<PAGE> 1
As filed with the Securities and Exchange Commission on July 10, 1997
Registration No. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
----------------------
ISOCOR
(Exact name of Registrant as specified in its charter)
California
(State or Other Jurisdiction of Incorporation or Organization)
95-4310259
(I.R.S. Employer Identification No.)
3420 Ocean Park Boulevard
Santa Monica, California 90405
(Address of principal executive offices) (Zip Code)
---------------------
1992 STOCK OPTION PLAN
(Full title of the Plan)
---------------------
Andrew De Mari
President and Chief Executive Officer
ISOCOR
3420 Ocean Park Boulevard
Santa Monica, California 90405
(Name and Address for Agent For Service)
(310) 581-8100
(Telephone Number, Including Area Code, of Agent For Service)
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<PAGE> 2
<TABLE>
<CAPTION>
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CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Maximum Maximum Amount of
Title of Securities to Amount to be Offering Price Aggregate Offering Registration
be Registered Registered Per Share Price Fee
<S> <C> <C> <C> <C>
Common Stock,
no par value 650,774 shares $2.6720 (2) $ 1,738,868.13 $ 526.93
Common Stock,
no par value 149,226 shares $2.391 (3) $ 356,799.37 $ 108.12
TOTAL 800,000 shares (1) $ 2,095,667.50 $ 635.05
</TABLE>
(1) Represents increases in the number of shares of Common Stock reserved
for issuance upon the exercise of options issued under the Company's
1992 Stock Option Plan (the "Plan") of 500,000 shares (the "Initial
Increase") and 300,000 shares (the "Subsequent Increase"). The Initial
Increase was approved by the Board of Directors of the Company on
August 26, 1996 and by the shareholders of the Company on October 22,
1996. The Subsequent Increase was approved by the Board of Directors of
the Company on March 7, 1997 and by the shareholders of the Company on
May 15, 1997.
(2) Computed in accordance with Rule 457(h) under the Securities Act of
1933, as amended (the "Act") solely for purposes of calculating the
registration fee. The computation is based on the weighted average
exercise price of options outstanding under the Plan for which the
Common Stock issuable upon exercise thereof is being registered hereby.
(3) Estimated in accordance with Rule 457(h) and 457(c) under the Act
solely for purposes of calculating the registration fee. The
computation is based on the closing price of the Company's Common Stock
as reported on the Nasdaq National Market on July 8, 1997.
<PAGE> 3
PART II: INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3 INFORMATION INCORPORATED BY REFERENCE
The following documents and information heretofore filed with the
Securities and Exchange Commission are hereby incorporated by reference:
ITEM 3 (A)
The Registrant's Annual Report on Form 10-K filed on March 31, 1997
pursuant to Rule 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
ITEM 3 (B)
The Registrant's Quarterly Report on Form 10-Q filed on May 15, 1997
pursuant to Rule 13(a) of the Exchange Act.
All documents subsequently filed by the Registrant pursuant to Sections
13(a) or 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such documents.
ITEM 3 (C)
Items 1 and 2 of the Registrant's Registration Statement on Form 8-A
filed on March 5, 1996 pursuant to Section 12 of the Exchange Act.
ITEM 4 DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5 INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the Common Stock registered hereby is being passed
upon by Venture Law Group. a Professional Corporation. Certain members of
Venture Law Group, including Elias J. Blawie, Secretary of the Company,
beneficially own, in the aggregate, 8,310 shares of the Company's Common Stock.
ITEM 6 INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company has adopted provisions in its Articles of Incorporation
that limit the liability of its directors for monetary damages arising from a
breach of their fiduciary duty as directors to the
<PAGE> 4
fullest extent permitted by the California Corporations Code. Such limitation of
liability does not affect the availability of equitable remedies such as
injunctive relief or recission.
The Company's Bylaws provide that the Company shall indemnify its
directors and officers to the fullest extent permitted by California law,
including circumstances in which indemnification is otherwise discretionary
under California law. The Company has entered into indemnification agreements
with its directors and officers containing provisions which are, in some
respects, broader than the specific indemnification provisions contained in the
California Corporations Code. The indemnification agreements may require the
Company, among other things, to indemnify its directors and officers against
certain liabilities that may arise by reason of their status or service as
directors or officers (other than liabilities arising from willful misconduct of
a culpable nature), to advance their expenses as incurred as a result of any
proceeding against them as to which they could be indemnified and to obtain
directors' and officers' insurance, if available on reasonable terms. The
Company has obtained such directors' and officers' insurance.
At present, there is no pending litigation or proceeding involving any
director, officer, employee or agent of the Company where indemnification would
be required or permitted. The Company is not aware of any threatened litigation
or proceeding which might result in a claim for such indemnification.
ITEM 7 EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8 EXHIBITS
Exhibit
Number Document
4.1 1992 Stock Option Plan and forms of option
agreements for use with plan.
5.1 Opinion of Counsel as to legality of securities
being registered.
23.1 Consent of Counsel (contained in Exhibit 5.1
hereto).
23.2 Consent of Independent Accountants (see page 8).
24.1 Power of Attorney (see page 7).
ITEM 9 UNDERTAKINGS
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 to include any
material information with respect
<PAGE> 5
to the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement.
(2) That, for the purpose of determining any liability under
the Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and where
applicable each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in the
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 Act may
be permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the 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 Act and will be governed by the final adjudication of
such issue.
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, ISOCOR, a corporation organized and existing under the laws of the
State of California, 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 Santa Monica, State of California, on July 10,
1997.
ISOCOR
By: /s/ Andrew De Mari
-----------------------------------
Andrew De Mari, President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Andrew De Mari and Janine M. Bushman,
jointly and severally, his or her attorneys-in-fact, each with the power of
substitution, for him or her in any and all capacities, to sign any amendments
to this Registration Statement on Form S-8, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact, or his or her substitute or substitutes, may 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>
President, Chief Executive Officer
/s/ Andrew De Mari and Director (Principal Executive July 10, 1997
- ------------------------------------ Officer)
(Andrew De Mari)
Vice President, Finance and
Administration, Chief Financial
/s/ Janine M. Bushman Officer and Director (Principal July 10, 1997
- ------------------------------------ Financial and Accounting Officer)
(Janine M. Bushman)
/s/ Jean-Michel Barbier Director July 10, 1997
- ------------------------------------
(Jean Michel Barbier)
/s/ Alexandra Giurgiu Director July 10, 1997
- ------------------------------------
(Alexandra Giurgiu)
/s/ G. Bradford Jones Director July 10, 1997
- ------------------------------------
(G. Bradford Jones)
</TABLE>
<PAGE> 7
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number
- ------
<S> <C>
4.1 1992 Stock Option Plan and forms of option agreements for use with plan.
5.1 Opinion of Counsel as to legality of securities being registered
23.1 Consent of Counsel (contained in Exhibit 5.1 hereto).
23.2 Consent of Independent Auditors.
24.1 Power of Attorney (see page 6).
</TABLE>
<PAGE> 1
EXHIBIT 4.1
ISOCOR
1992 STOCK OPTION PLAN
AS AMENDED MAY, 1996
1. Purposes of the 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 (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 Section 422 of the Code, as amended, 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 paragraph (a) of Section 4 of the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as
amended.
(d) "Committee" means the Committee appointed by the Board of
Directors in accordance with paragraph (a) of Section 4 of the Plan.
(e) "Common Stock" means the Common Stock of the Company.
(f) "Company" means ISOCOR, a California corporation.
(g) "Consultant" means any person, including an advisor, who
is engaged by the Company or any Parent or Subsidiary to render consulting
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
<PAGE> 2
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.
(h) "Continuous Status as an Employee" means the absence of
any interruption or termination of the employment relationship by the Company or
any Subsidiary. Continuous Status as an Employee 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 ninety (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
Subsidiaries or its successor.
(i) "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.
(j) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(k) "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 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 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.
(l) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.
(m) "Named Executive" means (any individual who, on the last
day of the Company's fiscal year, is the chief executive officer of the Company
(or is acting in such capacity) or among the four highest compensated officers
of the Company (other than the chief
<PAGE> 3
executive officer). Such officer status shall be determined pursuant to the
executive compensation disclosure rules under the Exchange Act.
(n) "Nonstatutory Stock Option" means an Option not intended
to qualify as an Incentive Stock Option.
(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 13 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 13
of the Plan, the maximum aggregate number of shares that may be optioned and
sold under the Plan is 2,600,000 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 that 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) Composition of Administrator.
(i) Multiple Administrative Bodies. If permitted by Rule
16b-3, and by the legal requirements relating to the administration of incentive
stock option plans, if any, of applicable securities laws and the Code
(collectively, the "Applicable Laws"), the Plan may (but need not) be
administered by different administrative bodies with respect to directors,
officers who are not directors and Employees who are neither directors nor
officers.
(ii) Administration with respect to Directors and
Officers. With respect to grants of Options to Employees or Consultants 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
<PAGE> 4
in compliance with Rule 16b-3 as it applies to a plan intended to qualify
thereunder as a discretionary plan and Section 162(m) of the Code as it applies
so as to qualify grants of Options to Named Executives as performance-based
compensation, 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 as it applies to a plan intended to qualify thereunder as
a discretionary plan, to qualify grants of Options to Named Executives as
performance-based compensation under Section 162(m) of the Code and otherwise so
as to satisfy the Applicable Laws.
(iii) Administration with respect to Other Persons.
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 Applicable Laws.
(iv) General. If a Committee has been appointed
pursuant to subsection (ii) or (iii) of this Section 4(a), 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 any 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 a Committee and thereafter directly administer the
Plan, all to the extent permitted by the Applicable Laws and, in the case of a
Committee appointed under subsection (ii), to the extent permitted by Rule 16b-3
as it applies to a plan intended to qualify thereunder as a discretionary plan,
and to the extent required under Section 162(m) of the Code to qualify grants of
Options to Named Executives as performance-based compensation.
(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;
<PAGE> 5
(vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted
hereunder (including, but not limited to, the share price and
any restriction or limitation);
(vii) to determine whether and under what
circumstances an Option may be settled in cash under Section
10(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.
(c) Effect of Administrator's Decision. All decisions,
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 an Optionee's right or the
Company's right to terminate his or her 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
shareholders of the Company as described in Section 19 of the Plan. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 15 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
(10) years from the date
<PAGE> 6
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 (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 five (5) years from the date of
grant thereof or such shorter term as may be provided in the Option Agreement.
8. Limitation on Grants to Employees. Subject to adjustment as provided
in Section 13 of this Plan, the maximum number of shares which may be subject to
Options granted to any one employee under this Plan for any fiscal year of the
Company shall be 750,000.
9. Option Exercise Price and Consideration.
(a) 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 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 (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.
(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 (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 the grant.
(B) granted to a person, who, at the time of grant
of such Option is a Named Executive of the Company, the per share exercise price
shall be no less than 100% of the Fair Market Value on the date of grant.
(C) granted to any person other than those persons
described in subsections (ii) (A) and (B) above, the per Share exercise price
shall be no less than 85% of the Fair Market Value per Share on the date of
grant.
(b) Permissible Consideration. 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
<PAGE> 7
that (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 such Option shall be exercised, (5)
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, (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) delivery of a subscription agreement for the Shares that
irrevocably obligates the option holder to take and pay for the Shares not more
than twelve 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.
10. 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 the Company has
received full payment for the Shares with respect to which the Option is
exercised. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 9(b) of the Plan.
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, except as provided in
Section 13 of the Plan.
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 consulting relationship or Continuous Status as an Employee with
the Company, such Optionee
<PAGE> 8
may, but only within three (3) 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 (3) 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 his or her 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 10(b) above, in the event of termination of an Optionee's consulting
relationship or Continuous Status as an Employee as a result of his or her total
and permanent disability (within the meaning of Section 22(e)(3) of the Code),
Optionee may, but only within twelve (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 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 twelve (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 the 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.
(f) Buyout Provisions. The Administrator may at any time offer
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
communicate to the Optionee at the time that such offer is made.
11. 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.
12. Stock Withholding to Satisfy Withholding Tax Obligation. At the
discretion of the Administrator. Optionees may satisfy withholding obligations
as provided in this paragraph.
<PAGE> 9
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 obligation 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. 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").
All elections by an Optionee to have Shares withheld for this purpose
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;
(d) if the Optionee is subject to Section 16 of the Exchange
Act, 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 or Stock Purchase
Right is exercised but, such Optionee shall be unconditionally obligated to
tender back to the Company the proper number of Shares on the Tax Date.
13. Adjustments Upon Changes in Capitalization; Corporate Transactions.
(a) Changes 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 that have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or that have been returned to the Plan upon cancellation or
expiration of an Option, the maximum number of shares of Common Stock for which
Options may be granted to any employee under Section 8 of the Plan and 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,
<PAGE> 10
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 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.
(b) Corporate Transactions. In the event of the proposed
dissolution or liquidation of the Company, the Board shall notify the Optionee
at least fifteen (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. In the event of a proposed sale of all
or substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, the Option may be assumed or an equivalent
option may be substituted by such successor corporation or a parent or
subsidiary of such successor corporation. If the successor corporation does not
agree to assume the Option or substitute an equivalent option, the Board shall
notify the Optionee at least fifteen (15) days prior to the consummation of the
transaction. To the extent it has not been previously exercised, the Option will
terminate immediately prior to the consummation of such transaction.
14. 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.
15. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may amend or
terminate the Plan from time to time in such respects as the Board may deem
advisable; provided that, the following revisions or amendments shall require
approval of the shareholders of the Company in the manner described in Section
19 of the Plan:
(i) any increase in the number of Shares subject to
the Plan, other than an adjustment under Section 13 of the
Plan;
(ii) any change in the designation of the class of
persons eligible to be granted Options;
(iii) any change in the limitation on grants to
employees as described in Section 8 of the Plan or other
changes which would require shareholder approval to qualify
options granted hereunder as performance-based compensation
under Section 162(m) of the Code; or
<PAGE> 11
(iv) any revision or amendment requiring shareholder
approval in order to preserve the qualification of the Plan
under Rule 16b-3.
(b) Shareholder Approval. If any amendment requiring
shareholder approval under Section 16(a) of the Plan is made subsequent to the
first registration of any class of equity securities by the Company under
Section 12 of the Exchange Act, such shareholder approval shall be solicited as
described in Section 19 of the Plan.
(c) 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.
16. 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 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.
17. 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.
18. Agreements. Options shall be evidenced by written agreements in
such form as the Board shall approve from time to time.
19. Shareholder Approval.
(a) Continuance of the Plan shall be subject to approval by
the shareholders of the Company within twelve (12) months before or after the
date the Plan is adopted. Such
<PAGE> 12
shareholder approval shall be obtained in the degree and manner required under
applicable state and federal law and the rules of any stock exchange upon which
the Shares are listed.
(b) In the event that the Company registers any class of
equity securities pursuant to Section 12 of the Exchange Act, any required
approval of the shareholders of the Company obtained after such registration
shall be solicited substantially in accordance with Section 14(a) of the
Exchange Act and the rules and regulations promulgated thereunder.
(c) If any required approval by the shareholders of the Plan
itself or of any amendment thereto is solicited at any time otherwise than in
the manner described in Section 19(b) hereof, then the Company shall, at or
prior to the first annual meeting of shareholders held subsequent to the later
of (1) the first registration of any class of equity securities of the Com pany
under Section 12 of the Exchange Act or (2) the granting of an Option hereunder
to an officer or director after such registration, do the following:
(i) furnish in writing to the holders entitled to vote
for the Plan substan tially the same information that would be required (if
proxies to be voted with respect to approval or disapproval of the Plan or
amendment were then being solicited) by the rules and regulations in effect
under Section 14(a) of the Exchange Act at the time such information is
furnished; and
(ii) file with, or mail for filing to, the Securities and
Exchange Commis sion four copies of the written information referred to in
subsection (i) hereof not later than the date on which such information is first
sent or given to shareholders.
20. 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 that are
provided to all shareholders of the Company.
<PAGE> 13
ISOCOR
INCENTIVE STOCK OPTION AGREEMENT
ISOCOR, a California corporation (the "Company"), has granted to
Optionholder (the "Optionee"), an option (the "Option") to purchase a total of
No. Of Shares shares of Common Stock (the "Shares"), at the price determined as
provided herein, and in all respects subject to the terms, definitions and
provisions of the 1992 Stock Option Plan (the "Plan") adopted by the Company,
which is incorporated herein by reference. In the event of a conflict between
the terms of the Plan and the terms of this Agreement, the terms of the Plan
shall govern. Unless otherwise defined herein, the terms defined in the Plan
shall have the same defined meanings herein.
1. Nature of the Option. This Option is intended to qualify as an
Incentive Stock Option as defined in Section 422 of the Code.
2. Exercise Price. The exercise price is Exercise Price for each share
of Common Stock, which price is not less than the fair market value per share of
the Common Stock on the date of grant.
3. Exercise of Option. This Option shall be exercisable during its term
in accordance with the provisions of Section 9 of the Plan as follows:
(i) Right to Exercise.
(a) Subject to subsections 3(i)(b), (c), (d) and (e)
below, this Option shall be exercisable cumulatively, to the extent of 1/4 of
the original number of Shares subject to the Option on the date 12 months after
the vesting commencement date, which date is Vesting Start Date and 1/48 of the
original number of Shares subject to the Option each month thereafter.
(b) This Option may not be exercised for a fraction of a
share.
(c) In the event of Optionee's death, disability or other
termination of employment, the exercisability of the Option is governed by
Sections 7, 8 and 9 below, subject to the limitations contained in subsections
3(i)(d) and (e).
(d) In no event may this Option be exercised after the
date of expiration of the term of this Option as set forth in Section 11 below.
(e) In the event that this Option becomes exercisable at
a time or times which, when this Option is aggregated with all other incentive
stock options granted to Optionee by the Company or any Parent or Subsidiary,
would result in Shares having an aggregate fair market value (determined for
each Share as of the date of grant of the option covering such Share) in excess
of $100,000 becoming first available for purchase upon exercise of one or more
<PAGE> 14
incentive stock options during any calendar year, the amount in excess of
$100,000 shall be treated as a Nonstatutory Stock Option, pursuant to Section 5
of the Plan.
(ii) Method of Exercise. This Option shall be exercisable by
written notice, in the form of Notice of Exercise of Incentive Stock Option
attached hereto as Exhibit A, which shall state the election to exercise the
Option, the number of Shares in respect of which the Option is being exercised,
and such other representations and agreements as to the holder's investment
intent with respect to such shares of Common Stock as may be required by the
Company pursuant to the provisions of the Plan. Such written notice shall be
signed by the Optionee and shall be delivered in person or by certified mail to
the Secretary of the Company. The written notice shall be accompanied by payment
of the exercise price. This Option shall be deemed to be exercised upon receipt
by the Company of such written notice accompanied by the exercise price.
No Shares will be issued pursuant to the exercise of an Option unless
such issuance and such exercise shall comply with all relevant provisions of law
and the requirements of any stock exchange upon which the Shares may then be
listed. Assuming such compliance, for income tax purposes the Shares shall be
considered transferred to the Optionee on the date on which the Option is
exercised with respect to such Shares.
4. Optionee's Representations. In the event the Shares purchasable
pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended, at the time this Option is exercised,
Optionee shall, concurrently with the exercise of all or any portion of this
Option, deliver to the Company his or her Investment Representation Statement in
form satisfactory to counsel for the Company to satisfy applicable securities
laws and shall read the applicable rules of the Commissioner of Corporations
attached to such Investment Representation Statement.
5. Method of Payment. Payment of the exercise price shall be by any of
the following, or a combination thereof, at the election of the Optionee:
( i ) cash;
( ii ) check;
( iii ) surrender of other shares of Common Stock of the
Company that (A) either have been owned by the Optionee for more than six (6)
months on the date of surrender or were not acquired, directly or indirectly,
from the Company and (B) have a fair market value on the date of surrender equal
to the exercise price of the Shares as to which the Option is being exercised;
or
( iv ) delivery of a properly executed exercise notice
together with irrevocable instructions to a broker to promptly deliver to the
Company the amount of sale or loan proceeds required to pay the exercise price.
<PAGE> 15
6. Restrictions on Exercise. This Option may not be exercised until
such time as the Plan has been approved by the shareholders of the Company, or
if the issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as
promulgated by the Federal Reserve Board. As a condition to the exercise of this
Option, the Company may require Optionee to make any representation and warranty
to the Company as may be required by any applicable law or regulation.
7. Termination of Status as an Employee. In the event of termination of
Optionee's Continuous Status as an Employee, he or she may, but only within
forty-five (45) days after the date of such termination (but in no event later
than the date of expiration of the term of this Option as set forth in Section
11 below), exercise this Option to the extent that he or she was entitled to
exercise it at the date of such termination. To the extent that he or she was
not entitled to exercise this Option at the date of such termination, or if he
or she does not exercise this Option within the time specified herein, the
Option shall terminate.
8. Disability of Optionee.
(i) Notwithstanding the provisions of Section 7 above, in the
event of termination of Optionee's Continuous Status as an Employee as a result
of his or her total and permanent disability (as defined in Section 22(e)(3) of
the Code), he or she may, but only within twelve (12) months from the date of
termination of employment (but in no event later than the date of expiration of
the term of this Option as set forth in Section 11 below), exercise his or her
Option to the extent he or she was entitled to exercise it at the date of such
termination. To the extent that the Optionee was not entitled to exercise the
Option at the date of termination, or if he or she does not exercise such Option
(which he or she was entitled to exercise) within the time specified herein, the
Option shall terminate.
(ii) Notwithstanding the provisions of Section 7 above, in the
event of termination of Optionee's Continuous Status as an Employee as a result
of any disability not constituting a total and permanent disability (as defined
in Section 22(e)(3) of the Code), Optionee may, but only within twelve (12)
months from the date of termination of employment (but in no event later than
the date of expiration of the term of this Option as set forth in Section 11
below), exercise this Option to the extent he was entitled to exercise it at the
date of such termination; provided, however, that if Optionee fails to exercise
this Option within three (3) months from the date of termination of employment,
this Option will cease to qualify as an Incentive Stock Option (as defined in
Section 422 of the Code) and Optionee will be treated for federal income tax
purposes as having received ordinary income at the time of such exercise in an
amount generally measured by the difference between the exercise price for the
Shares and the fair market value of the Shares on the date of exercise. 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 (which he was entitled
to exercise) within the time specified herein, the Option shall terminate.
<PAGE> 16
9. Death of Optionee. In the event of the death of Optionee, the Option
may be exercised at any time within six (6) months following the date of death
(but in no event later than the date of expiration of the term of this Option as
set forth in Section 11 below), by 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 could exercise the Option at the date of death.
10. Non-Transferability of Option. This Option may not be transferred
in any manner otherwise than by will or by the laws of descent or distribution.
The designation of a beneficiary shall not constitute a transfer. An Option may
be exercised only by the Optionee or a transferee permitted by this section. The
terms of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
11. Term of Option. This Option may not be exercised more than ten (10)
years (five years if Optionee owns, immediately before this Option is granted,
stock representing more than 10 percent of the total combined voting power of
all classes of stock of the Company or of any Parent or Subsidiary) from the
date of grant of this Option, and may be exercised during such term only in
accordance with the Plan and the terms of this Option. In addition, this Option
may terminate prior to such term as provided in Section 12 of the Plan.
12. Early Disposition of Stock. Optionee understands that if he or she
disposes of any Shares received under this Option within two (2) years after the
date of this Agreement or within one (1) year after such Shares were transferred
to him or her, he or she will be treated for federal income tax purposes as
having received ordinary income at the time of such disposition to the extent of
the excess, if any, of the fair market value of the Shares on the date of
exercise over the price paid for the Shares.
13. Standoff Agreement. Optionee agrees, in connection with the
Company's initial underwritten public offering of the Company's securities, (i)
not to sell, make short sale of, loan, grant any options for the purchase of, or
otherwise dispose of any shares of Common Stock of the Company held by Optionee
(other than those shares included in the registration) without the prior written
consent of the Company or the underwriters managing such initial underwritten
public offering for a period of 180 days after the effective date of such
registration, and (ii) to execute any agreement reflecting the foregoing as may
be requested by the underwriters at the time of the public offering, provided
that the officers and directors Company also agree to of the Company who own
the stock of the such restrictions.
DATE OF GRANT: Grant Date
ISOCOR
a California corporation
By:______________________________
Title:___________________________
<PAGE> 17
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF THIS OPTION
PURSUANT TO SECTION 3 HEREOF IS EARNED ONLY BY CONTINUING EMPLOYMENT AT
THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING
GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER
ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE
COMPANY'S STOCK OPTION PLAN WHICH IS INCORPORATED HEREIN BY REFERENCE,
SHALL CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF
EMPLOYMENT BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH HIS
OR HER RIGHT OR THE COMPANY'S RIGHT TO TERMINATE HIS OR HER EMPLOYMENT
AT ANY TIME, WITH OR WITHOUT CAUSE.
Optionee acknowledges receipt of a copy of the Plan and certain
information related thereto and represents that he or she is familiar with the
terms and provisions thereof, and hereby accepts this Option subject to all of
the terms and provisions thereof. Optionee has reviewed the Plan and this Option
in their entirety, has had an opportunity to obtain the advice of counsel prior
to executing this Option and fully understands all provisions of the Option.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Board upon any questions arising under the Plan.
Optionee further agrees to notify the Company upon any change in the residence
address indicated below.
Dated: ____________________ _____________________________
Optionee
Residence Address:
_____________________________
_____________________________
<PAGE> 18
EXHIBIT A
NOTICE OF EXERCISE OF
INCENTIVE STOCK OPTION
ISOCOR
3420 Ocean Park Boulevard Date of
Santa Monica, CA 90405 Exercise:
________________________
Attn: President
Re: Incentive Stock Option Grant Dated ________________________
Gentlemen:
This constitutes notice under my Incentive Stock Option Agreement that I elect
to purchase the number of shares of ISOCOR Common Stock set forth below for the
price set forth below:
Stock option dated: ________________________
Number of shares as to
which option is exercised: ________________________
Total exercise price: ________________________
Cash payment delivered herewith: ________________________
Unless such documents are enclosed herewith, I hereby agree to execute
such additional documents evidencing such other representations and agreements
as to my investment intent with respect to these shares of Common Stock as may
be required by the Company pursuant to the provisions of the 1992 Stock Option
Plan. Please advise what additional documents may be required.
Very truly yours,
________________________
________________________
(Print Name)
<PAGE> 19
EXHIBIT B
INVESTMENT REPRESENTATION STATEMENT
PURCHASER :
SELLER :
COMPANY : ISOCOR
SECURITY : COMMON STOCK
AMOUNT :
DATE :
In connection with the purchase of the above-listed Securities, I, the
Purchaser, represent to the Seller and to the Company the following:
(a) I am aware of the Company's business affairs and financial
condition, and have acquired sufficient information about the Company to reach
an informed and knowledgeable decision to acquire the Securities. I am
purchasing these Securities for my own account for investment purposes only and
not with a view to, or for the resale in connection with, any "distribution"
thereof for purposes of the Securities Act of 1933, as amended (the "Securities
Act").
(b) I understand that the Securities have not been registered
under the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of my
investment intent as expressed herein. In this connection, I understand that, in
the view of the Securities and Exchange Commission (the "SEC"), the statutory
basis for such exemption may be unavailable if my representation was predicated
solely upon a present intention to hold these Securities for the minimum capital
gains period specified under tax statutes, for a deferred sale, for or until an
increase or decrease in the market price of the Securities, or for a period of
one year or any other fixed period in the future.
(c) I further understand that the Securities must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption from registration is otherwise available. Moreover, I understand
that the Company is under no obligation to register the Securities. In addition,
I understand that the certificate evidencing the Securities will be imprinted
with a legend which prohibits the transfer of the Securities unless they are
registered or such registration is not required in the opinion of counsel for
the Company.
(d) I am familiar with the provisions of Rule 701 and Rule
144, each promulgated under the Securities Act, which, in substance, permit
limited public resale of "restricted securities" acquired, directly or
indirectly, from the issuer thereof, in a non-public
<PAGE> 20
offering subject to the satisfaction of certain conditions. Rule 701 provides
that if the issuer qualifies under Rule 701 at the time of issuance of the
Securities, such issuance will be exempt from registration under the Securities
Act. In the event the Company later becomes subject to the reporting
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
ninety (90) days thereafter the securities exempt under Rule 701 may be resold,
subject to the satisfaction of certain of the conditions specified by Rule 144,
including among other things: (1) the sale being made through a broker in an
unsolicited "broker's transaction" or in transactions directly with a market
maker (as said term is defined under the Securities Exchange Act of 1934); and,
in the case of an affiliate, (2) the availability of certain public information
about the Company, and the amount of securities being sold during any three
month period not exceeding the limitations specified in Rule 144(e), if
applicable. Notwithstanding this paragraph (d), I acknowledge and agree to the
restrictions set forth in paragraph (e) hereof.
In the event that the Company does not qualify under Rule 701
at the time of issuance of the Securities, then the Securities may be resold in
certain limited circumstances subject to the provisions of Rule 144, which
requires among other things: (1) the availability of certain public information
about the Company, (2) the resale occurring not less than two years after the
party has purchased, and made full payment for, within the meaning of Rule 144,
the securities to be sold; and, in the case of an affiliate, or of a
non-affiliate who has held the securities less than three years, (3) the sale
being made through a broker in an unsolicited "broker's transaction" or in
transactions directly with a market maker (as said term is defined under the
Securities Exchange Act of 1934) and the amount of securities being sold during
any three month period not exceeding the specified limitations stated therein,
if applicable.
(e) I further understand that in the event all of the
applicable requirements of Rule 144 or Rule 701 are not satisfied, registration
under the Securities Act, compliance with Regulation A, or some other
registration exemption will be required; and that, notwithstanding the fact that
Rule 144 and Rule 701 are not exclusive, the Staff of the SEC has expressed its
opinion that persons proposing to sell private placement securities other than
in a registered offering and otherwise than pursuant to Rule 144 or Rule 701
will have a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons and
their respective brokers who participate in such transactions do so at their own
risk.
(f) I understand that the certificate evidencing the
Securities may be imprinted with a legend which prohibits the transfer of the
Securities without the consent of the Commissioner of Corporations of
California. I have read the applicable Commissioner's Rules with respect to such
restriction, a copy of which is attached.
Signature of Purchaser:
_______________________
Date:____________________, 19___
<PAGE> 21
ISOCOR
NONSTATUTORY STOCK OPTION AGREEMENT
ISOCOR, a California corporation (the "Company"), has granted to
Optionholder (the "Optionee"), an option (the "Option") to purchase a total of
No. Of Shares shares of Common Stock (the "Shares"), at the price determined as
provided herein, and in all respects subject to the terms, definitions and
provisions of the 1992 Stock Option Plan (the "Plan") adopted by the Company,
which is incorporated herein by reference. In the event of a conflict between
the terms of the Plan and the terms of this Agreement, the terms of the Plan
shall govern. Unless otherwise defined herein, the terms defined in the Plan
shall have the same defined meanings herein.
l. Nature of the Option. This Option is intended by the Company and the
Optionee to be a Nonstatutory Stock Option, and does not qualify for any special
tax benefits to the Optionee. This Option is not an Incentive Stock Option and
is not subject to Section 5(b) of the Plan.
2. Exercise Price. of Common Stock.
The exercise price is Exercise Price for each share
3. Exercise of Option. This Option shall be exercisable during its term
in accordance with the provisions of Section 9 of the Plan as follows:
(i) Right to Exercise.
(a) Subject to subsections 3(i)(b), (c) and (d) below,
this Option shall be exercisable cumulatively, to the extent of 1/4 of the
original number of Shares subject to the Option on the date 12 months after the
vesting commencement date, which date is Vesting Start Date and 1/48 of the
original number of Shares subject to the Option at the end of each month
thereafter.
(b) This Option may not be exercised for a fraction of a
share.
(c) In the event of Optionee's death, disability or other
termination of employment or consulting relationship, the exercisability of the
Option is governed by Sections 7, 8 and 9 below.
(d) In no event may this Option be exercised after the
date of expiration of the term of this Option as set forth in Section 11 below.
(ii) Method of Exercise. This Option shall be exercisable by
written notice, in the form of Notice of Exercise of Nonstatutory Stock Option
attached hereto as Exhibit A, which shall state the election to exercise the
Option, the number of Shares in respect of which the
<PAGE> 22
Option is being exercised, and such other representations and agreements as to
the holder's investment intent with respect to such shares of Common Stock as
may be required by the Company pursuant to the provisions of the Plan. Such
written notice shall be signed by the Optionee and shall be delivered in person
or by certified mail to the Secretary of the Company. The written notice shall
be accompanied by payment of the exercise price. This Option shall be deemed
exercised upon receipt by the Company of such written notice accompanied by the
exercise price.
No Shares will be issued pursuant to the exercise of an Option
unless such issuance and such exercise shall comply with all relevant provisions
of law and the requirements of any stock exchange upon which the Shares may then
be listed. Assuming such compliance, for income tax purposes the Shares shall be
considered transferred to the Optionee on the date on which the Option is
exercised with respect to such Shares.
4. Optionee's Representations. In the event the Shares purchasable
pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended, at the time this Option is exercised,
Optionee shall, concurrently with the exercise of all or any portion of this
Option, deliver to the Company his or her Investment Representation Statement in
form satisfactory to counsel for the Company to satisfy applicable securities
laws and shall read the applicable rules of the Commissioner of Corporations
attached to such Investment Representation Statement.
5. Method of Payment. Payment of the exercise price shall be by any of
the following, or a combination thereof, at the election of the Board:
(i) cash;
(ii) check;
(iii) surrender of other shares of Common Stock of the Company
that (A) either have been owned by the Optionee for more than six (6) months on
the date of surrender or were not acquired, directly or indirectly, from the
Company and (B) have a fair market value on the date of surrender equal to the
exercise price of the Shares as to which the Option is being exercised; or
(iv) delivery of a properly executed exercise notice together
with irrevocable instructions to a broker to promptly deliver to the Company the
amount of sale or loan proceeds required to pay the exercise price.
6. Restrictions on Exercise. This Option may not be exercised until
such time as the Plan has been approved by the shareholders of the Company, or
if the issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as
promulgated by the Federal Reserve Board. As a condition to the exercise of this
Option, the
<PAGE> 23
Company may require Optionee to make any representation and warranty to the
Company as may be required by any applicable law or regulation.
7. Termination of Status as an Employee or Consultant. In the event of
termination of Optionee's consulting relationship or Continuous Status as an
Employee, he or she may, but only within forty-five (45) days (or such other
period of time not exceeding six (6) months, as the Board may determine by
specific resolution) after the date of such termination (but in no event later
than the date of expiration of the term of this Option as set forth in Section
11 below), exercise this Option to the extent that he or she was entitled to
exercise it at the date of such termination. To the extent that he or she was
not entitled to exercise this option at the date of such termination, or if he
or she does not exercise this Option within the time specified herein, the
Option shall terminate.
8. Disability of Optionee.
(i) Notwithstanding the provisions of Section 7 above, in the
event of termination of Optionee's Continuous Status as an Employee or
Consultant as a result of his or her total and permanent disability (as defined
in Section 22(e)(3) of the Code), he or she may, but only within twelve (12)
months from the date of such termination (but in no event later than the date of
expiration of the term of this Option as set forth in Section 11 below),
exercise his or her Option to the extent he or she was entitled to exercise it
at the date of such termination. To the extent that he or she was not entitled
to exercise the Option at the date of termination, or if he or she does not
exercise such Option (which he or she was entitled to exercise) within the time
specified herein, the Option shall terminate.
(ii) Notwithstanding the provisions of Section 7 above, in the
event of termination of Optionee's Continuous Status as an Employee as a result
of any disability not constituting a total and permanent disability (as defined
in Section 22(e)(3) of the Code), Optionee may, but only within twelve (12)
months from the date of termination of employment (but in no event later than
the date of expiration of the term of this Option as set forth in Section 11
below), exercise this Option to the extent he was entitled to exercise it at the
date of such termination; provided, however, that if Optionee fails to exercise
this Option within three (3) months from the date of termination of employment,
this Option will cease to qualify as an Incentive Stock Option (as defined in
Section 422 of the Code) and Optionee will be treated for federal income tax
purposes as having received ordinary income at the time of such exercise in an
amount generally measured by the difference between the exercise price for the
Shares and the fair market value of the Shares on the date of exercise. 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 (which he was entitled
to exercise) within the time specified herein, the Option shall terminate.
9. Death of Optionee. In the event of the death of Optionee, the Option
may be exercised at any time within six (6) months following the date of death
(but in no event later than the date of expiration of the term of this Option as
set forth in Section 11 below), by Optionee's
<PAGE> 24
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance, but only to the extent the Optionee could exercise the Option at
the date of death.
10. Non-Transferability of Option. This Option may not be transferred
in any manner otherwise than by will or by the laws of descent or distribution.
The designation of a beneficiary shall not constitute a transfer. An Option may
be exercised only by the Optionee or a transferee permitted by this section. The
terms of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
11. Term of Option. This Option may not be exercised more than ten (10)
years (five (5) years if Optionee owns, immediately before the Option is
granted, stock representing more than 10 percent of the total combined voting
power of all classes of stock of the Company or of any Parent or Subsidiary)
from the date of grant of this Option, and may be exercised during such term
only in accordance with the Plan and the terms of this Option. In addition, this
Option may terminate prior to such term as provided in Section 12 of the Plan.
12. Taxation Upon Exercise of Option. Optionee understands that, upon
exercise of this Option, he or she will recognize income for tax purposes in an
amount equal to the excess of the then fair market value of the shares over the
exercise price. The Company will be required to withhold tax from Optionee's
current compensation with respect to such income; to the extent that Optionee's
current compensation is insufficient to satisfy the withholding tax liability,
the Company may require the Optionee to make a cash payment to cover such
liability as a condition of exercise of this Option. Upon a resale of such
shares by the Optionee, any difference between the sale price and the fair
market value of the shares on the date of exercise of the Option will be treated
as capital gain or loss
13. Standoff Agreement. Optionee agrees, in connection with the
Company's initial underwritten public offering of the Company's securities, (i)
not to sell, make short sale of, loan, grant any options for the purchase of, or
otherwise dispose of any shares of Common Stock of the Company held by Optionee
(other than those shares included in the registration) without the prior written
consent of the Company or the underwriters managing such initial underwritten
public offering for a period of 180 days after the effective date of such
registration, and (ii) to execute any agreement reflecting the foregoing as may
be requested by the underwriters at the time of the public offering, provided
that the officers and directors of the Company who own the stock of the Company
also agree to such restrictions.
DATE OF GRANT: Grant Date
ISOCOR a California corporation
By:_______________________________
Title:____________________________
<PAGE> 25
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF THIS OPTION
PURSUANT TO SECTION 3 HEREOF IS EARNED ONLY BY CONTINUING SERVICE AS AN EMPLOYEE
OR CONSULTANT AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED,
BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER
ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE COMPANY'S
STOCK OPTION PLAN WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON
OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY
WITH THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH HIS OR HER RIGHT OR THE
COMPANY'S RIGHT TO TERMINATE HIS OR HER EMPLOYMENT OR CONSULTANCY AT ANY TIME,
WITH OR WITHOUT CAUSE.
Optionee acknowledges receipt of a copy of the Plan and certain
information related thereto and represents that he or she is familiar with the
terms and provisions thereof, and hereby accepts this Option subject to all of
the terms and provisions thereof. Optionee has reviewed the Plan and this Option
in their entirety, has had an opportunity to obtain the advice of counsel prior
to executing this Option and fully understands all provisions of the Option.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Board upon any questions arising under the Plan.
Optionee further agrees to notify the Company upon any change in the residence
address indicated below.
Dated: _____________________
_____________________
Optionee
Residence Address:
_____________________
_____________________
<PAGE> 26
EXHIBIT A
NOTICE OF EXERCISE OF
NONSTATUTORY STOCK OPTION
ISOCOR
3420 Ocean Park Boulevard Date of
Santa Monica, CA 90405 Exercise:
_____________________
Attn: President
Re: Nonstatutory Stock Option Grant Dated:________________________
Gentlemen:
This constitutes notice under my Nonstatutory Stock Option Agreement
that I elect to purchase the number of shares of ISOCOR Common Stock set forth
below for the price set forth below:
Stock option dated: _____________________
Number of shares as to
which option is exercised: _____________________
Total exercise price: _____________________
Cash payment delivered herewith: _____________________
Unless such documents are enclosed herewith, I hereby agree to execute
such additional documents evidencing such other representations and agreements
as to my investment intent with respect to these shares of Common Stock as may
be required by the Company pursuant to the provisions of the 1992 Stock Option
Plan. Please advise what additional documents may be required.
Very truly yours,
_____________________
_____________________
(Print Name)
<PAGE> 27
EXHIBIT B
INVESTMENT REPRESENTATION STATEMENT
PURCHASER :
SELLER :
COMPANY : ISOCOR
SECURITY : COMMON STOCK
AMOUNT :
DATE :
In connection with the purchase of the above-listed Securities, I, the
Purchaser, represent to the Seller and to the Company the following:
(a) I am aware of the Company's business affairs and financial
condition, and have acquired sufficient information about the Company to reach
an informed and knowledgeable decision to acquire the Securities. I am
purchasing these Securities for my own account for investment purposes only and
not with a view to, or for the resale in connection with, any "distribution"
thereof for purposes of the Securities Act of 1933, as amended (the "Securities
Act").
(b) I understand that the Securities have not been registered
under the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of my
investment intent as expressed herein. In this connection, I understand that, in
the view of the Securities and Exchange Commission (the "SEC"), the statutory
basis for such exemption may be unavailable if my representation was predicated
solely upon a present intention to hold these Securities for the minimum capital
gains period specified under tax statutes, for a deferred sale, for or until an
increase or decrease in the market price of the Securities, or for a period of
one year or any other fixed period in the future.
(c) I further understand that the Securities must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption from registration is otherwise available. Moreover, I understand
that the Company is under no obligation to register the Securities. In addition,
I understand that the certificate evidencing the Securities will be imprinted
with a legend which prohibits the transfer of the Securities unless they are
registered or such registration is not required in the opinion of counsel for
the Company.
(d) I am familiar with the provisions of Rule 701 and Rule 144, each
promulgated under the Securities Act, which, in substance, permit limited public
resale of "restricted securities" acquired, directly or indirectly, from the
issuer thereof, in a non-public offering
<PAGE> 28
subject to the satisfaction of certain conditions. Rule 701 provides that if the
issuer qualifies under Rule 701 at the time of issuance of the Securities, such
issuance will be exempt from registration under the Securities Act. In the event
the Company later becomes subject to the reporting requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter the
securities exempt under Rule 701 may be resold, subject to the satisfaction of
certain of the conditions specified by Rule 144, including among other things:
(1) the sale being made through a broker in an unsolicited "broker's
transaction" or in transactions directly with a market maker (as said term is
defined under the Securities Exchange Act of 1934); and, in the case of an
affiliate, (2) the availability of certain public information about the Company,
and the amount of securities being sold during any three month period not
exceeding the limitations specified in Rule 144(e), if applicable.
Notwithstanding this paragraph (d), I acknowledge and agree to the restrictions
set forth in paragraph (e) hereof.
In the event that the Company does not qualify under Rule 701
at the time of issuance of the Securities, then the Securities may be resold in
certain limited circumstances subject to the provisions of Rule 144, which
requires among other things: (1) the availability of certain public information
about the Company, (2) the resale occurring not less than two years after the
party has purchased, and made full payment for, within the meaning of Rule 144,
the securities to be sold; and, in the case of an affiliate, or of a
non-affiliate who has held the securities less than three years, (3) the sale
being made through a broker in an unsolicited "broker's transaction" or in
transactions directly with a market maker (as said term is defined under the
Securities Exchange Act of 1934) and the amount of securities being sold during
any three month period not exceeding the specified limitations stated therein,
if applicable.
(e) I further understand that in the event all of the
applicable requirements of Rule 144 or Rule 701 are not satisfied, registration
under the Securities Act, compliance with Regulation A, or some other
registration exemption will be required; and that, notwithstanding the fact that
Rule 144 and Rule 701 are not exclusive, the Staff of the SEC has expressed its
opinion that persons proposing to sell private placement securities other than
in a registered offering and otherwise than pursuant to Rule 144 or Rule 701
will have a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons and
their respective brokers who participate in such transactions do so at their own
risk.
(f) I understand that the certificate evidencing the
Securities may be imprinted with a legend which prohibits the transfer of the
Securities without the consent of the Commissioner of Corporations of
California. I have read the applicable Commissioner's Rules with respect to such
restriction, a copy of which is attached.
Signature of Purchaser:
_________________________________
Date:___________________, 19____
<PAGE> 1
EXHIBIT 5.1
[VENTURE LAW GROUP LOGO]
July 10, 1997
ISOCOR
3420 Ocean Park Boulevard
Santa Monica, CA 90405
REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed by
you with the Securities and Exchange Commission on or about July 10, 1997 (the
"Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, of a total of 800,000 shares of your Common
Stock (the "Shares") reserved for issuance under the 1992 Stock Option Plan (the
"Plan"). As your legal counsel, we have examined the proceedings taken and are
familiar with the proceedings proposed to be taken by you in connection with the
sale and issuance of the Shares under the Plan.
It is our opinion that, when issued and sold in the manner referred to
in the Plan and pursuant to the respective agreement which accompanies each
grant under the Plan, the Shares will be legally and validly issued, fully paid
and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever it appears in the
Registration Statement and any amendments to it.
Sincerely,
VENTURE LAW GROUP
A Professional Corporation
/s/ Venture Law Group
EJB
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement on
Form S-8 of our report dated February 12, 1997, on our audits of the
consolidated financial statements of ISOCOR as of December 31, 1996 and 1995 and
for the years ended December 31, 1996, 1995 and 1994, which report appears in
ISOCOR's Annual Report on Form 10-K (File No. 000-27900) filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Los Angeles, California
July 10, 1997
