<PAGE>
As filed with the Securities and Exchange Commission on October 15, 1999
Registration No. 33-__________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
--------------------------
XIRCOM, INC.
(Exact name of issuer as specified in its charter)
- --------------------------------------------------------------------------------
California 95-4221884
(State of Incorporation) (IRS Employer Identification No.)
2300 Corporate Center Drive
Thousand Oaks, California 91320
(Address of Principal Executive Offices)
____________________
ENTREGA TECHNOLOGIES, INC. STOCK OPTION PLAN, AS AMENDED
(Full title of the plan)
____________________
Steven F. DeGennaro
Chief Financial Officer
XIRCOM, INC.
2300 Corporate Center Drive
Thousand Oaks, California 91320
(Name and address of agent for service)
(805) 376-9300
(Telephone number, including area code, of agent for service)
____________________
Copy to:
Howard S. Zeprun, Esq.
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304
Telephone: (415) 493-9300
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
============================================================================================================
Title of Securities Amount to Proposed Maximum Proposed Maximum Amount of
to be Registered be Registered Offering Price Per Share Aggregate Offering Price Registration Fee
============================================================================================================
<S> <C> <C> <C> <C>
Common Stock,
$0.001 par value
Upon exercise of
options under
Entrega 76,914 shs. $5.83(1) $448,408.62 $124.66
Technologies, Inc.
Stock Option Plan,
as amended
TOTAL............. $124.66
</TABLE>
___________________________
(1) Such shares are issuable upon exercise of outstanding options with fixed
exercise prices. Pursuant to rule 457(h), the aggregate offering price and the
fee have been computed upon the basis of the price at which the options may be
exercised. The offering price per share set forth for such shares is the
exercise price per share at which such options are exercisable.
================================================================================
<PAGE>
XIRCOM, INC.
REGISTRATION STATEMENT ON FORM S-8
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
---------------------------------------
There are hereby incorporated by reference in this Registration Statement
the following documents and information heretofore filed with the Securities and
Exchange Commission:
1. The Company's Annual Report on Form 10-K for the year ended September
30, 1998, filed pursuant to Section 13 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act").
2. The Company's Quarterly Reports on Form 10-Q for the quarters ending
December 31, 1998, March 31, 1999 and June 30, 1999 filed pursuant to Section 13
of the Exchange Act.
3. The Company's Current Report on Form 8-K filed with the SEC dated
February 18, 1999, filed pursuant to Section 13 of the Exchange Act.
4. The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A dated February 11, 1992, filed
pursuant to Section 12 of the Exchange Act, including any amendment or report
filed for the purpose of updating such description.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act on or after the date of this Registration
Statement and 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 6. Indemnification of Directors and Officers.
-----------------------------------------
Section 204 of the General Corporation Law of the State of California
("California Law") authorizes a corporation to adopt a provision in its articles
of incorporation eliminating the personal liability of directors to corporations
and their shareholders for monetary damages for breach or alleged breach of
directors' "duty of care." Following a California corporation's adoption of
such a provision, its directors are not accountable to corporations and their
shareholders for monetary damages for conduct constituting negligence (or gross
negligence) in the exercise of their fiduciary duties; however, directors
continue to be subject to equitable
II-1
<PAGE>
remedies such as injunction or rescission. Under California Law, a director also
continues to be liable for (1) a breach of his or her duty of loyalty; (2) acts
or omissions not in good faith or involving intentional misconduct or knowing
violations of law; (3) illegal payments of dividends; and (4) approval of any
transaction from which a director derives an improper personal benefit. The
adoption of such a provision in the articles of incorporation also does not
limit directors' liability for violations of the federal securities laws.
Section 317 of the California Law makes a provision for the indemnification
of officers, directors and other corporate agents in terms sufficiently broad to
indemnify such persons, under certain circumstances, for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "Securities Act"). An amendment to Section 317 provides that
the indemnification provided by this section is not exclusive to the extent
additional rights are authorized in a corporation's articles of incorporation.
The Company has adopted provisions in its Amended Articles of Incorporation
which eliminate the liability of its directors for monetary damages and
authorize the Company to indemnify its officers, directors and other agents to
the fullest extent permitted by law.
Item 8. Exhibits.
--------
Exhibit
Number Description
------- -----------
4.1 Entrega Technologies, Inc. Stock Option Plan, as amended
23.1 Consent of Ernst & Young LLP, Independent Auditors.
25.1 Power of Attorney (included in signature pages to this
registration statement).
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 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
Securities Act of 1933, as amended (the "Securities Act") each such post-
effective amendment shall be deemed
II-2
<PAGE>
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 Securities 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
Securities 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
Securities 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 Securities
Act and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act that 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 Thousand Oaks, State of California, on October 12,
1999.
XIRCOM, INC.
By: /s/ DIRK I. GATES
------------------------------
Dirk I. Gates, Chairman, President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Dirk I. Gates and Steven F. DeGennaro,
jointly and severally, his attorneys-in-fact, each with the power of
substitution, for him 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 substitution or substitutes, may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ DIRK I. GATES President and Chief Executive Officer October 12, 1999
- ----------------------------
(Dirk I. Gates) and
Director (Principal Executive Officer)
/s/ STEVEN F. DEGENNARO Vice President, Finance and Chief October 12, 1999
- ----------------------------
(Steven F. DeGennaro) Financial Officer
(Principal Accounting Officer)
/s/ MICHAEL F. G. ASHBY Director October 12, 1999
- ----------------------------
(Michael F. G. Ashby)
/s/ KENNETH J. BIBA Director October 12, 1999
- ----------------------------
(Kenneth J. Biba)
/s/ GARY J. BOWEN Director October 12, 1999
- ----------------------------
(Gary J. Bowen)
/s/ J. KIRK MATHEWS Director October 12, 1999
- ----------------------------
(J. Kirk Mathews)
/s/ CARL E. RUSSO Director October 12, 1999
- ----------------------------
(Carl E. Russo)
</TABLE>
II-4
<PAGE>
<TABLE>
<S> <C> <C>
/s/ WILLIAM J. SCHROEDER Director October 12, 1999
- ----------------------------
(William J. Schroeder)
/s/ DELBERT W. YOCAM Director October 12, 1999
- ----------------------------
(Delbert W. Yocam)
</TABLE>
II-5
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- --------------------------------------------------------------------------------
EXHIBITS
- --------------------------------------------------------------------------------
Registration Statement on Form S-8
XIRCOM, INC.
II-6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
<S> <C> <C>
4.1 Entrega Technologies, Inc. Stock Option Plan, as amended
23.1 Consent of Ernst & Young LLP, Independent Auditors
25.1(1) Power of Attorney (SEE II-5)
</TABLE>
_______________________
EXHIBIT 4. See page II-4
- ----------
<PAGE>
EXHIBIT 4.1
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 1. Nature of Plan..................................... 1
Section 2. Definitions........................................ 1
Section 3. Administration..................................... 4
Section 4. Eligibility........................................ 5
Section 5. Company Stock Subject to the Plan.................. 5
Section 6. Determination of Fair Market Value................. 6
Section 7. Terms of the Plan.................................. 6
Section 8. Exercise of Options After Separation From Service.. 8
Section 9. Restrictions on Sale and Transfer of Stock......... 9
Section 10. Non-Transferability................................ 9
Section 11. Mergers, Consolidations, Etc....................... 9
Section 12. Anti-Dilution...................................... 10
Section 13. Miscellaneous...................................... 10
</TABLE>
<PAGE>
ENTREGA TECHNOLOGIES, INC.
STOCK OPTION PLAN
Section 1. Nature of Plan.
--------------
The Entrega Technologies, Inc. Stock Option Plan (the "Plan") is entered
into by Entrega Technologies, Inc. (the "Company") with the intent of providing
incentive benefits to a select group of key employees, officers, directors, and
certain independent contractors of the Company who contribute materially to the
success of the Company and to induce the efforts of such individuals to
contribute to the continued growth and future business success of the Company.
The purpose of the Plan is to encourage the long-term success of the
Company by: (1) providing a means by which the Company can attract, motivate and
retain key employees who can contribute materially to that success; and (2)
encouraging stock ownership for those individuals who should have a proprietary
interest in the Company's success.
It is intended that the Options granted pursuant to this Plan may be
granted as either non-qualified stock options which do not satisfy the
requirements of incentive stock options under Section 422 of the Internal
Revenue Code of 1986, as amended, or as incentive stock options which do satisfy
the requirements of said Section 422.
Section 2. Definitions.
-----------
For purposes of this Plan, unless the context clearly implies otherwise,
the singular includes the plural; the masculine includes the feminine; and the
capitalized words have the following meanings:
Anniversary Date December 31st of each year.
Beneficiary The person or persons, or the estate of a
Participant, entitled to receive any benefits
under the Plan following the death of a
Participant.
Board of Directors The Board of Directors of the Company, as same may
be appointed from time to time pursuant to a vote
of the Company's Shareholders.
<PAGE>
Committee The Committee appointed by the Board of Directors,
or in the absence of a duly appointed Committee,
the Board itself, which administers the Plan.
Company Entrega Technologies, Inc., a California
corporation, and its successors and assigns.
Company Stock Shares of nonvoting common stock of the Company
which are authorized and issued as of the Date of
Grant.
Date of Exercise The date on which a Participant in the Plan
exercises an Option to purchase Company Stock.
Date of Grant The date on which an Employee, Independent
Contractor, Officer or Director is granted an
Option pursuant to this Plan.
Director Any person who is a member of the Board of
Directors of the Company.
Effective Date January 16, 1998.
Employee Any person who is employed on a regular full-time
basis with the Company as determined by its
personnel policies and practices.
Employer Entrega Technologies, Inc., a California
corporation, its successors and assigns.
Fair Market Value The fair market value of the Company's Stock as of
any given Anniversary Date, as determined under
the provisions of Section 6.
Independent Contractor Any person or entity who is retained by Employer
as an independent contractor to provide services
to Employer. An Independent Contractor shall not
be an Employee and is only eligible to receive
Non-Qualified Options.
Non-Qualified Option A stock option which does not satisfy the
requirements of incentive stock options under
Section 422 of the Internal Revenue Code of 1986,
as amended. A Non-Qualified Option is still a
valid stock option granted by the Company, but
does not receive the favorable tax treatment of an
incentive stock option.
<PAGE>
Officer Any person who is an Employee of the Company and
has been designated as an Officer of the Company
by its Board of Directors.
Option The right to purchase one or more shares of
Company Stock pursuant to the provisions of this
Plan. Options granted hereunder may be either
Non-Qualified Options or Incentive Stock Options.
Option Pool The Option Shares made available under this Plan.
Option Shares The shares of Company Stock covered by an Option
granted pursuant to this Plan.
Optionee Any Employee, Independent Contractor, Officer or
Director who has entered into a Stock Option
Agreement with the Company.
Participant Any Employee, Independent Contractor, Officer or
Director designated by the Committee as being
eligible to receive Options pursuant to this Plan.
Plan The Entrega Technologies, Inc. Stock Option Plan
which shall be evidenced by this Plan and by each
Stock Option Agreement entered into pursuant
thereto.
Plan Year For the first year of the Plan, the year shall
begin on January 16, 1998 and end on December 31,
1998. For every year thereafter, the twelve (12)
consecutive calendar months beginning on January 1
of each year shall be the Plan Year.
Shareholders' Agreement The Shareholders' Agreement among the Company and
its shareholders dated the date hereof. There may
be different Shareholders' Agreements for
different Shareholders, in which case all
references to a Shareholders' Agreement shall
refer only to the Shareholders' Agreement to which
the affected Shareholder is a party.
Shares Shares of Company Stock.
Separation from Service The date of Optionee's last day of employment with
Company.
Stock Option Agreement The form of written agreement which is entered
into between the Company and a Participant in this
Plan pursuant to which the Participant is granted
an Option.
<PAGE>
Year of Exercise The twelve (12) consecutive month period beginning
as of the Date of Grant of an Option, and each
twelve (12) consecutive month period beginning on
an anniversary of said Date of Grant.
Section 3. Administration.
--------------
(a) Committee Membership. The Plan shall be administered by a
--------------------
Committee of the Board of Directors, or, in the absence of such Committee, by
the Board of Directors itself. The Board of Directors has the power to dictate
the operation and conduct of the Committee, including the number of its members.
The designation of the Committee members shall be set forth in a Board of
Directors' resolution and provide that any Committee member may resign from
office or may be removed by the Board. Upon such resignation or removal, a
Committee member shall be appointed from the remaining members of the Board of
Directors.
(b) Committee Action. The Committee shall act by a majority of its
----------------
members at the time in office and such action may be taken either by a vote at a
meeting or in writing without a meeting. Any action so approved shall be
considered an action approved by the Committee and the entire Board of
Directors. In addition, the Committee shall have the power to delegate specific
responsibilities to officers or employees of the Company or to other persons,
all of whom shall serve at the pleasure of the Committee and, if full-time
employees of the Company, without additional compensation for such services.
(c) Responsibilities of the Committee. The Committee shall enforce this
---------------------------------
Plan in accordance with its terms and shall be charged with its general
administration and shall have all necessary power to accomplish those purposes,
including but not limited to the power:
(i) To maintain all the necessary records for the administration
of the Plan.
(ii) To retain an independent appraiser for the purpose of valuing
the common stock of the Company.
(iii) To confirm the designation of Employees, Independent
Contractors, Officers or Directors of the Company as eligible to participate in
the Plan, as recommended by the Chief Executive Officer, Chief Financial
Officer, Secretary, or a director of the Company.
(iv) To approve the grant of Options to any Participant in the
Plan based on individual contributions to the Company's fiscal performance.
(v) To determine and approve the terms and conditions of each
Participant's Stock Option Agreement.
(vi) To make and publish such rules for the administration of this
Plan which are not inconsistent with the terms hereof.
<PAGE>
(d) Information. The Corporation shall supply the Committee with full
-----------
and timely information on all matters relating to the revenues of the Company
and such other pertinent facts as the Committee may require to fulfill its
responsibilities under the Plan.
(e) Compensation and Expenses. The members of the Committee shall serve
-------------------------
without compensation for their services hereunder. All expenses of the Committee
shall be paid by the Company, and the Company shall furnish the Committee with
such clerical and other assistance as is necessary in the performance of its
duties.
(f) Consultants and Advisors. The Committee may employ such consultants
------------------------
and advisors as it deems necessary or useful in carrying out its duties
hereunder, with the cost thereof to be paid by the Company, including but not
limited to retaining an independent appraiser for the purposes of valuing the
common stock of the Company and retaining counsel to advise with respect to
interpretation of the Plan.
Section 4. Eligibility.
-----------
(a) The Chief Executive Officer, Chief Financial Officer, Secretary or
a director of the Company shall submit recommendations to the Committee of
Employees, Independent Contractors, Officers or Directors eligible to
participate in the Plan, as well as the amount of Options to be granted to each
such designated Participant during the Plan Year. All such individuals, and any
other individuals who, in the Committee's judgment, are (or will be)
contributing to the long-term success of the Company, may be granted Options
pursuant to this Plan. However, no Incentive Stock Option shall be granted to
any individual who is not an Employee of the Company.
(b) Each such designated Participant as well as the recommended grant
of Options pursuant to this Plan is subject to confirmation by the Committee.
Any such confirmation shall be in the sole discretion of the Committee and be
based on the individual achievement and contribution of the designated
Participant to the continued productivity and profitability of the Company.
(c) Any individual so designated and confirmed shall become an Optionee
in the Plan upon execution and delivery to the Board of Directors of a Stock
Option Agreement.
(d) Notwithstanding the foregoing, participation in the Plan is
voluntary and any Employee, Independent Contractor, Officer or Director
designated as a Participant may waive participation within ten (10) days of the
Date of Grant. Any such waiver shall be effective only with respect to those
Options granted as of said date.
Section 5. Company Stock Subject to the Plan.
---------------------------------
The total number of Shares authorized pursuant to the Articles of
Incorporation of Company for the granting of Options is One Million (1,000,000)
Shares of Company Stock. The total amount of Shares allocated to the Option Pool
for each Plan Year granted under this Plan will be determined annually by the
Board of Directors. If any Option granted under this Plan is waived, or expires
for any
<PAGE>
reason, prior to having been fully exercised by an Optionee, the number of
Option Shares not purchased pursuant to such Option shall be reinstated in the
Option Pool and available for future Options under this Plan. Notwithstanding
the foregoing, however, appropriate adjustments in the number of the Option
Shares, and in the Option Price per share, shall be made by the Board of
Directors to give effect to any adjustments pursuant to Section 11 hereof.
Section 6. Determination of Fair Market Value.
----------------------------------
The fair market value of the Company Stock shall be determined either by
the Board of Directors in good faith based upon the financial and economic
information available to it or by an independent appraiser, determined as of the
Date of Grant.
Section 7. Terms of the Plan.
-----------------
(a) Grant of Options. For the Plan Year ending December 31, 1998 and
for each such succeeding Plan Year thereafter as the Committee may determine to
be in the best interests of the Company, Options may be granted to Participants
to purchase Shares allocable to this Plan. Each such Option shall be evidenced
by a Stock Option Agreement between the Company and the Optionee as well as the
Optionee's written acceptance to be bound by the terms of the Shareholders'
Agreement. The terms and conditions of each Stock Option Agreement shall be
determined on a case by case basis, in the sole discretion of the Committee.
Notwithstanding the above, each Stock Option Agreement shall comply in
substantial part with the following terms and conditions:
(b) Option Price, Vesting and Exercise of Options. Options shall be
---------------------------------------------
granted at the Option Price set forth below and shall vest and may be exercised
as follows:
(i) As to all Options granted to Employees and Officers as
Incentive Stock Options, the Option Price established by the Committee shall be
the Fair Market Value of the Option Shares, as determined under the provisions
of Section 6 hereof. For Incentive Stock Options granted to an otherwise
eligible Employee or Officer who, immediately before the granting of such Option
(and without taking into account the Option Shares object to the Option being
granted), is the registered or beneficial owner of more than ten percent (10%)
of the total combined voting power or value of all classes of capital stock of
the Company (a "10% Shareholder"), the Option Price shall be not less than one
hundred ten percent (110%) of the Fair Market Value on the Date of Grant.
(ii) As to all Options granted to Employees, Independent
Contractors, Officers and Directors as Non-Qualified Options, the Option Price
shall be such price, and such Option shall vest over such period, as the Board
or the Committee shall establish at the Date of Grant.
(iii) To the extent the aggregate Fair Market Value (determined at
the time the Option is granted) of the Option Shares with respect to which
Options are exercisable for the first time by any one individual during any
calendar year exceed One Hundred Thousand Dollars ($100,000), such Options
exercised in excess of that amount shall be Non-Qualified Options. Total Fair
Market Value shall be
<PAGE>
determined by multiplying the Fair Market Value per share at the Date of Grant
times the number of Option Shares granted.
(iv) Subject to the discretion of the Committee to change the
following vesting schedule in specific Stock Option Agreements, Options shall
vest and may be exercised by the Optionee as follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
Year of Exercise Following Date of Grant Amount Vested
------------------------------------------------------------------------------------------------
<S> <C>
1 25%
------------------------------------------------------------------------------------------------
2 50%
------------------------------------------------------------------------------------------------
3 75%
------------------------------------------------------------------------------------------------
4 100%
------------------------------------------------------------------------------------------------
</TABLE>
Any portion of an Option which vests, but is not exercised
by an Optionee during a given year, may be exercised during any subsequent year
until expiration of the Option pursuant to subsection (c) of this Section 7.
Each Year of Exercise shall be the twelve (12) consecutive month period
beginning as of the Date of Grant or the anniversary thereof. Notwithstanding
the above, the vesting schedule is subject to the provisions of Section 11.
(c) Duration of Options. Except as provided in Section 8 or as
-------------------
otherwise set forth in the Stock Option Agreement, the expiration date for each
Option granted under the Plan and all rights to purchase Option Shares pursuant
thereto shall be no later than the tenth (10th) anniversary of the Date of
Grant; provided that in the event that the Optionee is a 10% Shareholder and it
is intended that the Option shall be an Incentive Stock Option, such expiration
date shall be not later than the fifth (5th) anniversary of the Date of Grant of
the Option.
(d) Exercise of Options. An Optionee vested in and entitled to exercise
-------------------
an Option granted pursuant to this Plan may exercise it in whole at any time, or
in part from time to time, by delivering to the Secretary of the Company written
notice specifying the number of Option Shares with respect to which the Option
is being exercised, together with payment in full of the purchase price of such
shares in cash or by a cashier's check or any other consideration acceptable to
the Committee in its sole discretion so long as such consideration is
permissible under the applicable federal and state laws.
(e) Shareholders' Agreement. All Option Shares acquired upon the
-----------------------
exercise of any Option shall be subject to the terms and conditions of a
Shareholders' Agreement. As a condition precedent to the Optionee exercising an
Option and the obligation of the Company to issue stock pursuant to the exercise
of an Option, the Optionee must first execute an Adoption Agreement agreeing to
be bound by the terms of the applicable Shareholders' Agreement.
Section 8. Exercise of Options After Separation From Service.
-------------------------------------------------
<PAGE>
Any Option granted pursuant to this Plan may be exercised by an Optionee
after a Separation from Service from the Company only to the extent that such
Option was vested immediately prior to such Separation and then only according
to the following rules, unless other rules are specifically set forth in an
Optionee's particular Stock Option Agreement, in which case the terms set forth
in the Stock Option Agreement shall apply:
(a) In the event that an Optionee's Separation from Service with the
Company was either (i) for cause as defined in an Optionee's Employment
Agreement or the Employment Manual, or if no Employment Agreement or Employee
Manual, providing provisions applicable to such Optionee, "Cause" shall be
Optionee's failure to perform in a satisfactory manner his duties with Company,
as determined by the Board of Directors in its sole discretion, or: (1) the
commission by Optionee of any act of embezzlement, fraud, larceny, theft or
other willful misconduct relating to and adversely affecting the business
affairs of Company; (2) the conviction of Optionee of a felony, whether or not
related to his employment by Employer; (3) a willful breach by Optionee of his
duties and responsibilities under his Employment Agreement; (4) the habitual
failure of Optionee to perform his duties and responsibilities in a manner and
to the extent required; (5) conduct on the part of Optionee which the Board, in
good faith, determines would reflect so seriously upon the public reputation of
Optionee, if such conduct became publicly known, as to substantially prejudice
the Company's interests if Optionee were retained as an Employee, Independent
Contractor, Officer or Director of the Company; or (6) if the Optionee fails, in
the reasonable opinion of the President or Board of Directors of the Company, to
devote a substantial portion of his work efforts to the performance of his
duties hereunder, except by reason of disability, or (ii) for reasons other than
those specified in Sections 8(b), (c) and (d), any unexercised Option held by
such Optionee shall immediately terminate.
(b) In the event of the death of the Optionee while employed by the
Company or while the Option remains in effect under Section 8(c) or 8(d), any
unexercised but vested Option held by such Optionee shall terminate on the
earlier of (i) ninety (90) days after the Date on which the Separation from
Service occurred; or (ii) the Option's expiration date.
(c) In the event of an Optionee's Separation from Service with the
Corporation on account of the Optionee's total and complete disability as
defined in an Optionee's Employment Agreement or Employment Manual, any
unexercised but vested Option held by such Optionee shall terminate on the
earlier of (i) ninety (90) days after the Date on which occurred the Separation
from Service; or (ii) the Option's expiration date.
(d) In the event of an Optionee's Separation from Service with the Company
either after age sixty-five (65) or before age 65 with the written consent of
the Company (the "Retirement"), any unexercised but vested Option held by such
Optionee shall terminate on the earlier of (i) ninety (90) days after the Date
on which the Separation from Service occurred; or (ii) the Option's expiration
date.
(e) The Committee shall determine in each case whether an authorized leave
of absence, military service or otherwise, shall constitute a Separation from
Service.
<PAGE>
Section 9. Restrictions on Sale and Transfer of Stock.
------------------------------------------
All Option Shares acquired by a Participant upon the exercise of any
Option pursuant to this Plan cannot be sold, transferred, assigned, encumbered
or otherwise alienated except pursuant to the terms of the applicable
Shareholders' Agreement.
Section 10. Non-Transferability.
-------------------
Unless otherwise provided in a particular Optionee's Stock Option
Agreement, unexercised Options granted pursuant to this Plan shall not be
transferable by the Optionee except by will or the laws of descent and
distribution and all Options shall be exercisable during the Optionee's lifetime
only by the Optionee. The terms of this Option shall be binding upon the
executors, administrators, heirs and successors of the Optionee.
Section 11. Mergers, Consolidations, Etc.
-----------------------------
If the Company approves a proposal to sell, merge, consolidate or
otherwise transfer all or substantially all of the assets or stock of the
Company, including an initial public offering, certain Optionees, as set forth
in the Stock Option Agreement shall be eligible to exercise any or all
theretofore unexercisable Options. If an Optionee is so eligible, the Committee
shall notify in writing those Optionees of the proposed transaction. Such
written notice shall be provided at least fifteen (15) days prior to the
effective date of the proposed transaction and shall advise the eligible
Optionee that he has the right to exercise any or all theretofore unexercisable
Options which were granted to the Optionee, including those, if any, which by
reason of the relevant Plan or Stock Option Agreement provisions have not then
become eligible for exercise, whether because such Options are not then vested
or otherwise. The eligible Optionee, by so notifying the Company in writing,
may, in exercising such Options, condition such exercise upon, and provide that
such exercise shall become effective at the time of, but immediately prior to,
the consummation of the transaction. Exercise of Options which would not be
exercisable but for the provisions of this Section 11 may be exercised only
conditionally upon the consummation of the transaction. If the transaction is
consummated, each Option, to the extent not previously exercised prior to the
date specified in the foregoing exercise of Option notice, shall terminate on
the effective date of such consummation. If the transaction is abandoned: (a)
Any shares not purchased upon exercise of such Option shall continue to be
available for purchase in accordance with the Plan and the applicable agreement;
and (b) To the extent that any Option not exercised prior to such abandonment
was unvested, the vesting schedule set forth in the applicable Stock Option
Agreement shall continue in force as originally contemplated.
Section 12. Anti-Dilution. In the event of a stock split, reverse stock split
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or recapitalization, the number of Option Shares and the Option Price shall be
adjusted by the Company accordingly such that the Option Shares shall not be
diluted.
Section 13. Miscellaneous.
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<PAGE>
(a) Effective Date and Duration. This Plan shall become effective as of
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January 16, 1998, subject to the approval of the Plan by the Shareholders of the
Company within twelve (12) months from the date of adoption of the Plan by the
Board of Directors of the Company. Unless the Plan is sooner terminated pursuant
to Section 12(b), the Plan shall terminate on, and no Option shall be granted
after, the tenth (10th) anniversary date of the Effective Date. The provisions
of the Plan, however, shall continue to govern all Options theretofore granted
until the exercise, expiration or cancellation of such Options.
(b) Amendment and Termination of the Plan. The Board of Directors of the
-------------------------------------
Company may terminate the Plan at any time, or amend it from time to time in
such respects as it deems desirable; provided that, without the further approval
of the Shareholders of the Company, no amendment shall: (i) increase the maximum
number of shares with respect to which Options may be granted under the Plan
provided for in Section 5; (ii) change the Option Price provided for in Section
7(b); or (iii) change the eligibility provisions of Section 4; and, provided
further, that no termination of, or amendment to, the Plan shall adversely
effect the rights of an Optionee holding an Option theretofore granted under the
Plan without the consent of said Optionee.
(c) Issuance of Shares - Restrictions. Subject to the conditions and
---------------------------------
restrictions provided in this Section 12(c) and in Sections 7(d) and 7(e), the
Company shall, as soon as practicable after an Option has been exercised in
whole or in part, deliver to the Optionee a certificate, registered in the name
of such Optionee, for the number of shares of stock with respect to which the
Option has been exercised. The Company shall legend such stock certificate
issued hereunder to reflect the restrictions necessary under the terms of the
Shareholders' Agreement and any federal or state laws or regulations thereunder.
The Committee may require that Options be exercised in convenient units of
shares, and any such requirement shall be specified in the Stock Option
Agreement.
(d) Rights as Shareholder and Employee. No person holding an Option has
----------------------------------
any rights as a Shareholder of the Company with respect to any Option Shares
prior to the date of issuance of such shares. Neither the Plan, nor any Option
granted under the Plan, shall confer upon a person any right to continue in the
employment of the Company or, as to the Plan, any right to an Option under this
Plan.
(e) Construction. The Plan and the agreements entered into pursuant
------------
thereto, shall be governed by and interpreted in accordance with the laws of the
State of California.
Executed this 16th day of January, 1998.
ENTREGA TECHNOLOGIES, INC.
By: /s/ Eric Feedman
______________________________
President
By: /s/ Eric Feedman
______________________________
Secretary
<PAGE>
EXHIBIT 23.1
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CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration
Statement (Form S-8) pertaining to the Entrega Technologies, Inc. Stock Option
Plan, as amended, of our report dated October 19, 1998, with respect to the
consolidated financial statements and schedule of Xircom , Inc. included in its
Annual Report (Form 10-K) for the year ended September 30, 1998, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Woodland Hills, California
October 12, 1999
