<PAGE> 1
As filed with the Securities and Exchange Commission on March 20, 1997
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
REMEC, INC.
(Exact Name of Registrant as Specified in its Charter)
California 95-3814301
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
9404 Chesapeake Drive, San Diego, California 92123
(Address of Principal Executive Offices)
Radian Technology, Inc. 1987 Stock Option Plan
(Full Title of the Plan)
Ronald E. Ragland, Chairman of the Board and Chief Executive Officer
9404 Chesapeake Drive
San Diego, California 92123
(Name and Address of Agent For Service)
(619) 560-1301
(Telephone number, including area code, of agent for service)
Copy to: Victor A. Hebert, Esq.
Heller Ehrman White & McAuliffe
333 Bush Avenue
San Francisco, California 94104
(415) 772-6000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================================================================
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price per offering registration
registered registered share (1) price fee
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
par value $.01 90,445 $23.4375 $2,119,804.69 $643
================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of computing the amount of
registration fee pursuant to Rule 457(c) under the Securities Act, as
amended, based on the last sale reported of the Registrant's Common
Stock on the Nasdaq National Market on March 19, 1997.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed or to be filed with the
Securities and Exchange Commission (the "Commission") by the registrant are
incorporated by reference in this registration statement:
(a) The registrant's latest annual report (Form 10-K) filed
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or the latest prospectus filed pursuant to Rule
424(b) under the Securities Act of 1933, as amended (the "Securities Act") that
contains audited financial statements for the registrants latest fiscal year for
which such statements have been filed;
(b) All other fiscal reports filed by the registrant pursuant
to Section 13(a) or 15(d) of the Exchange Act since the end of the fiscal year
covered by the annual report or prospectus referred to (a) above; and
(c) The description of the Common Stock of the registrant
contained in the registration statement filed under the Exchange Act registering
such Common Stock under Section 12 of the Exchange Act.
All documents subsequently filed by the registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities then remaining unsold should
be deemed to be incorporated by reference in this registration statement and to
be part thereof from the date of filing of such documents.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The registrant has the power to indemnify its officers and
directors against liability for certain acts pursuant to Section 317 of the
California Corporations Code. Articles Fifth and Sixth of the registrants
Amended and Restated Articles of Incorporation provide as follows:
"Fifth: The liability of directors of this
Corporation for monetary damages shall be eliminated to the fullest extent
permissible under California law.
"Sixth: This Corporation is authorized to provide
indemnification of agents (as defined in Section 317 of the California
Corporations Code) for breach of duty to this Corporation and its shareholders
through bylaw provisions, or through agreements with the agents, or otherwise,
in excess of the indemnification otherwise permitted by Section 317 of the
California Corporations Code, subject to the limits on such excess
indemnification set forth in Section 204 of the Code."
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<PAGE> 3
In addition, Article V of the registrants Bylaws provides that
the registrant shall indemnify its directors and executive officers to the
fullest extent not prohibited by California Corporations Code and provides for
the advancement of expenses upon a receipt of an undertaking to repay such
amounts if the person is determined ultimately not to be entitled to
indemnification.
The registrant has entered into Indemnification Agreements
with its officers and directors.
ITEM 8. EXHIBITS
5 Opinion of Heller Ehrman White & McAuliffe
23.1 Consent of Heller Ehrman White & McAuliffe
(filed as part of Exhibit 5)
23.2 Consent of Ernst & Young LLP, Independent Auditors
24 Power of Attorney (see pages 5 and 6)
99.1 Radian Technology, Inc. 1987 Stock Option Plan
ITEM 9. UNDERTAKINGS
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in
the registration statement;
provided, however, that paragraphs A(1)(i) and A(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the Exchange Act that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new
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<PAGE> 4
registrations statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining liability under the Securities Act, each filing of the registrants
annual report pursuant to Section 13(a) or 15(d) of the Exchange Act that is
incorporated by reference in the registration statement shall be deemed a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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<PAGE> 5
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 San Diego, State of California, on March 20, 1997.
REMEC, INC.
By:/S/ RONALD E. RAGLAND
-------------------------------------
Ronald E. Ragland, Chairman of
the Board and Chief Executive
Officer
POWER OF ATTORNEY TO SIGN AMENDMENTS
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below does hereby constitute and appoint Errol Ekaireb and
Thomas A. George, or either of them, with full power of substitution, such
person's true and lawful attorneys-in-fact and agents for such person in such
person's name, place and stead, in any and all capacities, to sign any or all
amendments (including post-effective amendments) to this Registration Statement
on Form S-8 and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises in order to effectuate the same as fully, to all intents and
purposes, as he or such person might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this
Registration Statement on Form S-8 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/S/ RONALD E. RAGLAND Chairman of the Board, February 26, 1997
- -------------------------- and Chief Executive
Ronald E. Ragland Officer and Director
(Principal Executive
Officer)
</TABLE>
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<PAGE> 6
<TABLE>
<S> <C> <C>
/S/ ERROL EKAIREB President and Chief February 26, 1997
- -------------------------- Operating Officer and
Errol Ekaireb Director
/S/ THOMAS A. GEORGE Chief Financial Officer, February 26, 1997
- -------------------------- Senior Vice President,
Thomas A. George and Secretary (Principal
Financial and
Accounting Officer)
/S/ JACK A. GILES Executive Vice February 26, 1997
- -------------------------- President, President of
Jack A. Giles REMEC Microwave
Division and Director
/S/ DENNY MORGAN Director, Senior Vice February 26, 1997
- -------------------------- President and Chief
Denny Morgan Engineer
/S/ JOSEPH T. LEE Executive Vice February 28, 1997
- -------------------------- President and Director
Joseph T. Lee
/S/ ANDRE R. HORN Director February 27, 1997
- --------------------------
Andre R. Horn
/S/ JEFFREY M. NASH Director February 27, 1997
- --------------------------
Jeffrey M. Nash
Director ________, 1997
- --------------------------
Gary L. Luick
/S/ T.A. CORCORAN Director February 27, 1997
- --------------------------
Thomas A. Corcoran
/S/ WILLIAM H. GIBBS Director February 27, 1997
- --------------------------
William H. Gibbs
</TABLE>
-6-
<PAGE> 7
Index to Exhibits
<TABLE>
<CAPTION>
Sequentially
Item No. Description of Item Numbered Page
- -------- ------------------- -------------
<S> <C> <C>
5 Opinion of Heller Ehrman White & McAuliffe
23.1 Consent of Heller Ehrman White & McAuliffe
(filed as part of Exhibit 5)
23.2 Consent of Ernst & Young LLP, Independent Auditors
24 Power of Attorney (see pages 5 and 6)
99.1 Radian Technology, Inc. 1987 Stock Option Plan
</TABLE>
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<PAGE> 1
EXHIBIT 5
March 20, 1997
REMEC, Inc.
9404 Chesapeake Drive
San Diego, CA 92123
Registration Statement on Form S-8
----------------------------------
Ladies and Gentlemen: We have acted as counsel to REMEC, Inc. a California
corporation (the "Company"), in connection with the Registration Statement on
Form S-8 (the "Registration Statement") which the Company proposes to file with
the Securities and Exchange Commission on or about March 20, 1997, for the
purpose of registering under the Securities Act of 1933, as amended, an
aggregate of 90,445 shares of its Common Stock, par value $.01 (the "Shares").
The Shares are issuable upon exercise of options to purchase Common Stock under
the Radian Technology, Inc. 1987 Stock Option Plan (the "Plan") which was
assumed by the Company in connection with its acquisition of Radian Technology,
Inc.
In connection with this opinion, we have assumed the authenticity of all
records, documents and instruments submitted to us as originals, the genuineness
of all signatures, the legal capacity of natural persons and the conformity to
the originals of all records, documents and instruments submitted to us as
copies. We have based our opinion upon our review of the following records,
documents and instruments:
(a) The Articles of Incorporation of the Company certified by the
Secretary of State of the State of California as of February 26, 1997 and
certified to us by an officer of the Company as being complete and in full force
and effect as of the date of this opinion;
<PAGE> 2
REMEC, Inc.
March 20, 1997 Page 2
(b) The Bylaws of the Company certified to us by an officer of the
Company as being complete and in full force and effect as of the date of this
opinion;
(c) A Certificate of the Chief Financial Officer of the Company (i)
attaching records certified to us as constituting all records of proceedings and
actions of the Board of Directors of the Company relating to the Plan and the
Registration Statement, and (ii) certifying as to certain factual matters;
(d) The Registration Statement;
(e) The Plan; and
(f) A Certificate of ChaseMellon Shareholder Services, the Company's
transfer agent, dated February 28, 1997, as to certain factual matters.
This opinion is limited to the federal law of the United States of
America and the law of the State of California, and we disclaim any opinion as
to the laws of any other jurisdiction. We further disclaim any opinion as to
any other statute, rule, regulation, ordinance, order or other promulgation of
any other jurisdiction or any regional or local governmental body or as to any
related judicial or administrative opinion.
Based upon the foregoing and our examination of such questions of law
as we have deemed necessary or appropriate for the purpose of this opinion, and
assuming that (i) the Registration Statement becomes and remains effective
during the period when the Shares are offered and sold, (ii) appropriate
certificates evidencing the Shares will be executed and delivered upon issuance
of the Shares, (iii) the full consideration stated in the Plan is paid for each
Share, and (iv) all applicable securities laws are complied with, it is our
opinion that, when issued by the Company, after payment therefor in the manner
provided in the Plan, the Shares covered by the Registration Statement will be
legally issued, fully paid and nonassessable.
This opinion is rendered to you in connection with the Registration
Statement and is solely for your benefit. This opinion may not be relied upon
by you for any other purpose, or relied upon by any other person, firm,
corporation or other entity for any purpose, without our prior written consent.
We disclaim any obligation to advise you of any change of law that occurs, or
any facts of which we may become aware, after the date of this opinion.
<PAGE> 3
REMEC, Inc. Page 3
March 20, 1997
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ HELLER EHRMAN WHITE & McAULIFFE
<PAGE> 1
Exhibit 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the Radian Technology, Inc. 1987 Stock Option Plan
of our report dated February 29, 1996, except for the first paragraph of Note
2 as to which the date is August 26, 1996, with respect to the consolidated
financial statements and schedule of REMEC, Inc. by reference in its Annual
Report (Form 10-K) for the year ended January 31, 1996, filed with the
Securities and Exchange Commission.
/S/ ERNST & YOUNG, LLP
San Diego, California
March 19, 1997
<PAGE> 1
EXHIBIT 99.1
RADIAN TECHNOLOGY, INC.
1987 STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Stock Option Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to the Employees and Consultants
of the Company and to promote the success of the Company's business.
Options granted hereunder may be either Incentive Stock Options or
Nonstatutory Stock Options at the discretion of the Board and as reflected in
the terms of the written option agreement.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Board" shall mean the Committee, if one has been
appointed, or the Board of Directors of the Company, if no Committee is
appointed.
(b) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(c) "Committee" shall mean the Committee appointed by the
Board of Directors in accordance with paragraph (a) of Section 4 of the Plan, if
one is appointed.
(d) "Common Stock" shall mean the Common Stock of the Company.
(e) "Company" shall mean Radian Technology, Inc., a California
corporation.
(f) "Consultant" shall mean any person who is engaged by the
Company or any subsidiary to render consulting services and is compensated for
such consulting services, and any director of the Company whether compensated
for such services or not; provided that if and in the event the Company
registers any class of any equity security pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the term
Consultant shall thereafter not include directors who are not compensated for
their services or are paid only a director's fee by the Company.
(g) "Continuous Status as an Employee or Consultant" shall
mean the absence of any interruption or termination of service as an Employee or
Consultant. Continuous Status as an Employee or Consultant shall not be
considered interrupted in the case of sick leave, military leave, or any other
leave of absence approved by the Board; provided that such leave is for a period
of not more than 90 days or reemployment upon the expiration of such leave is
guaranteed by contract or statute.
<PAGE> 2
(h) "Employee" shall mean any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.
(i) "Incentive Stock Option" shall mean an option intended to
qualify as an incentive stock option within the meaning of Section 422A of the
Code.
(j) "Nonstatutory Stock Option" shall mean an Option not
intended to qualify as an Incentive Stock Option.
(k) "Option" shall mean a stock option granted pursuant to the
Plan.
(l) "Optioned Stock" shall mean the Common Stock subject to an
Option.
(m) "Optionee" shall mean an Employee or Consultant who
receives an Option.
(n) "Parent" shall mean a "parent corporation", whether now or
hereafter existing, as defined in Section 425(e) of the Code.
(o) "Plan" shall mean this 1987 Stock Option Plan.
(p) "Share" shall mean a share of the Common Stock, as
adjusted in accordance with Section 11 of the Plan.
(q) "Subsidiary" shall mean a "subsidiary corporation",
whether now or hereafter existing, as defined in Section 425(e) of the code.
3. Stock Subject to the Plan. Subject to the provisions of Section 11
of the Plan, the maximum aggregate number of shares which may be optioned and
sold under the Plan is 1,000,000 shares of Common Stock. The Shares may be
authorized, but unissued, or reacquired Common Stock.
If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for
future grant under the Plan. Notwithstanding any other provision of the Plan,
shares issued under the Plan and later repurchased by the Company shall not
become available for future grant or sale under the Plan.
4. Administration of the Plan.
(a) Procedure. The Plan shall be administered by the Board of
Directors of the Company.
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<PAGE> 3
(i) Subject to subparagraph (ii), the Board of
Directors may appoint a Committee consisting of not less than two members of the
Board of Directors to administer the Plan on behalf of the Board of Directors,
subject to such terms and conditions as the Board of Directors may prescribe.
Once appointed, the Committee shall continue to serve until otherwise directed
by the Board of Directors. Members of the Board who are either eligible for
Options or have been granted Options may vote on any matters affecting the
administration of the Plan or the grant of any Options pursuant to the Plan,
except that no such member shall act upon the granting of an Option to himself,
but any such member may be counted in determining the existence of a quorum at
any meeting of the Board during which action is taken with respect to the
granting of Options to him.
(ii) Notwithstanding the foregoing subparagraph (i),
if and in any event the Company registers any class of any equity security
pursuant to Section 12 of the Exchange Act, from the effective date of such
registration until six months after the termination of such registration, any
grants of options to officers or directors shall only be made by the Board of
Directors; provided, however, that if a majority of the Board of Directors is
eligible to participate in this Plan or any other stock option or other stock
plan of the Company or any of its affiliates, or has been eligible at any time
within the preceding year, any grants of options to directors must be made by,
or only in accordance with the recommendation of, a Committee consisting of
three or more persons, who may but need not be directors or employees of the
Company, appointed by the Board of Directors and having full authority to act in
the matter, none of whom is eligible to participate in this Plan or any other
stock option or other stock plan of the Company or any of its affiliates, or has
been eligible at any time within the preceding year. Any Committee administering
the Plan with respect to grants to officers who are not also directors shall
conform to the requirements of the preceding sentence. Once appointed, the
Committee shall continue to serve until otherwise directed by the Board of
Directors.
(iii) Subject to the foregoing subparagraphs (i) and
(ii), from time to time the Board of Directors may increase the size of the
Committee and appoint additional members thereof, remove members (with or
without cause) and appoint new members in substitution therefor, fill vacancies
however caused, or remove all members of the Committee and thereafter directly
administer the Plan.
(b) Powers of the Board. Subject to the provisions of the
Plan, the Board shall have the authority, in its discretion: (i) to grant
Incentive Stock Options or Nonstatutory Stock Options; (ii) to determine, upon
review of relevant information and in accordance with Section 8(b) of the Plan,
the fair market value of the Common Stock; (iii) to determine the exercise price
per share of Options to be granted, which exercise price shall be determined in
accordance with Section 8(a) of the Plan; (iv) to
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<PAGE> 4
determine the Employees or Consultants to whom, and the time or times at which,
Options shall be granted and the number of shares to be represented by each
Option; (v) to interpret the Plan; (vi) to prescribe, amend and rescind rules
and regulations relating to the Plan; (vii) to determine the terms and
provisions of each Option granted (which need not be identical) and, with the
consent of the holder thereof, modify or amend each Option; (viii) to accelerate
or defer (with the consent of the Optionee) the exercise date of any Option,
consistent with the provisions of Section 5 of the Plan; (ix) to authorize any
person to execute on behalf of the Company any instrument required to effectuate
the grant of an Option previously granted by the Board; (x) to require that the
Shares subject to any Option be subject to a right of first refusal exercisable
by the company or its assignee, as described in a written stock option
agreement; and (xi) to make all other determinations deemed necessary or
advisable for the administration of the Plan.
(c) Effect of Board's Decision. All decisions, determinations
and interpretations of the Board shall be final and binding on all Optionees and
any other holders of any Options granted under the Plan.
5. Eligibility.
(a) Nonstatutory Stock Options may be granted to Employees or
Consultants. Incentive Stock Options may be granted only to Employees. An
Employee or Consultant who has been granted an Option may, if he is otherwise
eligible, be granted an additional Option or Options.
(b) No Incentive Stock Option may be granted to an Employee
which, when aggregated with all other Incentive Stock Options granted to such
Employee by the Company or any Parent, or Subsidiary, would result in shares
having an aggregate fair market value (determined for each Share as of the date
of grant of the option covering such Share) in excess of $100,000 becoming first
available for purchase upon exercise of an Incentive Stock Option during any
calendar year. Options not intended to qualify as Incentive Stock Options shall
not be subject to the limitations contained in the preceding sentence.
(c) Section 5(b) of the Plan shall apply only to an Incentive
Stock Option evidenced by an "Incentive Stock option Agreement" which sets forth
the intention of the Company and the Optionee that such option shall qualify as
an Incentive Stock Option. Section 5(b) of the Plan shall not apply to any
Option evidenced by a "Nonstatutory Stock Option Agreement" which sets forth the
intention of the Company and the Optionee that such Option shall be a
Nonstatutory Stock Option.
(d) The Plan shall not confer upon any Optionee any right with
respect to continuation of employment or consulting relationship with the
Company, nor shall it interfere in any way
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<PAGE> 5
with his right or the Company's right to terminate his employment or consulting
relationship at any time.
6. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company as described in Section 17 of the Plan. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 13 of the Plan.
7. Term of Option. The term of each Incentive Stock Option shall be ten
(10) years from the date of grant thereof or such shorter term as may be
provided in the Incentive Stock Option Agreement. The term of each Nonstatutory
Stock Option shall be ten (10) years and one (1) day from the date of grant
thereof or such shorter term as may be provided in the Nonstatutory Stock Option
Agreement. However, in the case of an Option granted to an optionee who, at the
time the Option is granted, owns stock representing more than ten percent (10%)
of the voting power of all classes of stock of the company or any Parent or
Subsidiary, (a) if the Option is an Incentive Stock Option, the term of the
Option shall be five (5) years from the date of grant thereof or such shorter
time as may be provided in the Stock Option Agreement, or (b) if the Option is
Nonstatutory Stock Option, the term of the Option shall be five (5) years and
one (1) day from the date of grant thereof or such shorter term as may be
provided in the Nonstatutory Stock Option Agreement.
8. Exercise Price and Consideration.
(a) The per Share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined by the
Board, but shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time
of the grant of such Incentive Stock option, owns stock representing more than
ten percent (10%) of the voting power of all classes of stock of the Company or
any Parent or Subsidiary, the per Share exercise price shall be no less than
110% of the fair market value per Share on the date of grant.
(B) granted to any Employee, the per Share
exercise price shall be no less than 100% of the fair market value per Share on
the date of grant.
(ii) In the case of a Nonstatutory Stock Option
(A) granted to any person who at the time of
the grant of such Option owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price
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<PAGE> 6
shall be no less than 110% of the fair market value per Share on the date of the
grant.
(B) granted to any person, the per Share
exercise price shall be no less than 85% of the fair market value per Share on
the date of grant.
(iii) In the case of an Option granted on or after
the effective date of registration of any class of equity security of the
Company pursuant to Section 12 of the Exchange Act and prior to six months after
the termination of such registration, the per Share exercise price shall be no
less than 100% of the fair market value per Share on the date of grant.
(b) The fair market value shall be determined by the Board in
its discretion; provided, however, that where there is a public market for the
Common Stock, the fair market value per Share shall be the mean of the bid and
asked prices (or the closing price per share if listed on the National
Association of Securities Dealers Automated Quotation ("NASDAQ") National Market
System) of the Common Stock for the date of grant, as reported in the Wall
Street Journal (or, if not so reported, as otherwise reported by the NASDAQ
System) or, in the event the Common Stock is listed on a stock exchange, the
fair market value per Share shall be the closing price on such exchange on the
date of grant of the option, as reported in the Wall Street Journal.
(c) The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be determined
by the Board and may consist entirely of cash, check, promissory note (to the
extent permitted under applicable law), other Shares of Common Stock having a
fair market value on the date of surrender equal to the aggregate exercise price
of the Shares as to which said Option shall be exercised, or any combination of
such methods of payment. In making its determination as to the type of
consideration to accept, the Board shall consider if acceptance of such
consideration may be reasonably expected to benefit the Company (Section 315(b)
of the California General Corporation Law).
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any
Option granted hereunder shall be exercisable at such times and under such
conditions as determined by the Board, including performance criteria with
respect to the Company and/or the Optionee, and as shall be permissible under
the terms of the Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the option and full payment for the
Shares with respect
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<PAGE> 7
to which the option is exercised has been received by the Company. Upon receipt
of such written notice and full payment, the Company shall issue a stock
certificate representing the Shares with respect to which the option is
exercised as soon as practicable. Full payment may, as authorized by the Board,
consist of any consideration and method of payment allowable under Section 8(c)
of the Plan. Until the issuance (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company) of
the stock certificate evidencing such Shares, no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option. No adjustment will
be made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 11 of the
Plan.
Exercise of an option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Status as an Employee or Consultant. If an
Employee or Consultant ceases to serve as an Employee or Consultant (as the case
may be), he may, but only within thirty (30) days (or such other period of time
not exceeding three (3) months for an Incentive Stock Option or six (6) months
for a Nonstatutory Stock Option as is determined by the Board, with such
determination made at the time of grant for Incentive Stock Options) from the
date of termination, exercise his Option to the extent that he was entitled to
exercise it at the date of such termination. To the extent that he was not
entitled to exercise the Option at the date of such termination, or if he does
not exercise such Option (which he was entitled to exercise) within the time
specified herein, the Option shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions of
Section 9(b) above, in the event an Employee or Consultant is unable to continue
his employment or consulting relationship (as the case may be) with the Company
as a result of his total and permanent disability (as defined in Section
22(e)(3) of the Code), he may, but only within six (6) months (or such other
period of time not exceeding twelve (12) months as is determined by the Board,
with such determination made at the time of grant for Incentive Stock Options)
from the date of termination, exercise his Option to the extent he was entitled
to exercise it at the date of such termination. To the extent that he was not
entitled to exercise the Option at the date of termination, or if he does not
exercise such Option (which he was entitled to exercise) within the time
specified herein, the Option shall terminate.
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(d) Death of Optionee. In the event of the death of an
Optionee:
(i) during the term of the Option who is at the time
of his death an Employee or Consultant of the Company and who
shall have been in Continuous Status as an Employee or
Consultant since the date of grant of the Option, the Option
may be exercised, at any time within six (6) months following
the date of death, by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or
inheritance, but only to the extent of the right to exercise
that would have accrued had the Optionee continued living and
remained in Continuous Status as an Employee or Consultant six
(6) months after the date of death; or
(ii) within thirty (30) days (or such other period of
time not exceeding three (3) months as is determined by the
Board, with such determination made at the time of grant for
Incentive Stock Options) after the termination of Continuous
Status as an Employee or Consultant, the Option may be
exercised, at any time within six (6) months following the
date of death, by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or
inheritance, but only to the extent of the right to exercise
that had accrued at the date of termination.
10. Non-Transferability of Options. The Option may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution and may be exercised,
during the lifetime of the Optionee, only by the Optionee.
11. Adjustments Upon Changes in Capitalization or Merger. Subject to
any required action by the shareholders of the Company, the number of shares of
Common Stock covered by each outstanding Option, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of
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<PAGE> 9
stock of any class, shall affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of shares of Common Stock subject to
an Option.
In the event of the proposed dissolution or liquidation of the Company,
the Option will terminate immediately prior to the consummation of such proposed
action, unless otherwise provided by the Board. The Board may, in the exercise
of its sole discretion in such instances, declare that any Option shall
terminate as of a date fixed by the Board and give each Optionee the right to
exercise his option as to all or any part of the Optioned Stock, including
Shares as to which the Option would not otherwise be exercisable. In the event
of a proposed sale of all or substantially all of the assets of the Company, or
the merger of the Company with or into another corporation, the Option shall be
assumed or an equivalent option shall be substituted by such successor
corporation or a Parent or Subsidiary of such successor corporation, unless the
Board determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, that the Optionee shall have the right to exercise
the Option as to all of the Optioned Stock, including Shares as to which the
Option would not otherwise be exercisable. If the Board makes an option fully
exercisable in lieu of assumption or substitution in the event of a merger or
sale of assets, the Board shall notify the Optionee that the Option shall be
fully exercisable for a period of thirty (30) days from the date of such notice,
and the Option will terminate upon the expiration of such period.
12. Time of Granting Options. The date of grant of an Option shall, for
all purposes, be the date on which the Board makes the determination granting
such Option. Notice of the determination shall be given to each Employee or
Consultant to whom an option is so granted within a reasonable time after the
date of such grant.
13. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may amend or
terminate the Plan from time to time in such respects as the Board may deem
advisable; provided that, the following revisions or amendments shall require
approval of the shareholders of the company in the manner described in Section
17 of the Plan:
(i) any increase in the number of Shares subject to
the Plan, other than in connection with an adjustment under
Section 11 of the Plan;
(ii) any change in the designation of the class of
persons eligible to be granted Options; or
(iii) if the Company has a class of equity security
registered under Section 12 of the Exchange Act at the time of
such revision or amendment, any material increase in the
benefits accruing to participants under the Plan.
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(b) Shareholder Approval. If any amendment requiring
shareholder approval under Section 13(a) of the Plan is made subsequent to the
first registration of any class of equity security by the Company under Section
12 of the Exchange Act, such shareholder approval shall be solicited as
described in Section 17 of the Plan.
(c) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.
14. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may require
the person exercising such option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
15. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.
16. Option Agreement. Options shall be evidenced by written option
agreements in such form as the Board shall approve.
17. Shareholder Approval.
(a) Continuance of the Plan shall be subject to approval by
the shareholders of the Company within twelve (12)
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<PAGE> 11
months before or after the date the Plan is adopted. If such shareholder
approval is obtained at a duly held shareholders' meeting, it must be obtained
by the affirmative vote of the holders of a majority of the outstanding shares
of the Company, or if such shareholder approval is obtained by written consent,
it must be obtained by the unanimous written consent of all shareholders of the
Company; provided, however, that approval at a meeting or by written consent may
be obtained by a lesser degree of shareholder approval if the Board determines,
in its discretion after consultation with the Company's legal counsel, that such
a lesser degree of shareholder approval will comply with all applicable laws and
will not adversely affect the qualification of the Plan under Section 422A of
the Code.
(b) If and in the event that the Company registers any class
of equity securities pursuant to Section 12 of the Exchange Act, any required
approval of the shareholders of the Company obtained after such registration
shall be solicited substantially in accordance with Section 14(a) of the
Exchange Act and the rules and regulations promulgated thereunder.
(c) If any required approval by the shareholders of the Plan
itself or of any amendment thereto is solicited at any time otherwise than in
the manner described in Section 17(b) hereof, then the Company shall, at or
prior to the first annual meeting of shareholders held subsequent to the later
of (1) the first registration of any class of equity securities of the Company
under Section 12 of the Exchange Act or (2) the granting of an Option hereunder
to an officer or director after such registration, do the following:
(i) furnish in writing to the holders entitled to
vote for the Plan substantially the same information which would be required (if
proxies to be voted with respect to approval or disapproval of the Plan or
amendment were then being solicited) by the rules and regulations in effect
under Section 14(a) of the Exchange Act at the time such information is
furnished; and
(ii) file with, or mail for filing to, the Securities
and Exchange commission four copies of the written information referred to in
subsection (i) hereof not later than the date on which such information is first
sent or given to shareholders.
18. Information to Optionees. The Company shall provide to each
Optionee, during the period for which such Optionee has one or more Options
outstanding, copies of all annual reports and other information which are
provided to all shareholders of the Company. The Company shall not be required
to provide such information if the issuance of Options under the Plan is limited
to key employees whose duties in connection with the Company assure their access
to equivalent information.
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