<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 20, 1995
REGISTRATION NO. 33-
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------
SIERRA ON-LINE, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 77-0164293
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.)
organization)
</TABLE>
3380 - 146TH PLACE S.E., SUITE 300
BELLEVUE, WASHINGTON 98007
(Address of principal executive offices, including zip code)
SIERRA ON-LINE, INC. 1995 STOCK OPTION AND AWARD PLAN
SIERRA ON-LINE, INC. 1995 EMPLOYEE STOCK PURCHASE PLAN
SIERRA ON-LINE, INC. RESTRICTED STOCK AWARD LETTER AGREEMENTS
(Full title of the plans)
RICHARD K. THUMANN
GENERAL COUNSEL
3380 - 146TH PLACE S.E., SUITE 300
BELLEVUE, WASHINGTON 98007
(206) 649-9800
(Name, address and telephone number, including area code, of agent for service)
------------
COPY TO:
STEPHEN A. MCKEON
PERKINS COIE
1201 THIRD AVENUE, 40TH FLOOR
SEATTLE, WASHINGTON 98101-3099
------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
============================================================================================================================
TITLE OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
SHARE(1) PRICE(1) FEE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par
value per share 2,214,384(2) $29.5625 $65,462,727 $22,574
============================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
The price per share is estimated to be $29.5625 based on the average
of the high ($31.875) and low ($27.25) sales prices for the Common
Stock in the over-the-counter market on July 13, 1995 as reported on
the Nasdaq National Market.
(2) Of this number, 2,000,000 shares are being registered for issuance
under the Sierra On-Line, Inc. 1995 Stock Option and Award Plan,
200,000 shares are being registered for issuance under the Sierra
On-Line, Inc. 1995 Employee Stock Purchase Plan and 14,384 shares are
being registered for issuance under the Sierra On-Line, Inc.
Restricted Stock Award Letter Agreements, together with an
indeterminate number of additional shares that may be necessary to
adjust the number of shares reserved for issuance under the Sierra
On-Line, Inc. 1995 Stock Option and Award Plan, the Sierra On-Line,
Inc. 1995 Employee Stock Purchase Plan and the Sierra On-Line, Inc.
Restricted Stock Award Letter Agreements as the result of any future
stock split, stock dividend or similar adjustment of the outstanding
Common Stock of the Registrant.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference (File No.
0-17154) in this Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the
fiscal year ended March 31, 1995 filed with the Securities and Exchange
Commission (the "Commission");
(b) The description of the Registrant's Common Stock
contained in the Registration Statement on Form 8-A filed with the Commission
under Section 12(g) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"); and
(c) All other reports filed by the Registrant pursuant to
Section 13(a) or 15(d) of the Exchange Act since the fiscal year covered by the
Form 10-K referred to in (a) above.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date hereof and prior to the
filing of a post-effective amendment, which indicates that the securities
offered hereby have been sold or which deregisters the securities covered
hereby then remaining unsold, shall also be deemed to be incorporated by
reference into this Registration Statement and to be a part hereof commencing
on the respective dates on which such documents are filed.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation--a "derivative action"),
if they acted in good faith and in a manner they reasonably believed to be in
or not opposed to the best interest of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe their
conduct was unlawful. A similar standard is applicable in the case of
derivative actions, except that indemnification only extends to expenses
(including attorneys' fees) incurred in connection with the defense or
settlement of such actions, and the statute requires court approval before
there can be any indemnification where the person seeking indemnification has
been found liable to the corporation. The statute provides that it is not
exclusive of other indemnification that may be granted by a corporation's
charter, by-laws, disinterested director vote, stockholder vote, agreement or
otherwise.
Article VI of the Registrant's By-Laws requires indemnification to the
full extent permitted under Delaware law as from time to time in effect.
Subject to any restrictions imposed by Delaware law, the By-Laws provide an
unconditional right to indemnification for all expenses, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid in settlement) actually and reasonably incurred or suffered by
any person in connection with any actual or threatened action, suit or
proceeding, whether civil, criminal, administrative or investigative
(including, to the extent permitted by law, any derivative action) by reason of
the fact that such person is or was serving as a director or officer of the
Registrant or that, being or having been a director or officer or an employee
of the Registrant, such
II-1
<PAGE> 3
person is or was serving at the request of the Registrant as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, including an employee benefit plan. The By-Laws
also provide that the Registrant may, by action of its Board of Directors,
provide indemnification to its employees and agents with the same scope and
effect as the foregoing indemnification of directors and officers.
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to
the corporation or its stockholders, (ii) for acts or omissions not in good
faith or that involve intentional misconduct or a knowing violation of law,
(iii) for payments of unlawful dividends or unlawful stock repurchases or
redemptions, or (iv) for any transaction from which the director derived an
improper personal benefit.
Article VII of the Registrant's Certificate of Incorporation provides
that, subject to certain limitations, a director of the Registrant shall not be
liable to the Registrant or its stockholders for monetary damages for breach of
fiduciary duty as a director. Any amendment to or repeal of such Article VII
shall not adversely affect any right or protection of a director of the
Registrant for or with respect to any acts or omissions of such director
occurring prior to such amendment or repeal.
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
5.1 Opinion of Perkins Coie regarding legality of the Common Stock being registered
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Perkins Coie (included in the opinion filed as Exhibit 5.1)
24.1 Power of Attorney (see signature page)
99.1 Sierra On-Line, Inc. 1995 Stock Option and Award Plan
99.2 Sierra On-Line, Inc. 1995 Employee Stock Purchase Plan
99.3 Sierra On-Line, Inc. Form of Restricted Stock Award Letter Agreement
</TABLE>
ITEM 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of 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
II-2
<PAGE> 4
(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 paragraphs (1)(i) and (1)(ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference 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 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefits plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in 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
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the 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.
II-3
<PAGE> 5
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 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 Seattle, State of
Washington, on July 19, 1995.
SIERRA ON-LINE, INC.
By: /s/ Kenneth A. Williams
-----------------------------
Kenneth A. Williams
President and Chief Executive Officer
POWER OF ATTORNEY
EACH PERSON WHOSE INDIVIDUAL SIGNATURE APPEARS BELOW HEREBY AUTHORIZES
KENNETH A. WILLIAMS AND MICHAEL A. BROCHU AND EACH OF THEM AS
ATTORNEYS-IN-FACT, WITH FULL POWER OF SUBSTITUTION, TO EXECUTE IN THE NAME AND
ON BEHALF OF SUCH PERSON, INDIVIDUALLY AND IN EACH CAPACITY STATED BELOW, AND
TO FILE, ANY AND ALL AMENDMENTS TO THIS REGISTRATION STATEMENT, INCLUDING ANY
AND ALL POST-EFFECTIVE AMENDMENTS.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons
in the capacities indicated on July 19, 1995.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Kenneth A. Williams Chairman of the Board, President and Chief Executive
------------------------------- Officer (Principal Executive Officer)
Kenneth A. Williams
/s/ Michael A. Brochu Executive Vice President and Chief Financial Officer
------------------------------- (Principal Financial Officer)
Michael A. Brochu
/s/ Fred Schapelhouman Chief Accounting Officer
-------------------------------
Fred Schapelhouman
/s/ Thomas L. Beckman Director
-------------------------------
Thomas L. Beckman
/s/ Michael G. Berolzheimer Director
-------------------------------
Michael G. Berolzheimer
/s/ Walter A. Forbes Director
-------------------------------
Walter A. Forbes
/s/ Marvin H. Green, Jr. Director
-------------------------------
Marvin H. Green, Jr.
</TABLE>
II-4
<PAGE> 6
<TABLE>
<S> <C>
/s/ David C. Hodgson Director
------------------------------
David C. Hodgson
/s/ Roberta L. Williams Director
------------------------------
Roberta L. Williams
</TABLE>
II-5
<PAGE> 7
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
5.1 Opinion of Perkins Coie regarding legality of the Common Stock
being registered
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Perkins Coie (included in the opinion filed as
Exhibit 5.1)
24.1 Power of Attorney (see signature page)
99.1 Sierra On-Line, Inc. 1995 Stock Option and Award Plan
99.2 Sierra On-Line, Inc. 1995 Employee Stock Purchase Plan
99.3 Sierra On-Line, Inc. Form of Restricted Stock Award Letter
Agreement
</TABLE>
<PAGE> 1
PERKINS COIE
A LAW PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
1201 THIRD AVENUE, 40TH FLOOR - SEATTLE, WASHINGTON 98101-3099
TELEPHONE: (206) 583-8888 - FACSIMILE: (206) 583-8500
July 20, 1995
Sierra On-Line, Inc.
3380 146th Place S.E., Suite 300
Bellevue, WA 98007
RE: 2,214,384 SHARES OF COMMON STOCK ($.01 PAR VALUE) OF SIERRA
ON-LINE, INC. (THE "COMPANY")
Ladies and Gentlemen:
We have acted as counsel to you in connection with the preparation of
a Registration Statement on Form S-8 (the "Registration Statement") pursuant to
the Securities Act of 1933, as amended (the "Act"), which you are filing with
the Securities and Exchange Commission with respect to 2,214,384 shares of
Common Stock, $.01 par value per share (the "Shares"), which are to be issued
pursuant to the Sierra On-Line, Inc. 1995 Stock Option and Award Plan (the
"SOAP"), the Sierra On-Line, Inc. 1995 Employee Stock Purchase Plan (the
"ESPP") and the Sierra On-Line, Inc. Restricted Stock Award Letter Agreements
(the "Agreements"). We have examined the Registration Statement and such other
documents and records of the Company as we have deemed relevant and necessary
for the purpose of this opinion.
Based upon and subject to the foregoing, we are of the opinion that
the Shares that will be issued pursuant to the SOAP, the ESPP and the
Agreements, upon the due execution by the Company and the registration by its
registrar of the Shares and the issuance thereof by the Company and the receipt
of consideration therefor in accordance with the terms of the SOAP, the ESPP
and the Agreements, will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
PERKINS COIE
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Sierra On-Line, Inc. on Form S-8 of our report dated May 31, 1995, appearing in
the Annual Report on Form 10-K of Sierra On-Line, Inc. and subsidiaries for the
year ended March 31, 1995.
DELOITTE & TOUCHE LLP
Seattle, Washington
July 20, 1995
<PAGE> 1
ATTENTION: THIS OPTION GRANT AND 1995 STOCK OPTION AND AWARD PLAN ARE SUBJECT
TO SHAREHOLDER APPROVAL AT THE NEXT ANNUAL MEETING OF SHAREHOLDERS (SCHEDULED
FOR AUGUST 1995). IF APPROVAL IS NOT RECEIVED, THIS OPTION WILL AUTOMATICALLY
TERMINATE, EFFECTIVE AS OF THE DATE OF THE ANNUAL MEETING.
SIERRA ON-LINE, INC.
1995 STOCK OPTION AND AWARD PLAN
SECTION 1. PURPOSE
The purpose of the Sierra On-Line, Inc. 1995 STOCK OPTION AND AWARD
PLAN (the "Plan") is to enhance the long-term profitability and stockholder
value of Sierra On-Line, Inc., a Delaware corporation (the "Company"), by
offering incentives and rewards to those employees, directors, officers,
consultants, agents, advisors and independent contractors of the Company and
its Subsidiaries (as defined in Section 2) who are key to the Company's growth
and success, and to encourage them to continue to provide services to the
Company and its Subsidiaries and to acquire and maintain stock ownership in the
Company.
SECTION 2. DEFINITIONS
For purposes of the Plan, the following terms shall be defined as set
forth below:
2.1 AWARD
"Award" means an award or grant made to a Participant pursuant to the
Plan, including, without limitation, awards or grants of Options, Stock Awards
or any combination of the foregoing.
2.2 BOARD
"Board" means the Board of Directors of the Company.
2.3 CAUSE
"Cause" means dishonesty, fraud, misconduct, unauthorized use or
disclosure of confidential information or trade secrets, or conviction or
confession of a crime punishable by law (except minor violations), in each case
as determined by the Plan Administrator, and its determination shall be
conclusive and binding.
2.4 CODE
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
2.5 COMMITTEE
"Committee" means the Compensation Committee of the Board or such
other committee designated by the Board to administer the Plan.
2.6 COMMON STOCK
"Common Stock" means the common stock, par value $.01 per share, of the
Company.
2.7 CORPORATE TRANSACTION
"Corporate Transaction" means any of the following events:
(a) approval by the holders of the Common Stock of any merger or
consolidation of the Company in which the Company is not the continuing or
surviving corporation or pursuant to which shares of the
<PAGE> 2
Common Stock are converted into cash, securities or other property, other than
a merger of the Company in which the holders of the Common Stock immediately
prior to the merger has substantially the same proportionate ownership of
common stock of the surviving corporation immediately after the merger;
(b) approval by the holders of the Common Stock of any
sale, lease, exchange or other transfer in one transaction or a series of
related transactions of all or substantially all of the Company's assets other
than a transfer of the Company's assets to a majority-owned subsidiary of the
Company; and
(c) approval by the holders of the Common Stock of any
plan or proposal for the liquidation or dissolution of the Company.
2.8 DISABILITY
"Disability" means "disability" as that term is defined for purposes
of Section 22(e)(3) of the Code.
2.9 EARLY RETIREMENT
"Early Retirement" means retirement as that term is defined by the
Committee from time to time for purposes of the Plan.
2.10 EXCHANGE ACT
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
2.11 FAIR MARKET VALUE
"Fair Market Value" means the closing price for the Common Stock as
reported by the NASDAQ National Market on the Grant Date.
2.12 GOOD REASON
"Good Reason" means the occurrence of any of the following events or
conditions:
(a) A change in the Holder's status, title, position or
responsibilities (including reporting responsibilities) that, in the Holder's
reasonable judgment, represents a substantial reduction of the status, title,
position or responsibilities as in effect immediately prior thereto; the
assignment to the Holder of any duties or responsibilities that, in the
Holder's reasonable judgment, are inconsistent with such status, title,
position or responsibilities; or any removal of the Holder from or failure to
reappoint or reelect the Holder to any of such positions, except in connection
with the termination of the Holder's employment for Cause, for Disability or as
a result of his or her death, or by the Holder other than for Good Reason;
(b) A reduction in the Holder's annual base salary;
(c) The Company's requiring the Holder (without the
Holder's consent) to be based at any place outside a 35- mile radius of his or
her place of employment prior to a Corporate Transaction, except for reasonably
required travel on the Company's business that is not materially greater than
such travel requirements prior to the Corporate Transaction;
(d) The Company's failure to (i) continue in effect any
material compensation or benefit plan (or the substantial equivalent thereof)
in which the Holder was participating at the time of a Corporate Transaction,
including, but not limited to, the Plan, or (ii) provide the Holder with
compensation and benefits at least equal (in terms of benefit levels and/or
reward opportunities) to those provided for under each employee
2
<PAGE> 3
benefit plan, program and practice as in effect immediately prior to the
Corporate Transaction (or as in effect following the Corporate Transaction, if
greater);
(e) Any material breach by the Company of any provision
of the Plan; or
(f) Any purported termination of the Holder's employment
or service for Cause by the Company that does not comply with the terms of the
Plan.
2.13 GRANT DATE
"Grant Date" means the date designated in a resolution of the
Committee as the date an Award is granted. If the Committee does not designate
a Grant Date in the resolution, the Grant Date shall be the date the Committee
adopted the resolution.
2.14 HOLDER
"Holder" means the Participant to whom an Award is granted, or the
personal representative of a Holder who has died.
2.15 INCENTIVE STOCK OPTION
"Incentive Stock Option" means an option to purchase Common Stock
granted under Section 7 of the Plan with the intention that it qualify as an
"incentive stock option" as that term is defined in Section 422 of the Code.
2.16 NONQUALIFIED STOCK OPTION
"Nonqualified Stock Option" means an option to purchase Common Stock
granted under Section 7 of the Plan other than an Incentive Stock Option or
under Section 9 of the Plan with respect to grants to Directors.
2.17 OPTION
"Option" means the right to purchase Common Stock granted under
Section 7 of the Plan.
2.18 PARTICIPANT
"Participant" means an individual who is a Holder of an Award or, as
the context may require, any employee, director, officer, consultant, agent,
advisor or independent contractor of the Company or a Subsidiary who has been
designated by the Committee as eligible to participate in the Plan.
2.19 RESTRICTED STOCK
"Restricted Stock" means shares of Common Stock granted under Section
10 of the Plan the rights of ownership of which are subject to restrictions
prescribed by the Committee.
2.20 RETIREMENT
"Retirement" means retirement as of the individual's normal retirement
date under the Company's Profit Sharing Plan or other similar successor plan
applicable to salaried employees.
2.21 STOCK AWARD
"Stock Award" means an Award granted under Section 10 of the Plan.
3
<PAGE> 4
2.22 SUBSIDIARY
"Subsidiary," except as expressly provided otherwise, means any entity
that is directly or indirectly controlled by the Company or in which the
Company has a significant ownership interest, as determined by the Committee,
and any entity that may become a direct or indirect parent of the Company.
SECTION 3. ADMINISTRATION
3.1 COMMITTEE
The Plan shall be administered by the Compensation Committee or such
other committee designated by the Board consisting of one or more members of,
the Board. The Board may delegate the responsibility for administering the
Plan with respect to designated classes of eligible Participants to different
committees, subject to such limitations as the Board deems appropriate.
Committee members shall serve for such term as the Board may determine, subject
to removal by the Board at any time. The composition of any committee
responsible for administering the Plan with respect to officers and directors
of the Company who are subject to Section 16 of the Exchange Act with respect
to securities of the Company shall comply with the requirements of Rule 16b-3
promulgated under Section 16(b) of the Exchange Act, or any successor
provision.
3.2 ADMINISTRATION AND INTERPRETATION BY THE COMMITTEE
Except for the terms and conditions explicitly set forth in the Plan,
the Committee shall have exclusive authority, in its discretion, to determine
all matters relating to Awards under the Plan, including the selection of
individuals to be granted Awards, the type of Awards, the number of shares of
Common Stock subject to an Award, all terms, conditions, restrictions and
limitations, if any, of an Award and the terms of any instrument that evidences
the Award. The Committee shall also have exclusive authority to interpret the
Plan and may from time to time adopt, and change, rules and regulations of
general application for the Plan's administration. The Committee's
interpretation of the Plan and its rules and regulations, and all actions taken
and determinations made by the Committee pursuant to the Plan, shall be
conclusive and binding on all parties involved or affected. The Committee may
delegate administrative duties to such of the Company's officers as it so
determines.
SECTION 4. STOCK SUBJECT TO THE PLAN
4.1 AUTHORIZED NUMBER OF SHARES
Subject to adjustment from time to time as provided in Section 13.1,
the aggregate amount of Common Stock to be delivered upon the exercise of all
Awards granted under this Plan shall not exceed 2,000,000 shares of Common
Stock. Shares issued under the Plan shall be drawn from authorized and
unissued shares or shares now held or subsequently acquired by the Company as
treasury shares.
4.2 LIMITATIONS
(a) Subject to adjustments from time to time as provided in
Section 13 of the Plan, not more than an aggregate of 650,000 shares shall be
available for issuance pursuant to grants of Stock Awards under the Plan.
(b) Subject to adjustments from time to time as provided in
Section 13 of the Plan, not more than 200,000 shares of Common Stock may be
made subject to Awards under the Plan to any individual Participant in the
aggregate over the term of the Plan, such limitation to be applied in a manner
consistent with the requirements of, and only to the extent required for
compliance with, the exclusion from limitation on deductibility of compensation
under Section 162(m) of the Code.
4
<PAGE> 5
(c) Subject to adjustments from time to time as provided in
Section 9.7 of the Plan, not more than an aggregate of 300,000 shares of Common
Stock shall be available for issuance upon exercise of Options granted to
Directors under Section 9.
4.3 REUSE OF SHARES
Any shares of Common Stock that have been made subject to an Award
that cease to be subject to the Award (other than by reason of exercise or
payment of the Award to the extent it is exercised for or settled in shares),
including, without limitation, in connection with the cancellation of an Award
and the grant of a replacement Award, shall again be available for issuance in
connection with future grants of Awards under the Plan.
SECTION 5. ELIGIBILITY
Awards may be granted under the Plan to those officers, directors and
employees of the Company and its Subsidiaries as the Committee from time to
time selects; provided, however that Directors who are not also employees of
the Company shall be eligible to receive Awards only under Section 9 of the
Plan. Awards may also be granted under the Plan to consultants, agents,
advisors and independent contractors who provide services to the Company and
its Subsidiaries.
SECTION 6. AWARDS
The Committee shall have the authority, in its sole discretion, to
determine the type or types of Awards to be made under the Plan. Such Awards
may include, but are not limited to, Incentive Stock Options, Nonqualified
Stock Options and Restricted Stock Awards. Awards may also be made in
combination or in tandem with, in replacement of, as alternatives to, or as the
payment form for, grants or rights under any other employee or compensation
plan of the Company.
SECTION 7. AWARDS OF OPTIONS
7.1 GRANT OF OPTIONS
The Committee is authorized under the Plan, in its sole discretion, to
issue Options as Incentive Stock Options or as Nonqualified Stock Options,
which shall be appropriately designated.
7.2 OPTION EXERCISE PRICE
The exercise price for shares purchased under an Option shall be as
determined by the Committee, but shall not be less than 100% of the Fair Market
Value of the Common Stock on the Grant Date with respect to Incentive Stock
Options and not less than 85% of the Fair Market Value of the Common Stock on
the Grant Date with respect to Nonqualified Stock Options.
7.3 TERM OF OPTIONS
The term of each Option shall be as established by the Committee or,
if not so established, shall be 10 years from the Grant Date.
7.4 EXERCISE OF OPTIONS
The Committee shall establish and set forth in each instrument that
evidences an Option the time at which or the installments in which the Option
shall become exercisable, which provisions may be waived or modified by
5
<PAGE> 6
the Committee at any time. If not so established in the instrument evidencing
the Option, the Option will become exercisable according to the following
schedule, which may be waived or modified by the Committee at any time:
<TABLE>
<CAPTION>
PERIOD OF HOLDER'S
CONTINUOUS EMPLOYMENT OR
SERVICE WITH THE COMPANY OR
ITS SUBSIDIARIES FROM THE PERCENT OF TOTAL OPTION
OPTION GRANT DATE THAT
--------------------------- IS EXERCISABLE
-----------------------
<S> <C>
after 1 year 20%
after 2 years 40%
after 3 years 60%
after 4 years 80%
after 5 years 100%
</TABLE>
To the extent that the right to purchase shares has accrued
thereunder, an Option may be exercised from time to time by written notice to
the Company, in accordance with procedures established by the Committee,
setting forth the number of shares with respect to which the Option is being
exercised and accompanied by payment in full as described in Section 7.5. In
no case may an Option be exercised as to less than 100 shares at any one time
(or the lesser number of remaining shares covered by the Option).
7.5 PAYMENT OF EXERCISE PRICE
The exercise price for shares purchased under an Option shall be paid
in full to the Company by delivery of consideration equal to the product of the
Option exercise price and the number of shares purchased. Such consideration
must be paid in cash, except that the Committee may, either at the time the
Option is granted or at any time before it is exercised and subject to such
limitations as the Committee may determine, authorize payment in cash and/or
one or more of the following alternative forms: (a) Common Stock already owned
by the Holder for at least six months (or any shorter period necessary to avoid
a charge to the Company's earnings for financial reporting purposes) having a
Fair Market Value on the day prior to the exercise date equal to the aggregate
Option exercise price; (b) delivery of a properly executed exercise notice,
together with irrevocable instructions, to (i) a brokerage firm designated by
the Company to deliver promptly to the Company the aggregate amount of sale or
loan proceeds to pay the Option exercise price and any withholding tax
obligations that may arise in connection with the exercise and (ii) the Company
to deliver the certificates for such purchased shares directly to such
brokerage firm, all in accordance with the regulations of the Federal Reserve
Board; or (c) such other consideration as the Committee may permit.
7.6 POST-TERMINATION EXERCISES
7.6.1 GENERAL
The Committee shall establish and set forth in each instrument that
evidences an Option whether the Option will continue to be exercisable, and the
terms and conditions of such exercise, if a Holder ceases to be employed by, or
to provide services to, the Company or its Subsidiaries, which provisions may
be waived or modified by the Committee at any time. If not so established in
the instrument evidencing the Option, the Option will be exercisable according
to the following terms and conditions, which may be waived or modified by the
Committee at any time.
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7.6.2 NONQUALIFIED STOCK OPTIONS
A. TERMINATION UPON RETIREMENT, EARLY RETIREMENT, DEATH
OR DISABILITY
Upon termination of the Holder's employment or services with the
Company due to Retirement, Early Retirement at the Company's request, death or
Disability, and unless by its terms the Nonqualified Stock Option sooner
terminates or expires, the Holder (or, in the case of death, the Holder's
personal representative) may exercise for a one year period that portion of the
Holder's Nonqualified Stock Option which is exercisable at the time of such
termination.
B. TERMINATION FOR CAUSE
Upon termination of the Holder's employment or services for Cause, the
Nonqualified Stock Option shall automatically terminate upon the first
notification to the Holder of such termination, unless the Committee determines
otherwise.
C. TERMINATION FOR OTHER REASONS
Upon termination of the Holder's employment or services for any reason
other than Retirement, Early Retirement at the Company's request, death,
Disability or Cause, and unless by its terms the Nonqualified Stock Option
sooner terminates or expires, the Holder may exercise for a three-month period
that portion of the Holder's Nonqualified Stock Option which is exercisable at
the time of such termination; provided, however, if the Holder is an executive
officer or director, the holding period shall be seven months.
7.6.3 INCENTIVE STOCK OPTIONS
A. TERMINATION UPON DEATH OR DISABILITY
Upon termination of the Holder's employment or services with the
Company due to death or Disability, and unless by its terms the Incentive Stock
Option sooner terminates or expires, the Holder may exercise for one-year
period that portion of the Holder's Incentive Stock Option which is exercisable
at the time of such termination.
B. TERMINATION FOR CAUSE
Upon termination of the Holder's employment or services for Cause, the
Incentive Stock Option shall automatically terminate upon the first
notification to the Holder of such termination, unless the Committee determines
otherwise.
C. TERMINATION FOR OTHER REASON
Upon termination of the Holder's employment or services for any reason
other than death, Disability or Cause, and unless by its terms the Incentive
Stock Option sooner terminates or expires, the Holder (or, in the case of
death, the Holder's personal representative) may exercise for a three-month
period that portion of the Holder's Incentive Stock Options which is
exercisable at the time of such termination.
SECTION 8. INCENTIVE STOCK OPTION LIMITATIONS
To the extent required by Section 422 of the Code, Incentive Stock
Options shall be subject to the following additional terms and conditions:
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8.1 DOLLAR LIMITATION
To the extent the aggregate Fair Market Value (determined as of the
Grant Date) of Common Stock with respect to which Incentive Stock Options are
exercisable for the first time during any calendar year (under the Plan and all
other stock option plans of the Company) exceeds $100,000, such portion in
excess of $100,000 shall be treated as a Nonqualified Stock Option. In the
event the Participant holds two or more such Options that become exercisable
for the first time in the same calendar year, such limitation shall be applied
on the basis of the order in which such Options are granted.
8.2 10% STOCKHOLDERS
If a Participant owns 10% or more of the total voting power of all
classes of the Company's stock, then the exercise price per share of an
Incentive Stock Option shall not be less than 110% of the Fair Market Value of
the Common Stock on the Grant Date and the Option term shall not exceed five
years. For purposes of determining stock ownership, an employee shall be
deemed to own the shares owned by or for his or her siblings, spouse, ancestors
and lineal descendants.
8.3 ELIGIBLE EMPLOYEES
Individuals who are not employees of the Company or one of its parent
corporations or subsidiary corporations may not be granted Incentive Stock
Options. For purposes of this Section 8.3, "parent corporation" and
"subsidiary corporation" shall have the meanings attributed to those terms for
purposes of Section 422 of the Code.
8.4 TERM
The term of an Incentive Stock Option shall not exceed 10 years.
8.5 EXERCISABILITY
An Option designated as an Incentive Stock Option must be exercised
within three months after termination of employment for any reason other than
death or disability or one year after termination of employment or services due
to Disability to qualify for Incentive Stock Option tax treatment. We suggest
Optionees should consult their personal tax advisors for further information.
8.6 TAXATION OF INCENTIVE STOCK OPTION
In order to obtain certain tax benefits afforded to Incentive Stock
Options under Section 422 of the Code, the Participant must hold the shares
issued upon the exercise of an Incentive Stock Option for two years after the
date of grant of the Incentive Stock Option and one year from the date of
exercise. A Participant may be subject to the alternative minimum tax at the
time of exercise of an Incentive Stock Option. The Committee may require a
Participant to give the Company prompt notice of any disposition of shares
acquired by the exercise of an Incentive Stock Option prior to the expiration
of such holding periods.
SECTION 9. AWARDS OF OPTIONS TO DIRECTORS
Notwithstanding any other provision of the Plan to the contrary,
grants to Directors who are not also employees of the Company shall be made
only pursuant to the following terms and conditions:
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<PAGE> 9
9.1 NEW DIRECTOR GRANTS
Each new member of the Board shall automatically receive a
Nonqualified Stock Option to purchase 30,000 Shares of Sierra's Common Stock
immediately following his or her initial election or appointment to the Board
(each a "New Director Grant"). New Director Grants shall vest 20% a year
beginning on the first anniversary of Grant Date until fully vested after five
years. All New Director Grants made prior to shareholder approval of the Plan
shall each be subject to shareholder approval.
9.2 INITIAL GRANTS
Each Director shall receive a Nonqualified Stock Option to purchase
9,000 shares of Sierra's Common Stock on the date this Plan is adopted by the
Board (the "Initial Grants"). The Initial Grants shall vest 20% per year
beginning on the first anniversary of the Grant Date until fully vested after
five years. The Initial Grants shall be subject to stockholder approval.
9.3 ANNUAL GRANTS
Commencing with the 1995 annual meeting of stockholders, each Director
shall automatically receive a Nonqualified Stock Option to purchase 9,000
Shares immediately following each year's annual meeting of stockholders (each
an "Annual Grant"). Annual Grants shall vest 20% per year until fully vested
after five years. All Annual Grants made prior to stockholder approval of the
Plan shall be subject to such approval.
9.4 EXERCISE PRICE
The option exercise price for a Nonqualified Stock Option granted to a
Director under the Plan shall be the Fair Market Value of the Common Stock on
the Grant Date.
9.5 TERM OF OPTIONS
The term of each Nonqualified Stock Option granted to a Director shall
be 10 years from the Grant Date.
9.6 TIME AND MANNER OF EXERCISE OF OPTIONS
(a) Any Option may be exercised by giving written notice, signed
by the person exercising the Option, to the Company stating the number of
shares with respect to which the Option is being exercised, accompanied by
payment in full for such shares, which payment may be in whole or in part (i)
in cash or by check, (ii) in shares of Common Stock already owned for at least
six months by the person exercising the Option, valued at fair market value at
the time of such exercise, or (iii) by delivery of a properly executed exercise
notice, together with irrevocable instructions to a broker, to properly deliver
to the Company the amount of sale or loan proceeds to pay the exercise price,
all in accordance with the regulations of the Federal Reserve Board.
(b) In the event that an optionee ceases to be a Director of the
Company for any reason other than the death of the optionee, the Options
granted to such optionee may be exercised by him or her only within seven
months after the date such optionee ceases to be a Director of the Company.
(c) In the event of the death of an optionee, whether during the
optionee's service as a Director or during the one year period thereafter, the
Options granted to such optionee shall be exercisable, and such Options shall
expire unless exercised within twelve months after the date of the optionee's
death, by the legal representatives or the estate of such optionee, by any
person or persons whom the optionee shall have designated in writing on forms
prescribed by and filed with the Company or, if no such designation has been
made, by the person or persons to whom the optionee's rights have passed by
will or the laws of descent and distribution.
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9.7 ADJUSTMENTS
The aggregate number and class of Shares for which options may be
granted under the Plan, the number and class of Shares covered by each
outstanding option and the exercise price per Share thereof (but not the total
price) shall all be proportionately adjusted for any increase or decrease in
the number of issued Shares resulting from a recapitalization, stock split,
stock dividend, exchange of shares, merger, reorganization, change in corporate
structure or shares of the Company or similar event.
In the event of any adjustment in the number of Shares covered by any
option, any fractional Shares resulting from such adjustment shall be
disregarded and each such option shall cover only the number of full Shares
resulting from such adjustment.
SECTION 10. STOCK AWARDS
10.1 GRANT OF STOCK AWARDS
The Committee is authorized to make Awards of Common Stock to
Participants on such terms and conditions and subject to such restrictions, if
any (whether based on performance standards, periods of service or otherwise),
as the Committee shall determine, which terms, conditions and restrictions
shall be set forth in the instrument evidencing the Award. The terms,
conditions and restrictions that the Committee shall have the power to
determine shall include, without limitation, the manner in which shares subject
to Stock Awards are held during the periods they are subject to restrictions
and the circumstances under which forfeiture of Restricted Stock shall occur by
reason of termination of the Holder's services.
10.2 ISSUANCE OF SHARES
Upon the satisfaction of any terms, conditions and restrictions
prescribed in respect to a Stock Award, or upon the Holder's release from any
terms, conditions and restrictions of a Stock Award, as determined by the
Committee, the Company shall deliver, as soon as practicable, to the Holder,
or, in the case of the Holder's death, to the personal representative of the
Holder's estate or as the appropriate court directs, a stock certificate for
the appropriate number of shares of Common Stock.
10.3 WAIVER OF RESTRICTIONS
Notwithstanding any other provisions of the Plan, the Committee may,
in its sole discretion, waive the forfeiture period and any other terms,
conditions or restrictions on any Restricted Stock under such circumstances and
subject to such terms and conditions as the Committee shall deem appropriate.
SECTION 11. WITHHOLDING OF TAXES
The Company may require the Holder to pay to the Company the amount of
any withholding taxes that the Company is required to withhold with respect to
the grant, exercise, payment or settlement of any Award. In such instances,
the Committee may, in its discretion and subject to the Plan and applicable
law, permit the Holder to satisfy withholding obligations, in whole or in part,
by paying cash, by electing to have the Company withhold shares of Common
Stock, by transferring shares of Common Stock to the Company in such amounts as
are equivalent to the Fair Market Value of the withholding obligation or by
delivery of a properly executed exercise notice, together with irrevocable
instructions to a broker, to properly deliver to the Company the correct sale
or loan proceeds to pay the exercise price and withholding tax obligation, all
in accordance with the regulations of the Federal Reserve Board.
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<PAGE> 11
SECTION 12. ASSIGNABILITY
No Option granted under the Plan may be assigned or transferred by the
Holder other than by will or by the laws of descent and distribution, and,
during the Holder's lifetime, such Awards may be exercised only by the Holder.
Notwithstanding the foregoing, and to the extent permitted by Rule 16b-3 under
the Exchange Act and Section 422 of the Code, the Committee, in its sole
discretion, may permit such assignment, transfer and exercisability and may
permit a Holder of such Awards to designate a beneficiary who may exercise the
Award or receive compensation under the Award after the Holder's death.
SECTION 13. ADJUSTMENTS
13.1 ADJUSTMENT OF SHARES
In the event that at any time or from time to time a stock dividend,
stock split, spin-off, combination or exchange of shares, recapitalization,
merger, consolidation, distribution to stockholders other than a normal cash
dividend, or other change in the Company's corporate or capital structure
results in (a) the outstanding shares, or any securities exchanged therefor or
received in their place, being exchanged for a different number or class of
securities of the Company or of any other corporation or (b) new, different or
additional securities of the Company or of any other corporation being received
by the holders of shares of Common Stock, then the Committee, in its sole
discretion, shall make such equitable adjustments as it shall deem appropriate
in the circumstances in the (i) maximum number of and class of securities
subject to the Plan as set forth in Section 4.1, (ii) maximum number and class
of securities that may be made subject to Awards to any individual Participant
as set forth in Section 4.2, and (iii) number and class of securities that are
subject to any outstanding Award and the per share price of such securities,
without any change in the aggregate price to be paid therefor. The
determination by the Committee as to the terms of any of the foregoing
adjustments shall be conclusive and binding.
13.2 CORPORATE TRANSACTION
Except as otherwise provided in the instrument that evidences the
Award, in the event of any Corporate Transaction, each Option or Stock Award
that is at the time outstanding shall automatically accelerate so that each
such Award shall, immediately prior to the specified effective date for the
Corporate Transaction, become 100% vested, except that such acceleration will
not occur if in the opinion of the Company's accountants it would render
unavailable "pooling of interest" accounting for a Corporate Transaction that
would otherwise qualify for such accounting treatment. All such Awards shall
terminate and cease to remain outstanding immediately following the
consummation of the Corporate Transaction, except to the extent assumed by the
successor corporation or its parent corporation. Any such Awards that are
assumed or replaced in the Corporate Transaction and do not otherwise
accelerate at that time shall be accelerated in the event the Holder's
employment or services should subsequently terminate within two years following
such Corporate Transaction, unless such employment or services are terminated
by the Company for Cause or by the Holder voluntarily without Good Reason.
Notwithstanding the foregoing, no Incentive Stock Option shall become
exercisable pursuant to this Section 13.2 without the Holder's consent, if the
result would be to cause such Option not to be treated as an Incentive Stock
Option (whether by reason of the annual limitation described in Section 8.1 or
otherwise).
13.3 FURTHER ADJUSTMENT OF AWARDS
Without limiting Section 13.2, the Committee shall have the
discretion, exercisable at any time before a sale, merger, consolidation,
reorganization, liquidation or change in control of the Company, as defined by
the Committee, to take such further action as it determines to be necessary or
advisable, and fair and equitable to Participants, with respect to Awards.
Such authorized action may include (but shall not be limited to) establishing,
amending or waiving the type, terms, conditions or duration of, or restrictions
on, Awards so as to provide for earlier, later, extended or additional time for
exercise, payment or settlement or lifting restrictions, differing methods for
calculating payments or settlements, alternate forms and amounts of payments
and settlements, and
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other modifications, and the Committee may take such actions with respect to
all Participants, to certain categories of Participants or only to individual
Participants. The Committee may take such action before or after granting
Awards to which the action relates and before or after any public announcement
with respect to such sale, merger, consolidation, reorganization, liquidation
or change in control that is the reason for such action.
13.4 LIMITATIONS
The grant of Awards will in no way affect the Company's right to
adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.
SECTION 14. AMENDMENT AND TERMINATION OF PLAN
14.1 AMENDMENT OF PLAN
The Plan may be amended by the stockholders of the Company. The Board
may also amend the Plan in such respects as it shall deem advisable; however,
to the extent required for compliance with Rule 16b-3 under the Exchange Act,
Section 422 of the Code or any applicable law or regulation, stockholder
approval will be required for any amendment that will (a) increase the total
number of shares as to which Options may be granted under the Plan or that may
be issued as Restricted Stock, (b) modify the class of persons eligible to
receive Awards, (c) materially increase the benefits accruing to Participants
under the Plan, or (d) otherwise require stockholder approval under any
applicable law or regulation.
14.2 TERMINATION OF PLAN
The stockholders or the Board may suspend or terminate the Plan at any
time. The Plan will have no fixed expiration date; provided, however, that no
Incentive Stock Options may be granted more than 10 years after the Plan's
effective date.
14.3 CONSENT OF HOLDER
The amendment or termination of the Plan shall not, without the
consent of the Holder of any Award under the Plan, alter or impair any rights
or obligations under any Award previously granted under the Plan.
SECTION 15. GENERAL
15.1 NOTIFICATION
The Committee shall promptly notify a Participant of an Award, and a
written grant shall promptly be executed and delivered by or on behalf of the
Company.
15.2 CONTINUED EMPLOYMENT OR SERVICES; RIGHTS IN AWARDS
Neither the Plan, participation in the Plan as a Participant nor any
action of the Committee taken under the Plan shall be construed as giving any
Participant or employee of the Company any right to be retained in the employ
of the Company or limit the Company's right to terminate the employment or
services of the Participant.
15.3 REGISTRATION; CERTIFICATES FOR SHARES
The Company shall be under no obligation to any Participant to
register for offering or resale under the Securities Act of 1933, as amended,
or register or qualify under state securities laws, any shares of Common Stock,
security or interest in a security paid or issued under, or created by, the
Plan. The Company may issue certificates
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for shares with such legends and subject to such restrictions on transfer and
stop-transfer instructions as counsel for the Company deems necessary or
desirable for compliance by the Company with federal and state securities laws.
15.4 NO RIGHTS AS A STOCKHOLDER
No Option shall entitle the Holder to any dividend, voting or other
right of a stockholder unless and until the date of issuance under the Plan of
the shares that are the subject of such Options, free of all applicable
restrictions.
15.5 COMPLIANCE WITH LAWS AND REGULATIONS
It is the Company's intention that, so long as any of the Company's
equity securities are registered pursuant to Section 12(b) or 12(g) of the
Exchange Act, the Plan shall comply in all respects with Rule 16b-3 under the
Exchange Act, and, if any Plan provision is later found not to be in compliance
with such Rule, the provision shall be deemed null and void, and in all events
the Plan shall be construed in favor of its meeting the requirements of Rule
16b-3. Notwithstanding anything in the Plan to the contrary, the Board, in its
sole discretion, may bifurcate the Plan so as to restrict, limit or condition
the use of any provision of the Plan to Participants who are officers or
directors subject to Section 16 of the Exchange Act without so restricting,
limiting or conditioning the Plan with respect to other Participants.
Additionally, in interpreting and applying the provisions of the Plan, any
Option granted as an Incentive Stock Option pursuant to the Plan shall, to the
extent permitted by law, be construed as an "incentive stock option" within the
meaning of Section 422 of the Code.
15.6 NO TRUST OR FUND
The Plan is intended to constitute an "unfunded" plan. Nothing
contained herein shall require the Company to segregate any monies or other
property, or shares of Common Stock, or to create any trusts, or to make any
special deposits for any immediate or deferred amounts payable to any
Participant, and no Participant shall have any rights that are greater than
those of a general unsecured creditor of the Company.
15.7 SEVERABILITY
If any provision of the Plan or any Award is determined to be invalid,
illegal or unenforceable in any jurisdiction, or as to any person, or would
disqualify the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to
applicable laws, or, if it cannot be so construed or deemed amended without, in
the Committee's determination, materially altering the intent of the Plan or
the Award, such provision shall be stricken as to such jurisdiction, person or
Award, and the remainder of the Plan and any such Award shall remain in full
force and effect.
SECTION 16. EFFECTIVE DATE
The Plan's effective date is the date on which it is adopted by the
Board, so long as it is approved by the Company's stockholders at any time
within 12 months of such adoption or, if earlier, and to the extent required
for compliance with Rule 16b-3 under the Exchange Act, at the next annual
meeting of the Company's stockholders after adoption of the Plan by the Board.
Adopted by the Board on March 7, 1995 and approved by the Company's
stockholders on __________, 1995.
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ATTENTION: THIS EMPLOYEE STOCK PURCHASE PLAN IS SUBJECT TO SHAREHOLDER APPROVAL
AT THE NEXT ANNUAL MEETING OF SHAREHOLDERS (SCHEDULED FOR AUGUST 1995). IF
APPROVAL IS NOT RECEIVED, THIS PLAN WILL AUTOMATICALLY TERMINATE, EFFECTIVE AS
OF THE DATE OF THE ANNUAL MEETING AND ALL MONEY CONTRIBUTED TO ENROLLMENT WILL
BE REFUNDED.
================================================================================
1995 EMPLOYEE STOCK PURCHASE PLAN
================================================================================
Sierra On-Line, Inc. (the "Company") does hereby establish its 1995
Employee Stock Purchase Plan (the "Plan") as follows:
SECTION 1. PURPOSE OF THE PLAN
- --------------------------------------------------------------------------------
The purpose of this Plan is to provide eligible employees who wish to
become shareholders in the Company a convenient method of doing so. It is
believed that employee participation in the ownership of the business will be to
the mutual benefit of both the employees and the Company. It is the intention of
the Company to have the Plan qualify as an "employee stock purchase plan" under
Section 423 of the Internal Revenue Code of 1986 (the "Code"). The provisions of
the Plan shall, accordingly, be construed so as to extend and limit
participation in a manner consistent with the requirements of Section 423 of the
Code.
SECTION 2. DEFINITIONS
- --------------------------------------------------------------------------------
2.1 "Base pay" means regular cash compensation. Regular cash
compensation does not include overtime, commissions, severance pay, hiring and
relocation bonuses, bonuses paid under any bonus plan of the Company, pay in
lieu of vacations, or sick leave or any other special payments.
2.2 "Account" shall mean the funds accumulated with respect to an
individual employee as a result of deductions from employee's paycheck for the
purpose of purchasing stock under this Plan. The funds allocated to an
employee's account shall remain the property of the respective employee at all
times but may be commingled with the general funds of the Company.
SECTION 3. EMPLOYEES ELIGIBLE TO PARTICIPATE
- --------------------------------------------------------------------------------
Any regular employee of the Company or any of its subsidiaries who has
been in the employ of the Company for at least six (6) consecutive months and is
in the employ of the Company on one or more offering dates is eligible to
participate in the Plan, except (a) employees whose customary employment is 20
hours or less per week, and (b) employees whose customary employment is for not
more than five months in any calendar year.
SECTION 4. OFFERINGS
- --------------------------------------------------------------------------------
There will be consecutive six-month offerings pursuant to the Plan,
until the earlier of the termination of the Plan or the date when all (except de
minimus amounts) the shares of Common Stock authorized under this Section 4 to
be delivered upon exercise of options under the Plan have been so delivered. The
first offering shall commence on July 1, 1995 (or a later date designated by the
Board) and terminate on December 31, 1995. Thereafter, offerings shall commence
on each subsequent January 1 and July 1 (the "commencement date"). In order to
become eligible to purchase shares, an employee must sign an Enrollment
Agreement, and any other necessary papers on or before the commencement date
(January 1 or July 1) of the particular offering in which the employee wishes to
participate. Participation in one offering under the Plan shall neither limit,
nor require, participation in any other offering.
SECTION 5. PRICE
- --------------------------------------------------------------------------------
The purchase price per share shall be the lesser of (1) 85% of the fair
market value of the stock on the offering date; or (2) 85% of the fair market
value of the stock on the last trading day of the offering period. Fair market
value shall mean the closing bid price as reported on the National Association
of Securities Dealers Automated Quotation System or, if the stock is traded on a
stock exchange, the closing price for the stock on the principal such exchange.
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SECTION 6. OFFERING DATE
- --------------------------------------------------------------------------------
The "offering date" as used in this Plan shall be the commencement date
of the offering, if such date is a regular business day, or the first regular
business day following such commencement date. A different date may be set by
resolution of the Board.
SECTION 7. NUMBER OF SHARES TO BE OFFERED
- --------------------------------------------------------------------------------
The maximum number of shares that will be offered under the Plan is
200,000. The shares to be sold to participants under the Plan will be Common
Stock of the Company. If the total number of shares for which options are to be
granted on any date in accordance with Section 10 exceeds the number of shares
then available under the Plan (after deduction of all shares for which options
have been exercised or are then outstanding), the Company shall make a pro rata
allocation of the shares remaining available in as nearly a uniform manner as
shall be practicable and as it shall determine to be equitable. In such event,
the payroll deductions to be made pursuant to the authorizations therefor shall
be reduced accordingly and the Company shall give written notice of such
reduction to each employee affected thereby.
SECTION 8. PARTICIPATION
- --------------------------------------------------------------------------------
8.1 An eligible employee may become a participant by completing an
Enrollment Agreement provided by the Company prior to the commencement date of
the offering to which it relates.
8.2 Payroll deductions for a participant shall commence on the offering
date, and shall end on the termination date of such offering unless earlier
terminated by the employee as provided in Paragraph 14.
SECTION 9. PAYROLL DEDUCTIONS
- --------------------------------------------------------------------------------
9.1 At the time an employee files his or her authorization for a
payroll deduction, the employee shall elect to have deductions made from his or
her pay on each payday during the time employee is a participant in an offering
at the rate of 2%, 4%, 6%, 8%, or 10% of employee's base pay.
9.2 All payroll deductions made for a participant shall be credited to
his or her account under the Plan. A participant may not make any separate cash
payment into such account nor may payment for shares be made other than by
payroll deduction.
9.3 A participant may discontinue his or her participation in the Plan
as provided in Section 14, but no other change can be made during an offering
and, specifically, a participant may not alter the rate of his or her payroll
deductions for that offering.
SECTION 10. GRANTING OF OPTION
- --------------------------------------------------------------------------------
On the offering date, this Plan shall be deemed to have granted to the
participant an option for as many shares as participant will be able to purchase
with the payroll deductions credited to participant's account during his or her
participation in that offering. Notwithstanding the foregoing, no participant
may purchase more than 5,000 shares of stock during any single offering.
SECTION 11. EXERCISE OF OPTION
- --------------------------------------------------------------------------------
Each employee who continues to be a participant in an offering on the
last business day of that offering shall be deemed to have exercised his or her
option on such date and shall be deemed to have purchased from the Company such
number of shares of Common Stock reserved for the purpose of the Plan as
participant's accumulated payroll deductions on such date will pay for at the
option price.
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SECTION 12. EMPLOYEE'S RIGHTS AS A SHAREHOLDER
- --------------------------------------------------------------------------------
No participating employee shall have any right as a shareholder with
respect to any shares until the shares have been purchased in accordance with
Section 11 above and the stock has been issued by the Company.
SECTION 13. EVIDENCE OF STOCK OWNERSHIP
- --------------------------------------------------------------------------------
13.1 Promptly following the end of each offering, the number of shares
of Common Stock purchased by each participant shall be deposited into an account
established in the participant's name at a stock brokerage or other financial
services firm designated by the Company (the "ESPP Broker").
13.2 The participant may direct, by written notice to the Company at
the time of his or her enrollment in the Plan, that the participant's ESPP
Broker account be established in the names of the participant and one other
person designated by the participant, as joint tenants with right of
survivorship, tenants in common, or community property, to the extent and in the
manner permitted by applicable law.
13.3 A participant shall be free to undertake a disposition (as that
term is defined in Section 424(c) of the Code) of the shares in his account at
any time, whether by sale, exchange, gift, or other transfer of legal title, but
in the absence of such a disposition of the shares, the shares must remain in
the participant's account at the ESPP Broker until the holding period set forth
in Section 423(a) of the Code has been satisfied. With respect to shares for
which the Section 423(a) holding period has been satisfied, the participant may
move those shares to another brokerage account of participant's choosing or
request that a stock certificate be issued and delivered to him/her.
13.4 A participant who is not subject to payment of U.S. income taxes
may move his or her shares to another brokerage account of his or her choosing
or request that a stock certificate be issued and delivered to him/her at any
time, without regard to the satisfaction of the Section 423(a) holding period.
SECTION 14. WITHDRAWAL
- --------------------------------------------------------------------------------
14.1 An employee may withdraw from an offering, in whole but not in
part, at any time prior to the last business day of such offering by completing
the Withdrawal Form available from the Company, in which event the Company will
refund the entire balance of the employee's deductions as soon as practicable
thereafter.
14.2 To re-enter the Plan, an employee who has previously withdrawn
must file a new Enrollment Agreement in accordance with Section 8.1. The
employee's re-entry into the Plan will not become effective before the beginning
of the next offering following his or her withdrawal.
SECTION 15. CARRYOVER OF ACCOUNT
- --------------------------------------------------------------------------------
At the termination of each offering the Company shall automatically
re-enroll the employee in the next offering, and the balance in the employee's
account (if any) shall be used for option exercises in the new offering, unless
the employee has advised the Company otherwise. Upon termination of the Plan,
the balance of each employee's account shall be refunded to the employee.
SECTION 16. INTEREST
- --------------------------------------------------------------------------------
No interest will be paid or allowed on any money in the accounts of any
participants.
SECTION 17. RIGHTS NOT TRANSFERABLE
- --------------------------------------------------------------------------------
No employee shall be permitted to sell, assign, transfer, pledge, or
otherwise dispose of or encumber either the payroll deductions credited to the
participant's account or any rights with regard to the exercise of an option or
to receive
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<PAGE> 4
shares under the Plan other than by will or the laws of descent and
distribution, and such right and interest shall not be liable for, or subject
to, the debts, contracts, or liabilities of the employee. If any such action is
taken by the employee, or any claim is asserted by any other party in respect of
such right and interest whether by garnishment, levy, attachment or otherwise,
such action or claim will be treated as an election to withdraw from the Plan in
accordance with Section 14.
SECTION 18. TERMINATION OF EMPLOYMENT
- --------------------------------------------------------------------------------
Upon termination of employment for any reason whatsoever, including but
not limited to death or retirement, the balance in the account of a participant
shall be paid to the employee or his estate.
SECTION 19. AMENDMENT OR DISCONTINUANCE OF THE PLAN
- --------------------------------------------------------------------------------
The Board of Directors of the Company (the "Board") shall have the
right to amend, modify, or terminate the Plan at any time without notice,
provided that no employee's existing rights under any offering already made
under Section 4 hereof may be adversely affected thereby, and provided further
that no such amendment of the Plan shall, except as provided in Section 20,
increase above 200,000 the total number of shares to be offered unless
shareholder approval is obtained therefor.
SECTION 20. CHANGES IN CAPITALIZATION
- --------------------------------------------------------------------------------
In the event of reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, offerings of rights, or
any other change in the structure of the Common Stock of the Company, the Board
may make such adjustment, if any, as it may deem appropriate in the number,
kind, and the price of shares available for purchase under the Plan, and in the
number of shares which an employee is entitled to purchase.
SECTION 21. SHARE OWNERSHIP
- --------------------------------------------------------------------------------
Notwithstanding anything herein to the contrary, no employee shall be
permitted to purchase shares through the Plan if such employee, immediately
after such enrollment, owns shares (including all shares which may be purchased
under outstanding options under the Plan) possessing 5% or more of the total
combined voting power or value of all classes of shares of the Company or of its
parent or subsidiary corporations. For the foregoing purposes the rules of
Section 425(d) of the Code shall apply in determining share ownership. In
addition, no employee shall be allowed to purchase any shares under the Plan
which permits employee's rights to purchase shares under all "employee stock
purchase plans" of the Company and its subsidiary corporations, to accrue at a
rate which exceeds $25,000 of the fair market value of such shares (determined
at the time such right to subscribe is granted) for each calendar year in which
such right to participate is outstanding at any time.
SECTION 22. ADMINISTRATION
- --------------------------------------------------------------------------------
The Plan shall be administered by the Board. The Board shall be vested
with full authority to make, administer, and interpret such rules and
regulations as it deems necessary to administer the Plan, and any determination,
decision, or action of the Board in connection with the construction,
interpretation, administration, or application of the Plan shall be final,
conclusive, and binding upon all participants and any and all persons claiming
under or through any participant.
The Board may delegate any or all of its authority hereunder to such
committee as it may designate.
SECTION 23. NOTICES
- --------------------------------------------------------------------------------
All notices or other communications by a participant to the Company
under or in connection with the Plan shall be deemed to have been duly given
when received by Stock Option Administrator of the Company or when received in
the form specified by the Company at the location, or by the person, designated
by the Company for the receipt thereof.
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<PAGE> 5
SECTION 24. TERMINATION OF THE PLAN
- --------------------------------------------------------------------------------
This Plan shall terminate at the earliest of the following:
24.1 The date of the filing of a Statement of Intent to Dissolve by the
Company or the effective date of a merger or consolidation wherein the Company
is not to be the surviving corporation, which merger or consolidation is not
between or among corporations related to the Company. Prior to the occurrence of
either of such events, on such date as the Company may determine, the Company
may permit a participating employee to exercise the option to purchase shares
for as many shares as the balance of his account will allow at the price set
forth in accordance with Section 5. If the employee elects to purchase shares,
the remaining balance of his or her account will be refunded to him after such
purchase.
24.2 The date the Board acts to terminate the Plan in accordance with
Section 19 above.
24.3 The date when all shares reserved under the Plan have been
purchased.
SECTION 25. LIMITATIONS ON SALE OF STOCK PURCHASED UNDER THE PLAN
- --------------------------------------------------------------------------------
The Plan is intended to provide Common Stock for investment and not for
resale.
The Company does not, however, intend to restrict or influence any
employee in the conduct of his or her own affairs. An employee, therefore, may
sell stock purchased under the Plan at any time the employee chooses, subject to
compliance with any applicable Federal or state securities laws. THE EMPLOYEE
ASSUMES THE RISK OF ANY MARKET FLUCTUATIONS IN THE PRICE OF THE STOCK.
SECTION 26. INCOME TAX CONSEQUENCES
- --------------------------------------------------------------------------------
The Plan is designed to qualify as an "employee stock purchase plan"
under Section 423 of the Code. Under Section 423 of the Code, the employee will
not realize taxable income at the time the employee purchases stock under the
Plan. However, the employee may be deemed to receive compensation taxable as
ordinary income in the year in which he or she disposes of the stock or dies
while holding the stock.
The rules applicable to the disposition of stock vary depending upon
whether or not the disposition constitutes a "disqualifying disposition" (i.e.,
a disposition within two years after the first day of the Offering Period in
which the disposed stock was purchased).
If the employee makes a disqualifying disposition, he or she would be
deemed to receive compensation taxable as ordinary income in an amount equal to
the excess of the value of the stock on the purchase date over the amount paid
for the stock, regardless of whether the proceeds of the disposition exceed the
employee's purchase price. In such a case, the employee's cost basis for the
stock would be correspondingly increased by the amount recognized as
compensation by the employee. The Company at the time a disqualifying
disposition is made will collect from the employee the federal income tax
withholding due on the additional compensation. The employee's capital gain or
loss on the sale would be the difference between his or her basis so adjusted
and the proceeds of the sale. Shares must have been held for more than one year
from purchase date in order to be treated as long-term capital gain or loss for
purposes of the maximum capital gains rate.
If the employee should sell his or her stock at a profit and the sale
is not a disqualifying disposition, the employee would recognize as compensation
taxable as ordinary income an amount equal to the lesser of (i) the excess of
the fair market value of the stock on the date of disposition over the
employee's purchase price, or (ii) the "applicable discount" (for purposes of
this section, 15%) applied to the fair market value of the stock on the first
day of the Offering Period in which the stock was purchased. Any profit in
excess of the amount recognized as compensation would be treated as long-term
capital gain for purposes of the maximum capital gains rate. If the sale is at a
loss and is not a disqualifying
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<PAGE> 6
disposition, the difference between the employee's purchase price and the
proceeds of the sale would be a long-term capital loss.
If the employee made a disposition of the stock by gift other than a
disqualifying disposition or if he or she dies at any time while holding the
stock, he or she would be deemed to have received compensation taxable as
ordinary income in an amount equal to the smaller of (i) the applicable discount
applied to the fair market value of the stock on the first day of the Offering
Period in which the stock was purchased, or (ii) the excess, if any, of the fair
market value of the stock on the date of disposition or death, as the case may
be, over the employee's purchase price.
The Company would not be entitled to deduct the amount recognized as
compensation by an employee in computing its federal taxes unless the employee
made a disqualifying disposition of the stock.
INDIVIDUAL TAX IMPLICATIONS ATTENDANT TO PARTICIPATION IN THE PLAN ARE
THE SOLE RESPONSIBILITY OF THE INDIVIDUAL PARTICIPANT. THE BRIEF DISCUSSION OF
FEDERAL TAX CONSEQUENCES PROVIDED ABOVE NOT EXHAUSTIVE. PLEASE NOTE THAT THE
LAW(S) MAY CHANGE AND SPECIAL RULES ARE PROVIDED WITH RESPECT TO SITUATIONS NOT
SPECIFICALLY DISCUSSED HEREIN.
THE COMPANY STRONGLY RECOMMENDS YOU CONSULT WITH A TAX ADVISOR PRIOR TO
COMMENCING ANY TRANSACTION HEREUNDER.
SECTION 27. GOVERNMENTAL REGULATION
- --------------------------------------------------------------------------------
The Company's obligation to sell and deliver shares of the Company's
Common Stock under this Plan is subject to the approval of any governmental
authority required in connection with the authorization, issuance, or sale of
such shares.
6
<PAGE> 1
SIERRA ON-LINE, INC.
RESTRICTED STOCK AWARD LETTER AGREEMENT
TO: _________________________________
We are pleased to inform you that you have been selected by Sierra
On-Line, Inc. (the "Company") to receive a restricted stock award (the
"Restricted Stock Award") for __________ shares of the Company's Common Stock.
The terms of the Restricted Stock Award are as set forth in this
Agreement:
DATE OF GRANT: The date of grant of the Restricted Stock Award is
___________, 1995.
CONSIDERATION FOR RESTRICTED STOCK AWARD: As required by the Delaware
General Corporation Law, consideration not less than the par value of the
Company's common stock, or $.01 per share, has been paid by you to the Company
for the Restricted Stock Award, in the form of services previously rendered.
VESTING: The Restricted Stock Award is subject to forfeiture upon
your termination of employment with the Company for cause ("cause" means
dishonesty, fraud, misconduct, unauthorized use or disclosure of confidential
information or trade secrets, or conviction or confession of a crime punishable
by law (except minor violations), in each case as determined by the Company,
and its determination shall be conclusive and binding), or for any other reason
other than termination without cause, death, disability or retirement or early
retirement at the Company's request (as the terms "disability" and "retirement"
are defined for purposes of the Company's Profit Sharing Plan and the term
"early retirement" is defined by the administrator of the 1995 Stock Option and
Award Plan). The Restricted Stock Award shall vest and be no longer subject to
forfeiture on May 31, 1996.
EARLY LAPSE OF RESTRICTIONS: The Restricted Stock Award shall become
fully vested and shall no longer be subject to forfeiture upon (i) the
termination of your employment by the Company without cause, (ii) the
termination of your employment by reason of your death, disability or
retirement, (iii) any merger or consolidation of the Company in which the
Company is not the continuing or surviving corporation or pursuant to which
shares of the Company's common stock are converted into cash, securities or
other property, other than a merger of the Company in which the holders of the
common stock immediately prior to the merger have substantially the same
<PAGE> 2
proportionate ownership of common stock of the surviving corporation
immediately after the merger, (iv) any sale, lease, exchange or other transfer
in one transaction or a series of related transactions of all or substantially
all of the Company's assets other than a transfer of the Company's assets to a
majority-owned subsidiary (as the term "subsidiary" is defined for purposes of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") of
the Company, (v) approval by the holders of the common stock of any plan or
proposal for the liquidation or dissolution of the Company, or (vi) an
unforeseeable emergency as determined by the administrator of the Plan in
accordance with Treasury Regulations Section 1.457-2(h)(4); provided, that in
the case of subparagraphs (iii), (iv) and (v) above, the restrictions on the
Restricted Stock Award shall not lapse if and to the extent: (a) such
Restricted Stock Award is either to be assumed by the successor corporation or
parent thereof or to be replaced with a comparable award for the purchase of
shares of the capital stock of the successor corporation or its parent
corporation, or (b) such Restricted Stock Award is to be replaced with a cash
incentive program of the successor corporation that preserves the spread
existing at the time of the transaction and provides for subsequent payout in
accordance with the same vesting schedule applicable to such Restricted Stock
Award. The determination of Restricted Stock Award comparability under clause
(a) above shall be made by the Company, and its determination shall be
conclusive and binding. Any such Restricted Stock Awards that are assumed or
replaced in the transaction and do not otherwise vest at that time shall be
vested in the event the employee's employment or services should subsequently
terminate within two years following such transaction, unless such employment
or services are terminated by the Company for cause.
HOLDING PERIOD: If an individual subject to Section 16 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") sells shares
of the Restricted Stock Award within six months after the date the Restricted
Stock Award was granted, such sale may result in short-swing profit recovery
under Section 16(b) of the Exchange Act.
WITHHOLDING TAXES: You agree to pay to the Company, at the applicable
time, the full amount of withholding taxes payable with respect to the
Restricted Stock Award. If any withholding tax is due at the time the
restrictions have lapsed, no stock certificate will be delivered to you until
withholding requirements have been satisfied. The Company is authorized to
retain and withhold from any payment, such as salary due you, the amount of
taxes required by any governmental agency to be withheld and paid with respect
to the delivery of restricted or unrestricted shares to you.
SECTION 83(b) ELECTION FOR RESTRICTED STOCK AWARD: You understand
that under Code Section 83 the excess of the fair market value of the
Restricted Stock Award on the date any forfeiture restrictions applicable to
such shares lapse over the consideration paid for the Restricted Stock Award
will be reportable as ordinary income on the lapse
2
<PAGE> 3
date. You understand that you may elect under Code Section 83(b) to be taxed
at the time the Restricted Stock Award is acquired hereunder, rather than when
and as the Restricted Stock Award ceases to be subject to such forfeiture
restrictions. Such election must be filed with the Internal Revenue Service
within thirty (30) days after the date of grant of the Restricted Stock Award.
The Company has furnished to you additional information regarding the Code
Section 83(b) election. YOU UNDERSTAND THAT FAILURE TO MAKE THIS FILING WITHIN
THE APPLICABLE THIRTY (30) DAY PERIOD WILL RESULT IN THE RECOGNITION OF
ORDINARY INCOME BY YOU AS THE FORFEITURE RESTRICTIONS LAPSE.
TRANSFER OF STOCK AWARD: Your rights hereunder may not be assigned or
transferred except by will or by the laws of descent or distribution. In the
event of any attempt by you to sell, exchange, transfer, pledge or otherwise
dispose of the Restricted Stock Award in violation of the provisions hereof,
the Restricted Stock Award shall be forfeited to the Company.
ADJUSTMENT OF SHARES: In the event that at any time or from time to
time a stock dividend, stock split, spin-off, combination or exchange of
shares, recapitalization, merger, consolidation, distribution to stockholders
other than a normal cash dividend, or other change in the Company's corporate
or capital structure results in (a) the outstanding shares, or any securities
exchanged therefor or received in their place, being exchanged for a different
number or class of securities of the Company or of any other corporation or (b)
new, different or additional securities of the Company or of any other
corporation being received by the holders of shares of Common Stock, then the
Board of Directors of the Company, in its sole discretion, shall make such
equitable adjustments as it shall deem appropriate in the circumstances in the
number and class of securities that are subject to the Restricted Stock Award
and the per share price of such securities, without any change in the aggregate
price to be paid therefor. The determination by the Board of Directors of the
Company as to the terms of the foregoing adjustments shall be conclusive and
binding.
CONTINUED EMPLOYMENT OR SERVICES: Neither the Restricted Stock Award
nor any action of the Company taken under the Restricted Stock Award shall be
construed as giving you any right to be retained in the employ of the Company
or limit the Company's right to terminate your employment or services.
RETENTION OF STOCK CERTIFICATE(S): The stock certificate(s)
representing the Restricted Stock Award will be retained by the Company until
the Restricted Stock Award is no longer subject to forfeiture. If any portion
of the Restricted Stock Award is forfeited, the forfeited shares will be
transferred to the Company. The attached
3
<PAGE> 4
Assignment Separate From Certificate will be used to effect the transfer only
in the event of forfeiture.
Please execute the Acceptance and Acknowledgment set forth below on
the enclosed copy of this Agreement and the attached Assignment Separate From
Certificate attached to this Agreement and return them to the undersigned.
Very truly yours,
SIERRA ON-LINE, INC.
By________________________________
Its ____________________________
4
<PAGE> 5
ACCEPTANCE AND ACKNOWLEDGMENT
I, a resident of the State of ___________________, accept the
Restricted Stock Award described above and acknowledge receipt of a copy of
this Agreement.
Dated: ___________________
<TABLE>
<S> <C>
________________________ _____________________________
Taxpayer I.D. Number ___________________
Address______________________
_____________________________
_____________________________
</TABLE>
By his or her signature below, the spouse of the employee signing
above, if such employee is legally married as of the date of his or her
execution of this Agreement, acknowledges that he or she has read this
Agreement and is familiar with the terms and provisions thereof, and agrees to
be bound by all the terms and conditions of this Agreement.
Dated: _________________
__________________________________
Spouse's Signature
__________________________________
Printed Name
By his or her signature below, the employee represents that he or she
is not legally married as of the date of execution of this Agreement.
Dated: _________________
__________________________________
Employee's Signature
5
<PAGE> 6
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, the undersigned hereby assigns and transfers unto
__________________________________________, _________ shares of the Common
Stock of ___________________________________ represented by certificate No.
_______ standing in the undersigned's name on the books of said corporation.
The undersigned hereby irrevocably constitutes and appoints
_________________________________________________ to transfer said shares on
the books of said corporation with full power of substitution in the premises.
DATED: ______________________
_____________________________________
____________________________________
[Print Legal Name Above]
