<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 30, 1998
REGISTRATION NO. 333-_____________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
------------
GIGA-TRONICS INCORPORATED
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-2656341
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
4650 NORRIS CANYON ROAD
SAN RAMON, CALIFORNIA 94583
(Address of Principal Executive Offices) (Zip Code)
----------------------
ULTRACISION, INC. 1986 INCENTIVE STOCK OPTION PLAN
ULTRACISION, INC. 1987 INCENTIVE STOCK OPTION PLAN
ASSUMED BY GIGA-TRONICS INCORPORATED
(Full title of the Plan)
----------------------
GEORGE H. BRUNS, JR.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
GIGA-TRONICS INCORPORATED
4650 NORRIS CANYON ROAD, SAN RAMON, CALIFORNIA 94583
(Name and Address of Agent for Service)
(510) 328-4650
(Telephone number, including area code, of agent for service)
----------------------
CALCULATION OF REGISTRATION FEE
================================================================================
<TABLE>
<CAPTION>
Title of Amount to be Proposed Maximum Proposed Maximum Amount of
Securities to be Registered(1) Offering Price Aggregate Registration Fee
Registered per Share(2) Offering Price(2)
<S> <C> <C> <C> <C>
Common Stock, no 56,370 shares $6.625 $373,451.25 $113.17
par value
</TABLE>
================================================================================
(1) Of the shares (the "Shares") of Giga-tronics Incorporated Common Stock
registered hereunder, 15,032 Shares are issuable upon exercise of
options granted under the Ultracision, Inc. 1986 Incentive Stock Option
Plan and 41,338 Shares are issuable upon exercise of options granted
under the Ultracision, Inc. 1987 Incentive Stock Option Plan, assumed by
Giga-tronics Incorporated as of December 2, 1997. This Registration
Statement shall also cover any additional shares of Common Stock which
become issuable by reason of any stock dividend, stock split,
recapitalization or other similar transaction effected without the
receipt of consideration which results in an increase in the number of
the outstanding shares of Common Stock.
(2) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, on the basis of the average of the
high and low selling prices per share of Common Stock of Giga-tronics
Incorporated on March 26, 1998, as reported on the Nasdaq National
Market.
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
Giga-tronics Incorporated (the "Registrant") hereby incorporates by
reference into this Registration Statement the following documents previously
filed with the Securities and Exchange Commission (the "SEC"):
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended March 29, 1997;
(b) The Registrant's Quarterly Reports on Form 10-Q for the
fiscal quarters ended June 28, 1997, September 27, 1997
and December 27, 1997;
(c) The Registrant's Current Report on Form 8-K dated December
2, 1997 (as amended by the Form 8-K/A filed with the SEC
on February 17, 1998); and
(d) The Registrant's Registration Statement No. 0-12719 on
Form 8-A filed with the SEC on July 27, 1984, in which
there is described the terms, rights and provisions
applicable to the Registrant's outstanding Common Stock.
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act") after the date of this Registration Statement
and prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
then remaining unsold shall be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof from the date of filing of 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
Sections 204 and 317 of the California General Corporation Law and the
Registrant's Bylaws contain provisions authorizing the indemnification of
corporate directors and officers against certain liabilities and expenses
incurred in connection with proceedings involving such
II-1
<PAGE> 3
persons in their capacities as directors and officers, including proceedings
under the Securities Act of 1933, as amended (the "1933 Act") or the 1934 Act.
Section 29 of the Registrant's Bylaws requires the Registrant to
indemnify all directors and officers to the fullest extent permitted by
California law and also provides for the advancement of expenses to officers and
directors in connection with their defense of civil or criminal proceedings upon
the written undertaking of the director or officer to repay the advance in the
event it is ultimately determined that such individual is not entitled to
indemnification under the California General Corporation Law.
In addition, the Registrant has entered into supplemental
indemnification agreements with its directors which broaden the scope of
indemnity beyond that expressly provided by the Bylaws and the California
General Corporation Law. These supplemental contracts are permissible under
California General Corporation Law and have been approved by the Registrant's
shareholders. The agreements provide the directors with indemnification to the
fullest possible extent permitted by law against all expenses (including
attorney fees), judgments, fines and settlement amounts incurred or paid by them
in any action or proceeding (including any action by or in the right of the
Registrant) by reason of their service either as a director, officer, employee
or agent of the Registrant or, at the Registrant's request, as a director,
officer, agent or employee of another company, partnership, joint venture, trust
or other enterprise. However, no indemnity will be provided to any director with
respect to conduct which is adjudged to be knowingly fraudulent, deliberately
dishonest or to constitute willful misconduct.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<S> <C>
4 Instruments Defining Rights of Shareholders. Reference is made to
Registrant's Registration Statement No. 0-12719 on Form 8-A which
incorporated herein by reference pursuant to Item 3(c).
5 Opinion and consent of Gibson, Dunn & Crutcher LLP.
23.1 Consent of Independent Auditors - KPMG Peat Marwick.
23.2 Consent of Gibson, Dunn & Crutcher is contained in Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 Ultracision, Inc. 1986 Stock Option Plan.
99.2 Ultracision, Inc. 1987 Stock Option Plan.
99.3 Ultracision, Inc. Form of Incentive Stock Option Agreement, as
Amended by the Assumed Option Agreement.
</TABLE>
II-2
<PAGE> 4
ITEM 9. UNDERTAKING
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 1933 Act, (ii) to reflect in the prospectus any facts or events
arising after the effective date of this 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 this
Registration Statement, and (iii) 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; provided, however, that clauses (1)(i) and (l)(ii) shall
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 Section 15(d) of the 1934 Act that are
incorporated by reference into this Registration Statement; (2) that for the
purpose of determining any liability under the 1933 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, and
(3) to remove from registration by means of a posteffective amendment any of the
securities being registered which remain unsold upon the termination of the
Registrant's Employee Stock Purchase Plan.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is
incorporated by reference into this 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 1933 Act
may be permitted to directors, officers or controlling persons of the Registrant
pursuant to the indemnity provisions incorporated by reference in Item 6, or
otherwise, the Registrant has been informed that in the opinion of the SEC such
indemnification is against public policy as expressed in the 1933 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 1933 Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on
II-3
<PAGE> 5
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 Ramon,
State of California, on this 30th day of March, 1998.
GIGA-TRONICS INCORPORATED
By: /s/George H. Bruns, Jr.
------------------------------------
George H. Bruns, Jr.
Chairman and Chief Executive Officer
and Director
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of Giga-tronics Incorporated, a
California corporation, do hereby constitute and appoint George H. Bruns, Jr.
and Mark H. Cosmez, II, and each of them, the lawful attorneys-in- fact and
agents with full power and authority to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, and either one
of them, determine may be necessary or advisable or required to enable said
corporation to comply with the Securities Act of 1933, as amended, and any rules
or regulations or requirements of the Securities and Exchange Commission in
connection with this Registration Statement. Without limiting the generality of
the foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
that all said attorneys and agents, or either of them, shall do or cause to be
done by virtue hereof. This Power of Attorney may be signed in several
counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
II-4
<PAGE> 6
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/George H. Bruns, Jr. Chairman and Chief Executive March 20, 1998
- ----------------------- Officer and Director (Principal
George H. Bruns, Jr. Executive Officer)
/s/Mark H. Cosmez, II Vice President of Finance/Chief March 20, 1998
- ----------------------- Financial Officer (Principal
Mark H. Cosmez, II Financial Officer and Principal
Accounting Officer)
/s/James A. Cole Director March 25, 1998
- -----------------------
James A. Cole
/s/Edward D. Sherman Director March 23, 1998
- -----------------------
Edward D. Sherman
/s/Robert C. Wilson Director March 24, 1998
- -----------------------
Robert C. Wilson
</TABLE>
II-5
<PAGE> 7
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
GIGA-TRONICS INCORPORATED
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<S> <C>
4 Instruments Defining Rights of Shareholders. Reference is made to
Registrant's Registration Statement No. 0-12719 on Form 8-A which is
incorporated herein by reference pursuant to Item 3(c).
5 Opinion and consent of Gibson, Dunn & Crutcher LLP.
23.1 Consent of Independent Auditors - KPMG Peat Marwick.
23.2 Consent of Gibson, Dunn & Crutcher LLP is contained in Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this Registration
Statement.
99.1 Ultracision, Inc. 1986 Stock Option Plan.
99.2 Ultracision, Inc. 1987 Stock Option Plan.
99.3 Ultracision, Inc. Form of Incentive Stock Option Agreement, as Amended
by the Assumed Option Agreement.
</TABLE>
<PAGE> 1
EXHIBIT 5
[Letterhead of Gibson, Dunn & Crutcher LLP]
C35517-00002
March 30, 1998
Giga-tronics Incorporated
4650 Norris Canyon Road
San Ramon, CA 94583
Re: Registration Statement on Form S-8 of Giga-tronics Incorporated
Ladies and Gentlemen:
We refer to the registration statement on Form S-8 ("Registration
Statement"), under the Securities Act of 1933, as amended (the "Securities Act")
filed by Giga-tronics Incorporated, a California corporation (the "Company"),
with respect to the proposed offering by the Company of up to 56,370 shares (the
"Shares") of the common stock of the Company, no par value per share (the
"Common Stock") subject to options under the Ultracision, Inc. 1986 Incentive
Stock Option Plan and the Ultracision, Inc. 1987 Incentive Stock Option Plan
(the "Plans") assumed by the Company.
We have examined the originals or certified copies of such corporate
records, certificates of officers of the Company and/or public officials and
such other documents and have made such other factual and legal investigations
as we have deemed relevant and necessary as the basis for the opinions set forth
below. In such examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, the conformity
to original documents of all documents submitted to us as conformed or
photostatic copies and the authenticity of the originals of such copies.
Based on our examination mentioned above, subject to the assumptions
stated above and relying on the statements of fact contained in the documents
that we have examined, we are of the opinion that (i) the issuance by the
Company of the Shares has been duly authorized for issuance and (ii) when issued
in accordance with the terms of the Plans, the Shares will be duly and validly
issued, fully paid and non-assessable shares of Common Stock.
This opinion is limited to California and United States federal law.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not admit that we are
within the category of persons whose consent is required under Section 7 of the
Securities Act or the General Rules and Regulations of the Securities and
Exchange Commission.
Very truly yours,
/s/ GIBSON, DUNN & CRUTCHER LLP
Exhibit 5
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Giga-tronics Incorporated:
We consent to incorporation by reference herein of our report dated
April 18, 1997, except as to Note 11, which is as of June 6, 1997, relating to
the consolidated balance sheets of Giga-tronics Incorporated and subsidiaries as
of March 29, 1997, and March 30, 1996, and the related consolidated statements
of operations, shareholders' equity, and cash flows for the years ended March
29, 1997, March 30, 1996, and March 25, 1995, and of our report dated June 9,
1997, relating to the financial statement schedule, which reports appear or are
incorporated by reference in the March 29, 1997, annual report on Form 10-K of
Giga-tronics Incorporated.
Mountain View, California /s/ KPMG Peat Marwick LLP
March 26, 1998
Exhibit 23.1
<PAGE> 1
EXHIBIT 99.1
ULTRACISION, INC.
1986 INCENTIVE STOCK OPTION PLAN
1. PURPOSE OF THE PLAN
This Incentive Stock Option plan (hereinafter called the "Plan") for
ULTRACISION, INC. (hereinafter called the "Company") is intended to advance the
interests of the Company by providing officers and other key employees who have
substantial responsibility for the direction and management of the Company with
additional incentive for them to promote the success of the business, to
increase their proprietary interest in the success of the Company, and to
encourage them to remain in its employ. The above aims will be effectuated
through the granting of certain stock options. It is intended that options
issued under the Plan and designated by the Committee under Section 3(b) will
qualify as Incentive Stock Options (hereinafter called "ISOs") under Section
422A of the Internal Revenue Code as enacted by the Economic Recovery Tax Act of
1981 and the terms of the Plan shall be interpreted in accordance with this
intention.
2. ADMINISTRATION OF THE PLAN
The Board of Directors shall appoint a Stock Option Plan Committee
(hereinafter called the "Committee") which shall consist of three members, at
least one of whom shall be a Director of the Company. Subject to the provisions
of the Plan, the Committee shall have plenary authority, in its discretion: (a)
to determine the employees of the Company (from among the class of employees
eligible under Section 3 to receive options under the Plan) to whom options
shall be granted; (b) to determine the time or times at which options shall be
granted; (c) to determine the option price of the shares subject to each option,
which price shall not be less than the minimum specified in Section 5; (d) to
determine (subject to Section 7) the time or times when each option shall become
exercisable and the duration of the exercise period; and (e) to interpret the
Plan and to prescribe, amend, and rescind rules and regulations relating to it.
The Committee shall select one of its members as its Chairman and shall hold its
meetings at such times and places as it shall deem advisable. All action of the
Committee shall be taken by unanimous vote of its members. Any action may be
taken by a written instrument signed by all the members of the Committee, and
action so taken shall be fully as effective as if it had been taken by a
unanimous vote of the members at a meeting duly called and held. The Committee
may appoint a secretary to keep minutes of its meetings and shall make such
rules and regulations for the conduct of its business as it shall deem
advisable.
3. ELIGIBILITY AND LIMITATIONS ON OPTIONS GRANTED UNDER THE PLAN
(a) Options will be granted only to persons who are key employees
of the Company. The term "key employees" shall include officers, directors,
executives, and supervisory personnel, as well as other employees of the
Company.
Exhibit 99.1
Page 1
<PAGE> 2
(b) At the time of the grant of each option under this Plan, the
Committee shall determine whether such option is to be designated as an ISO. If
an option is to be so designated as an ISO, then the provisions of Section 7(d)
of this Plan shall be made applicable to such option. In addition, no option
granted to any employee, who at the time of such grant, owns stock possessing
more than 10 percent of the total combined voting power of all classes of stock
of the Company, may be designated as an ISO, unless at the time of such grant,
the option price is fixed at not less than 110 percent of the fair market value
of the stock subject to the option, and exercise of such option is prohibited by
its terms after the expiration of five (5) years from the date such option is
granted.
(c) the aggregate fair market value of the stock for which any
employee may be granted options designated as ISOs in any calendar year (under
this or any other stock option plan established by the Company or a subsidiary
corporation of the Company) shall not exceed $100,000 plus any unused limit
carryover (as defined in 3(d) hereof) to such year from any prior calendar year
beginning on or after January 1, 1981.
(d) The unused limit carryover from any such calendar year shall
be one-half of any excess of $100,000 over the aggregate fair market value of
the stock for which an employee was granted options that qualify (whether from
their issuance or as a result of subsequent amendment and election by the
Company) as ISOs in any such calendar year (under this and all other stock
option plans established by the Company. The unused limit for any calendar year
shall be carried forward for three (3) years. ISOs granted in any year shall be
applied against the current year limitation first and then against the remaining
unused limit carryovers to such year in the order of the calendar year in which
the carryovers arose.
4. SHARES OF STOCK SUBJECT TO THE PLAN
There will be reserved for use upon the exercise of options to be
granted from time to time under the Plan (subject to the provisions of Section
12) an aggregate of 75,000 shares of the Common Stock of the Company, which
shares may be (in whole or in part, as the Board of Directors of the Company,
hereinafter called the "Board" shall from time to time determine,) authorized
but unissued shares of the Common Stock which shall have been reacquired by the
Company. Any shares subject to an option under the Plan, which option for any
reason expires or is terminated unexercised as to such shares, may again be
subjected to an option under the Plan.
5. OPTION PLAN
The purchase price under each option issued shall be determined by the
Committee at the time the option is granted, but in no event shall such purchase
price be less than 100 percent of the fair market value of the Company's Common
Stock on the date of grant.
The term "fair market value" shall be determined in the opinion of a
completely independent and well qualified expert. Amounts treated as unstated
interest under Internal Revenue Code Section 483 are not to be included as part
of the option price.
Exhibit 99.1
Page 2
<PAGE> 3
6. DILUTION OR OTHER AGREEMENT
In the event that additional shares of Common Stock are issued pursuant
to a stock split or a stock dividend, the number of shares of Common Stock then
covered by each outstanding option granted hereunder shall be increased
proportionately with no increase in the total purchase price of the shares then
so covered, and the number of shares of Common Stock reserved for the purpose of
the Plan shall be increased by the same proportion. In the event that the shares
of Common Stock of the Company from time to time issued and outstanding are
reduced by a combination of shares, the number of shares of Common Stock then
covered by each outstanding option granted hereunder shall be reduced
proportionately, with no reduction in the total price of the shares then so
covered, and the number of shares of Common Stock reserved for the purposes of
the Plan shall be reduced by the same proportion. In the event that the Company
should transfer assets to another corporation and distribute the stock of such
other corporation without the surrender of Common Stock of the Company, and if
such distribution is not taxable as a dividend and no gain or loss is recognized
by reason of Section 355 of the Internal Revenue Code of 1954, or some similar
section, then the total purchase price of the shares covered by each outstanding
option shall be reduced by an amount which bears the same ratio to the total
purchase price then in effect as the market value of the stock distributed in
respect of a share of the Common Stock of the Company, immediately following the
distribution, bears to the aggregate of the market value at such time of a share
of the Common Stock of the Company and the stock distributed in respect thereof.
All such adjustments shall be made by the Committee, whose determination upon
the same shall be final and binding upon the optionees. No fractional shares
shall be issued, and any fractional shares resulting from the computations
pursuant to this Section 6 shall be eliminated from the respective option. No
adjustment shall be made for cash dividends or the issuance to stockholders of
rights to subscribe for additional common Stock or other securities.
7. PERIOD OF OPTION AND CERTAIN LIMITATIONS ON RIGHT TO EXERCISE
(a) All options issued under the Plan shall be for such period as
the Committee shall determine, but for not more than ten (10) years from the
date of grant thereof.
(b) The period of the option, once it is granted, may be reduced
only as provided for in Section 9 in connection with the termination of
employment or death of the optionee or in Section 7(c) in the case of less than
satisfactory performance.
(c) Each option granted under this Plan shall become exercisable
only after two (2) years continued employment of the optionee with the Company
immediately following the date the option is granted. Any option designated as
an ISO shall be exercisable in full, or as to any part thereof, at any time
after the expiration of two (2) years following the date of such option is
granted, but only if the optionee chooses to exercise such option and to pay for
such option in the manner set forth in Section 7(e) hereof (i.e., in cash or
certified bank check or shares of the Company's Common Stock, or any combination
of the foregoing in an amount equal to the full option price of the shares being
purchased). Any option not designated as an ISO and any option designated as an
ISO that the optionee chooses to exercise in any manner other than that
permitted in the preceding sentence, shall be exercisable only to the extent of
one-
Exhibit 99.1
Page 3
<PAGE> 4
fifth of the total number of optioned shares after the expiration of two (2)
years following the date the option is granted only to the extent of two-fifths
of the total number of optioned shares after the expiration of three (3) years
following the date the option is granted, only to the extent of three-fifths of
the total number of optioned shares after the expiration of four (4) years
following the date the option is granted, only to the extent of four-fifths of
the total number of optioned shares after the expiration of five (5) years
following the date the option is granted, and in full only after the expiration
of six (6) years following the date the option is granted, such limitations
being calculated, in the case of any resulting fraction, to the nearest lower
whole number of shares. Notwithstanding the foregoing, the Committee may, in its
sole discretion, (i) prescribe longer time periods and additional requirements
with respect to the exercise of an option and (ii) terminate in whole or in part
such portion of any option as has not yet become exercisable at the time of
termination if it determines that the optionee is not performing satisfactorily
the duties to which he was assigned on the date the option was granted or duties
of at least equal responsibility. No option may be exercised unless the optionee
is at the time of such exercise in the employee of the Company and shall have
been continuously so employed since the grant of his option. Absence or leave
approved by the management of the Company shall not be considered an
interruption of employment for any purpose under the Plan.
(d) No option under this Plan designated by the Committee as an
ISO may be exercised while there is outstanding in the hands of the optionee any
ISO (whether granted under the Plan or any other stock option plan established
by the Company or a subsidiary corporation of the Company) which was granted
before the granting of the ISO hereunder sought to be exercised. For purposes of
this Section 7(d), any ISO shall be treated as outstanding until such option is
exercised in full or expires by reason of lapse of time.
(e) Subject to the alternative settlement methods set forth in
Section 7(h) hereof, the exercise of any option shall also be contingent upon
receipt by the Company of cash or certified bank check to its order, shares of
the Company's Common Stock, or any combination of the foregoing in an amount
equal to the full option price of the shares being purchased. For purposes of
this paragraph, shares of the Company's Common Stock that are delivered in
payment of the option price shall be valued at their fair market value
determined under the method set forth in Section 5 of this Plan applied as of
the date of the exercise of the option. However, in order to facilitate the
accumulation of funds to enable employees to exercise their option, they will
have the right, if they so elect, to direct the Company to withhold from their
compensation regular amounts to be applied toward the exercise of the options.
Funds credited to the stock option accounts will be under the control of the
Company until applied to the payment of the option price at the direction of the
employee or returned to the employee in the event the amount is not used for
purchase of shares under option, and all funds received or held by the Company
under the Plan may be used for any corporate purpose, and no interest shall be
payable to a participant on account of any amounts so held. Such amounts may be
withdrawn by the employee at any time, in whole or in part, for any reason.
(f) No optionee or his legal representative, legatees, or
distributees, as the case may be, will be, or will be deemed to be, a holder of
any- share subject to an option unless and until certificates for such shares
are issued to him or them under the terms of the Plan. No
Exhibit 99.1
Page 4
<PAGE> 5
adjustment shall be made for dividends or other rights for which the record date
is prior to the date such stock certificate is issued.
(g) In no event may an option be exercised after the expiration
of its term.
(h) As an alternative to payment in full by the optionee for the
number of shares of Common Stock in respect of which an option is exercised, the
Committee may provide alternative settlement methods as follows:
(1) The Committee, in its discretion, may provide in the
initial grant of any option, that the optionee may elect either of the
alternative settlement methods set forth in subsection (2) below.
(2) The alternative settlement methods are for the optionee,
upon exercise of the option, to receive from the Company: (A) cash in an amount
equal to the excess of the value of one share over the option price times the
number of shares as to which the option is exercised; or (B) the number of whole
shares of Common stock having an aggregate value not greater than the cash
amount calculated under Section 7(h) (2) (A). For purposes of determining an
alternative settlement, the value per share shall be the "fair market value"
determined under the method set forth in Section 5 hereof, applied as of the
date of the exercise of the option, or such other price as the Committee shall
determine to be the fair market value of the Common Stock on the date of
exercise.
(i) An election of any of the alternative settlement methods
provided for under Section 7 (h) (2) shall be binding on the optionee, when
made. The optionee may elect to what extent the alternative settlement method
elected shall be paid in cash, in Common Stock, or partially in Common Stock,
provided that the aggregate value of the payments shall not be greater than the
cash amount calculated under Section 7(h) (2) (A). No fractional shares of
Common Stock shall be issued, and the Committee shall determine whether cash
shall be paid in lieu of such fractional share interest or whether such
fractional share interest shall be eliminated.
(j) The alternative settlement methods provided above in Section
7(h) (2) shall not be available unless the cash amount calculated thereunder
shall be positive, i.e. when the value of one share shall exceed the option
price per share.
(k) Exercise of an option in any manner, including an exercise
involving an election of an alternative settlement method with respect to an
option, shall result in a decrease in the number of shares of Common Stock which
thereafter may be available under the Plan by the number of shares as to which
the option is exercised.
(l) To the extent that the exercise of options by one of the
alternative settlement methods provided for in Section (h) (2) results in
compensation income to the optionee, the Company will withhold from the amount
due to the optionee utilizing such alternative settlement method, an appropriate
amount for federal, state and local taxes.
Exhibit 99.1
Page 5
<PAGE> 6
8. ASSIGNABILITY
Each option granted under this Plan shall be transferable only by will
or the laws of descent and distribution. The option granted shall be exercisable
only by the employee to whom the option is granted during his lifetime. Except
as permitted by the preceding sentence, no option granted under the Plan or any
of the rights and privileges thereby conferred shall be transferred, assigned,
pledged, or hypothecated in any way (whether by operation of law or otherwise),
and no such option, right, or privilege shall be subject to execution,
attachment, or similar process. Upon any attempt so to transfer, assign, pledge,
hypothecate, or otherwise dispose of the option, or of any right or privilege
conferred thereby, contrary to the provisions hereof, or upon the levy of any
attachment or similar process upon such option, right or privilege, the option
and such rights and privileges shall immediately become null and void.
9. EFFECT OF TERMINATION OF EMPLOYMENT, DEATH OR DISABILITY
(a) In the event of the termination of employment of an optionee
during the two (2) year period under the date of issuance of an option to him
either by reason of (i) a discharge for cause or (ii) voluntary separation on
the part of the optionee and without consent of his employing company or
companies, any option or options theretofore granted to him under this Plan to
the extent not theretofore exercised by him shall forthwith terminate.
(b) In the event of the termination of employment of an optionee
(otherwise than by reason of death or retirement of the optionee at his
Retirement Date by the Company employing the optionee at such time), any option
or options granted to him under the Plan to the extent not theretofore exercised
shall be deemed canceled and terminated forthwith, except that, subject to the
provisions of section (a) of this Section, such optionee may exercise any
options theretofore granted to him, which have not then expired and which are
otherwise exercisable within the provisions of Section 7(c) hereof, within three
(3) months after such termination. If the employment of an optionee shall be
terminated by reason of the optionee's retirement at his Retirement Date by the
Company employing the optionee at such time, the optionee shall have the right
to exercise such option or options held by him to the extent that such options
have not expired, at any time within three (3) months after such retirement. The
provisions of Section 7(c) to the contrary notwithstanding, upon retirement, all
options held by optionee shall be immediately exercisable in full.
(c) In the event that an optionee shall die while employed by the
Company or shall die within three (3) months after retirement at his Retirement
Date, any option or options granted to him under this Plan and not theretofore
exercised by him or expired shall be exercisable by the estate of the optionee
or by any person who acquired such option by bequest or inheritance from the
optionee in full, notwithstanding Section 7(c) at any time within one (1) year
after the death of the optionee. References hereinabove to the optionee shall be
deemed to include any person entitled to exercise the option after the death of
the optionee under the terms of this Section.
(d) In the event of the termination of employment of an optionee
by reason of the optionee's disability, the optionee shall have the right,
notwithstanding the provisions of
Exhibit 99.1
Page 6
<PAGE> 7
Section 7(c) hereof, to exercise all options held by him to the extent that
options have not previously expired or been exercised, at any time within one
(1) year after such termination. The term "disability" shall, for the purposes
of this Plan, be defined in the same manner as such term is defined in Section
105(d) (4) of the Internal Revenue Code of 1954.
(e) For the purposes of this Plan, "Retirement Date" shall mean
any date an employee is otherwise entitled to retire under the Company's
retirement plans and shall include normal retirement at age 65, early retirement
at age 62, and retirement at age 60 after 30 years of service.
10. LISTING AND REGISTRATION OF SHARES
Each option shall be subject to the requirement that if at any time the
Stock Option Committee shall determine, in its discretion, that the listing,
registration, or qualification of the shares covered thereby upon any securities
exchange or under any state or federal law or the consent or approval of any
governmental regulatory body, is necessary or desirable as a condition of, or in
connection with, the granting of such option or the issue or purchase of shares
thereunder, such option may not be exercised in whole or in part unless and
until such listing, registration, qualification, consent, or approval shall have
been effected or obtained free of any conditions not acceptable to the
Committee.
11. EXPIRATION AND TERMINATION OF THE PLAN
Options may be granted under the Plan at any time or from time to time
as long as the total number of shares optioned or purchased under this Plan does
not exceed 75,000 shares of Common Stock. The Plan may be abandoned or
terminated at any time by the Board of Directors of the Company except with
respect to any options then outstanding under the Plan. No option shall be
granted pursuant to the Plan after ten (10) years from the effective date of the
Plan.
12. AMENDMENT OF PLAN
The Board of Directors may at any time and from time to time modify and
amend the Plan (including such form of option agreement) in any respect;
provided, however, that no such amendment shall: (a) increase (except in
accordance with Section 6) the maximum number of shares for which options may be
granted under the Plan either in the aggregate or to any individual employee; or
(b) reduce (except in accordance with Section 6) the minimum option prices which
may be established under the Plan; or (c) extend the period of periods during
which options may be granted or exercised; or (d) change the provisions relating
to the determination of employees to whom options shall be granted and the
number of shares to be covered by such options; or (e) change the provisions
relating to adjustments to be made upon changes in capitalization; or (f) change
the method for the selection of the Committee as provided by Section 2 hereof.
The termination of any modification or amendment of the Plan shall not, without
the consent of an employee, affect his rights under an option theretofore
granted to him.
Exhibit 99.1
Page 7
<PAGE> 8
13. APPLICABILITY OF PLAN TO OUTSTANDING STOCK OPTIONS
This Plan shall not affect the terms and conditions of any non-qualified
stock options heretofore granted to any employee of the Company or a subsidiary
corporation of the Company under any other plan relating to non-qualified stock
options; nor shall it affect any of the rights of any employee to whom such a
non-qualified stock option was granted.
14. EFFECTIVE DATE OF PLAN
This Plan shall become effective on the later of the date of its
adoption by the Board of Directors of the Company or its approval by the vote of
the holders of a majority of the outstanding shares of the Company's Common
Stock. This Plan shall not become effective unless such shareholder approval
shall be obtained within twelve (12) months before or after the adoption of the
Plan by the Board of Directors.
Exhibit 99.1
Page 8
<PAGE> 1
EXHIBIT 99.2
ULTRACISION, INC.
1987 INCENTIVE STOCK OPTION PLAN
1. PURPOSE OF THE PLAN
This Incentive Stock Option plan (hereinafter called the "Plan") for
ULTRACISION, INC. (hereinafter called the "Company") is intended to advance the
interests of the Company by providing officers and other key employees who have
substantial responsibility for the direction and management of the Company with
additional incentive for them to promote the success of the business, to
increase their proprietary interest in the success of the Company, and to
encourage them to remain in its employ. The above aims will be effectuated
through the granting of certain stock options. It is intended that options
issued under the Plan and designated by the Committee under Section 3(b) will
qualify as Incentive Stock Options (hereinafter called "ISOs") under Section
422A of the Internal Revenue Code as enacted by the Economic Recovery Tax Act of
1981 and the terms of the Plan shall be interpreted in accordance with this
intention.
2. ADMINISTRATION OF THE PLAN
The Board of Directors shall appoint a Stock Option Plan Committee
(hereinafter called the "Committee") which shall consist of three members, at
least one of whom shall be a Director of the Company. Subject to the provisions
of the Plan, the Committee shall have plenary authority, in its discretion: (a)
to determine the employees of the Company (from among the class of employees
eligible under Section 3 to receive options under the Plan) to whom options
shall be granted; (b) to determine the time or times at which options shall be
granted; (c) to determine the option price of the shares subject to each option,
which price shall not be less than the minimum specified in Section 5; (d) to
determine (subject to Section 7) the time or times when each option shall become
exercisable and the duration of the exercise period; and (e) to interpret the
Plan and to prescribe, amend, and rescind rules and regulations relating to it.
The Committee shall select one of its members as its Chairman and shall hold its
meetings at such times and places as it shall deem advisable. All action of the
Committee shall be taken by unanimous vote of its members. Any action may be
taken by a written instrument signed by all the members of the Committee, and
action so taken shall be fully as effective as if it had been taken by a
unanimous vote of the members at a meeting duly called and held. The Committee
may appoint a secretary to keep minutes of its meetings and shall make such
rules and regulations for the conduct of its business as it shall deem
advisable.
3. ELIGIBILITY AND LIMITATIONS ON OPTIONS GRANTED UNDER THE PLAN
(a) Options will be granted only to persons who are key employees
of the Company. The term "key employees" shall include officers, directors,
executives, and supervisory personnel, as well as other employees of the
Company.
Exhibit 99.2
Page 1
<PAGE> 2
(b) At the time of the grant of each option under this Plan, the
Committee shall determine whether such option is to be designated as an ISO. If
an option is to be so designated as an ISO, then the provisions of Section 7(d)
of this Plan shall be made applicable to such option. In addition, no option
granted to any employee, who at the time of such grant, owns stock possessing
more than 10 percent of the total combined voting power of all classes of stock
of the Company, may be designated as an ISO, unless at the time of such grant,
the option price is fixed at not less than 110 percent of the fair market value
of the stock subject to the option, and exercise of such option is prohibited by
its terms after the expiration of five (5) years from the date such option is
granted.
(c) The aggregate fair market value of the stock for which any
employee may be granted options designated as ISOs in any calendar year (under
this or any other stock option plan established by the Company or a subsidiary
corporation of the Company) shall not exceed $100,000 plus any unused limit
carryover (as defined in 3(d) hereof) to such year from any prior calendar year
beginning on or after January 1, 1981.
(d) The unused limit carryover from any such calendar year shall
be one-half of any excess of $100,000 over the aggregate fair market value of
the stock for which an employee was granted options that qualify (whether from
their issuance or as a result of subsequent amendment and election by the
Company) as ISOs in any such calendar year (under this and all other stock
option plans established by the Company. The unused limit for any calendar year
shall be carried forward for three (3) years. ISOs granted in any year shall be
applied against the current year limitation first and then against the remaining
unused limit carryovers to such year in the order of the calendar year in which
the carryovers arose.
4. SHARES OF STOCK SUBJECT TO THE PLAN
There will be reserved for use upon the exercise of options to be
granted from time to time under the Plan (subject to the provisions of Section
12) an aggregate of 75,000 shares of the Common Stock of the Company, which
shares may be (in whole or in part, as the Board of Directors of the Company,
hereinafter called the "Board" shall from time to time determine,) authorized
but unissued shares of the Common Stock which shall have been reacquired by the
Company. Any shares subject to an option under the Plan, which option for any
reason expires or is terminated unexercised as to such shares, may again be
subjected to an option under the Plan.
5. OPTION PLAN
The purchase price under each option issued shall be determined by the
Committee at the time the option is granted, but in no event shall such purchase
price be less than 100 percent of the fair market value of the Company's Common
Stock on the date of grant.
The term "fair market value" shall be determined in the opinion of a
completely independent and well qualified expert. Amounts treated as unstated
interest under Internal Revenue Code Section 483 are not to be included as part
of the option price.
Exhibit 99.2
Page 2
<PAGE> 3
6. DILUTION OR OTHER AGREEMENT
In the event that additional shares of Common Stock are issued pursuant
to a stock split or a stock dividend, the number of shares of Common Stock then
covered by each outstanding option granted hereunder shall be increased
proportionately with no increase in the total purchase price of the shares then
so covered, and the number of shares of Common Stock reserved for the purpose of
the Plan shall be increased by the same proportion. In the event that the shares
of Common Stock of the Company from time to time issued and outstanding are
reduced by a combination of shares, the number of shares of Common Stock then
covered by each outstanding option granted hereunder shall be reduced
proportionately, with no reduction in the total price of the shares then so
covered, and the number of shares of Common Stock reserved for the purposes of
the Plan shall be reduced by the same proportion. In the event that the Company
should transfer assets to another corporation and distribute the stock of such
other corporation without the surrender of Common Stock of the Company, and if
such distribution is not taxable as a dividend and no gain or loss is recognized
by reason of Section 355 of the Internal Revenue Code of 1954, or some similar
section, then the total purchase price of the shares covered by each outstanding
option shall be reduced by an amount which bears the same ratio to the total
purchase price then in effect as the market value of the stock distributed in
respect of a share of the Common Stock of the Company, immediately following the
distribution, bears to the aggregate of the market value at such time of a share
of the Common Stock of the Company and the stock distributed in respect thereof.
All such adjustments shall be made by the Committee, whose determination upon
the same shall be final and binding upon the optionees. No fractional shares
shall be issued, and any fractional shares resulting from the computations
pursuant to this Section 6 shall be eliminated from the respective option. No
adjustment shall be made for cash dividends or the issuance to stockholders of
rights to subscribe for additional common Stock or other securities.
7. PERIOD OF OPTION AND CERTAIN LIMITATIONS ON RIGHT TO EXERCISE
(a) All options issued under the Plan shall be for such period as
the Committee shall determine, but for not more than ten (10) years from the
date of grant thereof.
(b) The period of the option, once it is granted, may be reduced
only as provided for in Section 9 in connection with the termination of
employment or death of the optionee or in Section 7(c) in the case of less than
satisfactory performance.
(c) Each option granted under this Plan shall become exercisable
only after two (2) years continued employment of the optionee with the Company
immediately following the date the option is granted. Any option designated as
an ISO shall be exercisable in full, or as to any part thereof, at any time
after the expiration of two (2) years following the date of such option is
granted, but only if the optionee chooses to exercise such option and to pay for
such option in the manner set forth in Section 7(e) hereof (i.e., in cash or
certified bank check or shares of the Company's Common Stock, or any combination
of the foregoing in an amount equal to the full option price of the shares being
purchased). Any option not designated as an ISO and any option designated as an
ISO that the optionee chooses to exercise in any manner other than that
permitted in the preceding sentence, shall be exercisable only to the extent of
one-
Exhibit 99.2
Page 3
<PAGE> 4
fifth of the total number of optioned shares after the expiration of two (2)
years following the date the option is granted only to the extent of two-fifths
of the total number of optioned shares after the expiration of three (3) years
following the date the option is granted, only to the extent of three-fifths of
the total number of optioned shares after the expiration of four (4) years
following the date the option is granted, only to the extent of four-fifths of
the total number of optioned shares after the expiration of five (5) years
following the date the option is granted, and in full only after the expiration
of six (6) years following the date the option is granted, such limitations
being calculated, in the case of any resulting fraction, to the nearest lower
whole number of shares. Notwithstanding the foregoing, the Committee may, in its
sole discretion, (i) prescribe longer time periods and additional requirements
with respect to the exercise of an option and (ii) terminate in whole or in part
such portion of any option as has not yet become exercisable at the time of
termination if it determines that the optionee is not performing satisfactorily
the duties to which he was assigned on the date the option was granted or duties
of at least equal responsibility. No option may be exercised unless the optionee
is at the time of such exercise in the employee of the Company and shall have
been continuously so employed since the grant of his option. Absence or leave
approved by the management of the Company shall not be considered an
interruption of employment for any purpose under the Plan.
(d) No option under this Plan designated by the Committee as an
ISO may be exercised while there is outstanding in the hands of the optionee any
ISO (whether granted under the Plan or any other stock option plan established
by the Company or a subsidiary corporation of the Company) which was granted
before the granting of the ISO hereunder sought to be exercised. For purposes of
this Section 7(d), any ISO shall be treated as outstanding until such option is
exercised in full or expires by reason of lapse of time.
(e) Subject to the alternative settlement methods set forth in
Section 7(h) hereof, the exercise of any option shall also be contingent upon
receipt by the Company of cash or certified bank check to its order, shares of
the Company's Common Stock, or any combination of the foregoing in an amount
equal to the full option price of the shares being purchased. For purposes of
this paragraph, shares of the Company's Common Stock that are delivered in
payment of the option price shall be valued at their fair market value
determined under the method set forth in Section 5 of this Plan applied as of
the date of the exercise of the option. However, in order to facilitate the
accumulation of funds to enable employees to exercise their option, they will
have the right, if they so elect, to direct the Company to withhold from their
compensation regular amounts to be applied toward the exercise of the options.
Funds credited to the stock option accounts will be under the control of the
Company until applied to the payment of the option price at the direction of the
employee or returned to the employee in the event the amount is not used for
purchase of shares under option, and all funds received or held by the Company
under the Plan may be used for any corporate purpose, and no interest shall be
payable to a participant on account of any amounts so held. Such amounts may be
withdrawn by the employee at any time, in whole or in part, for any reason.
(f) No optionee or his legal representative, legatees, or
distributees, as the case may be, will be, or will be deemed to be, a holder of
any share subject to an option unless and until certificates for such shares are
issued to him or them under the terms of the Plan. No
Exhibit 99.2
Page 4
<PAGE> 5
adjustment shall be made for dividends or other rights for which the record date
is prior to the date such stock certificate is issued.
(g) In no event may an option be exercised after the expiration
of its term.
(h) As an alternative to payment in full by the optionee for the
number of shares of Common Stock in respect of which an option is exercised, the
Committee may provide alternative settlement methods as follows:
(1) The Committee, in its discretion, may provide in
the initial grant of any option, that the optionee may elect either of the
alternative settlement methods set forth in subsection (2) below.
(2) The alternative settlement methods are for the
optionee, upon exercise of the option, to receive from the Company: (A) cash in
an amount equal to the excess of the value of one share over the option price
times the number of shares as to which the option is exercised; or (B) the
number of whole shares of Common stock having an aggregate value not greater
than the cash amount calculated under Section 7(h) (2) (A). For purposes of
determining an alternative settlement, the value per share shall be the "fair
market value" determined under the method set forth in Section 5 hereof, applied
as of the date of the exercise of the option, or such other price as the
Committee shall determine to be the fair market value of the Common Stock on the
date of exercise.
(i) An election of any of the alternative settlement methods
provided for under Section 7 (h) (2) shall be binding on the optionee, when
made. The optionee may elect to what extent the alternative settlement method
elected shall be paid in cash, in Common Stock, or partially in Common Stock,
provided that the aggregate value of the payments shall not be greater than the
cash amount calculated under Section 7(h) (2) (A). No fractional shares of
Common Stock shall be issued, and the Committee shall determine whether cash
shall be paid in lieu of such fractional share interest or whether such
fractional share interest shall be eliminated.
(j) The alternative settlement methods provided above in Section
7(h) (2) shall not be available unless the cash amount calculated thereunder
shall be positive, i.e. when the value of one share shall exceed the option
price per share.
(k) Exercise of an option in any manner, including an exercise
involving an election of an alternative settlement method with respect to an
option, shall result in a decrease in the number of shares of Common Stock which
thereafter may be available under the Plan by the number of shares as to which
the option is exercised.
(1) To the extent that the exercise of options by one of the
alternative settlement methods provided for in Section (h) (2) results in
compensation income to the optionee, the Company will withhold from the amount
due to the optionee utilizing such alternative settlement method, an appropriate
amount for federal, state and local taxes.
Exhibit 99.2
Page 5
<PAGE> 6
8. ASSIGNABILITY
Each option granted under this Plan shall be transferable only by will
or the laws of descent and distribution. The option granted shall be exercisable
only by the employee to whom the option is granted during his lifetime. Except
as permitted by the preceding sentence, no option granted under the Plan or any
of the rights and privileges thereby conferred shall be transferred, assigned,
pledged, or hypothecated in any way (whether by operation of law or otherwise),
and no such option, right, or privilege shall be subject to execution,
attachment, or similar process. Upon any attempt so to transfer, assign, pledge,
hypothecate, or otherwise dispose of the option, or of any right or privilege
conferred thereby, contrary to the provisions hereof, or upon the levy of any
attachment or similar process upon such option, right or privilege, the option
and such rights and privileges shall immediately become null and void.
9. EFFECT OF TERMINATION OF EMPLOYMENT, DEATH OR DISABILITY
(a) In the event of the termination of employment of an optionee
during the two (2) year period under the date of issuance of an option to him
either by reason of (i) a discharge for cause or (ii) voluntary separation on
the part of the optionee and without consent of his employing company or
companies, any option or options theretofore granted to him under this Plan to
the extent not theretofore exercised by him shall forthwith terminate.
(b) In the event of the termination of employment of an optionee
(otherwise than by reason of death or retirement of the optionee at his
Retirement Date by the Company employing the optionee at such time), any option
or options granted to him under the Plan to the extent not theretofore exercised
shall be deemed canceled and terminated forthwith, except that, subject to the
provisions of section (a) of this Section, such optionee may exercise any
options theretofore granted to him, which have not then expired and which are
otherwise exercisable within the provisions of Section 7(c) hereof, within three
(3) months after such termination. If the employment of an optionee shall be
terminated by reason of the optionee's retirement at his Retirement Date by the
Company employing the optionee at such time, the optionee shall have the right
to exercise such option or options held by him to the extent that such options
have not expired, at any time within three (3) months after such retirement. The
provisions of Section 7(c) to the contrary notwithstanding, upon retirement, all
options held by optionee shall be immediately exercisable in full.
(c) In the event that an optionee shall die while employed by the
Company or shall die within three (3) months after retirement at his Retirement
Date, any option or options granted to him under this Plan and not theretofore
exercised by him or expired shall be exercisable by the estate of the optionee
or by any person who acquired such option by bequest or inheritance from the
optionee in full, notwithstanding Section 7(c) at any time within one (1) year
after the death of the optionee. References hereinabove to the optionee shall be
deemed to include any person entitled to exercise the option after the death of
the optionee under the terms of this Section.
(d) In the event of the termination of employment of an optionee
by reason of the optionee's disability, the optionee shall have the right,
notwithstanding the provisions of
Exhibit 99.2
Page 6
<PAGE> 7
Section 7(c) hereof, to exercise all options held by him to the extent that
options have not previously expired or been exercised, at any time within one
(1) year after such termination. The term "disability" shall, for the purposes
of this Plan, be defined in the same manner as such term is defined in Section
105(d) (4) of the Internal Revenue Code of 1954.
(e) For the purposes of this Plan, "Retirement Date" shall mean
any date an employee is otherwise entitled to retire under the Company's
retirement plans and shall include normal retirement at age 65, early retirement
at age 62, and retirement at age 60 after 30 years of service.
10. LISTING AND REGISTRATION OF SHARES
Each option shall be subject to the requirement that if at any time the
Stock Option Committee shall determine, in its discretion, that the listing,
registration, or qualification of the shares covered thereby upon any securities
exchange or under any state or federal law or the consent or approval of any
governmental regulatory body, is necessary or desirable as a condition of, or in
connection with, the granting of such option or the issue or purchase of shares
thereunder, such option may not be exercised in whole or in part unless and
until such listing, registration, qualification, consent, or approval shall have
been effected or obtained free of any conditions not acceptable to the
Committee.
11. EXPIRATION AND TERMINATION OF THE PLAN
Options may be granted under the Plan at any time or from time to time
as long as the total number of shares optioned or purchased under this Plan does
not exceed 75,000 shares of Common Stock. The Plan may be abandoned or
terminated at any time by the Board of Directors of the Company except with
respect to any options then outstanding under the Plan. No option shall be
granted pursuant to the Plan after ten (10) years from the effective date of the
Plan.
12. AMENDMENT OF PLAN
The Board of Directors may at any time and from time to time modify and
amend the Plan (including such form of option agreement) in any respect;
provided, however, that ho such amendment shall: (a) increase (except in
accordance with Section 6) the maximum number of shares for which options may be
granted under the Plan either in the aggregate or to any individual employee; or
(b) reduce (except in accordance with Section 6) the minimum option prices which
may be established under the Plan; or (c) extend the period of periods during
which options may be granted or exercised; or (d) change the provisions relating
to the determination of employees to whom options shall be granted and the
number of shares to be covered by such options; or (e) change the provisions
relating to adjustments to be made upon changes in capitalization; or (f) change
the method for the selection of the Committee as provided by Section 2 hereof.
The termination of any modification or amendment of the Plan shall not, without
the consent of an employee, affect his rights under an option theretofore
granted to him.
Exhibit 99.2
Page 7
<PAGE> 8
13. APPLICABILITY OF PLAN TO OUTSTANDING STOCK OPTIONS
This Plan shall not affect the terms and conditions of any non-qualified
stock options heretofore granted to any employee of the Company or a subsidiary
corporation of the Company under any other plan relating to non-qualified stock
options; nor shall it affect any of the rights of any employee to whom such a
non-qualified stock option was granted.
14. EFFECTIVE DATE OF PLAN
This Plan shall become effective on the later of the date of its
adoption by the Board of Directors of the Company or its approval by the vote of
the holders of a majority of the outstanding shares of the Company's Common
Stock. This Plan shall not become effective unless such shareholder approval
shall be obtained within twelve (12) months before or after the adoption of the
Plan by the Board of Directors.
Date Plan adopted by Board of Directors: November 12, 1987
Date Plan approved by Shareholders: November 13, 1987
Exhibit 99.2
Page 8
<PAGE> 1
EXHIBIT 99.3
Ultracision, Inc. Form of Incentive Stock Option Agreement,
as amended by the Assumed Option Agreement
INCENTIVE
STOCK OPTION AGREEMENT
THIS AGREEMENT made as of the ____ of ____, 19__, between ULTRACISION,
INC., a California corporation (hereinafter called "ULTRACISION") and __________
an employee of Ultracision or one or more of its subsidiaries (hereinafter
called the "Employee").
WITNESSETH:
WHEREAS, pursuant to the Ultracision 1986/1987 Incentive Stock Option
Plan (the "Plan"), adopted by the stockholders of November 13, 1987, the Stock
Option Committee of the Board of Directors of Ultracision (the "Committee") is
authorized to administer the Plan; and
WHEREAS, the Committee has determined that the Employee is an officer or
other key employee of Ultracision or of one or more of its subsidiaries and that
the Employee shall be granted the incentive stock option hereinafter set forth
upon the terms and conditions hereinafter stated and subject to all of the
provisions of such Plan (a copy of which is attached hereto); and
WHEREAS, 100% of the fair market value of the Common Stock of
Ultracision as determined in accordance with the provisions of Section 5 of the
Plan on __________, ____, is $____ and
WHEREAS, in accordance with the foregoing, the Committee has approved
and authorized the execution and delivery of this Incentive Stock Option
Agreement as of the date hereof.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants hereinafter set forth and other good and valuable consideration, the
parties here to hereby enter into this Incentive Stock Option Agreement
(hereinafter called the "Agreement") upon the following terms and conditions:
1. Ultracision hereby grants to the Employee as a matter of separate
inducement and agreement in connection with his employment, and not in lieu of
any salary or other compensation for his services, the option to purchase from
Ultracision, on the terms and conditions hereinafter set forth as limited by
attachment(s) (NONE), all or any part of an aggregate of ______ shares of Common
Stock of Ultracision at the purchase price of $____ per share, provided,
however, that at least 1,000 shares must be purchased at any one time unless the
balance covered by the option at that time is less than 1,000 shares.
Exhibit 99.3
Page 1
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2. This option shall not be exercisable until the expiration of two
years from the date hereof, and shall not be exercisable after _____________.
3. This option shall not be exercisable in whole or in part while there
is outstanding any incentive stock option, as defined Section 7(d) of the plan,
which was granted to the Employee, before the granting of this option, to
purchase stock in Ultracision, or any corporation which (at the time of the
granting of this option) is a subsidiary corporation of Ultracision, or in a
predecessor corporation of any such corporation. The term "outstanding" as used
herein shall have the meaning specified in Section 422A of the Internal Revenue
Code.
4. This option is not transferable by the Employee otherwise than by
will, or, if he dies intestate, by the laws of descent and distribution of the
state of his domicile at the time of his death, and is exercisable during his
lifetime only by him, and after his death by his legal representatives.
5. Shares may be purchased pursuant to this option only upon receipt by
Ultracision of written notice from the person holding this option of his
intention to purchase, specifying the number of shares as to which he desires to
exercise this option and containing such representation and information as may
in the opinion of counsel for Ultracision be appropriate to permit Ultracision,
in the light of the existence or non-existence of an effective registration
statement under the Securities Act of 1933 with respect to such shares, to issue
such shares in compliance with the provisions of that Act. Such notice of
exercise of a stock option granted hereunder shall be accompanied by payment in
full of the aggregate price of the shares being purchased in cash, or by check,
bank draft or money order payable to the order of Ultracision or, with the
approval of the Committee, by delivery of shares of Common Stock of Ultracision
of equivalent fair market value on the date of exercise. Fair market value shall
be determined as specified in Section 5 of the Plan. At the time of giving such
notice, the person or persons exercising this option shall furnish to
Ultracision such other documents as may reasonably require. Ultracision shall
have the right to withhold delivery of stock certificates representing shares
purchased under this option until all required approvals have been obtained and
until all applicable requirements of law have been complied with, including any
withholding Federal, State, local or foreign taxes.
6. The Employee or his legal representatives, as the case may be, shall
not have any of the rights or privileges of a stockholder of Ultracision in
respect of any of the shares issuable upon the exercise of this option unless
and until certificates representing such shares shall have been issued and
delivered.
7. If, prior to exercise of this option, the Employee shall, because of
death or for any other reason, cease to be in the employ of Ultracision or of
any of its subsidiaries, this option shall not be valid for more than the number
of shares which would have been purchasable by the Employee at the time of such
cessation of employment, and the portion of this option relating to the purchase
of any remaining shares shall expire forthwith. Unless cessation of employment
is due to death or retirement in accordance with the terms of the plan this
option as so limited may be exercised only within three months after the
cessation of employment at which time it shall terminate. If the Employee
retires, this option as so limited may be exercised within one year
Exhibit 99.3
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following the Employee's retirement. If the Employee dies while still in the
employ of Ultracision or its subsidiaries or after retirement while this option
is still exercisable, this option may be exercised by the person designated in
the Will of the Employee or, if no testamentary disposition was made, by the
proper legal representatives of the Employee within one year following the
death. In no event, however, shall this option or any part thereof be
exercisable after the date fixed for its expiration in Section 2 hereof.
8. The number of shares subject to this option and the option price are
subject to adjustment as provided in Section 6 of the Plan.
9. Ultracision shall not be liable in the event of its inability to
issue or sell stock to the Employee of such issuance or sale would be unlawful,
nor shall Ultracision be liable of an issuance or sale to the Employee is
subsequently invalidated.
10. This Agreement shall be construed in accordance with the laws of the
State of California.
Ultracision, Inc.
By:
------------------------------------
By:
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Employee
Exhibit 99.3
Page 3
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ASSUMED OPTION AGREEMENT
THIS AGREEMENT made as of the 2nd day of December, 1997 between
Giga-tronics Incorporated ("Giga-tronics") and _____________, ("Optionee") an
employee of Ultracision, Inc. ("Ultracision").
WHEREAS, the Optionee currently has options to purchase shares of common
stock, no par value, of Ultracision;
WHEREAS, pursuant to that certain Agreement and Plan of Reorganization
(the "Merger Agreement") by and among Giga-tronics, a wholly owned subsidiary of
Giga-tronics, Ultracision and the Ultracision shareholder named therein, the
parties thereto have agreed to consummate a merger (the "Merger") whereby
Ultracision will become a wholly owned subsidiary of Giga-tronics;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants set forth herein and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties agree as
follows:
1. Giga-tronics will assume the Optionee's option to purchase shares (an
"Option") of Ultracision common stock, no par value, pursuant to the Ultracision
1986 Stock Option Plan or Ultracision 1987 Stock Option Plan set forth in
Schedule I hereto, as adjusted to reflect the Exchange Ratio (as defined in the
Merger Agreement). Each Option, whether vested or unvested, shall convert into
an option (a "Replacement Option") to acquire the number of shares of
Giga-tronics Common Stock set forth on Schedule 1 at the price per share as set
forth on Schedule I.
2. All other terms and conditions of the Replacement Option, including
the vesting schedule applicable to such Replacement Option, shall be as set
forth in that certain Incentive Stock Option Agreement dated as of July 23, 1996
(or March 28, 1996, in the case of Dan Markowitz) between Ultracision and the
Optionee and the Ultracision Stock Option Plan under which the replaced Option
was granted; and such option agreement and option plan shall remain in effect in
accordance with the terms thereof.
3. No optionee will be granted any additional benefit that such optionee
did not have prior to the Merger under an original Option as described under
Section 421(a) of the Internal Revenue Code of 1986, as amended.
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<PAGE> 5
IN WITNESS WHEREOF, the-parties hereto have executed this
Agreement as of the date first above written.
GIGA-TRONICS INCORPORATED
By:
-------------------------------------
Name: George H. Bruns, Jr.
Title: Chief Executive Officer
OPTIONEE
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2
