As filed with the Securities and Exchange Commission on August 1, 1996
================================================================================
Registration No. 333-_________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
SUGEN, Inc.
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
------------------------
DELAWARE 13-3629196
- ------------------------- ------------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
------------------------
515 Galveston Drive
Redwood City, California 94063
(415) 306-7700
------------------------------------------------------------
(Address and telephone number of principal executive offices)
------------------------
LONG-TERM OBJECTIVES STOCK OPTION PLAN FOR SENIOR MANAGEMENT
------------------------------------------------------------
(Full title of the plans)
Stephen Evans-Freke
Chairman of the Board
SUGEN, Inc.
515 Galveston Drive
Redwood City, California 94063
(415) 306-7700
- --------------------------------------------------------------------------------
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------
Copies to:
Brian C. Cunningham, Esq.
Cooley Godward Castro Huddleson & Tatum
Five Palo Alto Square
Palo Alto, CA 94306
(415) 843-5000
------------------------
<PAGE>
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
=========================================================================================================================
Title of Proposed Maximum Proposed Maximum
Securities to Amount to be Offering Price Per Aggregate Offering Amount of
be Registered Registered Share Price (1) Registration Fee
=========================================================================================================================
<S> <C> <C> <C> <C>
Common Stock 45,000 shares $9.67 (1) $435,150 (1) $150.05
issuable upon
exercise of
stock options
issued pursuant
to the terms of
the Long-Term
Objectives
Stock Option
Plan for Senior
Management
=========================================================================================================================
<FN>
- --------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(c) and (h). The price per share is
based upon the exercise price of the stock option grants.
</FN>
</TABLE>
- --------------------------------------------------------------------------------
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective.
2
<PAGE>
INCORPORATION BY REFERENCE OF CONTENTS OF REGISTRATION
STATEMENT ON FORM S-8 NO. 33-99152
The contents of Registration Statement on Form S-8 No. 33-99152 filed with
the Securities and Exchange Commission on November 9, 1995 are incorporated by
reference herein.
EXHIBITS
Exhibit
Number
5.1 Opinion of Cooley Godward Castro Huddleson & Tatum.
23.1 Consent of Ernst & Young LLP, independent auditors
23.2 Consent of Cooley Godward Castro Huddleson & Tatum is contained in Exhibit
5 to this Registration Statement.
24 Power of Attorney is contained on the signature pages.
99.1 Long-Term Objectives Stock Option Plan for Senior Management, as amended
as of May 23, 1996.
3
<PAGE>
SIGNATURES
The Registrant. 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 Redwood City, County of San Mateo,
State of California, on July 30, 1996.
SUGEN, Inc.
By /s/ Stephen Evans-Freke
---------------------------------------
Stephen Evans-Freke
Chief Executive Officer and
Chairman of the Board
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Stephen Evans-Freke and Christine E.
Gray-Smith, and each or any one of them, his true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, 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 connection therewith, 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 substitutes or
substitute, may lawfully do or cause to be done by virtue hereof.
<TABLE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Stephen Evans-Freke Chief Executive Officer and July 30, 1996
- ------------------------------ Chairman of the Board
(Stephen Evans-Freke) (Principal Executive Officer)
/s/ Christine E. Gray-Smith Senior Director of Finance July 30, 1996
- ------------------------------ (Principal Financial and
(Christine E. Gray-Smith) Accounting Officer)
- ------------------------------ Director , 1996
(Axel Ullrich)
/s/ Richard D. Spizzirri Director July 30, 1996
- ------------------------------
(Richard D. Spizzirri)
4
<PAGE>
/s/ Anthony B. Evnin Director July 30, 1996
- ------------------------------
(Anthony B. Evnin)
/s/ Charles M. Hartman Director July 30, 1996
- ------------------------------
(Charles M. Hartman)
/s/ Heinrich Kuhn Director July 30, 1996
- ------------------------------
(Heinrich Kuhn)
/s/ Donald E. Nickelson Director July 30, 1996
- ------------------------------
(Donald E. Nickelson)
/s/ Bruce R. Ross Director July 30, 1996
- ------------------------------
(Bruce R. Ross)
/s/ Glenn S. Utt, Jr. Director July 30, 1996
- ------------------------------
(Glenn S. Utt, Jr.)
/s/ Michael A. Wall Director July 30, 1996
- ------------------------------
(Michael A. Wall)
</TABLE>
5
<PAGE>
<TABLE>
EXHIBIT INDEX
<CAPTION>
Exhibit Sequential
Number Description Page Number
<S> <C> <C>
5.1 Opinion of Cooley Godward Castro Huddleson & Tatum. 7
23.1 Consent of Ernst & Young LLP, independent auditors 8
23.2 Consent of Cooley Godward Castro Huddleson & Tatum is contained 7
in Exhibit 5 to this Registration Statement.
24 Power of Attorney is contained on the signature pages. 3
99.1 Long-Term Objectives Stock Option Plan for Senior Management, as amended 9
as of May 23, 1996.
</TABLE>
6
Exhibit 5.1
COOLEY GODWARD
COOLEY GODWARD CASTRO HUDDLESON & TATUM
ATTORNEYS AT LAW San Francisco, CA
415 693-2000
Menlo Park, CA
415 843-5000
Five Palo Alto Square
3000 El Camino Real San Diego, CA
Palo Alto, CA 619 550-6000
94306-2155
MAIN 415 843-5000 Boulder, CO
FAX 415 857-0663 303 546-4000
Denver, CO
WEB http://www.cooley.com 303 606-4800
July 30, 1996
SUGEN, Inc.
515 Galveston Drive
Redwood City, CA 94063-4720
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by SUGEN, Inc. (the "Company") of a Registration Statement on
Form S-8 (the "Registration Statement") with the Securitites and Exchange
Commission covering the offering of up to an additional 45,000 shares of the
Company's Common Stock, $.01 par value, (the "Shares") pursuant to its 1995
Long-Term Objectives Stock Option Plan (the "Plan").
In connection with this opinion, we have examined the Registration Statement and
related Prospectus, your Certificate of Incorporation and Bylaws, as amended,
and such other documents, records, certificates, memoranda and other instruments
as we deem necessary as a basis for this opinion. We have assumed the
genuineness and authenticity of all documents submitted to us as originals, the
conformity to originals of all documents submitted to us as copies thereof, and
the due execution and delivery of all documents where due execution and delivery
are a prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Shares, when sold and issued in accordance with the Plans, the
Registration Statement and related Prospectus, will be validly issued, fully
paid, and nonassessable (except as to shares issued pursuant to certain deferred
payment arrangements, which will be fully paid and nonassessable when such
deferred payments are made in full).
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
COOLEY GODWARD CASTRO
HUDDLESON & TATUM
By: /s/ GREGORY C. SMITH
------------------------
Gregory C. Smith
7
Exhibit 23.1
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the SUGEN, Inc. Long-Term Objectives Stock Option Plan for
Senior Management of our report dated February 2, 1996, with respect to the
financial statements of SUGEN, Inc. included in its Annual Report (Form 10-K)
for the year ended December 31, 1995, filed with the Securities and Exchange
Commission.
ERNST & YOUNG LLP
Palo Alto, California
July 29, 1996
8
Exhibit 99.1
SUGEN, INC.
LONG-TERM OBJECTIVES STOCK OPTION PLAN
FOR SENIOR MANAGEMENT
Adopted July 26, 1995
Amended by the Board of Directors on December 19, 1995
Approved by the Stockholders on May 23, 1996.
1. PURPOSES.
(a) The purpose of the Plan is to provide a means by which Senior
Management Employees of the Company, and its Affiliates, may be given an
opportunity to purchase stock of the Company.
(b) The Company, by means of the Plan, seeks to provide incentives for
Senior Management Employees to exert maximum efforts for the success of the
Company.
(c) The Company intends that the Options issued under the Plan shall,
in the discretion of the Compensation Committee, be either Incentive Stock
Options or Nonstatutory Stock Options. All Options shall be separately
designated Incentive Stock Options or Nonstatutory Stock Options at the time of
grant, and in such form as issued pursuant to section 6, and a separate
certificate or certificates will be issued for shares purchased on exercise of
each type of Option.
2. DEFINITIONS.
(a) "Affiliate" means any parent corporation or subsidiary corporation,
whether now or hereafter existing, as those terms are defined in Sections 424(e)
and (f) respectively, of the Code.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Compensation Committee" means the Compensation Committee of the
Board.
(e) "Company" means SUGEN, Inc., a Delaware corporation.
(f) "Continuous Status as an Employee or Director" means the employment
or relationship as a Director is not interrupted or terminated by the Company or
any Affiliate. The Compensation Committee, in its sole discretion, may determine
whether Continuous Status as an Employee or Director shall be considered
interrupted in the case of: (i) any leave of absence approved by the Board,
including sick leave, military leave, or any other personal leave; provided,
however, that for purposes of Incentive Stock Options, any such leave may not
exceed ninety (90) days, unless reemployment upon the expiration of such leave
is guaranteed by contract (including certain Company policies) or statute; or
(ii) transfers between locations of the Company or between the Company,
Affiliates or its successor.
(g) "Director" means a member of the Board.
(h) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
(i) "Employee" means any person, including Officers and Directors,
employed by the Company or any Affiliate of the Company. Neither service as a
Director nor payment of a Director's fee by the Company shall be sufficient to
constitute "employment" by the Company.
<PAGE>
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(k) "Fair Market Value" means, as of any date, the value of the common
stock of the Company determined as follows:
(1) If the common stock is listed on any established stock
exchange or a national market system, including without limitation the National
Market System of the National Association of Securities Dealers, Inc. Automated
Quotation ("Nasdaq") System, the Fair Market Value of a share of common stock
shall be the closing sales price for such stock as quoted on such system or
exchange (or the exchange with the greatest volume of trading in common stock)
on the last market trading day prior to the day of determination, as reported in
the Wall Street Journal or such other source as the Board deems reliable;
(2) If the common stock is quoted on the Nasdaq System (but
not on the National Market System thereof) or is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a share of common stock shall be the mean between the high bid
and high asked prices for the common stock on the last market trading day prior
to the day of determination, as reported in the Wall Street Journal or such
other source as the Board deems reliable;
(3) In the absence of an established market for the common
stock, the Fair Market Value shall be determined in good faith by the Board.
(l) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(m) "Nonstatutory Stock Option" means an Option not intended to qualify
as an Incentive Stock Option.
(n) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(o) "Option" means a stock option granted pursuant to the Plan.
(p) "Option Agreement" means a written agreement between the Company
and an Optionee evidencing the terms and conditions of an individual Option
grant. The Option Agreement is subject to the terms and conditions of the Plan.
(q) "Optioned Stock" means the common stock of the Company subject to
an Option.
(r) "Optionee" means an Employee or Director who holds an outstanding
Option.
(s) "Plan" means this SUGEN, Inc. Long-Term Objectives Stock Option
Plan for Senior Management.
(t) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor
to Rule 16b-3, as in effect when discretion is being exercised with respect to
the Plan.
(u) "Senior Management Employee" means an Employee who is also one of
the five (5) most highly compensated Officers of the Company or an Affiliate on
an annualized basis.
3. ADMINISTRATION.
(a) The Plan shall be administered in compliance with the requirements
of Rule 16b-3 unless the Board expressly determines that, with respect to a
particular grant or grants, such requirement shall not apply.
(b) The Plan shall be administered by the Compensation Committee unless
and until the Board arrogates to itself any or all of the powers and
responsibilities allocated to the Compensation Committee
<PAGE>
under the Plan. If the Board does assume administration of the Plan, references
in this Plan to the Compensation Committee shall thereafter be to the Board.
(c) The Compensation Committee shall have the power, subject to, and
within the limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the persons
eligible under the Plan shall be granted Options; when and how the Option shall
be granted; whether the Option will be an Incentive Stock Option or a
Nonstatutory Stock Option; the provisions of each Option granted (which need not
be identical), including the time or times such Option may be exercised in whole
or in part; and the number of shares for which an Option shall be granted to
each such person.
(2) To construe and interpret the Plan and Options granted
under it, and to establish, amend and revoke rules and regulations for its
administration. The Compensation Committee, in the exercise of this power, may
correct any defect, omission or inconsistency in the Plan or in any Option
Agreement, in a manner and to the extent it shall deem necessary or expedient to
make the Plan fully effective.
(3) To amend the Plan as provided in Section 11.
(4) Generally, to exercise such powers and to perform such
acts as the Compensation Committee deems necessary or expedient to promote the
best interests of the Company.
4. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of Section 10 relating to adjustments
upon changes in stock, the stock that may be sold pursuant to Options shall not
exceed in the aggregate two hundred seventy thousand (270,000) shares of the
Company's common stock. If any Option shall for any reason expire or otherwise
terminate without having been exercised in full, the stock not purchased under
such Option shall again become available for the Plan.
(b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.
5. ELIGIBILITY.
(a) Incentive Stock Options and Nonstatutory Stock Options may be
granted under the Plan only to Senior Management Employees.
(b) No person shall be eligible for the grant of an Incentive Stock
Option if, at the time of grant, such person owns (or is deemed to own pursuant
to Section 424(d) of the Code) stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or of any
of its Affiliates unless the exercise price of such Option is at least one
hundred ten percent (110%) of the Fair Market Value of such stock at the date of
grant and the Incentive Stock Option is not exercisable after the expiration of
five (5) years from the date of grant.
6. OPTION PROVISIONS.
Each Option shall be in such form and shall contain such terms and
conditions as the Compensation Committee shall deem appropriate. The provisions
of separate Options need not be identical, but each Option shall include
(through incorporation of provisions hereof by reference in the Option or
otherwise) the substance of each of the following provisions:
(a) Term. No Option shall be exercisable after the expiration of ten
(10) years from the date it was granted.
<PAGE>
(b) Price. The exercise price of each Incentive Stock Option shall be
not less than one hundred percent (100%) of the fair market value of the stock
subject to the Option on the date the Option is granted. The exercise price of
each Nonstatutory Stock Option shall be established at the time of grant by the
Compensation Committee.
(c) Consideration. The purchase price of stock acquired pursuant to an
Option shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the time the option is exercised, or (ii) at
the discretion of the Compensation Committee, at the time of the grant of the
Option (or, in the case of a Nonstatutory Stock Option, either at the time of
the grant or exercise of the Option): (A) by delivery to the Company of other
common stock of the Company, (B) according to a deferred payment or other
arrangement (which may include, without limiting the generality of the
foregoing, the use of other common stock of the Company) with the person to whom
the Option is granted or to whom the Option is transferred pursuant to
subsection 6(d), or (C) in any other form of legal consideration that may be
acceptable to the Compensation Committee.
In the case of any deferred payment arrangement, interest shall be
payable at least annually and shall be charged at the minimum rate of interest
necessary to avoid the treatment as interest, under any applicable provisions of
the Code, of any amounts other than amounts stated to be interest under the
deferred payment arrangement.
(d) Transferability. An Incentive Stock Option shall not be
transferable except by will or by the laws of descent and distribution, and
shall be exercisable during the lifetime of the person to whom the Incentive
Stock Option is granted only by such person. A Nonstatutory Stock Option shall
not be transferable except by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or Title
I of the Employee Retirement Income Security Act, or the rules thereunder (a
"QDRO"), and shall be exercisable during the lifetime of the person to whom the
Option is granted only by such person or any transferee pursuant to a QDRO. The
person to whom the Option is granted may, by delivering written notice to the
Company, in a form satisfactory to the Company, designate a third party who, in
the event of the death of the Optionee, shall thereafter be entitled to exercise
the Option.
(e) Vesting. The total number of shares of stock subject to an Option
may, but need not, become exercisable ("vest") in accordance with the following
methods or combination of methods:
(1) An option may vest in periodic installments (which may,
but need not, be equal). The Option Agreement may provide that from time to time
during each of such installment periods, the Option may vest with respect to
some or all of the shares allotted to that period, and may be exercised with
respect to some or all of the shares allotted to such period and/or any prior
period as to which the Option became vested but was not fully exercised. During
the remainder of the term of the Option (if its term extends beyond the end of
the installment periods), the Option may be exercised from time to time with
respect to any vested shares then remaining subject to the Option.
(2) An Option may vest with respect to some or all of the
shares upon the achievement of long-term objectives established by the
Compensation Committee. The date of the attainment of such long-term objectives
shall be the date as reasonably determined by the Compensation Committee. The
Option Agreement may provide for vesting as to a portion of the number of shares
subject to the Option if, in the sole discretion of the Compensation Committee,
such partial vesting is warranted based on the occurrence of significant
progress toward the achievement of the applicable long-term objectives. During
the remainder of the term of the Option (if its term extends beyond the date of
the attainment of the long-term objectives), the Option may be exercised from
time to time with respect to any vested shares then remaining subject to the
Option. Any shares subject to an Option which remain unvested after the
determination by the Compensation Committee regarding the achievement of the
applicable long-term objectives shall be canceled and the shares covered by the
unexercisable portion of the Option shall revert to the Plan.
(3) The Option may, but need not, vest in accordance with any
other method determined by the Compensation Committee.
The provisions of this subsection 6(e) are subject to any Option
provisions governing the minimum number of shares as to which an Option may be
exercised.
<PAGE>
(f) Securities Law Compliance. The Company may require any Optionee, or
any person to whom an Option is transferred under subsection 6(d), as a
condition of exercising any such Option, (1) to give written assurances
satisfactory to the Company as to the Optionee's knowledge and experience in
financial and business matters and/or to employ a purchaser representative
reasonably satisfactory to the Company who is knowledgeable and experienced in
financial and business matters, and that he or she is capable of evaluating,
alone or together with the purchaser representative, the merits and risks of
exercising the Option; and (2) to give written assurances satisfactory to the
Company stating that such person is acquiring the stock subject to the Option
for such person's own account and not with any present intention of selling or
otherwise distributing the stock. These requirements, and any assurances given
pursuant to such requirements, shall be inoperative if (i) the issuance of the
shares upon the exercise of the Option has been registered under a then
currently effective registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), or (ii) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not
be met in the circumstances under the then applicable securities laws.
(g) Termination of Employment or Relationship as a Director. In the
event an Optionee's Continuous Status as an Employee terminates (other than upon
the Optionee's death or Disability), the Optionee may exercise his or her
Option, but only within such period of time as is determined by the Compensation
Committee, and only to the extent that the Optionee was entitled to exercise it
at the date of termination as determined by the Compensation Committee (but in
no event later than the expiration of the term of such Option as set forth in
the Option Agreement). In the event that an Optionee's status as a Director
continues beyond termination of the employment relationship, the Compensation
Committee shall determine whether vesting and/or the Optionee's entitlement to
exercise the Option shall continue by virtue of such Continuous Status as a
Director. In the case of an Incentive Stock Option, the Compensation Committee
shall determine at the time that the Option is granted the period of time during
which the Option may be exercised following termination of employment (generally
not to exceed three (3) months from the date of termination) and whether
Continuous Status as a Director shall operate to continue vesting and the
Optionee's entitlement to exercise the Option. If, at the date of termination of
the Optionee's Continuous Status as an Employee (or, if applicable, of the
Optionee's Continued Status as a Director) under this subsection 6(g), the
Optionee is not entitled to exercise his or her entire Option, the shares
covered by the unexercisable portion of the Option shall revert to the Plan. If,
after such termination, the Optionee does not exercise his or her Option within
the time specified in the Option Agreement, the Option shall terminate, and the
shares covered by such Option shall revert to the Plan.
(h) Disability of Optionee. In the event an Optionee's Continuous
Status as an Employee (or, if applicable, as a Director) terminates as a result
of the Optionee's Disability, the Optionee may exercise his or her Option, but
only within twelve (12) months from the date of such termination (or such
shorter period specified in the Option Agreement), and only to the extent that
the Optionee was entitled to exercise it at the date of such termination (but in
no event later than the expiration of the term of such Option as set forth in
the Option Agreement). If, at the date of termination, the Optionee is not
entitled to exercise his or her entire Option, the shares covered by the
unexercisable portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the shares covered by such
Option shall revert to the Plan.
(i) Death of Optionee. In the event of the death of an Optionee, the
Option may be exercised, at any time within twelve (12) months following the
date of death (or such shorter period specified in the Option Agreement) (but in
no event later than the expiration of the term of such Option as set forth in
the Option Agreement), by the Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, but only to the extent
the Optionee was entitled to exercise the Option at the date of death. If, at
the time of death, the Optionee was not entitled to exercise his or her entire
Option, the shares covered by the unexercisable portion of the Option shall
revert to the Plan. If, after death, the Optionee's estate or a person who
acquired the right to exercise the Option by bequest or inheritance does not
exercise the Option within the time specified herein, the Option shall
terminate, and the shares covered by such Option shall revert to the Plan.
<PAGE>
(j) Early Exercise. The Option may, but need not, include a provision
whereby the Optionee may elect at any time while an Employee or Director to
exercise the Option as to any part or all of the shares subject to the Option
prior to the full vesting of the Option. Any unvested shares so purchased shall
be subject to a repurchase right in favor of the Company or to any other
restriction the Compensation Committee determines to be appropriate.
(k) Withholding. To the extent provided by the terms of an Option
Agreement, the Optionee may satisfy any federal, state or local tax withholding
obligation relating to the exercise of such Option by any of the following means
or by a combination of such means: (1) tendering a cash payment; (2) authorizing
the Company to withhold shares from the shares of the common stock otherwise
issuable to the Optionee as a result of the exercise of the Option; or (3)
delivering to the Company owned and unencumbered shares of the common stock of
the Company.
7. COVENANTS OF THE COMPANY.
(a) During the terms of the Options, the Company shall keep available
at all times the number of shares of stock required to satisfy such Options.
(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the Options; provided, however,
that this undertaking shall not require the Company to register under the
Securities Act either the Plan, any Option or any stock issued or issuable
pursuant to any such Option. If, after reasonable efforts, the Company is unable
to obtain from any such regulatory commission or agency the authority which
counsel for the Company deems necessary for the lawful issuance and sale of
stock under the Plan, the Company shall be relieved from any liability for
failure to issue and sell stock upon exercise of such Options unless and until
such authority is obtained.
8. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to Options shall constitute
general funds of the Company.
9. MISCELLANEOUS.
(a) The Compensation Committee shall have the power to accelerate the
time at which an Option may first be exercised or the time during which an
Option or any part thereof will vest pursuant to subsection 6(e),
notwithstanding the provisions in the Option stating the time at which it may
first be exercised or the time during which it will vest.
(b) Neither an Optionee nor any person to whom an Option is transferred
under subsection 6(d) shall be deemed to be the holder of, or to have any of the
rights of a holder with respect to, any shares subject to such Option unless and
until such person has satisfied all requirements for exercise of the Option
pursuant to its terms.
(c) Nothing in the Plan or any instrument executed or Option granted
pursuant thereto shall confer upon any Employee or Director or Optionee any
right to continue in the employ of the Company or any Affiliate (or to continue
acting as a Director) or shall affect the right of the Company or any Affiliate
to terminate the employment or relationship as a Director of any Employee,
Director or Optionee with or without cause.
(d) To the extent that the aggregate Fair Market Value (determined at
the time of grant) of stock with respect to which Incentive Stock Options are
exercisable for the first time by any Optionee during any calendar year under
all plans of the Company and its Affiliates exceeds one hundred thousand dollars
($100,000), the Options or portions thereof which exceed such limit (according
to the order in which they were granted) shall be treated as Nonstatutory Stock
Options.
10. ADJUSTMENTS UPON CHANGES IN STOCK.
<PAGE>
(a) If any change is made in the stock subject to the Plan, or subject
to any Option (through merger, consolidation, reorganization, recapitalization,
stock dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or otherwise), the Plan will be appropriately adjusted in the
class(es) and maximum number of shares subject to the Plan pursuant to
subsection 4(a) and the outstanding Options will be appropriately adjusted in
the class(es) and number of shares and price per share of stock subject to such
outstanding Options.
(b) In the event of: (1) a sale of substantially all of the assets of
the Company; (2) a merger or consolidation in which the Company is not the
surviving corporation; or (3) a reverse merger in which the Company is the
surviving corporation but the shares of the Company's common stock outstanding
immediately preceding the merger are converted by virtue of the merger into
other property, whether in the form of securities, cash or otherwise, then to
the extent permitted by applicable law: (i) any surviving corporation shall
assume any Options outstanding under the Plan or shall substitute similar
Options for those outstanding under the Plan, or (ii) such Options shall
continue in full force and effect. In the event of a dissolution or liquidation
of the Company, any Options outstanding under the Plan shall terminate if not
exercised prior to such event.
11. AMENDMENT OF THE PLAN AND OPTIONS.
(a) The Compensation Committee at any time, and from time to time, may
amend the Plan. However, except as provided in Section 10 relating to
adjustments upon changes in stock, no amendment shall be effective unless
approved by the stockholders of the Company within twelve (12) months before or
after the adoption of the amendment, where the amendment will:
(1) Increase the number of shares reserved for Options under
the Plan;
(2) Modify the requirements as to eligibility for
participation in the Plan (to the extent such modification requires stockholder
approval in order for the Plan to satisfy the requirements of Section 422 of the
Code); or
(3) Modify the Plan in any other way if such modification
requires stockholder approval in order for the Plan to satisfy the requirements
of Section 422 of the Code or to comply with the requirements of Rule 16b-3.
(b) The Compensation Committee may in its sole discretion submit any
other amendment to the Plan for stockholder approval, including, but not limited
to, amendments to the Plan intended to satisfy the requirements of Section
162(m) of the Code and the regulations promulgated thereunder regarding the
exclusion of performance-based compensation from the limit on corporate
deductibility of compensation paid to certain executive officers.
(c) It is expressly contemplated that the Compensation Committee may
amend the Plan in any respect the Compensation Committee deems necessary or
advisable to provide Optionees with the maximum benefits provided or to be
provided under the provisions of the Code and the regulations promulgated
thereunder relating to Incentive Stock Options and/or to bring the Plan and/or
Incentive Stock Options granted under it into compliance therewith.
(d) Rights and obligations under any Option granted before amendment of
the Plan shall not be impaired by any amendment of the Plan unless (i) the
Company requests the consent of the person to whom the Option was granted and
(ii) such person consents in writing.
(e) The Compensation Committee at any time, and from time to time, may
amend the terms of any one or more Options; including, prior to the time of
vesting of an Option, eliminating, modifying or substituting a long-term
objective contained in the Option; provided, however, that the rights and
obligations under any Option shall not be impaired by any such amendment unless
(i) the Company requests the consent of the person to whom the Option was
granted and (ii) such person consents in writing.
12. TERMINATION OR SUSPENSION OF THE PLAN.
<PAGE>
(a) The Compensation Committee may suspend or terminate the Plan at any
time. Unless sooner terminated, the Plan shall terminate on July 25, 2005 which
shall be within ten (10) years from the date the Plan is adopted by the
Compensation Committee or approved by the stockholders of the Company, whichever
is earlier. No Options may be granted under the Plan while the Plan is suspended
or after it is terminated.
(b) Rights and obligations under any Option granted while the Plan is
in effect shall not be impaired by suspension or termination of the Plan, except
with the consent of the person to whom the Option was granted.
13. EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the Compensation
Committee.
