<PAGE>
As filed with the Securities and Exchange Commission on November 12, 1999
Registration No. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
DURA PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-3645543
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
7475 LUSK BLVD.
SAN DIEGO, CALIFORNIA 92121
(Address of principal executive offices) (Zip Code)
----------------
1992 STOCK OPTION PLAN, AS AMENDED AND RESTATED
STOCK OPTION
(Full title of the plans)
----------------
CAM L. GARNER
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
DURA PHARMACEUTICALS, INC.
7475 LUSK BLVD., SAN DIEGO, CALIFORNIA 92121
(Name and address of agent for service)
(858) 457-2553
(Telephone number, including area code, of agent for service)
----------------
This Registration Statement shall become effective immediately upon filing with
the Securities and Exchange Commission, and sales of the registered securities
will begin as soon as reasonably practicable after such effective date.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered per Share Price Fee
---------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C>
1992 STOCK OPTION PLAN, AS AMENDED AND RESTATED
Common Stock, par value $.001 2,500,000 shares(1) $12.66 (2) $31,650,000 (2) $8,799
------- ----------- ------
STOCK OPTION
Common Stock, par value $.001 192,308 shares(1) $10.31 (2) $1,982,695 (2) $551
----
Aggregate Filing Fee $9,350
------
</TABLE>
- -----------------------------
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the 1992 Stock Option Plan as
amended and restated or the Stock Option by reason of any stock
dividend, stock split, recapitalization or other similar transaction
effected without the receipt of consideration which results in an
increase in the number of the Company's outstanding shares of Common
Stock.
(2) Calculated solely for purposes of this offering under Rule 457(h) and
457(c) of the Securities Act of 1933, as amended (the "1933 Act"), on
the basis of the average of the bid and asked prices per share of
Common Stock of Dura Pharmaceuticals, Inc. on November 10, 1999, as
reported by the Nasdaq National Market.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
Dura Pharmaceuticals, Inc. (the "Registrant") hereby incorporates by
reference into this Registration Statement the following documents previously
filed with the SEC:
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998, filed with the SEC on March 31,
1999, which incorporates by reference portions of the
Registrant's Proxy Statement for the Annual Stockholder
Meeting Held on May 20, 1999, filed with the SEC on April 16,
1999;
(b) The Registrant's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1999 and June 30, 1999, filed with
the SEC on May 7, 1999 and August 13, 1999, respectively;
(c) The Registrant's Current Report on Form 8-K, filed with the
SEC on January 15, 1999; and
(d) The description of the Registrant's Common Stock, par value
$0.001 per share, and related Preferred Stock rights contained
in the Registrant's Form 8-A Registration Statement, filed on
July 22, 1997 and Form 8-A Registration Statement, filed on
May 22, 1998, including any amendments or reports filed to
update such descriptions.
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of
this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any subsequently filed
document which also is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
(a) Section 145 of the Delaware General Corporation Law
permits indemnification of the Registrant's officers and directors under certain
conditions and subject to certain limitations. Section 145 of the Delaware
General Corporation Law also provides that a corporation, like the Registrant,
has the power to purchase and maintain insurance on behalf of its officers and
directors against any liability asserted against such person and incurred by him
or her in such capacity, or arising out of his or her status as such, whether or
not the corporation would have the power to indemnify him or her against such
liability under the provisions of Section 145 of the Delaware General
Corporation Law.
II-1
<PAGE>
(b) The Registrant's Bylaws (Article VII, Section (1))
provide that the Registrant shall indemnify its directors and executive officers
to the fullest extent not prohibited by Delaware General Corporation Law. The
rights to indemnity thereunder continue as to a person who has ceased to be a
director, officer, employee or agent and inure to the benefit of the heirs,
executors and administrators of the person. In addition, expenses incurred by a
director or executive officer in defending any civil, criminal, administrative
or investigative action, suit or proceeding by reason of the fact that he or she
is or was a director or officer of the Registrant (or was serving at the
Registrant's request as a director or officer of another corporation) shall be
paid by the Registrant in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he or she
is not entitled to be indemnified by the Registrant as authorized by the
relevant section of the Delaware General Corporation Law.
(c) As permitted by Section 102(b)(7) of the Delaware
General Corporation Law, Article V, Section (A) of the Registrant's Certificate
of Incorporation provides that a director of the Registrant shall not be
personally liable for monetary damages for breach of his or her fiduciary duty
as a director, except for liability (i) for any breach of the director's duty of
loyalty to the Registrant or its stockholders, (ii) for acts or omissions not in
good faith or acts or omissions that involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law or (iv) for any transaction from which the director derived any improper
personal benefit.
(d) The Registrant has entered into indemnification
agreements with each of its directors and executive officers.
(e) There is directors and officers liability insurance
now in effect which insures the Registrant's directors and officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT
-------------- -------
<S> <C>
5.1 Opinion and Consent of Brobeck, Phleger &
Harrison LLP
23.1 Consent of Brobeck, Phleger & Harrison LLP
(contained in Exhibit 5.1)
23.2 Consent of Deloitte & Touche LLP, independent
auditors
24.1 Power of Attorney. Reference is made to the signature
page of this Registration Statement
99.1(1) 1992 Stock Option Plan, as amended and restated
99.2 Form of Notice of Grant of Stock Option
99.3 Notice of Grant of Stock Option dated November
9, 1998, granted to Robert S. Whitehead,
which supercedes the Notice of Grant of
Stock Option dated July 10, 1998, filed as
Exhibit 10.4 to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter
ended September 30, 1999
</TABLE>
- -----------------
(1) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1999.
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 (i) to include any prospectus
required by Section 10(a)(3) of the 1933 Act, (ii) to reflect in the
prospectus any facts or events arising after the effective date of this
Registration Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in
the information set forth in this Registration Statement and (iii) to include
any material information with respect to the plan of distribution not
previously
II-2
<PAGE>
disclosed in this Registration Statement or any material change to
such information in this Registration Statement; provided, however, that
clauses (1)(i) and (1)(ii) shall not apply if the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or Section
15(d) of the 1934 Act that are incorporated by reference into this
Registration Statement; (2) that for the purpose of determining any liability
under the 1933 Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and (3) to remove from registration by
means of a post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the 1933 Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
1934 Act that is incorporated by reference into this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the 1933
Act may be permitted to directors, officers, or controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that, in the opinion of the SEC, such indemnification is
against public policy as expressed in the 1933 Act, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be governed by
the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Diego, State of California, on this 12th day
of November, 1999.
DURA PHARMACEUTICALS, INC.
By: /s/ Cam L. Garner
------------------------------------
Cam L. Garner
Chairman and Chief Executive Officer
II-4
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of Dura Pharmaceuticals,
Inc., a Delaware corporation, do hereby constitute and appoint Cam L. Garner and
Michael T. Borer, and each of them, the lawful attorneys-in-fact and agents with
full power and authority to do any and all acts and things and to execute any
and all instruments which said attorneys and agents, and either one of them,
determine may be necessary or advisable or required to enable said corporation
to comply with the Securities Act of 1933, as amended, and any rules or
regulations or requirements of the Securities and Exchange Commission in
connection with this registration statement. Without limiting the generality of
the foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this registration statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
registration statement, and to any and all instruments or documents filed as
part of or in conjunction with this registration statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
that all said attorneys and agents, or either of them, shall do or cause to be
done by virtue hereof. This Power of Attorney may be signed in several
counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Cam L. Garner Chairman, Chief Executive Officer and Director November 12, 1999
- ------------------------------------ (Principal Executive Officer)
Cam L. Garner
/s/ Michael T. Borer Senior Vice President and Chief Financial Officer November 12, 1999
- ------------------------------------- (Principal Financial and Accounting Officer)
Michael T. Borer
/s/ David S. Kabakoff Director and President, Dura Technologies November 12, 1999
- ------------------------------------
David S. Kabakoff
/s/ James C. Blair Director November 12, 1999
- ------------------------------------
James C. Blair
/s/ Herbert J. Conrad Director November 12, 1999
- ------------------------------------
Herbert J. Conrad
/s/ Joseph C. Cook, Jr. Director November 12, 1999
- ------------------------------------
Joseph C. Cook, Jr.
/s/ David F. Hale Director November 12, 1999
- ------------------------------------
David F. Hale
/s/ Gordon V. Ramseier Director November 12, 1999
- ------------------------------------
Gordon V. Ramseier
</TABLE>
II-5
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Charles G. Smith Director November 12, 1999
- ------------------------------------
Charles G. Smith
</TABLE>
II-6
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
DURA PHARMACEUTICALS, INC.
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENT
------- --------
<S> <C>
5.1 Opinion and Consent of Brobeck, Phleger & Harrison LLP
23.1 Consent of Brobeck, Phleger & Harrison LLP (contained in
Exhibit 5.1)
23.2 Consent of Deloitte & Touche LLP, independent auditors
24.1 Power of Attorney. Reference is made to the signature page of
this Registration Statement
99.1(1) 1992 Stock Option Plan, as amended and restated
99.2 Form of Notice of Grant of Stock Option
99.3 Notice of Grant of Stock Option dated November 9, 1998, granted
to Robert S. Whitehead, which supercedes the Notice of Grant of
Stock Option dated July 10, 1998, filed as Exhibit 10.4 to the
Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1999
</TABLE>
- -----------------
(1) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1999.
<PAGE>
Exhibit 5.1
550 West C Street
Suite 1300
San Diego
Telephone: (619) 234-1966 CA 92101-3532
Facsimile: (619) 234-3848 (12th Floor)
November 12, 1999
Dura Pharmaceuticals, Inc.
7475 Lusk Blvd.
San Diego, California 92121
Re: Dura Pharmaceuticals, Inc. Registration Statement on Form S-8
for 2,500,000 Shares of Common Stock Issuable under its 1992
Stock Option Plan, as amended and restated, and 192,308 shares
of Common Stock Issuable under a Notice of Grant of Stock
Option dated November 9, 1998
--------------------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to Dura Pharmaceuticals, Inc., a
Delaware corporation (the "Company"), in connection with the registration on
Form S-8 (the "Registration Statement") under the Securities Act of 1933, as
amended, of (i) 2,500,000 shares of Common Stock of the Company (the "Plan
Shares") and related stock options for issuance under the Company's 1992 Stock
Option Plan, as amended and restated (the "Plan") and (ii) 192,308 shares of the
Common Stock of the Company (the "Option Shares") under a Notice of Grant of
Stock Option dated November 9, 1998 (the "Option Agreement"). The Plan Shares
and the Option Shares are collectively referred to herein as the "Shares."
This opinion is being furnished in accordance with the
requirements of Item 8 of Form S-8 and Item 601(b)(5)(i) of Regulation S-K.
We have reviewed the Company's charter documents and the
corporate proceedings taken by the Company in connection with the establishment
of the Plan and the execution of the Option Agreement. Based on such review, we
are of the opinion that, if, as and when the Shares have been issued and sold
(and the consideration therefor received) pursuant to (a) the provisions of the
Plan and in accordance with the Registration Statement, or (b) the provisions of
the Option Agreement and in accordance with the Registration Statement, as
applicable, such Shares will be duly authorized, legally issued, fully paid and
nonassessable.
We consent to the filing of this opinion letter as Exhibit 5.1
to the Registration Statement. In giving this consent, we do not thereby admit
that we are within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission promulgated thereunder, or
509 of Regulation S-K.
This opinion letter is rendered as of the date first written
above and we disclaim any obligation to advise you of facts, circumstances,
events or developments which hereafter may be brought to our attention and which
may alter, affect or modify the opinion expressed herein. Our opinion is
expressly limited to the matters set forth above and we render no opinion,
whether by implication or otherwise, as to any other matters relating to the
Company, the Plan, the Option Agreement or the Shares.
Very truly yours,
/s/ Brobeck, Phleger & Harrison LLP
-----------------------------------
BROBECK, PHLEGER & HARRISON LLP
<PAGE>
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Dura Pharmaceuticals, Inc. on Form S-8 of our report dated January 27, 1999,
appearing in the Annual Report on Form 10-K of Dura Pharmaceuticals, Inc. for
the year ended December 31, 1998.
/s/ Deloitte & Touche LLP
San Diego, California -------------------------
November 8, 1999 Deloitte & Touche LLP
<PAGE>
EXHIBIT 99.2
Form of Notice of Grant of Stock Option
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------
DURA PHARMACEUTICALS, INC.
NOTICE OF GRANT OF STOCK OPTION ID: 95-3645543
7475 Lusk Blvd.
San Diego, CA 92121
- ------------------------------------------------------------------------------------------------------------
(NAME) OPTION NUMBER: -----
(ADDRESS) PLAN: 1992
ID: -----
- ------------------------------------------------------------------------------------------------------------
</TABLE>
Effective __________, you have been granted an
(Incentive/Non-Qualified) Stock Option to purchase _____ shares of Dura
Pharmaceuticals, Inc. Common Stock at $______ per share.
The total option exercise price of the option is $__________.
Your option will vest as shown below.
<TABLE>
<CAPTION>
SHARES VEST TYPE FULL VEST EXPIRATION
------ --------- --------- ----------
<S> <C> <C> <C>
(Number) (Frequency) (Date) (Date)
</TABLE>
EXERCISE SCHEDULE.
The Option vests in equal daily installments over a period of four years
beginning on the Grant Date. Optionee must complete one year of service,
measured from their hire date, before exercising any options. In no event shall
any option vest after Optionee ceases to be employed by the Company.
OTHER PROVISIONS.
Optionee understands and agrees that the Option is granted subject to and in
accordance with the express terms and conditions of the Dura Pharmaceuticals,
Inc. 1992 Stock Option Plan. Optionee further agrees to be bound by the terms
and conditions of the Plan and the terms and conditions of the Option as set
forth in the Stock Option Agreement attached hereto as Exhibit A. If this is
Optionee's first stock option grant under the Plan, a copy of the official
prospectus for the Plan is attached hereto as Exhibit B and Optionee
acknowledges receipt of same.
NO EMPLOYMENT OR SERVICE CONTRACT.
Nothing in this Notice of Grant or in the attached Stock Option Agreement or in
the Plan shall confer upon Optionee any right to continued employment for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Company (or any parent or subsidiary employing Optionee) or
Optionee, which rights are hereby expressly reserved by each, to terminate
Optionee's employment at any time for any reason whatsoever, with or without
cause.
DURA PHARMACEUTICALS, INC.
<TABLE>
<S> <C>
- --------------------------------------- ------------------------------------------
Cam L. Garner (Optionee)
Chairman and Chief Executive Officer
</TABLE>
<PAGE>
EXHIBIT 99.3
DURA PHARMACEUTICALS, INC.
CANCELLATION/REGRANT PROGRAM
NOVEMBER 9, 1998
NOTICE OF GRANT OF STOCK OPTION
Notice is hereby given of the following stock option grant (the "New
Option") to purchase shares of Common Stock of Dura Pharmaceuticals, Inc. (the
"Company"):
OPTIONEE: Robert S. Whitehead
<TABLE>
<CAPTION>
FORMERLY-GRANTED OPTION NEW OPTION
HEREBY CANCELLED HEREBY GRANTED
---------------- --------------
<S> <C>
GRANT DATE: July 10, 1998 GRANT DATE: November 9, 1998
OPTION PRICE: $21.94 per share OPTION PRICE: $10.31 per share
NUMBER OF OPTION SHARES: 250,000 shares NUMBER OF OPTION SHARES: 192,308 shares
TYPE OF OPTION: Non-Qualified Stock Option TYPE OF OPTION: Non-Qualified Stock Option
EXPIRATION DATE: July 10, 2008 EXPIRATION DATE: November 9, 2008
</TABLE>
EXERCISE SCHEDULE. The New Option shall become exercisable for the
Option Shares in a series of installments as follows: the New Option will become
exercisable for twenty-five percent (25%) of the Option Shares upon completion
of one year of service measured from the New Option Grant Date, and the balance
of the Option Shares shall become exercisable in equal daily installments over a
period of three (3) years measured from the first anniversary of the New Option
Grant Date. In no event shall any additional Option Shares vest after Optionee
ceases to be employed by the Company.
OTHER PROVISIONS. Optionee agrees to be bound by the terms and
conditions of the Stock Option Agreement attached hereto as EXHIBIT A.
NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this Notice of Grant or
in the attached Stock Option Agreement or in the Plan shall confer upon Optionee
any right to continued employment for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Company (or
any parent or subsidiary employing Optionee) or Optionee, which rights are
hereby expressly reserved by each, to terminate Optionee's employment at any
time for any reason whatsoever, with or without cause.
THIS OPTION IS GRANTED IN FULL AND COMPLETE CANCELLATION OF THE
FORMERLY-GRANTED OPTION IDENTIFIED ABOVE, AND OPTIONEE HEREBY AGREES AND
ACKNOWLEDGES THAT OPTIONEE HAS NO FURTHER RIGHTS TO ACQUIRE ANY SHARES OF COMMON
STOCK UNDER THE FORMERLY-GRANTED OPTION HEREBY CANCELLED.
DURA PHARMACEUTICALS, INC.
By: /s/ Cam L. Garner By: /s/ Robert S. Whitehead
------------------------------------ --------------------------
Cam L. Garner OPTIONEE
Chairman & CEO Robert S. Whitehead
<PAGE>
EXHIBIT A
STOCK OPTION AGREEMENT
DURA PHARMACEUTICALS, INC.
RECITALS
A. The Board of Directors of Dura Pharmaceuticals, Inc. (the
"Corporation") grants stock options to selected individuals for the purpose of
attracting and retaining the services of persons who contribute to the growth
and financial success of the Corporation.
B. Optionee is a person who the Corporation believes has and will
contribute to the growth and financial success of the Corporation.
AGREEMENT
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT. Corporation hereby grants Optionee an option ("Option") to
purchase shares of Common Stock of the Corporation ("Option shares") as
specified in the attached Notice of Grant of Stock Option (the "Grant Notice")
at an exercise price specified in the Grant Notice (the "Exercise Price")
subject to the terms and conditions of this Agreement and the Grant Notice.
2. VESTING OR EXERCISE PERIOD. Subject to the terms and conditions of
this Agreement and that certain letter agreement dated July 1, 1998 between the
Corporation and Optionee, this Option will vest as set forth in the Grant
Notice. Provided, however, that this Option will expire at midnight on the
expiration date shown in the Grant Notice, which date is 10 years after the
Grant Date set in the Grant Notice (the "Expiration Date"), and this Option must
be exercised, if at all, on or before the Expiration Date.
3. DESIGNATION OF OPTION TYPE. Optionee understands that the Option is
a non-qualified stock option.
4. TERMINATION.
(a) If Optionee ceases to be an employee of the Corporation or
a subsidiary or parent of the Corporation for any reason except death or
disability, this Option may be exercised (for shares vested on the date Optionee
ceased to be an employee) within THREE (3) MONTHS after the date Optionee ceased
to be an employee, but in no event later than the Expiration Date.
(b) If Optionee ceases to be an employee of the Corporation or
a subsidiary or parent of the Corporation because of disability or death, this
Option may be exercised (for shares vested on the date Optionee ceased to be an
employee) within TWELVE (12) MONTHS after Optionee ceased to be an employee, but
in no event later than the Expiration Date.
For purposes of this section, Optionee will be deemed an "employee" if Optionee
is providing services as an independent contractor or consultant to the
Corporation or a subsidiary or parent of the Corporation.
5. EXERCISE.
(a) This Option is exercisable by delivery of an executed
Notice of Exercise, in a form satisfactory to the Corporation. The Notice of
Exercise will set forth the Optionee's election to exercise this Option and the
number of Option Shares being purchased.
(b) Full payment of the Exercise Price must be made in one or
more of the following forms:
A-1
<PAGE>
(1) check made payable to the Corporation;
(2) promissory note;
(3) shares of Common Stock of the Corporation
held for the requisite period to avoid a charge to the Corporation's earnings
and valued as of the Exercise Date; or
(4) delivery of a properly executed Notice of
Exercise, together with irrevocable instructions to a broker to promptly deliver
to the Corporation the amount of sale or loan proceeds to pay the Exercise
Price.
For purposes of subparagraphs (2) and (4) immediately above, the effective date
of the exercise (the "Exercise Date") will be the date the Notice of Exercise is
delivered to the Corporation. In all other cases, the Exercise Date will be the
date on which the Notice of Exercise and actual payment are received by the
Corporation.
6. TRANSFERABILITY. This Option may be assigned in whole or in
part during the Optionee's lifetime. The assigned portion may only be exercised
by the person or persons who acquire a proprietary interest in the Option
pursuant to the assignment. The terms applicable to the assigned portion shall
be the same as those in effect for the Option immediately prior to such
assignment and shall be set forth in such documents issued to the assignee as
the Corporation may deem appropriate. This Option may, after Optionee's death,
be transferred by Will or state law of descent and distribution.
The terms of this Option are binding upon the executors, administrators,
successors and assigns of Optionee.
7. WITHHOLDING. Optionee agrees, as a condition to the exercise
of this Option, to make appropriate arrangements with the Corporation or a
subsidiary or parent of the Corporation employing Optionee for the satisfaction
of any federal, state or local income or employment tax requirements applicable
to the exercise of this Option or to the sale of shares acquired under this
Option.
8. ADJUSTMENTS. If any change is made to the Option Shares
(whether by reason of merger, consolidation, reorganization, recapitalization,
stock dividend, stock split, combination of shares, exchange of shares or other
change in corporate or capital structure of the Corporation) then the
Corporation will make appropriate adjustments to the kind, price per share and
maximum number of shares subject to this Option. Adjustments made by the
Corporation will be final, binding and conclusive. No adjustment will be made if
such change results in the acceleration and termination of all outstanding
options in accordance with the Acceleration and Termination of Options
provisions of the following paragraph.
9. ACCELERATION AND TERMINATION OF OPTIONS. In the event of one
or more of the following transactions ("Corporate Transactions"):
(a) a merger or consolidation in which the Corporation
is not the surviving entity, except for a transaction the principal purpose of
which is to change the State of the Corporation's incorporation,
(b) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation,
(c) any reverse merger in which the corporation is the
surviving entity but in which 50% or more of the Corporation's outstanding
voting stock is transferred to holders different from those who held such
securities immediately before the merger, or,
(d) an acquisition by any person or related group of
persons (other than the Corporation or a person that directly or indirectly
controls, is controlled by or is under common control with, the Corporation) of
ownership of more than 50% of the Corporation's outstanding Common Stock,
pursuant to a tender or exchange offer
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then the Option holder may exercise this Option for all of the Option Shares,
including shares previously unvested, provided the Option is exercised
immediately before the consummation of the Corporate Transaction and before the
Expiration Date. Upon consummation of the Corporate Transaction, this Option, to
the extent not previously exercised, will terminate and cease to be exercisable.
10. NOTICES. Any notice required to be given to the Corporation
under this Agreement will be in writing and addressed to the Corporation and its
corporate offices. Any notice required to be given to Optionee under this
Agreement will be in writing and addressed to Optionee at the address specified
in Optionee's employment file maintained by the Corporation. All notices will be
deemed to have been given or delivered upon personal delivery or upon deposit in
the United State mail, postage prepaid and properly addressed to the party to be
notified.
11. NO EMPLOYMENT CONTRACT. This Option shall not confer upon
Optionee any right to continue in the employ of or to provide services to the
Corporation or a subsidiary or parent of the Corporation or constitute any
contract or agreement of employment or services or interfere in any way with the
right of the Corporation or a subsidiary or parent of the Corporation to reduce
such Optionee's compensation or to terminate Optionee's employment or services
at any time, with or without cause.
12. COMPLIANCE. This Option may not be exercised unless the
exercise is in compliance with all applicable requirements of federal and state
law and with the requirements of any stock exchange on which the Corporation's
Common Stock may be listed at the time of exercise.
13. SHAREHOLDER RIGHTS. Optionee will have no shareholder rights
with respect to any Option Shares prior to the Exercise Date of the option.
14. CORPORATION RIGHTS. The grant this Option shall in no way
affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.
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