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As filed with the Securities and Exchange Commission on October 31, 1997
Registration No. 333-_________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MACROMEDIA, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-3155026
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
600 TOWNSEND STREET, SUITE 310W
SAN FRANCISCO, CALIFORNIA 94103
(Address of principal executive offices, including zip code)
1992 EQUITY INCENTIVE PLAN
1993 EMPLOYEE STOCK PURCHASE PLAN
SOLIS DESIGN, INC. OPTIONS ASSUMED BY MACROMEDIA, INC.
(Full title of the plan)
JOHN C. PARSONS, JR.
VICE PRESIDENT OF FINANCE AND OPERATIONS, CHIEF FINANCIAL OFFICER AND SECRETARY
600 TOWNSEND STREET, SUITE 310W
SAN FRANCISCO, CALIFORNIA 94103
(415) 252-2000
(Name, address and telephone number, including area code, of agent for service)
COPIES TO:
Danielle C. Cullinane, Esq.
Fenwick & West LLP
Two Palo Alto Square
Palo Alto, California 94306
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CALCULATION OF REGISTRATION FEE
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Amount Proposed Maximum Proposed Maximum Amount of
Title of Securities to be Offering Price Aggregate Registration
to be Registered Registered Per Share Offering Price Fee
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.001
par value per share. 1,510,500(1) $9.509(2) $14,363,500(2) $4,353.00
================================================================================================
</TABLE>
(1) 1,000,000 additional shares available for grant and not subject to
outstanding options as of August 15, 1997 under the Registrant's 1992
Equity Incentive Plan (the "EIP"), 400,000 additional shares available for
grant under the Registrant's 1993 Employee Stock Purchase Plan (the "ESPP")
and 110,500 shares subject to Solis Design, Inc. options ("SDI Options")
assumed by the Registrant.
(2) Weighted average price per share, calculated by using (a) an estimate as of
October 28, 1997 (pursuant to Rule 457(c) solely for the purpose of
calculating the amount of the registration fee) of $9.3125 per share
for the 1,000,000 additional shares available for grant under the EIP and
for the 400,000 additional shares available for grant under the ESPP and
(b) the $12.00 exercise price for the 110,500 shares subject to SDI
Options.
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ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission (the "Commission") are incorporated herein by reference:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended March 31, 1997 filed on June 30, 1997 pursuant to Section
13(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), which Annual Report contains audited financial
statements for the fiscal year ended March 31, 1997.
(b) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1997 filed on August 14, 1997 pursuant to Section
13(a) of the Exchange Act; and
(c) The description of the Registrant's Common Stock contained in the
Registrant's registration statement on Form 8-A filed on October
22, 1993 with the Commission under Section 12(g) of the Exchange
Act, as amended on the Registrant's Form 8-A/A filed on October
5, 1995, including any amendment or report filed for the purpose
of updating such description.
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
registered hereby have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of the filing of such
documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by Section 145 of the Delaware General Corporation Law,
the Registrant's Certificate of Incorporation includes a provision that
eliminates the personal liability of its directors to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
section 174 of the Delaware General Corporation Law or (iv) for any transaction
from which the director derived an improper personal benefit. In addition, as
permitted by Section 145 of the Delaware General Corporation Law, the Bylaws of
the Registrant provide that (i) the Registrant is required to indemnify its
directors and executive officers to the fullest extent permitted by the Delaware
General Corporation Law; (ii) the Registrant may, in its discretion, indemnify
other officers, employees and agents as set forth in the Delaware General
Corporation Law; (iii) upon receipt of an undertaking to repay such advances, if
indemnification is determined to be unavailable, the Registrant is required to
advance expenses, as incurred, to its directors and executive officers to the
fullest extent permitted by the Delaware General Corporation Law in connection
with a proceeding (except if a determination is reasonably and promptly made by
the Board of Directors by a majority vote of a quorum consisting of directors
who were not parties to the proceeding or, in certain circumstances, by
independent legal counsel in a written opinion that the facts known to the
decision-making party demonstrate clearly and convincingly that such person
acted in bad faith or in a manner that such person did not believe to be in or
not opposed to the best interests of the corporation); (iv) the rights conferred
in the Bylaws are not exclusive and the Registrant is authorized to enter into
indemnification agreements with its directors, officers, employees and agents;
(v) the Registrant
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may not retroactively amend the Bylaw provisions relating to indemnity; and (vi)
to the fullest extent permitted by the Delaware General Corporation Law, a
director or executive officer will be deemed to have acted in good faith and in
a manner he or she reasonably believed to be in or not opposed to the best
interests of the Registrant, and, with respect to any criminal action or
proceeding, to have had no reasonable cause to believe that his or her conduct
was unlawful, if his or her action is based on the records or books of account
of the corporation or on information supplied to him or her by officers of the
corporation in the course of their duties or on the advice of legal counsel for
the corporation or on information or records given or reports made to the
corporation by independent certified public accountants or appraisers or other
experts.
The Registrant's policy is to enter into indemnification agreements
with each of its directors and executive officers. The indemnification
agreements provide that directors and executive officers will be indemnified and
held harmless to the fullest extent permitted by law including against all
expenses (including attorneys' fees), judgments, fines and settlement amounts
paid or reasonably incurred by them in any action, suit or proceeding, including
any derivative action by or in the right of the Registrant, on account of their
services as directors, officers, employees or agents of the Registrant or as
directors, officers, employees or agents of any other company or enterprise when
they are serving in such capacities at the request of the Registrant. The
Registrant will not be obligated pursuant to the agreements to indemnify or
advance expenses to an indemnified party with respect to proceedings or claims
(i) initiated by the indemnified party and not by way of defense, except with
respect to a proceeding authorized by the Board of Directors and successful
proceedings brought to enforce a right to indemnification under the
indemnification agreement, (ii) for any amounts paid in settlement of a
proceeding unless the Registrant consents to such settlement; (iii) on account
of any suit in which judgment is rendered against the indemnified party for an
accounting of profits made from the purchase or sale by the indemnified party of
securities of the Registrant pursuant to the provisions of Section 16(b) of the
Exchange Act and related laws; (iv) on account of conduct by a director that is
finally adjudged to have been in bad faith or conduct that the director did not
reasonably believe to be in, or not opposed to, the best interests of the
Registrant; (v) on account of any criminal action or proceeding arising out of
conduct that the director had reasonable cause to believe was unlawful; or (vi)
if a final decision by a court having jurisdiction in the matter shall determine
that such indemnification is not lawful.
The indemnification agreements also provide for contribution in
certain situations in which the Registrant and a director or executive officer
are jointly liable but indemnification is unavailable, such contribution to be
based on the relative benefits received and the relative fault of the Registrant
and the director or executive officer. Contribution is not allowed in connection
with a Section 16(b) judgment, and adjudication of bad faith or conduct that a
director or executive officer did not reasonably believe to be in, or not
opposed to, the best interest of the Registrant, or a proceeding arising out of
conduct a director or executive officer had reasonable cause to believe was
unlawful.
The indemnification agreements require a director or executive
officer to reimburse the Registrant for all expenses advanced only to the extent
it is ultimately determined that the director or executive officer is not
entitled, under Delaware law, the Bylaws, the indemnification agreement or
otherwise to be indemnified for such expenses. The indemnification agreements
provide that they are not exclusive of any rights a director or executive
officer may have under the Certificate of Incorporation, Bylaws, other
agreements, any majority-in-interest vote of the stockholders or vote of
disinterested directors, Delaware law or otherwise.
The indemnification provision in the Bylaws, and the indemnification
agreements entered into between the Registrant and its directors and executive
officers, may be sufficiently broad to permit indemnification of the
Registrant's executive officers and directors for liabilities arising under the
Securities Act of 1933, as amended (the "Securities Act").
As authorized by the Bylaws, the Registrant, with approval by the
Board, has purchased director and officer liability insurance.
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L. John Doerr is indemnified by Kleiner Perkins Caufield & Byers in
his capacity as a director of the Registrant.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
4.01 Registrant's Amended and Restated Certificate of
Incorporation (incorporated herein by reference to Exhibit
4.01 to the Registrant's registration statement on Form
S-8 (File No. 33-89092) filed with the Commission on
February 3, 1995).
4.02 Certificate of Amendment of Registrant's Restated
Certificate of Incorporation (incorporated herein by
reference to the Registrant's registration statement on
Form 8-A/A filed with the Commission on October 5, 1995).
4.03 Registrant's Bylaws, as amended (incorporated herein by
reference to Exhibit 3.02 to the Registrant's Registration
Statement on Form S-1 (File No. 33-70624) declared
effective by the Commission on December 10, 1993 (the
"Form S-1")).
4.04 Amendment to Registrant's Bylaws effective October 15,
1993 (incorporated herein by reference to Exhibit 3.03 to
the Form S-1).
4.05 Registrant's 1992 Equity Incentive Plan, as amended.
4.06 Registrant's 1993 Employee Stock Purchase Plan, as
amended.
4.07 Solis Design, Inc. 1997 Equity Incentive Plan and Form
Agreements.
4.08 Solis Design, Inc. Non-Plan Form Agreements.
5.01 Opinion of Fenwick & West LLP.
23.01 Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02 Consent of KPMG Peat Marwick LLP, independent auditors.
23.03 Consent of Arthur Andersen LLP, independent auditors.
24.01 Power of Attorney (see pages 6 and 7).
ITEM 9. UNDERTAKINGS.
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;
(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)
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which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not
exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no
more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration
Statement; and
(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;
provided, however, that paragraphs (1)(i) and (1)(ii) above 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
Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
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 provisions discussed in Item 6 hereof, or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered hereby, 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.
[The remainder of this page has been intentionally left blank.]
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Francisco, State of California, on the 30th day
of October, 1997.
MACROMEDIA, INC.
By: /s/ John C. Parsons, Jr.
------------------------------------------
John C. Parsons, Jr.
Vice President of Finance and Operations,
Chief Financial Officer and Secretary
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each individual whose signature
appears below and on the next page constitutes and appoints Robert K. Burgess
and John C. Parsons, Jr., and each of them, his true and lawful
attorneys-in-fact and agents with full power of substitution, 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 on Form
S-8, and to file the same with all exhibits thereto and all documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or his or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on this page and
the next in the capacities and on the date indicated.
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Signature Title Date
--------- ----- ----
<S> <C> <C>
PRINCIPAL EXECUTIVE OFFICER:
/s/ Robert K. Burgess President and a Director October 30, 1997
- -------------------------------
Robert K. Burgess
PRINCIPAL FINANCIAL OFFICER
AND ACCOUNTING OFFICER:
/s/ John C. Parsons, Jr. Vice President of Finance and October 30, 1997
- ------------------------------- Operations, Chief Financial
John C. Parsons, Jr. Officer and Secretary
</TABLE>
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<TABLE>
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Signature Title Date
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<S> <C> <C>
ADDITIONAL DIRECTORS:
/s/ John C. Colligan
- ------------------------------- Chairman of the Board of Directors October 28, 1997
John C. Colligan
- ------------------------------- Director October __, 1997
L. John Doerr
/s/ John (Ian) Giffen
- ------------------------------- Director October 28, 1997
John (Ian) Giffen
- ------------------------------- Director October __, 1997
C. Richard Kramlich
/s/ Donald L. Lucas
- ------------------------------- Director October 30, 1997
Donald L. Lucas
/s/ James R. Von Ehr II
- ------------------------------- Director October 30, 1997
James R. Von Ehr II
/s/ William B. Welty
- ------------------------------- Director October 30, 1997
William B. Welty
</TABLE>
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EXHIBIT INDEX
4.01 Registrant's Amended and Restated Certificate of Incorporation
(incorporated herein by reference to Exhibit 4.01 to the Registrant's
registration statement on Form S-8 (File No. 33-89092) filed with the
Commission on February 3, 1995).
4.02 Certificate of Amendment of Registrant's Restated Certificate of
Incorporation (incorporated herein by reference to the Registrant's
registration statement on Form 8-A/A filed with the Commission on
October 5, 1995).
4.03 Registrant's Bylaws, as amended (incorporated herein by reference to
Exhibit 3.02 to the Registrant's Registration Statement on Form S-1
(File No. 33-70624) declared effective by the Commission on December
10, 1993 (the "Form S-1")).
4.04 Amendment to Registrant's Bylaws effective October 15, 1993
(incorporated herein by reference to Exhibit 3.03 to the Form S-1).
4.05 Registrant's 1992 Equity Incentive Plan, as amended.
4.06 Registrant's 1993 Employee Stock Purchase Plan, as amended.
4.07 Solis Design, Inc. 1997 Equity Incentive Plan and Form Agreements.
4.08 Solis Design, Inc. Non-Plan Form Agreements.
5.01 Opinion of Fenwick & West LLP.
23.01 Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02 Consent of KPMG Peat Marwick LLP, independent auditors.
23.03 Consent of Arthur Andersen LLP, independent auditors.
24.01 Power of Attorney (see pages 6 and 7).
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EXHIBIT 4.05
MACROMEDIA, INC.
1992 EQUITY INCENTIVE PLAN
As Adopted September 23, 1992
and Amended Through June 27, 1997
1. PURPOSE. The purpose of the Plan is to provide incentives to
attract, retain and motivate eligible persons whose present and potential
contributions are important to the success of the Company, its Parent,
Subsidiaries and Affiliates, by offering them an opportunity to participate in
the Company's future performance through awards of Options, Restricted Stock and
Stock Bonuses. Capitalized terms not defined in the text are defined in Section
24.
2. SHARES SUBJECT TO THE PLAN.
2.1 Number of Shares Available. Subject to Sections
2.2 and 18, the total number of Shares reserved and available for grant and
issuance pursuant to the Plan shall be 11,800,000 Shares. Any Shares issuable
upon exercise of options granted pursuant to the Authorware 1988 Stock Option
Plan, the Macromind, Inc. 1989 Incentive Stock Option Plan and 1989 Nonstatutory
Stock Option Plan, and the Paracomp, Inc. 1989 Stock Option Plan (the "Prior
Plans") that expire or become unexercisable for any reason without having been
exercised in full, shall no longer be available for distribution under the Prior
Plans, but shall be available for distribution under this Plan. Subject to
Sections 2.2 and 18, Shares shall again be available for grant and issuance in
connection with future Awards under the Plan that: (a) are subject to issuance
upon exercise of an Option but cease to be subject to such Option for any reason
other than exercise of such Option, (b) are subject to an Award granted
hereunder but are forfeited or are repurchased by the Company at the original
issue price, or (c) are subject to an Award that otherwise terminates without
Shares being issued.
2.2 Adjustment of Shares. In the event that the number
of outstanding Shares is changed by a stock dividend, recapitalization, stock
split, reverse stock split, subdivision, combination, reclassification or
similar change in the capital structure of the Company without consideration,
then (a) the number of Shares reserved for issuance under the Plan, (b) the
Exercise Prices of and number of Shares subject to outstanding Options, and (c)
the number of Shares subject to other outstanding Awards shall be
proportionately adjusted, subject to any required action by the Board or the
stockholders of the Company and compliance with applicable securities laws;
provided, however, that fractions of a Share shall not be issued but shall
either be paid in cash at Fair Market Value or shall be rounded up to the
nearest Share, as determined by the Committee; and provided, further, that the
Exercise Price of any Option may not be decreased to below the par value of the
Shares.
3. ELIGIBILITY. ISOs (as defined in Section 5 below) may be granted
only to employees (including officers and directors who are also employees) of
the Company or of a Parent or Subsidiary of the Company. All other Awards may be
granted to employees, officers, directors, consultants, independent contractors
and advisers of the Company or any
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Parent, Subsidiary or Affiliate of the Company; provided such consultants,
contractors and advisers render bona fide services not in connection with the
offer and sale of securities in a capital-raising transaction. No "Named
Executive Officer" (as that term is defined in Item 402(a)(3) of Regulation S-K
promulgated under the Exchange Act) shall be eligible to receive more than
1,800,000 Shares at any time during the term of this Plan pursuant to the grant
of Awards hereunder. A person may be granted more than one Award under the Plan.
4. ADMINISTRATION.
4.1 Committee Authority. The Plan shall be administered
by the Committee or the Board acting as the Committee. Subject to the general
purposes, terms and conditions of the Plan, and to the direction of the Board,
the Committee shall have full power to implement and carry out the Plan. The
Committee shall have the authority to:
(a) construe and interpret the Plan, any Award Agreement and
any other agreement or document executed pursuant to the
Plan;
(b) prescribe, amend and rescind rules and regulations relating
to the Plan;
(c) select persons to receive Awards;
(d) determine the form and terms of Awards;
(e) determine the number of Shares or other consideration
subject to Awards;
(f) determine whether Awards will be granted singly, in
combination, in tandem, in replacement of, or as
alternatives to, other Awards under the Plan or any other
incentive or compensation plan of the Company or any
Parent, Subsidiary or Affiliate of the Company;
(g) grant waivers of Plan or Award conditions;
(h) determine the vesting, exercisability and payment of
Awards;
(i) correct any defect, supply any omission, or reconcile any
inconsistency in the Plan, any Award or any Award
Agreement;
(j) determine whether an Award has been earned; and
(k) make all other determinations necessary or advisable for
the administration of the Plan.
4.2 Committee Discretion. Any determination made by the
Committee with respect to any Award shall be made in its sole discretion at the
time of grant of the Award or, unless in contravention of any express term of
the Plan or Award, at any later time, and such determination shall be final and
binding on the Company and all persons having an interest in any Award under the
Plan. The Committee may delegate to one or more
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officers of the Company the authority to grant an Award under the Plan to
Participants who are not Insiders of the Company.
4.3 Compliance With Code Section 162(m). If two or
more members of the Board are Outside Directors, the Committee shall be
comprised of at least two members of the Board, all of whom are Outside
Directors.
5. OPTIONS. The Committee may grant Options to eligible persons and
shall determine whether such Options shall be Incentive Stock Options within the
meaning of the Code ("ISOs") or Nonqualified Stock Options ("NQSOs"), the number
of Shares subject to the Option, the Exercise Price of the Option, the period
during which the Option may be exercised, and all other terms and conditions of
the Option, subject to the following:
5.1 Form of Option Grant. Each Option granted under the
Plan shall be evidenced by an Award Agreement which shall expressly identify the
Option as an ISO or NQSO ("Stock Option Agreement"), and be in such form and
contain such provisions (which need not be the same for each Participant) as the
Committee shall from time to time approve, and which shall comply with and be
subject to the terms and conditions of the Plan.
5.2 Date of Grant. The date of grant of an Option
shall be the date on which the Committee makes the determination to grant such
Option, unless otherwise specified by the Committee. The Stock Option Agreement
and a copy of the Plan will be delivered to the Participant within a reasonable
time after the granting of the Option.
5.3 Exercise Period. Options shall be exercisable
within the times or upon the events determined by the Committee as set forth in
the Stock Option Agreement; provided, however, that no Option shall be
exercisable after the expiration of one hundred twenty (120) months from the
date the Option is granted, and provided further that no Option granted to a
person who directly or by attribution owns more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or any Parent
or Subsidiary of the Company ("Ten Percent Stockholder") shall be exercisable
after the expiration of five (5) years from the date the Option is granted. The
Committee also may provide for the exercise of Options to become exercisable at
one time or from time to time, periodically or otherwise, in such number or
percentage as the Committee determines.
5.4 Exercise Price. The Exercise Price shall be
determined by the Committee when the Option is granted and may be not less than
85% of the Fair Market Value of the Shares on the date of grant; provided that
(i) the Exercise Price of an ISO shall be not less than 100% of the Fair Market
Value of the Shares on the date of grant and (ii) the Exercise Price of any
Option granted to a Ten Percent Stockholder shall not be less than 110% of the
Fair Market Value of the Shares on the date of grant. Payment for the Shares
purchased may be made in accordance with Section 8 of the Plan.
5.5 Method of Exercise. Options may be exercised only
by delivery to the Company of a written stock option exercise agreement (the
"Exercise Agreement") in a form approved by the Committee (which need not be the
same for each Participant), stating the number of Shares being purchased, the
restrictions imposed on the Shares, if any, and such representations and
agreements regarding Participant's investment intent and access to
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information, if any, as may be required or desirable by the Company to comply
with applicable securities laws, together with payment in full of the Exercise
Price for the number of Shares being purchased.
5.6 Termination. Notwithstanding the exercise periods
set forth in the Stock Option Agreement, exercise of an Option shall always be
subject to the following:
(a) If the Participant is Terminated for any reason except
death or Disability, then Participant may exercise such
Participant's Options only to the extent that such Options
would have been exercisable upon the Termination Date no
later than ninety (90) days after the Termination Date (or
such shorter time period as may be specified in the Stock
Option Agreement), but in any event, no later than the
expiration date of the Options.
(b) If the Participant is terminated because of death or
Disability (or the participant dies within three months of
such termination), then Participant's Options may be
exercised only to the extent that such Options would have
been exercisable by Participant on the Termination Date and
must be exercised by Participant (or Participant's legal
representative or authorized assignee) no later than twelve
(12) months after the Termination Date (or such shorter
time period as may be specified in the Stock Option
Agreement), but in any event no later than the expiration
date of the Options.
5.7 Limitations on Exercise. The Committee may
specify a reasonable minimum number of Shares that may be purchased on any
exercise of an Option, provided that such minimum number will not prevent
Participant from exercising the Option for the full number of Shares for which
it is then exercisable.
5.8 Limitations on ISOs. The aggregate Fair Market
Value (determined as of the date of grant) of Shares with respect to which ISOs
are exercisable for the first time by a Participant during any calendar year
(under the Plan or under any other incentive stock option plan of the Company or
any Affiliate, Parent or Subsidiary of the Company) shall not exceed $100,000.
If the Fair Market Value of Shares on the date of grant with respect to which
ISOs are exercisable for the first time by a Participant during any calendar
year exceeds $100,000, the Options for the first $100,000 worth of Shares to
become exercisable in such calendar year shall be ISOs and the Options for the
amount in excess of $100,000 that become exercisable in that calendar year shall
be NQSOs. In the event that the Code or the regulations promulgated thereunder
are amended after the Effective Date of the Plan to provide for a different
limit on the Fair Market Value of Shares permitted to be subject to ISOs, such
different limit shall be automatically incorporated herein and shall apply to
any Options granted after the effective date of such amendment.
5.9 Modification, Extension or Renewal. The Committee
may modify, extend or renew outstanding Options and authorize the grant of new
Options in substitution therefor, provided that any such action may not, without
the written consent of Participant, impair any of Participant's rights under any
Option previously granted. Any
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outstanding ISO that is modified, extended, renewed or otherwise altered shall
be treated in accordance with Section 424(h) of the Code. The Committee may
reduce the Exercise Price of outstanding Options without the consent of
Participants affected by a written notice to them; provided, however, that the
Exercise Price may not be reduced below the minimum Exercise Price that would be
permitted under Section 5.4 of the Plan for Options granted on the date the
action is taken to reduce the Exercise Price; provided, further, that the
Exercise Price shall not be reduced below the par value of the Shares, if any.
5.10 No Disqualification. Notwithstanding any other
provision in the Plan, no term of the Plan relating to ISOs shall be
interpreted, amended or altered, nor shall any discretion or authority granted
under the Plan be exercised, so as to disqualify the Plan under Section 422 of
the Code or, without the consent of the Participant affected, to disqualify any
ISO under Section 422 of the Code.
6. RESTRICTED STOCK. A Restricted Stock Award is an offer by the
Company to sell to an eligible person Shares that are subject to restrictions.
The Committee shall determine to whom an offer will be made, the number of
Shares the person may purchase, the price to be paid (the "Purchase Price"), the
restrictions to which the Shares shall be subject, and all other terms and
conditions of the Restricted Stock Award, subject to the following:
6.1 Form of Restricted Stock Award. All purchases under
a Restricted Stock Award made pursuant to the Plan shall be evidenced by an
Award Agreement ("Restricted Stock Purchase Agreement") that shall be in such
form (which need not be the same for each Participant) as the Committee shall
from time to time approve, and shall comply with and be subject to the terms and
conditions of the Plan. The offer of Restricted Stock shall be accepted by the
Participant's execution and delivery of the Restricted Stock Purchase Agreement
and full payment for the Shares to the Company within thirty (30) days from the
date the Restricted Stock Purchase Agreement is delivered to the person. If such
person does not execute and deliver the Restricted Stock Purchase Agreement
along with full payment for the Shares to the Company within thirty (30) days,
then the offer shall terminate, unless otherwise determined by the Committee.
6.2 Purchase Price. The Purchase Price of Shares sold
pursuant to a Restricted Stock Award shall be determined by the Committee and
shall be at least 85% of the Fair Market Value of the Shares when the Restricted
Stock Award is granted, except in the case of a sale to a Ten Percent
Stockholder, in which case the Purchase Price shall be 100% of the Fair Market
Value. Payment of the Purchase Price may be made in accordance with Section 8 of
the Plan.
6.3 Restrictions. Restricted Stock Awards shall be
subject to such restrictions as the Committee may impose. The Committee may
provide for the lapse of such restrictions in installments and may accelerate or
waive such restrictions, in whole or part, based on length of service,
performance or such other factors or criteria as the Committee may determine.
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7. STOCK BONUSES.
7.1 Awards of Stock Bonuses. A Stock Bonus is an award of
Shares (which may consist of Restricted Stock) for services rendered to the
Company or any Parent, Subsidiary or Affiliate of the Company. A Stock Bonus may
be awarded for past services already rendered to the Company, or any Parent,
Subsidiary or Affiliate of the Company pursuant to an Award Agreement (the
"Stock Bonus Agreement") that shall be in such form (which need not be the same
for each Participant) as the Committee shall from time to time approve, and
shall comply with and be subject to the terms and conditions of the Plan. A
Stock Bonus may be awarded upon satisfaction of such performance goals as are
set out in advance in Participant's individual Award Agreement (the "Performance
Stock Bonus Agreement") that shall be in such form (which need not be the same
for each Participant) as the Committee shall from time to time approve, and
shall comply with and be subject to the terms and conditions of the Plan. Stock
Bonuses may vary from Participant to Participant and between groups of
Participants, and may be based upon the achievement of the Company, Parent,
Subsidiary or Affiliate and/or individual performance factors or upon such other
criteria as the Committee may determine.
7.2 Terms of Stock Bonuses. The Committee shall
determine the number of Shares to be awarded to the Participant and whether such
Shares shall be Restricted Stock. If the Stock Bonus is being earned upon the
satisfaction of performance goals pursuant to a Performance Stock Bonus
Agreement, then the Committee shall determine: (a) the nature, length and
starting date of any period during which performance is to be measured (the
"Performance Period") for each Stock Bonus; (b) the performance goals and
criteria to be used to measure the performance, if any; (c) the number of Shares
that may be awarded to the Participant; and (d) the extent to which such Stock
Bonuses have been earned. Performance Periods may overlap and Participants may
participate simultaneously with respect to Stock Bonuses that are subject to
different Performance Periods and different performance goals and other
criteria. The number of Shares may be fixed or may vary in accordance with such
performance goals and criteria as may be determined by the Committee. The
Committee may adjust the performance goals applicable to the Stock Bonuses to
take into account changes in law and accounting or tax rules and to make such
adjustments as the Committee deems necessary or appropriate to reflect the
impact of extraordinary or unusual items, events or circumstances to avoid
windfalls or hardships.
7.3 Form of Payment. The earned portion of a Stock
Bonus may be paid currently or on a deferred basis with such interest or
dividend equivalent, if any, as the Committee may determine. Payment may be made
in the form of cash, whole Shares, including Restricted Stock, or a combination
thereof, either in a lump sum payment or in installments, all as the Committee
shall determine.
7.4 Termination During Performance Period. If a
Participant is Terminated during a Performance Period for any reason, then such
Participant shall be entitled to payment (whether in Shares, cash or otherwise)
with respect to the Stock Bonus only to the extent earned as of the date of
Termination in accordance with the Performance Stock Bonus Agreement, unless the
Committee shall determine otherwise.
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8. PAYMENT FOR SHARE PURCHASES.
8.1 Payment. Payment for Shares purchased pursuant to the
Plan may be made in cash (by check) or, where expressly approved for the
Participant by the Committee and where permitted by law:
(a) by cancellation of indebtedness of the Company to the
Participant;
(b) by surrender of Shares that either: (1) have been owned by
Participant for more than six (6) months and have been paid
for within the meaning of SEC Rule 144 (and, if such shares
were purchased from the Company by use of a promissory
note, such note has been fully paid with respect to such
Shares); or (2) were obtained by Participant in the public
market;
(c) by tender of a full recourse promissory note having such
terms as may be approved by the Committee and bearing
interest at a rate sufficient to avoid imputation of income
under Sections 483 and 1274 of the Code; provided, however,
that Participants who are not employees of the Company
shall not be entitled to purchase Shares with a promissory
note unless the note is adequately secured by collateral
other than the Shares; provided, further, that the portion
of the Purchase Price equal to the par value of the
Shares, if any, must be paid in cash;
(d) by waiver of compensation due or accrued to Participant for
services rendered;
(e) by tender of property;
(f) with respect only to purchases upon exercise of an Option,
and provided that a public market for the Company's stock
exists:
(1) through a "same day sale" commitment from
Participant and a broker-dealer that is a member of
the National Association of Securities Dealers (an
"NASD Dealer") whereby Participant irrevocably
elects to exercise the Option and to sell a portion
of the Shares so purchased to pay for the Exercise
Price, and whereby the NASD Dealer irrevocably
commits upon receipt of such Shares to forward the
Exercise Price directly to the Company; or
(2) through a "margin" commitment from Participant and
an NASD Dealer whereby Participant irrevocably
elects to exercise the Option and to pledge the
Shares so purchased to the NASD Dealer in a margin
account as security for a loan from the NASD Dealer
in the amount of the Exercise Price, and whereby the
NASD Dealer irrevocably commits upon receipt of such
Shares to forward the exercise price directly to the
Company; or
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(g) by any combination of the foregoing.
8.2 Loan Guarantees. The Committee may help the
Participant pay for Shares purchased under the Plan by authorizing a guarantee
by the Company of a third-party loan to the Participant.
9. WITHHOLDING TAXES.
9.1 Withholding Generally. Whenever Shares are to be
issued in satisfaction of Awards granted under the Plan, the Company may require
the Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. Whenever, under the Plan, payments
in satisfaction of Awards are to be made in cash, such payment shall be net of
an amount sufficient to satisfy federal, state, and local withholding tax
requirements.
9.2 Stock Withholding. When, under applicable tax
laws, a Participant incurs tax liability in connection with the exercise or
vesting of any Award that is subject to tax withholding and the Participant is
obligated to pay the Company the amount required to be withheld, the Committee
may allow the Participant to satisfy the minimum withholding tax obligation by
electing to have the Company withhold from the Shares to be issued that number
of Shares having a Fair Market Value equal to the minimum amount required to be
withheld, determined on the date that the amount of tax to be withheld is to be
determined (the "Tax Date"). All elections by a Participant to have Shares
withheld for this purpose shall be made in writing in a form acceptable to the
Committee and shall be subject to the following restrictions:
(a) the election must be made on or prior to the applicable Tax
Date;
(b) once made the election shall be irrevocable as to the
particular Shares as to which the election is made; and
(c) all elections shall be subject to the consent or
disapproval of the Committee.
10. PRIVILEGES OF STOCK OWNERSHIP.
10.1 Voting and Dividends. No Participant shall have any of
the rights of a stockholder with respect to any Shares until the Shares are
issued to the Participant. After Shares are issued to the Participant, the
Participant shall be a stockholder and have all the rights of a stockholder with
respect to such Shares, including the right to vote and receive all dividends or
other distributions made or paid with respect to such Shares; provided, that if
such Shares are Restricted Stock, then any new, additional or different
securities the Participant may become entitled to receive with respect to such
Shares by virtue of a stock dividend, stock split or any other change in the
corporate or capital structure of the Company shall be subject to the same
restrictions as the Restricted Stock; provided, further, that the Participant
shall have no right to retain such dividends or distributions with respect to
Shares that are repurchased at the Participant's original Purchase Price
pursuant to Section 12.
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10.2 Financial Statements. The Company shall provide
financial statements to each Participant prior to such Participant's purchase of
Shares under the Plan, and to each Participant annually during the period such
Participant has Options outstanding; provided, however, the Company shall not be
required to provide such financial statements to Participants whose services in
connection with the Company assure them access to equivalent information.
11. TRANSFERABILITY. Awards granted under the Plan, and any
interest therein, shall not be transferable or assignable by Participant, and
may not be made subject to execution, attachment or similar process, otherwise
than by will or by the laws of descent and distribution or as consistent with
the specific Plan and Award Agreement provisions relating thereto. During the
lifetime of the Participant an Award shall be exercisable only by the
Participant, and any elections with respect to an Award, may be made only by the
Participant.
12. RESTRICTIONS ON SHARES. At the discretion of the Committee, the
Company may reserve to itself and/or its assignee(s) in the Award Agreement (a)
a right of first refusal to purchase all Shares that a Participant (or a
subsequent transferee) may propose to transfer to a third party, and/or (b) a
right to repurchase a portion of or all Shares held by a Participant following
such Participant's Termination at any time within ninety (90) days after the
later of Participant's Termination Date and the date Participant purchases
Shares under the Plan, for cash or cancellation of purchase money indebtedness,
at: (A) with respect to Shares that are "Vested" (as defined in the Award
Agreement), the higher of: (l) Participant's original Purchase Price, or (2) the
Fair Market Value of such Shares on Participant's Termination Date, provided,
such right of repurchase terminates when the Company's securities become
publicly traded; or (B) with respect to Shares that are not "Vested" (as defined
in the Award Agreement), at the Participant's original Purchase Price, provided,
that the right to repurchase at the original Purchase Price lapses at the rate
of at least 20% per year over 5 years from the date the Shares were purchased,
and if the right to repurchase is assignable, the assignee must pay the Company,
upon assignment of the right to repurchase, cash equal to the excess of the Fair
Market Value of the Shares over the original Purchase Price.
13. CERTIFICATES. All certificates for Shares or other securities
delivered under the Plan shall be subject to such stock transfer orders, legends
and other restrictions as the Committee may deem necessary or advisable,
including restrictions under any applicable federal, state or foreign securities
law, or any rules, regulations and other requirements of the SEC or any stock
exchange or automated quotation system upon which the Shares may be listed.
14. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a
Participant's Shares, the Committee may require the Participant to deposit all
certificates, together with stock powers or other instruments of transfer
approved by the Committee, appropriately endorsed in blank, with the Company or
an agent designated by the Company to hold in escrow until such restrictions
have lapsed or terminated, and the Committee may cause a legend or legends
referencing such restrictions to be placed on the certificates. Any Participant
who is permitted to execute a promissory note as partial or full consideration
for the purchase of Shares under the Plan shall be required to pledge and
deposit with the Company all or part of the Shares so purchased as collateral to
secure the payment of Participant's obligation to the Company under the
promissory note; provided, however, that
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the Committee may require or accept other or additional forms of collateral to
secure the payment of such obligation and, in any event, the Company shall have
full recourse against the Participant under the promissory note notwithstanding
any pledge of the Participant's Shares or other collateral. In connection with
any pledge of the Shares, Participant shall be required to execute and deliver a
written pledge agreement in such form as the Committee shall from time to time
approve. The Shares purchased with the promissory note may be released from the
pledge on a prorata basis as the promissory note is paid.
15. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time
or from time to time, authorize the Company, with the consent of the respective
Participants, to issue new Awards in exchange for the surrender and cancellation
of any or all outstanding Awards. The Committee may at any time buy from a
Participant an Award previously granted with payment in cash, Shares (including
Restricted Stock) or other consideration, based on such terms and conditions as
the Committee and the Participant shall agree.
16. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award shall
not be effective unless such Award is in compliance with all applicable federal
and state securities laws, rules and regulations of any governmental body, and
the requirements of any stock exchange or automated quotation system upon which
the Shares may then be listed, as they are in effect on the date of grant of the
Award and also on the date of exercise or other issuance. Notwithstanding any
other provision in the Plan, the Company shall have no obligation to issue or
deliver certificates for Shares under the Plan prior to (a) obtaining any
approvals from governmental agencies that the Company determines are necessary
or advisable, and/or (b) completion of any registration or other qualification
of such shares under any state or federal law or ruling of any governmental body
that the Company determines to be necessary or advisable. The Company shall be
under no obligation to register the Shares with the SEC or to effect compliance
with the registration, qualification or listing requirements of any state
securities laws, stock exchange or automated quotation system, and the Company
shall have no liability for any inability or failure to do so.
17. NO OBLIGATION TO EMPLOY. Nothing in the Plan or any Award
granted under the Plan shall confer or be deemed to confer on any Participant
any right to continue in the employ of, or other relationship with, the Company
or any Parent, Subsidiary or Affiliate of the Company or limit in any way the
right of the Company or any Parent, Subsidiary or Affiliate of the Company to
terminate Participant's employment or other relationship at any time, with or
without cause.
18. CORPORATE TRANSACTIONS.
18.1 Assumption or Replacement of Awards by Successor.
In the event of (a) a merger or consolidation in which the Company is not the
surviving corporation (other than a merger or consolidation with a wholly-owned
subsidiary, a reincorporation of the Company in a different jurisdiction, or
other transaction in which there is no substantial change in the stockholders of
the Company and the Awards granted under the Plan are assumed or replaced by the
successor corporation, which assumption shall be binding on all Participants),
(b) a dissolution or liquidation of the Company, (c) the sale of substantially
all of the assets, or (d) any other transaction which qualifies
as a "corporate transaction" under Section 424(a) of the Code wherein the
stockholders of the Company give
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up all of their equity interest in the Company (except for the acquisition, sale
or transfer of all or substantially all of the outstanding shares of the
Company), any or all outstanding Awards may be assumed or replaced by the
successor corporation, which assumption or replacement shall be binding on all
Participants. In the alternative, the successor corporation may substitute
equivalent Awards or provide substantially similar consideration to Participants
as was provided to stockholders (after taking into account the existing
provisions of the Awards). The successor corporation may also issue, in place of
outstanding Shares of the Company held by the Participant, substantially similar
shares or other property subject repurchase restrictions no less favorable to
the Participant.
18.2 Expiration of Options. In the event such
successor corporation, if any, refuses to assume or substitute the Options, as
provided above, pursuant to a transaction described in Subsection 18.1(a) above,
such Options shall expire on such transaction at such time and on such
conditions as the Board shall determine. In the event such successor
corporation, if any, refuses to assume or substitute the Options as provided
above, pursuant to a transaction described in Subsections 18.1(b), (c) or (d)
above, or there is no successor corporation, and if the Company ceases to exist
as a separate corporate entity, then, notwithstanding any contrary terms in the
Award Agreement, the Options shall expire on a date at least twenty (20) days
after the Board gives written notice to Participants specifying the terms and
conditions of such termination.
18.3 Other Treatment of Awards. Subject to any greater
rights granted to Participants under the foregoing provisions of this Section
18, in the event of the occurrence of any transaction described in Section 18.1,
any outstanding Awards shall be treated as provided in the applicable agreement
or plan of merger, consolidation, dissolution, liquidation, sale of assets or
other "corporate transaction."
18.4 Assumption of Awards by the Company. The Company,
from time to time, also may substitute or assume outstanding awards granted by
another company, whether in connection with an acquisition of such other company
or otherwise, by either (a) granting an Award under the Plan in substitution of
such other company's award, or (b) assuming such award as if it had been granted
under the Plan if the terms of such assumed award could be applied to an Award
granted under the Plan. Such substitution or assumption shall be permissible if
the holder of the substituted or assumed award would have been eligible to be
granted an Award under the Plan if the other company had applied the rules of
the Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award shall remain unchanged
(except that the exercise price and the number and nature of Shares issuable
upon exercise of any such option will be adjusted appropriately pursuant to
Section 424(a) of the Code). In the event the Company elects to grant a new
Option rather than assuming an existing option, such new Option may be granted
with a similarly adjusted Exercise Price.
19. ADOPTION AND STOCKHOLDER APPROVAL. The Plan shall become
effective on the date that it is adopted by the Board (the "Effective Date").
The Plan shall be approved by the stockholders of the Company (excluding Shares
issued pursuant to this Plan), consistent with applicable laws, within twelve
months before or after the Effective Date. Upon the Effective Date, the Board
may grant Awards pursuant to the Plan; provided, however, that: (a) no Option
may be exercised prior to initial stockholder approval of the Plan;
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(b) no Option granted pursuant to an increase in the number of Shares approved
by the Board shall be exercised prior to the time such increase has been
approved by the stockholders of the Company; and (c) in the event that
stockholder approval is not obtained within the time period provided herein, all
Awards granted hereunder shall be canceled, any Shares issued pursuant to any
Award shall be canceled and any purchase of Shares hereunder shall be rescinded.
20. TERM OF PLAN. The Plan will terminate ten (10) years from the
Effective Date or, if earlier, the date of stockholder approval.
21. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time
terminate or amend the Plan in any respect, including without limitation
amendment of any form of Award Agreement or instrument to be executed pursuant
to the Plan; provided, however, that the Board shall not, without the approval
of the stockholders of the Company, amend the Plan in any manner that requires
such stockholder approval pursuant to the Code or the regulations promulgated
thereunder as such provisions apply to ISO plans.
22. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of the Plan by
the Board, the submission of the Plan to the stockholders of the Company for
approval, nor any provision of the Plan shall be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and bonuses otherwise than under the Plan, and such
arrangements may be either generally applicable or applicable only in specific
cases.
23. GOVERNING LAW. The Plan and all agreements, documents and
instruments entered into pursuant to the Plan shall be governed by and construed
in accordance with the internal laws of the State of California, excluding that
body of law pertaining to conflict of laws.
24. DEFINITIONS. As used in the Plan, the following terms shall
have the following meanings:
"Affiliate" means any corporation that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, another corporation, where "control" (including
the terms "controlled by" and "under common control with") means the possession,
direct or indirect, of the power to cause the direction of the management and
policies of the corporation, whether through the ownership of voting securities,
by contract or otherwise.
"Award" means any award under the Plan, including any
Option, Restricted Stock or Stock Bonus.
"Award Agreement" means, with respect to each Award, the
signed written agreement between the Company and the Participant setting forth
the terms and conditions of the Award.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Committee" means the committee appointed by the Board to
administer the Plan, or if no committee is appointed, the Board.
"Company" means Macromedia, Inc., a corporation organized
under the laws of the State of Delaware, or any successor corporation.
"Disability" means a disability, whether temporary or
permanent, partial or total, within the meaning of Section 22(e)(3) of the Code,
as determined by the Committee.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"Exercise Price" means the price at which a holder of an
Option may purchase the Shares issuable upon exercise of the Option.
"Fair Market Value" means, as of any date, the value of a
share of the Company's Common Stock determined as follows:
(a) if such Common Stock is then quoted on the NASDAQ National
Market System, its last reported sale price on the NASDAQ
National Market System or, if no such reported sale takes
place on such date, the average of the closing bid and
asked prices;
(b) if such Common Stock is publicly traded and is then listed
on a national securities exchange, the last reported sale
price or, if no such reported sale takes place on such
date, the average of the closing bid and asked prices on
the principal national securities exchange on which the
Common Stock is listed or admitted to trading;
(c) if such Common Stock is publicly traded but is not quoted
on the NASDAQ National Market System nor listed or admitted
to trading on a national securities exchange, the average
of the closing bid and asked prices on such date, as
reported by The Wall Street Journal, for the
over-the-counter market; or
(d) if none of the foregoing is applicable, by the Board of
Directors of the Company in good faith.
"Insider" means an officer or director of the Company or
any other person whose transactions in the Company's Common Stock are subject to
Section 16 of the Exchange Act.
"Option" means an award of an option to purchase Shares
pursuant to Section 5.
"Outside Director" shall mean any director who is not (i) a
current employee of the Company or any Parent, Subsidiary or Affiliate of the
Company, (ii) a former
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employee of the Company or any Parent, Subsidiary or Affiliate of the Company
who is receiving compensation for prior services (other than benefits under a
tax-qualified pension plan), (iii) a current or former officer of the Company or
any Parent, Subsidiary or Affiliate of the Company or (iv) currently receiving
compensation for personal services in any capacity, other than as a director,
from the Company or any Parent, Subsidiary or Affiliate of the Company;
provided, however, that at such time as the term "Outside Director", as used in
Section 162(m) is defined in regulations promulgated under Section 162(m) of the
Code, "Outside Director" shall have the meaning set forth in such regulations,
as amended from time to time and as interpreted by the Internal Revenue Service.
"Parent" means any corporation (other than the Company) in
an unbroken chain of corporations ending with the Company, if at the time of the
granting of an Award under the Plan, each of such corporations other than the
Company owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.
"Participant" means a person who receives an Award under
the Plan.
"Plan" means this Macromedia, Inc. 1992 Equity Incentive
Plan, as amended from time to time.
"Restricted Stock Award" means an award of Shares pursuant
to Section 6.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as
amended.
"Shares" means shares of the Company's Common Stock, $0.001
par value, reserved for issuance under the Plan, as adjusted pursuant to
Sections 2 and 15, and any successor security.
"Stock Bonus" means an award of Shares, or cash in lieu of
Shares, pursuant to Section 7.
"Subsidiary" means any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company if, at the time
of granting of the Award, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
"Termination" or "Terminated" means, for purposes of the
Plan with respect to a Participant, that the Participant has ceased to provide
services as an employee, director, consultant, independent contractor or
adviser, to the Company or a Parent, Subsidiary or Affiliate of the Company,
except in the case of sick leave, military leave, or any other leave of absence
approved by the Committee, provided, that such leave is for a period of not more
than ninety (90) days, or reinstatement upon the expiration of such leave is
guaranteed by contract or statute. The Committee shall have sole discretion to
determine whether a
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Participant has ceased to provide services and the effective date on which the
Participant ceased to provide services (the "Termination Date").
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EXHIBIT 4.06
MACROMEDIA, INC.
1993 EMPLOYEE STOCK PURCHASE PLAN
As Adopted October 15, 1993
and Amended Through July 15, 1997
1. ESTABLISHMENT OF PLAN. Macromedia, Inc. (the "Company") proposes to
grant options for purchase of the Company's Common Stock to eligible employees
of the Company and its Subsidiaries (as hereinafter defined) pursuant to this
Employee Stock Purchase Plan (this "Plan"). For purposes of this Plan, "Parent
Corporation" and "Subsidiary" (collectively, "Subsidiaries") shall have the same
meanings as "parent corporation" and "subsidiary corporation" in Sections 424(e)
and 424(f), respectively, of the Internal Revenue Code of 1986, as amended (the
"Code"). The Company intends the Plan to qualify as an "employee stock purchase
plan" under Section 423 of the Code (including any amendments to or replacements
of such section), and the Plan shall be so construed. Any term not expressly
defined in the Plan but defined for purposes of Section 423 of the Code shall
have the same definition herein. A total of 800,000 shares of the Company's
Common Stock is reserved for issuance under the Plan. Such number shall be
subject to adjustments effected in accordance with Section 14 of the Plan.
2. PURPOSE. The purpose of the Plan is to provide employees of the
Company and Subsidiaries designated by the Board of Directors of the Company
(the "Board") as eligible to participate in the Plan with a convenient means of
acquiring an equity interest in the Company through payroll deductions, to
enhance such employees' sense of participation in the affairs of the Company and
Subsidiaries, and to provide an incentive for continued employment.
3. ADMINISTRATION. This Plan may be administered by the Board or a
committee appointed by the Board (the "Committee"). As used in this Plan,
references to the "Committee" shall mean either such committee or the Board if
no committee has been established. Subject to the provisions of the Plan and the
limitations of Section 423 of the Code or any successor provision in the Code,
all questions of interpretation or application of the Plan shall be determined
by the Board and its decisions shall be final and binding upon all participants.
Members of the Board shall receive no compensation for their services in
connection with the administration of the Plan, other than standard fees as
established from time to time by the Board for services rendered by Board
members serving on Board committees. All expenses incurred in connection with
the administration of the Plan shall be paid by the Company.
4. ELIGIBILITY. Any employee of the Company or the Subsidiaries is
eligible to participate in an Offering Period (as hereinafter defined) under the
Plan except the following:
(a) employees who are not employed by the Company or Subsidiaries on
the fifteenth (15th) day of the month before the beginning of such Offering
Period;
(b) employees who are customarily employed for less than 20 hours per
week;
(c) employees who are customarily employed for less than 5 months in
a calendar year;
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(d) employees who, together with any other person whose stock would
be attributed to such employee pursuant to Section 424(d) of the Code, own stock
or hold options to purchase stock or who, as a result of being granted an option
under the Plan with respect to such Offering Period, would own stock or hold
options to purchase stock possessing 5 percent or more of the total combined
voting power or value of all classes of stock of the Company or any of its
Subsidiaries.
5. OFFERING DATES. The Offering Periods of the Plan (the "Offering
Period") shall be of 6 months duration commencing February 16 and August 16 of
each year and ending on August 15 and February 15 respectively, during which
payroll deductions of the participant are accumulated under this Plan. The first
day of each Offering Period is referred to as the "Offering Date". The last
business day of each Offering Period is referred to as the "Purchase Date". The
Board shall have the power to change the duration of Offering Periods with
respect to future offerings without stockholder approval if such change is
announced at least fifteen (15) days prior to the scheduled beginning of the
first Offering Period to be affected.
6. PARTICIPATION IN THE PLAN. Eligible employees may become participants
in an Offering Period under the Plan on the first Offering Date after satisfying
the eligibility requirements by delivering a subscription agreement to the
Company's or Subsidiary's (whichever employs such employee) treasury department
(the "Treasury Department") not later than the 15th day of the month before such
Offering Date unless a later time for filing the subscription agreement
authorizing payroll deductions is set by the Board for all eligible employees
with respect to a given Offering Period. An eligible employee who does not
deliver a subscription agreement to the Treasury Department by such date after
becoming eligible to participate in such Offering Period shall not participate
in that Offering Period or any subsequent Offering Period unless such employee
enrolls in the Plan by filing a subscription agreement with the Treasury
Department not later than the 15th day of the month preceding a subsequent
Offering Date. Once an employee becomes a participant in an Offering Period,
such employee will automatically participate in the Offering Period commencing
immediately following the last day of the prior Offering Period unless the
employee withdraws from the Plan or terminates further participation in the
Offering Period as set forth in Section 11 below. Such participant is not
required to file any additional subscription agreement in order to continue
participation in the Plan.
7. GRANT OF OPTION ON ENROLLMENT. Enrollment by an eligible employee in
the Plan with respect to an Offering Period will constitute the grant (as of the
Offering Date) by the Company to such employee of an option to purchase on the
Purchase Date up to that number of shares of Common Stock of the Company
determined by dividing the amount accumulated in such employee's payroll
deduction account during such Offering Period by the lower of (i) eighty-five
percent (85%) of the fair market value of a share of the Company's Common Stock
on the Offering Date (the "Entry Price") or (ii) eighty-five percent (85%) of
the fair market value of a share of the Company's Common Stock on the Purchase
Date; provided, however, that the number of shares of the Company's Common Stock
subject to any option granted pursuant to this Plan shall not exceed the lesser
of (a) the maximum number of shares set by the Board pursuant to Section 10(c)
below with respect to the applicable Offering Period, or (b) 200% of the number
of shares determined by using 85% of the fair market value of a share of the
Company's Common Stock on the Offering Date as the denominator. Fair market
value of a share of the Company's Common Stock shall be determined as provided
in Section 8 hereof.
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8. PURCHASE PRICE. The purchase price per share at which a share of
Common Stock will be sold in any Offering Period shall be 85 percent of the
lesser of:
(a) The fair market value on the Offering Date; or
(b) The fair market value on the Purchase Date.
For purposes of the Plan, the term "fair market value" on a given
date shall mean the fair market value of the Company's Common Stock as
determined by the Committee from time to time in good faith. If a public market
exists for the shares, the fair market value shall be the average of the last
reported bid and asked prices for the Common Stock of the Company on the last
trading day prior to the date of determination, or, in the event the Common
Stock of the Company is listed on the NASDAQ National Market System, the fair
market value shall be the average of the high and low prices of the Common Stock
on the determination date as quoted on the NASDAQ National Market System and
reported in The Wall Street Journal.
9. PAYMENT OF PURCHASE PRICE; CHANGES IN PAYROLL DEDUCTIONS; ISSUANCE OF
SHARES.
(a) The purchase price of the shares is accumulated by regular
payroll deductions made during each Offering Period. The deductions are made as
a percentage of the participant's compensation in one percent increments not
less than 2 percent nor greater than 10 percent, not to exceed $25,000 per year
or such lower limit set by the Committee. Compensation shall mean all W-2
compensation, including, but not limited to base salary, wages, commissions,
overtime, shift premiums and bonuses, plus draws against commissions; provided,
however, that for purposes of determining a participant's compensation, any
election by such participant to reduce his or her regular cash remuneration
under Sections 125 or 401(k) of the Code shall be treated as if the participant
did not make such election. Payroll deductions shall commence on the first
payday following the Offering Date and shall continue to the end of the Offering
Period unless sooner altered or terminated as provided in the Plan.
(b) A participant may lower (but not increase) the rate of payroll
deductions during an Offering Period by filing with the Treasury Department a
new authorization for payroll deductions, in which case the new rate shall
become effective for the next payroll period commencing more than 15 days after
the Treasury Department's receipt of the authorization and shall continue for
the remainder of the Offering Period unless changed as described below. Such
change in the rate of payroll deductions may be made at any time during an
Offering Period, but not more than one change may be made effective during any
Offering Period. A participant may increase or decrease the rate of payroll
deductions for any subsequent Offering Period by filing with the Treasury
Department a new authorization for payroll deductions not later than the 15th
day of the month before the beginning of such Offering Period.
(c) All payroll deductions made for a participant are credited to his
or her account under the Plan and are deposited with the general funds of the
Company. No interest accrues on the payroll deductions. All payroll deductions
received or held by the Company may be used by the Company for any corporate
purpose, and the Company shall not be obligated to segregate such payroll
deductions.
(d) On each Purchase Date, so long as the Plan remains in effect and
provided that the participant has not submitted a signed and completed
withdrawal form before that date which notifies
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the Company that the participant wishes to withdraw from that Offering Period
under the Plan and have all payroll deductions accumulated in the account
maintained on behalf of the participant as of that date returned to the
participant, the Company shall apply the funds then in the participant's account
to the purchase of whole shares of Common Stock reserved under the option
granted to such participant with respect to the Offering Period to the extent
that such option is exercisable on the Purchase Date. The purchase price per
share shall be as specified in Section 8 of the Plan. Any cash remaining in a
participant's account after such purchase of shares shall be carried forward,
without interest, into the next Offering Period; provided, however, that any
cash remaining in such participant's account on a Purchase Date due to the
limitations of Sections 10(a) and 10(d) shall be returned to the participant as
soon as practicable after the end of the Offering Period, without interest. No
Common Stock shall be purchased on a Purchase Date on behalf of any employee
whose participation in the Plan has terminated prior to such Purchase Date.
(e) As promptly as practicable after the Purchase Date, the Company
shall arrange the delivery to each participant of a certificate representing the
shares purchased upon exercise of his option.
(f) During a participant's lifetime, such participant's option to
purchase shares hereunder is exercisable only by him or her. The participant
will have no interest or voting right in shares covered by his or her option
until such option has been exercised. Shares to be delivered to a participant
under the Plan will be registered in the name of the participant or in the name
of the participant and his or her spouse.
10. LIMITATIONS ON SHARES TO BE PURCHASED.
(a) No employee shall be entitled to purchase stock under the Plan at
a rate which, when aggregated with his or her rights to purchase stock under all
other employee stock purchase plans of the Company or any Subsidiary, exceeds
$25,000 in fair market value, determined as of the Offering Date (or such other
limit as may be imposed by the Code) for each calendar year in which the
employee participates in the Plan.
(b) No more than 200% of the number of shares determined by using 85%
of the fair market value of a share of the Company's Common Stock on the
Offering Date as the denominator may be purchased by a participant on any single
Purchase Date.
(c) No employee shall be entitled to purchase more than the Maximum
Share Amount (as defined below) on any single Purchase Date. Not less than
thirty days prior to the commencement of any Offering Period, the Board may, in
its sole discretion, set a maximum number of shares which may be purchased by
any employee at any single Purchase Date (hereinafter the "Maximum Share
Amount"). In no event shall the Maximum Share Amount exceed the amounts
permitted under Section 10(b) above. If a new Maximum Share Amount is set, then
all participants must be notified of such Maximum Share Amount not less than
fifteen days prior to the commencement of the next Offering Period. Once the
Maximum Share Amount is set, it shall continue to apply with respect to all
succeeding Purchase Dates and Offering Periods unless revised by the Board as
set forth above.
(d) If the number of shares to be purchased on a Purchase Date by all
employees participating in the Plan exceeds the number of shares then available
for issuance under the Plan, the Company will make a pro rata allocation of the
remaining shares in as uniform a manner as shall be
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practicable and as the Board shall determine to be equitable. In such event, the
Company shall give written notice of such reduction of the number of shares to
be purchased under a participant's option to each participant affected thereby.
11. WITHDRAWAL.
(a) Each participant may withdraw from an Offering Period under the
Plan by signing and delivering to the Treasury Department notice on a form
provided for such purpose. Such withdrawal may be elected at any time at least
15 days prior to the end of an Offering Period.
(b) Upon withdrawal from the Plan, the accumulated payroll deductions
shall be returned to the withdrawn participant, without interest, and his or her
interest in the Plan shall terminate. In the event a participant voluntarily
elects to withdraw from the Plan, he or she may not resume his or her
participation in the Plan during the same Offering Period, but he or she may
participate in any Offering Period under the Plan which commences on a date
subsequent to such withdrawal by filing a new authorization for payroll
deductions in the same manner as set forth above for initial participation in
the Plan.
12. TERMINATION OF EMPLOYMENT. Termination of a participant's employment
for any reason, including retirement, death or the failure of a participant to
remain an eligible employee, immediately terminates his or her participation in
the Plan. In such event, the payroll deductions credited to the participant's
account will be returned to him or her or, in the case of his or her death, to
his or her legal representative, without interest. For purposes of this Section
12, an employee will not be deemed to have terminated employment or failed to
remain in the continuous employ of the Company in the case of sick leave,
military leave, or any other leave of absence approved by the Board; provided
that such leave is for a period of not more than ninety (90) days or
reemployment upon the expiration of such leave is guaranteed by contract or
statute.
13. RETURN OF PAYROLL DEDUCTIONS. In the event a participant's interest
in the Plan is terminated by withdrawal, termination of employment or otherwise,
or in the event the Plan is terminated by the Board, the Company shall promptly
deliver to the participant all payroll deductions credited to his account. No
interest shall accrue on the payroll deductions of a participant in the Plan.
14. CAPITAL CHANGES. Subject to any required action by the stockholders
of the Company, the number of shares of Common Stock covered by each option
under the Plan which has not yet been exercised and the number of shares of
Common Stock which have been authorized for issuance under the Plan but have not
yet been placed under option (collectively, the "Reserves"), as well as the
price per share of Common Stock covered by each option under the Plan which has
not yet been exercised, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock
split or the payment of a stock dividend (but only on the Common Stock) or any
other increase or decrease in the number of shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall be
made by the Board, whose determination shall be final, binding and conclusive.
Except as expressly provided herein, no issue by the Company of shares of stock
of any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock subject to an option.
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In the event of the proposed dissolution or liquidation of the Company,
the Offering Period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board. The Board may, in the
exercise of its sole discretion in such instances, declare that the options
under the Plan shall terminate as of a date fixed by the Board and give each
participant the right to exercise his or her option as to all of the optioned
stock, including shares which would not otherwise be exercisable. In the event
of a proposed sale of all or substantially all of the assets of the Company, or
the merger of the Company with or into another corporation, each option under
the Plan shall be assumed or an equivalent option shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation,
unless the Board determines, in the exercise of its sole discretion and in lieu
of such assumption or substitution, that the participant shall have the right to
exercise the option as to all of the optioned stock. If the Board makes an
option exercisable in lieu of assumption or substitution in the event of a
merger or sale of assets, the Board shall notify the participant that the option
shall be fully exercisable for a period of twenty (20) days from the date of
such notice, and the option will terminate upon the expiration of such period.
The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the price
per share of Common Stock covered by each outstanding option, in the event that
the Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of shares of its outstanding Common
Stock, or in the event of the Company being consolidated with or merged into any
other corporation.
15. NONASSIGNABILITY. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 22 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect.
16. REPORTS. Individual accounts will be maintained for each participant
in the Plan. Each participant shall receive promptly after the end of each
Offering Period a report of his or her account setting forth the total payroll
deductions accumulated, the number of shares purchased, the per share price
thereof and the remaining cash balance, if any, carried forward to the next
Offering Period.
17. NOTICE OF DISPOSITION. Each participant shall notify the Company if
the participant disposes of any of the shares purchased in any Offering Period
pursuant to this Plan if such disposition occurs within two years from the
Offering Date or within one year from the Purchase Date on which such shares
were purchased (the "Notice Period"). Unless such participant is disposing of
any of such shares during the Notice Period, such participant shall keep the
certificates representing such shares in his or her name (and not in the name of
a nominee) during the Notice Period. The Company may, at any time during the
Notice Period, place a legend or legends on any certificate representing shares
acquired pursuant to the Plan requesting the Company's transfer agent to notify
the Company of any transfer of the shares. The obligation of the participant to
provide such notice shall continue notwithstanding the placement of any such
legend on the certificates.
18. NO RIGHTS TO CONTINUED EMPLOYMENT. Neither this Plan nor the grant
of any option hereunder shall confer any right on any employee to remain in the
employ of the Company or any Subsidiary, or restrict the right of the Company or
any Subsidiary to terminate such employee's employment.
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19. EQUAL RIGHTS AND PRIVILEGES. All eligible employees shall have equal
rights and privileges with respect to the Plan so that the Plan qualifies as an
"employee stock purchase plan" within the meaning of Section 423 or any
successor provision of the Code and the related regulations. Any provision of
the Plan which is inconsistent with Section 423 or any successor provision of
the Code shall, without further act or amendment by the Company or the Board, be
reformed to comply with the requirements of Section 423. This Section 19 shall
take precedence over all other provisions in the Plan.
20. NOTICES. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.
21. TERM; STOCKHOLDER APPROVAL. This Plan shall become effective on the
date that it is adopted by the Board of the Company. This Plan shall be approved
by the stockholders of the Company, in any manner permitted by applicable
corporate law, within twelve months before or after the date this Plan is
adopted by the Board. No purchase of shares pursuant to the Plan shall occur
prior to such stockholder approval. The Plan shall continue until the earlier to
occur of termination by the Board, issuance of all of the shares of Common Stock
reserved for issuance under the Plan, or one (1) year from the adoption of the
Plan by the Board (unless extended by the Board for a period of up to ten (10)
years from the adoption date.)
22. DESIGNATION OF BENEFICIARY.
(a) A participant may file a written designation of a beneficiary
who is to receive any shares and cash, if any, from the participant's account
under the Plan in the event of such participant's death subsequent to the end of
an Offering Period but prior to delivery to him of such shares and cash. In
addition, a participant may file a written designation of a beneficiary who is
to receive any cash from the participant's account under the Plan in the event
of such participant's death prior to a Purchase Date.
(b) Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such shares or cash to the executor or administrator of the estate of
the participant, or if no such executor or administrator has been appointed (to
the knowledge of the Company), the Company, in its discretion, may deliver such
shares or cash to the spouse or to any one or more dependents or relatives of
the participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.
23. CONDITIONS UPON ISSUANCE OF SHARES; LIMITATION ON SALE OF SHARES.
Shares shall not be issued with respect to an option unless the exercise of such
option and the issuance and delivery of such shares pursuant thereto shall
comply with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended, the Exchange Act,
the rules and regulations promulgated thereunder, and the requirements of any
stock exchange upon which the shares may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
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24. APPLICABLE LAW. The Plan shall be governed by the substantive laws
(excluding the conflict of laws rules) of the State of California.
25. AMENDMENT OR TERMINATION OF THE PLAN. The Board may at any time
amend, terminate or the extend the term of the Plan, except that any such
termination cannot affect options previously granted under the Plan, nor may any
amendment make any change in an option previously granted which would adversely
affect the right of any participant, nor may any amendment be made without
approval of the stockholders of the Company obtained in accordance with Section
21 hereof within 12 months of the adoption of such amendment (or earlier if
required by Section 21) if such amendment would:
(a) increase the number of shares that may be issued under the Plan;
or
(b) change the designation of the employees (or class of employees)
eligible for participation in the Plan.
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EXHIBIT 4.07
SOLIS DESIGN, INC.
1997 EQUITY INCENTIVE PLAN
AS ADOPTED SEPTEMBER 30, 1997
1. PURPOSE. The purpose of this Plan is to provide incentives to
attract, retain and motivate eligible persons whose present and potential
contributions are important to the success of the Company, its Parent and
Subsidiaries, by offering them an opportunity to participate in the Company's
future performance through awards of Options and Restricted Stock. Capitalized
terms not defined in the text are defined in Section 22. This Plan is intended
to be a written compensatory benefit plan within the meaning of Rule 701
promulgated under the Securities Act.
2. SHARES SUBJECT TO THE PLAN.
2.1 Number of Shares Available. Subject to Sections 2.2 and 17,
the total number of Shares reserved and available for grant and issuance
pursuant to this Plan will be 2,225 Shares or such lesser number of Shares as
permitted under Section 260.140.45 of Title 10 of the California Code of
Regulations. Subject to Sections 2.2 and 17, Shares will again be available for
grant and issuance in connection with future Awards under this Plan that: (a)
are subject to issuance upon exercise of an Option but cease to be subject to
such Option for any reason other than exercise of such Option or (b) are subject
to an Award that otherwise terminates without Shares being issued. At all times
the Company will reserve and keep available a sufficient number of Shares as
will be required to satisfy the requirements of all Awards granted under this
Plan.
2.2 Adjustment of Shares. In the event that the number of
outstanding shares of the Company's Common Stock is changed by a stock dividend,
recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification or similar change in the capital structure of the Company
without consideration, then (a) the number of Shares reserved for issuance under
this Plan, (b) the Exercise Prices of and number of Shares subject to
outstanding Options, and (c) the Purchase Prices of and number of Shares subject
to other outstanding Awards will be proportionately adjusted, subject to any
required action by the Board or the shareholders of the Company and compliance
with applicable securities laws; provided, however, that fractions of a Share
will not be issued but will either be paid in cash at Fair Market Value of such
fraction of a Share or will be rounded down to the nearest whole Share, as
determined by the Committee.
3. ELIGIBILITY. ISOs (as defined in Section 5 below) may be granted
only to employees (including officers and directors who are also employees) of
the Company or of a Parent or Subsidiary of the Company. All other Awards may be
granted to employees, officers, directors and consultants of the Company or any
Parent or Subsidiary of the Company; provided such consultants render bona fide
services not in connection with the offer and sale of securities in a
capital-raising transaction. A person may be granted more than one Award under
this Plan.
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4. ADMINISTRATION.
4.1 Committee Authority. This Plan will be administered by the
Committee or the Board acting as the Committee. Subject to the general purposes,
terms and conditions of this Plan, and to the direction of the Board, the
Committee will have full power to implement and carry out this Plan. Without
limitation, the Committee will have the authority to:
(a) construe and interpret this Plan, any Award Agreement and
any other agreement or document executed pursuant to this
Plan;
(b) prescribe, amend and rescind rules and regulations
relating to this Plan;
(c) select persons to receive Awards;
(d) determine the form and terms of Awards;
(e) determine the number of Shares or other consideration
subject to Awards;
(f) determine whether Awards will be granted singly, in
combination with, in tandem with, in replacement of, or as
alternatives to, other Awards under this Plan or awards
under any other incentive or compensation plan of the
Company or any Parent or Subsidiary of the Company;
(g) grant waivers of Plan or Award conditions;
(h) determine the vesting, exercisability and payment of
Awards;
(i) correct any defect, supply any omission, or reconcile any
inconsistency in this Plan, any Award, any Award
Agreement, any Exercise Agreement or any Restricted Stock
Purchase Agreement;
(j) determine whether an Award has been earned; and
(k) make all other determinations necessary or advisable for
the administration of this Plan.
4.2 Committee Discretion. Any determination made by the
Committee with respect to any Award will be made in its sole discretion at the
time of grant of the Award or, unless in contravention of any express term of
this Plan or Award, and subject to Section 5.9, at any later time, and such
determination will be final and binding on the Company and on all persons having
an interest in any Award under this Plan. The Committee may delegate to one or
more officers of the Company the authority to grant an Award under this Plan.
5. OPTIONS. The Committee may grant Options to eligible persons and
will determine whether such Options will be Incentive Stock Options within the
meaning of the Code ("ISOS") or Nonqualified Stock Options ("NQSOS"), the number
of Shares subject to the Option, the Exercise Price of the Option, the period
during which the Option may be exercised, and all other terms and conditions of
the Option, subject to the following:
5.1 Form of Option Grant. Each Option granted under this Plan
will be evidenced by an Award Agreement which will expressly identify the Option
as an ISO or an NQSO
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("STOCK OPTION AGREEMENT"), and will be in such form and contain such provisions
(which need not be the same for each Participant) as the Committee may from time
to time approve, and which will comply with and be subject to the terms and
conditions of this Plan.
5.2 Date of Grant. The date of grant of an Option will be the
date on which the Committee makes the determination to grant such Option, unless
otherwise specified by the Committee. The Stock Option Agreement and a copy of
this Plan will be delivered to the Participant within a reasonable time after
the granting of the Option.
5.3 Exercise Period. Options may be exercisable immediately
(subject to repurchase pursuant to Section 11 of this Plan) or may be
exercisable within the times or upon the events determined by the Committee as
set forth in the Stock Option Agreement governing such Option; provided,
however, that no Option will be exercisable after the expiration of ten (10)
years from the date the Option is granted; and provided further that no ISO
granted to a person who directly or by attribution owns more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or of any Parent or Subsidiary of the Company ("TEN PERCENT SHAREHOLDER") will
be exercisable after the expiration of five (5) years from the date the ISO is
granted. The Committee also may provide for Options to become exercisable at one
time or from time to time, periodically or otherwise, in such number of Shares
or percentage of Shares as the Committee determines. Subject to earlier
termination of the Option as provided herein, each Participant who is not an
officer, director or consultant of the Company or of a Parent or Subsidiary of
the Company shall have the right to exercise an Option granted hereunder at the
rate of at least twenty percent (20%) per year over five (5) years from the date
such Option is granted.
5.4 Exercise Price. The Exercise Price of an Option will be
determined by the Committee when the Option is granted and may not be less than
85% of the Fair Market Value of the Shares on the date of grant; provided that
(i) the Exercise Price of an ISO will not be less than 100% of the Fair Market
Value of the Shares on the date of grant and (ii) the Exercise Price of any
Option granted to a Ten Percent Shareholder will not be less than 110% of the
Fair Market Value of the Shares on the date of grant. Payment for the Shares
purchased must be made in accordance with Section 7 of this Plan.
5.5 Method of Exercise. Options may be exercised only by
delivery to the Company of a written stock option exercise agreement (the
"EXERCISE AGREEMENT") in a form approved by the Committee (which need not be the
same for each Participant), stating the number of Shares being purchased, the
restrictions imposed on the Shares purchased under such Exercise Agreement, if
any, and such representations and agreements regarding Participant's investment
intent and access to information and other matters, if any, as may be required
or desirable by the Company to comply with applicable securities laws, together
with payment in full of the Exercise Price, and any applicable taxes, for the
number of Shares being purchased.
5.6 Termination. Subject to earlier termination pursuant to
Sections 17 and 18 and notwithstanding the exercise periods set forth in the
Stock Option Agreement, exercise of an Option will always be subject to the
following:
(a) If the Participant is Terminated for any reason
except death, Disability or for Cause, then the
Participant may exercise such Participant's Options
only to the extent that such Options are
exercisable upon the Termination Date no later than
three (3) months after the Termination
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Date (or within such shorter time period, not less
than thirty (30) days, or within such longer time
period, not exceeding five (5) years, after the
Termination Date as may be determined by the
Committee, with any exercise beyond three (3)
months after the Termination Date deemed to be an
NQSO) but in any event, no later than the
expiration date of the Options.
(b) If the Participant is Terminated because of
Participant's death or Disability (or the
Participant dies within three (3) months after a
Termination other than because of Participant's
Disability or Cause), then Participant's Options
may be exercised only to the extent that such
Options are exercisable by Participant on the
Termination Date and must be exercised by
Participant (or Participant's legal representative
or authorized assignee) no later than twelve (12)
months after the Termination Date (or within such
shorter time period, not less than six (6) months,
or within such longer time period, not exceeding
five (5) years, after the Termination Date as may
be determined by the Committee, with any exercise
beyond (a) three (3) months after the Termination
Date when the Termination is for any reason other
than the Participant's death or disability, within
the meaning of Section 22(e)(3) of the Code, or (b)
twelve (12) months after the Termination Date when
the Termination is for Participant's disability,
within the meaning of Section 22(e)(3) of the Code,
deemed to be an NQSO) but in any event no later
than the expiration date of the Options.
5.7 Limitations on Exercise. The Committee may specify a
reasonable minimum number of Shares that may be purchased on any exercise of an
Option, provided that such minimum number will not prevent Participant from
exercising the Option for the full number of Shares for which it is then
exercisable.
5.8 Limitations on ISOs. The aggregate Fair Market Value
(determined as of the date of grant) of Shares with respect to which ISOs are
exercisable for the first time by a Participant during any calendar year (under
this Plan or under any other incentive stock option plan of the Company or any
Parent or Subsidiary of the Company) will not exceed $100,000. If the Fair
Market Value of Shares on the date of grant with respect to which ISOs are
exercisable for the first time by a Participant during any calendar year exceeds
$100,000, then the Options for the first $100,000 worth of Shares to become
exercisable in such calendar year will be ISOs and the Options for the amount in
excess of $100,000 that become exercisable in that calendar year will be NQSOs.
In the event that the Code or the regulations promulgated thereunder are amended
after the Effective Date (as defined in Section 18 below) to provide for a
different limit on the Fair Market Value of Shares permitted to be subject to
ISOs, then such different limit will be automatically incorporated herein and
will apply to any Options granted after the effective date of such amendment.
5.9 Modification, Extension or Renewal. The Committee may
modify, extend or renew outstanding Options and authorize the grant of new
Options in substitution therefor, provided that any such action may not, without
the written consent of a Participant, impair any of such Participant's rights
under any Option previously granted. Any outstanding ISO that is modified,
extended, renewed or otherwise altered will be treated in accordance with
Section 424(h) of the
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Code. The Committee may reduce the Exercise Price of outstanding Options without
the consent of Participants affected by a written notice to them; provided,
however, that the Exercise Price may not be reduced below the minimum Exercise
Price that would be permitted under Section 5.4 of this Plan for Options granted
on the date the action is taken to reduce the Exercise Price.
5.10 No Disqualification. Notwithstanding any other provision
in this Plan, no term of this Plan relating to ISOs will be interpreted, amended
or altered, nor will any discretion or authority granted under this Plan be
exercised, so as to disqualify this Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any ISO under
Section 422 of the Code.
6. RESTRICTED STOCK. A Restricted Stock Award is an offer by the
Company to sell to an eligible person Shares that are subject to restrictions.
The Committee will determine to whom an offer will be made, the number of Shares
the person may purchase, the Purchase Price, the restrictions to which the
Shares will be subject, and all other terms and conditions of the Restricted
Stock Award, subject to the following:
6.1 Form of Restricted Stock Award. All purchases under a
Restricted Stock Award made pursuant to this Plan will be evidenced by an Award
Agreement ("RESTRICTED STOCK PURCHASE AGREEMENT") that will be in such form
(which need not be the same for each Participant) as the Committee will from
time to time approve, and will comply with and be subject to the terms and
conditions of this Plan. The Restricted Stock Award will be accepted by the
Participant's execution and delivery of the Restricted Stock Purchase Agreement
and full payment for the Shares to the Company within thirty (30) days from the
date the Restricted Stock Purchase Agreement is delivered to the person. If such
person does not execute and deliver the Restricted Stock Purchase Agreement
along with full payment for the Shares to the Company within thirty (30) days,
then the offer will terminate, unless otherwise determined by the Committee.
6.2 Purchase Price. The Purchase Price of Shares sold pursuant
to a Restricted Stock Award will be determined by the Committee and will be at
least 85% of the Fair Market Value of the Shares on the date the Restricted
Stock Award is granted or at the time the purchase is consummated, except in the
case of a sale to a Ten Percent Shareholder, in which case the Purchase Price
will be 100% of the Fair Market Value on the date the Restricted Stock Award is
granted or at the time the purchase is consummated. Payment of the Purchase
Price must be made in accordance with Section 7 of this Plan.
6.3 Restrictions. Restricted Stock Awards shall be subject to
such restrictions as the Committee may impose. The Committee may provide for the
lapse of such restrictions in installments and may accelerate or waive such
restrictions, in whole or part, based on length of service, performance or such
other factors or criteria as the Committee may determine.
7. PAYMENT FOR SHARE PURCHASES.
7.1 Payment. Payment for Shares purchased pursuant to this
Plan may be made in cash (by check) or, where expressly approved for the
Participant by the Committee and where permitted by law:
(a) by cancellation of indebtedness of the Company to the
Participant;
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(b) by surrender of shares that either: (1) have been owned by
Participant for more than six (6) months and have been
paid for within the meaning of SEC Rule 144 (and, if such
shares were purchased from the Company by use of a
promissory note, such note has been fully paid with
respect to such shares); or (2) were obtained by
Participant in the public market;
(c) by tender of a full recourse promissory note having such
terms as may be approved by the Committee and bearing
interest at a rate sufficient to avoid imputation of
income under Sections 483 and 1274 of the Code; provided,
however, that Participants who are not employees or
directors of the Company will not be entitled to purchase
Shares with a promissory note unless the note is
adequately secured by collateral other than the Shares;
(d) by waiver of compensation due or accrued to the
Participant for services rendered;
(e) with respect only to purchases upon exercise of an Option,
and provided that a public market for the Company's stock
exists:
(1) through a "same day sale" commitment from the
Participant and a broker-dealer that is a member of
the National Association of Securities Dealers (an
"NASD DEALER") whereby the Participant irrevocably
elects to exercise the Option and to sell a portion
of the Shares so purchased to pay for the Exercise
Price, and whereby the NASD Dealer irrevocably
commits upon receipt of such Shares to forward the
Exercise Price directly to the Company; or
(2) through a "margin" commitment from the Participant
and an NASD Dealer whereby the Participant
irrevocably elects to exercise the Option and to
pledge the Shares so purchased to the NASD Dealer
in a margin account as security for a loan from the
NASD Dealer in the amount of the Exercise Price,
and whereby the NASD Dealer irrevocably commits
upon receipt of such Shares to forward the Exercise
Price directly to the Company; or
(f) by any combination of the foregoing.
7.2 Loan Guarantees. The Committee may help the Participant pay
for Shares purchased under this Plan by authorizing a guarantee by the Company
of a third-party loan to the Participant.
8. WITHHOLDING TAXES.
8.1 Withholding Generally. Whenever Shares are to be issued in
satisfaction of Awards granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. Whenever, under this Plan, payments
in satisfaction of Awards are to be made in cash, such payment will be net of an
amount sufficient to satisfy federal, state, and local withholding tax
requirements.
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8.2 Stock Withholding. When, under applicable tax laws, a
Participant incurs tax liability in connection with the exercise or vesting of
any Award that is subject to tax withholding and the Participant is obligated to
pay the Company the amount required to be withheld, the Committee may in its
sole discretion allow the Participant to satisfy the minimum withholding tax
obligation by electing to have the Company withhold from the Shares to be issued
that number of Shares having a Fair Market Value equal to the minimum amount
required to be withheld, determined on the date that the amount of tax to be
withheld is to be determined. All elections by a Participant to have Shares
withheld for this purpose will be made in accordance with the requirements
established by the Committee for such elections and be in writing in a form
acceptable to the Committee and shall be subject to the following restrictions:
(a) the election must be made on or prior to the applicable
Tax Date;
(b) once made the election shall be irrevocable as to the
particular Shares as to which the election is made; and
(c) all elections shall be subject to the consent or
disapproval of the Committee.
9. PRIVILEGES OF STOCK OWNERSHIP.
9.1 Voting and Dividends. No Participant will have any of the
rights of a shareholder with respect to any Shares until the Shares are issued
to the Participant. After Shares are issued to the Participant, the Participant
will be a shareholder and have all the rights of a shareholder with respect to
such Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that if such
Shares are Restricted Stock, then any new, additional or different securities
the Participant may become entitled to receive with respect to such Shares by
virtue of a stock dividend, stock split or any other change in the corporate or
capital structure of the Company will be subject to the same restrictions as the
Restricted Stock; provided, further, that the Participant will have no right to
retain such stock dividends or stock distributions with respect to Unvested
Shares that are repurchased pursuant to Section 11. The Company will comply with
Section 260.140.1 of Title 10 of the California Code of Regulations with respect
to the voting rights of Common Stock.
9.2 Financial Statements. The Company will provide financial
statements to each Participant prior to such Participant's purchase of Shares
under this Plan, and to each Participant annually during the period such
Participant has Awards outstanding, or as otherwise required or permitted under
Section 260.140.46 of Title 10 of the California Code of Regulations.
Notwithstanding the foregoing, the Company will not be required to provide such
financial statements to key employees whose services in connection with the
Company assure them access to equivalent information.
10. TRANSFERABILITY. Awards granted under this Plan, and any interest
therein, will not be transferable or assignable by Participant, and may not be
made subject to execution, attachment or similar process, otherwise than by will
or by the laws of descent and distribution. During the lifetime of the
Participant an Award will be exercisable only by the Participant or
Participant's legal representative and any elections with respect to an Award,
may be made only by the Participant or Participant's legal representative.
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<PAGE> 8
11. RESTRICTIONS ON SHARES.
11.1 Right of First Refusal. At the discretion of the
Committee, the Company may reserve to itself and/or its assignee(s) in the Award
Agreement a right of first refusal to purchase all Shares that a Participant (or
a subsequent transferee) may propose to transfer to a third party, unless
otherwise not permitted by Section 25102(o) of the California Corporations Code,
provided, that such right of first refusal terminates upon the Company's initial
public offering of Common Stock pursuant an effective registration statement
filed under the Securities Act.
11.2 Right of Repurchase. At the discretion of the Committee,
the Company may reserve to itself and/or its assignee(s) in the Award Agreement
a right to repurchase Shares held by a Participant for cash and/or cancellation
of purchase money indebtedness following such Participant's Termination at any
time within the later of ninety (90) days after the Participant's Termination
Date and the date the Participant purchases Shares under the Plan at: (A) with
respect to Vested Shares, the Fair Market Value of such Shares on Participant's
Termination Date, provided, that such right of repurchase terminates when the
Company's securities become publicly traded; or (B) with respect to Unvested
Shares, the Participant's Exercise Price or Purchase Price, as the case may be,
provided, that unless the Participant is an officer, director or consultant of
the Company or of a Parent or Subsidiary of the Company, such right of
repurchase at the Exercise Price or Purchase Price, as the case may be, lapses
at the rate of at least twenty percent (20%) per year over five (5) years from:
(i) the date of grant of the Option or (ii) in the case of Restricted Stock, the
date the Participant purchases the Shares.
12. CERTIFICATES. All certificates for Shares or other securities
delivered under this Plan will be subject to such stock transfer orders, legends
and other restrictions as the Committee may deem necessary or advisable,
including restrictions under any applicable federal, state or foreign securities
law, or any rules, regulations and other requirements of the SEC or any stock
exchange or automated quotation system upon which the Shares may be listed or
quoted.
13. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a
Participant's Shares, the Committee may require the Participant to deposit all
certificates representing Shares, together with stock powers or other
instruments of transfer approved by the Committee, appropriately endorsed in
blank, with the Company or an agent designated by the Company to hold in escrow
until such restrictions have lapsed or terminated, and the Committee may cause a
legend or legends referencing such restrictions to be placed on the
certificates. Any Participant who is permitted to execute a promissory note as
partial or full consideration for the purchase of Shares under this Plan will be
required to pledge and deposit with the Company all or part of the Shares so
purchased as collateral to secure the payment of Participant's obligation to the
Company under the promissory note; provided, however, that the Committee may
require or accept other or additional forms of collateral to secure the payment
of such obligation and, in any event, the Company will have full recourse
against the Participant under the promissory note notwithstanding any pledge of
the Participant's Shares or other collateral. In connection with any pledge of
the Shares, Participant will be required to execute and deliver a written pledge
agreement in such form as the Committee will from time to time approve. The
Shares purchased with the promissory note may be released from the pledge on a
pro rata basis as the promissory note is paid.
14. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or
from time to time, authorize the Company, with the consent of the respective
Participants, to issue new Awards in exchange for the surrender and cancellation
of any or all outstanding Awards. The
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Committee may at any time buy from a Participant an Award previously granted
with payment in cash, shares of Common Stock of the Company (including
restricted stock) or other consideration, based on such terms and conditions as
the Committee and the Participant may agree.
15. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. This Plan is
intended to comply with Section 25102(o) of the California Corporations Code.
Any provision of this Plan which is inconsistent with Section 25102(o) shall,
without further act or amendment by the Company or the Board, be reformed to
comply with the requirements of Section 25102(o). An Award will not be effective
unless such Award is in compliance with all applicable federal and state
securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system upon which the
Shares may then be listed or quoted, as they are in effect on the date of grant
of the Award and also on the date of exercise or other issuance. Notwithstanding
any other provision in this Plan, the Company will have no obligation to issue
or deliver certificates for Shares under this Plan prior to (a) obtaining any
approvals from governmental agencies that the Company determines are necessary
or advisable, and/or (b) compliance with any exemption, completion of any
registration or other qualification of such Shares under any state or federal
law or ruling of any governmental body that the Company determines to be
necessary or advisable. The Company will be under no obligation to register the
Shares with the SEC or to effect compliance with the exemption, registration,
qualification or listing requirements of any state securities laws, stock
exchange or automated quotation system, and the Company will have no liability
for any inability or failure to do so.
16. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Award
granted under this Plan will confer or be deemed to confer on any Participant
any right to continue in the employ of, or to continue any other relationship
with, the Company or any Parent or Subsidiary of the Company or limit in any way
the right of the Company or any Parent or Subsidiary of the Company to terminate
Participant's employment or other relationship at any time, with or without
Cause.
17. CORPORATE TRANSACTIONS.
17.1 Assumption or Replacement of Awards by Successor. In the
event of (a) a dissolution or liquidation of the Company, (b) a merger or
consolidation in which the Company is not the surviving corporation (other than
a merger or consolidation with a wholly-owned subsidiary, a reincorporation of
the Company in a different jurisdiction, or other transaction in which there is
no substantial change in the shareholders of the Company or their relative stock
holdings and the Awards granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption, conversion or
replacement will be binding on all Participants), (c) a merger in which the
Company is the surviving corporation but after which the shareholders of the
Company immediately prior to such merger (other than any shareholder which
merges with the Company in such merger, or which owns or controls another
corporation which merges, with the Company in such merger) cease to own their
shares or other equity interests in the Company, or (d) the sale of all or
substantially all of the assets of the Company, any or all outstanding Awards
may be assumed, converted or replaced by the successor corporation (if any),
which assumption, conversion or replacement will be binding on all Participants.
In the alternative, the successor corporation may substitute equivalent Awards
or provide substantially similar consideration to Participants as was provided
to shareholders (after taking into account the existing provisions of the
Awards). The successor corporation may also issue, in place of outstanding
Shares of the Company held by the Participant, substantially similar shares or
other property subject to repurchase restrictions and other
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provisions no less favorable to the Participant than those which applied to such
outstanding Shares immediately prior to such transaction described in this
Subsection 17.1. In the event such successor corporation (if any) refuses to
assume or substitute Awards, as provided above, pursuant to a transaction
described in this Subsection 17.1, then notwithstanding any other provision in
this Plan to the contrary, such Awards will expire on such transaction at such
time and on such conditions as the Board will determine.
17.2 Other Treatment of Awards. Subject to any greater rights
granted to Participants under the foregoing provisions of this Section 17, in
the event of the occurrence of any transaction described in Section 17.1, any
outstanding Awards will be treated as provided in the applicable agreement or
plan of merger, consolidation, dissolution, liquidation or sale of assets.
17.3 Assumption of Awards by the Company. The Company, from
time to time, also may substitute or assume outstanding awards granted by
another company, whether in connection with an acquisition of such other company
or otherwise, by either (a) granting an Award under this Plan in substitution of
such other company's award or (b) assuming such award as if it had been granted
under this Plan if the terms of such assumed award could be applied to an Award
granted under this Plan. Such substitution or assumption will be permissible if
the holder of the substituted or assumed award would have been eligible to be
granted an Award under this Plan if the other company had applied the rules of
this Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award will remain unchanged
(except that the exercise price and the number and nature of shares issuable
upon exercise of any such option will be adjusted appropriately pursuant to
Section 424(a) of the Code). In the event the Company elects to grant a new
Option rather than assuming an existing option, such new Option may be granted
with a similarly adjusted Exercise Price.
18. ADOPTION AND SHAREHOLDER APPROVAL. This Plan will become
effective on the date that it is adopted by the Board (the "EFFECTIVE DATE").
This Plan will be approved by the shareholders of the Company (excluding Shares
issued pursuant to this Plan), consistent with applicable laws, within twelve
(12) months before or after the Effective Date. Upon the Effective Date, the
Board may grant Awards pursuant to this Plan; provided, however, that: (a) no
Option may be exercised prior to initial shareholder approval of this Plan; (b)
no Option granted pursuant to an increase in the number of Shares approved by
the Board shall be exercised prior to the time such increase has been approved
by the shareholders of the Company; (c) in the event that initial shareholder
approval is not obtained within the time period provided herein, all Awards
granted hereunder shall be canceled, any Shares issued pursuant to any Award
shall be canceled and any purchase of Shares issued hereunder shall be
rescinded; and (d) Awards granted pursuant to an increase in the number of
Shares approved by the Board which increase is not timely approved by
shareholders shall be canceled, any Shares issued pursuant to any such Awards
shall be canceled, and any purchase of Shares subject to any such Award shall be
rescinded. In the event that initial shareholder approval is not obtained within
twelve (12) months before or after the date this Plan is adopted by the Board,
all Awards granted hereunder will be canceled, any Shares issued pursuant to any
Award will be canceled and any purchase of Shares hereunder will be rescinded.
19. TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as
provided herein, this Plan will terminate ten (10) years from the Effective Date
or, if earlier, the date of shareholder approval. This Plan and all agreements
hereunder shall be governed by and construed in accordance with the laws of the
State of California.
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20. AMENDMENT OR TERMINATION OF PLAN. Subject to Section 5.9, the
Board may at any time terminate or amend this Plan in any respect, including
without limitation amendment of any form of Award Agreement or instrument to be
executed pursuant to this Plan; provided, however, that the Board will not,
without the approval of the shareholders of the Company, amend this Plan in any
manner that requires such shareholder approval pursuant to Section 25102(o) of
the California Corporations Code or the Code or the regulations promulgated
thereunder as such provisions apply to ISO plans.
21. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by
the Board, the submission of this Plan to the shareholders of the Company for
approval, nor any provision of this Plan will be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and other equity awards otherwise than under this
Plan, and such arrangements may be either generally applicable or applicable
only in specific cases.
22. DEFINITIONS. As used in this Plan, the following terms will have
the following meanings:
"AWARD" means any award under this Plan, including any Option or
Restricted Stock Award.
"AWARD AGREEMENT" means, with respect to each Award, the signed
written agreement between the Company and the Participant setting forth the
terms and conditions of the Award.
"BOARD" means the Board of Directors of the Company.
"CAUSE" means Termination because of (i) any willful material
violation by the Participant of any law or regulation applicable to the business
of the Company or a Parent or Subsidiary of the Company, the Participant's
conviction for, or guilty plea to, a felony or a crime involving moral
turpitude, any willful perpetration by the Participant of a common law fraud,
(ii) the Participant's commission of an act of personal dishonesty which
involves personal profit in connection with the Company or any other entity
having a business relationship with the Company, (iii) any material breach by
the Participant of any provision of any agreement or understanding between the
Company or any Parent or Subsidiary of the Company and the Participant regarding
the terms of the Participant's service as an employee, director or consultant to
the Company or a Parent or Subsidiary of the Company, including without
limitation, the willful and continued failure or refusal of the Participant to
perform the material duties required of such Participant as an employee,
director or consultant of the Company or a Parent or Subsidiary of the Company,
other than as a result of having a Disability, or a breach of any applicable
invention assignment and confidentiality agreement or similar agreement between
the Company and the Participant, (iv) Participant's disregard of the policies of
the Company or any Parent or Subsidiary of the Company so as to cause loss,
damage or injury to the property, reputation or employees of the Company or a
Parent or Subsidiary of the Company, or (v) any other misconduct by the
Participant which is materially injurious to the financial condition or business
reputation of, or is otherwise materially injurious to, the Company or a Parent
or Subsidiary of the Company.
"CODE" means the Internal Revenue Code of 1986, as amended.
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"COMMITTEE" means the committee appointed by the Board to
administer this Plan, or if no committee is appointed, the Board.
"COMPANY" means Solis Design, Inc., or any successor corporation.
"DISABILITY" means a disability, whether temporary or permanent,
partial or total, as determined by the Committee.
"EXERCISE PRICE" means the price at which a holder of an Option
may purchase the Shares issuable upon exercise of the Option.
"FAIR MARKET VALUE" means, as of any date, the value of a share
of the Company's Common Stock determined as follows:
(a) if such Common Stock is then quoted on the Nasdaq National
Market, its closing price on the Nasdaq National Market on
the date of determination as reported in The Wall Street
Journal;
(b) if such Common Stock is publicly traded and is then listed
on a national securities exchange, its closing price on
the date of determination on the principal national
securities exchange on which the Common Stock is listed or
admitted to trading as reported in The Wall Street
Journal;
(c) if such Common Stock is publicly traded but is not quoted
on the Nasdaq National Market nor listed or admitted to
trading on a national securities exchange, the average of
the closing bid and asked prices on the date of
determination as reported by The Wall Street Journal (or,
if not so reported, as otherwise reported by any newspaper
or other source as the Board may determine); or
(d) if none of the foregoing is applicable, by the Committee
in good faith.
"OPTION" means an award of an option to purchase Shares pursuant
to Section 5.
"PARENT" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if each of such
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
"PARTICIPANT" means a person who receives an Award under this
Plan.
"PLAN" means this Solis Design, Inc. 1997 Equity Incentive Plan,
as amended from time to time.
"PURCHASE PRICE" the price at which a Participant may purchase
Restricted Stock.
"RESTRICTED STOCK" means Shares purchased pursuant to a
Restricted Stock Award.
"RESTRICTED STOCK AWARD" means an award of Shares pursuant to
Section 6.
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"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHARES" means shares of the Company's Common Stock, reserved for
issuance under this Plan, as adjusted pursuant to Sections 2 and 17, and any
successor security.
"SUBSIDIARY" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
"TERMINATION" or "TERMINATED" means, for purposes of this Plan
with respect to a Participant, that the Participant has for any reason ceased to
provide services as an employee, officer, director or consultant to the Company
or a Parent or Subsidiary of the Company. A Participant will not be deemed to
have ceased to provide services in the case of (i) sick leave, (ii) military
leave, or (iii) any other leave of absence approved by the Committee, provided
that such leave is for a period of not more than ninety (90) days unless
reinstatement (or, in the case of an employee with an ISO, reemployment) upon
the expiration of such leave is guaranteed by contract or statute, or unless
provided otherwise pursuant to formal policy adopted from time to time by the
Company and issued and promulgated in writing. In the case of any Participant on
(i) sick leave, (ii) military leave or (iii) an approved leave of absence, the
Committee may make such provisions respecting suspension of vesting of the Award
while on leave from the Company or a Parent or Subsidiary of the Company as it
may deem appropriate, except that in no event may an Option be exercised after
the expiration of the term set forth in the Stock Option Agreement. The
Committee will have sole discretion to determine whether a Participant has
ceased to provide services and the effective date on which the Participant
ceased to provide services (the "TERMINATION DATE").
"UNVESTED SHARES" means "Unvested Shares" as defined in the Award
Agreement.
"VESTED SHARES" means "Vested Shares" as defined in the Award
Agreement.
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NO. ___________
SOLIS DESIGN, INC.
1997 EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT
This Stock Option Agreement ("AGREEMENT") is made and entered
into as of the date of grant set forth below (the "DATE OF GRANT") by and
between Solis Design, Inc., a California corporation (the "COMPANY"), and the
participant named below ("PARTICIPANT"). Capitalized terms not defined herein
shall have the meaning ascribed to them in the Company's 1997 Equity Incentive
Plan (the "PLAN").
PARTICIPANT: ________________________________
SOCIAL SECURITY NUMBER: ________________________________
ADDRESS: ________________________________
________________________________
________________________________
TOTAL OPTION SHARES: ________________________________
EXERCISE PRICE PER SHARE: ________________________________
DATE OF GRANT: ________________________________
VESTING START DATE: ________________________________
EXPIRATION DATE: ________________________________
TYPE OF STOCK OPTION
(CHECK ONE): [ ] INCENTIVE STOCK OPTION
[X] NONQUALIFIED STOCK OPTION
1. GRANT OF OPTION. The Company hereby grants to Participant
an option (this "OPTION") to purchase the total number of shares of Common Stock
of the Company set forth above as Total Option Shares (the "SHARES") at the
Exercise Price Per Share set forth above (the "EXERCISE PRICE"), subject to all
of the terms and conditions of this Agreement and the Plan. If designated as an
Incentive Stock Option above, the Option is intended to qualify as an "incentive
stock option" ("ISO") within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the "CODE").
2. EXERCISE PERIOD.
2.1 Exercise Period of Option. Provided Participant
continues to provide services to the Company or any Subsidiary, Parent, or
Affiliate of the Company throughout the specified period, the Option shall
become exercisable as to twenty-five percent (25%) of the Total Option Shares on
the date twelve months after the Vesting Start Date specified above and shall be
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<PAGE> 15
exercisable as to an additional 2.0833% of the Total Option Shares at the end of
each full succeeding month thereafter until this Option is exercisable with
respect to 100% of the Shares.
2.2 Expiration. The Option shall expire on the
Expiration Date set forth above and must be exercised, if at all, on or before
the Expiration Date.
3. TERMINATION.
3.1 Termination for Any Reason Except Death or
Disability. If Participant is Terminated for any reason, except death or
Disability, the Option, to the extent (and only to the extent) that it would
have been exercisable by Participant on the Termination Date, may be exercised
by Participant no later than ninety (90) days after the Termination Date, but in
any event no later than the Expiration Date.
3.2 Termination Because of Death or Disability. If
Participant is Terminated because of death or Disability of Participant, the
Option, to the extent that it is exercisable by Participant on the Termination
Date, may be exercised by Participant (or Participant's legal representative) no
later than twelve (12) months after the Termination Date, but in any event no
later than the Expiration Date.
3.3 No Obligation to Employ. Nothing in the Plan or
this Agreement shall confer on Participant any right to continue in the employ
of, or other relationship with, the Company or any Parent or Subsidiary of the
Company, or limit in any way the right of the Company or any Parent or
Subsidiary of the Company to terminate Participant's employment or other
relationship at any time, with or without Cause.
4. MANNER OF EXERCISE.
4.1 Stock Option Exercise Agreement. To exercise this
Option, Participant (or in the case of exercise after Participant's death or
incapacity, Participant's executor, administrator, heir or legatee, as the case
may be) must deliver to the Company an executed stock option exercise agreement
in the form attached hereto as Exhibit A, or in such other form as may be
approved by the Company from time to time (the "EXERCISE AGREEMENT"), which
shall set forth, inter alia, Participant's election to exercise the Option, the
number of Shares being purchased, any restrictions imposed on the Shares and any
representations, warranties and agreements regarding Participant's investment
intent and access to information as may be required by the Company to comply
with applicable securities laws. If someone other than Participant exercises the
Option, then such person must submit documentation reasonably acceptable to the
Company that such person has the right to exercise the Option.
4.2 Limitations on Exercise. The Option may not be
exercised unless such exercise is in compliance with all applicable federal and
state securities laws, as they are in effect on the date of exercise. The Option
may not be exercised as to fewer than one hundred (100) Shares unless it is
exercised as to all Shares as to which the Option is then exercisable.
2
<PAGE> 16
4.3 Payment. The Exercise Agreement shall be
accompanied by full payment of the Exercise Price for the shares being purchased
in cash (by check), or where permitted by law:
(a) by cancellation of indebtedness of the Company to the
Participant;
(b) by surrender of shares of the Company's Common Stock that
(1) either (A) have been owned by Participant for more
than six (6) months and have been paid for within the
meaning of SEC Rule 144 (and, if such shares were
purchased from the Company by use of a promissory note,
such note has been fully paid with respect to such
shares); or (B) were obtained by Participant in the open
public market; and (2) are clear of all liens, claims,
encumbrances or security interests;
(c) by waiver of compensation due or accrued to Participant
for services rendered;
(d) provided that a public market for the Company's stock
exists, (1) through a "same day sale" commitment from
Participant and a broker-dealer that is a member of the
National Association of Securities Dealers (an "NASD
DEALER") whereby Participant irrevocably elects to
exercise the Option and to sell a portion of the Shares so
purchased to pay for the Exercise Price and whereby the
NASD Dealer irrevocably commits upon receipt of such
Shares to forward the Exercise Price directly to the
Company, or (2) through a "margin" commitment from
Participant and an NASD Dealer whereby Participant
irrevocably elects to exercise the Option and to pledge
the Shares so purchased to the NASD Dealer in a margin
account as security for a loan from the NASD Dealer in the
amount of the Exercise Price, and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward
the Exercise Price directly to the Company; or
(e) by any combination of the foregoing.
4.4 Tax Withholding. Prior to the issuance of the
Shares upon exercise of the Option, Participant must pay or provide for any
applicable federal, state and local withholding obligations of the Company. If
the Committee permits, Participant may provide for payment of withholding taxes
upon exercise of the Option by requesting that the Company retain Shares with a
Fair Market Value equal to the minimum amount of taxes required to be withheld.
In such case, the Company shall issue the net number of Shares to the
Participant by deducting the Shares retained from the Shares issuable upon
exercise.
4.5 Issuance of Shares. Provided that the Exercise
Agreement and payment are in form and substance satisfactory to counsel for the
Company, the Company shall issue the Shares registered in the name of
Participant, Participant's authorized assignee, or Participant's legal
representative, and shall deliver certificates representing the Shares with the
appropriate legends affixed thereto.
3
<PAGE> 17
5. NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES. If the
Option is an ISO, and if Participant sells or otherwise disposes of any of the
Shares acquired pursuant to the ISO on or before the later of (a) the date two
(2) years after the Date of Grant, and (b) the date one (1) year after transfer
of such Shares to Participant upon exercise of the Option, Participant shall
immediately notify the Company in writing of such disposition. Participant
agrees that Participant may be subject to income tax withholding by the Company
on the compensation income recognized by Participant from the early disposition
by payment in cash or out of the current wages or other compensation payable to
Participant.
6. COMPLIANCE WITH LAWS AND REGULATIONS. The Plan and this
Agreement are intended to comply with Section 25102(o) of the California
Corporations Code. Any provision of this Agreement which is inconsistent with
Section 25102(o) shall, without further act or amendment by the Company or the
Board, be reformed to comply with the requirements of Section 25102(o). The
exercise of the Option and the issuance and transfer of Shares shall be subject
to compliance by the Company and Participant with all applicable requirements of
federal and state securities laws and with all applicable requirements of any
stock exchange on which the Company's Common Stock may be listed at the time of
such issuance or transfer. Participant understands that the Company is under no
obligation to register or qualify the Shares with the SEC, any state securities
commission or any stock exchange to effect such compliance.
7. NONTRANSFERABILITY OF OPTION. The Option may not be
transferred in any manner other than by will or by the laws of descent and
distribution and may be exercised during the lifetime of Participant only by
Participant or in the event of Participant's incapacity, by Participant's legal
representative. The terms of the Option shall be binding upon the executors,
administrators, successors and assigns of Participant.
8. TAX CONSEQUENCES. Set forth below is a brief summary as
of the Effective Date of the Plan of some of the federal and California tax
consequences of exercise of the Option and disposition of the Shares. THIS
SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE. PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION
OR DISPOSING OF THE SHARES.
8.1 Exercise of ISO. If the Option qualifies as an ISO,
there will be no regular federal or California income tax liability upon the
exercise of the Option, although the excess, if any, of the Fair Market Value of
the Shares on the date of exercise over the Exercise Price will be treated as a
tax preference item for federal alternative minimum tax purposes and may subject
the Participant to the alternative minimum tax in the year of exercise.
8.2 Exercise of Nonqualified Stock Option. If the
Option does not qualify as an ISO, there may be a regular federal and California
income tax liability upon the exercise of the Option. Participant will be
treated as having received compensation income (taxable at ordinary income tax
rates) equal to the excess, if any, of the Fair Market Value of the Shares on
the date of exercise over the Exercise Price. If Participant is a current or
former employee of the Company, the Company may be required to withhold from
Participant's compensation or collect from Participant and pay to the applicable
taxing authorities an amount equal to a percentage of this compensation income
at the time of exercise.
4
<PAGE> 18
8.3 Disposition of Shares. If the Shares are held for
more than one (1) year after the date of the transfer of the Shares pursuant to
the exercise of the Option for Vested Shares and, in the case of an ISO, are
disposed of more than two (2) years after the Date of Grant, any gain realized
on disposition of the Shares will be treated as long term capital gain for
federal and California income tax purposes. If Shares purchased under an ISO are
disposed of within the applicable one (1) year or two (2) year period, any gain
realized on such disposition will be treated as compensation income (taxable at
ordinary income rates) to the extent of the excess, if any, of the Fair Market
Value of the Shares on the date of exercise over the Exercise Price. The Company
will be required to withhold from Participant's compensation or collect from
Participant and pay to the applicable taxing authorities an amount equal to a
percentage of this compensation income at the time of exercise.
9. PRIVILEGES OF STOCK OWNERSHIP. Participant shall not have
any of the rights of a shareholder with respect to any Shares until Participant
exercises the Option and pays the Exercise Price.
10. INTERPRETATION. Any dispute regarding the interpretation of
this Agreement shall be submitted by Participant or the Company to the Committee
for review. The resolution of such a dispute by the Committee shall be final and
binding on the Company and Participant.
11. ENTIRE AGREEMENT. The Plan is incorporated herein by
reference. This Agreement and the Plan constitute the entire agreement of the
parties and supersede all prior undertakings and agreements with respect to the
subject matter hereof.
12. NOTICES. Any notice required to be given or delivered to
the Company under the terms of this Agreement shall be in writing and addressed
to the Corporate Secretary of the Company at its principal corporate offices.
Any notice required to be given or delivered to Participant shall be in writing
and addressed to Participant at the address indicated above or to such other
address as such party may designate in writing from time to time to the Company.
All notices shall be deemed to have been given or delivered upon: personal
delivery; three (3) days after deposit in the United States mail by certified or
registered mail (return receipt requested); one (1) business day after deposit
with any return receipt express courier (prepaid); or one (1) business day after
transmission by facsimile, rapifax or telecopier.
13. SUCCESSORS AND ASSIGNS. The Company may assign any of its
rights under this Agreement. This Agreement shall be binding upon and inure to
the benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer set forth herein, this Agreement shall be binding upon
Participant and Participant's heirs, executors, administrators, legal
representatives, successors and assigns.
14. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California as such laws
are applied to agreements between California residents entered into and to be
performed entirely within California. If any provision of this Agreement is
determined by a court of law to be illegal or unenforceable, then such provision
will be enforced to the maximum extent possible and the other provisions will
remain fully effective and enforceable.
5
<PAGE> 19
15. ACCEPTANCE. Participant hereby acknowledges receipt of a
copy of the Plan and this Agreement. Participant has read and understands the
terms and provisions thereof, and accepts the Option subject to all the terms
and conditions of the Plan and this Agreement. Participant acknowledges that
there may be adverse tax consequences upon exercise of the Option or disposition
of the Shares and that Participant should consult a tax adviser prior to such
exercise or disposition.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in triplicate by its duly authorized representative and Participant has
executed this Agreement in triplicate as of the Date of Grant.
SOLIS DESIGN, INC. PARTICIPANT
By:__________________________________ __________________________________
(Signature)
_____________________________________ __________________________________
(Please print name) (Please print name)
_____________________________________
(Please print title)
6
<PAGE> 20
EXHIBIT A
NO. ____________
SOLIS DESIGN, INC.
1997 EQUITY INCENTIVE PLAN
STOCK OPTION EXERCISE AGREEMENT
This Exercise Agreement is made and entered into as of
______________, 19___ (the "EFFECTIVE DATE") by and between Solis Design, Inc.,
a California corporation (the "COMPANY"), and the purchaser named below (the
"PURCHASER"). Capitalized terms not defined herein shall have the meaning
ascribed to them in the Company's 1997 Equity Incentive Plan (the "Plan").
PURCHASER: ________________________________
SOCIAL SECURITY NUMBER: ________________________________
ADDRESS: ________________________________
________________________________
TOTAL NUMBER OF SHARES: ________________________________
EXERCISE PRICE PER SHARE: ________________________________
TOTAL EXERCISE PRICE: ________________________________
OPTION NO. ___ DATE OF GRANT: ________________________________
TYPE OF OPTION: [ ] INCENTIVE STOCK OPTION
[X] NONQUALIFIED STOCK OPTION
1. EXERCISE OF OPTION.
1.1 Exercise. Pursuant to exercise of that certain
option ("OPTION") granted to Purchaser under the Plan and subject to the terms
and conditions of this Exercise Agreement, Purchaser hereby purchases from the
Company, and the Company hereby sells to Purchaser, the Total Number of Shares
set forth above ("SHARES") of the Company's Common Stock at the Exercise Price
Per Share set forth above ("EXERCISE PRICE"). As used in this Exercise
Agreement, the term "SHARES" refers to the Shares purchased under this Exercise
Agreement and includes all securities received (a) in replacement of the Shares,
(b) as a result of stock dividends or stock splits with respect to the Shares,
and (c) all securities received in replacement of the Shares in a merger,
recapitalization, reorganization or similar corporate transaction.
1
<PAGE> 21
1.2 Title to Shares. The exact spelling of the name(s)
under which Purchaser will take title to the Shares is:
_________________________________________________________
_________________________________________________________
1.3 Payment. Purchaser hereby delivers payment of the
Exercise Price to the extent permitted in the Stock Option Agreement as follows
(check and complete as appropriate):
[ ] in cash (by check) in the amount of $____________, receipt
of which is acknowledged by the Company;
[ ] where approved by the Committee at the time of grant, by
delivery of _________ fully-paid, nonassessable and vested
shares of the Common Stock of the Company owned by
Purchaser for at least six (6) months prior to the date
hereof which have been paid for within the meaning of SEC
Rule 144, or obtained by Purchaser in the open public
market, and owned free and clear of all liens, claims,
encumbrances or security interests, valued at the current
Fair Market Value of $___________ per share;
[ ] by cancellation of indebtedness of the Company to Purchaser
in the amount of $__________;
[ ] by the waiver hereby of compensation due or accrued for
services rendered in the amount of $_________;
[ ] through a "same-day-sale" commitment, delivered herewith,
from Participant and the NASD Dealer named therein, in the
amount of $__________; or
[ ] through a "margin" commitment, delivered herewith from
Participant and the NASD Dealer named therein, in the
amount of $___________.
2. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser
represents and warrants to the Company that:
2.1 Agrees to Terms of the Plan. Purchaser has received
a copy of the Plan and the Stock Option Agreement, has read and understands the
terms of the Plan, the Stock Option Agreement and this Exercise Agreement, and
agrees to be bound by their terms and conditions. Purchaser acknowledges that
there may be adverse tax consequences upon exercise of the Option or disposition
of the Shares, and that Purchaser should consult a tax adviser prior to such
exercise or disposition.
2.2 Purchase for Own Account for Investment. Purchaser
is purchasing the Shares for Purchaser's own account for investment purposes
only and not with a view to, or for sale in connection with, a distribution of
the Shares within the meaning of the Securities Act. Purchaser has no present
intention of selling or otherwise disposing of all or any portion of the Shares
and no one other than Purchaser has any beneficial ownership of any of the
Shares.
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<PAGE> 22
2.3 Access to Information. Purchaser has had access to
all information regarding the Company and its present and prospective business,
assets, liabilities and financial condition that Purchaser reasonably considers
important in making the decision to purchase the Shares, and Purchaser has had
ample opportunity to ask questions of the Company's representatives concerning
such matters and this investment.
2.4 Understanding of Risks. Purchaser is fully aware
of: (i) the highly speculative nature of the investment in the Shares; (ii) the
financial hazards involved; (iii) the lack of liquidity of the Shares and the
restrictions on transferability of the Shares (e.g., that Purchaser may not be
able to sell or dispose of the Shares or use them as collateral for loans); (iv)
the qualifications and backgrounds of the management of the Company; and (v) the
tax consequences of investment in the Shares. Purchaser is capable of evaluating
the merits and risks of this investment, has the ability to protect Purchaser's
own interests in this transaction and is financially capable of bearing a total
loss of this investment.
2.5 No General Solicitation. At no time was Purchaser
presented with or solicited by any publicly issued or circulated newspaper,
mail, radio, television or other form of general advertising or solicitation in
connection with the offer, sale and purchase of the Shares.
3. TAX CONSEQUENCES. PURCHASER UNDERSTANDS THAT PURCHASER MAY
SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF PURCHASER'S PURCHASE OR
DISPOSITION OF THE SHARES. PURCHASER REPRESENTS THAT PURCHASER HAS CONSULTED
WITH ANY TAX ADVISER PURCHASER DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE
OR DISPOSITION OF THE SHARES AND THAT PURCHASER IS NOT RELYING ON THE COMPANY
FOR ANY TAX ADVICE.
4. ENTIRE AGREEMENT. The Plan and the Stock Option Agreement
are incorporated herein by reference. This Exercise Agreement, the Plan, and the
Stock Option Agreement (a) constitute the entire agreement and understanding of
the parties with respect to the subject matter of this Exercise Agreement, and
supersede all prior understandings and agreements, whether oral or written,
between the parties hereto with respect to the specific subject matter hereof,
and (b) are governed by California law except for that body of law pertaining to
conflict of laws.
IN WITNESS WHEREOF, the Company has caused this Exercise Agreement
to be executed in duplicate by its duly authorized representative and Purchaser
has executed this Exercise Agreement in triplicate as of the Effective Date.
SOLIS DESIGN, INC. PURCHASER
By:__________________________________ __________________________________
(Signature)
_____________________________________ __________________________________
(Please print name) (Please print name)
_____________________________________
(Please print title)
3
<PAGE> 1
EXHIBIT 4.08
NO. _________
SOLIS DESIGN, INC.
NON-PLAN STOCK OPTION AGREEMENT
This Stock Option Agreement ("AGREEMENT") is made and entered
into as of the date of grant set forth below (the "DATE OF GRANT") by and
between Solis Design, Inc., a California corporation (the "COMPANY"), and the
participant named below ("PARTICIPANT").
PARTICIPANT: __________________________________
SOCIAL SECURITY NUMBER: __________________________________
ADDRESS: __________________________________
__________________________________
__________________________________
TOTAL OPTION SHARES: __________________________________
EXERCISE PRICE PER SHARE: __________________________________
DATE OF GRANT: __________________________________
VESTING START DATE: __________________________________
EXPIRATION DATE: __________________________________
1. GRANT OF OPTION. The Company hereby grants to Participant
an option (this "OPTION") to purchase the total number of shares of Common Stock
of the Company set forth above as Total Option Shares (the "SHARES") at the
Exercise Price Per Share set forth above (the "EXERCISE PRICE"), subject to all
of the terms and conditions of this Agreement. This Option is not intended to
qualify as an "incentive stock option" ("ISO") within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the "CODE").
2. EXERCISE PERIOD.
2.1 Exercise Period of Option. Provided Participant
continues to provide services to the Company or any Subsidiary, Parent, or
Affiliate of the Company throughout the specified period, the Option shall
become exercisable as to twenty-five percent (25%) of the Total Option Shares on
the date twelve months after the Vesting Start Date specified above and shall be
exercisable as to an additional 2.0833% of the Total Option Shares at the end of
each full succeeding month thereafter until this Option is exercisable with
respect to 100% of the Shares.
2.2 Expiration. The Option shall expire on the
Expiration Date set forth above and must be exercised, if at all, on or before
the Expiration Date.
1
<PAGE> 2
3. TERMINATION.
3.1 Termination for Any Reason Except Death or
Disability. If Participant is Terminated for any reason, except death or
Disability, the Option, to the extent (and only to the extent) that it would
have been exercisable by Participant on the Termination Date, may be exercised
by Participant no later than ninety (90) days after the Termination Date, but in
any event no later than the Expiration Date.
3.2 Termination Because of Death or Disability. If
Participant is Terminated because of death or Disability of Participant, the
Option, to the extent that it is exercisable by Participant on the Termination
Date, may be exercised by Participant (or Participant's legal representative) no
later than twelve (12) months after the Termination Date, but in any event no
later than the Expiration Date.
3.3 No Obligation to Employ. Nothing in this Agreement
shall confer on Participant any right to continue in the employ of, or other
relationship with, the Company or any Parent or Subsidiary of the Company, or
limit in any way the right of the Company or any Parent or Subsidiary of the
Company to terminate Participant's employment or other relationship at any time,
with or without Cause.
4. MANNER OF EXERCISE.
4.1 Stock Option Exercise Agreement. To exercise this
Option, Participant (or in the case of exercise after Participant's death or
incapacity, Participant's executor, administrator, heir or legatee, as the case
may be) must deliver to the Company an executed stock option exercise agreement
in the form attached hereto as Exhibit A, or in such other form as may be
approved by the Company from time to time (the "EXERCISE AGREEMENT"), which
shall set forth, inter alia, Participant's election to exercise the Option, the
number of Shares being purchased, any restrictions imposed on the Shares and any
representations, warranties and agreements regarding Participant's investment
intent and access to information as may be required by the Company to comply
with applicable securities laws. If someone other than Participant exercises the
Option, then such person must submit documentation reasonably acceptable to the
Company that such person has the right to exercise the Option.
4.2 Limitations on Exercise. The Option may not be
exercised unless such exercise is in compliance with all applicable federal and
state securities laws, as they are in effect on the date of exercise. The Option
may not be exercised as to fewer than one hundred (100) Shares unless it is
exercised as to all Shares as to which the Option is then exercisable.
4.3 Payment. The Exercise Agreement shall be
accompanied by full payment of the Exercise Price for the shares being purchased
in cash (by check), or where permitted by law:
(a) by cancellation of indebtedness of the Company to the
Participant;
(b) by surrender of shares of the Company's Common Stock that
(1) either (A) have been owned by Participant for more than
six (6) months and have been paid for within the meaning of
SEC Rule 144 (and, if such shares were
2
<PAGE> 3
purchased from the Company by use of a promissory note,
such note has been fully paid with respect to such shares);
or (B) were obtained by Participant in the open public
market; and (2) are clear of all liens, claims,
encumbrances or security interests;
(c) by waiver of compensation due or accrued to Participant for
services rendered;
(d) provided that a public market for the Company's stock
exists, (1) through a "same day sale" commitment from
Participant and a broker-dealer that is a member of the
National Association of Securities Dealers (an "NASD
DEALER") whereby Participant irrevocably elects to exercise
the Option and to sell a portion of the Shares so purchased
to pay for the Exercise Price and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward
the Exercise Price directly to the Company, or (2) through
a "margin" commitment from Participant and an -- NASD
Dealer whereby Participant irrevocably elects to exercise
the Option and to pledge the Shares so purchased to the
NASD Dealer in a margin account as security for a loan from
the NASD Dealer in the amount of the Exercise Price, and
whereby the NASD Dealer irrevocably commits upon receipt of
such Shares to forward the Exercise Price directly to the
Company; or
(e) by any combination of the foregoing.
4.4 Tax Withholding. Prior to the issuance of the
Shares upon exercise of the Option, Participant must pay or provide for any
applicable federal, state and local withholding obligations of the Company. If
the Committee permits, Participant may provide for payment of withholding taxes
upon exercise of the Option by requesting that the Company retain Shares with a
Fair Market Value equal to the minimum amount of taxes required to be withheld.
In such case, the Company shall issue the net number of Shares to the
Participant by deducting the Shares retained from the Shares issuable upon
exercise.
4.5 Issuance of Shares. Provided that the Exercise
Agreement and payment are in form and substance satisfactory to counsel for the
Company, the Company shall issue the Shares registered in the name of
Participant, Participant's authorized assignee, or Participant's legal
representative, and shall deliver certificates representing the Shares with the
appropriate legends affixed thereto.
5. COMPLIANCE WITH LAWS AND REGULATIONS. The Agreement is
intended to comply with Section 25102(f) of the California Corporations Code.
Any provision of this Agreement which is inconsistent with Section 25102(f)
shall, without further act or amendment by the Company or the Board, be reformed
to comply with the requirements of Section 25102(f). The exercise of the Option
and the issuance and transfer of Shares shall be subject to compliance by the
Company and Participant with all applicable requirements of federal and state
securities laws and with all applicable requirements of any stock exchange on
which the Company's Common Stock may be listed at the time of such issuance or
transfer. Participant understands that the Company is under no obligation to
register or qualify the Shares with the SEC, any state securities commission or
any stock exchange to effect such compliance.
3
<PAGE> 4
6. NONTRANSFERABILITY OF OPTION. The Option may not be
transferred in any manner other than by will or by the laws of descent and
distribution and may be exercised during the lifetime of Participant only by
Participant or in the event of Participant's incapacity, by Participant's legal
representative. The terms of the Option shall be binding upon the executors,
administrators, successors and assigns of Participant.
7. TAX CONSEQUENCES. Set forth below is a brief summary as of
the date of this Agreement of some of the federal and California tax
consequences of exercise of the Option and disposition of the Shares. THIS
SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE. PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION
OR DISPOSING OF THE SHARES.
7.1 Exercise of Nonqualified Stock Option. There are
regular federal and California income tax liability upon the exercise of the
Option. Participant will be treated as having received compensation income
(taxable at ordinary income tax rates) equal to the excess, if any, of the Fair
Market Value of the Shares on the date of exercise over the Exercise Price. If
Participant is a current or former employee of the Company, the Company may be
required to withhold from Participant's compensation or collect from Participant
and pay to the applicable taxing authorities an amount equal to a percentage of
this compensation income at the time of exercise.
7.2 Disposition of Shares. If the Shares are held for
more than one (1) year after the date of the transfer of the Shares pursuant to
the exercise of the Option for Vested Shares and any gain realized on
disposition of the Shares will be treated as long term capital gain for federal
and California income tax purposes. The Company will be required to withhold
from Participant's compensation or collect from Participant and pay to the
applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.
8. PRIVILEGES OF STOCK OWNERSHIP. Participant shall not have
any of the rights of a shareholder with respect to any Shares until Participant
exercises the Option and pays the Exercise Price.
9. INTERPRETATION. Any dispute regarding the interpretation
of this Agreement shall be submitted by Participant or the Company to the
Committee for review. The resolution of such a dispute by the Committee shall be
final and binding on the Company and Participant.
10. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement of the parties and supersedes all prior undertakings and agreements
with respect to the subject matter hereof.
11. NOTICES. Any notice required to be given or delivered to
the Company under the terms of this Agreement shall be in writing and addressed
to the Corporate Secretary of the Company at its principal corporate offices.
Any notice required to be given or delivered to Participant shall be in writing
and addressed to Participant at the address indicated above or to such other
address as such party may designate in writing from time to time to the Company.
All notices shall be deemed to have been given or delivered upon: personal
delivery; three (3) days after deposit in the United States mail by certified or
registered mail (return receipt requested); one (1) business day after deposit
with any return receipt express courier (prepaid); or one (1)
4
<PAGE> 5
business day after transmission by facsimile, rapifax or telecopier.
12. SUCCESSORS AND ASSIGNS. The Company may assign any of its
rights under this Agreement. This Agreement shall be binding upon and inure to
the benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer set forth herein, this Agreement shall be binding upon
Participant and Participant's heirs, executors, administrators, legal
representatives, successors and assigns.
13. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California as such laws
are applied to agreements between California residents entered into and to be
performed entirely within California. If any provision of this Agreement is
determined by a court of law to be illegal or unenforceable, then such provision
will be enforced to the maximum extent possible and the other provisions will
remain fully effective and enforceable.
14. ACCEPTANCE. Participant hereby acknowledges receipt of a
copy of this Agreement. Participant has read and understands the terms and
provisions thereof, and accepts the Option subject to all the terms and
conditions of this Agreement. Participant acknowledges that there may be adverse
tax consequences upon exercise of the Option or disposition of the Shares and
that Participant should consult a tax adviser prior to such exercise or
disposition.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in triplicate by its duly authorized representative and Participant has
executed this Agreement in triplicate as of the Date of Grant.
SOLIS DESIGN, INC. PARTICIPANT
By: ________________________________ ________________________________
(Signature)
____________________________________ ________________________________
(Please print name) (Please print name)
____________________________________
(Please print title
5
<PAGE> 6
EXHIBIT A
NO. _____________
SOLIS DESIGN, INC.
STOCK OPTION EXERCISE AGREEMENT
This Exercise Agreement is made and entered into as of
______________, 19___ (the "EFFECTIVE DATE") by and between Solis Design, Inc.,
a California corporation (the "COMPANY"), and the purchaser named below (the
"PURCHASER").
PURCHASER: ___________________________________
SOCIAL SECURITY NUMBER: ___________________________________
ADDRESS: ___________________________________
___________________________________
TOTAL NUMBER OF SHARES: ___________________________________
EXERCISE PRICE PER SHARE: ___________________________________
TOTAL EXERCISE PRICE: ___________________________________
OPTION NO. ___ DATE OF GRANT: ___________________________________
1. EXERCISE OF OPTION.
1.1 Exercise. Pursuant to exercise of that certain
option ("OPTION") granted to Purchaser under the Non-Plan Stock Option Agreement
(the "AGREEMENT") and subject to the terms and conditions of this Exercise
Agreement, Purchaser hereby purchases from the Company, and the Company hereby
sells to Purchaser, the Total Number of Shares set forth above ("SHARES") of the
Company's Common Stock at the Exercise Price Per Share set forth above
("EXERCISE PRICE"). As used in this Exercise Agreement, the term "SHARES" refers
to the Shares purchased under this Exercise Agreement and includes all
securities received (a) in replacement of the Shares, (b) as a result of stock
dividends or stock splits with respect to the Shares, and (c) all securities
received in replacement of the Shares in a merger, recapitalization,
reorganization or similar corporate transaction.
1.2 Title to Shares. The exact spelling of the name(s)
under which Purchaser will take title to the Shares is:
______________________________________________________
______________________________________________________
1
<PAGE> 7
1.3 Payment. Purchaser hereby delivers payment of the
Exercise Price to the extent permitted in the Agreement as follows (check and
complete as appropriate):
[ ] in cash (by check) in the amount of $____________, receipt
of which is acknowledged by the Company;
[ ] where approved by the Committee at the time of grant, by
delivery of _________ fully-paid, nonassessable and vested
shares of the Common Stock of the Company owned by
Purchaser for at least six (6) months prior to the date
hereof which have been paid for within the meaning of SEC
Rule 144, or obtained by Purchaser in the open public
market, and owned free and clear of all liens, claims,
encumbrances or security interests, valued at the current
Fair Market Value of $___________ per share;
[ ] by cancellation of indebtedness of the Company to Purchaser
in the amount of $__________;
[ ] by the waiver hereby of compensation due or accrued for
services rendered in the amount of $_________;
[ ] through a "same-day-sale" commitment, delivered herewith,
from Participant and the NASD Dealer named therein, in the
amount of $__________; or
[ ] through a "margin" commitment, delivered herewith from
Participant and the NASD Dealer named therein, in the
amount of $___________.
2. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser
represents and warrants to the Company that:
2.1 Agrees to Terms of the Plan. Purchaser has received
a copy of the Agreement, has read and understands the terms of the Agreement and
this Exercise Agreement, and agrees to be bound by their terms and conditions.
Purchaser acknowledges that there may be adverse tax consequences upon exercise
of the Option or disposition of the Shares, and that Purchaser should consult a
tax adviser prior to such exercise or disposition.
2.2 Purchase for Own Account for Investment. Purchaser
is purchasing the Shares for Purchaser's own account for investment purposes
only and not with a view to, or for sale in connection with, a distribution of
the Shares within the meaning of the Securities Act. Purchaser has no present
intention of selling or otherwise disposing of all or any portion of the Shares
and no one other than Purchaser has any beneficial ownership of any of the
Shares.
2.3 Access to Information. Purchaser has had access to
all information regarding the Company and its present and prospective business,
assets, liabilities and financial condition that Purchaser reasonably considers
important in making the decision to purchase the Shares, and Purchaser has had
ample opportunity to ask questions of the Company's representatives concerning
such matters and this investment.
2.4 Understanding of Risks. Purchaser is fully aware
of: (i) the highly speculative nature of the investment in the Shares; (ii) the
financial hazards involved; (iii) the lack of liquidity of the Shares and the
restrictions on transferability of the Shares (e.g., that Purchaser may not be
able to sell or dispose of the Shares or use them as collateral for loans); (iv)
the qualifications and backgrounds of the management of the Company; and (v) the
tax consequences of investment in the Shares.
2
<PAGE> 8
Purchaser is capable of evaluating the merits and risks of this investment, has
the ability to protect Purchaser's own interests in this transaction and is
financially capable of bearing a total loss of this investment.
2.5 No General Solicitation. At no time was Purchaser
presented with or solicited by any publicly issued or circulated newspaper,
mail, radio, television or other form of general advertising or solicitation in
connection with the offer, sale and purchase of the Shares.
3. TAX CONSEQUENCES. PURCHASER UNDERSTANDS THAT PURCHASER MAY
SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF PURCHASER'S PURCHASE OR
DISPOSITION OF THE SHARES. PURCHASER REPRESENTS THAT PURCHASER HAS CONSULTED
WITH ANY TAX ADVISER PURCHASER DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE
OR DISPOSITION OF THE SHARES AND THAT PURCHASER IS NOT RELYING ON THE COMPANY
FOR ANY TAX ADVICE.
4. ENTIRE AGREEMENT. The Agreement are incorporated herein by
reference. This Exercise Agreement and the Agreement (a) constitute the entire
agreement and understanding of the parties with respect to the subject matter of
this Exercise Agreement, and supersede all prior understandings and agreements,
whether oral or written, between the parties hereto with respect to the specific
subject matter hereof, and (b) are governed by California law except for that
body of law pertaining to conflict of laws.
IN WITNESS WHEREOF, the Company has caused this Exercise Agreement
to be executed in duplicate by its duly authorized representative and Purchaser
has executed this Exercise Agreement in triplicate as of the Effective Date.
SOLIS DESIGN, INC. PURCHASER
By: ________________________________ ________________________________
(Signature)
____________________________________ ________________________________
(Please print name) (Please print name)
____________________________________
(Please print title
3
<PAGE> 1
EXHIBIT 5.01
October 31, 1997
Macromedia, Inc.
600 Townsend Street, Suite 310W
San Francisco, CA 94103
Gentlemen/Ladies:
At your request, we have examined the Registration Statement on Form S-8 (the
"Registration Statement") to be filed by you with the Securities and Exchange
Commission (the "Commission") on or about October 31, 1997 in connection with
the registration under the Securities Act of 1933, as amended, of an aggregate
of 1,510,500 shares of your Common Stock (the "Stock"), subject to issuance by
you upon the exercise of (a) stock options granted or to be granted by you under
your 1992 Equity Incentive Plan, as amended (the "Option Plan"), (b) stock
options assumed by you in connection with the merger of Solis Design, Inc. into
your wholly owned subsidiary (the "Assumed Options") and (c) purchase rights
granted or to be granted under your 1993 Employee Stock Purchase Plan, as
amended (the "Purchase Plan"). The plans referred to in clauses (a) through (c)
above are collectively referred to in this letter as the "Plans"). In rendering
this opinion, we have examined the following:
(1) the Option Plan and forms of Stock Option Agreement and Exercise
Agreement;
(2) the agreements and plan documents relevant to the Assumed
Options, including resolutions of Macromedia's Board of
Directors approving the merger and assumption of the Assumed
Options, the Agreement of Merger of Solis Design, Inc. with and
into Macromedia Acquisition, Inc., dated October 1, 1997, the
Solis Design, Inc. 1997 Equity Incentive Plan and associated
Stock Option Agreement and Stock Option Exercise Agreement and
the Solis Design, Inc. Non-Plan Stock Option Agreement and Stock
Option Exercise Agreement;
(3) the Purchase Plan and forms of Subscription Agreement and
Withdrawal Notice;
(4) the Registration Statement, together with the Exhibits filed as a
part thereof;
(5) the Prospectuses prepared in connection with the Registration
Statement;
(6) the minutes of meetings and actions by written consent of the
stockholders and Board of Directors that are contained in your
minute books in our possession;
(7) a Management Certificate addressed to us and dated of even date
herewith executed by the Company containing certain factual and
other representations;
(8) your registration statement on Form 8-A filed on October 22,
1993 with the Commission, as amended on your Form 8-A/A filed on
October 5, 1995 with the Commission; and
(9) oral confirmation from your transfer agent regarding the number
of outstanding shares.
In our examination of documents for purposes of this opinion, we have
assumed, and express no opinion as to, the genuineness of all signatures on
original documents, the authenticity of all documents submitted to us as
originals, the conformity to originals of all documents submitted to us as
copies, the legal capacity of all natural persons executing the same, the lack
of any undisclosed terminations, modifications, waivers or amendments to any
documents reviewed by us and the due execution and delivery of all documents
where due execution and delivery are prerequisites to the effectiveness thereof.
As to matters of fact relevant to this opinion, we have relied solely
upon our examination of the documents referred to above and have assumed the
current accuracy and completeness of the information obtained from the documents
referred to above. We have made no independent investigation or other attempt to
verify the accuracy of any of such information or to determine the existence or
non-existence of any other factual matters; however, we are not aware of any
facts that would lead us to believe that the opinion expressed herein is not
accurate.
Based upon the foregoing, it is our opinion that the 1,510,500 shares of
Stock that may be issued and sold by you upon the exercise of (a) stock options
granted or to be granted under the Option Plan, (b)
<PAGE> 2
the Assumed Options and (c) purchase rights granted or to be granted under the
Purchase Plan, when issued and sold in accordance with the applicable plan
and/or stock option or purchase agreements entered into or to be entered into
thereunder, and in the manner referred to in the relevant Prospectuses
associated with the Registration Statement, will be validly issued, fully paid
and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to all references to us, if any, in the
Registration Statement, the Prospectuses constituting a part thereof, and any
amendments thereto.
This opinion speaks only as of its date and is intended solely for your
use as an exhibit to the Registration Statement for the purpose of the above
sale of the Stock and is not to be relied upon for any other purpose.
Very truly yours,
FENWICK & WEST LLP
By: /s/ Gordon K. Davidson
--------------------------------
Gordon K. Davidson, Partner
2
<PAGE> 1
EXHIBIT 23.02
Consent of Independent Auditors
-------------------------------
The Board of Directors
Macromedia, Inc. and Subsidiaries:
We consent to incorporation by reference in the registration statement on Form
S-8 of Macromedia, Inc. of our report dated May 6, 1997, relating to the
consolidated balance sheets of Macromedia, Inc. and subsidiaries as of March
31, 1997 and 1996, and the related consolidated statements of operations,
stockholders' equity, and cash flows for each of the years in the three-year
period ended March 31, 1997, and the related schedule, which report appears in
the March 31, 1997, annual report on Form 10-K of Macromedia, Inc.
As indicated in our report, we did not audit the financial statements of Altsys
Corporation, a company acquired by Macromedia, Inc. in a business combination
accounted for as a pooling of interests for the nine months ended September 30,
1994. Those financial statements were audited by other auditors whose report
has been furnished to us, and our opinion, insofar as it relates to the amounts
included for Altsys Corporation for such periods, is based solely on the
report of the other auditors.
KPMG Peat Marwick LLP
Palo Alto, California
October 30, 1997
1
<PAGE> 1
EXHIBIT 23.03
CONSENT OF INDEPENDENT PUBLIC ACCOUTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-8 of our report on the
financial statements of Altsys Corporation dated November 28, 1994
incorporated by reference in Macromedia, Inc.'s Form 10-K for the year ended
March 31, 1997 and to all references to our Firm included in this Registration
Statement on Form S-8. It should be noted that we have audited the financial
statements of Altsys Corporation as of and for the nine-month period ended
September 30, 1994. We have not audited any financial statements subsequent to
September 30, 1994 or performed any audit procedures subsequent to the date of
our report.
Arthur Andersen LLP
Dallas, Texas,
October 30, 1997
