As filed with the Securities and Exchange Commission on September 25, 1998
================================================================================
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.)
351 Galveston Drive
Redwood City, California 94063
(650) 306-7700
-------------------------------------------------------------
(Address and telephone number of principal executive offices)
----------------------
1992 STOCK OPTION PLAN
1994 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
----------------------------------------------
(Full title of the plans)
Stephen Evans-Freke
Chairman of the Board
SUGEN, Inc.
351 Galveston Drive
Redwood City, California 94063
(650) 306-7700
- --------------------------------------------------------------------------------
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-----------------------------
Copies to:
Suzanne Sawochka Hooper, Esq.
Cooley Godward LLP
Five Palo Alto Square
Palo Alto, CA 94306
(650) 843-5000
-----------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered Offering Price Per Share Aggregate Offering Price Registration Fee
(1) (1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Stock Options and Common Stock 900,000 $10.6875 - $17.125 $11,156,942 $3,471.82
(par value $.01)
====================================================================================================================================
<FN>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(c) and (h)(1) under the
Securities Act of 1933, as amended (the "Securities Act"). The offering
price per share and aggregate offering price for the unissued stock
options and Common Stock are based upon the average of the high and low
prices of Registrant's Common Stock as reported on the Nasdaq National
Market System on September 21, 1998. The offering price per share and
aggregate offering price for the outstanding stock options are based
upon the exercise prices of such options. The following chart
illustrates the calculation of the registration fee:
</FN>
</TABLE>
================================================================================
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Title of Shares Number of Shares Offering Price Per Aggregate Offering
Share Price
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares issuable pursuant to outstanding stock options pursuant 211,503 $12.625 - $17.125 $2,894,978
to the 1992 Stock Option Plan
- ------------------------------------------------------------------------------------------------------------------------------------
Shares issuable pursuant to unissued stock options pursuant to 538,497 $12.4375 $6,697,556
the 1992 Stock Option Plan
- ------------------------------------------------------------------------------------------------------------------------------------
Shares issuable pursuant to unissued stock options pursuant to 150,000 $12.4375 $1,865,625
the 1994 Non-Employee Directors' Stock Option Plan
- ------------------------------------------------------------------------------------------------------------------------------------
Proposed Maximum Aggregate Offering Price $11,458,159
====================================================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective.
2
<PAGE>
EXPLANATORY NOTE
This Registration Statement on Form S-8 is being filed for the purpose of
registering an additional 750,000 shares of the Registrant's Common Stock to be
issued pursuant to the Registrant's 1992 Stock Option Plan, as amended (the
"Option Plan") and an additional 150,000 shares of the Registrant's Common Stock
to be issued pursuant to the Registrant's 1994 Non-Employee Directors' Stock
Option Plan, as amended (the "Directors' Plan"). The Registration Statements on
Form S-8 previously filed with the Commission relating to the Option Plan and
the Directors' Plan (File No. 33-89270 filed with the Commission on February 8,
1995 and amended on August 1, 1995; File No. 333-09326 filed with the Commission
on August 1, 1996 and File No. 333-30385 filed with the Commission on June 30,
1997) are incorporated by reference herein.
EXHIBITS
Exhibit
Number
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1.
24.1 Power of Attorney. Reference is made to the signature pages.
99.1 1992 Stock Option Plan, as amended as of May 20, 1998.
99.2 1994 Non-Employee Directors' Stock Option Plan, as amended as of
June 1, 1998.
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Redwood City, County of San Mateo, State of
California, on September 25, 1998.
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 Susan M. Kanaya, 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 September 25, 1998
- ---------------------------------- Chairman of the Board
(Stephen Evans-Freke) (Principal Executive and
Financial Officer)
/s/ Susan M. Kanaya Treasurer September 25, 1998
- ---------------------------------- (Principal Accounting Officer)
(Susan M. Kanaya)
4
<PAGE>
/s/ Axel Ullrich Director September 25, 1998
- ----------------------------------
(Axel Ullrich)
/s/ Richard D. Spizzirri Director September 25, 1998
- ----------------------------------
(Richard D. Spizzirri)
/s/ Jeremy L. Curnock Cook Director September 25, 1998
- ----------------------------------
(Jeremy L. Curnock Cook)
/s/ Heinrich Kuhn Director September 25, 1998
- ----------------------------------
(Heinrich Kuhn)
/s/ Donald E. Nickelson Director September 25, 1998
- ----------------------------------
(Donald E. Nickelson)
/s/ Bruce R. Ross Director September 25, 1998
- ----------------------------------
(Bruce R. Ross)
</TABLE>
5
<PAGE>
<TABLE>
EXHIBIT INDEX
<CAPTION>
Exhibit Sequential
Number Description Page Number
<S> <C> <C>
5.1 Opinion of Cooley Godward LLP. 7
23.1 Consent of Ernst & Young LLP, Independent Auditors. 8
23.2 Consent of Cooley LLP. Reference is made to Exhibit 5.1. 7
24.1 Power of Attorney. Reference is made to the signature pages. 3
99.1 1992 Stock Option Plan, as amended as of May 20, 1998. 9
99.2 1994 Non-Employee Directors' Stock Option Plan, as amended as of June 1, 1998. 19
</TABLE>
6
Exhibit 5.1
Cooley Godward LLP ATTORNEYS AT LAW San Francisco, CA
- ------------------ 415 693-2000
Menlo Park, CA
Five Palo Alto Square 650 843-5000
3000 El Camino Real
Palo Alto, CA San Diego, CA
94306-2155 619 550-6000
Main 650 843-5000 Boulder, CO
Fax 650 849-7400 303 546-4000
Denver, CO
September 25, 1998 www.cooley.com 303 606-4800
SUGEN, Inc. ALAN C. MENDELSON
351 Galveston Drive 650 843-5010
Redwood City, CA 94063 [email protected]
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by SUGEN, Inc. (the "Company"), a Delaware corporation, of a
Registration Statement on Form S-8 (the "Registration Statement") with the
Securities and Exchange Commission covering the offering of an aggregate of
900,000 shares (the "Shares") of the Company's common stock, par value $.01 per
share (the "Common Stock"), which includes (i) up to 750,000 shares of Common
Stock pursuant to the Company's 1992 Stock Option Plan, as amended (the "Option
Plan") and (ii) up to 150,000 shares of Common Stock pursuant to the Company's
1994 Non-Employee Directors' Stock Option Plan (the "Directors' Plan").
In connection with this opinion, we have examined the Registration Statement and
related Prospectus, your Restated Certificate of Incorporation and By-laws, 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 Option Plan, the
Directors' Plan, 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).
7
<PAGE>
Cooley Godward LLP
- ------------------
SUGEN, Inc.
September 25, 1998
Page Two
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
Cooley Godward LLP
/s/ Alan C. Mendelson
Alan C. Mendelson
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. 1992 Stock Option Plan and the SUGEN, Inc.
1994 Non-Employee Directors' Stock Option Plan of our report dated February 5,
1998, with respect to the financial statements of SUGEN, Inc. included in its
Annual Report (Form 10-K) for the year ended December 31, 1997, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Palo Alto, California
September 25, 1998
8
Exhibit 99.1
SUGEN, INC.
1992 STOCK OPTION PLAN
Adopted February 28, 1992
Termination Date: February 27, 2002
PLAN HISTORY
------------
Adopted February 28, 1992
Amended effective as of February 5, 1993
Amended by the Board of Directors on January 7, 1994
and April 12, 1994 Amended by the Board of Directors
on February 24, 1995 and May 1, 1995
Approved by Stockholders on June 6, 1995
Amended by the Board of Directors on December 19, 1995
Approved by the Stockholders on May 23, 1996
Amended by the Board of Directors on December 10, 1996
Approved by the Stockholders on May 21, 1997
Amended by the Board of Directors on February 19, 1998
1. PURPOSES.
(a) The purpose of the Plan is to provide a means by which selected
Employees and Directors of and Consultants to 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 retain the services of
persons who are now Employees or Directors of or Consultants to the Company, to
secure and retain the services of new Employees, Directors and Consultants, and
to provide incentives for such persons 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 Board or any Committee to which responsibility for
administration of the Plan has been delegated pursuant to subsection 3(c), 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.
<PAGE>
(d) "Committee" means a Committee appointed by the Board in accordance
with subsection 3(c) of the Plan.
(e) "Company" means SUGEN, Inc., a Delaware corporation.
(f) "Consultant" means any person, including an advisor, engaged by the
Company or an Affiliate to render consulting or advisory services and who is
compensated for such services, provided that the term "Consultant" shall not
include Directors who are paid only a director's fee by the Company or who are
not compensated by the Company for their services as Directors.
(g) "Continuous Service" (formerly, "Continuous Status as an Employee,
Director or Consultant") means the employment or relationship as a Director or
Consultant is not interrupted or terminated by the Company or any Affiliate. The
Optionee's Continuous Service shall not be deemed to have terminated merely
because of a change in the capacity in which the Optionee renders service to the
Company or an Affiliate as an Employee, Consultant or Director or a change in
the entity for which the Optionee renders such service, provided that there is
no interruption or termination of the Optionee's Continuous Service. For
example, a change in status from an Employee of the Company to a Consultant of
an Affiliate or a Director of the Company will not constitute an interruption of
Continuous Service. The Board or the chief executive officer of the Company, in
that party's sole discretion, may determine whether Continuous Service shall be
considered interrupted in the case of: (i) any leave of absence approved by that
party, 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.
(h) "Covered Employee" means the chief executive officer and the four
(4) other highest compensated officers of the Company for whom total
compensation is required to be reported to stockholders under the Exchange Act,
as determined for purposes of Section 162(m) of the Code.
(i) "Director" means a member of the Board.
(j) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
(k) "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.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(m) "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;
<PAGE>
(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.
(n) "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.
(o) "Nonstatutory Stock Option" means an Option not intended to qualify
as an Incentive Stock Option.
(p) "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.
(q) "Option" means a stock option granted pursuant to the Plan.
(r) "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.
(s) "Optioned Stock" means the common stock of the Company subject to
an Option.
(t) "Optionee" means an Employee, Director or Consultant who holds an
outstanding Option.
(u) "Outside Director" means a Director who either (i) is not a current
employee of the Company or an "affiliated corporation" (within the meaning of
the Treasury regulations promulgated under Section 162(m) of the Code), is not a
former employee of the Company or an "affiliated corporation" receiving
compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an "affiliated corporation"
at any time, and is not currently receiving direct or indirect remuneration from
the Company or an "affiliated corporation" for services in any capacity other
than as a Director, or (ii) is otherwise considered an "outside director" for
purposes of Section 162(m) of the Code.
(v) "Plan" means this SUGEN, Inc. 1992 Stock Option Plan.
(w) "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.
(x) "Securities Act" means the Securities Act of 1933, as amended.
3. ADMINISTRATION.
(a) The Board shall administer the Plan unless and until the Board
delegates administration to a Committee, as provided in subsection 3(c).
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
<PAGE>
(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 Board, 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 Board deems necessary or expedient to promote the best interests of
the Company.
(c) The Board may delegate administration of the Plan to a committee
composed of not fewer than two (2) members (the "Committee"), all of the members
of which Committee may be, in the discretion of the Board, Outside Directors. If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board (and references in this Plan to the Board shall thereafter be to
the Committee), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan. Notwithstanding anything in this Section 3 to the
contrary, the Board or the Committee may delegate to a committee of one or more
members of the Board the authority to grant Options to eligible persons who (1)
are not then subject to Section 16 of the Exchange Act and/or (2) are either (i)
not then Covered Employees and are not expected to be Covered Employees at the
time of recognition of income resulting from such Option, or (ii) not persons
with respect to whom the Company wishes to comply with Section 162(m) of the
Code.
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 three million five hundred thousand (3,500,000) 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 may be granted only to Employees.
Nonstatutory Stock Options may be granted only to Employees, Directors or
Consultants.
(b) No person shall be eligible for the grant of an 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
Option is not exercisable after the expiration of five (5) years from the date
of grant.
<PAGE>
(c) Subject to the provisions of Section 10 relating to adjustments
upon changes in stock, no person shall be eligible to be granted Options
covering more than five percent (5%) of the number of shares of the Company's
common stock that was outstanding on the record date for the Company's 1995
Annual Stockholder Meeting (i.e., four hundred thirty-four thousand five hundred
twenty-seven (434,527) shares) in any calendar year.
6. OPTION PROVISIONS.
Each Option shall be in such form and shall contain such terms and
conditions as the Board 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.
(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 not less than eighty-five percent (85%)
of the fair market value of the stock subject to the Option on the date the
Option is granted. Notwithstanding the foregoing, the exercise price of each
Option shall be not less than one hundred ten percent (110%) of the Fair Market
Value of the stock subject to the Option on the date the Option is granted if
the person to whom the Option is granted owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock, as
described in subsection 5(b).
(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 Board or the Committee, 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 Board; provided,
however, that at any time that the Company is incorporated in Delaware, payment
of the Common Stock's "par value," as defined in the Delaware General
Corporation Law, shall not be made by deferred payment.
In the case of any deferred payment arrangement, interest shall be
compounded 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, 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.
<PAGE>
(e) Vesting. The total number of shares of stock subject to an Option
may, but need not, be allotted 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 become exercisable ("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 shares then remaining subject to the Option.
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.
(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, 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 Continuous Service. In the event an Optionee's
Continuous Service 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 Board, and only to the extent that the
Optionee was entitled to exercise it at the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement). In the case of an Incentive Stock Option, the Board shall determine
such period of time (generally not to exceed three (3) months from the date of
termination) when the Option is granted. 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 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
Service 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,
<PAGE>
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.
(j) Early Exercise. The Option may, but need not, include a provision
whereby the Optionee may elect at any time while an Employee, Director or
Consultant 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 Board determines to be appropriate. The Company shall
exercise its repurchase option to the extent permitted by applicable law.
(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 participant 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 Board 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) Throughout the term of any Option, the Company shall deliver to the
holder of such Option, not later than one hundred twenty (120) days after the
close of each of the Company's fiscal years
<PAGE>
during the Option term, such financial and other information regarding the
Company as comprises the annual report to the stockholders of the Company
provided for in the bylaws of the Company.
(d) Nothing in the Plan or any instrument executed or Option granted
pursuant thereto shall confer upon any Employee, Director, Consultant or
Optionee any right to continue in the employ of the Company or any Affiliate (or
to continue acting as a Director or Consultant) or shall affect the right of the
Company or any Affiliate to terminate the employment or relationship as a
Director or Consultant of any Employee, Director, Consultant or Optionee with or
without cause.
(e) To the extent that the aggregate Fair Market Value (determined at
the time of grant) of stock with respect to which Incentive Stock Options
granted after 1986 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.
(f) If an Option is canceled, or deemed to be canceled, for purposes of
Section 162(m) of the Code and the regulations promulgated thereunder, then the
number of shares subject to the canceled Option shall continue to count towards
the maximum number of shares which may be granted to any person pursuant to
subsection 5(c) of the Plan. The provisions of this subsection 9(f) shall be
applicable only to the extent required by Section 162(m) of the Code.
10. ADJUSTMENTS UPON CHANGES IN STOCK.
(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 and outstanding Options will be appropriately
adjusted in the class(es) and maximum number of shares subject to the Plan and
the class(es) and number of shares and price per share of stock subject to
outstanding Options.
(b) In the event of: (1) a merger or consolidation in which the Company
is not the surviving corporation; (2) 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; (3) any other capital reorganization in which more than fifty percent
(50%) of the shares of the Company entitled to vote are exchanged; (4) a
transaction or group of related transactions involving the sale of all or
substantially all of the Company's assets; (5) the acquisition by any person,
entity or group (excluding any employee benefit plan, or related trust,
sponsored or maintained by the Company or any subsidiary of the Company) of the
beneficial ownership, directly or indirectly, of securities of the Company
representing more than fifty percent (50%) of the combined voting power in the
election of directors; or (6) a change in the composition of the Company's Board
of Directors such that, during any period of two consecutive years, individuals
who, at the beginning of such period, constitute the Board, together with
individuals who are Approved New Directors (as defined below), cease for any
reason to have authority to cast at least a majority of the votes which all
directors on the Board are entitled to vote; then, to the extent not prohibited
by law, the time during which Options outstanding under the Plan may be
exercised shall be accelerated prior to such event, and the Options terminated
if not exercised at or prior to such event. For purposes of this subsection
10(b), an Approved New Director shall be a Board member whose election, or the
nomination for election by the Company's stockholders, was approved by a vote of
a majority of the votes entitled to be cast by directors then still in office
who were directors at the beginning of the period.
<PAGE>
11. AMENDMENT OF THE PLAN AND OPTIONS.
(a) The Board 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 or
any Nasdaq or securities exchange listing requirements.
(b) The Board 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 Board may amend the Plan in
any respect the Board 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 Board at any time, and from time to time, may amend the terms
of any one or more Options; 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.
(a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate on February 27, 2002 which shall be
within ten (10) years from the date the Plan is adopted by the Board 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.
<PAGE>
13. EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the Board, but no
Options granted to acquire shares of the Company's common stock under the Plan
shall be exercised unless and until the issuance of such shares under the Plan
has been approved by the stockholders of the Company.
Exhibit 99.2
SUGEN, INC.
1994 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
Adopted April 12, 1994
Effective October 4, 1994
Termination Date: April 12, 2004
PLAN HISTORY
------------
Adopted April 12, 1994 to be effective upon the Initial Public Offering of
SUGEN, Inc.
Common Stock (October 4, 1994)
Approved by the Stockholders on May 20, 1994
Amended by the Board of Directors on February 24, 1995
Approved by Stockholders on June 6, 1995
Amended by the Board of Directors on December 19, 1995
Approved by the Stockholders on May 23, 1996
Amended by the Board of Directors on February 19, 1998
Approved by the Stockholders on May 20 1998
Amendedby the Board of Directors on June
1, 1998 Stockholders approval not
required.
1. PURPOSE.
(a) The purpose of the 1994 Non-Employee Directors' Stock Option Plan
(the "Plan") is to provide a means by which each director of SUGEN, Inc. (the
"Company") who is not otherwise an employee of the Company or of any Affiliate
of the Company (each such person being hereafter referred to as a "Non-Employee
Director") will be given an opportunity to purchase stock of the Company.
(b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company as those terms are defined
in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended from time to time (the "Code").
(c) The Company, by means of the Plan, seeks to retain the services of
persons now serving as Non-Employee Directors of the Company, to secure and
retain the services of persons capable of serving in such capacity, and to
provide incentives for such persons to exert maximum efforts for the success of
the Company.
2. ADMINISTRATION.
(a) The Plan shall be administered by the Board of Directors of the
Company (the "Board") unless and until the Board delegates administration to a
committee, as provided in subparagraph 2(b).
(b) The Board may delegate administration of the Plan to a committee
composed of not fewer than two (2) members of the Board (the "Committee"). If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board, subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as
<PAGE>
may be adopted from time to time by the Board. The Board may abolish the
Committee at any time and revest in the Board the administration of the Plan.
3. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of paragraph 10 relating to adjustments
upon changes in stock, the stock that may be sold pursuant to options granted
under the Plan shall not exceed in the aggregate three hundred eighty thousand
(380,000) shares of the Company's common stock. If any option granted under the
Plan 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.
4. ELIGIBILITY.
Options shall be granted only to Non-Employee Directors of the Company.
5. NON-DISCRETIONARY GRANTS.
(a) Upon the date of the annual meeting of stockholders of the Company
held during 1995, each person who is then a Non-Employee Director of the Company
and has been a Non-Employee Director for at least three (3) months automatically
shall be granted an option to purchase two thousand (2,000) shares of common
stock of the Company on the terms and conditions set forth herein.
(b) Each person who is, after the Adoption Date, elected for the first
time to be a Non-Employee Director automatically shall, upon the date of his or
her initial election to be a Non-Employee Director by the Board or stockholders
of the Company, be granted an option to purchase ten thousand (10,000) shares of
common stock of the Company on the terms and conditions set forth herein.
(c) Ten (10) days following the date of each annual meeting of
stockholders of the Company, commencing with the meeting held during 1995, each
person who is then a Non-Employee Director of the Company and has been a
Non-Employee Director for at least three (3) months automatically shall be
granted an option to purchase five thousand (5,000) shares of common stock of
the Company on the terms and conditions set forth herein.
(d) On June 1, 1998 and thereafter ten (10) days following the date of
each annual meeting of stockholders of the Company, commencing with the meeting
held during 1999, each Non-Employee Director of the Company who is then a member
of the Executive Committee of the Board automatically shall be granted an option
to purchase two thousand (2,000) shares of common stock of the Company on the
terms and conditions set forth herein.
(e) On June 1, 1998 and thereafter ten (10) days following the date of
each annual meeting of stockholders of the Company, commencing with the meeting
held during 1999, each Non-Employee Director of the Company who is then a member
(but not the Chairperson) of the Audit Committee, Compensation Committee and/or
Nominating Committee of the Board automatically shall be granted, for each such
committee, an option to purchase one thousand (1,000) shares of common stock of
the Company on the terms and conditions set forth herein.
(f) On June 1, 1998 and thereafter ten (10) days following the date of
each annual meeting of stockholders of the Company, commencing with the meeting
held during 1999, each Non-Employee Director of the Company who is then the
Chairperson of the Audit Committee, Compensation Committee and/or Nominating
Committee of the Board automatically shall be granted, for each such committee,
an
<PAGE>
option to purchase two thousand (2,000) shares of common stock of the Company on
the terms and conditions set forth herein.
6. OPTION PROVISIONS.
Each option shall be subject to the following terms and conditions:
(a) The term of each option commences on the date it is granted and,
unless sooner terminated as set forth herein, expires on the date ("Expiration
Date") ten (10) years from the date of grant. If the optionee's service as a
Non-Employee Director of the Company terminates for any reason or for no reason,
including the optionee's death, the option shall terminate on the earlier of the
Expiration Date or the date six (6) months following the date of termination of
service. In any and all circumstances, an option may be exercised following
termination of the optionee's service as a Non-Employee Director of the Company
only as to that number of shares as to which it was vested on the date of
termination of such service under the provisions of subparagraph 6(e).
(b) The exercise price of each option shall be one hundred percent
(100%) of the fair market value of the stock subject to such option on the date
such option is granted.
(c) Payment of the exercise price of each option is due in full in cash
upon any exercise when the number of shares being purchased upon such exercise
is less than one thousand (1,000) shares; but when the number of shares being
purchased upon an exercise is one thousand (1,000) or more shares, the optionee
may elect to make payment of the exercise price under one of the following
alternatives:
(i) Payment of the exercise price per share in cash at the
time of exercise; or
(ii) Provided that at the time of the exercise the Company's
common stock is publicly traded and quoted regularly in the Wall Street Journal,
payment by delivery of shares of common stock of the Company already owned by
the optionee, held for the period required to avoid a charge to the Company's
reported earnings, and owned free and clear of any liens, claims, encumbrances
or security interest, which common stock shall be valued at its fair market
value on the date preceding the date of exercise; or
(iii) Payment by a combination of the methods of payment
specified in subparagraph 6(c)(i) and 6(c)(ii) above.
Notwithstanding the foregoing, this option may be exercised pursuant to
a program developed under Regulation T as promulgated by the Federal Reserve
Board which results in the receipt of cash (or check) by the Company prior to
the issuance of shares of the Company's common stock.
(d) An 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 option is granted only by such person or by his or her
guardian or legal representative. 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) Options granted pursuant to the Plan shall become vested as
follows: (i) options granted pursuant to subparagraph 5(a) above shall become
fully vested on the date of grant; (ii) options granted pursuant to subparagraph
5(b) above shall become vested in installments over a period of five years from
the date of grant at the rate of twenty percent (20%) per year in five (5) equal
annual installments commencing on the date one year after the date of grant; and
(iii) options granted pursuant to subparagraphs 5(c), 5(d), 5(e) and 5(f) above
shall become fully vested on the date ten days prior to the date of the first
annual meeting of stockholders of the Company subsequent to the date of the
grant. The
<PAGE>
options shall vest as set forth above, provided that the optionee has, during
the entire period prior to such vesting date, continuously served as a
Non-Employee Director to the Company or any Affiliate of the Company.
(f) The optionee may elect at any time while a Non-Employee Director of
the Company to exercise the option as to any or all of the shares subject to the
option prior to vesting of the option as described in subparagraph 6(e). Any
unvested shares so purchased shall be subject to a repurchase right in favor of
the Company.
(g) The Company may require any optionee, or any person to whom an
option is transferred under subparagraph 6(d), as a condition of exercising any
such option: (i) to give written assurances satisfactory to the Company as to
the optionee's knowledge and experience in financial and business matters; and
(ii) 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.
(h) Notwithstanding anything to the contrary contained herein, an
option may not be exercised unless the shares issuable upon exercise of such
option are then registered under the Securities Act or, if such shares are not
then so registered, the Company has determined that such exercise and issuance
would be exempt from the registration requirements of the Securities Act.
7. COVENANTS OF THE COMPANY.
(a) During the terms of the options granted under the Plan, 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 granted under the
Plan; provided, however, that this undertaking shall not require the Company to
register under the Securities Act either the Plan, any option granted under the
Plan, 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.
8. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to options granted under the Plan shall
constitute general funds of the Company.
9. MISCELLANEOUS.
(a) Neither an optionee nor any person to whom an option is transferred
under subparagraph 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.
(b) Throughout the term of any option granted pursuant to the Plan, the
Company shall make available to the holder of such option, not later than one
hundred twenty (120) days after the close of each
<PAGE>
of the Company's fiscal years during the option term, upon request, such
financial and other information regarding the Company as comprises the annual
report to the stockholders of the Company provided for in the Bylaws of the
Company and such other information regarding the Company as the holder of such
option may reasonably request.
(c) Nothing in the Plan or in any instrument executed pursuant thereto
shall confer upon any Non-Employee Director any right to continue in the service
of the Company or any Affiliate or shall affect any right of the Company, its
Board or stockholders or any Affiliate to terminate the service of any
Non-Employee Director with or without cause.
(d) No Non-Employee Director, individually or as a member of a group,
and no beneficiary or other person claiming under or through him or her, shall
have any right, title or interest in or to any option reserved for the purposes
of the Plan except as to such shares of common stock, if any, as shall have been
reserved for such Non-Employee Director pursuant to an option granted to such
Non-Employee Director.
(e) In connection with each option made pursuant to the Plan, it shall
be a condition precedent to the Company's obligation to issue or transfer shares
to a Non-Employee Director, or to evidence the removal of any restrictions on
transfer, that such Non-Employee Director make arrangements satisfactory to the
Company to insure that the amount of any federal or other withholding tax
required to be withheld with respect to such sale or transfer, or such removal
or lapse, is made available to the Company for timely payment of such tax.
(f) As used in this Plan, fair market value means, as of any date, the
value of the common stock of the Company determined as follows:
(i) 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;
(ii) 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 bid and
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;
(iii) In the absence of an established market for the common
stock, the Fair Market Value shall be determined in good faith by the Board.
10. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or subject
to any option granted under the Plan (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 and outstanding
options will be appropriately adjusted in the class(es) and maximum number of
shares subject to the Plan and the class(es) and number of shares and price per
share of stock subject to outstanding options.
(b) In the event of: (1) a merger or consolidation in which the Company
is not the surviving corporation; (2) 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
<PAGE>
merger into other property, whether in the form of securities, cash or
otherwise; (3) any other capital reorganization in which more than fifty percent
(50%) of the shares of the Company entitled to vote are exchanged; (4) a
transaction or group of related transactions involving the sale of all or
substantially all of the Company's assets; (5) the acquisition by any person,
entity or group (excluding any employee benefit plan, or related trust,
sponsored or maintained by the Company or any subsidiary of the Company) of the
beneficial ownership, directly or indirectly, of securities of the Company
representing more than fifty percent (50%) of the combined voting power in the
election of directors; or (6) a change in the composition of the Company's Board
of Directors such that, during any period of two consecutive years, individuals
who, at the beginning of such period, constitute the Board, together with
individuals who are Approved New Directors (as defined below), cease for any
reason to have authority to cast at least a majority of the votes which all
directors on the Board are entitled to vote; then, to the extent not prohibited
by law, the time during which options outstanding under the Plan become fully
vested shall be accelerated prior to such event, and the options terminated if
not exercised at or prior to such event. For purposes of this subparagraph
10(b), an Approved New Director shall be a Board member whose election, or the
nomination for election by the Company's stockholders, was approved by a vote of
a majority of the votes entitled to be cast by the directors then still in
office who were directors at the beginning of the period.
11. AMENDMENT OF THE PLAN.
(a) The Board at any time, and from time to time, may amend the Plan,
provided, however, that the Board shall not amend the Plan more than once every
six (6) months, with respect to the provisions of the Plan that relate to the
amount, price and timing of grants, other than to comport with changes in the
Code, the Employee Retirement Income Security Act, or the rules thereunder.
Except as provided in paragraph 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:
(i) Increase the number of shares which may be issued under
the Plan; or
(ii) Modify the Plan in any other way if such modification
requires stockholder approval in order for the Plan to comply with the
requirements of Rule 16b-3 or any Nasdaq or securities exchange listing
requirements; or
(iii) Modify the Plan in any other way if such modification
requires stockholder approval in order for the Plan to comply with the
requirements of Rule 16b-3.
(b) Rights and obligations under any option granted before any
amendment of the Plan shall not be altered or impaired by 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.
(a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate on April 12, 2004. 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 altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom the option was granted.
(c) The Plan shall terminate upon the occurrence of any of the events
described in Section 10(b) above.
<PAGE>
13. EFFECTIVE DATE OF PLAN; CONDITIONS OF EXERCISE.
(a) The Plan shall become effective upon adoption by the Board of
Directors, subject to the condition subsequent that the stockholders of the
Company approve the Plan.
(b) No option granted under the Plan shall be exercised or exercisable
unless and until the condition of subparagraph 13(a) above has been met.
