As filed with the Securities and Exchange Commission on May 15, 2001
Registration No. 333 -
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ULTRALIFE BATTERIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 16-1387013
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification No.)
2000 Technology Parkway
Newark, New York 14513
(Address of Principal Executive Offices) (Zip Code)
2000 Stock Option Plan
(Full title of plan)
John D. Kavazanjian
President and Chief Executive Officer
Ultralife Batteries, Inc.
2000 Technology Parkway
Newark, New York 14513
(Name and address of agent for service)
(315) 332-7100
(Telephone number, including area code, of agent for service)
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Calculation of Registration Fee
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Title of Plan Title of Amount to Proposed Proposed Amount of
securities be maximum maximum registration
to be registered offering aggregate fee
registered price offering
per share(1) price(1)
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2000 Stock Common Stock, 500,000 $5.60 $2,800,000 $700.00
Option Plan par value shares
$.10 per
share
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(1) Estimated solely for the purpose of calculating the amount of the
registration fee in accordance with Rule 457(c) of the Securities Act of 1933
and based upon the high and low prices of the Registrant's Common Stock, par
value $.10, as reported on the Nasdaq National Market System on May 14, 200l.
In addition, pursuant to Rule 416, this Registration Statement also covers an
indeterminate amount of interests to be offered or sold pursuant to the stock
option plan described herein.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents of the Registrant previously filed with the
Securities and Exchange Commission are incorporated herein by reference:
(a) the Registrant's Annual Report on Form 10-K for the fiscal year ended June
30, 2000;
(b) the Registrant's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2000;
(c) the Registrant's Amended Quarterly Report on Form 10-QA for the quarter
ended September 30, 2000;
(d) the Registrant's Quarterly Report on Form 10-Q for the quarter ended
December 31, 2000;
(e) the Registrant's Definitive Proxy Statement on Form DEF 14A, filed on
October 30, 2000;
(f) the Registrant's Quarterly Report on Form 10-Q for the quarter ended March
31, 2001; and
(g) the description of the Registrant's Common Stock, par value $.10 per
share, contained in the Registrant's Registration Statement on Form S-1
(Registration No. 33-54470), filed with the Securities and Exchange
Commission on December 23, 1992.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), after the date of this Registration Statement (and prior to the filing of
a post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold) shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents.
Item 4. Description of Securities
Not Applicable.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers
The Company's Certificate of Incorporation and By-laws, each as amended,
provide for elimination of the liability of Directors to the Registrant to the
fullest extent permitted by Section 102(7)(b) of the Delaware General
Corporation Law, as the same may be amended and supplemented.
The Registrant's Certificate of Incorporation, as amended, provides, in
accordance with the Delaware General Corporation Law, that Directors are not
liable to the Registrant or its stockholders for monetary damages for breaches
of fiduciary duty as a Director, except for liability (i) for any breach of the
Director's duty of loyalty to the Registrant or its stockholders, (ii) for acts
or omissions
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not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) for dividend payments or stock repurchases in violation of the
Delaware General Corporation Law, or (iv) for any transaction from which the
Director derived any improper personal benefit.
The Certificate of Incorporation and the By-laws of the Registrant
includes provisions by which the Registrant will indemnify all persons whom it
shall have the power to indemnify under Section 145 of the Delaware General
Corporation Law from and against any and all of the expenses, liabilities, or
other matters referred to in or covered by said section. The indemnification
provided for in Section 145 shall not be deemed exclusive of any other rights to
which those indemnified may be entitled under any Bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee, or agent and shall inure to the benefit of the heirs,
executors, and administrators of such person.
The general effect of these provisions will be to eliminate the rights of
the Registrant and its stockholders (through stockholders' derivative suits on
behalf of the Registrant) to recover monetary damages in the event of a breach
of fiduciary duty as a director (including breach of duty in the case of
negligence or grossly negligent behavior) except in the situations as described
above. These provisions will not affect the availability of injunctive relief
against directors of the Registrant (although such relief may not always be
available as a practical matter) nor will it limit director's liability for
violations of the federal securities laws.
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits
Exhibit 4- Instruments defining the rights of security holders, including
indentures
4.1 Certificate of Incorporation of the Registrant (Exhibit 3.1)(1)
4.2 Amendment to Certificate of Incorporation (Exhibit 3.1)(2)
4.3 Restated Certificate of Incorporation*
4.4 By-laws of the Registrant (Exhibit 3.2)(1)
4.5 Form of Common Stock Certificate of the Registrant (Exhibit 4.1)(1)
Exhibit 5- re: Legality
5.1 Opinion of Harter, Secrest & Emery LLP*
Exhibit 15- Letter re: Unaudited interim financial information
Not Applicable.
Exhibit 23- Consents of Experts and Counsel
23.1 Consent of Arthur Andersen LLP*
23.2 Harter, Secrest & Emery LLP(3)
Exhibit 24- Power of Attorney
Not Applicable.
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Exhibit 99
99.1 Ultralife Batteries, Inc. 2000 Stock Option Plan*
*Exhibit filed with this Registration Statement
(1)Exhibit previously filed as part of and is incorporated by reference to the
Registrant's Registration Statement on Form S-1 (Registration No. 33-544701).
The exhibit number contained in parenthesis refers to the exhibit number in such
Registration Statement.
(2)Exhibit previously filed as part of and is incorporated by reference to the
Registrants' Form 10-Q for the quarterly period ended December 31, 2000
(Commission File No. 0-20852). The exhibit number contained in parenthesis
refers to the exhibit number in the Form 10-Q.
(3)Filed as Exhibit 5.1 to this Registration Statement.
Item 9. Undertakings
(a) The undersigned Registrant hereby undertakes (subject to the proviso
contained in Item 512(a) of Regulation S-K):
(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 of 1933, as amended (the "Securities Act");
(ii) to reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement;
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
(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;
(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.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, controlling persons of
the Registrant pursuant to the provisions
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described under Item 6 above, or otherwise, the Registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of 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.
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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 Village of Newark, State of New York, on this 15 day of May
2001.
ULTRALIFE BATTERIES, INC.
BY: /s/ John D. Kavazanjian
-------------------------------------
JOHN D. KAVAZANJIAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Signature Title Date
/s/ John D. Kavazanjian President and Chief Executive May 15, 2001
- ----------------------- Officer and Director
John D. Kavazanjian (Principal Executive Officer)
/s/ Robert W. Fishback Vice President-Finance and Chief May 15, 2001
- ----------------------- Financial Officer (Principal
Robert W. Fishback Financial Officer and Principal
Accounting Officer)
/s/ Arthur M. Lieberman Director May 15, 2001
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Arthur M. Lieberman
/s/ Joseph C. Abeles Director May 15, 2001
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Joseph C. Abeles
/s/ Joseph N. Barrella Director May 15, 2001
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Joseph N. Barrella
/s/ Patricia C. Barron Director May 15, 2001
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Patricia C. Barron
/s/ Richard A. Hansen Director May 15, 2001
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Richard A. Hansen
/s/ Carl H. Rosner Director May 15, 2001
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Carl H. Rosner
/s/ Ranjit Singh Director May 15, 2001
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Ranjit Singh
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Exhibit 4.3
RESTATED CERTIFICATE OF INCORPORATION
OF
ULTRALIFE BATTERIES, INC.
Ultralife Batteries, Inc., a corporation duly organized and existing under
and by virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: The name of the corporation is Ultralife Batteries, Inc. The date
of filing of its original Certificate of Incorporation with the Secretary of
State was December 14, 1990.
SECOND: This Restated Certificate of Incorporation restates, integrates
and further amends the Certificate of Incorporation of this corporation.
THIRD: The text of the Certificate of Incorporation as amended or
supplemented heretofore is further amended hereby to read in full as set forth
in Exhibit A attached hereto.
FOURTH: This Restated Certificate of Incorporation was duly adopted by the
written consent of the stockholders holding a majority of the outstanding shares
of Common Stock, all in accordance with the applicable provisions of Sections
228, 242 and 245 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, Ultralife Batteries, Inc. has caused this Certificate
to be signed by its President and attested by its Assistant Secretary this 8th
day of December, 1992.
ULTRALIFE BATTERIES, INC.
By: /s/ Joseph Barrella
-------------------
Joseph Barrella
President
ATTEST:
/s/ Martin Rosansky
- -------------------
Martin Rosansky
Assistant Secretary
RESTATED CERTIFICATE OF INCORPORATION
OF
ULTRALIFE BATTERIES, INC.
FIRST. Name. The name of the Corporation is Ultralife Batteries, Inc. (the
"Corporation").
SECOND. Purpose and Powers. The purpose for which the Corporation is
organized is as follows:
To engage in any lawful act or activity for which corporations may
be organized under the General Corporation Law of the State of
Delaware.
THIRD. Capitalization. The total number of shares of stock that the
Corporation shall have authority to issue is 13 million shares,
consisting of 12 million shares of Common Stock, par value $.10 per
share (the "Common Stock") and 1 million shares of Preferred Stock,
no par value (the "Preferred Stock").
The voting powers, designations, preferences and relative, participating
optional or other special rights and qualifications, limitations or restrictions
of the classes of stock of the Corporation are as follows:
I. Shares of Common Stock. All shares of Common Stock will be identical
and will entitle the holders thereof to the same rights and
privileges.
A. Voting Rights. Except as otherwise required by law, the
holders of Common Stock shall be entitled to one vote per
share on each matter on which the stockholders of the
Corporation shall be entitled to vote.
B. Dividends. The Board of Directors of the Corporation may cause
dividends or other distributions to be paid to the holders of
shares of Common Stock out of funds legally available for the
payment of dividends by declaring an amount per share as a
dividend or other distribution.
C. Liquidation Rights. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the
affairs of the Corporation and after payment shall have been
made to the holders of share of Preferred Stock of the full
amount to which they may be entitled, the holders of shares of
Common Stock shall be entitled, to the exclusion of the
holders of shares of Preferred Stock, to share ratably, share
for share, in all remaining assets of
the Corporation available for distribution to its
stockholders. Neither a consolidation or merger of the
Corporation with or into any other corporation, not a merger
of any other corporation into the Corporation, nor a
reorganization of the Corporation, nor the purchase of
redemption of all or part of the outstanding shares of any
class or classes of the Corporation, nor a sale or transfer of
all or any part of its assets shall be considered a
liquidation, dissolution or winding up of the Corporation
within the meaning of this paragraph.
II. Preferred Stock. The Board of Directors of the Corporation shall
have the fully authority permitted by law to fix by resolution full,
limited or no voting powers and such designations, preferences and
relative, participating, optional or other special rights, and
qualifications, limitations or restrictions of any series of
Preferred Stock that may be desired.
FOURTH. Elections by Ballot. Elections of directors need not be by written
ballot.
FIFTH. Amendment of Bylaws. The Board of Directors shall have the power, in
addition to the stockholders, to make, alter or repeal the bylaws of
the Corporation.
SIXTH. Limit on Liability and Indemnification.
A. Liability. To the full extent that the General Corporation Law
of the State of Delaware, as it exists on the date hereof or
may hereafter be amended, permits the limitation or
elimination of the liability of directors or officers, a
director of the Corporation shall not be liable to the
Corporation or its stockholders for monetary damages.
B. Indemnification. To the full extent permitted by the General
Corporation Law of the State of Delaware, as it exits on the
date hereof or may hereafter be amended, and any other
applicable law, the Corporation shall indemnify a director of
the Corporation who is or was a party to any proceeding by
reason of the fact that such person is or was such a director
or is or was serving at the request of the Corporation as a
director of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise. The Board of
Directors is hereby empowered to contract in advance to
indemnify any director.
SEVENTH. Amendment of Certificate of Incorporation. The Corporation reserves
the right to amend, alter, change or repeal any provision contained
in this Certificate of Incorporation, in the manner now or hereafter
prescribed by statute, and all rights conferred upon stockholders
are granted subject to this reservation.
EIGHTH. Registered Office.
The registered office of the Corporation is to be located at
Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, in the County of New Castle, in the State of Delaware.
The name of its registered agent at that address is The Corporation
Trust Company.
Exhibit 5.1
[LETTERHEAD OF HARTER, SECREST & EMERY LLP]
May 15, 2001
Ultralife Batteries, Inc.
2000 Technology Parkway
Newark, New York 14513
Re: Ultralife Batteries, Inc.
Registration Statement on Form S-8
Gentlemen:
You have requested our opinion in connection with your Registration
Statement on Form S-8, filed under the Securities Act of 1933, as amended (the
"Registration Statement"), with the Securities and Exchange Commission in
respect of the proposed issuance by Ultralife Batteries, Inc. (the "Company") of
up to 500,000 shares of Common Stock, par value $.10 per share, of the Company
pursuant to the Company's 2000 Stock Option Plan.
We have examined the following corporate records and proceedings of the
Company in connection with the preparation of this opinion: its Certificate of
Incorporation as amended and restated to date; its By-laws as currently in force
and effect; its minute books, containing minutes and records of other
proceedings of its stockholders and its Board of Directors from the date of
incorporation to the date hereof; the Registration Statement and the related
exhibits thereto; applicable provisions of laws of the State of Delaware; and
such other documents and matters as we have deemed necessary.
In rendering this opinion, we have made such examination of laws as we
have deemed relevant for the purposes hereof. As to various questions of fact
material to this opinion, we have relied upon representations and/or certificate
of officers of the Company, certificates and documents issued by public official
and authorities, and information received from searchers of public records.
Based upon and in reliance on the foregoing, we are of the opinion that:
1. The Company is validly existing under the laws of the State of
Delaware as of May 11, 2001.
Ultralife Batteries, Inc.
May 15, 2001
Page 2
2. The Company has the authority to issue an aggregate of 500,000
shares of Common Stock upon the effectiveness of the Registration
Statement.
3. The shares of Common Stock to be sold by the Company upon the
effectiveness of the Registration Statement will, when sold and paid
for as described in the Registration Statement, be validly
authorized, legally issued and outstanding, and full paid and
non-assessable.
We hereby consent to being named in the Registration Statement as
attorneys who will, for the Company, pass upon the validity of the issuance of
shares of Common Stock offered thereby, and we hereby consent to the filing of
this opinion as an Exhibit to the Registration Statement.
Very truly yours,
HARTER, SECREST & EMERY LLP
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated August 10, 2000
included in Ultralife Batteries, Inc.'s Form 10-K for the year ended June 30,
2000 and to all references to our Firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
Rochester, New York
May 15, 2001
Exhibit 99.1
ULTRALIFE BATTERIES, INC
2000 STOCK OPTION PLAN
Section 1. Purpose.
The Plan authorizes the Committee (as hereafter defined) to provide key
Employees (including officers of the Corporation), Directors and Consultants of
the Corporation and its Subsidiaries, who are in a position to contribute
materially to the long-term success of the Corporation, with options to acquire
common stock of the Corporation, in accordance with the terms specified herein.
The Corporation believes that this incentive program will cause those persons to
increase their interest in the Corporation's welfare, and aid in attracting and
retaining Employees, Directors and Consultants of outstanding ability.
Section 2. Definitions.
Unless the context clearly indicates otherwise, the following terms, when
used in this Plan, shall have the meanings set forth in this Section:
(a) "Board" shall mean the Board of Directors of the Corporation.
(b) "Change in Control" shall mean the occurrence of any of the following:
(i) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes a "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Corporation
representing 30% or more of the voting power of the then outstanding securities
of the Corporation; (ii) during any period of two consecutive calendar years
there is a change of 25% or more in the composition of the Board of the
Corporation in office at the beginning of the period except for changes approved
by at least two-thirds of the Directors then in office who were Directors at the
beginning of the period; (iii) the stockholders of the Corporation approve an
agreement providing for (A) the merger or consolidation of the Corporation with
another corporation where the stockholders of such corporation, immediately
after the merger or consolidation, own shares entitling such stockholders to 50%
or more of all votes (without consideration of the rights of any class of stock
to elect Directors by separate class vote) to which all stockholders of the
corporation issuing cash or securities in the merger or consolidation would be
entitled in the election of directors or where the members of the Board of
Directors of such corporation, immediately after the merger or consolidation,
constitute a majority of the Board of Directors of the corporation issuing cash
or securities in the merger or consolidation, or (B) the sale or other
disposition of all or substantially all the assets of the Corporation, or a
liquidation, dissolution or statutory exchange of the Corporation; or (iv) any
person has commenced, or announced an intention to commence, a tender offer or
exchange offer for 30% or more of the voting power of the then-outstanding
securities of the Corporation.
(c) "Code" shall mean the Internal Revenue Code of 1986 as it may be
amended from time to time.
1
(d) "Committee" shall mean a Committee of not less than two Directors who
are "Non-Employee Directors," as that term is defined and interpreted pursuant
to Rule 16b-3 under the Exchange Act. The Committee shall be appointed by and
serve at the pleasure of the Board.
(e) "Consultant" shall mean any consultant of the Corporation or its
Subsidiaries.
(f) "Control Person" shall mean any person who, as of the date of grant of
an Option, owns (within the meaning of Section 422A(b)(6) of the Code) stock
possessing more than 10% of the total combined voting power or value of all
classes of stock of the Corporation or of any parent or Subsidiary.
(g) "Corporation" shall mean Ultralife Batteries, Inc., a Delaware
corporation.
(h) "Director" shall mean any member of the Board.
(i) "Employee" shall mean any employee of the Corporation or its
Subsidiaries, including Directors who are otherwise employed by the Corporation.
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934 as it
may be amended from time to time.
(k) "Fair Market Value" shall mean for any day (i) if the Corporation is a
registrant under Section 12 of the Exchange Act, the closing price of the Stock
in the over-the-counter market, as reported through the National Association of
Securities Dealers Automated Quotation System or, if the stock is listed or
admitted to trading on any national securities exchange, the last reported sale
price on such exchange or, (ii) if the Corporation in not a registrant under
Section 12 of the Exchange Act, the price of the Stock will be determined by the
Board on the date of grant but will not be less than the par value of such
Stock.
(l) "Grantee" shall mean a Person granted an Option under the Plan.
(m) "ISO" shall mean an Option granted pursuant to the Plan to purchase
shares of Stock and intended to qualify as an incentive stock option under
Section 422 of the Code, as now or hereafter constituted.
(n) "NQSO" shall mean an Option granted pursuant to the Plan to purchase
shares of the Stock that is not an ISO.
(o) "Options" shall refer collectively to NQSOs and ISOs subject to the
Plan.
(p) "Parent" shall mean any parent of the Corporation as defined in
Section 425 of the Code.
(q) "Plan" shall mean this 2000 Stock Option Plan as set forth herein and
as amended from time to time.
2
(r) "Securities Act" shall mean the Securities Act of 1933 as it may be
amended from time to time.
(s) "Stock" shall mean shares of the Common Stock of the Corporation.
(t) "Subsidiary" shall mean any subsidiary corporation as defined in
Section 425 of the Code.
Section 3. Shares of Stock Subject to the Plan.
Subject to the provisions of Section 8, the Stock which may be issued or
transferred pursuant to Options granted under the Plan shall not exceed 500,000
shares in the aggregate. Stock issuable upon the exercise of any Option may be
authorized but unissued shares or reacquired shares of Stock. If any unexercised
Options lapse or terminate for any reason, the Stock covered thereby may again
be optioned. More than one Option may be granted to one person.
Section 4. Administration of the Plan.
The Plan shall be administered by the Committee. Subject to the express
provisions of the Plan, the Committee shall have the authority to interpret the
Plan, to prescribe, amend, and rescind rules and regulations relating to the
Plan, to determine the terms and provisions of stock option agreements
thereunder and to make all other determinations necessary or advisable for the
administration of the Plan. Any controversy or claim arising out of or related
to the Plan or the Options granted thereunder shall be determined unilaterally
by, and at the sole discretion of, the Committee. The provisions of stock option
agreements for Options granted under Section 6 hereof may provide that, upon the
occurrence of a Change in Control specified in Section 2(b)(iii) hereof, the
Committee may require the cancellation for cash of outstanding Options or the
issuance of comparable replacement options granted by the entity.
Section 5. Types of Options.
Options granted under the Plan may be of two types: ISOs and NQSOs. The
Committee shall have the authority and discretion to grant to an eligible
Employee either ISOs, NQSOs, or both, but shall clearly designate the nature of
each Option at the time of grant. Consultants and Directors shall only receive
NQSOs.
Section 6. Grant of Options to Employees, Consultants and Directors.
(a) Key Employees and Consultants of the Corporation and its Subsidiaries
shall be eligible to receive Options under the Plan. Employees shall be eligible
to receive ISOs and NQSOs; Consultants shall be eligible to receive NQSOs only.
(b) The exercise price per share of Stock subject to an Option granted to
an Employee or Consultant shall be determined by the Committee; provided,
however, that (i) the exercise price of each share subject to an ISO shall be
not less than 100% of the Fair Market Value of a share of the Stock on the date
such ISO is granted, (ii) such exercise price shall not be less than
3
110% of such Fair Market Value for any ISO granted to a Control Person, and
(iii) the exercise price of each share subject to a NQSO shall be not less than
85% of the Fair Market Value of a share of the Stock on the date such NQSO is
granted.
(c) The term of each Option granted to an Employee or Consultant shall be
determined by the Committee, provided that no Option shall be exercisable more
than ten years from the date such Option is granted, and provided further that
no ISO granted to a Control Person shall be exercisable more than five years
from the date of Option grant.
(d) The Committee shall determine and designate from time to time the
Employees and Consultants who are to be granted Options, the nature of each
Option granted and the number of shares of Stock subject to each such Option.
(e) Notwithstanding any other provisions hereof, the aggregate Fair Market
Value (determined at the time the ISO is granted) of the Stock with respect to
which ISOs are exercisable for the first time by any Employee during any
calendar year under all plans of the Corporation and any Parent or Subsidiary
corporation shall not exceed $100,000.
(f) The Committee, in its sole discretion, shall determine whether any
Option granted to an Employee or Consultant shall become exercisable in one or
more installments and specify the installment dates. The Committee may also make
such other provisions, not inconsistent with the terms of this Plan as it may
deem desirable, including such provisions as it may deem necessary to qualify
any ISO under the provisions of Section 422 of the Code. The Committee, in its
discretion, shall have the power to accelerate the period or periods during
which Options become exercisable. Notwithstanding any determination by the
Committee regarding the exercise period of any Option granted to an Employee or
Consultant, all such Options shall immediately become exercisable upon a Change
in Control of the Corporation.
(g) The Committee may, at any time, grant new or additional options to any
eligible Employee or Consultant who has previously received Options under this
Plan, or options under other plans, whether such prior Options or other options
are still outstanding, have been exercised previously in whole or in part, or
have been canceled. The exercise price of such new or additional Options may be
established by the Board, subject to Section 6(b) hereof, without regard to such
previously granted Options or other options.
(h) No Option shall be granted under this Section 6 to Non-Employee
Directors unless that option, (i) provides that the Stock received upon exercise
of the Option may not be disposed of before the first day following the sixth
month anniversary date the Option was granted, or (ii) is granted pursuant to
Section 6(i) below.
(i) On the last day of each calendar quarter, commencing December 31,
2000, there shall be granted to each Director of the Corporation on such date,
including Directors who are also employees of the Corporation, a NQSO to
purchase 1,500 shares of Stock, up until the fifth anniversary of the grant
date, for a price equal to the closing price of the Stock on the Grant Date.
These options will be deemed vested on the date that they are granted.
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(j) In no event shall any issued and outstanding option be repriced to a
lower exercise price at any time during the term of such option, without the
prior affirmative vote of a majority of shares of voting capital stock present
at a stockholders meeting in person or by proxy and entitled to vote thereon.
Any amendment or repeal of this provision shall require the affirmative vote of
a majority of shares of voting capital stock present at a stockholders meeting
in person or by proxy and entitled to vote thereon.
Section 7. Exercise of Options.
(a) Upon the exercise of any Option, the Grantee shall pay the exercise
price for the Stock being purchased in the manner provided in the particular
stock option agreement, including payment for such shares by surrender of shares
of Stock (at their Fair Market Value) if permitted by such stock option
agreement, including Stock acquired pursuant to the Option then being exercised.
(b) The number of shares which are issued pursuant to the exercise of an
Option shall be charged against the maximum limitation on shares set forth in
Section 3 hereof.
(c) Except as provided in Section 9, no Option granted to an Employee or
Consultant shall be exercised unless at the time of such exercise the Grantee is
then an Employee or Consultant.
(d) Before the Corporation issues Stock to a Grantee pursuant to the
exercise of a NQSO, the Corporation shall have the right to require that the
Grantee make such provisions, or furnish the Corporation such authorization,
necessary or desirable so that the Corporation may satisfy its obligation, under
applicable income tax laws, to withhold for income or other taxes due upon or
incident to such exercise. The Committee may adopt such rules, forms, and
procedures as it considers necessary or desirable to implement this Section
7(d), which rules, forms, and procedures shall be binding upon all Grantees, and
which shall be applied uniformly to all Grantees similarly situated.
Section 8. Adjustment Upon Changes in Capitalization.
In the event of any reclassification, recapitalization, merger,
consolidation, reorganization, issuance of warrants, rights or debentures, stock
dividend, stock split or reverse stock split, cash dividend, property dividend,
combination or exchange of shares, repurchase of shares or any other change in
corporate structure which in the judgment of the Committee materially affects
the value of shares, the Committee may determine the appropriate adjustment, if
any, to the number and class of shares and the exercise price per share set
forth in any Option theretofore granted, provided that no such adjustments shall
be made to any ISO without the Grantee's consent, if such adjustment would cause
such ISO to fail to qualify as such.
Section 9. Termination of Relationship with the Corporation.
(a) Except as provided below in this Section 9(a), upon the termination of
an Employee's employment or a Consultant's consulting relationship with the
Corporation or a Director's term of office with the Corporation (unless the
Director continues to be an Employee
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or consultant to the Corporation), such Grantee's options shall terminate on the
day three months following such termination of employment, consultancy or
directorship. The Committee shall have the discretion to provide that upon
termination of an Employee's employment or a Consultant's consulting
relationship as a result of retirement, disability or death, such Grantee or his
or her legal representative may exercise any outstanding and then exercisable
installments of his or her Options for a period not to exceed: (i) one year from
the date of such termination in the case of death or permanent and total
disability (within the meaning of Section 22(e)(3) of the Code), and (ii) three
months from the date of such termination in the case of retirement or other
disability; provided, however, that in no event shall the period extend beyond
the expiration of the Option term. In no event shall any Option be exercisable
for more than the maximum number of shares that the Grantee was entitled to
purchase at the date of, retirement, disability, or death as the case may be. In
the case of an Employee or Consultant, the transfer among the Corporation and
any Subsidiary shall not be deemed to be a termination of the employment or
consulting relationship, and a change from the status of an Employee to a
Consultant or from a Consultant to an Employee shall not be deemed to be a
termination of the employment or consultant relationship.
(b) Subject to the foregoing, in the event of death, Options may be
exercised by a Grantee's legal representative.
Section 10. General Provisions.
(a) Each Option grant shall be evidenced by a written stock option
agreement containing such terms and conditions, not inconsistent with this Plan,
as the Committee shall approve. ISOs and NQSOs may be granted to Employees
simultaneously and subject to a single stock option agreement; provided,
however, that in no event shall a NQSO be granted in tandem with an ISO such
that the exercise of one affects the right to exercise the other. The terms and
provisions of such stock option agreements (including the exercise price
specified therein) may vary among Grantees and among different Options granted
to the same Grantee.
(b) The grant of an Option in any year shall not give the Grantee any
right to similar grants in future years or any right to continue such Grantee's
employment or consultant relationship with the Corporation or its Subsidiaries.
All Grantees shall remain subject to discharge to the same extent as if the Plan
were not in effect.
(c) No Grantee, and no beneficiary or other persons claiming under or
through the Grantee shall have any right, title or interest by reason of any
Option to any particular assets of the Corporation or its Subsidiaries, or any
shares of Stock allocated or reserved for the purposes of the Plan or subject to
any Option except as set forth herein. The Corporation shall not be required to
establish any fund or make any other segregation of assets to assure the payment
of any Option.
(d) No Option or other right under the Plan shall be subject to
anticipation, sale, assignment, pledge, encumbrance, or charge except by will or
the laws of descent and distribution, and an Option shall be exercisable during
the Grantee's lifetime only by the Grantee.
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(e) Notwithstanding any other provision of this Plan or stock option
agreements made pursuant thereto, the Corporation shall not be required to issue
or deliver any certificate or certificates for shares of Stock under this Plan
prior to fulfillment of all of the following conditions:
(1) The listing, or approval for listing upon notice of issuance, of
such shares on any securities exchange on which the Stock may then be
traded;
(2) Any registration or other qualification of such shares under any
state or federal law or regulation, or other qualification which the Board
shall, in its absolute discretion and upon the advice of counsel, deem
necessary or advisable;
(3) The obtaining of any other consent approval or permit from any
state or federal government agency which the Board shall, in its absolute
discretion and upon the advice of counsel, determine to be necessary or
advisable; and
(4) The execution by the Grantee (or the Grantee's legal
representative) of such written representation that the Committee may in
its sole discretion deem necessary or advisable to the effect that the
shares then being purchased are being purchased for investment with no
present intention of reselling or otherwise disposing of such shares in
any manner which may result in a violation of the Securities Act of 1933,
as amended, and the placement upon certificates for such shares of an
appropriate legend in connection therewith.
(f) The issuance of shares of Stock to Grantees or to their legal
representatives shall be subject to any applicable taxes and other laws or
regulations of the United States or of any state having jurisdiction thereof
(g) In the case of a grant of an Option to any Employee or Consultant of a
Subsidiary, the Corporation may, if the Committee so directs, issue or transfer
the shares covered by the Option to the Subsidiary, for such lawful
consideration as the Committee may specify, upon the condition or understanding
that the Subsidiary will transfer the shares to the Employee or Consultant in
accordance with the terms of the Plan and the stock option agreement relating to
such Option.
Section 11. Amendment or Termination.
Subject to the provisions of Section 6(j), the Board may, at any time,
alter, amend, suspend, discontinue or terminate this Plan; provided, however,
that no such action shall adversely affect the rights of Grantees to Options
previously granted hereunder and, provided further, however, that any
stockholder approval necessary or desirable in order to comply with Rule 16b-3
under the Exchange Act or with Section 422 of the Code (or other applicable law
or regulation) shall be obtained in the manner required therein.
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Section 12. Duration of Plan.
This Plan is effective upon its adoption by the Board on September 15,
2000, subject to the approval of the Corporation's stockholders. This Plan shall
terminate at the close of business on September 15, 2010, and no Option may be
granted under the Plan thereafter, but such termination shall not affect any
Options theretofore granted.