<PAGE> 1
As filed with the Securities and Exchange Commission on April 28, 2000
Registration No. 333-____________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------------------
TRUETIME, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-3343279
(State or other jurisdiction of incorporation or (I.R.S Employer
organization) Identification No.)
2835 DUKE COURT
SANTA ROSA, CALIFORNIA 95407
(Address of Principal Executive Offices) (Zip Code)
TRUETIME, INC. 1999 KEY EMPLOYEE STOCK OPTION PLAN
TRUETIME, INC. 1999 NON-EMPLOYEE DIRECTOR PLAN
(Full title of the plans)
------------------------------------
ELIZABETH A. WITHERS
TRUETIME, INC.
2835 DUKE COURT
SANTA ROSA, CALIFORNIA 95407
(Name and address of agent for service)
(707) 528-1230
(Telephone number, including area code, of agent for service)
With Copy to:
CHARLES H. STILL
FULBRIGHT & JAWORSKI L.L.P.
1301 MCKINNEY, SUITE 5100
HOUSTON, TEXAS 77010-3095
(713) 651-5151
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CALCULATION OF REGISTRATION FEE
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TITLE OF SECURITIES TO BE PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AMOUNT OF
REGISTERED AMOUNT TO BE REGISTERED PRICE PER SHARE (1) AGGREGATE OFFERING PRICE (1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, par value
$.01 per share 1,650,000 shares(2) $5.4219 $8,946,135 $2,361.78
=================================================================================================================================
</TABLE>
(1) Pursuant to Rule 457(h), the proposed maximum offering price is estimated,
solely for the purpose of determining the registration fee, on the basis of
the average high and low prices of the Common Stock on the Nasdaq National
Market on April 25, 2000.
(2) Includes 1,500,000 shares to be issued as restricted stock grants or upon
the exercise of options granted and to be granted pursuant to the TrueTime,
Inc. 1999 Key Employee Stock Option Plan and 150,000 shares to be issued
upon the exercise of options granted or to be granted or in partial payment
of annual directors' fees pursuant to the TrueTime, Inc. 1999 Non-Employee
Director Plan. Also includes an indeterminable number of shares of Common
Stock issuable as a result of the anti-dilution provisions of such plans.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are hereby incorporated by reference in this
Registration Statement:
1. The Registration Statement on Form S-1 of TrueTime, Inc., a Delaware
corporation (the "Registrant") (Reg. No. 333-90269), originally filed with the
Securities and Exchange Commission (the "Commission") on November 3, 1999, as
amended by Amendment No. 1 thereto, filed with the Commission on December 2,
1999 and Amendment No. 2 thereto, filed with the Commission on December 16,
1999;
2. The description of the Registrant's Common Stock, par value $.01 per
share, contained in the Registration Statement on Form 8-A of the Registrant
(Reg. No. 000-28473), originally filed with the Commission on December 13, 1999,
including any amendment or report filed for the purpose of updating such
description; and
3. The Registrant's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1999 filed with the Commission on February 14, 2000.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act")
subsequent to the date of the filing hereof and 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.
INDEPENDENT ACCOUNTANTS
With respect to the unaudited financial information of TrueTime, Inc.
for the three-month periods ended December 31, 1999 and 1998, incorporated by
reference in this Registration Statement on Form S-8, PricewaterhouseCoopers LLP
reported that they have applied limited procedures in accordance with
professional standards for a review of such information. However, their
separate report dated February 10, 2000 incorporated by reference in the
Registration Statement herein, states that they did not audit and they do not
express an opinion on that unaudited financial information. Accordingly, the
degree of reliance on their report on such information should be restricted in
the light of the limited nature of the review procedures applied.
PricewaterhouseCoopers LLP is not subject to the liability provisions of Section
11 of the Securities Act of 1933 for their report on the unaudited financial
information because that report is not a "report" or a "part" of the
registration statement prepared or certified by PricewaterhouseCoopers LLP
within the meaning of Sections 7 and 11 of the Act.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Certain legal matters in connection with the securities offered hereby
are being passed upon for the Registrant by Fulbright & Jaworski L.L.P.,
Houston, Texas. Charles H. Still, a partner of Fulbright & Jaworski L.L.P., is
Secretary and a director of the Registrant.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware Corporation Law permits a corporation to
include in its charter documents and in agreements between the corporation and
its directors and officers provisions as to the scope of indemnification.
Article 7 of the Registrant's Certificate of Incorporation provides for
indemnification of officers and directors to the fullest extent permissible
under Delaware law.
Section 52 of TrueTime's By-laws provides for the indemnification of
officers and directors acting on behalf of TrueTime if any such person so
indemnified acted in good faith and in a manner reasonably believed to be in or
not opposed to the best interests of TrueTime, and, with respect to any criminal
action or proceeding, any such person had no reason to believe his or her
conduct was unlawful.
TrueTime has entered into indemnification agreements with its officers
and directors, in addition to indemnification provided for in TrueTime's
By-laws, and intends to enter into indemnification agreements with any new
officers and directors in the future.
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Delaware law permits TrueTime to purchase and maintain insurance on
behalf of any director, officer, employee or agent of TrueTime against any
liability asserted against or incurred by any of them in such capacity or
arising out of the status thereof as such whether or not TrueTime would have the
power to indemnify such director, officer, employee or agent against such
liability under the applicable provisions of Delaware law, the Certificate of
Incorporation or the By-laws.
The general effect of the foregoing provisions is to reduce the
circumstances in which an officer or director may be required to bear the
economic burdens of the liabilities and expenses arising from his or her service
as such.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Certificate of Incorporation of the Registrant (incorporated
by reference to Exhibit 3.1 to the Registrant's Registration
Statement on Form S-1 (Reg. No. 333-90269), filed with the
Commission on November 3, 1999).
4.2 Bylaws of the Registrant (incorporated by reference to
Exhibit 3.2 to the Registrant's Registration Statement on
Form S-1 (Reg. No. 333-90269), filed with the Commission on
November 3, 1999).
4.3 Form of Common Stock Certificate (incorporated by reference
to Exhibit 4.1 to Amendment No. 1 to the Registrant's
Registration Statement on Form S-1 (Reg. No. 333-90269),
filed with the Commission on December 2, 1999).
4.4 TrueTime, Inc. 1999 Key Employee Stock Option Plan, as
amended as of March 1, 2000.
4.3 TrueTime, Inc. 1999 Non-Employee Director Plan, as amended as
of December 16, 1999 (incorporated by reference to Exhibit
10.1 to the Registrant's Quarterly Report on Form 10-Q, filed
with the Commission on February 14, 2000).
5.1 Opinion of Fulbright & Jaworski L.L.P.
15.1 Awareness Letter of PricewaterhouseCoopers L.L.P.
23.1 Consent of PricewaterhouseCoopers L.L.P.
23.2 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit
5.1 to this Registration Statement).
24.1 Powers of Attorney (contained on page II-4 of this
Registration Statement).
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement. Notwithstanding the
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foregoing, any increase or decrease in volume of securities offered (if the
total dollar volume 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; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) 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 Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, 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.
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 Securities Act) that is
incorporated by reference in this 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.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Santa Rosa, State of California, on April 28, 2000.
TRUETIME, INC.
By: /s/ Elizabeth A. Withers
------------------------------------------
Elizabeth A. Withers
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints each of Elizabeth A. Withers and Ernest
M. Hall, Jr. 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 and all
exhibits thereto, and all documents in connection therewith, with the Securities
and Exchange Commission, granting 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 he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or his or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
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Signature Title Date
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/s/ Satoru Ohya Director April 28, 2000
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Satoru Ohya
/s/ Katsuhiko Kobayashi Chairman of the Board April 28, 2000
-------------------------------
Katsuhiko Kobayashi
President, Chief Executive Officer
/s/ Elizabeth A. Withers (Principle Executive Officer) and April 28, 2000
------------------------------- Director
Elizabeth A. Withers
Vice President and Chief
/s/ Michael P. Von der Porten Financial Officer April 28, 2000
------------------------------- (Principle Financial and
Michael P. Von der Porten Accounting Officer)
/s/ Charles J. Abbe Director April 28, 2000
-------------------------------
Charles J. Abbe
/s/ Charles H. Still Director April 28, 2000
-------------------------------
Charles H. Still
/s/ A. Robert Towbin Director April 28, 2000
-------------------------------
A. Robert Towbin
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EXHIBIT INDEX
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Exhibit
Number Description
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4.1 Certificate of Incorporation of the Registrant (incorporated
by reference to Exhibit 3.1 to the Registrant's Registration
Statement on Form S-1 (Reg. No. 333-90269), filed with the
Commission on November 3, 1999).
4.2 Bylaws of the Registrant (incorporated by reference to
Exhibit 3.2 to the Registrant's Registration Statement on
Form S-1 (Reg. No. 333-90269), filed with the Commission on
November 3, 1999).
4.3 Form of Common Stock Certificate (incorporated by reference
to Exhibit 4.1 to Amendment No. 1 to the Registrant's
Registration Statement on Form S-1 (Reg. No. 333-90269),
filed with the Commission on December 2, 1999).
4.4 TrueTime, Inc. 1999 Key Employee Stock Option Plan, as
amended as of March 1, 2000.
4.3 TrueTime, Inc. 1999 Non-Employee Director Plan, as amended as
of December 16, 1999 (incorporated by reference to Exhibit
10.1 to the Registrant's Quarterly Report on Form 10-Q, filed
with the Commission on February 14, 2000).
5.1 Opinion of Fulbright & Jaworski L.L.P.
15.1 Awareness Letter of PricewaterhouseCoopers L.L.P.
23.1 Consent of PricewaterhouseCoopers L.L.P.
23.2 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit
5.1 to this Registration Statement).
24.1 Powers of Attorney (contained on page II-4 of this
Registration Statement).
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EXHIBIT 4.4
AS AMENDED AS OF MARCH 1, 2000
TRUETIME, INC.
1999 KEY EMPLOYEE STOCK OPTION PLAN
<PAGE> 2
TRUETIME, INC.
1999 KEY EMPLOYEE STOCK OPTION PLAN
TABLE OF CONTENTS
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Section
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ARTICLE I - PLAN
Purpose...............................................................1.1
Effective Date of Plan................................................1.2
ARTICLE II - DEFINITIONS
Affiliate.............................................................2.1
Board of Directors....................................................2.2
Change of Control.....................................................2.3
Code..................................................................2.4
Committee.............................................................2.5
Company...............................................................2.6
Employee..............................................................2.7
Fair Market Value.....................................................2.8
Incentive Option......................................................2.9
Nonqualified Option..................................................2.10
Option...............................................................2.11
Option Agreement.....................................................2.12
Outside Directors....................................................2.13
Plan.................................................................2.14
Restricted Stock.....................................................2.15
Restricted Stock Agreement...........................................2.16
Restricted Stock Purchase Price......................................2.17
Stock................................................................2.18
Stock Award..........................................................2.19
Ten Percent Stockholder..............................................2.20
Voting Stock.........................................................2.21
ARTICLE III - ELIGIBILITY
ARTICLE IV - GENERAL PROVISIONS RELATING TO OPTIONS AND STOCK AWARDS
Authority to Grant Options and Stock Awards...........................4.1
Dedicated Shares......................................................4.2
Non-Transferability...................................................4.3
Requirements of Law...................................................4.4
Changes in the Company's Capital Structure............................4.5
Election Under Section 83(b) of the Code..............................4.6
</TABLE>
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<TABLE>
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ARTICLE V - OPTIONS
Type of Option........................................................5.1
Option Price..........................................................5.2
Duration of Options...................................................5.3
Amount Exercisable....................................................5.4
Exercise of Options...................................................5.5
Exercise on Termination of Employment.................................5.6
Substitution Options..................................................5.7
No Rights as Stockholder..............................................5.8
ARTICLE VI - STOCK AWARDS
Stock Awards..........................................................6.1
Restrictions..........................................................6.2
Stock Certificate.....................................................6.3
Rights as Stockholder.................................................6.4
Lapse of Restrictions.................................................6.5
Restriction Period....................................................6.6
ARTICLE VII - ADMINISTRATION
ARTICLE VIII - AMENDMENT OR TERMINATION OF PLAN
ARTICLE IX - MISCELLANEOUS
No Establishment of a Trust Fund......................................9.1
No Employment Obligation..............................................9.2
Forfeiture and Disgorgement of Profits ...............................9.3
Tax Withholding.......................................................9.4
Written Agreement.....................................................9.5
Indemnification of the Committee and the
Board of Directors...........................................9.6
Gender................................................................9.7
Headings..............................................................9.8
Other Compensation Plans..............................................9.9
Other Options or Awards..............................................9.10
Governing Law........................................................9.11
</TABLE>
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ARTICLE I
PLAN
1.1 PURPOSE. The Plan is for key employees (including officers and
employee directors), consultants and advisors of the Company and its Affiliates
and is intended to advance the best interests of the Company, its Affiliates,
and its stockholders by providing those persons who have substantial
responsibility for the management and growth of the Company and its Affiliates
with additional incentives and an opportunity to obtain or increase their
proprietary interest in the Company, thereby encouraging them to continue in the
employ of the Company or any of its Affiliates.
1.2 EFFECTIVE DATE OF PLAN. The Plan is effective December 10, 1999, if
within one year of that date it shall have been approved by at least a majority
vote of stockholders voting in person or by proxy at a duly held stockholders'
meeting, or if the provisions of the corporate charter, by-laws or applicable
state law prescribes a greater degree of stockholder approval for this action,
the approval by the holders of that percentage, at a duly held meeting of
stockholders. No Incentive Option, Nonqualified Option, or Stock Award shall be
granted pursuant to the Plan after December 9, 2009.
ARTICLE II
DEFINITIONS
The words and phrases defined in this Article shall have the meaning
set out in these definitions throughout the Plan.
2.1 "AFFILIATE" means any parent corporation and any subsidiary
corporation. The term "parent corporation" means any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company if, at the
time of the action or transaction, each of the corporations other than the
Company owns stock possessing more than 50 percent of the total combined voting
power of all classes of stock in one of the other corporations in the chain. The
term "subsidiary corporation" means any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if, at the time of
the action or transaction, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing more than 50 percent of
the total combined voting power of all classes of stock in one of the other
corporations in the chain.
2.2 "BOARD OF DIRECTORS" means the board of directors of the Company.
2.3 "CHANGE OF CONTROL" means the occurrence of one or more of the
following events:
(a) Any "person" (other than the Company or a subsidiary
thereof or any employee benefit plan thereof or OYO Corporation (Japan)
or OYO Corporation U.S.A.), including a "syndicate" or "group" as those
terms are used in Section 13(d) of the Securities Exchange Act of 1934
(the"Exchange Act"), is or becomes the "beneficial owner" (as that term
is defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 20 percent or
more of the combined voting power of the Company's then outstanding
Voting Stock;
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(b) The Company is merged or consolidated or combined in any
other manner with another corporation or entity and immediately after
giving effect to the merger or consolidation either (i) less than 80
percent of the outstanding Voting Stock of the surviving or resulting
entity are then beneficially owned in the aggregate by (x) the
stockholders of the Company immediately prior to such merger or
consolidation, or (y) if a record date has been set to determine the
stockholders of the Company entitled to vote on such merger or
consolidation, the stockholders of the Company as of such record date,
or (ii) the Board of Directors, or similar governing body, of the
surviving or resulting entity does not have as a majority of its
members the persons specified in clause (c)(a) and (b) below;
(c) If at any time the following do not constitute a majority
of the Board of Directors of the Company (or any successor entity
referred to in clause (b) above):
a. persons who are directors of the Company on
December 10, 1999; and
b. persons who, prior to their election as
directors of the Company (or successor entity if applicable)
were nominated, recommended or endorsed by a formal
resolution of the Board of Directors of the Company;
(d) If at any time during a calendar year a majority of the
directors of the Company are not persons who were directors at the
beginning of the calendar year;
(e) the Company transfers (whether by sale, lease, exchange or
otherwise) substantially all of its assets to another corporation which
is a less than 80 percent-owned, direct or indirect, subsidiary of the
Company; or
(f) the Company shall adopt or undertake any plan of
liquidation or dissolution.
2.4 "CODE" means the Internal Revenue Code of 1986, as amended.
2.5 "COMMITTEE" means the Compensation Committee of the Board of
Directors or such other committee of two or more individuals, as designated by
the Board of Directors. The Committee shall be comprised (a) solely of at least
two members who are Outside Directors or (b) of the entire Board of Directors.
2.6 "COMPANY" means TrueTime, Inc., a Delaware corporation.
2.7 "EMPLOYEE" means a person employed or retained by the Company or
any Affiliate to whom an Option or a Stock Award is granted.
2.8 "FAIR MARKET VALUE" of the Stock as of any date means (a) the
closing price of the Stock on that date on the principal securities exchange on
which the Stock is listed; or (b) if the Stock is not listed on a securities
exchange, the average of the high and low sale prices of the Stock on that date
as reported on the National Association of Securities Dealers Automated
Quotation National Market System (or successor system); or (c) if the Stock is
not listed on the National Association of Securities Dealers Automated Quotation
National Market System (or successor system), the average of the high and low
bid quotations for the Stock on that date as reported by the
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<PAGE> 6
National Quotation Bureau Incorporated; or (d) if none of the foregoing is
applicable, an amount at the election of the Committee equal to (x) the average
between the closing bid and ask prices per share of stock on the last preceding
date on which those prices were reported or (y) that amount as determined by the
Committee.
2.9 "INCENTIVE OPTION" means an option granted under the Plan which is
designated as an "Incentive Option" and satisfies the requirements of section
422 of the Code.
2.10 "NONQUALIFIED OPTION" means an option granted under the Plan other
than an Incentive Option.
2.11 "OPTION" means an Incentive Option or a Nonqualified Option
granted under the Plan to purchase shares of Stock.
2.12 "OPTION AGREEMENT" means the written agreement which sets out the
terms of an Option.
2.13 "OUTSIDE DIRECTOR" means a member of the Board of Directors
serving on the Committee who satisfied the criteria of section 162(m) of the
Code.
2.14 "PLAN" means the TrueTime, Inc. 1999 Key Employee Stock Option
Plan, as set out in this document and as it may be amended from time to time.
2.15 "RESTRICTED STOCK" means stock awarded or purchased under a
Restricted Stock Agreement entered into pursuant to the Plan, together with (i)
all rights, warranties or similar items attached or accruing thereto or
represented by the certificate representing the stock and (ii) any stock or
securities into which or for which the stock is thereafter converted or
exchanged. The terms and conditions of the Restricted Stock Agreement shall be
determined by the Committee consistent with the terms of the Plan.
2.16 "RESTRICTED STOCK AGREEMENT" means an agreement between the
Company or any Affiliate and the Employee pursuant to which the Employee
receives a Stock Award subject to Article VI.
2.17 "RESTRICTED STOCK PURCHASE PRICE" means the purchase price, if
any, per share of Restricted Stock subject to an Award. The Restricted Stock
Purchase Price shall be determined by the Committee. It may be greater than or
less than the Fair Market Value of the Stock on the date of the Stock Award.
2.18 "STOCK" means the common stock of the Company, $.01 par value or,
in the event that the outstanding shares of common stock are later changed into
or exchanged for a different class of stock or securities of the Company or
another corporation, that other stock or security.
2.19 "STOCK AWARD" means an award of Restricted Stock.
2.20 "TEN PERCENT STOCKHOLDER" means an individual who, at the time an
Incentive Option is granted, owns stock possessing more than ten percent of the
total combined voting power of all classes of stock of the Company or of any
Affiliate. An individual shall be considered as owning the stock owned, directly
or indirectly, by or for his brothers and sisters (whether by the whole or half
blood), spouse, ancestors, and lineal descendants; and stock owned, directly or
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<PAGE> 7
indirectly, by or for a corporation, partnership, estate, or trust, shall be
considered as being owned proportionately by or for its stockholders, partners,
or beneficiaries.
2.21 "VOTING STOCK" means shares of capital stock of the Company the
holders of which are entitled to vote for the election of directors of the
Company, but excluding shares entitled to so vote only upon the occurrence of a
contingency unless that contingency shall have occurred.
ARTICLE III
ELIGIBILITY
The individuals who shall be eligible to receive Incentive Options,
Nonqualified Options, and Stock Awards shall be those key employees, consultants
and advisors of the Company or any of its Affiliates as the Committee shall
determine from time to time. The Board of Directors may designate one or more
individuals who shall not be eligible to receive any Option or Stock Award under
the Plan or under other similar plans of the Company.
ARTICLE IV
GENERAL PROVISIONS RELATING TO OPTIONS AND STOCK AWARDS
4.1 AUTHORITY TO GRANT OPTIONS AND STOCK AWARDS. The Committee may
grant to those key employees, consultants and advisors of the Company or any of
its Affiliates as it shall from time to time determine, Options or Stock Awards
under the terms and conditions of the Plan. Subject only to any applicable
limitations set out in the Plan, the number of shares of Stock to be covered by
any Option or Stock Award to be granted to an Employee shall be as determined by
the Committee.
4.2 DEDICATED SHARES. The total number of shares of Stock with respect
to which Options and Stock Awards may be granted under the Plan shall be
1,500,000. The shares may be treasury shares or authorized but unissued shares.
The maximum number of shares subject to Options that may be issued to any
Employee under the Plan in any calender year is 400,000. The number of shares
stated in this Section 4.2 shall be subject to adjustment in accordance with the
provisions of Section 4.5.
In the event that any outstanding Option or Stock Award shall expire or
terminate for any reason or any Option or Stock Award is surrendered, the shares
of Stock allocable to the unexercised portion of that Option or Stock Award may
again be subject to an Option or Stock Award under the Plan.
4.3 RESTRICTIONS ON TRANSFERABILITY OF STOCK AWARDS AND OPTIONS. (a)
Except as set forth in this Section 4.3, Options shall not be transferable by
the Employee other than by will or under the laws of decent and distribution,
and shall be exercisable, during the Employee's lifetime, only by him. Any
attempt to transfer a Stock Award other than pursuant to the terms of the Plan
and the Restricted Stock Agreement shall entitle the Committee to terminate that
Stock Award and all rights of that Employee to the Restricted Stock included
therein.
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(b) The Committee may, in its discretion, permit the person to
whom an Option was granted ("Optionee") to transfer all or any part of an
Option, or may grant an Option with terms that expressly permit all or any part
of that Option to be transferred by the Optionee, in either case to (i) the
spouse, children, stepchildren, grandchildren, parents, grandparents, siblings
(including half brothers and sisters), and individuals who are family members by
adoption, of the Optionee ("Immediate Family Members"), (ii) a trust or trusts
for the exclusive benefit of one or more of the Optionee's Immediate Family
Members, or (iii) a partnership or other legal entity in which only the
Optionee's Immediate Family Members have equity or ownership interests
(collectively, "Permitted Transferees"); provided that (x) there may be no
consideration for any such transfer and (y) subsequent transfers of Options so
transferred (other than transfers by will or under the laws of decent and
distribution, transfers back to the Optionee to whom the Option was originally
granted and transfers to other Permitted Transferees of such Optionee) shall be
void.
(c) Following the transfer of any Option pursuant to paragraph
(b) above, that Option shall continue to have the same terms and provisions and
be subject to the same restrictions as were applicable immediately before that
transfer, except that references in the Plan and in the Option Agreement
applicable to such Option shall be deemed to be references to the Permitted
Transferee or Permitted Transferees; provided that any provision of Section 5.6
that would have been triggered by the termination, death, retirement or
disability of the Employee to whom the Option was originally granted will
continue to be triggered by the termination, death, retirement or disability of
such Employee."
4.4 REQUIREMENTS OF LAW. The Company shall not be required to sell or
issue any Stock under any Option or Stock Award if issuing that Stock would
constitute or result in a violation by the Employee or the Company of any
provision of any law, statute, or regulation of any governmental authority.
Specifically, in connection with any applicable statute or regulation relating
to the registration of securities, upon exercise of any Option or pursuant to
any Stock Award, the Company shall not be required to issue any Stock unless the
Committee has received evidence satisfactory to it to the effect that the holder
of that Option or Stock Award will not transfer the Stock except in accordance
with applicable law, including receipt of an opinion of counsel satisfactory to
the Company to the effect that any proposed transfer complies with applicable
law. The determination by the Committee on this matter shall be final, binding
and conclusive. The Company may, but shall in no event be obligated to, register
any Stock covered by the Plan pursuant to applicable securities laws of any
country or any political subdivision. In the event the Stock issuable on
exercise of an Option or pursuant to a Stock Award is not registered, the
Company may imprint on the certificate evidencing the Stock any legend that
counsel for the Company considers necessary or advisable to comply with
applicable law. The Company shall not be obligated to take any other affirmative
action in order to cause the exercise of an Option or vesting under a Stock
Award, or the issuance of shares under either of them, to comply with any law or
regulation of any governmental authority.
4.5 CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. The existence of
outstanding Options or Stock Awards shall not affect in any way the right or
power of the Company or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or prior preference
stock ahead of or affecting the Stock or its rights, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
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If the Company shall effect a subdivision or consolidation of shares or
other capital readjustment, the payment of a stock dividend, or other increase
or reduction of the number of shares of the Stock outstanding, without receiving
compensation for it in money, services or property, then (a) the number, class,
and per share price of shares of Stock subject to outstanding Options under the
Plan shall be appropriately adjusted in such a manner as to entitle an Employee
to receive upon exercise of an Option, for the same aggregate cash
consideration, the equivalent total number and class of shares he would have
received had he exercised his Option in full immediately prior to the event
requiring the adjustment; and (b) the number and class of shares of Stock then
reserved to be issued under the Plan shall be adjusted by substituting for the
total number and class of shares of Stock then reserved, that number and class
of shares of Stock that would have been received by the owner of an equal number
of outstanding shares of each class of Stock as the result of the event
requiring the adjustment.
If while unexercised Options remain outstanding under the Plan (i) the
Company shall not be the surviving entity in any merger, consolidation or other
reorganization (or survives only as a subsidiary of an entity other than an
entity that was wholly-owned by the Company immediately prior to such merger,
consolidation or other reorganization), (ii) the Company sells, leases or
exchanges or agrees to sell, lease or exchange all or substantially all of its
assets to any other person or entity (other than an entity wholly-owned by the
Company), (iii) the Company is to be dissolved, or (iv) the Company is a party
to any other corporate transaction (as defined under section 424(a) of the Code
and applicable Treasury Regulations) that is not described in clauses (i), (ii)
or (iii) of this sentence (each such event is referred to herein as a "Corporate
Change"), then (x) except as otherwise provided in an Option Agreement or as a
result of the Board of Directors' effectuation of one or more of the
alternatives described below, there shall be no acceleration of the time at
which any Option then outstanding may be exercised, and (y) no later than ten
days after the approval by the stockholders of the Company of such Corporate
Change, the Board of Directors, acting in its sole and absolute discretion
without the consent or approval of any Optionee, shall act to effect one or more
of the following alternatives, which may vary among individual Optionees and
which may vary among Options held by any individual Optionee:
(1) accelerate the time at which some or all of the Options
then outstanding may be exercised so that such Options may be exercised
in full for a limited period of time on or before a specified date
(before or after such Corporate Change) fixed by the Board of
Directors, after which specified date all such Options that remain
unexercised and all rights of Optionees thereunder shall terminate,
(2) require the mandatory surrender to the Company by all or
selected Optionees of some or all of the then outstanding Options held
by such Optionees (irrespective of whether such Options are then
exercisable under the provisions of the Plan or the Option Agreements
evidencing such Options) as of a date, before or after such Corporate
Change, specified by the Board of Directors, in which event the Board
of Directors shall thereupon cancel such Options and the Company shall
pay to each such Optionee an amount of cash per share equal to the
excess, if any, of the per share price offered to stockholders of the
Company in connection with such Corporate Change over the exercise
price(s) under such Options for such shares,
(3) with respect to all or selected Optionees, have some or
all of their then outstanding Options (whether vested or unvested)
assumed or have a new Option substituted for some or all of their then
outstanding Options (whether vested or unvested) by an entity which is
a party to the transaction resulting in such Corporate
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Change and which is then employing him, or a parent or subsidiary of
such entity, provided that (A) such assumption or substitution is on a
basis where the excess of the aggregate fair market value of the
shares subject to the Option immediately after the assumption or
substitution over the aggregate exercise price of such shares is equal
to the excess of the aggregate fair market value of all shares subject
to the Option immediately before such assumption or substitution over
the aggregate exercise price of such shares, and (B) the assumed
rights under such existing Option or the substituted rights under such
new Option as the case may be will have the same terms and conditions
as the rights under the existing Option assumed or substituted for, as
the case may be,
(4) provide that the number and class of shares of Stock
covered by an Option (whether vested or unvested) theretofore granted
shall be adjusted so that such Option when exercised shall thereafter
cover the number and class of shares of stock or other securities or
property (including, without limitation, cash) to which the Optionee
would have been entitled pursuant to the terms of the agreement and/or
plan relating to such Corporate Change if, immediately prior to such
Corporate Change, the Optionee had been the holder of record of the
number of shares of Stock then covered by such Option, or
(5) make such adjustments to Options then outstanding as the
Board of Directors deems appropriate to reflect such Corporate Change
(provided, however, that the Board of Directors may determine in its
sole and absolute discretion that no such adjustment is necessary).
In effecting one or more of alternatives (3), (4) or (5)
above, and except as otherwise may be provided in an Option Agreement,
the Board of Directors, in its sole and absolute discretion and without
the consent or approval of any Optionee, may accelerate the time at
which some or all Options then outstanding may be exercised.
In the event of changes in the outstanding Stock by reason of
recapitalizations, reorganizations, mergers, consolidations, combinations,
exchanges or other relevant changes in capitalization occurring after the date
of the grant of any Option and not otherwise provided for by this Section 4.5,
any outstanding Options and any agreements evidencing such Options shall be
subject to adjustment by the Board of Directors in its sole and absolute
discretion as to the number and price of shares of stock or other consideration
subject to such Options. In the event of any such change in the outstanding
Stock, the aggregate number of shares available under the Plan may be
appropriately adjusted by the Board of Directors, whose determination shall be
conclusive.
After a merger of one or more corporations into the Company or after a
consolidation of the Company and one or more corporations in which the Company
shall be the surviving corporation, each Employee shall be entitled to have his
Restricted Stock appropriately adjusted based on the manner the Stock was
adjusted under the terms of the agreement of merger or consolidation.
The issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, for cash or property, or for
labor or services either upon direct sale or upon the exercise of rights or
warrants to subscribe for them, or upon conversion of shares or obligations of
the Company convertible into shares or other securities, shall not affect, and
no adjustment by reason
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of such issuance shall be made with respect to, the number, class, or price of
shares of Stock then subject to outstanding Options or Stock Awards.
4.6 ELECTION UNDER SECTION 83(b) OF THE CODE. If any Employee exercises
the election permitted under section 83(b) of the Code, that Employee shall,
within ten days of making the election, (i) notify the Committee that he has
made the election and (ii) pay to the Company, in immediately available funds,
an amount equal to the additional amount, if any, that the Company will be
required to withhold under applicable tax law as a result of such election. If
the Employee fails to make such payment or otherwise provide for such payment,
then the Company shall be entitled to deduct such sums from other compensation
payable to such Employee or the Committee shall be entitled to rescind the Stock
Award subject to such election.
ARTICLE V
OPTIONS
5.1 TYPE OF OPTION. The Committee shall specify whether a given option
shall constitute an Incentive Option or a Nonqualified Option.
5.2 OPTION PRICE. The price at which Stock may be purchased under an
Incentive Option shall not be less than the greater of: (a) 100 percent of the
Fair Market Value of the shares of Stock on the date the Option is granted or
(b) the aggregate par value of the shares of Stock on the date the Option is
granted. The Committee in its discretion may provide that the price at which
shares of Stock may be purchased under an Incentive Option shall be more than
100 percent of Fair Market Value. In the case of any Ten Percent Stockholder,
the price at which shares of Stock may be purchased under an Incentive Option
shall not be less than 110 percent of the Fair Market Value of the Stock on the
date the Incentive Option is granted.
The price at which shares of Stock may be purchased under a
Nonqualified Option shall not be less than the greater of: (a) 100 percent of
the Fair Market Value of the shares of Stock on the date the Option is granted
or (b) the aggregate par value of the shares of Stock on the date the Option is
granted. The Committee in its discretion may provide that the price at which
shares of Stock may be purchased under a Nonqualified Option shall be more than
100 percent of Fair Market Value.
5.3 DURATION OF OPTIONS. No Option shall be exercisable after the
expiration of ten years from the date the Option is granted. In the case of a
Ten Percent Stockholder, no Incentive Option shall be exercisable after the
expiration of five years from the date the Incentive Option is granted.
5.4 AMOUNT EXERCISABLE. Each Option may be exercised from time to time,
in whole or in part, in the manner and subject to the conditions the Committee,
in its sole discretion, may provide in the Option Agreement, as long as the
Option is valid and outstanding, provided that no Option may be exercisable
within six months of the date of grant. Unless provided otherwise in the Option
Agreement, 25 percent of the shares of Stock in an Option shall become
exercisable on the first anniversary of the date of grant, and an additional 25
percent shall become exercisable on each of the next three anniversary dates.
Notwithstanding any other provisions of the Plan, in the event of a Change of
Control, each Option shall become immediately exercisable in full.
5.5 INCENTIVE OPTION. To the extent that the aggregate Fair Market
Value (determined as of the time an Incentive Option is granted) of the Stock
with respect to which Incentive Options
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first become exercisable by the Optionee during any calendar year (under the
Plan and any other incentive stock option plan(s) of the Company or any
Affiliate) exceeds $100,000, the Incentive Options shall be treated as
Nonqualified Options. In making this determination, Incentive Options and such
other incentive stock options shall be taken into account in the order in which
they were granted.
5.6 EXERCISE OF OPTIONS. Each Option shall be exercised by the delivery
of written notice to the Committee setting forth the number of shares of Stock
with respect to which the Option is to be exercised, together with: (a) cash,
check, bank draft, or postal or express money order payable to the order of the
Company for an amount equal to the option price of the shares, (b) Stock at its
Fair Market Value on the date of exercise, and/or (c) any other form of payment
which is acceptable to the Committee, and specifying the address to which the
certificates for the shares are to be mailed. As promptly as practicable after
receipt of written notification and payment, the Company shall deliver to the
Employee certificates for the number of shares with respect to which the Option
has been exercised, issued in the Employee's name. If shares of Stock are used
in payment, the aggregate Fair Market Value of the shares of Stock tendered must
be equal to or less than the aggregate exercise price of the shares being
purchased upon exercise of the Option, and any difference must be paid by cash,
check, bank draft, or postal or express money order payable to the order of the
Company. Delivery of the shares shall be deemed effected for all purposes when a
stock transfer agent of the Company shall have deposited the certificates in the
United States mail, addressed to the Employee, at the address specified by the
Employee.
Whenever an Option is exercised by exchanging shares of Stock owned by
the Employee, the Employee shall deliver to the Company certificates registered
in the name of the Employee representing a number of shares of Stock legally and
beneficially owned by the Employee, free of all liens, claims, and encumbrances
of every kind, accompanied by stock powers duly endorsed in blank by the record
holder of the shares represented by the certificates (with signature guaranteed
by a commercial bank or trust company or by a brokerage firm having a membership
on a registered national stock exchange). The delivery of certificates upon the
exercise of Options is subject to the condition that the person exercising the
Option provide the Company with the information the Company might reasonably
request pertaining to exercise, sale or other disposition.
5.7 EXERCISE ON TERMINATION OF EMPLOYMENT. Unless it is expressly
provided otherwise in the Option Agreement, Options shall terminate one day less
than three months after severance of employment of the Employee from the Company
and all Affiliates for any reason, with or without cause, other than death or
retirement or disability under the then established rules of the Company.
Whether authorized leave of absence or absence on military or government service
shall constitute severance of the employment of the Employee shall be determined
by the Committee at that time.
In determining the employment relationship between the Company and the
Employee, employment by any Affiliate shall be considered employment by the
Company, as shall employment by a corporation issuing or assuming a stock option
in a transaction to which section 424(a) of the Code applies, or by a parent
corporation or subsidiary corporation of the corporation issuing or assuming a
stock option (and for this purpose, the phrase "corporation issuing or assuming
a stock option" shall be substituted for the word "Company" in the definitions
of parent corporation and subsidiary corporation in Section 2.1, and the
parent-subsidiary relationship shall be determined at the time of the corporate
action described in section 424(a) of the Code).
5.8 DEATH. If, before the expiration of an Option, the Employee, whether
in the employ of the Company or after he has retired or was severed for
disability, dies, the Option shall continue
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until the earlier of the Option's expiration date or one year following the date
of his death, unless it is expressly provided otherwise in the Option Agreement.
After the death of the Employee, his executors, administrators or any persons to
whom his Option may be transferred by will or by the laws of descent and
distribution shall have the right, at any time prior to the Option's expiration
or termination, whichever is earlier, to exercise it, to the extent to which he
was entitled to exercise it immediately prior to his death, unless it is
expressly provided otherwise in the Option Agreement.
5.9 RETIREMENT. If, before the expiration of an Incentive Option, the
Employee shall be retired in good standing from the employ of the Company under
the then established rules of the Company, the Incentive Option shall terminate
on the earlier of the Option's expiration date or one year after his retirement.
An Incentive Option may become a Nonqualified Option if exercised more than
three months after termination of employment.
Unless it is expressly provided otherwise in the Option Agreement, if
before the expiration of a Nonqualified Option, the Employee shall be retired in
good standing from the employ of the Company under the then established rules of
the Company, the Nonqualified Option shall terminate on the earlier of the
Nonqualified Option's expiration date or one year after his retirement. In the
event of retirement, the Employee shall have the right prior to the expiration
or termination of the Nonqualified Option to exercise the Nonqualified Option,
to the extent to which he was entitled to exercise it immediately prior to his
retirement, unless it is expressly provided otherwise in the Option Agreement.
5.10 DISABILITY. If, before the expiration of an Option, the Employee
shall be severed from the employ of the Company for disability, the Option shall
terminate on the earlier of the Option's expiration date or one day less than
one year after the date he was severed because of disability, unless it is
expressly provided otherwise in the Option Agreement. In the event that the
Employee shall be severed from the employ of the Company for disability, the
Employee shall have the right prior to the termination of the Option to exercise
the Option, to the extent to which he was entitled to exercise it immediately
prior to his severance of employment for disability, unless it is expressly
provided otherwise in the Option Agreement.
5.11 SUBSTITUTION OPTIONS. Options may be granted under the Plan from
time to time in substitution for stock options held by employees of other
corporations who are about to become employees of or affiliated with the Company
or any Affiliate as the result of a merger or consolidation of the employing
corporation with the Company or any Affiliate, or the acquisition by the Company
or any Affiliate of the assets of the employing corporation, or the acquisition
by the Company or any Affiliate of stock of the employing corporation as the
result of which it becomes an Affiliate of the Company. The terms and conditions
of the substitute Options granted may vary from the terms and conditions set out
in the Plan to the extent the Committee, at the time of grant, may deem
appropriate to conform, in whole or in part, to the provisions of the stock
options in substitution for which they are granted.
5.12 NO RIGHTS AS STOCKHOLDER. No Employee shall have any rights as a
stockholder with respect to Stock covered by his Option until the date a stock
certificate is issued for the Stock.
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ARTICLE VI
STOCK AWARDS
6.1 STOCK AWARDS. The Committee may issue shares of Stock to an
eligible employee, consultant or advisor subject to the terms of a Restricted
Stock Agreement. The Restricted Stock may be issued for no payment by the
Employee or for a payment below the Fair Market Value on the date of grant.
Restricted Stock shall be subject to restrictions as to sale, transfer,
alienation, pledge or other encumbrance and generally will be subject to vesting
over a period of time specified in the Restricted Stock Agreement. The Committee
shall determine the period of vesting, the number of shares, the price, if any,
of Stock included in a Stock Award, and the other terms and provisions which are
included in a Restricted Stock Agreement. Notwithstanding any other provisions
of the Plan, in the event of a Change of Control, each Stock Award shall become
immediately vested.
6.2 RESTRICTIONS. Restricted Stock shall be subject to the following
terms and conditions as determined by the Committee, including without
limitation any or all of the following:
(a) a prohibition against the sale, transfer, alienation,
pledge or other encumbrance of the shares of Restricted Stock, such
prohibition to lapse (i) at such time or times as the Committee shall
determine (whether in annual or more frequent installments, at the time
of the death, disability or retirement of the holder of such shares, or
otherwise);
(b) a requirement that the holder of shares of Restricted
Stock forfeit, or in the case of shares sold to an Employee, resell
back to the Company at his cost, all or a part of such shares in the
event of termination of the holder's employment during any period in
which the shares remain subject to restrictions;
(c) a prohibition against employment of the holder of
Restricted Stock by any competitor of the Company or its Affiliates, or
against such holder's dissemination of any secret or confidential
information belonging to the Company or an Affiliate; and
(d) unless stated otherwise in the Restricted Stock Agreement,
(i) if restrictions remain at the time of severance of employment with
the Company and all Affiliates, other than for reason of disability or
death, the Restricted Stock shall be forfeited; and (ii) if severance
of employment is by reason of disability or death, the restrictions on
the shares shall lapse and the Employee or his heirs or estate shall be
100 percent vested in the shares subject to the Restricted Stock
Agreement.
6.3 STOCK CERTIFICATE. Shares of Restricted Stock shall be registered
in the name of the Employee receiving the Stock Award and deposited, together
with a stock power endorsed in blank, with the Company. Each such certificate
shall bear a legend in substantially the following form:
The transferability of this certificate and the shares of Stock
represented by it is restricted by and subject to the terms and
conditions (including conditions of forfeiture) contained in the
TrueTime, Inc. 1999 Key Employee Stock Option Plan, and an agreement
entered into between the registered owner and the Company. A
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copy of the Plan and agreement is on file in the office of the
Secretary of the Company.
6.4 RIGHTS AS STOCKHOLDER. Subject to the terms and conditions of the
Plan, each Employee receiving a certificate for Restricted Stock shall have all
the rights of a stockholder with respect to the shares of Stock included in the
Stock Award during any period in which such shares are subject to forfeiture
and restrictions on transfer, including without limitation, the right to vote
such shares. Dividends paid with respect to shares of Restricted Stock in cash
or property other than stock in the Company or rights to acquire stock in the
Company shall be paid to the Employee currently. Dividends paid in stock in the
Company or rights to acquire stock in the Company shall be added to and become a
part of the Restricted Stock.
6.5 LAPSE OF RESTRICTIONS. At the end of the time period during which
any shares of Restricted Stock are subject to forfeiture and restrictions on
sale, transfer, alienation, pledge, or other encumbrance, such shares shall vest
and will be delivered in a certificate, free of all restrictions, to the
Employee or to the Employee's legal representative, beneficiary or heir;
provided the certificate shall bear such legend, if any, as the Committee
determines is reasonably required by applicable law.
By accepting a Stock Award and executing a Restricted Stock Agreement,
the Employee agrees to remit when due any federal and state income and
employment taxes required to be withheld or to satisfy this obligation in a
manner acceptable to the Committee.
6.6 RESTRICTION PERIOD. No Stock Award may provide for restrictions
continuing beyond ten years from the date of the Stock Award.
ARTICLE VII
ADMINISTRATION
The Plan shall be administered by the Committee. All questions of
interpretation and application of the Plan, Options or Stock Awards shall be
subject to the determination of the Committee. A majority of the members of the
Committee shall constitute a quorum. All determinations of the Committee shall
be made by a majority of its members. Any decision or determination reduced to
writing and signed and dated by all of the members shall be as effective as if
it had been made by a majority vote at a meeting properly called and held. The
Plan shall be administered in such a manner as to permit the Options granted
under it which are designated to be Incentive Options to qualify as Incentive
Options. In carrying out its authority under the Plan, the Committee shall have
full and final authority and discretion, including but not limited to the
following rights, powers and authorities, to:
(a) determine the Employees to whom and the time or
times at which Options or Stock Awards will be made,
(b) determine the number of shares and the purchase
price of Stock covered in each Option or Stock Award, subject to the
terms of the Plan,
(c) determine the terms, provisions and conditions of
each Option and Stock Award, which need not be identical,
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(d) accelerate the time at which any outstanding Option
may be exercised,
(e) define the effect, if any, on an Option or Stock
Award of the death, disability, retirement, or termination of
employment of the Employee,
(f) prescribe, amend and rescind rules and regulations
relating to administration of the Plan, and
(g) make all other determinations and take all other
actions deemed necessary, appropriate, or advisable for the proper
administration of the Plan.
The actions of the Committee in exercising all of the rights, powers, and
authorities set out in this Article and all other Articles of the Plan, when
performed in good faith and in its sole judgment, shall be final, conclusive and
binding on all parties.
ARTICLE VIII
AMENDMENT OR TERMINATION OF PLAN
The Board of Directors of the Company may amend, terminate or suspend
the Plan at any time, in its sole and absolute discretion; provided, however,
that, to the extent required to maintain the status of any Incentive Option
under the Code, no amendment that would (a) change the aggregate number of
shares of Stock which may be issued under Incentive Options, (b) change the
class of employees, consultants and advisors eligible to receive Incentive
Options, or (c) decrease the Option price for Incentive Options below the Fair
Market Value of the Stock at the time it is granted, shall be made without the
approval of the Company's stockholders. Subject to the preceding sentence, the
Board shall have the power to make any changes in the Plan and in the
regulations and administrative provisions under it or in any outstanding
Incentive Option as in the opinion of counsel for the Company may be necessary
or appropriate from time to time to enable any Incentive Option granted under
the Plan to continue to qualify as an incentive stock option or such other stock
option as may be defined under the Code so as to receive preferential federal
income tax treatment.
ARTICLE IX
MISCELLANEOUS
9.1 NO ESTABLISHMENT OF A TRUST FUND. No property shall be set aside
nor shall a trust fund of any kind be established to secure the rights of any
Employee under the Plan. All Employees shall at all times rely solely upon the
general credit of the Company for the payment of any benefit which becomes
payable under the Plan.
9.2 NO EMPLOYMENT OBLIGATION. The granting of any Option or Stock Award
shall not constitute an employment contract, express or implied, nor impose upon
the Company or any Affiliate any obligation to employ or continue to employ any
Employee. The right of the Company or any Affiliate to terminate the employment
of any person shall not be diminished or affected by reason of the fact that an
Option or Stock Award has been granted to him.
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9.3 FORFEITURE AND DISGORGEMENT OF PROFITS. Notwithstanding any other
provisions of the Plan, if the Committee finds by a majority vote after full
consideration of the facts that the Employee, before or after termination of his
employment with the Company or an Affiliate for any reason (a) committed or
engaged in fraud, embezzlement, theft, commission of a felony, or proven
dishonesty in the course of his employment by the Company or an Affiliate, which
conduct damaged the Company or Affiliate, or disclosed trade secrets of the
Company or an Affiliate, or (b) participated, engaged in or had a material,
financial or other interest, whether as an employee, officer, director,
consultant, contractor, stockholder, owner, or otherwise, in any commercial
endeavor in the United States which is competitive with the business of the
Company or an Affiliate without the written consent of the Company or Affiliate,
the Employee shall forfeit all outstanding Options and all outstanding Stock
Awards, and including all exercised Options and other situations pursuant to
which the Company has not yet delivered a stock certificate. Clause (b) shall
not be deemed to have been violated solely by reason of the Employee's ownership
of stock or securities of any publicly traded corporation, if that ownership
does not result in effective control of the corporation.
The decision of the Committee as to the cause of the Employee's
discharge, the damage done to the Company or an Affiliate, and the extent of the
Employee's competitive activity shall be final. No decision of the Committee,
however, shall affect the finality of the discharge of the Employee by the
Company or an Affiliate in any manner.
If an Option or Stock Award would be forfeited pursuant to this Section
9.3 but for the fact that the Option has been exercised or the Stock Award has
vested, the Employee must, upon demand by the Company, which demand must be made
within 90 days of the Company's discovery of the violation and within 24 months
of the Employee's severance of employment, (i) in the case of an Option, sell to
the Company, for the exercise price of the Option, the Stock purchased under the
Option, (ii) deliver to the Company cash in an amount equal to the proceeds the
Employee realized upon the Employee's sale of the Stock minus the amount the
Employee paid to purchase the Stock, or (iii) deliver to the Company all of the
shares of Stock acquired under a Stock Award or pursuant to the exercise of an
Option.
9.4 TAX WITHHOLDING. The Company or any Affiliate shall be entitled to
deduct from other compensation payable to each Employee any sums required by
federal, state, or local tax law to be withheld with respect to the grant or
exercise of an Option or lapse of restrictions on Restricted Stock. In the
alternative, the Company may require the Employee (or other person exercising
the Option or receiving the Restricted Stock) to pay the sum directly to the
employer corporation. If the Employee (or other person exercising the Option or
receiving the Restricted Stock) is required to pay the sum directly, payment in
cash or by check of such sums for taxes shall be delivered within ten days after
the date of exercise or lapse of restrictions. The Company shall have no
obligation upon exercise of any Option or lapse of restrictions on Restricted
Stock until payment has been received, unless withholding (or offset against a
cash payment) as of or prior to the date of exercise or lapse of restrictions is
sufficient to cover all sums due with respect to that exercise. The Company and
its Affiliates shall not be obligated to advise an Employee of the existence of
the tax or the amount which the employer corporation will be required to
withhold.
9.5 WRITTEN AGREEMENT. Each Option and Stock Award shall be embodied in
a written Option Agreement or Restricted Stock Agreement which shall be subject
to the terms and conditions of the Plan and shall be signed (i) by the Employee
and (ii) by a member of the Committee on behalf of the Committee and the
Company, or by an executive officer of the Company other than the Employee on
behalf of the Company. The Option Agreement or Restricted Stock Agreement may
14
<PAGE> 18
contain any other provisions that the Committee in its discretion shall deem
advisable which are not inconsistent with the terms of the Plan.
9.6 INDEMNIFICATION OF THE COMMITTEE AND THE BOARD OF DIRECTORS. With
respect to administration of the Plan, the Company shall indemnify each present
and future member of the Committee and the Board of Directors against, and each
member of the Committee and the Board of Directors shall be entitled without
further act on his part to indemnity from the Company for, all expenses
(including attorney's fees, the amount of judgments and the amount of approved
settlements made with a view to the curtailment of costs of litigation, other
than amounts paid to the Company itself) reasonably incurred by him in
connection with or arising out of any action, suit, or proceeding in which he
may be involved by reason of his being or having been a member of the Committee
and/or the Board of Directors, whether or not he continues to be a member of the
Committee and/or the Board of Directors at the time of incurring the expenses --
including, without limitation, matters as to which he shall be finally adjudged
in any action, suit or proceeding to have been found to have been negligent in
the performance of his duty as a member of the Committee or the Board of
Directors. However, this indemnity shall not include any expenses incurred by
any member of the Committee and/or the Board of Directors in respect of matters
as to which he shall be finally adjudged in any action, suit or proceeding to
have been guilty of gross negligence or willful misconduct in the performance of
his duty as a member of the Committee and the Board of Directors, or in respect
of any matter in which any settlement is effected, to an amount in excess of the
amount approved by the Company on the advice of its legal counsel. In addition,
no right of indemnification under the Plan shall be available to or enforceable
by any member of the Committee and the Board of Directors unless, within 60 days
after institution of any action, suit or proceeding, he shall have offered the
Company, in writing, the opportunity to handle and defend same at its own
expense. This right of indemnification shall inure to the benefit of the heirs,
executors or administrators of each member of the Committee and the Board of
Directors and shall be in addition to all other rights to which a member of the
Committee and the Board of Directors may be entitled as a matter of law,
contract, or otherwise.
9.7 GENDER. If the context requires, words of one gender when used in
the Plan shall include the others and words used in the singular or plural shall
include the other.
9.8 HEADINGS. Headings of Articles and Sections are included for
convenience of reference only and do not constitute part of the Plan and shall
not be used in construing the terms of the Plan.
9.9 OTHER COMPENSATION PLANS. The adoption of the Plan shall not affect
any other stock option, incentive or other compensation or benefit plans in
effect for the Company or any Affiliate, nor shall the Plan preclude the Company
from establishing any other forms of incentive or other compensation for
employees, consultants and advisors of the Company or any Affiliate.
9.10 OTHER OPTIONS OR AWARDS. The grant of an Option or Stock Award
shall not confer upon the Employee the right to receive any future or other
Options or Stock Awards under the Plan, whether or not Options or Stock Awards
may be granted to similarly situated Employees, or the right to receive future
Options or Stock Awards upon the same terms or conditions as previously granted.
9.11 GOVERNING LAW. The provisions of the Plan shall be construed,
administered, and governed under the laws of the State of Delaware.
15
<PAGE> 1
EXHIBIT 5.1
April 28, 2000
TrueTime, Inc.
2835 Duke Court
Santa Rosa, California 95407
Gentlemen:
We have acted as counsel for TrueTime, Inc., a Delaware corporation
(the "Registrant"), in connection with the registration under the Securities Act
of 1933 of an aggregate of 1,650,000 shares of the Registrant's common stock,
par value $.01 per share (the "Shares"), 1,500,000 shares of which are to be
offered upon the terms and subject to the conditions set forth in the
Registrant's 1999 Key Employee Stock Option Plan, as amended (the "Employee
Plan"), and 150,000 shares of which are to be offered upon the terms and subject
to the conditions set forth in the Registrant's 1999 Non-Employee Director Stock
Plan, as amended (the "Director Plan").
In connection therewith, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the Certificate of
Incorporation of the Registrant, the Bylaws of the Registrant, the Employee
Plan, the Director Plan, the records of relevant corporate proceedings with
respect to the offering of the Shares and such other documents and instruments
as we have deemed necessary or appropriate for the expression of the opinions
contained herein. We also have examined the Registrant's Registration Statement
on Form S-8 (the "Registration Statement") to be filed with the Securities and
Exchange Commission with respect to the Shares.
We have assumed the authenticity and completeness of all records,
certificates and other instruments submitted to us as originals, the conformity
to original documents of all records, certificates and other instruments
submitted to us as copies, the authenticity and completeness of the originals of
those records, certificates and other instruments submitted to us as copies and
the correctness of all statements of fact contained in all records, certificates
and other instruments that we have examined.
Based on the foregoing, and having regard for such legal considerations
as we have deemed relevant, we are of the opinion that the Shares have been duly
and validly authorized for issuance and, when issued in accordance with the
terms of the Employee Plan or the Director Plan, as the case may be, will be
duly and validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our name under the caption "Item
5. Interests of Named Experts and Counsel" in the Registration Statement.
Very truly yours,
/s/ FULBRIGHT & JAWORSKI L.L.P.
-------------------------------
Fulbright & Jaworski L.L.P.
<PAGE> 1
EXHIBIT 15.1
[PwC Letterhead]
April 27, 2000
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Commissioners:
We are aware that our report dated February 10, 2000 on our review of
interim financial information of TrueTime, Inc. (the "Company") as of and for
the period ended December 31, 1999 and included in the Company's quarterly
report on Form 10-Q for the quarter then ended is incorporated by reference in
its Registration Statement dated April 28, 2000.
Very truly yours,
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated November 2, 1999, except
for Note 8, as to which the date is December 1, 1999 relating to the financial
statements of TrueTime, Inc., which appear on Form S-1 (Reg. No. 333-90269).
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
San Francisco, California
April 27, 2000
