<PAGE>
As filed with the Securities and Exchange Commission on May 21, 1996
Registration No. 333-_______________________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
_______________________
MEASUREX CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 94-1658697
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
ONE RESULTS WAY, CUPERTINO, CA 95014
(Address of principal executive office) (Zip Code)
________________________
MEASUREX CORPORATION
1993 STOCK OPTION PLAN
(Full title of the Plan)
_______________________
DAVID A. BOSSEN
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
MEASUREX CORPORATION
ONE RESULTS WAY, CUPERTINO, CA 95014
(Name and address of agent for service)
(408) 255-1500
(Telephone number, including area code, of agent for service)
________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) per Share(2) Price(2) Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Options to Purchase 2,000,000
Common Stock
Common Stock,
$0.01 par value 2,000,000 $28.75 $57,500,000 $19,827.55
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the 1993 Stock Option 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 Registrant's outstanding shares
of Common Stock.
(2) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, on the basis of the high and low
selling prices per share of Common Stock of Measurex Corporation on
May 16, 1996 as reported on the New York Stock Exchange.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
---------------------------------------
Measurex Corporation ("the Registrant") hereby incorporates by
reference into this Registration Statement the following documents previously
filed with the Securities and Exchange Commission (the "SEC"):
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 3, 1995;
(b) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 3, 1996;
(c) The Registrant's Registration Statement No. 0-108770 on Form 8-A
filed with the SEC on December 20, 1988, as amended by Form 8 filed with the SEC
on July 6, 1990, in which there is described the terms, rights and provisions
applicable to the Registrant's outstanding Common Stock.
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act"), after the date of this Registration Statement
and prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
then remaining unsold shall be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof from the date of filing of such
documents.
Item 4. Description of Securities
-------------------------
Not Applicable.
Item 5. Interests of Named Experts and Counsel
--------------------------------------
Not Applicable.
Item 6. Indemnification of Directors and Officers
-----------------------------------------
The Registrant's Restated Certificate of Incorporation provides that
no director or member of the Executive Committee of the Registrant will be
personally liable to the Registrant or any of its stockholders for monetary
damages arising from the director's or member's breach of his fiduciary duties
to the Registrant. However, this does not apply with respect to any action in
which such person would be liable under Section 174 of Title 8 of the Delaware
General Corporation Law, as amended (the "Delaware Law"), nor does it apply with
respect to any liability in which such person (i) breached his duty of loyalty
to the Registrant; (ii) did not act in good faith or, in failing to act, did not
act in good faith; (iii) acted in a manner involving intentional misconduct or a
knowing violation of law or, in failing to act, shall have acted in a manner
involving intentional misconduct or a knowing violation of law or (iv) derived
an improper personal benefit.
Pursuant to the provisions of Section 145 of the Delaware Law every
corporation has power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding (other than an action by or in the right of the corporation)
by reason of the fact that he is or was a director, officer, employee or agent
of the Registrant or of any corporation, partnership, joint venture, trust or
other enterprise for which he is or was serving in such capacity at the request
II-1
<PAGE>
of the Registrant, against any and all expenses, judgments, fines and amounts
paid in settlement and reasonably incurred by him in connection with such
action, suit or proceeding. The power to indemnify applies only if such person
acted in good faith and in a manner he reasonably believed to be in the best
interests, or not opposed to the best interests, of the corporation, and with
respect to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful.
The power to indemnify applies to actions brought by or in the right
of the corporation as well, but only to the extent of defense and settlement
expenses and not to any satisfaction of a judgment or settlement of the claim
itself, and with the further limitation that in such actions no indemnification
shall be made in the event of any adjudication of negligence or misconduct
unless the court, in its discretion, feels that in the light of all the
circumstances indemnification should apply.
To the extent any of the persons referred to in the two immediately
preceding paragraphs is successful in the defense of the actions referred to
therein, such person is entitled pursuant to Section 145 of the Delaware Law to
indemnification as described above. Section 145 of the Delaware Law also grants
power to advance litigation expenses upon receipt of any undertaking to repay
such advances in the event no right to indemnification is subsequently shown. A
corporation may also obtain insurance at its expense to protect anyone who might
be indemnified, or has a right to insist on indemnification, under the statute.
The Registrant has entered into indemnification agreements with
certain of its current officers and all of its current directors which provide
for indemnification to the fullest extent permitted by the Delaware Law,
including Section 145 thereof. Such agreements have been approved by the
Registrant's stockholders. The Registrant's stockholders also approved the use
of similar agreements which may be entered into from time to time with future
directors and/or future officers of the Registrant.
Item 7. Exemption from Registration Claimed
-----------------------------------
Not Applicable.
Item 8. Exhibits
--------
Exhibit Number Exhibit
- -------------- -------
4.0 Instruments Defining Rights of Stockholders. Reference is made
to Registrant's Registration Statement No. 0-108770 on Form 8-A
and Amendment No. 1 thereto, which are incorporated herein by
reference pursuant to Item 3(c) of this Registration Statement.
5.0 Opinion and Consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Independent Auditors - Coopers & Lybrand.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24.0 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 1993 Stock Option Plan.
99.2* Form of Notice of Grant of Stock Option and Stock Option
Agreement (Non-Officer Employee).
99.3* Form of Notice of Grant of Stock Option and Stock Option
Agreement (Director/Officer).
99.4* Addendum to Stock Option Agreement (Change in Control).
99.5* Addendum to Stock Option Agreement (Special Tax Elections).
99.6* Addendum to Stock Option Agreement (Limited Stock Appreciation
Right).
99.7* Addendum to Stock Option Agreement (Financial Assistance).
99.8* Form of Notice of Grant of Stock Option and Stock Option
Agreement (Non-Employee Director Automatic Stock Option).
* Exhibits 99.2 through 99.8 are incorporated herein by reference to
Exhibits 99.2 through 99.8 of Registrant's Registration Statement No. 33-
65762 on Form S-8 which was filed with the SEC on July 8, 1993.
II-2
<PAGE>
Item 9. Undertakings.
-------------
A. The undersigned Registrant hereby undertakes: (1) to file,
during any period in which offers or sales are being made, a post-effective
amendment to this Registration Statement (i) to include any prospectus required
by Section 10(a)(3) of the Securities Act of 1933, as amended (the "1933 Act"),
(ii) to reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this Registration Statement
and (iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement; provided,
--------
however, that clauses (1)(i) and (1)(ii) shall not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the 1934 Act that are incorporated by reference into this
Registration Statement; (2) that for the purpose of determining any liability
under the 1933 Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof and (3) to remove from registration by means of a post-
effective amendment any of the securities being registered which remain unsold
at the termination of the Registrant's 1993 Stock Option Plan.
B. The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is
incorporated by reference into this Registration Statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the 1933
Act may be permitted to directors, officers or controlling persons of the
Registrant pursuant to the indemnification provisions summarized in Item 6
above, or otherwise, the Registrant has been informed that, in the opinion of
the SEC, such indemnification is against public policy as expressed in the 1933
Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1933 Act and
will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Cupertino, State of California, on this 17th day
of May, 1996.
MEASUREX CORPORATION
By /s/ David A. Bossen
--------------------------------
David A. Bossen
Chairman of the Board and Chief
Executive Officer
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of Measurex Corporation, a
Delaware corporation, do hereby constitute and appoint David A. Bossen and
Robert McAdams, Jr. and each of them, the lawful attorneys and agents, with full
power and authority to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, and any one of them, determine may
be necessary or advisable or required to enable said corporation to comply with
the Securities Act of 1933, as amended, and any rules or regulations or
requirements of the Securities and Exchange Commission in connection with this
Registration Statement. Without limiting the generality of the foregoing power
and authority, the powers granted include the power and authority to sign the
names of the undersigned officers and directors in the capacities indicated
below to this Registration Statement, to any and all amendments, both pre-
effective and post-effective, and supplements to this Registration Statement,
and to any and all instruments or documents filed as part of or in conjunction
with this Registration Statement or amendments or supplements thereof, and each
of the undersigned hereby ratifies and confirms all that said attorneys and
agents, or any of them, shall do or cause to be done by virtue hereof. This
Power of Attorney may be signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signatures Title Date
- ---------- ----- ----
/s/David A. Bossen Chairman of the Board and Chief May 17, 1996
- -------------------------
(David A. Bossen) Executive Officer (Principal
Executive Officer)
II-4
<PAGE>
Signatures Title Date
- ---------- ----- ----
/s/John C. Gingerich President, Chief Operating May 17, 1996
- -------------------------
(John C. Gingerich) Officer and Director
/s/ Robert McAdams, Jr. Executive Vice President and Chief May 17, 1996
- -------------------------
(Robert McAdams, Jr.) Financial Officer (Principal
Financial and Accounting Officer)
/s/ John W. Larson Director May 17, 1996
- -------------------------
(John W. Larson)
Director ______, 1996
- -------------------------
(J. W. McKittrick)
/s/ Graham Tyson Director May 17, 1996
- -------------------------
(Graham Tyson)
/s/ Paul Bancroft III Director May 17, 1996
- -------------------------
(Paul Bancroft III)
/s/ Dwight C. Baum Director May 17, 1996
- -------------------------
(Dwight C. Baum)
/s/ Orion L. Hoch Director May 17, 1996
- -------------------------
(Orion L. Hoch)
/s/ Jeffery T. Grade Director May 17, 1996
- -------------------------
(Jeffery T. Grade)
II-5
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
MEASUREX CORPORATION
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
Number Exhibit
- ------- -------
4.0 Instruments Defining Rights of Stockholders. Reference is made to
Registrant's Registration Statement No. 0-108770 on Form 8-A and
Amendment No. 1 thereto, which are incorporated herein by reference
pursuant to Item 3(c) of this Registration Statement.
5.0 Opinion and Consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Independent Auditors - Coopers & Lybrand.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in Exhibit
5.
24.0 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 1993 Stock Option Plan.
99.2* Form of Notice of Grant of Stock Option and Stock Option Agreement
(Non-Officer Employee).
99.3* Form of Notice of Grant of Stock Option and Stock Option Agreement
(Director/Officer).
99.4* Addendum to Stock Option Agreement (Change in Control).
99.5* Addendum to Stock Option Agreement (Special Tax Elections).
99.6* Addendum to Stock Option Agreement (Limited Stock Appreciation
Right).
99.7* Addendum to Stock Option Agreement (Financial Assistance).
99.8* Form of Notice of Grant of Stock Option and Stock Option Agreement
(Non-Employee Director Automatic Stock Option).
* Exhibits 99.2 through 99.8 are incorporated herein by reference to Exhibits
99.2 through 99.8 of Registrant's Registration Statement No. 33-65762 on Form
S-8 which was filed with the SEC on July 8, 1993.
<PAGE>
EXHIBIT 5.0
Opinion and Consent of Brobeck, Phleger & Harrison LLP
<PAGE>
EXHIBIT 5.0
May 20, 1996
Measurex Corporation
One Results Way
Cupertino, California 95014
Re: Measurex Corporation Registration Statement
for Offering of 2,000,000 Shares of Common
Stock
-------------------------------------------
Ladies and Gentlemen:
We refer to your registration on Form S-8 (the "Registration Statement")
under the Securities Act of 1933, as amended, of 2,000,000 shares of Common
Stock of Measurex Corporation (the "Company") authorized for issuance under the
Company's 1993 Stock Option Plan (the "Plan"). We advise you that, in our
opinion, when such shares have been issued and sold pursuant to the applicable
provisions of the Plan and in accordance with the Registration Statement, such
shares will be validly issued, fully paid and nonassessable shares of the
Company's Common Stock.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Brobeck, Phleger & Harrison LLP
BROBECK, PHLEGER & HARRISON LLP
<PAGE>
EXHIBIT 23.1
Consent of Independent Accountants - Coopers & Lybrand
<PAGE>
EXHIBIT 23.2
Consent of Brobeck, Phleger & Harrison LLP is contained in Exhibit 5
<PAGE>
EXHIBIT 24.0
Power of Attorney. Reference is made to page II-4 of this Registration
Statement.
<PAGE>
EXHIBIT 99.1
1993 Stock Option Plan
<PAGE>
MEASUREX CORPORATION
1993 STOCK OPTION PLAN
----------------------
AS AMENDED THROUGH FEBRUARY 16, 1996
ARTICLE ONE
GENERAL
-------
I. PURPOSE OF THE PLAN
A. This 1993 Stock Option Plan ("Plan") is intended to promote the
interests of Measurex Corporation, a Delaware corporation (the "Corporation"),
by providing (i) key employees (including officers) of the Corporation (or its
parent or subsidiary corporations) who are responsible for the management,
growth and financial success of the Corporation (or its parent or subsidiary
corporations), (ii) the non-employee members of the Corporation's Board of
Directors and (iii) consultants and other independent contractors who provide
valuable services to the Corporation (or its parent or subsidiary corporations)
with the opportunity to acquire a proprietary interest, or otherwise increase
their proprietary interest, in the Corporation as an incentive for them to
remain in the service of the Corporation (or its parent or subsidiary
corporations).
B. The Plan became effective immediately upon approval by the
Corporation's stockholders at the 1993 Annual Stockholders Meeting held on April
20, 1993. Such date accordingly serves as the Effective Date of the Plan.
C. This Plan shall serve as the successor to the Corporation's 1981
Stock Option Plan (the "1981 Plan"), and no further option grants or stock
issuances shall be made under the 1981 Plan from and after the Effective Date of
this Plan. All options outstanding under the 1981 Plan on such Effective Date
are hereby incorporated into this Plan and shall accordingly be treated as
outstanding options under this Plan. However, each outstanding option so
incorporated shall continue to be governed solely by the express terms and
conditions of the instrument evidencing such grant, and no provision of this
Plan shall be deemed to affect or otherwise modify the rights or obligations of
the holders of such incorporated options with respect to their acquisition of
shares of the Corporation's common stock thereunder.
D. For purposes of the various equity incentive programs in effect
under the Plan, the following definitional provisions shall be in effect:
<PAGE>
BOARD: the Corporation's Board of Directors.
COMMON STOCK: shares of the Corporation's common stock, par value
$0.01 per share.
CHANGE IN CONTROL: a change in ownership or control of the
Corporation effected through either of the following transactions:
(i) any person or related group of persons (other
than the Corporation or a person that directly or indirectly controls,
is controlled by, or is under common control with, the Corporation)
directly or indirectly acquires beneficial ownership (within the
meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as
amended) of securities possessing more than fifty percent (50%) of
the total combined voting power of the Corporation's outstanding
securities pursuant to a tender or exchange offer made directly to
the Corporation's stockholders which the Board does not recommend
such stockholders to accept; or
(ii) there is a change in the composition of the Board
over a period of thirty-six (36) consecutive months or less such that
a majority of the Board members (rounded up to the next whole number)
ceases, by reason of one or more proxy contests for the election of
Board members, to be comprised of individuals who either (A) have
been Board members continuously since the beginning of such period or
(B) have been elected or nominated for election as Board members
during such period by at least a majority of the Board members
described in clause (A) who were still in office at the time such
election or nomination was approved by the Board.
CORPORATE TRANSACTION: any of the following stockholder-approved
transactions to which the Corporation is a party:
(i) a merger or consolidation in which the
Corporation is not the surviving entity, except for a transaction the
principal purpose of which is to change the State in which the
Corporation is incorporated,
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete
liquidation or dissolution of the Corporation, or
(iii) any reverse merger in which the Corporation is
the surviving entity but in which securities possessing more than
fifty percent
2.
<PAGE>
(50%) of the total combined voting power of the Corporation's
outstanding securities are transferred to person or persons different
from those who held such securities immediately prior to such merger.
EMPLOYEE: an individual who performs services while in the employ
of the Corporation or one or more parent or subsidiary corporations, subject to
the control and direction of the employer entity not only as to the work to be
performed but also as to the manner and method of performance.
FAIR MARKET VALUE: the closing selling price per share of Common
Stock on the date in question on the New York Stock Exchange, as such price is
officially quoted in the composite tape of transactions on such exchange. If
there is no such reported price on the date in question, then the fair market
value shall be the closing selling price on such exchange on the last preceding
date for which such quotation exists.
HOSTILE TAKE-OVER: a change in ownership of the Corporation
effected through the following transaction:
(i) any person or related group of persons (other
than the Corporation or a person that directly or indirectly controls,
is controlled by, or is under common control with, the Corporation)
directly or indirectly acquires beneficial ownership (within the
meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as
amended) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Corporation's outstanding
securities pursuant to a tender or exchange offer made directly to the
Corporation's stockholders which the Board does not recommend such
stockholders to accept, and
---
(ii) more than fifty percent (50%) of the securities
so acquired in such tender or exchange offer are accepted from holders
other than the officers and directors of the Corporation subject to
the short-swing profit restrictions of Section 16 of the 1934 Act.
SERVICE: the performance of services on a periodic basis to the
Corporation (or any parent or subsidiary corporation) in the capacity of an
Employee, a non-employee member of the board of directors or an independent
consultant or advisor, except to the extent otherwise specifically provided in
the applicable stock option agreement.
TAKE-OVER PRICE: the greater of (a) the Fair Market Value per
-------
share of Common Stock on the date the option is surrendered to the Corporation
in connection with a Hostile Take-Over or (b) the highest reported price per
share of Common Stock paid by the tender offeror in effecting such Hostile
Take-Over. However, if the surrendered
3.
<PAGE>
option is an Incentive Option, the Take-Over Price shall not exceed the clause
(a) price per share.
E. The following provisions shall be applicable in determining the
parent and subsidiary corporations of the Corporation:
Any corporation (other than the Corporation) in an unbroken
chain of corporations ending with the Corporation shall be considered
to be a PARENT of the Corporation, provided each such corporation in
the unbroken chain (other than the Corporation) owns, at the time of
the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in any other
corporation in such chain.
Each corporation (other than the Corporation) in an unbroken
chain of corporations beginning with the Corporation shall be
considered to be a SUBSIDIARY of the Corporation, provided each such
corporation (other than the last corporation) in the unbroken chain
owns, at the time of the determination, stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of
stock in any other corporation in such chain.
II. STRUCTURE OF THE PLAN
A. Stock Programs. The Plan shall be divided into three separate
--------------
equity incentive programs: the Discretionary Option Grant Program specified in
Article Two, the Automatic Option Grant Program specified in Article Three, and
the Salary Investment Option Grant Program specified in Article Four. Under the
Discretionary Option Grant Program, eligible individuals may, at the discretion
of the Plan Administrator, be granted options to purchase shares of Common Stock
in accordance with the provisions of Article Two. Under the Automatic Option
Grant Program, non-employee Board members will automatically receive special
option grants at periodic intervals to purchase shares of Common Stock in
accordance with the provisions of Article Three. Under the Salary Investment
Option Grant Program, eligible individuals may elect, in accordance with the
provisions of Article Four, to have a portion of their base salary reduced each
year in return for options to purchase shares of Common Stock at an aggregate
discount from the Fair Market Value of the option shares on the grant date equal
to the salary reduction amount.
B. General Provisions. Unless the context clearly indicates
------------------
otherwise, the provisions of Articles One and Five shall apply to the
Discretionary Option Grant Program, the Automatic Option Grant Program and the
Salary Investment Option Grant Program and shall accordingly govern the
interests of all individuals under the Plan.
4.
<PAGE>
III. ADMINISTRATION OF THE PLAN
A. The Plan shall be administered by the Board until such time as
the Board determines it appropriate to implement the following administrative
structure pursuant to the applicable disinterested administration requirements
of SEC Rule 16b-3:
(i) A committee (the "Primary Committee") of two (2) or
more non-employee Board members shall be appointed by the Board to
have sole and exclusive authority to administer the Discretionary
Option Grant and Salary Investment Option Grant Programs with respect
to Board members eligible to participate in those programs. No Board
member shall be eligible to serve on the Primary Committee if such
individual has, within the twelve (12)-month period immediately
preceding the date he is to be appointed to the Primary Committee,
received an option grant or stock issuance under this Plan or any
other stock option, stock appreciation, stock bonus or other stock
plan of the Corporation (or any parent or subsidiary corporation),
other than pursuant to the Automatic Option Grant Program specified in
Article Three of this Plan or the predecessor automatic grant program
in effect under the 1981 Plan.
(ii) Administration of the Discretionary Option Grant
and Salary Investment Option Grant Programs with respect to the
officers of the Corporation who are not Board members and all other
key employees eligible to participate in those programs may, at the
Board's discretion, be vested in the Primary Committee or a secondary
committee of two or more Board members appointed by the Board, or the
Board may retain the power to administer those programs with respect
to all individuals who are not Board members. Should a secondary
committee be appointed, the membership may include Board members who
are Employees of the Corporation eligible to receive discretionary
option grants or stock issuances under this Plan or any other stock
option, stock appreciation, stock bonus or other stock plan of the
Corporation (or any parent or subsidiary corporation).
(iii) Members of the Primary Committee or any secondary
committee shall serve for such term as the Board may determine and
shall be subject to removal by the Board at any time. The Board may
also at any time terminate the functions of any secondary committee
appointed to administer the Discretionary Option Grant and Salary
Investment Option Grant Programs with respect to non-Board members and
may reassume all administrative powers and authority delegated to such
committee.
5.
<PAGE>
B. The term "Plan Administrator" as used from time to time in this
plan document shall mean the particular entity, whether the Primary Committee,
the Board or any secondary committee, which is authorized to administer the
Discretionary Option Grant and Salary Investment Option Grant Programs with
respect to one or more classes of eligible individuals, to the extent such
entity is carrying out its administrative functions under those programs with
respect to the individuals under its jurisdiction.
C. The Plan Administrator shall have full power and authority
(subject to the express provisions of the Plan) to establish such rules and
regulations as it may deem appropriate for the proper administration of the
Discretionary Option Grant and Salary Investment Option Grant Programs and to
make such determinations under, and issue such interpretations of, the
provisions of each such program and any outstanding option grants thereunder as
it may deem necessary or advisable. All decisions of the Plan Administrator
within the scope of its administrative functions under the Plan shall be final
and binding on all parties who have an interest in the Discretionary Option
Grant or Salary Investment Option Grant Program under its jurisdiction or any
outstanding option thereunder.
D. Service on the Primary Committee or the secondary committee shall
constitute service as a Board member, and members of each such committee shall
accordingly be entitled to full indemnification and reimbursement as Board
members for their service on each such committee. No member of either committee
shall be liable for any act or omission made in good faith with respect to the
Plan or any option grant under the Plan.
E. Administration of the Automatic Option Grant Program shall be
self-executing in accordance with the express terms and conditions of Article
Three, and no Plan Administrator shall exercise any discretionary functions with
respect to the option grants made pursuant to that program.
IV. ELIGIBILITY
A. The persons eligible to participate in the Discretionary Option
Grant Program under Article Two and the Salary Investment Option Grant Program
under Article Four ("Optionees") are as follows:
(i) officers and other key employees of the Corporation
(or its parent or subsidiary corporations) who render services which
contribute to the management, growth and financial success of the
Corporation (or its parent or subsidiary corporations); and
6.
<PAGE>
(ii) those consultants or other independent contractors
who provide valuable services to the Corporation (or its parent or
subsidiary corporations).
B. Non-employee Board members shall not be eligible to participate
---
in the Discretionary Option Grant or Salary Investment Option Grant Program or
in any other stock option, stock purchase, stock bonus or other stock plan of
the Corporation (or its parent or subsidiary corporations). Such non-employee
Board members shall, however, be eligible to receive automatic option grants
under Article Three.
C. The Plan Administrator shall have full authority to determine
which eligible individuals are to receive option grants, the number of shares to
be covered by each such grant, the status of the granted option as either an
incentive stock option ("Incentive Option") which satisfies the requirements of
Section 422 of the Internal Revenue Code or a non-statutory option not intended
to meet such requirements, the time or times at which each granted option is to
become exercisable and the maximum term for which the option may remain
outstanding.
V. STOCK SUBJECT TO THE PLAN
A. Shares of the Corporation's Common Stock shall be available for
issuance under the Plan and shall be drawn from either the Corporation's
authorized but unissued shares of Common Stock or from reacquired shares of
Common Stock, including shares repurchased by the Corporation on the open
market. The maximum number of shares of Common Stock which may be issued over
the term of the Plan shall not exceed 7,110,240 shares, subject to adjustment
from time to time in accordance with the provisions of this Section V. Such
authorized share reserve is comprised of (i) the number of shares which remained
available for issuance under the 1981 Plan as of the Effective Date, including
the shares subject to the outstanding options incorporated into this Plan and
any other shares which would have been available for future option grant under
the 1981 Plan (estimated to be 3,110,240 shares in the aggregate), plus (ii) an
additional increase of 2,000,000 shares of Common Stock approved by the
stockholders at the 1993 Annual Meeting, plus (ii) a further increase of
2,000,000 shares subject to the approval of the Corporation's stockholders at
the 1996 Annual Meeting. If the latter 2,000,000-share increase is approved by
the stockholders at the 1996 Annual Meeting, then the maximum number of shares
for which options may be granted on the basis of that increase shall be limited
to 1,000,000 shares in the aggregate during the twelve (12)-month period
measured from the date of the 1996 Annual Meeting.
B. To the extent one or more outstanding options under the 1981 Plan
which have been incorporated into this Plan are subsequently exercised, the
number of
7.
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shares issued with respect to each such option shall reduce, on a share-for-
share basis, the number of shares available for issuance under this Plan.
C. In no event any one individual participating in the Plan be
granted stock options and separately exercisable stock appreciation rights for
more than 400,000 shares of Common Stock per calendar year, beginning with the
1996 calendar year.
D. Should one or more outstanding options under this Plan (including
outstanding options under the 1981 Plan incorporated into this Plan) expire or
terminate for any reason prior to exercise in full), then the shares subject to
the portion of each option not so exercised shall be available for subsequent
option grant under the Plan. Shares subject to any option or portion thereof
surrendered in accordance with the stock appreciation right provisions of the
Plan and all share issuances under the Plan, whether or not the shares are
subsequently repurchased by the Corporation pursuant to its repurchase rights
under the Plan, shall reduce on a share-for-share basis the number of shares of
Common Stock available for subsequent option grants under the Plan. In addition,
should the exercise price of an outstanding option under the Plan (including any
option incorporated from the 1981 Plan) be paid with shares of Common Stock or
should shares of Common Stock otherwise issuable under the Plan be withheld by
the Corporation in satisfaction of the withholding taxes incurred in connection
with the exercise of an outstanding option under the Plan, then the number of
shares of Common Stock available for issuance under the Plan shall be reduced by
the gross number of shares for which the option is exercised, and not by the net
number of shares of Common Stock actually issued to the option holder.
E. Should any change be made to the Common Stock issuable under the
Plan by reason of any stock split, stock dividend, recapitalization, combination
of shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without the Corporation's receipt of consideration, then
appropriate adjustments shall be made to (i) the maximum number and/or class of
securities issuable under the Plan, (ii) the maximum number and/or class of
securities for which stock options and separately exercisable stock appreciation
rights may be granted to any one participant under the Plan per calendar year,
(iii) the number and/or class of securities for which automatic option grants
are to be subsequently made per non-employee Board member under the Automatic
Option Grant Program, (iv) the number and/or class of securities and price per
share in effect under each option outstanding under the Discretionary Option
Grant, Salary Investment Option Grant or Automatic Option Grant Program and (v)
the number and/or class of securities and price per share in effect under each
outstanding option incorporated into this Plan from the 1981 Plan. Such
adjustments to the outstanding options are to be effected in a manner which
shall preclude the enlargement or dilution of rights and benefits under such
options. The adjustments determined by the Plan Administrator shall be final,
binding and conclusive.
8.
<PAGE>
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
----------------------------------
I. TERMS AND CONDITIONS OF OPTIONS
Options granted pursuant to the Discretionary Option Grant Program
shall be authorized by action of the Plan Administrator and may, at the Plan
Administrator's discretion, be either Incentive Options or non-statutory
options. Individuals who are not Employees of the Corporation may only be
granted non-statutory options. Each granted option shall be evidenced by one or
more instruments in the form approved by the Plan Administrator; provided,
--------
however, that each such instrument shall comply with the terms and conditions
specified below. Each instrument evidencing an Incentive Option shall, in
addition, be subject to the applicable provisions of Section II of this Article
Two.
A. Option Price.
------------
1. The option price per share under this Article Two shall be
fixed by the Plan Administrator, but in no event shall the option price per
share be less than one hundred percent (100%) of the Fair Market Value per share
of Common Stock on the grant date.
2. The option price shall become immediately due upon exercise
of the option and shall be payable in one of the alternative forms specified
below:
(i) payment in cash or check made payable to the
Corporation's order;
(ii) payment in shares of Common Stock held for the
requisite period necessary to avoid a charge to the Corporation's
earnings for financial reporting purposes and valued at Fair Market
Value on the Exercise Date (as such term is defined below);
(iii) payment in a combination of shares of Common
Stock held for the requisite period necessary to avoid a charge to the
Corporation's reported earnings and valued at Fair Market Value on the
Exercise Date and cash or check payable to the Corporation's order; or
(iv) payment through a broker-dealer sale and
remittance procedure pursuant to which the Optionee (I) shall provide
irrevocable written instructions to a Corporation-designated brokerage
firm
9.
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to effect the immediate sale of the purchased shares and remit to the
Corporation, out of the sale proceeds available on the settlement
date, sufficient funds to cover the aggregate option price payable for
the purchased shares plus all applicable Federal and State income and
employment taxes required to be withheld by the Corporation in
connection with such purchase and (II) shall provide written
directives to the Corporation to deliver the certificates for the
purchased shares directly to such brokerage firm in order to complete
the sale transaction.
For purposes of this subparagraph 2, the Exercise Date shall be the
date on which written notice of the option exercise is delivered to the
Corporation. Except to the extent the sale and remittance procedure is utilized
in connection with the exercise of the option, payment of the option price for
the purchased shares must accompany such notice.
B. Term and Exercise of Options.
----------------------------
Each option granted under this Article Two shall be exercisable at
such time or times, during such period, and for such number of shares as shall
be determined by the Plan Administrator and set forth in the instrument
evidencing such option. No granted option shall, however, have a maximum term in
excess of ten (10) years. During the lifetime of the Optionee, the option,
together with any stock appreciation rights pertaining to such option, shall be
exercisable only by the Optionee and shall not be assignable or transferable
other than by transfer of the option effected by will or by the laws of descent
and distribution following the Optionee's death.
C. Termination of Service.
----------------------
1. In the event the Optionee should cease Service while holding one
or more options under this Article Two, then each such option shall not remain
exercisable beyond the limited post-Service exercise period specified by the
Plan Administrator in the instrument evidencing the grant, unless the Plan
Administrator otherwise extends such period in accordance with subparagraph C.5
below.
2. During the post-Service exercise period, the option may not be
exercised for more than the number of option shares (if any) in which the
Optionee is vested at the time of cessation of Service. Upon the expiration of
such post-Service exercise period or (if earlier) upon the expiration of the
option term, the option shall terminate and cease to be outstanding for any
vested shares for which the option has not been exercised. However, each option
shall immediately terminate and cease to be outstanding, at the time of the
Optionee's cessation of Service, with respect to any option shares for which
such option is not otherwise at that time exercisable or in which the Optionee
is not otherwise at that time vested.
10.
<PAGE>
3. Should the Optionee die while holding one or more outstanding
options under this Article Two, then each such option may be exercised, subject
to the limitations of subparagraph 2 above, by the personal representative of
the Optionee's estate or by the person or persons to whom the option is
transferred pursuant to the Optionee's will or the laws of descent and
distribution.
4. Should (i) the Optionee's Service be terminated for misconduct
(including, but not limited to, any act of dishonesty, willful misconduct, fraud
or embezzlement) or (ii) the Optionee make any unauthorized use or disclosure of
confidential information or trade secrets of the Corporation or its parent or
subsidiaries, then in any such event all outstanding options held by the
Optionee under this Article Two shall terminate immediately and cease to be
outstanding.
5. The Plan Administrator shall have full power and authority to
extend the period of time for which the option is to remain exercisable
following the Optionee's cessation of Service or death from the limited period
specified in the instrument evidencing such grant to such greater period of time
as the Plan Administrator shall deem appropriate under the circumstances. In no
event, however, shall such option be exercisable after the specified expiration
date of the option term.
6. The Plan Administrator shall have complete discretion,
exercisable either at the time the option is granted or at any time the option
remains outstanding, to permit one or more options granted under this Article
Two to be exercised not only for the number of shares for which each such option
is exercisable at the time of the Optionee's cessation of Service but also for
one or more subsequent installments of purchasable shares for which the option
would otherwise have become exercisable had such cessation of Service not
occurred.
D. Stockholder Rights.
------------------
An Optionee shall have none of the rights of a stockholder with
respect to any option shares until such individual shall have exercised the
option and paid the option price for the purchased shares.
E. Repurchase Rights.
-----------------
The shares of Common Stock acquired under this Article Two may be
subject to repurchase by the Corporation in accordance with the following
provisions:
1. The Plan Administrator shall have the discretion to grant
options for unvested shares of Common Stock under this Article Two. Should the
Optionee cease
11.
<PAGE>
Service while holding any unvested shares purchased under such options, then the
Corporation shall have the right to repurchase any or all of those unvested
shares at the option price paid per share. The terms and conditions upon which
such repurchase right shall be exercisable (including the period and procedure
for exercise and the appropriate vesting schedule for the purchased shares)
shall be established by the Plan Administrator and set forth in the instrument
evidencing such repurchase right.
2. All of the Corporation's outstanding repurchase rights under this
Article Two shall automatically terminate, and all shares subject to such
terminated rights shall immediately vest in full, upon the occurrence of any
Corporate Transaction, except to the extent: (i) any such repurchase right is
expressly assigned to the successor corporation (or parent thereof) in
connection with the Corporate Transaction or (ii) such accelerated vesting is
precluded by other limitations imposed by the Plan Administrator at the time the
repurchase right is issued.
3. The Plan Administrator shall have the discretionary authority,
exercisable either before or after the Optionee's cessation of Service, to
cancel the Corporation's outstanding repurchase rights with respect to one or
more shares purchased or purchasable by the Optionee under this Article Two and
thereby accelerate the vesting of such shares in whole or in part at any time.
II. INCENTIVE OPTIONS
The terms and conditions specified below shall be applicable to all
Incentive Options granted under this Article Two. Incentive Options may only be
granted to individuals who are Employees of the Corporation. Options which are
specifically designated as "non-statutory" options when issued under the Plan
shall not be subject to such terms and conditions.
---
A. Dollar Limitation. The aggregate fair market value (determined
-----------------
as of the respective date or dates of grant) of the Common Stock for which one
or more options granted to any Employee after December 31, 1986 under this Plan
(or any other option plan of the Corporation or its parent or subsidiary
corporations) may for the first time become exercisable as incentive stock
options under the Federal tax laws during any one calendar year shall not exceed
the sum of One Hundred Thousand Dollars ($100,000). To the extent the Employee
holds two (2) or more such options which become exercisable for the first time
in the same calendar year, the foregoing limitation on the exercisability of
such options as incentive stock options under the Federal tax laws shall be
applied on the basis of the order in which such options are granted. Should the
number of shares of Common Stock for which any Incentive Option first becomes
exercisable in any calendar year exceed the applicable One Hundred Thousand
Dollar ($100,000) limitation, then the option may
12.
<PAGE>
nevertheless be exercised in that calendar year for the excess number of shares
as a non-statutory option under the Federal tax laws.
B. 10% Stockholder. If any individual to whom an Incentive Option
---------------
is granted is the owner of stock (as determined under Section 424(d) of the
Internal Revenue Code) possessing ten percent (10%) or more of the total
combined voting power of all classes of stock of the Corporation or any one of
its parent or subsidiary corporations, then the option price per share shall not
be less than one hundred and ten percent (110%) of the fair market value per
share of Common Stock on the grant date, and the option term shall not exceed
five (5) years, measured from the grant date.
Except as modified by the preceding provisions of this Section II, the
provisions of Articles One, Two and Five of the Plan shall apply to all
Incentive Options granted hereunder.
III. CORPORATE TRANSACTIONS/CHANGES IN CONTROL
A. Each option which is outstanding under this Article Two at the
time of a Corporate Transaction shall automatically accelerate so that each such
option shall, immediately prior to the specified effective date for such
Corporate Transaction, become fully exercisable with respect to the total number
of shares of Common Stock at the time subject to such option and may be
exercised for all or any portion of such shares. However, an outstanding option
under this Article Two shall not so accelerate if and to the extent: (i) such
option is, in connection with the Corporate Transaction, either to be assumed by
the successor corporation or parent thereof or to be replaced with a comparable
option to purchase shares of the capital stock of the successor corporation or
parent thereof, (ii) such option is to be replaced with a cash incentive program
of the successor corporation which preserves the option spread existing at the
time of the Corporate Transaction and provides for subsequent payout in
accordance with the same vesting schedule applicable to such option, or (iii)
the acceleration of such option is subject to other limitations imposed by the
Plan Administrator at the time of the option grant. The determination of option
comparability under clause (i) above shall be made by the Plan Administrator,
and its determination shall be final, binding and conclusive. The Plan
Administrator shall also have full power and authority to grant options under
the Plan which are to automatically accelerate in whole or in part immediately
prior to the Corporate Transaction or upon the subsequent termination of the
Optionee's Service, whether or not those options are otherwise to be assumed or
replaced in connection with the consummation of such Corporate Transaction.
B. Upon the consummation of the Corporate Transaction, all
outstanding options under this Article Two shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation or its
parent company.
13.
<PAGE>
C. Each outstanding option under this Article Two which is assumed
in connection with the Corporate Transaction or is otherwise to continue in
effect shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply and pertain to the number and class of securities which
would have been issued to the option holder, in consummation of such Corporate
Transaction, had such person exercised the option immediately prior to such
Corporate Transaction. Appropriate adjustments shall also be made to the option
price payable per share, provided the aggregate option price payable for such
--------
securities shall remain the same. In addition, the class and number of
securities available for issuance under the Plan following the consummation of
the Corporate Transaction shall be appropriately adjusted.
D. The grant of options under this Article Two shall in no way
affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.
E. The Plan Administrator shall have the discretionary authority,
exercisable either in advance of any actually-anticipated Change in Control or
at the time of an actual Change in Control, to provide for the automatic
acceleration of one or more outstanding options under this Article Two (and the
termination of one or more of the Corporation's outstanding repurchase rights
under this Article Two) upon the occurrence of the Change in Control. The Plan
Administrator shall also have full power and authority to condition any such
option acceleration (and the termination of any outstanding repurchase rights)
upon the subsequent termination of the Optionee's Service within a specified
period following the Change in Control.
F. Any options accelerated in connection with the Change in Control
shall remain fully exercisable until the expiration or sooner termination of the
option term or the surrender of such option in accordance with Section V of this
Article Two.
G. The exercisability as incentive stock options under the Federal
tax laws of any options accelerated under this Section III in connection with a
Corporate Transaction or Change in Control shall remain subject to the dollar
limitation of Section II of this Article Two.
IV. STOCK APPRECIATION RIGHTS
A. One or more Optionees may be granted the right, exercisable upon
such terms and conditions as the Plan Administrator may establish, to surrender
all or part of an unexercised option under this Article Two in exchange for a
distribution from the Corporation in an amount equal to the excess of (i) the
Fair Market Value (on the option surrender date) of the number of shares in
which the Optionee is at the time vested under
14.
<PAGE>
the surrendered option (or surrendered portion thereof) over (ii) the aggregate
option price payable for such vested shares.
B. No such option surrender shall be effective unless it is approved
by the Plan Administrator. If the surrender is so approved, then the
distribution to which the Optionee shall accordingly become entitled under this
Section V may be made in shares of Common Stock valued at Fair Market Value on
the option surrender date, in cash, or partly in shares and partly in cash, as
the Plan Administrator shall in its sole discretion deem appropriate.
C. If the surrender of an option is rejected by the Plan
Administrator, then the Optionee shall retain whatever rights the Optionee had
under the surrendered option (or surrendered portion thereof) on the option
surrender date and may exercise such rights at any time prior to the later of
-----
(i) five (5) business days after the receipt of the rejection notice or (ii) the
last day on which the option is otherwise exercisable in accordance with the
terms of the instrument evidencing such option, but in no event may such rights
be exercised more than ten (10) years after the date of the option grant.
D. One or more officers of the Corporation subject to the short-
swing profit restrictions of the Federal securities laws may, in the Plan
Administrator's sole discretion, be granted limited stock appreciation rights in
tandem with their outstanding options under this Discretionary Option Grant
Program. Upon the occurrence of a Hostile Take-Over, each such officer holding
one or more options with such a limited stock appreciation right in effect for
at least six (6) months shall have the unconditional right (exercisable for a
thirty (30)-day period following such Hostile Take-Over) to surrender each such
option to the Corporation, to the extent the option is at the time exercisable
for vested shares of Common Stock. In return for the surrendered option, the
officer shall be entitled to a cash distribution from the Corporation in an
amount equal to the excess of (i) the Take-Over Price of the shares of Common
Stock which are at the time vested under each surrendered option (or surrendered
portion) over (ii) the aggregate exercise price payable for such vested shares.
Such cash distribution shall be paid within five (5) days following the option
surrender date. Neither the approval of the Plan Administrator nor the consent
of the Board shall be required in connection with such option surrender and cash
distribution. The balance of the option (if any) shall continue in full force
and effect in accordance with the instrument evidencing such grant.
15.
<PAGE>
ARTICLE THREE
AUTOMATIC OPTION GRANT PROGRAM
------------------------------
I. ELIGIBILITY
A. Eligible Optionees. The individuals eligible to receive
------------------
automatic option grants pursuant to the provisions of this Article Three program
shall be limited to (i) those individuals who are first elected or appointed as
non-employee Board members on or after the Effective Date of this Plan, whether
through appointment by the Board or election by the Corporation's stockholders,
provided they have not otherwise been in the prior employ of the Corporation (or
any parent or subsidiary corporation), and (ii) those individuals who continue
to serve as non-employee Board members at one or more Annual Stockholder
Meetings held while this Automatic Grant Program remains in effect, including
the 1993 Annual Meeting coincident with the Effective Date.
B. Limitation. Except for the option grants to be made pursuant to
----------
the provisions of this Automatic Option Grant Program (and any automatic grants
made under the predecessor program in effect under the 1981 Plan), non-employee
Board members shall not be eligible to receive any additional option grants or
---
stock issuances under this Plan or any other stock plan of the Corporation (or
its parent or subsidiaries).
II. TERMS AND CONDITIONS OF AUTOMATIC OPTION GRANTS
A. Grant Dates. Option grants will be made under this Article Three
-----------
on the dates specified below:
(i) Each individual who first becomes a non-employee
Board member on or after the Effective Date of this Plan, whether
through election by the stockholders or appointment by the Board,
shall automatically be granted, at the time of such initial election
or appointment, a non-statutory stock option to purchase 16,000
shares of Common Stock upon the terms and conditions of this Article
Three.
(ii) Each individual who continues to serve as a non-
employee Board member at one or more Annual Stockholder Meetings held
while this Automatic Grant Program remains in effect, including the
1993 Annual Meeting, shall automatically be granted at each such
meeting, whether or not he is standing for re-election at that
meeting, a non-statutory stock option to purchase an additional 4,000
shares of Common Stock upon the terms and conditions of this Article
Three, provided he has served as a non-
16.
<PAGE>
employee Board member for at least six (6) months prior to that time.
There shall be no limit on the number of 4,000-share option grants
any one non-employee Board member may receive over the period of
Board service.
The 16,000-share and 4,000-share limitation on the automatic grants to
be made to each newly-elected or continuing non-employee Board member shall be
subject to periodic adjustment pursuant to the applicable provisions of Section
V.C of Article One.
B. Option Price. The option price per share of each automatic
------------
option grant made under this Article Three shall be equal to one hundred percent
(100%) of the Fair Market Value per share of Common Stock on the automatic grant
date.
C. Payment. The option price shall become immediately due upon
-------
exercise of the option and shall be payable in one of the alternative forms
specified in Section I.A.2 of Article Two.
D. Option Term. Each automatic grant under this Article Three shall
-----------
have a maximum term of ten (10) years measured from the automatic grant date.
E. Exercisability. Each automatic grant shall become exercisable in
--------------
a series of four (4) equal and successive annual installments over the
Optionee's period of service on the Board, with the first such installment to
become exercisable one (1) year after the automatic grant date. The option shall
not become exercisable for any additional option shares following the Optionee's
cessation of Board service for any reason.
F. Non-Transferability. During the lifetime of the non-employee
-------------------
Board member, each automatic option grant, together with the limited stock
appreciation right pertaining to such option, shall be exercisable only by that
individual and shall not be assignable or transferable other than by transfer of
the option by will or by the laws of descent and distribution following the
Optionee's death.
G. Effect of Termination of Board Membership.
-----------------------------------------
1. Should the Optionee cease to serve as a Board member for any
reason (other than death) while holding one or more automatic option grants
under this Article Three, then such Optionee shall have a six (6)-month period
following the date of such cessation of Board service in which to exercise each
such option for any or all of the shares of Common Stock for which the option is
exercisable at the time of such cessation of Board service. However, each such
option shall immediately terminate and cease to be outstanding, at the time of
such cessation of Board service, with respect to any shares for which the option
is not otherwise at that time exercisable.
17.
<PAGE>
2. Should the Optionee die while serving as a member of the
Board or within six (6) months after cessation of Board service, then each
outstanding automatic option grant held by the Optionee at the time of death may
subsequently be exercised, for any or all of the shares of Common Stock for
which the option is exercisable at the time of the Optionee's cessation of Board
service (less any option shares subsequently purchased by the Optionee prior to
death), by the personal representative of the Optionee's estate or by the person
or persons to whom the option is transferred pursuant to the Optionee's will or
in accordance with the laws of descent and distribution. Any such exercise must
occur within twelve (12) months after the date of the Optionee's death. However,
each such automatic option grant shall immediately terminate and cease to be
outstanding, at the time of the Optionee's cessation of Board service, with
respect to any option shares for which it is not otherwise at such time
exercisable.
3. In no event shall any automatic grant under this Article
Three remain exercisable after the specified expiration date of the ten (10)-
year option term. Upon the expiration of the applicable exercise period under
subparagraph 1 or 2 above or (if earlier) upon the expiration of the ten (10)-
year option term, the automatic grant shall terminate and cease to be
outstanding for all shares for which such option was exercisable at the time of
the Optionee's cessation of Board service but for which that option was not
subsequently exercised.
H. Stockholder Rights. The holder of an automatic option grant
------------------
under this Article Three shall have none of the rights of a stockholder with
respect to any shares subject to such option until such individual shall have
exercised the option and paid the exercise price for the purchased shares.
I. Remaining Terms. The remaining terms and conditions of each
---------------
automatic option grant shall be as set forth in the prototype Non-statutory
Stock Option Agreement attached as Exhibit A to the Plan.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. Each automatic option grant outstanding at the time of a
Corporate Transaction shall automatically accelerate so that each such option
shall, immediately prior to the specified effective date for such Corporate
Transaction, become fully exercisable with respect to the total number of shares
of Common Stock at the time subject to such option and may be exercised for all
or any portion of such shares. Upon the consummation of the Corporate
Transaction, all automatic option grants under this Article Three shall
terminate and cease to be outstanding.
18.
<PAGE>
B. Each automatic option grant outstanding at the time of a Change
in Control shall automatically accelerate so that each such option shall,
immediately prior to the specified effective date for such Change in Control,
become fully exercisable with respect to the total number of shares of Common
Stock at the time subject to such option and may be exercised for all or any
portion of such shares at any time prior to the expiration or sooner termination
of the option term.
C. Upon the occurrence of a Hostile Take-Over, each non-employee
Board member holding an automatic option grant which has been outstanding under
this Article Three for a period of at least six (6) months shall have the
unconditional right (exercisable for a thirty (30)-day period following such
Hostile Take-Over) to surrender such option in return for a cash distribution
from the Corporation in an amount equal to the excess of (i) the Take-Over Price
of the shares of Common Stock at the time subject to the surrendered option
(whether or not the option is otherwise at the time exercisable for such shares)
over (ii) the aggregate exercise price payable for such shares. Such cash
distribution shall be paid within five (5) days following the option surrender
date. Neither the approval of the Plan Administrator nor the consent of the
Board shall be required in connection with such option surrender and cash
distribution.
D. The automatic option grants outstanding under this Article Three
shall in no way affect the right of the Corporation to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
IV. AMENDMENT OF THE AUTOMATIC GRANT PROVISIONS
A. Limited Amendments. The provisions of this Automatic Option
------------------
Grant Program, together with the automatic option grants outstanding under this
Article Three, may not be amended at intervals more frequently than once every
six (6) months, other than to the extent necessary to comply with applicable
Federal income tax laws and regulations.
19.
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ARTICLE FOUR
SALARY INVESTMENT OPTION GRANT PROGRAM
--------------------------------------
I. ELIGIBILITY
The Primary Committee shall have plenary authority to select, prior to
the start of each calendar year, the particular key employees who will be
eligible for participation in the Salary Investment Option Grant Program for
that calendar year. In order to become an actual participant for a particular
calendar year, each selected individual must, prior to the start of that
calendar year, file with the Primary Committee (or its designate) an irrevocable
authorization pursuant to which the Corporation is to reduce his base salary for
that calendar year by a designated multiple of five percent (5%).
The Primary Committee shall review the filed authorizations and
determine whether to approve, in whole or in part, one or more of those
authorizations. To the extent the Primary Committee approves one or more such
authorizations, the participants who filed those authorizations shall be granted
options under this Article Four option program. To the extent one or more
authorizations are not approved by the Primary Committee, those authorizations
shall have no force or effect and no discounted options shall be granted with
respect to the unapproved salary reductions.
To the extent options are granted under the Salary Investment Option
Grant Program, such options shall be non-statutory options evidenced by
instruments in such form as the Primary Committee shall from time to time
approve; provided, however, that each such instrument shall comply with and
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incorporate the terms and conditions specified below.
II. TERMS AND CONDITIONS OF OPTION
A. Option Price.
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1. The option price per share shall be thirty-three and one-
third percent (33-1/3%) of the Fair Market Value per share of Common Stock on
the grant date.
2. The option price shall become immediately due upon exercise
of the option and shall be payable in one of the alternative forms specified in
Section I.A.2 of Article Two.
20.
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B. Number of Option Shares.
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1. The number of shares of Common Stock for which each grant
under this Article Four is to be made to a selected Optionee shall be determined
pursuant to the following formula:
X = A / (B x 66-2/3%)
where X is the number of option shares,
A is the dollar amount of the approved reduction in the
Optionee's base salary for the calendar year, and
B is the Fair Market Value per share of Common Stock on the date
of the grant.
C. Term and Exercise of Options.
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1. Each option shall have a maximum term of ten (10) years
measured from the grant date. Provided the Optionee continues in Service, the
option shall become exercisable for (A) fifty percent (50%) of the option shares
on last day of June next following the grant date and (B) for the balance of the
option shares in a series of six (6) successive equal monthly installments on
the last day of each of the next six (6) calendar months.
2. During the Optionee's lifetime, the option, shall be
exercisable only by the Optionee and shall not be assignable or transferable
other than by transfer of the option by will or by the laws of descent and
distribution following the Optionee's death.
D. Effect of Termination of Service.
--------------------------------
1. Should an Optionee cease Service for any reason after one or
more of his outstanding options under this Article Four have become exercisable
in whole or in part, then each such option shall remain exercisable, for any or
all of the shares for which the option is exercisable on the date of such
cessation of Service, until the expiration of the ten (10)-year option term or
its sooner termination under Section F.1 of this Article Four. Following the
Optionee's death, each such option may be exercised, for any or all of the
shares for which the option is exercisable at the time of the Optionee's death,
by the personal representative of the Optionee's estate or by the person or
persons to whom the option is transferred pursuant to the Optionee's will or in
accordance with the laws of descent and distribution, but any such exercise must
be effected prior to the expiration or sooner termination of the option term.
21.
<PAGE>
2. Should the Optionee die before one or more of his
outstanding options under this Article Four become exercisable for any of the
option shares, then the personal representative of the Optionee's estate or the
person or persons to whom such options are transferred pursuant to the
Optionee's will or in accordance with the laws of descent and distribution shall
nevertheless have the right to exercise each such option for up to that number
of option shares equal to (A) one-twelfth (1/12) of the total number of option
shares multiplied by (B) the number of full calendar months which will have
elapsed between the first day of the calendar year for which the option is
granted and the last day of the calendar month during which the Optionee ceases
Service. Such exercise must occur prior to the specified expiration date of the
option term or (if earlier) the first anniversary of the date of the Optionee's
death. Upon the occurrence of the earlier event, the option shall terminate and
cease to be exercisable. Each such option shall, with respect to the balance of
the option shares for which it is not exercisable at the time of the Optionee's
cessation of Service, terminate immediately upon such cessation of Service and
shall cease to be outstanding with respect to those option shares.
3. Should the Optionee become permanently disabled (as
determined in accordance with Section 22(e) of the Internal Revenue Code) and
cease by reason thereof to remain in Service before one or more of his
outstanding options under this Article Four become exercisable for any of the
option shares, then the Optionee shall nevertheless have the right to exercise
each such option for up to that number of option shares equal to (A) one-twelfth
(1/12) of the total number of option shares multiplied by (B) the number of full
calendar months which will have elapsed between the first day of the calendar
year for which the option is granted and the last day of the calendar month
during which the Optionee ceases Service. Each such exercise must, however, be
effected prior to the expiration of the ten (10)-year option term or its sooner
termination under Section F.1 of this Article Four. The option shall, with
respect to the balance of the option shares for which it is not exercisable at
the time of the Optionee's cessation of Service, terminate immediately upon such
cessation of Service and shall cease to be outstanding with respect to those
option shares.
4. Except to the limited extent specifically provided in
subparagraphs 2 and 3 above, should the Optionee cease for any reason to remain
in Service before one or more of his outstanding options under this Article Four
become exercisable for any of the option shares, then each such non-exercisable
option shall immediately terminate upon such cessation of Service and cease to
be outstanding.
E. Stockholder Rights. The Optionee shall have none of the rights
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of a stockholder with respect to any option shares until such individual shall
have exercised the option and paid the option price for those shares.
22.
<PAGE>
F. Corporate Transaction/Change in Control.
---------------------------------------
1. Should any Corporate Transaction occur while the Optionee
remains in Service, then each outstanding option held by such Optionee under
this Article Four shall become exercisable, immediately prior to the specified
effective date of such Corporate Transaction, for all of the shares at the time
subject to such option and may be exercised for any or all of such shares. Upon
the consummation of the Corporate Transaction, each such option shall terminate
unless assumed by the successor corporation or parent thereof.
2. Should a Change in Control occur while the Optionee is still
in Service, then each outstanding option held by such Optionee under this
Article Four shall, immediately prior to the effective date of such Change in
Control, become exercisable with respect to the total number of shares of Common
Stock at the time subject to such option and may be exercised for all or any
portion of such shares at any time prior to the expiration or sooner termination
of the option term.
3. The grant of options under this Article Four shall in no way
affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.
23.
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ARTICLE FIVE
MISCELLANEOUS
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I. AMENDMENT OF THE PLAN AND AWARDS
A. The Board has complete and exclusive power and authority to amend
or modify the Plan (or any equity incentive program hereunder) in any or all
respects whatsoever. However, (i) no such amendment or modification shall
adversely affect rights and obligations with respect to options at the time
outstanding under the Plan, unless the Optionee consents to such amendment, and
(ii) any amendment made to the Automatic Option Grant Program (or any options
outstanding thereunder) shall be in compliance with the limitation of Section IV
of Article Three. In addition, the Board may not, without the approval of the
Corporation's stockholders, amend the Plan to (i) materially increase the
maximum number of shares issuable under the Plan, the maximum number of shares
for which any one individual participating in the Plan may be granted stock
options and separately exercisable stock appreciation rights in the aggregate
per calendar year, or the number of shares for which options may be granted to
newly-elected or continuing non-employee Board members under Article Three of
the Plan, except for permissible adjustments under Section V.C. of Article One,
(ii) materially modify the eligibility requirements for plan participation or
(iii) materially increase the benefits accruing to Optionees.
B. Options to purchase shares of Common Stock may be granted under
the Discretionary Option Grant and the Salary Investment Option Grant Programs
which are in excess of the number of shares then available for issuance under
the Plan, provided any excess shares actually issued under the Discretionary
Option Grant or the Salary Investment Option Grant Program are held in escrow
until stockholder approval is obtained for a sufficient increase in the number
of shares available for issuance under the Plan. If such stockholder approval is
not obtained within twelve (12) months after the date the first such excess
option grants or excess share issuances are made, then (I) any unexercised
excess options shall terminate and cease to be exercisable and (II) the
Corporation shall promptly refund the purchase price paid for any excess shares
actually issued under the Plan and held in escrow, together with interest (at
the applicable Short Term Federal Rate) for the period the shares were held in
escrow.
II. TAX WITHHOLDING
A. The Corporation's obligation to deliver shares of Common Stock
upon the exercise of stock options or the vesting of shares acquired upon
exercise of such options under the Plan shall be subject to the satisfaction of
all applicable Federal, State and local income tax and employment tax
withholding requirements.
24.
<PAGE>
B. The Plan Administrator may, in its discretion and in accordance
with the provisions of this Section III and such supplemental rules as the Plan
Administrator may from time to time adopt (including the applicable safe-harbor
provisions of SEC Rule 16b-3), provide any or all holders of non-statutory
options (other than the automatic grants made pursuant to Article Three of the
Plan) or unvested shares under the Plan with the right to use shares of Common
Stock in satisfaction of all or part of the Federal, State and local income tax
and employment tax liabilities incurred by such holders in connection with the
exercise of their options or the vesting of their shares (the "Taxes"). Such
right may be provided to any such holder in either or both of the following
formats:
(i) Stock Withholding: The holder of the non-statutory
-----------------
option or unvested shares may be provided with the election to have the
Corporation withhold, from the shares of Common Stock otherwise
issuable upon the exercise of such non-statutory option or the vesting
of such shares, a portion of those shares with an aggregate Fair Market
equal to the percentage of the applicable Taxes (up to one hundred
(100%)) specified by such holder.
(ii) Stock Delivery: The Plan Administrator may, in
--------------
its discretion, provide the holder of the non-statutory option or the
unvested shares with the election to deliver to the Corporation, at
the time the non-statutory option is exercised or the shares vest, one
or more shares of Common Stock already held by such individual with an
aggregate Fair Market Value equal to the percentage (up to one hundred
percent (100%) as specified by such individual) of the Taxes incurred
in connection with such option exercise or share vesting.
III. EFFECTIVE DATE AND TERM OF PLAN
A. The Plan became effective immediately upon approval by the
Corporation's stockholders at the 1993 Annual Meeting and serves as the
successor to the 1981 Plan. No further option grants or stock issuances shall be
made under the 1981 Plan from and after the date of 1993 Annual Meeting.
B. Each option issued and outstanding under the 1981 Plan
immediately prior to the Effective Date of this Plan has been incorporated into
this Plan and is treated as an outstanding option under this Plan, but each such
option shall continue to be governed solely by the terms and conditions of the
instrument evidencing such grant, and nothing in this Plan shall be deemed to
affect or otherwise modify the rights or obligations of the holders of such
options with respect to their acquisition of shares of Common Stock thereunder.
25.
<PAGE>
C. One or more provisions or features of this Plan may, in the Plan
Administrator's discretion, be extended to one or more stock options outstanding
under the 1981 Plan on the Effective Date and incorporated into this Plan.
D. The Plan shall terminate upon the earlier of (i) December 31,
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2002 or (ii) the date on which all shares available for issuance under the Plan
shall have been issued or cancelled pursuant to the exercise of options or stock
appreciation rights granted under the Plan. If the date of termination is
determined under clause (i) above, then all option grants and unvested stock
issuances outstanding on such date shall thereafter continue to have force and
effect in accordance with the provisions of the instruments evidencing such
grants or issuances.
E. In February 1996, the Board approved an amendment to the Plan to
(i) eliminate the discretion of the Plan Administrator to grant options under
the Discretionary Option Grant Program with an exercise price per share less
than 100% of the Fair Market Value per share of Common Stock on the grant date,
(ii) eliminate the loan provisions of the Plan pursuant to which one or more
Optionees would otherwise have the opportunity to finance the exercise of their
outstanding options through the delivery of full-recourse promissory notes and
(iii) increase the number of shares of Common Stock available for issuance under
the Plan by an additional 2,000,000 shares, with not more than 1,000,000 shares
of that increase to be made the subject of option grants under the Plan during
the twelve (12)-month period measured from the date of the 1996 Annual
Stockholders Meeting. The 2,000,000-share increase is subject to stockholder
approval at the 1996 Annual Stockholders Meeting, and no options granted on the
basis of that increase shall become exercisable in whole or in part, unless and
until such stockholder approval is obtained. If such stockholder approval is not
obtained at the 1996 Annual Meeting, then all options granted on the basis of
such increase shall terminate and cease to be outstanding, and no further
options shall be granted in reliance upon such increase.
IV. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares
pursuant to option grants under the Plan shall be used for general corporate
purposes.
V. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any option under
the Plan, and the issuance of Common Stock upon the exercise or surrender of the
option grants made hereunder shall be subject to the Corporation's procurement
of all approvals and permits required by regulatory authorities having
jurisdiction over the Plan, the options granted under it, and the Common Stock
issued pursuant to it.
26.
<PAGE>
B. No shares of Common Stock or other assets shall be issued or
delivered under this Plan unless and until there shall have been compliance with
all applicable requirements of Federal and State securities laws, including the
filing and effectiveness of the Form S-8 registration statement for the shares
of Common Stock issuable under the Plan, and all applicable listing requirements
of any securities exchange on which the common stock is then listed.
VI. NO EMPLOYMENT/SERVICE RIGHTS
Neither the action of the Corporation in establishing the Plan, nor
any action taken by the Plan Administrator hereunder, nor any provision of the
Plan shall be construed so as to grant any individual the right to remain in the
employ or service of the Corporation (or any parent or subsidiary corporation)
for any period of specific duration, and the Corporation (or any parent or
subsidiary corporation retaining the services of such individual) may terminate
such individual's employment or service at any time and for any reason, with or
without cause.
VII. MISCELLANEOUS PROVISIONS
A. The right to acquire Common Stock or other assets under the Plan
may not be assigned, encumbered or otherwise transferred by any Optionee, except
as specifically provided in the Plan.
B. The provisions of the Plan relating to the exercise of options
and the vesting of shares shall be governed by the laws of the State of
California, as such laws are applied to contracts entered into and performed in
such State.
C. The provisions of the Plan shall inure to the benefit of, and be
binding upon, the Corporation and its successors or assigns, whether by
Corporate Transaction or otherwise, and the Optionees, the legal representatives
of their respective estates, their respective heirs or legatees and their
permitted assignees.
27.
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EXHIBIT A
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NON-STATUTORY STOCK OPTION AGREEMENT
AUTOMATIC OPTION GRANT PROGRAM
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28.
