<PAGE>
As Filed with the Securities and Exchange Commission on
November 4, 1997
Registration No. 333-
- -----------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
---------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
Alteon Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware 13-3304550
(State of Incorporation) (I.R.S. Employer Identification No.)
170 Williams Drive,
Ramsey, New Jersey 07446
(201) 934-5000
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
ALTEON INC. AMENDED 1995 STOCK OPTION PLAN
(Full Title of the Plan)
JAMES J. MAUZEY
Chief Executive Officer
Alteon Inc.
170 Williams Drive
Ramsey, New Jersey 07446
(201) 934-5000
(Name, address, and telephone number, including
area code, of agent for service)
---------------------
Copies to:
RICHARD J. PINTO, ESQ.
Smith, Stratton, Wise, Heher & Brennan
600 College Road East
Princeton, New Jersey 08540
(609) 924-6000
---------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum Amount of
Title of Amount to be Offering Price Aggregate Registration
Securities to be Registered Registered(1) per Share(2) Offering Price(2) Fee
- ----------------------------- ------------- ----------------- ----------------- -------------
<S> <C> <C> <C> <C>
Common Stock, $.01
par value. . . . . . . . . 1,000,000 $5.1875 $5,187,500 $1,571.97
</TABLE>
(1) This Registration Statement also covers an indeterminate
number of shares as may be issued as a result of the anti-
dilution provisions of the Plan.
(2) Pursuant to Rule 457(h), these prices are estimated solely
for the purpose of calculating the registration fee and are
based upon the average of the high and low sales prices of
the Registrant's Common Stock as reported on the Nasdaq
National Market on October 28, 1997.
- -----------------------------------------------------------------
<PAGE>
<PAGE>
EXPLANATORY NOTE
This Registration Statement is being filed by Alteon Inc.
(the "Company"), pursuant to General Instruction E to Form S-8,
with respect to the registration of additional securities of the
same class as other securities for which the Company's
Registration Statements on Form S-8 (Registration Nos. 333-04496,
33-89134 and 33-60576) relating to the Alteon Inc. 1987 Amended
and Restated Stock Option Plan (the "1987 Plan") and the Alteon
Inc. Amended 1995 Stock Option Plan (the "1995 Plan") were filed
with the Securities and Exchange Commission on May 3, 1996,
February 2, 1995 and April 2, 1993, respectively, and which are
incorporated herein by reference. On June 10, 1997 the
stockholders of the Company approved an increase in the number of
shares of Common Stock of the Company reserved for issuance upon
the exercise of options granted under the 1995 Plan from
1,000,000 to 2,000,000 shares. The additional 1,000,000 shares
are being registered under this Registration Statement.
In accordance with the Note to Part I of Form S-8, the
information specified by Part I of Form S-8 has been omitted from
this Registration Statement.
<PAGE>
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Commission are
incorporated herein by reference:
(a) The Company's Registration Statements on Form S-8
(Registration Nos. 333-04496, 33-89134 and 33-60576).
(b) The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996.
(c) All other reports filed pursuant to Section 13(a) or
15(d) of the Exchange Act, since December 31, 1996.
(d) The description of the Company's Common Stock, $.01 par
value, which is contained in the Company's Registration
Statements on Form 8-A filed November 1, 1991 and Form
S-1 (Registration No. 33-42574) which became effective
on November 1, 1991, including any amendments or
reports filed for the purpose of updating such
description.
(e) The description of the Company's Rights to Purchase
Series F Preferred Stock which is contained in the
Company's Registration Statement on Form 8-A and
Current Report on Form 8-K, each filed August 4, 1995,
including any amendments or reports filed for the
purpose of updating such description.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the
date of the filing of such documents.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The financial statements incorporated by reference in this
Registration Statement to the extent and for the periods
indicated have been audited by Arthur Andersen LLP, independent
public accountants, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
The legality of the Common Stock being offered hereby has
been passed upon by Smith, Stratton, Wise, Heher & Brennan,
Princeton, New Jersey. A member of Smith, Stratton, Wise, Heher
& Brennan holds an option to purchase 16,800 shares of Common
Stock.
<PAGE>
<PAGE>
ITEM 8. EXHIBITS.
Exhibit
Number Description
- ------- -----------
4.1 - Restated Certificate of Incorporation. (Incorporated by
Reference to Exhibit 3.1 to the Company's Registration
Statement on Form S-1 (File Number 33-42574) which
became effective on November 1, 1991).
4.2 - By-laws, as amended. (Incorporated by reference to
Exhibit 3.1 to the Company's Current Report on Form 8-K
filed on April 22, 1996).
4.3 - Certificate of the Voting Powers, Designations,
Preference and Relative Participating, Optional and
Other Special Rights and Qualifications, Limitations or
Restrictions of Series F Preferred Stock of the
Company. (Incorporated by Reference to Exhibit 4.2 to
the Company's Current Report on Form 8-K filed on
August 4, 1995).
4.4 - Stockholders' Rights Agreement dated as of July 27,
1995, between Alteon Inc. and Registrar and Transfer
Company, as Rights Agent. (Incorporated by reference to
Exhibit 4.1 to the Company's Current Report on Form 8-K
filed on August 4, 1995).
4.5 - Amendment to Stockholders' Rights Agreement between
Alteon Inc. and Registrar and Transfer Company, as
Rights Agent. (Incorporated by reference to Exhibit
4.4 to the Company's Current Report on Form 8-K filed
on May 9, 1997).
5.1 - Opinion of Smith, Stratton, Wise, Heher & Brennan.
23.1 - Consent of Arthur Andersen LLP, independent public
accountants.
23.2 - Consent of Smith, Stratton, Wise, Heher & Brennan
(contained in Exhibit 5.1).
24.1 - Power of Attorney (see "Power of Attorney" below).
99.1 - Amended 1995 Stock Option Plan.
<PAGE>
<PAGE>
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the
Securities Act of 1933, 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 Ramsey,
State of New Jersey, on this 3rd day of November, 1997.
ALTEON INC.
By: /s/ James J. Mauzey
-------------------------
James J. Mauzey,
Chairman of the Board and
Chief Executive Officer
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints James J. Mauzey,
Kenneth I. Moch and Elizabeth A. O'Dell, and each or any one of
them, his or her true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him or her and
in his or her 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 or she might or could
do in person, hereby ratifying and conforming all that said
attorneys-in-fact and agents, or any of them, or their or his or
her 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 below by the
following persons in the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ James J. Mauzey Chairman of the Board, November 3,
- ----------------------- Chief Executive Officer 1997
James J. Mauzey and Director (principal
executive officer)
/s/ Jere E. Goyan President, Chief November 3,
- ----------------------- Operating Officer and 1997
Jere E. Goyan Director
/s/ Kenneth I. Moch Senior Vice President of November 3,
- ----------------------- Finance & Business 1997
Kenneth I. Moch Development and Chief
Financial Officer
(principal financial
officer)
/s/ Elizabeth A. O'Dell Treasurer, Secretary November 3,
- ----------------------- Vice President, Finance 1997
Elizabeth A. O'Dell and Administration
(principal accounting
officer)
/s/ Anthony Cerami Director November 3,
- ----------------------- 1997
Anthony Cerami
/s/ Marilyn G. Breslow Director November 3,
- ----------------------- 1997
Marilyn G. Breslow
/s/ Mark Novitch Director November 3,
- ----------------------- 1997
Mark Novitch
/s/ Robert N. Butler Director October 27,
- ----------------------- 1997
Robert N. Butler
/s/ Alan J. Dalby Director November 3,
- ----------------------- 1997
Alan J. Dalby
/s/ David McCurdy Director October 27,
- ----------------------- 1997
David McCurdy
<PAGE>
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
4.1 - Restated Certificate of Incorporation. (Incorporated
by Reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-1 (File Number
33-42574) which became effective on November 1, 1991).
4.2 - By-laws, as amended. (Incorporated by reference to
Exhibit 3.1 to the Company's Current Report on Form
8-K filed on April 22, 1996).
4.3 - Certificate of the Voting Powers, Designations,
Preference and Relative Participating, Optional and
Other Special Rights and Qualifications, Limitations or
Restrictions of Series F Preferred Stock of the
Company. (Incorporated by Reference to Exhibit 4.2 to
the Company's Current Report on Form 8-K filed on
August 4, 1995).
4.4 - Stockholders' Rights Agreement dated as of July 27,
1995, between Alteon Inc. and Registrar and Transfer
Company, as Rights Agent. (Incorporated by reference
to Exhibit 4.1 to the Company's Current Report on Form
8-K filed on August 4, 1995).
4.5 - Amendment to Stockholders' Rights Agreement between
Alteon Inc. and Registrar and Transfer Company, as
Rights Agent. (Incorporated by reference to Exhibit
4.4 to the Company's Current Report on Form 8-K filed
on May 9, 1997).
5.1 - Opinion of Smith, Stratton, Wise, Heher & Brennan.
23.1 - Consent of Arthur Andersen LLP, independent public
accountants.
23.2 - Consent of Smith, Stratton, Wise, Heher & Brennan
(contained in Exhibit 5.1).
24.1 - Power of Attorney (see "Power of Attorney" above).
99.1 - Amended 1995 Stock Option Plan.
[Letterhead of Smith, Stratton,
Wise, Heher & Brennan]
November 3, 1997
Alteon Inc.
170 Williams Drive
Ramsey, New Jersey 07446
Gentlemen:
We have acted as counsel to Alteon Inc., a Delaware
corporation (the "Company"), in connection with the filing by the
Company of a registration statement on Form S-8 (the
"Registration Statement"), under the Securities Act of 1933, as
amended. The Registration Statement relates to the registration
of 1,000,000 shares (the "Shares") of the Company's common stock,
$.01 par value, which are to be offered by the Company under its
Amended 1995 Stock Option Plan (the "Plan").
We have examined such corporate records and documents, other
documents, and such questions of law as we have deemed necessary
or appropriate for purposes of this opinion. On the basis of
such examination, it is our opinion that:
1. The issuance of the Shares has been duly and validly
authorized; and
2. The Shares, when issued, delivered and sold in
accordance with the terms of the Plan and the stock
options granted thereunder, will be validly issued,
fully paid and non-assessable.
We consent to the filing of this opinion as Exhibit 5.1 to
the Registration Statement and to the reference to this firm
under the heading "Interests of Named Experts and Counsel" in the
Registration Statement.
Sincerely,
/s/ Smith, Stratton, Wise,
Heher & Brennan
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Alteon Inc.:
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our
report dated February 20, 1997 included in Alteon Inc.'s Form 10-
K for the year ended December 31, 1996 and to all references to
our firm included in this registration statement.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Roseland, New Jersey
October 31, 1997
ALTEON INC.
AMENDED 1995 STOCK OPTION PLAN
1. Purposes of Plan. The purposes of this Stock Option
Plan are to attract and retain the best available personnel for
positions of substantial responsibility, 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 or Non-Qualified Stock Options, as determined by the
Administrator at the time of grant of an Option.
2. Certain Definitions. As used herein, the following
definitions shall apply:
2.1. "Administrator" means the Board or a Committee.
2.2. "Board" means the Board of Directors of the
Company.
2.3. "Code" means the Internal Revenue Code of 1986,
as amended, and the regulations thereunder.
2.4. "Committee" means a Committee appointed by the
Board in accordance with Section 4.1 of the Plan.
2.5. "Common Stock" means the Common Stock of the
Company.
2.6. "Company" means Alteon Inc., a Delaware
corporation.
2.7. "Consultant" means any person, including an
advisor, who is engaged by the Company or any Subsidiary to
render services and is compensated for such services. The
payment of a director's fee by the Company shall not render a
director a Consultant within the meaning of this section.
2.8. "Date of Grant" means the date on which an Option
is granted under the Plan pursuant to Section 12 of the Plan.
2.9. "Employee" means any person, including officers
and directors, employed by the Company or any Subsidiary of the
Company. The payment of a director's fee by the Company shall
not be sufficient to constitute employment by the Company.
2.10. "Exchange Act" means the Securities Exchange Act
of 1934, as amended.
2.11. "Fair Market Value" means, as of any date, the
value of the Common Stock determined as follows:
(a) 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 for the last
market trading day prior to such date as reported in the Wall
Street Journal or such other source as the Administrator deems
reliable;
(b) 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 and low asked prices for the Common Stock as
quoted on such System or by such dealer for the last market
trading day prior to such date; or
(c) 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.
2.12. "Incentive Stock Option" means an Option which
qualifies as an incentive stock option within the meaning of
Section 422 of the Code.
2.13. "Non-Compensated Directors" means directors of
the Company who are not Employees or Consultants.
2.14. "Non-Qualified Stock Option" means an Option
which does not qualify as an Incentive Stock Option.
2.15. "Option" means a stock option granted pursuant to
the Plan.
2.16. "Option Agreement" means the agreement which must
be entered into between the Optionee and the Company upon the
grant of an Option by the Company to the Optionee as approved by
the Administrator pursuant to Section 15 of the Plan.
2.17. "Optionee" means a person who receives an Option.
2.18. "Parent" means a "parent corporation", whether
now or hereafter existing, as defined in Section 424(e) of the
Code.
2.19. "Plan" means this 1995 Stock Option Plan.
2.20. "Share" means a share of the Common Stock, as
adjusted in accordance with Section 11 of the Plan.
2.21. "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 11 of the Plan, the maximum aggregate number of Shares
which may be optioned and sold under the Plan is 2,000,000 Shares
and the maximum number of Shares which may be covered by Options
granted to any employee in any calendar year may not exceed
500,000 Shares. 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.
4.1. Procedure.
(a) Administration With Respect to Directors and
Officers. With respect to grants of Options to Employees and
Consultants who are also officers or directors of the Company,
the Plan shall be administered, and grants of Options shall be
approved, by (i) the Board or (ii) a Committee designated by the
Board to administer the Plan, which Committee shall be
constituted in such a manner as (A) to permit transactions under
the Plan to qualify for exemption from the provisions of Section
16(b) of the Exchange Act pursuant to Rule 16b-3 promulgated
thereunder ("Rule 16b-3") and (B) to satisfy all legal
requirements relating to administration of stock option plans and
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.
(b) Administration With Respect to Consultants
and Employees Who Are Not Directors or Officers. 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 (i) the Board or (ii) a Committee designated by
the Board, which Committee shall be constituted in such a manner
as to satisfy 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.
(c) Formula Awards to Non-Compensated Directors.
(i) On the date of a Non-Compensated
Director's election or reelection to the Board at an annual
meeting of shareholders of the Company, he shall be granted a
Non-Qualified Stock Option to purchase 33,600 Shares. Such
Option shall vest and become exercisable as to 11,200 Shares on
each anniversary of such Non-Compensated Director's election to
the Board, provided that on such anniversary he is then serving
as a director of the Company.
(ii) If a Non-Compensated Director is
elected or appointed to the Board other than at an annual meeting
of shareholders, on the date of his election he shall be granted
a Non-Qualified Stock Option to purchase the number of shares
determined by multiplying 933 by the number of whole or partial
months in the term to which he was elected. For purposes of the
preceding sentence, a month shall mean a period of 30 consecutive
days. Such Options shall vest and become exercisable as to
11,200 Shares on each anniversary of such Non-Compensated
Director's election or appointment to the Board, provided that on
such anniversary he is then serving as a director of the Company.
If the term of a director who has received an Option pursuant to
this Section 4.1(c)(ii) expires before the Option has become
fully exercisable, the Option shall become fully exercisable on
the last day of such director's term, provided that he is then
serving as a director of the Company.
(iii) If a Non-Compensated Director to whom
a Non-Qualified Stock Option is to be granted pursuant to Section
4.1(c)(i) is serving on the Board at the time of such election or
reelection by virtue of having been appointed to the Board to
fill a vacancy or newly created directorship, and such director
received a Non-Qualified Stock Option upon such appointment
pursuant to the Company's 1987 Stock Option Plan, as amended, the
number of shares subject to the Non-Qualified Stock Option to be
granted pursuant to Section 4.1(c)(i) shall be reduced by a
number equal to 33,600 minus the product of (i) 933 and (ii) the
number of full months during which such Non-Compensated Director
has served as a director. For purposes of the preceding
sentence, a month shall mean a period of 30 consecutive days.
(iv) Options granted pursuant to this
Section shall have a per share exercise price equal to the Fair
Market Value per share on the Date of Grant and shall expire ten
years from the Date of Grant. Once an Option granted pursuant to
this Section, or any portion thereof, has become exercisable, it
shall remain exercisable regardless of whether or not the Non-
Compensated Director holding the Option later ceases to be a
director of the Company.
(d) Multiple Administrative Bodies. 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.
4.2. 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, acting in its sole discretion, shall have the
power and authority to supervise the administration of the Plan
and to take all action necessary or desirable in order to carry
out the provisions of the Plan including, without limitation, the
power and authority:
(a) to select the Consultants and Employees to
whom Options may from time to time be granted hereunder;
(b) to determine whether and to what extent
Options are granted hereunder;
(c) to determine the number of shares of Common
Stock to be covered by each such Option granted hereunder;
(d) to approve forms of agreement for use under
the Plan;
(e) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Option granted
hereunder (including, but not limited to, the exercise price, the
vesting schedule, and any restrictions or limitations regarding
any Option and/or the Shares relating thereto) based in each case
on such factors as the Administrator shall determine, in its sole
discretion;
(f) to make changes to any outstanding Option,
including, without limitation, to reduce the exercise price, to
accelerate the vesting schedule, or to extend the expiration
date, provided that no such change shall impair the rights of any
Optionee under any grant previously made without such Optionee's
consent;
(g) to determine whether and when an Optionee has
ceased to have an employment or consulting relationship with the
Company;
(h) to buy out for a payment in cash or Shares,
an Option previously granted, based on such terms and conditions
as the Administrator shall establish and the Optionee shall
accept.
4.3. Effect of Committee's Decision. The Administrator
shall have the power and authority to establish, amend, and
revoke rules and regulations for administration of the Plan. All
decisions, determinations and interpretations of the
Administrator shall be final and binding on all holders of
Options.
5. Eligibility. Non-Qualified Stock Options may be
granted to Non-Compensated Directors (but only pursuant to
Section 4.1(c)), Employees, and Consultants. Incentive Stock
Options may be granted only to Employees. An individual who has
been granted an Option may, if otherwise eligible, be granted an
additional Option or Options.
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 shareholders of the Company as described in
Section 18 of the Plan. It shall continue in effect for a term
of ten (10) years unless sooner terminated under Section 13 of
the Plan.
7. Exercise Period of Option.
7.1. Term. Each Option shall vest and become
exercisable as provided in the Option Agreement. The term of each
Option shall be the term stated in the Option Agreement;
provided, however, that in no case shall the term shall be more
than ten (10) years from the Date of Grant. However, in the case
of an Incentive Stock Option granted to an Optionee who, at the
time the Option is granted, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the term of the Option shall
be no more than five (5) years from the Date of Grant.
7.2. Termination of Employment. If an Optionee ceases
to be an Employee of the Company for any reason, except death or
disability within the meaning of Section 422(c) of the Code, an
Incentive Stock Option, to the extent unexercised and exercisable
by the Optionee on the date on which the Optionee ceased to be an
Employee, may be exercised by the Optionee within three (3)
months after the date on which the Optionee's employment
terminated, but in any event no later than the date of expiration
of the Option term. If the Optionee's employment is terminated
because of the death or disability of the Optionee within the
meaning of Section 422(c) of the Code, an Incentive Stock Option,
to the extent unexercised and exercisable by the Optionee on the
date on which the Optionee ceased to be an Employee, may be
exercised by the Optionee (or the Optionee's legal
representative) at any time prior to the expiration of twelve
(12) months from the date the Optionee's employment terminated,
but in any event no later than the date of expiration of the
Option term. An Optionee's employment shall be deemed to have
terminated on account of death if the Optionee dies within three
(3) months after the Optionee's termination of employment.
8. Option Exercise Price and Consideration.
8.1. Exercise Price. 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 Administrator, provided
that 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 (10%) 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 and (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.
8.2. Consideration. The consideration to be paid for
the Shares to be issued upon exercise of an Option (other than
Options granted pursuant to Section 4.1(c)), including the method
of payment, shall be determined by the Administrator and may
consist entirely of (i) cash, (ii) check, (iii) promissory note,
(iv) other Shares which 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, (v) authorization from
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, (vi) delivery of a properly executed exercise notice
together with irrevocable instructions to a broker to deliver
promptly to the Company the amount of sale or loan proceeds
required to pay the exercise price, (vii) any combination of the
foregoing methods of payment, or (viii) such other consideration
and method of payment for the issuance of Shares to the extent
permitted under the Applicable Laws.
9. Exercise of Option.
9.1. Procedure for Exercise. 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
Agreement by the person entitled to exercise the Option and full
consideration for the Shares with respect to which the Option is
exercised has been received by the Company. Until the issuance
(as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of
the stock certificate evidencing such Shares, no right to vote or
receive dividends or any other rights as a shareholder shall
exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be
issued) such stock certificate promptly upon exercise of the
Option. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the stock
certificate is issued. An Option may not be exercised for a
fraction of a Share.
9.2. Limitations on Exercise.
(a) 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 the National Association of Securities Dealers or
any stock exchange upon which the Shares may then be listed, and
shall be further subject to the approval of counsel for the
Company with respect to such compliance. 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.
(b) The Administrator may specify a reasonable
minimum number of shares that may be purchased on any exercise of
an Option, provided that such minimum number will not prevent the
Optionee from exercising that full number of Shares as to which
the Option is then exercisable.
9.3. Withholding Obligations. Prior to issuance of the
Shares upon exercise of an Option, the Optionee shall pay or make
adequate provision for any federal or state withholding
obligations of the Company, if applicable, in a form and manner
satisfactory to the Administrator.
10. Transferability of Options. Except as otherwise
provided in this Section 10, Options may not be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner
other than by will or by the laws of descent and distribution and
during the lifetime of the Optionee shall be exercisable only by
the Optionee. If the Administrator so determines, Non-Qualified
Stock Options may be transferable to (a) the Optionee's spouse,
parents, siblings, children or grandchildren (including
stepparents, stepsiblings, stepchildren, and stepgrandchildren),
(b) trusts for the benefit of the Optionee and/or such family
members, and (c) partnerships whose only partners are the
Optionee and/or such family members, provided that (i) no
consideration is paid for such transfer, (ii) the terms and
conditions of the Option which are applicable to the Optionee
prior to the transfer of the Option shall continue to apply to
the transferee; and (iii) the Option Agreement pertaining to each
transferable option shall set forth the applicable transfer
restrictions.
11. Adjustments. Unless the terms of an Option Agreement
provide otherwise:
11.1. Change in Capitalization. Subject to any
required action by the shareholders 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 "effected without
receipt of consideration." Such adjustment shall be made by the
Administrator, 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.
11.2. Merger without Change of Control. After a
merger of one or more corporations or other entities with or into
the Company or after a consolidation of the Company and one or
more corporations or other entities in which the shareholders of
the Company immediately prior to such merger or consolidation own
after such merger or consolidation shares representing at least
fifty percent (50%) of the voting power of the Company or the
surviving or resulting corporation or other entity, as the case
may be, each holder of an outstanding Option shall, at no
additional cost, be entitled upon exercise of such Option to
receive in lieu of the shares of Common Stock as to which such
Option was exercisable immediately prior to such event, the
number and class of shares of stock or other securities, cash or
property (including, without limitation, shares of stock or other
securities of another corporation or Common Stock) to which such
holder would have been entitled pursuant to the terms of the
agreement of merger or consolidation if, immediately prior to
such merger or consolidation, such holder had been the holder of
record of a number of shares of Common Stock equal to the number
of shares for which such Option shall be so exercised.
11.3. Sale or Merger with Change of Control. If
the Company is merged with or into or consolidated with another
corporation or other entity under circumstances where the
shareholders of the Company immediately prior to such merger or
consolidation do not own after such merger or consolidation
shares representing at least fifty percent of the voting power of
the Company or the surviving or resulting corporation or other
entity, as the case may be, or if one hundred percent of the then
outstanding voting shares of the Company are sold or otherwise
transferred, or if the Company is liquidated, or sells or
otherwise disposes of substantially all of its assets to another
corporation or other entity while unexercised Options remain
outstanding under the Plan, (a) subject to the provisions of
clause (c) below, after the effective date of such merger,
consolidation, liquidation, sale or disposition, as the case may
be, each holder of an outstanding Option shall be entitled, upon
exercise of such Option, to receive, in lieu of the shares of
Common Stock as to which Option was exercisable immediately prior
to such event, the number and class of shares of stock or other
securities, cash or property (including, without limitation,
shares of stock or other securities of another corporation or
common stock) to which such holder would have been entitled
pursuant to the terms of the merger, consolidation, liquidation,
sale or disposition if, immediately prior to such event, such
holder had been the holder of a number of shares of Common Stock
equal to the number of shares as to which such Option shall be so
exercised; (b) the Administrator may accelerate the time for
exercise of some or all unexercised and unexpired options so that
from and after a date prior to the effective date of such merger,
consolidation, liquidation, sale or disposition, as the case may
be, specified by the Administrator such accelerated options shall
be exercisable in full; or (c) all outstanding Options may be
cancelled by the Administrator as of the effective date of any
such merger, consolidation, liquidation, sale or disposition
provided that (i) notice of such cancellation shall be given to
each holder of an Option and (ii) each holder of an Option shall
have the right to exercise such Option to the extent that the
same is then exercisable or, if the Administrator shall have
accelerated the time for exercise of all unexercised and
unexpired Options, in full during the 10-day period preceding the
effective date of such merger, consolidation, liquidation, sale
or disposition.
11.4. Miscellaneous. Adjustments under this
Section 11 shall be determined by the Administrator, and such
determinations shall be conclusive. No fractional shares of
Common Stock shall be issued under the Plan on account of any
adjustment specified above.
12. 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 Administrator. Notice of
the determination shall be given to each Employee or Consultant
to whom an Option is granted within a reasonable time after the
date of such grant.
13. Amendment and Termination of the Plan.
13.1. 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 the Optionee's 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 National Association of Securities Dealers or
an established stock exchange), the Company shall obtain
shareholder approval of any Plan amendment in such a manner and
to such a degree as required.
13.2. 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 the 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.
14. Reservation of Shares. The Company, during the term of
the 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.
15. Agreements. Options shall be evidenced by written
agreements in such form as the Administrator shall approve from
time to time. Each Option shall be designated in the Option
Agreement as either an Incentive Stock Option or a Non-Qualified
Stock Option as the Administrator shall determine. 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 Non-Qualified
Stock Options. For purposes of the preceding sentence, 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.
16. No Additional Rights. The Plan shall not confer upon
any Optionee any right with respect to continuation of an
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.
17. Rule 16b-3. Grants of Options to persons subject to
Section 16(b) of the Exchange Act must qualify for exemption from
Section 16(b) of the Exchange Act pursuant to Rule 16b-3.
Options granted to such persons 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.
18. Shareholder Approval. Continuance of the Plan shall be
subject to approval by the shareholders of the Company within
twelve (12) months after the date the Plan is adopted. Such
shareholder approval shall be obtained in the degree and manner
required under applicable state and federal law.
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