<PAGE>
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------
Wind River Systems, Inc.
(Exact name of registrant as specified in its charter)
-----------------------------
Delaware 94-2873391
(State of Incorporation) (I.R.S. Employer
Identification No.)
----------------------------
500 Wind River Way
Alameda, California 94501
(510) 748-4100
(Address of principal executive offices)
1994 RouterWare Stock Option Plan
---------------------------------
Richard W. Kraber
Vice President of Finance and Chief Financial Officer
Wind River Systems, Inc.
500 Wind River Way
Alameda, California 94501
(510) 748-4100
---------------------------------
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------------------
Copies to:
Andrea Vachss, Esq. Wendi Okun, Esq.
Cooley Godward LLP Wind River Systems, Inc.
5 Palo Alto Square 500 Wind River Way
3000 El Camino Real Alameda, California 94501
Palo Alto, California 94306 (510) 748-4100
(650) 843-5000
---------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Aggregate Amount of
to be Registered Registered Per Share (1) Offering Price (1) Registration Fee
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stock Options and Common
Stock (par value $.001) 634,065 $0.15 - $6.85 $615,298 $172
====================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(h). The offering price per share and
aggregate offering price are based upon with respect to the 634,065 shares
subject to outstanding options, the exercise prices of such options.
================================================================================
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Wind River Systems, Inc. (the "Company")
with the Securities and Exchange Commission are incorporated by reference into
this Registration Statement:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
January 31, 1999;
(b) The Company's quarterly report on Form 10-Q for the quarter ended
April 30, 1999; and
(c) The description of the Company's Common Stock set forth in its
Registration Statement on Form 8-A filed with the Commission on March
12, 1993.
All reports and other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing
of a post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference herein and to be a part of this
registration statement from the date of the filing of such reports and
documents.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Section 145 of the Delaware General Corporation Law the Company has
broad powers to indemnify its directors and officers against liabilities they
may incur in such capacities, including liabilities under the Securities Act of
1933, as amended (the "Securities Act"). The Company's By-laws also provide
that the Company will indemnify its directors and executive officers, and may
indemnify its other officers, employees and other agents, to the fullest extent
not prohibited by Delaware law.
The Company's Restated Certificate of Incorporation (the "Restated
Certificate") provides that the liability of its directors for monetary damages
shall be eliminated to the fullest extent permissible under Delaware law.
Pursuant to Delaware law, this includes elimination of liability for monetary
damages for breach of the directors' fiduciary duty of care to the Company and
its stockholders. These provisions do not eliminate the directors' duty of care
and, in appropriate circumstances, equitable remedies such as injunctive or
other forms of non-monetary relief will remain available under Delaware law. In
addition, each director will continue to be subject to liability for breach of
the director's duty of loyalty to the Company, for acts omissions not in good
faith or involving intentional misconduct, for knowing violations of law, for
any transaction from which the director derived an improper personal benefit,
and for payment of dividends or approval of stock repurchases or redemptions
that are unlawful under Delaware law. The provision also does not affect a
director's responsibilities under any other laws, such as the federal securities
laws or state or federal environmental laws.
The Company has been authorized by the Board to enter into agreements with
its directors and officers that require the Company to indemnify such persons to
the fullest extent authorized or permitted by the provisions of the Restated
Certificate and Delaware law against expenses, judgments, fines, settlements and
other amounts actually and reasonably incurred (including expenses of a
derivative action) in connection with any proceeding, whether actual or
threatened, to which any such person may be made a party by reason of the fact
that such person is or was a director, officer, employee or other agent of the
Company or any of its affiliated enterprises. Delaware law permits such
indemnification provided such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interest of the
Company and, with respect to any criminal proceeding, had o reasonable cause to
believe his or her conduct was unlawful. The indemnification agreements also
set forth certain procedures that will apply in the event of a claim for
indemnification thereunder.
At present, there is no pending litigation or proceeding involving a director or
officer of the Company as to which indemnification is being sought nor is the
Company aware of any threatened litigation that may result in claims for
indemnification by any officer or director.
<PAGE>
EXHIBITS
Exhibit
Number
5.1 Opinion of Cooley Godward LLP
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Cooley Godward LLP is contained in Exhibit 5.1 to this
Registration Statement
99.1 1994 RouterWare Stock Option Plan
UNDERTAKINGS
1. The undersigned registrant hereby undertakes:
(a) 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
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) ((S) 230.424(b) of this
chapter) if, in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs (a)(i) and (a)(ii) do 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 issuer pursuant to
section 13 or section 15(d) of the Exchange Act that are incorporated by
reference herein.
(b) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
<PAGE>
2. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the 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 Securities Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Alameda, State of California, on July 1, 1999.
WIND RIVER SYSTEMS, INC.
By: /s/ Richard W. Kraber
------------------------------------------
Richard W. Kraber
Chief Financial Officer and Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Richard W. Kraber Chief Financial Officer July 1, 1999
- -------------------------------- (Principal Financial Officer)
(Richard W. Kraber)
/s/ Jerry L. Fiddler Chairman of the Board July 1, 1999
- --------------------------------
(Jerry L. Fiddler)
/s/ Grant M. Inman Director July 1, 1999
- --------------------------------
(Grant M. Inman)
/s/ Ronald A. Abelmann Director July 1, 1999
- --------------------------------
(Ronald A. Ablemann)
/s/ William B. Elmore Director July 1, 1999
- --------------------------------
(William B. Elmore)
/s/ David B. Pratt Director July 1, 1999
- --------------------------------
(David B. Pratt)
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
5.1 Opinion of Cooley Godward LLP
23.1 Consent of PricewaterhouseCoopers LLP
99.1 1994 RouterWare Stock Option Plan
<PAGE>
Exhibit 5.1
[LETTERHEAD OF COOLEY GODWARD LLP ATTORNEYS AT LAW APPEARS HERE]
July 1, 1999
Wind River Systems, Inc.
500 Wind River Way
Alameda, CA 94501
You have requested our opinion with respect to certain matters in connection
with the filing by Wind River Systems, Inc. (the "Company") of a Registration
Statement on Form S-8 (the "Registration Statement") with the Securities and
Exchange Commission covering the offering of up to 634,065 shares of the
Company's Common Stock, $.001 par value, (the "Shares") pursuant to the
Company's 1994 RouterWare Stock Option Plan (the "Plan").
In connection with this opinion, we have examined the Registration Statement and
related Prospectus, your Certificate of Incorporation and By-laws, as amended,
and such other documents, records, certificates, memoranda and other instruments
as we deem necessary as a basis for this opinion. We have assumed the
genuineness and authenticity of all documents submitted to us as originals, the
conformity to originals of all documents submitted to us as copies thereof, and
the due execution and delivery of all documents where due execution and delivery
are a prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Shares, when sold and issued in accordance with the Plans and the
Registration Statement and related Prospectus, will be validly issued, fully
paid, and nonassessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
Cooley Godward llp
By: /s/ Andrea Vachss
---------------------------
Andrea Vachss, Esq.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 24, 1999 relating to the
financial statements and financial statement schedules of Wind River Systems,
Inc., which appears in Wind River Systems, Inc.'s Annual Report on Form 10-K
for the year ended January 31, 1999.
PricewaterhouseCoopers LLP
San Jose, California
June 30, 1999
<PAGE>
Exhibit 99.1
WIND RIVER SYSTEMS, INC.
1994 ROUTERWARE STOCK OPTION PLAN
1. Purpose. The purpose of the 1994 RouterWare, Inc. Stock Option Plan (the
"Plan") is to strengthen RouterWare, Inc., a California corporation and wholly-
owned subsidiary of Wind River Systems, Inc. ("Corporation"), by providing to
employees, officers, directors, consultants and independent contractors of the
Corporation or any of its subsidiaries (including dealers, distributors, and
other business entities or persons providing services on behalf of the
Corporation or any of its subsidiaries) added incentive for high levels of
performance and unusual efforts to increase the earnings of the Corporation.
The Plan seeks to accomplish this purpose by enabling specified persons to
purchase shares of the common stock of the Corporation, thereby increasing their
proprietary interest in the Corporation's success and encouraging them to remain
in the employ or service of the Corporation.
2. Certain Definitions. As used in this Plan, the following words and phrases
shall have the respective meanings set forth below, unless the context clearly
indicates a contrary meaning:
2.1 "Board of Directors." The Board of Directors of the Corporation.
2.2 "Committee." The Committee which shall administer the Plan shall
consist of all of the members of the Board of Directors.
2.3 "Fair Market Value Per Share." The fair market value per share of the
Shares as determined by the Committee in good faith. The Committee is
authorized to make its determination as to the fair market value per share of
the Shares on the following basis; (i) if the Shares are traded only otherwise
than on a securities exchange and are not quoted on the National Association of
Securities Dealers' Automated Quotation System ("NASDAQ"), but are quoted in the
"pink sheets" published by the National Daily Quotation Bureau, the greater of
(a) the average of the mean between the average daily bid and average daily
asked prices of the Shares during the thirty (30) day period preceding the date
of grant of an Option, as quoted in the "pink sheets" published by the National
Daily Quotation Bureau, or (b) the mean between the average daily bid and
average daily asked prices of the Shares on the date of grant, as published in
such "pink sheets;" (ii) if the Shares are traded only otherwise than on a
securities exchange and are quoted on the Nasdaq National Market, the greater of
(a) the average of the mean between the closing bid and closing asked prices of
the Shares during the thirty (30) day period preceding the date of grant of an
Option, as reported by the Wall Street Journal and (b) the mean between the
closing bid and closing asked prices of the Shares on the date of grant of an
Option, as reported by the Wall Street Journal; (iii) if the Shares are admitted
to trading on a securities exchange, the greater of (a) the average of the daily
closing prices of the Shares during the ten (10) trading days preceding the date
of grant of an Option, as quoted in the Wall Street Journal, or (b) the daily
closing price of the Shares on the date of grant of an Option, as quoted in the
Wall Street Journal; or (iv) if the Shares are traded only otherwise than as
described in (i), (ii) or (iii) above, or if the Shares are not publicly traded,
the value determined by the Committee in
1.
<PAGE>
good faith based upon the fair market value as determined by completely
independent and well qualified experts.
2.4 "Option." A stock option granted under the Plan.
2.5 "Incentive Stock Option." An Option intended to qualify for treatment
as an incentive stock option under Code Sections 421 and 422, and designated as
an Incentive Stock Option.
2.6 "Nonqualified Option." An Option not qualifying as an Incentive Stock
Option.
2.7 "Optionee." The holder of an Option.
2.8 "Option Agreement." The document setting forth the terms and
conditions of each Option.
2.9 "Shares." The shares of common stock of Wind River Systems, Inc.
2.10 "Code." The Internal Revenue Code of 1986, as amended.
2.11 "Subsidiary." Any corporation of which fifty percent (50%) or more
of total combined voting power of all classes of stock of such corporation is
owned by the Corporation or another Subsidiary (as so defined).
3. Administration Of Plan
3.1 In General. This Plan shall be administered by the Committee. Any
action of the Committee with respect to administration of the Plan shall be
taken pursuant to (i) a majority vote at a meeting of the Committee (to be
documented by minutes), or (ii) the unanimous written consent of its members.
3.2 Authority. Subject to the express provisions of this Plan, the
Committee shall have the authority to: (i) construe and interpret the Plan,
decide all questions and settle all controversies and disputes which may arise
in connection with the Plan and to define the terms used therein; (ii)prescribe,
amend and rescind rules and regulations relating to administration of the Plan;
(iii) determine the purchase price of the Shares covered by each Option and the
method of payment of such price, individuals to whom, and the time or times at
which, Options shall be granted and exercisable and the number of Shares covered
by each Option; (iv) determine the terms and provisions of the respective Option
Agreements (which need not be identical); (v) determine the duration and
purposes of leaves of absence which may be granted to participants without
constituting a termination of their employment for purposes of the Plan; and
(vi)make all other determinations necessary or advisable to the administration
of the Plan. Determinations of the Committee on matters referred to in this
Section 3 shall be conclusive and binding on all parties howsoever concerned.
With respect to Incentive Stock Options, the Committee shall administer the Plan
in compliance with the provisions of Code Section 422 as the same may hereafter
be amended from time to time. No member of the Committee shall be liable for any
action or determination made in good faith with respect to the Plan or any
Option.
2.
<PAGE>
4. Eligibility And Participation
4.1 In General. Only officers, employees and directors who are also
employees of the Corporation or any Subsidiary shall be eligible to receive
grants of Incentive Stock Options. Officers, employees and directors (whether or
not they are also employees) of the Corporation or any Subsidiary, as well as
consultants, independent contractors or other service providers of the
Corporation or any Subsidiary shall be eligible to receive grants of
Nonqualified Options. Within the foregoing limits, the Committee, from time to
time, shall determine and designate persons to whom Options may be granted. All
such designations shall be made in the absolute discretion of the Committee and
shall not require the approval of the stockholders. In determining (i) the
number of Shares to be covered by each Option, (ii) the purchase price for such
Shares and the method of payment of such price (subject to the other sections
hereof), (iii) the individuals of the eligible class to whom Options shall be
granted, (iv) the terms and provisions of the respective Option Agreements, and
(v) the times at which such Options shall be granted, the Committee shall take
into account such factors as it shall deem relevant in connection with
accomplishing the purpose of the Plan as set forth in Section 1. An individual
who has been granted an Option may be granted an additional Option or Options if
the Committee shall so determine. No Option shall be granted under the Plan
after July 2, 2004, but Options granted before such date may be exercisable
after such date.
Certain Limitations. In no event shall Incentive Stock Options be granted to an
Optionee such that the sum of (i) aggregate fair market value (determined at the
time the Incentive Stock Options are granted) of the Shares subject to all
Options granted under the Plan which are exercisable for the first time during
the same calendar year, plus (ii) the aggregate fair market value (determined at
the time the options are granted) of all stock subject to all other incentive
stock options granted to such Optionee by the Corporation, its parent and
Subsidiaries which are exercisable for the first time during such calendar year,
exceeds One Hundred Thousand Dollars ($100,000). For purposes of the
immediately preceding sentence, fair market value shall be determined as of the
date of grant based on the Fair Market Value Per Share as determined pursuant to
Section 2.3.
5. Available Shares And Adjustments Upon Changes In Capitalization.
5.1 Shares. Subject to adjustment as provided in Section 5.2 below, the
total number of Shares to be subject to Options granted pursuant to this Plan
shall not exceed 300,000 Shares. Shares subject to the Plan may be either
authorized but unissued shares or shares that were once issued and subsequently
reacquired by the Corporation; the Committee shall be empowered to take any
appropriate action required to make Shares available for Options granted under
this Plan. If any Option is surrendered before exercise or lapses without
exercise in full or for any other reason ceases to be exercisable, the Shares
reserved therefore shall continue to be available under the Plan.
5.2 Adjustments. As used herein, the term "Adjustment Event" means an
event pursuant to which the outstanding Shares of the Corporation are increased,
decreased or changed into, or exchanged for a different number or kind of shares
or securities, without receipt of consideration by the Corporation, through
reorganization, merger, recapitalization, reclassification, stock split, reverse
stock split, stock dividend, stock consolidation or otherwise.
3.
<PAGE>
Upon the occurrence of an Adjustment Event, (i) appropriate and proportionate
adjustments shall be made to the number and kind of shares and exercise price
for the shares subject to the Options which may thereafter be granted under this
Plan, (ii) appropriate and proportionate adjustments shall be made to the number
and kind of and exercise price for the shares subject to the then outstanding
Options granted under this Plan, and (iii)appropriate amendments to the Option
Agreements shall be executed by the Corporation and the Optionees if the
Committee determines that such an amendment is necessary or desirable to reflect
such adjustments. If determined by the Committee to be appropriate, in the event
of an Adjustment Event which involves the substitution of securities of a
corporation other than the Corporation, the Committee shall make arrangements
for the assumptions by such other corporation of any Options then or thereafter
outstanding under the Plan. Notwithstanding the foregoing, such adjustment in an
outstanding Option shall be made without change in the total exercise price
applicable to the unexercised portion of the Option, but with an appropriate
adjustment to the number of shares, kind of shares and exercise price for each
share subject to the Option. The determination by the Committee as to what
adjustments, amendments or arrangements shall be made pursuant to this Section
5.2, and the extent thereof, shall be final and conclusive. No fractional Shares
shall be issued under the Plan on account of any such adjustment or arrangement.
6. Terms And Conditions Of Options
6.1 Intended Treatment as Incentive Stock Options. Incentive Stock
Options granted pursuant to this Plan are intended to be "incentive stock
options" to which Code Sections 421 and 422 apply, and the Plan shall be
construed and administered to implement that intent. If all or any part of an
Incentive Stock Option shall not be an "incentive stock option" subject to
Sections 421 or 422 of the Code, such Option shall nevertheless be valid and
carried into effect. All Options granted under this Plan shall be subject to the
terms and conditions set forth in this Section 6 (except as provided in Section
5.2) and to such other terms and conditions as the Committee shall determine to
be appropriate to accomplish the purpose of the Plan as set forth in Section 1.
6.2 Amount and Payment of Exercise Price.
6.2.1 Exercise Price. The exercise price per Share for each Share
which the Optionee is entitled to purchase under a Nonqualified Option shall be
determined by the Committee but shall not be less than eighty-five percent (85%)
of the Fair Market Value Per Share on the date of the grant of the Nonqualified
Option. The exercise price per Share for each Share which the Optionee is
entitled to purchase under an Incentive Stock Option shall be determined by the
Committee but shall not be less than the Fair Market Value Per Share on the date
of the grant of the Incentive Stock Option; provided, however, that the exercise
price shall not be less than one hundred ten percent (110%) of the Fair Market
Value Per Share on the date of the grant of the Incentive Stock Option in the
case of an individual then owning (within the meaning of Code Section 424(d))
more than ten percent (10%) of the total combined voting power of all classes of
stock of the Corporation or of its parent or Subsidiaries.
6.2.2 Payment of Exercise Price. The consideration to be paid for
the Shares to be issued upon exercise of an Option, including the method of
payment, shall be determined by the Committee and may consist of promissory
notes, shares of the common stock of the
4.
<PAGE>
Corporation or such other consideration and method of payment for the Shares as
may be permitted under applicable state and federal laws.
6.3 Exercise of Options.
6.3.1 Each Option granted under this Plan shall be exercisable at
such times and under such conditions as may be determined by the Committee at
the time of the grant of the Option and as shall be permissible under the terms
of the Plan; provided, however, in no event shall an Option be exercisable after
the expiration of ten (10) years from the date it is granted, and in the case of
an Optionee owning (within the meaning of Code Section 424(d)), at the time an
Incentive Stock Option is granted, more than ten percent (10%) of the total
combined voting power of all classes of stock of the Corporation or of its
parent or Subsidiaries, such Incentive Stock Option shall not be exercisable
later than five (5) years after the date of grant.
6.3.2 An Optionee may purchase less than the total number of Shares
for which the Option is exercisable, provided that a partial exercise of an
Option may not be for less than One Thousand (1,000) Shares and shall not
include any fractional shares.
6.4 Nontransferability of Options. All Options granted under this Plan
shall be nontransferable, either voluntarily or by operation of law, otherwise
than by will or the laws of descent and distribution, and shall be exercisable
during the Optionee's lifetime only by such Optionee.
6.5 Effect of Termination of Employment or Other Relationship. Except as
otherwise determined by the Committee in connection with the grant of
Nonqualified Options, the effect of termination of an Optionee's employment or
other relationship with the Corporation on such Optionee's rights to acquire
Shares pursuant to the Plan shall be as follows:
6.5.1 Termination for Other than Disability, Cause, or Death. If an
Optionee ceases to be employed by, or ceases to have a relationship with, the
Corporation for any reason other than for disability, cause, or death, such
Optionee's Options shall expire not later than three (3) months thereafter.
During such three (3) month period and prior to the expiration of the Option by
its terms, the Optionee may exercise any Option granted to him, but only to the
extent such Options were exercisable on the date of termination of his
employment or relationship and except as so exercised, such Options shall expire
at the end of such three (3) month period unless such Options by their terms
expire before such date. The decision as to whether a termination for a reason
other than disability, cause or death has occurred shall be made by the
Committee, whose decision shall be final and conclusive, except that employment
shall not be considered terminated in the case of sick leave or other bona fide
leave of absence approved by the Corporation.
6.5.2 Disability. If an Optionee ceases to be employed by, or ceases
to have a relationship with, the Corporation by reason of disability (within the
meaning of Code Section 22(e)(3)), such Optionee's Options shall expire not
later than one (1) year thereafter. During such one (1) year period and prior to
the expiration of the Option by its terms, the Optionee may exercise any Option
granted to him, but only to the extent such Options were exercisable on the date
the Optionee ceased to be employed by, or ceased to have a relationship with,
the
5.
<PAGE>
Corporation by reason of disability and except as so exercised, such Options
shall expire at the end of such one (1) year period unless such Options by their
terms expire before such date. The decision as to whether a termination by
reason of disability has occurred shall be made by the Committee, whose decision
shall be final and conclusive.
6.5.3 Termination for Cause. If an Optionee's employment by, or
relationship with, the Corporation is terminated for cause, such Optionee's
Option shall expire immediately; provided, however, the Committee may, in its
sole discretion, within thirty (30) days of such termination, waive the
expiration of the Option by giving written notice of such waiver to the Optionee
at such Optionee's last known address. In the event of such waiver, the Optionee
may exercise the Option only to such extent, for such time, and upon such terms
and conditions as if such Optionee had ceased to be employed by, or ceased to
have a relationship with, the Corporation upon the date of such termination for
a reason other than disability, cause, or death. Termination for cause shall
include termination for malfeasance or gross misfeasance in the performance of
duties or conviction of illegal activity in connection therewith or any conduct
detrimental to the interests of the Corporation. The determination of the
Committee with respect to whether a termination for cause has occurred shall be
final and conclusive.
6.5.4 Death of an Optionee. If the Optionee ceases to be employed
by, or ceases to have a relationship with, the Corporation by reason of death,
such Optionee's Options shall expire not later than six (6) months thereafter.
During such six (6) month period and prior to the expiration of the Option by
its terms, such Option may be exercised by his executor or administrator or the
person or persons to whom the Option is transferred by will or the applicable
laws of descent and distribution, but only to the extent such Options were
exercisable on the date Optionee ceased to be employed by, or ceased to have a
relationship with, the Corporation by reason of death.
6.6 Withholding of Taxes. As a condition to the exercise, in whole or in
part, of any Options the Board of Directors may in its sole discretion require
the Optionee to pay, in addition to the purchase price of the Shares covered by
the Option an amount equal to any Federal, state or local taxes that may be
required to be withheld in connection with the exercise of such Option.
6.7 No Rights to Continued Employment or Relationship. Nothing contained
in this Plan or in any Option Agreement shall obligate the Corporation to employ
or have another relationship with any Optionee for any period or interfere in
any way with the right of the Corporation to reduce such Optionee's compensation
or to terminate the employment of or relationship with any Optionee at any time.
6.8 Time of Granting Options. The time an Option is granted, sometimes
referred to herein as the date of grant, shall be the day the Corporation
executes the Option Agreement; provided, however, that if appropriate
resolutions of the Committee indicate that an Option is to be granted as of and
on some prior or future date, the time such Option is granted shall be such
prior or future date.
6.9 Privileges of Stock Ownership. No Optionee shall be entitled to the
privileges of stock ownership as to any Shares not actually issued and delivered
to such Optionee. No Shares shall be purchased upon the exercise of any Option
unless and until, in the opinion of the
6.
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Corporation's counsel, any then applicable requirements of any laws or
governmental or regulatory agencies having jurisdiction and of any exchanges
upon which the stock of the Corporation may be listed shall have been fully
complied with.
6.10 Securities Laws Compliance. The Corporation will diligently endeavor
to comply with all applicable securities laws before any Options are granted
under the Plan and before any Shares are issued pursuant to Options. Without
limiting the generality of the foregoing, the Corporation may require from the
Optionee such investment representation or such agreement, if any, as counsel
for the Corporation may consider necessary or advisable in order to comply with
the Securities Act of 1933 as then in effect, and may require that the Optionee
agree that any sale of the Shares will be made only in such manner as is
permitted by the Committee. The Committee in its discretion may cause the Shares
underlying the Options to be registered under the Securities Act of 1933, as
amended, by the filing of a Form S-8 Registration Statement covering the Options
and Shares underlying such Options. Optionee shall take any action reasonably
requested by the Corporation in connection with registration or qualification of
the Shares under federal or state securities laws.
6.11 Option Agreement. Each Incentive Stock Option and Nonqualified
Option granted under this Plan shall be evidenced by the appropriate written
Stock Option Agreement ("Option Agreement") executed by the Corporation and the
Optionee in a form substantially the same as the appropriate form of Option
Agreement attached as Exhibit I or II hereto (and made a part hereof by this
reference) and shall contain each of the provisions and agreements specifically
required to be contained therein pursuant to this Section 6, and such other
terms and conditions as are deemed desirable by the Committee and are not
inconsistent with the purpose of the Plan as set forth in Section 1.
7. Plan Amendment And Termination
7.1 Authority of Committee. The Committee may at any time discontinue
granting Options under the Plan or otherwise suspend, amend or terminate the
Plan and may, with the consent of an Optionee, make such modification of the
terms and conditions of such Optionee's Option as it shall deem advisable;
provided that, except as permitted under the provisions of Section 5.2, the
Committee shall have no authority to make any amendment or modification to this
Plan or any outstanding Option thereunder which would: (i) increase the maximum
number of shares which may be purchased pursuant to Options granted under the
Plan, either in the aggregate or by an Optionee (except pursuant to Section
5.2); (ii) change the designation of the class of the employees eligible to
receive Incentive Stock Options; (iii) extend the term of the Plan or the
maximum Option period thereunder; (iv) decrease the minimum Incentive Stock
Option price or permit reductions of the price at which shares may be purchased
for Incentive Stock Options granted under the Plan; or (v) cause Incentive Stock
Options issued under the Plan to fail to meet the requirements of incentive
stock options under Code Section 422. An amendment or modification made pursuant
to the provisions of this Section 7 shall be deemed adopted as of the date of
the action of the Committee effecting such amendment or modification and shall
be effective immediately, unless otherwise provided therein, subject to approval
thereof (1) within twelve (12) months before or after the effective date by
stockholders of the Corporation holding not less than a majority vote of the
voting power of the Corporation voting in person or by proxy at a duly held
stockholders meeting when required to maintain or satisfy
7.
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the requirements of Code Section 422 with respect to Incentive Stock Options,
and (2) by any appropriate governmental agency. No Option may be granted during
any suspension or after termination of the Plan.
7.2 Ten (10) Year Maximum Term. Unless previously terminated by the
Committee, this Plan shall terminate on July 2, 2004, and no Options shall be
granted under the Plan thereafter.
7.3 Effect on Outstanding Options. Amendment, suspension or termination
of this Plan shall not, without the consent of the Optionee, alter or impair any
rights or obligations under any Option theretofore granted.
8. Effective Date Of Plan. This Plan shall be effective as of July 2, 1994,
the date the Plan was adopted by the Board of Directors, subject to the approval
of the Plan by the affirmative vote of a majority of the issued and outstanding
Shares of common stock of the Corporation represented and voting at a duly held
meeting at which a quorum is present within twelve (12) months thereafter. The
Committee shall be authorized and empowered to make grants of Options pursuant
to this Plan prior to such approval of this Plan by the stockholders; provided,
however, in such event the Option grants shall be made subject to the approval
of this Plan and such Option grants by the stockholders in accordance with the
provisions of this Section 8.
9. Miscellaneous Provisions
9.1 Exculpation and Indemnification. The Corporation shall indemnify and
hold harmless the Committee from and against any and all liabilities, costs and
expenses incurred by such persons as a result of any act, or omission to act, in
connection with the performance of such persons' duties, responsibilities and
obligations under the Plan, other than such liabilities, costs and expenses as
may result from the gross negligence, bad faith, willful conduct and/or criminal
acts of such persons.
9.2 Governing Law. The Plan shall be governed and construed in accordance
with the laws of the State of California and the Code.
9.3 Compliance with Applicable Laws. The inability of the Corporation to
obtain from any regulatory body having jurisdiction authority deemed by the
Corporation's counsel to be necessary to the lawful issuance and sale of any
Shares upon the exercise of an Option shall relieve the Corporation of any
liability in respect of the non-issuance or sale of such Shares as to which such
requisite authority shall not have been obtained.
8.
