<PAGE>
As filed with the Securities and Exchange Commission on March 20, 2000
Registration No. 333-_____________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CREDENCE SYSTEMS CORPORATION
(Exact name of issuer as specified in its charter)
DELAWARE 94-2878499
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
215 FOURIER AVENUE
FREMONT, CALIFORNIA 94539
(Address of principal executive offices) (Zip Code)
CREDENCE SYSTEMS CORPORATION
1993 STOCK OPTION PLAN
(Full title of the plans)
DR. GRAHAM J. SIDDALL
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CREDENCE SYSTEMS CORPORATION
215 FOURIER AVENUE
FREMONT, CALIFORNIA 94539
(Name and address of agent for service)
(510) 657-7400
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Securities to be Registered Amount to be Offering Price Aggregate Offering Amount of Registration Fee
Registered(1) per Share(2) Price(2)
====================================================================================================================================
<S> <C> <C> <C> <C>
1993 STOCK OPTION PLAN 936,300 shares $122.75 $114,930,825.00 $30,341.73
Common Stock, $0.001 par value
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Registrant's Common Stock which become issuable under the Credence Systems
Corporation 1993 Stock Option Plan by reason of any stock dividend, stock
split, recapitalization or other similar transaction effected without the
Registrant's receipt of consideration which results in an increase in the
number of the Registrant's outstanding shares of Common Stock.
(2) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, on the basis of the average of the high
and low selling prices per share of the Registrant's Common Stock on
March 15, 2000 as reported by the Nasdaq National Market.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Credence Systems Corporation (the "Registrant") hereby
incorporates by reference into this Registration Statement the following
documents previously filed with the Securities and Exchange Commission (the
"SEC"):
(a) The Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1999 filed with the SEC on
January 27, 2000, as amended on Form 10-K/A filed with
the SEC on January 31, 2000;
(b) The Registrant's Current Reports on Form 8-K filed with
the SEC on December 15, 1999, January 31, 2000,
February 10, 2000, March 1, 2000 and March 14, 2000;
(c) The Registrant's Quarterly Report for the fiscal quarter
ended January 31, 2000 on Form 10-Q filed with the SEC
on March 10, 2000;
(d) The Registrant's Registration Statement No. 000-22366 on
Form 8-A filed with the SEC on June 19, 1998, in which
there is described the terms, rights and provisions
applicable to the Registrant's Preferred Stock Purchase
Rights, and;
(e) The Registrant's Registration Statement No. 000-22366 on
Form 8-A filed with the SEC on September 10, 1993, as
amended on October 21, 1993, in which there is described
the terms, rights and provisions applicable to the
Registrant's outstanding Common Stock.
All reports and definitive proxy or information statements
filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 (the "1934 Act") after the date of this Registration Statement and
prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
then remaining unsold shall be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any subsequently filed document which also is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
Item 4. DESCRIPTION OF CAPITAL STOCK
Inapplicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Inapplicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The provisions of Registrant's Amended and Restated
Certificate of Incorporation limit the liability of Registrant's directors in
certain instances. As permitted by the Delaware General Corporation Law,
directors will not be liable to Registrant for monetary damages arising from a
breach of their fiduciary duty as directors in certain circumstances. Such
limitation does not affect liability for any breach of a director's duty to
Registrant or Registrant's stockholders (i) with respect to approval by the
director of any transaction from which he derives an improper personal benefit,
(ii) with respect to acts or omissions involving an absence of good faith, that
he believes to be contrary to Registrant's best interests or the best interest
of Registrant's stockholders, that involve
II-1
<PAGE>
intentional misconduct or a knowing and culpable violation of law, that
constitute an unexcused pattern of inattention that amounts to an abdication of
his duty to Registrant or Registrant's stockholders, or that show a reckless
disregard for his duty to Registrant or Registrant's stockholders in
circumstances in which he was, or should have been, aware, in the ordinary
course of performing his duties, of a risk of serious injury to Registrant or
Registrant's stockholders, or (iii) based on transactions between Registrant and
Registrant's directors or another corporation with interrelated directors or on
improper distributions, loans, or guarantees under applicable sections of the
Delaware General Corporation Law. Such limitation of liability also does not
affect the availability of equitable remedies such as injunctive relief or
rescission, although in certain circumstances equitable relief may not be
available as a practical matter. The limitation may relieve the directors of
monetary liability to Registrant for grossly negligent conduct, including
conduct in situations involving attempted takeovers. No claim or litigation is
currently pending against Registrant's directors that would be affected by the
limitation of liability.
Registrant's Amended and Restated Certificate of Incorporation
and Bylaws provide that Registrant shall indemnify Registrant's directors and
may indemnify Registrant's officers to the fullest extent permitted by Delaware
law, including circumstances in which indemnification is otherwise discretionary
under Delaware law. Registrant has entered into separate indemnification
agreements with Registrant's directors and officers, which may require
Registrant, among other things, to indemnify them against certain liabilities
that may arise by reason of their status or service as directors or officers
(other than liabilities arising from willful misconduct of a culpable nature),
and to advance their expenses incurred as a result of any proceeding against
them as to which they could be indemnified. To the extent Registrant may be
required to make substantial payments under the indemnification agreements that
are not covered by insurance, Registrant's available cash and stockholder's
equity would be adversely affected. Reference is made to the form of
Underwriting Agreement filed as Exhibit 1.1 to Registration Statement No.
333-95469 for certain provisions regarding the indemnification of officers and
directors by the several Underwriters.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Inapplicable.
Item 8. EXHIBITS
EXHIBIT NUMBER EXHIBIT
-------------- -------
4.0 Instruments Defining Rights of Stockholders.
Reference is made to Registrant's Registration
Statement No. 000-22366 on Form 8-A, and the exhibits
thereto, and Amendment No. 1 thereto, which are
incorporated herein by reference pursuant to Items
3(d) and 3(e) of this Registration Statement.
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Brobeck, Phleger & Harrison LLP is
contained in Exhibit 5.1.
24.0 Power of Attorney. Reference is made to page II-4 of
this Registration Statement.
99.1 Credence Systems Corporation 1993 Stock Option Plan
(As Amended and Restated Through February 9, 2000).
99.2* Form of Notice of Grant.
99.3* Form of Stock Option Agreement.
99.4* Addendum to Stock Option Agreement (Special Tax
Elections).
99.5* Addendum to Stock Option Agreement (Limited Stock
Appreciation Rights).
99.6* Addendum to Stock Option Agreement (Change in
Control).
99.7* Addendum to Stock Option Agreement (Financial
Assistance).
99.8** Form of Notice of Grant of Stock Option
(Non-Employee Director).
99.9** Form of Stock Option Agreement (Non-Employee
Director).
II-2
<PAGE>
* Exhibits 99.2 through 99.7 are incorporated herein by reference to
Exhibits 99.2 through 99.7, respectively, of Registrant's Registration Statement
No. 33-71856 on Form S-8 which was filed with the SEC on November 17, 1993.
** Exhibits 99.8 and 99.9 are incorporated herein by reference to Exhibits
99.8 and 99.9, respectively, of Registrant's Registration Statement No. 33-3806
on Form S-8 which was filed with the SEC on April 22, 1996.
Item 9. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes: (1) to
file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement; (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933, as
amended (the "1933 Act"), (ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement, and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
Registration Statement; PROVIDED, however, that clauses (1)(i) and (1)(ii) shall
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the 1934 Act that are
incorporated by reference into the registration statement; (2) that for the
purpose of determining any liability under the 1933 Act each such post-effective
amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof; and (3) to remove
from registration by means of a post-effective amendment any of the securities
being registered which remain unsold upon the termination of the 1993 Stock
Option Plan.
B. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the 1933 Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
1934 Act that is incorporated by reference into this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under
the 1933 Act may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the indemnification provisions summarized in Item 6
above or otherwise, the Registrant has been advised that in the opinion of the
SEC such indemnification is against public policy as expressed in the 1933 Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, as amended, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Fremont, State of
California, on this 23rd day of February, 2000.
CREDENCE SYSTEMS CORPORATION
By /s/ Dr. Graham J. Siddall
--------------------------------------
Dr. Graham J. Siddall
President, Chief Executive Officer and
Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of CREDENCE
SYSTEMS CORPORATION, a Delaware corporation, do hereby constitute and appoint
Dr. Graham J. Siddall and Dennis P. Wolf, and each of them, the lawful attorneys
and agents, with full power and authority to do any and all acts and things and
to execute any and all instruments which said attorney and agent determines may
be necessary or advisable or required to enable said corporation to comply with
the Securities Act of 1933, as amended, and any rules or regulations or
requirements of the Securities and Exchange Commission in connection with this
Registration Statement. Without limiting the generality of the foregoing power
and authority, the powers granted include the power and authority to sign the
names of the undersigned officers and directors in the capacities indicated
below to this Registration Statement, to any and all amendments, both
pre-effective and post-effective, and supplements to this Registration
Statement, and to any and all instruments or documents filed as part of or in
conjunction with this Registration Statement or amendments or supplements
thereof, and each of the undersigned hereby ratifies and confirms all that said
attorneys and agents, or any of them, shall do or cause to be done by virtue
hereof. This Power of Attorney may be signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this
Power of Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ---------- ----- ----
<S> <C> <C>
/s/ Dr. Graham J. Siddall President, Chief Executive Officer and February 23, 2000
- ------------------------------- Director (Principal Executive Officer)
Dr. Graham J. Siddall
/s/ Dennis P. Wolf Executive Vice President, Chief Financial March 20, 2000
- ------------------------------- Officer and Secretary
Dennis P. Wolf (Principal Financial and Accounting Officer)
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ---------- ----- ----
<S> <C> <C>
/s/ David A. Ranhoff Executive Vice President and February 28, 2000
- ------------------------------- Chief Operating Officer
David A. Ranhoff
/s/ William G. Howard, Jr. Chairman of the Board of Directors March 20, 2000
- -------------------------------
William G. Howard, Jr.
/s/ Jos C. Henkens Director March 20, 2000
- -------------------------------
Jos C. Henkens
/s/ Bernard V. Vonderschmitt Director March 20, 2000
- -------------------------------
Bernard V. Vonderschmitt
/s/ Henk J. Evenhuis Director March 20, 2000
- -------------------------------
Henk J. Evenhuis
/s/ Jon D. Tompkins Director March 20, 2000
- -------------------------------
Jon D. Tompkins
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT
------ -------
4.0 Instruments Defining Rights of Stockholders. Reference is
made to Registrant's Registration Statement No. 000-22366 on
Form 8-A, and the exhibits thereto, and Amendment No. 1
thereto, which are incorporated herein by reference pursuant
to Items 3(d) and 3(e) of this Registration Statement.
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.1.
24.0 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 Credence Systems Corporation 1993 Stock Option Plan (As
Amended and Restated Through February 9, 2000).
99.2* Form of Notice of Grant.
99.3* Form of Stock Option Agreement.
99.4* Addendum to Stock Option Agreement (Special Tax Elections).
99.5* Addendum to Stock Option Agreement (Limited Stock
Appreciation Rights).
99.6* Addendum to Stock Option Agreement (Change in Control).
99.7* Addendum to Stock Option Agreement (Financial Assistance).
99.8** Form of Notice of Grant of Stock Option (Non-Employee
Director).
99.9** Form of Stock Option Agreement (Non-Employee Director).
* Exhibits 99.2 through 99.7 are incorporated herein by reference to
Exhibits 99.2 through 99.7, respectively, of Registrant's Registration Statement
No. 33-71856 on Form S-8 which was filed with the SEC on November 17, 1993.
** Exhibits 99.8 and 99.9 are incorporated herein by reference to
Exhibits 99.8 and 99.9, respectively, of Registrant's Registration Statement No.
33-3806 on Form S-8 which was filed with the SEC on April 22, 1996.
<PAGE>
EXHIBIT 5.1
OPINION OF BROBECK, PHLEGER & HARRISON LLP
March 20, 2000
Credence Systems Corporation
215 Fourier Avenue
Fremont, CA 94539
Re: Credence Systems Corporation Registration Statement on Form
S-8 for an aggregate of 936,300 Shares of Common Stock
Ladies and Gentlemen:
We have acted as counsel to Credence Systems Corporation, a
Delaware corporation (the "Company"), in connection with the registration on
Form S-8 (the "Registration Statement") under the Securities Act of 1933, as
amended, of an additional 936,300 shares of the Company's common stock ("Common
Stock") authorized for issuance under the Company's 1993 Stock Option Plan (the
"Plan").
This opinion is being furnished in accordance with the
requirements of Item 8 of Form S-8 and Item 601(b)(5)(i) of Regulation S-K.
We have reviewed the Company's charter documents and the
corporate proceedings taken by the Company in connection with the establishment
and amendment of the Plan. Based on such review, we are of the opinion that if,
as and when the shares of Common Stock are issued and sold (and the
consideration therefor received) pursuant to the provisions of option agreements
duly authorized under the Plan and in accordance with the Registration
Statement, such shares will be duly authorized, legally issued, fully paid and
non-assessable.
We consent to the filing of this opinion letter as Exhibit 5.1
to the Registration Statement.
This opinion letter is rendered as of the date first written
above and we disclaim any obligation to advise you of facts, circumstances,
events or developments which hereafter may be brought to our attention and which
may alter, affect or modify the opinion expressed herein. Our opinion is
expressly limited to the matters set forth above and we render no opinion,
whether by implication or otherwise, as to any other matters relating to the
Company, the Plan or the shares of Common Stock issuable under such plan.
Very truly yours,
/s/ Brobeck, Phleger & Harrison LLP
BROBECK, PHLEGER & HARRISON LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 pertaining to the 1993 Stock Option Plan of Credence Systems
Corporation, of our report dated November 24, 1999, with respect to the
consolidated financial statements and schedule of Credence Systems Corporation
included in the Annual Report on Form 10-K/A for the year ended October 31, 1999
filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
San Jose, California
March 17, 2000
<PAGE>
EXHIBIT 99.1
CREDENCE SYSTEMS CORPORATION
1993 STOCK OPTION PLAN
(AS AMENDED AND RESTATED THROUGH FEBRUARY 9, 2000)
ARTICLE ONE
GENERAL
I. PURPOSE OF THE PLAN
A. This 1993 Stock Option Plan ("Plan") is intended to promote the
interests of Credence Systems Corporation, a Delaware corporation (the
"Corporation"), by providing (i) key employees (including officers) of the
Corporation (or its parent or subsidiary corporations) who are responsible for
the management, growth and financial success of the Corporation (or its parent
or subsidiary corporations), (ii) the non-employee members of the Corporation's
Board of Directors and (iii) consultants who provide valuable services to the
Corporation (or its parent or subsidiary corporations) with the opportunity to
acquire a proprietary interest, or otherwise increase their proprietary
interest, in the Corporation as an incentive for them to remain in the service
of the Corporation (or its parent or subsidiary corporations).
B. The Discretionary Option Grant Program under this Plan became
effective on the first date on which the shares of the Corporation's Common
Stock were registered under Section 12(g) of the Securities Exchange Act of
1934. Such date is hereby designated as the Effective Date for that program. The
Automatic Option Grant Program under this Plan became effective immediately upon
the execution and final pricing of the Underwriting Agreement for the initial
public offering of the Corporation's Common Stock. The execution date of such
Underwriting Agreement is hereby designated as the Effective Date of the
Automatic Option Grant Program.
C. This Plan shall serve as the successor to (i) the Corporation's
1984 Incentive Stock Option Plan (the "1984 Plan") and (ii) the ASIX Systems
Corporation 1989 Stock Option Plan (the "ASIX Plan") which the Corporation
assumed in connection with its acquisition of ASIX Systems Corporation by merger
effected October 27, 1989. The 1984 Plan and ASIX Plan shall be collectively
referred to in this document as the "Predecessor Plans", and no further option
grants or stock issuances shall be made under the Predecessor Plans from and
after the Effective Date of this Plan. All options outstanding under the
Predecessor Plans on the Effective Date of the Discretionary Option Grant
Program are hereby incorporated into this Plan and shall accordingly be treated
as outstanding options under this Plan. However, each outstanding option so
incorporated shall continue to be governed solely by the express terms and
conditions of the instrument evidencing such grant, and no provision of this
Plan shall be deemed to affect or otherwise modify the rights or obligations of
the holders of such incorporated options with respect to their acquisition of
shares of the Corporation's Common Stock thereunder.
II. DEFINITIONS
A. For purposes of the Plan, the following definitions shall be in
effect:
BOARD: the Corporation's Board of Directors.
CODE: the Internal Revenue Code of 1986, as amended.
COMMITTEE: the committee of two (2) or more non-employee Board members
appointed by the Board to administer the Plan.
COMMON STOCK: shares of the Corporation's common stock.
CHANGE IN CONTROL: a change in ownership or control of the Corporation
effected through either of the following transactions:
<PAGE>
a. any person or related group of persons (other than the Corporation
or a person that directly or indirectly controls, is controlled by, or is
under common control with, the Corporation) directly or indirectly acquires
beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of
securities possessing more than fifty percent (50%) of the total combined
voting power of the Corporation's outstanding securities pursuant to a
tender or exchange offer made directly to the Corporation's stockholders;
or
b. there is a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the
Board members ceases, by reason of one or more proxy contests for the
election of Board members, to be comprised of individuals who either (A)
have been Board members continuously since the beginning of such period or
(B) have been elected or nominated for election as Board members during
such period by at least a majority of the Board members described in clause
(A) who were still in office at the time such election or nomination was
approved by the Board.
CORPORATE TRANSACTION: any of the following stockholder-approved
transactions to which the Corporation is a party:
a. a merger or consolidation in which the Corporation is not the
surviving entity, except for a transaction the principal purpose of which
is to change the State in which the Corporation is incorporated,
b. the sale, transfer or other disposition of all or substantially all
of the assets of the Corporation in complete liquidation or dissolution of
the Corporation, or
c. any reverse merger in which the Corporation is the surviving entity
but in which securities possessing more than fifty percent (50%) of the
total combined voting power of the Corporation's outstanding securities are
transferred to a person or persons different from those who held such
securities immediately prior to such merger.
EMPLOYEE: an individual who performs services while in the employ of
the Corporation or one or more parent or subsidiary corporations, subject to the
control and direction of the employer entity not only as to the work to be
performed but also as to the manner and method of performance.
FAIR MARKET VALUE: the fair market value per share of Common Stock
determined in accordance with the following provisions:
a. If the Common Stock is not at the time listed or admitted to
trading on any national stock exchange but is traded on the Nasdaq National
Market, the Fair Market Value shall be the closing price per share on the
date in question, as such price is reported by the National Association of
Securities Dealers on the Nasdaq National Market and published in THE WALL
STREET JOURNAL. If there is no reported closing price for the Common Stock
on the date in question, then the closing price on the last preceding date
for which such quotation exists shall be determinative of Fair Market
Value.
b. If the Common Stock is at the time listed or admitted to trading on
any national stock exchange, then the Fair Market Value shall be the
closing price per share on the date in question on the exchange determined
by the Plan Administrator to be the primary market for the Common Stock, as
such price is officially quoted in the composite tape of transactions on
such exchange and published in THE WALL STREET JOURNAL. If there is no
reported sale of Common Stock on such exchange on the date in question,
then the Fair Market Value shall be the closing price on the exchange on
the last preceding date for which such quotation exists.
2.
<PAGE>
FIRST TRADING DAY: the first trading day of each fiscal year of the
Corporation.
HOSTILE TAKE-OVER: a change in ownership of the Corporation effected
through a transaction in which any person or related group of persons (other
than the Corporation or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Corporation) directly or
indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 of
the 1934 Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Corporation's outstanding securities pursuant
to a tender or exchange offer made directly to the Corporation's stockholders
which the Board does not recommend such stockholders to accept.
1934 ACT: the Securities Exchange Act of 1934, as amended from time to
time.
OPTIONEE: any person to whom an option is granted under either the
Discretionary Option Grant or Automatic Option Grant Program in effect under the
Plan.
PLAN ADMINISTRATOR: the Committee in its capacity as the administrator
of the Plan.
PERMANENT DISABILITY OR PERMANENTLY DISABLED: the inability of the
Optionee to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment expected to result in death
or to be of continuous duration of twelve (12) months or more.
SERVICE: the performance of services on a periodic basis to the
Corporation (or any parent or subsidiary corporation) in the capacity of an
Employee, a non-employee member of the board of directors or a consultant or
advisor, except to the extent otherwise specifically provided in the applicable
stock option agreement.
TAKE-OVER PRICE: the GREATER of (a) the Fair Market Value per share of
Common Stock on the date the option is surrendered to the Corporation in
connection with a Hostile Take-Over or (b) the highest reported price per share
of Common Stock paid by the tender offeror in effecting such Hostile Take-Over.
However, if the surrendered option is an incentive stock option under the
Federal tax laws, the Take-Over Price shall not exceed the clause (a) price per
share.
B. The following provisions shall be applicable in determining the
parent and subsidiary corporations of the Corporation:
Any corporation (other than the Corporation) in an unbroken chain of
corporations ending with the Corporation shall be considered to be a PARENT
of the Corporation, provided each such corporation in the unbroken chain
(other than the Corporation) owns, at the time of the determination, stock
possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.
Each corporation (other than the Corporation) in an unbroken chain of
corporations beginning with the Corporation shall be considered to be a
SUBSIDIARY of the Corporation, provided each such corporation (other than
the last corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other
corporations in such chain.
3.
<PAGE>
III. STRUCTURE OF THE PLAN
A. STOCK PROGRAMS. The Plan shall be divided into two separate
components: the Discretionary Option Grant Program specified in Article Two and
the Automatic Option Grant Program specified in Article Three. Under the
Discretionary Option Grant Program, eligible individuals may, at the discretion
of the Plan Administrator, be granted options to purchase shares of Common Stock
in accordance with the provisions of Article Two. Under the Automatic Option
Grant Program, non-employee members of the Corporation's Board of Directors (the
"Board") will receive periodic option grants to purchase shares of Common Stock
in accordance with the provisions of Article Three.
B. GENERAL PROVISIONS. Unless the context clearly indicates otherwise,
the provisions of Articles One and Four shall apply to the Discretionary Option
Grant Program and the Automatic Option Grant Program and shall accordingly
govern the interests of all individuals under the Plan.
IV. ADMINISTRATION OF THE PLAN
A. The Discretionary Option Grant Program shall be administered by the
Committee. Members of the Committee shall serve for such period of time as the
Board may determine and shall be subject to removal by the Board at any time.
B. The Committee as Plan Administrator shall have full power and
authority (subject to the express provisions of the Plan) to establish rules and
regulations for the proper administration of the Discretionary Option Grant
Program and to make such determinations under, and issue such interpretations
of, the provisions of such program and any outstanding option grants thereunder
as it may deem necessary or advisable. Decisions of the Plan Administrator shall
be final and binding on all parties who have an interest in the Discretionary
Option Grant Program or any outstanding option thereunder.
C. Administration of the Automatic Option Grant Program shall be
self-executing in accordance with the express terms and conditions of Article
Three, and the Committee as Plan Administrator shall exercise no discretionary
functions with respect to option grants made pursuant to that program.
V. OPTION GRANTS
A. The persons eligible to participate in the Discretionary Option
Grant Program under Article Two are as follows:
(i) officers and other key employees of the Corporation (or its
parent or subsidiary corporations) who render services which contribute to
the management, growth and financial success of the Corporation (or its
parent or subsidiary corporations);
(ii) non-employee Board members; and
(iii) those consultants who provide valuable services to the
Corporation (or its parent or subsidiary corporations).
B. The Plan Administrator shall have full authority to determine, with
respect to the option grants made under the Plan, which eligible individuals are
to receive option grants, the number of shares to be covered by each such grant,
the status of the granted option as either an incentive stock option ("Incentive
Option") which satisfies the requirements of Code Section 422 or a non-statutory
option not intended to meet such requirements, the time or times at which each
granted option is to become exercisable and the maximum term for which the
option may remain outstanding.
4.
<PAGE>
VI. STOCK SUBJECT TO THE PLAN
A. Shares of Common Stock shall be available for issuance under the
Plan and shall be drawn from either the Corporation's authorized but unissued
shares of Common Stock or from reacquired shares of Common Stock, including
shares repurchased by the Corporation on the open market. The maximum number of
shares of Common Stock that may be issued over the term of the Plan shall not
exceed 6,969,119 shares, subject to adjustment from time to time in accordance
with the provisions of this Section VI.
Such authorized share reserve reflects the 3-for-2 split of the
Corporation's outstanding Common Stock effected June 5, 1995 and the 1-for-3
reverse stock split of the Corporation's outstanding Common Stock effected
October 7, 1993, and is comprised of the following:
(i) the number of shares which remained available for issuance,
as of the Effective Date of the Discretionary Option Grant Program, under
the 1984 Plan as last approved by the Corporation's stockholders, including
the shares subject to the outstanding options incorporated into this Plan
and any other shares which would have been available for future option
grant under the 1984 Plan as last approved by the stockholders (estimated
to be 1,931,757 shares in the aggregate on a post-split basis);
(ii) 143,244 shares (on a post-split basis) subject to options
outstanding under the ASIX Plan as of the Effective Date and incorporated
into this Plan;
(iii) an additional 300,000 share increase (on a post-split
basis) authorized by the Board under this Plan and approved by the
stockholders prior to the Effective Date;
(iv) an additional 750,000-share increase (on a post-split basis)
authorized by the Board on January 23, 1995 and approved by the
stockholders at the 1995 Annual Stockholders Meeting;
(v) an additional 500,000-share increase authorized by the Board
on January 26, 1996 and approved by the Corporation's stockholders at the
1996 Annual Stockholders Meeting;
(vi) an additional 500,000-share increase authorized by the Board
on February 12, 1997 and approved by the stockholders at the 1997 Annual
Stockholders Meeting;
(vii) an additional 500,000-share increase authorized by the
Board on February 13, 1998 and approved by the stockholders at the 1998
Annual Stockholders Meeting;
(viii) an additional 407,818-share increase effected October 31,
1998 pursuant to the automatic share increase provisions of Section VI.C.
of this Article One;
(ix) an additional 1,000,000-share increase authorized by the
Board on January 22, 1999 and approved by the stockholders at the 1999
Annual Meeting;
(x) an additional 436,300-share increase effected October 31,
1999 pursuant to the automatic share increase provisions of Section VI.C.
of this Article One; and
(xi) an additional increase of 500,000 shares authorized by the
Board on February 9, 2000, subject to stockholder approval at the 2000
Annual Meeting.
B. To the extent one or more outstanding options under the Predecessor
Plans which have been incorporated into this Plan are subsequently exercised,
the number of shares issued with respect to each such option shall reduce, on a
share-for-share basis, the number of shares available for issuance under this
Plan.
5.
<PAGE>
C. The number of shares of Common Stock reserved for issuance under
this Plan will automatically be increased on the First Trading Day of each
fiscal year over the remaining term of the Plan, beginning with the November 1,
2000 First Trading Day, by an amount equal to three and one-half percent (3.5%)
of the total number of shares of Common Stock outstanding on the last trading
day of the immediately preceding fiscal year, but in no event shall any such
annual increase exceed 1,500,000 shares.
D. No one person participating in the Plan may receive options and
separately exercisable stock appreciation rights for more than 1,000,000 shares
(on a post-split basis) of Common Stock in the aggregate over the remaining term
of the Plan, subject to adjustment from time to time in accordance with the
provisions of this Section VI. For purposes of such limitation, no stock options
or stock appreciation rights granted prior to January 1, 1995 shall be taken
into account. The 250,000-share increase to such limit adopted by the Board on
January 22, 1999 was approved by the stockholders at the 1999 Annual Meeting.
E. Should one or more outstanding options under this Plan (including
outstanding options under the Predecessor Plans incorporated into this Plan)
expire or terminate for any reason prior to exercise in full (including any
option cancelled in accordance with the cancellation-regrant provisions of
Section IV of Article Two), then the shares subject to the portion of each
option not so exercised shall be available for subsequent option grants under
the Plan. Unvested shares issued under the Plan and subsequently repurchased by
the Corporation, at the original exercise price paid per share, pursuant to the
Corporation's repurchase rights under the Plan shall be added back to the number
of shares of Common Stock reserved for issuance under the Plan and shall
accordingly be available for reissuance through one or more subsequent option
grants under the Plan. However, shares subject to any option or portion thereof
surrendered in accordance with Section V of Article Two or Section III of
Article Three shall reduce on a share-for-share basis the number of shares of
Common Stock available for subsequent option grants under the Plan. Should the
option price of an outstanding option under the Plan (including any option
incorporated from the Predecessor Plans) be paid with shares of Common Stock or
should shares of Common Stock otherwise issuable under the Plan be withheld by
the Corporation in satisfaction of the withholding taxes incurred in connection
with the exercise of an outstanding stock option under the Plan, then the number
of shares of Common Stock available for issuance under the Plan shall be reduced
by the gross number of shares for which the option is exercised or which vest
under the stock issuance, and not by the net number of shares of Common Stock
actually issued.
F. Should any change be made to the Common Stock issuable under the
Plan by reason of any stock split, stock dividend, recapitalization, combination
of shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without the Corporation's receipt of consideration, then
appropriate adjustments shall be made to (i) the maximum number and/or class of
securities issuable under the Plan, (ii) the maximum number and/or class of
securities by which the share reserve is to increase automatically on the First
Trading of each fiscal year pursuant to the provisions of Section VI.C of this
Article One, (iii) the maximum number and/or class of securities for which any
one person may be granted options and separately exercisable stock appreciation
rights under the Plan from and after January 1, 1995, (iv) the number and/or
class of securities for which automatic option grants are to be subsequently
made per newly-elected or continuing non-employee Board member under the
Automatic Option Grant Program, (v) the number and/or class of securities and
price per share in effect under each option outstanding under either the
Discretionary Option Grant or Automatic Option Grant Program and (vi) the number
and/or class of securities and price per share in effect under each outstanding
option incorporated into this Plan from the Predecessor Plans. Such adjustments
to the outstanding options are to be effected in a manner which shall preclude
the enlargement or dilution of rights and benefits under such options. The
adjustments determined by the Plan Administrator shall be final, binding and
conclusive.
6.
<PAGE>
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
----------------------------------
I. TERMS AND CONDITIONS OF OPTIONS
Options granted pursuant to the Discretionary Option Grant Program
shall be authorized by action of the Plan Administrator and may, at the Plan
Administrator's discretion, be either Incentive Options or non-statutory
options. Individuals who are not Employees of the Corporation or its parent or
subsidiary corporations may only be granted non-statutory options. Each granted
option shall be evidenced by one or more instruments in the form approved by the
Plan Administrator; PROVIDED, however, that each such instrument shall comply
with the terms and conditions specified below. Each instrument evidencing an
Incentive Option shall, in addition, be subject to the applicable provisions of
Section II of this Article Two.
A. OPTION PRICE.
(1) The option price per share shall be fixed by the Plan
Administrator but shall not be less than one hundred percent (100%) of the Fair
Market Value per share of Common Stock on the option grant date.
(2) The option price shall become immediately due upon exercise of
the option and, subject to the provisions of Section I of Article Four and the
instrument evidencing the grant, shall be payable in one of the following
alternative forms specified below:
- full payment in shares of Common Stock held for the requisite
period necessary to avoid a charge to the Corporation's earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date (as such
term is defined below);
- full payment in cash or check drawn to the Corporation's order;
- full payment in a combination of shares of Common Stock held for
the requisite period necessary to avoid a charge to the Corporation's earnings
for financial reporting purposes and valued at Fair Market Value on the Exercise
Date and cash or check drawn to the Corporation's order; or
- full payment through a broker-dealer sale and remittance
procedure pursuant to which the Optionee (I) shall provide irrevocable
instructions to a designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate option
price payable for the purchased shares plus all applicable Federal and State
income and employment taxes required to be withheld by the Corporation in
connection with such purchase and (II) shall provide directives to the
Corporation to deliver the certificates for the purchased shares directly to
such brokerage firm in order to complete the sale transaction.
For purposes of this subparagraph (2), the Exercise Date shall be the
date on which the notice of the option exercise is delivered to the Corporation.
Except to the extent the sale and remittance procedure is utilized in connection
with the exercise of the option, payment of the option price for the purchased
shares must accompany such notice.
B. TERM AND EXERCISE OF OPTIONS. Each option granted under this
Discretionary Option Grant Program shall be exercisable at such time or times
and during such period as is determined by the Plan Administrator and set forth
in the instrument evidencing the grant. No such option, however, shall have a
maximum term in excess of ten (10) years from the grant date.
7.
<PAGE>
C. LIMITED TRANSFERABILITY OF OPTIONS. During the lifetime of the
Optionee, Incentive Options shall be exercisable only by the Optionee and shall
not be assignable or transferable other than by will or by the laws of
inheritance following the Optionee's death. Non-Statutory Options shall be
subject to the same restriction, except that a Non-Statutory Option may be
assigned in whole or in part during the Optionee's lifetime to one or more
members of the Optionee's family or to a trust established exclusively for one
or more such family members or to Optionee's former spouse, to the extent such
assignment is in connection with the Optionee's estate plan or pursuant to a
domestic relations order. The assigned portion may only be exercised by the
person or persons who acquire a proprietary interest in the option pursuant to
the assignment. The terms applicable to the assigned portion shall be the same
as those in effect for the option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Plan Administrator
may deem appropriate. Notwithstanding the foregoing, the Optionee may also
designate one or more persons as the beneficiary or beneficiaries of his or her
outstanding options under this Article Two, and those options shall, in
accordance with such designation, automatically be transferred to such
beneficiary or beneficiaries upon the Optionee's death while holding those
options. Such beneficiary or beneficiaries shall take the transferred options
subject to all the terms and conditions of the applicable agreement evidencing
each such transferred option, including (without limitation) the limited time
period during which the option may be exercised following the Optionee's death.
D. TERMINATION OF SERVICE.
(1) The following provisions shall govern the exercise period
applicable to any outstanding options held by the Optionee at the time of
cessation of Service or death.
Should an Optionee cease Service for any reason (including
death or Permanent Disability) while holding one or more outstanding options
under this Article Two, then none of those options shall (except to the extent
otherwise provided pursuant to subparagraph C.(3) below) remain exercisable for
more than a thirty-six (36)-month period (or such shorter period determined by
the Plan Administrator and set forth in the instrument evidencing the grant)
measured from the date of such cessation of Service.
Any option held by the Optionee under this Article Two and
exercisable in whole or in part on the date of his or her death may be
subsequently exercised by the personal representative of the Optionee's estate
or by the person or persons to whom the option is transferred pursuant to the
Optionee's will or in accordance with the laws of descent and distribution. Such
exercise, however, must occur prior to the EARLIER of (i) the third anniversary
of the date of the Optionee's death (or such shorter period determined by the
Plan Administrator and set forth in the instrument evidencing the grant) or (ii)
the specified expiration date of the option term. Upon the occurrence of the
earlier event, the option shall terminate and cease to be outstanding.
During the applicable post-Service period, the option may not
be exercised in the aggregate for more than the number of shares (if any) in
which the Optionee is vested at the time of cessation of Service. Upon the
expiration of the limited post-Service exercise period or (if earlier) upon the
specified expiration date of the option term, each such option shall terminate
and cease to be outstanding with respect to any vested shares for which it has
not otherwise been exercised. However, each outstanding option shall immediately
terminate and cease to be outstanding, at the time of the Optionee's cessation
of Service, with respect to any shares for which it is not otherwise at that
time exercisable or in which Optionee is not otherwise at that time vested.
Under no circumstances, however, shall any such option be
exercisable after the specified expiration date of the option term.
8.
<PAGE>
Should (i) the Optionee's Service be terminated for misconduct
(including, but not limited to, any act of dishonesty, willful misconduct, fraud
or embezzlement) or (ii) the Optionee make any unauthorized use or disclosure of
confidential information or trade secrets of the Corporation or its parent or
subsidiary corporations, then in any such event all outstanding options held by
the Optionee under this Article Two shall terminate immediately and cease to be
outstanding.
(2) The Plan Administrator shall have complete discretion,
exercisable either at the time the option is granted or at any time while the
option remains outstanding, to permit one or more options held by the Optionee
under this Article Two to be exercised, during the limited post-Service exercise
period applicable under subparagraph (1) above, not only with respect to the
number of vested shares of Common Stock for which each such option is
exercisable at the time of the Optionee's cessation of Service but also with
respect to one or more subsequent installments of vested shares for which the
option would otherwise have become exercisable had such cessation of Service not
occurred.
(3) The Plan Administrator shall also have full power and authority
to extend the period of time for which the option is to remain exercisable
following the Optionee's cessation of Service or death from the limited period
in effect under subparagraph (1) above to such greater period of time as the
Plan Administrator shall deem appropriate. In no event, however, shall such
option be exercisable after the specified expiration date of the option term.
E. STOCKHOLDER RIGHTS. An Optionee shall have no stockholder rights
with respect to any shares covered by the option until such individual shall
have exercised the option and paid the option price for the purchased shares.
F. REPURCHASE RIGHTS. The shares of Common Stock acquired upon the
exercise of any Article Two option grant may be subject to repurchase by the
Corporation in accordance with the following provisions:
a. The Plan Administrator shall have the discretion to authorize
the issuance of unvested shares of Common Stock under this Article Two.
Should the Optionee cease Service while holding such unvested shares, the
Corporation shall have the right to repurchase any or all of those unvested
shares at the option price paid per share. The terms and conditions upon
which such repurchase right shall be exercisable (including the period and
procedure for exercise and the appropriate vesting schedule for the
purchased shares) shall be established by the Plan Administrator and set
forth in the instrument evidencing such repurchase right.
b. All of the Corporation's outstanding repurchase rights under
this Article Two shall automatically terminate, and all shares subject to
such terminated rights shall immediately vest in full, upon the occurrence
of a Corporate Transaction, except to the extent: (i) any such repurchase
right is expressly assigned to the successor corporation (or parent
thereof) in connection with the Corporate Transaction or (ii) such
accelerated vesting is precluded by other limitations imposed by the Plan
Administrator at the time the repurchase right is issued.
c. The Plan Administrator shall have the discretionary authority,
exercisable either before or after the Optionee's cessation of Service, to
cancel the Corporation's outstanding repurchase rights with respect to one
or more shares purchased or purchasable by the Optionee under this
Discretionary Option Grant Program and thereby accelerate the vesting of
such shares in whole or in part at any time.
9.
<PAGE>
II. INCENTIVE OPTIONS
The terms and conditions specified below shall be applicable to all
Incentive Options granted under this Article Two. Incentive Options may only be
granted to individuals who are Employees of the Corporation. Options which are
specifically designated as "non-statutory" options when issued under the Plan
shall NOT be subject to such terms and conditions.
A. DOLLAR LIMITATION. The aggregate Fair Market Value (determined as
of the respective date or dates of grant) of the Common Stock for which one or
more options granted under this Plan (or any other option plan of the
Corporation or its parent or subsidiary corporations) may for the first time
become exercisable as incentive stock options under the Federal tax laws during
any one calendar year shall not exceed the sum of One Hundred Thousand Dollars
($100,000). To the extent the Employee holds two (2) or more such options which
become exercisable for the first time in the same calendar year, the foregoing
limitation on the exercisability of such options as incentive stock options
under the Federal tax laws shall be applied on the basis of the order in which
such options are granted. Should the number of shares of Common Stock for which
any Incentive Option first becomes exercisable in any calendar year exceed the
applicable One Hundred Thousand Dollar ($100,000) limitation, then that option
may nevertheless be exercised in that calendar year for the excess number of
shares as a non-statutory option under the Federal tax laws.
B. 10% STOCKHOLDER. If any individual to whom an Incentive Option is
granted is the owner of stock (as determined under Section 424(d) of the
Internal Revenue Code) possessing ten percent (10%) or more of the total
combined voting power of all classes of stock of the Corporation or any one of
its parent or subsidiary corporations, then the option price per share shall not
be less than one hundred and ten percent (110%) of the Fair Market Value per
share of Common Stock on the grant date, and the option term shall not exceed
five (5) years, measured from the grant date.
Except as modified by the preceding provisions of this Section II, the
provisions of Articles One, Two and Four of the Plan shall apply to all
Incentive Options granted hereunder.
III. CORPORATE TRANSACTIONS/CHANGES IN CONTROL
A. In the event of any Corporate Transaction, each option which is at
the time outstanding under this Article Two shall automatically accelerate so
that each such option shall, immediately prior to the specified effective date
for the Corporate Transaction, become fully exercisable with respect to the
total number of shares of Common Stock at the time subject to such option and
may be exercised for all or any portion of such shares. However, an outstanding
option under this Article Two shall NOT so accelerate if and to the extent: (i)
such option is, in connection with the Corporate Transaction, either to be
assumed by the successor corporation or parent thereof or to be replaced with a
comparable option to purchase shares of the capital stock of the successor
corporation or parent thereof, (ii) such option is to be replaced with a cash
incentive program of the successor corporation which preserves the option spread
existing at the time of the Corporate Transaction and provides for subsequent
payout in accordance with the same vesting schedule applicable to such option,
or (iii) the acceleration of such option is subject to other limitations imposed
by the Plan Administrator at the time of the option grant. The determination of
option comparability under clause (i) above shall be made by the Plan
Administrator, and its determination shall be final, binding and conclusive.
B. Upon the consummation of the Corporate Transaction, all outstanding
options under this Article Two shall terminate and cease to be outstanding,
except to the extent assumed by the successor corporation or its parent company.
C. Each outstanding option under this Article Two which is assumed in
connection with the Corporate Transaction or is otherwise to continue in effect
shall be appropriately adjusted, immediately after such Corporate Transaction,
to apply and pertain to the number and class of securities which would have been
issued to the option holder, in consummation of such Corporate Transaction, had
such person exercised the option
10.
<PAGE>
immediately prior to such Corporate Transaction. Appropriate adjustments shall
also be made to the option price payable per share, PROVIDED the aggregate
option price payable for such securities shall remain the same. In addition,
appropriate adjustments shall be made to (i) the class and number of securities
available for issuance under the Plan following the consummation of the
Corporate Transaction, (ii) the maximum number and/or class of securities for
which any one person may be granted stock options, separately exercisable stock
appreciation rights and direct stock issuances under the Plan per calendar year
and (iii) the maximum number and/or class of securities by which the share
reserve is to increase automatically on the First Trading Day of each fiscal
year. To the extent the actual holders of the Corporation's outstanding Common
Stock receive cash consideration for their Common Stock in consummation of the
Corporate Transaction, the successor corporation may, in connection with the
assumption of the outstanding options under the Discretionary Option Grant
Program, substitute one or more shares of its own common stock with a fair
market value equivalent to the cash consideration paid per share of Common Stock
in such Corporate Transaction.
D. The Plan Administrator shall have the discretion, exercisable
either at the time the option is granted or at any time while the option remains
outstanding, to provide (upon such terms as it may deem appropriate) for the
automatic acceleration of one or more outstanding options under this Article Two
which are assumed or replaced in the Corporate Transaction and do not otherwise
accelerate at that time, in the event the Optionee's Service should subsequently
terminate within a designated period following the effective date of such
Corporate Transaction.
E. The grant of options under this Article Two shall in no way affect
the right of the Corporation to adjust, reclassify, reorganize or otherwise
change its capital or business structure or to merge, consolidate, dissolve,
liquidate or sell or transfer all or any part of its business or assets.
F. The Plan Administrator shall have the discretionary authority,
exercisable either at the time the option is granted or at any time while the
option is outstanding, to provide for the automatic acceleration of one or more
outstanding options under this Article Two (and the termination of one or more
of the Corporation's outstanding repurchase rights under this Article Two) upon
the occurrence of the Change in Control. The Plan Administrator shall also have
full power and authority to condition any such option acceleration (and the
termination of any outstanding repurchase rights) upon the subsequent
termination of the Optionee's Service within a specified period following the
Change in Control.
G. Any options accelerated in connection with the Change in Control
shall remain fully exercisable until the expiration or sooner termination of the
option term.
H. Any Incentive Options accelerated under this Section III in
connection with a Corporate Transaction or Change in Control shall remain
exercisable as incentive stock options under the Federal tax laws only to the
extent the applicable dollar limitation of Section II of this Article Two is not
exceeded. To the extent such dollar limitation is exceeded, the accelerated
option shall be exercisable as a non-statutory option under the Federal tax
laws.
IV. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any time
and from time to time, with the consent of the affected optionees, the
cancellation of any or all outstanding options under this Article Two (including
outstanding options under the Predecessor Plans incorporated into this Plan) and
to grant in substitution new options under the Plan covering the same or
different numbers of shares of Common Stock but with an option price per share
not less than one hundred percent (100%) of the Fair Market Value of the Common
Stock on the new grant.
11.
<PAGE>
V. STOCK APPRECIATION RIGHTS
A. Provided and only if the Plan Administrator determines in its
discretion to implement the stock appreciation right provisions of this Section
V, one or more Optionees may be granted the right, exercisable upon such terms
and conditions as the Plan Administrator may establish, to surrender all or part
of an unexercised option under this Article Two in exchange for a distribution
from the Corporation in an amount equal to the excess of (i) the Fair Market
Value (on the option surrender date) of the shares of Common Stock in which the
Optionee is at the time vested under the surrendered option (or surrendered
portion thereof) over (ii) the aggregate option price payable for such vested
shares.
B. No surrender of an option shall be effective hereunder unless it is
approved by the Plan Administrator. If the surrender is so approved, then the
distribution to which the Optionee shall accordingly become entitled under this
Section V may be made in shares of Common Stock valued at Fair Market Value on
the option surrender date, in cash, or partly in shares and partly in cash, as
the Plan Administrator deems appropriate.
C. If the surrender of an option is rejected by the Plan
Administrator, then the Optionee shall retain whatever rights the Optionee had
under the surrendered option (or surrendered portion thereof) on the option
surrender date and may exercise such rights at any time prior to the LATER of
(i) five (5) business days after the receipt of the rejection notice or (ii) the
last day on which the option is otherwise exercisable in accordance with the
terms of the instrument evidencing such option, but in no event may such rights
be exercised more than ten (10) years after the date of the option grant.
D. One or more officers of the Corporation subject to the short-swing
profit restrictions of the Federal securities laws may, in the Plan
Administrator's sole discretion, be granted limited stock appreciation rights in
tandem with their outstanding options under the Plan. Upon the occurrence of a
Hostile Take-Over, the officer will have a thirty (30)-day period in which he or
she may surrender any outstanding options with such a limited stock appreciation
right to the Corporation, to the extent such options are at the time exercisable
for fully-vested shares of Common Stock. The officer shall in return be entitled
to a cash distribution from the Corporation in an amount equal to the excess of
(i) the Take-Over Price of the vested shares of Common Stock at the time subject
to each surrendered option over (ii) the aggregate option price payable for such
vested shares. The cash distribution payable upon such option surrender shall be
made within five (5) days following the consummation of the Hostile Take-Over.
The Plan Administrator shall, at the time the limited stock appreciation right
is granted, pre-approve the subsequent exercise of that right in accordance with
the terms and conditions of this Section V.D.. Accordingly, no additional
approval of the Plan Administrator or the Board shall be required at the time of
the actual option surrender and cash distribution. Any unsurrendered portion of
the option shall continue to remain outstanding and become exercisable in
accordance with the terms of the instrument evidencing such grant.
E. The shares of Common Stock subject to any option surrendered for an
appreciation distribution pursuant to this Section V shall NOT be available for
subsequent option grant under the Plan.
12.
<PAGE>
ARTICLE THREE
AUTOMATIC OPTION GRANT PROGRAM
------------------------------
I. ELIGIBILITY
A. ELIGIBLE DIRECTORS. The individuals eligible to receive automatic
option grants pursuant to the provisions of this Article Three program shall be
limited to (i) those individuals who are first elected or appointed as
non-employee Board members on or after the Effective Date of this Automatic
Option Grant Program, whether through appointment by the Board or election by
the Corporation's stockholders, and (ii) those individuals who continue to serve
as non-employee Board members at one or more Annual Stockholders Meetings held
after such Effective Date, whether or not they commenced their Board service
prior to the Effective Date. Any non-employee Board member eligible to
participate in the Automatic Option Grant Program pursuant to the foregoing
criteria shall be designated an Eligible Director for purposes of this Plan.
II. TERMS AND CONDITIONS OF AUTOMATIC OPTION GRANTS
A. EFFECTIVE DATE. The terms and conditions of this Article Three
reflect the amendment to the Automatic Option Grant Program effected by the
December 8, 1999 restatement of the Plan and shall become effective upon
stockholder approval of such restatement at the 2000 Annual Meeting.
Accordingly, such stockholder approval shall also constitute approval of each
option granted under the amended Automatic Option Grant Program at or after the
date of that Annual Meeting and the subsequent exercise of that option in
accordance with the terms and conditions of this Article Three.
B. GRANT DATES. Options shall be granted under the Automatic Option
Grant Program in accordance with the following provisions:
(i) Each Eligible Director shall automatically be granted, at the
time of his or her initial election or appointment as a non-employee Board
member, a non-statutory stock option to purchase 10,000 shares(1) of Common
Stock upon the terms and conditions of this Article Three.
(ii) On the date of each Annual Stockholders Meeting, beginning
with the 2000 Annual Meeting, each individual who is to continue to the
time as an Eligible Director shall automatically be granted, whether or not
such individual is standing for re-election as a Board member at that
particular meeting, a non-statutory stock option to purchase an additional
10,000 shares(2) of Common Stock upon the terms and conditions of this
Article Three, provided he or she has served as a non-employee Board member
for at least six (6) months. There shall be no limit on the number of
10,000-share option grants any one Eligible Director may receive over his
or her period of Board service.
The number of shares for which the automatic grants are to be made to
each newly-elected or continuing Eligible Director shall be subject to periodic
adjustment pursuant to the applicable provisions of Section VI.D of Article One.
C. OPTION PRICE. For each option grant made under this Automatic
Option Grant Program, the option price per share shall be equal to one hundred
percent (100%) of the Fair Market Value per share of Common Stock on the
automatic grant date.
D. PAYMENT. The option price shall be payable in one of the
alternative forms specified below:
- ------------------
(1) Reflects the 3-for-2 split of the Common Stock effected by the
Corporation on June 5, 1995.
(2) Reflects the 3-for-2 split of the Common Stock effected by the
Corporation on June 5, 1995.
13.
<PAGE>
(i) full payment in cash or check made payable to the Corporation's
order; or
(ii) full payment in shares of Common Stock held for the requisite
period necessary to avoid a charge to the Corporation's reported earnings
and valued at Fair Market Value on the Exercise Date; or
(iii) full payment in a combination of shares of Common Stock held
for the requisite period necessary to avoid a charge to the Corporation's
reported earnings and valued at Fair Market Value on the Exercise Date and
cash or check payable to the Corporation's order; or
(iv) full payment through a sale and remittance procedure pursuant
to which the non-employee Board member (I) shall provide irrevocable
instructions to a designated brokerage firm to effect the immediate sale of
the purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
option price payable for the purchased shares and shall (II) concurrently
provide directives to the Corporation to deliver the certificates for the
purchased shares directly to such brokerage firm in order to complete the
sale transaction.
The Exercise Date shall be the date on which notice of the option
exercise is delivered to the Corporation. Except to the extent the sale and
remittance procedure is utilized for the exercise of the option, payment of the
option price for the purchased shares must accompany the exercise notice.
E. OPTION TERM. Each automatic grant under this Article Three shall
have a maximum term of ten (10) years measured from the automatic grant date.
F. EXERCISABILITY. The initial 10,000-share automatic option grant
made to each newly-elected or appointed Board member shall become exercisable
for twelve and one-half percent (12.5%) of the option shares upon the Optionee's
completion of six (6) months of Board service measured from the automatic grant
date and shall become exercisable for the balance of the option shares in a
series of fourteen (14) equal and successive quarterly installments upon the
Optionee's completion of each additional three (3)-month period of Board service
thereafter. Each annual 10,000-share automatic option grant made to a continuing
Board member shall become exercisable in a series of four (4) equal and
successive annual installments over the Optionee's period of service on the
Board, with the first such installment to become exercisable one year after the
automatic grant date. The exercisability of each outstanding automatic grant
shall be subject to acceleration in accordance with the provisions of Section
II.G and Section III of this Article Three.
G. LIMITED TRANSFERABILITY OF OPTIONS. Each automatic option grant may
be assigned in whole or in part during the Optionee's lifetime to one or more
members of the Optionee's family or to a trust established exclusively for one
or more such family members or to Optionee's former spouse, to the extent such
assignment is in connection with the Optionee's estate plan or pursuant to a
domestic relations order. The assigned portion may only be exercised by the
person or persons who acquire a proprietary interest in the option pursuant to
the assignment. The terms applicable to the assigned portion shall be the same
as those in effect for the option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Plan Administrator
may deem appropriate. Notwithstanding the foregoing, the Optionee may also
designate one or more persons as the beneficiary or beneficiaries of his or her
outstanding options under this Article Three, and those options shall, in
accordance with such designation, automatically be transferred to such
beneficiary or beneficiaries upon the Optionee's death while holding those
options. Such beneficiary or beneficiaries shall take the transferred options
subject to all the terms and conditions of the applicable agreement evidencing
each such transferred option, including (without limitation) the limited time
period during which the option may be exercised following the Optionee's death.
14.
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H. TERMINATION OF BOARD SERVICE.
(1) Should the Optionee cease service as a Board member for any
reason (other than death or Permanent Disability) while holding one or more
automatic option grants under this Article Three, then such individual shall
have a six (6)-month period following the date of such cessation of Board
service in which to exercise each such option for any or all of the shares of
Common Stock for which the option is exercisable at the time of such cessation
of Board service. Each such option shall immediately terminate and cease to be
outstanding, at the time of such cessation of Board service, with respect to any
shares for which the option is not otherwise at that time exercisable.
(2) Should the Optionee die within six (6) months after cessation
of Board service, then each outstanding automatic option grant held by the
Optionee at the time of death may subsequently be exercised, for any or all of
the shares of Common Stock for which such option is exercisable at the time of
the Optionee's cessation of Board service (less any option shares subsequently
purchased by the Optionee prior to death), by the personal representative of the
Optionee's estate or by the person or persons to whom the option is transferred
pursuant to the Optionee's will or in accordance with the laws of descent and
distribution. Any such exercise must occur within twelve (12) months after the
date of the Optionee's death.
(3) Should the Optionee die or become permanently disabled while
serving as a Board member, then each automatic option grant held by such
Optionee under this Article Three shall accelerate in full, and the Optionee (or
the representative of the Optionee's estate or the person or persons to whom the
option is transferred upon the Optionee's death) shall have a twelve (12)-month
period following the date of the Optionee's cessation of Board service in which
to exercise each such option for any or all of the shares of Common Stock
subject to that option at the time of such cessation of Board service.
(4) In no event shall any automatic grant under this Article Three
remain exercisable after the specified expiration date of the ten (10)-year
option term. Upon the expiration of the applicable post-service exercise period
under subparagraph 1, 2 or 3 above or (if earlier) upon the expiration of the
ten (10)-year option term, the automatic grant shall terminate and cease to be
outstanding for any unexercised shares for which the option was otherwise
exercisable at the time of the Optionee's cessation of Board service.
I. STOCKHOLDER RIGHTS. The holder of an automatic option grant under
this Article Three shall have none of the rights of a stockholder with respect
to any shares subject to such option until such individual shall have exercised
the option and paid the option price for the purchased shares.
J. REMAINING TERMS. The remaining terms of each option granted under
the Automatic Option Grant Program shall be the same as the terms in effect for
option grants made under the Discretionary Option Grant Program.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. In the event of any Corporate Transaction, each automatic option
grant at the time outstanding under this Article Three shall automatically
accelerate so that each such option shall, immediately prior to the specified
effective date for the Corporate Transaction, become fully exercisable with
respect to the total number of shares of Common Stock at the time subject to
such option and may be exercised for all or any portion of such shares. Upon the
consummation of the Corporate Transaction, all automatic option grants under
this Article Three shall terminate and cease to be outstanding.
B. In connection with any Change in Control of the Corporation, each
automatic option grant at the time outstanding under this Article Three shall
automatically accelerate so that each such option shall, immediately prior to
the specified effective date for the Change in Control, become fully exercisable
with respect to the total number of shares of Common Stock at the time subject
to such option and may be exercised for all or any portion of such shares.
15.
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C. Upon the occurrence of a Hostile Take-Over, the Optionee shall have
a thirty (30)-day period in which to surrender each option held by him or her
under this Article Three to the Corporation, to the extent such option has been
outstanding for a period of at least six (6) months. The Optionee shall in
return be entitled to a cash distribution from the Corporation in an amount
equal to the excess of (i) the Take-Over Price of the shares of Common Stock at
the time subject to the surrendered option (whether or not the option is
otherwise at the time exercisable for such shares) over (ii) the aggregate
option price payable for such shares. Such cash distribution shall be paid
within five (5) days following the consummation of the Hostile Take-Over.
Stockholder approval of this December 8, 1999 restatement of the Plan at the
2000 Annual Meeting shall also constitute pre-approval of each such option
surrender right granted at or after the date of that Annual Meeting and the
subsequent exercise of that right in accordance with the terms and provisions of
this Section III.C. No additional approval of any Plan Administrator or the
Board shall be required at the time of the actual option surrender and cash
distribution.
D. The shares of Common Stock subject to each option surrendered in
connection with the Hostile Take-Over shall NOT be available for subsequent
option grant under this Plan.
E. The automatic option grants outstanding under this Article Three
shall in no way affect the right of the Corporation to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
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ARTICLE FOUR
MISCELLANEOUS
-------------
I. LOANS OR INSTALLMENT PAYMENTS
A. The Plan Administrator may, in its discretion, assist any Optionee
(including an Optionee who is an officer of the Corporation) in the exercise of
one or more options granted to such Optionee under the Discretionary Option
Grant Program, including the satisfaction of any Federal and State income and
employment tax obligations arising therefrom, by (i) authorizing the extension
of a loan from the Corporation to such Optionee or (ii) permitting the Optionee
to pay the option price for the purchased Common Stock in installments over a
period of years. The terms of any loan or installment method of payment
(including the interest rate and terms of repayment) shall be upon such terms as
the Plan Administrator specifies in the applicable option agreement or otherwise
deems appropriate under the circumstances. Loans or installment payments may be
authorized with or without security or collateral. However, the maximum credit
available to the Optionee may not exceed the option price of the acquired shares
plus any Federal and State income and employment tax liability incurred by the
Optionee in connection with the acquisition of such shares.
B. The Plan Administrator may, in its absolute discretion, determine
that one or more loans extended under this financial assistance program shall be
subject to forgiveness by the Corporation in whole or in part upon such terms
and conditions as the Plan Administrator may deem appropriate.
II. AMENDMENT OF THE PLAN AND AWARDS
A. The Board has complete and exclusive power and authority to amend
or modify the Plan (or any component thereof) in any or all respects whatsoever.
However, no such amendment or modification shall adversely affect rights and
obligations with respect to options at the time outstanding under the Plan,
unless the Optionee consents to such amendment. In addition, certain amendments
may require stockholder approval pursuant to applicable laws or regulations.
B. Options to purchase shares of Common Stock may be granted under the
Discretionary Option Grant Program which are in excess of the number of shares
then available for issuance under the Plan, provided any excess shares actually
issued under such program are held in escrow until stockholder approval is
obtained for a sufficient increase in the number of shares available for
issuance under the Plan. If such stockholder approval is not obtained within
twelve (12) months after the date the first such excess option grants are made,
then (i) any unexercised excess options shall terminate and cease to be
exercisable and (ii) the Corporation shall promptly refund the purchase price
paid for any excess shares actually issued under the Plan and held in escrow,
together with interest (at the applicable Short Term Federal Rate) for the
period the shares were held in escrow.
III. TAX WITHHOLDING
The Corporation's obligation to deliver shares of Common Stock upon
the exercise of stock options for such shares or the vesting of such shares
under the Plan shall be subject to the satisfaction of all applicable Federal,
State and local income and employment tax withholding requirements.
The Plan Administrator may, in its discretion and in accordance with
the provisions of this Section III of Article Four and such supplemental rules
as the Plan Administrator may from time to time adopt (including the applicable
safe-harbor provisions of SEC Rule 16b-3), provide any or all holders of
non-statutory options (other than the automatic grants made pursuant to Article
Three of the Plan) or unvested shares under the Plan with the right to use
shares of the Corporation's Common Stock in satisfaction of all or part of the
Federal, State and local income and employment withholding taxes to which such
holders may become subject in connection with the exercise of their options or
the vesting of their shares (the "Withholding Taxes"). Such right may be
provided to any such holder in either or both of the following formats:
17.
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a. STOCK WITHHOLDING: The holder of the non-statutory option or
unvested shares may be provided with the election to have the Corporation
withhold, from the shares of Common Stock otherwise issuable upon the exercise
of such non-statutory option or the vesting of such shares, a portion of those
shares with an aggregate Fair Market Value equal to the percentage of the
applicable Withholding Taxes (not to exceed one hundred percent (100%))
designated by the holder.
b. STOCK DELIVERY: The Plan Administrator may, in its discretion,
provide the holder of the non-statutory option or unvested shares purchased
thereunder with the election to deliver to the Corporation, at the time the
non-statutory option is exercised or the shares vest, one or more shares of
Common Stock previously acquired by such individual (other than in connection
with the option exercise or share vesting triggering the Withholding Taxes) with
an aggregate Fair Market Value equal to the percentage of the Withholding Taxes
incurred in connection with such option exercise or share vesting (not to exceed
one hundred percent (100%)) designated by the holder.
IV. EFFECTIVE DATE AND TERM OF PLAN
A. The Plan was initially adopted by the Board on August 31, 1993 and
approved by the stockholders in October 1993. As of the applicable Effective
Date for each of the equity incentive programs in effect hereunder, this Plan,
as successor to the Predecessor Plans, became effective for each such program,
and no further option grants or stock issuances shall be made under the
Predecessor Plans from and after such Effective Date. The Plan was subsequently
amended by the Board on January 23, 1995 to (i) increase by 750,000(3) the
number of shares of Common Stock issuable under the Plan, (ii) limit the number
of shares of Common Stock for which any one participant may be granted stock
options and separately exercisable stock appreciation rights under the Plan to
750,0003/ shares, exclusive of any stock options or stock appreciation rights
granted prior to January 1, 1995 and (iii) provide that the option price per
share for all non-statutory stock options granted from and after January 1, 1995
shall not be less than one hundred percent (100%) of the Fair Market Value of
the Common Stock on the grant date. The January 23, 1995 amendment was approved
by the stockholders at the 1995 Annual Meeting held on March 27, 1995. On
January 26, 1996, the Board authorized an additional 500,000-share increase in
the number of shares of Common Stock available for issuance under the Plan and
in February 1996, the Board adopted an amendment to the Plan (the "February 1996
Amendment") which increased the number of shares of Common Stock for which
option grants are to be made annually under the Automatic Option Grant Program
to continuing non-employee Board members from 2,500 shares to 3,500 shares per
individual. Both the January 26, 1996 and February 1996 Amendments were approved
by the Corporation's stockholders at the 1996 Annual Meeting. The Plan was
subsequently amended on February 12, 1997 (the "February 1997 Amendment") to
effect the following changes: (i) increase the number of shares of Common Stock
authorized for issuance over the term of the Plan by an additional 500,000
shares, (ii) allow unvested shares issued under the Plan and subsequently
repurchased by the Corporation at the option exercise price paid per share to be
reissued under the Plan and (iii) effect a series of technical changes to the
provisions of the Plan (including stockholder approval requirements) in order to
take advantage of the recent amendments to Rule 16b-3 of the Securities Exchange
Act of 1934 which exempts certain officer and director transactions under the
Plan from the short-swing liability provisions of the federal securities laws.
The February 1997 Amendment was approved by the stockholders at the 1997 Annual
Meeting. All option grants made prior to the February 1997 Amendment shall
remain outstanding in accordance with the terms and conditions of the respective
instruments evidencing those options or issuances, and nothing in the February
1997 Amendment shall be deemed to modify or in any way affect those outstanding
options or issuances. The Plan was subsequently amended on February 13, 1998
(the "February 1998 Amendment") to effect the following changes: (i) increase
the number of shares of Common Stock authorized for issuance over the term of
the Plan by an additional 500,000 shares, and (ii) implement an automatic share
increase feature, pursuant to which the number of shares available for issuance
over the term of the Plan shall automatically increase on the first trading day
of each fiscal year, beginning with the 1999 fiscal year and continuing through
the fiscal year 2003, by an amount equal to two percent (2%) of the total number
of shares of Common Stock outstanding on the last trading day of the immediately
- ------------------
(3) Reflects the 3-for-2 split of the Common Stock effected by the
Corporation on June 5, 1995.
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preceding fiscal year. The February 1998 Amendment was approved by the
stockholders at the 1998 Annual Meeting. The Plan was again amended on January
22, 1999 (the "January 1999 Amendment"), subject to stockholder approval at the
1999 Annual Meeting, to (i) increase the number of shares of Common Stock
authorized for issuance over the term of the Plan by an additional 1,000,000
shares, (ii) increase the limit on the maximum number of shares of Common Stock
for which any one participant may be granted stock options and separately
exercisable stock appreciation rights after December 31, 1994 from 750,000 to
1,000,000 shares in the aggregate and (iii) increase the size of the annual
grants to non employee Board members under the Automatic Option Grant Program
from 3,500 to 5,000 shares. The January 1999 Amendment was approved by the
stockholders at the 1999 Annual Meeting. The Plan was again amended by the Board
on December 8, 1999 (the "December 1999 Amendment"), subject to stockholder
approval at the 2000 Annual Meeting, to (i) revise the automatic share increase
provisions of the Plan so that the number of shares reserved for issuance under
the Plan will automatically increase on the First Trading Day of each fiscal
year over the remaining term of the Plan, beginning with the November 1, 2000
First Trading Day, by an amount equal to three and one-half percent (3.50%) of
the total number of shares of outstanding Common Stock on the last day of the
immediately preceding fiscal year, but no such annual increase shall exceed
1,500,000 shares, (ii) increase the size of the annual grants to non employee
Board members under the Automatic Option Grant Program from 5,000 shares to
10,000 shares and (iii) extend the term of the Plan to December 31, 2004. The
Plan was further amended by the Board on February 9, 2000 (the "February 2000
Amendment") to increase the number of shares of Common Stock authorized for
issuance under the Plan by an additional 500,000 shares. No option grants will
made on the basis of either the December 1999 Amendment or the February 2000
Amendment unless and until both the December 1999 Amendment and the February
2000 Amendment are approved by the stockholders at the 2000 Annual Meeting.
Subject to the foregoing limitations, the Plan Administrator may make option
grants under the Plan at any time before the date fixed herein for the
termination of the Plan.
B. Each option issued and outstanding under the Predecessor Plans
immediately prior to the Effective Date of the Discretionary Option Grant
Program was incorporated into this Plan and treated as an outstanding option
under this Plan, but each such option shall continue to be governed solely by
the terms and conditions of the instrument evidencing such grant, and nothing in
this Plan shall be deemed to affect or otherwise modify the rights or
obligations of the holders of such options with respect to their acquisition of
shares of Common Stock thereunder.
C. The option/vesting acceleration provisions of Section III of
Article Two relating to Corporate Transactions and Changes in Control may, in
the Plan Administrator's discretion, be extended to one or more stock options
which are outstanding under the Predecessor Plans on the Effective Date of the
Discretionary Option Grant Program but which do not otherwise provide for such
acceleration.
D. The Plan shall terminate upon the EARLIER of (i) December 31, 2004
or (ii) the date on which all shares available for issuance under the Plan shall
have been issued or cancelled pursuant to the exercise, surrender or cash-out of
the options granted under the Plan. However, if the December 1999 Amendment is
not approved by the stockholders at the 2000 Annual Meeting, the clause (i)
termination date will remain August 30, 2003. Upon the termination of the Plan,
all outstanding option grants shall continue to have force and effect in
accordance with the provisions of the instruments evidencing such grants.
V. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares
pursuant to option grants under the Plan shall be used for general corporate
purposes.
VI. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any stock option or
stock appreciation right under the Plan and the issuance of Common Stock upon
the exercise of the stock options or stock appreciation rights granted hereunder
shall be subject to the Corporation's procurement of all approvals and permits
required by regulatory authorities having jurisdiction over the Plan, the stock
options and stock appreciation rights granted under it, and the Common Stock
issued pursuant to it.
19.
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B. No shares of Common Stock or other assets shall be issued or
delivered under this Plan unless and until there shall have been compliance with
all applicable requirements of Federal and State securities laws, including the
filing and effectiveness of the Form S-8 registration statement for the shares
of Common Stock issuable under the Plan, and all applicable listing requirements
of any securities exchange on which stock of the same class is then listed.
VII. NO EMPLOYMENT/SERVICE RIGHTS
Neither the action of the Corporation in establishing the Plan, nor
any action taken by the Plan Administrator hereunder, nor any provision of the
Plan shall be construed so as to grant any individual the right to remain in the
employ or service of the Corporation (or any parent or subsidiary corporation)
for any period of specific duration, and the Corporation (or any parent or
subsidiary corporation retaining the services of such individual) may terminate
such individual's employment or service at any time and for any reason, with or
without cause.
VIII. MISCELLANEOUS PROVISIONS
A. Except to the extent otherwise expressly provided in the Plan, the
right to acquire Common Stock or other assets under the Plan may not be
assigned, encumbered or otherwise transferred by any Optionee.
B. The provisions of the Plan relating to the exercise of options and
the vesting of shares shall be governed by the laws of the State of California
without resort to that State conflict-of-laws rules.
C. The provisions of the Plan shall inure to the benefit of, and be
binding upon, the Corporation and its successors or assigns, whether by
Corporate Transaction or otherwise, and the Optionees, the legal representatives
of their respective estates, their respective heirs or legatees and their
permitted assignees.
20.
