As filed with the Securities and Exchange Commission on May 13, 2011
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CADENCE DESIGN SYSTEMS, INC.
(Exact Name of Registrant as Specified in Its Charter)
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Delaware
(State or Other Jurisdiction of Incorporation or Organization)
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77-0148231
(I.R.S. Employer Identification No.)
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2655 Seely Avenue, Building 5
San Jose, California 95134
(Address of Principal Executive Offices) (Zip Code)
Options Assumed by Cadence Design Systems, Inc.
originally granted under the
Altos Design Automation, Inc. 2006 Stock Plan, as amended December 23, 2009
(Full title of the Plan)
James J. Cowie, Esq.
Senior Vice President, General Counsel and Secretary
Cadence Design Systems, Inc.
2655 Seely Avenue, Building 5, San Jose, California 95134
(Name and Address of Agent for Service)
(408) 943-1234
(Telephone Number, Including Area Code, of Agent For Service)
Copies to:
Stewart McDowell, Esq.
Gibson, Dunn & Crutcher LLP
555 Mission Street, Suite 3000
San Francisco, California 94105
(415) 393-8200
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of
“large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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(Do not check if a smaller reporting company)
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CALCULATION OF REGISTRATION FEE
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Title of Securities
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Proposed Maximum
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Proposed Maximum
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Amount of
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to be Registered
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Amount to be Registered
(1)
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Offering Price Per Share
(2)
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Aggregate Offering Price
(2)
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Registration Fee
(2)
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Common Stock, par
value $0.01 per share
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289,894
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$1.39
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$402,953.00
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$47.00
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(1)
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This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the Altos Design Automation, Inc. 2006
Stock Plan by reason of any stock dividend, stock split, recapitalization or
other similar transaction effected without the receipt of consideration which
results in an increase in the number of the outstanding shares of Cadence
Design Systems, Inc. Common Stock.
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(2)
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Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, on the basis of the weighted average offering price
per share that such options may be exercised.
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TABLE OF CONTENTS
PART I
Information Required in the Section 10(a) Prospectus
Pursuant to the instructions to Form S-8, Part I (Information Required in the Section 10(a)
Prospectus) is not filed as part of this Registration Statement.
The shares of common stock subject to options registered hereunder have been assumed
by Cadence Design Systems, Inc. (the “Registrant”) pursuant to an Agreement and Plan of
Merger, dated as of April 29, 2011, among the Registrant, Altos Design Automation, Inc.,
Flute Subsidiary Corporation, and, solely with respect to certain sections thereof, Kevin
Wai Ming Chou. These options were originally granted to directors, employees, consultants
and officers of Altos Design Automation, Inc. under the Altos Design Automation, Inc. 2006
Stock Plan, as amended December 23, 2009 (hereinafter the “Plan”).
PART II
Information Required in the Registration Statement
Item 3.
Incorporation of Documents by Reference
The Registrant hereby incorporates by reference into this Registration Statement the following
documents previously filed with the Securities and Exchange Commission (the “Commission”):
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(a)
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The Registrant’s Annual Report on Form 10-K for the fiscal year
ended January 1, 2011, including all material incorporated by reference
therein;
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(b)
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The Registrant’s Current Reports on Form 8-K filed with the
Commission on February 2, 2011, February 14, 2011, February 17, 2011 and April
29, 2011;
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(c)
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The Registrant’s Quarterly Report on Form 10-Q filed with the
Commission on April 29, 2011; and
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(d)
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The description of the Registrant’s Common Stock to be offered
hereby contained in the Registrant’s Registration Statement on Form 8-A filed
with the Commission on January 12, 2006.
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All documents filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934, as amended, after the date of this Registration Statement and 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
into this Registration Statement and to be a part hereof from the date of filing of such documents.
Any document, and 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 that also is incorporated or deemed to be incorporated by reference
herein, modifies or supersedes such document or statement. Any such document or statement so
modified or superseded shall not be deemed, except as so modified or superseded, to constitute a
part of this Registration Statement. Subject to the foregoing, all information appearing in this
Registration Statement is qualified in its entirety by the information appearing in the documents
incorporated by reference.
Item 4.
Description of Securities
Not Applicable.
II-1
Item 5.
Interests of Named Experts and Counsel
Not Applicable.
Item 6.
Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law permits a corporation to indemnify any of
its directors or officers who was or is a party or is threatened to be made a party to any third
party proceeding by reason of the fact that such person is or was a director or officer of the
corporation against expenses (including attorneys’ fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with such action, suit or
proceeding, if such person acted in good faith and in a manner such person reasonably believed to
be in or not opposed to the best interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe that such person’s conduct was unlawful.
In a derivative action, i.e., one by or in the right of a corporation, the corporation is permitted
to indemnify any of its directors or officers against expenses (including attorneys’ fees) actually
and reasonably incurred by such person in connection with the defense or settlement of such action
or suit if such person acted in good faith and in a manner such person reasonably believed to be in
or not opposed to the best interests of the corporation, except that no indemnification shall be
made if such person shall have been adjudged liable to the corporation, unless and only to the
extent that the court in which such action or suit was brought shall determine upon application
that such person is fairly and reasonably entitled to indemnity for such expenses despite such
adjudication of liability.
Article VII of the Registrant’s currently effective Certificate of Incorporation eliminates
the personal liability of its directors for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director’s duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware
General Corporation Law or (iv) for any transaction from which the director derived an improper
personal benefit. In addition, as permitted by Section 145 of the Delaware General Corporation
Law, the Bylaws of the Registrant provide that: (a) the Registrant is required to indemnify its
directors and officers and persons serving in such capacities in other business entities
(including, for example, subsidiaries of the Registrant) at the Registrant’s request (such
directors, officers and other persons are hereinafter referred to collectively as, “Covered
Persons”), to the fullest extent permitted by Delaware law, including those circumstances in which
indemnification would otherwise be discretionary; (b) the Registrant is required to advance
expenses as incurred to such Covered Persons in connection with defending a proceeding; (c) the
indemnitee(s) of the Registrant have the right to bring suit, and to be paid the expenses of
prosecuting such suit, if successful, to enforce the rights to indemnification under the Bylaws or
to advancement of expenses under the Bylaws; (d) the rights conferred in the Bylaws are not
exclusive and the Registrant is authorized to enter into indemnification agreements with such
directors, officers and employees; (e) the Registrant is required to maintain director and officer
liability insurance to the extent reasonably available; and (f) the Registrant may not
retroactively amend the Bylaws indemnification provision in a way that is adverse to such Covered
Persons.
The Registrant has entered into indemnity agreements with each of its executive officers and
directors that provide the maximum indemnity allowed to officers and directors by Section 145 of
the Delaware General Corporation Law and the Bylaws, as well as certain additional procedural
protections. The Registrant also maintains a limited amount of director and officer insurance.
The indemnification provision in the Bylaws, and the indemnity agreements entered into between the
Registrant and its officers or directors, may be sufficiently broad to permit indemnification of
the Registrant’s officers and directors for liability arising under the Securities Act of 1933, as
amended (the “1933 Act”).
Item 7.
Exemption from Registration Claimed
Not Applicable.
II-2
Item 8.
Exhibits
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Exhibit Number
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Exhibit
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4.1
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Instruments Defining Rights of Stockholders. Reference is made to the Registrant’s
Registration Statement on Form 8-A filed with the Commission on January 12, 2006 incorporated
by reference pursuant to Item 3(d).
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5.1
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Opinion and consent of Gibson, Dunn & Crutcher LLP.
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23.1
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Consent of Independent Registered Public Accounting Firm.
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23.2
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Consent of Gibson, Dunn & Crutcher LLP (contained in Exhibit 5.1).
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24.1
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Power of Attorney (included on the signature pages to this Registration Statement on Form S-8).
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99.1
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Altos Design Automation, Inc. 2006 Stock Plan, as amended December 23, 2009.
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Item 9.
Undertakings
A. The undersigned Registrant hereby undertakes: (1) to file, during any period in which
offers or sales are being made, a post-effective amendment to this Registration Statement (i) to
include any prospectus required by Section 10(a)(3) of the 1933 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; and
(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;
provided however
, that clauses (1)(i) and (1)(ii) shall not apply if the
information required to be included in a post-effective amendment by those clauses 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 Securities Exchange Act of 1934, as amended (the “1934 Act”), that are
incorporated by reference into this Registration Statement; (2) that for the purpose of determining
any liability under the 1933 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; and (3) to
remove from registration by means of a post-effective amendment any of the securities being
registered which remain unsold upon the termination of the offering under the Plan.
B. The undersigned Registrant hereby undertakes that, for purposes of determining any
liability under the 1933 Act, each filing of the Registrant’s annual report pursuant to Section
13(a) or Section 15(d) of the 1934 Act that is incorporated by reference into this 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.
C. Insofar as indemnification for liabilities arising under the 1933 Act may be permitted to
directors, officers or controlling persons of the Registrant pursuant to the indemnity provisions
incorporated by reference in Item 6, or otherwise, the Registrant has been advised that in the
opinion of the Commission such indemnification is against public policy as expressed in the 1933
Act and is, therefore, unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the 1933 Act
and will be governed by the final adjudication of such issue.
II-3
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 San Jose, state of California, on this 10th day of May,
2011.
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CADENCE DESIGN SYSTEMS, INC.
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By:
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/s/ Lip-Bu Tan
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Lip-Bu Tan
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President, Chief Executive Officer and Director
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes
and appoints Lip-Bu Tan, Geoffrey G. Ribar and James J. Cowie, and each of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and resubstitution, 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, and to file the same, with all exhibits
thereto, and other 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 connection
therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or any of them, or their or his
substitutes or substitute, may lawfully 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 date indicated.
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Signature
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Title
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Date
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/s/ Lip-Bu Tan
Lip-Bu Tan
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President, Chief Executive
Officer and Director
(Principal Executive Officer)
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May 10, 2011
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/s/ Geoffrey G. Ribar
Geoffrey G. Ribar
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Senior Vice President and Chief
Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
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May 10, 2011
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/s/ Dr. John B. Shoven
Dr. John B. Shoven
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Chairman of the Board of Directors
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May 10, 2011
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/s/ Susan L. Bostrom
Susan L. Bostrom
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Director
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May 10, 2011
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/s/ Donald L. Lucas
Donald L. Lucas
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Director
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May 10, 2011
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/s/ Dr. Alberto Sangiovanni-Vincentelli
Dr. Alberto Sangiovanni-Vincentelli
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Director
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May 10, 2011
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/s/ George M. Scalise
George M. Scalise
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Director
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May 10, 2011
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/s/ Roger S. Siboni
Roger S. Siboni
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Director
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May 10, 2011
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/s/ John A.C. Swainson
John A.C. Swainson
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Director
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May 10, 2011
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EXHIBIT INDEX
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Exhibit Number
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Exhibit
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4.1
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Instruments Defining Rights of Stockholders. Reference is made to the Registrant’s
Registration Statement on Form 8-A filed with the Commission on January 12, 2006 incorporated
by reference pursuant to Item 3(d).
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5.1
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Opinion and consent of Gibson, Dunn & Crutcher LLP.
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23.1
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Consent of Independent Registered Public Accounting Firm
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23.2
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Consent of Gibson, Dunn & Crutcher LLP (contained in Exhibit 5.1).
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24.1
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Power of Attorney (included on the signature pages to this Registration Statement on Form S-8).
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99.1
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Altos Design Automation, Inc. 2006 Stock Plan, as amended December 23, 2009.
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Exhibit 99.1
Altos Design Automation, Inc.
2006 STOCK PLAN
(as amended December 23, 2009)
1.
Purposes of the Plan
. The purposes of this Plan are to attract and retain
the best available personnel for positions of substantial responsibility, to provide
additional incentive to Employees, Directors and Consultants and to promote the success of
the Company’s business. Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of grant. Stock
Purchase Rights may also be granted under the Plan.
2.
Definitions
. As used herein, the following definitions shall apply:
(a) “
Administrator
” means the Board or any of its Committees as shall be
administering the Plan in accordance with Section 4 hereof.
(b) “
Applicable Laws
” means the requirements relating to the administration of
stock option plans under U.S. state corporate laws, U.S. federal and state securities laws,
the Code, any stock exchange or quotation system on which the Common Stock is listed or
quoted and the applicable laws of any other country or jurisdiction where Options or Stock
Purchase Rights are granted under the Plan.
(c) “
Board
” means the Board of Directors of the Company.
(d) “
Change in Control
” means the occurrence of any of the following events:
(i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act),
directly or indirectly, of securities of the Company representing fifty percent (50%) or
more of the total voting power represented by the Company’s then outstanding voting
securities, except that any change in the beneficial ownership of the securities of the
Company as a result of a private financing of the Company that is approved by the Board,
shall not be deemed to be a Change in Control; or
(ii) The consummation of the sale or disposition by the Company of all or
substantially all of the Company’s assets; or
(iii) The consummation of a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of the
surviving entity or its parent) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity or its parent
outstanding immediately after such merger or consolidation.
(e) “
Code
” means the Internal Revenue Code of 1986, as amended. Any reference
to a section of the Code herein will be a reference to any successor or amended section of
the Code.
(f) “
Committee
” means a committee of Directors or of other individuals
satisfying Applicable Laws appointed by the Board in accordance with Section 4 hereof.
(g) “
Common Stock
” means the Common Stock of the Company.
(h) “
Company
” means Altos Design Automation, Inc., a Delaware corporation.
(i) “
Consultant
” means any person who is engaged by the Company or any Parent
or Subsidiary to render consulting or advisory services to such entity.
(j) “
Director
” means a member of the Board.
(k) “
Disability
” means total and permanent disability as defined in Section
22(e)(3) of the Code.
(l) “
Employee
” means any person, including officers and Directors, employed by
the Company or any Parent or Subsidiary of the Company. Neither service as a Director nor
payment of a director’s fee by the Company shall be sufficient to constitute “employment”
by the Company.
(m) “
Exchange Act
” means the Securities Exchange Act of 1934, as amended.
(n) “
Exchange Program
” means a program under which (a) outstanding Options are
surrendered or cancelled in exchange for Options of the same type (which may have lower
exercise prices and different terms), Options of a different type, and/or cash, and/or (b)
the exercise price of an outstanding Option is reduced. The terms and conditions of any
Exchange Program will be determined by the Administrator in its sole discretion.
(o) “
Fair Market Value
” means, as of any date, the value of Common Stock
determined as follows:
(i) If the Common Stock is listed on any established stock exchange or a national
market system, including without limitation the Nasdaq National Market or The Nasdaq
SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing
sales price for such stock (or the closing bid, if no sales were reported) as quoted on
such exchange or system on the day of determination, as reported in
The Wall Street Journal
or such other source as the Administrator deems reliable;
(ii) If the Common Stock is regularly quoted by a recognized securities dealer but
selling prices are not reported, its Fair Market Value shall be the mean between the high
bid and low asked prices for the Common Stock on 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.
(p) “
Incentive Stock Option
” means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
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(q) “
Nonstatutory Stock Option
” means an Option not intended to qualify as an
Incentive Stock Option.
(r) “
Option
” means a stock option granted pursuant to the Plan.
(s) “
Option Agreement
” means a written or electronic agreement between the
Company and an Optionee evidencing the terms and conditions of an individual Option grant.
The Option Agreement is subject to the terms and conditions of the Plan.
(t) “
Optioned Stock
” means the Common Stock subject to an Option or a Stock
Purchase Right.
(u) “
Optionee
” means the holder of an outstanding Option or Stock Purchase
Right granted under the Plan.
(v) “
Parent
” means a “parent corporation,” whether now or hereafter existing,
as defined in Section 424(e) of the Code.
(w) “
Plan
” means this 2006 Stock Plan.
(x) “
Restricted Stock
” means Shares issued pursuant to a Stock Purchase Right
or Shares of restricted stock issued pursuant to an Option.
(y) “
Restricted Stock Purchase Agreement
” means a written or electronic
agreement between the Company and the Optionee evidencing the terms and restrictions
applying to Shares purchased under a Stock Purchase Right. The Restricted Stock Purchase
Agreement is subject to the terms and conditions of the Plan and the notice of grant.
(z) “
Securities Act
” means the Securities Act of 1933, as amended.
(aa) “
Service Provider
” means an Employee, Director or Consultant.
(bb) “
Share
” means a share of the Common Stock, as adjusted in accordance with
Section 13 below.
(cc) “
Stock Purchase Right
” means a right to purchase Common Stock pursuant to
Section 11 below.
(dd) “
Subsidiary
” means a “subsidiary corporation,” whether now or hereafter
existing, as defined in Section 424(f) of the Code.
3.
Stock Subject to the Plan
. Subject to the provisions of Section 13 of the
Plan, the maximum aggregate number of Shares that may be subject to Options or Stock
Purchase Rights and sold under the Plan is 2,254,360 Shares (post the April 2006 3,333.33
for one stock split). 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 Exchange Program, the unpurchased
-3-
Shares that were subject thereto shall become available for future grant or sale under the Plan
(unless the Plan has terminated). However, Shares that have actually been issued under the Plan,
upon exercise of either an Option or Stock Purchase Right, shall not be returned to the Plan and
shall not become available for future distribution under the Plan, except that if unvested Shares
of Restricted Stock are repurchased by the Company at their original purchase price, such Shares
shall become available for future grant under the Plan.
4.
Administration of the Plan
.
(a)
Administrator
. The Plan shall be administered by the Board or a Committee
appointed by the Board, which Committee shall be constituted to comply with Applicable
Laws.
(b)
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, the Administrator shall have the
authority in its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Options and Stock Purchase Rights may
from time to time be granted hereunder;
(iii) to determine the number of Shares to be covered by each such award granted
hereunder;
(iv) to approve forms of agreement for use under the Plan;
(v) to determine the terms and conditions of any Option or Stock Purchase Right
granted hereunder. Such terms and conditions include, but are not limited to, the exercise
price, the time or times when Options or Stock Purchase Rights may be exercised (which may
be based on performance criteria), any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation regarding any Option or Stock Purchase
Right or the Common Stock relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine; provided, however, that unless
otherwise determined by the Administrator, any extension of the term or exercise period of
an Award shall comply with Section 409A of the Code;
(vi) to institute an Exchange Program;
(vii) to prescribe, amend and rescind rules and regulations relating to the Plan,
including rules and regulations relating to sub-plans established for the purpose of
satisfying applicable foreign laws;
(viii) to allow Optionees to satisfy withholding tax obligations by electing to have
the Company withhold from the Shares to be issued upon exercise of an Option or Stock
Purchase Right that number of Shares having a Fair Market Value equal to the minimum amount
required to be withheld. The Fair Market Value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be determined. All
elections by Optionees to have Shares withheld for this purpose shall be made in such form
and under such conditions as the Administrator may deem necessary or advisable; and
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(ix) to construe and interpret the terms of the Plan and Options granted pursuant to
the Plan.
(c)
Effect of Administrator’s Decision
. All decisions, determinations and
interpretations of the Administrator shall be final and binding on all Optionees.
(d)
Section 409A
. Unless otherwise determined by the Administrator, the
Administrator shall comply with Section 409A of the Code in taking or permitting such
actions under the terms of the Plan that would result in a deferral of compensation subject
to Section 209A of the Code.
5.
Eligibility
. Nonstatutory Stock Options and Stock Purchase Rights may be
granted to Service Providers. Incentive Stock Options may be granted only to Employees.
6.
Limitations
.
(a)
Incentive Stock Option Limit
. Each Option shall be designated in the
Option Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are exercisable for the
first time by the Optionee during any calendar year (under all plans of the Company and any
Parent or Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory Stock
Options. For purposes of this Section 6(a), Incentive Stock Options shall be taken into
account in the order in which they were granted. The Fair Market Value of the Shares shall
be determined as of the time the Option with respect to such Shares is granted.
(b)
At-Will Employment
. Neither the Plan nor any Option or Stock Purchase
Right shall confer upon any Optionee any right with respect to continuing the Optionee’s
relationship as a Service Provider with the Company, nor shall it interfere in any way with
his or her right or the Company’s right to terminate such relationship at any time, with or
without cause, and with or without notice.
7.
Term of Plan
. Subject to stockholder approval in accordance with Section
19, the Plan shall become effective upon its adoption by the Board. Unless sooner
terminated under Section 15, it shall continue in effect for a term of ten (10) years from
the later of (i) the effective date of the Plan, or (ii) the earlier of the most recent
Board or stockholder approval of an increase in the number of Shares reserved for issuance
under the Plan.
8.
Term of Option
. The term of each Option shall be stated in the Option
Agreement; provided, however, that the term shall be no more than ten (10) years from the
date of grant thereof. In the case of an Incentive Stock Option granted to an Optionee who,
at the time the Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or Subsidiary, the
term of the Option shall be five (5) years from the date of grant or such shorter term as
may be provided in the Option Agreement.
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9.
Option Exercise Price and Consideration
.
(a)
Exercise Price
. The per share exercise price for the Shares to be issued
upon exercise of an Option shall be such price as is determined by the Administrator, 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 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 exercise price shall be no less than 110% of the
Fair Market Value per Share on the date of grant.
(B) granted to any other Employee, the per Share exercise price shall be no less than
100% of the Fair Market Value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option
(A) granted to a Service Provider who, at the time of 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 exercise price shall be no less than 110% of the
Fair Market Value per Share on the date of grant.
(B) granted to any other Service Provider, the per Share exercise price shall be no
less than 85% of the Fair Market Value per Share on the date of grant.
(iii) Notwithstanding the foregoing, Options may be granted with a per Share exercise
price other than as required above in accordance with and pursuant to a transaction
described in Section 424 of the Code.
(b)
Forms of Consideration
. The consideration to be paid for the Shares to be
issued upon exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be determined at
the time of grant). Such consideration may consist of, without limitation, (1) cash, (2)
check, (3) promissory note, (4) other Shares, provided Shares acquired directly from the
Company (x) have been owned by the Optionee, and not subject to a substantial risk of
forfeiture, for more than six months on the date of surrender, and (y) have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the Shares as to
which such Option shall be exercised, (5) consideration received by the Company under a
cashless exercise program implemented by the Company in connection with the Plan, or (6)
any combination of the foregoing methods of payment. In making its determination as to the
type of consideration to accept, the Administrator shall consider if acceptance of such
consideration may be reasonably expected to benefit the Company.
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10.
Exercise of Option
.
(a)
Procedure for Exercise; Rights as a Stockholder
. Any Option granted
hereunder shall be exercisable according to the terms hereof at such times and under such
conditions as determined by the Administrator and set forth in the Option Agreement. An
Option may not be exercised for a fraction of a Share. Except in the case of Options
granted to officers, Directors and Consultants, Options shall become exercisable at a rate
of no less than 20% per year over five (5) years from the date the Options are granted.
An Option shall be deemed exercised when the Company receives (i) written or electronic notice
of exercise (in accordance with the Option Agreement) from the person entitled to exercise the
Option, and (ii) full payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan. Shares issued upon exercise of an Option shall be
issued in the name of the Optionee or, if requested by the Optionee, in the name of the Optionee
and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company), no right to vote or
receive dividends or any other rights as a stockholder shall exist with respect to the Shares,
notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such
Shares 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 Shares are issued, except as provided in
Section 13 of the Plan.
Exercise of an Option in any manner shall result in a decrease in the number of Shares
thereafter available, both for purposes of the Plan and for sale under the Option, by the number of
Shares as to which the Option is exercised.
(b)
Termination of Relationship as a Service Provider
. If an Optionee ceases
to be a Service Provider, such Optionee may exercise his or her Option within thirty (30)
days of termination, or such longer period of time as specified in the Option Agreement, to
the extent that the Option is vested on the date of termination (but in no event later than
the expiration of the term of the Option as set forth in the Option Agreement). Unless the
Administrator provides otherwise, if on the date of termination the Optionee is not vested
as to his or her entire Option, the Shares covered by the unvested portion of the Option
shall revert to the Plan. If, after termination, the Optionee does not exercise his or her
Option within the time specified by the Administrator, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
(c)
Disability of Optionee
. If an Optionee ceases to be a Service Provider as
a result of the Optionee’s Disability, the Optionee may exercise his or her Option within
six (6) months of termination, or such longer period of time as specified in the Option
Agreement, to the extent the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option Agreement).
Unless the Administrator provides otherwise, if on the date of termination the Optionee is
not vested as to his or her entire Option, the Shares covered by the unvested portion of
the Option shall revert to the Plan. If, after termination, the Optionee does not exercise
his or her Option within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
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(d)
Death of Optionee
. If an Optionee dies while a Service Provider, the
Option may be exercised within six (6) months following Optionee’s death, or such longer
period of time as specified in the Option Agreement, to the extent that the Option is
vested on the date of death (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement) by the Optionee’s designated beneficiary,
provided such beneficiary has been designated prior to Optionee’s death in a form
acceptable to the Administrator. If no such beneficiary has been designated by the
Optionee, then such Option may be exercised by the personal representative of the
Optionee’s estate or by the person(s) to whom the Option is transferred pursuant to the
Optionee’s will or in accordance with the laws of descent and distribution. If, at the time
of death, the Optionee is not vested as to his or her entire Option, the Shares covered by
the unvested portion of the Option shall immediately revert to the Plan. If the Option is
not so exercised within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
(e)
Leaves of Absence
.
(i) Unless the Administrator provides otherwise, vesting of Options granted hereunder
to officers and Directors shall be suspended during any unpaid leave of absence.
(ii) A Service Provider shall not cease to be an Employee in the case of (A) any leave
of absence approved by the Company or (B) transfers between locations of the Company or
between the Company, its Parent, any Subsidiary, or any successor.
(iii) For purposes of Incentive Stock Options, no such leave may exceed ninety (90)
days, unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If reemployment upon expiration of a leave of absence approved by the Company is
not so guaranteed, then three (3) months following 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.
11.
Stock Purchase Rights
.
(a)
Rights to Purchase
. Stock Purchase Rights may be issued either alone, in
addition to, or in tandem with other awards granted under the Plan and/or cash awards made
outside of the Plan. After the Administrator determines that it will offer Stock Purchase
Rights under the Plan, it shall advise the offeree in writing or electronically 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. The terms of the offer shall comply in all
respects with Section 260.140.42 of Title 10 of the California Code of Regulations. 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
within 90 days of the voluntary or involuntary termination of the purchaser’s service with
the Company for any reason (including death or disability). Unless the Administrator
provides otherwise, 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
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indebtedness of the purchaser to the Company. The repurchase option shall lapse at
such rate as the Administrator may determine. Except with respect to Shares purchased by
officers, Directors and Consultants, the repurchase option shall in no case lapse at a rate
of less than 20% per year over five (5) years from the date of purchase.
(c)
Other Provisions
. The Restricted Stock Purchase Agreement shall contain
such other terms, provisions and conditions not inconsistent with the Plan as may be
determined by the Administrator in its sole discretion.
(d)
Rights as a Stockholder
. Once the Stock Purchase Right is exercised, the
purchaser shall have 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 shall be made for a dividend or other right for which the
record date is prior to the date the Stock Purchase Right is exercised, except as provided
in Section 13 of the Plan.
12.
Limited Transferability of Options and Stock Purchase Rights
. Unless
determined otherwise by the Administrator, Options and Stock Purchase Rights may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than
by will or the laws of descent and distribution, and may be exercised during the lifetime
of the Optionee, only by the Optionee. If the Administrator in its sole discretion makes an
Option or Stock Purchase Right transferable, such Option or Stock Purchase Right may only
be transferred (i) by will, (ii) by the laws of descent and distribution, or (iii) to
family members (within the meaning of Rule 701 of the Securities Act) through gifts or
domestic relations orders, as permitted by Rule 701 of the Securities Act.
13.
Adjustments; Dissolution or Liquidation; Merger or Change in Control
.
(a)
Adjustments
. In the event that any dividend or other distribution (whether
in the form of cash, Shares, other securities, or other property), recapitalization, stock
split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Shares or other securities of the Company, or other
change in the corporate structure of the Company affecting the Shares occurs, the
Administrator, in order to prevent diminution or enlargement of the benefits or potential
benefits intended to be made available under the Plan, may (in its sole discretion) adjust
the number and class of Shares that may be delivered under the Plan and/or the number,
class, and price of Shares covered by each outstanding Option or Stock Purchase Right;
provided, however, that the Administrator shall make such adjustments to the extent
required by Section 25102(o) of the California Corporations Code.
(b)
Dissolution or Liquidation
. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Optionee as soon as
practicable prior to the effective date of such proposed transaction. To the extent it has
not been previously exercised, an Option or Stock Purchase Right will terminate immediately
prior to the consummation of such proposed action.
(c)
Merger or Change in Control
. In the event of a merger of the Company with
or into another corporation, or a Change in Control, each outstanding Option and Stock
Purchase Right shall be assumed or an equivalent option substituted by the successor
corporation or a Parent
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or Subsidiary of the successor corporation. In the event that the successor corporation in
a merger or Change in Control refuses to assume or substitute for the Option or Stock
Purchase Right, then the Optionee shall fully vest in and have the right to exercise the
Option or Stock Purchase Right as to all of the Optioned Stock, including Shares as to
which it would not otherwise be vested or exercisable. If an Option or Stock Purchase Right
becomes fully vested and exercisable in lieu of assumption or substitution in the event of
a merger or Change in Control, the Administrator shall notify the Optionee in writing or
electronically that the Option or Stock Purchase Right shall be fully exercisable for a
period of time as determined by the Administrator, and the Option or Stock Purchase Right
shall terminate upon expiration of such period. For the purposes of this paragraph, the
Option or Stock Purchase Right shall be considered assumed if, following the merger or
Change in Control, the option or right confers the right to purchase or receive, for each
Share subject to the Option or Stock Purchase Right immediately prior to the merger or
Change in Control, the consideration (whether stock, cash, or other securities or property)
received in the merger or Change in Control 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
or Change in Control is not solely common stock of the successor corporation or its Parent,
the Administrator may, with the consent of the successor corporation, provide for the
consideration to be received upon the exercise of the Option or Stock Purchase Right, for
each Share 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 or Change in Control.
14.
Time of Granting Options and Stock Purchase Rights
. The date of grant of
an Option or Stock Purchase Right shall, for all purposes, be the date on which the
Administrator makes the determination granting such Option or Stock Purchase Right, or such
later date as is determined by the Administrator. Notice of the determination shall be
given to each Service Provider to whom an Option or Stock Purchase Right is so granted
within a reasonable time after the date of such grant.
15.
Amendment and Termination of the Plan
.
(a)
Amendment and Termination
. The Board may at any time amend, alter, suspend
or terminate the Plan.
(b)
Stockholder Approval
. The Board shall obtain stockholder approval of any
Plan amendment to the extent necessary and desirable to comply with Applicable Laws.
(c)
Effect of Amendment or Termination
. No amendment, alteration, suspension
or termination of the Plan shall impair the rights of any Optionee, unless mutually agreed
otherwise between the Optionee and the Administrator, which agreement must be in writing
and signed by the Optionee and the Company. Termination of the Plan shall not affect the
Administrator’s ability to exercise the powers granted to it hereunder with respect to
Options granted under the Plan prior to the date of such termination.
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16.
Conditions Upon Issuance of Shares
.
(a)
Legal Compliance
. Shares shall not be issued pursuant to the exercise of
an Option or Stock Purchase Right unless the exercise of such Option or Stock Purchase
Right and the issuance and delivery of such Shares shall comply with Applicable Laws and
shall be further subject to the approval of counsel for the Company with respect to such
compliance.
(b)
Investment Representations
. As a condition to the exercise of an Option or
Stock Purchase Right, the Administrator may require the person exercising such Option or
Stock Purchase Right to represent and warrant at the time of any such exercise that the
Shares are being purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a representation
is required.
17.
Inability to Obtain Authority
. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is deemed by the
Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.
18.
Reservation of Shares
. The Company, during the term of this Plan, shall at
all times reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan.
19.
Stockholder Approval
. The Plan shall be subject to approval by the
stockholders of the Company within twelve (12) months after the date the Plan is adopted.
Such stockholder approval shall be obtained in the degree and manner required under
Applicable Laws.
20.
Information to Optionees
. The Company shall provide to each Optionee and
to each individual who acquires Shares pursuant to the Plan, not less frequently than
annually during the period such Optionee has one or more Options or Stock Purchase Rights
outstanding, and, in the case of an individual who acquires Shares pursuant to the Plan,
during the period such individual owns such Shares, copies of annual financial statements.
The Company shall not be required to provide such statements to key employees whose duties
in connection with the Company assure their access to equivalent information.
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