<PAGE> 1
As filed with the Securities and Exchange Commission on February 7, 1996
Registration No. 33-______________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
ADAPTEC, INC.
(Exact name of issuer as specified in its charter)
CALIFORNIA 94-2748530
(State of Incorporation) (I.R.S. Employer Identification No.)
691 SOUTH MILPITAS BOULEVARD
MILPITAS, CALIFORNIA 95035
(Address of principal executive offices)
1990 STOCK PLAN
(Full title of the Plan)
F. GRANT SAVIERS
Chief Executive Officer
ADAPTEC, INC.
691 South Milpitas Boulevard
Milpitas, California 95035
(408) 945-8600
(Name, address and telephone number of agent for service)
Copies to:
HENRY P. MASSEY, JR., ESQ.
Wilson, Sonsini, Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
(415) 493-9300
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<TABLE>
<CAPTION>
===================================================================================================================
CALCULATION OF REGISTRATION FEE
===================================================================================================================
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Share Price Fee
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock
$.001 par value, to be issued
under 1990 Stock Plan 2,193,900(1) $43.750(2) $95,983,125 $33,098
===================================================================================================================
</TABLE>
(1) For the sole purpose of calculating the registration fee, the number of
shares to be registered under this Registration Statement is the number
of additional shares authorized to be issued under the 1990 Stock Plan.
(2) Estimated in accordance with Rule 457(h) under the Securities Act of
1933, as amended (the "Securities Act") solely for the purpose of
calculating the total registration fee. Computation based upon the
average of the high and low prices of the Common Stock as reported on the
Nasdaq National Market on January 30, 1996 because the price at which the
options to be granted in the future may be exercised is not currently
determinable.
<PAGE> 3
PART II: INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Information Incorporated by Reference
The following documents and information heretofore filed with the
Securities and Exchange Commission are hereby incorporated by reference:
(A) The Registrant's Annual Report on Form 10-K, file no. 0-15071
filed on June 28, 1995, which contains audited financial
statements for the Registrant's fiscal year ended March 31,
1995.
(B) 1. The Registrant's Quarterly Report on Form 10-Q, file no.
0-15071, filed on August 10, 1995, which contains the
Registrant's unaudited financial statements as of June 30,
1995.
2. The Registrant's Quarterly Report on Form 10-Q, file no.
0-15071, filed on November 13, 1995, which contains the
Registrant's unaudited financial statements as of September
29, 1995.
(C) Items 1 and 2 of the Registrant's Registration Statement
Amendment on Form 8-A filed on July 20, 1992 pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
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 have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference in this Registration Statement and to be
part hereof from the date of filing such documents.
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 317 of the California General Corporation law makes provisions
for the indemnification of officers, directors, and other corporate agents in
terms sufficiently broad to indemnify such persons, under certain
circumstances, for liabilities (including reimbursement of expenses incurred)
arising under the Securities Act. The Registrant has entered into
indemnification agreements to such effect with its officers and directors.
Article IV of Registrant's Articles of Incorporation and Article VI of
the Bylaws of Registrant provide that the Registrant shall indemnify certain
agents of the Registrant to the maximum extent permitted by the California
Corporations Code. Persons covered by this indemnification provision include
current and former directors, officers,
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employees and other agents of the Registrant as well as persons who serve at
the request of the Registrant as directors, officers, employees or agents of
another enterprise.
The Registrant shall have the power, to the extent and in the manner
permitted by Section 317 of the California Corporations Code, to indemnify each
of its employees and agents (other than directors and officers) against
expenses, judgments, fines, settlements, and other amounts actually and
reasonably incurred in connection with any proceeding arising by reason of the
fact that such person is or was an agent of the Company. For this purpose, an
"employee" or "agent" of the Registrant includes any person (i) who is or was
an employee or agent of Registrant, (ii) who is or was serving at the request
of Registrant as an employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, or (iii) who was an employee or agent
of a corporation which was a predecessor corporation of Registrant or of
another enterprise at the request of such predecessor corporation.
The Registrant has entered into separate indemnification agreements
with its directors and officers, which may require the Registrant, among other
things, to indemnify them against certain liabilities that may arise by reason
of their status or service as directors or officers (other than liabilities
arising from willful misconduct of a culpable nature), and to advance their
expenses incurred as a result of any proceeding against them as to which they
could be indemnified.
ITEM 7. Exemption From Registration Claimed
Not Applicable.
ITEM 8. Exhibits
4.1 First Amended and Restated Common Shares Rights Agreement
between Registrant and Chemical Trust Company as Rights
Agents, dated June 30, 1992. (Incorporated by reference to
Exhibit 1.1 to Amendment No. 3 on Form 8 (filed July 20,
1992) to the Registrant's Registration Statement (No.
0-15071) on Form 8-A filed on May 11, 1992.)
4.2 1990 Stock Plan, as amended.
4.3 Forms of Stock Option Agreement and Incentive Stock Rights
Agreement for use in connection with the 1990 Stock Plan,
as amended.
4.4 Forms of Tandem Stock Option/SAR Agreement, Restricted
Stock Purchase Agreement and Stock Appreciation Rights
Agreement for use in connection with the 1990 Stock Plan,
as amended. (Incorporated by reference to Exhibit 10.24
filed with Registrant's Annual Report on Form 10-K for the
year ended March 31, 1993)
5.1 Opinion of Wilson, Sonsini, Goodrich & Rosati, P.C., as to
legality of securities being registered.
23.1 Consent of Independent Accountants (see Page II-7).
23.2 Consent of Independent Public Accountants (see page II-8).
23.3 Consent of Counsel (contained in Exhibit 5.1).
24.1 Power of Attorney (see Page II-4).
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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 to
include any material information with respect to the plan of distribution not
previously disclosed in this Registration Statement or any material change to
such information in this Registration Statement.
(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 California General Corporations Code, the
Restated Articles of Incorporation of the Registrant, the Bylaws of the
Registrant, Indemnification Agreements entered into between the Registrant and
its officers and directors, or otherwise, the Registrant has been advised that
in the opinion of the Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Adaptec, Inc, a corporation organized and existing under the laws
of the State of California, 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 Milpitas, State of
California, on this 31st day of January, 1996.
ADAPTEC, INC.
By: /s/ F. Grant Saviers
------------------------------------
F. Grant Saviers
Chief Executive Officer, President
and Director
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints F. Grant Saviers and Paul G. Hansen,
jointly and severally, his attorneys-in-fact, each with the power of
substitution, for him in any and all capacities, to sign any amendments to this
Registration Statement on Form S-8, and to file the same, with exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact, or his substitute or substitutes, may do or cause to be done
by virtue hereof.
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<PAGE> 7
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ F. Grant Saviers Chief Executive Officer, President and January 31, 1996
- ------------------------------------ Director
(F. Grant Saviers)
/s/ Paul G. Hansen Vice President of Finance, Chief January 31, 1996
- ------------------------------------ Financial Officer (Principal Financial
(Paul G. Hansen) Officer) and Assistant Secretary
/s/ Andrew J. Brown Corporate Controller (Principal January 31, 1996
- ------------------------------------ Accounting Officer)
(Andrew J. Brown)
/s/ John G. Adler Chairman of the Board and Director January 31, 1996
- ------------------------------------
(John G. Adler)
/s/ Laurence B. Boucher Director January 31, 1996
- ------------------------------------
(Laurence B. Boucher)
/s/ Carl J. Conti Director January 31, 1996
- ------------------------------------
(Carl J. Conti)
/s/ John East Director January 31, 1996
- ------------------------------------
(John East)
/s/ Robert J. Loarie Director January 31, 1996
- ------------------------------------
(Robert J. Loarie)
/s/ B.J. Moore Director January 31, 1996
- ------------------------------------
(B.J. Moore)
</TABLE>
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<TABLE>
<S> <C> <C>
/s/ W. Ferrell Sanders Director January 31, 1996
- ------------------------------------
(W. Ferrell Sanders)
/s/ Phillip E. White Director January 31, 1996
- ------------------------------------
(Phillip E. White)
</TABLE>
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<PAGE> 9
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated April 20, 1995, which appears on
page 47 of the 1995 Annual Report to Shareholders of Adaptec, Inc., which is
incorporated by reference in Adaptec Inc.'s Annual Report on Form 10-K for the
year ended March 31, 1995.
/s/ PRICE WATERHOUSE LLP
San Jose, California
February 1, 1996
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CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our report dated April 25, 1994
included in Adaptec, Inc.'s Form 10-K for the year ended March 31, 1995.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
San Jose, California
February 1, 1996
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Page
Number No.
------- ----
<S> <C> <C>
4.1(1) First Amended and Restated Common Shares Rights Agreement between
Registrant and Chemical Trust Company as Rights Agents, dated June 30,
1992.
4.2 1990 Stock Plan, as amended.
4.3 Forms of Stock Option Agreement and Incentive Stock Rights Agreement for
use in connection with the 1990 Stock Plan, as amended.
4.4(2) Forms of Tandem Stock Option/SAR Agreement, Restricted Stock Purchase
Agreement and Stock Appreciation Rights Agreement for use in connection
with the 1990 Stock Plan, as amended.
5.1 Opinion of counsel as to legality of securities being registered.
23.1 Consent of Independent Accountants (see page II-7).
23.2 Consent of Independent Public Accountants (see page II-8).
23.3 Consent of Counsel (contained in Exhibit 5.1).
24.1 Power of Attorney (see page II-4).
</TABLE>
- ---------------
(1) Incorporated by reference to Exhibit 1.1 to Amendment No. 3 on Form 8
(filed July 20, 1992) to the Registrant's Registration Statement (No.
0-15071) on Form 8-A filed on May 11, 1992.
(2) Incorporated by reference to Exhibit 10.24 filed with Registrant's
Annual Report on Form 10-K for the year ended March 31, 1993 filed
June 28, 1993.
<PAGE> 1
Exhibit 4.2
ADAPTEC, INC.
1990 STOCK PLAN
(as amended June 20, 1995)
1. Purposes of the Plan. The purposes of this Stock Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and its Subsidiaries and to promote the success of the Company's
business. Options granted under the Plan may be incentive stock options (as
defined under Section 422 of the Code) or non-statutory stock options, as
determined by the Administrator at the time of grant of an option and subject
to the applicable provisions of Section 422 of the Code, as amended, and the
regulations promulgated thereunder. Stock appreciation rights ("SARs"),
incentive stock rights, and stock purchase rights may also be granted under the
Plan.
2. Definitions. As used herein, the following definitions shall
apply:
(a) "Administrator" means the Board or any of its
Committees as shall be administering the Plan, in accordance with Section 4 of
the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as
amended from time to time, and any successor thereto.
(d) "Common Stock" means the Common Stock, $.001 par
value, of the Company.
(e) "Company" means Adaptec, Inc., a California
corporation.
(f) "Committee" means any Committee, if any, appointed by
the Board in accordance with paragraph (a) of Section 4 of the Plan.
(g) "Consultant" means any person, including an advisor,
who is engaged by the Company or any Parent or Subsidiary to render services
and is compensated for such services, provided the term Consultant shall not
include directors who are not compensated for their services or are paid only a
director's fee by the Company.
(h) "Continuous Status as an Employee or Consultant"
means the absence of any interruption or termination of the employment or
consulting relationship by the Company or any Subsidiary. Continuous Status as
an Employee or Consultant shall
<PAGE> 2
not be considered interrupted in the case of: (i) sick leave; (ii) military
leave; (iii) any other leave of absence approved by the Board, provided that
such leave is for a period of not more than ninety (90) days, unless
reemployment upon the expiration of such leave is guaranteed by contract or
statute, or unless provided otherwise pursuant to Company policy adopted from
time to time; or (iv) in the case of transfers between locations of the Company
or between the Company, its Subsidiaries or its successor.
(i) "Disability" means total and permanent disability, as
defined in Section 22(e)(3) of the Code.
(j) "Employee" means any person, including officers and
directors, employed by the Company or any Subsidiary. The payment of
directors' fees by the Company shall not be sufficient to constitute
"employment" by the Company.
(k) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(l) "Fair Market Value" means, as of any date, the value
of Common Stock determined as follows:
(i) If the Common Stock is listed on any
established stock exchange or a national market system, including without
limitation the National Market System of the National Association of Securities
Dealers, Inc. Automated Quotation ("NASDAQ") System, the Fair Market Value of a
Share of Common Stock shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such system or exchange
(or the exchange with the greatest volume of trading in Common Stock) on the
last market trading day prior to the day of determination, as reported in the
Wall Street Journal or such other source as the Administrator deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ
System (but not on the National Market System thereof) or regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the high and
low asked prices for the Common Stock or on the last market trading day prior
to the day of determination, as reported in the Wall Street Journal or such
other source as the Administrator deems reliable;
(iii) In the absence of an established market for
the Common Stock, the Fair Market Value thereof shall be determined in good
faith by the Administrator.
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(m) "Incentive Stock Option" means an Option that
satisfies the provisions of Section 422 of the Code.
(n) "Incentive Stock Right" means an award under Section
7 below that is payable in cash or in shares of Common Stock upon such terms
and conditions as the Administrator may deem appropriate.
(o) "Nonstatutory Stock Option" means an Option that is
not an Incentive Stock Option.
(p) "Option" means an Option granted pursuant to the
Plan.
(q) "Optioned Stock" means the Common Stock subject to an
Option or Right.
(r) "Optionee" means an Employee or Consultant who
receives an Option or Right.
(s) "Parent" corporation shall have the meaning defined
in Section 425(e) of the Code.
(t) "Plan" means this 1990 Stock Plan.
(u) "Restricted Stock" means shares of Common Stock
acquired pursuant to a grant of Stock Purchase Rights under Section 9 below.
(v) "Right" means and includes Incentive Stock Rights,
SARs and Stock Purchase Rights granted pursuant to the Plan.
(w) "SAR" means a stock appreciation right granted
pursuant to Section 8 below.
(x) "Share" means the Common Stock, as adjusted in
accordance with Section 12 of the Plan.
(y) "Stock Purchase Right" means the right to purchase
Common Stock pursuant to Section 9.
(z) "Subsidiary" corporation shall have the meaning
defined in Section 425(f) of the Code.
In addition, the terms "Rule 16b-3" and "Applicable Laws," the term
"Insiders," the term "Tax Date," and the terms "Change of
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Control" and "Change of Control Price," shall have the meanings set forth,
respectively, in Sections 4, 8, 9 and 12 below.
3. Stock Subject to the Plan. Subject to the provisions of
Section 12 of the Plan, the total number of Shares reserved and available for
distribution pursuant to awards made under the Plan shall be 11,500,000 Shares,
increased each April 1, from and including April 1, 1995, by a number of Shares
equal to 4.25% of the number of Shares outstanding as of the last Saturday of
the March preceding each such April 1. The maximum number of Shares reserved
and available for issuance pursuant to Incentive Stock Options is 11,500,000.
Subject to Section 12 of the Plan, if any Shares that have
been optioned under an Option cease to be subject to such Option (other than
through exercise of the Option), or if any Option or Right granted hereunder is
forfeited, or any such award otherwise terminates prior to the issuance of
Common Stock to the participant, the Shares that were subject to such Option or
Right shall again be available for distribution in connection with future
Option or Right grants under the Plan. In addition, Shares that have been
subject to Incentive Stock Rights settled for cash, and SARs exercised for
cash, whether such SARs have been granted in connection with or independently
of options, shall again be available for distribution under the Plan. Shares
that have actually been issued under the Plan, whether upon exercise of an
Option or Right, shall not in any event be returned to the Plan and shall not
become available for future distribution under the Plan, except that if Shares
of Restricted Stock are repurchased by the Company at their original purchase
price, and the original purchaser of such Shares did not receive any benefits
of ownership of such Shares, such Shares shall become available for future
grant under the Plan. For purposes of the preceding sentence, voting rights
shall not be considered a benefit of Share ownership.
4. Administration of the Plan.
(a) Procedure.
(i) Administration With Respect to Directors and
Officers. With respect to grants of Options or Rights to Employees who are
also officers or directors of the Company, the Plan shall be administered by
(A) the Board if the Board may administer the Plan in compliance with Rule
16b-3 promulgated under the Exchange Act or any successor rule ("Rule 16b-3")
with respect to a plan intended to qualify thereunder as a discretionary plan,
or (B) a Committee designated by the Board to administer the Plan, which
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<PAGE> 5
Committee shall be constituted in such a manner as to permit the Plan to comply
with Rule 16b-3 with respect to a plan intended to qualify thereunder as a
discretionary plan. Once appointed, such Committee shall continue to serve in
its designated capacity until otherwise directed by the Board. From time to
time the Board may increase the size of the Committee and appoint additional
members thereof, remove members (with or without cause) and appoint new members
in substitution therefor, fill vacancies, however caused, and remove all
members of the Committee and thereafter directly administer the Plan, all to
the extent permitted by Rule 16b-3 with respect to a plan intended to qualify
thereunder as a discretionary plan.
(ii) Administration With Respect to Consultants
and Other Employees. With respect to grants of Options or Rights to Employees
or Consultants who are neither directors nor officers of the Company, the Plan
shall be administered by (A) the Board or (B) a Committee designated by the
Board, which Committee shall be constituted in such a manner as to satisfy the
legal requirements relating to the administration of incentive stock option
plans, if any, of California corporate and securities laws and of the Code (the
"Applicable Laws"). Once appointed, such Committee shall continue to serve in
its designated capacity until otherwise directed by the Board. From time to
time the Board may increase the size of the Committee and appoint additional
members thereof, remove members (with or without cause) and appoint new members
in substitution therefor, fill vacancies, however caused, and remove all
members of the Committee and thereafter directly administer the Plan, all to
the extent permitted by the Applicable Laws.
(iii) Multiple Administrative Bodies. If permitted
by Rule 16b-3, the Plan may be administered by different bodies with respect to
directors, non-director officers and Employees who are neither directors nor
officers and Consultants who are not directors.
(b) Powers of the Administrator. Subject to the
provisions of the Plan and in the case of a Committee, the specific duties
delegated by the Board to such Committee, the Administrator shall have the
authority, in its discretion:
(i) to determine the Fair Market Value of the
Common Stock, in accordance with Section 2(l) of the Plan;
(ii) to select the officers, Consultants and
Employees to whom Options and Rights may from time to time be granted
hereunder;
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<PAGE> 6
(iii) to determine whether and to what extent
Options and Rights or any combination thereof, are granted hereunder;
(iv) to determine the number of shares of Common
Stock to be covered by each such award granted hereunder;
(v) to approve forms of agreement for use under
the Plan;
(vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted
hereunder (including, but not limited to, the share price and any
restriction or limitation, or any vesting acceleration or waiver of
forfeiture restrictions regarding any Option or other award and/or the
shares of Common Stock relating thereto, based in each case on such
factors as the Administrator shall determine, in its sole discretion);
(vii) to determine whether and under what
circumstances an Option may be settled in cash under subsection
8(a)(vii) instead of Common Stock;
(viii) to determine whether, to what extent and
under what circumstances Common Stock and other amounts payable with
respect to an award under this Plan shall be deferred either
automatically or at the election of the participant (including
providing for and determining the amount (if any) of any deemed
earnings on any deferred amount during any deferral period);
(ix) to reduce the exercise price of any Option to
the then current Fair Market Value if the Fair Market Value of the
Common Stock covered by such Option shall have declined since the date
the Option was granted; and
(x) to determine the terms and restrictions
applicable to Options and Rights and any Restricted Stock acquired
pursuant to Rights.
(c) Effect of Committee's Decision. All decisions,
determinations and interpretations of the Administrator shall be final and
binding.
5. Eligibility. Nonstatutory Stock Options and Rights may be
granted only to Employees and Consultants. Incentive Stock Options may be
granted only to Employees. An Employee who has been granted an Option or Right
may, if he or she is otherwise eligible,
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<PAGE> 7
be granted an additional Options or Rights. Each Option shall be evidenced by
a written Option agreement, which shall expressly identify the Options as
Incentive Stock Options or as Nonstatutory Stock Options, and which shall be in
such form and contain such provisions as the Administrator shall from time to
time deem appropriate. Without limiting the foregoing, the Administrator may,
at any time, or from time to time, authorize the Company, with the consent of
the respective recipients, to issue Options in exchange for the surrender and
cancellation of any or all outstanding Options, other options, or Rights.
Neither the Plan nor any Option or Right agreement shall confer
upon any Optionee any right with respect to continuation of employment by the
Company, nor shall it interfere in any way with the Optionee's right or the
Company's right to terminate the Optionee's employment at any time.
6. Term of Plan. Subject to Section 18 of the Plan, the Plan
shall become effective upon the earlier to occur of its adoption by the Board
or its approval by the shareholders of the Company as described in Section 18.
It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 14 of the Plan.
7. Incentive Stock Rights.
(a) Procedure. The Administrator, in its discretion, may
grant to eligible participants Incentive Stock Rights composed of incentive
stock units. Incentive Stock Rights shall be evidenced by Incentive Stock
Right agreements in such form and not inconsistent with the Plan as the
Administrator shall approve from time to time, which agreements shall contain
in substance the following terms and conditions:
(i) Incentive Stock Units. An Incentive Stock
Right agreement shall specify the number of incentive stock units to which it
pertains. Each incentive stock unit shall be equivalent to one Share, and
shall entitle the holder to receive, without payment of cash to the Company,
one Share or, in the discretion of the Administrator, the cash equivalent of
one Share, in consideration for services performed for the Company or for its
benefit by the person receiving the Right subject to the lapse of the incentive
periods (hereinafter defined). An incentive stock unit that becomes payable
may be paid currently or on a deferred basis with such interest or earnings
equivalent as may be determined by the Administrator.
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<PAGE> 8
(ii) Incentive Period. The holder of Incentive
Stock Rights shall be entitled to receive Shares only after the lapse of such
incentive periods, and in such manner, as shall be fixed by the Administrator
at the time of grant of Incentive Stock Rights. (Such period or periods so
fixed is or are herein referred to as the "incentive period".) To the extent
the holder of Incentive Stock Rights receives Shares on the lapse of the
incentive period, an equivalent number of incentive stock units subject to such
Rights shall be deemed to have been discharged.
(iii) Termination of Status as Employee or
Consultant by Reason of Death or Disability. In the event that the employment
or consulting relationship of any person to whom Incentive Stock Rights have
been issued under the Plan terminates as a result of death or Disability, the
incentive period established pursuant to subsection 7(a)(ii) during which such
termination occurs shall lapse as to the incentive stock units that are covered
by such Incentive Stock Rights and that otherwise would have become payable at
the end of such incentive period. Incentive stock units covered by Incentive
Stock Rights of such person that would be payable upon the lapse of incentive
periods subsequent to the incentive period in which death or disability occurs
shall terminate.
(iv) Termination of Status as Employee or
Consultant for any Other Reason. In the event that any person to whom
Incentive Stock Rights have been issued under the Plan terminates his or her
employment or consulting relationship (as the case may be) for any reason
(including dismissal by the Company with or without cause), other than death or
Disability, such Rights as to which the incentive period has not lapsed shall
terminate on termination of employment or consulting relationship (as the case
may be).
(v) Issuance of Shares. With respect to
Incentive Stock Rights payable in Shares, upon the lapse of an incentive
period, the Company shall deliver to the person entitled to receive the shares
a certificate or certificates for a number of Shares equal to the number of
incentive stock units as to which an incentive period has lapsed.
(b) Dividend Equivalents. The holder of an Incentive
Stock Right shall be entitled to receive from the Company cash payments at the
same time and in the same amounts that the holder of record of a number of
Shares equal to the number of incentive stock units covered by such Right would
be entitled to receive as dividends on such Shares. Such right to cash payment
on an incentive stock unit shall apply to all dividends the record date
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<PAGE> 9
for which occurs at any time during the period commencing on the date the
Incentive Stock Right is granted and ending on the date that the holder of such
Right becomes a shareholder of record with respect to such Right as a result of
the lapse of an incentive period or the date the Incentive Stock Right
otherwise terminates, whichever occurs first.
8. Options and SARs.
(a) Options. The Administrator, in its discretion, may
grant Options to eligible participants and shall determine whether such Options
shall be Incentive Stock Options or Nonstatutory Stock Options. Each Option
shall be evidenced by a written Option agreement which shall expressly identify
the Options as Incentive Stock Options or as Nonstatutory Stock Options, and be
in such form and contain such provisions as the Administrator shall from time
to time deem appropriate. Without limiting the foregoing, the Administrator
may, at any time, or from time to time, authorize the Company, with the consent
of the respective recipients, to issue Options or Options in exchange for the
surrender and cancellation of any or all outstanding Options or Rights. Option
agreements shall contain the following terms and conditions:
(i) Option Price; Number of Shares. The per
Share exercise price for the Shares issuable pursuant to an Option shall be
such price as is determined by the Administrator, but shall in no event be less
than 50% of the Fair Market Value of Common Stock, determined as of the date of
grant of the Option. In the event that the Administrator shall reduce the
exercise price, the exercise price shall be no less than 50% of the Fair Market
Value as of the date of that reduction.
The Option agreement shall specify the number of
Shares to which it pertains.
(ii) Waiting Period and Exercise Dates. At the
time an Option is granted, the Administrator will determine the terms and
conditions to be satisfied before Shares may be purchased, including the dates
on which Shares subject to the Option may first be purchased. The
Administrator may specify that an Option may not be exercised until the
completion of the service period specified at the time of grant. (Any such
period is referred to herein as the "waiting period.") At the time an Option
is granted, the Administrator shall fix the period within which the Option may
be exercised, which shall not be less than the waiting period, if any, nor, in
the case of an Incentive Stock Option, more than ten (10) years, from the date
of grant.
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(iii) Form of Payment. The consideration to be
paid for the Shares to be issued upon exercise of an Option, including the
method of payment, shall be determined by the Administrator (and, in the case
of an Incentive Stock Option, shall be determined at the time of grant) and may
consist entirely of (1) cash, (2) check, (3) promissory note, (4) other Shares
which (x) in the case of Shares acquired upon exercise of an Option either have
been owned by the Optionee for more than six months on the date of surrender or
were not acquired, directly or indirectly, from the Company, and (y) have a
Fair Market Value on the date of surrender equal to the aggregate exercise
price of the Shares as to which said Option shall be exercised, (5) delivery of
a properly executed exercise notice together with irrevocable instructions to a
broker to promptly deliver to the Company the amount of sale or loan proceeds
required to pay the exercise price, (6) delivery of an irrevocable subscription
agreement for the Shares which irrevocably obligates the Optionee to take and
pay for the Shares not more than twelve months after the date of delivery of
the subscription agreement, (7) any combination of the foregoing methods of
payment, or (8) such other consideration and method of payment for the issuance
of Shares to the extent permitted under Applicable Laws.
(iv) Special Incentive Stock Option Provisions.
In addition to the foregoing, Options granted under the Plan which are intended
to be Incentive Stock Options under Section 422 of the Code shall be subject to
the following terms and conditions:
(1) Exercise Price. The per share
exercise price of an Incentive Stock Option shall be no less than 100% of the
Fair Market Value per Share on the date of grant.
(2) Dollar Limitation. To the extent
that the aggregate Fair Market Value of (i) the Shares with respect to which
Options designated as Incentive Stock Options plus (ii) the shares of stock of
the Company, Parent and any Subsidiary with respect to which other incentive
stock options are exercisable for the first time by an Optionee during any
calendar year under all plans of the Company and any Parent and Subsidiary
exceeds $100,000, such Options shall be treated as Nonstatutory Stock Options.
For purposes of the preceding sentence, (i) Options shall be taken into account
in the order in which they were granted, and (ii) the Fair Market Value of the
Shares shall be determined as of the time the Option or other incentive stock
option is granted.
(3) 10% Shareholder. If any Optionee to
whom an Incentive Stock Option is to be granted pursuant to the provisions of
the Plan is, on the date of grant, the owner of
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Common Stock (as determined under Section 425(d) of the Code) possessing more
than 10% of the total combined voting power of all classes of stock of the
Company or any Subsidiary, then the following special provisions shall be
applicable to the Option granted to such individual:
(A) The per Share Option price of
Shares subject to such Incentive Stock Option shall not be less than 110% of
the Fair Market Value of Common Stock on the date of grant; and
(B) The Option shall not have a
term in excess of five (5) years from the date of grant.
Except as modified by the preceding provisions of this subsection 8(a)(v) and
except as otherwise limited by Section 422 of the Code, all of the provisions of
the Plan shall be applicable to the Incentive Stock Options granted hereunder.
(v) Other Provisions. Each Option granted under
the Plan may contain such other terms, provisions, and conditions not
inconsistent with the Plan as may be determined by the Administrator.
(vi) Buyout Provisions. The Administrator may at
any time offer to buy out for a payment in cash or Shares, an Option previously
granted, based on such terms and conditions as the Administrator shall establish
and communicate to the Optionee at the time that such offer is made.
(b) SARs.
(i) In Connection with Options. At the sole
discretion of the Administrator, SARs may be granted in connection with all or
any part of an Option, either concurrently with the grant of the Option or at
any time thereafter during the term of the Option. The following provisions
apply to SARs that are granted in connection with Options:
(1) The SAR shall entitle the Optionee
to exercise the SAR by surrendering to the Company unexercised a portion of the
related Option. The Optionee shall receive in exchange from the Company an
amount equal to the excess of (x) the Fair Market Value on the date of exercise
of the SAR of the Common Stock covered by the surrendered portion of the
related Option over (y) the exercise price of the Common Stock covered by the
surrendered portion of the related Option. Notwithstanding the foregoing, the
Administrator may place limits on the amount that
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may be paid upon exercise of an SAR; provided, however, that such limit shall
not restrict the exercisability of the related Option.
(2) When an SAR is exercised, the
related Option, to the extent surrendered, shall cease to be exercisable.
(3) An SAR shall be exercisable only
when and to the extent that the related Option is exercisable and shall expire
no later than the date on which the related Option expires.
(4) An SAR may only be exercised at a
time when the Fair Market Value of the Common Stock covered by the related
Option exceeds the exercise price of the Common Stock covered by the related
Option.
(ii) Independent of Options. At the sole
discretion of the Administrator, SARs may be granted without related Options.
The following provisions apply to SARs that are not granted in connection with
Options:
(1) The SAR shall entitle the Optionee,
by exercising the SAR, to receive from the Company an amount equal to the
excess of (x) the Fair Market Value of the Common Stock covered by exercised
portion of the SAR, as of the date of such exercise, over (y) the Fair Market
Value of the Common Stock covered by the exercised portion of the SAR, as of
the last market trading date prior to the date on which the SAR was granted;
provided, however, that the Administrator may place limits on the aggregate
amount that may be paid upon exercise of an SAR or SARs.
(2) SARs shall be exercisable, in whole
or in part, at such times as the Administrator shall specify in the Optionee's
SAR agreement.
(iii) Form of Payment. The Company's obligation
arising upon the exercise of an SAR may be paid in Common Stock or in cash, or
in any combination of Common Stock and cash, as the Administrator, in its sole
discretion, may determine. Shares issued upon the exercise of an SAR shall be
valued at their Fair Market Value as of the date of exercise.
(iv) Section 16 Restrictions. SARs granted to
persons who are subject to Section 16 of the Exchange Act ("Insiders") shall be
subject to any additional restrictions applicable to SARs granted to such
persons in compliance with Rule 16b-3. An Insider may only exercise an SAR
during such time or times as are permitted by Rule 16b-3.
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(c) Method of Exercise.
(i) Procedure for Exercise; Rights as a
Shareholder. Any Option or SAR granted hereunder shall be exercisable at such
times and under such conditions as determined by the Administrator and as shall
be permissible under the terms of the Plan.
An Option may not be exercised for a fraction of a
Share.
An Option or SAR shall be deemed to be exercised when
written notice of such exercise has been given to the Company in accordance
with the terms of the Option or SAR by the person entitled to exercise the
Option or SAR and full payment for the Shares with respect to which the Option
is exercised has been received by the Company. Full payment may, as authorized
by the Administrator (and, in the case of an Incentive Stock Option, determined
at the time of grant) and permitted by the Option Agreement consist of any
consideration and method of payment allowable under subsection 8(a)(iii) of the
Plan. Until the issuance (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company) of the
stock certificate evidencing such Shares, no right to vote or receive dividends
or any other rights as a shareholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. No adjustment will be made
for a dividend or other right for which the record date is prior to the date
the stock certificate is issued, except as provided in Section 12 of the Plan.
Exercise of an Option in any manner shall result in a
decrease in the number of Shares which thereafter shall be available, both for
purposes of the Plan and for sale under the Option, by the number of Shares as
to which the Option is exercised. Exercise of an SAR in any manner shall, to
the extent the SAR is exercised, result in a decrease in the number of Shares
which thereafter shall be available for purposes of the Plan, and the SAR shall
cease to be exercisable to the extent it has been exercised.
(ii) Rule 16b-3. Options and SARs granted to
Insiders must comply with the applicable provisions of Rule 16b-3 and shall
contain such additional conditions or restrictions as may be required
thereunder to qualify for the maximum exemption from Section 16 of the Exchange
Act with respect to Plan transactions.
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<PAGE> 14
(iii) Termination of Employment. Upon termination
of an Optionee's Continuous Status as an Employee or Consultant (other than
upon the Optionee's death), the Optionee may, but only within thirty (30) days
(or such other period of time not exceeding six (6) months (three (3) months in
the case of an Incentive Stock Option) as is determined by the Administrator at
the time of grant) after the date of such termination, exercise his or her
Option or SAR to the extent that it was exercisable at the date of such
termination.
(iv) Disability of Optionee. In the event of
termination of an Optionee's Continuous Status as an Employee or Consultant as
a result of the Optionee's Disability, the Optionee may, but only within six
(6) months from the date of such termination (but in no event later than the
expiration of the term of such Option as set forth in the Option Agreement),
exercise the Option to the extent that the Optionee was entitled to exercise it
at the date of such termination.
(v) Death of Optionee. In the event of the death
of an Optionee, Options and SARs granted hereunder to such Optionee shall
become vested and exercisable, in addition to Shares as to which such Options
and SARs would otherwise be vested and exercisable, for the lesser of the full
number of Shares covered by the Options and SARs or an aggregate of 50,000
Shares. Each Option and SAR held by the Optionee at the time of death may be
exercised at any time within six (6) months following the date of death by the
Optionee's estate or by a person who acquired the right to exercise the Option
or SAR by bequest or inheritance. In no event shall an Option or SAR be
exercised later than the expiration of the term of the Option or SAR, as set
forth in the Option or SAR agreement.
(d) Option and SAR Limitation. The following limitation
shall apply to grants of Options and SARs under the Plan:
(i) No Employee shall be granted, in any fiscal
year of the Company, Options and SARs under the Plan to purchase more than
500,000 Shares.
(ii) The foregoing limitation shall be adjusted
proportionately in connection with any change in the Company's capitalization
as described in Section 12(a).
(iii) If an Option or SAR is cancelled (other than
in connection with a transaction described in Section 12), the cancelled Option
or SAR shall be counted against the limits set
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<PAGE> 15
forth in Section 8(d)(i). For this purpose, if the exercise price of an Option
or SAR is reduced, the transaction will be treated as a cancellation of the
Option or SAR and the grant of a new Option or SAR.
9. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be
issued either alone, in addition to, or in tandem with other awards granted
under the Plan and/or cash awards made outside of the Plan. After the
Administrator determines that it will offer Stock Purchase Rights under the
Plan, it shall advise the offeree in writing of the terms, conditions and
restrictions related to the offer, including the number of Shares that such
person shall be entitled to purchase, the price to be paid (which price shall
not be less than 50% of the Fair Market Value of the Shares as of the date of
the offer), and the time within which such person must accept such offer, which
shall in no event exceed thirty (30) days from the date upon which the
Administrator made the determination to grant the Stock Purchase Right. The
offer shall be accepted by execution of a Restricted Stock purchase agreement
in the form determined by the Administrator. Shares purchased pursuant to the
grant of a Stock Purchase Right shall be referred to herein as "Restricted
Stock."
(b) Repurchase Option. Unless the Administrator
determines otherwise, the Restricted Stock purchase agreement shall grant the
Company a repurchase option exercisable upon the voluntary or involuntary
termination of the purchaser's employment with the Company for any reason
(including death or Disability). The purchase price for Shares repurchased
pursuant to the Restricted Stock purchase agreement shall be the original price
paid by the purchaser and may be paid by cancellation of any indebtedness of
the purchaser to the Company. The repurchase option shall lapse at such rate
as the Administrator may determine.
(c) Other Provisions. The Restricted Stock purchase
agreement shall contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Administrator in its
sole discretion. In addition, the provisions of Restricted Stock purchase
agreements need not be the same with respect to each purchaser.
(d) Section 16 Restrictions. Stock Purchase Rights
granted to Insiders, and Shares purchased by Insiders in connection with Stock
Purchase Rights, shall be subject to any restrictions applicable thereto in
compliance with Rule 16b-3. An Insider may
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<PAGE> 16
only purchase Shares pursuant to the grant of a Stock Purchase Right, and may
only sell Shares purchased pursuant to the grant of a Stock Purchase Right,
during such time or times as are permitted by Rule 16b-3.
(e) Rights as a Shareholder. Once the Stock Purchase
Right is exercised, the purchaser shall have the rights equivalent to those of
a shareholder, and shall be a shareholder when his or her purchase is entered
upon the records of the duly authorized transfer agent of the Company. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the Stock Purchase Right is exercised, except as provided
in Section 12 of the Plan.
10. Stock Withholding to Satisfy Withholding Tax Obligations. At
the discretion of the Administrator, Optionees may satisfy withholding
obligations as provided in this Section 10. When an Optionee incurs tax
liability in connection with the an Option or Right, which tax liability is
subject to tax withholding under applicable tax laws, and the Optionee is
obligated to pay the Company an amount required to be withheld under applicable
tax laws, the Optionee may satisfy the withholding tax obligation by electing
to have the Company withhold from the Shares to be issued upon exercise of the
Option, or the Shares to be issued in connection with the Right, if any, that
number of Shares having a Fair Market Value equal to the amount required to be
withheld. The Fair Market Value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be
determined (the "Tax Date").
All elections by an Optionee to have Shares withheld for this purpose
shall be made in writing in a form acceptable to the Administrator and shall be
subject to the following restrictions:
(a) the election must be made on or prior to the
applicable Tax Date;
(b) once made, the election shall be irrevocable as to
the particular Shares of the Option or Right as to which the election
is made;
(c) all elections shall be subject to the consent or
disapproval of the Administrator;
(d) if the Optionee is an Insider, the election must
comply with the applicable provisions of Rule 16b-3 and shall be
subject to such additional conditions or restrictions as
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<PAGE> 17
may be required thereunder to qualify for the maximum exemption from
Section 16 of the Exchange Act with respect to Plan transactions.
In the event the election to have Shares withheld is made by an
Optionee and the Tax Date is deferred under Section 83 of the Code because no
election is filed under Section 83(b) of the Code, the Optionee shall receive
the full number of Shares with respect to which the Option or Right is
exercised but such Optionee shall be unconditionally obligated to tender back
to the Company the proper number of Shares on the Tax Date.
11. Non-Transferability of Options. Options and Rights may not be
sold, pledged, assigned, hypothecated, transferred or disposed of in any manner
other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee.
12. Adjustments Upon Changes in Capitalization or Merger.
(a) Subject to any required action by the shareholders of
the Company, the number of Shares covered by each outstanding Option and Right,
and the number of Shares which have been authorized for issuance under the Plan
but as to which no Options or Rights have yet been granted or which have been
returned to the Plan upon cancellation or expiration of an Option or Right, as
well as the price per Share covered by each such outstanding Option or Right,
shall be proportionately adjusted for any increase or decrease in the number of
issued Shares resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the aggregate number of issued Shares effected without
receipt of consideration by the Company; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, 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 or price of Shares subject to an Option or Right.
In the event of the proposed dissolution or
liquidation of the Company, all outstanding Options and Rights will terminate
immediately prior to the consummation of such proposed action, unless otherwise
provided by the Board. The Board may, in
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the exercise of its sole discretion in such instances, declare that any Option
or Right shall terminate as of a date fixed by the Board and give each Optionee
the right to exercise his Option or Right as to all or any part of the Optioned
Stock or Right, including Shares as to which the Option or Right, would not
otherwise be exercisable.
Subject to the provisions of paragraph (b) hereof, in
the event of a proposed sale of all or substantially all of the assets of the
Company, or the merger of the Company with or into another corporation, each
outstanding Option and Right shall be assumed or an equivalent option or Right
shall be substituted by such successor corporation or a parent or subsidiary of
such successor corporation, unless the Board determines, in the exercise of its
sole discretion and in lieu of such assumption or substitution, that the
Optionee shall have the right to exercise the Option or Right as to all of the
Optioned Stock, including Shares as to which the Option or Right would not
otherwise be exercisable. If the Board makes an Option or Right fully
exercisable in lieu of assumption or substitution in the event of a merger or
sale of assets, the Company shall notify the Optionee that the Option or Right
shall be fully exercisable for a period of fifteen (15) days from the date of
such notice, and the Option or Right will terminate upon the expiration of such
period. For purposes of this paragraph, an Option granted under the Plan shall
be deemed to be assumed if, following the sale of assets or merger, the Option
confers the right to purchase, for each Share of Optioned Stock subject to the
Option immediately prior to the sale of assets or merger, the consideration
(whether stock, cash or other securities or property) received in the sale of
assets or merger by holders of Common Stock for each Share held on the
effective date of the transaction (and if such holders were offered a choice of
consideration, the type of consideration chosen by the holders if a majority of
the outstanding Shares); provided, however, that if such consideration received
in the sale of assets or merger was not solely Common Stock of the successor
corporation or its parent, the Board may, with the consent of the successor
corporation and the participant, provide for the consideration to be received
upon exercise of the Option or Right to be solely Common Stock of the successor
corporation or its parent equal in Fair Market Value to the per share
consideration received by holders of Common Stock in the sale of assets or
merger.
(b) In the event of a "Change in Control" of the Company,
as defined in paragraph (c) below, unless otherwise determined by the Board
prior to the occurrence of such Change in
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Control, the following acceleration and valuation provisions shall apply:
(1) Any Options and Rights outstanding as of the
date such Change in Control is determined to have occurred that are
not yet exercisable and vested on such date shall become fully
exercisable and vested; and
(2) The value of all outstanding Options and
Rights shall, unless otherwise determined by the Board at or after
grant, be cashed out at the Change in Control Price. The cash out
proceeds shall be paid to the Optionee or, in the event of death of an
Optionee prior to payment, to the estate of the Optionee or to a
person who acquired the right to exercise the Option or Right by
bequest or inheritance.
(c) Definition of "Change in Control". For purposes of
this Section 12, a "Change in Control" means the happening of any of the
following:
(i) When any "person," as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act (other than
the Company, a Subsidiary or a Company employee benefit plan,
including any trustee of such plan acting as trustee) is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the combined voting power
of the Company's then outstanding securities; or
(ii) The occurrence of a transaction requiring
shareholder approval, and involving the sale of all or substantially
all of the assets of the Company or the merger of the Company with or
into another corporation.
(d) Change in Control Price. For purposes of this
Section 12, "Change in Control Price" shall be, as determined by the Board, (i)
the highest closing sale price of a Share of Common Stock as reported by the
NASDAQ System and as appearing in the Wall Street Journal (or, in the event the
Common Stock is listed on a stock exchange, the highest closing price on such
exchange as reported on the Composite Transaction Reporting System), at any
time within the 60 day period immediately preceding the date of determination
of the Change in Control Price by the Board (the "60-Day Period"), or (ii) the
highest price paid or offered, as determined by the Board, in any bona fide
transaction or bona fide
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<PAGE> 20
offer related to the Change in Control of the Company, at any time within the
60-Day Period.
13. Time of Granting Options and Rights. The date of grant of an
Option or Right shall, for all purposes, be the date on which the Administrator
makes the determination granting such Option or Right. Notice of the
determination shall be given to each Employee or Consultant to whom an Option
or Right is so granted within a reasonable time after the date of such grant.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time
amend, alter, suspend, or discontinue the Plan, but no amendment, alteration,
suspension, or discontinuation shall be made which would impair the rights of
any Optionee under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with Rule 16b-3 under
the Exchange Act or under Section 422 of the Code (or any other applicable law
or regulation), the Company shall obtain shareholder approval of any Plan
amendment in such a manner and to such a degree as required.
(b) Effect of Amendment or Termination. Any such
amendment or termination of the Plan shall not affect Options or Rights already
granted and such Options and Rights shall remain in full force and effect as if
this Plan had not been amended or terminated.
15. Conditions Upon Issuance of Shares. Shares shall not be
issued with respect to an Option or Right unless the exercise of such Option or
Right and the issuance and delivery of such Shares pursuant thereto shall
comply with all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the Shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
As a condition to the exercise of an Option or the issuance of
Shares on exercise of an Option or Right, the Company may require the person
exercising such Option or Right to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of
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counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law.
16. Reservation of Shares. The Company, during the term of this
Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.
Inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares
hereunder, shall relieve the Company of any liability in respect of the
non-issuance or sale of such Shares as to which such requisite authority shall
not have been obtained.
17. Agreements. Options and Rights shall be evidenced by written
agreements in such form as the Board shall approve from time to time.
18. Shareholder Approval. Continuance of the Plan shall be
subject to approval by the shareholders of the Company within twelve (12)
months before or after the date the Plan is adopted as provided in Section 6.
Such shareholder approval shall be obtained in the degree and manner required
under applicable state and federal law.
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<PAGE> 1
Exhibit 4.3
ADAPTEC, INC.
STOCK OPTION AGREEMENT
1. GRANT OF OPTION. The Plan Administrator of Adaptec, Inc., a
California corporation (the "Company"), hereby grants to the Optionee named in
the Notice of Grant ( the "Optionee"), an option (the "Option") to purchase a
total number of shares of Common Stock (the "Shares") set forth in the Notice
of Grant, at the exercise price per share set forth in the Notice of Grant (the
"Exercise Price") subject to the terms, definitions and provisions of the
Adaptec, Inc. 1990 Stock Plan (the "Plan") adopted by the Company, which is
incorporated herein by reference. Unless otherwise defined herein, the terms
defined in the Plan shall have the same defined meanings in this Option.
If designated an Incentive Stock Option, this Option is intended
to qualify as an Incentive Stock Option as defined in Section 422 of the Code.
2. EXERCISE OF OPTION. This Option shall be exercisable during its
term in accordance with the Exercise Schedule set out in the Notice of Grant
and with the provisions of Section 8 of the Plan as follows:
(i) RIGHT TO EXERCISE.
(a) Subject to subsection 2(i)(b) below, this Option
shall be exercisable cumulatively as follows:
[Vesting Provisions]
(b) This Option may not be exercised for a fraction of
a share.
(c) In the event of Optionee's death, disability or
other termination of employment, the exercisability of the Option is governed
by Sections 7, 8 and 9 below, subject to the limitation contained in subsection
2(i)(d).
(d) In no event may this Option be exercised after the
date of expiration of the term of this Option as set forth in the Notice of
Grant.
(ii) METHOD OF EXERCISE. This Option shall be exercisable by
written notice which shall state the election to exercise the Option, the
number of Shares in respect of which the Option is being exercised, and such
other representations and agreements as to the Optionee's investment intent
with respect to such shares of Common Stock as may be required by the Company
pursuant to the provisions of the Plan. Such written notice shall be signed by
the Optionee and shall be delivered in person or by certified mail to the
Secretary of the Company. The written notice shall be accompanied by payment
of the exercise price. This Option shall be deemed to be exercised upon
receipt by the Company of such written notice accompanied by the Exercise
Price.
<PAGE> 2
No shares will be issued pursuant to the exercise of an
Option unless such issuance and such exercise shall comply with all relevant
provisions of law and the requirements of any stock exchange upon which the
Shares may then be listed. Assuming such compliance, for income tax purposes
the Shares shall be considered transferred to the Optionee on the date on which
the Option is exercised with respect to such Shares.
3. OPTIONEE'S REPRESENTATIONS. In the event the Shares
purchasable pursuant to the exercise of this Option have not been registered
under the Securities Act of 1933, as amended, at the time this Option is
exercised, Optionee shall, if required by the Company, concurrently with the
exercise of all or any portion of this Option, deliver to the Company his
Investment Representation Statement.
4. METHOD OF PAYMENT. Payment of the Exercise Price shall be
by any of the following, or a combination thereof, at the election of the
Optionee:
i. cash;
ii. check;
iii. surrender of other shares of Common Stock of the
Company which (A) either have been owned by the Optionee for more than six (6)
months on the date of surrender or were not acquired, directly or indirectly,
from the Company and (B) have a fair market value on the date of surrender
equal to the Exercise Price of the Shares as to which the Option is being
exercised; or
iv. delivery of a properly executed exercise notice
together with irrevocable instructions to a broker to promptly deliver to the
Company the amount of sale of loan proceeds required to pay the exercise price.
5. RESTRICTIONS ON EXERCISE. This Option may not be exercised
until such time as the Plan has been approved by the shareholders of the
Company, or if the issuance of such Shares upon such exercise or the method of
payment of consideration for such shares would constitute a violation of any
applicable federal or state securities or other law or regulation, including
any rule under Part 207 of Title 12 of the Code of Federal Regulations
("Regulation G") as promulgated by the Federal Reserve Board. As a condition
to the exercise of this Option, the Company may require Optionee to make any
representation and warranty to the Company as may be required by any applicable
law or regulation.
6. SECTION 16 RESTRICTIONS. Shares purchased upon exercise of
options granted to persons who are subject to Section 16 of the Exchange Act
("Insiders") may not be resold for a period of at least six (6) months from the
date of grant, except in the case of termination as a result of death or
disability.
7. TERMINATION OF RELATIONSHIP. In the event Optionee's Continuous
Status as an Employee or Consultant terminates, Optionee may, to the extent
otherwise so entitled at the date of such termination (the "Termination Date"),
exercise this Option for a period of ninety (90) days after the Termination
Date. To the extent that Optionee was not entitled to exercise this Option at
the date of such termination, or if Optionee does not exercise this Option
within the time specified herein, the Option shall terminate.
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<PAGE> 3
8. DISABILITY OF OPTIONEE. Notwithstanding the provisions of
Section 7 above, in the event Optionee's Continuous Status as an Employee or
Consultant terminates as a result of total and permanent disability (as defined
in Section 22(e)(3) of the Code), Optionee may, but only within six (6) months
from the date of termination of employment or consultancy (but in no event
later than the date of expiration of the term of this Option as set forth in
Section 11 below), exercise the Option to the extent otherwise so entitled at
the date of such termination. To the extent that Optionee was not entitled to
exercise the Option at the date of termination, or if Optionee does not
exercise such Option (to the extent otherwise so entitled) within the time
specified herein, the Option shall terminate.
9. DEATH OF OPTIONEE. The Option may be exercised at any time
within six (6) months after the Optionee's death (but in no event later than
the date of expiration of the term of the Option as set forth in Section 11
below) by the Optionee's estate or by a person who acquires the right to
exercise the Option by bequest or inheritance. At such time the Option shall
be exercisable, in addition to Shares for which the Option was otherwise
exercisable on the date of death, for the lesser of the full number of Shares
covered by the Option or 50,000 Shares; provided, however, that if on the date
of death the Optionee holds more than one Option, the number of additional
Shares for which such Options shall become exercisable pursuant to this Section
9 shall not exceed in the aggregate more than 50,000 Shares.
10. NON-TRANSFERABILITY OF OPTION. This Option may not be
transferred or assigned in any manner otherwise than by will or by the laws of
descent or distribution and may be exercised during the lifetime of Optionee
only by him or her. The terms of this Option shall be binding upon the
executors, administrators, heirs, successors and assigns of the Optionee.
11. TERM OF OPTION. This Option may be exercised only within ten
(10) years of the date of grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option.
12. TAX CONSEQUENCES. Set forth below is a brief summary as of the
date of this Option of some of the federal tax consequences of exercise of this
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(i) EXERCISE OF ISO. If this Option qualifies as an ISO,
there will be no regular federal income tax liability upon the exercise of the
Option, although the excess, if any, of the fair market value of the Shares on
the date of exercise over the Exercise Price will be treated as an adjustment
to the Optionee's alternative minimum taxable income for federal tax purposes
and may subject the Optionee to the alternative minimum tax.
(ii) EXERCISE OF NONQUALIFIED STOCK OPTION. If this Option
does not qualify as an ISO, there may be a regular federal income tax liability
upon the exercise of the Option. The Optionee will be treated as having
received compensation income (taxable at ordinary income tax rates) equal to
the excess, if any, of the fair market value of the Shares on the date of
exercise over the Exercise Price. If Optionee is an employee, the Company will
be required to withhold from
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<PAGE> 4
Optionee's compensation or collect from Optionee and pay to the applicable
taxing authorities an amount equal to a percentage of this compensation income
at the time of exercise.
(iii) DISPOSITION OF SHARES. In the case of an NSO, if Shares
are held for at least one year, any gain realized on disposition of the Shares
will be treated as long-term capital gain for federal income tax purposes. In
the case of an ISO, if Shares transferred pursuant to the Option are held for
at least one year after exercise and are disposed of at least two years after
the Date of Grant, any gain realized on disposition of the Shares will also be
treated as long-term capital gain for federal income tax purposes. If Shares
purchased under an ISO are disposed of within such one year period or within
two years after the Date of Grant, any gain realized on such disposition will
be treated as compensation income (taxable at ordinary income rates) to the
extent of the excess, if any, of the fair market value of the Shares on the
date of exercise over the Exercise Price.
(iv) NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES. If
the Option granted to Optionee herein is an ISO, and if Optionee sells or
otherwise disposes of any of the Shares acquired pursuant to the ISO on or
before the later of (1) the date two years after the Date of Grant, or (2) the
date one year after transfer of such Shares to the Optionee upon exercise of
the ISO, the Optionee shall immediately notify the Company in writing of such
disposition. Optionee agrees that Optionee may be subject to income tax
withholding by the Company on the compensation income recognized by the
Optionee from the early disposition by payment in cash or out of the current
earnings paid to the Optionee.
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT
TO THE OPTION HEREOF IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT
THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS
OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND
AGREES THAT NOTHING IN THIS OPTION, NOR IN THE COMPANY'S 1990 STOCK PLAN WHICH
IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH
RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR SHALL
IT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO
TERMINATE OPTIONEE'S EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT
CAUSE.
Optionee acknowledges receipt of a copy of the Plan and certain
information related thereto and represents that he or she is familiar with the
terms and provisions thereof, and hereby accepts this Option subject to all of
the terms and provisions of the Plan. Optionee has reviewed the Plan and this
Option in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Option and fully understands all provisions
relating, to this Option. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Board upon any
questions arising under the Plan or this Option.
4
<PAGE> 5
ADAPTEC, INC.
INCENTIVE STOCK RIGHT AGREEMENT
Adaptec, Inc., a California corporation (the "Company"), hereby grants
to [NAME] (the "Grantee") [NUMBER OF UNITS] incentive stock units ("ISUs") on
[DATE OF GRANT] that will vest on [DATE VESTING COMMENCES] and will expire on
[DATE OF EXPIRATION] pursuant to this incentive stock right agreement (the
"Agreement").
1. Terms of the Agreement. The Agreement is subject to all the
terms, definitions and provisions of the Company's 1990 Stock Plan (the
"Plan"), incorporated herein by reference. Unless otherwise defined herein,
the terms defined in the Plan shall have the same defined meanings in this
Agreement.
2. Incentive Stock Units. Each ISU shall entitle the Grantee to
receive the cash equivalent of one share of Common Stock, subject to the
vesting of the ISU upon the lapse of the incentive period (as provided in
Section 3 below).
3. Incentive Period. Subject to Section 6 below, ISUs shall vest
and become payable subject to the lapse of one, two (2) year incentive period.
The incentive period shall lapse (and the ISUs shall vest and become payable)
as to fifty percent (50%) of the ISUs granted hereby on each anniversary of the
date of this Agreement.
4. Payment of Cash Equivalent. As the ISUs vest upon the lapse
of the incentive period, the Company shall pay the Grantee the cash equivalent
of a number of shares of Common Stock equal to the number of ISUs which have so
vested.
5. Nonassignability of ISUs. No ISU awarded under this Agreement
shall be assignable or transferable by the Grantee except by will or by the
laws of descent and distribution and as otherwise consistent with the terms of
the Plan and this Agreement. During the life of the Grantee, only the Grantee
shall be entitled to receive the benefits of the ISU.
6. Termination of Employment.
(a) Termination Due to Death or Disability. In the event
that the Grantee's Continuous Status as an Employee or Consultant terminates
due to death or Disability, the incentive period during which such termination
occurs shall lapse as to the ISUs that otherwise would have become payable at
the end of such incentive period. Thus, for example, if termination occurs
nine (9) months from the date of this Agreement, and ISUs granted hereby vest
in two equal annual installments, one half of the ISUs shall vest upon such
termination. ISUs that have not vested prior to such termination and that do
not vest pursuant to this paragraph shall terminate.
<PAGE> 6
(b) Termination for any Other Reason. In the event that
the Grantee's Continuous Status as an Employee or Consultant terminates for any
reason other than death or Disability (including dismissal by the Company with
or without cause), unvested ISUs held by the Grantee shall terminate on the
date of such termination.
(c) Leave of Absence, Other. The Grantee shall not be
deemed to terminate Continuous Status as an Employee or Consultant or cause a
break in the incentive period in the event of (1) transfer between the Company
and any Subsidiary, or from one Subsidiary to another, or (2) a leave of
absence duly authorized by the Company. In the event of an authorized leave of
absence, the Administrator may make such provision respecting continuance of
the ISU during the leave period as it may deem appropriate.
(d) Right to Terminate. Nothing in this Agreement shall
affect in any manner whatsoever the right or power of the Company to terminate
the Grantee's employment or consultancy with the Company for any reason, with
or without cause. Nothing in this Agreement constitutes an express or implied
promise of continued employment for the incentive period or for any period at
all.
7. Dividend Equivalents. The Grantee shall be entitled to
receive from the Company cash payments at the same time and in the same amounts
that the holder of record of a number of shares of Common Stock equal to the
number of ISUs herein awarded would be entitled to receive as dividends on such
Common Stock. The right under this Agreement to cash payment on an ISU shall
apply to all dividends for which the record date occurs during the period
commencing on the date of this Agreement and ending on the date that the
Grantee receives payment of a cash equivalent of a share of Common Stock as a
result of the lapse of an incentive period, or the date the ISU terminates,
whichever occurs first.
8. Rights as a Shareholder. Other than as described in Section 7
above, the Grantee shall have no rights as a shareholder with respect to any
shares covered by an ISU.
9. Federal Income Tax Consequences. Grantee understands that
upon vesting of ISUs subject to this Agreement, the Grantee will recognize as
income for federal income tax purposes an amount equal to the fair market value
of the ISUs. Grantee is encouraged to consult with a tax advisor concerning
the tax consequences of the receipt of cash pursuant to this Agreement.
10. Withholding Taxes. Payments shall be net of an amount
sufficient to satisfy Federal, state and local withholding tax requirements.
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<PAGE> 7
ADAPTEC, INC.,
a California corporation
By:
----------------------------------
President
Grantee acknowledges receipt of a copy of the Plan and represents that
he or she is familiar with the terms and provisions thereof, and hereby accepts
this Agreement subject to all of the terms and provisions of the Plan. Grantee
has reviewed the Plan and this Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Agreement
and fully understands all provisions relating to this Agreement. Grantee
hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Administrator upon any questions arising under the Plan
or this Agreement.
Dated: ____________________
---------------------------------
Grantee
-3-
<PAGE> 1
EXHIBIT 5.1
February 6, 1996
Adaptec, Inc.
691 South Milpitas Boulevard
Milpitas, California 95035
RE: REGISTRATION STATEMENT ON FORM S-8
Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed by
Adaptec, Inc. (the "Company") with the Securities and Exchange Commission on or
about February 1, 1996 (the "Registration Statement") in connection with the
registration under the Securities Act of 1933, as amended, of 2,193,900
additional shares of Common Stock (the "Shares") reserved for issuance under
the 1990 Stock Plan (the "Plan"). As your counsel, we have examined the
proceedings taken and are familiar with the proceedings proposed to be taken by
you in connection with said issuance and sale of the Shares pursuant to the
Plan.
It is our opinion that, upon completion of the proceedings being taken
or contemplated by us to be taken prior to the issuance and sale of the Shares
pursuant to the Plan, and upon completion of the proceedings being taken in
order to permit such transaction to be carried out in accordance with the
securities laws of the various states where required, the Shares, when issued
and sold in the manner referred to in the Plan and the Registration Statement,
will be legally and validly issued, fully-paid and non-assessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement, and further consent to the use of our name wherever
appearing in the Registration Statement, including the prospectus constituting
a part thereof, and any amendments thereto.
Very truly yours,
WILSON, SONSINI, GOODRICH & ROSATI
Professional Corporation
/s/ Wilson Sonsini Goodrich & Rosati
