As filed with the Securities and Exchange Commission on June 13, 1996
Registration No. 33-96384
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CELLEGY PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 82-0429727
(State of incorporation) (I.R.S. employer
identification no.)
371 BEL MARIN KEYS, SUITE 210
NOVATO, CALIFORNIA 94949
(Address of principal executive offices)
WILLIAM E. BLISS
CELLEGY PHARMACEUTICALS, INC.
371 BEL MARIN KEYS, SUITE 210
NOVATO, CALIFORNIA 94949
(415) 382-6770
(Name, address and telephone number of agent for service)
COPIES TO:
C. Kevin Kelso, Esq.
Fenwick & West
Two Palo Alto Square
Palo Alto, California 94306
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
- -------------------------------------------- --------------- ---------------------- --------------------- ------------------
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM
TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
TITLE OF SECURITIES TO BE REGISTERED REGISTERED PER SHARE PRICE REGISTRATION FEE
- -------------------------------------------- --------------- ---------------------- --------------------- ------------------
<S> <C> <C> <C> <C>
Common Stock, no par value 300,000 $8.94 (2) $2,682,000.00 (2) $924.83
- -------------------------------------------- --------------- ---------------------- --------------------- ------------------
<FN>
(1) Includes shares issuable upon the exercise of outstanding options and
issuable upon the exercise of awards not yet granted.
(2) Estimated as of June 10, 1996 pursuant to Rules 457(c) and 457(h)(1)
solely for the purpose of calculating the registration fee.
</FN>
</TABLE>
This Registration Statement, including exhibits, consists of 20
sequentially numbered pages. The Index to Exhibits appears on sequentially
numbered page 7.
1
<PAGE>
CELLEGY PHARMACEUTICALS, INC.
REGISTRATION STATEMENT ON FORM S-8
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission (the "Commission") are incorporated herein by reference:
(a) The Registrant's Annual Report on Form 10-KSB for the year
ending December 31, 1995;
(b) All other reports filed pursuant to Section 13(a) or 15(a) of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), since the end of the fiscal year covered by
Registrant's documents referred to in paragraph (a) above; and
(c) The description of the Registrant's Common Stock contained in
the Registrant's Registration Statement on Form 8-A filed on
July 5, 1995 with the Commission under Section 12(g) of the
Exchange Act including any amendment or report filed for the
purpose of updating such description.
All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all securities registered hereby
have been sold or which deregisters all securities then remaining unsold, shall
be deemed incorporated by reference herein and to be a part hereof from the date
of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Amended and Restated Articles of Incorporation
(the "Restated Articles") include a provision that eliminates the personal
liability of its directors to the Registrant and its shareholders for monetary
damages for breach of the directors' fiduciary duties to the maximum extent
permitted under California law. This limitation has no effect on a director's
liability (i) for acts or omissions that involve intentional misconduct or a
knowing and culpable violation of law, (ii) for acts or omissions that a
director believes to be contrary to the best interests of the Registrant or its
shareholders or that involve the absence of good faith on the part of the
director, (iii) for any transaction from which a director derived an improper
personal benefit, (iv) for acts or omissions that show a reckless disregard for
the director's duty to the Registrant or its shareholders in circumstances in
which the director was aware, or should have been aware, in the ordinary course
of performing a director's duties, of a risk of a serious injury to the
Registrant or its shareholders, (v) for acts or omissions that constitute an
unexcused pattern of inattention that amounts to an abdication of the director's
duty to the Registrant or its shareholders, (vi) under Section 310 of the
California Corporations Code (the "California Code") (concerning contracts or
transactions between the Registrant and a director) or (vii) under Section 316
of
2
<PAGE>
the California Code (concerning directors' liability for improper dividends,
loans and guarantees). The provision does not extend to acts or omissions of a
director in his capacity as an officer. Further, the provision has no effect on
claims arising under federal or state securities laws and will not affect the
availability of injunctions and other equitable remedies available to the
Registrant's shareholders for any violation of a director's fiduciary duty to
the Registrant or its shareholders.
The Restated Articles also include an authorization for the
Registrant to indemnify its agents (as defined in Section 317 of the California
Code), through bylaws provisions, by agreement or otherwise, to the fullest
extent permitted by law. Pursuant to this latter provision, the Registrant's
Bylaws provide for indemnification of the Registrant's directors, officers and
employees. Indemnification may only be authorized by a majority of Registrant's
directors or shareholders or by order of a court, unless the agent has been
successful on the merits. In addition, the Registrant's policy is to enter into
indemnification agreements with each of its officers and directors. These
indemnification agreements provide that directors and officers will be
indemnified and held harmless to the fullest extent permitted by law. These
agreements, together with the Restated Articles, may require the Registrant,
among other things, to indemnify such directors, officers and employees against
certain liabilities that may arise by reason of their status or service as
directors or officers (other than liabilities resulting from willful misconduct
of a culpable nature), to advance expenses to them as they are incurred,
provided that they undertake to repay the amount advanced if it is ultimately
determined by a court that they are not entitled to indemnification, and to
obtain directors' and officers' insurance if available on reasonable terms. The
Registrant currently carries director and officer liability insurance.
Section 317 of the California Code makes provisions 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 of expenses incurred) arising under the
Securities Act.
The Underwriting Agreement referred to below sets forth certain
provisions with respect to the indemnification of the Registrant and certain
directors, officers, and controlling persons against certain losses and
liabilities, including certain liabilities under the Securities Act.
The Amended and Restated Registration Rights Agreement dated
April 10, 1992, entered into by and among the Registrant and various investors,
and the Amended and Restated Registration Rights Agreement dated February 10,
1995, entered into by and among the Registrant and various investors provide for
cross indemnification of certain holders of Registrant's securities, and of
Registrant and its officers and directors for certain liabilities existing under
the Securities Act and otherwise.
The Registrant also maintains a director and officer liability
policy.
Reference is made to the following documents filed as exhibits
to Registrant's Registration Statement on Form SB-2 (File No. 33-93288-LA)
declared effective by the Commission on August 11, 1995 (the "Form SB-2")
regarding relevant indemnification provisions described above and elsewhere
herein:
3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
DOCUMENT NUMBER
-------- --------
<S> <C>
Form of Underwriting Agreement........................................................ 1.1
Registrant's Bylaws, as amended ...................................................... 3.3
Amended and Restated Registration Rights Agreement, dated April 10, 1992
entered into by and among the Registrant
and various investors................................................................. 10.11
Amended and Restated Registration Rights Agreement dated February 10,
1995 entered into by and among the Registrant
and various investors................................................................. 10.14
</TABLE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.01 Registrant's Amended and Restated Articles of
Incorporation (incorporated herein by reference to
Exhibit 4.01 to Registrant's Form S-8, filed with the
Commission on August 30, 1995).
4.02 Registrant's Bylaws, as amended (incorporated herein
by reference to Exhibit 3.3 to the Form SB-2).
4.03 Registrant's 1995 Equity Incentive Plan, as amended.
5.01 Opinion of Fenwick & West LLP
23.01 Consent of Fenwick & West LLP (included in Exhibit
5.01).
23.02 Consent of Ernst & Young LLP, Independent Auditors.
24.01 Power of Attorney (see page 6).
ITEM 9. UNDERTAKINGS.
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 Securities Act;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the 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 the
Registration Statement;
4
<PAGE>
(iii) 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.
Provided, however, that paragraphs (1)(i) and
(1)(ii) above do 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 Exchange
Act that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities 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.
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.
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 provisions discussed in Item 6, above, or
otherwise, the Registrant has been advised that in the opinion of the 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 hereby, 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.
EXPERTS
The financial statements of Cellegy Pharmaceuticals, Inc.
appearing in the Registrant's Annual Report on Form 10-KSB for the year ending
December 31, 1995 have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon included therein and incorporated herein by
reference. Such financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
5
<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 Novato, State of California, on the 10th day of
June, 1996.
CELLEGY PHARMACEUTICALS, INC.
By: /s/ William E. Bliss
--------------------------------------------------
William E. Bliss,
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each individual whose
signature appears below constitutes and appoints William E. Bliss, Carl R.
Thornfeldt and C. Kevin Kelso, jointly and severally, his or her true and lawful
attorneys-in-fact and agents, each with full power of substitution, for him or
her and in his or her name, place and stead, in any and all capacities, to sign
any and all amendments (including post-effective amendments) to this
Registration Statement on Form S-8, and to file the same with all exhibits
thereto and all documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she or it might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
<TABLE>
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed by the following persons on the
capacities and on the dates indicated.
<CAPTION>
SIGNATURE TITLE DATE
----------- ------- -------
<S> <C> <C>
/s/ William E. Bliss President and Chief Executive Officer, June 10, 1996
- ------------------------------------ and Director (Principal Executive Officer)
William E. Bliss
/s/ A. Richard Juelis Vice President, Finance June 10, 1995
- ------------------------------------ (Principal Financial and Accounting Officer)
A. Richard Juelis
/s/ Carl. R. Thornfeldt Director June 10, 1995
- ------------------------------------
Carl R. Thornfeldt, M.D.
/s/ Peter M. Elias Director June 10, 1995
- ------------------------------------
Peter M. Elias, M.D.
/s/ Larry J. Wells Director June 10, 1995
- ------------------------------------
Larry J. Wells
/s/ Denis R. Burger Director June 10, 1995
- ------------------------------------
Denis R. Burger, Ph.D.
/s/ Tobi B. Klar Director June 10, 1995
- ------------------------------------
Tobi B. Klar, M.D.
</TABLE>
6
<PAGE>
<TABLE>
EXHIBIT INDEX
<CAPTION>
Exhibit No. Description Page
----------- ----------- ----
<S> <C> <C>
4.01 Registrant's Amended and Restated Articles of
Incorporation (incorporated herein by
reference to Exhibit 4.01 to Registrant's
Form S-8, filed with the Commission on August
30, 1995).
4.02 Registrant's Bylaws, as amended (incorporated herein by
reference to the Form SB-2.)
4.03 Registrant's 1995 Equity Incentive Plan, as amended, and 8
related documents.
5.01 Opinion of Fenwick & West. 19
23.01 Consent of Fenwick & West (included in Exhibit 5.01).
23.02 Consent of Ernst & Young LLP, Independent Auditors. 20
24.01 Power of Attorney (see page 6).
</TABLE>
7
CELLEGY PHARMACEUTICALS, INC.
1995 EQUITY INCENTIVE PLAN
As Adopted June 26, 1995
1. PURPOSE. The purpose of this Plan is to provide incentives to
attract, retain and motivate eligible persons whose present and potential
contributions are important to the success of the Company, its Parent,
Subsidiaries and Affiliates, by offering them an opportunity to participate in
the Company's future performance through awards of Options, Restricted Stock and
Stock Bonuses. Capitalized terms not defined in the text are defined in Section
23.
2. SHARES SUBJECT TO THE PLAN.
2.1 Number of Shares Available. Subject to Sections 2.2
and 18, the total number of Shares reserved and available for grant and issuance
pursuant to this Plan will be 1,000,000 (giving effect to a reverse split of the
Company's Common Stock effective at or before the closing of the Company's
registered initial public offering of securities), less any shares which are
issued, or are issuable upon exercise of options granted pursuant to the 1992
Stock Option Plan adopted by the Company (the "PRIOR PLAN"). The pool of Shares
issuable hereunder is comprised of any Shares not subject to an option granted
pursuant to the Prior Plan plus any Shares issuable upon exercise of options
granted pursuant to the Prior Plan that expire or become unexercisable for any
reason without having been exercised in full. Upon the Effective Date (as
defined below) of this Plan, no further stock options shall be granted pursuant
to the Prior Plan. Options granted pursuant to the Prior Plan shall continue to
be governed by the terms of the Prior Plan. Subject to Sections 2.2 and 18,
Shares that: (a) are subject to issuance upon exercise of an Option but cease to
be subject to such Option for any reason other than exercise of such Option; (b)
are subject to an Award granted hereunder but are forfeited or are repurchased
by the Company at the original issue price; or (c) are subject to an Award that
otherwise terminates without Shares being issued; will again be available for
grant and issuance in connection with future Awards under this Plan. At all
times the Company shall reserve and keep available a sufficient number of Shares
as shall be required to satisfy the requirements of all outstanding Options
granted under this Plan and all other outstanding but unvested Awards granted
under this Plan.
2.2 Adjustment of Shares. In the event that the number
of outstanding Shares is changed by a stock dividend, recapitalization, stock
split, reverse stock split, subdivision, combination, reclassification or
similar change in the capital structure of the Company without consideration,
then (a) the number of Shares reserved for issuance under this Plan, (b) the
Exercise Prices of and number of Shares subject to outstanding Options, and (c)
the number of Shares subject to other outstanding Awards will be proportionately
adjusted, subject to any required action by the Board or the shareholders of the
Company and compliance with applicable securities laws; provided, however, that
fractions of a Share will not be issued but will either be replaced by a cash
payment equal to the Fair Market Value of such fraction of a Share or will be
rounded up to the nearest whole Share, as determined by the Committee.
3. ELIGIBILITY. ISOs (as defined in Section 5 below) may be
granted only to employees (including officers and directors who are also
employees) of the Company or of a Parent or Subsidiary of the Company. All other
Awards may be granted to employees, officers, directors, consultants and
advisors of the Company or any Parent, Subsidiary or Affiliate of the Company;
provided such consultants and advisors render bona fide services not in
connection with the offer and sale of securities in a capital-raising
transaction. No person will be eligible to receive more than 350,000 Shares in
any calendar year under this Plan pursuant to the grant of Awards hereunder. A
person may be granted more than one Award under this Plan.
8
<PAGE>
4. ADMINISTRATION.
4.1 Committee Authority. This Plan will be administered
by the Committee or by the Board acting as the Committee. Subject to the general
purposes, terms and conditions of this Plan, and to the direction of the Board,
the Committee will have full power to implement and carry out this Plan. Without
limitation, the Committee will have the authority to:
(a) construe and interpret this Plan, any Award Agreement
and any other agreement or document executed pursuant
to this Plan;
(b) prescribe, amend and rescind rules and regulations
relating to this Plan;
(c) select persons to receive Awards;
(d) determine the form and terms of Awards (which need not
be identical), including but not limited to, the time
or times at which Options shall be exercisable and the
extension or acceleration of any such provisions or
limitations, based in each case on such factors as the
Committee shall determine, in its sole discretion;
(e) determine the number of Shares or other consideration
subject to Awards;
(f) determine whether Awards will be granted singly, in
combination with, in tandem with, in replacement of, or
as alternatives to, other Awards under this Plan or any
other incentive or compensation plan of the Company or
any Parent, Subsidiary or Affiliate of the Company;
(g) grant waivers of Plan or Award conditions;
(h) determine the vesting, exercisability and payment of
Awards;
(i) correct any defect, supply any omission or reconcile
any inconsistency in this Plan, any Award or any Award
Agreement;
(j) determine whether an Award has been earned;
(k) make all other determinations necessary or advisable
for the administration of this Plan.
4.2 Committee Discretion. Any determination made by the
Committee with respect to any Award will be made in its sole discretion at the
time of grant of the Award or, unless in contravention of any express term of
this Plan or Award, at any later time, and such determination will be final and
binding on the Company and on all persons having an interest in any Award under
this Plan. The Committee may delegate to one or more officers of the Company the
authority to grant an Award under this Plan to Participants who are not Insiders
of the Company.
4.3 Exchange Act Requirements. During all times that
the Company is subject to Section 16 of the Exchange Act, the Company will take
appropriate steps to comply with the disinterested administration requirements
of Section 16(b) of the Exchange Act, which will consist of the appointment by
the Board of a Committee consisting of not less than two (2) members of the
Board, each of whom is a Disinterested Person.
4.4 Liability and Indemnification of the Committee. No
member of the group constituting the Committee, or any employee of the Company
to whom the Committee delegates certain administrative responsibilities, shall
be liable for any act or omission on such member's or employee's own part,
including but not limited to the exercise of any power or discretion given to
such member, or employee as delegatee, under this Plan, except for those acts or
omissions resulting from such member's or employee's own gross negligence or
willful misconduct. The Company shall indemnify each present and future member
of the group constituting the Committee and each present and future employee
delegated administrative responsibilities by such Committee against, and each
member of the group constituting the Committee or employee delegated
administrative responsibilities by such Committee shall be entitled without
further act on his or her part to indemnity from the Company for, all expenses
(including the amount of judgments or settlements approved by the Company and
made with a view to the curtailment of costs of litigation, other than amounts
paid to the Company itself) reasonably incurred by such person in connection
with or arising out of any action, suit or proceeding to the full extent
permitted by law and by the Articles of Incorporation and Bylaws of the Company.
9
<PAGE>
5. OPTIONS. The Committee may grant Options to eligible persons
and will determine whether such Options will be Incentive Stock Options within
the meaning of the Code ("ISOs") or Nonqualified Stock Options ("NQSOs"), the
number of Shares subject to the Option, the Exercise Price of the Option, the
period during which the Option may be exercised, and all other terms and
conditions of the Option, subject to the following:
5.1 Form of Option Grant. Each Option granted under
this Plan will be evidenced by an Award Agreement which will expressly identify
the Option as an ISO or an NQSO ("STOCK OPTION AGREEMENT"), and will be in such
form and contain such provisions (which need not be the same for each
Participant) as the Committee may from time to time approve, and which will
comply with and be subject to the terms and conditions of this Plan.
5.2 Date of Grant. The date of grant of an Option will
be the date on which the Committee makes the determination to grant such Option,
unless otherwise specified by the Committee. The Stock Option Agreement and a
copy of this Plan will be delivered to the Participant within a reasonable time
after the granting of the Option.
5.3 Exercise Period. Unless otherwise established by
the Committee with respect to any individual or group of individuals, an Option
will become exercisable with respect to 25% of the Shares on the first
anniversary of the Vesting Start Date (as defined below), with respect to an
additional 25% of the Shares on the second anniversary of the Vesting Start
Date, with respect to an additional 25% of the Shares on the third anniversary
of the Vesting Start Date, with respect to an additional 25% of the Shares on
the fourth anniversary of the Vesting Start Date. The Vesting Start Date is the
date of grant, or such other date as the Committee determines in its discretion.
The Committee may use its discretion to establish different vesting schedules
with respect to any individual or group of individuals. No Option will be
exercisable after the expiration of ten (10) years from the date the Option is
granted; and provided further that no ISO granted to a person who directly or by
attribution owns more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or of any Parent or Subsidiary of the
Company ("TEN PERCENT SHAREHOLDER") will be exercisable after the expiration of
five (5) years from the date the ISO is granted. The Committee also may provide
for the exercise of Options to become exercisable at one time or from time to
time, periodically or otherwise, in such number of Shares or percentage of
Shares as the Committee determines. Options granted to Insiders, however, may
not be exercisable, in whole or in part, at any time prior to the six-month
anniversary of the date of grant, unless the Committee determines that the
foregoing provision is not necessary to comply with the provisions of Rule 16b-3
as promulgated under Section 16 of the Exchange Act or that such Rule is not
applicable to the Plan or the Participant.
5.4 Exercise Price. The Exercise Price of an NQSO will
be determined by the Committee when the Option is granted; provided, however,
that if expressly required by one or more state securities authorities or laws
as a condition of issuing Awards and Shares in compliance with the securities
laws of such state, the exercise price of an NQSO shall not be less than 85% of
the Fair Market Value of the Shares on the date of grant and the Exercise Price
of any NQSO granted to a Ten Percent Shareholder shall not be less than 110% of
the Fair Market Value of the Shares on the date of grant. The Exercise Price of
an ISO will be not less than 100% of the Fair Market Value of the Shares on the
date of grant and the Exercise Price of any ISO granted to a Ten Percent
Shareholder will not be less than 110% of the Fair Market Value of the Shares on
the date of grant. Payment for the Shares purchased may be made in accordance
with Section 8 of this Plan.
5.5 Method of Exercise. Options may be exercised only
by delivery to the Company of a written stock option exercise agreement (the
"EXERCISE AGREEMENT") in a form approved by the Committee (which need not be the
same for each Participant), stating the number of Shares being purchased, the
restrictions imposed on the Shares purchased under such Exercise Agreement, if
any, and such representations and agreements regarding Participant's investment
intent and access to information and other matters, if any, as may be required
or desirable by the Company to comply with applicable securities laws, together
with payment in full of the Exercise Price for the number of Shares being
purchased.
5.6 Termination. Notwithstanding the exercise periods
set forth in the Stock Option Agreement, exercise of an Option will always be
subject to the following:
(a) If the Participant is Terminated for any reason except
death or Disability, then the Participant may exercise
such Participant's Options only to the extent that such
Options would have been exercisable upon the
Termination Date no later than three (3) months after
the Termination Date (or such shorter or longer time
period not exceeding five (5) years as may be
determined by the Committee, with any exercise beyond
three (3) months after the Termination Date deemed to
be an NQSO), but in any event, no later than the
expiration date of the Options.
(b) If the Participant is Terminated because of
Participant's death or Disability (or the Participant
dies within three (3) months after a Termination other
than because of Participant's death or Disability),
then Participant's Options may be exercised only to the
extent that such Options would have been
10
<PAGE>
exercisable by Participant on the Termination Date and
must be exercised by Participant (or Participant's
legal representative or authorized assignee) no later
than twelve (12) months after the Termination Date (or
such shorter or longer time period not exceeding five
(5) years as may be determined by the Committee, with
any such exercise beyond (a) three (3) months after the
Termination Date when the Termination is for any reason
other than the Participant's death or disability other
than defined in Section 22(e)(3) of the Code, or (b)
twelve (12) months after the Termination Date when the
Termination is for Participant's death or Disability,
deemed to be an NQSO), but in any event no later than
the expiration date of the Options.
5.7 Limitations on Exercise. The Committee may specify
a reasonable minimum number of Shares that may be purchased on any exercise of
an Option, provided that such minimum number will not prevent Participant from
exercising the Option for the full number of Shares for which it is then
exercisable.
5.8 Limitations on ISOs. The aggregate Fair Market
Value (determined as of the date of grant) of Shares with respect to which ISOs
are exercisable for the first time by a Participant during any calendar year
(under this Plan or under any other incentive stock option plan of the Company
or any Affiliate, Parent or Subsidiary of the Company) will not exceed $100,000.
If the Fair Market Value of Shares on the date of grant with respect to which
ISOs are exercisable for the first time by a Participant during any calendar
year exceeds $100,000, then the Options for the first $100,000 worth of Shares
to become exercisable in such calendar year will be ISOs and the Options for the
amount in excess of $100,000 that become exercisable in that calendar year will
be NQSOs. In the event that the Code or the regulations promulgated thereunder
are amended after the Effective Date of this Plan to provide for a different
limit on the Fair Market Value of Shares permitted to be subject to ISOs, such
different limit will be automatically incorporated herein and will apply to any
Options granted after the effective date of such amendment.
5.9 Modification, Extension or Renewal. The Committee
may modify, extend or renew outstanding Options and authorize the grant of new
Options in substitution therefor, provided that any such action may not, without
the written consent of a Participant, impair any of such Participant's rights
under any Option previously granted. Any outstanding ISO that is modified,
extended, renewed or otherwise altered will be treated in accordance with
Section 424(h) of the Code. The Committee may reduce the Exercise Price of
outstanding Options without the consent of Participants effected by a written
notice to them; provided, however, that the Exercise Price may not be reduced
below the minimum Exercise Price that would be permitted under Section 5.4 of
this Plan for Options granted on the date the action is taken to reduce the
Exercise Price.
5.10 No Disqualification. Notwithstanding any other
provision in this Plan, no term of this Plan relating to ISOs will be
interpreted, amended or altered, nor will any discretion or authority granted
under this Plan be exercised, so as to disqualify this Plan under Section 422 of
the Code or, without the consent of the Participant affected, to disqualify any
ISO under Section 422 of the Code.
6. RESTRICTED STOCK. A Restricted Stock Award is an offer by the
Company to sell to an eligible person Shares that are subject to restrictions.
The Committee will determine to whom an offer will be made, the number of Shares
the person may purchase, the price to be paid (the "PURCHASE PRICE"), the
restrictions to which the Shares will be subject, if any, and all other terms
and conditions of the Restricted Stock Award, subject to the following:
6.1 Form of Restricted Stock Award. All purchases under
a Restricted Stock Award made pursuant to this Plan will be evidenced by an
Award Agreement ("RESTRICTED STOCK PURCHASE AGREEMENT") that will be in such
form (which need not be the same for each Participant) as the Committee will
from time to time approve, and will comply with and be subject to the terms and
conditions of this Plan. The offer of Restricted Stock will be accepted by the
Participant's execution and delivery of the Restricted Stock Purchase Agreement
and full payment for the Shares to the Company within thirty (30) days from the
date the Restricted Stock Purchase Agreement is delivered to the person. If such
person does not execute and deliver the Restricted Stock Purchase Agreement
along with full payment for the Shares to the Company within thirty (30) days,
then the offer will terminate, unless otherwise determined by the Committee. The
Committee, however, may provide that, if required under Rule 16b-3 promulgated
under Section 16 of the Exchange Act, Restricted Stock Awards granted to
Insiders shall not become exercisable until six months and one day after the
grant date and shall then be exercisable for 10 trading days at the Purchase
Price specified by the Committee in accordance with Section 6.2.
6.2 Purchase Price. The Purchase Price of Shares sold
pursuant to a Restricted Stock Award will be determined by the Committee;
provided, that if expressly required by any state securities authorities as a
condition of the offer and sale of Shares subject to Restricted Stock Awards in
compliance with the securities laws of such state, the Purchase Price will be at
least 85% of the Fair Market Value of the Shares on the date the Restricted
Stock Award is granted,
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except in the case of a sale to a Ten Percent Shareholder, in which case the
Purchase Price will be 100% of the Fair Market Value. Payment of the Purchase
Price may be made in accordance with Section 8 of this Plan.
6.3 Restrictions. Restricted Stock Awards will be
subject to such restrictions (if any) as the Committee may impose. The Committee
may provide for the lapse of such restrictions in installments and may
accelerate or waive such restrictions, in whole or part, based on length of
service, performance or such other factors or criteria as the Committee may
determine.
7. STOCK BONUSES.
7.1 Awards of Stock Bonuses. A Stock Bonus is an award
of Shares (which may consist of Restricted Stock) for services rendered to the
Company or any Parent, Subsidiary or Affiliate of the Company. A Stock Bonus may
be awarded for past services already rendered to the Company, or any Parent,
Subsidiary or Affiliate of the Company (provided that the Participant pays the
Company the par value, if any, of the Shares awarded by such Stock Bonus in
cash) pursuant to an Award Agreement (the "STOCK BONUS AGREEMENT") that will be
in such form (which need not be the same for each Participant) as the Committee
will from time to time approve, and will comply with and be subject to the terms
and conditions of this Plan. A Stock Bonus may be awarded upon satisfaction of
such performance goals as are set out in advance in the Participant's individual
Award Agreement (the "PERFORMANCE STOCK BONUS AGREEMENT") that will be in such
form (which need not be the same for each Participant) as the Committee will
from time to time approve, and will comply with and be subject to the terms and
conditions of this Plan. Stock Bonuses may vary from Participant to Participant
and between groups of Participants, and may be based upon the achievement of the
Company, Parent, Subsidiary or Affiliate and/or individual performance factors
or upon such other criteria as the Committee may determine.
7.2 Terms of Stock Bonuses. The Committee will
determine the number of Shares to be awarded to the Participant and whether such
Shares will be Restricted Stock. If the Stock Bonus is being earned upon the
satisfaction of performance goals pursuant to a Performance Stock Bonus
Agreement, then the Committee will determine: (a) the nature, length and
starting date of any period during which performance is to be measured (the
"PERFORMANCE PERIOD") for each Stock Bonus; (b) the performance goals and
criteria to be used to measure the performance, if any; (c) the number of Shares
that may be awarded to the Participant; and (d) the extent to which such Stock
Bonuses have been earned. Performance Periods may overlap and Participants may
participate simultaneously with respect to Stock Bonuses that are subject to
different Performance Periods and different performance goals and other
criteria. The number of Shares may be fixed or may vary in accordance with such
performance goals and criteria as may be determined by the Committee. The
Committee may adjust the performance goals applicable to the Stock Bonuses to
take into account changes in law and accounting or tax rules and to make such
adjustments as the Committee deems necessary or appropriate to reflect the
impact of extraordinary or unusual items, events or circumstances to avoid
windfalls or hardships.
7.3 Form of Payment. The earned portion of a Stock
Bonus may be paid currently or on a deferred basis with such interest or
dividend equivalent, if any, as the Committee may determine. Payment may be made
in the form of cash, whole Shares, including Restricted Stock, or a combination
thereof, either in a lump sum payment or in installments, all as the Committee
will determine.
7.4 Termination During Performance Period. If a
Participant is Terminated during a Performance Period for any reason, then such
Participant will be entitled to payment (whether in Shares, cash or otherwise)
with respect to the Stock Bonus only to the extent earned as of the date of
Termination in accordance with the Performance Stock Bonus Agreement, unless the
Committee determines otherwise.
8. PAYMENT FOR SHARE PURCHASES.
8.1 Payment. Payment for Shares purchased pursuant to
this Plan may be made in cash (by check) or, where expressly approved for the
Participant by the Committee and where permitted by law:
(a) by cancellation of indebtedness of the Company to the
Participant;
(b) by surrender of shares that either: (1) have been owned
by Participant for more than six (6) months and have
been paid for within the meaning of SEC Rule 144 (and,
if such shares were purchased from the Company by use
of a promissory note, such note has been fully paid
with respect to such shares); or (2) were obtained by
Participant in the public market;
(c) by tender of a full recourse promissory note having
such terms as may be approved by the Committee and
bearing interest at a rate sufficient to avoid
imputation of income under Sections 483
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and 1274 of the Code; provided, however, that
Participants who are not employees or directors of the
Company will not be entitled to purchase Shares with a
promissory note unless the note is adequately secured
by collateral other than the Shares; provided, further,
that the portion of the Purchase Price equal to the par
value of the Shares, if any, must be paid in cash;
(d) by waiver of compensation due or accrued to the
Participant for services rendered; provided, further,
that the portion of the Purchase Price equal to the par
value of the Shares, if any, must be paid in cash;
(e) with respect only to purchases upon exercise of an
Option, and provided that a public market for the
Company's stock exists:
(1) through a "same day sale" commitment from the
Participant and a broker-dealer that is a
member of the National Association of
Securities Dealers (an "NASD DEALER") whereby
the Participant irrevocably elects to exercise
the Option and to sell a portion of the Shares
so purchased to pay for the Exercise Price,
and whereby the NASD Dealer irrevocably
commits upon receipt of such Shares to forward
the Exercise Price directly to the Company; or
(2) through a "margin" commitment from the
Participant and a NASD Dealer whereby the
Participant irrevocably elects to exercise the
Option and to pledge the Shares so purchased
to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in
the amount of the Exercise Price, and whereby
the NASD Dealer irrevocably commits upon
receipt of such Shares to forward the Exercise
Price directly to the Company; or
(f) by any combination of the foregoing.
8.2 Loan Guarantees. The Committee may help the
Participant pay for Shares purchased under this Plan by authorizing a guarantee
by the Company of a third-party loan to the Participant.
9. WITHHOLDING TAXES.
9.1 Withholding Generally. Whenever Shares are to be
issued in satisfaction of Awards granted under this Plan, the Company may
require the Participant to remit to the Company an amount sufficient to satisfy
federal, state and local withholding tax requirements prior to the delivery of
any certificate or certificates for such Shares. Whenever, under this Plan,
payments in satisfaction of Awards are to be made in cash, such payment will be
net of an amount sufficient to satisfy federal, state, and local withholding tax
requirements.
9.2 Stock Withholding. When, under applicable tax laws,
a Participant incurs tax liability in connection with the exercise or vesting of
any Award that is subject to tax withholding and the Participant is obligated to
pay the Company the amount required to be withheld, the Committee may allow the
Participant to satisfy the minimum withholding tax obligation by electing to
have the Company withhold from the Shares to be issued that number of Shares
having a Fair Market Value equal to the minimum amount required to be withheld,
determined on the date that the amount of tax to be withheld is to be determined
(the "TAX DATE"). All elections by a Participant to have Shares withheld for
this purpose will be made in writing in a form acceptable to the Committee and
will be subject to the following restrictions:
(a) the election must be made on or prior to the applicable
Tax Date;
(b) once made, then except as provided below, the election
will be irrevocable as to the particular Shares as to
which the election is made;
(c) all elections will be subject to the consent or
disapproval of the Committee;
(d) if the Participant is an Insider and if the Company is
subject to Section 16(b) of the Exchange Act: (1) the
election may not be made within six (6) months of the
date of grant of the Award, except as otherwise
permitted by SEC Rule 16b-3(e) under the Exchange Act,
and (2) either (A) the election to use stock
withholding must be irrevocably made at least six (6)
months prior to the Tax Date (although such election
may be revoked at any time at least six (6) months
prior to the Tax Date) or (B) the exercise of the
Option or election to use stock withholding must be
made in the ten (10) day
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period beginning on the third day following the release
of the Company's quarterly or annual summary statement
of sales or earnings; and
(e) in the event that the Tax Date is deferred until six
(6) months after the delivery of Shares under Section
83(b) of the Code, the Participant will receive the
full number of Shares with respect to which the
exercise occurs, but such Participant will be
unconditionally obligated to tender back to the Company
the proper number of Shares on the Tax Date.
10. PRIVILEGES OF STOCK OWNERSHIP.
10.1 Voting and Dividends. No Participant will have any
of the rights of a shareholder with respect to any Shares until the Shares are
issued to the Participant. After Shares are issued to the Participant, the
Participant will be a shareholder and have all the rights of a shareholder with
respect to such Shares, including the right to vote and receive all dividends or
other distributions made or paid with respect to such Shares; provided, that if
such Shares are Restricted Stock, then any new, additional or different
securities the Participant may become entitled to receive with respect to such
Shares by virtue of a stock dividend, stock split or any other change in the
corporate or capital structure of the Company will be subject to the same
restrictions as the Restricted Stock; provided, further, that the Participant
will have no right to retain such stock dividends or stock distributions with
respect to Shares that are repurchased at the Participant's original Purchase
Price pursuant to Section 12.
10.2 Financial Statements. If expressly required by any
state securities authorities as a condition of the offer and issuance of Awards
in compliance with the securities laws of such state, the Company shall provide
to each Participant during the period such Participant holds an outstanding
Award a copy of the financial statements of the Company as prepared either by
the Company or independent certified public accountants of the Company. Such
financial statements shall be delivered as soon as practicable following the end
of the Company's fiscal year during the period Awards are outstanding; provided,
however, the Company will not be required to provide such financial statements
to Participants whose services in connection with the Company assure them access
to equivalent information.
11. TRANSFERABILITY. Awards granted under this Plan, and any
interest therein, will not be transferable or assignable by Participant, and may
not be made subject to execution, attachment or similar process, otherwise than
by will or by the laws of descent and distribution or as consistent with the
specific Plan and Award Agreement provisions relating thereto. During the
lifetime of the Participant an Award will be exercisable only by the
Participant, and any elections with respect to an Award, may be made only by the
Participant.
12. RESTRICTIONS ON SHARES. At the discretion of the Committee,
the Company may reserve to itself and/or its assignee(s) in the Award Agreement
a right to repurchase a portion of or all Shares that are not "Vested" (as
defined in the Stock Option Agreement) held by a Participant following such
Participant's Termination at any time within ninety (90) days after the later of
Participant's Termination Date and the date Participant purchases Shares under
this Plan, for cash and/or cancellation of purchase money indebtedness, at the
Participant's original Purchase Price, provided, that the right to repurchase
lapses at the rate of at least 20% per year over five (5) years from the date
the Shares were purchased (or from the date of grant of options in the case of
Shares obtained pursuant to a Stock Option Agreement and Stock Option Exercise
Agreement), and if the right to repurchase is assignable, the assignee must pay
the Company, upon assignment of the right to repurchase, cash equal to the
excess of the Fair Market Value of the Shares over the original Purchase Price.
13. CERTIFICATES. All certificates for Shares or other
securities delivered under this Plan will be subject to such stock transfer
orders, legends and other restrictions as the Committee may deem necessary or
advisable, including restrictions under any applicable federal, state or foreign
securities law, or any rules, regulations and other requirements of the SEC or
any stock exchange or automated quotation system upon which the Shares may be
listed or quoted.
14. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a
Participant's Shares, the Committee may require the Participant to deposit all
certificates representing Shares, together with stock powers or other
instruments of transfer approved by the Committee, appropriately endorsed in
blank, with the Company or an agent designated by the Company to hold in escrow
until such restrictions have lapsed or terminated, and the Committee may cause a
legend or legends referencing such restrictions to be placed on the
certificates. Any Participant who is permitted to execute a promissory note as
partial or full consideration for the purchase of Shares under this Plan will be
required to pledge and deposit with the Company all or part of the Shares so
purchased as collateral to secure the payment of Participant's obligation to the
Company under the promissory note; provided, however, that the Committee may
require or accept other or additional forms of collateral to secure the payment
of such obligation and, in any event, the Company will have full recourse
against the Participant under the promissory note notwithstanding any pledge of
the Participant's Shares or other collateral. In connection
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with any pledge of the Shares, Participant will be required to execute and
deliver a written pledge agreement in such form as the Committee will from time
to time approve. The Shares purchased with the promissory note may be released
from the pledge on a pro rata basis as the promissory note is paid.
15. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any
time or from time to time, authorize the Company, with the consent of the
respective Participants, to issue new Awards in exchange for the surrender and
cancellation of any or all outstanding Awards. Notwithstanding the foregoing,
the Committee may at any time buy from a Participant an Award previously granted
with payment in cash, Shares (including Restricted Stock) or other
consideration, based on such terms and conditions as the Committee and the
Participant may agree. The Committee may at any time cancel Options upon payment
to each Participant in cash, with respect to each Option to the extent then
exercisable, of any amount which, in the absolute discretion of the Committee,
is determined to be equivalent to any excess of the market value (at the
effective time of such event) of the consideration that such Participant would
have received if the Option had been exercised before the effective time over
the Exercise Price of the Option.
16. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award
will not be effective unless such Award is in compliance with all applicable
federal and state securities laws, rules and regulations of any governmental
body, and the requirements of any stock exchange or automated quotation system
upon which the Shares may then be listed or quoted, as they are in effect on the
date of grant of the Award and also on the date of exercise or other issuance.
Notwithstanding any other provision in this Plan, the Company will have no
obligation to issue or deliver certificates for Shares under this Plan prior to:
(a) obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable; and/or (b) completion of any registration
or other qualification of such Shares under any state or federal law or ruling
of any governmental body that the Company determines to be necessary or
advisable. The Company will be under no obligation to register the Shares with
the SEC or to effect compliance with the registration, qualification or listing
requirements of any state securities laws, stock exchange or automated quotation
system, and the Company will have no liability for any inability or failure to
do so.
17. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Award
granted under this Plan will confer or be deemed to confer on any Participant
any right to continue in the employ of, or to continue any other relationship
with, the Company or any Parent, Subsidiary or Affiliate of the Company or limit
in any way the right of the Company or any Parent, Subsidiary or Affiliate of
the Company to terminate Participant's employment or other relationship at any
time, with or without cause.
18. CORPORATE TRANSACTIONS.
18.1 Assumption or Replacement of Awards by Successor.
In the event of (a) a dissolution or liquidation of the Company, (b) a merger or
consolidation in which the Company is not the surviving corporation (other than
a merger or consolidation with a wholly-owned subsidiary, a reincorporation of
the Company in a different jurisdiction, or other transaction in which there is
no substantial change in the shareholders of the Company or their relative stock
holdings and the Awards granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption will be binding on all
Participants), (c) a merger in which the Company is the surviving corporation
but after which the shareholders of the Company (other than any shareholder
which merges (or which owns or controls another corporation which merges) with
the Company in such merger) cease to own their shares or other equity interests
in the Company, (d) the sale of substantially all of the assets of the Company,
or (e) any other transaction which qualifies as a "corporate transaction" under
Section 424(a) of the Code wherein the shareholders of the Company give up all
of their equity interest in the Company (except for the acquisition, sale or
transfer of all or substantially all of the outstanding shares of the Company
from or by the shareholders of the Company), any or all outstanding Awards may
be assumed, converted or replaced by the successor corporation (if any), which
assumption, conversion or replacement will be binding on all Participants. In
the alternative, the successor corporation may substitute equivalent Awards or
provide substantially similar consideration to Participants as was provided to
shareholders (after taking into account the existing provisions of the Awards).
The successor corporation may also issue, in place of outstanding Shares of the
Company held by the Participant, substantially similar shares or other property
subject to repurchase restrictions no less favorable to the Participant. In the
event such successor corporation (if any) refuses to assume or substitute
Options, as provided above, pursuant to a transaction described in this
Subsection 18.1, such Options shall be exercisable and expire on such
transaction at such time and on such conditions as the Board will determine.
18.2 Other Treatment of Awards. Subject to any greater
rights granted to Participants under the foregoing provisions of this Section
18, in the event of the occurrence of any transaction described in Section 18.1,
any outstanding Awards will be treated as provided in the applicable agreement
or plan of merger, consolidation, dissolution, liquidation, sale of assets or
other "corporate transaction."
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18.3 Assumption of Awards by the Company. The Company,
from time to time, also may substitute or assume outstanding awards granted by
another company, whether in connection with an acquisition of such other company
or otherwise, by either; (a) granting an Award under this Plan in substitution
of such other company's award; or (b) assuming such award as if it had been
granted under this Plan if the terms of such assumed award could be applied to
an Award granted under this Plan. Such substitution or assumption will be
permissible if the holder of the substituted or assumed award would have been
eligible to be granted an Award under this Plan if the other company had applied
the rules of this Plan to such grant. In the event the Company assumes an award
granted by another company, the terms and conditions of such award will remain
unchanged (except that the exercise price and the number and nature of Shares
issuable upon exercise of any such option will be adjusted appropriately
pursuant to Section 424(a) of the Code). In the event the Company elects to
grant a new Option rather than assuming an existing option, such new Option may
be granted with a similarly adjusted Exercise Price.
19. ADOPTION AND SHAREHOLDER APPROVAL. This Plan will become
effective on the closing of the Company's registered initial public offering of
securities (the "EFFECTIVE DATE"); provided, however, that if the Effective Date
does not occur on or before December 31, 1995, this Plan and any Options granted
hereunder will terminate as of December 31, 1995 having never become effective.
This Plan shall be approved by the shareholders of the Company (excluding Shares
issued pursuant to this Plan), consistent with applicable laws, within twelve
(12) months before or after the date this Plan is adopted by the Board. Upon the
Effective Date, the Board may grant Awards pursuant to this Plan; provided,
however, that: (a) no Option may be exercised prior to initial shareholder
approval of this Plan; (b) no Option granted pursuant to an increase in the
number of Shares subject to this Plan approved by the Board will be exercised
prior to the time such increase has been approved by the shareholders of the
Company; and (c) in the event that shareholder approval of such increase is not
obtained within the time period provided herein, all Awards granted hereunder
will be canceled, any Shares issued pursuant to any Award will be canceled, and
any purchase of Shares hereunder will be rescinded. So long as the Company is
subject to Section 16(b) of the Exchange Act, the Company will comply with the
requirements of SEC Rule 16b-3 promulgated thereunder (or its successor), as
amended, with respect to shareholder approval.
20. TERM OF PLAN. Unless earlier terminated as provided herein,
this Plan will terminate ten (10) years from the date this Plan is adopted by
the Board or, if earlier, the date of shareholder approval.
21. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time
terminate or amend this Plan in any respect, including without limitation
amendment of any form of Award Agreement or instrument to be executed pursuant
to this Plan; provided, however, that the Board will not, without the approval
of the shareholders of the Company, amend this Plan in any manner that requires
such shareholder approval pursuant to the Code or the regulations promulgated
thereunder as such provisions apply to ISO plans or (if the Company is subject
to the Exchange Act or Section 16(b) of the Exchange Act) pursuant to the
Exchange Act or SEC Rule 16b-3 promulgated thereunder (or its successor), as
amended, respectively.
22. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this
Plan by the Board, the submission of this Plan to the shareholders of the
Company for approval, nor any provision of this Plan will be construed as
creating any limitations on the power of the Board to adopt such additional
compensation arrangements as it may deem desirable, including, without
limitation, the granting of stock options and bonuses otherwise than under this
Plan, and such arrangements may be either generally applicable or applicable
only in specific cases.
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EXHIBIT 1
23. DEFINITIONS. As used in this Plan, the following terms will
have the following meanings:
"AFFILIATE" means any corporation that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, another corporation, where "control" (including
the terms "controlled by" and "under common control with") means the possession,
direct or indirect, of the power to cause the direction of the management and
policies of the corporation, whether through the ownership of voting securities,
by contract or otherwise.
"AWARD" means any award under this Plan, including any
Option, Restricted Stock or Stock Bonus.
"AWARD AGREEMENT" means, with respect to each Award,
the signed written agreement between the Company and the Participant setting
forth the terms and conditions of the Award.
"BOARD" means the Board of Directors of the Company.
"CODE" means the Internal Revenue Code of 1986, as
amended.
"COMMITTEE" means the committee appointed by the Board
to administer this Plan, or if no such committee is appointed, the Board.
"COMPANY" means Cellegy Pharmaceuticals, Inc. a
corporation organized under the laws of the State of California, or any
successor corporation.
"DISABILITY" means a disability, whether temporary or
permanent, partial or total, as determined by the Committee.
"DISINTERESTED PERSON" means a director who has not,
during the period that person is a member of the Committee and for one year
prior to commencing service as a member of the Committee, been granted or
awarded equity securities pursuant to this Plan or any other plan of the Company
or any Parent, Subsidiary or Affiliate of the Company, except in accordance with
the requirements set forth in Rule 16b-3(c)(2)(i) (and any successor regulation
thereto) as promulgated by the SEC under Section 16(b) of the Exchange Act, as
such rule is amended from time to time and as interpreted by the SEC.
"EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.
"EXERCISE PRICE" means the price at which a holder of
an Option may purchase the Shares issuable upon exercise of the Option.
"FAIR MARKET VALUE" means, as of any date, the value of
a share of the Company's Common Stock determined by the Board in its sole
discretion, exercised in good faith; provided, however, that if the Common Stock
of the Company is quoted on the Small Cap Market of the National Association of
Securities Dealers Automated Quotation System or is regularly quoted by a
recognized securities dealer, and selling prices are reported, the Fair Market
Value per share shall be the closing sales price for such stock or the closing
bid if no sales were reported, as quoted on such system or by such dealer, for
the date the value is to be determined (or if there are not sales for such date,
then for the last preceding business day on which there were sales); provided,
however, that if the Common Stock of the Company is listed on any established
stock exchange or a national market system, including without limitation the
National Market System of the National Association of Securities Dealers
Automated Quotation System, the Fair Market Value per share 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 largest such exchange) for the date
the value is to be determined (or if there are not sales for such date, then for
the last preceding business day on which there were sales), as reported in the
Wall Street Journal or similar publication.
"INSIDER" means an officer or director of the Company
or any other person whose transactions in the Company's Common Stock are subject
to Section 16 of the Exchange Act.
"OPTION" means an award of an option to purchase Shares
pursuant to Section 5.
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"PARENT" means any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company, if at the time of
the granting of an Award under this Plan, each of such corporations other than
the Company owns stock possessing 50% or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.
"PARTICIPANT" means a person who receives an Award
under this Plan.
"PLAN" means this Cellegy Pharmaceutical, Inc. 1995
Equity Incentive Plan, as amended from time to time.
"RESTRICTED STOCK AWARD" means an award of Shares
pursuant to Section 6.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as
amended.
"SHARES" means shares of the Company's Common Stock
reserved for issuance under this Plan, as adjusted pursuant to Sections 2 and
18, and any successor security.
"STOCK BONUS" means an award of Shares, or cash in lieu
of Shares, pursuant to Section 7.
"SUBSIDIARY" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company if, at
the time of granting of the Award, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
"TERMINATION" or "TERMINATED" means, for purposes of
this Plan with respect to a Participant, that the Participant has for any reason
ceased to provide services as an employee, director, consultant or advisor to
the Company or a Parent, Subsidiary or Affiliate of the Company, except in the
case of sick leave, military leave, or any other leave of absence approved by
the Committee, provided that such leave is for a period of not more than ninety
(90) days, or reinstatement upon the expiration of such leave is guaranteed by
contract or statute. The Committee will have sole discretion to determine
whether a Participant has ceased to provide services and the effective date on
which the Participant ceased to provide services (the "TERMINATION DATE").
18
EXHIBIT 5.01
June 12, 1996
Cellegy Pharmaceuticals, Inc.
371 Bel Marin Keys, Suite 210
Novato, CA 94949
Gentlemen/Ladies:
At your request, we have examined the Registration Statement on Form
S-8 (the "Registration Statement") to be filed by you with the Securities and
Exchange Commission on or about June 13, 1996 in connection with the
registration under the Securities Act of 1933, as amended, of 300,000 shares of
your Common Stock (the "Stock") subject to issuance by you upon the exercise of
stock options, stock bonuses or restricted stock awards under your 1995 Equity
Incentive Plan (the "1995 Plan").
As your counsel, we have examined the proceedings taken by you in
connection with the adoption and amendment of the 1995 Plan and the forms of
stock option, stock purchase and stock bonus agreements thereunder.
It is our opinion that the 300,000 shares of Stock that may be issued
and sold by you upon the exercise of stock options, stock bonuses or restricted
stock awards granted or to be granted under the 1995 Plan, when issued and sold
in the manner referred to in the applicable Plan and the applicable Prospectus
associated with such Plan, will be legally issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to all references to us, if any, in the
Registration Statement and any amendments thereto.
Very truly yours,
FENWICK & WEST LLP
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EXHIBIT 23.02
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-8) pertaining to the 1995 Equity Incentive Plan
of Cellegy Pharmaceuticals, Inc. and to the incorporation by reference therein
of our report dated March 11, 1996, with respect to the financial statements of
Cellegy Pharmaceuticals, Inc., included in its Annual Report (Form 10-KSB),
filed with the Securities and Exchange Commission for the year ended December
31, 1995.
Walnut Creek, California
June 12, 1996.
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