<PAGE>
As filed with the Securities and Exchange Commission on November 22, 1999
REGISTRATION STATEMENT NO. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
_____________________________
ALBANY MOLECULAR RESEARCH, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 14-1742717
(State of Incorporation) (I.R.S. Employer
Identification No.)
21 Corporate Circle
Albany, New York 12203
(518) 464-0279
(Address of Principal Executive Offices)
ALBANY MOLECULAR RESEARCH, INC. AMENDED AND RESTATED 1992 STOCK OPTION PLAN
ENZYMED, INC. 1994 STOCK OPTION PLAN
(Full Titles of the Plans)
------------------------------------
THOMAS E. D'AMBRA, PH.D.
Chairman and Chief Executive Officer
Albany Molecular Research, Inc.
21 Corporate Circle
Albany, New York 12203
(518) 464-0279
(Name, Address and Telephone Number, Including Area Code, of Agent For Service)
____________________________
Copy to:
STUART M. CABLE, P.C.
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109
(617) 570-1000
____________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===========================================================================================================
Title of Securities Being Amount to Be Proposed Maximum Proposed Maximum Amount of
Registered Registered (1) Offering Price Per Aggregate Offering Registration Fee
Share Price(3)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value 875,000 (2) $27.94 (4) $26,672,837 (4) $7,415.05
$.01 per share 79,647(3)
===========================================================================================================
</TABLE>
(1) Plus such additional number of shares as may be issued in the event of a
stock dividend, reverse stock split, split-up, recapitalization, or other
similar event.
(2) This Registration Statement relates to 875,000 shares of Albany Molecular
Research, Inc. (the "Registrant") Common Stock that may be issued upon the
exercise of options issued under the Albany Molecular Research, Inc.
Amended and Restated 1992 Stock Option Plan.
(3) This Registration Statement relates to 79,647 shares of the Registrant's
Common Stock that may be issued upon the exercise of options issued under
the EnzyMed, Inc. 1994 Stock Option Plan, which was assumed by the
Registrant upon consummation of the merger of EnzyMed, Inc. with and into
the Registrant, with the Registrant as the surviving corporation, on
October 19, 1999.
(4) This estimate is based on the average of the high and low prices for the
Common Stock as reported on the Nasdaq National Market on November 16, 1999
pursuant to Rule 457(c) and (h) under the Securities Act of 1933, as
amended, solely for purposes of determining the amount of the registration
fee.
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
---------------------------------------
Albany Molecular Research, Inc. (the "Registrant") hereby incorporates
by reference the documents listed in (a) through (c) below, which have
previously been filed with the Securities and Exchange Commission (the
"Commission"):
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998, as filed with the Commission on March 31,
1999;
(b) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1999, as filed with the Commission on May
14, 1999;
(c) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1999, as filed with the Commission on
August 16, 1999
(d) The Registrant's Current Report on Form 8-K, as filed with the
Commission on November 2, 1999
(e) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 1999, as filed with the Commission on
November 15, 1999; and
(f) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A, as filed with the
Commission on January 29, 1999 under Section 12 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), including
any amendments or reports filed for the purpose of updating such
description.
In addition, all documents subsequently filed with the Commission by
the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act prior to the filing of a post-effective amendment which indicates that all
securities offered hereunder have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes hereof to the
extent that a statement contained herein or in any subsequently filed document
which is also incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. Description of Securities.
--------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
--------------------------------------
Not applicable.
II-1
<PAGE>
Item 6. Indemnification of Directors and Officers.
-----------------------------------------
In accordance with Section 145 of the General Corporation Law of the
State of Delaware, Article VII of the Registrant's Restated Certificate of
Incorporation (the "Certificate") provides that no director of the Registrant
shall be personally liable to the Registrant or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability (i) for
any breach of the director's duty of loyalty to the Registrant or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) in respect of
certain unlawful dividend payments or stock redemptions or repurchases, or (iv)
for any transaction from which the director derived an improper personal
benefit. In addition, the Certificate provides that if the Delaware General
Corporation Law is amended to authorize the further elimination or limitation of
the liability of directors, then the liability of a director of the Registrant
shall be eliminated or limited to the fullest extent permitted by the Delaware
General Corporation Law, as so amended.
Article V of the Registrant's Amended and Restated By-laws (the "By-
laws") provides that the Registrant shall indemnify its directors, officers and,
in the discretion of the Board of Directors, certain non-officer employees under
certain circumstances against expenses (including attorneys' fees, judgments,
fines and amounts paid in settlement) reasonably incurred in connection with the
defense or settlement of any threatened, pending or completed legal proceeding
in which any such person is involved by reason of the fact that such person is
or was a director, officer or employee of the Registrant if such person acted in
good faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of the Registrant, and, with respect to criminal actions
or proceedings, if such person had no reasonable cause to believe his or her
conduct was unlawful. Article V of the By-laws requires the advancement of
expenses to directors in proceedings involving such directors in most
circumstances and, at the discretion of the Board of Directors, allows the
advancement of expenses to officers or non-officer employees in proceedings
involving such officers or non-officer employees.
The Registrant has entered into indemnification agreements with its
directors reflecting the provisions of the By-laws.
Item 7. Exemption from Registration Claimed.
-----------------------------------
Not applicable.
Item 8. Exhibits.
--------
The following is a complete list of exhibits filed or incorporated by
reference as part of this Registration Statement.
II-2
<PAGE>
Exhibit
-------
4.1 Restated Certificate of Incorporation of the Registrant
(incorporated herein by reference to Exhibit 3.2 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 (File No. 000-25323)).
4.2 Amended and Restated By-laws of the Registrant (incorporated
herein by reference to Exhibit 3.1 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1998
(File No. 000-25323)).
*5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
securities being registered.
*23.1 Consent of KPMG LLP.
23.2 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit 5.1
hereto).
24.1 Powers of Attorney (included on signature page).
99.1 Albany Molecular Research, Inc. Amended and Restated 1992 Stock
Option Plan (incorporated herein by reference to Exhibit 10.3 to
Amendment No. 5 to the Registrant's Registration Statement on
Form S-1 (Registration No. 333-58795)).
*99.2 EnzyMed, Inc. 1994 Stock Option Plan.
_________________
*Filed herewith
Item 9. Undertakings.
------------
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would
not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
II-3
<PAGE>
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) herein do
-------- -------
not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the undersigned
registrant pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 Act, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-4
<PAGE>
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 Albany, the State of New York, on this 22nd day of
November, 1999.
ALBANY MOLECULAR RESEARCH, INC.
By: /s/ Thomas E. D'Ambra, Ph.D.
-------------------------------
Thomas E. D'Ambra, Ph.D.
Chairman and Chief Executive
Officer
KNOWN ALL MEN BY THESE PRESENT that each individual whose signature
appears below constitutes and appoints each of Thomas E. D'Ambra, Ph.D. and
Donald E. Kuhla, Ph.D. such person's true and lawful attorney-in-fact and agent
with full power of substitution and resubstitution for such person and in such
person's name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and all documents in connection
therewith, with the Securities and Exchange Commission, granting unto each said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as such person might or could do
in person, hereby ratifying and confirming all that any said attorney-in-fact
and agent, or any substitute or substitutes of any of them, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Thomas E. D'Ambra, Ph.D. Chairman of the Board, Chief Executive November 22, 1999
- -------------------------------
Thomas E. D'Ambra, Ph.D. Officer and Director (Principal Executive
Officer)
/s/ Donald E. Kuhla, Ph.D. President, Chief Operating Officer, November 22, 1999
- -------------------------------
Donald E. Kuhla, Ph.D. Secretary and Director
/s/ David P. Waldek Chief Financial Officer and November 22, 1999
- -------------------------------
David P. Waldek Treasurer (Principal Financial
Officer)
/s/ Chester J. Opalka Vice President, Director of Laboratory November 22, 1999
- -------------------------------
Chester J. Opalka Operations and Director
/s/ Anthony P. Tartaglia, M.D. Director November 22, 1999
- -------------------------------
Anthony P. Tartaglia, M.D.
/s/ Frank W. Haydu III Director November 22, 1999
- -------------------------------
Frank W. Haydu III
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page
- ---------- ----------- ----
4.1 Restated Certificate of Incorporation of the Registrant
(incorporated herein by reference to Exhibit 3.2 to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998 (File No. 000-25323)).
4.2 Amended and Restated By-laws of the Registrant (incorporated
herein by reference to Exhibit 3.1 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31,
1998 (File No. 000-25323)).
*5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of
the securities being registered.
*23.1 Consent of KPMG LLP.
23.2 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit
5.1 hereto).
24.1 Powers of Attorney (included on signature page).
99.1 Albany Molecular Research, Inc. Amended and Restated 1992
Stock Option Plan (incorporated herein by reference to
Exhibit 10.3 to Amendment No. 5 to the Registrant's
Registration Statement on Form S-1 (Registration No. 333-
58795)).
*99.2 EnzyMed, Inc. 1994 Stock Option Plan.
_________________
*Filed herewith
<PAGE>
EXHIBIT 5.1
GOODWIN, PROCTER & HOAR LLP
Counsellors at Law
Exchange Place
Boston, Massachusetts 02109-2881
November 22, 1999
Albany Molecular Research, Inc.
21 Corporate Circle
Albany, New York 12203
Re: Registration Statement on Form S-8
----------------------------------
Ladies and Gentlemen:
This opinion is delivered in our capacity as counsel to Albany Molecular
Research, Inc., a Delaware corporation (the "Company"), in connection with the
preparation and filing with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Securities Act"), of a Registration
Statement on Form S-8 (the "Registration Statement") relating to (i) 875,000
shares (the "Option Shares") of the Company's common stock, par value $.01 per
share ("Common Stock"), which the Company may issue pursuant to the Albany
Molecular Research, Inc. Amended and Restated 1992 Stock Option Plan (the "1992
Plan"), and (ii) 79,647 shares (together with the Option Shares, the "Shares")
of Common Stock which the Company may issue pursuant to the EnzyMed, Inc. 1994
Stock Option Plan (the "1994 Plan," and together with the 1992 Plan, the
"Plans").
As counsel for the Company, we have examined copies of the Plans, the
Company's Restated Certificate of Incorporation and Amended and Restated By-
laws, each as presently in effect, and such records, certificates and other
documents of the Company as we have deemed necessary or appropriate for the
purposes of this opinion.
We are attorneys admitted to practice in The Commonwealth of Massachusetts.
We express no opinion concerning the laws of any jurisdictions other than the
laws of the United States of America, The Commonwealth of Massachusetts and the
State of Delaware.
Based on the foregoing, we are of the opinion that upon the issuance and
delivery of the Shares against payment therefor in accordance with the terms of
the 1992 Plan or the 1994 Plan, as the case may be, the Shares will be validly
issued, fully paid and non-assessable shares of the Company's Common Stock.
The foregoing assumes all requisite steps will be taken to comply with the
requirements of the Securities Act and applicable requirements of state laws
regulating the offer and sale of securities.
We hereby consent to the inclusion of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Goodwin, Procter & Hoar LLP
GOODWIN, PROCTER & HOAR LLP
<PAGE>
EXHIBIT 23.1
ACCOUNTANTS' CONSENT
The Board of Directors
Albany Molecular Research, Inc.:
We consent to incorporation by reference in the Registration Statement on Form
S-8 of Albany Molecular Research, Inc. (relating to the Albany Molecular
Research, Inc. Amended and Restated 1992 Stock Option Plan and the EnzyMed, Inc.
1994 Stock Option Plan) of our report dated March 19, 1999 relating to the
consolidated balance sheets of Albany Molecular Research, Inc. and subsidiary as
of December 31, 1998 and 1997, and the related consolidated statements of
operations, stockholders' equity and cash flows for each of the years in the
three-year period ended December 31, 1998, which report appears in the December
31, 1998 Annual Report on Form 10-K of Albany Molecular Research, Inc.
/s/ KPMG LLP
Albany, New York
November 17, 1999
<PAGE>
EXHIBIT 99.2
ENZYMED, INC.
1994 STOCK OPTION PLAN
----------------------
I. PURPOSES OF THE PLAN
This 1994 Stock Option Plan is intended to promote the interests of
EnzyMed, Inc., a Delaware corporation, by providing a method whereby eligible
individuals who provide valuable services to the Corporation (or any Parent or
Subsidiary) may be offered incentives and rewards which will encourage them to
acquire a proprietary interest, or otherwise increase their proprietary
interest, in the Corporation and continue to render services to the Corporation
(or any Parent or Subsidiary).
II. DEFINITIONS
For the purposes of this Plan, the following definitions shall
be in effect:
A. Board shall mean the Corporation's Board of Directors.
-----
B. Code shall mean the Internal Revenue Code of 1986, as
----
amended.
C. Committee shall mean a committee of two (2) or more Board
---------
members appointed by the Board to exercise one or more administrative functions
under the Plan.
D. Common Stock shall mean the Corporation's common stock.
------------
E. Corporate Transaction shall mean either of the following
---------------------
shareholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which more than fifty percent
(50%) of the Corporation's outstanding voting stock is transferred to a
person or persons different from those who held the stock immediately prior
to such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation or
dissolution of the Corporation.
F. Corporation shall mean EnzyMed, Inc., a Delaware
-----------
corporation.
-1-
<PAGE>
G. Employee shall mean an individual who is in the employ of
--------
the Corporation or any Parent or Subsidiary, subject to the control and
direction of the employer entity as to both the work to be performed and the
manner and method of performance.
H. Exchange Act shall mean the Securities Exchange Act of 1934,
------------
as amended.
I. Exercise Date shall mean the date on which the Corporation
-------------
shall have received written notice of the option exercise.
J. Fair Market Value per share of Common Stock on any relevant
-----------------
date under the Plan shall be the value determined in accordance with the
following provisions:
(i) If the Common Stock is not at the time listed or
admitted to trading on any Stock Exchange but is traded on
the NASDAQ National Market System, the Fair Market Value
shall be the mean between the highest bid and lowest asked
prices (or, if such information is available the closing
selling price) per share of Common Stock on the date in
question, as such prices are reported by the National
Association of Securities Dealers through the NASDAQ
National Market System or any successor system. If there is
no reported bid and asked prices (or closing selling price)
for the Common Stock on the date in question, then the Fair
Market Value shall be the mean between the highest bid price
and lowest asked price (or the closing selling price) on the
last preceding date for which such quotations exist.
(ii) If the Common Stock is at the time listed or
admitted to trading on any Stock Exchange, then the Fair
Market Value shall be the closing selling price per share of
Common Stock on the date in question on the Stock Exchange
determined by the Plan Administrator to be the primary
market for the Common Stock, as such price is officially
quoted in the composite tape of transactions on such
exchange. If there is no closing selling price for the
Common Stock on the date in question, then the Fair Market
Value shall be the closing selling price on the last
preceding date for which such quotations exist.
(iii) If the Common Stock is at the time neither
listed nor admitted to trading on any Stock Exchange nor
traded on the NASDAQ National Market System, then such Fair
Market Value shall be determined by the Plan Administrator
after taking into account such factors as the Plan
Administrator shall deem appropriate.
-2-
<PAGE>
K. Incentive Option shall mean a stock option which satisfies
----------------
the requirements of Code Section 422.
L. Non-Statutory Option shall mean a stock option not intended
--------------------
to meet the requirements of Code Section 422.
M. Parent shall mean any corporation (other than the
------
Corporation) in an unbroken chain of corporations ending with the Corporation,
provided each corporation in the unbroken chain (other than the Corporation)
owns, at the time of the determination, stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
N. Permanent Disability shall have the meaning assigned to
--------------------
such term in Code Section 22(e)(3).
O. Plan shall mean the Corporation's 1994 Stock Option Plan,
----
as set forth in this document.
P. Plan Administrator shall mean either the Board or the
------------------
Committee, to the extent the Committee is at the time responsible for the
administration of the Plan in accordance with Article III.
Q. Service shall mean the provision of services to the
-------
Corporation or any Parent or Subsidiary by an individual in the capacity of an
Employee, a non-employee member of the board of directors or a consultant or
independent contractor.
R. Stock Exchange shall mean either the American Stock
--------------
Exchange or the New York Stock Exchange.
S. Subsidiary shall mean each corporation (other than the
----------
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each such corporation (other than the last corporation) in
the unbroken chain owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
T. 10% Shareholder shall mean the owner of stock (as determined
---------------
under Code Section 424(d)) possessing ten percent (10%) or more of the total
combined voting power of all classes of stock of the Corporation.
III. ADMINISTRATION OF THE PLAN
-3-
<PAGE>
A. The Plan shall be administered by the Board. However, any or all
administrative functions otherwise exercisable by the Board may be delegated to
the Committee. Members of the Committee shall serve for such period of time as
the Board may determine and shall be subject to removal by the Board at any
time. The Board may also at any time terminate the functions of the Committee
and reassume all powers and authority previously delegated to the Committee.
B. The Plan Administrator shall have full power and authority
(subject to the provisions of the Plan) to establish such rules and regulations
as it may deem appropriate for proper administration of the Plan and to make
such determinations under, and issue such interpretations of, the Plan and any
outstanding options as it may deem necessary or advisable. Decisions of the
Plan Administrator shall be final and binding on all parties who have an
interest in the Plan or any outstanding option.
IV. ELIGIBILITY FOR OPTION GRANTS
A. The persons eligible to receive option grants under the Plan
are as follows:
(i) Employees;
(ii) non-employee members of the Board or the non-employee members
of the board of directors of any Parent or Subsidiary; and
(iii) consultants and other independent contractors who provide
valuable services to the Corporation (or any Parent or Subsidiary).
B. The Plan Administrator shall have full authority to determine
which eligible individuals are to receive option grants under the Plan, the
number of shares to be covered by each such grant, the status of the granted
option as either an Incentive Option or a Non-Statutory Option, the time or
times at which each option is to become exercisable, the vesting schedule (if
any) applicable to the option shares and the maximum term for which the option
is to remain outstanding.
V. STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares of the
Corporation's authorized but unissued or reacquired Common Stock. The maximum
number of shares which may be issued over the term of the Plan shall not exceed
1,000,000 shares, subject to adjustment from time to time in accordance with the
provisions of this Article V.
-4-
<PAGE>
B. Shares subject to outstanding options shall be available for
subsequent option grants under the Plan to the extent (i) the options expire or
terminate for any reason prior to exercise in full or (ii) the options are
cancelled in accordance with the cancellation-re grant provisions of Article IX
of the Plan. All shares issued under the Plan, whether or not those shares are
subsequently repurchased by the Corporation pursuant to its repurchase rights
under the Plan, shall reduce on a share-for-share basis the number of shares of
Common Stock available for subsequent option grants.
C. In the event any change is made to the Common Stock issuable
under the Plan by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the maximum number
and/or class of securities issuable under the Plan and (ii) the number and/or
class of securities and the exercise price per share in effect under each
outstanding option in order to prevent the dilution or enlargement of benefits
thereunder. The adjustments determined by the Plan Administrator shall be final,
binding and conclusive.
VI. TERMS AND CONDITIONS OF OPTIONS
Options granted pursuant to the Plan shall be authorized by action of
the Plan Administrator and may, at the Plan Administrator's discretion, be
either Incentive Options or Non-Statutory Options. Each granted option shall be
evidenced by one or more instruments in the form approved by the Plan
Administrator, provided, however, that each such instrument shall comply
--------
with the terms and conditions specified below. Each instrument evidencing an
Incentive Option shall, in addition, be subject to the applicable provisions of
Article VII.
A. Exercise Price.
--------------
1. The exercise price per share shall be fixed by the Plan
Administrator. In no event, however, shall the exercise price per share be less
than eighty-five percent (85%) of the Fair Market Value per share of Common
Stock on the date of the option grant.
2. The exercise price shall become immediately due upon
exercise of the option and shall, subject to the provisions of Article X and the
agreement evidencing the grant, be payable in cash or check made payable to the
Corporation. Should the Corporation's outstanding Common Stock be registered
under Section 12(g) of the Exchange Act at the time the option is exercised,
then the exercise price may also be paid as follows:
(i) in shares of Common Stock held by the optionee for the requisite
period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the Exercise
Date; or
-5-
<PAGE>
(ii) through a special sale and remittance procedure pursuant to which
the optionee shall concurrently provide irrevocable written instructions (a)
to a Corporation-designated brokerage firm to effect the immediate sale of
the purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased shares plus all applicable Federal
and state income and employment taxes required to be withheld by the
Corporation by reason of such purchase and (b) to the Corporation to deliver
the certificates for the purchased shares directly to such brokerage firm in
order to complete the sale transaction.
Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.
B. Term and Exercise of Options. Each option granted under the
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Plan shall be exercisable at such time or times, during such period, and for
such number of shares as shall be determined by the Plan Administrator and set
forth in the stock option agreement. However, no option shall have a term in
excess of ten (10) years measured from the grant date. The option shall be
exercisable during the optionee's lifetime only by the optionee and shall not be
assignable or transferable other than by will or by the laws of descent and
distribution following the optionee's death.
C. Effect of Termination of Service.
--------------------------------
1. Except to the extent otherwise provided pursuant to
subsection C.2 below, the following provisions shall govern the exercise period
applicable to any options held by the optionee at the time of cessation of
Service or death:
(a) Should the optionee cease to remain in Service for any
reason other than death or Permanent Disability, then the period during which
each outstanding option held by such optionee is to remain exercisable shall be
limited to the three (3)-month period following the date of such cessation of
Service.
(b) Should such Service terminate by reason of Permanent
Disability, then the period during which each outstanding option held by the
optionee is to remain exercisable shall be limited to the twelve (12)-month
period following the date of such cessation of Service.
(c) Should the optionee die while holding one or more
outstanding options, then the period during which each such option is to remain
exercisable shall be limited to the twelve (12)-month period following the date
of the optionee's death. During such limited period, the option may be exercised
by the personal representative of the optionee's estate or by the
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person or persons to whom the option is transferred pursuant to the optionee's
will or in accordance with the laws of descent and distribution.
(d) Under no circumstances, however, shall any such option
be exercisable after the specified expiration date of the option term.
(e) During the applicable limited post-Service exercise
period, no option may be exercised in the aggregate for more than the number of
vested shares for which the option is exercisable on the date of the optionee's
cessation of Service. Upon the expiration of such limited exercise period or (if
earlier) upon the expiration of the option term, the option shall terminate and
cease to be exercisable for any vested shares for which the option has not been
exercised. However, the option shall, immediately upon the optionee's cessation
of Service, terminate and cease to be outstanding with respect to any option
shares for which the option is not at that time exercisable or in which the
optionee is not otherwise at that time vested.
2. The Plan Administrator shall have full power and authority
to extend the period of time for which the option is to remain exercisable
following the optionee's cessation of Service or death from the limited period
in effect under subsection C.1 of this Article VI to such greater period of time
as the Plan Administrator shall deem appropriate; provided, that in no event
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shall such option be exercisable after the specified expiration date of the
option term.
D. Shareholder Rights. An optionee shall have no shareholder
------------------
rights with respect to the shares subject to the option until such individual
shall have exercised the option and paid the exercise price.
E. Unvested Shares. The Plan Administrator shall have the
---------------
discretion to authorize the issuance of unvested shares of Common Stock under
the Plan. Should the optionee cease Service while holding such unvested shares,
the Corporation shall have the right to repurchase, at the exercise price paid
per share, all or (at the discretion of the Corporation and with the consent of
the optionee) any of those unvested shares. The terms and conditions upon which
such repurchase right shall be exercisable (including the period and procedure
for exercise and the appropriate vesting schedule for the purchased shares)
shall be established by the Plan Administrator and set forth in the agreement
evidencing such repurchase right. All outstanding repurchase rights under the
Plan shall terminate automatically upon the occurrence of any Corporate
Transaction, except to the extent the repurchase rights are expressly assigned
to the successor corporation (or parent thereof) in connection with the
Corporate Transaction.
F. First Refusal Rights. Until such time as the Corporation's
--------------------
outstanding shares of Common Stock are first registered under Section 12(g) of
the Exchange Act, the Corporation shall have the right of first refusal with
respect to any proposed sale or other disposition by the optionee (or any
successor in interest by reason of purchase, gift or other transfer) of any
shares of Common Stock issued under the Plan. Such right of first refusal shall
be exercisable in accordance
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with the terms and conditions established by the Plan Administrator and set
forth in the agreement evidencing such right.
VII. INCENTIVE OPTIONS
The terms and conditions specified below shall be applicable to all
Incentive Options granted under the Plan. Except as modified by the provisions
of this Article VII, all the provisions of the Plan shall be applicable to
Incentive Options. Incentive Options may only be granted to individuals who are
Employees. Options which are specifically designated as Non-Statutory shall not
---
be subject to such terms and conditions.
A. Exercise Price. The exercise price per share of the Common
--------------
Stock subject to an Incentive Option shall in no event be less than one hundred
percent (100%) of Fair Market Value on the date of grant. If the individual to
whom an Incentive Option is granted is a 10% Shareholder, then the exercise
price per share shall not be less than one hundred ten percent (110%) of the
Fair Market Value per share of Common Stock on the grant date.
B. Dollar Limitation. The aggregate Fair Market Value of the
-----------------
Common Stock (determined as of the respective date or dates of grant) for which
one (1)or more options granted to any Employee under this Plan (or any other
option plan of the Corporation or any Parent or Subsidiary) may for the first
time become exercisable as Incentive Options during any one (1) calendar year
shall not exceed the sum of One Hundred Thousand Dollars ($100,000). To the
extent the Employee holds two (2) or more such options which become exercisable
for the first time in the same calendar year, the foregoing limitation on the
exercisability of such options as Incentive Options shall be applied on the
basis of the order in which such options are granted. Should the applicable One
Hundred Thousand Dollar ($100,000) limitation in fact be exceeded in any
calendar year, then the option shall nevertheless become exercisable for the
excess number of shares in such calendar year as a Non-Statutory Option.
C. 10% Shareholder. If any individual to whom an Incentive Option
---------------
is granted is a 10% Shareholder, then the option term shall not exceed five (5)
years measured from the grant date.
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<PAGE>
VIII. CORPORATE TRANSACTION
A. Upon the occurrence of a Corporate Transaction, the
exercisability of each option outstanding under the Plan shall automatically
accelerate so that each such option shall, immediately prior to the specified
effective date for the Corporate Transaction, become fully exercisable with
respect to the total number of shares of Common Stock at the time subject to
such option and may be exercised for all or any portion of such shares. However,
an outstanding option shall not so accelerate if and to the extent: (i) such
option is, in connection with the Corporate Transaction, to be assumed by the
successor corporation or parent thereof or replaced with a comparable option to
purchase shares of the capital stock of the successor corporation or parent
thereof, (ii) such option is to be replaced by a comparable cash incentive
program of the successor corporation based on the option spread at the time of
the Corporate Transaction, or (iii) the acceleration of such option is subject
to other limitations imposed by the Plan Administrator at the time of grant. The
determination of comparability under clause (i) or (ii) above shall be made by
the Plan Administrator, and its determination shall be final, binding and
conclusive.
B. Each outstanding option which is assumed in connection with a
Corporate Transaction or is otherwise to remain outstanding shall be
appropriately adjusted, immediately after such Corporate Transaction, to apply
and pertain to the number and class of securities which would have been issuable
to the optionee in the consummation of such Corporate Transaction, had the
option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments shall also be made to (i) the exercise price payable per
share, provided the aggregate exercise price payable for such securities shall
--------
remain the same, and (ii) the class and number of securities available for
issuance under the Plan following the consummation of such Corporate
Transaction.
C. The grant of options under this Plan shall in no way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.
IX. CANCELLATION AND RE GRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any time
and from time to time, with the consent of the affected option holders, the
cancellation of any or all outstanding options under the Plan and to grant in
substitution therefor new options under the Plan covering the same or different
numbers of shares of Common Stock but with an exercise price per share not less
than (i) one hundred percent (100%) of the Fair Market Value per share of Common
Stock on the new grant date in the case of a grant of an Incentive Option, (ii)
one hundred ten percent (110%) of such Fair Market Value in the case of an
Incentive Option grant to a 10% Shareholder or (iii) eighty-five percent (85%)
of such Fair Market Value in the case of all other grants.
X. LOANS
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A. The Plan Administrator may assist any optionee in the exercise of
one or more options granted to the optionee by:
(i) authorizing the extension of a loan from the Corporation to the
optionee, or
(ii) permitting the optionee to pay the exercise price in installments
over a period of years.
B. The terms of any loan or installment method of payment (including
the interest rate and terms of repayment) shall be established by the Plan
Administrator in its sole discretion. Loans or installment payments may be
authorized with or without security or collateral. However, any loan made to a
consultant or other non-employee advisor must be secured by property other than
the purchased shares of Common Stock. In all events, the maximum credit
available to each optionee may not exceed the sum of (i) the aggregate exercise
---
price payable for the purchased shares plus (ii) any Federal and state income
and employment tax liability incurred by the optionee in connection with such
exercise.
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<PAGE>
C. The Plan Administrator may, in its absolute discretion, determine
that one or more loans extended under this Article X shall be subject to
forgiveness by the Corporation in whole or in part upon such terms and
conditions as the Plan Administrator may in its discretion deem appropriate.
XI. NO EMPLOYMENT OR SERVICE RIGHTS
Nothing in the Plan shall confer upon the optionee any right to
continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation (or any Parent or
Subsidiary) or of the optionee, which rights are hereby expressly reserved by
each, to terminate the optionee's Service at any time for any reason, with or
without cause.
XII. AMENDMENT OF THE PLAN
A. The Board shall have complete and exclusive power and authority
to amend or modify the Plan in any or all respects whatsoever. However, no such
amendment or modification shall, without the consent of the holders, adversely
affect their rights and obligations under their outstanding options. In
addition, the Board shall not, without the approval of the Corporation's
shareholders, (i) increase the maximum number of shares issuable under the Plan,
except for permissible adjustments under Article V, (ii) materially modify the
eligibility requirements for option grants or (iii) otherwise materially
increase the benefits accruing to option holders.
B. Options may be granted under this Plan to purchase shares of
Common Stock in excess of the number of shares then available for issuance under
the Plan, provided an amendment sufficiently increasing the number of shares of
--------
Common Stock available for issuance under the Plan is approved by the
Corporation's shareholders within twelve (12) months after the date the excess
grants are first made.
XIII. EFFECTIVE DATE AND TERM OF PLAN
A. The Plan shall become effective when adopted by the Board, but no
option granted under the Plan shall become exercisable unless and until the Plan
shall have been approved by the Corporation's shareholders. If such shareholder
approval is not obtained within twelve (12) months after the date of the Board's
adoption of the Plan, then all options previously granted under the Plan shall
terminate and no further options shall be granted. Subject to such limitation,
the Plan Administrator may grant options under the Plan at any time after the
effective date and before the date fixed herein for termination of the Plan.
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<PAGE>
B. Unless sooner terminated in accordance with Article VIII, the Plan
shall terminate upon the earlier of (i) the expiration of the ten (10) year
-------
period measured from the date the Plan is adopted by the Board or (ii) the date
on which all shares available for issuance under the Plan shall have been issued
pursuant to the exercise of options granted under the Plan. Upon such plan
termination, each option and unvested share issuance outstanding under the Plan
shall continue to have force and effect in accordance with the provisions of the
agreements evidencing that option or share issuance.
XIV. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares
pursuant to options granted under the Plan shall be used for general corporate
purposes.
XV. WITHHOLDING
The Corporation's obligation to deliver shares upon the exercise of
any options granted under the Plan shall be subject to the satisfaction by the
optionee of all applicable Federal and state income and employment tax
withholding requirements.
XVI. REGULATORY APPROVALS
The implementation of the Plan, the granting of any option hereunder,
and the issuance of Common Stock upon the exercise of any option shall be
subject to the Corporation's procurement of all approvals and permits required
by regulatory authorities having jurisdiction over the Plan, the options granted
under it and the Common Stock issued pursuant to it.
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