<PAGE>
As filed with the Securities and Exchange Commission on October 14, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________
FORM S-8
REGISTRATION STATEMENT
under
The Securities Act of 1933
C-COR.net Corp.
---------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 24-0811591
- ---------------------------------------------------- ---------------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
60 Decibel Road
State College, Pennsylvania 16801
---------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
C-COR.net Corp. Stock Option Plan (For Employees of Silicon Valley
------------------------------------------------------------------
Communications, Inc.)
---------------------
(Full title of the plan)
David A. Woodle, President and CEO
C-COR.net Corp.
60 Decibel Road
State College, Pennsylvania 16801
-------------------------------------
(Name and address of agent for service)
(814) 238-2461
-------------------------------------------------------
(Telephone number, including area code, of agent for service)
with a copy to:
Robert C. Gerlach, Esquire
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51st Floor
Philadelphia, Pennsylvania 19103
(215) 665-8500
CALCULATION OF REGISTRATION FEE
-------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered(1) Share Price Fee
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
par value $.10 160,000 $(2) $329,058(2) $914.78
per share shares
</TABLE>
- ----------------------------------------------------------------------------
(1) Pursuant to Rule 416(a) under the Securities Act of 1933, this Registration
Statement shall be deemed to cover an indeterminate number of additional
shares of Common Stock issuable in the event the number of outstanding
shares of the Registrant is increased by stock split, reclassification,
stock dividend and similar transactions.
(2) In accordance with Rules 457(c) and (h), the price shown is based upon
160,000 shares offered pursuant to options outstanding exercisable at the
following prices: (i) 5,046 shares at $0.11 per share and (ii) 154,954
shares at $2.12 per share.
<PAGE>
PART I - INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I of this
Registration Statement will be given or sent to all persons who participate in
the C-COR.net Corp. Stock Option Plan (for employees of Silicon Valley
Communications, Inc.) (the "Plan").
PART II - INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
----------------------------------------
The following documents filed with the Commission pursuant to the
Securities Exchange Act of 1934 (the "Exchange Act") by C-COR.net Corp. (the
"Company") (File No. 0-10726) are incorporated herein by reference: (1) the
Company's Annual Report on Form 10-K for the year ended June 25, 1999, as
amended by Form 10-K/A; (2) the Company's Current Reports on Form 8-K filed on
July 15, 1999, July 26, 1999, August 2, 1999 and September 24, 1999 (as amended
by Form 8-K/A filed on October 13, 1999); (3) the description of the Company's
Common Stock contained in the Company's Registration Statement on Form 8-A filed
with the Commission on October 27, 1982 (as amended by Form 8 filed with the
Commission on July 3, 1990); and (4) the description of the Company's Series A
Junior Participating Preferred Stock Purchase Rights contained in the Company's
Registration Statement on Form 8-A filed with the Commission under the Exchange
Act on August 30, 1999.
Each document filed by the Company after the date hereof pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and shall be part
hereof from the date of filing of such document.
Item 4. Description of Securities.
--------------------------
Not applicable
Item 5. Interests of Named Experts and Counsel.
---------------------------------------
Not applicable.
Item 6. Indemnification of Directors and Officers.
------------------------------------------
Sections 1741 through 1750 of the Pennsylvania Business Corporation
Law of 1988 permits, and in some cases requires, the indemnification of
officers, directors and employees of the Company. Article VII-Section 7-1 of the
Company's bylaws provides that the Company shall indemnify any director or
officer of the Company against expenses (including legal fees), judgments, fines
and amounts paid in settlement, actually and reasonably incurred by him, to the
fullest extent now or hereafter permitted by law in connection with any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or
<PAGE>
investigative, brought or threatened to be brought against him, including
actions or suits by or in the right of the Company, by reason of the fact that
he is or was a director or officer of the Company, its parent or any of its
subsidiaries, or acted as a director or officer or in any other capacity on
behalf of the Company, its parent or any of its subsidiaries or is or was
serving at the request of the Company as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise.
The Board of Directors by resolution may similarly indemnify any
person other than a director or officer of the Company to the fullest extent now
or hereafter permitted by law for liabilities incurred by him in connection with
services rendered by him for or at the request of the Company, its parent or any
of its subsidiaries.
Item 7. Exemption from Registration Claimed.
------------------------------------
Not applicable.
Item 8. Exhibits.
---------
4 Specimen copy of Common Stock certificate (incorporated by reference
to Exhibit 4 to the Registrant's Registration Statement on Form S-8,
File No. 2-95959)
5 Opinion of Ballard Spahr Andrews & Ingersoll, LLP
23.1 Consent of KPMG LLP (State College, PA)
23.2 Consent of KPMG LLP (Atlanta, GA)
23.3 Consent of KPMG LLP (Mountain View, CA)
23.4 Consent of Ballard Spahr Andrews & Ingersoll, LLP (included in Exhibit
5)
24 Power of Attorney (included on signature page)
99 C-COR.net Corp. Stock Option Plan (For Employees of Silicon Valley
Communications, Inc.)
Item 9. Undertakings.
-------------
A. The Company hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement: (i) to include
any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii)
to reflect in the prospectus any facts or events
2
<PAGE>
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; and (iii) to
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement; provided, however, that clauses
(i) and (ii) above 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 by the
Company pursuant to Section 13 or Section 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The Company hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the Company's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company 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 Company will, unless in the opinion of its counsel the matter
3
<PAGE>
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act, and will be governed by the final adjudication
of such issue.
4
<PAGE>
SIGNATURES
The Registrant. 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 State College, Commonwealth of Pennsylvania, on
October 14, 1999.
C-COR.net CORP.
By: /s/ David A. Woodle
----------------------
David A. Woodle
President and Chief
Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints, DAVID A. WOODLE and WILLIAM T. HANELLY
and each of them, as true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or 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, granting unto
said attorneys-in-fact and agents full power and authority to do and be done in
connection with the above premises, 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 their or his 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.
Signature Title Date
--------- ----- ----
/s/ David A. Woodle President and Chief October 14, 1999
- ---------------------
David A. Woodle Executive Officer and
Director (Principal Executive
Officer)
5
<PAGE>
Signature Title Date
--------- ----- ----
/s/ Richard E. Perry Chairman October 14, 1999
- ----------------------------
Richard E. Perry
/s/ I.N. Rendall Harper, Jr. Director October 14, 1999
- ----------------------------
I.N. Rendall Harper, Jr.
/s/ John J. Omlor Director October 14, 1999
- -------------------------
John J. Omlor
/s/ Frank Rusinko, Jr. Director October 14, 1999
- -------------------------
Frank Rusinko, Jr.
/s/ James J. Tietjen Director October 14, 1999
- -------------------------
James J. Tietjen
/s/ William T. Hanelly Vice President - October 14, 1999
- -------------------------
William T. Hanelly Finance, Treasurer
and Secretary (Principal
Financial Officer)
/s/ Joseph E. Zavacky Controller and October 14, 1999
- -------------------------
Joseph E. Zavacky Assistant Secretary
(Principal Accounting
Officer)
<PAGE>
EXHIBIT INDEX
Number Exhibit
- ------ -------
4 Specimen copy of Common Stock certificate (incorporated by
reference to Exhibit 4 to the Registrant's registration
statement on Form S-8, File No. 2-95959)
5 Opinion of Ballard Spahr Andrews & Ingersoll, LLP
23.1 Consent of KPMG, LLP (State College, PA)
23.2 Consent of KPMG LLP (Atlanta, GA)
23.3 Consent of KPMG LLP (Mountain View, CA)
23.4 Consent of Ballard Spahr Andrews & Ingersoll, LLP (included
in Exhibit 5)
24 Power of Attorney (included on signature page)
99 C-COR.net Corp. Stock Option Plan (For Employees of Silicon
Valley Communications, Inc.)
<PAGE>
Exhibit 5
October 14, 1999
C-COR.net Corp.
60 Decibel Road
State College, PA 16801
Re: Registration Statement on Form S-8
----------------------------------
Ladies and Gentlemen:
We have acted as special counsel to C-COR.net Corp. (the "Company") in
connection with the registration under the Securities Act of 1933, as amended,
of 160,000 shares of common stock of the Company, par value $.10 per share (the
"Shares"), issuable under the C-COR.net Corp. Stock Option Plan (For Employees
of Silicon Valley Communications, Inc.) (the "Plan").
In rendering our opinion, we have reviewed the Plan and such
certificates, documents, corporate records and other instruments as in our
judgment are necessary or appropriate to enable us to render the opinion
expressed below. In giving this opinion, we are assuming the authenticity of
all instruments presented to us as originals, the conformity with the originals
of all instruments presented to us as copies and the genuineness of all
signatures.
Based on the foregoing, we are of the opinion that the Shares, when
issued in accordance with the terms of the Plan, will be legally issued, fully
paid and nonassessable.
We consent to the filing of this opinion as Exhibit 5 to the
Registration Statement on Form S-8 being filed with respect to the offering of
the Shares.
This opinion is limited to the matters expressly stated herein. No
implied opinion may be inferred to extend this opinion beyond the matters
expressly stated herein. We do not undertake to advise you or anyone else of
any changes in the opinions expressed herein resulting from changes in law,
changes in facts or any other matters that hereafter might occur or be brought
to our attention.
Very truly yours,
/s/ Ballard Spahr Andrews & Ingersoll, LLP
<PAGE>
Exhibit 23.1
Consent of Independent Auditors
The Board of Directors and Stockholders
C-COR.net Corp.:
We consent to the incorporation by reference herein of our reports dated
August 16, 1999, relating to the consolidated balance sheets of C-COR.net Corp.
as of June 25, 1999 and June 26, 1998, and the related consolidated statements
of operations, cash flows and shareholders' equity for each of the years in the
three-year period ended June 25, 1999, and related schedule, which reports
appear in the June 25, 1999 annual report on Form 10-K of C-COR.net Corp.
We also consent to the incorporation by reference herein of our report dated
September 20, 1999 of C-COR.net Corp. as of June 25, 1999 and June 26, 1998 and
for each of the years in the three-year period ended June 25, 1999, relating to
the supplemental consolidated financial statements, which give retroactive
effect to the mergers of C-COR.net Corp. and Convergence.com, which occurred on
July 9, 1999, and Silicon Valley Communications, Inc., which occurred on
September 17, 1999, both of which have been accounted for using the
pooling-of-interests method of accounting, which report appears in the
Form 8-K/A of C-COR.net Corp. dated September 17, 1999.
KPMG LLP
State College, Pennsylvania
October 13, 1999
<PAGE>
EXHIBIT 23.2
Consent of Independent Auditors
The Board of Directors and Stockholders
C-COR.net Corp.:
We consent to the incorporation by reference herein of our report dated May 28,
1999, relating to the consolidated balance sheets of Convergence.com Corporation
as of December 31, 1998 and 1997, and the related consolidated statements of
operations, stockholders' equity (deficit), and cash flows for the years then
ended, which report appears in the Form 8-K/A of C-COR.net Corp. dated July 9,
1999.
KPMG LLP
Atlanta, Georgia
October 13, 1999
<PAGE>
EXHIBIT 23.3
Consent of Independent Auditors
The Board of Directors and Stockholders
C-COR.net Corp.:
We consent to incorporation by reference in this registration statement on Form
S-8 of C-COR.net Corp. of our report dated July 30, 1999, except as to Note 2,
which is as of August 4, 1999, with respect to the balance sheets of Silicon
Valley Communications, Inc. (formerly Qualop Systems Corporation) as of June 25,
1999 and June 30, 1998, and the related statements of operations, shareholders'
(deficit) equity, and cash flows for the years then ended, which report appears
in the Form 8-K/A of C-COR.net Corp. dated September 17, 1999.
KPMG LLP
Mountain View, California
October 13, 1999
<PAGE>
Exhibit 99
C-COR.net Corp.
STOCK OPTION PLAN
(For Employees of Silicon Valley Communications, Inc.)
1. PURPOSE.
(a) The purpose of the Plan is to provide a mechanism by which C-
COR.net Corp. (the "Company") can administer the options to acquire Silicon
Valley Communications, Inc. ("SVCI") common stock that were granted under the
SVCI 1995 Stock Option Plan (the "SVCI Plan") and assumed by the Company and
converted into options to acquire the Company's common stock in connection with
the Agreement and Plan of Merger dated as of July 13, 1999, among the Company,
SVCI and C-COR.net Acquisition Corp. The Company does not intend to grant any
options under the plan after September 17, 1999.
(b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company, as those terms are defined
in Sections 424 (e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended (the "Code").
(c) The Company intends that the options issued under the Plan shall,
in the discretion of the Board of Directors of the Company (the "Board") or any
committee to which responsibility for administration of the Plan has been
delegated pursuant to subparagraph 2(c), be either incentive stock options as
that term is used in Section 422 of the Code ("Incentive Stock Options"), or
options which do not qualify as incentive stock options ("Supplemental Stock
Options"). All options shall be separately designated Incentive Stock Options
or Supplemental Stock Options at the time of grant, and in such form as issued
pursuant to paragraph 5, and a separate certificate or certificates shall be
issued for shares purchased on exercise of each type of
<PAGE>
option. An option designated as a Supplemental Stock Option shall not be treated
as an incentive stock option.
2. ADMINISTRATION.
(a) The Plan shall be administered by the Board unless and until the
Board delegates administration to a committee, as provided in subparagraph 2
(c). Whether or not the Board has delegated administration, the Board shall
have the final power to determine all questions of policy and expediency that
may arise in the administration of the Plan.
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the persons eligible
under the Plan shall be granted options; when and how the option shall be
granted; whether the option will be an Incentive Stock Option or a Supplemental
Stock Option; the provisions of each option granted (which need not be
identical), including the time or times during the term of each option within
which all or portions of such option may be exercised; and the number of shares
for which an option shall be granted to each such person.
(2) To construe and interpret the Plan and options granted under
it, 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 Plan or in any option agreement, in a
manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.
(3) To amend the Plan as provided in paragraph 10.
(4) Generally, to exercise such powers and to perform such acts
as the
2
<PAGE>
Board deems necessary or expedient to promote the best interests of the Company.
(c) The Board may delegate administration of the Plan to a committee
composed of not fewer than three (3) members (the "Committee"), all of the
members of which Committee shall be disinterested persons, if required and as
defined by the provisions of subparagraph 2(d). If administration is delegated
to a Committee, the Committee shall have, in connection with the administration
of the Plan, the powers theretofore possessed by the Board, subject, however, to
such resolutions, not inconsistent with the provisions of the Plan, 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 Plan. Additionally,
prior to the date of the first registration of an equity security of the Company
under Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and notwithstanding anything to the contrary contained herein,
the Board may delegate administration of the Plan to any person or persons and
the term "Committee" shall apply to any person or persons to whom such authority
has been delegated.
(d) The term "disinterested person," as used in this Plan, shall mean
an administrator of the Plan, whether a member of the Board or of any Committee
to which responsibility for administration of the Plan has been delegated
pursuant to subparagraph 2 (c): (i) who is not at the time he or she exercises
discretion in administering the Plan eligible and has not at any time within one
year prior thereto been eligible for selection as a person to whom stock may be
allocated or to whom stock options or stock appreciation rights may be granted
pursuant to the Plan or any other plan of the Company or any of its affiliates
entitling the participants therein to acquire stock, stock options or stock
appreciation rights of the Company or any of its affiliates; or (ii) who is
otherwise considered to be a "disinterested person" in
3
<PAGE>
accordance with the rules, regulations or interpretations of the Securities and
Exchange Commission. Any such person shall otherwise comply with the
requirements of Rule 16b-3 promulgated under the Exchange Act.
(e) Any requirement that an administrator of the Plan be a
"disinterested person" shall not apply (i) prior to the date of the first
registration of an equity security of the Company under Section 12 of the
Exchange Act, or (ii) if the Board or the Committee expressly declares that such
requirement shall not apply.
3. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of paragraph 9 relating to adjustments
upon changes in stock, the stock that may be sold pursuant to options granted
under the Plan shall not exceed in the aggregate 160,000 shares of the Company's
common stock. If any option granted under the Plan shall for any reason expire
or otherwise terminate without having been exercised in full, the stock not
purchased under such option shall again become available for the Plan.
(b) The stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.
(c) An Incentive Stock Option may be granted to an eligible person
under the Plan only if the aggregate fair market value (determined at the time
the option is granted) of the stock with respect to which incentive stock
options (as defined in the Code) granted after 1986 are exercisable for the
first time by such optionee during any calendar year under all incentive stock
option plans of the Company and its Affiliates does not exceed one hundred
thousand dollars ($100,000). Should it be determined that an option granted
under the Plan exceeds such maximum for any reason other than the failure of a
-------
good faith attempt to value the stock subject
4
<PAGE>
to the option, such option shall be considered a Supplemental Stock Option to
the extent, but only to the extent, of such excess; provided however, that
should it be determined that an entire option or any portion thereof does not
qualify for treatment as an incentive stock option by reason of exceeding such
maximum, such option or the applicable portion shall be considered a
Supplemental Stock Option.
4. ELIGIBILITY.
(a) Incentive Stock Options may be granted only to employees
(including officers) of the Company or its Affiliates. A director of the
Company shall not be eligible to receive Incentive Stock Options unless such
director is also a employee (including an officer) of the Company or any
Affiliate. Supplemental Stock Options may be granted only to employees
(including officers) of, directors of or consultants to the Company or its
Affiliates.
(b) A director shall in no event be eligible for the benefits of the
Plan unless and until such director is expressly declared eligible to
participate in the Plan by action of the Board or the Committee, and only if at
any time discretion is exercised by the Board in the selection of a director as
a person to whom options may be granted, or in the determination of the number
of shares which may be covered by options granted to a director: (i) a majority
of the Board and a majority of the directors acting in such matter are
disinterested persons, as defined in subparagraph 2(d); (ii) the Committee
consists solely of "disinterested persons" as defined in subparagraph 2(d); or
(iii) the Plan otherwise complies with the requirements of Rule 16b-3
promulgated under the Exchange Act as from time to time in effect. The Board
shall otherwise comply with the requirements of Rule 16b-3 promulgated under the
Exchange Act, as from time to time in effect. This subparagraph 4(b) shall not
apply prior to the date of the first registration
5
<PAGE>
of an equity security of the Company under Section 12 of the Exchange Act.
(c) No person shall be eligible for the grant of an option under the
Plan if, at the time of grant, such person owns (or is deemed to own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or of any of
its Affiliates unless the exercise price of such option is at least one hundred
ten percent (110%) of the fair market value of such stock at the date of grant
and the term of the option does not exceed five (5) years from the date of
grant.
5. OPTION PROVISIONS.
Each option shall be in such form and shall contain such terms and
conditions as the Board or the Committee shall deem appropriate. The provisions
of separate options need not be identical, but each option shall include
(through incorporation of provisions hereof by reference in the option or
otherwise) the substance of each of the following provisions:
(a) The term of any option shall not be greater than ten (10) years
from the date it was granted.
(b) The exercise price of each Incentive Stock Option shall be not
less than one hundred percent (100%) of the fair market value of the stock
subject to the option on the date the option is granted. The exercise price of
each Supplemental Stock Option shall be not less than eighty-five percent (85%)
of the fair market value of the stock subject to the option on the date the
option is granted.
(c) The purchase price of stock acquired pursuant to an 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 or the Committee, either at the time of the grant
6
<PAGE>
or exercise of the option, (A) by delivery to the Company of other common stock
of the Company, (B) according to a deferred payment or other arrangement (which
may include, without limiting the generality of the foregoing, the use of other
common stock of the Company) with the person to whom the option is granted or to
whom the option is transferred pursuant to subparagraph 5(d), or (C) in any
other form of legal consideration that may be acceptable to the Board or the
Committee.
In the case of any deferred payment arrangement, interest shall be
payable 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.
(d) An 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
person to whom the option is granted only by such person.
(e) The total number of shares of stock subject to an option may, but
need not, be allotted in periodic installments which may, but need not, be equal
and which installments may not be less than twenty percent (20%) per year. From
time to time during each of such installment periods, the option may become
exercisable ("vest") with respect to some or all of the shares allotted to that
period, and may be exercised with respect to some or all of the shares allotted
to such period and/or any prior period as to which the option was not fully
exercised. During the remainder of the term of the option (if its term extends
beyond the end of the installment periods), the option may be exercised from
time to time with respect to any shares then remaining subject to the option.
The provisions of this subparagraph 5(e) are subject to any option provisions
governing the minimum number of shares as to which an option may be
7
<PAGE>
exercised.
(f) The Company may require any optionee, or any person to whom an
option is transferred under subparagraph 5(d), as a condition of exercising any
such option, (1) to give written assurances satisfactory to the Company as to
the optionee'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 (2) to give
written assurances satisfactory to the Company stating that such person is
acquiring the stock subject to the option for such person's own account and not
with any present intention of selling or otherwise distributing the stock.
These requirements, and any assurances given pursuant to such requirements,
shall be inoperative if (i) the issuance of the shares upon the exercise of the
option has been registered under a then currently effective registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
or (ii) 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.
(g) An option shall terminate three (3) months after termination of
the optionee's employment or relationship as a consultant or director with the
Company or an Affiliate, unless (i) such termination is due to such person's
permanent and total disability, within the meaning of Section 422(c)(6) of the
Code, in which case the option may, but need not, provide that it may be
exercised at any time within one (1) year following such termination of
employment or relationship as a consultant or director; or (ii) the optionee
dies while in the employ of or while serving as a consultant or director to the
Company or an Affiliate, or within
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not more than three (3) months after termination of such relationship, in which
case the option may, but need not, provide that it may be exercised at any time
within eighteen (18) months following the death of the optionee by the person or
persons to whom the optionee's rights under such option pass by will or by the
laws of descent and distribution; or (iii) the option by its terms specifies
either (a) that it shall terminate sooner than three (3) months after
termination of the optionee's employment or relationship as a consultant or
director, or (b) that it may be exercised more than three (3) months after
termination of such relationship with the Company or an Affiliate. This
subparagraph 5(g) shall not be construed to extend the term of any option or to
permit anyone to exercise the option after expiration of its term, nor shall it
be construed to increase the number of shares as to which any option is
exercisable from the amount exercisable on the date of termination of the
optionee's employment or relationship as a consultant or director.
(h) The option may, but need not, include a provision whereby the
optionee may elect at any time during the term of his or her employment or
relationship as a consultant or director with the Company or any Affiliate to
exercise the option as to any part or all of the shares subject to the option
prior to the stated vesting date of the option or of any installment or
installments specified in the option. Any shares so purchased from any unvested
installment or option may be subject to a repurchase right in favor of the
Company or to any other restriction the Board or the Committee determines to be
appropriate.
(i) To the extent provided by the terms of an option, the optionee
may satisfy any federal, state or local tax withholding obligation relating to
the exercise of such option by any of the following means or by a combination of
such means: (1) tendering a cash payment; (2) authorizing the Company to
withhold from the shares of the common stock otherwise issuable to
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the participant as a result of the exercise of the stock option a number of
shares having a fair market value less than or equal to the amount of the
withholding tax obligation; or (3) delivering to the Company owned and
unencumbered shares of the common stock having a fair market value less than or
equal to the amount of the withholding tax obligation.
6. COVENANTS OF THE COMPANY.
(a) During the terms of the options granted under the Plan the
Company shall keep available at all times the number of shares of stock required
to satisfy such options.
(b) The Company shall seek to obtain from each regulatory commission
or agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the options granted under the
Plan; provided, however, that this undertaking shall not require the Company to
register under the Securities Act either the Plan, any option granted under the
Plan or any stock issued or issuable pursuant to any such 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 stock under the Plan, the Company shall be
relieved from any liability for failure to issue and sell stock upon exercise of
such options unless and until such authority is obtained.
7. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to options granted under the
Plan shall constitute general funds of the Company.
8. MISCELLANEOUS.
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(a) The Board or the Committee shall have the power to accelerate the
time during which an option may be exercised or the time during which an option
or any part thereof will vest pursuant to subparagraph 5(e), notwithstanding the
provisions in the option stating the time during which it may be exercised or
the time during which it will vest.
(b) Neither an optionee nor any person to whom an option is
transferred under subparagraph 5(d) shall be deemed to be the holder of, or to
have any of the rights of a holder with respect to, any shares subject to such
option unless and until such person has satisfied all requirements for exercise
of the option pursuant to its terms.
(c) Throughout the term of any option granted pursuant to the Plan,
the Company shall make available to the holder of such option, not later than
one hundred twenty (120) days after the close of each of the Company's fiscal
years during the option term, upon request, such financial and other information
regarding the Company as comprises the annual report to the shareholders of the
Company provided for in the bylaws of the Company.
(d) Nothing in the Plan or any instrument executed or option granted
pursuant thereto shall confer upon any eligible employee or optionee any right
to continue in the employ of the Company or any Affiliate (or to continue acting
as a consultant or director) or shall affect the right of the Company or any
Affiliate to terminate the employment or consulting relationship or directorship
of any eligible employee or optionee with or without cause. In the event that
an optionee is permitted or otherwise entitled to take a leave of absence, the
Company shall have the unilateral right to (i) determine whether such leave of
absence will be treated as a termination of employment for purposes of paragraph
5(g) hereof and corresponding provisions of any outstanding options, and (ii)
suspend or otherwise delay the time or times at which the shares subject to the
option would otherwise vest.
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9. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or
subject to any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or otherwise), the Plan and outstanding
options will be appropriately adjusted in the class(es) and maximum number of
shares subject to the Plan and the class(es) and number of shares and price per
share of stock subject to outstanding options.
(b) In the event of: (1) a dissolution or liquidation of the Company;
(2) a merger or consolidation in which the Company is not the surviving
corporation; or (3) a reverse merger in which the Company is the surviving
corporation but the shares of the Company's 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 to the extent
permitted by applicable law: (i) any surviving corporation shall assume any
options outstanding under the Plan or shall substitute similar options for those
outstanding under the Plan, or (ii) such options shall continue in full force
and effect. In the event any surviving corporation refuses to assume or continue
such options, or to substitute similar options for those outstanding under the
Plan, then, with respect to options held by persons then performing services as
employees or as consultants or directors for the Company as the case may be, the
time during which such options may be exercised shall be accelerated and the
options terminated if not exercised prior to such event.
10. AMENDMENT OF THE PLAN.
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(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in paragraph 9 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the shareholders of
the Company within twelve (12) months before or after the adoption of the
amendment, where the amendment will:
(i) Increase the number of shares reserved for options under
the Plan;
(ii) Modify the requirements as to eligibility for participation
in the Plan (to the extent such modification requires shareholder approval in
order for the Plan to satisfy the requirements of Section 422(b) of the Code);
or
(iii) Modify the Plan in any other way if such modification
requires shareholder approval in order for the Plan to satisfy the requirements
of Section 422(b) of the Code or to comply with the requirements of Rule 16b-3
promulgated under the Exchange Act.
(b) It is expressly contemplated that the Board may amend the Plan in
any respect the Board deems necessary or advisable to provide optionees with the
maximum benefits provided or to be provided under the provisions of the Code and
the regulations promulgated thereunder relating to employee incentive stock
options and/or to bring the Plan and/or incentive stock options granted under it
into compliance therewith.
(c) Rights and obligations under any option granted before amendment
of the Plan shall not be altered or impaired by any amendment of the Plan unless
(i) the Company requests the consent of the person to whom the option was
granted and (ii) such person consents in writing.
11. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any time. Unless
sooner
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terminated, the Plan shall terminate on March 14, 2005. No options may be
granted under the Plan while the Plan is suspended or after it is terminated.
(b) Rights and obligations under any option granted while the Plan is
in effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom the option was granted.
12. EFFECTIVE DATE OF PLAN.
The SVCI Plan became effective on March 14, 1995 and was assumed by
the Company and restated as the Plan, effective September 17, 1999.
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