<PAGE> 1
Registration No. 333-______
As filed with the Securities and Exchange Commission on May 19, 1998
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
POST-EFFECTIVE AMENDMENT NO. 1 TO
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. 1995 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)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- - ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
Title of each class of Proposed maximum Proposed maximum Amount of
securities to be Amount to be offering price per aggregate offering registration fee(2)
registered(1) registered(1) share(2) price(2)
- - ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
<S> <C> <C> <C> <C>
Common Stock, par
value $.001 per share 1,000,000 $13.125 $13,125,000 $3,872
======================== ====================== ====================== ======================= ======================
</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 System on May 18, 1998.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
The contents of the Form S-8 Registration Statement under the
Securities Act of 1933, File No. 333-41663, which was filed with the Commission
on December 5, 1997, are incorporated by reference in this Post-Effective
Amendment No. 1 to the Form S-8 Registration Statement.
2
<PAGE> 3
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 18th day
of May, 1998.
Hyseq, Inc.
By: /s/ Lewis S. Gruber
-------------------------
Lewis S. Gruber
President and Chief Executive Officer
3
<PAGE> 4
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 18th day of May, 1998.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Robert D. Weist
- - -------------------
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. Marshall
- - ---------------------
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>
4
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description of Exhibit Page Number
------ ---------------------- -----------
<S> <C> <C>
4.1 Certificate of Incorporation of Hyseq, Inc.*
4.2 By-Laws of Hyseq, Inc.*
4.3 Hyseq, Inc. 1995 Stock Option Plan, as amended
5 Opinion of Sachnoff & Weaver, Ltd.
23 Consent of Ernst & Young LLP, Independent Auditors
24 Powers of Attorney
</TABLE>
* 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.
5
<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.
<PAGE> 2
(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.
2
<PAGE> 3
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
3
<PAGE> 4
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
4
<PAGE> 5
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
5
<PAGE> 6
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
4
<PAGE> 7
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.
7
<PAGE> 8
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.
8
<PAGE> 9
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.
9
<PAGE> 10
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.
10
<PAGE> 11
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
<PAGE> 12
AMENDMENT NO. 2 TO
HYSEQ, INC. STOCK OPTION PLAN
WHEREAS, the Board of Directors of Hyseq, Inc. has approved that
certain Amendment No. 2 to the Hyseq, Inc. Stock Option Plan (the "Plan"),
effective as of March 16, 1998.
NOW, THEREFORE, the Plan is hereby amended as follows:
1. The maximum number of shares of Common Stock which may be issued for
all purposes under Section 1.5 of the Plan shall be increased from 1,152,000 to
2,152,000.
2. The following sentence shall be added at the end of Section 1.5 of
the Plan:
The foregoing notwithstanding, the aggregate number of shares
as to which Options may be granted in any calendar year to any
one Participant shall not exceed 325,000 (subject to
adjustment for stock splits, stock dividends, and other
adjustments described in Section 3.2 hereof).
3. The second paragraph of Section 2.4 of the Plan shall be
amended to read as follows:
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
at the time of exercise. On the date specified in such written
notice, the Company shall accept payment for the Option shares
in cash, by bank or certified check, by wire transfer, or by
such other means as may be approved by the Committee. If
approved in advance by the Committee, payment may also be made
(i) by delivering shares of Common Stock already owned for at
least six (6) months by the Participant and which have a total
Fair Market Value on the date of such delivery equal to the
Option Price; (ii) by authorizing the Company to retain Option
shares that otherwise would be issuable upon exercise of the
Option having a total Fair Market Value on the date of
delivery equal to the Option Price; (iii) by the delivery of
cash or the extension of credit by a broker-dealer to whom the
Participant has submitted a notice of exercise or otherwise
indicated an intent to exercise an Option (in accordance with
part 220, Chapter II, Title 12 of the Code of Federal
Regulations, a so-called "cashless" exercise); or (iv) by any
combination of the foregoing. As soon as practicable after
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.
12
<PAGE> 13
4. Section 2.6 of the Plan shall be amended to read as follows:
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. A Participant who ceases to be an employee for any
reason other than death, disability or termination for cause,
may exercise any Option granted to such Participant, to the
extent that the right to purchase shares thereunder has become
exercisable on the date of such termination, but only within
thirty (30) days after such date, or, if earlier, within the
originally prescribed term of the Option, and subject to the
condition that no Option shall be exercisable after the
expiration of the term of the Option. A Participant who ceases
to be an employee for cause shall, upon such termination,
cease to have any right to exercise any Option. For purposes
of this Plan, "cause" shall be deemed to include (but shall
not be limited to) wrongful appropriation of funds of the
Company, divulging confidential information about the Company
to the public, the commission of a gross misdemeanor or
felony, or the performance of any similar action that the
Board or the Committee, in their sole discretion, may deem to
be sufficiently injurious to the interests of the Company to
constitute substantial cause for termination. The
determination of the Board or the Committee as to the
existence of cause shall be conclusive and binding upon the
Participant and the Company.
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<PAGE> 14
AMENDMENT NO. 3 TO
HYSEQ, INC. STOCK OPTION PLAN
WHEREAS, the Board of Directors of Hyseq, Inc. has approved that
certain Amendment No. 3 to the Hyseq, Inc. Stock Option Plan (the "Plan"),
effective as of March 16, 1998.
NOW, THEREFORE, Section 2.4 of the Plan is hereby amended by adding
the following paragraph at the end of that Section:
In the event of a "change of control," all Options
granted under the Plan, whether or not exercisable at the time
of the change of control, shall become immediately
exercisable. A change of control shall be deemed to occur on
the earliest of (a) the acquisition by any entity, person, or
group of beneficial ownership, as that term is defined in Rule
13d-3 under the Securities Exchange Act of 1934, of more than
50% of the outstanding capital stock of the Company entitled
to vote for the election of directors ("Voting Stock"); (b)
the commencement by any entity, person, or group (other than
the Company or a subsidiary of the Company) of a tender offer
or an exchange offer for more than 50% of the outstanding
Voting Stock of the Company; (c) the effective time of (1) a
merger or consolidation of the Company with one or more
corporations as a result of which the holders of the
outstanding Voting Stock of the Company immediately prior to
such merger hold less than 50% of the Voting Stock of the
surviving or resulting corporation, or (2) a transfer of
substantially all of the property or assets of the Company
other than to an entity of which the Company owns at least 80%
of the Voting Stock; and (d) the election to the Board,
without the recommendation or approval of the incumbent Board,
of the lesser of (1) three directors, or (2) directors
constituting a majority of the number of directors of the
Company then in office.
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<PAGE> 1
EXHIBIT 5
[LETTERHEAD OF SACHNOFF & WEAVER, LTD.]
May 18, 1998
Hyseq, Inc.
670 Almanor Avenue
Sunnyvale, California 94086
Re: Post Effective Amendment No. 1 to Registration Statement on
Form S-8 Hyseq, Inc. 1995 Stock Option Plan
Gentlemen:
We have acted as counsel for Hyseq, Inc. (the "Company") in connection
with the preparation and filing of a Post Effective Amendment to a Registration
Statement on Form S-8 (the "Registration Statement") filed by the Company with
the Securities and Exchange Commission to effect the registration, pursuant to
the Securities Act of 1933, of an additional 1,000,000 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
<PAGE> 2
Hyseq, Inc.
May 18, 1998
Page 2
original documents of all the documents submitted to us as certified or
photostatic copies and the authenticity of the originals of such latter
documents.
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. 1995 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 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 Post Effective Amendment
No. 1 to the Registration Statement (Form S-8 No. 333-41663) pertaining to the
Hyseq, Inc. 1995 Stock Option Plan of our report dated January 30, 1998,
with respect to the consolidated financial statements of Hyseq, Inc. for the
year ended December 31, 1997 included in its Annual Report on Form 10-K, filed
with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Palo Alto, California
May 18, 1998
