<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 3, 1997
REGISTRATION NO. 333-29073
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 3
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
SCM MICROSYSTEMS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 3577 77-0444317
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
SCM MICROSYSTEMS, INC.
131 ALBRIGHT WAY
LOS GATOS, CA 95032
(408) 370-4888
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
STEVEN HUMPHREYS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
SCM MICROSYSTEMS, INC.
131 ALBRIGHT WAY
LOS GATOS, CA 95032
(408) 370-4888
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
JEFFREY D. SAPER, ESQ. MICHAEL S. IMMORDINO, ESQ.
KENNETH M. SIEGEL, ESQ. KARL A. ROESSNER, ESQ.
N. ANTHONY JEFFRIES, ESQ. DAVID M. DETWEILER, ESQ.
JAN-MARC VAN DER SCHEE, ESQ. JOHN CAFIERO, ESQ.
WILSON SONSINI GOODRICH & ROSATI ROGERS & WELLS
PROFESSIONAL CORPORATION CITY TOWER
650 PAGE MILL ROAD 40 BASINGHALL STREET
PALO ALTO, CA 94304 LONDON, EC2V 5DE
(415) 493-9300 ENGLAND
44-171-628-0101
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
------------------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
- ---------
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
- ---------
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
- ---------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the Registrant in connection
with the sale of Common Stock being registered. All amounts are estimates except
the SEC registration fee, the NASD filing fee and the Nasdaq National Market
listing fee.
<TABLE>
<CAPTION>
AMOUNT
TO BE PAID
----------
<S> <C>
SEC registration fee............................................. $ 15,268
NASD filing fee.................................................. 5,539
Nasdaq National Market listing fee............................... 25,000
Printing and engraving expenses.................................. 100,000
Legal fees and expenses.......................................... 350,000
Accounting fees and expenses..................................... 225,000
Directors' and officers' liability insurance..................... 200,000
Blue Sky qualification fees and expenses......................... 3,000
Transfer agent and registrar fees................................ 5,000
Miscellaneous.................................................... 241,193
----------
Total.................................................. $1,170,000
==========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by Section 145 of the Delaware General Corporation Law, the
Registrant's Amended and Restated Certificate of Incorporation includes a
provision that eliminates the personal liability of its directors for monetary
damages for breach or alleged breach of their duty of care. In addition, as
permitted by Section 145 of the Delaware General Corporation Law, the Bylaws, as
amended, of the Registrant provide that: (i) the Registrant is required to
indemnify its directors and officers and persons serving in such capacities in
other business enterprises (including, for example, subsidiaries of the
Registrant) at the Registrant's request, to the fullest extent permitted by
Delaware law, including in those circumstances in which indemnification would
otherwise be discretionary; (ii) the Registrant may, in its discretion,
indemnify employees and agents in those circumstances where indemnification is
not required by law; (iii) the Registrant is required to advance expenses, as
incurred, to its directors and officers in connection with defending a
proceeding (except that it is not required to advance expenses to a person
against whom the Registrant brings a claim for breach of the duty of loyalty,
failure to act in good faith, intentional misconduct, knowing violation of law
or deriving an improper personal benefit); (iv) the rights conferred in the
Bylaws, as amended, are not exclusive, and the Registrant is authorized to enter
into indemnification agreements with its directors, officers and employees; and
(v) the Registrant may not retroactively amend the Bylaw provisions in a way
that is adverse to such directors, officers and employees.
The Registrant's policy is to enter into indemnification agreements with
each of its directors and officers that provide the maximum indemnity allowed to
directors and officers by Section 145 of the Delaware General Corporation Law
and the Bylaws, as amended, as well as certain additional procedural
protections.
The indemnification provisions in the Bylaws, as amended, and the
indemnification agreements entered into between the Registrant and its directors
and officers may be sufficiently broad to permit indemnification of the
Registrant's directors and officers for liabilities arising under the Securities
Act.
II-1
<PAGE> 3
Reference is made to the following documents filed as exhibits to this
Registration Statement regarding relevant indemnification provisions described
above and elsewhere herein:
<TABLE>
<CAPTION>
EXHIBIT
DOCUMENT NUMBER
-------------------------------------------------------------------- ------
<S> <C>
Form of U.S. Underwriting Agreement................................. 1.1
Form of International Underwriting Agreement........................ 1.2
Form of Third Amended and Restated Certificate of Incorporation..... 3.1
Form of Fourth Amended and Restated Certificate of Incorporation to
be effective upon completion of this offering..................... 3.2
Bylaws, as amended.................................................. 3.3
Form of Indemnification Agreement entered into by the Registrant
with each of its directors and executive officers................. 10.1
</TABLE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
The Registrant has recently issued and sold the following securities:
(i) From January 1, 1994 through September 4, 1997 the Registrant issued
and sold 3,944,495 shares of Preferred Stock at purchase prices ranging from
$3.83 to $8.58 for aggregate consideration of approximately $21,290,570;
(ii) From January 1, 1994 through September 4, 1997 the Registrant issued
and sold 586,296 shares of Common Stock to employees and consultants at an
exercise price of $0.10 for aggregate consideration of approximately $59,000;
(iii) From January 1, 1994 through September 4, 1997, the Registrant issued
warrants to purchase up to 784,121 shares of Common Stock at exercise prices
ranging from $5.72 to $14.00 per share in connection with the issuance of a
portion of the Preferred Stock described in (i) above, certain loan arrangements
and the settlement with Gemplus; and
(iv) Concurrently with these offerings, the Registrant will issue and sell
200,000 shares of Common Stock at $9.00 per share.
The issuances referred to in paragraphs (i), (iii) and (iv) were deemed
exempt from registration under the Securities Act in reliance upon Section 4(2)
thereof. The recipients of securities in each such transaction represented their
intentions to acquire the securities for investment only and not with a view to
or for sale in connection with any distribution thereof and appropriate legends
were affixed to the share certificates issued in such transactions. All
recipients had adequate access, through their relationships with the Registrant,
to information about the Registrant. The issuances of Common Stock described in
paragraph (ii) above were deemed exempt from registration under the Securities
Act in reliance upon Rule 701 promulgated under the Securities Act.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- ----------------------------------------------------------------------------
<S> <C>
1.1* Form of U.S. Underwriting Agreement.
1.2* Form of International Underwriting Agreement.
3.1* Third Amended and Restated Certificate of Incorporation of Registrant.
3.2* Form of Fourth Amended and Restated Certificate of Incorporation to be
effective upon completion of this offering.
3.3 Bylaws, as amended, of Registrant.
4.1* Form of Registrant's Common Stock Certificate.
5.1* Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation,
regarding legality of the securities being issued.
9.1* Voting Trust Agreement with Nicholas Efthymiou.
9.2* Voting Trust Agreement with Reiner Pohl.
10.1* Form of Director and Officer Indemnification Agreement.
10.2* 1997 Stock Plan.
10.3* 1997 Employee Stock Purchase Plan.
</TABLE>
II-2
<PAGE> 4
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- ----------------------------------------------------------------------------
<S> <C>
10.4* 1997 Director Option Plan.
10.5* 1997 Stock Option Plan for French Employees.
10.6* 1997 Employee Stock Purchase Plan for Non-U.S. Employees.
10.7* Partnership Agreement, dated June 8, 1995, between Registrant and
Technologie-Beteiligungs-GmbH of Deutsche Ausgleichsbank.
10.8* Continuing Guarantee, dated January 15, 1997, between Registrant and
Imperial Bank.
10.9* Line of Credit, dated October 23, 1996, between Registrant and Deutsche
Bank.
10.10* Line of Credit, dated December 3, 1996, between Registrant and BHF Bank.
10.11* Line of Credit, dated November 11, 1996, between Registrant and
Stadtsparkasse Munchen.
10.12* Lease, dated September 29, 1994, between Registrant and Los Gatos Business
Park.
10.13* Sublease Agreement, dated December 17, 1996, between Intermart Systems, Inc.
and Registrant.
10.14* Lease, dated September 30, 1994, between Registrant and Olbrich Franz.
10.15* Amended and Restated Stockholders' Agreement, dated April 11, 1997, between
Registrant and certain investors.
10.16* Form of Employment Agreement between SCM GmbH and Messrs. Schneider and
Meier.
10.17* Employment Agreement, dated May 15, 1995, between Registrant and Jean-Yves
Le Roux.
10.18*+ Commitment Instrument, dated August 7, 1996, among France Telecom, Matra
Communication, Registrant and Matra MHS.
10.19*+ Teaming Agreement, dated October 6, 1995, between Temic/Matra MHS, Matra
Communication and Registrant.
10.20* Form of amendment to the Partnership Agreement, dated June 8, 1995, between
Registrant and Technologie-Beteiligungs-GmbH of Deutsche Ausgleichsbank and
form of warrant.
10.21*+ Development Agreement, dated March 6, 1997, between Intel Corporation and
Registrant.
10.22*+ Technology Development and License Agreement, dated September 27, 1996,
between Registrant and Sun Microsystems, Inc.
10.23* Cooperation Contract, dated March 25, 1996, between Registrant and Stocko
Metallwarenfabriken Henkels and Sohn GmbH & Co.
10.24*+ Development and Supply Agreement, dated October 9, 1996, between BetaDigital
Gesellschaft fur digitale Fernsehdienste mbH and Registrant.
10.25* Framework Contract, dated December 23, 1996, between Siemens Nixdorf
Informationssysteme AG and Registrant.
10.26* Intentionally omitted.
10.27*+ B-1 License and Know-How Contract, dated September 4, 1996, between Deutsche
Telekom AG and Registrant, as amended.
10.28* Technology Option Agreement, dated January 31, 1997, between Wolfgang Neifer
and Registrant.
10.29*+ Patent License Agreement, dated November 15, 1995, between MIPS Dataline
America, Inc. and Registrant.
10.30+ Development and Supply Agreement, dated May 15, 1997, between Telenor Conax
and Registrant.
10.31*+ Manufacturer's Sales Representative Agreement, dated December 8, 1994,
between Registrant and AGM.
10.32*+ License Agreement, dated September 5, 1997, between the Registrant and
Gemplus.
10.33* Warrant Issuance and Common Stock Agreement, dated September 5, 1997,
between the Registrant and Gemplus.
10.34* Common Stock Purchase Warrant dated September 5, 1997, issued to Gemplus.
10.35* Common Stock Purchase Warrant dated September 5, 1997, issued to Gemplus.
10.36* Waiver and Amendment to Amended and Restated Stockholders' Agreement dated
September 5, 1997.
11.1* Statement of computation of earnings per share.
21.1* Subsidiaries of the Registrant.
23.1* Consent of KPMG Peat Marwick LLP, Independent Certified Public Accountants
</TABLE>
II-3
<PAGE> 5
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- ----------------------------------------------------------------------------
<S> <C>
23.2* Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation
(included in Exhibit 5.1)
24.1* Power of Attorney
27.1* Financial Data Schedule
</TABLE>
- ---------------
* Filed previously.
+ Certain information in these exhibits has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a confidential
treatment request under 17 C.F.R. sec.sec. 200.80(b)(4), 200.83 and 230.46.
(b) FINANCIAL STATEMENT SCHEDULES
Schedule II -- Valuation and Qualifying Accounts
Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable or is shown in the financial
statements or notes thereto.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities
Act, may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the California Corporation Law, the Registrant's
Certificate of Incorporation, as amended, the Registrant's Bylaws, as amended,
the Registrant's indemnification agreements or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act, and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered hereunder, 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 Securities Act and will be governed by
the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act, the
information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a
form of Prospectus filed by the Registrant pursuant to Rule 424(b)(1)
or (4) or 497(h) under the Securities Act shall be deemed to be part of
this Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of Prospectus 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.
II-4
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 3 to the Company's Registration Statement on
Form S-1 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Los Gatos, State of California, on this 3rd day of
October 1997.
SCM MICROSYSTEMS, INC.
By: /s/ STEVEN HUMPHREYS
------------------------------------
Steven Humphreys
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 3 to the Company's Registration Statement has been signed by the following
persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ----------------------------------------------- -------------------------- ----------------
<C> <S> <C>
/s/ STEVEN HUMPHREYS President and Chief October 3, 1997
- ----------------------------------------------- Executive Officer
Steven Humphreys (Principal Executive
Officer) and Director
/s/ JOHN NIEDERMAIER Vice President, Finance October 3, 1997
- ----------------------------------------------- and Chief Financial
John Niedermaier Officer (Principal
Financial and Accounting
Officer)
/s/ ROBERT SCHNEIDER* Chairman of the Board October 3, 1997
- -----------------------------------------------
Robert Schneider
/s/ BERND MEIER* Chief Operations Officer October 3, 1997
- ----------------------------------------------- and Director
Bernd Meier
/s/ FRIEDRICH BORNIKOEL* Director October 3, 1997
- -----------------------------------------------
Friedrich Bornikoel
/s/ BRUCE GRAHAM* Director October 3, 1997
- -----------------------------------------------
Bruce Graham
/s/ RANDALL LUNN* Director October 3, 1997
- -----------------------------------------------
Randall Lunn
/s/ POH CHUAN NG* Director October 3, 1997
- -----------------------------------------------
Poh Chuan Ng
/s/ ANDREW VOUGHT* Director October 3, 1997
- -----------------------------------------------
Andrew Vought
*By: /s/ JOHN NIEDERMAIER
- -----------------------------------------------
John Niedermaier
Attorney-in-Fact
</TABLE>
II-5
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------------------------------------------------------------
<S> <C> <C>
1.1* Form of U.S. Underwriting Agreement
1.2* Form of International Underwriting Agreement
3.1* Third Amended and Restated Certificate of Incorporation of
Registrant
3.2* Form of Fourth Amended and Restated Certificate of Incorporation
to be effective upon completion of this offering
3.3 Bylaws, as amended, of Registrant
4.1* Form of Registrant's Common Stock Certificate
5.1* Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, regarding legality of the securities being issued
9.1* Voting Trust Agreement with Nicholas Efthymiou
9.2* Voting Trust Agreement with Reiner Pohl
10.1* Form of Director and Officer Indemnification Agreement
10.2* 1997 Stock Plan
10.3* 1997 Employee Stock Purchase Plan
10.4* 1997 Director Option Plan
10.5* 1997 Stock Option Plan for French Employees
10.6* 1997 Employee Stock Purchase Plan for Non-U.S. Employees
10.7* Partnership Agreement, dated June 8, 1995, between Registrant and
Technologie-Beteiligungs-GmbH of Deutsche Ausgleichsbank
10.8* Continuing Guarantee, dated January 15, 1997, between Registrant
and Imperial Bank
10.9* Line of Credit, dated October 23, 1996, between Registrant and
Deutsche Bank
10.10* Line of Credit, dated December 3, 1996, between Registrant and
BHF Bank
10.11* Line of Credit, dated November 11, 1996, between Registrant and
Stadtsparkasse Munchen
10.12* Lease, dated September 29, 1994, between Registrant and Los Gatos
Business Park
10.13* Sublease Agreement, dated December 17, 1996, between Intermart
Systems, Inc. and Registrant
10.14* Lease, dated September 30, 1994, between Registrant and Olbrich
Franz
10.15* Amended and Restated Stockholders' Agreement, dated April 11,
1997, between Registrant and certain investors
10.16* Form of Employment Agreement between SCM GmbH and Messrs.
Schneider and Meier
10.17* Employment Agreement, dated May 15, 1995, between Registrant and
Jean-Yves Le Roux
10.18*+ Commitment Instrument, dated August 7, 1996, among France
Telecom, Matra Communication, Registrant and Matra MHS
10.19*+ Teaming Agreement, dated October 6, 1995, between Temic/Matra
MHS, Matra Communication and Registrant
10.20* Form of Amendment to the Partnership Agreement, dated June 8,
1995, between Registrant and Technologie-Beteiligungs-GmbH of
Deutsche Ausgleichsbank and form of Warrant
10.21*+ Development Agreement, dated March 6, 1997, between Intel
Corporation and Registrant
10.22*+ Technology Development and License Agreement, dated September 27,
1996, between Registrant and Sun Microsystems, Inc.
</TABLE>
<PAGE> 8
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------------------------------------------------------------
<S> <C> <C>
10.23* Cooperation Contract, dated March 25, 1996, between Registrant
and Stocko Metallwarenfabriken Henkels and Sohn GmbH & Co.
10.24*+ Development and Supply Agreement, dated October 9, 1996, between
BetaDigital Gesellschaft fur digitale Fernsehdienste mbH and
Registrant
10.25* Framework Contract, dated December 23, 1996, between Siemens
Nixdorf Informationssysteme AG and Registrant
10.26* Intentionally omitted
10.27*+ B-1 License and Know-How Contract, dated September 4, 1996,
between Deutsche Telekom AG and Registrant, as amended
10.28* Technology Option Agreement, dated January 31, 1997, between
Wolfgang Neifer and Registrant
10.29*+ Patent License Agreement, dated November 15, 1995, between MIPS
Dataline America, Inc. and Registrant
10.30+ Development and Supply Agreement, dated May 15, 1997, between
Telenor Conax and Registrant
10.31*+ Manufacturer's Sales Representative Agreement, dated December 8,
1994, between Registrant and AGM
10.32*+ License Agreement, dated September 5, 1997, between the
Registrant and Gemplus
10.33* Warrant Issuance and Common Stock Agreement, dated September 5,
1997, between the Registrant and Gemplus
10.34* Common Stock Purchase Warrant dated September 5, 1997, issued to
Gemplus
10.35* Common Stock Purchase Warrant dated September 5, 1997, issued to
Gemplus
10.36* Waiver and Amendment to Amended and Restated Stockholders'
Agreement dated September 5, 1997
11.1* Statement of computation of earnings per share
21.1* Subsidiaries of the Registrant
23.1* Consent of KPMG Peat Marwick LLP, Independent Certified Public
Accountants
23.2* Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1)
24.1* Power of Attorney
27.1* Financial Data Schedule
</TABLE>
- ---------------
* Filed previously.
+ Certain information in these exhibits has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a confidential
treatment request under 17 C.F.R. sec.sec. 200.80(b)(4), 200.83 and 230.46.
<PAGE> 1
EXHIBIT 3.3
CERTIFICATE OF AMENDMENT OF BYLAWS
OF
SCM MICROSYSTEMS, INC.
The undersigned, being Secretary of SCM Microsystems, Inc. (the
"Company"), hereby certifies that the Board of Directors of the Company
approved the following amendments to the Bylaws of the Company, effective June
10, 1997:
1. That the fourth sentence of Article I, Section 1.7 was amended to read
as follows:
"Upon the effectiveness of the Company's initial public offering, a
stockholder proposal to be presented at an annual meeting shall be received
at the Corporation's principal executive offices not less than 30 calendar
days nor more than 90 calendar days in advance of the date that the
Corporation's (or the Corporation's predecessors) proxy statement was
released to stockholders in connection with the previous year's annual
meeting of stockholders, except that if no annual meeting was held in the
previous year or the date of the annual meeting has been changed by more
than 30 calendar days from the date contemplated at the time of the
previous year's proxy statement, or in the event of a special meeting,
notice by the stockholder to be timely must be received not later than the
close of business on the tenth day following the day on which such notice
of the date of the meeting was mailed or such public disclosure was made."
2. That the third sentence of Article II, Section 2.11 was amended to
read as follows:
"Upon the effectiveness of the Company's initial public offering, a
stockholder nomination for director to be elected at an annual meeting
shall be received at the Corporation's principal executive officers not
less than 30 calendar days nor more than 90 calendar days in advance of the
date that the Corporation's (or the Corporation's predecessors) proxy
statement was released to stockholders in connection with the previous
year's annual meeting of stockholders, except that if no annual meeting was
held in the previous year or the date of the annual meeting has been
changed by more than 30 calendar days from the date contemplated at the
time of the previous year's proxy statement, or in the event of a special
meeting, notice by the stockholder to be timely must be received not later
than the close of business on the tenth day following the day on which such
notice of the date of the meeting was mailed or such public disclosure was
made."
3. That the first sentence of Article II, Section 2.3 was amended to
strike "or without" from the sentence.
Dated: June 10, 1997
/s/ John G. Niedermaier
-------------------------------------
John G. Niedermaier, Secretary
<PAGE> 2
SCM Microsystems, Inc.
A DELAWARE CORPORATION
BY-LAWS
ARTICLE I
STOCKHOLDERS
Section 1.1 Annual Meeting. An annual meeting of the stockholders, for
the election of directors to succeed those whose terms expire and for the
transaction of such other business as may properly come before the meeting,
shall be held at such place, on such date, and at such time as the Board of
Directors shall each year fix, which date shall be within thirteen months
subsequent to the later of the date of incorporation or the last annual meeting
of stockholders.
Section 1.2 Special Meetings. Special meetings of the stockholders, for
any purpose or purposes prescribed in the notice of the meeting, may be called
only (i) by the Board of Directors pursuant to a resolution adopted by a
majority of the total number of authorized directors (whether or not there exist
any vacancies in previously authorized directorships at the time any such
resolution is presented to the Board of Directors for adoption) or (ii) by the
holders of not less than 10% of all shares entitled to cast votes at the
meeting, voting together as a single class and shall be held at such place, on
such date, and at such time as they shall fix. Business transacted at special
meetings shall be confined to the purpose or purposes stated in the notice.
Section 1.3 Notice of Meetings. Written notice of the place, date, and
time of all meetings of the stockholders shall be given, not less than ten (10)
nor more than sixty (60) days before the date on which the meeting is to be
held, to each stockholder entitled to vote at such meeting, except as otherwise
provided herein or required by law (meaning, here and hereinafter, as required
from time to time by the Delaware General Corporation Law or the Certificate of
Incorporation of the Corporation).
When a meeting is adjourned to another place, date or time, written
notice need not be given of the adjourned meeting if the place, date and time
thereof are announced at the meeting at which the adjournment is taken;
provided, however, that if the date of any adjourned meeting is more than thirty
(30) days after the date for which the meeting was originally noticed, or if a
new record date is fixed for the adjourned meeting, written notice of the place,
date, and time of the adjourned meeting shall be given in conformity herewith.
At any adjourned meeting, any business may be transacted which might have been
transacted at the original meeting.
Section 1.4 Quorum. At any meeting of the stockholders, the holders
of a majority of all of the shares of the stock entitled to vote at the meeting,
present in person or by proxy, shall
<PAGE> 3
constitute a quorum for all purposes, unless or except to the extent that the
presence of a larger number may be required by law.
If a quorum shall fail to attend any meeting, the chairman of the
meeting or the holders of a majority of the shares of stock entitled to vote who
are present, in person or by proxy, may adjourn the meeting to another place,
date, or time.
If a notice of any adjourned special meeting of stockholders is sent to
all stockholders entitled to vote thereat, stating that it will be held with
those present constituting a quorum, then except as otherwise required by law,
those present at such adjourned meeting shall constitute a quorum, and all
matters shall be determined by a majority of the votes cast at such meeting.
Section 1.5 Conduct of the Stockholders' Meeting. At every meeting of
the stockholders, the Chairman, if there is such an officer, or if not, the
President of the Corporation, or in his absence the Vice President designated by
the President, or in the absence of such designation any Vice President, or in
the absence of the President or any Vice President, a chairman chosen by the
majority of the voting shares represented in person or by proxy, shall act as
Chairman. The Secretary of the Corporation or a person designated by the
Chairman shall act as Secretary of the meeting. Unless otherwise approved by the
Chairman, attendance at the stockholders' meeting is restricted to stockholders
of record, persons authorized in accordance with Section 8 of these Bylaws to
act by proxy, and officers of the Corporation.
Section 1.6 Conduct of Business. The Chairman shall call the meeting to
order, establish the agenda, and conduct the business of the meeting in
accordance therewith or, at the Chairman's discretion, it may be conducted
otherwise in accordance with the wishes of the stockholders in attendance. The
date and time of the opening and closing of the polls for each matter upon which
the stockholders will vote at the meeting shall be announced at the meeting.
The Chairman shall also conduct the meeting in an orderly manner, rule
on the precedence of and procedure on, motions and other procedural matters, and
exercise discretion with respect to such procedural matters with fairness and
good faith toward all those entitled to take part. The Chairman may impose
reasonable limits on the amount of time taken up at the meeting on discussion in
general or on remarks by any one stockholder. Should any person in attendance
become unruly or obstruct the meeting proceedings, the Chairman shall have the
power to have such person removed from participation. Notwithstanding anything
in the Bylaws to the contrary, no business shall be conducted at a meeting
except in accordance with the procedures set forth in this Section 1.6 and
Section 1.7, below. The Chairman of a meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting and in accordance with the provisions of this Section 1.6 and
Section 1.7, and if he should so determine, he shall so declare to the meeting
and any such business not properly brought before the meeting shall not be
transacted.
Section 1.7 Notice of Stockholder Business. At an annual or special
meeting of the stockholders, only such business shall be conducted as shall have
been properly brought before the meeting. To be properly brought before a
meeting, business must be (a) specified in the notice of
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meeting (or any supplement thereto) given by or at the direction of the Board of
Directors, (b) properly brought before the meeting by or at the direction of the
Board of Directors, (c) properly brought before an annual meeting by a
stockholder, or (d) properly brought before a special meeting by a stockholder,
but if, and only if, the notice of a special meeting provides for business to be
brought before the meeting by stockholders. For business to be properly brought
before a meeting by a stockholder, the stockholder must have given timely notice
thereof in writing to the Secretary of the Corporation. To be timely, a
stockholder proposal to be presented at an annual meeting shall be received at
the Corporation's principal executive offices not less than 120 calendar days in
advance of the date that the Corporation's (or the Corporation's predecessors)
proxy statement was released to stockholders in connection with the previous
year's annual meeting of stockholders, except that if no annual meeting was held
in the previous year or the date of the annual meeting has been changed by more
than 30 calendar days from the date contemplated at the time of the previous
year's proxy statement, or in the event of a special meeting, notice by the
stockholder to be timely must be received not later than the close of business
on the tenth day following the day on which such notice of the date of the
meeting was mailed or such public disclosure was made. A stockholder's notice to
the Secretary shall set forth as to each matter the stockholder proposes to
bring before the annual or special meeting (a) a brief description of the
business desired to be brought before the annual or special meeting and the
reasons for conducting such business at the special meeting, (b) the name and
address, as they appear on the Corporation's books, of the stockholder proposing
such business, (c) the class and number of shares of the Corporation which are
beneficially owned by the stockholder, and (d) any material interest of the
stockholder in such business.
Section 1.8 Proxies and Voting. At any meeting of the stockholders,
every stockholder entitled to vote may vote in person or by proxy authorized by
an instrument in writing or by a transmission permitted by law filed in
accordance with the procedure established for the meeting. No stockholder may
authorize more than one proxy for his shares.
Each stockholder shall have one vote for every share of stock entitled
to vote which is registered in his or her name on the record date for the
meeting, except as otherwise provided herein or required by law.
All voting, including on the election of directors but excepting where
otherwise required by law, may be by a voice vote; provided, however, that upon
demand therefor by a stockholder entitled to vote or his or her proxy, a stock
vote shall be taken. Every stock vote shall be taken by ballots, each of which
shall state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
Every vote taken by ballots shall be counted by an inspector or inspectors
appointed by the chairman of the meeting.
All elections shall be determined by a plurality of the votes cast, and
except as otherwise required by law, all other matters shall be determined by a
majority of the votes cast.
Section 1.9 Stock List. A complete list of stockholders entitled to vote
at any meeting of stockholders, arranged in alphabetical order for each class of
stock and showing the address of each such stockholder and the number of shares
registered in his or her name, shall be open to the
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examination of any such stockholder, for any purpose germane to the meeting,
during ordinary business hours for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or if not so
specified, at the place where the meeting is to be held.
The stock list shall also be kept at the place of the meeting during the
whole time thereof and shall be open to the examination of any such stockholder
who is present This list shall presumptively determine the identity of the
stockholders entitled to vote at the meeting and the number of shares held by
each of them.
ARTICLE II
BOARD OF DIRECTORS
Section 2.1 Number and Term of Office. The number of directors shall
initially be nine (9) and, thereafter, shall be fixed from time to time
exclusively by the Board of Directors pursuant to a resolution adopted by a
majority of the total number of authorized directors (whether or not there exist
any vacancies in previously authorized directorships at the time any such
resolution is presented to the Board for adoption). A vacancy resulting from the
removal of a director by the stockholders as provided in Article II, Section 2.3
below may be filled at special meeting of the stockholders held for that
purpose. All directors shall hold office until the expiration of the term for
which elected and until their respective successors are elected, except in the
case of the death, resignation or removal of any director.
Section 2.2 Vacancies and Newly Created Directorships. Subject to the
rights of the holders of any series of Preferred Stock then outstanding, newly
created directorships resulting from any increase in the authorized number of
directors or any vacancies in the Board of Directors resulting from death,
resignation, retirement, disqualification or other cause (other than removal
from office by a vote of the stockholders) may be filled only by a majority vote
of the directors then in office, though less than a quorum, and directors so
chosen shall hold office for a term expiring at the next annual meeting of
stockholders at which the term of office of the class to which they have been
elected expires. No decrease in the number of directors constituting the Board
of Directors shall shorten the term of any incumbent director.
Section 2.3 Removal. Subject to the rights of holders of any series of
Preferred Stock then outstanding, any directors, or the entire Board of
Directors, may be removed from office at any time, with or without cause, but
only by the affirmative vote of the holders of at least a majority of the voting
power of all of the then outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors, voting together as a
single class. Vacancies in the Board of Directors resulting from such removal
may be filled by a majority of the directors then in office, though less than a
quorum, or by the stockholders as provided in Article II, Section 2.1 above.
Directors so chosen shall hold office until the new annual meeting of
stockholders.
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Section 2.4 Regular Meetings. Regular meetings of the Board of Directors
shall be held at such place or places, on such date or dates, and at such time
or times as shall have been established. by the Board of Directors and
publicized among all directors. A notice of each regular meeting shall not be
required.
Section 2.5 Special Meetings. Special meetings of the Board of Directors
may be called by one-third of the directors then in office (rounded up to the
nearest whole number) or by the chief executive officer and shall be held at
such place, on such date, and at such time as they or he or she shall fix.
Notice of the place, date, and time of each such special meeting shall be given
each director by whom it is not waived by mailing written notice not fewer than
five (5) days before the meeting or by telegraphing or personally delivering the
same not fewer than twenty-four (24) hours before the meeting. Unless otherwise
indicated in the notice thereof, any and all business may be transacted at a
special meeting.
Section 2.6 Quorum. At any meeting of the Board of Directors, a majority
of the total number of authorized directors shall constitute a quorum for all
purposes. If a quorum shall fail to attend any meeting, a majority of those
present may adjourn the meeting to another place, date, or time, without further
notice or waiver thereof .
Section 2.7 Participation in Meetings by Conference Telephone. Members
of the Board of Directors, or of any committee thereof, may participate in a
meeting of such Board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other and such participation shall constitute presence in
person at such meeting.
Section 2.8 Conduct of Business. At any meeting of the Board of
Directors, business shall be transacted in such order and manner as the Board
may from time to time determine, and all matters shall be determined by the vote
of a majority of the directors present, except as otherwise provided herein or
requited by law. Action may be taken by the Board of Directors without a meeting
if all members thereof consent thereto in writing, and the writing or writings
are filed with the minutes of proceedings of the Board of Directors.
Section 2.9 Powers. The Board of Directors may, except as otherwise
required by law, exercise all such powers and do all such acts and things as may
be exercised or done by the Corporation, including, without limiting the
generality of the foregoing, the unqualified power:
(1) To declare dividends from time to time in accordance with
law;
(2) To purchase or otherwise acquire any property, rights or
privileges on such terms as it shall determine;
(3) To authorize the creation, mailing and issuance, in such
form as it may determine, of written obligations of every kind, negotiable or
non-negotiable, secured or unsecured, and to do all things necessary in
connection therewith;
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(4) To remove any officer of the Corporation with or without
cause, and from time to time to devolve the powers and duties of any officer
upon any other person for the time being;
(5) To confer upon any officer of the Corporation the power to
appoint, remove and suspend subordinate officers, employees and agents;
(6) To adopt from time to time such stock, option, stock
purchase, bonus or other compensation plans for directors, officers, employees
and agents of the Corporation and its subsidiaries as it may determine;
(7) To adopt from time to time such insurance, retirement, and
other benefit plans for directors, officers, employees and agents of the
Corporation and its subsidiaries as it may determine; and
(8) To adopt from time to time regulations, not inconsistent with
these bylaws, for the management of the Corporation's business and affairs.
Section 2.10 Compensation of Directors. Directors, as such, may receive,
pursuant to resolution of the Board of Directors, fixed fees and other
compensation for their services as directors, including, without limitation,
their services as members of committees of the Board of Directors.
Section 2.11 Nomination of Director Candidates. Subject to the rights of
holders of any class or series of Preferred Stock then outstanding, nominations
for the election of Directors may be made by the Board of Directors or a proxy
committee appointed by the Board of Directors or by any stockholder entitled to
vote in the election of Directors generally. However, any stockholder entitled
to vote in the election of Directors generally may nominate one or more persons
for election as Directors at a meeting only if timely notice of such
stockholder's intent to make such nomination or nominations has been given in
writing to the Secretary of the Corporation. To be timely, a stockholder
nomination for a director to be elected at an annual meeting shall be received
at the Corporation's principal executive offices not less than 120 calendar days
in advance of the date that the Corporation's Proxy statement was released to
stockholders in connection with the previous year's annual meeting of
stockholders, except that if no annual meeting was held in the previous year or
the date of the annual meeting has been changed by more than 30 calendar days
from the date contemplated at the time of the previous year's proxy statement,
or in the event of a nomination for director to be elected at a special meeting,
notice by the stockholders to be timely must be received not later than the
close of business on the tenth day following the day on which such notice of the
date of the special meeting was mailed or such public disclosure was made. Each
such notice shall set forth: (a) the name and address of the stockholder who
intends to make the nomination and of the person or persons to be nominated; (b)
a representation that the stockholder is a holder of record of stock of the
Corporation entitled to vote for the election of Directors on the date of such
notice and intends to appear in person or by proxy at the meeting to nominate
the person or persons specified in the notice; (c) a description of all
arrangements or understandings between the stockholder and each nominee and any
other person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the stockholder; (d) such other
information regarding
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each nominee proposed by such stockholder as would be required to be included in
a proxy statement filed pursuant to the proxy rules of the Securities and
Exchange Commission, had the nominee been nominated, or intended to be
nominated, by the Board of Directors; and (e) the consent of each nominee to
serve as a director of the Corporation if so elected.
In the event that a person is validly designated as a nominee in
accordance with this Section 2.11 and shall thereafter become unable or
unwilling to stand for election to the Board of Directors, the Board of
Directors or the stockholder who proposed such nominee, as the case may be, may
designate a substitute nominee upon delivery, not fewer than five days prior to
the date of the meeting for the election of such nominee, of a written notice to
the Secretary setting forth such information regarding such substitute nominee
as would have been required to be delivered to the Secretary pursuant to this
Section 2.11 had such substitute nominee been initially proposed as a nominee.
Such notice shall include a signed consent to serve as a director of the
Corporation, if elected, of each such substitute nominee.
If the chairman of the meeting for the election of Directors determines
that a nomination of any candidate for election as a Director at such meeting
was not made in accordance with the applicable provisions of this Section 2.1 1,
such nomination shall be void.
ARTICLE III
COMMITTEES
Section 3.1 Committees of the Board of Directors. The Board of
Directors, by a vote of a majority of the whole Board, may from time to time
designate committees of the Board, with such lawfully delegable powers and
duties as it thereby confers, to serve at the pleasure of the Board and shall,
for those committees and any others provided for herein, elect a director or
directors to serve as the member or members, designating, if it desires, other
directors as alternate members who may replace any absent or disqualified member
at any meeting of the committee. Any committee so designated may exercise the
power and authority of the Board of Directors to declare a dividend, to
authorize the issuance of stock or to adopt a certificate of ownership and
merger pursuant to Section 253 of the Delaware General Corporation Law if the
resolution which designates the committee or a supplemental resolution of the
Board of Directors shall so provide. In the absence or disqualification of any
member of any committee and any alternate member in his place, the member or
members of the committee present at the meeting and not disqualified from
voting, whether or not he or she or they constitute a quorum, may by unanimous
vote appoint another member of the Board of Directors to act at the meeting in
the place of the absent or disqualified member.
Section 3.2 Conduct of Business. Each committee may determine the
procedural rules for meeting and conducting its business and shall act in
accordance therewith, except as otherwise provided herein or required by law.
Adequate provision shall be made for notice to members of all meetings;
one-third of the authorized members shall constitute a quorum unless the
committee shall consist of one or two members, in which event one member shall
constitute a quorum; and all matters shall be determined by a majority vote of
the members present. Action may be taken by any
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committee without a meeting if all members thereof consent thereto in writing,
and the writing or writings are filed with the minutes of the proceedings of
such committee.
ARTICLE IV
OFFICERS
Section 4.1 Generally. The officers of the Corporation shall consist of
a President, a Chief Executive Officer, a Chief Operating Officer, one or more
Vice Presidents, a Secretary and a Treasurer. The Corporation may also have, at
the discretion of the Board of Directors, a Chairman of the Board and such other
officers as may from time to time be appointed by the Board of Directors.
Officers shall be elected by the Board of Directors, which shall consider that
subject at its first meeting after every annual meeting of stockholders. Each
officer shall hold office until his or her successor is elected and qualified or
until his or her earlier resignation or removal. The Chairman of the Board, if
there shall be such an officer, and the President shall each be members of the
Board of Directors. Any number of offices may be held by the same person.
Section 4.2 Chairman of the Board. The Chairman of the Board, if there
shall be such an officer, shall, if present, preside at all meetings of the
Board of Directors, and exercise and perform such other powers and duties as may
be from time to time assigned to him by the Board of Directors or prescribed by
these bylaws.
Section 4.3 President. Subject to the provisions of these bylaws and to
the direction of the Board of Directors, the President shall have, in
coordination with the Chief Executive Officer and the Chief Operating Officer,
the responsibility for the general management and control of the business and
affairs of the Corporation, and shall perform all duties and have all powers
which are commonly incident to the office of chief executive or which are
delegated to him or her by the Board of Directors. He or she shall have power to
sign all stock certificates, contracts and other instruments of the Corporation
which are authorized and shall have general supervision and direction of all of
the other officers (except for the Chief Executive Officer and Chief Operating
Officer), employees and agents of the Corporation.
Section 4.4 Chief Executive Officer. Subject to the provisions of these
bylaws and to the direction of the Board of Directors, the Chief Executive
Officer shall have, in coordination with the President and the Chief Operating
Officer, the responsibility for the general management and control of the
business and affairs of the Corporation, and shall perform all duties and have
all powers which are commonly incident to the office of chief executive or which
are delegated to him or her by the Board of Directors. He or she shall have
power to sign all stock certificates, contracts and other instruments of the
Corporation which are authorized and shall have general supervision and
direction of all of the other officers (except for the President and Chief
Operating Officer), employees and agents of the Corporation.
Section 4.5 Chief Operating Officer. Subject to the provisions of
these bylaws and to the direction of the Board of Directors, the Chief Operating
Officer shall have, in coordination with the
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Chief Executive Officer and the President, the responsibility for the general
management and control of the business and affairs of the Corporation, and shall
perform all duties and have all powers which are commonly incident to the office
of chief executive or which are delegated to him or her by the Board of
Directors. He or she shall have power to sign all stock certificates, contracts
and other instruments of the Corporation which are authorized and shall have
general supervision and direction of all of the other officers (except for the
Chief Executive Officer and President), employees and agents of the Corporation.
Section 4.6 Vice President. Each Vice President shall have such powers
and duties as may be delegated to him or her by the Board of Directors. One Vice
President shall be designated by the Board to perform the duties and exercise
the powers of the President in the event of the President's absence or
disability.
Section 4.7 Treasurer. Unless otherwise designated by the Board of
Directors, the Chief Financial Officer of the Corporation shall be the
Treasurer. The Treasurer shall have the responsibility for maintaining the
financial records of the Corporation and shall have custody of all monies and
securities of the Corporation. He or she shall make such disbursements of the
funds of the Corporation as are authorized and shall render from time to time an
account of all such transactions and of the financial condition of the
Corporation. The Treasurer shall also perform such other duties as the Board of
Directors may from time to time prescribe.
Section 4.8 Secretary. Secretary shall issue all authorized notices for,
and shall keep, or cause to be kept, minutes of all meetings of the
stockholders, the Board of Directors, and all committees of the Board of
Directors. He or she shall have charge of the corporate books and shall perform
such other duties as the Board of Directors may from time to time prescribe.
Section 4.9 Delegation of Authority. The Board of Directors may from
time to time delegate the powers or duties of any officer to any other officers
or agents, notwithstanding any provision hereof.
Section 4.10 Removal. Any officer of the Corporation may be removed at
any time, with or without cause, by the Board of Directors.
Section 4.11 Action With Respect to Securities of Other Corporations.
Unless otherwise directed by the Board of Directors, the President or any
officer of the Corporation authorized by the President shall have power to vote
and otherwise act on behalf of the Corporation, in person or by proxy, at any
meeting of stockholders of or with respect to any action of stockholders of any
other corporation in which this Corporation may hold securities and otherwise to
exercise any and all rights and powers which this Corporation may possess by
reason of its ownership of securities in such other corporation.
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ARTICLE V
STOCK
Section 5.1 Certificates of Stock. Each stockholder shall be entitled to
a certificate signed by, or in the name of the Corporation by, the President or
a Vice President, and by the Secretary or an Assistant Secretary, or the
Treasurer or an Assistant Treasurer, certifying the number of shares owned by
him or her. Any of or all the signatures on the certificate may be facsimile.
Section 5.2 Transfers of Stock. Transfers of stock shall be made only
upon the transfer books of the Corporation kept at an office of the Corporation
or by transfer agents designated to transfer shares of the stock of the
Corporation. Except where a certificate is issued in accordance with Section 5.4
of these bylaws, an outstanding certificate for the number of shares involved
shall be surrendered for cancellation before a new certificate is issued
therefor.
Section 5.3 Record Date. The Board of Directors may fix a record date,
which shall not be more than sixty (60) nor fewer than ten (10) days before the
date of any meeting of stockholders, nor more than sixty (60) days prior to the
time for the other action hereinafter described, as of which there shall be
determined the stockholders who are entitled: to notice of or to vote at any
meeting of stockholders or any adjournment thereof; to receive payment of any
dividend or other distribution or allotment of any rights; or to exercise any
rights with respect to any change, conversion or exchange of stock or with
respect to any other lawful action.
Section 5.4 Lost, Stolen or Destroyed Certificates. In the event of the
loss, theft or destruction of any certificate of stock, another may be issued in
its place pursuant to such regulations as the Board of Directors may establish
concerning proof of such loss, theft or destruction and concerning the giving of
a satisfactory bond or bonds of indemnity.
Section 5.5 Regulations. The issue, transfer, conversion and
registration of certificates of stock shall be governed by such other
regulations as the Board of Directors may establish.
ARTICLE VI
NOTICES
Section 6.1 Notices. Except as otherwise specifically provided herein or
required by law, all notices required to be given to any stockholder, director,
officer, employee or agent shall be in writing and may in every instance be
effectively given by hand delivery to the recipient thereof, by depositing such
notice in the mails, postage paid, or by sending such notice by prepaid
telegram, mailgram, telecopy or commercial courier service. Any such notice
shall be addressed to such stockholder, director, officer, employee or agent at
his or her last known address as the same appears on the books of the
Corporation. The time when such notice shall be deemed to be given shall be the
time such notice is received by such stockholder, director, officer, employee or
agent, or by any
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person accepting such notice on behalf of such person, if hand delivered, or the
time such notice is dispatched, if delivered through the mails or be telegram or
mailgram.
Section 6.2 Waivers. A written waiver of any notice, signed by a
stockholder, director, officer, employee or agent, whether before or after the
time of the event for which notice is to be given, shall be deemed equivalent to
the notice required to be given to such stockholder, director, officer, employee
or agent. Neither the business nor the purpose of any meeting need be specified
in such a waiver.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Facsimile Signatures. In addition to the provisions for use
of facsimile signatures elsewhere specifically authorized in these bylaws,
facsimile signatures of any officer or officers of the Corporation may be used
whenever and as authorized by the Board of Directors or a committee thereof.
Section 7.2 Corporate Seal. The Board of Directors may provide a
suitable seal, containing the name of the Corporation, which seal shall be in
the charge of the Secretary. If and when so directed by the Board of Directors
or a committee thereof, duplicates of the seal may be kept and used by the
Treasurer or by an Assistant Secretary or Assistant Treasurer.
Section 7.3 Reliance Upon Books, Reports and Records. Each director,
each member of any committee designated by the Board of Directors, and each
officer of the Corporation shall, in the performance of his duties, be fully
protected in relying in good faith upon the books of account or other records of
the Corporation, including reports made to the Corporation by any of its
officers, by an independent certified public accountant, or by an appraiser
selected with reasonable care.
Section 7.4 Fiscal Year. The fiscal year of the Corporation shall be
as fixed by the Board of Directors.
Section 7.5 Time Periods. In applying any provision of these bylaws
which require that an act be done or not done a specified number of days prior
to an event or that an act be done during a period of a specified number of days
prior to an event, calendar days shall be used, the day of the doing of the act
shall be excluded, and the day of the event shall be included.
ARTICLE VIII
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 8.1 Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative
("proceeding"), by reason of the fact that he or she or a
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person of whom he or she is the legal representative, is or was a director,
officer or employee of the Corporation or is or was serving at the request of
the Corporation as a director, officer or employee of another corporation, or of
a Partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a director, officer or employee or in
any other capacity while serving as a director, officer or employee, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by Delaware Law, as the same exists or may hereafter be amended (but,
in the case of any such amendment, only to the extent that such amendment
permits the Corporation to provide broader indemnification rights than said Law
permitted the Corporation to provide prior to such amendment) against all
expenses, liability and loss (including attorneys' fees, judgments, fines, ERISA
excise taxes or penalties, amounts paid or to be paid in settlement and amounts
expended in seeking indemnifi cation granted to such person under applicable
law, this bylaw or any agreement with the Corpora tion) reasonably incurred or
suffered by such person in connection therewith and such indemnification shall
continue as to a person who has ceased to be a director, officer or employee and
shall inure to the benefit of his or her heirs, executors and administrators;
provided, however, that, except as provided in Section 8.2 of this Article VII,
the Corporation shall indemnify any such person seeking indemnity in connection
with an action, suit or proceeding (or part thereof) initiated by such person
only if (a) such indemnification is expressly required to be made by law, (b)
the action, suit or pro ceeding (or part thereof) was authorized by the Board of
Directors of the Corporation, (c) such indemnification is provided by the
Corporation, in its sole discretion, pursuant to the powers vested in the
Corporation under the Delaware General Corporation Law, or (d) the action, suit
or proceeding (or part thereof) is brought to establish or enforce a right to
indemnification under an indemnity agreement or any other statute or law or
otherwise as required under Section 145 of the Delaware General Corporation Law.
Such right shall be a contract right and shall include the right to be paid by
the Corporation expenses incurred in defending any such proceeding in advance of
its final disposi tion; provided, however, that, unless the Delaware General
Corporation Law then so prohibits, the payment of such expenses incurred by a
director or officer of the Corporation in his or her capacity as a director or
officer (and not in any other capacity in which service was or is tendered by
such person while a director or officer, including, without limitation. service
to an employee benefit plan) in advance of the final disposition of such
proceeding, shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such director or officer, to repay an amounts so
advanced if it should be determined ultimately that such director or officer is
not entitled to be indemnified under this Section or otherwise.
Section 8.2 Right of Claimant to Bring Suit. If a claim under Section 1
of this Article VII is not paid in full by the Corporation within ninety (90)
days after a written claim has been received by the Corporation, the claimant
may at any time thereafter bring suit against the Corporation to recover the
unpaid amount of the claim and, if such suit is not frivolous or brought in bad
faith, the claimant shall be entitled to be paid also the expense of prosecuting
such claim. The burden of proving such claim shall be on the claimant. It shall
be a defense to any such action (other then an action brought to enforce a claim
for expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any, has been tendered to this
Corporation) that the claimant has not met the standards of conduct which make
it permissible under the Delaware General Corporation Law for the Corporation to
indemnify the claimant for the amount claimed. Neither the
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<PAGE> 14
failure of the Corporation (including its Board of Directors, independent legal
counsel, or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he or she has met the applicable standard of conduct
set forth in the Delaware General Corporation Law, nor an actual determination
by the Corporation (including its Board of Directors, independent legal counsel
or its stockholders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that claimant
has not met the applicable standard of conduct.
Section 8.3 Non-Exclusivity of Rights. The rights conferred on any
person in Sections 1 and 2 of this Article VII shall not be exclusive of any
other right which such persons may have or hereafter acquire under any statute,
provision of the Certificate of Incorporation, bylaw, agreement, vote of
stockholders or disinterested directors or otherwise.
Section 8.4 Indemnification Contracts. The Board of Directors is
authorized to enter into a contract with any director, officer, employee or
agent of the Corporation, or any person serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, including employee
benefit plans, providing for indemnification rights equivalent to or, if the
Board of Directors so determines, greater than, those provided for in this
Article VII.
Section 8.5 Insurance. The Corporation shall maintain insurance to the
extent reasonably available, at its expense, to protect itself and any such
director, officer, employee or agent of the Corporation or another corporation,
partnership, joint venture, trust or other enterprise against any such expense,
liability or loss, whether or not the Corporation would have the power to
indemnify such person against such expense, liability or loss under the Delaware
General Corporation Law.
Section 8.6 Effect of Amendment. Any amendment, repeal or modification
of any provision of this Article VII by the stockholders or the directors of the
Corporation shall not adversely affect any right or protection of a director or
officer of the Corporation existing at the time of such amendment, repeal or
modification.
ARTICLE IX
AMENDMENT
Section 9.1 Amendment of Bylaws. The Board of Directors is expressly
empowered to adopt, amend or repeal Bylaws of the Corporation. Any adoption,
amendment or repeal of Bylaws of the Corporation by the Board of Directors shall
require the approval of a majority of the total number of authorized directors
(whether or not there exist any vacancies in previously authorized directorships
at the time any resolution providing for adoption, amendment or repeal is
presented to the Board). The stockholders shall also have power to adopt, amend
or repeal the Bylaws of the Corporation. Any adoption, amendment or repeal of
Bylaws of the Corporation by the stockholders shall require, in addition to any
vote of the holders of any class or series of stock of the Corporation required
by law or by this Certificate of Incorporation, the affirmative vote of the
holders of at least
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<PAGE> 15
sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the
then outstanding shares of the capital stock of the Corporation entitled to vote
generally in the election of directors, voting together as a single class.
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<PAGE> 16
BY-LAWS
OF
SCM MICROSYSTEMS, INC.
-15-
<PAGE> 17
<TABLE>
<CAPTION>
INDEX
SECTION PAGE
ARTICLE I
STOCKHOLDERS
<S> <C> <C>
Section 1.1 Annual Meeting.............................................................1
Section 1.2 Special Meetings...........................................................1
Section 1.3 Notice of Meetings.........................................................1
Section 1.4 Quorum.....................................................................1
Section 1.5 Conduct of the Stockholders' Meeting.......................................2
Section 1.6 Conduct of Business........................................................2
Section 1.7 Notice of Stockholder Business.............................................2
Section 1.8 Proxies and Voting.........................................................3
Section 1.9 Stock List.................................................................3
ARTICLE II
BOARD OF DIRECTORS
Section 2.1 Number and Term of Office..................................................4
Section 2.2 Vacancies and Newly Created Directorships..................................4
Section 2.3 Removal....................................................................4
Section 2.4 Regular Meetings...........................................................5
Section 2.5 Special Meetings...........................................................5
Section 2.6 Quorum.....................................................................5
Section 2.7 Participation in Meetings by Conference Telephone..........................5
Section 2.8 Conduct of Business........................................................5
Section 2.9 Powers.....................................................................5
Section 2.10 Compensation of Directors..................................................6
Section 2.11 Nomination of Director Candidates..........................................6
ARTICLE III
COMMITTEES
Section 3.1 Committees of the Board of Directors.......................................7
Section 3.2 Conduct of Business........................................................7
ARTICLE IV
OFFICERS
Section 4.1 Generally..................................................................8
Section 4.2 Chairman of the Board......................................................8
Section 4.3 President..................................................................8
Section 4.4 Chief Executive Officer....................................................8
Section 4.5 Chief Operating Officer....................................................8
Section 4.6 Vice President.............................................................9
</TABLE>
-i-
<PAGE> 18
<TABLE>
<CAPTION>
INDEX
SECTION PAGE
<S> <C> <C>
Section 4.7 Treasurer..................................................................9
Section 4.8 Secretary..................................................................9
Section 4.9 Delegation of Authority....................................................9
Section 4.10 Removal....................................................................9
Section 4.11 Action With Respect to Securities of Other Corporations....................9
ARTICLE V
STOCK
Section 5.1 Certificates of Stock.....................................................10
Section 5.2 Transfers of Stock........................................................10
Section 5.3 Record Date...............................................................10
Section 5.4 Lost, Stolen or Destroyed Certificates....................................10
Section 5.5 Regulations...............................................................10
ARTICLE VI
NOTICES
Section 6.1 Notices...................................................................10
Section 6.2 Waivers...................................................................11
ARTICLE VII
MISCELLANEOUS
Section 7.1 Facsimile Signatures......................................................11
Section 7.2 Corporate Seal............................................................11
Section 7.3 Reliance Upon Books, Reports and Records..................................11
Section 7.4 Fiscal Year...............................................................11
Section 7.5 Time Periods..............................................................11
ARTICLE VIII
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 8.1 Right to Indemnification..................................................11
Section 8.2 Right of Claimant to Bring Suit...........................................12
Section 8.3 Non-Exclusivity of Rights.................................................13
Section 8.4 Indemnification Contracts.................................................13
Section 8.5 Insurance.................................................................13
Section 8.6 Effect of Amendment.......................................................13
</TABLE>
-ii-
<PAGE> 19
<TABLE>
<CAPTION>
INDEX
SECTION PAGE
ARTICLE IX
AMENDMENT
<S> <C> <C>
Section 9.1 Amendment of Bylaws.......................................................13
</TABLE>
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<PAGE> 1
EXHIBIT 10.30
DEVELOPMENT AND SUPPLY AGREEMENT
between
SCM Microsystems GmbH
Luitpoldstra e 6
D-85276 Pfaffenhofen
- - hereinafter "SCM"
and
TELENOR Conax
Fred, Olsensgt 6
N - 0152 OSLO
- - hereinafter "TELENOR"
1.0 PROGRAM DESCRIPTION
A. SCM will use reasonable endeavours to design, manufacture, test and
supply to TELENOR verification devices ("PROTOTYPES") to meet the
functional and parametric specification that has been mutually agreed
upon in writing by the parties ("SPECIFICATION").
B. Upon mutual written approval of the SPECIFICATION, SCM will implement
the design and fabricate and ship PROTOTYPES to TELENOR in accordance
with the agreed upon delivery schedule.
C. The deliverables, schedule, and charges are set forth in Appendix I
hereto:
2.0 PROTOTYPE ACCEPTANCE AND DISCLAIMER OF WARRANTIES AND REMEDIES
TELENOR shall perform acceptance testing within thirty (30) days after
receipt of PROTOTYPES to determine whether PROTOTYPES conform to the
SPECIFICATION. If within the acceptance period, TELENOR demonstrates
that the PROTOTYPES fail to meet the SPECIFICATION, SCM shall use
reasonable endeavours to correct the defect if technically feasible at
SCM's expense and to supply new PROTOTYPES within a reasonable period
after written notification of the defect and confirmation by SCM. If SCM
is unable to correct the defect, SCM shall refund all moneys paid to SCM
by TELENOR hereunder.
Notwithstanding any assistance SCM may provide in the definition of the
SPECIFICATION; SCM does not warrant adequacy of such specification with
respect to TELENOR's intended use and SCM shall not be responsible for
circuit performance in the TELENOR application.
Page/Seite 1
<PAGE> 2
The foregoing states the entire warranty. All other claims for warranty
or performance are excluded. This shall not apply to claims arising from
the lack of an assured characteristic, or because SCM concealed the
defect in bad faith.
No assured characteristics shall be deemed to be created by this
Agreement. Any assured characteristics may only be created by written
confirmation of the parties.
3.0 PAYMENT SCHEDULE AND TERMS AND TERMINATION
SCM will invoice Telenor in accordance with the following schedule:
PROJECT PHASES
Phase 1: Functional Specification and Feasibility Study: [ * ]
- Overall hardware design definition - Software architecture [ * ]
definition - Detailed production cost estimates
Phase 2: Detailed Specifications: U$ [ * ]
[ * ]
- Processor Silicon specifications
- Electrical Design
- Mechanic specifications
- Software specifications
- Emulation environment for software development
Phase 3: [ * ] software on evaluation board: U$ [ * ]
[ * ]
- [ * ]
- [ * ]
- Software development
- Evaluation board
Phase 4: Prototype and production release U$ [ * ]
[ * ]
- Working prototype module
- Release for production
* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
<PAGE> 3
Payment terms: Net 30 days from the date of SCM's invoice
Telenor may terminate after the completion of each phase of the four
phases as defined above. At each phase [ * ] will be billed [ * ].
In case the contract is terminated before phase two is completed, SCM
has the repurchase rights of 50 % of 34985 shares as outlined in the
side letter from Telenor from 30. April 1997 (Rune Rinnan).
4.0 DELAY
If SCM does not comply with the schedule set forth in Appendix 1,
TELENOR shall be entitled to set SCM a reasonable period after the
expire of which without the required performance from SCM, TELENOR shall
be entitled to terminate this Agreement by written notification to SCM.
In this case all development charges previously paid by Telenor shall be
refunded if SCM was responsible for the delay. All other claims are
excluded.
5.0 OTHER DAMAGE CLAIMS
Other damage claims of TELENOR against SCM (in particular because of
breach of advisory obligations or secondary contractual duties, breach
of contract, tortuous acts and culpa in contrahendo) are excluded. This
does not apply if damages are caused by an intentional act or the gross
negligence of an agent or employee of SCM. SCM shall not be liable,
however, where such damages are due to an intentional act or gross
negligence of an agent or employee of SCM who is not an executive or
legal representative of SCM, unless such damages are caused by
infringement of a major contractual obligation.
The claims specified above are subject to a limitation period of 6 (six)
months except for claims for tortuous acts.
6.0 PROPERTY RIGHTS
A. TELENOR agrees that incorporation by SCM of one or more SCM Standard
Modules in any integrated circuit design under this Agreement shall not
derogate in any way from SCM's rights in such Module(s) nor, subject to
the
* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
Page/Seite 3
<PAGE> 4
following provisions of this Section, shall it limit the freedom of SCM
to use such Module(s) for the benefit of itself or of other parties. Any
new modules developed by SCM pursuant to this Agreement shall be deemed
to be SCM Standard Modules unless otherwise agreed in writing by the
parties. Title and all rights in any [ * ] and associated design rights
in [ * ], including the right to register such [ * ] under all
applicable statutes, and in the [ * ] arising out of performance under
this Agreement shall be owned exclusively by SCM.
B. SCM will assign a unique part number to device manufactured by SCM for
TELENOR hereunder and will not accept any purchase order from any other
customer for the supply of such device ordered by the unique part number
unless previously agreed in writing with TELENOR. In case of such
deliveries to other customers, SCM agrees to pay TELENOR [ * ] as
compensation for TELENOR's R&D contribution to a maximum [ * ]
7.0 INVENTIONS
Each party represents that it has agreements with its employees (which
term shall include agents, consultants and subcontractors) such that
ownership of intellectual property rights in and to any invention made
by its employees vests in the employer.
With respect to any invention made in the course of performance of this
agreement the following rules shall apply:
A. The intellectual property rights in and to any invention made solely by
one or more employees of either party shall be the sole property of that
party and no license thereunder shall be granted to the other party
except by separate written agreement. In case of a registered invention,
each party informs the other party about their invention.
B. The intellectual property rights in and to any invention made jointly by
one or more employees of SCM with one or more employees of TELENOR shall
be jointly owned by SCM and TELENOR with each party having unrestricted
right to licensee third parties thereunder without accounting to the
other.
The parties agree that the configuration of the device developed
pursuant to this Agreement shall not be deemed to be an invention by
either party.
* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
Page/Seite 4
<PAGE> 5
8.0 PRODUCTION
A. TELENOR's purchases of production devices will be initiated by written
purchase orders and SCM's agreement to sell will be by written order
acknowledgement. Unless and until the parties execute a separate written
production agreement, the only terms and conditions of sale for
production devices shall be those set forth in SCM's Standard Terms and
Conditions of Sale in effect at the time of order acknowledgement.
B. TELENOR will be permitted to cancel any undelivered production devices
subject to the following agreed upon cancellation charges: [ * ]
C. Notwithstanding the fact that wafer fabrication and assembly may be
initiated at any given site, SCM reserves the right to support wafer
fabrication and assembly from any of SCM's internally qualified wafer
fabrication and assembly sites.
9.0 GENERAL
A. TELENOR agrees that it will not knowingly (1) export or reexport,
directly or indirectly, any technical data or devices (subject to the
Export Administration Regulations of the US and other applicable
jurisdictions) received from SCM under this Agreement, (2) disclose such
technical data for use in, or (3) export or reexport, directly or
indirectly, any direct product of such technical data to any destination
to which such export or reexport is restricted or prohibited by US or
non-US law, without obtaining prior authorization from US Department of
Commerce and other competent government authorities to the extent
required by those laws.
SCM will comply with those regulations and will apply to obtain the
necessary licenses for shipping the products to Telenor.
B. The existence, validity, and construction of this Agreement and
performance hereunder shall be governed by the laws of Germany and the
Munich courts to whose jurisdiction the parties hereby submit, shall
have exclusive jurisdiction to hear all disputes.
* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
Page/Seite 5
<PAGE> 6
C. Consent by either party to, or waiver of, a breach by the other party,
whether express or implied, shall not constitute a consent to, waiver
of, or excuse for any other different or subsequent breach.
D. If any provision, or part of any provision of this Agreement, or the
Appendices hereto, is invalidated by operation of law or otherwise, the
provision or part will to that extent be deemed omitted and the
remainder of this Agreement, or applicable Appendix will remain in full
force and effect. Should the case arise, the parties agree that such
invalidated provision or part thereof shall be replaced by a similar but
legally valid provision which is as close as possible in commercial
effect to the invalidated provision or part thereof.
E. No information transmitted by either party to the other shall be
considered proprietary unless labelled accordingly and subject to a
separate written confidentiality agreement defining the rights and
obligations of the parties with respect thereto.
F. Neither party shall publicly announce or disclose the existence of this
Agreement or its terms and conditions, or advertise or release any
publicity regarding this Agreement, without the prior written consent of
the other party.
G. THIS AGREEMENT AND ITS APPENDIX ARE THE COMPLETE AND EXCLUSIVE STATEMENT
OF THE AGREEMENT BETWEEN THE PARTIES, WHICH SUPERSEDES ALL PROPOSALS OR
PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER COMMUNICATIONS BETWEEN
THE PARTIES RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND ANY
APPENDIX. NO ADDITION TO OR MODIFICATION OF THIS AGREEMENT SHALL BE
BINDING UPON EITHER PARTY UNLESS REDUCED IN WRITING AND DULY EXECUTED BY
THE PARTIES TO THIS AGREEMENT.
H. The provisions of Section 6 to 9 shall survive the termination or
cancellation of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
SCM MICROSYSTEMS GMBH TELENOR
By: /s/ BERND MEIER By: /s/ OYSTEIN CARSEN
----------------------- -----------------------
Name: Bernd Meier Name: Oystein Carsen
--------------------- ---------------------
Title: COO Title: Managing Director
--------------------- --------------------
Date: 05/15/97 Date: 05/15/97
--------------------- ---------------------
Page/Seite 6
<PAGE> 7
APPENDIX 1
1.0 PRELIMINARY PRODUCT DESCRIPTION
See annex [ * ] MODULE TELENOR PROJECT"
After the first phase (see 5.0) the product description might be
readjusted upon agreement of both parties.
2.0 STANDARD DEVELOPMENT PACKAGE
See annex [ * ] MODULE TELENOR PROJECT" After the first phase
(see 5.0), the "standard development package" might be readjusted upon
agreement of both parties.
3.0 DEVELOPMENT CHARGES
See paragraph 3 in contract.
4.0 PAYMENT SCHEDULE
See paragraph 3 of contract.
5.0 PRELIMINARY DEVELOPMENT SCHEDULE
STAGE RESP. ESTIMATED
COMPLETION DATE Day/Month/Year
[ * ]
Further details as outlined in the project plan attached to the [ * ]
module Telenor project plan. After first phase the completion dates can be
readjusted upon agreement of both parties.
7.0 PRODUCTION DEVICE PRICING
for device integrated into DVB-CAM (similar to current CAM) As
production device pricing cannot be defined now the parties agree to
work together to achieve a price target of US [ * ] to US [ * ]. There
can be no guarantee that these prices can be achieved.
Following PROTOTYPE approval by TELENOR, SCM's estimated lead-time for
production devices is approx. [ * ] after receipt of TELENOR's order.
* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
Page/Seite 7
<PAGE> 8
[Facsimile dated April 30, 1997]
[Telenor Venture Logo]
Dear Steven Humphreys,
With regards to the fax from Hasse Iwarsson to you send 04/28/97 and your
response of 04/29/97, we hereby confirm that we enter into the technology
agreement as described.
The technology agreement will be divided in 4 phases of each USD [*], and
Telenor Venture will be able to terminate the technology agreement within the
day before entering into each next phase.
The full warrant coverage of 194.930 shares at a predetermined price of US$8,58
will be honored.
Concerning the [*] shares to be issued to Telenor Venture we accept that [*] of
the shares is repurchaseable after the first phase is initiated and paid, and
that [*] shares is repurchaseable after second phase is initiated and paid.
In the name of good order, please confirm your acceptance by fax.
On behalf of Telenor Venture AS
/s/ Rune Rinnan
CEO
*Certain confidential information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
