<PAGE>
As filed with the Securities and Exchange Commission on April 4, 2000
Registration No. 333-_____
- --------------------------------------------------------------------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM S-8
Registration Statement Under The Securities Act Of 1933
----------------
HNC SOFTWARE INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 33-0248788
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
5935 CORNERSTONE COURT WEST
SAN DIEGO, CALIFORNIA 92121-3728
(Address of Principal Executive Offices)
(1) STOCK OPTIONS GRANTED BY ADVANCED INFORMATION MANAGEMENT SOLUTIONS, INC.
UNDER ITS STOCK OPTION PLAN AND ASSUMED BY HNC SOFTWARE INC.
(2) STOCK OPTIONS GRANTED BY ONYX TECHNOLOGIES, INC. UNDER ITS 1999
STOCK PLAN AND ASSUMED BY HNC SOFTWARE INC.
(3) STOCK OPTIONS GRANTED BY THE CENTER FOR ADAPTIVE SYSTEMS APPLICATIONS, INC.
UNDER ITS 1995 STOCK PLAN AND ASSUMED BY HNC SOFTWARE INC.
(Full Title of the Plan)
---------------------------------
KENNETH J. SAUNDERS
CHIEF FINANCIAL OFFICER
HNC SOFTWARE INC.
5935 CORNERSTONE COURT WEST
SAN DIEGO, CALIFORNIA 92121-3728
(858) 546-8877
(Name, Address and Telephone Number of Agent for Service)
---------------------------------
COPIES TO:
Kenneth A. Linhares, Esq.
Katherine Tallman Schuda
Fenwick & West LLP
Two Palo Alto Square
Palo Alto, California 94306
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================================================
TITLE OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED OFFERING PRICE PER SHARE AGGREGATE OFFERING PRICE REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.001 par value 428 (1) $26.3019 (2) $11,257(2) $2.97(3)
Common Stock, $0.001 par value 30,390 (4) $15.5419 (2) $472,318(2) $124.69(3)
Common Stock, $0.001 par value 80,036 (5) $12.1336 (2) $971,125(2) $256.38(3)
TOTALS 110,854 $13.1227 $1,454,700 $384.04
==============================================================================================================================
</TABLE>
(1) Shares subject to assumed Advanced Information Management Solutions, Inc.
Stock Option Plan as of March 30, 2000.
(2) Weighted average per share exercise price for such outstanding options
calculated pursuant to Rule 457(h)(1).
(3) Fee calculated pursuant to Section 6(b) of the Securities Act of 1933, as
amended.
(4) Shares subject to assumed ONYX Technologies, Inc. 1999 Stock Plan as of
March 30, 2000.
(5) Shares subject to assumed The Center for Adaptive Systems Applications,
Inc. 1995 Stock Plan as of March 30, 2000.
<PAGE>
HNC SOFTWARE INC.
REGISTRATION STATEMENT ON FORM S-8
PART II: INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
This registration statement relates to 110,854 shares of Common
Stock, $0.001 par value, of the Registrant, reserved for issuance upon the
exercise of stock options granted under the following stock option plans of
companies acquired by the Registrant that the Registrant has assumed: (a) the
Advanced Information Management Solutions, Inc. Stock Option Plan; (b) the ONYX
Technologies, Inc. 1999 Stock Plan; and (c) The Center for Adaptive Systems
Applications, Inc. 1995 Stock Plan.
These options were assumed by the Registrant in connection with
its acquisitions of, respectively: (a) Advanced Information Management
Solutions, Inc. ("AIM"), a California corporation, on February 25, 2000
pursuant to the terms of an Agreement and Plan of Reorganization dated as of
February 21, 2000 among the Registrant, AIM and a wholly owned subsidiary of
the Registrant; (b) ONYX Technologies, Inc., a Georgia corporation ("ONYX"), on
March 10, 2000 pursuant to the terms of that certain Agreement and Plan of
Reorganization dated as of March 9, 2000 among the Registrant, ONYX and a
wholly owned subsidiary of the Registrant; and (c) The Center for Adaptive
Systems Solutions, Inc., a Delaware corporation ("CASA"), pursuant to the terms
of that certain Agreement and Plan of Reorganization dated February 11, 2000,
as amended by Amendment No. 1 thereto dated March 1, 2000, among the
Registrant, CASA and a wholly owned subsidiary of the Registrant.
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission (the "COMMISSION") are incorporated herein by reference:
(a) The Registrant's latest annual report filed pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT") or the latest prospectus filed pursuant to
Rule 424(b) under the Securities Act of 1933, as amended (the
"SECURITIES ACT") that contains audited financial statements for
the Registrant's latest fiscal year for which such statements have
been filed.
(b) All other reports filed pursuant to Sections 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the
annual report or prospectus referred to in (a) above.
(c) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A filed with the
Commission under Section 12 of 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 a part hereof from the
date of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
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<PAGE>
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the issuance of the shares of Common Stock offered
hereby will be passed upon for the Registrant by Fenwick & West LLP, of Palo
Alto, California.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by Section 145 of the Delaware General Corporation Law,
the Registrant's Certificate of Incorporation includes a provision that
eliminates the personal liability of its directors to the Registrant 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 that 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.
In addition, as permitted by Section 145 of the Delaware General
Corporation Law, the Bylaws of the Registrant provide that: (i) the Registrant
is required to indemnify its directors and officers, as well as directors and
officers of any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise when they are serving in such capacities at
the request of the Registrant, to the fullest extent permitted by the Delaware
General Corporation Law; (ii) the Registrant may, in its discretion, indemnify
other officers, employees and agents as set forth in the Delaware General
Corporation Law; (iii) upon receipt of an undertaking to repay such advances if
indemnification is determined to be unavailable, the Registrant is required to
advance expenses, as incurred, to its directors and officers to the fullest
extent permitted by the Delaware General Corporation Law in connection with a
proceeding (except that the Registrant is not required to advance expenses to a
person against whom it brings a claim for breach of the duty of loyalty,
failure to act in good faith, intentional misconduct, knowing violation of law
or deriving an improper personal benefit); (iv) the rights conferred in the
Bylaws are not exclusive and the Registrant is authorized to enter into
indemnification agreements with its directors, officers and employees and
agents; and (v) the Registrant may not retroactively amend the Bylaw provisions
in a way that adversely affects the indemnification provided thereunder.
The Registrant's policy is to enter into indemnity agreements with
each of its directors and officers. The indemnity agreements provide that
directors and officers will be indemnified and held harmless against all
expenses (including attorneys' fees), judgments, fines, ERISA excise taxes or
penalties and settlement amounts paid or reasonably incurred by them in any
action, suit or proceeding, including any derivative action by or in the right
of the Registrant, on account of their services as a director or officer of the
Registrant or as directors or officers of any other corporation, partnership or
enterprise when they are serving in such capacities at the request of the
Registrant; except that no indemnity is provided in a derivative action in
which such director or officer is finally adjudged by a court to be liable to
the Registrant due to willful misconduct in the performance of his or her duty
to the Registrant, unless the court determines that such director or officer is
entitled to indemnification. The Registrant will not be obligated pursuant to
the agreements to indemnify or advance expenses to an indemnified party with
respect to proceedings or claims (i) initiated voluntarily by the indemnified
party and not by way of defense, except with respect to a proceeding authorized
by the Board of Directors and successful proceedings brought to enforce a right
to indemnification and/or advancement of expenses under the indemnity
agreements; (ii) for any amounts paid in settlement of a proceeding unless the
Registrant consents to such settlement; (iii) on account of any suit in which
judgment is rendered against the indemnified party for an accounting of profits
made from the purchase or sale by the indemnified party of securities of the
Registrant pursuant to the provisions of Section 16(b) of the Exchange Act and
related laws and regulations; (iv) on account of conduct by an indemnified
party that is finally adjudged
-3-
<PAGE>
to have been in bad faith or conduct that the indemnified party did not
reasonably believe to be in, or not opposed to, the best interests of the
Registrant; (v) on account of any criminal action or proceeding arising out of
conduct that the indemnified party had reasonable cause to believe was
unlawful; or (vi) if a final decision by a court having jurisdiction in the
matter shall determine that such indemnification is not lawful.
The indemnity agreement requires a director or officer to reimburse
the Registrant for expenses advanced only if and to the extent it is ultimately
determined that the director or executive officer is not entitled, under
Delaware law, the Registrant's Certificate of Incorporation, the Registrant's
Bylaws, his or her indemnity agreement or otherwise to be indemnified for such
expenses. The indemnity agreement provides that it is not exclusive of any
rights a director or executive officer may have under the Certificate of
Incorporation, the Bylaws, other agreements, any majority-in-interest vote of
the stockholders or vote of disinterested directors, Delaware law, or otherwise.
The indemnification provision in the Bylaws, and the indemnity
agreements entered into between the Registrant and its directors and officers,
may be sufficiently broad to permit indemnification of the Registrant's
directors and officers for liabilities arising under the Securities Act.
The indemnity agreements require the Registrant to maintain director
and officer liability insurance to the extent readily available. The Registrant
currently carries a director and officer insurance policy.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
<TABLE>
<S> <C>
4.01* Advanced Information Management Solutions, Inc. Stock Option Plan.
4.02* Form of Advanced Information Management Solutions, Inc. stock option agreement.
4.03* ONYX Technologies, Inc. 1999 Stock Plan.
4.04* Form of ONYX Technologies, Inc. stock option agreement.
4.05* The Center for Adaptive Systems Applications, Inc. 1995 Stock Option Plan.
4.06* Forms of The Center for Adaptive Systems Applications, Inc. stock option agreements.
4.07 Registrant's Restated Certificate of Incorporation filed with the Secretary of State of
Delaware on June 13, 1996(1).
4.08 Registrant's Bylaws, as amended(2).
4.09 Form of specimen certificate for Registrant's Common Stock(3).
5.01* Opinion of Fenwick & West LLP.
-4-
<PAGE>
23.01* Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02* Consent of PricewaterhouseCoopers LLP, Independent Accountants.
23.03* Consent of PricewaterhouseCoopers LLP, Independent Accountants.
24.01* Power of Attorney (see page 7).
</TABLE>
- ---------------------------
* Filed herewith.
(1) Filed as Exhibit 3(i).04 with the Registrant's Report on Form
10-Q for the quarter ended June 30, 1996, as originally filed
on August 13, 1996.
(2) Filed as Exhibit 3(i).01 with the Registrant's Report on Form
10-Q for the quarter ended June 30, 1998, as amended.
(3) Incorporated by reference from Exhibit 4.01 to the
Registrant's Registration Statement on Form S-1 (File No.
33-91932) filed on May 5, 1995, and as subsequently amended.
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in the
volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low and
high end of the estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20% change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the Registration Statement.
(2) 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.
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<PAGE>
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
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 the initial BONA
FIDE offering thereof.
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 provisions described in Item 6 hereof, 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 hereby,
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.
-6-
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each individual whose signature
appears below constitutes and appoints John Mutch, Kenneth J. Saunders and
Russell C. Clark, and each of them, his true and lawful attorneys-in-fact and
agents with full power of substitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement on Form S-8, and to
file the same with all exhibits thereto and all documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he or it might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or his or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of San Diego, State of
California, on April 3, 2000.
HNC SOFTWARE INC.
By: /s/ Kenneth J. Saunders
----------------------------------------
Kenneth J. Saunders
Chief Financial Officer and Secretary
-7-
<PAGE>
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
-------------- ----------- ---------
<S> <C> <C>
PRINCIPAL EXECUTIVE OFFICER:
/s/ John Mutch
- ------------------------------------ President, Chief Executive Officer April 3, 2000
John Mutch and a Director
PRINCIPAL FINANCIAL OFFICER:
/s/ Kenneth J. Saunders
- ------------------------------------ Chief Financial Officer and Secretary April 3, 2000
Kenneth J. Saunders
PRINCIPAL ACCOUNTING OFFICER:
/s/ Russell C. Clark
- ------------------------------------ Vice President, Corporate April 3, 2000
Russell C. Clark Finance, and Assistant Secretary
ADDITIONAL DIRECTORS:
/s/ Edward K. Chandler
- ------------------------------------ Director April 3, 2000
Edward K. Chandler
/s/ Thomas F. Farb
- ------------------------------------ Director April 3, 2000
Thomas F. Farb
/s/ Charles H. Gaylord, Jr.
- ------------------------------------ Director April 3, 2000
Charles H. Gaylord, Jr.
/s/ Alex W. Hart
- ------------------------------------ Director April 3, 2000
Alex W. Hart
/s/ Robert L. North
- ------------------------------------ Director April 3, 2000
Robert L. North
</TABLE>
-8-
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- ------ -------------
<S> <C>
4.01* Advanced Information Management Solutions, Inc. Stock Option Plan.
4.02* Form of Advanced Information Management Solutions, Inc. stock option agreement.
4.03* ONYX Technologies, Inc. 1999 Stock Plan.
4.04* Form of ONYX Technologies, Inc. stock option agreement.
4.05* The Center for Adaptive Systems Applications, Inc. 1995 Stock Option Plan.
4.06* Forms of The Center for Adaptive Systems Applications, Inc. stock option agreements.
5.01* Opinion of Fenwick & West LLP.
23.01* Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02* Consent of PricewaterhouseCoopers LLP, Independent Accountants.
23.03* Consent of PricewaterhouseCoopers LLP, Independent Accountants.
24.01* Power of Attorney (see page 7).
</TABLE>
- ---------------------------
* Filed herewith.
<PAGE>
ADVANCED INFORMATION MANAGEMENT SOLUTIONS, INC.
STOCK OPTION PLAN
1. PURPOSES. Advanced Information Management Solutions, Inc. (the
"Company") has adopted this Plan to enhance the interest and concern of the
Company's employees, officers, directors and consultants in the success of the
Company by giving them an ownership interest in the Company, and to give them an
incentive to continue their service to the Company.
2. STOCK SUBJECT TO PLAN. The Company shall reserve 1,000,000 shares of
its no par value Common Stock (the "Shares") to be issued upon exercise of
options which may be granted from time to time under this Plan. As it may from
time to time determine, the Board of Directors of the Company (the "Board") may
authorize that the Shares may be comprised, in whole or in part, of authorized
but unissued shares of the Company's Common Stock or of issued shares which have
been reacquired. If options granted under this Plan terminate or expire before
being exercised in whole or in part, the Shares subject to those options which
have not been issued may be subjected to options subsequently granted under the
Plan.
3. ADMINISTRATION OF THE PLAN. The Board shall appoint a Stock Option
Committee (the "Committee") which shall consist of not fewer than two (2)
members of the Board, or, at the election of the Board or if the Board consists
of fewer than two directors, may consist of the entire Board, to administer this
Plan. Subject to the express provisions of this Plan and guidelines which may be
adopted from time to time by the Board, the Committee shall have plenary
authority in its discretion (a) to determine the individuals to whom, and the
times at which, options are granted, and the number and purchase price of the
Shares subject to each option; (b) to determine whether the options granted
shall be "incentive stock options" within the meaning of Section 422A of the
Internal Revenue Code of 1986 (the "Code"), or non-statutory stock options, or
both; (c) to interpret the Plan and prescribe, amend and rescind rules and
regulations relating to it; (d) to determine the terms and provisions (and
amendments thereof) of the respective option agreements subject to Section 6 of
the Plan, which need not be identical, including, if the Committee shall
determine that a particular option is to be an incentive stock option, such
terms and provisions (and amendments thereof) as the Committee deems necessary
to provide for an incentive stock option or to conform to any change in any law,
regulation, ruling or interpretation applicable to incentive stock options; and
(e) to make any and all determinations which the Committee deems necessary or
advisable in administering the Plan. The Committee's determination on the
foregoing matters shall be conclusive. The Committee may delegate any of the
foregoing authority to the President with respect to options granted to or which
are held by non-officers and non-directors.
4. PERSONS ELIGIBLE. Employees of the Company or its subsidiaries
(including officers) may be granted either incentive or non-statutory options.
Consultants of the Company and its subsidiaries (including directors) may be
granted only non-statutory options, except directors who are also employees, who
may be granted either incentive or non-statutory options. For this purpose,
"employee" shall conform to the requirements of Section 422A of the Code, and
"subsidiary" means subsidiary corporations as defined in Section 424 of the
Code.
Page 1 of 6
<PAGE>
The aggregate fair market value (determined as of the time the
option is granted) of the Shares with respect to which incentive stock options
are exercisable for the first time by an optionee during any calendar year
(under all incentive stock option plans of the Company or its parent or
subsidiaries) shall not exceed $100,000.
5. CHANGES IN CAPITAL STRUCTURE.
(a) EFFECT ON THE PLAN. In the event of changes in the
outstanding capital stock of the Company by reason of any stock dividend, stock
split or reverse split, reclassification, recapitalization, merger or
consolidation, acquisition of 80 percent or more of its gross assets or stock,
reorganization or liquidation, the Committee and/or the Board shall make such
adjustments in the aggregate number and class of shares available under the Plan
as it deems appropriate, and such determination shall be final, binding and
conclusive.
(b) EFFECT ON OUTSTANDING OPTIONS.
(i) STOCK SPLITS AND LIKE EVENTS. Should a
stock dividend, stock split, reverse stock split, or reclassification occur,
then the Committee and/or the Board shall make such adjustments in (A) the
number and class of shares to which optionees will thereafter be entitled upon
exercise of their outstanding options and (B) the price which optionees shall be
required to pay upon such exercise, as it in its sole discretion in good faith
deems appropriate, and such determination shall be final, binding and
conclusive. Such adjustments shall have the effect that the aggregate exercise
price paid by, and number and class of shares received by, an optionee who
exercises an option subsequent to such occurrence shall be the same as if such
optionee had exercised the option immediately prior to such occurrence.
(ii) RECAPITALIZATIONS. In the event of (A) a
dissolution, liquidation, or sale of all or substantially all of the assets of
the Company, or (B) a merger or consolidation in which the Company is not the
surviving entity, or (C) a merger in which the Company is the surviving entity
but the shares of the Company's common stock outstanding immediately preceding
the merger are converted by virtue of the merger into other securities, cash, or
other property, then, at the sole discretion of the Board and to the extent
permitted by applicable law, options granted under this Plan:
(1) shall terminate upon such event and may be exercised prior thereto
only to the extent such options are then exercisable; or
(2) shall terminate upon such event, or such date prior to the
consummation of the event as the Board may determine, but shall become
fully exercisable as to all shares upon the consummation of such event
or on such date determined by the Board; or
(3) shall continue in full force and effect and, if applicable, the
surviving entity shall assume such options and/or shall substitute
similar options for such options; or
(4) shall be treated as provided in the applicable agreement or plan of
merger, consolidation, dissolution, liquidation, sale of assets or
other similar agreement.
Page 2 of 6
<PAGE>
Notwithstanding the above, upon the occurrence of any such event, each optionee
shall have such greater rights as may be provided in such optionee's stock
option agreement, which at the discretion of the Board and/or Committee, may
include any one or more of the above provisions.
(c) SUBSTITUTION OR ASSUMPTION OF OPTIONS BY THE COMPANY. The
Company, from time to time, also may substitute or assume outstanding awards
granted by another company, whether in connection with an acquisition of such
other company or otherwise, by either (A) granting an option under the Plan in
substitution of such other company's award, or (B) assuming such award as if it
had been granted under the Plan if the terms of such assumed award could be
applied to an option granted under the Plan. Such substitution or assumption
shall be permissible if the holder of the substituted or assumed option would
have been eligible to be granted an option under the Plan if the other company
had applied the rules of the Plan to such grant. In the event the Company
assumes an award granted by another company, the terms and conditions of such
award shall remain unchanged (except that the exercise price and the number and
nature of shares issuable upon exercise of any such option will be adjusted
appropriately pursuant to Section 424(a) of the Code). In the event the Company
elects to grant a new option rather than assuming an existing option, such new
option may be granted with a similarly adjusted exercise price.
6. TERMS AND CONDITIONS OF OPTIONS. Each option granted under this Plan
shall be evidenced by a stock option agreement (hereinafter called "Agreement")
which is not inconsistent with this Plan, and the form of which the Committee
and/or Board may from time to time determine, provided that the Agreement shall
contain the substance of the following:
(a) OPTION PRICE. The option price shall be not less than 100%
of the fair market value of the Shares at the time the option is granted, which
shall be the date the Committee and/or Board, or its delegate, awards the grant,
except in the case of non-statutory stock options granted to employees, in which
case the option price shall be not less than 85% of the fair market value of the
Shares at the time the option is granted. If the optionee, at the time the
option is granted, owns stock possessing more than ten percent (10%) of the
total combined voting power of all the classes of stock of the Company or of its
parent or subsidiaries (a "Principal Shareholder"), the option price of either
incentive or non-statutory stock options shall be not less than 110% of the fair
market value of the Shares at the time the option is granted. The fair market
value of the Shares shall be determined and the option price of the Shares set
by the Committee and/or Board in accordance with the valuation methods described
in Section 20.2031-2 of the Treasury Regulations.
(b) METHOD OF EXERCISE. At the time of purchase, Shares
purchased under options shall be paid for in full either (i) in cash, (ii) at
the discretion of the Board, with a promissory note secured by the Shares
purchased, (iii) at the discretion of the Committee and/or Board, with
outstanding stock of the Company at such value as the Board shall determine in
its sole discretion to be the fair market value of such stock, or (iv) a
combination of promissory note (if permitted pursuant to (ii) above), stock (if
permitted pursuant to (iii) above), and/or cash. To the extent that the right to
purchase Shares has accrued under an option, the optionee may exercise said
option from time to time by giving written notice to the Company stating the
number of Shares with respect to which the optionee is exercising the option,
and submitting
Page 3 of 6
<PAGE>
with said notice payment of the full purchase price of said Shares either in
cash or, at the discretion of the Board and/or Committee as described above,
with a promissory note, outstanding stock of the Company, or a combination of
cash, promissory note, and/or such stock. As soon as practicable after
receiving such notice and payment, the Company shall issue, without transfer
or issue tax to the optionee (or other person entitled to exercise the
option), and at the main office of the Company or such other place as shall
be mutually acceptable, a certificate or certificates representing such
Shares out of authorized but unissued Shares or reacquired Shares of its
capital stock, as the Board and/or Committee, or its delegate, may elect, for
the number of Shares to be delivered. The time of such delivery may be
postponed by the Company for such period as may be required for it with
reasonable diligence to comply with such procedures as may, in the opinion of
counsel to the Company, be desirable in view of federal and state laws,
including corporate securities laws and revenue and taxation laws. If the
optionee (or other person entitled to exercise the option) fails to accept
delivery of any or all of the number of Shares specified in such notice upon
tender of delivery of the certificates representing them, the right to
exercise the option with respect to such undelivered Shares may be terminated.
(c) OPTION TERM. The Committee and/or Board may grant options
for any term, but shall not grant any options for a term longer than ten (10)
years from the date the option is granted (except in the case of an incentive or
non-statutory option granted to a Principal Shareholder in which case the term
shall be no longer than five (5) years from the date the option is granted).
Each option shall be subject to earlier termination as provided in this section
6 of this Plan.
(d) EXERCISE OF OPTIONS. Each option granted under this Plan
shall be exercisable on such date or dates, upon or after the occurrence of
certain events, or upon or after the achievement of certain performance
milestones (which dates may be advanced or which occurrences or achievements may
be waived in whole or in part or extended at the discretion of the Committee
and/or Board) and during such period and for such number of Shares as shall be
determined by the Committee and/or Board. An incentive option granted to a
non-officer may not be exercised at any time unless the optionee shall have
continuously served, to the extent determined by the Committee and/or Board, as
an employee of the Company or its subsidiary throughout a period commencing on
the date an option is granted and ending at a specified time no more than three
(3) months and no fewer than thirty (30) days before an attempted exercise of
the option, and, if applicable, unless the Committee and/or Board shall
determine and notify the optionee in writing that certain events have occurred
or certain performance milestones have been achieved.
(e) NONASSIGNABILITY OF OPTION RIGHTS. No option shall be
assignable or transferable by the optionee except by will or by the laws of
descent and distribution. During the life of an optionee, the option shall be
exercisable only by the optionee.
(f) EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH OR
DISABILITY. In the event the optionee's employment with the Company and its
subsidiaries ceases, as determined by the Committee, during the optionee's life
for any reason (except disability or death), including retirement, any incentive
option or unexercised portion thereof granted to a non-officer optionee which is
otherwise exercisable shall terminate unless exercised within a specified period
not to
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<PAGE>
exceed three (3) months nor to be fewer than thirty (30) days from the date
on which such employment ceased but not later than the date of expiration of
the option period. In the event of the death or disability of the optionee
while employed or within a specified period not to exceed three (3) months
nor to be fewer than thirty (30) days from the date on which such employment
ceases, any option or unexercised portion thereof granted to the optionee, if
otherwise exercisable by the optionee at the date of death or disability, may
be exercised by the optionee (or by the optionee's personal representatives,
heirs or legatees) at any time prior to the expiration of one year from the
date of death or disability of the optionee but not later than the date of
expiration of the option period. For purposes of this Plan, "disability"
shall be defined as those conditions described in Code Section 22(e)(3), and
such other conditions as the Committee may reasonably determine constitute a
disability.
(g) RIGHTS OF OPTIONEE. The optionees shall have no rights as
a stockholder with respect to any Shares subject to an option until the date of
issuance of a stock certificate to the optionee for such Shares. No adjustment
shall be made for dividends or other rights of which the record date is prior to
the date such stock certificate is issued. Neither this Plan, nor any action or
agreement thereunder, shall confer any rights of employment, any rights to
election or retention as an officer or director, or any rights to serve as a
consultant.
7. USE OF PROCEEDS. The proceeds from the sale of stock pursuant to
options granted under the Plan shall constitute general funds of the Company.
8. AMENDMENT OF PLAN. The Board of Directors may at any time amend the
Plan, provided that no amendment may affect any then outstanding options or any
unexercised portions thereof. In addition, any amendment to the Plan increasing
the number of Shares reserved under the Plan, altering the employees or class of
employee eligible to be granted incentive stock options under the Plan, causing
options granted to employees and intended to be incentive options under the Plan
not to qualify as "incentive stock options" under Section 422A of the Code, or
amending this Section 8 shall be subject to shareholder approval as shall any
amendment which would cause the Plan not to satisfy the conditions of Rule 16b-3
once the Company registers a class of equity securities pursuant to Section 12
of the Securities Exchange Act of 1934.
9. FINANCIAL INFORMATION. Whenever the Company provides financial
statements, whether audited or unaudited, to all of its shareholders as a group,
the Company shall concurrently provide each optionee with a copy of such
financial statements. Notwithstanding the foregoing, the Company shall provide
each optionee at the end of its fiscal year with a copy of its financial
statements, either audited or unaudited, for such fiscal year, within ninety
(90) days after the end of such fiscal year if such person is then an optionee.
In connection with such provision, the Company may require the optionee to enter
into a nondisclosure agreement; provided, however, that such nondisclosure
agreement may not contain provisions which are more stringent than those the
Company imposes on its shareholders which are also receiving the financial
statements.
10. EFFECTIVE DATE AND TERMINATION OF PLAN. This Plan was adopted by
the Board of Directors on January 1, 1998, and approved by the shareholders on
January 1, 1998. The Board
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<PAGE>
may terminate this Plan at any time. If not earlier terminated, the Plan
shall terminate on January 1, 2008. Termination of the Plan will not affect
rights and obligations theretofore granted and then in effect.
This Plan, the granting of any option hereunder, and the
issuance of stock upon the exercise of any option, shall be subject to such
approval or other conditions as may be required or imposed by any regulatory
authority having jurisdiction to issue regulations or rules with respect
thereto, including the securities laws of various governmental entities.
Page 6 of 6
<PAGE>
EXHIBIT 4.02
ADVANCED INFORMATION MANAGEMENT SOLUTIONS, INC.
NON-STATUTORY STOCK OPTION AGREEMENT
GENERAL OPTION INFORMATION
Name of Consultant:
Address of Consultant:
Total Number of Option Shares:
Option Exercise Price:
Date of Grant:
Contract Period:
Option Expiration Date:
Exercise Schedule:
Exercise Window:
Aggregate Percentage of Exercisable
Date Option Shares That Expire
---- -------------------------
Termination of Consulting:
If, prior to the Option Expiration Date, the Consultant's service to
the Company (and its Subsidiaries) is terminated for any reason, with
or without cause, and whether at the initiative of the Consultant or
the Company, the Option shall remain exercisable following such
termination as to the number of Option Shares which
<PAGE>
had become exercisable as of the date of termination under the
Exercise Schedule above, but no additional Option Shares shall become
exercisable under the Option after the date of termination. Upon any
such termination, however, Option Shares which remain exercisable as
provided above shall cease to be exercisable in stages as provided in
the Exercise Window above, except that in no event shall any Option
Shares which were exercisable as of the date of termination expire
within thirty (30) days after the date of termination (except on the
Option Expiration Date, on which date the Option shall terminate and
shall no longer be exercisable).
TERMS OF AGREEMENT
This Non-Statutory Stock Option Agreement (the "Agreement") is made and
entered into, as of the Date of Grant indicated above, between Advanced
Information Management Solutions, Inc., a California corporation (the
"Company"), and the Consultant indicated above, pursuant to the Company's Stock
Option Plan (the "Plan"), which reserves for issuance to persons serving the
Company and its Subsidiaries as employees and consultants certain shares of the
Company's no par value Common Stock (hereinafter called the "Common Stock"). As
used in this Agreement, the term "Subsidiary" shall mean any present or future
corporation which would be a "subsidiary corporation" of the Company, as that
term is defined in Sections 425(f) and (g) of the Internal Revenue Code of 1986
(the "Code").
The Company desires to carry out the purposes of the Plan by affording
the Consultant, who is a consultant to the Company, an opportunity to purchase
shares of Common Stock by means of the grant of a non-statutory stock option,
under the terms and conditions of this Agreement. Accordingly, the Company and
the Consultant agree as follows:
1. GRANT OF OPTION. The Company hereby grants to the Consultant,
subject to the terms and conditions of this Agreement, the right and option
(hereinafter called the "Option") to purchase all or any part of the Total
Number of Option Shares indicated in the General Option Information above (such
number being subject to adjustment as provided in Section 7 of this Agreement
and referred to in this Agreement as the "Option Shares").
2. PURCHASE PRICE. The purchase price of the Option Shares shall be the
Option Exercise Price indicated in the General Option Information above, which
price has been determined by the Stock Option Committee (the "Committee")
appointed by the Board of Directors to be not less than the fair market value of
said shares as of the Date of Grant.
3. TERMS OF OPTION. The Option shall expire on the Option Expiration
Date, and shall not be exercisable on or after that date,
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<PAGE>
(subject to earlier expiration of the Option in stages pursuant to the
Exercise Window in the General Option Information above). Subject to the
provisions of Section 8, the Option shall become exercisable as indicated in
the Exercise Schedule in the General Option Information section above.
Fractional shares shall be rounded to the nearest whole share. Any Option
Shares with respect to which the Option becomes exercisable must be purchased
by the Consultant prior to the expiration of such Option Shares under the
Exercise Window provisions in the General Option Information above. If the
Option is not exercised during the Exercise Window with respect to Option
Shares which become exercisable, the Option shall expire as to such Option
Shares, and they shall not thereafter be exercisable. Notwithstanding the
above, the limitation imposed by the Exercise Window shall not reduce the
time periods specified in Sections 5 or 6 below for exercise of the Option in
the event of the Consultant's termination, death, or disability. If the
Option is exercised as to fewer than all of the Option Shares which are
available for exercise at the time, the Option cannot be exercised for less
than twenty percent (20%) of the Option Shares which are available for
exercise. The purchase price of the shares as to which the Option shall be
exercised shall be paid in full at time of exercise as provided in Section 8.
The Consultant shall not have any of the rights of a shareholder with respect
to the Option Shares as to which there has been no exercise of the Option.
4. NONTRANSFERABILITY. The Option shall not be transferable otherwise
than by will or the laws of descent and distribution, and the Option may be
exercised, during the lifetime of the Consultant, only by the Consultant. More
particularly (but without limiting the generality of the foregoing), the Option
may not be assigned, transferred (except as provided above), pledged or
hypothecated in any way, shall not be assignable by operation of law and shall
not be subject to execution, attachment or similar process. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of the Option
contrary to the provisions hereof, and the levy of any execution, attachment or
similar process upon the Option, shall be null and void and without effect.
5. TERMINATION OF CONSULTING. The effect of termination of the
Consultant's service to the Company (except for reasons specified in Section 6
below) shall be as specified in the General Option Information above. Nothing in
this Agreement shall confer upon the Consultant any right to continue to be
retained by the Company or any of its Subsidiaries or interfere in any way with
the right of the Company or any such Subsidiary to terminate the Consultant's
service at any time.
6. DEATH OR DISABILITY OF CONSULTANT. If, prior to the Option
Expiration Date, the Consultant shall die or become disabled, the Option shall
remain exercisable following such event as to the number of Option Shares which
had become exercisable as of the date of such event under the Exercise Schedule
in the General Option Information above, but no
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<PAGE>
additional Option Shares shall become exercisable under the Option after the
date of such event. If such an event occurs, the Option may be exercised by
the Consultant (or by the Consultant's personal representatives, heirs or
legatees). Upon any such event, however, Option Shares which remain
exercisable as provided above shall cease to be exercisable in stages as
provided in the Exercise Window in the General Option Information above,
except that in no event shall any Option Shares which were exercisable as of
the date of such event expire within six (6) months after the date of such
event (except on the Option Expiration Date, on which date the Option shall
terminate and shall no longer be exercisable). For purposes of this
Agreement, "disability" shall be defined as those conditions described in
Code Section 22(e)(3), and such other conditions as the Committee may
reasonably determine constitute a disability.
7. ADJUSTMENTS UPON CHANGES IN CAPITAL STRUCTURE.
(a) STOCK SPLITS AND LIKE EVENTS. If a stock dividend, stock
split or reverse stock split, or reclassification were to occur, then the
aggregate number and/or class of shares subject to this Option and the exercise
price prior to such occurrence shall be appropriately adjusted by the Committee
in accordance with the terms of the Plan, and such adjustment shall be
conclusive. Such adjustment shall have the result that if the Consultant were to
exercise a portion of the Option subsequent to such occurrence, then Consultant
shall pay the same aggregate exercise price to exercise such portion of the
Option and shall then hold the same class and aggregate number of shares as if
the Consultant had exercised such portion of the Option immediately prior to
such occurrence.
(b) RECAPITALIZATION. In the event of (A) a dissolution,
liquidation, or sale of all or substantially all of the assets of the Company,
or (B) a merger or consolidation in which the Company is not the surviving
entity, or (C) a merger in which the Company is the surviving entity but the
shares of the Company's common stock outstanding immediately preceding the
merger are converted by virtue of the merger into other securities, cash, or
other property, then, at the sole discretion of the Board and to the extent
permitted by applicable law, the Option:
(1) shall terminate upon such event and may be exercised prior thereto
only to the extent the Option was then exercisable, provided the
Consultant has been given at lease fifteen (15) days advance notice of
the closing of such transaction; or
(2) shall terminate upon such event, or such date prior to the
consummation of the event as the Board may determine, but shall become
fully exercisable as to all shares upon the consummation of such event
or on such date determined by the Board; or
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<PAGE>
(3) shall continue in full force and effect and, if applicable, the
surviving entity shall assume the Option and/or shall substitute a
similar option for the Option; or
(4) shall be treated as provided in the applicable agreement or plan of
merger, consolidation, dissolution, liquidation, sale of assets or
other similar agreement.
8. METHOD OF EXERCISING OPTION; INVESTMENT REPRESENTATION. Subject to
the terms and conditions of this Agreement, the Option may be exercised by
written notice to the Company at its main office. Such notice shall be in a form
reasonably satisfactory to the Company and shall state the election to exercise
the Option and the number of shares in respect of which it is being exercised
and shall be signed by the person or persons so exercising the Option. Such
notice shall be accompanied by payment of the full purchase price of such shares
in cash or by check. The Company shall deliver a certificate or certificates
representing such shares as soon as practicable after the notice shall be
received. The certificate or certificates for the shares as to which the Option
shall have been so exercised shall be registered in the name of the Consultant
and shall be delivered as provided above to or upon the written order of the
person or persons exercising the Option. In the event the Option shall be
exercised pursuant to Section 6 hereof after the death of the Consultant, such
notice shall be accompanied by appropriate proof of the right of such person or
persons to exercise the Option. All shares purchased upon the exercise of the
Option as provided herein shall be fully paid and nonassessable.
The shares purchasable upon the exercise of options granted
under the Plan have not been registered under the Federal Securities Act of 1933
(the "Act"), or qualified under the California Corporate Securities Law of 1968
(the "Law"). Therefore, unless the Option Shares are so registered and qualified
prior to Consultant acquiring them by exercising the Option, the Option Shares
shall be subject to the following restrictions and all certificates representing
the Option Shares shall bear conspicuous legends containing said restrictions:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE FEDERAL SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") IN RELIANCE IN PART ON THE EXEMPTION
PROVIDED BY RULE 701, OR QUALIFIED UNDER THE CALIFORNIA
CORPORATE SECURITIES LAW OF 1968 (THE "LAW"). THE SHARES HAVE
BEEN ACQUIRED FOR INVESTMENT AND CONSTITUTE RESTRICTED
SECURITIES FOR PURPOSES OF RULE 144. NEITHER SAID SHARES NOR
ANY INTEREST THEREIN MAY BE TRANSFERRED, SOLD OR OFFERED FOR
SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SHARES UNDER THE ACT
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<PAGE>
AND QUALIFICATION UNDER THE LAW, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION AND
QUALIFICATION ARE NOT REQUIRED AS TO SAID TRANSFER, SALE OR
OFFER.
Until registration of the Option Shares under the Act and
qualification under the Law, the notice of exercise shall require the Consultant
to represent that the Consultant is acquiring the Option Shares for the
Consultant's own account, for investment, and not for purposes of resale or
distribution and each subsequent purchaser shall be required to so represent
until such registration. The Company may prohibit any sale or transfer of any
interest in the Option Shares by a person so representing for one year (or such
longer time as the Company reasonably deems appropriate) if such person cannot
demonstrate to the satisfaction of the Company that such sale or transfer was
occasioned by circumstances which had changed from the date such person made
such representation and that such representation was therefore truthful when
made.
9. DELIVERY OF PLAN. The Consultant acknowledges that the Consultant
has received from the Company a copy of the Plan pursuant to which this
Agreement is made and entered into.
10. RIGHT OF FIRST REFUSAL.
(a) INITIATION OF RIGHT OF FIRST REFUSAL. Until a public
offering of the Company's Common Stock has occurred with proceeds to the Company
of at least Ten Million Dollars ($10,000,000) and a per share price valuing the
Company's total outstanding Common Stock at at least Forty-Five Million Dollars
($45,000,000), the Consultant (which for purposes of this Section 10 shall
include the Consultant's heirs, executors, administrators and transferees, and
shall be referred to as the "Shareholder") shall not sell pledge, assign, or
otherwise transfer any of the Shareholder's interest in any of the Option Shares
acquired upon exercise of the Option without first offering to the Company or
its designees the right and option to purchase said shares as provided
hereinafter in this Section 10 (the "Right of First Refusal"). Notwithstanding
the above, the Consultant may sell or transfer any interest in any of said
Option Shares to the Consultant's spouse or children, or to a trustee or
custodian for the benefit of the Consultant or Consultant's spouse or children
(collectively, "Permitted Transferees") without first offering said Option
Shares to the Company or its designees, provided such buyer or transferee agrees
in writing to be bound by the restrictions set forth in this Section 10 and
Section 8 of this Agreement.
In the event of a pledge or other hypothecation of the Option
Shares, or the granting of any option or other right to purchase the Option
Shares, then the Right of First Refusal shall come into existence
-6-
<PAGE>
at the time of any sale or transfer of ownership of the Option Shares
pursuant to the foreclosure under such pledge or hypothecation or exercise of
such option or right, as the case may be; provided, however, that Consultant
may not pledge or hypothecate the Option Shares or grant an option or right
to purchase the Option Shares unless the pledge holder or option or right
holder, as the case may be, agrees in writing at the time of the pledge or
grant of the option or right to be bound by the Right of First Refusal as
contained in this Section 10 and to cause any proposed assignee or transferee
of such pledge or right or option to execute and deliver to the Company a
similar writing prior to such assignment or transfer.
(b) MECHANICS. Any Shareholder desiring to sell any or all of
the Option Shares during such time period shall give written notice to the
Company of the Shareholder's bona fide intention to sell the Option Shares
pursuant to a bona fide written offer of a third party other than the Company
(the "Proposed Purchaser"). The notice shall include a photocopy of such written
offer which shall specify the identity of the Proposed Purchaser, the number of
such Option Shares proposed to be sold (hereinafter the "Offered Shares"), and
the price and payment terms of the proposed offer to buy the Offered Shares. The
payment terms of the Proposed Purchaser to the Shareholder (and of the
Shareholder to the Company) must be cash, cash equivalent (a certificate of
deposit, shares of stock in a publicly traded company, and the like), or a
promissory note of the Proposed Purchaser payable on date(s) specified by
passage of time. The Company or its designees shall have the right and option to
purchase the Offered Shares, at the price and on the payment terms specified in
the Shareholder's notice, for a period of sixty (60) days from receipt of said
notice from the Shareholder. That is, such notice by the Shareholder constitutes
an irrevocable offer by the Shareholder to sell the Offered Shares to the
Company or its designees at the price and payment terms specified in such notice
for sixty (60) days from the Company's receipt of such notice.
The Company shall exercise its option by giving written notice
(the "Original Notice") to the Shareholder stating that it is exercising its
option. The Company may not exercise the option as to fewer than all of the
Offered Shares. The Shareholder shall deliver certificates representing the
Offered Shares purchased by the Company or its designees against payment for the
account of the Shareholder of the purchase price in compliance with the terms of
the bona fide offer within thirty (30) days of the option exercise notice.
In the event both the Company and its designees fail to
exercise their option as provided in this section, the Offered Shares may be
sold by the Shareholder to the Proposed Purchaser within a period of sixty (60)
days following the end of the Company's sixty (60)-day option period specified
above, provided that (1) such sale is made at a price and on terms no more
favorable to the Proposed Purchaser than those made
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<PAGE>
available to the Company and its designees under this section, (2) the
Proposed Purchaser delivers a written undertaking to the Company to be bound
by the restrictions on the Option Shares set forth in this Section 10 and
Section 8 of this Agreement, and (3) the Company receives an opinion of
counsel reasonably satisfactory to it that the sale to the Proposed Purchaser
complies with applicable federal and state corporate securities laws.
Upon receipt of a writing from Shareholder and Proposed
Purchaser that the foregoing conditions have been satisfied and the purchase
price paid to the Shareholder by the Proposed Purchasers, the Company shall
transfer the ownership of record to the Proposed Purchaser (and reissue the
certificate).
If within this sixty (60)-day period the Shareholder does not
enter into an agreement for such a sale of Offered Shares to the Proposed
Purchaser which is consummated within thirty (30) days of the execution thereof,
the Right of First Refusal shall be revived as to the Offered Shares which shall
not be sold or transferred unless the Shareholder first offers the Company the
right and option to repurchase all such Option Shares in accordance with this
Section.
Any transfer or purported transfer of the Option Shares or any
interest therein shall be null and void unless the terms and conditions of this
Section 10 are strictly observed and followed, or such terms and conditions are
waived by the Company's Board of Directors.
In addition to the other legends described in this Agreement,
all certificates representing the Option Shares shall bear the following legend:
THESE SHARES ARE ALSO SUBJECT TO CERTAIN TRANSFER
RESTRICTIONS, INCLUDING A RIGHT OF FIRST REFUSAL, AS SET FORTH
IN A NON-STATUTORY STOCK OPTION AGREEMENT ON FILE WITH THE
SECRETARY.
11. NOTICES. Any notice required to be given pursuant to this Agreement
shall be deemed effectively given (i) to the Company upon personal delivery to
the Company's President, or three (3) days after it is deposited in the U.S.
mail, by registered or certified mail, postage prepaid and addressed to the
Company at it principal executive office, Attention: President, and (ii) to the
Consultant upon personal delivery or three (3) days after it is deposited in the
U.S. mail, by registered or certified mail, postage prepaid and addressed to the
Consultant at his address appearing in the General Option Information section of
this Agreement. Either party may designate another address for purposes of
receiving notices under this Agreement by giving written notice to the other
party of such new address in accordance with this section.
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<PAGE>
12. INCOME TAX CONSEQUENCES AND ADVICE. It is intended that the
exercise of this Option will be taxed as a non-statutory stock option. Upon
exercise of a non-statutory option, an optionee realizes income for tax purposes
equal to the difference between the then fair market value of the shares
purchased and the exercise price, and the Corporation is entitled to a
compensation expense deduction in the same amount. The Consultant represents
that he has not relied upon any tax advice from the Corporation or its counsel,
however, in making the decision to enter into this Agreement.
13. CONFIDENTIALITY AND FINANCIAL INFORMATION.
(a) CONFIDENTIALITY. The Company has a general policy of
maintaining the confidentiality of certain corporate records. The Consultant
shall be subject to such policy and all certificates representing the Option
Shares shall bear the following legend:
THE HOLDER OF RECORD OF THESE SHARES, AND SUCH HOLDER'S AGENTS
AND ATTORNEYS, MAY BE REQUIRED TO EXECUTE NONDISCLOSURE
STATEMENTS PRIOR TO BEING PERMITTED TO INSPECT CERTAIN RECORDS
OF THE COMPANY.
(b) FINANCIAL INFORMATION. Whenever the Company provides
financial statements, whether audited or unaudited, to all of its shareholders
as a group, the Company shall concurrently provide the Consultant with a copy of
such financial statements. Notwithstanding the foregoing, the Company shall
provide the Consultant at the end of its fiscal year with a copy of its
financial statements, either audited or unaudited, for such fiscal year, within
ninety (90) days after the end of such fiscal year, if this Option is then still
in effect.
The Consultant acknowledges that such financial statements are
confidential information of the Company and are being provided solely in order
to assist Consultant in the decision of whether and when to exercise the Option.
The Consultant agrees (1) to maintain the confidentiality of all such financial
statements and not to disclose the contents of such financial statements to any
third party without the prior written consent of an officer of the Company and
(2) not to use such financial statements for any other purpose.
AUTHORIZED SIGNATURES
In order to bind the parties to the terms and conditions of this
Non-Statutory Stock Option Agreement, the parties or their duly authorized
representatives have signed their names below.
ADVANCED INFORMATION
MANAGEMENT SOLUTIONS, INC. CONSULTANT
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<PAGE>
By:_________________________ ____________________________
Todd Hogue, President Signature
Date: ______________________ Date: ____________________________
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<PAGE>
EXHIBIT 4.03
ONYX TECHNOLOGIES, INC.
1999 STOCK PLAN
<PAGE>
EXHIBIT 4.03
ONYX TECHNOLOGIES, INC.
1999 STOCK PLAN
SECTION 1
BACKGROUND AND PURPOSE
The purpose of this Plan is to promote the interest of Onyx
Technologies, Inc. ("Onyx") through the granting of Options, Restricted Stock
and Stock Appreciation Rights in order (a) to attract and retain Employees, (b)
to provide an additional incentive to each Employee to work to increase the
value of Stock and (3) to provide each Employee with a stake in the future of
Onyx that corresponds to the stake of each of Onyx Technology's stockholders.
SECTION 2
DEFINITIONS
Each term set forth in this Section 2 shall have the meaning
set forth opposite such term and any reference to the plural of a defined term
shall include the singular.
1.01 BOARD -- means the Board of Directors of Onyx.
1.02 CHANGE IN CONTROL -- means
(a) the approval by the shareholders of Onyx of (1) a
reorganization, merger, share exchange or consolidation, in each case, where
persons who were shareholders of Onyx immediately prior to such reorganization,
merger, share exchange or consolidation do not, immediately thereafter, own more
than 50% of the combined voting power entitled to vote generally in the election
of directors of the reorganized, merged, surviving or consolidated company's
then outstanding securities; (2) a liquidation or dissolution of Onyx; or (3)
the sale of all or substantially all of Onyx' assets; or
<PAGE>
(b) consummation of a business combination between Onyx and any entity
that has a market capitalization equal to or greater than 80% of the market
capitalization of Onyx.
Notwithstanding the preceding paragraph, any transaction with HNC
Software, Inc. shall not be considered a Change of Control. The Committee shall
have the specific authority to determine whether a Change in Control has
transpired under the guidance of this Section 2.2 and shall be required to give
each holder of Options, Restricted Stock, Restricted Stock Rights, or Stock
Appreciation Rights notice of a Change in Control.
1.03 CODE -- means the Internal Revenue Code of 1986, as amended.
1.04 COMMITTEE -- means a committee of the Board comprised of at least
2 members appointed by the Board; provided if at any time the Board shall have
not appointed a Committee as described in this Section 2.4, any reference in
this Plan to the Committee shall mean a reference to the Board. If Onyx is
subject to Rule 16b-3, each Committee member shall be a "non-employee director"
within the meaning of Rule 16b-3 and, if Onyx is a publicly held corporation
within the meaning of Code Section 162(m), each Committee member must be an
"outside director" within the meaning of Code Section 162(m).
1.05 EFFECTIVE DATE -- means the effective date described in Section 4.
1.06 EMPLOYEE -- means an employee of Onyx or any entity that would be
treated as a single employer with Onyx under Code Section 414(c) if "50 percent"
were substituted for "80 percent" in the regulations under such section;
provided, however, that solely for purposes of granting ISOs, the term
"Employee" means an employee of Onyx or any Subsidiary or Parent.
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1.07 FAIR MARKET VALUE -- means as of any date (a) if the Stock is not
quoted on a national quotation system, the price that the Committee acting in
good faith determines through any reasonable valuation method that a share of
Stock might change hands between a willing buyer and a willing seller, neither
being under any compulsion to buy or to sell and both having reasonable
knowledge of the relevant facts, or (b) if the Stock is quoted on a national
quotation system, (1) the closing price of the Stock on such date on the
national quotation system selected by the Committee, (2) if there was no
quotation of the Stock on such date on such quotation system, the closing price
on the next preceding business day or (3), if there was no quotation on the next
preceding business day, the value determined by the Committee in accordance with
2.7(a).
1.08 ISO -- means an Option that is intended to satisfy the
requirements of Code Section 422.
1.09 ONYX -- means Onyx Technologies, Inc. and any successor to Onyx
Technologies, Inc.
1.10 1933 ACT -- means the Securities Act of 1933, as amended.
1.11 1934 ACT -- means the Securities Exchange Act of 1934, as amended.
1.12 NON-ISO -- means an Option that either expressly or operationally
does not satisfy the requirements of Code Section 422.
1.13 OPTION -- means an option to purchase Stock granted in accordance
with Section 7.
1.14 OPTION AGREEMENT -- means the document that sets forth the terms
and conditions of an Option.
1.15 OPTION PRICE -- means the price to purchase one share of Stock
upon the exercise of an Option.
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1.16 PARENT -- means any corporation that is a parent corporation of
Onyx within the meaning of Code Section 424(e).
1.17 PLAN -- means this Onyx Technologies, Inc. 1999 Stock Plan, as
amended from time to time.
1.18 RESTRICTED STOCK -- means Stock granted in accordance with Section
9.A.
1.19 RESTRICTED STOCK CERTIFICATE -- means the document that sets forth
the terms and conditions of a grant of Restricted Stock or a Restricted Stock
Right.
1.20 RESTRICTED STOCK RIGHT -- means a right granted to an Employee in
accordance with Section 9 to demand the issuance of Restricted Stock upon the
satisfaction of the conditions described in the associated Restricted Stock
Certificate.
1.21 RULE 16b-3 -- means the exemption under Rule 16b-3 to Section
16(b) of the 1934 Act or any successor to such rule.
1.22 STOCK -- means no par value common stock of Onyx.
1.23 SAR VALUE -- means the value assigned by the Committee to a share
of Stock in connection with the grant of a Stock Appreciation Right under
Section 8.
1.24 STOCK APPRECIATION RIGHT -- means a right to receive the
appreciation in a share of Stock that is granted under Section 8 either as part
of an Option or independent of any Option.
1.25 STOCK APPRECIATION RIGHT CERTIFICATE -- means the document that
sets forth the terms and conditions of a Stock Appreciation Right that is
granted to an Employee independent of an Option.
1.26 SUBSIDIARY -- means a corporation that is a subsidiary corporation
of Onyx within the meaning of Code Section 424(f).
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1.27 TEN PERCENT SHAREHOLDER -- means a person who owns (after taking
into account the attribution rules of Code Section 424(d)) more than ten percent
of the total combined voting power of all classes of stock of either Onyx, a
Subsidiary or Parent. No shares of Restricted Stock or Stock Appreciation Rights
will be granted under this Plan unless and until the Purchase Agreement is
terminated as provided therein.
SECTION 3
SHARES RESERVED UNDER PLAN
There shall be 700,000 shares of Stock authorized for issuance
under this Plan. To the extent Onyx deems appropriate, such shares of Stock may
be reserved from authorized but unissued shares of Stock and from shares of
Stock that have been reacquired by Onyx. Any shares of Restricted Stock issued
under this Plan shall not be available for future issuance unless forfeited, in
which event such shares shall be available for use in future grants under this
Plan. Any shares of Stock subject to an Option that remain unissued after the
cancellation, expiration or exchange of the Option and any shares of Restricted
Stock subject to a Restricted Stock Right that is forfeited or canceled shall be
available for use in future grants under this Plan. However, any shares of Stock
used to satisfy a withholding obligation shall not be available for use in
future grants under this Plan.
SECTION 4
EFFECTIVE DATE
The Effective Date of this Plan shall be the date of its
adoption by the Board; provided that no ISO shall be effective unless the
shareholders of Onyx (acting at a duly called meeting of such shareholders)
approve the adoption of the Plan within 12 months of the Effective
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Date. Any ISO granted before the shareholder approval automatically shall be
granted subject to such approval.
SECTION 5
COMMITTEE
This Plan shall be administered by the Committee. The
Committee acting in its absolute discretion shall interpret this Plan and take
such action in the administration and operation of this Plan as the Committee
deems appropriate under the circumstances. Any action of the Committee shall be
binding on Onyx, on each affected Employee and on each other person directly or
indirectly affected by such action.
SECTION 6
ELIGIBILITY AND ANNUAL GRANT CAPS
Only Employees shall be eligible for the grant of Options,
Restricted Stock, Restricted Stock Rights or Stock Appreciation Rights. No
Employee in any calendar year shall be granted an Option to purchase more than
50,000 shares of Stock or a Stock Appreciation Right with respect to more than
50,000 shares of Stock.
SECTION 7
OPTIONS
7.1 COMMITTEE ACTION. The Committee acting in its absolute discretion
may grant Options to Employees from time to time. Each grant of an Option shall
be evidenced by an Option Agreement. The Option Agreement shall describe whether
the Option is an ISO or a Non-
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ISO and shall incorporate such other terms and conditions of the grant as the
Committee acting in its absolute discretion deems appropriate. If the
Committee grants an ISO and a Non-ISO to an Employee on the same date, the
right of the Employee to exercise the ISO shall not be conditioned on his or
her failure to exercise the Non-ISO. However, the Committee shall have the
right to grant a Non-ISO and Restricted Stock to an Employee at the same time
and to condition the exercise of the Non-ISO on the forfeiture of the
Restricted Stock grant.
7.2 $100,000 LIMIT FOR ISOS. To the extent that the aggregate
Fair Market Value of Stock subject to ISOs that first becomes exercisable in any
calendar year (determined as of the date the ISO is granted) exceeds $100,000,
such Options shall be treated as Non-ISOs. The Fair Market Value of Stock
subject to any other option (determined as of the date the option is granted)
that (a) satisfies the requirements of Code Section 422 and (b) is granted to an
Employee under another plan maintained by Onyx, a Subsidiary or Parent shall be
treated (for purposes of this $100,000 limitation) as if granted under this
Plan. The Committee shall interpret and administer the limitation in this
Section 7.2 in accordance with Code Section 422(d) or any successor section.
This Section 7.2 shall be in effect only for so long as the $100,000 limitation
is in effect under Code Section 422 or any successor section.
7.3 OPTION PRICE. The Option Price shall be no less than the Fair
Market Value of a share of Stock on the date the Option is granted; provided,
however, if the Option is an ISO granted to an Employee who is a Ten Percent
Shareholder, the Option shall be no less than 110% of the Fair Market Value of a
share of Stock on the date such ISO is granted. The Option Price shall be
payable in full upon the exercise of any Option. At the discretion of the
Committee, an Option Agreement can provide for the payment of the Option Price
either in cash, by check or in Stock that has been held for at least 6 months,
or in any combination of cash, check and such
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Stock. The Option Price may be paid through any broker facilitated cashless
exercise procedure acceptable to the Committee or its delegate. The value of
any Stock surrendered as payment in the exercise of an Option shall be equal
to the Fair Market Value of such Stock on the date the properly endorsed
certificate for such Stock is delivered to the Committee or its delegate.
7.4 EXERCISE PERIOD. Each Option shall be exercisable in whole or in
part at such time or times as set forth in the related Option Agreement, but no
Option shall be exercisable after the earlier of the fifth anniversary of the
date the Option is granted, if the Option is an ISO and the Employee is a Ten
Percent Shareholder on the date the Option is granted, or the tenth anniversary
of the date the Option is granted, if the Option is (1) a Non-ISO or (2) an ISO
that is granted to an Employee who is not a Ten Percent Shareholder on the date
the Option is granted.
An Option Agreement may provide for the exercise of an Option after the
employment of an Employee has terminated for any reason whatsoever, including
death or disability; provided, however, that an Option Agreement for an ISO must
incorporate the post-employment exercise restrictions of Code Section 422.
SECTION 8
STOCK APPRECIATION RIGHTS
8.1 COMMITTEE ACTION. The Committee acting in its absolute discretion
shall have the right to grant a Stock Appreciation Right to an Employee from
time to time, and each Stock Appreciation Right grant shall be evidenced by a
Stock Appreciation Right Certificate or, if such Stock Appreciation Right is
granted as part of an Option, shall be evidenced by the Option Agreement for the
related Option.
8.2 TERMS AND CONDITIONS.
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(a) STOCK APPRECIATION RIGHT CERTIFICATE. If a Stock
Appreciation Right is evidenced by a Stock Appreciation Right Certificate, such
certificate shall set forth the number of shares of Stock to which the Employee
has the right to appreciation and the SAR Value of each share of Stock. Such SAR
Value shall be no less than the Fair Market Value of a share of Stock on the
date that the Stock Appreciation Right is granted. The Stock Appreciation Right
Certificate shall set forth such other terms and conditions for the exercise of
the Stock Appreciation Right as the Committee deems appropriate under the
circumstances, but no Stock Appreciation Right Certificate shall make a Stock
Appreciation Right exercisable on or after the date that is the tenth
anniversary of the date such Stock Appreciation Right is granted.
(b) OPTION AGREEMENT. If a Stock Appreciation Right is
evidenced by an Option Agreement, the SAR Value for each share of Stock subject
to the Stock Appreciation Right shall be the Option Price for the related
Option. Each such Option Agreement shall provide that the exercise of the Stock
Appreciation Right with respect to any share of Stock shall cancel the
Employee's right to exercise his or her Option with respect to such share and,
conversely, that the exercise of the Option with respect to any share of Stock
shall cancel the Employee's right to exercise his or her Stock Appreciation
Right with respect to such share. A Stock Appreciation Right that is granted as
part of an Option shall be exercisable only while the related Option is
exercisable. The Option Agreement shall set forth such other terms and
conditions for the exercise of the Stock Appreciation Right as the Committee
deems appropriate under the circumstances.
8.3 EXERCISE. A Stock Appreciation Right shall be exercisable only when
the Fair Market Value of a share of Stock subject to such Stock Appreciation
Right exceeds the SAR Value for such share, and the payment due on exercise
shall be based on such excess with respect
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to the number of shares of Stock to which the exercise relates. An Employee
upon the exercise of his or her Stock Appreciation Right shall receive a
payment from Onyx in cash or in Stock, or in a combination of cash and Stock,
and any payment in Stock shall be based on the Fair Market Value of a share
of Stock on the date the Stock Appreciation Right is exercised. The Committee
acting in its absolute discretion shall have the right to determine the form
and time of any payment under this Section 8.3.
SECTION 9
RESTRICTED STOCK
9.1 COMMITTEE ACTION. The Committee acting in its absolute discretion
may grant Restricted Stock or Restricted Stock Rights to Employees from time to
time and may grant a Restricted Stock Right in exchange for the cancellation of
an outstanding Restricted Stock Right. Each grant of Restricted Stock or
Restricted Stock Rights shall be evidenced by a Restricted Stock Certificate,
which shall describe the conditions, if any, under which the grant will be
effective.
9.2 CONDITIONS.
(a) RESTRICTED STOCK RIGHT. The Committee acting in its
absolute discretion may grant Restricted Stock Rights that provide for the
issuance of Restricted Stock to an Employee subject to the satisfaction of any
conditions that the Committee deems appropriate under the circumstances for
Employees generally or for an Employee in particular. The Restricted Stock
Certificate shall describe each such condition and the deadline for satisfying
each such condition. Restricted Stock shall be issued in the name of an Employee
only after each such condition has been timely satisfied, and any Restricted
Stock that is so issued shall be held
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by Onyx pending the satisfaction of any forfeiture conditions applicable to
the related Restricted Stock.
(b) FORFEITURE CONDITIONS. The Committee acting in its
absolute discretion may make (1) each grant of Restricted Stock and (2)
Restricted Stock issued pursuant to satisfaction of the conditions of a
Restricted Stock Right, subject to one, or more than one, objective employment,
performance or other forfeiture condition that the Committee acting in its
absolute discretion deems appropriate under the circumstances for Employees
generally or for an Employee in particular, including a condition that results
in a forfeiture if an Employee exercises a Non-ISO granted in tandem with his or
her Restricted Stock grant. The related Restricted Stock Certificate shall set
forth each forfeiture condition and the deadline for satisfying each such
condition. A Restricted Stock Certificate evidencing the grant of a Restricted
Stock Right may contain both the conditions precedent to the issuance of
Restricted Stock and the forfeiture conditions applicable to the Restricted
Stock or the Committee may issue another Restricted Stock Certificate describing
the forfeiture conditions applicable to the Restricted Stock issued pursuant to
a Restricted Stock Right. An Employee's nonforfeitable interest in Restricted
Stock shall depend on the extent to which he or she timely satisfies each
condition.
9.3 DIVIDENDS AND VOTING RIGHTS. If a cash dividend is declared on
Restricted Stock, Onyx shall pay such cash dividend directly to the Employee
granted such Restricted Stock. If a Stock dividend is declared on Restricted
Stock, such Stock dividend shall be treated as Restricted Stock, and an
Employee's interest in such Stock dividend shall be forfeited or shall become
nonforfeitable at the same time as the Restricted Stock is forfeited or becomes
nonforfeitable. The disposition of each other form of dividend declared on
Restricted Stock shall be made in accordance with such rules as the Committee
shall adopt with respect to each such dividend. An
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Employee shall have the right to vote Restricted Stock. The dividend and
voting rights described in this Section 9.3 shall apply to a grant of
Restricted Stock from the date of issuance as determined by the Committee.
However, the dividend and voting rights shall not apply to Restricted Stock
subject to a Restricted Stock Right prior to the issuance of such Restricted
Stock.
9.4 SATISFACTION OF FORFEITURE CONDITIONS. A share of Stock shall cease
to be Restricted Stock at such time as provided in the Restricted Stock
Certificate and a certificate representing a share of unrestricted Stock shall
be transferred to the Employee as soon as practicable thereafter.
9.5 TAX BONUS PAYMENT. The Committee acting in its absolute discretion
shall have the power to authorize and direct the payment of a cash bonus to an
Employee to pay all, or any portion of, his or her federal, state and local
income and excise tax liability that the Committee deems attributable (a) to his
or her interest in Restricted Stock becoming nonforfeitable and (b) to such cash
bonus.
9.6 SECTION 162(m). If Onyx is a publicly held corporation within the
meaning of Code Section 162(m) and the Committee deems it in the best interests
of Onyx, the Committee shall use its best efforts to grant Restricted Stock in a
manner such that (a) the compensation resulting from the grant is
"performance-based compensation" within the meaning of Code Section 162(m) or
(b) Onyx otherwise gets an income tax deduction for the compensation
attributable to such grant.
SECTION 10
NONTRANSFERABILITY
No Option, Restricted Stock, Restricted Stock Right or Stock
Appreciation Right shall be transferable by an Employee other than by will or by
the laws of descent and
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distribution. During an Employee's lifetime, an Option shall be exercisable
only by the Employee; however, the person or persons to whom an Option,
Restricted Stock, Restricted Stock Right, or Stock Appreciation Right is
transferred by will or by the laws of descent and distribution thereafter
shall be treated as the Employee under this Plan.
SECTION 11
SECURITIES REGISTRATION
Each Option Agreement, Restricted Stock Certificate and Stock
Appreciation Right Certificate shall provide that, upon the receipt of Stock,
the Employee shall, if so requested by Onyx, (a) hold such Stock for investment
and not with a view of resale or distribution to the public and (b) deliver to
Onyx a written statement satisfactory to Onyx to that effect. For Stock issued
pursuant to this Plan, Onyx at its expense shall take such action as it deems
necessary or appropriate to register the original issuance of such Stock to an
Employee under the 1933 Act or under any other applicable securities laws or to
qualify such Stock for an exemption under any such laws prior to the issuance of
such Stock to an Employee; however, Onyx shall have no obligation whatsoever to
take any such action in connection with the transfer, resale or other
disposition of such Stock by an Employee.
SECTION 12
LIFE OF PLAN
No Option, Restricted Stock, Restricted Stock Right, or Stock
Appreciation Right shall be granted under this Plan on or after the earlier of
the tenth anniversary of the Effective Date, in which event this Plan shall
continue in effect until all outstanding Options and Stock Appreciation Rights
have been exercised in full or are no longer exercisable, all Restricted Stock
has been forfeited or the forfeiture conditions on such Restricted Stock have
been satisfied in
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full, and all Restricted Stock Rights have been forfeited, canceled or the
conditions thereof satisfied, or the date on which all of the Stock
authorized for issuance under Section 3 has been issued or no longer is
available for use under this Plan, in which event this Plan also shall
terminate on such date.
SECTION 13
ADJUSTMENT
13.1 CAPITAL STRUCTURE. In the event of any change in the
capitalization of Onyx, including, but not limited to, such changes as stock
dividends or stock splits, the following shall be adjusted by the Committee in
an equitable manner to reflect such change: (a) the number, kind or class (or
any combination thereof) of shares of Stock authorized for issuance under
Section 3, and the annual grant caps described in Section 6; (b) the number,
kind or class (or any combination thereof) of shares of Stock subject to Options
and the Option Price of such Options; (c) the number, kind or class (or any
combination thereof) of shares of Stock underlying outstanding Restricted Stock
and any related forfeiture conditions; (d) the number, kind or class (or any
combination thereof) of shares of Stock underlying outstanding Restricted Stock
Rights and any related conditions; and (e) the number, kind or class (or any
combination thereof) of shares of Stock subject to Stock Appreciation Rights and
the SAR Value of such Stock Appreciation Rights; provided, however, that the
issuance by Onyx of shares of any class or securities convertible into shares of
any class, for cash or property, or for labor or services, either upon direct
sale or upon exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of Onyx convertible into such shares or
other securities, shall not affect, and no adjustment by reason thereof shall be
made with respect to (a) through (e) above.
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13.2 MERGERS. The Committee as part of any corporate transaction
described in Code Section 424(a) shall have the right to adjust (in any manner
that the Committee in its discretion deems consistent with Code Section 424(a)):
(a) the number, kind or class (or any combination thereof) of shares of Stock
authorized for issuance under Section 3; (b) the number, kind or class (or any
combination thereof) of shares of Stock subject to Options and the Option Price
of such Options, (c) the number, kind or class (or any combination thereof) of
shares of Stock underlying outstanding Restricted Stock and any related
forfeiture conditions; (d) the number, kind or class (or any combination
thereof) of shares of Stock underlying outstanding Restricted Stock Rights and
any related conditions; and (e) the number, kind or class (or any combination
thereof) of shares of Stock subject to Stock Appreciation Rights and the SAR
Value of such Stock Appreciation Rights.
The Committee may make (in any manner that the Committee in its
discretion deems consistent with Code Section 424(a)) Option, Restricted Stock
and Stock Appreciation Right grants to effect the assumption of, or the
substitution for, option, restricted stock and stock appreciation right grants
previously made by any other corporation to the extent that a corporate
transaction described in Code Section 424(a) calls for such substitution or
assumption of such options, restricted stock or stock appreciation rights.
13.3 FRACTIONAL SHARES. If any adjustment under this Section 13 would
create a fractional share of Stock or a right to acquire a fractional share of
Stock, such fractional share shall be disregarded and the number of shares of
Stock that otherwise would result from such adjustment shall be the next lower
number of shares of Stock, rounding all fractions downward. An adjustment made
under this Section 13 by the Committee shall be conclusive and binding on all
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affected persons and, further, shall not constitute an increase in "the number
of shares of Stock authorized for issuance under Section 3" within the meaning
of Section 15.
SECTION 14
CHANGE IN CONTROL
Upon a Change in Control, all then outstanding Options and
Stock Appreciation Rights that have not previously vested shall vest in full and
the forfeiture conditions on Restricted Stock and conditions on Restricted Stock
Rights shall expire and have no further force or effect. In addition, in
connection with such Change in Control, the Board shall have the right to take
such additional action, if any, with respect to any or all then outstanding
Options and Stock Appreciation Rights as the Board deems appropriate under the
circumstances to protect the interest of Onyx in maintaining the integrity of
the Option and Stock Appreciation Right grants under this Plan, including, upon
prior notice, canceling the then outstanding Options and Stock Appreciation
Rights in full if the Board provides for a right to exercise such Options and
Stock Appreciation Rights in full before the date of such cancellation, and the
Board shall have the right to take different action under this Section 14 with
respect to different Employees or different groups of Employees as the Board
deems appropriate under the circumstances.
SECTION 15
AMENDMENT OR TERMINATION
This Plan may be amended by the Board from time to time to the
extent that the Board deems necessary or appropriate; provided, however, in the
event any such amendment (a) increases the number of shares of Stock authorized
for issuance under Section 3 or (b) changes the class of employees eligible for
ISOs, no further ISOs may be granted, unless shareholder approval of such
amendment is obtained within 12 months of the date the amendment is adopted. The
Board also may suspend the granting of Options, Restricted Stock, Restricted
Stock Rights, or Stock Appreciation Rights at any time and may terminate this
Plan at any time; provided,
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however, neither the Board nor the Committee shall have the right
unilaterally to modify, amend or cancel any Option, Restricted Stock,
Restricted Stock Right, or Stock Appreciation Right granted before such
suspension or termination unless (a) the Employee consents in writing to such
modification, amendment or cancellation, (b) there is a transaction described
in Section 13 or Section 14 or (c) pursuant to Section 16.6.
SECTION 16
MISCELLANEOUS
16.1 SHAREHOLDER RIGHTS. No Employee shall have any rights as a
shareholder of Onyx as a result of the grant of an Option or Stock Appreciation
Right or his or her exercise of such Option or Stock Appreciation Right pending
the actual delivery of the Stock subject to such Option or Stock Appreciation
Right to such Employee. Subject to Section 9.3, an Employee's rights as a
shareholder of Restricted Stock shall be set forth in the related Restricted
Stock Certificate.
16.2 NO CONTRACT OF EMPLOYMENT. The grant of an Option, Restricted
Stock, Restricted Stock Right, or Stock Appreciation Right shall not constitute
a contract of employment and shall not confer on an Employee any rights upon his
or her termination of employment in addition to those rights, if any, expressly
set forth in the related Option Agreement, Restricted Stock Certificate or Stock
Appreciation Right.
16.3 WITHHOLDING. Each grant of an Option, Restricted Stock, Restricted
Stock Right, or Stock Appreciation Right shall be made subject to the condition
that the Employee consents to whatever action the Committee directs to satisfy
the federal and state tax withholding requirements, if any, that the Committee
in its discretion deems applicable to the exercise of such Option or Stock
Appreciation Right or the satisfaction of any forfeiture conditions with respect
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to Restricted Stock issued in the name of the Employee. The Committee also shall
have the right to provide in an Option Agreement, Restricted Stock Certificate
or Stock Appreciation Right that an Employee may elect to satisfy federal and
state tax withholding requirements through a reduction in the cash or the number
of shares of Stock actually transferred to him or to her under this Plan.
16.4 CONSTRUCTION. All references to sections (Section) are to sections
(Section) of this Plan unless otherwise indicated. This Plan shall be construed
under the laws of the State of Delaware.
16.5 OTHER CONDITIONS. Each Option Agreement, Restricted Stock
Certificate or Stock Appreciation Right Certificate may require that an Employee
(as a condition to the exercise of an Option or Stock Appreciation Right or the
grant of Restricted Stock or Restricted Stock Rights) enter into any agreement
or make such representations prepared by Onyx, including any agreement that
restricts the transfer of Stock acquired pursuant to the exercise of an Option
or a Stock Appreciation Right or the grant of Restricted Stock or provides for
the repurchase of such Stock by Onyx under certain circumstances.
16.6 RULE 16b-3. The Committee shall have the right to amend any grant
of an Option, Restricted Stock, Restricted Stock Right, or Stock Appreciation
Right or to withhold or otherwise restrict the transfer of any Stock or cash
under this Plan to an Employee as the Committee deems appropriate in order to
satisfy any condition or requirement under Rule 16b-3 to the extent Rule 16 of
the 1934 Act might be applicable to such grant or transfer.
16.7 LOANS. If approved by the Committee, Onyx may lend money to, or
guarantee loans made by a third party to, any Employee to finance the exercise
of any Option, and the exercise of an Option with the proceeds of any such loan
shall be treated as an exercise for cash. If approved by the Committee, Onyx
also may, in accordance with an Employee's instructions,
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transfer Stock acquired in the exercise of an Option directly to a third
party in connection with any arrangement made by the Employee for financing
the exercise of such Option.
IN WITNESS WHEREOF, Onyx has caused its duly authorized officer to
execute this Plan to evidence its adoption of this Plan.
ONYX TECHNOLOGIES, INC.
By:______________________________
Date:____________________________
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EXHIBIT 4.04
ONYX TECHNOLOGIES, INC.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Agreement") evidences that a stock option
("Option") has been granted by Onyx Technologies, Inc., a Georgia corporation,
("Onyx") under the Onyx Technologies, Inc. 1999 Stock Plan ("Plan") to
____________________ ("Employee"), as of October 25, 1999 ("Grant Date"), for
the purchase of shares of no par value common stock of Onyx ("Stock") subject to
the following terms and conditions:
Section 1. PLAN. The Option is subject to all of the terms and
conditions set forth in the Plan. All capitalized terms not defined in this
Agreement will have the meanings ascribed to such terms in the Plan. A copy of
the Plan will be made available to Employee upon written request to the
Committee or its delegate.
Section 2. STATUS OF STOCK OPTION. Schedule A indicates whether the
Option constitutes an incentive stock option within the meaning of Code Section
422 and qualifies for all special income tax benefits applicable to incentive
stock options under Code Section 422 or constitutes a Non-ISO.
Section 3. GRANT AND EXERCISE . Employee shall be entitled to purchase
the number of shares of Stock at the Option Price, as set forth on Schedule A.
Employee's right to exercise the Option depends upon the extent to which the
Option is vested. Employee shall vest in the Option in accordance with the
schedule set forth on Schedule A, provided that Employee continues to be
employed by Onyx through the anniversaries of the Grant Date set forth in such
schedule.
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In addition, Employee shall be vested in the Option immediately upon the
occurrence of a Change in Control while still employed, as set forth in the
Plan, or upon the termination of Employee's employment by Onyx as a result of
death or permanent and total disability (as determined by the Committee). The
Committee, in its discretion, otherwise may elect to accelerate the vesting of
the Option.
Section 4. LIFE OF OPTION.
(a) GENERAL RULE. The Option shall expire on the earlier of
(1) the tenth anniversary of the Grant Date or (2) the date provided under
Section 4(b).
(b) TERMINATION OF EMPLOYMENT.
(1) OTHER THAN DEATH, PERMANENT AND TOTAL DISABILITY OR CAUSE.
In the event that Employee's employment by Onyx is terminated other
than (A) as a result of death or permanent and total disability (as
determined by the Committee and as consistent with Code Section
22(e)(3) with respect to ISOs) or (B) for Cause, the Option shall
expire immediately and automatically on the last day of the
3-consecutive-month period immediately following Employee's last day of
active employment by Onyx.
(2) DEATH OR PERMANENT AND TOTAL DISABILITY. In the event that
Employee dies while employed by Onyx or in the event that Employee's
employment with Onyx is terminated as a result of a permanent and total
disability (as determined by the Committee and consistent with Code
Section 22(e)(3) with respect to ISOs), the Option may be exercised by
the person or persons to whom Employee's rights under the Option pass
in accordance with Section 6 (in the case of death) or by Employee or
Employee's legal representative (in the case of permanent and total
disability) at any time during the 12-
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consecutive-month period immediately following the date of Employee's
death or termination of employment as a result of permanent and total
disability.
(3) CAUSE. In the event Employee's employment by Onyx is
terminated for Cause, the Option shall expire immediately and
automatically on the date of such termination and shall be of no
further force and effect with respect to any shares of Stock not
purchased before such date. For purposes of this Section 4, the term
"Cause" shall have the same meaning at a specific time in this
Agreement as such term is defined in any employment agreement between
Employee and Onyx in effect at such time. In the event an employment
agreement between Employee and Onyx that defines the term "Cause" is
not in effect, then the term "Cause" shall mean
(A) Employee is convicted of, pleads guilty to, or
confesses to any felony or any act of fraud, misappropriation
or embezzlement that affects Onyx, as determined by the Board
in good faith;
(B) Employee engages in a fraudulent act that damages
or prejudices, or is reasonably likely to damage or prejudice,
Onyx or any affiliate of Onyx or engages in conduct or
activities damaging, or reasonably likely to be damaging, to
the property, business or reputation of Onyx or any affiliate
of Onyx, all as determined by the Board in good faith;
(C) any material act or omission by Employee
involving malfeasance or negligence in the performance of
Employee's assigned duties and responsibilities to the
material detriment of Onyx or an affiliate of Onyx, as
3
<PAGE>
determined by the Board in good faith, which has not been
corrected by Employee within 30 days after written notice from
the Board of any such act or omission; or
(D) a failure by Employee to comply in any material
respect with the terms of any employment agreement between
Onyx and Employee or any written policies or directives of
Onyx that has not been corrected by Employee within 30 days
after written notice from the Board of such failure.
(c) EMPLOYMENT STATUS. Employment by Onyx, a Subsidiary or
Parent shall be treated as employment by Onyx. For example, a transfer of
employment between or among Onyx and its Subsidiaries or Parent shall not be
treated as a termination of Employee's continuous employment with Onyx, a
Subsidiary or Parent, and if Employee is employed by a Subsidiary, the sale
of such Subsidiary shall be treated as a termination of Employee's continuous
employment with Onyx if, as a result of such sale, such Subsidiary is no
longer considered to be a Subsidiary. A leave of absence from Onyx, a
Subsidiary or Parent shall not be treated as a termination of Employee's
continuous employment with Onyx if such leave of absence is approved by the
Committee.
Section 5. METHOD OF EXERCISE. Employee may (subject to the
restrictions and conditions of this Agreement) exercise the vested portion of
the Option in whole or in part (before the date the Option expires) on any
normal business day of Onyx by (a) delivering to Onyx at its principal place of
business a written notice substantially in the form of Schedule B (addressed to
its corporate Secretary) of the exercise of the Option and (b) simultaneously
paying the Option Price to Onyx in cash, by check acceptable by the Committee or
in Stock, or in any combination of the foregoing. The Option Price also may be
paid through any broker facilitated cashless exercise
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<PAGE>
procedure acceptable to the Committee or its delegate. The value of any Stock
surrendered as payment in the exercise of the Option shall be equal to the Fair
Market Value of such Stock on the date the properly endorsed certificate for
such Stock is delivered to the Committee or its delegate. The Option may be
exercised in whole shares of Stock only, and the Option may not be exercised for
fewer than 100 shares of Stock unless the total number of shares of Stock that
can be purchased under the Option at the time of such exercise is fewer than
100, in which event the Option may be exercised for the total number of such
shares.
Section 6. NON-TRANSFERABILITY. The Option shall not be transferable by
Employee other than by will or by the laws of descent and distribution. During
Employee's lifetime, the Option shall be exercised only by Employee; however,
the person or persons to whom the Option is transferred by will or by the laws
of descent and distribution thereafter shall be treated as Employee under this
Agreement.
Section 7. INVESTMENT PURPOSES. Upon receipt of Stock pursuant to the
exercise of the Option in whole or in part, Employee, if so requested by Onyx,
shall hold such Stock for investment and not with a view to resale or
distribution to the public and deliver to Onyx a written statement satisfactory
to Onyx to that effect.
Section 8. NOT EMPLOYMENT CONTRACT; NO SHAREHOLDER RIGHTS; CONSTRUCTION
OF AGREEMENT. This Agreement (a) shall not be deemed a contract of employment,
(b) shall not confer on Employee any rights upon his or her termination of
employment in addition to those rights expressly set forth in this Agreement,
(c) shall not give Employee any rights of any kind or description whatsoever as
a shareholder of Onyx as a result of the grant of the Option or his or her
exercise of the Option before the date of the actual delivery of Stock subject
to the Option to
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<PAGE>
Employee, and (d) shall be construed exclusively in accordance with the laws of
the State of Georgia (without regard to its rules of conflicts of laws).
Section 9. MODIFICATION, AMENDMENT, AND CANCELLATION. Onyx shall have
the right unilaterally to modify, amend or cancel the Option in accordance with
the terms of the Plan.
Section 10. OTHER CONDITIONS. If so requested by the Committee,
Employee shall (as a condition to the exercise of the Option) enter into such
additional shareholder, buy-sell or other agreement or agreements prepared by
Onyx as Onyx deems appropriate, or make such representations requested by Onyx
as Onyx deems appropriate, which may restrict the transfer of shares of Stock
acquired pursuant to this Agreement and provide for the repurchase of such Stock
by Onyx under certain circumstances. The certificate(s) evidencing the Stock may
include one or more legends that reference or describe the conditions upon
exercise referenced in this Section 10.
Section 11. TAX WITHHOLDING. Onyx shall have the right upon the
exercise of the Option, as a condition to the delivery of any shares of Stock
subject to the Option, to take such action as Onyx deems necessary or
appropriate to satisfy any federal and state income tax withholding requirements
arising out of the exercise of the Option, including withholding from any cash
payments of any kind otherwise due Employee the amount of such tax required to
be so withheld, requiring Employee to pay to Onyx by cash or certified check the
amount of such tax required to be withheld, or withholding Stock that otherwise
would be transferred to Employee as a result of the exercise of the Option.
Section 12. NON-WAIVER OF DEFAULT. Any failure of Onyx, on one or more
occasions, to enforce and require the strict keeping and performance of any of
the terms and conditions of this
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Agreement shall not constitute a waiver of any such terms or conditions at any
future time and shall not prevent Onyx from insisting on the strict keeping and
performance of such terms and conditions at any later time.
Section 13. HEADINGS AND SECTIONS. The headings in this Agreement are
for convenience of reference only and are not to be given substantive meaning.
All references to sections (Section) are to sections (Section) of this Agreement
unless otherwise indicated.
Section 14. MERGER CLAUSE. This Agreement supersedes any and all
understandings between Onyx and Employee with respect to the Option evidenced by
this Agreement and (except as set forth in the Plan) this Agreement may be
amended only in writing signed by Onyx and Employee.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
ONYX TECHNOLOGIES, INC.
By:
------------------------------------
Title:
---------------------------------
---------------------------------------
EMPLOYEE
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SCHEDULE A
TO
STOCK OPTION AGREEMENT
BETWEEN
ONYX TECHNOLOGIES, INC.
AND
-----------------------------------------
Dated
1. Number of Shares Subject to Option: shares of Stock.
---------------------------------- -------------------
2. Type of Option: ISO or Non-ISO .
--------------- ------------- ------
3. Exercise Price: $ per share.
-------------- -----------
4. Grant Date:
----------
5. Vesting:
-------
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<PAGE>
SCHEDULE B
TO
STOCK OPTION AGREEMENT
BETWEEN
ONYX TECHNOLOGIES, INC.
AND
-----------------------------------------
Dated
NOTICE OF EXERCISE
The undersigned hereby notifies Onyx Technologies, Inc. (the
"Company") of this election to exercise the undersigned's stock option to
purchase ________________ shares of Stock (as defined under the Plan) pursuant
to the Equity Ownership Agreement (the "Agreement") between the undersigned and
the Company dated ________________. Accompanying this Notice is (1) a certified
or a cashier's check in the amount of $________________ payable to the Company,
and/or (2) _______________ shares of Stock (as defined under the Plan) presently
owned by the undersigned and duly endorsed or accompanied by stock transfer
powers, having an aggregate Fair Market Value (as defined under the Plan) as of
the date hereof of $__________________, such amounts being equal, in the
aggregate, to the purchase price per share set forth in Schedule A of the
Agreement multiplied by the number of shares being purchased hereby (in each
instance subject to appropriate adjustment pursuant to Section 7 of the Plan).
The undersigned is a resident of the State of __________________.
IN WITNESS WHEREOF, the undersigned has set his/her hand and
seal, this________ day of____________, ______.
OPTIONEE [OR OPTIONEE'S ADMINISTRATOR,
EXECUTOR OR PERSONAL REPRESENTATIVE]
Name:___________________________________________
Position (if other than Optionee):______________
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EXHIBIT 4.05
THE CENTER FOR ADAPTIVE SYSTEMS APPLICATIONS, INC.
1995 STOCK PLAN
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 and Consultants of
the Company and its Subsidiaries and to promote the success of the Company's
business. Options granted under the Plan may be incentive stock options (as
defined under Section 422 of the Code) or non-statutory stock options, as
determined by the Administrator at the time of grant of an option and subject to
the applicable provisions of Section 422 of the Code, as amended, and the
regulations promulgated thereunder. 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
appointed pursuant to Section 4 of the Plan.
(b) "BOARD" means the Board of Directors of the Company.
(c) "CODE" means the Internal Revenue Code of 1986, as
amended.
(d) "COMMITTEE" means a Committee appointed by the Board of
Directors in accordance with Section 4 of the Plan.
(e) "COMMON STOCK" means the Common Stock of the Company.
(f) "COMPANY" means The Center for Adaptive Systems
Applications, Inc., a Delaware corporation.
(g) "CONSULTANT" means any person who is engaged by the
Company or any Parent or Subsidiary to render consulting or advisory services
and is compensated for such services, and any director of the Company whether
compensated for such services or not; provided that if and in the event the
Company registers any class of any equity security pursuant to the Exchange Act,
the term CONSULTANT shall thereafter not include directors who are not
compensated for their services or are paid only a director's fee by the Company.
(h) "CONTINUOUS STATUS AS AN EMPLOYEE OR CONSULTANT" means
that the employment or consulting relationship with the Company, any Parent or
Subsidiary, is not interrupted or terminated. Continuous Status as an Employee
or Consultant shall not be considered interrupted 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
<PAGE>
Subsidiary or any successor. A leave of absence approved by the Company shall
include sick leave, military leave, or any other personal leave approved by
an authorized representative of the Company. For purposes of Incentive Stock
Options, no such leave may exceed 90 days, unless reemployment upon
expiration of such leave is guaranteed by statute or contract, including
Company policies. If reemployment upon expiration of a leave of absence
approved by the Company is not so guaranteed, on the 91st 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.
(i) "EMPLOYEE" means any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.
(j) "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.
(k) "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 of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System, 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 quoted on the Nasdaq Stock
Market (but not on the Nasdaq National Market thereof) or regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value 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;
(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.
(l) "INCENTIVE STOCK OPTION" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.
(m) "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an Incentive Stock Option.
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(n) "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.
(o) "OPTION" means a stock option granted pursuant to the Plan.
(p) "OPTIONED STOCK" means the Common Stock subject to an
Option or a Stock Purchase Right.
(q) "OPTIONEE" means an Employee or Consultant who receives an
Option or Stock Purchase Right.
(r) "PARENT" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(s) "PLAN" means this 1995 Stock Plan.
(t) "RESTRICTED STOCK" means shares of Common Stock acquired
pursuant to a grant of a Stock Purchase Right under Section 11 below.
(u) "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 12 below.
(v) "STOCK PURCHASE RIGHT" means the right to purchase Common
Stock pursuant to Section 11 below.
(w) "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 12
of the Plan, the maximum aggregate number of shares which may be optioned and
sold under the Plan is 175,000 shares of Common Stock. 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); PROVIDED, however, that Shares that have actually been issued
under the Plan, whether upon exercise of an Option or a Right, shall not be
returned to the Plan and shall not become available for future distribution
under the Plan, except that if
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Shares of Restricted Stock are repurchased by the Company at their original
purchase price, and the original purchaser of such Shares did not receive any
benefits of ownership of such Shares, such Shares shall become available for
future grant under the Plan. For purposes of the preceding sentence, voting
rights shall not be considered a benefit of Share ownership.
4. ADMINISTRATION OF THE PLAN.
(a) INITIAL PLAN PROCEDURE. Prior to the date, if any, upon
which the Company becomes subject to the Exchange Act, the Plan shall be
administered by the Board or a committee appointed by the Board.
(b) PLAN PROCEDURE AFTER THE DATE, IF ANY, UPON WHICH THE
COMPANY BECOMES SUBJECT TO THE EXCHANGE ACT.
(i) ADMINISTRATION WITH RESPECT TO DIRECTORS AND
OFFICERS. With respect to grants of Options or Stock Purchase Rights to
Employees who are also officers or directors of the Company, the Plan shall be
administered by (A) the Board if the Board may administer the Plan in compliance
with Rule 16b-3 promulgated under the Exchange Act or any successor thereto
("Rule 16b-3") with respect to a plan intended to qualify thereunder as a
discretionary plan, or (B) a committee designated by the Board to administer the
Plan, which committee shall be constituted in such a manner as to permit the
Plan to comply with Rule 16b-3 with respect to a plan intended to qualify
thereunder as a discretionary plan. Once appointed, such Committee shall
continue to serve in its designated capacity until otherwise directed by the
Board. From time to time the Board may increase the size of the Committee and
appoint additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies, however caused,
and remove all members of the Committee and thereafter directly administer the
Plan, all to the extent permitted by Rule 16b-3 with respect to a plan intended
to qualify thereunder as a discretionary plan.
(ii) MULTIPLE ADMINISTRATIVE BODIES. If permitted by
Rule 16b-3, the Plan may be administered by different bodies with respect to
directors, non-director officers and Employees who are neither directors nor
officers.
(iii) ADMINISTRATION WITH RESPECT TO CONSULTANTS AND
OTHER EMPLOYEES. With respect to grants of Options or Stock Purchase Rights to
Employees or Consultants who are neither directors nor officers of the Company,
the Plan shall be administered by (A) the Board or (B) a committee designated by
the Board, which committee shall be constituted in such a manner as to satisfy
the legal requirements relating to the administration of incentive stock option
plans, if any, of Delaware corporate and securities laws, of the Code and of any
applicable stock exchange (the "Applicable Laws"). Once appointed, such
Committee shall continue to serve in its designated capacity until otherwise
directed by the Board. From time to time the Board may
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<PAGE>
increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in
substitution therefor, fill vacancies, however caused, and remove all members
of the Committee and thereafter directly administer the Plan, all to the
extent permitted by the Applicable Laws.
(c) POWERS OF THE ADMINISTRATOR. Subject to the provisions of
the Plan and, in the case of a Committee, the specific duties delegated by the
Board to such Committee, and subject to the approval of any relevant
authorities, including the approval, if required, of any stock exchange upon
which the Common Stock is listed, the Administrator shall have the authority, in
its discretion:
(i) to determine the Fair Market Value of the Common
Stock, in accordance with Section 2(k) of the Plan;
(ii) to select the Consultants and Employees to whom
Options and Stock Purchase Rights may from time to time be granted hereunder;
(iii) to determine whether and to what extent Options
and Stock Purchase Rights or any combination thereof are 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 of any award
granted hereunder;
(vii) to determine whether and under what circumstances
an Option may be settled in cash under subsection 9(f) instead of Common Stock;
(viii) to reduce the exercise price of any Option to
the then current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option shall have declined since the date the Option was
granted;
(ix) to determine the terms and restrictions applicable
to Stock Purchase Rights and the Restricted Stock purchased by exercising such
Stock Purchase Rights; and
(x) to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan.
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<PAGE>
(d) 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 any Options or Stock Purchase
Rights.
5. ELIGIBILITY.
(a) Nonstatutory Stock Options and Stock Purchase Rights may be
granted to Employees and Consultants. Incentive Stock Options may be granted
only to Employees. An Employee or Consultant who has been granted an Option or
Stock Purchase Right may, if otherwise eligible, be granted additional Options
or Stock Purchase Rights.
(b) Each Option shall be designated in the written option
agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designations, to the extent that the aggregate
Fair Market Value:
(i) of Shares subject to an Optionee's Incentive Stock
Options granted by the Company, any Parent or Subsidiary, which
(ii) become exercisable for the first time during any
calendar year (under all plans of the Company or any Parent or Subsidiary)
exceeds $100,000, such excess Options shall be treated as Nonstatutory Stock
Options. For purposes of this Section 5(b), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares shall be determined as of the time the Option with respect
to such Shares is granted.
(c) The Plan shall not confer upon any Optionee any right with
respect to continuation of employment relationship with the Company, nor shall
it interfere in any way with his or her right or the Company's right to
terminate his or her employment relationship at any time, with or without cause.
(d) Upon the Company or a successor corporation issuing any
class of common equity securities required to be registered under Section 12 of
the Exchange Act or upon the Plan being assumed by a corporation having a class
of common equity securities required to be registered under Section 12 of the
Exchange Act, the following limitations shall apply to grants of Options and
Stock Purchase Rights to Employees:
(i) No Employee shall be granted, in any fiscal year of
the Company, Options and Stock Purchase Rights to purchase more than 150,000
Shares.
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(ii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 12.
(iii) If an Option or Stock Purchase Right is canceled
in the same fiscal year of the Company in which it was granted (other than in
connection with a transaction described in Section 12), the canceled Option will
be counted against the limit set forth in Section 5(d)(i). 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.
6. TERM OF PLAN. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
stockholders of the Company, as described in Section 18 of the Plan. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 14 of the Plan.
7. TERM OF OPTION. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof. However, 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
Option shall be five (5) years from the date of grant thereof or such shorter
term as may be provided in the Option Agreement.
8. 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 such price as is determined by the
Board, but shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of
the grant of such Incentive Stock Option, 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 Employee other than an
Employee described in the preceding paragraph, the per Share exercise price
shall be no less than 100% of the Fair Market Value per Share on the date of
grant.
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(ii) In the case of a Nonstatutory Stock Option
(A) granted to a person who, at the time of
the grant of such Option, 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 the grant.
(B) granted to any person, the per Share
exercise price shall be no less than 50% of the Fair Market Value per Share on
the date of grant.
(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) and may consist entirely of (1) cash, (2)
check, (3) promissory note, (4) other Shares which in the case of Shares
acquired upon exercise of an Option (x) 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 said Option shall be exercised, (5) 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, or (6) any combination of the foregoing methods of payment. In
making its determination as to the type of consideration to accept, the Board
shall consider if acceptance of such consideration may be reasonably expected to
benefit the Company.
9. EXERCISE OF OPTION.
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER. Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Board, including performance criteria with respect to the
Company or the Optionee, and as shall be permissible under the terms of the
Plan.
An Option may not be exercised for a fraction of a
Share.
An Option shall be deemed to be exercised when written
notice of such exercise has been given to the Company in accordance with the
terms of the Option 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 Board, consist
of any consideration and method of payment allowable under Section 8(b) of the
Plan. Until the issuance (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no
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right to vote or receive dividends or any other rights as a stockholder shall
exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option. The Company shall issue (or cause to be issued) such stock certificate
promptly upon exercise of the Option. No adjustment will be made for a dividend
or other right for which the record date is prior to the date the stock
certificate is issued, except as provided in Section 12 of the Plan.
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 EMPLOYMENT OR CONSULTING RELATIONSHIP. In
the event of termination of an Optionee's Continuous Status as an Employee or
Consultant with the Company (but not in the event of an Optionee's change of
status from Employee to Consultant (in which case an Employee's Incentive Stock
Option shall automatically convert to a Nonstatutory Stock Option on the
ninety-first (91st) day following such change of status) or from Consultant to
Employee), such Optionee may, but only within such period of time as is
determined by the Administrator, of at least thirty (30) days, with such
determination in the case of an Incentive Stock Option not exceeding three (3)
months after the date of such termination (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise his or her Option to the extent that Optionee was entitled
to exercise it at the date of such termination. To the extent that Optionee was
not entitled to exercise the Option at the date of such termination, or if
Optionee does not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate.
(c) DISABILITY OF OPTIONEE. 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
automatically convert to 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.
(d) DEATH OF OPTIONEE. In the event of the death of an
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 expiration of the
term of such Option as set forth in the Notice of Grant), by the
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Optionee's estate or by a person who acquired the right to exercise the
Option by bequest or inheritance, but only to the extent that the Optionee
was entitled to exercise the Option at the date of death. If, at the time of
death, the Optionee was not entitled to exercise his or her entire Option,
the Shares covered by the unexercisable portion of the Option shall
immediately revert to the Plan. If, after death, the Optionee's estate or a
person who acquired the right to exercise the Option by bequest or
inheritance does not exercise the Option within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.
(e) RULE 16b-3. Options granted to persons subject to Section
16(b) of the Exchange Act shall comply with Rule 16b-3 and agreements therefor
shall contain such additional conditions or restrictions as may be required
thereunder to qualify for the maximum exemption from Section 16 of the Exchange
Act with respect to Plan transactions.
(f) 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.
10. NON-TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS. Options
and Stock Purchase Rights 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.
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 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 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 sixty (60) days from the date
upon which the Administrator made 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 employment 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 such rate as the
Administrator may determine.
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(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. In
addition, the provisions of restricted stock purchase agreements need not be the
same with respect to each purchaser.
(d) RIGHTS AS A STOCKHOLDER. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will 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 12
of the Plan.
12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.
(a) CHANGES IN CAPITALIZATION. Subject to any required action
by the stockholders 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; provided, however, that 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 Board 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 will 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 shall
be assumed or an equivalent
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<PAGE>
option or right shall be substituted by such successor corporation or a
parent or subsidiary of such successor corporation. If, in such event, the
Option or Stock Purchase Right is not assumed or substituted, the Board shall
provide for the optionee or holder of a Stock Purchase Right to exercise the
option (or have vested under the Stock Purchase Right) as to all of the
Common Stock subject to the Option (or Stock Purchase Right), including stock
as to which the Option (or Stock Purchase Right) would not otherwise have
been exercisable, for a 15-day period following notice of such right being
mailed or otherwise sent to the participant in the Plan, after which 15-day
period the Option (or Stock Purchase Right) will terminate. The Board may
also grant Options (or Stock Purchase Rights) which are accelerated and fully
exercisable upon the occurrence of certain events, including events in
connection with or following a merger, change in control, acquisition or sale
or lease of substantially all assets of the Company. For the purposes of this
paragraph, the Option or Stock Purchase Right shall be considered assumed if,
following the merger, the option or right confers the right to purchase, 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
holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); PROVIDED,
however, that if such consideration received in the merger was 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.
13. 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 date as is determined by the Board. Notice of the
determination shall be given to each Employee or Consultant to whom an Option or
Stock Purchase Right is so granted within a reasonable time after the date of
such grant.
14. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AMENDMENT AND TERMINATION. The Board may at any time amend,
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuation shall be made which would impair the rights of any Optionee
under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with Rule 16b-3 under the Exchange
Act or with Section 422 of the Code (or any other applicable law or regulation,
including the requirements of the NASD or an established stock exchange), the
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<PAGE>
Company shall obtain stockholder approval of any Plan amendment in such a manner
and to such a degree as is required.
(b) EFFECT OF AMENDMENT OR TERMINATION. Any such amendment or
termination of the Plan shall not affect Options or Stock Purchase Rights
already granted, and such Options and Stock Purchase Rights shall remain in full
force and effect as if this Plan had not been amended or terminated, unless
mutually agreed otherwise between the Optionee and the Board, which agreement
must be in writing and signed by the Optionee and the Company.
15. 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 pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange or quotation system upon which the Shares may
then be listed, 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 by any of the aforementioned
relevant provisions of law.
16. RESERVATION OF SHARES. The Company, during the term of this Plan,
will 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.
17. AGREEMENTS. Options and Stock Purchase Rights shall be evidenced by
written agreements in such form as the Board shall approve from time to time.
18. STOCKHOLDER APPROVAL. Continuance of the Plan shall be subject to
approval by the stockholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such stockholder approval shall be obtained
in the degree and manner required under applicable state and federal law and the
rules of any stock exchange upon which the Common Stock is listed.
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EXHIBIT 4.06
THE CENTER FOR ADAPTIVE SYSTEMS APPLICATIONS, 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
[OPTIONEE'S NAME AND ADDRESS]
- ----------------------
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:
Grant Number _________________________
Date of Grant _________________________
Vesting Commencement Date _________________________
Exercise Price per Share $________________________
Total Number of Shares Granted _________________________
Total Exercise Price $_________________________
Type of Option: ___ Incentive Stock Option
___ Nonstatutory Stock Option
Term/Expiration Date: _________________________
VESTING SCHEDULE:
This Option may be exercised, in whole or in part, in accordance with
the following schedule:
<PAGE>
25% of the Shares subject to the Option shall vest twelve 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 sixty (60) days after termination of
employment or consulting relationship, or such longer period as may be
applicable upon death or disability of Optionee as provided in the Plan, but in
no event later than the Term/Expiration Date as provided above.
II. AGREEMENT
1. GRANT OF OPTION. The Center for Adaptive Systems Applications, 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.
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. However, if this Option is intended to be
an Incentive Stock Option, to the extent that it exceeds the $100,000 rule of
Code Section 422(d), it shall be treated as a Nonstatutory Stock Option ("NSO").
2. EXERCISE OF OPTION. This Option shall be exercisable during its term
in accordance with the Vesting Schedule set out in the Notice of Grant and with
the provisions of Section 9 of the Plan as follows:
(i) RIGHT TO EXERCISE.
(a) This Option may not be exercised for a fraction
of a Share.
(b) In the event of Optionee's death, disability or
other termination of the employment or consulting relationship, the
exercisability of the Option is governed by Sections 6, 7 and 8 below, subject
to the limitation contained in subsection 2(i)(c).
(c) In no event may this Option be exercised after
the date of expiration of the term of this Option as set forth in the Notice of
Grant.
<PAGE>
(ii) 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, including
a required market stand-off period following the Company's initial public
offering. 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 Price. 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.
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:
(i) cash; or
(ii) check;
(iii) full recourse promissory note secured by assets other
than the purchased Shares;
(iv) surrender of other shares of Common Stock of the Company
which in the case of Shares acquired pursuant to the exercise of a Company
option, (A) 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
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<PAGE>
(v) 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 stockholders 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. As a condition to the exercise of this
Option, the Company may require Optionee to make any representation and warranty
to the Company as may be required by any applicable law or regulation.
6. TERMINATION OF RELATIONSHIP. In the event an 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 automatically convert to 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.
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<PAGE>
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%) stockholders shall apply to
this Option.
11. TAXATION UPON EXERCISE OF OPTION. Optionee understands that, upon
exercising a Nonstatutory Option, he or she will recognize income for tax
purposes in an amount equal to the excess of the then Fair Market Value of the
Shares over the exercise price. However, the timing of this income recognition
may be deferred for up to six months if Optionee is subject to Section 16 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). If the
Optionee is an 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 equal to a percentage of this compensation income.
Additionally, the Optionee may at some point be required to satisfy tax
withholding obligations with respect to the disqualifying disposition of an
Incentive Stock Option. The Optionee shall satisfy his or her tax withholding
obligation arising upon the exercise of this Option out of Optionee's
compensation or by payment to the Company.
12. TAX CONSEQUENCES. Set forth below is a brief summary as of the date
of this Option of some of the federal 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.
(i) EXERCISE OF ISO. If this Option qualifies as an ISO,
there will be no regular federal 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.
(ii) 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
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<PAGE>
termination, the Optionee must exercise an ISO within 90 days of such
termination for the ISO to be qualified as an ISO.
(iii) EXERCISE OF NONSTATUTORY STOCK OPTION. There may be a
regular federal 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.
(iv) 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 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 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.
(v) 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.
13. ENTIRE AGREEMENT; GOVERNING LAW. The Plan is incorporated herein by
reference. The Plan, this Option Agreement and the Exhibits hereto 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 hereof, 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 Delaware law
except for that body of law pertaining to conflict of laws.
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<PAGE>
THE CENTER FOR ADAPTIVE SYSTEMS
APPLICATIONS, INC.,
a Delaware corporation
By:
-----------------------------
Title:
-----------------------------
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
THE OPTION GRANTED HEREBY 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 hereof and 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 or 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
--------------------------------
Print Name
Residence Address:
--------------------------------
--------------------------------
--------------------------------
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EXHIBIT A
1995 STOCK PLAN
EXERCISE NOTICE
The Center for Adaptive Systems Applications, Inc.
- --------------------------------
- --------------------------------
Attention: Secretary
1. EXERCISE OF OPTION. Effective as of today, ___________, 19__, the
undersigned ("Optionee") hereby elects to exercise Optionee's option to purchase
_________ shares of the Common Stock (the "Shares") of The Center for Adaptive
Systems Applications, Inc. (the "Company") under and pursuant to the 1995 Stock
Plan, as amended (the "Plan") and the [ ] Incentive [ ] Nonstatutory Stock
Option Agreement dated ________, 19__ (the "Option Agreement").
2. REPRESENTATIONS OF OPTIONEE. Optionee acknowledges that Optionee has
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions.
3. RIGHTS AS STOCKHOLDER. Until the stock certificate evidencing such
Shares is 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
or receive dividends or any other rights as a stockholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of the Option. The
Company shall issue (or cause to be issued) such stock certificate promptly
after the Option is exercised. No adjustment will be made for a dividend or
other right for which the record date is prior to the date the stock certificate
is issued, except as provided in Section 12 of the Plan.
Optionee shall enjoy rights as a stockholder until such time as
Optionee disposes of the Shares or the Company or its assignee(s) exercises the
Right of First Refusal hereunder. Upon such exercise, Optionee shall have no
further rights as a holder of the Shares so purchased except the right to
receive payment for the Shares so purchased in accordance with the provisions of
this Agreement, and Optionee shall forthwith cause the certificate(s) evidencing
the Shares so purchased to be surrendered to the Company for transfer or
cancellation.
4. COMPANY'S RIGHT OF FIRST REFUSAL. Before any Shares held by Optionee
or any transferee (either being sometimes referred to herein as the "Holder")
may be sold or otherwise transferred (including transfer by gift or operation of
law), the Company or its assignee(s) shall
<PAGE>
have a right of first refusal to purchase the Shares on the terms and
conditions set forth in this Section (the "Right of First Refusal").
(a) NOTICE OF PROPOSED TRANSFER. The Holder of the Shares shall
deliver to the Company a written notice (the "Notice") stating: (i) the Holder's
bona fide intention to sell or otherwise transfer such Shares; (ii) the name of
each proposed purchaser or other transferee ("Proposed Transferee"); (iii) the
number of Shares to be transferred to each Proposed Transferee; and (iv) the
bona fide cash price or other consideration for which the Holder proposes to
transfer the Shares (the "Offered Price"), and the Holder shall offer the Shares
at the Offered Price to the Company or its assignee(s).
(b) EXERCISE OF RIGHT OF FIRST REFUSAL. At any time within
thirty (30) days after receipt of the Notice, the Company or its assignee(s)
may, by giving written notice to the Holder, elect to purchase all, but not less
than all, of the Shares proposed to be transferred to any one or more of the
Proposed Transferees, at the purchase price determined in accordance with
subsection (c) below.
(c) PURCHASE PRICE. The purchase price ("Purchase Price") for
the Shares purchased by the Company or its assignee(s) under this Section shall
be the Offered Price. If the Offered Price includes consideration other than
cash, the cash equivalent value of the non-cash consideration shall be
determined by the Board of Directors of the Company in good faith.
(d) PAYMENT. Payment of the Purchase Price shall be made, at
the option of the Company or its assignee(s), in cash (by check), by
cancellation of all or a portion of any outstanding indebtedness of the Holder
to the Company (or, in the case of repurchase by an assignee, to the assignee),
or by any combination thereof within 30 days after receipt of the Notice or in
the manner and at the times set forth in the Notice.
(e) HOLDER'S RIGHT TO TRANSFER. If all of the Shares proposed
in the Notice to be transferred to a given Proposed Transferee are not purchased
by the Company or its assignee(s) as provided in this Section, then the Holder
may sell or otherwise transfer such Shares to that Proposed Transferee at the
Offered Price or at a higher price, provided that such sale or other transfer is
consummated within 120 days after the date of the Notice and provided further
that any such sale or other transfer is effected in accordance with any
applicable securities laws and the Proposed Transferee agrees in writing that
the provisions of this Section shall continue to apply to the Shares in the
hands of such Proposed Transferee. If the Shares described in the Notice are not
transferred to the Proposed Transferee within such period, a new Notice shall be
given to the Company, and the Company or its assignees shall again be offered
the Right of First Refusal before any Shares held by the Holder may be sold or
otherwise transferred.
(f) EXCEPTION FOR CERTAIN FAMILY TRANSFERS. Anything to the
contrary contained in this Section notwithstanding, the transfer of any or all
of the Shares during the Optionee's lifetime or on the Optionee's death by will
or intestacy to the Optionee's immediate family or a
<PAGE>
trust for the benefit of the Optionee's immediate family shall be exempt
from the provisions of this Section. "Immediate Family" as used herein shall
mean spouse, lineal descendant or antecedent, father, mother, brother or
sister. In such case, the transferee or other recipient shall receive and
hold the Shares so transferred subject to the provisions of this Section, and
there shall be no further transfer of such Shares except in accordance with
the terms of this Section.
(g) TERMINATION OF RIGHT OF FIRST REFUSAL. The Right of First
Refusal shall terminate as to any Shares 90 days after the first sale of Common
Stock of the Company to the general public pursuant to a registration statement
on Form S-1, SB-1 or SB-2 (or successor forms) filed with and declared effective
by the Securities and Exchange Commission under the Securities Act of 1933, as
amended.
5. TAX CONSULTATION. Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.
6. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
(a) LEGENDS. Optionee understands and agrees that the Company
shall cause the legends set forth below or legends substantially equivalent
thereto, to be placed upon any certificate(s) evidencing ownership of the Shares
together with any other legends that may be required by the Company or by state
or federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF
COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN
COMPLIANCE THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL
HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE
EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF
THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL
OFFICE OF THE ISSUER. SUCH TRANSFER
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<PAGE>
RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON
TRANSFEREES OF THESE SHARES.
(b) STOP-TRANSFER NOTICES. Optionee agrees that, in order to
ensure compliance with the restrictions referred to herein, the Company may
issue appropriate "stop transfer" instructions to its transfer agent, if any,
and that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
(c) REFUSAL TO TRANSFER. The Company shall not be required (i)
to transfer on its books any Shares that have been sold or otherwise transferred
in violation of any of the provisions of this Agreement or (ii) to treat as
owner of such Shares or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Shares shall have been so
transferred.
7. SUCCESSORS AND ASSIGNS. The Company may assign any of its rights
under this Agreement to single or multiple assignees, and this Agreement shall
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer herein set forth, this Agreement shall be binding
upon Optionee and his or her heirs, executors, administrators, successors and
assigns.
8. INTERPRETATION. Any dispute regarding the interpretation of this
Agreement shall be submitted by Optionee or by the Company forthwith to the
Company's Board of Directors or the committee thereof that administers the Plan,
which shall review such dispute at its next regular meeting. The resolution of
such a dispute by the Board or committee shall be final and binding on the
Company and on Optionee.
9. GOVERNING LAW; SEVERABILITY. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware excluding that
body of law pertaining to conflicts of law. Should any provision of this
Agreement be determined by a court of law to be illegal or unenforceable, the
other provisions shall nevertheless remain effective and shall remain
enforceable.
10. NOTICES. Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given upon personal delivery or four
(4) days after deposit in the United States mail by certified mail, with postage
and fees prepaid, addressed to the other party at its address as shown below
beneath its signature, or to such other address as such party may designate in
writing from time to time to the other party.
11. FURTHER INSTRUMENTS. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Agreement.
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<PAGE>
12. DELIVERY OF PAYMENT. Optionee herewith delivers to the Company the
full Exercise Price for the Shares.
13. ENTIRE AGREEMENT. The Plan and Notice of Grant/Option Agreement are
incorporated herein by reference. This Agreement, the Plan, the Option Agreement
and the Investment Representation Statement 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 hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee.
Submitted by: Accepted by:
OPTIONEE: THE CENTER FOR ADAPTIVE SYSTEMS
APPLICATIONS, INC.
By:
--------------------------------
Its:
--------------------------------
(Signature)
ADDRESS: ADDRESS:
--------------------------------------
--------------------------------------
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<PAGE>
EXHIBIT B
INVESTMENT REPRESENTATION STATEMENT
OPTIONEE :
COMPANY : THE CENTER FOR ADAPTIVE SYSTEMS APPLICATIONS, INC.
SECURITY : COMMON STOCK
AMOUNT :
DATE :
In connection with the purchase of the above-listed Securities, the undersigned
Optionee represents to the Company the following:
(a) Optionee is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the Securities. Optionee
is acquiring these Securities for investment for Optionee's own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").
(b) Optionee acknowledges and understands that the Securities
constitute "restricted securities" under the Securities Act and have not been
registered under the Securities Act in reliance upon a specific exemption
therefrom, which exemption depends upon, among other things, the BONA FIDE
nature of Optionee's investment intent as expressed herein. In this connection,
Optionee understands that, in the view of the Securities and Exchange
Commission, the statutory basis for such exemption may be unavailable if
Optionee's representation was predicated solely upon a present intention to hold
these Securities for the minimum capital gains period specified under tax
statutes, for a deferred sale, for or until an increase or decrease in the
market price of the Securities, or for a period of one year or any other fixed
period in the future. Optionee further understands that the Securities must be
held indefinitely unless they are subsequently registered under the Securities
Act or an exemption from such registration is available. Optionee further
acknowledges and understands that the Company is under no obligation to register
the Securities. Optionee understands that the certificate evidencing the
Securities will be imprinted with a legend that prohibits the transfer of the
Securities unless they are registered or such registration is not required in
the opinion of counsel satisfactory to the Company and any other legend required
under applicable state securities laws.
<PAGE>
(c) Optionee is familiar with the provisions of Rule 701 and
Rule 144, each promulgated under the Securities Act, which, in substance, permit
limited public resale of "restricted securities" acquired, directly or
indirectly from the issuer thereof, in a non-public offering subject to the
satisfaction of certain conditions. Rule 701 provides that if the issuer
qualifies under Rule 701 at the time of the grant of the Option to the Optionee,
the exercise will be exempt from registration under the Securities Act. In the
event the Company becomes subject to the reporting requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
ninety (90) days thereafter (or such longer period as any market stand-off
agreement may require) the Securities exempt under Rule 701 may be resold,
subject to the satisfaction of certain of the conditions specified by Rule 144,
including: (1) the resale being made through a broker in an unsolicited
"broker's transaction" or in transactions directly with a market maker (as said
term is defined under the Exchange Act); and, in the case of an affiliate, (2)
the availability of certain public information about the Company, (3) the amount
of Securities being sold during any three-month period not exceeding the
limitations specified in Rule 144(e), and (4) the timely filing of a Form 144,
if applicable.
In the event that the Company does not qualify under Rule 701 at the
time of grant of the Option, then the Securities may be resold in certain
limited circumstances subject to the provisions of Rule 144, which requires the
resale to occur not less than two years after the later of the date the
Securities were sold by the Company or the date the Securities were sold by an
affiliate of the Company, within the meaning of Rule 144; and, in the case of
acquisition of the Securities by an affiliate, or by a non-affiliate who
subsequently holds the Securities less than three years, the satisfaction of the
conditions set forth in sections (1), (2), (3) and (4) of the paragraph
immediately above.
(d) Optionee hereby agrees that if so requested by the Company
or any representative of the underwriters in connection with any registration of
the offering of any securities of the Company under the Securities Act, Optionee
shall not sell or otherwise transfer any Shares or other securities of the
Company during the 180-day period following the date of the final Prospectus
contained in a registration statement of the Company filed under the Securities
Act; provided, however, that such restriction shall only apply to the first
registration statement of the Company to become effective under the Securities
Act which includes securities to be sold on behalf of the Company to the public
in an underwritten public offering under the Securities Act. The Company may
impose stop-transfer instructions with respect to securities subject to the
foregoing restrictions until the end of such 180-day period.
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<PAGE>
(e) Optionee further understands that in the event all of the
applicable requirements of Rule 701 or 144 are not satisfied, registration under
the Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rules 144
and 701 are not exclusive, the staff of the Securities and Exchange Commission
has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rules 144 or 701 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk. Optionee understands that no assurances can be given that any
such other registration exemption will be available in such event.
Signature of Optionee:
-------------------------------------------
-------------------------------------------
Print Name
Date: , 19
-------------------- ---
<PAGE>
THE CENTER FOR ADAPTIVE SYSTEMS APPLICATIONS, INC.
STOCK OPTION AGREEMENT -- EARLY EXERCISE
Unless otherwise defined herein, the terms defined in the Stock Plan
shall have the same defined meanings in this Stock Option Agreement (the "Option
Agreement").
NOTICE OF STOCK OPTION GRANT
----------------------------------
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:
Grant Number
Date of Grant
Vesting Commencement Date
Exercise Price per Share
Total Number of Shares Granted
Total Exercise Price
Type of Option: ____Incentive Stock Option
____Nonstatutory Stock Option
Term/Expiration Date:
EXERCISE AND VESTING SCHEDULE:
This Option shall be exercisable in whole or in part, and shall vest
according to the following vesting schedule:
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<PAGE>
TERMINATION PERIOD:
This Option may be exercised, to the extent it is then vested, for
sixty days after Optionee ceases to be a Service Provider. Upon death or
Disability of the Optionee, this Option may be exercised, to the extent it is
then vested, for one year after Optionee ceases to be Service Provider. In no
event shall this Option be exercised later than the Term/Expiration Date as
provided above.
AGREEMENT
GRANT OF OPTION. The Administrator of the Company hereby
grants to the Optionee named in the Notice of Grant (the "Optionee"), an option
(the "Option") to purchase the number of Shares set forth in the Notice of
Grant, at the exercise price per Share set forth in the Notice of Grant (the
"Exercise Price"), and subject to the terms and conditions of the Plan, which is
incorporated herein by reference. Subject to Section 13(c) of the Plan, in the
event of a conflict between the terms and conditions of the Plan and this Option
Agreement, the terms and conditions of the Plan shall prevail.
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").
EXERCISE OF OPTION. This Option shall be exercisable during
its term in accordance with the provisions of Section 9 of the Plan as follows:
Right to Exercise.
Subject to subsections 2(a)(ii) and 2(a)
(iii) below, this Option shall be exercisable cumulatively according to the
vesting schedule set forth in the Notice of Grant. Alternatively, at the
election of the Optionee, this Option may be exercised in whole or in part at
any time as to Shares that have not yet vested. Vested Shares shall not be
subject to the Company's repurchase right (as set forth in the Restricted Stock
Purchase Agreement, attached hereto as EXHIBIT C-1).
As a condition to exercising this Option for
unvested Shares, the Optionee shall execute the Restricted Stock Purchase
Agreement.
This Option may not be exercised for a
fraction of a Share.
METHOD OF EXERCISE. This Option shall be exercisable
by delivery of an exercise notice in the form attached as Exhibit A (the
"Exercise Notice") which shall state the election to exercise the Option, the
number of Shares with respect to which the Option is being exercised, and such
other representations and agreements as may be required by the Company. The
Exercise Notice shall be accompanied by payment of the aggregate Exercise Price
as to all Exercised Shares. This Option shall
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<PAGE>
be deemed to be exercised upon receipt by the Company of such fully executed
Exercise Notice accompanied by the aggregate Exercise Price.
No Shares shall be issued pursuant to the exercise of an
Option unless such issuance and such exercise complies with Applicable Laws.
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.
OPTIONEE'S REPRESENTATIONS. In the event the Shares have not
been registered under the Securities Act of 1933, as amended, at the time this
Option is exercised, the 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.
LOCK-UP PERIOD. Optionee hereby agrees that, if so requested
by the Company or any representative of the underwriters (the "Managing
Underwriter") in connection with any registration of the offering of any
securities of the Company under the Securities Act, Optionee shall not sell or
otherwise transfer any Shares or other securities of the Company during the
180-day period (or such other period as may be requested in writing by the
Managing Underwriter and agreed to in writing by the Company) (the "Market
Standoff Period") following the effective date of a registration statement of
the Company filed under the Securities Act. Such restriction shall apply only to
the first registration statement of the Company to become effective under the
Securities Act that includes securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Securities Act. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such Market Standoff Period.
METHOD OF PAYMENT. Payment of the aggregate Exercise Price
shall be by any of the following, or a combination thereof, at the election of
the Optionee:
cash;
check;
consideration received by the Company under a formal
cashless exercise program adopted by the Company in connection with the Plan; or
surrender of other Shares which, (i) in the case of
Shares acquired upon exercise of an option, have been owned by the Optionee for
more than six (6) months on the date of surrender, and (ii) have a Fair Market
Value on the date of surrender equal to the aggregate Exercise Price of the
Exercised Shares.
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
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<PAGE>
exercise or the method of payment of consideration for such shares would
constitute a violation of any Applicable Law.
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 the Plan and this Option Agreement shall be binding upon
the executors, administrators, heirs, successors and assigns of the Optionee.
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.
TAX CONSEQUENCES. Set forth below is a brief summary as of the
date of this Option of some of the federal 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. THE OPTIONEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
EXERCISE OF NSO. There may be a regular federal
income tax liability upon the exercise of an NSO. 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 Exercised 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.
EXERCISE OF ISO. If this Option qualifies as an ISO,
there will be no regular federal income tax liability upon the exercise of the
Option, although the excess, if any, of the Fair Market Value of the Exercised
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.
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 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 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 income tax purposes. If Shares
purchased under an ISO are disposed of within one year after exercise or 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 of the Exercised Shares and the
lesser of (i) the Fair Market Value of the Exercised Shares on the date of
exercise, or (ii) the sale price of the Exercised Shares. Different rules may
apply if the Shares are subject to a substantial risk of forfeiture (within the
meaning of Section 83 of the Code) at the time of purchase. Any additional gain
will be taxed as capital gain, short-term depending on the period that the ISO
Shares were held.
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<PAGE>
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 (i) the date two years after the Date of Grant, or (ii) 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.
SECTION 83(b) ELECTION FOR UNVESTED SHARES PURCHASED
PURSUANT TO OPTIONS. With respect to the exercise of an Option for unvested
Shares, an election (the "Election") may be filed by the Optionee with the
Internal Revenue Service, WITHIN 30 DAYS of the purchase of the Shares, electing
pursuant to Section 83(b) of the Code to be taxed currently on any difference
between the purchase price of the Shares and their Fair Market Value on the date
of purchase. In the case of an NSO, this will result in a recognition of taxable
income to the Optionee on the date of exercise, measured by the excess, if any,
of the Fair Market Value of the Exercised Shares, at the time the Option is
exercised over the purchase price for the Exercised Shares. Absent such an
election, taxable income will be measured and recognized by Optionee at the time
or times on which the Company's Repurchase Option lapses. In the case of an ISO,
such an election will result in a recognition of income to the Optionee for
alternative minimum tax purposes on the date of exercise, measured by the
excess, if any, of the Fair Market Value of the Exercised Shares, at the time
the Option is exercised, over the purchase price for the Exercised Shares.
Absent such an election, alternative minimum taxable income will be measured and
recognized by Optionee at the time or times on which the Company's Repurchase
Option lapses. Optionee is strongly encouraged to seek the advice of his or her
own tax consultants in connection with the purchase of the Shares and the
advisability of filing of the Election under Section 83(b) of the Code. A form
of Election under Section 83(b) is attached hereto as EXHIBIT C-5 for reference.
OPTIONEE ACKNOWLEDGES THAT IT IS OPTIONEE'S SOLE
RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION
83(b), EVEN IF OPTIONEE REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS
FILING ON OPTIONEE'S BEHALF.
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 hereof, and may not be modified
adversely to the Optionee's interest except by means of a writing signed by the
Company and Optionee. This Option Agreement is governed by the internal
substantive laws but not the choice of law rules of California.
NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND
AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS
EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER 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 THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS
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<PAGE>
OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE
VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY
WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S
RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.
Optionee acknowledges receipt of a copy of the Plan and
represents that he or she 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 or 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.
OPTIONEE THE CENTER FOR ADAPTIVE SYSTEMS
APPLICATIONS, INC.
- --------------------------------- ---------------------------------
Signature By
- --------------------------------- ---------------------------------
Print Name Title
- ---------------------------------
- ---------------------------------
Residence Address
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<PAGE>
EXHIBIT A
STOCK PLAN
EXERCISE NOTICE
The Center for Adaptive Systems Applications, Inc.
1911 Central Avenue
Los Alamos, NM 87544-3023
Attention: Secretary
1. EXERCISE OF OPTION. Effective as of today, ________________, ____,
the undersigned ("Optionee") hereby elects to exercise Optionee's option (the
"Option") to purchase ________________ shares of the Common Stock (the
"Shares") of The Center for Adaptive Systems Applications, Inc. (the "Company")
under and pursuant to the 1995 Stock Plan (the "Plan") and the Stock Option
Agreement dated ______________, _____ (the "Option Agreement").
DELIVERY OF PAYMENT. Purchaser herewith delivers to the Company the
full purchase price of the Shares, as set forth in the Option Agreement.
REPRESENTATIONS OF OPTIONEE. Optionee acknowledges that Optionee has
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions.
RIGHTS AS SHAREHOLDER. Until the issuance of the Shares (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 or receive
dividends or any other rights as a shareholder shall exist with respect to the
optioned stock, notwithstanding the exercise of the Option. The Shares shall be
issued to the Optionee as soon as practicable after the Option is exercised. No
adjustment shall be made for a dividend or other right for which the record
date is prior to the date of issuance except as provided in Section 12 of the
Plan.
COMPANY'S RIGHT OF FIRST REFUSAL. Before any Shares held by Optionee
or any transferee (either being sometimes referred to herein as the "Holder")
may be sold or otherwise transferred (including transfer by gift or operation
of law), the Company or its assignee(s) shall have a right of first refusal to
purchase the Shares on the terms and conditions set forth in this Section (the
"Right of First Refusal").
NOTICE OF PROPOSED TRANSFER. The Holder of the Shares shall
deliver to the Company a written notice (the "Notice") stating: (i) the
Holder's bona fide intention to sell or otherwise transfer such Shares; (ii)
the name of each proposed purchaser or other transferee ("Proposed
Transferee"); (iii) the number of Shares to be transferred to each Proposed
Transferee; and (iv) the bona fide cash price or other consideration for which
the Holder proposes to transfer the Shares (the "Offered Price"), and the
Holder shall offer the Shares at the Offered Price to the Company or its
assignee(s).
<PAGE>
EXERCISE OF RIGHT OF FIRST REFUSAL. At any time within thirty
(30) days after receipt of the Notice, the Company and/or its assignee(s) may,
by giving written notice to the Holder, elect to purchase all, but not less
than all, of the Shares proposed to be transferred to any one or more of the
Proposed Transferees, at the purchase price determined in accordance with
subsection (c) below.
PURCHASE PRICE. The purchase price ("Purchase Price") for the
Shares purchased by the Company or its assignee(s) under this Section shall be
the Offered Price. If the Offered Price includes consideration other than cash,
the cash equivalent value of the non-cash consideration shall be determined by
the Board of Directors of the Company in good faith.
PAYMENT. Payment of the Purchase Price shall be made, at the
option of the Company or its assignee(s), in cash (by check), by cancellation
of all or a portion of any outstanding indebtedness of the Holder to the
Company (or, in the case of repurchase by an assignee, to the assignee), or by
any combination thereof within 30 days after receipt of the Notice or in the
manner and at the times set forth in the Notice.
HOLDER'S RIGHT TO TRANSFER. If all of the Shares proposed in
the Notice to be transferred to a given Proposed Transferee are not purchased
by the Company and/or its assignee(s) as provided in this Section, then the
Holder may sell or otherwise transfer such Shares to that Proposed Transferee
at the Offered Price or at a higher price, provided that such sale or other
transfer is consummated within 120 days after the date of the Notice, that any
such sale or other transfer is effected in accordance with any applicable
securities laws and that the Proposed Transferee agrees in writing that the
provisions of this Section shall continue to apply to the Shares in the hands
of such Proposed Transferee. If the Shares described in the Notice are not
transferred to the Proposed Transferee within such period, a new Notice shall
be given to the Company, and the Company and/or its assignees shall again be
offered the Right of First Refusal before any Shares held by the Holder may be
sold or otherwise transferred.
EXCEPTION FOR CERTAIN FAMILY TRANSFERS. Anything to the
contrary contained in this Section notwithstanding, the transfer of any or all
of the Shares during the Optionee's lifetime or on the Optionee's death by will
or intestacy to the Optionee's immediate family or a trust for the benefit of
the Optionee's immediate family shall be exempt from the provisions of this
Section. "Immediate Family" as used herein shall mean spouse, lineal descendant
or antecedent, father, mother, brother or sister. In such case, the transferee
or other recipient shall receive and hold the Shares so transferred subject to
the provisions of this Section, and there shall be no further transfer of such
Shares except in accordance with the terms of this Section.
-2-
<PAGE>
TERMINATION OF RIGHT OF FIRST REFUSAL. The Right of First
Refusal shall terminate as to any Shares upon the first sale of Common Stock of
the Company to the general public pursuant to a registration statement filed
with and declared effective by the Securities and Exchange Commission under the
Securities Act of 1933, as amended.
2. TAX CONSULTATION. Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.
3. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
LEGENDS. Optionee understands and agrees that the Company shall
cause the legends set forth below or legends substantially equivalent thereto,
to be placed upon any certificate(s) evidencing ownership of the Shares
together with any other legends that may be required by the Company or by state
or federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF
COMPANY COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES,
SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN
COMPLIANCE THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AND RIGHT OF FIRST REFUSAL
OPTIONS HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN
THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER
OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE
PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS AND
RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE
SHARES.
IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS
SECURITY, OR ANY INTEREST THEREIN, OR TO RECEIVE ANY
CONSIDERATION THEREFOR, WITHOUT THE PRIOR WRITTEN CONSENT OF
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA,
EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.
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<PAGE>
Optionee understands that transfer of the Shares may be
restricted by Section 260.141.11 of the Rules of the California
Corporations Commissioner, a copy of which is attached to
EXHIBIT B, the Investment Representation Statement.
STOP-TRANSFER NOTICES. Optionee agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may issue
appropriate "stop transfer" instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
REFUSAL TO TRANSFER. The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred
in violation of any of the provisions of this Exercise Notice or (ii) to treat
as owner of such Shares or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Shares shall have been so
transferred.
SUCCESSORS AND ASSIGNS. The Company may assign any of its rights
under this Exercise Notice to single or multiple assignees, and the terms and
conditions of this Exercise Notice shall inure to the benefit of the successors
and assigns of the Company. Subject to the restrictions on transfer herein set
forth, the terms and conditions of this Exercise Notice shall be binding upon
Optionee and his or her heirs, executors, administrators, successors and
assigns.
INTERPRETATION. Any dispute regarding the interpretation of this
Exercise Notice shall be submitted by Optionee or by the Company forthwith to
the Administrator which shall review such dispute at its next regular meeting.
The resolution of such a dispute by the Administrator shall be final and
binding on all parties.
GOVERNING LAW; SEVERABILITY. This Exercise Notice is governed by
the internal substantive laws, but not the choice of law rules, of New Mexico.
-4-
<PAGE>
ENTIRE AGREEMENT. The Plan and Option Agreement are incorporated
herein by reference. This Exercise Notice, the Plan, the Restricted Stock
Purchase Agreement, the Option Agreement and the Investment Representation
Statement 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
hereof, and may not be modified adversely to the Optionee's interest except by
means of a writing signed by the Company and Optionee.
Submitted by: Accepted by:
OPTIONEE THE CENTER FOR ADAPTIVE SYSTEMS
APPLICATIONS, INC.
- ----------------------------------- -----------------------------------
Signature By
- ----------------------------------- -----------------------------------
Print Name Its
ADDRESS: ADDRESS:
1911 Central Avenue
- ----------------------------------- Los Alamos, NM 87544-3023
-----------------------------------
Date Received
-5-
<PAGE>
EXHIBIT B
INVESTMENT REPRESENTATION STATEMENT
OPTIONEE :
COMPANY : THE CENTER FOR ADAPTIVE SYSTEMS APPLICATIONS,
INC.
SECURITY : COMMON STOCK
AMOUNT :
DATE :
In connection with the purchase of the above-listed Securities, the undersigned
Optionee represents to the Company the following:
Optionee is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company
to reach an informed and knowledgeable decision to acquire the Securities.
Optionee is acquiring these Securities for investment for Optionee's own
account only and not with a view to, or for resale in connection with, any
"distribution" thereof within the meaning of the Securities Act of 1933, as
amended (the "Securities Act").
Optionee acknowledges and understands that the Securities
constitute "restricted securities" under the Securities Act and have not been
registered under the Securities Act in reliance upon a specific exemption
therefrom, which exemption depends upon, among other things, the bona fide
nature of Optionee's investment intent as expressed herein. In this connection,
Optionee understands that, in the view of the Securities and Exchange
Commission, the statutory basis for such exemption may be unavailable if
Optionee's representation was predicated solely upon a present intention to
hold these Securities for the minimum capital gains period specified under tax
statutes, for a deferred sale, for or until an increase or decrease in the
market price of the Securities, or for a period of one year or any other fixed
period in the future. Optionee further understands that the Securities must be
held indefinitely unless they are subsequently registered under the Securities
Act or an exemption from such registration is available. Optionee further
acknowledges and understands that the Company is under no obligation to
register the Securities. Optionee understands that the certificate evidencing
the Securities will be imprinted with a legend which prohibits the transfer of
the Securities unless they are registered or such registration is not required
in the opinion of counsel satisfactory to the Company, a legend prohibiting
their transfer without the consent of the Commissioner of Corporations of the
State of California and with any other legend required under applicable state
securities laws.
Optionee is familiar with the provisions of Rule 701 and Rule
144, each promulgated under the Securities Act, which, in substance, permit
limited public resale of "restricted securities" acquired, directly or
indirectly from the issuer thereof, in a non-public offering subject to the
satisfaction of certain conditions. Rule 701 provides that if the issuer
qualifies under Rule 701 at the time of the grant of the Option to the
Optionee, the exercise will be exempt from registration under the Securities
Act. In the event the Company becomes subject to the reporting requirements of
Section 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90) days
thereafter (or such longer period as any market stand-off agreement may
require) the Securities exempt under Rule 701 may be resold, subject to the
satisfaction of certain of the conditions specified by Rule 144, including: (1)
the resale being made through a broker in an unsolicited "broker's transaction"
or in transactions directly with a
<PAGE>
market maker (as said term is defined under the Securities Exchange Act of
1934); and, in the case of an affiliate, (2) the availability of certain public
information about the Company, (3) the amount of Securities being sold during
any three month period not exceeding the limitations specified in Rule 144(e),
and (4) the timely filing of a Form 144, if applicable.
In the event that the Company does not qualify under Rule 701
at the time of grant of the Option, then the Securities may be resold in
certain limited circumstances subject to the provisions of Rule 144, which
requires the resale to occur not less than one year after the later of the date
the Securities were sold by the Company or the date the Securities were sold by
an affiliate of the Company, within the meaning of Rule 144; and, in the case
of acquisition of the Securities by an affiliate, or by a non-affiliate who
subsequently holds the Securities less than two years, the satisfaction of the
conditions set forth in sections (1), (2), (3) and (4) of the paragraph
immediately above.
Optionee further understands that in the event all of the
applicable requirements of Rule 701 or 144 are not satisfied, registration
under the Securities Act, compliance with Regulation A, or some other
registration exemption will be required; and that, notwithstanding the fact
that Rules 144 and 701 are not exclusive, the Staff of the Securities and
Exchange Commission has expressed its opinion that persons proposing to sell
private placement securities other than in a registered offering and otherwise
than pursuant to Rules 144 or 701 will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers
or sales, and that such persons and their respective brokers who participate in
such transactions do so at their own risk. Optionee understands that no
assurances can be given that any such other registration exemption will be
available in such event.
Optionee understands that the certificate evidencing the
Securities will be imprinted with a legend that prohibits the transfer of the
Securities without the consent of the Commissioner of Corporations of
California. Optionee has read the applicable Commissioner's Rules with respect
to such restriction, a copy of which is attached.
Signature of Optionee:
________________________________
Date:___________________________
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<PAGE>
ATTACHMENT 1
STATE OF CALIFORNIA - CALIFORNIA ADMINISTRATIVE CODE
Title 10. Investment - Chapter 3. Commissioner of Corporations
260.141.11: RESTRICTION ON TRANSFER. (a) The issuer of any security upon
which a restriction on transfer has been imposed pursuant to Sections 260.102.6,
260.141.10 or 260.534 shall cause a copy of this section to be delivered to each
issuee or transferee of such security at the time the certificate evidencing the
security is delivered to the issuee or transferee.
(b) It is unlawful for the holder of any such security to consummate a
sale or transfer of such security, or any interest therein,
without the prior written consent of the Commissioner (until this
condition is removed pursuant to Section 260.141.12 of these
rules), except:
to the issuer;
pursuant to the order or process of any court;
to any person described in Subdivision (i) of Section 25102 of
the Code or Section 260.105.14 of these rules;
to the transferor's ancestors, descendants or spouse, or any
custodian or trustee for the account of the transferor or the transferor's
ancestors, descendants, or spouse; or to a transferee by a trustee or
custodian for the account of the transferee or the transferee's ancestors,
descendants or spouse;
to holders of securities of the same class of the same issuer;
by way of gift or donation inter vivos or on death;
by or through a broker-dealer licensed under the Code (either
acting as such or as a finder) to a resident of a foreign state, territory
or country who is neither domiciled in this state to the knowledge of the
broker-dealer, nor actually present in this state if the sale of such
securities is not in violation of any securities law of the foreign state,
territory or country concerned;
to a broker-dealer licensed under the Code in a principal
transaction, or as an underwriter or member of an underwriting syndicate
or selling group;
if the interest sold or transferred is a pledge or other lien
given by the purchaser to the seller upon a sale of the security for which
the Commissioner's written consent is obtained or under this rule not
required;
by way of a sale qualified under Sections 25111, 25112, 25113
or 25121 of the Code, of the securities to be transferred, provided that no
order under Section 25140 or subdivision (a) of Section 25143 is in effect
with respect to such qualification;
by a corporation to a wholly owned subsidiary of such
corporation, or by a wholly owned subsidiary of a corporation to such
corporation;
by way of an exchange qualified under Section 25111, 25112 or
25113 of the Code, provided that no order under Section 25140 or
subdivision (a) of Section 25143 is in effect with respect to such
qualification;
between residents of foreign states, territories or countries
who are neither domiciled nor actually present in this state;
to the State Controller pursuant to the Unclaimed Property Law
or to the administrator of the unclaimed property law of another state; or
by the State Controller pursuant to the Unclaimed Property Law
or by the administrator of the unclaimed property law of another state if,
in either such case, such person (i) discloses to potential purchasers at
the sale that transfer of the securities is restricted under this rule,
(ii) delivers to each purchaser a copy of this rule, and (iii) advises the
Commissioner of the name of each purchaser;
by a trustee to a successor trustee when such transfer does
not involve a change in the beneficial ownership of the securities;
by way of an offer and sale of outstanding securities in an
issuer transaction that is subject to the qualification requirement of
Section 25110 of the Code but exempt from that qualification requirement by
subdivision (f) of Section 25102; provided that any such transfer is on the
condition that any certificate evidencing the security issued to such
transferee shall contain the legend required by this section.
(c) The certificates representing all such securities subject to such
a restriction on transfer, whether upon initial issuance or upon
any transfer thereof, shall bear on their face a legend,
prominently stamped or printed thereon in capital letters of not
less than 10-point size, reading as follows:
"IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR
ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT
THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE
STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.
<PAGE>
EXHIBIT C-1
THE CENTER FOR ADAPTIVE SYSTEMS APPLICATIONS, INC.
1995 STOCK PLAN
RESTRICTED STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made between Jerry Y. Wind (the "Purchaser") and The
Center for Adaptive Systems Applications, Inc. (the "Company") as of September
___, 1999.
Unless otherwise defined herein, the terms defined in the 1995 Stock
Plan shall have the same defined meanings in this Agreement.
RECITALS
A. Pursuant to the exercise of the option (grant number ____)
granted to Purchaser under the Plan and pursuant to the Option Agreement dated
_______________, ____ by and between the Company and Purchaser with respect to
such grant (the "Option"), which Plan and Option Agreement are hereby
incorporated by reference, Purchaser has elected to purchase _________ of those
shares of Common Stock which have not become vested under the vesting schedule
set forth in the Option Agreement ("Unvested Shares"). The Unvested Shares and
the shares subject to the Option Agreement which have become vested are
sometimes collectively referred to herein as the "Shares".
B. As required by the Option Agreement, as a condition to
Purchaser's election to exercise the option, Purchaser must execute this
Agreement, which sets forth the rights and obligations of the parties with
respect to Shares acquired upon exercise of the Option.
REPURCHASE OPTION.
If Purchaser's status as a Service Provider is terminated for
any reason, including for cause, death, and Disability, the Company shall have
the right and option to purchase from Purchaser, or Purchaser's personal
representative, as the case may be, all of the Purchaser's Unvested Shares as
of the date of such termination at the price paid by the Purchaser for such
Shares (the "Repurchase Option").
Upon the occurrence of such termination, the Company may
exercise its Repurchase Option by delivering personally or by registered mail,
to Purchaser (or his transferee or legal representative, as the case may be),
within ninety (90) days of the termination, a notice in writing indicating the
Company's intention to exercise the Repurchase Option and setting forth a date
for closing not later than thirty (30) days from the mailing of such notice.
The closing shall take place at the Company's office. At the closing, the
holder of the certificates for the Unvested Shares being transferred shall
deliver the stock certificate or certificates evidencing the Unvested Shares,
and the Company shall deliver the purchase price therefor.
<PAGE>
At its option, the Company may elect to make payment for the
Unvested Shares to a bank selected by the Company. The Company shall avail
itself of this option by a notice in writing to Purchaser stating the name and
address of the bank, date of closing, and waiving the closing at the Company's
office.
If the Company does not elect to exercise the Repurchase Option
conferred above by giving the requisite notice within ninety (90) days
following the termination, the Repurchase Option shall terminate.
The Repurchase Option shall terminate in accordance with the
vesting schedule contained in Optionee's Option Agreement.
TRANSFERABILITY OF THE SHARES; ESCROW.
Purchaser hereby authorizes and directs the Secretary of the
Company, or such other person designated by the Company, to transfer the
Unvested Shares as to which the Repurchase Option has been exercised from
Purchaser to the Company.
To insure the availability for delivery of Purchaser's Unvested
Shares upon repurchase by the Company pursuant to the Repurchase Option under
Section 1, Purchaser hereby appoints the Secretary, or any other person
designated by the Company as escrow agent, as its attorney-in-fact to sell,
assign and transfer unto the Company, such Unvested Shares, if any, repurchased
by the Company pursuant to the Repurchase Option and shall, upon execution of
this Agreement, deliver and deposit with the Secretary of the Company, or such
other person designated by the Company, the share certificates representing the
Unvested Shares, together with the stock assignment duly endorsed in blank,
attached hereto as EXHIBIT C-2. The Unvested Shares and stock assignment shall
be held by the secretary in escrow, pursuant to the Joint Escrow Instructions
of the Company and Purchaser attached as EXHIBIT C-3 hereto, until the Company
exercises its Repurchase Option, until such Unvested Shares are vested, or
until such time as this Agreement no longer is in effect. As a further
condition to the Company's obligations under this Agreement, the spouse of the
Purchaser, if any, shall execute and deliver to the Company the Consent of
Spouse attached hereto as EXHIBIT C-4. Upon vesting of the Unvested Shares, the
escrow agent shall promptly deliver to the Purchaser the certificate or
certificates representing such Shares in the escrow agent's possession
belonging to the Purchaser, and the escrow agent shall be discharged of all
further obligations hereunder; provided, however, that the escrow agent shall
nevertheless retain such certificate or certificates as escrow agent if so
required pursuant to other restrictions imposed pursuant to this Agreement.
The Company, or its designee, shall not be liable for any act
it may do or omit to do with respect to holding the Shares in escrow and while
acting in good faith and in the exercise of its judgment.
Transfer or sale of the Shares is subject to restrictions on
transfer imposed by any applicable state and federal securities laws. Any
transferee shall hold such Shares subject to all the provisions hereof and the
Exercise Notice executed by the Purchaser with respect to any Unvested Shares
purchased by Purchaser and shall acknowledge the same by signing a copy of this
Agreement.
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<PAGE>
OWNERSHIP, VOTING RIGHTS, DUTIES. This Agreement shall not
affect in any way the ownership, voting rights or other rights or duties of
Purchaser, except as specifically provided herein.
LEGENDS. The share certificate evidencing the Shares issued
hereunder shall be endorsed with the following legend (in addition to any legend
required under applicable federal and state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS UPON TRANSFER AND RIGHTS OF REPURCHASE AS
SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE
STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY.
ADJUSTMENT FOR STOCK SPLIT. All references to the number of
Shares and the purchase price of the Shares in this Agreement shall be
appropriately adjusted to reflect any stock split, stock dividend or other
change in the Shares which may be made by the Company pursuant to Section 12 of
the Plan after the date of this Agreement.
NOTICES. Notices required hereunder shall be given in person
or by registered mail to the address of Purchaser shown on the records of the
Company, and to the Company at their respective principal executive offices.
SURVIVAL OF TERMS. This Agreement shall apply to and bind
Purchaser and the Company and their respective permitted assignees and
transferees, heirs, legatees, executors, administrators and legal successors.
SECTION 83(b) ELECTION. Purchaser hereby acknowledges that he
or she has been informed that, with respect to the exercise of an Option for
Unvested Shares, an election (the "Election") may be filed by the Purchaser with
the Internal Revenue Service, within 30 days of the purchase of the exercised
Shares, electing pursuant to Section 83(b) of the Code to be taxed currently on
any difference between the purchase price of the exercised Shares and their Fair
Market Value on the date of purchase. In the case of a Nonstatutory Stock
Option, this will result in a recognition of taxable income to the Purchaser on
the date of exercise, measured by the excess, if any, of the Fair Market Value
of the exercised Shares, at the time the Option is exercised over the purchase
price for the exercised Shares. Absent such an Election, taxable income will be
measured and recognized by Purchaser at the time or times on which the Company's
Repurchase Option lapses. In the case of an Incentive Stock Option, such an
Election will result in a recognition of income to the Purchaser for alternative
minimum tax purposes on the date of exercise, measured by the excess, if any, of
the Fair Market Value of the exercised Shares, at the time the option is
exercised, over the purchase price for the exercised Shares. Absent such an
Election, alternative minimum taxable income will be measured and recognized by
Purchaser at the time or times on which the Company's Repurchase Option lapses.
Purchaser is strongly encouraged to seek the advice of his or her own tax
consultants in connection with the purchase of the Shares and the advisability
of filing of the Election under Section 83(b) of the Code. A form of Election
under Section 83(b) is attached hereto as Exhibit C-5 for reference.
-3-
<PAGE>
PURCHASER ACKNOWLEDGES THAT IT IS PURCHASER'S SOLE
RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION
83(b) OF THE CODE, EVEN IF PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVE
TO MAKE THIS FILING ON PURCHASER'S BEHALF.
REPRESENTATIONS. Purchaser has reviewed with his own tax
advisors the federal, state, local and foreign tax consequences of this
investment and the transactions contemplated by this Agreement. Purchaser is
relying solely on such advisors and not on any statements or representations of
the Company or any of its agents. Purchaser understands that he (and not the
Company) shall be responsible for his own tax liability that may arise as a
result of this investment or the transactions contemplated by this Agreement.
GOVERNING LAW. This Agreement shall be governed by the
internal substantive laws, but not the choice of law rules, of California.
Purchaser represents that he has read this Agreement and is familiar
with its terms and provisions. Purchaser hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Board upon any
questions arising under this Agreement.
-4-
<PAGE>
IN WITNESS WHEREOF, this Agreement is deemed made as of the date first
set forth above.
OPTIONEE THE CENTER FOR ADAPTIVE SYSTEMS
APPLICATIONS, INC.
- --------------------------------- ---------------------------------
Signature By
- --------------------------------- ---------------------------------
Print Name Title
- ---------------------------------
- ---------------------------------
Residence Address
Dated: ,
------------------------- -------
-5-
<PAGE>
EXHIBIT C-2
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED I, __________________________, hereby sell, assign
and transfer unto The Center for Adaptive Systems Applications, Inc.
_____________________ (__________) shares of the Common Stock of The Center for
Adaptive Systems Applications, Inc. standing in my name of the books of said
corporation represented by Certificate No. _____ herewith and do hereby
irrevocably constitute and appoint _______________ to transfer the said stock on
the books of the within named corporation with full power of substitution in the
premises.
This Stock Assignment may be used only in accordance with the
Restricted Stock Purchase Agreement between The Center for Adaptive Systems
Applications, Inc. and the undersigned dated ______________, _____.
Dated: _______________,____ Signature:______________________________
INSTRUCTIONS: Please do not fill in any blanks other than the signature line.
The purpose of this assignment is to enable the Company to exercise its
"repurchase option," as set forth in the Agreement, without requiring additional
signatures on the part of the Purchaser.
<PAGE>
EXHIBIT C-3
JOINT ESCROW INSTRUCTIONS
_________________, ____
Corporate Secretary
The Center for Adaptive Systems Applications, Inc.
1911 Central Avenue
Los Alamos, NM 87544-3023
Dear _________________:
As Escrow Agent for both The Center for Adaptive Systems Applications,
Inc. (the "Company"), and the undersigned purchaser of stock of the Company (the
"Purchaser"), you are hereby authorized and directed to hold the documents
delivered to you pursuant to the terms of that certain Restricted Stock Purchase
Agreement (the "Agreement") between the Company and the undersigned, in
accordance with the following instructions:
1. In the event the Company and/or any assignee of the Company
(referred to collectively for convenience herein as the "Company") exercises the
Company's repurchase option set forth in the Agreement, the Company shall give
to Purchaser and you a written notice specifying the number of shares of stock
to be purchased, the purchase price, and the time for a closing hereunder at the
principal office of the Company. Purchaser and the Company hereby irrevocably
authorize and direct you to close the transaction contemplated by such notice in
accordance with the terms of said notice.
2. At the closing, you are directed (a) to date the stock assignments
necessary for the transfer in question, (b) to fill in the number of shares
being transferred, and (c) to deliver the stock assignments, together with the
certificate evidencing the shares of stock to be transferred, to the Company or
its assignee, against the simultaneous delivery to you of the purchase price (by
cash, a check, or some combination thereof) for the number of shares of stock
being purchased pursuant to the exercise of the Company's repurchase option.
3. Purchaser irrevocably authorizes the Company to deposit with you any
certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as defined in the Agreement.
Purchaser does hereby irrevocably constitute and appoint you as Purchaser's
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities all documents necessary or appropriate to make such
securities negotiable and to complete any transaction herein contemplated,
including but not limited to the filing with any applicable state blue sky
authority of any required applications for consent to, or notice of transfer of,
the securities. Subject to the provisions of this paragraph 3, Purchaser shall
exercise all rights and privileges of a stockholder of the Company while the
stock is held by you.
4. Upon written request of the Purchaser, but no more than once per
calendar year, unless the Company's repurchase option has been exercised, you
will deliver to Purchaser a certificate or certificates representing so many
shares of stock as are not then subject to the Company's repurchase option.
Within 120 days after cessation of Purchaser's continuous employment by or
services to the Company, or any parent or subsidiary of the Company, you will
deliver to Purchaser a certificate or
<PAGE>
certificates representing the aggregate number of shares held or issued
pursuant to the Agreement and not purchased by the Company or its assignees
pursuant to exercise of the Company's repurchase option.
5. If at the time of termination of this escrow you should have in your
possession any documents, securities, or other property belonging to Purchaser,
you shall deliver all of the same to Purchaser and shall be discharged of all
further obligations hereunder.
6. Your duties hereunder may be altered, amended, modified or revoked
only by a writing signed by all of the parties hereto.
7. You shall be obligated only for the performance of such duties as
are specifically set forth herein and may rely and shall be protected in relying
or refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties. You
shall not be personally liable for any act you may do or omit to do hereunder as
Escrow Agent or as attorney-in-fact for Purchaser while acting in good faith,
and any act done or omitted by you pursuant to the advice of your own attorneys
shall be conclusive evidence of such good faith.
8. You are hereby expressly authorized to disregard any and all
warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law and are hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case you obey or comply with any such order, judgment or decree, you
shall not be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such compliance, notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.
9. You shall not be liable in any respect on account of the identity,
authorities or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or called
for hereunder.
10. You shall not be liable for the outlawing of any rights under the
Statute of Limitations with respect to these Joint Escrow Instructions or any
documents deposited with you.
11. You shall be entitled to employ such legal counsel and other
experts as you may deem necessary properly to advise you in connection with your
obligations hereunder, may rely upon the advice of such counsel, and may pay
such counsel reasonable compensation therefor.
12. Your responsibilities as Escrow Agent hereunder shall terminate if
you shall cease to be an officer or agent of the Company or if you shall resign
by written notice to each party. In the event of any such termination, the
Company shall appoint a successor Escrow Agent.
13. If you reasonably require other or further instruments in
connection with these Joint Escrow Instructions or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.
-2-
<PAGE>
14. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the
securities held by you hereunder, you are authorized and directed to retain in
your possession without liability to anyone all or any part of said securities
until such disputes shall have been settled either by mutual written agreement
of the parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.
15. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail with
postage and fees prepaid, addressed to each of the other parties thereunto
entitled at the following addresses or at such other addresses as a party may
designate by ten days' advance written notice to each of the other parties
hereto.
16. By signing these Joint Escrow Instructions, you become a party
hereto only for the purpose of said Joint Escrow Instructions; you do not become
a party to the Agreement.
17. This instrument shall be binding upon and inure to the benefit of
the parties hereto, and their respective successors and permitted assigns.
-3-
<PAGE>
18. These Joint Escrow Instructions shall be governed by the internal
substantive laws, but not the choice of law rules, of California.
PURCHASER THE CENTER FOR ADAPTIVE SYSTEMS
APPLICATIONS, INC.
- -------------------------------------- -----------------------------------
Signature By
- -------------------------------------- -----------------------------------
Print Name Title
- --------------------------------------
- --------------------------------------
Residence Address
ESCROW AGENT
- --------------------------------------
Corporate Secretary
Dated: ________________________,_____
-4-
<PAGE>
EXHIBIT C-4
CONSENT OF SPOUSE
I, ____________________, spouse of ___________________, have read and
approve the foregoing Restricted Stock Purchase Agreement (the "Agreement"). In
consideration of granting of the right to my spouse to purchase shares of
____________________________, as set forth in the Agreement, I hereby appoint my
spouse as my attorney-in-fact in respect to the exercise of any rights under the
Agreement and agree to be bound by the provisions of the Agreement insofar as I
may have any rights in said Agreement or any shares issued pursuant thereto
under the community property laws or similar laws relating to marital property
in effect in the state of our residence as of the date of the signing of the
foregoing Agreement.
Dated: ___________________,_____ Signature:
EXHIBIT C-5
ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE OF 1986
The undersigned taxpayer hereby elects, pursuant to Sections 55 and 83(b) of the
Internal Revenue Code of 1986, as amended, to include in taxpayer's gross income
or alternative minimum taxable income, as the case may be, for the current
taxable year the amount of any compensation taxable to taxpayer in connection
with taxpayer's receipt of the property described below:
1. The name, address, taxpayer identification number and taxable year
of the undersigned are as follows:
NAME: TAXPAYER: SPOUSE:
ADDRESS:
IDENTIFICATION NO.: TAXPAYER: SPOUSE:
TAXABLE YEAR:
2. The property with respect to which the election is made is described
as follows: __________ shares (the "Shares") of the Common Stock of The Center
for Adaptive Systems Applications, Inc. (the "Company").
3. The date on which the property was transferred
is:___________________ ,______.
4. The property is subject to the following restrictions:
The Shares may not be transferred and are subject to forfeiture under
the terms of an agreement between the taxpayer and the Company. These
restrictions lapse upon the satisfaction of certain conditions
contained in such agreement.
5. The fair market value at the time of transfer, determined without
regard to any restriction other than a restriction which by its terms will never
lapse, of such property is: $_________________.
6. The amount (if any) paid for such property is: $_________________.
<PAGE>
The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.
THE UNDERSIGNED UNDERSTANDS THAT THE FOREGOING ELECTION MAY NOT BE REVOKED
EXCEPT WITH THE CONSENT OF THE COMMISSIONER.
Dated: ______________________, _____
_________________________________________
Taxpayer
The undersigned spouse of taxpayer joins in this election.
Dated: _____________________, ______
_________________________________________
Spouse of Taxpayer
<PAGE>
EXHIBIT 5.01
March 31, 2000
HNC Software Inc.
5935 Cornerstone Court West
San Diego, CA 92121-3728
Gentlemen/Ladies:
At your request, we have examined the Registration Statement on Form
S-8 (the "REGISTRATION STATEMENT") to be filed by you with the Securities and
Exchange Commission (the "COMMISSION") on or about April 4, 2000, in
connection with the registration under the Securities Act of 1933, as
amended, of an aggregate of 110,854 shares of your Common Stock, $0.001 par
value (the "SHARES"), that are subject to issuance by you upon the exercise
of stock options (collectively, the "ASSUMED OPTIONS") assumed by you under
(a) the Advanced Information Management Solutions, Inc. Stock Option Plan, as
amended (the "AIM PLAN"); (b) the ONYX Technologies, Inc. 1999 Stock Plan, as
amended (the "ONYX PLAN"); and (c) The Center for Adaptive Systems
Applications, Inc. 1995 Stock Plan, as amended (the "CASA PLAN"). The AIM
Plan, the ONYX Plan and the CASA Plan are (collectively referred to herein as
the "ASSUMED PLANS" and each as an "ASSUMED PLAN.")
In rendering this opinion, we have examined the following:
(1) your registration statement on Form S-1 (Registration Number
33-91932) filed with and declared effective by the Commission
on June 20, 1995, together with the Exhibits filed as a part
thereof;
(2) your registration statement on Form 8-A filed with the
Commission on May 26, 1995, together with the order of
effectiveness issued by the Commission therefor on June 20,
1995;
(3) the Registration Statement, together with the exhibits filed
as a part thereof, including without limitation the AIM Plan,
the Onyx Plan, the CASA Plan, the forms of stock option
agreements and stock option exercise agreements used under the
AIM Plan, the Onyx Plan and the CASA Plan that are attached as
exhibits to the Registration Statement (collectively, the
"ASSUMED OPTION AGREEMENTS"), which you have represented to us
constitute the plans and agreements that apply to the Assumed
Options;
(4) the prospectus prepared in connection with the Registration
Statement;
(5) the minutes of meetings and actions by written consent of the
stockholders and Board of Directors that are contained in your
minute books that are in our possession;
(6) the stock records that you have provided to us (consisting of
a certificate from your transfer agent of even date herewith
verifying the number of your issued and outstanding shares of
capital stock and a list of option and warrant holders
respecting your capital stock and of any rights to purchase
capital stock that was prepared by you, verifying the number
of such issued and outstanding securities);
(7) the management certificates you delivered to us in connection
with your acquisition of Advanced Information Management
Solutions, Inc., ONYX Technologies, Inc. and The Center for
Adaptive Systems Applications, Inc., addressed to us, dated
February 24, 2000, March 21, 2000 and March 17, 2000,
respectively, and the management certificate of even date
herewith, each of which has been executed by you and
contains certain representations; and
(8) your Restated Certificate of Incorporation and Bylaws, both
included as exhibits to the Registration Statement.
In our examination of documents for purposes of this opinion, we
have assumed, and express no opinion as to, the genuineness of all signatures
on original documents, the authenticity and completeness of all documents
submitted to us as
<PAGE>
originals, the conformity to originals and completeness of all documents
submitted to us as copies, the legal capacity of all natural persons
executing the same, the lack of any undisclosed termination, modification,
waiver or amendment to any document reviewed by us and the due execution and
delivery of all documents where due execution and delivery are prerequisites
to the effectiveness thereof.
As to matters of fact relevant to this opinion, we have relied solely
upon our examination of the documents referred to above and have assumed the
current accuracy and completeness of the information obtained from records
referred to above. We have made no independent investigation or other attempt to
verify the accuracy of any of such information or to determine the existence or
non-existence of any other factual matters; HOWEVER, we are not aware of any
facts that would cause us to believe that the opinion expressed herein is not
accurate.
We are admitted to practice law in the State of California, and we
express no opinion herein with respect to the effect of the laws of any
jurisdiction other than the existing laws of the United States of America, the
State of California and, with respect to the validity of your corporate
actions and the requirements for the issuance of stock, the State of Delaware.
Based upon the foregoing, it is our opinion that the Shares that may be
issued and sold by you upon the exercise of the Assumed Options, when issued and
sold in accordance with the applicable Assumed Plan and the applicable Assumed
Option Agreement, will be 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 all references to us, if any, in the
Registration Statement, the prospectus constituting a part thereof and any
amendments thereto.
This opinion speaks only as of its date and we assume no obligation to
update this opinion should circumstances change after the date hereof.
Very truly yours,
/s/ FENWICK & WEST LLP
FENWICK & WEST LLP
<PAGE>
EXHIBIT 23.02
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 26, 2000, except as to Note
17, to which the date is March 17, 2000 relating to the financial statements of
HNC Software Inc., which appear in HNC Software Inc.'s Annual Report on Form
10-K for the year ended December 31, 1999.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
San Diego, California
March 31, 2000
<PAGE>
EXHIBIT 23.03
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 25, 2000 relating to the
financial statements of Retek Inc., which appear in HNC Software Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1999.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Minneapolis, Minnesota
March 31, 2000
