<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 24, 1997
REGISTRATION NO. 333-______________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
QUALCOMM INCORPORATED
(Exact name of Registrant as specified in its charter)
---------------------
Delaware 95-3685934
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
6455 Lusk Boulevard, San Diego, CA 92121
(Address of principal executive offices) (Zip code)
---------------------
1991 STOCK OPTION PLAN
(Full title of the plan)
---------------------
Steven R. Altman, Esq
Senior Vice President
and General Counsel
QUALCOMM Incorporated
6455 Lusk Boulevard
San Diego, CA 92121
(Name and address of agent for service)
(619) 587-1121
(Telephone number, including area code, of agent for service)
---------------------
Copies to:
Frederick T. Muto, Esq.
Thomas A. Coll, Esq.
COOLEY GODWARD LLP
4365 Executive Drive, Suite 1100
San Diego, CA 92121
(619) 550-6000
---------------------
<PAGE> 2
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===============================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED BE REGISTERED PER SHARE (1) OFFERING PRICE (2) REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock ($.0001 par value) 5,400,000 $44.56-54.00 $275,804,803.50 $83,577.21
===============================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee. The price per share and aggregate offering price
are based upon (a) the actual exercise price for shares subject to
options previously granted under the Registrant's 1991 Stock Option
Plan; and (b) the average of the high and low price of the
Registrant's Common Stock on July 18, 1997, as reported by NASDAQ for
shares subject to options to be granted under the 1991 Stock Option
Plan. The following chart shows the calculation of the registration
fee.
<TABLE>
<CAPTION>
=============================================================================================================================
Type of Number of Offering Price Aggregate
Shares Shares Per Share Offering Price
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Shares subject to outstanding stock options 1,324,130 shares $44.56-54.00 $62,596,043.80
Shares issuable under options available for grant 4,075,870 shares $52.31 $213,208,759.70
=============================================================================================================================
</TABLE>
<PAGE> 3
INCORPORATION BY REFERENCE OF CONTENTS OF
REGISTRATION STATEMENTS ON FORM S-8
The contents of Registration Statement on Form S-8 No. 33-46343 filed
with the Securities and Exchange Commission on March 12, 1992, Registration
Statement on Form S-8 No. 33-78158 filed with the Securities and Exchange
Commission on April 26, 1994 and Registration Statement on Form S-8 No.
333-2754 filed with the Securities and Exchange Commission on March 25, 1996
are incorporated by reference herein.
ITEM 8. EXHIBITS.
EXHIBIT
NUMBER
4.1 Amended and Restated Certificate of Incorporation of Registrant.(1)
4.2 By-laws of Registrant, as amended.(2)
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Cooley Godward LLP is contained in Exhibit 5.1 to this
Registration Statement.
24.1 Power of Attorney is contained on the signature pages.
99.1 1991 Stock Option Plan, as amended.
_____
(1) Filed as an exhibit to the Registration Statement on Form S-3 (No.
33-62724), or amendments thereto, and incorporated herein by reference.
(2) Filed as an exhibit to the Registration Statement on Form S-1 (No.
33-42782), or amendments thereto, and incorporated herein by reference.
<PAGE> 4
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of San Diego, State of
California, on July 24, 1997.
QUALCOMM INCORPORATED
By: /s/ Irwin M. Jacobs
Irwin M. Jacobs
Chief Executive Officer and
Chairman of the Board
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Irwin M. Jacobs and Harvey P. White, and
each or any of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorney-in-fact
and agent, or any of them, or his substitutes or substitute, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Irwin M. Jacobs Chief Executive Officer and July 24, 1997
- --------------------------------- Chairman of the Board
Irwin M. Jacobs (Principal Executive Officer)
/s/ Andrew J. Viterbi Vice Chairman of the Board July 24, 1997
- ---------------------------------
Andrew J. Viterbi
/s/ Harvey P. White President and Director July 24, 1997
- ---------------------------------
Harvey P. White
</TABLE>
<PAGE> 5
<TABLE>
<S> <C> <C>
/s/ Anthony S. Thornley Senior Vice President and Chief July 24, 1997
- --------------------------------- Financial Officer
Anthony S. Thornley (Principal Financial and Accounting
Officer)
/s/ Richard C. Atkinson Director July 24, 1997
- ---------------------------------
Richard C. Atkinson
/s/ Adelia A. Coffman Director July 24, 1997
- ---------------------------------
Adelia A. Coffman
/s/ Neil Kadisha Director July 24, 1997
- ---------------------------------
Neil Kadisha
/s/ Robert E. Kahn Director July 24, 1997
- ---------------------------------
Robert E. Kahn
/s/ Jerome S. Katzin Director July 24, 1997
- ---------------------------------
Jerome S. Katzin
/s/ Duane A. Nelles Director July 24, 1997
- ---------------------------------
Duane A. Nelles
/s/ Peter M. Sacerdote Director July 24, 1997
- ---------------------------------
Peter M. Sacerdote
/s/ Frank Savage Director July 24, 1997
- ---------------------------------
Frank Savage
/s/ Brent Scowcroft Director July 24, 1997
- ---------------------------------
Brent Scowcroft
/s/ Marc I. Stern Director July 24, 1997
- ---------------------------------
Marc I. Stern
</TABLE>
<PAGE> 6
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
- ---------- ----------- -------
<S> <C>
4.1 Registrant's Restated Certificate of Incorporation,
as amended.(1)
4.2 Registrant's Amended By-laws.(2)
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Cooley Godward LLP.
Reference is made to Exhibit 5.1.
24.1 Power of Attorney. Reference is made to page 4.
99.1 1991 Stock Option Plan, as amended.
</TABLE>
__________________________
(1) Filed as an exhibit to the Registration Statement on Form S-3 (No.
33-62724), or amendments thereto, and incorporated herein by reference.
(2) Filed as an exhibit to the Registration Statement on Form S-1 (No.
33-42782), or amendments thereto, and incorporated herein by reference.
<PAGE> 1
[COOLEY GODWARD LLP LETTERHEAD]
EXHIBIT 5.1
ATTORNEYS AT LAW San Francisco, CA
415 693-2000
4365 Executive Drive Palo Alto, CA
Suite 1200 415 843-5000
San Diego, CA
92121-2128 Menlo Park, CA
MAIN: 619 550-6000 415 843-5000
FAX: 619 453-3555
Boulder, CO
303 546-4000
Denver, CO
WEB http://www.cooley.com 303 606-4800
THOMAS A. COLL
July 24, 1997 Direct: (619) 550-6013
Internet: [email protected]
QUALCOMM Incorporated
6455 Lusk Boulevard
San Diego, CA 92121
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by QUALCOMM Incorporated, (the "Company") of a Registration
Statement on Form S-8 (the "Registration Statement") with the Securities and
Exchange Commission covering the offering of up to 5,400,000 additional shares
of the Company's Common Stock, $.0001 par value, pursuant to its 1991 Stock
Option Plan, as amended (the "Plan").
In connection with this opinion, we have examined the Registration Statement,
your Restated Certificate of Incorporation and By-laws, each as amended, and
such other documents, records, certificates, memoranda and other instruments as
we deem necessary as a basis for this opinion. We have assumed the genuineness
and authenticity of all documents submitted to us as originals, the conformity
to originals of all documents submitted to us as copies thereof, and the due
execution and delivery of all documents where due execution and delivery are a
prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the shares described above, when sold and issued in accordance with the
Plan and Registration Statement, will be validly issued, fully paid, and
nonassessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
COOLEY GODWARD LLP
/s/ Thomas A. Coll
Thomas A. Coll
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated November 8, 1996, which appears on
page F-1 of Qualcomm Incorporated's Annual Report on Form 10-K for the year
ended September 29, 1996.
PRICE WATERHOUSE LLP
San Diego, California
July 23, 1997
<PAGE> 1
EXHIBIT 99.1
QUALCOMM INCORPORATED
1991 STOCK OPTION PLAN
Adopted by the Board of Directors August 19, 1991
As amended by the Board of Directors on May 4, 1992,
September 8, 1993, and November 14, 1994
As amended by the Compensation Committee on November 11, 1994
As amended by the Board of Directors on November 6, 1995 and on November 18,
1996
1. PURPOSES.
(a) The purpose of the Plan is to provide a means by
which selected Employees and Directors of and Consultants to the Company, and
its Affiliates, may be given an opportunity to purchase stock of the Company.
(b) The Company, by means of the Plan, seeks to retain
the services of persons who are now Employees or Directors of or Consultants to
the Company, to secure and retain the services of new Employees, Directors and
Consultants, and to provide incentives for such persons to exert maximum
efforts for the success of the Company.
(c) The Company intends that Options issued under the
Plan shall, in the discretion of the Board or any Committee to which
responsibility for administration of the Plan has been delegated pursuant to
subsection 3(c), be either Incentive Stock Options or Non- qualified Stock
Options. All Options shall be separately designated Incentive Stock Options or
Non-qualified Stock Options at the time of grant, and in such form as issued
1.
<PAGE> 2
pursuant to Section 6, and a separate certificate or certificates will be
issued for shares purchased on exercise of each type of Option.
2. DEFINITIONS.
(a) "AFFILIATE" means any parent corporation or
subsidiary corporation, whether now or hereafter existing, as those terms are
defined in Sections 424(e) and (f) respectively, of the Code.
(b) "BOARD" means the Board of Directors of the Company.
(c) "CODE" means the Internal Revenue Code of 1986, as
amended.
(d) "COMMITTEE" means a Committee appointed by the Board
in accordance with subsection 3(c) of the Plan.
(e) "COMPANY" means QUALCOMM Incorporated, a Delaware
corporation.
(f) "CONSULTANT" means any person, including an advisor,
engaged by the Company or an Affiliate to render services and who is
compensated for such services, provided that the term "Consultant" shall not
include Directors who are paid only a director's fee by the Company or who are
not compensated by the Company for their services as Directors.
(g) "CONTINUOUS STATUS AS AN EMPLOYEE, DIRECTOR OR
CONSULTANT" means that the service of an individual to the Company, whether as
an Employee, Director or Consultant, is not interrupted or terminated. The
Board or the chief executive officer of the Company may determine, in that
party's sole discretion, whether Continuous Status as
2.
<PAGE> 3
an Employee, Director or Consultant shall be considered interrupted in the case
of: (i) any leave of absence approved by the Board or the chief executive
officer, including sick leave, military leave, or any other personal leave; or
(ii) transfers between the Company or between the Company, Affiliates or their
successors. The term of each Option may be extended at the discretion of the
Board or the chief executive officer (but not beyond ten (10) years from the
date of original grant) for the period of any such approved leave of absence.
(h) "COVERED EMPLOYEE" means the chief executive officer
and the four (4) other highest compensated officers of the Company.
(i) "DIRECTOR" means a member of the Board.
(j) "DISABILITY" means total and permanent disability as
defined in Section 22(e)(3) of the Code.
(k) "EMPLOYEE" means any person, including Officers and
Directors, employed by the Company or any Affiliate of the Company. Neither
service as a Director nor payment of a director's fee by the Company shall be
sufficient to constitute "employment" by the Company.
(l) "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.
(m) "FAIR MARKET VALUE" means, as of any date, the value
of the common stock of the Company determined as follows:
3.
<PAGE> 4
(i) If the common stock is listed on any
established stock exchange or traded on the National Market of the Nasdaq Stock
Market, the Fair Market Value of a share of common stock shall be the average
of the highest and lowest price at which the common stock was sold on such
exchange or national market on the last market trading day prior to the date as
of which the determination is to be made;
(ii) If the common stock is quoted on the Nasdaq
Stock Market (but not on the National Market thereof) or is regularly quoted by
a recognized securities dealer but selling prices are not reported, the Fair
Market Value of a share of common stock shall be the mean between the high bid
and high asked prices for the common stock on the last market trading day prior
to the day of determination, as reported in The Wall Street Journal or such
other source as the Board deems reliable;
(iii) In the absence of an established market for
the common stock, the Fair Market Value shall be determined in good faith by
the Board.
(n) "INCENTIVE STOCK OPTION" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.
(o) "NON-EMPLOYEE DIRECTOR" means a Director who either
(i) is not a current Employee or Officer of the Company or its parent or
subsidiary, does not receive compensation (directly or indirectly) from the
Company or its parent or subsidiary for services rendered as a consultant or in
any capacity other than as a Director (except for an amount as to which
disclosure would not be required under Item 404(a) of Regulation
4.
<PAGE> 5
S-K promulgated pursuant to the Securities Act ("Regulation S-K")), does not
possess an interest in any other transaction as to which disclosure would be
required under Item 404(a) of Regulation S-K, and is not engaged in a business
relationship as to which disclosure would be required under Item 404(b) of
Regulation S-K; or (ii) is otherwise considered a "non-employee director" for
purposes of Rule 16b-3.
(p) "NON-QUALIFIED STOCK OPTION" means an Option not
intended to qualify as an Incentive Stock Option.
(q) "OFFICER" means a person who is an officer of the
Company within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(r) "OPTION" means a stock option granted pursuant to the
Plan.
(s) "OPTION AGREEMENT" means a written agreement between
the Company and an Optionee evidencing the terms and conditions of an
individual Option grant. The Option Agreement is subject to the terms and
conditions of the Plan.
(t) "OPTIONED STOCK" means the common stock of the
Company subject to an Option.
(u) "OPTIONEE" means an Employee or Consultant who holds
an outstanding Option.
(v) "OUTSIDE DIRECTOR" means a Director who either (i) is
not a current employee of the Company or an "affiliated corporation" (as
defined in the Treasury regulations promulgated under Section 162(m) of the
Code), is not a former employee of
5.
<PAGE> 6
the Company or an affiliated corporation receiving compensation for prior
services (other than benefits under a tax qualified pension plan), was not an
officer of the Company or an affiliated corporation at any time, and is not
currently receiving direct or indirect remuneration in any capacity other than
as a Director, or (ii) is otherwise considered an "outside director" for
purposes of Section 162(m) of the Code.
(w) "PLAN" means this 1991 Stock Option Plan.
(x) "RULE 16B-3" means Rule 16b-3 of the Exchange Act or
any successor to Rule 16b-3, as in effect with respect to the Company when
discretion is being exercised with respect to the Plan.
3. ADMINISTRATION.
(a) The Plan shall be administered by the Board unless
and until the Board delegates administration to a Committee, as provided in
subsection 3(c).
(b) The Board shall have the power, subject to, and
within the limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the
persons eligible under the Plan shall be granted Options; when and how the
Option shall be granted; whether the Option will be an Incentive Stock Option
or a Non-qualified Stock Option; the provisions of each Option granted (which
need not be identical), including the time or times such Option may be
exercised in whole or in part; and the number of shares for which an Option
shall be granted to each such person.
6.
<PAGE> 7
(2) To construe and interpret the Plan and
Options granted under it, and to establish, amend and revoke rules and
regulations for its administration. The Board, in the exercise of this power,
may correct any defect, omission or inconsistency in the Plan or in any Option
Agreement, in a manner and to the extent it shall deem necessary or expedient
to make the Plan fully effective.
(3) To amend the Plan or an Option as provided in
Section 11.
(4) Generally, to exercise such powers and to
perform such acts as the Board deems necessary or expedient to promote the best
interests of the Company.
(c) The Board may delegate administration of the Plan to
a committee composed of not fewer than two (2) members (the "Committee"), all
of the members of which Committee shall be, in the discretion of the Board,
Non-Employee Directors and/or Outside Directors. If administration is
delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board,
including the power to delegate to a subcommittee of two (2) or more Outside
Directors any of the administrative powers the Committee is authorized to
exercise (and references in this Plan to the Board shall thereafter be to the
Committee), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan. Notwithstanding anything in this Section 3 to the
contrary, the Board or the Committee may delegate to a committee of one or more
members of the Board the authority to grant Options to eligible persons who (1)
are not then subject
7.
<PAGE> 8
to Section 16 of the Exchange Act and/or (2) are either (i) not then Covered
Employees and are not expected to be Covered Employees at the time of
recognition of income resulting from such Option, or (ii) not persons with
respect to whom the Company wishes to comply with Section 162(m) of the Code.
4. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of Section 10 relating to
adjustments upon changes in stock, the stock that may be sold pursuant to
Options shall not exceed in the aggregate twenty-eight million four hundred
thousand (28,400,000) shares of the Company's common stock; provided, however,
that of such twenty-eight million four hundred thousand (28,400,000) shares,
not more than five million three hundred twenty-four thousand four hundred
eighty (5,324,480) shares of the Company's common stock (after giving effect to
a 2:1 split in the Company's common stock effective February 16, 1994) shall be
issued as a consequence of the assumption of options to acquire common stock of
QUALCOMM, Inc., a California corporation, (the "Predecessor Company") pursuant
to the Predecessor Company's Stock Option Plan, which plan has been terminated.
If any Option shall for any reason expire or otherwise terminate without having
been exercised in full, the stock not purchased under such Option shall again
become available for issuance pursuant to exercises of options granted under
the Plan.
(b) The stock subject to the Plan may be unissued shares
or reacquired shares, whether bought on the market or otherwise.
8.
<PAGE> 9
5. ELIGIBILITY.
(a) Incentive Stock Options may be granted only to
Employees. Non-qualified Stock Options may be granted only to Employees,
Directors or Consultants.
(b) No person shall be eligible for the grant of an
Incentive Stock Option if, at the time of grant, such person owns (or is deemed
to own pursuant to Section 424(d) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or of any of its Affiliates unless the exercise price of such Incentive
Stock Option is at least one hundred ten percent (110%) of the Fair Market
Value of such stock at the date of grant and the Incentive Stock Option is not
exercisable after the expiration of five (5) years from the date of grant.
(c) No Employee shall be eligible to be granted in any
calendar year Options covering more than 2% of the total number of shares of
the Company's common stock outstanding on the record date for the Company's
1995 Annual Meeting of Stockholders (1,293,860 shares).
6. OPTION PROVISIONS.
Each Option shall be in such form and shall contain such terms
and conditions as the Board shall deem appropriate. The provisions of separate
Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:
(a) TERM. No Option shall be exercisable after the
expiration of ten (10) years from the date it was granted.
9.
<PAGE> 10
(b) PRICE. The exercise price of each Option shall be
not less than one hundred percent (100%) of the fair market value of the stock
subject to the Option on the date the Option is granted. Notwithstanding the
foregoing, an Option (whether an Incentive Stock Option or a Nonstatutory Stock
Option) may be granted with an exercise price lower than that set forth in the
preceding sentence if such Option is granted pursuant to an assumption or
substitution for another option in a manner satisfying the provisions of
Section 424(a) of the Code.
(c) CONSIDERATION. The purchase price of stock acquired
pursuant to an Option shall be paid, to the extent permitted by applicable
statutes and regulations, either (i) in cash at the time the option is
exercised, or (ii) at the discretion of the Board or the Committee, either at
the time of the grant or exercise of the Option, (A) by delivery to the Company
of other common stock of the Company or (B) according to a deferred payment
arrangement, except that payment of the common stock's "par value" (as defined
in the Delaware General Corporation Law) shall not be made by deferred payment,
or other arrangement (which may include, without limiting the generality of the
foregoing, the use of other common stock of the Company) with the person to
whom the Option is granted or to whom the Option is transferred pursuant to
subsection 6(d) in any other form of legal consideration that may be acceptable
to the Board.
In the case of any deferred payment arrangement, interest
shall be payable at least annually and shall be charged at the minimum rate of
interest necessary to avoid the
10.
<PAGE> 11
I.treatment as interest, under any applicable provisions of the Code, of any
amounts other than amounts stated to be interest under the deferred payment
arrangement.
(d) TRANSFERABILITY. An Incentive Stock Option shall not
be transferable except by will or by the laws of descent and distribution, and
shall be exercisable during the lifetime of the person to whom the Incentive
Stock Option is granted only by such person. A Non-qualified Stock Option
shall be transferable by the Optionee only upon such terms and conditions as
set forth in the Option Agreement for such Non-qualified Stock Option, as the
Board or the Committee shall determine in its discretion. The person to whom
the Option is granted may, by delivering written notice to the Company, in a
form satisfactory to the Company, designate a third party who, in the event of
the death of the Optionee, shall thereafter be entitled to exercise the Option.
(e) VESTING. The total number of shares of stock subject
to an Option may, but need not, be allotted in periodic installments (which
may, but need not, be equal). The Option Agreement may provide that from time
to time during each of such installment periods, the Option may become
exercisable ("vest") with respect to some or all of the shares allotted to that
period, and may be exercised with respect to some or all of the shares allotted
to such period and/or any prior period as to which the Option became vested but
was not fully exercised. During the remainder of the term of the Option (if
its term extends beyond the end of the installment periods), the Option may be
exercised from time to time with respect to any shares then remaining subject
to the Option. The provisions of this
11.
<PAGE> 12
subsection 6(e) are subject to any Option provisions governing the minimum
number of shares as to which an Option may be exercised.
(f) SECURITIES LAW COMPLIANCE. The Company may require
any Optionee, or any person to whom an Option is transferred under subsection
6(d), as a condition of exercising any such Option, (1) to give written
assurances satisfactory to the Company as to the Optionee's knowledge and
experience in financial and business matters and/or to employ a purchaser
representative reasonably satisfactory to the Company who is knowledgeable and
experienced in financial and business matters, and that he or she is capable of
evaluating, alone or together with the purchaser representative, the merits and
risks of exercising the Option; and (2) to give written assurances satisfactory
to the Company stating that such person is acquiring the stock subject to the
Option for such person's own account and not with any present intention of
selling or otherwise distributing the stock. These requirements, and any
assurances given pursuant to such requirements, shall be inoperative if (i) the
issuance of the shares upon the exercise of the Option has been registered
under a then currently effective registration statement under the Securities
Act of 1933, as amended (the "Securities Act"), or (ii) as to any particular
requirement, a determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then applicable
securities laws.
(g) TERMINATION OF EMPLOYMENT OR RELATIONSHIP AS A
CONSULTANT OR DIRECTOR. In the event an Optionee's Continuous Status as an
Employee, Director or Consultant terminates (other than upon the Optionee's
death or Disability), the Optionee
12.
<PAGE> 13
may exercise his or her Option, but only within such period of time as is
determined by the Board, and only to the extent that the Optionee was entitled
to exercise it at the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Option Agreement).
In the case of an Incentive Stock Option, the Board shall determine such period
of time (in no event to exceed ninety (90) days from the date of termination)
when the Option is granted. If, at the date of termination, the Optionee is
not entitled to exercise his or her entire Option, the shares covered by the
unexercisable portion of the Option shall revert to and again become available
for issuance pursuant to Options granted under the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time
specified in the Option Agreement, the Option shall terminate, and the shares
covered by such Option shall revert to and again become available for issuance
pursuant to Options granted under the Plan.
(h) DISABILITY OF OPTIONEE. In the event an Optionee's
Continuous Status as an Employee, Director or Consultant terminates as a result
of the Optionee's Disability, the Optionee may exercise his or her Option, but
only within twelve (12) months from the date of such termination (or such
shorter period specified in the Option Agreement), and only to the extent that
the Optionee was entitled to exercise it at the date of such termination (but
in no event later than the expiration of the term of such Option as set forth
in the Option Agreement). If, at the date of termination, the Optionee is not
entitled to exercise his or her entire Option, the shares covered by the
unexercisable portion of the Option shall revert to and again become available
for issuance pursuant to Options granted under the
13.
<PAGE> 14
Plan. If, after termination, the Optionee does not exercise his or her Option
within the time specified herein, the Option shall terminate, and the shares
covered by such Option shall revert to and again become available for issuance
pursuant to Options granted under the Plan.
(i) DEATH OF OPTIONEE. In the event of the death of an
Optionee, the Option may be exercised, at any time within twelve (12) months
following the date of death (or such shorter period specified in the Option
Agreement) (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement), by the Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or inheritance,
but only to the extent the Optionee was entitled to exercise the Option at the
date of death. If, at the time of death, the Optionee was not entitled to
exercise his or her entire Option, the shares covered by the unexercisable
portion of the Option shall revert to and again become available for issuance
pursuant to Options granted under the Plan. If, after death, the Optionee's
estate or a person who acquired the right to exercise the Option by bequest or
inheritance does not exercise the Option within the time specified herein, the
Option shall terminate, and the shares covered by such Option shall revert to
and again become available for issuance pursuant to Options granted under the
Plan.
(j) EARLY EXERCISE. The Option may, but need not,
include a provision whereby the Optionee may elect at any time while an
Employee, Director or Consultant to exercise the Option as to any part or all
of the shares subject to the Option prior to the full vesting of the Option.
Any unvested shares so purchased may be subject to a repurchase
14.
<PAGE> 15
right in favor of the Company or to any other restriction the Board determines
to be appropriate.
(k) WITHHOLDING. To the extent provided by the terms of
an Option Agreement, the Optionee may satisfy any federal, state or local tax
withholding obligation relating to the exercise of such Option by any of the
following means or by a combination of such means: (1) tendering a cash
payment; (2) authorizing the Company to withhold shares from the shares of the
common stock otherwise issuable to the participant as a result of the exercise
of the Option; or (3) delivering to the Company owned and unencumbered shares
of the common stock of the Company.
7. COVENANTS OF THE COMPANY.
(a) During the terms of the Options, the Company shall
keep available at all times the number of shares of stock required to satisfy
such Options.
(b) The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be
required to issue and sell shares of stock upon exercise of the Options;
provided, however, that this undertaking shall not require the Company to
register under the Securities Act either the Plan, any Option or any stock
issued or issuable pursuant to any such Option. If, after reasonable efforts,
the Company is unable to obtain from any such regulatory commission or agency
the authority which counsel for the Company deems necessary for the lawful
issuance and sale of stock under the Plan, the Company shall be relieved from
any liability for failure to
15.
<PAGE> 16
issue and sell stock upon exercise of such Options unless and until such
authority is obtained.
8. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to Options shall
constitute general funds of the Company.
9. MISCELLANEOUS.
(a) The Board shall have the power to accelerate the time
at which an option may first be exercised or the time during which an Option or
any part thereof will vest pursuant to subsection 6(e) only for purposes of
allowing early exercise, notwithstanding the provisions in the Option stating
the time at which it may first be exercised or the time during which it will
vest.
(b) Neither an Optionee nor any person to whom an Option
is transferred under subsection 6(d) shall be deemed to be the holder of, or to
have any of the rights of a holder with respect to, any shares subject to such
Option unless and until such person has satisfied all requirements for exercise
of the Option pursuant to its terms.
(c) Nothing in the Plan or any instrument executed or
Option granted pursuant thereto shall confer upon any Employee, Director or
Consultant or Optionee any right to continue in the service of the Company or
any Affiliate or shall affect the right of the Company or any Affiliate to
terminate the employment of any Employee, with or without cause, to remove any
Director as provided in the Company's By-Laws and the provisions of the General
Corporation Law of the State of Delaware, or to terminate the
16.
<PAGE> 17
relationship of any Consultant subject to the terms of that Consultant's
agreement with the Company or Affiliate to which such Consultant is providing
services.
(d) To the extent that the aggregate Fair Market Value
(determined at the time of grant) of stock with respect to which Incentive
Stock Options are exercisable for the first time by any Optionee during any
calendar year under all plans of the Company and its Affiliates exceeds one
hundred thousand dollars ($100,000), the Options or portions thereof which
exceed such limit (according to the order in which they were granted) shall be
treated as Non-qualified Stock Options.
10. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the
Plan, or subject to any Option (through merger, consolidation, reorganization,
recapitalization, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction not involving the receipt of
consideration of the Company), the Plan will be appropriately adjusted in the
type(s) and maximum number of securities subject to the Plan as well as the
maximum number of securities subject to award to any Employee during any
calendar year pursuant to subsection 5(c), and each outstanding Option will be
appropriately adjusted in the type(s), number of securities, and price per
share of stock subject to the outstanding Option. Such adjustments shall be
made by the Board or Committee, the determination of which shall be final,
binding and conclusive. (The conversion of any convertible securities of the
17.
<PAGE> 18
Company shall not be treated as a "transaction not involving the receipt of
consideration by the Company.")
(b) In the event of: (1) a merger or consolidation in
which the Company is not the surviving corporation or (2) a reverse merger in
which the Company is the surviving corporation but the shares of the Company's
common stock outstanding immediately preceding the merger are converted by
virtue of the merger into other property, whether in the form of securities,
cash or otherwise then to the extent permitted by applicable law: (i) any
surviving corporation shall assume any Options outstanding under the Plan or
shall substitute similar Options for those outstanding under the Plan, or (ii)
such Options shall continue in full force and effect. In the event any
surviving corporation refuses to assume or continue such Options, or to
substitute similar options for those outstanding under the Plan, then, with
respect to options held by persons then performing services as Employees,
Directors or Consultants for the Company, the time at which such Options may
first be exercised shall be accelerated and the Options terminated if not
exercised prior to such event. In the event of a dissolution or liquidation of
the Company, any Options outstanding under the Plan shall terminate if not
exercised prior to such event.
11. AMENDMENT OF THE PLAN.
(a) The Board at any time, and from time to time, may
amend the Plan. However, except as provided in Section 10 relating to
adjustments upon changes in stock, no amendment shall be effective unless
approved by the stockholders of the Company
18.
<PAGE> 19
within twelve (12) months before or after the adoption of the amendment, where
the amendment will:
(i) Increase the number of shares reserved for
options under the Plan;
(ii) Modify the requirements as to eligibility for
participation in the Plan (to the extent such modification requires stockholder
approval in order for the Plan to satisfy the requirements of Section 422 of
the Code); or
(iii) Modify the Plan in any other way if such
modification requires stockholder approval in order for the Plan to satisfy the
requirements of Section 422 of the Code or to comply with the requirements of
Rule 16b-3.
(b) It is expressly contemplated that the Board may amend
the Plan in any respect the Board deems necessary or advisable to provide
Optionees with the maximum benefits provided or to be provided under the
provisions of the Code and the regulations promulgated thereunder relating to
Incentive Stock Options and/or to bring the Plan and/or Incentive Stock Options
granted under it into compliance therewith.
(c) Rights and obligations under any Option granted
before amendment of the Plan or of such Option shall not be impaired by any
amendment of the Plan unless (i) the Company requests the consent of the person
to whom the Option was granted and (ii) such person consents in writing.
(d) The Board at any time, and from time to time, may
amend the terms of any one or more Options; provided, however, that the rights
and obligations under any
19.
<PAGE> 20
Option shall not be impaired by any such amendment unless (i) the Company
requests the consent of the person to whom the Option was granted and (ii) such
person consents in writing, and; provided, further, that any repricing of
outstanding Options shall in no event apply to Officers as defined in
subsection 2(q) or to persons denominated as officers of the Company by the
Board.
(e) The Board may in its sole discretion submit any other
amendment to the Plan for stockholder approval, including, but not limited to,
amendments to the Plan intended to satisfy the requirements of Section 162(m)
of the Code and the regulations promulgated thereunder regarding the exclusion
of performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers.
12. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any
time. Unless sooner terminated, the Plan shall terminate on August 18, 2001,
which shall be within ten (10) years from the date the Plan is adopted by the
Board or approved by the stockholders of the Company, whichever is earlier. No
Options may be granted under the Plan while the Plan is suspended or after it
is terminated.
(b) Rights and obligations under any Option granted while
the Plan is in effect shall not be altered by suspension or termination of the
Plan, except with the consent of the person to whom the Option was granted.
20.
<PAGE> 21
13. EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the Board,
but no Options granted under the Plan shall be exercised unless and until the
Plan has been approved by the stockholders of the Company.
21.
