As filed with the Securities and Exchange Commission on July ___, 1997
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
--------------------------
P-COM, INC.
(Exact name of registrant as specified in its charter)
Delaware 77-0289371
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
3175 S. Winchester Boulevard
Campbell, California 95008
(Address of principal executive offices) (Zip Code)
------------------------
P-COM, INC.
1995 STOCK OPTION/STOCK ISSUANCE PLAN
EMPLOYEE STOCK PURCHASE PLAN
CONTROL RESOURCES CORPORATION
-----------------------------
AMENDED AND RESTATED INCENTIVE STOCK OPTION PLAN
1995 INCENTIVE STOCK OPTION PLAN
(Full title of the Plans)
-------------------------
George P. Roberts
Chairman of the Board and Chief Executive Officer
P-COM, INC.
3175 S. Winchester Boulevard, Campbell, California 95008
(Name and address of agent for service)
(408) 866-3666
(Telephone number, including area code, of agent for service)
<TABLE>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
=========================================================================================
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) per Share Price Fee
---------- ------------- --------- ----- ---
Options to purchase Common 1,500,000 N/A N/A N/A
Stock $0.0001 par value
(P-Com, Inc. 1995 Stock
Option/Stock Issuance Plan)
Common Stock, $0.0001 1,500,000 $32.625(2) $48,937,500(2) $14,830.00
par value
(P-Com, Inc. 1995 Stock
Option/Stock Issuance Plan)
Common Stock, $0.0001 150,000 $32.625(2) $4,893,750(2) $1,483.00
par value
(P-Com, Inc.Employee Stock
Purchase Plan)
Options to Purchase Common Stock 78,071 N/A N/A N/A
$0.0001 par value
(Control Resources Corporation
1995 Incentive Stock Option Plan)
Common Stock, $0.0001 par value 78,071 $4.19(3) $327,117 $100.00
(Control Resources Corporation
1995 Incentive Stock
Option Plan)
Total filing fee: $16,413
-------
========================================================================================
</TABLE>
(1) This Registration Statement shall also cover any additional
shares of Common Stock which become issuable under the P-
Com, Inc. 1995 Stock Option/Stock Issuance Plan, the P-Com,
Inc. Employee Stock Purchase Plan and the Control Resources
Corporation 1995 Incentive Stock Option Plan by reason of
any stock dividend, stock split, recapitalization or other
similar transaction effected without the receipt of
consideration which results in an increase in the number of
the outstanding shares of Common Stock of P-Com, Inc.
(2) Calculated solely for purposes of this offering under Rule
457(h) of the Securities Act of 1933, as amended, on the
basis of the fair market value per share of Common Stock of
P-Com, Inc. on June 26, 1997.
(3) Calculated solely for purposes of this offering under Rule
457(h) of the Securities Act of 1933, as amended, on the
basis of the weighted average exercise price of the options.
PART II
Information Required in the Registration Statement
Item 3. Incorporation of Documents by Reference
- ------------------------------------------------
P-Com, Inc. (the "Registrant") hereby incorporates by
reference into this Registration Statement the following
documents previously filed with the Securities and Exchange
Commission (the "SEC"):
(a) The Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996, filed with the
SEC on March 31, 1997;
(b) The Registrant's Quarterly Report on Form 10-Q for
the fiscal quarter ended March 31, 1997, filed with the
SEC on May 15, 1997;
(c) The Registrant's Current Reports on Form 8-K filed
with the SEC on March 21, 1997, as amended, and
June 13, 1997, as amended; and
(d) The Registrant's Registration Statement No. 0-
25356 on Form 8-A filed with the SEC on January 12,
1995 pursuant to Section 12 of the Securities Exchange
Act of 1934, as amended (the 1934 Act") in which there
is described the terms, rights and provisions
applicable to the Registrant's outstanding Common
Stock.
All reports and definitive proxy or information statements
filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934
Act after the date of this Registration Statement and prior to
the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which de-registers
all securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to
be a part hereof from the date of filing of such documents. Any
statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any subsequently
filed document which also 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 superseded, to constitute a part of this
Registration Statement.
Item 4. Description of Securities
- ----------------------------------
Not Applicable.
Item 5. Interests of Named Experts and Counsel
- -------------------------------------------------
Not Applicable.
Item 6. Indemnification of Directors and Officers
- --------------------------------------------------
The Registrant's Certificate of Incorporation limits the
liability of directors to the maximum extent permitted by
Delaware law. Delaware law provides that directors of a
corporation will not be personally liable for monetary damages
for breach of their fiduciary duties as directors, except for
liability (i) for any breach of their duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not
in good faith or that involve intentional misconduct or a knowing
violation of law, (iii) for unlawful payments of dividends or
unlawful stock repurchases or redemptions as provided in Section
174 of the Delaware General Corporation Law, or (iv) for any
transaction from which the director derives an improper personal
benefit.
The Registrant's Bylaws provide that the Registrant shall
indemnify its directors and may indemnify its officers, employees
and other agents to the fullest extent permitted by law. The
Registrant believes that indemnification under its Bylaws covers
at least negligence and gross negligence on the part of an
indemnified party in connection with the defense of any action or
proceeding arising out of such party's status or service as a
director, officer, employee or other agent of the Company upon an
undertaking by such party to repay such advances if it is
ultimately determined that such party is not entitled to
indemnification.
The Registrant has entered into separate indemnification
agreements with each of its directors and officers. These
agreements require the Registrant, among other things, to
indemnify such director or officer against expenses (including
attorneys' fees), judgments, fines and settlements (collectively,
"Liabilities") paid by such individual in connection with any
action, suit or proceeding arising out of such individual's
status or service as a director or officer of the Registrant
(other than Liabilities arising from willful misconduct or
conduct that is knowingly fraudulent or deliberately dishonest)
and to advance expenses incurred by such individual in connection
with any proceeding against such individual with respect to which
such individual may be entitled to indemnification by the
Registrant. The Registrant believes that its Certificate of
Incorporation and Bylaw provisions and indemnification agreements
are necessary to attract and retain qualified persons as
directors and officers.
Item 7. Exemption from Registration Claimed
- --------------------------------------------
Not Applicable.
Item 8. Exhibits
- -----------------
Exhibit
Number Exhibit
- ------- -------
4 Instruments Defining the Rights of Stockholders.
Reference is made to Registrant's Registration
Statement No. 0-25356 on Form 8-A which is
incorporated herein by reference pursuant to Item
3(d).
5 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Price Waterhouse LLP, Independent
Accountants.
23.2 Consent of Ernst & Young, LLP, Independent Accountants.
23.3 Consent of KPMG Peat Marwick, LLP, Independent Accountants.
23.4 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-5 of this
Registration Statement
99.1 P-Com, Inc. 1995 Stock Option/Stock Issuance Plan.
99.2 Form of Notice of Grant of Stock Option (incorporated
by reference to Exhibit No. 99.2 of Registration Statement
No. 33-89908).
99.3 Form of Stock Option Agreement (incorporated by reference to
Exhibit No. 99.3 of Registration Statement No. 33-89908).
99.4 Form of Addendum to Stock Option Agreement
(Limited Stock Appreciation Right) (incorporated by
reference to Exhibit No. 99.4 of Registration
Statement No. 33-89908).
99.5 Form of Addendum to Stock Option Agreement
(Involuntary Termination) (incorporated by reference
to Exhibit No. 99.5 of Registration Statement No. 33-
89908).
99.6 Form of Addendum to Stock Option Agreement
(Financial Assistance) (incorporated by reference to
Exhibit No. 99.6 of Registration Statement No. 33-
89908).
99.7 Form of Addendum to Stock Option Agreement (Special Tax Elections)
(incorporated by reference to Exhibit No. 99.7 of Registration
Statement No. 33-89908).
99.8 Form of Stock Purchase Agreement (incorporated by reference
to Exhibit No. 99.8 of Registration Statement No. 33-89908).
99.9 Form of Stock Issuance Agreement (incorporated by reference
to Exhibit No. 99.9 of Registration Statement No. 33-89908).
99.10 Form of Addendum to Stock Issuance Agreement (Involuntary
Termination) (incorporated by reference to Exhibit No. 99.10 of
Registration Statement No. 33-89908).
99.11 Form of Addendum to Stock Issuance Agreement (Special Tax
Elections) (incorporated by reference to Exhibit No. 99.11 of
Registration Statement No. 33-89908).
99.12 Form of Notice of Grant of Automatic Stock
Option (Initial Grant) (incorporated by reference to
Exhibit No. 99.12 of Registration Statement No.
333-07773).
99.13 Form of Notice of Grant of Automatic Stock
Option (Annual Grant) (incorporated by reference to
Exhibit 99.13 of Registration Statement No.
333-07773).
99.14 Form of Automatic Stock Option Agreement (incorporated by reference
to Exhibit No. 99.14 of Registration Statement No. 33-89908).
99.15 Employee Stock Purchase Plan.
99.16 Form of Stock Purchase Agreement (incorporated
by reference to Exhibit No. 99.16 of Registration
Statement No. 33-89908).
99.17 Form of Enrollment/Change Form (incorporated
by reference to Exhibit No. 99.17 of Registration
Statement No. 33-89908).
99.18 1995 Incentive Stock Option Plan of Control
Resources Corporation.
99.19 Form of Incentive Stock Option Agreement under
1995 Incentive Stock Option Plan of Control
Resources Corporation.
99.20 Form of Stock Option Assumption Agreement for
options granted under 1995 Incentive Stock Option
Plan of Control Resources Corporation.
Item 9. Undertakings
- ---------------------
A. The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement
(i) to include any prospectus required by Section 10(a)(3) of the
1933 Act, (ii) to reflect in the prospectus any facts or events
arising after the effective date of this 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 this Registration Statement and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in this
Registration Statement or any material change to such information
in this Registration Statement; provided, however, that
clauses (1)(i) and (1)(ii) shall not apply if the information
required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the 1934
Act that are incorporated by reference into this Registration
Statement; (2) that for the purpose of determining any liability
under the 1933 Act each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof; and (3) to remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the Registrant's 1995 Stock
Option/Stock Issuance Plan, the Employee Stock Purchase Plan and
the Control Resources Corporation 1995 Incentive Stock Option
Plan.
B. The undersigned Registrant hereby undertakes
that, for purposes of determining any liability under the 1933
Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the 1934 Act that is
incorporated by reference into this Registration Statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
C. Insofar as indemnification for liabilities
arising under the 1933 Act may be permitted to directors,
officers or controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that, in the opinion of the SEC, such indemnification is
against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director,
officer, or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection
with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be
governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, as amended, 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 Campbell, State of
California on this 27th day of June, 1997.
P-Com, Inc.
By: /s/ George P. Roberts
-----------------------------
George P. Roberts
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of P-Com,
Inc., a Delaware corporation, do hereby constitute and appoint
George P. Roberts and Michael J. Sophie and each of them, the
lawful attorneys-in-fact and agents with full power and authority
to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, and any one of them,
determine may be necessary or advisable or required to enable
said corporation to comply with the Securities Act of 1933, as
amended, and any rules or regulations or requirements of the
Securities and Exchange Commission in connection with this
Registration Statement. Without limiting the generality of the
foregoing power and authority, the powers granted include the
power and authority to sign the names of the undersigned officers
and directors in the capacities indicated below to this
Registration Statement, to any and all amendments, both pre-
effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or
documents filed as part of or in conjunction with this
Registration Statement or amendments or supplements thereof, and
each of the undersigned hereby ratifies and confirms that all
said attorneys and agents, or any one of them, shall do or cause
to be done by virtue hereof. This Power of Attorney may be
signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has
executed this Power of Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of
1933, as amended, this Registration Statement has been signed
below by the following persons in the capacities and on the dates
indicated.
Signature Title Date
- --------- ----- ----
/s/ George P. Roberts Chairman of the Board and
- ----------------------- Chief Executive Officer
George P. Roberts (Principal Executive Officer) June 27, 1997
/s/ Michael J. Sophie Vice President, Finance
- ----------------------- and Administration and Chief
Michael J. Sophie Financial Officer (Principal
Financial and Accounting Officer) June 27, 1997
/s/ Gill Cogan Director June 27, 1997
- -----------------------
Gill Cogan
- ----------------------- Director June __, 1997
John A. Hawkins
- ----------------------- Director June ___, 1997
M. Bernard Puckett
- ----------------------- Director June ___, 1997
James J. Sobczak
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
P-COM, INC.
EXHIBIT INDEX
-------------
Exhibit
Number Exhibit
- ------ -------
4 Instruments Defining the Rights of Stockholders.
Reference is made to Registrant's Registration
Statement No. 0-25356 on Form 8-A which is
incorporated herein by reference pursuant to Item
3(d).
5 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Price Waterhouse LLP, Independent Accountants.
23.2 Consent of Ernst & Young, LLP, Independent Accountants.
23.3 Consent of KPMG Peat Marwick, LLP, Independent Accountants.
23.4 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-5 of this
Registration Statement
99.1 P-Com, Inc. 1995 Stock Option/Stock Issuance Plan.
99.2 Form of Notice of Grant of Stock Option (incorporated
by reference to Exhibit No. 99.2 of Registration Statement
No. 33-89908).
99.3 Form of Stock Option Agreement (incorporated by reference
to Exhibit No. 99.3 of Registration Statement No. 33-89908).
99.4 Form of Addendum to Stock Option Agreement
(Limited Stock Appreciation Right) (incorporated by
reference to Exhibit No. 99.4 of Registration
Statement No. 33-89908).
99.5 Form of Addendum to Stock Option Agreement
(Involuntary Termination) (incorporated by reference
to Exhibit No. 99.5 of Registration Statement No. 33-
89908).
99.6 Form of Addendum to Stock Option Agreement
(Financial Assistance) (incorporated by reference to
Exhibit No. 99.6 of Registration Statement No. 33-
89908).
99.7 Form of Addendum to Stock Option Agreement (Special Tax Elections)
(incorporated by reference to Exhibit No. 99.7 of Registration
Statement No. 33-89908).
99.8 Form of Stock Purchase Agreement (incorporated by reference
to Exhibit No. 99.8 of Registration Statement No. 33-89908).
99.9 Form of Stock Issuance Agreement (incorporated by reference
to Exhibit No. 99.9 of Registration Statement No. 33-89908).
99.10 Form of Addendum to Stock Issuance Agreement (Involuntary
Termination) (incorporated by reference to Exhibit No. 99.10 of
Registration Statement No. 33-89908).
99.11 Form of Addendum to Stock Issuance Agreement (Special Tax
Elections) (incorporated by reference to Exhibit No. 99.11 of
Registration Statement No. 33-89908).
99.12 Form of Notice of Grant of Automatic Stock
Option (Initial Grant) (incorporated by reference to
Exhibit No. 99.12 of Registration Statement No.
333-07773).
99.13 Form of Notice of Grant of Automatic Stock
Option (Annual Grant) (incorporated by reference to
Exhibit 99.13 of Registration Statement No.
333-07773).
99.14 Form of Automatic Stock Option Agreement (incorporated by reference
to Exhibit No. 99.14 of Registration Statement No. 33-89908).
99.15 Employee Stock Purchase Plan.
99.16 Form of Stock Purchase Agreement (incorporated
by reference to Exhibit No. 99.16 of Registration
Statement No. 33-89908).
99.17 Form of Enrollment/Change Form (incorporated
by reference to Exhibit No. 99.17 of Registration
Statement No. 33-89908).
99.18 1995 Incentive Stock Option Plan of Control
Resources Corporation.
99.19 Form of Incentive Stock Option Agreement under
1995 Incentive Stock Option Plan of Control
Resources Corporation.
99.20 Form of Stock Option Assumption Agreement for
options granted under 1995 Incentive Stock Option
Plan of Control Resources Corporation.
June 30, 1997
P-Com, Inc.
3175 S. Winchester Blvd.
Campbell, CA 95008
Re: P-Com, Inc. - Registration
Statement for Offering of 1,728,071
Shares of Common Stock
Dear Ladies and Gentlemen:
We refer to your registration on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended, of (i)
1,500,000 shares of Common Stock of the Company available for
issuance under the P-Com, Inc. 1995 Stock Option/Stock Issuance
Plan, (ii) 150,000 shares of Common Stock available for issuance
under the P-Com, Inc. Employee Stock Purchase Plan and (iii)
78,071 shares of Common Stock available for issuance under the
Control Resources Corporation 1995 Incentive Stock Option Plan.
We advise you that, in our opinion, when such shares have been
issued and sold pursuant to the applicable provisions of such
plans and in accordance with the Registration Statement, such
shares will be validly issued, fully paid and nonassessable
shares of the Company's Common Stock.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement.
Very truly yours,
BROBECK, PHLEGER & HARRISON LLP
Exhibit 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this
Registration Statment on Form S-8 (No. 333-____) pertaining
to the 1995 Stock Option/Stock Issuance Plan and Employee
Stock Purchase Plan of P-Com, Inc., of our report dated
April 14, 1997, with respect to the financial statements of
Columbia Spectrum Management, L.P. as of and for the years
ended December 31, 1996 and 1995, included in P-Com, Inc.'s
March 21, 1997 Current Report on Form 8-K, as amended, filed
with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
- -------------------------
ERNST & YOUNG LLP
Vienna, Virginia
June 24, 1997
Exhibit 23.3
CONSENT OF KPMG PEAT MARWICK LLP, INDEPENDENT ACCOUNTANTS
The Board of Directors
Control Resources Corporation:
We consent to the incorporation by reference in this
registration statement on Form S-8 of P-Com, Inc. of our
report dated February 7, 1997, relating to the balance
sheets of Control Resources Corporation ("CRC") as of
December 31, 1996 and 1995, and the related statements of
operations and (accumulated deficit) retained earnings, and
cash flows for each of the years in the two-year period
ended December 31, 1996, which report appears in the Form 8-
K of P-Com, Inc. dated June 13, 1997, as amended. The report
of KPMG Peat Marwick LLP covering the December 31, 1996 and
1995 financial statements contains an explanatory paragraph
that states that CRC's 1996 losses from operations and net
stockholders' deficit raise substantial doubt about CRC's
ability to continue as a going concern. The financial
statements do not include any adjustments that might result
from the outcome of that uncertainty.
KPMG Peat Marwick LLP
Short Hills, New Jersey
June 27, 1997
EXHIBIT 99.1
P-COM, INC.
1995 STOCK OPTION/STOCK ISSUANCE PLAN
-------------------------------------
(As Amended and Restated Effective as of April 1997)
ARTICLE ONE
GENERAL PROVISIONS
------------------
I. PURPOSE OF THE PLAN
This 1995 Stock Option/Stock Issuance Plan is intended
to promote the interests of P-Com, Inc., a Delaware corporation,
by providing eligible persons with the opportunity to acquire a
proprietary interest, or otherwise increase their proprietary
interest, in the Corporation as an incentive for them to remain
in the service of the Corporation.
Capitalized terms shall have the meanings assigned to
such terms in the attached Appendix.
II. STRUCTURE OF THE PLAN
A. The Plan shall be divided into three separate
equity programs:
(i) the Discretionary Option Grant
Program under which eligible persons may, at the
discretion of the Plan Administrator, be granted
options to purchase shares of Common Stock,
(ii) the Stock Issuance Program under
which eligible persons may, at the discretion of the
Plan Administrator, be issued shares of Common Stock
directly, either through the immediate purchase of such
shares or as a bonus for services rendered the
Corporation (or any Parent or Subsidiary), and
(iii) the Automatic Option Grant Program
under which Eligible Directors shall automatically
receive option grants at periodic intervals to purchase
shares of Common Stock.
B. The provisions of Articles One and Five shall
apply to all equity programs under the Plan and shall accordingly
govern the interests of all persons under the Plan.
III. ADMINISTRATION OF THE PLAN
A. The Primary Committee shall have sole and
exclusive authority to administer the Discretionary Option Grant
and Stock Issuance Programs with respect to Section 16 Insiders.
Except to the extent the Primary Committee is granted sole and
exclusive authority under one or more specific provisions of the
Plan, administration of the Discretionary Option Grant and Stock
Issuance Programs with respect to all other persons eligible to
participate in these programs may, at the Board's discretion, be
vested in the Primary Committee or a Secondary Committee, or the
Board may retain the power to administer those programs with
respect to all such persons. The members of the Secondary
Committee may be individuals who are Employees eligible to
receive discretionary option grants or direct stock issuances
under the Plan or any stock option, stock appreciation, stock
bonus or other stock plan of the Corporation (or any Parent or
Subsidiary).
B. Members of the Primary Committee or any Secondary
Committee shall serve for such period of time as the Board may
determine and shall be subject to removal by the Board at any
time. The Board may also at any time terminate the functions of
any Secondary Committee and reassume all powers and authority
previously delegated to such committee.
C. Each Plan Administrator shall, within the scope of
its administrative functions under the Plan, have full power and
authority (subject to the provisions of the Plan) to establish
such rules and regulations as it may deem appropriate for proper
administration of the Discretionary Option Grant and Stock
Issuance Programs and to make such determinations under, and
issue such interpretations of, the provisions of such programs
and any outstanding options or stock issuances thereunder as it
may deem necessary or advisable. Decisions of the Plan
Administrator within the scope of its administrative functions
under the Plan shall be final and binding on all parties who have
an interest in the Discretionary Option Grant or Stock Issuance
Program under its jurisdiction or any option or stock issuance
thereunder.
D. Service on the Primary Committee or the Secondary
Committee shall constitute service as a Board member, and members
of each such committee shall accordingly be entitled to full
indemnification and reimbursement as Board members for their
service on such committee. No member of the Primary Committee or
the Secondary Committee shall be liable for any act or omission
made in good faith with respect to the Plan or any option grants
or stock issuances under the Plan.
E. Administration of the Automatic Option Grant
Program shall be self-executing in accordance with the terms of
that program, and no Plan Administrator shall exercise any
discretionary functions with respect to option grants made
thereunder.
IV. ELIGIBILITY
A. The persons eligible to participate in the
Discretionary Option Grant and Stock Issuance Programs are as
follows:
(i) Employees,
(ii) non-employee members of the Board
or of the board of directors of any Parent or
Subsidiary, and
(iii) consultants or other independent
advisors who provide services to the Corporation (or
any Parent or Subsidiary).
B. Each Plan Administrator shall, within the scope of
its administrative jurisdiction under the Plan, have full
authority to determine, (i) with respect to the option grants
under the Discretionary Option Grant Program, which eligible
persons are to receive option grants, the time or times when such
option grants are to be made, the number of shares to be covered
by each such grant, the status of the granted option as either an
Incentive Option or a Non-Statutory Option, the time or times at
which each option is to become exercisable, the vesting schedule
(if any) applicable to the option shares and the maximum term for
which the option is to remain outstanding and (ii) with respect
to stock issuances under the Stock Issuance Program, which
eligible persons are to receive stock issuances, the time or
times when such issuances are to be made, the number of shares to
be issued to each Participant, the vesting schedule (if any)
applicable to the issued shares and the consideration to be paid
by the Participant for such shares.
C. The Plan Administrator shall have the absolute
discretion either to grant options in accordance with the
Discretionary Option Grant Program or to effect stock issuances
in accordance with the Stock Issuance Program.
D. The individuals eligible to receive option grants
under the Automatic Option Grant Program shall be limited to (i)
those individuals who were serving as non-employee Board members
on February 1, 1996, (ii) those individuals who first become non-
employee Board members after February 1, 1996, whether through
appointment by the Board or election by the Corporation's
stockholders, and (iii) those individuals who continue to serve
as non-employee Board members at one or more Annual Stockholders
Meetings held after February 1, 1996. A non-employee Board
member who has previously been in the employ of the Corporation
(or any Parent or Subsidiary) shall not be eligible to receive an
initial 20,000-share option grant under the Automatic Option
Grant Program at the time he or she first becomes a non-employee
Board member, but such individual shall be eligible to receive
periodic option grants under the Automatic Option Grant Program
upon his or her continued service as a non-employee Board member.
V. STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares
of authorized but unissued or reacquired Common Stock, including
shares repurchased by the Corporation on the open market. The
maximum number of shares of Common Stock which may be issued over
the term of the Plan shall not exceed 4,267,944*/ shares. Such
authorized share reserve is comprised of (i) the number of shares
which remained available for issuance, as of the Plan Effective
Date, under the Predecessor Plan as last approved by the
Corporation's stockholders prior to such date, including the
shares subject to the outstanding options incorporated into the
Plan and any other shares which would have been available for
future option grants under the Predecessor Plan, (ii) an
additional increase of 320,000 shares of Common Stock previously
authorized by the Board and approved by the Corporation's
stockholders prior to the Plan Effective Date, (iii) an
additional increase of 800,000 shares of Common Stock authorized
by the Board on February 1, 1996 and approved by the
Corporation's stockholders at the 1996 Annual Meeting, plus (iv)
a further increase of 1,500,000 shares of Common Stock,
authorized by the Board in April 1997, subject to stockholder
approval at the 1997 Annual Meeting.
B. The number of shares of Common Stock available for
issuance under the Plan shall automatically increase on the first
trading day of each calendar year, beginning with the 1998
calendar year and continuing through calendar year 2001, by an
amount equal to one and six-tenths percent (1.6%) of the total
number of shares of Common Stock outstanding on the last trading
day of the immediately preceding calendar year. No Incentive
Options may be granted on the basis of the additional shares of
Common Stock resulting from such annual increases.
C. No one person participating in the Plan may
receive options, separately exercisable stock appreciation rights
and direct stock issuances for more than 800,000 shares of Common
Stock in the aggregate over the term of the Plan.
D. Shares of Common Stock subject to outstanding
options shall be available for subsequent issuance under the Plan
to the extent (i) the options (including any options incorporated
from the Predecessor Plan) expire or terminate for any reason
prior to exercise in full or (ii) the options are cancelled in
accordance with the cancellation-regrant provisions of Article
Two. Unvested shares issued under the Plan and subsequently
cancelled or repurchased by the Corporation, at the original
option exercise or direct issue price paid per share, pursuant to
the Corporation's repurchase rights under the Plan shall be added
back to the number of shares of Common Stock reserved for
issuance under the Plan and shall accordingly be available for
reissuance through one or more subsequent option grants or direct
stock issuances under the Plan. However, should the exercise
price of an option under the Plan (including any option
incorporated from the Predecessor Plan) be paid with shares of
Common Stock or should shares of Common Stock otherwise issuable
under the Plan be withheld by the Corporation in satisfaction of
the withholding taxes incurred in connection with the exercise of
an option or the vesting of a stock issuance under the Plan, then
the number of shares of Common Stock available for issuance under
the Plan shall be reduced by the gross number of shares for which
the option is exercised or which vest under the stock issuance,
and not by the net number of shares of Common Stock issued to the
holder of such option or stock issuance.
E. Should any change be made to the Common Stock by
reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the
Corporation's receipt of consideration, appropriate adjustments
shall be made to (i) the maximum number and/or class of
securities issuable under the Plan, (ii) the number and/or class
of securities for which any one person may be granted options,
separately exercisable stock appreciation rights and direct stock
issuances over the term of the Plan, (iii) the number and/or
class of securities for which automatic option grants are to be
subsequently made per Eligible Director under the Automatic
Option Grant Program and (iv) the number and/or class of
securities and the exercise price per share in effect under each
outstanding option (including any option incorporated from the
Predecessor Plan) in order to prevent the dilution or enlargement
of benefits thereunder. The adjustments determined by the Plan
Administrator shall be final, binding and conclusive.
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
----------------------------------
I. OPTION TERMS
Each granted option shall be evidenced by one or more
documents in the form approved by the Plan Administrator;
provided, however, that each such document shall comply with the
terms specified below. Each document evidencing an Incentive
Option shall, in addition, be subject to the provisions of the
Plan applicable to such options.
A. Exercise Price.
--------------------
1. The exercise price per share shall be fixed
by the Plan Administrator but shall not be less than eighty-five
percent (85%) of the Fair Market Value per share of Common Stock
on the option grant date.
2. The exercise price shall become immediately
due upon exercise of the option and shall, subject to the
provisions of Section I of Article Five and the documents
evidencing the option grant, be payable in one or more of the
forms specified below:
(i) cash or check made payable to the
Corporation,
(ii) shares of Common Stock held for the
requisite period necessary to avoid a charge to the
Corporation's earnings for financial reporting purposes
and valued at Fair Market Value on the Exercise Date,
or
(iii) to the extent the option is
exercised for vested shares, through a special sale and
remittance procedure pursuant to which the Optionee
shall concurrently provide irrevocable written
instructions to (A) a Corporation-designated brokerage
firm to effect the immediate sale of the purchased
shares and remit to the Corporation, out of the sale
proceeds available on the settlement date, sufficient
funds to cover the aggregate exercise price payable for
the purchased shares plus all applicable Federal, state
and local income and employment taxes required to be
withheld by the Corporation by reason of such exercise
and (B) the Corporation to deliver the certificates for
the purchased shares directly to such brokerage firm in
order to complete the sale transaction.
Except to the extent such sale and remittance procedure
is utilized, payment of the exercise price for the purchased
shares must be made on the Exercise Date.
B. Exercise and Term of Options. Each option shall
-----------------------------------
be exercisable at such time or times, during such period and for
such number of shares as shall be determined by the Plan
Administrator and set forth in the documents evidencing the
option. However, no option shall have a term in excess of ten
(10) years measured from the option grant date.
C. Effect of Termination of Service.
--------------------------------------
1. The following provisions shall govern the
exercise of any options held by the Optionee at the time of
cessation of Service or death:
(i) Any option outstanding at the time
of the Optionee's cessation of Service for any reason
shall remain exercisable for such period of time
thereafter as shall be determined by the Plan
Administrator and set forth in the documents evidencing
the option, but no such option shall be exercisable
after the expiration of the option term.
(ii) Any option exercisable in whole or
in part by the Optionee at the time of death may be
subsequently exercised by the personal representative
of the Optionee's estate or by the person or persons to
whom the option is transferred pursuant to the
Optionee's will or in accordance with the laws of
descent and distribution.
(iii) During the applicable post-Service
exercise period, the option may not be exercised in the
aggregate for more than the number of vested shares for
which the option is exercisable on the date of the
Optionee's cessation of Service. Upon the expiration
of the applicable exercise period or (if earlier) upon
the expiration of the option term, the option shall
terminate and cease to be outstanding for any vested
shares for which the option has not been exercised.
However, the option shall, immediately upon the
Optionee's cessation of Service, terminate and cease to
be outstanding to the extent it is not exercisable for
vested shares on the date of such cessation of Service.
(iv) Should the Optionee's Service be
terminated for Misconduct, then all outstanding options
held by the Optionee shall terminate immediately and
cease to be outstanding.
2. The Plan Administrator shall have complete
discretion, exercisable either at the time an option is granted
or at any time while the option remains outstanding, to:
(i) extend the period of time for which
the option is to remain exercisable following the
Optionee's cessation of Service from the period
otherwise in effect for that option to such greater
period of time as the Plan Administrator shall deem
appropriate, but in no event beyond the expiration of
the option term, and/or
(ii) permit the option to be exercised,
during the applicable post-Service exercise period, not
only with respect to the number of vested shares of
Common Stock for which such option is exercisable at
the time of the Optionee's cessation of Service but
also with respect to one or more additional
installments in which the Optionee would have vested
had the Optionee continued in Service.
D. Stockholder Rights. The holder of an option shall
------------------------
have no stockholder rights with respect to the shares subject to
the option until such person shall have exercised the option,
paid the exercise price and become a holder of record of the
purchased shares.
E. Repurchase Rights. The Plan Administrator shall
------------------------
have the discretion to grant options which are exercisable for
unvested shares of Common Stock. Should the Optionee cease
Service while holding such unvested shares, the Corporation shall
have the right to repurchase, at the exercise price paid per
share, any or all of those unvested shares. The terms upon which
such repurchase right shall be exercisable (including the period
and procedure for exercise and the appropriate vesting schedule
for the purchased shares) shall be established by the Plan
Administrator and set forth in the document evidencing such
repurchase right.
F. Limited Transferability of Options. During the
-----------------------------------------
lifetime of the Optionee, Incentive Options shall be exercisable
only by the Optionee and shall not be assignable or transferable
other than by will or by the laws of descent and distribution
following the Optionee's death. However, a Non-Statutory Option
may, in connection with the Optionee's estate plan, be assigned
in whole or in part during the Optionee's lifetime to one or more
members of the Optionee's immediate family or to a trust
established exclusively for one or more such family members. The
assigned portion may only be exercised by the person or persons
who acquire a proprietary interest in the option pursuant to the
assignment. The terms applicable to the assigned portion shall be
the same as those in effect for the option immediately prior to
such assignment and shall be set forth in such documents issued
to the assignee as the Plan Administrator may deem appropriate.
II. INCENTIVE OPTIONS
The terms specified below shall be applicable to all
Incentive Options. Except as modified by the provisions of this
Section II, all the provisions of Articles One, Two and Five
shall be applicable to Incentive Options. Options which are
specifically designated as Non-Statutory Options when issued
under the Plan shall not be subject to the terms of this Section
II.
A. Eligibility. Incentive Options may only be
------------------
granted to Employees.
B. Exercise Price. The exercise price per share
----------------------
shall not be less than one hundred percent (100%) of the Fair
Market Value per share of Common Stock on the option grant date.
C. Dollar Limitation. The aggregate Fair Market
-------------------------
Value (determined as of the respective date or dates of grant) of
the Common Stock for which one or more options granted to any
Employee under the Plan (or any other option plan of the
Corporation or any Parent or Subsidiary) may for the first time
become exercisable as Incentive Options during any one calendar
year shall not exceed the sum of One Hundred Thousand Dollars
($100,000). To the extent the Employee holds two (2) or more
such options which become exercisable for the first time in the
same calendar year, the foregoing limitation on the
exercisability of such options as Incentive Options shall be
applied on the basis of the order in which such options are
granted.
D. 10% Stockholder. If any Employee to whom an
-----------------------
Incentive Option is granted is a 10% Stockholder, then the
exercise price per share shall not be less than one hundred ten
percent (110%) of the Fair Market Value per share of Common Stock
on the option grant date, and the option term shall not exceed
five (5) years measured from the option grant date.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. In the event of any Corporate Transaction, each
outstanding option shall automatically accelerate so that each
such option shall, immediately prior to the effective date of the
Corporate Transaction, become fully exercisable for all of the
shares of Common Stock at the time subject to such option and may
be exercised for any or all of those shares as fully-vested
shares of Common Stock. However, an outstanding option shall not
so accelerate if and to the extent: (i) such option is, in
connection with the Corporate Transaction, either to be assumed
by the successor corporation (or parent thereof) or to be
replaced with a comparable option to purchase shares of the
capital stock of the successor corporation (or parent thereof),
(ii) such option is to be replaced with a cash incentive program
of the successor corporation which preserves the spread existing
on the unvested option shares at the time of the Corporate
Transaction and provides for subsequent payout in accordance with
the same vesting schedule applicable to such option or (iii) the
acceleration of such option is subject to other limitations
imposed by the Plan Administrator at the time of the option
grant. The determination of option comparability under clause
(i) above shall be made by the Plan Administrator, and its
determination shall be final, binding and conclusive.
B. All outstanding repurchase rights shall also
terminate automatically, and the shares of Common Stock subject
to those terminated rights shall immediately vest in full, in the
event of any Corporate Transaction, except to the extent: (i)
those repurchase rights are to be assigned to the successor
corporation (or parent thereof) in connection with such Corporate
Transaction or (ii) such accelerated vesting is precluded by
other limitations imposed by the Plan Administrator at the time
the repurchase right is issued.
C. The Plan Administrator shall have the discretion,
exercisable either at the time the option is granted or at any
time while the option remains outstanding, to provide for the
automatic acceleration of one or more outstanding options upon
the occurrence of a Corporate Transaction, whether or not those
options are to be assumed or replaced in the Corporate
Transaction.
D. Immediately following the consummation of the
Corporate Transaction, all outstanding options shall terminate
and cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof).
E. Each option which is assumed in connection with a
Corporate Transaction shall be appropriately adjusted,
immediately after such Corporate Transaction, to apply to the
number and class of securities which would have been issuable to
the Optionee in consummation of such Corporate Transaction had
the option been exercised immediately prior to such Corporate
Transaction. Appropriate adjustments shall also be made to the
exercise price payable per share under each outstanding option,
provided the aggregate exercise price payable for such securities
shall remain the same. In addition, appropriate adjustments to
reflect the Corporate Transaction shall be made to (i) the class
and number of securities available for issuance over the
remaining term of the Plan and (ii) the maximum number and/or
class of securities for which any one person may be granted stock
options, separately exercisable stock appreciation rights and
direct stock issuances in the aggregate over the remaining term
of the Plan.
F. Any options which are assumed or replaced in the
Corporate Transaction and do not otherwise accelerate at that
time shall automatically accelerate (and any of the Corporation's
outstanding repurchase rights which do not otherwise terminate at
the time of the Corporate Transaction shall automatically
terminate and the shares of Common Stock subject to those
terminated rights shall immediately vest in full) in the event
the Optionee's Service should subsequently terminate by reason of
an Involuntary Termination within eighteen (18) months following
the effective date of such Corporate Transaction. Any options so
accelerated shall remain exercisable for fully-vested shares
until the earlier of (i) the expiration of the option term or
(ii) the expiration of the one (1)-year period measured from the
effective date of the Involuntary Termination.
G. The Plan Administrator shall have the discretion,
exercisable either at the time the option is granted or at any
time while the option remains outstanding, to (i) provide for
the automatic acceleration of one or more outstanding options
(and the automatic termination of one or more outstanding
repurchase rights with the immediate vesting of the shares of
Common Stock subject to those rights) upon the occurrence of a
Change in Control or (ii) condition any such option acceleration
(and the termination of any outstanding repurchase rights) upon
the subsequent Involuntary Termination of the Optionee's Service
within a specified period following the effective date of such
Change in Control. Any options accelerated in connection with a
Change in Control shall remain fully exercisable until the
expiration of the option term.
H. The portion of any Incentive Option accelerated in
connection with a Corporate Transaction or Change in Control
shall remain exercisable as an Incentive Option only to the
extent the applicable One Hundred Thousand Dollar ($100,000)
limitation is not exceeded. To the extent such dollar limitation
is exceeded, the accelerated portion of such option shall be
exercisable as a Non-Statutory Option under the Federal tax laws.
I. The grant of options under the Discretionary
Option Grant Program shall in no way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its
business or assets.
IV. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to
effect, at any time and from time to time, with the consent of
the affected option holders, the cancellation of any or all
outstanding options under the Discretionary Option Grant Program
(including outstanding options incorporated from the Predecessor
Plan) and to grant in substitution new options covering the same
or different number of shares of Common Stock but with an
exercise price per share based on the Fair Market Value per share
of Common Stock on the new option grant date.
V. STOCK APPRECIATION RIGHTS
A. The Plan Administrator shall have full power and
authority to grant to selected Optionees tandem stock
appreciation rights and/or limited stock appreciation rights.
B. The following terms shall govern the grant and
exercise of tandem stock appreciation rights:
(i) One or more Optionees may be
granted the right, exercisable upon such terms as the
Plan Administrator may establish, to elect between the
exercise of the underlying option for shares of Common
Stock and the surrender of that option in exchange for
a distribution from the Corporation in an amount equal
to the excess of (A) the Fair Market Value (on the
option surrender date) of the number of shares in which
the Optionee is at the time vested under the
surrendered option (or surrendered portion thereof)
over (B) the aggregate exercise price payable for such
shares.
(ii) No such option surrender shall be
effective unless it is approved by the Plan
Administrator. If the surrender is so approved, then
the distribution to which the Optionee shall be
entitled may be made in shares of Common Stock valued
at Fair Market Value on the option surrender date, in
cash, or partly in shares and partly in cash, as the
Plan Administrator shall in its sole discretion deem
appropriate.
(iii) If the surrender of an option is
rejected by the Plan Administrator, then the Optionee
shall retain whatever rights the Optionee had under the
surrendered option (or surrendered portion thereof) on
the option surrender date and may exercise such rights
at any time prior to the later of (A) five (5) business
days after the receipt of the rejection notice or (B)
the last day on which the option is otherwise
exercisable in accordance with the terms of the
documents evidencing such option, but in no event may
such rights be exercised more than ten (10) years after
the option grant date.
C. The following terms shall govern the grant and
exercise of limited stock appreciation rights:
(i) One or more Section 16 Insiders may
be granted limited stock appreciation rights with
respect to their outstanding options.
(ii) Upon the occurrence of a Hostile
Take-Over, each such individual holding one or more
options with such a limited stock appreciation right
shall have the unconditional right (exercisable for a
thirty (30)-day period following such Hostile Take-
Over) to surrender each such option to the Corporation,
to the extent the option is at the time exercisable for
vested shares of Common Stock. In return for the
surrendered option, the Optionee shall receive a cash
distribution from the Corporation in an amount equal to
the excess of (A) the Take-Over Price of the shares of
Common Stock which are at the time vested under each
surrendered option (or surrendered portion thereof)
over (B) the aggregate exercise price payable for such
shares. Such cash distribution shall be paid within
five (5) days following the option surrender date.
(iii) The Plan Administrator shall pre-
approve, at the time the limited right is granted, the
subsequent exercise of that right in accordance with
the terms of the grant and the provisions of this
Section V. No additional approval of the Plan
Administrator or the Board shall be required at the
time of the actual option surrender and cash
distribution.
(iv) The balance of the option (if any)
shall continue in full force and effect in accordance
with the documents evidencing such option.
ARTICLE THREE
STOCK ISSUANCE PROGRAM
----------------------
I. STOCK ISSUANCE TERMS
Shares of Common Stock may be issued under the Stock
Issuance Program through direct and immediate issuances without
any intervening option grants. Each such stock issuance shall be
evidenced by a Stock Issuance Agreement which complies with the
terms specified below.
A. Purchase Price.
--------------------
1. The purchase price per share shall be fixed
by the Plan Administrator, but shall not be less than eighty-five
percent (85%) of the Fair Market Value per share of Common Stock
on the stock issuance date.
2. Subject to the provisions of Section I of
Article Five, shares of Common Stock may be issued under the
Stock Issuance Program for one or both of the following items of
consideration which the Plan Administrator may deem appropriate
in each individual instance:
(i) cash or check made payable to the
Corporation, or
(ii) past services rendered to the
Corporation (or any Parent or Subsidiary).
B. Vesting Provisions.
------------------------
1. Shares of Common Stock issued under the Stock
Issuance Program may, in the discretion of the Plan
Administrator, be fully and immediately vested upon issuance or
may vest in one or more installments over the Participant's
period of Service or upon attainment of specified performance
objectives. The elements of the vesting schedule applicable to
any unvested shares of Common Stock issued under the Stock
Issuance Program, namely:
(i) the Service period to be completed
by the Participant or the performance objectives to be
attained,
(ii) the number of installments in which
the shares are to vest,
(iii) the interval or intervals (if any)
which are to lapse between installments, and
(iv) the effect which death, Permanent
Disability or other event designated by the Plan
Administrator is to have upon the vesting schedule,
shall be determined by the Plan Administrator and incorporated
into the Stock Issuance Agreement.
2. Any new, substituted or additional securities
or other property (including money paid other than as a regular
cash dividend) which the Participant may have the right to
receive with respect to his or her unvested shares of Common
Stock by reason of any stock dividend, stock split,
recapitalization, combination of shares, exchange of shares or
other change affecting the outstanding Common Stock as a class
without the Corporation's receipt of consideration shall be
issued subject to (i) the same vesting requirements applicable to
the Participant's unvested shares of Common Stock and (ii) such
escrow arrangements as the Plan Administrator shall deem
appropriate.
3. The Participant shall have full stockholder
rights with respect to any shares of Common Stock issued to him
or her under the Stock Issuance Program, whether or not his or
her interest in those shares is vested. Accordingly, the
Participant shall have the right to vote such shares and to
receive any regular cash dividends paid on such shares.
4. Should the Participant cease to remain in
Service while holding one or more unvested shares of Common Stock
issued under the Stock Issuance Program or should the performance
objectives not be attained with respect to one or more such
unvested shares of Common Stock, then those shares shall be
immediately surrendered to the Corporation for cancellation, and
the Participant shall have no further stockholder rights with
respect to those shares. To the extent the surrendered shares
were previously issued to the Participant for consideration paid
in cash or cash equivalent (including the Participant's purchase-
money indebtedness), the Corporation shall repay to the
Participant the cash consideration paid for the surrendered
shares and shall cancel the unpaid principal balance of any
outstanding purchase-money note of the Participant attributable
to such surrendered shares.
5. The Plan Administrator may in its discretion
waive the surrender and cancellation of one or more unvested
shares of Common Stock (or other assets attributable thereto)
which would otherwise occur upon the non-completion of the
vesting schedule applicable to such shares. Such waiver shall
result in the immediate vesting of the Participant's interest in
the shares of Common Stock as to which the waiver applies. Such
waiver may be effected at any time, whether before or after the
Participant's cessation of Service or the attainment or non-
attainment of the applicable performance objectives.
II. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. All of the Corporation's outstanding repurchase
rights under the Stock Issuance Program shall terminate
automatically, and all the shares of Common Stock subject to
those terminated rights shall immediately vest in full, in the
event of any Corporate Transaction, except to the extent (i)
those repurchase rights are assigned to the successor corporation
(or parent thereof) in connection with such Corporate Transaction
or (ii) such accelerated vesting is precluded by other
limitations imposed in the Stock Issuance Agreement.
B. The Plan Administrator shall have the discretion,
exercisable either at the time the unvested shares are issued or
at any time while the Corporation's repurchase right remains
outstanding, to provide for the automatic termination of one or
more of those outstanding rights and the immediate vesting of the
shares of Common Stock subject to such rights upon the occurrence
of a Corporate Transaction.
C. Any repurchase rights that are assigned in the
Corporate Transaction shall automatically terminate, and all the
shares of Common Stock subject to those terminated rights shall
immediately vest in full, in the event the Optionee's Service
should subsequently terminate by reason of an Involuntary
Termination within eighteen (18) months following the effective
date of such Corporate Transaction.
D. The Plan Administrator shall have the discretion,
exercisable either at the time the unvested shares are issued or
at any time while the Corporation's repurchase right remains
outstanding, to (i) provide for the automatic termination of one
or more of those outstanding rights and the immediate vesting of
the shares subject to such rights upon the occurrence of a Change
in Control or (ii) condition any such accelerated vesting upon
the subsequent Involuntary Termination of the Participant's
Service within a specified period following the effective date of
such Change in Control.
III. SHARE ESCROW/LEGENDS
Unvested shares may, in the Plan Administrator's
discretion, be held in escrow by the Corporation until the
Participant's interest in such shares vests or may be issued
directly to the Participant with restrictive legends on the
certificates evidencing those unvested shares.
ARTICLE FOUR
AUTOMATIC OPTION GRANT PROGRAM
------------------------------
I. OPTION TERMS
A. Grant Dates. Pursuant to the provisions of the
------------------
February 1, 1996 restatement of this Article Four, option grants
shall be made to Eligible Directors in accordance with the grant
date provisions specified below:
1. Each individual serving as an Eligible
Director on February 1, 1996 was automatically granted on such
date a Non-Statutory Option to purchase 20,000 shares of Common
Stock.
2. Each individual who first becomes an Eligible
Director after February 1, 1996 shall automatically be granted,
on the date such individual is first elected or appointed as a
non-employee Board member, a Non-Statutory Option to purchase
20,000 shares of Common Stock.
3. On the date of each Annual Stockholders
Meeting, beginning with the 1997 Annual Meeting, each individual
who is to continue as an Eligible Director shall automatically be
granted, whether or not he or she is standing for re-election as
a Board member at that Annual Meeting, a Non-Statutory Option to
purchase an additional 2,000 shares of Common Stock, provided
such individual has not received an option grant pursuant to this
Automatic Option Grant Program within six (6) months prior to the
date of such Annual Meeting. There shall be no limit on the
number of such 2,000-share option grants any one Eligible
Director may receive over his or her period of Board service.
The number of shares for which the automatic option grants are to
be made to each newly-elected or continuing Eligible Director
shall be subject to periodic adjustment pursuant to the
applicable provisions of Section V.D. of Article One.
Stockholder approval of this 1997 Restatement at
the 1997 Annual Stockholders Meeting will constitute pre-approval
of each option subsequently granted pursuant to the express terms
of this Automatic Option Grant Program and the subsequent
exercise of that option in accordance with its terms.
B. Exercise Price.
--------------------
1. The exercise price per share shall be equal
to one hundred percent (100%) of the Fair Market Value per share
of Common Stock on the option grant date.
2. The exercise price shall be payable in one or
more of the alternative forms authorized under the Discretionary
Option Grant Program. Except to the extent the sale and
remittance procedure specified thereunder is utilized, payment of
the exercise price for the purchased shares must be made on the
Exercise Date.
C. Option Term. Each option shall have a term of ten
-----------------
(10) years measured from the option grant date.
D. Exercise and Vesting of Options. Each option
---------------------------------------
shall be immediately exercisable for any or all of the option
shares. However, any shares purchased under the option shall be
subject to repurchase by the Corporation, at the exercise price
paid per share, upon the Optionee's cessation of Board service
prior to vesting in those shares. The shares subject to each
option, whether the initial 20,000-share grant or any annual
2,000-share grant, shall vest, and the Corporation's repurchase
right with respect to those shares shall lapse, in a series of
eight (8) successive equal quarterly installments upon the
Optionee's completion of each three (3) months of continued
service as a Board member over the twenty-four (24)-month period
measured from the option grant date.
E. Effect of Termination of Board Service. The
------------------------------------------------
following provisions shall govern the exercise of any options
held by the Optionee at the time the Optionee ceases to serve as
a Board member:
(i) The Optionee (or, in the event of
Optionee's death, the personal representative of the
Optionee's estate or the person or persons to whom the
option is transferred pursuant to the Optionee's will
or in accordance with the laws of descent and
distribution) shall have a twelve (12)-month period
following the date of such cessation of Board service
in which to exercise each such option.
(ii) During the twelve (12)-month
exercise period, the option may not be exercised in the
aggregate for more than the number of vested shares of
Common Stock for which the option is exercisable at the
time of the Optionee's cessation of Board service.
(iii) Should the Optionee cease to serve
as a Board member by reason of death or Permanent
Disability, then all shares at the time subject to the
option shall immediately vest so that such option may,
during the twelve (12)-month exercise period following
such cessation of Board service, be exercised for all
or any portion of such shares as fully-vested shares of
Common Stock.
(iv) In no event shall the option remain
exercisable after the expiration of the option term.
Upon the expiration of the twelve (12)-month exercise
period or (if earlier) upon the expiration of the
option term, the option shall terminate and cease to be
outstanding for any vested shares for which the option
has not been exercised. However, the option shall,
immediately upon the Optionee's cessation of Board
service, terminate and cease to be outstanding to the
extent it is not exercisable for vested shares at that
time.
II. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. In the event of any Corporate Transaction, the
shares of Common Stock at the time subject to each outstanding
option but not otherwise vested shall automatically vest in full
so that each such option shall, immediately prior to the
effective date of the Corporate Transaction, become fully
exercisable for all of the shares of Common Stock at the time
subject to such option and may be exercised for all or any
portion of such shares as fully-vested shares of Common Stock.
Immediately following the consummation of the Corporate
Transaction, each automatic option grant shall terminate and
cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof).
B. In connection with any Change in Control, the
shares of Common Stock at the time subject to each outstanding
option but not otherwise vested shall automatically vest in full
so that each such option shall, immediately prior to the
effective date of the Change in Control, become fully exercisable
for all of the shares of Common Stock at the time subject to such
option and may be exercised for all or any portion of such shares
as fully-vested shares of Common Stock. Each such option shall
remain exercisable for the fully-vested option shares until the
expiration or sooner termination of the option term or the
surrender of the option in connection with a Hostile Take-Over.
C. Upon the occurrence of a Hostile Take-Over, the
Optionee shall have a thirty (30)-day period in which to
surrender to the Corporation each automatic option held by him or
her. The Optionee shall in return be entitled to a cash
distribution from the Corporation in an amount equal to the
excess of (i) the Take-Over Price of the shares of Common Stock
at the time subject to the surrendered option (whether or not the
Optionee is otherwise at the time vested in those shares) over
(ii) the aggregate exercise price payable for such shares. Such
cash distribution shall be paid within five (5) days following
the surrender of the option to the Corporation. Stockholder
approval of the Plan shall constitute pre-approval of the grant
of each such option surrender right under this Automatic Option
Grant Program and the subsequent exercise of such right in
accordance with the terms and provisions of this Section II.C.
No additional approval or consent of the Plan Administrator or
the Board shall be required at the time of the actual option
surrender and cash distribution.
D. The grant of options under the Automatic Option
Grant Program shall in no way affect the right of the Corporation
to adjust, reclassify, reorganize or otherwise change its capital
or business structure or to merge, consolidate, dissolve,
liquidate or sell or transfer all or any part of its business or
assets.
III. REMAINING TERMS
The remaining terms of each option granted under the
Automatic Option Grant Program shall be the same as the terms in
effect for option grants made under the Discretionary Option
Grant Program.
ARTICLE FIVE
MISCELLANEOUS
-------------
I. FINANCING
A. The Plan Administrator may permit any Optionee or
Participant to pay the option exercise price under the
Discretionary Option Grant Program or the purchase price of
shares issued under the Stock Issuance Program by delivering a
promissory note payable in one or more installments. The terms
of any such promissory note (including the interest rate and the
terms of repayment) shall be established by the Plan
Administrator in its sole discretion. Promissory notes may be
authorized with or without security or collateral. In all
events, the maximum credit available to the Optionee or
Participant may not exceed the sum of (i) the aggregate option
exercise price or purchase price payable for the purchased shares
plus (ii) any Federal, state and local income and employment tax
liability incurred by the Optionee or the Participant in
connection with the option exercise or share purchase.
B. The Plan Administrator may, in its discretion,
determine that one or more such promissory notes shall be subject
to forgiveness by the Corporation in whole or in part upon such
terms as the Plan Administrator may deem appropriate.
II. TAX WITHHOLDING
A. The Corporation's obligation to deliver shares of
Common Stock upon the exercise of options or stock appreciation
rights or upon the issuance or vesting of such shares under the
Plan shall be subject to the satisfaction of all applicable
Federal, state and local income and employment tax withholding
requirements.
B. The Plan Administrator may, in its discretion,
provide any or all holders of Non-Statutory Options or unvested
shares of Common Stock under the Plan (other than the options
granted or the shares issued under the Automatic Option Grant
Program) with the right to use shares of Common Stock in
satisfaction of all or part of the Taxes incurred by such holders
in connection with the exercise of their options or the vesting
of their shares. Such right may be provided to any such holder
in either or both of the following formats:
(i) Stock Withholding: The election to
--------------------------
have the Corporation withhold, from the shares of
Common Stock otherwise issuable upon the exercise of
such Non-Statutory Option or the vesting of such
shares, a portion of those shares with an aggregate
Fair Market Value equal to the percentage of the Taxes
(not to exceed one hundred percent (100%)) designated
by the holder.
(ii) Stock Delivery: The election to
-------------------------
deliver to the Corporation, at the time the Non-
Statutory Option is exercised or the shares vest, one
or more shares of Common Stock previously acquired by
such holder (other than in connection with the option
exercise or share vesting triggering the Taxes) with an
aggregate Fair Market Value equal to the percentage of
the Taxes (not to exceed one hundred percent (100%))
designated by the holder.
III. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan became effective on the date on which the
Underwriting Agreement was executed and the initial public
offering price of the Common Stock was established. The Plan
serves as the successor to the Predecessor Plan, and no further
option grants shall be made under the Predecessor Plan after the
Plan Effective Date. All options outstanding under the
Predecessor Plan on the Plan Effective Date have been
incorporated into the Plan and treated as outstanding options
under the Plan. However, each outstanding option so incorporated
shall continue to be governed solely by the terms of the
documents evidencing such option, and no provision of the Plan
shall be deemed to affect or otherwise modify the rights or
obligations of the holders of such incorporated options with
respect to their acquisition of shares of Common Stock.
B. The Plan was amended and restated by the Board,
effective February 1, 1996 (the "February 1996 Restatement") to
effect the following revisions: (i) increase the maximum number
of shares of Common Stock authorized for issuance over the term
of the Plan by an additional 800,000 shares to 2,767,944 shares
and (ii) enhance the benefit and eligibility provisions of the
Automatic Option Grant Program in order to (A) effect an
automatic option grant for 20,000 shares of Common Stock on
February 1, 1996 to each individual serving as a non-employee
Board member at that time, (B) increase the number of shares for
which an initial option grant is to be made under the Automatic
Option Grant Program to each newly-elected non-employee Board
member to 20,000 shares, (C) authorize a series of automatic
option grants to be made annually to each non-employee Board
member, in the amount of 2,000 shares per annual grant, over that
individual's period of continued service as a Board member and
(D) allow non-employee Board members who joined the Board prior
to the implementation of the Plan to qualify for such annual
option grants. The February 1996 Restatement became effective
immediately upon adoption by the Board and was approved by the
Corporation's stockholders at the 1996 Annual Meeting. All
option grants made under the Plan prior to the February 1996
Restatement shall remain outstanding in accordance with the terms
and conditions of the respective instruments evidencing those
options, and nothing in the February 1996 Restatement shall be
deemed to modify or in any way affect those outstanding options.
C. In April 1997, the Board further amended and
restated the Plan (the "April 1997 Restatement") to effect the
following revisions: (i) increase the number of shares of Common
Stock reserved for issuance over the term of the Plan by an
additional 1,500,000 shares to 4,267,944 shares, (ii) implement
an automatic share increase feature pursuant to which the number
of shares available for issuance under the 1995 Plan shall
automatically increase on the first trading day of each calendar
year, beginning with the 1998 calendar year and continuing
through calendar year 2001, by an amount equal to one and six
tenths percent (1.6%) of the total number of shares of Common
Stock outstanding on the last trading day of the immediately
preceding calendar year, (iii) render the non-employee Board
members eligible to receive option grants under the Discretionary
Option Grant and Stock Issuance Programs, (iv) allow unvested
shares issued under the Plan and subsequently repurchased by the
Corporation at the option exercise or direct issue price paid per
share to be reissued under the Plan, (v) remove certain
restrictions on the eligibility of non-employee Board members to
serve as Plan Administrator and (vi) effect a series of
additional changes to the provisions of the Plan (including the
stockholder approval requirements) in order to take advantage of
the recent amendments to Rule 16b-3 of the Securities and
Exchange Commission which exempts certain officer and director
transactions under the Plan from the short-swing liability
provisions of the federal securities laws.
The April 1997 Restatement is subject to stockholder
approval at the 1997 Annual Meeting, and no option grants made on
the basis of the 1,500,000-share increase under the April 1997
Restatement shall become exercisable in whole or in part unless
and until the April 1997 Restatement is approved by the
stockholders. Should such stockholder approval not be obtained,
then each option grant made pursuant to the 1,500,000-share
increase shall terminate and cease to remain outstanding without
ever becoming exercisable for those shares, and no additional
option grants shall be made on the basis of that share increase.
In addition, the automatic annual share increase feature shall
not be implemented. However, the provisions of the Plan as in
effect immediately prior to the April 1997 Restatement shall
automatically be reinstated, and option grants and direct stock
issuances may thereafter continue to be made pursuant to the
reinstated provisions of the Plan. All option grants and stock
issuances made prior to the April 1997 Restatement shall remain
outstanding in accordance with the terms and conditions of the
respective instruments evidencing those options or issuances, and
nothing in the April 1997 Restatement shall be deemed to modify
or in any way affect those outstanding options or issuances.
Subject to the foregoing limitations, the Plan Administrator may
make option grants and direct stock issuances under the Plan at
any time before the date fixed herein for the termination of the
Plan.
D. The option/vesting acceleration provisions of
Article Two relating to Corporate Transactions and Changes in
Control may, in the Plan Administrator's discretion, be extended
to one or more options incorporated from the Predecessor Plan
which do not otherwise provide for such acceleration.
E. The Plan shall terminate upon the earliest of
(i) January 10, 2005, (ii) the date on which all shares available
for issuance under the Plan shall have been issued pursuant to
the exercise of the options or the issuance of shares (whether
vested or unvested) under the Plan or (iii) the termination of
all outstanding options in connection with a Corporate
Transaction. Upon such Plan termination, all options and
unvested stock issuances outstanding on such date shall
thereafter continue to have force and effect in accordance with
the provisions of the documents evidencing such options or
issuances.
IV. AMENDMENT OF THE PLAN
A. The Board shall have complete and exclusive power
and authority to amend or modify the Plan in any or all respects.
However, (i) no such amendment or modification shall adversely
affect the rights and obligations with respect to options, stock
appreciation rights or unvested stock issuances at the time
outstanding under the Plan unless the Optionee or the Participant
consents to such amendment or modification, and (ii) any
amendment made to the Automatic Option Grant Program (or any
options outstanding thereunder) shall be in compliance with the
limitations of that program. In addition, certain amendments may
require stockholder approval pursuant to applicable laws or
regulations.
B. Options to purchase shares of Common Stock may be
granted under the Discretionary Option Grant Program and shares
of Common Stock may be issued under the Stock Issuance Program
that are in each instance in excess of the number of shares then
available for issuance under the Plan, provided any excess shares
actually issued under those programs are held in escrow until
there is obtained stockholder approval of an amendment
sufficiently increasing the number of shares of Common Stock
available for issuance under the Plan. If such stockholder
approval is not obtained within twelve (12) months after the date
the first such excess grants or issuances are made, then (i) any
unexercised options granted on the basis of such excess shares
shall terminate and cease to be outstanding and (ii) the
Corporation shall promptly refund to the Optionees and the
Participants the exercise or purchase price paid for any excess
shares issued under the Plan and held in escrow, together with
interest (at the applicable Short Term Federal Rate) for the
period the shares were held in escrow, and such shares shall
thereupon be automatically cancelled and cease to be outstanding.
V. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the
sale of shares of Common Stock under the Plan shall be used for
general corporate purposes.
VI. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of
any option or stock appreciation right under the Plan and the
issuance of any shares of Common Stock (i) upon the exercise of
any option or stock appreciation right or (ii) under the Stock
Issuance Program shall be subject to the Corporation's
procurement of all approvals and permits required by regulatory
authorities having jurisdiction over the Plan, the options and
stock appreciation rights granted under it and the shares of
Common Stock issued pursuant to it.
B. No shares of Common Stock or other assets shall be
issued or delivered under the Plan unless and until there shall
have been compliance with all applicable requirements of Federal
and state securities laws, including the filing and effectiveness
of the Form S-8 registration statement for the shares of Common
Stock issuable under the Plan, and all applicable listing
requirements of any stock exchange (or the Nasdaq National
Market, if applicable) on which Common Stock is then listed for
trading.
VII. NO EMPLOYMENT/SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee or
the Participant any right to continue in Service for any period
of specific duration or interfere with or otherwise restrict in
any way the rights of the Corporation (or any Parent or
Subsidiary employing or retaining such person) or of the Optionee
or the Participant, which rights are hereby expressly reserved by
each, to terminate such person's Service at any time for any
reason, with or without cause.
APPENDIX
The following definitions shall be in effect under the
Plan:
A. Automatic Option Grant Program shall mean the automatic
-----------------------------------
option grant program in effect under the Plan.
B. Board shall mean the Corporation's Board of Directors.
----------
C. Change in Control shall mean a change in ownership or
----------------------
control of the Corporation effected through either of the
following transactions:
(i) the acquisition, directly or indirectly,
by any person or related group of persons (other than
the Corporation or a person that directly or indirectly
controls, is controlled by, or is under common control
with, the Corporation) of beneficial ownership (within
the meaning of Rule 13d-3 of the 1934 Act) of
securities possessing more than fifty percent (50%) of
the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange
offer made directly to the Corporation's stockholders,
or
(ii) a change in the composition of the Board
over a period of thirty-six (36) consecutive months or
less such that a majority of the Board members ceases,
by reason of one or more contested elections for Board
membership, to be comprised of individuals who either
(A) have been Board members continuously since the
beginning of such period or (B) have been elected or
nominated for election as Board members during such
period by at least a majority of the Board members
described in clause (A) who were still in office at the
time such election or nomination was approved by the
Board.
D. Code shall mean the Internal Revenue Code of 1986, as
---------
amended.
E. Common Stock shall mean the Corporation's common stock.
-----------------
F. Corporate Transaction shall mean either of the
----------------------------
following stockholder-approved transactions to which the
Corporation is a party:
(i) a merger or consolidation in which
securities possessing more than fifty percent (50%) of
the total combined voting power of the Corporation's
outstanding securities are transferred to a person or
persons different from the persons holding those
securities immediately prior to such transaction; or
(ii) the sale, transfer or other disposition
of all or substantially all of the Corporation's assets
in complete liquidation or dissolution of the
Corporation.
G. Corporation shall mean P-Com, Inc., a Delaware
-----------------
corporation.
H. Discretionary Option Grant Program shall mean the
-----------------------------------------
discretionary option grant program in effect under the Plan.
I. Eligible Director shall mean a non-employee Board
------------------------
member eligible to participate in the Automatic Option Grant
Program in accordance with the provisions of Section IV.E of
Article One.
J. Employee shall mean an individual who is in the employ
-------------
of the Corporation (or any Parent or Subsidiary), subject to the
control and direction of the employer entity as to both the work
to be performed and the manner and method of performance.
K. Exercise Date shall mean the date on which the
--------------------
Corporation shall have received written notice of the option
exercise.
L. Fair Market Value per share of Common Stock on any
------------------------
relevant date shall be determined in accordance with the
following provisions:
(i) If the Common Stock is at the time
traded on the Nasdaq National Market, then the Fair
Market Value shall be the closing selling price per
share of Common Stock on the date in question, as such
price is reported by the National Association of
Securities Dealers on the Nasdaq National Market or any
successor system. If there is no closing selling price
for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on
the last preceding date for which such quotation
exists.
(ii) If the Common Stock is at the time
listed on any Stock Exchange, then the Fair Market
Value shall be the closing selling price per share of
Common Stock on the date in question on the Stock
Exchange determined by the Plan Administrator to be the
primary market for the Common Stock, as such price is
officially quoted in the composite tape of transactions
on such exchange. If there is no closing selling price
for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on
the last preceding date for which such quotation
exists.
M. Hostile Take-Over shall mean the acquisition, directly
----------------------
or indirectly, by any person or related group of persons (other
than the Corporation or a person that directly or indirectly
controls, is controlled by, or is under common control with, the
Corporation) of beneficial ownership (within the meaning of Rule
13d-3 of the 1934 Act) of securities possessing more than fifty
percent (50%) of the total combined voting power of the
Corporation's outstanding securities pursuant to a tender or
exchange offer made directly to the Corporation's stockholders
which the Board does not recommend such stockholders to accept.
N. Incentive Option shall mean an option which satisfies
----------------------
the requirements of Code Section 422.
O. Involuntary Termination shall mean the termination of
----------------------------
the Service of any individual which occurs by reason of:
(i) such individual's involuntary dismissal
or discharge by the Corporation for reasons other than
Misconduct, or
(ii) such individual's voluntary resignation
following (A) a change in his or her position with the
Corporation which materially reduces his or her level
of responsibility, (B) a reduction in his or her level
of compensation (including base salary, fringe benefits
and any non-discretionary and objective-standard
incentive payment or bonus award) by more than fifteen
percent (15%) or (C) a relocation of such individual's
place of employment by more than fifty (50) miles,
provided and only if such change, reduction or
relocation is effected by the Corporation without the
individual's consent.
P. Misconduct shall mean the commission of any act of
----------------
fraud, embezzlement or dishonesty by the Optionee or Participant,
any unauthorized use or disclosure by such person of confidential
information or trade secrets of the Corporation (or any Parent or
Subsidiary) or any other intentional misconduct by such person
adversely affecting the business or affairs of the Corporation
(or any Parent or Subsidiary) in a material manner. The
foregoing definition shall not be deemed to be inclusive of all
the acts or omissions which the Corporation (or any Parent or
Subsidiary) may consider as grounds for the dismissal or
discharge of any Optionee, Participant or other person in the
Service of the Corporation (or any Parent or Subsidiary).
Q. 1934 Act shall mean the Securities Exchange Act of
---------------
1934, as amended.
R. Non-Statutory Option shall mean an option not intended
-------------------------
to satisfy the requirements of Code Section 422.
S. Optionee shall mean any person to whom an option is
--------------
granted under the Discretionary Option Grant or Automatic Option
Grant Program.
T. Parent shall mean any corporation (other than the
------------
Corporation) in an unbroken chain of corporations ending with the
Corporation, provided each corporation in the unbroken chain
(other than the Corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of
the other corporations in such chain.
U. Participant shall mean any person who is issued shares
----------------
of Common Stock under the Stock Issuance Program.
V. Permanent Disability or Permanently Disabled shall mean
-------------------------------------------------
the inability of the Optionee or the Participant to engage in any
substantial gainful activity by reason of any medically
determinable physical or mental impairment expected to result in
death or to be of continuous duration of twelve (12) months or
more.
W. Plan shall mean the Corporation's 1995 Stock
-----------
Option/Stock Issuance Plan, as set forth in this document and as
amended from time to time.
X. Plan Administrator shall mean the particular entity,
------------------------
whether the Primary Committee, the Board or the Secondary
Committee, which is authorized to administer the Discretionary
Option Grant and Stock Issuance Programs with respect to one or
more classes of eligible persons, to the extent such entity is
carrying out its administrative functions under those programs
with respect to the persons under its jurisdiction.
Y. Plan Effective Date shall mean the date on which the
-------------------------
Underwriting Agreement was executed and the initial public
offering price was established.
Z. Predecessor Plan shall mean the Corporation's 1992
-----------------------
Stock Option Plan.
AA. Primary Committee shall mean the committee of two (2)
----------------------
or more non-employee Board members appointed by the Board to
administer the Discretionary Option Grant and Stock Issuance
Programs with respect to Section 16 Insiders.
AB. Secondary Committee shall mean a committee of two (2)
------------------------
or more Board members appointed by the Board to administer the
Discretionary Option Grant and Stock Issuance Programs with
respect to eligible persons other than Section 16 Insiders.
AC. Section 16 Insider shall mean an officer or director of
-----------------------
the Corporation subject to the short-swing profit liabilities of
Section 16 of the 1934 Act.
AD. Section 12(g) Registration Date shall mean the first
-------------------------------------
date on which the Common Stock is registered under Section 12(g)
of the 1934 Act.
AE. Service shall mean the provision of services to the
-------------
Corporation (or any Parent or Subsidiary) by a person in the
capacity of an Employee, a non-employee member of the board of
directors or a consultant or independent advisor, except to the
extent otherwise specifically provided in the documents
evidencing the option grant.
AF. Stock Exchange shall mean either the American Stock
---------------------
Exchange or the New York Stock Exchange.
AG. Stock Issuance Agreement shall mean the agreement
-------------------------------
entered into by the Corporation and the Participant at the time
of issuance of shares of Common Stock under the Stock Issuance
Program.
AH. Stock Issuance Program shall mean the stock issuance
----------------------------
program in effect under the Plan.
AI. Subsidiary shall mean any corporation (other than the
---------------
Corporation) in an unbroken chain of corporations beginning with
the Corporation, provided each corporation in the unbroken chain
(other than the last corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of
the other corporations in such chain.
AJ. Take-Over Price shall mean the greater of (i) the Fair
--------------------
Market Value per share of Common Stock on the date the option is
surrendered to the Corporation in connection with a Hostile Take-
Over or (ii) the highest reported price per share of Common Stock
paid by the tender offeror in effecting such Hostile Take-Over.
However, if the surrendered option is an Incentive Option, the
Take-Over Price shall not exceed the clause (i) price per share.
AK. 10% Stockholder shall mean the owner of stock (as
----------------------
determined under Code Section 424(d)) possessing more than ten
percent (10%) of the total combined voting power of all classes
of stock of the Corporation (or any Parent or Subsidiary).
AL. Taxes shall mean the Federal, state and local income
-----------
and employment tax liabilities incurred by the holder of Non-
Statutory Options or unvested shares of Common Stock in
connection with the exercise of such holder's options or the
vesting of his or her shares.
AM. Underwriting Agreement shall mean the agreement
-----------------------------
executed between the Corporation and the underwriter or
underwriters managing the initial public offering of the Common
Stock.
_______________________________
*/ All share numbers in this Plan reflect (i) the 1-for-3
reverse split of the Common Stock effected after the Board's
adoption of the Plan but prior to the Plan Effective Date and
(ii) the 2-for-1 split of the Common Stock effected October 27,
1995.
EXHIBIT 99.15
P-COM, INC.
EMPLOYEE STOCK PURCHASE PLAN
----------------------------
(As Amended and Restated Effective as of April 1997)
I. PURPOSE OF THE PLAN
This Employee Stock Purchase Plan is intended to
promote the interests of P-Com, Inc. by providing eligible
employees with the opportunity to acquire a proprietary interest
in the Corporation through participation in a payroll-deduction
based employee stock purchase plan designed to qualify under
Section 423 of the Code.
Capitalized terms herein shall have the meanings
assigned to such terms in the attached Appendix.
All share numbers in this document reflect (i) the 1-
for-3 reverse split of the Common Stock effected after the
Board's adoption of the Plan but prior to the Effective Time and
(ii) the 2-for-1 forward split of the Common Stock effected
October 27, 1995.
II. ADMINISTRATION OF THE PLAN
The Plan Administrator shall have full authority to
interpret and construe any provision of the Plan and to adopt
such rules and regulations for administering the Plan as it may
deem necessary in order to comply with the requirements of Code
Section 423. Decisions of the Plan Administrator shall be final
and binding on all parties having an interest in the Plan.
III. STOCK SUBJECT TO PLAN
A. The stock purchasable under the Plan shall be
shares of authorized but unissued or reacquired Common Stock,
including shares of Common Stock purchased on the open market.
The maximum number of shares of Common Stock which may be issued
over the term of the Plan shall not exceed Four Hundred Fifty
Thousand (450,000) shares. Such authorized share reserve is
comprised of (i) the Two Hundred Thousand (200,000) shares
initially authorized for issuance under the Plan, (ii) an
additional increase of One Hundred Thousand (100,000) shares of
Common Stock authorized for issuance by the Board on February 1,
1996 and approved by the Corporation's stockholders at the 1996
Annual Meeting and (iii) a further increase of One Hundred Fifty
Thousand (150,000) shares authorized for issuance by the Board in
April 1997, subject to stockholder approval at the 1997 Annual
Meeting.
B. In the event any change is made to the Common
Stock by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or
other change affecting the outstanding Common Stock as a class
without the Corporation's receipt of consideration, appropriate
adjustments shall be made to (i) the maximum number and class of
securities issuable under the Plan, (ii) the maximum number and
class of securities purchasable per Participant on any one Semi-
Annual Purchase Date and (iii) the number and class of securities
and the price per share in effect under each outstanding purchase
right in order to prevent the dilution or enlargement of benefits
thereunder.
IV. OFFERING PERIODS
A. Shares of Common Stock shall be offered for
purchase under the Plan through a series of successive offering
periods until such time as (i) the maximum number of shares of
Common Stock available for issuance under the Plan shall have
been purchased or (ii) the Plan shall have been sooner
terminated.
B. Each offering period shall have a maximum duration
of twenty-four (24) months. The duration of each offering period
shall be designated by the Plan Administrator prior to its start
date. The initial offering period commenced at the Effective
Time and shall terminate on the last business day in January
1997. The next offering period shall commence on the first
business day in February 1997, and subsequent offering periods
shall commence as designated by the Plan Administrator.
V. ELIGIBILITY
A. Each Eligible Employee shall be eligible to
participate in the Plan in accordance with the following
provisions:
(i) An individual who is an Eligible
Employee on the start date of any offering period shall be
eligible to commence participation in that offering period
on such start date or on any subsequent Semi-Annual Entry
Date within that offering period on which he/she remains an
Eligible Employee.
(ii) An individual who first becomes an
Eligible Employee after the start date of any offering
period may enter that offering period on the first Semi-
Annual Entry Date on which he/she is an Eligible Employee or
on any subsequent Semi-Annual Entry Date within that
offering period on which he/she remains an Eligible
Employee.
B. To participate in the Plan for a particular
offering period, the Eligible Employee must complete the
enrollment forms prescribed by the Plan Administrator (including
a stock purchase agreement and a payroll deduction authorization
form) and file such forms with the Plan Administrator (or its
designate) on or before his/her scheduled Entry Date.
VI. PAYROLL DEDUCTIONS
A. The payroll deduction authorized by the Parti
cipant for purposes of acquiring shares of Common Stock under the
Plan may be any multiple of one percent (1%) of the Base Salary
paid to the Participant during each Semi-Annual Period of
Participation within the offering period, up to a maximum of
fifteen percent (15%). The deduction rate so authorized shall
continue in effect for the remainder of the offering period,
except to the extent such rate is changed in accordance with the
following guidelines:
(i) The Participant may, at any time
during a Semi-Annual Period of Participation, reduce
his or her rate of payroll deduction to become
effective as soon as possible after filing the
appropriate form with the Plan Administrator. The
Participant may not, however, effect more than one (1)
such reduction per Semi-Annual Period of Participation.
(ii) The Participant may, prior to the
commencement of any new Semi-Annual Period of
Participation within the offering period, increase the
rate of his or her payroll deduction by filing the
appropriate form with the Plan Administrator. The new
rate (which may not exceed the fifteen percent (15%)
maximum) shall become effective as of the first day of
the first Semi-Annual Period of Participation following
the filing of such form.
B. Payroll deductions shall begin on the first pay
day following the Participant's Entry Date into the offering
period and shall (unless sooner terminated by the Participant)
continue through the pay day ending with or immediately prior to
the last day of the offering period. The amounts so collected
shall be credited to the Participant's book account under the
Plan, but no interest shall be paid on the balance from time to
time outstanding in such account. The amounts collected from the
Participant shall not be held in any segregated account or trust
fund and may be commingled with the general assets of the
Corporation and used for general corporate purposes.
C. Payroll deductions shall automatically cease upon
the termination of the Participant's purchase right in accordance
with the provisions of Section VII below.
D. The Participant's acquisition of Common Stock
under the Plan on any Semi-Annual Purchase Date shall neither
limit nor require the Participant's acquisition of Common Stock
on any subsequent Semi-Annual Purchase Date, whether within the
same or a different offering period.
VII. PURCHASE RIGHTS
A. Grant of Purchase Right. A Participant shall be
-----------------------------
granted a separate purchase right for each offering period in
which he or she participates. The purchase right shall be
granted on the Participant's Entry Date into the offering period
and shall provide the Participant with the right to purchase
shares of Common Stock, in a series of successive semi-annual
installments over the remainder of such offering period, upon the
terms set forth below. The Participant shall execute a stock
purchase agreement embodying such terms and such other provisions
(not inconsistent with the Plan) as the Plan Administrator may
deem advisable.
Under no circumstances shall purchase rights be granted
under the Plan to any Eligible Employee if such individual would,
immediately after the grant, own (within the meaning of Code
Section 424(d)) or hold outstanding options or other rights to
purchase, stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the
Corporation or any Corporate Affiliate.
B. Exercise of the Purchase Right. Each purchase
--------------------------------------
right shall be automatically exercised in successive semi-annual
installments on each Semi-Annual Purchase Date in an offering
period, and shares of Common Stock shall accordingly be purchased
on behalf of each Participant (other than Participants whose
payroll deductions have previously been refunded in accordance
with the Termination of Purchase Right provisions below) on each
such date. The purchase shall be effected by applying the
Participant's payroll deductions for the Semi-Annual Period of
Participation ending on such Semi-Annual Purchase Date (together
with any carryover deductions from the preceding Semi-Annual
Period of Participation) to the purchase of whole shares of
Common Stock (subject to the limitation on the maximum number of
shares purchasable per Participant on any one Semi-Annual
Purchase Date) at the purchase price in effect for the
Participant for that Semi-Annual Purchase Date.
C. Purchase Price. The purchase price per share at
--------------------
which Common Stock will be purchased on the Participant's behalf
on each Semi-Annual Purchase Date within the offering period
shall be equal to eighty-five percent (85%) of the lower of (i)
the Fair Market Value per share of Common Stock on the
Participant's Entry Date into that offering period or (ii) the
Fair Market Value per share of Common Stock on that Semi-Annual
Purchase Date. However, for each Participant whose Entry Date is
other than the start date of the offering period, the clause (i)
amount shall in no event be less than the Fair Market Value per
share of Common Stock on the start date of that offering period.
D. Number of Purchasable Shares. The number of
-------------------------------------
shares purchasable by a Participant on each Semi-Annual Purchase
Date during the offering period shall be the number of whole
shares obtained by dividing the amount collected from the
Participant through payroll deductions during the Semi-Annual
Period of Participation ending with that Semi-Annual Purchase
Date (together with any carryover deductions from the preceding
Semi-Annual Period of Participation) by the purchase price in
effect for that Semi-Annual Purchase Date. However, the maximum
number of shares of Common Stock purchasable per Participant on
any one Semi-Annual Purchase Date shall not exceed Two Thousand
(2,000) shares, subject to periodic adjustments in the event of
certain changes in the Corporation's capitalization.
E. Excess Payroll Deductions. Any payroll
-------------------------------------
deductions not applied to the purchase of shares of Common Stock
on any Semi-Annual Purchase Date because they are not sufficient
to purchase a whole share of Common Stock shall be held for the
purchase of Common Stock on the next Semi-Annual Purchase Date.
However, any payroll deductions not applied to the purchase of
Common Stock by reason of the limitation on the maximum number of
shares purchasable by the Participant on the Semi-Annual Purchase
Date shall be promptly refunded.
F. Termination of Purchase Right. The following
-------------------------------------
provisions shall govern the termination of outstanding purchase
rights:
(i) A Participant may, at any time prior to
the next Semi-Annual Purchase Date in an offering
period, terminate his or her outstanding purchase right
under the offering period by filing the appropriate
form with the Plan Administrator (or its designate),
and no further payroll deductions shall be collected
from the Participant with respect to the terminated
purchase right. Any payroll deductions collected
during the Semi-Annual Period of Participation in which
such termination occurs shall, at the Participant's
election, be immediately refunded or held for the
purchase of shares on the next Semi-Annual Purchase
Date. If no such election is made at the time such
purchase right is terminated, then the payroll
deductions collected with respect to the terminated
right shall be refunded as soon as possible.
(ii) The termination of such purchase right
shall be irrevocable, and the Participant may not
subsequently rejoin the offering period for which the
terminated purchase right was granted. To resume
participation in any subsequent offering period, such
individual must re-enroll in the Plan (by making a
timely filing of the prescribed enrollment forms) on or
before the date he or she is first eligible to join the
new offering period.
(iii) Should the Participant cease to remain
an Eligible Employee for any reason (including death,
disability or change in status) while his or her
purchase right remains outstanding, then that purchase
right shall immediately terminate, and all of the
Participant's payroll deductions for the Semi-Annual
Period of Participation in which such cessation of
Eligible Employee status occurs shall be immediately
refunded.
G. Corporate Transaction. In the event of a
-----------------------------
Corporate Transaction during the offering period, each
outstanding purchase right shall automatically be exercised,
immediately prior to the effective date of such Corporate
Transaction, by applying the payroll deductions of each
Participant for the Semi-Annual Period of Participation in which
such Corporate Transaction occurs to the purchase of whole shares
of Common Stock at a purchase price per share equal to eighty-
five percent (85%) of the lower of (i) the Fair Market Value per
share of Common Stock on the Participant's Entry Date into the
offering period in which such Corporate Transaction occurs or
(ii) the Fair Market Value per share of Common Stock immediately
prior to the effective date of such Corporate Transaction.
However, the applicable share limitations per Participant shall
continue to apply to any such purchase, and the clause (i) amount
above shall not, for any Participant whose Entry Date for the
offering period is other than the start date of that offering
period, be less than the Fair Market Value per share of Common
Stock on such start date.
The Corporation shall use its best efforts to provide
at least ten (10)-days prior written notice of the occurrence of
any Corporate Transaction, and Participants shall, following the
receipt of such notice, have the right to terminate their
outstanding purchase rights prior to the effective date of the
Corporate Transaction.
H. Proration of Purchase Rights. Should the total
-----------------------------------
number of shares of Common Stock which are to be purchased
pursuant to outstanding purchase rights on any particular date
exceed the number of shares then available for issuance under the
Plan, the Plan Administrator shall make a pro-rata allocation of
the available shares on a uniform and nondiscriminatory basis,
and the payroll deductions of each Participant, to the extent in
excess of the aggregate purchase price payable for the Common
Stock pro-rated to such individual, shall be refunded.
I. Assignability. During the Participant's lifetime,
-------------------
the purchase right shall be exercisable only by the Participant
and shall not be assignable or transferable by the Participant.
J. Stockholder Rights. A Participant shall have no
------------------------
stockholder rights with respect to the shares subject to his or
her outstanding purchase right until the shares are purchased on
the Participant's behalf in accordance with the provisions of the
Plan and the Participant has become a holder of record of the
purchased shares.
VIII. ACCRUAL LIMITATIONS
A. No Participant shall be entitled to accrue rights
to acquire Common Stock pursuant to any purchase right
outstanding under this Plan if and to the extent such accrual,
when aggregated with (i) rights to purchase Common Stock accrued
under any other purchase right outstanding under this Plan and
(ii) similar rights accrued under other employee stock purchase
plans (within the meaning of Code Section 423) of the Corporation
or any Corporate Affiliate, would otherwise permit such
Participant to purchase more than Twenty-Five Thousand Dollars
($25,000) worth of stock of the Corporation or any Corporate
Affiliate (determined on the basis of the Fair Market Value of
such stock on the date or dates such rights are granted) for each
calendar year such rights are at any time outstanding.
B. For purposes of applying such accrual limitations,
the following provisions shall be in effect:
(i) The right to acquire Common Stock
under each purchase right shall accrue on each Semi-
Annual Purchase Date for which the right remains
outstanding.
(ii) No right to acquire Common Stock
under any outstanding purchase right shall accrue to
the extent the Participant has already accrued in the
same calendar year the right to acquire Common Stock
under one (1) or more other purchase rights at a rate
equal to Twenty-Five Thousand Dollars ($25,000) worth
of Common Stock (determined on the basis of the Fair
Market Value of such stock on the date or dates of
grant) for each calendar year such rights were at any
time outstanding.
C. If by reason of such accrual limitations, any
purchase right of a Participant does not accrue for a particular
Semi-Annual Period of Participation, then the payroll deductions
which the Participant made during that Semi-Annual Period of
Participation with respect to such purchase right shall be
promptly refunded.
D. In the event there is any conflict between the
provisions of this article and one or more provisions of the Plan
or any instrument issued thereunder, the provisions of this
article shall be controlling.
IX. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan was adopted by the Board in January 1995
and approved by the stockholders in February 1995, and the Plan
became effective at the Effective Time. The 100,000-share
increase to the share reserve available for issuance under the
Plan was authorized by the Board on February 1, 1996 and approved
by the Corporation's stockholders at the 1996 Annual Meeting.
The 150,000-share increase to the share reserve available for
issuance under the Plan was authorized by the Board in April
1997, subject to approval by the Corporation's stockholders at
the 1997 Annual Meeting. Should such stockholder approval not be
obtained, then the 150,000-share increase will not be
implemented, and any purchase rights granted on the basis of the
150,000-share increase to the Plan will immediately terminate.
No additional purchase rights will be granted on the basis of
such share increase, and the Plan will terminate once the
existing share reserve has been issued.
B. Unless sooner terminated by the Board, the Plan
shall terminate upon the earliest of (i) the last business day in
January 2005, (ii) the date on which all shares available for
issuance under the Plan shall have been sold pursuant to purchase
rights exercised under the Plan or (iii) the date on which all
purchase rights are exercised in connection with a Corporate
Transaction.
X. AMENDMENT OF THE PLAN
A. The Board may alter, amend, suspend or discontinue
the Plan following the close of any Semi-Annual Period of
Participation. However, the Board may not, without the approval
of the Corporation's stockholders, (i) materially increase the
number of shares issuable under the Plan or the maximum number of
shares purchasable per Participant on any one Semi-Annual
Purchase Date, except for permissible adjustments in the event of
certain changes in the Corporation's capitalization, (ii) alter
the purchase price formula so as to reduce the purchase price
payable for the shares purchasable under the Plan, or (iii)
materially increase the benefits accruing to Participants under
the Plan or materially modify the requirements for eligibility to
participate in the Plan.
B. The Corporation shall have the right, exercisable
in the sole discretion of the Plan Administrator, to terminate
all outstanding purchase rights under the Plan immediately
following the close of any Semi-Annual Period of Participation.
Should the Corporation elect to exercise such right, then the
Plan shall terminate in its entirety. No further purchase rights
shall thereafter be granted or exercised, and no further payroll
deductions shall thereafter be collected, under the Plan.
XI. GENERAL PROVISIONS
A. All costs and expenses incurred in the
administration of the Plan shall be paid by the Corporation.
B. Nothing in the Plan shall confer upon the
Participant any right to continue in the employ of the
Corporation or any Corporate Affiliate for any period of specific
duration or interfere with or otherwise restrict in any way the
rights of the Corporation (or any Corporate Affiliate employing
such person) or of the Participant, which rights are hereby
expressly reserved by each, to terminate such person's employment
at any time for any reason, with or without cause.
C. The provisions of the Plan shall be governed by
the laws of the State of California without resort to that
State's conflict-of-laws rules.
Schedule A
----------
Corporations Participating in
Employee Stock Purchase Plan
As of April 1997
----------------
P-Com, Inc.
P-Com United Kingdom, Inc.
P-Com (Barbados) FSC Limited
P-Com Finance Corporation
Geritel S.p.A
P-Com Field Services, Inc.
P-Com Merger Subsidiary, Inc.
APPENDIX
--------
The following definitions shall be in effect under the Plan:
A. Base Salary shall mean the regular base salary
------------------
paid to a Participant by one or more Participating Companies
during such individual's period of participation in the Plan,
plus any pre-tax contributions made by the Participant to any
Code Section 401(k) salary deferral plan or any Code Section 125
cafeteria benefit program now or hereafter established by the
Corporation or any Corporate Affiliate. The following items of
compensation shall not be included in Base Salary: (i) all
overtime payments, bonuses, commissions (other than those
functioning as base salary equivalents), profit-sharing
distributions and other incentive-type payments and (ii) any and
all contributions (other than Code Section 401(k) or Code Section
125 contributions) made on the Participant's behalf by the
Corporation or any Corporate Affiliate under any employee benefit
or welfare plan now or hereafter established.
B. Board shall mean the Corporation's Board of
-----------
Directors.
C. Code shall mean the Internal Revenue Code of 1986,
---------
as amended.
D. Common Stock shall mean the Corporation's common
------------------
stock.
E. Corporate Affiliate shall mean any parent or
--------------------------
subsidiary corporation of the Corporation (as determined in
accordance with Code Section 424), whether now existing or
subsequently established.
F. Corporate Transaction shall mean either of the
---------------------------
following stockholder-approved transactions to which the
Corporation is a party:
(i) a merger or consolidation in which
securities possessing more than fifty percent (50%) of
the total combined voting power of the Corporation's
outstanding securities are transferred to a person or
persons different from the persons holding those
securities immediately prior to such transaction, or
(ii) the sale, transfer or other disposition
of all or substantially all of the assets of the
Corporation in complete liquidation or dissolution of
the Corporation.
G. Corporation shall mean P-Com, Inc., a Delaware
-----------------
corporation, and any corporate successor to all or substantially
all of the assets or voting stock of P-Com, Inc. which shall by
appropriate action adopt the Plan.
H. Effective Time shall mean the time at which the
--------------------
Underwriting Agreement was executed and finally priced. Any
Corporate Affiliate which becomes a Participating Corporation
after such Effective Time shall designate a subsequent Effective
Time with respect to its employee-Participants.
I. Eligible Employee shall mean any person who is
-----------------------
engaged, on a regularly-scheduled basis of more than twenty (20)
hours per week for more than five (5) months per calendar year,
in the rendition of personal services to any Participating
Corporation as an employee for earnings considered wages under
Section 3401(a) of the Code.
J. Entry Date shall mean the date an Eligible
-----------------
Employee first commences participation in the offering period in
effect under the Plan. The earliest Entry Date under the Plan
shall be the Effective Time, and subsequent Entry Dates shall
correspond with the Semi-Annual Entry Dates permitted under the
Plan.
K. Fair Market Value per share of Common Stock on any
----------------------
relevant date shall be determined in accordance with the
following provisions:
(i) If the Common Stock is at the time
traded on the Nasdaq National Market, then the Fair
Market Value shall be the closing selling price per
share of Common Stock on the date in question, as such
price is reported by the National Association of
Securities Dealers on the Nasdaq National Market or any
successor system. If there is no closing selling price
for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on
the last preceding date for which such quotation
exists.
(ii) If the Common Stock is at the time
listed on any Stock Exchange, then the Fair Market
Value shall be the closing selling price per share of
Common Stock on the date in question on the Stock
Exchange determined by the Plan Administrator to be the
primary market for the Common Stock, as such price is
officially quoted in the composite tape of transactions
on such exchange. If there is no closing selling price
for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price
on the last preceding date for which such quotation
exists.
(iii) For purposes of the initial offering
period which began at the Effective Time, the Fair
Market Value shall be deemed to be equal to the price
per share at which the Common Stock was sold in the
initial public offering pursuant to the Underwriting
Agreement.
L. 1933 Act shall mean the Securities Act of 1933, as
-------------
amended.
M. 1934 Act shall mean the Securities Exchange Act of
-------------
1934, as amended.
N. Participant shall mean any Eligible Employee of a
----------------
Participating Corporation who is actively participating in the
Plan.
O. Participating Corporation shall mean the
---------------------------------
Corporation and such Corporate Affiliate or Affiliates as may be
authorized from time to time by the Board to extend the benefits
of the Plan to their Eligible Employees. The Participating
Corporations in the Plan as of the Effective Time are listed in
attached Schedule A.
P. Plan shall mean the Corporation's Employee Stock
----------
Purchase Plan, as set forth in this document.
Q. Plan Administrator shall mean the committee of two
-----------------------
(2) or more Board members appointed by the Board to administer
the Plan.
R. Semi-Annual Entry Date shall mean the first
-----------------------------
business day of February and August each calendar year within an
offering period in effect under the Plan. However, the earliest
Semi-Annual Entry Date for the initial offering period under the
Plan shall be the Effective Time.
S. Semi-Annual Period of Participation shall mean
-----------------------------------------
each semi-annual period for which the Participant participates in
an offering period in effect under the Plan. There shall be a
maximum of four (4) semi-annual periods of participation within
each offering period. The first such semi-annual period (which
may be less than six (6) months for the initial offering period)
extended from the Effective Time through the last business day in
July 1995. Subsequent semi-annual periods shall be measured from
the first business day of August in each calendar year to the
last business day of January in the succeeding calendar year and
from the first business day of February in each calendar year to
the last business day of July in that calendar year.
T. Semi-Annual Purchase Date shall mean the last
-------------------------------
business day of each Semi-Annual Period of Participation. The
initial Semi-Annual Purchase Date was July 31, 1995.
U. Stock Exchange shall mean either the American
---------------------
Stock Exchange or the New York Stock Exchange.
V. Underwriting Agreement shall mean the agreement
----------------------------
between the Corporation and the underwriter or underwriters
managing the initial public offering of the Common Stock.
EXHIBIT 99.18
1995
INCENTIVE STOCK OPTION PLAN
OF
CONTROL RESOURCES CORPORATION
-----------------------------
(As Amended and Restated Effective August 1, 1996
1. Purpose. The purpose of this Plan is to promote
--------------
the interests of CONTROL RESOURCES CORPORATION (the Company) and
its stockholders by providing an incentive to certain key
employees of the Company to continue in their employment and also
to afford them the opportunity to acquire or enlarge their stock
ownership in the Company in order that they may have a direct
interest in its success. The Plan is intended to constitute a
plan under which incentive stock options (Stock Options) may be
granted pursuant to Section 422 of the Internal Revenue Code of
1986, as it may be amended from time to time (the Code).
2. Administration. The Plan shall be administered by
--------------------
a committee appointed by the Board of Directors of the Company
(the Board), to be known as the Stock Option Plan Committee (the
Committee). The Committee shall consist of not less than three
persons appointed by the Company's Board of Directors, none of
whom shall be eligible to participate in the Plan. The Committee
shall make recommendations periodically to the Board with respect
to the key employees who shall participate in the Plan and the
extent of their participation.
The interpretation by the Committee or the Board of any
provisions of the Plan or any Stock Option granted hereunder
shall be final. No member of the Board or the Committee shall be
liable for any action or determination made in good faith.
3. Eligibility. The individuals who shall be
------------------
eligible to participate in the Plan shall be such key employees
(including officers who may also be directors) of the Company as
the Board shall determine from time to time. Directors who are
members of the Committee or who are not regular employees of the
Company will not be eligible to participate in the Plan. Except
as provided in Section 6(i) of this Plan, an employee shall be
eligible to participate in the Plan as prove only if such
employee, at the time the Stock Option is granted, does not own
stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company or of any parent or
subsidiary corporation. When used herein, the terms parent and
subsidiary corporations shall have the meanings set forth in
paragraphs (e) and (f), respectively, of Section 424 of the Code.
4. Stock. The stock subject to Stock Options shall
------------
be shares of the Company's authorized Common Stock which are
unissued or have been reacquired by the Company (the Common Stock
). The total number of shares of Common Stock on which Stock
Options may be granted shall not exceed in the aggregate 350,000,
provided that such aggregate number of shares shall be subject to
adjustment in accordance with the provisions of Section 6(k)
hereof. In the event that any outstanding Stock Option granted
under the Plan shall for any reason expire or terminate prior to
the end of the period during which Stock Options may be granted
under the Plan, the shares of Common Stock allocable to the
unexercised portion of such Stock Option may again be shares on
which Stock Options may be granted under the Plan.
5. Term of the Plan. No Stock Option shall be
--------------------------
granted under the Plan after October 1, 2005, but Stock Options
theretofore granted may be exercisable after such date.
6. Terms and Conditions of the Stock Options. All
------------------------------------------------
Stock Options granted under the Plan shall be evidenced by
agreements in such form as the Committee shall, from time to
time, approve, which agreements shall comply with and be subject
to the following terms and conditions:
(a) Option Price. Each Stock Option shall state
------------------
an option price (the Option Price determined by the Committee
which shall not be less than 100% of the fair market value per
share of Common Stock on the date the Stock Option is granted but
in no event shall be less than the par value thereof. The fair
market value per share of Common Stock shall be determined in
good faith by the Committee at least annually or at such shorter
intervals as may be necessary in order to comply with Section 422
(b) (4) of the Code. The Committee shall have the power (but
shall not be obligated) to retain independent appraisers for the
purpose of determining the fair market value of the Company's
Common Stock.
(b) Term of Stock Option. Each Stock Option
-----------------------------
shall state the date of its expiration which in no event shall be
in excess of ten years from the date of grant.
(c) Number of Shares. Each Stock Option shall
-----------------------
state the total number of shares which may be purchased upon
exercise thereof.
(d) Exercise of Stock Option. To exercise a
--------------------------------
Stock Option, the option holder (the Optionee ) shall give
written notice to the Company specifying the number of shares to
be purchased. The Board or the Committee may in its discretion
provide in each Stock Option that such Stock Option may not be
exercised in whole or in part for any period of time. Except as
may be so provided and subject to the provisions of Section 60)
hereof, any Stock Option may be exercised in whole at any time or
in part from time to time during its term in minimum amounts of
5,000 shares of Common Stock or, in the event that less than
5,000 shares of Common Stock remain available to be exercised
pursuant to the Stock Option, the balance of shares of Common
Stock remaining to be exercised.
(e) Payment of Shares. The written notice of
------------------------
exercise specified in Section 6(d) shall be accompanied by
payment of the full purchase price therefor. The purchase price
shall be paid in full in United States dollars by check made
payable to the order of the Company.
(f) Governmental Compliance. The Plan, the
-------------------------------
granting of any Stock Options and the obligation of the Company
to issue and deliver shares of Common Stock upon exercise of any
Stock Option shall be subject to all applicable laws,
regulations, rules, orders and approvals which shall then be in
effect and required by governmental entities.
(g) Non-Transferability of Stock Options. During
------------------------------------------
the lifetime of the Optionee, the Stock Option granted to him
shall be exercisable only by him. No Stock Option shall be
assignable or transferable otherwise than by will or laws of
descent and distribution.
(h) Limitation on Amount of Grant. To the extent
-----------------------------------
that the aggregate fair market value (determined as of the time
the incentive stock option with respect to such stock is granted)
of stock with respect to which incentive stock options (as
defined in Section 422(b) of the Code) are exercisable for the
first time by an Optionee during any calendar year (under the
Plan and all other incentive stock option plans of the Company or
any of its parent and subsidiary corporations) exceeds $100,000,
such incentive stock options shall be treated as Stock Options
which are not incentive stock options. This paragraph shall be
applied by taking incentive stock options into account in the
order in which they were granted.
(i) Ten Percent Shareholders. If a Stock Option
------------------------------
is granted to an employee owning more than 10% of the total
combined voting power of all classes of stock of the Company or
of any parent or subsidiary corporation at the time of such
grant, such Stock Option shall provide that the percentage
specified in Section 6(a) of the Plan be at least 110% and the
term of the Stock Option specified in Section 6(b) of the Plan be
reduced to not more than five years from the date of grant.
(j) Termination of Employment. Unless otherwise
-------------------------------
agreed to by the Company, in the event that the Optionee's
employment with the Company or any subsidiary of the Company
shall terminate for any reason other than good cause, his Stock
Option shall terminate thirty days thereafter and the Optionee
shall have the right, with respect to any shares available for
purchase during such thirty day period, subject to the provisions
of Sections 6(b) and 6(d) hereof, to exercise his Stock Option at
any time within such thirty day period; provided, however, that
if the Optionee shall die while in the employ of the Company, his
Stock Option shall terminate six months thereafter and his
estate, personal representative or beneficiary shall have the
right, subject to the provisions of Sections 6(b) and 6(d)
hereof, to exercise his Stock Option at any time within said six
month period. This Stock Option shall terminate and be of no
force or effect in the event that the Optionee's employment by
the Company is terminated for good cause. Whether an authorized
leave of absence or absence on military or government service
shall constitute a termination of employment for the purposes of
the Plan shall be determined by the Committee, which
determination, unless overruled by the Board, shall be final and
conclusive. An Optionee's employment shall be deemed to
terminate immediately if the Optionee is employed by a
corporation which ceases to be a subsidiary of the Company and
the Optionee is not thereupon transferred to and employed by the
Company or another subsidiary of the Company.
(k) Recapitalization. The total number of shares
----------------------
of Common Stock on which Stock Options may be granted hereunder
as provided in Section 4 hereof, the number of shares which may
be purchased upon exercise of each outstanding Stock Option, and
the Option Price of each outstanding Stock Option shall each be
proportionally adjusted for any increase or decrease in the
number of issued shares of Common Stock effected without receipt
of consideration by the Company (for any reason including,
without limitation, a subdivision or consolidation of shares or
other capital adjustment or a stock dividend). The number of
shares which may be purchased upon exercise and the Option Price
of each outstanding Stock Option shall also be appropriately
adjusted upon the issuance of Common Stock by the Company at less
than the fair market value per share of Common Stock last
determined in good faith by the Committee prior to such issuance.
(l) Rights as a Stockholder. An Optionee
------------------------------
shall have no rights as a stockholder with respect to shares
covere d byhis Stock Option until the date of the issuance of shares
to him upon exercise of his Stock Option and only after such shares
are fully paid.
(m) Other Provisions. The Stock Option
--------------------------
agreements shall contain such other provisions as the Committee
shall deem advisable.
7. Discontinuance or Amendment of the Plan. The Plan
---------------------------------------------
may be determined or amended by the Board at any time as it shall
deem advisable, including any amendments required to comply with
the provisions of Section 422 of the Code or the regulations
promulgated thereunder; provided that no amendment to thePlan
shall be made, which would, without approval of stockholders, (i)
increase the total number of shares for which Stock Options may
be granted hereunder, (ii) change the class of persons eligible
to receive Stock Options as set forth in Section 3 here of, (iii)
reduce the minimum Option Price or (iv) extend the term of the
Plan. No amendment or discontinuance of the Plan may, without
the consent of the Optionee to whom a Stock Option shall
theretofore have been granted, adversely affect his rights under
such Stock Option.
8. Application of Proceeds. The proceeds received by
-----------------------------
the Company from the sale of Common Stock pursuant to Stock
Options shall be available for general corporate purposes.
9. No Obligation to Exercise Stock Option. The
------------------------------------------------
granting of a Stock Option shall impose no obligation upon the Optionee to
exercise the same in whole or in part.
10. Effective Date of Plan. The Plan shall be
-------------------------------
effective October 1, 1995. The Plan was amended and restated by
the Board effective August 1, 1996.
EXHIBIT 99.19
INCENTIVE STOCK OPTION AGREEMENT
(Granted Pursuant to the 1995
Incentive Stock Option Plan
of Control Resources Corporation)
AGREEMENT, dated as of ______________________, 199_ between
Control Resources Corporation, a Delaware corporation (the
"Company"), and __________________________ (the "Optionee").
WHEREAS, the Optionee is now employed by the Company in
a key capacity and the Company desires to have him remain in the
employment of the Company so that he may have a direct
proprietary interest in its success.
NOW, THEREFORE, in consideration of the mutual
covenants and agreements hereinafter set forth, the parties
hereto agree as follows:
1. Pursuant to the Control Resources Corporation 1995
Incentive Stock Option Plan (the "Plan") and subject to the terms
and conditions set forth therein, which are incorporated herein
by reference, the Company hereby grants to the Optionee during
the period commencing on the date hereof and ending on
______ 2006, the option ("Stock Option") to purchase from the
Company, from time to time, as hereinafter more specifically
stated, at a price of $ . per share (the "Option Price") up to
shares (the "Shares") of the Company's Common Stock, par value
$.Ol per share. This Stock Option may be exercised in whole at
any time during said period or in part from time to time during
said period, in minimum amounts of Shares or, in the event that
less than Shares remain available to be exercised hereunder, the
balance of Shares remaining to be exercised, subject to the
provisions of Section 2 of this Agreement.
2. Subject to the other terms of this Agreement
concerning the exercisability of this Stock Option, the Stock
Option shall become vested and the Shares subject to the Stock
Option shall become exercisable in cumulative stages as follows:
This Stock Option Shall
Become Exercisable With
Respect to the Following
On or After This Date Cumulative Number of Shares
- --------------------- ---------------------------
This Stock Option may be exercised, from time to time, by the
delivery to the Treasurer of the Company of a written notice,
signed by the Optionee, specifying the number of Shares the
Optionee desires to purchase. If the written notice is mailed,
the date of its receipt by the Treasurer of the Company shall be
considered the date of exercise of this Stock Option by the
Optionee.
The written notice of exercise of this Stock Option, in
whole or in part, by the Optionee, shall be accompanied by a
check made payable in United States dollars to the order of the
Company in an amount equal to the Option Price multiplied by the
number of Shares the Optionee desires to purchase and the Company
shall delin,er to the Optionee a certificate representing the
number of Shares purchased by the Optionee and registered in the
Optionee's name.
3. This Stock Option shall terminate and be of no
force or effect upon the happening of the first to occur of the
following events:
(a) The expiration of the time allowed for
exercise of this Stock Option as specified in Section I hereof;
or
(b) The termination of the employment of the
Optionee by the Company for "good cause", which shall be defined
as (i) a material breach by Optionee of the duties and
responsibilities of Optionee as an employee of the Company,
including but not limited to the poor performance of such duties
and responsibilities, (ii) the Optionee's non-compliance with any
rules of conduct that the Company has established for its
employees, (iii) the Optionee's improper disclosure of trade
secrets or other confidential information of the Company, (iv)
any defalcation by the Optionee of the Company's funds or assets,
or (v) the Optionee's conviction of a felony; or
(c) The expiration of thirty days after the date
of the termination (for any reason other than "good cause" or
Optionee's death) of the Optionee's employment by the Company
(for any reason other than in the case of "good cause" or his
death while in the employ of the Company); or
(d) The expiration of six months after the date
of death of the Optionee while in the employ of the Company.
The Optionee's termination of employment by the Company
for "good cause" shall constitute an offer by the Optionee to
sell and the Company thereupon shall have the right (but not the
obligation) to repurchase at the Option Price all Shares then
owned by the Optionee which were acquired pursuant to the Plan.
Such repurchase shall take place at a closing to be held at the
offices of the Company at 12 noon on a date that is no more than
two business days after the termination of Optionee's employment
by the Company for "good cause". Optionee shall deliver to the
Company certificates representing the Shares subject to such
repurchase, duly endorsed or accompanied by a duly executed blank
stock power and the Company shall deliver to Optionee cash or a
check in an amount equal to the product of the Option Price and
the number of Shares subject to such repurchase.
4. Whenever the word "Optionee" is used in any
provision of this Agreement under circumstances where the
provision should logically be construed to apply to the
executors, the administrators, or the person or persons to whom
this Stock Option may be transferred by Will or by the laws of
descent and distribution, it shall be deemed to include such
person or persons.
5. This Stock Option is not transferable by the
Optionee otherwise than by Will or the laws of descent and
distribution and, during the Optionee's lifetime, is exercisable
only by Optionee. No attempted assignment or transfer of this
Stock Option or the rights represented hereby, whether voluntary
or involuntary, or by operation of law or otherwise, except by
Will or the law of descent and distribution, shall vest in the
assignee or transferee any interest or right herein whatsoever.
6. The Optionee shall not be deemed for any purpose
to be a stockholder of the Company with respect to any Shares
which may be purchased pursuant to this Stock Option and as to
which this Stock Option has not been exercised and payment and
delivery made as provided herein.
7. The Company shall give the Optionee written notice
of any impending sale of which the Company is aware of 10% or
more of the outstanding Common Stock of the Company to any party
who is not an owner of Common Stock of the Company on the date of
this Agreement.
8. The existence of this Stock Option shall not
affect in any way the right or power of the Company or its
stockholders to make or authorize any recapitalizations,
reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the
Company, or any issuance of convertible debt or preferred stock,
or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character
or otherwise.
9. (a) In the event of an increase or reduction of
the number of shares of Common Stock outstanding without the
receipt of consideration by the Company (for any reason,
including, without limitation, a subdivision, consolidation or
other capital adjustment or a stock dividend), then (i) if any
increase in the number of shares of Common Stock outstanding, the
number of shares of Common Stock then remaining subject to this
Stock Option shall be proportionately increased and the Option
Price shall be proportionately reduced, and (ii) if a reduction
in the number of shares of Common Stock outstanding, the number
of shares of Common Stock then remaining subject to this Stock
Option shall be proportionately reduced and the Option Price
shall be proportionately increased.
(b) In the event the Company issues shares of Common
Stock after the date hereof for a net consideration per share
less than the fair market value per share of the Common Stock (as
last determined prior to such issuance by the Stock Option Plan
Committee pursuant to the Plan), the number of such shares which
may, at the time of such issuance, be purchased upon exercise of
this Stock Option and the Option Price shall be adjusted as
provided in this Section 9(b). Upon such issuance, the Option
Price (as theretofore adjusted) shall be adjusted to a price (to
the nearest cent) determined by dividing (A) an amount equal to
the sum of (i) the number of shares of the Company's Common Stock
outstanding immediately prior to such issuance multiplied by the
Option Price (as theretofore adjusted) plus (ii) the net
consideration received by the Company upon such issuance by (B)
the total number of shares of the Company's Common Stock
outstanding immediately after such issuance. Upon each
adjustment in the Option Price as provided by the preceding
sentence, the number of shares of Common Stock which may be
purchased upon exercise of this Stock Option shall be adjusted by
dividing (1) the Option Price (as in effect immediately prior to
the adjustment therein) multiplied by the number of shares of
Common Stock which may be purchased upon exercise of this Stock
Option by (11) the Option Price (as in effect immediately
following the adjustment therein). The conversion of securities
which are convertible into the Company's Common Stock shall
constitute the issuance of the Company's Common Stock at the time
of said conversion for a net consideration equal to the sum of
the net consideration received by the Company upon issuance of
said convertible security and the net consideration received by
the Company upon said conversion.
10. If the Company at any time registers any of its
shares of Common Stock on Form S-1 or other form of general
applicability with respect to the Company's Common Stock under
the Securities Act of 1933, as amended, or any similar Federal
statute, and the rules and regulations of the Commission issued
thereunder, as they each may, from time to time, be in effect
(the "Securities Act") for sale to the public, whether for its
own account or for the account of the officers or directors of
the Company, the Company will use its best efforts to register
the Stock Options granted pursuant to this Agreement on Form S-8
or other form of general applicability with respect to the
Company's Stock Options and register or qualify the Stock Options
under the securities or blue sky laws of such jurisdictions in
which the Company has registered its Common Stock within one year
after the offering of the Company's Common Stock to the public;
provided, however, that in no event will the filing of Form S-8
or other form of general applicability with respect to the Stock
Options by the Company cause the Company to breach any reasonable
agreement between the Company and any underwriter chosen by the
Company to underwrite the offering of the Company's Common Stock
or cause the Company to violate the Securities Act or any
applicable securities or blue sky laws of such jurisdictions in
which the Company has registered its Common Stock.
11. (a) After a merger of one or more corporations
into the Company, or after a consolidation of the Company and one
or more corporations in which the Company shall be the surviving
corporation, the Optionee shall, at no additional cost, be
entitled, upon exercise of this Stock Option, to receive the
number and class of shares of stock or other securities to which
the Optionee would have been entitled pursuant to the terms of
the agreement of merger or consolidation had the Optionee been
the holder of record of a number of such shares of Common Stock
of the Company equal to the number of such shares which the
Optionee may purchase upon exercise of this Stock Option. The
Company's Board of Directors shall determine, in its absolute and
uncontrolled discretion, the adjustment to be made and the extent
thereof.
(b) The Company shall give the Optionee
reasonable notice in written form of the dissolution or
liquidation of the Company, or upon the merger of the Company
into another corporation, or the consolidation of the Company
with one or more other corporations and one of such other
corporations or a new corporation shall be the resulting or
surviving corporation. Anything herein contained to the contrary
notwithstanding, upon the dissolution or liquidation of the
Company, this Stock Option shall terminate and be of no force or
effect; provided, however, the Optionee shall have the right
immediately prior to such dissolution or liquidation to exercise
this Stock Option with respect to any or all shares of Common
Stock hereby optioned to the extent that the same has not been
exercised and regardless of whether such shares were then
available for purchase hereunder. Anything herein to the
contrary notwithstanding, in the event of any such merger or
consolidation, this Stock Option shall become a Stock Option to
purchase on the terms and conditions herein set forth that number
of shares of the resulting or surviving corporation as is equal
to the number of shares that the Optionee would have obtained had
the Optionee fully exercised this Stock Option immediately prior
to such merger or consolidation. If for any reason the resulting
or surviving corporation does not agree to such conversion of
this Stock Option then the Stock Option shall become fully and
immediately exercisable.
12. Anything in this Agreement to the contrary
notwithstanding, if, at any time specified herein for the
delivery of shares of Common Stock to the Optionee, any law or
regulations of any governmental authority having jurisdiction in
the matter shall require either the Company or the Optionee to
take any action or refrain from action in connection therewith,
the delivery of such shares shall be deferred until such action
shall have been taken or such restriction or action shall have
been removed.
13. As a condition of the granting of this Stock
Option, the Optionee agrees that any dispute or disagreement
which shall arise under this Agreement shall be reasonably
determined by the Company's Board of Directors and any such
determination by the Board of Directors shall be final, binding
and conclusive on all persons affected thereby.
14. Any notice which either party hereto may be
required or permitted to give to the other shall be in writing,
and may be delivered personally or by mail, postage prepaid,
addressed as follows: to the Company at 16-00 Pollitt Drive, Fair
Lawn, NJ 07410; and to the Optionee at .
Either party may designate some other address by written notice
to the other party.
IN WITNESS WHEREOF, the Company and the Optionee have
duly executed this Agreement as of the date first set forth
above.
CONTROL RESOURCES CORPORATION
By: _____________________________
Chief Executive Officer
_____________________________
(OPTIONEE)
EXHIBIT 99.20
P-COM, INC.
STOCK OPTION ASSUMPTION AGREEMENT
Optionee:
STOCK OPTION ASSUMPTION AGREEMENT issued as of the 29th
day of May, 1997 by P-Com, Inc., a Delaware corporation ("P-
Com").
WHEREAS, the undersigned individual ("Optionee") holds
one or more outstanding options to purchase shares of the common
stock of Control Resources Corporation, a Delaware corporation
("CRC"), which were granted to Optionee under the 1995 Incentive
Stock Option Plan of CRC, as amended and restated as of August 1,
1996, (the "Plan") and are evidenced by a Stock Option Agreement
(the "Option Agreement") between CRC and Optionee.
WHEREAS, CRC has this day been acquired by P-Com
through merger of a wholly-owned P-Com subsidiary ("Acquisition
Corporation") with and into CRC (the "Merger") pursuant to the
Agreement and Plan of Reorganization dated as of April 14, 1997
and the Agreement of Merger dated as of May 29, 1997 by and among
P-Com, CRC and Acquisition Corporation (the "Merger Agreement").
WHEREAS, the provisions of the Merger Agreement require
P-Com to assume all obligations of CRC under all options
outstanding under the Plan at the consummation of the Merger and
to issue to the holder of each outstanding option an agreement
evidencing the assumption of such option.
WHEREAS, pursuant to the provisions of the Merger
Agreement, the exchange ratio in effect for the Merger is 0.2384
of a share of P-Com common stock ("P-Com Stock") for each
outstanding share of CRC common stock (the "Exchange Ratio").
WHEREAS, this Agreement is to become effective
immediately upon the consummation of the Merger (the "Effective
Time") in order to reflect certain adjustments to Optionee's
outstanding options under the Plan which have become necessary by
reason of the assumption of those options by P-Com in connection
with the Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. The stock options held by Optionee under the Plan
immediately prior to the Effective Time (the "CRC Options") and
the exercise price payable per share are set forth in Exhibit A
hereto. P-Com hereby assumes, as of the Effective Time, all the
duties and obligations of CRC under each of the CRC Options. In
connection with such assumption, the number of shares of P-Com
Stock purchasable under each CRC Option hereby assumed and the
exercise price payable thereunder have been adjusted to reflect
the Exchange Ratio at which shares of CRC common stock ("CRC
Stock") were converted into shares of P-Com Stock in consummation
of the Merger. Accordingly, the number of shares of P-Com Stock
subject to each CRC Option hereby assumed shall be as specified
for that option in attached Exhibit B, and the adjusted exercise
price payable per share of P-Com Stock under the assumed CRC
Option shall be as indicated for that option in attached Exhibit
B.
2. The intent of the foregoing adjustments to each
assumed CRC Option is to assure that the spread between the
aggregate fair market value of the shares of P-Com Stock
purchasable under each such option and the aggregate exercise
price as adjusted pursuant to this agreement will, immediately
after the consummation of the Merger, equal the spread which
existed, immediately prior to the Merger, between the then
aggregate fair market value of the CRC Stock subject to the CRC
Option and the aggregate exercise price in effect at such time
under the Option Agreement. Such adjustments are also designed
to preserve, immediately after the Merger, on a per share basis,
the same ratio of exercise price per option share to fair market
value per share which existed under the CRC Option immediately
prior to the Merger.
3. The following provisions shall govern each CRC
Option hereby assumed by P-Com:
(a) Unless the context otherwise
requires, all references to the "Company" in each
Option Agreement and in the Plans (as incorporated into
such Option Agreement) shall mean P-Com, all references
to "Common Stock" shall mean shares of P-Com Stock, and
all references to the "Board of Directors" or the Stock
Option Plan Committee shall mean the Compensation
Committee of the P-Com Board of Directors.
(b) The grant date and the expiration
date of each assumed CRC Option and all other
provisions which govern either the exercisability or
the termination of the assumed CRC Option shall remain
the same as set forth in the Option Agreement
applicable to that option and shall accordingly govern
and control Optionee's rights under this Agreement to
purchase P-Com Stock.
(c) The minimum exercise requirement
under each assumed CRC Option shall be adjusted in
accordance with the Exchange Ratio. However, such
requirement shall not be applicable to the extent the
assumed CRC Option is exercised for the total number of
shares of P-Com Stock at the time purchasable
thereunder.
(d) Each assumed CRC Option shall
remain exercisable in accordance with the same
installment exercise schedule in effect under the
applicable Option Agreement immediately prior to the
Effective Time, with the number of shares of P-Com
Stock subject to each such installment adjusted to
reflect the Exchange Ratio. Accordingly, no
accelerated vesting of the CRC Options shall be deemed
to automatically occur by reason of the Merger, and the
grant date for each assumed CRC Option shall
accordingly remain the same as in effect under the
applicable Option Agreement immediately prior to the
Merger.
(e) For purposes of applying any and
all provisions of the Option Agreement relating to
Optionee's status as an employee with the Company,
Optionee shall be deemed to continue in such employee
status for so long as Optionee renders services as an
employee to P-Com or any present or future P-Com
subsidiary, including (without limitation) CRC.
Accordingly, the provisions of the Option Agreement
governing the termination of the assumed CRC Option
upon Optionee's cessation of employee status with CRC
shall hereafter be applied on the basis of Optionee's
cessation of employee status with P-Com and its
subsidiaries, and each assumed CRC Option shall
accordingly terminate, within the designated time
period in effect under the Option Agreement for that
option, following such cessation of employment with P-
Com and its subsidiaries.
(f) The adjusted exercise price payable
for the P-Com Stock subject to each assumed CRC Option
shall be payable in any of the forms authorized under
the Option Agreement applicable to that option.
(g) In order to exercise each assumed
CRC Option, Optionee must deliver to P-Com a written
notice of exercise in which the number of shares of P-
Com Stock to be purchased thereunder must be indicated.
The exercise notice must be accompanied by payment of
the adjusted exercise price payable for the purchased
shares of P-Com Stock and should be delivered to P-Com
at the following address:
P-Com, Inc.
3175 S. Winchester Blvd.
Campbell, CA 95008
Attention: Michael J. Sophie
4. Except to the extent specifically modified by this
Option Assumption Agreement, all of the terms and conditions of
each Option Agreement as in effect immediately prior to the
Merger shall continue in full force and effect and shall not in
any way be amended, revised or otherwise affected by this Stock
Option Assumption Agreement.
IN WITNESS WHEREOF, P-Com, Inc. has caused this Stock
Option Assumption Agreement to be executed on its behalf by its
duly-authorized officer as of the ___ day of _____, 1997.
P-COM, INC.
By: ___________________________
Michael J. Sophie,
Vice President, Finance and
Administration and
Chief Financial Officer
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing
Stock Option Assumption Agreement and understands that all rights
and liabilities with respect to each of his or her CRC Options
hereby assumed by P-Com, Inc. are as set forth in the Option
Agreement, the Plan and such Stock Option Assumption Agreement.
__________________, OPTIONEE
DATED: __________________, 1997
EXHIBIT A
Optionee's Outstanding Options to Purchase Shares of Control
Resources Corporation
Common Stock (Pre-Merger)
EXHIBIT B
Optionee's Outstanding Options to Purchase Shares of P-Com, Inc.
Common Stock (Post-Merger)
