<PAGE>
As filed with the Securities and Exchange Commission on_________________, 1995.
Registration No.______________
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
__________________________
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
__________________________
SILICON GRAPHICS, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-2789662
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
2011 North Shoreline Boulevard, Mountain View, California 94043-1389
(Address of principal executive offices and zip code)
__________________________
Alias Research Inc.
1988 Employee Share Ownership Plan, 1989 Employee Share Ownership Plan
1990 Employee Share Ownership Plan, 1994 Stock Plan
(Full title of the plans)
__________________________
WILLIAM M. KELLY
Vice President, General Counsel and Secretary
SILICON GRAPHICS, INC.
2011 North Shoreline Boulevard
Mountain View, California 94043-1389
(415) 960-1980
(Name, address and telephone number of agent for service)
__________________________
Calculation of Registration Fee
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Title of Securities Amount to be Proposed maximum Proposed maximum Amount of
be registered registered (1) offering price per unit (2) aggregate offering price registration fee
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$0.001 par value 1,771,242 shares $12.564 $22,254,635 $7,674.01
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
<FN>
(1) Calculated in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee based upon the actual prices at which the
options granted pursuant to the plans may be exercised, which prices range from
$4.44 to $36.94.
</TABLE>
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents and information heretofore filed by Silicon
Graphics, Inc. (the "Company") with the Securities and Exchange Commission are
hereby incorporated by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1994, filed pursuant to Section 13(a) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act").
(b) The Company's Quarterly Reports on Form 10-Q for the quarters ended
September 30, 1994, December 31, 1994, and March 31, 1995, filed pursuant
to Section 13 of the Exchange Act.
(c) The Company's Current Report on Form 8-K filed on February 13, 1995,
filed pursuant to Section 13(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
(d) The description of the Company's Common Stock to be offered hereby
which is contained in its Registration Statement on Form 8-B filed March
16, 1990 pursuant to Section 12 of the Exchange Act.
(e) The description of the Company's Preferred Shares Purchase Rights
contained in the Company's Amendment on Form 8 to Registration Statement on
Form 8-A, filed November 12, 1992 pursuant to Section 12(b) of the Exchange
Act.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this registration statement and to be part hereof
from the date of filing such documents.
Item 4. DESCRIPTION OF SECURITIES.
Not Applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's Board of Directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1993, as amended (the "Securities
Act"). Further, in accordance with the Delaware General Corporation Law, the
Company's Certificate of Incorporation eliminates the liability of a director of
the Company to the Company and its stockholders for monetary damages for
breaches of such director's fiduciary duty of care in certain instances.
Article VI of the Bylaws of the Company provides for indemnification of certain
agents to the maximum extent permitted by the Delaware General Corporation Law.
Persons covered by this indemnification provision include current and former
directors, officers, employees and other agents of the Company, as well as
persons who serve at the request of the Company as directors, officers,
employees or agents of another enterprise.
II-2
<PAGE>
In addition, the Company has entered into contractual agreements with each
director and certain officers designated by the Board to indemnify such
individuals to the full extent permitted by law. These agreements also resolve
certain procedural and substantive matters that are not covered, or are covered
in less detail, in the Bylaws or by the Delaware General Corporation Law.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
Item 8. EXHIBITS.
The following Exhibits are filed as part of, or incorporated by
reference into, this Registration Statement:
4.1 Alias Research Inc.'s 1988 Employee Share Ownership Plan option
agreement.
4.2 Alias Research Inc.'s 1989 Employee Share Ownership Plan option
agreement.
4.3 Alias Research Inc.'s 1990 Employee Share Ownership Plan and
standard forms of option agreements.
4.4 Alias Research Inc.'s 1994 Stock Plan and standard forms of
option agreements.
5.1 Opinion of counsel as to legality of securities being registered.
23.1 Consent of Independent Auditors (see page II-8).
23.2 Consent of Counsel (contained in Exhibit 5.1).
24.1 Power of Attorney (see page II-6).
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 to include
any material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the Delaware General Corporation Law, the Company's
Certificate of Incorporation, the foregoing Bylaw provisions or the Company's
indemnification agreements, the Company has been informed that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Company of expenses incurred or paid by a director, officer
or controlling person of the Company in a successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered hereunder, the Company will,
unless in the opinion of its counsel the question has already been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of 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.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant, Silicon Graphics, Inc., a corporation organized and existing
under the laws of the State of Delaware, 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 Mountain View, State
of California, on June 13, 1995.
SILICON GRAPHICS, INC.
By: Edward R. McCracken
----------------------------
Edward R. McCracken
Chairman and Chief Executive
Officer
II-5
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Edward R. McCracken, Stanley J. Meresman
and William M. Kelly jointly and severally, his or her attorneys-in-fact, each
with the power of substitution, for him or her in any and all capacities, to
sign any amendments to this Registration Statement, 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
each of said attorneys-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, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Edward R. McCracken Chairman of the Board and June 13, 1995
- ---------------------------- Chief Executive Officer -----------------
Edward R. McCracken (Principal Executive Officer)
/s/ Thomas A. Jermoluk President, Chief Operating June 13, 1995
- ---------------------------- Officer and Director -----------------
Thomas A. Jermoluk
/s/ Robert R. Bishop President, Silicon Graphics June 13, 1995
- ---------------------------- World Trade Corporation and -----------------
Robert R. Bishop Director
/s/ Stanley J. Meresman Senior Vice President, Finance June 13, 1995
- ---------------------------- and Chief Financial Officer -----------------
Stanley J. Meresman (Principal Financial Officer)
/s/ Thomas J. Oswold Vice President, Finance and June 13, 1995
- ---------------------------- Treasurer -----------------
Thomas J. Oswold
/s/ Dennis P. McBride Vice President, Controller June 13, 1995
- ---------------------------- (Principal Accounting Officer) -----------------
Dennis P. McBride
/s/ Allen F. Jacobson Director June 13, 1995
- ---------------------------- -----------------
Allen F. Jacobson
II-6
<PAGE>
Signature Title Date
--------- ----- ----
/s/ C. Richard Kramlich Director June 13, 1995
- ---------------------------- -----------------
C. Richard Kramlich
/s/ James A. McDivitt Director June 13, 1995
- ---------------------------- -----------------
James A. McDivitt
/s/ Mark W. Perry Director June 13, 1995
- ---------------------------- -----------------
Mark W. Perry
/s/ Lucille Shapiro Director June 13, 1995
- ---------------------------- -----------------
Lucille Shapiro
/s/ James G. Treybig Director June 13, 1995
- ---------------------------- -----------------
James G. Treybig
II-7
<PAGE>
Consent of Ernst & Young, LLP, Independent Auditors
We consent to the incorporation by reference in the Registration Statement
pertaining to the Alias Research Inc. 1988 Employee Share Ownership Plan,
1989 Employee Share Ownership Plan, 1990 Employee Share Ownership Plan and
1994 Stock Plan of Silicon Graphics, Inc. of our report dated July 18, 1994
with respect to the consolidated financial statements of Silicon Graphics,
Inc. incorporated by reference in its Annual Report (Form 10-K) for the year
ended June 30, 1994, and the related financial statement schedules included
therein, filed with the Securities and Exchange Commission.
ERNST & YOUNG, LLP
Palo Alto, California
June 13, 1995
II-8
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
4.1 Alias Research Inc.'s 1988 Employee Share Ownership Plan
option agreement
4.2 Alias Research Inc.'s 1989 Employee Share Ownership Plan
option agreement
4.3 Alias Research Inc.'s 1990 Employee Share Ownership Plan and
standard forms of option agreements
4.4 Alias Research Inc.'s 1994 Stock Plan and standard forms of
option agreements
5.1 Opinion of counsel as to legality of securities being
registered.
23.1 Consent of Independent Auditors (see page II-8)
23.2 Consent of Counsel (contained in Exhibit 5.1)
24.1 Power of Attorney (see page (II-6)
- -------------------------
II-9
<PAGE>
ALIAS RESEARCH INC.
EMPLOYEE SHARE OWNERSHIP PROGRAM
1988 OPTION AGREEMENT
This Agreement is made effective the 20th day of April, 1988
BETWEEN:
ALIAS RESEARCH INC., a corporation incorporated pursuant to the laws of the
Province of Ontario
(hereinafter referred to as "Alias")
OF THE FIRST PART;
- -and-
- -----------------------------
an employee of Alias
(hereinafter referred to as the "Employee")
OF THE SECOND PART.
BACKGROUND
Alias operates an Employee Share Ownership Program for the benefit of all of its
employees. Under the 1988 Program, each employee is being granted options, which
vest over a 4 year period, to purchase a number of shares determined with
reference to that employee's performance and compensation level. Alias is a
closely held private corporation. There is no market for its shares and any
shares issued to an employee upon the exercise of the options will be subject to
legal and contractual restrictions.
SCHEDULES
1 Form of Exercise Notice
2 Form of Power of Attorney
DEFINITIONS
"ALIAS SHARES" means the common shares of Alias.
"1989 EXERCISE PRICE" means $________ for each of the Alias Shares.
"1990 EXERCISE PRICE" MEANS the amount determined by the Board of Directors of
Alias to be the fair value of each of the Alias Shares as of April, 1989.
<PAGE>
"1991 EXERCISE PRICE" means the amount determined by the Board of Directors of
Alias to be the fair value of each of the Alias Shares as of April, 1990.
"1992 EXERCISE PRICE" means the amount determined by the Board of Directors of
Alias to be the fair value of each of the Alias Shares as of April, 1991.
"OPTIONED SHARES" means _________ Alias Shares, subject to pro rata adjustment
in the event of any subdivision or consolidation of Alias Shares.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which is
hereby irrevocably acknowledged, the parties hereby agree as follows:
1. GRANT OF OPTION
Alias grants to the Employee the option to purchase:
1.1 25% of the Optioned Shares (any fraction being truncated), on or after May
1, 1989 and on or before April 30, 1994, each in consideration of the 1989
Exercise Price;
1.2 25% of the Optioned Shares (any fraction being truncated), on after May 1,
1990 and on or before April 30, 1995, each in consideration of the 1990
Exercise Price;
1.3 25% of the Optioned Shares (any fraction being truncated), on or after May
1, 1991 and on or before April 30, 1996, each in consideration of the 1991
Exercise Price; and
1.4 the remainder of the Optioned Shares, on or after May 1, 1992 and on or
before April 30, 1997, each in consideration of the 1992 Exercise Price;
provided that if the Employee ceases to be an employee of Alias for any reason
whatsoever, the following provisions apply:
1.5 if the cessation occurs prior to May 1, 1992, then the commencement date of
the next group of Optioned Shares to become subject to immediate exercise
is advanced to the date of the cessation of employment and the proportion
of the corresponding Optioned Shares is reduced, pro rata to the number of
days between the date of cessation and the next 1st day of May; and
1.6 if not exercised within 60 days, if the cessation occurs because the
Employee has died or become legally incapacitated, or otherwise 30 days, of
the date of the cessation, the option is terminated and the Employee, his
executors and administrators, have no further rights thereunder.
<PAGE>
2. METHOD OF EXERCISE
The employee may exercise the option by delivering to Alias at its principal
place of business in the Municipality of Metropolitan Toronto or its registered
office in Ontario:
2.1 a duly executed notice of the exercise of the option in the formattached as
Schedule l;
2.2 the purchase price for those of the Optioned Shares being purchased;and
2.3 a duly executed Power of Attorney and supplementary sworn affidavits in the
form attached as Schedule 2.
3. NO TRANSFER
Neither this Agreement nor the option granted in it may be assigned or
transferred by the Employee.
4. EMPLOYEE ACKNOWLEDGEMENTS
The Employee acknowledges that he or she has read and understood:
4.1 the representations and warranties that he or she will be required to make
upon each occasion the option is exercised, set out in Schedule l; and
4.2 the rights he or she will be required to delegate with respect to any
Optioned Shares purchased by the Employee set out in Sehedule 2.
5. GENERAL CONTRACT PROVISIONS
5.1 FURTHER ASSURANCES
Each of the parties covenants and agrees that at any time and from time to time,
it will, upon the request of the other party, do, execute, acknowledge and
deliver or cause to be done, executed, acknowledged or delivered all such
further acts, documents and assurances as may be required for the better
carrying out and performance of all of the terms of this Agreement.
5.2 GOVERNING LAW
This Agreement shall be deemed to have been made in, and shall be governed by,
and be construed in accordance with the laws of the Province of Ontario. Each
party irrevocably attorns to the jurisdiction of the Courts of Ontario for
purposes of any action commeneed under this Agreement or with respect to any
tort committed or alleged to be committed in the performance of this Agreement.
<PAGE>
5.3 COUNTERPARTS
This Agreement may be executed in several counterparts, each of which so
executed shall be deemed to be an original, and such counterparts together shall
constitute but one and the same instrument.
5.4 SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and enure to the benefit of the parties
hereto and their respective heirs, executors, administrators and successors.
Nothing herein, except as is specifically provided in this Agreement, is
intended to confer upon any person, other than the parties and their respective
heirs, executors, administrators and successors, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
5.5 ENTIRE AGREEMENT
This Agreement and the schedules referred to herein constitute the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersede all prior letters of intent, agreements, representations,
warranties, statements, promises, information, arrangements and understandings,
whether oral or written, express or implied, with respect to the subject matter
thereof.
5.6 AMENDMENT
No modification or amendment to this Agreement may be made unless agreed to by
the parties hereto in writing.
5.7 WAIVERS
A waiver by either party hereto of any of its rights hereunder or of the
performance by either party of any of its obligations hereunder shall be without
prejudice to all or any of the other rights hereunder of the party so waiving
and shall not constitute a waiver of any of such other rights or, in any other
instance, of the rights so waived or a waiver of the performance by the party of
any of its obligations hereunder or of the performance, in any other instance,
of the obligations so waived. No waiver on behalf of either party of the breach
of any of the covenants, conditions and provisions herein contained shall be
effective or binding upon such party unless the same shall be expressed in
writing.
<PAGE>
Signed, sealed and delivered in the presence of:
- ------------------------------
Signature
- ------------------------------
Name
- ------------------------------
Address
- ------------------------------
ALIAS RESEARCH INC.
PER: c/s
- ----------------------------------
- ----------------------------------
<PAGE>
ALIAS RESEARCH INC.
Employee Share Ownership Program
1989 OPTION AGREEMENT
This Agreement is made effective the 1st day of May, 1989
BETWEEN:
ALIAS RESEARCH INC., a corporation incorporated pursuant to the laws of the
Province of Ontario
(hereinafter referred to as "Alias")
OF THE FIRST PART;
- -and-
- ------------
an employee of Alias
(hereinafter referred to as the "Employee")
OF THE SECOND PART.
BACKGROUND
Alias operates an Employee Share Ownership Program for the benefit of all of its
employees. Under the 1989 Program, each employee is being granted options, which
vest over a 4 year period, to purchase a number of shares determined with
reference to that employee's performance and compensation level. Alias is a
closely held private corporation. There is no market for its shares and any
shares issued to an employee upon the exercise of the options will be subject to
legal and contractual restrictions.
SCHEDULES
1 Form of Exercise Notice
2 Form of Power of Attorney
DEFINITIONS
"ALIAS SHARES" means the common shares of Alias.
"1990 EXERCISE PRICE" means $________ for each of the Alias Shares.
"1991 EXERCISE PRICE" MEANS the amount determined by the Board of Directors of
Alias to be the fair value of each of the Alias Shares as of April, 1990
<PAGE>
"1992 EXERCISE PRICE" means the amount determined by the Board of Directors of
Alias to be the fair value of each of the Alias Shares as of April, 1991.
"1993 EXERCISE PRICE" means the amount determined by the Board of Directors of
Alias to be the fair value of each of the Alias Shares as of April, 1992.
"OPTIONED SHARES" means _________ Alias Shares, subject to pro rata adjustment
in the event of any subdivision or consolidation of Alias Shares.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which is
hereby irrevocably acknowledged, the parties hereby agree as follows:
1. GRANT OF OPTION
Alias grants to the Employee the option to purchase:
1.1 25% of the Optioned Shares (any fraction being truncated), on or after May
1, 1990 and on or before April 30, 1995, each in consideration of the 1990
Exercise Price;
1.2 25% of the Optioned Shares (any fraction being truncated), on after May 1,
1991 and on or before April 30, 1996, each in consideration of the 1991
Exercise Price;
1.3 25% of the Optioned Shares (any fraction being truncated), on or after May
1, 1992 and on or before April 30, 1997, each in consideration of the 1992
Exercise Price; and
1.4 the remainder of the Optioned Shares, on or after May 1, 1993 and on or
before April 30, 1998, each in consideration of the 1993 Exercise Price;
provided that if the Employee ceases to be an employee of Alias for any reason
whatsoever, the following provisions apply:
1.5 if the cessation occurs prior to May 1, 1993, then the commencement date of
the next group of Optioned Shares to become subject to immediate exercise
is advanced to the date of the cessation of employment and the proportion
of the corresponding Optioned Shares is reduced, pro rata to the number of
days between the date of cessation and the next 1st day of May; and
1.6 if not exercised within 60 days, if the cessation occurs because the
Employee has died or become legally incapacitated, or otherwise 30 days, of
the date of the cessation, the option is terminated and the Employee, his
executors and administrators, have no further rights thereunder.
<PAGE>
2. METHOD OF EXERCISE
The employee may exercise the option by delivering to Alias at its principal
place of business in the Municipality of Metropolitan Toronto or its registered
office in Ontario:
2.1 a duly executed notice of the exercise of the option in the formattached as
Schedule l;
2.2 the purchase price for those of the Optioned Shares being purchased; and
2.3 a duly executed Power of Attorney and supplementary sworn affidavits in the
form attached as Schedule 2.
3. NO TRANSFER
Neither this Agreement nor the option granted in it may be assigned or
transferred by the Employee.
4. EMPLOYEE ACKNOWLEDGEMENTS
The Employee acknowledges that he or she has read and understood:
4.1 the representations and warranties that he or she will be required to make
upon each occasion the option is exercised, set out in Schedule l; and
4.2 the rights he or she will be required to delegate with respect to any
Optioned Shares purchased by the Employee set out in Sehedule 2.
5. GENERAL CONTRACT PROVISIONS
5.1 FURTHER ASSURANCES
Each of the parties covenants and agrees that at any time and from time to time,
it will, upon the request of the other party, do, execute, acknowledge and
deliver or cause to be done, executed, acknowledged or delivered all such
further acts, documents and assurances as may be required for the better
carrying out and performance of all of the terms of this Agreement.
5.2 GOVERNING LAW
This Agreement shall be deemed to have been made in, and shall be governed by,
and be construed in accordance with the laws of the Province of Ontario. Each
party irrevocably attorns to the jurisdiction of the Courts of Ontario for
purposes of any action commeneed under this Agreement or with respect to any
tort committed or alleged to be committed in the performance of this Agreement.
<PAGE>
5.3 COUNTERPARTS
This Agreement may be executed in several counterparts, each of which so
executed shall be deemed to be an original, and such counterparts together shall
constitute but one and the same instrument.
5.4 SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and enure to the benefit of the parties
hereto and their respective heirs, executors, administrators and successors.
Nothing herein, except as is specifically provided in this Agreement, is
intended to confer upon any person, other than the parties and their respective
heirs, executors, administrators and successors, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
5.5 ENTIRE AGREEMENT
This Agreement and the schedules referred to herein constitute the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersede all prior letters of intent, agreements, representations,
warranties, statements, promises, information, arrangements and understandings,
whether oral or written, express or implied, with respect to the subject matter
thereof.
5.6 AMENDMENT
No modification or amendment to this Agreement may be made unless agreed to by
the parties hereto in writing.
5.7 WAIVERS
A waiver by either party hereto of any of its rights hereunder or of the
performance by either party of any of its obligations hereunder shall be without
prejudice to all or any of the other rights hereunder of the party so waiving
and shall not constitute a waiver of any of such other rights or, in any other
instance, of the rights so waived or a waiver of the performance by the party of
any of its obligations hereunder or of the performance, in any other instance,
of the obligations so waived. No waiver on behalf of either party of the breach
of any of the covenants, conditions and provisions herein contained shall be
effective or binding upon such party unless the same shall be expressed in
writing.
<PAGE>
Signed, sealed and delivered in the presence of:
- ------------------------------
Signature
- ------------------------------
Name
- -------------------------------
Address
- -------------------------------
ALIAS RESEARCH INC.
PER: c/s
--------------------------------
- ------------------------------------
<PAGE>
ALIAS RESEARCH, INC.
1990 STOCK PLAN
1. PURPOSE. This 1990 Stock Plan (the "Plan") is intended to provide
incentives: (a) to the officers and other employees of Alias Research, Inc. (the
"Company"), its parent (if any) and any present or future subsidiaries of the
Company (collectively, "Related Corporations") by providing them with
opportunities to purchase stock in the Company pursuant to options granted
hereunder which qualify as "incentive stock options" under Section 422A(b) of
the United States Internal Revenue Code of 1986 (the "Code") ("ISO" or "ISOs");
(b) to directors, officers, employees and consultants of the Company and Related
Corporations by providing them with opportunities to purchase stock in the
Company pursuant to options granted hereunder which do not qualify as ISOs
("Non-Qualified Option" or "Non-Qualified Options"); (c) to directors, officers,
employees and consultants of the Company and Related Corporations by providing
them with awards of stock in the Company ("Awards"); and (d) to directors,
officers, employees and consultants of the Company and Related Corporations by
providing them with opportunities to make direct purchases of stock in the
Company ("Purchases"). Both ISOs and Non-Qualified Options are referred to
hereafter individually as an "Option" and collectively as "Options". Options,
Awards and authorizations to make Purchases are referred to hereafter
collectively as "Stock Rights". As used herein, the terms "parent" and
"subsidiary" mean "parent corporation" and "subsidiary corporation",
respectively, as those terms are defined in Section 425 of the Code.
2. ADMINISTRATION OF THE PLAN.
A. BOARD OR COMMITTEE ADMINISTRATION. The Plan shall be administered
by the Board of Directors of the Company (the "Board"). The Board may appoint a
Stock Plan Committee (the "Committee") of three or more of its members to
administer this Plan. Hereinafter, all references in this Plan to the
"Committee" shall mean the Board if no Committee has been appointed. Subject to
ratification of the grant or authorization of each Stock Right by the Board (if
so required by applicable state law), and subject to the terms of the Plan, the
Committee shall have the authority to (i) determine the employees of the Company
and Related Corporations (from among the class of employees eligible under
paragraph 3 to receive ISOs) to whom ISOs may be granted, and to determine (from
among the class of individuals and entities eligible under paragraph 3 to
receive Non-Qualified Options and Awards and to make purchases) to whom Non-
Qualified Options, Awards and authorizations to make Purchases may be granted;
(ii) determine the time or times at which Options or Awards may be granted or
Purchases made; (iii) determine the option price of shares subject to each
Option, which price shall not be less than the minimum price specified in
paragraph 6, and the purchase price of shares subject to each Purchase; (iv)
determine whether each Option granted shall be an ISO or a Non-Qualified Option;
(v) determine (subject to paragraph 7 ) the time or times when each Option shall
become exercisable and the duration of the exercise period; (vi) determine
whether restrictions such as repurchase options are to be imposed on shares
subject to Options, Awards and Purchases and the nature of such restrictions, if
any, and (vii) interpret the Plan and prescribe and rescind rules and
regulations relating to it. If the Committee determines to issue a Non-Qualified
Option, it shall take whatever actions it deems necessary, under Section 422A of
the Code and the regulations promulgated thereunder, to ensure that such Option
is not treated as an ISO. The interpretation and construction by the Committee
of
<PAGE>
any provisions of the Plan or of any Stock Right granted under it shall be final
unless otherwise determined by the Board. The Committee may from time to time
adopt such rules and regulations for carrying out the Plan as it may deem best.
No member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Stock Right
granted under it.
B. COMMITTEE ACTIONS. Subject to the Company's by-laws, the Committee
may select one of its members as its chairman, and shall hold meetings at such
time and places as it may determine. Acts by a majority of the Committee, or
acts reduced to or approved in writing by a majority of the members of the
Committee, shall be the valid acts of the Committee. From time to time the Board
may increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies however caused, or remove all members of the Committee
and thereafter directly administer the Plan.
C. GRANT OF STOCK RIGHTS TO NON-EMPLOYEE DIRECTORS. The granting of
Stock Rights to eligible directors of the Company who are not employees of the
Company shall be made only in accordance with this paragraph 2.C of the Plan. To
the extent the terms of this paragraph 2.C conflict with any other terms of the
Plan, the provisions of paragraph 2.C shall govern.
(i) AUTOMATIC GRANT FOR NON-EMPLOYEE DIRECTORS. Directors of the Company who are
not employees of the Company (a "Non-Employee Director") will be automatically
granted, without further action by the Committee, Options to purchase 15,000
Common Shares of the Company. These Option grants are to be made each year on
the date of the meeting of the directors of the Company held immediately
following or simultaneous with the Annual Meeting of Shareholders of the Company
to the Non-Employee Directors having been elected at such Annual Meeting of
Shareholders for a term of three years in accordance with the Company's Articles
of Incorporation. If a Non-Employee Director shall have been elected for a
shorter term, a corresponding reduction will be made in the number of Options
granted. So long as the Non-Employee Director is then continuing to serve as a
director of the Company, each Option grant shall become exercisable as to 1,250
Common Shares on the dates which are 90, 180 and 270 days, respectively,
following the date of the Annual Meeting preceding the grant; on the date of
each of the next two following Annual Meetings of Shareholders, immediately
prior to commencement of such Meetings; and on the dates which are 90, 180, and
270 days, respectively, following the date of each of such next two Annual
Meetings of Shareholders. The Options will remain exercisable for the three-year
period commencing upon the respective vesting date. Unless sooner terminated in
accordance with the provisions of paragraph 2.C(v) of this Plan, an Option
granted hereunder will expire three years from its respective date of vesting.
(ii) TRANSITIONAL GRANTS. As a transitional measure, (taking into account
that Options to purchase Common Shares of the Company already have been granted
in accordance with section 2C of the Plan as in effect prior to October 15,
1991), Non-Employee Directors will be granted additional Options to purchase
10,000 Common Shares of the Corporation. So long as the Non-Employee Director is
then continuing to serve as a director of the Corporation, this additional grant
shall become exercisable as to 1,250 Common Shares on the dates which are 90,
180 and 270 days, respectively, following the dates of each of the next two
(1992 and 1993) Annual Meetings
<PAGE>
of Shareholders and on the date of each of the 1993 and 1994 Annual Meetings of
Shareholders immediately prior to the commencement of these Meetings. Any Non-
Employee Director who receives a grant of Options to purchase Common Shares of
the Company pursuant to this transitional provision who is re-elected as a
director at the 1992 or 1993 Annual Meeting shall have a corresponding reduction
in the number of Options granted at the meeting of the directors of the
Corporation held immediately following that Annual Meeting: if re-elected at the
1992 Annual Meeting, a reduction of Options to purchase 10,000 Common Shares of
the Company; and if re-elected at the 1993 Annual Meeting, a reduction of
options to purchase 5,000 Common Shares of the Company; and in either case, the
reduced number of Options to purchase Common Shares of the Company shall
commence to become exercisable 90 days following the date of the Annual Meeting
of Shareholders of the Company.
Grants of Options made pursuant to this paragraph 2.C are subject to approval by
the shareholders of the Corporation.
(iii) PRICE. The purchase price of the Common Shares covered by an Option
granted pursuant to paragraph 2.C of this Plan shall be 100% of the fair market
value of such shares on the day the option is granted. The Option price will be
subject to adjustment in accordance with the applicable provisions of
paragraph 13 of this Plan. For purposes of this Plan, the fair market value of a
Common Share on any day shall be determined in accordance with paragraph 6.D.
(iv) ACCELERATION OF VESTING. If the Company is to be consolidated with or
acquired by another entity in a merger, sale of all or substantially all of the
Company's assets or otherwise (an "Acquisition"), then any option granted under
this paragraph 2.C then outstanding shall, immediately prior to the consummation
of such acquisition, become fully vested and immediately exercisable by the
Director.
(v) TERMINATION OF OPTION RIGHTS. If the Non-Employee Director ceases to be
a director of the Company for any reason, no further installments of any Option
granted pursuant to the Plan shall become exercisable.
3. ELIGIBLE EMPLOYEES AND OTHERS. ISOs may be granted to any employee of the
Company or any Related Corporation. Those officers and directors of the Company
who are not employees may not be granted ISOs under the Plan. Non-Qualified
Options, Awards and authorizations to make Purchases may be granted to any
employee, officer or director (whether or not also an employee) or consultant of
the Company or any Related Corporation. The Committee may take into
consideration a recipient's individual circumstances in determining whether to
grant an ISO, a Non-Qualified Option, an Award or an authorization to make a
Purchase. Granting of any Stock Right to any individual or entity shall neither
entitle the individual or entity to, nor disqualify him from, participation in
any other grant of Stock Rights.
4. STOCK. The stock subject to Options, Awards and Purchases shall be
authorized but unissued shares of common stock of the Company (the "Common
Stock"), or shares of Common Stock reacquired by the Company in any manner. The
aggregate number of shares which may be issued pursuant to the Plan is
1,090,542, subject to adjustment as provided in paragraph 13. Any such shares
may be issued as ISOs, Non-Qua1ified Options or Awards, or to persons or
entities making Purchases, so long as the number of shares so issued does not
exceed such number, as adjusted. If any Option granted
<PAGE>
under the Plan shall expire or terminate for any reason without having been
exercised in full or shall cease for any reason to be exercisable in whole or in
part, or if the Company shall reacquire any unvested shares issued pursuant to
Awards or Purchases, the unpurchased shares subject to such Options and any
unvested shares so reacquired by the Company shall again be available for grants
of Stock Rights under the Plan.
5. GRANTING OF STOCK RIQHTS. Stock Rights may be granted under the Plan at any
time on or after April 25, 1990 and prior to April 25, 2000. The date of grant
of a Stock Right under the Plan will be the date specified by the Committee at
the time it grants the Stock Right; provided, however, that such date shall not
be prior to the date on which the Committee acts to approve the grant. The
Committee shall have the right, with the consent of the optionee, to convert an
ISO granted under the Plan to a Non-Qualified Option pursuant to paragraph 16.
6. MINIMUM OPTION PRICE; ISO LIMITATIONS.
A. PRICE FOR NON-QUALIFIED OPTIONS. The exercise price per share
specified in the agreement relating to each Non-Qualified Option granted under
the Plan shall in no event be less than the lesser of (i) the book value per
share of Common Stock as of the end of the fiscal year of the Company
immediately preceding the date of such grant, or (ii) fifty percent (50%) of the
fair market value per share of Common Stock on the date of such grant.
B. PRICE FOR ISOS. The exercise price per share specified in the
agreement relating to each ISO granted under the Plan shall not be less than the
fair market value per share of Common Stock on the date of such grant. In the
case of an ISO to be granted to an employee owning stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or any Related Corporation, the price per share specified in the
agreement relating to such ISO shall not be less than one hundred ten percent
(110%) of the fair market value per share of Common Stock on the date of grant.
C. $100,000 ANNUAL LIMITATION ON ISOS. Each eligible employee may be
granted ISOs only to the extent that, in the aggregate under this Plan and all
incentive stock option plans of the Company and any Related Corporation, such
ISOs do not become exercisable for the first time by such employee during any
calendar year in a manner which would entitle the employee to purchase more than
$100,000 in fair market value (determined at the time the ISOs were granted) of
Common Stock in that year. Any options granted to an employee in excess of such
amount will be granted as Non-Qualified Options.
D. DETERMINATION OF FAIR MARKET VALUE. If, at the time an Option is
granted under the Plan, the Company's Common Stock is publicly traded, "fair
market value" shall be determined as of the last business day for which the
prices or quotes discussed in this sentence are available prior to the date such
Option is granted and shall mean (i) the average (on that date) of the high and
low prices of the Common Stock on the principal national securities exchange on
which the Common stock is traded, if the Common Stock is then traded on a
national securities exchange; or (ii) the last reported sale price (on that
date) of the Common Stock on the NASDAQ National Market List, if the Common
Stock is not then traded on a national securities exchange; or (iii) the closing
bid price (or average of bid prices) last quoted (on that date) by an
established quotation service for
<PAGE>
over-the-counter securities, if the Common Stock is not reported on the NASDAQ
National Market List. However, if the Common Stock is not publicly traded at the
time an Option is granted under the Plan, "fair market value" shall be deemed to
be the fair value of the Common Stock as determined by the Committee after
taking into consideration all factors which it deems appropriate, including,
without limitation, recent sale and offer prices of the Common Stock in private
transactions negotiated at arm's length.
7. OPTION DURATION. Subject to earlier termination as provided in paragraphs 9
and 10, each Option shall expire on the date specified by the Committee, but not
more than (i) ten years and one day from the date of grant in the case of Non-
Qualified Options, (ii) ten years from the date of grant in the case of ISOs
generally, and (iii) five years from the date of grant in the case of ISOs
granted to an employee owning stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or any
Related Corporation. Subject to earlier termination as provided in paragraphs 9
and 10, the term of each ISO shall be the term set forth in the original
instrument granting such ISO, except with respect to any part of such ISO that
is converted into a Non-Qualified Option pursuant to paragraph 16.
8. EXERCISE OF OPTION. Subject to the provisions of paragraphs 9 through 12,
each Option granted under the Plan shall be exercisable as follows:
A. VESTINQ. The Option shall either be fully exercisable on the date
of grant or shall become exercisable thereafter in such installments as the
Committee may specify.
B.FULL VESTING OF INSTALLMENTS. Once an installment becomes
exercisable it shall remain exercisable until expiration or termination of the
Option, unless otherwise specified by the Committee.
C.PARTIAL EXERCISE. Each Option or installment may be exercised at any
time or from time to time, in whole or in part, for up to the total number of
shares with respect to which it is then exercisable.
D.ACCELERATION OF VESTING. The Committee shall have the right to
accelerate the date of exercise of any installment of any Option; provided that
the Committee shall not, without the consent of an optionee, accelerate the
exercise date of any installment of any Option granted to any employee as an ISO
(and not previously converted into a Non-Qualified Option pursuant to paragraph
16) if such acceleration would violate the annual vesting limitation contained
in Section 422A(d) of the Code, as described in paragraph 6(C).
9.TERMINATION OF EMPLOYMENT. If an ISO optionee ceases to be employed
by the Company and all Related Corporations other than by reason of death or
disability as defined in paragraph 10, no further installments of his ISOs shall
become exercisable, and his ISOs shall terminate after the passage of ninety
(90) days from the date of termination of his employment, but in no event later
than on their specified expiration dates, except to the extent that such ISOs
(or unexercised installments thereof) have been converted into Non-Qualified
Options pursuant to paragraph 16. Employment shall be considered as continuing
uninterrupted during any bona fide leave of absence (such as those attributable
to illness, military obligations or governmental service) provided that the
period of such leave does not exceed 90 days or, if longer, any period during
which such
<PAGE>
optionee's right to reemployment is guaranteed by statute. A bona fide leave of
absence with the written approval of the Committee shall not be considered an
interruption of employment under the Plan, provided that such written approval
contractually obligates the Company or any Related Corporation to continue the
employment of the optionee after the approved period of absence. ISOs granted
under the Plan shall not be affected by any change of employment within or among
the Company and Related Corporations, so long as the optionee continues to be an
employee of the Company or any Related Corporation. Nothing in the Plan shall be
deemed to give any grantee of any Stock Right the right to be retained in
employment or other service by the Company or any Related Corporation for any
period of time.
10. DEATH: DISABILITY.
A. DEATH. If an ISO optionee ceases to be employed by the Company and
all Related Corporations by reason of his death, any ISO of his may be
exercised, to the extent of the number of shares with respect to which he could
have exercised it on the date of his death, by his estate, personal
representative or beneficiary who has acquired the ISO by will or by the laws of
descent and distribution, at any time prior to the earlier of the specified
expiration date of the ISO or 180 days from the date of the optionee's death.
B. DISABILITY. If an ISO optionee ceases to be employed by the Company and
all Related Corporations by reason of his disability, he shall have the right to
exercise any ISO held by him on the date of termination of employment, to the
extent of the number of shares with respect to which he could have exercised it
on that date, at any time prior to the earlier of the specified expiration date
of the ISO or 180 days from the date of the termination of the optionee's
employment. For the purposes of the Plan, the term "disability" shall mean
"permanent and total disability" as defined in Section 22(e)(3) of the Code or
successor statute.
11. ASSIGNABILITY. The terms of the individual Option agreement entered into
by each optionee will provide for the assignability or non-assignability of the
Options.
12. TERMS AND CONDITIONS OF OPTIONS. Options shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including restrictions applicable to shares of Common Stock
issuable upon exercise of Options. In granting any Non-Qualified Option, the
Committee may specify that such Non-Qualified Option shall be subject to the
restrictions set forth herein with respect to ISOs, or to such other termination
and cancellation provisions as the Committee may determine. The Committee may
from time to time confer authority and responsibility on one or more of its own
members and/or one or more officers of the Company to execute and deliver such
instruments. The proper officers of the Company are authorized and directed to
take any and all action necessary or advisable from time to time to carry out
the terms of such instruments.
13. ADJUSTMENTS. Upon the occurrence of any of the following events, an
optionee's rights with respect to Options granted to him hereunder shall be
adjusted as hereinafter provided, unless otherwise specifically provided
<PAGE>
in the written agreement between the optionee and the Company relating to such
Option:
A. STOCK DIVIDENDS AND STOCK SPLITS. If the shares of Common Stock
shall be subdivided or combined into a greater or smaller number of shares or if
the Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock deliverable upon
the exercise of Options shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination or stock dividend.
B. CONSOLIDATIONS OR AMALGAMATIONS. If the Company is to be
consolidated with or acquired by another entity in an amalgamation, sale of all
or substantially all of the Company's assets or otherwise (an "Acquisition"),
the Committee or the board of directors of any entity assuming the obligations
of the Company hereunder (the "Successor Board"), shall, as to outstanding
Options, either (i) make appropriate provision for the continuation of such
Options by substituting on an equitable basis for the shares then subject to
such Options the consideration payable with respect to the outstanding shares of
Common Stock in connection with the Acquisition; or (ii) upon written notice to
the optionees, provide that all Options must be exercised, to the extent then
exercisable, within a specified number of days of the date of such notice, at
the end of which period the Options shall terminate; or (iii) terminate all
Options in exchange for a cash payment equal to the excess of the fair market
value of the shares subject to such Options (to the extent then exercisable)
over the exercise price thereof.
C. RECAPITALIZATION OR REORGANIZATION. In the event of a
recapitalization or reorganization of the Company (other than a transaction
described in subparagraph B above) pursuant to which securities of the Company
or of another corporation are issued with respect to the outstanding shares of
Common Stock, an optionee upon exercising an Option shall be entitled to receive
for the purchase price paid upon such exercise the securities he would have
received if he had exercised his Option prior to such recapitalization or
reorganization.
D. MODIFICATION OF ISOS. Notwithstanding the foregoing, any
adjustments made pursuant to subparagraphs A, B or C with respect to ISOs shall
be made only after the Committee, after consulting with counsel for the Company,
determines whether such adjustments would constitute a "modification" of such
ISOs (as that term is defined in Section 425 of the Code) or would cause any
adverse tax consequences for the holders of such ISOs. If the Committee
determines that such adjustments made with respect to ISOs would constitute a
modification of such ISOs, it may refrain from making such adjustments.
E. DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, each Option will terminate
immediately prior to the consummation of such proposed action or at such other
time and subject to such other conditions as shall be determined by the
Committee.
F. ISSUANCES OF SECURITIES. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number
<PAGE>
or price of shares subject to Options. No adjustments shall be made for
dividends paid in cash or in property other than securities of the Company.
G. FRACTIONAL SHARES. No fractional shares shall be issued under the
Plan and the optionee shall receive from the Company cash in lieu of such
fractional shares.
H. ADJUSTMENTS. Upon the happening of any of the events described in
subparagraphs A, B or C above, the class and aggregate number of shares set
forth in paragraph 4 hereof that are subject to Stock Rights which previously
have been or subsequently may be granted under the Plan shall also be
appropriately adjusted to reflect the events described in such subparagraphs.
The Committee or the Successor Board shall determine the specific adjustments to
be made under this paragraph 13 and, subject to paragraph 2, its determination
shall be conclusive.
If any person or entity owning restricted Common Stock obtained by exercise
of a Stock Right made hereunder receives shares or securities or cash in
connection with a corporate transaction described in subparagraphs A, B or C
above as a result of owning such restricted Common Stock, such shares or
securities or cash shall be subject to all of the conditions and restrictions
applicable to the restricted Common Stock with respect to which such shares or
securities or cash were issued, unless otherwise determined by the Committee or
the Successor Board.
14. MEANS OF EXERCISING STOCK RIGHTS. A Stock Right (or any part or
installment thereof) shall be exercised by giving written notice to the Company
at its registered office. Such notice shall identify the Stock Right being
exercised and specify the number of shares as to which such Stock Right is being
exercised, accompanied by full payment of the purchase price therefor either (a)
in cash or by check, or (b) at the discretion of the Committee, by delivery of
the grantee's personal recourse note bearing interest payable not less than
annually at no less than 100% of the lowest applicable Federal rate, as defined
in Section 1274(d) of the Code, or (c) at the discretion of the Committee, by
any combination of (a) and (b) above. If the Committee exercises its discretion
to permit payment of the exercise price of an ISO by means of the methods set
forth in clauses (b) or (c) of the preceding sentence, such discretion shall be
exercised in writing at the time of the grant of the ISO in question. The holder
of a Stock Right shal1 not have the rights of a shareholder with respect to the
shares covered by his Stock Right until the date of issuance of a stock
certificate to him for such shares. Except as expressly provided above in
paragraph 13 with respect to changes in capitalization and stock dividends, no
adjustment shall be made for dividends or similar rights for which the record
date is before the date such stock certificate is issued.
15. TERM AND AMENDMENT OF PLAN. This Plan was adopted by the Board on April 25,
1990, subject (with respect to the validation of ISOs granted under the Plan) to
approval of the Plan by the stockholders of the Company at the next Meeting of
Stockholders or, in lieu thereof, by written consent. The approval of
stockholders was obtained on May 17, 1990. The Plan shall expire at the end of
the day on April 24, 2000 (except as to Options outstanding on that date).
Subject to the provisions of paragraph 5 above, Stock Rights may be granted
under the Plan prior to the date of stockholder approval of the Plan. The Board
may terminate or amend the Plan in any respect at any time, with two exceptions.
First, the terms of paragraph 2.C may not be amended more than once in any six-
month period other than to comply with changes in the United States Internal
Revenue
<PAGE>
Code, the Employment Retirement Security Act, or the rules promulgated
thereunder. Second, the Board may not take the following actions without the
approval of the stockholders obtained within 12 months before or after the Board
adopts a resolution authorizing any such following actions: (a) the total number
of shares that may be issued under the Plan may not be increased (except by
adjustment pursuant to paragraph 13); (b) the provisions of paragraph 3
regarding eligibility for grants of ISOs may not be modified; (c) the provisions
of paragraph 6(B) regarding the exercise price at which shares may be offered
pursuant to ISOs may not be modified (except by adjustment pursuant to paragraph
13); and (d) the expiration date of the Plan may not be extended. Except as
otherwise provided in this paragraph 15, in no event may action of the Board or
stockholders alter or impair the rights of a grantee, without his consent, under
any Stock Right previously granted to him.
16. CONVERSION OF ISOS INTO NON-QUALIFIED OPTIONS; TENMINATION OF ISOS. The
Committee, at the written request of any optionee, may in its discretion take
such actions as may be necessary to convert such optionee's ISOs (or any
installments or portions of installments thereof) that have not been exercised
on the date of conversion into Non-Qualified Options at any time prior to the
expiration of such ISOs, regardless of whether the optionee is an employee of
the Company or a Related Corporation at the time of such conversion. Such
actions may include, but not be limited to, extending the exercise period or
reducing the exercise price of the appropriate installments of such ISOs. At the
time of such conversion, the Committee (with the consent of the optionee) may
impose such conditions on the exercise of the resulting Non-Qualified Options as
the Committee in its discretion may determine, provided that such conditions
shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed to
give any optionee the right to have such optionee's ISOs converted into Non-
Qualified Options, and no such conversion shall occur until and unless the
Committee takes appropriate action. The Committee, with the consent of the
optionee, may also terminate any portion of any ISO that has not been exercised
at the time of such termination.
17. APPLICATION OF FUNDS. The proceeds received by the Company from the sale
of shares pursuant to Options granted and Purchases authorized under the Plan
shall be used for general corporate purposes.
18. GOVERNMENTAL REGULATION. The Company's obligation to sell and deliver
shares of the Common Stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such shares.
19. WITHHOLDING OF ADDITIONAL INCOME TAXES. Upon the exercise of a Non-
Qualified Option, the grant of an Award, the making of a Purchase of Common
Stock for less than its fair market value, the making of a Disqualifying
Disposition (as defined in paragraph 20) or the vesting of restricted Common
Stock acquired on the exercise of a Stock Right hereunder, the Company, in
accordance with Section 3402(a) of the Code, may require the optionee, Award
recipient or purchaser to pay additional withholding taxes in respect of the
amount that is considered compensation includible in such person's gross income.
The Committee in its discretion may condition (i) the exercise of an Option,
(ii) the grant of an Award, (iii) the making of a Purchase of Common Stock for
less than its fair market value, or (iv) the vesting of restricted Common Stock
acquired by exercising a Stock Right, on the grantee's payment of such
additional withholding taxes.
<PAGE>
20. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION. Each employee who receives
an ISO must agree to notify the Company in writing immediately after the
employee makes a Disqualifying Disposition of any Common Stock acquired pursuant
to the exercise of an ISO. A Disqualifying Disposition is any disposition
(including any sale) of such Common Stock before the later of (a) two years
after the date the employee was granted the ISO, or (b) one year after the date
the employee acquired Common Stock by exercising the ISO. If the employee has
died before such stock is sold, these holding period requirements do not apply
and no Disqualifying Disposition can occur thereafter.
21. GOVERNING LAW; CONSTRUCTION. The validity and construction of the Plan
shall be governed by the laws of the Province of Ontario, or the laws of any
jurisdiction in which the Company or its successors in interest may be
organized. In construing this Plan, the singular shall include the plural and
the masculine gender shall include the feminine and neuter, unless the context
otherwise requires. The validity and construction of the instruments evidencing
Stock Rights granted under the Plan shall be governed by the laws of the
jurisdiction stated in each such instrument; provided, however, that in the
event of a conflict between the laws governing the Plan and the laws governing
any instrument issued under the Plan, the laws of the jurisdiction governing the
Plan shall apply and take precedence.
<PAGE>
[LOGO]
ALIAS RESEARCH INC.
INCENTIVE STOCK OPTION AGREEMENT
Alias Research Inc., an Ontario corporation (the "Company"), hereby grants this
day of , 199 , to (the "Employee"), an option to purchase
a maximum of shares of its Common Stock at the price of $ (U.S.)
per share, on the following terms and conditions:
1. GRANT UNDER 1990 STOCK PLAN
This option is granted pursuant to and is governed by the Company's 1990 Stock
Plan (the "Plan") and, unless the context otherwise requires, terms used herein
shall have the same meaning as in the Plan. Determinations made in connection
with this option pursuant to the Plan shall be governed by the Plan as it exists
on this date.
2. GRANT AS INCENTIVE STOCK OPTION; OTHER OPTIONS
This option is intended to qualify as an incentive stock option under Section
422A of the Internal Revenue Code of 1986 (the "Code"). This option is in
addition to any other options heretofore or hereafter granted to the Employee by
the Company, but a duplicate original of this instrument shall not effect the
grant of another option.
3. EXTENT OF OPTION IF EMPLOYMENT CONTINUES
If the Employee has continued to be employed by the Company on the following
dates, the Employee may exercise this option for the number of shares set
opposite the applicable date:
One year from the date hereof - shares
Two years from the date hereof - an additional shares
Three years from the date hereof - an additional shares
Four years from the date hereof - an additional shares
(hereinafter referred to individually as a "Vesting Date" and collectively as
the "Vesting Dates".)
The foregoing rights are cumulative and, while the Employee continues to be
employed by the Company, may be exercised on and after the respective Vesting
Date up to and including the date which is 3 years after that respective Vesting
Date. All of the foregoing rights are subject to Articles 4 and 5, as
appropriate, if the Employee ceases to be employed by the Company or dies or
becomes disabled while in the employ of the Company.
<PAGE>
- Page 2 -
4. TERMINATION OF EMPLOYMENT
If the Employee ceases to be employed by the Company, other than by reason of
death or disability as defined in Article 5, no further instalments of this
option shall become exercisable and this option shall terminate after the
passage of ninety (90) days from the date employment ceases, but in no event
later than the scheduled expiration date. In such a case, the Employee's only
rights hereunder shall be those which are properly exercised before the
termination of this option.
5. DEATH; DISABILITY
If the Employee dies while in the employ of the Company, this option may be
exercised, to the extent of the number of shares with respect to which the
Employee could have exercised it on the date of his death, by his estate,
personal representative or beneficiary to whom this option has been assigned
pursuant to Article 10, at any time within 180 days after the date of death, but
not later than the scheduled expiration date. If the Employee ceases to be
employed by the Company by reason of his disability (as defined in the Plan),
this option may be exercised, to the extent of the number of shares with respect
to which he could have exercised it on the date of the termination of his
employment, at any time within 180 days after such termination, but not later
than the scheduled expiration date. At the expiration of such 180-day period or
the scheduled expiration date, whichever is the earlier, this option shall
terminate and the only rights hereunder shall be those as to which the option
was properly exercised before such termination.
6. PARTIAL EXERCISE
Exercise of this option up to the extent above stated may be made in part at any
time and from time to time within the above limits, except that this option may
not be exercised for a fraction of a share unless such exercise is with respect
to the final instalment of stock subject to this option and a fractional share
(or cash, in the discretion of the Company, in lieu thereof) must be issued to
permit the Employee to exercise completely such final instalment. Any
fractional share with respect to which an instalment of this option cannot be
exercised because of the limitation contained in the preceding sentence shall
remain subject to this option and shall be available for later purchase by the
Employee in accordance with the terms hereof.
7. PAYMENT OF PRICE
[Person signing on behalf of the Company must initial one of the two following
clauses.] The option price is payable in United States dollars and may be paid:
(a) in cash or by certified cheque or bank draft, or any combination of the
foregoing, equal in amount to the option price.
-------------------------
(Initials)
(b) in cash, by certified cheque or bank draft, by delivery of the Employee's
personal recourse note bearing interest payable not less than annually at
no less than 100% of the lowest applicable Federal rate, as defined in
Section 1274(d) of the Code, or by any combination of the foregoing, equal
in amount to the option price.
-------------------------
(Initials)
<PAGE>
- Page 3 -
8. AGREEMENT TO PURCHASE FOR INVESTMENT
By acceptance of this option, the Employee agrees that a purchase of shares
under this option will not be made with a view to their distribution, as that
term is used in the Securities Act of 1933, as amended, unless in the opinion of
counsel to the Company such distribution is in compliance with or exempt from
the registration and prospectus requirements of that Act, and the Employee
agrees to sign a certificate to such effect at the time of exercising this
option and agrees that the certificate for the shares so purchased may be
inscribed with a legend to ensure compliance with the Securities Act of 1933.
9. METHOD OF EXERCISING OPTION
Subject to the terms and conditions of this Agreement, this option may be
exercised by written notice to the Company, at the registered office of the
Company, or to such transfer agent as the Company shall designate. Such notice
shall state the election to exercise this option and the number of shares in
respect of which it is being exercised and shall be signed by the person or
persons so exercising this option. Such notice shall be accompanied by payment
of the full purchase price of such shares, and the Company shall deliver a
certificate or certificates representing such shares as soon as practicable
after the notice shall be received. The certificate or certificates for the
shares as to which this option shall have been so exercised shall be registered
in the name of the person or persons so exercising this option (or, if this
option shall be exercised by the Employee and if the Employee shall so request
in the notice exercising this option, shall be registered in the name of the
Employee and another person jointly, with right of survivorship) and shall be
delivered as provided above to or upon the written order of the person or
persons exercising this option. In the event this option shall be exercised,
pursuant to Article 5 hereof, by any person or persons other than the Employee,
such notice shall be accompanied by appropriate proof of the right of such
person or persons to exercise this option. All shares that shall be purchased
upon the exercise of this option as provided herein shall be fully paid and
non-assessable.
10. OPTION NOT TRANSFERABLE
This option is not transferable or assignable except by will or by the laws of
descent and distribution. During the Employee's lifetime only the Employee can
exercise this option.
11. NO OBLIGATION TO EXERCISE OPTION
The grant and acceptance of this option imposes no obligation on the Employee to
exercise it. The Employee represents and warrants that no exercise of this
option will be induced by expectation of employment or continued employment of
the Employee by the Company or any Related Corporation (as defined in the Plan).
12. NO OBLIGATION TO CONTINUE EMPLOYMENT
The Company and any Related Corporation (as defined in the Plan) are not by the
Plan or this option obligated to continue the Employee in employment.
13. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE
The Employee shall have no rights as a stockholder with respect to shares
subject to this Agreement until a stock certificate therefor has been issued to
the Employee and is fully paid for. Except as is expressly provided in the
Plan with respect to certain changes in the capitalization of the Company, no
adjustment shall be made for dividends or similar rights for which the record
date is prior to the date such stock certificate is issued.
<PAGE>
- Page 4 -
14. CAPITAL CHANGES AND BUSINESS SUCCESSIONS
The Plan contains provisions covering the treatment of options in a number of
contingencies such as stock splits and amalgamations. Provisions in the Plan
for adjustment with respect to stock subject to options and the related
provisions with respect to successors to the business of the Company are hereby
made applicable hereunder and are incorporated herein by reference. In general,
you should not assume that options necessarily would survive the acquisition of
the Company. In particular, without affecting the generality of the foregoing,
it is understood that for the purposes of Articles 3 through 5 hereof, both
inclusive, employment by the Company includes employment by a Related
Corporation as defined in the Plan.
15. EARLY DISPOSITION
The Employee agrees to notify the Company in writing immediately after the
Employee makes a Disqualifying Disposition of any Common Stock received pursuant
to the exercise of this option. A Disqualifying Disposition is any disposition
(including any sale) of such Common Stock before the LATER of (a) two years
after the date the Employee was granted this option or (b) one year after the
date the Employee acquired Common Stock by exercising this option. If the
Employee has died before such stock is sold, these holding period requirements
do not apply and no Disqualifying Disposition can occur thereafter. The
Employee also agrees to provide the Company with any information which it shall
request concerning any such disposition. The Employee acknowledges that he or
she will, if a United States taxpayer, forfeit the favourable income tax
treatment otherwise available with respect to the exercise of this incentive
stock option if he or she makes a Disqualifying Disposition of the stock
received on exercise of this option.
16. WITHHOLDING TAXES
If the Company in its discretion determines that it is obligated to withhold tax
with respect to a Disqualifying Disposition (as defined in Article 15) of Common
Stock received by the Employee on exercise of this option, the Employee hereby
agrees that the Company may withhold from the Employee's wages the appropriate
amount of federal, state and local withholding taxes attributable to such
Disqualifying Disposition. If any portion of this option is treated as a
Non-Qualified Option, the Employee hereby agrees that the Company may withhold
from the Employee's wages the appropriate amount of federal, state and local
withholding taxes attributable to the Employee's exercise of such Non-Qualified
Option. At the Company's discretion, the amount required to be withheld may be
withheld in cash from such wages, or (with respect to compensation income
attributable to the exercise of this option) in kind from the Common Stock
otherwise deliverable to the Optionee on exercise of this Option. The Employee
further agrees that, if the Company does not withhold an amount from the
Employee's wages sufficient to satisfy the Company's withholding obligation, the
Employee will reimburse the Company on demand, in cash, for the amount
underwithheld.
17. NO EXERCISE OF OPTION IF EMPLOYMENT TERMINATED FOR MISCONDUCT
If the employment of the Employee is terminated for "Misconduct", this option
shall terminate on the date of such termination of employment and shall
thereupon not be exercisable to any extent whatsoever. "Misconduct" is conduct,
as determined by the Board of Directors, involving one or more of the following:
(i) the substantial and continuing failure of the Employee to render services
to the Company in accordance with his assigned duties; (ii) a determination by
two-thirds of the members of the Board of Directors that the Employee has
inadequately performed the duties of his employment; (iii) disloyalty, gross
negligence, dishonesty or breach of fiduciary duty to the Company; (iv) the
commission of an act of embezzlement, fraud, disloyalty, dishonesty or
deliberate disregard of the rules or policies of the Company which results in
loss, damage or injury to the Company, whether directly or indirectly; (v) the
unauthorized disclosure of any trade secret or confidential information of the
Company; or (vi) the commission of an act which constitutes unfair competition
with the Company or which induces any
<PAGE>
- Page 5 -
customer of the Company to breach a contract with the Company. In making such
determination, the Board of Directors shall act fairly and in utmost good faith
and shall give the Employee an opportunity to appear and be heard at a hearing
before the Board of Directors or any Committee and present evidence on his
behalf. For the purposes of this Article 17, termination of employment shall be
deemed to occur when the Employee receives notice that his employment is
terminated.
18. ACCELERATION AND VESTING OF OPTION FOR BUSINESS COMBINATIONS
If the Company is to be consolidated with or acquired by another entity in an
amalgamation, sale of all or substantially all of the Company's assets or
otherwise (an "Acquisition"), then this option shall, immediately prior to the
consummation of such Acquisition, become fully vested and immediately
exercisable by the Employee.
19. PROVISION OF DOCUMENTATION TO EMPLOYEE
By signing this Agreement the Employee acknowledges receipt of a copy of this
Agreement and a copy of the Company's 1994 Stock Plan.
20. GOVERNING LAW
This Agreement shall be governed by and interpreted in accordance with the
internal laws of the State of Massachusetts if the Employee is, at the date
hereof, employed in the United States and otherwise of the Province of Ontario,
Canada.
IN WITNESS WHEREOF the Company and the Employee have caused this instrument to
be executed, and the Employee whose signature appears below acknowledges receipt
of a copy of the Plan and acceptance of an original copy of this Agreement.
- --------------------------------------- ALIAS RESEARCH INC.
EMPLOYEE
- --------------------------------------- By:
Print Name of Employee --------------------------------
- ---------------------------------------- -----------------------------------
Street Address Title
- ----------------------------------------
City Province/State Postal/Zip Code
NOTE: PERSON SIGNING ON BEHALF OF THE COMPANY MUST INITIAL ONE OF THE TWO
CLAUSES UNDER ARTICLE 7 ABOVE.
<PAGE>
ALIAS RESEARCH INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
Alias Research Inc., an Ontario corporation (the "Company"), hereby grants this
day of , 199 , to (the "Optionee"), an option to purchase
a maximum of shares of its Common Stock at the price of $
(U.S.) per share, on the following terms and conditions:
1. GRANT UNDER 1990 STOCK PLAN
This option is granted pursuant to and is governed by the Company's 1990 Stock
Plan (the "Plan") and, unless the context otherwise requires, terms used herein
shall have the same meaning as in the Plan. Determinations made in connection
with this option pursuant to the Plan shall be governed by the Plan as it exists
on this date.
2. GRANT AS NON-QUALIFIED OPTION; OTHER OPTIONS
This option shall be treated for United States income tax purposes as a
Non-Qualfied Option (rather than an incentive stock option), and the Board of
Directors will take appropriate action, if necessary, to achieve this result.
This option is in addition to any other options heretofore or hereafter granted
to the Optionee by the Company, but a duplicate original of this instrument
shall not effect the grant of another option.
3. EXTENT OF OPTION IF BUSINESS RELATIONSHIP CONTINUES
If the Optionee has continued to serve the Company or any Related Corporation in
the capacity of an employee, officer, director or consultant (such service is
described herein as maintaining or being involved in a "Business Relationship"
with the Company) on the following dates, the Optionee may exercise this option
for the number of shares set opposite the applicable date:
One month from the date hereof shares
Two months from the date hereof -an additional
shares
Three months from the date hereof -an additional
shares
(hereinafter referred to individually as a "Vesting Date" and collectively as
the "Vesting Dates".)
<PAGE>
- Page 2 -
The foregoing rights are cumulative and, while the Optionee continues to
maintain a Business Relationship with the Company, may be exercised on and after
the respective Vesting Date up to and including the date which is 3 years after
that respective Vesting Date. All of the foregoing rights are subject to
Articles4 and 5, as appropriate, if the Optionee ceases to maintain a Business
Relationship with the Company or dies, becomes disabled or undergoes dissolution
while involved in a Business Relationship with the Company.
4. TERMINATION OF BUSINESS RELATIONSHIP
If the Optionee ceases to maintain a Business Relationship with the Company,
other than by reason of death or disability as defined in Article5, no further
instalments of this option shall become exercisable and this option shall
terminate after the passage of sixty (60) days from the date the Business
Relationship ceases, but in no event later than the scheduled expiration date.
In such a case, the Optionee's only rights hereunder shall be those which are
properly exercised before the termination of this option.
5. DEATH; DISABILITY; DISSOLUTION
If the Optionee is a natural person who dies while involved in a Business
Relationship with the Company, this option may be exercised, to the extent of
the number of shares with respect to which the Optionee could have exercised it
on the date of his death, by his estate, personal representative or beneficiary
to whom this option has been assigned pursuant to Article 10, at any time within
180 days after the date of death, but not later than the scheduled expiration
date. If the Optionee is a natural person whose Business Relationship with the
Company is terminated by reason of his disability (as defined in the Plan), this
option may be exercised, to the extent of the number of shares with respect to
which the Optionee could have exercised it on the date the Business Relationship
was terminated, at any time within 180 days after the date of such termination,
but not later than the scheduled expiration date. At the expiration of such
180-day period or the scheduled expiration date, whichever is the earlier, this
option shall terminate and the only rights hereunder shall be those as to which
the option was properly exercised before such termination. If Optionee is a
corporation, partnership, trust or other entity that is dissolved, liquidated,
becomes insolvent or enters into a merger or acquisition with respect to which
such optionee is not the surviving entity at the time when such entity is
involved in a Business Relationship with the Company, this Option shall
immediately terminate as of the date of such event, and the only rights
hereunder shall be those as to which this option was properly exercised before
such dissolution or other event.
6. PARTIAL EXERCISE
Exercise of this option up to the extent above stated may be made in part at any
time and from time to time within the above limits, except that this option may
not be exercised for a fraction of a share unless such exercise is with respect
to the final
<PAGE>
- Page 3 -
instalment of stock subject to this option and a fractional share (or cash, in
the discretion of the Company, in lieu thereof) must be issued to permit the
Optionee to exercise completely such final instalment. Any fractional share
with respect to which an instalment of this option cannot be exercised because
of the limitation contained in the preceding sentence shall remain subject to
this option and shall be available for later purchase by the Optionee in
accordance with the terms hereof.
7. PAYMENT OF PRICE
The option price is payable in United States dollars and may be paid in cash or
by certified cheque or bank draft, or any combination of the foregoing, equal in
amount to the option price.
8. AGREEMENT TO PURCHASE FOR INVESTMENT
By acceptance of this option, the Optionee agrees that a purchase of shares
under this option will not be made with a view to their distribution, as that
term is used in the Securities Act of 1933, as amended, unless in the opinion of
counsel to the Company such distribution is in compliance with or exempt from
the registration and prospectus requirements of that Act, and the Optionee
agrees to sign a certificate to such effect at the time of exercising this
option and agrees that the certificate for the shares so purchased may be
inscribed with a legend to ensure compliance with that Act.
9. METHOD OF EXERCISING OPTION
Subject to the terms and conditions of this Agreement, this option may be
exercised by written notice to the Company, at the registered office of the
Company, or to such transfer agent as the Company shall designate. Such notice
shall state the election to exercise this option and the number of shares in
respect of which it is being exercised and shall be signed by the person or
persons so exercising this option. Such notice shall be accompanied by payment
of the full purchase price of such shares, and the Company shall deliver a
certificate or certificates representing such shares as soon as practicable
after the notice shall be received. The certificate or certificates for the
shares as to which this option shall have been so exercised shall be registered
in the name of the person or persons so exercising this option (or, if this
option shall be exercised by the Optionee and if the Optionee shall so request
in the notice exercising this option, shall be registered in the name of the
Optionee and another person jointly, with right of survivorship) and shall be
delivered as provided above to or upon the written order of the person or
persons exercising this option. In the event this option shall be exercised,
pursuant to Article5 hereof, by any person or persons other than the Optionee,
such notice shall be accompanied by appropriate proof of the right of such
person or persons to exercise this option. All shares that shall be purchased
upon the exercise of this option as provided herein shall be fully paid and
non-assessable.
<PAGE>
- Page 4 -
10. OPTION NOT TRANSFERABLE
This option is not transferable or assignable except by will or by the laws of
descent and distribution. During the Optionee's lifetime only the Optionee can
exercise this option.
11. NO OBLIGATION TO EXERCISE OPTION
The grant and acceptance of this option imposes no obligation on the Optionee to
exercise it.
12. NO OBLIGATION TO CONTINUE BUSINESS RELATIONSHIP
The Company and any Related Corporations are not by the Plan or this option
obligated to continue to maintain a Business Relationship with the Optionee.
13. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE
The Optionee shall have no rights as a stockholder with respect to shares
subject to this Agreement until a stock certificate therefor has been issued to
the Optionee and is fully paid for. Except as is expressly provided in the
Plan with respect to certain changes in the capitalization of the Company, no
adjustment shall be made for dividends or similar rights for which the record
date is prior to the date such stock certificate is issued.
14. CAPITAL CHANGES AND BUSINESS SUCCESSIONS
The Plan contains provisions covering the treatment of options in a number of
contingencies such as stock splits and amalgamations. Provisions in the Plan
for adjustment with respect to stock subject to options and the related
provisions with respect to successors to the business of the Company are hereby
made applicable hereunder and are incorporated herein by reference. In general,
you should not assume that options necessarily would survive the acquisition of
the Company. In particular, without affecting the generality of the foregoing,
it is understood that for the purposes of Articles3 through 5 hereof, both
inclusive, employment by the Company includes employment by a Related
Corporation as defined in the Plan.
15. WITHHOLDING TAXES
The Optionee hereby agrees that the Company may withhold from the Optionee's
wages or other remuneration the appropriate amount of federal, state and local
taxes attributable to the Optionee's exercise of any instalment of this option.
At the Company's discretion, the amount required to be withheld may be withheld
in cash from such wages or other remuneration, or in kind from the Common Stock
otherwise
<PAGE>
- Page 5 -
deliverable to the Optionee on exercise of this Option. The Optionee further
agrees that, if the Company does not withhold an amount from the Optionee's
wages or other remuneration sufficient to satisfy the Company's withholding
obligation, the Optionee will reimburse the Company on demand, in cash, for the
amount underwithheld.
16. NO EXERCISE OF OPTION IF BUSINESS RELATIONSHIP TERMINATED FOR
MISCONDUCT
If the Business Relationship of the Optionee is terminated for "Misconduct",
this option shall terminate on the date of such termination of the Business
Relationship and shall thereupon not be exercisable to any extent whatsoever.
"Misconduct" is conduct, as determined by the Board of Directors, involving one
or more of the following: (i) the substantial and continuing failure of the
Optionee to render services to the Company in accordance with the terms or
requirements of the business relationship; (ii) a determination by two-thirds of
the members of the Board of Directors that the Optionee has inadequately
performed the requirements of its business relationship; (iii) disloyalty, gross
negligence, dishonesty or breach of fiduciary duty to the Company; (iv) the
commission of an act of embezzlement, fraud, disloyalty, dishonesty or
deliberate disregard of the rules or policies of the Company which results in
loss, damage or injury to the Company, whether directly or indirectly; (v) the
unauthorized disclosure of any trade secret or confidential information of the
Company; or (vi) the commission of an act which constitutes unfair competition
with the Company or which induces any customer of the Company to breach a
contract with the Company. In making such determination, the Board of Directors
shall act fairly and in utmost good faith and shall give the Optionee an
opportunity to appear and be heard at a hearing before the Board of Directors or
any Committee and present evidence on his or her behalf. For the purposes of
this Article 16, termination of the business relationship shall be deemed to
occur when the Optionee receives notice that its business relationship is
terminated.
17. ACCELERATION AND VESTING OF OPTION FOR BUSINESS COMBINATIONS
If the Company is to be consolidated with or acquired by another entity in an
amalgamation, sale of all or substantially all of the Company's assets or
otherwise (an "Acquisition"), then this option shall, immediately prior to the
consummation of such Acquisition, become fully vested and immediately
exercisable by the Optionee.
18. GOVERNING LAW
This Agreement shall be governed by and interpreted in accordance with the
internal laws of the State of Massachusetts if the Optionee, at the date hereof,
provides services to the Company, or any Related Corporation, only in the United
States and otherwise of the Province of Ontario, Canada.
<PAGE>
- Page 6 -
IN WITNESS WHEREOF the Company and the Optionee have caused this instrument to
be executed, and the Optionee whose signature appears below acknowledges receipt
of a copy of the Plan and acceptance of an original copy of this Agreement.
- ----------------------------------- ALIAS RESEARCH INC.
OPTIONEE
- ----------------------------------- By:
Name of Optionee --------------------------------
- ----------------------------------- -----------------------------------
Street Address Title
- -----------------------------------
City State Zip Code
<PAGE>
ALIAS RESEARCH INC.
STOCK OPTION AGREEMENT
Alias Research Inc., an Ontario corporation (the "Company"), hereby grants this
day of , 19 , to (the
"Director"), an option to purchase a maximum of shares of its
Common Stock at the price of $ (U.S.) per share, on the following
terms and conditions:
1. GRANT UNDER 1990 STOCK PLAN
This option is granted pursuant to and is governed by the Company's 1990 Stock
Plan (the "Plan") and, unless the context otherwise requires, terms used herein
shall have the same meaning as in the Plan. Determinations made in connection
with this option pursuant to the Plan shall be governed by the Plan as it exists
on this date.
2. GRANT AS INCENTIVE STOCK OPTION; OTHER OPTIONS
This option is intended to qualify as an incentive stock option under
Section422A of the Internal Revenue Code of 1986 (the "Code"). This option is
in addition to any other options heretofore or hereafter granted to the Director
by the Company, but a duplicate original of this instrument shall not effect the
grant of another option.
3. EXTENT OF OPTION IF EMPLOYMENT CONTINUES
If the Director has continued to be a Director of the Company on the following
dates, the Director may exercise this option for the number of shares set
opposite the applicable date:
90 days from the date hereof shares
180 days from the date hereof -an additional
shares
270 days from the date hereof -an additional
shares
Immediately prior to the commencement of -an additional
the 1994 Annual Meeting of Shareholders shares
(hereinafter referred to individually as a "Vesting Date" and collectively as
the "Vesting Dates".)
The foregoing rights are cumulative and, while the Director continues to be a
Director of the Company, may be exercised on and after the respective Vesting
Date up to and including the date which is 3 years after that respective Vesting
Date. All of the foregoing rights are subject to Article4 if the Director
ceases to be a Director of the Company.
<PAGE>
- Page 2 -
4. TERMINATION OF OFFICE
If the Director ceases to be a Director of the Company, no further instalments
of this option shall become exercisable.
5. PARTIAL EXERCISE
Exercise of this option up to the extent above stated may be made in part at any
time and from time to time within the above limits, except that this option may
not be exercised for a fraction of a share unless such exercise is with respect
to the final instalment of stock subject to this option and a fractional share
(or cash, in the discretion of the Company, in lieu thereof) must be issued to
permit the Director to exercise completely such final instalment. Any
fractional share with respect to which an instalment of this option cannot be
exercised because of the limitation contained in the preceding sentence shall
remain subject to this option and shall be available for later purchase by the
Director in accordance with the terms hereof.
6. PAYMENT OF PRICE
The option price is payable in United States dollars and may be paid in cash or
by certified cheque or bank draft, or any combination of the foregoing, equal in
amount to the option price.
7. AGREEMENT TO PURCHASE FOR INVESTMENT
By acceptance of this option, the Director agrees that a purchase of shares
under this option will not be made with a view to their distribution, as that
term is used in the Securities Act of 1933, as amended, unless in the opinion of
counsel to the Company such distribution is in compliance with or exempt from
the registration and prospectus requirements of that Act, and the Director
agrees to sign a certificate to such effect at the time of exercising this
option and agrees that the certificate for the shares so purchased may be
inscribed with a legend to ensure compliance with the Securities Act of 1933.
8. METHOD OF EXERCISING OPTION
Subject to the terms and conditions of this Agreement, this option may be
exercised by written notice to the Company, at the registered office of the
Company, or to such transfer agent as the Company shall designate. Such notice
shall state the election to exercise this option and the number of shares in
respect of which it is being exercised and shall be signed by the person or
persons so exercising this option. Such notice shall be accompanied by payment
of the full purchase price of such shares, and the Company shall deliver a
certificate or certificates representing such shares as soon as practicable
after the notice shall be received. The certificate or certificates for the
shares as to which this option shall have been so exercised shall be registered
in the name of the person or persons so exercising this option (or, if this
option shall be exercised by the Director and if the Director shall so request
in the notice exercising this option, shall be registered in the name of the
Director and another person jointly, with right of survivorship) and shall be
delivered as provided above to or upon the written order of the person or
persons exercising this option. All shares that shall be purchased upon the
exercise of this option as provided herein shall be fully paid and
non-assessable.
<PAGE>
- Page 3 -
9. OPTION NOT TRANSFERABLE
This option is not transferable or assignable except with the consent of the
Company, by will or by the laws of descent and distribution. During the
Director's lifetime only the Director or his permitted assignees can exercise
this option.
10. NO OBLIGATION TO EXERCISE OPTION
The grant and acceptance of this option imposes no obligation on the Director to
exercise it. The Director represents and warrants that no exercise of this
option will be induced by expectation of employment or continued employment of
the Director by the Company or any Related Corporation (as defined in the Plan).
11. NO OBLIGATION TO CONTINUE EMPLOYMENT
The Company and any Related Corporation (as defined in the Plan) are not by the
Plan or this option obligated to continue the Director in employment or as a
Director of the Company.
12. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE
The Director shall have no rights as a stockholder with respect to shares
subject to this Agreement until a stock certificate therefor has been issued to
the Director and is fully paid for. Except as is expressly provided in the
Plan with respect to certain changes in the capitalization of the Company, no
adjustment shall be made for dividends or similar rights for which the record
date is prior to the date such stock certificate is issued.
13. CAPITAL CHANGES AND BUSINESS SUCCESSIONS
The Plan contains provisions covering the treatment of options in a number of
contingencies such as stock splits and amalgamations. Provisions in the Plan
for adjustment with respect to stock subject to options and the related
provisions with respect to successors to the business of the Company are hereby
made applicable hereunder and are incorporated herein by reference. In general,
you should not assume that options necessarily would survive the acquisition of
the Company.
14. EARLY DISPOSITION
The Director agrees to notify the Company in writing immediately after the
Director makes a Disqualifying Disposition of any Common Stock received pursuant
to the exercise of this option. A Disqualifying Disposition is any disposition
(including any sale) of such Common Stock before the LATER of (a) two years
after the date the Director was granted this option or (b) one year after the
date the Director acquired Common Stock by exercising this option. If the
Director has died before such stock is sold, these holding period requirements
do not apply and no Disqualifying Disposition can occur thereafter. The
Director also agrees to provide the Company with any information which it shall
request concerning any such disposition. The Director acknowledges that he or
she will, if a United States taxpayer, forfeit the favourable income tax
treatment otherwise available with respect to the exercise of this incentive
stock option if he or she makes a Disqualifying Disposition of the stock
received on exercise of this option.
<PAGE>
- Page 4 -
15. WITHHOLDING TAXES
If the Company in its discretion determines that it is obligated to withhold tax
with respect to a Disqualifying Disposition (as defined in Article15) of Common
Stock received by the Director on exercise of this option, the Director hereby
agrees that the Company may withhold from the Director's compensation the
appropriate amount of federal, state and local withholding taxes attributable to
such Disqualifying Disposition. If any portion of this option is treated as a
Non-Qualified Option, the Director hereby agrees that the Company may withhold
from the Director's compensation the appropriate amount of federal, state and
local withholding taxes attributable to the Director's exercise of such
Non-Qualified Option. At the Company's discretion, the amount required to be
withheld may be withheld in cash from such compensation, or (with respect to
compensation income attributable to the exercise of this option) in kind from
the Common Stock otherwise deliverable to the Optionee on exercise of this
Option. The Director further agrees that, if the Company does not withhold an
amount from the Director's compensation sufficient to satisfy the Company's
withholding obligation, the Director will reimburse the Company on demand, in
cash, for the amount underwithheld.
16. ACCELERATION AND VESTING OF OPTION FOR BUSINESS COMBINATIONS
If the Company is to be consolidated with or acquired by another entity in an
amalgamation, sale of all or substantially all of the Company's assets or
otherwise (an "Acquisition"), then this option shall, immediately prior to the
consummation of such Acquisition, become fully vested and immediately
exercisable by the Director.
17. PROVISION OF DOCUMENTATION TO DIRECTOR
By signing this Agreement the Director acknowledges receipt of a copy of this
Agreement and a copy of the Company's 1990 Stock Plan.
18. GOVERNING LAW
This Agreement shall be governed by and interpreted in accordance with the
internal laws of the State of Massachusetts if the Director is, at the date
hereof, resident in the United States and otherwise of the Province of Ontario,
Canada.
IN WITNESS WHEREOF the Company and the Director have caused this instrument to
be executed, and the Director whose signature appears below acknowledges receipt
of a copy of the Plan and acceptance of an original copy of this Agreement.
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- ---------------------------------------- ALIAS RESEARCH INC.
DIRECTOR
- ---------------------------------------- By:
Print Name of Director ----------------------------
- ---------------------------------------- -------------------------------
Street Address Title
- ----------------------------------------
City Province/State Postal/Zip Code
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ALIAS RESEARCH INC.
1994 STOCK PLAN
1. PURPOSE. This 1994 Stock Plan (the "Plan") is intended to provide
incentives: (a) to the officers and other employees of Alias Research Inc. (the
"Company"), and of any present or future parent or subsidiary of the Company
(collectively, "Related Corporations"), by providing them with opportunities to
purchase stock in the Company pursuant to options granted hereunder which
qualify as "incentive stock options" ("ISOs") under Section 422(b) of the
Internal Revenue Code of 1986, as amended (the "Code"); (b) to directors,
officers and other employees and consultants of the Company and Related
Corporations by providing them with opportunities to purchase stock in the
Company pursuant to options granted hereunder which do not qualify as ISOs
("Non-Qualified Options"); (c) to directors, officers and other employees and
consultants of the Company and Related Corporations by providing them with
awards of stock in the Company ("Awards"); and (d) to directors, officers and
other employees and consultants of the Company and Related Corporations by
providing them with opportunities to make direct purchases of stock in the
Company ("Purchases"). Both ISOs and Non-Qualified Options are referred to
hereafter individually as an "Option" and collectively as "Options." Options,
Awards and authorizations to make Purchases are referred to hereafter
collectively as "Stock Rights." As used herein, the terms "parent" and
"subsidiary" mean "parent corporation" and "subsidiary corporation,"
respectively, as those terms are defined in Section 424 of the Code.
2. ADMINISTRATION OF THE PLAN.
A. BOARD OR COMMITTEE ADMINISTRATION. The Plan shall be
administered by the Board of Directors of the Company (the "Board"). The Board
may appoint a Stock Plan Committee (the "Committee") of three or more of its
members to administer the Plan. Hereinafter, all references to the "Committee"
shall mean the Board if no Committee has been appointed. Subject to
ratification of the grant or authorization of each Stock Right by the Board (if
so required by law), and subject to the terms of the Plan, the Committee shall
have the authority to (i) determine the employees of the Company and Related
Corporations (from among the class of employees eligible under paragraph 3 to
receive ISOs) to whom ISOs shall be granted, and determine (from among the class
of individuals and entities eligible under paragraph 3 to receive Non-Qualified
Options and Awards and to make Purchases) to whom Non-Qualified Options, Awards
and authorizations to make Purchases may be granted; (ii) determine the time or
times at which Options or Awards shall be granted or Purchases made; (iii)
determine the option price of shares subject to each Option, which price shall
not be less than the minimum price specified in paragraph 6, and the purchase
price of shares subject to each Purchase; (iv) determine whether each Option
granted shall be an ISO or a Non-Qualified Option; (v) determine (subject to
paragraph 7) the time or times when each Option shall become exercisable and the
duration of the exercise period; (vi) determine whether restrictions such as
repurchase options are to be imposed on shares subject to Options, Awards
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and Purchases and the nature of such restrictions, if any, and (vii) interpret
the Plan and prescribe and rescind rules and regulations relating to it. If the
Committee determines to issue a Non-Qualified Option, it shall take whatever
actions it deems necessary, under Section 422 of the Code and the regulations
promulgated thereunder, to ensure that such Option is not treated as an ISO.
The interpretation and construction by the Committee of any provisions of the
Plan or of any Stock Right granted under it shall be final unless otherwise
determined by the Board. The Committee may from time to time adopt such rules
and regulations for carrying out the Plan as it may deem best. No member of the
Board or the Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any Stock Right granted under it.
B. COMMITTEE ACTIONS. Subject to the Company's by- laws, the
Committee may select one of its members as its chairman, and shall hold meetings
at such times and places as it may determine. Acts by a majority of the members
of the Committee, or acts reduced to or approved in writing by a majority of the
members of the Committee shall constitute the valid acts of the Committee. From
time to time the Board may increase the size of the Committee and appoint
additional members thereof, remove members (with or without cause) and appoint
new members in substitution therefor, fill vacancies however caused, or remove
all members of the Committee and thereafter directly administer the Plan.
C. GRANT OF STOCK RIGHTS TO NON-EMPLOYEE DIRECTORS. The granting of
Stock Rights to eligible directors of the Company who are not employees of the
Company shall be made only in accordance with this paragraph 2.C of the Plan.
To the extent the terms of this paragraph 2.C conflict with any other terms of
the Plan, the provisions of paragraph 2.C shall govern.
(i) AUTOMATIC GRANT FOR NON-EMPLOYEE DIRECTORS. Directors of the Company who
are not employees of the Company (a "Non-Employee Director") will be
automatically granted, without further action by the Committee, Options
to purchase Common Shares of the Company in the amounts and with the
vesting schedules set forth below.
Each Non-Employee Director will be granted Options to purchase 10,000
Common Shares. Option grants are to be made each year, on the date of
the meeting of the Directors of the Company held immediately following
the annual meeting of shareholders of the Company, to Non- Employee
Directors having been elected at the annual meeting. So long as the
Non-Employee Director is then continuing to serve as a Director of the
Company, the grant shall become exercisable as to 2,500 Common Shares:
on the dates which are 90, 180 and 270 days, respectively, following the
date of the annual meeting preceding the grant; and on the date of the
next following annual meeting of shareholders, immediately prior to the
commencement of such meeting.
(ii) PRICE. The purchase price of the Common Shares covered by an Option
granted pursuant to paragraph 2.C of this Plan shall be 100% of the fair
market value of such shares on the day the Option is granted. The Option
Price will be subject to adjustment in accordance with the applicable
provisions of paragraph
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13 of this Plan. For purposes of this Plan, the fair market value of a
Common Share on any day shall be determined in accordance with paragraph
6.D.
(iii) ACCELERATION OF VESTING. If the Company is to be consolidated with or
acquired by another entity in a merger, sale of all or substantially all
of the Company's assets or otherwise (an "Acquisition"), then any option
granted under this paragraph 2.C then outstanding shall, immediately
prior to the consummation of such Acquisition, become fully vested and
immediately exercisable by the Director.
(iv) TERMINATION OF OPTION RIGHTS. If the Non-Employee Director ceases to be
a director of the Company for any reason, no further installments of any
Option granted pursuant to the Plan shall become exercisable.
3. ELIGIBLE EMPLOYEES AND OTHERS. ISOs may be granted to any employee
of the Company or any Related Corporation. Those officers and directors of the
Company who are not employees may not be granted ISOs under the Plan.
Non-Qualified Options, Awards and authorizations to make Purchases may be
granted to any employee, officer or director (whether or not also an employee)
or consultant of the Company or any Related Corporation. The Committee may take
into consideration a recipient's individual circumstances in determining whether
to grant a Stock Right. Granting of any Stock Right to any individual or entity
shall neither entitle the recipient to, nor disqualify the recipient from,
participation in any other grant of Stock Rights.
4. STOCK. The stock subject to Stock Rights shall be authorized but
unissued shares of common stock of the Company (the "Common Stock") or shares of
Common Stock reacquired by the Company in any manner. The aggregate number of
shares which may be issued pursuant to the Plan is 1,000,000, subject to
adjustment as provided in paragraph 13.If any Stock Right granted under the Plan
shall expire or terminate for any reason without having been exercised in full
or shall cease for any reason to be exercisable in whole or in part, or if the
Company shall reacquire any unvested shares issued pursuant to any Award
or Purchase, the unpurchased shares subject to such Stock Right or the unvested
shares so reacquired by the Company shall again be available for grants of Stock
Rights under the Plan.
5. GRANTING OF STOCK RIGHTS. Stock Rights may be granted under the
Plan at any time on or after March 9, 1994 and prior to March 9, 2004. The date
of grant of a Stock Right under the Plan will be the date specified by the
Committee at the time it grants the Stock Right; provided, however, that such
date shall not be prior to the date on which the Committee acts to approve the
grant.
6. MINIMUM OPTION PRICE; ISO LIMITATIONS.
A. PRICE FOR NON-QUALIFIED OPTIONS. The exercise price per share
specified in the agreement relating to each Non- Qualified Option granted under
the Plan shall in no event be less than the minimum legal consideration required
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therefor under the laws of the Province of Ontario or the laws of any
jurisdiction in which the Company or its successors in interest may be
organized.
B. PRICE FOR ISOS. The exercise price per share specified in the
agreement relating to each ISO granted under the Plan shall not be less than the
fair market value per share of Common Stock on the date of such grant. In the
case of an ISO to be granted to an employee owning stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or any Related Corporation, the price per share specified in the
agreement relating to such ISO shall not be less than one hundred ten percent
(110%) of the fair market value per share of Common Stock on the date of grant.
For purposes of determining stock ownership under this paragraph, the rules of
Section 424(d) of the Code shall apply.
C. $100,000 ANNUAL LIMITATION ON ISO VESTING. Each eligible
employee may be granted Options treated as ISOs only to the extent that, in the
aggregate under this Plan and all incentive stock option plans of the Company
and any Related Corporation, ISOs do not become exercisable for the first time
by such employee during any calendar year with respect to stock having a fair
market value (determined at the time the ISOs were granted) in excess of
$100,000. The Company intends to designate any Options granted in excess of
such limitation as Non-Qualified Options.
D. DETERMINATION OF FAIR MARKET VALUE. If, at the time an Option
is granted under the Plan, the Company's Common Stock is publicly traded, "fair
market value" shall be determined as of the last business day for which the
prices or quotes discussed in this sentence are available prior to the date such
Option is granted and shall mean (i) the average (on that date) of the high and
low prices of the Common Stock on the principal national securities exchange on
the Common Stock is traded, if the Common Stock is then traded on a national
securities exchange; or (ii) the last reported sale price (on that date) of the
Common Stock on the NASDAQ National Market List, if the Common Stock is not then
traded on a national securities exchange; or (iii) the closing bid price (or
average of bid prices) last quoted (on that date) by an established quotation
service for over-the-counter securities, if the Common Stock is not reported on
the NASDAQ National Market List. However, if the Common Stock is not publicly
traded at the time an Option is granted under the Plan, "fair market value"
shall be deemed to be the fair value of the Common Stock as determined by the
Committee after taking into consideration all factors which it deems
appropriate, including, without limitation, recent sale and offer prices of the
Common Stock in private transactions negotiated at arm's length.
7. OPTION DURATION. Subject to earlier termination as provided in
paragraphs 9 and 10 or as set forth in the agreement relating to such Option,
each Option shall expire on the date specified by the Committee, but not more
than (i) ten years from the date of grant in the case of Options generally and
(ii) five years from the date of grant in the case of ISOs granted to an
employee owning stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any Related
Corporation, as determined under paragraph 6(B); provided, however, that in the
event an Option would expire during a black-out period, as such period is
determined by the Board, such Option shall be extended until the
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5
tenth day following the expiration of such black-out period. Subject to earlier
termination as provided in paragraphs 9 and 10, the term of each ISO shall be
the term set forth in the original instrument granting such ISO, except with
respect to any part of such ISO that is converted into a Non-Qualified Option
pursuant to paragraph 16.
8. EXERCISE OF OPTION. Subject to the provisions of paragraphs 9
through 12, each Option granted under the Plan shall be exercisable as follows:
A. VESTING. The Option shall either be fully exercisable on the
date of grant or shall become exercisable thereafter in such installments as the
Committee may specify.
B. FULL VESTING OF INSTALLMENTS. Once an installment becomes
exercisable it shall remain exercisable until expiration or termination of the
Option, unless otherwise specified by the Committee.
C. PARTIAL EXERCISE. Each Option or installment may be exercised
at any time or from time to time, in whole or in part, for up to the total
number of shares with respect to which it is then exercisable.
D. ACCELERATION OF VESTING. The Committee shall have the right to
accelerate the date that any installment of any Option becomes exercisable;
provided that the Committee shall not, without the consent of an optionee,
accelerate the permitted exercise date of any installment of any Option granted
to any employee as an ISO (and not previously converted into a Non-Qualified
Option pursuant to paragraph 16) if such acceleration would violate the annual
vesting limitation contained in Section 422(d) of the Code, as described in
paragraph 6(C).
9. TERMINATION OF EMPLOYMENT. Unless otherwise specified in the
agreement relating to such ISO, if an ISO optionee ceases to be employed by the
Company and all Related Corporations other than by reason of death or disability
as defined in paragraph 10, no further installments of his or her ISOs shall
become exercisable, and his or her ISOs shall terminate after the passage of
ninety (90) days from the date of termination of his or her employment, but in
no event later than on their specified expiration dates, except to the extent
that such ISOs (or unexercised installments thereof) have been converted into
Non- Qualified Options pursuant to paragraph 16. For purposes of this paragraph
9, employment shall be considered as continuing uninterrupted during any bona
fide leave of absence (such as those attributable to illness, military
obligations or governmental service) provided that the period of such leave does
not exceed 90 days or, if longer, any period during which such optionee's right
to reemployment is guaranteed by statute. A bona fide leave of absence with the
written approval of the Committee shall not be considered an interruption of
employment under this paragraph 9, provided that such written approval
contractually obligates the Company or any Related Corporation to continue the
employment of the optionee after the approved period of absence. ISOs granted
under the Plan shall not be affected by any change of employment within or among
the Company and Related Corporations, so long as the optionee continues to be an
employee of the Company or any Related Corporation. Nothing in the Plan shall
be
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6
deemed to give any grantee of any Stock Right the right to be retained in
employment or other service by the Company or any Related Corporation for any
period of time.
10. DEATH; DISABILITY.
A. DEATH. If an ISO optionee ceases to be employed by the Company
and all Related Corporations by reason of his or her death, any ISO owned by
such optionee may be exercised, to the extent otherwise exercisable on the date
of his or her death, by his or her estate, personal representative or
beneficiary who has acquired the ISO by will or by the laws of descent and
distribution, at any time prior to the earlier of (i) the specified expiration
date of the ISO or (ii) the date 180 days following the date of the optionee's
death.
B. DISABILITY. If an ISO optionee ceases to be employed by the
Company and all Related Corporations by reason of his or her disability, such
optionee shall have the right to exercise any ISO held by him or her on the date
of termination of employment, to the extent otherwise exercisable on that date,
at any time prior to the earlier of the specified expiration date of the ISO or
180 days from the date of the termination of
the optionee's employment. For the purposes of the Plan, the term "disability"
shall mean "permanent and total disability" as defined in Section 22(e)(3) of
the Code or any successor statute.
11. ASSIGNABILITY OF OPTIONS. No ISO shall be assignable or
transferable by the optionee except by will or the laws of descent and
distribution. During the lifetime of the optionee, each ISO shall be
exercisable only by such optionee. The terms of the individual Non- Qualified
Option agreement entered into by each optionee shall provide for the
assignability or non- assignability of the Non-Qualified Option.
12. TERMS AND CONDITIONS OF OPTIONS. Options shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including restrictions applicable to shares of Common Stock
issuable upon exercise of Options. The Committee may specify that any
Non-Qualified Option shall be subject to the restrictions set forth herein with
respect to ISOs, or to such other termination and cancellation provisions as the
Committee may determine. The Committee may from time to time confer authority
and responsibility on one or more of its own members and/or one or more officers
of the Company to execute and deliver such instruments. The proper officers of
the Company are authorized and directed to take any and all action necessary or
advisable from time to time to carry out the terms of such instruments.
13. ADJUSTMENTS. Upon the occurrence of any of the following events, an
optionee's rights with respect to Options granted to such optionee hereunder
shall be adjusted as hereinafter provided, unless otherwise specifically
provided in the written agreement between the optionee and the Company relating
to such Option:
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A. STOCK DIVIDENDS AND STOCK SPLITS. If the shares of Common
Stock shall be subdivided or combined into a greater or smaller number of shares
or if the Company shall issue any shares of Common Stock as a stock dividend on
its outstanding Common Stock, the number of shares of Common Stock deliverable
upon the exercise of Options shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination or stock dividend.
B. CONSOLIDATIONS OR AMALGAMATIONS. If the Company is to be
consolidated with or acquired by another entity in an amalgamation, sale of all
or substantially all of the Company's assets or otherwise (an "Acquisition"),
the Committee or the board of directors of any entity assuming the obligations
of the Company hereunder (the "Successor Board") shall, as to outstanding
Options, either (i) make appropriate provision for the continuation of such
Options by substituting on an equitable basis for the shares then subject to
such Options either (a) the consideration payable with respect to the
outstanding shares of Common Stock in connection with the Acquisition, (b)
shares of stock of the surviving corporation or (c) such other securities as the
Successor Board deems appropriate, the fair market value of which shall not
materially exceed the fair market value of the shares of Common Stock subject to
such Options immediately preceding the Acquisition; or (ii) upon written notice
to the optionees, provide that all Options must be exercised, to the extent then
exercisable, within a specified number of days of the date of such notice, at
the end of which period the Options shall terminate; or (iii) terminate all
Options in exchange for a cash payment equal to the excess of the fair market
value of the shares subject to such Options (to the extent then exercisable)
over the exercise price thereof.
C. RECAPITALIZATION OR REORGANIZATION. In the event of a
recapitalization or reorganization of the Company (other than a transaction
described in subparagraph B above) pursuant to which securities of the Company
or of another corporation are issued with respect to the outstanding shares of
Common Stock, an optionee upon exercising an Option shall be entitled to receive
for the purchase price paid upon such exercise the securities the optionee would
have received if he or she had exercised the Option prior to such
recapitalization or reorganization.
D. MODIFICATION OF ISOS. Notwithstanding the foregoing, any
adjustments made pursuant to subparagraphs A, B or C with respect to ISOs shall
be made only after the Committee, after consulting with counsel for the Company,
determines whether such adjustments would constitute a "modification" of such
ISOs (as that term is defined in Section 424 of the Code) or would cause any
adverse tax consequences for the holders of such ISOs. If the Committee
determines that such adjustments made with respect to ISOs would constitute a
modification of such ISOs or would cause adverse tax consequences to the
holders, it may refrain from making such adjustments.
E. DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, each Option will terminate
immediately prior to the consummation of such proposed action or at such other
time and subject to such other conditions as shall be determined by the
Committee.
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F. ISSUANCES OF SECURITIES. Except as expressly provided herein,
no issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
subject to Options. No adjustments shall be made for dividends paid in cash or
in property other than securities of the Company.
G. FRACTIONAL SHARES. No fractional shares shall be issued under
the Plan and the optionee shall receive from the Company cash in lieu of such
fractional shares.
H. ADJUSTMENTS. Upon the happening of any of the events described
in subparagraphs A, B or C above, the class and aggregate number of shares set
forth in paragraph 4 hereof that are subject to Stock Rights which previously
have been or subsequently may be granted under the Plan shall also be
appropriately adjusted to reflect the events described in such subparagraphs.
The Committee or the Successor Board shall determine the specific adjustments to
be made under this paragraph 13 and, subject to paragraph 2, its determination
shall be conclusive.
If any person or entity owning restricted Common Stock obtained by
exercise of a Stock Right granted hereunder receives shares or securities, cash
or other property in connection with a corporate transaction described in
subparagraphs A, B or C above as a result of owning such restricted Common
Stock, such shares or securities, cash or other property shall be subject to all
of the conditions and restrictions applicable to the restricted Common Stock
with respect to which such shares or securities, cash or other property was
issues unless otherwise determined by the Committee or the Successor Board.
14. MEANS OF EXERCISING STOCK RIGHTS. A Stock Right (or any part or
installment thereof) shall be exercised by giving written notice to the Company
at its registered office. Such notice shall identify the Stock Right being
exercised and specify the number of shares as to which such Stock Right is being
exercised, accompanied by full payment of the purchase price therefor either (a)
in cash or by check, (b) at the discretion of the Committee, by delivery of the
grantee's personal recourse note bearing interest payable not less than annually
at no less than 100% of the lowest applicable Federal rate, as defined in
Section 1274(d) of the Code, or (c) at the discretion of the Committee, by any
combination of (a) and (b) above. If the Committee exercises its discretion to
permit payment of the exercise price of an ISO by means of the methods set forth
in clauses (b) or (c) of the preceding sentence, such discretion shall be
exercised in writing at the time of the grant of the ISO in question. The
holder of a Stock Right shall not have the rights of a shareholder with respect
to the shares covered by such Stock Right until the date of issuance of a stock
certificate to such holder for such shares. Except as expressly provided above
in paragraph 13 with respect to changes in capitalization and stock dividends,
no adjustment shall be made for dividends or similar rights for which the record
date is before the date such stock certificate is issued.
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15. TERM AND AMENDMENT OF PLAN. This Plan was adopted by the Board on
March 9, 1994. The Plan will be submitted for approval by the stockholders of
the Company at the next Meeting of Stockholders or, in lieu thereof, by written
consent. If the approval of stockholders is not obtained prior to March 9,
1995, any grants of ISOs under the Plan will be treated as grants of
Non-Qualified Options. Subject to the provisions of paragraph 5 above, Options
intended to qualify as ISOs may be granted under the Plan prior to the date of
stockholder approval of the Plan. The Plan shall expire at the end of the day on
March 8, 2004 (except as to Options outstanding on that date). The Board may
terminate or amend the Plan in any respect at any time, except that, without the
approval of the stockholders obtained within 12 months before or after the Board
adopts a resolution authorizing any of the following actions: (a) the total
number of shares that may be issued under the Plan may not be increased (except
by adjustment pursuant to paragraph 13); (b) the provisions of paragraph 3
regarding eligibility for grants of ISOs may not be modified; (c) the provisions
of paragraph 6(B) regarding the exercise price at which shares may be offered
pursuant to ISOs may not be modified (except by adjustment pursuant to paragraph
13); and (d) the expiration date of the Plan may not be extended. The
restrictions contained in clauses (a) through (d) of the preceding sentence
shall not apply after March 9, 1995 if stockholders have not theretofore
approved the Plan as provided in the first sentence of this paragraph. Except
as otherwise provided in this paragraph 15, in no event may action of the Board
or stockholders alter or impair the rights of a grantee, without such grantee's
consent, under any Stock Right previously granted to such grantee.
16. CONVERSION OF ISOS INTO NON-QUALIFIED OPTIONS. The Committee, at
the written request or with the written consent of any optionee, may in its
discretion take such actions as may be necessary to convert such optionee's ISOs
(or any installments or portions of installments thereof) that have not been
exercised on the date of conversion into Non-Qualified Options at any time prior
to the expiration of such ISOs, regardless of whether the optionee is an
employee of the Company or a Related Corporation at the time of such conversion.
Such actions may include, but shall not be limited to, extending the exercise
period or reducing the exercise price of the appropriate installments of such
ISOs. At the time of such conversion, the Committee (with the consent of the
optionee) may impose such conditions on the exercise of the resulting
Non-Qualified Options as the Committee in its discretion may determine, provided
that such conditions shall not be inconsistent with this Plan. Nothing in the
Plan shall be deemed to give any optionee the right to have such optionee's ISOs
converted into Non-Qualified Options, and no such conversion shall occur until
and unless the Committee takes appropriate action.
17. APPLICATION OF FUNDS. The proceeds received by the Company from the
sale of shares pursuant to Options granted and Purchases authorized under the
Plan shall be used for general corporate purposes.
18. GOVERNMENTAL REGULATION. The Company's obligation to sell and
deliver shares of the Common Stock under this Plan is subject to the approval of
any governmental authority required in connection with the authorization,
issuance or sale of such shares.
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Government regulations may impose reporting or other obligations on the
Company with respect to the Plan. For example, the Company may be required to
send tax information statements to employees and former employees that exercise
ISOs under the Plan, and the Company may be required to file tax information
returns reporting the income received by grantees of Stock Rights in connection
with the Plan.
19. WITHHOLDING OF ADDITIONAL INCOME TAXES. Upon the exercise of a
Non-Qualified Option, the grant of an Award, the making of a Purchase of Common
Stock for less than its fair market value, the making of a Disqualifying
Disposition (as defined in paragraph 20), the vesting or transfer of restricted
stock or securities acquired on the exercise of a Stock Right hereunder, or the
making of a distribution or other payment with respect to such stock or
securities, the Company may withhold taxes in respect of amounts that constitute
compensation includible in gross income. The Committee in its discretion may
condition (i) the exercise of an Option, (ii) the grant of an Award, (iii) the
making of a Purchase of Common Stock for less than its fair market value, or
(iv) the vesting or transferability of restricted stock or securities acquired
by exercising a Stock Right, on the grantee's making satisfactory arrangement
for such withholding. Such arrangement may include payment by the grantee in
cash or by check of the amount of the withholding taxes or, at the discretion of
the Committee, by the grantee's delivery of previously held shares of Common
Stock or the withholding from the shares of Common Stock otherwise deliverable
upon exercise of a Stock Right shares having an aggregate fair market value
equal to the amount of such withholding taxes.
20. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION. By accepting an ISO
granted under the Plan, each optionee agrees to notify the Company in writing
immediately after a Disqualifying Disposition (as described in Sections 421, 422
and 424 of the Code and regulations thereunder) of any stock acquired pursuant
to the exercise of ISOs granted under the Plan. A Disqualifying Disposition is
generally any disposition occurring on or before the later of (a) the date two
years following the date the ISO was granted or (b) the date one year following
the date the ISO was exercised.
21. GOVERNING LAW; CONSTRUCTION. The validity and construction of the
Plan shall be governed by the laws of the Province of Ontario, or the laws of
any jurisdiction in which the Company or its successors in interest may be
organized. In construing this Plan, the singular shall include the plural and
the masculine and feminine genders shall include the neuter, unless the context
otherwise requires. The validity and construction of the instruments evidencing
Stock Rights granted under the Plan shall be governed by the laws of the
jurisdiction stated in each such instrument; provided, however, that in the
event of a conflict between the Plan and the instrument, the laws of the
jurisdiction governing the Plan shall apply to the instrument and take
precedence.
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[LOGO]
ALIAS RESEARCH INC.
INCENTIVE STOCK OPTION AGREEMENT
Alias Research Inc., an Ontario corporation (the "Company"), hereby grants this
___ day of _____, 199_, to ________ (the "Employee"), an option to purchase a
maximum of _____ shares of its Common Stock at the price of $____ (U.S.) per
share, on the following terms and conditions:
1. GRANT UNDER 1994 STOCK PLAN
This option is granted pursuant to and is governed by the Company's 1994 Stock
Plan (the "Plan") and, unless the context otherwise requires, terms used herein
shall have the same meaning as in the Plan. Determinations made in connection
with this option pursuant to the Plan shall be governed by the Plan as it exists
on this date.
2. GRANT AS INCENTIVE STOCK OPTION; OTHER OPTIONS
This option is intended to qualify as an incentive stock option under Section
422A of the Internal Revenue Code of 1986 (the "Code"). This option is in
addition to any other options heretofore or hereafter granted to the Employee by
the Company, but a duplicate original of this instrument shall not effect the
grant of another option.
3. EXTENT OF OPTION IF EMPLOYMENT CONTINUES
If the Employee has continued to be employed by the Company on the following
dates, the Employee may exercise this option for the number of shares set
opposite the applicable date:
One year from the date hereof - _____shares
Two years from the date hereof - an additional _____ shares
Three years from the date hereof - an additional _____ shares
Four years from the date hereof - an additional _____ shares
(hereinafter referred to individually as a "Vesting Date" and collectively as
the "Vesting Dates".)
The foregoing rights are cumulative and, while the Employee continues to be
employed by the Company, may be exercised on and after the respective Vesting
Date up to and including the date which is 3 years after that respective Vesting
Date. All of the foregoing rights are subject to Articles 4 and 5, as
appropriate, if the Employee ceases to be employed by the Company or dies or
becomes disabled while in the employ of the Company.
<PAGE>
- Page 2 -
4. TERMINATION OF EMPLOYMENT
If the Employee ceases to be employed by the Company, other than by reason of
death or disability as defined in Article 5, no further instalments of this
option shall become exercisable and this option shall terminate after the
passage of ninety (90) days from the date employment ceases, but in no event
later than the scheduled expiration date. In such a case, the Employee's only
rights hereunder shall be those which are properly exercised before the
termination of this option.
5. DEATH; DISABILITY
If the Employee dies while in the employ of the Company, this option may be
exercised, to the extent of the number of shares with respect to which the
Employee could have exercised it on the date of his death, by his estate,
personal representative or beneficiary to whom this option has been assigned
pursuant to Article 10, at any time within 180 days after the date of death, but
not later than the scheduled expiration date. If the Employee ceases to be
employed by the Company by reason of his disability (as defined in the Plan),
this option may be exercised, to the extent of the number of shares with respect
to which he could have exercised it on the date of the termination of his
employment, at any time within 180 days after such termination, but not later
than the scheduled expiration date. At the expiration of such 180-day period or
the scheduled expiration date, whichever is the earlier, this option shall
terminate and the only rights hereunder shall be those as to which the option
was properly exercised before such termination.
6. PARTIAL EXERCISE
Exercise of this option up to the extent above stated may be made in part at any
time and from time to time within the above limits, except that this option may
not be exercised for a fraction of a share unless such exercise is with respect
to the final instalment of stock subject to this option and a fractional share
(or cash, in the discretion of the Company, in lieu thereof) must be issued to
permit the Employee to exercise completely such final instalment. Any
fractional share with respect to which an instalment of this option cannot be
exercised because of the limitation contained in the preceding sentence shall
remain subject to this option and shall be available for later purchase by the
Employee in accordance with the terms hereof.
7. PAYMENT OF PRICE
[Person signing on behalf of the Company must initial one of the two following
clauses.] The option price is payable in United States dollars and may be paid:
(a) in cash or by certified cheque or bank draft, or any combination of the
foregoing, equal in amount to the option price.
----------
(Initials)
(b) in cash, by certified cheque or bank draft, by delivery of the Employee's
personal recourse note bearing interest payable not less than annually at
no less than 100% of the lowest applicable Federal rate, as defined in
Section 1274(d) of the Code, or by any combination of the foregoing,
equal in amount to the option price.
----------
(Initials)
<PAGE>
- Page 3 -
8. AGREEMENT TO PURCHASE FOR INVESTMENT
By acceptance of this option, the Employee agrees that a purchase of shares
under this option will not be made with a view to their distribution, as that
term is used in the Securities Act of 1933, as amended, unless in the opinion of
counsel to the Company such distribution is in compliance with or exempt from
the registration and prospectus requirements of that Act, and the Employee
agrees to sign a certificate to such effect at the time of exercising this
option and agrees that the certificate for the shares so purchased may be
inscribed with a legend to ensure compliance with the Securities Act of 1933.
9. METHOD OF EXERCISING OPTION
Subject to the terms and conditions of this Agreement, this option may be
exercised by written notice to the Company, at the registered office of the
Company, or to such transfer agent as the Company shall designate. Such notice
shall state the election to exercise this option and the number of shares in
respect of which it is being exercised and shall be signed by the person or
persons so exercising this option. Such notice shall be accompanied by payment
of the full purchase price of such shares, and the Company shall deliver a
certificate or certificates representing such shares as soon as practicable
after the notice shall be received. The certificate or certificates for the
shares as to which this option shall have been so exercised shall be registered
in the name of the person or persons so exercising this option (or, if this
option shall be exercised by the Employee and if the Employee shall so request
in the notice exercising this option, shall be registered in the name of the
Employee and another person jointly, with right of survivorship) and shall be
delivered as provided above to or upon the written order of the person or
persons exercising this option. In the event this option shall be exercised,
pursuant to Article 5 hereof, by any person or persons other than the Employee,
such notice shall be accompanied by appropriate proof of the right of such
person or persons to exercise this option. All shares that shall be purchased
upon the exercise of this option as provided herein shall be fully paid and
non-assessable.
10. OPTION NOT TRANSFERABLE
This option is not transferable or assignable except by will or by the laws of
descent and distribution. During the Employee's lifetime only the Employee can
exercise this option.
11. NO OBLIGATION TO EXERCISE OPTION
The grant and acceptance of this option imposes no obligation on the Employee to
exercise it. The Employee represents and warrants that no exercise of this
option will be induced by expectation of employment or continued employment of
the Employee by the Company or any Related Corporation (as defined in the Plan).
12. NO OBLIGATION TO CONTINUE EMPLOYMENT
The Company and any Related Corporation (as defined in the Plan) are not by the
Plan or this option obligated to continue the Employee in employment.
13. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE
The Employee shall have no rights as a stockholder with respect to shares
subject to this Agreement until a stock certificate therefor has been issued to
the Employee and is fully paid for. Except as is expressly provided in the
Plan with respect to certain changes in the capitalization of the Company, no
adjustment shall be made for dividends or similar rights for which the record
date is prior to the date such stock certificate is issued.
<PAGE>
- Page 4 -
14. CAPITAL CHANGES AND BUSINESS SUCCESSIONS
The Plan contains provisions covering the treatment of options in a number of
contingencies such as stock splits and amalgamations. Provisions in the Plan
for adjustment with respect to stock subject to options and the related
provisions with respect to successors to the business of the Company are hereby
made applicable hereunder and are incorporated herein by reference. In general,
you should not assume that options necessarily would survive the acquisition of
the Company. In particular, without affecting the generality of the foregoing,
it is understood that for the purposes of Articles 3 through 5 hereof, both
inclusive, employment by the Company includes employment by a Related
Corporation as defined in the Plan.
15. EARLY DISPOSITION
The Employee agrees to notify the Company in writing immediately after the
Employee makes a Disqualifying Disposition of any Common Stock received pursuant
to the exercise of this option. A Disqualifying Disposition is any disposition
(including any sale) of such Common Stock before the LATER of (a) two years
after the date the Employee was granted this option or (b) one year after the
date the Employee acquired Common Stock by exercising this option. If the
Employee has died before such stock is sold, these holding period requirements
do not apply and no Disqualifying Disposition can occur thereafter. The
Employee also agrees to provide the Company with any information which it shall
request concerning any such disposition. The Employee acknowledges that he or
she will, if a United States taxpayer, forfeit the favourable income tax
treatment otherwise available with respect to the exercise of this incentive
stock option if he or she makes a Disqualifying Disposition of the stock
received on exercise of this option.
16. WITHHOLDING TAXES
If the Company in its discretion determines that it is obligated to withhold tax
with respect to a Disqualifying Disposition (as defined in Article 15) of Common
Stock received by the Employee on exercise of this option, the Employee hereby
agrees that the Company may withhold from the Employee's wages the appropriate
amount of federal, state and local withholding taxes attributable to such
Disqualifying Disposition. If any portion of this option is treated as a
Non-Qualified Option, the Employee hereby agrees that the Company may withhold
from the Employee's wages the appropriate amount of federal, state and local
withholding taxes attributable to the Employee's exercise of such Non-Qualified
Option. At the Company's discretion, the amount required to be withheld may be
withheld in cash from such wages, or (with respect to compensation income
attributable to the exercise of this option) in kind from the Common Stock
otherwise deliverable to the Optionee on exercise of this Option. The Employee
further agrees that, if the Company does not withhold an amount from the
Employee's wages sufficient to satisfy the Company's withholding obligation, the
Employee will reimburse the Company on demand, in cash, for the amount
underwithheld.
17. NO EXERCISE OF OPTION IF EMPLOYMENT TERMINATED FOR MISCONDUCT
If the employment of the Employee is terminated for "Misconduct", this option
shall terminate on the date of such termination of employment and shall
thereupon not be exercisable to any extent whatsoever. "Misconduct" is conduct,
as determined by the Board of Directors, involving one or more of the following:
(i) the substantial and continuing failure of the Employee to render services
to the Company in accordance with his assigned duties; (ii) a determination by
two- thirds of the members of the Board of Directors that the Employee has
inadequately performed the duties of his employment; (iii) disloyalty, gross
negligence, dishonesty or breach of fiduciary duty to the Company; (iv) the
commission of an act of embezzlement, fraud, disloyalty, dishonesty or
deliberate disregard of the rules or policies of the Company which results in
loss, damage or injury to the Company, whether directly or indirectly; (v) the
unauthorized disclosure of any trade secret or confidential information of the
Company; or (vi) the commission of an act which constitutes unfair competition
with the Company or which induces any
<PAGE>
- Page 5 -
customer of the Company to breach a contract with the Company. In making such
determination, the Board of Directors shall act fairly and in utmost good faith
and shall give the Employee an opportunity to appear and be heard at a hearing
before the Board of Directors or any Committee and present evidence on his
behalf. For the purposes of this Article 17, termination of employment shall be
deemed to occur when the Employee receives notice that his employment is
terminated.
18. ACCELERATION AND VESTING OF OPTION FOR BUSINESS COMBINATIONS
If the Company is to be consolidated with or acquired by another entity in an
amalgamation, sale of all or substantially all of the Company's assets or
otherwise (an "Acquisition"), then this option shall, immediately prior to the
consummation of such Acquisition, become fully vested and immediately
exercisable by the Employee.
19. PROVISION OF DOCUMENTATION TO EMPLOYEE
By signing this Agreement the Employee acknowledges receipt of a copy of this
Agreement and a copy of the Company's 1994 Stock Plan.
20. GOVERNING LAW
This Agreement shall be governed by and interpreted in accordance with the
internal laws of the State of Massachusetts if the Employee is, at the date
hereof, employed in the United States and otherwise of the Province of Ontario,
Canada.
IN WITNESS WHEREOF the Company and the Employee have caused this instrument to
be executed, and the Employee whose signature appears below acknowledges receipt
of a copy of the Plan and acceptance of an original copy of this Agreement.
- -------------------------------------- ALIAS RESEARCH INC.
EMPLOYEE
- --------------------------------------- By:
Print Name of Employee --------------------------------
- --------------------------------------- -----------------------------------
Street Address Title
- ---------------------------------------
City Province/State Postal/Zip Code
NOTE: PERSON SIGNING ON BEHALF OF THE COMPANY MUST INITIAL ONE OF THE TWO
CLAUSES UNDER ARTICLE 7 ABOVE.
<PAGE>
ALIAS RESEARCH INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
Alias Research Inc., an Ontario corporation (the "Company"), hereby grants this
day of , 19 , to (the
"Optionee"), an option to purchase a maximum of shares of its Common
Stock at the price of $ (U.S.) per share, on the following terms and
conditions:
1. GRANT UNDER 1994 STOCK PLAN
This option is granted pursuant to and is governed by the Company's 1994 Stock
Plan (the "Plan") and, unless the context otherwise requires, terms used herein
shall have the same meaning as in the Plan. Determinations made in connection
with this option pursuant to the Plan shall be governed by the Plan as it exists
on this date.
2. GRANT AS NON-QUALIFIED OPTION; OTHER OPTIONS
This option shall be treated for United States income tax purposes as a
Non-Qualfied Option (rather than an incentive stock option), and the Board of
Directors will take appropriate action, if necessary, to achieve this result.
This option is in addition to any other options heretofore or hereafter granted
to the Optionee by the Company, but a duplicate original of this instrument
shall not effect the grant of another option.
3. EXTENT OF OPTION IF BUSINESS RELATIONSHIP CONTINUES
If the Optionee has continued to serve the Company or any Related Corporation in
the capacity of an employee, officer, director or consultant (such service is
described herein as maintaining or being involved in a "Business Relationship"
with the Company) on the following dates, the Optionee may exercise this option
for the number of shares set opposite the applicable date:
One year from the date hereof - shares
Two years from the date hereof -an additional shares
Three years from the date hereof -an additional shares
Four years from the date hereof -an additional shares
(hereinafter referred to individually as a "Vesting Date" and collectively as
the "Vesting Dates".)
The foregoing rights are cumulative and, while the Optionee continues to
maintain a Business Relationship with the Company, may be exercised on and after
the
<PAGE>
- Page 2 -
respective Vesting Date up to and including the date which is 3 years after that
respective Vesting Date. All of the foregoing rights are subject to Articles 4
and 5, as appropriate, if the Optionee ceases to maintain a Business
Relationship with the Company or dies, becomes disabled or undergoes dissolution
while involved in a Business Relationship with the Company.
4. TERMINATION OF BUSINESS RELATIONSHIP
If the Optionee ceases to maintain a Business Relationship with the Company,
other than by reason of death or disability as defined in Article 5, no further
instalments of this option shall become exercisable and this option shall
terminate after the passage of sixty (60) days from the date the Business
Relationship ceases, but in no event later than the scheduled expiration date.
In such a case, the Optionee's only rights hereunder shall be those which are
properly exercised before the termination of this option.
5. DEATH; DISABILITY; DISSOLUTION
If the Optionee is a natural person who dies while involved in a Business
Relationship with the Company, this option may be exercised, to the extent of
the number of shares with respect to which the Optionee could have exercised it
on the date of his death, by his estate, personal representative or beneficiary
to whom this option has been assigned pursuant to Article 10, at any time within
180 days after the date of death, but not later than the scheduled expiration
date. If the Optionee is a natural person whose Business Relationship with the
Company is terminated by reason of his disability (as defined in the Plan), this
option may be exercised, to the extent of the number of shares with respect to
which the Optionee could have exercised it on the date the Business Relationship
was terminated, at any time within 180 days after the date of such termination,
but not later than the scheduled expiration date. At the expiration of such
180-day period or the scheduled expiration date, whichever is the earlier, this
option shall terminate and the only rights hereunder shall be those as to which
the option was properly exercised before such termination. If Optionee is a
corporation, partnership, trust or other entity that is dissolved, liquidated,
becomes insolvent or enters into a merger or acquisition with respect to which
such optionee is not the surviving entity at the time when such entity is
involved in a Business Relationship with the Company, this Option shall
immediately terminate as of the date of such event, and the only rights
hereunder shall be those as to which this option was properly exercised before
such dissolution or other event.
6. PARTIAL EXERCISE
Exercise of this option up to the extent above stated may be made in part at any
time and from time to time within the above limits, except that this option may
not be exercised for a fraction of a share unless such exercise is with respect
to the final instalment of stock subject to this option and a fractional share
(or cash, in the discretion of the Company, in lieu thereof) must be issued to
permit the Optionee to
<PAGE>
- Page 3 -
exercise completely such final instalment. Any fractional share with respect to
which an instalment of this option cannot be exercised because of the limitation
contained in the preceding sentence shall remain subject to this option and
shall be available for later purchase by the Optionee in accordance with the
terms hereof.
7. PAYMENT OF PRICE
The option price is payable in United States dollars and may be paid in cash or
by certified cheque or bank draft, or any combination of the foregoing, equal in
amount to the option price.
8. AGREEMENT TO PURCHASE FOR INVESTMENT
By acceptance of this option, the Optionee agrees that a purchase of shares
under this option will not be made with a view to their distribution, as that
term is used in the Securities Act of 1933, as amended, unless in the opinion of
counsel to the Company such distribution is in compliance with or exempt from
the registration and prospectus requirements of that Act, and the Optionee
agrees to sign a certificate to such effect at the time of exercising this
option and agrees that the certificate for the shares so purchased may be
inscribed with a legend to ensure compliance with that Act.
9. METHOD OF EXERCISING OPTION
Subject to the terms and conditions of this Agreement, this option may be
exercised by written notice to the Company, at the registered office of the
Company, or to such transfer agent as the Company shall designate. Such notice
shall state the election to exercise this option and the number of shares in
respect of which it is being exercised and shall be signed by the person or
persons so exercising this option. Such notice shall be accompanied by payment
of the full purchase price of such shares, and the Company shall deliver a
certificate or certificates representing such shares as soon as practicable
after the notice shall be received. The certificate or certificates for the
shares as to which this option shall have been so exercised shall be registered
in the name of the person or persons so exercising this option (or, if this
option shall be exercised by the Optionee and if the Optionee shall so request
in the notice exercising this option, shall be registered in the name of the
Optionee and another person jointly, with right of survivorship) and shall be
delivered as provided above to or upon the written order of the person or
persons exercising this option. In the event this option shall be exercised,
pursuant to Article5 hereof, by any person or persons other than the Optionee,
such notice shall be accompanied by appropriate proof of the right of such
person or persons to exercise this option. All shares that shall be purchased
upon the exercise of this option as provided herein shall be fully paid and
non-assessable.
<PAGE>
- Page 4 -
10. OPTION NOT TRANSFERABLE
This option is not transferable or assignable except by will or by the laws of
descent and distribution. During the Optionee's lifetime only the Optionee can
exercise this option.
11. NO OBLIGATION TO EXERCISE OPTION
The grant and acceptance of this option imposes no obligation on the Optionee to
exercise it.
12. NO OBLIGATION TO CONTINUE BUSINESS RELATIONSHIP
The Company and any Related Corporations are not by the Plan or this option
obligated to continue to maintain a Business Relationship with the Optionee.
13. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE
The Optionee shall have no rights as a stockholder with respect to shares
subject to this Agreement until a stock certificate therefor has been issued to
the Optionee and is fully paid for. Except as is expressly provided in the
Plan with respect to certain changes in the capitalization of the Company, no
adjustment shall be made for dividends or similar rights for which the record
date is prior to the date such stock certificate is issued.
14. CAPITAL CHANGES AND BUSINESS SUCCESSIONS
The Plan contains provisions covering the treatment of options in a number of
contingencies such as stock splits and amalgamations. Provisions in the Plan
for adjustment with respect to stock subject to options and the related
provisions with respect to successors to the business of the Company are hereby
made applicable hereunder and are incorporated herein by reference. In general,
you should not assume that options necessarily would survive the acquisition of
the Company. In particular, without affecting the generality of the foregoing,
it is understood that for the purposes of Articles3 through 5 hereof, both
inclusive, employment by the Company includes employment by a Related
Corporation as defined in the Plan.
15. WITHHOLDING TAXES
The Optionee hereby agrees that the Company may withhold from the Optionee's
wages or other remuneration the appropriate amount of federal, state and local
taxes attributable to the Optionee's exercise of any instalment of this option.
At the Company's discretion, the amount required to be withheld may be withheld
in cash
<PAGE>
- Page 5 -
from such wages or other remuneration, or in kind from the Common Stock
otherwise deliverable to the Optionee on exercise of this Option. The Optionee
further agrees that, if the Company does not withhold an amount from the
Optionee's wages or other remuneration sufficient to satisfy the Company's
withholding obligation, the Optionee will reimburse the Company on demand, in
cash, for the amount underwithheld.
16. NO EXERCISE OF OPTION IF BUSINESS RELATIONSHIP TERMINATED FOR MISCONDUCT
If the Business Relationship of the Optionee is terminated for "Misconduct",
this option shall terminate on the date of such termination of the Business
Relationship and shall thereupon not be exercisable to any extent whatsoever.
"Misconduct" is conduct, as determined by the Board of Directors, involving one
or more of the following: (i) the substantial and continuing failure of the
Optionee to render services to the Company in accordance with the terms or
requirements of the business relationship; (ii) a determination by two-thirds of
the members of the Board of Directors that the Optionee has inadequately
performed the requirements of its business relationship; (iii) disloyalty, gross
negligence, dishonesty or breach of fiduciary duty to the Company; (iv) the
commission of an act of embezzlement, fraud, disloyalty, dishonesty or
deliberate disregard of the rules or policies of the Company which results in
loss, damage or injury to the Company, whether directly or indirectly; (v) the
unauthorized disclosure of any trade secret or confidential information of the
Company; or (vi) the commission of an act which constitutes unfair competition
with the Company or which induces any customer of the Company to breach a
contract with the Company. In making such determination, the Board of Directors
shall act fairly and in utmost good faith and shall give the Optionee an
opportunity to appear and be heard at a hearing before the Board of Directors or
any Committee and present evidence on his or her behalf. For the purposes of
this Article 16, termination of the business relationship shall be deemed to
occur when the Optionee receives notice that its business relationship is
terminated.
17. ACCELERATION AND VESTING OF OPTION FOR BUSINESS COMBINATIONS
If the Company is to be consolidated with or acquired by another entity in an
amalgamation, sale of all or substantially all of the Company's assets or
otherwise (an "Acquisition"), then this option shall, immediately prior to the
consummation of such Acquisition, become fully vested and immediately
exercisable by the Optionee.
18. GOVERNING LAW
This Agreement shall be governed by and interpreted in accordance with the
internal laws of the State of Massachusetts if the Optionee, at the date hereof,
provides services to the Company, or any Related Corporation, only in the United
States and otherwise of the Province of Ontario, Canada.
<PAGE>
- Page 6 -
IN WITNESS WHEREOF the Company and the Optionee have caused this instrument to
be executed, and the Optionee whose signature appears below acknowledges receipt
of a copy of the Plan and acceptance of an original copy of this Agreement.
- ----------------------------------- ALIAS RESEARCH INC.
OPTIONEE
- ----------------------------------- By:
Name of Optionee ------------------------------------
- ----------------------------------- ------------------------------------
Street Address Title
- -----------------------------------
City State Zip Code
<PAGE>
ALIAS RESEARCH INC.
STOCK OPTION AGREEMENT
Alias Research Inc., an Ontario corporation (the "Company"), hereby grants this
day of , 19 , to (the
"Director"), an option to purchase a maximum of shares of its
Common Stock at the price of $ (U.S.) per share, on the following
terms and conditions:
1. GRANT UNDER 1994 STOCK PLAN
This option is granted pursuant to and is governed by the Company's 1994 Stock
Plan (the "Plan") and, unless the context otherwise requires, terms used herein
shall have the same meaning as in the Plan. Determinations made in connection
with this option pursuant to the Plan shall be governed by the Plan as it exists
on this date.
2. GRANT AS INCENTIVE STOCK OPTION; OTHER OPTIONS
This option is intended to qualify as an incentive stock option under Section
422A of the Internal Revenue Code of 1986 (the "Code"). This option is in
addition to any other options heretofore or hereafter granted to the Director by
the Company, but a duplicate original of this instrument shall not effect the
grant of another option.
3. EXTENT OF OPTION IF EMPLOYMENT CONTINUES
If the Director has continued to be a Director of the Company on the following
dates, the Director may exercise this option for the number of shares set
opposite the applicable date:
90 days from the date hereof - shares
180 days from the date hereof -an additional shares
270 days from the date hereof -an additional shares
Immediately prior to the commencement of -an additional shares
the 1995 Annual Meeting of Shareholders
(hereinafter referred to individually as a "Vesting Date" and collectively as
the "Vesting Dates".)
The foregoing rights are cumulative and, while the Director continues to be a
Director of the Company, may be exercised on and after the respective Vesting
Date up to and including the date which is 3 years after that respective Vesting
Date. All of the foregoing rights are subject to Article 4 if the Director
ceases to be a Director of the Company.
4. TERMINATION OF OFFICE
If the Director ceases to be a Director of the Company, no further instalments
of this option shall become exercisable.
<PAGE>
- Page 2 -
5. PARTIAL EXERCISE
Exercise of this option up to the extent above stated may be made in part at any
time and from time to time within the above limits, except that this option may
not be exercised for a fraction of a share unless such exercise is with respect
to the final instalment of stock subject to this option and a fractional share
(or cash, in the discretion of the Company, in lieu thereof) must be issued to
permit the Director to exercise completely such final instalment. Any
fractional share with respect to which an instalment of this option cannot be
exercised because of the limitation contained in the preceding sentence shall
remain subject to this option and shall be available for later purchase by the
Director in accordance with the terms hereof.
6. PAYMENT OF PRICE
The option price is payable in United States dollars and may be paid in cash or
by certified cheque or bank draft, or any combination of the foregoing, equal in
amount to the option price.
7. AGREEMENT TO PURCHASE FOR INVESTMENT
By acceptance of this option, the Director agrees that a purchase of shares
under this option will not be made with a view to their distribution, as that
term is used in the Securities Act of 1933, as amended, unless in the opinion of
counsel to the Company such distribution is in compliance with or exempt from
the registration and prospectus requirements of that Act, and the Director
agrees to sign a certificate to such effect at the time of exercising this
option and agrees that the certificate for the shares so purchased may be
inscribed with a legend to ensure compliance with the Securities Act of 1933.
8. METHOD OF EXERCISING OPTION
Subject to the terms and conditions of this Agreement, this option may be
exercised by written notice to the Company, at the registered office of the
Company, or to such transfer agent as the Company shall designate. Such notice
shall state the election to exercise this option and the number of shares in
respect of which it is being exercised and shall be signed by the person or
persons so exercising this option. Such notice shall be accompanied by payment
of the full purchase price of such shares, and the Company shall deliver a
certificate or certificates representing such shares as soon as practicable
after the notice shall be received. The certificate or certificates for the
shares as to which this option shall have been so exercised shall be registered
in the name of the person or persons so exercising this option (or, if this
option shall be exercised by the Director and if the Director shall so request
in the notice exercising this option, shall be registered in the name of the
Director and another person jointly, with right of survivorship) and shall be
delivered as provided above to or upon the written order of the person or
persons exercising this option. All shares that shall be purchased upon the
exercise of this option as provided herein shall be fully paid and
non-assessable.
9. OPTION NOT TRANSFERABLE
This option is not transferable or assignable except with the consent of the
Company, by will or by the laws of descent and distribution. During the
Director's lifetime only the Director or his permitted assignees can exercise
this option.
<PAGE>
- Page 3 -
10. NO OBLIGATION TO EXERCISE OPTION
The grant and acceptance of this option imposes no obligation on the Director to
exercise it. The Director represents and warrants that no exercise of this
option will be induced by expectation of employment or continued employment of
the Director by the Company or any Related Corporation (as defined in the Plan).
11. NO OBLIGATION TO CONTINUE EMPLOYMENT
The Company and any Related Corporation (as defined in the Plan) are not by the
Plan or this option obligated to continue the Director in employment or as a
Director of the Company.
12. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE
The Director shall have no rights as a stockholder with respect to shares
subject to this Agreement until a stock certificate therefor has been issued to
the Director and is fully paid for. Except as is expressly provided in the
Plan with respect to certain changes in the capitalization of the Company, no
adjustment shall be made for dividends or similar rights for which the record
date is prior to the date such stock certificate is issued.
13. CAPITAL CHANGES AND BUSINESS SUCCESSIONS
The Plan contains provisions covering the treatment of options in a number of
contingencies such as stock splits and amalgamations. Provisions in the Plan
for adjustment with respect to stock subject to options and the related
provisions with respect to successors to the business of the Company are hereby
made applicable hereunder and are incorporated herein by reference. In general,
you should not assume that options necessarily would survive the acquisition of
the Company.
14. EARLY DISPOSITION
The Director agrees to notify the Company in writing immediately after the
Director makes a Disqualifying Disposition of any Common Stock received pursuant
to the exercise of this option. A Disqualifying Disposition is any disposition
(including any sale) of such Common Stock before the LATER of (a) two years
after the date the Director was granted this option or (b) one year after the
date the Director acquired Common Stock by exercising this option. If the
Director has died before such stock is sold, these holding period requirements
do not apply and no Disqualifying Disposition can occur thereafter. The
Director also agrees to provide the Company with any information which it shall
request concerning any such disposition. The Director acknowledges that he or
she will, if a United States taxpayer, forfeit the favourable income tax
treatment otherwise available with respect to the exercise of this incentive
stock option if he or she makes a Disqualifying Disposition of the stock
received on exercise of this option.
15. WITHHOLDING TAXES
If the Company in its discretion determines that it is obligated to withhold tax
with respect to a Disqualifying Disposition (as defined in Article 15) of Common
Stock received by the Director on exercise of this option, the Director hereby
agrees that the Company may withhold from the Director's compensation the
appropriate amount of federal, state and local withholding taxes attributable to
such Disqualifying
<PAGE>
- Page 4 -
Disposition. If any portion of this option is treated as a Non-Qualified
Option, the Director hereby agrees that the Company may withhold from the
Director's compensation the appropriate amount of federal, state and local
withholding taxes attributable to the Director's exercise of such Non-Qualified
Option. At the Company's discretion, the amount required to be withheld may be
withheld in cash from such compensation, or (with respect to compensation income
attributable to the exercise of this option) in kind from the Common Stock
otherwise deliverable to the Optionee on exercise of this Option. The Director
further agrees that, if the Company does not withhold an amount from the
Director's compensation sufficient to satisfy the Company's withholding
obligation, the Director will reimburse the Company on demand, in cash, for the
amount underwithheld.
16. ACCELERATION AND VESTING OF OPTION FOR BUSINESS COMBINATIONS
If the Company is to be consolidated with or acquired by another entity in an
amalgamation, sale of all or substantially all of the Company's assets or
otherwise (an "Acquisition"), then this option shall, immediately prior to the
consummation of such Acquisition, become fully vested and immediately
exercisable by the Director.
17. PROVISION OF DOCUMENTATION TO DIRECTOR
By signing this Agreement the Director acknowledges receipt of a copy of this
Agreement and a copy of the Company's 1994 Stock Plan.
18. GOVERNING LAW
This Agreement shall be governed by and interpreted in accordance with the
internal laws of the State of Massachusetts if the Director is, at the date
hereof, resident in the United States and otherwise of the Province of Ontario,
Canada.
IN WITNESS WHEREOF the Company and the Director have caused this instrument to
be executed, and the Director whose signature appears below acknowledges receipt
of a copy of the Plan and acceptance of an original copy of this Agreement.
- ---------------------------------------- ALIAS RESEARCH INC.
DIRECTOR
- ---------------------------------------- By:
Print Name of Director --------------------------------
- ---------------------------------------- --------------------------------
Street Address Title
- ----------------------------------------
City Province/State Postal/Zip Code
<PAGE>
[LOGO]
ALIAS RESEARCH INC.
INCENTIVE STOCK OPTION AGREEMENT
Alias Research Inc., an Ontario corporation (the "Company"), hereby grants this
___ day of _____, 199_, to ________ (the "Employee"), an option to purchase a
maximum of _____ shares of its Common Stock at the price of $____ (U.S.) per
share (the "Shares"), on the following terms and conditions:
1. GRANT UNDER 1994 STOCK PLAN
This option is granted pursuant to and is governed by the Company's 1994 Stock
Plan (the "Plan") and, unless the context otherwise requires, terms used herein
shall have the same meaning as in the Plan. Determinations made in connection
with this option pursuant to the Plan shall be governed by the Plan as it exists
on this date.
2. GRANT AS INCENTIVE STOCK OPTION; OTHER OPTIONS
This option is intended to qualify as an incentive stock option under Section
422A of the Internal Revenue Code of 1986 (the "Code"). This option is in
addition to any other options heretofore or hereafter granted to the Employee by
the Company, but a duplicate original of this instrument shall not effect the
grant of another option.
3. EXTENT OF OPTION IF EMPLOYMENT CONTINUES
This option shall be exercisable cumulatively, to the extent of twenty percent
(20%) of the Shares subject to this option on the day that is ten (10) months
after the date hereof; thereafter, the Shares subject to the option shall be
exercisable to the extent of an additional two percent (2%) of the Shares per
month. In the event of Employee's death, disability or other termination of
employment, the exercisability of this option is governed by Sections 4 and 5
below. This option may not be exercised more than ten (10) years (five years if
Employee owns, immediately before this option is granted, stock representing
more than 10 percent of the total combined voting power of all classes of stock
of the Company) from the date of grant of this option, and may be exercised
during such term only in accordance with the Plan and the terms of this option.
4. TERMINATION OF EMPLOYMENT
If the Employee ceases to be employed by the Company, other than by reason of
death or disability as defined in Article 5, no further instalments of this
option shall become exercisable and this option shall terminate after the
passage of ninety (90) days from the date employment ceases, but in no event
later than the scheduled expiration date. In such a case, the Employee's only
rights hereunder shall be those which are properly exercised before the
termination of this option.
<PAGE>
- Page 2 -
5. DEATH; DISABILITY
If the Employee dies while in the employ of the Company, this option may be
exercised, to the extent of the number of shares with respect to which the
Employee could have exercised it on the date of his death, by his estate,
personal representative or beneficiary to whom this option has been assigned
pursuant to Article 10, at any time within 180 days after the date of death, but
not later than the scheduled expiration date. If the Employee ceases to be
employed by the Company by reason of his disability (as defined in the Plan),
this option may be exercised, to the extent of the number of shares with respect
to which he could have exercised it on the date of the termination of his
employment, at any time within 180 days after such termination, but not later
than the scheduled expiration date. At the expiration of such 180-day period or
the scheduled expiration date, whichever is the earlier, this option shall
terminate and the only rights hereunder shall be those as to which the option
was properly exercised before such termination.
6. PARTIAL EXERCISE
Exercise of this option up to the extent above stated may be made in part at any
time and from time to time within the above limits, except that this option may
not be exercised for a fraction of a share unless such exercise is with respect
to the final instalment of stock subject to this option and a fractional share
(or cash, in the discretion of the Company, in lieu thereof) must be issued to
permit the Employee to exercise completely such final instalment. Any
fractional share with respect to which an instalment of this option cannot be
exercised because of the limitation contained in the preceding sentence shall
remain subject to this option and shall be available for later purchase by the
Employee in accordance with the terms hereof.
7. PAYMENT OF PRICE
The option price is payable in United States dollars and may be paid in cash or
by certified cheque or bank draft, or any combination of the foregoing, equal in
amount to the option price.
8. AGREEMENT TO PURCHASE FOR INVESTMENT
By acceptance of this option, the Employee agrees that a purchase of shares
under this option will not be made with a view to their distribution, as that
term is used in the Securities Act of 1933, as amended, unless in the opinion of
counsel to the Company such distribution is in compliance with or exempt from
the registration and prospectus requirements of that Act, and the Employee
agrees to sign a certificate to such effect at the time of exercising this
option and agrees that the certificate for the shares so purchased may be
inscribed with a legend to ensure compliance with the Securities Act of 1933.
9. METHOD OF EXERCISING OPTION
Subject to the terms and conditions of this Agreement, this option may be
exercised by written notice to the Company, at the registered office of the
Company, or to such transfer agent as the Company shall designate. Such notice
shall state the election to exercise this option and the number of shares in
respect of which it is being exercised and shall be signed by the person or
persons so exercising this option. Such notice shall be accompanied by payment
of the full purchase price of such shares, and the Company shall deliver a
certificate or certificates representing such shares as soon as practicable
after the notice shall be received. The certificate or certificates for the
shares as to which this option shall have been so exercised shall be registered
in the name of the person or persons so exercising this option (or, if this
option shall be exercised by the Employee and if the Employee shall so request
in the notice exercising this option, shall be registered in the name of the
Employee and another person jointly, with right of survivorship) and shall be
delivered as provided above to or upon the written order of the person or
persons exercising this option. In the event this option shall be exercised,
pursuant to Article 5 hereof, by any person or persons other than the Employee,
such notice shall be accompanied by appropriate
<PAGE>
- Page 3 -
proof of the right of such person or persons to exercise this option. All
shares that shall be purchased upon the exercise of this option as provided
herein shall be fully paid and non-assessable.
10. OPTION NOT TRANSFERABLE
This option is not transferable or assignable except by will or by the laws of
descent and distribution. During the Employee's lifetime only the Employee can
exercise this option.
11. NO OBLIGATION TO EXERCISE OPTION
The grant and acceptance of this option imposes no obligation on the Employee to
exercise it. The Employee represents and warrants that no exercise of this
option will be induced by expectation of employment or continued employment of
the Employee by the Company or any Related Corporation (as defined in the Plan).
12. NO OBLIGATION TO CONTINUE EMPLOYMENT
The Company and any Related Corporation (as defined in the Plan) are not by the
Plan or this option obligated to continue the Employee in employment.
13. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE
The Employee shall have no rights as a stockholder with respect to shares
subject to this Agreement until a stock certificate therefor has been issued to
the Employee and is fully paid for. Except as is expressly provided in the
Plan with respect to certain changes in the capitalization of the Company, no
adjustment shall be made for dividends or similar rights for which the record
date is prior to the date such stock certificate is issued.
14. CAPITAL CHANGES AND BUSINESS SUCCESSIONS
The Plan contains provisions covering the treatment of options in a number of
contingencies such as stock splits and amalgamations. Provisions in the Plan
for adjustment with respect to stock subject to options and the related
provisions with respect to successors to the business of the Company are hereby
made applicable hereunder and are incorporated herein by reference. In general,
you should not assume that options necessarily would survive the acquisition of
the Company. In particular, without affecting the generality of the foregoing,
it is understood that for the purposes of Articles 3 through 5 hereof, both
inclusive, employment by the Company includes employment by a Related
Corporation as defined in the Plan.
15. EARLY DISPOSITION
The Employee agrees to notify the Company in writing immediately after the
Employee makes a Disqualifying Disposition of any Common Stock received pursuant
to the exercise of this option. A Disqualifying Disposition is any disposition
(including any sale) of such Common Stock before the LATER of (a) two years
after the date the Employee was granted this option or (b) one year after the
date the Employee acquired Common Stock by exercising this option. If the
Employee has died before such stock is sold, these holding period requirements
do not apply and no Disqualifying Disposition can occur thereafter. The
Employee also agrees to provide the Company with any information which it shall
request concerning any such disposition. The Employee acknowledges that he or
she will, if a United States taxpayer, forfeit the favourable income tax
treatment otherwise available with respect to the exercise of
<PAGE>
- Page 4 -
this incentive stock option if he or she makes a Disqualifying Disposition of
the stock received on exercise of this option.
16. WITHHOLDING TAXES
If the Company in its discretion determines that it is obligated to withhold tax
with respect to a Disqualifying Disposition (as defined in Article 15) of Common
Stock received by the Employee on exercise of this option, the Employee hereby
agrees that the Company may withhold from the Employee's wages the appropriate
amount of federal, state and local withholding taxes attributable to such
Disqualifying Disposition. If any portion of this option is treated as a
Non-Qualified Option, the Employee hereby agrees that the Company may withhold
from the Employee's wages the appropriate amount of federal, state and local
withholding taxes attributable to the Employee's exercise of such Non-Qualified
Option. At the Company's discretion, the amount required to be withheld may be
withheld in cash from such wages, or (with respect to compensation income
attributable to the exercise of this option) in kind from the Common Stock
otherwise deliverable to the Optionee on exercise of this Option. The Employee
further agrees that, if the Company does not withhold an amount from the
Employee's wages sufficient to satisfy the Company's withholding obligation, the
Employee will reimburse the Company on demand, in cash, for the amount
underwithheld.
17. NO EXERCISE OF OPTION IF EMPLOYMENT TERMINATED FOR CAUSE
If the employment of the Employee is terminated for "Cause", this option shall
terminate on the date of such termination of employment and shall thereupon not
be exercisable to any extent whatsoever.
18. ACCELERATION UPON CHANGE OF CONTROL
Notwithstanding the provisions of Section 3 with respect to option
exercisability, in the event of a Change of Control of the Company, this option
shall automatically become exercisable in full if, within twenty-four (24)
months after a Change of Control Date, (i) the Employee is involuntarily
terminated by the Company or any successor company (hereinafter, the "Employer")
without Cause or (ii) the Employee voluntarily resigns from the Employer for
Good Reason.
19. DEFINITIONS
For purposes of Sections 17 and 18, the terms "Cause", "Change of Control",
"Change of Control Date", and "Good Reason" shall have the meanings set out
below:
(a) "Cause" means the termination of employment of an Employee shall have
taken place as a result of:
(i) an act or acts of dishonesty undertaken by such Employee and
intended to result in gain or personal enrichment of the
Employee, or
(ii) persistent failure to perform the duties and obligations of
such Employee which is not remedied in a reasonable period of
time after receipt of written notice from the Employer, or
(iii) violation of confidentiality or proprietary information
obligations to or agreements entered into with the Employer, or
(iv) use, sale or distribution of illegal drugs on the Employer's
premises, or
(v) the conviction of such Employee of an indictable offense,
felony or the local equivalent.
<PAGE>
- Page 5 -
(b) "Change of Control" of the Company means:
(i) the acquisition by any Person (as such term is used in the
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934
(the "1934 Act") as Beneficial Owner (as such term is used in
Rule 13d-3 promulgated under the 1934 Act), directly or
indirectly, of fifty percent (50%) or more of the combined
voting power of the outstanding shares of capital stock of the
Company's then outstanding securities with respect to the
election of the directors of the Board.
(ii) During any period of three (3) consecutive years individuals
who, at the beginning of such period, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least
a majority of the Board, provided that any person becoming a
Director of the Board subsequent to the date of this Agreement
whose election, or nomination for election by the Company's
shareholders, was approved by the vote of at least a majority
of the directors then comprising the Incumbent Board (other
than an election or nomination of any individual whose initial
assumption of office is in connection with an actual or
threatened election contest relating to the election of the
directors of the Board, as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the 1934 Act) shall be, for
these purposes, considered as though such person were a member
of the Incumbent Board.
(iii) Notwithstanding Sections 19(b)(i) and (ii) above, Change of
Control shall not include those transactions contemplated by
the Agreement and Plan of Acquisition and Arrangement by and
among Silicon Graphics, Inc., 1103707 Ontario Inc., Silicon
Graphics Manufacturing S.A. and the Company dated as of
February 6, 1995.
(c) "Change of Control Date" means the effective date of the Change of
Control or such date which the Board shall, by resolution, deem to be the
Change of Control Date.
(d) "Good Reason" for voluntary resignation means (i) the Employer reduces by
ten percent (10%) or more the Employee's compensation at the rate in
effect immediately prior to the Change of Control or (ii) without the
Employee's express written consent, the Employer requires the Employee to
change the location of his or her job or office, so that he or she will
be based at a location more than fifty (50) miles from the location of
his or her job or office immediately prior to the Change of Control. For
these purposes, "Compensation" includes base salary, exclusive of bonus,
incentive compensation and shift differential, paid by the Employer as
consideration for the Employee's service.
20. PROVISION OF DOCUMENTATION TO EMPLOYEE
By signing this Agreement the Employee acknowledges receipt of a copy of this
Agreement and a copy of the Company's 1994 Stock Plan.
21. GOVERNING LAW
This Agreement shall be governed by and interpreted in accordance with the
internal laws of the State of Massachusetts if the Employee is, at the date
hereof, employed in the United States and otherwise of the Province of Ontario,
Canada.
<PAGE>
- Page 6 -
IN WITNESS WHEREOF the Company and the Employee have caused this instrument to
be executed, and the Employee whose signature appears below acknowledges receipt
of a copy of the Plan and acceptance of an original copy of this Agreement.
- ---------------------------------------- ALIAS RESEARCH INC.
EMPLOYEE
- ---------------------------------------- By:
Print Name of Employee --------------------------------
- ---------------------------------------- -----------------------------------
Street Address Title
- ----------------------------------------
City Province/State Postal/Zip Code
<PAGE>
[Silicon Graphics LETTERHEAD]
EXHIBIT 5.1
June 13, 1995
Silicon Graphics, Inc.
2011 North Shoreline Boulevard
Mountain View, CA 94043-1389
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
I have examined the Registration Statement on Form S-8 to be filed by Silicon
Graphics, Inc. (the "Company") with the Securities and Exchange Commission on or
about June 13, 1994 (the "Registration Statement"), in connection with the
registration under the Securities Act of 1933, as amended, of 1,771,242 shares
of the Company's common stock, par value $0.001 per share, to be issued pursuant
to the Alias Research Inc.'s 1988 Employee Share Ownership Plan, 1989 Employee
Share Ownership Plan, 1990 Employee Share Ownership Plan and 1994 Stock Plan
(the "Plan Shares"). I have examined the proceedings taken and proposed to be
taken in connection with the issuance and sale of the Plan Shares to be issued
under such Plans.
It is my opinion that, upon completion of the proceedings being taken or
contemplated to be taken prior to the issuance of the Plan Shares pursuant to
the Plans, and upon completion of the proceedings being taken in order to permit
such transactions to be carried out in accordance with the securities laws of
the various states where required, the Plan Shares will be legally and validly
issued, fully-paid and non-assessable.
I consent to the use of this opinion as an exhibit to the Registration
Statement, and further consent to the use of my name wherever appearing in the
Registration Statement and any amendments thereto.
Sincerely,
/s/ Sandra M. Escher
Sandra M. Escher
Securities Counsel
