<PAGE>
As filed with the Securities and Exchange Commission on December , 1999
Registration No. 333-88233
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Post-Effective Amendment No.1
on Form S-8
to
Form S-4
Registration Statement
Under
The Securities Act of 1933
GENERAL ELECTRIC COMPANY
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<S> <C> <C>
New York 3724 14-0689340
(State or Other Jurisdiction of Incorporation (Primary Standard Industrial Classification (I.R.S. Employer Identification Number)
or Organization) Code Number)
</TABLE>
3135 Easton Turnpike
Fairfield, Connecticut 06431-0001
(Address of Principal Executive Offices)
OEC Medical Systems, Inc.
1998 Stock Option Plan, and
OEC Medical Systems, Inc. 1990 Stock Option/Stock Purchase Plan
Amended and Restated Through March 31, 1996
(Full Titles of the Plans)
Robert E. Healing
General Electric Company
3135 Easton Turnpike
Fairfield, Connecticut 06431-0001
(203) 373-2243
(Name, Address and Telephone Number, Including Area Code, of Agent for Service)
Copy to:
Gibson, Dunn & Crutcher LLP
1801 California Street
Suite 4100
Denver, Colorado 80202
(303) 298-5700
Attention: Richard M. Russo
In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plan(s) described herein.
<PAGE>
INTRODUCTORY STATEMENT
General Electric Company, a New York corporation (the "Registrant"), hereby
amends its Registration Statement on Form S-4 (Registration No. 333-88233),
effective October 1, 1999 (the "Form S-4"), by filing this Post-Effective
Amendment No. 1 on Form S-8 to the Form S-4, relating to 461,647 shares of
Common Stock, par value $.16 per share, of the Registrant (the "Common Stock")
issuable in connection with the OEC Medical Systems, Inc. 1998 Stock Option
Plan, and OEC Medical Systems, Inc. 1990 Stock Option/Stock Purchase Plan
Amended and Restated Through March 31, 1996 Plan (as amended and restated)
(together, the "Plans"). In addition, pursuant to Rule 416(c) under the
Securities Act of 1933, as amended, this Registration Statement also covers an
indeterminate number of interests to be offered or sold pursuant to the Plans,
and any additional securities that may be issuable by reason of stock splits,
stock dividends, or similar transactions.
On November 29, 1999, OEC Medical Systems, Inc., a Delaware corporation
("OEC"), became a wholly-owned subsidiary of the Registrant upon consummation of
the merger (the "Merger") contemplated by the Agreement and Plan of Merger dated
as of August 7, 1999 (the "Merger Agreement") among the Registrant, a wholly-
owned subsidiary of the Registrant, and OEC. Each option (an "Outstanding
Option") to purchase shares of common stock, $0.01 par value, of OEC ("OEC
Common Stock"), which was outstanding immediately prior to the effective time of
the Merger (the "Effective Time") pursuant to the Plans became an option to
purchase the number of shares of Common Stock decreased to the nearest whole
share, determined by multiplying (i) the number of shares of OEC Common Stock
subject to such Outstanding Option immediately prior to the Effective Time by
(ii) 0.262 (the "Exchange Ratio"), at an exercise price per share of Common
Stock (increased to the nearest whole cent) equal to the exercise price per
share of OEC Common Stock immediately prior to the Effective Time divided by the
Exchange Ratio. Pursuant to the Merger Agreement, on November 29, 1999, OEC
adopted certain amendments to the Plans which impact the exercisability of the
Outstanding Options (copies of these amendments are filed as Exhibits to this
Registration Statement). Except as provided in such amendments, each
Outstanding Option will otherwise be exercisable upon the same terms and
conditions as were applicable immediately prior to the Effective Time.
This Post-Effective Amendment relates to the offer and sale after the
Effective Time of Common Stock and an indeterminate amount of interests pursuant
to and in accordance with the Plan. This Post-Effective Amendment relates only
to the 461,647 shares of Common Stock registered on the Form S-4 that will not
be issued in the Merger and that are issuable with respect to the Plan and an
indeterminate amount of interests to be offered or sold pursuant to the Plan,
and any additional securities that may be issuable by reason of stock splits,
stock dividends, or similar transactions.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents heretofore filed (file number 1-00035) by the
Registrant with the Securities and Exchange Commission (the "SEC") pursuant to
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or as
otherwise indicated, are incorporated herein by reference:
1. The Registrant's Annual Report on Form 10-K for the year ended December 31,
1998;
2. The Registrant's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1999, June 30, 1999 and September 30, 1999; and
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3. The description of the Common Stock contained in the Registration Statement
on Form S-4 (Registration No. 333-88233) to which this Post-Effective
Amendment No. 1 relates under the caption "Description of GE Common Stock".
All reports and other documents filed by the Registrant pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act and all documents filed by the
Plan subsequent to the date hereof and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference herein and to be a part hereof from the dates of
filing of such reports and documents. Any statement contained 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 incorporated or deemed to be incorporated by reference
herein, modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 721 of the New York Business Corporation Law ("NYBCL") provides
that, in addition to indemnification provided in Article 7 of the NYBCL, a
corporation may indemnify a director or officer by a provision contained in the
certificate of incorporation or bylaws or by a duly authorized resolution of its
stockholders or directors or by agreement, provided that no indemnification may
be made to or on behalf of any director or officer if a judgment or other final
adjudication adverse to the director or officer establishes that his acts were
committed in bad faith or were the result of active and deliberate dishonesty
and were material to the cause of action so adjudicated, or that he personally
gained in fact a financial profit or other advantage to which he was not legally
entitled.
Section 722(a) of the NYBCL provides that a corporation may indemnify a
director or officer made, or threatened to be made, a party to any action other
than a derivative action, whether civil or criminal, against judgments, fines,
amounts paid in settlement and reasonable expenses actually and necessarily
incurred as a result of such action, if such director or officer acted, in good
faith, for a purpose which he reasonably believed to be in, or not opposed to,
the best interests of the corporation and, in criminal actions or proceedings,
in addition, had no reasonable cause to believe that his conduct was unlawful.
Section 722(c) of the NYBCL provides that a corporation may indemnify a
director or officer, made or threatened to be made a party in a derivative
action, against amounts paid in settlement and reasonable expenses actually and
necessarily incurred by him in connection with the defense or settlement of such
action, or in connection with an appeal therein if such director or officer
acted, in good faith, for a purpose which he reasonably believed to be in, or
not opposed to, the best interests of the corporation, except that no
indemnification will be available under Section 722(c) of the NYBCL in respect
of (1) a threatened or pending action which is settled or otherwise disposed of,
or (2) any claim as to which such director or officer shall have been adjudged
liable to the corporation, unless and only to the extent that the court in which
the action was brought, or, if no action was brought, any court of competent
jurisdiction, determines upon application, that, in view of all the
circumstances of
3
<PAGE>
the case, the director or officer is fairly and reasonably entitled to indemnity
for such portion of the settlement amount and expenses as the court deems
proper.
Section 723 of the NYBCL specifies the manner in which payment of
indemnification under Section 722 of the NYBCL or indemnification permitted
under Section 721 of the NYBCL may be authorized by the corporation. It provides
that indemnification by a corporation is mandatory in any case in which the
director or officer has been successful, whether on the merits or otherwise, in
defending an action. In the event that the director or officer has not been
successful or the action is settled, indemnification must be authorized by the
appropriate corporate action as set forth in Section 723.
Section 724 of the NYBCL provides that, upon application by a director or
officer, indemnification may be awarded by a court to the extent authorized
under Section 722 and Section 723 of the NYBCL. Section 725 of the NYBCL
contains certain other miscellaneous provisions affecting the indemnification of
directors and officers.
Section 726 of the NYBCL authorizes a corporation to purchase and maintain
insurance to indemnify (1) a corporation for any obligation which it incurs as a
result of the indemnification of directors and officers under the provisions of
Article 7 of the NYBCL, (2) directors and officers in instances in which they
may be indemnified by a corporation under the provisions of Article 7 of the
NYBCL, and (3) directors and officers in instances in which they may not
otherwise be indemnified by a corporation under such section, provided the
contract of insurance covering such directors and officers provides, in a manner
acceptable to the New York State Superintendent of Insurance, for a retention
amount and for co-insurance.
Section 6 of the Restated Certificate of Incorporation, as amended, of the
Registrant provides in part as follows:
A person who is or was a director of the corporation shall have no personal
liability to the corporation or its stockholders for damages for any breach of
duty in such capacity except that the foregoing shall not eliminate or limit
liability where such liability is imposed under the Business Corporation Law of
the State of New York.
Article XI of the bylaws, as amended, of GE provides, in part, as follows:
The Company shall, to the fullest extent permitted by applicable law as the
same exists or may hereafter be in effect, indemnify any person who is or
was or has agreed to become a director or officer of the Company and who is
or was made or threatened to be made a party to or is involved in any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, including an action by or in the
right of the Company to procure a judgment in its favor and an action by or
in the right of any other corporation of any type or kind, domestic or
foreign, or any partnership, joint venture, trust, employee benefit plan or
other enterprise, which such person is serving, has served or has agreed to
serve in any capacity at the request of the Company, by reason of the fact
that he or she is or was or has agreed to become a director or officer of
the Company, or is or was serving or has agreed to serve such other
corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise in any capacity, against judgments, fines, amounts paid or
to be paid in settlement, taxes or penalties, and costs, charges and
expenses, including attorney's fees, incurred in connection with such
action or proceeding or any appeal therein, provided, however, that no
indemnification shall be provided to any such person if a judgment or other
final adjudication adverse to the director or officer establishes that (i)
his or her acts were committed in bad faith or were the result of active
and deliberate dishonesty and, in either case, were material to the cause
of action so adjudicated, or (ii) he or she personally gained in fact a
financial profit or other advantage to which he or she was not legally
entitled. The benefits of this Paragraph A shall extend to the heirs and
legal representatives of any person entitled to indemnification under this
paragraph.
4
<PAGE>
The Registrant has purchased certain liability insurance for its officers
and directors as permitted by Section 727 of the NYBCL.
Item 7. Exemptions from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
The exhibits listed on the accompanying Exhibit Index are filed or
incorporated by reference as part of this Registration Statement.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any 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;
(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 undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered 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 Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
5
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fairfield, State of Connecticut, on December 17,
1999.
GENERAL ELECTRIC COMPANY
By: /s/ Robert E. Healing
____________________________________
Name: Robert E. Healing
Title: Corporate Counsel
OEC MEDICAL SYSTEMS, INC.
1998 Stock Option PLAN
Pursuant to the requirements of the Securities Act of 1933, the
administrators of the Plan have duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunder duly authorized, in the City
of Salt Lake City, State of Utah, on December 17, 1999.
OEC MEDICAL SYSTEMS, INC.
1998 Stock Option PLAN
By: /s/ Randy Zundel
____________________________________
Name: Randy Zundel
Title: Plan Administrator
OEC MEDICAL SYSTEMS, INC.
1990 Stock Option/Stock Purchase Plan Amended and Restated
Through March 31, 1996
Pursuant to the requirements of the Securities Act of 1933, the
administrators of the Plan have duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunder duly authorized, in the City
of Salt Lake City, State of Utah, on December 17, 1999.
OEC MEDICAL SYSTEMS, INC.
1990 Stock Option/Stock Purchase Plan Amended and Restated
Through March 31, 1996
By: /s/ Randy Zundel
____________________________________
Name: Randy Zundel
Title: Plan Administrator
6
<PAGE>
Exhibit Index
The following is a list of Exhibits included as part of this Registration
Statement. Items marked with a single asterisk are filed herewith. Items marked
with a double asterisk were filed by the Registrant with the SEC on October 1,
1999 with the Form S-4 to which this Post-Effective Amendment relates.
4.1 The Certificate of Incorporation, as amended, and By-laws, as amended,
of General Electric Company are incorporated by reference to Exhibit (3)
of General Electric's Current Report on Form 8-K dated April 28, 1997.
*4.2 OEC Medical Systems, Inc. 1990 Stock Option/Stock Purchase Plan Amended
and Restated Through March 31, 1996.
*4.3 Amendment No 1. to OEC Medical Systems, Inc. 1990 Stock Option/Stock
Purchase Plan Amended and Restated Through March 31, 1996.
4.4 OEC Medical Systems, Inc. 1998 Stock Option Plan is incorporated by
reference to OEC Medical System's Form S-8 filed June 12, 1998.
*4.5 Amendment No. 1 to OEC Medical Systems, Inc. 1998 Stock Option.
**5.1 Opinion of Robert E. Healing, Corporate Counsel for General Electric
Company, as to the legality of the securities being registered.
*23.1 Consent of KPMG LLP
*23.2 Consent of Robert E. Healing (included in the opinion filed as Exhibit
5.1 to this Registration Statement).
**24.1 Powers of Attorney.
<PAGE>
EXHIBIT 4.2
OEC MEDICAL SYSTEMS, INC.
1990 STOCK OPTION/STOCK PURCHASE PLAN
AMENDED AND RESTATED THROUGH MARCH 31, 1996
ARTICLE ONE
GENERAL PROVISIONS
1. PURPOSE.
This restated 1990 Stock Option/Stock Purchase Plan (the "Plan") was
initially established, effective April 16, 1990, as a consolidation and
restatement of four pre-existing stock option plans and one pre-existing stock
purchase plan maintained by Diasonics, Inc., a Delaware corporation: (i) the
1982 Stock Option Plan, (ii) the 1984 Stock Option Plan, (iii) the 1985 Stock
Option Plan, (iv) the 1987 Stock Option Plan and (v) the 1987 Stock Purchase
Plan, and this Plan accordingly supersedes those five plans (collectively the
"Predecessor Plans") and serves as their successor. Accordingly, all options and
purchase rights outstanding under the Predecessor Plans on the original April
16, 1990 effective date of this Plan have been incorporated into this Plan,
subject, however, to the express terms and conditions of the instruments
evidencing each such pre-existing option and purchase right
This restated Plan is intended to provide key Employees (including Officers
and Directors), non-employee Board members and Consultants of the Company and
the Company's Subsidiaries with the opportunity to acquire an equity interest in
the Company and thereby encourage them to continue to provide services to the
Company or the Company's Subsidiaries. The effective date of this restatement
shall be July 14, 1993.
2. DEFINITIONS.
As used herein, the following terms have the meanings indicated:
2.1 "Board" means the Board of Directors of the Company.
2.2 "Code" means the Internal Revenue Code of 1986, as amended.
2.3 "Committee" means one or more committees of the Board, each with at
least two Board members, which shall assume responsibility for the
administration of one or more functions under the Plan, either to the extent
expressly provided in the Plan or as specifically authorized by Board
resolution.
2.4 "Common Stock" means the common stock of the Company, $.01 par value
per share.
2.5 "Company" means OEC Medical Systems, Inc., a Delaware corporation.
2.6 "Consultant" means any person (other than a Director) or entity
(including any corporation) rendering services to the Company or a Subsidiary as
an independent contractor or any person (other than a Director) who is employed
by the person or entity rendering such services.
<PAGE>
2.7 `Director" means an individual who is a member of the Board or a
member of the board of directors of any Subsidiary.
2.8 "Employee" means an individual who is employed, within the meaning of
Section 3401 of the Code and the regulations thereunder, as a common law
employee by the Company or one or more Subsidiary corporations, including any
Officer or Director who is so employed, but excluding any Officer or Director
who is not so employed.
2.9 "Employment Termination" means:
(i) In the case of an Employee, the cessation of such individual's
Employee status for any reason without his/her becoming or continuing as a
Consultant or Director; and
(ii) In the case of a Director, the cessation of such individual's
service on the Board for any reason without his/her becoming or continuing
as an Employee or Consultant; and
(iii) In the case of a Consultant, the cessation of such person's status
as a Consultant for any reason without his/her becoming or continuing as an
Employee or Director.
2.10 "Exercise Price" means the price per share at which an Option may be
exercised.
2.11 "Fair Market Value" means:
(i) The closing price per share of Common Stock on the relevant
determination date on an established stock exchange, if the Common Stock is
listed and traded on such an exchange. If no sale of Common Stock is made
on any such exchange on the date in question, the Fair Market Value shall
be determined by the closing price of the Common Stock on the next
preceding day upon which such a sale shall have occurred.
(ii) If the Common Stock is at the time traded on the Nasdaq National
Market, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question, as such price is reported by
the National Association of Securities Dealers on the Nasdaq National
Market or any successor system. If there is no closing selling price for
the Common Stock on the date in question, then the Fair Market Value shall
be the closing selling price on the last preceding date for which such
quotation exists.
2.12 "Grant Date" is the date on which (i) the Committee grants a
discretionary Option under Article Two of the Plan, (ii) the Committee grants a
Purchase Right under Article Three of the Plan, or (iii) an automatic grant is
made to a non-employee member of the Board pursuant to the provisions of Article
Four.
2.13 "Incentive Stock Option" means an Option under Article Two which
meets the requirements of Section 422(b) of the Code,
2.14 "1933 Act" means the Securities Act of 1933, as amended.
2.15 "1934 Act" means the Securities Exchange Act of 1934, as amended,
2.16 "No statutory Stock Option" means an Option under Article Two or
Article Four which is not intended to meet the requirements of Section 422(b),
423(b) or 424(b) of the Code.
2.17 "`Note" means a full recourse promissory note of an Optionee and/or
Participant
<PAGE>
2.18 "Officer" means any Employee who is at the time of determination
subject to the short-swing profit restrictions of Section 16 of the 1934 Act.
2.19 "Option" means, except where the context clearly indicates otherwise,
(i) any discretionary stock option grant made by the Committee pursuant to
Article Two of the Plan or (ii) any automatic stock option grant made pursuant
to the provisions of Article Four.
2.20 "Optionee" means, except where the context clearly indicates
otherwise, (i) an Employee, non-employee Director or Consultant to whom a
discretionary Option has been granted pursuant to Article Two of the Plan or
(ii) a non-employee Director to whom an automatic grant has been made pursuant
to the provisions of Article Four.
2.21 "Participant" means an Employee, non-employee Director or Consultant
who has been granted a Purchase Right under Article Three of the Plan.
2.22 "Permanent Disability" means a disability within the meaning of
Section 22(e)(3) of the Code.
2.23 "Plan" means this restated OEC Medical Systems, Inc. 1990 Stock
Option/Stock Purchase Plan, as it may be subsequently amended from time to time.
2.24 "Purchase Agreement" means the agreement between the Company and the
Optionee and/or Participant evidencing the purchase of Shares under the Plan.
2.25 "Purchase Price" means, with respect to an Option granted under
Article Two or Article Four, the Exercise Price times the number of Shares with
respect to which such Option is exercised and means, with respect to a Purchase
Right granted under Article Three, the aggregate price payable for the Shares
purchasable under such Purchase Right
2.26 "Purchase Right" means a right to purchase one or more Shares granted
to a Participant pursuant to the provisions of Article Three.
2.27 "Right of Repurchase" means the repurchase rights of the Company
described in Section 4 of Article Three.
2.28 "Shares" means the shares of Commission Stock issuable under the Plan
pursuant to Options granted under Articles Two and Four and Purchase Rights
granted under Article Three.
2.29 "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, provided each such
corporation (other than the last corporation) in the unbroken chain owns at
least 50 percent of the total combined voting power of all classes of stock in
one of the other corporations in such chain.
2.30 "10% Stockholder" means an individual who owns stock possessing 10%
or more of the total combined voting power of all classes of outstanding stock
of the Company or any one of its Subsidiary corporations. In determining such
stock ownership, the following guidelines shall be in effect:
(i) The individual shall be considered to own the stock owned, directly or
indirectly, by or for his/her brothers and sisters, spouse, ancestors and
lineal descendants. Stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust shall be considered as being
owned proportionately by or for its stockholders, partners or
beneficiaries. Stock with respect to which such individual holds an Option
or Purchase Right shall not be counted.
<PAGE>
(ii) "Outstanding stock" shall include all stock actually _______ and
outstanding immediately after the grant of an Option or Purchase __________
to such individual, but shall not include Shares authorized for issuance
______ any Options or Purchase Rights held by such individual or by any
_________ person.
3. STRUCTURE OF THE PLAN.
3.1 Stock Programs. The Plan shall be divided into three separate
--------------
components: the Discretionary Option Grant Program specified in Article Two, the
Stock Purchase Program specified in Article Three, and the Automatic Option
Grant Program specified in Article Four. Under the Discretionary Option Grant
Program, eligible Employees, non-employee Directors and Consultants may, at the
discretion of the Committee, be granted Options to purchase shares of Common
Stock at an Exercise Price equal to the Fair Market Value of the shares on the
Grant Date. Under the Stock Purchase Program, eligible Employees, non-employee
Directors and Consultants may be granted Purchase Rights to acquire shares of
Common Stock at a Purchase Price equal to the Fair Market Value of the shares on
the Grant Date. Such shares may be issued as fully vested or may vest in one or
more installments over time. Under the Automatic Option Grant Program, the non-
employee Directors will automatically receive periodic option grants to purchase
shares of Common Stock at an Exercise Price equal to the Fair Market Value of
the shares on each automatic Grant Date. No such non-employee Director member
may, however, be granted options to purchase more than 15,000 shares of Common
Stock (subject to adjustment under Section 4.4 of this Article One) under the
Automatic Option Grant Program. Non-employee Directors (other than those serving
as members of the Primary Committee) shall also, in their capacity as such
Directors, be eligible to receive Options and Purchase Rights pursuant to the
Discretionary Option Grant and Stock Purchase Programs in effect under the Plan.
3.2 Applicability. Unless the context clearly indicates otherwise, the
-------------
provisions of Articles One and Five of the Plan shall apply to the Discretionary
Option Grant Program, the Stock Purchase Program and the Automatic Option Grant
Program and shall accordingly govern the interests of all individuals under the
Plan.
4. STOCK
4.1 Number of Shares. The shares of Common Stock issuable under the Plan
----------------
shall be shares of the Company's authorized but unissued Common Stock or shares
of Common Stock reacquired by the Company. The maximum number of Shares
available for issuance under the Plan from and after the original April 16, 1990
effective date of this consolidated Plan shall not exceed 3,693,303 shares of
Common Stock,/1/ subject to adjustment from time to time in accordance with
Section 4.4 of this Article One. All Options or Purchase Rights outstanding
under any of the Predecessor Plans on the original April 16, 1990 effective date
of this Plan shall be incorporated into this Plan, subject, however, to the
express terms and conditions of the instruments evidencing each such pre.
existing Option or Purchase Right. To the extent any such Options or Purchase
Rights are
- ------------------------
/1/ Such number of Shares represents the sum of (i) the 1,793,303 Shares which
remained available, as of the original April 16, 1990 effective date of the
Plan, for issuance in the aggregate under the five Predecessor Plans
consolidated into this Plan, (ii) an increase upon such effective date of
an additional 400,000 Shares, (iii) an additional increase of 1,000,000
Shares approved by the Company's stockholders at the 1993 Annual
Stockholders Meeting and (iv) a further increase of 500,000 Shares
authorized by the Board on March 26, 1996, subject to stockholder approval
at the 1996 Annual Meeting. These numbers have been adjusted to reflect the
1 for 5 reverse split of the Common Stock effected by the Company on August
1,1991.
<PAGE>
subsequently exercised, the number of Shares Issued with respect to each such
Option or Purchase Right shall reduce, on a one Share-for one Share basis, the
number of Shares available for issuance under this Plan.
4.2 Share Limitation. No one person participating in the Plan may receive
----------------
Options, separately exercisable stock appreciation rights and direct Share
issuances for more than 150,000 shares of Common Stock in the aggregate per
calendar year, beginning with the 1996 calendar year, except that such limit
shall be increased to 250,000 shares of Common Stock for the calendar year in
which such person receives his/her initial Option grant or Purchase Right under
the Plan.
4.3 Reissuances. In the event that any outstanding Option or Purchase
-----------
Right (including outstanding Options and Purchase Rights issued under the
Predecessor Plans and incorporated into this Plan) for any reason expires or is
terminated, whether or not pursuant to the cancellation-regrant provisions of
Section 2 of Article Two, the Shares allocable to the unexercised portion of
such Option or Purchase Right may be made the subject of subsequent Option or
Purchase Right grants under this Plan. Shares subject to any Option or portion
thereof surrendered or cancelled in accordance with Section 1.8(b) of Article
Two or Section 3.2 of Article Four and all share issuances under the Plan,
whether or not such shares are subsequently repurchased by the Company pursuant
to its repurchase rights under Articles Two and Three, shall reduce on a share-
for-share basis the number of shares of Common Stock available for subsequent
Option or Purchase Right grants under this Plan. In addition, should the
Purchase Price of an outstanding Option or Purchase Right exercised under the
Plan be paid with shares of Common Stock or should shares of Common Stock be
withheld by the Company in satisfaction of the withholding taxes incurred by the
Optionee or the Participant in connection with the acquisition or vesting of
Shares issued under the Plan, then the number of shares of Common Stock
available for issuance under the Plan shall be reduced by the gross number of
Shares for which the Option or Purchase Right is exercised, and not by the net
number of Shares of Common Stock actually issued to the Optionee or the
Participant.
4.4 Adjustments. Subject to any required action by stockholders, in the
-----------
event of any increase or decrease in the number of the Company's outstanding
shares of Common Stock resulting from a subdivision or consolidation of such
shares or the payment of a stock dividend (but only of Common Stock), a rights
offering covering shares of Common Stock or any other increase or decrease in
the number of issued shares of Common Stock effected without receipt of
consideration by the Company, the Primary Committee may, in its discretion, make
proportionate adjustments to:
(i) the maximum number of Shares which may be issued pursuant to the
Discretionary Option Grant Program and Stock Purchase Program of this Plan,
(ii) the maximum number of Shares for which any one person may
receive Option grants, separately exercisable stock appreciation rights and
direct Share issuances per calendar year pursuant to the Discretionary
Option Grant Program and Stock Purchase Program of this Plan.
(iii) the number of Shares purchasable under each Option outstanding
under the Discretionary Option Grant Program and the Exercise Price payable
per share thereunder, and
(iv) the number of Shares purchasable under each outstanding Purchase
Right and the Purchase Price payable per share.
Upon the occurrence of any of the foregoing Section 4.4 transactions
affecting the Common Stock issuable under the Plan, the following adjustments
shall automatically be made to the Automatic Option Grant Program and the
outstanding grants thereunder:
(i) the number of Shares for which automatic option grants are to
be?? made per non-employee Board member at each subsequent Annual
Stockholders Meeting and the maximum number of Shares
<PAGE>
which each non-employee Board member may acquire in the aggregate pursuant
to such automatic option grants shall be proportionately adjusted to
reflect the effect of the Section 4.4 transaction upon the Company's
outstanding Common Stock, and
(ii) the number of Shares purchasable under each Option outstanding
under the Automatic Option Grant Program and the Exercise Price payable per
share thereunder shall be proportionately adjusted to reflect the effect of
the Section 4.4 transaction and thereby preclude any dilution or
enlargement of rights under such Option.
5. ADMINISTRATION OF THE PLAN.
5.1 Committees. Except to the limited extent provided below, the Plan
----------
shall be administered solely and exclusively by one or more Committees appointed
by the Board and comprised of at least two members of the Board. Each member of
the primary Committee ("Primary Committee") shall be a "disinterested person"
within the meaning of SEC Rule 16b-3(c)(2)(1) under the 1934 Act, The Primary
Committee shall have sole and exclusive authority to grant Options under Article
Two or Purchase Rights under Article Three to individuals who are at the time
either Officers or Directors. Individuals who are not at the time either
Officers or Directors may be granted Options under Article Two or Purchase
Rights under Article Three by the Primary Committee, by a secondary Committee of
two or more Board members or by the Board. Administration of the automatic
option grant provisions of Article Four of the Plan shall be self-executing in
accordance with the terms and conditions of such Article Four, and neither the
Board, the Primary Committee nor any secondary Committee shall exercise any
discretionary functions with respect to the Option grants made pursuant to that
section of the Plan.
5.2 Procedures. The Board shall appoint the members of each Committee and
----------
may from time to time remove one or more of such members. Vacancies on any
Committee however caused shall be filled by the Board. Each Committee shall
appoint one of its members as chairman and shall hold meetings at such times and
places as it may determine. Acts of a majority of the members of the Committee
at a meeting at which a quorum is present, or acts approved in writing by all of
the Committee members, shall be valid acts of the Committee.
5.3 Interpretation. All questions of interpretation, construction,
--------------
implementation and application of the Plan shall be determined by the Primary
Committee. Such determinations shall be final and binding on all persons. No
member of any Committee or the Board shall be liable for any act or omission
with respect to the Plan or any Option or Purchase Right granted or any Shares
issued pursuant hereto, provided such member acted (or failed to act) in good
faith.
6. PARTICIPATION.
6.1 Selection. The applicable Committee shall, from time to time at its
---------
discretion, select (from among the eligible individuals specified below) the
persons who are to be granted Options ("Optionees") under Article Two and/or
Purchase Rights Participants") under Article Three, establish the number of
Shares subject to each such grant, and determine whether any Options granted
under Article Two are to be Incentive Stock Options or Nonstatutory Stock
Options (except that no Incentive Stock Option may be granted to any person who
is not an Employee).
6.2 Eligibility. The persons eligible to participate in the Discretionary
-----------
Option Grant Program and the Stock Purchase Program shall be limited to
Employees (including Officers or Directors), non-employee Directors (other than
individuals at the time serving as members of the Primary Committee) and
Consultants (including employees of Consultants). Non-employee Directors serving
as members of the Primary Committee shall not, during such period of service, be
---
eligible to participate in the Discretionary Option Grant Program or the Stock
Purchase Program. However, each non-employee Director serving on the Primacy
Committee and each of the other
<PAGE>
non-employee Directors shall be eligible to receive automatic Option grants
pursuant to the provisions of Article Four.
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
1. TERMS AND CONDITIONS OF OPTIONS.
1.1 Option Agreements. Discretionary Option grants made by the Committee
-----------------
pursuant to this Article Two shall be evidenced by written stock option
agreements ("Option Agreements") in such form as the Primary Committee shall
from time to time determine. The Option Agreements shall comply with and be
subject to the terms and conditions set forth below. Except as the Committee
authorizing the grant may otherwise determine, any Option granted under this
Article Two shall cease to be effective unless the Optionee returns a duly-
executed Option Agreement to the Company within sixty (60) days after such
agreement is sent to the Optionee. Waiver of the 60-day return requirement with
respect to one or more Optionees shall not constitute a waiver with respect to
any other Optionee. To the extent an Option Is granted to a person who is not an
Employee, non-employee Director or Consultant at the time of grant, such grant
shall not become effective until such person becomes an Employee, Director or
Consultant and shall terminate in the event such person does not become an
Employee, Director or Consultant within the time period specified by the
Committee authorizing the grant.
1.2 Minimum Service Period. Except as otherwise specified in Section 1.8
----------------------
of this Article Two, no Option granted under this Article Two shall become
exercisable unless and until the Optionee renders services as an Employee, non-
employee Board member or Consultant for the minimum period which the Committee
authorizing the grant specifies in the Option Agreement, but such Option
Agreement shall not impose upon the Company or its Subsidiaries any obligation
to retain the Optionee as an Employee, non-employee Board member or Consultant
for any period of specific duration. No Option granted to an Officer of Director
under this Article Two shall become exercisable in whole or in part during the
first six (6) months following the Grant Date of such Option.
1.3 Number of Shares. Each Option shall state the number of Shares to
----------------
which it pertains (the "Option Share") and shall provide for the adjustment
thereof in accordance with the provisions of Section 4.4 of Article One.
1.4 Exercise Price. The following provisions shall be in effect for
--------------
establishing the Exercise Price for each granted Option:
(i) The Exercise Price shall not be less than the Fair Market Value
of the Option Shares on the Grant Date (or on such other date as may be
required by law if the Option is intended to be an Incentive Stock Option)
and shall be set forth in the Option Agreement.
(ii) If any Optionee is on the Grant Date a 10% Stockholder, then the
Exercise Price shall not be less than one hundred and ten percent (110%) of
the Fair Market Value of the Option Shares on the Grant Date.
1.5 Limitation on Exercisabilily. The aggregate Fair Market Value
----------------------------
(determined as of the respective date or dates of grant) of the Common Stock for
which one or more Options granted to any Optionee under this Article Two (or any
other option plan of the Company or its parent or Subsidiary corporations) may
for the first time become exercisable as incentive stock options under the
Federal tax laws during any one calendar year shall not exceed the sum of One
Hundred Thousand Dollars ($100,000). To the extent the Optionee holds two or
more such Options which become exercisable for the first time in the same
calendar year, the foregoing limitation On the
<PAGE>
exercisability thereof as incentive stock options under the Federal tax laws
shall be applied on the basis of the order in which such Options are granted.
1.6 Payment. The Purchase Price shall become immediately due upon
-------
exercise of the Option and shall be payable in one of the following forms:
(i) full payment in cash or cash equivalents;
(ii) full payment in shares of Common Stock held by the Optionee for
the requisite period necessary to avoid a charge to the Company's earnings
for financial reporting purposes and valued at Fair Market Value on the
date of exercise;
(iii) full payment through a combination of shares of Common Stock
held for the requisite period necessary to avoid a charge to the Company's
earnings for financial reporting purposes and valued at Fair Market Value
on the date of exercise and cash or cash equivalents;
(iv) in the discretion of the Committee authorizing the grant,
pursuant to a Note executed by the Optionee, provided such individual is an
Employee;
(v) on a partly-paid basis in accordance with the applicable
provisions of Delaware law; or
(vi) full payment through a broker-dealer sale and remittance
procedure pursuant to which the Optionee (I) shall provide irrevocable
written instructions to a Company-designated brokerage firm to effect the
immediate sale of the purchased Shares and to remit to the Company out of
the sale proceeds available on the settlement date, an amount equal to the
Purchase Price payable for the purchased Shares plus all applicable Federal
and State income and employment taxes and (II) shall provide written
directives to the Company to deliver the certificates for the purchased
Shares directly to such brokerage firm in order to complete the sale
transaction.
The interest rate and other terms and conditions of any Note or partly-paid
issuance shall be determined by the authorizing Committee in its sole
discretion; provided however, that such Note shall be a full-recourse obligation
of the Optionee and shall not have a maximum term in excess of five (5) years.
The Note shall bear interest at the minimum rate required by the Federal tax
laws to avoid the imputation of interest income to the Company and compensation
income to the Optionee. The Company may require the Optionee to pledge to the
Company any or all of the Shares acquired upon exercise of the Option as
security for payment of the Note and execute an assignment separate from
certificate with respect to the pledged Shares. The Company (or a pledgeholder
selected by it) may retain possession of the stock certificate(s) representing
the pledged Shares and the assignment separate from certificate in order to
perfect such security interest.
1.7 Term and Non-Transferability. Each Option shall state the time or
----------------------------
times when it is to become exercisable for the Option Shares. No Option shall be
exercisable after the expiration of ten (10) years from the Grant Date, and no
Option granted to a 10% Stockholder shall have a term in excess of five (5)
years from the Grant Date. During the lifetime of the Optionee, the Option,
together with any stock appreciation rights pertaining to such Option, shall be
exercisable only by the Optionee and shall not be assignable or transferable. In
the event of Optionee's death, neither the Option nor any stock appreciations
rights pertaining to such Option shall be transferable by the Optionee other
than by will or by the laws of descent and distribution.
1.8 Acceleration of Vesting/Stock Appreciation Rights.
-------------------------------------------------
(a) Provided (i) a period of six (6) months shall have elapsed from the
Grant Date of the Option and (ii) the Optionee is at the time of exercise an
active Consultant, Employee or Director, then such Optionee shall have
<PAGE>
the right (without regard to the normal vesting schedule set forth in the Option
Agreement) to exercise such Option in whole or in part for fully-vested Shares:
(i) Within thirty (30) days following the consummation of any
transaction approved by the stockholders of the Company in which the
Company will cease to be an independent corporation (including, without
limitation, a reverse merger transaction in which the Company becomes the
subsidiary of another corporation) or the sale or other disposition of all
or substantially all of the assets of the Company;
(ii) Within thirty (30) days following the first date on which there
is a change in the composition of the Board effected through one or more
contested elections for Board membership such that less than two thirds of
the individual members of the Board (determined by rounding up to the next
whole number) is comprised of individuals who: (A) were Directors of the
Company on a date three (3) years prior to the date of such change or (B)
were elected or nominated for election as such Directors during the
intervening three (3)-year period by affirmative vote of at least a
majority of those Directors described in clause (A) above who were still in
office as of the date the Board approved such election or nomination;
(iii) Within thirty (30) days after any "person" (as such term is
used in Sections 13(d) and 14(d) of the 1934 Act) or any related group of
persons (other than such a group that includes the Company) acquires
beneficial ownership of (A) 40% or more of the outstanding Common Stock
pursuant to a tender or exchange offer that the Board does not recommend
the stockholders to accept or (B) 50% or more of the outstanding Common
Stock in a single transaction or in a series of related transactions; and
(iv) Within the thirty (30) day period ending with the effective date
of any dissolution or liquidation of the Company or any merger or
consolidation in which the Company is not the surviving corporation (except
for a transaction the principal purpose of which is to change the State of
the Company's Incorporation), but not earlier than the date on which any
required stockholder approval is obtained.
If the accelerated Option is not exercised during the applicable 30-day
period described in subparagraph (i) or (iv) above, then such Option shall
terminate at the close of business on the last day of such 30-day period, such
Option is assumed by the successor corporation or its parent. Should an
outstanding Option not qualify for acceleration under subparagraph (iv), then
such Option shall be subject to adjustment under Section 3.1 of this Article No,
to the extent such Option is to continue in effect after the subparagraph (i) or
(iv) transaction. The Primary Committee shall have, full power and authority to
extend (either at the time of the Option grant or at any time prior to the
acceleration event) the period of time for which the Option is to remain
exercisable following the occurrence of any acceleration event described in
subparagraph (i) through (iii) above from the thirty (30)-day period specified
in such subparagraph to such greater period of time as the Primary Committee
shall deem appropriate.
(b) In the sole discretion of the Primary Committee, a stock appreciation
right ("SAR") may be granted in connection with all or any part of an Option
granted under this Article Two, either at the time of such Option grant or at
any time thereafter during the term of the Option. The SAR shall give the
Optionee the right to surrender all or part of the Option subject to the SAR
during any of the 30-day periods described in subparagraphs (i) through (iv) of
paragraph (a) above (provided and only if a period of at least six (6) months
shall have elapsed from the Grant Date of such Option) and thereby to obtain
payment in cash from the Company of an amount equal to the difference obtained
by subtracting the aggregate Exercise Price of the Option Shares subject to the
portion of the Option surrendered from the Fair Market Value of such Option
Shares on the date of such surrender. In the case of an SAR exercised during
either of the 30-day periods described in subparagraphs (i) and (iv) of
paragraph (a) above, "Fair Market Value" shall be deemed to be equal to the
greater of (A) the value of the consideration per share that the Optionee would
have received in connection with the subparagraph (i) or (iv) transaction as a
<PAGE>
stockholder of the Company if he/she had exercised the Option (or part thereof)
prior to the consummation of such transaction or (B) the Fair Market Value
determined in good faith by the Primary Committee (as composed on the day
preceding the date of consummation of the subparagraph (i) or (iv) transaction),
taking into consideration all relevant facts and circumstances. When an SAR is
exercised, the underlying Option, to the extent surrendered, shall no longer be
exercisable. An SAR may only be exercised when the Fair Market Value of the
underlying Option Shares exceeds the Exercise Price payable for such shares. For
purposes of Section 4 of Article One of the Plan, the exercise of an SAR shall
be deemed to be an exercise of the underlying Option, and the number of Shares
subject to such Option shall not be available for subsequent Option or Purchase
Right grants under the Plan.
1.9 Employment Termination (Except by Death or Permanent Disability). If
----------------------------------------------------------------
an Optionee's Employment Termination occurs for any reason other than death or
Permanent Disability, any outstanding Option held by such Optionee under this
Article Two shall not remain exercisable for more than a ninety (90)-day period
following the date of such Employment Termination; provided, however that under
no circumstances shall such Option be exercisable after the specified expiration
date of the option term. During such limited exercise period, the Option may not
be exercised for more than that number of vested Shares (if any) for which the
Option is exercisable at the time of the Optionee's Employment Termination.
Upon the expiration of such limited exercise period or (if earlier) upon the
expiration of the option term, the Option shall terminate and cease to be
exercisable. In the case of an Optionee who is an Employee, no Employment
Termination shall occur while such Employee is on military leave, sick leave or
other bona fide leave of absence (to be determined in the sole discretion of the
Committee authorizing the grant). The foregoing notwithstanding, in the case of
an Incentive Stock Option, Employment Termination shall be deemed to have
occurred on the ninetieth (90th) day after the Employee ceases active Employee
status, unless the Employee's reemployment rights are guaranteed by statute or
contract.
1.10 Death or Permanent Disability of Optionee. If an Optionee's
-----------------------------------------
Employment Termination occurs by reason of death or Permanent Disability, then
any Option held by such Optionee under this Article Two may be exercised, for up
to that number of vested Shares (if any) for which the Option is exercisable on
the date of such Employment Termination, at any time prior to the earlier of (i)
twelve months (or such shorter period as the Committee may have specified in the
Option Agreement) after the date of the Optionee's death or Permanent Disability
or (ii) the specified expiration date of the option term. In the case of the
Optionee's death, the exercise may be made by the executors or administrators of
the Optionee's estate or by any person or persons who have acquired the Option
directly from the Optionee by bequest or inheritance, but only to the extent
that the Option has not previously been exercised
1.11 Conditions on Exercise. An Option shall be exercisable at such time
----------------------
or times as the Committee authorizing the grant shall specify in the Option
Agreement and the Shares acquired upon exercise of the Option shall be subject
to such restrictions (including repurchase rights of the Company or first
refusal restrictions) as the Committee may specify in such Option Agreement or
any related stock purchase agreement.
1.12 Stockholder Rights. An Optionee (or a transferee of an Optionee)
------------------
shall have no stockholder rights with respect to any Shares covered by the
Option until such individual shall have exercised the Option, paid the Purchase
Price and been issued a stock certificate for the purchased Shares. No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property), distributions or other rights for which the
record date is prior to the date such stock certificate is issued, except as may
otherwise be provided in Section 4.4 of Article One.
1.13 Modification, Extension and Renewal of Options. Within the
----------------------------------------------
limitations of the Plan, the Primary Committee may, without the consent of the
Optionees, modify, extend or renew one or more outstanding Options or cancel
outstanding Options (to the extent not previously exercised), whether or not in
exchange for the grant of new Options in substitution therefore.
<PAGE>
1.14 Method of Exercise. Subject to all of the provisions hereof, an
------------------
Option may be exercised from time to time in whole or in part (to the extent
exercisable) by delivery of a written notice to the Company setting forth the
number of Shares with respect to which the Option is being exercised. The notice
shall specify the address to which stock certificates for the purchased Shares
should be mailed and shall be accompanied by payment of the Purchase Price
(unless the sale and remittance procedure of clause (vi) of Section 1.6 of this
Article Two is utilized in connection with the Option exercise) and any
documents required pursuant to the last paragraph of such Section 1.6. Within a
reasonable time after receipt of such written notice and payment, the Company
shall cause the stock certificates for the purchased Shares to be delivered to
or on behalf of the Optionee.
1.15 Other Provisions. The Option Agreements authorized under the Plan
----------------
may contain such other provisions not inconsistent with the terms of the Plan as
the Committee authorizing the grant shall deem advisable.
2. CANCELLATION AND NEW GRANT OF OPTION.
2.1 The Primary Committee shall have the authority to effect, at any time
and from time to time, the cancellation of any or all outstanding Options under
this Article Two and to grant in substitution therefore new Options under this
Article Two covering the same or different numbers of shares of Common Stock but
with an Exercise Price not less than one hundred percent (100%) of the Fair
Market Value of the Option Shares on the new Grant Date (or, in the case of a
10% Stockholder, not less than one hundred ten percent (110%) of such Fair
Market Value).
3. SPECIAL ADJUSTMENTS.
3.1 Transactions. Subject to the acceleration and termination provisions
------------
of Section 1.8(a) of this Article Two and any required stockholder action,
should the Company be a party to any merger or consolidation, each continuing or
assumed Option under this Article Two shall pertain and apply to the securities
which a holder of the number of Shares subject to the Option would have been
entitled to receive in consummation of such merger or consolidation, with such
appropriate adjustment in the Exercise Price as may be determined by the Primary
Committee. Appropriate adjustments shall also be made to (i) the maximum number
and kind of securities which may be issued pursuant to this Article Two and (ii)
the maximum number and kind of securities for which any one person may be
granted Options, separately exercisable stock appreciation rights and direct
Share issuances per calendar year under the Plan. Upon the dissolution or
liquidation of the Company, each outstanding Option under this Article Two
shall, subject to the acceleration provisions of Section 1.8(a) of this Article
Two, terminate on the effective date of such dissolution or liquidation.
3.2 Limitation.
----------
(a) To the extent that the foregoing adjustments of this Section 3 relate
to securities of the Company, such adjustments shall be made by the Primary
Committee, whose determination shall be conclusive and binding on all persons.
Except as expressly provided in Section 4.4 of Article One and Section 1.8 of
this Article Two:
(i) the Optionee shall have no rights by reason of any subdivision
or consolidation of shares of stock of any class, the payment of any stock
dividend or any other increase or decrease in the number of shares of stock
of any class or by reason of any dissolution, liquidation, merger or
consolidation or spin-off of assets or stock of another corporation; and
(ii) no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and
no adjustment by reason thereof shall be made with respect to, the number
of Shares or Exercise Price subject to an outstanding. Option.
<PAGE>
(b) The grant of an Option pursuant to this Article Two shall not affect
in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure, to merge or consolidate or to dissolve, liquidate, sell or transfer
all or any part of its business or assets.
4. SPECIAL POWERS.
4.1 Acceleration. The Committee granting the Option shall have complete
------------
discretion, exercisable either at the time the Option grant is made under this
Article Two or at any time while the Option remains outstanding, to provide that
the Option shall, within the limited period following the Optionee's Employment
Termination during which the Option is to remain exercisable in accordance with
the applicable provisions of Section 1.9 or 110 of this Article Two, be
exercisable not only with respect to the number of Option Shares for which it is
exercisable at the time of such Employment Termination but also with respect to
one or more subsequent installments of Option Shares for which the Option would
otherwise have become exercisable had the Optionee's Employment Termination not
occurred.
4.2 Extension of Exercise Period. The Committee granting the Option shall
----------------------------
have full power and authority to extend the period of time for which the Option
is to remain exercisable following the Optionee's Employment Termination from
the applicable period specified in Section 1.9 or 1.10 of this Article Two to
such greater period of time as the Committee shall deem appropriate; provided.
however, that in no event shall such Option be exercisable after the specified
expiration date of the option term.
ARTICLE THREE
STOCK PURCHASE PROGRAM
1. ELIGIBILITY; SALE OF STOCK.
1.1 Eligibility. The applicable Committee under Section 5.1 of Article
-----------
One shall select the Participants to receive Purchase Rights under this Article
Three from eligible Employees, non-employee Directors or individuals who may
become Employees, non-employee Directors or Consultants. Only the Primary
Committee shall have the authority to grant Purchase Rights to individuals who
are at the time either Officers or Directors, Any Purchase Rights granted to an
individual who is not an Employee, non-employee Director or Consultant at the
time of grant shall be conditioned upon such individual's becoming an Employee,
Director or Consultant, and any and all Shares purchased pursuant to such grant
shall be subject to the Company's Right of Repurchase in the event such
individual does not become such an Employee, Director or Consultant within the
time period designated for such by the Committee authorizing the grant.
Each Committee authorized pursuant to the provisions of the Plan to grant
Purchase Rights hereunder shall, within the scope of its authority, have
complete discretion (subject to the express provisions of the Plan) to select
the Participants who are to receive such grants, establish the number of Shares
purchasable by each Participant and the terms and conditions of the Purchase
Agreement applicable to such purchase (including any vesting schedule to be in
effect for the Shares) and determine all other matters relating to the Shares
issuable pursuant to the grant.
The Purchase Right, together with any other derivative security issued
under this Article Three, shall be exercisable only by the Participant to whom
issued and shall not be assignable or transferable.
1.2 Purchase Agreement. Each purchase of Shares under the Plan shall be
------------------
effected pursuant to a Purchase Agreement incorporating the terms and conditions
of this Article Three, Each Purchase Agreement shall be signed by the
Participant purchasing the Shares and by an officer of the Company (other than
the Participant) on behalf of the Company, and shall contain any provisions not
in conflict with the Plan that the Committee authorizing the grant deems
appropriate, including (without limitation) restrictions on the purchased Shares
in
<PAGE>
addition to those specified in the Plan. The Purchase Agreement must be signed
by the Participant and returned to the Company within thirty (30) days after the
Grant Date of the Purchase Right, unless the Committee effecting such grant
authorizes a longer period for the execution of the Purchase Agreement.
1.3 Purchase Price. The Purchase Price for Shares issuable under this
--------------
Article Three shall be not less than the Fair Market Value of such Shares on the
Grant Date.
2. PAYMENT FOR SHARES
2.1 Consideration. The Purchase Price for Shares issued under this
-------------
Article Three may be paid in cash, in shares of Common Stock valued at Fair
Market Value and held for the requisite period necessary to avoid a charge to
the Company's earnings for financial reporting purposes or, in the case of an
Employee, through the Participant's execution, issuance and delivery of a Note
made payable to the order of the Company. Shares may also be sold to Employees,
non-employee Directors or Consultants for cash on a partly-paid basis in
accordance with the applicable provisions of Delaware law.
2.2 Promissory Note. The interest rate and other terms and conditions of
---------------
each Note delivered in payment of the Purchase Price shall be as determined by
the Committee authorizing the grant; provided, however, that such Note shall be
a full-recourse obligation of the Participant and shall be payable in full not
later than five (5) years after the Grant Date. The Note shall bear interest at
a rate not less than the minimum rate required by the Federal tax laws in order
to avoid the imputation of interest income to the Company and compensation
income to the Participant. The Company may require that a Participant pledge
his/her Shares to the Company for the purpose of securing payment of the Note
(and may also require the Participant to execute in blank an assignment separate
from certificate with respect to the pledged Shares), and the Company (or its
designee) may retain possession of the stock certificates representing such
pledged Shares (and such assignment separate from certificate) in order to
perfect the Company's security interest
3. PURCHASE PROCEDURE
3.1 Grant and Exercise. Promptly after the Grant Date, the Company shall
------------------
notify the Participant of the Purchase Right granted to him/her. The notice
shall specify the number of Shares purchasable under such Purchase Right, the
Purchase Price payable for such Shares and the proposed terms and conditions of
the Purchase Agreement relating to such Shares (including the applicable vesting
schedule, if any). Unless within thirty (30) days after receipt of such notice
(or such additional time as the Committee authorizing the grant may determine)
the Participant shall both have accepted the terms and conditions of the
Purchase Right and have executed and returned to the Company the documentation
(including the applicable Purchase Agreement) required by the Company to effect
such purchase, the Purchase Right shall terminate and cease to be exercisable.
The Purchase Right may be exercised by the Participant to whom it was granted
only if he/she is at the time of exercise an Employee, non-employee Director or
Consultant or has at such time agreed in writing to become an Employee, non-
employee Director or Consultant.
4. RIGHT PURCHASE.
4.1 Vesting Provisions.
------------------
(a) The Shares issued to the Participant shall, at the option of the
Committee authorizing the grant, be subject to a right (but not obligation) of
repurchase by the Company (the "Right of Repurchase") exercisable for any
unvested Shares held by the Participant at the time of his/her Employment
Termination. The percentage of purchased Shares in which the Participant is
vested at the time of his/her Employment Termination shall be determined in
accordance with the following vesting schedule (or such other longer or shorter
vesting schedule as the Committee authorizing the grant may specify in the
Purchase Agreement):
<PAGE>
(i) If such Employment Termination occurs during the initial twelve-
month period following the Grant Date of the Purchase Right for such
Shares, the Participant shall not be vested in any of the Shares and the
Right of Repurchase shall apply to 100 percent of the Shares.
(ii) If such Employment Termination occurs during the second twelve-
month period following such Grant Date, the Participant shall be vested in
20 percent of the Shares and the Right of Repurchase shall apply to 80
percent of the Shares.
(iii) If such Employment Termination occurs during the third twelve-
month period following such Grant Date, the Participant shall be vested in
40 percent of the Shares and the Right of Repurchase shall apply to 60
percent of the Shares.
(iv) If such Employment Termination occurs during the fourth twelve-
month period following such Grant Date, the Participant shall be vested in
60 percent of the Shares and the Right of Repurchase shall apply to 40
percent of the Shares.
(v) If such Employment Termination occurs during the fifth twelve-
month period following such Grant. The, the Participant shall be vested in
80 percent of the Shares and the Right of Repurchase shall apply to 20
percent of the Shares,
(vi) If such Employment Termination occurs more than 60 months after
the Grant Date of the Purchase Right for the Shares, the Participant shall
be vested in all the Shares, and the Company shall have no right to
repurchase any of those Shares pursuant to this Section 4.1.
The Repurchase Price payable by the Company for any Shares so repurchased
shall be determined in accordance with the provisions of Section 4.3 of this
Article Three.
(b) The foregoing provisions of subparagraph (a) notwithstanding, if a
period of at least six (6) months shall have elapsed after the Grant Date of the
Purchase Right for the particular Shares held by the Participant, then the Right
of Repurchase shall automatically lapse with respect to, and the Participant
shall immediately vest in, those Shares upon the occurrence of any of the
following events, provided the Participant is at the time of the applicable
event an active Employee, Consultant or Director:
(i) The consummation of any transaction approved by the stockholders
of the Company in which the Company will cease to be an independent
corporation (including, without limitation, a reverse merger transaction in
which the Company becomes the subsidiary of another corporation) or the
sale or other disposition of all or substantially all of the assets of the
Company;
(ii) The first date on which there is a change in the composition of
the Board effected through one or more contested elections for Board
membership such that less than two-thirds of the individual members of the
Board (determined by rounding up to the next whole number) is comprised of
individuals who: (A) were Directors of the Company on a date three (3)
years prior to the date of such change and (B) were elected or nominated
for election as such Directors during the intervening three (3)-year period
by affirmative vote of at least a majority of those Directors described in
clause (A) above who were still in office as of the date the Board approved
such election or nomination;
(iii) The acquisition by any "persons" (as such term is used in
Sections 13(d) and 14(d) of the 1934 Act) or any related group of persons
(other than such a group that includes the Company) of beneficial ownership
of (A) 40% or more of the outstanding Common Stock pursuant to a tender or
exchange offer that the Board does not recommend the stockholders to accept
or (B) 50% or more of the outstanding Common Stock in a single transaction
or in a series of related transactions; and
<PAGE>
(iv) The effective date of any dissolution or liquidation of the
Company or any merger or consolidation in which the Company is not the
surviving corporation (except for a transaction the principal purpose of
which is to change the State of the Company's incorporation), but not
earlier than the date on which any required stockholder approval is
obtained.
(c) The Company's rights under this Section 4.1 shall be freely
assignable, in whole or in part.
4.2 Repurchase Procedure. Should the Participant's Employment Termination
--------------------
occur at a time when one or more of his/her Shares are subject to the Right of
Repurchase under Section 4.1 above, then such Participant shall immediately
endorse and deliver to the Company the stock certificates representing the
Shares subject to such right. The Company shall have a one-year period following
such Employment Termination in which to decide whether to repurchase such Shares
pursuant to the Right of Repurchase. To the extent the Company elects to
repurchase the Shares, the Company shall (within such one-year period) notify
the Participant in writing and concurrently pay to such Participant, pursuant to
the provisions of Section 4.3 below, the total Repurchase Price for the Shares
to be repurchased. If, at the time the Shares are sold to the Participant, the
Company requires the Participant to pledge the Shares and execute in blank an
assignment separate from certificate with respect thereto, then the Company may
exercise the Right of Repurchase, without any further action on the part of the
Participant, by sending written notice of the repurchase to the pledge holder
and effecting the payment of the Repurchase Price, in accordance with the
Section 4.3 procedure below, within the applicable one-year exercise period, if
the Company does not elect to repurchase the Shares, the Company shall, within
thirty (30) days after the expiration of the one-year exercise period, so advise
the Participant in writing and return the stock certificate or certificates for
the Shares to the Participant. The Company's failure to give any written notice
of its decision under this Section 4.2 within the applicable one-year exercise
period shall be deemed to be an election by the Company to exercise the Right of
Repurchase, at the end of such one-year period, with respect to all Shares
subject to such right at the time of the Participant's Employment Termination,
and payment of the Repurchase Price for such shares shall be made to the
Participant within thirty (30) days after the expiration of such one-year
period.
4.3 Repurchase Price. The Repurchase Price for any Shares purchased
----------------
pursuant to Section 4 of this Article Three shall be the lesser of A or B, where
A equals the Purchase Price paid for the Shares and B equals the greater of the
Fair Market Value of the Shares on the date of Employment Termination or their
Fair Market Value on the date the Company elects to exercise the Right of
Repurchase. If, at the time of repurchase, any Notes are outstanding which
represent any portion of the Purchase Price paid for the Shares, the Repurchase
Price shall be paid first by cancellation of any obligation for accrued but
unpaid interest under such Notes, next by cancellation of the principal balance
outstanding under such Notes, and finally by payment of cash.
4.4 Binding Effect. Except to the extent such right is to lapse in
--------------
connection with an event specified in Section 4.1(b) of this Article Three, the
Company's Right of Repurchase shall inure to the benefit of the successors and
assigns of the Company and shall be binding upon any representative, executor,
administrator, heir, legatee or other successor of the Participant
4.5 Restrictive Legend. The Company may also place legends on the stock
------------------
certificates for the Shares which evidence the Company's Right of Repurchase
contained in this Section 4 and the restrictions on the sale, transfer,
assignment or pledge of the Shares (other than a pledge of the Shares as
security for the Note) while subject to such Right of Repurchase.
<PAGE>
ARTICLE FOUR
AUTOMATIC OPTION GRANT PROGRAM
1. ELIGIBILITY
1.1 Eligible Optionees. The eligibility provisions of the Automatic
------------------
Option Grant Program have been revised, effective with the 1996 Annual
Stockholders Meeting, to allow non-employee Directors to participate, whether or
not they have previously been in Employee status. Accordingly, the individuals
eligible to receive an automatic Option grant pursuant to the revised provisions
of this Article Four shall be limited to the following:
(i) Each individual who is elected or reelected as a non-employee
Board member at any Annual Stockholders Meeting beginning with the 1996
Annual Meeting; and
(ii) Each individual who is first appointed or elected as a non-
employee Board member at any time after the 1996 Annual Meeting but other
than at an Annual Stockholders Meeting.
An individual who satisfies the criteria of clause (i) or (ii) above shall
be designated an Eligible Board Member for purposes of this Article Four.
The maximum number of Shares which any Eligible Board Member may acquire
pursuant to automatic Option grants under this Article Four shall not exceed
15,000 shares of Common Stock, subject to periodic adjustment under Section 4.4
of Article One.
1.2 Limitation. Except for the Option grants to be made pursuant to the
----------
provisions of this Automatic Option Grant Program and any other grants or
issuances otherwise permitted without loss of disinterested person status under
SEC Rule 16b-3(c)(2)(i) under the 1934 Act, non-employee Directors serving as
members of the Primary Committee shall not, during such period of service, be
---
eligible to receive any additional Option grants or Share issuances under this
Plan or any other stock plan of the Company or its Subsidiary corporations.
2. TERMS AND CONDITIONS OF AUTOMATIC OPTION GRANTS
2.1 Grant Date. On the date of each Annual Stockholders Meeting,
----------
beginning with the 1996 Annual Meeting, each individual who is at such time
elected or reelected as an Eligible Board Member shall automatically be granted,
on the date of such Annual Stockholders Meeting, a Nonstatutory Stock: Option to
purchase 5,000 shares of Common Stock upon the terms and conditions of this
Article Four. Should an individual first be appointed or elected as an Eligible
Board Member at any time after the 1996 Annual Meeting but other than at an
Annual Stockholders Meeting, then such individual shall automatically be
granted, at the time of such initial election or appointment, a Nonstatutory
Stock Option to purchase 5,000 shares of Common Stock upon the terms and
conditions of this Article Four; provided. however, that such individual shall
not be eligible to receive his or her next automatic Option grant under this
Article Four until the first Annual Stockholders Meeting which is at least six
(6) months after the date of the initial automatic Option grant made to such
individual. In no event, however, shall any Eligible Board Member be granted
Options under this Article Four which would allow such individual to purchase
more than 15,000 shares of Common Stock in the aggregate under this Automatic
Option Grant Program. Both the 5,000-share limitation per annual automatic
Option grant to each Eligible Board Member and the 15,000-share limitation upon
the number of shares of Common Stock purchasable in the aggregate per Eligible
Board Member shall be subject to periodic adjustment pursuant to the applicable
provisions of Section 4.4 of Article One.
2.2 Exercise Price. The Exercise Price per share shall be equal to one
--------------
hundred percent (100%) of the Fair Market Value per share of Common Stock on the
automatic grant date.
<PAGE>
2.3 Payment. The Exercise Price shall become immediately due upon
-------
exercise of the Option and shall be payable in one of the alternative forms
specified below:
(i) full payment in cash or check made payable to the Company's
order; or
(ii) full payment in shares of Common Stock held for the requisite
period necessary to avoid a charge to the Company's reported earnings and
valued at Fair Market Value on the Exercise Date (as such term is defined
below); or
(iii) full payment in a combination of shares of Common Stock held
for the requisite period necessary to avoid a charge to the Company's
reported earnings and valued at Fair Market Value on the Exercise Date and
cash or check payable to the Company's order; or
(iv) full payment through a broker-dealer sale and remittance
procedure pursuant to which the Optionee (I) shall provide irrevocable
written instructions to a Company-designated brokerage firm to effect the
immediate sale of the purchased Shares and to remit to the Company out of
the sale proceeds available on the settlement date, an amount equal to the
aggregate Exercise Price payable for the purchased Shares and (II) shall
provide written directives to the Company to deliver the certificates for
the purchased Shares directly to such brokerage firm in order to complete
the sale transaction.
The Exercise Date shall be the date on which written notice of the exercise
of the Option is delivered to the Company. Except to the extent the sale and
remittance procedure of clause (iv) above is utilized in connection with such
exercise of the Option, payment of the Exercise Price for the purchased Shares
must accompany the exercise notice.
2.4 Option Term. Each granted Option under this Article Four shall have a
-----------
maximum term of ten (10) years measured from the automatic grant date.
2.5 Exercisability. The Option shall become exercisable for the Option
--------------
Shares in a series of three (3) successive equal annual installments upon the
Optionee's completion of each year of Board service over the three (3)-year
measured from the automatic grant date.
2.6 Non-Tranferability. During the lifetime of the Optionee, the Option,
------------------
together with any stock appreciation rights pertaining to such Option, shall be
exercisable only by the Optionee and shall not be assignable or transferable by
the Optionee, except for a transfer of the Option by will or by the laws of
descent and distribution following the Optionee's death
2.7 Effect of Termination of Board Service.
--------------------------------------
(a) Should the Optionee cease to serve as a Board member for any reason
(other than death) while holding one or more automatic Option grants under this
Automatic Option Grant Program, then such Optionee shall have up to a six (6)
month period following the date of such cessation of Board service in which to
exercise each such Option for any or all of the shares of Common Stock for which
the Option is exercisable at the time Board service ceases.
(b) Should the Optionee die while holding one or more outstanding
automatic Option grants under this Automatic Option Grant Program, then each
such Option may subsequently be exercised, for any or all of the shares of
Common Stock for which the Option is exercisable at the time of the Optionee's
cessation of Board service, by the personal representative of the optionee's
estate or by the person or persons to whom the Option is transferred pursuant to
the optionee's will or in accordance with the laws of descent and distribution.
Any such exercise must, however, occur within twelve (12) months after the date
of the Optionee's death.
<PAGE>
(c) In no event shall any Option granted under this Automatic Option Grant
Program remain exercisable after the specified expiration date of the ten (10)-
year option term. Upon the expiration of the applicable exercise period
specified in subparagraphs (a) and (b) above or (if earlier) upon the expiration
of the ten (10) year option term, such Option shall terminate and cease to be
exercisable.
2.8 Stockholder Rights. The holder of an automatic Option grant under
------------------
this Automatic Option Grant Program shall have none of the rights of a
stockholder with respect to any Shares covered by such Option until such
individual shall have exercised the Option, paid the Exercise Price and been
issued a stock certificate for the purchased Shares. No adjustment shall be made
for dividends (ordinary or extraordinary, whether in cash, securities or other
property), distributions or other rights for which the record date is prior to
the date such stock certificate is issued, except as may otherwise be provided
in Section 4.3 of Article One.
2.9 Remaining Terms. The remaining terms and conditions of each automatic
---------------
Option grant shall be as set forth in the prototype Nonstatutory Stock Option
Agreement attached as Exhibit A to the restated Plan.
3. CHANGE IN CONTROL
3.1 Acceleration of Vesting.
-----------------------
(a) Each automatic Option grant which has been outstanding under this
Automatic Option Grant Program for a period, of at least six (6) months and
which is not otherwise at the time fully exercisable for all the Option Shares
shall automatically accelerate in full immediately prior to the specified
effective date for any Change in Control event identified below and shall
thereupon become exercisable for any or all of the Shares at the time subject to
such Option.
(b) For purposes of this Automatic Option Grant Program, a Change in
Control shall be deemed to occur upon:
(i) the consummation of any transaction approved by the stockholders
of the Company in which the Company will cease to be an independent
corporation (including, without limitation, a reverse merger transaction in
which the Company becomes the subsidiary of another corporation) or the
sale or other disposition of all or substantially all of the assets of the
Company;
(ii) the first date on which there is a change in the composition of
the Board effected through one or more contested elections for Board
membership such that less than two thirds of the individual members of the
Board (determined by rounding up to the next whole number) is comprised of
individuals who: (A) were Directors of the Company on a date three (3)
years prior to the date of such change or (B) were elected or nominated for
election as such Directors during the intervening three (3)-year period by
affirmative vote of at least a majority of those Directors described in
clause (A) above who were still in office as of the date the Board approved
such election or nomination;
(iii) the acquisition by any "person" (as such term is used in
Sections 13(d> and 14(d) of the 1934 Act) or any related group of persons
(other than such a group that includes the Company) of beneficial ownership
of (A) 40% or more of the outstanding Common Stock pursuant to a tender or
exchange offer that the Board does not recommend the stockholders to accept
or (B) 50% or more of the outstanding Common Stock ix' a single transaction
or in a series of related transactions; or
(iv) any dissolution or liquidation of the Company or any merger or
consolidation in which the Company is not the surviving corporation (except
for a transaction the principal purpose of which is to change the State of
the Company's incorporation), but not earlier than the date on which any
required stockholder approval is obtained.
<PAGE>
Each accelerated Option under this Section 3.1 shall, except to the extent
assumed by the successor entity, terminate on the effective date of the
subparagraph (i) or (iv) Change in Control event or thirty (30) days after the
occurrence of the subparagraph (i) or (iii) Change in Control event (other than
a subparagraph (iii) Change in Control triggering the immediate cancellation of
the Option under Section 3.2(a)) and shall thereupon cease to be exercisable.
Options which do not qualify for acceleration upon the occurrence of a
subparagraph (i) or (iv) Change in Control event shall be subject to adjustment
under Section 5.1 of this Article Four, to the extent they continue in effect or
are assumed in connection with that Change in Control event
(c) The automatic Option grants outstanding under this Automatic Option
Grant Program shall in no way affect the right of the Company to adjust
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve,, liquidate or sell or transfer all or any part
of its business or assets.
3.2 Stock Appreciation Right
------------------------
(a) Each Option granted under this Automatic Option Grant Program shall
include a limited stock appreciation right exercisable in accordance with the
following terms and conditions:
Pre-June 4, 1992 Grants. Upon the consummation of a Change in Control
-----------------------
event of the type specified in subparagraph (iii) of Section 3.1(a) of this
Article Four, each Eligible Board Member holding at the time one or more
automatic Options granted under this Automatic Option Grant Program prior to
June 4, 1992 shall have a thirty (30)-day period immediately following such
Change in Control event to surrender each such Option to the Company in return
for an appreciation distribution from the Company in an amount equal to the
excess of (i) the Change in Control Price of the shares of Common Stock at the
time subject to the surrendered Option over (ii) the aggregate Exercise Price
payable for such Shares. For purposes of such appreciation distribution, the
Change in Control Price per share shall be deemed to be equal to the greater of
(a) the Fair Market Value per share on the date of the Option surrender or (b)
the highest reported price per share paid in effecting such Change in Control
event.
Post-June 3, 1992 Grants. Upon the consummation of a Change in Control
------------------------
event of the type specified in clause (A) of subparagraph (iii) of Section
3.1(a) of this Article Four, each automatic Option granted under this Automatic
Option Grant Program on or after June 4, 1992 and outstanding for a period of at
least six (6) months shall, to the extent such Option is at the time held by an
Eligible Board Member, be automatically cancelled, and such Eligible Board
Member shall in return receive an appreciation distribution from the Company in
an amount equal to the excess of (1) the Change in Control Price of the shares
of Common Stock at the time subject to the cancelled Option over (ii) the
aggregate Exercise Price payable for such Shares. For purposes of such
appreciation distribution, the Change in Control Price per share shall be deemed
to be equal to the greater of (a) the Fair Market Value per share on the date of
the Option cancellation or (b) the highest reported price per share paid by the
tender offer or in effecting the hostile Change in Control. In no event,
however, shall any Option be cancelled pursuant to the foregoing provisions of
this subparagraph, unless more than fifty percent (50%) of the Common Stock
which is acquired in such hostile Change in Control is purchased from persons
other than officers or directors of the Company subject to Section 16(b) of the
1934 Act.
(b) All appreciation distributions under this Section 3.2 shall be made
entirely in cash, and neither the approval of the Primary Committee or the Board
shall be required in connection with the option surrender or option cancellation
and the resulting cash distribution. The shares of Common Stock subject to each
surrendered or cancelled Option shall not be available for subsequent issuance
---
under this Plan.
4. AMENDMENT OF THE AUTOMATIC GRANT PROVISIONS
4.1 Limited Amendments. The provisions of this Automatic Option Gram
------------------
Program, together with the outstanding option grants under such program, may not
be amended more than once every six (6) months other than to comply with
applicable Federal income tax laws and regulations.
<PAGE>
5. SPECIAL ADJUSTMENTS.
5.1 Transactions. Subject to the acceleration and termination provisions
------------
of Section 3.1(a) of this Article Four, should the Company be a party to any
merger or consolidation, each continuing or assumed Option under this Article
Four shall pertain and apply to the securities which a holder of the number of
Shares subject to the Option would have been entitled to receive in consummation
of such merger or consolidation, with such appropriate adjustment in the
Exercise Price as may be necessary to preclude the dilution or enlargement of
benefits thereunder. Appropriate adjustments shall also be made to the aggregate
number and kind of securities which may subsequently be issued pursuant to this
Article Four. Upon the dissolution or liquidation of the Company, each
outstanding Option under this Article Four shall, subject to the acceleration
provisions of Section 3.1(a) of this Article Four, terminate on the effective
date of such dissolution or liquidation.
ARTICLE FIVE
MISCELLANEOUS
1. REQUIREMENTS OF LAW.
1.1 Legality of Issuance. The Company shall not be required to grant any
--------------------
Option or Purchase Right under the Plan or to issue or sell Shares upon the
exercise of any such Option or Purchase Right and shall not have any liability
for its failure to do so if, in the opinion of the Company and the Company's
counsel, such grant, issuance or sale could reasonably constitute a violation by
the Company of any provision of law, including (without limitation) any
provision of the 1933 Act or any State securities law.
1.2 Restrictions on Transfer; Representations of Participant. Regardless
--------------------------------------------------------
of whether the grant of Options or Purchase Rights and the sale of Shares
pursuant thereto have been registered under the 1933 Act or have been registered
or qualified under the securities laws of any State, the Company may impose
restrictions upon the sale, pledge or other transfer of the granted Options or
Purchase Rights or the issued Shares (including the placement of appropriate
legends on stock certificates) if, in the judgment of the Company and the
Company's counsel, such restrictions are necessary or desirable in order to
achieve compliance with the provisions of the 1933 Act, the securities laws of
any State, or any other law. In the event that the grant of Options or Purchase
Rights or the sale of Shares is not registered under the 1933 Act, but an
exemption is available which requires an investment representation or other
representations, each Optionee and/or Participant will be required to represent
that the granted Option or Purchase Right or the Shares issued pursuant thereto
are being acquired for investment arid not with a view to the sale or
distribution thereof, and to make such other representations as are deemed
necessary or appropriate by the Company and the Company's counsel. Stock
certificates evidencing any Shares acquired pursuant to an unregistered
transaction shall, unless the Company otherwise determines, bear a restrictive
legend to the following effect and such other restrictive legends as are
required or deemed advisable under the provisions of any applicable laws:
"THE SALE OF THE SECURITIES REPRESENTED HEREBY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE `Act'). ANY TRANSFER OF SUCH
SECURITIES WILL BE INVALID UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS
IN EFFECT AS TO SUCH TRANSFER OR TN THE OPINION OF COUNSEL FOR THE COMPANY
SUCH REGISTRATION IS UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY WITH
THE ACT."
Any determination by the Company and the Company's counsel in connection
with any of the matters set forth in this Section 12 shall be final and binding
on all persons
<PAGE>
1.3 Registration or Qualification of Securities. The Company may, but
-------------------------------------------
shall not be obligated to, register, perfect an exemption for, or qualify the
grant of Options or Purchase Rights and the issuance of Shares under the 1933
Act or any other applicable law, or list the Shares on any securities exchange.
The Company shall not be obligated to take any affirmative action in order to
cause the grant of Options or Purchase Rights or the issuance and sale of Shares
pursuant thereto to comply with any securities laws.
1.4 Exchange of Certificates. If, m the opinion of the Company and the
------------------------
Company's counsel, any legend placed on a stock certificate representing Shares
is no longer required, the holder of such certificate shall be entitled to
exchange the certificate for a certificate representing the like number of
Shares lacking the legend.
2. TAX WITHHOLDING.
2.1 Withholding Requirements. The Company's obligation to deliver Shares
------------------------
upon the exercise or surrender of Options or SARs under Article Two or Article
Four or upon the sale or vesting of Shares under Article Three shall be subject
to the satisfaction of all applicable Federal, State and local income and
employment tax withholding requirements.
2.2 Withholding of Shares. The Primary Committee may, in its discretion
---------------------
and upon such terms and conditions as it may deem appropriate (including the
applicable safe-harbor provisions of SEC Rule 16b-3 or any successor rule or
regulation) provide any or all Optionees or Participants with the election to
have the Company withhold, from the Shares purchased pursuant to Articles Two
and Three of the Plan, a portion of such Shares with an aggregate Fair Market
Value equal to the designated percentage (any multiple of 5% specified by the
Optionee or Participant) of the Federal and State income and employment taxes
("Taxes") incurred in connection with the acquisition or subsequent vesting of
such Shares. In lieu of such direct withholding, one or more Optionees or
Participants may also be granted the right to deliver already outstanding shares
of Common Stock to the Company in satisfaction of such Taxes. The withheld or
delivered shares of Common Stock shall be valued at the Fair Market Value on the
applicable determination date for such Taxes.
3. AMENDMENT OR TERMINATION OF THE PLAN.
3.1 Amendment. The Board may from time to time, amend or modify the Plan;
---------
provided. however that any such amendment shall not adversely affect rights and
obligations with respect to Options, Purchase Rights or unvested Shares at the
time outstanding under the Plan and any amendment to the Automatic Option Grant
Program shall be in compliance with the limitation of Section 441 of Article
Four. In addition, no such revision or amendment shall:
(a) Increase the maximum number of Shares issuable in the aggregate under
this Plan, except for permissible adjustments under Section 4.4 of Article One,
Section 3.1 of Article Two and Section 5.1 of Article Four;
(b) Increase the maximum number of Shares for which any one person may be
granted Options, separately exercisable stock appreciation rights and Share
issuances per calendar year under this Plan, except for permissible adjustments
under Section 4.4 of Article One, Section 3.1 of Article Two and Section 5.1 of
Article Four;
(c) Decrease the authority of the Primary Committee;
(d) Materially modify the eligibility requirements for the grant of
Options or Purchase Rights under the Plan;
(e) Materially increase the benefits accruing to Optionees or Participants
under the Plan; or
<PAGE>
(f) Amend this Section 3.1 to defeat its purpose.
3.2 Termination. This Plan shall terminate on December 31, 1999 No
-----------
Options or Purchase Rights shall be granted after that date, but any Options or
Purchase Rights outstanding on that date shall not be affected by such
termination.
4. EMPLOYMENT RIGHTS.
The fact that a person is eligible for or receives an Option or Purchase
Right under Article Two or Three of the Plan shall not affect the right of the
Company or any Subsidiary (as applicable) to terminate such person's
relationship with the Company or such Subsidiary as an Employee or Consultant,
which right is hereby reserved, nor the right of the stock-holders of the
Company or any Subsidiary (as applicable) to terminate such person's
relationship to the Company or such Subsidiary as a Director.
5. APPLICATION OF RIGHTS.
Any cash proceeds received by the Company from the sale of Common Stock
under the Plan will be used for general corporate purposes.
6. EFFECTIVE DATE.
(a) This Plan was originally established on April 16, 1990 as the
successor to each of the Predecessor Plans. The provisions of the Plan in effect
on such date were, however, to apply only to Options or Purchase Rights granted
under the Plan from and after such date. Each Option or Purchase Right issued
and outstanding under any of the Predecessor Plans immediately prior to the
original April 16, 1990 effective date of this Plan are to continue to be
governed by the terms and conditions of that Predecessor Plan (and the
respective instrument evidencing each such Option or Purchase Right) as in
effect on the date such Option or Purchase Right was previously granted, and
nothing in this Plan shall be deemed to affect or otherwise modify the rights or
obligations of the holder of such Option or Purchase Right with respect to the
acquisition of Shares thereunder.
(b) The Board amended and restated the Plan effective May 1, 1991 to
include the Automatic Option Grant Program, and the stockholders approved such
restatement on June 25, 1991. The Board further amended the Plan effective June
4, 1992 to (i) maintain the Plan in compliance with the applicable requirements
of SEC Rule 16b-3, as amended May 1, 1991, under the 1934 Act and (ii) authorize
the sale and remittance procedure for the exercise of outstanding Options. Such
sale and remittance procedure shall be available for all Options granted under
the Plan from and after June 4, 1992 and for all Nonstatutory Stock Options
exercised under the Plan on or after May 1, 1991. The Primary Committee may also
allow such procedure to be utilized in connection with one or more disqualifying
dispositions of Incentive Stock Option shares effected on or after May 1, 1991,
whether or not the Option was granted on or before such dale.
(c) On July 14, 1993, the Board restated the Plan to increase the number
of shares issuable thereunder by 1,000,000 shares, and such increase was
approved by the stockholders at the 1993 Annual Meeting.
(d) On June 8, 1995, the Board amended the provisions of the Plan to
extend the eligibility provisions of the Discretionary Option Grant and Stock
Purchase Programs to permit non-employee Directors (other than those individuals
at the time serving as members of the Primary Committee) to receive Option
grants and direct Share issuances under those program. Such amendment is subject
to stockholder approval at the 1996 Annual Meeting, and any Option grants made
to non-employee Directors under the amended Discretionary Option Grant Program
shall not become exercisable in whole or In part unless such stockholder
approval is obtained. If such stockholder approval Is not obtained, then such
Option grants shall immediately terminate without ever becoming exercisable for
any of the option shares. On March 26, 1996, the Board amended and restated the
Plan in order to
<PAGE>
effect the following changes: (1) increase the number of shares issuable
thereunder by an additional 500,000 shares, (ii) limit the maximum number of
shares of Common Stock for which any one person may be granted Options,
separately exercisable stock appreciation rights and direct Share issuances per
calendar year and (iii) allow non-employee Directors to participate in the
Automatic Option Grant Program, whether or not they have previously been in
Employee status. The changes to the Plan effected by the 1996 restatement are
subject to stockholder approval at the 1996 Annual Meeting. Any Options or
Purchase Rights granted on the basis of the 500,000-share increase included
within the 1996 restatement shall not become exercisable in whole or in part
unless and until such stockholder approval is obtained. If such stockholder
approval such date. Each Option or Purchase Right issued and outstanding under
any of the Predecessor Plans immediately prior to the original April 16, 1990
effective date of this Plan are to continue to be governed by the terms and
conditions of that Predecessor Plan (and the respective instrument evidencing
each such Option or Purchase Right) as in effect on the date such Option or
Purchase Right was previously granted, and nothing in this Plan shall be deemed
to affect or otherwise modify the rights or obligations of the holder of such
Option or Purchase Right with respect to the acquisition of Shares thereunder.
(b) The Board amended and restated the Plan effective May 1, 1991 to
include the Automatic Option Grant Program, and the stockholders approved such
restatement on June 25, 1991. The Board further amended the Plan effective June
4, 1992 to (i) maintain the Plan in compliance with the applicable requirements
of SBC Rule 16b-3, as amended May 1, 1991, under the 1934 Act and (ii) authorize
the sale and remittance procedure for the exercise of outstanding Options. Such
sale and remittance procedure shall be available for all Options granted under
the Plan from and after June 4, 1992 and for all
Nonstatutory Stock Options exercised under the Plan on or after May 1,
1991. The Primary Committee may also allow such procedure to be utilized in
connection with one or more disqualifying dispositions of Incentive Stock Option
shares effected on or after May 1, 1991, whether or not the Option was granted
on or before such date.
(c) On July 14, 1993, the Board restated the Plan to increase the number
of shares issuable thereunder by 1,000,000 shares, and such increase was
approved by the stockholders at the 1993 Annual Meeting.
(d) On June 8, 1995, the Board amended the provisions of the Plan to
extend the eligibility provisions of the Discretionary Option Grant and Stock
Purchase Programs to permit non-employee Directors (other than those individuals
at the time serving as members of the Primary Committee) to receive Option
grants and direct Share issuances under those program. Such amendment is subject
to stockholder approval at the 1996 Annual Meeting, and any Option grants made
to non-employee Directors under the amended Discretionary Option Grant Program
shall not become exercisable in whole or in part unless such stockholder
approval is obtained. If such stockholder approval is not obtained, then such
Option grants shall immediately terminate without ever becoming exercisable for
any of the option shares. On March 26, 1996, the Board amended and restated the
Plan in order to effect the following changes: (i) increase the number of shares
issuable thereunder by an additional 500,000 shares, (ii) limit the maximum
number of shares of Common Stock for which any one person may be granted
Options, separately exercisable stock appreciation rights and direct Share
issuances per calendar year and (iii) allow non-employee Directors to
participate in the Automatic Option Grant Program, whether or not they have
previously been in Employee status. The changes to the Plan effected by the 1996
restatement are subject to stockholder approval at the 1996 Annual Meeting. Any
Options or Purchase Rights granted on the basis of the 500,000-share increase
included within the 1996 restatement shall not become exercisable in whole or in
part unless and until such stockholder approval Is obtained. If such stockholder
approval is not obtained, then such Options and Purchase Rights shall
immediately terminate without ever becoming exercisable for any of the Shares
subject to those Options or Purchase Rights. Those Options (together with any
SARs) and Purchase Rights granted under the restated Plan which are ~ based on
such share increase shall remain outstanding in accordance with the terms and
conditions of the respective instruments evidencing such Options and Purchase
Rights, whether or not the requisite
<PAGE>
stockholder approval is obtained. Subject to the foregoing limitations, each
Committee may grant Options and Purchase Rights under the Plan at any time
before the date fixed herein for termination of the Plan.
7. APPLICABLE LAW.
The provisions of the Plan relating to the exercise of Options and Purchase
Rights granted hereunder and any subsequent vesting of the issued Shares shall
be subject to and construed under the laws of the State of Utah without resort
to that state's conflict-of-laws rules.
<PAGE>
EXHIBIT 4.3
Amendment Number 1
OEC Medical Systems, Inc. 1990 Stock Option/Stock Purchase Plan
Amended and Restated Through March 31, 1996
The OEC Medical Systems, Inc. 1990 Stock Option/Stock Purchase Plan Amended
and Restated Through March 31, 1996, is hereby amended by adding the following
Article I, Section 7.1 thereto:
"Section 7.1 Merger with Subsidiary of General Electric Company.
--------------------------------------------------
Notwithstanding anything to the contrary contained in this Plan:
(a) At the "Effective Time" as defined in Section 1.2 of the Agreement and
Plan of Merger, dated as of August 7, 1999 (the "Merger Agreement"), among
General Electric Company ("GE"), Ruby Merger Corp. and the Company, each
Option which is outstanding immediately prior to the Effective Time shall
become and represent an Option (a "Substitute Option") to purchase the
number of shares of common stock, par value $0.16 per share, of GE ("GE
Common Stock"), decreased to the nearest whole share, determined by
multiplying the number of shares of Common Stock subject to such Option
immediately prior to the Effective Time by the Conversion Number (as
defined below), at an exercise price per share of GE Common stock,
increased to the nearest whole cent, equal to the exercise price per share
of Common Stock subject to such Option immediately prior to the Effective
Time divided by the Conversion Number. GE shall pay cash to holders of
Substitute Options in lieu of issuing fractional shares of GE Common Stock
upon the exercise thereof. The "Conversion Number" means the number of
shares of GE Common Stock into which each share of Common Stock is
converted as of the Effective Time, determined in accordance with Section
1.5(c) of the Merger Agreement. After the Effective Time, except as
otherwise expressly provided in this Section 7.1, each Substitute Option
shall be exercisable upon the same terms and conditions as were applicable
to the related Option immediately prior to the Effective Time. After
giving effect to the foregoing, no Option shall be exercisable for Common
Stock following the Effective Time.
(b) Upon the termination of employment of a holder of a Substitute Option
by the Company without "Cause" (as defined below) or due to death or
disability, each Substitute Option then held by such holder which is not
then exercisable shall, subject to the terms of this Plan and the agreement
evidencing such Substitute Option, become fully exercisable on the date of
such termination of employment. For purposes of this Section 7.1(b),
"Cause" shall mean conviction of a criminal offense, theft, fraud, breach
of trust, or refusal to perform services properly assigned following notice
and an opportunity to cure.
(c) The Committee shall have the authority to approve specific agreements
with Optionees which contain terms regarding the exercisability of Options,
including the acceleration of the exercisability of Options and terms
regarding the expiration of Options following an Optionee's Termination of
Employment and, in each such case, the terms of such specific agreements
shall govern such Options, notwithstanding anything to the contrary
contained in this plan.
In all other respects, each Substitute Option shall continue to be subject to
the terms and conditions of this Plan and the agreement evidencing such
Substitute Option."
<PAGE>
EXHIBIT 4.5
Amendment Number 1
to the OEC Medical Systems, Inc. 1998 Stock Option Plan
The OEC Medical Systems, Inc. 1990 Stock Option/Stock Purchase Plan Amended
and Restated Through March 31, 1996, is hereby amended by adding the following
Article I, Section 7.1 thereto:
"Section 7.1 Merger with Subsidiary of General Electric Company.
--------------------------------------------------
Notwithstanding anything to the contrary contained in this Plan:
(a) At the "Effective Time" as defined in Section 1.2 of the Agreement and
Plan of Merger, dated as of August 7, 1999 (the "Merger Agreement"), among
General Electric Company ("GE"), Ruby Merger Corp. and the Company, each
Option which is outstanding immediately prior to the Effective Time shall
become and represent an Option (a "Substitute Option") to purchase the
number of shares of common stock, par value $0.16 per share, of GE ("GE
Common Stock"), decreased to the nearest whole share, determined by
multiplying the number of shares of Common Stock subject to such Option
immediately prior to the Effective Time by the Conversion Number (as
defined below), at an exercise price per share of GE Common stock,
increased to the nearest whole cent, equal to the exercise price per share
of Common Stock subject to such Option immediately prior to the Effective
Time divided by the Conversion Number. GE shall pay cash to holders of
Substitute Options in lieu of issuing fractional shares of GE Common Stock
upon the exercise thereof. The "Conversion Number" means the number of
shares of GE Common Stock into which each share of Common Stock is
converted as of the Effective Time, determined in accordance with Section
1.5(c) of the Merger Agreement. After the Effective Time, except as
otherwise expressly provided in this Section 7.1, each Substitute Option
shall be exercisable upon the same terms and conditions as were applicable
to the related Option immediately prior to the Effective Time. After
giving effect to the foregoing, no Option shall be exercisable for Common
Stock following the Effective Time.
(b) Upon the termination of employment of a holder of a Substitute Option
by the Company without "Cause" (as defined below) or due to death or
disability, each Substitute Option then held by such holder which is not
then exercisable shall, subject to the terms of this Plan and the agreement
evidencing such Substitute Option, become fully exercisable on the date of
such termination of employment. For purposes of this Section 7.1(b),
"Cause" shall mean conviction of a criminal offense, theft, fraud, breach
of trust, or refusal to perform services properly assigned following notice
and an opportunity to cure.
(c) The Committee shall have the authority to approve specific agreements
with Optionees which contain terms regarding the exercisability of Options,
including the acceleration of the exercisability of Options and terms
regarding the expiration of Options following an Optionee's Termination of
Employment and, in each such case, the terms of such specific agreements
shall govern such Options, notwithstanding anything to the contrary
contained in this plan.
In all other respects, each Substitute Option shall continue to be subject to
the terms and conditions of this Plan and the agreement evidencing such
Substitute Option."
<PAGE>
Exhibit 23.1
Consent of Independent Auditors
The Board of Directors
General Electric Company:
We consent to the use of our report incorporated by reference in the Post-
Effective Amendment No. 1 on Form S-8 to the Registration Statement (No. 333-
88233) on Form S-4 of General Electric Company, which report dated February 12,
1999, relates to the statement of financial position of General Electric Company
and consolidated affiliates as of December 31, 1998 and 1997 and the related
statements of earnings, changes in share owners' equity and cash flows for each
of the years in the three-year period ended December 31, 1998 and appears in the
December 31, 1998 annual report on Form 10-K of General Electric Company.
/s/ KPMG LLP
KPMG LLP
Stamford, Connecticut
December 17, 1999
