<PAGE> 1
As filed with the Securities and Exchange Commission on November 12, 1999
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
INTRANET SOLUTIONS, INC.
(Exact name of Registrant as specified in its charter)
MINNESOTA 41-1652566
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8091 WALLACE ROAD 55344
EDEN PRAIRIE, MINNESOTA (Zip Code)
(Address of principal executive offices)
INFOACCESS, INC.
1990 STOCK OPTION PLAN
AND
INFOACCESS, INC.
1995 STOCK OPTION PLAN
(Full title of the plans)
Robert F. Olson
President and Chief Executive Officer
8091 Wallace Road
Eden Prairie, Minnesota 55344
(Name and address of agent for service)
Telephone number, including area code, of agent for service: (612) 903-2000
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================
Proposed
Proposed maximum
Title of Amount maximum aggregate Amount of
securities to to be offering price offering registration
be registered registered(1) per share(1)(2) price(1)(2) fee
======================== ================== ======================= ========================== =====================
<S> <C> <C> <C> <C>
Common Stock, 386,576
$.01 par value shares $19.188 $7,417,620 $ 2,062.10
======================== ================== ======================= ========================== =====================
</TABLE>
(1) The Registration Statement relates to 260,250 shares of Common Stock to
be offered pursuant to the InfoAccess, Inc. 1990 Stock Option Plan and
126,326 shares of Common Stock to be offered pursuant to the
InfoAccess, Inc. 1995 Stock Option Plan.
(2) Estimated solely for the purpose of the registration fee pursuant to
Rule 457(h)(1) based on the average of the high and low sales prices
per share of the Registrant's Common Stock on November 5, 1999 as
reported on the Nasdaq National Market.
================================================================================
<PAGE> 2
INTRANET SOLUTIONS, INC.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents of IntraNet Solutions, Inc. (the "Company")
filed with the Securities and Exchange Commission (the "Commission") pursuant to
the Securities Exchange Act of 1934, as amended (the "Exchange Act") (File No.
0-19817), are, as of their respective dates, incorporated by reference and made
a part hereof:
(1) The Annual Report on Form 10-K of the Company for
the fiscal year ended March 31, 1999, filed pursuant to
Section 15(d) of the Exchange Act (File No.
0-19817).
(2) All other reports filed pursuant to Section 13(a)
or 15(d) of the Exchange Act since the end of the fiscal year
covered by the Annual Report referred to in (1) above (File
No. 0-19817).
(3) The description of the Company's Common Stock
which is contained in the Registration Statement on Form 8-A
(Registration No. 0-19817) filed with the Commission on
January 28, 1992, under the Exchange Act and all amendments
and reports filed for the purpose of updating such
description.
All reports and other documents subsequently 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 of the shares of Common Stock
offered have been sold or which deregisters all shares of the Common Stock then
remaining unsold shall be deemed to be incorporated by reference in and a part
of this Registration Statement from the date of filing of such documents.
Any statement contained in a document incorporated, or deemed to be
incorporated, by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or incorporated herein by reference or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Article 6 of the Company's Amended and Restated Bylaws, the
Company is required to indemnify its directors and officers to the fullest
extent permitted by the laws of the State of Minnesota. Minnesota Statutes
Section 302A.521 requires the Company to indemnify a person made or threatened
to be made a party to a proceeding, by reason of the former or present official
capacity of the person with respect to the Company, against judgments,
penalties, fines, including without limitation, excise taxes assessed against
the person with respect to an employee benefit plan, settlements, and reasonable
expenses, including attorneys' fees and disbursements, if, with respect to the
acts or omissions of the person complained of in the proceeding, such person (1)
has not been indemnified by another organization or employee benefit plan for
the same judgments, penalties, fines, including without limitation, excise taxes
assessed against the person with respect to an employee benefit plan,
settlements, and reasonable expenses, including attorneys' fees and
disbursements, incurred by the person in connection with the
<PAGE> 3
proceeding with respect to the same acts or omissions; (2) acted in good faith;
(3) received no improper personal benefit, and statutory procedure has been
followed in the case of any conflict of interest by a director; (4) in the case
of a criminal proceeding, had no reasonable cause to believe the conduct was
unlawful; and (5) in the case of acts or omissions occurring in the person's
performance in the official capacity of director or, for a person not a
director, in the official capacity of officer, committee member, employee or
agent, reasonably believed that the conduct was in the best interests of the
Company, or in the case of performance by a director, officer, employee or agent
of the Company as a director, officer, partner, trustee, employee or agent of
another organization or employee benefit plan, reasonably believed that the
conduct was not opposed to the best interests of the Company. In addition,
Section 302A.521, subd. 3, requires payment by the Company upon written request,
of reasonable expenses in advance of final disposition in certain instances. A
decision as to required indemnification is made by a majority of the
disinterested Board of Directors present at a meeting at which a disinterested
quorum is present, or by a designated committee of disinterested directors, by
special legal counsel, by the disinterested shareholders, or by a court.
The Company also maintains a director and officer insurance policy to
cover the Company, its directors and its officers against certain liabilities.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<S> <C>
4.1 Amended and Restated Articles of Incorporation(1)
4.2 Articles of Amendment to Articles of Incorporation, as dated
June 20, 1997(2)
4.3 Amended and Restated Bylaws(3)
5 Opinion of Faegre & Benson LLP
23.1 Consent of Faegre & Benson LLP (contained in Exhibit 5 to this
Registration Statement)
23.2 Consent of Grant Thornton LLP
23.3 Consent of Ernst & Young LLP
24 Powers of Attorney (included on page II-4 of this Registration
Statement)
99.1 InfoAccess, Inc. 1990 Stock Option Plan, as amended.
99.2 InfoAccess, Inc. 1995 Stock Option Plan, as amended.
</TABLE>
- ------------------------
(1) Incorporated by reference to the exhibit 3.1 filed as part of the Company's
Registration Statement on Form SB-2, File No. 333-14175.
(2) Incorporated by reference to Exhibit 3.3 filed as part of the Company's
Annual Report on Form 10-KSB for the year ended March 31, 1997, File No.
0-19817.
(3) Incorporated by reference to Exhibit A filed as part of the Company's
Definitive Proxy Statement on Schedule 14A, filed with the Securities and
Exchange Commission on July 22, 1997, File No. 0-19817.
II-2
<PAGE> 4
ITEM 9. UNDERTAKINGS.
A. 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 of 1933;
(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 Securities and
Exchange Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more
than a twenty percent change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table
in the effective Registration Statement; and
(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)(1)(i) and (A)(1)(ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8, and 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 Securities and Exchange
Commission by the Company pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each 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 which remain unsold at
the termination of the offering.
B. The Company hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) 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.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 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 of 1933 and will be governed by the final adjudication of such issue.
II-3
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the undersigned 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 Eden Prairie, State of Minnesota, on
November 12, 1999.
INTRANET SOLUTIONS, INC.
(Registrant)
By /s/ Robert F. Olson
-------------------------------
Robert F. Olson
Chairman of the Board of Directors,
President and Chief Executive Officer
POWER OF ATTORNEY
Each of the undersigned hereby appoints Robert F. Olson and Gregg A.
Waldon, and each of them (with full power to act alone), as attorneys and agents
for the undersigned, with full power of substitution, for and in the name, place
and stead of the undersigned, to sign and file with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, any and all amendments
and exhibits to this Registration Statement and any and all applications,
instruments and other documents to be filed with the Securities and Exchange
Commission pertaining to the registration of the securities covered hereby, with
full power and authority to do and perform any and all acts and things
whatsoever requisite and necessary or desirable.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons,
representing a majority of the Board of Directors, in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
- ---------------------------------------- --------------------------------------- ------------------------------------
<S> <C> <C>
/s/Robert F. Olson
- ---------------------------------------- Chairman of the Board of Directors, November 12, 1999
Robert F. Olson President and Chief Executive
Officer (Principal Executive
Officer and Director)
/s/Gregg A. Waldon
- ---------------------------------------- Chief Financial Officer, Treasurer, November 12, 1999
Gregg A. Waldon Secretary and Director (Principal
Financial Officer and Principal
Accounting Officer)
/s/Ronald E. Eibensteiner
- --------------------------------------- Director November 12, 1999
Ronald E. Eibensteiner
/s/Kenneth H. Hole
- --------------------------------------- Director November 12, 1999
Kenneth H. Holec
/s/Steven C. Waldron
- --------------------------------------- Director November 12, 1999
Steven C. Waldron
</TABLE>
II-4
<PAGE> 6
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Method
Exhibit Description of Filing
------- ----------- ---------
<S> <C> <C>
Incorporated by
4.1 Amended and Restated Articles of Incorporation(1)............................... Reference
Incorporated by
4.2 Articles of Amendment to Articles of Incorporation, as dated June 20, 1997(2)... Reference
Incorporated by
4.3 Amended and Restated Bylaws(3).................................................. Reference
5 Opinion of Faegre & Benson LLP.................................................. Filed Electronically
23.1 Consent of Faegre & Benson LLP
(contained in its opinion filed as Exhibit 5 to this Registration Statement)
23.2 Consent of Grant Thornton LLP................................................... Filed Electronically
23.3 Consent of Ernst & Young LLP.................................................... Filed Electronically
24 Powers of Attorney
(included on page II-4 of this Registration Statement)
99.1 InfoAccess, Inc. 1990 Stock Option Plan, as amended............................. Filed Electronically
99.2 InfoAccess, Inc. 1995 Stock Option Plan, as amended............................. Filed Electronically
</TABLE>
- ------------------------
(1) Incorporated by reference to exhibit 3.1 filed as part of the Company's
Registration Statement on Form SB-2, File No. 333-14175.
(2) Incorporated by reference to Exhibit 3.3 filed as part of the Company's
Annual Report on Form 10-KSB for the year ended March 31, 1997, File No.
0-19817.
(3) Incorporated by reference to Exhibit A filed as part of the Company's
Definitive Proxy Statement on Schedule 14A, filed with the Securities and
Exchange Commission on July 22, 1997, File No. 0-19817.
<PAGE> 1
EXHIBIT 5
FAEGRE & BENSON LLP
2200 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402
612-336-3000
November 12, 1999
Board of Directors
IntraNet Solutions, Inc.
8901 Wallace Road
Eden Prairie, Minnesota 55344
In connection with the Registration Statement on Form S-8 under the
Securities Act of 1933, as amended (the "Registration Statement"), relating to
the offering of up to 386,576 shares of Common Stock, par value $.01 per share
(the "Shares"), of IntraNet Solutions, Inc., a Minnesota corporation (the
"Company"), pursuant to the InfoAccess 1990 Stock Option Plan, as amended, and
the InfoAccess 1995 Stock Option Plan, as amended, we have examined such
corporate records and other documents, including the Registration Statement, and
have reviewed such matters of law as we have deemed relevant hereto, and, based
upon such examination and review, it is our opinion that all necessary corporate
action on the part of the Company has been taken to authorize the issuance and
sale of the Shares and that, when issued and sold as contemplated in the
Registration Statement, the Shares will be legally and validly issued, fully
paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ FAEGRE & BENSON LLP
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated April 14, 1999 (except for Note 15, as to
which the date is June 9, 1999) accompanying the consolidated financial
statements of IntraNet Solutions, Inc. and subsidiaries included in the Annual
Report on Form 10-K for the year ended March 31, 1999 which is incorporated by
reference in this Registration Statement. We consent to the incorporation by
reference in this Registration Statement on Form S-8 of the aforementioned
report.
/s/ GRANT THORNTON LLP
Minneapolis, Minnesota
November 12, 1999
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the InfoAccess, Inc. 1990 Stock Option Plan and
InfoAccess, Inc. 1995 Stock Option Plan of our report dated June 30, 1997,
except for Note 9, as to which the date is April 28, 1999, with respect to the
consolidated financial statements of IntraNet Solutions, Inc. included in its
Annual Report on Form 10-K for the year ended March 31, 1999, filed with the
Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Minneapolis, Minnesota
November 12, 1999
<PAGE> 1
EXHIBIT 99.1
INFOACCESS, INC.
1990 STOCK OPTION PLAN
(as amended, effective September 29, 1999)
I. Purpose
The InfoAccess, Inc. 1990 Stock Option Plan (the "Plan") provides for
the grant of stock options to key Employees (as defined below) of, InfoAccess
Inc. (the "Company") or of the Parent Corporation or Subsidiary Corporation of
the Company or any subsidiary of the Company in order to advance the interests
of the Company through the motivation, attraction and retention of its key
Employees. The stock options ("Stock Options") offered pursuant to this Plan are
a matter of separate inducement and are not in lieu of any other compensation
for the services of any key Employee.
II. Incentive Stock Options and Nonstatutory Stock Options
The Stock Options granted under the Plan may be either:
(a) Incentive Stock Options ("ISOs") which are intended to be
"incentive stock options" as defined in Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"); or
(b) Nonstatutory Stock Options ("NSOs") which are intended to
be options that do not qualify as "incentive stock options" under Section 422 of
the Code;
but the Company makes no warranty as to the qualification of any Stock Option as
an "incentive stock option" under the Code. Subject to the other provisions of
the Plan, a Participant (as defined below) may receive ISOs and NSOs at the same
time, provided that the ISOs and NSOs are clearly designated as such.
Except as otherwise expressly provided herein, all of the provisions
and requirements of the Plan relating to Stock Options shall apply to both ISOs
and NSOs.
III. Administration
3.1 Compensation Committee. With respect to grants of Stock Options to
Employees, the Plan shall be administered by the Compensation Committee (the
"Committee") which shall consist of two (2) members of the board of directors of
the Company (the "Board of Directors"). The Committee shall have full authority
to administer the Plan, including authority to interpret and construe any
provision of the Plan and any Stock Option granted thereunder and to adopt such
rules and regulations for administering the Plan as it may deem necessary in
order to comply with the requirements of the Code or in order that Stock Options
that are intended to be ISOs will be classified as "incentive stock options"
under the Code, or in order to conform to any regulation or to any change in any
law or regulation applicable thereto. The Board of Directors may perform and
discharge all
<PAGE> 2
of the functions and responsibilities of the Committee at any time
that a duly constituted Committee is not appointed and serving. All references
in the Plan to the "Committee" shall be deemed to refer to the Board of
Directors whenever the Board of Directors is discharging the powers and
responsibilities of the Committee.
3.2 Actions of Committee. All actions taken and all interpretations and
determinations made by the Committee in good faith (including determinations of
Fair Market Value (as defined below)) shall be made by a majority vote of the
Committee and shall be final and binding upon all Participants, the Company and
all other interested persons. No member of the Committee shall be personally
liable for any action, determination or interpretation made in good faith with
respect to the Plan, and all members of the Committee shall, in addition to
their rights as directors, be fully protected by the Company with respect to any
such action, determination or interpretation.
IV. Definitions
4.1 "Stock Option." A Stock Option is the right granted under the Plan
to an Employee to purchase, at such time or times, and at such price or prices
("Option Price"), as are determined by the Committee, the number of shares of
Common Stock determined by the Committee.
4.2 "Common Stock." A share of Common Stock means a share of authorized
but unissued or reacquired Common Stock (no par value) of the Company.
4.3 "Fair Market Value." For the purpose of this Plan, the Fair Market
Value of a share of Common Stock on any date shall be determined, without regard
to any restriction on any such share, in good faith, by the Committee, subject
to approval by the Board of Directors, and after such consultation with outside
legal, accounting and other experts as the Committee may deem advisable. The
Committee shall maintain a written record of its method of determining such
value. In the event the Common Stock is traded publicly, the Fair Market Value
of a share of Common Stock shall be the average of the representative closing
bid and asked prices, as quoted by the National Association of Securities
Dealers through NASDAQ (its automated system for reporting quotes), for the date
in question, or, if the Common Stock is listed on the NASDAQ National Market
System or is listed on a national stock exchange, the officially quoted closing
price on NASDAQ or such exchange, as the case may be, on the date in question.
4.4 "Employee." An Employee is an employee of the Company or of any
Parent Corporation or Subsidiary Corporation of the Company.
4.5 "Participant." A Participant is an Employee to whom a Stock Option
is granted.
4.6 "Parent Corporation" or "Subsidiary Corporation." A Parent
Corporation or Subsidiary Corporation shall mean, respectively, a corporation
coming within the definition of such terms contained in Section 424 of the Code.
2
<PAGE> 3
V. Eligibility and Participation
Grants of Stock Options may be made to any Employee, including any
director of the Company who is also an Employee. The Committee shall from time
to time determine the Employees to whom Stock Options shall be granted, the
number of shares of Common Stock subject to each Stock Option to be granted to
each such Employee, the Option Price of such Stock Options, and the terms and
provisions of such Stock Options, in accordance with the provisions of this
Plan. The Option Price for each share of Common Stock that may be purchased
under an ISO shall be not less than the Fair Market Value of a share of Common
Stock on the date on which the Stock Option is granted, but the Option Price for
each share of Common Stock that may be purchased under an NSO may be less than
the Fair Market Value of a share of Common Stock on the date the NSO is granted
if the Committee so determines. If an ISO is granted to an Employee who then
owns stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or any Parent Corporation or Subsidiary
Corporation of the Company (a "10% stockholder"), the Option Price of such ISO
shall be at least 110% of the Fair Market Value of the Common Stock subject to
the ISO at the time such ISO is granted. Each Stock Option shall be evidenced by
a written agreement ("Option Agreement") containing such terms and provisions as
the Committee may determine, subject to the provisions of this Plan. Each Option
Agreement evidencing an ISO shall provide that, if the Participant makes a
disqualifying disposition (as defined in Section 421(b) of the Code) of the
shares acquired upon exercise of a Stock Option, he shall promptly notify the
Company in writing of such disposition.
VI. Shares of Common Stock Subject to the Plan
6.1 Maximum Number. The maximum aggregate number of shares of Common
Stock that may be made subject to Stock Options shall be 480,390 authorized but
unissued or reacquired shares. To the extent that the aggregate Fair Market
Value (determined as of the time the ISO is granted) of the stock as to which
ISOs are exercisable for the first time by the optionee during any calendar year
(under this Plan and all other incentive stock option plans of the Company, a
Parent Corporation or a Subsidiary Corporation) exceeds $100,000, such options
shall be treated as NSOs. If any shares of Common Stock subject to Stock Options
are not purchased or otherwise paid for before such Stock Options expire, such
shares may again be made subject to Stock Options.
6.2 Capital Changes. In the event any changes are made to the shares of
Common Stock (whether by reason of merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, combination of shares, exchange
of shares, change in corporate structure or otherwise), appropriate adjustments
shall be made in: (i) the number of shares of Common Stock theretofore made
subject to Stock Options and in the purchase price of said shares and (ii) the
aggregate number of shares which may be made subject to Stock Options. If any of
the foregoing adjustments shall result in a fractional share, the fraction shall
be disregarded, and the Company shall have no obligation to make any cash or
other payment with respect to such a fractional share.
3
<PAGE> 4
VII. Exercise of Stock Options
7.1 Time of Exercise. Subject to the provisions of the Plan, the
Committee, in its discretion, shall determine the time when a Stock Option, or a
portion of a Stock Option, shall become exercisable, and the time when a Stock
Option, or a portion of a Stock Option, shall expire. Such time or times shall
be set forth in the Option Agreement evidencing such Stock Option. A Stock
Option shall expire, to the extent not exercised, no later than the tenth
anniversary of the Effective Date of the Plan, except that ISOs granted to 10%
stockholders shall expire, to the extent not exercised, no later than the fifth
anniversary of the date on which they were granted.
7.2 Use of Promissory Note; Exercise Loans. The Committee may, in its
sole discretion but subject to approval by the Board of Directors, permit a
Participant to deliver to the Company his promissory note as full or partial
payment for the exercise of a Stock Option; provided that all terms of such note
shall be determined by the Committee, in its sole discretion but subject to
approval by the Board of Directors, at the time a Stock Option is granted and
set forth in the Option Agreement. The Committee may, in its sole discretion but
subject to approval by the Board of Directors, authorize the Company to make a
loan to a Participant in connection with the exercise of Stock Options, or may
authorize the Company to arrange or guaranty loans to a Participant by a third
party.
7.3 Deleted.
7.4 Termination of Employment Before Exercise. Upon termination of
employment of any Participant with the Company and any Parent Corporation or
Subsidiary Corporation of the Company, any Stock Option previously granted to
the Participant, unless otherwise specified by the Committee in the Stock
Option, shall, to the extent not theretofore exercised, terminate and become
null and void, provided that:
(a) if the Participant shall die while in the employ of the
Company or any Parent Corporation or Subsidiary Corporation of the Company or
during either the three (3) month or one (1) year period, whichever is
applicable, specified in clause (b) below and at a time when such Participant
was entitled to exercise a Stock Option as herein provided, the legal
representative of such Participant, or such person who acquired such Stock
Option by bequest or inheritance or by reason of the death of the Participant,
may, not later than one (1) year from the date of death, exercise such Stock
Option, to the extent not theretofore exercised, in respect of any or all such
number of shares of Common Stock as to which the Stock Option was exercisable at
the date of the Participant's death; and
(b) if the employment of any Participant to whom such Stock
Option shall have been granted shall terminate by reason of the Participant's
retirement (at such age or upon such condition as shall be specified by the
Committee) , disability (as described in Section 22(e)(3) of the Code) or
dismissal by the employer other than for cause (as defined below), and while
such Participant is entitled to exercise such Stock Option as herein provided,
such Participant shall have the right to exercise such Stock Option so granted,
to the extent not theretofore exercised, in respect of any or all of such number
of Shares of
4
<PAGE> 5
Common Stock as to which the Stock Option was exercisable on the date the
Participant's employment with the Company or such Parent Corporation or
Subsidiary Corporation of the Company was terminated, at any time up to and
including (i) three (3) months after the date of such termination of employment
in the case of termination by reason of retirement or dismissal other than for
cause and (ii) one (1) year after the date of termination of employment in the
case of termination by reason of disability.
In no event, however, shall any person be entitled to exercise any
Stock Option after the expiration of the period of exercisability of such Stock
Option as specified therein.
If a Participant voluntarily terminates his or her employment, or is
discharged for cause, any Stock Option granted hereunder shall, unless otherwise
specified by the Committee in the Option Agreement, forthwith terminate with
respect to any unexercised portion thereof.
For the purposes of this Plan, the term "for cause" shall mean (i) with
respect to a Participant who is a party to a written agreement with, or,
alternatively, participates in a compensation or benefit plan of the Company or
a Parent Corporation or Subsidiary Corporation of the Company, which agreement
or plan contains a definition of "cause" (or words of like import) for purposes
of termination of employment thereunder by the Company or such Parent
Corporation or Subsidiary Corporation of the Company, "cause" as defined in the
most recent of such agreements or plans or (ii) in all other cases, (A) the
inability of the Participant to perform his or her duties for the Company for a
period in excess of ninety (90) consecutive calendar days or for more than one
hundred twenty (120) total days during any calendar year; (B) dishonesty; (C)
theft; (D) drunkenness; (E) unethical business conduct; (F) material breach of
any agreement with the Company; or (G) the failure of the Participant for any
reason, within ten (10) days after receipt by the Participant of written notice
thereof from the Company, to correct, cease or otherwise alter any
insubordination, failure to comply with instructions or other action or omission
to act that the Company believes does or may adversely affect its business
or operations.
For the purposes of the Plan, an employment relationship shall be
deemed to exist between an individual and the Company or any Parent Corporation
or Subsidiary Corporation of the Company if, at the time of the determination,
the individual was an "employee" of the Company or of any Parent Corporation or
Subsidiary Corporation of the Company for purposes of Section 422 of the Code.
If an individual is on military, sick leave or other bona fide leave of absence,
such individual shall be considered an "employee" for purposes of the exercise
of a Stock Option and shall be entitled to exercise such Stock Option during
such leave if the period of such leave does not exceed ninety (90) days, or, if
longer, so long as the individual's right to reemployment with the Company or
any Parent Corporation or Subsidiary Corporation of the Company is guaranteed
either by statute or by contract. If the period of leave exceeds ninety (90)
days, the employment relationship shall be deemed to have terminated on the
ninety-first (91st) day of such leave, unless the individual's right to
reemployment is guaranteed by statute or contract.
A termination of employment shall not be deemed to occur by reason of
(i) the transfer of a Participant from employment by the Company to employment
by a Parent Corporation or Subsidiary Corporation of the Company or (ii) the
transfer of a Participant from employment by a Parent Corporation or Subsidiary
Corporation of the Company to employment by the Company or another Parent
Corporation or Subsidiary Corporation of the Company.
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<PAGE> 6
VIII. No Contract of Employment
Nothing in this Plan shall confer upon the Participant the right to
continue in the employ of the Company, nor shall it interfere in any way with
the right of the Company or any Parent Corporation or Subsidiary Corporation of
the Company to discharge the Participant at any time for any reason whatsoever,
with or without cause. Nothing in this Article VIII shall affect any rights or
obligations of the Company, any Parent Corporation or Subsidiary Corporation of
the Company or any Participant under any written contract of employment.
IX. No Rights as a Stockholder
A Participant shall have no rights as a stockholder with respect to any
shares of Common Stock subject to a Stock Option. Except as provided in Section
6.2 hereof, no adjustment shall be made in the number of shares of Common Stock
issued to a Participant, or in any other rights of the Participant upon exercise
of a Stock Option by reason of any dividend, distribution or other right granted
to stockholders for which the record date is prior to the date of exercise of
the Participant's Stock Option.
X. Assignability
No Stock Option granted under this Plan, nor any other rights acquired
by a Participant under this Plan, shall be assignable or transferable by a
Participant, other than by will or the laws of descent and distribution, and are
exercisable, during his lifetime, only by him. Notwithstanding the preceding
sentence, the Committee may, in its sole discretion, permit the assignment or
transfer of an NSO, and the exercise thereof by a person other than a
Participant, on such terms and conditions as the Committee in its sole
discretion may determine. In the event of the death of a Participant, the Stock
Option may be exercised, subject to the provisions thereof and hereof, by the
executor or personal representative of the Participant's estate or, if no
executor or personal representative has been appointed, by the successor or
successors in interest determined under the Participant's will or under the
applicable laws of descent and distribution.
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XI. Merger or Liquidation of the Company
If the Company or its stockholders enter into an agreement to dispose
of all, or substantially all, of the assets or outstanding capital stock of the
Company by means of a sale or liquidation, or a merger or reorganization in
which the Company is not the surviving corporation, all Stock Options
outstanding under the Plan as of the day before the consummation of such sale,
liquidation, merger or reorganization, to the extent not exercised, shall for
all purposes under the Plan become exercisable in full as of such date even
though the dates of exercise established pursuant to Section 7.1 have not yet
occurred, unless the Board of Directors shall have prescribed other terms and
conditions to the exercise of the Stock Options, or otherwise modified the Stock
Options.
XII. Amendment
The Board of Directors may from time to time alter, amend, suspend or
discontinue the Plan, including, where applicable, any modifications or
amendments as it shall deem advisable in order that ISOs will be classified as
"incentive stock options" under the Code, or in order to conform to any
regulation or to any change in any law or regulation applicable thereto;
provided, however, that no such action shall adversely affect the rights and
obligations with respect to Stock Options at any time outstanding under the Plan
and provided that, if required by the Code or any other applicable law, the
approval of the holders of a majority of the Company's outstanding shares of
voting capital stock voting either in person or by proxy at a duly held
shareholders' meeting is necessary within twelve months before or after the
adoption by the Board of any amendment which will:
(a) increase the number of shares which are to be reserved for the
issuance of options under this Plan; or
(b) permit the granting of stock options to a class of persons other
than those presently permitted to receive stock options under this Plan.
XIII. Purchase for Investment
Except as hereafter provided, the holder of a Stock Option granted
hereunder shall, upon any exercise thereof, execute and deliver to the Company a
written statement, in form satisfactory to the Company, in which such holder
represents and warrants that such holder is purchasing or acquiring the shares
acquired thereunder for such holder's own account, for investment only and not
with a view to the resale or distribution thereof, and agrees that any
subsequent offer for sale or sale or distribution of any of such shares shall be
made only pursuant to either (a) a Registration Statement on an appropriate form
under the Securities Act of 1933, as amended (the "Securities Act"), which
Registration Statement has become effective and is current with regard to the
shares being offered or sold or (b) a specific exemption from the registration
requirements of the Securities Act, but in claiming such exemption the holder
shall, prior to any offer for sale or sale of such shares, obtain a prior
favorable written opinion, in form and substance satisfactory to the Company,
from counsel for or approved by the Company, as to the applicability of such
exemption thereto. The
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<PAGE> 8
foregoing restriction shall not apply to (i) issuances by the Company so long as
the shares being issued are registered under the Securities Act and a prospectus
in respect thereof is current or (ii) reofferings of shares by affiliates of the
Company (as defined in Rule 405 or any successor rule or regulation promulgated
under the Securities Act) if the shares being reoffered are registered under the
Securities Act and a prospectus in respect thereof is current.
XIV. Issuances of Certificates; Legends; Payment of Expenses
Upon any exercise of a Stock Option and payment of the Option Price, a
certificate or certificates for the shares as to which the Stock Option has been
exercised shall be issued by the Company in the name of the person exercising
the Stock Option and shall be delivered to or upon the order of such person or
persons.
The Company may endorse such legend or legends upon the certificates
for shares issued upon exercise of a Stock Option granted hereunder and may
issue such "stop transfer" instructions to its transfer agent in respect of such
shares as, in its discretion, it determines to be necessary or appropriate to
(i) prevent a violation of, or to perfect an exemption from, the registration
requirements of the Securities Act, (ii) implement the provisions of the Plan
and any agreement between the Company and the Participant with respect to such
shares, or (iii) permit the Company to determine the occurrence of a
disqualifying disposition, as described in Section 421(b) of the Code, of shares
transferred upon exercise of an ISO granted under the Plan.
The Company shall pay all issue or transfer taxes with respect to the
issuance or transfer of shares, as well as all fees and expenses necessarily
incurred by the Company in connection with such issuance or transfer, except
fees and expenses which may be necessitated by the filing or amending of a
Registration Statement under the Securities Act, which fees and expenses shall
be borne by the recipient of the shares unless such Registration Statement has
been filed by the Company for its own corporate purposes (and the Company so
states) in which event the recipient of the shares shall bear only such fees and
expenses as are attributable solely to the inclusion of the shares he or she
receives in the Registration Statement.
XV. Withholding Taxes
The Company may take such steps as it may deem necessary or appropriate
for the withholding of any taxes which the Company or any Parent Corporation or
Subsidiary Corporation of the Company is required by any law or regulation or
any governmental authority, whether federal, state, local, domestic or foreign,
to withhold in connection with any Stock Option including, but not limited to,
the withholding of all or any portion of any payment or the withholding of
issuance of shares of Common Stock to be issued upon the exercise of any Stock
Option, until the Participant reimburses the Company or any Parent Corporation
or Subsidiary Corporation of the Company for the amount required to be withheld
with respect to such taxes, or canceling any portion of such payment or issuance
in any amount sufficient to reimburse itself for the amount it is required to so
withhold.
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<PAGE> 9
XVI. Effective Date
This Plan was adopted by the Board of Directors and became effective on
November 8, 1990 (the "Effective Date"), subject to approval of the stockholders
within twelve (12) months after such date. No Stock Options shall be granted
subsequent to ten (10) years after the Effective Date.
Adopted by the Board of Directors on November 8, 1990, amended and
restated by the Board of Directors on July 26, 1991 and approved by the
stockholders on July 26, 1991. Amended, restated and adopted by IntraNet
Solutions, Inc., a Minnesota corporation, effective as of September 29, 1999.
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<PAGE> 1
EXHIBIT 99.2
INFOACCESS, INC.
1995 STOCK OPTION PLAN
(as amended, effective September 29, 1999)
SECTION 1. PURPOSE
The purpose of the InfoAccess, Inc. 1995 Stock Option Plan (this
"Plan") is to provide a means whereby selected employees, directors, officers,
agents, consultants, advisors and independent contractors of InfoAccess, Inc.
(the "Company"), or of any parent or subsidiary (as defined in subsection 5.8
and referred to hereinafter as "related corporations") thereof, may be granted
incentive stock options and/or nonqualified stock options to purchase the Common
Stock (as defined in Section 3) of the Company, in order to attract and retain
the services or advice of such employees, directors, officers, agents,
consultants, advisors and independent contractors and to provide added incentive
to such persons by encouraging stock ownership in the Company.
SECTION 2. ADMINISTRATION
This Plan shall be administered by the Board of Directors of the
Company (the "Board") or, in the event the Board shall appoint and/or authorize
a committee to administer this Plan, by such committee. The administrator of
this Plan shall hereinafter be referred to as the "Plan Administrator."
In the event a member of the Plan Administrator may be eligible,
subject to the restrictions set forth in Section 4, to participate in this Plan,
no member of the Plan Administrator shall vote with respect to the granting of
an option hereunder to himself or herself, as the case may be, and, if state
corporate law does not permit a committee to grant options to directors, then
any option granted under this Plan to a director for his or her services as such
shall be approved by the full Board.
The members of any committee serving as Plan Administrator shall be
appointed by the Board for such term as the Board may determine. The Board may
from time to time remove members from, or add members to, the committee.
Vacancies on the committee, however caused, shall be filled by the Board.
With respect to grants made under this Plan to individuals who are
subject to Section 16 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the Plan Administrator shall be constituted at all times so as
to meet the requirements of Rule l6b-3 promulgated under Section 16(b) of the
Exchange Act if any of the Company's equity securities are registered pursuant
to Section 12(b) or 12(g) of the Exchange Act.
2.1 PROCEDURES
The Board shall designate one of the members of the Plan Administrator
as chairman. The Plan Administrator may hold meetings at such times and places
as it shall determine.
<PAGE> 2
The acts of a majority of the members of the Plan Administrator present at
meetings at which a quorum exists, or acts reduced to or approved in writing by
all Plan Administrator members, shall be valid acts of the Plan Administrator.
2.2 RESPONSIBILITIES
Except for the terms and conditions explicitly set forth in this Plan,
the Plan Administrator shall have the authority, in its discretion, to determine
all matters relating to the options to be granted under this Plan, including
selection of the individuals to be granted options, the number of shares to be
subject to each option, the exercise price, and all other terms and conditions
of the options. Grants under this Plan need not be identical in any respect,
even when made simultaneously. The interpretation and construction by the Plan
Administrator of any terms or provisions of this Plan or any option issued
hereunder, or of any rule or regulation promulgated in connection herewith,
shall be conclusive and binding on all interested parties, so long as such
interpretation and construction with respect to incentive stock options
correspond to the requirements of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), the regulations thereunder and any amendments
thereto.
2.3 RULE 16B-3 COMPLIANCE AND BIFURCATION OF PLAN
It is the intention of the Company that, if any of the Company's equity
securities are registered pursuant to Section 12(b) or 12(g) of the Exchange
Act, this Plan shall comply in all respects with Rule 16b-3 under the Exchange
Act. If any Plan provision is later found not to be in compliance with such
Section, the provision shall be deemed null and void, and in all events this
Plan shall be construed in favor of its meeting the requirements of Rule 16b-3.
Notwithstanding anything in this Plan to the contrary, the Board, in its
absolute discretion, may bifurcate this Plan so as to restrict, limit or
condition the application of any provision of this Plan to participants who are
subject to Section 16 of the Exchange Act without so restricting, limiting or
conditioning this Plan with respect to other participants.
SECTION 3. SHARES SUBJECT TO THIS PLAN
The shares subject to this Plan shall be the Company's no par value
Common Stock (the "Common Stock"), currently authorized but unissued or
subsequently acquired by the Company. Subject to adjustment as provided in
Section 7, the aggregate amount of Common Stock to be delivered upon the
exercise of all options granted under this Plan shall not exceed 100,000 shares
as such Common Stock was constituted on the effective date of this Plan. If any
option granted under this Plan shall expire or be surrendered, exchanged for
another option, canceled or terminated for any reason without having been
exercised in full, the unpurchased shares subject thereto shall thereupon again
be available for purposes of this Plan, including for replacement options which
may be granted in exchange for such expired, surrendered, exchanged, canceled or
terminated options.
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SECTION 4. ELIGIBILITY
An incentive stock option may be granted only to an individual who, at
the time the option is granted, is an employee of the Company or a related
corporation. A nonqualified stock option may be granted to any employee,
director, officer, agent, consultant, advisor or independent contractor of the
Company or any related corporation, whether an individual or an entity. Any
party to whom an option is granted under this Plan shall be referred to
hereinafter as an "Optionee."
SECTION 5. TERMS AND CONDITIONS OF OPTIONS
Options granted under this Plan shall be evidenced by written
agreements which shall contain such terms, conditions, limitations and
restrictions as the Plan Administrator shall deem advisable and which are not
inconsistent with this Plan. Notwithstanding the foregoing, options shall
include or incorporate by reference the following terms and conditions:
5.1 NUMBER OF SHARES AND PRICE
The maximum number of shares that may be purchased pursuant to the
exercise of each option and the price per share at which such option is
exercisable (the "exercise price") shall be as established by the Plan
Administrator; provided that the Plan Administrator shall act in good faith to
establish an exercise price which shall be not less than the fair market value
per share of the Common Stock at the time the option is granted and also
provided that, with respect to incentive stock options granted to greater than
10% shareholders, the exercise price shall be as required by subsection 6.1.
5.2 TERM AND MATURITY
Subject to the restrictions contained in Section 6 with respect to
granting incentive stock options to greater than 10% shareholders, the term of
each incentive stock option shall be as established by the Plan Administrator
and, if not so established, shall be 10 years from the date it is granted but in
no event shall it exceed 10 years. The term of each nonqualified stock option
shall be as established by the Plan Administrator and, if not so established,
shall be 10 years. To ensure that the Company or a related corporation will
achieve the purpose and receive the benefits contemplated by this Plan, any
option granted to any Optionee hereunder shall, unless otherwise set forth in
the agreement evidencing the option or a resolution adopted by the Plan
Administrator, be exercisable according to the following schedule:
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<TABLE>
<CAPTION>
Period of Optionee's Continuous
Relationship with the Company or
Related Corporation from the Date Portion of Total Option Which Is
the Option is Granted Exercisable
- ------------------------------------------------------ -----------------------------------------------------------
<S> <C>
after two years 25%
after three years 50%
after four years 75%
after five years 100%
</TABLE>
5.3 EXERCISE
Subject to the vesting schedule described in subsection 5.2, each
option may be exercised in whole or in part at any time and from time to time;
provided, however, that no fewer than 100 shares (or the remaining shares then
purchasable under the option, if less than 100 shares) may be purchased upon any
exercise of option hereunder and that only whole shares will be issued pursuant
to the exercise of any option. An Option shall be exercised by delivery to the
Company of notice of the number of shares with respect to which the option is
exercised, together with payment of the exercise price.
5.4 PAYMENT OF EXERCISE PRICE
Payment of the option exercise price shall be made in full at the time
the notice of exercise of the option is delivered to the Company and shall be in
cash, bank certified or cashier's check, or personal check (unless at the time
of exercise the Plan Administrator in a particular case determines not to accept
a personal check) for the shares being purchased.
The Plan Administrator can determine at any time before exercise that
additional forms of payment will be permitted. To the extent permitted by the
Plan Administrator and applicable laws and regulations (including, but not
limited to, federal tax and securities laws and regulations and state corporate
law), an option may be exercised by:
(a) delivery of shares of Common Stock of the Company held by
an Optionee having a fair market value equal to the exercise price, such fair
market value to be determined in good faith by the Plan Administrator; provided,
however, that payment in stock held by an Optionee shall not be made unless the
stock shall have been owned by the Optionee for a period of at least six months;
or
(b) delivery of a full-recourse promissory note executed by
the Optionee; provided that (i) such note delivered in connection with an
incentive stock option shall, and such note delivered in connection with a
nonqualified stock option may, in the sole discretion of the Plan Administrator,
bear interest at a rate specified by the Plan Administrator but in no case less
than the rate required to avoid imputation of interest (taking into account any
exceptions to the imputed interest rules) for federal income tax purposes, (ii)
the Plan
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<PAGE> 5
Administrator in its sole discretion shall specify the term and other provisions
of such note at the time an incentive stock option is granted or at any time
prior to exercise of a nonqualified stock option, (iii) the Plan Administrator
may require that the Optionee pledge to the Company for the purpose of securing
the payment of such note the shares of Common Stock to be issued to the Optionee
upon exercise of the option and may require that the certificate representing
such shares be held in escrow in order to perfect the Company's security
interest, and (iv) the Plan Administrator in its sole discretion may at any time
restrict or rescind this right upon notification to the Optionee.
5.5 WITHHOLDING TAX REQUIREMENT
The Company or any related corporation shall have the right to retain
and withhold from any payment of cash or shares of Common Stock under this Plan
the amount of taxes required by any government to be withheld or otherwise
deducted and paid with respect to such payment. At its discretion, the Company
may require an Optionee receiving shares of Common Stock to reimburse the
Company for any such taxes required to be withheld by the Company and withhold
any distribution in whole or in part until the Company is so reimbursed. In lieu
thereof, the Company shall have the right to withhold from any other cash
amounts due or to become due from the Company to the Optionee an amount equal to
such taxes. The Company may also retain and withhold or the Optionee may elect,
subject to approval by the Company at its sole discretion, to have the Company
retain and withhold a number of shares having a market value not less than the
amount of such taxes required to be withheld by the Company to reimburse the
Company for any such taxes and cancel (in whole or in part) any such shares so
withheld. In order to qualify such election for exemption under Rule 16b-3
promulgated under Section 16(b) of the Exchange Act, any individual who is
subject to Section 16 under the Exchange Act must exercise the option during the
quarterly 10-day window period required under Section 16(b) of the Exchange Act
for exercises of stock appreciation rights, and the election relating to such
option exercise must be (i) an irrevocable election made six months prior to the
date the option exercise becomes taxable; (ii) an election that is made during a
window period; or (iii) an election that is made prior to a window period,
provided the election becomes effective as of the next window period.
5.6 HOLDING PERIODS
5.6.1 TAXATION OF STOCK OPTIONS
In order to obtain certain tax benefits afforded to incentive stock
options under Section 422 of the Code, an Optionee must hold the shares issued
upon the exercise of an incentive stock option for two years after the date of
grant of the option and one year from the date of exercise. An Optionee may be
subject to the alternative minimum tax at the time of exercise of an incentive
stock option.
The Plan Administrator may require an Optionee to give the Company
prompt notice of any disposition of shares acquired by the exercise of an
incentive stock option prior to the expiration of such holding periods.
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<PAGE> 6
Tax advice should be obtained by an Optionee when exercising any option
and prior to the disposition of the shares issued upon the exercise of any
option.
5.7 TRANSFERABILITY OF OPTIONS
Options granted under this Plan and the rights and privileges conferred
hereby may not be transferred, assigned, pledged or hypothecated in any manner
(whether by operation of law or otherwise) other than by will or by the
applicable laws of descent and distribution and shall not be subject to
execution, attachment or similar process. During an Optionee's lifetime, any
options granted under this Plan are personal to him or her and are exercisable
solely by such Optionee. Any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of any option under this Plan or of any right or privilege
conferred hereby, contrary to the Code or to the provisions of this Plan, or the
sale or levy or any attachment or similar process upon the rights and privileges
conferred hereby shall be null and void. Notwithstanding the foregoing, to the
extent permitted by Rule 16b-3 under the Exchange Act and other applicable law
and regulation, the Plan Administrator may permit an Optionee to (i) during the
Optionee's lifetime, designate a person who may exercise the option after the
Optionee's death by giving written notice of such designation to the Company
(such designation may be changed from time to time by the Optionee by giving
written notice to the Company revoking any earlier designation and making a new
designation) or (ii) with respect to nonqualified stock options, transfer the
option and the rights and privileges conferred hereby.
5.8 TERMINATION OF RELATIONSHIP
If the Optionee's relationship with the Company or any related
corporation ceases for any reason other than termination for cause, death or
total disability, and unless by its terms the option sooner terminates or
expires, then the Optionee may exercise, for a thirty-day period, that portion
of the Optionee's option which is exercisable at the time of such cessation, but
the Optionee's option shall terminate at the end of such period following such
cessation as to all shares for which it has not theretofore been exercised,
unless such provision is waived in the agreement evidencing the option. If, in
the case of an incentive stock option, an Optionee's relationship with the
Company or any related corporation changes (i.e., from employee to nonemployee,
such as a consultant), such change shall constitute a termination of an
Optionee's employment with the Company or any related corporation and the
Optionee's incentive stock option shall terminate in accordance with this
subsection 5.8. If an Optionee is terminated for cause, each option granted
hereunder shall automatically terminate as of the first discovery by the Company
of any reason for termination for cause, and such Optionee shall thereupon have
no right to purchase any shares pursuant to such option. "Cause" means
reasonable cause given by Employee to the Company for termination of Employee's
employment with the Company. Cause includes, but is not necessarily limited to,
the following:
(a) any failure of Employee to exercise good faith and
easonable efforts to carry out the directions of the Board or the
President;
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<PAGE> 7
(b) any violation by Employee of any criminal law
involving the commission of a crime against the Company or a felony;
(c) any habitual or repeated misuse of alcohol or any
controlled substance by Employee;
(d) any misrepresentation, deception, fraud, dishonesty,
misconduct or conflict of interest which adversely affects the
Company's business, good will or reputation; or
(e) any violation of any Company policy.
If an Optionee's relationship with the Company or any related
corporation is suspended pending an investigation of whether or not the Optionee
shall be terminated for cause, the Optionee's rights under each option granted
hereunder likewise shall be suspended during the period of investigation.
If an Optionee's relationship with the Company or any related
corporation ceases because of a total disability, the Optionee's option shall
not terminate or, in the case of an incentive stock option, cease to be treated
as an incentive stock option until the end of the 3-month period following such
cessation (unless by its terms it sooner terminates or expires). As used in this
Plan, the term "total disability" refers to a mental or physical impairment of
the Optionee which is expected to result in death or which has lasted or is
expected to last for a continuous period of 3 months or more and which causes
the Optionee to be unable, in the opinion of the Company and two independent
physicians, to perform his or her duties for the Company and to be engaged in
any substantial gainful activity. Total disability shall be deemed to have
occurred on the first day after the Company and the two independent physicians
have furnished their opinion of total disability to the Plan Administrator.
Options granted under the Plan shall not be affected by any change of
relationship with the Company so long as the Optionee continues to be an
employee, director, officer, agent, consultant, advisor or independent
contractor of the Company or of a related corporation. However, a change in an
Optionee's status from an employee to a nonemployee (e.g., consultant or
independent contractor) shall result in the termination of an outstanding
incentive stock option held by such Optionee. The Plan Administrator, in its
absolute discretion, may determine all questions of whether particular leaves of
absence constitute a termination of services; provided, however, that with
respect to incentive stock options, such determination shall be subject to any
requirements contained in the Code. The foregoing notwithstanding, with respect
to incentive stock options, employment shall not be deemed to continue beyond
the first 90 days of such leave, unless the Optionee's reemployment rights are
guaranteed by statute or by contract.
As used herein, the term "related corporation," when referring to a
subsidiary corporation, shall mean any corporation (other than the Company) in,
at the time of the granting of the option, an unbroken chain of corporations
ending with the Company, if stock possessing 50% or more of the total combined
voting power of all classes of stock of each of
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<PAGE> 8
the corporations other than the Company is owned by one of the other
corporations in such chain. When referring to a parent corporation, the term
"related corporation" shall mean any corporation in an unbroken chain of
corporations ending with the Company if, at the time of the granting of the
option, each of the corporations other than the Company owns stock possessing
50% or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.
5.9 DEATH OF OPTIONEE
If an Optionee dies while he or she has a relationship with the Company
or any related corporation or within the thirty-day period (or 3-month period in
the case of totally disabled Optionees) following cessation of such
relationship, any option held by such Optionee, to the extent that the Optionee
would have been entitled to exercise such option, may be exercised within one
year after his or her death by the personal representative of his or her estate
or by the person or persons to whom the Optionee's rights under the option shall
pass (i) by will or by the applicable laws of descent and distribution or (ii)
by a designation or transfer pursuant to Section 5.7.
5.10 NO STATUS AS SHAREHOLDER
Neither the Optionee nor any party to which the Optionee's rights and
privileges under the option may pass shall be, or have any of the rights or
privileges of, a shareholder of the Company with respect to any of the shares
issuable upon the exercise of any option granted under this Plan unless and
until such option has been exercised.
5.11 CONTINUATION OF RELATIONSHIP
Nothing in this Plan or in any option shall confer upon any Optionee
any right to continue in the employ or other relationship of the Company or of a
related corporation, or to interfere in any way with the right of the Company or
of any such related corporation to terminate his or her employment or other
relationship with the Company at any time.
5.12 MODIFICATION AND AMENDMENT OF OPTION
Subject to the requirements of Code Section 422 with respect to
incentive stock options and to the terms and conditions and within the
limitations of this Plan, the Plan Administrator may modify or amend any
outstanding option granted under this Plan. The modification or amendment of an
outstanding option shall not, without the consent of the Optionee, impair or
diminish any of his or her rights or any of the obligations of the Company under
such option. Except as otherwise provided in this Plan, no outstanding option
shall be terminated without the consent of the Optionee.
5.13 LIMITATION ON VALUE FOR INCENTIVE STOCK OPTIONS
As to all incentive stock options granted under the terms of this Plan,
to the extent that the aggregate fair market value of the shares (determined at
the time the incentive stock
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<PAGE> 9
option is granted) with respect to which incentive stock options are exercisable
for the first time by the Optionee during any calendar year (under this Plan and
all other incentive stock option plans of the Company, a related corporation or
a predecessor corporation) exceeds $100,000, such options shall be treated as
nonqualified stock options. The previous sentence shall not apply if the
Internal Revenue Service issues a public rule, issues a private ruling to the
Company, any Optionee or any legatee, personal representative or distributee of
an Optionee or issues regulations changing or eliminating such annual limit.
SECTION 6. GREATER THAN 10% SHAREHOLDERS
6.1 EXERCISE PRICE AND TERM OF INCENTIVE STOCK OPTIONS
If an incentive stock option is granted under this Plan to any employee
who owns more than 10% of the total combined voting power of all classes of
stock of the Company or any related corporation, the term of such incentive
stock options shall not exceed five years and the exercise price shall be not
less than 110% of the fair market value of the shares at the time the incentive
stock option is granted. This provision shall control notwithstanding any
contrary terms contained in an option agreement or any other document.
6.2 ATTRIBUTION RULE
For purposes of subsection 6.1, in determining stock ownership, an
employee shall be deemed to own the shares owned, directly or indirectly, by or
for his or her brothers, sisters, spouse, ancestors and lineal descendants.
Shares owned, directly or indirectly, by or for a corporation, partnership,
estate or trust shall be deemed to be owned proportionately by or for its
shareholders, partners or beneficiaries. If an employee or a person related to
the employee owns an unexercised option or warrant to purchase shares of the
Company, the shares subject to that portion of the option or warrant which is
unexercised shall not be counted in determining stock ownership. For purposes of
this Section 6, shares owned by an employee shall include all shares actually
issued and outstanding immediately before the grant of the incentive stock
option to the employee.
SECTION 7. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
The aggregate number and class of shares for which options may be
granted under this Plan, the number and class of shares covered by each
outstanding option and the exercise price per share thereof (but not the total
price), and each such option, shall all be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock of the
Company resulting from a split-up or consolidation of shares or any like capital
adjustment, or the payment of any stock dividend.
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7.1 EFFECT OF LIQUIDATION OR REORGANIZATION
7.1.1 CASH, STOCK OR OTHER PROPERTY FOR STOCK
Except as provided in subsection 7.1.2, upon a merger (other than a
merger of the Company in which the holders of shares of Common Stock immediately
prior to the merger have the same proportionate ownership of shares of Common
Stock in the surviving corporation immediately after the merger), consolidation,
acquisition of property or stock, separation, reorganization (other than a mere
reincorporation or the creation of a holding company) or liquidation of the
Company, as a result of which the shareholders of the Company receive cash,
stock or other property in exchange for or in connection with their shares of
Common Stock, any option granted hereunder shall terminate, but the Optionee
shall have the right immediately prior to any such merger, consolidation,
acquisition of property or stock, separation, reorganization or liquidation to
exercise such Optionee's option in whole or in part whether or not the vesting
requirements set forth in the option agreement have been satisfied.
7.1.2 CONVERSION OF OPTIONS ON STOCK FOR STOCK EXCHANGE
If the shareholders of the Company receive capital stock of another
corporation ("Exchange Stock") in exchange for their shares of Common Stock in
any transaction involving a merger (other than a merger of the Company in which
the holders of Common Stock immediately prior to the merger have the same
proportionate ownership of Common Stock in the surviving corporation immediately
after the merger), consolidation, acquisition of property or stock, separation
or reorganization (other than a mere reincorporation or the creation of a
holding company), all options granted hereunder shall be converted into options
to purchase shares of Exchange Stock unless the Company and the corporation
issuing the Exchange Stock, in their sole discretion, determine that any or all
such options granted hereunder shall not be converted into options to purchase
shares of Exchange Stock but instead shall terminate in accordance with the
provisions of subsection 7.1.1. The amount and price of converted options shall
be determined by adjusting the amount and price of the options granted hereunder
in the same proportion as used for determining the number of shares of Exchange
Stock the holders of the shares of Common Stock receive in such merger,
consolidation, acquisition of property or stock, separation or reorganization.
The vesting schedule set forth in the option agreement shall continue to apply
to the options granted for the Exchange Stock.
7.2 FRACTIONAL SHARES
In the event of any adjustment in the number of shares covered by any
option, any fractional shares resulting from such adjustment shall be
disregarded and each such option shall cover only the number of full shares
resulting from such adjustment.
7.3 DETERMINATION OF BOARD TO BE FINAL
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All Section 7 adjustments shall be made by the Board, and its
determination as to what adjustments shall be made, and the extent thereof,
shall be final, binding and conclusive. Unless an Optionee agrees otherwise, any
change or adjustment to an incentive stock option shall be made in such a manner
so as not to constitute a "modification" as defined in Code Section 425(h) and
so as not to cause his or her incentive stock option issued hereunder to fail to
continue to qualify as an incentive stock option as defined in Code Section
422(b).
SECTION 8. SECURITIES REGULATION
Shares shall not be issued with respect to an option granted under this
Plan unless the exercise of such option and the issuance and delivery of such
shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, any applicable state securities laws, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance, including the
availability, if applicable, of an exemption from registration for the issuance
and sale of any shares hereunder. Inability of the Company to obtain, from any
regulatory body having jurisdiction, the authority deemed by the Company's
counsel to be necessary for the lawful issuance and sale of any shares hereunder
or the unavailability of an exemption from registration for the issuance and
sale of any shares hereunder shall relieve the Company of any liability in
respect of the nonissuance or sale of such shares as to which such requisite
authority shall not have been obtained.
As a condition to the exercise of an option, the Company may require
the Optionee to represent and warrant at the time of any such exercise that the
shares are being purchased only for investment and without any present intention
to sell or distribute such shares if, in the opinion of counsel for the Company,
such a representation is required by any relevant provision of the
aforementioned laws. At the option of the Company, a stop-transfer order against
any shares of stock may be placed on the official stock books and records of the
Company, and a legend indicating that the stock may not be pledged, sold or
otherwise transferred, unless an opinion of counsel is provided (concurred in by
counsel for the Company) stating that such transfer is not in violation of any
applicable law or regulation, may be stamped on stock certificates in order to
assure exemption from registration. The Plan Administrator may also require such
other action or agreement by the Optionees as may from time to time be necessary
to comply with the federal and state securities laws. THIS PROVISION SHALL NOT
OBLIGATE THE COMPANY TO UNDERTAKE REGISTRATION OF THE OPTIONS OR STOCK
HEREUNDER.
Should any of the Company's capital stock of the same class as the
stock subject to options granted hereunder be listed on a national securities
exchange, all stock issued hereunder if not previously listed on such exchange
shall be authorized by that exchange for listing thereon prior to the issuance
thereof
SECTION 9. AMENDMENT AND TERMINATION
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9.1 BOARD ACTION
The Board may at any time suspend, amend or terminate this Plan,
provided that, to the extent required for compliance with Rule 16b-3 promulgated
under Section 16(b) of the Exchange Act, Section 422 of the Code or by any
applicable law or regulation, the Company's shareholders must approve any
amendment which will:
(a) increase the number of shares that may be issued
under this Plan;
(b) with respect to nonqualified stock options,
materially modify the requirements as to eligibility for participation in this
Plan or, with respect to incentive stock options, change the designation of the
participants or class of participants eligible for participation in this Plan;
(c) materially increase the benefits accruing to the
participants under this Plan; or
(d) otherwise require shareholder approval under any
applicable law or regulation.
Such shareholder approval must be obtained (i) within 12 months of the
adoption by the Board of such amendment or (ii) if earlier, and to the extent
required for compliance with Rule l6b-3 promulgated under Section 16(b) of the
Exchange Act, at the next annual meeting of shareholders after such adoption by
the Board.
Any amendment made to this Plan which would constitute a "modification"
to incentive stock options outstanding on the date of such amendment, shall not
be applicable to such outstanding incentive stock options, but shall have
prospective effect only, unless the Optionee agrees otherwise.
9.2 AUTOMATIC TERMINATION
Unless sooner terminated by the Board, this Plan shall terminate ten
years from the earlier of (a) the date on which this Plan is adopted by the
Board or (b) the date on which this Plan is approved by the shareholders of the
Company. No option may be granted after such termination or during any
suspension of this Plan. The amendment or termination of this Plan shall not,
without the consent of the option holder, alter or impair any rights or
obligations under any option theretofore granted under this Plan.
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SECTION 10. EFFECTIVENESS OF THIS PLAN
This Plan shall become effective upon adoption by the Board so long as
it is approved by the Company's shareholders at any time within 12 months of
such adoption of this Plan or, if earlier, and to the extent required for
compliance with Rule l6b-3 under the Exchange Act, at the next annual meeting of
shareholders after adoption by the Board.
Plan adopted by the Board of Directors on March 23, 1995 and approved by the
shareholders on May 10, 1995.
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