<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 15, 1999
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FVC.COM, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 77-0357037
(State of Incorporation) (I.R.S. Employer Identification Number)
-------------
3393 OCTAVIUS DRIVE
SANTA CLARA, CA 95054
(408) 567-7200
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1999 EQUITY INCENTIVE PLAN
(Full titles of the plans)
Richard M. Beyer
President and Chief Executive Officer
FVC.COM, Inc.
3393 Octavius Drive
Santa Clara, CA 95054
(408) 567-7200
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-------------
Copies to:
LEE F. BENTON, ESQ.
JULIE M. ROBINSON, ESQ.
COOLEY GODWARD LLP
FIVE PALO ALTO SQUARE
3000 EL CAMINO REAL
PALO ALTO, CALIFORNIA 94306
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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- ------------------------------------------------------------------------------------------------------------------------------------
TITLE OF SECURITIES PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED AMOUNT TO BE REGISTERED OFFERING PRICE PER SHARE (1) AGGREGATE OFFERING PRICE (1) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stock Options and Common Stock 1,000,000 $ 5.29766-5.71875 $ 5,443,781.25 $ 1,513.37
(par value $.001)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(c) and (h)(1) under the
Securities Act of 1933, as amended (the "Act"). The offering price per
share and aggregate offering price for the unissued stock options and
Common Stock are based upon the average of the high and low prices of
Registrant's Common Stock as reported on the Nasdaq National Market
System on June 11, 1999. The following chart illustrates the
calculation of the registration fee:
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
OFFERING PRICE PER AGGREGATE OFFERING
TITLE OF SHARES NUMBER OF SHARES SHARE PRICE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Shares issuable pursuant to outstanding stock options pursuant 653,000 $5.29766 $3,459,375.00
to the 1999 Equity Incentive Plan
- ---------------------------------------------------------------------------------------------------------------------------------
Shares issuable pursuant to unissued stock options pursuant to 347,000 $5.71875 $1,984,406.25
the 1999 Equity Incentive Plan
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Proposed Maximum Aggregate Offering Price $5,443,781.25
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</TABLE>
Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by FVC.COM, Inc. (the
"Registrant") with the Securities and Exchange Commission are
incorporated by reference into this Registration Statement:
(a) The Registrant's annual report on Form 10-K (File No.
333-72533) for the year ended December 31, 1998, filed pursuant to
Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
(b) All other reports filed pursuant to Sections 13(a) or
15(d) of the Exchange Act since the end of the fiscal year covered by
the annual report referred to in (a) above.
(c) The description of the Registrant's Common Stock which is
contained in the Registration Statement on Form 8-A (File No.
333-38755), filed April 23, 1998, under the Exchange Act, including any
amendment or report filed for the purpose of updating such description.
All reports and other documents subsequently filed by the
Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part of this registration
statement from the date of the filing of such reports and documents.
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. The Registrant's Bylaws also
provide the Registrant will indemnify its directors and executive
officers, and may indemnify its other officers, employees and other
agents, to the fullest extent not prohibited by Delaware law.
The Registrant's Certificate of Incorporation provides for the
elimination of liability for monetary damages for breach of the
directors' fiduciary duty of care to the Registrant and its
stockholders. These provisions do not eliminate the directors' 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 any
transaction from which the director derived an improper personal
benefit, and for payment of dividends or approval of stock repurchases
or redemptions that are unlawful under Delaware law. The provision does
not affect a director's responsibilities under any other laws, such as
the federal securities laws or state or federal environmental laws.
The Registrant has entered into agreements with its directors
and executive officers that require the Registrant to indemnify such
persons against expenses, judgments, fines, settlements and other
amounts actually and reasonably incurred (including expenses of a
derivative action) in connection with any proceeding, whether actual or
threatened, to which any such person may be made a party by reason of
the fact that such person is or was a director or officer of the
Registrant or any of its affiliated enterprises, provided such person
acted in good faith and in a manner such person reasonably believed to
be in or not opposed to the best interests of the Registrant and, with
respect to any criminal proceeding, had no
3.
<PAGE>
reasonable cause to believe his conduct was unlawful. The
indemnification agreements also set forth certain procedures that will
apply in the event of a claim for indemnification thereunder.
In addition, the Registrant has entered into certain
agreements in connection with the Registrant's equity financings which
provide for the indemnification of directors and officers in certain
circumstances, including indemnification for liabilities arising under
the Securities Act. The Registrant also maintains an insurance policy
for its directors and officers insuring against certain liabilities
arising in their capacities as such.
EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
<S> <C>
5.1 Opinion of Cooley Godward LLP
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants
23.2 Consent of Cooley Godward LLP is contained in Exhibit 5.1 to
this Registration Statement
24.1 Power of Attorney is contained on the signature page
99.1 1999 Equity Incentive Plan
</TABLE>
4.
<PAGE>
UNDERTAKINGS
1. The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental
change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement;
PROVIDED, HOWEVER, that paragraphs (a)(i) and (a)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by
reference herein.
(b) That, for the purpose of determining any
liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
2. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act,
each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by
reference herein shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant
of
5.
<PAGE>
expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Santa Clara, State of California, on June 11, 1999.
FVC.COM, INC.
By: /s/ RICHARD M. BEYER
-------------------------------------
Richard M. Beyer
President and Chief Executive Officer
6.
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Richard M. Beyer and James O. Mitchell,
and each or any one of them, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents,
or any of them, or their or his substitutes or substitute, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- -------------------------------------------- ----------------------------- -------------
<S> <C> <C>
/s/ RALPH UNGERMANN
- -------------------------------------------- Chairman of the Board of June 11, 1999
Ralph Ungermann Directors
/s/ RICHARD M. BEYER President, Chief Executive June 11, 1999
- -------------------------------------------- Officer and Director
Richard M. Beyer (PRINCIPAL EXECUTIVE OFFICER)
/s/ JAMES O. MITCHELL Vice President and Chief June 11, 1999
- -------------------------------------------- Financial Officer
James O. Mitchell (PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER)
/s/ NEAL DOUGLAS Director June 9, 1999
- --------------------------------------------
Neal Douglas
/s/ PIER CARLO FALOTTI Director June 10, 1999
- --------------------------------------------
Pier Carlo Falotti
/s/ DAVID A. NORMAN
- -------------------------------------------- Director June 11, 1999
David A. Norman
/s/ JAMES SWARTZ Director June 10, 1999
- --------------------------------------------
James Swartz
</TABLE>
7.
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<S> <C>
5.1 Opinion of Cooley Godward LLP
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants
23.2 Consent of Cooley Godward LLP is contained in Exhibit 5.1 to
this Registration Statement
24.1 Power of Attorney is contained on signature pages
99.1 1999 Equity Incentive Plan
</TABLE>
8.
<PAGE>
EXHIBIT 5.1
Julie M. Robinson, Esq.
DIRECT: (650) 843-5092
INTERNET: [email protected]
June 15, 1999
FVC.COM, Inc.
3393 Octavius Drive
Santa Clara, CA 95054
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by FVC.COM, Inc. (the "Company") of a Registration Statement
on Form S-8 (the "Registration Statement") with the Securities and Exchange
Commission covering the offering of an aggregate of 1,000,000 shares of the
Company's Common Stock, $.001 par value (the "Shares"), pursuant to the
Company's 1999 Equity Incentive Plan (the "Plan").
In connection with this opinion, we have examined the Registration Statement
and related Prospectus, your Amended and Restated Certificate of Incorporation
and Bylaws and such other documents, records, certificates, memoranda and
other instruments as we deem necessary as a basis for this opinion. We have
assumed the genuineness and authenticity of all documents submitted to us as
originals, the conformity to originals of all documents submitted to us as
copies thereof, and the due execution and delivery of all documents where due
execution and delivery are a prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Shares, when sold and issued in accordance with the Plan, the
Registration Statement and the related Prospectus, will be validly issued,
fully paid, and nonassessable (except as to shares issued pursuant to certain
deferred payment arrangements, which will be fully paid and nonassessable
when such deferred payments are made in full).
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
Cooley Godward LLP
By: /s/ JULIE M. ROBINSON
-------------------------
Julie M. Robinson
9.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated April 5, 1999, except as to Note 12
which is dated as of April 9, 1999, relating to the financial statements
which appears in the Annual Report on Form 10-K of FVC.COM, Inc. for the year
ended December 31, 1998.
/s/ PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
San Jose, California
June 11, 1999
10.
<PAGE>
EXHIBIT 99.1
FVC.COM, INC.
1999 EQUITY INCENTIVE PLAN
ADOPTED BY THE BOARD OF DIRECTORS EFFECTIVE APRIL 21, 1999
1. PURPOSES.
(a) The purpose of the Plan is to provide a means by which selected
Employees and Consultants may be given an opportunity to benefit from
increases in value of the common stock of the Company ("Common Stock")
through the granting of (i) Nonstatutory Stock Options, (ii) stock bonuses,
and (iii) rights to purchase restricted stock.
(b) The Company, by means of the Plan, seeks to retain the services of
persons who are now Employees or Consultants, to secure and retain the
services of new Employees and Consultants and to provide incentives for such
persons to exert maximum efforts for the success of the Company and its
Affiliates.
(c) The Company intends that the Stock Awards issued under the Plan
shall, in the discretion of the Board, be either (i) Nonstatutory Stock
Options granted pursuant to Section 6 hereof or (ii) stock bonuses or rights
to purchase restricted stock granted pursuant to Section 7 hereof. All
Options shall be in such form as issued pursuant to Section 6.
2. DEFINITIONS.
(a) "AFFILIATE" means any parent corporation or subsidiary
corporation, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f) respectively, of the Code, or such other parent
corporation or subsidiary corporation designated by the Board.
(b) "BOARD" means the Board of Directors of the Company.
(c) "CODE" means the Internal Revenue Code of 1986, as amended.
(d) "COMMITTEE" means a committee appointed by the Board in accordance
with subsection 3(c) of the Plan.
(e) "COMPANY" means FVC.COM, Inc., a Delaware corporation.
(f) "CONSULTANT" means any person, including an advisor, engaged by
the Company or an Affiliate to render consulting services and who is
compensated for such services, provided that the term "Consultant" shall not
include a Director.
(g) "CONTINUOUS STATUS AS AN EMPLOYEE, DIRECTOR OR CONSULTANT" means
the service relationship, whether as an Employee, Director or a Consultant,
is not interrupted or terminated. The Board or the Committee, in that
party's sole discretion, may determine whether Continuous Status as an
Employee, Director or Consultant shall be considered interrupted in the case
of: (i) any leave of absence approved by the Board, including sick leave,
military leave, or any other
1.
<PAGE>
personal leave, or (ii) transfers between locations of the Company or between
the Company, Affiliates or their successors.
(h) "DIRECTOR" means a member of the Board.
(i) "DISABILITY" means the inability of a person, in the opinion of a
qualified physician acceptable to the Company, to perform the major duties of
that person's position with the Company or an Affiliate of the Company
because of the sickness or injury of the person.
(j) "EMPLOYEE" means any person employed by the Company or by any
Affiliate, excluding Officers and Directors of the Company (and of any
Affiliate which controls the Company) and excluding stockholders beneficially
owning ten percent (10%) or more of the Company's Common Stock.
(k) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(l) "FAIR MARKET VALUE" means, as of any date, the value of the Common
Stock of the Company determined as follows:
(1) If the Common Stock is listed on any established stock
exchange or traded on the Nasdaq National Market or The Nasdaq SmallCap
Market, the Fair Market Value of a Share shall be the closing sales price for
such Share (or the closing bid, if no sales were reported) as quoted on such
exchange or market (or the exchange or market with the greatest volume of
trading in the Common Stock) on the last market trading day prior to the day
of determination, as reported in THE WALL STREET JOURNAL or such other source
as the Board deems reliable.
(2) In the absence of such markets for the Common Stock, the Fair
Market Value shall be determined in good faith by the Board.
(m) "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an incentive stock option pursuant to Section 422 of the Code and
the regulations promulgated thereunder.
(n) "OFFICER" means a person who is an officer of the Company,
including any corporate officer with the title of vice president and above
and any other Employee of the Company whom the Board or the Committee
classifies as "Officer."
(o) "OPTION" means a Nonstatutory Stock Option granted pursuant to the
Plan.
(p) "OPTION AGREEMENT" means a written agreement between the Company
and an Optionee evidencing the terms and conditions of an individual Option
grant. Each Option Agreement shall be subject to the terms and conditions of
the Plan.
(q) "OPTIONEE" means a person to whom an Option is granted pursuant to
the Plan.
(r) "PLAN" means this FVC.COM, Inc. 1999 Equity Incentive Plan.
(s) "SHARE" means a share of Common Stock of the Company.
2.
<PAGE>
(t) "STOCK AWARD" means any right granted under the Plan, including
any Option, any stock bonus and any right to purchase restricted stock.
(u) "SECURITIES ACT" means the Securities Act of 1933, as amended.
(v) "STOCK AWARD AGREEMENT" means a written agreement between the
Company and a holder of a Stock Award evidencing the terms and conditions of
an individual Stock Award grant. Each Stock Award Agreement shall be subject
to the terms and conditions of the Plan.
3. ADMINISTRATION.
(a) The Plan shall be administered by the Board unless and until the
Board delegates administration to a Committee, as provided in subsection 3(c).
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the persons eligible
under the Plan shall be granted Stock Awards; when and how each Stock Award
shall be granted; whether a Stock Award will be an Option, a stock bonus, a
right to purchase restricted stock or a combination of the foregoing; the
provisions of each Stock Award granted (which need not be identical),
including the time or times when a person shall be permitted to receive
Shares pursuant to a Stock Award and the number of Shares with respect to
which a Stock Award shall be granted to each such person.
(2) To construe and interpret the Plan and Stock Awards granted
under it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Stock Award
Agreement, in a manner and to the extent it shall deem necessary or expedient
to make the Plan fully effective.
(3) To amend the Plan or a Stock Award as provided in Section 13.
(4) Generally, to exercise such powers and to perform such acts
as the Board deems necessary or expedient to promote the best interests of
the Company which are not in conflict with the provisions of the Plan.
(c) The Board may delegate administration of the Plan to a committee
or committees ("Committee") of one or more members of the Board. If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore
possessed by the Board (and references in this Plan to the Board shall
thereafter be to the Committee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board. The Board may abolish the Committee at any time and
revest in the Board the administration of the Plan. Notwithstanding anything
to the contrary contained herein, the Board may delegate administration of
the Plan to any person or persons and the term "Committee" shall apply to any
person or persons to whom such authority has been delegated.
3.
<PAGE>
4. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of Section 12 relating to adjustments
upon changes in the Common Stock, the Shares that may be issued pursuant to
Stock Awards shall not exceed in the aggregate One Million (1,000,000)
Shares. If any Stock Award shall for any reason expire or otherwise
terminate, in whole or in part, without having been exercised in full (or
vested in the case of restricted stock), the Shares not acquired under such
Stock Award shall revert to and again become available for issuance under the
Plan.
(b) The Shares subject to the Plan may be unissued Shares or reacquired
Shares bought on the market or otherwise.
5. ELIGIBILITY.
(a) Stock Awards may be granted only to Employees or Consultants as
defined in Section 2 hereof. An Employee or Consultant who has been granted
a Stock Award, if he or she remains eligible, may be granted an additional
Stock Award or Stock Awards. Notwithstanding the foregoing, no Employee who
is an Officer of the Company (and of any Affiliate which controls the
Company) or who is a Director shall be entitled to receive the grant of a
Stock Award under the Plan.
(b) Stock Awards may not be granted to Consultants who are not natural
persons unless the Company determines both (i) that such grant (A) shall be
registered in a manner other than on a Form S-8 Registration Statement under
the Securities Act (E.G., on a Form S-3 Registration Statement) or (B) does
not require registration under the Securities Act in order to comply with the
requirements of the Securities Act, if applicable, and (ii) that such grant
complies with the securities laws of all other relevant jurisdictions.
(c) The Plan shall not confer upon any Stock Award holder any right
with respect to continuation of employment or consultancy by the Company, nor
shall it interfere in any way with the holder's right or the Company's right
to terminate the Stock Award holder's employment at any time, for any reason
or no reason, with or without cause, or to terminate the Stock Award holder's
consultancy pursuant to the terms of the Consultant's agreement with the
Company.
6. OPTION PROVISIONS.
Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. The provisions of separate
Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise)
the substance of each of the following provisions:
(a) TERM. No Option shall be exercisable after the expiration of ten
(10) years from the date it was granted or such longer or shorter term as may
be provided in the Option Agreement.
(b) PRICE. The exercise price of each Option shall be not less than
85% of the Fair Market Value of the Common Stock subject to the Option on the
date of grant.
4.
<PAGE>
(c) CONSIDERATION. The consideration to be paid for the Shares to be
issued upon exercise of an Option, including the method of payment, shall be
determined by the Board and may consist entirely of (1) cash or check,
(i) promissory note (except that payment of the Share's "par value", as
defined in the Delaware General Corporation Law, shall not be made by
deferred payment), (ii) other Shares having a fair market value on the date
of surrender equal to the aggregate exercise price of the Shares as to which
the Option shall be exercised, including by delivering to the Company an
attestation of ownership of owned and unencumbered Shares in a form approved
by the Company, (iii) payment pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board which, prior to the
issuance of the Shares, results in either the receipt of cash (or check) by
the Company or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds, (iv) any combination
of such methods of payment, or (v) such other consideration and method of
payment for the issuance of Shares to the extent permitted under applicable
law. In making its determination as to the type of consideration to accept,
the Board shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company. In the case of any deferred
payment arrangement, interest shall be charged at the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be
interest under the deferred payment arrangement.
(d) TRANSFERABILITY. An Option may be transferred to the extent
provided in the Option Agreement; provided that if the Option Agreement does
not expressly permit the transfer of an Option, the Option shall not be
transferable except by will or by the laws of descent and distribution and
shall be exercisable during the lifetime of the person to whom the Option is
granted only by such person. Notwithstanding the foregoing, the person to
whom the Option is granted may, by delivering written notice to the Company,
in a form satisfactory to the Company, designate a third party who, in the
event of the death of the Optionee, shall thereafter be entitled to exercise
the Option.
(e) VESTING. The total number of Shares subject to an Option may, but
need not, be allotted in periodic installments (which may, but need not, be
equal). The Option Agreement may provide that from time to time during each
of such installment periods, the Option may become exercisable ("vest") with
respect to some or all of the Shares allotted to that period, and may be
exercised with respect to some or all of the Shares allotted to such period
and/or any prior period as to which the Option became vested but was not
fully exercised. The Option may be subject to such other terms and
conditions on the time or times when it may be exercised (which may be based
on performance or other criteria) as the Board may deem appropriate. The
vesting provisions of individual Options may vary. The provisions of this
subsection 6(e) are subject to any Option provisions governing the minimum
number of Shares as to which an Option may be exercised.
(f) TERMINATION OF CONTINUOUS SERVICE AS AN EMPLOYEE, DIRECTOR OR
CONSULTANT. In the event an Optionee's Continuous Status as an Employee,
Director or Consultant terminates (other than upon the Optionee's death or
disability), the Optionee may exercise his or her Option within three (3)
months (or such longer or shorter period, which in no event shall be less
than thirty (30) days, specified in the Option Agreement) (the
"Post-Termination Exercise Period") and only to the extent that the Optionee
was entitled to exercise the Option on the date the Optionee's Continuous
Status as an Employee, Director or Consultant terminates. The Board
5.
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may at any time extend the Post-Termination Exercise Period and provide for
continued vesting during such extended period. If, as of the date of
termination, the Optionee is not entitled to exercise his or her entire
Option, the Shares covered by the unexercisable portion of the Option shall
revert to the Plan. If, after termination, the Optionee does not exercise
his or her Option within the time specified in the Option Agreement or as
otherwise determined above, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan. Notwithstanding the
foregoing, the Board shall have the power to permit an Option to vest, in
whole or in part, during the Post-Termination Exercise Period.
(g) DISABILITY OF OPTIONEE. In the event an Optionee's Continuous
Status as an Employee, Director or Consultant terminates as a result of the
Optionee's Disability, the Optionee may exercise his or her Option (to the
extent that the Optionee was entitled to exercise it as of the date of
termination), but only within such period of time ending on the earlier of
(i) the date twelve (12) months following such termination (or such longer or
shorter period specified in the Option Agreement), or (ii) the expiration of
the term of the Option as set forth in the Option Agreement. If, at the date
of termination, the Optionee is not entitled to exercise his or her entire
Option, the Shares covered by the unexercisable portion of the Option shall
revert to and again become available for issuance under the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to and again become available for issuance under the Plan.
(h) DEATH OF OPTIONEE. In the event of the death of an Optionee
during, or within a period specified in the Option Agreement after the
termination of, the Optionee's Continuous Status as an Employee, Director or
Consultant, the Option may be exercised (to the extent the Optionee was
entitled to exercise the Option as of the date of death) by the Optionee's
estate, by a person who acquired the right to exercise the Option by bequest
or inheritance, but only within the period ending on the earlier of (i) the
date eighteen (18) months following the date of death (or such longer or
shorter period specified in the Option Agreement), or (ii) the expiration of
the term of such Option as set forth in the Option Agreement. If, at the
time of death, the Optionee was not entitled to exercise his or her entire
Option, the Shares covered by the unexercisable portion of the Option shall
revert to and again become available for issuance under the Plan. If, after
death, the Option is not exercised within the time specified herein, the
Option shall terminate, and the Shares covered by such Option shall revert to
and again become available for issuance under the Plan.
(i) EARLY EXERCISE. The Option may, but need not, include a provision
whereby the Optionee may elect at any time while an Employee or Consultant to
exercise the Option as to any part or all of the Shares subject to the Option
prior to the full vesting of the Option. Any unvested Shares so purchased
may be subject to a repurchase right in favor of the Company or to any other
restriction the Board determines to be appropriate.
7. TERMS OF STOCK BONUSES AND PURCHASES OF RESTRICTED STOCK.
Each stock bonus or restricted stock purchase agreement shall be in
such form and shall contain such terms and conditions as the Board shall deem
appropriate. The terms and conditions of stock bonus or restricted stock
purchase agreements may change from time to time,
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and the terms and conditions of separate agreements need not be identical,
but each stock bonus or restricted stock purchase agreement shall include
(through incorporation of provisions hereof by reference in the agreement or
otherwise) the substance of each of the following provisions as appropriate:
(a) PURCHASE PRICE. The purchase price under each restricted stock
purchase agreement shall be such amount as the Board shall determine and
designate in such agreement. Notwithstanding the foregoing, the Board may
determine that eligible participants in the Plan may be awarded stock
pursuant to a stock bonus agreement in consideration for past services
actually rendered to the Company or for its benefit.
(b) TRANSFERABILITY. No rights under a stock bonus or restricted
stock purchase agreement shall be transferable except by will or the laws of
descent and distribution so long as stock awarded under such agreement
remains subject to the terms of any restrictive covenant (such as a
repurchase option or reacquisition option) in favor of the Company.
(c) CONSIDERATION. The purchase price of Shares acquired pursuant to
a stock purchase agreement shall be paid either: (i) in cash at the time of
purchase, (ii) at the discretion of the Board, according to a deferred
payment or other arrangement with the person to whom the Shares are sold,
except that payment of the common stock's "par value" (as defined in the
Delaware General Corporation Law) shall not be made by deferred payment, or
(iii) in any other form of legal consideration that may be acceptable to the
Board in its discretion. Notwithstanding the foregoing, the Board to which
administration of the Plan has been delegated may award stock pursuant to a
stock bonus agreement in consideration for past services actually rendered to
the Company or for its benefit.
(d) VESTING. Shares sold or awarded under the Plan may, but need
not, be subject to a repurchase option or reacquisition option in favor of
the Company in accordance with a vesting schedule to be determined by the
Board.
(e) TERMINATION OF CONTINUOUS STATUS AS AN EMPLOYEE, DIRECTOR OR
CONSULTANT. In the event a Participant's Continuous Status as an Employee,
Director or Consultant terminates, the Company may repurchase or otherwise
reacquire any or all of the Shares held by that person which have not vested
as of the date of termination under the terms of the stock bonus or
restricted stock purchase agreement between the Company and such person.
8. CANCELLATION AND RE-GRANT OF OPTIONS.
The Board shall have the authority to effect, at any time and from time
to time, (i) the repricing of any outstanding Options under the Plan and/or
(ii) with the consent of any adversely affected holders of Options, the
cancellation of any outstanding Options under the Plan and the grant in
substitution therefor of new Options under the Plan covering the same or
different numbers of Shares.
7.
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9. COVENANTS OF THE COMPANY.
(a) During the terms of the Stock Awards, the Company shall keep
available at all times the number of Shares required to satisfy such Stock
Awards.
(b) The Company shall seek to obtain from each regulatory commission
or agency having jurisdiction over the Plan such authority as may be required
to issue and sell Shares under Stock Awards; provided, however, that this
undertaking shall not require the Company to register under the Securities
Act either the Plan, any Stock Award or any Shares issued or issuable
pursuant to any such Stock Award. If, after reasonable efforts, the Company
is unable to obtain from any such regulatory commission or agency the
authority which counsel for the Company deems necessary for the lawful
issuance and sale of Shares under the Plan, the Company shall be relieved
from any liability for failure to issue and sell Shares upon exercise of such
Stock Awards unless and until such authority is obtained.
10. USE OF PROCEEDS FROM SHARES.
Proceeds from the sale of Shares pursuant to Stock Awards shall
constitute general funds of the Company.
11. MISCELLANEOUS.
(a) The Board shall have the power to accelerate the time at which all
or any part of a Stock Award may first be exercised or the time during which
a Stock Award or any part thereof will vest, notwithstanding the provisions
in the Stock Award stating the time at which it may first be exercised or the
time during which it will vest.
(b) No Employee, Consultant or any person to whom an Option is
transferred in accordance with the Plan shall be deemed to be the holder of,
or to have any of the rights of a holder with respect to, any Shares subject
to such Option unless and until such person has satisfied all requirements
for exercise of the Option pursuant to its terms.
(c) Nothing in the Plan or any instrument executed or Stock Award
granted pursuant thereto shall confer upon any Employee, Consultant or other
holder of Stock Awards any right to continue in the employ of the Company or
any Affiliate or to continue serving as a Consultant or shall affect the
right of the Company or any Affiliate to terminate the employment of any
Employee with or without notice and with or without cause, or the right to
terminate the relationship of any Consultant pursuant to the terms of such
Consultant's agreement with the Company or Affiliate.
(d) The Company may require any person to whom a Stock Award is
granted, or any person to whom a Stock Award is transferred in accordance
with the Plan, as a condition of exercising or acquiring Shares under any
Stock Award, (i) to give written assurances satisfactory to the Company as to
such person's knowledge and experience in financial and business matters
and/or to employ a purchaser representative reasonably satisfactory to the
Company who is knowledgeable and experienced in financial and business
matters, and that he or she is capable of evaluating, alone or together with
the purchaser representative, the merits and risks associated with the Stock
Award, and (ii) to give written assurances satisfactory to the Company
stating that
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such person is acquiring the Shares subject to the Stock Award for such
person's own account and not with any present intention of selling or
otherwise distributing the Shares. The foregoing requirements, and any
assurances given pursuant to such requirements, shall be inoperative if
(i) the issuance of the Shares upon the exercise or acquisition of Shares
under the Stock Award has been registered under a then currently effective
registration statement under the Securities Act, or (ii) as to any particular
requirement, a determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then applicable
securities laws. The Company may, upon advice of counsel to the Company,
place legends on stock certificates issued under the Plan as such counsel
deems necessary or appropriate in order to comply with applicable securities
laws, including, but not limited to, legends restricting the transfer of the
Shares.
(e) To the extent provided by the terms of a Stock Award Agreement,
the person to whom a Stock Award is granted may satisfy any federal, state or
local tax withholding obligation relating to the exercise or acquisition of
Shares under a Stock Award by any of the following means or by a combination
of such means: (i) tendering a cash payment, (ii) authorizing the Company to
withhold Shares from the Shares otherwise issuable to the participant as a
result of the exercise or acquisition of Shares under the Stock Award or
(iii) delivering to the Company owned and unencumbered Shares, including by
delivering to the Company an attestation of ownership of owned and
unencumbered Shares in a form approved by the Company.
12. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the Shares subject to the Plan, or
subject to any Stock Award, without the receipt of consideration by the
Company (through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of Shares, exchange of Shares,
change in corporate structure or other transaction not involving the receipt
of consideration by the Company), the Plan will be appropriately adjusted in
the class(es) and maximum number of Shares subject to the Plan pursuant to
subsection 4(a), and the outstanding Stock Awards will be appropriately
adjusted in the class(es) and number of Shares and price per Share subject to
such outstanding Stock Awards. Such adjustments shall be made by the Board,
the determination of which shall be final, binding and conclusive. (The
conversion of any convertible securities of the Company shall not be treated
as a "transaction not involving the receipt of consideration by the Company.")
(b) In the event of: (1) a dissolution, liquidation or sale of
substantially all of the assets of the Company; (2) a merger or consolidation
in which the Company is not the surviving corporation; (3) a reverse merger
in which the Company is the surviving corporation but the shares of the
Common Stock outstanding immediately preceding the merger are converted by
virtue of the merger into other property, whether in the form of securities,
cash or otherwise; or (4) the acquisition by any person, entity or group
within the meaning of Section 13(d) or 14(d) of the Exchange Act, or any
comparable successor provisions (excluding any employee benefit plan, or
related trust, sponsored or maintained by the Company or any Affiliate of the
Company) of the beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act, or comparable successor rule) of
securities of the Company representing at least fifty percent (50%) of the
combined voting power entitled to vote in the election of directors, then to
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the extent permitted by applicable law: (i) any surviving corporation (or an
Affiliate thereof shall assume any Stock Awards outstanding under the Plan or
shall substitute similar Stock Awards for those outstanding under the Plan,
or (ii) such Stock Awards shall continue in full force and effect. In the
event any surviving corporation (or an Affiliate) refuses to assume or
continue such Stock Awards, or to substitute similar Stock Awards for those
outstanding under the Plan, then the Stock Awards shall be terminated if not
exercised prior to such event.
13. AMENDMENT OF THE PLAN AND STOCK AWARDS.
(a) The Board at any time, and from time to time, may amend the Plan.
(b) The Board, in its sole discretion, may submit the Plan and/or any
amendment to the Plan for stockholder approval.
(c) It is expressly contemplated that the Board may amend the Plan in
any respect the Board deems necessary or advisable to provide those eligible
with the maximum benefits provided or to be provided under the provisions of
the Code and the regulations promulgated thereunder.
(d) Rights and obligations under any Stock Award granted before
amendment of the Plan shall not be impaired by any amendment of the Plan
unless (i) the Company requests the consent of the person to whom the Stock
Award was granted and (ii) such person consents in writing.
(e) The Board at any time, and from time to time, may amend the terms
of any one or more Stock Awards; provided, however, that the rights and
obligations under any Stock Award shall not be impaired by any such amendment
unless (i) the Company requests the consent of the person to whom the Stock
Award was granted and (ii) such person consents in writing.
14. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate when all Shares reserved for
issuance under the Plan have been issued and all such issued Shares are no
longer subject to a repurchase option or a reacquisition option in favor of
the Company. No Stock Awards may be granted under the Plan while the Plan is
suspended or after it is terminated.
(b) Rights and obligations under any Stock Award granted while the
Plan is in effect shall not be impaired by suspension or termination of the
Plan, except with the written consent of the person to whom the Stock Award
was granted.
15. EFFECTIVE DATE OF PLAN.
The Plan shall become effective on April 21, 1999.
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