-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N3Aaq8yT0hAJ5My8jp8Slh4keKL9xz4KU3sdEYBAOZG6zAK1KwHyn9pvQSr3kWxq 50j148UpZLVreSr4QB9HyA== /in/edgar/work/0000947871-00-000739/0000947871-00-000739.txt : 20001117 0000947871-00-000739.hdr.sgml : 20001117 ACCESSION NUMBER: 0000947871-00-000739 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20001116 EFFECTIVENESS DATE: 20001116 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ACTIVCARD SA CENTRAL INDEX KEY: 0001107721 STANDARD INDUSTRIAL CLASSIFICATION: [7372 ] IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-50114 FILM NUMBER: 771743 BUSINESS ADDRESS: STREET 1: 24-28 AVENUE DU GENERAL DE GAULLE STREET 2: (33-1) 42-04-8400 CITY: 92156 SURESNES CEDEX STATE: I0 ZIP: 29156 MAIL ADDRESS: STREET 1: C/O ACTIVCARD SA STREET 2: 6531 DUBRARTON CIRCLE CITY: FREEMONT STATE: CA ZIP: 94555 S-8 1 0001.txt FORM S-8 As filed with the Securities and Exchange Commission on November 16, 2000 Registration No. 333-[ ] ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------------------- ActivCard S.A. (Exact name of registrant as specified in its charter) The Republic of France 7372 Inapplicable (State or other jurisdiction (Primary Standard (I.R.S. Employer of incorporation or Industrial Identification No.) organization) Classification Code Number) ----------------------------- 24-28, Avenue Du General De Gaulle 92156 Suresnes Cedex, France (Address of principal executive offices, including zip code) ----------------------------- ActivCard S.A. 1997 FRENCH STOCK OPTION PLAN 1998 FRENCH STOCK OPTION PLAN STOCK OPTION PLAN 1999 STOCK OPTION PLAN 2000 (Full title of the plans) Jean-Gerard Galvez Chairman, President and Chief Executive Officer 6531 Dumbarton Circle Fremont, California 94555 (Name and address of agent for service) (510) 574-0100 (Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE - ------------------------------------------------------------------------------------------------------------------- Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of to be Registered Registered Offering Price Aggregate Registration Per Share Offering Price Fee - ------------------------------------------------------------------------------------------------------------------- American Depositary Shares (ADSs) (1) (1) evidenced by American Depositary 4,079,860 ADSs $10.45 $42,634,537.00 $11,255.52 Receipts (ADRs), each ADS evidencing Ordinary Share, (2) (2) Nominal Value FF6.25 per Ordinary 978,612 ADSs $23.81 $23,300,751.75 $ 6,151.40 Share, of ActivCard S.A. -------------- ---------- $65,935,288.75 $17,406.92 - -------------------------------------------------------------------------------------------------------------------
(1) Pursuant to Rule 457(h), the offering price of ADSs is based on the per share option exercise price. (2) Pursuant to Rule 457(c) and 457(h), offering prices are based on $23.81 per ADS for 987,612 ADSs based on the average of the high and low prices of Common Stock on the Nasdaq consolidated reporting system on November 13, 2000, and is estimated solely for purpose of calculating the registration fee. INTRODUCTORY STATEMENT ActivCard S.A., a societe anonyme organized under the laws of France (the "Registrant"), files this Registration Statement on Form S-8 (the "Registration Statement") relating to the sale of up to 5,058,472 of American Depositary Shares ("ADSs") evidenced by American Depositary Receipts ("ADRs"). Each ADS represents one Ordinary Share, nominal value FF6.25 per share, of the Registrant. The ADSs are deliverable upon the exercise of certain stock options granted under the ActivCard S.A. 1997 French Stock Option Plan, the 1998 French Stock Option Plan, the Stock Option Plan 1999 and the Stock Option Plan 2000 (collectively, the "Plans"). 2 Part I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS Information required by Part I to be contained in the Section 10(a) prospectus is omitted from this Registration Statement in accordance with Rule 428 under the Securities Act of 1933, as amended (hereinafter, the "Securities Act"), and the "Note" to Part I of Form S-8. 3 Part II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference. The following documents, which have been filed with or furnished to the Securities and Exchange Commission (the "Commission") by the Registrant, under Commission File No. 1-11130, are incorporated herein by reference and made a part hereof: (a) the description of the Registrant's Ordinary Shares and the American Depositary Shares contained in the Registration Statement on Form F-1/A, filed on March 14, 2000 (the "Form-1/A") filed by the Registrant with the Commission under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the effective date of this Registration Statement, prior to the filing of a post-effective amendment to this Registration Statement indicating that all securities offered hereby have been sold or deregistering all securities then remaining unsold, shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing of such documents. Any statement contained herein or in any document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed to constitute a part of this Registration Statement, except as so modified or superseded. Item 4. Description of Securities. Not applicable. Item 5. Interests of Named Experts and Counsel. None. Item 6. Indemnification of Directors and Officers. French law generally prohibits the Registrant from entering into indemnification agreements with its directors and officers providing for limitations on personal liability for damages and other costs and expenses that may be incurred by directors and officers arising out of or related to acts or omissions in such capacity. French law also prohibits the STATUTS of the Registrant from providing for the limitation of liability of a member of the Board of Directors. These prohibitions may adversely affect the ability of the Registrant to attract and retain directors. Generally, under French law, directors and officers will not be held personally liable for decisions taken diligently and in the corporate interest of the Registrant. Nevertheless, the Registrant has obtained insurance to cover directors' and officers' legal liability arising from alleged wrongful acts that might occur in their respective capacities. The Registrant believes that this insurance is comparable to that maintained by other companies similar to it. Item 7. Exemption from Registration Claimed. Not applicable. 4 Item 8. Exhibits. Unless otherwise indicated below as being incorporated by reference to another filing of the Registrant with the Commission, each of the following exhibits is filed herewith: 4.1 Amended STATUTS, or charter and by-laws of the Registrant (English translation) (previously filed as an exhibit to the Registrant's Form-1/A (filed with the Commission on March 14, 2000 and incorporated herein by reference). 4.2 Form of Deposit Agreement, among the Registrant and The Bank of New York, as Depositary and the holders from time to time of the American Depositary Receipts issued thereunder (including, as an exhibit thereto, the form of American Depositary Receipt) (filed with the Commission on March 14, 2000 and incorporated herein by reference). 4.3.1 1997 French Stock Option Plan. 4.3.2 1998 French Stock Option Plan. 4.3.3 Stock Option Plan 1999. 4.3.4 Stock Option Plan 2000. 5 Opinion of Shearman & Sterling, counsel to the Registrant as to the legality of the securities registered hereby. 23.1 Consent of Ernst & Young. 24 Powers of attorney (included on signature page) 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 Securities Act; (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in 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 the registration statement; provided, however, that the undertakings set forth in paragraphs (1)(i) and (1)(ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this registration statement; 5 (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; and (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 further 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 therein, and the offering of such securities at the 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 and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. 6 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 Paris, France on July 24, 2000. ActivCard S.A. By: /s/ Jean-Gerard Galvez ------------------------------------------ Jean-Gerard Galvez Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities indicated on July 24, 2000. In addition, each of the undersigned hereby constitutes and appoints Jean-Gerard Galvez and George Wikle jointly and severally, his attorneys-in-fact, each with power of substitution, in his name and in the capacity indicated below, to sign any and all further amendments (including post-effective amendments) to the Registration Statement and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. Signature Title --------- ----- Jean-Gerard Galvez Chairman of the Board of Directors, President and Chief Executive Officer /s/ Jean-Gerard Galvez - -------------------------- Yves Audebert Vice Chairman of the Board of Directors and Chief Technology Officer /s/ Yves Audebert - -------------------------- George Wikle Chief Financial Officer and Secretary and Authorized Representative in the United States /s/ George Wikle - -------------------------- James E. Ousley Director - -------------------------- 7 Sergio Cellini Director /s/ Sergio Cellini - -------------------------- Clifford Gundle Director /s/ Clifford Gundle - -------------------------- Montague Koppel Director /s/ Montague Koppel - -------------------------- Lee Kheng Nam Director /s/ Lee Kheng Nam - -------------------------- Antoine R. Spillman Director /s/ Antoine R. Spillman - -------------------------- 8 EXHIBIT INDEX Exhibit Number Description Page - -------------- ----------- ---- 4.1 Amended STATUTS, or charter and by-laws of the Registrant (English translation) (previously filed as an exhibit to the Registrant's Form-1/A (filed with the Commission on March 14, 2000 and incorporated herein by reference). 4.2 Form of Deposit Agreement, among the Registrant and The Bank of New York, as Depositary and the holders from time to time of the American Depositary Receipts issued thereunder (including, as an exhibit thereto, the form of American Depositary Receipt) (filed with the Commission on March 14, 2000 and incorporated herein by reference). 4.3.1 1997 French Stock Option Plan. 4.3.2 1998 French Stock Option Plan. 4.3.3 Stock Option Plan 1999. 4.3.4 Stock Option Plan 2000. 5 Opinion of Shearman & Sterling, counsel to the Registrant as to the legality of the securities registered hereby. 23.1 Consent of Ernst & Young. 24 Powers of attorney (included on signature page). 9 EX-4.3.1 2 0002.txt 1997 FRENCH STOCK OPTION PLAN Exhibit 4.3.1 ACTIVCARD S.A. 1997 FRENCH STOCK OPTION PLAN (As Amended and Restated July 24, 2000) Pursuant to articles 208-1 to 208-2 of the Law of 24 July 1966 (hereinafter to be referred to as the "Commercial Enterprises Law"), the General Shareholders Meeting of ACTIVCARD (hereinafter to be referred to as "ACTIVCARD S.A."), meeting on May 31, 1996, September 26, 1996 and June 17, 1997, approved the creation of a stock option plan (hereinafter to be referred to as the "1997 Plan") intended for employees of ACTIVCARD S.A. and its subsidiaries, specifically the French subsidiaries ACTIVCARD EUROPE SA and ADV Technologies (hereinafter referred to as the "ActivCard Group"). The purpose of this document is to define the conditions for allocating the Options to the employees of the ActivCard Group within the framework of the 1997 Plan, in accordance with the resolutions of the Board of Directors of ACTIVCARD S.A.: 1. Definitions. The following terms shall have the definitions assigned below: (a) The term "Administrator" shall refer to the Board or any Committee appointed to manage the Plan. (b) The expression "Applicable law" shall refer to any legal conditions relating to management of the stock option plans, in accordance with the current provisions of the Commercial Enterprises Law, the General Tax Code, the applicable rules of the Stock Exchange and French legal provisions applying to Options allocated by corporations subject to French law. (c) The term "Board" shall refer to the Corporation's Board of Directors. (d) The term "Code" shall refer to the General Tax Code. (e) The term "Committee" shall refer to any committee established by the Board to manage the Plan. (f) The term "Corporation" shall refer to ACTIVCARD S.A. (g) The expression "Employment contract" shall mean that the employer-to-employee ties involving the Corporation, a parent company or a Subsidiary have been neither suspended nor terminated. (h) The term "Employee" shall mean any individual, including an officer or a corporate representative, employed by the Corporation, a Parent company or a Subsidiary. (i) The expression "Transactions Law" shall refer to the amended version of the 1934 U.S. "Securities Exchange Act." (j) The expression "Market Value" shall mean the value of a Share, regardless of the date; this value shall be converted, if necessary, using as the exchange rate the purchase rate at noon, as reported by the Federal Reserve Bank of New York for the currency in question. This value shall be set as follows: (i) If the shares are traded on a Stock Exchange or on an established national market, including the EASDAQ, the NASDAQ National Market (trading of over-the-counter shares) or the NASDAQ Small Cap Market on the NASDAQ exchange, the market value of a share shall be the closing sale price of such Share (or the ask price at the close, if no sale has been recorded) quoted on this system or on this stock exchange on the day the value is set, as published by The Wall Street Journal or any other source which the Board deems reliable. (ii) In the event that the Shares are regularly traded by an approved broker but that the sale price is not published, the Share's Market Value shall be the average between the Share's bid and ask prices on the day the value is set, as published by The Wall Street Journal or any other source which the Board deems reliable. (iii) In the absence of an established market for the Shares or Common Stock, the Market Value shall be set in good faith by the Board of Directors. (k) The term "Option" shall refer to a stock option allocated in accordance with the Plan. (l) The expression "Stock Option Agreement" shall mean an agreement entered into in writing or electronically, attesting to the allocation of an Option, signed by the Corporation and the Beneficiary, as well as any addenda corresponding thereto. (m) The expression "Shares covered by the Option" shall refer to the Shares covered by an Option. (n) The term "Beneficiary" shall refer to an Employee who benefitted from an Option within the framework of the Plan. (o) The expression "Parent company" shall refer to a current or future parent company, as defined by Article 208-4 of Law No. 66-537 of July 24, 1966. (p) The term "Plan" shall refer to the 1997 French Stock Option Plan. (q) The term "Share" shall refer to a common share of the Corporation. (r) The term "Subsidiary" shall refer to a current or future subsidiary as defined by Article 208-4 of Law No. 66-537 of July 24, 1966. 2 2. Shares covered by the Plan. (a) Subject to the provisions of article 9 below, the maximum total number of Shares that may be covered by an Option and be subscribed within the framework of the Plan is 1,200,000 Shares. (b) In the event that an Option expires or can no longer be exercised because it was not completely exercised or if it has been returned within the context of an Option exchange program, the Shares not issued may be allocated later within the Plan framework. Shares actually issued within the Plan framework may not be distributed later within the Plan framework. 3. Plan Management. (a) Plan Administrator. The Plan shall be managed (A) by the Board or (B) by a Committee (or a sub-committee of such Committee) appointed by the Board and under its direction; once appointed, the Committee shall remain in operation for the stipulated purposes until such time as the Board resolves otherwise. The Board shall be advised at regular intervals, of at least once per year, as to the Committee's decisions. (b) Authority of the Administrator. Subject to applicable law and the provisions of the Plan (including any other authority granted to the Administrator by this Agreement) and unless stipulated to the contrary by the Board, the Administrator may: (i) select the employees to which to distribute any Options provided for by this Plan; (ii) determine whether, and to what extent, the Options shall be allocated; (iii) determine the number of Shares covered by each Option granted pursuant to the Plan; (iv) approve the form of the Option Agreements used within the Plan framework; (v) determine the conditions of any Option allocated within the framework of such Plan; (vi) define the additional conditions, rules or procedures in order to conform to French regulation or law and offer the Beneficiaries favorable treatment within the framework of such Law, provided, however, that no Option distributed pursuant to such conditions, rules or procedures contain conditions contrary to the provisions of the Plan. (vii) interpret the conditions of the Plan and the Options allocated in accordance with the Plan; and 3 (viii) take any measures that it deems appropriate, provided that they not be inconsistent with the provisions of this Plan. (c) Consequence of the Administrator's Decision. All decisions and interpretations of the Administrator shall be final and binding on all parties involved. 4. Allocation conditions. Options may only be allocated to Employees of the Corporation subject to French tax law. An employee benefiting from an Option may be granted additional Options. Pursuant to article 208-2 of the Commercial Enterprises Law, no option may be approved for an employee that directly or indirectly holds over 10% of the capital of ACTIVCARD S.A. 5. Conditions of the Option. (a) Conditions of the Option. Subject to the Plan conditions, the Administrator shall set the terms and conditions of each Option. If the employment contract is suspended, the schedule for exercising the Options shall be successively carried forward. (b) Validity of the Option. The validity of each Option shall be the duration specified in the Option Agreement and shall not extend beyond seven (7) years after the allocation date of the Option. (c) Non-transferability of the Options and Share subscription rights. Unless the Administrator resolves otherwise, no Option may be sold, pledged, assigned, encumbered with a mortgage, transferred or transmitted in any fashion whatsoever other than through a will or by virtue of the right of transfer or distribution of assets; the Option may only be exercised by the Beneficiary so long as he is alive. (d) Options Allocation Date. For all due purposes, the Allocation Date of an Option shall be the date on which the Board allocates the Option. A notification of allocation of such Option shall be issued to each Employee benefiting from such Option within a reasonable period after the Allocation Date. 6. Share Price and payment conditions; taxes. (a) Share Price. The price per Share shall not be less than 100% of the Market Value per Share on the Allocation Date, nor less than the average price quoted on a stock exchange regulated by a member State of the OECD during the course of the twenty trading sessions prior to the Option Allocation Date, nor less than $5.75 on the Allocation Date. (b) Payment conditions. Subject to current law, the payment conditions for Shares issued following the exercise of an Option shall be set by the Administrator. (c) Taxes. Shares subject to the Plan shall not be issued to the Beneficiary or to a third party unless the Beneficiary or such third party takes every measure, in 4 concert with the Administrator, to discharge all foreign, domestic and local tax obligations as well as any social charges. After the exercise of an Option, the Corporation may withhold or receive from the Beneficiary an amount sufficient to discharge its tax obligations. The Corporation has made its best efforts to ensure that this Option Agreement and the Plan are consistent with current French tax law. The Corporation refuses any liability if it is found not to apply for any reason whatsoever, specifically a change in the law. (d) Registered form and information. Shares acquired within the Option framework shall be kept in registered form by the Corporate Transfer Agent (currently Paribas) until their sale by the Beneficiary. The latter shall inform the Corporation of the detailed conditions for the sale of the Shares in order to allow it to complete the corresponding tax returns. 7. Exercise of the Option. (a) Procedures; Shareholder rights. (i) All Options allocated within the framework of this Agreement shall be deemed as having been acquired and may be exercised in the following fashion: Fifty percent (50%) of the Options shall be exercisable two years after the Allocation Date (as specified in the Allocation Notice addressed to the Beneficiary) and one-forty-eighth (1/48) of the additional Options shall then be exercisable every month for 24 months, provided that the Beneficiary remain a Member of the Corporation's personnel on those dates. Personnel subject to French Law may not sell any Option prior to the end of a three-year period beginning two years after the Allocation Date (or 5 years in all) except pursuant to article 91-ter Ann 2 of the CGI and unless stipulated to the contrary by the Board following a change in the laws. (ii) An Option shall be deemed as exercised when a written notification to this effect has been provided to the Corporation in accordance with the conditions of the Option by such individual as may exercise it and the Corporation has received complete payment for the Shares covered by the Option. Until issuance of the Shares (as attested to by the corresponding registration in the Corporation's books or as confirmed by its Transfer Agent), the Shares subject to the Option shall confer no voting right, right to receive dividends or any other right corresponding to the shareholders, notwithstanding the exercise of the Option. The Corporation shall issue (or cause to issue) its Shares immediately after the exercise of the Option. No adjustment shall be made concerning a dividend or any other right involving a registration date prior to the issuance date of the Shares, unless stipulated otherwise in the Option Agreement or in Section 9(a) below. 5 (b) Exercise of the Option following expiration of Status as Permanent Employee of the Corporation. In the event of a Beneficiary's cessation of employment (other than for reasons of disability), he may, for three (3) months only following the date of cessation of his employment (but in no case beyond the expiration date of the Option's validity as set forth in the Option Agreement), exercise his Option to the extent that he was entitled to exercise it on the date of cessation of his employment or any other period set by the Administrator. In the event that the Beneficiary dies within three (3) months following the cessation of his employment, his heirs or such party as acquires the right to exercise the Option by legacy or inheritance may exercise the Option, to the extent that the Beneficiary could have exercised it on the date of cessation of his employment, within six (6) months after the date of the latter's death, but in no case after the validity expiration date specified in the Option Agreement. (c) Death of the Beneficiary. In the event of a Beneficiary's death, the Option may be exercised at any time within twelve (12) months after the date of death (but in no case after the validity expiration date specified in the Option Agreement), by his heirs or any third parties having received by legacy or inheritance the right to exercise the Option, only to the extent that the Beneficiary could have exercised the Option on the date of his death. If, at the time of death, the Beneficiary could not have completely exercised his Option, the Shares forming part of the portion of the Option still not capable of being exercised shall immediately revert to the Plan. If, after the death, the heirs of the Beneficiary or any third party having acquired by legacy or inheritance the right to exercise the Option fall to exercise it within the specified periods, the Option shall be canceled. 8. Conditions deriving from issuance of the Shares. (a) Shares shall not be issued following the exercise of an Option unless the exercise of such Option and the issuance and delivery of the Shares subject thereto are consistent with current law; moreover, in order to verify such consistency, they may be subject to approval by the Corporation's attorney. (b) The Corporation may make exercise of the Option contingent upon the obligation, by such party as exercises the Option, to declare and attest that it did not subscribe the Shares except for purposes of placement and without intending to sell or distribute them if the Corporation's attorney believes that current law requires such a statement. 9. Adjustments made in the event of a change in capital, merger or sale of assets. (a) In the event that the Corporation undertakes any of the financial transactions mentioned in article 195, paragraphs 5 and 6 and article 196, paragraphs 1 and 3 of the Commercial Enterprises Law, the Board shall review, under the conditions provided for by Law, the current number and Exercise Price of the Options, in order to take into account the effects of the financial transaction in question. At the time of such transaction, the Board may temporarily suspend the rights to 6 exercise the Option for the period during which the capital stock must remain unchanged. In the event of a merger of the Corporation with or within another Company, or the sale of the majority of its assets, each outstanding Option shall be transferred, or an Option or an equivalent right shall be granted by the corporation succeeding it, or a Parent corporation or Subsidiary of such successor. (b) In the event that the successor refuses to transfer the Option or to substitute an equivalent for it, the Beneficiary may completely exercise the Option on all Shares forming part thereof, including those on which it would not normally have been able to exercise any right or which it would not have been able to subscribe. In such a case, where the Option may be completely exercised in the absence of transfer or replacement, the Administrator shall inform the Beneficiary in writing that he has a period of fifteen (15) days after such notification to exercise the Option. After such period, the Option shall be canceled. For purposes of this paragraph, an Option shall be deemed as transferred if, following a merger or sale of assets, the Option or the right permits, for each Share resulting from the exercise of the Option under the conditions immediately preceding the merger or sale of the assets, the subscription or receipt of consideration (in shares, cash or other securities or assets) received during the merger or sale of the Shares by the holders of the Shares for each Share held on the date the transaction was realized (and if the holders had a choice, the type of consideration chosen by the holder of the majority of the outstanding Shares); provided, however, that the consideration received upon the merger or the sale of assets not consist solely of the common stock of the succeeding Corporation or parent corporation, the Administrator may, subject to agreement by the successor, determine that the consideration to be received in exchange for the exercise of the Option for each Share resulting from exercising the Option shall solely consist of the common stock of the successor or of the parent corporation, equivalent in market value to the consideration received per share by the bearers of the Shares after the merger or sale of assets. 10. Validity of the Plan. The Options may be allocated within the Plan framework for a period of five (5) years after the date on which the Plan is approved by the Corporation's Extraordinary General Shareholders Meeting (June 17, 1997). 11. Amendment, suspension or cancellation of the Plan. The Board may at any time amend, suspend or cancel the Plan. To the extent necessary in order to conform to applicable law, the Corporation shall ensure that the shareholders approve any amendment of the Plan in the fashion and to the extent required. No Option may be allocated during a suspension of the Plan or after its cancellation. An amendment, suspension or cancellation of the Plan shall not affect the Options already allocated, which shall remain in force for all legal purposes as if the Plan had not been amended, suspended or canceled, unless the Beneficiary and the Administrator jointly resolve otherwise. Such agreement shall be drafted in writing and signed by the Beneficiary and the Corporation. 7 12. Reservation of the Shares. (a) The entire time that this Plan is in force, the Corporation shall reserve and keep available a sufficient number of Shares as to address the Plan conditions. (b) Failure by the Corporation to obtain from a government with jurisdiction such authority as the Corporation's attorney deems necessary for the issuance and legal sale of the Plan Shares in question shall release the Corporation of any liability deriving from failure to issue or sell the Shares for which such authority was unable to be obtained. 13. Absence of impact on employment conditions. The Plan shall grant no Beneficiary any right with respect to maintaining employment with the Corporation. The Plan shall not in any way interfere with the right of the Beneficiary or the Corporation to end their professional relations at anytime. 14. Information intended for the Beneficiaries. The Corporation shall provide each Beneficiary, during the period when such Beneficiary is holding one or more valid Options, copies of the financial statements presented at the Ordinary General Shareholders Meeting convoked in order to approve the Corporation's financial statements. 15. Transferability of Options. Notwithstanding any provision in this Plan or the Option Agreement to the contrary, Options may not be transferred, pledged, assigned or otherwise disposed of except by will or the laws of descent and distribution; provided, however, that Options may be, with the approval of the Committee, transferred to a member or members of an Optionee's immediate family (as defined below) or to one or more trusts or partnerships established in whole or in part for the benefit of one or more of such immediate family members (collectively, "Permitted Transferees"), subject to such rules and procedures as may from time to time be adopted or imposed by the Committee. If an Option is transferred to a Permitted Transferee, it shall be further transferable only by will or the laws of descent and distribution or, for no consideration, to another Permitted Transferee of the Optionee. An Optionee shall notify the Corporation (or its designee) in writing prior to any proposed transfer of an Option to a Permitted Transferee and shall furnish the Corporation, upon request, with information concerning such Permitted Transferee's financial condition and investment experience. For purposes of the Plan, an Optionee's "immediate family" means spouse, lineal descendant, father, mother, brother or sister of the transferor; provided, however, that if the Corporation adopts a different definition of "immediate family" (or similar term) in connection with the transferability of employee stock options awarded to Optionees, such definition shall apply, without further action by the Board, to the Plan. 8 ACTIVCARD S.A. 1997 STOCK OPTION PLAN U.S. APPENDIX 1. This Appendix governs the grant of Options to United States Participants This Appendix constitutes the part of the Plan that will govern the subscription of Shares by, and the grant of Options to, United States Participants (the "U.S. Options") and incorporates all the terms of the Plan (as set forth above) including as modified in accordance with the provisions of this Appendix. 2. The limit on the number of Shares which can be issued The maximum aggregate number of Shares (which, for this purpose, means fully paid ordinary Shares in the capital of the Corporation) which may be issued under U.S. Options, intending to qualify as "incentive stock options" ("ISOs") within the meaning of Section 422 of the U.S. Internal Revenue Code of 1986, as amended (the "U.S. Tax Code"), under the Plan is 1,200,000, subject to such adjustments made in a manner consistent with Section 422 of the U.S. Tax Code in the event of any issue or reorganization, as determined by the Board in its sole discretion. To the extent permitted under Section 422 of the U.S. Tax Code, any Shares subject to an ISO Award (as defined in Section 7 below) which lapses, expires or is otherwise terminated without the issuance of such Shares may, in its sole discretion of the Board, again be available for purposes of this limit. 3. How U.S. Options will be granted All U.S. Options shall be evidenced by an instrument(s) in such form or forms as may from time to time be approved by the Board or the Committee that, among other things, shall set out the manner in which a Participant may exercise his U.S. Option and the form of payment for the Shares. 4. Administration of this Appendix The Board or the Committee shall (i) administer this Appendix, (ii) establish from time to time such rules and regulations as it may deem appropriate for the proper administration of this Appendix and (iii) make such determinations under (including, without limitation, factual determinations), and such interpretations of, and take such actions in connection with this Appendix or the U.S. Options as it may deem necessary or advisable, including, without limitation, determinations, interpretations and actions to ensure that the U.S. Options intended to qualify as ISOs shall so qualify. 5. Section 16 Compliance If any officer, director or shareholder of the Corporation is awarded U.S. Options and therefore becomes subject to Section 16 of the U.S. Securities Exchange Act 1934, as amended (the "Exchange Act"), the Corporation shall take all appropriate action to ensure that such awards under this Appendix are exempt from Section l6b under the Exchange Act. 6. Form of U.S. Options U.S. Options may be either ISOs under Section 422 of the U.S. Tax Code or "nonqualified stock options". The Board or the Committee shall have the sole authority and discretion as to whether and to whom to grant either type of U.S. Option; provided, however, that the terms of each U.S. Option shall specify clearly the type of U.S. Option granted and no U.S. Option shall permit a "tandem" exercise arrangement within the meaning of Temp. Treas. Reg. section 14a.422A-1(Q/A-21), (Q/A-39). 7. Compliance with the ISO Rules The following provisions shall apply to any U.S. Option that is intended to qualify as an ISO (each, an "ISO Award"): (a) The aggregate market value (determined as of the date the ISO Award is granted in accordance with the requirements of Section 422 of the U.S. Tax Code) of the Shares underlying one or more ISO Award that is first exercisable in any calendar year (under all stock option plans of the Corporation and its Subsidiaries (within the meaning of Section 424 of the U.S. Tax Code) shall not exceed U.S. $100,000 (or the equivalent) and, in the event that such limit is exceeded, such U.S. Options shall be treated, to the extent of such excess, as nonqualified stock options. (b) The exercise price of the Shares covered by each ISO Award shall not be less than 100% of the market value (determined as of the date the ISO Award is granted in accordance with the requirements of Section 422 of the U.S. Tax Code) of such Shares determined as of the date the ISO Award is granted in accordance with the requirements of Section 422 of the U.S. Tax Code (110% in the case of an ISO Award granted to a Ten Percent Shareholder). (c) An ISO Award may not be exercisable more than 10 years after the date such ISO Award is granted (5 years in the case of an ISO granted to a Ten Percent Shareholder). (d) The terms of such ISO Award shall provide that it is not transferable except by will or pursuant to the laws of descent and distribution, and shall not permit any U.S. Option designated to be an ISO to be exercised more than three months following the Participant's termination of employment with the Corporation or its Subsidiaries within the meaning of Section 424 of the U.S. Tax Code (more than 12 months following the Participant's death or disability, as disability is defined in 2 Section 22(e)(3) of the U.S. Tax Code). The terms of such ISO Award shall further provide that, during the Participant's lifetime, such ISO Award shall only be exercisable by the Participant. (e) This Appendix may be further modified to ensure that any U.S. Option that is intended to be an ISO under this Appendix will comply with the requirements of Section 422 of the U.S. Tax Code. 8. Term of U.S. Option: addition of consistent provisions Subject to the provisions of Section 7 above, in the case of an ISO, the Corporation shall determine at the date the ISO Award is granted the term during which a U.S. Option may be exercised and whether any of the U.S. Option shall be exercisable in one or more installments. A U.S. Option may also be subject to any other provision imposed by the Corporation that is consistent with the purpose and intent of this Appendix. 9. Exercise Method of U.S. Options A Participant may, in accordance with the terms of an applicable Award Agreement and subject to the sole discretion of the Board or the Committee, exercise his U.S. Option, (i) by a cash payment to the Corporation of the exercise price(s) of all Shares purchased pursuant to the exercise of the U.S. Option, (ii) in Shares already owned by the Participant or (iii) by any combination of cash or Shares. 10. U.S. Withholding Taxes: disqualifying dispositions It shall be a condition to the obligation of the Corporation to deliver Shares pursuant to any U.S. Option under the Plan that the Participant pays to the Corporation (or the Subsidiary that employs the Participant) such amount as may be required by the Corporation or such Subsidiary for the purpose of satisfying any liability for any U.S. federal, state or local taxes of any kind required to be withheld with respect thereto. Any U.S. Option granted under the Plan may require the Corporation (or the Subsidiary that employs the Participant), or, the Board in its sole discretion may permit the Participant to elect, in accordance with any applicable rules established by the Corporation, to withhold or to pay all or a part of the amount of the withholding taxes in Shares. Such election may be denied by the Corporation in its sole discretion, or may be made subject to certain conditions specified by the Board or the Committee. The applicable ISO Award shall provide that if a Participant makes a disposition, within the meaning of Section 424(c) of the U.S. Tax Code and the regulations promulgated thereunder, of any Shares issued to such Participant pursuant to the exercise of an ISO Award within the two-year period commencing on the date of grant or within the one-year period commencing on the date of transfer of such Share to the Participant pursuant to such exercise, the Participant shall, within 10 days of such disposition, notify the Corporation of it (or the Subsidiary that employs the Participant), by delivery of written notice to the Corporation or such Subsidiary at its principal executive office. 3 11. Securities Laws Compliance No Shares may be issued or transferred in connection with the exercise of a U.S. Option, unless the Corporation shall have determined that such issue or transfer is in compliance with or pursuant to an exemption from all applicable U.S. federal and state securities laws. 12. Certain definitions For the purposes of the U.S. Options, the following terms shall have the following meanings (notwithstanding any contrary provision in the Plan): "Participants" means the Employees who are selected by the Board or the Committee to receive U.S. Options. "Subsidiary" means any company (other than the Corporation) in an unbroken chain of companies beginning with the Corporation, where each of the companies other than the last company in the unbroken chain owns stock possessing 50% or more of the total combined voting powers of all classes of stock in one or the other companies in such chain. "Ten Percent Shareholder" means a Participant who, at the date an ISO Award is granted, owns (within the meaning of Section 422(b)(6) of the U.S. Tax Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Corporation or its Subsidiaries (as such term is defined in Section 424 of the U.S. Tax Code). EX-4.3.2 3 0003.txt 1998 FRENCH STOCK OPTION PLAN Exhibit 4.3.2 ACTIVCARD S.A. 1998 FRENCH STOCK OPTION PLAN (As Amended and Restated July 24, 2000) Pursuant to articles 208-1 to 208-2 of the Law of 24 July 1966 (hereinafter to be referred to as the "Commercial Enterprises Law"), the General Shareholders Meeting of ACTIVCARD (hereinafter to be referred to as "ACTIVCARD S.A."), meeting on June 4, 1998, approved the creation of a stock option plan (hereinafter to be referred to as the "1998 Plan") intended for employees of ACTIVCARD S.A. and its subsidiaries, specifically the French subsidiaries ACTIVCARD EUROPE SA and ADV Technologies (hereinafter referred to as the "ActivCard Group"). The purpose of this document is to define the conditions for allocating the Options to the employees of the ActivCard Group within the framework of the 1998 Plan, in accordance with the resolutions of the Board of Directors of ACTIVCARD S.A.: 1. Definitions. The following terms shall have the definitions assigned below: (a) The term "Administrator" shall refer to the Board or any Committee appointed to manage the Plan. (b) The expression "Applicable law" shall refer to any legal conditions relating to management of the stock option plans, in accordance with the current provisions of the Commercial Enterprises Law, the General Tax Code, the applicable rules of the Stock Exchange and French legal provisions applying to Options allocated by corporations subject to French law. (c) The term "Board" shall refer to the Corporation's Board of Directors. (d) The term "Code" shall refer to the General Tax Code. (e) The term "Committee" shall refer to any committee established by the Board to manage the Plan. (f) The term "Corporation" shall refer to ACTIVCARD S.A. (g) The expression "Employment contract" shall mean that the employer-to-employee ties involving the Corporation, a parent company or a Subsidiary have been neither suspended nor terminated. (h) The term "Employee" shall mean any individual, including an officer or a corporate representative, employed by the Corporation, a Parent company or a Subsidiary. (i) The expression "Transactions Law" shall refer to the amended version of the 1934 U.S. "Securities Exchange Act." (j) The expression "Market Value" shall mean the value of a Share, regardless of the date; this value shall be converted, if necessary, using as the exchange rate the purchase rate at noon, as reported by the Federal Reserve Bank of New York for the currency in question. This value shall be set as follows: (i) If the shares are traded on a Stock Exchange or on an established national market, including the EASDAQ, the NASDAQ National Market (trading of over-the-counter shares) or the NASDAQ Small Cap Market on the NASDAQ exchange, the market value of a share shall be the closing sale price of such Share (or the ask price at the close, if no sale has been recorded) quoted on this system or on this stock exchange on the day the value is set, as published by The Wall Street Journal or any other source which the Board deems reliable. (ii) In the event that the Shares are regularly traded by an approved broker but that the sale price is not published, the Share's Market Value shall be the average between the Share's bid and ask prices on the day the value is set, as published by The Wall Street Journal or any other source which the Board deems reliable. (iii) In the absence of an established market for the Shares or Common Stock, the Market Value shall be set in good faith by the Board of Directors. (k) The term "Option" shall refer to a stock option allocated in accordance with the Plan. (l) The expression "Stock Option Agreement" shall mean an agreement entered into in writing or electronically, attesting to the allocation of an Option, signed by the Corporation and the Beneficiary, as well as any addenda corresponding thereto. (m) The expression "Shares covered by the Option" shall refer to the Shares covered by an Option. (n) The term "Beneficiary" shall refer to an Employee who benefitted from an Option within the framework of the Plan. (o) The expression "Parent company" shall refer to a current or future parent company, as defined by Article 208-4 of Law No. 66-537 of July 24, 1966. (p) The term "Plan" shall refer to the 1998 French Stock Option Plan. (q) The term "Share" shall refer to a common Share of the Corporation. (r) The term "Subsidiary" shall refer to a current or future subsidiary as defined by Article 208-4 of Law No. 66-537 of July 24, 1966. 2 2. Shares covered by the Plan. (a) Subject to the provisions of article 9 below, the maximum total number of Shares that may be covered by an Option and be subscribed within the framework of the Plan is 1,200,000 Shares. (b) In the event that an Option expires or can no longer be exercised because it was not completely exercised or if it has been returned within the context of an Option exchange program, the Shares not issued may be allocated later within the Plan framework. Shares actually issued within the Plan framework may not be distributed later within the Plan framework. 3. Plan Management. (a) Plan Administrator. The Plan shall be managed (A) by the Board or (B) by a Committee (or a sub-committee of such Committee) appointed by the Board and under its direction; once appointed, the Committee shall remain in operation for the stipulated purposes until such time as the Board resolves otherwise. The Board shall be advised at regular intervals, of at least once per year, as to the Committee's decisions. (b) Authority of the Administrator. Subject to applicable law and the provisions of the Plan (including any other authority granted to the Administrator by this Agreement) and unless stipulated to the contrary by the Board, the Administrator may: (i) select the employees to which to distribute any Options provided for by this Plan; (ii) determine whether, and to what extent, the Options shall be allocated; (iii) determine the number of Shares covered by each Option granted pursuant to the Plan; (iv) approve the form of the Option Agreements used within the Plan framework; (v) determine the conditions of any Option allocated within the framework of such Plan; (vi) define the additional conditions, rules or procedures in order to conform to French regulation or law and offer the Beneficiaries favorable treatment within the framework of such Law, provided, however, that no Option distributed pursuant to such conditions, rules or procedures contain conditions contrary to the provisions of the Plan; (vii) interpret the conditions of the Plan and the Options allocated in accordance with the Plan; and 3 (viii) take any measures that it deems appropriate, provided that they not be inconsistent with the provisions of this Plan. (c) Consequence of the Administrator's decisions. All decisions and interpretations of the Administrator shall be final and binding on all parties involved. 4. Allocation conditions. Options may only be allocated to Employees of the Corporation subject to French tax law. An employee benefitting from an Option may be granted additional Options. Pursuant to article 208-2 of the Commercial Enterprises Law, no option may be approved for an employee that directly or indirectly holds over 10% of the capital of ACTIVCARD S.A. 5. Conditions of the Option. (a) Conditions of the Option. Subject to the Plan conditions, the Administrator shall set the terms and conditions of each Option. If the employment contract is suspended, the schedule for exercising the Options shall be successively carried forward. (b) Validity of the Option. The validity of each Option shall be the duration specified in the Option Agreement and shall not extend beyond seven (7) years after the allocation date of the Option. (c) Non-transferability of the Options and Share subscription rights. Unless the Administrator resolves otherwise, no Option may be sold, pledged, assigned, encumbered with a mortgage, transferred or transmitted in any fashion whatsoever other than through a will or by virtue of the right of transfer or distribution of assets; the Option may only be exercised by the Beneficiary so long as he is alive. (d) Options Allocation Date. For all due purposes, the Allocation Date of an Option shall be the date on which the Board allocates the Option. A notification of allocation of such Option shall be issued to each Employee benefitting from such Option within a reasonable period after the Allocation Date. 6. Share Price and payment conditions; taxes. (a) Share Price. The price per Share shall not be less than 100% of the Market Value per Share on the Allocation Date, nor less than the average price quoted on a stock exchange regulated by a member State of the OECD during the course of the twenty trading sessions prior to the Option Allocation Date. (b) Payment conditions. Subject to current law, the payment conditions for Shares issued following the exercise of an Option shall be set by the Administrator. (c) Taxes. Shares subject to the Plan shall not be issued to the Beneficiary or to a third party unless the Beneficiary or such third party takes every measure, in concert with the Administrator, to discharge all foreign, domestic and local tax 4 obligations as well as any social charges. After the exercise of an Option, the Corporation may withhold or receive from the Beneficiary an amount sufficient to discharge its tax obligations. The Corporation has made its best efforts to ensure that this Option Agreement and the Plan are consistent with current French tax law. The Corporation refuses any liability if it is found not to apply for any reason whatsoever, specifically a change in the law. (d) Registered form and information. Shares acquired within the Option framework shall be kept in registered form by the Corporate Transfer Agent (currently Paribas) until their sale by the Beneficiary. The latter shall inform the Corporation of the detailed conditions for the sale of the Shares in order to allow it to complete the corresponding tax returns. 7. Exercise of the Option. (a) Procedures; Shareholder Rights. (i) All Options allocated within the framework of this Agreement shall be deemed as having been acquired and may be exercised in the following fashion: Fifty percent (50%) of the Options shall be exercisable two years after the Allocation Date (as specified in the Allocation Notice addressed to the Beneficiary) and one-forth-eighth (1/48) of the additional Options shall then be exercisable every month for 24 months, provided that the Beneficiary remain a Member of the Corporation's personnel on those dates. Personnel subject to French Law may not sell any Option prior to the end of a three-year period beginning two years after the Allocation Date (or 5 years in all) except pursuant to article 91-ter Ann 2 of the CGI and unless stipulated to the contrary by the Board following a change in the laws. (ii) An Option shall be deemed as exercised when a written notification to this effect has been provided to the Corporation in accordance with the conditions of the Option by such individual as may exercise it and the Corporation has received complete payment for the Shares covered by the Option. Until issuance of the Shares (as attested to by the corresponding registration in the Corporation's books or as confirmed by its Transfer Agent), the Shares subject to the Option shall confer no voting right, right to receive dividends or any other right corresponding to the shareholders, notwithstanding the exercise of the Option. The Corporation shall issue (or cause to issue) its Shares immediately after the exercise of the Option. No adjustment shall be made concerning a dividend or any other right involving a registration date prior to the issuance date of the Shares, unless stipulated otherwise in the Option Agreement or in Section 9(a) below. 5 (b) Exercise of the Option Following Expiration of Status as Permanent Employee of the Corporation. In the event of a Beneficiary's cessation of employment (other than for reasons of disability), he may, for three (3) months only following the date of cessation of his employment (but in no case beyond the expiration date of the Option's validity as set forth in the Option Agreement), exercise his Option to the extent that he was entitled to exercise it on the date of cessation of his employment or any other period set by the Administrator. In the event that the Beneficiary dies within three (3) months following the cessation of his employment, his heirs or such party as acquires the right to exercise the Option by legacy or inheritance may exercise the Option, to the extent that the Beneficiary could have exercised it on the date of cessation of his employment, within six (6) months after the date of the latter's death, but in no case after the validity expiration date specified in the Option Agreement. (c) Death of the Beneficiary. In the event of a Beneficiary's death, the Option may be exercised at any time within twelve (12) months after the date of death (but in no case after the validity expiration date specified in the Option Agreement), by his heirs or any third parties having received by legacy or inheritance the right to exercise the Option, only to the extent that the Beneficiary could have exercised the Option on the date of his death. If, at the time of death, the Beneficiary could not have completely exercised his Option, the Shares forming part of the portion of the Option still not capable of being exercised shall immediately revert to the Plan. If, after the death, the heirs of the Beneficiary or any third party having acquired by legacy or inheritance the right to exercise the Option fail to exercise it within the specified periods, the Option shall be cancelled. 8. Conditions Deriving from Issuance of the Shares. (a) Shares shall not be issued following the exercise of an Option unless the exercise of such Option and the issuance and delivery of the Shares subject thereto are consistent with current law; moreover, in order to verify such consistency, they may be subject to approval by the Corporation's attorney. (b) The Corporation may make exercise of the Option contingent upon the obligation, by such party as exercises the Option, to declare and attest that it did not subscribe the Shares except for purposes of placement and without intending to sell or distribute them if the Corporation's attorney believes that current law requires such a statement. 9. Adjustments made in the event of a change in capital, merger or sale of assets. (a) In the event that the Corporation undertakes any of the financial transactions mentioned in article 195, paragraphs 5 and 6 and article 196, paragraphs 1 and 3 of the Commercial Enterprises Law, the Board shall review, under the conditions provided for by Law, the current number and Exercise Price of the Options, in order to take into account the effects of the financial transaction in question. At the time of such transaction, the Board may temporarily suspend the rights to 6 exercise the Option for the period during which the capital stock must remain unchanged. (b) In the event of a merger of the Corporation with or within another Company, or the sale of the majority of its assets, each outstanding Option shall be transferred, or an Option or an equivalent right shall be granted by the corporation succeeding it, or a Parent corporation or Subsidiary of such successor. In the event that the successor refuses to transfer the Option or to substitute an equivalent for it, the Beneficiary may completely exercise the Option on all Shares forming part thereof, including those on which it would not normally have been able to exercise any right or which it would not have been able to subscribe. In such a case, where the Option may be completely exercised in the absence of transfer or replacement, the Administrator shall inform the Beneficiary in writing that he has a period of fifteen (15) days after such notification to exercise the Option. After such period, the Option shall be canceled. For purposes of this paragraph, an Option shall be deemed as transferred if, following a merger or sale of assets, the Option or the right permits, for each Share resulting from the exercise of the Option under the conditions immediately preceding the merger or sale of the assets, the subscription or receipt of consideration (in shares, cash or other securities or assets) received during the merger or sale of the shares by the holders of the Shares for each Share held on the date the transaction was realized (and if the holders had a choice, the type of consideration chosen by the holder of the majority of the outstanding Shares); provided, however, that the consideration received upon the merger or the sale of assets not consist solely of the common stock of the succeeding Corporation or parent corporation, the Administrator may, subject to agreement by the successor, determine that the consideration to be received in exchange for the exercise of the Option for each Share resulting from exercising the Option shall solely consist of the common stock of the successor or of the parent corporation, equivalent in market value to the consideration received per share by the bearers of the Shares after the merger or sale of assets. 10. Validity of the Plan. The Options may be allocated within the Plan framework for a period of five (5) years after the date on which the Plan is approved by the Corporation's Extraordinary General Shareholders Meeting (June 4, 1998). 11. Amendment, suspension or cancellation of the Plan. The Board may at any time amend, suspend or cancel the Plan. To the extent necessary in order to conform to applicable law, the Corporation shall ensure that the shareholders approve any amendment of the Plan in the fashion and to the extent required. No Option may be allocated during a suspension of the Plan or after its cancellation. An amendment, suspension or cancellation of the Plan shall not affect the Options already allocated, which shall remain in force for all legal purposes as if the Plan had not been amended, suspended or canceled, unless the Beneficiary and the Administrator jointly 7 resolve otherwise. Such agreement shall be drafted in writing and signed by the Beneficiary and the Corporation. 12. Reservation of the Shares. (a) The entire time that this Plan is in force, the Corporation shall reserve and keep available a sufficient number of Shares as to address the Plan conditions. (b) Failure by the Corporation to obtain from a government with jurisdiction such authority as the Corporation's attorney deems necessary for the issuance and legal sale of the Plan Shares in question shall release the Corporation of any liability deriving from failure to issue or sell the Shares for which such authority was unable to be obtained. 13. Absence of impact on employment conditions. The Plan shall grant no Beneficiary any right with respect to maintaining employment with the Corporation. The Plan shall not in any way interfere with the right of the Beneficiary or the Corporation to end their professional relations at any time. 14. Information intended for the Beneficiaries. The Corporation shall provide each Beneficiary, during the period when such Beneficiary is holding one or more valid Options, copies of the financial statements presented at the Ordinary General Shareholders Meeting convoked in order to approve the Corporation's financial statements. 15. Transferability of Options. Notwithstanding any provision in this Plan or the Option Agreement to the contrary, Options may not be transferred, pledged, assigned or otherwise disposed of except by will or the laws of descent and distribution; provided, however, that Options may be, with the approval of the Committee, transferred to a member or members of an Optionee's immediate family (as defined below) or to one or more trusts or partnerships established in whole or in part for the benefit of one or more of such immediate family members (collectively, "Permitted Transferees"), subject to such rules and procedures as may from time to time be adopted or imposed by the Committee. If an Option is transferred to a Permitted Transferee, it shall be further transferable only by will or the laws of descent and distribution or, for no consideration, to another Permitted Transferee of the Optionee. An Optionee shall notify the Corporation (or its designee) in writing prior to any proposed transfer of an Option to a Permitted Transferee and shall furnish the Corporation, upon request, with information concerning such Permitted Transferee's financial condition and investment experience. For purposes of the Plan, an Optionee's "immediate family" means spouse, lineal descendant, father, mother, brother or sister of the transferor; provided, however, that if the Corporation adopts a different definition of "immediate family" (or similar term) in connection with the transferability of employee stock options awarded to Optionees, such definition shall apply, without further action by the Board, to the Plan. ACTIVCARD S.A. 1998 FRENCH STOCK OPTION PLAN U.S. APPENDIX 1. This Appendix governs the grant of Options to United States Participants This Appendix constitutes the part of the Plan that will govern the subscription of Shares by, and the grant of Options to, United States Participants (the "U.S. Options") and incorporates all the terms of the Plan (as set forth above) including as modified in accordance with the provisions of this Appendix. 2. The limit on the number of Shares which can be issued The maximum aggregate number of Shares (which, for this purpose, means fully paid ordinary Shares in the capital of the Corporation) which may be issued under U.S. Options, intending to qualify as "incentive stock options" ("ISOs") within the meaning of Section 422 of the U.S. Internal Revenue Code of 1986, as amended (the "U.S. Tax Code"), under the Plan is 1,200,000, subject to such adjustments made in a manner consistent with Section 422 of the U.S. Tax Code in the event of any issue or reorganization, as determined by the Board in its sole discretion. To the extent permitted under Section 422 of the U.S. Tax Code, any Shares subject to an ISO Award (as defined in Section 7 below) which lapses, expires or is otherwise terminated without the issuance of such Shares may, in its sole discretion of the Board, again be available for purposes of this limit. 3. How U.S. Options will be granted All U.S. Options shall be evidenced by an instrument(s) in such form or forms as may from time to time be approved by the Board of the Committee that, among other things, shall set out the manner in which a Participant may exercise his U.S. Option and the form of payment for the Shares. 4. Administration of this Appendix The Board or the Committee shall (i) administer this Appendix, (ii) establish from time to time such rules and regulations as it may deem appropriate for the proper administration of this Appendix and (iii) make such determinations under (including, without limitation, factual determinations), and such interpretations of, and take such actions in connection with, this Appendix or the U.S. Options as it may deem necessary or advisable, including without limitation, determinations, interpretations and actions to ensure that U.S. Options intended to qualify as ISOs shall so qualify. 5. Section 16 Compliance If any officer, director or shareholder of the Corporation is awarded U.S. Options and therefore becomes subject to Section 16 of the U.S. Securities Exchange Act 1934, as amended (the "Exchange Act"), the Corporation shall take all appropriate action to ensure that such awards under this Appendix are exempt from Section l6b under the Exchange Act. 6. Form of U.S. Options U.S. Options may be either ISOs under Section 422 of the U.S. Tax Code or "nonqualified stock options". The Board or the Committee shall have the sole authority and discretion as to whether and to whom to grant either type of U.S. Option; provided, however, that the terms of each U.S. Option shall specify clearly the type of U.S. Option granted and no U.S. Option shall permit a "tandem" exercise arrangement within the meaning of Temp. Treas. Reg. section 14a.422A-1(Q/A-21), (Q/A-39). 7. Compliance with the ISO Rules The following provisions shall apply to any U.S. Option that is intended to qualify as an ISO (each, an "ISO Award"): (a) The aggregate market value (determined as of the date the ISO Award is granted in accordance with the requirements of Section 422 of the U.S. Tax Code) of the Shares underlying one or more ISO Award that is first exercisable in any calendar year (under all stock option plans of the Corporation and its Subsidiaries (within the meaning of Section 424 of the U.S. Tax Code)) shall not exceed U.S. $100,000 (or the equivalent) and, in the event that such limit is exceeded, such U.S. Options shall be treated, to the extent of such excess, as nonqualified stock options. (b) The exercise price of the Shares covered by each ISO Award shall not be less than 100% of the market value (determined as of the date the ISO Award is granted in accordance with the requirements of Section 422 of the U.S. Tax Code) of such Shares determined as of the date the ISO Award is granted in accordance with the requirements of Section 422 of the U.S. Tax Code (110% in the case of an ISO Award granted to a Ten Percent Shareholder). (c) An ISO Award may not be exercisable more than 10 years after the date such ISO Award is granted (5 years in the case of an ISO granted to a Ten Percent Shareholder). (d) The terms of such ISO Award shall provide that it is not transferable except by will or pursuant to the laws of descent and distribution, and shall not permit any U.S. Option designated to be an ISO to be exercised more than three months following the Participant's termination of employment with the Corporation or its Subsidiaries within the meaning of Section 424 of the U.S. Tax Code (more than 2 12 months following the Participant's death or disability, as disability is defined in Section 22(e)(3) of the U.S. Tax Code). The terms of such ISO Award shall further provide that, during the Participant's lifetime, such ISO Award shall only be exercisable by the Participant. (e) This Appendix may be further modified to ensure that any U.S. Option that is intended to be an ISO under this Appendix will comply with the requirements of Section 422 of the U.S. Tax Code. 8. Term of U.S. Option: addition of consistent provisions Subject to the provisions of Section 7 above, in the case of an ISO, the Corporation shall determine at the date the ISO Award is granted the term during which a U.S. Option may be exercised and whether any of the U.S. Option shall be exercisable in one or more installments. A U.S. Option may also be subject to any other provision imposed by the Corporation that is consistent with the purpose and intent of this Appendix. 9. Exercise Method of U.S. Options A Participant may, in accordance with the terms of an applicable Award Agreement and subject to the sole discretion of the Board or the Committee, exercise his U.S. Option, (i) by a cash payment to the Corporation of the exercise price(s) of all Shares purchased pursuant to the exercise of the U.S. Option, (ii) in Shares already owned by the Participant or (iii) by any combination of cash or Shares. 10. U.S. Withholding Taxes: disqualifying dispositions It shall be a condition to the obligation of the Corporation to deliver Shares pursuant to any U.S. Option under the Plan that the Participant pays to the Corporation (or the Subsidiary that employs the Participant) such amount as may be required by the Corporation or such Subsidiary for the purpose of satisfying any liability for any U.S. federal, state or local taxes of any kind required to be withheld with respect thereto. Any U.S. Option granted under the Plan may require the Corporation (or the Subsidiary that employs the Participant), or, the Board, in its sole discretion, may permit the Participant to elect, in accordance with any applicable rules established by the Corporation, to withhold or to pay all or a part of the amount of the withholding taxes in Shares. Such election may be denied by the Corporation in its sole discretion, or may be made subject to certain conditions specified by the Board. The applicable ISO Award shall provide that if a Participant makes a disposition, within the meaning of Section 424(c) of the U.S. Tax Code and the regulations promulgated thereunder, of any Shares issued to such Participant pursuant to the exercise of an ISO Award within the two-year period commencing on the date of grant or within the one-year period commencing on the date of transfer of such Share to the Participant pursuant to such exercise, the Participant shall, within 10 days of such disposition, notify 3 the Corporation of it (or the Subsidiary that employs the Participant), by delivery of written notice to the Corporation or such Subsidiary at its principal executive office. 11. Securities Laws Compliance No Shares may be issued or transferred in connection with the exercise of a U.S. Option, unless the Corporation shall have determined that such issue or transfer is in compliance with or pursuant to an exemption from all applicable U.S. federal and state securities laws. 12. Certain definitions For the purposes of the U.S. Options, the following terms shall have the following meanings (notwithstanding any contrary provision in the Plan): "Participants" means the Employees who are selected by the Board or the Committee to receive U.S. Options. "Subsidiary" means any company (other than the Corporation) in an unbroken chain of companies beginning with the Corporation, where each of the companies other than the last company in the unbroken chain owns stock possessing 50% or more of the total combined voting powers of all classes of stock in one or the other companies in such chain. "Ten Percent Shareholder" means a Participant who, at the date an ISO Award is granted, owns (within the meaning of Section 422(b)(6) of the U.S. Tax Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Corporation or its Subsidiaries (as such term is defined in Section 424 of the U.S. Tax Code. 4 EX-4.3.3 4 0004.txt STOCK OPTION PLAN 1999 Exhibit 4.3.3 ACTIVCARD S.A. STOCK OPTION PLAN 1999 (As Amended and Restated July 24, 2000) (a) Preamble In compliance with sections 208-1 to 208-8-2 of French law n(degree)66-537 dated July 24, 1966 (hereafter "Company Law"), an Extraordinary Shareholders Meeting of ACTIVCARD (hereafter indiscriminately "ACTIVCARD S.A." or the "Company") dated May 19, 1999, has authorized, in its 16th resolution, the Board of Directors (hereafter the "Board") to implement a plan of options to subscribe ACTIVARD shares (hereafter the "1999 Stock Option Plan") to the benefit of all or part of the employees and managers (hereafter the "Beneficiaries") of ACTIVCARD S.A. and of the linked companies as defined under section 208-4 of Company Law (the Company and the linked companies, hereafter together the "Group"), including the subsidiaries ACTVICARD EUROPE S.A. and ACTIVCARD Inc. The purpose of this document is to define the conditions of allocation and the exercise of the options to subscribe for ACTIVCARD shares allocated to the Beneficiaries with respect to the 2000 Stock Option Plan (hereafter the "Options"), as well as the conditions of transfer of the shares subscribed by exercise of the Options (hereafter the "Shares"), pursuant to the decisions of the Board. Pursuant to the Extraordinary Shareholders Meeting' authorization of May 19, 1999, the maximum amount of Options authorized, shall not give the right, at each date of allocation considered, to subscribe a number of Shares superior to 1,100,000 shares. Each Option allows the subscription of one Share. The Board decided to adopt the principle of allocating in blocks: (a) Block A including Options allocated to Beneficiaries who are French fiscal residents as of the date of allocation by the Board of Directors ("Options A"), and (b) Block B including Options allocated to Beneficiaries who are non-French fiscal residents as of the date of allocation by the Board of Directors ("Options B"). The Options are not negotiable and, unless specified by the Board and permitted by applicable law, can be transferred solely by succession. (b) Beneficiaries of the Options The Board will fix, during its meetings (hereafter the "Date of Allocation"), pursuant to the proposal of the Remuneration Committee, the list of Beneficiaries of Options A and Options B, specifying the number of Options allocated to each Beneficiary and the price of exercise of the Options. This list will be divided into two sub-lists corresponding respectively to the Beneficiaries of Options A and Options B. This list will be attached to the minutes of the each Board's meeting proceeding to allocations. (c) Price of exercise of the Options Following the modalities of determination of the exercise price of the Options fixed by the Extraordinary Shareholders Meeting dated May 19, 1999, the special report of the statutory auditors to this meeting and the Board's report to this meeting, the exercise price for the Options A and Options B will be fixed by the Board of Directors as the date the Options are granted. The price shall be equal to the average of the closing quotation price of the Share during the 20 quotation days on the EASDAQ preceding the day of allocation of Options by the Board of Directors, converted in French francs at the applicable exchange rate of the day preceding the allocation date by the Board of Directors. This exercise price fixed for the duration of the validity of Options A and Options B shall be, as the case may be, modified pursuant to the provisions of section 208-5 of the Company Law. (d) Modalities of exercise of Options A and Options B and of transfer of the Shares subscribed to by exercise of the Options (A) Block A (i) Any Beneficiary, subject to remaining an employee or manager of a company of the Group will be able to exercise, in whole or in part, at once or in several blocks, the following quantities of Options A: o Fifty percent (50%) of Options A as of the second (2nd) anniversary of the Date of Allocation (indicated in the notification of allocation sent to the Beneficiary); and o one forty-eighth (1/48) additionally each month during the following 24 months, subject to the Beneficiary remaining an employee or manager of a company of the Group on each such vesting date. After the seventh (7) anniversary of the Date of Allocation, all Options A not exercised shall be irrevocably null and void and shall be canceled without payment therefor. (ii) Except as provided below, if the Beneficiary breaks his contract of employment or resigns from his managing position with a company of the Group, the right to exercise his Options A, which may be exercised pursuant to clause (i) hereabove, will cease automatically three (3) months after the date of breach of his contract of employment or resignation from his managing position with a company of the Group, as the case may be. As an exception, the right to exercise the Options A will remain, in the event of death or invalidity corresponding to the events provided in section 91 ter of Annexe II of the General French Tax Code, under the following conditions: 2 o in case of death, and to the extent that the Beneficiaries could personally exercise the Options A as of the date of death, the heirs shall have twelve (12) months from the date of the death to exercise the allocated Options A; o in case of invalidity and under the aforementioned conditions, the Beneficiary will be able to, during the validity period of the Options A, exercise all or part of the Options A that will have been allocated to him with respect to this plan; o with respect to the two paragraphs hereabove, the Options A will be considered as open to exercise as of the Date of Allocation (iii) The Board will be able to temporarily suspend the exercise of the Options A during the periods of realization of operations of share capital or implying the detachment of a right. (iv) The Shares subscribed by the exercise of the Options A will be allowed to transfer or to conversion into bearer form, except as provided in clause (ii) hereinabove, only after the fifth (5th) anniversary of the Date of Allocation. (B) Block B (i) Any Beneficiary, subject to remaining an employee or manager of a company of the Group will be able to exercise, in whole or part, at once or in several blocks, the Options B that were allocated to him pursuant to the following modalities: o twenty five percent (25%) of Options B as of the first (1st) anniversary of the Date of Allocation (indicated in the notification of allocation sent to the Beneficiary); and o one forty-eighth (1/48) additionally each month during the following 36 months, subject to the Beneficiary remaining an employee or manager of a company of the Group at those dates. After the seventh (7) anniversary of the Date of Allocation, the Options B not exercised shall be irrevocably null and void and shall be canceled without payment therefor. (ii) Except as provided below, if the Beneficiary breaks his contract of employment or terminates his employment with a company of the Group, the right to exercise his Options B, which may be exercised pursuant to clause (i) hereabove, will cease automatically three (3) months after the date of breach of his contact of employment or his termination of employment with a company of the Group, as the case may be. As an exception, the right to exercise the Options B will remain, in the event of death or invalidity corresponding to the events provided in section 91 ter of Annexe II of the General French Tax Code, under the following conditions: 3 o in case of death, and to the extent that the Beneficiaries could personally exercise the Options B as of the date of the death, the heirs shall have a twelve (12) months period as of the date of the death to exercise the allocated Options B; o in case of invalidity and under the aforementioned conditions, the Beneficiary will be able to, during the validity period of the Options B, exercise all or part of the Options B that will have been allocated to him with respect to this plan; o with respect to the two paragraphs hereabove, the Options B will be considered as open to exercise as of the Date of Allocation (iii) The Board will have the right to temporarily suspend the exercise of the Options B during the periods of realization of operations of share capital or implying the detachment of a right. (iv) The Shares subscribed by the exercise of the Options B will be allowed to transfer or to conversion into bearer form, except as provided in clause (ii) hereinabove, as of their issuance. (v) Any Beneficiary who will exercise his Options B in the United States will be required upon exercise of his Options, to provide the Company with an investor letter pursuant to which he represents and agrees (1) that he has subscribed to the Shares for investment and not with a view to the distribution thereof, and (2) that any resale of such shares will be made by such Beneficiary pursuant to a registration statement under the U.S. Securities Act of 1933, as amended, or applicable "blue sky" laws (or an exemption from registration) and (3) that such purchaser will deliver to each person to whom it transfers Shares a notice substantially to the effect of this legend. (vi) The Board shall have the right to set any other terms and conditions with respect to the allocation, transfer or exercise of Options B. (e) Several provisions common to the Options A and Options B (i) The Board was authorized by the Extraordinary General Meeting to determine the modalities of the Options A and Options B. The Board, using such authorization allowing it, notably to restrict, limit, or prohibit (a) the exercise of Options A and Options B or (b) the sale of the Shares resulting from the exercise of Options A and Options B, by the Beneficiaries during certain periods or as of certain events, has decided that the Options allocated with respect to Block A and Block B, shall not be exercised should the Company be subject to a spin-off, be part, as an absorbed company to a merger, or in the event of the sale of the majority of its assets. 4 However, in the event of a merger or a spin-off of the Company by contribution of absorption, or of a sale of the majority of its assets, the successor of the Company shall grant an option on its own securities or on that of a linked company as defined under section 208-4 of Company Law for each Option A or Option B allocated or an equivalent right. Should the successor refuse to allocate the Options or to substitute them an equivalent, the Beneficiary may immediately exercise entirely the Options A or Options B, including those which could not be exercised yet. In such case, the Board or any person designated by it, shall inform the Beneficiary in writing that he disposes of a fifteen (15) day period following such notification to exercise his Options A and Options B. After such period, the Options A or Options B shall be null and void and canceled without payment therefor. Moreover, the Board or any person appointed by it for this purpose may, as the case may be, (a) require for the exercise of the Options A or Options B by the Beneficiary, that he provides all necessary elements so as to guarantee that he will carry out all tax and social obligations that will result from the exercise of the Options or the sale of Shares subscribed through the exercise of the Options and (b) after express authorization of the Beneficiary, retain on the gains of the sale of the Shares the potential quota of social charges or the tax due by the Beneficiary. (ii) To the extent practicable, the Beneficiaries shall be informed at least one (1) week before the effectiveness of any temporary or definitive restriction, limitation or prohibition for the exercise of the Options A and Options B or the sale of the Shares resulting from the exercise of the Options A and Options B. (iii) The Shares subscribed through the exercise of the Options A and Options B allocated with respect to this 2000 Stock Option Plan shall be in registered form and will receive dividends as of the first day of the fiscal year of their subscription. (iv) The Board retains the right, as the case may be, and notwithstanding the provisions of clause d(A)(ii) hereabove, (a) to anticipate the dates of exercise of the Options allocated to all or part of the Beneficiaries of the Blocks A and B and (b) to maintain the possibility to exercise the Options A and Options B. (v) The Board shall be able to, as the case may be, pursuant to the clauses (ii) and (iv) hereabove and the rules of the EASDAQ Dealing Code and any other applicable law, suspend or prolong during certain periods the exercise of the Options A and Options B. (vi) Notwithstanding any provision in this Plan or the Option Agreement to the contrary, Options may not be transferred, pledged, assigned or otherwise disposed of except by will or the laws of descent and distribution; provided, however, that Options may be, with the approval of the Board (or its designee), transferred to a member or members of an Optionee's immediate family (as defined below) or to 5 one or more trusts or partnerships established in whole or in part for the benefit of one or more of such immediate family members (collectively, "Permitted Transferees"), subject to such rules and procedures as may from time to time be adopted or imposed by the Board. If an Option is transferred to a Permitted Transferee, it shall be further transferable only by will or the laws of descent and distribution or, for no consideration, to another Permitted Transferee of the Optionee. An Optionee shall notify the Corporation (or its designee) in writing prior to any proposed transfer of an Option to a Permitted Transferee and shall furnish the Corporation, upon request, with information concerning such Permitted Transferee's financial condition and investment experience. For purposes of the Plan, an Optionee's "immediate family" means spouse, lineal descendant, father, mother, brother or sister of the transferor; provided, however, that if the Corporation adopts a different definition of "immediate family" (or similar term) in connection with the transferability of employee stock options awarded to Optionees, such definition shall apply, without further action by the Board, to the Plan. 6 ACTIVCARD S.A. STOCK OPTION PLAN 1999 U.S. APPENDIX 1. This Appendix governs the grant of Options to United States Participants This Appendix constitutes the part of the 1999 Stock Option Plan that will govern the subscription of Shares by, and the grant of Options to, United States Participants (the "U.S. Options") and incorporates all the terms of the 1999 Stock Option Plan (as set forth above) including as modified in accordance with the provisions of this Appendix. 2. The limit on the number of Shares which can be issued The maximum aggregate number of Shares (which, for this purpose, means fully paid ordinary Shares in the capital of the Company) which may be issued under U.S. Options, intending to qualify as "incentive stock options" ("ISOs") within the meaning of Section 422 of the U.S. Internal Revenue Code of 1986, as amended (the "U.S. Tax Code"), under the 1999 Stock Option Plan is 1,100,000, subject to such adjustments made in a manner consistent with Section 422 of the U.S. Tax Code in the event of any issue or reorganization, as determined by the Board in its sole discretion. To the extent permitted under Section 422 of the U.S. Tax Code, any Shares subject to an ISO Award (as defined in Section 7 below) which lapses, expires or is otherwise terminated without the issuance of such Shares may, in its sole discretion of the Board, again be available for purposes of this limit. 3. How U.S. Options will be granted All U.S. Options shall be evidenced by an instrument(s) in such form or forms as may from time to time be approved by the Board that, among other things, shall set out the manner in which a Participant may exercise his U.S. Option and the form of payment for the Shares. 4. Administration of this Appendix The Board shall (i) administer this Appendix, (ii) establish from time to time such rules and regulations as it may deem appropriate for the proper administration of this Appendix and (iii) make such determinations under (including, without limitation, factual determinations), and such interpretations of, and take such actions in connection with, this Appendix or the U.S. Options as it may deem necessary or advisable, including, without limitation, determinations, interpretations and actions to ensure that U.S. Options intended to qualify as ISOs shall so qualify. 5. Section 16 Compliance If any officer, director or shareholder of the Company is awarded U.S. Options and therefore becomes subject to Section 16 of the U.S. Securities Exchange Act 1934, as amended (the "Exchange Act"), the Company shall take all appropriate action to ensure that such awards under this Appendix are exempt from Section l6b under the Exchange Act. 6. Form of U.S. Options U.S. Options may be either ISOs under Section 422 of the U.S. Tax Code or "nonqualified stock options". The Board shall have the sole authority and discretion as to whether and to whom to grant either type of U.S. Option; provided, however, that the terms of each U.S. Option shall specify clearly the type of U.S. Option granted and no U.S. Option shall permit a "tandem" exercise arrangement within the meaning of Temp. Treas. Reg. section 14a.422A-1(Q/A-21), (Q/A-39). 7. Compliance with the ISO Rules The following provisions shall apply to any U.S. Option that is intended to qualify as an ISO (each, an "ISO Award"): (a) The aggregate fair market value (determined as of the date the ISO Award is granted in accordance with the requirements of Section 422 of the U.S. Tax Code) of the Shares underlying one or more ISO Award that is first exercisable in any calendar year (under all stock option plans of the Company and its Subsidiaries (within the meaning of Section 424 of the U.S. Tax Code) shall not exceed U.S. $100,000 (or the equivalent) and, in the event that such limit is exceeded, such U.S. Options shall be treated, to the extent of such excess, as nonqualified stock options. (b) The exercise price of the Shares covered by each ISO Award shall not be less than 100% of the fair market value (determined as of the date the ISO Award is granted in accordance with the requirements of Section 422 of the U.S. Tax Code) of such Shares determined as of the date the ISO Award is granted in accordance with the requirements of Section 422 of the U.S. Tax Code (110% in the case of an ISO Award granted to a Ten Percent Shareholder). (c) An ISO Award may not be exercisable more than 10 years after the date such ISO Award is granted (5 years in the case of an ISO granted to a Ten Percent Shareholder). (d) The terms of such ISO Award shall provide that it is not transferable except by will or pursuant to the laws of descent and distribution, and shall not permit any U.S. Option designated to be an ISO to be exercised more than three months following the Participant's termination of employment with the Company or its Subsidiaries within the meaning of Section 424 of the U.S. Tax Code (more than 2 12 months following the Participant's death or disability, as disability is defined in Section 22(e)(3) of the U.S. Tax Code). The terms of such ISO Award shall further provide that, during the Participant's lifetime, such ISO Award shall only be exercisable by the Participant. (e) This Appendix may be further modified to ensure that any U.S. Option that is intended to be an ISO under this Appendix will comply with the requirements of Section 422 of the U.S. Tax Code. 8. Term of U.S. Option: addition of consistent provisions Subject to the provisions of Section 7 above, in the case of an ISO, the Company shall determine at the date the ISO Award is granted the term during which a U.S. Option may be exercised and whether any of the U.S. Option shall be exercisable in one or more installments. A U.S. Option may also be subject to any other provision imposed by the Company that is consistent with the purpose and intent of this Appendix. 9. Exercise Method of U.S. Options A Participant may, in accordance with the terms of an applicable Award Agreement and subject to the sole discretion of the Board, exercise his U.S. Option, (i) by a cash payment to the Company of the exercise price(s) of all Shares purchased pursuant to the exercise of the U.S. Option, (ii) in Shares already owned by the Participant or (iii) by any combination of cash or Shares. 10. U.S. Withholding Taxes: disqualifying dispositions It shall be a condition to the obligation of the Company to deliver Shares pursuant to any U.S. Option under the 1999 Stock Option Plan that the Participant pays to the Company (or the Subsidiary that employs the Participant) such amount as may be required by the Company or such Subsidiary for the purpose of satisfying any liability for any U.S. federal, state or local taxes of any kind required to be withheld with respect thereto. Any U.S. Option granted under the 1999 Stock Option Plan may require the Company (or the Subsidiary that employs the Participant), or, the Board, in its sole discretion, may permit the Participant to elect, in accordance with any applicable rules established by the Company, to withhold or to pay all or a part of the amount of the withholding taxes in Shares. Such election may be denied by the Company in its sole discretion, or may be made subject to certain conditions specified by the Board. The applicable ISO Award shall provide that if a Participant makes a disposition, within the meaning of Section 424(c) of the U.S. Tax Code and the regulations promulgated thereunder, of any Shares issued to such Participant pursuant to the exercise of an ISO Award within the two-year period commencing on the date of grant or within the one-year period commencing on the date of transfer of such Share to the Participant pursuant to such exercise, the Participant shall, within 10 days of such disposition, notify 3 the Company of it (or the Subsidiary that employs the Participant), by delivery of written notice to the Company or such Subsidiary at its principal executive office. 11. Securities Laws Compliance No Shares may be issued or transferred in connection with the exercise of a U.S. Option, unless the Company shall have determined that such issue or transfer is in compliance with or pursuant to an exemption from all applicable U.S. federal and state securities laws. 12. Certain definitions For the purposes of the U.S. Options, the following terms shall have the following meanings (notwithstanding any contrary provision in the 1999 Stock Option Plan): "Participants" means the Beneficiaries who are selected by the Board to receive U.S. Options. "Subsidiary" means any companies (other than the Company) in an unbroken chain of companies beginning with the Company, where each of the other than the last company in the unbroken chain owns stock possessing 50% or more of the total combined voting powers of all classes of stock in one or the other companies in such chain. "Ten Percent Shareholder" means a Participant who, at the date an ISO Award is granted, owns (within the meaning of Section 422(b)(6) of the U.S. Tax Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or its Subsidiaries (as such term is defined in Section 424 of the U.S. Tax Code). 4 EX-4.3.4 5 0005.txt STOCK OPTION PLAN 2000 Exhibit 4.3.4 ACTIVCARD S.A. STOCK OPTION PLAN 2000 (a) Preamble In compliance with sections 208-1 to 208-8-2 of French law n(degree)66-537 dated July 24, 1966 (hereafter "Company Law"), an Extraordinary Shareholders Meeting of ACTIVCARD (hereafter indiscriminately "ACTIVCARD S.A." or the "Company") dated May 3, 2000, has authorized, in its 15th resolution, the Board of Directors (hereafter the "Board") to implement a plan of options to subscribe ACTIVARD shares (hereafter the "2000 Stock Option Plan") to the benefit of all or part of the employees and managers (hereafter the "Beneficiaries") of ACTIVCARD S.A. and of the linked companies as defined under section 208-4 of Company Law (the Company and the linked companies, hereafter together the "Group"), including the subsidiaries ACTVICARD EUROPE S.A. and ACTIVCARD Inc. The purpose of this document is to define the conditions of allocation and the exercise of the options to subscribe for ACTIVCARD shares allocated to the Beneficiaries with respect to the 2000 Stock Option Plan (hereafter the "Options"), as well as the conditions of transfer of the shares subscribed by exercise of the Options (hereafter the "Shares"), pursuant to the decisions of the Board. Pursuant to the Extraordinary Shareholders Meeting' authorization of May 3, 2000, the maximum amount of Options authorized, shall not give the right, at each date of allocation considered, to subscribe a number of Shares superior to 2,000,000 shares. Each Option allows the subscription of one Share. The Board decided to adopt the principle of allocating in blocks: (a) Block A including Options allocated to Beneficiaries who are French fiscal residents as of the date of allocation by the Board of Directors ("Options A"), and (b) Block B including Options allocated to Beneficiaries who are non-French fiscal residents as of the date of allocation by the Board of Directors ("Options B"). The Options are not negotiable and, unless specified by the Board and permitted by applicable law, can be transferred solely by succession. (b) Beneficiaries of the Options The Board will fix, during its meetings (hereafter the "Date of Allocation"), pursuant to the proposal of the Remuneration Committee, the list of Beneficiaries of Options A and Options B, specifying the number of Options allocated to each Beneficiary and the price of exercise of the Options. This list will be divided into two sub-lists corresponding respectively to the Beneficiaries of Options A and Options B. This list will be attached to the minutes of the each Board's meeting proceeding to allocations. (c) Price of exercise of the Options Following the modalities of determination of the exercise price of the Options fixed by the Extraordinary Shareholders Meeting dated May 3, 2000, the special report of the statutory auditors to this meeting and the Board's report to this meeting, the exercise price for the Options A and Options B will be fixed by the Board of Directors as the date the Options are granted. The price shall be equal to the average of the closing quotation price of the Share during the 20 quotation days on the EASDAQ preceding the day of allocation of Options by the Board of Directors, converted in French francs at the applicable exchange rate of the day preceding the allocation date by the Board of Directors. This exercise price fixed for the duration of the validity of Options A and Options B shall be, as the case may be, modified pursuant to the provisions of section 208-5 of the Company Law. (d) Modalities of exercise of Options A and Options B and of transfer of the Shares subscribed to by exercise of the Options (A) Block A (i) Any Beneficiary, subject to remaining an employee or manager of a company of the Group will be able to exercise, in whole or in part, at once or in several blocks, the following quantities of Options A: o Fifty percent (50%) of Options A as of the second (2nd) anniversary of the Date of Allocation (indicated in the notification of allocation sent to the Beneficiary); and o one forty-eighth (1/48) additionally each month during the following 24 months, subject to the Beneficiary remaining an employee or manager of a company of the Group on each such vesting date. After the seventh (7) anniversary of the Date of Allocation, all Options A not exercised shall be irrevocably null and void and shall be canceled without payment therefor. (ii) Except as provided below, if the Beneficiary breaks his contract of employment or resigns from his managing position with a company of the Group, the right to exercise his Options A, which may be exercised pursuant to clause (i) hereabove, will cease automatically three (3) months after the date of breach of his contract of employment or resignation from his managing position with a company of the Group, as the case may be. As an exception, the right to exercise the Options A will remain, in the event of death or invalidity corresponding to the events provided in section 91 ter of Annexe II of the General French Tax Code, under the following conditions: 2 o in case of death, and to the extent that the Beneficiaries could personally exercise the Options A as of the date of death, the heirs shall have twelve (12) months from the date of the death to exercise the allocated Options A; o in case of invalidity and under the aforementioned conditions, the Beneficiary will be able to, during the validity period of the Options A, exercise all or part of the Options A that will have been allocated to him with respect to this plan; o with respect to the two paragraphs hereabove, the Options A will be considered as open to exercise as of the Date of Allocation (iii) The Board will be able to temporarily suspend the exercise of the Options A during the periods of realization of operations of share capital or implying the detachment of a right. (iv) The Shares subscribed by the exercise of the Options A will be allowed to transfer or to conversion into bearer form, except as provided in clause (ii) hereinabove, only after the fifth (5th) anniversary of the Date of Allocation. (B) Block B (i) Any Beneficiary, subject to remaining an employee or manager of a company of the Group will be able to exercise, in whole or part, at once or in several blocks, the Options B that were allocated to him pursuant to the following modalities: o twenty five percent (25%) of Options B as of the first (1st) anniversary of the Date of Allocation (indicated in the notification of allocation sent to the Beneficiary); and o one forty-eighth (1/48) additionally each month during the following 36 months, subject to the Beneficiary remaining an employee or manager of a company of the Group at those dates. After the seventh (7) anniversary of the Date of Allocation, the Options B not exercised shall be irrevocably null and void and shall be canceled without payment therefor. (ii) Except as provided below, if the Beneficiary breaks his contract of employment or terminates his employment with a company of the Group, the right to exercise his Options B, which may be exercised pursuant to clause (i) hereabove, will cease automatically three (3) months after the date of breach of his contact of employment or his termination of employment with a company of the Group, as the case may be. As an exception, the right to exercise the Options B will remain, in the event of death or invalidity corresponding to the events provided in section 91 ter of Annexe II of the General French Tax Code, under the following conditions: 3 o in case of death, and to the extent that the Beneficiaries could personally exercise the Options B as of the date of the death, the heirs shall have a twelve (12) months period as of the date of the death to exercise the allocated Options B; o in case of invalidity and under the aforementioned conditions, the Beneficiary will be able to, during the validity period of the Options B, exercise all or part of the Options B that will have been allocated to him with respect to this plan; o with respect to the two paragraphs hereabove, the Options B will be considered as open to exercise as of the Date of Allocation (iii) The Board will have the right to temporarily suspend the exercise of the Options B during the periods of realization of operations of share capital or implying the detachment of a right. (iv) The Shares subscribed by the exercise of the Options B will be allowed to transfer or to conversion into bearer form, except as provided in clause (ii) hereinabove, as of their issuance. (v) Any Beneficiary who will exercise his Options B in the United States will be required upon exercise of his Options, to provide the Company with an investor letter pursuant to which he represents and agrees (1) that he has subscribed to the Shares for investment and not with a view to the distribution thereof, and (2) that any resale of such shares will be made by such Beneficiary pursuant to a registration statement under the U.S. Securities Act of 1933, as amended, or applicable "blue sky" laws (or an exemption from registration) and (3) that such purchaser will deliver to each person to whom it transfers Shares a notice substantially to the effect of this legend. (vi) The Board shall have the right to set any other terms and conditions with respect to the allocation, transfer or exercise of Options B. (e) Several provisions common to the Options A and Options B (i) The Board was authorized by the Extraordinary General Meeting to determine the modalities of the Options A and Options B. The Board, using such authorization allowing it, notably to restrict, limit, or prohibit (a) the exercise of Options A and Options B or (b) the sale of the Shares resulting from the exercise of Options A and Options B, by the Beneficiaries during certain periods or as of certain events, has decided that the Options allocated with respect to Block A and Block B, shall not be exercised should the Company be subject to a spin-off, be part, as an absorbed company to a merger, or in the event of the sale of the majority of its assets. 4 However, in the event of a merger or a spin-off of the Company by contribution of absorption, or of a sale of the majority of its assets, the successor of the Company shall grant an option on its own securities or on that of a linked company as defined under section 208-4 of Company Law for each Option A or Option B allocated or an equivalent right. Should the successor refuse to allocate the Options or to substitute them an equivalent, the Beneficiary may immediately exercise entirely the Options A or Options B, including those which could not be exercised yet. In such case, the Board or any person designated by it, shall inform the Beneficiary in writing that he disposes of a fifteen (15) day period following such notification to exercise his Options A and Options B. After such period, the Options A or Options B shall be null and void and canceled without payment therefor. Moreover, the Board or any person appointed by it for this purpose may, as the case may be, (a) require for the exercise of the Options A or Options B by the Beneficiary, that he provides all necessary elements so as to guarantee that he will carry out all tax and social obligations that will result from the exercise of the Options or the sale of Shares subscribed through the exercise of the Options and (b) after express authorization of the Beneficiary, retain on the gains of the sale of the Shares the potential quota of social charges or the tax due by the Beneficiary. (ii) To the extent practicable, the Beneficiaries shall be informed at least one (1) week before the effectiveness of any temporary or definitive restriction, limitation or prohibition for the exercise of the Options A and Options B or the sale of the Shares resulting from the exercise of the Options A and Options B. (iii) The Shares subscribed through the exercise of the Options A and Options B allocated with respect to this 2000 Stock Option Plan shall be in registered form and will receive dividends as of the first day of the fiscal year of their subscription. (iv) The Board retains the right, as the case may be, and notwithstanding the provisions of clause d(A)(ii) hereabove, (a) to anticipate the dates of exercise of the Options allocated to all or part of the Beneficiaries of the Blocks A and B and (b) to maintain the possibility to exercise the Options A and Options B. (v) The Board shall be able to, as the case may be, pursuant to the clauses (ii) and (iv) hereabove and the rules of the EASDAQ Dealing Code and any other applicable law, suspend or prolong during certain periods the exercise of the Options A and Options B. (vi) Notwithstanding any provision in this Plan or the Option Agreement to the contrary, Options may not be transferred, pledged, assigned or otherwise disposed of except by will or the laws of descent and distribution; provided, however, that Options may be, with the approval of the Board (or its designee), transferred to a member or members of an Optionee's immediate family (as defined below) or to 5 one or more trusts or partnerships established in whole or in part for the benefit of one or more of such immediate family members (collectively, "Permitted Transferees"), subject to such rules and procedures as may from time to time be adopted or imposed by the Board. If an Option is transferred to a Permitted Transferee, it shall be further transferable only by will or the laws of descent and distribution or, for no consideration, to another Permitted Transferee of the Optionee. An Optionee shall notify the Corporation (or its designee) in writing prior to any proposed transfer of an Option to a Permitted Transferee and shall furnish the Corporation, upon request, with information concerning such Permitted Transferee's financial condition and investment experience. For purposes of the Plan, an Optionee's "immediate family" means spouse, lineal descendant, father, mother, brother or sister of the transferor; provided, however, that if the Corporation adopts a different definition of "immediate family" (or similar term) in connection with the transferability of employee stock options awarded to Optionees, such definition shall apply, without further action by the Board, to the Plan. 6 ACTIVCARD S.A. STOCK OPTION PLAN 2000 U.S. APPENDIX 1. This Appendix governs the grant of Options to United States Participants This Appendix constitutes the part of the 2000 Stock Option Plan that will govern the subscription of Shares by, and the grant of Options to, United States Participants (the "U.S. Options") and incorporates all the terms of the 2000 Stock Option Plan (as set forth above) including as modified in accordance with the provisions of this Appendix. 2. The limit on the number of Shares which can be issued The maximum aggregate number of Shares (which, for this purpose, means fully paid ordinary Shares in the capital of the Company) which may be issued under U.S. Options, intending to qualify as "incentive stock options" ("ISOs") within the meaning of Section 422 of the U.S. Internal Revenue Code of 1986, as amended (the "U.S. Tax Code"), under the 2000 Stock Option Plan is 2,000,000, subject to such adjustments made in a manner consistent with Section 422 of the U.S. Tax Code in the event of any issue or reorganization, as determined by the Board in its sole discretion. To the extent permitted under Section 422 of the U.S. Tax Code, any Shares subject to an ISO Award (as defined in Section 7 below) which lapses, expires or is otherwise terminated without the issuance of such Shares may, in the sole discretion of the Board, again be available for purposes of this limit. 3. How U.S. Options will be granted All U.S. Options shall be evidenced by an instrument(s) in such form or forms as may from time to time be approved by the Board that, among other things, shall set out the manner in which a Participant may exercise his U.S. Option and the form of payment for the Shares. 4. Administration of this Appendix The Board shall (i) administer this Appendix, (ii) establish from time to time such rules and regulations as it may deem appropriate for the proper administration of this Appendix and (iii) make such determinations under (including, without limitation, factual determinations), and such interpretations of, and take such actions in connection with, this Appendix or the U.S. Options as it may deem necessary or advisable, including, without limitation, determinations, interpretations and actions to ensure that U.S. Options intended to qualify as ISOs shall so qualify. 5. Section 16 Compliance If any officer, director or shareholder of the Company is awarded U.S. Options and therefore becomes subject to Section 16 of the U.S. Securities Exchange Act 1934, as amended (the "Exchange Act"), the Company shall take all appropriate action to ensure that such awards under this Appendix are exempt from Section l6b under the Exchange Act. 6. Form of U.S. Options U.S. Options may be either ISOs under Section 422 of the U.S. Tax Code or "nonqualified stock options". The Board shall have the sole authority and discretion as to whether and to whom to grant either type of U.S. Option; provided, however, that the terms of each U.S. Option shall specify clearly the type of U.S. Option granted and no U.S. Option shall permit a "tandem" exercise arrangement within the meaning of Temp. Treas. Reg. section 14a.422A-1(Q/A-21), (Q/A-39). 7. Compliance with the ISO Rules The following provisions shall apply to any U.S. Option that is intended to qualify as an ISO (each, an "ISO Award"): (a) The aggregate fair market value (determined as of the date the ISO Award is granted in accordance with the requirements of Section 422 of the U.S. Tax Code) of the Shares underlying one or more ISO Award that is first exercisable in any calendar year (under all stock option plans of the Company and its Subsidiaries (within the meaning of Section 424 of the U.S. Tax Code) shall not exceed U.S. $100,000 (or the equivalent) and, in the event that such limit is exceeded, such U.S. Options shall be treated, to the extent of such excess, as nonqualified stock options. (b) The exercise price of the Shares covered by each ISO Award shall not be less than 100% of the fair market value (determined as of the date the ISO Award is granted in accordance with the requirements of Section 422 of the U.S. Tax Code) of such Shares determined as of the date the ISO Award is granted in accordance with the requirements of Section 422 of the U.S. Tax Code (110% in the case of an ISO Award granted to a Ten Percent Shareholder). (c) An ISO Award may not be exercisable more than 10 years after the date such ISO Award is granted (5 years in the case of an ISO granted to a Ten Percent Shareholder). (d) The terms of such ISO Award shall provide that it is not transferable except by will or pursuant to the laws of descent and distribution, and shall not permit any U.S. Option designated to be an ISO to be exercised more than three months following the Participant's termination of employment with the Company or its Subsidiaries within the meaning of Section 424 of the U.S. Tax Code (more than 12 months following the Participant's death or disability, as disability is defined in Section 22(e)(3) of the U.S. Tax Code). The terms of such ISO Award shall further provide that, during the Participant's lifetime, such ISO Award shall only be exercisable by the Participant. 2 (e) This Appendix may be further modified to ensure that any U.S. Option that is intended to be an ISO under this Appendix will comply with the requirements of Section 422 of the U.S. Tax Code. 8. Term of U.S. Option: addition of consistent provisions Subject to the provisions of Section 7 above, in the case of an ISO, the Company shall determine at the date the ISO Award is granted the term during which a U.S. Option may be exercised and whether any of the U.S. Option shall be exercisable in one or more installments. A U.S. Option may also be subject to any other provision imposed by the Company that is consistent with the purpose and intent of this Appendix. 9. Exercise Method of U.S. Options A Participant may, in accordance with the terms of an applicable Award Agreement and subject to the sole discretion of the Board, exercise his U.S. Option, (i) by a cash payment to the Company of the exercise price(s) of all Shares purchased pursuant to the exercise of the U.S. Option, (ii) in Shares already owned by the Participant or (iii) by any combination of cash or Shares. 10. U.S. Withholding Taxes: disqualifying dispositions It shall be a condition to the obligation of the Company to deliver Shares pursuant to any U.S. Option under the 2000 Stock Option Plan that the Participant pays to the Company (or the Subsidiary that employs the Participant) such amount as may be required by the Company or such Subsidiary for the purpose of satisfying any liability for any U.S. federal, state or local taxes of any kind required to be withheld with respect thereto. Any U.S. Option granted under the 2000 Stock Option Plan may require the Company (or the Subsidiary that employs the Participant), or, the Board, in its sole discretion, may permit the Participant to elect, in accordance with any applicable rules established by the Company, to withhold or to pay all or a part of the amount of the withholding taxes in Shares. Such election may be denied by the Company in its sole discretion, or may be made subject to certain conditions specified by the Board. The applicable ISO Award shall provide that if a Participant makes a disposition, within the meaning of Section 424(c) of the U.S. Tax Code and the regulations promulgated thereunder, of any Shares issued to such Participant pursuant to the exercise of an ISO Award within the two-year period commencing on the date of grant or within the one-year period commencing on the date of transfer of such Share to the Participant pursuant to such exercise, the Participant shall, within 10 days of such disposition, notify the Company of it (or the Subsidiary that employs the Participant), by delivery of written notice to the Company or such Subsidiary at its principal executive office. 3 11. Securities Laws Compliance No Shares may be issued or transferred in connection with the exercise of a U.S. Option, unless the Company shall have determined that such issue or transfer is in compliance with or pursuant to an exemption from all applicable U.S. federal and state securities laws. 12. Certain definitions For the purposes of the U.S. Options, the following terms shall have the following meanings (notwithstanding any contrary provision in the 2000 Stock Option Plan): "Participants" means the Beneficiaries who are selected by the Board to receive U.S. Options. "Subsidiary" means any companies (other than the Company) in an unbroken chain of companies beginning with the Company, where each of the other than the last company in the unbroken chain owns stock possessing 50% or more of the total combined voting powers of all classes of stock in one or the other companies in such chain. "Ten Percent Shareholder" means a Participant who, at the date an ISO Award is granted, owns (within the meaning of Section 422(b)(6) of the U.S. Tax Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or its Subsidiaries (as such term is defined in Section 424 of the U.S. Tax Code). 4 EX-5 6 0006.txt OPINION OF SHEARMAN & STERLING Exhibit 5 October 23, 2000 ActivCard S.A. 24-28 Avenue Du General De Gaulle 92156 Suresnes Cedex FRANCE Ladies and Gentlemen: We have acted as French and United States counsel to ActivCard S.A. (the "Company") in connection with the preparation and filing with the Securities and Exchange Commission (the "Commission") of a Registration Statement on Form S-8 (the "Registration Statement"), covering the registration under the Securities Act of 1933, as amended (the "Act") of 5,480,997 Ordinary Shares, nominal value FF6.25 per share, of the Company (the "Shares") in the form of Shares or American Depositary Receipts evidencing American Depositary Shares ("ADSs"), each representing one Share, issued or to be issued in connection with the Company's 1997 French Stock Option Plan, the 1998 Stock Option Plan, the Stock Option Plan 1999 and the Stock Option Plan 2000 (collectively, the "Plans"). In connection with the foregoing, we have examined the originals, or copies identified to our satisfaction, of such Company shareholders' meetings, certificates of public officials, officers of the Company and other persons, and such other documents, agreements and instruments as we have deemed necessary as a basis for the opinion hereinafter expressed. In our examination, we have assumed the genuineness of all signatures, the authenticity of all documents presented to us as originals and the conformity with the originals of all documents submitted to us as copies. In rendering the opinion expressed below, we have relied as to certain matters on information obtained from officers of the Company and public officials, in particular regarding payment for the Shares that have been already issued pursuant to the Plans. Our opinions expressed below are limited to the laws of the Republic of France and we do not express any opinion herein concerning any other law. Based upon the foregoing and having regard for such legal considerations as we deemed relevant, we are of the opinion that: (1) the Shares that have been issued, delivered and paid for in accordance with the terms of the Plans have been duly authorized, validly issued, fully paid and are nonassessable; and October 23, 2000 Page 2 (2) any additional Shares which will be issued under the Plans have been duly authorized, and when issued, delivered and paid for in accordance with the terms of the Plans, will be validly issued and fully paid. We hereby consent to the filing of this opinion as an Exhibit to the Registration Statement. In giving such consent, we do not concede that we are within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder. This opinion is being delivered in connection with the Registration Statement and is not to be used for any other purpose without our prior authorization. Very truly yours, /s/ Shearman & Sterling EX-23.1 7 0007.txt CONSENT OF ERNST & YOUNG Exhibit 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8) pertaining to the 1997 French Stock Option Plan, the 1998 Stock Option Plan, the Stock Option Plan 1999 and the Stock Option Plan 2000 of ActivCard S.A. of our report dated February 10, 2000, with respect to the consolidated financial statements of ActivCard S.A. included in its Amended Registration Statement (Form F-1/A) filed on March 14, 2000 with the Securities and Exchange Commission. Ernst & Young Audit /s/ John Mackey represented by John Mackey Paris, France November 16, 2000 -----END PRIVACY-ENHANCED MESSAGE-----