<PAGE> 1
As filed with the Securities and Exchange Commission on December 22, 1998
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 of (I.R.S. Employer Identification No.)
Incorporation or Organization)
6455 LUSK BOULEVARD
SAN DIEGO, CALIFORNIA 92121
(619) 587-1121
(Address Of Principal Executive Offices)
----------
1991 STOCK OPTION PLAN
1991 EMPLOYEE STOCK PURCHASE PLAN
1998 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
(Full Title Of The Plan)
IRWIN MARK JACOBS
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
QUALCOMM INCORPORATED
6455 LUSK BOULEVARD
SAN DIEGO, CALIFORNIA 92121
(619) 587-1121
(Name, Address, Including Zip Code, And 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, CALIFORNIA 92101
(619) 550-6000
<PAGE> 2
CALCULATION OF REGISTRATION FEE
================================================================================
<TABLE>
<CAPTION>
=========================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED SHARE (1) PRICE (1) REGISTRATION FEE
====================== ================= ===================== ===================== ====================
<S> <C> <C> <C> <C>
Common Stock, par 7,670,000 $39.59 - $64.84 $401,878,754.88 $111,722.29
value $.0001
====================== ================= ===================== ===================== ====================
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(h)(1) of the Securities Act of
1933, as amended, (the "Securities Act"). Of the 7,670,000 shares
registered hereby, 5,000,000 shares are reserved for issuance pursuant
to the 1991 Stock Option Plan (the "Option Plan"), 2,200,000 are
reserved for issuance pursuant to the 1991 Employee Stock Purchase Plan
(the "ESPP") and 470,000 are reserved for issuance pursuant to the 1998
Non-Employee Director Stock Option Plan (the "Director Plan"). The price
per share and the aggregate offering price are calculated on the basis
of (a) the weighted average of $39.59 to $64.84, the exercise price for
2,470,673 shares subject to outstanding options granted under the Option
Plan, (b) the weighted average of $47.56 to $53.97, the exercise price
for 120,000 shares subject to outstanding options granted under the
Director Plan, and (c) $51.00, the average of the high and low sales
prices of Registrant's Common Stock on December 15, 1998, as reported on
the NASDAQ National Market for the remainder of the shares subject to
the Option Plan, Director Plan and ESPP registered hereunder.
================================================================================
<PAGE> 3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The contents of the following Registration Statements on Form S-8 filed
with the Securities and Exchange Commission are incorporated by reference
herein:
1. Registration Statement No. 33-45083 filed January 16, 1992;
2. Registration Statement No. 33-78150 filed April 26, 1994;
3. Registration Statement No. 33-78158 filed April 26, 1994;
4. Registration Statement No. 333-2752 filed March 25, 1996;
5. Registration Statement No. 333-2754 filed March 25, 1996;
6. Registration Statement No. 333-2756 filed March 25, 1996; and
7. Registration Statement No. 333-32013 filed July 24, 1997.
EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
<S> <C>
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants.
23.2 Consent of Cooley Godward LLP is contained in Exhibit 5.1 to this
Registration Statement.
24 Power of Attorney is contained on the signature pages.
99.1 1991 Stock Option Plan, as amended.
99.2 1991 Employee Stock Purchase Plan, as amended.
99.3 1998 Non-Employee Directors' Stock Option Plan.
</TABLE>
- -------------
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 December 21, 1998.
QUALCOMM INCORPORATED
By /s/ IRWIN MARK JACOBS
------------------------------------
Irwin Mark Jacobs, Chairman of the
Board and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints IRWIN MARK JACOBS and ANTHONY S. THORNLEY
and each or either one of them, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his substitutes or substitute, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, 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 MARK JACOBS Chairman of the Board, Chief December 21, 1998
- --------------------------- Executive Officer and Director
Irwin Mark Jacobs (Principal Executive Officer)
/s/ ANDREW J. VITERBI Vice Chairman of the Board December 21, 1998
- ---------------------------
Andrew J. Viterbi
</TABLE>
<PAGE> 5
<TABLE>
<S> <C> <C>
/s/ ANTHONY S. THORNLEY Executive Vice President and December 21, 1998
- --------------------------- Chief Financial Officer
Anthony S. Thornley (Principal Financial and
Accounting Officer)
/s/ RICHARD C. ATKINSON Director December 21, 1998
- ---------------------------
Richard C. Atkinson
/s/ ADELIA A. COFFMAN Director December 21, 1998
- ---------------------------
Adelia A. Coffman
/s/ DIANA LADY DOUGAN Director December 21, 1998
- ---------------------------
Diana Lady Dougan
/s/ NEIL KADISHA Director December 21, 1998
- ---------------------------
Neil Kadisha
/s/ ROBERT E. KAHN Director December 21, 1998
- ---------------------------
Robert E. Kahn
/s/ JEROME S. KATZIN Director December 21, 1998
- ---------------------------
Jerome S. Katzin
/s/ DUANE A. NELLES Director December 21, 1998
- ---------------------------
Duane A. Nelles
/s/ PETER M. SACERDOTE Director December 21, 1998
- ---------------------------
Peter M. Sacerdote
Director December __, 1998
- ---------------------------
Frank Savage
</TABLE>
<PAGE> 6
<TABLE>
<S> <C> <C>
Director December ___, 1998
- ---------------------------
Brent Scowcroft
/s/ MARC I. STERN Director December 21, 1998
- ---------------------------
Marc I. Stern
</TABLE>
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
<S> <C>
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants.
23.2 Consent of Cooley Godward LLP is contained in Exhibit 5.1 to this
Registration Statement.
24 Power of Attorney is contained on the signature pages.
99.1 1991 Stock Option Plan, as amended.
99.2 1991 Employee Stock Purchase Plan, as amended.
99.3 1998 Non-Employee Directors' Stock Option Plan.
</TABLE>
<PAGE> 1
EXHIBIT 5.1
December 22, 1998
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, a Delaware corporation (the "Company")
of a Registration Statement on Form S-8 (the "Registration Statement") with the
Securities and Exchange Commission, covering the offering of an aggregate of up
to 7,670,000 shares of the Company's Common Stock, $.0001 par value (the
"Shares"), including 5,000,000 shares for issuance pursuant to the Company's
1991 Stock Option Plan (the "Option Plan"), 2,200,000 shares for issuance
pursuant to the 1991 Employee Stock Purchase Plan (the "Stock Plan") and 470,000
shares for issuance pursuant to the 1998 Non-Employee Directors' Stock Option
Plan (the "Director Plan"). The Option Plan, Stock Plan and Director Plan are
referred to collectively as the "Plans."
In connection with this opinion, we have examined and relied upon the
Registration Statement and related prospectus, the Plans, the Company's
Certificate of Incorporation and Bylaws, as amended, and the originals or copies
certified to our satisfaction of such records, documents, certificates,
memoranda and other instruments as in our judgment are necessary or appropriate
to enable us to render the opinion expressed below. We have assumed the
genuineness and authenticity of all documents submitted to us as originals, the
conformity to originals of all documents submitted to us as copies thereof and
the due execution and delivery of all documents where due execution and delivery
are a prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Shares, when issued and sold in accordance with the applicable Plan,
the Registration Statement and related prospectus, 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
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 October 30, 1998, which appears on
page F-1 of QUALCOMM Incorporated's Annual Report on Form 10-K for the year
ended September 30, 1998.
PRICEWATERHOUSECOOPERS LLP
San Diego, California
December 18, 1998
<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
NOVEMBER 18, 1996, NOVEMBER 17, 1997, AND DECEMBER 18, 1997
AS AMENDED BY THE COMPENSATION COMMITTEE ON APRIL 24, 1998
AS AMENDED BY THE BOARD OF DIRECTORS ON SEPTEMBER 4, 1998
AS AMENDED BY THE BOARD OF DIRECTORS ON DECEMBER 7, 1998
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 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.
1.
<PAGE> 2
(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 SERVICE 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 Service as 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:
(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
2.
<PAGE> 3
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 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.
3.
<PAGE> 4
(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 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:
(i) 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.
(ii) 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.
(iii) To amend the Plan or an Option as provided in Section 11.
4.
<PAGE> 5
(iv) 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 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 thirty-six million nine hundred thousand (36,900,000)
shares of the Company's common stock; provided, however, that of such thirty-six
million nine hundred thousand (36,900,000) 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 become unexercisable, expire or otherwise terminate, in whole or
in part, the stock not purchasable under such Option shall again become
available for issuance pursuant to the Plan.
(b) The stock subject to the Plan may be unissued shares or reacquired
shares, whether bought on the market or otherwise.
5. ELIGIBILITY.
5.
<PAGE> 6
(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 two percent (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.
(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
6.
<PAGE> 7
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 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. Unless otherwise specified in the
Option Agreement, an Optionee 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 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
7.
<PAGE> 8
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 Service as an Employee, Director
or Consultant terminates (other than upon the Optionee's death or Disability),
the Optionee may exercise his or her Option (to the extent that the Optionee was
entitled to exercise it as of the date of termination, unless the Option
Agreement expressly provides that the Option may become exercisable for
additional shares after the date of termination), but only within such period of
time as is determined by the Board (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.
(h) DISABILITY OF OPTIONEE. In the event an Optionee's Continuous
Service as an Employee, Director or Consultant terminates as a result of the
Optionee's Disability, then: (i) the Option may continue under its original
terms, if so provided in the Option Agreement, or (ii) if the Option Agreement
does not provide for the continuation of the Option under its original terms,
then 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).
(i) DEATH OF OPTIONEE. In the event an Optionee's Continuous Service as
an Employee, Director or Consultant terminates as a result of Optionee's death
or due to the Optionee's Disability and such termination due to Disability is
followed by the Optionee's death, then: (i) the vesting of all unvested shares
may be accelerated as of the date of the death of the Optionee, if so provided
in the Option Agreement, or (ii) if the Option Agreement does not provide for
the acceleration of the vesting of all unvested shares, then 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 that the
Optionee was entitled to exercise the Option at the date of death.
8.
<PAGE> 9
(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 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 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.
9.
<PAGE> 10
(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 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 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:
10.
<PAGE> 11
(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.
(c) In addition, with respect to any person who was providing Continuous
Service as an Employee, Director or Consultant immediately prior to the
consummation of the Change in Control, any Options held by such person shall
immediately become fully vested and exercisable (and any repurchase right by the
Company with respect to shares acquired by such person under an Option shall
lapse) if such person is Involuntarily Terminated Without Cause or
Constructively Terminated within twenty-four (24) months following the Change in
Control. Notwithstanding the preceding sentence, in the event all of the
following occurs: (i) such contemplated Change in Control would occur prior to
December 18, 1999 (the date two (2) years following the adoption of this Section
10(c)); (ii) such potential acceleration of vesting (and exercisability) would
by itself result in a contemplated Change in Control that would otherwise be
eligible to be accounted for as a "pooling of interests" accounting transaction
to become ineligible for such accounting treatment; and (iii) the potential
acquiror of the Company desires to account for such contemplated Change in
Control as a "pooling of interests" transaction, then such acceleration shall
not occur. Additionally, in the event that the restrictions upon acceleration
provided for in the immediately preceding sentence by itself would result in a
contemplated Change in Control to become ineligible to be accounted for as a
"pooling of interests" accounting transaction, then such restrictions shall be
deemed inoperative. Accounting issues shall be determined by the Company's
independent public accountants applying generally accepted accounting
principles.
For purposes of the Plan, Constructively Terminated shall mean the
voluntary termination of employment by Optionee after any of the following are
undertaken without Optionee's express written consent: (a) the assignment to
Optionee of any duties or responsibilities which result in a material diminution
or adverse change of Optionee's position, status or circumstances of employment,
but does not include a mere change in title or reporting relationship; (b)
reduction by the Company in Optionee's base salary; (c) any failure by the
Company to continue in effect any benefit plan or arrangement, including
incentive plans or plans to receive securities of the Company, in which Optionee
is participating (hereinafter referred to as "Benefit Plans"), or the taking of
any action by the Company which would adversely affect Optionee's participation
in or
11.
<PAGE> 12
reduce Optionee's benefits under any Benefit Plans or deprive Optionee of any
fringe benefit then enjoyed by Optionee, provided, however, that Optionee's
termination is not deemed to be Constructively Terminated if the Company offers
a range of benefit plans and programs which, taken as a whole, are comparable to
the Benefit Plans; (d) a relocation of Optionee or the Company's principal
business offices to a location more than fifty (50) miles from the location at
which Optionee performs duties, except for required travel by Optionee on the
Company's business to an extent substantially consistent with Optionee's
business travel obligations; (e) any breach by the Company of any material
agreement between Optionee and the Company concerning Optionee's employment; or
(f) any failure by the Company to obtain the assumption of any material
agreement between Optionee and the Company concerning Optionee's employment by
any successor or assign of the Company.
For purposes of the Plan, Involuntarily Terminated Without Cause shall
mean dismissal or discharge of Optionee for any reason other than Cause, death
or Disability.
For purposes of the Plan, Cause shall mean any of the following: (a) an
intentional act which materially injures the Company; (b) an intentional refusal
or failure to follow lawful and reasonable directions of the Board or an
individual to whom Optionee reports (as appropriate); (c) a willful and habitual
neglect of duties; or (d) a conviction of a felony involving moral turpitude
which is reasonably likely to inflict or has inflicted material injury on the
Company.
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 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
12.
<PAGE> 13
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 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.
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.
13.
<PAGE> 14
PROVISIONS APPLICABLE TO PERSONS SUBJECT TO THE LAWS OF THE
REPUBLIC OF FRANCE
Pursuant to its authority to administer and amend the Plan, the
Committee has adopted the following provisions so that an Option granted to an
Employee who is subject to the laws of the Republic of France will provide the
maximum benefits under the provisions of French law (the "French Option"), and
to provide incentives for such Employee to exert maximum efforts for the success
of the Company. The Company intends that French Options granted pursuant to
these provisions shall qualify for the favorable treatment applicable to stock
options that comply with sections L 208-1 to L 208-8-2 of the Law n(degree)
66-537 of July 24, 1966 (the "French Law"). The terms of the Plan, as adopted
and subsequently amended by the Board and the Committee, and as modified by the
following provisions, constitute QUALCOMM Inc.'s Stock Option Plan for Employees
subject to the laws of the Republic of France ("the French Plan"). Under the
French Plan, such Employees will be granted only French Options. In no case will
such Employees be granted substitute awards. Except as set forth below, the
terms of the Option Agreement for a French Option shall otherwise comply with
the other terms of the Plan.
14. ELIGIBILITY FOR FRENCH OPTION.
(a) No person shall be granted a French Option unless such person is an
Employee.
(b) No person shall be eligible for the grant of a French Option if, at
the time of grant, such person owns (or is deemed to own pursuant to the
applicable laws of France) stock possessing more than ten percent (10%) of
either (i) the total combined voting power of all classes of stock of the
Company or of any of its Affiliates, or (ii) the Company's capital shares (as
defined under French law).
15. ADMINISTRATION.
(a) The French Plan, including the determination of the time to grant a
French Option, shall be administered in accordance with Section 3 of the Plan.
(b) Except as otherwise provided in the French Plan, terms used in the
French Plan shall have the same meanings as set forth under Section 2 of the
Plan.
(c) Throughout the term of the Plan, no French Option shall be granted,
if by making such grant, the aggregate number of shares subject to outstanding
French Options could at any time exceed one-third of the aggregate number of all
shares of all classes of stock of the Company authorized for issuance.
14.
<PAGE> 15
16. FRENCH OPTION PROVISIONS.
(a) PRICE. The exercise price of a French Option shall be no less than
the higher of: (i) ninety-five percent (95%) of the average closing sales price
for such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or market (or the exchange or market with the greatest volume of
trading in the Company's common stock) for the twenty (20) market trading days
immediately preceding the day of determination, as reported in The Wall Street
Journal or such other source as the Board deems reliable; or (ii) one hundred
percent (100%) of the Fair Market Value of the stock.
(b) TRANSFERABILITY. The terms of a French Option shall provide that
during the lifetime of the Optionee, the French Option may be exercised only by
the Optionee. The terms of a French Option shall not permit transfer of the
French Option, except on death and then only to the extent permitted by French
law. In the event of the death of the Optionee during the Optionee's Continuous
Service as an Employee, Director or Consultant, such French Option may be
transferred to the extent permitted by French law. A French Option so
transferred may be exercised (to the extent the Optionee was entitled to
exercise such French Option as of the date of death) by the transferee only
within the period ending on the earlier of (i) the date six (6) months following
the date of death, or (ii) the expiration of the term of such French Option as
set forth in the Option Agreement.
(c) VESTING. A French Option shall vest (become exercisable) as provided
in the Option Agreement, subject to the condition that on the vesting date, the
Optionee is a salaried employee of the Company or its Affiliate, except such
condition shall not apply in the event of the Optionee's Disability, or as
provided under Section 10 of the French Plan. The Option Agreement for a French
Option may, but need not, include a provision whereby the Optionee may elect, at
any time while an Employee, to exercise the French Option as to any part or all
of the shares subject to such French Option prior to the full vesting of such
French Option. Any unvested shares so purchased shall be subject to a repurchase
right in favor of the Company until such shares have vested and may be subject
to any other restriction the Board determines to be appropriate (e.g., a
prohibition on the sale of such unvested shares without the prior written
consent of the Company).
(d) DEATH. In the event of the death of an Optionee, the Option
Agreement for a French Option shall provide that such Optionee's heirs may only
exercise the French Option within a period of time not to exceed six months
following such Optionee's death (and in no event after the date on which the
French Option would otherwise terminate). If, after the Optionee's death, the
French Option is not exercised within the time specified in the Option
Agreement, the French Option shall terminate, and the shares covered by such
French Option shall revert to and again become available for issuance pursuant
to Options (whether or not a French Option) granted under the Plan.
15.
<PAGE> 16
17. ADJUSTMENTS UPON CHANGES IN STOCK.
Any adjustment pursuant to Section 10 of the Plan, of stock subject to a
French Option, shall be made (a) in accordance with the applicable law of the
state in which the Company is incorporated at the time the adjustment is made,
and (b) in accordance with any applicable rules of the stock exchange (including
for this purpose the Nasdaq National Market System) which the Company uses to
determine Fair Market Value; provided however, that such adjustments are among
those contemplated by section L 208-5 of the French Law (or any successor
provision).
18. INTERPRETATION.
It is intended that options granted under the French Plan shall qualify
for the favorable tax and social security treatment applicable to stock options
granted under sections L 208-1 up to L 208-8-2 of the Law n(degree) 66-537 of
July 24, 1966 and in accordance with the relevant provisions set forth by French
tax law and the French tax administration. The terms of the French Plan shall be
interpreted accordingly and in accordance with the relevant provisions set forth
by French tax and social security laws, as well as the French tax and social
security regulations.
19. GOVERNING LAW.
Except as required by French tax and social security laws and
regulations, the Plan shall be governed and construed in accordance with the
laws of the State of California and the United States of America.
20. ADOPTION
The French Plan was adopted by a meeting of the Committee duly appointed
by the Board, held on April 24, 1998.
16.
<PAGE> 1
EXHIBIT 99.2
QUALCOMM Incorporated
1991 EMPLOYEE STOCK PURCHASE PLAN
Adopted by the Board of Directors August 19, 1991
As amended by the Board of Directors on July 27, 1993, November 6, 1995 and
November 17, 1997
1. PURPOSE.
(a) The purpose of the QUALCOMM Incorporated 1991 Employee Stock
Purchase Plan (the "Plan") is to provide a means by which employees of QUALCOMM
Incorporated, a Delaware corporation (the "Company"), and its Affiliates, as
defined in subparagraph 1(b), which are designated as provided in subparagraph
2(b), may be given an opportunity to purchase stock of the Company.
(b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company, whether now or hereafter
existing, as those terms are defined in Sections 424(e) and (f), respectively,
of the Internal Revenue Code of 1986, as amended (the "Code").
(c) The Company, by means of the Plan, seeks to retain the
services of its employees, to secure and retain the services of new employees,
and to provide incentives for such persons to exert maximum efforts for the
success of the Company.
(d) The Company intends that the rights to purchase stock of the
Company granted under the Plan be considered options issued under an "employee
stock purchase plan" as that term is defined in Section 423(b) of the Code.
2. ADMINISTRATION.
(a) The Plan shall be administered by the Board of Directors (the
"Board") of the Company unless and until the Board delegates administration to a
Committee, as provided in subparagraph 2(c). Whether or not the Board has
delegated administration, the Board shall have the final power to determine all
questions of policy and expediency that may arise in the administration of the
Plan.
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(i) To determine when and how rights to purchase stock of
the Company shall be granted and the provisions of each offering of such rights
(which need not be identical).
(ii) To designate from time to time which Affiliates of
the Company shall be eligible to participate in the Plan.
(iii) To construe and interpret the Plan and rights
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, in a manner and to the extent it
shall deem necessary or expedient to make the Plan fully effective.
(iv) To amend the Plan as provided in paragraph 13.
(v) 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.
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(c) The Board may delegate administration of the Plan to a
Committee composed of not fewer than two (2) members of the Board (the
"Committee"). 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, 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.
3. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of paragraph 12 relating to
adjustments upon changes in stock, the stock that may be sold pursuant to rights
granted under the Plan shall not exceed in the aggregate two million (4,200,000)
shares of the Company's $0.0001 par value common stock (the "Common Stock"). If
any right granted under the Plan shall for any reason terminate without having
been exercised, the Common Stock not purchased under such right shall again
become available for issuance under the Plan.
(b) The stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.
4. GRANT OF RIGHTS; OFFERING.
The Board or the Committee may from time to time grant or provide
for the grant of rights to purchase Common Stock of the Company under the Plan
to eligible employees (an "Offering") on a date or dates (the "Offering
Date(s)") selected by the Board or the Committee. Each Offering shall be in such
form and shall contain such terms and conditions as the Board or the Committee
shall deem appropriate. If an employee has more than one right outstanding under
the Plan, unless he or she otherwise indicates in agreements or notices
delivered hereunder: (1) each agreement or notice delivered by that employee
will be deemed to apply to all of his or her rights under the Plan, and (2) a
right with a lower exercise price (or an earlier-granted right, if two rights
have identical exercise prices), will be exercised to the fullest possible
extent before a right with a higher exercise price (or a later-granted right, if
two rights have identical exercise prices) will be exercised. The provisions of
separate Offerings need not be identical, but each Offering shall include
(through incorporation of the provisions of this Plan by reference in the
Offering or otherwise) the substance of the provisions contained in paragraphs 5
through 8, inclusive.
5. ELIGIBILITY.
(a) Rights may be granted only to employees of the Company or, as
the Board or the Committee may designate as provided in subparagraph 2(b), to
employees of any Affiliate of the Company. Except as provided in subparagraph
5(b), an employee of the Company or any Affiliate shall not be eligible to be
granted rights under the Plan, unless, on the Offering Date, such employee has
been in the employ of the Company or any Affiliate for such continuous period
preceding such grant as the Board or the Committee may require, but in no event
shall the required period of continuous employment be equal to or greater than
two (2) years. In addition, unless otherwise determined by the Board or the
Committee and set forth in the terms of the applicable Offering, no employee of
the Company or any Affiliate shall be eligible to be granted rights under the
Plan, unless, on the Offering Date, such employee's customary employment with
the Company or such Affiliate is at least twenty (20) hours per week and at
least five (5) months per calendar year.
(b) The Board or the Committee may provide that, each person who,
during the course of an Offering, first becomes an eligible employee of the
Company or designated Affiliate will, on a date or dates specified in the
Offering which coincides with the day on which such person becomes an eligible
employee or occurs thereafter, receive a right under that Offering, which right
shall thereafter be deemed to be a part of that
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<PAGE> 3
Offering. Such right shall have the same characteristics as any rights
originally granted under that Offering, as described herein, except that:
(i) the date on which such right is granted shall be the
"Offering Date" of such right for all purposes, including determination of the
exercise price of such right;
(ii) the Purchase Period (as defined below) for such right
shall begin on its Offering Date and end coincident with the end of such
Offering; and
(iii) the Board or the Committee may provide that if such
person first becomes an eligible employee within a specified period of time
before the end of the Purchase Period (as defined below) for such Offering, he
or she will not receive any right under that Offering.
(c) No employee shall be eligible for the grant of any rights
under the Plan if, immediately after any such rights are granted, such employee
owns stock possessing five percent (5%) or more of the total combined voting
power or value of all classes of stock of the Company or of any Affiliate. For
purposes of this subparagraph 5(c), the rules of Section 424(d) of the Code
shall apply in determining the stock ownership of any employee, and stock which
such employee may purchase under all outstanding rights and options shall be
treated as stock owned by such employee.
(d) An eligible employee may be granted rights under the Plan
only if such rights, together with any other rights granted under "employee
stock purchase plans" of the Company and any Affiliates, as specified by Section
423(b)(8) of the Code, do not permit such employee's rights to purchase stock of
the Company or any Affiliate to accrue at a rate which exceeds twenty-five
thousand dollars ($25,000) of fair market value of such stock (determined at the
time such rights are granted) for each calendar year in which such rights are
outstanding at any time.
(e) Officers of the Company shall be eligible to participate in
Offerings under the Plan, provided, however, that the Board may provide in an
Offering that certain employees who are highly compensated employees within the
meaning of Section 423(b)(4)(D) of the Code shall not be eligible to
participate.
6. RIGHTS; PURCHASE PRICE.
(a) On each Offering Date, each eligible employee, pursuant to an
Offering made under the Plan, shall be granted the right to purchase up to the
number of shares of Common Stock of the Company purchasable with a percentage
designated by the Board or the Committee not exceeding fifteen percent (15%) of
such employee's Earnings (as defined in Section 7(a)) during the period which
begins on the Offering Date (or such later date as the Board or the Committee
determines for a particular Offering) and ends on the date stated in the
Offering, which date shall be no more than twenty-seven (27) months after the
Offering Date (the "Purchase Period"). In connection with each Offering made
under this Plan, the Board or the Committee shall specify a maximum number of
shares which may be purchased by any employee as well as a maximum aggregate
number of shares which may be purchased by all eligible employees pursuant to
such Offering. In addition, in connection with each Offering which contains more
than one Exercise Date (as defined in the Offering), the Board or the Committee
may specify a maximum aggregate number of shares which may be purchased by all
eligible employees on any given Exercise Date under the Offering. If the
aggregate purchase of shares upon exercise of rights granted under the Offering
would exceed any such maximum aggregate number, the Board or the Committee shall
make a pro rata allocation of the shares available in as nearly a uniform manner
as shall be practicable and as it shall deem to be equitable.
(b) The purchase price of stock acquired pursuant to rights
granted under the Plan shall be not less than the lesser of:
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(i) an amount equal to eighty-five percent (85%) of the
fair market value of the stock on the Offering Date; or
(ii) an amount equal to eighty-five percent (85%) of the
fair market value of the stock on the Exercise Date.
(c) For purposes of this Plan, "fair market value" means, as of
any date, the value of the common stock of the Company determined as follows:
(i) if the common stock is listed on any established stock
exchange or a national market system, including without limitation the National
Market System of the National Association of Securities Dealers, Inc. Automated
Quotation ("NASDAQ") System, 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 system on the date as of which the
determination is to be made (or, if such date is not a trading day on such
exchange system, on the date that is the next market trading day following the
date as of which the determination is to be made);
(ii) if the common stock is quoted on the NASDAQ System
(but not on the National Market System 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 date as of which the
determination is to be made (or, if such date is not a trading day on such
exchange system, on the date that is the next market trading day following the
date as of which the determination is to be made), as reported in the Wall
Street Journal or such other sources 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.
7. PARTICIPATION; WITHDRAWAL; TERMINATION.
(a) An eligible employee may become a participant in an Offering
by delivering a participation agreement to the Company within the time specified
in the Offering, in such form as the Company provides. Each such agreement shall
authorize payroll deductions of up to the maximum percentage specified by the
Board or the Committee of such employee's Earnings during the Purchase Period.
"Earnings" is defined as the total compensation paid to an employee, including
all salary, wages (including amounts elected to be deferred by the employee,
that would otherwise have been paid, under any cash or deferred arrangement
established by the Company), overtime pay, and other remuneration paid directly
to the employee, but excluding commissions, bonuses, profit sharing, the cost of
employee benefits paid for by the Company, education or tuition reimbursements,
imputed income arising under any Company group insurance or benefit program,
traveling expenses, business and moving expense reimbursements, income received
in connection with stock options, contributions made by the Company under any
employee benefit plan, and similar items of compensation. The payroll deductions
made for each participant shall be credited to an account for such participant
under the Plan and shall be deposited with the general funds of the Company. A
participant may reduce (including to zero), increase or begin such payroll
deductions after the beginning of any Purchase Period only as provided for in
the Offering. A participant may make additional payments into his or her account
only if specifically provided for in the Offering and only if the participant
has not had the maximum amount withheld during the Purchase Period.
(b) At any time during a Purchase Period a participant may
terminate his or her payroll deductions under the Plan and withdraw from the
Offering by delivering to the Company a notice of withdrawal in such form as the
Company provides. Such withdrawal may be elected at any time prior to the end of
the Purchase Period except as provided by the Board or the Committee in the
Offering. Upon such withdrawal from the Offering by a participant, the Company
shall distribute to such participant all of his or her accumulated payroll
deductions
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<PAGE> 5
(reduced to the extent, if any, such deductions have been used to acquire stock
for the participant) under the Offering, without interest, and such
participant's interest in that Offering shall be automatically terminated. A
participant's withdrawal from an Offering will have no effect upon such
participant's eligibility to participate in any other Offerings under the Plan
but such participant will be required to deliver a new participation agreement
in order to participate in subsequent Offerings under the Plan.
(c) Rights granted pursuant to any Offering under the Plan shall
terminate immediately upon cessation of any participating employee's employment
with the Company or an Affiliate, for any reason, and the Company shall
distribute to such terminated employee all of his or her accumulated payroll
deductions (reduced to the extent, if any, such deductions have been used to
acquire stock for the terminated employee), under the Offering, without
interest.
(d) Rights granted under the Plan shall not be transferable, and
shall be exercisable only by the person to whom such rights are granted.
8. EXERCISE.
(a) On each exercise date, as defined in the relevant Offering
(an "Exercise Date"), each participant's accumulated payroll deductions and
other additional payments specifically provided for in the Offering (without any
increase for interest) will be applied to the purchase of whole shares of stock
of the Company, up to the maximum number of shares permitted pursuant to the
terms of the Plan and the applicable Offering, at the purchase price specified
in the Offering. No fractional shares shall be issued upon the exercise of
rights granted under the Plan. The amount, if any, of accumulated payroll
deductions remaining in each participant's account after the purchase of shares
which is less than the amount required to purchase one share of stock on the
final Exercise Date of an Offering shall be held in each such participant's
account for the purchase of shares under the next Offering under the Plan,
unless such participant withdraws from such next Offering, as provided in
subparagraph 7(b), or is no longer eligible to be granted rights under the Plan,
as provided in paragraph 5, in which case such amount shall be distributed to
the participant after said final Exercise Date, without interest. The amount, if
any, of accumulated payroll deductions remaining in any participant's account
after the purchase of shares which is equal to the amount required to purchase
whole shares of stock on the final Exercise Date of an Offering shall be
distributed in full to the participant after such Exercise Date, without
interest.
(b) No rights granted under the Plan may be exercised to any
extent unless the Plan (including rights granted thereunder) is covered by an
effective registration statement pursuant to the Securities Act of 1933, as
amended (the "Securities Act"). If on an Exercise Date of any Offering hereunder
the Plan is not so registered, no rights granted under the Plan or any Offering
shall be exercised on said Exercise Date and the Exercise Date shall be delayed
until the Plan is subject to such an effective registration statement, except
that the Exercise Date shall not be delayed more than two (2) months and the
Exercise Date shall in no event be more than twenty-seven (27) months from the
Offering Date. If on the Exercise Date of any Offering hereunder, as delayed to
the maximum extent permissible, the Plan is not registered, no rights granted
under the Plan or any Offering shall be exercised and all payroll deductions
accumulated during the purchase period (reduced to the extent, if any, such
deductions have been used to acquire stock) shall be distributed to the
participants, without interest.
9. COVENANTS OF THE COMPANY.
(a) During the terms of the rights granted under the Plan, the
Company shall keep available at all times the number of shares of stock required
to satisfy such rights.
(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 rights granted
under the Plan. 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
5
<PAGE> 6
sale of stock under the Plan, the Company shall be relieved from any liability
for failure to issue and sell stock upon exercise of such rights unless and
until such authority is obtained.
10. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to rights granted under
the Plan shall constitute general funds of the Company.
11. RIGHTS AS A STOCKHOLDER.
A participant shall not be deemed to be the holder of, or to have
any of the rights of a holder with respect to, any shares subject to rights
granted under the Plan unless and until certificates representing such shares
shall have been issued.
12. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or
subject to any rights granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or otherwise), the Plan and outstanding
rights will be appropriately adjusted in the class(es) and maximum number of
shares subject to the Plan and the class(es) and number of shares and price per
share of stock subject to outstanding rights.
(b) In the event of: (1) a dissolution or liquidation of the
Company; (2) a merger or consolidation in which the Company is not the surviving
corporation; (3) a reverse merger in which the Company is the surviving
corporation but the shares of the Company's Common Stock outstanding immediately
preceding the merger are converted by virtue of the merger into other property,
whether in the form of securities, cash or otherwise; or (4) any other capital
reorganization in which more than fifty percent (50%) of the shares of the
Company entitled to vote are exchanged, then, as determined by the Board in its
sole discretion (i) any surviving corporation may assume outstanding rights or
substitute similar rights for those under the Plan, (ii) such rights may
continue in full force and effect, or (iii) participants' accumulated payroll
deductions may be used to purchase Common Stock immediately prior to the
transaction described above and the participants' rights under the ongoing
Offering terminated.
13. AMENDMENT OF THE PLAN.
(a) The Board at any time, and from time to time, may amend the
Plan. However, except as provided in paragraph 12 relating to adjustments upon
changes in stock, no amendment shall be effective unless approved by the
stockholders of the Company within twelve (12) months before or after the
adoption of the amendment, where the amendment will:
(i) Increase the number of shares reserved for rights
under the Plan;
(ii) Modify the provisions as to eligibility for
participation in the Plan (to the extent such modification requires stockholder
approval in order for the Plan to obtain employee stock purchase plan treatment
under Section 423 of the Code or to comply with the requirements of Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended ("Rule
16b-3")); or
(iii) Modify the Plan in any other way if such
modification requires stockholder approval in order for the Plan to obtain
employee stock purchase plan treatment under Section 423 of the Code or to
comply with the requirements of Rule 16b-3.
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<PAGE> 7
It is expressly contemplated that the Board may amend the Plan in any respect
the Board deems necessary or advisable to provide eligible employees with the
maximum benefits provided or to be provided under the provisions of the Code and
the regulations promulgated thereunder relating to employee stock purchase plans
and/or to bring the Plan and/or rights granted under it into compliance
therewith.
(b) Rights and obligations under any rights granted before
amendment of the Plan shall not be altered or impaired by any amendment of the
Plan, except with the consent of the person to whom such rights were granted or
except as necessary to comply with any laws or governmental regulation.
14. 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 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 rights may be granted under the Plan while the Plan is
suspended or after it is terminated.
(b) Rights and obligations under any rights granted while the
Plan is in effect shall not be altered or impaired by suspension or termination
of the Plan, except with the consent of the person to whom such rights were
granted or except as necessary to comply with any laws or governmental
regulation.
15. EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the Board, but
no rights granted under the Plan shall be exercised unless and until the Plan
has been approved by the stockholders of the Company.
7
<PAGE> 1
EXHIBIT 99.3
QUALCOMM INCORPORATED
1998 NON-EMPLOYEE DIRECTORS'
STOCK OPTION PLAN
ADOPTED EFFECTIVE FEBRUARY 10, 1998
STOCKHOLDER APPROVAL FEBRUARY 10, 1998
1. PURPOSE.
(a) The purpose of the Plan is to provide a means by which Non-Employee
Directors may be given an opportunity to benefit from increases in value of the
common stock of the Company ("Common Stock") through the granting of
Nonstatutory Stock Options. This Plan shall serve as an amendment and
restatement of the Company's Non-Employee Director Stock Option Plan, which was
adopted by the Company in 1993 (the "Prior Plan"), and shall be effective
February 10, 1998 (the "Effective Date").
(b) The Company, by means of the Plan, seeks to retain the services of
persons now serving as Non-Employee Directors of the Company, to secure and
retain the services of persons capable of serving in such capacity and to
provide incentives for such persons to exert maximum efforts for the success of
the Company.
(c) The Company intends that the Options issued under the Plan shall be
Nonstatutory Stock Options granted pursuant to Section 6 hereof.
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) "ANNUAL OPTION" means a stock option granted pursuant to subsection
5(c) of the Plan.
(c) "BOARD" means the Board of Directors of the Company.
(d) "CODE" means the Internal Revenue Code of 1986, as amended.
(e) "COMMITTEE" means a Committee appointed by the Board in accordance
with subsection 3(c) of the Plan.
(f) "COMPANY" means QUALCOMM Incorporated, a Delaware corporation.
(g) "CONSULTANT" means any person, including an advisor, engaged by the
Company or an Affiliate to render consulting services and who is compensated for
such services,
1.
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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.
(h) "CONTINUOUS SERVICE" means that the Optionee's service to the
Company or an Affiliate of the Company, whether in the capacity of a Director or
subsequently as an Employee or a Consultant, is not interrupted or terminated.
The Optionee's Continuous Service shall not be deemed to have terminated merely
because of a change in the capacity in which the Optionee renders such service
to the Company or an Affiliate of the Company or a change in the entity for
which the Optionee renders such service, provided that there is no interruption
or termination of the Optionee's service. The Board or its designee, in that
party's sole discretion, may determine whether Continuous Service shall be
considered interrupted in the case of: (i) any leave of absence approved by the
Board or its designee, including sick leave, military leave, or any other
personal leave; or (ii) transfers between locations of the Company or between
the Company, Affiliates or their successors.
(i) "DIRECTOR" means a member of the Board.
(j) "DISABILITY" means the permanent and total disability of the
Optionee within the meaning of 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:
(i) If the Common Stock is listed on any established stock
exchange, or traded on the Nasdaq National 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
trading day prior to the day of determination (or, in the case in which the
Common Stock is traded on more than one market, the exchange or system on which
the Common Stock has the highest average trading volume), as reported in the
Wall Street Journal or such other source as the Board deems reliable; or
(ii) in the absence of any such 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.
2.
<PAGE> 3
(o) "INITIAL OPTION" means a stock option granted pursuant to subsection
5(b) of the Plan.
(p) "NON-EMPLOYEE DIRECTOR" means a Director who is not a current
Employee or Officer of the Company or its parent or a subsidiary and 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.
(q) "NONSTATUTORY STOCK OPTION" means an Option not intended to qualify
as an Incentive Stock Option.
(r) "OFFICER" means any person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(s) "OPTION" means a stock option granted pursuant to the Plan.
(t) "OPTION AGREEMENT" means a written agreement between the Company and
an Optionee evidencing the terms and conditions of an individual Option grant.
Each Option Agreement shall be subject to the terms and conditions of the Plan.
(u) "OPTIONEE" means a person to whom an Option is granted pursuant to
the Plan.
(v) "PLAN" means this QUALCOMM Incorporated 1998 Non-Employee Directors'
Stock Option Plan.
(w) "RULE 16b-3" means Rule 16b-3 of the Exchange Act or any successor
to Rule 16b-3, as in effect when discretion is being exercised with respect to
the Plan.
(x) "SECURITIES ACT" means the Securities Act of 1933, as amended.
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:
(i) 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.
(ii) To amend the Plan or an Option as provided in Section 11.
3.
<PAGE> 4
(iii) 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 which are not in conflict with the provisions of the Plan.
(c) The Board may delegate administration of the Plan to a Committee or
Committees of not fewer than two members of the Board. 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 (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, and to the
requirements of Section 144 of the Delaware General Corporation Law. The Board
may abolish the Committee at any time and revest in the Board the administration
of the Plan.
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 issued pursuant to Options shall not
exceed in the aggregate Five Hundred Thousand (500,000) shares of Common Stock.
This share reserve shall be comprised of: (i) the Thirty Thousand (30,000)
shares of Common Stock available for grant under the Prior Plan plus (ii) an
additional Four Hundred and Seventy Thousand (470,000) shares. If any Option
(including an Option granted under the Prior Plan) shall for any reason expire
or otherwise terminate, in whole or in part, without having been exercised in
full, the stock not acquired under such Option shall revert to and again become
available for issuance under the Plan. Similarly, if the Company shall for any
reason exercise its right of repurchase with respect to any unvested shares of
Common Stock purchased pursuant an early exercise provision, as provided for in
subsection 6(j), the unvested shares so repurchased shall revert to and again
become available for issuance under the Plan.
(b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.
5. ELIGIBILITY AND NON-DISCRETIONARY GRANTS.
(a) Options shall be granted only to Non-Employee Directors of the
Company.
(b) Each person who is, on the Effective Date or any subsequent date
thereto, elected or appointed for the first time to be a Non-Employee Director
shall automatically, upon such date of initial election or appointment, be
granted an Initial Option to purchase Twenty Thousand (20,000) shares of Common
Stock of the Company on the terms and conditions set forth herein.
(c) Each year, commencing with the annual meeting of stockholders of the
Company (the "Annual Meeting") occurring in 1998, each person who is then
serving as a Non-Employee Director, other than a Non-Employee Director who is
granted an Initial Option at such Annual Meeting, shall automatically be granted
an Annual Option to purchase Ten
4.
<PAGE> 5
Thousand (10,000) shares of Common Stock of the Company on the terms and
conditions set forth herein.
6. OPTION PROVISIONS.
Each Option shall include (through incorporation of provisions hereof by
reference in the Option or otherwise) 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.
(b) PRICE. The exercise price of each Option shall equal 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 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, by (A) delivery to the Company of other Common Stock of
the Company or (B) other arrangement (which may include, without limiting the
generality of the foregoing, the use of other Common Stock of the Company) with
the Optionee in any other form of legal consideration that may be acceptable to
the Board.
(d) TRANSFERABILITY. An Option shall be transferable only to the extent
specifically provided in the Option Agreement; provided, however, that if the
Option Agreement does not specifically provide for the transferability of the
Option, the Option shall not be transferable except by will or by the laws of
descent and distribution and shall be exercisable during the lifetime of the
person to whom the Option is granted only by such person or by such person's
guardian or legal representative. Notwithstanding the foregoing, 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.
(i) The total number of shares of stock subject to an Option
shall be allotted in periodic installments. The Option Agreement shall 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.
5.
<PAGE> 6
(ii) Initial Options shall vest over a period of five (5) years
with twenty percent (20%) of the total number of such shares subject to such
Option ("Option Shares") vesting as follows: (A) if the Initial Option is
granted pursuant to the election of the Optionee to the Board at an Annual
Meeting, then such Initial Option will vest on January 15 of each of the first,
second, third, fourth and fifth years following the date of the grant of such
Initial Option; or (B) if the Initial Option is granted pursuant to the election
or appointment of the Optionee to the Board at some time other than at an Annual
Meeting, then such Initial Option will vest on the anniversary of the date of
the grant of such Initial Option in each of first, second, third, fourth and
fifth years following such grant; provided, however, that if the Optionee's
Continuous Service is terminated due to (1) death, (2) a Voluntary Termination
with Good Reason (as defined in subsection 10(c)), or (3) an Involuntary
Termination without Cause (as defined in subsection 10(d)), then the vesting of
such Initial Option and the time during which such Initial Option may be
exercised shall be accelerated upon the occurrence of such event.
(iii) Annual Options shall vest over five (5) years, with twenty
percent (20%) of the Option Shares vesting on January 15 of each of the first,
second, third, fourth and fifth years following the date of the grant of such
Annual Option; provided, however, that if the Optionee's Continuous Service is
terminated due to (1) death, (2) a Voluntary Termination with Good Reason, or
(3) an Involuntary Termination without Cause, then the vesting of such Annual
Option and the time during which such Annual Option may be exercised shall be
accelerated upon the occurrence of such event.
(f) TERMINATION OF SERVICE. In the event an Optionee's Continuous
Service terminates (other than upon the Optionee's retirement at age seventy
(70) or older after nine (9) or more years of service on the Board or, the
Optionee's death or Disability), the Optionee may exercise his or her Option (to
the extent that the Optionee was entitled to exercise it at the date of
termination) but only within such period of time ending on the earlier of (i)
the date thirty (30) days after the termination of the Optionee's Continuous
Service or (ii) the expiration of the term of the Option as set forth in the
Option Agreement. 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 under the Plan.
If the exercise of the Option following the termination of the
Optionee's Continuous Service (other than upon the Optionee's retirement at age
seventy (70) or older after nine (9) or more years of service on the Board or
the Optionee's death or Disability) would be prohibited at any time solely
because the issuance of shares would violate the registration requirements under
the Securities Act, then the Option shall terminate on the earlier of (i) the
expiration of the term of the Option or (ii) the expiration of a period of
thirty (30) days after the termination of the Optionee's Continuous Service
during which the exercise of the Option would not be in violation of such
registration requirements (if such provisions would result in an extension of
the time during which the Option may be exercised beyond the period described in
the first paragraph of this subsection 6(f)).
6.
<PAGE> 7
If the exercise of the Option following the termination of the
Optionee's Continuous Service (other than upon the Optionee's retirement at age
seventy (70) or older after nine (9) or more years of service on the Board or
the Optionee's death or Disability) would be prohibited at any time solely
because such exercise would result in liability under Section 16(b) of the
Exchange Act, then the Option shall terminate on the earliest of (i) the
expiration of the term of the Option, (ii) the tenth (10th) day after the last
date upon which exercise would result in such liability, or (iii) six (6) months
and ten (10) days after the termination of the Optionee's Continuous Service.
(g) RETIREMENT OF OPTIONEE. Notwithstanding anything in subsection 6(f)
to the contrary, in the event of the retirement of an Optionee at age seventy
(70) or older after nine (9) years of service on the Board, the Option will
terminate only upon the expiration of the Option term.
(h) DISABILITY OF OPTIONEE. Notwithstanding anything in subsection 6(f)
to the contrary, in the event an Optionee's Continuous Service terminates due to
the Disability of the Optionee, the Option will terminate only upon the
expiration of the Option term.
(i) DEATH OF OPTIONEE. In the event that: (i) an Optionee's Continuous
Service terminates due to the death of the Optionee, or (ii) an Optionee's
Continuous Service terminates due to the Disability of the Optionee and such
termination is subsequently followed by the death of the Optionee prior to the
expiration of the term of the Option, then the vesting of all unvested shares
owned by the Optionee will be accelerated effective as of the date of death of
the Optionee and the Option may be exercised by the Optionee's estate, by a
person who acquired the right to exercise the Option by bequest or inheritance,
or by a person designated to exercise the option upon the Optionee's death
pursuant to subsection 6(d), but only within the period ending twelve (12)
months after the death of the Optionee. If, after the death of the Optionee, the
Option is not exercised 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 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 shall be subject to a repurchase right in favor of the Company, with
the repurchase price to be equal to the original purchase price of the Common
Stock, or to any other restriction the Board determines to be appropriate;
provided, however, that (i) the right to repurchase at the original purchase
price shall lapse at a rate of twenty percent (20%) per year over five (5) years
from the date the Option was granted, and (ii) such right shall be exercisable
only within (A) the ninety (90) day period following the termination of the
Optionee's Continuous Service or (B) such longer period as may be agreed to by
the Company and the Optionee.
7.
<PAGE> 8
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 under Options. If, after reasonable efforts, the Company
is unable to obtain from any such regulatory commission or agency the authority
which counsel for the Company deems necessary for the lawful issuance and sale
of stock under the Plan, the Company shall be relieved from any liability for
failure to issue and sell stock 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) Neither a Non-Employee Director nor any person to whom an Option is
transferred in accordance with the Plan 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.
(b) Nothing in the Plan or any instrument executed or Option granted
pursuant thereto shall confer upon any holder of Options any right to continue
serving as a Director, Employee or Consultant, or shall affect the right of the
Company or any Affiliate to terminate the Optionee's service as a Director,
Employee or Consultant, pursuant to the Company's Bylaws and the provisions of
the corporate law of the state in which the Company is incorporated.
(c) The Company may require any person to whom an Option is granted, or
any person to whom an Option is transferred in accordance with the Plan, as a
condition of exercising or acquiring stock under any Option: (i) to give written
assurances satisfactory to the Company as to such person'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 (ii) 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. The foregoing requirements, and any
assurances given pursuant to such requirements, shall be inoperative if (i) the
issuance of the shares upon the exercise or acquisition of stock under the
Option has been registered under a then currently effective registration
statement under the Securities Act,
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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. The Company may, upon advice of counsel to the
Company, place legends on stock certificates issued under the Plan as such
counsel deems necessary or appropriate in order to comply with applicable
securities laws, including, but not limited to, legends restricting the transfer
of the stock.
(d) To the extent provided by the terms of an Option Agreement, the
person to whom an Option is granted may satisfy any federal, state or local tax
withholding obligation relating to the exercise or acquisition of stock under an
Option by any of the following means (in addition to the Company's right to
withhold from any compensation paid to such person by the Company) or by a
combination of such means: (i) tendering a cash payment; (ii) authorizing the
Company to withhold shares from the shares of the Common Stock otherwise
issuable to the participant as a result of the exercise or acquisition of stock
under the Option; or (iii) delivering to the Company owned and unencumbered
shares of the Common Stock of the Company.
10. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or subject
to any Option, without the receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization, reincorporation, 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 by the
Company), the Plan will be appropriately adjusted in the type(s) and maximum
number of securities subject to the Plan pursuant to subsection 4(a), and the
outstanding Options will be appropriately adjusted in the type(s) and number of
securities and price per share of stock subject to such outstanding Options.
Such adjustments shall be made by the Board, the determination of which shall be
final, binding and conclusive. (The conversion of any convertible securities of
the Company shall not be treated as a "transaction not involving the receipt of
consideration by the Company.")
(b) In the event of: (1) a dissolution or liquidation of the Company,
(2) the sale of all or substantially all of the Company's assets, (3) a merger,
consolidation or reorganization of the Company with or into another corporation
or other legal person, other than a merger, consolidation or reorganization in
which more than fifty percent (50%) of the combined voting power of the
then-outstanding securities of the surviving entity (or if more than one entity
survives the transaction, the controlling entity) immediately after such a
transaction are held in the aggregate by holders of voting securities of the
Company immediately prior to such transaction, (4) the acquisition by any person
(within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act)
of beneficial ownership (within the meaning of Rule 13d-3 or any successor rule
or regulation promulgated under the Exchange Act) of securities representing
fifty percent (50%) or more of the combined voting power of the then-outstanding
securities of the Company, or (5) during any period of two (2) consecutive
years, individuals who at the beginning of any such period constitute the
Directors of the Company (the
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<PAGE> 10
"Incumbent Directors") cease for any reason to constitute at least a majority
thereof unless the election or the nomination for election by the Company's
stockholders of a Director of the Company first elected during such period was
approved by the vote of at least two-thirds of the Incumbent Directors,
whereupon such Director shall also be classified as an Incumbent Director
(collectively, a "Change in Control"), then: (i) any surviving or acquiring
corporation shall assume Options outstanding under the Plan or shall substitute
similar options (including an option to acquire the same consideration paid to
stockholders in the transaction described in this subsection 10(b)) for those
outstanding under the Plan and in the event any surviving or acquiring
corporation does assume such Options or substitute similar options for those
outstanding under the Plan, then upon the Optionee's Voluntary Termination with
Good Reason (as described in subsection 10(c)) or the Optionee's Involuntary
Termination without Cause (as described in subsection 10(d)) the vesting of such
Options and the time during which such Options may be exercised shall be
accelerated upon the occurrence of such event or (ii) in the event any surviving
or acquiring corporation refuses to assume such Options or to substitute similar
options for those outstanding under the Plan, then (A) with respect to Options
held by persons then performing services as Directors, Employees or Consultants,
the vesting of such Options and the time during which such Options may be
exercised shall be accelerated prior to such event and the Options terminated if
not exercised after such acceleration and at or prior to such event, and (B)
with respect to any other Options outstanding under the Plan, such Options shall
be terminated if not exercised prior to such event.
(c) The term "Voluntary Termination with Good Reason" means the
Optionee's resignation, with Good Reason (as defined below), as a Director,
within one (1) month prior to the Change in Control or within thirteen (13)
months following a Change in Control. "Good Reason" means any of the following
to the extent applicable to the Optionee's position as a Director, Employee or
Consultant at that time:
(i) reduction of the Optionee's rate of compensation (including
Director fees) as in effect immediately prior to the Change in Control;
(ii) failure to provide a package of benefits which, taken as a
whole, provide substantially similar benefits to those in which the Optionee was
entitled to participate immediately prior to the Change in Control;
(iii) a change in the Optionee's responsibilities, authority,
title or office resulting in diminution of position, excluding for this purpose
an isolated, insubstantial and inadvertent action not taken in bad faith which
is remedied by the Company promptly after notice thereof is given by the
Optionee;
(iv) a request that the Optionee render services at a site more
than thirty-five (35) miles from the prior site at which Optionee rendered
services, unless the Optionee accepts such relocation request;
(v) failure or refusal of a successor to the Company to assume
any Option granted under this Plan; or
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(vi) any material breach by the Company or any successor to the
Company of any of the material provisions of the Optionee's Option.
(d) The term "Involuntary Termination without Cause" means the
involuntary termination without Cause (as defined below) of the Optionee's
Continuous Service by the Company within one (1) month prior to a Change in
Control or within thirteen (13) months following a Change in Control. "Cause"
means any of the following:
(i) the Optionee's theft, dishonesty, or falsification of
documents or records;
(ii) the Optionee's improper use or disclosure of the Company's
confidential or proprietary information;
(iii) any action by the Optionee which has a material detrimental
effect on the Company's reputation or business;
(iv) the Optionee's failure or inability to perform any
reasonable assigned duties after written notice from the Board of, and a
reasonable opportunity to cure, such failure or inability;
(v) any material breach by the Optionee of any service agreement
between the Optionee and the Company which breach is not cured pursuant to the
terms of such agreement; or
(vi) the Optionee's conviction (including any plea of guilty or
nolo contendere) of any criminal act which materially impairs the Optionee's
ability to perform his or her duties with the Company.
11. AMENDMENT OF THE PLAN AND OPTIONS.
(a) The Board at any time, and from time to time, may amend the Plan
and/or some or all outstanding Options granted under 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
to the extent stockholder approval is necessary for the Plan to satisfy the
requirements of Rule 16b-3, any requirements of Section 144 of the Delaware
General Corporation Law, or any Nasdaq National Market or securities exchange
listing requirements.
(b) An Optionee's rights and obligations under any Option granted before
any amendment of the Plan shall not be impaired by 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.
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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 February 9, 2013, which is
fifteen (15) years from the date the Plan was approved by the stockholders of
the Company. No Options may be granted under the Plan while the Plan is
suspended or after it is terminated.
(b) An Optionee's rights and obligations under any Option granted while
the Plan is in effect shall not be impaired by suspension or termination of the
Plan, except with the consent of the person to whom the Option was granted.
13. EFFECTIVE DATE OF PLAN.
The Plan shall become effective on the Effective Date, which is the date
of the Plan's approval by the stockholders of the Company. In the event the Plan
is not approved by the stockholders, then the Prior Plan shall continue in full
force and effect without regard to the adoption of this Plan.
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