<PAGE>
As Filed with the Securities and Exchange Commission on February 11, 1999
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
IRVINE SENSORS CORPORATION
(Name of registrant as specified in its charter)
Delaware 33-0280334
Identification No.) (I.R.S. Employer
(State or other jurisdiction of
of incorporation or organization)
3001 Redhill Avenue
Costa Mesa, California 92626
(714) 549-8211
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
1995 Irvine Sensors Corporation Stock Option Plan
(Full title of the Plan)
James D. Evert, Chief Executive Officer
Irvine Sensors Corporation
3001 Redhill Avenue, Building III
Costa Mesa, California 92626
(714) 549-8211
(Name, address, including zip code, and telephone number,
including area code, of agent for service of process)
With Copy To:
Debra K. Weiner
Grover T. Wickersham, P.C.
430 Cambridge Avenue, Suite 100
Palo Alto, California 94306
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Proposed Proposed
maximum maximum
Title of each class of Amount to offering price aggregate Registration
securities to be registered be registered per unit (1)(2)(3) offering price(1)( 2)(3) fee
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 1,650,000 $2,681,271 $2,475,000 $688.05
==================================================================================================================================
</TABLE>
(1) Issuable upon exercise of stock options granted under the Registrant's 1995
Stock Option Plan. In accordance with Rule 457(c) and (h), the proposed
maximum offering price per share and proposed maximum aggregate offering
price have been calculated based on the weighted average exercise price of
outstanding options, which range from $0.98 to $6.50. For purposes of this
calculation, $1.633925444 has been used for all outstanding options.
(2) Issuable upon exercise of stock options available for grant under the
Registrant's 1995 Stock Option Plan. In accordance with Rule 457(c) and (h),
the proposed maximum offering price per share and proposed maximum aggregate
offering price have been calculated based upon the average of the high and
low sale price of the Common Stock on February 10, 1999, as reported on the
Nasdaq SmallCap Market(SM).
(3) Estimated solely for the purpose of determining the registration fee.
(4) Pursuant to Rule 416(a), also covers additional securities that may be
offered as a result of stock splits, stock dividends or similar
transactions.
<PAGE>
This Registration Statement on Form S-8 is filed by Irvine Sensors
Corporation, a Delaware corporation (the "Company" or the Registrant"),
relating to 1,650,000 shares of its common stock, par value $0.01 per share
(the "Common Stock") issuable to eligible employees, officers, directors and
consultants of the Company under the Irvine Sensors Corporation 1995 Stock
Option Plan (the "Plan").
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information
Not filed as part of this Registration Statement pursuant to Note to Part 1
of Form S-8.
Item 2. Registrant Information and Employee Plan Annual
Information
Not filed as part of this Registration Statement pursuant to Note to Part 1
of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by Irvine Sensors Corporation (the "Company")
with the Securities and Exchange Commission (the "Commission") are incorporated
herein by reference:
a. The Company's Annual Report on Form 10-K for the fiscal
year ended September 27, 1998, as filed with the Commission pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act");
b. The Company's Quarterly Report on Form 10-Q for the
quarterly period ended December 27, 1998;
c. The Company's Definitive Proxy Statement for the Company's
Annual Meeting of Stockholders held on February 26, 1999;
d. The description of the Company's Common Stock, $0.01 par
value, contained in the Company's Registration Statement on Form 8-A, filed with
the Commission pursuant to Section 12(g) of the Exchange Act, including any
amendment or report filed for the purpose of updating such description.
2
<PAGE>
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities remaining unsold shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of the
filing of such documents.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
earlier statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
ITEM 4. DESCRIPTION OF SECURITIES
The class of securities to be offered is registered under Section 12 of the
Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The legality of the securities offered hereby has been passed upon by the
firm of Grover T. Wickersham, P.C., counsel to the Company. Such firm is the
holder of 50,000 shares of the Company's Common Stock. One of the shareholders
of the firm may be deemed to be the beneficial owner of an aggregate of 13,503
shares of the Company's Common Stock and 1,500 shares of the Company's Series D
Preferred Stock by virtue of his voting and investment control over securities
owned by a limited partnership, of which he is the president of the General
Partner of such limited partnership.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The General Corporation Law of the State of Delaware (the "General
Corporation Law") provides for the indemnification of directors, officers,
employees and other agents of the corporation under certain circumstances as set
forth in section 145. Section 145 permits a corporation to indemnify its agents,
typically directors and officers, for expenses incurred or settlements or
judgments paid in connection with certain legal proceedings. Only those legal
proceedings arising out of such persons' actions as agents of the corporation
may be grounds for indemnification.
Whether or not indemnification may be paid in a particular case depends
upon whether the agent wins, loses or settles the suit and upon whether a third
party or the corporation itself is the plaintiff. The section provides for
mandatory indemnification, no matter who the plaintiff is, when an agent is
successful on the merits of a suit. In all other cases, indemnification is
permissive.
3
[CAPTION]
<PAGE>
If the agent loses or settles a suit brought by a third party, he or she
may be indemnified for expenses incurred and settlements or judgments paid. Such
indemnification may be authorized upon a finding that the agent acted in good
faith and in a manner he or she reasonably believed to be in the best interests
of the corporation.
If the agent loses or settles a suit brought by or on behalf of the
corporation, his or her right to indemnification is more limited. If he or she
is adjudged liable to the corporation, the court in which such proceeding was
held must determine whether it would be fair and reasonable to indemnify him or
her for expenses which such court shall determine. If the agent settles such a
suit with court approval, he or she may be indemnified for expenses incurred in
connection with the defense and settlement of the suit, upon a finding that the
agent acted in good faith and in a manner he or she reasonably believed to be in
the best interests of the corporation and its stockholders.
Under Section 145, the indemnification discussed above may be authorized by
a majority vote of the disinterested directors or stockholders (the person to be
indemnified is excluded from voting his or her shares) or the court in which the
proceeding was brought.
Under Section 145, a corporation may authorize, by by-law, agreement or
otherwise, the indemnification of its agents in excess of that expressly
permitted by Section 145. The Registrant's By-laws provide that indemnification
shall be mandatory in all cases where it is permitted by Section 145.
Section 102(b) of the General Corporation Law permits corporations to
eliminate or limit the personal liability of a director to the corporation or
its stockholders for monetary damages for breach of the fiduciary duty as a
director. The Registrant's Certificate of Incorporation provides for elimination
of personal liability of directors for breach of fiduciary duty as a director
except for the following: (i) for any breach of such director's duty of loyalty
to the Corporation or its stockholders; (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law;
(iii) under Section 174 of the General Corporation Law; or (iv) for any
transaction from which such director derived an improper personal benefit. The
Registrant's Certificate of Incorporation further provides that modification or
repeal of this provision may not affect the elimination of liability therein
provided with respect to a director's personal liability for any act or omission
that occurs prior to such modification or repeal.
Finally, a corporation has the power to purchase indemnity insurance for
its agents, even if it would not have the power to indemnify them. The
Registrant has purchased such insurance.
Insofar as indemnification for liabilities under the Securities Act of
1933, as amended (the "Act") may be permitted to directors, officers or persons
controlling the Registrant pursuant to the foregoing provisions, the Registrant
has been informed 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
4
<PAGE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
The following exhibits are filed as a part of this Registration Statement:
5 Opinion re legality
23.1 Consent of Grant Thornton LLP, independent public accountants
23.2 Consent of Grover T. Wickersham, P.C. (included in Exhibit 5)
24 Power of Attorney (included in the signature pages to this
registration statement)
99.1 1995 Stock Option Plan, as amended
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;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(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 Company
5
<PAGE>
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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, each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act 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 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 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 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.
6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Costa Mesa, State of California, on this 11th day of
February, 1999.
IRVINE SENSORS CORPORATION
By: /s/ John J. Stuart, Jr.
-----------------------------------
John J. Stuart, Jr.
Senior Vice President and Chief
Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears on
the signature pages to this Registration Statement hereby constitutes and
appoints James D. Evert and John J. Stuart, Jr., and each of them, his true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for the undersigned, and in his name, place and stead, in any
and all capacities to sign any and all amendments, including post-effective
amendments, exhibits thereto and other documents in connection therewith, to
this Registration Statement, to make such changes in the Registration Statement
as such attorneys-in-fact deems appropriate, and to file the same, with all
exhibits thereto and other documents in connection therewith with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents and
each of them, full power and authority to do so and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or either of them, 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, as amended,
this amended Registration Statement has been signed by the following persons in
the capacities and on the dates indicated:
/s/ James D. Evert President, Chief Executive February 11, 1999
- -------------------- Officer and Director
James D. Evert (Principal Executive Officer)
7
<PAGE>
/s/ James Alexiou Chairman of the Board February 11, 1999
- ------------------------
James Alexiou
/s/ John J. Stuart, Jr. Senior Vice President and February 11, 1999
- ------------------------ Chief Financial Officer
John J. Stuart, Jr. (Principal Financial and
Accounting Officer)
/s/ John Carson Director February 11, 1999
- ---------------------------
John C. Carson
/s/ Joanne S. Carson Director February 11, 1999
- ---------------------------
Joanne S. Carson
/s/ Marc Dumont Director February 11, 1999
- ---------------------------
Marc Dumont
/s/ Walter E. Garrigan Director February 11, 1999
- ----------------------------
Walter E. Garrigan
/s/ Frank P. Ragano Director February 11, 1999
- ----------------------------
Frank P. Ragano
/s/ Vincent F. Sollitto, Jr. Director February 11, 1999
- -----------------------------
Vincent F. Sollitto, Jr.
8
<PAGE>
EXHIBIT INDEX
Exhibit
- -------
5 Opinion re legality
23.1 Consent of Grant Thornton LLP, independent public accountants
23.2 Consent of Grover T. Wickersham, P.C. (included in Exhibit 5)
24 Power of Attorney (included in signature pages to this registration
statement)
99.1 1995 Stock Option Plan, as amended
<PAGE>
EXHIBIT 5
GROVER T. WICKERSHAM
A PROFESSIONAL CORPORATION
ATTORNEYS AT LAW
430 CAMBRIDGE AVENUE, SUITE 100
PALO ALTO, CALIFORNIA 94306
GROVER T. WICKERSHAM TELEPHONE: (650) 323-6400
DEBRA K. WEINER FAX: (650) 323-1108 E-Mail Address:
[email protected]
February 11, 1999
Irvine Sensors Corporation
3001 Redhill Boulevard, Building III
Costa Mesa, CA 92626
Re: Registration Statement on Form S-8
Gentlemen:
We refer to an aggregate of 1,650,000 shares of Common Stock, par value
$0.01 per share, of Irvine Sensors Corporation, a Delaware corporation (the
"Company"), which are the subject of a registration statement on Form S-8 (the
"Registration Statement") to be filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act"). The shares of Common Stock (the "Shares") subject to the Registration
Statement are to be issued under the Irvine Sensors Corporation 1995 Stock
Option Plan, as amended (the "Plan").
We have examined the original, or a photostatic or certified copy, of such
records of the Company, certificates of officers of the Company and of public
officials and such other documents as we have determined relevant and necessary
as the basis for the opinion set forth below. In such examination, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies.
Based upon our examination mentioned above, we are of the opinion that the
Shares have been validly authorized for issuance and, when issued and sold in
accordance with the terms set forth in the Registration Statement and the Plan,
and, when (a) the Registration Statement has become effective under the Act, (b)
the pertinent provisions of any applicable state securities law have been
complied with, and (c) in the case of options issued under the Plan, the Shares
have been paid for, the Shares so issued will be legally issued and will be
fully paid and nonassessable.
<PAGE>
We consent to the filing of this opinion as an Exhibit to the Registration
Statement and to the reference to our firm appearing on the cover of the
Registration Statement. In giving this consent, we do not admit that we are
within the category of persons whose consent is required under Section 7 of the
Act or the General Rules and Regulations of the Commission.
Very truly yours,
/s/ Grover T. Wickersham, P.C.
Grover T. Wickersham, P.C.
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We have issued our reports dated January 6, 1999, accompanying the consolidated
financial statements of Irvine Sensors Corporation and subsidiaries appearing in
the 1998 Annual Report of the Company to its shareholders and accompanying the
schedules included in the Annual Report on Form 10-K for the fiscal year ended
September 27, 1998, which are incorporated by reference in this Registration
Statement. We consent to the incorporation by reference in the Registration
Statement of the aforementioned reports.
/s/ Grant Thornton LLP
Grant Thornton LLP
Irvine, California
February 9, 1999
<PAGE>
EXHIBIT 99.1
1995 IRVINE SENSORS CORPORATION
STOCK OPTION PLAN
1. Name, Effective Date and Purpose
--------------------------------
(a) This Plan document is intended to implement and govern the 1995 Stock
Option Plan of Irvine Sensors Corporation, a Delaware corporation (the
"Company"). The Plan provides for the granting of options that are either (i)
intended to qualify as incentive stock options ("Incentive Stock Options")
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code") or (ii) for the granting of options that are not intended
to so qualify ("Nonstatutory Stock Options"). Unless specified otherwise, all
the provisions of this Plan relate equally to both incentive and Nonstatutory
Stock Options.
(b) This Stock Option Plan is established effective as of January 9, 1995.
The purpose of this Plan is to promote the growth and general prosperity of the
Company and its Affiliated Companies by permitting the Company, through the
grant of Incentive Stock Options and Nonstatutory Stock Options ("Options") to
purchase shares of its common stock, $0.01 par value ("Common Stock"), to
attract and retain the best available persons for positions of substantial
responsibility and to provide certain key employees, directors, consultants and
advisors with an additional incentive to contribute to the success of the
Company and its Affiliated Companies. For purposes of this Plan, the term
"Affiliated Companies" shall mean any component member of a controlled group of
corporations, as defined under Section 1563 of the Code, in which the Company is
also a component member.
2. Administration
--------------
(a) The Plan shall be administered by the Board of Directors of the Company
(the "Board").
(b) The Board shall have sole authority, in its absolute discretion, to
determine which of the eligible persons of the Company and its Affiliated
Companies shall receive Options ("Optionees"), and, subject to the express
provisions and restrictions of this Plan, shall have sole authority, in its
absolute discretion, to determine the time when Options shall be granted, the
terms and conditions of an Option other than those terms and conditions fixed
under this Plan, the number of shares that may be issued upon exercise of an
Option and the means of payment for such shares, and shall have authority to do
everything necessary or appropriate to administer the Plan, including but not
limited to (i) setting different terms and conditions for different Options and
(ii) interpreting the Plan. All decisions, determinations and interpretations of
the Board shall be final and binding on all Optionees.
(c) The Board shall have the authority to delegate some or all of the
powers granted to it pursuant to this Section 2 to a committee (the "Committee")
appointed by the Board. The Board may from time to time remove members from, or
add members to, the Committee, and vacancies on the Committee shall be filled by
the Board. All decisions, determinations and interpretations of the Committee
shall be final and binding on all Optionees, unless otherwise determined by the
Board.
(d) The following definitions shall apply to the Plan:
(i) Restricted Stockholder. An individual who, at the time an Option
is granted under the Plan, beneficially owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company or of its
Parent Corporation or Subsidiary Corporations, if any, with stock ownership to
be determined in light of the attribution rules set forth in Section 425 (d) of
the Internal Revenue Code.
(ii) Parent Corporation. A corporation as defined in Section 425(e)
of the Code.
<PAGE>
(iii) Subsidiary Corporation. A corporation as defined in Section
425(f) of the Code.
(iv) Employment. Includes the formal employment relationships, as well
as directorships and/or consulting or other advisory relationships with the
Company or any of its Affiliated Companies; however, the term "employee," as
used in Section 3 of the Plan refers to the formal employment relationship only.
3. Eligibility
-----------
(a) The Board (or the Committee, if so authorized by the Board) may, in its
discretion, grant one or more Incentive Stock Options under the Plan to any
employee of the Company or its Affiliated Companies, including any employee who
is a Director of the Company or of any of its Affiliated Companies presently
existing or hereafter organized or acquired. Such Incentive Stock Options may be
granted to one or more such employees without being granted to other eligible
employees, as the Board (or Committee) may deem fit.
(b) The Board (or the Committee, if so authorized by the Board), may, in
its discretion, grant one or more Nonstatutory Stock Options under the Plan to
any employee, including officers or directors of the Company or any Affiliated
Company, any director of the Company or any Affiliated Company, or any
consultants or advisors of the Company or any Affiliated Company presently
existing or hereafter organized or acquired. Such Nonstatutory Stock Options may
be granted to one or more such persons without being granted to other eligible
persons, as the Board may deem fit.
4. Stock to be Optioned
--------------------
The maximum aggregate number of shares that may be optioned and sold under
the Plan is 1,650,000 shares of authorized Common Stock of the Company. This
constitutes an absolute cumulative limitation on the total number of shares that
may be optioned under the Plan. All shares to be optioned and sold under the
Plan may be either authorized but unissued shares or shares held in the
treasury. Shares of Common Stock that (a) are repurchased by the Company after
issuance hereunder pursuant to the exercise of an Option or (b) are not
purchased by the Optionee prior to the expiration of the applicable Option
Period (as described hereinbelow) shall again become available to be covered by
Options to be issued hereunder and shall not, as of the effective date of such
repurchase or expiration, be counted as covered by an outstanding Option for
purposes of the above-described maximum number of shares that may be optioned
hereunder.
5. Option Price
------------
(a) The Option Price for Incentive Stock Option shares of Common Stock to
be issued under the Plan shall be not less than 100% of the fair market value of
such shares on the date on which the Option covering such shares is granted by
the Board (or the Committee, if so authorized by the Board), except that if on
the date on which such Incentive Stock Option is granted the Optionee is a
Restricted Stockholder, then such Option Price shall be not less than 110% of
the fair market value of the shares of Common Stock subject to the Option on
the date such Option is granted by the Board (or the Committee, if so
authorized). The fair market value of shares of Common Stock for all purposes
of the Plan is to be determined by the Board (or the Committee, if so authorized
by the Board) in its sole discretion, exercised in good faith.
(b) The Option Price for Nonstatutory Stock Option shares of Common Stock
to be issued under the Plan shall be determined by the Board (or the Committee,
if so authorized by the Board) and shall not be less than 85% of the fair market
value of such shares on the date on which the Option covering such shares is
granted by the Board (or the Committee, if so authorized by the Board). The
fair market value of shares of Common Stock for all purposes of the Plan is to
be determined by the Board (or the Committee, if so authorized by the Board) in
its sole discretion, exercised in good faith.
6. Term of Plan
------------
2
<PAGE>
The Plan shall become effective upon January 9, 1995, and shall continue in
effect until January 8, 2005, unless terminated earlier by action of the Board.
No Option hereunder may be granted after January 8, 2005.
7. Exercise of Option
------------------
Subject to the restrictions, conditions and/or limitations set forth in
this Plan document and/or any applicable Stock Option Agreement entered into
hereunder, Options granted under this Plan shall be exercisable in accordance
with the following rules:
(a) Subject to the specific provisions of this Section 7, Options shall
become exercisable at such times and in such installments (which may be
cumulative) as the Board shall provide in the terms of each individual Option;
provided, however, that by a resolution adopted after an Option is granted the
Board may, on such terms and conditions as it may determine to be appropriate
and subject to the specific provisions of this Section 7, accelerate the time at
which such Option or installment thereof may be exercised. For the purposes of
this Plan, any accrued installment of an Option granted hereunder shall be
referred to as an "Accrued Installment."
(b) Subject to the provisions of Subsections 7(c), (d) or (e) concerning
the expiration of Options under the circumstances specified therein, an Option
may be exercised when Accrued Installments accrue as provided in the terms under
which such Option was granted and at any time thereafter within a period of ten
years from the Option Grant Date of Incentive Stock Options (five years for
Restricted Stockholders), and within a period of ten years from the Option Grant
Date of Nonstatutory Stock Options, subject, however, to the further
restrictions contained in this Section 7. In no event shall any Option be
exercised on or after the tenth anniversary (fifth anniversary as to Restricted
Stockholders) of the date on which the Option is granted by the Board, or by the
Committee, if so authorized (hereafter the "Option Grant Date") of such
Incentive Stock Options, or on or after the tenth anniversary of the Option
Grant Date of such Nonstatutory Stock Options regardless of the circumstances
then existing (including but not limited to the death or termination of
employment of the Optionee). The fifth anniversary of the Option Grant Date and
the tenth anniversary of the Option Grant Date shall be hereafter designated the
"Fifth Anniversary Date" and the "Tenth Anniversary Date," respectively.
(c) Notwithstanding the foregoing provisions of this Section 7, in the
event a formal agreement is executed by the Company and other concerned parties
with respect to any of the following transactions (a "Corporate Transaction"),
outstanding Options will become fully exercisable for all of the shares at the
time subject to such Option unless the successor company or parent thereof, if
any, assumes the Options or issues substitute options as part of the Corporate
Transaction. Corporate Transactions include: (i) the direct or indirect sale or
exchange by the stockholders of the Company of all or substantially all of the
stock of the Company; (ii) a merger or consolidation in which the Company is not
the surviving corporation or in which the stockholders do not retain at least a
majority of the voting stock of the Company; (iii) the sale, exchange or other
transfer of all or substantially all of the assets of the Company (other than a
sale, exchange or transfer to one or more Affiliated Companies); or (iv) a
liquidation or dissolution of the Company. In the event of a Corporate
Transaction, the immediately fully exercisable Options shall be exercisable
until the earlier of (a) the applicable expiration date of the Option; or (b)
the date of the Corporate Transaction. Notwithstanding the foregoing, in the
event that any agreement pertaining to a Corporate Transaction shall be
terminated without consummating the Corporate Transaction, any unexercised
unaccrued installments that had become exercisable solely by reason of the
provisions of this Subsection 7(c) shall again become unaccrued and
unexercisable as of said termination of such agreement, subject, however, to
such installments accruing pursuant to the normal accrual schedule provided in
the terms under which such Option was granted. Any exercise of an installment
prior to said termination of said agreement shall remain effective
notwithstanding that such installment became exercisable solely by reason of the
Company entering into said agreement to dispose of the stock or assets of the
Company.
(d) Subject to the provisions of Subsection 7(e) hereinbelow involving the
death or disability of an Optionee while an employee, director, consultant or
advisor of the Company or an Affiliated Company, as of the effective date of the
termination of employment or directorship of an Optionee of the Company (or
Affiliated Company) for any reason other than death or disability (the
"Termination Date"), any unexercised Accrued Installments of the Option granted
hereunder to such terminated Optionee shall expire and become unexercisable as
of the earlier of (i) the applicable
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expiration date of the Option; or (ii) 30 days following said Termination Date;
provided, however, that the Board may extend such 30-day period for a period of
up to the applicable Fifth Anniversary Date with respect to non-statutory stock
options. Any installments under said Option which have not accrued as of said
Termination Date shall expire and become unexercisable as of said Termination
Date. Any portion of an Option that expires hereunder shall remain unexercisable
and be of no effect whatsoever after such expiration notwithstanding that such
Optionee may be reemployed by, or again become a director of or consultant or
advisor to the Company or an Affiliated Company.
(e) Notwithstanding the foregoing provisions of this Section 7, in the
event of the death of an Optionee while an employee, director, consultant or
advisor of the Company (or an Affiliated Company), or in the event of the
termination of employment by reason of the Optio
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8. Authorization to Issue Options and Stockholder Approval
-------------------------------------------------------
Options granted under the Plan shall be conditioned upon the Company
obtaining any required permits from appropriate governmental agencies, free of
any conditions not acceptable to the Board, authorizing the Company to issue
such Options, provided, however, such condition shall lapse as of the effective
date of issuance of such permit(s) in a form to which the Company does not
object within 60 days. The grant of Options under the Plan also is conditioned
on approval of the Plan by the vote or written consent of the holders of a
majority of the outstanding shares of the Company's Common Stock; and no Option
granted hereunder shall be effective or exercisable unless and until the Plan
has been so approved.
9. Limit on Value of Optioned Shares
---------------------------------
With respect to Incentive Stock Options granted, the aggregate fair market
value, as determined at the time the Option is granted, of the shares of Common
Stock with respect to which Incentive Stock Options are exercisable for the
first time by any single Optionee during any calendar year under this Plan and
any other plans of the Company or an Parent or Subsidiary, may not exceed
$100,000.
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10. Payment of Exercise Price
-------------------------
Options may be exercised by payment of the option price (i) in cash or cash
equivalent; (ii) by tender to the Company of shares of the Company's Common
Stock owned by the Optionee having a value, as determined by the Board not less
than the exercise price, and which either have been owned by the Optionee for
more than six months or which were not acquired, directly or indirectly, from
the Company; (iii) by the assignment of the proceeds of a sale of some or all of
the shares being acquired upon exercise of the option ("Same Day Sale"), (iv) in
the case of employees of the Company or any Affiliated Company, by the
Optionee's recourse promissory note, (v) by the withholding of shares being
acquired upon exercise of the Option having a value, as determined by the Board,
not less than the exercise price; or (vi) by such other consideration and method
of payment as the Board, in its sole discretion, may allow. The Board (or
Committee, if so authorized) may restrict the forms of payment permitted in
connection with any Option grant. Any permitted promissory note shall be due and
payable not more than five years after the Option is granted, and interest shall
be payable at least annually and be at least equal to the minimum interest rate
necessary to avoid imputed interest under the Code. The Board has the authority
to permit or require the Optionee to secure any promissory note used to exercise
an Option with the shares of stock acquired on exercise of the Option and/or
with other collateral acceptable to the Company. Optionees may elect to have
shares withheld upon exercise to satisfy tax withholding obligations.
11. Stock Option Agreement
----------------------
The terms and conditions of Options granted under the Plan shall be
evidenced by a Stock Option Agreement (hereinafter referred to as the
"Agreement") executed by the Company and the person to whom the Option is
granted. Each Agreement shall contain the following provisions approved by the
Board (or the Committee):
(a) A provision fixing the number of shares which may be issued upon
exercise of the Option:
(b) A provision establishing the Option price per share:
(c) A provision establishing the times and the installments in which
Options may be exercised;
(d) A provision incorporating therein this Plan by reference;
(e) A provision clarifying which Options are intended to be Incentive Stock
Options and which are intended to be Nonstatutory Stock Options;
(f) A provision fixing the maximum duration of an Option as not more than
ten years from the Option Grant Date, except in the case of Options granted to
Restricted Stockholders, in which instance such maximum duration shall not
exceed five years;
(g) Such representations and warranties by the Optionee as may be required
by Section 21 of this Plan or as may be required by the Board (or the Committee)
in its discretion;
(h) Any other restrictions (in addition to those established under this
Plan) as may be established by the Board (or the Committee) with respect to the
exercise of the Option, the transfer of the Option, and/or the transfer of the
shares purchased by exercise of the Option, provided that such restrictions are
not in conflict with this Plan; and
(i) Such other terms and conditions not inconsistent with this Plan as may
be established by the Board (or the Committee).
12. Taxes, Fees and Expenses
------------------------
The Company shall pay all original issue and transfer taxes (but not income
taxed, if any) with respect to the grant of Options and/or the issue and
transfer of shares pursuant to the exercise of such Options, and all other fees
and expenses necessarily incurred by the Company in connection
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therewith, and will from time to time use its best efforts to comply with all
laws and regulations which, in the opinion of counsel for the Company, shall be
applicable thereto.
13. Withholding of Taxes
--------------------
The grant of Options hereunder and the issuance of Common Stock pursuant to
the exercise of such Options is conditioned upon the Company's reservation of
the right to withhold, in accordance with any applicable law, from any
compensation payable to the Optionee any taxes required to be withheld by
federal, state or local law as a result of the grant or exercise of any such
Option.
14. Amendment or Termination of the Plan
------------------------------------
(a) The Board may amend this Plan from time to time in such respects as the
Board may deem advisable, provided, however, that no such amendment shall
operate to (i) change the class of persons eligible to receive Options under the
Plan; (ii) affect adversely an Optionee's rights under this Plan with respect to
any Option granted hereunder prior to the adoption of such amendment, except as
may be necessary, in the judgment of counsel to the Company, to comply with any
applicable law; or (iii) increase the maximum aggregate number of shares which
may be optioned and sold under the Plan, unless such increase is approved by the
stockholders of the Company in accordance with Delaware law.
(b) The Board may at any time terminate this Plan. Any such termination of
the Plan shall not, without the written consent of the Optionee, alter the
terms of Options already granted, and such Options shall remain in full force
and effect as if this Plan had not been terminated.
15. Options Not Transferable
------------------------
Options granted under this Plan may not be sold, pledged, hypothecated,
assigned, encumbered, gifted or otherwise transferred or alienated in any
manner, either voluntarily or involuntarily by operation of law, otherwise than
by will or the laws of descent or distribution, and may be exercised during the
lifetime of an Optionee only by such Optionee.
16. No restrictions on Transfer of Stock
------------------------------------
Common Stock issued pursuant to the exercise of an Option granted under
this Plan (hereinafter "Optionee Stock"), or any interest in such Optioned
Stock, may be sold, assigned, gifted, pledged, hypothecated, encumbered or
otherwise transferred or alienated in any manner by the holder(s) thereof,
subject, however, to any representations or warranties requested under Section
21 of this Plan and also subject to any restrictions imposed pursuant to Section
11(h) of this Plan and to compliance with any applicable federal, state or other
local law, regulation or rule governing the sale or transfer of stock or
securities.
17. Reservation of Shares of Common Stock
-------------------------------------
The Company, during the term of this Plan, will at all times reserve and
keep available such number of shares of its Common Stock as shall be sufficient
to satisfy the requirements of the Plan.
18. Restrictions on Issuance of Shares
----------------------------------
The Company, during the term of this Plan, will use its best efforts to
seek to obtain from the appropriate regulatory agencies any requisite
authorization in order to issue and sell such number of shares of its Common
Stock as shall be sufficient to satisfy the requirements of the Plan. The
inability of the Company to obtain from any such regulatory agency having
jurisdiction thereof the authorization deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any shares of its stock hereunder
to the inability of the Company to confirm to its satisfaction that any issuance
and sale of any shares of such stock will meet applicable legal requirements
shall relieve the Company of any liability in respect of the non-issuance or
sale of such stock as to which such authorization or confirmation have not been
obtained.
19. Notices
-------
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Any notice to be given to the Company pursuant to the provisions of this
Plan shall be addressed to the Company in care of its Secretary at its principal
office, and any notice to be given to an Optionee to whom an Option is granted
hereunder shall be addressed to him or her at the address given beneath such
Optionee's signature on the Stock Option Agreement, or at such other address as
such Optionee or his transferee (upon the transfer of Optionee Stock) may
hereafter designate in writing to the Company. Any such notice shall be deemed
duly given when enclosed in a properly sealed envelope or wrapper addressed as
aforesaid, registered or certified, and deposited, postage and registry or
certification fee prepaid, in a post office or branch post office regularly
maintained by the United States Postal Service. It shall be the obligation of
each Optionee and each transferee holding Optionee Stock to provide the
Secretary of the Company, by letter mailed as provided hereinabove, with written
notice of his or her correct mailing address.
20. Adjustments Upon Changes in Capitalization
------------------------------------------
If the outstanding shares of Common Stock of the Company are increased,
decreased, changed into or exchanged for a different number or kind of shares of
the Company through reorganization, recapitalization, reclassification, stock
dividend, stock split or reverse stock split, upon proper authorization of the
Board, an appropriate and proportionate adjustment shall be made in the number
and kind of shares which may be issued upon exercise of Options granted under
the Plan; provided, however, that no such adjustment need be made if, upon the
advice of counsel, the Board determines that such adjustment may result in the
receipt of federally taxable income to holders of Options granted hereunder or
the holders of Common Stock or other classes of the Company's securities.
21. Representations and Warranties
------------------------------
As a condition to the exercise of any portion of an Option, the Company may
require the person exercising such Option to make any representation and/or
warranty to the Company as may, in the judgment of counsel to the Company, be
required under any applicable law or regulation, including but not limited to a
representation and warranty that the shares are being acquired only for
investment and without any present intention to sell or distribute such shares
if, in the opinion of counsel for the Company, such a representation is
required under the Securities Act of 1933, as amended (the "Securities Act"), or
any other applicable law, regulation or rule of any governmental agency.
22. No Enlargement of Employee Rights
---------------------------------
This Plan is purely voluntary on the part of the Company, and while the
Company hopes to continue it indefinitely, the continuance of the Plan shall not
be deemed to constitute a contract between the Company and any employee, or to
be consideration for or a condition of the employment of any employee. Nothing
contained in the Plan shall be deemed to give any employee the right to be
retained in his employ of the Company or its Affiliated Companies, or to
interfere with the right of the Company or an Affiliated Company to discharge or
retire any employee thereof at any time. No employee shall have any right to or
interest in options authorized hereunder prior to the grant of such an Option to
such employee, and upon such grant such employee shall have only such rights and
interests as are expressly provided herein, subject, however, to all applicable
provisions of the Company's Certificate of Incorporation, as the same may be
amended from time to time.
23. Legends on Stock Certificates
-----------------------------
Unless an appropriate registration statement is filed pursuant to the
Securities Act , with respect to the shares of Common Stock issuable under this
Plan, each certificate representing such Common Stock shall be endorsed on its
face with the following legend or its equivalent:
"Neither the Option pursuant to which the shares represented by this
certificate are issued nor said shares have been registered under the
Securities Act of 1933, as amended (the "Act"). Transfer or sale of such
securities or any interest therein is unlawful except after registration,
or pursuant to an exemption from the registration requirements thereunder."
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24. Specific Performance
--------------------
The Options granted hereunder and the Optionee Stock issued pursuant to the
exercise of such an Option cannot be readily purchased or sold in the open
market, and, for that reason among others, the Company and its stockholders will
be irreparably damaged in the event that this Plan is not specifically enforced.
Should any dispute arise concerning the sale or other disposition of an Option
and/or Optionee Stock, an injunction may be issued restraining such sale or
other disposition of such Option and/or Optionee Stock pending the determination
of such controversy. In the event of any controversy concerning the right or
obligation to purchase or sell any such Option or Optionee Stock, such right or
obligation shall be enforceable in a court of equity by a decree of specific
performance. Such remedy shall, however, be cumulative and not exclusive, and
shall be in addition to any other remedy which the parties may have.
25. Invalid Provisions
------------------
In the event that any provision of this Plan is found to be invalid or
otherwise unenforceable under any applicable law, such invalidity or
unenforceability shall not be construed as rendering any other provisions
contained herein invalid or unenforceable, and all such other provisions shall
be given full force and effect to the same extent as though the invalid or
unenforceable provision was not contained herein.
26. Applicable Law
--------------
This Plan shall be governed by and construed in accordance with the laws of
the State of California.
27. Successors and Assigns
----------------------
This Plan shall be binding on and inure to the benefit of the Company and
the employees, directors, consultants, advisers and/or independent contractors
to whom an Option is granted hereunder, and such Optionees' heirs, executors,
administrators, legatees, personal representatives, assignees and transferees.
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