<PAGE>
As filed with the Securities and Exchange Commission on September 10, 1997
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
AFFYMETRIX, INC.
-----------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
California 77-0319159
------------------------------- ------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
3380 Central Expressway, Santa Clara, California 95051
------------------------------------------------------
(Address of Principal Executive Offices)
1993 Stock Plan
------------------------
(Full Title of the Plan)
Vernon A. Norviel
Vice President and General Counsel
Affymetrix, Inc.
3380 Central Expressway, Santa Clara, California 95051
------------------------------------------------------
(Name and Address of Agent For Service)
(408) 731-5000
------------------------------------------------------------
(Telephone Number, Including Area Code, of Agent For Service)
Copy to: Stephen C. Ferruolo, Esq.
Heller Ehrman White & McAuliffe
525 University Avenue
Palo Alto, California 94301-1908
(415) 324-7000
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Proposed Proposed
Title of Amount Maximum Maximum Amount of
Securities to be Offering Price Aggregate Offering Registration
to be Registered Registered per Share (1) Price Fee
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no 1,500,000 $ 34.07 $51,093,750 $15,482
par value
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of computing the amount of registration
fee pursuant to Rule 457(c) under the Securities Act of 1933, as amended,
based on the average of the high and low prices of the Registrant's Common
Stock reported on the Nasdaq National Market on September 4, 1997.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed or to be filed with the Securities and
Exchange Commission (the "Commission") by the registrant are incorporated by
reference in this registration statement:
(a) The registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996, and the registrant's Quarterly Reports on Form 10-Q for
the fiscal quarters ended March 31, 1997 and June 30, 1997;
(b) The registrant's Registration Statement on Form S-1 (No.
333-3648) filed with the Commission on April 15, 1996, as amended;
(c) The description of the Common Stock of the registrant contained
in the registrant's Registration Statement on Form 8-A (No. 0-28218) filed with
the Commission on April 16, 1996 pursuant to Section 12 of the Exchange Act of
1934, as amended (the "Exchange Act"); and
(d) All documents subsequently filed by the registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities then remaining unsold.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the Common Stock offered hereby will be passed upon for the
registrant by Heller Ehrman White & McAuliffe, Palo Alto, California. As of the
date of this Registration Statement, members of Heller Ehrman White & McAuliffe
who are directly involved in the representation of the registrant beneficially
own approximately 13,300 shares of the registrant's Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pursuant to Section 204(a) and 317 of the California Corporations Code, as
amended, the registrant has included in its articles of incorporation and
by-laws provisions regarding the indemnification of officers and directors of
the registrant. Article Four of registrant's Amended and Restated Articles of
Incorporation provides as follows:
"The liability of the directors of this corporation for monetary damages
shall be eliminated to the fullest extent permissible under California law.
This corporation is also authorized, to the fullest extent permissible under
California
II-2
<PAGE>
law, to indemnify its agents (as defined in Section 317 of the California
Corporations Code), whether by by-law, agreement or otherwise, in excess of
the indemnification expressly permitted by Section 317 and to advance defense
expenses to its agents in connection with such matters as they are incurred,
subject to the limits on such excess indemnification set forth in Section 204
of the California Corporations Code. If, after the effective date of this
Article, California law is amended in a manner which permits a corporation to
limit the monetary or other liability of its directors or to authorize
indemnification of, or advancement of such defense expense to, its directors
or other persons, in any such case to a greater extent than is permitted on
such effective date, the references in this Article to "California law" shall
to that extent be deemed to refer to California law as so amended."
Section 29 of the registrant's By-Laws, as amended, provides as follows:
"29. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
(a) INDEMNIFICATION. To the fullest extent permissible under California
law, the corporation shall indemnify its directors and officers against all
expenses, judgment, fines settlement and other amounts actually and
reasonably incurred by them in connection with any proceeding, including an
action by or in the right of the corporation, by reason of the fact that such
person is or was a director or officer of the corporation, or is or was
serving at the request of the corporation as a director, officer, trustee,
employee or agent of another corporation, or of a partnership, joint venture,
trust or other enterprise (including service with respect to employee benefit
plans). To the fullest extent permissible under California law, expenses
incurred by a director or officer seeking indemnification under this By-law
in defending any proceeding shall be advanced by the corporation as they are
incurred upon receipt by the corporation of an undertaking by or on behalf of
the director or officer to repay such amount if it shall ultimately be
determined that the director or officer is not entitled to be indemnified by
the corporation for those expenses. If, after the effective date of this
By-law, California law is amended in a manner which permits the corporation
to authorize indemnification of or advancement of expenses to its directors
or officers, in any such case to a greater extent than is permitted on such
effective date, the references in this By-law to "California law" shall to
that extent be deemed to refer to California law as so amended. The rights
granted by this By-law are contractual in nature and, as such, may not be
altered with respect to any present or former director or officer without the
written consent of that person.
(b) PROCEDURE. Upon written request to the Board of Directors by a person
seeking indemnification under this By-law, the Board shall promptly determine in
accordance with Section 317(e) of the California Corporations Code whether the
applicable standard of conduct has been met and, if so, the Board shall
authorize indemnification. If the Board cannot authorize
II-3
<PAGE>
indemnification because the number of directors who are parties to the
proceeding with respect to which indemnification is sought prevents the
formation of a quorum of directors who are not parties to the proceeding,
then, upon written request by the person seeking indemnification, independent
legal counsel (by means of a written opinion obtained at the corporation's
expense) or the corporation's shareholders shall determine whether the
applicable standard of conduct has been met and, if so, shall authorize
indemnification.
(c) DEFINITIONS. The term "proceeding" means any threatened, pending or
completed action or proceeding, whether civil, criminal, administrative or
investigative. The term "expenses" includes, without limitation, attorney's
fees and any expenses of establishing a right to indemnification."
The registrant has entered into indemnification agreements with each of
its current directors and officers or persons controlling the Registrant
pursuant to the foregoing provisions.
ITEM 8. EXHIBITS
5.1 Opinion of Heller Ehrman White & McAuliffe
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.3 Consent of Heller Ehrman White & McAuliffe
(filed as part of Exhibit 5.1)
24.1 Power of Attorney (See page II-6)
99.1 1993 Stock Plan, as amended
ITEM 9. UNDERTAKINGS
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
II-4
<PAGE>
PROVIDED, HOWEVER, that paragraphs A(1)(i) and A(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the Exchange Act that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining liability under the Securities Act, each filing of the registrant's
annual report pursuant to Section 13(a) or 15(d) of the Exchange Act that is
incorporated by reference in the registration statement shall be deemed a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Santa Clara, State of California, on this 28th day of
August, 1997.
AFFYMETRIX, INC.
By: /s/ Stephen P.A. Fodor
--------------------------------------
Stephen P.A. Fodor, Ph.D.
President & Chief Executive Officer
(Principal Executive Officer)
POWER OF ATTORNEY TO SIGN AMENDMENTS
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below does hereby constitute and appoint Stephen P.A. Fodor, Ph.D. and
Edward M. Hurwitz, or either or them, each with full power of substitution, such
person's true and lawful attorneys-in-fact and agents for such person in such
person's name, place and stead, in any and all capacities, to sign any or all
amendments (including post-effective amendments) to this Registration Statement
on Form S-8 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 full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises in order to effectuate the same as fully, to all intents and
purposes, as he or such person might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement on Form S-8 has been signed by the following persons in the capacities
and on the dates indicated.
II-6
<PAGE>
SIGNATURE CAPACITY DATE
--------- -------- ----
/s/ Stephen P.A. Fodor
_____________________________ DIRECTOR, PRESIDENT AND AUGUST 28, 1997
STEPHEN P.A. FODOR, PH.D. CHIEF EXECUTIVE OFFICER
(PRINCIPAL EXECUTIVE
OFFICER)
_____________________________ DIRECTOR AND CHAIRMAN
JOHN D. DIEKMAN PH.D.
/s/ Paul Berg
_____________________________ DIRECTOR AUGUST 25, 1997
PAUL BERG, PH.D.
/s/ Douglas M. Hurt
_____________________________ DIRECTOR AUGUST 25, 1997
DOUGLAS M. HURT
/s/ Vernon R. Louks, Jr.
_____________________________ DIRECTOR AUGUST 27, 1997
VERNON R. LOUCKS, JR.
/s/ Barry C. Ross
_____________________________ DIRECTOR AUGUST 28, 1997
BARRY C. ROSS, PH.D.
/s/ David B. Singer
_____________________________ DIRECTOR AUGUST 25, 1997
DAVID B. SINGER
/s/ Lubert Stryer
_____________________________ DIRECTOR AUGUST 25, 1997
LUBERT STRYER, M.D.
/s/ John A. Young
_____________________________ DIRECTOR AUGUST 28, 1997
JOHN A. YOUNG
_____________________________ DIRECTOR
ALEJANDRO C. ZAFFARONI, PH.D.
II-7
<PAGE>
/s/ Edward M. Hurwitz
______________________________ VICE PRESIDENT AND AUGUST 29, 1997
EDWARD M. HURWITZ CHIEF FINANCIAL OFFICER
(PRINCIPAL FINANCIAL
OFFICER)
II-8
<PAGE>
INDEX TO EXHIBITS
Sequentially
Item Numbered
No. Description of Item Page
- ------ ------------------------------------------------------ ------------
5.1 Opinion of Heller Ehrman White & McAuliffe
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.3 Consent of Heller Ehrman White & McAuliffe
(filed as part of Exhibit 5.1)
24.1 Power of Attorney (see page II-6)
99.1 1993 Stock Plan, as amended
<PAGE>
September 10, 1997
18908-0012
Affymetrix, Inc.
3380 Central Expressway
Santa Clara, California
95051
Registration Statement on Form S-8
----------------------------------
Ladies and Gentlemen:
We have acted as counsel to Affymetrix, Inc., a California
corporation (the "Company"), in connection with the Registration Statement on
Form S-8 (the "Registration Statement") which the Company proposes to file
with the Securities Exchange Commission on September 10, 1997 for the
purposes of registering under the Securities Exchange Act of 1933, as
amended, an additional 1,500,000 shares of its Common Stock, no par value
(the "Shares"). The Shares are issuable under the Company's 1993 Stock Plan,
as amended (the "Plan").
We have assumed the authenticity of all records, documents and
instruments submitted to us as originals, the genuineness of all signatures,
the legal capacity of natural persons and the conformity to the originals of
all records, documents and instruments submitted to us as copies.
In rendering our opinion, we have examined the following records,
documents and instruments:
(a) The Amended and Restated Articles of Incorporation of the
Company, certified by the California Secretary of State as of
September 5, 1997, and certified to us by an officer of the
Company as being complete and in full force as of the date of
this opinion;
(b) The Bylaws of the Company certified to us by an officer of the
Company as being complete and in full force and effect as of the
date of this opinion;
(c) A Certificate of an officer of the Company (i) attaching records
certified to us as constituting all records of proceedings and
actions of the Board of Directors, including any committee
thereof, and
<PAGE>
Affymetrix, Inc.
September 10, 1997 Page 2
stockholders of the Company relating to the Shares, and the
Registration Statement, and (ii) certifying as to certain
factual matters;
(d) The Registration Statement;
(e) The Plan; and
(f) A letter from the American Stock Transfer & Trust Company, the
Company's transfer agent, dated September 10, 1997, as to the
number of shares of the Company's common stock that were
outstanding on September 9, 1997.
This opinion is limited to the federal law of the United States of
America and the law of the State of California, and we disclaim any opinion as
to the laws of any other jurisdiction. We further disclaim any opinion as to
any other statute, rule, regulation, ordinance, order or other promulgation of
any other jurisdiction or any regional or local governmental body or as to any
related judicial or administrative opinion.
Based on the foregoing and our examination of such questions of law as
we have deemed necessary or appropriate for the purpose of this opinion, and
assuming that (i) the Registration Statement becomes and remains effective
during the period when the Shares are offered and issued, (ii) the full
consideration stated in the Plan is paid for each Share and that such
consideration in respect of each Share includes payment of cash or other lawful
consideration, (iii) appropriate certificates evidencing the Shares are executed
and delivered by the Company, and (iv) all applicable securities laws are
complied with, it is our opinion that when issued and sold by the Company, after
payment therefore in the manner provided in the Plan and Registration Statement,
the Shares will be legally issued, fully paid and nonassessable.
<PAGE>
Affymetrix, Inc.
September 10, 1997 Page 3
This opinion is rendered to you in connection with the Registration
Statement and is solely for your benefit. This opinion may not be relied upon
by you for any other purpose, or relied upon by any other person, firm,
corporation or other entity for any purpose, without our prior written consent.
We disclaim any obligation to advise you of any change of law that occurs, or
any facts of which we may become aware, after the date of this opinion.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
Heller Ehrman White & McAuliffe
<PAGE>
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement of
Affymetrix, Inc. (Form S-8) of our report dated January 23, 1997, with
respect to the financial statements and schedule of Affymetrix, Inc. included
in its Annual Report (Form 10-K) for the year ended December 31, 1996, filed
with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Palo Alto, California
September 9, 1997
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
AFFYMETRIX, INC.
AMENDED AND RESTATED 1993 STOCK PLAN
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
----
1. Purpose; Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . .1
2. Effective Date; Term of Plan. . . . . . . . . . . . . . . . . . . . . . .2
3. Number and Source of Shares of Stock Subject to the Plan. . . . . . . . .2
4. Administration of the Plan. . . . . . . . . . . . . . . . . . . . . . . .3
5. Persons Eligible to Participate in this Plan. . . . . . . . . . . . . . .3
6. Grant of Options; Terms and Conditions of Grant . . . . . . . . . . . . .3
7. Purchase Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
8. Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
9. Adjustment for Changes in Capitalization . . . . . . . . . . . . . . . .7
10. Dissolution, Liquidation, Merger . . . . . . . . . . . . . . . . . . . .7
11. Successor Corporations . . . . . . . . . . . . . . . . . . . . . . . . .7
12. No Rights as Shareholder or to Continued Employment . . . . . . . . . . .8
13. Disqualifying Dispositions . . . . . . . . . . . . . . . . . . . . . . .8
14. Termination; Amendment . . . . . . . . . . . . . . . . . . . . . . . . .8
15. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
i
<PAGE>
AFFYMETRIX, INC.
AMENDED AND RESTATED 1993 STOCK PLAN
1. PURPOSE; DEFINITIONS.
(a) PURPOSE. The purpose of the Plan is to attract, retain and
motivate officers, key employees, consultants and directors of Affymetrix, Inc.
(the "Company"), or a Parent or a Subsidiary, by giving them the opportunity to
acquire Stock ownership in the Company. Options granted under this Plan will be
either Incentive Stock Options or Nonstatutory Stock Options. This Plan also
provides for the grant of Purchase Rights providing for the direct sale of Stock
to eligible participants.
(b) DEFINITIONS. For purposes of the Plan, the following terms
have the following meanings:
(i) "Administrator" means the committee referred to in
Section 4 or the Board in its capacity as administrator of the Plan in
accordance with Section 4.
(ii) "Board" means the Board of Directors of the Company.
(iii) "Code" means the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute.
(iv) "Commission" means the Securities and Exchange
Commission, and any successor agency.
(v) "Company" means Affymetrix, Inc.
(vi) "Effective Date" has the meaning set forth in
Section 2.
(vii) "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, and any successor statute.
(viii) "Grant Date" means the date of grant of any Option or
Purchase Right.
(ix) "Incentive Stock Option" means any Option intended
to be and designated as an "incentive stock option" within the meaning of
Section 422 of the Code.
(x) "Option" means an Option granted under Section 6.
(xi) "Option Agreement" means the written option
agreement covering an Option.
1
<PAGE>
(xii) "Optionee" means the holder of an Option.
(xiii) "Parent" has the meaning set forth in Section 425 of
the Code.
(xiv) "Plan" means this Affymetrix, Inc. Amended and
Restated 1993 Stock Plan, as amended from time to time.
(xv) "Purchase Right" means a Purchase Right granted
pursuant to Section 7.
(xvi) "Qualified Domestic Relations Order" has the meaning
set forth in Section 414 of the Code or Title I of the Employee Retirement
Income Security Act, or the rules thereunder, and any successor statute or rule.
(xvii) "Rule 16b-3" means Rule 16b-3 under Section 16(b) of
the Exchange Act, as amended from time to time, and any successor rule.
(xviii) "Stock" means the Common Stock of the Company, and
any successor entity.
(xix) "Subsidiary" has the meaning set forth in Section
425 of the Code.
(xx) "Tax Date" means the date defined in Section 8.
(xxi) "Vesting Date" means the date on which an Option
becomes wholly or partially exercisable.
2. EFFECTIVE DATE; TERM OF PLAN. The Effective Date of this Plan
shall be July 1, 1993. This Plan, but not Options already granted, shall
terminate automatically ten years after its adoption by the Board, unless
terminated earlier by the Board under Section 15. No Options or Purchase Rights
shall be granted after termination of this Plan but all Options and Purchase
Rights granted prior to termination shall remain in effect in accordance with
their terms.
3. NUMBER AND SOURCE OF SHARES OF STOCK SUBJECT TO THE PLAN;
INDIVIDUAL LIMITATION.
(a) NUMBER AND SOURCE OF SHARES. Subject to the provisions of
Section 9, the total number of shares of Stock with respect to which Options and
Purchase Rights may be granted under this Plan is 5,200,000 shares of Stock.
The shares of Stock to be issued hereunder upon exercise of an Option or
Purchase Right may consist of authorized and unissued shares or treasury shares.
2
<PAGE>
(b) INDIVIDUAL LIMITATION. The Company may not issue Options
with a fair market value exercise price as of the date of grant covering in the
aggregate more than 500,000 shares of Stock (subject to the provisions of
Section 9) to any one participant in any one-year period.
4. ADMINISTRATION OF THE PLAN. This Plan shall be administered by
the Board or upon delegation by the Board, either in its entirety or only as it
relates to persons subject to Section 16 of the Exchange Act, by a committee of
at least two members of the Board to which administration of this Plan is
delegated by the Board. The Administrator may delegate nondiscretionary
administrative duties to such employees of the Company, or a Parent or a
Subsidiary, as it deems proper.
The Administrator may also make rules and regulations which it deems
useful to administer this Plan. Any decision or action of the Administrator in
connection with this Plan or any Options or Purchase Rights granted or shares of
Stock purchased under this Plan shall be final and binding. The Administrator
shall not be liable for any decision, action or omission respecting this Plan,
or any Options or Purchase Rights granted or shares of Stock sold under this
Plan. The Board at any time may abolish the committee and revest in the Board
the administration of the Plan.
5. PERSONS ELIGIBLE TO PARTICIPATE IN THIS PLAN. Options and
Purchase Rights may be granted under this Plan to officers, key employees,
consultants and directors of the Company, or a Parent or a Subsidiary.
6. GRANT OF OPTIONS; TERMS AND CONDITIONS OF GRANT.
(a) GRANT OF OPTIONS. The Administrator may, in its absolute
discretion, grant Options under this Plan at any time and from time to time
before the expiration of ten years from the Effective Date. The Administrator
shall specify the type of Option, the Grant Date, the number of shares of Stock
covered by the Option, the exercise price and the terms and conditions for
exercise of the Option. If the Administrator fails to specify the Grant Date,
the Grant Date shall be the date of the action taken by the Administrator to
grant the Option. Notwithstanding the foregoing, if an Incentive Stock Option
is approved in anticipation of employment of any employee, the Grant Date shall
be the date the intended Optionee is first treated as an employee of the
Company, or a Parent or a Subsidiary, for payroll purposes. As soon as
practicable after the Grant Date, the Company will provide the Optionee with a
written Option Agreement in the form approved by the Administrator, which sets
forth the type of Option, the Grant Date, the number of shares of Stock covered
by the Option, the exercise price and the terms and conditions for exercise of
the Option.
3
<PAGE>
(b) TERMS AND CONDITIONS OF GRANT. Options granted under this
Plan shall be subject to the following terms and conditions and such other terms
and conditions not inconsistent with this Plan as the Administrator may impose:
(i) TYPE OF OPTION. Any Option granted under the Plan shall
be in such form as the Administrator may from time to time approve. Incentive
Stock Options may be granted only to employees of the Company, or a Parent or a
Subsidiary. Subject to the foregoing, the Administrator shall have the
authority to grant to any participant Incentive Stock Options, Nonqualified
Stock Options or both types of Options. Any portion of an Option that is not
designated as, or does not qualify as, an Incentive Stock Option, shall
constitute a Nonqualified Stock Option.
(ii) EXERCISE OF OPTION. In order to exercise all or any
portion of any Option granted under this Plan, an Optionee must remain as an
officer, employee, consultant or director of the Company, or a Parent or a
Subsidiary, until the Vesting Date. The Option shall be exercisable on or after
each Vesting Date in accordance with the terms set forth in the Option
Agreement.
Notwithstanding any designation of an Option as an Incentive
Stock Option, to the extent that exercisability of any Incentive Stock Option
granted under this Plan or otherwise to the Optionee by the Company, or a Parent
or a Subsidiary, would result in an Optionee being able to exercise for the
first time in any calendar year Incentive Stock Options to purchase shares of
Stock having a fair market value (determined as of the Grant Date) in excess of
$100,000, the excess above $100,000 determined in reverse order of the Grant
Date shall be automatically converted to a Nonstatutory Stock Option.
Notwithstanding the foregoing, the Administrator in its absolute discretion may
elect a different order for determining which Incentive Stock Option shall
automatically be converted to a Nonstatutory Stock Option or may determine to
defer the exercisability of an Incentive Stock Option or portion of an Incentive
Stock Option so that in no event will Incentive Stock Options for Stock having a
fair market value in excess of $100,000 (determined as of the Grant Date) become
exercisable for the first time in any calendar year.
(iii) OPTION TERM. The term of any Option shall be fixed by
the Administrator, but no Incentive Stock Option granted under this Plan may be
exercised more than ten years from the Grant Date. If, at the time the Company
grants an Option, the Optionee directly or by attribution owns stock possessing
more than 10% of the total combined voting power of all classes of stock of the
Company, or a Parent or a Subsidiary, the Option shall not be exercisable more
than five years after the Grant Date.
(iv) EXERCISE PRICE. The exercise price shall be at least
100% of the fair market value of the shares of
4
<PAGE>
Stock covered by the Option on the Grant Date, as determined in good faith by
the Administrator. If, at the time the Company grants an Option, the
Optionee directly or by attribution owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company, or a
Parent or a Subsidiary, the exercise price shall be at least 110% of the fair
market value of the shares of Stock covered by the Option on the Grant Date
determined in the same manner.
(v) METHOD OF EXERCISE. To the extent the right to
purchase shares of Stock has accrued, Options may be exercised, in whole or in
part, from time to time in accordance with their terms by written notice from
the Optionee to the Company stating the number of shares of Stock with respect
to which the Option is being exercised and accompanied by payment in full of the
exercise price. Payment may be made in cash, by check or by delivery, at the
absolute discretion of the Administrator, of shares of Stock held by the
Optionee. If authorized by the Administrator, exercise of an Option may be made
pursuant to a "cashless exercise sale" procedure, pursuant to which funds to pay
for exercise of the Option are delivered to the issuer by a broker upon receipt
of stock certificates from the issuer, or pursuant to which participants obtain
margin loans from brokers to fund the exercise of the Option. In the absolute
discretion of the Administrator, payment may be made by delivery of an
interest-bearing, full recourse promissory note. In the discretion of the
Administrator, the exercise price may be paid by a combination of the above.
(vi) OPTION AGREEMENT. The terms and conditions of each
option shall be set forth in the Option Agreement evidencing the Option. No
Option shall be exercisable until after execution of the Option Agreement by the
Company and the Optionee.
(vii) NONASSIGNABILITY OF OPTION RIGHTS. No Option shall be
transferable other than by will or by the laws of descent and distribution or
pursuant to a Qualified Domestic Relations Order. During the lifetime of an
Optionee, only the Optionee may exercise an Option.
(viii) EXERCISE AFTER TERMINATION OF EMPLOYMENT OR DEATH.
If for any reason other than permanent and total disability or death an Optionee
ceases to be employed by the Company, or a Parent or a Subsidiary, in the case
of an Incentive Stock Option or to be employed by or to be a consultant or
director of the Company, or a Parent or a Subsidiary, in the case of a
Nonstatutory Stock Option, Options held at the date of such termination (to the
extent then exercisable) may be exercised, in whole or in part, at any time
within 3 months after the date of such termination or such lesser period of not
less than 30 days specified in the Option Agreement, but in no event after the
earlier of (i) the expiration date of the Option as set forth in the Option
Agreement, and (ii) ten years from the Grant
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Date. If an Optionee becomes permanently and totally disabled (within the
meaning of Section 22(e)(3) of the Code) or dies while employed by the
Company, or a Parent or a Subsidiary, (or, if the Optionee dies within the
period that the Option remains exercisable after termination of employment),
Options then held (to the extent then exercisable) may be exercised by the
Optionee, the Optionee's personal representative, or by the person to whom
the Option is transferred by will or the laws of descent and distribution or
pursuant to a Qualified Domestic Relations Order, in whole or in part, at any
time within one year after the disability or death or any lesser period of
not less than 6 months specified in the Option Agreement, but in no event
after the earlier of (i) the expiration date of the Option as set forth in
the Option Agreement and (ii) ten years from the Grant Date.
(ix) COMPLIANCE WITH SECURITIES LAWS. The Company shall not be
obligated to issue any shares of Stock upon exercise of an Option except in
compliance with all applicable securities laws and the regulations of any stock
exchange on which the Company's securities may then be listed. Evidences of
ownership of shares of Stock acquired upon exercise of Options shall bear any
legend required by, or useful for purposes of compliance with, applicable
securities laws, this Plan or the Option Agreement evidencing the Option.
7. PURCHASE RIGHTS.
(a) GRANT. As soon as practicable after the Grant Date of a
Purchase Right, the Administrator shall advise the holder of such right in
writing of the terms, conditions and restrictions relating to the grant,
including the number of shares of Stock covered by the Purchase Right, the
purchase price, and the time within which the Purchase Right must be
exercised.
(b) PURCHASE PRICE. The purchase price of a Purchase Right
shall be at least 85% of the fair market value of the shares of Stock on the
Grant Date or on the date the Stock is purchased, as determined in good faith
by the Administrator. If, at the time the Company grants a Purchase Right,
the purchaser directly or by attribution owns stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company, or
a Parent or a Subsidiary, the purchase price shall be at least 100% of the
fair market value of the shares of Stock on the Grant Date or on the date the
Stock is purchased, determined in the same manner.
8. PAYMENT OF TAXES. Unless the Administrator permits otherwise,
the participant shall pay the Company in cash, promptly when the amount of such
obligations becomes determinable (the "Tax Date"), all applicable local, state
and federal withholding taxes applicable, in the Administrator's absolute
discretion, to (i) the exercise of any Option or Purchase Right,
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or (ii) the transfer or other disposition of shares acquired upon exercise of
any Option or Purchase Right.
If and to the extent authorized by the Administrator in its absolute
discretion, a participant may make an election to (x) deliver to the Company a
promissory note of the participant on the terms set forth in Section 6(b)(v),
(y) tender shares of Stock to the Company or (z) have shares of Stock or other
securities of the Company withheld by the Company, to pay the amount of tax that
the Administrator in its absolute discretion determines to be required to be
withheld by the Company.
Any shares of Stock so withheld or tendered shall be valued by the
Company at their fair market value on the Tax Date. The right to so withhold or
tender shares of Stock shall relate separately to each Option or Purchase Right
or any increment thereof covering not less than 100 shares of Stock.
9. ADJUSTMENT FOR CHANGES IN CAPITALIZATION. The existence of
outstanding Options shall not affect the Company's right to effect adjustments,
recapitalizations, reorganizations or other changes in its or any other
corporation's capital structure or business, any merger or consolidation, any
issuance of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Stock, the dissolution or liquidation of the Company's or any
other corporation's assets or business or any other corporate act whether
similar to the events described above or otherwise. Subject to Section 10, if
the outstanding shares of the Stock are increased or decreased in number or
changed into or exchanged for a different number or kind of securities of the
Company or any other corporation by reason of a recapitalization,
reclassification, stock split, combination of shares, stock dividend or other
event, the number and kind of securities with respect to which Options may be
granted under this Plan, the number and kind of securities as to which
outstanding Options may be exercised, and the exercise price at which
outstanding Options may be exercised, shall be adjusted, to the extent possible,
so as to prevent dilution and without regard to any resulting tax consequences
to the Optionee.
10. DISSOLUTION, LIQUIDATION, MERGER. In the event of a dissolution
or liquidation of the Company, a merger in which the Company is not the
surviving corporation, or a sale of over 80% of the assets of the Company, the
Administrator, in its absolute discretion, may cancel each outstanding Option
upon payment in cash to the Optionee of the amount by which any cash and the
fair market value of any other property which the Optionee would have received
as consideration for the shares of Stock covered by the fully-vested portion of
the Option if the Option had been exercised before such liquidation,
dissolution, merger, or sale exceeds the exercise price of the Option.
11. SUCCESSOR CORPORATIONS. In the event of a merger in which the
Company is not the surviving corporation, the
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successor entity may assume the obligations under all outstanding Options.
12. NO RIGHTS AS SHAREHOLDER OR TO CONTINUED EMPLOYMENT. An Optionee
shall have no rights as a shareholder with respect to any shares of Stock
covered by an Option until such Optionee has acquired title to such shares.
Subject to Sections 9 and 10, no adjustment shall be made for dividends or other
rights for which the record date is prior to the date title to the shares of
Stock has been acquired by the Optionee. The grant of an Option shall in no way
be construed so as to confer on any Optionee the right to continued employment
by the Company, or a Parent or a Subsidiary.
13. DISQUALIFYING DISPOSITIONS. If Stock acquired upon exercise of
an Option is disposed of in a disqualifying disposition within the meaning of
Section 422 of the Code, the holder of the shares of Stock immediately prior to
the disposition shall notify the Company in writing of the date and the terms of
such disposition and comply with any other requirements imposed by the Company
in order to enable the Company to secure the related income tax deduction to
which it is entitled.
14. TERMINATION; AMENDMENT. The Board may amend, suspend or
terminate this Plan at any time and for any reason, but no amendment,
suspension or termination shall be made which would impair the right of any
person under any outstanding Options or Purchase Rights without such person's
consent. No amendment shall require shareholder approval unless (a)
shareholder approval is required by Section 422 of the Code (for Incentive
Stock Options); (b) shareholder approval is required by other applicable
laws, regulations or rules; or (c) the Board otherwise concludes that
shareholder approval is advisable.
15. GOVERNING LAW. This Plan and the rights of all persons under
this Plan shall be construed in accordance with and under applicable provisions
of the Code and the laws of the State of California.
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