<PAGE> 1
As filed with the Securities and Exchange Commission on December 6, 1999
Registration No.: 333- 85665
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
-----------------------
FASTCOMM COMMUNICATIONS CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
VIRGINIA 54-128 9115
- ------------------------------- --------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization Identification No.)
45472 HOLIDAY DRIVE
DULLES, VIRGINIA 20166
(703) 318-7750
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(Address of principal executive offices) (Zip Code)
------------------------
1992 INCENTIVE STOCK OPTION PLAN
1992 NON-QUALIFIED STOCK OPTION PLAN
1991 EXECUTIVE NON-QUALIFIED OPTION PLAN
AND 1999 STOCK OPTION PLAN
- --------------------------------------------------------------------------------
(Full title of the Plans)
<PAGE> 2
MARK H. RAFFERTY
CHIEF FINANCIAL OFFICER
FASTCOMM COMMUNICATIONS CORPORATION
45472 HOLIDAY DRIVE
DULLES, VIRGINIA 20166
(7003) 318-7750
- --------------------------------------------------------------------------------
(Name and address of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
============================================================================================================
Proposed
Maximum Proposed
Offering Maximum Amount of
Amount to be Price Aggregate Registration
Title of Securities to be Registered Registered (1) Per share Offering Price Fee
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1992 Executive Non-Qualified
Option Plan, Common Stock,
$0.001 par value 1,020,372 $ 1 .375 $ 1,403,012 $421.00
- ------------------------------------------------------------------------------------------------------------
1992 Incentive and Non-
Qualified Stock Option
Plans, Common Stock,
$0.001 par value 789,236 $ 1 .375 $ 1, 085,200 $326.00
- ------------------------------------------------------------------------------------------------------------
1999 Stock Option Plan
Common Stock, $0.001 par value 1,500,000 $ 1.375 $ 2,062,500 $619.00
- ------------------------------------------------------------------------------------------------------------
Aggregate Registration Fee: $1,366.00
============================================================================================================
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the 1992 Executive Non-Qualified
Plan, 1992 Incentive Stock Option Plan, 1992 Non-Qualified Stock Option
Plan and 1999 Stock Option Plan (by reason of any stock dividend, stock
split, recapitalization or other similar transaction effected without the
Registrant's receipt of consideration which results in an increase in the
number of the outstanding shares of Registrant's Common Stock.)
(2) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, on the basis of the average of the
high and low selling prices per share of Registrant's Common Stock on
November 26, 1999 as reported on NASDAQ OTC Bulletin Board.
================================================================================
2
<PAGE> 3
PART I. INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information required by Part I of Form S-8 is included in documents
sent or given to participants in the 1991 Executive Non-Qualified Stock Option
Plan, 1992 Employee Non-Qualified Stock Option Plan, 1992 Incentive Stock Option
Plan or 1999 Stock Option Plan of FastComm Communications Corporation (the
"Registrant") pursuant to Rule 428(b)(1) of the Securities Act of 1933, as
amended (the "Securities Act").
3
<PAGE> 4
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
FASTCOMM COMMUNICATIONS CORPORATION (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 forms 10-K for the fiscal year
ended April 30, 1999, filed with the Commission on July 28, 1999;
(b) The Registrant's Quarterly Reports on Form 10-Q for the fiscal
quarter ended July 31, 1999 filed with the Commission on September 13, 1999;
(c) The Registrant's Definitive Proxy Statement for the Registrant's
1999 Annual Meeting of Shareholder filed with the commission on October 6, 1999;
and
(d) The Registrant's Registration Statement on Form 8-A filed with the
Commission on September 8, 1988 in which the terms, rights and provisions
applicable to the Registrant's Common Stock are described.
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities and 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 statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any subsequently filed document which also is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Six of the Company's By-Laws, as amended, empowers the
Company to indemnify current or former directors, officers, employees or agents
of the
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Company or persons serving by request of the Company in such capacities in any
other enterprise or persons who have served by the request of the Company in
such capacities in any other enterprise to the full extent permitted by the laws
of the State of Virginia.
Article Tenth of the Virginia Stock Corporation Act (the "Act")
contains provisions authorizing indemnification by the Company of directors,
officers, employees or agents against certain liabilities and expenses which
they may incur as directors, officers, employees or agents of the Company or of
certain other entities. Section 13.1 - 699 also provides that such
indemnification may include payment of the Company of expenses incurred in
defending a civil or criminal action or proceeding in advance of the final
disposition of such action or proceeding upon receipt of an undertaking by the
person indemnified to repay such payment if he shall be ultimately found not to
be entitled to indemnification under the Section. Indemnification may be
provided even though the person to be indemnified is no longer a director,
officer, employee or agent of the Company or such other entities. Section 13.1 -
703 also contains provisions authorizing the Company to obtain insurance on
behalf of any such director, officer, employee or agent against liabilities,
whether or not the Company would have the power to indemnify such person against
such liabilities under the provisions of the Section. The Company currently
maintains a policy of insurance under which the directors and officers of the
Company are insured, within the limits and subject to the exclusions and
limitations of the policy, against certain expenses in connection with the
defense of actions, suits or proceedings, to which they are parties by reason of
being or having been such directors or officers.
The indemnification and advancement of expenses provided pursuant
to Section 13.1 - 699 are not exclusive, and subject to certain conditions, the
Company may make other or further indemnification or advancement of expenses of
any of its directors, officers, employees or agents. Because the Articles of
Incorporation, as amended, of the Company do not otherwise provide,
notwithstanding the failure of the Company to provide indemnification and
despite a contrary determination by the Board of Directors or its
Securityholders in a specific case, a director, officer, employee or agent of
the Company who is or was a party to a proceeding may apply to a court of
competent jurisdiction for indemnification or advancement of expenses or both,
and the court may order indemnification and advancement of expenses, including
expenses incurred in seeking court-ordered indemnification or advancement of
expenses if it determines that the petitioner is entitled to mandatory
indemnification pursuant to Section 13.1 - 698 because he has been successful on
the merits, or because the Company has the power to indemnify on a discretionary
basis pursuant to Section 13.1 - 699 or because the court determines that the
petitioner is fairly and reasonably entitled indemnification or advancement of
expenses or both in view of all the relevant circumstances.
Section 13.1-692.1 of the Act provides that the damages assessed against any
officer or director arising out of a single transaction, occurrence or course of
conduct shall not exceed the lesser of (1) the monetary amount specified in the
Articles of Incorporation; or (2) months immediately proceeding the act or
omission for which liability was imposed. The liability of an officer or
director engaged in willful misconduct or a knowing violation of criminal law or
of any federal or state securities law including without limit of any claim of
unlawful insider trading or manipulation of the market for any security is not
covered by such provision.
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<PAGE> 6
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
4.1 Restated Articles of Incorporation of the Company (Previously
filed as Exhibit to Form S-18, Reg. No 33-19785)
4.2 Restated By-Laws of the company, as amended (Previously filed as
Exhibit to Form S-18, Reg. No 33-19785)
4.3 Specimen Certificate of Common Stock of the Registrant
(Previously filed as Exhibit to Form S-18, Reg. No 33-19785)
5 Opinion and consent of Sokolow, Dunaud, Mercadier & Carreras, LLP
23.1 Consent of BDO Seidman, LLP Independent Accountants
23.2 Consent of Sokolow, Dunaud, Mercadier & Carreras, LLP is
contained in Exhibit 5
24 Power of Attorney. Reference is made to page II-5 of this
Registration Statement
99.1 1999 Stock Option Plan
99.2 Form of Notice of Grant of Stock Option
99.3 Form of Stock Option Agreement
</TABLE>
ITEM 9.UNDERTAKINGS
A. The undersigned Registrant hereby undertakes: 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
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<PAGE> 7
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 paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the 1934 Act that are
incorporated by reference into this Registration Statement; (2) that for the
purpose of determining any liability under the 1933 Act each such post-effective
amendment shall be deemed to be a new registration statement relating to the
securities offered therein and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof; and (3) to remove
from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the Registrant's 1992
Stock Option Plan, the 1992 Non-Qualified Stock Option Plan or the 1999 Stock
Option Plan.
B. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the 1933 Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
1934 Act that is incorporated by reference into this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
1933 Act may be permitted to directors, officers or controlling persons of the
Registrant pursuant to the indemnification provisions summarized in Item 6 or
otherwise, the Registrant has been advised that, in the opinion of the
Commission, such indemnification is against public policy as expressed in the
1933 Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1933 Act and
will be governed by the final adjudication of such issue.
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<PAGE> 8
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 Dulles. State of Virginia on this 6th day of
December, 1999.
FASTCOMM COMMUNICATIONS CORPORATION
By:
-------------------------------------
Peter C. Madsen
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of FastComm Communications
Corporation, a Virginia corporation, do hereby constitute and appoint Peter C.
Madsen and Mark H. Rafferty and each of them, the lawful attorneys-in-fact and
agents with full power and authority to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, and any one of
them, determine many be necessary or advisable or required to enable said
corporation to comply with the Securities Act of 1933, as amended, and any rules
or regulations or requirements of the Securities and Exchange Commission in
connection with this Registration Statement. Without limiting the generality of
the foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
that all said attorneys and agents, or any one of them, shall do or cause to be
done by virtue hereof. This Power of Attorney may be signed in several
counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
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<PAGE> 9
<TABLE>
<CAPTION>
NAME TITLE DATE
- ---- ----- ----
<S> <C> <C>
President, Chief Executive
/s/ Peter C. Madsen Officer and Director
- ------------------- (Principal Executive Officer) December 6, 1999
Peter C. Madsen
Vice President and
/s/ Mark H. Rafferty Chief Financial Officer and Director
- ------------------- (Principal Accounting Officer) December 6, 1999
Mark H. Rafferty
/s/ Edward R. Olson Director December 6, 1999
- -------------------
Edward R.Olsen
/s/ Thomas G. Amon Director December 6, 1999
- -------------------
Thomas G. Amon
</TABLE>
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<PAGE> 10
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
FASTCOMM COMMUNICATIONS CORPORATION
EXHIBIT INDEX
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
4.1 Restated Articles of Incorporation of the Company (Previously filed as
Exhibit to Form S-18, Reg. No 33-19785)
4.2 Restated By-Laws of the company, as amended (Previously filed as Exhibit to
Form S-18, Reg. No 33-19785)
4.3 Specimen Certificate of Common Stock of the Registrant (Previously filed as
Exhibit to Form S-18, Reg. No 33-19785)
5 Opinion and consent of Sokolow, Dunaud, Mercadier & Carreras, LLP
23.1 Consent of BDO Seidman, LLP Independent Accountants
23.2 Consent of Sokolow, Dunaud, Mercadier & Carreras, LLP is contained in
Exhibit 5
</TABLE>
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<PAGE> 11
<TABLE>
<S> <C>
24 Power of Attorney. Reference is made to page II-5 of this Registration
Statement
99.1 1999 Stock Option Plan
99.2 Form of Notice of Grant of Stock Option
99.3 Form of Stock Option Agreement
</TABLE>
II-8
<PAGE> 1
EXHIBIT 5
OPINION AND CONSENT OF SOKOLOW, DUNAUD, MERCADIER & CARRERAS
December 6, 1999
FastComm Communications Corporation
45472 Holiday Drive
Dulles, Virginia 20166
RE: FASTCOMM COMMUNICATIONS CORPORATION REGISTRATION STATEMENT FOR
OFFERING OF AN AGGREGATE OF 3,309,608 SHARES OF COMMON STOCK
Ladies and Gentlemen:
We have acted as counsel to FastComm Communications Corporation, a Virginia
corporation (the "Company"), in connection with the registration statement on
Form S-8 (the "Registration Statement") under the Securities Act of 1933, as
amended, of an (i) additional 1,020,372 shares of the Company's common stock
("Common Stock") authorized for issuance under the Company's 1992 Incentive
Stock Option Plan (the "Incentive Plan") (ii) an additional 789,236 shares of
the Company's Common Stock authorized for issuance under the Company's 1992
Non-Qualified Stock Option Plan (the "Non-Qualified Plan") and (iii) 1,500,000
shares of Common Stock issuable pursuant to the Company's 1999 Stock Option Plan
(collectively the "Option Plans").
This opinion is being furnished in accordance with the requirements of Item
8 of Form S-8 and Item 601(b)(5)(i) of Regulation S-K.
We have reviewed the Company's charter documents and the corporate
proceedings taken by the Company in connection with the amendment of the Option
Plans. Based on such review, we are of the opinion that, if, as and when the
shares of the Company's Common Stock are issued and sold (and the consideration
therefore received) pursuant to (i) the provisions of the option agreements duly
authorized under the Option Plans and in accordance with the Registration
Statement or (ii) direct stock issuances duly-authorized under the Option Plans
and in accordance with the Registration Statement, such shares will be duly
authorized, legally issued, fully paid and non-assessable.
We consent to the filing of this opinion letter as Exhibit 5 to the
Registration Statement.
This opinion letter is rendered as of the date first written above, and we
disclaim any obligation to advise you of facts, circumstances, events or
developments which hereafter may be brought to our attention and which may
alter, affect or modify the
II-9
<PAGE> 2
opinion expressed herein. Our opinion is expressly limited to the matters set
forth above, and we render no opinion, whether by implication or otherwise, as
to any other matters relating to the Company, the Option Plans, or the Option or
the shares of the Company's Common Stock issuable under the Plans or the Option.
Very truly yours,
------------------------------------------
SOKOLOW, DUNAUD, MERCADIER & CARRERAS, LLP
II-10
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
FastComm Communications Corporation
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of our report dated July 12, 1999, which contained an
explanatory paragraph related to the Company's ability to continue as a going
concern, relating to the consolidated financial statements of FastComm
Communications Corporation appearing in the Company's Annual Report on Form 10-K
for the year ended April 30, 1999.
BDO Seidman, LLP
Washington, D.C.
November 30, 1999
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<PAGE> 1
EXHIBIT 99.1
FASTCOMM COMMUNICATIONS CORPORATION
1999 STOCK OPTION PLAN
ARTICLE ONE
GENERAL PROVISIONS
I. PURPOSE OF THE PLAN
This 1999 Stock Option Plan is intended to promote the interests of
FastComm Communications Corporation, a Virginia corporation, by providing
eligible persons with the opportunity to acquire a proprietary interest, or
otherwise increase their proprietary interest, in the Corporation as an
incentive for them to remain in the service of the Corporation.
This Plan shall supplement the authorized share reserve under the
Corporation's 1992 Qualified and Non-Qualified Stock Option Plans (the "1992
Plans"), and share issuances under this Plan shall not reduce or otherwise
affect the number of shares of the Corporation's common stock available for
issuance under the 1992 Plans. In addition, share issuances under the 1992 Stock
Plans shall not reduce or otherwise affect the number of shares of the
Corporation's common stock available for issuance under this Plan.
Capitalized terms shall have the meanings assigned to such terms in the
attached Appendix.
II. STRUCTURE OF THE PLAN
A. The Plan shall be divided into three separate equity programs:
(i) the Discretionary Option Grant Program under which eligible
persons may, at the discretion of the Plan Administrator, be granted options to
purchase shares of Common Stock,
(ii) the Stock Issuance Program under which eligible persons may, at
the discretion of the Plan Administrator, be issued shares of Common Stock
directly, either through the immediate purchase of such shares or as a bonus for
services rendered the Corporation (or any Parent or Subsidiary), and
(iii) the Automatic Option Grant Program under which Eligible
Directors shall automatically receive option grants at periodic intervals to
purchase shares of Common Stock.
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<PAGE> 2
B. The provisions of Articles One and Five shall apply to all equity
programs under the Plan and shall accordingly govern the interests of all
persons under the Plan.
III. ADMINISTRATION OF THE PLAN
A. The Primary Committee shall have sole and exclusive authority to
administer the Discretionary Option Grant and Stock Issuance Programs with
respect to all Section 16 Insiders. Administration of the Discretionary Option
Grant and Stock Issuance Programs with respect to all other persons eligible to
participate in those programs may, at the Board's discretion, be vested in the
Primary Committee or a Secondary Committee, or the Board may retain the power to
administer those programs with respect to all such persons.
B. Members of the Primary Committee or any Secondary Committee shall serve
for such period of time as the Board may determine and may be removed by the
Board at any time. The Board may also at any time terminate the functions of any
Secondary Committee and reassume all powers and authority previously delegated
to such committee.
C. Each Plan Administrator shall, within the scope of its administrative
functions under the Plan, have full power and authority (subject to the
provisions of the Plan) to establish such rules and regulations as it may deem
appropriate for proper administration of the Discretionary Option Grant and
Stock Issuance Programs and to make such determinations under, and issue such
interpretations of, the provisions of such programs and any outstanding options
or stock issuances thereunder as it may deem necessary or advisable. Decisions
of the Plan Administrator within the scope of its administrative functions under
the Plan shall be final and binding on all parties who have an interest in the
Discretionary Option Grant or Stock Issuance Program under its jurisdiction or
any option or stock issuance thereunder.
D. Service on the Primary Committee or the Secondary Committee shall
constitute service as a Board member, and members of each such committee shall
accordingly be entitled to full indemnification and reimbursement as Board
members for their service on such committee. No member of the Primary Committee
or the Secondary Committee shall be liable for any act or omission made in good
faith with respect to the Plan or any option grants or stock issuances under the
Plan.
E. Administration of the Automatic Option Grant Program shall be
self-executing in accordance with the terms of that program, and no Plan
Administrator shall exercise any discretionary functions with respect to option
grants made thereunder.
IV. ELIGIBILITY
A. The persons eligible to participate in the Discretionary Option Grant
and Stock Issuance programs are as follows:
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<PAGE> 3
(i) Employees,
(ii) non-employee members of the Board or the board of directors of
any Parent or subsidiary, and
(iii) consultants and other independent advisors who provide services
to the Corporation (or any Parent or Subsidiary).
B. Each Plan Administrator shall, within the scope of its administrative
jurisdiction under the Plan, have full authority (subject to the provisions of
the Plan) to determine, (i) with respect to the option grants under the
Discretionary Option Grant Program, which eligible persons are to receive option
grants, the time or times when such option grants are to be made, the number of
shares to be covered by each such grant, the status of the granted option as
either an Incentive Option or a Non-Statutory Option, the time or times when
each option is to become exercisable, the vesting schedule (if any) applicable
to the option shares and the maximum term for which the option is to remain
outstanding and (ii) with respect to stock issuances under the Stock Issuance
Program, which eligible persons are to receive stock issuances, the time or
times when such issuances are to be made, the number of shares to be issued to
each participant, the vesting schedule (if any) applicable to the issued shares
and the consideration to be paid for such shares.
C. The Plan Administrator shall have the absolute discretion either to
grant options in accordance with the Discretionary Option Grant Program or to
effect stock issuances in accordance with the Stock Issuance Program.
D. The individuals eligible to participate in the Automatic Option Grant
Program shall be limited to (i) those individuals who are first elected or
appointed as non-employee Board members after the Effective Date, whether
through appointment by the Board or election by the Corporation's shareholders,
and (ii) those individuals who continue to serve as non-employee Board members
after one or more Annual Stockholders Meetings, beginning with the 1999 Annual
Meeting. A non-employee Board member who has previously been in the employ of
the Corporation (or any Parent or Subsidiary) shall not be eligible to receive
an option grant under the Automatic Option Grant Program at the time he or she
first becomes a non-employee Board member, but shall be eligible to receive
periodic option grants under the Automatic Option Grant Program while he or she
continues to serve as a non-employee Board member who is, directly or
indirectly, a 5% Stockholder or who is otherwise affiliated with, or a
representative of, a 5% Stockholder be eligible to receive any option grants
under the Automatic Option Grant Program.
V. STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares of authorized but
unissued or reacquired Common Stock, including shares repurchased by the
Corporation on the open market. The maximum number of shares of Common Stock
reserved for issuance over the term of the Plan shall not exceed 1,500,000
shares. Such share reserve
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<PAGE> 4
shall be in addition to the shares of Common Stock reserved for issuance under
the 1992 Plans and share issuances under the 1992 Plans shall have no effect
upon the number of shares of Common Stock which remain available issuance under
this Plan.
B. Shares of Common Stock subject to outstanding options under this Plan
shall be available for subsequent issuance under the Plan to the extent those
options expire or terminate for any reason prior to exercise in full. Unvested
shares issued under the Plan and subsequently cancelled or repurchased by the
Corporation, at the original issue price paid per share, pursuant to the
Corporation's repurchase rights under the Plan, shall be added back to the
number of shares of Common Stock reserved for issuance under the Plan and shall
accordingly be available for reissuance through one or more subsequent option
grants or direct stock issuances under the Plan. However, should the exercise
price of an option under the Plan be paid with shares of Common Stock or should
shares of Common Stock otherwise issuable under the Plan be withheld by the
Corporation in satisfaction of the withholding taxes incurred in connection with
the exercise of an option or the vesting of a stock issuance under the Plan,
then the number of shares of Common Stock available for issuance under the Plan
shall be reduced by the gross number of shares for which the option is exercised
or which vest under the stock issuance, and not by the net number of shares of
Common Stock issued to the holder or such option or stock issuance.
C. Should any change be made to the Common Stock by reason of any stock
split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without
the Corporation's receipt of consideration, appropriate adjustments shall be
made to (i) the maximum number and/or class of securities issuable under the
Plan, (ii) the number and/or class of securities for which any one person may be
granted stock options, separately exercisable stock appreciation rights and
direct stock issuances under this Plan per calendar year, (iii) the number
and/or class of securities for which automatic option grants are to be
subsequently made per Eligible Director under the Automatic Option Grant Program
and (iv) the number and/or class of securities and the exercise price per share
in effect under each outstanding option in order to prevent the dilution or
enlargement of benefits thereunder. The adjustments determined by the Plan
Administrator shall be final, binding and conclusive.
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<PAGE> 5
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
I. OPTION TERMS
Each option shall be evidenced by one or more documents in the form
approved by the Plan Administrator, provided, however, that each such document
shall comply with the terms specified below. Each document evidencing an
Incentive Option shall, in addition, be subject to the provisions of the Plan
applicable to such options.
A. Exercise Price
1. The exercise price per share shall be fixed by the Plan Administrator
but shall not be less than eighty-five percent (85%) of the Fair Market Value
per share of Common Stock on the option grant date.
2. The exercise price shall become immediately due upon exercise of the
option and shall, subject to the provisions of Section I of Article Five and the
documents evidencing the option, be payable in one or more of the forms
specified below:
(i) cash or check made payable to the Corporation,
(ii) shares of Common Stock held for the requisite period necessary to
avoid a charge to the Corporation's earnings for financial reporting purposes
and valued at Fair Market Value on the Exercise Date, or
(iii) to the extent the option is exercised for vested shares, through
a special sale and remittance procedure pursuant to which the Optionee shall
concurrently provide irrevocable instructions to (a) a Corporation-designated
brokerage firm to effect the immediate sale of the purchased shares and remit to
the Corporation, out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate exercise price payable for the purchased
shares plus all applicable Federal, state and local income and employment taxes
required to be withheld by the Corporation by reason of such exercise and (b)
the Corporation to deliver the certificates for the purchased shares directly to
such brokerage firm in order to complete the sale transaction.
Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.
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B. Exercise and Term of Options
Each option shall be exercisable at such time or times, during such period
and for such number of shares as shall be determined by the Plan Administrator
and set forth in the documents evidencing the option. However, no option shall
have a term in excess of ten (10) years measured from the option grant date.
C. Effect of Termination of Service
1. The following provisions shall govern the exercise of any options held
by the Optionee at the time of cessation of Service or death:
(i) Any option outstanding at the time of the Optionee's
cessation of Service for any reason shall remain exercisable for such period of
time thereafter as shall be determined by the Plan Administrator and set forth
in the documents evidencing the option, but no such option shall be exercisable
after the expiration of the option term.
(ii) Any option exercisable in whole or in part by the Optionee
at the time of death may be subsequently exercised by the personal
representative of the Optionee's estate or by the person or persons to whom the
option is transferred pursuant to the Optionee's will or in accordance with the
laws of descent and distribution.
(iii) During the applicable post-Service exercise period, the
option may not be exercised in the aggregate for more than the number of vested
shares for which the option is exercisable on the date of the Optionee's
cessation of Service. Upon the expiration of the applicable exercise period or
(if earlier) upon the expiration of the option term, the option shall terminate
and cease to be outstanding for any vested shares for which the option has not
been exercised. However, the option shall, immediately upon the Optionee's
cessation of Service, terminate and cease to be outstanding with respect to any
shares in which the Optionee is not vested on the date of such cessation of
Service.
(iv) Should the Optionee's Service be terminated for Misconduct,
then all outstanding options held by the Optionee shall terminate immediately
and cease to be outstanding.
2. The Plan Administrator shall have the discretion, exercisable either at
the time an option is granted or at any time while the option remains
outstanding, to:
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(i) extend the period of time for which the option is to remain
exercisable following the Optionee's cessation of Service from the period
otherwise in effect for that option to such greater period of time as the Plan
Administrator shall deem appropriate, but in no event beyond the expiration of
the option term, and/or
(ii) permit the option to be exercised, during the applicable
post-Service exercise period, not only with respect to the number of vested
shares of Common Stock for which such option is exercisable at the time of the
Optionee's cessation of Service but also with respect to one or more additional
installments in which the Optionee would have vested under the option had the
Optionee continued in Service.
D. Shareholder Rights
The holder of an option shall have no shareholder rights with respect to
the shares subject to the option until such person shall have exercised the
option, paid the exercise price and become a holder of records of the purchased
shares.
E. Repurchase Rights
The Plan Administrator shall have the discretion to grant options which are
exercisable for unvested shares of Common Stock. Should the Optionee cease
Service while holding such unvested shares, the Corporation shall have the right
to repurchase, at the exercise price paid per share, any or all of those
unvested shares. The terms upon which such repurchase right shall be exercisable
(including the period and procedure for exercise and the appropriate vesting
schedule for the purchased shares) shall be established by the Plan
Administrator and set forth in the document evidencing such repurchase right.
F. Limited Transferability of Options
During the lifetime of the Optionee, Incentive Options shall be exercisable
only by the Optionee and shall not be assignable or transferable other than by
will or by the laws of descent and distribution following the Optionee's death.
Non-Statutory Options shall be subject to the same transfer restrictions, except
that a Non-Statutory Option may, in connection with the Optionee's estate plan,
be assigned in whole or in part during the Optionee's lifetime to one or more
members of the Optionee's immediate family or to a trust established exclusively
for one or more such family members. The assigned portion may only be exercised
by the person or persons who acquire a proprietary interest in the option
pursuant to the assignment. The terms applicable to the assigned portion shall
be the same as those in effect for the option immediately prior to such
assignment and shall be set forth in such documents issued to the assignee as
the Plan Administrator may deem appropriate.
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II. INCENTIVE OPTIONS
The terms specified below shall be applicable to all Incentive Options.
Except as modified by the provisions of this Section II, all the provisions of
Articles One, Two and Five shall be applicable to Incentive Options. Options
which are specifically designated as Non-Statutory Options when issued under the
Plan shall not be subject to the terms of this Section II.
A. Eligibility
Incentive Options may only be granted to Employees.
B. Exercise price
The exercise price per share shall not be less than one hundred percent
(100%) of the Fair Market Value per share of Common Stock on the option grant
date.
C. Dollar Limitation
The aggregate Fair Market Value of the shares of Common Stock (determined
as of the respective date or dates of grant) for which one or more options
granted to any Employee under the Plan (or any other option plan of the
Corporation or any Parent or Subsidiary) may for the first time become
exercisable as Incentive Options during any one (1) calendar year shall not
exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the
Employee holds two (2) or more such options which become exercisable for the
first time in the same calendar year, the foregoing limitation on the
exercisability of such options as Incentive Options shall be applied on the
basis of the order in which such options are granted.
D. 10% Stockholder
If any Employee to whom an Incentive Option is granted is a 10%
Stockholder, then the exercise price per share shall not be less than one
hundred ten percent (110%) of the Fair Market Value per share of Common Stock on
the option grant date, and the option term shall not exceed five (5) years
measured from the option grant date.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. In the event of any Corporation Transaction, each outstanding option
shall automatically accelerate so that each such option shall, immediately prior
to the effective date of the Corporate Transaction, become fully exercisable for
any or all of those shares as fully-vested shares of Common Stock.
B. All outstanding repurchase rights shall terminate automatically, and
the shares of Common Stock subject to those terminated rights shall immediately
vest in full,
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in the event of any Corporate Transaction.
C. Immediately following the consummation of the Corporate Transaction,
all outstanding options shall terminate and cease to be outstanding, except to
the extent covered by Section A or B above.
D. The Plan Administrator shall have the discretion, exercisable either
at the time the option is granted or at any time while the option remains
outstanding, to provide for the automatic acceleration of one or more
outstanding options (and the automatic termination of one or more outstanding
repurchase rights with the immediate vesting of the shares of Common Stock
subject to those rights) upon the Involuntary Termination of the Optionee's
Service within a specified period (not to exceed eighteen (18) months) following
the effective date of a Change in Control. Any options so accelerated shall
remain fully exercisable until the expiration or sooner termination of the
option term.
E. The portion of any Incentive Option accelerated in connection with a
Corporate Transaction or Change in Control shall remain exercisable as an
Incentive Option only to the extent the applicable One Hundred Thousand Dollar
limitation is not exceeded. To the extent such dollar limitation is exceeded,
the accelerated portion of such option shall be exercisable as a Non-Statutory
Option under the Federal tax laws.
F. The grant of options under the Discretionary Option Grant Program
shall in no way affect the right of the Corporation to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
IV. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any time and
from time to time, with the consent of the affected option holders, the
cancellation of any or all outstanding options under the Discretionary Option
Grant Program and to grant in substitution new options covering the same or
different number of shares of Common Stock but with an exercise price per share
based on the Fair Market Value per share of Common Stock on the new option grant
date.
V. STOCK APPRECIATION RIGHTS
A. The Plan Administrator shall have full power and authority to grant to
selected Optionees tandem stock appreciation rights and/or limited stock
appreciation rights.
B. The following terms shall govern the grant and exercise of tandem stock
appreciation rights:
(i) One or more Optionees may be granted the right, exercisable upon
such terms as the Plan Administrator may establish, to elect
between the exercise of the underlying option for shares of
Common Stock and the
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surrender of that option in exchange for a distribution from the
Corporation in an amount equal to the excess of (a) the Fair
Market Value (on the option surrender date) of the number of
shares in which the Optionee is at the time vested under the
surrendered option (or surrendered portion thereof) over (b) the
aggregate exercise price payable for such shares.
(ii) No such option surrender shall be effective unless it is approved
by the Plan Administrator, either at the time of the option
surrender or at any earlier time. If the surrender is so
approved, then the distribution to which the Optionee shall be
entitled may be made in shares of Common Stock valued at Fair
Market Value on the option surrender date, in cash, or partly in
shares and partly in cash, as the Plan Administrator shall in its
sole discretion deem appropriate.
(iii) If the surrender of an option is rejected by the Plan
Administrator, then the Optionee shall retain whatever rights the
Optionee had under the surrender option (or surrendered portion
thereof) on the option surrender date and may exercise such
rights at any time prior to the later of (a) five (5) business
days after the receipt of rejection notice or (b) the last day on
which the option is otherwise exercisable in accordance with the
terms of the documents evidencing such option, but in no event
may such rights be exercised more than ten (10) years after the
option grant date.
C. The following terms shall govern the grant and exercise of limited stock
appreciation rights:
(i) One or more Section 16 Insiders may be granted limited stock
appreciation rights with respect to their outstanding options.
(ii) Upon the occurrence of a Hostile Take-Over, each such individual
holding one or more options with such a limited stock
appreciation right shall have the unconditional right
(exercisable for a thirty (30) -day period following such Hostile
Take-Over) to surrender each such option to the Corporation, to
the extent the option is at the time exercisable for vested
shares of Common Stock. In return for the surrendered option, the
Optionee shall receive a cash distribution from the Corporation
in an amount equal to the excess of (A) the Take-over price of
the shares of Common Stock which are at the time vested under
each surrendered option (or surrendered portion thereof) over (B)
the aggregate exercise price payable for such shares. Such cash
distribution shall be paid within five (5) days following the
option surrender date.
(iii) The grant of such limited stock appreciation right shall
automatically constitute the pre-approval by the Plan
Administrator of the any subsequent exercise of that right in
accordance with the terms of this
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Paragraph C. Accordingly, no further approval of the Plan
Administrator or the Board shall be required at the time of the
actual surrender of such option and the cash distribution to
which the optionee shall thereupon become entitled.
(iv) The balance of the option (if any) shall continue in full force
and effect in accordance with the documents evidencing such
option.
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<PAGE> 12
ARTICLE THREE
STOCK ISSUANCE PROGRAM
I. STOCK ISSUANCE TERMS
Shares of Common Stock may be issued under the Stock Issuance Program
through direct and immediate issuances without any intervening option grants.
Each such stock issuance shall be evidenced by a Stock Issuance Agreement which
complies with the terms specified below.
A. Purchase Price
1. The purchase price per share shall be fixed by the Plan Administrator,
but shall not be less than eighty five per cent (85%) of the Fair Market Value
per share of Common Stock on the issuance date.
2. Subject to the provisions of Section I of Article Five, shares of Common
Stock may be issued under the Stock Issuance Program for any of the following
items of consideration which the Plan Administrator may deem appropriate in each
individual instance:
(i) cash or check made payable to the Corporation, or
(ii) past services rendered to the Corporation (or any Parent or
Subsidiary).
B. Vesting Provisions
1. Shares of Common Stock issued under the Stock Issuance Program may, in
the discretion of the Plan Administrator, be fully and immediately vested upon
issuance or may vest in one or more installments over the Participant's period
of Service or upon attainment of specified performance objectives. The elements
of the vesting schedule applicable to any unvested shares of Common Stock listed
under the Stock Issuance Program, namely:
(i) the Service period to be completed by the Participant or the
performance objectives to be attained,
(ii) the number of installments in which the shares are to vest,
(iii) the interval or intervals (if any) which are to lapse between
installments, and
(iv) the effects which death, Permanent Disability or other event
designated by the Plan Administrator is to have upon the vesting
schedule,
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shall be determined by the Plan Administrator and incorporated into the Stock
Issuance Agreement.
2. Any new, substituted or additional securities or other property
(including money paid other than as a regular cash dividend) which the
Participant may have the right to receive with respect to the Participants
unvested shares of Common Stock by reason of any stock dividend, stock split,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation's
receipt of consideration shall be issued subject to (i) the same vesting
requirements applicable to the Participant's unvested shares of Common Stock and
(ii) such escrow arrangements as the Plan Administrator shall deem appropriate.
3. The Participant shall have full shareholder rights with respect to any
shares of Common Stock issued to the Participant under the Stock Issuance
Program, whether or not the Participant's interest in those shares is vested.
Accordingly, the Participant shall have the right to vote such shares and to
receive any regular cash dividends paid on such shares.
4. Should the Participant cease to remain in Service while holding one or
more unvested shares of Common Stock issued under the Stock Issuance Program or
should the performance objectives not be attained with respect to one or more
such unvested shares of Common Stock, then those shares shall be immediately
surrendered to the Corporation for cancellation, and the Participant shall have
no further shareholder rights with respect to those shares. To the extent the
surrendered shares were previously issued to the Participant for consideration
paid in cash or cash equivalent (including the Participant's purchase-money
indebtedness), the Corporation shall repay to the participant the cash
consideration paid for the surrendered shares and shall cancel the unpaid
principal balance of any outstanding purchase-money note of the Participant
attributable to such surrendered shares.
5. The Plan Administrator may in its discretion waive the surrender and
cancellation of one or more unvested shares of Common Stock (or other assets
attributable thereto) which would otherwise occur upon the cessation of the
Participant's Service or the non-completion of the vesting schedule applicable
to such shares. Such waiver shall result in the immediate vesting of the
Participant's interest in the shares of Common Stock as to which the waiver
applies. Such waiver may be effected at any time, whether before or after the
Participant's cessation of Service or the attainment of non- attainment of the
applicable performance objectives.
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<PAGE> 14
II CORPORATE TRANSACTION/CHANGE IN CONTROL
A. All of the outstanding repurchase rights under the Stock Issuance
Program shall terminate automatically, and all the shares of Common Stock
subject to those terminated rights shall immediately vest in full, in the event
of an Corporate Transaction.
B. The Plan Administrator shall have the discretion, exercisable either at
the time the unvested shares are issued or at any time while the Corporation's
repurchase right remains outstanding, to provide for the automatic termination
of one or more outstanding repurchase rights and the immediate vesting of the
shares of Common Stock subject to those rights upon the Involuntary Termination
of the Participant's Service within a specified period (not to exceed eighteen
(18) months) following the effective date of any Change in Control.
III. SHARE ESCROW/LEGENDS
Unvested shares may, in the Plan Administrator's discretion, be held in
escrow by the Corporation until the Participant's interest in such shares vests
or may be issued directly to the Participant with restrictive legends on the
certificates evidencing those unvested shares.
ARTICLE FOUR
AUTOMATIC OPTION GRANT PROGRAM
I. OPTION TERMS
A. SUCCESSOR PROGRAM. Shareholder approval of this Plan at the 1999 Annual
Meeting shall also constitute approval of all option grants made to Eligible
Directors pursuant to the provisions of this Automatic Option Grant Program.
B. GRANT DATES. Option grants shall be made under the Plan on the dates
specified below:
1. Each Eligible Director who is first elected or appointed as a
non-employee Board member after the Effective Date shall automatically be
granted, on the date of such initial election or appointment, a Non-Statutory
Option to purchase 30,000 shares of Common Stock.
2. On the date of each Annual Shareholder Meeting, beginning with the
1999 Annual Meeting, each individual who is to continue to serve as an Eligible
Director after such meeting, shall automatically be granted, whether or not such
individual is standing for re-election as a Board member at that Annual Meeting,
a Non-Statutory Option to purchase an additional 30,000 shares of Common Stock,
provided such individual has served as a non-employee Board member for at least
six (6) months prior to the date of such Annual Meeting. There shall be no limit
on the number of such 30,000 share option
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<PAGE> 15
grants any one Eligible Director may receive over his or her period of Board
service.
C. EXERCISE PRICE.
1. The exercise price per share shall be equal to one hundred
percent (100%) of the Fair Market Value per share of Common Stock on the option
grant date.
2. The exercise price shall be payable in one or more of the
alternative forms authorized under the Discretionary Option Grant Program.
Except to the extent the sale and remittance procedure specified thereunder is
utilized, payment of the exercise price for the purchased shares must be made on
the Exercise Date.
D. OPTION TERM. Each option shall have a term of ten (10) years
measured from the option grant date.
E. EXERCISE AND VESTING OF OPTIONS. Each option shall be exercisable
for one third of the options granted annually, commencing one year after the
date of grant. However, any shares purchased under the option shall be subject
to repurchase by the corporation, at the exercise price paid per share, upon the
Optionee's cessation of Board service prior to vesting in those shares. The
shares subject to each initial grant shall vest, in a series of three (3)
successive equal annual installments over the Optionee's period of continued
service as a Board member, with the first such installment to vest upon the
Optionee's completion of one (1) year of Board service measured from the option
grant date. The shares subject to each annual grant shall vest, and the
Corporation's repurchase right with respect to those shares shall lapse, on the
day immediately preceding the date of the next Annual Shareholders Meeting
following the grant date, provided the Optionee continues in Board service
through such day.
F. EFFECT OF TERMINATION OF BOARD SERVICE. The following provisions
shall govern the exercise of any options held by the Optionee at the time the
Optionee ceases to serve as a Board member.
(i) The Optionee (or, in the event of Optionee's death, the personal
representative of the Optionee's estate or the person or persons to whom
the option is transferred pursuant to the Optionee's will or in accordance
with the laws of descent and distribution) shall have a twelve (12)-month
period following the date of such cessation of Board service in which to
exercise each such option.
(ii) During the twelve (12)-month exercise period, the option may
not be exercised in the aggregate for more than the number of vested shares
of Common Stock for which the option is exercisable at the time of the
Optionee's cessation of Board service.
(iii) Should the Optionee cease to serve as a Board member by reason
of death or Permanent Disability, then all shares at the time subject to the
option shall immediately vest so that such option may, during the twelve
(12)-month exercise period
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<PAGE> 16
following such cessation of Board service, be exercised for all or any portion
of such shares as fully-vested shares of Common Stock.
(iv) In no event shall the option remain exercisable after the
expiration of the option term. Upon the expiration of the twelve (12)-month
exercise period or (if earlier) upon the expiration of the option term, the
option shall terminate and cease to be outstanding for any vested shares for
which the option has not been exercised. However, the option shall, immediately
upon the Optionee's cessation of Board service, terminate and cease to be
outstanding with respect to any shares in which the Optionee is not bested on
the date of such cessation of Board service.
II. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-0VER
A. In the event of any Corporate Transaction, the shares of Common Stock at
the time subject to each outstanding option under the Automatic Option Grant
Program but not otherwise vested shall automatically vest in full so that each
such option shall, immediately prior to the effective date of the Corporate
Transaction, become exercisable for all of the shares of Common Stock at the
time subject to such option and may be exercised for all or any portion of such
shares as fully-vested shares of Common Stock.
B. In the event of any Change in Control, the shares of Common Stock at the
time subject to each outstanding option but not otherwise vested shall
automatically vest in full so that each such option shall, immediately prior to
the effective date of the Change in Control, become exercisable for all of the
shares of Common Stock at the time subject to such option and may be exercised
for all or any portion of such shares as fully-vested shares of Common Stock.
C. Upon the occurrence of a Hostile Take-Over, the Optionee shall have a
thirty (30)-day period in which to surrender to the Corporation each option
grant held by him or her under this Automatic Option Grant Program. The Optionee
shall in return be entitled to a cash distribution from the Corporation in an
amount equal to the excess of (i) the Take-Over price of the shares of Common
Stock at the time subject to the surrendered option (whether or not the Optionee
is otherwise at the time vested in those shares) over (ii) the aggregate
exercise price payable for such shares. Such cash distribution shall be paid
within five (5) days following the surrender of the option to the Corporation.
Such surrender right shall form a part of each option grant made under this
Automatic Option Grant Program, and shareholder approval of this Plan shall
constitute pre-approval of this Paragraph C. Accordingly, no approval of the
Board or the Plan Administrator shall be required at the time of the actual
option surrender and the cash distribution to which the optionee shall thereupon
become entitled.
D. The grant of options under the Automatic Option Grant Program shall in
no way affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.
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<PAGE> 17
III. REMAINING TERMS
The remaining terms of each option granted under the Automatic Option Grant
Program shall be the same as the terms in effect for option grants made under
the Discretionary Option Grant Program.
ARTICLE FIVE
MISCELLANEOUS
I. FINANCING
A. The Plan Administrator may permit any Optionee or Participant to pay the
option exercise price under the Discretionary Option Grant Program or the
purchase price for shares issued under the Stock Issuance Program by delivering
a promissory note payable in one or more installments. The terms of any such
promissory note (including the interest rate and the terms of repayment) shall
be established by the Plan Administrator in its sole discretion. Promissory
notes may be authorized with or without security or collateral. In all events,
the maximum credit available to the Optionee or Participant may not exceed the
sum of (i) the aggregate option exercise price or purchase price payable for the
purchased shares plus (ii) any Federal, state and local income and employment
tax liability incurred by the Optionee or the Participant in connection with the
option exercise or share purchase.
B. The Plan Administrator may, in its discretion, determine that one or
more such promissory notes shall be subject to forgiveness by the Corporation in
whole or in part upon such terms as the Plan Administrator may deem appropriate.
II. TAX WITHHOLDING
A. The Corporation's obligation to deliver shares of Common Stock upon the
exercise of options or stock appreciation rights or upon the issuance or vesting
of such shares under the Plan shall be subject to the satisfaction of all
applicable Federal, state and local income and employment tax withholding
requirements.
B. The Plan Administrator may, in its discretion, provide any or all
holders of Non-Statutory Options or unvested shares of Common Stock under the
Plan (other than the options granted or the shares issued under the Automatic
Option Grant Program) with the right to use shares of Common Stock in
satisfaction of all or part of the Taxes incurred by such holders in connection
with the exercise of their options or the vesting of their shares. Such right
may be provided to any such holder in either or both of the following formats:
(i) Stock Withholding: The election to have the Corporation withhold,
from the shares of Common Stock otherwise issuable upon the exercise of
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<PAGE> 18
such Non-Statutory Option or the vesting of such shares, a portion of those
shares with an aggregate Fair Market Value equal to the percentage of the
Taxes (not to exceed one hundred percent (100%)) designated by the holder.
(ii) Stock Delivery: The election to deliver to the Corporation, at
the time the Non-Statutory Option is exercised or the shares vest, one or
more shares of Common Stock previously acquired by such holder (other than
in connection with the option exercise or shares vesting triggering the
Taxes) with an aggregate Fair Market Value equal to the percentage of the
Taxes (not to exceed one hundred percent (100%)) designated by the holder.
III. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan became effective on the Effective Date. However, no options
granted under the Plan may be exercised, and no shares shall be issued under the
Plan, until the Plan is approved by the Corporation's shareholders. If such
shareholder approval is not obtained within twelve (12) months after the
Effective Date, then all options previously granted under this Plan shall
terminate and cease to be outstanding, and no further options shall be granted
and no shares shall be issued under the Plan.
B. The Plan was adopted by the Board on July 26, 1999 subject to
shareholder approval.
C. The Plan shall terminate upon the earliest of (i) October 29, 2009, (ii)
the date on which all shares available for issuance under the Plan shall have
been issued as vested shares pursuant to the exercise of options or the issuance
of shares under the Plan or (iii) the termination of all outstanding options in
connection with a Corporate Transaction. Should this Plan terminate on October
29, 2009, then all options and unvested stock issuances outstanding on such date
shall thereafter continue to have force and effect in accordance with the
provisions of the documents evidencing such options or issuances.
IV. AMENDMENT OF THE PLAN
A. The Board shall have complete and exclusive power and authority to amend
or modify the Plan in any or all respects. However, no such amendment or
modification shall adversely affect the rights and obligations with respect to
stock options, stock appreciation rights or unvested stock issuances at the time
outstanding under the Plan unless the Optionee or the Participant consents to
such amendment or modification. In addition, certain amendments may require
shareholder approval pursuant to applicable law or regulations.
B. Options to purchase shares of Common Stock may be granted under the
Discretionary Option Grant Program and shares of Common Stock may be issued
under the Stock Issuance Program that are in each instance, in excess of the
number of shares then available for issuance under the Plan, provided any excess
shares actually issued under those programs are held in escrow until there is
obtained shareholder approval of
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an amendment sufficiently increasing the number of shares of Common Stock
available for issuance under the Plan. If such shareholder approval is not
obtained within twelve (12) months after the date the first such excess
issuances are made, then (i) any unexercised options granted on the basis of
such excess shares shall terminate and cease to be outstanding and (ii) the
Corporation shall promptly refund to the Optionees and the Participants the
exercise or purchase price paid for any excess shares issued under the Plan and
held in escrow, together with interest (at the applicable Short Term Federal
Rate) for the period the shares were held in escrow, and such shares shall
thereupon be automatically cancelled and cease to be outstanding.
V. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares of
Common Stock under the Plan shall be used for general corporate purposes.
VI. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any option or stock
appreciation right under the Plan and the issuance of any shares of Common Stock
(i) upon the exercise of any option or stock appreciation right or (ii) under
the Stock Issuance Program shall be subject to the Corporation's procurement of
all approvals and permits required by regulatory authorities having jurisdiction
over the Plan, the options and stock appreciation rights granted under it and
the shares of Common Stock issued pursuant to it.
B. No shares of Common Stock or assets shall be issued or delivered under
the Plan unless and until there shall have been compliance with all applicable
requirements of Federal and state securities laws, including the filing and
effectiveness of the Form S-8 registration statement for the shares of Common
Stock issuable under the Plan, and all applicable listing requirements of any
stock exchange (or the Nasdaq National Market, if applicable) on which Common
Stock is then listed for trading.
VII. NO EMPLOYMENT/SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee or the Participant any
right to continue in Service for any period of specific duration or interfere
with or otherwise restrict in any way the rights of the Corporation (or any
Parent or Subsidiary employing or retaining such person) or of the Optionee or
the Participant, which rights are hereby expressly reserved by each, to
terminate such person's Service at any time for any reason, with or without
cause.
APPENDIX
The following definitions shall be in effect under the Plan:
A. AUTOMATIC OPTION GRANT PROGRAM shall mean the automatic
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option grant program in effect under the Plan.
B. BOARD shall mean the Corporation's Board of Directors.
C. CHANGE IN CONTROL shall mean a change in ownership or control of the
Corporation effected through either of the following transactions:
(i) the acquisition, directly or indirectly, by any person or related
group of persons (other than the Corporation or a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Corporation), of beneficial ownership (within the meaning of Rule 13d-3 of
the 1934 Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Corporation's outstanding securities
pursuant to a tender or exchange offer made directly to the Corporation's
shareholders, or
(ii) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the
Board members ceases, by reason of one or more contested elections for
Board members, to be comprised of individuals who either (A) have been
Board members continuously since the beginning of such period or (B) have
been elected or nominated for election as Board members during such period
by at least a majority of the Board members described in clause (A) who
were still in office at the time the Board approved such election or
nomination.
D. CODE shall mean the Internal Revenue Code of 1986, as amended.
E. COMMON STOCK shall mean the Corporation's common stock.
F. CORPORATE TRANSACTION shall mean either of the following
shareholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing more than
fifty percent (50%) of the total combined voting power of the Corporation's
outstanding securities are transferred to a person or persons different
from the persons holding those securities immediately prior to such
transaction; or
(ii) the sale, transfer or other disposition of all or substantially
all of the Corporation's assets in complete liquidation or dissolution of
the Corporation.
G. CORPORATION shall mean FASTCOMM COMMUNICATIONS CORPORATION, a
Virginia corporation.
H. DISCRETIONARY OPTION GRANT PROGRAM shall mean the discretionary
option grant program in effect under the Plan.
I. EFFECTIVE DATE shall mean July 26, 1999
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<PAGE> 21
J. ELIGIBLE DIRECTOR shall mean a non-employee Board member eligible to
participate in the Automatic Option Grant Program in accordance with the
eligibility provisions of Article One.
K. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
L. EXERCISE DATE shall mean the date on which the Corporation shall
have received written notice of the option exercise.
M. FAIR MARKET VALUE per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq National
Market, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question, as such price is reported by
the National Association of Securities Dealers on the Nasdaq National
Market. If there is no closing selling price for the Common Stock on the
date in question, then the Fair Market Value shall be the closing selling
price on the last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock Exchange,
then the Fair Market Value shall be the closing selling price per share of
Common Stock on the date in question on the Stock Exchange determined by
the Plan Administrator to be the primary market for the Common Stock, as
such price is officially quoted in the composite tape of transactions on
such exchange. If there is no closing selling price for the Common Stock on
the date in question, then the Fair Market Value shall be the closing
selling price on the last preceding date for which such quotation exists.
N. 5% SHAREHOLDER shall mean the owner of securities (as determined
under Code Section 424(d)) possessing more than five percent (5%) of the total
combined voting power of the outstanding securities of the Corporation (or any
Parent or Subsidiary).
O. HOSTILE TAKE-OVER shall mean the acquisition, directly or
indirectly, by any person or related group of persons (other than the
Corporation or a person that directly or indirectly controls, is controlled by,
or is under common control with, the Corporation) of beneficial ownership
(within the meaning of Rule 13D-3 of the 1934 Act) of securities possessing more
than fifty percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly to
the Corporation's shareholders which the Board does not recommend such
shareholders to accept.
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<PAGE> 22
P. INCENTIVE OPTION shall mean an option which satisfies the
requirements of Code Section 422.
Q. INVOLUNTARY TERMINATION shall mean the termination of the Service of
any individual which occurs by reason of such individual's involuntary dismissal
or discharge by the Corporation for reasons other than Misconduct.
R. MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by the Optionee or Participant, any unauthorized use
or disclosure by such person of confidential information or trade secrets of the
Corporation (or any Parent or Subsidiary), or any other intentional misconduct
by such person adversely affecting the business or affairs of the Corporation
(or any Parent or Subsidiary) in a material manner. The foregoing definition
shall not be deemed to be inclusive of all the acts or omissions which the
Corporation (or Parent or Subsidiary) may consider as grounds for the dismissal
or discharge of any Optionee, Participant or other person in the Service of the
Corporation (or any Parent or Subsidiary).
S. 1934 ACT shall mean the Securities Exchange Act of 1934, as amended.
T. NON-STATUTORY OPTION shall mean an option not intended to satisfy
the requirements of Code Section 422.
U. OPTIONEE shall mean any person to whom an option is granted under
the Discretionary Option Grant or Automatic Option Grant Program.
V. PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
W. PARTICIPANT shall mean any person who is issued shares of Common
Stock under the Stock Issuance Program.
X. PERMANENT DISABILITY OR PERMANENTLY DISABLED shall mean the
inability of the Optionee or the Participant to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment expected to result in death or to be of continuous duration of twelve
(12) months or more. However, solely for the purposes of the Automatic Option
Grant Program, Permanent Disability or Permanently Disabled shall mean the
inability of the non-employee Board member to perform his or her usual duties as
a Board member by reason of any medically determinable physical or mental
impairment expected to result in death or to be of continuous duration of twelve
(12) months or more.
Y. PLAN shall mean the Corporation's 1999 Stock Option Plan, as set
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<PAGE> 23
forth in this document.
Z. PLAN ADMINISTRATOR shall mean the particular entity, whether the
Primary Committee, the Board or the Secondary Committee, which is authorized to
administer the Discretionary Option Grant and Stock Issuance Programs with
respect to one or more classes of eligible persons, to the extent such entity is
carrying out its administrative functions under those programs with respect to
the persons under its jurisdiction.
AA. PRIMARY COMMITTEE shall mean the committee of two (2) or more
non-employee Board members appointed by the Board to administer the
Discretionary Option Grant and Stock Issuance Programs with respect to Section
16 Insiders.
BB. SECONDARY COMMITTEE shall mean a committee of one (1) or more Board
members appointed by the Board to administer the Discretionary Option Grant and
Stock Issuance Programs with respect to eligible persons other than Section 16
Insiders.
CC. SECTION 16 INSIDER shall mean an officer or director of the
Corporation subject to the short-swing profit liabilities of Section 16 of the
1934 Act.
DD. SERVICE shall mean the performance of services for the Corporation
(or any Parent or Subsidiary) by a person in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor, except to the extent otherwise specifically provided in the documents
evidencing the option grant or stock issuance.
EE. STOCK EXCHANGE shall mean either the American Stock Exchange or the
New York Stock Exchange.
FF. STOCK ISSUANCE AGREEMENT shall mean the agreement entered into by
the Corporation and the Participant at the time of issuance of shares of Common
Stock under the Stock Issuance Program.
GG. STOCK ISSUANCE PROGRAM shall mean the stock issuance program in
effect under the Plan.
HH. SUBSIDIARY shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one or the other
corporations in such chain. For purposes of the grant of Non-Statutory Options
and stock appreciation rights under the Discretionary Option Grant Program and
direct stock issuances under the Stock Issuance Program, the term Subsidiary
shall also include any corporation, partnership, joint venture or other business
entity in which the Corporation owns, directly or indirectly, stock or a capital
or profit interest.
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<PAGE> 24
II. TAKE-OVER PRICE shall mean the greater of (i) the Fair Market Value
per share of Common Stock on the date the option is surrendered to the
Corporation in connection with a Hostile Take-Over or (ii) the highest reported
price per share of Common Stock paid by the tender offeror in effecting such
Hostile Take-Over. However, if the surrendered option is an Incentive Option,
the Take-Over Price shall not exceed the clause (i) price per share.
JJ. TAXES shall mean the Federal, state and local income and employment
tax liabilities incurred by the holder of Non-Statutory Options or unvested
shares of Common Stock in connection with the exercise of those options or the
vesting of those shares.
KK. 10% SHAREHOLDER shall mean the owner of stock (as determined under
Code Section 424(d)) possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Corporation (or any Parent
or Subsidiary).
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<PAGE> 1
EXHIBIT 99.2
FASTCOMM COMMUNICATIONS CORPORATION
FORM OF NOTICE OF GRANT OF STOCK OPTION
Notice is hereby given of the following option grant (the "Option") to
purchase shares of the Common Stock of FastComm Communications Corporation (the
"Corporation"):
Optionee: ---------------------------------------------
Grant Date: ---------------------------------------------
Vesting Commencement Date: ---------------------------------------------
Exercise Price: ---------------------------------------------
Number of Option Shares: ---------------------------------------------
Expiration Date: ---------------------------------------------
Type of Option: ---------------------------------------------
Installment Exercise Schedule: The Option shall become exercisable for
thirty-three percent (33%) of the Option Shares upon the Optionee's completion
of twelve (12) full months of Service measured from the Vesting Commencement
Date. The Option shall become exercisable for the balance of the Option Shares
in a series of two (2) successive equal annual installments upon Optionee's
completion of each additional full year of Service over the two year (2) period
measured from the first anniversary of the Vesting Commencement Date. In no
event shall any additional Option Shares vest after Optionee's cessation of
Service.
The Option shall be governed by terms and conditions of the 1999 Stock
Option Plan (the "Plan"). Optionee further agrees to be bound by the terms of
the Option as set forth in the Stock Option Agreement attached hereto as Exhibit
A.
Optionee hereby further acknowledges receipt of a copy of the official
prospectus for the Plan in the form attached hereto as Exhibit B. A copy of the
Plan is available upon request made to the Corporate Secretary at the
Corporation's principal offices.
No Employment or Service Contract. Nothing in this Notice or in the
attached Stock Option Agreement shall confer upon Optionee any right to continue
in Service for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Corporation (or any Parent or Subsidiary
employing or retaining Optionee) or of Optionee, which rights are hereby
expressly reserved by each, to terminate Optionee's
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<PAGE> 2
Service at any time for any reason, with or without cause.
Definitions. All capitalized terms in this Notice shall have the meaning
assigned to them in this Notice or in the attached Stock Option Agreement.
FastComm Communications Corporation
By:
- ----------------,----- ------------------------------
Title: President and CEO
------------------------------------,
OPTIONEE
Address:
-----------------------------
-------------------------------------
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<PAGE> 1
EXHIBIT 99.3
OFFICER GRANT
FASTCOMM COMMUNICATIONS CORPORATION
FORM OF STOCK OPTION AGREEMENT
RECITALS
A. The Compensation Committee of the Board has authorized an option
grant to ______________________ (the "Optionee") in connection with the services
he is to perform for the Corporation (or a Parent or Subsidiary), and this
Agreement is intended to evidence the terms and conditions of that option grant.
B. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Corporation hereby grants to Optionee, as of
the Grant Date, an option to purchase up to the number of Option Shares
specified in the Grant Notice. The Option Shares shall be purchasable form time
to time during the option term specified in Paragraph 2 at the Exercise Price.
2. OPTION TERM. This option shall have a term of no greater than ten
(10) years measured from the Grant Date and shall accordingly expire at the
close of business on the Expiration Date, unless sooner terminated in accordance
with Paragraph 5 or 6.
3. LIMITED TRANSFERABILITY. This option shall be neither transferable
nor assignable by Optionee other than by will or by the laws of descent and
distribution following Optionee's death and may be exercised, during Optionee's
lifetime, only by Optionee. However, this option may also be assigned in whole
or in part during the Optionee's lifetime to one or more members of the
Optionee's immediate family or to a trust established exclusively for one or
more such family members. The assigned portion may only be exercised by the
person or persons who acquire a proprietary interest in the option pursuant to
the assignment. The terms applicable to the assigned portion shall be the same
as those in effect for the option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Plan Administrator
may deem appropriate.
4. DATES OF EXERCISE. This option shall become exercisable for the
Option Shares in a series of installments as specified in the Grant Notice. As
the option becomes exercisable for such installments, those installments shall
accumulate, and the option shall remain exercisable for the accumulated
installments until the Expiration Date
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<PAGE> 2
or sooner termination of the option term under Paragraph 5 or 6.
5. CESSATION OF SERVICE. The option term specified in Paragraph 2
shall terminate (and this option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:
(i) Should Optionee cease to remain in Service for any reason (other
than death, Permanent Disability or Misconduct) while this option is
outstanding, then the period during which this option may be exercised
shall be limited to the one (1)-month period commencing with the date of
such cessation of Service, but in no event shall this option be exercisable
at any time after the Expiration Date.
(ii) Should Optionee die while holding this option, then the personal
representation of Optionee's estate or the person or persons to whom the
option is transferred pursuant to Optionee's will or in accordance with the
laws of descent and distribution shall have the right to exercise this
option. Such right shall lapse, and this option shall cease to be
outstanding, upon the earlier of (A) the expiration of the twelve
(12)-month period measured from the date of Optionee's death or (B) the
Expiration Date.
(iii) Should Optionee cease Service by reason of Permanent Disability
while this option is outstanding, then the period during which this option
may be exercised shall be limited to the twelve (12)-month period
commencing with the date of such cessation of Service. In no event shall
this option be exercisable at any time after the Expiration Date.
(iv) Should Optionee's Service be terminated for Misconduct or should
Optionee otherwise engage in any Misconduct while this option is
outstanding, then this option shall terminate immediately and cease to
remain outstanding.
(v) During the limited period of post-Service exercisability, this
option may not be exercised in the aggregate for more than the number of
Option Shares for which this option is exercisable at the time of
Optionee's cessation of Service. Upon the expiration of such limited
exercise period or (if earlier) upon the Expiration Date, this option shall
terminate and cease to be outstanding for any exercisable Option Shares for
which the option has not otherwise been exercised. To the extent this
option is not exercisable for one or more Option Shares at the time of
Optionee's cessation of Service, this option shall immediately terminate
and cease to be outstanding with respect to those shares.
(vi) In the event of a Corporate Transaction or Change in Control,
the provisions of Paragraph 6 shall govern the period for which
this option is to remain exercisable following Optionee's
cessation of Service and shall supersede any provisions to the
contrary in this Paragraph 5.
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<PAGE> 3
6. SPECIAL ACCELERATION OF OPTION
(a) This option, to the extent outstanding at the time of a Corporate
Transaction but not otherwise fully exercisable for all the Option Shares, shall
automatically accelerate in full so that this option shall, immediately prior to
the effective date of the Corporate Transaction, become exercisable for all of
the Option Shares at the time subject to this option and may be exercised for
any or all of those Option Shares as fully-vested shares.
(b) This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or an part of its business or assets.
7. ADJUSTMENT IN OPTION SHARES. Should any change be made to the
Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.
8. SHAREHOLDER RIGHTS. The holder of this option shall not have any
shareholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.
9. MANNER OF EXERCISING OPTION.
(a) In order to exercise this option with respect to all or any part
of the Option Shares for which this option is at the time exercisable, Optionee
(or any other person or persons exercising the option) must take the following
actions:
(i) Execute and deliver to the Corporation a Notice of Exercise for
the Option shares for which the option is exercised.
(ii) Pay the aggregate Exercise Price for the purchased shares in
one or more of the following forms:
(A) cash or check made payable to the Corporation;
(B) shares of Common Stock held by Optionee (or any other person or
persons exercising the option) for the requisite period necessary to avoid
a charge to the Corporation's earnings for financial reporting purposes and
valued at Fair Market Value on the Exercise Date; or
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<PAGE> 4
(C) through a special sale and remittance procedure pursuant to
which Optionee (or any other person or persons exercising the option) shall
concurrently provide irrevocable instructions (1) to a
Corporation-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
Exercise Price payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes required to be
withheld by the Corporation by reason of such exercise and (11) to the
Corporation to deliver the certificates for the purchased shares directly
to such brokerage firm in order to complete the sale.
Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the Exercise
Price must accompany the Notice of Exercise or Purchase Agreement delivered
to the Corporation in connection with the option exercise.
(iii) Furnish to the Corporation appropriate documentation that the
person or persons exercising the option (if other than Optionee) have the
right to exercise this option.
(iv) Make appropriate arrangements with the Corporation (or Parent or
Subsidiary employing or retaining Optionee) for the satisfaction of all
Federal, state and local income and employment tax withholding requirements
applicable to the option exercise.
(b) As soon as practical after the Exercise Date, the Corporation shall
issue to or on behalf of Optionee (or any other person or persons exercising
this option) a certificate for the purchased Option Shares, with the appropriate
legends affixed thereto.
(c) In no event may this option be exercised for any fractional shares.
10. COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this option and the issuance of the Option Shares upon
such exercise shall be subject to compliance by the Corporation and Optionee
with all applicable requirements of law relating thereto and with all applicable
regulations of any stock exchange (or the Nasdaq National Market, if applicable)
on which the Common Stock may be listed for trading at the time of such exercise
and issuance.
(b) The inability of the Corporation to obtain approval from any regulatory
body having authority deemed by the Corporation to be necessary to the lawful
issuance and sale of any Common Stock pursuant to this option shall relieve the
Corporation of any liability with respect to the non-issuance or sale of the
Common Stock as to which such approval shall not have been obtained. The
Corporation, however, shall use its best efforts to obtain all such approvals.
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<PAGE> 5
11. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided in
Paragraphs 3 and 6, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the Corporation and its successors and assigns and
Optionee, Optionee's assigns and the legal representatives, heirs and legatees
of Optionee's estate.
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<PAGE> 6
12. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to be
given or delivered to Optionee shall be in writing and addressed to Optionee at
the address indicated below Optionee's signature line on the Grant Notice. All
notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.
13. CONSTRUCTION. This Agreement and the option evidenced hereby are made
and granted pursuant to the Plan and are in all respects limited by and subject
to the terms of the Plan. All decisions of the Plan Administrator with respect
to any question or issue arising under the Plan or this Agreement shall be
conclusive and binding on all persons having an interest in this option.
14. GOVERNING LAW. The interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of Virginia without resort
to that State's conflict-of-laws rules.
FastComm Communications Corporation
By:
- ---------------,---- ---------------------------------
Title: President and CEO
---------------------------------,
OPTIONEE
Address:
-------------------------
-------------------------
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<PAGE> 7
EXHIBIT I
NOTICE OF EXERCISE
I hereby notify FastComm Communications Corporation (the "Corporation")
that I elect to purchase shares of the Corporation's Common Stock (the
"Purchased Shares") at the option exercise price of $______ per share (the
"Exercise Price") pursuant to that certain option (the "Option") granted to me
on ____________________, ___.
Concurrently with the delivery of this Exercise Notice to the Corporation,
I shall hereby pay to the Corporation the Exercise Price for the Purchased
Shares in accordance with the provisions of my agreement with the Corporation
(or other documents) evidencing the Option and shall deliver whatever additional
documents may be required by such agreement as a condition for exercise.
Alternatively, I may utilize the special broker-dealer sale and remittance
procedure specified in my agreement to effect payment of the Exercise Price for
one or more Purchased Shares.
- --------------------------
Date
----------------------------------
OPTIONEE
Address:
--------------------------
----------------------------------
----------------------------------
Print name in exact manner
it is to appear on the stock
certificate: ----------------------------------
Address to which certificate
is to be sent, if different
from address above: ----------------------------------
Social Security Number: ----------------------------------
Employee Number: ----------------------------------
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<PAGE> 8
APPENDIX
The following definitions shall be in effect under the Agreement:
A. AGREEMENT shall mean this Stock Option Agreement.
B. BOARD shall mean the Corporation's Board of Directors.
C. CHANGE IN CONTROL shall mean either of the following changes in
control or ownership of the Corporation:
(i) the acquisition, directly or indirectly, by any person or related
group of persons (other than the Corporation or a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Corporation) of beneficial ownership (within the meaning of Rule 13d-3 of
the Securities Exchange Act of 1934, as amended) of securities possessing
more than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities pursuant to a tender or exchange offer
made directly to the Corporation's shareholders, or
(ii) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the
Board members ceases by reason of one or more contested elections for Board
membership, to be comprised of individuals who either (A) have been Board
members continuously since the beginning of such period or (B) have been
elected or nominated for election as Board members during such period by at
least a majority of the Board members described in clause (A) who were
still in office at the time such election or nomination was approved by the
Board.
D. CODE shall mean the Internal Revenue Code of 1986, as amended.
E. COMMON STOCK shall mean the Corporation's common stock.
F. CORPORATE TRANSACTION shall mean either of the following
shareholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing more
than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to
such transaction, or
(ii) the sale, transfer or other disposition of all or substantially
all of the Corporation's assets in complete liquidation or dissolution of
the Corporation.
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<PAGE> 9
G. CORPORATION shall mean FastComm Communications Corporation, a Virginia
corporation.
H. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
I. EXERCISE DATE shall mean the date on which the option shall have been
exercised in accordance with Paragraph 9 of the Agreement.
J. EXERCISE PRICE shall mean the exercise price per share as specified in
the Grant Notice.
K. EXERCISE SCHEDULE shall mean the installment schedule specified in the
Grant Notice pursuant to which the option is to become exercisable for the
Option Shares in a series of installments over Optionee's period of Service.
L. EXPIRATION DATE shall mean the date on which the option expires as
specified in the Grant Notice.
M. FAIR MARKET VALUE per share of Common Stock on any relevant date shall
be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq National
Market, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question, as the price is reported by
the National Association of Securities Dealers on the Nasdaq National
Market. If there is no closing selling price for the Common Stock on the
date in question, then the Fair Market Value shall be the closing selling
price on the last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock Exchange,
then the Fair Market Value shall be the closing selling price per share of
Common Stock on the date in question on the Stock Exchange determined by
the Plan Administrator to be the primary market for the Common Stock, as
such price is officially quoted in the composite tape of transactions on
such exchange. If there is no closing selling price for the Common Stock on
the date in question, then the Fair Market Value shall be the closing
selling price on the last preceding date for which such quotation exists.
N. GRANT DATE shall mean the date of grant of the option as specified in
the Grant Notice.
O. GRANT NOTICE shall mean the Notice of Grant of Stock Option
accompanying the Agreement, pursuant to which Optionee has been informed of the
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<PAGE> 10
basic terms of the option evidenced hereby.
P. INVOLUNTARY TERMINATION shall mean the termination of Optionee's
Service which occurs by reason of Optionee's involuntary dismissal or discharge
by the Corporation.
Q. MISCONDUCT shall mean the commission of any act of fraud, embezzlement
or dishonesty by Optionee, any unauthorized use or disclosure by Optionee of
confidential information or trade secrets of the Corporation or any Parent or
Subsidiary), or any other intentional misconduct by Optionee adversely affecting
the business or affairs of the Corporation (or any Parent or Subsidiary) in a
material manner. The foregoing definition shall not be deemed to be inclusive of
all the acts or omissions which the Corporation (or any Parent or Subsidiary)
may consider as grounds for the dismissal or discharge of Optionee or any other
individual in the Service of the Corporation (or any Parent or Subsidiary).
R. NON-STATUTORY OPTION shall mean an option not intended to satisfy the
requirements of Code Section 422.
S. NOTICE OF EXERCISE shall mean the notice of exercise in the form
attached hereto as Exhibit 1.
T. OPTION SHARES shall mean the number of shares of Common Stock subject
to the option as specified in the Grant Notice.
U. OPTIONEE shall mean person to whom the option is granted as specified
in the Grant Notice.
V. PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
W. PERMANENT DISABILITY shall mean the inability of Optionee to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which is expected to result in death or has lasted
or can be expected to last for a continuous period of twelve (12) months or
more.
X. PLAN shall mean this Stock Option Agreement and the Grant Notice.
Y. PLAN ADMINISTRATOR shall mean the Compensation Committee of the Board
acting in its capacity as administrator of the Plan.
Z. SERVICE shall mean the Optionee's performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-
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<PAGE> 11
employee member of the board of directors or a consultant or independent
advisor.
AA. STOCK EXCHANGE shall mean the American Stock Exchange or the New York
Stock Exchange.
BB. SUBSIDIARY shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one or the other
corporations in such chain. If this option is designated a Non-Statutory Option
in the Grant Notice, Subsidiary shall also include any corporation, partnership,
joint-venture or other business entity in which the Corporation owns, directly
or indirectly, stock or a capital or profit interest.
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