As filed with the Securities and Exchange Commission
on September 15, 1998
Registration No. 333-__________
=======================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________________________
SBE, INC.
(Exact name of registrant as specified in its charter)
____________________________
Delaware 94-1517641
________________________ ____________________________________
(State of Incorporation) (I.R.S. Employer Identification No.)
4550 Norris Canyon Road
San Ramon, CA 94583
________________________________________
(Address of principal executive offices)
1996 Stock Option Plan
________________________
(Full title of the plan)
TIMOTHY J. REPP
Chief Financial Officer
SBE, Inc.
4550 Norris Canyon Road
San Ramon, CA 94583
(925) 355-2000
___________________________________________________________________
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
____________________________
Copies to:
Christopher A. Westover, Esq.
Cooley Godward LLP
One Maritime Plaza, 20th Floor
San Francisco, CA 94111
(415) 693-2000
____________________________
Exhibit Index at Page 6
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=======================================================================
PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM
SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF
TO BE TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED SHARE (1) PRICE (1) FEE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stock Options
and Common
Stock (par
value $.001) 400,000 $3.67928 $1,471,712 $434.16
=======================================================================
<FN>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(c) and (h)(1) under the
Securities Act of 1933, as amended (the "Act"). The offering
price per share and the aggregate offering price are based upon
(a) the weighted average exercise price, for shares subject to
outstanding options granted under the Registrant's 1996 Stock
Option Plan (the "Plan") in accordance with Rule 457 (h) under the
Act or (b) the average of the high and low prices of the
Registrant's Common Stock as reported on the Nasdaq National
Market on September 10, 1998, in accordance with Rule 457(c)
under the Act, for shares issuable pursuant to the Plan, in
accordance with Rule 457(c) of the Act. The following chart
illustrates the calculation of the registration fee:
======================================================================
OFFERING AGGREGATE
NUMBER OF PRICE PER OFFERING
TYPE OF SHARES SHARES SHARE PRICE
- ----------------------------------------------------------------------
Shares issuable pursuant to
outstanding options under the
1996 Stock Option Plan 98,243 $5.95(1)(a) $584,546
- ----------------------------------------------------------------------
Shares issuable pursuant to
unissued stock options under
the 1996 Stock Option Plan 301,757 $2.94(1)(b) $887,166
- ----------------------------------------------------------------------
Proposed Maximum Aggregate
Offering Price $1,471,712
- ----------------------------------------------------------------------
Registration Fee $434.16
======================================================================
</TABLE>
INCORPORATION BY REFERENCE OF CONTENTS OF
REGISTRATION STATEMENTS ON FORM S-8 NOS. 33-45998 and 33-59167
and FORM S-8 POS NO. 33-45998.
The contents of Registration Statements on Form S-8 Nos. 33-45998
and 33-59167 and Form S-8 POS No. 33-45998 filed with the Securities
and Exchange Commission on February 26, 1992, May 8, 1995 and August
19, 1998 respectively, are incorporated by reference herein with such
modifications as are set forth below.
2
<PAGE>
EXHIBITS
Exhibit
Number
- -------
5 Opinion of Cooley Godward LLP
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Cooley Godward LLP is contained in Exhibit 5 to
this Registration Statement
24.1 Power of Attorney is contained on the signature pages.
99.1 1996 Stock Option Plan, as amended through December 9,
1997.
99.2 Incentive and Nonstatutory Stock Option Agreements used in
connection with the 1996 Stock Option Plan
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8
and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
San Ramon, State of California, on September 15, 1998.
SBE, INC.
By: /s/ Timothy J. Repp
___________________
Timothy J. Repp
Title: Chief Financial Officer,
Vice President, Finance
and Secretary
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints William B. Heye and
Timothy J. Repp, and each or any one of them, his true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and
all capacities, to sign any and all amendments (including post-
effective amendments) to this Registration Statement, and to file the
same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them,
or their or his substitutes or substitute, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ William B. Heye, Jr. President and Chief September 15, 1998
Executive Officer
________________________ (Principal Executive
William B. Heye, Jr. Officer)
/s/ Timothy J. Repp Vice President, September 15, 1998
________________________ Finance, Chief
Timothy J. Repp Financial Officer and
Secretary (Principal
Financial Officer and
Accounting Officer)
4
<PAGE>
/s/ Raimon L. Conlisk Director September 15, 1998
________________________
Raimon L. Conlisk
/s/ George E. Grega Director September 15, 1998
________________________
George E. Grega
/s/ Ronald J. Ritchie Director September 15, 1998
________________________
Ronald J. Ritchie
/s/ Randall L-W. Caudill Director September 15, 1998
________________________
Randall L-W. Caudill
</TABLE>
5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequential Page
Number Description Number
<S> <C> <C>
5 Opinion of Cooley Godward LLP 7
23.1 Consent of PricewaterhouseCoopers LLP 8
23.2 Consent of Cooley Godward LLP is contained in 7
Exhibit 5 to this Registration Statement
24 Power of Attorney is contained on the 4
signature pages.
99.1 1996 Stock Option Plan, as amended 9
99.2 Incentive and Nonstatutory Stock Option 18
Agreements used in connection with the 1996
Stock Option Plan
</TABLE>
6
<PAGE>
EXHIBIT 5
[COOLEY GODWARD LETTERHEAD]
September 12, 1998
SBE, Inc.
4550 Norris Canyon Road
San Ramon, CA 94583
Dear Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in
connection with the filing by SBE, Inc. (the "Company") of a
Registration Statement on Form S-8 (the "Registration Statement") with
the Securities and Exchange Commission covering the offering of up to
an additional 400,000 shares of the Company's Common Stock, par value
($0.001) per share, (the "Shares") pursuant to its 1996 Stock Option
Plan, as amended (the "Plan").
In connection with this opinion, we have examined the Registration
Statement and related Prospectus, your Certificate of Incorporation and
By-laws, as amended, and such other documents, records, certificates,
memoranda and other instruments as we deem necessary as a basis for
this opinion. We have assumed the genuineness and authenticity of all
documents submitted to us as originals, the conformity to originals of
all documents submitted to us as copies thereof, and the due execution
and delivery of all documents where due execution and delivery are a
prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the
opinion that the Shares, when sold and issued in accordance with the
Plan, the Registration Statement and related Prospectus, will be
validly issued, fully paid, and nonassessable (except as to shares
issued pursuant to certain deferred payment arrangements, which will be
fully paid and nonassessable when such deferred payments are made in
full).
We consent to the filing of this opinion as an exhibit to the
Registration Statement.
Sincerely,
COOLEY GODWARD LLP
/s/ Christopher A. Westover
Christopher A. Westover
CAW:jah
7
<PAGE>
EXHIBIT 23.1
[PRICEWATERHOUSECOOPERS LETTERHEAD]
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement of SBE, Inc. on Form S-8 of our report dated November 20,
1997, except for Note 13 as to which the date is December 15, 1997, on
our audits of the consolidated financial statements and financial
statement schedule of SBE, Inc. as of October 31, 1997 and 1996 and for
the years ended October 31, 1997, 1996 and 1995.
/s/ PricewaterhouseCoopers LLP
San Francisco, California
September 11, 1998
8
<PAGE>
EXHIBIT 99.1
SBE, INC.
1996 STOCK OPTION PLAN
ADOPTED BY THE BOARD OF DIRECTORS JULY 21, 1987,
AMENDED MARCH 23, 1993, AUGUST 23, 1994 AND JANUARY 17, 1995
APPROVED BY SHAREHOLDERS MARCH 9, 1989 AND MARCH 21, 1995
AMENDED AND RESTATED JANUARY 18, 1996
APPROVED BY THE SHAREHOLDERS ON APRIL 16, 1996
AMENDED DECEMBER 9, 1997
APPROVED BY THE STOCKHOLDERS ON APRIL 14, 1998
1. PURPOSES.
(a) The purpose of the Plan is to provide a means by which
selected Employees and Directors of and Consultants to the Company, and
its Affiliates, may be given an opportunity to purchase stock of the
Company.
(b) The Company, by means of the Plan, seeks to retain the
services of persons who are now Employees or Directors of or
Consultants to the Company or its Affiliates, to secure and retain the
services of new Employees, Directors and Consultants, and to provide
incentives for such persons to exert maximum efforts for the success of
the Company and its Affiliates.
(c) The Company intends that the Options issued under the Plan
shall, in the discretion of the Board or any Committee to which
responsibility for administration of the Plan has been delegated
pursuant to subsection 3(c), be either Incentive Stock Options or
Nonstatutory Stock Options. All Options shall be separately designated
Incentive Stock Options or Nonstatutory Stock Options at the time of
grant, and in such form as issued pursuant to Section 6, and a separate
certificate or certificates will be issued for shares purchased on
exercise of each type of Option.
2. DEFINITIONS.
(a) "Affiliate" means any parent corporation or subsidiary
corporation, whether now or hereafter existing, as those terms are
defined in Sections 424(e) and (f) respectively, of the Code.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means a Committee appointed by the Board in
accordance with subsection 3(c) of the Plan.
(e) "Company" means SBE, Inc., a Delaware corporation.
(f) "Consultant" means any person, including an advisor,
engaged by the Company or an Affiliate to render consulting services
and who is compensated for such services, provided that the term
"Consultant" shall not include Directors who are paid only a director's
fee by the Company or who are not compensated by the Company for their
services as Directors.
(g) "Continuous Status as an Employee, Director or Consultant"
means that the service of an individual to the Company, whether as an
Employee, Director or Consultant, is not interrupted or terminated.
The Board, in its sole discretion, may determine whether Continuous
Status as an Employee, Director or Consultant shall be considered
interrupted in the case of: (i) any leave of absence approved by the
Board, including sick leave, military leave, or any other personal
leave; or (ii) transfers between the Company, Affiliates or their
successors.
9
<PAGE>
(h) "Covered Employee" means the chief executive officer and
the four (4) other highest compensated officers of the Company for whom
total compensation is required to be reported to stockholders under the
Exchange Act, as determined for purposes of Section 162(m) of the Code.
(i) "Director" means a member of the Board.
(j) "Disinterested Person" means a Director who either (i) was
not during the one year prior to service as an administrator of the
Plan granted or awarded equity securities pursuant to the Plan or any
other plan of the Company or any affiliate entitling the participants
therein to acquire equity securities of the Company or any affiliate
except as permitted by Rule 16b-3(c)(2)(i); or (ii) is otherwise
considered to be a "disinterested person" in accordance with Rule 16b-
3(c)(2)(i), or any other applicable rules, regulations or
interpretations of the Securities and Exchange Commission.
(k) "Employee" means any person, including Officers and
Directors, employed by the Company or any Affiliate of the Company.
Neither service as a Director nor payment of a director's fee by the
Company shall be sufficient to constitute "employment" by the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(m) "Fair Market Value" means, as of any date, the value of the
common stock of the Company determined as follows
(1) If the common stock is listed on any established
stock exchange or a national market system, including without
limitation the National Market System of the National Association of
Securities Dealers, Inc. Automated Quotation ("NASDAQ") System, the
Fair Market Value of a share of common stock shall be the closing sales
price for such stock (or the closing bid, if no sales were reported) as
quoted on such system or exchange (or the exchange with the greatest
volume of trading in common stock) on the last market trading day prior
to the day of determination, as reported in the Wall Street Journal or
such other source as the Board deems reliable;
(2) If the common stock is quoted on the NASDAQ System
(but not on the National Market System thereof) or is regularly quoted
by a recognized securities dealer but selling prices are not reported,
the Fair Market Value of a share of common stock shall be the mean
between the bid and asked prices for the common stock on the last
market trading day prior to the day of determination, as reported in
the Wall Street Journal or such other source as the Board deems
reliable;
(3) In the absence of an established market for the
common stock, the Fair Market Value shall be determined in good faith
by the Board.
(n) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422
of the Code and the regulations promulgated thereunder.
(o) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
(p) "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(q) "Option" means a stock option granted pursuant to the Plan.
10
<PAGE>
(r) "Option Agreement" means a written agreement between the
Company and an Optionee evidencing the terms and conditions of an
individual Option grant. Each Option Agreement shall be subject to the
terms and conditions of the Plan.
(s) "Optionee" means a person who holds an outstanding Option.
(t) "Outside Director" means a Director who either (i) is not a
current employee of the Company or an "affiliated corporation" (within
the meaning of the Treasury regulations promulgated under Section
162(m) of the Code), is not a former employee of the Company or an
"affiliated corporation" receiving compensation for prior services
(other than benefits under a tax qualified pension plan), was not an
officer of the Company or an "affiliated corporation" at any time, and
is not currently receiving direct or indirect remuneration from the
Company or an "affiliated corporation" for services in any capacity
other than as a Director, or (ii) is otherwise considered an "outside
director" for purposes of Section 162(m) of the Code.
(u) "Plan" means this SBE, Inc. 1996 Stock Option Plan.
(v) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being
exercised with respect to the Plan.
3. ADMINISTRATION.
(a) The Plan shall be administered by the Board unless and
until the Board delegates administration to a Committee, as provided in
subsection 3(c).
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the persons
eligible under the Plan shall be granted Options; when and how each
Option shall be granted; whether an Option will be an Incentive Stock
Option or a Nonstatutory Stock Option; the provisions of each Option
granted (which need not be identical), including the time or times such
Option may be exercised in whole or in part; and the number of shares
for which an Option shall be granted to each such person.
(2) To construe and interpret the Plan and Options
granted under it, and to establish, amend and revoke rules and
regulations for its administration. The Board, in the exercise of this
power, may correct any defect, omission or inconsistency in the Plan or
in any Option Agreement, in a manner and to the extent it shall deem
necessary or expedient to make the Plan fully effective.
(3) To amend the Plan or an Option as provided in Section
11.
(4) Generally, to exercise such powers and to perform
such acts as the Board deems necessary or expedient to promote the best
interests of the Company.
(c) The Board may delegate administration of the Plan to a
committee composed of not fewer than two (2) members (the "Committee"),
all of the members of which Committee shall be Disinterested Persons
and may also be, in the discretion of the Board, Outside Directors. If
administration is delegated to a Committee, the Committee shall have,
in connection with the administration of the Plan, the powers
theretofore possessed by the Board (and references in this Plan to the
Board shall thereafter be to the Committee), subject, however, to such
resolutions, not inconsistent with the provisions of the Plan, as may
be adopted from time to time by the Board. The Board may abolish the
Committee at any time and revest in the Board the administration of the
Plan. Notwithstanding anything in this Section 3 to the contrary, the
Board or the Committee may delegate to a committee of one or more
persons the authority to grant Options to eligible persons who (1) are
not then subject to Section 16 of the Exchange Act and/or (2) are
either (i) not then Covered Employees and are not expected to be
Covered Employees at the time of recognition of income resulting from
such Option, or (ii) not persons with respect to whom the Company
wishes to comply with Section 162(m) of the Code.
11
<PAGE>
(d) Any requirement that an administrator of the Plan be a
Disinterested Person shall not apply if the Board or the Committee
expressly declares that such requirement shall not apply. Any
Disinterested Person shall otherwise comply with the requirements of
Rule 16b-3.
4. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of Section 10 relating to
adjustments upon changes in stock, the stock that may be sold pursuant
to Options shall not exceed in the aggregate one million three hundred
thirty thousand (1,330,000) shares of the Company's common stock. If
any Option shall for any reason expire or otherwise terminate, in whole
or in part, without having been exercised in full, the stock not
purchased under such Option shall revert to and again become available
for issuance under the Plan.
(b) The stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.
5. ELIGIBILITY.
(a) Incentive Stock Options may be granted only to Employees.
Nonstatutory Stock Options may be granted only to Employees, Directors
or Consultants.
(b) A Director shall in no event be eligible for the benefits
of the Plan unless at the time discretion is exercised in the selection
of the Director as a person to whom Options may be granted, or in the
determination of the number of shares which may be covered by Options
granted to the Director: (i) the Board has delegated its discretionary
authority over the Plan to a Committee which consists solely of
Disinterested Persons; or (ii) the Plan otherwise complies with the
requirements of Rule 16b-3. The Board shall otherwise comply with the
requirements of Rule 16b-3. This subsection 5(b) shall not apply if
the Board or Committee expressly declares that it shall not apply.
(c) No person shall be eligible for the grant of an Incentive
Stock Option if, at the time of grant, such person owns (or is deemed
to own pursuant to Section 424(d) of the Code) stock possessing more
than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or of any of its Affiliates unless the
exercise price of such Incentive Stock Option is at least one hundred
ten percent (110%) of the Fair Market Value of such stock at the date
of grant and the Incentive Stock Option is not exercisable after the
expiration of five (5) years from the date of grant.
(d) Subject to the provisions of Section 10 relating to
adjustments upon changes in stock, no person shall be eligible to be
granted Options covering more than one hundred fifty thousand (150,000)
shares of the Company's common stock in any calendar year.
6. OPTION PROVISIONS.
Each Option shall be in such form and shall contain such terms
and conditions as the Board shall deem appropriate. The provisions of
separate Options need not be identical, but each Option shall include
(through incorporation of provisions hereof by reference in the Option
or otherwise) the substance of each of the following provisions:
(a) Term. No Option shall be exercisable after the expiration
of ten (10) years from the date it was granted.
12
<PAGE>
(b) Price. The exercise price of each Incentive Stock Option
shall be not less than one hundred percent (100%) of the Fair Market
Value of the stock subject to the Option on the date the Option is
granted; the exercise price of each Nonstatutory Stock Option shall be
not less than eighty-five percent (85%) of the Fair Market Value of the
stock subject to the Option on the date the Option is granted.
Notwithstanding the foregoing, an Option (whether an Incentive Stock
Option or a Nonstatutory Stock Option) may be granted with an exercise
price lower than that set forth in the preceding sentence if such
Option is granted pursuant to an assumption or substitution for another
option in a manner satisfying the provisions of Section 424(a) of the
Code.
(c) Consideration. The purchase price of stock acquired
pursuant to an Option shall be paid, to the extent permitted by
applicable statutes and regulations, either (i) in cash at the time the
Option is exercised, or (ii) at the discretion of the Board or the
Committee, at the time of the grant of the Option, (A) by delivery to
the Company of other common stock of the Company, (B) according to a
deferred payment or other arrangement (which may include, without
limiting the generality of the foregoing, the use of other common stock
of the Company) with the person to whom the Option is granted or to
whom the Option is transferred pursuant to subsection 6(d), or (C) in
any other form of legal consideration that may be acceptable to the
Board.
In the case of any deferred payment arrangement, interest shall
be payable at least annually and shall be charged at the minimum rate
of interest necessary to avoid the treatment as interest, under any
applicable provisions of the Code, of any amounts other than amounts
stated to be interest under the deferred payment arrangement.
(d) Transferability. An Incentive Stock Option shall not be
transferable except by will or by the laws of descent and distribution,
and shall be exercisable during the lifetime of the person to whom the
Incentive Stock Option is granted only by such person. A Nonstatutory
Stock Option shall not be transferable except by will or by the laws of
descent and distribution or pursuant to a qualified domestic relations
order satisfying the requirements of Rule 16b-3 and the rules
thereunder (a "QDRO"), and shall be exercisable during the lifetime of
the person to whom the Option is granted only by such person or any
transferee pursuant to a QDRO. The person to whom the Option is
granted may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a third party who, in the event
of the death of the Optionee, shall thereafter be entitled to exercise
the Option.
(e) Vesting. The total number of shares of stock subject to an
Option may, but need not, be allotted in periodic installments (which
may, but need not, be equal). The Option Agreement may provide that
from time to time during each of such installment periods, the Option
may become exercisable ("vest") with respect to some or all of the
shares allotted to that period, and may be exercised with respect to
some or all of the shares allotted to such period and/or any prior
period as to which the Option became vested but was not fully
exercised. The Option may be subject to such other terms and
conditions on the time or times when it may be exercised (which may be
based on performance or other criteria) as the Board may deem
appropriate. The provisions of this subsection 6(e) are subject to any
Option provisions governing the minimum number of shares as to which an
Option may be exercised.
(f) Securities Law Compliance. The Company may require any
Optionee, or any person to whom an Option is transferred under
subsection 6(d), as a condition of exercising any such Option, (1) to
give written assurances satisfactory to the Company as to the
Optionee's knowledge and experience in financial and business matters
and/or to employ a purchaser representative reasonably satisfactory to
the Company who is knowledgeable and experienced in financial and
business matters, and that he or she is capable of evaluating, alone or
together with the purchaser representative, the merits and risks of
exercising the Option; and (2) to give written assurances satisfactory
to the Company stating that such person is acquiring the stock subject
to the Option for such person's own account and not with any present
intention of selling or otherwise distributing the stock. The
foregoing requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (i) the issuance of the shares
upon the exercise of the Option has been registered under a then
currently effective registration statement under the Securities Act of
1933, as amended (the "Securities Act"), or (ii) as to any particular
requirement, a determination is made by counsel for the Company that
such requirement need not be met in the circumstances under the then
applicable securities laws. The Company may require the Optionee to
provide such other representations, written assurances or information
which the Company shall determine is necessary, desirable or
appropriate to comply with applicable securities and other laws as a
condition of granting an Option to such Optionee or permitting the
Optionee to exercise such Option. The Company may, upon advice of
counsel to the Company, place legends on stock certificates issued
13
<PAGE>
under the Plan as such counsel deems necessary or appropriate in order
to comply with applicable securities laws, including, but not limited
to, legends restricting the transfer of the stock.
(g) Termination of Employment or Relationship as a Director or
Consultant. In the event an Optionee's Continuous Status as an
Employee, Director or Consultant terminates (other than upon the
Optionee's death or disability), the Optionee may exercise his or her
Option (to the extent that the Optionee was entitled to exercise it as
of the date of termination) but only within such period of time ending
on the earlier of (i) the date three (3) months after the termination
of the Optionee's Continuous Status as an Employee, Director or
Consultant, or such longer or shorter period specified in the Option
Agreement, or (ii) the expiration of the term of the Option as set
forth in the Option Agreement. If, after termination, the Optionee
does not exercise his or her Option within the time specified in the
Option Agreement, the Option shall terminate, and the shares covered by
such Option shall revert to and again become available for issuance
under the Plan.
(h) Disability of Optionee. In the event an Optionee's
Continuous Status as an Employee, Director or Consultant terminates as
a result of the Optionee's disability, the Optionee may exercise his or
her Option (to the extent that the Optionee was entitled to exercise it
as of the date of termination), but only within such period of time
ending on the earlier of (i) the date twelve (12) months following such
termination (or such longer or shorter period specified in the Option
Agreement), or (ii) the expiration of the term of the Option as set
forth in the Option Agreement. If, at the date of termination, the
Optionee is not entitled to exercise his or her entire Option, the
shares covered by the unexercisable portion of the Option shall revert
to and again become available for issuance under the Plan. If, after
termination, the Optionee does not exercise his or her Option within
the time specified herein, the Option shall terminate, and the shares
covered by such Option shall revert to and again become available for
issuance under the Plan.
(i) Death of Optionee. In the event of the death of an
Optionee during, or within a period specified in the Option Agreement
after the termination of, the Optionee's Continuous Status as an
Employee, Director or Consultant, the Option may be exercised (to the
extent the Optionee was entitled to exercise the Option as of the date
of death) by the Optionee's estate, by a person who acquired the right
to exercise the Option by bequest or inheritance or by a person
designated to exercise the option upon the Optionee's death pursuant to
subsection 6(d), but only within the period ending on the earlier of
(i) the date eighteen (18) months following the date of death (or such
longer or shorter period specified in the Option Agreement), or (ii)
the expiration of the term of such Option as set forth in the Option
Agreement. If, at the time of death, the Optionee was not entitled to
exercise his or her entire Option, the shares covered by the
unexercisable portion of the Option shall revert to and again become
available for issuance under the Plan. If, after death, the Option is
not exercised within the time specified herein, the Option shall
terminate, and the shares covered by such Option shall revert to and
again become available for issuance under the Plan.
(j) Early Exercise. The Option may, but need not, include a
provision whereby the Optionee may elect at any time while an Employee,
Director or Consultant to exercise the Option as to any part or all of
the shares subject to the Option prior to the full vesting of the
Option. Any unvested shares so purchased may be subject to a
repurchase right in favor of the Company or to any other restriction
the Board determines to be appropriate.
(k) Withholding. To the extent provided by the terms of an
Option Agreement, the Optionee may satisfy any federal, state or local
tax withholding obligation relating to the exercise of such Option by
any of the following means or by a combination of such means: (1)
tendering a cash payment; (2) authorizing the Company to withhold
shares from the shares of the common stock otherwise issuable to the
Optionee as a result of the exercise of the Option; or (3) delivering
to the Company owned and unencumbered shares of the common stock of the
Company.
7. COVENANTS OF THE COMPANY.
(a) During the terms of the Options, the Company shall keep
available at all times the number of shares of stock required to
satisfy such Options.
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(b) The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority
as may be required to issue and sell shares of stock upon exercise of
the Options; provided, however, that this undertaking shall not require
the Company to register under the Securities Act either the Plan, any
Option or any stock issued or issuable pursuant to any such Option.
If, after reasonable efforts, the Company is unable to obtain from any
such regulatory commission or agency the authority which counsel for
the Company deems necessary for the lawful issuance and sale of stock
under the Plan, the Company shall be relieved from any liability for
failure to issue and sell stock upon exercise of such Options unless
and until such authority is obtained.
8. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to Options shall
constitute general funds of the Company.
9. MISCELLANEOUS.
(a) The Board shall have the power to accelerate the time at
which an Option may first be exercised or the time during which an
Option or any part thereof will vest pursuant to subsection 6(e),
notwithstanding the provisions in the Option stating the time at which
it may first be exercised or the time during which it will vest.
(b) Neither an Optionee nor any person to whom an Option is
transferred under subsection 6(d) shall be deemed to be the holder of,
or to have any of the rights of a holder with respect to, any shares
subject to such Option unless and until such person has satisfied all
requirements for exercise of the Option pursuant to its terms.
(c) Nothing in the Plan or any instrument executed or Option
granted pursuant thereto shall confer upon any Employee, Director,
Consultant or Optionee any right to continue in the employ of the
Company or any Affiliate (or to continue acting as a Director or
Consultant) or shall affect the right of the Company or any Affiliate
to terminate the employment of any Employee, with or without cause, to
remove any Director as provided in the Company's By-Laws and the
provisions of the General Corporation Law of the State of Delaware, or
to terminate the relationship of any Consultant in accordance with the
terms of that Consultant's agreement with the Company or Affiliate to
which such Consultant is providing services.
(d) To the extent that the aggregate Fair Market Value
(determined at the time of grant) of stock with respect to which
Incentive Stock Options are exercisable for the first time by any
Optionee during any calendar year under all plans of the Company and
its Affiliates exceeds one hundred thousand dollars ($100,000), the
Options or portions thereof which exceed such limit (according to the
order in which they were granted) shall be treated as Nonstatutory
Stock Options.
(e) (1) The Board or the Committee shall have the authority to
effect, at any time and from time to time (i) the repricing of any
outstanding Options under the Plan and/or (ii) with the consent of the
affected holders of Options, the cancellation of any outstanding
Options and the grant in substitution therefor of new Options under the
Plan covering the same or different numbers of shares of common stock,
but having an exercise price per share not less than eighty-five
percent (85%) of the Fair Market Value (one hundred percent (100%) of
the Fair Market Value in the case of an Incentive Stock Option or, in
the case of an Incentive Stock Option granted to a ten percent (10%)
stockholder (as defined in subsection 5(c)), not less than one hundred
and ten percent (110%) of the Fair Market Value) per share of common
stock on the new grant date.
(2) Shares subject to an Option canceled under this
subsection 9(f) shall continue to be counted against the maximum award
of Options permitted to be granted pursuant to subsection 5(d) of the
Plan. The repricing of an Option under this subsection 9(f), resulting
in a reduction of the exercise price, shall be deemed to be a
cancellation of the original Option and the grant of a substitute
Option; in the event of such repricing, both the original and the
substituted Options shall be counted against the maximum awards of
Options permitted to be granted pursuant to subsection 5(d) of the
Plan. The provisions of this subsection 9(f) shall be applicable only
to the extent required by Section 162(m) of the Code.
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<PAGE>
10. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or
subject to any Option (through merger, consolidation, reorganization,
recapitalization, stock dividend, dividend in property other than cash,
stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not
involving the receipt of consideration by the Company), the Plan will
be appropriately adjusted in the class(es) and maximum number of shares
subject to the Plan pursuant to subsection 4(a) and the maximum number
of shares subject to award to any person during any calendar year
pursuant to subsection 5(d), and the outstanding Options will be
appropriately adjusted in the class(es) and number of shares and price
per share of stock subject to such outstanding Options. Such
adjustments shall be made by the Board or Committee, the determination
of which shall be final, binding and conclusive. (The conversion of
any convertible securities of the Company shall not be treated as a
"transaction not involving the receipt of consideration by the
Company.")
(b) In the event of: (1) a dissolution, liquidation, or sale
of all or substantially all of the assets of the Company; (2) a merger
or consolidation in which the Company is not the surviving corporation;
(3) a reverse merger in which the Company is the surviving corporation
but the shares of the Company's common stock outstanding immediately
preceding the merger are converted by virtue of the merger into other
property, whether in the form of securities, cash or otherwise; or (4)
the acquisition by any person, entity or group within the meaning of
Section 13(d) or 14(d) of the Exchange Act, or any comparable successor
provisions (excluding any employee benefit plan, or related trust,
sponsored or maintained by the Company or any Affiliate of the Company)
of the beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act, or comparable successor rule) of
securities of the Company representing at least fifty percent (50%) of
the combined voting power entitled to vote in the election of
directors, then to the extent permitted by applicable law: (i) any
surviving or acquiring corporation shall assume any Options outstanding
under the Plan or shall substitute similar Options (including an option
to acquire the same consideration paid to the stockholders in the
transaction described in this subsection 10(b)) for those outstanding
under the Plan, or (ii) such Options shall continue in full force and
effect. In the event any surviving or acquiring corporation refuses to
assume such Options, or to substitute similar options for those
outstanding under the Plan, then, with respect to Options held by
persons then performing services as Employees, Directors or
Consultants, the time during which such Options may be exercised shall
be accelerated prior to such event and the Options terminated if not
exercised after such acceleration and at or prior to such event.
11. AMENDMENT OF THE PLAN AND OPTIONS.
(a) The Board at any time, and from time to time, may amend the
Plan. However, except as provided in Section 10 relating to
adjustments upon changes in stock, no amendment shall be effective
unless approved by the stockholders of the Company within twelve (12)
months before or after the adoption of the amendment, where the
amendment will:
(1) Increase the number of shares reserved for Options
under the Plan;
(2) Modify the requirements as to eligibility for
participation in the Plan (to the extent such modification requires
stockholder approval in order for the Plan to satisfy the requirements
of Section 422 of the Code); or
(3) Modify the Plan in any other way if such modification
requires stockholder approval in order for the Plan to satisfy the
requirements of Section 422 of the Code or to comply with the
requirements of Rule 16b-3.
(b) The Board may in its sole discretion submit any other
amendment to the Plan for stockholder approval, including, but not
limited to, amendments to the Plan intended to satisfy the requirements
of Section 162(m) of the Code and the regulations promulgated
thereunder regarding the exclusion of performance-based compensation
from the limit on corporate deductibility of compensation paid to
certain executive officers.
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<PAGE>
(c) It is expressly contemplated that the Board may amend the
Plan in any respect the Board deems necessary or advisable to provide
Optionees with the maximum benefits provided or to be provided under
the provisions of the Code and the regulations promulgated thereunder
relating to Incentive Stock Options and/or to bring the Plan and/or
Incentive Stock Options granted under it into compliance therewith.
(d) Rights and obligations under any Option granted before
amendment of the Plan shall not be impaired by any amendment of the
Plan unless (i) the Company requests the consent of the person to whom
the Option was granted and (ii) such person consents in writing.
(e) The Board at any time, and from time to time, may amend the
terms of any one or more Options; provided, however, that the rights
and obligations under any Option shall not be impaired by any such
amendment unless (i) the Company requests the consent of the person to
whom the Option was granted and (ii) such person consents in writing.
12. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any time.
Unless sooner terminated, the Plan shall terminate on January 17, 2006
which shall be within ten (10) years from the date the Plan is adopted
by the Board or approved by the stockholders of the Company, whichever
is earlier. No Options may be granted under the Plan while the Plan
is suspended or after it is terminated.
(b) Rights and obligations under any Option granted while the
Plan is in effect shall not be impaired by suspension or termination of
the Plan, except with the written consent of the person to whom the
Option was granted.
13. EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the Board, but
no Options granted under the Plan shall be exercised unless and until
the Plan has been approved by the stockholders of the Company, which
approval shall be within twelve (12) months before or after the date
the Plan is adopted by the Board.
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<PAGE>
EXHIBIT 99.2
INCENTIVE STOCK OPTION
____________________, Optionee:
SBE, Inc. (the "Company"), pursuant to its 1996 Stock Option Plan
(the "Plan"), has granted to you, the optionee named above, an option
to purchase shares of the common stock of the Company ("Common Stock").
This option is intended to qualify as an "incentive stock option"
within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
The grant hereunder is in connection with and in furtherance of
the Company's compensatory benefit plan for participation of the
Company's employees (including officers), directors or consultants.
The details of your option are as follows:
1. Total Number Of Shares Subject To This Option. The total
number of shares of Common Stock subject to this option is
____________________ (__________).
2. Vesting. Subject to the limitations contained herein,
__________ of the shares will vest (become exercisable) on
____________, 19__ and __________ of the shares will then vest each
____________ thereafter until either (i) you cease to provide services
to the Company for any reason, or (ii) this option becomes fully
vested.
3. Exercise Price And Method Of Payment.
(a) Exercise Price. The exercise price of this option is
___________________________ ($___________) per share, being not less
than the fair market value of the Common Stock on the date of grant of
this option.
(b) Method of Payment. Payment of the exercise price per
share is due in full upon exercise of all or any part of each
installment which has accrued to you. You may elect, to the extent
permitted by applicable statutes and regulations, to make payment of
the exercise price under one of the following alternatives:
(i) Payment of the exercise price per share in cash
(including check) at the time of exercise;
(ii) Payment pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board which, prior
to the issuance of Common Stock, results in either the receipt of cash
(or check) by the Company or the receipt of irrevocable instructions to
pay the aggregate exercise price to the Company from the sales
proceeds;
(iii) Provided that at the time of exercise the
Company's Common Stock is publicly traded and quoted regularly in the
Wall Street Journal, payment by delivery of already-owned shares of
Common Stock, held for the period required to avoid a charge to the
Company's reported earnings, and owned free and clear of any liens,
claims, encumbrances or security interests, which Common Stock shall be
valued at its fair market value on the date of exercise; or
(iv) Payment by a combination of the methods of
payment permitted by subparagraph 3(b)(i) through 3(b)(iii) above.
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<PAGE>
4. Whole Shares; Minimum Shares Exercisable.
(a) This option may not be exercised for any number of
shares which would require the issuance of anything other than whole
shares.
(b) The minimum number of shares with respect to which
this option may be exercised at any one time is one hundred (100)
shares, except that (i) as to that number of shares to which it is
exercisable under the provisions of paragraph 2 of this option, if
fewer than one hundred (100) shares, the number of such shares
exercisable shall be the minimum number of shares that are vested
thereunder, and (ii) with respect to the final exercise of this option
this minimum shall not apply.
5. Securities Law Compliance. Notwithstanding anything to the
contrary contained herein, this option may not be exercised unless the
shares issuable upon exercise of this option are then registered under
the Act or, if such shares are not then so registered, the Company has
determined that such exercise and issuance would be exempt from the
registration requirements of the Act.
6. Term. The term of this option commences on __________,
19__, the date of grant, and expires on ---___________________ (the
"Expiration Date," which date shall be no more than ten (10) years from
the date this option is granted), unless this option expires sooner as
set forth below or in the Plan. In no event may this option be
exercised on or after the Expiration Date. This option shall terminate
prior to the Expiration Date as follows: three (3) months after the
termination of your Continuous Status as an Employee, Director or
Consultant with the Company or an Affiliate of the Company unless one
of the following circumstances exists:
(a) Your termination of Continuous Status as an Employee,
Director or Consultant is due to your permanent and total disability
(within the meaning of Section 422(c)(6) of the Code). This option
will then expire on the earlier of the Expiration Date set forth above
or twelve (12) months following such termination of Continuous Status
as an Employee, Director or Consultant.
(b) Your termination of Continuous Status as an Employee,
Director or Consultant is due to your death or your death occurs within
three (3) months following your termination of Continuous Status as an
Employee, Director or Consultant for any other reason. This option
will then expire on the earlier of the Expiration Date set forth above
or eighteen (18) months after your death.
(c) If during any part of such three (3) month period you
may not exercise your option solely because of the condition set forth
in paragraph 5 above, then your option will not expire until the
earlier of the Expiration Date set forth above or until this option
shall have been exercisable for an aggregate period of three (3) months
after your termination of Continuous Status as an Employee, Director or
Consultant.
(d) If your exercise of the option within three (3)
months after termination of your Continuous Status as an Employee,
Director or Consultant with the Company or with an Affiliate of the
Company would result in liability under section 16(b) of the Securities
Exchange Act of 1934, then your option will expire on the earlier of
(i) the Expiration Date set forth above, (ii) the tenth (10th) day
after the last date upon which exercise would result in such liability
or (iii) six (6) months and ten (10) days after the termination of your
Continuous Status as an Employee, Director or Consultant with the
Company or an Affiliate of the Company.
However, this option may be exercised following termination of
Continuous Status as an Employee, Director or Consultant only as to
that number of shares as to which it was exercisable on the date of
termination of Continuous Status as an Employee, Director or Consultant
under the provisions of paragraph 2 of this option.
In order to obtain the federal income tax advantages associated
with an "incentive stock option," the Code requires that at all times
beginning on the date of grant of the option and ending on the day
three (3) months before the date of the option's exercise, you must be
an employee of the Company or an Affiliate of the Company, except in
the event of your death or permanent and total disability. The Company
has provided for continued vesting or extended exercisability of your
option under certain circumstances for your benefit, but cannot
guarantee that your option will necessarily be treated as an "incentive
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<PAGE>
stock option" if you provide services to the Company or an Affiliate of
the Company as a consultant or exercise your option more than three (3)
months after the date your employment with the Company and all
Affiliates of the Company terminates.
7. Exercise.
(a) This option may be exercised, to the extent specified
above, by delivering a notice of exercise (in a form designated by the
Company) together with the exercise price to the Secretary of the
Company, or to such other person as the Company may designate, during
regular business hours, together with such additional documents as the
Company may then require pursuant to subsection 6(f) of the Plan.
(b) By exercising this option you agree that:
(i) as a precondition to the completion of any
exercise of this option, the Company may require you to enter an
arrangement providing for the payment by you to the Company of any tax
withholding obligation of the Company arising by reason of (1) the
exercise of this option; (2) the lapse of any substantial risk of
forfeiture to which the shares are subject at the time of exercise; or
(3) the disposition of shares acquired upon such exercise;
(ii) you will notify the Company in writing within
fifteen (15) days after the date of any disposition of any of the
shares of the Common Stock issued upon exercise of this option that
occurs within two (2) years after the date of this option grant or
within one (1) year after such shares of Common Stock are transferred
upon exercise of this option; and
8. Transferability. This option is not transferable, except
by will or by the laws of descent and distribution, and is exercisable
during your life only by you. Notwithstanding the foregoing, by
delivering written notice to the Company, in a form satisfactory to the
Company, you may designate a third party who, in the event of your
death, shall thereafter be entitled to exercise this option.
9. Option Not A Service Contract. This option is not an
employment contract and nothing in this option shall be deemed to
create in any way whatsoever any obligation on your part to continue in
the employ of the Company, or of the Company to continue your
employment with the Company. In addition, nothing in this option shall
obligate the Company or any Affiliate of the Company, or their
respective stockholders, Board of Directors, officers or employees to
continue any relationship which you might have as a Director or
Consultant for the Company or Affiliate of the Company.
10. Notices. Any notices provided for in this option or the
Plan shall be given in writing and shall be deemed effectively given
upon receipt or, in the case of notices delivered by the Company to
you, five (5) days after deposit in the United States mail, postage
prepaid, addressed to you at the address specified below or at such
other address as you hereafter designate by written notice to the
Company.
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<PAGE>
11. Governing Plan Document. This option is subject to all the
provisions of the Plan, a copy of which is attached hereto and its
provisions are hereby made a part of this option, including without
limitation the provisions of Section 6 of the Plan relating to option
provisions, and is further subject to all interpretations, amendments,
rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the
provisions of this option and those of the Plan, the provisions of the
Plan shall control.
Dated the ____ day of __________________, 19__.
Very truly yours,
_______________________
By ____________________
Duly authorized
on behalf of the
Board of Directors
ATTACHMENTS:
SBE, Inc. 1996 Stock Option Plan
Notice of Exercise
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<PAGE>
The undersigned:
(a) Acknowledges receipt of the foregoing option and the
attachments referenced therein and understands that all rights and
liabilities with respect to this option are set forth in the option and
the Plan; and
(b) Acknowledges that as of the date of grant of this option,
it sets forth the entire understanding between the undersigned optionee
and the Company and its Affiliates regarding the acquisition of stock
in the Company and supersedes all prior oral and written agreements on
that subject with the exception of (i) the options previously granted
and delivered to the undersigned under stock option plans of the
Company, and (ii) the following agreements only:
NONE _____________________________
(Initial)
OTHER
_____________________________
_____________________________
(c) Acknowledges receipt of a copy of Section 260.141.11 of
Title 10 of the California Code of Regulations.
_______________________
OPTIONEE
Address:_______________________
_______________________
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<PAGE>
NONSTATUTORY STOCK OPTION
____________________, Optionee:
SBE, Inc. (the "Company"), pursuant to its 1996 Stock Option Plan
(the "Plan"), has granted to you, the optionee named above, an option
to purchase shares of the common stock of the Company ("Common Stock").
This option is not intended to qualify and will not be treated as an
"incentive stock option" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
The grant hereunder is in connection with and in furtherance of
the Company's compensatory benefit plan for participation of the
Company's employees (including officers), directors or consultants.
The details of your option are as follows:
1. Total Number Of Shares Subject To This Option. The total
number of shares of Common Stock subject to this option is
_________________________ ( ).
2. Vesting. Subject to the limitations contained herein,
__________ of the shares will vest (become exercisable) on
____________, 19__ and __________ of the shares will then vest each
____________ thereafter until either (i) you cease to provide services
to the Company for any reason, or (ii) this option becomes fully
vested.
3. Exercise Price And Method Of Payment.
(a) Exercise Price. The exercise price of this option is
__________________________ ($_________) per share, being not less than
85% of the fair market value of the Common Stock on the date of grant
of this option.
(b) Method of Payment. Payment of the exercise price per
share is due in full upon exercise of all or any part of each
installment which has accrued to you. You may elect, to the extent
permitted by applicable statutes and regulations, to make payment of
the exercise price under one of the following alternatives:
(i) Payment of the exercise price per share in cash
(including check) at the time of exercise;
(ii) Payment pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board which, prior
to the issuance of Common Stock, results in either the receipt of cash
(or check) by the Company or the receipt of irrevocable instructions to
pay the aggregate exercise price to the Company from the sales
proceeds;
(iii) Provided that at the time of exercise the
Company's Common Stock is publicly traded and quoted regularly in the
Wall Street Journal, payment by delivery of already-owned shares of
Common Stock, held for the period required to avoid a charge to the
Company's reported earnings, and owned free and clear of any liens,
claims, encumbrances or security interests, which Common Stock shall be
valued at its fair market value on the date of exercise; or
(iv) Payment by a combination of the methods of
payment permitted by subparagraph 3(b)(i) through 3(b)(iii) above.
4. Whole Shares; Minimum Shares Exercisable.
(a) This option may not be exercised for any number of
shares which would require the issuance of anything other than whole
shares.
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<PAGE>
(b) The minimum number of shares with respect to which
this option may be exercised at any one time is one hundred (100)
shares, except that (i) as to that number of shares to which it is
exercisable under the provisions of paragraph 2 of this option, if
fewer than one hundred (100) shares, the number of such shares
exercisable shall be the minimum number of shares that are vested
thereunder, and (ii) with respect to the final exercise of this option
this minimum shall not apply.
5. Securities Law Compliance. Notwithstanding anything to the
contrary contained herein, this option may not be exercised unless the
shares issuable upon exercise of this option are then registered under
the Act or, if such shares are not then so registered, the Company has
determined that such exercise and issuance would be exempt from the
registration requirements of the Act.
6. Term. The term of this option commences on _________,
19__, the date of grant and expires on __________________ (the
"Expiration Date," which date shall be no more than ten (10) years from
the date this option is granted), unless this option expires sooner as
set forth below or in the Plan. In no event may this option be
exercised on or after the Expiration Date. This option shall terminate
prior to the Expiration Date as follows: three (3) months after the
termination of your Continuous Status as an Employee, Director or
Consultant with the Company or an Affiliate of the Company for any
reason or for no reason unless:
(a) such termination of Continuous Status as an Employee,
Director or Consultant is due to your permanent and total disability
(within the meaning of Section 422(c)(6) of the Code), in which event
the option shall expire on the earlier of the Expiration Date set forth
above or twelve (12) months following such termination of Continuous
Status as an Employee, Director or Consultant; or
(b) such termination of Continuous Status as an Employee,
Director or Consultant is due to your death or your death occurs within
three (3) months following your termination for any other reason, in
which event the option shall expire on the earlier of the Expiration
Date set forth above or eighteen (18) months after your death; or
(c) during any part of such three (3) month period the
option is not exercisable solely because of the condition set forth in
paragraph 5 above, in which event the option shall not expire until the
earlier of the Expiration Date set forth above or until it shall have
been exercisable for an aggregate period of three (3) months after the
termination of Continuous Status as an Employee, Director or
Consultant; or
(d) exercise of the option within three (3) months after
termination of your Continuous Status as an Employee, Director or
Consultant with the Company or with an Affiliate of the Company would
result in liability under section 16(b) of the Securities Exchange Act
of 1934 (the "Exchange Act), in which case the option will expire on
the earlier of (i) the Expiration Date set forth above, (ii) the tenth
(10th) day after the last date upon which exercise would result in such
liability or (iii) six (6) months and ten (10) days after the
termination of your Continuous Status as an Employee, Director or
Consultant with the Company or an Affiliate of the Company.
However, this option may be exercised following termination of
Continuous Status as an Employee, Director or Consultant only as to
that number of shares as to which it was exercisable on the date of
termination of Continuous Status as an Employee, Director or Consultant
under the provisions of paragraph 2 of this option.
7. Exercise.
(a) This option may be exercised, to the extent specified
above, by delivering a notice of exercise (in a form designated by the
Company) together with the exercise price to the Secretary of the
Company, or to such other person as the Company may designate, during
regular business hours, together with such additional documents as the
Company may then require pursuant to subsection 6(f) of the Plan.
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<PAGE>
(b) By exercising this option you agree that:
(i) as a precondition to the completion of any
exercise of this option, the Company may require you to enter an
arrangement providing for the cash payment by you to the Company of any
tax withholding obligation of the Company arising by reason of: (1) the
exercise of this option; (2) the lapse of any substantial risk of
forfeiture to which the shares are subject at the time of exercise; or
(3) the disposition of shares acquired upon such exercise. You also
agree that any exercise of this option has not been completed and that
the Company is under no obligation to issue any Common Stock to you
until such an arrangement is established or the Company's tax
withholding obligations are satisfied, as determined by the Company;
and
8. Transferability. This option is not transferable, except
by will or by the laws of descent and distribution, and is exercisable
during your life only by you or pursuant to a qualified domestic
relations order as satisfying the requirements of Rule 16b-3 of the
Exchange Act (a "QDRO"), and is exercisable during your life only by
you or a transferee pursuant to a QDRO. Notwithstanding the foregoing,
by delivering written notice to the Company, in a form satisfactory to
the Company, you may designate a third party who, in the event of your
death, shall thereafter be entitled to exercise this option.
9. Option Not A Service Contract. This option is not an
employment contract and nothing in this option shall be deemed to
create in any way whatsoever any obligation on your part to continue in
the employ of the Company, or of the Company to continue your
employment with the Company. In addition, nothing in this option shall
obligate the Company or any Affiliate of the Company, or their
respective stockholders, Board of Directors, officers, or employees to
continue any relationship which you might have as a Director or
Consultant for the Company or Affiliate of the Company.
10. Notices. Any notices provided for in this option or the
Plan shall be given in writing and shall be deemed effectively given
upon receipt or, in the case of notices delivered by the Company to
you, five (5) days after deposit in the United States mail, postage
prepaid, addressed to you at the address specified below or at such
other address as you hereafter designate by written notice to the
Company.
11. Governing Plan Document. This option is subject to all the
provisions of the Plan, a copy of which is attached hereto and its
provisions are hereby made a part of this option, including without
limitation the provisions of Section 6 of the Plan relating to option
provisions, and is further subject to all interpretations, amendments,
rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the
provisions of this option and those of the Plan, the provisions of the
Plan shall control.
Dated the ____ day of __________________, 19__.
Very truly yours,
_______________________
By ____________________
Duly authorized
on behalf of the
Board of Directors
ATTACHMENTS:
SBE, Inc. 1996 Stock Option Plan
Notice of Exercise
25
<PAGE>
The undersigned:
(a) Acknowledges receipt of the foregoing option and the
attachments referenced therein and understands that all rights and
liabilities with respect to this option are set forth in the option and
the Plan; and
(b) Acknowledges that as of the date of grant of this
option, it sets forth the entire understanding between the undersigned
optionee and the Company and its Affiliates regarding the acquisition of
stock in the Company and supersedes all prior oral and written
agreements on that subject with the exception of (i) the options
previously granted and delivered to the undersigned under stock option
plans of the Company, and (ii) the following agreements only:
NONE ________________________
(Initial)
OTHER
________________________
________________________
(c) Acknowledges receipt of a copy of Section 260.141.11
of Title 10 of the California Code of Regulations.
_______________________
OPTIONEE
Address: _______________________
_______________________
26
