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Registration No. 333-_____
As filed with the Securities and Exchange Commission on December 5, 1997
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
-----------------------------
HYSEQ, INC.
(Exact name of registrant as specified in its charter)
NEVADA 36-3855489
(State or other Jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
670 ALMANOR AVENUE (408) 524-8100
SUNNYVALE, CALIFORNIA 94086 (Telephone number, including
(Address, Including Zip Code, of area code, of registrant's
registrant's principal executive offices) principal executive offices)
HYSEQ, INC. STOCK OPTION PLAN
(Full title of the plan)
MR. LEWIS S. GRUBER
PRESIDENT AND CHIEF EXECUTIVE OFFICER
HYSEQ, INC.
670 ALMANOR AVENUE
SUNNYVALE, CALIFORNIA 94086
(Name, address, including zip code and telephone number, including area code,
of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Title of each Proposed maximum Proposed maximum
class of securities Amount to be offering price per aggregate offering Amount of
to be registered(1) registered(1) share(2) price(2) registration fee(2)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par
value $.001 per
share 1,152,000 $11.9375 $13,752,000.00 $4,056.84
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement includes any additional shares of the
registrant's Common Stock that may be issued pursuant to antidilution
provisions contained in the plan.
(2) Pursuant to Rule 457(h), the registration fee was computed on the basis of
the average of the high and low prices of the registrant's Common Stock on the
Nasdaq National Market on December 4, 1997.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which have heretofore been filed by Hyseq, Inc.
(the "Company") with the Securities and Exchange Commission (the "Commission"),
are incorporated by reference in this Registration Statement, except to the
extent that any statement or information therein is modified, superseded or
replaced by a statement or information contained in any other subsequently
filed document incorporated herein by reference:
i. the Company's prospectus dated August 7, 1997 filed pursuant to
Rule 424(b) of the Securities Act of 1933 included as part of the
Company's Registration Statement on Form S-1 (No. 333-29091);
ii. the Company's Quarterly Reports on Form 10-Q for the quarters
ended June 30, 1997 and September 30, 1997; and
iii. the description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A, dated July 23, 1997.
All documents filed by the Company or the plans pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date hereof, and prior to the
filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by the Nevada General Corporation Law, the Company's Articles
and By-Laws provide that officers and directors of the Company shall not be
personally liable for monetary damages to the Company for certain breaches of
their fiduciary duty as directors, unless they violated their duty of loyalty
to the Company or its stockholders, acted in bad faith, knowingly or
intentionally violated the law, authorized illegal dividends or redemptions, or
derived an improper
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personal benefit from their action as directors. This provision would have no
effect on the availability of equitable remedies or nonmonetary relief, such as
an injunction or rescission for breach of the duty of care. Directors will,
however, no longer be liable for monetary damages arising from decisions
involving violations of the duty of care which could be deemed grossly
negligent.
The By-Laws provide that directors of the Company shall be indemnified by
the Company to the fullest extent authorized by Nevada law, as it now exists or
may in the future be amended, against all expenses and liabilities reasonably
incurred in connection with service for or on behalf of the Company. The
By-Laws also authorize the Company to enter into one or more agreements with
any person which provide for indemnification greater or different from that
provided in the Articles. The Company has entered into indemnification
agreements with all current officers and members of the Board of Directors.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
See Exhibit Index which is incorporated herein by reference.
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 (the
"Securities Act");
ii. To reflect in the prospectus any facts or
events arising after the effective date of the
registration statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement;
iii. To include any material information with
respect to the plan of distribution not previously
disclosed in the registration statement or
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<PAGE> 4
any material change to such information in the
registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the registration statement is on Form S-3 or Form
S-8, and the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13
or Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act and each filing of the plan's
annual report pursuant to Section 15(d) of the Exchange Act that is
incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to officers, directors, and
controlling persons of the registrant pursuant to the registrant's
certificate of incorporation or by-laws, or otherwise, the registrant
has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, 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 Sunnyvale, State of California, on
the 4th day of December, 1997.
Hyseq, Inc.
By: /s/ Lewis S. Gruber
-------------------------------------
Lewis S. Gruber
President and Chief Executive Officer
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POWER OF ATTORNEY
Know all men by these presents, that each person whose signature appears
below constitutes and appoints Lewis S. Gruber and Christopher R. Wolf, and
each of them singly, his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities (including his capacity as a director
and/or officer of Hyseq, Inc.) to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned have executed this power of attorney
on the 4th day of December, 1997.
/s/ Lewis S. Gruber
- ------------------------------ -----------------------------------
Robert D. Weist Lewis S. Gruber
/s/ Christopher R. Wolf /s/ Radomir B. Crkvenjakov
- ------------------------------ -----------------------------------
Christopher R. Wolf Radomir B. Crkvenjakov, Ph.D.
/s/ Radoje T. Drmanac /s/ Greta E. Marshall
- ------------------------------ -----------------------------------
Radoje T. Drmanac, Ph.D. Greta E. Marshall
/s/ Raymond F. Baddour /s/ Kenneth D. Noonan
- ------------------------------ -----------------------------------
Raymond F. Baddour, Ph.D. Kenneth D. Noonan, Ph.D.
/s/ Thomas N. McCarter III
- ------------------------------
Thomas N. McCarter III
6
<PAGE> 7
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in their
respective capacities on this 4th day of December, 1997.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
- -----------------------------
Robert D. Weist Chairman of the Board of Directors
/s/ Lewis S. Gruber
- -----------------------------
Lewis S. Gruber President and Chief Executive Officer and Director
(Principal Executive Officer)
/s/ Christopher R. Wolf
- -----------------------------
Christopher R. Wolf Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
/s/ Radoje T. Drmanac
- -----------------------------
Radoje T. Drmanac, Ph.D. Co-Senior Vice President for Research and Director
/s/ Radomir B. Crkvenjakov
- -----------------------------
Radomir B. Crkvenjakov, Ph.D. Co-Senior Vice President for Research and Director
/s/ Raymond F. Baddour
- -----------------------------
Raymond F. Baddour, Ph.D. Director
/s/ Greta E. Marhsall
- -----------------------------
Greta E. Marshall Director
/s/ Thomas N. McCarter III
- -----------------------------
Thomas N. McCarter III Director
/s/ Kenneth D. Noonan
- -----------------------------
Kenneth D. Noonan, Ph.D. Director
</TABLE>
7
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EXHIBIT INDEX
Exhibit
Number Description of Exhibit
- ------- -------------------------------------------
4.1 Certificate of Incorporation of Hyseq,
Inc. as amended to date*
4.2 By-Laws of Hyseq, Inc., as amended to date*
4.3 Hyseq, Inc. Stock Option Plan
5 Opinion of Sachnoff & Weaver, Ltd.
23 Consent of Ernst & Young LLP, Independent
Auditors
24 Powers of Attorney (contained on the page
prior to the signature page hereto)
- ------------------
* Filed as an exhibit to the Company's Registration Statement on Form S-1,
Registration Statement No. 333-29091, declared effective by the Securities
and Exchange Commission on August 7, 1997, and incorporated herein by
reference.
8
<PAGE> 1
EXHIBIT 4.3
HYSEQ, INC.
STOCK OPTION PLAN
ARTICLE I
GENERAL
1.1. STOCK OPTION PLAN; PURPOSE:
Hyseq, Inc., a Nevada corporation (the "Company"), hereby adopts this
Stock Option Plan, subject to stockholder approval. This plan shall be known
as the HYSEQ, INC. STOCK OPTION PLAN (the "Plan"). The purpose of the Plan is
to foster and promote the long-term financial success of the Company and
materially increase stockholder value by: (a) strengthening the Company's
capability to develop, maintain and direct outstanding employees, (b)
motivating superior performance by means of long-term performance related
incentives, (c) encouraging and providing for obtaining an ownership interest
in the Company, (d) attracting and retaining outstanding talent by providing
incentive compensation opportunities competitive with other major companies,
and (e) enabling employees to participate in the long-term growth and financial
success of the Company.
1.2. ADMINISTRATION:
(a) The Plan shall be administered by the Compensation Committee of the
Board of Directors of the Company or such other committee of directors as is
designated by the Board of Directors of the Company (the "Committee"), which
shall consist of two or more members. Each member shall be a "disinterested
person," as that term is defined by Rule 16b-3 promulgated under the Securities
Exchange Act of 1934 (the "Exchange Act") or any similar rule which may
subsequently be in effect ("Rule 16b-3"). The members shall be appointed by
the Board of Directors, and any vacancy on the Committee shall be filled by the
Board of Directors
(b) Subject to the limitations of the Plan, the Committee shall have the
sole and complete authority: (i) to select from the regular, full-time
employees of the Company, those who shall participate in the Plan (a
"Participant" or "Participants"), (ii) to make awards in such forms and amounts
as it shall determine, (iii) to impose such limitations, restrictions and
conditions upon such awards as it shall deem appropriate, (iv) to interpret the
Plan and to adopt, amend and rescind administrative guidelines and other rules
and regulations relating to the Plan, (v) to correct any defect or omission or
to reconcile any inconsistency in this Plan or in any award granted hereunder
and (vi) to make all other determinations and to take all other actions
necessary or advisable for the implementation and administration of the Plan.
The Committee's determinations on matters within its authority shall be
conclusive and binding upon the Company and all other persons.
(c) All expenses associated with the Plan shall be borne by the Company.
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(d) The Committee may, to the extent that any such action will not prevent
the Plan from complying with Rule 16b-3, delegate any of its authority
hereunder to such persons as it deems appropriate.
1.3. SELECTION FOR PARTICIPATION:
Participants shall be selected by the Committee from the employees who
have the capacity to contribute to the success of the Company. In making this
selection and in determining the form and amount of awards, the Committee may
give consideration to the functions and responsibilities of the employee, his
past, present and potential contributions to the Company's profitability and
sound growth, the value of his services to the Company and other factors deemed
relevant by the Committee. Grants may be made to the same individual on more
than one occasion.
1.4. TYPES OF AWARDS UNDER PLAN:
Awards under the Plan may be in the form of statutory stock options
("ISOs," which term shall be deemed to include Incentive Stock Options as
defined in Section 2.5 and any future type of tax qualified option which may
subsequently be authorized) and/or nonstatutory Stock Options ("NSOs" and,
collectively with ISOs, "Options"), as described in Article II.
1.5. SHARES SUBJECT TO THE PLAN:
Shares of stock covered by Options under the Plan may be in whole or in
part authorized and unissued or treasury shares of the Company's common stock,
$.01 par value per share, or such other shares as may be substituted pursuant
to Section 3.2 ("Common Stock"). The maximum number of shares of Common Stock
which may be issued for all purposes under the Plan shall be 300,000 (subject
to adjustment pursuant to Section 3.2). Any shares of Common Stock subject to
an Option which for any reason is canceled or terminated without having been
exercised, shall again be available for Options under the Plan. No fractional
shares shall be issued, and the Committee shall determine the manner in which
fractional share value shall be treated.
1.6. GENDER AND NUMBER:
Except when otherwise indicated by the context, words in the masculine
gender when used in the Plan shall include the feminine gender, the singular
shall include the plural, and the plural shall include the singular.
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ARTICLE II
STOCK OPTIONS
2.1. AWARD OF STOCK OPTIONS:
The Committee may, from time to time, subject to the provisions of the
Plan and such other terms and conditions as the Committee may prescribe, award
to any Participant ISOs and NSOs to purchase Common Stock.
2.2. STOCK OPTION AGREEMENTS:
The award of an Option shall be evidenced by a signed written agreement (a
"Stock Option Agreement") containing such terms and conditions as the Committee
may from time to time determine.
2.3. OPTION PRICE:
The purchase price of Common Stock under each Option (the "Option Price")
shall be: (a) for ISOs, not less than the Fair Market Value of the Common Stock
(110% of the Fair Market Value in the case of an ISO granted to a person
owning, within the meaning of Section 424(d) of the Code, more than 10% of the
total combined voting power of all classes of stock of the Company or its
subsidiaries), on the date the Option is awarded, and (b) for all other
Options, not less than the par value of the Common Stock on the date the Option
is awarded or may be exercised.
2.4. EXERCISE AND TERM OF OPTIONS:
Options awarded under the Plan shall be exercisable at such times and be
subject to such restrictions and conditions as the Committee shall approve,
either at the time of grant of such Options or pursuant to a general
determination, and which need not be the same for all Participants, provided
that, in the case of a grant of an Option to an officer, as that term is used
in Rule 16a-l promulgated under the Exchange Act or any similar rule which may
subsequently be in effect (an "Officer"), the Committee may determine either
(i) no such Option shall be exercisable within the first six months of its term
or (ii) if such Option is exercisable in the first six months of its term, no
Common Stock acquired under such exercise shall be transferable until the six
month anniversary of the date of the grant of the Option. Each Option which is
intended to qualify as an ISO pursuant to Section 422 of the Internal Revenue
Code of 1986, as it may be amended from time to time (the "Code), and each
Option which is intended to qualify as another type of ISO which may
subsequently be authorized by law, shall comply with the applicable provisions
of the Code pertaining to such Options.
The Committee shall establish procedures governing the exercise of Options
and shall require that written notice of exercise be given and that the Option
Price be paid in full in cash (including check, bank draft or money order) at
the time of exercise. As soon as practicable after
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receipt of each notice and full payment, the Company shall deliver to the
Participant a certificate or certificates representing the acquired shares of
Common Stock.
2.5. LIMITATIONS OF ISOS:
Notwithstanding anything in the Plan to the contrary, to the extent
required from time to time by the Code, the following additional provisions
shall apply to the grant of Options which are intended to qualify as ISOs (as
such term is defined in Section 422 of the Code:)
(a) The aggregate Fair Market Value (determined as of the date the Option
is granted) of the shares of Common Stock with respect to which ISOs are
exercisable for the first time by any Participant during any calendar year
(under all plans of the Company) shall not exceed $100,000 or such other amount
as may subsequently be specified by the Code; provided that, to the extent that
such limitation is exceeded, any excess Options (as determined under the Code)
shall be deemed to be NSOs.
(b) Any ISO authorized under the Plan shall contain such other provisions
as the Committee shall deem advisable, but shall in all events be consistent
with and contain or be deemed to contain all provisions required in order to
qualify the Options as ISOs.
(c) All ISOs must be granted within ten years from the earlier of the date
on which this Plan was adopted by the Board of Directors or the date this Plan
was approved by the stockholders.
(d) Unless sooner exercised, terminated or canceled, all ISOs shall expire
no later than ten years after the date of grant.
2.6. TERMINATION OF EMPLOYMENT:
In the event of a Participant's death or disability, each of his
outstanding Options shall be exercisable by the Participant (or his legal
representative or designated beneficiary), to the extent that such Option was
then exercisable, for one year after the Participant's death or disability, but
in no event after its respective expiration date. If the Participant ceases to
be an employee for any other reason, all of the Participant's then outstanding
Options shall terminate immediately.
ARTICLE III
MISCELLANEOUS PROVISIONS
3.1. NON-TRANSFERABILITY:
No Option under the Plan, and no interest therein, shall be transferable
by the Participant otherwise than by will or, if the Participant dies
intestate, by the laws of descent and distribution. All Options shall be
exercisable or received during the Participant's lifetime only by the
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Participant or his legal representative. Any transfer contrary to this Section
3.1 will nullify the Option.
3.2. ADJUSTMENT UPON CERTAIN CHANGES:
(a) If the outstanding shares of Common Stock are increased, decreased or
changed into, or exchanged for, a different number or kind of shares or
securities of the Company through a reorganization or merger in which the
Company is the surviving entity, or through a combination, recapitalization,
reclassification, stock split, stock dividend, stock consolidation or
otherwise, an appropriate adjustment shall be made in the number and kind of
shares that may be issued pursuant to Options. A corresponding adjustment to
the consideration payable with respect to Options granted prior to any such
change shall also be made. Any such adjustment, however, shall be made without
change in the total payment, if any, applicable to the portion of the Option
not exercised but with a corresponding adjustment in the price for each share.
(b) Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving corporation
or upon sale of all or substantially all of the Company's property, the Plan
shall terminate, and any outstanding Options shall terminate and be forfeited.
Notwithstanding the foregoing, the Committee may provide in writing in
connection with, or in contemplation of, any such transaction for any or all of
the following alternatives (separately or in combinations): (i) for the
assumption by the successor corporation of the Options theretofore granted or
the substitution by such corporation for such Options of options covering the
stock of the successor corporation, or a parent or subsidiary thereof, with
appropriate adjustments as to the number and kind of shares and prices; (ii)
for the continuance of the Plan by such successor corporation in which event
the Plan and the Options shall continue in the manner and under the terms so
provided; or (iii) for the payment in cash or shares of Common Stock in lieu of
and in complete satisfaction of such Options.
3.3. TAX WITHHOLDING:
(a) The Company shall have the power to withhold, or require a Participant
to remit to the Company, an amount sufficient to satisfy any withholding or
other tax due from the Company with respect to any amount payable and/or shares
issuable under the Plan, and the Company may defer such payment or issuance
unless indemnified to its satisfaction.
(b) Subject to the consent of the Committee, due to (i) the exercise of a
NSO, or (ii) the issuance of any other stock award under the Plan, a
Participant may make an irrevocable election (an "Election") to (A) have shares
of Common Stock otherwise issuable under (i) withheld, or (B) tender back to
the Company shares of Common Stock received pursuant to (i) or (ii) or (C)
deliver back to the Company pursuant to (i) or (ii) previously acquired shares
of Common Stock of the Company having a Fair Market Value sufficient to satisfy
all or part of the Participant's estimated tax obligations associated with the
transaction. Such Election must be made by a Participant prior to the date on
which the relevant tax obligation arises (the "Tax Date"). The Committee may
disapprove of any Election, may suspend or terminate the right to
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make Elections, or may provide with respect to any Option under this Plan that
the right to make Elections shall not apply to such Options.
(c) If a Participant is an Officer, then an Election is subject to the
following additional restrictions:
(i) No Election shall be effective for a Tax Date which occurs within
six months of the grant of the award.
(ii) The Election must be made and must be effective during a period
beginning on the third business day following the date of release for
publication of the Company's quarterly or annual summary statements of
sales and earnings and ending on the twelfth business day following such
date.
3.4. CONDITIONS ON OPTIONS:
In addition to the other terms hereof, in the event of the termination of
the employment of a Participant, by reason of disability while holding any
Option, the rights of such Participant to any such Option shall be subject to
the conditions that until any such Option is exercised, he shall (a) not
engage, either directly or indirectly, in any manner or capacity as advisor,
principal, agent, partner, officer, director, employee, member of any
association or otherwise, in any business or activity which is at the time
competitive with any business or activity conducted by the Company and (b) be
available, unless he shall have died, at reasonable times for consultations
(which shall not require substantial time or effort) at the request of the
Company's management with respect to phases of the business with which he was
actively connected, but such consultations shall not be required to be
performed at any place or places outside of the United States of America or
during usual vacation periods or periods of illness or other incapacity. In the
event that either of the above conditions is not fulfilled, the Participant
shall forfeit all rights to any unexercised Option held on the date of the
breach of condition. Any determination by the Board of Directors of the
Company, which shall act upon the recommendation of the Chairman, that the
Participant is, or has, engaged in a competitive business or activity as
aforesaid or has not been available for consultations as aforesaid shall be
conclusive.
3.5. AMENDMENT, SUSPENSION AND TERMINATION OF PLAN:
(a) The Board of Directors may suspend or terminate the Plan or any
portion thereof at any time and may amend it from time to time in such respects
as the Board of Directors may deem advisable in order that any Options
thereunder shall conform to or otherwise reflect any change in applicable laws
or regulations, or to permit the Company or its employees to enjoy the benefits
of any change in applicable law or regulations, or in any other respect the
Board of Directors may deem to be in the best interests of the Company;
provided, however, that no such amendment shall, without stockholder approval
to the extent required by law, agreement or the rules of any exchange upon
which the Common Stock is listed, (i) except as provided in Section 3.2,
materially increase the number of shares of Common Stock which may be issued
under the
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Plan, (ii) materially modify the requirements as to eligibility for
participation in the Plan, (iii) materially increase the benefits accruing to
Participants under the Plan, or (iv) extend the termination date of the Plan.
No such amendment, suspension or termination shall (A) impair the rights of
Participants under outstanding Options without the consent of the Participants
affected thereby or (B) make any change that would disqualify the Plan, or any
other plan of the Company intended to be so qualified, from the exemption
period provided by Rule 16b-3.
(b) The Committee may amend or modify any outstanding Options, in any
manner to the extent that the Committee would have had the authority under the
Plan to initially award such Options, as so modified or amended, including
without limitation, to change the date or dates as of which such Options may be
exercised. No such amendment or modification shall impair the rights of any
Participant under any such Option without the consent of such Participant.
3.6. DEFINITIONS AND OTHER GENERAL PROVISIONS:
(a) The term "disability" as used under the Plan shall mean a finding by
the Committee that a Participant is fully and permanently unable to be
gainfully employed because of a physical or mental disability.
(b) The term "Fair Market Value" as it relates to Common Stock on any
given date means (i) the mean of the high and low sales prices of the Company's
Common Stock as reported by the Composite Tape of the New York Stock Exchange
(or, if not so reported, on any domestic stock exchanges on which the Common
Stock is then listed); or (ii) if the Common Stock is not listed on any
domestic stock exchange, the mean of the high and low sales prices of the
Company's Common Stock as reported by the National Association of Securities
Dealers Automated Quotation System (or, if not so reported, by the system then
regarded as the most reliable source of such quotations) or, if there are no
reported sales on such date, the mean of the closing bid and asked prices as so
reported; or, (iii) if the Common Stock is listed on a domestic exchange or
quoted in the domestic over-the-counter market, but there are not reported
sales or quotations, as the case may be, on the given date, the value
determined pursuant to (i) or (ii) above using the reported sale prices or
quotations on the last previous date on which so report; or (iv) if none of the
foregoing clauses apply, the fair value as determined in good faith by the
Company's Board of Directors or the Committee.
(c) The adoption of the Plan shall not preclude the adoption by
appropriate means of any other stock option or other incentive plan for
employees.
3.7. NON-UNIFORM DETERMINATIONS:
The Committee's determinations under the Plan, including without
limitation, (a) the determination of the Participants to receive options, (b)
the form, amount and timing of such Options, (c) the terms and provisions of
such Options and (d) the agreements evidencing the same, need not be uniform
and may be made by it selectively among Participants who receive, or who are
eligible to receive, Options under the Plan, whether or not such Participants
are similarly situated.
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3.8. LEAVES OF ABSENCE; TRANSFERS:
The Committee shall be entitled to make such rules, regulations and
determinations as it deems appropriate under the Plan in respect of any leave
of absence from the Company granted to a Participant. Without limiting the
generality of the foregoing, the Committee shall be entitled to determine (a)
whether or not any such leave of absence shall be treated as if the Participant
ceased to be an employee and (b) the impact, if any, of any such leave of
absence on Options under the Plan. In the event a Participant transfers within
the Company, such Participant shall not be deemed to have ceased to be an
employee for purposes of the Plan.
3.9. LISTING, REGISTRATION AND LEGAL COMPLIANCE:
Each Option shall be subject to the requirement that if at any time the
Committee shall determine, in its discretion, that the listing, registration or
qualification of such Option, or any shares of Common Stock or other property
subject thereto, upon any securities exchange or under any foreign, federal or
state securities or other law or regulation, or the consent or approval of any
governmental body or the taking of any other action to comply with or otherwise
with respect to any such law or regulation, is necessary or desirable as a
condition to or in connection with the granting of such Option or the issue,
delivery or purchase of shares of Common Stock or other property thereunder, no
such Option may be exercised or paid in Common Stock or other property unless
such listing, registration, qualification, consent, approval or other action
shall have been effected or obtained free of any conditions not acceptable to
the Committee and the holder of the Option will supply the Company with such
certificates, representations and information as the Company shall request and
shall otherwise cooperate with the Company in effecting or obtaining such
listing, registration, qualification, consent, approval or other action. In the
case of officers and other persons subject to Section 16(b) of the Exchange
Act, the Committee may at any time impose any limitations upon the exercise,
delivery or payment of any Option which, in the discretion of the Committee,
are necessary or desirable in order to comply with Section 16(b) and the rules
and regulations thereunder. If the Company, as part of an offering of
securities or otherwise, finds it desirable because of foreign, federal or
state legal or regulatory requirements to reduce the period during which
Options may be exercised, the Committee may, in its discretion and without the
holders' consent, so reduce such period on not less than 15 days written notice
to the holders thereof.
3.10. LOANS:
The Committee may provide for the Company to make loans to finance the
exercise of any Option as well as the estimated or actual amount of any taxes
payable by the holder as a result of the exercise or payment of any Option and
may prescribe, or may empower the Company to prescribe, the other terms and
conditions (including but not limited to the interest rate, maturity date and
whether the loan will be secured or unsecured) of any such loan.
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3.11. INDEMNIFICATION:
Each person who is or shall have been a member of the Committee shall be
indemnified and held harmless by the Company against and from any loss, cost,
liability, or expense that may be imposed upon or reasonably incurred by him in
connection with or resulting from any claim, action, suit, or proceeding to
which he may be a party or in which he may be involved by reason of any action
taken or failure to act under the Plan and against and from any and all amounts
paid by him in settlement thereof, with the Company's approval, or paid by him
in satisfaction of any judgment in any such action, suit, or proceeding against
him, provided he shall give the Company an opportunity, at its own expense, to
handle and defend the same before he undertakes to handle and defend it on his
own behalf. The foregoing right of indemnification shall not be exclusive of
any other rights of indemnification to which such persons may be entitled under
the Company's Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold
them harmless.
3.12. BENEFICIARY DESIGNATION:
Each Participant under the Plan may name, from time to time, any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his death before he
receives any or all of such benefit. Each designation will revoke all prior
designations by the same Participant, shall be in a form prescribed by the
Committee, and will be effective only when filed by the Participant in writing
with the Committee during his lifetime. In the absence of any such designation,
benefits remaining unpaid at the Participant's death shall be paid to his
estate.
3.13. RIGHTS OF PARTICIPANTS:
Nothing in the Plan shall interfere with or limit in any way the right of
the Company to terminate any Participant's employment at any time, nor confer
upon any Participant any right to continue in the employ of the Company for any
period of time or to continue his present or any other rate of compensation. No
employee shall have a right to be selected as a Participant, or, having been so
selected, to be selected again as a Participant.
3.14. REQUIREMENTS OF LAW, GOVERNING LAW:
The granting of Options and the issuance of shares of Common Stock shall
be subject to all applicable laws, rules and regulations, and to such approvals
by any governmental agencies or national securities exchanges as may be
required. The Plan, and all agreements hereunder, shall be construed in
accordance with and governed by the laws of the State of Delaware. The
provisions of the Plan shall be interpreted so as to comply with the conditions
or requirements of Rule 16b-3 under the Exchange Act, unless a contrary
interpretation of any such provisions is otherwise required by applicable law.
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3.15. EFFECTIVE DATE:
This Stock Option Plan, having been approved by the holders of a majority
of the shares of Common Stock and Series A Preferred Stock at the Annual
Meeting of the Stockholders held on May 25, 1995, shall be deemed effective as
of May 25, 1995. No awards of Options shall be made hereunder after May 24,
2005.
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Amendment No. 1
to
Hyseq, Inc. Stock Option Plan
WHEREAS, the Board of Directors and the Stockholders of Hyseq, Inc. have
approved that certain amendment to Section 1.5 of the Hyseq, Inc. Stock Option
Plan effective as of April 16, 1997 (the "Stock Option Plan").
NOW, THEREFORE, Section 1.5 of the Stock Option Plan is hereby amended to
increase the maximum number of shares of Common Stock which may be issued for
all purposes under the Stock Option Plan from 300,000 to 600,000.
All other provisions of the Stock Option Plan remain in full force and
effect.
11
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EXHIBIT 5
December 4, 1997
Hyseq, Inc.
670 Almanor Avenue
Sunnyvale, California 94086
Re: Registration Statement on Form S-8
Hyseq, Inc. Stock Option Plan
Gentlemen:
We have acted as counsel for Hyseq, Inc. (the "Company") in connection
with the Registration Statement on Form S-8 filed by the Company with the
Securities and Exchange Commission to effect the registration, pursuant to the
Securities Act of 1933, of 1,152,000 shares of common stock, $0.001 par value
(the "Common Stock"), which may be offered by the Company under the
above-referenced Plan.
In connection with this opinion, we have relied as to matters of fact,
without investigation, upon certificates of public officials and others and
upon affidavits, certificates and statements of directors, officers and
employees of, and the accountants for, the Company. We also have examined
originals or copies, certified or otherwise identified to our satisfaction, of
such corporate and other instruments, documents and records as we have deemed
relevant and necessary to examine for the purpose of this opinion, including
the Plan. In addition, we have reviewed such questions of law as we have
considered necessary and appropriate for the purposes of this opinion.
We have assumed the accuracy and completeness of all documents and records
that we have reviewed, the genuineness of all signatures, the due authority of
the parties signing such documents, the authenticity of all documents submitted
to us as originals, the conformity to original documents of all the documents
submitted to us as certified or photostatic copies and the authenticity of the
originals of such latter documents.
<PAGE> 2
Hyseq, Inc.
December 4, 1997
Page
Based upon and subject to the foregoing, we advise you that, in our
opinion, the shares of Common Stock proposed to be offered by the Company as
set forth in the Registration Statement have been duly authorized and, when
issued and sold as set forth in the Registration Statement, and in accordance
with the Hyseq, Inc. Stock Option Plan referred to in the Registration
Statement, such shares will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
above-referenced Registration Statement. In giving this consent, we do not
hereby admit that we are in the category of persons whose consent is required
under Section 7 of the Securities Act of 1933 or the rules and regulations of
the Securities and Exchange Commission.
We express no opinions as to matters under or involving any laws other
than the laws of the State of Illinois, the Federal laws of the United States
of America, and the General Corporation Law of the State of Nevada.
Very truly yours,
/s/ Sachnoff & Weaver, Ltd.
SACHNOFF & WEAVER, LTD.
<PAGE> 1
Exhibit 23
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the Hyseq, Inc. Stock Option Plan of our report dated
February 20, 1997, except for Note 10 as to which the date is July 31, 1997,
with respect to the financial statements of Hyseq, Inc. for the year ended
December 31, 1996 included in its Prospectus dated August 7, 1997, filed with
the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Palo Alto, California
December 4, 1997
