<PAGE>
As filed with the Securities and Exchange Commission on August 28, 1998.
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
ACACIA RESEARCH CORPORATION
(Exact name of registrant as specified in its charter)
California 95-4405754
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
12 South Raymond Avenue
Pasadena, California 91105
(Address of principal executive offices)
ACACIA RESEARCH CORPORATION 1996 STOCK OPTION PLAN
(Full title of the plan)
Kathryn King-Van Wie
Secretary and Chief Operating Officer
12 South Raymond Avenue
Pasadena, California 91105
(626) 449-6431
(Name, address, and telephone number, including area code, of agent for service)
-------------------
COPY TO
D. Stephen Antion, Esq.
O'Melveny & Myers LLP
400 South Hope Street
Los Angeles, California 90071-2889
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Title of Amount to be Proposed Proposed Amount of
securities to registered maximum maximum registration
be registered offering aggregate fee
price per offering price
unit
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 500,000 $4.4065(2) $2,203,250(2) $649.96(2)
no par value shares(1)
- --------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement covers, in addition to the number of
shares of Common Stock stated above, options and other rights to
purchase or acquire the shares of Common Stock covered by the
Prospectus and, pursuant to Rule 416(c) under the Securities Act of
1933, as amended (the "Securities Act"), an indeterminate number of
shares which by reason of certain events specified in the Plan may
become subject to the Plan.
(2) Pursuant to Rule 457(h), the maximum offering price, per share and in
the aggregate, and the registration fee were calculated based upon the
average of the high and low prices of the Common Stock on August 24,
1998, as reported on the Nasdaq National Market System.
The Exhibit Index for this Registration Statement follows the signature page.
<PAGE>
The Prospectus which contains the information required pursuant
to Section 10(a) of the Securities Act relates to the Registration Statement on
Form S-8 filed on February 21, 1997 (File No. 333-22197).
PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I of
Form S-8 (plan information and registrant information) will be sent or given to
optionees as specified by Rule 428(b)(1) of the Securities Act. Such documents
need not be filed with the Securities and Exchange Commission (the "Commission")
either as part of this Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424 of the Securities Act. These documents, which
include the statement of availability required by Item 2 of Form S-8, and the
documents incorporated by reference in this Registration Statement pursuant to
Item 3 of Form S-8 (Part II hereof), taken together, constitute a prospectus
that meets the requirements of Section 10(a) of the Securities Act.
2
<PAGE>
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of Acacia Research Corporation (the
"Company") filed with the Commission are incorporated herein by reference:
(a) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997;
(b) the Company's Quarterly Reports on Form 10-Q for the
periods ended March 31, 1998 and June 30, 1998;
(c) the Company's Current Report on Form 8-K filed with the
Commission on February 11, 1998 (event date January 27, 1998);
(d) the Company's Current Report on Form 8-K filed with the
Commission on April 17, 1998 (event date April 2, 1998), Amendment No.
1 to Current Report on Form 8-K/A filed with the Commission on June
16, 1998, and Amendment No. 2 to Current Report on Form 8-K/A filed
with the Commission on June 26, 1998; and
(e) the description of the Common Stock contained in the
Company's Registration Statement on Form 8-A, filed with the
Commission on May 11, 1995, and Amendment No. 1 to Form 8-A on Form
8-A/A filed with the Commission on June 5, 1995, and any amendment or
report filed for the purpose of updating such description.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference into the prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in a
document, all or a portion of which is 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 other subsequently filed document which also is or is 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 amended, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
See Item 9.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
See Item 9.
3
<PAGE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
See Item 9.
ITEM 8. EXHIBITS
See the attached Exhibit Index.
ITEM 9. UNDERTAKINGS
The information and contents of the Registration Statement on
Form S-8 previously filed with the Commission on February 21, 1997 (File No.
333-22197) by the Company is incorporated herein by reference. Except for
required opinions, consents, and signature pages and any information required in
this Registration Statement that is not in the above mentioned Registration
Statement, the information required by Part II to be contained in this
Registration Statement is omitted in accordance with General Instruction E to
Form S-8.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Pasadena, State of California, on
August 24, 1998.
ACACIA RESEARCH CORPORATION
By: /s/ Paul R. Ryan
-----------------------------
Paul R. Ryan
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and
appoints Paul R. Ryan, R. Bruce Stewart and Kathryn King-Van Wie his true and
lawful attorney-in-fact and agent, with full powers 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 attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming
all that said attorney-in-fact and agent, or his substitute or substitutes,
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 below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Paul R. Ryan President and Chief August 24, 1998
- ------------------------- Executive Officer
Paul R. Ryan (Principal Executive
Officer)
/s/ R. Bruce Stewart Chairman of the Board and August 24, 1998
- ------------------------- Chief Financial Officer
R. Bruce Stewart (Principal Financial and
Accounting Officer)
/s/ Thomas B. Akin Director August 24, 1998
- -------------------------
Thomas B. Akin
/s/ Fred A. de Boom Director August 24, 1998
- -------------------------
Fred A. de Boom
/s/ Edward W. Frykman Director August 24, 1998
- -------------------------
Edward W. Frykman
</TABLE>
S-1
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<S> <C>
4.1 Acacia Research Corporation 1996 Stock Option Plan (as amended)
4.2 Form of Employee Incentive Stock Option Agreement (1)
4.3 Form of Employee Nonqualified Stock Option Agreement (1)
4.4 Form of Non-Employee Director Nonqualified Stock Option Agreement
5.1 Opinion of Counsel regarding the legality of the Common Stock to be
issued
23.1 Consent of Independent Accountants (Finocchiaro & Co.)
23.2 Consent of Independent Accountants (PricewaterhouseCoopers LLP)
23.3 Consent of Counsel (included in Exhibit 5.1)
24.1 Powers of Attorney (included in this Registration Statement on page
S-1)
</TABLE>
(1) Previously filed and incorporated by reference from the Company's
Registration Statement on Form S-8 filed with the Commission on February 21,
1997 (File No. 333-22197).
<PAGE>
ACACIA RESEARCH CORPORATION
1996 STOCK OPTION PLAN
(as amended March 30, 1998)
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I. THE PLAN...................................................... 1
Section 1.1 Purpose.................................................. 1
Section 1.2 Administration and Authorization; Power and Procedure.... 1
Section 1.3 Participation............................................ 2
Section 1.4 Shares Available for Awards.............................. 2
Section 1.5 Grant of Awards.......................................... 3
Section 1.6 Award Period............................................. 3
Section 1.7 Exercise and Vesting of Awards........................... 3
Section 1.8 No Transferability....................................... 3
ARTICLE II. KEY EMPLOYEE OPTIONS......................................... 4
Section 2.1 Grants................................................... 4
Section 2.2 Option Price............................................. 4
Section 2.3 Limitations on Grant and Terms of Incentive Stock
Options.................................................. 5
Section 2.4 Limits on 10% Holders.................................... 6
Section 2.5 Option Repricing/Cancellation and Regrant................ 6
Section 2.6 Limit on Grants to any Individual........................ 6
ARTICLE III. NON-EMPLOYEE DIRECTOR OPTIONS............................... 6
Section 3.1 Participation............................................ 6
Section 3.2 Annual Option Grants..................................... 6
Section 3.3 Option Price............................................. 7
Section 3.4 Option Period............................................ 7
Section 3.5 Exercise of Options...................................... 7
Section 3.6 Termination of Directorship.............................. 7
Section 3.7 Adjustments.............................................. 7
Section 3.8 Acceleration Upon a Change in Control Event.............. 7
ARTICLE IV. OTHER PROVISIONS............................................. 8
Section 4.1 Rights of Eligible Employees, Participants and
Beneficiaries............................................ 8
Section 4.2 Adjustments; Acceleration................................ 8
Section 4.3 Effect of Termination of Employment...................... 9
Section 4.4 Compliance with Laws..................................... 9
Section 4.5 Tax Withholding.......................................... 9
Section 4.6 Plan Amendment, Termination and Suspension; Changes in
Awards................................................... 9
Section 4.7 Privileges of Stock Ownership............................ 10
Section 4.8 Effective Date of Plan................................... 10
Section 4.9 Term of the Plan......................................... 10
Section 4.10 Governing Law/Construction/Severability................. 10
Section 4.11 Captions................................................ 11
Section 4.12 Effect of Change of Subsidiary Status................... 11
Section 4.13 Non-Exclusivity of Plan................................. 11
ARTICLE V. DEFINITIONS................................................... 11
Section 5.1 Definitions.............................................. 11
</TABLE>
i
<PAGE>
ACACIA RESEARCH CORPORATION
1996 STOCK OPTION PLAN
(AS AMENDED MARCH 30, 1998)
ARTICLE I. THE PLAN
SECTION 1.1 PURPOSE.
The purpose of this Plan is to promote the success of the Company by
providing an additional means through the grant of Awards (a) to attract,
motivate and retain key employees, including officers (whether or not
directors), of the Company with rewards and incentives for high levels of
individual performance and improved financial performance of the Company under
the "Key Employee Program" in Article II, and (b) to attract, motivate and
retain experienced and knowledgeable independent directors through the benefits
provided under the "Non-Employee Director Program" in Article III. "Corporation"
means Acacia Research Corporation and "Company" means the Corporation and its
Subsidiaries, collectively. These terms and other capitalized terms if not
defined elsewhere in the text of this Plan, are defined in Article V.
SECTION 1.2 ADMINISTRATION AND AUTHORIZATION; POWER AND PROCEDURE.
(a) COMMITTEE. This Plan shall be administered by and all Awards to
Eligible Employees shall be authorized by the Committee. Any action of the
Committee with respect to the administration of this Plan shall be taken
pursuant to a majority vote or by written consent of its members.
(b) PLAN AWARDS; INTERPRETATION; POWERS OF COMMITTEE. Subject to the
express provisions of this Plan, the Committee shall have the authority:
(i) to determine from among those eligible persons the particular
Eligible Employees who will receive any Awards;
(ii) to grant Awards to Eligible Employees, determine the price at
which securities will be offered or awarded and the amount of securities
to be offered or awarded to any of such persons, and determine the other
specific terms and conditions of such Awards consistent with the express
limits of this Plan, and establish the installments (if any) in which
such Awards shall become exercisable, or determine that no delayed
exercisability is required, and establish the events of termination of
such Awards;
(iii) to approve the forms of Award Agreements (which need not be
identical either as to type of award or among Participants);
(iv) to construe and interpret this Plan and any agreements defining
the rights and obligations of the Company and Eligible Employee
Participants under this Plan, further define the terms used in this Plan,
and prescribe, amend and rescind rules and regulations relating to the
administration of this Plan;
(v) to cancel, modify or waive the Corporation's rights with respect
to, or modify, discontinue, suspend, or terminate any or all outstanding
Awards held by Eligible Employees, subject to any required consent under
Section 4.6;
(vi) to accelerate or extend the exercisability or extend the term
of any or all such outstanding Awards within the maximum ten-year term of
Awards under Section 1.6; and
(vii) to make all other determinations and take such other action as
contemplated by this Plan or as may be necessary or advisable for the
administration of this Plan and the effectuation of its purposes.
1
<PAGE>
Notwithstanding the foregoing, the provisions of Article III relating to
Non-Employee Director Awards shall be non-discretionary, automatic and, to the
maximum extent possible, self-effectuating. To the extent required, any
interpretation or administration of this Plan in respect of Options granted
under Article III will be the responsibility of the Board.
(c) BINDING DETERMINATIONS. Any action taken by, or inaction of, the
Corporation, any Subsidiary, the Board or the Committee relating or pursuant
to this Plan shall be within the absolute discretion of that entity or body
and shall be conclusive and binding upon all persons. No member of the Board
or Committee, or officer of the Corporation or any Subsidiary, shall be
liable for any such action or inaction of the entity or body, of another
person or, except in circumstances involving bad faith, of himself or
herself. Subject only to compliance with the express provisions hereof, the
Board and Committee may act in their absolute discretion in matters within
their authority related to this Plan.
(d) RELIANCE ON EXPERTS. In making any determination or in taking or
not taking any action under or with respect to this Plan, the Committee or
the Board, as the case may be, may obtain and may rely upon the advice of
experts, including professional advisors to the Corporation. No director,
officer or agent of the Company shall be liable for any such action or
determination taken or made or omitted in good faith.
(e) DELEGATION. The Committee may delegate ministerial,
non-discretionary functions to individuals who are officers or employees of
the Company.
SECTION 1.3 PARTICIPATION.
Awards may be granted by the Committee only to those persons that the
Committee determines to be Eligible Employees. An Eligible Employee who has been
granted an Award may, if otherwise eligible, be granted additional Awards if the
Committee shall so determine. Non-Employee Directors shall not be eligible to
receive any Awards except for Nonqualified Stock Options granted automatically
without further action of the Committee under the provisions of Article III.
SECTION 1.4 SHARES AVAILABLE FOR AWARDS.
Subject to the provisions of Section 4.2, the capital stock that may be
delivered under this Plan shall be shares of the Corporation's authorized but
unissued Common Stock. The shares may be delivered for any lawful consideration.
(a) NUMBER OF SHARES. The maximum aggregate number of shares of Common
Stock that may be delivered pursuant to all Awards granted under this Plan
(including under Articles II and III) shall not exceed 500,000 shares (the
"Share Limit") and the maximum number of shares of Common Stock that may be
delivered under the provisions of Article III shall not exceed 75,000
shares. The maximum number of shares of Common Stock that may be delivered
pursuant to Options qualified as Incentive Stock Options granted under this
Plan is 425,000. Each of the three foregoing numerical limits shall be
subject to adjustments as contemplated by Section 4.2.
(b) CALCULATION OF AVAILABLE SHARES AND REPLENISHMENT. No Option may
be granted under this Plan unless, on the date of grant, the sum of (i) the
maximum number of shares of Common Stock issuable at any time pursuant to
such Option, plus (ii) the number of shares of Common Stock that have
previously been issued pursuant to Options granted under this Plan, other
than reacquired shares available for reissue consistent with any applicable
limitations, plus (iii) the maximum number of shares that may be issued at
any time after such date of grant pursuant to Options that are outstanding
on such date, does not exceed the Share Limit. Shares subject to outstanding
Awards shall be reserved for issuance. If any Award shall expire or be
cancelled or terminated without having been exercised in full, the
unpurchased shares subject thereto shall again, except to the extent
prohibited by law, be
2
<PAGE>
available for the purposes of the Plan. In addition, any Common Stock which
is used by an Eligible Employee Participant as full or partial payment to
the Company for the purchase of Common Stock acquired upon exercise of an
Option and any shares delivered by an Eligible Employee Participant or
withheld by the Company in satisfaction of the tax withholding obligations
of such Participant, shall be available for further awards to Eligible
Employees under this Plan; PROVIDED, HOWEVER, that, to the extent required
to maintain the Plan's status as a qualifying plan under Rule 16b-3, such
shares shall be available for subsequent awards only to Eligible Employees
who are not Section 16 Persons; PROVIDED FURTHER that (except as otherwise
permitted by the Code) no such shares shall be available for future grants
of incentive stock options under this Plan.
SECTION 1.5 GRANT OF AWARDS.
Subject to the express provisions of this Plan, the Committee shall grant
and determine the terms and conditions of all Awards to Eligible Employees, the
number of shares of Common Stock subject to each Award and the price to be paid
for the shares subject to each Award. Each Award shall be evidenced by an Award
Agreement signed by the Corporation and, if required by the Committee, by the
Participant.
SECTION 1.6 AWARD PERIOD.
All Awards to Eligible Employees and all executory rights or obligations
under the related Award Agreements shall expire on such date (if any) as shall
be determined by the Committee, but not later than 10 years after the Award
Date, and shall be subject to earlier termination as provided herein or in the
Award Agreements. The Committee from time to time may authorize by amendment to
or waiver of the Award Agreements or otherwise, as to any number of Awards or
all Awards to Eligible Employees, any extension or acceleration of benefits
thereunder.
SECTION 1.7 EXERCISE AND VESTING OF AWARDS.
(a) PROVISIONS FOR EXERCISE. Unless the Committee otherwise provides,
no Eligible Employee's Award shall be exercisable until at least 6 months
after the initial Award Date and, once exercisable, an Award shall remain
exercisable until the expiration or earlier cancellation or termination of
the Award.
(b) PROCEDURE. Any exercisable Award shall be deemed to be exercised
when the Secretary of the Corporation receives written notice of such
exercise from the Participant, together with any required payment made in
accordance with Section 2.2(a) or 3.3, as the case may be, and Section 4.5.
(c) FRACTIONAL SHARES/MINIMUM ISSUE. Fractional share interests shall
be disregarded, but may be accumulated. The Committee may, however, in the
case of Eligible Employees determine in the Award Agreement or thereafter
that cash, other securities, or other property will be paid or transferred
in lieu of any factional share interests. No fewer than 100 shares may be
required on exercise of an Award at one time unless the number purchased is
the total number at the time available for purchase under the Award.
SECTION 1.8 NO TRANSFERABILITY.
(a) LIMIT ON EXERCISE AND TRANSFER. Unless otherwise expressly provided in
(or pursuant to) this Section 1.8, by applicable law and by the Award Agreement,
as the same may be amended, (i) all Awards are non-transferable and shall not be
subject in any manner to sale, transfer, anticipation, alienation, assignment,
pledge, encumbrance or charge; Awards shall be exercised only by the
Participant; and (ii) amounts payable or shares issuable pursuant to an Award
shall be delivered only to (or for the account of) the Participant.
3
<PAGE>
(b) EXCEPTIONS. The Committee may permit Awards to be exercised by and
paid only to certain persons or entities related to the Participant, including
but not limited to members of the Participant's immediate family, charitable
institutions, or trusts or other entities whose beneficiaries or beneficial
owners are members of the Participant's immediate family and/or charitable
institutions, or to such other persons or entities as may be approved by the
Committee, pursuant to such conditions and procedures as the Committee may
establish. Any permitted transfer shall be subject to the condition that the
Committee receive evidence satisfactory to it that the transfer is being made
for estate and/or tax planning purposes or a gratuitous or donative basis and
without consideration (other than nominal consideration). Incentive Stock
Options shall be subject to any and all additional transfer restrictions under
the Code (notwithstanding Section 1.8(c)).
(c) FURTHER EXCEPTIONS TO LIMITS ON TRANSFER. The exercise and transfer
restrictions in Section 1.8(a) shall not apply to:
(i) transfers to the Corporation,
(ii) the designation of a beneficiary to receive benefits in the
event of the Participant's death or, if the Participant has died,
transfers to or exercise by the Participant's beneficiary, or, in the
absence of a validly designated beneficiary, transfers by will or the
laws of descent and distribution,
(iii) transfers pursuant to a QDRO order,
(iv) if the Participant has suffered a disability, permitted
transfers or exercises on behalf of the Participant by his or her legal
representative, or
(v) the authorization by the Committee of "cashless exercise"
procedures with third parties who provide financing for the purpose of
(or who otherwise facilitate) the exercise of Awards consistent with
applicable laws and the express authorization of the Committee.
ARTICLE II. KEY EMPLOYEE OPTIONS
SECTION 2.1 GRANTS.
One or more Options may be granted under this Article to any Eligible
Employee. Each Option granted may be either an Option intended to be an
Incentive Stock Option, or not so intended, as determined by the Committee, and
such intent shall be indicated in the applicable Award Agreement.
Notwithstanding the preceding sentence, Options granted to Other Eligible
Persons shall only be Nonqualified Stock Options.
SECTION 2.2 OPTION PRICE.
(a) PRICING LIMITS. The purchase price per share of the Common Stock
covered by each Option granted under this Article shall be determined by the
Committee at the time of the Award, but in the case of Incentive Stock
Options shall not be less than 100% (110% in the case of an Eligible
Employee Participant described in Section 2.4) of the Fair Market Value of
the Common Stock on the date of grant.
(b) PAYMENT PROVISIONS. No shares shall be delivered pursuant to the
exercise of an Option granted under this Article until payment of the full
purchase price of such shares is received by the Corporation at its
principal office located at 12 S. Raymond Avenue, Suite B, Pasadena,
California 91105, or at such other place as the Committee may specify from
time to time. Payment methods may include any of the following, pursuant to
such conditions and rules or procedures as may be established by the
Committee from time to time or as may be set forth in the Award Agreement:
(i) In cash;
4
<PAGE>
(ii) In shares of Common Stock already owned by the Participant;
(iii) Partly in cash and partly in shares of Common Stock already
owned by the Participant; or
(iv) By delivery of a notice instructing the Corporation to deliver
the shares being purchased to a broker, subject to the broker's delivery
of cash to the Corporation equal to the purchase price; or
(v) To the extent an applicable Award Agreement so provides, payment
may be made in whole or in part by a promissory note executed by the
recipient of an Award in favor of the Corporation, upon terms and
conditions determined by the Committee, and secured by the Common Stock
issuable upon exercise of the Options granted by such Award in compliance
with applicable law (including, without limitation, state corporate law
and federal margin requirements).
Any shares used for payment pursuant to clause (ii) or (iii) above shall have
been held by the Eligible Employee Participant for at least six months prior to
such exercise date. Common Stock accepted as a payment shall be valued at the
Fair Market Value of the Common Stock on the date of exercise.
(c) RELOAD OPTIONS. The Committee may provide in an Award Agreement
that, effective as of the date of exercise by a Participant of all or part
of an Option (the "Base Option") by delivering shares of Common Stock
already owned by the Participant to the extent permitted by subsection
(b)(ii) or (iii) above, the Eligible Employee Participant shall be granted
an additional Option (a "Reload Option") to purchase at the Fair Market
Value on the date of such exercise and new grant, a number of shares of
Common Stock equal to the number of whole shares (subject to reduction in
the case of an outstanding Incentive Stock Option to the extent necessary to
comply with the $100,000 limit set forth in Section 2.3(a)) used by the
Participant to pay or toward the payment of the exercise price of the Base
Option, provided the Participant at the time of such exercise is an Eligible
Employee. The Reload Option may be exercised between the date six months
after its grant and the original date of expiration of the Base Option or
such later time as the Committee may permit. The Reload Option shall be
evidenced in the Award Agreement for the Base Option or by any other writing
containing such terms and conditions as the Committee shall approve, which
conditions may provide that upon the exercise of any Reload Option, an
additional Reload Option may be granted with respect to the number of whole
shares used to exercise the prior outstanding Reload Option. In no event,
however, shall the aggregate number of additional shares authorized by
Reload Option(s) exceed 50% of the maximum number of shares initially
deliverable (subject to adjustments pursuant to Section 4.2(a)) on exercise
of the Base Option.
SECTION 2.3 LIMITATIONS ON GRANT AND TERMS OF INCENTIVE STOCK OPTIONS.
(a) $100,000 LIMIT. To the extent that the aggregate "fair market
value" (as defined below) of stock with respect to which incentive stock
options first become exercisable by a Participant in any calendar year
exceeds $100,000, taking into account both Common Stock subject to Incentive
Stock Options under this Plan and stock subject to incentive stock options
under all other plans of the Company, such options shall be treated as
Nonqualified Stock Options. For this purpose, the "fair market value" of the
stock subject to options shall be determined as of the date the options were
awarded. In reducing the number of options treated as incentive stock
options to meet the $100,000 limit, the most recently granted options shall
be reduced first. To the extent a reduction of simultaneously granted
options is necessary to meet the $100,000 limit, the Committee may, in the
manner and to the extent permitted by law, designate which shares of Common
Stock are to be treated as shares acquired pursuant to the exercise of an
Incentive Stock Option.
5
<PAGE>
(b) OPTION PERIOD. Each Option and all rights thereunder shall expire
no later than 10 years after the Award Date.
(c) OTHER CODE LIMITS. There shall be imposed in any Award Agreement
relating to Incentive Stock Options such terms and conditions as from time
to time are required in order that the Option be an "incentive stock option"
as that term is defined in Section 422 of the Code.
SECTION 2.4 LIMITS ON 10% HOLDERS.
No Incentive Stock Option may be granted to any person who, at the time the
Option is granted, owns (or is deemed to own under Section 424(d) of the Code)
shares of outstanding Common Stock representing more than 10% of the total
combined voting power of all classes of stock of the Corporation, unless the
exercise price of such Option is at least 110% of the Fair Market Value of the
stock subject to the Option on the date of grant and such Option by its terms is
not exercisable after the expiration of five years from the date such Option is
granted.
SECTION 2.5 OPTION REPRICING/CANCELLATION AND REGRANT.
Subject to Section 1.4 and Section 4.6 and the general limitations on Awards
contained elsewhere in this Plan, the Committee from time to time may authorize,
generally or in specific cases only, any adjustment in the exercise or purchase
price, the number of shares subject to, or the term of, an Award granted under
this Article by cancellation of an outstanding Award and a subsequent regranting
of an Award, by amendment, by substitution of an outstanding Award, by waiver or
by other legally valid means. Such amendment or other action may result among
other changes in an exercise or purchase price which is higher or lower than the
exercise or purchase price of the original or prior Award, provide for a greater
or lesser number of shares subject to the Award, or provide for a longer or
shorter vesting or exercise period.
SECTION 2.6 LIMIT ON GRANTS TO ANY INDIVIDUAL.
The maximum number of shares of Common Stock that are issuable under Options
that during any calendar year are granted to any Eligible Employee Participant
shall not exceed 100,000, subject to adjustments contemplated by Section 4.2.
ARTICLE III. NON-EMPLOYEE DIRECTOR OPTIONS
SECTION 3.1 PARTICIPATION.
Awards under this Article III shall be made only to Non-Employee Directors.
SECTION 3.2 ANNUAL OPTION GRANTS.
(a) TIME OF INITIAL AWARD. Subject to approval by the shareholders of
the Corporation, persons who are Non-Employee Directors at the time of the
Plan's adoption on April 16, 1996, and persons who are elected or appointed
to the Board after April 16, 1996, on the date of such election, shall each
be granted without further action a Nonqualified Stock Option to purchase
10,000 shares of Common Stock.
(b) SUBSEQUENT ANNUAL AWARDS. On the first business day in each
calendar year following the approval of this Plan by the shareholders of the
Corporation and during the term of this Plan, there shall be granted
automatically (without any action by the Committee or the Board) a
Nonqualified Stock Option (the Award Date of which shall be such date) to
each Non-Employee Director then in office to purchase 1,000 shares of Common
Stock on each such date.
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SECTION 3.3 OPTION PRICE.
The purchase price per share of the Common Stock covered by each Option
granted pursuant to Section 3.2 hereof shall be 100 percent of the Fair Market
Value of the Common Stock on the Award Date. The Award Date of Options granted
under Section 3.2(a) shall, for purposes of determining the Option price, be
April 16, 1996 with respect to Options granted to Non-Employee Directors as of
that date, or the date such Option is granted upon election or appointment of
the applicable director to the Board with respect to all other Options granted
under Section 3.2(a). The purchase price of any shares purchased shall be paid
in full at the time of each purchase either (i) in cash or by check of or on
behalf of the Non-Employee Director, (ii) in shares of Common Stock valued at
their Fair Market Value on the date of exercise of the Option or (iii) partly in
such shares and partly in cash; provided that if payments are made pursuant to
clauses (ii) and (iii) above any shares used for such payment shall have been
held by the Non-Employee Director Participant for at least six months prior to
such exercise date.
SECTION 3.4 OPTION PERIOD.
Each option granted under this Article III and all rights or obligations
thereunder shall expire on the fifth anniversary of the Award Date and shall be
subject to earlier termination as provided below.
SECTION 3.5 EXERCISE OF OPTIONS.
Each Option granted under this Article III shall become exercisable in full
12 months after the Award Date, except (i) such Options granted pursuant to
Section 3.2(a), which such Options shall vest at the rate of 2,500 shares of
Common Stock per year on each of the first four anniversaries of the date of
such grant, and (ii) as provided in Section 3.8.
SECTION 3.6 TERMINATION OF DIRECTORSHIP.
An Option granted pursuant to this Article shall, if exercisable on the date
of a Non-Employee Director Participant's termination of service as a director,
remain exercisable only for six months after the date of such termination or
until the expiration of the stated term of such Option, whichever first occurs.
Any Option granted pursuant to Section 3.2 hereof held by such Non-Employee
Director Participant which is not exercisable on the date of termination of
service shall terminate.
SECTION 3.7 ADJUSTMENTS.
Options granted under this Article III shall be subject to adjustment as
provided in Section 4.2, but only to the extent that such adjustment is
consistent with adjustments to Options held by persons other than executive
officers or directors of the Corporation (or, if there are none, consistent in
respect of the underlying shares with the effect on stockholders generally).
SECTION 3.8 ACCELERATION UPON A CHANGE IN CONTROL EVENT.
Upon the occurrence of a Change in Control Event, each Option granted under
Section 3.2 hereof shall become immediately exercisable in full. To the extent
that any Option granted under this Article III (a) is not exercised prior to (i)
a dissolution of the Corporation or (ii) a merger or other corporate event in
which the Corporation does not survive and (b) no provision is (or consistent
with the provisions of Section 3.7 can be) made for the assumption, conversion,
substitution or exchange of the Option, the Option shall terminate upon the
occurrence of such event.
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ARTICLE IV. OTHER PROVISIONS
SECTION 4.1 RIGHTS OF ELIGIBLE EMPLOYEES, PARTICIPANTS AND BENEFICIARIES.
(a) EMPLOYMENT STATUS. Status as an Eligible Employee shall not be
construed as a commitment that any Award will be made under this Plan to an
Eligible Employee or to Eligible Employees generally.
(b) NO EMPLOYMENT CONTRACT. Nothing contained in this Plan (or in any
other documents related to this Plan or to any Award) shall confer upon any
Eligible Employee or other Participant any right to continue in the employ
or other service of the Company or constitute any contract or agreement of
employment or other service, nor shall it interfere in any way with the
right of the Company to change such person's compensation or other benefits
or to terminate the employment of such person, with or without cause, but
nothing contained in this Plan or any document related hereto shall
adversely affect any other contractual right of such person without his or
her consent thereto.
(c) PLAN NOT FUNDED. This Plan is not subject to Title 1 of ERISA and
is not funded. No Participant, Beneficiary or other person shall have any
right, title or interest in any fund or in any specific asset (including
shares of Common Stock, except as expressly otherwise provided) of the
Company by reason of any Award hereunder. Neither the provisions of this
Plan (or of any related documents), nor the creation or adoption of this
Plan, nor any action taken pursuant to the provisions of this Plan shall
create, or be construed to create, a trust of any kind or a fiduciary
relationship between the Company and any Participant, Beneficiary or other
person.
SECTION 4.2 ADJUSTMENTS; ACCELERATION.
(a) ADJUSTMENTS. If there shall occur any extraordinary dividend or
other extraordinary distribution in respect of the Common Stock (whether in
the form of cash, Common Stock, other securities, or other property), or any
recapitalization, stock split (including a stock split in the form of a
stock dividend), reverse stock split, reorganization, merger, combination,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
Common Stock or other securities of the Corporation, or there shall occur
any other like corporate transaction or event in respect of the Common
Stock, then the Committee shall, in such manner and to such extent (if any)
as it deems appropriate and equitable (1) proportionately adjust any or all
of (a) the number and type of shares of Common Stock (or other securities)
which thereafter may be made the subject of Awards (including the specific
maximum numbers of shares set forth elsewhere in this Plan), (b) the number,
amount and type of shares of Common Stock (or other securities or property)
subject to any or all outstanding Awards, and (c) the exercise price of any
or all outstanding Awards, or (2) in the case of an extraordinary dividend
or distribution, merger, reorganization, consolidation, combination, split
up, exchange or spin off make provision for a cash payment or a substitution
or exchange of the securities or property deliverable upon exercise to the
holder of any or all outstanding Awards based upon the distribution or
consideration payable to holders of Common Stock upon or in respect of such
event; PROVIDED, HOWEVER, in each case, that with respect to Awards of
Incentive Stock Options, no such adjustment shall be made which would cause
the Plan to violate Section 424(a) of the Code or any successor provision
thereto.
(b) ACCELERATION OF AWARDS UPON CHANGE IN CONTROL. As to any Eligible
Employee Participant, unless prior to a Change in Control Event the
Committee determines that, upon its occurrence, there shall be no
acceleration of benefits under Awards or determines that only certain or
limited benefits under Awards shall be accelerated and the extent to which
they shall be accelerated, and/or establishes a different time in respect of
such Change in Control Event for such acceleration, then upon the occurrence
of a Change in Control Event each Option shall become immediately
exercisable. The Committee may override the limitations on acceleration in
this Section 4.2(b) by express
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provision in the Award Agreement and may accord any Eligible Employee
Participant a right to refuse such acceleration in such circumstances as the
Committee may approve. Any acceleration of Awards shall comply with
applicable regulatory requirements, including without limitation Section 422
of the Code. The authority and provisions of this Section 4.2 are not
intended to limit the Committee's authority to provide for acceleration of
exercisability of Awards in other circumstances. Further, the Committee may
provide for the termination of any or all of an Eligible Employee
Participant's Awards to the extent they are not exercised as of the date of
any event or transaction in or pursuant to which the Corporation does not
survive. In the case of a transaction intended to be accounted for as a
pooling of interests transaction, the Committee will have no discretion with
respect to the foregoing acceleration of Options.
SECTION 4.3 EFFECT OF TERMINATION OF EMPLOYMENT.
The Committee shall establish in respect of each Award granted to an
Eligible Employee the effect of a termination of employment or services on the
rights and benefits thereunder and in so doing may make distinctions based upon
the cause of termination.
SECTION 4.4 COMPLIANCE WITH LAWS.
This Plan, the granting and vesting of Awards under this Plan and the
issuance and delivery of shares of Common Stock and/or the payment of money or
the use or application of shares under this Plan or under Awards granted
hereunder are subject to compliance with all applicable federal and state laws,
rules and regulations (including but not limited to state and federal securities
laws and federal margin requirements) and to such approvals by any listing,
regulatory or governmental authority as may, in the opinion of counsel for the
Corporation, be necessary or advisable in connection therewith. Any securities
delivered under this Plan shall be subject to such restrictions and the person
acquiring such securities shall, if requested by the Corporation, provide such
assurances and representations to the Corporation as the Corporation may deem
necessary or desirable to assure compliance with all applicable legal
requirements.
SECTION 4.5 TAX WITHHOLDING.
Upon any exercise, vesting, or payment of any Award or, if they require upon
the disposition of shares of Common Stock acquired pursuant to the exercise of
an Incentive Stock Option prior to satisfaction of the holding period
requirements of Section 422 of the Code, the Company shall have the right at its
option to (i) require the Participant (or Beneficiary) to pay or provide for
payment of the amount of any taxes which the Company may be required to withhold
with respect to such transaction or (ii) deduct from any amount payable in cash
the amount of any taxes which the Company may be required to withhold with
respect to such cash amount. In any case where a tax is required to be withheld
in connection with the delivery of shares of Common Stock under this Plan, any
Eligible Employee Participant may elect, to the extent allowed by and pursuant
to such rules and subject to such conditions as the Committee may establish, to
have the Corporation reduce the number of shares to be delivered by (or
otherwise reacquire) that number of shares valued at their then Fair Market
Value to satisfy such withholding obligation.
SECTION 4.6 PLAN AMENDMENT, TERMINATION AND SUSPENSION; CHANGES IN AWARDS.
(a) BOARD AUTHORIZATION. Except as provided in Section 3.9, the Board
may, at any time, terminate or, from time to time, amend, modify or suspend
this Plan, in whole or in part. No Awards may be granted during any
suspension of this Plan or after termination of this Plan, but the Committee
shall retain jurisdiction as to Awards then outstanding in accordance with
the terms of this Plan.
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(b) SHAREHOLDER APPROVAL. To the extent required under Sections 422 or
424 of the Code or any other applicable law, or deemed necessary or
advisable by the Board, any amendment to this Plan shall be subject to
shareholder approval.
(c) AMENDMENTS TO AWARDS. Without limiting any other express authority
of the Committee under, but subject to the express limits of, this Plan, the
Committee by agreement or resolution may waive conditions of or limitations
on Awards to Eligible Employees that the Committee in the prior exercise of
its discretion has imposed, without the consent of a Participant, and may
make other changes to the terms and conditions of Awards that do not affect
in any manner materially adverse to the Eligible Employee Participant, his
or her rights and benefits under an Award.
(d) LIMITATIONS ON AMENDMENTS TO PLAN AND AWARDS. No amendment,
suspension or termination of the Plan or change of or affecting any
outstanding Award shall, without written consent of the Participant, affect
in any manner materially adverse to the Participant any rights or benefits
of the Participant or obligations of the Corporation under any then
outstanding Award granted under this Plan. Changes contemplated by Section
4.2 shall not be deemed to constitute changes or amendments for purposes of
this Section 4.6.
SECTION 4.7 PRIVILEGES OF STOCK OWNERSHIP.
A Participant shall not be entitled to any privilege of stock ownership as
to any shares of Common Stock not actually delivered to and held of record by
him or her, other than benefits incident to the disposition of shares upon due
exercise of an Option consistent with the terms of this Plan. No adjustment will
be made for dividends or other rights as a shareholder for which a record date
is prior to the date of delivery of shares on exercise of an Award.
SECTION 4.8 EFFECTIVE DATE OF PLAN.
This Plan is effective as of April 16, 1996, the date of initial Board
approval, subject to shareholder approval by December 31, 1996.
SECTION 4.9 TERM OF THE PLAN.
No Award shall be granted more than ten years after the initial effective
date of the Plan (the "termination date"). Unless otherwise expressly provided
in this Plan or in an applicable Award Agreement, any Award theretofore granted
may extend beyond such termination date, and all authority of the Committee with
respect to Awards hereunder shall continue during any suspension of this Plan
and in respect of outstanding Awards on such termination date.
SECTION 4.10 GOVERNING LAW/CONSTRUCTION/SEVERABILITY.
(a) CHOICE OF LAW. This Plan, the Awards, all documents evidencing
Awards and all other related documents shall be governed by, and construed
in accordance with the laws of the state of incorporation of the
Corporation.
(b) SEVERABILITY. If any provision shall be held by a court of
competent jurisdiction to be invalid and unenforceable, the remaining
provisions of this Plan shall continue in effect.
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(c) PLAN CONSTRUCTION. It is the intent of the Corporation that this
Plan and Awards hereunder satisfy and be interpreted in a manner that in the
case of Participants who are or may be subject to Section 16(b) of the
Exchange Act satisfies the applicable requirements of Rule 16b-3 thereunder
so that such persons will be entitled to the benefits of Rule 16b-3 or other
exemptive rules under Section 16 of the Exchange Act and will not be
subjected to avoidable liability thereunder and so that persons receiving
Awards under Article III remain "disinterested" under these Rules. If any
provision of this Plan or of any Award would otherwise frustrate or conflict
with the intent expressed above, that provision to the extent possible shall
be interpreted and deemed amended so as to avoid such conflict, but to the
extent of any remaining irreconcilable conflict with such intent as to such
persons in the circumstances, such provision shall be disregarded. It is the
further intent of the Company that Options with an exercise price not less
than Fair Market Value on the date of grant shall qualify as
performance-based compensation under Section 162(m) of the Code, and this
Plan shall be interpreted consistent with such intent.
SECTION 4.11 CAPTIONS.
Captions and headings are given to the sections and subsections of this Plan
solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
SECTION 4.12 EFFECT OF CHANGE OF SUBSIDIARY STATUS.
If an entity ceases to be a Subsidiary, for purposes of this Plan and any
Award hereunder, a termination of employment of each employee of such Subsidiary
who does not continue as an employee of another entity within the Company shall
be deemed to have occurred.
SECTION 4.13 NON-EXCLUSIVITY OF PLAN.
Nothing in this Plan shall limit or be deemed to limit the authority of the
Board or the Committee to grant awards or authorize any other compensation, with
or without reference to the Common Stock, under any other plan or authority.
ARTICLE V. DEFINITIONS.
SECTION 5.1 DEFINITIONS.
(a) "AWARD" shall mean an award of any Option authorized by and
granted under this Plan.
(b) "AWARD AGREEMENT" shall mean any writing setting forth the terms
of an Award that has been authorized by the Committee.
(c) "AWARD DATE" shall mean the date upon which the Committee took
the action granting an Award or such later date as the Committee designates
as the Award Date at the time of the Award, or in the case of Non-Employee
Director Awards under Article III, the date of automatic grant under Article
III.
(d) "AWARD PERIOD" shall mean the period beginning on an Award Date
and ending on the expiration date of such Award.
(e) "BENEFICIARY" shall mean the person, persons, trust or trusts
entitled by will or the laws of descent and distribution to receive the
benefits specified in the Award Agreement and under this Plan in the event
of a Participant's death, and shall mean the Participant's executor or
administrator if no other Beneficiary is identified and able to act under
the circumstances.
(f) "BOARD" shall mean the Board of Directors of the Corporation.
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(g) A "CHANGE IN CONTROL EVENT" shall mean and shall be deemed to
have occurred if and when: (i) within the meaning of Section 13(d) of the
Exchange Act, any person or group becomes a beneficial owner, directly or
indirectly, of securities of the Corporation representing 20% or more of the
combined voting power in the election of directors of the Corporation's then
outstanding securities; (ii) individuals who were members of the Board of
the Corporation immediately prior to a meeting of the shareholders of the
Corporation involving a contest for the election of directors shall not
constitute a majority of the Board following such election; (iii) the
shareholders of the Corporation approve the dissolution or liquidation of
the Corporation; (iv) the shareholders of the Corporation approve an
agreement to merge or consolidate, or otherwise reorganize, with or into one
or more entities which are not subsidiaries, as a result of which less than
50% of the outstanding voting securities of the surviving or resulting
entity are, or are to be, owned by shareholders of the Corporation
immediately prior to such reorganization (assuming for purposes of such
determination that there is no change in the record ownership of the
Corporation's securities from the record date for such approval until such
reorganization and that such record owners hold no securities of the other
parties to such reorganization, excluding from consideration as a former
shareholder any shareholder who is, or as a result of the transaction in
question becomes, an "affiliate", as that term is used the Exchange Act and
the rules promulgated thereunder, of any party to such merger, consolidation
or reorganization); or (v) the shareholders of the Corporation approve the
sale of substantially all of the Corporation's business and/or assets to a
person or entity which is not a Subsidiary.
(h) "CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(i) "COMMITTEE" shall mean a committee appointed by the Board to
administer this Plan, which committee shall be comprised only of two or more
directors or such greater number of directors as may be required under
applicable law, each of whom, (i) in respect of any decision at a time when
the Participant affected by the decision may be subject to Section 162(m) of
the Code, shall be an "outside" director within the meaning of Section
162(m) of the Code and (ii) in respect of any decision affecting a
transaction at a time when the Participant involved in the transaction may
be subject to Section 16 of the Exchange Act, shall be a "non-employee
director" within the meaning of Rule 16b-3(b)(3) promulgated under the
Exchange Act.
(j) "COMMON STOCK" shall mean the Common Stock, no par value, of the
Corporation and such other securities or property as may become the subject
of Awards, or become subject to Awards, pursuant to an adjustment made under
Section 4.2 of this Plan.
(k) "COMPANY" shall mean, collectively, the Corporation and its
Subsidiaries.
(l) "CORPORATION" shall mean Acacia Research Corporation, a
California corporation, and its successors.
(m) "DISINTERESTED" shall mean disinterested within the meaning of
any applicable regulatory requirements, including Rule 16b-3.
(n) "ELIGIBLE EMPLOYEE" shall mean an officer, a key executive, or an
administrative, managerial, production, marketing or sales employee of the
Company, whether or not such person is a director, or an Other Eligible
Person.
(o) "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
(p) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(q) "FAIR MARKET VALUE" shall mean (i) if the Common Stock is listed
and registered on a national securities exchange such as the New York Stock
Exchange or the American Stock Exchange, the simple average of the highest
and lowest quoted selling prices of the Common Stock on such exchange on the
applicable date of determination, or, if no such sales were made on such
date on such
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exchange, then by such method as of the last date prior thereto on which
sales were made, or (ii) if the Common Stock is not listed and registered on
any national securities exchange, the simple average of the bid and ask
prices per share of Common Stock in the over-the-counter market at the end
of the applicable date of determination, or, if for any reason no such
quotations are available, then by such other method as the Committee, in its
sole discretion, shall determine to be appropriate on such date of
determination.
(r) "INCENTIVE STOCK OPTION" shall mean an Option which is designated
as an incentive stock option within the meaning of Section 422 of the Code,
the award of which contains such provision as are necessary to comply with
that section.
(s) "NONQUALIFIED STOCK OPTION" shall mean an Option that is
designated as a Nonqualified Stock Option and shall include any Option
intended as an Incentive Stock Option that fails to meet the applicable
legal requirements thereof. Any Option granted hereunder that is not
designated as an incentive stock option shall be deemed to be designated a
nonqualified stock option under this Plan and not an incentive stock option
under the Code. Options granted under Article III shall be Nonqualified
Stock Options.
(t) "NON-EMPLOYEE DIRECTOR" shall mean a person who is, as of the
applicable date of determination for an award under Article III, (i) a
member of the Board of Directors of the Corporation and not an officer or
employee of the Company or any affiliate, and (ii) eligible to serve on the
Committee.
(u) "OPTION" shall mean an option to purchase Common Stock under this
Plan.
(v) "OTHER ELIGIBLE PERSON" shall mean any other individual
(including significant agents and consultants) who performs substantial
services for the Company of a nature similar to those performed by key
employees, selected to participate in this Plan by the Committee from time
to time. A Non-employee providing bona fide services (other than as an
eligible advisor or consultant) may also be selected as an Other Eligible
Person if such agent's participation in the Plan would not adversely affect
(1) the Corporation's eligibility to use Form S-8 to register under the
Securities Act of 1933, as amended, the offering of shares issuable under
the Plan or (2) the Corporation's compliance with any other applicable laws.
(w) "PARTICIPANT" shall mean a person who has been granted or has
received an Award under this Plan.
(x) "PLAN" shall mean this 1996 Stock Option Plan.
(y) "QDRO" shall mean a qualified domestic relations order as defined
in Section 414(p) of the Code or Title I, Section 206(d)(3) of ERISA (to the
same extent as if this Plan were subject thereto), or the applicable rules
thereunder or other decree accorded relief from transfer restrictions under
Rule 16b-3.
(z) "RULE 16b-3" shall mean Rule 16b-3 as promulgated by the
Securities and Exchange Commission pursuant to the Exchange Act.
(aa) "SECTION 16 PERSON" shall mean a person subject to Section 16(a)
of the Exchange Act.
(bb) "SUBSIDIARY" shall mean any corporation or other entity a
majority of whose outstanding voting stock or voting power is beneficially
owned directly or indirectly by the Corporation.
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ACACIA RESEARCH CORPORATION
NONSTATUTORY STOCK OPTION AGREEMENT
THIS AGREEMENT is dated as of the _____ day of ________,_______ by and between
Acacia Research Corporation, a California corporation (the "Corporation") and
_____________________ (the "Optionee").
W I T N E S S E T H
WHEREAS, the Committee believes that the grant of an Option to the Optionee will
promote the interests of the Corporation by inducing the Optionee to render
faithful and efficient services to the Corporation; and
WHEREAS, pursuant to the Acacia Research Corporation 1996 Stock Option Plan (the
"Plan"), the Corporation has granted to the Optionee, effective as of the ______
day of _________, ______ (the "Award Date"), a Nonstatutory Option to purchase
all or any part of __________ authorized but unissued Shares, par value, upon
the terms and conditions set forth herein and in the Plan (the "Option").
NOW, THEREFORE, in consideration of the past and prospective services
rendered and to be rendered by the Optionee, and the mutual promises and
covenants made herein and the mutual benefits to be derived herefrom, the
parties agree as follows:
1. DEFINED TERMS. Capitalized terms used herein and not otherwise
defined herein shall have the meaning assigned to such terms in the Plan.
2. GRANT OF OPTION. This Nonstatutory Stock Option agreement evidences
the Corporation's grant to the Optionee of the right and option to purchase, on
the terms and conditions set forth herein and in the Plan, all or any part of an
aggregate of _________ authorized but unissued Shares at the price of _______
per Share (the "Exercise Price"). The Corporation has granted the Option as a
matter of separate inducement in connection with the Optionee's employment, and
not in lieu of any salary or other compensation for the Optionee's services.
3. TERM. The Option shall expire on __________, _____ (the Expiration
Date").
4. VESTING OF OPTION.
The Option shall vest in installments for a number of shares (subject to
adjustment as provided in Section 12) as follows:
Date of Vesting Number of Shares (subject
of Option to adjustment) as to
Installment which Option vests
_____________ __________________
<PAGE>
5. EXERCISABILITY OF OPTION. No Options shall become exercisable prior
to six months after the Award Date. After such date, the Option (as to vested
shares only) may be exercised in whole or in part, at the discretion of the
Optionee, from time to time until its expiration or earlier termination. To the
extent that the Optionee does not in any period purchase all or any part of the
Shares to which the Optionee is entitled, the Optionee has the right
cumulatively thereafter to purchase any Shares not so purchased and such right
shall continue until the Option terminates or expires. Fractional Share
interests shall be disregarded, but may be cumulated for purposes of determining
how many Shares have been purchased at any time under the Option. No fewer then
1,000 Shares may be purchased at any time, unless the number purchased is the
total number then available for purchase under the Option.
6. METHOD OF EXERCISE OF OPTION.
(a) WRITTEN NOTICE. Each exercise of the Option shall be by written
notice of exercise duly delivered to the Corporation, specifying the number
of Shares with respect to which the Option is being exercised.
(b) PAYMENT. Such written notice must be accompanied by payment in
full for the Shares to be purchased, and payment may take the following
form:
(i) lawful money of the United States of America or a certified
or bank cashier's check;
(c) SECURITIES LAWS. The written notice of exercise shall specify
that the Shares are being acquired by the Optionee for investment only and
not with a view to resale or distribution.
7. WITHHOLDING TAXES. Upon the exercise of the Option, the Optionee
shall make such arrangements as the Committee may require for the satisfaction
of any federal, state, local or foreign withholding tax obligations arising in
connection with the exercise of the Option. The Optionee agrees that on
disposition of Shares acquired by exercising the Option, the Optionee shall
comply with all requirements of the Committee for satisfaction of any federal,
state, local or foreign withholding tax obligations arising in connection with
the disposition of the Shares.
8. EFFECT OF TERMINATION OF EMPLOYMENT/SERVICES TO CORPORATION. Should
the Optionee cease to provide services to the Corporation, the effect of such
termination Optionee's rights and benefits of Option are dependent on the
circumstances surrounding such termination, which are as follows:
(i) Options shall cease to vest on the date of termination
of Optionee's employment with or provision of services to the
Corporation;
(ii) except as provided in clause (iii) below, the Option
may be exercised at any time with in one year after Optionee's
termination of employment with or provision of services to the
Corporation (to the extent it was exercisable on such date);
<PAGE>
(iii) if Optionee's employment with or provision of services
to the Corporation was terminated for cause (as determined by the
Committee in its sole discretion), the Option and all rights
hereunder, to the extent not previously exercised, shall terminate and
become null and void at such time as Optionee ceases to be employed by
the Corporation;
(iv) if an Optionee dies while employed by or in the midst
of providing services to the Corporation or during the period referred
to in clause (ii) above, the Option shall expire one year after the
date of death. During the one year period after the death of the
Optionee, the Option may be exercised (to the extent it was
exercisable as of the date of death or earlier termination of such
Optionee's employment or provision of services) by the person or
persons to whom the Optionee's rights under the option shall pass by
will or by the applicable laws of descent and distribution;
(v) if an Optionee's employment by or provision of services
to the Corporation was terminated as a result of a "permanent and
total disability" within the meaning of Section 22(e) (3) of the Code,
the Optionee or the Optionee's personal representative as an agent for
the Optionee, shall have one year from the date of termination of
employment/provision of services to exercise the Option (to the extent
it was exercisable on such date).
Nothing in this Section 8 shall be deemed to extend the term of the Option
beyond the Expiration Date nor to limit the Corporation's ability to terminate
the Option at an earlier date pursuant to the other provision of this Agreement
and the Plan.
9. NON-TRANSFERABILITY OF OPTION. This Option and any other rights of
the Optionee under this Agreement or the Plan are non-transferrable as provided
in Section 6 of the Plan.
10. NO RIGHTS AS SHAREHOLDER. The Optionee, or a transferee of the
Optionee, has no rights as a shareholder with respect to any Shares covered by
an Option until the date of the issuance of a stock certificate for such Shares.
11. MODIFICATION, EXTENSION AND ASSUMPTION OF OPTION. The Option may be
modified, extended or assumed from time to time by the Committee within the
limitations of and by the means specified in Section 10 of the Plan.
12. ADJUSTMENT OF OPTION
(a) GENERALLY. As provided in Section 9 of the Plan, the Committee
may make adjustments to the number of Shares covered by the Option, the
Exercise Price of the Option or any other Provision in this Agreement that
the Committee deems necessary or advisable to adjust.
(b) REORGANIZATIONS. In the event that the Corporation is a party to
a merger or other reorganization, or in contemplation of such a merger or
other reorganization, and to the extent that the Committee, in its sole
discretion, so directs, the Corporation may:
<PAGE>
(i) terminate the Option by paying the Optionee the
difference between the Exercise Price and the consideration to be
received by stockholders of the Corporation for "in-the-money" options
and terminate all other options without payment;
(ii) provide for assumption of the Option by the surviving
corporation;
(iii) if the Corporation is a surviving corporation, continue
the Option; or
(iv) take any action with respect to the Option that the
Committee, in its sole discretion, deems necessary or advisable.
13. NOTICES. Any notice to be given under the terms of this Agreement
shall be in writing addressed to the Corporation at its principal office located
at 12 South Raymond Avenue, Pasadena, California 91105, to the attention of
Kathryn King-Van Wie, and to the Optionee at the address given beneath the
Optionee's signature hereto, or at such other address as either party may
hereafter designate in writing to the other.
14. PLAN. The Option is subject to, and the Optionee agrees to be bound
by, all of the terms and conditions of the Plan. The Optionee acknowledges
receipt of a copy of the Plan, which is made a part hereof by this reference.
15. SUCCESSORS. Subject to the Plan, where the context permits,
"Optionee" as used in this Nonstatutory Stock Option Agreement shall include the
Optionee's executor, administrator or persons to whom Optionee's rights pass by
will or the applicable laws of descent and distribution.
16. GOVERNING LAW. The interpretation, performance, and enforcement of
this Agreement shall be governed by the laws of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed on its behalf by a duly authorized officer and the Optionee has
hereunto set his or her hand.
ACACIA RESEARCH CORPORATION
By__________________________________
Title_______________________________
OPTIONEE
____________________________________
(Signature)
____________________________________
(Print Name)
____________________________________
(Address)
____________________________________
(City, State, Zip Code)
<PAGE>
EXHIBIT 5.1
August 26, 1998
Acacia Research Corporation
12 South Raymond Avenue
Pasadena, California 91105
RE: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on Form S-8
(the "Registration Statement") to be filed by you with the Securities and
Exchange Commission on August 26, 1998 in connection with the registration
under the Securities Act of 1933, as amended, of 500,000 shares of your
Common Stock, no par value (the "Shares") for your 1996 Stock Option Plan (as
amended).
We are familiar with the proceedings heretofore taken, and with the
additional proceedings proposed to be taken, by you in connection with the
authorization and proposed issuance and sale of the Shares.
It is our opinion that, subject to said proceedings being duly taken and
completed by you prior to the issuance and sale of the Shares, upon the
issuance and sale thereof in the manner referred to in the Registration
Statement, the Shares will be legally and validly issued, fully paid and
nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement.
Respectfully submitted,
/s/ O'Melveny & Myers LLP
<PAGE>
EXHIBIT 23.1
INDEPENDENT ACCOUNTANTS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Acacia Research Corporation on Form S-8 of our report dated July 31, 1997,
on our audits of the consolidated financial statements of Acacia Research
Corporation as of December 31, 1996 and for the years ended December 31, 1996
and 1995, incorporated by reference into the Annual Report on Form 10-K of
Acacia Research Corporation for the fiscal year ended December 31, 1997.
/s/ FINOCCHIARO & CO.
- ---------------------
Finocchiaro & Co.
Pasadena, California
August 24, 1998
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated March 25, 1998, which appears on
page F-1 of Acacia Research Corporation's Annual Report on Form 10-K for the
year ended December 31, 1997.
PricewaterhouseCoopers LLP
Los Angeles, California
August 24, 1998
