<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 21, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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NEXTEL INTERNATIONAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
WASHINGTON 91-1671412
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
1191 SECOND AVENUE, SUITE 1600
SEATTLE, WASHINGTON 98101
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
NEXTEL INTERNATIONAL, INC.
1997 STOCK OPTION PLAN
(FULL TITLE OF THE PLAN)
HENG-PIN KIANG, ESQ.
VICE PRESIDENT AND GENERAL COUNSEL
NEXTEL INTERNATIONAL, INC.
1191 SECOND AVENUE, SUITE 1600
SEATTLE, WASHINGTON 98101
(206) 749-8000
(NAME, ADDRESS AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------------------
COPY TO:
J. SUE MORGAN
PERKINS COIE LLP
1201 THIRD AVENUE, 40TH FLOOR
SEATTLE, WASHINGTON 98101-3099
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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AMOUNT PROPOSED PROPOSED
TO BE MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES REGISTERED OFFERING PRICE AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED (1) PER SHARE(2) PRICE(2) FEE
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<S> <C> <C> <C> <C>
COMMON STOCK, NO PAR VALUE
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NEXTEL INTERNATIONAL, INC. 1,975,000 $8.13 $16,056,750 $4,737
1997 STOCK OPTION PLAN
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</TABLE>
(1) Together with an indeterminate number of additional shares that may be
necessary to adjust the number of shares reserved for issuance pursuant
to the 1997 Stock Option Plan as the result of any future stock split,
stock dividend or similar adjustment of the Registrant's outstanding
Common Stock.
(2) Estimated pursuant to Rule 457(h) solely for the purpose of calculating
the registration fee. The book value per share is estimated to be $8.13
based on stockholders' equity of $296,721,000 divided by 36,500,000
shares, the number of shares of Common Stock outstanding as of the date
of the Registrant's most recent Form 10-Q, filed with the Securities and
Exchange Commission on August 13, 1998.
<PAGE> 2
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange
Commission (the "Commission") are hereby incorporated by reference in this
Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the year
ended December 31, 1997, filed on March 30, 1998, which contains audited
financial statements for the most recent fiscal year for which such statements
have been filed; and
(b) All other reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), since the end of the fiscal year covered by the Annual Report on Form
10-K referred to in (a) above.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act after the date hereof and prior to the filing
of a post-effective amendment, which indicate that the securities offered hereby
have been sold or which deregister the securities covered hereby then remaining
unsold, shall also be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof commencing on the respective
dates on which such documents are filed.
ITEM 4. DESCRIPTION OF SECURITIES
Set forth below is certain information relating to the Common Stock of
the Registrant, including brief summaries of certain provisions of its Restated
Articles of Incorporation and Restated Bylaws and certain related provisions of
the Washington Business Corporation Act.
General
The authorized Common Stock of the Registrant consists of 73,000,000
shares, without par value. There are currently 36,502,624 shares of Common Stock
outstanding, a majority of which are held of record by Nextel Communications,
Inc. ("Nextel") through a wholly owned subsidiary.
Common Stock
All of the issued and outstanding shares of Common Stock are fully paid
and non-assessable. Each holder of shares of Common Stock is entitled to one
vote per share upon such matters and in such manner as may be provided by law.
Because of its ownership of a majority of the currently outstanding Common
Stock, Nextel can control matters requiring a shareholder vote. There are no
cumulative voting rights and there is no classification of the Board of
Directors. The holders of Common Stock are entitled to dividends and other
distributions as may be declared from time to time by the Board of Directors out
of funds legally available therefor, if any.
Upon the liquidation, dissolution or winding up of the Registrant, the
holders of shares of Common Stock would be entitled to a pro rata share of all
of the Registrant's assets remaining after payment of liabilities and expenses.
The Common Stock has no preemptive rights, conversion rights or other
subscription rights for the purchase shares of Common Stock. There are no
redemption or sinking fund provisions applicable to the Common Stock.
Restated Articles of Incorporation and Restated Bylaws
The rights of the Registrant's shareholders are governed by the
Washington Business Corporation Act, the Restated Articles of Incorporation and
the Restated Bylaws.
Shareholder Action by Written Consent; Special Meeting
The Restated Bylaws permit shareholders to take action by less than
unanimous written consent in lieu of an annual or special meeting. In addition,
special meetings of shareholders may be called by the Chairman of the Board of
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Directors, the president, or the Board of Directors for any purpose. Special
meetings may be called by shareholders provided that the holders of at least ten
percent of the votes entitled to be cast on any issue have delivered a written
demand for a special meeting, describing the purpose for such meeting.
Anti-Takeover Effects of Washington Law
Washington law contains certain provisions that may have the effect of
delaying or discouraging a takeover of the Registrant. Chapter 23B.19 of the
Washington Business Corporation Act prohibits a Washington corporation with a
class of securities registered under the Exchange Act, with certain exceptions,
from engaging in certain "significant business transactions" with a person or
group of persons that beneficially own 10% or more of the Registrant's
outstanding voting securities for a period of five years after such an
acquisition unless a majority of the Registrant's directors approves, prior to
the acquisition date, either the significant business transaction or the
purchase of shares made by the acquiring person or group of persons on the
acquisition date. The prohibited significant business transactions include,
among others, a merger with, disposition of assets to, or issuance or redemption
of stock to or from such person or groups of persons, or allowing such person or
group of persons to receive any disproportionate benefit as a shareholder. These
provisions may have the effect of delaying, deterring or preventing a change in
control of the Registrant. After the five-year period, a significant business
transaction may take place as long as it complies with certain "fair price"
provisions of the Washington Business Corporation Act.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 23B.08.500 through 23B.08.600 of the Washington Business
Corporation Act authorize a court to award, or a corporation's board of
directors to grant, indemnification to directors and officers on terms
sufficiently broad to permit indemnification under certain circumstances for
liabilities arising under the Securities Act of 1933, as amended (the
"Securities Act"). Section 8 of the Registrant's Restated Bylaws provides for
indemnification of the Registrant's directors, officers, employees and agents to
the maximum extent permitted by Washington law.
Section 23B.08.320 of the Washington Business Corporation Act authorizes
a corporation to limit a director's liability to the corporation or its
shareholders for monetary damages for acts or omissions as a director, except in
certain circumstances involving intentional misconduct, self-dealing or illegal
corporate loans or distributions, or any transactions from which the director
personally receives a benefit in money, property or services to which the
director is not entitled. Article X of the Registrant's Restated Articles of
Incorporation contains provisions implementing, to the fullest extent permitted
by Washington law, such limitations on a director's liability to the Registrant
and its shareholders.
Officers and directors of the Registrant are covered by insurance (with
certain exceptions and certain limitations) that indemnifies them against losses
and liabilities arising from certain alleged "wrongful acts," including alleged
errors or misstatements, or certain other alleged wrongful acts or omissions
constituting neglect or breach of duty.
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ITEM 8. EXHIBITS
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Exhibit
Number Description
- -------------- ---------------------------------------------------------------
<S> <C>
5.1 Opinion of Perkins Coie LLP regarding legality of the Common
Stock being registered
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Perkins Coie LLP (included in opinion filed as
Exhibit 5.1)
24.1 Power of Attorney (see signature page)
99.1 Nextel International, Inc. 1997 Stock Option Plan
</TABLE>
ITEM 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefits plan's annual
report pursuant to Section 15(d) of the Exchange Act) 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.
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C. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that, in the opinion of the Commission, such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has 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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Seattle, State of Washington, on the 16th day of
September, 1998.
NEXTEL INTERNATIONAL, INC.
/s/ DAVID E. ROSTOV
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By: David E. Rostov
Vice President and Chief
Financial Officer
Each person whose individual signature appears below hereby authorizes
David E. Rostov and Heng-Pin Kiang, or either of them, as attorneys-in-fact with
full power of substitution, to execute in the name and on the behalf of each
person, individually and in each capacity stated below, and to file, any and all
post-effective amendments to this Registration Statement.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated below on the 16th day of September, 1998.
<TABLE>
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SIGNATURE TITLE
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<S> <C>
/s/ DANIEL F. AKERSON Chairman of the Board of Directors
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Daniel F. Akerson
/s/ KEITH D. GRINSTEIN President, Chief Executive Officer and Director
- --------------------------------------------- (Principal Executive Officer)
Keith D. Grinstein
/s/ DAVID E. ROSTOV Vice President and Chief Financial Officer
- --------------------------------------------- (Principal Financial and Accounting Officer)
David E. Rostov
/s/ TIMOTHY M. DONAHUE Director
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Timothy M. Donahue
/s/ C. JAMES JUDSON Director
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C. James Judson
/s/ CRAIG O. MCCAW Director
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Craig O. McCaw
/s/ STEVEN M. SHINDLER Director
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Steven M. Shindler
/s/ DENNIS M. WEIBLING Director
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Dennis M. Weibling
</TABLE>
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
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<S> <C>
5.1 Opinion of Perkins Coie LLP regarding legality of the Common
Stock being registered
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Perkins Coie LLP (included in opinion filed as
Exhibit 5.1)
24.1 Power of Attorney (see signature page)
99.1 Nextel International, Inc. 1997 Stock Option Plan
</TABLE>
<PAGE> 1
EXHIBIT 5.1
[PERKINS COIE LLP LETTERHEAD]
September 16, 1998
Nextel International, Inc.
1191 Second Avenue, Suite 1600
Seattle, WA 98101
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to you in connection with the preparation of a
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended ("the Act"), which you are filing with the
Securities and Exchange Commission with respect to 1,975,000 shares of Common
Stock, no par value (the "Shares"), which may be issued pursuant to the Nextel
International, Inc. 1997 Stock Option Plan (the "Plan"). We have examined the
Registration Statement and such documents and records of the Company and other
documents as we have deemed necessary for the purpose of this opinion.
Based upon and subject to the foregoing, we are of the opinion that any
original issuance Shares that may be issued pursuant to the Plan have been duly
authorized and that, upon the due execution by the Company and the registration
by its registrar of such Shares and the sale thereof by the Company in
accordance with the terms of the Plan, and the receipt of consideration therefor
in accordance with the terms of the Plan, such Shares will be validly issued,
fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ PERKINS COIE LLP
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
----------------------------------------------------
We consent to the incorporation by reference in this Registration Statement of
Nextel International, Inc. and subsidiaries on Form S-8 of our report dated
February 19, 1998, appearing in the Annual Report on Form 10-K of Nextel
International, Inc. and subsidiaries for the year ended December 31, 1997.
/s/ DELOITTE & TOUCHE LLP
Seattle, Washington
September 17, 1998
<PAGE> 1
EXHIBIT 99.1
NEXTEL INTERNATIONAL, INC.
1997 STOCK OPTION PLAN
(RESTATED AS OF JULY 10, 1998)
SECTION 1. PURPOSE
The purpose of this Nextel International, Inc. 1997 Stock Option Plan
(this "Plan") is to provide a means whereby selected employees, directors,
officers, consultants, agents, advisors and independent contractors of Nextel
International, Inc., a Washington corporation (the "Company"), and its
Subsidiaries (as defined in Section 4) may be granted options to purchase shares
of the common stock of the Company (the "Common Stock") and thereby share in any
future appreciation in the value of the Common Stock (Amended 7/10/98).
SECTION 2. ADMINISTRATION
This Plan shall be administered by the Board of Directors of the Company
(the "Board") or a committee designated by the Board in its discretion, which
must include two or more members of the Board. If and so long as the Common
Stock is registered under Section 12(b) or 12(g) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), the Board shall consider in selecting
the Plan Administrator and the membership of any committee acting as Plan
Administrator, with respect to any persons subject or likely to become subject
to Section 16 of the Exchange Act, the provisions regarding (a) "outside
directors" as contemplated by Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code"), and (b) "nonemployee directors" as contemplated
by Rule 16b-3 under the Exchange Act. The Board may delegate the responsibility
for administering this Plan with respect to designated classes of eligible
persons to different committees consisting of two or more members of the Board,
subject to such limitations, as the Board deems appropriate. Committee members
shall serve for such term as the Board may determine, subject to removal by the
Board at any time. The Board (or the designated committee, if applicable) shall
hereinafter be referred to as the "Plan Administrator." The Board may also
authorize a senior executive officer of the Company to administer this Plan
within limits specifically prescribed by the Board. Except for the terms and
conditions explicitly set forth in this Plan, the Plan Administrator shall have
the authority, in its discretion, to determine all matters relating to the
options to be granted under this Plan, including selection of the individuals to
be granted options, the number of options to be granted, and all other terms and
conditions of the options. The options granted under this Plan need not be
identical in any respect, even when made simultaneously.
The Plan Administrator shall be responsible for interpreting and
construing the terms and provisions of this Plan, any options issued hereunder,
or any rule or regulation promulgated in connection with this Plan and
associated options. All actions of the Plan Administrator shall, to the maximum
extent permitted under law, be determined in its good faith discretion, and
subject to appeal or dispute only as to its failure to adhere to such good faith
discretion standard. Any party disagreeing with the Plan Administrator's
interpretation or decision may request the Plan Administrator to reexamine its
action. A request for a reexamination must be made in writing within 60 days of
the Plan Administrator's decision or action, and must specify the reasons why
the Plan Administrator's decision or action was wrong or inappropriate. Within
90 days of its receipt of a request to reexamine a decision or action, the Plan
Administrator will respond in writing to the disputing party. The Plan
Administrator's response shall either reverse or reconfirm its initial decision
or action. If the response reconfirms the initial decision or action, the Plan
Administrator shall state why it disagrees with the points raised by the
disputing party.
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A continuing dispute between the Plan Administrator and a recipient of
options about the proper interpretation of this Plan or the Stock Purchase
Agreement to be entered into between the Company and the holder of an option
upon exercise of an option (the "Stock Purchase Agreement"), or the correct
amount of benefits available under this Plan or the Stock Purchase Agreement
shall be settled in Seattle, Washington, or such other location reasonably
selected by the Company, by arbitration in accordance with the procedures
utilized by Commercial Arbitration Rules of the American Arbitration Association
(the "AAA Rules"). The arbitrator shall be either selected by the mutual
agreement of the parties or chosen in accordance with the AAA Rules. Judgment
upon the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. Notwithstanding anything in the AAA Rules to the contrary,
the prevailing parties shall not be entitled to costs, expenses or attorneys'
fees.
SECTION 3. STOCK SUBJECT TO THIS PLAN
3.1 AUTHORIZED NUMBER OF SHARES
Subject to adjustment from time to time as provided in Section 7, a
maximum of 1,975,000 shares of Common Stock shall be available for issuance
under this Plan. Shares issued under this Plan shall be drawn from authorized
and unissued shares or shares now held or subsequently acquired by the Company.
(Amended 7/10/98)
3.2 REUSE OF SHARES
Any shares of Common Stock that have been made subject to an option that
cease to be subject to the option (other than by reason of exercise of the
option to the extent it is exercised for shares) shall again be available for
issuance in connection with future grants of options under this Plan.
SECTION 4. ELIGIBILITY
An option may be granted to any employee, director, officer, consultant,
agent, advisor or independent contractor of the Company or its Subsidiaries that
the Plan Administrator from time to time selects. For purposes of this Plan,
except as provided below, the term "Subsidiary" means any entity that is
directly or indirectly controlled by the Company or in which the Company has a
significant ownership interest, as determined by the Plan Administrator. In
addition, an option may be granted to any person who was granted a stock
appreciation right under the Company's Stock Appreciation Rights Plan and who is
an employee of Nextel Communications, Inc. ("Nextel") on the date of grant.
Anyone to whom an option is granted under this Plan shall be referred to
hereinafter as an "Optionee."
Notwithstanding anything in this Plan to the contrary, the Plan
Administrator may grant options under this Plan in substitution for awards
issued under other plans, or assume under this Plan awards issued under other
plans, if the other plans are or were plans of other acquired entities
("Acquired Entities") (or the parent of the Acquired Entity) and the new option
is substituted, or the old award is assumed, by reason of a merger,
consolidation, acquisition of property or of stock, reorganization or
liquidation (the "Acquisition Transaction"). In the event that a written
agreement pursuant to which the Acquisition Transaction is completed is approved
by the Board and said agreement sets forth the terms and conditions of the
substitution for or assumption of outstanding awards of the Acquired Entity,
said terms and conditions shall be deemed to be the action of the Plan
Administrator without any further action by the Plan Administrator, except as
may be required for compliance with Rule 16b-3 under the Exchange Act, and the
persons holding such awards shall be deemed to be Optionees.
SECTION 5. TERMS AND CONDITIONS OF OPTIONS
The Plan Administrator shall have the authority, in its sole discretion,
to determine the awards to be made under this Plan. Such awards shall consist of
incentive stock options that are intended to qualify under Section 422 of the
Code or nonqualified stock options.
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Options granted under this Plan shall be evidenced by individual written
agreements ("option letter agreements"), which shall contain such terms,
conditions, limitations and restrictions as the Plan Administrator shall deem
advisable and consistent with this Plan. Notwithstanding the foregoing, all
options shall include or incorporate by reference the following terms and
conditions, except as provided otherwise in the applicable option letter
agreement:
5.1 NUMBER OF OPTIONS AND EXERCISE PRICE
At the time a grant of an option is made, the Plan Administrator shall
establish the maximum number of shares of Common Stock subject to the option
contained in the grant. Also at the time an option is granted, the corresponding
option letter agreement shall designate the exercise price for shares purchased
under the option, which shall be as determined by the Plan Administrator, but
shall not be less than 100% of the fair market value (as determined below) of a
single share of Common Stock on the date of grant with respect to incentive
stock options.
5.2 DETERMINATION OF FAIR MARKET VALUE
The per share fair market value shall be established by the Plan
Administrator as follows:
5.2.1
Within 90 days following the close of the Company's fiscal year, the
Plan Administrator shall establish the fair market value of a share of the
Common Stock for purposes of this Plan, based on financial data dated as of the
end of the most recently closed fiscal year, and shall deliver written notice of
such value to each Optionee within a reasonable period of time of determining
such value (the "Year-End Valuation Notice"). In setting such per share fair
market value, the Plan Administrator shall attempt, in good faith, to establish
the Company's fair market value, consistently using formulas and other valuation
techniques generally used in purchasing and selling businesses similar to the
Company. For purposes of determining the per share fair market value of the
Common Stock at the date of grant and/or exercise of an option that occurs at a
time other than during the first Semi-Annual Exercise Period (as defined in
Section 5.4 below) each year, the per share fair market value shall be
determined by the Plan Administrator after taking into account such factors as
the Plan Administrator shall deem appropriate.
5.2.2
Notwithstanding the other paragraphs of Section 5.2, for purposes of
determining the per share fair market value at the date of exercise of certain
put rights to sell to the Company shares acquired upon exercise of an option (a
"Put Right") as described in Section 13.2 that occurs at a time other than
during the first Semi-Annual Exercise Period (as defined in Section 5.4) each
year, the Plan Administrator shall at its election either (i) use the year-end
financial information for the Company's most recently ended fiscal year and
determine the per share fair market value as of that year-end, and then adjust
that value forward at the Applicable Rate to the date of exercise, which
adjusted amount shall be the applicable per share fair market value, or (ii) use
month-end financial information for the Company's most recently ended month and
determine the per share fair market value as of that month-end, which such
determined amount shall be the applicable per share fair market value; provided,
however, unless a material transaction has occurred within the three-month
period following the most recent determination of per share fair market value,
such per share fair market value shall be applicable during such period; and
provided, further, that, (x) if a Put Right is exercised during the last 45 days
of the Company's fiscal year, then the Company shall wait and use the year-end
financial information for that fiscal year to determine per share fair market
value and (y) immediately prior to a material transaction the Plan Administrator
shall establish the per share fair market value applicable immediately prior to
(and disregarding any value impact associated with) such transaction; and
provided, further that in no event shall such per share fair market value for an
exercise date during any fiscal year be lower than the per share fair market
value stated in the Year-End Valuation Notice for that year. The Plan
Administrator shall, within 90 days following the close of the second fiscal
quarter of the Company's fiscal year, establish the per share fair market value
of the Common Stock, based on either of the
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methodologies described in clause (i) or (ii) above and shall deliver written
notice of such value to each Optionee (the "Six-Month Valuation Notice") (the
Year-End Valuation Notice and the Six-Month Valuation Notice are each a
"Valuation Notice"). For purposes of this Plan, "Applicable Rate" shall mean an
annual rate equal to the prime rate (adjusted quarterly) announced from time to
time by Seattle-First National Bank plus 2%.
5.2.3
Notwithstanding the preceding paragraphs of this Section 5.2, in the
event the grant and/or exercise of options or the exercise of a Put Right occurs
in connection with the sale of the Company, an initial public offering, merger,
or other similar event that utilizes or produces a purchase value for the
Company or for individual shares of the Common Stock, then that value shall be
used for computing the per share fair market value under this Plan. Otherwise,
in setting the per share fair market value in connection with the granting or
exercising of options or the exercise of a Put Right, the determination of the
Plan Administrator acting in good faith and using formulas and other valuation
techniques generally used in purchasing and selling businesses similar to the
Company shall be conclusive and binding on all parties; provided, in the event
of a dispute over the valuation, the arbitration process discussed in Section 2
shall not affect or alter the Plan Administrator's determination if the
arbitrator concludes the Plan Administrator (i) acted in good faith and (ii)
based its determination on formulas and other valuation techniques generally
used in the purchase and sale of businesses similar to the Company.
5.2.4
Notwithstanding the foregoing, if the Common Stock is listed on the
NASDAQ National Market, the per share fair market value shall be the average of
the high and low per share sales prices for the Common Stock as reported by the
NASDAQ National Market for a single trading day or, if the Common Stock is
listed on the New York Stock Exchange or the American Stock Exchange, the per
share fair market value shall be the average of the high and low per share sales
prices for the Common Stock as such price is officially quoted in the composite
tape of transactions on such exchange for a single trading day. If there is no
such reported price for the Common Stock for the date in question, then such
price on the last preceding date for which such price exists shall be
determinative of the per share fair market value.
5.3 TERM AND VESTING
The term of each option shall be ten years from the date of grant,
unless the Plan Administrator establishes a different term and set forth in the
option letter agreement issued to the individual Optionee. The Plan
Administrator may, in its discretion, extend the term period of an option. In
addition, the term of an option shall expire, if earlier than ten years or the
different term specified in the option letter agreement, earlier in accordance
with the provisions of Section 5.8 if the Optionee's employment or service
relationship with the Company terminates before the end of ten years from the
date of grant or the different term specified in the option letter agreement. To
the extent not exercised within the applicable time period provided herein,
options shall become null and void.
To ensure that the Company achieves the purpose and receives the
benefits contemplated in this Plan, any option granted to any person hereunder
shall, unless the condition of this sentence is waived or modified by the Plan
Administrator in the individual option letter agreement or at any later time,
vest on a monthly basis over a four-year period, with the Optionee becoming
vested in 1/48th of the option grant after the completion of each full calendar
month of employment or service relationship with the Company following the date
as of which the option was granted.
5.4 EXERCISE
After an Optionee becomes at least 50% vested with respect to any single
option grant, the Optionee may exercise vested options included in that grant;
provided that, an Optionee may not exercise more than 20% of the options
conveyed in a specific grant in a single fiscal year of the Company. This 50%
threshold shall apply
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separately to each separate grant of options. The Plan Administrator may in its
discretion increase the percentage of options, which may be exercised. To the
extent options are exercised upon a termination of employment or service
relationship with the Company (as described in Section 5.8), the preceding 50%
and 20% limits shall not apply. During an Optionee's lifetime, any options
granted under this Plan are personal to him or her and may be exercised solely
by such Optionee except as permitted under Section 5.7.
To the extent that the right to purchase shares has accrued thereunder,
an option may be exercised only during a Semi-Annual Exercise Period by
delivering during such Semi-Annual Exercise Period written notice to the
Company, in accordance with procedures established by the Plan Administrator,
setting forth the number of shares with respect to which the option is being
exercised and accompanied by payment in full as described below. "Semi-Annual
Exercise Periods" means the 30-day periods commencing each year on each of (a)
the date the Plan Administrator delivers to the Optionee the Year-End Valuation
Notice pursuant to Section 5.2.1 and (b) the date the Plan Administrator
delivers to the Optionee the Six-Month Valuation Notice pursuant to Section
5.2.2, during which periods an Optionee is entitled to exercise his or her
options pursuant to the terms hereof.
The limitations on exercisability contained in this Section 5.4 shall
not apply at any time during which the Common Stock is registered under Section
12(b) or 12(g) of the Exchange Act. The Plan Administrator may determine at any
time that an option may not be exercised as to less than 100 shares at any one
time (or the lesser number of remaining shares covered by the option).
5.5 PAYMENT OF THE EXERCISE PRICE
The exercise price for shares purchased under an option shall be paid in
full to the Company by delivery of consideration equal to the product of the
option exercise price and the number of shares purchased. Such consideration
must be paid in cash or by check or, unless the Plan Administrator in its sole
discretion determines otherwise, either at the time the option is granted or at
any time before it is exercised, a combination of cash and/or check (if any) and
any of the following alternative forms: (a) tendering (either actually or, if
and so long as the Common Stock is registered under Section 12(b) or 12(g) of
the Exchange Act, by attestation) Common Stock already owned by the Optionee for
at least six months (or any shorter period necessary to avoid a charge to the
Company's earnings for financial reporting purposes) having a fair market value
on the day prior to the exercise date equal to the aggregate option exercise
price; (b) if and so long as the Common Stock is registered under Section 12(b)
or 12(g) of the Exchange Act, delivery of a properly executed exercise notice,
together with irrevocable instructions, to (i) a brokerage firm designated by
the Company to deliver promptly to the Company the aggregate amount of sale or
loan proceeds to pay the option exercise price and any withholding tax
obligations that may arise in connection with the exercise and (ii) the Company
to deliver the certificates for such purchased shares directly to such brokerage
firm, all in accordance with the regulations of the Federal Reserve Board; or
(c) surrendering to the Company a portion of a particular grant equal to or less
than the result of dividing the total exercise price of the options being
exercised by the fair market value of one share of Common Stock and receiving
from the Company in whole shares the difference between the total shares of the
option grant and the number of whole option shares surrendered. In addition, to
the extent permitted by the Plan Administrator in its sole discretion, the price
for shares purchased under an option may be paid, either singly or in
combination with one or more of the alternative forms of payment authorized by
this Section 5.5, by (y) a promissory note delivered pursuant to Section 12 or
(z) such other consideration as the Plan Administrator may permit.
5.6 STOCK PURCHASE AGREEMENT
Prior to and as a condition to the exercise of an option, the Optionee
shall become a party to and agree to the terms of a Stock Purchase Agreement,
which agreement provides terms and conditions regarding the ownership and
disposition of the Common Stock issued upon the exercise of an option. A copy of
the Stock Purchase Agreement, in its substantial form, shall be provided to the
Optionee upon the grant of an option to the Optionee.
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5.7 NON-TRANSFERABILITY OF OPTIONS
Options granted under this Plan and the rights and privileges conferred
thereby may not be transferred, assigned, pledged or hypothecated in any manner
(whether by operation of law or otherwise) other than by will or by the
applicable laws of descent and distribution, and shall not be subject to
execution, attachment or similar process. Upon any attempt to transfer, assign,
pledge, hypothecate or otherwise dispose of any option under this Plan or of any
right or privilege conferred thereby, contrary to the provisions hereof, or upon
the sale or levy or any attachment or similar process upon the options or rights
and privileges conferred thereby, such option shall terminate and become null
and void. Notwithstanding the foregoing, and to the extent permitted by Section
422 of the Code, the Plan Administrator, in its sole discretion, may permit the
assignment or transfer of an option and may permit an Optionee to designate a
beneficiary who may exercise the option after the Optionee's death; provided,
however, that any option so assigned or transferred shall be subject to all the
same terms and conditions contained in the option letter agreement.
5.8 TERMINATION OF EMPLOYMENT OR SERVICE RELATIONSHIP WITH THE COMPANY
If the Optionee terminates his or her employment or service relationship
with the Company for any reason (including retirement, death, disability or
otherwise), the Optionee may exercise the vested portion of his or her options,
as governed by the vesting schedule defined in Section 5.3. The unvested portion
of his or her options shall be forfeited. In addition, an Optionee whose
employment or service relationship with the Company is terminated for cause
shall forfeit all outstanding options, including vested and unvested portions. A
termination shall be considered for "cause" if the Plan Administrator determines
that the Optionee's termination of employment or service relationship with the
Company was for one of the following reasons: (a) proven embezzlement by the
Optionee of the Company's assets, or other crimes by the Optionee against or
directly involving the Company's property; (b) material violation by the
Optionee, whether or not an employee, of the policies applicable to employees of
the Company; (c) the Optionee acting in any fashion as an independent consultant
or employee, for himself or herself or any other business or employer other than
the Company, in any endeavor that in any way competes with the Company; or (d)
the Optionee's willful engaging in conduct that is materially injurious to
Nextel, the Company or their subsidiaries, financially or otherwise. For
purposes of this Section 5.8, no act, or failure to act, on the Optionee's part
shall be considered "willful" unless done, or omitted to be done, by the
Optionee not in good faith and without reasonable belief that such action or
omission was in the best interest of Nextel, the Company or their subsidiaries.
The portion of the Optionee's options that are vested and nonforfeitable
on the date of the Optionee's termination of employment or service relationship
with the Company for any reason other than total disability or death may be
immediately exercised for a period of 90 days following the Optionee's
termination of employment or service relationship with the Company. If
termination of employment or service relationship with the Company is due to an
Optionee's total disability (as defined in Section 5.12.4), then the right to
exercise the Optionee's vested and nonforfeitable options under this Section 5.8
shall extend to one year from the date of termination of employment or service
relationship. If termination of employment or service relationship with the
Company is due to an Optionee's death (or the Optionee dies within 90 days
following a termination of employment or service relationship with the Company,
but prior to exercising his or her options), then the right to exercise the
Optionee's vested and nonforfeitable options under this Section 5.8 shall pass
to the Optionee's personal representative or estate, and the period for exercise
shall extend to one year from the date of death. The Plan Administrator, may, in
its discretion, waive or extend these exercise periods. Following these exercise
periods, any remaining unexercised options shall automatically terminate and be
forfeited.
For purposes of this Section 5.8, employment or service relationship
with the Company shall be deemed to continue while the Optionee is on military
leave, sick leave or other bona fide leave of absence (as determined by the Plan
Administrator). The foregoing notwithstanding, employment or service
relationship with the Company shall not be deemed to continue beyond the first
90 days of such leave, unless the Optionee's reemployment rights are guaranteed
by statute or contract.
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5.9 CONTINUATION OF EMPLOYMENT OR SERVICE RELATIONSHIP WITH THE COMPANY
Nothing in this Plan or in any options granted pursuant to this Plan
shall confer upon any Optionee any right to continue in the employment or
service relationship of the Company or of any Subsidiary, or to interfere in any
way with the right of the Company or of any Subsidiary to terminate the
Optionee's employment or other relationship with the Company or the Subsidiary
at any time.
5.10 MODIFICATION AND AMENDMENT OF OPTIONS
Subject to the terms and conditions and within the limitations of this
Plan, the Plan Administrator may modify or amend outstanding options granted
under this Plan. Except as expressly provided under the terms of this Plan as in
effect at the time of granting the relevant option, the modification or
amendment of an outstanding option shall not, without the consent of the
Optionee, impair or diminish any of his or her options that have been granted,
or any of the obligations of the Company under such options.
5.11 BUYOUT PROVISIONS
The Plan Administrator may at any time offer to buy out for a payment in
cash an option previously granted and held by an Optionee whose employment or
service relationship with the Company has been terminated, based on such terms
and conditions as the Plan Administrator shall establish and communicate to the
Optionee at the time such offer is made.
5.12 INCENTIVE STOCK OPTION LIMITATIONS
To the extent required by Section 422 of the Code, incentive stock
options shall be subject to the following additional terms and conditions:
5.12.1 DOLLAR LIMITATION
To the extent the aggregate fair market value (determined as of the
grant date) of Common Stock with respect to which incentive stock options held
by an individual Optionee are exercisable for the first time during any calendar
year (under this Plan and all other stock option plans of the Company) exceeds
$100,000, such portion in excess of $100,000 shall be treated as a nonqualified
stock option. In the event an Optionee holds two or more such options that
become exercisable for the first time in the same calendar year, such limitation
shall be applied on the basis of the order in which such options are granted.
5.12.2 10% SHAREHOLDERS
If an individual owns more than 10% of the total voting power of all
classes of the Company's stock, then the exercise price per share of an
incentive stock option shall not be less than 110% of the fair market value of
the Common Stock on the grant date and the option term shall not exceed five
years. The determination of 10% ownership shall be made in accordance with
Section 422 of the Code.
5.12.3 ELIGIBLE EMPLOYEES
Individuals who are not employees of the Company or one of its
subsidiary corporations or parent corporations may not be granted incentive
stock options. For purposes of this Section 5.12.3, "parent corporation" and
"subsidiary corporation" shall have the meanings attributed to those terms for
the purposes of Section 422 of the Code.
5.12.4 TERM
The term of an incentive stock option shall not exceed ten years.
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5.12.5 EXERCISABILITY
To qualify for incentive stock option tax treatment, an option
designated as an incentive stock option must be exercised within three months
after termination of employment for reasons other than death, except that, in
the case of termination of employment due to total disability, such option must
be exercised within one year after such termination. Employment shall not be
deemed to continue beyond the first 90 days of a leave of absence unless the
Optionee's reemployment rights are guaranteed by statute or contract. For
purposes of this Section 5.12, "total disability" shall mean a mental or
physical impairment of the Optionee that is expected to result in death or that
has lasted or is expected to last for a continuous period of 12 months or more
and that causes the Optionee to be unable, in the opinion of the Company and two
independent physicians, to perform his or her duties for the Company and to be
engaged in any substantial gainful activity. Total disability shall be deemed to
have occurred on the first day after the Company and the two independent
physicians have furnished their opinion of total disability to the Plan
Administrator.
5.12.5 TAXATION OF INCENTIVE STOCK OPTIONS
In order to obtain certain tax benefits afforded to incentive stock
options under Section 422 of the Code, the Optionee must hold the shares issued
upon the exercise of an incentive stock option for two years after the grant
date of the incentive stock option and one year from the date of exercise. An
Optionee may be subject to the alternative minimum tax at the time of exercise
of an incentive stock option. The Plan Administrator may require an Optionee to
give the Company prompt notice of any disposition of shares acquired by the
exercise of an incentive stock option prior to the expiration of such holding
periods.
5.12.6 PROMISSORY NOTES
The amount of any promissory note delivered pursuant to Section 12 in
connection with an incentive stock option shall bear interest at a rate
specified by the Plan Administrator but in no case less than the rate required
to avoid imputation of interest (taking into account any exceptions to the
imputed interest rules) for federal income tax purposes.
SECTION 6. STATUS AS SHAREHOLDERS
Neither the Optionee nor any person or persons to whom the Optionee's
options and related privileges under this Plan may pass shall be or have any of
the rights and privileges of a shareholder of the Company except to the extent
that shares are acquired upon exercise of an option, and provided that nothing
in this Plan prohibits or prevents an Optionee from otherwise becoming a
shareholder of the Company.
SECTION 7. CAPITALIZATION CHANGES
The aggregate number and kind of securities subject to this Plan as set
forth in Section 3, the number and kind of securities subject to any outstanding
options granted under this Plan and the per share option exercise price (without
any change in the aggregate exercise price to be paid therefor) shall all be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock of the Company resulting from a split-up or consolidation
of shares or other similar capital adjustment, or the payment of any stock
dividend, or any other increase or decrease in the number of shares of Common
Stock of the Company without the Company's receipt (or release) of
consideration, proportionately equivalent to the added or eliminated shares. In
the event of any adjustment in the number of such securities, any fractional
shares of Common Stock resulting from the adjustment shall be disregarded.
SECTION 8. AMENDMENT AND TERMINATION
The Board may at any time suspend, amend or terminate this Plan;
provided, however, to the extent required for compliance with any applicable law
or regulation, shareholder approval will be required for any amendment that will
(a) increase the total number of shares as to which options may be granted under
this Plan,
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(b) modify the class of persons eligible to receive options, or (c) otherwise
require shareholder approval under any applicable law or regulation. No option
may be granted after such termination, or during any suspension of this Plan. No
incentive stock option may be granted more than ten years after this Plan's
adoption by the Board. The amendment or termination of this Plan shall not,
without the consent of the Optionee, alter or impair any options or obligations
under any option previously granted under this Plan.
SECTION 9. GOVERNING LAW
The provisions of this Plan shall be construed and interpreted according
to the laws of the State of Washington, without regard to its conflicts of laws
principles.
SECTION 10. VALIDITY
In case any provision of this Plan is deemed illegal or invalid for any
reason, the illegal or invalid portion shall not affect the remaining parts of
this Plan, and this Plan shall be construed and enforced as if the illegal or
invalid provision had never been inserted.
SECTION 11. TAXES AND WITHHOLDING
The Company may withhold from any payment under this Plan or require the
Optionee to pay in cash any and all employment and income taxes that are
required to be withheld under applicable law. Subject to this Plan and
applicable law, the Plan Administrator may, in its sole discretion, permit the
Optionee to satisfy withholding obligations, in whole or in part, by paying
cash, by electing to have the Company withhold shares of Common Stock or by
transferring shares of Common Stock to the Company, in such amounts as are
equivalent to the fair market value of the withholding obligation. The Company
shall have the right to withhold from any shares of Common Stock issuable
pursuant to an option or from any cash amounts otherwise due or to become due
from the Company to the Optionee an amount equal to such taxes. The Company may
also deduct from any option any other amounts due from the Optionee to the
Company or a Subsidiary.
SECTION 12. LOANS, INSTALLMENT PAYMENTS AND LOAN GUARANTEES
To assist an Optionee (including an Optionee who is an officer or
director of the Company) in acquiring shares of Common Stock pursuant to an
option granted under this Plan, the Plan Administrator, in its sole discretion,
may authorize, either at the grant date or at any time before the acquisition of
Common Stock pursuant to the option, (a) the extension of a loan to the Optionee
by the Company, (b) the payment by the Optionee of the purchase price, if any,
of the Common Stock in installments, or (c) the guarantee by the Company of a
loan obtained by the Optionee from a third party. The terms of any loans,
installment payments or loan guarantees, including the interest rate and terms
of repayment, will be subject to the Plan Administrator's discretion. Loans,
installment payments and loan guarantees may be granted with or without
security. The maximum credit available is the purchase price, if any, of the
Common Stock acquired, plus the maximum federal and state income and employment
tax liability that may be incurred in connection with the acquisition.
SECTION 13. FIRST REFUSAL AND PUT RIGHTS; MARKET STAND-OFF
13.1 FIRST REFUSAL RIGHTS
Until the date on which the initial registration of the Common Stock
under Section 12(b) or 12(g) of the Exchange Act first becomes effective, the
Company shall have the right of first refusal with respect to any proposed sale
or other disposition by the holder of any shares of Common Stock issued pursuant
to an option granted under this Plan. Such right of first refusal shall be
exercisable in accordance with the terms and conditions established by the Plan
Administrator and set forth in the Stock Purchase Agreement evidencing such
right.
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13.2 PUT RIGHTS
Until the date on which the initial registration of the Common Stock
under Section 12(b) or 12(g) of the Exchange Act first becomes effective, the
shares of Common Stock issued pursuant to the exercise of an option shall be
entitled to certain put rights by the Optionee to compel the purchase of the
shares by the Company pursuant to the terms and conditions established by the
Plan Administrator and set forth in the Stock Purchase Agreement.
13.3 MARKET STAND-OFF
In connection with any underwritten public offering by the Company of
its equity securities pursuant to an effective registration statement filed
under the Securities Act of 1933, as amended (the "Securities Act"), including
the Company's initial public offering, a person shall not sell, or make any
short sale of, loan, hypothecate, pledge, grant any option for the purchase of,
or otherwise dispose or transfer for value or otherwise agree to engage in any
of the foregoing transactions with respect to, any shares issued pursuant to an
option granted under this Plan without the prior written consent of the Company
or its underwriters. Such limitations shall be subject to the terms and
conditions established by the Plan Administrator and set forth in the Stock
Purchase Agreement.
SECTION 14. REGISTRATION
The Company shall be under no obligation to any Optionee to register for
offering or resale or to qualify for exemption under the Securities Act, or to
register or qualify under state securities laws, any shares of Common Stock,
security or interest in a security paid or issued under, or created by, this
Plan, or to continue in effect any such registrations or qualifications if made.
The Company may issue certificates for shares with such legends and subject to
such restrictions on transfer and stop-transfer instructions as counsel for the
Company deems necessary or desirable for compliance by the Company with federal
and state securities laws.
Inability of the Company to obtain, from any regulatory body having
jurisdiction, the authority deemed by the Company's counsel to be necessary for
the lawful issuance and sale of any shares hereunder or the unavailability of an
exemption from registration for the issuance and sale of any shares hereunder
shall relieve the Company of any liability in respect of the nonissuance or sale
of such shares as to which such requisite authority shall not have been
obtained.
As a condition to the exercise of an option, the Company may require the
Optionee to represent and warrant at the time of any such exercise or receipt
that such shares are being purchased or received only for the Optionee's own
account and without any present intention to sell or distribute such shares if,
in the opinion of counsel for the Company, such a representation is required by
any relevant provision of the aforementioned laws. At the option of the Company,
a stop-transfer order against any such shares may be placed on the official
stock books and records of the Company, and a legend indicating that such shares
may not be pledged, sold or otherwise transferred, unless an opinion of counsel
is provided (concurred in by counsel for the Company) stating that such transfer
is not in violation of any applicable law or regulation, may be stamped on stock
certificates to ensure exemption from registration. The Plan Administrator may
also require such other action or agreement by the Optionee as may from time to
time be necessary to comply with the federal and state securities laws.
SECTION 15. CALIFORNIA RESIDENTS
Persons who are residents of the State of California shall be subject to
the additional terms and conditions set forth in Appendix A to the Plan. (Added
1/10/97)
SECTION 16. EFFECTIVENESS OF THIS PLAN
This Plan shall become effective upon adoption by the Board, so long as
it is approved by the Company's shareholders at any time within 12 months of
such adoption. (Renumbered 8/6/97)
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Approved by the Board on June 23, 1997.
Approved by the shareholder on January 5, 1998.
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NEXTEL INTERNATIONAL, INC.
APPENDIX A
TO
1997 STOCK OPTION PLAN
FOR CALIFORNIA RESIDENTS
This Appendix to the Nextel International, Inc. 1997 Stock Option Plan
(the "Plan") shall have application only to optionees who are residents of the
State of California. NOTWITHSTANDING ANY PROVISION CONTAINED IN THE PLAN TO THE
CONTRARY, THE FOLLOWING TERMS AND CONDITIONS SHALL APPLY TO ANY OPTIONS GRANTED
UNDER THE PLAN TO RESIDENTS OF THE STATE OF CALIFORNIA, TO THE EXTENT STATED
ABOVE AND REQUIRED BY APPLICABLE LAW:
1. Nonqualified stock options shall have an exercise price that is not
less than 85% of the fair value of the stock at the time the option is granted,
as determined by the Board, except that the exercise price shall be 110% of the
fair value in the case of any person who owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company or its
parent or subsidiary corporations.
2. Options shall have a term of not more than 10 years from the date the
option is granted.
3. Options shall be nontransferable other than by will or the laws of
descent and distribution.
4. Options shall become exercisable at the rate of at least 20% per year
over 5 years from the date the option is granted, subject to reasonable
conditions such as continued employment. However, in the case of an option
granted to officers, directors or consultants of the Company or any of its
affiliates, the option may become fully exercisable, subject to reasonable
conditions such as continued employment, at any time or during any period
established by the Company or any of its affiliates.
5. Unless employment is terminated for "cause" as defined by the Plan,
the right to exercise an option in the event of termination of employment, to
the extent that the optionee is otherwise entitled to exercise on the date
employment terminates, shall be:
a. at least 6 months from the date of termination of employment
if termination was caused by death or disability; and
b. at least 30 days from the date of termination if termination
of employment was caused by other than death or disability;
c. but in no event later than the remaining term of the option.
6. No option may be granted to a resident of California more than ten
years after the earlier of the date of adoption of the Plan and the date the
Plan is approved by the shareholders.
7. Any option exercised before shareholder approval is obtained shall be
rescinded if shareholder approval is not obtained within 12 months before or
after the Plan is adopted. Such shares shall not be counted in determining
whether such approval is obtained.
8. The Company shall provide annual financial statements of the Company
to each California resident holding an outstanding option under the Plan. Such
financial statements need not be audited and
<PAGE> 13
need not be issued to key employees whose duties at the Company assure them
access to equivalent information.
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