<PAGE>
As Filed with the Securities and Exchange Commission on December 26, 1995
Registration No. ________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________________________
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
AMATI COMMUNICATIONS CORPORATION
---------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 94-1675494
----------------- ---------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
3801 ZANKER ROAD, SAN JOSE, CALIFORNIA 95150
--------------------------------------------
(Address of Principal Executive Offices)
1990 Stock Option Plan, as amended
1992 STOCK OPTION PLAN
----------------------
(Full Title of the Plan)
James E. Steenbergen
President and Chief Executive Officer
3801 Zanker Road
SAN JOSE, CALIFORNIA 95150
------------------------------
(Name and Address of Agent For Service)
(415) 433-3300
-------------------------------------------------------------
(Telephone Number, Including Area Code, of Agent For Service)
Copy to: Sarah A. O'Dowd, Esq.
Heller, Ehrman, White & McAuliffe
525 University Avenue
Palo Alto, California 94301-1908
(415) 324-7000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price per offering registration
registered registered share (1) price fee
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
par value $.20 4,184,073 $7.97 $33,347,062 $6,669
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of computing the amount of registration
fee pursuant to Rule 457(c) under the Securities Act, as amended, based on
the average of the high and low prices reported of the Registrant's Common
Stock on the Nasdaq National Market on December 21, 1995.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed or to be filed with the Commission by
the registrant are incorporated by reference in this registration statement:
(a) The registrant's latest Annual Report on Form 10-K for the fiscal
year ended July 29, 1995 filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act");
(b) The registrant's Quarterly Reports on Form 10-Q for the quarter
ended October 28, 1995;
(c) The description of the Common Stock of the registrant contained
in the registration statement filed under the Exchange Act registering such
Common Stock under Section 12 of the Exchange Act; and
(d) All documents subsequently filed by the registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities then remaining unsold.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The registrant has the power to indemnify its officers and directors
against liability for certain acts pursuant to Section 145 of the General
Corporation Law of the State of Delaware. Article IX of the registrant's
By-Laws provides:
INDEMNIFICATION OF OFFICERS,
DIRECTORS, EMPLOYEES AND AGENTS
SECTION 1. GENERAL RIGHT TO INDEMNIFICATION. Any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reasons of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall be indemnified by the corporation
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in the best interests
of the corporation, and, with respect to any criminal action or proceedings, had
no reasonable cause to believe his conduct was unlawful. The termination of any
action,
<PAGE>
suit or proceeding by judgment, order, settlement, conviction, or upon a plea of
NOLO CONTENDERE or its equivalent, shall not, of itself, create a presumption
that the person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the corporation, and
with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
SECTION 2. INDEMNIFICATION IN DERIVATIVE ACTIONS. Any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise shall be
indemnified by the corporation against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation unless and only to the extent that the Delaware Court of Chancery or
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Delaware Court of Chancery or such other
court shall deem proper.
SECTION 3. DETERMINATION OF RIGHT TO INDEMNIFICATION. Any
indemnification under Sections 1 and 2 (unless ordered by a court) shall be made
by the corporation only as authorized in the specific case upon a determination
that indemnification of the director, officer, employee or agent is proper in
the circumstances because he has met the applicable standard of conduct set
forth in Sections 1 and 2. Such determination shall be made (1) by the Board of
Directors by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (2) if such a quorum is not
obtainable, or even if obtainable a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (3) by a majority
vote of a quorum of the stockholders. Anything hereinabove set forth to the
contrary notwithstanding, to the extent that a director, officer, employee or
agent of the corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in Sections 1 and 2, or in
defense of any claim, issue or matter therein, he shall in any event be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
SECTION 4. AUTHORITY TO ADVANCE EXPENSES. Expenses incurred in
defending a civil or criminal action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding as authorized by the Board of Directors in the specific case upon
receipt of an undertaking by or on behalf of the director, officer, employee or
agent to repay such amount unless it shall ultimately be determined that he is
entitled to be indemnified by the corporation as authorized in this Article.
-3-
<PAGE>
SECTION 5. PROVISIONS NON-EXCLUSIVE. The indemnification provided
by this Article shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity whole holding such office
and shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
SECTION 6. AUTHORITY TO INSURE. The corporation is
authorized to purchase and maintain insurance on behalf of any person who is or
was a Director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a Director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any such liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability under
the provisions of this Article.
ITEM 8. EXHIBITS
5 Opinion of Heller Ehrman White & McAuliffe
23.1 Consent of Heller Ehrman White & McAuliffe
(filed as part of Exhibit 5)
23.2 Consent of Independent Public Accountants
24 Power of Attorney (see page 6)
99.1 1990 Stock Option Plan, as amended
99.2 1992 Stock Option Plan
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 prospectus required by Section 10(a)(3) of
the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
-4-
<PAGE>
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
PROVIDED, HOWEVER, that paragraphs A(1)(i) and A(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the Exchange Act that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining liability under the Securities Act, each filing of the registrant's
annual report pursuant to Section 13(a) or 15(d) of the Exchange Act that is
incorporated by reference in the registration statement shall be deemed 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 Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the 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 Act and will be governed by the final adjudication of
such issue.
-5-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 San Jose, State of California, on this 22nd day of
December, 1995.
AMATI COMMUNICATIONS CORPORATION
By: James E. Steenbergen
-----------------------------------------------
James E. Steenbergen
President, Chief Executive Officer and Director
POWER OF ATTORNEY TO SIGN AMENDMENTS
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below does hereby constitute and appoint James E. Steenbergen or Terry
O. Medel, or either of them, with full power of substitution, such person's true
and lawful attorneys-in-fact and agents for such person in such person's name,
place and stead, in any and all capacities, to sign any or all amendments
(including post-effective amendments) to this Registration Statement on Form S-8
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully, to all intents and purposes,
as he or such person might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement on Form S-8 has been signed by the following persons in the capacities
and on the dates indicated.
James E. Steenbergen President, Chief December 22, 1995
- -------------------- Executive Officer, Chief
James E. Steenbergen Financial Office and
Director (Principal
Executive Officer)
(Principal Financial
Officer)
-6-
<PAGE>
Terry O.Medel Treasurer, Secretary and December 22, l995
- -------------------- Corporate Controller
Terry O.Medel (Principal Accounting
Officer)
Chairman of the Board
- --------------------
James F. Gibbons
John M. Cioffi Director December 22, 1995
- --------------------
John M. Cioffi
Director
- --------------------
Aamer Latif
Donald L. Lucas Director December 22, 1995
- --------------------
Donald L. Lucas
-7-
<PAGE>
INDEX TO EXHIBITS
Sequentially
Item No. Description of Item Numbered Page
- -------- ------------------- -------------
5 Opinion of Heller Ehrman White & McAuliffe . . . . . . . . . . .
23.1 Consent of Heller Ehrman White & McAuliffe
(filed as part of Exhibit 5) . . . . . . . . . . . . . . . . . .
23.2 Consent of Independent Public Accountants . . . . . . . . . . .
99.1 1990 Stock Option Plan, as amended . . . . . . . . . . . . . . .
99.2 1992 Stock Option Plan . . . . . . . . . . . . . . . . . . . . .
-8-
<PAGE>
EXHIBIT 5
[HELLER ERHMAN WHITE & McAULIFFE LETTERHEAD]
December 22, 1995
16199-0001
Amati Communications Corporation
3801 Zanker Road
San Jose, California 95150
REGISTRATION STATEMENT ON FORM S-8:
1990 STOCK OPTION PLAN, AS AMENDED AND 1992 STOCK OPTION PLAN
Ladies and Gentlemen:
We have acted as counsel to Amati Communications Corporation (formerly
ICOT Corporation), a Delaware corporation (the "Company"), in connection with
the Registration Statement on Form S-8 (the "Registration Statement") which the
Company proposes to file with the Securities and Exchange Commission on
December 26, 1995 for the purpose of registering under the Securities Act of
1933, as amended, 4,184,073 shares (the "Shares") of its $.20 par value Common
Stock to be issued to employees, directors and consultants who purchase stock
under the Company's 1990 Stock Option Plan, as amended, and under the 1992 Stock
Option Plan of the former Amati Communications Corporation, a California
corporation (the "Plans").
In connection with this opinion, we have assumed the authenticity of
all records, documents and instruments submitted to us as originals, the
genuineness of all signatures, the legal capacity of natural persons and the
conformity to the originals of all records, documents and instruments submitted
to us as copies. We have based our opinion upon our review of the following
records, documents and instruments:
(a) The Restated Certificate of Incorporation of the Company, as
amended, certified by the Secretary of State of the State of
Delaware as of December 22, 1995 and certified to us by an
officer of the
<PAGE>
Company as being complete and in full force and effect as of the
date of this opinion;
(b) The By-Laws of the Company, certified to us by an officer of the
Company as being complete and in full force and effect as of the
date of this opinion;
(c) A Certificate of the President and Chief Executive Officer of the
Company (i) attaching records certified to us as constituting all
records of proceedings and actions of the Board of Directors and
stockholders of the Company relating to the Plans and the
Registration Statement, and (ii) certifying as to certain factual
matters;
(d) The Registration Statement;
(e) The Plans; and
(f) A letter from Chemical Mellon Shareholders Services, the
Company's transfer agent, dated December 22, 1995, as to the
number of shares of the Company's Common Stock that were
outstanding on December 22 1995.
This opinion is limited to the Delaware General Corporation Law. We
disclaim any opinion as to any statute, rule, regulation, ordinance, order or
other promulgation of any other jurisdiction or any regional or local
governmental body.
Based upon the foregoing and our examination of such questions of law
as we have deemed necessary or appropriate for the purpose of this opinion, and
assuming that (i) the Registration Statement becomes and remains effective
during the period when the Shares are offered and issued, (ii) the full
consideration stated in the Plans is paid for each Share and that such
consideration in respect of each Share includes a cash payment at least equal to
the par value thereof, and (iii) all applicable securities laws are complied
with, it is our opinion that when issued and sold by the Company, after payment
therefor in the manner provided in the Plans, the Shares will be legally issued,
fully paid and nonassessable.
This opinion is rendered to you in connection with the Registration
Statement and is solely for your benefit. This opinion may not be relied upon
by you for any other purpose, or relied upon by any other person, firm,
corporation or other entity for any purpose, without our prior written consent.
We disclaim any obligation to advise you of any change of law that occurs, or
any facts of which we become aware, after the date of this opinion.
<PAGE>
Page 3
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
Heller Ehrman White & McAuliffe
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated August 24, 1995
included in Amati Communications Corporation's (formerly ICOT Corporation) Form
10-K for the year ended July 29, 1995.
ARTHUR ANDERSEN LLP
San Jose, California
December 22, 1995
<PAGE>
EXHIBIT 99.1
AMATI COMMUNICATIONS CORPORATION
1990 STOCK OPTION PLAN
ADOPTED SEPTEMBER 14, 1990; AS AMENDED THROUGH JUNE 8, 1995
1. PURPOSE.
(a) The purpose of the Plan is to provide a means by which selected
employees and directors (if declared eligible under paragraph 4) of and
consultants to AMATI COMMUNICATIONS CORPORATION (formerly ICOT Corporation), a
Delaware corporation (the "Company"), and its Affiliates, as defined in
subparagraph 1(b), may be given an opportunity to purchase stock of the Company.
(b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company, as those terms are defined
in Sections 425(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended from time to time (the "Code").
(c) The Company, by means of the Plan, seeks to retain the services
of persons now employed by or serving as consultants or directors to the
Company, to secure and retain the services of new employees, and to provide
incentives for such persons to exert maximum efforts for the success of the
Company.
(d) The Company intends that the options issued under the Plan shall,
in the discretion of the Board of Directors of the Company (the "Board") or any
committee to which responsibility for administration of the Plan has been
delegated
-1-
<PAGE>
pursuant to subparagraph 2(c), be either incentive stock options as that term is
used in Section 422A of the Code ("Incentive Stock Options"), or options which
do not qualify as incentive stock options ("Supplemental Stock Options"). All
options shall be separately designated Incentive Stock Options or Supplemental
Stock Options at the time of grant, and in such form as issued pursuant to
paragraph 5, and a separate certificate or certificates shall be issued for
shares purchased on exercise of each type of option. An option designated as a
Supplemental Stock Option shall not be treated as an incentive stock option.
2. ADMINISTRATION.
(a) The Plan shall be administered by the Board unless and until the
Board delegates administration to a committee, as provided in subparagraph 2(c).
Whether or not the Board has delegated administration, the Board shall have the
final power to determine all questions of policy and expediency that may arise
in the administration of the Plan.
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the persons eligible
under the Plan shall be granted options; when and how the option shall be
granted; whether the option will be an Incentive Stock Option or a Supplemental
Stock Option; the provisions of each option granted (which need not be
identical), including the time or times during the term of each option within
which all or portions of such option may be exercised; and the number of shares
for which an option shall be granted to each such person.
-2-
<PAGE>
(2) To construe and interpret the Plan and options granted under
it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any option agreement, in a
manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.
(3) To amend the Plan as provided in paragraph 10.
(4) Generally, to exercise such powers and to perform such acts
as the Board deems necessary or expedient to promote the best interests of the
Company.
(c) The Board may delegate administration of the Plan to a committee
(the "Committee") composed of not fewer than the minimum number of members which
may be required to comply with the requirements of Rule 16b-3 promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All of
the members of the Committee shall be disinterested persons, if required and as
defined by the provisions of subparagraph 2(d). If administration is delegated
to a Committee, the Committee shall have, in connection with the administration
of the Plan, the powers theretofore possessed by the Board, subject, however, to
such resolutions, not inconsistent with the provisions of the Plan, as may be
adopted from time to time by the Board. The Board may abolish the Committee at
any time and revest in the Board the administration of the Plan. Additionally,
and notwithstanding anything to the contrary contained herein, the Board may
expressly determine that the requirement in this
-3-
<PAGE>
paragraph regarding the minimum number of members of the Committee be waived and
may delegate administration of the Plan to any person or persons and the term
"Committee" shall apply to any person or persons to whom such authority has been
delegated.
(d) The term "disinterested person," as used in this
Plan, shall mean an administrator of the Plan, whether a member of the Board or
of any Committee to which responsibility for administration of the Plan has been
delegated pursuant to subparagraph 2(c): (i) who is not at the time he or she
exercises discretion in administering the Plan eligible and has not at any time
within one year prior thereto been eligible for selection as a person to whom
stock may be allocated or to whom stock options or stock appreciation rights may
be granted pursuant to the Plan or any other plan of the Company or any of its
affiliates entitling the participants therein to acquire stock, stock options or
stock appreciation rights of the Company or any of its affiliates; or (ii) who
is otherwise considered to be a "disinterested person" in accordance with the
rules, regulations or interpretations of the Securities and Exchange Commission.
Any such person shall otherwise comply with the requirements of Rule 16b-3
promulgated under the Exchange Act.
(e) Any requirement that an administrator of the Plan be a
"disinterested person" shall not apply if the Board or the Committee expressly
declares that such requirement shall not apply.
3. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of paragraph 9 relating to adjustments
upon changes in stock, the stock that may be sold
-4-
<PAGE>
pursuant to options granted under the Plan shall not exceed in the aggregate
three million five hundred thousand (3,500,000) shares of the Company's common
stock. If any option granted under the Plan shall for any reason expire or
otherwise terminate without having been exercised in full, the stock not
purchased under such option shall again become available for the Plan.
(b) The stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.
(c) An Incentive Stock Option may be granted to an eligible person
under the Plan only if the aggregate fair market value (determined at the time
the option is granted) of the stock with respect to which incentive stock
options (as defined in the Code) granted after 1986 are exercisable for the
first time by such optionee during any calendar year under all incentive stock
option plans of the Company and its Affiliates does not exceed one hundred
thousand dollars ($100,000). Should it be determined that an option granted
under the Plan exceeds such maximum for any reason other than the failure of a
good faith attempt to value the stock subject to the option, such option shall
be considered a Supplemental Stock Option to the extent, but only to the extent,
of such excess; provided, however, that should it be determined that an entire
option or any portion thereof does not qualify for treatment as an incentive
stock option by reason of exceeding such maximum, such option or the applicable
portion shall be considered a Supplemental Stock Option.
(d) The Company may not issue options covering in the aggregate more
than 1,000,000 shares of the Company's common stock to any one participant in
any one-year period.
-5-
<PAGE>
4. ELIGIBILITY.
(a) Incentive Stock Options may be granted only to employees
(including officers) of the Company or its Affiliates. A director of the
Company shall not be eligible to receive Incentive Stock Options unless such
director is also an employee (including an officer) of the Company or any
Affiliate. Supplemental Stock Options may be granted only to employees
(including officers) of, directors of or consultants to the Company or its
Affiliates. A director of the Company shall not be eligible for a Supplemental
Stock Option unless such director is also an employee (including an officer) of
the Company or any Affiliate.
(b) A director shall in no event be eligible for the benefits of the
Plan unless and until such director is expressly declared eligible to
participate in the Plan by action of the Board or the Committee, and if, in
order to comply with Rule 16b-3 under the Exchange Act, at any time discretion
is exercised by the Board in the selection of a director as a person to whom
options may be granted, or in the determination of the number of shares which
may be covered by options granted to a director: (i) a majority of the Board
and a majority of the directors acting in such matter are disinterested persons,
as defined in subparagraph 2(d); (ii) the Committee consists solely of
"disinterested persons" as defined in subparagraph 2(d); or (iii) the Plan
otherwise complies with the requirements of Rule 16b-3 promulgated under the
Exchange Act, as from time to time in effect. The Board shall otherwise comply
with the requirements of Rule 16b-3 promulgated under the Exchange Act, as from
time to
-6-
<PAGE>
time in effect.
(c) No person shall be eligible for the grant of an incentive stock
option under the Plan if, at the time of grant, such person owns (or is deemed
to own pursuant to Section 425(d) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or of any of its Affiliates unless the exercise price of such option is
at least one hundred ten percent (110%) of the fair market value of such stock
at the date of grant and the term of the incentive stock option does not exceed
five (5) years from the date of grant.
5. OPTION PROVISIONS.
Each option shall be in such form and shall contain such terms and
conditions as the Board or the Committee shall deem appropriate. The provisions
of separate options need not be identical, but each option shall include
(through incorporation of provisions hereof by reference in the option or
otherwise) the substance of each of the following provisions:
(a) The term of any option shall not be greater than ten (10) years
from the date it was granted.
(b) The exercise price of each option shall be not less than one
hundred percent (100%) of the fair market value of the stock subject to the
option on the date the option is granted.
(c) The purchase price of stock acquired pursuant to an option shall
be paid, to the extent permitted by applicable statutes and regulations, either
(i) in cash at the time the option is exercised, or (ii) at the discretion of
the Board or
-7-
<PAGE>
the Committee, either at the time of the grant or exercise of the option, (A) by
delivery to the Company of other common stock of the Company, (B) according to a
deferred payment or other arrangement (which may include, without limiting the
generality of the foregoing, the use of other common stock of the Company) with
the person to whom the option is granted or to whom the option is transferred
pursuant to subparagraph 5(d), or (C) in any other form of legal consideration
that may be acceptable to the Board or the Committee.
(d) An option shall not be transferable except by will or by the laws
of descent and distribution, and shall be exercisable during the lifetime of the
person to whom the option is granted only by such person.
(e) The total number of shares of stock subject to an option may, but
need not, be allotted in periodic installments (which may, but need not, be
equal). From time to time during each of such installment periods, the option
may become exercisable ("vest") with respect to some or all of the shares
allotted to that period, and may be exercised with respect to some or all of the
shares allotted to such period and/or any prior period as to which the option
was not fully exercised. During the remainder of the term of the option (if its
term extends beyond the end of the installment periods), the option may be
exercised from time to time with respect to any shares then remaining subject to
the option. The provisions of this subparagraph 5(e) are subject to any option
provisions governing the minimum number of shares as to which an option may be
exercised.
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(f) The Company may require any optionee, or any person to whom an
option is transferred under subparagraph 5(d), as a condition of exercising any
such option, (1) to give written assurances satisfactory to the Company as to
the optionee's knowledge and experience in financial and business matters and/or
to employ a purchaser representative reasonably satisfactory to the Company who
is knowledgeable and experienced in financial and business matters, and that he
or she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the option; and (2) to give
written assurances satisfactory to the Company stating that such person is
acquiring the stock subject to the option for such person's own account and not
with any present intention of selling or otherwise distributing the stock.
These requirements, and any assurances given pursuant to such requirements,
shall be inoperative if (i) the issuance of the shares upon the exercise of the
option has been registered under a then currently effective registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
or (ii) as to any particular requirement, a determination is made by counsel for
the Company that such requirement need not be met in the circumstances under the
then applicable securities laws.
(g) An option shall terminate three (3) months after termination of
the optionee's employment or relationship as a consultant or director with the
Company or an Affiliate, unless (i) such termination is due to such person's
permanent and total disability, within the meaning of Section 422A(c)(7) of the
Code, in which case the option may, but need not, provide that it may
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be exercised at any time within one (1) year following such termination of
employment or relationship as a consultant or director; or (ii) the optionee
dies while in the employ of or while serving as a consultant or director to the
Company or an Affiliate, or within not more than three (3) months after
termination of such relationship, in which case the option may, but need not,
provide that it may be exercised at any time within eighteen (18) months
following the death of the optionee by the person or persons to whom the
optionee's rights under such option pass by will or by the laws of descent and
distribution; or (iii) the option by its terms specifies either (a) that it
shall terminate sooner than three (3) months after termination of the optionee's
employment or relationship as a consultant or director, or (b) that it may be
exercised more than three (3) months after termination of such relationship with
the Company or an Affiliate. This subparagraph 5(g) shall not be construed to
extend the term of any option or to permit anyone to exercise the option after
expiration of its term, nor shall it be construed to increase the number of
shares as to which any option is exercisable from the amount exercisable on the
date of termination of the optionee's employment or relationship as a consultant
or director.
(h) The option may, but need not, include a provision whereby the
optionee may elect at any time during the term of his or her employment or
relationship as a consultant or director with the Company or any Affiliate to
exercise the option as to any part or all of the shares subject to the option
prior to the stated vesting date of the option or of any installment or
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installments specified in the option. Any shares so purchased from any unvested
installment or option may be subject to a repurchase right in favor of the
Company or to any other restriction the Board or the Committee determines to be
appropriate.
(i) To the extent provided by the terms of an option, the optionee
may satisfy any federal, state or local tax withholding obligation relating to
the exercise of such option by any of the following means or by a combination of
such means: (1)tendering a cash payment; (2) authorizing the Company to withhold
from the shares of the common stock otherwise issuable to the participant as a
result of the exercise of the stock option a number of shares having a fair
market value less than or equal to the amount of the withholding tax obligation;
or (3) delivering to the Company owned and unencumbered shares of the common
stock having a fair market value less than or equal to the amount of the
withholding tax obligation.
6. COVENANTS OF THE COMPANY.
(a) During the terms of the options granted under the Plan, the
Company shall keep available at all times the number of shares of stock required
to satisfy such options.
(b) The Company shall seek to obtain from each regulatory commission
or agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the options granted under the
Plan; provided, however, that this undertaking shall not require the Company to
register under the Securities Act either the Plan, any option granted under the
Plan or any stock issued or issuable
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pursuant to any such option. If, after reasonable efforts, the Company is
unable to obtain from any such regulatory commission or agency the authority
which counsel for the Company deems necessary for the lawful issuance and sale
of stock under the Plan, the Company shall be relieved from any liability for
failure to issue and sell stock upon exercise of such options unless and until
such authority is obtained.
7. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to options
granted under the Plan shall constitute general funds of the Company.
8. MISCELLANEOUS.
(a) The Board or the Committee shall have the power to accelerate the
time at which an option may first be exercised or the time during which an
option or any part thereof will vest pursuant to subparagraph 5(e),
notwithstanding the provisions in the option stating the time at which it may
first be exercised or the time during which it will vest.
(b) Neither an optionee nor any person to whom an option is
transferred under subparagraph 5(d) shall be deemed to be the holder of, or to
have any of the rights of a holder with respect to, any shares subject to such
option unless and until such person has satisfied all requirements for exercise
of the option pursuant to its terms.
(c) Throughout the term of any option granted pursuant to the Plan,
the Company shall make available to the holder of such option, not later than
one hundred twenty (120) days after the close of each of the Company's fiscal
years during the option
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term, upon request, such financial and other information regarding the Company
as comprises the annual report to the stockholders of the Company provided for
in the bylaws of the Company.
(d) Nothing in the Plan or any instrument executed or option granted
pursuant thereto shall confer upon any eligible employee or optionee any right
to continue in the employ of the Company or any Affiliate (or to continue acting
as a consultant or director) or shall affect the right of the Company or any
Affiliate to terminate the employment or consulting relationship or directorship
of any eligible employee or optionee with or without cause. In the event that
an optionee is permitted or otherwise entitled to take a leave of absence, the
Company shall have the unilateral right to (i) determine whether such leave of
absence will be treated as a termination of employment for purposes of paragraph
5(g) hereof and corresponding provisions of any outstanding options, and (ii)
suspend or otherwise delay the time or times at which the shares subject to the
option would otherwise vest.
9. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or
subject to any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or otherwise), the Plan and outstanding
options will be appropriately adjusted in the class(es) and maximum number of
shares subject to the Plan, the
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<PAGE>
class(es) and maximum number of shares with respect to which option grants may
be made to any participant in any one-year period, and the class(es) and number
of shares and price per share of stock subject to outstanding options.
(b) In the event of (1) a dissolution or liquidation of the Company;
(2) a merger or consolidation in which the Company is not the surviving
corporation; (3) a reverse merger in which the Company is the surviving
corporation but the shares of the Company's common stock outstanding immediately
preceding the merger are converted by virtue of the merger into other property,
whether in the form of securities, cash or otherwise; or (4) any other capital
reorganization in which more than fifty percent (50%) of the shares of the
Company entitled to vote are exchanged, then, at the sole discretion of the
Board, exercised with respect to each individual option, and to the extent
permitted by applicable law, either (i) any outstanding options under the Plan
shall terminate, in which event the Board may, but shall not be required to,
accelerate vesting with respect to options held by persons then performing
services as employees or as consultants or directors for the Company, as the
case may be, (ii) any surviving corporation may assume such options or
substitute similar options for those outstanding under the Plan, or (iii) such
options may continue in full force and effect.
10. AMENDMENT OF THE PLAN.
(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in paragraph 9 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the stockholders of
the Company
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within twelve (12) months before or after the adoption of the amendment, where
the amendment will:
(i) Increase the number of shares reserved for options under the
Plan;
(ii) Modify the requirements as to eligibility for participation
in the Plan (to the extent such modification requires stockholder approval in
order for the Plan to satisfy the requirements of Section 422A(b) of the Code);
or
(iii) Modify the Plan in any other way if such modification
requires stockholder approval in order for the Plan to satisfy the requirements
of Section 422A(b) of the Code or to comply with the requirements of Rule 16b-3
promulgated under the Exchange Act.
(b) It is expressly contemplated that the Board may amend the Plan in
any respect the Board deems necessary or advisable to provide optionees with the
maximum benefits provided or to be provided under the provisions of the Code and
the regulations promulgated thereunder relating to employee incentive stock
options and/or to bring the Plan and/or incentive stock options granted under it
into compliance therewith.
(c) Rights and obligations under any option granted before amendment
of the Plan shall not be altered or impaired by any amendment of the Plan unless
(i) the Company requests the consent of the person to whom the option was
granted and (ii) such person consents in writing.
11. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate ten
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(10) years from the date the Plan is adopted by the Board or approved by the
stockholders of the Company, whichever is earlier. No options may be granted
under the Plan while the Plan is suspended or after it is terminated.
(b) Rights and obligations under any option granted while the Plan is
in effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom the option was granted.
12. EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the Board, but no
options granted under the Plan shall be exercised unless and until the Plan has
been approved by the stockholders of the Company, and, if required, an
appropriate permit has been issued by the Commissioner of Corporations of the
State of California.
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EXHIBIT 99.2
AMATI COMMUNICATIONS CORPORATION
1992 STOCK OPTION PLAN
1. PURPOSE. The Amati Communications Corporation 1992 Stock Option Plan
(the "Plan") is established to create additional incentive for key employees,
directors and consultants or advisors of Amati Communications Corporation and
any successor corporation thereto (collectively referred to as the "Company"),
and any present or future parent and/or subsidiary corporations of such
corporation (all of whom along with the Company being individually referred to
as a "Participating Company" and collectively referred to as the "Participating
Company Group"), to promote the financial success and progress of the
Participating Company Group. For purposes of the Plan, a parent corporation and
a subsidiary corporation shall be as defined in sections 424(e) and 424(f) of
the Internal Revenue Code of 1986, as amended (the "Code").
2. ADMINISTRATION. The Plan shall be administered by the Board of
Directors of the Company (the "Board") and/or by a duly appointed committee of
the Board having such powers as shall be specified by the Board. Any subsequent
references herein to the Board shall also mean the committee if such committee
has been appointed and, unless the powers of the committee have been
specifically limited, the committee shall have all of the powers of the Board
granted herein, including, without limitation, the power to terminate or amend
the Plan at any time, subject to the terms of the Plan and any applicable
limitations imposed by law. All questions of interpretation of the Plan or of
any options granted under the Plan (an "Option") shall be determined by the
Board, and such determinations shall be final and binding upon all persons
having an interest in the Plan and/or any Option. Options may be either
incentive stock options as defined in section 422 of the Code ("Incentive Stock
Options") or nonqualified stock options. Any officer of a Participating Company
shall have the authority to act on behalf of the Company with respect to any
matter, right, obligation, or election which is the responsibility of or which
is allocated to the Company herein, provided the officer has apparent authority
with respect to such matter, right, obligation, or election.
3. ELIGIBILITY. The Options may be granted only to employees (including
officers) and directors of the Participating Company Group or to individuals who
are rendering services as consultants, advisors, or other independent
contractors to the Participating Company Group. The Board shall, in the Board's
sole discretion, determine which persons shall be granted Options (an
"Optionee"). A director of the Company shall be eligible to be granted only a
nonqualified stock option unless the director is also an employee of the
Company. An individual who is rendering services as a consultant, advisor, or
other independent contractor shall be eligible to be granted only a nonqualified
<PAGE>
stock option. An Optionee may, if otherwise eligible, be granted additional
Options.
4. SHARES SUBJECT TO OPTION. Options shall be options for the purchase
of the authorized but unissued common stock of the Company (the "Stock"),
subject to adjustment as provided in paragraph 9 below. The maximum number of
shares of Stock which may be issued under the Plan shall be five hundred eighty
thousand (580,000) shares.1/ In the event that any outstanding Option for any
reason expires or is terminated or canceled and/or shares of Stock subject to
repurchase are repurchased by the Company, the shares allocable to the
unexercised portion of such Option, or such repurchased shares, may again be
subjected to an Option.
5. TIME FOR GRANTING OPTION. All Options shall be granted, if at all,
within ten (10) years from the earlier of the date the Plan is adopted by the
Board or the date the Plan is duly approved by the shareholders of the Company.
6. TERMS, CONDITIONS AND FORM OF OPTIONS. Subject to the provisions of
the Plan, the Board shall determine for each Option (which need not be
identical) the number of shares of Stock for which the Option shall be granted,
the option price of the Option, the exercisability of the Option, whether the
Option is to be treated as an Incentive Stock Option or as a Nonqualified Stock
Option and all other terms and conditions of the Option not inconsistent with
the Plan. Options granted pursuant to the Plan shall be evidenced by written
agreements specifying the number of shares of Stock covered thereby, in such
form as the Board shall from time to time establish, and shall comply with and
be subject to the following terms and conditions:
(a) OPTION PRICE. The option price for each Option shall be
established in the sole discretion of the Board; provided, however, that (i) the
option price per share for an Incentive Stock Option shall be not less than the
fair market value, as determined by the Board, of a share of Stock on the date
of the granting of the Option, (ii) the option price per share for a
nonqualified stock option shall not be less than eighty-five percent (85%) of
the fair market value, as determined by the Board, of a share of Stock on the
date of the granting of the Option and (iii) no Option granted to an Optionee
who at the time the Option is granted owns stock possessing more than ten
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1/ 580,000 shares of common stock of the former Amati Communications
Corporation, a California corporation ("Old Amati"), are the equivalent of
2,711,268 shares of the common stock of Amati Communications Corporation
(formerly ICOT Corporation), a Delaware corporation ("New Amati") pursuant
to the terms of the Agreement of Merger made as of November 28, 1995 by and
among Old Amati, New Amati and IA Acquisition Corporation, a wholly owned
subsidiary of New Amati.
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<PAGE>
percent (10%) of the total combined voting power of all classes of stock of a
Participating Company within the meaning of section 422(b)(6) of the Code and/or
ten percent (10%) of the total combined value of all classes of stock of a
Participating Company (a "Ten Percent Owner Optionee") shall have an option
price per share less than one hundred ten percent (110%) of the fair market
value of a share of Stock on the date the Option is granted. Notwithstanding
the foregoing, an Option (whether an Incentive Stock Option or a nonqualified
stock option) may be granted with an option price lower than the minimum
exercise price set forth above if such Option is granted pursuant to an
assumption or substitution for another option in a manner qualifying with the
provisions of section 424(a) of the Code.
(b) EXERCISE PERIOD OF OPTIONS. The Board shall have the power to
set the time or times within which each Option shall be exercisable or the event
or events upon the occurrence of which all or a portion of each Option shall be
exercisable and the term of each Option; provided, however, that (i) no Option
shall be exercisable after the expiration of ten (10) years after the date such
Option is granted and (ii) no Option granted to a Ten Percent Owner Optionee
shall be exercisable after the expiration of five (5) years after the date such
Option is granted.
(c) PAYMENTS OF OPTIONS PRICE. Payment of the option price for the
number of shares of Stock being purchased pursuant to any Option shall be made
(i) in cash, by check, or cash equivalent, (ii) by tender to the Company of
shares of the Company's stock owned by the Optionee having a value, as
determined by the Board (but without regard to any restrictions on
transferability applicable to such stock by reason of federal or state
securities laws or agreements with an underwriter for the Company), not less
than the option price, (iii) by the optionee's recourse promissory note in the
form specified by the Company with terms in accordance with the provisions of
the Plan, (iv) by the assignment of the proceeds of a sale of some or all of the
shares being acquired upon the exercise of an Option (including, without
limitation, through an exercise complying with the provisions of Regulation T as
promulgated from time to time by the Board of Governors of the Federal Reserve
System), or (v) by any combination thereof. The Board may at any time or from
time to time, by adoption of or by amendment to the form of Standard Option
Agreement described in paragraph 7 below, or by other means, grant Options which
do not permit all of the foregoing forms of consideration to be used in payment
of the option price and/or which otherwise restrict one (1) or more forms of
consideration. Notwithstanding the foregoing, an Option may not be exercised by
tender to the Company of shares of the Company's stock to the extent such tender
of stock would constitute a violation of the provisions of any law, regulation
and/or agreement restricting the redemption of the Company's stock.
Furthermore, no promissory note shall be permitted if an exercise using a
promissory note would be a violation of any law. Any permitted promissory note
shall be due and payable not more
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than five (5) years after the Option is granted, and interest shall be payable
at least annually and be at least equal to the minimum interest rate necessary
to avoid imputed interest pursuant to all applicable sections of the Code. The
Board shall have the authority to permit or require the Optionee to secure any
promissory note used to exercise an Option with the shares of Stock acquired on
exercise of the Option and/or with other collateral acceptable to the Company.
The Company reserves, at any and all times, the right, in the Company's sole and
absolute discretion, to establish, decline to approve and/or terminate any
program and/or procedures for the exercise of Options by means of an assignment
of the proceeds of a sale of some or all of the shares of Stock to be acquired
upon such exercise.
7. STANDARD FORM OF STOCK OPTION AGREEMENT. Unless otherwise provided
for by the Board at the time an Option is granted or as otherwise provided for
by this paragraph 7, all Options shall comply with and be subject to the terms
and conditions set forth in the stock option agreement attached hereto as
Exhibit A and incorporated herein by reference (the "Standard Option
Agreement").
(a) MODIFICATIONS FOR NONQUALIFIED STOCK OPTION. In the event the
Option is designated as a nonqualified stock option, the Standard Option
Agreement for such Option shall be the Standard Option Agreement as modified as
set forth below unless otherwise specified by the Board:
(i) The title and paragraph 2 of the Standard Option Agreement
shall reflect the Option's status as a nonqualified stock option.
(ii) Paragraph 4(a) of the Standard Option Agreement shall be
modified to delete therefrom the second and third sentences referring to the
"$100,000 Exercise Limitation" applicable to Incentive Stock Options.
(iii) A new paragraph 7(f) shall be added to the Standard Option
Agreement providing that, in the event an Optionee is a director or consultant
or advisor but not an employee of a Participating Company at the time the Option
is granted, termination of the Optionee's status as a director or consultant or
advisor of the Participating Company shall be deemed to be termination of the
Optionee's employment for purposes of the Standard Option Agreement.
(iv) Paragraph 15 of the Standard Option Agreement providing,
among other things, that the Optionee give the Company notice of sales upon
disqualifying dispositions of Incentive Stock Options shall be deleted and shall
not apply to the Option.
(v) Paragraph 16 of the Standard Option Agreement regarding the
"$100,000 Exercise Limitations applicable to Incentive Stock Options shall be
deleted and shall not apply to the Option.
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<PAGE>
(vi) Paragraph 17(d) of the Standard Option Agreement regarding
the stock certificate legend applicable to Incentive Stock Options shall be
deleted and shall not apply to the Option.
(vii) Paragraph 21 of the Standard Option Agreement shall be
modified to delete the provision that amendments to the Standard Option
Agreement may be made without the Optionee's consent if such amendments are
required to enable an Option designated as an Incentive Stock Option to qualify
as an Incentive Stock Option.
(viii) The remaining paragraphs of such modified Standard Option
Agreement for nonqualified stock options shall be renumbered accordingly.
(b) STANDARD TERM FOR OPTIONS. Unless otherwise provided for by the
Board in the grant of an Option, any Option granted hereunder shall be
exercisable for a term of ten (10) years.
8. AUTHORITY TO VARY TERMS. The Board shall have the authority from time
to time to vary the terms of the Standard Option Agreement described in
paragraph 7 above either in connection with the grant of an individual Option or
in connection with the authorization of a new standard form or forms; provided,
however, that the terms and conditions of such revised or amended standard form
or forms of stock option agreement shall be in accordance with the terms of the
Plan. Such authority shall include, but not by way of limitation, the authority
to grant options which are not immediately exercisable.
9. EFFECT OF CHANGE IN STOCK SUBJECT TO PLAN. Appropriate adjustments
shall be made in the number and class of shares of Stock subject to the Plan and
to any outstanding Options and in the option price of any outstanding Options in
the event of a stock dividend, stock split, reverse stock split, combination,
reclassification, or like change in the capital structure of the Company.
10. TRANSFER OF CONTROL. A "Transfer of Control" shall be deemed to have
occurred in the event any of the following occurs with respect to the Control
Company. For purposes of applying this paragraph 10, the "Control Company"
shall mean the Participating Company whose stock is subject to the Option.
(a) the direct or indirect sale or exchange by the shareholders of
the Control Company of all or substantially all of the stock of the Control
Company where the shareholders of the Control Company before such sale or
exchange do not retain, directly or indirectly, at least a majority of the
beneficial interest in the voting stock of the Control Company;
(b) a merger in which the shareholders of the Control Company before
such merger do not retain, directly or indirectly,
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<PAGE>
at least a majority of the beneficial interest in the voting stock of the
Control Company; or
(c) the sale, exchange, or transfer (including, without limitation,
pursuant to a liquidation or dissolution) of all or substantially all of the
Control Company's assets (other than a sale, exchange, or transfer to one (1) or
more corporations where the shareholders of the Control Company before such
sale, exchange, or transfer retain, directly or indirectly, at least a majority
of the beneficial interest in the voting stock of the corporation(s) to which
the assets were transferred).
In the event of a Transfer of Control, the Board may arrange with the
surviving, continuing, successor, or purchasing corporation, as the case may be
(the "Acquiring Corporation"), to either assume the Company's rights and
obligations under outstanding stock option agreements or substitute options for
the Acquiring Corporation's stock for such outstanding Options. Any Options
which are neither assumed by the Acquiring Corporation nor exercised as of the
date of the Transfer of Control shall terminate effective as of the date of the
Transfer of Control.
11. PROVISION OF INFORMATION. At least annually, copies of the Company's
balance sheet and income statement for the just completed fiscal year shall be
made available to each Optionee and purchases of shares of Stock upon the
exercise of an Option. The Company shall not be required to provide such
information to persons whose duties in connection with the Company assure them
access to equivalent information. Each Optionee shall be given access to
information concerning the Company equivalent to that information generally made
available to the Company's common shareholders.
12. OPTIONS NON-TRANSFERABLE. During the lifetime of the Optionee, the
Option shall be exercisable only by the Optionee. No Option shall be assignable
or transferable by the Optionee, except by will or by the laws of descent and
distribution.
13. TRANSFER OF COMPANY'S RIGHTS. In the event any Participating Company
assigns, other than by operation of law, to a third person, other than another
Participating Company, any of the Participating Company's rights to repurchase
any shares of Stock acquired on the exercise of an Option, the assignee shall
pay to the assigning Participating Company the value of such right as determined
by the Company in the Company's sole discretion. Such consideration shall be
paid in cash. In the event such repurchase right is exercisable at the time of
such assignment, the value of such right shall be not less than the fair market
value of the shares of Stock which may be repurchased under such right (as
determined by the Company) minus the repurchase price of such shares. The
requirements of this paragraph 13 regarding the minimum consideration to be
received by the assigning Participating Company shall not inure to the benefit
of the Optionee whose shares of Stock are being
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<PAGE>
repurchased. Failure of a Participating Company to comply with the provisions
of this paragraph 13 shall not constitute a defense or otherwise prevent the
exercise of the repurchase right by the assignee of such right.
14. TERMINATION OR AMENDMENT OF PLAN. The Board, including any duly
appointed committee of the Board, may terminate or amend the Plan at any time;
provided, however, that without the approval of the Company's shareholders,
there shall be (a) no increase in the total number of shares of Stock covered by
the Plan (except by operation of the provisions of paragraph 9 above), (b) no
change in the class of persons eligible to receive Incentive Stock Options and
(c) no expansion in the class of persons eligible to receive nonqualified stock
options. In any event, no amendment may adversely affect any then outstanding
Option or any unexercised portion thereof, without the consent of the Optionee,
unless such amendment is required to enable an Option designated as an Incentive
Stock Option to qualify as an Incentive Stock Option.
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