<PAGE>
As filed with the Securities and Exchange Commission on January 13, 2000
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------
TiVo Inc.
(Exact name of registrant as specified in its charter)
-----------------------------
Delaware 77-0463167
(State of Incorporation) (I.R.S. Employer Identification No.)
-----------------------------
TiVo Inc.
894 Ross Drive, Suite 100
Sunnyvale, CA 94089
(408) 747-5080
(Address and telephone number of principal executive offices)
-----------------------------
Amended and Restated 1997 Equity Incentive Plan
1999 Equity Incentive Plan
1999 Non-Employee Directors' Stock Option Plan
1999 Employee Stock Purchase Plan
Shares Issuable Upon Exercise of Outstanding Stock Option
Granted Outside of the Stock Option Plans
(Full title of the plans)
Michael Ramsay
President and Chief Executive Officer
TiVo Inc.
894 Ross Drive, Suite 100
Sunnyvale, CA 94089
(408) 747-5080
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------------------
Copies to:
Alan C. Mendelson, Esq.
Cooley Godward LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306-2155
(650) 843-5000
----------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Title of Securities to be Amount to be Proposed Maximum Proposed Maximum Amount of
Registered Registered Offering Price Per Share (1) Aggregate Offering Price (1) Registration Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stock Options and Common Stock 6,273,153 $.608 - $37.03 $99,492,614.28 $26,266.05
($.001 par value)
====================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(c) and (h)(1) under the Securities Act of
1933, as amended (the "Securities Act"). The offering price per share and
aggregate offering price are based upon (a) the weighted average exercise price
for shares subject to outstanding options granted by TiVo Inc. (the
"Registrant") under (i) the Registrant's Amended and Restated 1997 Equity
Incentive Plan, (ii) the Registrant's 1999 Equity Incentive Plan, (iii) the
Registrant's 1999 Non-Employee Directors' Stock Option Plan, (iv) the
Registrant's 1999 Employee Stock Purchase Plan, and (v) a stock option granted
outside of the Registrant's stock option plans, or (b) the average of the high
and low prices of the Registrant's Common Stock as reported on the Nasdaq Stock
Market for January 6, 2000 (pursuant to Rule 457(c) under the Securities Act),
for shares reserved for future grant pursuant to (i) the Registrant's Amended
and Restated 1997 Equity Incentive Plan, (ii) the Registrant's 1999 Equity
Incentive Plan, (iii) the Registrant's 1999 Non-Employee Directors' Stock Option
Plan and (iv) the Registrant's 1999 Employee Stock Purchase Plan.
<PAGE>
NOTES TO CALCULATION OF REGISTRATION FEE
===============================================================================
The chart below details the calculations of the registration fee:
<TABLE>
<CAPTION>
Type of Shares Number of Shares Offering Price Per Share Aggregate Offering Price
- ------------------------------------------- ---------------- ---------------------------- ------------------------
<S> <C> <C> <C>
Shares issuable pursuant to outstanding 1,015,982 $ .486 (1)(a)(i) $ 494,164.50
options and awards granted under the
Amended and Restated 1997 Equity
Incentive Plan
Shares reserved for future issuance 140,027 $37.03 (1)(b)(i) $ 5,185,199.81
pursuant to the Amended and Restated 1997
Equity Incentive Plan
Shares issuable pursuant to outstanding 3,215,364 $9.346 (1)(a)(ii) $30,050,601.25
options and awards granted under the 1999
Equity Incentive Plan
Shares reserved for future issuance 726,780 $37.03 (1)(b)(ii) $26,912,663.40
pursuant to the 1999 Equity Incentive Plan
Shares issuable pursuant to outstanding 181,666 $ 9.05 (1)(a)(iii) $ 1,644,077.30
options granted under the 1999
Non-Employee Directors' Stock Option Plan
Shares reserved for future issuance 318,334 $37.03 (1)(b)(iii) $11,787,908.02
pursuant to the 1999 Non-Employee
Directors' Stock Option Plan
Shares issuable pursuant to the 1999 600,000 $37.03 (1)(b)(iv) $22,218,000.00
Employee Stock Purchase Plan
Shares subject to an outstanding 75,000 $16.00 (1)(a)(iv) $ 1,200,000.00
option granted outside of the
Registrant's stock option plans
Proposed Maximum Offering Price $99,492,614.28
Registration Fee $ 26,266.05
</TABLE>
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
<PAGE>
Part II
Item 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Registrant with the Securities and
Exchange Commission are incorporated by reference into this registration
statement:
(a) Registrant's prospectus filed pursuant to Rule 424(b) under the
Securities Act of 1933, as amended (the "Securities Act"), on
September 30, 1999 (File No. 333-83515).
(b) Registrant's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1999 (File No. 333-83515), including all material
incorporated by reference therein.
(c) The description of the Registrant's Common Stock which is contained
in the Registration Statement on Form 8-A 1999 (File No. 333-83515),
filed on August 25, 1999 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), including any amendment or report filed
for the purpose of updating such description.
All reports and other documents subsequently filed 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
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference herein and to be a part of this
registration statement from the date of the filing of such reports and
documents.
Item 4. DESCRIPTION OF SECURITIES
Not Applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The legality of the Common Stock offered hereby will be passed upon for the
Company by Cooley Godward llp, Palo Alto, California ("Cooley Godward"). As of
the date of this prospectus, certain attorneys of Cooley Godward held a an
aggregate of 51,091 shares of the Registrant's Common Stock, 44,381 shares of
which are held through an investment partnership. Alan C. Mendelson, a partner
of Cooley Godward, is the secretary of the Registrant.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Section 145 of the Delaware General Corporation Law, the Registrant
has broad powers to indemnify its directors and officers against liabilities
they may incur in such capacities, including liabilities under the Securities
Act. The Registrant's Bylaws also provide that the Registrant will indemnify its
directors and officers and may indemnify its employees and other agents to the
fullest extent not prohibited by Delaware law.
The Registrant's Amended and Restated Certificate of Incorporation provides
for the elimination of liability for monetary damages for breach of the
directors' fiduciary duty of care to the Registrant and its stockholders. These
provisions do not eliminate the directors' duty of care and, in appropriate
circumstances, equitable remedies such as injunctive or other forms of non-
monetary relief will remain available under Delaware law. In addition, each
director will continue to be subject to liability for breach of the director's
duty of loyalty to the Registrant, for acts or omissions not in good faith or
involving intentional misconduct, for knowing violations of law, for any
transaction from which the director derived an improper personal benefit, and
for payment of dividends or approval of stock repurchases or redemptions that
are unlawful under Delaware law. The provision does not affect a director's
responsibilities under any other laws, such as the federal securities laws.
<PAGE>
The Registrant has entered into agreements with its directors and executive
officers that require the Registrant to indemnify such persons to the fullest
extent permitted by Delaware law, including against expenses, judgments, fines,
settlements and other amounts actually and reasonably incurred (including
expenses of a derivative action) in connection with any proceeding, whether
actual or threatened, to which any such person may be made a party by reason of
the fact that such person is or was a director or executive officer of the
Registrant or any of its affiliated enterprises. No indemnification will be
available if such indemnification is unlawful, or in respect of any accounting
of profits made from the purchase or sale of securities of the Registrant in
violation of Section 16(b) of the Exchange Act. The indemnification agreements
also set forth certain procedures that will apply in the event of a claim for
indemnification thereunder.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
Item 8. EXHIBITS
Exhibit
Number Description
- ------ -----------
4.1* Amended and Restated Certificate of Incorporation
4.2* Amended and Restated Bylaws
4.3* Specimen Common Stock Certificate
5.1 Opinion of Cooley Godward llp
23.1 Consent of Arthur Andersen llp
23.2 Consent of Cooley Godward llp (included in Exhibit 5.1)
24.1 Power of Attorney (included on signature page)
99.1* Amended and Restated 1997 Equity Incentive Plan and related
documents
99.2* 1999 Equity Incentive Plan and related documents
99.3* 1999 Non-Employee Directors' Stock Option Plan and related
documents
99.4* 1999 Employee Stock Purchase Plan and related documents
99.5 Form of Stock Option Grant Notice and related documents used in
connection with an option grant outside of the Registrant's stock
option plans
* Incorporated by reference from the Registrant's Registration Statement on Form
S-1, as amended (File No. 333-83515), initially filed with the Securities and
Exchange Commission on July 22, 1999.
Item 9. UNDERTAKINGS
1. The undersigned Registrant hereby undertakes:
a. 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;
2.
<PAGE>
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% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement.
iii. To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs 1(a)(i) and 1(a)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8 and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the Registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
b. 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 herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
c. 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.
2. 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 Section 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 herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. 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 Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, 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.
3.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 Sunnyvale, State of California, on January 13, 2000.
TiVo Inc.
By /s/ Michael Ramsay
---------------------
Michael Ramsay
President, Chief Executive Officer and
Chairman of the Board
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Michael Ramsay and David H. Courtney and
each or any one of them, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, 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 other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their or his substitutes or substitute, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Michael Ramsay President, Chief Executive Officer and Chairman of January 13, 2000
- -------------------------------------- the Board (Principal Executive Officer)
Michael Ramsay
/s/ David H. Courtney Vice President of Finance and Chief Financial Officer January 13, 2000
- -------------------------------------- (Principal Financial and Accounting Officer)
David H. Courtney
/s/ James Barton Vice President of Research and Development, Chief January 13, 2000
- -------------------------------------- Technical Officer and Director
James Barton
/s/ Geoffrey Y. Yang Director January 13, 2000
- --------------------------------------
Geoffrey Y. Yang
/s/ Stewart Alsop Director January 13, 2000
- --------------------------------------
Stewart Alsop
/s/ Randy Komisar Director January 13, 2000
- --------------------------------------
Randy Komisar
/s/ Michael Homer Director January 13, 2000
- --------------------------------------
Michael Homer
</TABLE>
4.
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Larry N. Chapman Director January 13, 2000
- --------------------------------------
Larry N. Chapman
Director
- --------------------------------------
Jan P. Oosterveld
Director
- --------------------------------------
John S. Hendricks
Director
- --------------------------------------
Margaret Murphy
Director
- --------------------------------------
Howard Stringer
===========================================================================================================================
</TABLE>
5.
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
4.1* Amended and Restated Certificate of Incorporation
4.2* Amended and Restated Bylaws
4.3* Specimen Common Stock Certificate
5.1 Opinion of Cooley Godward LLP
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Cooley Godward LLP (included in Exhibit 5.1)
24.1 Power of Attorney (included on signature page)
99.1* Amended and Restated 1997 Equity Incentive Plan and related
documents
99.2* 1999 Equity Incentive Plan and related documents
99.3* 1999 Non-Employee Directors' Stock Option Plan and related
documents
99.4* 1999 Employee Stock Purchase Plan and related documents
99.5 Form of Stock Option Grant Notice and related documents used in
connection with an option grant outside of the Registrant's stock
option plans
* Incorporated by reference from the Registrant's Registration Statement on Form
S-1, as amended (File No. 333-83515), initially filed with the Securities and
Exchange Commission on July 22, 1999.
<PAGE>
Exhibit 5.1
[LETTERHEAD OF COOLEY GODWARD LLP APPEARS HERE]
January 13, 2000
TiVo Inc.
894 Ross Drive, Suite 100
Sunnyvale, CA 94089
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by TiVo Inc. (the "Company") of a Registration Statement on Form
S-8 (the "Registration Statement") with the Securities and Exchange Commission
covering the offering of up to an aggregate of 6,273,153 shares of the Company's
Common Stock, $0.001 par value per share (the "Shares"), with respect to (i)
1,156,009 of the Shares issuable pursuant to the Company's Amended and Restated
1997 Equity Incentive Plan (the "1997 Incentive Plan"), (ii) 3,942,144 of the
Shares issuable pursuant to the Company's 1999 Equity Incentive Plan (the "1999
Incentive Plan"), (iii) 500,000 of the Shares issuable pursuant to the Company's
1999 Non-Employee Directors' Stock Option Plan (the "Non-Employee Directors'
Plan"), (iv) 600,000 of the Shares issuable pursuant to the Company's 1999
Employee Stock Purchase Plan (the "Employee Purchase Plan") and (v) 75,000
shares issuable upon exercise of a stock option agreement granted outside of the
Company's stock option plans (the "Stock Option Agreement").
In connection with this opinion, we have examined the Registration Statement and
related prospectus, the Company's Amended and Restated Certificate of
Incorporation and Amended and Restated Bylaws, and such other documents,
records, certificates, memoranda and other instruments as we deem necessary as a
basis for this opinion. We have assumed the genuineness and authenticity of all
documents submitted to us as originals, the conformity to originals of all
documents submitted to us as copies, and the due execution and delivery of all
documents, where due execution and delivery are a prerequisite to the
effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Shares, when sold and issued in accordance with the 1997 Incentive
Plan, the 1999 Incentive Plan, the Non-Employee Directors' Plan, the Employee
Purchase Plan, the Stock Option Agreement and the Registration Statement and
related prospectus, will be validly issued, fully paid, and nonassessable
(except as to shares issued pursuant to certain deferred payment arrangements,
which will be fully paid and nonassessable when such deferred payments are made
in full).
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ Alan C. Mendelson
Alan C. Mendelson
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) included in or made a part of this
registration statement.
/s/ Arthur Andersen LLP
_____________________________________
January 13, 2000
1.
<PAGE>
EXHIBIT 99.5
TiVo Inc.
Stock Option Grant Notice
(Nonstatutory Stock Option
Granted Outside of a Plan)
TiVo Inc. (the "Company"), hereby grants to Optionholder an option to purchase
the number of shares of the Company's Common Stock set forth below. This option
is subject to all of the terms and conditions as set forth herein and in the
Stock Option Agreement, the General Terms and Conditions and the Notice of
Exercise, all of which are incorporated herein in their entirety.
Optionholder: _______________________
Date of Grant: _______________________
Vesting Commencement Date: _______________________
Number of Shares Subject to Option: _______________________
Exercise Price (Per Share): _______________________
Total Exercise Price: _______________________
Expiration Date: _______________________
Type of Grant: __________________
Exercise Schedule: __________________
Vesting Schedule: __________________
Payment: By one or a combination of the following items (described in
the Stock Option Agreement):
By cash or check
Pursuant to a Regulation T Program if the Shares are
publicly traded
By delivery of already-owned shares if the Shares are
publicly traded
Additional Terms/Acknowledgements: The undersigned Optionholder acknowledges
receipt of, and understands and agrees to, this Grant Notice, the Stock Option
Agreement and the General Terms and Conditions. Optionholder further
acknowledges that as of the Date of Grant, this Grant Notice, the Stock Option
Agreement and the General Terms and Conditions set forth the entire
understanding between Optionholder and the Company regarding the acquisition of
stock in the Company and supersede all prior oral and written agreements on that
subject with the exception of (i) options previously granted and delivered to
Optionholder under the General Terms and Conditions, and (ii) the following
agreements only:
Other Agreements: _______________________________________
_______________________________________
TiVo Inc. Optionholder:
By:________________________ ________________________________
Signature Signature
Title:_____________________ Date:___________________________
Date:______________________
Attachments: Stock Option Agreement and General Terms and Conditions
<PAGE>
Attachment I
Stock Option Agreement
<PAGE>
TiVo Inc.
Stock Option Agreement
(Nonstatutory Stock Option
Granted Outside of a Plan)
Pursuant to your Stock Option Grant Notice ("Grant Notice"), this Stock
Option Agreement and the General Terms and Conditions, TiVo Inc. (the "Company")
has granted you an option to purchase the number of shares of the Company's
Common Stock indicated in your Grant Notice at the exercise price indicated in
your Grant Notice. Defined terms not explicitly defined in this Stock Option
Agreement but defined in the General Terms and Conditions shall have the same
definitions as in the General Terms and Conditions.
The details of your option are as follows:
I. Vesting. Subject to the limitations contained herein, your option will
vest as provided in your Grant Notice, provided that vesting will cease upon the
termination of your Continuous Service.
II. Number of Shares and Exercise Price. The number of shares of Common
Stock subject to your option and your exercise price per share referenced in
your Grant Notice may be adjusted from time to time for Capitalization
Adjustments, as provided in the General Terms and Conditions.
III. Exercise prior to Vesting ("Early Exercise"). If permitted in your
Grant Notice (i.e., the "Exercise Schedule" indicates that "Early Exercise" of
your option is permitted) and subject to the provisions of your option, you may
elect at any time that is both (i) during the period of your Continuous Service
and (ii) during the term of your option, to exercise all or part of your option,
including the nonvested portion of your option; provided, however, that:
(a) a partial exercise of your option shall be deemed to cover first
vested shares of Common Stock and then the earliest vesting installment of
unvested shares of Common Stock;
(b) any shares of Common Stock so purchased from installments that
have not vested as of the date of exercise shall be subject to the purchase
option in favor of the Company as described in the Company's form of Early
Exercise Stock Purchase Agreement; and
(c) you shall enter into the Company's form of Early Exercise Stock
Purchase Agreement with a vesting schedule that will result in the same vesting
as if no early exercise had occurred.
IV. Method of Payment. Payment of the exercise price is due in full upon
exercise of all or any part of your option. You may elect to make payment of the
exercise price in cash or by check or in any other manner permitted by your
-----------------
Grant Notice, which may include one or more of the following:
- ------------
<PAGE>
(d) In the Company's sole discretion at the time your option is
exercised and provided that at the time of exercise the Common Stock is publicly
traded and quoted regularly in The Wall Street Journal, pursuant to a program
developed under Regulation T as promulgated by the Federal Reserve Board that,
prior to the issuance of Common Stock, results in either the receipt of cash (or
check) by the Company or the receipt of irrevocable instructions to pay the
aggregate exercise price to the Company from the sales proceeds.
(e) Provided that at the time of exercise the Common Stock is
publicly traded and quoted regularly in The Wall Street Journal, by delivery of
already-owned shares of Common Stock either that you have held for the period
required to avoid a charge to the Company's reported earnings (generally six
months) or that you did not acquire, directly or indirectly from the Company,
that are owned free and clear of any liens, claims, encumbrances or security
interests, and that are valued at Fair Market Value on the date of exercise.
"Delivery" for these purposes, in the sole discretion of the Company at the time
you exercise your option, shall include delivery to the Company of your
attestation of ownership of such shares of Common Stock in a form approved by
the Company. Notwithstanding the foregoing, you may not exercise your option by
tender to the Company of Common Stock to the extent such tender would violate
the provisions of any law, regulation or agreement restricting the redemption of
the Company's stock.
(f) Pursuant to the following deferred payment alternative:
(i) Not less than one hundred percent (100%) of the aggregate
exercise price, plus accrued interest, shall be due four (4)
years from date of exercise or, at the Company's election, upon
termination of your Continuous Service.
(ii) Interest shall be compounded at least annually and shall be
charged at the minimum rate of interest necessary to avoid the
treatment as interest, under any applicable provisions of the
Code, of any portion of any amounts other than amounts stated
to be interest under the deferred payment arrangement.
(iii) At any time that the Company is incorporated in Delaware,
payment of the Common Stock's "par value," as defined in the
Delaware General Corporation Law, shall be made in cash and not
by deferred payment.
(iv) In order to elect the deferred payment alternative, you must,
as a part of your written notice of exercise, give notice of
the election of this payment alternative and, in order to
secure the payment of the deferred exercise price to the
Company hereunder, if the Company so requests, you must tender
to the Company a promissory note and a security agreement
covering the purchased shares of Common Stock, both in form and
substance satisfactory to the Company, or such other or
additional documentation as the Company may request.
V. Whole Shares. You may exercise your option only for whole shares of
Common Stock.
<PAGE>
VI. Securities Law Compliance. Notwithstanding anything to the contrary
contained herein, you may not exercise your option unless the shares of Common
Stock issuable upon such exercise are then registered under the Securities Act
or, if such shares of Common Stock are not then so registered, the Company has
determined that such exercise and issuance would be exempt from the registration
requirements of the Securities Act. The exercise of your option must also comply
with other applicable laws and regulations governing your option, and you may
not exercise your option if the Company determines that such exercise would not
be in material compliance with such laws and regulations.
VII. Term. The term of your option commences on the Date of Grant and
expires upon the earliest of the following:
(g) three (3) months after the termination of your Continuous
Service for any reason other than your Disability or death, provided that if
during any part of such three- (3-) month period your option is not exercisable
solely because of the condition set forth in the preceding paragraph relating to
"Securities Law Compliance," your option shall not expire until the earlier of
the Expiration Date or until it shall have been exercisable for an aggregate
period of three (3) months after the termination of your Continuous Service;
(h) twelve (12) months after the termination of your Continuous
Service due to your Disability;
(i) eighteen (18) months after your death if you die either during
your Continuous Service or within three (3) months after your Continuous Service
terminates;
(j) the Expiration Date indicated in your Grant Notice; or
(k) the day before the tenth (10th) anniversary of the Date of
Grant.
VIII. Exercise.
(l) You may exercise the vested portion of your option (and the
unvested portion of your option if your Grant Notice so permits) during its term
by delivering a Notice of Exercise (in a form designated by the Company)
together with the exercise price to the Secretary of the Company, or to such
other person as the Company may designate, during regular business hours,
together with such additional documents as the Company may then require.
(m) By exercising your option you agree that, as a condition to any
exercise of your option, the Company may require you to enter into an
arrangement providing for the payment by you to the Company of any tax
withholding obligation of the Company arising by reason of (1) the exercise of
your option, (2) the lapse of any substantial risk of forfeiture to which the
shares of Common Stock are subject at the time of exercise, or (3) the
disposition of shares of Common Stock acquired upon such exercise.
IX. Transferability. Your option is not transferable, except by will or
by the laws of descent and distribution, and is exercisable during your life
only by you. Notwithstanding the foregoing, by delivering written notice to the
Company, in a form satisfactory to the Company,
<PAGE>
you may designate a third party who, in the event of your death, shall
thereafter be entitled to exercise your option.
X. Option not a Service Contract. Your option is not an employment or
service contract, and nothing in your option shall be deemed to create in any
way whatsoever any obligation on your part to continue in the employ of the
Company or an Affiliate, or of the Company or an Affiliate to continue your
employment. In addition, nothing in your option shall obligate the Company or an
Affiliate, their respective shareholders, Boards of Directors, Officers or
Employees to continue any relationship that you might have as a Director or
Consultant for the Company or an Affiliate.
XI. Withholding Obligations.
(n) At the time you exercise your option, in whole or in part, or at
any time thereafter as requested by the Company, you hereby authorize
withholding from payroll and any other amounts payable to you, and otherwise
agree to make adequate provision for (including by means of a "cashless
exercise" pursuant to a program developed under Regulation T as promulgated by
the Federal Reserve Board to the extent permitted by the Company), any sums
required to satisfy the federal, state, local and foreign tax withholding
obligations of the Company or an Affiliate, if any, which arise in connection
with your option.
(o) Upon your request and subject to approval by the Company, in its
sole discretion, and compliance with any applicable conditions or restrictions
of law, the Company may withhold from fully vested shares of Common Stock
otherwise issuable to you upon the exercise of your option a number of whole
shares of Common Stock having a Fair Market Value, determined by the Company as
of the date of exercise, not in excess of the minimum amount of tax required to
be withheld by law. If the date of determination of any tax withholding
obligation is deferred to a date later than the date of exercise of your option,
share withholding pursuant to the preceding sentence shall not be permitted
unless you make a proper and timely election under Section 83(b) of the Code,
covering the aggregate number of shares of Common Stock acquired upon such
exercise with respect to which such determination is otherwise deferred, to
accelerate the determination of such tax withholding obligation to the date of
exercise of your option. Notwithstanding the filing of such election, shares of
Common Stock shall be withheld solely from fully vested shares of Common Stock
determined as of the date of exercise of your option that are otherwise issuable
to you upon such exercise. Any adverse consequences to you arising in
connection with such share withholding procedure shall be your sole
responsibility.
(p) You may not exercise your option unless the tax withholding
obligations of the Company and/or any Affiliate are satisfied. Accordingly, you
may not be able to exercise your option when desired even though your option is
vested, and the Company shall have no obligation to issue a certificate for such
shares of Common Stock or release such shares of Common Stock from any escrow
provided for herein.
XII. Notices. Any notices provided for in your option or the General Terms
and Conditions shall be given in writing and shall be deemed effectively given
upon receipt or, in the case of notices delivered by mail by the Company to you,
five (5) days after deposit in the
<PAGE>
United States mail, postage prepaid, addressed to you at the last address you
provided to the Company.
XIII. Governing General Terms and Conditions Document. Your option is
subject to all the provisions of the General Terms and Conditions, the
provisions of which are hereby made a part of your option, and is further
subject to all interpretations, amendments, rules and regulations which may from
time to time be promulgated and adopted pursuant to the General Terms and
Conditions. In the event of any conflict between the provisions of your option
and those of the General Terms and Conditions, the provisions of the General
Terms and Conditions shall control.
<PAGE>
Attachment II
General Terms and Conditions
<PAGE>
TiVo Inc.
General Terms and Conditions
(Nonstatutory Stock Option
Granted Outside of a Plan)
1. Definitions.
(a) "Affiliate" means any parent corporation or subsidiary corporation of
the Company, whether now or hereafter existing, as those terms are
defined in Sections 424(e) and (f), respectively, of the Code.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means a committee of one or more members of the Board
appointed by the Board in accordance with subsection 3(c).
(e) "Common Stock" means the common stock of the Company.
(f) "Company" means TiVo Inc., a Delaware corporation.
(g) "Consultant" means any person, including an advisor, (i) engaged by
the Company or an Affiliate to render consulting or advisory services
and who is compensated for such services or (ii) who is a member of
the Board of Directors of an Affiliate. However, the term "Consultant"
shall not include either Directors who are not compensated by the
Company for their services as Directors or Directors who are merely
paid a director's fee by the Company for their services as Directors.
(h) "Continuous Service" means that the Optionholder's service with the
Company or an Affiliate, whether as an Employee, Director or
Consultant, is not interrupted or terminated. The Optionholder's
Continuous Service shall not be deemed to have terminated merely
because of a change in the capacity in which the Optionholder renders
service to the Company or an Affiliate as an Employee, Consultant or
Director or a change in the entity for which the Optionholder renders
such service, provided that there is no interruption or termination of
the Optionholder's Continuous Service. For example, a change in status
from an Employee of the Company to a Consultant of an Affiliate or a
Director will not constitute an interruption of Continuous Service.
The Board or the chief executive officer of the Company, in that
party's sole discretion, may determine whether Continuous Service
shall be considered interrupted in the case of any leave of absence
approved by that party, including sick leave, military leave or any
other personal leave.
(i) "Director" means a member of the Board of Directors of the Company.
<PAGE>
(j) "Disability" means the permanent and total disability of a person
within the meaning of Section 22(e)(3) of the Code.
(k) "Employee" means any person employed by the Company or an Affiliate.
Mere service as a Director or payment of a director's fee by the
Company or an Affiliate shall not be sufficient to constitute
"employment" by the Company or an Affiliate.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(m) "Fair Market Value" means, as of any date, the value of the Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock exchange
or traded on the Nasdaq National Market or the Nasdaq SmallCap
Market, the Fair Market Value of a share of Common Stock shall be
the closing sales price for such stock (or the closing bid, if no
sales were reported) as quoted on such exchange or market (or the
exchange or market with the greatest volume of trading in the
Common Stock) on the last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such
other source as the Board deems reliable.
(ii) In the absence of such markets for the Common Stock, the Fair
Market Value shall be determined in good faith by the Board.
(n) "Nonstatutory Stock Option" means an option not intended to qualify as
an Incentive Stock Option under Section 422 of the Code.
(o) "Option" means the written agreement between the Company and the
Optionholder evidencing the terms and conditions of the Nonstatutory
Stock Option granted to the Optionholder. The Option shall consist of
a Grant Notice setting forth the specific terms of the Option, a Stock
Option Agreement setting forth less specific terms of the Option and
these General Terms and Conditions.
(p) "Optionholder" means the person to whom the Option is granted, as
specified in the Grant Notice.
(q) "Securities Act" means the Securities Act of 1933, as amended.
2. Administration.
(a) Administration by Board. The Board shall administer the Option unless
and until the Board delegates administration to a Committee. Any
interpretation of the Plan by the Board and any decision by the Board
under the Plan shall be final and binding on all persons.
(b) Powers of Board. The Board shall have the power, subject to, and
within the limitations of, the express provisions of the Option:
<PAGE>
(i) To construe and interpret the Option, and to establish, amend
and revoke rules and regulations for its administration. The
Board, in the exercise of this power, may correct any defect,
omission or inconsistency in the Option, in a manner and to the
extent it shall deem necessary or expedient to make the Option
fully effective.
(ii) To amend the Option.
(iii) Generally, to exercise such powers and to perform such acts as
the Board deems necessary or expedient to promote the best
interests of the Company which are not in conflict with the
provisions of the Option.
(c) Delegation to Committee.
(i) General. The Board may delegate administration of the Option to
a Committee or Committees of one (1) or more members of the
Board, and the term "Committee" shall apply to any person or
persons to whom such authority has been delegated. If
administration is delegated to a Committee, the Committee shall
have, in connection with the administration of the Option, the
powers theretofore possessed by the Board, including the power
to delegate to a subcommittee any of the administrative powers
the Committee is authorized to exercise (and references in the
Option to the Board shall thereafter be to the Committee or
subcommittee), subject, however, to such resolutions, not
inconsistent with the provisions of the Option, as may be
adopted from time to time by the Board. The Board may abolish
the Committee at any time and revest in the Board the
administration of the Option.
(d) Effect of Board's Decision. All determinations, interpretations and
constructions made by the Board in good faith shall not be subject to
review by any person and shall be final, binding and conclusive on all
persons.
3. Shares Subject to the Option.
(a) Number of Shares. Subject to the provisions of these General Terms and
Conditions relating to adjustments upon changes in Common Stock, the
number of shares of Common Stock that may be issued pursuant to the
Option shall be set forth in the Grant Notice.
(b) Source of Shares. The shares of Common Stock subject to the Option may
be unissued shares or reacquired shares, bought on the market or
otherwise.
4. Option Provisions.
The Grant Notice and the Stock Option Agreement shall include (through
incorporation of provisions hereof by reference) the substance of each of the
following provisions:
<PAGE>
(a) Consideration. The purchase price of Common Stock acquired pursuant to
the Option shall be paid, to the extent permitted by applicable
statutes and regulations, either (i) in cash at the time the Option is
exercised or (ii) at the discretion of the Board either at the time of
the grant of the Option or subsequently (1) by delivery to the Company
of other Common Stock, (2) according to a deferred payment or other
similar arrangement with the Optionholder or (3) in any other form of
legal consideration that may be acceptable to the Board. Unless
otherwise specifically provided in the Stock Option Agreement, the
purchase price of Common Stock acquired pursuant to the Option that is
paid by delivery to the Company of other Common Stock acquired,
directly or indirectly from the Company, shall be paid only by shares
of the Common Stock of the Company that have been held for more than
six (6) months (or such longer or shorter period of time required to
avoid a charge to earnings for financial accounting purposes). At any
time that the Company is incorporated in Delaware, payment of the
Common Stock's "par value," as defined in the Delaware General
Corporation Law, shall not be made by deferred payment.
In the case of any deferred payment arrangement, interest shall be
compounded at least annually and shall be charged at the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement.
(b) Transferability. The Option shall be transferable to the extent
provided in the Stock Option Agreement. If the Option does not provide
for transferability, then the Option shall not be transferable except
by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Optionholder only by the
Optionholder. Notwithstanding the foregoing, the Optionholder may, by
delivering written notice to the Company, in a form satisfactory to
the Company, designate a third party who, in the event of the death of
the Optionholder, shall thereafter be entitled to exercise the Option.
(c) Vesting Generally. The total number of shares of Common Stock subject
to the Option may, but need not, vest and therefore become exercisable
in periodic installments that may, but need not, be equal. The Option
may be subject to such other terms and conditions on the time or times
when it may be exercised (which may be based on performance or other
criteria) as the Board may deem appropriate. The provisions of this
subsection are subject to any Stock Option Agreement provisions
governing the minimum number of shares of Common Stock as to which the
Option may be exercised.
(d) Termination of Continuous Service. In the event the Optionholder's
Continuous Service terminates (other than upon the Optionholder's
death or Disability), the Optionholder may exercise the Option (to the
extent that the Optionholder was entitled to exercise the Option as of
the date of termination) but only within such period of time ending on
the earlier of (i) the date three (3) months following the termination
of the Optionholder's Continuous Service (or such longer or shorter
period specified in the Stock Option Agreement), or (ii) the
<PAGE>
expiration of the term of the Option. If, after termination, the
Optionholder does not exercise the Option within the time specified in
the Option, the Option shall terminate.
(e) Extension of Termination Date. The Option may also provide that if the
exercise of the Option following the termination of the Optionholder's
Continuous Service (other than upon the Optionholder's death or
Disability) would be prohibited at any time solely because the
issuance of shares of Common Stock would violate the registration
requirements under the Securities Act, then the Option shall terminate
on the earlier of (i) the expiration of the term of the Option or (ii)
the expiration of a period of three (3) months after the termination
of the Optionholder's Continuous Service during which the exercise of
the Option would not be in violation of such registration
requirements.
(f) Disability of Optionholder. In the event that the Optionholder's
Continuous Service terminates as a result of the Optionholder's
Disability, the Optionholder may exercise the Option (to the extent
that the Optionholder was entitled to exercise the Option as of the
date of termination), but only within such period of time ending on
the earlier of (i) the date twelve (12) months following such
termination (or such longer or shorter period specified in the Stock
Option Agreement) or (ii) the expiration of the term of the Option.
If, after termination, the Optionholder does not exercise the Option
within the time specified, the Option shall terminate.
(g) Death of Optionholder. In the event (i) the Optionholder's Continuous
Service terminates as a result of the Optionholder's death or (ii) the
Optionholder dies within the period (if any) specified in the Stock
Option Agreement after the termination of the Optionholder's
Continuous Service for a reason other than death, then the Option may
be exercised (to the extent the Optionholder was entitled to exercise
the Option as of the date of death) by the Optionholder's estate, by a
person who acquired the right to exercise the Option by bequest or
inheritance or by a person designated to exercise the Option upon the
Optionholder's death, but only within the period ending on the earlier
of (1) the date eighteen (18) months following the date of death (or
such longer or shorter period specified in the Stock Option Agreement)
or (2) the expiration of the term of the Option. If, after death, the
Option is not exercised within the time specified herein, the Option
shall terminate.
(h) Early Exercise. The Stock Option Agreement may, but need not, include
a provision whereby the Optionholder may elect at any time before the
Optionholder's Continuous Service terminates to exercise the Option as
to any part or all of the shares of Common Stock subject to the Option
prior to the full vesting of the Option. Any unvested shares of Common
Stock so purchased may be subject to a repurchase option in favor of
the Company or to any other restriction the Board determines to be
appropriate. The Company will not exercise its repurchase option until
at least six (6) months (or such longer or shorter period of time
required to avoid a charge to earnings for financial
<PAGE>
accounting purposes) have elapsed following exercise of the Option
unless the Board otherwise specifically provides in the Option.
5. Covenants of the Company.
(a) Availability of Shares. During the terms of the Option, the Company
shall keep available at all times the number of shares of Common Stock
required to satisfy the Option.
(b) Securities Law Compliance. The Company shall seek to obtain from each
regulatory commission or agency having jurisdiction over the Option
such authority as may be required to grant the Option and to issue and
sell shares of Common Stock upon exercise of the Option; provided,
however, that this undertaking shall not require the Company to
register under the Securities Act the Option or any Common Stock
issued or issuable pursuant to the Option. If, after reasonable
efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority which counsel for the Company deems
necessary for the lawful issuance and sale of Common Stock under the
Option, the Company shall be relieved from any liability for failure
to issue and sell Common Stock upon exercise of the Option unless and
until such authority is obtained.
6. Use of Proceeds from Stock.
Proceeds from the sale of Common Stock pursuant to the Option shall
constitute general funds of the Company.
7. Miscellaneous.
(a) Acceleration of Exercisability and Vesting. The Board shall have the
power to accelerate the time at which the Option may first be
exercised or the time during which the Option or any part thereof will
vest in accordance with the Option, notwithstanding the provisions in
the Option stating the time at which it may first be exercised or the
time during which it will vest.
(b) Shareholder Rights. The Optionholder shall be deemed to be the holder
of, or to have any of the rights of a holder with respect to, any
shares of Common Stock subject to the Option unless and until the
Optionholder has satisfied all requirements for exercise of the Option
pursuant to its terms.
(c) No Employment or other Service Rights. Nothing in the Option or any
instrument executed shall confer upon the Optionholder any right to
continue to serve the Company or an Affiliate in the capacity in
effect at the time the Option was granted or shall affect the right of
the Company or an Affiliate to terminate (i) the employment of the
Optionholder as an Employee with or without notice and with or without
cause, (ii) the service of the Optionholder as a Consultant pursuant
to the terms of such Consultant's agreement with the Company or an
Affiliate or (iii) the service of the Optionholder as a Director
pursuant to the
<PAGE>
Bylaws of the Company or an Affiliate, and any applicable provisions
of the corporate law of the state in which the Company or the
Affiliate is incorporated, as the case may be.
(d) Investment Assurances. The Company may require the Optionholder, as a
condition of exercising or acquiring Common Stock under the Option,
(i) to give written assurances satisfactory to the Company as to the
Optionholder's knowledge and experience in financial and business
matters and/or to employ a purchaser representative reasonably
satisfactory to the Company who is knowledgeable and experienced in
financial and business matters and that he or she is capable of
evaluating, alone or together with the purchaser representative, the
merits and risks of exercising the Option; and (ii) to give written
assurances satisfactory to the Company stating that the Optionholder
is acquiring Common Stock subject to the Option for the Optionholder's
own account and not with any present intention of selling or otherwise
distributing the Common Stock. The foregoing requirements, and any
assurances given pursuant to such requirements, shall be inoperative
if (1) the issuance of the shares of Common Stock upon the exercise or
acquisition of Common Stock under the Option has been registered under
a then currently effective registration statement under the Securities
Act or (2) as to any particular requirement, a determination is made
by counsel for the Company that such requirement need not be met in
the circumstances under the then applicable securities laws. The
Company may, upon advice of counsel to the Company, place legends on
stock certificates issued under the Option as such counsel deems
necessary or appropriate in order to comply with applicable securities
laws, including, but not limited to, legends restricting the transfer
of the Common Stock.
(e) Withholding Obligations. To the extent provided by the terms of the
Stock Option Agreement, the Optionholder may satisfy any federal,
state or local tax withholding obligation relating to the exercise or
acquisition of Common Stock under the Option by any of the following
means (in addition to the Company's right to withhold from any
compensation paid to the Optionholder by the Company) or by a
combination of such means: (i) tendering a cash payment; (ii)
authorizing the Company to withhold shares of Common Stock from the
shares of Common Stock otherwise issuable to the Optionholder as a
result of the exercise or acquisition of Common Stock under the
Option, provided, however, that no shares of Common Stock are withheld
with a value exceeding the minimum amount of tax required to be
withheld by law; or (iii) delivering to the Company owned and
unencumbered shares of Common Stock.
8. Adjustments upon Changes in Stock.
(a) Capitalization Adjustments. If any change is made in the Common Stock
subject to the Option without the receipt of consideration by the
Company (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in
property other than cash, stock split, liquidating dividend,
combination of shares, exchange of shares, change in corporate
<PAGE>
structure or other transaction not involving the receipt of
consideration by the Company), the Option will be appropriately
adjusted in the class and number of securities and price per share of
Common Stock subject to the Option. The Board shall make such
adjustments, and its determination shall be final, binding and
conclusive. (The conversion of any convertible securities of the
Company shall not be treated as a transaction "without receipt of
consideration" by the Company.)
(b) Change in Control--Dissolution or Liquidation. In the event of a
dissolution or liquidation of the Company, then the Option shall
terminate immediately prior to such event.
(c) Change in Control--Asset Sale, Stock Sale, Merger, Consolidation or
Reverse Merger. In the event of (i) a sale, lease or other disposition
of all or substantially all of the assets of the Company, (ii) a sale
by the stockholders of the Company of the voting stock of the Company
to another corporation and/or its subsidiaries that results in the
ownership by such corporation and/or its subsidiaries of eighty
percent (80%) or more of the combined voting power of all classes of
the voting stock of the Company entitled to vote; (iii) a merger or
consolidation in which the Company is not the surviving corporation or
(iv) a reverse merger in which the Company is the surviving
corporation but the shares of Common Stock outstanding immediately
preceding the merger are converted by virtue of the merger into other
property, whether in the form of securities, cash or otherwise, then
any surviving corporation or acquiring corporation shall assume the
Option or shall substitute a similar Option (including an option to
acquire the same consideration paid to the shareholders in the
transaction described in this subsection for those outstanding under
the Option). In the event any surviving corporation or acquiring
corporation refuses to assume the Option or to substitute a similar
option for the Option, then, if Optionholder's Continuous Service has
not terminated, the vesting of the Option (and, if applicable, the
time during which the Option may be exercised) shall be accelerated in
full. The Option shall terminate if not exercised at or prior to such
event.
(d) Special Acceleration Provisions. Notwithstanding any other provisions
of these General Terms and Conditions to the contrary, in the event of
a Change in Control (as such term is defined below) and if within
thirteen (13) months after the date of such Change in Control the
Continuous Service of the Optionholder terminates due to an
involuntary termination (not including death or Disability) without
Cause (as such term is defined below) or a voluntary termination by
the Optionholder due to a Constructive Termination (as such term is
defined below), then the vesting and exercisability of this Option
shall be accelerated, or any reacquisition or repurchase rights held
by the Company with respect to the Option shall lapse, as follows:
fifty percent (50%) of the unvested shares covered by this Option
shall vest and become exercisable (or reacquisition or repurchase
rights held by the Company shall lapse with respect to fifty percent
(50%) of the shares still subject to such rights, as appropriate) as
of the date of such termination. Notwithstanding the foregoing,
however, if such potential acceleration of the
<PAGE>
vesting and exercisability of this Option (or lapse of reacquisition
or repurchase rights held by the Company with respect to this Option)
would cause a contemplated Change in Control transaction that would
otherwise be eligible to be accounted for as a "pooling-of-interests"
transaction to become ineligible for such accounting treatment under
generally accepted accounting principles as determined by the
Company's independent public accountants (the "Accountants") prior to
the Change of Control, such acceleration shall not occur.
For the purposes of this subsection 8(d) only, Cause means (i) conviction
of, a guilty plea with respect to, or a plea of nolo contendere to a charge that
the Optionholder has committed a felony under the laws of the United States or
of any state or a crime involving moral turpitude, including, but not limited
to, fraud, theft, embezzlement or any crime that results in or is intended to
result in personal enrichment at the expense of the Company or an Affiliate;
(ii) material breach of any agreement entered into between the Optionholder and
the Company or an Affiliate that impairs the Company's or the Affiliate's
interest therein; (iii) willful misconduct, significant failure of the
Optionholder to perform the Optionholder's duties, or gross neglect by the
Optionholder of the Optionholder's duties; or (iv) engagement in any activity
that constitutes a material conflict of interest with the Company or any
Affiliate.
For purposes of this subsection 8(d) only, Change in Control means: (i) a
dissolution or liquidation of the Company; (ii) a sale of all or substantially
all of the assets of the Company; (iii) a sale by the stockholders of the
Company of the voting stock of the Company to another corporation or its
subsidiaries that results in the ownership by such corporation and/or its
subsidiaries of eighty percent (80%) or more of the combined voting power of all
classes of the voting stock of the Company entitled to vote; (iv) a merger or
consolidation in which the Company is not the surviving corporation and in which
beneficial ownership of securities of the Company representing at least fifty
percent (50%) of the combined voting power entitled to vote in the election of
Directors has changed; (v) a reverse merger in which the Company is the
surviving corporation but the shares of Common Stock outstanding immediately
preceding the merger are converted by virtue of the merger into other property,
whether in the form of securities, cash or otherwise, and in which beneficial
ownership of securities of the Company representing at least fifty percent (50%)
of the combined voting power entitled to vote in the election of Directors has
changed; (vi) an acquisition by any person, entity or group within the meaning
of Section 13(d) or 14(d) of the Exchange Act, or any comparable successor
provisions (excluding any employee benefit plan, or related trust, sponsored or
maintained by the Company or subsidiary of the Company or other entity
controlled by the Company) of the beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act, or comparable successor rule) of
securities of the Company representing at least fifty percent (50%) of the
combined voting power entitled to vote in the election of Directors; or (vii) in
the event that the individuals who, as of the date of the initial public
offering of the shares of Common Stock of the Company, are members of the
Company's Board (the "Incumbent Board"), cease for any reason to constitute at
least fifty percent (50%) of the Board. (If the election, or nomination for
election by the Company's stockholders, of any new Director is approved by a
vote of at least fifty percent (50%) of the Incumbent Board, such new Director
shall be considered to be a member of the Incumbent Board in the future.).
<PAGE>
For purposes of this subsection 8(d) only, Constructive Termination means
the occurrence of any of the following events or conditions: (i) (A) a change
in the Optionholder's status, title, position or responsibilities (including
reporting responsibilities) which represents an adverse change from the
Optionholder's status, title, position or responsibilities as in effect at any
time within ninety (90) days preceding the date of a Change in Control or at any
time thereafter; (B) the assignment to the Optionholder of any duties or
responsibilities which are inconsistent with the Optionholder's status, title,
position or responsibilities as in effect at any time within ninety (90) days
preceding the date of a Change in Control or at any time thereafter; or (C) any
removal of the Optionholder from or failure to reappoint or reelect the
Optionholder to any of such offices or positions, except in connection with the
termination of the Optionholder's Continuous Service for Cause, as a result of
the Optionholder's Disability or death or by the Optionholder other than as a
result of Constructive Termination; (ii) a reduction in the Optionholder's
annual base compensation or any failure to pay the Optionholder any compensation
or benefits to which the Optionholder is entitled within five (5) days of the
date due; (iii) the Company's requiring the Optionholder to relocate to any
place outside a fifty (50) mile radius of the Optionholder's current work site,
except for reasonably required travel on the business of the Company or its
Affiliates which is not materially greater than such travel requirements prior
to the Change in Control; (iv) the failure by the Company to (A) continue in
effect (without reduction in benefit level and/or reward opportunities) any
material compensation or employee benefit plan in which the Optionholder was
participating at any time within ninety (90) days preceding the date of a Change
in Control or at any time thereafter, unless such plan is replaced with a plan
that provides substantially equivalent compensation or benefits to the
Optionholder, or (B) provide the Optionholder with compensation and benefits, in
the aggregate, at least equal (in terms of benefit levels and/or reward
opportunities) to those provided for under each other employee benefit plan,
program and practice in which the Optionholder was participating at any time
within ninety (90) days preceding the date of a Change in Control or at any time
thereafter; (v) any material breach by the Company of any provision of an
agreement between the Company and the Optionholder, whether pursuant to this
Plan or otherwise, other than a breach which is cured by the Company within
fifteen (15) days following notice by the Optionholder of such breach; or (vi)
the failure of the Company to obtain an agreement, satisfactory to the
Optionholder, from any successors and assigns to assume and agree to perform the
obligations created under this Plan.
(e) Parachute Payments. In the event that the acceleration of the vesting
and exercisability of this Option or lapse of reacquisition or
repurchase rights held by the Company with respect to this Option
provided for in subsection 8(d) and benefits otherwise payable to a
Optionholder (i) constitute "parachute payments" within the meaning of
Section 280G (as it may be amended or replaced) of the Code, and (ii)
but for this subsection 8(e) would be subject to the excise tax
imposed by Section 4999 (as it may be amended or replaced) of the Code
(the "Excise Tax"), then Optionholder's benefits hereunder shall be
delivered to such lesser extent which would result in no portion of
such benefits being subject to the Excise Tax; provided, however, that
the benefits hereunder shall be reduced only to the extent necessary
after all cash amounts otherwise payable to Optionholder and which
constitute "parachute payments" have been returned. Unless the Company
and Optionholder otherwise agree in writing, any determination
required under this subsection 8(e) shall be made in writing in good
faith by the
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Accountants. For purposes of making the calculations required by this
subsection 8(e), the Accountants may make reasonable assumptions and
approximations concerning applicable taxes and may rely on reasonable,
good faith interpretations concerning the application of the Code. The
Company and Optionholders shall furnish to the Accountants such
information and documents as the Accountants may reasonably request in
order to make a determination under this subsection 8(e). The Company
shall bear all costs the Accountants may reasonably incur in
connection with any calculations contemplated by this subsection 8(e).
9. Amendment of the Option.
The Board at any time, and from time to time, may amend the terms of the
Option; provided, however, that the rights under the Option shall not be
impaired by any such amendment unless (i) the Company requests the consent of
the Optionholder and (ii) the Optionholder consents in writing.
10. Choice of Law.
The law of the State of Delaware shall govern all questions concerning the
construction, validity and interpretation of the Option, without regard to such
state's conflict of laws rules.
