<PAGE> 1
As filed with the Securities and Exchange Commission on April 27, 2000
Registration No. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------
FORM S-8
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REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THQ INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 13-3541686
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
27001 Agoura Road, Suite 325
Calabasas Hills, California 91301
(Address of Principal Executive Offices with Zip Code)
GENETIC ANOMALIES, INC
AMENDED AND RESTATED 1997 STOCK OPTION/STOCK ISSUANCE PLAN
(Full Title of Plan)
BRIAN J. FARRELL
President and Chief Executive Officer
THQ Inc.
27001 Agoura Road, Suite 325
Calabasas Hills, California 91301
(818) 871-5000
(Name, Address and Telephone Number,
including Area Code, of Agent For Service)
Copies to:
CATHERINE E. ALBRIGHT, Esq.
Sidley & Austin
555 West Fifth Street
Los Angeles, California 90013
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===========================================================================================
PROPOSED
MAXIMUM
TITLE OF PROPOSED MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER SHARE(1) PRICE(1) FEE(1)
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<S> <C> <C> <C> <C>
Common Stock, 45,000 $15.78125 $710,156 $187.00
$0.01 par value
===========================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
and, pursuant to Rules 457(h)(1) and 457(c) under the Securities Act of
1933, as amended, based upon the exercise price of $15.78125, the
average of the high and low prices of the above described shares on the
NASDAQ National Market System on April 25, 2000 as reported by the
National Association of Securities Dealers Automated Quotation System.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1 PLAN INFORMATION*
ITEM 2 REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION*
* Information required by Part I to be contained in the Section 10(a)
Prospectus is omitted from the Registration Statement in accordance with
Rule 428 under the Securities Act of 1933, as amended (the "Securities
Act"), and the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by THQ Inc., a Delaware corporation (the
"Company" or the "Registrant"), with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the Securities Act, are incorporated by reference and are
made a part hereof:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999;
(b) The Company's Current Report on Form 8-K dated March 21, 2000; and
(c) The Company's Registration Statement on Form 8-A (Registration No.
0-18813), filed with the Commission on September 23, 1991.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to 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, are deemed to be incorporated by reference
into this Registration Statement and to be a part hereof from the respective
dates of filing of such documents (such documents, and the documents enumerated
in paragraphs (a) through (c) above, being hereinafter referred to as
"Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed to
be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any other subsequently filed
Incorporated Document modifies or supersedes such first 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
The Company's Common Stock is registered under Section 12 of the
Exchange Act. See Item 3(c) above.
ITEM 5 INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
ITEM 6 INDEMNIFICATION OF OFFICERS AND DIRECTORS
Under the Delaware General Corporation Law, directors and officers, as
well as other employees or persons, may be indemnified against judgments, fines
and amounts paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation, i.e., a "derivative
action"), and against expenses (including attorney's fees) in any action
2
<PAGE> 3
(including a derivative action), if they acted in good faith and in a manner
they reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful. However, in the case of
a derivative action, a person cannot be indemnified for expenses in respect of
any matter as to which the person is adjudged to be liable to the corporation
unless and to the extent a court determines that such person is fairly and
reasonably entitled to indemnity for such expenses.
Delaware law also provides that, to the extent a director, officer,
employee or agent of a corporation has been successful on the merits or
otherwise in defense of any action or matter, the corporation must indemnify
such party against expenses (including attorneys' fees) actually and reasonably
incurred by such party in connection therewith.
Expenses incurred by a director or officer in defending any action may
be paid by a Delaware corporation in advance of the final disposition of the
action upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it is ultimately determined that such party is
not entitled to be indemnified by the corporation.
The Delaware General Corporation Law provides that the indemnification
and advancement of expenses provided thereby are not exclusive of any other
rights granted by bylaws, agreements or otherwise, and provides that a
corporation shall have the power to purchase and maintain insurance on behalf of
any person, whether or not the corporation would have the power to indemnify
such person under Delaware law.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been informed that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and 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.
Brian J. Farrell, the President and Chief Executive Officer and a
director of the Company and Jeffrey C. Lapin, the Vice Chairman and a director
of the Company, have entered into employment agreements with the Company
pursuant to which the Company has agreed to indemnify Mr. Farrell for losses,
liabilities, damages and expenses incurred as a result of his acting on behalf
of the Company, subject to certain conditions and limitations.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibit
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<S> <C>
4.1 Certificate of Incorporation (Filed as Exhibit 3.1 to the
Company's Post-Effective Amendment No. 1 to the Registration
Statement on Form S-3 filed on January 9, 1998 (File No 333-32221)
(the "Amendment to Form S-3"), and incorporated herein by
reference).
4.2 Amendment to Certificate of Incorporation (Filed as Exhibit 3.2 to
the Amendment to Form S-3, and incorporated herein by reference).
4.3 Amended and Restated Bylaws (filed as Exhibit 3.3 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended June
30, 1998 and incorporated herein by reference).
4.4* Genetic Anomalies, Inc. Amended and Restated 1997 Stock
Option/Stock Issuance Plan.
4.5* Form of Incentive Stock Option Agreement for Genetic Anomalies,
Inc. Amended and Restated 1997 Stock Option/Stock Issuance Plan.
5* Opinion of Sidley & Austin.
23.1* Consent of Deloitte & Touche LLP.
23.2* Consent of Sidley & Austin (Included in Exhibit 5).
24.1* Powers of Attorney (Set forth on the signature page hereto).
</TABLE>
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* Filed herewith
3
<PAGE> 4
ITEM 9. UNDERTAKINGS.
The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the 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 and the high and of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20 percent
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 this Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(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 with or furnished to the
Commission by the Company pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the Registration Statement.
(2) 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 therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered hereby which remain
unsold at the termination of the offering.
The Company hereby undertakes that, for the purposes of determining any
liability under the Securities Act, each filing of the Company'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 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 the time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the 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 Company of expenses incurred or paid
by a director, officer or controlling person of the Company 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
Company 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.
4
<PAGE> 5
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 Calabasas and State of California on the 26th
day of April, 2000.
THQ Inc.
By: /s/ Brian J. Farrell
-------------------------------------
Brian J. Farrell, President and Chief
Executive Officer
POWER OF ATTORNEY
Each person whose signature to the Registration Statement appears below
hereby appoints Brian J. Farrell and Fred A. Gysi, and each of them, his
attorneys-in-fact, with full power of substitution and resubstitution, to
execute in the name and on behalf of such person, individually and in the
capacity stated below, and to file, all amendments to this Registration
Statement, which amendments may make such changes in and additions to this
Registration Statement as such attorneys-in-fact may deem necessary or
appropriate.
Pursuant to the requirement of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
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<S> <C> <C>
/s/ Brian J. Farrell Director, President and Chief April 26, 2000
- ----------------------------- Executive Officer (Principal
Brian J. Farrell Executive Officer)
/s/ Lawrence Burstein Director April 25, 2000
- -----------------------------
Lawrence Burstein
/s/ Bruce Jagid Director April 26, 2000
- -----------------------------
Bruce Jagid
/s/ Jeffrey C. Lapin Director and Vice Chairman April 27, 2000
- -----------------------------
Jeffrey C. Lapin
/s/ James L. Whims Director April 25, 2000
- ----------------------
James L. Whims
/s/ L. Greg Ballard Director April 26, 2000
- -----------------------------
L. Greg Ballard
/s/ Fred A. Gysi Vice President - Finance and April 26, 2000
- ----------------------------- Administration, Chief
Fred A. Gysi Financial Officer and
Secretary (Principal
Financial Officer and
Principal Accounting Officer)
</TABLE>
5
<PAGE> 6
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibit
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<S> <C>
4.1 Certificate of Incorporation (Filed as Exhibit 3.1 to the
Company's Post-Effective Amendment No. 1 to the Registration
Statement on Form S-3 filed on January 9, 1998 (File No
333-32221) (the "Amendment to Form S-3"), and incorporated
herein by reference).
4.2 Amendment to Certificate of Incorporation (Filed as Exhibit
3.2 to the Amendment to Form S-3, and incorporated herein by
reference).
4.3 Amended and Restated Bylaws (filed as Exhibit 3.3 to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 1998 and incorporated herein by reference).
4.4* Amended and Restated Genetic Anomalies, Inc. 1997 Stock
Option/Stock Issuance Plan.
4.5* Form of Incentive Stock Option Agreement for Genetic
Anomalies, Inc. Amended and Restated 1997 Stock Option/Stock
Issuance Plan.
5* Opinion of Sidley & Austin regarding the validity of the
securities being registered.
23.1* Consent of Deloitte & Touche LLP.
23.2* Consent of Sidley & Austin, incorporated by reference to
Exhibit 5.
24.1* Powers of Attorney (included on signature page)
</TABLE>
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*Filed herewith
6
<PAGE> 1
EXHIBIT 4.4
GENETIC ANOMALIES, INC.
AMENDED AND RESTATED
1997 STOCK OPTION/STOCK ISSUANCE PLAN
(AMENDED AS OF OCTOBER 23, 1998)
1. Purpose. This 1997 Stock Option/Stock Issuance Plan (the "Plan") is
intended to promote the interests of Genetic Anomalies, Inc. (the "Company") by
giving incentives to the eligible officers and other employees and directors of
and consultants and advisors to the Company, its parent (if any) and any present
or future subsidiaries of the Company (collectively, "Related Corporations")
through providing opportunities to acquire stock in the Company. As used herein,
the terms "parent" and "subsidiary" mean "parent corporation" and "subsidiary
corporation", respectively, as those terms are defined in Sections 424(e) and
424(f) or successor provisions of the Internal Revenue Code of 1986 as amended
from time to time (the "Code").
2. Structure of the Plan. The Plan permits the following separate types
of grant:
A. Options may be granted hereunder to purchase shares of common stock
of the Company. These options may meet the requirements of Section 422 of the
Code ("Incentive Stock Options" or "ISOs"); or, they may not qualify as ISOs
("Non-Qualified Options"). Both ISOs and Non-Qualified Options are sometimes
referred to hereinafter as "Options".
B. Awards of stock in the Company ("Awards") may be granted.
C. Opportunities to make direct purchases of stock in the Company
("Purchases") may be authorized.
Options, Awards and authorizations to make Purchases are sometimes referred to
hereinafter as "Stock Rights".
3. Administration of the Plan.
A. The Plan shall be administered by the Board of Directors of the
Company (the "Board"). The Board may in its sole discretion grant Options,
authorize Purchases and grant Awards, as provided in the Plan. The Board shall
have full power and authority, subject to the express provisions of the Plan, to
construe and interpret the Plan and all Option agreements, Purchase
authorizations and Award grants thereunder, to establish, amend and rescind such
rules and regulations as it may deem appropriate for the proper administration
of the Plan, to determine in each case the terms and provisions which shall
apply to a particular Option agreement, Purchase authorization, or Award grant,
and to make all other determinations which are, in the Board's judgment,
necessary or desirable for the proper administration of the Plan. The Board may
correct any defect, supply any omission or reconcile any inconsistency in the
Plan or in any Option agreement, Purchase authorization or Award grant in the
manner and to the extent it shall,
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<PAGE> 2
in its sole discretion, consider expedient. Decisions of the Board shall be
final and binding on all parties who have an interest in the Plan or any Option,
Purchase, Award, or stock issuance thereunder. No director or person acting
pursuant to authority delegated by the Board shall be liable for any action or
determination under the Plan made in good faith.
B. The Board may, to the full extent permitted by and consistent with
applicable law and the Company's By-laws, and subject to Subparagraph D
hereinbelow, delegate any or all of its powers with respect to the
administration of the Plan to a committee (the "Committee") appointed by the
Board. If a Committee has been appointed, all references in this Plan to the
Board shall mean and relate to that Committee.
C. Those provisions of this Plan which make express reference to Rule
16b-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or any successor rule ("Rule 16b-3"), or which are required in order for
certain option transactions to qualify for exemption under Rule 16b-3, shall
apply only to those persons required to file reports under Section 16(a) of the
Exchange Act (a "Reporting Person").
D. If the Company registers any class of equity security under Section
12 of the Exchange Act, the selection of a director or an officer (as the terms
"director" and "officer" are defined for purposes of Rule 16b-3) as a recipient
of an option, the timing of the option grant, the exercise price of the option
and the number of shares subject to the option shall be determined either (i) by
the Board, if all of the Board members are disinterested persons within the
meaning of Rule 16(b)(3), or (ii) by two or more directors having full authority
to act in the matter, each of whom shall be such a disinterested person.
4. Eligible Employees and Others. ISOs may be granted to any employee of
the Company or of any Related Corporation. No person who is not such an employee
may be granted an ISO. Non-Qualified Options, Awards, and authorizations to make
Purchases may be granted to any employee, officer or director of, or consultant
or advisor to the Company or any Related Corporation. The granting of any Stock
Right to any individual or entity shall neither entitle that individual or
entity to, nor disqualify him from, participation in any other grant of Stock
Rights.
5. Stock. The stock subject to Options, Awards and Purchases shall be
authorized but unissued shares of common stock of the Company ("Common Stock"),
or shares of Common Stock reacquired by the Company in any manner. The aggregate
number of shares which may be issued under the Plan is 995,948, subject to
adjustment as provided in Paragraph 14. If any Option granted under the Plan
shall expire or terminate for any reason without having been exercised in full
or shall cease for any reason to be exercisable in whole or in part, or if the
Company shall reacquire any nonvested shares issued pursuant to Awards or
Purchases, the unpurchased shares subject to such Option, or such nonvested
shares so reacquired shall again be available for grants of Stock Rights under
the Plan.
6. Option Agreements. As a condition to the grant of an Option, each
recipient of an Option shall execute an option agreement in such form not
inconsistent with the Plan as the Board shall approve. These option agreements
may differ among recipients. Each option agreement
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<PAGE> 3
with respect to an ISO shall be subject to the provisions of the Plan applicable
to ISOs. The Board may, in its sole discretion, include additional provisions in
option agreements, including without limitation restrictions on transfer,
repurchase rights, commitments to pay cash bonuses, to make, arrange for or
guarantee loans or to transfer other property to optionees upon exercise of
options, or such other provisions as shall be determined by the Board; provided,
however, that such additional provisions shall not be inconsistent with any
provision of the Plan and such additional provisions shall not cause any ISO
granted under the Plan to fail to qualify as an incentive stock option within
the meaning of Section 422 of the Code.
7. Option Exercise Price.
A. Subject to Subparagraph 3D of this Plan and Subparagraphs B and C of
this Paragraph 7, the purchase price per share of Common Stock deliverable upon
the exercise of an Option ("exercise price") shall be determined by the Board.
B. In the case of an ISO, the exercise price shall not be less than 100%
of the fair market value of Common Stock, as determined by the Board, at the
time of grant of such option, or less than 110% of such fair market value in the
case of an ISO granted to the owner of stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or any
Related Corporation (after taking into account the attribution of stock
ownership rules of Section 424(d) of the Code) (a "10% Shareholder").
8. Cancellation and New Grant of Options, Etc. The Board shall have the
authority to effect, at any time and from time to time, with the consent of the
affected optionees, (i) the cancellation of any or all outstanding Options and
the grant in substitution therefor of new Options covering the same or different
shares of Common Stock and having an exercise price per share which may be lower
or higher than the exercise price per share of the canceled Options, or (ii) the
amendment of the terms of any and all outstanding Options to provide an exercise
price per share which is higher or lower than the then-current exercise price
per share of such outstanding Options.
9. Exercise of Options.
A. Each Option granted under the Plan shall be exercisable either in
full or in installments at such time or times and during such period as shall be
set forth in the agreement evidencing the Option, subject to the provisions of
the Plan. Unless doing so would have the effect of causing an ISO to be treated
as a Non-Qualified Option, the Board may, in its sole discretion, (i) accelerate
the date or dates on which all or any particular Option or Options granted under
the Plan may be exercised or (ii) extend the dates during which all, or any
particular, Option or Options granted under the Plan may be exercised.
B. Options granted under the Plan may provide for payment of the
exercise price by delivery of cash or a check payable to the order of the
Company, or, to the extent (if at all) provided in the option agreement: (i) by
delivery to the Company of shares of Common Stock of the Company already owned
by the optionee having a fair market value determined by the Board
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<PAGE> 4
to be equal in amount to the exercise price of the Options being exercised, or
(ii) by delivery of a recourse promissory note of the optionee bearing interest
payable not less than annually at the applicable Federal rate as defined in
Section 1274(d) of the Code and otherwise payable on such terms as are specified
by the Board, or (iii) by requesting that the Company withhold shares of Common
Stock of the Company issuable upon exercise of the Options having a fair market
value determined by the Board to be equal in amount to the exercise price of the
Options being exercised, or (iv) by any combination of the above methods of
payment.
10. Option Period. Subject to earlier termination under other provisions
of this Plan, each Option and all rights thereunder shall expire on such date as
shall be set forth in the applicable option agreement, except that, in the case
of an ISO, such expiration date shall not be later than ten years after the date
on which the ISO is granted and, in the case of an ISO granted to a 10%
Shareholder as defined in Subparagraph 7B of this Plan, such expiration date
shall not be later than five years after the date on which the ISO is granted.
11. Nontransferability of Options. Options shall not be assignable or
transferable by the optionee, either voluntarily or by operation of law, except
by will or the laws of descent and distribution, and, during the life of the
optionee, shall be exercisable only by the optionee.
12. Effect of Termination of Employment or Other Relationship. Except as
otherwise provided in Paragraph 10 and Subparagraph 13C with respect to ISOs,
and subject to all other provisions of the Plan, the Board shall determine the
period of time during which an optionee may exercise an Option following (i) the
termination of the optionee's employment or other relationship with the Company
or a Related Corporation or (ii) the death or disability of the optionee. Such
periods shall be set forth in the agreement evidencing the Option.
13. Additional ISO Requirements. ISOs granted under the Plan are subject
to the minimum exercise price rules set forth in Subparagraph 7B hereof, the
option period rules of Paragraph 10 hereof, and various other restrictions set
forth elsewhere in this Plan. In addition, ISOs granted under the Plan are
subject to the following:
A . Each ISO granted under the Plan shall, at the time of grant, be
specifically designated as such in the option agreement evidencing such Option.
B. In no event shall the aggregate fair market value (determined at the
time an ISO is granted) of Common Stock for which ISOs granted to any employee
are exercisable for the first time by such employee during any calendar year
(under all stock option plans of the Company and any Related Corporation) exceed
One Hundred Thousand Dollars ($100,000); provided, however, that this
Subparagraph B shall have no force or effect if its inclusion in the Plan is not
necessary for Options issued as ISOs to qualify as incentive stock options
within the meaning of Section 422 of the Code.
C. No ISO may be exercised unless, at the time of such exercise, the
optionee is, and has been continuously since the date of grant of the ISO,
employed by the Company or a Related Corporation, except that:
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<PAGE> 5
(i) An ISO may be exercised within the period of three (3) months
after the date the optionee ceases to be an employee of the Company and
any Related Corporation (or within such lesser period as may be
specified in the option agreement); provided, however, that the option
agreement may designate a longer exercise period, in which case the
exercise after such three-month period shall be treated as the exercise
of a Non-Qualified Option.
(ii) If the optionee dies while in the employ of the Company or a
Related Corporation, or within three (3) months after the optionee
ceases to be such an employee of the Company or a Related Corporation,
the ISO may be exercised by the person to whom it is transferred by will
or the laws of descent and distribution within the period of one (1)
year after the date of death (or within such lesser period as may be
specified in the option agreement).
(iii) If the optionee becomes disabled (within the meaning of
Section 22(e)(3) of the Code) while in the employ of the Company or a
Related Corporation, the ISO may be exercised within the period of one
(1) year after the date the optionee's employment ceases because of such
disability (or within such lesser period as may be specified in the
option agreement).
For all purposes of the Plan and any agreement evidencing an Option,
"employment" shall be defined in accordance with the provisions of Treasury
Regulation Section 1.421-7(h) under the Code (or any successor regulations).
Notwithstanding the foregoing provisions, no ISO may be exercised after its
expiration date.
14. Adjustments.
A. If, through or as a result of any merger, consolidation, sale of all
or substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar transaction, (i) the outstanding shares of Common Stock
are increased, decreased or exchanged for a different number or kind of shares
or other securities of the Company, or (ii) additional shares or new or
different shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock or other securities, an
appropriate and proportionate adjustment shall be made in (a) the maximum number
and kind of shares reserved for issuance under the Plan, (b) the number and kind
of shares or other securities subject to any then outstanding Options under the
Plan, and (c) the price for each share subject to any then outstanding Options
under the Plan, without changing the aggregate purchase price as to which such
Options remain exercisable. No fractional shares shall be issued under the Plan
on account of any such adjustments. Notwithstanding the foregoing provisions of
this Subparagraph A, no adjustment shall be made pursuant to this Paragraph 14
if such adjustment would cause any ISO granted under the Plan to fail to qualify
as an incentive stock option within the meaning of Section 422 of the Code.
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<PAGE> 6
B. Any adjustments under this Paragraph 14 shall be made by the Board of
Directors, whose determination as to what adjustments, if any, will be made and
the extent thereof shall be final, binding and conclusive.
15. Rights as a Shareholder. The holder of an Option shall have no
rights as a shareholder with respect to any shares covered by the option
(including, without limitation, any voting rights, or any rights to receive
dividends or non-cash distributions with respect to such shares) until the date
of issue of a stock certificate for such shares. No adjustment shall be made for
dividends or other rights for which the record date is prior to the date such
stock certificate is issued.
16. Merger, Consolidation. Asset Sale, Liquidation. etc.
A. Except as may otherwise be provided in the applicable option
agreement, in the event of a consolidation or merger or sale of all or
substantially all of the assets of the Company in which outstanding shares of
Common Stock are exchanged for securities, cash or other property of any other
corporation or business entity, or in the event of the liquidation of the
Company, the Board, or the board of directors of any corporation assuming the
obligations of the Company, shall, in its discretion, take any one or more of
the following actions, as to outstanding Options: (i) provide that such Options
shall be assumed, or equivalent options shall be substituted, by the acquiring
or succeeding corporation (or an affiliate thereof), provided, however, that any
such Options substituted for ISOs shall meet the requirements of Section 424(a)
of the Code; (ii) upon written notice to the optionees, provide that any and all
outstanding Options shall become exercisable in full (to the extent not
otherwise so exercisable) as of a specified date or time ("Accelerated Vesting
Date") prior to the consummation of such transaction, and that all unexercised
Options shall terminate as of a specified date or time ("Accelerated Expiration
Date") following the Accelerated Vesting Date unless exercised by the optionee
prior to the Accelerated Expiration Date, provided, however, that optionees
shall be given a reasonable period of time within which to exercise or provide
for the exercise of outstanding Options following such written notice and before
the Accelerated Expiration Date; (iii) in the event of a merger under the terms
of which holders of the Common Stock of the Company will receive upon
consummation thereof a cash payment for each share surrendered in the merger
(the "Merger Price"), terminate each outstanding Option in exchange for a
payment, made or provided for by the Company, equal in amount to the excess, if
any, of the Merger Price over the per-share exercise price of each such Option,
times the number of shares of Common Stock subject to such Option; or (iv)
terminate each outstanding Option in exchange for a cash payment equal in amount
to the product of the excess, if any, of the fair market value of a share of
Common Stock over the per-share exercise price of each such Option, times the
number of shares subject to such Option. The Board shall determine the fair
market value of a share of Common Stock for purposes of the foregoing, and the
Board's determination of such fair market value shall be final, binding and
conclusive.
B. The Company may grant Options under the Plan in substitution for
Options held by employees of another corporation who become employees of the
Company or a subsidiary of the corporation as the result of a merger or
consolidation of the employing corporation with the Company or a subsidiary of
the Company, or as a result of the acquisition by the Company or one
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of its subsidiaries of property or stock of the employing corporation. The
Company may direct that substitute Options be granted on such terms and
conditions as the Board considers appropriate in the circumstances.
17. Stock Restriction Agreement. As a condition to the grant of an Award
or a Purchase authorization under the Plan, the recipient of the Award or
Purchase authorization shall execute an agreement ("Stock Restriction
Agreement") in such form not inconsistent with the Plan as may be approved by
the Board. Stock Restriction Agreements may differ among recipients. Stock
Restriction Agreements may include any provisions the Board determines should be
included and that are not inconsistent with any provision of the Plan.
18. No Special Employment Rights. Nothing contained in the Plan or in
any option agreement or other agreement or instrument executed pursuant to the
provisions of the Plan shall confer upon any optionee any right with respect to
the continuation of his or her employment by the Company or interfere in any way
with the right of the Company at any time to terminate such employment or to
increase or decrease the compensation of the optionee.
19. Other Employee Benefits. Except as to plans which by their terms
include such amounts as compensation, no amount of compensation deemed to be
received by an employee as a result of the grant or exercise of an Option or the
sale of shares received upon such exercise, or as a result of the grant of an
Award or the authorization or making of a Purchase will constitute compensation
with respect to which any other employee benefits of such employee are
determined, including, without limitation, benefits under any bonus, pension,
profit-sharing, life insurance or salary continuation plan, except as otherwise
specifically determined by the Board.
20. Amendment of the Plan.
A. The Board may at any time, and from time to time, modify or amend the
Plan in any respect, except as otherwise expressly provided in this Plan;
provided, however, that if at any time the approval of the shareholders of the
Company is required under the Code with respect to ISOs, or is required under
Rule 16b-3, the Board may not effect such modification or amendment without such
approval.
B. The termination or any modification or amendment of the Plan shall
not, without the consent of an optionee, affect the optionee's rights under an
Option previously granted. With the consent of the optionee affected, the Board
may amend outstanding option agreements in a manner not inconsistent with the
Plan. The Board shall have the right to amend or modify (i) the terms and
provisions of the Plan and of any outstanding ISO granted under the Plan to the
extent necessary to qualify any or all such Options for such favorable federal
income tax treatment (including deferral of taxation upon exercise) as may be
afforded incentive stock options within the meaning of Section 422 of the Code,
and (ii) the terms and provisions of the Plan and of any outstanding Option to
the extent necessary to ensure the qualification of the Plan under Rule 16b-3.
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<PAGE> 8
21. Investment Representations. The Board may require any person to whom
an Option is granted, as a condition of exercising such Option, and any person
to whom an Award is granted or a Purchase is authorized, as a condition thereof,
to give written assurances in substance and form satisfactory to the Board to
the effect that such person is acquiring the Common Stock subject to the Option,
Award or Purchase for such person's own account for investment and not with any
present intention of selling or otherwise distributing the same, and to such
other effects as the Company deems necessary or appropriate in order to comply
with federal and applicable state securities laws, or with covenants or
representations made by the Company in connection with any public offering of
its Common Stock.
22. Compliance With Securities Laws. Each Option shall be subject to the
requirement that if, at any time, counsel to the Company shall determine that
the listing, registration or qualification of the shares subject to such Option
upon any securities exchange or under any state or federal law, or the consent
or approval of any governmental or regulatory body, or that the disclosure of
non-public information or the satisfaction of any other condition is necessary
as a condition of, or in connection with, the issuance or purchase of shares
thereunder, such Option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval, or satisfaction of
such condition shall have been effected or obtained on conditions acceptable to
the Board. Nothing herein shall be deemed to require the Company to apply for or
to obtain such listing, registration or qualification, or to satisfy such
condition.
23. Withholding. The Company shall have the right to deduct from
payments of any kind otherwise due to the optionee any federal, state or local
taxes of any kind required by law to be withheld with respect to any shares
issued upon exercise of Options under the Plan or upon the grant of an Award,
the making of a Purchase of Common Stock for less than its fair market value,
the making of a Disqualifying Disposition (as defined in Paragraph 24), or the
vesting of restricted Common Stock acquired pursuant to a Stock Right. The Board
in its sole discretion may condition the exercise of an Option, the grant of an
Award, the making of a Purchase, or the vesting of restricted shares acquired by
exercising a Stock Right on the grantee's payment of such additional withholding
taxes. Subject to the prior approval of the Company, which may be withheld by
the Company in its sole discretion, the grantee may elect to satisfy such
obligations, in whole or in part, (i) by causing the Company to withhold shares
of Common Stock otherwise issuable pursuant to the exercise of a Stock Right or
(ii) by delivering to the Company shares of Common Stock already owned by the
grantee. The shares so delivered or withheld shall have a fair market value
equal to such withholding obligation, and shall not be subject to any
repurchase, forfeiture, unfulfilled vesting or other similar requirements. The
fair market value of the shares used to satisfy such withholding obligation
shall be determined by the Company as of the date that the amount of tax to be
withheld is to be determined. Notwithstanding the foregoing, in the case of a
Reporting Person, no election to use shares for the payment of withholding taxes
shall be effective unless made in compliance with any applicable requirements of
Rule 16b-3 (unless it is intended that the transaction not qualify for exemption
under Rule 16b-3).
24. Notice to Company of Disqualifying Disposition. Each employee who
receives an ISO must agree to notify the Company in writing immediately after
the employee makes a
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<PAGE> 9
Disqualifying Disposition, as hereinafter defined, of any Common Stock acquired
pursuant to the exercise of an ISO. A Disqualifying Disposition is any
disposition (including any sale) of such Common Stock before the later of (a)
two (2) years after the date the employee was granted the ISO or (b) one (1)
year after the date the employee acquired Common Stock by exercising the ISO. If
the employee has died before such stock is sold, these holding period
requirements do not apply and no Disqualifying Disposition can occur thereafter.
25. Effective Date and Duration of the Plan.
A. The Plan shall become effective when adopted by the Board, but no
Stock Right granted under the Plan shall become exercisable unless and until the
Plan shall have been approved by the Company's shareholders. If such shareholder
approval is not obtained within twelve months after the date of the Board's
adoption of the Plan, Stock Rights previously granted under the Plan shall not
vest and shall terminate and shall be null and void and no Stock Rights shall be
granted thereafter under the Plan. Amendments to the Plan not requiring
shareholder approval shall become effective when adopted by the Board;
amendments requiring shareholder approval shall become effective when adopted by
the Board, but no stock Right granted after the date of such amendment shall
become exercisable (to the extent that such amendment to the Plan was required
to enable the Company to grant such stock Right to a particular person) unless
and until such amendment shall have been approved by the Company's shareholders.
If such shareholder approval is not obtained within twelve months of the Board's
adoption of such amendment, any Stock Rights granted on or after the date of
such amendment shall terminate and become null and void to the extent that such
amendment was required to enable the Company to grant such Stock Rights to a
particular person. Subject to this limitation, Stock Rights may be granted under
the Plan at any time after the effective date and before the termination date of
the Plan.
B. Unless sooner terminated as provided elsewhere in this Plan, this Plan
shall terminate upon the close of business on the day next preceding the tenth
anniversary of the date of its adoption by the Board. Stock Rights outstanding
on such date shall continue to have force and effect in accordance with the
provisions of the instruments evidencing such Stock Rights.
Adopted by the Board of Directors on May 21, 1997.
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<PAGE> 1
EXHIBIT 4.5
GENETIC ANOMALIES, INC.
INCENTIVE STOCK OPTION AGREEMENT
Genetic Anomalies, a Delaware corporation (the "Company"), hereby grants
this day of [Month, Year] (the "Grant Date"), to [Name of Employee] (the
"Employee"), an option to purchase a maximum of [Number of Optioned Shares (#)]
shares of the Company's Common Stock, $.01 par value (the "Common Stock"), at
the price of [Per Share Option Price ($)] per share, on the following terms and
conditions:
1. Grant Under 1997 Stock Option/Stock Issuance Plan. This option is
granted pursuant to and is governed by and subject to the Company's 1997 Stock
Option/Stock Issuance Plan (the "Plan"), the terms and conditions of which are
incorporated herein by this reference. Unless the context otherwise requires,
terms used herein shall have the same meaning as in the Plan. Determinations
made pursuant to the Plan in connection with this option shall be governed by
the Plan as it exists on the date of this option agreement ("Agreement").
2. Grant as Incentive Stock Option; Other Options. This option is
intended to qualify as an incentive stock option ("ISO") within the meaning of
Section 422 of the Internal Revenue Code of 1986 (the "Code"). This option is in
addition to any other options heretofore or hereafter granted to the Employee by
the Company, but a duplicate original of this instrument shall not effect the
grant of another option.
3. Exercise of Option and Provisions for Termination.
(a) Vesting Schedule. Except as otherwise provided in this
Agreement, and subject to all other terms and conditions of this Agreement, if
the Employee has continued to be employed by the Company through any applicable
date in the table below, this option may be exercised prior to the tenth
anniversary of the Grant Date (hereinafter the "Expiration Date") in
installments for not more than the number of shares set forth opposite such
applicable date:
[Insert Vesting Schedule]
The right of exercise shall be cumulative so that if the option is not exercised
to the maximum extent permissible as of an applicable date, it shall be
exercisable, in whole or in part, with respect to all shares not so purchased at
any time prior to the Expiration Date or the earlier termination of this option.
Notwithstanding any other provision of this Agreement or the Plan, this option
may not be exercised at any time on or after the Expiration Date.
(b) Method of Exercise. Subject to the terms and conditions set forth in
this Agreement, this option shall be exercised by the Employee's delivery of
written notice of exercise to the Treasurer of the Company, specifying the
number of shares to be purchased and the purchase price to be paid therefor and
accompanied by payment in full in accordance with Section 4 hereof.
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<PAGE> 2
Such exercise shall be effective upon receipt by the Treasurer of the Company of
such written notice together with the required payment. The Employee may
purchase less than the number of shares covered hereby, provided that no partial
exercise of this option may be for any fractional share or for fewer than
[Number of Shares] whole shares.
(c) Continuous Employment Required. Except as otherwise provided in this
Section 3, this option may not be exercised unless the Employee, at the time he
or she exercises this option, is, and has been at all times since the Grant
Date, an employee of the Company. For all purposes of this option, (i)
"employee" and "employment" shall be defined in accordance with the provisions
of Treasury Regulation Section 1.421-7(h) under the Code, or any successor
regulations, and (ii) if this option shall be assumed or a new option
substituted therefor in a transaction to which Section 424(a) of the Code
applies, employment by such assuming or substituting corporation (hereinafter a
"Successor Corporation") shall be considered for all purposes of this option to
be employment by the Company.
(d) Exercise Period Upon Termination of Employment. If the Employee
ceases to be employed by the Company for any reason, then, except as provided in
paragraphs (e) and (f) below, the right to exercise this option shall terminate
on the date which is three (3) months after the date of cessation of employment
(but in no event after the Expiration Date); provided, however, that this option
shall be exercisable only to the extent that the Employee was entitled to
exercise this option on the date of such cessation. Notwithstanding the
foregoing, if the Employee, prior to the Expiration Date, materially violates
the non-competition or confidentiality provisions of any employment contract,
confidentiality and nondisclosure agreement or other agreement between the
Employee and the Company, the right to exercise this option shall terminate
immediately upon written notice to the Employee from the Company describing such
violation.
(e) Exercise Period Upon Death or Disability. If the Employee dies or
becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to
the Expiration Date while he or she is an employee of the Company, or if the
Employee dies within three (3) months after the date on which the Employee
ceases to be an employee of the Company [(other than as the result of a
discharge for "cause" as specified in Paragraph (f) below)], this option shall
be exercisable within the period of one (1) year following the date of death or
disability of the Employee (but in no event after the Expiration Date), by the
Employee or by the person to whom this option is transferred by will or the laws
of descent and distribution; provided, however, that this option shall be
exercisable only to the extent that this option was exercisable by the Employee
on the date of his or her death or disability. Except as otherwise indicated by
the context, the term "Employee", as used in this Agreement, shall include the
estate of the Employee, the Employee's personal representative, or any other
person who acquires the right to exercise this option by bequest or inheritance
or otherwise by reason of the death of the Employee or by reason of the
Employee's incapacity.
(f) Discharge for Cause. If the Employee, prior to the Expiration Date,
is discharged by the Company for "cause" (as defined below), the right to
exercise this option shall terminate immediately upon such cessation of
employment. "Cause" shall mean willful misconduct in
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<PAGE> 3
connection with the Employee's employment or willful failure to perform his or
her employment responsibilities in the best interests of the Company (including,
without limitation, breach by the Employee of any provision of any employment,
nondisclosure, non-competition or other similar agreement between the Employee
and the Company), as determined by the Company, which determination shall be
conclusive. The Employee shall be considered to have been discharged "for cause"
if the Company determines, within thirty (30) days after the Employee's
resignation, that discharge for cause was warranted.
4. Payment of Purchase Price. Payment of the purchase price for shares
purchased upon exercise of this option shall, at the optionee's election, be
made in any of the following ways: (i) by delivery to the Company of cash or
wire transfer or a check payable to the order of the Company in an amount equal
to the purchase price per share as hereinabove set forth times the number of
shares so purchased (the "exercise price"); (ii) by delivery of a recourse
promissory note of the optionee bearing interest payable not less than annually
at the applicable Federal rate as defined in Section 1274(d) of the Code and
otherwise payable on such terms as are specified by the Board in its sole
discretion; (iii) by delivery to the Company of shares of Common Stock of the
Company already owned by the optionee having a fair market value determined by
the Board to be equal in amount to the exercise price of the option being
exercised; (iv) by requesting that the Company withhold shares of Common Stock
of the Company issuable upon exercise of the option having a fair market value
determined by the Board to be equal in amount to the exercise price of the
option being exercised; or (v) by any combination of the above methods of
payment.
5. Delivery of Shares.
(a) General. The Company shall, upon payment of the exercise
price for the number of shares purchased and paid for, make prompt delivery of
such shares to the Employee; provided, however, that if any law or regulation
requires the Company to take any action with respect to such shares before the
issuance thereof, then the date of delivery of such shares shall be extended for
the period necessary to complete such action.
(b) Listing, Registration, Qualification, Etc. This option shall
be subject to the requirement that if, at any time, counsel to the Company shall
determine that the listing, registration or qualification of the shares subject
hereto upon any securities exchange or under any state or federal law, or the
consent or approval of any governmental or regulatory body, or that the
disclosure of non-public information or the satisfaction of any other condition
is necessary as a condition of, or in connection with, the issuance or purchase
of shares hereunder, this option may not be exercised, in whole or in part,
unless such listing, registration, qualification, consent or approval,
disclosure or satisfaction of such other condition shall have been effected or
obtained on terms acceptable to the Board of Directors of the Company. Nothing
herein shall be deemed to require the Company to apply for, effect or obtain
such listing, registration, qualification, or disclosure, or to satisfy such
other condition.
6. Nontransferability of Option. Except as provided in Paragraph (e) of
Section 3 hereof, this option is personal and no rights granted hereunder may be
transferred, assigned, pledged or hypothecated in any way (whether by operation
of law or otherwise) nor shall any such rights be
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<PAGE> 4
subject to execution, attachment or similar process. Upon any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of this option or of
such rights contrary to the provisions hereof, or upon the levy of any
attachment or similar process upon this option or such rights, this option and
such rights shall, at the election of the Company, become null and void.
7. No Special Employment Rights. Nothing contained in the Plan or this
Agreement shall be construed or deemed by any person under any circumstances to
obligate the Company to continue the employment of the Employee for any period.
8. Rights as a Shareholder. The Employee shall have no rights as a
shareholder with respect to any shares which may be purchased by exercise of
this option (including, without limitation, any rights to vote or to receive
dividends or other distributions with respect to such shares) unless and until a
certificate representing such shares is duly issued and delivered to the
Employee. No adjustment shall be made for dividends or other rights for which
the record date is prior to the date such stock certificate is issued.
9. Adjustment Provisions.
(a) General. If through, or as a result of, any merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar transaction, (i) the outstanding shares of
Common Stock are increased or decreased or are exchanged for a different number
or kind of shares or other securities of the Company, or (ii) additional shares
or new or different shares or other securities of the Company or other non-cash
assets are distributed with respect to such shares of Common Stock or other
securities, the Employee shall, with respect to this option or any unexercised
portion hereof, be entitled to the rights and benefits, and be subject to the
limitations, set forth in Paragraph 14 of the Plan.
(b) Board Authority to Make Adjustments. Any adjustments under
this Section 9 will be made by the Board of Directors of the Company, whose
determination as to what adjustments, if any, will be made and the extent
thereof will be final, binding and conclusive. No fractional shares will be
issued with respect to this option on account of any such adjustments.
(c) Limits on Adjustments. No adjustment shall be made under this
Section 9 which would, for purposes of any applicable provision of the Code,
constitute a modification, extension or renewal of this option or a grant of
additional benefits to the Employee.
10. Mergers. Consolidations, Asset Sales, Liquidations, Etc. In the
event of a consolidation or merger or sale of all or substantially all of the
assets of the Company in which outstanding shares of Common Stock are exchanged
for securities, cash or other property of any other corporation or business
entity, or in the event of the liquidation of the Company, prior to the
Expiration Date or other termination of this option, the Employee shall, with
respect to this option or any unexercised portion hereof, be entitled to the
rights and benefits, and be subject to the limitations, set forth in Paragraph
16 of the Plan.
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<PAGE> 5
11. Withholding of Taxes. The Company's obligation to deliver shares
upon the exercise of this option shall be subject to the Employee's satisfaction
of all applicable federal, state and local income and employment tax withholding
requirements as described in Paragraph 23 of the Plan. Without limiting the
generality of the foregoing, if the Company in its discretion determines that it
is obligated to withhold tax with respect to a Disqualifying Disposition (as
defined in Section 12 hereof, the Employee agrees that the Company may withhold
from the Employee's wages the appropriate amount of federal, state and local
withholding taxes attributable to such Disqualifying Disposition. If any portion
of this option is treated as a Non-Qualified Option, the Employee agrees that
the Company may withhold from the Employee's wages the appropriate amount of
federal, state and local withholding taxes attributable to the Employee's
exercise of such Non-Qualified Option. At the Company's discretion, the amount
required to be withheld may be withheld in cash from such wages, or (with
respect to compensation income attributable to the exercise of this option) in
kind from the shares of Common Stock otherwise deliverable to the Employee on
exercise of this option. The Employee further agrees that, if the Company does
not withhold an amount from the Employee's wages sufficient to satisfy the
Company's withholding obligation, the Employee will reimburse the Company on
demand, in cash, for the amount underwithheld.
12. Limitations on Disposition of Incentive Stock Option Shares.
(a) Except as set forth in Section 14, no disposition (whether by
sale, exchange, gift, transfer or otherwise) may be made of any shares acquired
upon exercise of this option, other than by will or the laws of descent and
distribution.
(b) It is understood and intended that this option shall qualify
as an "incentive stock option" as defined in Section 422 of the Code (an "ISO").
Accordingly, the Employee understands that in order to obtain the beneficial tax
treatment accorded an ISO, no sale or other disposition may be made of any
shares acquired upon exercise of the option within one (1) year after the day of
the transfer of such shares to the Employee, nor within two (2) years after the
Grant Date. If the Employee intends to dispose, or does dispose (whether by
sale, exchange, gift, transfer or otherwise), of any such shares within either
of said periods, he or she will notify the Company in writing within ten (10)
days after such disposition (a "Disqualifying Disposition").
13. Investment Representations: Legends.
(a) Representations. The Employee represents, warrants and
covenants that:
(i) Any shares purchased upon exercise of this option shall be
acquired for the Employee's account for investment only and not with a view to,
or for sale in connection with, any distribution of the shares in violation of
the Securities Act of 1933 (the "Securities Act") or any rule or regulation
under the Securities Act.
(ii) The Employee has had such opportunity as he or she has
deemed adequate to obtain from representatives of the Company such information
as is necessary to permit the Employee to evaluate the merits and risks of his
or her investment in the Company.
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<PAGE> 6
(iii) The Employee is able to bear the economic risk of holding
shares acquired pursuant to the exercise of this option for an indefinite
period.
(iv) The Employee understands that (A) the shares acquired
pursuant to the exercise of this option will not be registered under the
Securities Act and are "restricted securities" within the meaning of Rule 144
under the Securities Act; (B) such shares cannot be sold, transferred or
otherwise disposed of unless they are subsequently registered under the
Securities Act or an exemption from registration is then available; (C) in any
event, an exemption from registration under Rule 144 or otherwise under the
Securities Act may not be available for at least two years and even then will
not be available unless a public market then exists for the Common Stock,
adequate information concerning the Company is then available to the public and
other terms and conditions of Rule 144 are complied with; and (D) there is now
no registration statement on file with the Securities and Exchange Commission
with respect to any stock of the Company and the Company has no obligation or
current intention to register any shares acquired pursuant to the exercise of
this option under the Securities Act.
(v) The Employee agrees that, if the Company offers for the first
time any of its Common Stock for sale pursuant to a registration statement under
the Securities Act, the Employee will not, without the prior written consent of
the Company, publicly offer, sell, contract to sell or otherwise dispose of,
directly or indirectly, any shares purchased upon exercise of this option for a
period of ninety (90) days after the effective date of such registration
statement.
By making payment upon any exercise of this option, in whole or in part, the
Employee shall be deemed to have reaffirmed, as of the date of such payment, the
representations made in this Section 13.
(b) Legends on Stock Certificates. All stock certificates representing
shares of Common Stock issued to the Employee upon exercise of this option shall
have affixed thereto legends substantially in the following forms, in addition
to any other legends required by applicable state law:
"The shares of stock represented by this certificate have not
been registered under the Securities Act of 1933 and may not be
transferred, sold or otherwise disposed of in the absence of an
effective registration statement with respect to the shares
evidenced by this certificate, filed and made effective under the
Securities Act of 1933, or an opinion of counsel satisfactory to
the Company to the effect that registration under such Act is not
required."
"The shares of stock represented by this certificate are subject
to certain restrictions on transfer contained in an Option
Agreement, a copy of which will be furnished upon request by the
issuer."
14. First Refusal Rights.
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<PAGE> 7
(a) If the Employee or the Employee's successor in interest
desires to sell all or any part of the shares acquired under this option
(including any securities received in respect thereof pursuant to
recapitalizations and the like), and an offeror (the "Offeror") has made an
offer therefor, which offer the Employee desires to accept, the Employee shall:
(i) obtain in writing an irrevocable and unconditional bona fide offer (the
"Bona Fide Offer") for the purchase thereof from the Offeror; and (ii) give
written notice (the "Option Notice") to the Company setting forth the Employee's
desire to sell such shares, which Option Notice shall be accompanied by a
photocopy of the original executed Bona Fide Offer and shall set forth at least
the name and address of the Offeror and the price and terms of the Bona Fide
Offer. Upon receipt of the Option Notice, the Company shall have an option to
purchase any or all of the shares specified in the Option Notice, such option to
be exercisable by giving, within thirty (30) days after receipt of the Option
Notice, a written counter-notice to the Employee. If the Company elects to
purchase, the Employee shall be obligated to sell to the Company such shares at
the price and terms indicated in the Bona Fide Offer within sixty (60) days from
the date of receipt by the Company of the Option Notice. The Company's purchase
rights under this Section 14 are assignable by the Company.
(b) The Employee may sell, pursuant to the terms of the Bona Fide
Offer, any or all of such shares not purchased by the Company or which the
Company does not elect to purchase in the manner set forth hereinabove after the
expiration of the 30-day period during which the Company may give the aforesaid
counter-notice; provided, however, that the Employee may not sell such shares to
the Offeror if the Offeror is (i) a competitor of the Company, or (ii) a person
that controls, is controlled by or under common control with a competitor of the
Company, or (iii) a member of management of a competitor of the Company (any
person described in clauses (i) through (iii) being hereinafter referred to as a
"Competitor") and the Company gives to the Employee, within thirty (30) days of
its receipt of the Option Notice, written notice stating that the Employee shall
not sell the shares to the Offeror; and provided, further, that prior to the
sale of any such shares to the Offeror, the Offeror shall execute an agreement
with the Company under which the Offeror agrees not to become a Competitor of
the Company and further agrees to be subject to the restrictions set forth in
this Agreement. If any or all of such shares are not sold pursuant to a Bona
Fide Offer within the time permitted above, the unsold shares shall remain
subject to the terms of this Agreement.
(c) The first refusal rights of the Company set forth above shall
remain in effect until the closing of an initial public offering of the
Company's Common Stock pursuant to a registration statement filed under the
Securities Act of 1933, as amended, or a successor statute, at which time the
first refusal rights set forth herein will automatically expire.
15. Miscellaneous.
(a) Except as otherwise expressly provided herein, this Agreement
may not be amended or otherwise modified unless evidenced in writing and signed
by the Company and the Employee.
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<PAGE> 8
(b) All notices under this Agreement shall be delivered by hand,
or sent by registered or certified mail, return receipt requested, and
first-class postage prepaid, to the parties at their respective addresses set
forth beneath their names below or at such other address as may be designated in
writing by either of the parties to one another. Notwithstanding the foregoing,
any notice sent to such an address in a country other than that from which the
notice is sent may be sent by telefax, telegram or commercial air courier.
(c) Any reference in this Agreement to a Section of the Code
shall refer to that Section as it reads as of the date of this Agreement and as
it may be amended from time to time, and to any successor provision.
(d) Each provision of this Agreement shall be considered
separable. The invalidity or unenforceability of any provision shall not affect
the other provisions, and this Agreement shall be construed in all respects as
if such invalid or unenforceable provision were omitted.
(e) This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
Date of Grant:
[Month, Day, Year]
Genetic Anomalies, Inc.
By:
Title:
Address:
47 Third Street
Suite 200
Cambridge, Massachusetts 02141
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<PAGE> 9
Employee's Acceptance
The undersigned hereby accepts the foregoing option and agrees to the
terms and conditions of this Agreement. The undersigned hereby acknowledges
receipt of a copy of the Company's 1997 Stock Option/Stock Issuance Plan.
[Name of Employee]
Signature
Address:
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<PAGE> 1
EXHIBIT 5
[SIDLEY & AUSTIN LETTERHEAD]
April 27, 2000
THQ Inc.
27001 Agoura Road, Suite 325
Calabasas Hills, California 91301
Ladies and Gentlemen:
We refer to the Registration Statement on Form S-8 (the "Registration
Statement") being filed by THQ Inc., a Delaware corporation (the "Company"),
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Securities Act"), relating to the registration of 45,000 shares
(the "Shares") of common stock, par value $0.01 per share (the "Common Stock"),
of the Company which may be issued upon the exercise of options granted pursuant
to the Amended and Restated Genetic Anomalies 1997 Stock Option/Stock Issuance
Plan (the "Plan").
We have acted as counsel to the Company in connection with the
Registration Statement and have examined such records, documents and questions
of law, and satisfied ourselves as to such matters of fact, as we have
considered relevant and necessary as a basis for this opinion. In addition, we
have examined the originals, or photocopies, of such other corporate records of
the Company, certificates of public officials and of officers of the Company and
such agreements, instruments and other documents as we have deemed necessary as
a basis for the opinions expressed below. As to the questions of fact material
to such opinions, we have, when relevant facts were not independently
established by us, relied upon a certificate of the Company or its officers or
of public officials.
Based on the foregoing, we are of the opinion that the Shares, when
issued in accordance with the terms of the underlying options, and when
certificates representing such shares have been duly executed, countersigned and
duly delivered to the persons entitled thereto against payment to the Company
for the exercise price provided for in the underlying options, will be legally
issued, fully paid and nonassessable.
We do not find it necessary for purposes of this opinion to cover, and
accordingly we express no opinion as to, the application of the securities or
"Blue Sky" laws of the various states to the sale of the Shares. This opinion is
limited to the General Corporation Law of the State of Delaware.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to all references to our firm in the Registration
Statement.
This opinion speaks solely as of the date hereof and we disclaim any
obligation or undertaking to advise you of any changes which may occur after
the date hereof.
Very truly yours,
/s/ Sidley & Austin
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
THQ Inc. on Form S-8 of our report dated February 24, 2000, appearing in the
Annual Report on Form 10-K of THQ Inc. for the year ended December 31, 1999.
/s/ DELOITTE & TOUCHE LLP
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Los Angeles, California
April 27, 2000
