 2.
14.7 "COMMON SHARE" means one share of the common stock of the Company.
14.8 "COMPANY" means Hambrecht & Quist Group, a Delaware corporation.
14.9 "CONSULTANT" means a consultant or adviser who provides bona fide
services to the Company, a Parent, a Subsidiary or an Affiliate as an
independent contractor. Service as a Consultant shall be considered employment
for all purposes of the Plan, except as provided in Section 4.2.
14.10 "EMPLOYEE" means a common-law employee of the Company, a Parent, a
Subsidiary or an Affiliate.
14.11 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
14.12 "EXECUTIVE OFFICERS" means those Employees of the Company who are
required to file reports under Section 16(a) of the Exchange Act.
14.13 "EXERCISE PRICE," in the case of an Option, means the amount for
which one Common Share may be purchased upon exercise of such Option, as
specified in the applicable Stock Option Agreement.
14.14 "FAIR MARKET VALUE" means the market price of Common Shares,
determined by the Committee in good faith on such basis as it deems appropriate.
Such determination shall be conclusive and binding on all persons.
14.15 "ISO" means an incentive stock option described in section 422(b) of
the Code.
14.16 "NSO" means a nonstatutory stock option not described in sections 422
or 423 of the Code.
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<PAGE>
14.17 "OPTION" means an ISO or NSO granted under the Plan and entitling the
holder to purchase Common Shares.
14.18 "OPTIONEE" means an individual or estate who holds an Option.
14.19 "OUTSIDE DIRECTOR" shall mean a member of the Board who is not an
Employee. Service as an Outside Director shall be considered employment for all
purposes of the Plan, except as provided in Section 4.2.
14.20 "PARENT" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain. A corporation that attains the status of a Parent on
a date after the adoption of the Plan shall be considered a Parent commencing as
of such date.
14.21 "PARTICIPANT" means an individual or estate who holds an Award.
14.22 "PLAN" means this Hambrecht & Quist Group 1996 Equity Plan, as
amended from time to time.
14.23 "PLAN SHARE" means a Common Share awarded under the Plan.
14.24 "SECTION 16 PERSONS" means those persons required to file reports
pursuant to Section 16(a) of the Exchange Act.
14.25 "STOCK AGREEMENT" means the agreement between the Company and the
recipient of a Plan Share that contains the terms, conditions and any
restrictions pertaining to such Plan Share.
14.26 "STOCK OPTION AGREEMENT" means the agreement between the Company and
an Optionee that contains the terms, conditions and restrictions pertaining to
his or her Option.
14.27 "SUBSIDIARY" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. A corporation that attains
the status of a Subsidiary on a date after the adoption of the Plan shall be
considered a Subsidiary commencing as of such date.
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