<PAGE> 1
As filed with the Securities and Exchange Commission on July 2, 1997
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 N. Pastoria Avenue, Sunnyvale, California 94086
(Address of principal executive offices)
IDENTIX INCORPORATED
EQUITY INCENTIVE PLAN
(Full title of the plan)
James P. Scullion
Identix Incorporated
510 N. Pastoria Avenue
Sunnyvale, California 94086
(Name and address of agent for service)
(408) 731-2000
(Telephone number, including area code, of agent for service)
Copy to: Richard Friedman
Heller, Ehrman, White & McAuliffe
525 University Avenue
Palo Alto, California 94301-1908
(415) 324-7000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================================================================
Proposed Proposed
Title of Amount maximum maximum Amount of
securities to be offering aggregate registration
to be registered price per offering fee
registered share (1) price
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
no par value 250,000 $11.188 $2,796,875.00 $848
========================================================================================
</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 and based on the average of the high
and low prices reported on the American Stock Exchange on June
30, 1997.
<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.
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<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
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<PAGE> 4
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 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
25 Power of Attorney (see pages 6)
99.1 Identix Incorporated Equity Incentive Plan, as amended
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<PAGE> 5
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;
(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
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<PAGE> 6
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
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<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 2nd day of
July, 1997.
IDENTIX INCORPORATED
By: /S/ JAMES P. SCULLION
----------------------------------------
James P. Scullion, Executive Vice President,
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.
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<PAGE> 8
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-8 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/S/ RANDALL FOWLER Chairman of the Board of Directors, Chief July 2, 1997
- ------------------------------------- Executive Officer and President
Randall C. Fowler
/S/ JAMES P. SCULLION Executive Vice President, Chief Financial July 2, 1997
- ------------------------------------- Officer and Secretary
James P. Scullion
/S/ RANDALL HAWKS Director July 2, 1997
- -------------------------------------
Randall Hawks, Jr.
Director July 2, 1997
- -------------------------------------
Patrick H. Morton
/S/ FRED SUTTER Director July 2, 1997
- -------------------------------------
Fred Sutter
/S/ LARRY J. WELLS Director July 2, 1997
- -------------------------------------
Larry J. Wells
/S/ HARRISON WALTHER Director July 2, 1997
- -------------------------------------
Harrison N. Walther
/S/ ED ZSCHAU Director July 2, 1997
- -------------------------------------
Ed Zschau
</TABLE>
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<PAGE> 9
INDEX TO EXHIBITS
Item No. Description of Item
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
25 Power of Attorney (see pages 6)
99.1 Identix Incorporated Equity Incentive Plan, as amended
<PAGE> 1
EXHIBIT 5
July 2, 1997
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 July 2, 1997, for the purpose
of registering under the Securities Act of 1933, as amended, 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 (the "Plan").
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 Articles of Incorporation of the Company, as amended to
date, certified by the Secretary of State of the State of
California as of June 10, 1997 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;
(b) The Bylaws of the Company, as amended to date, 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
July 2, 1997 Page 2
(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 adoption and approval of the Plan, and (ii) certifying
as to certain factual matters;
(d) A Certificate of ChaseMellon Shareholder Services, L.L.C., the
transfer agent of the Company, as to the number of shares of
Common Stock of the Company outstanding as of June 30, 1997;
and
(e) The Plan.
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 Plan, (iii) the
Company receives the full consideration for the Shares as stated in the Plan,
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.
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 Price Waterhouse LLP, Independent Accountants
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated August 26, 1996, which appears on
page 28 of the Identix Incorporated Annual Report on Form 10-K for the year
ended June 30, 1996.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
San Jose, California
July 1, 1997
<PAGE> 1
EXHIBIT 99.1
IDENTIX INCORPORATED
EQUITY INCENTIVE PLAN, AS AMENDED
SECTION 1. PURPOSE; DEFINITIONS.
(a) Purpose. The purpose of the Plan is to provide selected eligible
employees and directors 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.
<PAGE> 2
(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.
(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.
2
<PAGE> 3
(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).
(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
3
<PAGE> 4
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,
directors 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 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 1,250,000
shares. Such shares may consist, in whole or in part, of
4
<PAGE> 5
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 1,250,000 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 directors, officers and other key employees
of, and consultants to, the Company, its subsidiaries and affiliates (excluding
members of the Committee).
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.
5
<PAGE> 6
(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.
6
<PAGE> 7
(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 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.
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(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).
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.
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(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;
(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:
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(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 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
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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 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).
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(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:
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(i) such election shall be irrevocable;
(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
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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).
(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.
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(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.
(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:
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(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.
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.
On September 23, 1996 the Board of Directors approved and on October 30, 1996
the shareholders of the Company ratified amendments to the Plan which (i)
increased the number of shares available for issuance under the Plan by 250,000
shares from 1,000,000 to a total of 1,250,000 shares and (ii) allowed
nonemployee directors of the Company to participate under the Plan.
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