0
<PAGE>
As filed with the Securities and Exchange Commission on October 23, 2000
Registration No. 333-____________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
CIRRUS LOGIC, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 77-0024818
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
4210 SOUTH INDUSTRIAL DRIVE
AUSTIN, TEXAS 78744
(Address of principal executive offices) (Zip Code)
1996 STOCK PLAN
(AMENDED AND RESTATED AS OF SEPTEMBER 28, 2000)
(Full title of the Plan)
DAVID D. FRENCH
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CIRRUS LOGIC, INC.
4210 SOUTH INDUSTRIAL DRIVE
AUSTIN, TEXAS 78744
(Name and address of agent for service)
(512) 445-7222
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum Amount of
Title of Securities Amount to be Offering Price Aggregate Registration
to be Registered Registered(1) per Share(2) Offering Price(2) fee
<S> <C> <C> <C> <C> <C>
1996 Stock Plan
Common Stock,
$0.001 par value 3,500,000 $38.25 133,875,000 $35,343
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the 1996 Stock Plan by reason of any
stock dividend, stock split, recapitalization or other similar transaction
effected without the Registrant's receipt of consideration which results in an
increase in the number of the outstanding shares of Registrant's 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 average of the high and
low selling prices per share of Registrant's Common Stock on October 18, 2000,
as reported by the Nasdaq National Market.
1
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
-------------------------------------------
Cirrus Logic, Inc. (the "Registrant") hereby incorporates by reference into
this Registration Statement the following documents previously filed with the
Securities and Exchange Commission (the "Commission"):
(a) The Registrant's Annual Report on Form 10-K filed with the Commission on
June 23, 2000 for the fiscal year ending March 25, 2000;
(b) The Registrant's Quarterly Report on Form 10-Q filed with the Commission
on August 8, 2000 for the period ending June 24, 2000;
(c) The Registrant's Current Reports on Form 8-K filed with the Commission
on April 7, 2000; May 10, 2000; June 2, 2000; October 4, 2000; and October 23,
2000, respectively; and
(d) The Registrant's Registration Statement on Form 8-A filed with the
Commission on May 1, 1989, in which are 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 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
de-registers 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. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any subsequently filed
document which also is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
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 Certificate of Incorporation limits the liability of
directors to the maximum extent permitted by Delaware law. Delaware law
provides that directors of a corporation shall not be personally liable for
monetary damages for breach of their fiduciary duties as directors, except
liability (i) for any breach of their duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) for unlawful
payments of dividends or unlawful stock repurchases or redemptions, or (iv) for
any transaction from which the director derived an improper personal benefit.
The Registrant's Bylaws provide that the Registrant shall indemnify its
directors and officers and my indemnify its employees and other agents to the
fullest extent permitted by Delaware law. The Registrant's Bylaws also permit
the Registrant to secure insurance on behalf of any officer, director, employee
or other agent for any liability arising out of his or her actions in such
capacity, regardless of whether the Registrant would have the power to indemnify
him or her against such liability under the General Corporation Law of Delaware.
The Registrant currently has secured such insurance on behalf of its officers
and directors.
2
<PAGE>
The Registrant has entered into agreements to indemnify its directors and
officers, in addition to indemnification provided for in the Registrant's
Bylaws. Subject to certain conditions, these agreements, among other things,
indemnify the Registrant's directors and officers for certain expenses
(including attorney's fees), judgments, fines and settlement amounts incurred by
any such person in any action or proceedings, including any action by or in the
right of the Registrant, arising out of such person's services as a director or
officer of the Registrant, any subsidiary of the Registrant or any other company
or enterprise to which the person provides services at the request of the
Registrant.
Item 7. Exemption from Registration Claimed
--------------------------------------
Not Applicable.
Item 8. Exhibits
--------
Exhibit Number Exhibit
--------------- -------
4 Instruments Defining the Rights of Stockholders.
Reference is made to Registrant's Registration
Statement on Form 8-A, together with any
exhibits thereto, which are incorporated herein by
reference pursuant to Item 3(d) to this
Registration Statement.
5 Opinion and consent of Brobeck, Phleger &
Harrison LLP.
23.1 Consent of Ernst & Young LLP, Independent
Auditors.
23.2 Consent of Brobeck, Phleger & Harrison LLP is
contained in Exhibit 5.
24.1 Power of Attorney.
99.1 1996 Stock Plan (Amended and Restated as of
September 28, 2000).
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 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 clauses 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 1996
Stock 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 or otherwise,
the Registrant has been advised that, in the opinion of the Commission, 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.
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 Austin, State of Texas on this 23rd day of
October, 2000.
CIRRUS LOGIC, INC.
By: /s/ David D. French
-----------------------
David D. French
President and Chief Executive Officer
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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
-------------------------------------------------------- ----------------
<C> <S> <C> <C>
/s/ David D. French President, Chief Executive Officer and Director
-------------------------
David D. French (Principal Executive Officer) October 23, 2000
/s/ Robert W. Fay Vice President, Chief Financial Officer, and Secretary
-------------------------
Robert W. Fay (Principal Financial and Accounting Officer) October 23, 2000
-------------------------
Michael Hackworth Chairman of the Board October 23, 2000
-------------------------
Suhas S. Patil Chairman Emeritus and Director October 23, 2000
/s/ D. James Guzy
-------------------------
* D. James Guzy Director October 23, 2000
/s/ Dr. Harold J. Raveche
-------------------------
* Dr. Harold J. Raveche Director October 23, 2000
/s/ Walden C. Rhines
-------------------------
* Walden C. Rhines Director October 23, 2000
/s/ Robert H. Smith
-------------------------
* Robert H. Smith Director October 23, 2000
/s/ Alfred S. Teo
-------------------------
* Alfred S. Teo Director October 23, 2000
</TABLE>
* This registration statement has been signed on behalf of the above officers
and directors by David D. French, President, Chief Executive Officer and
Director of the Company And Robert W. Fay as attorney-in-fact pursuant to a
power of attorney filed as Exhibit 24.1 to this registration statement.
Dated: October 23, 2000 By: /s/ David D. French
-----------------------------------
David D. French, Attorney-in-Fact
By: /s/ Robert W. Fay
---------------------------------
Robert W. Fay, Attorney-in-Fact
4
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
CIRRUS LOGIC, INC.
5
<PAGE>
EXHIBIT INDEX
Exhibit Number Exhibit
--------------- -------
4 Instruments Defining the Rights of Stockholders.
Reference is made to Registrant's Registration
Statement on Form 8-A, together with any
exhibits thereto, which are incorporated herein by
reference pursuant to Item 3(d) to this
Registration Statement.
5 Opinion and consent of Brobeck, Phleger &
Harrison LLP.
23.1 Consent of Ernst & Young LLP, Independent
Auditors.
23.2 Consent of Brobeck, Phleger & Harrison LLP is
contained in Exhibit 5.
24.1 Power of Attorney.
99.1 1996 Stock Plan (Amended and Restated as of
September 28, 2000).
6
<PAGE>
EXHIBIT 5
OPINION AND CONSENT OF BROBECK, PHLEGER & HARRISON LLP
October 23, 2000
Cirrus Logic, Inc.
4210 South Industrial Drive
Austin, Texas 78744
Re: Cirrus Logic, Inc. - Registration Statement for Offering of an Aggregate
of 3,500,000 Shares of Common Stock
Dear Ladies and Gentlemen:
We have acted as counsel to Cirrus Logic, Inc., a Delaware corporation (the
"Company"), in connection with the registration on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended, of an additional
3,500,000 shares of common stock (the "Shares") authorized for issuance under
the Company's 1996 Stock Plan (Amended and Restated as of September 23, 2000)
(the "Plan").
This opinion is being furnished in accordance with the requirements of Item 8 of
Form S-8 and Item 601(b)(5)(i) of Regulation S-K.
We have reviewed the Company's charter documents and the corporate proceedings
taken by the Company in connection with the reservation of the Shares under the
Plan. Based on such review, we are of the opinion that, if, as and when the
Shares have been issued and sold (and the consideration therefor received)
pursuant to the provisions of option agreements duly authorized under the Plan
and in accordance with the Registration Statement, such Shares will be duly
authorized, legally issued, fully paid and nonassessable.
We consent to the filing of this opinion letter as Exhibit 5 to the Registration
Statement.
This opinion letter is rendered as of the date first written above and we
disclaim any obligation to advise you of facts, circumstances, events or
developments which hereafter may be brought to our attention and which may
alter, affect or modify the opinion expressed herein. Our opinion is expressly
limited to the matters set forth above and we render no opinion, whether by
implication or otherwise, as to any other matters relating to the Company, the
Plan or the Shares.
Very truly yours,
BROBECK, PHLEGER & HARRISON LLP
7
<PAGE>
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the 1996 Stock Plan (Amended and Restated as of September 28,
2000) of Cirrus Logic, Inc. of our report dated April 25, 2000, except Note 18,
as to which the date is May 31, 2000, with respect to the consolidated financial
statements and schedule of Cirrus Logic, Inc. included in its Annual Report
(Form 10-K) for the year ended March 25, 2000, filed with the Securities and
Exchange Commission.
/s/ Ernst & Young LLP
Austin, Texas
October 20, 2000
8
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints David D. French and Robert W. Fay,
jointly and severally, his attorney-in-fact, with the power of substitution, for
him in any and all capacities, to sign the documents listed below and any
amendments to those documents, and to file the same, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorney-in-fact, or
his substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, these Registration
Statements have been signed by the following persons in the capacities indicated
on October 18, 2000.
Post Effective amendment to Registration Statement Number 333-23553 on Form S-3:
To withdraw the registration statement for the shares issued to bondholders as
the registration rights given in the agreement have expired
Post Effective amendment to Registration Statement Number 333-86561 on Form S-3:
To withdraw the registration statement for the shares issued to AudioLogic, Inc.
shareholders as the registration rights given in the acquisition agreement have
expired
Post Effective amendment to Registration Statement Number 333-32964 on Form S-3:
To withdraw the registration statement for the shares issued to IBM as the
registration rights given in the restructuring agreement have expired
Registration Statement on Form S-8: To file past amendments to the 1989 Employee
Stock Purchase Plan with the Securities Exchange Commission
Registration Statement on Form S-8: To increase the number shares authorized for
issuance under the 1996 Stock Plan by 3,500,000
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------------------- -----------------------------------------------
<S> <C>
---------------------
Michael L. Hackworth Chairman of the Board and Director
---------------------
Suhas S. Patil Chairman Emeritus and Director
/s/ David D. French
---------------------
David D. French President, Chief Executive Officer and Director
/s/ Walden C. Rhines
---------------------
Walden C. Rhines Director
/s/ Robert H. Smith
---------------------
Robert H. Smith Director
/s/ Alfred S. Teo
---------------------
Alfred S. Teo Director
/s/ D. James Guzy
---------------------
D. James Guzy Director
/s/ Harold J. Raveche
---------------------
Harold J. Raveche Director
</TABLE>
9
<PAGE>
EXHIBIT 99.1
1996 STOCK PLAN
(AMENDED AND RESTATED AS OF SEPTEMBER 28, 2000)
II. PURPOSES OF THE PLAN. THE PURPOSES OF THIS STOCK PLAN ARE:
-----------------------
- to attract and retain the best available personnel for positions of
substantial responsibility,
- to provide additional incentive to Employees and Consultants, and
- to promote the success of the Company's business.
Options granted under the Plan may be Incentive Stock Options or Nonstatutory
Stock Options, as determined by the Administrator at the time of grant. Stock
Purchase Rights may also be granted under the Plan.
III. DEFINITIONS. AS USED HEREIN, THE FOLLOWING DEFINITIONS SHALL APPLY:
-----------
(a) "Administrator" means the Board or any of its Committees as shall be
-------------
administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the legal requirements relating to the
----------------
administration of stock option plans under U.S. state corporate laws,
U.S. federal and state securities laws, the Code and the applicable
laws of any foreign country or jurisdiction where Options or Stock
Purchase Rights will be or are being granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
-----
(d) "Code" means the Internal Revenue Code of 1986, as amended.
----
(e) "Committee" means a Committee appointed by the Board in accordance with
---------
Section 4 of the Plan.
(f) "Common Stock" means the Common Stock of the Company.
-------------
(g) "Company" means Cirrus Logic, Inc., a Delaware corporation.
-------
(h) "Consultant" means any person, including an advisor, engaged by the
----------
Company or a Parent or Subsidiary to render services and who is
compensated for such services. The term "Consultant" shall not
include Directors who are paid only a director's fee by the Company
or who are not compensated by the Company for their services as
Directors.
(i) "Continuous Status as an Employee or Consultant" means that the
----------------------------------------------------
employment or consulting relationship with the Company, any Parent,
or Subsidiary, is not interrupted or terminated. Continuous Status as
an Employee or Consultant shall not be considered interrupted in the
case of (i) any leave of absence approved by the Company or (ii)
transfers between locations of the Company or between the Company, its
Parent, any Subsidiary, or any successor. A leave of absence approved
by the Company shall include sick leave, military leave, or any other
personal leave approved by an authorized representative of the Company
For purposes of Incentive Stock Options, no such leave may exceed
ninety days, unless reemployment upon expiration of such leave is
guaranteed by statute or contract. If reemployment upon expiration
of a leave of absence approved by the Company is not so guaranteed, on
the 181st day of such leave any Incentive Stock Option held by the
Optionee shall cease to be treated as an Incentive Stock Option and
shall be treated for tax purposes as a Nonstatutory Stock Option.
(j) "Director" means a member of the Board.
--------
(k) "Disability" means total and permanent disability as defined in Section
----------
22(e)(3) of the Code.
(l) "Employee" means any person, including Officers and Directors, employed
--------
by the Company or any Parent or Subsidiary of the Company. Neither
service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.
(m) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
-------------
(n) "Fair Market Value" means, as of any date, the value of Common Stock
-------------------
determined as follows:
1. If the Common Stock is listed on any established stock exchange or a
national market system, including without limitation the Nasdaq National Market
or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value
shall be the closing sales price for such stock (or the closing bid, if no sales
were reported) as quoted on such exchange or system for the last market trading
day prior to the time of determination, as reported in The Wall Street Journal
or such other source as the Administrator deems reliable;
2. If the Common Stock is regularly quoted by a recognized securities dealer
but selling prices are not reported, the Fair Market Value of a Share of Common
Stock shall be the mean between the high bid and low asked prices for the Common
Stock on the last market trading day prior to the day of determination, as
reported in The Wall Street Journal or such other source as the Administrator
deems reliable;
3. In the absence of an established market for the Common Stock, the Fair
Market Value shall be determined in good faith by the Administrator.
(o) "Incentive Stock Option" means an Option intended to qualify as an
------------------------
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(p) "Nonstatutory Stock Option" means an Option not intended to qualify as
---------------------------
an Incentive Stock Option.
(q) "Notice of Grant" means a written notice evidencing certain terms and
-----------------
conditions of an individual Option or Stock Purchase Right grant. The Notice of
Grant is part of the Option Agreement.
(r) "Officer" means a person who is an officer of the Company within the
-------
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(s) "Option" means a stock option granted pursuant to the Plan.
------
(t) "Option Agreement" means a written agreement between the Company and an
-----------------
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.
(u) "Optioned Stock" means the Common Stock subject to an Option or Stock
---------------
Purchase Right.
(v) "Optionee" means an Employee or Consultant who holds an outstanding
--------
Option or Stock Purchase Right.
(w) "Parent" means a "parent corporation," whether now or hereafter
------
existing, as defined in Section 424(e) of the Code.
(x) "Plan" means this 1996 Stock Option Plan.
----
(y) "Restricted Stock" means shares of Common Stock acquired pursuant to a
-----------------
grant of Stock Purchase Rights under Section 11 below.
(z) "Restricted Stock Purchase Agreement" means a written agreement between
------------------------------------
the Company and the Optionee evidencing the terms and restrictions applying to
stock purchased under a Stock Purchase Right. The Restricted Stock Purchase
Agreement is subject to the terms and conditions of the Plan and the Notice of
Grant.
(aa) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor to
-----------
Rule 16b-3, as in effect when discretion is being exercised with respect to the
Plan.
(bb) "Section 16(b)" means Section 16(b) of the Securities Exchange Act of
--------------
1934, as amended.
(cc) "Share" means a share of the Common Stock, as adjusted in accordance
-----
with Section 13 of the Plan.
(dd) "Stock Purchase Right" means the right to purchase Common Stock
----------------------
pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.
(ee) "Subsidiary" means a "subsidiary corporation," whether now or hereafter
----------
existing, as defined in Section 424(f) of the Code.
IV. STOCK SUBJECT TO THE PLAN. SUBJECT TO THE PROVISIONS OF SECTION 13 OF
---------------------------
THE PLAN, THE MAXIMUM AGGREGATE NUMBER OF SHARES WHICH MAY BE OPTIONED AND SOLD
UNDER THE PLAN IS 12,000,000 SHARES. SUCH AUTHORIZED SHARE RESERVE INCLUDES THE
2,500,000 SHARES INITIALLY RESERVED UNDER THE PLAN AUTHORIZED BY THE BOARD MAY
21, 1996 AND APPROVED BY THE STOCKHOLDERS AUGUST 1, 1996, PLUS (I) AN INCREASE
OF AN ADDITIONAL 2,000,000 SHARES, OF WHICH 1,000,000 SHARES WERE AUTHORIZED BY
THE BOARD MARCH 19, 1997 AND 1,000,000 SHARES WERE AUTHORIZED BY THE BOARD MAY
28, 1997, AND WHICH INCREASES WERE APPROVED BY THE STOCKHOLDERS JULY 31, 1997
(THE "1997 INCREASE"), (III) AN INCREASE OF AN ADDITIONAL 2,000,000 SHARES
AUTHORIZED BY THE BOARD APRIL 1, 1998 AND APPROVED BY THE STOCKHOLDERS JULY 21,
1998 (THE "1998 INCREASE"), (IV) AN INCREASE OF AN ADDITIONAL 2,000,000 SHARES
AUTHORIZED BY THE BOARD APRIL 1, 1999 AND APPROVED BY THE STOCKHOLDERS JULY 29,
1999 (THE "1999 INCREASE"), AND (V) AN INCREASE OF AN ADDITIONAL 3,500,000
SHARES AUTHORIZED BY THE BOARD JULY 27, 2000 AND APPROVED BY THE STOCKHOLDERS
SEPTEMBER 28, 2000 (THE "2000 INCREASE"). THE SHARES MAY BE AUTHORIZED, BUT
UNISSUED, OR REACQUIRED COMMON STOCK.
If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, the unpurchased Shares which were subject
thereto shall become available for future grant or sale under the Plan (unless
the Plan has terminated); provided, however, that Shares that have actually been
issued under the Plan, whether upon exercise of an Option or Stock Purchase
Right, shall not be returned to the Plan and shall not become available for
future distribution under the Plan, except that if Shares of Restricted Stock
are repurchased by the Company at their original purchase price, and the
original purchaser of such Shares did not receive any benefits of ownership of
such Shares, such Shares shall become available for future grant under the Plan.
For purposes of the preceding sentence, voting rights shall not be considered a
benefit of Share ownership.
V. ADMINISTRATION OF THE PLAN.
-----------------------------
(a) Procedure.
---------
1. Multiple Administrative Bodies. If permitted by Rule 16b-3, the
--------------------------------
Plan may be administered by different bodies with respect to Directors, Officers
who are not Directors, and Employees who are neither Directors nor Officers.
2. Administration With Respect to Directors and Officers Subject to Section
-------------------------------------------------------------------------
16(b). With respect to Option or Stock Purchase Right grants made to Employees
-----
who are also Officers or Directors subject to Section 16(b) of the Exchange Act,
the Plan shall be administered by (A) the Board, if the Board may administer the
Plan in a manner complying with the rules under Rule 16b-3 relating to the
disinterested administration of employee benefit plans under which Section 16(b)
exempt discretionary grants and awards of equity securities are to be made, or
(B) a committee designated by the Board to administer the Plan, which committee
shall be constituted to comply with the rules under Rule 16b-3 relating to the
disinterested administration of employee benefit plans under which Section 16(b)
exempt discretionary grants and awards of equity securities are to be made.
Once appointed, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board. From time to time the Board may
increase the size of the Committee and appoint additional members, remove
members (with or without cause) and substitute new members, fill vacancies
(however caused), and remove all members of the Committee and thereafter
directly administer the Plan, all to the extent permitted by the rules under
Rule 16b-3 relating to the disinterested administration of employee benefit
plans under which Section 16(b) exempt discretionary grants and awards of equity
securities are to be made.
3. Administration With Respect to Other Persons. With respect to Option or
---------------------------------------------
Stock Purchase Right grants made to Employees or Consultants who are neither
Directors nor Officers of the Company, the Plan shall be administered by (A) the
Board or (B) a committee designated by the Board, which committee shall be
constituted to satisfy Applicable Laws. Once appointed, such Committee shall
serve in its designated capacity until otherwise directed by the Board. The
Board may increase the size of the Committee and appoint additional members,
remove members (with or without cause) and substitute new members, fill
vacancies (however caused), and remove all members of the Committee and
thereafter directly administer the Plan, all to the extent permitted by
Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the Plan, and
---------------------------
in the case of a Committee, subject to the specific duties delegated by the
Board to such Committee, the Administrator shall have the authority, in its
discretion:
1. to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(n) of the Plan;
2. to select the Consultants and Employees to whom Options and Stock
Purchase Rights may be granted hereunder;
3. to determine whether and to what extent Options and Stock Purchase Rights
or any combination thereof, are granted hereunder;
4. to determine the number of shares of Common Stock to be covered by each
Option and Stock Purchase Right granted hereunder;
5. to approve forms of agreement for use under the Plan;
6. to determine the terms and conditions, not inconsistent with the terms of
the Plan, of any award granted hereunder. Such terms and conditions include,
but are not limited to, the exercise price, the time or times when Options or
Stock Purchase Rights may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Option or Stock Purchase Right or
the shares of Common Stock relating thereto, based in each case on such factors
as the Administrator, in its sole discretion, shall determine;
7. to construe and interpret the terms of the Plan and awards granted
pursuant to the Plan;
8. to prescribe, amend and rescind rules and regulations relating to the
Plan, including rules and regulations relating to sub-plans established for the
purpose of qualifying for preferred tax treatment under foreign tax laws;
9. to modify or amend each Option or Stock Purchase Right (subject to
Section 15(c) of the Plan), including the discretionary authority to extend the
post-termination exercisability period of Options longer than is otherwise
provided for in the Plan;
10. to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Option or Stock Purchase Right
previously granted by the Administrator;
11. to determine the terms and restrictions applicable to Options and Stock
Purchase Rights and any Restricted Stock; and
12. to make all other determinations deemed necessary or advisable for
administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's decisions,
-------------------------------------
determinations and interpretations shall be final and binding on all Optionees
and any other holders of Options or Stock Purchase Rights.
VI. ELIGIBILITY. NONSTATUTORY STOCK OPTIONS AND STOCK PURCHASE RIGHTS MAY
-----------
BE GRANTED TO EMPLOYEES AND CONSULTANTS. INCENTIVE STOCK OPTIONS MAY BE GRANTED
ONLY TO EMPLOYEES. IF OTHERWISE ELIGIBLE, AN EMPLOYEE OR CONSULTANT WHO HAS
BEEN GRANTED AN OPTION OR STOCK PURCHASE RIGHT MAY BE GRANTED ADDITIONAL OPTIONS
OR STOCK PURCHASE RIGHTS.
VII. LIMITATIONS.
-----------
(a) Each Option shall be designated in the written option agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options.
(b) Neither the Plan nor any Option or Stock Purchase Right shall confer
upon an Optionee any right with respect to continuing the Optionee's employment
or consulting relationship with the Company, nor shall they interfere in any way
with the Optionee's right or the Company's right to terminate such employment or
consulting relationship at any time, with or without cause.
(c) The following limitations shall apply to grants of Options to Employees:
1. No Employee shall be granted, in any fiscal year of the Company,
Options to purchase more than 400,000 Shares.
2. In connection with his or her initial employment, an Employee may be
granted Options to purchase up to an additional 800,000 Shares which shall not
count against the limit set forth in subsection (i) above.
3. The foregoing limitations shall be adjusted proportionately in connection
with any change in the Company's capitalization as described in Section 13.
4. If an Option is cancelled in the same fiscal year of the Company in which
it was granted (other than in connection with a transaction described in Section
13), the cancelled Option will be counted against the limits set forth in
subsections (i) and (ii) above.
VIII. TERM OF PLAN. SUBJECT TO SECTION 19 OF THE PLAN, THE PLAN SHALL
--------------
BECOME EFFECTIVE UPON THE EARLIER TO OCCUR OF ITS ADOPTION BY THE BOARD OR ITS
APPROVAL BY THE STOCKHOLDERS OF THE COMPANY AS DESCRIBED IN SECTION 19 OF THE
PLAN. IT SHALL CONTINUE IN EFFECT FOR A TERM OF TEN (10) YEARS UNLESS
TERMINATED EARLIER UNDER SECTION 15 OF THE PLAN.
IX. TERM OF OPTION. THE TERM OF EACH OPTION SHALL BE STATED IN THE NOTICE
----------------
OF GRANT; PROVIDED, HOWEVER, THAT IN THE CASE OF AN INCENTIVE STOCK OPTION, THE
--------
TERM SHALL BE TEN (10) YEARS FROM THE DATE OF GRANT OR SUCH SHORTER TERM AS MAY
BE PROVIDED IN THE NOTICE OF GRANT.
X. OPTION EXERCISE PRICE AND CONSIDERATION.
-------------------------------------------
(a) Exercise Price. The per share exercise price for the Shares to be
---------------
issued pursuant to exercise of an Option shall be no less than 100% of the Fair
Market Value per Share on the date of grant.
(b) Waiting Period and Exercise Dates. At the time an Option is granted,
------------------------------------
the Administrator shall fix the period within which the Option may be exercised
and shall determine any conditions which must be satisfied before the Option may
be exercised. In so doing, the Administrator may specify that an Option may not
be exercised until either the completion of a service period or the achievement
of performance criteria with respect to the Company or the Optionee.
(c) Form of Consideration. The Administrator shall determine the acceptable
---------------------
form of consideration for exercising an Option, including the method of payment.
In the case of an Incentive Stock Option, the Administrator shall determine the
acceptable form of consideration at the time of grant. Such consideration may
consist entirely of:
1. cash;
2. check;
3. promissory note;
4. other Shares which (A) in the case of Shares acquired upon exercise of an
option, have been owned by the Optionee for more than six months on the date of
surrender, and (B) have 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;
5. delivery of a properly executed exercise notice together with such other
documentation as the Administrator and the broker, if applicable, shall require
to effect an exercise of the Option and delivery to the Company of the sale or
loan proceeds required to pay the exercise price;
6. a reduction in the amount of any Company liability to the Optionee,
including any liability attributable to the Optionee's participation in any
Company-sponsored deferred compensation program or arrangement;
7. any combination of the foregoing methods of payment; or
8. such other consideration and method of payment for the issuance of Shares
to the extent permitted by Applicable Laws.
XI. EXERCISE OF OPTION.
--------------------
(a) Procedure for Exercise; Rights as a Shareholder. Any Option granted
---------------------------------------------------
hereunder shall be exercisable according to the terms of the Plan and at such
times and under such conditions as determined by the Administrator and set forth
in the Option Agreement.
1. An Option may not be exercised for a fraction of a Share.
2. An Option shall be deemed exercised when the Company receives: (i)
written notice of exercise (in accordance with the Option Agreement) from the
person entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan. Shares issued upon exercise of
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the stock
certificate evidencing such Shares is issued (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company), 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. The Company shall issue (or cause to be issued) such
stock certificate promptly after the Option is exercised. 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 13 of the
Plan.
3. Exercising an Option in any manner shall decrease the number of Shares
thereafter 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 Employment or Consulting Relationship. Upon termination
-----------------------------------------------------
of an Optionee's Continuous Status as an Employee or Consultant, other than upon
the Optionee's death or Disability, the Optionee may exercise his or her Option
within such period of time as is specified in the Notice of Grant to the extent
that he or she is entitled to exercise it on the date of termination (but in no
event later than the expiration of the term of such Option as set forth in the
Notice of Grant). In the absence of a specified time in the Notice of Grant,
the Option shall remain exercisable for three (3) months following the
Optionee's termination. Notwithstanding the above, in the event the Company is
involved in a merger as a result of which Optionees are precluded from selling
shares of the acquiring company until the publication of financial results
covering post-merger combined operations ("Pooling Restrictions"), options held
by Optionees subject to such Pooling Restrictions (including options that are
assumed or substituted pursuant to Section 13(c)) shall remain exercisable until
five (5) business days after the expiration of such Pooling Restrictions (but
not beyond the original term of the Option) notwithstanding an earlier
termination of such Optionee's Continuous Status as an Employee or Consultant.
If, on the date of termination, the Optionee is not entitled to exercise his or
her entire Option, the Shares covered by the unexercisable portion of the Option
shall revert to the Plan. If, after termination, the Optionee does not exercise
his or her Option within the time specified by the Administrator, the Option
shall terminate, and the Shares covered by such Option shall revert to the Plan.
Notwithstanding the above, in the event of an Optionee's change in status
from Consultant to Employee or Employee to Consultant, the Optionee's Continuous
Status as an Employee or Consultant shall not automatically terminate solely as
a result of such change in status. In such event, an Incentive Stock Option
held by the Optionee shall cease to be treated as an Incentive Stock Option and
shall be treated for tax purposes as a Nonstatutory Stock Option three months
and one day following such change of status.
(c) Disability of Optionee. Upon termination of an Optionee's Continuous
------------------------
Status as an Employee or Consultant as a result of the Optionee's Disability,
the Optionee may exercise his or her Option at any time within twelve (12)
months (or such other period of time as is determined by the Administrator) from
the date of termination, but only to the extent that the Optionee is entitled to
exercise it on the date of termination (and in no event later than the
expiration of the term of the Option as set forth in the Notice of Grant). If,
on the date of termination, the Optionee is not entitled to exercise his or her
entire Option, the Shares covered by the unexercisable portion of the Option
shall revert to the Plan. If, after termination, the Optionee does not exercise
his or her Option within the time specified herein, the Option shall terminate,
and the Shares covered by such Option shall revert to the Plan.
(d) Death of Optionee. In the event of the death of an Optionee, the Option
-----------------
may be exercised at any time within twelve (12) months (or such other period of
time as is determined by the Administrator) following the date of death (but in
no event later than the expiration of the term of such Option as set forth in
the Notice of Grant), 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
that the Optionee was entitled to exercise the Option at the date of death. If,
at the time of death, the Optionee was not entitled to exercise his or her
entire Option, the Shares covered by the unexercisable portion of the Option
shall immediately revert to the Plan. If, after death, the Optionee's estate or
a person who acquired the right to exercise the Option by bequest or inheritance
does not exercise the Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(e) Rule 16b-3. Options granted to individuals subject to Section 16 of the
----------
Exchange Act ("Insiders") must comply with the applicable provisions of Rule
16b-3 and shall contain such additional conditions or restrictions as may be
required thereunder to qualify for the maximum exemption from Section 16 of the
Exchange Act with respect to Plan transactions.
XII. STOCK PURCHASE RIGHTS.
-----------------------
(a) Rights to Purchase. Stock Purchase Rights may be issued either alone,
--------------------
in addition to, or in tandem with other awards granted under the Plan and/or
cash awards made outside of the Plan. After the Administrator determines that
it will offer Stock Purchase Rights under the Plan, it shall advise the offeree
in writing, by means of a Notice of Grant, of the terms, conditions and
restrictions related to the offer, including the number of Shares that the
offeree shall be entitled to purchase, the price to be paid, and the time within
which the offeree must accept such offer, which shall in no event exceed ninety
(90) days from the date upon which the Administrator made the determination to
grant the Stock Purchase Right. The offer shall be accepted by execution of a
Restricted Stock Purchase Agreement in the form determined by the Administrator.
The aggregate number of Shares subject to grants of Stock Purchase Rights shall
not exceed ten percent (10%) of the Shares subject to the Plan pursuant to
Section 3.
(b) Repurchase Option. Unless the Administrator determines otherwise, the
------------------
Restricted Stock Purchase Agreement shall grant the Company a repurchase option
exercisable upon the voluntary or involuntary termination of the purchaser's
employment with the Company for any reason (including death or Disability);
provided that the minimum period of employment over which any such Company
repurchase option lapses shall not be less than three (3) years. The purchase
price for Shares repurchased pursuant to the Restricted Stock purchase agreement
shall be the original price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The
repurchase option shall lapse at a rate determined by the Administrator.
(c) Rule 16b-3. Stock Purchase Rights granted to Insiders, and Shares
-----------
purchased by Insiders in connection with Stock Purchase Rights, shall be subject
to any restrictions applicable thereto in compliance with Rule 16b-3. An
Insider may only purchase Shares pursuant to the grant of a Stock Purchase
Right, and may only sell Shares purchased pursuant to the grant of a Stock
Purchase Right, during such time or times as are permitted by Rule 16b-3.
(d) Other Provisions. The Restricted Stock Purchase Agreement shall contain
----------------
such other terms, provisions and conditions not inconsistent with the Plan as
may be determined by the Administrator in its sole discretion. In addition, the
provisions of Restricted Stock Purchase Agreements need not be the same with
respect to each purchaser.
(e) Rights as a Shareholder. Once the Stock Purchase Right is exercised,
--------------------------
the purchaser shall have the rights equivalent to those of a shareholder, and
shall be a shareholder when his or her purchase is entered upon the records of
the duly authorized transfer agent of the Company. No adjustment will be made
for a dividend or other right for which the record date is prior to the date the
Stock Purchase Right is exercised, except as provided in Section 13 of the Plan.
(f) Issuance of Shares. As soon as possible after full payment of the
--------------------
purchase price, the Shares purchased shall be duly issued; provided, however,
that the Administrator may require that the purchaser make adequate provision
for any Federal and State withholding obligations of the Company as a condition
to such purchase.
(g) Shares Available Under the Plan. Exercise of a Stock Purchase Right in
--------------------------------
any manner shall result in a decrease in the number of Shares that thereafter
shall be available for reissuance under the Plan.
XIII. NON-TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS. AN OPTION
----------------------------------------------------------
OR STOCK PURCHASE RIGHT 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.
XIV. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR
-----------------------------------------------------------------------
ASSET SALE.
-------
(a) Changes in Capitalization. Subject to any required action by the
---------------------------
stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, 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 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 or Stock
Purchase Right.
(b) Dissolution or Liquidation. In the event of the proposed dissolution
----------------------------
or liquidation of the Company, the Administrator shall notify each Optionee as
soon as practicable prior to the effective date of such proposed transaction.
The Administrator in its discretion may provide for an Optionee to have the
right to exercise his or her Option or Stock Purchase Right until ten (10) days
prior to such transaction as to all of the Optioned Stock covered thereby,
including Shares as to which the Option would not otherwise be exercisable. In
addition, the Administrator may provide that any Company repurchase option
applicable to any Shares purchased upon exercise of an Option or Stock Purchase
Right shall lapse as to all such Shares, provided the proposed dissolution or
liquidation takes place at the time and in the manner contemplated. To the
extent it has not been previously exercised, an Option or Stock Purchase Right
will terminate immediately prior to the consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the Company with or
----------------------
into another corporation, or the sale of substantially all of the assets of the
Company, each outstanding Option and Stock Purchase Right shall be assumed or an
equivalent option or right substituted by the successor corporation or a Parent
or Subsidiary of the successor corporation, or in the event that the successor
corporation refuses to assume or substitute for the Option or Stock Purchase
Right, the Optionee shall have the right to exercise the Option or Stock
Purchase Right as to all of the Optioned Stock, including Shares as to which it
would not otherwise be exercisable. If an Option or Stock Purchase Right is
exercisable in lieu of assumption or substitution in the event of a merger or
sale of assets, the Administrator shall notify the Optionee that the Option or
Stock Purchase Right shall be fully exercisable for a period of fifteen (15)
days from the date of such notice, and the Option or Stock Purchase Right shall
terminate upon the expiration of such period. For the purposes of this
paragraph, the Option or Stock Purchase Right shall be considered assumed if,
following the merger or sale of assets, the option or right confers the right to
purchase or receive, for each Share of Optioned Stock subject to the Option or
Stock Purchase Right immediately prior to the merger or sale of assets, the
consideration (whether stock, cash, or other securities or property) received in
the merger or sale of assets by holders of Common Stock for each Share held on
the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received
in the merger or sale of assets was not solely common stock of the successor
corporation or its Parent, the Administrator may, with the consent of the
successor corporation, provide for the consideration to be received upon the
exercise of the Option or Stock Purchase Right, for each Share of Optioned Stock
subject to the Option or Stock Purchase Right, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.
XV. DATE OF GRANT. THE DATE OF GRANT OF AN OPTION OR STOCK PURCHASE RIGHT
---------------
SHALL BE, FOR ALL PURPOSES, THE DATE ON WHICH THE ADMINISTRATOR MAKES THE
DETERMINATION GRANTING SUCH OPTION OR STOCK PURCHASE RIGHT, OR SUCH OTHER LATER
DATE AS IS DETERMINED BY THE ADMINISTRATOR. NOTICE OF THE DETERMINATION SHALL
BE PROVIDED TO EACH OPTIONEE WITHIN A REASONABLE TIME AFTER THE DATE OF SUCH
GRANT.
XVI. AMENDMENT AND TERMINATION OF THE PLAN.
------------------------------------------
(a) Amendment and Termination. The Board may at any time amend, alter,
---------------------------
suspend or terminate the Plan.
(b) Shareholder Approval. The Company shall obtain shareholder approval of
---------------------
any Plan amendment to the extent necessary and desirable to comply with Rule
16b-3 or with Sections 162(m) or 422 of the Code (or any successor rule or
statute or other applicable law, rule or regulation, including the requirements
of any exchange or quotation system on which the Common Stock is listed or
quoted). Such shareholder approval, if required, shall be obtained in such a
manner and to such a degree as is required by the applicable law, rule or
regulation.
(c) Effect of Amendment or Termination. No amendment, alteration,
--------------------------------------
suspension or termination of the Plan shall impair the rights of any Optionee,
-
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
(d) Plan Amendments. The Plan was amended in order to approve the 1997
----------------
Increase, the 1998 Increase, the 1999 Increase and the 2000 Increase,
respectively, and this restatement incorporates such amendments.
XVII. CONDITIONS UPON ISSUANCE OF SHARES.
--------------------------------------
(a) Legal Compliance. Shares shall not be issued pursuant to the exercise
-----------------
of an Option or Stock Purchase Right unless the exercise of such Option or Stock
Purchase Right and the issuance and delivery of such Shares 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, Applicable Laws, and the requirements of any stock exchange or
quotation system upon which the Shares may then be listed or quoted, and shall
be further subject to the approval of counsel for the Company with respect to
such compliance.
(b) Investment Representations. As a condition to the exercise of an Option
--------------------------
or Stock Purchase Right, the Company may require the person exercising such
Option or Stock Purchase Right 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.
XVIII. LIABILITY OF COMPANY.
----------------------
(a) Inability to Obtain Authority. 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.
(b) Grants Exceeding Allotted Shares. If the Optioned Stock covered by an
----------------------------------
Option or Stock Purchase Right exceeds, as of the date of grant, the number of
Shares which may be issued under the Plan without additional shareholder
approval, such Option or Stock Purchase Right shall be void with respect to such
excess Optioned Stock, unless shareholder approval of an amendment sufficiently
increasing the number of Shares subject to the Plan is timely obtained in
accordance with Section 15(b) of the Plan.
XIX. 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.
XX. SHAREHOLDER APPROVAL. CONTINUANCE OF THE PLAN SHALL BE SUBJECT TO
---------------------
APPROVAL BY THE STOCKHOLDERS OF THE COMPANY WITHIN TWELVE (12) MONTHS BEFORE OR
AFTER THE DATE THE PLAN IS ADOPTED. SUCH SHAREHOLDER APPROVAL SHALL BE OBTAINED
IN THE MANNER AND TO THE DEGREE REQUIRED UNDER APPLICABLE FEDERAL AND STATE LAW.
