<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 12, 1998
REGISTRATION NO. 333-_____________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
------------
PEOPLESOFT, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 68-0137069
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
4460 HACIENDA DRIVE
PLEASANTON, CALIFORNIA 94588
(Address of Principal Executive Offices) (Zip Code)
----------------------
INTREPID SYSTEMS, INC. 1992 STOCK OPTION PLAN
(Full title of the Plan)
----------------------
DAVID A. DUFFIELD
PRESIDENT AND CHIEF EXECUTIVE OFFICER
PEOPLESOFT, INC.
4460 HACIENDA DRIVE, PLEASANTON, CALIFORNIA 94588
(Name and Address of Agent for Service)
(925) 694-3000
(Telephone number, including area code, of agent for service)
----------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==================================================================================================================
Title of Proposed Maximum Proposed Maximum
Securities to Amount to be Offering Price Aggregate Amount of
be Registered Registered(1) per Share(2) Offering Price(2) Registration Fee
------------- ------------- ---------------- ----------------- ----------------
<S> <C> <C> <C> <C>
Common Stock, par
value $.01 per share 130,130 shares $32.50 $4,229,225 $1,247.62
==================================================================================================================
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the Intrepid Systems, Inc. 1992
Stock Option Plan by reason of any stock dividend, stock split,
recapitalization or other similar transaction effected without the receipt
of consideration which results in an increase in the number of the
outstanding shares of PeopleSoft, Inc. Common Stock.
(2) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, on the basis of the maximum offering
price per share as such option may be exercised.
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
PeopleSoft, Inc. (the "Registrant") hereby incorporates by reference into
this Registration Statement the following documents previously filed with the
Securities and Exchange Commission (the "SEC"):
(a) The Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997;
(b) The Registrant's Quarterly Report on Form 10-Q for the fiscal quarters
ended March 31 and June 30, 1998; and
(c) The description of the Registrant's Common Stock to be offered hereby
contained in the Registrant's Registration Statement on Form 8-A dated
October 7, 1992, filed pursuant to Section 12(g) of the Exchange Act
including any amendment or report filed for the purpose of updating
such description.
(d) The description of the Registrant's Preferred Share Purchase Rights
contained in its Registration Statement on Form 8-A/A filed with the
Commission on March 25, 1998 including any amendment or report filed
for the purpose of updating such description.
All documents filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "1934 Act") after the date of
this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents.
Item 4. Description of Securities
Not Applicable.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's Board of Directors to grant, indemnity to directors
and officers in terms sufficiently
<PAGE> 3
broad to permit such indemnification under certain circumstances for liabilities
(including reimbursement for expenses incurred) arising under the Securities Act
of 1933 ( the "1933 Act"). Article XIII of the Registrant's currently effective
Certificate of Incorporation and Article VI of the Registrant's Bylaws provide
for indemnification of its directors, officers, employees and other agents. In
addition, the Registrant has entered into indemnification agreements with its
officers and directors.
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<S> <C>
4 Instruments Defining Rights of Stockholders. Reference is made to
Registrant's Registration Statements on Form 8-A which are
incorporated herein by reference pursuant to Items 3(c) and (d).
5 Opinion and consent of Gibson, Dunn & Crutcher LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Gibson, Dunn & Crutcher is contained in Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99 Intrepid Systems, Inc. 1992 Stock Option Plan.
</TABLE>
Item 9. Undertaking
A. The undersigned Registrant 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 1933 Act; (ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement; and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
Registration Statement; provided, however, that clauses (1)(i) and (l)(ii) shall
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the 1934 Act that are
incorporated by reference into this Registration Statement; (2) that for the
purpose of determining any liability under the 1933 Act, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof, and
(3) to remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold upon the termination of the
Intrepid Systems, Inc. 1992 Stock Option Plan.
II-2
<PAGE> 4
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is
incorporated by reference into this Registration Statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the 1933 Act
may be permitted to directors, officers or controlling persons of the Registrant
pursuant to the indemnity provisions incorporated by reference in Item 6, or
otherwise, the Registrant has been informed that in the opinion of the SEC such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
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 Pleasanton, State of California, on this 8th
day of October, 1998.
PEOPLESOFT, INC.
By: /s/ David A. Duffield
-----------------------------
David A. Duffield
President and Chief Executive
Officer and Director
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of PeopleSoft, Inc., a Delaware
corporation, do hereby constitute and appoint David A. Duffield, Ronald E.F.
Codd and Robert D. Finnell, and each of them, the lawful attorneys-in- fact and
agents with full power and authority to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, and either one
of them, determine may be necessary or advisable or required to enable said
corporation to comply with the Securities Act of 1933, as amended, and any rules
or regulations
II-3
<PAGE> 5
or requirements of the Securities and Exchange Commission in connection with
this Registration Statement. Without limiting the generality of the foregoing
power and authority, the powers granted include the power and authority to sign
the names of the undersigned officers and directors in the capacities indicated
below to this Registration Statement, to any and all amendments, both
pre-effective and post-effective, and supplements to this Registration
Statement, and to any and all instruments or documents filed as part of or in
conjunction with this Registration Statement or amendments or supplements
thereof, and each of the undersigned hereby ratifies and confirms that all said
attorneys and agents, or either of them, shall do or cause to be done by virtue
hereof. This Power of Attorney may be signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
II-4
<PAGE> 6
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ David A. Duffield Chairman of the Board of Directors, October 8, 1998
- ----------------------------- President and Chief Executie Officer
David A. Duffield Directors, President and Chief
(Principal Executive Officer)
/s/ Ronald E.F. Codd Senior Vice President of Finance, October 16, 1998
- ------------------------------ Chief Financial Officer and Secretary
Ronald E.F. Codd (Principal Financial Officer)
/s/ Alfred J. Castino Vice President of Finance, Chief October 8, 1998
- ------------------------------ Accounting Officer, and Corporate
Alfred J. Castino Controller (Principal Accounting
Officer)
/s/ A. George "Skip" Battle Director October 8, 1998
- ------------------------------
A. George "Skip" Battle
/s/ Edgar F. Codd Director October 8, 1998
- ------------------------------
Edgar F. Codd
Director , 1998
- ------------------------------
Albert W. Duffield
/s/ George J. Still, Jr. Director October 8, 1998
- ------------------------------
George J. Still, Jr.
/s/ Cyril J. Yansouni Director October 8, 1998
- ------------------------------
Cyril J. Yansouni
</TABLE>
II-5
<PAGE> 7
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
PEOPLESOFT, INC.
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<S> <C>
4 Instruments Defining Rights of Stockholders. Reference is made to
Registrant's Registration Statements on Form 8-A which are incorporated
herein by reference pursuant to Items 3(c) and (d).
5 Opinion and consent of Gibson, Dunn & Crutcher LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Gibson, Dunn & Crutcher LLP is contained in Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this Registration
Statement.
99 Intrepid Systems, Inc. 1992 Stock Option Plan.
</TABLE>
<PAGE> 1
EXHIBIT 5
[Letterhead of Gibson, Dunn & Crutcher LLP]
October 12, 1998
PeopleSoft, Inc.
4460 Hacienda Drive
Pleasanton, CA 94588
Re: Registration Statement on Form S-8 of
PeopleSoft, Inc.
Ladies and Gentlemen:
We refer to the registration statement on Form S-8 ("Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act")
filed by PeopleSoft, Inc., a Delaware corporation (the "Company"), with respect
to the proposed offering by the Company of up to 130,130 shares (the "Shares"),
of the common stock of the Company, $.01 par value per share (the "Common
Stock") under the Intrepid Systems, Inc. 1992 Stock Option Plan (the "Plan").
We have examined the originals or certified copies of such corporate
records, certificates of officers of the Company and/or public officials and
such other documents and have made such other factual and legal investigations
as we have deemed relevant and necessary as the basis for the opinions set forth
below. In such examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, the conformity
to original documents of all documents submitted to us as conformed or
photostatic copies and the authenticity of the originals of such copies.
Based on our examination mentioned above, subject to the assumptions stated
above and relying on the statements of fact contained in the documents that we
have examined, we are of the opinion that (i) the issuance by the Company of the
Shares has been duly authorized and (ii) when issued in accordance with the
terms of the Plan, the Shares will be duly and validly issued, fully paid and
non-assessable shares of Common Stock.
We are admitted to practice in the State of California, and are not
admitted to practice in the State of Delaware. However, for the limited purposes
of our opinion set forth above, we are generally familiar with the General
Corporation Law of the State of Delaware (the "DGCL") as presently in effect and
have made such inquiries as we consider necessary to render this opinion with
respect to a Delaware corporation. This opinion letter is limited to the laws of
the State of California and, to the limited extent set forth above, the DGCL, as
such laws presently exist and to the facts as they presently exist. We express
no opinion with respect to the effect or applicability of the laws of any other
jurisdiction. We assume no obligation to revise or supplement this opinion
letter should the laws of such jurisdictions be changed after the date hereof by
legislative action, judicial decision or otherwise.
<PAGE> 2
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
GIBSON, DUNN & CRUTCHER LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the Intrepid Systems, Inc. 1992 Stock Option Plan of
PeopleSoft, Inc. of our report dated January 28, 1998, with respect to the
consolidated financial statements of PeopleSoft Inc. included in its Form 10-K
for the year ended December 31, 1997, filed with the Securities and Exchange
Commission.
San Jose, California
October 19, 1998
<PAGE> 1
EXHIBIT 99
INTREPID SYSTEMS, INC.
1992 STOCK OPTION PLAN
(AS AMENDED JANUARY 23, 1997)
1. Purposes of the Plan. The purposes of this 1992 Stock Option Plan are
to attract and retain the best available personnel for positions of substantial
responsibility with the Company, to provide additional incentive to Employees
and Consultants of the Company and its Subsidiaries and to promote the success
of the Company's business. Options granted under the Plan may be incentive stock
options (as defined under Section 422 of the Code) or non-statutory stock
options, as determined by the Administrator at the time of grant of an option
and subject to the applicable provisions of the Code and the regulations
promulgated thereunder.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Cause" means the commission of any act affecting employment
which involves (1) dishonesty, fraud or criminal conduct by Optionee, (2)
Optionee's knowing and willful violation of a material Company written
policy or a lawful direction by an authorized executive officer or the
Board, (3) Optionee's engaging in any activity in competition with the
Company or its subsidiaries in a material manner (excluding a less than 1%
investment in any public company), or (4) Optionee's knowing unauthorized
disclosure of confidential material, proprietary information or trade
secrets of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the committee appointed by the Board of
Directors in accordance with paragraph (a) of Section 4 of the Plan.
(f) "Common Stock" means the Common Stock of the Company.
(g) "Company" means Intrepid Systems, Inc., a California corporation,
and its successors.
(h) "Consultant" means any person, including an advisor, who is
engaged by the Company or any Parent or Subsidiary to render services and
is compensated for such services, and any director of the Company whether
compensated for such services or not, provided that if and in the event the
Company registers any class of any equity security pursuant to the Exchange
Act, the term Consultant shall thereafter not include directors who are not
compensated for their services or are paid only a director's fee by the
Company.
<PAGE> 2
(i) "Continuous Status as an Employee or Consultant" means the
absence of any interruption or termination of the employment or consulting
relationship by the Company or any Parent or Subsidiary. Continuous Status
as an Employee or Consultant shall not be considered interrupted in the
case of: (i) sick leave; (ii) military leave; (iii) any other leave of
absence approved by the Board, provided that such leave is for a period of
not more than 90 days, unless reemployment upon the expiration of such
leave is guaranteed by contract or statute, or unless provided otherwise
pursuant to Company policy adopted from time to time; or (iv) in the case
of transfers between locations of the Company or between the Company, its
Parent, Subsidiaries or successor.
(j) "Employee" means any person, including officers and directors,
employed by the Company or any Parent or Subsidiary of the Company. The
payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(l) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) 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, its Fair Market
Value 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,
for the last market trading day prior to the time of determination) as
reported in The Wall Street Journal or such other source as the
Administrator deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ System (but not
on the National Market System thereof) or regularly quoted by a
recognized securities dealer but selling prices are not reported, its
Fair Market Value shall be the mean between the high bid and low asked
prices for the Common Stock for the last market trading day prior to
the time of determination as reported in The Wall Street Journal or
such other source as the Administrator deems reliable; or
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith
by the Administrator.
(m) "Incentive Stock Option" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code.
(n) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
2
<PAGE> 3
(o) "Option" means a stock option granted pursuant to the Plan.
(p) "Optioned Stock" means the Common Stock subject to an Option.
(q) "Optionee" means an Employee or Consultant who receives an
Option.
(r) "Parent" means a "parent corporation, "whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(s) "Plan" means this 1992 Stock Option Plan.
(t) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.
(u) "Subsidiary" means a "subsidiary corporation, "whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 12 of
the Plan, the maximum aggregate number of shares which may be optioned and sold
under the Plan is 675,000 shares of Common Stock. The shares may be authorized,
but unissued, or reacquired Common Stock.
If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares which were subject thereto
shall, unless the Plan shall have been terminated, become available for future
grant under the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Administration With Respect to Directors and Officers. With
respect to grants of Options to Employees who are also officers or
directors of the Company, the Plan shall be administered by (A) the
Board if the Board may administer the Plan in compliance with Rule
16b-3 promulgated under the Exchange Act or any successor thereto
("Rule 16b-3") with respect to a plan intended to qualify thereunder
as a discretionary plan, or (B) a committee designated by the Board to
administer the Plan, which committee shall be constituted in such a
manner as to permit the Plan to comply with Rule 16b-3 with respect to
a plan intended to qualify thereunder as a discretionary plan. Once
appointed, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board. From time to time the
Board may increase the size of the Committee and appoint additional
members thereof, remove members (with or without cause) and appoint
new members in substitution therefor, fill vacancies, however caused,
and remove all members of the Committee and thereafter directly
administer the Plan, all to the extent permitted by Rule 16b-3 with
respect to a plan intended to qualify thereunder as a discretionary
plan.
3
<PAGE> 4
(ii) Multiple Administrative Bodies. If permitted by Rule 16b-3,
the Plan may be administered by different bodies with respect to
directors, non-director officers, and Employees and Consultants who
are neither directors nor officers.
(iii) Administration With Respect to Consultants and Other
Employees. With respect to grants of Options to Employees or
Consultants who are neither directors nor officers of the Company, the
Plan shall be administered by (A) the Board, or (B) a committee
designated by the Board, which committee shall be constituted in such
a manner as to satisfy the legal requirements relating to the
administration of incentive stock option plans, if any, of applicable
corporate and securities laws and of the Code (the "Applicable Laws").
Once appointed, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board. From time
to time the Board may increase the size of the Committee and appoint
additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies, however
caused, and remove all members of the Committee and thereafter
directly administer the Plan, all to the extent permitted by the
Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the
Plan and in the case of a Committee, the specific duties delegated by the
Board to such Committee, the Administrator shall have the authority, in its
discretion:
(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(k) of the Plan;
(ii) to select the Consultants and Employees to whom Options may
from time to time be granted hereunder;
(iii) to determine whether and to what extent Options are granted
hereunder;
(iv) to determine the number of shares of Common Stock to be
covered by each such award granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder;
(vii) to determine whether and under what circumstances an Option
may be settled in cash under subsection 9(f) instead of Common Stock;
(viii) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option shall have declined since the date the Option
was granted.
4
<PAGE> 5
(c) Effect of Administrator's Decision. All decision, determinations
and interpretations of the Administrator shall be final and binding on all
Optionees and any other holders of any Options.
5. Eligibility.
(a) Nonstatutory Stock Options may be granted to Employees and
Consultants. Incentive Stock Options may be granted only to Employees. An
Employee or Consultant who has been granted an Option may, if he or she is
otherwise eligible, be granted an additional Option or Options.
(b) Each Option shall be designated in the written option agreement
as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designations, to the extent that the
aggregate Fair Market Value of the Shares with respect to which Options
designated as Incentive Stock Options are exercisable for the first time by
any Optionee during any calendar year (under all plans of the Company or
any Parent or Subsidiary) exceeds $100,000, such excess Options shall be
treated as Nonstatutory Stock Options.
(c) For purposes of Section 5(b), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair
Market Value of the Shares shall be determined as of the time the Option
with respect to such Shares is granted.
(d) THE PLAN SHALL NOT CONFER UPON ANY OPTIONEE ANY RIGHT WITH
RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTING RELATIONSHIP WITH THE
COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH HIS RIGHT OR THE COMPANY'S
RIGHT TO TERMINATE HIS EMPLOYMENT OR CONSULTING RELATIONSHIP AT ANY TIME,
WITH OR WITHOUT CAUSE.
6. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
stockholders of the Company as described in Section 18 of the Plan. It shall
continue in effect for a term of ten years unless sooner terminated under
Section 14 of the Plan.
7. Term of Option. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that the term shall be no more than ten
years from the date of grant thereof or such shorter term as may be provided in
the Option Agreement. However, in the case of an Option granted to an Optionee
who, at the time the Option is granted, owns stock representing more than ten
percent of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the term of the Option shall be five years from the date of grant
thereof or such shorter term as may be provided in the Option Agreement.
5
<PAGE> 6
8. Option Exercise Price and Consideration.
(a) The per share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the Board,
but shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the grant of
such Incentive Stock Option, owns stock representing more
than ten percent of the voting power of all classes of stock
of the Company or any Parent or Subsidiary, the per Share
exercise price shall be no less than 110% of the Fair Market
Value per Share on the date of grant.
(B) granted to any other Employee, the per Share exercise
price shall be no less than 100% of the Fair Market Value
per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option
(A) granted to a person who, at the time of the grant of
such Option, owns stock representing more than ten percent
of the voting power of all classes of stock of the Company
or any Parent or Subsidiary, the per Share exercise price
shall be no less than 110% of the Fair Market Value per
share on the date of the grant.
(B) granted to any other person, the per Share exercise
price shall be no less than 85% of the Fair Market Value per
Share on the date of grant.
(b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined
by the Administrator (and, in the case of an Incentive Stock Option, shall
be determined at the time of grant) and may consist entirely of (1) cash,
(2) check, (3) promissory note, (4) other Shares which (x) in the case of
Shares acquired upon exercise of an Option have been owned by the Optionee
for more than six months on the date of surrender, and (y) have a Fair
Market Value on the date of surrender equal to the aggregate exercise price
of the Shares as to which said Option shall be exercised, (5) authorization
of the Company to retain from the total number of Shares as to which the
Option is exercised that number of Shares having a Fair Market Value on the
date of exercise equal to the exercise price for the total number of Shares
as to which the Option is exercised, (6) delivery of a properly executed
exercise notice together with such other documentation as the Administrator
and the broker, if applicable, shall require to effect an exercise of the
Option and delivery to the Company of the sale or loan proceeds required to
pay the exercise price, (7) by delivering an irrevocable subscription
agreement for the Shares which irrevocably obligates the
6
<PAGE> 7
option holder to take and pay for the Shares not more than 12 months after
the date of delivery of the subscription agreement, (8) any combination of
the foregoing methods of payment, or (9) such other consideration and
method of payment for the issuance of Shares to the extent permitted under
Applicable Laws. In making its determination as to the type of
consideration to accept, the Board shall consider if acceptance of such
consideration may be reasonably expected to benefit the Company.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable at such times and under such
conditions as determined by the Board, including performance criteria with
respect to the Company and/or the Optionee, and as shall be permissible
under the terms of the Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 8(b) of the Plan.
The Company shall issue (or cause to be issued) such stock certificate promptly
upon exercise of the Option.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Employment. In the event of termination of an
Optionee's Continuous Status as an Employee or Consultant with the Company
(as the case may be), such Optionee may, but only within three months (or
such other period of time as is determined by the Board, with such
determination in the case of an Incentive Stock Option being made at the
time of grant of the Option and not exceeding three months) after the date
of such termination (but in no event later than the expiration date of the
term of such Option as set forth in the Option Agreement), exercise the
Option to the extent that Optionee was entitled to exercise it at the date
of such termination. To the extent that Optionee was not entitled to
exercise the Option at the date of such termination, or if Optionee does
not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions of Section
9(b) above, in the event of termination of an Optionee's Continuous Status
as an Employee or Consultant as a result of total and permanent disability
(as defined in Section 22(e)(3) of the Code), Optionee may, but only within
12 months from the date of such termination (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise the Option to the extent otherwise entitled to
exercise it at
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the date of such termination. To the extent that Optionee was not entitled
to exercise the Option at the date of termination, or if Optionee does not
exercise such Option to the extent so entitled within the time specified
herein, the Option shall terminate.
(d) Death of Optionee. In the event of the death of an Optionee, the
Option may be exercised, at any time within 12 months following the date of
death (but in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), by the Optionee's estate or
by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent the Optionee was entitled to exercise
the Option at the date of death. To the extent that Optionee was not
entitled to exercise the Option at the date of termination, or if Optionee
does not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate.
(e) Rule 16b-3. Options granted to persons subject to Section 16(b)
of the Exchange Act must comply with Rule 16b-3 and shall contain such
additional conditions or restrictions as may be required thereunder to
qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.
10. Non-Transferability of Options. The Option may not be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
11. Stock Withholding to Satisfy Withholding Tax Obligations. At the
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph. When an Optionee incurs tax liability in
connection with an Option, which tax liability is subject to tax withholding
under applicable tax laws, and the Optionee is obligated to pay the Company an
amount required to be withheld under applicable tax laws, the Optionee may
satisfy the withholding tax obligations by one or some combination of the
following methods: (i) by cash payment; (ii) out of Optionee's current
compensation; (iii) if permitted by the Administrator, in its discretion, by
surrendering to the Company Shares which (a) in the case of Shares previously
acquired from the Company, have been owned by the Optionee for more than six
months on the date of surrender, and (b) have a fair market value on the date of
surrender equal to or less than Optionee's marginal tax rate times the ordinary
income recognized; or (iv) if permitted by the Administrator, in its discretion,
by electing to have the Company withhold from the Shares to be issued upon
exercise of the Option that number of Shares having a fair market value equal to
the amount required to be withheld. For this purpose, the fair market value of
the Shares to be withheld shall be determined on the date that the amount of tax
to be withheld is to be determined (the "Tax Date").
If the Optionee is subject to Section 16 of the Exchange Act (an
"Insider"), any surrender of previously owned Shares to satisfy tax withholding
obligations arising upon exercise of this Option must comply with the applicable
provisions of Rule 16b-3 promulgated under the Exchange Act ("Rule 16b-3") and
shall be subject to such additional conditions or restrictions as
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may be required thereunder to qualify for the maximum exemption from Section 16
of the Exchange Act with respect to Plan transactions.
All elections by an Optionee to have Shares withheld to satisfy tax
withholding obligations shall be made in writing in a form acceptable to the
Administrator and shall be subject to the following restrictions:
(a) the election must be made on or prior to the applicable Tax Date;
(b) once made, the election shall be irrevocable as to the particular
Shares of the Option as to which the election is made;
(c) all elections shall be subject to the consent or disapproval of
the Administrator, in its discretion; and
(d) if the Optionee is an Insider, the election must comply with the
applicable provisions of Rule 16b-3 and shall be subject to such additional
conditions or restrictions as may be required thereunder to qualify for the
maximum exemption from Section 16 of the Exchange Act with respect to Plan
transactions.
In the event the election to have Shares withheld is made by an Optionee
and the Tax Date is deferred under Section 83 of the Code because no election is
filed under Section 83(b) of the Code, the Optionee shall receive the full
number of Shares with respect to which the Option is exercised but such Optionee
shall be unconditionally obligated to tender back to the Company the proper
number of Shares on the Tax Date.
12. Adjustments Upon Changes in Capitalization or Merger.
(a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered
by each outstanding Option, and the number of shares of Common Stock which
have been authorized for issuance under the Plan but as to which no Options
have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding Option, shall be
proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse stock
split, stock dividend, combination or reclassification of the Common Stock,
or any other increase or decrease in the number of issued shares of Common
Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall
not be deemed to have been "effect without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and
no adjustment by reason thereof shall be made with respect to, the number
or price of shares of Common Stock subject to an Option.
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(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Board shall notify the
Optionee at least 15 days prior to such proposed action. To the extent it
has not been previously exercised, the Option will terminate immediately
prior to the consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the Company
with or into another corporation, or the sale of substantially all of the
assets of the Company:
(i) Each outstanding Option shall be assumed or an equivalent
option substituted by the successor corporation or a Parent of
Subsidiary of the successor corporation. In the event that the
successor corporation refuses to assume or substitute for the Option,
the Optionee shall fully vest in and have the right to exercise the
Option as to all of the Optioned Stock, including Shares as to which
it would not otherwise be vested or exercisable. If an Option becomes
fully vested and exercisable in lieu of assumption or substitution in
the event of a merger or sale of assets, the Administrator shall
notify the Optionee in writing or electronically that the Option shall
be fully exercisable for a period of thirty (30) days from the date of
such notice, and the Option shall terminate upon the expiration of
such period. For the purposes of this paragraph, the Option shall be
considered assumed if, following the merger or sale of assets, the
option confers the right to purchase or receive, for each Share of
Optioned Stock subject to the Option immediately prior to the merger
or sale of assets, the consideration (whether stock, cash, or other
securities or property) received in the merger or sale of assets by
holders of Common Stock for each Share held on the effective date of
the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the merger or sale of assets is not solely
common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the
Option, for each Share of Optioned Stock subject to the Option, to be
solely common stock of the successor corporation or its Parent equal
in fair market value to the per share consideration received by
holders of Common Stock in the merger or sale of assets; and
(ii) If each outstanding Option has been assumed or substituted
for, then such Option shall become fully (100%) vested and exercisable
(including Shares as to which it would not otherwise be vested or
exercisable) upon an involuntary termination other than for Cause of
Optionee's Continuous Status as an Employee or Consultant within six
(6) months of the merger or asset sale.
13. Time of Granting Options. The date of grant of an Option shall, for
all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Board. Notice
of the determination shall be given to each Employee or Consultant to whom an
Option is so granted within a reasonable time after the date of such grant.
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14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation shall be made which would impair the rights
of any Optionee under any grant theretofore made, without his or her
consent. In addition, to the extent necessary and desirable to comply with
Rule 16b-3 under the Exchange Act or with Section 422 of the Code (or any
other applicable law or regulation, including the requirements of the NASD
or an established stock exchange), the Company shall obtain stockholder
approval of any Plan amendment in such a manner and to such a degree as
required.
(b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the
Optionee and the Board, which agreement must be in writing and signed by
the Optionee and the Company.
15. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option 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, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any national market system or 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.
As a condition to the exercise of an Option, the Company may require the
person exercising such Option 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 of the
aforementioned relevant provisions of law.
16. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.
17. Agreements. Options shall be evidenced by written agreements in such
form as the Board shall approve from time to time.
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18. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the stockholders of the Company within 12 months before or after the
date the Plan is adopted. Such stockholder approval shall be obtained in the
degree and manner required under applicable state and federal law.
19. Information to Optionees. The Company shall provide to each Optionee
and individual who acquired shares pursuant to the exercise of an option, during
the period for which such Optionee has one or more Options outstanding, copies
of all annual reports and other information which are provided to all
stockholders of the Company. The Company shall not be required to provide such
information if the issuance of Options under the Plan is limited to key
employees whose duties in connection with the Company assure their access to
equivalent information.
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