<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 23, 1998
REGISTRATION NO. 333-
==============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
COMPUTER LEARNING CENTERS, INC.
-------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 36-3501869
- ------------------------------ -----------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
11350 RANDOM HILLS ROAD, SUITE 240, FAIRFAX, VIRGINIA 22030
----------------------------------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
1998 STOCK INCENTIVE PLAN
-------------------------
(Full Title of the Plan)
CHARLES L. COSGROVE
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
COMPUTER LEARNING CENTERS, INC.
11350 RANDOM HILLS ROAD, SUITE 240
FAIRFAX, VIRGINIA 22030
-----------------------
(Name and Address of Agent For Service)
(703) 359-9333
--------------
(Telephone Number, Including Area Code, of Agent for Service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
-------------------------------
PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM
SECURITIES AMOUNT TO OFFERING AGGREGATE AMOUNT OF
TO BE BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED SHARE PRICE FEE
- ---------- ---------- ----- ----- ---
<S> <C> <C> <C> <C>
Common 1,000,000 6.109375 6,109,375 1,851.33
Stock, $.01 shares (1) (2) (2) (2)
par value
</TABLE>
(1) Representing shares of the Registrant's Common Stock, par value $.01
per share (the "Common Stock"), to be issued by the Registrant in
connection with the 1998 Stock Incentive Plan. This Registration
Statement also covers such indeterminate number of additional shares as
may become issuable to prevent dilution in the event of stock splits,
stock dividends or similar transactions pursuant to the terms of the
Plan.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) and Rule 457(h) under the Securities Act of
1933, based on the average of the high and low prices of the
Registrant's Common Stock as reported by the Nasdaq National Market on
December 17, 1998.
==============================================================================
<PAGE> 2
PART I. INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information required by Part I of Form S-8 is included in documents
sent or given to participants in the 1998 Stock Incentive Plan of Computer
Learning Centers, Inc. (the "Registrant") pursuant to Rule 428(b)(1) of the
Securities Act of 1933, as amended (the "Securities Act").
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The Registrant is subject to the informational and reporting
requirements of Sections 13(a), 14 and 15(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and in accordance therewith files
reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). The following documents, which are
filed with the Commission, are incorporated in this Registration Statement by
reference:
(a) The Registrant's latest annual report filed pursuant to Section
13(a) or 15(d) of the Exchange Act or the latest prospectus filed
pursuant to Rule 424(b) under the Securities Act that contains
audited financial statements for the latest fiscal year for which
such statements have been filed.
(b) All other reports filed pursuant to Section 13(a) or 15(d)
of the Exchange Act since the end of the fiscal year
covered by the document referred to in (a) above.
(c) The description of the Registrant's Common Stock, par value
$.01 per share (the "Common Stock"), contained in a
registration statement filed under the Exchange Act
including any amendment or report filed for the purpose of
updating such description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference herein and to be part hereof
from the date of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 ("Section 145") of the Delaware General Corporation Law, as
amended, provides a detailed statutory framework covering indemnification of
officers and directors against liabilities and expenses arising out of legal
proceedings brought against them by reason of their being or having been
directors or officers. Section 145 generally provides that a director or
officer of a corporation (i) shall be indemnified by the corporation for all
expenses of such legal proceedings when he is successful on the merits, (ii)
may be indemnified by the corporation for expenses, judgments, fines and
amounts paid in settlement of such proceedings (other than a derivative
suit), even if he
2
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is not successful on the merits, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful, and (iii) may be
indemnified by the corporation for the expenses of a derivative suit (a suit by
a stockholder alleging a breach by a director or officer of a duty owed to the
corporation), even if he is not successful on the merits, if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation. No indemnification may be made under clause (iii)
above, however, if the director or officer is adjudged liable for negligence or
misconduct in the performance of his duties to the corporation, unless a
corporation determines that, despite such adjudication, but in view of all the
circumstances, he is entitled to indemnification. The indemnification described
in clauses (ii) and (iii) above may be made only upon a determination that
indemnification is proper because the applicable standard of conduct has been
met. Such a determination may be made by a majority of a quorum of disinterested
directors, independent legal counsel, the stockholders or a court of competent
jurisdiction.
The indemnification of directors and officers is provided for by
Article SEVENTH of the Registrant's Second Amended and Restated Certificate
of Incorporation which provides in substance that, to the fullest extent
permitted by Delaware law as it now exists or as amended, each director and
officer shall be indemnified against reasonable costs and expenses, including
attorney's fees, and any liabilities which he may incur in connection with
any action to which he may be made a party by reason of his being or having
been a director or officer of the Registrant. The indemnification provided
by the Registrant's Second Amended and Restated Certificate of Incorporation
is not deemed exclusive of or intended in any way to limit any other rights
to which any person seeking indemnification may be entitled.
Section 102(b)(7) of the Delaware General Corporation Law, as amended,
permits a corporation to provide in its Certificate of Incorporation that a
director of the corporation shall not be personally liable to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived an improper
personal benefit.
Article NINTH of the Registrant's Second Amended and Restated
Certificate of Incorporation provides for the elimination of personal
liability of a director for breach of fiduciary duty, as permitted by Section
102(b)(7) of the Delaware General Corporation Law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The Exhibit Index immediately preceding the exhibits and the exhibits
listed thereon are incorporated herein by reference.
ITEM 9. UNDERTAKINGS.
1. The Registrant undertakes:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the Registration Statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the Registration
Statement;
3
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(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the Registration
Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (i) and
(ii) do not apply if the Registration
Statement is on Form S-3 or Form S-8, and
the information required to be included in a
post-effective amendment by those paragraphs
is contained in periodic reports filed by
the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are
incorporated by reference in the
Registration Statement.
(b) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment
shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the
offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
2. The Registrant hereby undertakes that for purposes of determining
any liability under the Securities Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the Registration Statement shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be in the initial
bona fide offering thereof.
3. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act, and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
4
<PAGE> 5
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 Fairfax, Virginia, on the 23rd day of December,
1998.
COMPUTER LEARNING CENTERS, INC.
By: /s/ REID R. BECHTLE
-------------------------------
Reid R. Bechtle
Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of Computer Learning
Centers, Inc., hereby severally constitute Reid R. Bechtle, Charles L.
Cosgrove and David Sylvester, and any of them singly, our true and lawful
attorneys with full power to them, and each of them singly, to sign for us
and in our names in the capacities indicated below, the Registration
Statement on Form S-8 filed herewith and any and all subsequent amendments to
said Registration Statement, and generally to do all such things in our names
and behalf in our capacities as officers and directors to enable Computer
Learning Centers, Inc. to comply with all requirements of the Securities and
Exchange Commission, hereby ratifying and confirming our signatures as they
may be signed by said attorneys, or any of them, to said Registration
Statement and any and all amendments thereto.
WITNESS our hands and common seal on the date set forth below.
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Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Reid R. Bechtle Chief ) December 23, 1998
- ------------------------ Executive Officer )
Reid R. Bechtle and Director )
(Principal Execu- )
tive Officer) )
/s/ Charles L. Cosgrove Vice President ) December 23, 1998
- ------------------------ and Chief Fin- )
Charles L. Cosgrove ancial Officer )
(Principal Finan- )
cial Officer) )
/s/ Mark M. Nasser Controller (Prin- ) December 23, 1998
- ------------------------ cipal Accounting )
Mark M. Nasser Officer) )
/s/ John L. Corse Director, President ) December 23, 1998
- ------------------------ and Chief Operating
John L. Corse Officer
/s/ Harry H. Gaines Director ) December 23, 1998
- ------------------------
Harry H. Gaines )
/s/ Ira D. Cohen Director ) December 23, 1998
- ------------------------
Ira D. Cohen )
/s/ Stephen P. Reynolds Director ) December 23, 1998
- ------------------------
Stephen P. Reynolds )
/s/ Ralph W. Clark Director ) December 23, 1998
- ------------------------
Ralph W. Clark )
6
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<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit
Number Description Page
- ------ ----------- ----
<S> <C> <C>
4.1 Second Amended and Restated *
Certificate of Incorporation, as
amended (incorporated herein by
reference to Exhibit 3.1 to the
Registrant's report on Form 10-Q
for the quarter ended July 31,
1997)
4.2 Amended and Restated By-Laws of *
the Registrant (incorporated
herein by reference to Exhibit
3.4 to the Registrant's
Registration Statement on Form
S-1, as amended (File No.
33-90716)(the "Form S-1"))
4.3 Specimen Certificate of Common *
Stock of the Registrant
(incorporated herein by reference
to Exhibit 4.1 to the Form S-1)
5 Opinion of Hale and Dorr LLP 8
23.1 Consent of Hale and Dorr LLP 8
(included in Exhibit 5)
23.2 Consent of PricewaterhouseCoopers 9
LLP
24.1 Power of Attorney (included in 5
the signature pages of this
Registration Statement)
99.1 1998 Stock Incentive Plan 10
</TABLE>
* Incorporated herein by reference
<PAGE> 1
Exhibit 5
December 23, 1998
Computer Learning Centers, Inc.
11350 Random Hills Road
Suite 240
Fairfax, Virginia 22030
Re: 1998 Stock Incentive Plan
Gentlemen:
We have assisted in the preparation of a Registration Statement on Form
S-8 to be filed on December 23, 1998 with the Securities and Exchange
Commission relating to an aggregate of 1,000,000 shares of the Common Stock,
$.01 par value per share ("Common Stock"), of Computer Learning Centers,
Inc., a Delaware corporation (the "Company"), issuable under the Company's
1998 Stock Incentive Plan (the "Plan").
We have examined the Certificate of Incorporation of the Company and
all amendments thereto, and originals, or copies certified to our
satisfaction, of all pertinent records of the meetings of the directors and
stockholders of the Company, the aforementioned Registration Statement and
such other documents relating to this Company as we deemed material for the
purposes of this opinion.
In our examination of the foregoing documents, we have assumed the
genuineness of all signatures and the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents
submitted to us as certified or photostatic copies and the authenticity of
the originals of such latter documents.
Based upon the foregoing, we are of the opinion that the Company has
duly authorized for issuance the shares of its Common Stock covered by the
Registration Statement to be issued under the Plan, as described in the
Registration Statement, and such shares, when issued and paid for in
accordance with the terms of the Plan and at a price per share in excess of
the par value per share for such shares, will be legally issued, fully-paid
and nonassessable.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission in connection with the aforementioned Registration
Statement.
Very truly yours,
HALE AND DORR LLP
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Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated March 13, 1998, except as to Note 16
which was as of April 27, 1998, appearing on page F-2 of Computer Learning
Centers, Inc.'s Annual Report on Form 10-K for the year ended January 31, 1998.
/s/ PricewaterhouseCoopers LLP
New York, New York
December 23, 1998
9
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Exhibit 99.1
COMPUTER LEARNING CENTERS, INC.
1998 STOCK INCENTIVE PLAN
1. PURPOSE
The purpose of this 1998 Stock Incentive Plan (the "Plan") of Computer
Learning Centers, Inc., a Delaware corporation (the "Company"), is to advance
the interests of the Company's stockholders by enhancing the Company's
ability to attract, retain and motivate persons who make (or are expected to
make) important contributions to the Company by providing such persons with
equity ownership opportunities and performance-based incentives and thereby
better aligning the interests of such persons with those of the Company's
stockholders. Except where the context otherwise requires, the term
"Company" shall include any present or future subsidiary corporations of
Computer Learning Centers, Inc. as defined in Section 424(f) of the Internal
Revenue Code of 1986, as amended, and any regulations promulgated thereunder
(the "Code").
2. ELIGIBILITY
All of the Company's employees, officers, directors, consultants and advisors
are eligible to be granted options, restricted stock, or other stock-based
awards (each, an "Award") under the Plan. Any person who has been granted an
Award under the Plan shall be deemed a "Participant".
3. ADMINISTRATION, DELEGATION
(a) ADMINISTRATION BY BOARD OF DIRECTORS. The Plan will be administered by
the Board of Directors of the Company (the "Board"). The Board shall
have authority to grant Awards and to adopt, amend and repeal such
administrative rules, guidelines and practices relating to the Plan as
it shall deem advisable. The Board may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or any Award in the
manner and to the extent it shall deem expedient to carry the Plan into
effect and it shall be the sole and final judge of such expediency. All
decisions by the Board shall be made in the Board's sole discretion and
shall be final and binding on all persons having or claiming any
interest in the Plan or in any Award. No director or person acting
pursuant to the authority delegated by the Board shall be liable for any
action or determination relating to or under the Plan made in good
faith.
(b) DELEGATION TO EXECUTIVE OFFICERS. To the extent permitted by applicable
law, the Board may delegate to one or more executive officers of the
Company the power to make Awards and exercise such other powers under
the Plan as the Board may determine, provided that the Board shall fix
the maximum number of shares subject to Awards and the maximum number of
shares for any one Participant to be made by such executive officers.
(c) APPOINTMENT OF COMMITTEES. To the extent permitted by applicable law,
the Board may delegate any or all of its powers under the Plan to one or
more committees or subcommittees of the Board (a "Committee"). The Board
shall appoint one such Committee of not less than two members, each
member of which shall be an "outside director" within the meaning of
Section 162(m) of the Code and a "non-employee director" as defined in
Rule 16b-3 promulgated under the Securities Exchange Act of 1934 (the
"Exchange Act"). All references in the Plan to the "Board" shall mean
the Board or a Committee of the Board or the executive officer referred
to in Section 3(b) to the extent that the Board's powers or authority
under the Plan have been delegated to such Committee or executive
officer.
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4. STOCK AVAILABLE FOR AWARDS
(a) NUMBER OF SHARES. Subject to adjustment under Section 4(c), Awards may
be made under the Plan for up to 1,000,000 shares of Common Stock. If
any Award expires or is terminated, surrendered or canceled without
having been fully exercised or is forfeited in whole or in part or
results in any Common Stock not being issued, the unused Common Stock
covered by such Award shall again be available for the grant of Awards
under the Plan, subject, however, in the case of Incentive Stock Options
(as hereinafter defined), to any limitation required under the Code.
Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares.
(b) PER-PARTICIPANT LIMIT. Subject to adjustment under Section 4(c), for
Awards granted after the Common Stock is registered under the Exchange
Act, the maximum number of shares with respect to which an Award may be
granted to any Participant under the Plan shall be 100,00 per calendar
year. The per-participant limit described in this Section 4(b) shall be
construed and applied consistently with Section 162(m) of the Code.
(c) ADJUSTMENT TO COMMON STOCK. In the event of any stock split, stock
dividend, recapitalization, reorganization, merger, consolidation,
combination, exchange of shares, liquidation, spin-off or other similar
change in capitalization or event, or any distribution to holders of
Common Stock other than a normal cash dividend, (i) the number and class
of securities available under this Plan, (ii) the number and class of
security and exercise price per share subject to each outstanding
Option, (iii) the repurchase price per security subject to each
outstanding Restricted Stock Award, and (iv) the terms of each other
outstanding stock-based Award shall be appropriately adjusted by the
Company (or substituted Awards may be made, if applicable) to the extent
the Board shall determine, in good faith, that such an adjustment (or
substitution) is necessary and appropriate. If this Section 4(c) applies
and Section 8(e)(1) also applies to any event, Section 8(e)(1) shall be
applicable to such event, and this Section 4(c) shall not be applicable.
5. STOCK OPTIONS
(a) GENERAL. The Board may grant options to purchase Common Stock (each, an
"Option") and determine the number of shares of Common Stock to be
covered by each Option, the exercise price of each Option and the
conditions and limitations applicable to the exercise of each Option,
including conditions relating to applicable federal or state securities
laws, as it considers necessary or advisable. An Option which is not
intended to be an Incentive Stock Option (as hereinafter defined) shall
be designated a "Nonstatutory Stock Option".
(b) INCENTIVE STOCK OPTIONS. An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an
"Incentive Stock Option") shall only be granted to employees of the
Company and shall be subject to and shall be construed consistently with
the requirements of Section 422 of the Code. The Company shall have no
liability to a Participant, or any other party, if an Option (or any
part thereof) which is intended to be an Incentive Stock Option is not
an Incentive Stock Option.
(c) EXERCISE PRICE. The Board shall establish the exercise price at the time
each Option is granted and specify it in the applicable option
agreement. The purchase price of shares that are subject to an option
shall not be less than the fair market value of such shares at the time
the option is granted (or less than 110% of the fair market value on the
date of the grant in the case of incentive stock options granted to
optionees holding more than 10% of the voting power of the Company).
(d) DURATION OF OPTIONS. Each Option shall be exercisable at such times and
subject to such terms and conditions as the Board may specify in the
applicable option agreement. No Option will be granted for a term in
excess of 10 years and Options granted to optionees holding more than
10% of the voting power of the Company shall not be granted for a term
in excess of 5 years.
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(e) EXERCISE OF OPTION. Options may be exercised only by delivery to the
Company of a written notice of exercise signed by the proper person
together with payment in full as specified in Section 5(f) for the
number of shares for which the Option is exercised.
(f) PAYMENT UPON EXERCISE. Common Stock purchased upon the exercise of an
Option granted under the Plan shall be paid for as follows:
(1) in cash or by check, payable to the order of the Company;
(2) except as the Board may otherwise provide in an Option
Agreement, (i) by delivery of an irrevocable and unconditional undertaking
by a creditworthy broker to deliver promptly to the Company sufficient funds
to pay the exercise price, (ii) by delivery of shares of Common Stock owned
by the Participant valued at their fair market value as determined by the
Board in good faith ("Fair Market Value"), which Common Stock was owned by
the Participant at least six months prior to such delivery or (iii) by
delivery by the Participant to the Company of a copy of irrevocable and
unconditional instructions to a creditworthy broker to deliver promptly to
the Company cash or a check sufficient to pay the exercise price;
(3) to the extent permitted by the Board and explicitly provided in
an Option Agreement, (i) by delivery of a promissory note of the Participant
to the Company on terms determined by the Board or (ii) by payment of such
other lawful consideration as the Board may determine; or
(4) any combination of the above permitted forms of payment.
6. RESTRICTED STOCK
(a) GRANTS. The Board may grant Awards entitling recipients to acquire
shares of Common Stock, subject to the right of the Company to
repurchase all or part of such shares at their issue price or other
stated or formula price (or to require forfeiture of such shares if
issued at no cost) from the recipient in the event that conditions
specified by the Board in the applicable Award are not satisfied prior
to the end of the applicable restriction period or periods established
by the Board for such Award (each, "Restricted Stock Award").
(b) TERMS AND CONDITIONS. The Board shall determine the terms and conditions
of any such Restricted Stock Award, including the conditions for
repurchase (or forfeiture) and the issue price, if any. Any st6ck
certificates issued in respect of a Restricted Stock Award shall be
registered in the name of the Participant and, unless otherwise
determined by the Board, deposited by the Participant, together with a
stock power endorsed in blank, with the Company (or its designee). At
the expiration of the applicable restriction periods, the Company (or
such designee) shall deliver the certificates no longer subject to such
restrictions to the Participant or if the Participant has died, to the
beneficiary designated, in a manner determined by the Board, by a
Participant to receive amounts due or exercise rights of the Participant
in the event of the Participant's death (the "Designated Beneficiary").
In the absence of an effective designation by a Participant, Designated
Beneficiary shall mean the Participant's estate.
7. OTHER STOCK-BASED AWARDS
The Board shall have the right to grant other Awards based upon the
Common Stock having such terms and conditions as the Board may determine,
including the grant of shares based upon certain conditions, the grant of
securities convertible into Common Stock and the grant of stock appreciation
rights.
8. GENERAL PROVISIONS APPLICABLE TO AWARDS
(a) TRANSFERABILITY OF AWARDS. Except as the Board may otherwise determine
or provide in an Award, Awards shall not be sold, assigned, transferred,
pledged or otherwise encumbered by the person to whom they are granted,
either voluntarily or by operation of law, except by will or the laws of
descent and distribution, and, during the life of the Participant, shall
be exercisable only by the Participant. References to a Participant, to
the extent relevant in the context, shall include references to
authorized transferees.
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<PAGE> 4
(b) DOCUMENTATION. Each Award under the Plan shall be evidenced by a written
instrument in such form as the Board shall determine. Each Award may
contain terms and conditions in addition to those set forth in the Plan.
(c) BOARD DISCRETION. Except as otherwise provided by the Plan, each type of
Award may be made alone or in addition or in relation to any other type
of Award. The terms of each type of Award need not be identical, and the
Board need not treat Participants uniformly.
(d) TERMINATION OF STATUS. The Board shall determine the effect on an Award
of the disability, death, retirement, authorized leave of absence or
other change in the employment or other status of a Participant and the
extent to which, and the period during which, the Participant, the
Participant's legal representative, conservator, guardian or Designated
Beneficiary may exercise rights under the Award.
(e) ACQUISITION EVENTS
(1) CONSEQUENCES OF ACQUISITION EVENTS. Upon the occurrence of an
Acquisition Event (as defined below), or the execution by the Company of any
agreement with respect to an Acquisition Event, the Board shall take any one
or more of the following actions with respect to then outstanding Awards: (i)
provide that outstanding Options shall be assumed, or equivalent Options
shall be substituted, by the acquiring or succeeding corporation (or an
affiliate thereof), provided that any such Options substituted for Incentive
Stock Options shall satisfy, in the determination of the Board, the
requirements of Section 424(a) of the Code; (ii) upon written notice to the
Participants, provide that all then unexercised Options will become
exercisable in full as of a specified time (the "Acceleration Time") prior to
the Acquisition Event and will terminate immediately prior to the
consummation of such Acquisition Event, except to the extent exercised by the
Participants between the Acceleration Time and the consummation of such
Acquisition Event; (iii) in the event of an Acquisition Event under the terms
of which holders of Common Stock will receive upon consummation thereof a
cash payment for each share of Common Stock surrendered pursuant to such
Acquisition Event (the "Acquisition Price"), provide that all outstanding
Options shall terminate upon consummation of such Acquisition Event and each
Participant shall receive, in exchange therefor, a cash payment equal to the
amount (if any) by which (A) the Acquisition Price multiplied by the number
of shares of Common Stock subject to such outstanding Options (whether or not
then exercisable), exceeds (B) the aggregate exercise price of such Options;
(iv) provide that all Restricted Stock Awards then outstanding shall become
free of all restrictions prior to the consummation of the Acquisition Event;
and (v) provide that any other stock-based Awards outstanding (A) shall
become exercisable, realizable or vested in full, or shall be free of all
conditions or restrictions, as applicable to each such Award, prior to the
consummation of the Acquisition Event, or (B), if applicable, shall be
assumed, or equivalent Awards shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof). An "Acquisition Event"
shall mean: (a) any merger or consolidation which results in the voting
securities of the Company outstanding immediately prior thereto representing
immediately thereafter (either by remaining outstanding or by being converted
into voting securities of the surviving or acquiring entity) less than 50% of
the combined voting power of the voting securities of the Company or such
surviving or acquiring entity outstanding immediately after such merger or
consolidation; (b) any sale of all or substantially all of the assets of the
Company; or (c) the complete liquidation of the Company.
(2) ASSUMPTION OF OPTIONS UPON CERTAIN EVENTS. The Board may grant Awards
under the Plan in substitution for stock and stock-based awards held by as a
result of a merger or consolidation of the employing corporation with the
Company or the acquisition by the Company of property or stock of the
employing corporation. The substitute Awards shall be granted on such terms
and conditions as the Board considers appropriate in the circumstances.
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(f) WITHHOLDING. Each Participant shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes required
by law to be withheld in connection with Awards to such Participant no
later than the date of the event creating the tax liability. The Board
may allow Participants to satisfy such tax obligations in whole or in
part in shares of Common Stock, including shares retained from the Award
creating the tax obligation, valued at their Fair Market Value. The
Company may, to the extent permitted by law, deduct any such tax
obligations from any payment of any kind otherwise due to a Participant.
(g) AMENDMENT OF AWARD. The Board may amend, modify or terminate any
outstanding Award, including but not limited to, substituting therefor
another Award of the same or a different type, changing the date of
exercise or realization, and converting an Incentive Stock Option to a
Nonstatutory Stock Option, provided that the Participant's consent to
such action shall be required unless the Board determines that the
action, taking into account any related action, would not materially and
adversely affect the Participant.
(h) CONDITIONS ON DELIVERY OF STOCK. The Company will not be obligated to
deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i)
all conditions of the Award have been met or removed to the satisfaction
of the Company, (ii) in the opinion of the Company's counsel, all other
legal matters in connection with the issuance and delivery of such
shares have been satisfied, including any applicable securities laws and
any applicable stock exchange or stock market rules and regulations, and
(iii) the Participant has executed and delivered to the Company such
representations or agreements as the Company may consider appropriate to
satisfy the requirements of any applicable laws, rules or regulations.
(i) ACCELERATION. The Board may at any time provide that any Options shall
become immediately exercisable in full or in part, that any Restricted
Stock Awards shall be free of all restrictions or that any other
stock-based Awards may become exercisable in full or in part or free of
some or all restrictions or conditions, or otherwise realizable in full
or in part, as the case may be.
9. MISCELLANEOUS
(a) NO RIGHT TO EMPLOYMENT OR OTHER STATUS. No person shall have any claim
or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or
any other relationship with the Company. The Company expressly reserves
the right at any time to dismiss or otherwise terminate its relationship
with a Participant free from any liability or claim under the Plan,
except as expressly provided in the applicable Award.
(b) NO RIGHTS AS STOCKHOLDER. Subject to the provisions of the applicable
Award, no Participant or Designated Beneficiary shall have any rights as
a stockholder with respect to any shares of Common Stock to be
distributed with respect to an Award until becoming the record holder of
such shares.
(c) EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective on the
date on which it is adopted by the Board, but no Award granted to a
Participant designated as subject to Section 162(m) by the Board shall
become exercisable, vested or realizable, as applicable to such Award,
unless and until the Plan has been approved by the Company's
stockholders. No Awards shall be granted under the Plan after the
completion of ten years from the earlier of (i) the date on which the
Plan was adopted by the Board or (ii) the date the Plan was approved by
the Company's stockholders, but Awards previously granted may extend
beyond that date.
(d) AMENDMENT OF PLAN. The Board may amend, suspend or terminate the Plan or
any portion thereof at any time, provided that no Award granted to a
Participant designated as subject to Section 162(m) by the Board
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after the date of such amendment shall become exercisable, realizable or
vested, as applicable to such Award (to the extent that such amendment
to the Plan was required to grant such Award to a particular
Participant), unless and until such amendment shall have been approved
by the Company's stockholders.
(e) STOCKHOLDER APPROVAL. For purposes of this Plan, stockholder approval
shall mean approval by a vote of the stockholders in accordance with the
requirements of Section 162(m) of the Code.
(f) GOVERNING LAW. The provisions of the Plan and all Awards made hereunder
shall be governed by and interpreted in accordance with the laws of the
State of Delaware, without regard to any applicable conflicts of law.
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