<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 19, 1999
REGISTRATION NO. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
------------
CADENCE DESIGN SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 77-0148231
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
2655 SEELY AVENUE, BUILDING 5
SAN JOSE, CALIFORNIA 95134
(Address of Principal Executive Offices) (Zip Code)
----------------------
OPTIONS ASSUMED BY CADENCE DESIGN SYSTEMS, INC.
ORIGINALLY GRANTED UNDER
THE OrCAD, INC. 1991 NON-QUALIFIED STOCK OPTION PLAN,
THE OrCAD, INC. 1995 STOCK OPTION PLAN AND
THE OrCAD, INC. AMENDED 1995 STOCK INCENTIVE PLAN
(Full titles of the Plans)
----------------------
R.L. SMITH MCKEITHEN
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
CADENCE DESIGN SYSTEMS, INC.
2655 SEELY AVENUE, BUILDING 5, SAN JOSE, CALIFORNIA 95134
(Name and Address of Agent for Service)
(408) 943-1234
(Telephone number, including area code, of agent for service)
----------------------
COPIES TO:
ANDREW E. BOGEN, ESQ.
GIBSON, DUNN & CRUTCHER LLP
333 SOUTH GRAND AVENUE
LOS ANGELES, CALIFORNIA 90071
(213) 229-7000
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==================================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities to Amount to be Offering Price Aggregate Amount of
be Registered Registered (1) per Share (2) Offering Price (3) Registration Fee
==================================================================================================================
<S> <C> <C> <C> <C>
Common Stock, par value 279,123 shares $2.36 $658,730 $183.13
$.01 per share
(including the 1,208 shares $0.29 $350 $0.10
Preferred Share
Purchase Rights 1,738,522 shares $6.88 $11,961,031 $3,325.17
---------------- ----------- ---------
attached thereto)(4)
2,018,853 shares $12,620,111 $3,508.40
==================================================================================================================
</TABLE>
(1) 2,018,853 shares of Common Stock issuable pursuant to various stock
option plans of OrCAD, Inc., which plans have been assumed by the
Registrant in connection with the merger (the "Merger") of OrCAD, Inc.
with and into a wholly-owned subsidiary of the Registrant, are being
newly registered hereunder. The number of shares issuable pursuant to
such plans has been calculated in accordance with the terms of the
Merger, and is comprised of the following: (a) 279,123 shares of Common
Stock issuable pursuant to outstanding options granted under the OrCAD,
Inc. 1991 Non-Qualified Stock Option Plan (the "1991 Plan"), (b) 1,208
shares of Common Stock issuable pursuant to outstanding options granted
under the OrCAD, Inc. 1995 Stock Option Plan (the "1995 Plan"), and (c)
1,738,522 shares of Common Stock issuable pursuant to outstanding
options granted under the OrCAD, Inc. Amended 1995 Stock Incentive Plan
(the "Amended 1995 Plan," and together with the 1991 Plan and the 1995
Plan, the "Assumed Option Plans"). Pursuant to Rule 416(a), this
Registration Statement shall also cover any additional shares of Common
Stock which become issuable under the Assumed Option Plans by reason of
any stock dividend, stock split, recapitalization or other similar
transaction effected without the receipt of consideration which results
in an increase in the number of the outstanding shares of the
Registrant's Common Stock.
(2) Pursuant to Rule 457(h) of the Securities Act of 1933, as amended, the
Proposed Maximum Offering Price Per Share is based upon: (a) the
weighted average exercise price per share ($2.36) of outstanding
options to acquire 279,123 shares under the 1991 Plan, (b) the weighted
average exercise price per share ($.29) of outstanding options to
acquire 1,208 shares under the 1995 Plan and (c) the weighted average
exercise price per share ($6.88) of outstanding options to acquire
1,738,522 shares under the Amended 1995 Plan.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 of the Securities Act.
(4) Shares of the Common Stock being registered hereby are accompanied by
Preferred Share Purchase Rights. Until the occurrence of specific
prescribed events, such rights are not exercisable, are evidenced by
the certificates for the Common Stock and will be transferred with and
only with the Common Stock. Upon the occurrence of such prescribed
events, separate rights certificates will be issued representing one
right for each share of Common Stock held, subject to adjustment
pursuant to anti-dilution provisions.
================================================================================
================================================================================
<PAGE>
INTRODUCTION
The shares of common stock subject to options registered hereunder have been
assumed by Cadence Design Systems, Inc. ("Cadence" or the "Registrant") pursuant
to an Agreement and Plan of Merger, dated as of June 14, 1999, as amended, among
Cadence, CDSI Acquisition Corporation, a Delaware corporation and wholly-owned
subsidiary of Cadence, and OrCAD, Inc., a Delaware corporation ("OrCAD"). These
options were originally granted to directors, employees and consultants of OrCAD
and/or OrCAD's subsidiaries under the Assumed Option Plans.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The Registrant hereby incorporates by reference into this Registration
Statement the following documents previously filed with the Securities and
Exchange Commission (the "Commission"):
(a) The Registrant's Annual Report on Form 10-K for the
fiscal year ended January 2, 1999, including all
material incorporated by reference therein;
(b) The Registrant's Quarterly Reports on Form 10-Q for
the fiscal quarters ended April 3 and July 3, 1999,
including all material incorporated by reference
therein;
(c) The Registrant's Current Reports on Form 8-K filed
with the Commission on May 6 and May 26, 1999;
(d) The Registrant's Current Reports on Form 8-K/A filed
with the Commission on January 6, May 20 and June 15,
1999;
(e) The description of the Registrant's Common Stock to
be offered hereby contained in the Registrant's
Registration Statement on Form 8-A filed with the
Commission on August 29, 1990;
(f) The description of the Registrant's Preferred Share
Purchase Rights set forth in Exhibit 1A, 1B and 1C to
the Registrant's Current Report on Form 8-A filed
with the Commission on February 16, 1996.
All documents filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "1934 Act") after the date
of this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents.
Any document, and any statement contained in a document, incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Registration Statement to the extent that a
statement contained herein, or in any other subsequently filed document that
also is incorporated or deemed to be incorporated by reference herein, modifies
or supersedes such document or statement. Any such document or statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement. Subject to the foregoing,
all information appearing in this Registration Statement is qualified in its
entirety by the information appearing in the documents incorporated by
reference.
Item 4. DESCRIPTION OF SECURITIES
Not Applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
II-1
<PAGE>
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law permits a
corporation to indemnify any of its directors or officers who was or is a party
or is threatened to be made a party to any third party proceeding by reason of
the fact that such person is or was a director or officer of the corporation
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding, if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that such person's conduct was
unlawful. In a derivative action, i.e., one by or in the right of a corporation,
the corporation is permitted to indemnify any of its directors or officers
against expenses (including attorneys' fees) actually and reasonably incurred by
such person in connection with the defense or settlement of such action or suit
if such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the corporation,
except that no indemnification shall be made if such person shall have been
adjudged liable to the corporation, unless and only to the extent that the court
in which such action or suit was brought shall determine upon application that
such person is fairly and reasonably entitled to indemnity for such expenses
despite such adjudication of liability.
Article VII of the Registrant's currently effective Certificate of
Incorporation eliminates the personal liability of its directors for monetary
damages for breach of fiduciary duty as a director, except for liability (i) for
any breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the Delaware General Corporation Law or (iv) for any transaction from which the
director derived an improper personal benefit. In addition, as permitted by
Section 145 of the Delaware General Corporation Law, the Bylaws of the
Registrant provide that: (a) the Registrant is required to indemnify its
directors and officers and persons serving in such capacities in other business
entities (including, for example, subsidiaries of the Registrant) at the
Registrant's request (such directors, officers and other persons are
collectively, "Covered Persons"), to the fullest extent permitted by Delaware
law, including those circumstances in which indemnification would otherwise be
discretionary; (b) the Registrant is required to advance expenses, as incurred
to such Covered Persons in connection with defending a proceeding; (c) the
indemnitee(s) of the Registrant have the right to bring suit, and to be paid the
expenses of prosecuting such suit if successful, to enforce the rights to
indemnification under the Bylaws or to advancement of expenses under the Bylaws;
(d) the rights conferred in the Bylaws are not exclusive and the Registrant is
authorized to enter into indemnification agreements with such directors,
officers and employees; (e) the Registrant is required to maintain director and
officer liability insurance to the extent reasonably available; and (f) the
Registrant may not retroactively amend the Bylaws indemnification provision in a
way that is adverse to such Covered Persons.
The Registrant has entered into indemnity agreements with each of its
executive officers and directors that provide the maximum indemnity allowed to
officers and directors by Section 145 of the Delaware General Corporation Law
and the Bylaws, as well as certain additional procedural protections. The
Registrant also maintains a limited amount of director and officer insurance.
The indemnification provision in the Bylaws, and the indemnity agreements
entered into between the Registrant and its officers or directors, may be
sufficiently broad to permit indemnification of the Registrant's officers and
directors for liability arising under the Securities Act of 1933, as amended
(the "1933 Act").
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
II-2
<PAGE>
Item 8. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT
<S> <C>
4.1(a) The description of the Registrant's Common Stock.
Reference is made to the Registrant's Registration
Statement on Form 8-A filed with the Commission on
August 29, 1990 incorporated by reference pursuant
to Item 3(e).
(b) The description of the Registrant's Preferred
Share Purchase Rights. Reference is made to
Exhibit 1A, 1B and 1C to the Registrant's Current
Report on Form 8-A filed with the Commission on
February 16, 1996 incorporated by reference
pursuant to Item 3(f).
4.2 Specimen Certificate of the Registrant's Common
Stock (incorporated by reference to Exhibit 4.01
of the Registrant's Registration Statement on Form
S-4 (33-43400)).
4.3 Rights Agreement, dated as of February 9, 1996,
between the Registrant and Harris Trust and
Savings Bank which includes as exhibits thereto
the Certificate of Designation for the Series A
Junior Participating Preferred Stock, the form of
Rights Certificate, and the Summary of Rights to
Purchase Preferred Shares (incorporated by
reference to Exhibit 1A, 1B, and 1C to the
Registrant's Current Report on Form 8-K filed on
February 16, 1996).
5 Opinion and consent of Gibson, Dunn & Crutcher LLP.
23.1 Consent of Arthur Andersen LLP, Independent Public Accountants.
23.2 Consent of Gibson, Dunn & Crutcher LLP (contained in Exhibit 5).
99.1 OrCAD, Inc. 1991 Non-Qualified Stock Option Plan, as amended.
99.2 OrCAD, Inc. 1995 Stock Option Plan, as amended.
99.3 OrCAD, Inc. Amended 1995 Stock Incentive Plan, as amended.
</TABLE>
Item 9. UNDERTAKING
A. The undersigned Registrant hereby undertakes: (1) to file, during
any period in which offers or sales are being made, a post-effective amendment
to this Registration Statement (i) to include any prospectus required by Section
10(a)(3) of the 1933 Act; (ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement; and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
Registration Statement; PROVIDED, HOWEVER, that clauses (1)(i) and (1)(ii) shall
not apply if the information required to be included in a post-effective
amendment by those clauses is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the 1934 Act that are
incorporated by reference into this Registration Statement; (2) that for the
purpose of determining any liability under the 1933 Act, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof, and
(3) to remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold upon the termination of the
offering under the Assumed Option Plans.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is
incorporated by reference into this Registration Statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the 1933
Act may be permitted to directors, officers or controlling persons of the
Registrant pursuant to the indemnity provisions incorporated by reference in
Item 6, or otherwise, the Registrant has been advised that in the opinion of the
Commission such indemnification is
II-3
<PAGE>
against public policy as expressed in the 1933 Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be governed by
the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8, and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Jose, State of California, on this 19th day
of August, 1999.
CADENCE DESIGN SYSTEMS, INC.
By: /S/ H. RAYMOND BINGHAM
----------------------------------
H. Raymond Bingham
President, Chief Executive Officer
and Director
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below on this Registration Statement hereby constitutes and appoints H.
Raymond Bingham, William Porter and R.L. Smith McKeithen, their true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for them and in their name, place and stead, in any and all
capacities (unless revoked in writing) to sign any and all amendments to this
Registration Statement to which this power of attorney is attached, including
any post-effective amendments as well as any related registration statement (or
amendment thereto) filed in reliance upon Rule 462(b) under the Securities Act
of 1933, as amended, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting to such attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in connection therewith, as fully to all intents and purposes as they
might and could do in person hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their substitute or substitutes,
may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ H. RAYMOND BINGHAM President, Chief Executive August 19, 1999
- --------------------------------------- Officer and Director
H. Raymond Bingham (Principal Executive Officer)
/s/ WILLIAM PORTER Senior Vice President, Chief August 19, 1999
- --------------------------------------- Financial Officer (Principal
William Porter Financial Officer and Principal
Accounting Officer)
/s/ CAROL A. BARTZ Director August 19, 1999
- ---------------------------------------
Carol A. Bartz
/s/ DR. LEONARD Y.W. LIU Director August 19, 1999
- ---------------------------------------
Dr. Leonard Y.W. Liu
/s/ DONALD L. LUCAS Director August 19, 1999
- ---------------------------------------
Donald L. Lucas
/s/ DR. ALBERTO SANGIOVANNI-VINCENTELLI Director August 19, 1999
- ---------------------------------------
Dr. Alberto Sangiovanni-Vincentelli
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ GEORGE M. SCALISE Director August 19, 1999
- ---------------------------------------
George M. Scalise
/s/ DR. JOHN B. SHOVEN Director August 19, 1999
- ---------------------------------------
Dr. John B. Shoven
/s/ ROGER S. SIBONI Director August 19, 1999
- ---------------------------------------
Roger S. Siboni
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- ------- --------
<S> <C>
4.1(a) The description of the Registrant's Common Stock.
Reference is made to the Registrant's Registration
Statement on Form 8-A filed with the Commission on
August 29, 1990 incorporated by reference pursuant to
Item 3(e).
(b) The description of the Registrant's Preferred Share
Purchase Rights. Reference is made to Exhibit 1A, 1B
and 1C to the Registrant's Current Report on Form 8-A
filed with the Commission on February 16, 1996
incorporated by reference pursuant to Item 3(f).
4.2 Specimen Certificate of the Registrant's Common Stock
(incorporated by reference to Exhibit 4.01 of the
Registrant's Registration Statement on Form S-4
(33-43400)).
4.3 Rights Agreement, dated as of February 9, 1996,
between the Registrant and Harris Trust and Savings
Bank which includes as exhibits thereto the
Certificate of Designation for the Series A Junior
Participating Preferred Stock, the form of Rights
Certificate, and the Summary of Rights to Purchase
Preferred Shares (incorporated by reference to
Exhibit 1A, 1B, and 1C to the Registrant's Current
Report on Form 8-K filed on February 16, 1996).
5 Opinion and consent of Gibson, Dunn & Crutcher LLP.
23.1 Consent of Arthur Andersen LLP, Independent Public Accountants.
23.2 Consent of Gibson, Dunn & Crutcher LLP (contained in Exhibit 5).
99.1 OrCAD, Inc. 1991 Non-Qualified Stock Option Plan, as amended.
99.2 OrCAD, Inc. 1995 Stock Option Plan, as amended.
99.3 OrCAD, Inc. Amended 1995 Stock Incentive Plan, as amended.
</TABLE>
<PAGE>
EXHIBIT 5
[Letterhead of Gibson, Dunn & Crutcher LLP]
August 19, 1999
Cadence Design Systems, Inc.
2655 Seely Avenue, Building 5
San Jose, CA 95134
Re: REGISTRATION STATEMENT ON
FORM S-8 OF CADENCE DESIGN SYSTEMS, INC.
Ladies and Gentlemen:
We refer to the registration statement on Form S-8 ("Registration
Statement"), under the Securities Act of 1933, as amended (the "Securities
Act") filed by Cadence Design Systems, Inc., a Delaware corporation (the
"Company"), with respect to the proposed offering by the Company of up to
2,018,853 shares (the "Shares") of the common stock of the Company, $.01 par
value per share (the "Common Stock"), subject to issuance by the Company upon
exercise of options granted under the OrCAD, Inc. 1991 Non-Qualified Stock
Option Plan, the OrCAD, Inc. 1995 Stock Option Plan and the OrCAD, Inc.
Amended 1995 Stock Incentive Plan (collectively, the "Plans") assumed by the
Company pursuant to the terms of the Agreement and Plan of Merger, dated as
of June 14, 1999 among the Company, CDSI Acquisition Corporation, a Delaware
corporation and wholly-owned subsidiary of the Company, and OrCAD, Inc., a
Delaware corporation.
We have examined the originals or certified copies of such corporate records,
certificates of officers of the Company and/or public officials and such
other documents and have made such other factual and legal investigations as
we have deemed relevant and necessary as the basis for the opinions set forth
below. In such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents submitted to us as
conformed or photostatic copies and the authenticity of the originals of such
copies.
Based on our examination mentioned above, subject to the assumptions stated
above and relying on the statements of fact contained in the documents that
we have examined, we are of the opinion that (i) the issuance by the Company
of the Shares has been duly authorized and (ii) when issued in accordance
with the terms of the Plans, the Shares will be duly and validly issued,
fully paid and non-assessable shares of Common Stock.
We are admitted to practice in the State of California, and are not admitted
to practice in the State of Delaware. However, for the limited purposes of
our opinion set forth above, we are generally familiar with the General
Corporation Law of the State of Delaware (the "DGCL") as presently in effect
and have made such inquiries as we consider necessary to render this opinion
with respect to a Delaware corporation. This opinion letter is limited to
the laws of the State of California and, to the limited extent set forth
above, the DGCL, as such laws presently exist and to the facts as they
presently exist. We express no opinion with respect to the effect or
applicability of the laws of any other jurisdiction. We assume no obligation
to revise or supplement this opinion letter should the laws of such
jurisdictions be changed after the date hereof by legislative action,
judicial decision or otherwise.
<PAGE>
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not admit that we are
within the category of persons whose consent is required under Section 7 of
the Securities Act or the General Rules and Regulations of the Securities and
Exchange Commission.
Very truly yours,
/s/ GIBSON, DUNN & CRUTCHER LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF ARTHUR ANDERSEN LLP, INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our report dated March 26, 1999
included in Cadence Design Systems, Inc.'s Form 10-K for the year ended
January 2, 1999 (as amended by Form 10-K/A).
/s/ Arthur Andersen LLP
-------------------
Arthur Andersen LLP
San Jose, California
August 16, 1999
<PAGE>
EXHIBIT 99.1
OrCAD, INC.
1991 NON-QUALIFIED STOCK OPTION PLAN
1. PURPOSE. This 1991 Non-Qualified Stock Option Plan (the "Plan")
is intended to provide incentives to directors, officers, employees and
consultants of OrCAD, Inc. (the "Company"), its parent (if any) and any
present or future subsidiaries of the Company (collectively, "Related
Corporations") by providing them with opportunities to purchase stock in the
Company pursuant to non-qualified stock options granted hereunder. These
stock options are referred to hereafter individually as an "Option" and
collectively as "Options." As used herein, the terms "parent" and
"subsidiary" mean "parent corporation" and "subsidiary corporation" as those
terms are defined in Section 425 of the Internal Revenue Code of 1986, as
amended (the "Code").
2. ADMINISTRATION OF THE PLAN.
(a) BOARD OR COMMITTEE ADMINISTRATION. The Plan shall be
administered by the Board of Directors of the Company (the "Board"). The
Board may appoint a Stock Plan or Compensation Committee (the "Committee") of
three or more of its members to administer this Plan. Subject to subparagraph
2(c), no member of the Committee, while a member, shall be eligible to
participate in this Plan. All references in this Plan to the "Committee"
shall mean the Board if no Committee has been appointed. Subject to
ratification of the grant of each Option by the Board (if so required by
applicable state law), and subject to the terms of the Plan, the Committee
shall have the authority to (i) determine (from among the class of
individuals and entities eligible under paragraph 3 to receive Options) to
whom Options may be granted; (ii) determine the time or times at which
Options may be granted; (iii) determine the option price of shares subject to
each Option, which price shall not be less than the minimum price specified
in paragraph 6; (iv) determine (subject to paragraph 7) the time or times
when each Option shall become exercisable and the duration of the exercise
period; (v) determine whether restrictions such as repurchase options are to
be imposed on shares subject to Options, and the nature of such restrictions,
if any, and (vi) interpret the Plan and prescribe and rescind rules and
regulations relating to it. The Committee shall take whatever actions it
deems necessary, under Section 422A of the Code and the regulations
promulgated thereunder, to ensure that each Option is not treated as an
"incentive stock option" under Section 422A(b) of the Code. The
interpretation and construction by the Committee of any provisions of the
Plan or of any Option grunted under it shall be final unless otherwise
determined by the Board. The Committee may from time to time adopt such rules
and regulations for carrying out the Plan as it may deem best. No member of
the Board or the Committee shall be liable for any action or determination
made in good faith with respect to the Plan or any Option granted under it.
(b) COMMITTEE ACTIONS. The Committee may select one of its
members as its chairman, and shall hold meetings at such time and places as
it may determine. Acts by a majority of the Committee, or acts reduced to or
approved in writing by a majority of the members of the Committee, shall be
the valid acts of the Committee. From time to time the
<PAGE>
Board may increase the size of the Committee and appoint additional members
thereof, remove members (with or without cause) and appoint new members in
substitution therefor, fill vacancies however caused, or remove all members
of the Committee and thereafter directly administer the Plan.
(c) GRANT OF OPTIONS TO BOARD MEMBERS. Notwithstanding the
provisions of subparagraph 2(a), Options may be granted to members of the
Board, but any such grant shall be made and approved in accordance with
subparagraph 2(d), if applicable. All grants of Options to members of the
Board shall in all other respects be made in accordance with the provisions
of this Plan applicable to other eligible persons. Members of the Board who
are either (i) eligible for Options pursuant to the Plan or (ii) have been
granted Options may vote on any matters affecting the administration of the
Plan or the grant of any Options pursuant to the Plan, except that no such
member shall act upon the granting to himself of Options but any such member
may be counted in determining the existence of a quorum at any meeting of the
Board during which action is taken with respect to the granting to him of
Options.
(d) COMPLIANCE WITH FEDERAL SECURITIES LAWS. Notwithstanding
any other provision of this paragraph 2, in the event the Company registers
any class of any equity security pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), any grants to a member
of the Board of Options (made at any time from the effective date of such
registration until six months after the termination of such registration)
shall be made only with the approval of a majority of the other members of
the Board; provided, however, that if a majority of the Board is eligible to
participate in the Plan or in any other stock option or other stock plan of
the Company or any of its affiliates, or has been so eligible at any time
within the preceding year, any grant to a member of the Board of Options must
be made by, or only in accordance with the recommendation of, a Committee
consisting of three or more persons, who may but need not be directors or
employees of the Company, appointed by the Board but having full authority to
act in the matter, none of whom is eligible to participate in this Plan or
any other stock option or other stock plan of the Company or any of its
affiliates, or has been eligible at any time within the preceding year. The
requirements imposed by the preceding sentence shall also apply with respect
to grants to officers who are not also directors. Once appointed, the
Committee shall continue to serve until otherwise directed by the Board.
3. ELIGIBLE PERSONS. Options may be granted to any director
(whether or not an employee), officer, employee or consultant of the Company
or any Related Corporation. Granting of any Option to any individual or
entity shall neither entitle that individual or entity to, nor disqualify him
from, participation in any other grant of Options.
4. STOCK. The stock subject to Options shall be authorized but
unissued shares of Common Stock of the Company, par value $0.01 per share
(the "Common Stock"), or shares of Common Stock reacquired by the Company in
any manner. The aggregate number of
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shares which may be issued pursuant to the Plan is 3,000,0001, subject to
adjustment as provided in paragraph 13. If any Option granted under the Plan
shall expire or terminate for any reason without having been exercised in
full or shall cease for any reason to be exercisable in whole or in part, the
unpurchased shares subject to such Options shall again be available for
grants of Options under the Plan.
5. GRANTING OF OPTIONS. Options may be granted under the Plan at
any time after October 18, 1991 and prior to October 18, 2001. The date of
grant of an Option under the Plan will be the date specified by the Committee
at the time it grants the Option; provided, however, that such date shall not
be prior to the date on which the Committee acts to approve the grant.
6. MINIMUM OPTION PRICE. The exercise price per share specified in
the agreement relating to each Option granted under the Plan shall in no
event be less than eighty-five percent (85%) of the fair market value (as
determined under paragraph 16) per share of Common Stock on the date of such
grant; provided, however, if the individual or entity to whom the Option is
granted owns stock (as determined under Section 424(d) of the Code)
representing ten percent (10%) or more of the total combined voting power of
all classes of stock of the Company or any Related Corporation (a "10%
Shareholder"), then the exercise price shall not be less than one hundred ten
percent (110%) of the fair market value of the Common Stock on the grant date.
7. OPTION DURATION. Subject to earlier termination as provided in
paragraphs 9 and 10, each Option shall expire on the date specified by the
Committee. However, no Option granted under the Plan to an optionee other
than a 10% Shareholder shall have a term in excess of ten (10) years from the
date of grant, and no Option granted under the Plan to a 10% Shareholder
shall have a term in excess of five (5) years from the grant date.
8. EXERCISE OF OPTION. Subject to the provisions of paragraphs 9
through 12, each Option granted under the Plan shall be exercisable as
follows:
(a) VESTING. The Option shall either be fully exercisable on
the date of grant or shall become exercisable thereafter in such installments
as the Committee may specify.
(b) FULL VESTING OF INSTALLMENTS. Once an installment
becomes exercisable it shall remain exercisable until expiration or
termination of the Option, unless otherwise specified by the Committee.
- ------------------------------------
1 On December 18, 1992, the Board amended the Plan to increase the number of
shares which may be issued pursuant to the Plan from 2,400,000 to 3,000,000
shares.
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(c) PARTIAL EXERCISE. Each Option or installment may be
exercised at any time or from time to time, in whole or in part, for up to
the total number of shares with respect to which it is then exercisable.
9. TERMINATION OF BUSINESS RELATIONSHIP. If an optionee ceases to
serve the Company and all Related Corporations in the capacity of a director,
officer, employee or consultant (such service is referred to herein as
maintaining or being involved in a "Business Relationship") other than by
reason of death or disability as defined in paragraph 10, no further
installments of his Options shall become exercisable, and his Options shall
terminate after the passage of sixty (60) days from the date the Business
Relationship ceases, but in no event later than on their specified expiration
dates. Nothing in the Plan shall be deemed to give any optionee the right to
be retained in a Business Relationship by the Company or any Related
Corporation for any period of time.
10. DEATH; DISABILITY; DISSOLUTION.
(a) DEATH. If an optionee ceases to maintain a Business
Relationship with the Company and all Related Corporations by reason of his
death, any Option of his may be exercised, to the extent of the number of
shares with respect to which he could have exercised it on the date of his
death, by his estate, personal representative or beneficiary who has acquired
the Option by will or by the laws of descent and distribution, at any time
prior to the earlier of the Option's specified expiration date or 180 days
from the date of the optionee's death.
(b) DISABILITY. If an optionee ceases to maintain a Business
Relationship with the Company and all Related Corporations by reason of his
disability, he shall have the right to exercise any Option held by him on the
date the Business Relationship terminated, to the extent of the number of
shares with respect to which he could have exercised it on that date, at any
time prior to the earlier of the Option's specified expiration date or 180
days from the date the Business Relationship terminated. For the purposes of
the Plan, the term "disability" shall mean "permanent and total disability"
as defined in Section 22(e)(3) of the Code or successor statute.
(c) DISSOLUTION. If an optionee is a corporation,
partnership, trust or other entity that is dissolved, liquidated, becomes
insolvent or enters into a merger or acquisition with respect to which such
optionee is not the surviving entity at the time when such entity is involved
in a Business Relationship with the Company, the Options held by the optionee
shall immediately terminate as of the date of such event, and the only rights
of the optionee under this Plan shall be those as to which the optionee's
Options were properly exercised before such dissolution or other event.
11. ASSIGNABILITY. No Option shall be assignable or transferable
by the optionee except by will or by the laws of descent and distribution,
and during the lifetime of the optionee each Option shall be exercisable only
by him.
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12. TERMS AND CONDITIONS OF OPTIONS. Options shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including restrictions applicable to shares of Common Stock
issuable upon exercise of Options. The Committee may from time to time confer
authority and responsibility on one or more of its own members and/or one or
more officers of the Company to execute and deliver such instruments. The
proper officers of the Company are authorized and directed to take any and
all action necessary or advisable from time to time to carry out the terms of
such instruments.
13. ADJUSTMENTS. Upon the happening of any of the following
described events, an optionee's rights with respect to Options granted to him
hereunder shall be adjusted as hereinafter provided, unless otherwise
specifically provided in the written agreement between the optionee and the
Company relating to such Option:
(a) STOCK DIVIDENDS AND STOCK SPLITS. If the shares of
Common Stock shall be subdivided or combined into a greater or smaller number
of shares or if the Company shall issue any shares of Common Stock as a stock
dividend on its outstanding Common Stock, the number of shares of Common
Stock deliverable upon the exercise of Options shall be appropriately
increased or decreased proportionately, and appropriate adjustments shall be
made in the purchase price per share to reflect such subdivision, combination
or stock dividend.
(b) CONSOLIDATIONS OR MERGERS. If the Company is to be
consolidated with or acquired by another entity in a merger, sale of all or
substantially all of the Company's assets or otherwise (an "Acquisition"),
the Committee or the board of directors of any entity assuming the
obligations of the Company hereunder (the "Successor Board") shall, with
respect to outstanding Options, take one or more of the following actions:
(i) make appropriate provision for the continuation of such Options by
substituting on an equitable basis for the shares then subject to such
Options the consideration payable with respect to the outstanding shares of
Common Stock in connection with the Acquisition; (ii) accelerate the date of
exercise of such Options or of any installment of any such Options; (iii)
upon written notice to the optionees, provide that all Options must be
exercised, to the extent then exercisable, within a specified number of days
of the date of such notice, at the end of which period the Options shall
terminate; or (iv) terminate all Options in exchange for a cash payment equal
to the excess of the fair market value (as determined under paragraph 16) of
the shares subject to such Options (to the extent then exercisable) over the
exercise price thereof.
(c) RECAPITALIZATION OR REORGANIZATION. In the event of a
recapitalization or reorganization of the Company (other than a transaction
described in subparagraph (b) above) pursuant to which securities of the
Company or of another corporation are issued with respect to the outstanding
shares of Common Stock, an optionee upon exercising an Option shall be
entitled to receive for the purchase price paid upon such exercise the
securities
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he would have received if he had exercised his Option prior to such
recapitalization or reorganization.
(d) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, each Option will terminate
immediately prior to the consummation of such proposed action or at such
other time and subject to such other conditions as shall be determined by the
Committee.
(e) ISSUANCES OF SECURITIES. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and
no adjustment by reason thereof shall be made with respect to, the number or
price of shares subject to Options. No adjustments shall be made for
dividends paid in cash or in property other than securities of the Company.
(f) FRACTIONAL SHARES. No fractional shares shall actually
be issued under the Plan, and the optionee shall receive from the Company
cash in lieu of such fractional shares.
(g) ADJUSTMENTS. Upon the happening of any of the foregoing
events described in subparagraphs (a), (b) or (c) above, the class and
aggregate number of shares set forth in paragraph 4 hereof that are subject
to Options which previously have been or subsequently may be granted under
the Plan shall also be appropriately adjusted to reflect the events described
in such subparagraphs. The Committee shall determine the specific adjustments
to be made under this paragraph 13 and, subject to paragraph 2, its
determination shall be conclusive.
(h) RESTRICTED COMMON STOCK. If any person or entity owning
restricted Common Stock obtained by exercise of an Option made hereunder
receives new or additional or different shares or securities ("New
Securities") in connection with a corporate transaction described in
subparagraph (a), (b) or (c) above as a result of owning such restricted
Common Stock, such New Securities shall be subject to all of the conditions
and restrictions applicable to the restricted Common Stock with respect to
which such New Securities were issued, unless otherwise determined by the
Committee or the Successor Board.
14. MEANS OF EXERCISING OPTIONS. An Option (or any part or
installment thereof) shall be exercised by giving written notice to the
Company at its principal office address. Such notice shall identify the
Option being exercised and specify the number of shares as to which such
Option is being exercised, accompanied by full payment of the purchase price
therefor either (i) in United States dollars in cash or by check, or (b) at
the discretion of the Committee, through delivery of shares of Common Stock
having a fair market value (as determined under paragraph 16) equal as of the
date of the exercise to the cash exercise price of the Option, or (c) at the
discretion of the Committee, by delivery of the optionee's personal recourse
note bearing interest payable not less than annually at no less than 100% of
the lowest applicable Federal rate, as defined in Section 1274(d) of the
Code, or (d) at the discretion of the Committee, by any combination of (a),
(b) or (c) above. The holder of an Option shall not have the rights of a
shareholder with respect to the shares covered by his Option until the date
of
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<PAGE>
issuance of a stock certificate to him for such shares. Except as expressly
provided above in paragraph 13 with respect to changes in capitalization and
stock dividends, no adjustment shall be made for dividends or similar rights
for which the record date is before the date such stock certificate is issued.
15. TERM AND AMENDMENT OF PLAN. This Plan was adopted by the Board
on October 18, 1991 and was approved by the holders of a majority of the
outstanding shares of voting capital stock of the Company on October 18,
1991. The Plan shall expire on October 18, 2001 (except as to Options
outstanding on that date). The Board may terminate or amend the Plan in any
respect at any time, except that, in no event may action of the Board alter
or impair the rights of an optionee without his consent, under any Option
previously granted to him.
16. DETERMINATION OF FAIR MARKET VALUE. If, at the time "fair
market value" is determined under paragraph 6, subparagraph 13(b) or
paragraph 14, the Company's Common Stock is publicly traded, "fair market
value" shall be determined as of the last business day for which the prices
or quotes discussed in this sentence are available prior to the date such
determination is made and shall mean (i) the average (on that date) of the
high and low prices of the Common Stock on the principal national securities
exchange on which the Common Stock is traded, if such Stock is then traded on
a national securities exchange; or (ii) the last reported sale price (on that
date) of the Common Stock on the NASDAQ National Market List, if the Common
Stock is not then traded on a national securities exchange and is then
reported on such list; or (iii) the closing bid price (or average of bid
prices) last quoted (on that date) by an established quotation service for
over-the-counter securities, if the Common Stock is not then traded on a
national securities exchange and is not reported on the NASDAQ National
Market List. However, if the Common Stock is not publicly traded at the time
such determination is made, "fair market value" shall be deemed to be the
fair value of the Common Stock as determined by the Committee after taking
into consideration all factors which it deems appropriate, including, without
limitation, recent sale and offer prices of the Common Stock in private
transactions negotiated at arm's length.
17. APPLICATION OF FUNDS. The proceeds received by the Company
from the sale of shares pursuant to Options granted under the Plan shall be
used for general corporate purposes.
18. GOVERNMENTAL REGULATION. The Company's obligation to sell and
deliver shares of the Common Stock under this Plan is subject to the approval
of any governmental authority required in connection with the authorization,
issuance or sale of such shares.
19. WITHHOLDING OF ADDITIONAL INCOME TAXES. Upon the exercise of
an Option, the Company, in accordance with Section 3402(a) of the Code, may
require the optionee, to pay additional withholding taxes in respect of the
amount that is considered compensation includible in such person's gross
income. The Committee in its discretion may condition the exercise of an
Option on the purchaser's or optionee's payment of such additional
withholding taxes.
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20. GOVERNING LAW; CONSTRUCTION. The validity and construction of
the Plan and the instruments evidencing Options shall be governed by the laws
of the State of Delaware. In construing this Plan, the singular shall include
the plural and the masculine gender shall include the feminine and neuter,
unless the context otherwise requires.
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EXHIBIT 99.2
OrCAD, INC.
1995 STOCK OPTION PLAN
1. PURPOSE. This 1995 Stock Option Plan (the "Plan") is intended
to provide incentives (a) to the officers and other employees of OrCAD, Inc.
(the "Company"), its parent (if any) and any present or future subsidiaries
of the Company (collectively, "Related Corporations") by providing them with
opportunities to purchase stock in the Company pursuant to options granted
hereunder which qualify as "incentive stock options" under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), ("ISO" or "ISOs"),
and (b) to directors, officers, employees and consultants of the Company and
Related Corporations by providing them with opportunities to purchase stock
in the Company pursuant to options granted hereunder which do not qualify as
ISOs ("Non-Qualified Option" or "Non-Qualified Options"). Both ISOs and
Non-Qualified Options are referred to hereafter individually as an "Option"
and collectively as "Options." As used herein, the terms "parent" and
"subsidiary" mean "parent corporation" and "subsidiary corporation" as those
terms are defined in Section 424 of the Code.
2. ADMINISTRATION OF THE PLAN.
(a) BOARD OR COMMITTEE ADMINISTRATION. The Plan shall be
administered by the Board of Directors of the Company (the "Board"). The
Board may appoint a Stock Option Plan or Compensation Committee (the
"Committee") of three or more of its members to administer this Plan. All
references in this Plan to the "Committee" shall mean the Board if no
Committee has been appointed. Subject to ratification of the grant of each
Option by the Board (if so required by applicable state law), and subject to
the terms of the Plan, the Committee shall have the authority to (i)
determine the employees of the Company and Related Corporations (from among
the class of employees eligible under paragraph 3 to receive ISOs) to whom
ISOs may be granted, and to determine (from among the class of individuals
and entities eligible under paragraph 3 to receive Non-Qualified Options) to
whom Non-Qualified Options may be granted; (ii) determine the time or times
at which Options may be granted; (iii) determine the option price of shares
subject to each Option, which price (with respect to ISOs) shall not be less
than the minimum price specified in paragraph 6; (iv) determine whether each
Option granted shall be an ISO or a Non-Qualified Option; (v) determine
(subject to paragraph 7) the time or times when each Option shall become
exercisable and the duration of the exercise period; (vi) determine whether
restrictions such as repurchase options are to be imposed on shares subject
to Options, and the nature of such restrictions, if any, and (vii) interpret
the Plan and prescribe and rescind rules and regulations relating to it. If
the Committee determines to issue a Non-Qualified Option, it shall take
whatever actions it deems necessary, under Section 422 of the Code and the
regulations promulgated thereunder, to ensure that such Option is not treated
as an ISO. The interpretation and construction by the Committee of any
provisions of the Plan or of any Option granted under it shall be final
unless otherwise determined by the Board. The Committee may from time to time
adopt such rules and regulations for carrying out the Plan as it may deem
best. No member of the Board or the Committee shall be liable for any action
or determination made in good faith withrespect to the Plan or any Option
granted under it.
<PAGE>
(b) COMMITTEE ACTIONS. The Committee may select one of its
members as its chairman, and shall hold meetings at such time and places as
it may determine. Acts by a majority of the Committee, or acts reduced to or
approved in writing by a majority of the members of the Committee, shall be
the valid acts of the Committee. From time to time the Board may increase the
size of the Committee and appoint additional members thereof, remove members
(with or without cause) and appoint new members in substitution therefor,
fill vacancies however caused, or remove all members of the Committee and
thereafter directly administer the Plan.
(c) GRANT OF OPTIONS TO BOARD MEMBERS. Options may be
granted to members of the Board, but any such grant shall be made and
approved in accordance with subparagraph 2(d), if applicable. All grants of
Options to members of the Board shall in all other respects be made in
accordance with the provisions of this Plan applicable to other eligible
persons. Members of the Board who are either (i) eligible for Options
pursuant to the Plan or (ii) have been granted Options may vote on any
matters affecting the administration of the Plan or the grant of any Options
pursuant to the Plan, except that no such member shall act upon the granting
to himself of Options but any such member may be counted in determining the
existence of a quorum at any meeting of the Board during which action is
taken with respect to the granting to him of Options.
(d) COMPLIANCE WITH FEDERAL SECURITIES LAWS. In the event
the Company registers any class of any equity security pursuant to Section 12
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), any
grants to a member of the Board of Options (made at any time from the
effective date of such registration until six months after the termination of
such registration) shall be made only with the approval of a majority of the
other members of the Board; provided, however,that if a majority of the Board
is eligible to participate in the Plan or in any other stock option or other
stock plan of the Company or any of its affiliates, or has been so eligible
at any time within the preceding year, any grant to a member of the Board of
Options must be made by, or only in accordance with the recommendation of, a
committee consisting of three or more persons, who may but need not be
directors or employees of the Company, appointed by the Board but having full
authority to act in the matter, none of whom is eligible to participate in
this Plan or any other stock option or other stock plan of the Company or any
of its affiliates, or has been eligible at any time within the preceding
year. The requirements imposed by the preceding sentence shall also apply
with respect to grants to officers who are not also directors. Once
appointed, the committee shall continue to serve until otherwise directed by
the Board.
3. ELIGIBLE EMPLOYEES AND OTHERS. ISOs may be granted to any
officer or other employee of the Company or any Related Corporation. Those
officers and directors of the Company who are not employees may not be
granted ISOs under the Plan. Non-Qualified Options may be granted to any
director (whether or not an employee), officer, employee or consultant of the
Company or any Related Corporation. The Committee may take into consideration
a recipient's individual circumstances in determining whether to grant an ISO
or a Non-Qualified Option. Granting of any Option to any individual or entity
shall neither entitle that individual or entity to, nor disqualify him from,
participation in any other grant of Options.
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4. STOCK. The stock subject to Options shall be authorized but
unissued shares of Common Stock of the Company (the "Common Stock"), or
shares of Common Stock reacquired by the Company in any manner. The aggregate
number of shares which may be issued pursuant to the Plan is One Hundred
Eighty Thousand Nine Hundred Fifty-Four (180,954) shares, subject to
adjustment as provided in paragraph 13. Any such shares may be issued as ISOs
or Non-Qualified Options, so long as the number of shares so issued does not
exceed such number, as adjusted. If any Option granted under the Plan shall
expire or terminate for any reason without having been exercised in full or
shall cease for any reason to be exercisable in whole or in part, the
unpurchased shares subject to such Options shall again be available for
grants of Options under the Plan.
5. GRANTING OF OPTIONS. Options may be granted under the Plan at
any time after May 19, 1995, and prior to May 19, 2005. The date of grant of
an Option under the Plan will be the date specified by the Committee at the
time it grants the Option; provided, however, that such date shall not be
prior to the date on which the Committee acts to approve the grant. The
Committee shall have the right, with the consent of the optionee, to convert
an ISO granted under the Plan to a Non-Qualified Option pursuant to paragraph
17.
6. MINIMUM OPTION PRICE; ISO LIMITATIONS.
(a) PRICE OF NON-QUALIFIED OPTIONS. The exercise price per
share specified in the agreement relating to each Non-Qualified Option
granted under the Plan shall in no event be less than eighty-five percent
(85%) of the fair market value (as determined under paragraph 16) per share
of Common Stock on the date of such grant.
(b) PRICE OF ISOS. The exercise price per share specified in
the agreement relating to each ISO granted under the Plan shall not be less
than the fair market value per share of Common Stock on the date of such
grant. In the case of an ISO to be granted to an employee owning stock (as
determined under Section 424(d) of the Code) representing more than ten
percent (10%) of the total combined voting power of all classes of stock of
the Company or any Related Corporation (a "10% Shareholder"), then the price
per share specified in the agreement relating to such ISO shall not be less
than one hundred ten percent (110%) of the fair market value of Common Stock
on the date of grant.
(c) $100,000 ANNUAL LIMITATION ON ISOS. Each eligible
employee may be granted ISOs only to the extent that, in the aggregate under
this Plan and all incentive stock option plans of the Company and any Related
Corporation, such ISOs do not become exercisable for the first time by such
employee during any calendar year in a manner that would entitle the employee
to purchase more than $100,000 in fair market value (determined at the time
the ISOs were granted) of Common Stock in that year. Any Options granted to
an employee in excess of such amount will be granted as Non-Qualified Options.
7. OPTION DURATION. Subject to earlier termination as provided in
paragraphs 9 and 10, each Option shall expire on the date specified by the
Committee, but not more than (i) ten years from the date of grant in the case
of Non-Qualified Options, (ii) ten years from the date of grant in the case
of ISOs generally, and (iii) five years from the date of grant in
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the case of ISOs granted to a 10% Shareholder. Subject to earlier termination
as provided in paragraphs 9 and 10, the term of each ISO shall be the term
set forth in the original instrument granting such ISO, except with respect
to any part of such ISO that is converted into a Non-Qualified Option
pursuant to paragraph 17.
8. EXERCISE OF OPTION. Subject to the provisions of paragraphs 9
through 12, each Option granted under the Plan shall be exercisable as
follows:
(a) VESTING. The Option shall either be fully exercisable on
the date of grant or shall become exercisable thereafter in such installments
as the Committee may specify.
(b) FULL VESTING OF INSTALLMENTS. Once an installment
becomes exercisable it shall remain exercisable until expiration or
termination of the Option, unless otherwise specified by the Committee.
(c) PARTIAL EXERCISE. Each Option or installment may be
exercised at any time or from time to time, in whole or in part, for up to
the total number of shares with respect to which it is then exercisable.
(d) ACCELERATION OF VESTING. The Committee shall have the
right to accelerate the date of exercise of any installment of any Option;
provided that the Committee shall not accelerate the exercise date of any
installment of any Option granted to any employee as an ISO (and not
previously converted into a Non-Qualified Option pursuant to paragraph 17) if
such acceleration would violate the annual vesting limitation contained in
Section 422(d) of the Code, as described in subparagraph 6(c).
9. TERMINATION OF EMPLOYMENT. If an ISO optionee ceases to be
employed by the Company and all Related Corporations other than by reason of
death or disability as defined in paragraph 10, no further installments of
his ISOs shall become exercisable, and his ISOs shall terminate after the
passage of ninety (90) days from the date of termination of his employment,
but in no event later than on their specified expiration dates, except to the
extent that such ISOs (or unexercised installments thereof) have been
converted into Non-Qualified Options pursuant to paragraph 17. Employment
shall be considered as continuing uninterrupted during any other bona fide
leave of absence (such as those attributable to illness, military obligations
or governmental service) provided that the period of such leave does not
exceed ninety (90) days or, if longer, any period during which such
optionee's right to reemployment is guaranteed by statute. A bona fide leave
of absence with the written approval of the Committee shall not be considered
an interruption of employment under the Plan, provided that such written
approval contractually obligates the Company or any Related Corporation to
continue the employment of the employee after the approved period of absence.
ISOs granted under the Plan shall not be affected by any change of employment
within or among the Company and Related Corporations, so long as the optionee
continues to be an employee of the Company or any Related Corporation.
Nothing in the Plan shall be deemed to give any grantee of any Option the
right to be retained in employment or other service by the Company or any
Related Corporation for any period of time. In granting any Non-Qualified
Option, the Committee may specify that
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such Non-Qualified Option shall be subject to the restrictions set forth
herein with respect to ISOs, or to such other termination or cancellation
provisions as the Committee may determine.
10. DEATH; DISABILITY.
(a) DEATH. If an ISO optionee ceases to be employed by the
Company and all Related Corporations by reason of his death, any ISO of his
may be exercised, to the extent of the number of shares with respect to which
he could have exercised it on the date of his death, by his estate, personal
representative or beneficiary who has acquired the ISO by will or by the laws
of descent and distribution, at any time prior to the earlier of the ISO's
specified expiration date or one year from the date of the optionee's death.
(b) DISABILITY. If an ISO optionee ceases to be employed by
the Company and all Related Corporations by reason of his disability, he
shall have the right to exercise any ISO held by him on the date of
termination of employment, to the extent of the number of shares with respect
to which he could have exercised it on that date, at any time prior to the
earlier of the ISO's specified expiration date or one year from the date of
the termination of the optionee's employment. For the purposes of the Plan,
the term "disability" shall mean "permanent and total disability" as defined
in Section 22(e)(3) of the Code or successor statute.
(c) NON-QUALIFIED OPTIONS. In granting any Non-Qualified
Option, the Committee may specify that such Non-Qualified Option shall be
subject to the restrictions set forth in subparagraphs 10(a) and 10(b) with
respect to ISOs, or to such other termination or cancellation provisions as
the Committee may determine (including without limitation, the termination
provisions set forth in the following sentence). If an optionee (serving as a
consultant to the Company) is a corporation, partnership, trust or other
entity that is dissolved, liquidated, becomes insolvent or enters into a
merger or acquisition with respect to which such optionee is not the
surviving entity at the time when such entity is serving as a consultant to
the Company, the Non-Qualified Options held by the optionee shall immediately
terminate as of the date of such event, and the only rights of the option
under this Plan shall be those as to which the optionee's Non-Qualified
Options were properly exercised before such dissolution or other event.
11. ASSIGNABILITY. No Option shall be assignable or transferable
by the optionee except by will or by the laws of descent and distribution,
and during the lifetime of the optionee each Option shall be exercisable only
by him.
12. TERMS AND CONDITIONS OF OPTIONS. Options shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including restrictions applicable to shares of Common Stock
issuable upon exercise of Options. The Committee may from time to time confer
authority and responsibility on one or more of its own members and/or one or
more officers of the Company to execute and deliver such instruments. The
proper officers of the Company are
5
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authorized and directed to take any and all action necessary or advisable
from time to time to carry out the terms of such instruments.
13. ADJUSTMENTS. Upon the happening of any of the following
described events, an optionee's rights with respect to Options granted to him
hereunder shall be adjusted as hereinafter provided, unless otherwise
specifically provided in the written agreement between the optionee and the
Company relating to such Option:
(a) STOCK DIVIDENDS AND STOCK SPLITS. If the shares of
Common Stock shall be subdivided or combined into a greater or smaller number
of shares or if the Company shall issue any shares of Common Stock as a stock
dividend on its outstanding Common Stock, the number of shares of Common
Stock deliverable upon the exercise of Options shall be appropriately
increased or decreased proportionately, and appropriate adjustments shall be
made in the purchase price per share to reflect such subdivision, combination
or stock dividend.
(b) CONSOLIDATIONS OR MERGERS. If the Company is to be
consolidated with or acquired by another entity in a merger, sale of all or
substantially all of the Company's assets or otherwise (an "Acquisition"),
the Committee or the board of directors of any entity assuming the
obligations of the Company hereunder (the "Successor Board") shall, with
respect to outstanding Options, take one or more of the following actions:
(i) make appropriate provision for the continuation of such Options by
substituting on an equitable basis for the shares then subject to such
Options the consideration payable with respect to the shares of Common Stock
in connection with the Acquisition; (ii) accelerate the date of exercise of
such Options or of any installment of any such Options; (iii) upon written
notice to the optionees, provide that all Options must be exercised, to the
extent then exercisable, within a specified number of days of the date of
such notice, at the end of which period the Options shall terminate; or (iv)
terminate all Options in exchange for a cash payment equal to the excess of
the fair market value (as determined under paragraph 16) of the shares
subject to such Options (to the extent then exercisable) over the exercise
price thereof.
(c) RECAPITALIZATION OR REORGANIZATION. In the event of a
recapitalization or reorganization of the Company (other than a transaction
described in subparagraph (b) above) pursuant to which securities of the
Company or of another corporation are issued with respect to the outstanding
shares of Common Stock, an optionee upon exercising an Option shall be
entitled to receive for the purchase price paid upon such exercise the
securities he would have received if he had exercised his Option prior to
such recapitalization or reorganization.
(d) MODIFICATION OF ISOS. Notwithstanding the foregoing, any
adjustments made pursuant to subparagraphs (a), (b) or (c) with respect to
ISOs shall be made only after the Committee, after consulting with counsel
for the Company, determines whether such adjustments would constitute a
"modification" of such ISOs as that term is defined in Section 424(h) of the
Code, or would cause any adverse tax consequences for the holders of such
ISOs. If the Committee determines that such adjustments made with respect to
ISOs would constitute a modification of such ISOs, it may refrain from making
such adjustments.
6
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(e) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, each Option will terminate
immediately prior to the consummation of such proposed action or at such
other time and subject to such other conditions as shall be determined by the
Committee.
(f) ISSUANCES OF SECURITIES. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and
no adjustment by reason thereof shall be made with respect to, the number or
price of shares subject to Options. No adjustments shall be made for
dividends paid in cash or in property other than securities of the Company.
(g) FRACTIONAL SHARES. No fractional shares shall actually
be issued under the Plan, and the optionee shall receive from the Company
cash in lieu of such fractional shares.
(h) ADJUSTMENTS. Upon the happening of any of the foregoing
events described in subparagraphs (a), (b) or (c) above, the class and
aggregate number of shares set forth in paragraph 4 hereof that are subject
to Options which previously have been or subsequently may be granted under
the Plan shall also be appropriately adjusted to reflect the events described
in such subparagraphs. The Committee shall determine the specific adjustments
to be made under this paragraph 13 and, subject to paragraph 2, its
determination shall be conclusive.
(i) RESTRICTED COMMON STOCK. If any person or entity owning
restricted Common Stock obtained by exercise of an Option made hereunder
receives new or additional or different shares or securities ("New
Securities") in connection with a corporate transaction described in
subparagraph (a), (b) or (c) above as a result of owning such restricted
Common Stock, such New Securities shall be subject to all of the conditions
and restrictions applicable to the restricted Common Stock with respect to
which such New Securities were issued, unless otherwise determined by the
Committee or the Successor Board.
14. MEANS OF EXERCISING OPTIONS. An Option (or any part or
installment thereof) shall be exercised by giving written notice to the
Company at its principal office address. Such notice shall identify the
Option being exercised and specify the number of shares as to which such
Option is being exercised, accompanied by full payment of the purchase price
therefor either (i) in United States dollars in cash or by check, or (b) at
the discretion of the Committee, through delivery of shares of Common Stock
having a fair market value (as determined under paragraph 16) equal as of the
date of the exercise to the cash exercise price of the Option, or (c) at the
discretion of the Committee, by delivery of the optionee's personal recourse
note bearing interest payable not less than annually at no less than 100% of
the lowest applicable Federal rate, as defined in Section 1274(d) of the
Code, or (d) at the discretion of the Committee, by any combination of (a),
(b) or (c) above. If the Committee exercises its discretion to permit payment
of the exercise price of an ISO by means of the methods set forth in clauses
(b), (c), or (d) of the preceding sentence, such discretion shall be
exercised in writing at the time of the grant of the ISO in question. The
holder of an Option shall not have the rights of
7
<PAGE>
a shareholder with respect to the shares covered by his Option until the date
of issuance of a stock certificate to him for such shares. Except as
expressly provided above in paragraph 13 with respect to changes in
capitalization and stock dividends, no adjustment shall be made for dividends
or similar rights for which the record date is before the date such stock
certificate is issued.
15. TERM AND AMENDMENT OF PLAN. This Plan was adopted by the Board
and by the holders of a majority of the outstanding shares of voting capital
stock of the Company on May 19, 1995. The Plan shall expire on May 19, 2005
(except as to Options outstanding on that date). The Board may terminate or
amend the Plan in any respect at any time, except that, each of the following
actions shall also require the approval of shareholders obtained within 12
months before or after the Board adopts a resolution authorizing such action:
(a) any increase in the total number of shares that may be issued under the
Plan (except by adjustment pursuant to paragraph 13 which shall not require
shareholder approval); (b)any modification of the provisions of paragraph 3
regarding eligibility for grants of ISOs; (c) any modification of the
provisions of paragraph 6(b) regarding the exercise price at which shares may
be offered pursuant to ISOs (except by adjustment pursuant to paragraph 13
which shall not require shareholder approval); and (d) any extension of the
expiration date of the Plan. Except as provided in the third sentence of this
paragraph 15, in no event may action of the Board or shareholders alter or
impair the rights of an optionee without his consent, under any Option
previously granted to him.
16. DETERMINATION OF FAIR MARKET VALUE. If, at the time "fair
market value" is determined under paragraph 6, subparagraph 13(b) or
paragraph 14, the Company's Common Stock is publicly traded, "fair market
value" shall be determined as of the last business day for which the prices
or quotes discussed in this sentence are available prior to the date such
Option is granted and shall mean (i) the average (on that date) of the high
and low prices of the Common Stock on the principal national securities
exchange on which the Common Stock is traded, if such Stock is then traded on
a national securities exchange; or (ii) the last reported sale price (on that
date) of the Common Stock on the NASDAQ National Market List, if the Common
Stock is not then traded on a national securities exchange and is then
reported on such list; or (iii) the closing bid price (or average of bid
prices) last quoted (on that date) by an established quotation service for
over-the-counter securities, if the Common Stock is not then traded on a
national securities exchange and is not reported on the NASDAQ National
Market List. However, if the Common Stock is not publicly traded at the time
such determination is made, "fair market value" shall be deemed to be the
fair value of the Common Stock as determined by the Committee after taking
into consideration all factors which it deems appropriate, including, without
limitation, recent sale and offer prices of the Common Stock in private
transactions negotiated at arm's length.
17. CONVERSION OF ISOS INTO NON-QUALIFIED OPTIONS; TERMINATION OF
ISOS. The Committee, at the written request of any optionee, may in its
discretion take such actions as may be necessary to convert such optionee's
ISOs (or any installments or portions of installments thereof) that have not
been exercised on the date of conversion into Non-Qualified Options at any
time prior to the expiration of such ISOs, regardless of whether the optionee
is an employee of
8
<PAGE>
the Company or a Related Corporation at the time of such conversion. Such
actions may include, but not be limited to, extending the exercise period or
reducing the exercise price of the appropriate installments of such Options.
At the time of such conversion, the Committee (with the consent of the
optionee) may impose such conditions on the exercise of the resulting
Non-Qualified Options as the Committee in its discretion may determine,
provided that such conditions shall not be inconsistent with this Plan.
Nothing in the Plan shall be deemed to give any optionee the right to have
such optionee's ISOs converted into Non-Qualified Options, and no such
conversion shall occur until and unless the Committee takes appropriate
action. The Committee, with the consent of the optionee, may also terminate
any portion of any ISO that has not been exercised at the time of such
termination.
18. APPLICATION OF FUNDS. The proceeds received by the Company
from the sale of shares pursuant to Options granted under the Plan shall be
used for general corporate purposes.
19. GOVERNMENTAL REGULATION. The Company's obligation to sell and
deliver shares of the Common Stock under this Plan is subject to the approval
of any governmental authority required in connection with the authorization,
issuance or sale of such shares.
20. WITHHOLDING OF ADDITIONAL INCOME TAXES. Upon the exercise of a
Non-Qualified Option or the making of a Disqualifying Disposition (as defined
in paragraph 21), the Company, in accordance with Section 3402(a) of the
Code, may require the optionee, to pay additional withholding taxes in
respect of the amount that is considered compensation includable in such
person's gross income. The Committee in its discretion may condition the
exercise of an Option on the purchaser's or optionee's payment of such
additional withholding taxes.
21. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION. Each employee
who receives ISOs shall agree to notify the Company in writing immediately
after the employee makes a Disqualifying Disposition of any Common Stock
received pursuant to the exercise of an ISO. A Disqualifying Disposition is
any disposition (including any sale) of such stock before the later of (a)
two years after the employee was granted the ISO under which he acquired such
stock, or (b) one year after the employee acquired such stock by exercising
the ISO. If the employee has died before such stock is sold, these holding
period requirements do not apply and no Disqualifying Disposition can occur
thereafter.
22. GOVERNING LAW; CONSTRUCTION. The validity and construction of
the Plan and the instruments evidencing Options shall be governed by the laws
of the State of Delaware. In construing this Plan, the singular shall include
the plural and the masculine gender shall include the feminine and neuter,
unless the context otherwise requires.
9
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EXHIBIT 99.3
OrCAD, INC.
AMENDED 1995 STOCK INCENTIVE PLAN
1. PURPOSES OF THE PLAN.
The purposes of this Stock Incentive Plan are to attract and retain the
best available personnel for positions of substantial responsibility, to provide
additional incentive to the Employees and Consultants of the Company and to
promote the success of the Company's business.
Options granted hereunder may be either "incentive stock options," as
defined in Section 422 of the Internal Revenue Code of 1986, as amended, or
"nonqualified stock options," at the discretion of the Board and as reflected in
the terms of the written option agreement. In addition, shares of the Company's
Common Stock may be Sold hereunder independent of any Option grant.
2. DEFINITIONS.
As used herein, the following definitions shall apply:
2.1 "ADMINISTRATOR" shall mean the Board or any of its Committees as
shall be administering the Plan, in accordance with Section 4.1 of the Plan.
2.2 "BOARD" shall mean the Board of Directors of the Company.
2.3 "CODE" shall mean the Internal Revenue Code of 1986, as amended.
2.4 "COMMITTEE" shall mean a Committee appointed by the Board in
accordance with Section 0 of the Plan.
2.5 "COMMON STOCK" shall mean the Common Stock of the Company.
2.6 "COMPANY" shall mean OrCAD, Inc., a Delaware corporation.
2.7 "CONSULTANT" shall mean any person who is engaged by the Company or
any Parent or Subsidiary to render consulting services and is compensated for
such consulting services and any Director of the Company whether compensated for
such services or not.
2.8 "CONTINUOUS STATUS AS AN EMPLOYEE OR CONSULTANT" shall mean the
absence of any interruption or termination of service as an Employee or
Consultant. Continuous Status as an Employee or Consultant shall not be
considered interrupted in the case of: (i) any sick leave, military leave, or
any other leave of absence approved by the Company; provided, however, that for
purposes of Incentive Stock Options, any such leave is for a period of not more
than ninety days or reemployment upon the expiration of such leave is guaranteed
by contract or statute, provided further, that on the ninety-first day of such
leave (where reemployment is not
1 - 1995 STOCK INCENTIVE PLAN.
<PAGE>
guaranteed by contract or statute) the Optionee's Incentive Stock Option
shall automatically convert to a Nonqualified Stock Option; or (ii) transfers
between locations of the Company or between the Company, its Parent, its
Subsidiaries or its successor.
2.9 "DIRECTOR" shall mean a member of the Board.
2.10 "DISABILITY" shall mean total and permanent disability as
defined in Section 22(e)(3) of the Code.
2.11 "EMPLOYEE" shall mean any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company.
Neither the payment of a director's fee by the Company nor service as a Director
shall be sufficient to constitute "employment" by the Company.
2.12 "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
2.13 "INCENTIVE STOCK OPTION" shall mean an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code.
2.14 "NONQUALIFIED STOCK OPTION" shall mean an Option not intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.
2.15 "NOTICE OF GRANT" shall mean a written notice evidencing certain
terms and conditions of an individual Option grant. The Notice of Grant is part
of the Option Agreement.
2.16 "OFFICER" shall mean 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.
2.17 "OPTION" shall mean a stock option granted pursuant to the Plan.
2.18 "OPTION AGREEMENT" shall mean 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.
2.19 "OPTIONED STOCK" shall mean the Common Stock subject to an Option.
2.20 "OPTIONEE" shall mean an Employee or Consultant who
receives an Option.
2.21 "PARENT" shall mean a "parent corporation," whether now or
hereafter existing, as defined in Section 424 of the Code.
2.22 "PLAN" shall mean this 1995 Stock Incentive Plan.
2.23 "RULE 16B-3" shall mean 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.
2 - 1995 STOCK INCENTIVE PLAN.
<PAGE>
2.24 "SALE" or "SOLD" shall include, with respect to the sale of Shares
under the Plan, the sale of Shares for consideration in the form of cash or
notes, as well as a grant of Shares for consideration in the form of past or
future services.
2.25 "SHARE" shall mean a share of the Common Stock, as adjusted
in accordance with Section 11 of the Plan.
2.26 "SUBSIDIARY" shall mean a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. STOCK SUBJECT TO THE PLAN.
Subject to the provisions of Section 11 of the Plan, the maximum
aggregate number of Shares which may be optioned and/or Sold under the Plan is
2,000,000 (post-split) shares of Common Stock. The Shares may be authorized, but
unissued, or reacquired Common Stock.
If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for
future Option grants and/or Sales under the Plan; provided, however, that Shares
that have actually been issued under the Plan shall not be returned to the Plan
and shall not become available for future distribution under the Plan.
4. ADMINISTRATION OF THE PLAN.
4.1 PROCEDURE.
4.1.1 MULTIPLE ADMINISTRATIVE BODIES. If permitted by Rule
16b-3, the Plan may be administered by different bodies with respect to
Directors, Officers who are not Directors, and Employees who are
neither Directors nor Officers.
4.1.2 ADMINISTRATION WITH RESPECT TO DIRECTORS AND OFFICERS
SUBJECT TO SECTION 16(b). With respect to Option grants made to
Employees who are also Officers or Directors subject to Section 16(b)
of the Exchange Act, the Plan shall be administered by (A) the Board,
if the Board may administer the Plan in compliance with the rules
governing a plan intended to qualify as a discretionary plan under Rule
16b-3, or (B) a Committee designated by the Board to administer the
Plan, which Committee shall be constituted to comply with the rules, if
any, governing a plan intended to qualify as a discretionary plan under
Rule 16b-3. Once appointed, such Committee shall continue to serve in
its designated capacity until otherwise directed by the Board. From
time to time the Board may increase the size of the Committee and
appoint additional members, remove members (with or without cause) and
substitute new members, fill vacancies (however caused), and remove all
members of the Committee and thereafter directly administer the Plan,
all to the extent permitted by the rules, if any, governing a plan
intended to qualify as a discretionary plan under Rule 16b-3. With
respect to persons subject to Section 16 of the Exchange Act,
transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3. To the extent any provision of the
3 - 1995 STOCK INCENTIVE PLAN.
<PAGE>
Plan or action by the Administrator fails to so comply, it shall be
deemed null and void, to the extent permitted by law and deemed
advisable by the Administrator.
4.1.3 ADMINISTRATION WITH RESPECT TO OTHER PERSONS. With
respect to Option grants made to Employees or Consultants who are
neither Directors nor Officers of the Company, the Plan shall be
administered by (a) the Board or (b) a Committee designated by the
Board, which Committee shall be constituted to satisfy the legal
requirements relating to the administration of stock option plans under
state corporate and securities laws and the Code. Once appointed, such
Committee shall serve in its designated capacity until otherwise
directed by the Board. The Board may increase the size of the Committee
and appoint additional members, remove members (with or without cause)
and substitute new members, fill vacancies (however caused), and remove
all members of the Committee and thereafter directly administer the
Plan, all to the extent permitted by the legal requirements relating to
the administration of stock option plans under state corporate and
securities laws and the Code.
4.2 POWERS OF THE ADMINISTRATOR. Subject to the provisions of the Plan,
and in the case of a Committee, subject to the specific duties delegated by the
Board to such Committee, the Administrator shall have the authority, in its
discretion:
4.2.1 to grant Incentive Stock Options in accordance with
Section 422 of the Code, or Nonqualified Stock Options;
4.2.2 to authorize Sales of Shares of Common Stock
hereunder;
4.2.3 to determine, upon review of relevant information and in
accordance with Section 8.2 of the Plan, the fair market value of the
Common Stock;
4.2.4 to determine the exercise/purchase price per Share of
Options to be granted or Shares to be Sold, which exercise/purchase
price shall be determined in accordance with Section 8.1 of the Plan;
4.2.5 to determine the Employees or Consultants to whom, and
the time or times at which, Options shall be granted and the number of
Shares to be represented by each Option;
4.2.6 to determine the Employees or Consultants to whom, and
the time or times at which, Shares shall be Sold and the number of
Shares to be Sold;
4.2.7 to interpret the Plan;
4.2.8 to prescribe, amend and rescind rules and
regulations relating to the Plan;
4.2.9 to determine the terms and provisions of each Option
granted (which need not be identical) and, with the consent of the
holder thereof, modify or amend each Option;
4 - 1995 STOCK INCENTIVE PLAN.
<PAGE>
4.2.10 to determine the terms and provisions of each Sale of
Shares (which need not be identical) and, with the consent of the
purchaser thereof, modify or amend each Sale;
4.2.11 to accelerate or defer (with the consent of the
Optionee) the exercise date of any Option;
4.2.12 to accelerate or defer (with the consent of the
Optionee or purchaser of Shares) the vesting restrictions applicable to
Shares Sold under the Plan or pursuant to Options granted under the
Plan;
4.2.13 to authorize any person to execute on behalf of the
Company any instrument required to effectuate the grant of an Option or
Sale of Shares previously granted or authorized by the Board;
4.2.14 to determine the restrictions on transfer, vesting
restrictions, repurchase rights, or other restrictions applicable to
Shares issued under the Plan;
4.2.15 to effect, at any time and from time to time, with the
consent of the affected Optionees, the cancellation of any or all
outstanding Options under the Plan and to grant in substitution
therefor new Options under the Plan covering the same or different
numbers of Shares, but having an Option price per Share consistent with
the provisions of Section 8 of this Plan as of the date of the new
Option grant;
4.2.16 to establish, on a case-by-case basis, different terms
and conditions pertaining to exercise or vesting rights upon
termination of employment, whether at the time of an Option grant or
Sale of Shares, or thereafter;
4.2.17 to approve forms of agreement for use under the Plan;
4.2.18 to reduce the exercise price of any Option to the then
current fair market value if the fair market value of the Common Stock
covered by such Option shall have declined since the date the Option
was granted;
4.2.19 to determine whether and under what circumstances an
Option may be settled in cash under subsection 9.5 instead of Common
Stock; and
4.2.20 to make all other determinations deemed necessary or
advisable for the administration of the Plan.
4.3 EFFECT OF BOARD'S DECISION. All decisions, determinations and
interpretations of the Administrator shall be final and binding on all Optionees
and any other holders of any Options granted under the Plan or Shares Sold under
the Plan.
5 - 1995 STOCK INCENTIVE PLAN.
<PAGE>
5. ELIGIBILITY.
5.1 PERSONS ELIGIBLE. Options may be granted and/or Shares Sold only to
Employees and Consultants. Incentive Stock Options may be granted only to
Employees. An Employee or Consultant who has been granted an Option or Sold
Shares may, if he or she is otherwise eligible, be granted an additional Option
or Options or Sold additional Shares.
5.2 ISO LIMITATION. To the extent that the aggregate fair market value
of shares subject to an Optionee's Incentive Stock Options granted by the
Company, any Parent or Subsidiary, which (ii) become exercisable for the first
time during any calendar year (under all plans of the Company or any Parent or
Subsidiary) exceeds $100,000, such excess Options shall be treated as
Nonqualified Stock Options. For purposes of this Section 5.2, Incentive Stock
Options shall be taken into account in the order in which they were granted, and
the fair market value of the Shares shall be determined as of the time of grant.
5.3 SECTION 5.2 LIMITATIONS. Section 5.2 of the Plan shall apply only
to an Incentive Stock Option evidenced by an Option Agreement which sets forth
the intention of the Company and the Optionee that such Option shall qualify as
an Incentive Stock Option. Section 5.2 of the Plan shall not apply to any Option
evidenced by a Option Agreement which sets forth the intention of the Company
and the Optionee that such Option shall be a Nonqualified Stock Option.
5.4 NO RIGHT TO CONTINUED EMPLOYMENT. The Plan shall not confer upon
any Optionee any right with respect to continuation of employment or consulting
relationship with the Company, nor shall it interfere in any way with his or her
right or the Company's right to terminate his employment or consulting
relationship at any time.
5.5 OTHER LIMITATIONS. The following limitations shall apply to
grants of Options to Employees:
5.5.1 No Employee shall be granted, in any fiscal year of the
Company, Options to purchase more than 100,000 Shares.
5.5.2 In connection with his or her initial employment, an
Employee may be granted Options to purchase up to an additional 100,000
Shares which shall not count against the limit set forth in subsection
5.5.1 above.
5.5.3 The foregoing limitation shall be adjusted
proportionately in connection with any change in the Company's
capitalization as described in Section 11.
5.5.4 If an Option is canceled in the same fiscal year of the
Company in which it was granted (other than in connection with a
transaction described in Section 11), the canceled Option shall be
counted against the limits set forth in subsections 5.5.1 and 5.5.2
above. For this purpose, if the exercise price of an Option is reduced,
the transaction will be treated as a cancellation of the Option and the
grant of a new Option.
6 - 1995 STOCK INCENTIVE PLAN.
<PAGE>
6. TERM OF PLAN.
The Plan shall become effective upon the earlier to occur of its
adoption by the Board or its approval by the stockholders of the Company as
described in Section 17 of the Plan. It shall continue in effect for a term of
ten (10) years, unless sooner terminated under Section 13 of the Plan.
7. TERM OF OPTION.
The term of each Option shall be stated in the Notice of Grant;
provided, however, that in the case of an Incentive Stock Option, the term shall
be ten (10) years from the date of grant or such shorter term as may be provided
in the Notice of Grant. However, in the case of an Incentive Stock Option
granted to an Optionee who, at the time the Incentive Stock Option is granted,
owns stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the term of the
Incentive Stock Option shall be five (5) years from the date of grant thereof or
such shorter term as may be provided in the Notice of Grant.
8. EXERCISE/PURCHASE PRICE AND CONSIDERATION.
8.1 EXERCISE/PURCHASE PRICE. The per-Share exercise/purchase price for
the Shares to be issued pursuant to exercise of an Option or a Sale shall be
such price as is determined by the Administrator, but shall be subject to the
following:
8.1.1 In the case of an Incentive Stock Option
(a) granted to an Employee who, at the time of the
grant of such Incentive Stock Option, owns stock representing
more than ten percent (10%) of the voting power of all classes
of stock of the Company or any Parent or Subsidiary, the per
Share exercise price shall be no less than one hundred ten
percent (110%) of the fair market value per Share on the date
of the grant.
(b) granted to any other Employee, the per Share
exercise price shall be no less than one hundred percent
(100%) of the fair market value per Share on the date of
grant.
8.1.2 In the case of a Nonqualified Stock Option or Sale the
per Share exercise/purchase price determined by the Administrator
Any determination to establish an Option exercise price of
effect a Sale of Common Stock at less than fair market value
on the date of the Option grant or authorization of Sale shall
be accompanied by an express finding by the Administrator
specifying that the sale is in the best interest of the
Company, and specifying both the fair market value and the
Option exercise or Sale price of the Common stock.
7 - 1995 STOCK INCENTIVE PLAN.
<PAGE>
8.2 FAIR MARKET VALUE. The fair market value per Share shall be
determined by the Administrator in its discretion; provided, however, that where
there is a public market for the Common Stock, the fair market value per Share
shall be the closing price of the Common Stock (or the closing bid if no sales
were reported) for the last market trading day prior to the date of grant of the
Option or authorization of Sale or other determination, as reported in THE WALL
STREET JOURNAL (or, if not so reported, as otherwise reported by the National
Association of Securities Dealers Automated Quotation (NASDAQ) System) or, in
the event the Common Stock is listed on a stock exchange, the fair market value
per Share shall be the closing price on such exchange for the last market
trading day prior to the date of grant of the Option or authorization of Sale or
other determination, as reported in THE WALL STREET JOURNAL.
8.3 CONSIDERATION. The consideration to be paid for the Shares to be
issued upon exercise of an Option or pursuant to a Sale, including the method of
payment, shall be determined by the Administrator. In the case of an Incentive
Stock Option, the Administrator shall determine the acceptable form of
consideration at the time of grant. Such consideration may consist of:
8.3.1 cash;
8.3.2 check;
8.3.3 transfer to the Company of Shares which
(a) in the case of Shares acquired upon exercise of
an Option, have been owned by the Optionee for more than six
months on the date of surrender, and
(b) have a fair market value on the date of surrender
equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised;
8.3.4 delivery of a properly executed exercise notice
together with irrevocable instructions to a broker to promptly deliver
to the Company the amount of Sale or loan proceeds required to pay the
exercise price;
8.3.5 such other consideration and method of payment for
the issuance of Shares to the extent permitted by legal requirements
relating to the administration of stock option plans under state
corporate and securities laws and the Code; or
8.3.6 any combination of the foregoing methods of payment.
If the fair market value of the number of whole Shares transferred or
the number of whole Shares surrendered is less than the total exercise price of
the Option, the shortfall must be made up in cash or by check. Notwithstanding
the foregoing provisions of this Section 8.3, the consideration for Shares to be
issued pursuant to a Sale may not include, in whole or in part, the
consideration set forth in subsections (iii) and (iv) above.
8 - 1995 STOCK INCENTIVE PLAN.
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9. EXERCISE OF OPTION.
9.1 PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER. Any Option granted
hereunder shall be exercisable at such times and under such conditions as
determined by the Administrator, including performance criteria with respect to
the Company and/or the Optionee, and as shall be permissible under the terms of
the Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Administrator, consist of any
consideration and method of payment allowable under the Option Agreement and
Section 8.3 of the Plan. Each Optionee who exercises an Option shall, upon
notification of the amount due (if any) and prior to or concurrent with delivery
of the certificate representing the Shares, pay to the Company amounts necessary
to satisfy applicable federal, state and local tax withholding requirements. An
Optionee must also provide a duly executed copy of any stock transfer agreement
then in effect and determined to be applicable by the Administrator. Until the
issuance (as evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company) of the stock certificate
evidencing such Shares, no right to vote or receive dividends or any other
rights as a stockholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the stock
certificate is issued, except as provided in Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
9.2 TERMINATION OF EMPLOYMENT OR CONSULTING RELATIONSHIP. In the event
that an Optionee's Continuous Status as an Employee or Consultant terminates
(other than upon the Optionee's death or Disability) the Optionee may exercise
his or her Option, but only within such period of time as is determined by the
Administrator, and only to the extent that the Optionee was entitled to exercise
it at the date of termination (but in no event later than the expiration of the
term of such Option as set forth in the Notice of Grant). In the case of an
Incentive Stock Option, the Administrator shall determine such period of time
(in no event to exceed ninety (90) days from the date of termination) when the
Option is granted. If, at the date of termination, the Optionee is not entitled
to exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option with the time specified by the
Administrator, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan.
9.3 DISABILITY OF OPTIONEE. In the event that an Optionee's Continuous
Status as an Employee or Consultant terminates as a result of the Optionee's
Disability, the Optionee may exercise his or her Option at any time within
twelve (12) months from the date of such
9 - 1995 STOCK INCENTIVE PLAN.
<PAGE>
termination, but 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 Notice of Grant).
If, at the date of termination, the Optionee is not entitled to exercise his
or her entire Option, the Shares covered by the unexercisable portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
9.4 DEATH OF OPTIONEE. In the event of the death of an Optionee, the
Option may be exercised at any time within twelve (12) months following the date
of death (but in no event later than the expiration of the term of such Option
as set forth in the Notice of Grant), by the Optionee's estate or by a person
who acquired the right to exercise the Option by bequest or inheritance, but
only to the extent that the Optionee was entitled to exercise the Option at the
date of death. If, at the time of death, the Optionee was not entitled to
exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall revert to the Plan. If, after death, the Optionee's
estate or a person who acquired the right to exercise the Option by bequest or
inheritance does not exercise the Option within the time specified herein, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.
9.5 BUYOUT PROVISIONS. The Administrator may at any time offer to
buyout for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicated
to the Optionee at the time such offer is made.
10. NONTRANSFERABILITY OF OPTIONS.
Except as otherwise specifically provided in the Option Agreement, an
Option may not be sold, pledged, assigned, hypothecated, transferred or disposed
of in any manner other than by will, or by the laws of descent and distribution,
and may be exercised during the lifetime of the Optionee only by the Optionee
or, if incapacitated, by his or her legal guardian or legal representative.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.
11.1 CHANGES IN CAPITALIZATION: Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and the number of shares of Common Stock which have been
authorized for issuance under the Plan but as to which no Options have yet been
granted or Sales made or which have been returned to the Plan upon cancellation
or expiration of an Option, as well as the price per share of Common Stock
covered by each such outstanding Option, shall be proportionately adjusted for
any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split, reverse stock split, stock dividend, combination
or reclassification of the Common Stock, or any other increase or decrease in
the number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the
Administrator, whose determination in
10 - 1995 STOCK INCENTIVE PLAN.
<PAGE>
that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class,
or securities convertible into shares of stock of any class, shall affect,
and no adjustment by reason thereof shall be made with respect to, the number
or price of shares of Common Stock subject to an Option.
11.2 DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, each outstanding Option will
terminate immediately prior to the consummation of such proposed action, unless
otherwise provided by the Administrator. The Administrator may, in the exercise
of its sole discretion in such instances, declare that any Option shall
terminate as of a date fixed by the Board and give each Optionee the right to
exercise his or her Option as to all or any part of the Optioned Stock,
including Shares as to which the Option would not otherwise be exercisable.
11.3 MERGER OR ASSET SALE. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each outstanding Option shall be assumed or an
equivalent option shall be substituted by such successor corporation or a Parent
or Subsidiary of such successor corporation, unless the Administrator
determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, that the Optionee shall have the right to exercise
the Option as to all of the Optioned Stock, including Shares as to which the
Option would not otherwise be exercisable. If the Administrator makes an Option
fully exercisable in lieu of assumption or substitution in the event of a merger
or sale of assets, the Administrator shall notify the Optionee that the Option
shall be fully exercisable for a period of thirty (30) days from the date of
such notice or such shorter period as the Administrator may specify in the
notice, and the Option will terminate upon the expiration of such period. For
the purposes of this paragraph, the Option shall be considered assumed if,
following the merger or sale of assets, the Option confers the right to
purchase, for each Share of Optioned Stock subject to the Option immediately
prior to the merger or sale of assets, the consideration (whether stock, cash,
or other securities or property) received in the merger or sale of assets by
holders of Common Stock for each Share held on the effective date of the
transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the merger or sale of
assets was not solely common stock of the successor corporation or its Parent,
the Administrator may, with the consent of the successor corporation and the
Optionee, provide for the consideration to be received upon the exercise of the
Option, for each Share of Optioned Stock subject to the Option, to be solely
common stock of the successor corporation or its Parent equal in fair market
value to the per share consideration received by holders of Common Stock in the
merger or sale of assets.
12. TIME OF GRANTING OPTIONS.
The date of grant of an Option shall, for all purposes, be the date on
which the Administrator makes the determination granting such Option. Notice of
the determination shall be given to each Optionee within a reasonable time after
the date of such grant.
11 - 1995 STOCK INCENTIVE PLAN.
<PAGE>
13. AMENDMENT AND TERMINATION OF THE PLAN.
13.1 AMENDMENT AND TERMINATION. The Board may amend or terminate the
Plan from time to time in such respects as the Board may deem advisable.
13.2 STOCKHOLDER APPROVAL. The Company shall obtain stockholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Rule 16b-3 or with Section 422 of the Code (or any successor rule or
statute or other applicable law, rule or regulation, including the requirements
of any exchange or quotation system on which the Common Stock is listed or
quoted). Such stockholder approval, if required, shall be obtained in such a
manner and to such a degree as is required by the applicable law, rule or
regulation.
13.3 EFFECT OF AMENDMENT OR TERMINATION. Any such amendment or
termination of the Plan shall not affect Options already granted, and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Administrator, which agreement must be in writing and signed by the Optionee
and the Company.
14. CONDITIONS UPON ISSUANCE OF SHARES.
Shares shall not be issued pursuant to the exercise of an Option or a
Sale unless the exercise of such Option or consummation of the Sale and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, applicable state securities laws, the Exchange Act, the rules
and regulations promulgated thereunder, and the requirements of any stock
exchange (including NASDAQ) upon which the Shares may then be listed, and shall
be further subject to the approval of counsel for the Company with respect to
such compliance.
15. RESERVATION OF SHARES.
The Company, during the term of this Plan, will at all times reserve
and keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.
16. LIABILITY OF COMPANY.
16.1 INABILITY TO OBTAIN AUTHORITY. Inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
As a condition to the exercise of an Option or a Sale, the Company may
require the person exercising such Option or to whom Shares are being Sold to
represent and warrant at the time of any such exercise or Sale that the Shares
are being purchased only for investment and without any present intention to
sell or distribute such Shares if, in the opinion of counsel for the
12 - 1995 STOCK INCENTIVE PLAN.
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Company, such a representation is required by any of the aforementioned
relevant provisions of law.
16.2 GRANTS EXCEEDING ALLOTTED SHARES. If the Optional Stock covered by
an Option exceeds, as of the date of grant, the number of Shares which may be
issued under the Plan without additional stockholder approval, such Option shall
be void with respect to such excess Optioned Stock, unless stockholder approval
of an amendment sufficiently increasing the number of Shares subject to the Plan
is timely obtained in accordance with Section 13 of the Plan.
17. STOCKHOLDER APPROVAL.
Continuance of the Plan shall be subject to approval by the
stockholders of the Company within twelve months before or after the date the
Plan is adopted. Such stockholder approval shall be obtained in the manner and
to the degree required under applicable federal and state law.
13 - 1995 STOCK INCENTIVE PLAN.
