<PAGE>
As filed with the Securities and Exchange Commission on October 21, 1999
REGISTRATION NO. 333-
===============================================================================
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
CURAGEN CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 06-1331400
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
555 LONG WHARF DRIVE, 11TH FLOOR
NEW HAVEN, CONNECTICUT 06511
(Address of Principal Executive Offices) (Zip Code)
CURAGEN CORPORATION 1997 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK PLAN
(Full title of the plan)
JONATHAN M. ROTHBERG, Ph.D.
Chief Executive Officer, President and
Chairman of the Board
Curagen Corporation
555 Long Wharf Drive, 11th Floor
New Haven, Connecticut 06511
(Name and address of agent for service)
(203)-401-3330
(203)-401-3333 FACSIMILE
(Telephone number, including area code, of agent for service)
---------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of Amount to be maximum Maximum Amount of
securities to be registered registered(1) offering price Aggregate registration fee
per share(2) Offering price(2)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 2,000,000 $14.375 $28,750,000 $7,993
========= =====
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The number of shares of common stock, par value $.01 per share ("Common
Stock"), stated above consists of the aggregate number of additional shares
not previously registered which may be sold upon the exercise of options
which may hereafter be granted under the CuraGen Corporation 1997 Employee,
Director and Consultant Stock Plan (the "Plan"). The maximum number of
shares which may be sold upon the exercise of such options granted under the
Plan is subject to adjustment in accordance with certain anti-dilution and
other provisions of said Plan. Accordingly, pursuant to Rule 416 under the
Securities Act of 1933, as amended (the "Securities Act"), this Registration
Statement covers, in addition to the number of shares stated above, an
indeterminate number of shares which may be subject to grant or otherwise
issuable after the operation of any such anti-dilution and other provisions.
(2) This calculation is made solely for the purpose of determining the
registration fee pursuant to the provisions of Rule 457(h) under the
Securities Act and is made on the basis of the average of the high and low
sale prices per share of the Common Stock on the National Market System of
the National Association of Securities Dealers Automated Quotation System
(NASDAQ) as of a date (October 18, 1999) within 5 business days prior to
filing this Registration Statement.
================================================================================
<PAGE>
EXPLANATORY NOTE
----------------
In accordance with the instructional Note to Part I of Form S-8 as
promulgated by the Securities and Exchange Commission, the information specified
by Part I of Form S-8 has been omitted from this Registration Statement on Form
S-8 for offers of Common Stock pursuant to the Plan. This Registration
Statement on Form S-8 hereby registers 2,000,000 additional shares of Common
Stock pursuant to the Plan. A Registration Statement on Form S-8 (File No. 333-
56829), registering an aggregate of 3,058,383 shares of Common Stock under (i)
the Plan, (ii) the CuraGen Corporation 1993 Stock Option and Incentive Award
Plan and (iii) certain Non-Qualified Stock Option Agreements was filed with the
Securities and Exchange Commission on June 15, 1998.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
- --------------------------------------------------------
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998.
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1999.
(c) The Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1999.
(d) The Company's Current Report on Form 8-K filed on September 8, 1999.
(e) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A, File No. 000-23223 filed under the
Securities Exchange Act of 1934, including any amendment or report filed for the
purpose of updating such description.
All reports and other documents filed by the Registrant after the date
hereof pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934 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 herein and to be part hereof from the date of filing of such reports
and documents.
Item 4. Description of Securities.
- ----------------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
- -----------------------------------------------
The validity of the issuance of the shares of Common Stock registered under
this Registration Statement has been passed upon for the Company by Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C. of Boston, Massachusetts. Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C., members of Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C. and certain members of their families and trusts
for their benefit own an aggregate of approximately 51,452 shares of Common
Stock of the Company and warrants to purchase an aggregate of approximately
18,413 shares of Common Stock of the Company.
Item 6. Indemnification of Directors and Officers.
- --------------------------------------------------
Incorporated herein by reference from the Company's Registration Statement
on Form S-1, File No. 333-38051.
II-1
<PAGE>
Item 7. Exemption from Registration Claimed.
- --------------------------------------------
Not applicable.
Item 8. Exhibits.
- -----------------
(4.1) Form of Common Stock Certificate (Filed as Exhibit 4.2 to the
Registrant's Registration Statement on Form S-1, as amended, File
No. 333-38051, and incorporated herein by reference).
(4.2) Article Fourth of the Amended and Restated Certificate of
Incorporation of the Registrant (Filed as Exhibit 3.3 to the
Registrant's Registration Statement on Form S-1, File No. 333-38051,
and incorporated herein by reference).
(4.3) Amended and Restated Bylaws of the Registrant (Filed as Exhibit
3.5 to the Registrant's Registration Statement on Form S-1, as
amended, File No. 333-38051, and incorporated herein by reference).
(5) Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. as to
the legality of shares being registered.
(23.1) Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
(included in opinion of counsel filed as Exhibit 5).
(23.2) Consent of Deloitte & Touche LLP
(24) Power of Attorney to file future amendments (set forth on the
signature page of this Registration Statement.)
(99) 1997 Employee, Director and Consultant Stock Plan, as amended and
restated through May 12, 1999.
Item 9. Undertakings.
- ---------------------
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represents a fundamental
change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would
II-2
<PAGE>
not exceed that which was registered) and any deviation from the low
or high end of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent
no more than a 20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
Registration Statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the Registration Statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 that is incorporated by reference in
this Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the Registrant, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(d) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is
sent or given, the latest annual report to security holders that is
incorporated by reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information required to
be presented by Article 3 of Regulation S-X are not set forth in the
prospectus, to deliver or cause to be delivered to each person to whom the
prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such
interim financial information.
II-3
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New Haven, Connecticut on this 21st day of
October, 1999
CURAGEN CORPORATION
By /s/ Jonathan M. Rothberg
----------------------------------------
Jonathan M. Rothberg
Chief Executive Officer, President and
Chairman of the Board
Each person whose signature appears below constitutes and appoints Jonathan
M. Rothberg his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, and
in any and all capacities, to sign any and all amendments (including post-
effective amendments) to this Registration Statement on Form S-8 of CuraGen
Corporation, and to file the same, with all exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite or necessary to be done in or about the
premises, as full to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact and agent or his
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Jonathan M. Rothberg Chief Executive Officer, October 21, 1999
- ------------------------ President and Chairman
Jonathan M. Rothberg of the Board
(principal executive officer)
/s/ David M. Wurzer Executive Vice President, October 21, 1999
- ------------------------ Treasurer and Chief Financial
David M. Wurzer Officer (principal financial
and accounting officer)
II-4
<PAGE>
/s/ Vincent T. DeVita, M.D. Director October 21, 1999
- --------------------------
Vincent T. DeVita, M.D.
/s/ Richard H. Booth Director October 21, 1999
- --------------------------
Richard H. Booth
/s/ Robert E. Patricelli Director October 21, 1999
- --------------------------
Robert E. Patricelli
/s/ James L. Vincent Director October 21, 1999
- --------------------------
James L. Vincent
II-5
<PAGE>
CURAGEN CORPORATION
INDEX TO EXHIBITS FILED WITH
FORM S-8 REGISTRATION STATEMENT
(4.1) Form of Common Stock Certificate (Filed as Exhibit 4.2 to the
Registrant's Registration Statement on Form S-1, as amended, File
No. 333-38051, and incorporated herein by reference).
(4.2) Article Fourth of the Amended and Restated Certificate of
Incorporation of the Registrant (Filed as Exhibit 3.3 to the
Registrant's Registration Statement on Form S-1, File No. 333-38051,
and incorporated herein by reference).
(4.3) Amended and Restated Bylaws of the Registrant (Filed as Exhibit
3.5 to the Registrant's Registration Statement on Form S-1, as
amended, File No. 333-38051, and incorporated herein by reference).
(5) Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. as to
the legality of shares being registered.
(23.1) Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
(included in opinion of counsel filed as Exhibit 5).
(23.2) Consent of Deloitte & Touche LLP
(24) Power of Attorney to file future amendments (set forth on the
signature page of this Registration Statement.)
(99) 1997 Employee, Director and Consultant Stock Plan, as amended and
restated through May 12, 1999.
II-6
<PAGE>
Exhibit 5
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02111
701 Pennsylvania Avenue, N.W. Telephone: 617/542-6000
Washington, D.C. 20004 Fax: 617/542-2241
Telephone: 202/434-7300 www.Mintz.com
Fax: 202/434-7400
October 21, 1999
CuraGen Corporation
555 Long Wharf Drive, 11th Floor
New Haven, Connecticut 06511
Ladies and Gentlemen:
We have acted as counsel to CuraGen Corporation, a Delaware corporation (the
"Company"), in connection with the preparation and filing with the Securities
and Exchange Commission of a Registration Statement on Form S-8 (the
"Registration Statement"), pursuant to which the Company is registering the
issuance under the Securities Act of 1933, as amended, of a total of 2,000,000
shares (the "Shares") of its common stock, $.01 par value per share (the "Common
Stock"). This opinion is being rendered in connection with the filing of the
Registration Statement. All capitalized terms used herein and not otherwise
defined shall have the respective meanings given to them in the Registration
Statement.
In connection with this opinion, we have examined the Company's Amended and
Restated Certificate of Incorporation and Amended and Restated Bylaws, both as
currently in effect; such other records of the corporate proceedings of the
Company and certificates of the Company's officers as we have deemed relevant;
and the Registration Statement and the exhibits thereto.
In our examination, we have assumed the genuineness of all signatures, the
legal capacity of natural persons, the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents
submitted to us as certified or photostatic copies and the authenticity of the
originals of such copies.
Based upon the foregoing, we are of the opinion that (i) the Shares have been
duly and validly authorized by the Company and (ii) the Shares, when sold, will
have been duly and validly issued, fully paid and non-assessable shares of the
Common Stock, free of preemptive rights.
Our opinion is limited to the General Corporation Laws of the State of
Delaware, and we express no opinion with respect to the laws of any other
jurisdiction. No opinion is expressed herein with respect to the qualification
of the Shares under the securities or blue sky laws of any state or any foreign
jurisdiction.
We understand that you wish to file this opinion as an exhibit to the
Registration Statement, and we hereby consent thereto.
Very truly yours,
/s/ Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
<PAGE>
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of CuraGen Corporation on Form S-8 of our report dated February 12, 1999,
appearing in the Annual Report on Form 10-K of CuraGen Corporation for the year
ended December 31, 1998.
/s/ Deloitte & Touche LLP
Hartford, Connecticut
October 21, 1999
<PAGE>
Exhibit 99
CURAGEN CORPORATION
AMENDED AND RESTATED
1997 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK PLAN
1. DEFINITIONS.
-----------
Unless otherwise specified or unless the context otherwise requires, the
following terms, as used in this CuraGen Corporation 1997 Employee,
Director and Consultant Stock Plan, have the following meanings:
Administrator means the Board of Directors, unless it has delegated
-------------
power to act on its behalf to the Committee, in which case the
Administrator means the Committee.
Affiliate means a corporation which, for purposes of Section 424 of
---------
the Code, is a parent or subsidiary of the Company, direct or
indirect.
Board of Directors means the Board of Directors of the Company.
------------------
Code means the United States Internal Revenue Code of 1986, as
----
amended.
Committee means the committee of the Board of Directors to which the
---------
Board of Directors has delegated power to act under or pursuant to the
provisions of the Plan.
Common Stock means shares of the Company's voting common stock, $.01
------------
par value per share.
Company means CuraGen Corporation, a Delaware corporation.
-------
Disability or Disabled means permanent and total disability as defined
---------- --------
in Section 22(e)(3) of the Code.
Fair Market Value of a Share of Common Stock means:
-----------------
(1) If the Common Stock is listed on a national securities exchange or
traded in the over-the-counter market and sales prices are regularly
reported for the Common Stock, the closing or last price of the Common
Stock on the Composite Tape or other comparable reporting system for
the trading day immediately preceding the applicable date;
<PAGE>
(2) If the Common Stock is not traded on a national securities
exchange but is traded on the over-the-counter market, if sales prices
are not regularly reported for the Common Stock for the trading day
referred to in clause (1), and if bid and asked prices for the Common
Stock are regularly reported, the mean between the bid and the asked
price for the Common Stock at the close of trading in the over-the-
counter market for the trading day on which Common Stock was traded
immediately preceding the applicable date; and
(3) If the Common Stock is neither listed on a national securities
exchange nor traded in the over-the-counter market, such value as the
Administrator, in good faith, shall determine.
ISO means an option meant to qualify as an incentive stock option
---
under Section 422 of the Code.
Key Employee means an employee of the Company or of an Affiliate
------------
(including, without limitation, an employee who is also serving as an
officer or director of the Company or of an Affiliate), designated by
the Administrator to be eligible to be granted one or more Stock
Rights under the Plan.
Non-Qualified Option means an option which is not intended to qualify
--------------------
as an ISO.
Option means an ISO or Non-Qualified Option granted under the Plan.
------
Option Agreement means an agreement between the Company and a
----------------
Participant delivered pursuant to the Plan, in such form as the
Administrator shall approve.
Participant means a Key Employee, director or consultant to whom one
-----------
or more Stock Rights are granted under the Plan. As used herein,
"Participant" shall include "Participant's Survivors" where the
context requires.
Plan means this CuraGen Corporation 1997 Employee, Director and
----
Consultant Stock Plan.
Shares means shares of the Common Stock as to which Stock Rights have
------
been or may be granted under the Plan or any shares of capital stock
into which the Shares are changed or for which they are exchanged
within the provisions of Paragraph 3 of the Plan. The Shares issued
under the Plan may be authorized and unissued shares or shares held by
the Company in its treasury, or both.
Stock Grant means a grant by the Company of Shares under the Plan.
-----------
Stock Grant Agreement means an agreement between the Company and a
---------------------
Participant delivered pursuant to the Plan, in such form as the
Administrator shall approve.
2
<PAGE>
Stock Right means a right to Shares of the Company granted pursuant to
-----------
the Plan -- an ISO, a Non-Qualified Option or a Stock Grant.
Survivors means a deceased Participant's legal representatives and/or
---------
any person or persons who acquired the Participant's rights to a Stock
Right by will or by the laws of descent and distribution.
2. PURPOSES OF THE PLAN.
--------------------
The Plan is intended to encourage ownership of Shares by Key Employees and
directors of and certain consultants to the Company in order to attract such
people, to induce them to work for the benefit of the Company or of an Affiliate
and to provide additional incentive for them to promote the success of the
Company or of an Affiliate. The Plan provides for the granting of ISOs, Non-
Qualified Options and Stock Grants.
3. SHARES SUBJECT TO THE PLAN.
--------------------------
The number of Shares which may be issued from time to time pursuant to this
Plan shall be 3,500,000 or the equivalent of such number of Shares after the
Administrator, in its sole discretion, has interpreted the effect of any stock
split, stock dividend, combination, recapitalization or similar transaction in
accordance with Paragraph 23 of the Plan.
If an Option ceases to be "outstanding", in whole or in part, or if the
Company shall reacquire any Shares issued pursuant to a Stock Grant, the Shares
which were subject to such Option and any Shares so reacquired by the Company
shall be available for the granting of other Stock Rights under the Plan. Any
Option shall be treated as "outstanding" until such Option is exercised in full,
or terminates or expires under the provisions of the Plan, or by agreement of
the parties to the pertinent Option Agreement.
4. ADMINISTRATION OF THE PLAN.
--------------------------
The Administrator of the Plan will be the Board of Directors, except to the
extent the Board of Directors delegates its authority to the Committee, in which
case the Committee shall be the Administrator. Subject to the provisions of the
Plan, the Administrator is authorized to:
a. Interpret the provisions of the Plan or of any Option or Stock Grant
and to make all rules and determinations which it deems necessary or
advisable for the administration of the Plan;
3
<PAGE>
b. Determine which employees of the Company or of an Affiliate shall be
designated as Key Employees and which of the Key Employees, directors
and consultants shall be granted Stock Rights;
c. Determine the number of Shares for which a Stock Right or Stock Rights
shall be granted, provided, however, that in no event shall Stock
Rights with respect to more than 750,000 shares be granted to any
Participant in any fiscal year; and
d. Specify the terms and conditions upon which a Stock Right or Stock
Rights may be granted;
provided, however, that all such interpretations, rules, determinations, terms
and conditions shall be made and prescribed in the context of preserving the tax
status under Section 422 of the Code of those Options which are designated as
ISOs. Subject to the foregoing, the interpretation and construction by the
Administrator of any provisions of the Plan or of any Stock Right granted under
it shall be final, unless otherwise determined by the Board of Directors, if the
Administrator is the Committee.
5. ELIGIBILITY FOR PARTICIPATION.
-----------------------------
The Administrator will, in its sole discretion, name the Participants in
the Plan, provided, however, that each Participant must be a Key Employee,
director or consultant of the Company or of an Affiliate at the time a Stock
Right is granted. Notwithstanding the foregoing, the Administrator may
authorize the grant of a Stock Right to a person not then an employee, director
or consultant of the Company or of an Affiliate; provided, however, that the
actual grant of such Stock Right shall be conditioned upon such person becoming
eligible to become a Participant at or prior to the time of the delivery of the
Agreement evidencing such Stock Right. ISOs may be granted only to Key
Employees. Non-Qualified Options and Stock Grants may be granted to any Key
Employee, director or consultant of the Company or an Affiliate. The granting
of any Stock Right to any individual shall neither entitle that individual to,
nor disqualify him or her from, participation in any other grant of Stock
Rights.
6. TERMS AND CONDITIONS OF OPTIONS.
-------------------------------
Each Option shall be set forth in writing in an Option Agreement, duly
executed by the Company and, to the extent required by law or requested by the
Company, by the Participant. The Administrator may provide that Options be
granted subject to such conditions as the Administrator may deem appropriate
including, without limitation, subsequent approval by the shareholders of the
Company of this Plan or any amendments thereto. The Option Agreements shall be
subject to at least the following terms and conditions:
A. Non-Qualified Options: Each Option intended to be a Non-Qualified
---------------------
Option shall be subject to the terms and conditions which the
Administrator determines to be
4
<PAGE>
appropriate and in the best interest of the Company, subject to the
following minimum standards for any such Non-Qualified Option:
a. Option Price: Each Option Agreement shall state the option price
(per share) of the Shares covered by each Option, which option
price shall be determined by the Administrator but shall not be
less than the par value per share of Common Stock.
b. Each Option Agreement shall state the number of Shares to which
it pertains;
c. Each Option Agreement shall state the date or dates on which it
first is exercisable and the date after which it may no longer be
exercised, and may provide that the Option rights accrue or
become exercisable in installments over a period of months or
years, or upon the occurrence of certain conditions or the
attainment of stated goals or events; and
d. Exercise of any Option may be conditioned upon the Participant's
execution of a Share purchase agreement in form satisfactory to
the Administrator providing for certain protections for the
Company and its other shareholders, including requirements that:
i. The Participant's or the Participant's Survivors' right to
sell or transfer the Shares may be restricted; and
ii. The Participant or the Participant's Survivors may be
required to execute letters of investment intent and must
also acknowledge that the Shares will bear legends noting
any applicable restrictions.
e. Directors' Options: Each director of the Company who is serving
------------------
on the Board of Directors on October 6, 1997 and who is not an
employee of or consultant to the Company or any Affiliate, shall
be granted a Non-Qualified Option to purchase 5,000 Shares as of
such date. In addition, each director of the Company who is
elected or appointed to the Board of Directors after October 6,
1997 and who is not an employee of or consultant to the Company
or any Affiliate, upon first being elected or appointed to the
Board of Directors, shall be granted a Non-Qualified Option to
purchase 20,000 Shares as of the date of election or appointment.
Each Option described in the foregoing two sentences shall (i)
have an exercise price equal to the Fair Market Value (per share)
of the Shares on the date of grant of the Option, (ii) have a
term of ten years, and (iii) become cumulatively exercisable as
follows: (x) one-third shall vest immediately on the date of
grant, (y) one-third shall vest on the first anniversary of the
date of grant, and (z) one-third shall vest on the second
anniversary of the date of grant.
5
<PAGE>
Immediately following the 1998 annual meeting of stockholders (or
special meeting in lieu of an annual meeting), and until the 1999
annual meeting of stockholders, each Continuing Director (as
defined below) will be granted a Non-Qualified Option to purchase
5,000 Shares. Immediately following each annual meeting of
stockholders (or special meeting in lieu of an annual meeting),
commencing with the 1999 annual meeting, each Continuing Director
(as defined below) will be granted a Non-Qualified Option to
purchase 7,500 Shares. As used herein, the term "Continuing
Director" shall mean a director who (i) is serving as a director
immediately following such annual or special meeting but was not
first elected at such annual or special meeting, (ii) has been in
continued and uninterrupted service as a director of the Company
since his or her initial election or appointment and (iii) is not
an employee of or consultant to the Company or any Affiliate.
Each such Option shall (i) have an exercise price equal to the
Fair Market Value (per share) of the Shares on the date of grant
of the Option, (ii) have a term of ten years, and (iii) be
immediately exercisable in full.
Any director entitled to receive an Option under this
subparagraph may elect to decline the Option.
Except as otherwise provided in the pertinent Option Agreement, if a
director who receives Options pursuant to this subparagraph:
a. ceases to be a member of the Board of Directors for any
reason other than death or Disability, any then unexercised
Options granted to such director may be exercised by the
director within a period of ninety (90) days after the date
the director ceases to be a member of the Board of
Directors, but only to the extent of the number of Shares
with respect to which the Options are exercisable on the
date the director ceases to be a member of the Board of
Directors, and in no event later than the expiration date of
the Option; or
b. ceases to be a member of the Board of Directors by reason of
his or her death or Disability, any then unexercised Options
granted to such director may be exercised by the director
(or by the director's personal representative, or the
director's Survivors) within a period of one hundred eighty
(180) days after the date the director ceases to be a member
of the Board of Directors, but only to the extent of the
number of Shares with respect to which the Options are
exercisable on the date the director ceases to be a member
of the Board of Directors, and in no event later than the
expiration date of the Option.
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B. ISOs: Each Option intended to be an ISO shall be issued only to a Key
----
Employee and be subject to at least the following terms and
conditions, with such additional restrictions or changes as the
Administrator determines are appropriate but not in conflict with
Section 422 of the Code and relevant regulations and rulings of the
Internal Revenue Service:
a. Minimum standards: The ISO shall meet the minimum standards
required of Non-Qualified Options, as described in Paragraph 6(A)
above, except clauses (a) and (e) thereunder.
b. Option Price: Immediately before the Option is granted, if the
Participant owns, directly or by reason of the applicable
attribution rules in Section 424(d) of the Code:
i. Ten percent (10%) or less of the total combined voting power
-------
of all classes of stock of the Company or an Affiliate, the
Option price per share of the Shares covered by each Option
shall not be less than one hundred percent (100%) of the
Fair Market Value per share of the Shares on the date of the
grant of the Option.
ii. More than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or an
Affiliate, the Option price per share of the Shares covered
by each Option shall not be less than one hundred ten
percent (110%) of the said Fair Market Value on the date of
grant.
c. Term of Option: For Participants who own
i. Ten percent (10%) or less of the total combined voting power
-------
of all classes of stock of the Company or an Affiliate, each
Option shall terminate not more than ten (10) years from the
date of the grant or at such earlier time as the Option
Agreement may provide.
ii. More than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or an
Affiliate, each Option shall terminate not more than five
(5) years from the date of the grant or at such earlier time
as the Option Agreement may provide.
d. Limitation on Yearly Exercise: The Option Agreements shall
restrict the amount of Options which may be exercisable in any
calendar year (under this or any other ISO plan of the Company or
an Affiliate) so that the aggregate Fair Market Value (determined
at the time each ISO is granted) of the stock with respect to
which ISOs are exercisable for the first time by the Participant
in any calendar year does not exceed one hundred thousand
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dollars ($100,000), provided that this subparagraph (d) shall
have no force or effect if its inclusion in the Plan is not
necessary for Options issued as ISOs to qualify as ISOs pursuant
to Section 422(d) of the Code.
7. TERMS AND CONDITIONS OF STOCK GRANTS.
------------------------------------
Each offer of a Stock Grant to a Participant shall state the date prior to
which the Stock Grant must be accepted by the Participant, and the principal
terms of each Stock Grant shall be set forth in a Stock Grant Agreement, duly
executed by the Company and, to the extent required by law or requested by the
Company, by the Participant. The Stock Grant Agreement shall be in a form
approved by the Administrator and shall contain terms and conditions which the
Administrator determines to be appropriate and in the best interest of the
Company, subject to the following minimum standards:
(a) Each Stock Grant Agreement shall state the purchase price (per share),
if any, of the Shares covered by each Stock Grant, which purchase
price shall be determined by the Administrator but shall not be less
than the minimum consideration required by the Delaware General
Corporation Law on the date of the grant of the Stock Grant;
(b) Each Stock Grant Agreement shall state the number of Shares to which
the Stock Grant pertains; and
(c) Each Stock Grant Agreement shall include the terms of any right of the
Company to reacquire the Shares subject to the Stock Grant, including
the time and events upon which such rights shall accrue and the
purchase price therefor, if any.
8. EXERCISE OF OPTIONS AND ISSUE OF SHARES.
---------------------------------------
An Option (or any part or installment thereof) shall be exercised by giving
written notice to the Company at its principal executive office address,
together with provision for payment of the full purchase price in accordance
with this Paragraph for the Shares as to which the Option is being exercised,
and upon compliance with any other condition(s) set forth in the Option
Agreement. Such written notice shall be signed by the person exercising the
Option, shall state the number of Shares with respect to which the Option is
being exercised and shall contain any representation required by the Plan or the
Option Agreement. Payment of the purchase price for the Shares as to which such
Option is being exercised shall be made (a) in United States dollars in cash or
by check, or (b) at the discretion of the Administrator, through delivery of
shares of Common Stock having a Fair Market Value equal as of the date of the
exercise to the cash exercise price of the Option, or (c) at the discretion of
the Administrator, by having the Company retain from the shares otherwise
issuable upon exercise of the Option, a number of shares having a Fair Market
Value equal as of the date of exercise to the exercise price of the Option, or
(d) at the discretion of the Administrator, by delivery of the grantee's
personal recourse note bearing
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interest payable not less than annually at no less than 100% of the applicable
Federal rate, as defined in Section 1274(d) of the Code, or (e) at the
discretion of the Administrator, in accordance with a cashless exercise program
established with a securities brokerage firm, and approved by the Administrator,
or (f) at the discretion of the Administrator, by any combination of (a), (b),
(c), (d) and (e) above. Notwithstanding the foregoing, the Administrator shall
accept only such payment on exercise of an ISO as is permitted by Section 422 of
the Code.
The Company shall then reasonably promptly deliver the Shares as to which
such Option was exercised to the Participant (or to the Participant's Survivors,
as the case may be). In determining what constitutes "reasonably promptly," it
is expressly understood that the issuance and delivery of the Shares may be
delayed by the Company in order to comply with any law or regulation (including,
without limitation, state securities or "blue sky" laws) which requires the
Company to take any action with respect to the Shares prior to their issuance.
The Shares shall, upon delivery, be evidenced by an appropriate certificate or
certificates for fully paid, non-assessable Shares.
The Administrator shall have the right to accelerate the date of exercise
of any installment of any Option; provided that the Administrator shall not
accelerate the exercise date of any installment of any Option granted to any Key
Employee as an ISO (and not previously converted into a Non-Qualified Option
pursuant to Paragraph 26) if such acceleration would violate the annual vesting
limitation contained in Section 422(d) of the Code, as described in Paragraph
6.B.d.
The Administrator may, in its discretion, amend any term or condition of an
outstanding Option provided (i) such term or condition as amended is permitted
by the Plan, (ii) any such amendment shall be made only with the consent of the
Participant to whom the Option was granted, or in the event of the death of the
Participant, the Participant's Survivors, if the amendment is adverse to the
Participant, and (iii) any such amendment of any ISO shall be made only after
the Administrator, after consulting the counsel for the Company, determines
whether such amendment would constitute a "modification" of any Option which is
an ISO (as that term is defined in Section 424(h) of the Code) or would cause
any adverse tax consequences for the holder of such ISO.
9. ACCEPTANCE OF STOCK GRANT AND ISSUE OF SHARES.
---------------------------------------------
A Stock Grant (or any part or installment thereof) shall be accepted by
executing the Stock Grant Agreement and delivering it to the Company at its
principal office address, together with provision for payment of the full
purchase price, if any, in accordance with this Paragraph for the Shares as to
which such Stock Grant is being accepted, and upon compliance with any other
conditions set forth in the Stock Grant Agreement. Payment of the purchase
price for the Shares as to which such Stock Grant is being accepted shall be
made (a) in United States dollars in cash or by check, or (b) at the discretion
of the Administrator, through delivery of shares of Common Stock having a fair
market value equal as of the date of acceptance of the Stock Grant to the
purchase price of the Stock Grant determined in good faith by the Administrator,
or (c) at
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the discretion of the Administrator, by delivery of the grantee's personal
recourse note bearing interest payable not less than annually at no less than
100% of the applicable Federal rate, as defined in Section 1274(d) of the Code,
or (d) at the discretion of the Administrator, by any combination of (a), (b)
and (c) above.
The Company shall then reasonably promptly deliver the Shares as to which
such Stock Grant was accepted to the Participant (or to the Participant's
Survivors, as the case may be), subject to any escrow provision set forth in the
Stock Grant Agreement. In determining what constitutes "reasonably promptly,"
it is expressly understood that the issuance and delivery of the Shares may be
delayed by the Company in order to comply with any law or regulation (including,
without limitation, state securities or "blue sky" laws) which requires the
Company to take any action with respect to the Shares prior to their issuance.
The Administrator may, in its discretion, amend any term or condition of an
outstanding Stock Grant or Stock Grant Agreement provided (i) such term or
condition as amended is permitted by the Plan, and (ii) any such amendment shall
be made only with the consent of the Participant to whom the Stock Grant was
made, if the amendment is adverse to the Participant.
10. RIGHTS AS A SHAREHOLDER.
-----------------------
No Participant to whom a Stock Right has been granted shall have rights as
a shareholder with respect to any Shares covered by such Stock Right, except
after due exercise of the Option or acceptance of the Stock Grant and tender of
the full purchase price, if any, for the Shares being purchased pursuant to such
exercise or acceptance and registration of the Shares in the Company's share
register in the name of the Participant.
11. ASSIGNABILITY AND TRANSFERABILITY OF STOCK RIGHTS.
-------------------------------------------------
By its terms, a Stock Right granted to a Participant shall not be
transferable by the Participant other than (i) by will or by the laws of descent
and distribution, or (ii) as otherwise determined by the Administrator and set
forth in the applicable Option Agreement or Stock Grant Agreement. The
designation of a beneficiary of a Stock Right by a Participant shall not be
deemed a transfer prohibited by this Paragraph. Except as provided above, a
Stock Right shall only be exercisable or may only be accepted, during the
Participant's lifetime, by such Participant (or by his or her legal
representative) and shall not be assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process. Any attempted transfer, assignment,
pledge, hypothecation or other disposition of any Stock Right or of any rights
granted thereunder contrary to the provisions of this Plan, or the levy of any
attachment or similar process upon a Stock Right, shall be null and void.
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12. EFFECT ON OPTIONS OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE" OR DEATH
---------------------------------------------------------------------------
OR DISABILITY.
-------------
Except as otherwise provided in the pertinent Option Agreement in the event
of a termination of service (whether as an employee, director or consultant)
with the Company or an Affiliate before the Participant has exercised an Option,
the following rules apply:
a. A Participant who ceases to be an employee, director or consultant of
the Company or of an Affiliate (for any reason other than termination
"for cause", Disability, or death for which events there are special
rules in Paragraphs 13, 14, and 15, respectively), may exercise any
Option granted to him or her to the extent that the Option is
exercisable on the date of such termination of service, but only
within such term as the Administrator has designated in the pertinent
Option Agreement.
b. Except as provided in subparagraph (c) below, or Paragraph 14 or 15,
In no event may an Option Agreement provide, if an Option is intended
to be an ISO, that the time for exercise be later than three (3)
months after the Participant's termination of employment.
c. The provisions of this Paragraph, and not the provisions of Paragraph
14 or 15, shall apply to a Participant who subsequently becomes
Disabled or dies after the termination of employment, director status
or consultancy, provided, however, in the case of a Participant's
Disability or death within three (3) months after the termination of
employment, director status or consultancy, the Participant or the
Participant's Survivors may exercise the Option within one (1) year
after the date of the Participant's termination of employment, but in
no event after the date of expiration of the term of the Option.
d. Notwithstanding anything herein to the contrary, if subsequent to a
Participant's termination of employment, termination of director
status or termination of consultancy, but prior to the exercise of an
Option, the Board of Directors determines that, either prior or
subsequent to the Participant's termination, the Participant engaged
in conduct which would constitute "cause", then such Participant shall
forthwith cease to have any right to exercise any Option.
e. A Participant to whom an Option has been granted under the Plan who is
absent from work with the Company or with an Affiliate because of
temporary disability (any disability other than a permanent and total
Disability as defined in Paragraph 1 hereof), or who is on leave of
absence for any purpose, shall not, during the period of any such
absence, be deemed, by virtue of such absence alone, to have
terminated such Participant's employment, director status or
consultancy with the Company or with an Affiliate, except as the
Administrator may otherwise expressly provide.
11
