<PAGE> 1
As filed with the Securities and Exchange Commission on May 17, 1996
Registration No. 333-
----
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
IDENTIX INCORPORATED
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-2842496
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
510 NORTH PASTORIA AVENUE, SUNNYVALE, CALIFORNIA 94086
(Address of principal executive offices)
EQUITY INCENTIVE PLAN
NONEMPLOYEE DIRECTORS STOCK OPTION PLAN
(Full title of the plans)
JAMES P. SCULLION
IDENTIX INCORPORATED
510 NORTH PASTORIA AVENUE
SUNNYVALE, CALIFORNIA 94086
(Name and address of agent for service)
(408) 739-2000
(Telephone number, including area code, of agent for service)
Copy to: Richard Friedman
Heller Ehrman White & McAuliffe
525 University Avenue
Palo Alto, California 94301-1900
(415) 324-7000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price per offering registration
registered registered share (1) price fee
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
no par value 1,250,000 $16.1875 $20,234,375 $6,978.00
===================================================================================================
</TABLE>
(1) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(c) under the Securities Act of
1933, as amended, and based on the average of the high and low prices
reported on the American Stock Exchange on May 10, 1996.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed or to be filed with the Commission by
Identix Incorporated are incorporated by reference in this registration
statement:
(a) The registrant's latest annual report (Form 10-K) filed pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), or the latest prospectus filed
pursuant to Rule 424(b) under the Securities Act of 1933, as
amended (the "Securities Act") that contains audited financial
statements for the registrant's latest fiscal year for which such
statements have been filed;
(b) All other reports filed by the registrant pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the fiscal
year covered by the annual report or prospectus referred to in
(a) above;
(c) The description of the Common Stock of the registrant contained
in the registration statement filed under the Exchange Act
registering such Common Stock under Section 12 of the Exchange
Act.
All documents subsequently filed by the registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this registration statement and to
be part thereof 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
Section 317 of the California Corporations Code (the "Code") permits a
corporation to include in its charter documents and in agreements between the
corporation and its directors and officers, indemnity in terms sufficiently
broad to permit indemnification under certain circumstances for liabilities
(including reimbursement for expenses incurred) arising under the Securities
Act.
-2-
<PAGE> 3
Article IV of the Registrant's Articles of Incorporation provides:
"The liability of the directors of this corporation for monetary
damages shall be eliminated to the fullest extent permissible under California
law. This corporation is also authorized, to the fullest extent permissible
under California law, to indemnify its agents (as defined in Section 317 of the
California Corporations Code), whether by bylaw, agreement or otherwise in
excess of the indemnification expressly permitted by Section 317 and to advance
defense expenses to its agents in connection with such matters, as they are
incurred. If, after the effective date of this Article, California law is
amended in a manner which permits a corporation to limit the monetary or other
liability of its directors or to authorize indemnification of, or advancement of
such defense expenses to, its directors or other persons, in any such case to a
greater extent than is permitted on such effective date, the references in this
Article to "California law" shall to that extent be deemed to refer to
California law as so amended."
Article VI of the Registrant's By-laws provides:
"Section 1: INDEMNIFICATION. As authorized by the articles of
incorporation, to the fullest extent permissible under California law and in
excess of that which is expressly permitted by Section 317 of the California
Corporations Code (the "Code"), the corporation shall indemnify its directors
and officers against all expenses, judgments, fines, settlements and other
amounts actually and reasonably incurred by them in connection with any
proceeding, including an action by or in the right of the corporation, by reason
of the fact that such person is or was a director or officer of the corporation,
or is or was serving at the request of the corporation as a director, officer,
trustee, employee or agent of another corporation, or of a partnership, joint
venture, trust or other enterprise (including service with respect to employee
benefit plants). To the fullest extent permissible under California law,
expenses incurred by a director or officer seeking indemnification under this
bylaw in defending any proceeding shall be advanced by the corporation as they
are incurred upon receipt by the corporation of an undertaking or on behalf of
the director or officer to repay such amount if it shall ultimately be
determined that the director or officer is not entitled to be indemnified by the
corporation for those expenses. If, after the effective date of this bylaw,
California law is amended in a manner which permits the corporation to authorize
indemnification of, or advancement of expenses to, its directors or officers, in
any such case to a greater extent than is permitted on such effective date, the
references in this bylaw to "California law" shall to that extent be deemed to
refer to California law as so amended. The rights granted by this bylaw are
contractual in nature and, as such, may not be altered with respect to any
present or former director of officer without the written consent of that
person.
Section 2. PROCEDURE. Upon written request to the Board of Directors
by a person seeking indemnification under this bylaw, the Board shall promptly
determine in accordance with Section 317(e) of the Code whether the applicable
standard of conduct has been met and, if so, the Board shall authorize
indemnification. If the Board cannot authorize indemnification because the
number of directors who are parties to the
-3-
<PAGE> 4
proceeding with respect to which indemnification is sought prevents the
formation of a quorum of directors who are not parties to the
proceeding, then, upon written request by the person seeking
indemnification, independent legal counsel (by means of a written
opinion obtained at the corporation's expense) or the corporation's
shareholders shall determine whether the applicable standard
of conduct has been met and, if so, shall authorize indemnification.
Section 3. DEFINITIONS. The term "proceeding" means any threatened,
pending or completed action or proceeding, whether civil, criminal,
administrative or investigative. The term "expenses" includes, without
limitation, attorneys' fees and any expenses of establishing a right to
indemnification."
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
Item 8. EXHIBITS
5 Opinion of Heller Ehrman White & McAuliffe
23.1 Consent of Heller Ehrman White & McAuliffe (filed as part of
Exhibit 5)
23.2 Consent of Independent Accountants
24 Power of Attorney
99.1 Identix Incorporated Equity Incentive Plan
99.2 Identix Incorporated Nonemployee Directors Stock Option Plan
Item 9. UNDERTAKINGS
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
registration statement;
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
registration statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth in
the registration statement;
-4-
<PAGE> 5
(iii) To include any material information with respect
to the plan of distribution not previously
disclosed in the registration statement or any
material change to such information in the
registration statement;
provided, however, that paragraphs A(1)(i) and A(1)(ii) do not
apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13
or 15(d) of the Exchange Act that are incorporated by reference
in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement
relating to the securities offered therein, and the
offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining liability under the Securities Act, each filing of the registrant's
annual report pursuant to Section 13(a) or 15(d) of the Exchange Act that is
incorporated by reference in the registration statement shall be deemed 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 provisions described in Item 6, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
-5-
<PAGE> 6
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 Sunnyvale, State of California, on this 17th day
of May, 1996.
IDENTIX INCORPORATED
By: /s/ James P. Scullion
------------------------------------------
James P. Scullion, Vice President, Finance,
Chief Financial Officer and Secretary
POWER OF ATTORNEY TO SIGN AMENDMENTS
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below does hereby constitute and appoint Randall C. Fowler and James P.
Scullion, and each of them, with full power of substitution and full power to
act without the other such person's true and lawful attorney-in-fact and agent
for such person in such person's name, place and stead, in any and all
capacities, to sign any or all amendments (including post-effective amendments)
to this Registration Statement on Form S-8 and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises
in order to effectuate the same as fully, to all intents and purposes, as they
or such person might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, may lawfully do or cause
to be done by virtue hereof.
6
<PAGE> 7
Pursuant to the requirements of the Securities Act, this Registration
Statement on Form S-8 has been signed by the following persons in the capacities
and on the dates indicated.
/s/RANDALL C. FOWLER Chairman of the Board of May 17, 1996
- ---------------------- Directors, Chief Executive Officer
Randall C. Fowler and President (Principal
Executive Officer)
/s/JAMES P. SCULLION Vice President, Finance, May 17, 1996
- ---------------------- Chief Financial Officer and
James P. Scullion Secretary (Principal Accounting
Officer)
Director May , 1996
- ----------------------
Patrick H. Morton
/s/RANDALL HAWKS, JR. Director May 16, 1996
- ----------------------
Randall Hawks, Jr.
- ---------------------- Director May , 1996
Fred J. Sutter
/s/LARRY J. WELLS Director May 15, 1996
- ----------------------
Larry J. Wells
/s/HARRISON N. WALTHER Director May 16, 1996
- ----------------------
Harrison N. Walther
/s/ED ZSCHAU Director May 16, 1996
- ----------------------
Ed Zschau
7
<PAGE> 8
INDEX TO EXHIBITS
-----------------
<TABLE>
<CAPTION>
Item No. Description of Item
- -------- -------------------
<S> <C>
5 Opinion of Heller Ehrman White & McAuliffe ...........................
23.1 Consent of Heller Ehrman White & McAuliffe (filed as part of
Exhibit 5)...........................................................
23.2 Consent of Independent Accountants ...................................
24 Power of Attorney (See page 6 of Form 10-Q)..........................
99.1 Identix Incorporated Equity Incentive Plan ...........................
99.2 Identix Incorporated Nonemployee Directors Stock Option Plan..........
</TABLE>
<PAGE> 1
Exhibit 5
May 16, 1996
17506-0001
Identix Incorporated
510 North Pastoria Avenue
Sunnyvale, California 94086
Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to Identix Incorporated, a California
corporation (the "Company"), in connection with the Registration Statement on
Form S-8 (the "Registration Statement") which the Company proposes to file with
the Securities and Exchange Commission on or about May 16, 1996, for the purpose
of registering under the Securities Act of 1933, as amended, an aggregate of
1,250,000 shares of its no par value Common Stock (the "Shares"). The Shares are
issuable upon exercise of options to purchase Common Stock under the Identix
Incorporated Equity Incentive Plan and the Nonemployee Directors Stock Option
Plan (the "Plans").
In connection with this opinion, we have assumed the authenticity of
all records, documents and instruments submitted to us as originals, the
genuineness of all signatures, the legal capacity of natural persons and the
conformity to the originals of all records, documents and instruments submitted
to us as copies. We have based our opinion upon our review of the following
records, documents and instruments:
(a) The Amended and Restated Articles of Incorporation of the Company
certified by the Secretary of State of the State of California as
of May 15, 1996 and certified to us by the Chief Financial
Officer and Secretary of the Company as being complete and in
full force and effect as of the date of this opinion;
<PAGE> 2
Identix Incorporated
May 16, 1996 Page 2
(b) The Bylaws of the Company certified to us by the Chief Financial
Officer and Secretary of the Company as being complete and in
full force and effect as of the date of this opinion;
(c) A Certificate of the Chief Financial Officer and Secretary of the
Company (i) attaching records certified to us as constituting all
records of proceedings and actions of the Board of Directors and
shareholders of the Company relating to the issuance of the
Shares and adoption and approval of the Plans, and (ii)
certifying as to certain factual matters;
(d) A Certificate of Chemical Mellon Shareholder Services Company of
California, the transfer agent of the Company, as to the number
of shares of Common Stock of the Company outstanding as of May
14, 1996; and
(e) The Plans.
This opinion is limited to the laws of the State of California. We
disclaim any opinion as to any other statute, rule, regulation, ordinance, order
or other promulgation of any other jurisdiction or any regional or local
governmental body.
Based upon the foregoing and our examination of such questions of law
as we have deemed necessary or appropriate for the purpose of this opinion, and
assuming that (i) the Registration Statement becomes and remains effective
during the period when the Shares are offered, issued and sold, (ii) the Shares
to be sold are issued in accordance with the terms of the Plans, (iii) the
Company receives the full consideration for the Shares as stated in the Plans,
and (iv) all applicable securities laws are complied with, it is our opinion
that the Shares covered by the Registration Statement when issued by the Company
will be validly issued, fully paid and nonassessable.
This opinion is rendered to you in connection with the Registration
Statement and is solely for your benefit. This opinion may not be relied upon by
you for any other purpose, or relied upon by any other person, firm, corporation
or other entity for any purpose, without our prior written consent. We disclaim
any obligation to advise you of any developments that occur after the date of
this opinion.
<PAGE> 3
Identix Incorporated
May 16, 1996 Page 3
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ HELLER EHRMAN WHITE & MCAULIFFE
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated July 31, 1995 appearing
on Page 32 of the 1995 Annual Report to Shareholders of Identix Incorporated,
which is incorporated by reference in Identix Incorporated's Annual Report on
Form 10-K for the year ended June 30, 1995. We also consent to the
incorporation by reference of our report on the Financial Statement Schedule,
which appears on page 19 of such Annual Report on Form 10-K.
PRICE WATERHOUSE LLP
San Jose, California
May 16, 1996
<PAGE> 1
Exhibit 99.1
IDENTIX INCORPORATED
EQUITY INCENTIVE PLAN
SECTION 1. PURPOSE; DEFINITIONS.
(a) Purpose. The purpose of the Plan is to provide selected eligible
employees of, and consultants to, Identix Incorporated, a California
corporation, its subsidiaries and affiliates an opportunity to participate in
the Company's future by offering them an opportunity to acquire stock in the
Company so as to retain, attract and motivate them.
(b) Definitions. For purposes of the Plan, the following terms have the
following meanings:
(i) "Award" means any award under the Plan, including any
Option, Restricted Stock, Stock Purchase Right or Performance Share Award.
(ii) "Award Agreement" means, with respect to each Award, the
signed written agreement between the Company and the Plan participant setting
forth the terms and conditions of the Award.
(iii) "Board" means the Board of Directors of the Company.
(iv) "Change in Control" has the meaning set forth in Section
9(a).
(v) "Change in Control Price" has the meaning set forth in
Section 9(c).
(vi) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor statute.
(vii) "Commission" means the Securities and Exchange Commission
and any successor agency.
(viii) "Committee" means the Committee referred to in Section 2, or
the Board in its capacity as administrator of the Plan in accordance with
Section 2.
(ix) "Company" means Identix Incorporated, a California
corporation.
(x) "Disability" means permanent and total disability as
determined by the Committee for purposes of the Plan.
(xi) "Disinterested Person" has the meaning set forth in Rule
16b-3(c)(2)(i) under the Exchange Act, and any successor definition adopted by
the Commission.
1
<PAGE> 2
(xii) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
(xiii) "Fair Market Value" means as of any given date (a) if the
Stock is listed on any established stock exchange or a national market system,
the closing sales price for the Stock or the closing bid if no sales were
reported, as quoted on such system or exchange, as reported in the Wall Street
Journal; or (b) in the absence of an established market for the Stock, the fair
market value of the Stock as determined by the Committee in good faith.
(xiv) "Incentive Stock Option" means any Option intended to be and
designated as an "incentive stock option" within the meaning of Section 422 of
the Code.
(xv) "Nonqualified Stock Option" means any Option that is not an
Incentive Stock Option.
(xvi) "Option" means an option granted under Section 5.
(xvii) "Performance Period" means the period determined by the
Committee under Section 8(a).
(xviii) "Performance Share" means the equivalent, as of any time
such assessment is made, of the Fair Market Value of one share of Stock.
(xix) "Performance Share Award" means an Award under Section 8.
(xx) "Plan" means this Identix Incorporated Equity Incentive
Plan, as amended from time to time.
(xxi) "Restricted Stock" means an Award of Stock subject to
restrictions, as more fully described in Section 6.
(xxii) "Restriction Period" means the period determined by the
Committee under Section 6(b).
(xxiii) "Rule 16b-3" means Rule 16b-3 under Section 16(b) of the
Exchange Act, as amended from time to time, and any successor rule.
(xxiv) "Stock" means the no par value Common Stock of the Company,
and any successor security.
(xxv) "Stock Purchase Right" means an Award granted under Section
7.
(xxvi) "Subsidiary" has the meaning set forth in Section 424 of the
Code.
(xxvii) "Tax Date" means the date defined in Section 10(f).
2
<PAGE> 3
(xxviii) "Termination" means, for purposes of the Plan, with respect
to a participant, that the participant has ceased to be, for any reason,
employed by, or consulting to, the Company, a subsidiary or an affiliate;
provided, that for purposes of this definition, if so determined by the
President of the Company, in his sole discretion, Termination shall not include
a change in status from an employee of, to a consultant to, the Company or any
subsidiary or affiliate, or vice versa.
SECTION 2. ADMINISTRATION.
(a) Committee. The Plan shall be administered by the Board or, upon
delegation by the Board, by a committee of the Board appointed by the Board. In
connection with the administration of the Plan, the Committee shall have the
powers possessed by the Board. The Committee may act only by a majority of its
members, except that the Committee may from time to time select another
committee or one or more other persons to be responsible for any matters for
which Disinterested Persons are not required pursuant to Rule 16b-3. The Board
at any time may abolish the Committee and revest in the Board the administration
of the Plan.
(b) Authority. The Committee shall grant Awards to eligible employees
and consultants. In particular and without limitation, the Committee, subject to
the terms of the Plan, shall:
(i) select the officers, other key employees and consultants to
whom Awards may be granted;
(ii) determine whether and to what extent Awards are to be
granted under the Plan;
(iii) determine the number of shares to be covered by each Award
granted under the Plan;
(iv) determine the terms and conditions of any Award granted
under the Plan and any related loans to be made by the Company, based upon
factors determined by the Committee; and
(v) determine to what extent and under what circumstances any
Award payments may be deferred by a participant.
(c) Committee Determinations Binding. The Committee may adopt, alter and
repeal administrative rules, guidelines and practices governing the Plan as it
from time to time shall deem advisable, may interpret the terms and provisions
of the Plan, any Award and any Award Agreement and may otherwise supervise the
administration of the Plan. Any determination made by the Committee pursuant to
the provisions of the Plan with respect to any Award shall be made in its sole
discretion at the time of the grant of the Award or, unless in contravention of
any
3
<PAGE> 4
express term of the Plan or Award, at any later time. All decisions made by the
Committee under the Plan shall be binding on all persons, including the Company
and Plan participants.
SECTION 3. STOCK SUBJECT TO PLAN.
(a) Number of Shares. The total number of shares of Stock reserved and
available for issuance pursuant to Awards under this Plan shall be 1,000,000
shares. Such shares may consist, in whole or in part, of authorized and unissued
shares or treasury shares or shares reacquired in private transactions or open
market purchases, but all shares issued under the Plan, regardless of source
shall be counted against the 1,000,000 share limitation. If any Option
terminates or expires without being exercised in full or if any shares of Stock
subject to an Award are forfeited, or if an Award otherwise terminates without a
payment being made to the participant in the form of Stock, the shares issuable
under such Option or Award shall again be available for issuance in connection
with Awards. To the extent an Award is paid in cash, the number of shares of
Stock representing, at Fair Market Value on the date of the payment, the value
of the cash payment shall not be available for later grant under the Plan. Any
Award under this Plan shall be governed by the terms of the Plan and any
applicable Award Agreement.
(b) Adjustments. In the event of any merger, reorganization,
consolidation, recapitalization, stock dividend, stock split or other change in
corporate structure affecting the Stock, such substitution or adjustments shall
be made in the aggregate number of shares of Stock reserved for issuance under
the Plan, in the number and exercise price of shares subject to outstanding
Options, and in the number of shares subject to other outstanding Awards, as may
be determined to be appropriate by the Committee, in its sole discretion;
provided, however, that the number of shares subject to any Award shall always
be a whole number.
SECTION 4. ELIGIBILITY.
Awards may be granted to officers and other key employees of, and
consultants to, the Company, its subsidiaries and affiliates (excluding members
of the Committee and any person who serves only as a director).
SECTION 5. STOCK OPTIONS.
(a) Types. Any Option granted under the Plan shall be in such form as
the Committee may from time to time approve. The Committee shall have the
authority to grant to any participant Incentive Stock Options, Nonqualified
Stock Options or both types of Options. Incentive Stock Options may be granted
only to employees of the Company, its parent (within the meaning of Section
424(e) of the Code) or Subsidiaries. Any portion of an Option that is not
designated as, or does not qualify as, an Incentive Stock Option shall
constitute a Nonqualified Stock Option.
4
<PAGE> 5
(b) Terms and Conditions. Options granted under the Plan shall be
subject to the following terms and conditions:
(i) Option Term. The term of each Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more than ten (10)
years after the date the Option is granted, and no Nonqualified Stock Option
shall be exercisable more than fifteen (15) years after the date the Option is
granted. If, at the time the Company grants an Incentive Stock Option, the
optionee owns directly or by attribution stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company, or any
parent or Subsidiary of the Company, the Incentive Stock Option shall not be
exercisable more than five (5) years after the date of grant.
(ii) Grant Date. The Company may grant Options under the Plan at
any time and from time to time before the Plan terminates. The Committee shall
specify the date of grant or, if it fails to, the date of grant shall be the
date of action taken by the Committee to grant the Option. However, if an Option
is approved in anticipation of employment, the date of grant shall be the date
the intended optionee is first treated as an employee for payroll purposes.
(iii) Exercise Price. The exercise price per share of Stock
purchasable under an Option shall be equal to at least 85% of the Fair Market
Value on the date of grant, and in the case of Incentive Stock Options shall be
equal to at least the Fair Market Value on the date of grant; provided, however,
that if, at the time the Company grants an Incentive Stock Option, the optionee
owns directly or by attribution stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company, or any parent or
Subsidiary of the Company, then the exercise price shall be not less than 110%
of the Fair Market Value on the date the Incentive Stock Option is granted.
(iv) Exercisability. Subject to the other provisions of the
Plan, an Option shall be exercisable in its entirety at grant or at such times
and in such amounts as are specified in the Award Agreement evidencing the
Option. The Committee, in its absolute discretion, at any time may waive any
limitations respecting the time at which an Option first becomes exercisable in
whole or in part.
(v) Method of Exercise; Payment. To the extent the right to
purchase shares has accrued, Options may be exercised, in whole or in part, from
time to time, by written notice from the optionee to the Company stating the
number of shares being purchased, accompanied by payment of the exercise price
for the shares.
(vi) No Disqualification. Notwithstanding any other provision in
the Plan, no term of the Plan relating to Incentive Stock Options shall be
interpreted, amended or altered nor shall any discretion or authority granted
under the Plan be exercised so as to disqualify the Plan under Section 422 of
the Code or, without
5
<PAGE> 6
the consent of the optionee affected, to disqualify any Incentive Stock Option
under such Section 422.
SECTION 6. RESTRICTED STOCK.
(a) Price. The Committee may grant to a participant Restricted Stock.
The grantee shall pay no consideration therefor.
(b) Restrictions. Subject to the provisions of the Plan and the Award
Agreement, during the Restriction Period set by the Committee, commencing with,
and not exceeding ten (10) years from, the date of such Award, the participant
shall not be permitted to sell, assign, transfer, pledge or otherwise encumber
shares of Restricted Stock. Within these limits, the Committee may provide for
the lapse of such restrictions in installments and may accelerate or waive such
restrictions, in whole or in part, based on service, performance or such other
factors or criteria as the Committee may determine.
(c) Dividends. Unless otherwise determined by the Committee, with
respect to dividends on shares of Restricted Stock, dividends payable in cash
shall be automatically reinvested in additional Restricted Stock, and dividends
payable in Stock shall be paid in the form of Restricted Stock.
(d) Termination. Except to the extent otherwise provided in the Award
Agreement and pursuant to Section 6(b), in the event of a Termination during the
Restriction Period, all shares still subject to restriction shall be forfeited
by the participant.
SECTION 7. STOCK PURCHASE RIGHTS.
(a) Price. The Committee may grant Stock Purchase Rights which shall
enable the recipients to purchase Stock at a price equal to not less than 85% of
its Fair Market Value on the date of grant.
(b) Exercisability. Stock Purchase Rights shall be exercisable for a
period determined by the Committee not exceeding 30 days from the date of the
grant. The Committee, however, may provide that if required under Rule 16b-3
Stock Purchase Rights granted to persons subject to Section 16(b) of the
Exchange Act shall not become exercisable until six months and one day after the
grant date and shall then be exercisable for 10 trading days at the purchase
price specified by the Committee in accordance with Section 7(a).
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SECTION 8. PERFORMANCE SHARES.
(a) Awards. The Committee shall determine the nature, length and
starting date of the Performance Period for each Performance Share Award, which
period shall be at least one (1) year (subject to Section 9) and not more than
six (6) years. The consideration payable by a participant with respect to a
Performance Share Award shall be an amount determined by the Committee in the
exercise of the Committee's discretion at the time of the Award; provided, that
the amount of consideration may be zero and may in no event exceed 50% of the
Fair Market Value at the time of grant. The Committee shall determine the
performance objectives to be used in awarding Performance Shares and the extent
to which such Performance Shares have been earned. Performance Periods may
overlap and participants may participate simultaneously with respect to
Performance Share Awards that are subject to different Performance Periods and
different performance factors and criteria. At the beginning of each Performance
Period, the Committee shall determine for each Performance Share Award subject
to such Performance Period the number of shares of Stock (which may consist of
Restricted Stock) to be awarded to the participant at the end of the Performance
Period if and to the extent that the relevant measures of performance for such
Performance Share Award are met. Such number of shares of Stock may be fixed or
may vary in accordance with such performance or other criteria as may be
determined by the Committee. The Committee may provide that (i) amounts
equivalent to interest at such rates as the Committee may determine, or (ii)
amounts equivalent to dividends paid by the Company upon outstanding Stock shall
be payable with respect to Performance Share Awards.
(b) Termination. Except as otherwise provided in the Award Agreement or
determined by the Committee, in the event of a Termination during a Performance
Period, the participant shall not be entitled to any payment with respect to the
Performance Shares subject to the Performance Period.
(c) Form of Payment. Payment shall be made in the form of cash or whole
shares of Stock, as the Committee, in its discretion, shall determine.
SECTION 9. CHANGE IN CONTROL.
(a) Definition of "Change in Control". For purposes of Section 9(b), a
"Change in Control" means the occurrence of any one of the following:
(i) Any "person", as such term is used in Sections 13(d) and
14(d) of the Exchange Act (other than the Company, a subsidiary, an affiliate,
or a Company employee benefit plan, including any trustee of such plan acting as
trustee) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the Company's then
outstanding securities;
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<PAGE> 8
(ii) the solicitation of proxies (within the meaning of Rule
14a-1(k) under the Exchange Act and any successor rule) with respect to the
election of any director of the Company where such solicitation is for any
candidate who is not a candidate proposed by a majority of the Board in office
prior to the time of such election; or
(iii) the dissolution or liquidation (partial or total) of the
Company or a sale of assets involving 30% or more of the assets of the Company,
any merger or reorganization of the Company whether or not another entity is the
survivor, a transaction pursuant to which the holders, as a group, of all of the
shares of the Company outstanding prior to the transaction hold, as a group,
less than 70% of the shares of the Company outstanding after the transaction, or
any other event which the Board determines, in its discretion, would materially
alter the structure of the Company or its ownership.
(b) Impact of Event. In the event of a "Change in Control" as defined in
Section 9(a), but only if and to the extent so specifically determined by the
Board in its discretion, which determination may be amended or reversed only by
the affirmative vote of a majority of the persons who were directors at the time
such determination was made, acceleration and valuation provisions no more
favorable to participants than the following may apply:
(i) Subject to Section 5(b)(vi), any Options outstanding as of
the date such Change in Control is determined to have occurred and not then
exercisable and vested shall become fully exercisable and vested.
(ii) The restrictions and limitations applicable to any
Restricted Stock and Stock Purchase Rights shall lapse, and such Restricted
Stock shall become fully vested.
(iii) The value (net of any exercise price) of all outstanding
Options, Restricted Stock and Stock Purchase Rights, unless otherwise determined
by the Committee at or after grant and subject to Rule 16b-3, shall be cashed
out on the basis of the "Change in Control Price", as defined in Section 9(c),
as of the date such Change in Control is determined to have occurred or such
other date as the Board may determine prior to the Change in Control.
(iv) Any outstanding Performance Share Awards shall be vested
and paid in full as if all performance criteria had been met.
(c) Change in Control Price. For purposes of this Section 9, "Change in
Control Price" means the highest price per share paid in any transaction
reported on the National Market System of the National Association of Securities
Dealers, Inc. Automated Quotation System or paid or offered in any bona fide
transaction related to a potential or actual Change in Control of the Company at
any time during the preceding 60-day period as determined by the Board, except
that, in
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the case of Incentive Stock Options, such price shall be based only on
transactions reported for the date on which the Board decides to cash out such
Options.
SECTION 10. GENERAL PROVISIONS.
(a) Award Grants. Any Award may be granted either alone or in addition
to other Awards granted under the Plan. Subject to the terms and restrictions
set forth elsewhere in the Plan, the Committee shall determine the
consideration, if any, payable by the participant for any Award and, in addition
to those set forth in the Plan, any other terms and conditions of the Awards.
The Committee may condition the grant or payment of any Award upon the
attainment of specified performance goals or such other factors or criteria,
including vesting based on continued employment or consulting, as the Committee
shall determine. Performance objectives may vary from participant to participant
and among groups of participants and shall be based upon such Company,
subsidiary, group or division factors or criteria as the Committee may deem
appropriate, including, but not limited to, earnings per share or return on
equity. The other provisions of Awards also need not be the same with respect to
each recipient. Unless specified otherwise in the Plan or by the Committee, the
date of grant of an Award shall be the date of action by the Committee to grant
the Award. The Committee may also substitute new Options for previously granted
Options, including previously granted Options having higher exercise prices.
(b) Award Agreement. As soon as practicable after the date of an Award
grant, the Company and the participant shall enter into a written Award
Agreement identifying the date of grant, and specifying the terms and conditions
of the Award. Options are not exercisable until after execution of the Award
agreement by the Company and the Plan participant, but a delay in execution of
the agreement shall not affect the validity of the Option grant.
(c) Certificates. All certificates for shares of Stock or other
securities delivered under the Plan shall be subject to such stock transfer
orders, legends and other restrictions as the Committee may deem advisable under
the rules, regulations and other requirements of the Commission, any market in
which the Stock is then traded and any applicable federal, state or foreign
securities law.
(d) Termination. Unless otherwise provided in the applicable Award
Agreement or by the Committee, in the event of Termination for any reason other
than death, retirement or Disability, Awards held at the date of Termination
(and only to the extent then exercisable or payable, as the case may be) may be
exercised in whole or in part at any time within three (3) months after the date
of Termination, or such lesser period specified in the Award Agreement (but in
no event after the expiration date of the Award), but not thereafter. If
Termination is due to retirement or to death or Disability, Awards held at the
date of Termination (and only to the extent then exercisable or payable, as the
case may be) may be exercised in whole or in part by the participant in the case
of retirement or Disability, by the participant's guardian or legal
representative or by the person to
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whom the Award is transferred by will or the laws of descent and distribution,
at any time within two (2) years from the date of Termination or any lesser
period specified in the Award Agreement (but in no event after the expiration of
the Award).
(e) Delivery of Purchase Price. If and only to the extent authorized by
the Committee, participants may make all or any portion of any payment due to
the Company
(i) with respect to the consideration payable for an Award,
(ii) upon exercise of an Award, or
(iii) with respect to federal, state, local or foreign tax
payable in connection with an Award,
by delivery of (x) cash, (y) check, or (z) any property other than cash
(including a promissory note of the participant or shares of Stock or
securities) so long as, if applicable, such property constitutes valid
consideration for the Stock under, and otherwise complies with, applicable law.
No promissory note under the Plan shall have a term (including extensions) of
more than five years or shall be of a principal amount exceeding 90% of the
purchase price paid by the borrower.
(f) Tax Withholding. Any shares or other securities so withheld or
tendered will be valued by the Committee as of the date they are withheld or
tendered; provided, however, that Stock shall be valued at Fair Market Value on
such date. The value of the shares withheld or tendered may not exceed the
required federal, state, local and foreign withholding tax obligations as
computed by the Company. Unless the Committee permits otherwise, the participant
shall pay to the Company in cash, promptly when the amount of such obligations
becomes determinable (the "Tax Date"), all applicable federal, state, local and
foreign withholding taxes that the Committee in its discretion determines to
result, (i) from the lapse of restrictions imposed upon an Award, (ii) upon
exercise of an Award, or (iii) from a transfer or other disposition of shares
acquired upon exercise or payment of an Award, or otherwise related to the Award
or the shares acquired in connection with an Award.
A participant who has received an Award or payment under an Award
may, to the extent, if any, authorized by the Committee in its discretion, make
an election to (x) deliver to the Company a promissory note of the participant
on the terms set forth in Section 10(e), or (y) tender any such securities to
the Company to pay the amount of tax that the Committee in its discretion
determines to be required to be withheld by the Company subject to the following
limitations:
(i) such election shall be irrevocable;
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<PAGE> 11
(ii) such election shall be subject to the disapproval of the
Committee;
(iii) in the case of participants subject to Section 16(b) of the
Exchange Act, such tender may not be made within six (6) months of the
acquisition of the securities to be tendered to satisfy the tax withholding
obligation (except that this limitation shall not apply in the event of death or
Disability of such person before the six-month period expires); and
(iv) in the case of participants subject to Section 16(b) of the
Exchange Act, such election must be made in any ten-day period beginning on the
third business day following the date of release for publication of quarterly or
annual summary statements of sales and earnings.
(g) No Transferability. No Award shall be assignable or otherwise
transferable by the participant other than by will or by the laws of descent and
distribution. During the life of a participant, an Award shall be exercisable,
and any elections with respect to an Award may be made, only by the participant
or participant's guardian or legal representative.
(h) Adjustment of Awards; Waivers. Subject to Section 5(b)(vi), the
Committee may adjust the performance goals and measurements applicable to Awards
(i) to take into account changes in law and accounting and tax rules, (ii) to
make such adjustments as the Committee deems necessary or appropriate to reflect
the inclusion or exclusion of the impact of extraordinary or unusual items,
events or circumstances in order to avoid windfalls or hardships, and (iii) to
make such adjustments as the Committee deems necessary or appropriate to reflect
any material changes in business conditions. In the event of hardship or other
special circumstances of a participant and otherwise in its discretion, the
Committee may waive in whole or in part any or all restrictions, conditions,
vesting, or forfeiture with respect to any Award granted to such participant.
(i) Non-Competition. The Committee may condition its discretionary
waiver of a forfeiture, the acceleration of vesting at the time of Termination
of a participant holding any unexercised or unearned Award, the waiver of
restrictions on any Award, or the extension of the expiration period to a period
not longer than that provided by the Plan upon such participant's agreement (and
compliance with such agreement) to (i) not engage in any business or activity
competitive with any business or activity conducted by the Company and (ii) be
available for consultations at the request of the Company's management, all on
such terms and conditions (including conditions in addition to (i) and (ii)) as
the Committee may determine.
(j) Dividends. The reinvestment of dividends in additional Stock or
Restricted Stock at the time of any dividend payment pursuant to Section 6(c)
shall only be permissible if sufficient shares of Stock are available under
Section 3 for such reinvestment (taking into account then outstanding Awards).
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(k) Regulatory Compliance. Each Award under the Plan shall be subject to
the condition that, if at any time the Committee shall determine that (i) the
listing, registration or qualification of the shares of Stock upon any
securities exchange or for trading in any securities market or under any state
or federal law, (ii) the consent or approval of any government or regulatory
body or (iii) an agreement by the participant with respect thereto, is necessary
or desirable, then such Award shall not be consummated in whole or in part
unless such listing, registration, qualification, consent, approval or agreement
shall have been effected or obtained free of any conditions not acceptable to
the Committee.
(l) Rights as Shareholder. Unless the Plan or the Committee expressly
specifies otherwise, an optionee shall have no rights as a shareholder with
respect to any shares covered by an Award until the stock certificates
representing the shares are actually delivered to the optionee. Subject to
Sections 3(b) and 6(c), no adjustment shall be made for dividends or other
rights for which the record date is prior to the date the certificates are
delivered.
(m) Beneficiary Designation. The Committee, in its discretion, may
establish procedures for a participant to designate a beneficiary to whom any
amounts payable in the event of the participant's death are to be paid.
(n) Additional Plans. Nothing contained in the Plan shall prevent the
Company, a subsidiary or an affiliate from adopting other or additional
compensation arrangements for its employees and consultants.
(o) No Employment Rights. The adoption of the Plan shall not confer upon
any employee any right to continued employment nor shall it interfere in any way
with the right of the Company, a subsidiary or an affiliate to terminate the
employment of any employee at any time.
(p) Rule 16b-3. Notwithstanding any provision of the Plan, the Plan
shall always be administered, and Awards shall always be granted and exercised,
in such a manner as to conform to the provisions of Rule 16b-3.
(q) Governing Law. The Plan and all Awards shall be governed by and
construed in accordance with the laws of the State of California.
(r) Use of Proceeds. All cash proceeds to the Company under the Plan
shall constitute general funds of the Company.
(s) Unfunded Status of Plan. The Plan shall constitute an "unfunded"
plan for incentive and deferred compensation. The Committee may authorize the
creation of trusts or arrangements to meet the obligations created under the
Plan to deliver Stock or make payments; provided, however, that unless the
Committee otherwise determines, the existence of such trusts or other
arrangements shall be consistent with the "unfunded" status of the Plan.
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<PAGE> 13
(t) Assumption by Successor. The obligations of the Company under the
Plan and under any outstanding Award may be assumed by any successor
corporation, which for purposes of the Plan shall be included within the meaning
of "Company".
(u) Limitation on Award Grants to Certain Executive Officers. The
Company may not in any one fiscal year grant Awards under the Plan for more than
200,000 shares to any executive officer whose compensation is required to be
disclosed under Item 402 of Regulation S-K.
SECTION 11. AMENDMENTS AND TERMINATION.
The Board may amend, alter or discontinue the Plan or any Award, but no
amendment, alteration or discontinuance shall be made which would impair the
rights of a participant under an outstanding Award without the participant's
consent. In addition, to the extent required for the Plan to comply with Rule
16b-3 or, with respect to provisions solely as they relate to Incentive Stock
Options, to the extent required for the Plan to comply with Section 422 of the
Code, the Board may not amend or alter the Plan without the approval of a
majority of the voting power of the shares of the Company entitled to vote at a
duly held shareholders' meeting or by an action by written consent and, if at a
meeting, a quorum of the voting power of the Company is represented in person or
by proxy, where such amendment or alteration would:
(a) except as expressly provided in the Plan, increase the total number
of shares reserved for issuance pursuant to Awards under the Plan;
(b) except as expressly provided in the Plan, change the minimum price
terms of Section 5(b)(iii);
(c) change the class of employees and consultants eligible to
participate in the Plan;
(d) extend the maximum Option period under Section 5(b)(i); or
(e) materially increase the benefits accruing to participants under the
Plan.
SECTION 12. EFFECTIVE DATE OF PLAN.
The Plan shall be effective on the date it is adopted by the Board but
all Awards shall be conditioned upon approval of the Plan (a) at a duly held
shareholders' meeting by the affirmative vote of the holders of a majority of
the voting power of the shares of the Company entitled to vote and represented
in person or by proxy at the meeting, or (b) by an action by written consent of
the holders of a majority of the voting power of the shares of the Company
entitled to vote.
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SECTION 13. TERM OF PLAN.
No Award shall be granted on or after July 5, 2005, but Awards granted
prior to July 5, 2005 may extend beyond that date.
Plan, as approved by the Board of Directors on July 5, 1995.
Plan, as approved by the Shareholders on October 26, 1995.
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<PAGE> 1
Exhibit 99.2
IDENTIX INCORPORATED
NONEMPLOYEE DIRECTORS STOCK OPTION PLAN
1. Purpose.
The purpose of this Plan is to offer Nonemployee Directors of
Identix Incorporated an opportunity to acquire a proprietary interest in the
success of the Company, or to increase such interest, by purchasing shares of
the Company's Common Stock. This Plan provides for the grant of Options to
purchase Shares. Options granted hereunder shall be "Nonstatutory Options," and
shall not include "incentive stock options" intended to qualify for treatment
under Sections 421 and 422 of the Internal Revenue Code of 1986, as amended.
2. Definitions.
As used herein, the following definitions shall apply:
(a) "Administrator" shall mean the entity, either the Board or
the committee of the Board, responsible for administering this Plan, as provided
in Section 3.
(b) "Affiliate" means a parent or subsidiary corporation as
defined in the applicable provisions (currently, Sections 424(e) and (f),
respectively) of the Code.
(c) "Board" shall mean the Board of Directors of the Company,
as constituted from time to time.
(d) "Change in Control" shall mean the occurrence of any one
of the following:
(i) any "person", as such term is used in Sections
13(d) and 14(d) of the Exchange Act (other than the Company, an Affiliate, or a
Company employee benefit plan, including any trustee of such plan acting as
trustee) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the Company's then
outstanding securities;
(ii) the solicitation of proxies (within the meaning
of Rule 14a-1(k) under the Exchange Act and any successor rule) with respect to
the election of any director of the Company where such solicitation is for any
candidate who is not a candidate proposed by a majority of the Board in office
prior to the time of such election; or
(iii) the dissolution or liquidation (partial or
total) of the Company or a sale of assets involving 30% or more of the assets of
the Company,
<PAGE> 2
or any merger or reorganization of the Company, whether or not another entity is
the survivor, or other transaction pursuant to which the holders, as a group, of
all of the shares of the Company outstanding prior to the transaction hold, as a
group, less than 70% of the shares of the Company outstanding after the
transaction.
(e) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute.
(f) "Company" shall mean Identix Incorporated, a California
corporation.
(g) "Common Stock" shall mean the Common Stock of the Company.
(h) "Disability" means permanent and total disability as
determined by the Administrator in accordance with the standards set forth in
Section 22(e)(3) of the Code.
(i) "Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time, and any successor statute.
(j) "Expiration Date" shall mean the last day of the term of
an Option established under Section 6(c).
(k) "Fair Market Value" means as of any given date (a) the
closing price of the Common Stock on American Stock Exchange, Inc. as reported
in the Wall Street Journal; or (b) if the Common Stock is no longer quoted on
American Stock Exchange, Inc. but is listed on another established stock
exchange or quoted on any established interdealer quotation system, the closing
price for the Common Stock on such exchange or system, as reported in the Wall
Street Journal.
(l) "Nonemployee Director" shall mean any person who is a
member of the Board but is not an employee of the Company or any Affiliate of
the Company and has not been an employee of the Company or any Affiliate of the
Company at any time during the preceding twelve months. Service as a director
does not in itself constitute employment for purposes of this definition.
(m) "Option" shall mean a stock option granted pursuant to
this Plan. Each Option shall be a nonstatutory option not intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code.
(n) "Option Agreement" shall mean the written agreement
described in Section 6 evidencing the grant of an Option to a Nonemployee
Director and containing the terms, conditions and restrictions pertaining to
such Option.
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(o) "Optionee" shall mean a Nonemployee Director who holds an
Option.
(p) "Plan" shall mean this Identix Incorporated Nonemployee
Directors Stock Option Plan, as it may be amended from time to time.
(q) "Section" unless the context clearly indicates otherwise,
shall refer to a Section of this Plan.
(r) "Shares" shall mean the shares of Common Stock subject to
an Option granted under this Plan.
(s) "Tax Date" means the date defined in Section 7(c).
(t) "Termination" means, for purposes of the Plan, with
respect to an Optionee, that the Optionee has ceased to be, for any reason, a
director of the Company.
(u) "Window Period" means any 10-day period beginning on the
third business day following the date of release for publication of the
Company's quarterly or annual summary statements of earnings or such other
period as is specified in Rule 16b-3(e) under the Exchange Act, as such rule may
be amended from time to time, or any successor to such rule.
3. Administration.
(a) Administrator. The Plan shall be administered by the Board
or, upon delegation by the Board, by a committee consisting of not less than two
directors (in either case, the "Administrator"). The Administrator shall have no
authority, discretion or power to select the Nonemployee Directors who will
receive Options hereunder or to set the number of shares to be covered by each
Option granted hereunder, the exercise price of such Option, the timing of the
grant of such Option or the period within which such Option may be exercised. In
connection with the administration of the Plan, the Administrator shall have the
powers possessed by the Board. The Administrator may act only by a majority of
its members. The Administrator may delegate administrative duties to such
employees of the Company as it deems proper, so long as such delegation is not
otherwise prohibited by Rule 16b-3 under the Exchange Act. The Board at any time
may terminate the authority delegated to any committee of the Board pursuant to
this Section 3(a) and revest in the Board the administration of the Plan.
(b) Administrator Determinations Binding. Subject to the
limitations set forth in Section 3(a), the Administrator may adopt, alter and
repeal administrative rules, guidelines and practices governing the Plan as it
from time to time shall deem advisable, may interpret the terms and provisions
of the Plan, any Option and any Option Agreement and may otherwise supervise the
administration of the Plan. All decisions made by the Administrator under the
Plan shall be
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<PAGE> 4
binding on all persons, including the Company and Optionees. No member of the
Administrator shall be liable for any action that he or she has in good faith
taken or failed to take with respect to this Plan or any Option.
4. Eligibility.
Only Nonemployee Directors may receive Options under this
Plan.
5. Shares Subject to Plan.
(a) Aggregate Number. Subject to Section 9, the total number
of shares of Common Stock reserved and available for issuance pursuant to
Options under this Plan shall be 250,000 shares. Such shares may consist, in
whole or in part, of authorized and unissued shares or shares reacquired in
private transactions or open market purchases, but all shares issued under the
Plan regardless of source shall be counted against the 250,000 share limitation.
If any Option terminates or expires without being exercised in full, the shares
issuable under such Option shall again be available for issuance in connection
with other Options. If shares of Common Stock issued pursuant to an Option are
repurchased by the Company, such Common Stock shall not again be available for
issuance in connection with Options. To the extent the number of shares of
Common Stock issued pursuant to an Option is reduced to satisfy withholding tax
obligations, the number of shares withheld to satisfy the withholding tax
obligations shall not be available for later grant under the Plan.
(b) No Rights as a Shareholder. An Optionee shall have no
rights as a shareholder with respect to any Shares covered by his or her Option
until the issuance (as evidenced by the appropriate entry on the books of the
Company or its duly authorized transfer agent) of a stock certificate evidencing
such Shares. Subject to Section 9, no adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property),
distributions, or other rights for which the record date is prior to the date
the certificate is issued.
6. Grant of Options.
(a) Mandatory Option Grants upon Adoption of the Plan. Subject
to the terms and conditions of this Plan, the Company shall, upon adoption of
this Plan, grant to each Nonemployee Director an Option to purchase 20,000
shares of Common Stock at an exercise price equal to the Fair Market Value of
such Shares on the date of adoption.
(b) Mandatory Initial Option Grants. Subject to the terms and
conditions of this Plan, if any person who is not, and has not been in the
preceding twelve months, an officer or employee of the Company is elected or
appointed as a member of the Board, then on the effective date of such
appointment or election the Company shall grant to such new Nonemployee
Director: (i) an Option to purchase 10,000 Shares at an exercise price equal to
the Fair Market Value of
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such Shares on the date of such option grant if less than six months have
elapsed since the Company's last annual meeting of the shareholders or (ii) an
Option to purchase 5,000 shares of Common Stock if at least six months have
elapsed since the Company's last annual meeting of shareholders.
(c) Mandatory Annual Option Grants. Subject to the terms and
conditions of this Plan, on the date of the first meeting of the Board
immediately following the annual meeting of shareholders of the Company (even if
held on the same day as the meeting of shareholders) commencing with the annual
meeting of shareholders held in 1996, the Company shall grant to each such
Nonemployee Director then in office an Option to purchase 10,000 Shares at an
exercise price equal to the Fair Market Value of such Shares on the date of such
option grant.
(d) Terms; Vesting. Subject to the other provisions of this
Plan, each Option granted pursuant to this Plan shall be for a term of ten
years. Each Option granted under this Plan shall become exercisable with respect
to one-fourth of the number of Shares covered by such Option for each three
month period which elapses after the date of grant, so that such Option shall be
fully exercisable on the first anniversary of the date such Option was granted.
(e) Limitation on Other Grants. The Administrator shall have
no discretion to grant Options under this Plan other than as set forth in
Sections 6(a), 6(b) and 6(c).
(f) Option Agreement. As soon as practicable after the grant
of an Option, the Optionee and the Company shall enter into a written Option
Agreement which specifies the date of grant, the number of Shares, the option
price, and the other terms and conditions applicable to the Option.
(g) Transferability. No Option shall be transferable otherwise
than by will or the laws of descent and distribution, and an Option shall be
exercisable during the Optionee's lifetime only by the Optionee.
(h) Limits on Exercise. Subject to the other provisions of
this Plan, an Option shall be exercisable in such amounts as are specified in
the Option Agreement.
(i) Exercise Procedures. To the extent the right to purchase
Shares has accrued, Options may be exercised, in whole or in part, from time to
time, by written notice from the Optionee to the Company stating the number of
Shares being purchased, accompanied by payment of the exercise price for the
Shares, and other applicable amounts, as provided in Section 7.
(j) Termination. In the event of Termination, Options held at
the date of Termination (and only to the extent then exercisable) may be
exercised in whole or in part at any time within three months after the date of
Termination (but in no event after the Expiration Date), but not thereafter.
Notwithstanding the
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foregoing, if Termination is due to retirement or to death or Disability,
Options held at the date of Termination (and only to the extent then
exercisable) may be exercised in whole or in part by the Optionee in the case of
retirement or Disability, by the participant's guardian or legal representative
or by the person to whom the Option is transferred by will or the laws of
descent and distribution, at any time within two years from the date of
Termination (but in no event after the Expiration Date).
7. Payment and Taxes upon Exercise of Options.
(a) Purchase Price. The purchase price of Shares issued under
this Plan shall be paid in full at the time an Option is exercised.
(b) Delivery of Purchase Price. Optionees may make all or any
portion of any payment due to the Company
(i) upon exercise of an Option, or
(ii) with respect to federal, state, local or foreign
tax payable in connection with the exercise of an Option, by delivery of (x)
cash, (y) check, or (z) a promissory note of the Optionee or shares of Common
Stock so long as, if applicable, such property constitutes valid consideration
for the Common Stock under, and otherwise complies with, applicable law. No
promissory note under the Plan shall have a term (including extensions) of more
than five years or shall be of a principal amount exceeding 90% of the purchase
price paid by the borrower. Exercise of an Option may be made pursuant to a
"cashless exercise/sale" procedure pursuant to which funds to pay for exercise
of the Option are delivered to the Company by a broker upon receipt of stock
certificates from the Company, or pursuant to which Optionees obtain margin
loans from brokers to fund the exercise of the Option.
(c) Tax Withholding. The Optionee shall pay to the Company in
cash, promptly upon exercise of an Option or, if later, the date that the amount
of such obligations becomes determinable (in either case, the "Tax Date"), all
applicable federal, state, local and foreign withholding taxes that the
Administrator, in its discretion, determines to result upon exercise of an
Option or from a transfer or other disposition of shares of Common Stock
acquired upon exercise of an Option or otherwise related to an Option or shares
of Common Stock acquired in connection with an Option.
A person who has exercised an Option may make an election (i)
to deliver to the Company a promissory note of the Optionee on the terms set
forth in Section 7(b), (ii) to tender to the Company previously-owned shares of
Common Stock held for at least six months, or (iii) to have shares of Common
Stock to be obtained upon exercise of the Option withheld by the Company on
behalf of the Optionee, to pay the amount of tax that the Administrator, in its
discretion, determines to be required to be withheld by the Company. Any
election pursuant
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to clause (iii) above by a Optionee subject to Section 16 of the Exchange Act
shall be subject to the following limitations: (1) such election must be made at
least six months before the Tax Date and shall be irrevocable; or (2) such
election must be made in (or made earlier to take effect in) any Window Period
(and the withholding of the shares of Common Stock shall take place during such
Window Period) and shall be subject to approval by the Board, which approval may
be given any time after such election has been made, and the Option must be held
at least six months prior to the Tax Date; provided, that, the election
referenced in clause (2) above may not be made unless (A) such election is
consistent with Rule 16b- 3(c)(2)(ii) under the Exchange Act, and (B) the
Company has been subject to the reporting requirements of Section 13(a) of the
Exchange Act for at least one year and has filed all reports and statements
required to be filed pursuant to that section for that year. The right to so
withhold shares of Common Stock shall relate separately to each Option.
Any shares tendered to or withheld by the Company will be valued at
Fair Market Value on such date. The value of the shares of Common Stock tendered
or withheld may not exceed the required federal, state, local and foreign
withholding tax obligations as computed by the Company.
8. Use of Proceeds.
Proceeds from the sale of Shares pursuant to this Plan shall
be used for general corporate purposes.
9. Adjustment of Shares.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split or other change in corporate
structure affecting the Common Stock, appropriate adjustments shall be made by
the Administrator in the aggregate number and kind of shares of Stock reserved
for issuance under the Plan and in the number, kind and exercise price of shares
subject to outstanding Options; provided, however, that the number of shares
subject to any Option shall always be a whole number.
10. Effect of Change in Control.
In the event of a "Change in Control," any Options outstanding
as of the date such Change in Control is determined to have occurred and not
then exercisable and vested shall become fully exercisable and vested.
11. No Right to Directorship.
Neither this Plan nor any Option granted hereunder shall
confer upon any Optionee any right with respect to continuation of the
Optionee's membership on the Board or shall interfere in any way with provisions
in the Company's
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Articles of Incorporation and By-Laws relating to the election, appointment,
terms of office, and removal of members of the Board.
12. Legal Requirements.
The Company shall not be obligated to offer or sell any Shares
upon exercise of any Option unless the Shares are at that time effectively
registered or exempt from registration under the federal securities laws and the
offer and sale of the Shares are otherwise in compliance with all applicable
securities laws and the regulations of any stock exchange on which the Company's
securities may then be listed. The Company shall have no obligation to register
the securities covered by this Plan under the federal securities laws or take
any other steps as may be necessary to enable the securities covered by this
Plan to be offered and sold under federal or other securities laws. Upon
exercising all or any portion of an Option, an Optionee may be required to
furnish representations or undertakings deemed appropriate by the Company to
enable the offer and sale of the Shares or subsequent transfers of any interest
in the Shares to comply with applicable securities laws. Certificates evidencing
Shares acquired upon exercise of Options shall bear any legend required by, or
useful for purposes of compliance with, applicable securities laws, this Plan or
the Option Agreements.
13. Duration and Amendments.
(a) Duration. This Plan shall become effective upon adoption
by the Board provided, however, that no Option shall be exercisable unless and
until written consent of the shareholders of the Company, or approval of
shareholders of the Company voting at a validly called shareholders' meeting, is
obtained within 12 months after adoption by the Board. If such shareholder
approval is not obtained within such time, Options granted hereunder shall
terminate and be of no force and effect from and after expiration of such
12-month period.
(b) Amendment and Termination. The Board may amend, alter or
discontinue the Plan or any Option, but no amendment, alteration or
discontinuance shall be made which would impair the rights of an Optionee under
an outstanding Option without the Optionee's consent. In addition, the Board may
not amend or alter the Plan without the approval of shareholders of the Company
entitled to vote at a duly held shareholders' meeting or by an action by written
consent and, if at a meeting, a quorum of the voting power of the Company is
represented in person or by proxy, where such amendment or alteration would,
except as expressly provided in the Plan, increase the total number of shares
reserved for issuance pursuant to Options under the Plan or in such other
circumstances as the Board deems appropriate to comply with Rule 16b-3 under the
Exchange Act or otherwise. Notwithstanding any other provision of this Section
12(b), the provisions of the Plan governing (A) who is granted Options, (B) the
number of Shares to be covered by each Option, (C) the exercise price of each
Option, (D) the timing of the grant of each Option, or (E) the period within
which each Option may be exercised, shall not be amended more than once every
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six months, other than to comport with changes in the Code or the rules
thereunder or the Employee Retirement Income Security Act of 1974, as amended,
or the rules thereunder.
(c) Effect of Amendment or Termination. No Shares shall be
issued or sold under this Plan after the termination hereof, except upon
exercise of an Option granted before termination. Termination or amendment of
this Plan shall not affect any Shares previously issued and sold or any Option
previously granted under this Plan.
14. Rule 16b-3.
With respect to persons subject to Section 16 of the Exchange
Act, transactions under this Plan are intended to comply with the applicable
conditions of Rule 16b-3 under the Exchange Act. To the extent any provision of
this Plan or action by the Administrator fails to so comply, it shall be
adjusted to comply with Rule 16b-3, to the extent permitted by law and deemed
advisable by the Administrator. It shall be the responsibility of persons
subject to Section 16 of the Exchange Act, not of the Company or the
Administrator, to comply with the requirements of Section 16 of the Exchange
Act; and neither the Company nor the Administrator shall be liable if this Plan
or any transaction under this Plan fails to comply with the applicable
conditions of Rule 16b-3, or if any such person incurs any liability under
Section 16 of the Exchange Act.
Adopted by the Board of Directors: August 2, 1995.
Approved by the shareholders: October 26, 1995.
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