<PAGE>
As filed with the Securities and Exchange Commission on February 25, 2000
Registration No. 333-
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
EXAR CORPORATION
(Exact name of registrant as specified in its charter)
------------------
DELAWARE 941741981
(State of Incorporation) (I.R.S. Employer Identification No.)
48720 KATO ROAD
FREMONT, CALIFORNIA 94538-1167
(Address of principal executive offices)
------------------
1997 EQUITY INCENTIVE PLAN
(Full title of the plan)
RONALD W. GUIRE
EXAR CORPORATION
48720 KATO ROAD
FREMONT, CALIFORNIA 94538-1167
(510) 668-7117
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
------------------
Copies to:
ROBERT L. JONES, ESQ.
MATTHEW W. SONSINI, ESQ.
COOLEY GODWARD LLP
FIVE PALO ALTO SQUARE
3000 EL CAMINO REAL
PALO ALTO, CALIFORNIA 94306-2155
(650) 843-5000
------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PRICE PER SHARE (1) OFFERING PRICE (1) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stock Options and Common
Stock (par value $.0001) 450,000 shares $49.625 $22,331,250 $5,895.45
==================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(c) of the Securities Act of
1933, as amended. The price per share and aggregate offering price
of the 450,000 shares under the 1997 Equity Incentive Plan are based
upon the average of the high and low prices of Registrant's Common
Stock on February 22, 2000 as reported on the Nasdaq National Market.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The contents of Registration Statements on Form S-8 Nos. 333-37369
and 333-69381 filed with the Securities and Exchange Commission on October 7,
1997 and December 21, 1998, respectively, are incorporated by reference
herein.
EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
<S> <C>
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Cooley Godward LLP is contained in Exhibit 5.1 to this Registration Statement.
24.1 Power of Attorney is contained on the signature pages.
99.1 1997 Equity Incentive Plan, as amended as of September 9, 1999.
99.2* Form of Incentive Stock Option Agreement and Supplemental Stock Option Agreement.
99.3* Irrevocable Notice of Option Exercise/Payment Authorization.
</TABLE>
* Documents incorporated by reference from the Registrant's Registration
Statement on Form S-8 (File No. 333-37369), filed with the Commission on
October 7, 1997.
<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 Fremont, State of
California, on February 25, 2000.
EXAR CORPORATION
By: /s/ Donald L. Ciffone, Jr.
------------------------------------
Donald L. Ciffone, Jr.
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Donald L. Ciffone, Jr. and Ronald W.
Guire, and each or any one of them, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or
their or his substitutes or substitute, may lawfully do or cause to be done
by virtue hereof.
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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Donald L. Ciffone, Jr. Chief Executive Officer, February 25, 2000
- --------------------------------------- President and Director (Principal
DONALD L. CIFFONE, JR. Executive Officer)
/s/ Ronald W. Guire Executive Vice President and February 25, 2000
- --------------------------------------- Chief Financial Officer,
RONALD W. GUIRE Secretary and Director (Principal
Financial and Accounting
Officer)
/s/ Raimon L. Conlisk Chairman of the Board February 25, 2000
- ---------------------------------------
RAIMON L. CONLISK
/s/ Frank P. Carrubba Director February 25, 2000
- ---------------------------------------
FRANK P. CARRUBBA
/s/ James E. Dykes Director February 25, 2000
- ---------------------------------------
JAMES E. DYKES
/s/ Richard Previte Director February 25, 2000
- ---------------------------------------
RICHARD PREVITE
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<S> <C>
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Cooley Godward LLP is contained in Exhibit 5.1 to this
Registration Statement.
24.1 Power of Attorney is contained on the signature pages.
99.1 1997 Equity Incentive Plan, as amended as of September 9, 1999.
99.2* Form of Incentive Stock Option Agreement and Supplemental Stock Option
Agreement.
99.3* Irrevocable Notice of Option Exercise/Payment Authorization.
</TABLE>
* Documents incorporated by reference from the Registrant's Registration
Statement on Form S-8 (File No. 333-37369), filed with the Commission on
October 7, 1997.
<PAGE>
EXHIBIT 5.1
February 25, 2000
Exar Corporation
48720 Kato Road
Fremont, CA 94538-1167
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by EXAR CORPORATION (the "Company") of a Registration
Statement on Form S-8 (the "Registration Statement") with the Securities and
Exchange Commission covering the offering of up to 450,000 shares of the
Company's Common Stock, $.0001 par value, (the "Shares") pursuant to its 1997
Equity Incentive Plan (the "Plan").
In connection with this opinion, we have examined the Registration Statement
and related Prospectus, your Certificate of Incorporation and By-laws, as
amended, and such other documents, records, certificates, memoranda and other
instruments as we deem necessary as a basis for this opinion. We have
assumed the genuineness and authenticity of all documents submitted to us as
originals, the conformity to originals of all documents submitted to us as
copies thereof, and the due execution and delivery of all documents where due
execution and delivery are a prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Shares, when sold and issued in accordance with the Plan, the
Registration Statement and related Prospectus, will be validly issued, fully
paid, and nonassessable (except as to shares issued pursuant to certain
deferred payment arrangements, which will be fully paid and nonassessable
when such deferred payments are made in full).
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
COOLEY GODWARD LLP
/s/ Matthew W. Sonsini
By: Matthew W. Sonsini
MWS:wp
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this Registration Statement
of EXAR Corporation and subsidiaries on Form S-8 of our report dated April
29, 1999, included in the Annual Report on Form 10-K of EXAR Corporation and
subsidiaries for the year ended March 31, 1999.
/s/ Deloitte & Touche LLP
San Jose, California
February 23, 1999
<PAGE>
EXHIBIT 99.1
EXAR CORPORATION
1997 EQUITY INCENTIVE PLAN
ADOPTED BY THE BOARD JUNE 12, 1997
APPROVED BY THE STOCKHOLDERS SEPTEMBER 18, 1997
AMENDED BY THE BOARD SEPTEMBER 18, 1997
AMENDED AND RESTATED SEPTEMBER 10, 1998
AMENDED AND RESTATED SEPTEMBER 9, 1999
1. PURPOSE.
(a) The purpose of the 1997 Equity Incentive Plan (the "Plan") is
to provide a means by which selected employees and directors of and
consultants to Exar Corporation, a Delaware corporation (the "Company"), and
its Affiliates, as defined in subparagraph 1(b), may be given an opportunity
to benefit from increases in value of the stock of the Company through the
granting of (i) incentive stock options, (ii) nonstatutory stock options, and
(iii) stock bonuses, all as defined below and collectively referred to as
"Stock Awards".
(b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company, as those terms are
defined in Sections 424(e) and (f), respectively, of the Internal Revenue
Code of 1986, as amended (the "Code").
(c) The Company, by means of the Plan, seeks to retain the
services of persons now employed by or serving as consultants or directors to
the Company, to secure and retain the services of persons capable of filling
such positions, and to provide incentives for such persons to exert maximum
efforts for the success of the Company.
(d) The Company intends that the Stock Awards issued under the
Plan shall, in the discretion of the Board of Directors of the Company (the
"Board") or any committee to which responsibility for administration of the
Plan has been delegated pursuant to subparagraph 2(c), be either incentive
stock options as that term is used in Section 422 of the Code ("Incentive
Stock Options"), options which do not qualify as Incentive Stock Options
("Nonstatutory Stock Options") or stock bonuses as described in paragraph 6
hereof ("Stock Bonuses"). All options shall be separately designated
Incentive Stock Options or Nonstatutory Stock Options at the time of grant,
and in such form as issued pursuant to paragraph 5, and a separate
certificate or certificates will be issued for shares purchased on exercise
of each type of option. An option designated as a Nonstatutory Stock Option
shall not be treated as an Incentive Stock Option.
2. ADMINISTRATION.
<PAGE>
(a) The Plan shall be administered by the Board unless and until
the Board delegates administration to a committee, as provided in
subparagraph 2(c).
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the persons
eligible under the Plan shall be granted Stock Awards; when and how Stock
Awards shall be granted; whether a Stock Award will be an Incentive Stock
Option, a Nonstatutory Stock Option, a Stock Bonus or a combination of the
foregoing; the provisions of each Stock Award granted (which need not be
identical), including the time or times when a person shall be permitted to
receive stock pursuant to a Stock Award; and the number of shares with
respect to which Stock Awards shall be granted to each such person.
(2) To construe and interpret the Plan and Stock Awards
granted under it, and to establish, amend and revoke rules and regulations
for its administration. The Board, in the exercise of this power, may
correct any defect, omission or inconsistency in the Plan or in any Stock
Award Agreement in a manner and to the extent it shall deem necessary or
expedient to make the Plan fully effective. "Stock Award Agreement" means a
written agreement between the Company and a holder of a Stock Award
evidencing the terms and conditions of an individual Stock Award grant. Each
Stock Award Agreement shall be subject to the terms and conditions of the
Plan.
(3) To amend the Plan as provided in paragraph 12.
(4) Generally, to exercise such powers and to perform
such acts as the Board deems necessary or expedient to promote the best
interests of the Company.
(c) The Board may delegate administration of the Plan to one or
more committees, provided, however, that if such a committee is authorized to
administer Stock Awards with respect to officers and directors of the
Company, such committee shall be composed of not fewer than two (2) members
of the Board, all of whom may be, in the discretion of the Board,
non-employee directors as defined in subparagraph 2(d) or outside directors
as defined in subparagraph 2(e). These committees are referred to herein as
the "Committee," as applicable. If administration is delegated to a
Committee, the Committee shall have, in connection with the administration of
the Plan or the administration of Stock Awards with respect to officers and
directors, as the case may be, the powers theretofore possessed by the Board,
subject, however, to such resolutions, not inconsistent with the provisions
of the Plan, as may be adopted from time to time by the Board. The Board may
abolish the Committee at any time and revest in the Board the administration
of the Plan. Notwithstanding anything in this paragraph to the contrary, the
Board or the Committee may delegate to a committee of one or more members of
the Board the authority to grant options to eligible persons who (1) are not
then subject to Section 16 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and/or (2) are either (i) not then covered employees (as
defined in subparagraph 2(f)) and are not expected to be covered employees at
the time of recognition of income resulting from such option, or (ii) not
persons with respect to whom the Company wishes to comply with Section 162(m)
of the Code.
(d) The term "non-employee director," as used in this Plan, shall
mean a director who either (i) is not a current employee or officer of the
Company or its parent or subsidiary, does not
<PAGE>
receive compensation (directly or indirectly) from the Company or its parent
or subsidiary for services rendered as a consultant or in any capacity other
than as director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the
Securities Act ("Regulation S-K")), does not possess an interest in any other
transaction as to which disclosure would be required under Item 404(a) of
Regulation S-K, and is not engaged in a business relationship as to which
disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is
otherwise considered a "non-employee director" for purposes of Rule 16b-3
promulgated under the Exchange Act.
(e) The term "outside director," as used in this Plan, shall mean
a director who either (i) is not a current employee of the Company or an
"affiliated corporation" (as defined in the Treasury regulations promulgated
under Section 162(m) of the Code), is not a former employee of the Company or
an affiliated corporation receiving compensation for prior services (other
than benefits under a tax qualified pension plan), was not an officer of the
Company or an affiliated corporation at any time, and is not currently
receiving direct or indirect enumeration from the Company or an affiliated
corporation for personal services in any capacity other than as a director,
or (ii) is otherwise considered an "outside director" for purposes of Section
162(m) of the Code.
(f) The term "covered employee," as used in this Plan, shall mean
the chief executive officer and the four (4) other highest compensated
officers of the Company.
3. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of paragraph 11 relating to
adjustments upon changes in stock, the stock that may be sold pursuant to
Stock Awards granted under the Plan shall not exceed in the aggregate One
Million Seven Hundred Twenty-Five Thousand (1,725,000) shares of the
Company's $.0001 par value common stock, plus any shares of such common stock
that would have become available under the Company's 1991 Stock Option Plan
due to the expiration or other termination of any stock award thereunder. If
any Stock Award granted under the Plan shall for any reason expire or
otherwise terminate prior to the issuance of the stock subject to such Stock
Award (or fail to vest in the case of a Stock Bonus), the stock not issued
pursuant to such Stock Award shall again become available for the Plan.
(b) The stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.
4. ELIGIBILITY.
(a) Incentive Stock Options may be granted only to employees
(including officers) of the Company or its Affiliates. A director of the
Company shall not be eligible to receive Incentive Stock Options unless such
director is also an employee (including an officer) of the Company or any
Affiliate. Nonstatutory Stock Options and Stock Bonuses may be granted only
to employees (including officers) of, directors of or consultants to the
Company or its Affiliates.
(b) No person shall be eligible for the grant of an Incentive
Stock Option under the Plan if, at the time of grant, such person owns (or is
deemed to own pursuant to Section 424(d) of the Code) stock possessing more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or of any of its Affiliates unless the exercise price of
such
<PAGE>
Incentive Stock Option is at least one hundred ten percent (110%) of the fair
market value of such stock at the date of grant and the option is not
exercisable after the expiration of five (5) years from the date of grant.
(c) Subject to the provisions of paragraph 11 relating to
adjustments upon changes in stock, no person shall be eligible to be granted
options covering more than Three Hundred Thousand (300,000) shares of the
Company's common stock in any calendar year.
5. OPTION PROVISIONS.
Each option shall be in such form and shall contain such terms and
conditions as the Board or the Committee shall deem appropriate. The
provisions of separate options need not be identical, but each option shall
include (through incorporation of provisions hereof by reference in the
option or otherwise) the substance of each of the following provisions:
(a) No option shall be exercisable after the expiration of a date
specified in the option (which date shall be no more than ten (10) years from
the date the option was granted).
(b) The exercise price of each Incentive Stock Option shall be
not less than one hundred percent (100%) of the fair market value of the
stock subject to the option on the date the option is granted. Except as
provided with respect to Deferred Salary Grants under paragraph 7. The
exercise price of each Nonstatutory Stock Option shall be not less than fifty
percent (50%) of the fair market value of the stock subject to the option on
the date the option is granted. Notwithstanding the foregoing, an option
(whether an Incentive Stock Option or a Nonstatutory Stock Option) may be
granted with an exercise price lower than that set forth in the preceding
sentence if such option is granted pursuant to an assumption or substitution
for another option in a manner satisfying the provisions of Section 424(a) of
the Code.
(c) The purchase price of stock acquired pursuant to an option
shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the time the option is exercised, or (ii)
at the discretion of the Board or the Committee, either at the time of the
grant or exercise of the option, (A) by delivery to the Company of other
common stock of the Company, (B) according to a deferred payment or other
arrangement (which may include, without limiting the generality of the
foregoing, the use of other common stock of the Company) with the person to
whom the option is granted or to whom the option is transferred pursuant to
subparagraph 5(d), or (C) in any other form of legal consideration that may
be acceptable to the Board or the Committee.
In the case of any deferred payment arrangement, interest shall be
payable at least annually and shall be charged at the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be
interest under the deferred payment arrangement.
(d) An option shall not be transferable except by will or by the
laws of descent and distribution, and shall be exercisable during the
lifetime of the person to whom the option is granted only by such person;
provided, however, that a Nonstatutory Stock Option may be transferred to the
extent provided in the option agreement. The person to whom the option is
granted may designate, by delivering written notice of the same to the
Company (in a form acceptable to the Company) during such person's lifetime,
a third party who, in the event of the
<PAGE>
death of the optionee, shall thereafter be entitled to exercise the option
and receive any and all proceeds thereof.
(e) The total number of shares of stock subject to an option may,
but need not, be allotted in periodic installments (which may, but need not,
be equal). From time to time during each of such installment periods, the
option may become exercisable ("vest") with respect to some or all of the
shares allotted to that period, and may be exercised with respect to some or
all of the shares allotted to such period and/or any prior period as to which
the option was not fully exercised. During the remainder of the term of the
option (if its term extends beyond the end of the installment periods), the
option may be exercised from time to time with respect to any shares then
remaining subject to the option. The provisions of this subparagraph 5(e)
are subject to any option provisions governing the minimum number of shares
as to which an option may be exercised.
(f) The Company may require any optionee, or any person to whom
an option is transferred under subparagraph 5(d), as a condition of
exercising any such option, (1) to give written assurances satisfactory to
the Company as to the optionee's knowledge and experience in financial and
business matters and/or to employ a purchaser representative reasonably
satisfactory to the Company who is knowledgeable and experienced in financial
and business matters, and that he or she is capable of evaluating, alone or
together with the purchaser representative, the merits and risks of
exercising the option; and (2) to give written assurances satisfactory to the
Company stating that such person is acquiring the stock subject to the option
for such person's own account and not with any present intention of selling
or otherwise distributing the stock. These requirements, and any assurances
given pursuant to such requirements, shall be inoperative if (i) the issuance
of the shares upon the exercise of the option has been registered under a
then currently effective registration statement under the Securities Act of
1933, as amended (the "Securities Act"), or (ii) as to any particular
requirement, a determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then applicable
securities laws.
(g) An option shall terminate three (3) months after termination
of the optionee's employment or relationship as a consultant or director with
the Company or an Affiliate, unless (i) such termination is due to such
person's permanent and total disability, within the meaning of Section
422(c)(6) of the Code, in which case the option may, but need not, provide
that it may be exercised at any time within one (1) year following such
termination of employment or relationship as a consultant or director; or
(ii) the optionee dies while in the employ of or while serving as a
consultant or director to the Company or an Affiliate, or within not more
than three (3) months after termination of such relationship, in which case
the option may, but need not, provide that it may be exercised at any time
within eighteen (18) months following the death of the optionee by the person
or persons entitled to exercise the option pursuant to subparagraph 5(d)
hereof; or (iii) the option by its terms specifies either (A) that it shall
terminate sooner than three (3) months after termination of the optionee's
employment or relationship as a consultant or director, or (B) that it may be
exercised more than three (3) months after termination of such relationship
with the Company or an Affiliate. This subparagraph 5(g) shall not be
construed to extend the term of any option or to permit anyone to exercise
the option after expiration of its term, nor shall it be construed to
increase the number of shares as to which any option is exercisable from the
amount exercisable on the date of termination of the optionee's employment or
relationship as a consultant or director.
<PAGE>
(h) The option may, but need not, include a provision whereby the
optionee may elect at any time during the term of his or her employment or
relationship as a consultant or director with the Company or any Affiliate to
exercise the option as to any part or all of the shares subject to the option
prior to the stated vesting date of the option or of any installment or
installments specified in the option. Any shares so purchased from any
unvested installment or option may be subject to a repurchase right in favor
of the Company or to any other restriction the Board or the Committee
determines to be appropriate.
(i) To the extent provided by the terms of an option, the
optionee may satisfy any federal, state or local tax withholding obligation
relating to the exercise of such option by any of the following means or by a
combination of such means: (1) tendering a cash payment; (2) authorizing the
Company to withhold from the shares of the common stock otherwise issuable to
the participant as a result of the exercise of the stock option a number of
shares having a fair market value equal to the amount of the withholding tax
obligation; or (3) delivering to the Company owned and unencumbered shares of
the common stock having a fair market value equal to the amount of the
withholding tax obligation.
6. STOCK BONUS PROVISIONS.
Each Stock Bonus agreement shall be in such form and shall contain
such terms and conditions as the Board or the Committee shall deem
appropriate. The terms and conditions of Stock Bonus agreements may change
from time to time, and the terms and conditions of separate agreements need
not be identical, but each Stock Bonus agreement shall include (through
incorporation of provisions hereof by reference in the agreement or
otherwise) the substance of each of the following provisions as appropriate:
(a) The purchase price of stock under each Stock Bonus agreement
shall be such amount as the Board or Committee shall determine and designate
in such agreement. Notwithstanding the foregoing, the Board or the Committee
may determine that eligible participants in the Plan may be awarded stock
pursuant to a Stock Bonus agreement in consideration for past services
actually rendered to the Company or for its benefit.
(b) No rights under a Stock Bonus agreement shall be assignable
by any participant under the Plan, either voluntarily or by operation of law,
except where such assignment is required by law or expressly authorized by
the terms of the applicable Stock Bonus agreement.
(c) The purchase price, if any, of stock acquired pursuant to a
Stock Bonus agreement shall be paid either: (i) in cash at the time of
purchase; (ii) at the discretion of the Board or the Committee, according to
a deferred payment or other arrangement with the person to whom the stock is
sold; or (iii) in any other form of legal consideration that may be
acceptable to the Board or the Committee in their discretion.
Notwithstanding the foregoing, the Board or the Committee to which
administration of the Plan has been delegated may award stock pursuant to a
Stock Bonus agreement in consideration for past services actually rendered to
the Company or for its benefit.
<PAGE>
(d) Shares of stock sold or awarded under a Stock Bonus agreement
may, but need not, be subject to a repurchase option in favor of the Company
in accordance with a vesting schedule to be determined by the Board or the
Committee.
(e) In the event an employee, director or consultant's employment
or relationship with the Company is interrupted or terminated by the Company
or any Affiliate, the Company may repurchase or otherwise reacquire any or
all of the shares of stock held by that person which have not vested as of
the date of termination under the terms of the Stock Bonus agreement between
the Company and such person.
(f) To the extent provided by the terms of the Stock Bonus
agreement, the recipient may satisfy any federal, state or local tax
withholding obligation relating to the receipt of the Stock Bonus by any of
the following means or by a combination of such means: (1) tendering a cash
payment; (2) authorizing the Company to withhold from the shares of the
common stock otherwise issuable to the recipient as a result of the Stock
Bonus a number of shares having a fair market value equal to the amount of
the withholding tax obligation; or (3) delivering to the Company owned and
unencumbered shares of the common stock having a fair market value equal to
the amount of the withholding tax obligation.
7. DEFERRED SALARY GRANTS.
(a) Any employee (including officers), director or consultant who
is selected by the Board or Committee ("Deferral Participant") may elect to
apply a portion of his or her base salary, in an amount equal to at least
five thousand dollars ($5,000) but in no event more than fifty thousand
dollars ($50,000), to the acquisition of an option to purchase shares of the
Company's common stock pursuant to the terms of this paragraph 7 ("Deferred
Salary Option"). Such election is irrevocable and must be filed with the
Company prior to the commencement of the calendar year in which the base
salary to be deferred is earned. Notwithstanding the foregoing, a newly
hired, elected or appointed Deferral Participant may file an irrevocable
election with the Company within thirty (30) days of the date the Deferral
Participant commences service to the Company.
Each Deferral Participant who files such a timely election shall
automatically be granted an option under this paragraph 7 on (i) the first
trading day in January of the calendar year for which the deferral election
is to be in effect; or (ii) for a newly hired, elected or appointed Deferral
Participant, the first trading day of the month following the month the
Deferral Participant files such election.
(b) The number of shares of Company common stock subject to a
Deferred Salary Option shall be determined pursuant to the following formula
(rounded down to the nearest whole number):
X= A / (B x 66-2/3%), where
X is the number of option shares,
A is the maximum amount of base salary subject to the deferral
election, and
B is the fair market value per share of the common stock on the
option grant date.
<PAGE>
(c) The purchase price per share of common stock of the Company
for the shares to be purchased pursuant to the exercise of any Deferred
Salary Option shall be thirty three and one third percent (33-1/3%) of the
fair market value of the Company's common stock on the date such Deferred
Salary Option is granted.
(d) Each Deferred Salary Option shall vest (become exercisable)
equally over the twelve (12) month period that is the calendar year in which
salary is deferred, and shall terminate on the earlier of (i) ten (10) years
from the date the option was granted, or (ii) three (3) years following
termination of the Deferral Participant's employment or relationship as a
consultant or director with the Company or an Affiliate. If the Deferred
Salary Option is not exercised during the applicable period, it shall be
deemed to have been forfeited and of no further force or effect.
8. COVENANTS OF THE COMPANY.
(a) During the terms of the Stock Awards, the Company shall keep
available at all times the number of shares of stock required to satisfy such
Stock Awards up to the number of shares of stock authorized under the Plan.
(b) The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may
be required to issue and sell shares of stock under the Stock Awards granted
under the Plan; provided, however, that this undertaking shall not require
the Company to register under the Securities Act either the Plan, any Stock
Award granted under the Plan or any stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable to
obtain from any such regulatory commission or agency the authority which
counsel for the Company deems necessary for the lawful issuance and sale of
stock under the Plan, the Company shall be relieved from any liability for
failure to issue and sell stock under such Stock Awards unless and until such
authority is obtained.
9. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to Stock Awards granted
under the Plan shall constitute general funds of the Company.
10. MISCELLANEOUS.
(a) The Board or the Committee shall have the power to accelerate
the time at which a Stock Award may first be exercised or the time during
which a Stock Award or any part thereof will vest, notwithstanding the
provisions in the Stock Award stating the time at which it may first be
exercised or the time during which it will vest.
(b) The holder of a Stock Award (including any person to whom an
option is transferred under subparagraph 5(d)) shall not be deemed to be the
holder of, or to have any of the rights of a holder with respect to, any
shares subject to such Stock Award unless and until such person has satisfied
all requirements for acquisition of the shares subject to the Stock Award
pursuant to the terms of the Stock Award Agreement.
(c) Nothing in the Plan or any instrument executed or Stock Award
granted pursuant thereto shall confer upon any eligible employee, consultant
or director or the holder of Stock
<PAGE>
Awards any right to continue in the employ of the Company or any Affiliate
(or to continue acting as a consultant or director) or shall affect the right
of the Company or any Affiliate to terminate the employment or consulting
relationship or directorship of any eligible employee, consultant or director
or other holder of Stock Awards with or without cause. In the event that a
holder of Stock Awards is permitted or otherwise entitled to take a leave of
absence, the Company shall have the unilateral right to (i) determine whether
such leave of absence will be treated as a termination of employment or
relationship as consultant or director for purposes of the Plan and
corresponding provisions of any outstanding Stock Awards, and (ii) suspend or
otherwise delay the time or times at which the shares subject to the Stock
Awards would otherwise vest.
(d) To the extent that the aggregate fair market value
(determined at the time of grant) of stock with respect to which incentive
stock options (as defined in the Code) granted after 1986 are exercisable for
the first time by any optionee during any calendar year under all plans of
the Company and its Affiliates exceeds one hundred thousand dollars
($100,000), the options or portions thereof which exceed such limit
(according to the order in which they were granted) shall be treated as
Nonstatutory Stock Options.
(e) (1) The Board shall have the authority to effect, at any
time and from time to time (i) the repricing of any outstanding options under
the Plan and/or (ii) with the consent of the affected holders of options, the
cancellation of any outstanding options and the grant in substitution
therefor of new options under the Plan covering the same or different numbers
of shares of common stock, but having an exercise price per share not less
than fifty percent (50%) of the fair market value (one hundred percent (100%)
of the fair market value in the case of an Incentive Stock Option generally
or, in the case of an Incentive Stock Option granted to a ten percent (10%)
stockholder (as defined in subparagraph 4(b)), not less than one hundred and
ten percent (110%) of the fair market value) per share of common stock on the
new grant date. Notwithstanding the foregoing: (i) in no event shall this
subparagraph 10(e) apply to any option held by a director or officer
(corporate and Section 16 insider) of the Company, and (ii) no more than
twenty percent (20%) of the options reserved for issuance under the Plan
shall be repriced or canceled pursuant to this subparagraph 10(e).
(2) Shares subject to an option canceled under this
subparagraph 10(e) shall continue to be counted against the maximum award of
options permitted to be granted pursuant to subparagraph 4(c) of the Plan.
The repricing of an outstanding option by the Board, resulting in a reduction
of the exercise price, shall be deemed to be a cancellation of the original
option and the grant of a substitute option; in the event of such repricing,
both the original and the substituted options shall be counted against the
maximum awards of options permitted to be granted pursuant to subparagraph
4(c) of the Plan. The provisions of this subparagraph 10(e) shall be
applicable only to the extent required by Section 162(m) of the Code.
11. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or
subject to any Stock Award granted under the Plan (through merger,
consolidation, reorganization, recapitalization, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of
shares, exchange of shares, change in corporate structure or otherwise), the
Plan and outstanding Stock Awards will be appropriately adjusted in the
class(es) and maximum
<PAGE>
number of shares subject to the Plan and the class(es) and number of shares
and price per share of stock subject to outstanding Stock Awards.
(b) In the event of: (1) a dissolution or liquidation of the
Company; (2) a merger or consolidation in which the Company is not the
surviving corporation; (3) a reverse merger in which the Company is the
surviving corporation but the shares of the Company's common stock
outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or
otherwise; or (4) any other capital reorganization in which more than fifty
percent (50%) of the shares of the Company entitled to vote are exchanged,
excluding in each case a capital reorganization in which the sole purpose is
to change the state of incorporation on the Company, then all outstanding
options shall become exercisable in full for a period of at least ten (10)
days, and all stock bonuses shall be fully vested, prior to such event.
Outstanding options which have not been exercised prior to such event shall
terminate on the date of such event unless assumed by a successor corporation.
12. AMENDMENT OF THE PLAN.
(a) The Board at any time, and from time to time, may amend the
Plan. However, except as provided in paragraph 11 relating to adjustments
upon changes in stock, no amendment shall be effective unless approved by the
stockholders of the Company to the extent such amendment requires stockholder
approval in order for the Plan to satisfy the requirements of Section 422 of
the Code, to comply with the requirements of Rule 16b-3 promulgated under the
Exchange Act or to satisfy any Nasdaq or securities exchange listing
requirements.
(b) The Board may in its sole discretion submit any other
amendment to the Plan for stockholder approval, including, but not limited
to, amendments to the Plan intended to satisfy the requirements of Section
162(m) of the Code and the regulations promulgated thereunder regarding the
exclusion of performance-based compensation from the limit on corporate
deductibility of compensation paid to certain executive officers.
(c) It is expressly contemplated that the Board may amend the
Plan in any respect the Board deems necessary or advisable to provide
optionees with the maximum benefits provided or to be provided under the
provisions of the Code and the regulations promulgated thereunder relating to
employee Incentive Stock Options and/or to bring the Plan and/or Incentive
Stock Options granted under it into compliance therewith.
(d) Rights under any Stock Award granted before amendment of the
Plan shall not be impaired by any amendment of the Plan unless (i) the
Company requests the consent of the person to whom the Stock Award was
granted and (ii) such person consents in writing.
13. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any time.
Unless sooner terminated, the Plan shall terminate on the day before the
tenth anniversary of the date the Plan is adopted or the date the Plan is
approved by the stockholders, whichever is earlier. No Stock Awards may be
granted under the Plan while the Plan is suspended or after it is terminated.
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(b) Rights and obligations under any Stock Award granted while
the Plan is in effect shall not be altered or impaired by suspension or
termination of the Plan, except with the consent of the person to whom the
Stock Award was granted.
14. EFFECTIVE DATE OF PLAN.
The Plan becomes effective on the date approved by the Board, but no
stock bonuses shall be granted and no options shall be exercised unless and
until the Plan has been approved by the stockholders of the Company, which
approval shall be within twelve (12) months before or after the date the Plan
is adopted by the Board.
