As filed with the Securities and Exchange Commission on March 12, 1999
Registration No. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
-------------------
3COM CORPORATION
(Exact name of Registrant as specified in its charter)
-------------------
Delaware 94-2605794
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3Com Corporation
5400 Bayfront Plaza
Santa Clara, CA 95052-8145
(Address of Principal Executive Offices) (Zip Code)
-------------------
NBX CORPORATION 1996 STOCK PLAN
NBX CORPORATION 1998 STOCK PLAN
(Full title of plans)
-------------------
Mark D. Michael
Senior Vice President, Secretary
And General Counsel
3Com Corporation
5400 Bayfront Plaza
Santa Clara, CA 95052-8145
(Name and address of agent for service)
(408) 326-5000
(Telephone number, including area code, of agent for service)
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
====================================================================================================================================
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered(1) Share(2) Price(2) Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value,
to be issued under the:
- NBX Corporation 1996 Stock Plan... 366,512 shares $ -- $287,113 $ 80
- NBX Corporation 1998 Stock Plan... 143,400 shares $ -- $208,332 $ 58
TOTAL 509,912 shares $495,445 $138
====================================================================================================================================
<FN>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable upon exercise of options granted under
the NBX Corporation 1996 Stock Plan and the NBX 1998 Stock Plan by reason
of any stock dividend, stock split, recapitalization or other similar
transaction effected without the receipt of consideration which results in
an increase in the number of the outstanding shares of Common Stock of 3Com
Corporation.
(2) Computed in accordance with Rule 457(h) under the Securities Act of 1933,
as amended, solely for the purpose of calculating the registration fee.
Computation based upon the price at which the options may be exercised.
</FN>
</TABLE>
<PAGE>
3COM CORPORATION
REGISTRATION STATEMENT ON FORM S-8
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
3Com Corporation (the "Company" or "Registrant") hereby incorporates by
reference in this registration statement the following documents:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended May 31, 1998, filed pursuant to Section 13(a) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), containing audited financial
statements for the Company's latest fiscal year.
(b) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarters ended August 28, 1998, and November 27, 1998, filed pursuant to Section
13(a) of the Exchange Act.
(c) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A filed under the Exchange Act on
September 18, 1984, including any amendment or report filed for the purpose of
updating such description.
(d) The description of certain Common Stock Purchase Rights that at the
present time are represented by and may only be transferred with the Company's
Common Stock, which description is contained in the Company's Registration
Statement on Form 8-A filed with the Securities and Exchange Commission on
September 22, 1989 pursuant to the Exchange Act, including any amendment or
report filed for the purpose of updating such description.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment to this registration statement indicating that all
securities offered hereby have been sold or deregistering all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of filing of such
documents.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
II-2
<PAGE>
Item 6. Indemnification of Directors and Officers
As permitted by Section 145 of the Delaware General Corporation Law
(the "DGCL"), the Registrant's Certificate of Incorporation provides that each
person who is or was or who had agreed to become a director or officer of the
Registrant or who had agreed at the request of the Registrant's Board of
Directors or an officer of the Registrant to serve as an employee or agent of
the Registrant or as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall be
indemnified by the Registrant to the full extent permitted by the DGCL or any
other applicable laws. Such Certificate of Incorporation also provides that no
amendment or repeal of such Certificate shall apply to or have any effect on the
right to indemnification permitted or authorized thereunder for or with respect
to claims asserted before or after such amendment or repeal arising from acts or
omissions occurring in whole or in part before the effective date of such
amendment or repeal.
The Registrant's Bylaws provide that the Registrant shall indemnify to
the full extent authorized by law any person made or threatened to be made a
party to an action or a proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that he or she was or is a director,
officer or employee of the Registrant or any predecessor of the Registrant or
serves or served any other enterprise as a director, officer or employee at the
request of the Registrant or any predecessor of the Registrant.
The Registrant has entered into indemnification agreements with its
directors and certain of its officers.
The Registrant maintains insurance on behalf of any person who is a
director or officer against any loss arising from any claim asserted against
such person and expense incurred by such person in any such capacity, subject to
certain exclusions.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
4.1 NBX Corporation 1996 Stock Plan, and form of agreement used
thereunder.
4.2 NBX Corporation 1998 Stock Plan, and form of agreement used
thereunder.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, as to legality of securities being registered.
23.1 Consent of Deloitte & Touche LLP, Independent Auditors.
23.2 Consent of Grant Thornton LLP, Independent Accountants.
23.3 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (contained in Exhibit 5.1).
24.1 Power of Attorney (see page II-5).
II-3
<PAGE>
Item 9. Undertakings
(a) Rule 415 Offering
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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) Filings incorporating subsequent Exchange Act documents by
reference
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(h) Request for acceleration of effective date or filing of
registration statement on Form S-8
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described in Item 6 above, 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 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 Act and will
be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant, 3Com Corporation, 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 Santa Clara, State of
California, on the 12th day of March, 1999.
3COM CORPORATION
By: /s/ Eric A. Benhamou
------------------------------
Eric A. Benhamou
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Eric A. Benhamou and Christopher B.
Paisley, and each of them, acting individually, as his attorney-in-fact, with
full power of substitution, for him and in any and all capacities, to sign any
and all amendments to this Registration Statement (including post-effective
amendments) 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, hereby ratifying and confirming his signature as it may be signed by
said attorney to any and all amendments to the Registration Statement.
<TABLE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Eric A. Benhamou Chairman of the Board and Chief Executive
- --------------------------------- Officer (Principal Executive Officer) March 12, 1999
Eric A. Benhamou
/s/ Christopher B. Paisley Senior Vice President, Finance and Chief
- --------------------------------- Financial Officer (Principal Financial and
Christopher B. Paisley Accounting Officer) March 12, 1999
/s/ James L. Barksdale
- ---------------------------------
James L. Barksdale Director March 12, 1999
/s/ Gordon A. Campbell
- ---------------------------------
Gordon A. Campbell Director March 12, 1999
II-5
<PAGE>
/s/ Casey G. Cowell
- ---------------------------------
Casey G. Cowell Director March 12, 1999
/s/ James E. Cowie
- ---------------------------------
James E. Cowie Director March 12, 1999
/s/ David W. Dorman
- ---------------------------------
David W. Dorman Director March 12, 1999
/s/ Jean-Louis Gassee
- ---------------------------------
Jean-Louis Gassee Director March 12, 1999
/s/ Philip C. Kantz
- ---------------------------------
Philip C. Kantz Director March 12, 1999
/s/ Paul G. Yovovich
- ---------------------------------
Paul G. Yovovich Director March 12, 1999
- ---------------------------------
William F. Zuendt Director March 12, 1999
</TABLE>
II-6
<PAGE>
3COM CORPORATION
REGISTRATION STATEMENT ON FORM S-8
INDEX TO EXHIBITS
Exhibit
Number Description
------- -------------------------------------------
4.1 NBX Corporation 1996 Stock Plan, and form of agreement used
thereunder.
4.2 NBX Corporation 1998 Stock Plan, and form of agreement used
thereunder.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, as to legality of securities being registered.
23.1 Consent of Deloitte & Touche LLP, Independent Auditors.
23.2 Consent of Grant Thornton LLP, Independent Accountants.
23.3 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (contained in Exhibit 5.1).
24.1 Power of Attorney (see page II-5).
II-7
Exhibit 4.1
NBX CORPORATION
1996 STOCK PLAN
(As Amended and Restated on January 27, 1998)
1. Purpose. The purpose of the NBX Corporation 1996 Stock Plan (the
"Plan") is to encourage key employees of NBX Corporation (the "Company") and of
any present or future parent or subsidiary of the Company (collectively,
"Related Corporations") and other individuals who render services to the Company
or a Related Corporation, by providing opportunities to participate in the
ownership of the Company and its future growth through (a) the grant of options
which qualify as "incentive stock options" ("ISOs") under Section 422(b) of the
Internal Revenue Code of 1986, as amended (the "Code"); (b) the grant of options
which do not qualify as ISOs ("Non-Qualified Options"); (c) awards of stock in
the Company ("Awards"); and (d) opportunities to make direct purchases of stock
in the Company ("Purchases"). Both ISOs and Non-Qualified Options are referred
to hereafter individually as an "Option" and collectively as "Options." Options,
Awards and authorizations to make Purchases are referred to hereafter
collectively as "Stock Rights." As used herein, the terms "parent" and
"subsidiary" mean "parent corporation" and "subsidiary corporation,"
respectively, as those terms are defined in Section 424 of the Code.
2. Administration of the Plan.
A. Board or Committee Administration. The Plan shall be
administered by the Board of Directors of the Company (the "Board") or,
subject to Paragraph 2D (relating to compliance with Section 162(m) of
the Code), by a committee appointed by the Board (the "Committee").
Hereinafter, all references in this Plan to the "Committee" shall mean
the Board if no Committee has been appointed. Subject to ratification
of the grant or authorization of each Stock Right by the Board (if so
required by applicable state law), and subject to the terms of the
Plan, the Committee shall have the authority to (i) determine to whom
(from among the class of employees eligible under paragraph 3 to
receive ISOs) ISOs shall be granted, and to whom (from among the class
of individuals and entities eligible under paragraph 3 to receive
Non-Qualified Options and Awards and to make Purchases) Non-Qualified
Options, Awards and authorizations to make Purchases may be granted;
(ii) determine the time or times at which Options or Awards shall be
granted or Purchases made; (iii) determine the purchase price of shares
subject to each Option or Purchase, which prices shall not be less than
the minimum price specified in paragraph 6; (iv) determine whether each
Option granted shall be an ISO or a Non-Qualified Option; (v) determine
(subject to paragraph 7) the time or times when each Option shall
become exercisable and the duration of the exercise period; (vi) extend
the period during which outstanding Options may be exercised; (vii)
determine whether restrictions such as repurchase options are to be
imposed on shares subject to Options, Awards and Purchases and the
nature of such restrictions, if any, and (viii) interpret the Plan and
prescribe and rescind rules and regulations relating to it. If the
Committee determines to issue a Non-Qualified Option, it shall take
whatever actions it deems necessary, under Section 422 of the Code and
the regulations promulgated thereunder, to ensure that such Option is
not treated as an ISO. The interpretation and construction by the
Committee of any provisions of the Plan or of any Stock Right granted
under it shall be final unless otherwise determined by the Board. The
Committee may from time to time adopt such rules and regulations for
carrying out the Plan as it may deem advisable. No
<PAGE>
member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Stock
Right granted under it.
B. Committee Actions. The Committee may select one of its
members as its chairman, and shall hold meetings at such time and
places as it may determine. A majority of the Committee shall
constitute a quorum and acts of a majority of the members of the
Committee at a meeting at which a quorum is present, or acts reduced to
or approved in writing by all the members of the Committee (if
consistent with applicable state law), shall be the valid acts of the
Committee. From time to time the Board may increase the size of the
Committee and appoint additional members thereof, remove members (with
or without cause) and appoint new members in substitution therefor,
fill vacancies however caused, or remove all members of the Committee
and thereafter directly administer the Plan.
C. Grant of Stock Rights to Board Members. Stock Rights may be
granted to members of the Board. All grants of Stock Rights to members
of the Board shall in all respects be made in accordance with the
provisions of this Plan applicable to other eligible persons. Members
of the Board who either (i) are eligible to receive grants of Stock
Rights pursuant to the Plan or (ii) have been granted Stock Rights may
vote on any matters affecting the administration of the Plan or the
grant of any Stock Rights pursuant to the Plan, except that no such
member shall act upon the granting to himself or herself of Stock
Rights, but any such member may be counted in determining the existence
of a quorum at any meeting of the Board during which action is taken
with respect to the granting to such member of Stock Rights.
D. Performance-Based Compensation. The Board, in its
discretion, may take such action as may be necessary to ensure that
Stock Rights granted under the Plan qualify as "qualified
performance-based compensation" within the meaning of Section 162(m) of
the Code and applicable regulations promulgated thereunder
("Performance-Based Compensation"). Such action may include, in the
Board's discretion, some or all of the following (i) if the Board
determines that Stock Rights granted under the Plan generally shall
constitute Performance-Based Compensation, the Plan shall be
administered, to the extent required for such Stock Rights to
constitute Performance-Based Compensation, by a Committee consisting
solely of two or more "outside directors" (as defined in applicable
regulations promulgated under Section 162(m) of the Code), (ii) if any
Non-Qualified Options with an exercise price less than the fair market
value per share of Common Stock are granted under the Plan and the
Board determines that such Options should constitute Performance-Based
Compensation, such options shall be made exercisable only upon the
attainment of a pre-established, objective performance goal established
by the Committee, and such grant shall be submitted for, and shall be
contingent upon shareholder approval and (iii) Stock Rights granted
under the Plan may be subject to such other terms and conditions as are
necessary for compensation recognized in connection with the exercise
or disposition of such Stock Right or the disposition of Common Stock
acquired pursuant to such Stock Right, to constitute Performance-Based
Compensation.
3. Eligible Employees and Others. ISOs may be granted only to employees
of the Company or any Related Corporation. Non-Qualified Options, Awards and
authorizations to make Purchases may be granted to any employee, officer or
director (whether or not also an employee) or consultant of the Company or any
Related Corporation. The Committee may take into consideration a recipient's
individual circumstances in determining whether to grant a Stock Right. The
granting of any Stock Right to any
-2-
<PAGE>
individual or entity shall neither entitle that individual or entity to, nor
disqualify such individual or entity from, participation in any other grant of
Stock Rights.
4. Stock. The stock subject to Stock Rights shall be authorized but
unissued shares of Common Stock of the Company, par value $.001 per share (the
"Common Stock"), or shares of Common Stock reacquired by the Company in any
manner. The aggregate number of shares which may be issued pursuant to the Plan
is 775,000, subject to adjustment as provided in paragraph 13. If any Option
granted under the Plan shall expire or terminate for any reason without having
been exercised in full or shall cease for any reason to be exercisable in whole
or in part or shall be repurchased by the Company, the unpurchased shares of
Common Stock subject to such Option shall again be available for grants of Stock
Rights under the Plan.
5. Granting of Stock Rights. Stock Rights may be granted under the Plan
at any time on or after September 10, 1996 and prior to September 10, 2006. The
date of grant of a Stock Right under the Plan will be the date specified by the
Committee at the time it grants the Stock Right; provided, however, that such
date shall not be prior to the date on which the Committee acts to approve the
grant.
6. Minimum Option Price; ISO Limitations.
A. Price for Non-Qualified Options, Awards and Purchases.
Subject to Paragraph 2D (relating to compliance with Section 162(m) of
the Code), the exercise price per share specified in the agreement
relating to each Non-Qualified Option granted, and the purchase price
per share of stock granted in any Award or authorized as a Purchase,
under the Plan may be less than the fair market value of the Common
Stock of the Company on the date of grant; provided that, in no event
shall such exercise price or such purchase price be less than the
minimum legal consideration required therefor under the laws of any
jurisdiction in which the Company or its successors in interest may be
organized.
B. Price for ISOs. The exercise price per share specified in
the agreement relating to each ISO granted under the Plan shall not be
less than the fair market value per share of Common Stock on the date
of such grant. In the case of an ISO to be granted to an employee
owning stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any
Related Corporation, the price per share specified in the agreement
relating to such ISO shall not be less than one hundred ten percent
(110%) of the fair market value per share of Common Stock on the date
of grant. For purposes of determining stock ownership under this
paragraph, the rules of Section 424(d) of the Code shall apply. The
date of grant for purposes of this subparagraph shall mean the date
that the Company or Related Corporation completes the corporate action
constituting an offer of stock for sale to an individual.
C. $100,000 Annual Limitation on ISO Vesting. Each eligible
employee may be granted Options treated as ISOs only to the extent
that, in the aggregate under this Plan and all incentive stock option
plans of the Company and any Related Corporation, ISOs do not become
exercisable for the first time by such employee during any calendar
year with respect to stock having a fair market value (determined at
the time the ISOs were granted) in excess of $100,000. The Company
intends to designate any Options granted in excess of such limitation
as Non-Qualified Options, and the Company shall issue separate
certificates to the optionee with respect to Options that are
Non-Qualified Options and Options that are ISOs.
-3-
<PAGE>
D. Determination of Fair Market Value. If, at the time an
Option is granted under the Plan, the Company's Common Stock is
publicly traded, "fair market value" shall be determined as of the date
of grant or, if the prices or quotes discussed in this sentence are
unavailable for such date, the last business day for which such prices
or quotes are available prior to the date of grant and shall mean (i)
the average (on that date) of the high and low prices of the Common
Stock on the principal national securities exchange on which the Common
Stock is traded, if the Common Stock is then traded on a national
securities exchange; or (ii) the last reported sale price (on that
date) of the Common Stock on the Nasdaq National Market, if the Common
Stock is not then traded on a national securities exchange; or (iii)
the closing bid price (or average of bid prices) last quoted (on that
date) by an established quotation service for over-the-counter
securities, if the Common Stock is not reported on the Nasdaq National
Market. If the Common Stock is not publicly traded at the time an
Option is granted under the Plan, "fair market value" shall mean the
fair value of the Common Stock as determined by the Committee after
taking into consideration all factors which it deems appropriate,
including, without limitation, recent sale and offer prices of the
Common Stock in private transactions negotiated at arm's length.
7. Option Duration. Subject to earlier termination as provided in
paragraphs 9 and 10 or in the agreement relating to such Option, each Option
shall expire on the date specified by the Committee, but not more than (i) ten
years from the date of grant in the case of Options generally and (ii) five
years from the date of grant in the case of ISOs granted to an employee owning
stock possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or any Related Corporation, as determined
under paragraph 6(B). Subject to earlier termination as provided in paragraphs 9
and 10, the term of each ISO shall be the term set forth in the original
instrument granting such ISO, except with respect to any part of such ISO that
is converted into a Non-Qualified Option pursuant to paragraph 16.
8. Exercise of Option. Subject to the provisions of paragraphs 9
through 12 and paragraph 21, each Option granted under the Plan shall be
exercisable as follows:
A. Vesting. The Option shall either be fully exercisable on
the date of grant or shall become exercisable thereafter in such
installments as the Committee may specify.
B. Full Vesting of Installments. Once an installment becomes
exercisable, it shall remain exercisable until expiration or
termination of the Option, unless otherwise specified by the Committee.
C. Partial Exercise. Each Option or installment may be
exercised at any time or from time to time, in whole or in part, for up
to the total number of shares with respect to which it is then
exercisable.
D. Acceleration of Vesting. The Committee shall have the right
to accelerate the date that any installment of any Option becomes
exercisable; provided that the Committee shall not, without the consent
of an optionee, accelerate the permitted exercise date of any
installment of any Option granted to any employee as an ISO (and not
previously converted into a Non-Qualified Option pursuant to paragraph
16) if such acceleration would violate the annual vesting limitation
contained in Section 422(d) of the Code, as described in paragraph
6(C).
9. Termination of Employment. Unless otherwise specified in this Plan
or the agreement relating to such ISO, if an ISO optionee ceases to be employed
by the Company and all Related Corporations
-4-
<PAGE>
other than by reason of death or disability as defined in paragraph 10, no
further installments of his or her ISOs shall become exercisable, and his or her
ISOs shall terminate on the earlier of (a) three months after the date of
termination of his or her employment, or (b) their specified expiration dates,
except to the extent that such ISOs (or unexercised installments thereof) have
been converted into Non-Qualified Options pursuant to paragraph 16. For purposes
of this paragraph 9, employment shall be considered as continuing uninterrupted
during any bona fide leave of absence (such as those attributable to illness,
military obligations or governmental service) provided that the period of such
leave does not exceed 90 days or, if longer, any period during which such
optionee's right to reemployment is guaranteed by statute or by contract. A bona
fide leave of absence with the written approval of the Committee shall not be
considered an interruption of employment under this paragraph 9, provided that
such written approval contractually obligates the Company or any Related
Corporation to continue the employment of the optionee after the approved period
of absence. ISOs granted under the Plan shall not be affected by any change of
employment within or among the Company and Related Corporations, so long as the
optionee continues to be an employee of the Company or any Related Corporation.
Nothing in the Plan shall be deemed to give any grantee of any Stock Right the
right to be retained in employment or other service by the Company or any
Related Corporation for any period of time.
10. Death; Disability.
A. Death. If an ISO optionee ceases to be employed by the Company and all
Related Corporations by reason of his or her death, any ISO owned by
such optionee may be exercised, to the extent otherwise exercisable on
the date of death, by the estate, personal representative or
beneficiary who has acquired the ISO by will or by the laws of descent
and distribution, until the earlier of (i) the specified expiration
date of the ISO or (ii) 180 days from the date of the optionee's death.
B. Disability. If an ISO optionee ceases to be employed by the Company and
all Related Corporations by reason of his or her disability, such
optionee shall have the right to exercise any ISO held by him or her on
the date of termination of employment, for the number of shares for
which he or she could have exercised it on that date, until the earlier
of (i) the specified expiration date of the ISO or (ii) 180 days from
the date of the termination of the optionee's employment. For the
purposes of the Plan, the term "disability" shall mean "permanent and
total disability" as defined in Section 22(e)(3) of the Code or any
successor statute.
11. Assignability. No ISO shall be assignable or transferable by the
optionee except by will or by the laws of descent and distribution, and during
the lifetime of the optionee shall be exercisable only by such optionee. Stock
Rights other than ISOs shall be transferable to the extent set forth in the
agreement relating to such Stock Right.
12. Terms and Conditions of Options. Options shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including restrictions applicable to shares of Common Stock
issuable upon exercise of Options. The Committee may specify that any
Non-Qualified Option shall be subject to the restrictions set forth herein with
respect to ISOs, or to such other termination and cancellation provisions as the
Committee may determine. The Committee may from time to time confer authority
and responsibility on one or more of its own members and/or one or more officers
of the Company to execute and deliver such instruments. The proper officers of
the Company are
-5-
<PAGE>
authorized and directed to take any and all action necessary or advisable from
time to time to carry out the terms of such instruments.
13. Adjustments. Upon the occurrence of any of the following events, an
optionee's rights with respect to Options granted to such optionee hereunder
shall be adjusted as hereinafter provided, unless otherwise specifically
provided in the written agreement between the optionee and the Company relating
to such Option:
A. Stock Dividends and Stock Splits. If the shares of Common
Stock shall be subdivided or combined into a greater or smaller number
of shares or if the Company shall issue any shares of Common Stock as a
stock dividend on its outstanding Common Stock, the number of shares of
Common Stock deliverable upon the exercise of Options shall be
appropriately increased or decreased proportionately, and appropriate
adjustments shall be made in the purchase price per share to reflect
such subdivision, combination or stock dividend.
B. Consolidations or Mergers. If the Company is to be
consolidated with or acquired by another entity by sale or transfer of
capital stock or in a merger or other reorganization and as a result of
such sale or transfer, merger or reorganization the holders of the
outstanding voting stock of the Company immediately preceding the
consummation of such event, shall, immediately following such event,
hold, as a group, less than a majority of the combined voting
securities of the surviving or successor entity, or by a sale of all or
substantially all of the Company's assets or otherwise (each, an
"Acquisition"), the Committee or the board of directors of any entity
assuming the obligations of the Company hereunder (the "Successor
Board"), shall, as to outstanding Options, either (i) make appropriate
provision for the continuation of such Options by substituting on an
equitable basis for the shares then subject to such Options either (a)
the consideration payable with respect to the outstanding shares of
Common Stock in connection with the Acquisition, (b) shares of stock of
the surviving or successor corporation or (c) such other securities as
the Successor Board deems appropriate, the fair market value of which
shall not materially exceed the fair market value of the shares of
Common Stock subject to such Options immediately preceding the
Acquisition; or (ii) upon written notice to the optionees, provide that
all Options must be exercised, to the extent then exercisable or to be
exercisable as a result of the Acquisition or pursuant to paragraph 21,
within a specified number of days of the date of such notice, at the
end of which period the Options shall terminate; or (iii) terminate all
Options in exchange for a cash payment equal to the excess of the fair
market value of the shares subject to such Options (to the extent then
exercisable or to be exercisable as a result of the Acquisition or
pursuant to paragraph 21) over the exercise price thereof.
C. Recapitalization or Reorganization. In the event of a
recapitalization or reorganization of the Company (other than a
transaction described in subparagraph B above) pursuant to which
securities of the Company or of another corporation are issued with
respect to the outstanding shares of Common Stock, an optionee upon
exercising an Option shall be entitled to receive for the purchase
price paid upon such exercise the securities he or she would have
received if he or she had exercised such Option prior to such
recapitalization or reorganization.
D. Modification of ISOs. Notwithstanding the foregoing, any
adjustments made pursuant to subparagraphs A, B or C with respect to
ISOs shall be made only after the Committee, after consulting with
counsel for the Company, determines whether such adjustments would
constitute a "modification" of such ISOs (as that term is defined in
Section 424 of the Code) or would cause any adverse tax consequences
for the holders of such ISOs. If the Committee
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<PAGE>
determines that such adjustments made with respect to ISOs would
constitute a modification of such ISOs or would cause adverse tax
consequences to the holders, it may refrain from making such
adjustments.
E. Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, each Option will terminate
immediately prior to the consummation of such proposed action or at
such other time and subject to such other conditions as shall be
determined by the Committee.
F. Issuances of Securities. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect,
and no adjustment by reason thereof shall be made with respect to, the
number or price of shares subject to Options. No adjustments shall be
made for dividends paid in cash or in property other than securities of
the Company.
G. Fractional Shares. No fractional shares shall be issued
under the Plan and the optionee shall receive from the Company cash in
lieu of such fractional shares.
H. Adjustments. Upon the happening of any of the events
described in subparagraphs A, B or C above, the class and aggregate
number of shares set forth in paragraph 4 hereof that are subject to
Stock Rights which previously have been or subsequently may be granted
under the Plan shall also be appropriately adjusted to reflect the
events described in such subparagraphs. The Committee or the Successor
Board shall determine the specific adjustments to be made under this
paragraph 13 and, subject to paragraph 2, its determination shall be
conclusive.
14. Means of Exercising Options. An Option (or any part or installment
thereof) shall be exercised by giving written notice to the Company at its
principal office address, or to such transfer agent as the Company shall
designate. Such notice shall identify the Option being exercised and specify the
number of shares as to which such Option is being exercised, accompanied by full
payment of the purchase price therefor either (a) in United States dollars in
cash or by check, (b) at the discretion of the Committee, through delivery of
shares of Common Stock having a fair market value equal as of the date of the
exercise to the cash exercise price of the Option, (c) at the discretion of the
Committee, by delivery of the grantee's personal recourse note bearing interest
payable not less than annually at no less than 100% of the lowest applicable
Federal rate, as defined in Section 1274(d) of the Code, (d) at the discretion
of the Committee and consistent with applicable law, through the delivery of an
assignment to the Company of a sufficient amount of the proceeds from the sale
of the Common Stock acquired upon exercise of the Option and an authorization to
the broker or selling agent to pay that amount to the Company, which sale shall
be at the participant's direction at the time of exercise, or (e) at the
discretion of the Committee, by any combination of (a), (b), (c) and (d) above.
If the Committee exercises its discretion to permit payment of the exercise
price of an ISO by means of the methods set forth in clauses (b), (c), (d) or
(e) of the preceding sentence, such discretion shall be exercised in writing at
the time of the grant of the ISO in question. The holder of an Option shall not
have the rights of a shareholder with respect to the shares covered by such
Option until the date of issuance of a stock certificate to such holder for such
shares. Except as expressly provided above in paragraph 13 with respect to
changes in capitalization and stock dividends, no adjustment shall be made for
dividends or similar rights for which the record date is before the date such
stock certificate is issued.
15. Term and Amendment of Plan. This Plan was adopted by the Board on
September 10, 1996. The Plan shall expire at the end of the day on September 9,
2006 (except as to Options outstanding on
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<PAGE>
that date). The Board may terminate or amend the Plan in any respect at any
time, except that, without the approval of the stockholders obtained within 12
months before or after the Board adopts a resolution authorizing any of the
following actions: (a) the total number of shares that may be issued under the
Plan may not be increased (except by adjustment pursuant to paragraph 13); (b)
the provisions of paragraph 3 regarding eligibility for grants of ISOs may not
be modified; (c) the provisions of paragraph 6(B) regarding the exercise price
at which shares may be offered pursuant to ISOs may not be modified (except by
adjustment pursuant to paragraph 13); and (d) the expiration date of the Plan
may not be extended. Except as otherwise provided in this paragraph 15, in no
event may action of the Board or stockholders alter or impair the rights of a
grantee, without such grantee's consent, under any Stock Right previously
granted to such grantee.
16. Modifications of ISOs; Conversion of ISOs into Non-Qualified
Options. Subject to Paragraph 13D, without the prior written consent of the
holder of an ISO, the Committee shall not alter the terms of such ISO (including
the means of exercising such ISO) if such alteration would constitute a
modification (within the meaning of Section 424(h)(3) of the Code). The
Committee, at the written request or with the written consent of any optionee,
may in its discretion take such actions as may be necessary to convert such
optionee's ISOs (or any installments or portions of installments thereof) that
have not been exercised on the date of conversion into Non-Qualified Options at
any time prior to the expiration of such ISOs, regardless of whether the
optionee is an employee of the Company or a Related Corporation at the time of
such conversion. Such actions may include, but shall not be limited to,
extending the exercise period or reducing the exercise price of the appropriate
installments of such ISOs. At the time of such conversion, the Committee (with
the consent of the optionee) may impose such conditions on the exercise of the
resulting Non-Qualified Options as the Committee in its discretion may
determine, provided that such conditions shall not be inconsistent with this
Plan. Nothing in the Plan shall be deemed to give any optionee the right to have
such optionee's ISOs converted into Non-Qualified Options, and no such
conversion shall occur until and unless the Committee takes appropriate action.
Upon the taking of such action, the Company shall issue separate certificates to
the optionee with respect to Options that are Non-Qualified Options and Options
that are ISOs.
17. Application Of Funds. The proceeds received by the Company from the
sale of shares pursuant to Options granted and Purchases authorized under the
Plan shall be used for general corporate purposes.
18. Notice to Company of Disqualifying Disposition. By accepting an ISO
granted under the Plan, each optionee agrees to notify the Company in writing
immediately after such optionee makes a Disqualifying Disposition (as described
in Sections 421, 422 and 424 of the Code and regulations thereunder) of any
stock acquired pursuant to the exercise of ISOs granted under the Plan. A
Disqualifying Disposition is generally any disposition occurring on or before
the later of (a) the date two years following the date the ISO was granted or
(b) the date one year following the date the ISO was exercised.
19. Withholding of Additional Income Taxes. Upon the exercise of a
Non-Qualified Option, the transfer of a Non-Qualified Stock Option pursuant to
an arm's-length transaction, the grant of an Award, the making of a Purchase of
Common Stock for less than its fair market value, the making of a Disqualifying
Disposition (as defined in paragraph 18), the vesting or transfer of restricted
stock or securities acquired on the exercise of an Option hereunder, or the
making of a distribution or other payment with respect to such stock or
securities, the Company may withhold taxes in respect of amounts that constitute
compensation includible in gross income. The Committee in its discretion may
condition (i) the exercise of an Option, (ii) the transfer of a Non-Qualified
Stock Option, (iii) the grant of an Award, (iv) the making of a Purchase of
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<PAGE>
Common Stock for less than its fair market value, or (v) the vesting or
transferability of restricted stock or securities acquired by exercising an
Option, on the grantee's making satisfactory arrangement for such withholding.
Such arrangement may include payment by the grantee in cash or by check of the
amount of the withholding taxes or, at the discretion of the Committee, by the
grantee's delivery of previously held shares of Common Stock or the withholding
from the shares of Common Stock otherwise deliverable upon exercise of an Option
shares having an aggregate fair market value equal to the amount of such
withholding taxes.
20. Governmental Regulation. The Company's obligation to sell and
deliver shares of the Common Stock under this Plan is subject to the approval of
any governmental authority required in connection with the authorization,
issuance or sale of such shares.
Government regulations may impose reporting or other obligations on the
Company with respect to the Plan. For example, the Company may be required to
send tax information statements to employees and former employees that exercise
ISOs under the Plan, and the Company may be required to file tax information
returns reporting the income received by grantees of Options in connection with
the Plan.
21. Acceleration of Vesting of Option after an Acquisition. As of the
effective date of an Acquisition, as defined in paragraph 13 of this Plan,
one-half of the Options granted to the optionee that are unvested as of the
effective date of the Acquisition shall become fully vested and exercisable by
the optionee immediately prior to the effective date of the Acquisition. The
remaining unvested Options shall continue to vest over the remaining vesting
period on a pro-rata basis, with the amount scheduled to vest on each vesting
date in the remaining vesting period reduced by one half. The foregoing
notwithstanding, the Board of Directors, in its sole discretion, may require
that the optionee's rights under this paragraph shall be conditioned on approval
by stockholders of the Company in accordance with Section 280G(b)(5)(B) of the
Code and regulations thereunder. Notwithstanding the foregoing, no Option shall
become vested and exercisable pursuant to this paragraph and no optionee shall
acquire any rights as a result of this paragraph, if the acceleration or vesting
of any such Option would prevent the Company from accounting for a particular
business combination as a "pooling of interests" pursuant to the terms and
conditions of APB 16 and the rules and regulations promulgated thereunder (or
any successor rule or pronouncement) at any time when the Board of Directors
deems it desirable to account for such business combination as a "pooling of
interests."
22. Governing Law. The validity and construction of the Plan and the
instruments evidencing Options shall be governed by the laws of The Commonwealth
of Massachusetts, or the laws of any jurisdiction in which the Company or its
successors in interest may be organized.
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<PAGE>
NBX Corporation
Incentive Stock Option Agreement
NBX Corporation, a Delaware corporation (the "Company"), hereby grants
as of _________, ______ to __________ (the "Employee"), an option to purchase a
maximum of _______ shares (the "Option Shares") of its Common Stock, $.001 par
value ("Common Stock"), at the price of _________ ($_____) per share, on the
following terms and conditions:
1. Grant Under 1996 Stock Plan. This option is granted pursuant to and
is governed by the Company's 1996 Stock Plan (the "Plan") and, unless the
context otherwise requires, terms used herein shall have the same meaning as in
the Plan. Determinations made in connection with this option pursuant to the
Plan shall be governed by the Plan as it exists on this date.
2. Grant as Incentive Stock Option; Other Options. This option is
intended to qualify as an incentive stock option under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"). This option is in
addition to any other options heretofore or hereafter granted to the Employee by
the Company or any Related Corporation (as defined in the Plan), but a duplicate
original of this instrument shall not effect the grant of another option.
<TABLE>
3. Vesting of Option if Employment Continues. If the Employee has
continued to be employed by the Company or any Related Corporation on the
following dates, the Employee may exercise this option for the number of shares
of Common Stock set opposite the applicable date:
<CAPTION>
<S> <C>
Less than one year from the date - _______ shares
hereof
One year but less than two years from - an additional ______ shares
the date hereof
Two years but less than three years - an additional ________ shares
from the date hereof
Three years but less than four years - an additional ________ shares
from the date hereof
Four years or more from the date - an additional ________ shares
hereof
</TABLE>
Notwithstanding the foregoing, in accordance with and subject to the
provisions of the Plan, the Committee may, in its discretion, accelerate the
date that any installment of this Option becomes exercisable. The foregoing
rights are cumulative and (subject to Sections 4 or 5 hereof if the Employee
ceases to be employed by the Company and all Related Corporations) may be
exercised on or before the date which is ten years from the date this option is
granted.
<PAGE>
4. Termination of Employment.
(a) Termination Other Than for Cause. If the Employee ceases
to be employed by the Company and all Related Corporations, other than by reason
of death or disability as defined in Section 5 or termination for Cause as
defined in Section 4(c), no further installments of this option shall become
exercisable, and this option shall terminate (and may no longer be exercised)
after the passage of three months from the Employee's last day of employment,
but in no event later than the scheduled expiration date. In such a case, the
Employee's only rights hereunder shall be those which are properly exercised
before the termination of this option.
(b) Termination for Cause. If the employment of the Employee
is terminated for Cause (as defined in Section 4(c)), this option shall
terminate upon the Employee's receipt of written notice of such termination and
shall thereafter not be exercisable to any extent whatsoever.
(c) Definition of Cause. "Cause" shall mean conduct involving
one or more of the following: (i) the substantial and continuing failure of the
Employee, after notice thereof, to render services to the Company or Related
Corporation in accordance with the terms or requirements of his or her
employment; (ii) disloyalty, gross negligence, willful misconduct, dishonesty or
breach of fiduciary duty to the Company or Related Corporation; (iii) the
commission of an act of embezzlement or fraud; (iv) deliberate disregard of the
rules or policies of the Company or Related Corporation which results in direct
or indirect loss, damage or injury to the Company or Related Corporation; (v)
the unauthorized disclosure of any trade secret or confidential information of
the Company or Related Corporation; or (vi) the commission of an act which
constitutes unfair competition with the Company or Related Corporation or which
induces any customer or supplier to breach a contract with the Company or
Related Corporation.
5. Death; Disability.
(a) Death. If the Employee dies while in the employ of the
Company or any Related Corporation, this option may be exercised, to the extent
otherwise exercisable on the date of his or her death, by the Employee's estate,
personal representative or beneficiary to whom this option has been assigned
pursuant to Section 10, at any time within 180 after the date of death, but not
later than the scheduled expiration date.
(b) Disability. If the Employee ceases to be employed by the
Company and all Related Corporations by reason of his or her disability (as
defined in the Plan), this option may be exercised, to the extent otherwise
exercisable on the date of the termination of his or her employment, at any time
within 180 after such termination, but not later than the scheduled expiration
date.
(c) Effect of Termination. At the expiration of the 180-day
period provided in paragraphs (a) or (b) of this Section 5 or the scheduled
expiration date, whichever is the earlier, this option shall terminate (and
shall no longer be exercisable) and the only rights hereunder shall be those as
to which the option was properly exercised before such termination.
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<PAGE>
6. Partial Exercise. This option may be exercised in part at any time
and from time to time within the above limits, except that this option may not
be exercised for a fraction of a share unless such exercise is with respect to
the final installment of stock subject to this option and cash in lieu of a
fractional share must be paid, in accordance with Paragraph 13(G) of the Plan,
to permit the Employee to exercise completely such final installment. Any
fractional share with respect to which an installment of this option cannot be
exercised because of the limitation contained in the preceding sentence shall
remain subject to this option and shall be available for later purchase by the
Employee in accordance with the terms hereof.
7. Payment of Price. (a) The option price shall be paid in the
following manner:
(i) in cash or by check;
(ii) subject to Section 7(b) below, by delivery of shares of
the Company's Common Stock having a fair market value (as determined by the
Committee) equal as of the date of exercise to the option price;
(iii) by delivery of an assignment satisfactory in form and
substance to the Company of a sufficient amount of the proceeds from the sale of
the Option Shares and an instruction to the broker or selling agent to pay that
amount to the Company; or
(iv) by any combination of the foregoing.
(b) Limitations on Payment by Delivery of Common Stock. If the Employee
delivers Common Stock held by the Employee ("Old Stock") to the Company in full
or partial payment of the option price, and the Old Stock so delivered is
subject to restrictions or limitations imposed by agreement between the Employee
and the Company, an equivalent number of Option Shares shall be subject to all
restrictions and limitations applicable to the Old Stock to the extent that the
Employee paid for the Option Shares by delivery of Old Stock, in addition to any
restrictions or limitations imposed by this Agreement. Notwithstanding the
foregoing, the Employee may not pay any part of the exercise price hereof by
transferring Common Stock to the Company unless such Common Stock has been owned
by the Employee free of any substantial risk of forfeiture for at least six
months.
(c) Permitted Payment by Recourse Note. In addition, if this paragraph
is initialed below by the person signing this Agreement on behalf of the
Company, the option price may be paid by delivery of the Employee's three year
personal recourse promissory note bearing interest payable not less than
annually at the applicable Federal rate, as defined in Section 1274(d) of the
Code.
------------
(initials)
8. Restrictions on Resale; Legend. Option Shares may not be transferred
without the Company's written consent except by will, by the laws of descent and
distribution and in accordance with the provisions of Sections 17 and 18, if
applicable. Option Shares will be of an illiquid nature and will be deemed to be
"restricted securities" for purposes of the Securities Act of 1933, as
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<PAGE>
amended (the "Securities Act"). Accordingly, such shares must be sold in
compliance with the registration requirements of the Securities Act or an
exemption therefrom. Each certificate evidencing any of the Option Shares shall
bear a legend substantially as follows:
"The shares represented by this certificate are subject to
restrictions on transfer and may not be sold, exchanged,
transferred, pledged, hypothecated or otherwise disposed of
except in accordance with and subject to all the terms and
conditions of a certain Incentive Stock Option Agreement dated
as of October 15, 1996, a copy of which the Company will
furnish to the holder of this certificate upon request and
without charge."
9. Method of Exercising Option. Subject to the terms and conditions of
this Agreement, this option may be exercised by written notice to the Company at
its principal executive office, or to such transfer agent as the Company shall
designate. Such notice shall state the election to exercise this option and the
number of Option Shares for which it is being exercised and shall be signed by
the person or persons so exercising this option. Such notice shall be
accompanied by payment of the full purchase price of such shares, and the
Company shall deliver a certificate or certificates representing such shares as
soon as practicable after the notice shall be received. Such certificate or
certificates shall be registered in the name of the person or persons so
exercising this option (or, if this option shall be exercised by the Employee
and if the Employee shall so request in the notice exercising this option, shall
be registered in the name of the Employee and another person jointly, with right
of survivorship). In the event this option shall be exercised, pursuant to
Section 5 hereof, by any person or persons other than the Employee, such notice
shall be accompanied by appropriate proof of the right of such person or persons
to exercise this option.
10. Option Not Transferable. This option is not transferable or
assignable except by will or by the laws of descent and distribution. During the
Employee's lifetime only the Employee can exercise this option.
11. No Obligation to Exercise Option. The grant and acceptance of this
option imposes no obligation on the Employee to exercise it.
12. No Obligation to Continue Employment. Neither the Plan, this
Agreement, nor the grant of this option imposes any obligation on the Company or
any Related Corporation to continue the Employee in employment.
13. No Rights as Stockholder until Exercise. The Employee shall have no
rights as a stockholder with respect to the Option Shares until such time as the
Employee has exercised this option by delivering a notice of exercise and has
paid in full the purchase price for the shares so exercised in accordance with
Section 9. Except as is expressly provided in the Plan with respect to certain
changes in the capitalization of the Company, no adjustment shall be made for
dividends or similar rights for which the record date is prior to such date of
exercise.
14. Capital Changes and Business Successions. The Plan contains
provisions covering the treatment of options in a number of contingencies such
as stock splits and mergers. Provisions in the Plan for adjustment with respect
to stock subject to options and the related provisions with
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<PAGE>
respect to successors to the business of the Company are hereby made applicable
hereunder and are incorporated herein by reference.
15. Early Disposition. The Employee agrees to notify the Company in
writing immediately after the Employee transfers any Option Shares, if such
transfer occurs on or before the later of (a) the date two years after the date
of this Agreement or (b) the date one year after the date the Employee acquired
such Option Shares. The Employee also agrees to provide the Company with any
information concerning any such transfer required by the Company for tax
purposes.
16. Withholding Taxes. If the Company or any Related Corporation in its
discretion determines that it is obligated to withhold any tax in connection
with the exercise of this option, or in connection with the transfer of, or the
lapse of restrictions on, any Common Stock or other property acquired pursuant
to this option, the Employee hereby agrees that the Company or any Related
Corporation may withhold from the Employee's wages or other remuneration the
appropriate amount of tax. At the discretion of the Company or Related
Corporation, the amount required to be withheld may be withheld in cash from
such wages or other remuneration or in kind from the Common Stock or other
property otherwise deliverable to the Employee on exercise of this option. The
Employee further agrees that, if the Company or any Related Corporation does not
withhold an amount from the Employee's wages or other remuneration sufficient to
satisfy the withholding obligation of the Company or Related Corporation, the
Employee will make reimbursement on demand, in cash, for the amount
underwithheld.
17. Company's Right of First Refusal.
(a) Exercise of Right. If the Employee desires to transfer all
or any part of the Option Shares to any person other than the Company (an
"Offeror"), the Employee shall: (i) obtain in writing an irrevocable and
unconditional bona fide offer (the "Offer") for the purchase thereof from the
Offeror; and (ii) give written notice (the "Option Notice") to the Company
setting forth the Employee's desire to transfer such shares, which Option Notice
shall be accompanied by a photocopy of the Offer and shall set forth at least
the name and address of the Offeror and the price and terms of the Offer. Upon
receipt of the Option Notice, the Company shall have an assignable option to
purchase any or all of such Option Shares (the "Company Option Shares")
specified in the Option Notice, such option to be exercisable by giving, within
30 days after receipt of the Option Notice, a written counter-notice to the
Employee. If the Company elects to purchase any or all of such Company Option
Shares, it shall be obligated to purchase, and the Employee shall be obligated
to sell to the Company, such Company Option Shares at the price and terms
indicated in the Offer within 30 days from the date of delivery by the Company
of such counter-notice.
(b) Sale of Option Shares to Offeror. The Employee may, for 60
days after the expiration of the 30-day option period as set forth in Section
17(a), sell to the Offeror, pursuant to the terms of the Offer, any or all of
such Company Option Shares not purchased or agreed to be purchased by the
Company or its assignee; provided, however, that the Employee shall not sell
such Company Option Shares to such Offeror if such Offeror is a competitor of
the Company and the Company gives written notice to the Employee, within 30 days
of its receipt of the Option Notice, stating that the Employee shall not sell
his or her Company Option Shares to such Offeror; and provided, further, that
prior to the sale of such Option Shares to an Offeror, such Offeror shall
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<PAGE>
execute an agreement with the Company pursuant to which such Offeror agrees to
be subject to the restrictions set forth in this Section 17. If any or all of
such Company Option Shares are not sold pursuant to an Offer within the time
permitted above, the unsold Company Option Shares shall remain subject to the
terms of this Section 17.
(c) Adjustments for Changes in Capital Structure. If there
shall be any change in the Common Stock of the Company through merger,
consolidation, reorganization, recapitalization, stock dividend, stock split,
combination or exchange of shares, or the like, the restrictions contained in
Section 8 and this Section 17 shall apply with equal force to additional and/or
substitute securities, if any, received by the Employee in exchange for, or by
virtue of his or her ownership of, Option Shares, except as otherwise determined
by the Board of Directors of the Company.
(d) Failure to Deliver Option Shares. If the Employee fails or
refuses to deliver on a timely basis duly endorsed certificates representing
Company Option Shares to be sold to the Company or its assignee pursuant to this
Section 17, the Company shall have the right to deposit the purchase price for
such Company Option Shares in a special account with any bank or trust company
in the Commonwealth of Massachusetts, giving notice of such deposit to the
Employee, whereupon such Company Option Shares shall be deemed to have been
purchased by the Company. All such monies shall be held by the bank or trust
company for the benefit of the Employee. All monies deposited with the bank or
trust company but remaining unclaimed for two years after the date of deposit
shall be repaid by the bank or trust company to the Company on demand, and the
Employee shall thereafter look only to the Company for payment.
(e) Expiration of Company's Right of First Refusal and
Transfer Restrictions. The first refusal rights of the Company and the transfer
restrictions set forth above shall remain in effect until such time, if ever, as
a distribution to the public is made of shares of the Company's Common Stock
pursuant to a registration statement filed under the Securities Act, at which
time the refusal rights of the Company and the transfer restrictions set forth
herein will automatically expire.
18. Company's Right of Repurchase.
(a) Right of Repurchase. The Company shall have the right (the
"Repurchase Right") to repurchase all, but no less than all, of the Option
Shares from the holder of this option, upon the occurrence of any of the events
specified in Section 18(b) below (the "Repurchase Event"). The Repurchase Right
may be exercised by the Company within 60 days following the later of the date
of the exercise of this option or the date the Company receives actual knowledge
of such event (the "Repurchase Period"). The Repurchase Right shall be exercised
by the Company by giving the holder written notice on or before the last day of
the Repurchase Period of its intention to exercise the Repurchase Right, and,
together with such notice, tendering to the holder an amount equal to (i) in the
case of an event specified in Section 18(b)(i), (ii) or (iii) below, the greater
of the option price or the fair market value of the shares, and (ii) in the case
of an event specified in Section 18(b)(iv) or (v) below, the option price. The
Company may assign the Repurchase Right to one or more persons. Upon timely
exercise of the Repurchase Right in the manner provided in this Section 18(a),
the holder shall deliver to the Company the stock certificate or certificates
representing the shares being repurchased, duly endorsed and free and clear of
any and all liens, charges and encumbrances.
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<PAGE>
If shares are not purchased under the Repurchase Right, the Employee
and his or her successor in interest, if any, will hold any such shares in his
or her possession subject to all of the provisions of this Agreement.
(b) Company's Right to Exercise Repurchase Right. The Company
shall have the Repurchase Right in the event that any of the following events
shall occur:
(i) The termination of the Employee's employment with
the Company and all Related Corporations, voluntarily or involuntarily, for any
reason whatsoever other than for Cause (as defined in Section 4(c) hereof),
including death or permanent disability, prior to the time this option shall be
fully vested as provided in Section 3 hereof;
(ii) The receivership, bankruptcy or other creditor's
proceeding regarding the Employee or the taking of any of Employee's shares
acquired upon exercise of this option by legal process, such as a levy of
execution;
(iii) Distribution of shares held by the Employee to
his or her spouse as such spouse's joint or community interest pursuant to a
decree of dissolution, operation of law, divorce, property settlement agreement
or for any other reason, except as may be otherwise permitted by the Company;
(iv) The termination of the Employee's employment for
Cause (as defined in Section 4(c) hereof); or
(v) Within one year of the termination of the
Employee's employment with the Company and all Related Corporations for any
reason whatsoever, the engagement by the Employee, directly or indirectly, alone
or with others, in (a) any business activity which is in competition with the
Company or any Related Corporation or (b) the solicitation of, interference with
or endeavor to entice away any employee of the Company or any Related
Corporation.
(c) Determination of Fair Market Value. The fair market value
of the Option Shares shall be, for purposes of this Section 18, determined in
accordance with paragraph 6D of the Plan as of the date of the Repurchase Event.
The determination by the Board of Directors of the fair market value shall be
conclusive and binding.
(d) Expiration of Company's Repurchase Right. The Repurchase
Right shall remain in effect until such time, if ever, as (i) the Option Shares
are transferred in accordance with Section 17 hereof or (ii) a distribution to
the public is made of shares of the Company's Common Stock pursuant to an
effective registration statement filed under the Securities Act.
19. Lock-up Agreement. The Employee agrees that in connection with an
underwritten public offering of Common Stock, upon the request of the Company or
the principal underwriter managing such public offering, this Option and the
Option Shares may not be sold, offered for sale or otherwise disposed of without
the prior written consent of the Company or such underwriter, as the case may
be, for at least 270 days after the effectiveness of the registration statement
filed in connection with such offering, or such longer period of time as the
Board of Directors may determine if all of the Company's directors and officers
agree to be similarly bound. The lock-up
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<PAGE>
agreement established pursuant to this Section 19 shall remain effective until
the Option and/or the Option Shares are sold to the public pursuant to an
effective registration statement or an exemption from the registration
requirements of the Securities Act.
20. Arbitration. Any dispute, controversy, or claim arising out of, in
connection with, or relating to the performance of this Agreement or its
termination shall be settled by arbitration in the Commonwealth of
Massachusetts, pursuant to the rules then obtaining of the American Arbitration
Association. Any award shall be final, binding and conclusive upon the parties
and a judgment rendered thereon may be entered in any court having jurisdiction
thereof.
21. Provision of Documentation to Employee. By signing this Agreement
the Employee acknowledges receipt of a copy of this Agreement and a copy of the
Plan.
22. Miscellaneous.
(a) Notices. All notices hereunder shall be in writing and
shall be deemed given when sent by certified or registered mail, postage
prepaid, return receipt requested, to the address set forth below. The addresses
for such notices may be changed from time to time by written notice given in the
manner provided for herein.
(b) Entire Agreement; Modification. This Agreement constitutes
the entire agreement between the parties relative to the subject matter hereof,
and supersedes all proposals, written or oral, and all other communications
between the parties relating to the subject matter of this Agreement. This
Agreement may be modified, amended or rescinded only by a written agreement
executed by both parties.
(c) Severability. The invalidity, illegality or
unenforceability of any provision of this Agreement shall in no way affect the
validity, legality or enforceability of any other provision.
(d) Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, subject to the limitations set forth in Section 10
hereof.
(e) Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the Commonwealth of Massachusetts,
without giving effect to the principles of the conflicts of laws thereof.
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<PAGE>
<TABLE>
IN WITNESS WHEREOF, the Company and the Employee have caused this
instrument to be executed as of the date first above written.
<CAPTION>
<S> <C>
NBX Corporation
100 Brickstone Square
- ----------------------------------- Andover, MA 01810
Employee
- ----------------------------------- By: -----------------------------------
Print Name of Employee Alexander Laats
Chairman and COO
- -----------------------------------
Street Address
- -----------------------------------
City State Zip Code
</TABLE>
-9-
Exhibit 4.2
NBX CORPORATION
1998 STOCK PLAN
1. Purpose. The purpose of the NBX Corporation 1998 Stock Plan (the
"Plan") is to encourage key employees of NBX Corporation (the "Company") and of
any present or future parent or subsidiary of the Company (collectively,
"Related Corporations") and other individuals who render services to the Company
or a Related Corporation, by providing opportunities to participate in the
ownership of the Company and its future growth through (a) the grant of options
which qualify as "incentive stock options" ("ISOs") under Section 422(b) of the
Internal Revenue Code of 1986, as amended (the "Code"); (b) the grant of options
which do not qualify as ISOs ("Non-Qualified Options"); (c) awards of stock in
the Company ("Awards"); and (d) opportunities to make direct purchases of stock
in the Company ("Purchases"). Both ISOs and Non-Qualified Options are referred
to hereafter individually as an "Option" and collectively as "Options." Options,
Awards and authorizations to make Purchases are referred to hereafter
collectively as "Stock Rights." As used herein, the terms "parent" and
"subsidiary" mean "parent corporation" and "subsidiary corporation,"
respectively, as those terms are defined in Section 424 of the Code.
2. Administration of the Plan.
A. Board or Committee Administration. The Plan shall be
administered by the Board of Directors of the Company (the "Board") or,
subject to Paragraph 2D (relating to compliance with Section 162(m) of
the Code), by a committee appointed by the Board (the "Committee").
Hereinafter, all references in this Plan to the "Committee" shall mean
the Board if no Committee has been appointed. Subject to ratification
of the grant or authorization of each Stock Right by the Board (if so
required by applicable state law), and subject to the terms of the
Plan, the Committee shall have the authority to (i) determine to whom
(from among the class of employees eligible under paragraph 3 to
receive ISOs) ISOs shall be granted, and to whom (from among the class
of individuals and entities eligible under paragraph 3 to receive
Non-Qualified Options and Awards and to make Purchases) Non-Qualified
Options, Awards and authorizations to make Purchases may be granted;
(ii) determine the time or times at which Options or Awards shall be
granted or Purchases made; (iii) determine the purchase price of shares
subject to each Option or Purchase, which prices shall not be less than
the minimum price specified in paragraph 6; (iv) determine whether each
Option granted shall be an ISO or a Non-Qualified Option; (v) determine
(subject to paragraph 7) the time or times when each Option shall
become exercisable and the duration of the exercise period; (vi) extend
the period during which outstanding Options may be exercised; (vii)
determine whether restrictions such as repurchase options are to be
imposed on shares subject to Options, Awards and Purchases and the
nature of such restrictions, if any, and (viii) interpret the Plan and
prescribe and rescind rules and regulations relating to it. If the
Committee determines to issue a Non-Qualified Option, it shall take
whatever actions it deems necessary, under Section 422 of the Code and
the regulations promulgated thereunder, to ensure that such Option is
not treated as an ISO. The interpretation and construction by the
Committee of any provisions of the Plan or of any Stock Right granted
under it shall be final unless otherwise determined by the Board. The
Committee may from time to time adopt such rules and regulations for
carrying out the Plan as it may deem advisable. No member of the Board
or the Committee shall be liable for any action or determination made
in good faith with respect to the Plan or any Stock Right granted under
it.
<PAGE>
B. Committee Actions. The Committee may select one of its
members as its chairman, and shall hold meetings at such time and
places as it may determine. A majority of the Committee shall
constitute a quorum and acts of a majority of the members of the
Committee at a meeting at which a quorum is present, or acts reduced to
or approved in writing by all the members of the Committee (if
consistent with applicable state law), shall be the valid acts of the
Committee. From time to time the Board may increase the size of the
Committee and appoint additional members thereof, remove members (with
or without cause) and appoint new members in substitution therefor,
fill vacancies however caused, or remove all members of the Committee
and thereafter directly administer the Plan.
C. Grant of Stock Rights to Board Members. Stock Rights may be
granted to members of the Board. All grants of Stock Rights to members
of the Board shall in all respects be made in accordance with the
provisions of this Plan applicable to other eligible persons. Members
of the Board who either (i) are eligible to receive grants of Stock
Rights pursuant to the Plan or (ii) have been granted Stock Rights may
vote on any matters affecting the administration of the Plan or the
grant of any Stock Rights pursuant to the Plan, except that no such
member shall act upon the granting to himself or herself of Stock
Rights, but any such member may be counted in determining the existence
of a quorum at any meeting of the Board during which action is taken
with respect to the granting to such member of Stock Rights.
D. Performance-Based Compensation. The Board, in its
discretion, may take such action as may be necessary to ensure that
Stock Rights granted under the Plan qualify as "qualified
performance-based compensation" within the meaning of Section 162(m) of
the Code and applicable regulations promulgated thereunder
("Performance-Based Compensation"). Such action may include, in the
Board's discretion, some or all of the following (i) if the Board
determines that Stock Rights granted under the Plan generally shall
constitute Performance-Based Compensation, the Plan shall be
administered, to the extent required for such Stock Rights to
constitute Performance-Based Compensation, by a Committee consisting
solely of two or more "outside directors" (as defined in applicable
regulations promulgated under Section 162(m) of the Code), (ii) if any
Non-Qualified Options with an exercise price less than the fair market
value per share of Common Stock are granted under the Plan and the
Board determines that such Options should constitute Performance-Based
Compensation, such options shall be made exercisable only upon the
attainment of a pre-established, objective performance goal established
by the Committee, and such grant shall be submitted for, and shall be
contingent upon shareholder approval and (iii) Stock Rights granted
under the Plan may be subject to such other terms and conditions as are
necessary for compensation recognized in connection with the exercise
or disposition of such Stock Right or the disposition of Common Stock
acquired pursuant to such Stock Right, to constitute Performance-Based
Compensation.
3. Eligible Employees and Others. ISOs may be granted only to employees
of the Company or any Related Corporation. Non-Qualified Options, Awards and
authorizations to make Purchases may be granted to any employee, officer or
director (whether or not also an employee) or consultant of the Company or any
Related Corporation. The Committee may take into consideration a recipient's
individual circumstances in determining whether to grant a Stock Right. The
granting of any Stock Right to any individual or entity shall neither entitle
that individual or entity to, nor disqualify such individual or entity from,
participation in any other grant of Stock Rights.
-2-
<PAGE>
4. Stock. The stock subject to Stock Rights shall be authorized but
unissued shares of Common Stock of the Company, par value $.001 per share (the
"Common Stock"), or shares of Common Stock reacquired by the Company in any
manner. The aggregate number of shares which may be issued pursuant to the Plan
is 400,000, subject to adjustment as provided in paragraph 13. If any Option
granted under the Plan shall expire or terminate for any reason without having
been exercised in full or shall cease for any reason to be exercisable in whole
or in part or shall be repurchased by the Company, the unpurchased shares of
Common Stock subject to such Option shall again be available for grants of Stock
Rights under the Plan.
5. Granting of Stock Rights. Stock Rights may be granted under the Plan
at any time on or after May 19, 1998 and prior to May 19, 2009. The date of
grant of a Stock Right under the Plan will be the date specified by the
Committee at the time it grants the Stock Right; provided, however, that such
date shall not be prior to the date on which the Committee acts to approve the
grant.
6. Minimum Option Price; ISO Limitations.
A. Price for Non-Qualified Options, Awards and Purchases.
Subject to Paragraph 2D (relating to compliance with Section 162(m) of
the Code), the exercise price per share specified in the agreement
relating to each Non-Qualified Option granted, and the purchase price
per share of stock granted in any Award or authorized as a Purchase,
under the Plan may be less than the fair market value of the Common
Stock of the Company on the date of grant; provided that, in no event
shall such exercise price or such purchase price be less than the
minimum legal consideration required therefor under the laws of any
jurisdiction in which the Company or its successors in interest may be
organized.
B. Price for ISOs. The exercise price per share specified in
the agreement relating to each ISO granted under the Plan shall not be
less than the fair market value per share of Common Stock on the date
of such grant. In the case of an ISO to be granted to an employee
owning stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any
Related Corporation, the price per share specified in the agreement
relating to such ISO shall not be less than one hundred ten percent
(110%) of the fair market value per share of Common Stock on the date
of grant. For purposes of determining stock ownership under this
paragraph, the rules of Section 424(d) of the Code shall apply. The
date of grant for purposes of this subparagraph shall mean the date
that the Company or Related Corporation completes the corporate action
constituting an offer of stock for sale to an individual.
C. $100,000 Annual Limitation on ISO Vesting. Each eligible
employee may be granted Options treated as ISOs only to the extent
that, in the aggregate under this Plan and all incentive stock option
plans of the Company and any Related Corporation, ISOs do not become
exercisable for the first time by such employee during any calendar
year with respect to stock having a fair market value (determined at
the time the ISOs were granted) in excess of $100,000. The Company
intends to designate any Options granted in excess of such limitation
as Non-Qualified Options, and the Company shall issue separate
certificates to the optionee with respect to Options that are
Non-Qualified Options and Options that are ISOs.
D. Determination of Fair Market Value. If, at the time an
Option is granted under the Plan, the Company's Common Stock is
publicly traded, "fair market value" shall be determined as of the date
of grant or, if the prices or quotes discussed in this sentence are
unavailable for such date,
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<PAGE>
the last business day for which such prices or quotes are available
prior to the date of grant and shall mean (i) the average (on that
date) of the high and low prices of the Common Stock on the principal
national securities exchange on which the Common Stock is traded, if
the Common Stock is then traded on a national securities exchange; or
(ii) the last reported sale price (on that date) of the Common Stock on
the Nasdaq National Market, if the Common Stock is not then traded on a
national securities exchange; or (iii) the closing bid price (or
average of bid prices) last quoted (on that date) by an established
quotation service for over-the-counter securities, if the Common Stock
is not reported on the Nasdaq National Market. If the Common Stock is
not publicly traded at the time an Option is granted under the Plan,
"fair market value" shall mean the fair value of the Common Stock as
determined by the Committee after taking into consideration all factors
which it deems appropriate, including, without limitation, recent sale
and offer prices of the Common Stock in private transactions negotiated
at arm's length.
7. Option Duration. Subject to earlier termination as provided in
paragraphs 9 and 10 or in the agreement relating to such Option, each Option
shall expire on the date specified by the Committee, but not more than (i) ten
years from the date of grant in the case of Options generally and (ii) five
years from the date of grant in the case of ISOs granted to an employee owning
stock possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or any Related Corporation, as determined
under paragraph 6(B). Subject to earlier termination as provided in paragraphs 9
and 10, the term of each ISO shall be the term set forth in the original
instrument granting such ISO, except with respect to any part of such ISO that
is converted into a Non-Qualified Option pursuant to paragraph 16.
8. Exercise of Option. Subject to the provisions of paragraphs 9
through 12 and paragraph 21, each Option granted under the Plan shall be
exercisable as follows:
A. Vesting. The Option shall either be fully exercisable on
the date of grant or shall become exercisable thereafter in such
installments as the Committee may specify.
B. Full Vesting of Installments. Once an installment becomes
exercisable, it shall remain exercisable until expiration or
termination of the Option, unless otherwise specified by the Committee.
C. Partial Exercise. Each Option or installment may be
exercised at any time or from time to time, in whole or in part, for up
to the total number of shares with respect to which it is then
exercisable.
D. Acceleration of Vesting. The Committee shall have the right
to accelerate the date that any installment of any Option becomes
exercisable; provided that the Committee shall not, without the consent
of an optionee, accelerate the permitted exercise date of any
installment of any Option granted to any employee as an ISO (and not
previously converted into a Non-Qualified Option pursuant to paragraph
16) if such acceleration would violate the annual vesting limitation
contained in Section 422(d) of the Code, as described in paragraph
6(C).
9. Termination of Employment. Unless otherwise specified in this Plan
or the agreement relating to such ISO, if an ISO optionee ceases to be employed
by the Company and all Related Corporations other than by reason of death or
disability as defined in paragraph 10, no further installments of his or her
ISOs shall become exercisable, and his or her ISOs shall terminate on the
earlier of (a) three months after the date of termination of his or her
employment, or (b) their specified expiration dates, except to the extent that
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<PAGE>
such ISOs (or unexercised installments thereof) have been converted into
Non-Qualified Options pursuant to paragraph 16. For purposes of this paragraph
9, employment shall be considered as continuing uninterrupted during any bona
fide leave of absence (such as those attributable to illness, military
obligations or governmental service) provided that the period of such leave does
not exceed 90 days or, if longer, any period during which such optionee's right
to reemployment is guaranteed by statute or by contract. A bona fide leave of
absence with the written approval of the Committee shall not be considered an
interruption of employment under this paragraph 9, provided that such written
approval contractually obligates the Company or any Related Corporation to
continue the employment of the optionee after the approved period of absence.
ISOs granted under the Plan shall not be affected by any change of employment
within or among the Company and Related Corporations, so long as the optionee
continues to be an employee of the Company or any Related Corporation. Nothing
in the Plan shall be deemed to give any grantee of any Stock Right the right to
be retained in employment or other service by the Company or any Related
Corporation for any period of time.
10. Death; Disability.
A. Death. If an ISO optionee ceases to be employed by the
Company and all Related Corporations by reason of his or her death, any
ISO owned by such optionee may be exercised, to the extent otherwise
exercisable on the date of death, by the estate, personal
representative or beneficiary who has acquired the ISO by will or by
the laws of descent and distribution, until the earlier of (i) the
specified expiration date of the ISO or (ii) 180 days from the date of
the optionee's death.
B. Disability. If an ISO optionee ceases to be employed by the
Company and all Related Corporations by reason of his or her
disability, such optionee shall have the right to exercise any ISO held
by him or her on the date of termination of employment, for the number
of shares for which he or she could have exercised it on that date,
until the earlier of (i) the specified expiration date of the ISO or
(ii) 180 days from the date of the termination of the optionee's
employment. For the purposes of the Plan, the term "disability" shall
mean "permanent and total disability" as defined in Section 22(e)(3) of
the Code or any successor statute.
11. Assignability. No ISO shall be assignable or transferable by the
optionee except by will or by the laws of descent and distribution, and during
the lifetime of the optionee shall be exercisable only by such optionee. Stock
Rights other than ISOs shall be transferable to the extent set forth in the
agreement relating to such Stock Right.
12. Terms and Conditions of Options. Options shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including restrictions applicable to shares of Common Stock
issuable upon exercise of Options. The Committee may specify that any
Non-Qualified Option shall be subject to the restrictions set forth herein with
respect to ISOs, or to such other termination and cancellation provisions as the
Committee may determine. The Committee may from time to time confer authority
and responsibility on one or more of its own members and/or one or more officers
of the Company to execute and deliver such instruments. The proper officers of
the Company are authorized and directed to take any and all action necessary or
advisable from time to time to carry out the terms of such instruments.
-5-
<PAGE>
13. Adjustments. Upon the occurrence of any of the following events, an
optionee's rights with respect to Options granted to such optionee hereunder
shall be adjusted as hereinafter provided, unless otherwise specifically
provided in the written agreement between the optionee and the Company relating
to such Option:
A. Stock Dividends and Stock Splits. If the shares of Common
Stock shall be subdivided or combined into a greater or smaller number
of shares or if the Company shall issue any shares of Common Stock as a
stock dividend on its outstanding Common Stock, the number of shares of
Common Stock deliverable upon the exercise of Options shall be
appropriately increased or decreased proportionately, and appropriate
adjustments shall be made in the purchase price per share to reflect
such subdivision, combination or stock dividend.
B. Consolidations or Mergers. If the Company is to be
consolidated with or acquired by another entity by sale or transfer of
capital stock or in a merger or other reorganization and as a result of
such sale or transfer, merger or reorganization the holders of the
outstanding voting stock of the Company immediately preceding the
consummation of such event, shall, immediately following such event,
hold, as a group, less than a majority of the combined voting
securities of the surviving or successor entity, or by a sale of all or
substantially all of the Company's assets or otherwise (each, an
"Acquisition"), the Committee or the board of directors of any entity
assuming the obligations of the Company hereunder (the "Successor
Board"), shall, as to outstanding Options, either (i) make appropriate
provision for the continuation of such Options by substituting on an
equitable basis for the shares then subject to such Options either (a)
the consideration payable with respect to the outstanding shares of
Common Stock in connection with the Acquisition, (b) shares of stock of
the surviving or successor corporation or (c) such other securities as
the Successor Board deems appropriate, the fair market value of which
shall not materially exceed the fair market value of the shares of
Common Stock subject to such Options immediately preceding the
Acquisition; or (ii) upon written notice to the optionees, provide that
all Options must be exercised, to the extent then exercisable or to be
exercisable as a result of the Acquisition or pursuant to paragraph 21,
within a specified number of days of the date of such notice, at the
end of which period the Options shall terminate; or (iii) terminate all
Options in exchange for a cash payment equal to the excess of the fair
market value of the shares subject to such Options (to the extent then
exercisable or to be exercisable as a result of the Acquisition or
pursuant to paragraph 21) over the exercise price thereof.
C. Recapitalization or Reorganization. In the event of a
recapitalization or reorganization of the Company (other than a
transaction described in subparagraph B above) pursuant to which
securities of the Company or of another corporation are issued with
respect to the outstanding shares of Common Stock, an optionee upon
exercising an Option shall be entitled to receive for the purchase
price paid upon such exercise the securities he or she would have
received if he or she had exercised such Option prior to such
recapitalization or reorganization.
D. Modification of ISOs. Notwithstanding the foregoing, any
adjustments made pursuant to subparagraphs A, B or C with respect to
ISOs shall be made only after the Committee, after consulting with
counsel for the Company, determines whether such adjustments would
constitute a "modification" of such ISOs (as that term is defined in
Section 424 of the Code) or would cause any adverse tax consequences
for the holders of such ISOs. If the Committee determines that such
adjustments made with respect to ISOs would constitute a modification
of such ISOs or would cause adverse tax consequences to the holders, it
may refrain from making such adjustments.
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<PAGE>
E. Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, each Option will terminate
immediately prior to the consummation of such proposed action or at
such other time and subject to such other conditions as shall be
determined by the Committee.
F. Issuances of Securities. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect,
and no adjustment by reason thereof shall be made with respect to, the
number or price of shares subject to Options. No adjustments shall be
made for dividends paid in cash or in property other than securities of
the Company.
G. Fractional Shares. No fractional shares shall be issued
under the Plan and the optionee shall receive from the Company cash in
lieu of such fractional shares.
H. Adjustments. Upon the happening of any of the events
described in subparagraphs A, B or C above, the class and aggregate
number of shares set forth in paragraph 4 hereof that are subject to
Stock Rights which previously have been or subsequently may be granted
under the Plan shall also be appropriately adjusted to reflect the
events described in such subparagraphs. The Committee or the Successor
Board shall determine the specific adjustments to be made under this
paragraph 13 and, subject to paragraph 2, its determination shall be
conclusive.
14. Means of Exercising Options. An Option (or any part or installment
thereof) shall be exercised by giving written notice to the Company at its
principal office address, or to such transfer agent as the Company shall
designate. Such notice shall identify the Option being exercised and specify the
number of shares as to which such Option is being exercised, accompanied by full
payment of the purchase price therefor either (a) in United States dollars in
cash or by check, (b) at the discretion of the Committee, through delivery of
shares of Common Stock having a fair market value equal as of the date of the
exercise to the cash exercise price of the Option, (c) at the discretion of the
Committee, by delivery of the grantee's personal recourse note bearing interest
payable not less than annually at no less than 100% of the lowest applicable
Federal rate, as defined in Section 1274(d) of the Code, (d) at the discretion
of the Committee and consistent with applicable law, through the delivery of an
assignment to the Company of a sufficient amount of the proceeds from the sale
of the Common Stock acquired upon exercise of the Option and an authorization to
the broker or selling agent to pay that amount to the Company, which sale shall
be at the participant's direction at the time of exercise, or (e) at the
discretion of the Committee, by any combination of (a), (b), (c) and (d) above.
If the Committee exercises its discretion to permit payment of the exercise
price of an ISO by means of the methods set forth in clauses (b), (c), (d) or
(e) of the preceding sentence, such discretion shall be exercised in writing at
the time of the grant of the ISO in question. The holder of an Option shall not
have the rights of a shareholder with respect to the shares covered by such
Option until the date of issuance of a stock certificate to such holder for such
shares. Except as expressly provided above in paragraph 13 with respect to
changes in capitalization and stock dividends, no adjustment shall be made for
dividends or similar rights for which the record date is before the date such
stock certificate is issued.
15. Term and Amendment of Plan. This Plan was adopted by the Board on
May 19, 1998, subject, with respect to the validation of ISOs granted under the
Plan, to approval of the Plan by the stockholders of the Company at the next
meeting of stockholders or, in lieu thereof, by written consent. If the approval
of stockholders is not obtained prior to May 19, 1999, any grants of ISOs under
the Plan made prior to that date will be rescinded. The Plan shall expire at the
end of the day on May 18, 2008 (except as to Options outstanding on that date).
Subject to the provisions of paragraph 5 above, Options may be granted
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<PAGE>
under the Plan prior to the date of stockholder approval of the Plan. The Board
may terminate or amend the Plan in any respect at any time, except that, without
the approval of the stockholders obtained within 12 months before or after the
Board adopts a resolution authorizing any of the following actions: (a) the
total number of shares that may be issued under the Plan may not be increased
(except by adjustment pursuant to paragraph 13); (b) the provisions of paragraph
3 regarding eligibility for grants of ISOs may not be modified; (c) the
provisions of paragraph 6(B) regarding the exercise price at which shares may be
offered pursuant to ISOs may not be modified (except by adjustment pursuant to
paragraph 13); and (d) the expiration date of the Plan may not be extended.
Except as otherwise provided in this paragraph 15, in no event may action of the
Board or stockholders alter or impair the rights of a grantee, without such
grantee's consent, under any Stock Right previously granted to such grantee.
16. Modifications of ISOs; Conversion of ISOs into Non-Qualified
Options. Subject to Paragraph 13D, without the prior written consent of the
holder of an ISO, the Committee shall not alter the terms of such ISO (including
the means of exercising such ISO) if such alteration would constitute a
modification (within the meaning of Section 424(h)(3) of the Code). The
Committee, at the written request or with the written consent of any optionee,
may in its discretion take such actions as may be necessary to convert such
optionee's ISOs (or any installments or portions of installments thereof) that
have not been exercised on the date of conversion into Non-Qualified Options at
any time prior to the expiration of such ISOs, regardless of whether the
optionee is an employee of the Company or a Related Corporation at the time of
such conversion. Such actions may include, but shall not be limited to,
extending the exercise period or reducing the exercise price of the appropriate
installments of such ISOs. At the time of such conversion, the Committee (with
the consent of the optionee) may impose such conditions on the exercise of the
resulting Non-Qualified Options as the Committee in its discretion may
determine, provided that such conditions shall not be inconsistent with this
Plan. Nothing in the Plan shall be deemed to give any optionee the right to have
such optionee's ISOs converted into Non-Qualified Options, and no such
conversion shall occur until and unless the Committee takes appropriate action.
Upon the taking of such action, the Company shall issue separate certificates to
the optionee with respect to Options that are Non-Qualified Options and Options
that are ISOs.
17. Application Of Funds. The proceeds received by the Company from the
sale of shares pursuant to Options granted and Purchases authorized under the
Plan shall be used for general corporate purposes.
18. Notice to Company of Disqualifying Disposition. By accepting an ISO
granted under the Plan, each optionee agrees to notify the Company in writing
immediately after such optionee makes a Disqualifying Disposition (as described
in Sections 421, 422 and 424 of the Code and regulations thereunder) of any
stock acquired pursuant to the exercise of ISOs granted under the Plan. A
Disqualifying Disposition is generally any disposition occurring on or before
the later of (a) the date two years following the date the ISO was granted or
(b) the date one year following the date the ISO was exercised.
19. Withholding of Additional Income Taxes. Upon the exercise of a
Non-Qualified Option, the transfer of a Non-Qualified Stock Option pursuant to
an arm's-length transaction, the grant of an Award, the making of a Purchase of
Common Stock for less than its fair market value, the making of a Disqualifying
Disposition (as defined in paragraph 18), the vesting or transfer of restricted
stock or securities acquired on the exercise of an Option hereunder, or the
making of a distribution or other payment with respect to such stock or
securities, the Company may withhold taxes in respect of amounts that constitute
compensation includible in gross income. The Committee in its discretion may
condition (i) the exercise of an Option, (ii) the transfer of a Non-Qualified
Stock Option, (iii) the grant of an Award, (iv) the making of a Purchase of
-8-
<PAGE>
Common Stock for less than its fair market value, or (v) the vesting or
transferability of restricted stock or securities acquired by exercising an
Option, on the grantee's making satisfactory arrangement for such withholding.
Such arrangement may include payment by the grantee in cash or by check of the
amount of the withholding taxes or, at the discretion of the Committee, by the
grantee's delivery of previously held shares of Common Stock or the withholding
from the shares of Common Stock otherwise deliverable upon exercise of an Option
shares having an aggregate fair market value equal to the amount of such
withholding taxes.
20. Governmental Regulation. The Company's obligation to sell and
deliver shares of the Common Stock under this Plan is subject to the approval of
any governmental authority required in connection with the authorization,
issuance or sale of such shares.
Government regulations may impose reporting or other obligations on the
Company with respect to the Plan. For example, the Company may be required to
send tax information statements to employees and former employees that exercise
ISOs under the Plan, and the Company may be required to file tax information
returns reporting the income received by grantees of Options in connection with
the Plan.
21. Acceleration of Vesting of Option after an Acquisition. As of the
effective date of an Acquisition, as defined in paragraph 13 of this Plan,
one-half of the Options granted to the optionee that are unvested as of the
effective date of the Acquisition shall become fully vested and exercisable by
the optionee immediately prior to the effective date of the Acquisition. The
remaining unvested Options shall continue to vest over the remaining vesting
period on a pro-rata basis, with the amount scheduled to vest on each vesting
date in the remaining vesting period reduced by one half. The foregoing
notwithstanding, the Board of Directors, in its sole discretion, may require
that the optionee's rights under this paragraph shall be conditioned on approval
by stockholders of the Company in accordance with Section 280G(b)(5)(B) of the
Code and regulations thereunder. Notwithstanding the foregoing, no Option shall
become vested and exercisable pursuant to this paragraph and no optionee shall
acquire any rights as a result of this paragraph, if the acceleration or vesting
of any such Option would prevent the Company from accounting for a particular
business combination as a "pooling of interests" pursuant to the terms and
conditions of APB 16 and the rules and regulations promulgated thereunder (or
any successor rule or pronouncement) at any time when the Board of Directors
deems it desirable to account for such business combination as a "pooling of
interests."
22. Governing Law. The validity and construction of the Plan and the
instruments evidencing Options shall be governed by the laws of The Commonwealth
of Massachusetts, or the laws of any jurisdiction in which the Company or its
successors in interest may be organized.
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<PAGE>
NBX Corporation
Incentive Stock Option Agreement
NBX Corporation, a Delaware corporation (the "Company"), hereby grants
as of ________, to _________ (the "Employee"), an option to purchase a maximum
of ___________ (_______) shares (the "Option Shares") of its Common Stock, $.001
par value ("Common Stock"), at the price of __________ ($_____) per share, on
the following terms and conditions:
1. Grant Under 1998 Stock Plan. This option is granted pursuant to and
is governed by the Company's 1998 Stock Plan (the "Plan") and, unless the
context otherwise requires, terms used herein shall have the same meaning as in
the Plan. Determinations made in connection with this option pursuant to the
Plan shall be governed by the Plan as it exists on this date.
2. Grant as Incentive Stock Option; Other Options. This option is
intended to qualify as an incentive stock option under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"). This option is in
addition to any other options heretofore or hereafter granted to the Employee by
the Company or any Related Corporation (as defined in the Plan), but a duplicate
original of this instrument shall not effect the grant of another option.
<TABLE>
3. Vesting of Option if Employment Continues. If the Employee has
continued to be employed by the Company or any Related Corporation on the
following dates, the Employee may exercise this option for the number of shares
of Common Stock set opposite the applicable date:
<CAPTION>
<S> <C>
Less than one year from the date - ______ shares
hereof
One year from the date hereof - an additional _______ shares
Each month thereafter until the - an additional _______ shares
four year anniversary of the date
hereof (a total of 36 monthly
installments)
</TABLE>
Notwithstanding the foregoing, in accordance with and subject to the
provisions of the Plan, the Committee may, in its discretion, accelerate the
date that any installment of this Option becomes exercisable. The foregoing
rights are cumulative and (subject to Sections 4 or 5 hereof if the Employee
ceases to be employed by the Company and all Related Corporations) may be
exercised on or before the date which is ten years from the date this option is
granted.
4. Termination of Employment.
(a) Termination Other Than for Cause. If the Employee ceases
to be employed by the Company and all Related Corporations, other than
by reason of death or disability as defined in Section 5 or termination
for Cause as defined in Section 4(c),
<PAGE>
no further installments of this option shall become exercisable, and
this option shall terminate (and may no longer be exercised) after the
passage of three months from the Employee's last day of employment, but
in no event later than the scheduled expiration date. In such a case,
the Employee's only rights hereunder shall be those which are properly
exercised before the termination of this option.
(b) Termination for Cause. If the employment of the Employee
is terminated for Cause (as defined in Section 4(c)), this option shall
terminate upon the Employee's receipt of written notice of such
termination and shall thereafter not be exercisable to any extent
whatsoever.
(c) Definition of Cause. "Cause" shall mean conduct involving
one or more of the following: (i) disloyalty, gross negligence, willful
misconduct, dishonesty or breach of fiduciary duty to the Company or
Related Corporation; (ii) the commission of an act of embezzlement or
fraud; (iii) deliberate disregard of the rules or policies of the
Company or Related Corporation which results in direct or indirect
loss, damage or injury to the Company or Related Corporation; (iv) the
unauthorized disclosure of any trade secret or confidential information
of the Company or Related Corporation; or (v) the commission of an act
which constitutes unfair competition with the Company or Related
Corporation or which induces any customer or supplier to breach a
contract with the Company or Related Corporation.
5. Death; Disability.
(a) Death. If the Employee dies while in the employ of the
Company or any Related Corporation, this option may be exercised, to
the extent otherwise exercisable on the date of his or her death, by
the Employee's estate, personal representative or beneficiary to whom
this option has been assigned pursuant to Section 10, at any time
within 180 days after the date of death, but not later than the
scheduled expiration date.
(b) Disability. If the Employee ceases to be employed by the
Company and all Related Corporations by reason of his or her disability
(as defined in the Plan), this option may be exercised, to the extent
otherwise exercisable on the date of the termination of his or her
employment, at any time within 180 days after such termination, but not
later than the scheduled expiration date.
(c) Effect of Termination. At the expiration of the 180-day
period provided in paragraphs (a) or (b) of this Section 5 or the
scheduled expiration date, whichever is the earlier, this option shall
terminate (and shall no longer be exercisable) and the only rights
hereunder shall be those as to which the option was properly exercised
before such termination.
6. Partial Exercise. This option may be exercised in part at any time
and from time to time within the above limits, except that this option may not
be exercised for a fraction of a share unless such exercise is with respect to
the final installment of stock subject to this option and cash in lieu of a
fractional share must be paid, in accordance with Paragraph 13(G) of the Plan,
to permit
-2-
<PAGE>
the Employee to exercise completely such final installment. Any fractional share
with respect to which an installment of this option cannot be exercised because
of the limitation contained in the preceding sentence shall remain subject to
this option and shall be available for later purchase by the Employee in
accordance with the terms hereof.
7. Payment of Price. (a) The option price shall be paid in the
following manner:
(i) in cash or by check;
(ii) subject to Section 7(b) below, by delivery of shares of
the Company's Common Stock having a fair market value
(as determined by the Committee) equal as of the date of
exercise to the option price;
(iii) by delivery of an assignment satisfactory in form and
substance to the Company of a sufficient amount of the
proceeds from the sale of the Option Shares and an
instruction to the broker or selling agent to pay that
amount to the Company; or
(iv) by any combination of the foregoing.
(b) Limitations on Payment by Delivery of Common Stock. If the
Employee delivers Common Stock held by the Employee ("Old Stock") to
the Company in full or partial payment of the option price, and the Old
Stock so delivered is subject to restrictions or limitations imposed by
agreement between the Employee and the Company, an equivalent number of
Option Shares shall be subject to all restrictions and limitations
applicable to the Old Stock to the extent that the Employee paid for
the Option Shares by delivery of Old Stock, in addition to any
restrictions or limitations imposed by this Agreement. Notwithstanding
the foregoing, the Employee may not pay any part of the exercise price
hereof by transferring Common Stock to the Company unless such Common
Stock has been owned by the Employee free of any substantial risk of
forfeiture for at least six months.
(c) Permitted Payment by Recourse Note. In addition, if this
paragraph is initialed below by the person signing this Agreement on
behalf of the Company, the option price may be paid by delivery of the
Employee's three year personal recourse promissory note bearing
interest payable not less than annually at the applicable Federal rate,
as defined in Section 1274(d) of the Code.
---------
(initials)
8. Restrictions on Resale; Legend. Option Shares may not be transferred
without the Company's written consent except by will, by the laws of descent and
distribution and in accordance with the provisions of Sections 17 and 18, if
applicable. Option Shares will be of an illiquid nature and will be deemed to be
"restricted securities" for purposes of the Securities Act of 1933, as amended
(the "Securities Act"). Accordingly, such shares must be sold in compliance
-3-
<PAGE>
with the registration requirements of the Securities Act or an exemption
therefrom. Each certificate evidencing any of the Option Shares shall bear a
legend substantially as follows:
"The shares represented by this certificate are subject to
restrictions on transfer and may not be sold, exchanged,
transferred, pledged, hypothecated or otherwise disposed of
except in accordance with and subject to all the terms and
conditions of a certain Incentive Stock Option Agreement dated
as of 11/16/98, a copy of which the Company will furnish to
the holder of this certificate upon request and without
charge."
9. Method of Exercising Option. Subject to the terms and conditions of
this Agreement, this option may be exercised by written notice to the Company at
its principal executive office, or to such transfer agent as the Company shall
designate. Such notice shall state the election to exercise this option and the
number of Option Shares for which it is being exercised and shall be signed by
the person or persons so exercising this option. Such notice shall be
accompanied by payment of the full purchase price of such shares, and the
Company shall deliver a certificate or certificates representing such shares as
soon as practicable after the notice shall be received. Such certificate or
certificates shall be registered in the name of the person or persons so
exercising this option (or, if this option shall be exercised by the Employee
and if the Employee shall so request in the notice exercising this option, shall
be registered in the name of the Employee and another person jointly, with right
of survivorship). In the event this option shall be exercised, pursuant to
Section 5 hereof, by any person or persons other than the Employee, such notice
shall be accompanied by appropriate proof of the right of such person or persons
to exercise this option.
10. Option Not Transferable. This option is not transferable or
assignable except by will or by the laws of descent and distribution. During the
Employee's lifetime only the Employee can exercise this option.
11. No Obligation to Exercise Option. The grant and acceptance of this
option imposes no obligation on the Employee to exercise it.
12. No Obligation to Continue Employment. Neither the Plan, this
Agreement, nor the grant of this option imposes any obligation on the Company or
any Related Corporation to continue the Employee in employment.
13. No Rights as Stockholder until Exercise. The Employee shall have no
rights as a stockholder with respect to the Option Shares until such time as the
Employee has exercised this option by delivering a notice of exercise and has
paid in full the purchase price for the shares so exercised in accordance with
Section 9. Except as is expressly provided in the Plan with respect to certain
changes in the capitalization of the Company, no adjustment shall be made for
dividends or similar rights for which the record date is prior to such date of
exercise.
14. Capital Changes and Business Successions. The Plan contains
provisions covering the treatment of options in a number of contingencies such
as stock splits and mergers. Provisions in the Plan for adjustment with respect
to stock subject to options and the related
-4-
<PAGE>
provisions with respect to successors to the business of the Company are hereby
made applicable hereunder and are incorporated herein by reference.
15. Early Disposition. The Employee agrees to notify the Company in
writing immediately after the Employee transfers any Option Shares, if such
transfer occurs on or before the later of (a) the date two years after the date
of this Agreement or (b) the date one year after the date the Employee acquired
such Option Shares. The Employee also agrees to provide the Company with any
information concerning any such transfer required by the Company for tax
purposes.
16. Withholding Taxes. If the Company or any Related Corporation in its
discretion determines that it is obligated to withhold any tax in connection
with the exercise of this option, or in connection with the transfer of, or the
lapse of restrictions on, any Common Stock or other property acquired pursuant
to this option, the Employee hereby agrees that the Company or any Related
Corporation may withhold from the Employee's wages or other remuneration the
appropriate amount of tax. At the discretion of the Company or Related
Corporation, the amount required to be withheld may be withheld in cash from
such wages or other remuneration or in kind from the Common Stock or other
property otherwise deliverable to the Employee on exercise of this option. The
Employee further agrees that, if the Company or any Related Corporation does not
withhold an amount from the Employee's wages or other remuneration sufficient to
satisfy the withholding obligation of the Company or Related Corporation, the
Employee will make reimbursement on demand, in cash, for the amount
underwithheld.
17. Company Right of First Refusal.
(a) Exercise of Right. If the Employee desires to transfer all
or any part of the Option Shares to any person other than the Company
(an "Offeror"), the Employee shall: (i) obtain in writing an
irrevocable and unconditional bona fide offer (the "Offer") for the
purchase thereof from the Offeror; and (ii) give written notice (the
"Option Notice") to the Company setting forth the Employee's desire to
transfer such shares, which Option Notice shall be accompanied by a
photocopy of the Offer and shall set forth at least the name and
address of the Offeror and the price and terms of the Offer. Upon
receipt of the Option Notice, the Company shall have an assignable
option to purchase any or all of such Option Shares (the "Company
Option Shares") specified in the Option Notice, such option to be
exercisable by giving, within 30 days after receipt of the Option
Notice, a written counternotice to the Employee. If the Company elects
to purchase any or all of such Company Option Shares, it shall be
obligated to purchase, and the Employee shall be obligated to sell to
the Company, such Company Option Shares at the price and terms
indicated in the Offer within 30 days from the date of delivery by the
Company of such counter-notice.
(b) Sale of Option Shares to Offeror. The Employee may, for 60
days after the expiration of the 30-day option period as set forth in
Section 17(a), sell to the Offeror, pursuant to the terms of the Offer,
any or all of such Company Option Shares not purchased or agreed to be
purchased by the Company or its assignee; provided, however, that the
Employee shall not sell such Company Option Shares to such Offeror if
such Offeror is a competitor of the Company and the Company gives
written notice to the Employee, within
-5-
<PAGE>
30 days of its receipt of the Option Notice, stating that the Employee
shall not sell his or her Company Option Shares to such Offeror; and
provided, further, that prior to the sale of such Option Shares to an
Offeror, such Offeror shall execute an agreement with the Company
pursuant to which such Offeror agrees to be subject to the restrictions
set forth in this Section 17. If any or all of such Company Option
Shares are not sold pursuant to an Offer within the time permitted
above, the unsold Company Option Shares shall remain subject to the
terms of this Section 17.
(c) Adjustments for Changes in Capital Structure. If there
shall be any change in the Common Stock of the Company through merger,
consolidation, reorganization, recapitalization, stock dividend, stock
split, combination or exchange of shares, or the like, the restrictions
contained in Section 8 and this Section 17 shall apply with equal force
to additional and/or substitute securities, if any, received by the
Employee in exchange for, or by virtue of his or her ownership of,
Option Shares, except as otherwise determined by the Board of Directors
of the Company.
(d) Failure to Deliver Option Shares. If the Employee fails or
refuses to deliver on a timely basis duly endorsed certificates
representing Company Option Shares to be sold to the Company or its
assignee pursuant to this Section 17, the Company shall have the right
to deposit the purchase price for such Company Option Shares in a
special account with any bank or trust company in the Commonwealth of
Massachusetts, giving notice of such deposit to the Employee, whereupon
such Company Option Shares shall be deemed to have been purchased by
the Company. All such monies shall be held by the bank or trust company
for the benefit of the Employee. All monies deposited with the bank or
trust company but remaining unclaimed for two years after the date of
deposit shall be repaid by the bank or trust company to the Company on
demand, and the Employee shall thereafter look only to the Company for
payment.
(e) Expiration of Company's Right of First Refusal and
Transfer Restrictions. The first refusal rights of the Company and the
transfer restrictions set forth above shall remain in effect until such
time, if ever, as a distribution to the public is made of shares of the
Company's Common Stock pursuant to a registration statement filed under
the Securities Act, at which time the refusal rights of the Company and
the transfer restrictions set forth herein will automatically expire.
18. Company's Right of Repurchase.
(a) Right of Repurchase. The Company shall have the right (the
"Repurchase Right") to repurchase all, but no less than all, of the
Option Shares from the holder of this option, upon the occurrence of
any of the events specified in Section 18(b) below (the "Repurchase
Event"). The Repurchase Right may be exercised by the Company within 60
days following the later of the date of the exercise of this option or
the date the Company receives actual knowledge of such event (the
"Repurchase Period"). The Repurchase Right shall be exercised by the
Company by giving the holder written notice on or before the last day
of the Repurchase Period of its intention to exercise the Repurchase
Right, and, together with such notice, tendering to the holder an
amount equal to (i) in the case of an event specified in Section
18(b)(i) or (ii) below, the greater of the option price or the fair
market value of the shares, and (ii) in the case of an event
-6-
<PAGE>
specified in Section 18(b)(iii) or (iv) below, the option price. The
Company may assign the Repurchase Right to one or more persons. Upon
timely exercise of the Repurchase Right in the manner provided in this
Section 18(a), the holder shall deliver to the Company the stock
certificate or certificates representing the shares being repurchased,
duly endorsed and free and clear of any and all liens, charges and
encumbrances.
If shares are not purchased under the Repurchase Right, the Employee
and his or her successor in interest, if any, will hold any such shares in his
or her possession subject to all of the provisions of this Agreement.
(b) Company's Right to Exercise Repurchase Right. The Company
shall have the Repurchase Right in the event that any of the following
events shall occur:
(i) The receivership, bankruptcy or other creditor's
proceeding regarding the Employee or the taking of any
of Employee's shares acquired upon exercise of this
option by legal process, such as a levy of execution;
(ii) Distribution of shares held by the Employee to his or
her spouse as such spouse's joint or community interest
pursuant to a decree of dissolution, operation of law,
divorce, property settlement agreement or for any other
reason, except as may be otherwise permitted by the
Company;
(iii) The termination of the Employee's employment for Cause
(as defined in Section 4(c) hereof); or
(iv) Within one year of the termination of the Employee's
employment with the Company and all Related
Corporations for any reason whatsoever, the engagement
by the Employee, directly or indirectly, alone or with
others, in (a) any business activity which is in
competition with the Company or any Related Corporation
or (b) the solicitation of, interference with or
endeavor to entice away any employee of the Company or
any Related Corporation.
(c) Determination of Fair Market Value. The fair market value
of the Option Shares shall be, for purposes of this Section 18,
determined in accordance with paragraph 6D of the Plan as of the date
of the Repurchase Event. The determination by the Board of Directors of
the fair market value shall be conclusive and binding.
(d) Expiration of Company's Repurchase Right. The Repurchase
Right shall remain in effect until such time, if ever, as (i) the
Option Shares are transferred in accordance with Section 17 hereof or
(ii) a distribution to the public is made of shares of the Company's
Common Stock pursuant to an effective registration statement filed
under the Securities Act.
19. Lock-up Agreement. The Employee agrees that in connection with an
underwritten public offering of Common Stock, upon the request of the Company or
the principal underwriter
-7-
<PAGE>
managing such public offering, this Option and the Option Shares may not be
sold, offered for sale or otherwise disposed of without the prior written
consent of the Company or such underwriter, as the case may be, for up to 180
days after the effectiveness of the registration statement filed in connection
with such offering, or such longer period of time as the Board of Directors may
determine if all of the Company's directors and officers agree to be similarly
bound. The lock-up agreement established pursuant to this Section 19 shall
remain effective until the Option and/or the Option Shares are sold to the
public pursuant to an effective registration statement or an exemption from the
registration requirements of the Securities Act.
20. Arbitration. Any dispute, controversy, or claim arising out of, in
connection with, or relating to the performance of this Agreement or its
termination shall be settled by arbitration in the Commonwealth of
Massachusetts, pursuant to the rules then obtaining of the American Arbitration
Association. Any award shall be final, binding and conclusive upon the parties
and a judgment rendered thereon may be entered in any court having jurisdiction
thereof.
21. Provision of Documentation to Employee. By signing this Agreement
the Employee acknowledges receipt of a copy of this Agreement and a copy of the
Plan.
22. Acceleration of Vesting of Option after an Acquisition. As of the
effective date of an Acquisition, as defined in paragraph 13 of the Plan,
one-half of the Option Shares granted to the Employee that are unvested as of
the effective date of the Acquisition shall become fully vested and exercisable
by the Employee immediately prior to the effective date of the Acquisition. The
remaining unvested Option Shares shall continue to vest over the remaining
vesting period on a pro-rata basis, with the amount scheduled to vest on each
vesting date in the remaining vesting period reduced by one half. The foregoing
notwithstanding, the Board of Directors, in its sole discretion, may require
that the Employee's rights under this paragraph shall be conditioned on approval
by stockholders of the Company in accordance with Section 280G(b)(5)(B) of the
Code and regulations thereunder. Notwithstanding the foregoing, no Option Shares
granted pursuant to this Agreement shall become vested and exercisable pursuant
to this paragraph and Employee shall not acquire any rights as a result of this
paragraph, if the acceleration or vesting of any such Option Shares would
prevent the Company from accounting for a particular business combination as a
"pooling of interests" pursuant to the terms and conditions of APB 16 and the
rules and regulations promulgated thereunder (or any successor rule or
pronouncement) at any time when the Board of Directors deems it desirable to
account for such business combination as a "pooling of interests."
23. Miscellaneous.
(a) Notices. All notices hereunder shall be in writing and
shall be deemed given when sent by certified or registered mail,
postage prepaid, return receipt requested, to the address set forth
below. The addresses for such notices may be changed from time to time
by written notice given in the manner provided for herein.
(b) Entire Agreement; Modification. This Agreement constitutes
the entire agreement between the parties relative to the subject matter
hereof, and supersedes all proposals, written or oral, and all other
communications between the parties relating to the
-8-
<PAGE>
subject matter of this Agreement This Agreement may be modified,
amended or rescinded only by a written agreement executed by both
parties.
(c) Severability. The invalidity, illegality or
unenforceability of any provision of this Agreement shall in no way
affect the validity, legality or enforceability of any other provision.
(d) Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and assigns, subject to the limitations set forth
in Section 10 hereof.
(e) Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the Commonwealth of
Massachusetts, without giving effect to the principles of the conflicts
of laws thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-9-
<PAGE>
<TABLE>
IN WITNESS WHEREOF, the Company and the Employee have caused this
instrument to be executed as of the date first above written.
<CAPTION>
<S> <C>
NBX CORPORATION
100 Brickstone Square
----------------------------------- Andover, MA 01810
Employee
----------------------------------- By: -----------------------------------
Print Name of Employee Alexander Laats
Chairman and COO
-----------------------------------
Street Address
-----------------------------------
City State Zip Code
</TABLE>
-10-
Exhibit 5.1
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304-1050
TELEPHONE 650-493-9300 FACSIMILE 650-493-6811
March 12, 1999
3Com Corporation
5400 Bayfront Plaza
Santa Clara, CA 95052
Re:Registration Statement on Form S-8
NBX Corporation 1996 Stock Plan and NBX Corporation 1998 Stock Plan
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 (the
"Registration Statement") to be filed by 3Com Corporation, a Delaware
corporation (the "Company" or "you"), with the Securities and Exchange
Commission on or about March 12, 1999, in connection with the registration under
the Securities Act of 1933, as amended (the "Act"), of 509,912 shares of your
Common Stock, $0.01 par value (the "Shares"), reserved for issuance pursuant to
the NBX Corporation 1996 Stock Plan and the NBX Corporation 1998 Stock Plan
(collectively the "Plans"). As your legal counsel, we have reviewed the actions
proposed to be taken by you in connection with the proposed sale and issuance of
the Shares by the Company under the Plans.
It is our opinion that, upon completion of the actions being taken, or
contemplated by us as your counsel to be taken by you prior to the issuance of
the Shares pursuant to the Registration Statement and the Plans, and upon
completion of the actions being taken in order to permit such transactions to be
carried out in accordance with the securities laws of the various states where
required, the Shares will be legally and validly issued, fully paid and
nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in the
Registration Statement, the Prospectus, and any subsequent amendment thereto.
Very truly yours,
/s/ WILSON SONSINI GOODRICH & ROSATI, P.C.
------------------------------------------
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
Exhibit 23.1
CONSENT OF DELOITTE & TOUCHE LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration
Statement of 3Com Corporation on Form S-8 of our report dated June 23, 1998
appearing in the Annual Report on Form 10-K of 3Com Corporation for the year
ended May 31, 1998.
/s/ DELOITTE & TOUCHE LLP
- --------------------------
DELOITTE & TOUCHE LLP
San Jose, California
March 11, 1999
Exhibit 23.2
CONSENT OF GRANT THORNTON LLP, INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration
Statement on Form S-8 and related prospectus(es) pertaining to the NBX
Corporation 1996 Stock Plan and NBX Corporation 1998 Stock Plan of our report
dated November 4, 1996, included in 3Com Corporation's Annual Report on Form
10-K for the fiscal year ended May 31, 1998, with respect to the consolidated
financial statements and schedule of U.S. Robotics Corporation and Subsidiaries
for the year ended September 29, 1996 not included therein.
/s/ GRANT THORNTON LLP
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GRANT THORNTON LLP
Chicago, Illinois
March 11, 1999