As filed with the Securities and Exchange Commission on December 3, 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
-----------------
SOCKET COMMUNICATIONS, INC.
(Exact name of Registrant as specified in its charter)
-----------------
DELAWARE 94-3155066
(State of incorporation) (I.R.S. Employer Identification No.)
37400 Central Court
Newark, CA 94560
(Address of principal executive offices)
-----------------
1995 STOCK PLAN
(Full title of the Plan)
-----------------
DAVID W. DUNLAP
Chief Financial Officer
SOCKET COMMUNICATIONS, INC.
37400 Central Court
Newark, CA 94560
510-744-2700
(Name, address, and telephone number, including area code,
of agent for service)
-----------------
COPIES TO:
BARRY E. TAYLOR, ESQ.
ROBERT G. O'CONNER, ESQ.
WILSON, SONSINI, GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CA 94304-1050
(650) 493-9300
- ------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Amount Offering Aggregate Amount of
Title of Securities to be Price Per Offering Registration
to be Registered Registered Share Price Fee
- --------------------------- ---------- ---------- ------------ -----------
<S> <C> <C> <C> <C>
Common Stock, $0.001 par value:
To be issued under 1995
Stock Plan . . . . . . 1,300,000 $0.643 (1) $836,410.06 $253.46
---------- ---------- ------------ -----------
TOTAL 1,300,000 -- $836,410.06 $253.46
========== ========== ============ ===========
</TABLE>
(1) Computed in accordance with Rule 457(c) and Rule 457(h) under the
Securities Act of 1933. Such computation is the weighted average
exercise price of $0.644 per share with respect to 1,106,348 shares
subject to options outstanding and $ 0.641 per share which is the
average of the bid and ask prices as reported on the OTC Bulletin Board
on November 30, 1998, with respect to 193,652 shares reserved for
options not yet granted.
================================================================================
<PAGE>
SOCKET COMMUNICATIONS, INC.
REGISTRATION STATEMENT ON FORM S-8
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
There are hereby incorporated by reference in this Registration
Statement the following documents and information heretofore filed with
the Securities and Exchange Commission (the "Commission"):
(a) The description of the Registrant's Common Stock contained in
the Registration Statement on Form 8-A filed pursuant to Section 12(b) of
the Exchange Act on April 11, 1995 and amended on June 15, 1995.
(b) The Registrant's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1997.
(c) The Registrant's Quarterly Reports on Form 10-QSB for the
fiscal quarters ended March 31, 1998, June 30, 1998 and September 30,
1998.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act subsequent to the filing of this
Registration Statement, and prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or
which deregisters all securities then remaining unsold, shall be deemed to
be incorporated by reference in the Registration Statement and to be part
hereof from the date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law (the "Delaware
Law") authorizes a court to award, or a corporation's Board of Directors
to grant, indemnity to directors and officers in terms sufficiently broad
to permit such indemnification under certain circumstances for liabilities
(including reimbursement for expenses incurred) arising under the
Securities Act of 1933, as amended (the "Securities Act"). Article VII
of the Registrant's Certificate of Incorporation and Article VI of the
Registrant's Bylaws provide for indemnification of the Registrant's
directors, officers, employees and other agents to the maximum extent
permitted by Delaware Law. In addition, the Registrant has entered into
Indemnification Agreements with its officers and directors and certain
stockholders.
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 which 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 Law, or (iv) for any transaction from which the director
derived an improper personal benefit.
The Registrant also maintains insurance for the benefit of its
directors and executive officers insuring such persons against certain
liabilities, including liabilities under the securities laws.
See also the undertakings set out in response to Item 9 herein.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit
Number Description
4.1 1995 Stock Plan, as amended.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati,
P.C. as to legality of securities being registered.
23.1 Consent of Wilson Sonsini Goodrich & Rosati,
P.C. (contained in Exhibit 5.1).
23.2 Consent of Independent Public Accountants.
24.1 Power of Attorney (see page II-4).
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 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.
(2) That, for the purpose of determining liability under the
Securities Act, to treat each post-effective amendment as a new
registration statement of the securities offered therein, and the offering
of the securities at that time shall be deemed to be the initial bona fide
offering therein.
(3) To remove from registration by means of a post-effective
amendment any of the securities that remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each
filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act (and, where applicable, each filing of
an employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference 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 an initial bona fide offering thereof.
(c) 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 Delaware General Corporation
Law, the Certificate of Incorporation of the Registrant, the Bylaws of the
Registrant, Indemnification Agreements entered into between the Registrant
and its officers and directors, 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Newark, State of California, on
this 30th day of November, 1998.
SOCKET COMMUNICATIONS, INC.
By: /s/ CHARLIE BASS
-------------------------
Charlie Bass
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints, jointly and severally, Charlie
Bass and David Dunlap, and each one of them, individually and without the
other, his or her attorney-in-fact, each with full power of substitution,
for him or her in any and all capacities, to sign any and all amendments
to this Registration Statement on Form S-8, and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all
that each of said attorneys-in-fact, or his or her substitute or
substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on this 30th day of November, 1998.
<TABLE>
<CAPTION>
Signature Title
- ---------------------------------- ------------------------------------------
<S> <C>
/s/ CHARLIE BASS Chairman of the Board and Chief Executive
- ---------------------------------- Officer (Principal Executive Officer)
Charlie Bass
/s/ DAVID W. DUNLAP Vice President of Finance and Administration
- ---------------------------------- and Chief Financial Officer (Principal
David W. Dunlap Financial and Accounting Officer)
/s/ MICHEAL L. GIFFORD Executive Vice President
- ---------------------------------- and Director
Micheal L. Gifford
/s/ JACK C. CARSTEN Director
- ----------------------------------
Jack C. Carsten
/s/ EDWARD M. ESBER, JR. Director
- ----------------------------------
Edward M. Esber, Jr.
/s/ GIANLUCA RATTAZZI Director
- ----------------------------------
Gianluca Rattazzi
/s/ LARS LINDGREN Director
- ----------------------------------
Lars Lindgren
</TABLE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
EXHIBITS
--------------
Registration Statement on Form S-8
SOCKET COMMUNICATIONS, INC.
December 2, 1998
INDEX TO EXHIBITS
Exhibit
Number Description
------- -----------
4.1 1995 Stock Plan, as amended.
5.1 Opinion of Wilson Sonsini Goodrich &
Rosati, P.C. as to legality of
securities being registered.
23.1 Consent of Wilson Sonsini Goodrich &
Rosati, P.C. (contained in
Exhibit 5.1).
23.2 Consent of Independent Public
Accountants.
24.1 Power of Attorney (see page II-5).
<PAGE>
EXHIBIT 4.1
SOCKET COMMUNICATIONS, INC.
1995 STOCK PLAN
(AS AMENDED, MARCH 18, 1998)
1. PURPOSES OF THE PLAN. The purposes of this Stock Plan are to
attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to
Employees, Directors and Consultants and to promote the success of the
Company's business. Options granted under the Plan may be Incentive
Stock Options or Nonstatutory Stock
Options, as determined by the Administrator at the time of grant. Stock
Purchase Rights may also be granted under the Plan.
2. DEFINITIONS. As used herein, the following definitions shall
apply:
(a) "ADMINISTRATOR" means the Board or any of its Committees,
as shall be administering the Plan, in accordance with Section 4 of the
Plan.
(b) "APPLICABLE LAWS" means the requirements relating to the
administration of stock option plans under U. S. state corporate laws,
U.S. federal and state securities laws, the Code, any stock exchange or
quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where Options or
Stock Purchase Rights are, or will be, granted under the Plan.
(c) "BOARD" means the Board of Directors of the Company.
(d) "CODE" means the Internal Revenue Code of 1986, as
amended.
(e) "COMMITTEE" means a committee of Directors appointed by
the Board in accordance with Section 4 of the Plan.
(f) "COMMON STOCK" means the common stock of the Company.
(g) "COMPANY" means Socket Communications, Inc., a Delaware
corporation.
(h) "CONSULTANT" means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services to
such entity.
(i) "DIRECTOR" means a member of the Board.
(j) "EMPLOYEE" means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the
Company. A Service Provider shall not cease to be an Employee in the
case of (i) any leave of absence approved by the Company or (ii)
transfers between locations of the Company or between the Company, its
Parent, any Subsidiary, or any successor. For purposes of Incentive
Stock Options, no such leave may exceed ninety days, unless reemployment
upon expiration of such leave is guaranteed by statute or contract. If
reemployment upon expiration of a leave of absence approved by the
Company is not so guaranteed, on the 181st day of such leave any
Incentive Stock Option held by the Optionee shall cease to be treated
as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option. Neither service as a Director nor the
payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.
(k) "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.
(l) "FAIR MARKET VALUE" means, as of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation
the Nasdaq National Market or the Nasdaq SmallCap Market of the Nasdaq
Stock Market, its Fair Market Value shall be the closing sales price for
such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or
system for the last market trading day prior to the time of
determination as reported in THE WALL STREET JOURNAL or such other
source as the Administrator deems reliable;
(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, the
Fair Market Value of a Share of Common Stock shall be the mean between
the high bid and low asked prices for the Common Stock on the last
market trading day prior to the day of determination; or, as reported in
the WALL STREET JOURNAL or such other source as the Administrator deems
reliable.
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good
faith by the Administrator.
(m) "INCENTIVE STOCK OPTION" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422
of the Code and the regulations promulgated thereunder.
(n) "NONSTATUTORY STOCK OPTION" means an Option not intended
to qualify as an Incentive Stock Option.
(o) "NOTICE OF GRANT" means a written or electronic notice
evidencing certain terms and conditions of an individual Option or Stock
Purchase Right grant. The Notice of Grant is part of the Option
Agreement.
(p) "OFFICER" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(q) "OPTION" means a stock option granted pursuant to the
Plan.
(r) "OPTION AGREEMENT" means an agreement between the Company
and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and
conditions of the Plan.
(s) "OPTION EXCHANGE PROGRAM" means a program whereby
outstanding Options are surrendered in exchange for Options with a lower
exercise price.
(t) "OPTIONED STOCK" means the Common Stock subject to an
Option or a Stock Purchase Right.
(u) "OPTIONEE" means the holder of an outstanding Option or
Stock Purchase Right granted under the Plan.
(v) "PARENT" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(w) "PLAN" means this 1995 Stock Plan, as amended.
(x) "RESTRICTED STOCK" means shares of Common Stock acquired
pursuant to a grant of Stock Purchase Rights under Section 11 below.
(y) "RESTRICTED STOCK PURCHASE AGREEMENT" means a written
agreement between the Company and the Optionee evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase Right.
The Restricted Stock Purchase Agreement is subject to the terms and
conditions of the Plan and the Notice of Grant.
(z) "RULE 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised
with respect to the Plan.
(aa) "SERVICE PROVIDER" means an Employee, Director or
Consultant.
(bb) "SECTION 16(b)" means Section 16(b) of the Exchange Act.
(cc) "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 13 of the Plan.
(dd) "STOCK PURCHASE RIGHT" means the right to purchase Common
Stock pursuant to Section 11 of the Plan, as evidenced by a Notice of
Grant.
(ee) "SUBSIDIARY" means a "subsidiary corporation," whether
now or hereafter existing, as defined in Section 424(f) of the Code.
3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of
Section 13 of the Plan, the maximum aggregate number of Shares which may
be optioned and sold under the Plan is 1,735,000 Shares. The Shares may
be authorized but unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right expires or becomes
unexercisable without having been exercised in full, or is surrendered
pursuant to an Option Exchange Program, the unpurchased Shares which
were subject thereto shall become available for future grant or sale
under the Plan (unless the Plan has terminated). However, Shares that
have actually been issued under the Plan, upon exercise of either an
Option or Stock Purchase Right, shall not be returned to the Plan and
shall not become available for future distribution under the Plan,
except that if Shares of Restricted Stock are repurchased by the Company
at their original purchase price, such Shares shall become available for
future grant under the Plan.
4. ADMINISTRATION OF THE PLAN.
(a) PROCEDURE.
(i) MULTIPLE ADMINISTRATIVE BODIES. The Plan may be
administered by different Committees with respect to different groups of
Service Providers.
(ii) SECTION 162(m). To the extent that the Administrator
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of
the Code, the Plan shall be administered by a Committee of two or more
"outside
directors" within the meaning of Section 162(m) of the Code.
(iii) RULE 16b-3. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions
contemplated hereunder shall be structured to satisfy the requirements
for exemption under Rule 16b-3.
(iv) OTHER ADMINISTRATION. Other than as provided above,
the Plan shall be administered by (A) the Board or (B) a Committee,
which committee shall be constituted to satisfy Applicable Laws.
(b) POWERS OF THE ADMINISTRATOR. Subject to the provisions
of the Plan and, in the case of a Committee, subject to the specific
duties delegated by the Board to such Committee, the Administrator shall
have the authority in its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Options and
Stock Purchase Rights may be granted hereunder;
(iii) to determine the number of Shares of Common Stock to
be covered by each Options and Stock Purchase Rights granted hereunder;
(iv) to determine the number of Shares of Common Stock to
be covered by each such award granted hereunder;
(v) to approve forms of agreement for use under the
Plan;
(vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Option or Stock Purchase
Right granted hereunder;
(vii) to reduce the exercise price of any Option or Stock
Purchase Right to the then current Fair Market Value if the Fair Market
Value of the Common Stock covered by such Option of Stock Purchase
Right has declined since the date the Option was granted;
(viii) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations
relating to sub-plans established for the purpose of qualifying for
preferred tax treatment under foreign tax laws;
(ix) to modify or amend each Option or Stock Purchase
Right (subject to Section 15(c) of the Plan), including the
discretionary authority to extend the post-termination exercisability
period of Options longer than is otherwise provided for in the Plan;
(x) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to
be issued upon exercise of an Option or Stock Purchase Right that number
of Shares having a Fair Market Value equal to the amount required to be
withheld. The Fair Market Value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be
determined. All elections by an Optionee to have Shares withheld for
this purpose shall be made in such form and under such conditions as the
Administrator may deem necessary or advisable;
(xi) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option or
Stock Purchase Right previously granted by the Administrator; and
(xii) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) EFFECT OF ADMINISTRATOR'S DECISION. All
decisions, determinations and interpretations of the Administrator shall
be final and binding on all Optionees and any other holders of Options or
Stock Purchase Rights.
5. ELIGIBILITY.
(a) Nonstatutory Stock Options and Stock Purchase Rights may
be granted to Service Providers. Incentive Stock Options may be granted
only to Employees.
6. LIMITATIONS.
(a) Each Option shall be designated in the Option Agreement
as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designation, to the extent that the
aggregate Fair Market Value of Shares with respect to which Incentive
Stock Options are exercisable for the first time by the Optionee during
any calendar year (under all plans of the Company and any Parent or
Subsidiary) exceeds $100,000, such Options shall be treated as
Nonstatutory Stock Options. For purposes of this Section 6(a),
Incentive Stock Options shall be taken into account in the order in
which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is
granted.
(b) Neither the Plan nor any Option or Stock Purchase Right
shall confer upon any Optionee any right with respect to continuing the
Optionee's relationship as a Service Provider with the Company, nor
shall they interfere in any way with the Optionee's right or the
Company's right to terminate such relationship at any time, with or
without cause.
(c) The following limitations shall apply to grants of
Options:
(i) No Service Provider shall be granted, in any fiscal
year of the Company, Options to purchase more than 750,000 Shares.
(ii) The foregoing limitation shall be adjusted
proportionately in connection with any change in the Company's
capitalization as described in Section 13.
(iii) If an Option is cancelled in the same fiscal year of
the Company in which it was granted (other than in connection with a
transaction described in Section 13), the cancelled Option will be
counted against the limit set forth in Subsections (i) above. For this
purpose, if the exercise
price of an Option is reduced, the transaction will be treated as a
cancellation of the Option and the grant of a new Option.
7. TERM OF PLAN. Subject to Section 18 of the Plan, the Plan
shall become effective upon its adoption by the Board. It shall
continue in effect for a term of ten (10) years unless earlier
terminated under Section 15 of the Plan.
8. TERM OF OPTION. The term of each Option shall be stated in
the Option Agreement; provided, however, that the term shall be no more
than ten (10) years from the date of grant thereof. In the case of an
Incentive Stock Option granted to an Optionee who, at the time the
Option is granted, owns stock representing more than ten percent (10%)
of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the
Incentive
Stock Option shall be five (5) years from the date of grant or such
shorter term as may be provided
in the Option Agreement.
9. OPTION EXERCISE PRICE AND CONSIDERATION.
(a) The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time the
Incentive Stock Option is granted, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company
or any Parent or Subsidiary, the per Share exercise price shall be no
less than 110% of the Fair Market Value per Share on the date of grant.
(B) granted to any other Employee, the per Share
exercise price shall be no less than 100% of the Fair Market Value per
Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option, the per
Share exercise price shall be determined by the Administrator. In the
case of a Nonstatutory Stock Option intended to qualify as
"performance-based compensation" within the meaning of Section 162(m) of
the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per
Share on the date of grant;
(iii) Notwithstanding the foregoing, Options may be
granted with a per Share exercise price of less than 100% of the Fair
Market Value per Share on the date of grant pursuant to a merger or
other corporate transaction.
(b) The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be
determined by the Administrator (and, in the case of an Incentive Stock
Option, shall be determined at the time of grant). Such consideration
may consist of (1) cash, (2) check, (3) promissory note, (4) other
Shares which (x) in the case of Shares acquired upon exercise of an
Option, have been owned by the Optionee for more than six months on the
date of surrender, and (y) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to
which such Option shall be exercised, (5) delivery of a properly
executed exercise notice together with such other documentation as the
Administrator and a broker, if applicable, shall require to effect an
exercise of the Option and delivery to the Company of the sale or loan
proceeds required to pay the exercise price, (6) a reduction in the
amount of Company liability to the Optionee, including any liability
attributable to the Optionee's participation in any Company-sponsored
deferred compensation program or arrangement, or (7) any combination of
the foregoing methods of payment. In making its determination as to the
type of consideration to accept, the Administrator shall consider if
acceptance of such consideration may be reasonably expected to
benefit the Company.
10. EXERCISE OF OPTION.
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any
Option granted hereunder shall be exercisable according to the terms of
the Plan and at such times and under such conditions as determined by
the Administrator and setforth in the Option Agreement, including
performance criteria with respect to the Company and/or the Optionee.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when written notice
of such exercise has been given to the Company in accordance with the
terms of the Option Agreement by the person entitled to exercise the
Option and full payment for the Shares with respect to which the Option
is exercised has been received by the Company. Full payment may, as
authorized by the Administrator, consist
of any consideration and method of payment allowable under Section 8(b)
hereof. Until the Shares are issued (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent
of the Company), no right to vote, receive dividends or any other rights
as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or
cause to be issued) such Shares promptly upon exercise of the Option.
No adjustment shall be made for a dividend or other right for which the
record date is prior to the date the Shares are issued, except as
provided in Section 13 hereof.
Exercise of an Option in any manner shall result in a
decrease in the number of Shares which thereafter may be available, both
for purposes of the Plan and for sale under the Option, by the number of
Shares as to which the Option is exercised.
(b) TERMINATION OF RELATIONSHIP AS A SERVICE PROVIDER. If an
Optionee ceases to be a Service Provider, other than upon the Optionee's
death or Disability, the Optionee may exercise his or her Option within
such period of time as is specified in the Option Agreement to the
extent that the Option is vested on the date of termination (but in no
event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the
absence of a specified time in the Option Agreement, the Option shall
remain exercisable for three (3) months following the Optionee's
termination. If, on the date of termination, the Optionee is not vested
as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option
within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the
Plan.
(c) DISABILITY OF OPTIONEE. If an Optionee ceases to be a
Service Provider as a result of the Optionee's Disability, the Optionee
may exercise his or her Option within such period of time as is
specified in the Option Agreement to the extent the Option is vested on
the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the
absence of a specified time in the Option Agreement, the Option shall
remain exercisable for twelve (12) months following the Optionee's
termination. If, on the date of termination, the Optionee is not vested
as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the
time specified herein, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.
(d) DEATH OF OPTIONEE. If an Optionee dies while a Service
Provider, the Option may be exercised within such period of time as is
specified in the Option Agreement (but in no event later than the
expiration of the term of such Option as set forth in the Notice of
Grant), by the Optionee's estate or by a person who acquires the right
to exercise the Option by bequest or inheritance,
but only to the extent that the Option is vested on the date of death.
In the absence of a specified time in the Option Agreement, the Option
shall remain exercisable for twelve (12) months following the Optionee's
termination. If, at the time of death, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of
the Option shall immediately revert to the Plan. The Option may be
exercised by the executor or administrator of the Optionee's estate or,
if none, by the person(s) entitled to exercise the Option under the
Optionee's will or the laws of descent or distribution. If the Option
is not so exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the
Plan.
(e) BUYOUT PROVISIONS. The Administrator may at any time
offer to buy out for a payment in cash or Shares, an Option previously
granted, based on such terms and conditions as the Administrator shall
establish and communicate to the Optionee at the time that such offer is
made.
11. STOCK PURCHASE RIGHTS.
(a) RIGHTS TO PURCHASE. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted
under the Plan and/or cash awards made outside of the Plan. After the
Administrator determines that it will offer Stock Purchase Rights under
the Plan, it shall advise the offeree in writing or electronically, by
means of a Notice of Grant, of the terms, conditions and restrictions
related to the offer, including the number of Shares that such person
shall be entitled to purchase, the price to be paid, and the time within
which such person must accept such offer, which shall in no event exceed
thirty (30) days from the date upon which the Administrator makes the
determination to grant the Stock Purchase Right. The offer shall be
accepted by execution of a Restricted Stock Purchase Agreement in the
form determined by the Administrator.
(b) REPURCHASE OPTION. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the
Company a repurchase option exercisable upon the voluntary or
involuntary termination of the purchaser's service with the Company for
any reason (including death or disability). The purchase price for
Shares repurchased pursuant to the Restricted Stock Purchase Agreement
shall be the original price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The
repurchase option shall lapse at a rate determined by the Administrator.
(c) OTHER PROVISIONS. The Restricted Stock Purchase
Agreement shall contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Administrator in
its sole discretion.
(d) RIGHTS AS A SHAREHOLDER. Once the Stock Purchase Right
is exercised, the purchaser shall have rights equivalent to those of a
shareholder and shall be a shareholder when his or her purchase is
entered upon the records of the duly authorized transfer agent of the
Company. No adjustment shall be made for a dividend or other right for
which the record date is prior to the
date the Stock Purchase Right is exercised, except as provided in
Section 13 of the Plan.
12. NON-TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS.
Unless
determined otherwise by the Administrator, an Option or Stock Purchase
Right may not be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by will or by the laws of descent
or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. If the Administrator makes an Option or
Stock Purchase Right transferable, such Option or Stock Purchase Right
shall contain such additional terms and conditions as the Administrator
deems appropriate.
13. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.
(a) CHANGES IN CAPITALIZATION. Subject to any required
action by the shareholders of the Company, the number of shares of
Common Stock covered by each outstanding Option or Stock Purchase Right,
and the number of shares of Common Stock which have been authorized for
issuance under the Plan but as to which no Options or Stock Purchase
Rights have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered
by each such outstanding Option or Stock Purchase Right, shall be
proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the
Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the
Company. The conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive.
Except as expressly
provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an
Option or Stock Purchase Right.
(b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall
notify the Optionee at least fifteen (15) days prior to such proposed
action. To the extent it has not been previously exercised, the Option
or Stock Purchase Right shall terminate immediately prior to the
consummation of such proposed action.
(c) MERGER. In the event of a merger of the Company with or
into another corporation, each outstanding Option or Stock Purchase
Right may be assumed or an equivalent
option or right may be substituted by such successor corporation or a
parent or subsidiary of such successor corporation. If, in such event,
an Option or Stock Purchase Right is not assumed or substituted, the
Option or Stock Purchase Right shall terminate as of the date of the
closing of the merger.
For the purposes of this paragraph, the Option or Stock Purchase Right
shall be considered assumed if, following the merger, the Option or
Stock Purchase Right confers the right to purchase or receive, for each
Share of Optioned Stock subject to the Option or Stock Purchase Right
immediately prior to the merger, the consideration (whether stock, cash,
or other securities or property) received in the merger by holders of
Common Stock for each Share held on the effective date of the
transaction (and if the holders are offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the
outstanding Shares). If such consideration received in the merger is
not solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the
Option or Stock Purchase Right, for each Share of Optioned Stock subject
to the Option or
Stock Purchase Right, to be solely common stock of the successor
corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger.
14. TIME OF GRANTING OPTIONS AND STOCK PURCHASE RIGHTS. The date
of grant
of an Option or Stock Purchase Right shall, for all purposes, be the
date on which the Administrator makes the determination granting such
Option or Stock Purchase Right, or such other later date as is
determined by the Administrator. Notice of the determination shall be
provided to each Optionee within a reasonable time after the date of
such grant.
15. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AMENDMENT AND TERMINATION. The Board may at any time
amend, alter, suspend or terminate the Plan.
(b) SHAREHOLDER APPROVAL. The Company shall obtain
shareholder approval of any Plan amendment to the extent necessary and
desirable to comply with Applicable Laws.
(c) EFFECT OF AMENDMENT OR TERMINATION. No amendment,
alteration,
suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the
Optionee and the Company. Termination of the Plan shall not affect the
Administrator's ability to exercise the powers granted to it hereunder
with respect to Options granted under the Plan prior to the date of such
termination.
16. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be
issued pursuant to the exercise of an Option or Stock Purchase Right
unless the exercise of such Option or Stock Purchase Right and the
issuance and delivery of such Shares shall comply with Applicable Laws,
and shall be further subject to the approval of counsel for the Company
with respect to such compliance.
As a condition to the exercise of an Option or Stock Purchase Right, the
Company may require the person exercising such Option or Stock Purchase
Right to represent and warrant at the time of any such exercise that the
Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of
counsel for the Company,
such a representation is required.
17. RESERVATION OF SHARES. The Company, during the term of this
Plan, shall at all times reserve and keep available such number of
Shares as shall be sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the
Company's counsel to be necessary to the lawful issuance and sale of any
Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
18. SHAREHOLDER APPROVAL. Continuance of the Plan shall be
subject to approval by the shareholders of the Company within twelve
(12) months before or after the date the Plan is adopted. Such
shareholder approval shall be obtained in the degree and manner required
under Applicable Laws.
SOCKET COMMUNICATIONS, INC.
1995 STOCK PLAN
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the Plan
shall have the same defined meanings in this Option Agreement.
I. NOTICE OF STOCK OPTION GRANT
[Name of person]
You have been granted an option to purchase Common Stock of the
Company, subject to the terms and conditions of the Plan and this Option
Agreement, as follows:
Date of Grant [fill in date]
Vesting Commencement Date [fill in date]
Exercise Price per Share &[fill in dollar amount]
Total Number of Shares Granted [fill in total number]
Total Exercise Price $[price x shares = total
exercise price]
Type of Option: ____ Incentive Stock Option
____ Nonstatutory Stock Option
Term/Expiration Date: [fill in date, either 18, 24 or
48 mos.]
VESTING SCHEDULE:
This Option may be exercised, in whole or in part, in accordance
with the following schedule:
[Depending upon the term of the grant, modify the following: 25% of
the Shares subject to the Option shall vest 12 months after the
Vesting Commencement Date and 1/48 of the Shares subject to the
Option shall vest each month thereafter.]
TERMINATION PERIOD:
This Option may be exercised for ____ (months/days) after
termination of your employment or consulting relationship, or such
longer period as may be applicable upon death or disability of Optionee
as provided in the Plan. In the event of the Optionee's change in
status from Employee to Consultant or Consultant to Employee, this
Option Agreement shall remain in effect. In no event shall this Option
be exercised later than the Term/Expiration Date as provided above.
II. AGREEMENT
1. GRANT OF OPTION. Socket Communications, Inc., a Delaware
corporation (the"Company"), hereby grants to the Optionee named in the
Notice of Grant (the "Optionee"), an option (the "Option") to purchase
the total number of shares of Common Stock (the "Shares") set forth in
the Notice of Grant, at the exercise price per share set forth in the
Notice of Grant (the "Exercise Price") subject to the terms, definitions
and provisions of the 1995 Stock Plan (the
"Plan") adopted by the Company, which is incorporated herein by
reference. Unless otherwise defined herein, the terms defined in the
Plan shall have the same defined meanings in this Option Agreement.
If designated in the Notice of Grant as an Incentive Stock
Option ("ISO"), this Option is intended to qualify as an Incentive Stock
Option as defined in Section 422 of the Code. Nevertheless, to the
extent that it exceeds the $100,000 rule of Code Section 422(d), this
Option shall be treated as a Nonstatutory Stock Option ("NSO").
2. EXERCISE OF OPTION.
a. RIGHT TO EXERCISE. This Option shall be exercisable
during its term in accordance with the Vesting Schedule set out in the
Notice of Grant and with the applicable provisions of the Plan and this
Option Agreement. In the event of Optionee's death, disability or other
termination of the employment or consulting relationship, this Option
shall be exercisable in accordance with the
applicable provisions of the Plan and this Option Agreement.
b. METHOD OF EXERCISE. This Option shall be exercisable by
written notice (in the form attached as Exhibit A) which shall state the
election to exercise the Option, the number of Shares in respect of
which the Option is being exercised, and such other representations and
agreements as to the holder's investment intent with respect to such
shares of Common Stock as may be required by the Company pursuant to the
provisions of the Plan. Such written notice shall be signed by the
Optionee and shall be delivered in person or by certified mail to the
Secretary of the Company. The written notice shall be accompanied by
payment of the Exercise Plan. This Option shall be deemed to be
exercised upon receipt by the Company of such written notice accompanied
by the Exercise Price.
No shares will be issued pursuant to the exercise of an Option
unless such issuance and such exercise shall comply with all relevant
provisions of law and the requirements of any stock exchange upon which
the Shares may then be listed. Assuming such compliance, for income tax
purposes the Shares shall be considered transferred to the Optionee on
the date on which the Option is exercised with respect to such Shares.
3. OPTIONEE'S REPRESENTATIONS. In the event the Shares
purchasable pursuant to the exercise of this Option have not been
registered under the Securities Act of 1933, as amended, at the time
this Option is exercised, Optionee shall, if required by the Company,
concurrently with the exercise of all or any portion of this Option,
deliver to the Company his or her Investment
Representation Statement in the form attached hereto as Exhibit B, and
shall read the applicable rules of the Commissioner of Corporations
attached to such Investment Representation Statement.
4. METHOD OF PAYMENT. Payment of the Exercise Price shall be by
any of the following, or a combination thereof, at the election of the
Optionee:
a. cash;
b. check;
c. surrender of other shares of Common Stock of the Company
which (A) in the case of Shares acquired pursuant to the exercise of a
Company option, have been owned by the Optionee for more than six (6)
months on the date of surrender, and (B) have a Fair Market Value on the
date of surrender equal to the Exercise Price of the Shares as to which
the Option is being exercised; or
d. delivery of a properly executed exercise notice together
with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and
delivery to the Company of the sale or loan proceeds required to pay
the Exercise Price.
5. RESTRICTIONS ON EXERCISE. This Option may not be exercised
until such time as the Plan has been approved by the shareholders of the
Company, or if the issuance of such Shares upon such exercise or the
method of payment of consideration for such shares would constitute a
violation of any applicable federal or state securities or other law or
regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G")
as promulgated by the Federal Reserve Board.
6. TERMINATION OF RELATIONSHIP. In the event of Optionee's
Continuous Status as an Employee or Consultant terminates, Optionee may,
to the extent otherwise so entitled at the date of such termination (the
"Termination Date"), exercise this Option during the Termination Period
set out in the Notice of Grant. To the extent that Optionee was not
entitled to exercise this Option at
the date of such termination, or if Optionee does not exercise this
Option within the time specified herein, the Option shall terminate.
7. DISABILITY OF OPTIONEE. Notwithstanding the provisions of
Section 6 above, in the event of termination of an Optionee's consulting
relationship or Continuous Status as an Employee as
a result of his or her disability, Optionee may, but only within twelve
(12) months from the date of such termination (and in no event later
than the expiration date of the term of such Option as set forth in the
Option Agreement), exercise the Option to the extent otherwise entitled
to exercise
it at the date of such termination; provided, however, that if such
disability is not a "disability" as such term is defined in Section
22(e)(3) of the Code, in the case of an Incentive Stock Option such
Incentive Stock Option shall cease to be treated as an Incentive Stock
Option and shall be treated for tax purposes as a Nonstatutory Stock
Option on the day three months and one day following such termination.
To the extent that Optionee was not entitled to exercise the Option at
the date of termination, or if Optionee does not exercise such Option to
the extent so entitled within the
time specified herein, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.
8. DEATH OF OPTIONEE. In the event of termination of Optionee's
Continuous Status as an Employee or Consultant as a result of the death
of Optionee, the Option may be exercised at any time within twelve (12)
months following the date of death (but in no event later than the date
of expiration of the term of this Option as set forth in Section 10
below), by Optionee's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent
the Optionee could exercise the Option at the date of death.
9. NON-TRANSFERABILITY OF OPTION. This Option may not be
transferred in any manner otherwise than by will or by the laws of
descent or distribution and may be exercised during the lifetime of
Optionee only by Optionee. The terms of this Option shall be binding
upon the executors, administrators, heirs, successors and assigns of the
Optionee.
10. TERM OF OPTION. This Option may be exercised only within the
term set out in the Notice of Grant, and may be exercised during such
term only in accordance with the Plan and the terms of this Option. The
limitations set out in Section 7 of the Plan regarding Options
designated as Incentive Stock Options and Options granted to more than
ten percent (10%) shareholders shall apply to this Option.
11. TAX CONSEQUENCES. Set forth below is a brief summary as of
the date
of this Option of some of the federal and California tax consequences of
exercise of this Option and disposition of the Shares. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO
CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS
OPTION OR DISPOSING OF THE SHARES.
a. EXERCISE OF ISO. If this Option qualifies as an ISO,
there will be no regular federal income tax liability or California
income tax liability upon the exercise of the Option, although the
excess, if any, of the Fair Market Value of the Shares on the date of
exercise over the Exercise Price will be treated as an adjustment to the
alternative minimum tax for federal tax purposes and may subject the
Optionee to the alternative minimum tax in the year of exercise.
b. EXERCISE OF ISO FOLLOWING DISABILITY. If the Optionee's
Continuous Status as an Employee or Consultant terminates as a result of
disability that is not total and permanent disability as defined in
Section 22(e)(3) of the Code, to the extent permitted on the date of
termination, the Optionee must exercise an ISO within 90 days of such
termination for the ISO to
be qualified as an ISO.
c. EXERCISE OF NONSTATUTORY STOCK OPTION. There may be a
regular
federal income tax liability and California income tax liability upon
the exercise of a Nonstatutory Stock Option. The Optionee will be
treated as having received compensation income (taxable at ordinary
income tax rates) equal to the excess, if any, of the Fair Market Value
of the Shares on the date of exercise over the Exercise Price. If
Optionee is an Employee or a former Employee, the
Company will be required to withhold from Optionee's compensation or
collect from Optionee and pay to the applicable taxing authorities an
amount in cash equal to a percentage of this compensation income at the
time of exercise, and may refuse to honor the exercise and refuse to
deliver Shares if such withholding amounts are not delivered at the time
of exercise.
d. DISPOSITION OF SHARES. In the case of an NSO, if Shares
are held for at least one year, any gain realized on disposition of the
Shares will be treated as long-term capital gain for federal and
California income tax purposes. In the case of an ISO, if Shares
transferred pursuant to the Option are held for at least one year after
exercise and are disposed of at least two years after the Date of
Grant, any gain realized on disposition of the Shares will also be
treated as long-term capital gain for federal and California income tax
purposes. If Shares purchased under an ISO are disposed of within such
one-year period or within two years after the Date of Grant, any gain
realized on such disposition will be treated as compensation income
(taxable at ordinary income rates) to the extent of the difference
between the Exercise Price and the lesser of (1) the Fair Market Value
of the Shares on the date of exercise, or (2) the sale price of the
Shares.
e. NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES. If
the Option granted to Optionee herein is an ISO, and if Optionee sells
or otherwise disposes of any of the Shares acquired pursuant to the ISO
on or before the later of (1) the date two years after the Date of
Grant, or (2) the date one year after the date of exercise, the Optionee
shall immediately notify the
Company in writing of such disposition. Optionee agrees that Optionee
may be subject to income tax withholding by the Company on the
compensation income recognized by the Optionee.
12. ENTIRE AGREEMENT; GOVERNING LAW. The Plan is incorporated
herein by reference. The Plan and this Option Agreement constitute the
entire agreement of the parties with respect to the subject matter
hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject
matter thereof, and may not be modified adversely to the Optionee's
interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by California law except for that
body of law pertaining to conflict of laws.
SOCKET COMMUNICATIONS, INC.
a Delaware corporation
By:
------------------------------
David W. Dunlap
Chief Financial Officer
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
THE OPTION HEREOF IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT
AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING
GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER
ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE
COMPANY'S STOCK OPTION PLAN WHICH IS INCORPORATED HEREIN BY REFERENCE,
SHALL CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF
EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY
WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S
EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT CAUSE.
Optionee acknowledges receipt of a copy of the Plan and represents that
he is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof.
Optionee has reviewed the Plan and this Option in their entirety, has
had an opportunity to
obtain the advice of counsel prior to executing this Option and fully
understands all provisions of the Option. Optionee hereby agrees to
accept as binding, conclusive and final all decisions of interpretations
of the Administrator upon any questions arising under the Plan or this
Option. Optionee further agrees to notify the Company upon any change
in the residence address indicated below.
Dated:
-------------------------- -----------------------------------
Optionee
Residence Address:
-----------------------------------
-----------------------------------
-----------------------------------
SOCKET COMMUNICATIONS, INC.
AMENDMENT NO. 1 TO STOCK OPTION AGREEMENT
WHEREAS: The Company believes it is in the best interests of the
Company and the Optionee to amend Optionee's Stock Option Agreement
attached hereto to provide for a Change of Control provision; now
therefore,
In consideration of the continued services of the Optionee to the
Company, the Company and the Optionee hereby agree that the following
Sections 12 and 13 shall be added to the Stock Option Agreement entered
into between the Company and the Optionee:
12. VESTING ACCELERATION ON CHANGE OF CONTROL.
(a) VESTING ACCELERATION. In the event of a "Change of
Control," all of the Optionee's rights to purchase stock under this
Agreement with the Company shall be automatically vested in their
entirety on an accelerated basis and be fully exercisable:
(i) as of the date immediately preceding such "Change of Control"
in the event this stock option agreement is or will be terminated or
canceled (except by mutual consent) or any successor to the Company
fails to assume and agree to perform such stock option agreement as
provided in Section 2(a) hereof at or prior to such time as any
suchperson becomes a successor to the Company; or
(ii) as of the date immediately preceding such "Change of Control"
in the event the Optionee does not or will not receive upon exercise of
the Optionee's stock purchase rights under such stock option agreement
the same identical securities and/or other consideration as is received
by all other shareholders in any merger, consolidation, sale, exchange
or similar transaction occurring upon or after such "Change of Control";
or
(iii) as of the date immediately preceding any "Involuntary
Termination" of the Optionee occurring upon or after any such "Change of
Control"; or
(iv) as of the date one (1) year following the first such "Change
of Control," provided that the Optionee shall have remained an employee
of the Company continuously throughout such one-year period, other than
a termination as a result of death or disability; whichever shall first
occur (all quoted terms as defined below); provided, however, that if it
is determined by the Company's independent public accountants that the
accelerated vesting and exercisability provided in this Section 12(a)
would preclude accounting for the "Change of Control" as a pooling of
interests for financial accounting purposes, and it is a condition to
the closing of the "Change of Control" that the transaction be accounted
for as a pooling of interests, then the vesting and exercisability shall
not be accelerated pursuant to this Section 12(a).
(b) CHANGE OF CONTROL. "Change of Control" means the
occurrence of any of the following events:
(i) Any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) is or becomes the "beneficial owner" (as defined in Rule 13d-3
under said Act), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the total voting power
represented by the Company's then outstanding voting securities; or
(ii) A change in the composition of the Board
of Directors of the Company occurring within a two-year period as a
result of which fewer than a majority of the directors are "Incumbent
Directors." "Incumbent Directors" shall mean directors who either (A)
are directors of the Company as of the date hereof, or (B) are elected,
or nominated for election, to the Board of Directors with the
affirmative votes (either by a specific vote or by approval of the proxy
statement of the Company in which such person is named as a nominee for
election as a director without objection to such nomination) of at least
a majority of the Incumbent Directors at the time of such election or
nomination; or
(iii) The consummation of (A) a merger or consolidation
of the Company with any other entity, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of
the surviving entity or the entity that controls the Company or such
surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving
entity or the entity that
controls the Company or such surviving entity outstanding immediately
after such merger or consolidation, or (B) the sale or disposition by
the Company of all or substantially all the Company's assets; or
(iv) The shareholders approve a plan of complete
liquidation of the Company.
(c) INVOLUNTARY TERMINATION. "Involuntary Termination"
shall mean without the Optionee's written consent: (i) a termination by
the Company of the Optionee's employment with the Company other than for
Cause; (ii) a material reduction of or variation in the Optionee's
duties, authority or responsibilities, relative to the Optionee's
duties, authority or responsibilities as in effect immediately prior to
such reduction or variation; (iii) a reduction by the Company in the
base salary of the Optionee as in effect immediately prior to such
reduction; (iv) a material reduction by the Company in the kind or level
of employee benefits, including bonuses, to which the Optionee was
entitled immediately prior to such reduction, with the result that the
Optionee's overall benefits package is materially reduced; (v) the
relocation of the Optionee to a facility or a location more than thirty
(30) miles from the Optionee's then present location; (vi) the failure
of the Company to obtain the assumption of this Agreement by any
successor as required in Section 13, or (vii) any act or set of facts
that would under applicable law constitute a constructive termination
of Optionee.
(d) CAUSE. "Cause" shall mean (i) any willful act of
personal dishonesty, fraud or misrepresentation taken by the Optionee in
connection with his or her responsibilities as an employee which was
intended to result in substantial gain or personal enrichment of the
Optionee at the expense of the Company and was materially and
demonstrably injurious to the Company; (ii) the
Optionee's conviction of a felony on account of any act which was
materially and demonstrably injurious to the Company; or (iii) the
Optionee's willful and continued failure to substantially perform his or
her principal duties and obligations of employment including under any
written agreements (other than any such failure resulting from
incapacity due to physical or mental illness), which failure is not
remedied in a reasonable period of time after receipt of written notice
from the Company. For the purposes of this Section 12(d), no act or
failure to act shall be considered "willful" unless done or omitted to
be done in bad faith and without reasonable belief that the act or
omission was in or not opposed to the best interests of the Company.
Any act or failure to act based upon authority given pursuant to a
resolution duly adopted by the Board of Directors of the Company or
based upon the advice of counsel for the Company shall be conclusively
presumed to be done or omitted to be done in good faith and in the best
interests of the Company.
(e) VOLUNTARY RESIGNATION; TERMINATION FOR CAUSE. If
the Optionee terminates employment as a result of an Involuntary
Termination, the Optionee shall be entitled to receive accelerated
vesting under Section 12(a) hereof. If the Optionee's continuous status
as an employee of the Company terminates by reason of the Optionee's
voluntary resignation (and not
Involuntary Termination) or if the Optionee's continuous status as an
employee of the Company is terminated for Cause, in either case prior to
such time as accelerated vesting occurs as provided in Section 12(a)
hereof, then the Optionee shall not be entitled to receive accelerated
vesting under
Section 12(a) hereof.
13. SUCCESSORS. Any successor to the Company (whether direct
or indirect and whether by purchase, merger or consolidation) shall
assume the obligations under this Agreement and agree expressly to
perform the obligations under this Agreement in the same manner and to
the same extent as the Company would be required to perform such
obligations in the absence of a succession.
The terms of this Agreement and all rights of the Optionee hereunder
shall inure to the benefit of, and be enforceable by, the Optionee's
personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
IN WITNESS WHEREOF, the Company and the Optionee have executed this
Agreement on the _____ day of ____________, 1998.
SOCKET COMMUNICATIONS, INC. OPTIONEE
By:
------------------------ ----------------------------
<PAGE>
EXHIBIT 5.1
November 30, 1998
Socket Communications, Inc.
37400 Central Court
Newark, CA 94560
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed
by you with the Securities and Exchange Commission on or about December
2, 1998 (the "Registration Statement") in connection with the
registration under the Securities Act of 1933, as amended, of an
aggregate of 1,300,000 shares of your Common Stock (the "Shares")
reserved for issuance under the 1995 Stock Plan (the "Plan"). As your
legal counsel, we have examined the proceedings taken and are familiar
with the proceedings proposed to be taken by you in connection with the
sale and issuance of the Shares under the Plan.
It is our opinion that, when issued and sold in the manner referred
to in the Plan and pursuant to the respective agreements which accompany
each grant under the Plan, the Shares will be legally and validly
issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to the use of our name
wherever it appears in the Registration Statement and any amendment
thereto.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ Wilson Sonsini Goodrich and
Rosati, P.C.
<PAGE>
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration
Statement (Form S-8) pertaining to the 1995 Stock Plan of Socket
Communications, Inc. of our report dated February 17, 1998, except for
Note 17 as to which the date was March 25, 1998, with respect to the
financial statements and schedule of Socket Communications, Inc.
included in its Annual Report (Form-10-KSB) for the year ended
December 31, 1997, filed with the Securities and Exchange Commission.
San Jose, California /s/ ERNST & YOUNG LLP
December 1, 1998
