As Filed with the Securities and Exchange Commission on September 2, 1997
Registration No. 333-_______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
____________________
USCS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-1727009
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2969 Prospect Park Drive
Rancho Cordova, California 95670
(Address of Principal Executive Offices) (zip code)
USCS INTERNATIONAL, INC. AMENDED AND RESTATED 1988 STOCK OPTION PLAN
USCS INTERNATIONAL, INC. AMENDED AND RESTATED 1990 STOCK OPTION PLAN
USCS INTERNATIONAL, INC. AMENDED AND RESTATED 1993 STOCK OPTION PLAN
(Full Title of the Plans)
MARY G. JORDAN, ESQ.
Vice President, General Counsel and Secretary
USCS INTERNATIONAL, INC.
2969 Prospect Park Drive
Rancho Cordova, California 95670-6184
916-636-4500
(Name, address and telephone number of agent for service)
With a copy to:
GILLES S. ATTIA, ESQ.
Graham & James LLP
400 Capitol Mall, Suite 2400
Sacramento, California 95814
(916) 558-6700
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Title of securities to Amount to be Proposed maxi- Proposed maxi- Amount of
be registered registered mum offering price mum aggregate registration fee
per share(1) offering price(1)
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- --------------------------------------------------------------------------------
Common Stock, Shares
par value $0.05
Pursuant to
1988 Stock Option
Plan . . . . . . . 351,171 $17.125 $6,013,803.38 $1,822.36
Pursuant to
1990 Stock Option
Plan . . . . . . . 239,006 $17.125 $4,092,977.75 $1,240.30
Pursuant to
1993 Stock Option
Plan . . . . . . . 896,479 $17.125 $15,352,202.88 $4,652.18
Total. . . . . . . 1,486,656 $17.125 $25,458,984.00 $7,714.85
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h) and Rule 457(c) under the Securities Act of 1933
based on average of the high and low prices of a share of Common Stock of
the Company reported for trading on the Nasdaq National Market System on
August 27, 1997.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in Part I of Form S-8
have been or will be sent or given to participant employees as specified by Rule
428(b)(1) under the Securities Act of 1933 (the "Act"). These documents and the
documents incorporated by reference into this Registration Statement, taken
together, constitute a prospectus that meets the requirements of Section 10(a)
of the Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents which have heretofore been filed by USCS
International, Inc. (the "Registrant") with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Exchange Act of 1934,
as amended (the "1934 Act"), are incorporated by reference herein and shall be
deemed to be a part hereof:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996 and filed with the Commission on March 28, 1997 (the
"Annual Report");
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Act since the end of the fiscal year covered by the Annual Report;
2
(c) The description of Common Stock contained in the Registrant's
Registration Statement on Form 8-A filed with the Commission on June
18, 1996, by which the shares of Common Stock of the Company were
registered under Section 12 of the 1934 Act.
All documents subsequently filed by the Registrant with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment to this Registration Statement 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 in this Registration Statement and made a part hereof from the date of
filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Certain attorneys of Graham & James LLP, counsel to the Registrant, own an
aggregate of 5,595 shares of the Registrant's Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's Board of Directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the 1933 Act.
The Company's Second Amended and Restated Certificate of Incorporation (the
"Certificate of Incorporation") and Bylaws provide for expanded indemnification
of directors and officers of the Company and limit the liability of directors of
the Company. The Bylaws provide that the Company shall indemnify each person
who is or was an officer or director of the Company, or is or was serving as an
officer, director, employee or agent of any other corporation, partnership,
joint venture, trust or other enterprise at the request of the Company, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement (if such settlement is approved in advance by the Company, which
approval shall not be unreasonably withheld) actually and reasonably incurred by
him or her in connection with such action, suit or proceeding if he or she acted
in good faith and in a manner he or she believed to be in or not opposed to the
best interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
Such right to indemnification includes the right to advancement of expenses
incurred by such person prior to final disposition of the proceeding, provided
that such director or officer shall provide the Company with an undertaking to
repay all amounts so advanced if it shall ultimately be determined by final
judicial decision that such person is not entitled to be indemnified for such
expenses. The Bylaws also provide that the Company shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the Company to procure
a judgment in its favor by reason of the fact that he or she is or was a
director, officer, employee or agent of the Company, or is or was serving at the
request of the company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him or
her in connection with the defense or settlement of such action or suit, if he
or she acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the Company, except that no
indemnification shall be made in respect to any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Company unless
and only to the extent that the Delaware Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Delaware Court of Chancery or such other court shall deem proper. No
person shall be indemnified by the Court for any expenses or amounts paid in
settlement with respect to any action to recover short-swing profits under
Section 16(b) of the Securities
3
Exchange Act of 1934, as amended. The Certificate of Incorporation provides
that if the Delaware General Corporation Law is amended to further eliminate or
limit the personal liability of directors, then the liability of a director of
the Company shall be eliminated or limited to the fullest extent permitted by
the Delaware General Corporation Law, as so amended. The Company has also
entered into agreements to indemnify its officers and directors in addition to
the indemnification provided for in the Company's Bylaws.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The following exhibits are filed with this Registration Statement.
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
4.1 Second Amended and Restated Certificate of Incorporation of
the Registrant, dated April 10, 1996*
4.2 Shareholder Rights Agreement dated December 30, 1988 among
U.S. Computer Services, Westar Capital and Enterprise
Partners**
4.3 Stockholder Rights Plan between the Company and Trustee**
4.4 Certificate of Designation of Rights Preferences and
Privileges of Series A Stock**
4.5 Bylaws of the Registrant**
4.6 Amended and Restated 1988 Stock Option Plan
4.7 Amended and Restated 1990 Stock Option Plan
4.8 Amended and Restated 1993 Stock Option Plan
5.1 Opinion of Graham & James LLP regarding legality of the
shares of Common Stock
23.1 Consent of Graham & James LLP (incorporated by reference to
Exhibit 5.1 hereof)
23.2 Consent of Price Waterhouse LLP
24.1 Power of Attorney (see page II-6)
- ------------------------------
* Incorporated by reference to Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996, filed with the Securities and
Exchange Commission on March 28, 1997.
** Incorporated by reference to Registrant's Registration Statement on
Form S-1, Registration No. 333-3842, filed pursuant to Section 5 of the
Securities Act of 1933, as amended.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes 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 of 1933;
(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 the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement.
4
Notwithstanding the foregoing, any increase or decrease in 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 or 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 a 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) do not apply if the
registration statement is on Form S-3 or Form S-8 and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(b) The undersigned Registrant hereby undertakes that, for the purpose of
determining any liability under the Securities Act of 1933, 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 to be the initial bona fide offering.
(c) The undersigned Registrant hereby undertakes 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.
(d) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) 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.
(e) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the Delaware Corporation Law, the Second
Amended and Restated Certificate of Incorporation of the registrant, the Bylaws
of Registrant and the indemnification agreements described above in Item 6,
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Registrant of expenses
incurred or paid by a director, officer or controlling person of 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, 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 of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Rancho Cordova, County of Sacramento, State of
California, on the 29th day of August, 1997.
USCS INTERNATIONAL, INC.
By: /Mary G. Jordan/
--------------------------------
Mary G. Jordan
Vice President, General Counsel and
Secretary
POWER OF ATTORNEY
for Form S-8 for 1988 Stock Option Plan, 1990 Stock Option Plan and 1993 Stock
Option Plan
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Mary G. Jordan and Douglas L.
Shurtleff, and each of them, his true and lawful attorneys-in-fact and agents,
each with full power of substitution, each with power to act alone, to sign and
execute on behalf of the undersigned any amendment or amendments to this
Registration Statement and to perform any acts necessary in order to file the
same, with exhibits thereto and other documents in connection therewith, with
the Securities and Exchange Commission; and each of the undersigned does hereby
ratify and confirm all that said attorneys-in-fact and agents, or their or his
substitutes, shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates stated.
Dated: July 30, 1997 / James C. Castle/
-----------------------------------
James C. Castle
Chief Executive Officer and Chairman of the Board
of Directors
(Principal Executive Officer)
Dated: July 30, 1997 / George L. Argyros, Sr./
-----------------------------------
George L. Argyros, Sr.
Director
Dated: July 30, 1997 / George M. Crandell, Jr./
-----------------------------------
George M. Crandell, Jr.
Director
Dated: July 30, 1997 / Charles D. Martin/
-----------------------------------
Charles D. Martin
Director
Dated: July 30, 1997 / Michael F. McGrail/
-----------------------------------
Michael F. McGrail
Director
-AND-
Dated: July 30, 1997 / Larry W. Wangberg/
-----------------------------------
Larry W. Wangberg
Director
6
Dated: July 30, 1997 / Douglas L. Shurtleff/
Douglas L. Shurtleff
Senior Vice-President of Finance and
Chief Financial Officer (Principal Financial
Officer)
Dated: July 30, 1997 / Zaida A. Klein/
Zaida A. Klein
Chief Accounting Officer and Controller
(Principal Accounting Officer)
7
INDEX TO EXHIBITS
Number Description of Exhibit
- ------ ----------------------
4.1 Second Amended and Restated Certificate of Incorporation of the
Registrant, dated April 10, 1996*
4.2 Shareholder Rights Agreement dated December 30, 1988 among U.S.
Computer Services, Westar Capital and Enterprise Partners**
4.3 Stockholder Rights Plan between the Company and Trustee**
4.4 Certificate of Designation of Rights Preferences and Privileges of
Series A Stock**
4.5 Bylaws of the Registrant**
4.6 Amended and Restated 1988 Stock Option Plan
4.7 Amended and Restated 1990 Stock Option Plan
4.8 Amended and Restated 1993 Stock Option Plan
5.1 Opinion of Graham & James LLP regarding legality of the shares of
Common Stock
23.1 Consent of Graham & James LLP (incorporated by reference to
Exhibit 5.1 hereof)
23.2 Consent of Price Waterhouse LLP
24.1 Power of Attorney (see page II-6)
- ------------------------------
* Incorporated by reference to Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996, filed with the Securities and
Exchange Commission on March 28, 1997.
** Incorporated by reference to Registrant's Registration Statement on
Form S-1, Registration No. 333-3842, filed pursuant to Section 5 of the
Securities Act of 1933, as amended.
8
1. PURPOSES OF THE PLAN.
This 1988 Stock Option Plan is designed to enable executives and other
key managers of USCS International, Inc., a Delaware corporation, and its
wholly-owned Subsidiaries to acquire or increase a proprietary interest in
the Company and thus to share in the future success of the Company's
business. The Plan is intended as a further means of attracting and
retaining outstanding management personnel. Since the executives and
managers eligible to receive Options under the Plan will be those who are
in positions to make important and direct contributions to the success of
the Company, the directors believe that the grant of Options under the Plan
will be in the Company's interest. Options granted hereunder may be either
Incentive Stock Options or Nonstatutory Stock Options at the discretion of
the Committee.
2. DEFINITIONS.
As used herein, and in any Option granted hereunder, the following
definitions shall apply:
(a) "BOARD" shall mean the Board of Directors of the Company.
(b) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
(c) "COMMON STOCK" shall mean the Common Stock of the Company.
(d) "COMPANY" shall mean USCS International, Inc., a Delaware corporation.
(e) "COMMITTEE" shall mean the Committee appointed by the Board in
accordance with paragraph (a) of Section 4 of the Plan. If the Board
does not appoint or ceases to maintain a Committee, the term
"Committee" shall refer to the Board.
(f) "CONTINUOUS EMPLOYMENT" shall mean the absence of any interruption or
termination of service as an Employee or Non-Employee Director by the
Company or any Subsidiary. Continuous Employment shall not be
considered interrupted during any period of sick leave, military leave
or any other leave of absence approved by the Board or in the case of
transfers between locations of the Company or between the Company and
any Parent, Subsidiary or successor of the Company.
(g) "DISINTERESTED PERSON" shall mean a person who has not at any time
within one year prior to service as a member of the Committee (or
during such service) been granted or awarded Options or other equity
securities pursuant to the Plan or any other plan of the Company or
any Parent or Subsidiary. Notwithstanding the foregoing, a member of
the Committee shall not fail to be a Disinterested Person merely
because he or she participates in a plan meeting the requirements of
Rule 16b-3(c)(2)(i)(A) or (B) promulgated under the Exchange Act.
(h) "EMPLOYEE" shall mean any person, including officers (whether or not
they are directors), employed by the Company or any Subsidiary.
(i) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
(j) "INCENTIVE STOCK OPTION" shall mean any option granted under this Plan
and any other option granted to an Employee in accordance with the
provisions of Section 422 of the Code, and the regulations promulgated
thereunder.
(k) "NONSTATUTORY STOCK OPTION" shall mean an Option granted under the
Plan that is subject to the provisions of Section 1.83-7 of the
Treasury Regulations promulgated under Section 83 of the Code.
(l) "OPTION" shall mean a stock option granted pursuant to the Plan.
(m) "OPTION AGREEMENT" shall mean a written agreement between the Company
and the Optionee regarding the grant and exercise of Options to
purchase Shares and the terms and conditions thereof as determined by
the Committee pursuant to the Plan.
(n) "OPTIONED SHARES" shall mean the Common Stock subject to an Option.
(o) "OPTIONEE" shall mean an Employee, Non-Employee Director or
Consultant who receives an Option.
(p) "PARENT" shall mean a "parent corporation," whether now or hereafter
existing, as defined by Section 424(e) of the Code.
(q) "PLAN" shall mean this 1988 Stock Option Plan.
(r) "REGISTRATION DATE" shall mean June 21, 1996, the effective date of
the first registration statement filed by the Company pursuant to
Section 12(g) of the Exchange Act with respect to any class of the
Company's equity securities.
(s) "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
(t) "SHARE" shall mean a share of the Common Stock subject to an Option,
as adjusted in accordance with Section 11 of the Plan.
(u) "SUBSIDIARY" shall mean 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 11 of the Plan, the maximum aggregate
number of Shares which may be optioned and sold under the Plan is 945,000
Shares. The Shares may be authorized but unissued or reacquired
9
shares of Common Stock. If an Option expires or becomes unexercisable for
any reason without having been exercised in full, the Shares which were
subject to the Option but as to which the Option was not exercised shall,
unless the Plan shall have been terminated, become available for other
Option grants under the Plan.
4. ADMINISTRATION OF THE PLAN.
(a) PROCEDURE AFTER REGISTRATION DATE. The Plan shall be administered
either by: (i) the full Board, provided that all members of the Board
are Disinterested Persons; or (ii) a Committee of three (3) or more
directors, each of whom is a Disinterested Person. The Board shall
take all action necessary to administer the Plan in accordance with
the then effective provisions of Rule 16b-3 promulgated under the
Exchange Act, provided that any amendment to the Plan required for
compliance with such provisions shall be made consistent with the
provisions of Section 13 of the Plan, and said regulations.
(b) POWERS OF THE COMMITTEE. Subject to the provisions of the Plan, the
Committee shall have the authority: (i) to determine, upon review of
relevant information, the fair market value of the Common Stock; (ii)
to determine the exercise price of Options to be granted, the
Employees, Directors or consultants to whom and the time or times at
which Options shall be granted, and the number of Shares to be
represented by each Option; (iii) to interpret the Plan; (iv) to
prescribe, amend and rescind rules and regulations relating to the
Plan; (v) to determine the terms and provisions of each Option granted
under the Plan (which need not be identical) and, with the consent of
the holder thereof, to modify or amend any Option; (vi) to authorize
any person to execute on behalf of the Company any instrument required
to effectuate the grant of an Option previously granted by the
Committee; (vii) defer an exercise date of any Option (with the
consent of the Optionee), subject to the provisions of Section 9(a) of
the Plan; (viii) to determine whether Options granted under the Plan
will be Incentive Stock Options or Nonstatutory Stock Options; (ix) to
make all other determinations deemed necessary or advisable for the
administration of the Plan; and (x) to designate which Options granted
under the Plan will be issued in reliance on Rule 701.
(c) EFFECT OF COMMITTEE'S DECISION. All decisions, determinations and
interpretations of the Committee shall be final and binding on all
potential or actual Optionees, any other holder of an Option or other
equity security of the Company and all other persons.
5. ELIGIBILITY.
(a) PERSONS ELIGIBLE FOR OPTIONS. Options may be granted under the Plan to
key executives and managers who are Employees of the Company. All
determinations by the Compensation Committee of the persons to whom
Options shall be granted hereunder shall be conclusive. An Employee
who has been granted an Option, if he or she is otherwise eligible,
may be granted an additional Option or Options. However, the
aggregate fair market value (determined in accordance with the
provisions of Section 8(a) of the Plan) of the Shares subject to one
or more Incentive Stock Options grants that are exercisable for the
first time by an Optionee during any calendar year (under all stock
option plans of the Company and its Parents and Subsidiaries) shall
not exceed $100,000 (determined as of the grant date); all grants in
excess of the $100,000 limit shall be designated as Nonstatutory Stock
Option.
(b) NO RIGHT TO CONTINUING EMPLOYMENT. Neither the establishment nor the
operation of the Plan shall confer upon any Optionee or any other
person any right with respect to continuation of employment or other
service with the Company or any Subsidiary, nor shall the Plan
interfere in any way with the right of the Optionee or the right of
the Company (or any Parent or Subsidiary) to terminate such employment
or service at any time.
6. TERM OF PLAN.
The Plan shall become effective as of July 1, 1988 and subject to
Section 13 hereof, shall extend for a term of ten (10) years from that
date pursuant to approval of the Plan granted by the holders of a
majority of the outstanding Shares at the annual meeting of
Shareholders of the Company held May 6, 1988.
7. TERM OF OPTION.
Unless the Committee determines otherwise, the term of each Option granted
under the Plan shall be ten (10) years from the date of grant. The term of
the Option shall be set forth in the Option Agreement. No Incentive Stock
Option shall be exercisable after the expiration of ten (10) years from the
date such Option is granted; provided that, no Incentive Stock Option
granted to any Employee who, at the date such Option is granted,
10
owns (within the meaning of Section 425(d) of the Code) more than ten
percent (10%) of the total combined voting power of all classes of stock of
the Company or any Parent or Subsidiary shall be exercisable after the
expiration of five (5) years from the date such Option is granted.
8. EXERCISE PRICE AND CONSIDERATION.
(a) EXERCISE PRICE. Except as provided in subsection (b) below, the
exercise price for the Shares to be issued pursuant to any Option
shall be such price as is determined by the Committee, which shall in
no event be less than, in the case of Incentive Stock Options, the
fair market value of such Shares on the date the Option is granted,
PROVIDED THAT, in the case of any Optionee owning stock possessing
more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or any Parent or Subsidiary of the
Company, the exercise price shall be 110% of fair market value on the
date the Incentive Stock Option is granted. Fair market value of the
Common Stock shall be determined by the Committee, using such criteria
as it deems relevant; provided, however, that for such time as the
Common Stock is listed on a national securities exchange (within the
meaning of Section 6 of the Exchange Act) or on the NASDAQ National
Market System (or any successor national market system), the fair
market value per Share shall be the closing price on such exchange on
the date of grant of the Option, as reported in THE WALL STREET
JOURNAL.
(b) TEN PERCENT STOCKHOLDERS. No Option shall be granted to any Employee
who, at the date such Option is granted, owns (within the meaning of
Section 424(d) of the Code) more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any
Parent or Subsidiary, unless the exercise price for the Shares to be
issued pursuant to such Option is at least equal to 110 percent (110%)
of the fair market value of such Shares on the grant date determined
by the Committee in the manner set forth in subsection (a) above.
(c) CONSIDERATION. The consideration to be paid for the Optioned Shares
shall be payment in cash or by check unless payment in some other
manner, including by promissory note, other shares of the Company's
Common Stock or such other consideration and method of payment for the
issuance of Optioned Shares as is authorized by the Committee at the
time of the grant of the Option. Any cash or other property received
by the Company from the sale of Shares pursuant to the Plan shall
constitute part of the general assets of the Company.
9. EXERCISE OF OPTION.
(a) VESTING PERIOD. Any Option granted hereunder shall be exercisable at
such times and under such conditions as determined by the Committee
and as shall be permissible under the terms of the Plan, which shall
be specified in the Option Agreement evidencing the Option. Options
granted under the Plan shall vest at a rate of at least twenty percent
(20%) per year.
(b) EXERCISE PROCEDURES. 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 agreement evidencing the
Option, and full payment for the Shares with respect to which the
Option is exercised has been received by the Company.
An Option may not be exercised for fractional shares. As soon as
practicable following the exercise of an Option in the manner set
forth above, the Company shall issue or cause its transfer agent to
issue stock certificates representing the Shares purchased. Until the
issuance of such stock certificates (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
Shares notwithstanding the exercise of the Option. No adjustment will
be made for a dividend or other rights for which the record date is
prior to the date of the transfer by the Optionee of the consideration
for the purchase of the Shares, except as provided in Section 11 of
the Plan. After the Registration Date, the exercise of an Option by
any person subject to short-swing trading liability under
Section 16(b) of the Exchange Act shall be subject to compliance with
all applicable requirements of Rule 16b-3(d) or (e) promulgated under
the Exchange Act.
(c) DEATH OF OPTIONEE. In the event of the death during the Option period
of an Optionee who is at the time of his death, or was within the
ninety (90)-day period immediately prior thereto, an Employee or
Non-Employee Director, and who was in Continuous Employment as such
from the date of the grant of the Option until the date of death or
termination, the Option may be exercised, at any time prior to the
expiration of the Option period, by the Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent of the accrued right to exercise
at the time of the termination or death, whichever comes first.
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(d) DISABILITY OF OPTIONEE. In the event of the disability during the
Option period of an Optionee who is at the time of such disability, or
was within the ninety (90)-day period prior thereto, an Employee or
Non-Employee Director, and who was in Continuous Employment as such
from the date of the grant of the Option until the date of disability
or termination, the Option may be exercised at any time within one (1)
year following the date of disability, but only to the extent of the
accrued right to exercise at the time of the termination or
disability, whichever comes first, subject to the condition that no
option shall be exercised after the expiration of the Option period.
(e) TERMINATION OF STATUS AS EMPLOYEE. If an Optionee shall cease to be
an Employee for any reason other than disability or death, , the
Optionee may, but only within ninety (90) days (or such other period
of time as is determined by the Committee) after the date he or she
ceases to be an Employee, exercise his or her Option to the extent
that he or she was entitled to exercise it at the date of such
termination, subject to the condition that no option shall be
exercisable after the expiration of the Option period.
(f) EXERCISE OF OPTION WITH STOCK AFTER REGISTRATION DATE. After the
Registration Date, the Committee may permit an Optionee to exercise an
Option by delivering shares of the Company's Common Stock. If the
Optionee is so permitted, the option agreement covering such Option
may include provisions authorizing the Optionee to exercise the
Option, in whole or in part, by: (i) delivering whole shares of the
Company's Common Stock previously owned by such Optionee (whether or
not acquired through the prior exercise of a stock option) having a
fair market value equal to the aggregate exercise price for the
Optioned Shares issuable on exercise of the Option; and/or (ii)
directing the Company to withhold from the Shares that would otherwise
be issued upon exercise of the Option that number of whole Shares
having a fair market value equal to the aggregate exercise price for
the Optioned Shares issuable on exercise of the Option. Shares of the
Company's Common Stock so delivered or withheld shall be valued at
their fair market value at the close of the last business day
immediately preceding the date of exercise of the Option, as
determined by the Committee, in accordance with the provisions of
Section 8(a) of the Plan. Any balance of the exercise price shall be
paid in cash. Any shares delivered or withheld in accordance with
this provision shall not again become available for purposes of the
Plan and for Options subsequently granted thereunder.
(g) TAX WITHHOLDING. After the Registration Date, when an Optionee is
required to pay to the Company an amount with respect to tax
withholding obligations in connection with the exercise of an Option
granted under the Plan, the Optionee may elect prior to the date the
amount of such withholding tax is determined (the "Tax Date") to make
such payment, or such increased payment as the Optionee elects to make
up to the maximum federal, state and local marginal tax rates,
including any related FICA obligation, applicable to the Optionee and
the particular transaction, by: (i) delivering cash; (ii) delivering
part or all of the payment in previously owned shares of Common Stock
(whether or not acquired through the prior exercise of an Option);
and/or (iii) irrevocably directing the Company to withhold from the
Shares that would otherwise be issued upon exercise of the Option that
number of whole Shares having a fair market value equal to the amount
of tax required or elected to be withheld (a "Withholding Election").
If an Optionee's Tax Date is deferred beyond the date of exercise and
the Optionee makes a Withholding Election, the Optionee will initially
receive the full amount of Optioned Shares otherwise issuable upon
exercise of the Option, but will be unconditionally obligated to
surrender to the Company on the Tax Date the number of Shares
necessary to satisfy his or her minimum withholding requirements, or
such higher payment as he or she may have elected to make, with
adjustments to be made in cash after the Tax Date.
Any withholding of Optioned Shares with respect to taxes arising in
connection with the exercise of an Option by any person subject to
short-swing trading liability under Section 16(b) of the Exchange Act
shall satisfy the following conditions:
(i) An advance election to withhold Optioned Shares in settlement of a tax
liability must satisfy the requirements of Rule 16b-3(d)(1)(i),
regarding participant-directed transactions;
(ii) Absent such an election, the withholding of Optioned Shares to settle
a tax liability may occur only during the quarterly window period
described in Rule 16b-3(e);
(iii) Absent an advance election or window-period withholding, the Optionee
may deliver shares of Common Stock owned prior to the exercise of an
Option to settle a tax liability arising upon exercise of the Option,
in accordance with Rule 16b-3(f); or
(iv) The delivery of previously acquired shares of Common Stock (but not
the withholding of newly acquired Shares) will be allowed where an
election under Section 83(b) of the Code accelerates the Tax Date to a
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day that occurs less than six (6) months after the advance election
and is not within the quarterly window period described in
Rule 16b-3(e).
Any adverse consequences incurred by an Optionee with respect to the
use of shares of Common Stock to pay any part of the exercise price or
of any tax in connection with the exercise of an Option, including
without limitation any adverse tax consequences arising as a result of
a disqualifying disposition within the meaning of Section 422 of the
Code shall be the sole responsibility of the Optionee. Shares
withheld in accordance with this provision shall not again become
available for purposes of the Plan and for Options subsequently
granted thereunder.
10. NON-TRANSFERABILITY OF OPTIONS.
An Option may not be sold, pledged, assigned, hypothecated, transferred or
disposed of in any manner other than by will or by the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined
by the Code or Title I of the Employee Retirement Income Security Act or
the rules thereunder, and may be exercised, during the lifetime of the
Optionee, only by the Optionee.
11. ADJUSTMENTS UPON CHANGES IN CAPITAL-IZATION.
Subject to any required action by the stockholders of the Company, the
number of Optioned Shares covered by each outstanding Option, and the per
share exercise price of each such Option, 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, recapitalization,
combination, reclassification, the payment of a stock dividend on the
Common Stock or any other increase or decrease in the number of such 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 issue 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.
The Committee may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the number or class of
securities covered by any Option, as well as the price to be paid therefor,
in the event that the Company effects one or more reorganizations,
recapitalizations, rights offerings, or other increases or reductions of
shares of its outstanding Common Stock, and in the event of the Company
being consolidated with or merged into any other corporation.
If the Company dissolves, sells substantially all of its assets, is
acquired in a stock for stock or securities exchange or is party to a
merger or reorganization in which it not the surviving corporation (a
"Change in Control"), then fifty percent (50%) of the unvested portion of
each Option held at least six (6) months prior to the effective date of a
Change of Control shall immediately vest and each Option shall be
exercisable by the holder thereof for a period of not less than thirty (30)
days prior to such Change in Control, provided, however, that the Optionee
shall be given not less than thirty (30) days notice of such Change of
Control and within such time period may exercise his or her Options in
whole or in part. All Options shall terminate in their entirety to the
extent not exercised on or prior to such thirty (30) day period.
12. TIME OF GRANTING OPTIONS.
Unless otherwise specified by the Committee, the date of grant of an Option
under the Plan shall be the date on which the Committee makes the
determination granting such Option. Notice of the determination shall be
given to each Optionee to whom an Option is so granted within a reasonable
time after the date of such grant.
13. AMENDMENT AND TERMINATION OF THE PLAN.
The Board may amend or terminate the Plan from time to time in such
respects as the Board may deem advisable, except that, without approval of
the holders of a majority of the outstanding capital stock no such revision
or amendment shall change the number of Shares subject to the Plan, change
the designation of the class of employees eligible to receive Options or
add any material benefit to Optionees under the Plan. Any such amendment
or termination of the Plan shall not affect Options already granted, and
such Options shall remain in full force and effect as if the Plan had not
been amended or terminated.
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14. CONDITIONS UPON ISSUANCE OF SHARES.
Shares shall not be issued with respect to an Option granted under the Plan
unless the exercise of such Option and the issuance and delivery of such
Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act, the Exchange Act, the
rules and regulations promulgated thereunder, and the requirements of any
stock exchange 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, the Company
may require the person exercising such Option 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.
15. RESERVATION OF SHARES.
During the term of this Plan the Company will at all times reserve and keep
available the number of Shares as shall be sufficient to satisfy the
requirements of the Plan. Inability of the Company to obtain from any
regulatory body having jurisdiction and authority 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
nonissuance or sale of such Shares as to which such requisite authority
shall not have been obtained.
16. INFORMATION TO OPTIONEE.
During the term of any Option granted under the Plan, the Company shall
provide or otherwise make available to each Optionee a copy of its
financial statements at least annually.
17. OPTION AGREEMENT.
Options granted under the Plan shall be evidenced by Option Agreements.
18. STOCKHOLDER APPROVAL.
The Plan shall be subject to approval by the affirmative vote of the
holders of a majority of the outstanding capital stock of the Company
entitled to vote within twelve (12) months before or after the Plan is
adopted. Any option exercised before stockholder approval is obtained must
be rescinded if stockholder approval is not obtained within twelve (12)
months before or after the Plan is adopted. Shares issued upon the
exercise of such options shall not be counted in determining whether such
approval is obtained. Any amendments to the Plan which require stockholder
approval shall be by the affirmative vote of the holders of a majority of
the outstanding capital stock of the Company entitled to vote.
--end of plan--
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