<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 17, 1998
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
GASONICS INTERNATIONAL CORPORATION
(Exact name of Registrant as specified in its charter)
----------------------
Delaware 94-2159729
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
2540 JUNCTION AVENUE
SAN JOSE, CALIFORNIA 95134-1909
(Address of principal executive offices) (zip code)
----------------------
GASONICS INTERNATIONAL CORPORATION
1994 STOCK OPTION/STOCK ISSUANCE PLAN
(Full Title of the Plans)
----------------------
Monte M. Toole
CHAIRMAN OF THE BOARD OF DIRECTORS
GASONICS INTERNATIONAL CORPORATION
2540 JUNCTION AVENUE, SAN JOSE, CALIFORNIA 95134-1909
(408) 570-7400
(Telephone number, including area code, of agent for service)
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Proposed maximum Proposed maximum
Title of securities to Amount to be offering price aggregate Amount of
be registered registered(1) per share(2) offering price(2) registration fee
<S> <C> <C> <C> <C>
Common Stock, $0.001
par value 400,000 $10.81 $4,324,000 $1,275.58
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the GaSonics International
Corporation 1994 Stock Option/Stock Issuance Plan by reason of any stock
dividend, stock split, recapitalization or any other similar transaction
without Registrant's receipt of consideration which results in an increase in
the number of outstanding shares of Common Stock of GaSonics International
Corporation.
(2) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, on the basis of the average of the high
and low selling prices per share of Common Stock of GaSonics International
Corporation on April 13, 1998, as reported on the Nasdaq National Market.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
GaSonics International Corporation (the "Registrant") hereby
incorporates by reference into this Registration Statement the following
documents previously filed with the Securities and Exchange Commission (the
"Commission"):
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended September 30, 1997, filed with the Commission on
December 3, 1997;
(b) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended December 31, 1997 filed with the Commission on
February 10, 1997; and
(c) The Registrant's Registration Statement No. 0-23372 on Form
8-A filed with the Commission on February 4, 1994 pursuant to
Section 12 of the Securities Exchange Act of 1934 (the "1934
Act"), together with Amendment No. 1 to the Form 8-A filed
with the Commission on March 9, 1994, which describes the
terms, rights and provisions applicable to the Registrant's
outstanding Common Stock.
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date
of this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold
or which deregisters all securities then remaining unsold shall be deemed to
be incorporated by reference into this Registration Statement and to be a
part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any subsequently filed document which is also deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as
so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. DESCRIPTION OF SECURITIES
Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Section 145 of the Delaware General Corporation Law, the
Registrant has broad powers to indemnify its directors and officers against
liabilities they may incur in such capacities, including liabilities under
the Securities Act of 1933, as amended (the "1933 Act"). The Registrant's
Bylaws (the "Bylaws") provide that the Registrant shall indemnify its
directors and officers if such officer or director acted (i) in good faith,
(ii) in a manner reasonably believed to be in or not opposed to the best
interests of the Registrant, and (iii) with respect to any criminal action or
proceeding, had no reasonable cause to believe such conduct was unlawful.
The Registrant believes that indemnification under its Bylaws covers at least
negligence and gross negligence, and requires the Registrant to advance
litigation expenses in the case of stockholder derivative actions or other
actions, against an undertaking by the directors and officers to repay such
advances if it is ultimately determined that the director is not entitled to
indemnification. The Bylaws further provide that rights conferred under such
Bylaws shall not be deemed to be
<PAGE>
exclusive of any other right such persons may have or acquire under any
agreement, vote of stockholders or disinterested directors, or otherwise.
In addition, the Registrant's Certificate of Incorporation (the
"Certificate of Incorporation") provides that, pursuant to Delaware law, none
of its directors shall be liable for monetary damages for breach of his or
her fiduciary duty of care to the Registrant and its stockholders. This
provision in the Certificate of Incorporation does not eliminate the duty of
care, and in appropriate circumstances equitable remedies such as injunctive
or other forms of non-monetary relief will remain available under Delaware
law. In addition, each director will continue to be subject to liability for
breach of the director's duty of loyalty to the Registrant for acts or
omissions not in good faith or involving intentional misconduct, for knowing
violations of law, for actions leading to improper personal benefit to the
director, and for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under Delaware law. The provision also does
not affect a director's responsibilities under any other law, such as the
federal securities laws or state or federal environmental laws. The
Certificate of Incorporation further provides that the Registrant shall
indemnify its directors and officers to the fullest extent permitted by law
and requires the Registrant to advance litigation expenses in the case of
stockholder derivative actions or other actions, against an undertaking by
the director to repay such advances if it is ultimately determined that the
director is not entitled to indemnification. The Certificate of
Incorporation also provides that rights conferred under such Certificate of
Incorporation shall not be deemed to be exclusive of any other right such
persons may have or acquire under any statute, the Certificate of
Incorporation, the Bylaws, agreement, vote of stockholders or disinterested
directors, or otherwise.
The Registrant has obtained a liability insurance policy for the
officers and directors that, subject to certain limitations, terms and
conditions, will insure them against losses arising from wrongful acts (as
defined by the policy) in their capacity as directors or officers.
In addition, the Registrant has entered into agreements to indemnify its
directors and certain of its officers in addition to the indemnification
provided for in the Certificate of Incorporation and Bylaws. These
agreements, among other things, indemnify the Registrant's directors and
certain of its officers for certain expenses (including attorneys fees),
judgments, fines and settlement amounts incurred by such person in any action
or proceeding, including any action by or in the right of the Registrant, on
account of services as a director or officer of the Registrant or as a
director or officer of any subsidiary of the Registrant, or as a director or
officer of any other company or enterprise that the person provides services
to at the request of the Registrant.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
Item 8. EXHIBITS
Exhibit
Number Exhibit
- ------- -------
4 Instruments Defining Rights of Stockholders. Reference is made
to Registrant's Registration Statement No. 0-23372 on Form 8-A,
including the exhibits thereto, and Amendment No. 1 thereto,
which are incorporated herein by reference pursuant to Item 3(c)
of this Registration Statement.
5 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Arthur Andersen LLP, Independent Auditors.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-5 of this
Registration Statement.
99.1 GaSonics International Corporation 1994 Stock Option/Stock
Issuance Plan (as amended and restated effective January 20,
1998).
II-2.
<PAGE>
99.2 Form of Notice of Grant of Stock Option.
99.3* Form of Stock Option Agreement.
99.4* Form of Addendum to Stock Option Agreement (Financial
Assistance).
99.5* Form of Addendum to Stock Option Agreement (Limited Stock
Appreciation Right).
99.6* Form of Addendum to Stock Option Agreement (Involuntary
Termination).
99.7* Form of Addendum to Stock Option Agreement (Special Tax
Elections).
99.8** Form of Notice of Grant of Stock Option (Non-Employee Director -
Initial Grant).
99.9** Form of Notice of Grant of Stock Option (Non-Employee Director -
Subsequent Grant).
99.10 Form of Stock Option Agreement (Non-Employee Director - Initial
Grant).
99.11 Form of Stock Option Agreement (Non-Employee Director - Annual
Grant).
99.12* Form of Stock Issuance Agreement.
99.13* Form of Addendum to Stock Issuance Agreement (Involuntary
Termination).
99.14* Form of Addendum to Stock Issuance Agreement (Special Tax
Elections).
* Exhibits 99.3 through 99.7 and 99.12 through 99.14 are incorporated
herein by reference to Exhibits 99.3 through 99.7 and 99.11 through 99.13,
respectively, to Registrant's Registration Statement No. 33-76698 on Form S-8
filed with the SEC on March 21, 1994.
** Exhibits 99.8 and 99.9 are incorporated herein by reference to Exhibits
99.8 and 99.9, respectively, to Registrant's Registration Statement No.
333-01948 on Form S-8 filed with the SEC on March 5, 1996.
Item 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes: (1) to file,
during any period in which offers or sales are being made, a post-effective
amendment to this Registration Statement (i) to include any prospectus
required by Section 10(a)(3) of the Securities Act of 1933, as amended (the
"1933 Act"), (ii) to reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement, 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 clauses (1)(i) and (1)(ii)
shall 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 1934
Act that are incorporated by reference into the Registration Statement; (2)
that for the purpose of determining any liability under the 1933 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; and (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 Registrant's 1994 Stock Option/Stock Issuance Plan.
B. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the 1933 Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
1934 Act that is incorporated by reference into 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.
C. Insofar as indemnification for liabilities arising under the
1933 Act may be permitted to directors, officers or controlling persons of
the Registrant pursuant to the indemnity provisions summarized in Item 6
above or otherwise, the Registrant has been informed that in the opinion of
the Commission such indemnification is against public policy as expressed in
the 1933 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
II-3.
<PAGE>
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act, and will be governed by
the final adjudication of such issue.
II-4.
<PAGE>
SIGNATURES
Pursuant to the requirements of the 1933 Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Jose, State of California, on April 15, 1998.
GASONICS INTERNATIONAL CORPORATION
By: /s/ Dave Toole
------------------------------------------
Dave Toole, Chief Executive Officer
and President
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of GaSonics
International Corporation, a Delaware corporation, do hereby constitute and
appoint Monte M. Toole and Dave Toole, and each of them, the lawful
attorneys-in-fact and agents, with full power and authority to do any and all
acts and things and to execute any and all instruments which said attorneys
and agents, and any one of them, determine may be necessary or advisable or
required to enable said corporation to comply with the 1933 Act, and any
rules or regulations or requirements of the Commission in connection with
this Registration Statement. Without limiting the generality of the
foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or to amendments
or supplements thereof, and each of the undersigned hereby ratifies and
confirms all that said attorneys and agents, or any one of them, shall do or
cause to be done by virtue hereof. This Power of Attorney may be signed in
several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power
of Attorney as of the date indicated.
Pursuant to the requirements of the 1933 Act, this Registration
Statement has been signed below by the following persons in the capacities
and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Monte M. Toole Chairman of the Board of Directors April 15, 1998
- ----------------------------
Monte M. Toole
II-5.
<PAGE>
/s/ Dave Toole Chief Executive Officer, President April 15, 1998
- ---------------------------- and Director
Dave Toole (Principal Executive Officer)
/s/ Terry R. Gibson Vice President, Finance April 15, 1998
- ---------------------------- and Chief Financial Officer
Terry R. Gibson (Principal Financial and Accounting
Officer)
/s/ Kenneth L. Schroeder Director April 15, 1998
- ----------------------------
Kenneth L. Schroeder
/s/ F. Joseph Van Poppelen Director April 15, 1998
- ----------------------------
F. Joseph Van Poppelen
</TABLE>
II-6.
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
GASONICS INTERNATIONAL CORPORATION
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit
- ------- -------
4 Instruments Defining Rights of Stockholders. Reference is made
to Registrant's Registration Statement No. 0-23372 on Form 8-A,
including the exhibits thereto, and Amendment No. 1 thereto,
which are incorporated herein by reference pursuant to Item 3(c)
of this Registration Statement.
5 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Arthur Andersen LLP, Independent Auditors.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-5 of this
Registration Statement.
99.1 GaSonics International Corporation 1994 Stock Option/Stock
Issuance Plan (as amended and restated effective January 20,
1998).
99.2 Form of Notice of Grant of Stock Option.
99.3* Form of Stock Option Agreement.
99.4* Form of Addendum to Stock Option Agreement (Financial
Assistance).
99.5* Form of Addendum to Stock Option Agreement (Limited Stock
Appreciation Right).
99.6* Form of Addendum to Stock Option Agreement (Involuntary
Termination).
99.7* Form of Addendum to Stock Option Agreement (Special Tax
Elections).
99.8** Form of Notice of Grant of Stock Option (Non-Employee Director -
Initial Grant).
99.9** Form of Notice of Grant of Stock Option (Non-Employee Director -
Subsequent Grant).
99.10 Form of Stock Option Agreement (Non-Employee Director - Initial
Grant).
99.11 Form of Stock Option Agreement (Non-Employee Director - Annual
Grant).
99.12* Form of Stock Issuance Agreement.
99.13* Form of Addendum to Stock Issuance Agreement (Involuntary
Termination).
99.14* Form of Addendum to Stock Issuance Agreement (Special Tax
Elections).
* Exhibits 99.3 through 99.7 and 99.12 through 99.14 are incorporated
herein by reference to Exhibits 99.3 through 99.7 and 99.11 through 99.13,
respectively, to Registrant's Registration Statement No. 33-76698 on Form S-8
filed with the SEC on March 21, 1994.
** Exhibits 99.8 and 99.9 are incorporated herein by reference to Exhibits
99.8 and 99.9, respectively, to Registrant's Registration Statement No.
333-01948 on Form S-8 filed with the SEC on March 5, 1996.
<PAGE>
EXHIBIT 5
April 15, 1998
Opinion and consent of Brobeck, Phleger & Harrison LLP
GaSonics International Corporation
2540 Junction Avenue
San Jose, California 95134-1909
Re: GaSonics International Corporation Registration Statement
for Offering of 400,000 Shares of Common Stock
---------------------------------------------------------
Ladies and Gentlemen:
We refer to your registration on Form S-8 (the "Registration Statement")
under the Securities Act of 1933, as amended, of 400,000 shares of Common
Stock under the GaSonics International Corporation (the "Company") 1994 Stock
Option/Stock Issuance Plan (the "Plan"). We advise you that, in our opinion,
when such shares have been issued and sold pursuant to the applicable
provisions of the Plan in accordance with the Registration Statement, such
shares will be validly issued, fully paid and nonassessable shares of the
Company's Common Stock.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Brobeck, Phleger & Harrison LLP
BROBECK, PHLEGER & HARRISON LLP
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated October 27,
1997 incorporated by reference in GaSonics International Corporation's Form
10-K for the year ended September 30, 1997.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
San Jose, California
April 14, 1998
<PAGE>
EXHIBIT 99.1
GASONICS INTERNATIONAL CORPORATION
1994 STOCK OPTION/STOCK ISSUANCE PLAN
-------------------------------------
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 20, 1998)
ARTICLE ONE
GENERAL
-------
I. PURPOSE OF THE PLAN
A. This 1994 Stock Option/Stock Issuance Plan (the "Plan") is
intended to promote the interests of GaSonics International Corporation, a
Delaware corporation or any successor corporation (the "Corporation")
adopting the Plan, by providing (i) key employees (including officers) of the
Corporation (or its parent or subsidiary corporations) who are responsible
for the management, growth and financial success of the Corporation (or its
parent or subsidiary corporations), (ii) the non-employee members of the
Board and (iii) consultants and other independent contractors who provide
valuable services to the Corporation (or its parent or subsidiary
corporations) with the opportunity to acquire a proprietary interest, or
otherwise increase their proprietary interest, in the Corporation as an
incentive for them to remain in the Service of the Corporation (or its parent
or subsidiary corporations).
B. The Plan became effective upon adoption by the Board of
Directors of Gasonics International Corporation, a California corporation
("Gasonics California") on January 27, 1994, and such date shall accordingly
constitute the Effective Date of the Plan. The Plan was subsequently assumed
by the Corporation in connection with the merger (the "Merger") of Gasonics
California into the Corporation in February, 1994.
II. DEFINITIONS
A. For purposes of the Plan, the following definitions
shall be in effect:
BOARD: the Corporation's Board of Directors.
CHANGE IN CONTROL: a change in ownership or control of the
Corporation effected through either of the following transactions:
a. the direct or indirect acquisition by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation) of beneficial ownership (within the
meaning of Rule 13d-3 of the 1934 Act) of securities possessing more
than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities pursuant to a tender or exchange
<PAGE>
offer made directly to the Corporation's stockholders which the Board
does not recommend such stockholders to accept; or
b. a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the
Board members (rounded up to the next whole number) ceases, by reason of
one or more contested elections for Board membership, to be comprised of
individuals who either (i) have been Board members continuously since
the beginning of such period or (ii) have been elected or nominated for
election as Board members during such period by at least a majority of
the Board members described in clause (i) who were still in office at
the time such election or nomination was approved by the Board.
CODE: the Internal Revenue Code of 1986, as amended.
COMMON STOCK: shares of the Corporation's common stock, par value
$0.001 per share.
CORPORATE TRANSACTION: any of the following stockholder-approved
transactions to which the Corporation is a party:
a. a merger or consolidation in which the Corporation is
not the surviving entity, except for a transaction the principal
purpose of which is to change the state in which the Corporation is
incorporated,
b. the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete
liquidation or dissolution of the Corporation, or
c. any reverse merger in which the Corporation is the
surviving entity but in which securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's
outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior
to such merger.
EMPLOYEE: an individual who performs services while in the employ
of the Corporation or one or more parent or subsidiary corporations, subject
to the control and direction of the employer entity not only as to the work
to be performed but also as to the manner and method of performance.
EXERCISE DATE: the date on which the Corporation shall have
received written notice of the option exercise.
2.
<PAGE>
FAIR MARKET VALUE: the Fair Market Value per share of Common Stock
determined in accordance with the following provisions:
a. If the Common Stock is not at the time listed or admitted to
trading on any national securities exchange but is traded on the Nasdaq
National Market, the Fair Market Value shall be the closing selling price
per share on the date in question, as such price is reported by the
National Association of Securities Dealers on the Nasdaq National Market
or any successor system. If there is no reported closing selling price
for the Common Stock on the date in question, then the closing selling
price on the last preceding date for which such quotation exists shall be
determinative of Fair Market Value.
b. If the Common Stock is at the time listed or admitted to
trading on any national securities exchange, then the Fair Market Value
shall be the closing selling price per share on the date in question on
the securities exchange determined by the Plan Administrator to be the
primary market for the Common Stock, as such price is officially quoted
in the composite tape of transactions on such exchange. If there is no
reported sale of Common Stock on such exchange on the date in question,
then the Fair Market Value shall be the closing selling price on the
exchange on the last preceding date for which such quotation exists.
c. If the Common Stock is on the date in question neither listed
nor admitted to trading on any national securities exchange nor traded on
the Nasdaq National Market, then the Fair Market Value of the Common
Stock on such date shall be determined by the Plan Administrator after
taking into account such factors as the Plan Administrator shall deem
appropriate.
HOSTILE TAKE-OVER: the direct or indirect acquisition by any
person or related group of persons (other than the Corporation or a person
that directly or indirectly controls, is controlled by, or is under common
control with, the Corporation) of beneficial ownership (within the meaning of
Rule 13d-3 of the 1934 Act) of securities possessing more than fifty percent
(50%) of the total combined voting power of the Corporation's outstanding
securities pursuant to a tender or exchange offer made directly to the
Corporation's stockholders which the Board does not recommend such
stockholders to accept.
INCENTIVE OPTION: a stock option which satisfies the requirements
of Code Section 422.
1934 ACT: the Securities and Exchange Act of 1934, as amended from
time to time.
3.
<PAGE>
NON-STATUTORY OPTION: a stock option not intended to meet the
requirements of Code Section 422.
OPTIONEE: any person to whom an option is granted under the
Discretionary Option Grant or Automatic Option Grant Program in effect under
the Plan.
PARTICIPANT: any person who receives a direct issuance of Common
Stock under the Stock Issuance Program in effect under the Plan.
PERMANENT DISABILITY OR PERMANENTLY DISABLED: the inability of the
Optionee or the Participant to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment expected
to result in death or to be of continuous duration of twelve (12) months or
more.
PLAN ADMINISTRATOR: the particular entity, whether the Primary
Committee, the Board or the Secondary Committee, which is authorized to
administer the Discretionary Option Grant and Stock Issuance Programs with
respect to one or more classes of eligible persons, to the extent such entity
is carrying out its administrative functions under those programs with
respect to the persons under its jurisdiction.
PRIMARY COMMITTEE: the committee of two (2) or more non-employee
Board members appointed by the Board to administer the Discretionary Option
Grant and Stock Issuance Programs with respect to Section 16 Insiders.
SERVICE: the performance of services on a periodic basis to the
Corporation (or any parent or subsidiary corporation) in the capacity of an
Employee, a non-employee member of the board of directors or an independent
consultant or advisor, except to the extent otherwise specifically provided
in the applicable stock option or stock issuance agreement.
SECONDARY COMMITTEE: a committee of one (1) or more Board members
appointed by the Board to administer the Discretionary Option Grant and Stock
Issuance Programs with respect to eligible persons other than Section 16
Insiders.
SECTION 12(g) REGISTRATION DATE: the date on which the initial
registration of the Common Stock under Section 12(g) of the 1934 Act becomes
effective.
SECTION 16 INSIDER: an executive officer of the Company or a
member of the Board subject to the short-swing liability provisions of
Section 16(b) of the 1934 Act.
TAKE-OVER PRICE: the GREATER of (a) the Fair Market Value per
share of Common Stock on the date the particular option to purchase such
stock is surrendered to the Corporation in connection with a Hostile
Take-Over or (b) the highest reported price per share of Common Stock paid by
the tender offeror in effecting such Hostile Take-Over. However, if the
4.
<PAGE>
surrendered option is an Incentive Option, the Take-Over Price shall not
exceed the clause (a) price per share.
B. The following provisions shall be applicable in determining the
parent and subsidiary corporations of the Corporation:
Any corporation (other than the Corporation) in an unbroken
chain of corporations ending with the Corporation shall be considered
to be a PARENT of the Corporation, provided each such corporation in
the unbroken chain (other than the Corporation) owns, at the time of
the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the
other corporations in such chain.
Each corporation (other than the Corporation) in an unbroken
chain of corporations beginning with the Corporation shall be
considered to be a SUBSIDIARY of the Corporation, provided each such
corporation in the unbroken chain (other than the last corporation)
owns, at the time of the determination, stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
III. STRUCTURE OF THE PLAN
A. STOCK PROGRAMS. The Plan shall be divided into three (3)
separate components: the Discretionary Option Grant Program specified in
Article Two, the Automatic Option Grant Program specified in Article Three and
the Stock Issuance Program specified in Article Four. Under the Discretionary
Option Grant Program, eligible individuals may, at the discretion of the Plan
Administrator, be granted options to purchase shares of Common Stock in
accordance with the provisions of Article Two. Under the Automatic Option
Grant Program, non-employee members of the Board will receive special option
grants at periodic intervals to purchase shares of Common Stock in accordance
with the provisions of Article Three. Under the Stock Issuance Program,
eligible individuals may be issued shares of Common Stock directly, either
through the immediate purchase of such shares at a price not less than
eighty-five percent (85%) of the Fair Market Value of the shares at the time
of issuance or as a bonus tied to the performance of services or the
Corporation's attainment of financial objectives.
B. GENERAL PROVISIONS. Unless the context clearly indicates
otherwise, the provisions of Articles One and Five shall apply to the
Discretionary Option Grant Program, the Automatic Option Grant Program and the
Stock Issuance Program and shall accordingly govern the interests of all
individuals under the Plan.
IV. ADMINISTRATION OF THE PLAN
A. The persons eligible to participate in the Discretionary Option
Grant and Stock Issuance Programs shall be limited to the following:
5.
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(i) Employees of the Corporation or any parent or
subsidiary, whether now existing or subsequently established,
(ii) non-employee members of the Board or the board of
directors of any parent or subsidiary corporation, and
(iii) consultants and other independent advisors
who provide services to the Corporation (or any parent or subsidiary
corporation).
B. The Primary Committee shall have sole and exclusive
authority to administer the Discretionary Option Grant and Stock Issuance
Programs with respect to Section 16 Insiders.
C. Administration of the Discretionary Option Grant and Stock
Issuance Programs with respect to all other persons eligible to participate in
those programs may, at the Board's discretion, be vested in the Primary
Committee or a Secondary Committee, or the Board may retain the power to
administer those programs with respect to all such persons. The member or
members of the Secondary Committee may be comprised of one or more Board
members who are Employees eligible to receive discretionary option grants or
direct stock issuances under the Plan or any other stock option, stock
appreciation, stock bonus or other stock plan of the Corporation (or any
Parent or Subsidiary).
D. Members of the Primary Committee or any Secondary
Committee shall serve for such period of time as the Board may determine and
may be removed by the Board at any time. The Board may also at any time
terminate the functions of any Secondary Committee and reassume all powers and
authority previously delegated to such committee.
E. Each Plan Administrator shall, within the scope of its
administrative functions under the Plan, have full power and authority to
establish such rules and regulations as it may deem appropriate for proper
administration of the Discretionary Option Grant and Stock Issuance Programs
and to make such determinations under, and issue such interpretations of, the
provisions of such programs and any outstanding options or stock issuances
thereunder as it may deem necessary or advisable. Decisions of the Plan
Administrator within the scope of its administrative functions under the Plan
shall be final and binding on all parties who have an interest in the
Discretionary Option Grant or Stock Issuance Program under its jurisdiction or
any stock option or stock issuance thereunder.
F. Service on the Primary Committee or the Secondary
Committee shall constitute service as a Board member, and members of each such
committee shall accordingly be entitled to full indemnification and
reimbursement as Board members for their service on such committee. No member
of the Primary Committee or the Secondary Committee shall be liable for any
act or omission made in good faith with respect to the Plan or any option
grants or stock issuances under the Plan.
6.
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G. Administration of the Automatic Option Grant Program shall
be self-executing in accordance with the terms of that program, and no Plan
Administrator shall exercise any discretionary functions with respect to
option grants made thereunder.
V. STOCK SUBJECT TO THE PLAN
A. Shares of Common Stock shall be available for issuance
under the Plan and shall be drawn from either the Corporation's authorized
but unissued shares of Common Stock or from reacquired shares of Common
Stock, including shares repurchased by the Corporation on the open market.
The maximum number of shares of Common Stock which may be issued over the
term of the Plan shall not exceed 3,100,000 shares(1), subject to adjustment
from time to time in accordance with the provisions of this Section VI. Such
share reserve includes the 400,000-share increase authorized by the Board on
January 20, 1998, subject to stockholder approval at the 1998 Annual
Stockholders Meeting.
B. In no event shall the aggregate number of shares of Common
Stock for which any one individual participating in the Plan may be granted
stock options and direct stock issuances exceed 825,000 shares(1) over the
term of the Plan.
C. Should one or more outstanding options under this Plan
expire or terminate for any reason prior to exercise in full (including any
option cancelled in accordance with the cancellation-regrant provisions of
Section IV of Article Two of the Plan), then the shares subject to the portion
of each option not so exercised shall be available for subsequent issuance under
the Plan. Unvested shares issued under the Plan and subsequently repurchased by
the Corporation at the original option or issue price paid per share will be
added back to the share reserve and will accordingly be made available for
subsequent issuance under the Plan. Shares subject to any option or portion
thereof surrendered in accordance with Section V of Article Two or Section III
of Article Three shall not be available for subsequent issuance under the Plan.
In addition, should the exercise price of an outstanding option under the Plan
be paid with shares of Common Stock or should shares of Common Stock otherwise
issuable under the Plan be withheld by the Corporation in satisfaction of the
withholding taxes incurred in connection with the exercise of an outstanding
option under the Plan or the vesting of a direct share issuance made under the
Plan, then the number of shares of Common Stock available for issuance under the
Plan shall be reduced by the gross number of shares for which the option is
exercised or which vest under the share issuance, and not by the net number of
shares of Common Stock actually issued to the holder of such option or share
issuance.
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(1) Each number reflects the 3-for-2 split of the Common Stock effected by
the Corporation on November 20, 1995. In no event, however, may more than
2,604,008 shares of Common Stock be issued under the Plan after November 15,
1996, including the shares subject to options outstanding under the Plan on
that date.
7.
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D. Should any change be made to the Common Stock issuable
under the Plan by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, then appropriate adjustments shall be made to (i) the maximum
number and/or class of securities issuable under the Plan, (ii) the maximum
number and/or class of securities for which any one individual participating
in the Plan may be granted stock options and direct stock issuances in the
aggregate over the term of the Plan, (iii) the number and/or class of
securities for which automatic option grants are to be subsequently made per
newly-elected or continuing non-employee Board member under the Automatic
Option Grant Program and (iv) the number and/or class of securities and price
per share in effect under each option outstanding under the Discretionary
Option Grant or Automatic Option Grant Program. Such adjustments to the
outstanding options are to be effected in a manner which shall preclude the
enlargement or dilution of rights and benefits under such options. The
adjustments determined by the Plan Administrator shall be final, binding and
conclusive.
8.
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ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
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I. TERMS AND CONDITIONS OF OPTIONS
Options granted under the Discretionary Option Grant Program shall
be authorized by action of the Plan Administrator and may, at the Plan
Administrator's discretion, be either Incentive Options or Non-Statutory
Options. Each granted option shall be evidenced by one or more instruments in
the form approved by the Plan Administrator; PROVIDED, however, that each such
instrument shall comply with the terms and conditions specified below. Each
instrument evidencing an Incentive Option shall, in addition, be subject to
the applicable provisions of Section II of this Article Two.
A. EXERCISE PRICE.
1. The exercise price per share shall be fixed by the
Plan Administrator in accordance with the following provisions:
a. The exercise price per share of the Common
Stock subject to an Incentive Option shall in no event be less than
one hundred percent (100%) of the Fair Market Value of such Common
Stock on the grant date.
b. The exercise price per share of the Common
Stock subject to a Non-Statutory Option shall in no event be less than
eighty-five percent (85%) of the Fair Market Value of such Common
Stock on the grant date.
2. The exercise price shall become immediately due upon
exercise of the option and, subject to the provisions of Section I of Article
Five and the instrument evidencing the grant, shall be payable in one of the
alternative forms specified below:
a. full payment in cash or check made payable to
the Corporation's order;
b. full payment in shares of Common Stock held
for the requisite period necessary to avoid a charge to the
Corporation's earnings for financial reporting purposes and valued at
Fair Market Value on the Exercise Date;
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c. full payment in a combination of shares of
Common Stock held for the requisite period necessary to avoid a charge
to the Corporation's earnings for financial reporting purposes and
valued at Fair Market Value on the Exercise Date and cash or check
made payable to the Corporation's order; or
d. to the extent the option is exercised for
vested shares, full payment through a broker-dealer sale and
remittance procedure pursuant to which the Optionee shall provide
concurrent irrevocable written instructions (i) to a
Corporation-designated brokerage firm to effect the immediate sale of
the purchased shares and remit to the Corporation, out of the sale
proceeds available on the settlement date, sufficient funds to cover
the aggregate exercise price payable for the purchased shares plus all
applicable Federal, state and local income and employment taxes
required to be withheld by the Corporation in connection with such
purchase and (ii) to the Corporation to deliver the certificates for
the purchased shares directly to such brokerage firm in order to
complete the sale transaction.
Except to the extent the sale and remittance procedure is utilized
in connection with the exercise of the option, payment of the exercise price
for the purchased shares must accompany such notice.
B. TERM AND EXERCISE OF OPTIONS. Each option granted under
this Discretionary Option Grant Program shall be exercisable at such time or
times and during such period as is determined by the Plan Administrator and set
forth in the instrument evidencing the grant. No such option, however, shall
have a maximum term in excess of ten (10) years measured from the grant date.
C. LIMITED TRANSFERABILITY OF OPTIONS. During the lifetime of
the Optionee, Incentive Options shall be exercisable only by the Optionee and
shall not be assignable or transferable other than by will or by the laws of
descent and distribution following the Optionee's death. However, a
Non-Statutory Option may, in connection with the Optionee's estate plan, be
assigned in whole or in part during the Optionee's lifetime to one or more
members of the Optionee's immediate family or to a trust established exclusively
for one or more such family members. The assigned portion may only be exercised
by the person or persons who acquire a proprietary interest in the option
pursuant to the assignment. The terms applicable to the assigned portion shall
be the same as those in effect for the option immediately prior to such
assignment and shall be set forth in such documents issued to the assignee as
the Plan Administrator may deem appropriate.
10.
<PAGE>
D. TERMINATION OF SERVICE.
1. The following provisions shall govern the exercise
period applicable to any outstanding options held by the Optionee at the time
of cessation of Service or death.
a. Should an Optionee cease Service for any
reason (including death or Permanent Disability) while holding one or
more outstanding options under this Article Two, then none of those
options shall (except to the extent otherwise provided pursuant to
subparagraph 3 below) remain exercisable for more than a thirty-six
(36)-month period (or such shorter period determined by the Plan
Administrator and set forth in the instrument evidencing the grant)
measured from the date of such cessation of Service.
b. Any option held by the Optionee under this
Article Two and exercisable in whole or in part on the date of his or
her death may be subsequently exercised by the personal representative
of the Optionee's estate or by the person or persons to whom the
option is transferred pursuant to the Optionee's will or in accordance
with the laws of descent and distribution. However, the right to
exercise such option shall lapse upon the EARLIER of (i) the third
anniversary of the date of the Optionee's death (or such shorter
period determined by the Plan Administrator and set forth in the
instrument evidencing the grant) or (ii) the specified expiration date
of the option term. Accordingly, upon the occurrence of the earlier
event, the option shall terminate and cease to remain outstanding.
c. Under no circumstances shall any such option
be exercisable after the specified expiration date of the option term.
d. During the applicable post-Service exercise
period, the option may not be exercised in the aggregate for more than
the number of shares (if any) in which the Optionee is vested at the
time of his or her cessation of Service. Upon the expiration of the
limited post-Service exercise period or (if earlier) upon the
specified expiration date of the option term, each such option shall
terminate and cease to remain outstanding with respect to any vested
shares for which the option has not otherwise been exercised.
However, each outstanding option shall immediately terminate and cease
to remain outstanding, at the time of the Optionee's cessation of
Service, with respect to any shares for which the option is not
otherwise at that time exercisable or in which the Optionee is not
otherwise vested.
11.
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e. Should (i) the Optionee's Service be
terminated for misconduct (including, but not limited to, any act of
dishonesty, willful misconduct, fraud or embezzlement) or (ii) the
Optionee make any unauthorized use or disclosure of confidential
information or trade secrets of the Corporation or its parent or
subsidiary corporations, then in any such event all outstanding
options held by the Optionee under this Article Two shall terminate
immediately and cease to remain outstanding.
2. The Plan Administrator shall have complete discretion,
exercisable either at the time the option is granted or at any time while the
option remains outstanding, to permit one or more options held by the Optionee
under this Article Two to be exercised, during the limited post-Service exercise
period applicable under this paragraph C., not only with respect to the number
of vested shares of Common Stock for which each such option is exercisable at
the time of the Optionee's cessation of Service but also with respect to one or
more subsequent installments of vested shares for which the option would
otherwise have become exercisable had such cessation of Service not occurred.
3. The Plan Administrator shall also have full power and
authority, exercisable either at the time the option is granted or at any time
while the option remains outstanding, to extend the period of time for which the
option is to remain exercisable following the Optionee's cessation of Service or
death from the limited period in effect under subparagraph 1. above to such
greater period of time as the Plan Administrator shall deem appropriate. In no
event, however, shall such option be exercisable after the specified expiration
date of the option term.
E. STOCKHOLDER RIGHTS. An Optionee shall have no stockholder
rights with respect to any shares covered by the option until such individual
shall have exercised the option and paid the exercise price for the purchased
shares.
F. REPURCHASE RIGHTS. The shares of Common Stock acquired upon
the exercise of any Article Two option grant may be subject to repurchase by the
Corporation in accordance with the following provisions:
1. The Plan Administrator shall have the discretion to
authorize the issuance of unvested shares of Common Stock under this Article
Two. Should the Optionee cease Service while holding such unvested shares, the
Corporation shall have the right to repurchase any or all of those unvested
shares at the exercise price paid per share. The terms and conditions upon
which such repurchase right shall be exercisable (including the period and
procedure for exercise and the appropriate vesting schedule for the purchased
shares) shall be established by the Plan Administrator and set forth in the
instrument evidencing such repurchase right.
2. All of the Corporation's outstanding repurchase rights
under this Article Two shall automatically terminate, and all shares subject
to such terminated rights shall
12.
<PAGE>
immediately vest in full, upon the occurrence of a Corporate Transaction,
except to the extent: (i) any such repurchase right is expressly assigned to
the successor corporation (or parent thereof) in connection with the Corporate
Transaction or (ii) such termination is precluded by other limitations imposed
by the Plan Administrator at the time the repurchase right is issued.
3. The Plan Administrator shall have the discretionary
authority, exercisable either before or after the Optionee's cessation of
Service, to cancel the Corporation's outstanding repurchase rights with
respect to one or more shares purchased or purchasable by the Optionee under
this Discretionary Option Grant Program and thereby accelerate the vesting of
such shares in whole or in part at any time.
II. INCENTIVE OPTIONS
The terms and conditions specified below shall be applicable to
all Incentive Options granted under this Article Two. Incentive Options may
only be granted to individuals who are Employees. Options which are
specifically designated as Non-Statutory Options when issued under the Plan
shall NOT be subject to such terms and conditions.
A. DOLLAR LIMITATION. The aggregate Fair Market Value
(determined as of the respective date or dates of grant) of the Common Stock
for which one or more options granted to any Employee under this Plan (or any
other option plan of the Corporation or its parent or subsidiary corporations)
may for the first time become exercisable as incentive stock options under the
Federal tax laws during any one calendar year shall not exceed the sum of One
Hundred Thousand Dollars ($100,000). To the extent the Employee holds two (2)
or more such options which become exercisable for the first time in the same
calendar year, the foregoing limitation on the exercisability of such options
as incentive stock options under the Federal tax laws shall be applied on the
basis of the order in which such options are granted. Should the number of
shares of Common Stock for which any Incentive Option first becomes
exercisable in any calendar year exceed the applicable One Hundred Thousand
Dollar ($100,000) limitation, then that option may nevertheless be exercised
in such calendar year for the excess number of shares as a non-statutory
option under the Federal tax laws.
B. 10% STOCKHOLDER. If any individual to whom an Incentive
Option is granted is the owner of stock (as determined under Section 424(d) of
the Code) possessing ten percent (10%) or more of the total combined voting
power of all classes of stock of the Corporation or any one of its parent or
subsidiary corporations, then the exercise price per share shall not be less
than one hundred ten percent (110%) of the Fair Market Value per share of
Common Stock on the grant date, and the option term shall not exceed five (5)
years, measured from the grant date.
Except as modified by the preceding provisions of this Section
II, the provisions of Articles One, Two and Five of the Plan shall apply to
all Incentive Options granted hereunder.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL
13.
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A. In the event of any Corporate Transaction, each option
which is at the time outstanding under this Article Two shall automatically
accelerate so that each such option shall, immediately prior to the specified
effective date for the Corporate Transaction, become fully exercisable with
respect to the total number of shares of Common Stock at the time subject to
such option and may be exercised for all or any portion of such shares.
However, an outstanding option under this Article Two shall NOT so accelerate
if and to the extent: (i) such option is, in connection with the Corporate
Transaction, either to be assumed by the successor corporation or parent
thereof or to be replaced with a comparable option to purchase shares of the
capital stock of the successor corporation or parent thereof, (ii) such option
is to be replaced with a cash incentive program of the successor corporation
which preserves the option spread existing at the time of the Corporate
Transaction and provides for subsequent payout in accordance with the same
vesting schedule applicable to such option or (iii) the acceleration of such
option is subject to other limitations imposed by the Plan Administrator at
the time of the option grant. The determination of option comparability under
clause (i) above shall be made by the Plan Administrator, and its
determination shall be final, binding and conclusive.
B. Immediately following the consummation of the Corporate
Transaction, all outstanding options under this Article Two shall terminate
and cease to remain outstanding, except to the extent assumed by the successor
corporation or parent company.
C. Each outstanding option under this Article Two which is
assumed in connection with the Corporate Transaction or is otherwise to
continue in effect shall be appropriately adjusted, immediately after such
Corporate Transaction, to apply and pertain to the number and class of
securities which would have been issued to the option holder, in consummation
of such Corporate Transaction, had such person exercised the option
immediately prior to such Corporate Transaction. Appropriate adjustments
shall also be made to the exercise price payable per share, PROVIDED the
aggregate exercise price payable for such securities shall remain the same.
In addition, the class and number of securities available for issuance under
the Plan following the consummation of the Corporate Transaction shall be
appropriately adjusted.
D. The Plan Administrator shall have the discretion,
exercisable either at the time the option is granted or at any time while the
option remains outstanding, to provide (upon such terms as it may deem
appropriate) for (i) the automatic acceleration of one or more outstanding
options granted under the Plan which are assumed or replaced in the Corporate
Transaction and do not otherwise accelerate at that time and/or (ii) the
subsequent termination of one or more of the Corporation's outstanding
repurchase rights which are assigned in connection with the Corporate
Transaction and do not otherwise terminate at that time, in the event
Optionee's Service should subsequently terminate within a designated period
following such Corporate Transaction.
E. The Plan Administrator shall have the discretionary
authority, exercisable either at the time the option is granted or at any time
while the option remains outstanding, to provide for the automatic
acceleration of one or more outstanding options under this Article Two (and
the immediate termination of one or more of the Corporation's outstanding
repurchase rights
14.
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under this Article Two) upon the occurrence of a Change in Control. The Plan
Administrator shall also have full power and authority to condition any such
option acceleration (and the termination of any outstanding repurchase rights)
upon the subsequent termination of the Optionee's Service within a specified
period following the Change in Control.
F. Any options accelerated in connection with the Change in
Control shall remain fully exercisable until the expiration or sooner
termination of the option term.
G. The grant of options under this Article Two shall in no
way affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.
H. The portion of any Incentive Option accelerated under this
Section III in connection with a Corporate Transaction or Change in Control
shall remain exercisable as an incentive stock option under the Federal tax
laws only to the extent the dollar limitation of Section II of this Article
Two is not exceeded. To the extent such dollar limitation is exceeded, the
accelerated portion of such option shall be exercisable as a non-statutory
option under the Federal tax laws.
IV. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at
any time and from time to time, with the consent of the affected Optionees,
the cancellation of any or all outstanding options under this Article Two and
to grant in substitution new options under the Plan covering the same or
different numbers of shares of Common Stock but with an exercise price per
share not less than (i) eighty-five percent (85%) of the Fair Market Value per
share of Common Stock on the new grant date or (ii) one hundred percent (100%)
of such Fair Market Value in the case of an Incentive Option.
V. STOCK APPRECIATION RIGHTS
A. Provided and only if the Plan Administrator determines in
its discretion to implement the stock appreciation right provisions of this
Section V, one or more Optionees may be granted the right, exercisable upon
such terms and conditions as the Plan Administrator may establish, to
surrender all or part of an unexercised option under this Article Two in
exchange for a distribution from the Corporation in an amount equal to the
excess of (i) the Fair Market Value (on the option surrender date) of the
number of shares in which the Optionee is at the time vested under the
surrendered option (or surrendered portion thereof) over (ii) the aggregate
exercise price payable for such vested shares.
B. No surrender of an option shall be effective hereunder
unless it is approved by the Plan Administrator, either at the time of the
option surrender or at any earlier time. If the surrender is so approved,
then the distribution to which the Optionee shall accordingly become
15.
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entitled under this Section V may be made in shares of Common Stock valued at
Fair Market Value on the option surrender date, in cash, or partly in shares
and partly in cash, as the Plan Administrator shall in its sole discretion
deem appropriate.
C. One or more officers of the Corporation subject to the
short-swing profit restrictions of the Federal securities laws may, in the
Plan Administrator's sole discretion, be granted limited stock appreciation
rights in tandem with their outstanding options under this Article Two. Upon
the occurrence of a Hostile Take-Over, the officer shall have a thirty
(30)-day period in which he or she may surrender any outstanding options with
such a limited stock appreciation right to the Corporation, to the extent such
option is at the time exercisable for fully vested shares of Common Stock.
The officer shall in return be entitled to a cash distribution from the
Corporation in an amount equal to the excess of (i) the Take-Over Price of the
vested shares of Common Stock at the time subject to each surrendered option
(or surrendered portion of such option) over (ii) the aggregate exercise price
payable for such shares. The cash distribution shall be made within five (5)
days following the date the option is surrendered to the Corporation. The
Plan Administrator shall pre-approve, at the time the limited right is
granted, the subsequent exercise of that right in accordance with the terms of
the grant and the provisions of this Section V. No additional approval of the
Plan Administrator or the Board shall be required at the time of the actual
option surrender and cash distribution. Any unsurrendered portion of the
option shall continue to remain outstanding and become exercisable in
accordance with the terms of the instrument evidencing such grant.
D. The shares of Common Stock subject to any option
surrendered for an appreciation distribution pursuant to this Section V shall
NOT be available for subsequent issuance under the Plan.
16.
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ARTICLE THREE
AUTOMATIC OPTION GRANT PROGRAM
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I. ELIGIBILITY
ELIGIBLE DIRECTORS. The individuals eligible to receive automatic
option grants pursuant to the July 19, 1995 restated provisions of this
Article Three program shall be limited to (i) those individuals who are
continuing to serve as non-employee Board members on July 19, 1995 and (ii)
those individuals who are first elected or appointed as non-employee Board
members on or after July 19, 1995. A non-employee Board member who has
previously been in the employ of the Corporation (or any parent or subsidiary)
shall not be eligible to receive an option grant under the Automatic Option
Grant Program at the time he or she first becomes a non-employee Board member,
but such individual shall be eligible to receive periodic option grants under
the Automatic Option Grant Program upon his or her continued service as a
non-employee Board member. Any non-employee Board member eligible to
participate in the Automatic Option Grant Program pursuant to the foregoing
criteria shall be designated an Eligible Director for purposes of this Article
Three.
II. TERMS AND CONDITIONS OF AUTOMATIC OPTION GRANTS
A. GRANT DATES. Option grants shall be made pursuant to the July
19, 1995 restated provisions of this Article Three on the dates specified
below:
INITIAL GRANT. Each individual who first becomes an Eligible
Director on or after July 19, 1995, whether through election by the
stockholders or appointment by the Board, shall automatically be granted,
at the time of such initial election or appointment (the "Initial Grant
Date"), a Non-Statutory Option to purchase 30,000 shares(2) of Common
Stock upon the terms and conditions of this Article Three.
ANNUAL GRANT. Each Eligible Director who receives an initial
30,000-share option grant shall automatically be granted, on each
successive anniversary of the Initial Grant Date on which he or she
continues to serve as an Eligible Director, beginning with the fourth
anniversary of such Initial Grant Date, a Non-Statutory Option to
purchase an additional 7,500 shares(3) of Common Stock upon the terms and
conditions of this Article
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(2) This number reflects the 3-for-2 split of the Common Stock effected by
the Corporation on November 20, 1995.
(3) This number reflects the 3-for-2 split of the Common Stock effected by
the Corporation on November 20, 1995.
17.
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Three. In addition, each individual who is an Eligible Director on July
19, 1995 but who is not otherwise to receive an initial 30,000-share
grant on such date shall automatically be granted, on July 19, 1995 and
each subsequent anniversary of that grant date on which he or she
continues to serve as an Eligible Director, a Non-Statutory Option to
purchase an additional 7,500 shares of Common Stock upon the terms and
conditions of this Article Three. Any Eligible Director previously in
the Corporation's employ shall receive his or her initial 7,500-share
option grant under this Article Three at the first Annual Stockholders
Meeting at which he is she is elected as a non-employee Board member and
shall automatically be granted, on the date of each succeeding Annual
Stockholders Meeting at which he or she is re-elected as a non-employee
Board member, a Non-Statutory Option to purchase an additional 7,500
shares of Common Stock upon the terms and conditions of this Article
Three.
There shall be no limit on the number of such 7,500-share option
grants any one Eligible Director may receive over his or her period of Board
service. The number of shares for which the automatic option grants are to be
made to each newly-elected or continuing Eligible Director shall be subject to
periodic adjustment pursuant to the applicable provisions of Section VI.C. of
Article One.
B. EXERCISE PRICE. The exercise price per share of Common Stock
subject to each automatic option grant made under this Article Three shall be
equal to one hundred percent (100%) of the Fair Market Value per share of
Common Stock on the automatic grant date.
C. PAYMENT. The exercise price shall be payable in one of the
alternative forms specified below:
1. full payment in cash or check made payable to the
Corporation's order;
2. full payment in shares of Common Stock held for
the requisite period necessary to avoid a charge to the Corporation's
earnings for financial reporting purposes and valued at Fair Market
Value on the Exercise Date;
3. full payment in a combination of shares of Common
Stock held for the requisite period necessary to avoid a charge to the
Corporation's earnings for financial reporting purposes and valued at
Fair Market Value on the Exercise Date and cash or check made payable
to the Corporation's order; or
4. full payment through a sale and remittance
procedure pursuant to which the non-employee Board member shall
provide concurrent irrevocable written instructions (i) to a
Corporation-designated brokerage firm to effect the immediate sale of
the purchased shares and remit to the Corporation, out of the sale
proceeds available on the settlement date, sufficient funds to cover
the aggregate exercise price payable for the purchased shares and (ii)
to the
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Corporation to deliver the certificates for the purchased shares directly
to such brokerage firm in order to complete the sale transaction.
D. OPTION TERM. Each automatic grant under this Article Three
shall have a maximum term of ten (10) years measured from the automatic grant
date.
E. EXERCISABILITY. Option grants made under this Article Three
shall become exercisable as specified below:
INITIAL GRANT. Each initial 30,000-share automatic grant shall
become exercisable in four (4) successive equal annual installments upon
the Optionee's completion of each year of Board service over the four
(4)-year period measured from the Initial Grant Date.
ANNUAL GRANT. Each annual 7,500-share automatic grant shall
become exercisable upon the Optionee's completion of one (1) year of Board
service measured from the grant date.
Each option granted under this Article Three shall automatically
accelerate and become fully exercisable for all of the shares of Common Stock at
the time subject to the option:
- should the Optionee cease to serve as a Board member by
reason of death or Permanent Disability, or
- should there occur an acceleration event specified in
Section III of this Article Three.
F. LIMITED TRANSFERABILITY. During the lifetime of the Optionee,
each automatic option grant, together with the limited stock appreciation
right pertaining to such option, shall be exercisable only by the Optionee and
shall not be assignable or transferable by the Optionee other than a transfer
of the option to one or more immediate family members or a trust established
exclusively for one or more such family members. The assigned portion of may
only be exercised by the person or persons who acquire a proprietary interest
in the option pursuant to the assignment. The terms applicable to the
assigned portion shall be the same as those in effect for the option
immediately prior to such assignment and shall be set forth in such documents
issued to the assignee as the Plan Administrator may deem fit.
G. TERMINATION OF BOARD SERVICE.
1. Should the Optionee cease to serve as a Board member for
any reason other than death or Permanent Disability while holding one or more
automatic option grants under this Article Three, then each of those options
may, during the twelve (12)-month period measured from the date of such
cessation of Board service (the "Post-Service Exercise Period"), be exercised
in accordance with the following parameters:
19.
<PAGE>
INITIAL 30,000-SHARE GRANT
--------------------------
a. Should the Optionee cease Board service prior to the
fourth anniversary of the Initial Grant Date, then the Optionee may,
at any time during the Post-Service Exercise Period, exercise the
option for any or all of the option shares for which the option is
exercisable at the time of such cessation of Board service. In
addition, the option shall become exercisable for an additional
twenty-five percent (25%) of the option shares on the next anniversary
of the Initial Grant Date following the Optionee's cessation of Board
service and shall remain so exercisable until the expiration date of
the Post-Service Exercise Period.
b. If the Optionee ceases Board service on or after the
fourth anniversary of the Initial Grant Date, then the Optionee may,
at any time during the Post-Service Exercise Period, exercise the
option for any or all of the option shares for which the option is
exercisable at the time of such cessation of Board service.
c. However, the option shall, immediately upon the
Optionee's cessation of Board service, terminate and cease to be
outstanding with respect to any and all option shares for which the
option is not otherwise at that time exercisable or for which it is
not otherwise to become exercisable in accordance with clause a.
above.
ANNUAL 7,500-SHARE GRANT
------------------------
a. The option shall become exercisable for all of the
option shares on the first anniversary of the grant date, whether or
not the Optionee continues in Board service, and shall remain so
exercisable for any or all of those shares until the expiration date
of the Post-Service Exercise Period.
b. Should the Optionee die after his or her cessation of
Board service but while holding one or more automatic option grants
under this Article Three, then the personal representative of the
Optionee's estate or the person or persons to whom the option is
transferred pursuant to the Optionee's will or in accordance with the
laws of descent and distribution shall have the remainder of the
applicable Post-Service Exercise Period in which to exercise each such
option in accordance with the parameters established for the Optionee
in Paragraph 1.
c. Should the Optionee cease to serve as a Board member by
reason of death or Permanent Disability while holding one or more
automatic option grants under this Article Three, then such individual
(or the personal representative of the Optionee's estate or by the
person or persons to whom the option is transferred pursuant to the
Optionee's will or in accordance with the laws of descent and
distribution) shall have a twelve (12)-month period following the
20.
<PAGE>
date of such cessation of Board service in which to exercise each such
option for any or all of the option shares at the time subject to the
option, whether or not the option would otherwise at that time be
exercisable for those shares.
2. In no event shall any automatic grant under this Article
Three remain exercisable after the expiration date of the ten (10)-year option
term.
H. STOCKHOLDER RIGHTS. The holder of an automatic option grant
under this Article Three shall have none of the rights of a stockholder with
respect to any shares subject to such option until such individual shall have
exercised the option and paid the exercise price for the purchased shares.
I. REMAINING TERMS. The remaining terms and conditions of each
automatic option grant shall be as set forth in the form Automatic Stock
Option Agreement attached as Exhibit A.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. In the event of any Corporate Transaction, each Article Three
option, to the extent outstanding at the time but not otherwise fully
exercisable, shall automatically accelerate so that each such option shall,
immediately prior to the specified effective date for the Corporate
Transaction, become exercisable for all of the shares of Common Stock at the
time subject to such option and may be exercised for all or any portion of
such shares as fully-vested shares. Immediately following the consummation of
the Corporate Transaction, all automatic option grants under this Article
Three shall terminate and cease to be outstanding, except to the extent
assumed by the acquiring company (or parent thereof).
B. In connection with any Change in Control of the Corporation,
each Article Three option, to the extent outstanding at the time but not
otherwise fully exercisable, shall automatically accelerate so that each such
option shall, immediately prior to the specified effective date for the Change
in Control, become exercisable for all of the shares of Common Stock at the time
subject to such option and may be exercised for all or any portion of such
shares as fully-vested shares. Each such option shall remain so exercisable for
all the option shares following the Change in Control, until the expiration or
sooner termination of the option term.
C. Upon the occurrence of a Hostile Take-Over, the Optionee
shall have a thirty (30)-day period in which to surrender to the Corporation
each Article Three option held by him or her. The Optionee shall in return be
entitled to a cash distribution from the Corporation in an amount equal to the
excess of (i) the Take-Over Price of the shares of Common Stock at the time
subject to the surrendered option (whether or not the option is otherwise at the
time exercisable for those shares) over (ii) the aggregate exercise price
payable for such shares. Such cash distribution shall be paid within five (5)
days following the surrender of the option to
21.
<PAGE>
the Corporation. At the time of each Article Three option grant, the Board
shall concurrently pre-approve any subsequent surrender of that option in
accordance with the provisions of this Section III.C, and no additional
approval of the Board or any Plan Administrator shall accordingly be required
at the time of the actual option surrender and cash distribution. The shares
of Common Stock subject to each option surrendered in connection with the
Hostile Take-Over shall NOT be available for subsequent issuance under the
Plan.
D. The automatic option grants outstanding under this Article
Three shall in no way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure
or to merge, consolidate, dissolve, liquidate or sell or transfer all or any
part of its business or assets.
22.
<PAGE>
ARTICLE FOUR
STOCK ISSUANCE PROGRAM
----------------------
I. TERMS AND CONDITIONS OF STOCK ISSUANCES
Shares of Common Stock may be issued under the Stock Issuance
Program through direct and immediate purchases without any intervening stock
option grants. The issued shares shall be evidenced by a Stock Issuance
Agreement ("Issuance Agreement") that complies with the terms and conditions
of this Article Four.
A. CONSIDERATION.
1. Shares of Common Stock drawn from the Corporation's
authorized but unissued shares of Common Stock ("Newly Issued Shares") shall
be issued under the Stock Issuance Program for one or more of the following
items of consideration which the Plan Administrator may deem appropriate in
each individual instance:
a. full payment in cash or check made payable to
the Corporation's order;
b. a promissory note payable to the Corporation's order
in one or more installments, which may be subject to cancellation in
whole or in part upon terms and conditions established by the Plan
Administrator; or
c. past services rendered to the Corporation or
any parent or subsidiary corporation.
2. Newly Issued Shares may, in the absolute discretion of the
Plan Administrator, be issued for consideration with a value less than one
hundred percent (100%) of the Fair Market Value of such shares at the time of
issuance, but in no event less than eighty-five percent (85%) of such Fair
Market Value.
3. Shares of Common Stock reacquired by the Corporation and
held as treasury shares ("Treasury Shares") may be issued under the Stock
Issuance Program for such consideration (including one or more of the items of
consideration specified in subparagraph 1 above) as the Plan Administrator may
deem appropriate, whether such consideration is in an amount less than, equal
to or greater than the Fair Market Value of the Treasury Shares at the time of
issuance. Treasury Shares may, in lieu of any cash consideration, be issued
subject to such vesting requirements tied to the Participant's period of
future Service or the Corporation's attainment of specified performance
objectives as the Plan Administrator may establish at the time of issuance.
23.
<PAGE>
B. VESTING PROVISIONS.
1. Shares of Common Stock issued under the Stock Issuance
Program may, in the absolute discretion of the Plan Administrator, be fully
and immediately vested upon issuance or may vest in one or more installments
over the Participant's period of Service. The elements of the vesting
schedule applicable to any unvested shares of Common Stock issued under the
Stock Issuance Program, namely:
a. the Service period to be completed by the
Participant or the performance objectives to be achieved by the
Corporation,
b. the number of installments in which the
shares are to vest,
c. the interval or intervals (if any) which are
to lapse between installments, and
d. the effect which death, Permanent Disability
or other event designated by the Plan Administrator is to have upon
the vesting schedule,
shall be determined by the Plan Administrator and incorporated into the
Issuance Agreement executed by the Corporation and the Participant at the time
such unvested shares are issued.
2. The Participant shall have full stockholder rights with
respect to any shares of Common Stock issued to him or her under the Plan,
whether or not his or her interest in those shares is vested. Accordingly,
the Participant shall have the right to vote such shares and to receive any
regular cash dividends paid on such shares. Any new, additional or different
shares of stock or other property (including money paid other than as a
regular cash dividend) which the Participant may have the right to receive
with respect to his or her unvested shares by reason of any stock dividend,
stock split, recapitalization, combination of shares, exchange of shares or
other change affecting the outstanding Common Stock as a class without the
Corporation's receipt of consideration or by reason of any Corporate
Transaction shall be issued, subject to (i) the same vesting requirements
applicable to his or her unvested shares and (ii) such escrow arrangements as
the Plan Administrator shall deem appropriate.
3. Should the Participant cease to remain in Service while
holding one or more unvested shares of Common Stock under the Stock Issuance
Program, then those shares shall be immediately surrendered to the Corporation
and made available for subsequent issuance. The Participant shall have no
further stockholder rights with respect to those shares. To the extent the
surrendered shares were previously issued to the Participant for consideration
paid in cash or cash equivalent (including the Participant's purchase-money
promissory note), the Corporation shall repay to the Participant the cash
consideration paid for the surrendered shares and shall cancel the unpaid
principal balance of any outstanding purchase-money note of the Participant
attributable to such surrendered shares. The surrendered shares may, at the
Plan
24.
<PAGE>
Administrator's discretion, be retained by the Corporation as Treasury Shares
or may be retired to authorized but unissued share status.
4. The Plan Administrator may in its discretion elect to
waive the surrender and cancellation of one or more unvested shares of Common
Stock (or other assets attributable thereto) which would otherwise occur upon
the non-completion of the vesting schedule applicable to such shares. Such
waiver shall result in the immediate vesting of the Participant's interest in
the shares of Common Stock as to which the waiver applies. Such waiver may be
effected at any time, whether before or after the Participant's cessation of
Service or the attainment or non-attainment of the applicable performance
objectives.
II. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. Upon the occurrence of any Corporate Transaction, all unvested
shares of Common Stock at the time outstanding under this Stock Issuance
Program shall immediately vest in full and the Corporation's repurchase rights
shall terminate, except to the extent: (i) any such repurchase right is
expressly assigned to the successor corporation (or parent thereof) in
connection with the Corporate Transaction or (ii) such termination is
precluded by other limitations imposed in the Issuance Agreement.
B. The Plan Administrator shall have the discretionary authority,
exercisable either at the time the stock issuance is made or at any time while
that issuance remains outstanding, to provide for the automatic vesting of one
or more unvested shares outstanding under the Stock Issuance Program (and the
immediate termination of the Corporation's repurchase rights with respect to
those shares) at the time of a Change in Control. The Plan Administrator
shall also have full power and authority to condition any such accelerated
vesting upon the subsequent termination of the Participant's Service within a
specified period following the Change in Control.
III. TRANSFER RESTRICTIONS/SHARE ESCROW
A. Unvested shares may, in the Plan Administrator's discretion, be
held in escrow by the Corporation until the Participant's interest in such
shares vests or may be issued directly to the Participant with restrictive
legends on the certificates evidencing such unvested shares. To the extent an
escrow arrangement is utilized, the unvested shares and any securities or
other assets distributed with respect to such shares (other than regular cash
dividends) shall be delivered in escrow to the Corporation to be held until
the Participant's interest in such shares (or the distributed securities or
assets) vests. If the unvested shares are issued directly to the Participant,
the restrictive legend on the certificates for such shares shall read
substantially as follows:
25.
<PAGE>
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE UNVESTED AND ARE
ACCORDINGLY SUBJECT TO (I) CERTAIN TRANSFER RESTRICTIONS AND (II)
CANCELLATION OR REPURCHASE IN THE EVENT THE REGISTERED HOLDER (OR
HIS/HER PREDECESSOR IN INTEREST) CEASES TO REMAIN IN THE CORPORATION'S
SERVICE. SUCH TRANSFER RESTRICTIONS AND THE TERMS AND CONDITIONS OF
SUCH CANCELLATION OR REPURCHASE ARE SET FORTH IN A STOCK ISSUANCE
AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED HOLDER (OR
HIS/HER PREDECESSOR IN INTEREST) DATED ______________, 199_, A COPY
OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION."
B. The Participant shall have no right to transfer any unvested
shares of Common Stock issued to him or her under the Stock Issuance Program.
For purposes of this restriction, the term "transfer" shall include (without
limitation) any sale, pledge, assignment, encumbrance, gift or other
disposition of such shares, whether voluntary or involuntary. Upon any such
attempted transfer, the unvested shares shall immediately be cancelled in
accordance with substantially the same procedure in effect under Section I.B.3
of this Article Four, and neither the Participant nor the proposed transferee
shall have any rights with respect to such cancelled shares. However, the
Participant shall have the right to make a gift of unvested shares acquired
under the Stock Issuance Program to his or her spouse or issue, including
adopted children, or to a trust established for such spouse or issue, provided
the donee of such shares delivers to the Corporation a written agreement to be
bound by all the provisions of the Stock Issuance Program and the Issuance
Agreement applicable to the gifted shares.
26.
<PAGE>
ARTICLE FIVE
MISCELLANEOUS
-------------
I. LOANS OR INSTALLMENT PAYMENTS
A. The Plan Administrator may, in its discretion, assist any
Optionee or Participant, to the extent such Optionee or Participant is an
Employee (including an Optionee or Participant who is an officer of the
Corporation), in the exercise of one or more options granted to such Optionee
under the Discretionary Option Grant Program or the purchase of one or more
shares issued to such Participant under the Stock Issuance Program, including
the satisfaction of any Federal, state and local income and employment tax
obligations arising therefrom, by (i) authorizing the extension of a loan from
the Corporation to such Optionee or Participant or (ii) permitting the
Optionee or Participant to pay the exercise price or purchase price for the
purchased shares in installments over a period of years. The terms of any
loan or installment method of payment (including the interest rate and terms
of repayment) shall be upon such terms as the Plan Administrator specifies in
the applicable option or issuance agreement or otherwise deems appropriate
under the circumstances. Loans or installment payments may be authorized with
or without security or collateral. However, the maximum credit available to
the Optionee or Participant may not exceed the exercise or purchase price of
the acquired shares (less the par value of such shares) plus any Federal,
state and local income and employment tax liability incurred by the Optionee
or Participant in connection with the acquisition of such shares.
B. The Plan Administrator may, in its absolute discretion,
determine that one or more loans extended under this financial assistance
program shall be subject to forgiveness by the Corporation in whole or in part
upon such terms and conditions as the Plan Administrator may deem appropriate.
II. AMENDMENT OF THE PLAN AND AWARDS
A. The Board has complete and exclusive power and authority to
amend or modify the Plan (or any component thereof) in any or all respects
whatsoever. However, no such amendment or modification shall adversely affect
rights and obligations with respect to options at the time outstanding under
the Plan, nor adversely affect the rights of any Participant with respect to
Common Stock issued under the Stock Issuance Program prior to such action,
unless the Optionee or Participant consents to such amendment. In addition,
certain amendments may require stockholder approval in accordance with
applicable laws and regulations.
B. (i) Options to purchase shares of Common Stock may be granted
under the Discretionary Option Grant Program and (ii) shares of Common Stock
may be issued under the Stock Issuance Program, which are in both instances in
excess of the number of shares then available for issuance under the Plan,
provided any excess shares actually issued under the
27.
<PAGE>
Discretionary Option Grant Program or the Stock Issuance Program are held in
escrow until stockholder approval is obtained for a sufficient increase in the
number of shares available for issuance under the Plan. If such stockholder
approval is not obtained within twelve (12) months after the date the first
such excess option grants or excess share issuances are made, then (i) any
unexercised excess options shall terminate and cease to be exercisable and
(ii) the Corporation shall promptly refund the purchase price paid for any
excess shares actually issued under the Plan and held in escrow, together with
interest (at the applicable Short Term Federal Rate) for the period the shares
were held in escrow.
III. TAX WITHHOLDING
A. The Corporation's obligation to deliver shares of Common Stock
upon the exercise of stock options for such shares or the vesting of such
shares under the Plan shall be subject to the satisfaction of all applicable
Federal, state and local income and employment tax withholding requirements.
B. The Plan Administrator may, in its discretion and in accordance
with the provisions of this Section III and such supplemental rules as the
Plan Administrator may from time to time adopt (including the applicable
safe-harbor provisions of Securities and Exchange Commission Rule 16b-3),
provide any or all holders of Non-Statutory Options (other than the automatic
option grants made pursuant to Article Three of the Plan) or unvested shares
under the Plan with the right to use shares of the Corporation's Common Stock
in satisfaction of all or part of the Federal, state and local income and
employment tax liabilities incurred by such holders in connection with the
exercise of their options or the vesting of their shares (the "Taxes"). Such
right may be provided to any such holder in either or both of the following
formats:
STOCK WITHHOLDING: The holder of the Non-Statutory Option or
unvested shares may be provided with the election to have the Corporation
withhold, from the shares of Common Stock otherwise issuable upon the
exercise of such Non-Statutory Option or the vesting of such shares, a
portion of those shares with an aggregate Fair Market Value to exceed one
hundred percent (100%) of the applicable Taxes.
STOCK DELIVERY: The Plan Administrator may, in its discretion,
provide the holder of the Non-Statutory Option or the unvested shares with
the election to deliver to the Corporation, at the time the Non-Statutory
Option is exercised or the shares vest, one or more shares of Common Stock
previously acquired by such individual (other than in connection with the
option exercise or share vesting triggering the Taxes) with an aggregate
Fair Market Value not to exceed one hundred percent (100%) of the Taxes
incurred in connection with such option exercise or share vesting.
IV. EFFECTIVE DATE AND TERM OF PLAN
A. This Plan became effective immediately upon adoption by the
Board of Directors of Gasonics California. This Plan was subsequently assumed
by the Corporation in
28.
<PAGE>
connection with the Merger. Stock options and share issuances may be made
under Articles Two and Four of the Plan from and after the Effective Date.
B. The Plan was amended by the Board on September 21, 1994 to (i)
increase the number of shares of Common Stock issuable under the Plan by an
additional 500,000 shares(4) and (ii) increase the maximum number of shares of
Common Stock for which any one individual may be granted stock options and
direct stock issuances under the Plan by an additional 250,000 shares(4) (the
"1994 Amendment"). The stockholders approved the 1994 Amendment at the 1995
Annual Meeting which was held on February 14, 1995. The Plan was subsequently
amended and restated by the Board on July 19, 1995 to revise the provisions of
the Automatic Option Grant Program in effect under Article III (the "June 1995
Amendment") and was amended in November 1995 to increase the number of shares
available for issuance under the Plan by an additional 750,000 shares (the
"November 1995 Amendment"). Both the June 1995 Amendment and the November
1995 Amendment were approved by the stockholders at the 1996 Annual Meeting.
C. The Plan was amended on February 1, 1996 to authorize the
appointment of the Secondary Committee for purposes of administering the
Discretionary Option Grant and Stock Issuance Programs with respect to
individuals who are non Section 16 Insiders. The Primary Committee shall also
retain separate but concurrent authority to administer the Discretionary
Option Grant and Stock Issuance Programs with respect to such individuals. The
Plan was subsequently amended on December 17, 1996 (the "December 1996
Amendment") to effect the following changes: (i) increase the number of
shares of Common Stock authorized for issuance over the term of the Plan by an
additional 500,000 shares, (ii) render the non-employee Board members eligible
to receive option grants and direct stock issuances under the Discretionary
Option Grant and Stock Issuance Programs, (iii) allow unvested shares issued
under the Plan and subsequently repurchased by the Corporation at the option
exercise price or issue price paid per share to be reissued under the Plan and
(iv) effect a series of technical changes to the provisions of the Plan in
order to take advantage of the recent amendments to Rule 16b-3 of the
Securities Exchange Act of 1934 which exempts certain officer and director
transactions under the Plan from the short-swing liability provisions of the
federal securities laws. The December 1996 Amendment was approved by the
stockholders the 1997 Annual Meeting.
D. The Plan was again amended by the Board on January 20, 1998
to increase the number of shares of Common Stock issuable under the Plan by an
additional 400,000 shares, from 2,700,000 to 3,100,000 shares (the "January 1998
Amendment"), subject to stockholder approval at the 1998 Annual Meeting. No
option grants made on the basis of the January 1998 Amendment shall become
exercisable in whole or in part unless and until the January 1998
- --------------------
(4) The numbers DO NOT reflect the 3-for-2 split of the Common Stock effected
by the Corporation on November 20, 1995.
29.
<PAGE>
Amendment is approved by the stockholders. Should such stockholder approval
not be obtained at the 1998 Annual Meeting, then each option grant made
pursuant to the January 1998 Amendment shall terminate and cease to remain
outstanding, and no further option grants shall be made on the basis of that
share increase. However, the provisions of the Plan as in effect immediately
prior to the January 1998 Amendment shall automatically be reinstated, and
option grants and direct stock issuances may thereafter continue to be made
pursuant to the reinstated provisions of the Plan. All option grants and
direct stock issuances made prior to the January 1998 Amendment shall remain
outstanding in accordance with the terms and conditions of the respective
instruments evidencing those options or issuances, and nothing in the January
1998 Amendment shall be deemed to modify or in any way affect those
outstanding options or issuances. Subject to the foregoing limitations, the
Plan Administrator may make option grants and direct stock issuances under the
Plan at any time before the date fixed herein for the termination of the Plan.
E. The Plan shall terminate upon the EARLIER of (i) December 31,
2003 or (ii) the date on which all shares available for issuance under the
Plan shall have been issued or cancelled pursuant to the exercise, surrender
or cash-out of the options granted under the Plan or the issuance of shares
(whether vested or unvested) under the Stock Issuance Program. If the date of
termination is determined under clause (i) above, then all option grants and
unvested share issuances outstanding on such date shall thereafter continue to
have force and effect in accordance with the provisions of the instruments
evidencing such grants or issuances.
V. USE OF PROCEEDS
A. Any cash proceeds received by the Corporation from the sale of
shares pursuant to option grants or share issuances under the Plan shall be
used for general corporate purposes.
VI. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any stock
option or stock appreciation right under the Plan, the issuance of any shares
under the Stock Issuance Program and the issuance of Common Stock upon the
exercise of the stock options or stock appreciation rights granted hereunder
shall be subject to the Corporation's procurement of all approvals and permits
required by regulatory authorities having jurisdiction over the Plan, the
stock options and stock appreciation rights granted under it and the Common
Stock issued pursuant to it.
B. No shares of Common Stock or other assets shall be issued or
delivered under this Plan unless and until there shall have been compliance
with all applicable requirements of Federal and state securities laws,
including the filing and effectiveness of the Form S-8 registration statement
for the shares of Common Stock issuable under the Plan, and all applicable
listing requirements of any securities exchange on which the Common Stock is
then listed for trading.
30.
<PAGE>
VII. NO EMPLOYMENT/SERVICE RIGHTS
Neither the action of the Corporation in establishing the Plan, nor
any action taken by the Plan Administrator hereunder, nor any provision of the
Plan shall be construed so as to grant any individual the right to remain in
the Service of the Corporation (or any parent or subsidiary corporation) for
any period of specific duration, and the Corporation (or any parent or
subsidiary corporation retaining the services of such individual) may
terminate such individual's Service at any time and for any reason, with or
without cause.
VIII. MISCELLANEOUS PROVISIONS
A. Except to the extent otherwise expressly provided in the Plan,
the right to acquire Common Stock or other assets under the Plan may not be
assigned, encumbered or otherwise transferred by any Optionee or Participant.
B. The provisions of the Plan relating to the exercise of options
and the vesting of shares shall be governed by the laws of the State of
California without resort to that State's conflict-of-laws rules, as such laws
are applied to contracts entered into and performed in such State.
C. The provisions of the Plan shall inure to the benefit of, and
be binding upon, the Corporation and its successors or assigns, whether by
Corporate Transaction or otherwise, and the Participants and Optionees, the
legal representatives of their respective estates, their respective heirs or
legatees and their permitted assignees.
31.
<PAGE>
EXHIBIT 99.2
GASONICS INTERNATIONAL CORPORATION
NOTICE OF GRANT OF STOCK OPTION
Notice is hereby given of the following stock option grant (the
"Option") to purchase shares of the Common Stock of GaSonics International
Corporation (the "Corporation"):
OPTIONEE: ___________________________
GRANT DATE: __________________________
EXERCISE PRICE: $_______ per share
NUMBER OF OPTION SHARES: ___________ shares
EXPIRATION DATE: _________________, 200__
TYPE OF OPTION: _____ Incentive Stock Option
_____ Non-Statutory Option
EXERCISE SCHEDULE: The Option shall become exercisable for twenty-five
percent (25%) of the Option Shares upon Optionee's completion of one
(1) year of Service (as defined in the attached Stock Option Agreement)
measured from the Grant Date and shall become exercisable for the
balance of the Option Shares in a series of three (3) equal and
successive annual installments upon Optionee's completion of each
additional year of Service thereafter. In no event shall the Option
become exercisable for any additional Option Shares following
Optionee's cessation of Service. However, in the event Optionee's
Service should terminate by reason of permanent disability (as defined
in the attached Stock Option Agreement), the Option shall immediately
become exercisable for an additional twenty-five percent (25%) of the
Option Shares.
Optionee understands and agrees that the Option is granted subject to
and in accordance with the express terms and conditions of the GaSonics
International Corporation 1994 Stock Option/Stock Issuance Plan (the "Plan").
Optionee further agrees to be bound by the terms and conditions of the Plan and
the terms and conditions of the Option as set forth in the Stock Option
Agreement attached hereto as Exhibit A. Optionee also acknowledges receipt of a
copy of the official prospectus for the Plan attached hereto as Exhibit B.
<PAGE>
NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this Agreement or in
the Plan shall confer upon Optionee any right to continue in Service for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Corporation (or any parent or subsidiary employing Optionee)
or Optionee, which rights are hereby expressly reserved by each, to terminate
Optionee's Service at any time for any reason whatsoever, with or without cause.
Dated:__________, 199__
GASONICS INTERNATIONAL CORPORATION
By:_______________________________
Title: ___________________________
__________________________________
OPTIONEE
Address: __________________________
________________
ATTACHMENTS:
EXHIBIT A: STOCK OPTION AGREEMENT
EXHIBIT B: PLAN SUMMARY AND PROSPECTUS
2
<PAGE>
EXHIBIT A
STOCK OPTION AGREEMENT
<PAGE>
EXHIBIT B
PLAN PROSPECTUS
<PAGE>
<PAGE>
EXHIBIT 99.10
INITIAL OPTION GRANT
GASONICS INTERNATIONAL CORPORATION
AUTOMATIC STOCK OPTION AGREEMENT
--------------------------------
RECITALS
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A. The Corporation has approved an automatic option grant program
under the 1994 Stock Option/Stock Issuance Plan (the "Plan"), pursuant to
which special option grants are to be made to eligible members of the
Corporation's Board of Directors (the "Board") at specified intervals over
their period of Board service in order to encourage such individuals to
remain in the Corporation's service.
B. Optionee is an eligible Board member and this Agreement is executed
pursuant to, and is intended to carry out the purposes of, the Plan in
connection with the automatic grant of a stock option to purchase shares of
the Corporation's common stock ("Common Stock") under the Plan.
C. The granted option is intended to be a non-statutory option which
does NOT meet the requirements of Section 422 of the Internal Revenue Code
and is designed to provide Optionee with a meaningful incentive to continue
to serve as a member of the Board.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms and conditions
set forth in this Agreement, there is hereby granted to Optionee, as of the
date of grant (the "Grant Date") specified in the accompanying Notice of
Grant of Automatic Stock Option (the "Grant Notice"), a stock option to
purchase up to that number of shares of Common Stock (the "Option Shares") as
is specified in the Grant Notice. The Option Shares shall be purchasable from
time to time during the option term at the price per share (the "Exercise
Price") specified in the Grant Notice.
2. OPTION TERM. This option shall have a maximum term of ten
(10) years measured from the Grant Date and shall expire at the close of
business on the Expiration Date specified in the Grant Notice, unless sooner
terminated under Paragraph 5, 7 or 8.
3. LIMITED TRANSFERABILITY. This option, together with the
special stock appreciation right provided under Paragraph 8.b, shall be
neither transferable nor assignable by Optionee, other than a transfer of
this option effected by will or by the laws of descent and distribution
following Optionee's death, and may be exercised, during Optionee's lifetime,
only by Optionee.
<PAGE>
4. EXERCISABILITY. This option shall become exercisable for the
Option Shares in one or more installments as specified in the Grant Notice.
As the option becomes exercisable for such installments, those installments
shall accumulate and the option shall remain exercisable for the accumulated
installments until the Expiration Date or sooner termination of the option
term under Paragraph 5, 7 or 8.
5. CESSATION OF BOARD SERVICE. Should Optionee's service as a
Board member cease while this option remains outstanding, then the option
term specified in Paragraph 2 shall terminate (and this option shall cease to
remain outstanding) prior to the Expiration Date in accordance with the
following provisions:
a. Should the Optionee cease to serve as a Board member for
any reason (other than death or permanent disability) prior to the
fourth anniversary of the Grant Date, then the Optionee shall have a
period of twelve (12) months measured from the date of such cessation of
Board service (the "Post-Service Exercise Period") in which to exercise
this option for any or all of the Option Shares for which the option is
exercisable at the time of such cessation of Board service. In
addition, the option shall become exercisable for an additional
twenty-five percent (25%) of the Option Shares on the next anniversary
of the Grant Date following the Optionee's cessation of Board service
and shall remain so exercisable until the expiration date of the
Post-Service Exercise Period.
b. Should the Optionee cease Board service for any reason on
or after the fourth anniversary of the Grant Date, then the Optionee may
at any time during the Post-Service Exercise Period exercise this option
for any or all of the Option Shares for which this option is exercisable
at the time of such cessation of Board service.
c. This option shall, immediately upon the Optionee's
cessation of Board service for any reason (other than death or permanent
disability), terminate and cease to be outstanding with respect to any
and all Option Shares for which this option is not otherwise at that
time exercisable or for which it is not otherwise to become exercisable
in accordance with clause a. of this Paragraph 5.
d. Should the Optionee die after his or her cessation of
Board service but while this option still remains outstanding, then the
personal representative of the Optionee's estate or the person or
persons to whom the option is transferred pursuant to the Optionee's
will or in accordance with the laws of descent and distribution shall
have the remainder of the Post-Service Exercise Period in which to
exercise this option in accordance with the parameters established for
the Optionee in clauses a. through c. of this Paragraph 5.
2.
<PAGE>
e. Should Optionee cease to serve as a Board member by
reason of death or permanent disability while this option remains
outstanding, then this option shall immediately accelerate and become
exercisable for all of the Option Shares at the time subject to this
option, and the Optionee (or the personal representative of the
Optionee's estate or by the person or persons to whom this option is
transferred pursuant to the Optionee's will or in accordance with the
laws of descent and distribution) shall have a twelve (12)-month period
following the date of such cessation of Board service in which to
exercise this option for any or all of those Option Shares.
f. In no event shall this option remain exercisable after
the specified Expiration Date of the ten (10)-year option term. Upon
the expiration of the applicable post-service exercise period under this
Paragraph 5 or (if earlier) upon the expiration of the ten (10)-year
option term, this option shall terminate and cease to be outstanding
with respect to any vested Option Shares for which this option has not
otherwise been exercised.
g. Optionee shall be deemed to be PERMANENTLY DISABLED if
Optionee is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment
expected to result in death or to be of continuous duration of twelve
(12) months or more.
6. ADJUSTMENT IN OPTION SHARES. Should any change be made to the
Common Stock issuable under the Plan by reason of any stock split, stock
dividend, recapitalization, combination of shares, exchange of shares or
other change affecting such Common Stock as a class without the Corporation's
receipt of consideration, then the number and class of securities purchasable
under this option and the Exercise Price payable per share shall be
appropriately adjusted to prevent the dilution or enlargement of Optionee's
rights hereunder; provided, however, the aggregate Exercise Price shall
remain the same.
7. CORPORATE TRANSACTION.
a. In the event of any of the following stockholder-approved
transactions to which the Corporation is a party (a "Corporate Transaction"):
a. a merger or consolidation in which the Corporation is not
the surviving entity, except for a transaction the principal purpose of
which is to change the state in which the Corporation is incorporated,
b. the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete
liquidation or dissolution of the Corporation, or
3.
<PAGE>
c. any reverse merger in which the Corporation is the
surviving entity but in which securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's
outstanding securities are transferred to a person or persons different
from the persons holding those securities immediately prior to such
merger,
this option, to the extent outstanding at such time but not
otherwise fully exercisable, shall automatically accelerate so that this
option shall, immediately prior to the effective date of the Corporate
Transaction, become exercisable for all of the Option Shares at the time
subject to this option and may be exercised for any or all of those Option
Shares as fully-vested shares of Common Stock. Immediately following the
consummation of the Corporate Transaction, this option shall terminate and
cease to be outstanding, except to the extent assumed by the successor
corporation (or parent thereof).
b. If this option is assumed in connection with a Corporate
Transaction, then this option shall be appropriately adjusted, immediately
after such Corporate Transaction, to apply and pertain to the number and
class of securities which would have been issued to the Optionee, in
consummation of such Corporate Transaction, had this option been exercised
option immediately prior to such Corporate Transaction. Appropriate
adjustments shall also be made to the Exercise Price payable per share;
provided, however, the aggregate Exercise Price payable for such securities
shall remain the same.
8. CHANGE IN CONTROL/HOSTILE TAKEOVER.
a. In the event of a Change in Control (as defined below),
the exercisability of this option, to the extent outstanding at such time but
not otherwise fully exercisable, shall automatically accelerate so that this
option shall, immediately prior to the effective date of the Change in
Control, become exercisable for all of the Option Shares at the time subject
to this option and may be exercised for any or all of those Option Shares as
fully-vested shares of Common Stock. This option shall remain exercisable
for such fully-vested Option Shares until the EARLIEST to occur of (i) the
specified Expiration Date of the option term, (ii) the sooner termination of
this option in accordance with Paragraph 5 or 7 or (iii) the surrender of
this option under Paragraph 8.b.
b. Provided this option has been outstanding for at least
six (6) months prior to the occurrence of a Hostile Take-Over (as defined
below), Optionee shall have an unconditional right (exercisable during the
thirty (30)-day period immediately following the consummation of such Hostile
Take-Over) to surrender this option to the Corporation in exchange for a cash
distribution from the Corporation in an amount equal to the excess of (i) the
Take-Over Price of the Option Shares at the time subject to the surrendered
option (whether or not this option is at the time exercisable for those
Option Shares) over (ii) the aggregate Exercise Price payable for such shares.
4.
<PAGE>
To exercise this limited stock appreciation right, Optionee
must, during the applicable thirty (30)-day exercise period, provide the
Corporation with written notice of the option surrender in which there is
specified the number of Option Shares as to which the Option is being
surrendered. Such notice must be accompanied by the return of Optionee's
copy of this Agreement, together with any written amendments to such
Agreement. The cash distribution shall be paid to Optionee within five (5)
days following such delivery date, and neither the approval of the Plan
Administrator nor the consent of the Board shall be required in connection
with the option surrender and cash distribution. Upon receipt of such cash
distribution, this option shall be cancelled with respect to the shares
subject to the surrendered option (or the surrendered portion), and Optionee
shall cease to have any further right to acquire those Option Shares under
this Agreement. However, should this option be surrendered for only a
portion of the Option Shares at the time subject to the option, a new stock
option agreement (substantially in the form of this Agreement) shall be
issued by the Corporation for the balance of the Option Shares for which this
option is not surrendered.
This limited stock appreciation right shall in all events
terminate upon the expiration or sooner termination of the option term and
may not be assigned or transferred by Optionee.
c. DEFINITIONS: For purposes of this Agreement, the following
definitions shall be in effect:
A CHANGE IN CONTROL shall be deemed to occur in the event:
- any person or related group of persons (other than
the Corporation or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Corporation) directly or
indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 of
the Securities Exchange Act of 1934 (the "1934 Act")) of securities
possessing more than fifty percent (50%) of the total combined voting power
of the Corporation's outstanding securities pursuant to a tender or exchange
offer made directly to the Corporation's stockholders which the Board does
not recommend such stockholders to accept, or
- there is a change in the composition of the Board over a
period of thirty-six (36) consecutive months or less such that a majority of
the Board members ceases, by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (i) have been
Board members continuously since the beginning of such period or (ii) have
been elected or nominated for election as Board members during such period by
at least a majority of the Board members described in clause (i) who were
still in office at the time such election or nomination was approved by the
Board.
A HOSTILE TAKE-OVER shall be deemed to occur in the event (i)
any person or related group of persons (other than the Corporation or a
person that directly or indirectly controls, is controlled by, or is under
common control with, the Corporation) directly or indirectly acquires
beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of
securities
5.
<PAGE>
possessing more than fifty percent (50%) of the total combined voting power
of the Corporation's outstanding securities pursuant to a tender or exchange
offer made directly to the Corporation's stockholders which the Board does
not recommend such stockholders to accept AND (ii) more than fifty percent
(50%) of the securities so acquired in such tender or exchange offer are
accepted from holders other than the officers and directors of the
Corporation subject to the short-swing profit restrictions of Section 16 of
the 1934 Act.
The TAKE-OVER PRICE per share shall be deemed to be equal to
the GREATER of (i) the Fair Market Value per share of Common Stock on the
date the option is surrendered to the Corporation in connection with a
Hostile Take-Over, as determined in accordance with the valuation provisions
of Paragraph 9.b, or (ii) the highest reported price per share of Common
Stock paid by the tender offeror in effecting the Hostile Take-Over.
9. MANNER OF EXERCISING OPTION
a. In order to exercise this option for all or any part of
the Option Shares for which the option is at the time exercisable, Optionee
(or in the case of exercise after Optionee's death, Optionee's executor,
administrator, heir or legatee, as the case may be) must take the following
actions:
(1) Execute and deliver to the Corporation an exercise
notice ("Notice of Exercise") for the Option Shares for which the option is
exercised.
(2) Pay the aggregate Exercise Price for the purchased
shares in one of the following alternative forms:
(a) full payment in cash or check made payable to
the Corporation's order;
(b) full payment in shares of Common Stock held by
Optionee for the requisite period necessary to avoid a charge to
the Corporation's earnings for financial reporting purposes and
valued at Fair Market Value on the Exercise Date (as defined
below);
(c) full payment in a combination of shares of
Common Stock held for the requisite period necessary to avoid a
charge to the Corporation's earnings for financial reporting
purposes and valued at Fair Market Value on the Exercise Date and
cash or check made payable to the Corporation's order; or
(d) full payment effected through a broker-dealer
sale and remittance procedure pursuant to which Optionee shall
provide concurrent irrevocable written instructions (i) to a
Corporation-designated brokerage firm to effect the immediate sale
of the shares purchased under
6.
<PAGE>
the option and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the
aggregate Exercise Price payable for those shares and (ii) to the
Corporation to deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the sale.
(3) Appropriate documentation evidencing the right to
exercise this option shall be furnished the Corporation if the person or
persons exercising the option is other than Optionee.
b. For purposes of subparagraph 9.a. above and for all other
valuation purposes under this Agreement, the Fair Market Value per share of
Common Stock on any relevant date shall be determined in accordance with the
following provisions:
(1) If the Common Stock is not at the time listed or
admitted to trading on any national securities exchange but is traded on
the Nasdaq National Market, the Fair Market Value shall be the closing
selling price per share on the date in question, as such price is
reported by the National Association of Securities Dealers on the Nasdaq
National Market or any successor system. If there is no reported closing
selling price for the Common Stock on the date in question, then the
closing selling price on the last preceding date for which such quotation
exists shall be determinative of Fair Market Value.
(2) If the Common Stock is at the time listed or admitted
to trading on any national securities exchange, then the Fair Market Value
shall be the closing selling price per share on the date in question on the
securities exchange determined by the Plan Administrator to be the primary
market for the Common Stock, as such price is officially quoted in the
composite tape of transactions on such exchange. If there is no reported
sale of Common Stock on such exchange on the date in question, then the
Fair Market Value shall be the closing selling price on the exchange on
the last preceding date for which such quotation exists.
c. The Exercise Date shall be the date on which the Exercise
Notice is delivered to the Secretary of the Corporation. Except to the
extent the sale and remittance procedure specified above is utilized in
connection with the exercise of the option, payment of the Exercise Price for
the purchased shares must accompany such notice.
d. As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or other person or
persons exercising this option) a certificate or certificates representing
the purchased Option Shares.
e. In no event may this option be exercised for any fractional
share.
7.
<PAGE>
10. STOCKHOLDER RIGHTS. The holder of this option shall not have
any of the rights of a stockholder with respect to the Option Shares until
such individual shall have exercised this option and paid the Exercise Price
for the purchased shares.
11. NO IMPAIRMENT OF RIGHTS. This Agreement shall not in any way
affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise make changes in its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets. Nor shall this Agreement in any way be construed or
interpreted so as to affect adversely or otherwise impair the right of the
Corporation or the stockholders to remove Optionee from the Board at any time
in accordance with the provisions of applicable law.
12. COMPLIANCE WITH LAWS AND REGULATIONS. The exercise of this
option and the issuance of the Option Shares upon such exercise shall be
subject to compliance by the Corporation and Optionee with all applicable
requirements of law relating thereto and with all applicable regulations of
any securities exchange on which shares of the Common Stock may be listed at
the time of such exercise and issuance.
13. SUCCESSORS AND ASSIGNS. Except to the extent otherwise
provided in Paragraph 3 or 7, the provisions of this Agreement shall inure to
the benefit of, and be binding upon, the successors, administrators, heirs,
legal representatives and assigns of Optionee and the Corporation's
successors and assigns.
14. DISCHARGE OF LIABILITY. The inability of the Corporation to
obtain approval from any regulatory body having authority deemed by the
Corporation to be necessary to the lawful issuance and sale of any Common
Stock pursuant to this option shall relieve the Corporation of any liability
with respect to the non-issuance or sale of the Common Stock as to which such
approval shall not have been obtained. However, the Corporation shall use
its best efforts to obtain all such applicable approvals.
15. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and
addressed to the Corporation in care of the Corporate Secretary at the
Corporate Offices at 2730 Junction Avenue, San Jose, CA 95134. Any notice
required to be given or delivered to Optionee shall be in writing and
addressed to Optionee at the address indicated below Optionee's signature
line on the Grant Notice. All notices shall be deemed to have been given or
delivered upon personal delivery or upon deposit in the U.S. mail, postage
prepaid and properly addressed to the party to be notified.
16. CONSTRUCTION/GOVERNING LAW. This Agreement and the option
evidenced hereby are made and granted pursuant to the Plan and are in all
respects limited by and subject to the express terms and provisions of the
Plan, including the automatic option grant provisions of Article Three of the
Plan. The interpretation, performance and enforcement of this Agreement
8.
<PAGE>
shall be governed by the laws of the State of California without resort to
that State's conflict-of-laws provisions.
17. STOCKHOLDER APPROVAL. This option may not be exercised in
whole or in part at any time prior to the approval of the July 19, 1995
restatement of the Plan by the Corporation's stockholders. Should such
stockholder approval not be obtained at the 1996 Annual Stockholders Meeting,
this option shall terminate and cease to remain outstanding without ever
becoming exercisable for any of the Option Shares.
9.
<PAGE>
EXHIBIT I
---------
NOTICE OF EXERCISE OF
AUTOMATIC STOCK OPTION
----------------------
I hereby notify GaSonics International Corporation (the
"Corporation") that I elect to purchase shares of the
Corporation's Common Stock (the "Purchased Shares") at the option exercise
price of $ per share (the "Exercise Price") pursuant to that certain
option (the "Option") granted to me under the Corporation's 1994 Stock
Option/Stock Issuance Plan on to purchase up to shares of
the Corporation's Common Stock.
Concurrently with the delivery of this Exercise Notice to the
Secretary of the Corporation, I shall hereby pay to the Corporation the
Exercise Price for the Purchased Shares in accordance with the provisions of
my agreement with the Corporation evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a
condition for exercise. Alternatively, I may utilize the special
broker/dealer sale and remittance procedure specified in my agreement to
effect payment of the Exercise Price for any Purchased Shares.
- ------------------------ ----------------------------------------
Date Optionee
Address:
--------------------------------
-----------------------------------------
Print name in exact manner
it is to appear on the
stock certificate: ------------------------------------------
Address to which certificate
is to be sent, if different
from address above: ------------------------------------------
------------------------------------------
Social Security Number:
------------------------------------------
<PAGE>
EXHIBIT 99.11
ANNUAL OPTION GRANT
GASONICS INTERNATIONAL CORPORATION
AUTOMATIC STOCK OPTION AGREEMENT
--------------------------------
RECITALS
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A. The Corporation has approved an automatic option grant program
under the 1994 Stock Option/Stock Issuance Plan (the "Plan"), pursuant to
which special option grants are to be made to eligible members of the
Corporation's Board of Directors (the "Board") at specified intervals over
their period of Board service in order to encourage such individuals to
remain in the Corporation's service.
B. Optionee is an eligible Board member and this Agreement is executed
pursuant to, and is intended to carry out the purposes of, the Plan in
connection with the automatic grant of a stock option to purchase shares of
the Corporation's common stock ("Common Stock") under the Plan.
C. The granted option is intended to be a non-statutory option which
does NOT meet the requirements of Section 422 of the Internal Revenue Code
and is designed to provide Optionee with a meaningful incentive to continue
to serve as a member of the Board.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms and conditions
set forth in this Agreement, there is hereby granted to Optionee, as of the
date of grant (the "Grant Date") specified in the accompanying Notice of
Grant of Automatic Stock Option (the "Grant Notice"), a stock option to
purchase up to that number of shares of Common Stock (the "Option Shares") as
is specified in the Grant Notice. The Option Shares shall be purchasable from
time to time during the option term at the price per share (the "Exercise
Price") specified in the Grant Notice.
2. OPTION TERM. This option shall have a maximum term of ten
(10) years measured from the Grant Date and shall expire at the close of
business on the Expiration Date specified in the Grant Notice, unless sooner
terminated under Paragraph 5, 7 or 8.
3. LIMITED TRANSFERABILITY. This option, together with the
special stock appreciation right provided under Paragraph 8.b, shall be
neither transferable nor assignable by Optionee, other than a transfer of
this option effected by will or by the laws of descent and distribution
following Optionee's death, and may be exercised, during Optionee's lifetime,
only by Optionee.
<PAGE>
4. EXERCISABILITY. This option shall become exercisable for the
Option Shares in one or more installments as specified in the Grant Notice.
As the option becomes exercisable for such installments, those installments
shall accumulate and the option shall remain exercisable for the accumulated
installments until the Expiration Date or sooner termination of the option
term under Paragraph 5, 7 or 8.
5. CESSATION OF BOARD SERVICE. Should Optionee's service as a
Board member cease while this option remains outstanding, then the option
term specified in Paragraph 2 shall terminate (and this option shall cease to
remain outstanding) prior to the Expiration Date in accordance with the
following provisions:
a. Should the Optionee cease to serve as a Board member for
any reason (other than death or permanent disability) prior to the first
anniversary of the Grant Date, then this option shall nevertheless
become exercisable for all of the Option Shares on the first anniversary
of the Grant Date and shall remain exercisable for any or all of those
Option Shares until the expiration date of the twelve (12)-month period
measured from the date of the Optionee's cessation of Board service.
b. Should the Optionee cease Board service on or after the
first anniversary of the Grant Date, then the Optionee shall have a
twelve (12)-month period measured from the date of such cessation of
Board service (the "Post-Service Exercise Period") in which to exercise
this option for any or all of the Option Shares at the time subject to
this option.
c. Should the Optionee die after his or her cessation of
Board service but while this option remains outstanding, then the
personal representative of the Optionee's estate or the person or
persons to whom the option is transferred pursuant to the Optionee's
will or in accordance with the laws of descent and distribution shall
have the remainder of the applicable Post-Service Exercise Period in
which to exercise this option in accordance with the parameters
established for the Optionee in clauses a. and b. of this Paragraph 5.
d. Should Optionee cease to serve as a Board member by
reason of death or permanent disability while this option remains
outstanding, then this option shall immediately accelerate and become
exercisable for all of the Option Shares at the time subject to this
option, and the Optionee (or the personal representative of the
Optionee's estate or by the person or persons to whom this option is
transferred pursuant to the Optionee's will or in accordance with the
laws of descent and distribution) shall have a twelve (12)-month period
following the date of such cessation of Board service in which to
exercise this option for any or all of those Option Shares.
2.
<PAGE>
e. In no event shall this option remain exercisable after
the specified Expiration Date of the ten (10)-year option term. Upon
the expiration of the applicable post-service exercise period under this
Paragraph 5 or (if earlier) upon the expiration of the ten (10)-year
option term, this option shall terminate and cease to be outstanding
with respect to any vested Option Shares for which this option has not
otherwise been exercised.
f. Optionee shall be deemed to be PERMANENTLY DISABLED if
Optionee is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment
expected to result in death or to be of continuous duration of twelve
(12) months or more.
6. ADJUSTMENT IN OPTION SHARES. Should any change be made to the
Common Stock issuable under the Plan by reason of any stock split, stock
dividend, recapitalization, combination of shares, exchange of shares or
other change affecting such Common Stock as a class without the Corporation's
receipt of consideration, then the number and class of securities purchasable
under this option and the Exercise Price payable per share shall be
appropriately adjusted to prevent the dilution or enlargement of Optionee's
rights hereunder; provided, however, the aggregate Exercise Price shall
remain the same.
7. CORPORATE TRANSACTION.
a. In the event of any of the following stockholder-approved
transactions to which the Corporation is a party (a "Corporate Transaction"):
a. a merger or consolidation in which the Corporation is not
the surviving entity, except for a transaction the principal purpose of
which is to change the state in which the Corporation is incorporated,
b. the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete
liquidation or dissolution of the Corporation, or
c. any reverse merger in which the Corporation is the
surviving entity but in which securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's
outstanding securities are transferred to a person or persons different
from the persons holding those securities immediately prior to such
merger,
this option, to the extent outstanding at such time but not
otherwise fully exercisable, shall automatically accelerate so that this
option shall, immediately prior to the effective date of the Corporate
Transaction, become exercisable for all of the Option Shares at the time
subject to this option and may be exercised for any or all of those Option
Shares as fully-vested shares of Common Stock. Immediately following the
consummation of the Corporate
3.
<PAGE>
Transaction, this option shall terminate and cease to be outstanding, except
to the extent assumed by the successor corporation (or parent thereof).
b. If this option is assumed in connection with a Corporate
Transaction, then this option shall be appropriately adjusted, immediately
after such Corporate Transaction, to apply and pertain to the number and
class of securities which would have been issued to the Optionee, in
consummation of such Corporate Transaction, had this option been exercised
option immediately prior to such Corporate Transaction. Appropriate
adjustments shall also be made to the Exercise Price payable per share;
provided, however, the aggregate Exercise Price payable for such securities
shall remain the same.
8. CHANGE IN CONTROL/HOSTILE TAKEOVER.
a. In the event of a Change in Control (as defined below),
the exercisability of this option, to the extent outstanding at such time but
not otherwise fully exercisable, shall automatically accelerate so that this
option shall, immediately prior to the effective date of the Change in
Control, become exercisable for all of the Option Shares at the time subject
to this option and may be exercised for any or all of those Option Shares as
fully-vested shares of Common Stock. This option shall remain exercisable
for such fully-vested Option Shares until the EARLIEST to occur of (i) the
specified Expiration Date of the option term, (ii) the sooner termination of
this option in accordance with Paragraph 5 or 7 or (iii) the surrender of
this option under Paragraph 8.b.
b. Provided this option has been outstanding for at least
six (6) months prior to the occurrence of a Hostile Take-Over (as defined
below), Optionee shall have an unconditional right (exercisable during the
thirty (30)-day period immediately following the consummation of such Hostile
Take-Over) to surrender this option to the Corporation in exchange for a cash
distribution from the Corporation in an amount equal to the excess of (i) the
Take-Over Price of the Option Shares at the time subject to the surrendered
option (whether or not this option is at the time exercisable for those
Option Shares) over (ii) the aggregate Exercise Price payable for such shares.
To exercise this limited stock appreciation right, Optionee
must, during the applicable thirty (30)-day exercise period, provide the
Corporation with written notice of the option surrender in which there is
specified the number of Option Shares as to which the Option is being
surrendered. Such notice must be accompanied by the return of Optionee's
copy of this Agreement, together with any written amendments to such
Agreement. The cash distribution shall be paid to Optionee within five (5)
days following such delivery date, and neither the approval of the Plan
Administrator nor the consent of the Board shall be required in connection
with the option surrender and cash distribution. Upon receipt of such cash
distribution, this option shall be cancelled with respect to the shares
subject to the surrendered option (or the surrendered portion), and Optionee
shall cease to have any further right to acquire those Option Shares under
this Agreement. However, should this option be surrendered for only a
portion of the Option Shares at the time subject to the option, a new stock
option agreement (substantially
4.
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in the form of this Agreement) shall be issued by the Corporation for the
balance of the Option Shares for which this option is not surrendered.
This limited stock appreciation right shall in all events
terminate upon the expiration or sooner termination of the option term and
may not be assigned or transferred by Optionee.
c. DEFINITIONS: For purposes of this Agreement, the following
definitions shall be in effect:
A CHANGE IN CONTROL shall be deemed to occur in the event:
- any person or related group of persons (other than
the Corporation or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Corporation) directly or
indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 of
the Securities Exchange Act of 1934 (the "1934 Act")) of securities
possessing more than fifty percent (50%) of the total combined voting power
of the Corporation's outstanding securities pursuant to a tender or exchange
offer made directly to the Corporation's stockholders which the Board does
not recommend such stockholders to accept, or
- there is a change in the composition of the Board over a
period of thirty-six (36) consecutive months or less such that a majority of
the Board members ceases, by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (i) have been
Board members continuously since the beginning of such period or (ii) have
been elected or nominated for election as Board members during such period by
at least a majority of the Board members described in clause (i) who were
still in office at the time such election or nomination was approved by the
Board.
A HOSTILE TAKE-OVER shall be deemed to occur in the event (i)
any person or related group of persons (other than the Corporation or a
person that directly or indirectly controls, is controlled by, or is under
common control with, the Corporation) directly or indirectly acquires
beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of
securities possessing more than fifty percent (50%) of the total combined
voting power of the Corporation's outstanding securities pursuant to a tender
or exchange offer made directly to the Corporation's stockholders which the
Board does not recommend such stockholders to accept AND (ii) more than fifty
percent (50%) of the securities so acquired in such tender or exchange offer
are accepted from holders other than the officers and directors of the
Corporation subject to the short-swing profit restrictions of Section 16 of
the 1934 Act.
The TAKE-OVER PRICE per share shall be deemed to be equal to
the GREATER of (i) the Fair Market Value per share of Common Stock on the
date the option is surrendered to the Corporation in connection with a
Hostile Take-Over, as determined in accordance with the valuation provisions
of Paragraph 9.b, or (ii) the highest reported price per share of Common
Stock paid by the tender offeror in effecting the Hostile Take-Over.
5.
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9. MANNER OF EXERCISING OPTION
a. In order to exercise this option for all or any part of
the Option Shares for which the option is at the time exercisable, Optionee
(or in the case of exercise after Optionee's death, Optionee's executor,
administrator, heir or legatee, as the case may be) must take the following
actions:
(1) Execute and deliver to the Corporation an exercise
notice ("Notice of Exercise") for the Option Shares for which the option
is exercised.
(2) Pay the aggregate Exercise Price for the purchased
shares in one of the following alternative forms:
(a) full payment in cash or check made payable to
the Corporation's order;
(b) full payment in shares of Common Stock held by
Optionee for the requisite period necessary to avoid a charge to
the Corporation's earnings for financial reporting purposes and
valued at Fair Market Value on the Exercise Date (as defined
below);
(c) full payment in a combination of shares of
Common Stock held for the requisite period necessary to avoid a
charge to the Corporation's earnings for financial reporting
purposes and valued at Fair Market Value on the Exercise Date and
cash or check made payable to the Corporation's order; or
(d) full payment effected through a broker-dealer
sale and remittance procedure pursuant to which Optionee shall
provide concurrent irrevocable written instructions (i) to a
Corporation-designated brokerage firm to effect the immediate sale
of the shares purchased under the option and remit to the Corporation,
out of the sale proceeds available on the settlement date, sufficient
funds to cover the aggregate Exercise Price payable for those shares
and (ii) to the Corporation to deliver the certificates for the
purchased shares directly to such brokerage firm in order to complete
the sale.
(3) Appropriate documentation evidencing the right to
exercise this option shall be furnished the Corporation if the person or
persons exercising the option is other than Optionee.
b. For purposes of subparagraph 9.a. above and for all other
valuation purposes under this Agreement, the Fair Market Value per share of
Common Stock on any relevant date shall be determined in accordance with the
following provisions:
6.
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(1) If the Common Stock is not at the time listed or
admitted to trading on any national securities exchange but is traded on
the Nasdaq National Market, the Fair Market Value shall be the closing
selling price per share on the date in question, as such price is
reported by the National Association of Securities Dealers on the Nasdaq
National Market or any successor system. If there is no reported closing
selling price for the Common Stock on the date in question, then the
closing selling price on the last preceding date for which such quotation
exists shall be determinative of Fair Market Value.
(2) If the Common Stock is at the time listed or admitted
to trading on any national securities exchange, then the Fair Market Value
shall be the closing selling price per share on the date in question on the
securities exchange determined by the Plan Administrator to be the primary
market for the Common Stock, as such price is officially quoted in the
composite tape of transactions on such exchange. If there is no reported
sale of Common Stock on such exchange on the date in question, then the
Fair Market Value shall be the closing selling price on the exchange on
the last preceding date for which such quotation exists.
c. The Exercise Date shall be the date on which the Exercise
Notice is delivered to the Secretary of the Corporation. Except to the
extent the sale and remittance procedure specified above is utilized in
connection with the exercise of the option, payment of the Exercise Price for
the purchased shares must accompany such notice.
d. As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or other person or
persons exercising this option) a certificate or certificates representing
the purchased Option Shares.
e. In no event may this option be exercised for any
fractional share.
10. STOCKHOLDER RIGHTS. The holder of this option shall not have
any of the rights of a stockholder with respect to the Option Shares until
such individual shall have exercised this option and paid the Exercise Price
for the purchased shares.
11. NO IMPAIRMENT OF RIGHTS. This Agreement shall not in any way
affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise make changes in its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets. Nor shall this Agreement in any way be construed or
interpreted so as to affect adversely or otherwise impair the right of the
Corporation or the stockholders to remove Optionee from the Board at any time
in accordance with the provisions of applicable law.
12. COMPLIANCE WITH LAWS AND REGULATIONS. The exercise of this
option and the issuance of the Option Shares upon such exercise shall be
subject to compliance by the Corporation and Optionee with all applicable
requirements of law relating thereto and with all
7.
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applicable regulations of any securities exchange on which shares of the
Common Stock may be listed at the time of such exercise and issuance.
13. SUCCESSORS AND ASSIGNS. Except to the extent otherwise
provided in Paragraph 3 or 7, the provisions of this Agreement shall inure to
the benefit of, and be binding upon, the successors, administrators, heirs,
legal representatives and assigns of Optionee and the Corporation's
successors and assigns.
14. DISCHARGE OF LIABILITY. The inability of the Corporation to
obtain approval from any regulatory body having authority deemed by the
Corporation to be necessary to the lawful issuance and sale of any Common
Stock pursuant to this option shall relieve the Corporation of any liability
with respect to the non-issuance or sale of the Common Stock as to which such
approval shall not have been obtained. However, the Corporation shall use
its best efforts to obtain all such applicable approvals.
15. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and
addressed to the Corporation in care of the Corporate Secretary at the
Corporate Offices at 2730 Junction Avenue, San Jose, CA 95134. Any notice
required to be given or delivered to Optionee shall be in writing and
addressed to Optionee at the address indicated below Optionee's signature
line on the Grant Notice. All notices shall be deemed to have been given or
delivered upon personal delivery or upon deposit in the U.S. mail, postage
prepaid and properly addressed to the party to be notified.
16. CONSTRUCTION/GOVERNING LAW. This Agreement and the option
evidenced hereby are made and granted pursuant to the Plan and are in all
respects limited by and subject to the express terms and provisions of the
Plan, including the automatic option grant provisions of Article Three of the
Plan. The interpretation, performance and enforcement of this Agreement
shall be governed by the laws of the State of California without resort to
that State's conflict-of-laws provisions.
17. STOCKHOLDER APPROVAL. This option may not be exercised in
whole or in part at any time prior to the approval of the July 19, 1995
restatement of the Plan by the Corporation's stockholders. Should such
stockholder approval not be obtained at the 1996 Annual Stockholders Meeting,
this option shall terminate and cease to remain outstanding without ever
becoming exercisable for any of the Option Shares.
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EXHIBIT I
---------
NOTICE OF EXERCISE OF
AUTOMATIC STOCK OPTION
----------------------
I hereby notify GaSonics International Corporation (the
"Corporation") that I elect to purchase shares of the Corporation's
Common Stock (the "Purchased Shares") at the option exercise price of $
per share (the "Exercise Price") pursuant to that certain option (the
"Option") granted to me under the Corporation's 1994 Stock Option/Stock
Issuance Plan on to purchase up to shares of the Corporation's
Common Stock.
Concurrently with the delivery of this Exercise Notice to the
Secretary of the Corporation, I shall hereby pay to the Corporation the
Exercise Price for the Purchased Shares in accordance with the provisions of
my agreement with the Corporation evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a
condition for exercise. Alternatively, I may utilize the special
broker/dealer sale and remittance procedure specified in my agreement to
effect payment of the Exercise Price for any Purchased Shares.
- ----------------------------------- --------------------------------
Date Optionee
Address: ------------------------
---------------------------------
Print name in exact manner
it is to appear on the
stock certificate: ---------------------------------
Address to which certificate
is to be sent, if different
from address above: ----------------------------------------
---------------------------------
Social Security Number: ---------------------------------
