-----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, M0cCwR1WL9rBFDLW4c8ajSu80DxaGBqjtlbFoI0Zvkor5ZsqVxbXO+WTi7B9HH18 AReu285a4flXs/n8d5ndLQ== 0000950137-00-000953.txt : 20000314 0000950137-00-000953.hdr.sgml : 20000314 ACCESSION NUMBER: 0000950137-00-000953 CONFORMED SUBMISSION TYPE: S-8 POS PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20000313 EFFECTIVENESS DATE: 20000313 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TELLABS INC CENTRAL INDEX KEY: 0000317771 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 363831568 STATE OF INCORPORATION: DE FISCAL YEAR END: 0101 FILING VALUES: FORM TYPE: S-8 POS SEC ACT: SEC FILE NUMBER: 333-95135 FILM NUMBER: 568300 BUSINESS ADDRESS: STREET 1: 4951 INDIANA AVE CITY: LISLE STATE: IL ZIP: 60532 BUSINESS PHONE: 6303788800 MAIL ADDRESS: STREET 1: 4951 INDIANA AVE CITY: LISLE STATE: IL ZIP: 60532 S-8 POS 1 POST-EFFECTIVE AMENDMENT #1 ON FORM S-8 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 13, 2000 REGISTRATION NO. 333-95135 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 POST-EFFECTIVE AMENDMENT NO. 1 ON FORM S-8 TO FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 __________________________ TELLABS, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) __________________________ DELAWARE 36-3831568 (State or Other Jurisdiction (I.R.S. Employer of Incorporation or Organization) Identification Number) 4951 INDIANA AVENUE LISLE, ILLINOIS 60532-1698 (Address of Principal Executive Offices) (Zip Code) SALIX TECHNOLOGIES, INC. 1998 OMNIBUS STOCK PLAN AND OPTION AGREEMENT DATED AS OF DECEMBER 1, 1997 (Full Title of the Plan) CAROL COGHLAN GAVIN VICE PRESIDENT AND GENERAL COUNSEL TELLABS, INC. 4951 INDIANA AVENUE LISLE, ILLINOIS 60532-1698 (630) 378-8800 (Name, Address and Telephone Number, Including Area Code, of Agent for Service) Copy to: SIDLEY & AUSTIN BANK ONE PLAZA CHICAGO, ILLINOIS 60603 (312) 853-7000 ATTENTION: IMAD I. QASIM ================================================================================ 2 INTRODUCTORY STATEMENT TELLABS, INC., a Delaware corporation (the "Registrant"), hereby amends its Registration Statement on Form S-4 (Registration No. 333-95135) by filing this Post-Effective Amendment No. 1 on Form S-8. On February 29, 2000, SALIX Technologies, Inc., a Delaware corporation ("SALIX"), became a wholly-owned subsidiary of the Registrant upon consummation of the merger (the "Merger") contemplated by the Agreement and Plan of Merger dated as of December 21, 1999 (the "Merger Agreement") among the Registrant, a wholly-owned subsidiary of the Registrant, and SALIX. Each option (an "Outstanding Option") to purchase common stock, $.01 par value per share, of SALIX ("SALIX Common Stock"), which was outstanding immediately prior to the effective time of the Merger (the "Effective Time") pursuant to SALIX's 1998 mnibus Stock Plan and pursuant to the Option Agreement dated as of December 1, 1997 between SALIX and Gene Carlock became an option to purchase the number of shares of common stock, $.01 par value per share, of the Registrant ("Common Stock") (decreased to the nearest whole share), determined by multiplying (i) the number of shares of SALIX Common Stock subject to such Outstanding Option immediately prior to the Effective Time by (ii) 0.381 (the "Exchange Ratio"), at an exercise price per share of Common Stock (rounded up to the nearest tenth of a cent) equal to the exercise price per share of SALIX Common Stock immediately prior to the Effective Time divided by the Exchange Ratio. Each Outstanding Option will otherwise be exercisable upon the same terms and conditions as were applicable immediately prior to the Effective Time. This Post-Effective Amendment relates to the offer and sale after the Effective Time of Common Stock pursuant to and in accordance with the Outstanding Options. 1 3 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents heretofore filed (file number 0-9692) by the Registrant with the Securities and Exchange Commission (the "SEC") pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are incorporated herein by reference: 1. The Registrant's Annual Report on Form 10-K for the year ended January 1, 1999; 2. The Registrant's Report on Form 11-K for the year ended December 31, 1998; 3. The Registrant's Quarterly Reports on Form 10-Q for the quarters ended April 2, 1999, July 2, 1999 and October 1, 1999; 4. The Registrant's Current Reports on Form 8-K filed with the SEC on April 22, 1999, April 29, 1999, July 7, 1999, August 18, 1999, November 12, 1999, November 16, 1999 and December 16, 1999; and 5. The description of the Common Stock contained in the Registration Statement on Form S-4 (Registration No. 333-95135) to which this Post-Effective Amendment No. 1 relates under the caption "Description of Tellabs Capital Stock". All reports and other documents filed by the Registrant pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof and prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold shall be deemed to be incorporated by reference herein and to be a part hereof from the dates of filing of such reports and documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein, or in any other subsequently filed document which also is incorporated or deemed to be incorporated by reference herein, modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. ITEM 4. DESCRIPTION OF SECURITIES. Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. The validity of the shares of Common Stock registered hereby has been passed upon for the Registrant by James M. Sheehan, Assistant General Counsel of the Registrant. Mr. Sheehan is a stockholder of the Registrant and holds options to purchase shares of Common Stock. 2 4 ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Amended and Restated By-Laws of the Registrant (the "Registrant By-Laws") require the Registrant to indemnify its current and former officers and directors and those who serve or have served, at Registrant's request, as a director, officer, employee, fiduciary or agent of another enterprise, from expenses, liabilities and losses (including attorneys' fees) actually and reasonably incurred in connection with any action, suit or proceeding in which they or any of them are or are threatened to be made parties by reason of their having acted in such capacity. This indemnification inures to the benefit of such person's heirs, executors and administrators. However, in certain circumstances, the Registrant is required to indemnify such persons for any action, suit or proceeding that is initiated by them only if such action, suit or proceeding was authorized by the Board of Directors of the Registrant. The right to indemnification under the Registrant By-Laws is a contract right and, subject to certain conditions, includes the right to be paid by the Registrant the expenses incurred in defending any such action, suit or proceeding in advance of its final disposition. The Registrant By-Laws further provide that the indemnification and payment of expenses incurred provided therein is not exclusive of any other rights to which those seeking indemnification may be entitled. Section 145 of the Delaware corporation statute authorizes indemnification by the Registrant of directors and officers under the circumstances provided in the provisions of the Registrant By-Laws described above, and requires such indemnification for expenses actually and reasonably incurred to the extent a director or officer is successful in the defense of any action, or any claim, issue or matter therein. The Registrant has purchased insurance which purports to insure the Registrant against certain costs of indemnification which may be incurred by it pursuant to the Registrant By-Laws and to insure the officers and directors of the Registrant, and of its subsidiary companies, against certain liabilities incurred by them in the discharge of their functions as such officers and directors, except for liabilities resulting from their own malfeasance. ITEM 7. EXEMPTIONS FROM REGISTRATION CLAIMED. Not applicable. ITEM 8. EXHIBITS. (a) The following is a list of Exhibits included as part of this Post-Effective Amendment. Items marked with a single asterisk are filed herewith. Items marked with a double asterisk were filed by the Registrant with the SEC on January 21, 2000 with the Registration Statement on Form S-4 to which this Post-Effective Amendment relates. 4.1 Registrant's Restated Certificate of Incorporation dated June 24, 1992, is hereby incorporated by reference to Exhibit 4.1 to Registrant's Registration Statement on Form S-4 filed on July 21, 1998. 4.2 Registrant's Amended and Restated By-laws, as amended January 27, 1993, are hereby incorporated by reference to Exhibit 3.2 to Registrant's Annual Report on Form 10-K for the fiscal year ended January 1, 1993. *4.3 SALIX Technologies, Inc. 1998 Omnibus Stock Plan. 3 5 *4.4 Option Agreement dated as of December 1, 1997 between SALIX Technologies, Inc. and Gene Carlock. **5.1 Opinion of James M. Sheehan regarding the legality of the securities being registered. *23.1 Consent of Ernst & Young LLP. *23.2 Consent of Grant Thornton LLP. *23.3 Consent of PricewaterhouseCoopers LLP. *23.4 Consent of KPMG LLP. 23.5 Consent of James M. Sheehan (included in the opinion filed as Exhibit 5.1 to this Registration Statement). **24.1 Powers of Attorney. (b) Not applicable. 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 of 1933, as amended (the "Securities Act"); (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is on Form S-3, Form S-8 or Form F-3, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the SEC by the Registrant pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by reference in the registration statement. 4 6 (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (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 SEC 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 Securities Act and will be governed by the final adjudication of such issue. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Post-Effective Amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lisle, State of Illinois, on March 10, 2000. TELLABS, INC. By: /s/ Michael J. Birck --------------------------------- Michael J. Birck President and Chief Executive Officer 5 7 Pursuant to the requirements of the Securities Act of 1933, as amended, this Post-Effective Amendment has been signed below by the following persons in the capacities and on the dates indicated.
Signature Capacity Date --------- -------- ---- /s/ Michael J. Birck President, Chief Executive Officer March 10, 2000 - ------------------------------------ and Director Michael J. Birck (Principal Executive Officer) /s/ Joan E. Ryan Chief Financial Officer March 10, 2000 - ------------------------------------ (Principal Financial Officer) Joan E. Ryan * Vice President - ------------------------------------ (Principal Accounting Officer) Robert E. Swininoga * Director - ------------------------------------ John D. Foulkes, Ph.D. * Director - ------------------------------------ Peter A. Guglielmi * Director - ------------------------------------ Brian J. Jackman * Director - ------------------------------------ Frederick A. Krehbiel * Director - ------------------------------------ Stephanie Pace Marshall, Ph.D. * Director - ------------------------------------ William F. Souders * Director - ------------------------------------ Jan H. Suwinski *By: /s/ Michael J. Birck March 10, 2000 -------------------------------- Michael J. Birck As Attorney-in-Fact
6 8 EXHIBIT INDEX The following is a list of Exhibits included as part of this Post-Effective Amendment. Items marked with a single asterisk are filed herewith. Items marked with a double asterisk were filed by the Registrant with the SEC on January 21, 2000 with the Registration Statement on Form S-4 to which this Post-Effective Amendment relates. 4.1 Registrant's Restated Certificate of Incorporation, dated June 24, 1992, is hereby incorporated by reference to Exhibit 4.1 to Registrant's Registration Statement on Form S-4 filed on July 21, 1998. 4.2 Registrant's Amended and Restated By-laws, as amended January 27, 1993, are hereby incorporated by reference to Exhibit 3.2 to Registrant's Annual Report on Form 10-K for the fiscal year ended January 1, 1993. *4.3 SALIX Technologies, Inc. 1998 Omnibus Stock Plan. *4.4 Option Agreement dated as of December 1, 1997 between SALIX Technologies, Inc. and Gene Carlock. **5.1 Opinion of James M. Sheehan regarding the legality of the securities being registered. *23.1 Consent of Ernst & Young LLP. *23.2 Consent of Grant Thornton LLP. *23.3 Consent of PricewaterhouseCoopers LLP. *23.4 Consent of KPMG LLP. 23.5 Consent of James M. Sheehan (included in the opinion filed as Exhibit 5.1 to this Registration Statement). **24.1 Powers of Attorney. 7 EX-4.3 2 1998 OMNIBUS STOCK PLAN 1 Exhibit 4.3 SALIX TECHNOLOGIES, INC. OMNIBUS STOCK PLAN 1. PURPOSE AND TYPES OF AWARDS SALIX Technologies, Inc. (the "Company") hereby establishes the SALIX Technologies, Inc. Omnibus Stock Plan (the "Plan"). The purpose of the Plan is to promote the long-term growth and profitability of the Company by (i) providing people who are providing services to the Company with incentives to improve stockholder value and to contribute to the growth and financial success of the Company and (ii) enabling the Company to attract, retain and reward the best-available persons to provide it services. The Plan permits the granting of stock options (including incentive stock options qualifying under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") and nonqualified stock options), stock appreciation rights, restricted or unrestricted stock awards, phantom stock, performance awards, or any combination of the foregoing (the "Awards"). 2. DEFINITIONS Under this Plan, except where the context otherwise indicates, the following definitions apply: (a) "Administrator" shall mean the Board of Directors or such committee or committees as may be appointed by the Board from time to time to administer the Plan. (b) "Affiliate" shall mean any entity, whether now or hereafter existing, which controls, is controlled by, or is under common control with, the Company (including, but not limited to, joint ventures, limited liability companies, and partnerships). For this purpose, "control" shall mean ownership of 50% or more of the total combined voting power or value of all classes of stock or interests of the entity. (c) "Award" shall mean any stock option, stock appreciation right, stock award, phantom stock award, or performance award. (d) "Board" shall mean the Board of Directors of the Company. (e) "Cause" shall mean, with respect to Grantees who are employees of the Company, such Grantee's (i) material breach of his or her employment agreement with the Company, (ii) dishonesty in performing his or her duties for the Company, (iii) use of drugs or alcohol to an extent which interferes with the performance of Grantee's duties to the Company, (iv) repeated failure to devote proper time and attention to the business of the Company, (v) material and repeated failure to carry out the directions, instructions, policies, rules, regulations or decisions of the Board of Directors or Officers of the Company, or (vi) conviction for a felony or other crime involving moral turpitude or pursuant to which Grantee is imprisoned. For purposes of this definition, the words "repeated failure" shall mean such failure as has been documented in writing by the Company as having occurred more than once in any six month period. (f) "Code" shall mean the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder. (g) "Common Stock" shall mean shares of common stock of the Company, par value of $0.01 per share. 2 (h) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. (i) "Fair Market Value" of a share of the Company's Common Stock for any purpose on a particular date shall be determined in a manner such as the Administrator shall in good faith determine to be appropriate; provided that in the event the Common Stock shall become registered under Section 12 of the Exchange Act, then thereafter the Fair Market Value of the Company's Common Stock for any purpose on a particular date shall mean the last reported sale price per share of Common Stock, regular way, on such date or, in case no such sale takes place on such date, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on a national securities exchange or included for quotation on the Nasdaq National Market, or if the Common Stock is not so listed or admitted to trading or included for quotation, the last quoted price, or if the Common Stock is not so quoted, the average of the high bid and low asked prices, regular way, in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System or, if such system is no longer in use, the principal other automated quotations system that may then be in use or, if the Common Stock is not quoted by any such organization, the average of the closing bid and asked prices, regular way, as furnished by a professional market maker making a market in the Common Stock as selected in good faith by the Administrator or by such other source or sources as shall be selected in good faith by the Administrator. If, as the case may be, the relevant date is not a trading day, the determination shall be made as of the first trading day immediately preceding such date. As used herein, the term "trading day" shall mean a day on which public trading of securities occurs and is reported in the principal consolidated reporting system referred to above, or if the Common Stock is not listed or admitted to trading on a national securities exchange or included for quotation on the Nasdaq National Market, any business day. (j) "Grant Agreement" shall mean a written document memorializing the terms and conditions of an Award granted pursuant to the Plan and shall incorporate the terms of the Plan. (k) "Grantee" shall mean a person who has been granted an Award pursuant to this Plan. (l) "Parent" shall mean a corporation, whether now or hereafter existing, within the meaning of the definition of "parent corporation" provided in Code section 424(e), or any successor thereto. (m) "Subsidiary" and "subsidiaries" shall mean only a corporation or corporations, whether now or hereafter existing, within the meaning of the definition of "subsidiary corporation" provided in Section 424(f) of the Code, or any successor thereto. 3. ADMINISTRATION (a) Administration of the Plan. The Plan shall be administered by the Administrator. (b) Powers of the Administrator. The Administrator shall have all the powers vested in it by the terms of the Plan, such powers to include authority, in its sole and absolute discretion, to grant Awards under the Plan, prescribe Grant Agreements evidencing such Awards and establish programs for granting Awards. The Administrator shall have full power and authority to take all other actions necessary to carry out the purpose and intent of the Plan, including, but not limited to, the authority to (i) determine the eligible persons to whom, and the time or times at which Awards shall be granted, (ii) determine the types of Awards to be granted, (iii) determine the number of shares to be covered by or used for reference purposes for each Award, (iv) impose such terms, limitations, restrictions and conditions upon any such Award as the Administrator shall deem appropriate, (v) modify, amend, extend or renew outstanding Awards, or accept the surrender of outstanding Awards and substitute new Awards (provided, however, -2- 3 that any modification that would materially adversely affect any outstanding Award shall not be made without the consent of the Grantee), (vi) to prescribe the form or forms of the instruments evidencing Awards granted under this Plan; (vii) to delegate responsibility for Plan operation, management and administration on such terms, consistent with the Plan, as the Board may establish; (viii) to delegate to other persons the responsibility for performing ministerial acts in furtherance of the Plan's purpose; (ix) to engage the services of persons or organizations in furtherance of the Plan's purpose, including but not limited to banks, insurance companies, accounting firms, brokerage firms and consultants; (x) establish objectives and conditions, if any, for earning Awards and determining whether Awards will be paid after the end of a performance period. The Administrator shall have full power and authority, in its sole and absolute discretion, to administer and interpret the Plan and to adopt and interpret such rules, regulations, agreements, guidelines and instruments for the administration of the Plan and for the conduct of its business as the Administrator deems necessary or advisable. (c) Non-Uniform Determinations. The Administrator's determinations under the Plan (including without limitation, determinations of the persons to receive Awards, the form, amount and timing of such Awards, the terms and provisions of such Awards and the Grant Agreements evidencing such Awards) need not be uniform and may be made by the Administrator selectively among persons who receive, or are eligible to receive, Awards under the Plan, whether or not such persons are similarly situated. (d) Limited Liability. To the maximum extent permitted by law, no member of the Administrator shall be liable for any action taken or decision made in good faith relating to the Plan or any Award thereunder. (e) Indemnification. To the maximum extent permitted by law and by the Company's charter and by-laws, the members of the Administrator shall be indemnified by the Company in respect of all their activities under the Plan. (f) Effect of Administrator's Decision. All actions taken and decisions and determinations made by the Administrator on all matters relating to the Plan pursuant to the powers vested in it hereunder shall be in the Administrator's sole and absolute discretion and shall be conclusive and binding on all parties concerned, including the Company, its stockholders, any Grantees in the Plan, and any other employee of the Company, and their respective successors in interest. 4. SHARES AVAILABLE FOR THE PLAN; MAXIMUM AWARDS Subject to adjustments as provided in Section 7(a) of the Plan, the shares of Common Stock that may be issued with respect to Awards granted under the Plan shall not exceed an aggregate of 3,260,439 shares of Common Stock. The Company shall reserve such number of shares for Awards under the Plan, subject to adjustments as provided in Section 7(a) of the Plan. If any Award, or portion of an Award, under the Plan expires or terminates unexercised, becomes unexercisable or is forfeited or otherwise terminated, surrendered or canceled as to any shares, or if any shares of Common Stock are surrendered to the Company in connection with any Award (whether or not such surrendered shares were acquired pursuant to any Award), the shares subject to such Award and the surrendered shares shall thereafter be available for further Awards under the Plan; provided, however, that any such shares that are surrendered to the Company in connection with any Award or that are otherwise forfeited after issuance shall not be available for purchase pursuant to incentive stock options intended to qualify under Code section 422. -3- 4 5. ELIGIBLE GRANTEES; VESTING. (a) Grantees. Participation in the Plan shall be open to all employees, officers, directors, and consultants of the Company, or of any Affiliate of the Company, as may be selected by the Administrator from time to time. (b) Vesting. A Grantee's rights to the Awards issued under this Plan shall vest as provided in such Grantee's Grant Agreement. 6. AWARDS The Administrator, in its sole discretion, establishes the terms of all Awards granted under the Plan. Awards may be granted individually or in tandem with other types of Awards. All Awards are subject to the terms and conditions provided in the Grant Agreement. (a) Stock Options. The Administrator may from time to time grant to eligible Grantees Awards of incentive stock options as that term is defined in Code section 422 or nonqualified stock options; provided, however, that Awards of incentive stock options shall be limited to employees of the Company or of any Parent or Subsidiary of the Company. Options intended to qualify as incentive stock options under Code section 422 must have an exercise price at least equal to Fair Market Value on the date of grant, but nonqualified stock options may be granted with an exercise price less than Fair Market Value. No stock option shall be an incentive stock option unless so designated by the Administrator at the time of grant or in the Grant Agreement evidencing such stock option. (b) Stock Appreciation Rights. The Administrator may from time to time grant to eligible Grantees Awards of Stock Appreciation Rights ("SAR"). An SAR entitles the Grantee to receive, subject to the provisions of the Plan and the Grant Agreement, a payment having an aggregate value equal to the product of (i) the excess of (A) the Fair Market Value on the exercise date of one share of Common Stock over (B) the base price per share specified in the Grant Agreement, times (ii) the number of shares specified by the SAR, or portion thereof, which is exercised. Payment by the Company of the amount receivable upon any exercise of an SAR may be made by the delivery of Common Stock or cash, or any combination of Common Stock and cash, as determined in the sole discretion of the Administrator. If upon settlement of the exercise of an SAR a Grantee is to receive a portion of such payment in shares of Common Stock, the number of shares shall be determined by dividing such portion by the Fair Market Value of a share of Common Stock on the exercise date. No fractional shares shall be used for such payment and the Administrator shall determine whether cash shall be given in lieu of such fractional shares or whether such fractional shares shall be eliminated. (c) Stock Awards. The Administrator may from time to time grant restricted or unrestricted stock Awards to eligible Grantees in such amounts, on such terms and conditions, and for such consideration, including no consideration or such minimum consideration as may be required by law, as it shall determine. A stock Award may be paid in Common Stock, in cash, or in a combination of Common Stock and cash, as determined in the sole discretion of the Administrator. (d) Phantom Stock. The Administrator may from time to time grant Awards to eligible Grantees denominated in stock-equivalent units ("phantom stock") in such amounts and on such terms and conditions as it shall determine. Phantom stock units granted to a Grantee shall be credited to a bookkeeping reserve account solely for accounting purposes and shall not require a segregation of any of the Company's assets. An Award of phantom stock may be settled in Common Stock, in cash, or in a combination of Common Stock and cash, as determined in the sole discretion of the Administrator. Except as otherwise provided in the applicable Grant Agreement, the Grantee shall not have the rights of -4- 5 a stockholder with respect to any shares of Common Stock represented by a phantom stock unit solely as a result of the grant of a phantom stock unit to the Grantee. (e) Performance Awards. The Administrator may, in its discretion, grant performance awards which become payable on account of attainment of one or more performance goals established by the Administrator. Performance awards may be paid by the delivery of Common Stock or cash, or any combination of Common Stock and cash, as determined in the sole discretion of the Administrator. Performance goals established by the Administrator may be based on the Company's or an Affiliate's operating income or one or more other business criteria selected by the Administrator that apply to an individual or group of individuals, a business unit, or the Company or an Affiliate as a whole, over such performance period as the Administrator may designate. 7. ADJUSTMENTS; BUSINESS COMBINATIONS (a) Corporate Transactions Affecting Common Stock. In the event of changes in the Common Stock of the Company by reason of any stock dividend, split-up, recapitalization, merger, consolidation, business combination or exchange of shares and the like, the Administrator shall, in its discretion, make appropriate adjustments to the maximum number and kind of shares reserved for issuance or with respect to which Awards may be granted under the Plan as provided in Section 4 of the Plan and to the number, kind and price of shares covered by outstanding Awards, and shall, in its discretion and without the consent of holders of Awards, make any other adjustments in outstanding Awards, including but not limited to reducing the number of shares subject to Awards or providing or mandating alternative settlement methods such as settlement of the Awards in cash or in shares of Common Stock or other securities of the Company or of any other entity, or in any other matters which relate to Awards as the Administrator shall, in its sole discretion, determine to be necessary or appropriate. The Administrator, in its sole discretion, may make any modifications to any Awards, including but not limited to cancellation, forfeiture, surrender or other termination of the Awards in whole or in part regardless of the vested status of the Award, in order to facilitate any business combination that is authorized by the Board to comply with requirements for treatment as a pooling of interests transaction for accounting purposes under generally accepted accounting principles. The Administrator is authorized to make, in its discretion, adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events affecting the Company, or the financial statements of the Company or any Affiliate, or of changes in applicable laws, regulations, or accounting principles, whenever the Administrator determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan. Notwithstanding anything contained in this Paragraph 7 or elsewhere in this Plan to the contrary, any modification that would materially adversely affect any outstanding Award shall not be made without the consent of the Grantee. (b) Substitution of Awards in Mergers and Acquisitions. Awards may be granted under the Plan from time to time in substitution for Awards held by employees, officers, or directors of entities who become or are about to become employees, officers, or directors of the Company or an Affiliate as the result of a merger or consolidation of the employing entity with the Company or an Affiliate, or the acquisition by the Company or an Affiliate of the assets or stock of the employing entity. The terms and conditions of any substitute Awards so granted may vary from the terms and conditions set forth herein to the extent that the Administrator deems appropriate at the time of grant to conform the substitute Awards to the provisions of the awards for which they are substituted. -5- 6 (c) Drag Along Rights Pertaining to Option Holders. If at any time any stockholder of the Company or group of stockholders owning a majority or more of the voting capital stock of the Company proposes to enter into any transaction involving (i) the sale of all or substantially all of the assets of the Company; (ii) the sale of more than fifty percent (50%) of the outstanding common stock of the Company in a non-public sale; (iii) any merger, share exchange, consolidation or other reorganization or business combination of the Company, if immediately after such transaction either (A) persons who were directors of the Company immediately prior to such transaction do not constitute at least a majority of the directors of the surviving entity, or (B) persons who hold a majority of the voting capital stock of the surviving entity are not persons who held a majority of the voting capital stock of the Company immediately prior to such transaction; or (iv) the dissolution or liquidation of the Company, the Company and/or the transferring stockholders may require the Grantee to participate in such transaction by giving the Grantee written notice thereof at least ten (10) days in advance of the date of the transaction or the date that tender is required, as the case may be. Upon receipt of such notice, the Grantee shall sell, assign, tender or transfer the same percentage of the shares subject to his options (to which the Grantee has vested) as the percentage of the shares of Stock proposed to be sold, assigned, tendered or transferred by the transferring stockholders collectively, upon the same terms and conditions applicable to the transferring stockholders and at a value equal to the difference between the exercise price per share under the options granted hereunder and the value per share of Stock the transferring stockholders will receive pursuant to the terms of the transaction (whether such value is paid in cash or securities). The provisions of this Paragraph 7(c) shall not impair a Grantee's right to accelerated vesting, if any, if such provisions are applicable to the transaction covered by this Paragraph. If the Grantee has options to purchase Stock of the Company other than options granted hereunder, and such options are subject to terms similar those set forth in this Paragraph 7(c), then the Grantee's options shall be transferred in the order in which they were granted. The provisions of this Paragraph 7(c) shall apply in the event of the Grantee's death, to the Grantee's executor, personal representative or the person(s) to whom the options shall have been transferred by will or the laws of descent and distribution, as though such person is the Grantee. 8. CERTAIN EVENTS AFFECTING RIGHTS. (a) Death of Grantee. If the Grantee shall die and shall not have exercised his rights with respect to Awards which are exercisable at such time, the Awards may be distributed to the Grantee's estate and exercised by the Grantee's executors or administrators or by any person or persons who shall have acquired the Awards directly from the Grantee by bequest or inheritance, subject to the terms of Paragraphs 5(b) and (c). In no event, however, shall the Award be exercisable more than one hundred eighty (180) days after the date of the Grantee's death. In the event an Award is transferred to an Grantee's executor or administrator, to the distributees of the estate, or to a person upon whom such right devolves by reason of the Grantee's death, then the Award shall be nontransferable by the Grantee's executor or administrator or by such person. (b) Termination of Employment. In the event that a Grantee who is an employee as of the date of grant of Awards hereunder shall cease to be employed by the Company or its subsidiaries for any reason (including without limitation disability or retirement) other than his death and other than a termination for "Cause," as such term is defined herein, all vested Awards held by him pursuant to the Plan and not previously exercised at the date of such termination may be exercised for a period of ninety (90) days after the date of termination of the Grantee's employment, subject to the terms of Paragraph 5(b) and the condition that no Award shall be exercisable after the expiration of ten (10) years from the date it is granted. If the termination of employment is a termination by the Company for "Cause," then all Awards held by him pursuant to the Plan and not previously exercised at the date of such termination shall terminate immediately and become void and of no effect. Authorized leaves of absence or absence for military service shall not constitute termination of employment for the purpose of the Plan. -6- 7 9. RIGHTS AS A STOCKHOLDER. A Grantee or a transferee of an Award shall have no rights as a stockholder with respect to any shares covered by his Award until the date of issuance of a stock certificate to him for such shares. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights for which the record date is prior to the date such stock certificate is issued, except as provided in Paragraph 7 hereof. 10. RESTRICTIONS ON STOCK IN THE COMPANY. Once a Grantee has been issued a stock certificate for shares of Common Stock of the Company acquired pursuant to an Award granted in accordance with this Plan, the following restrictions shall apply: (a) Restrictive Legends. The certificates evidencing the shares purchased will bear the following legends: THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RIGHTS OF FIRST OFFER AND FIRST REFUSAL IN FAVOR OF SALIX TECHNOLOGIES, INC., AS SET FORTH IN THE SALIX TECHNOLOGIES, INC. OMNIBUS STOCK PLAN, AS AMENDED FROM TIME TO TIME. SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES") HAVE BEEN (I) ACQUIRED FOR INVESTMENT; AND (II) ISSUED AND SOLD IN RELIANCE UPON EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933 (THE "1933 ACT"). THE SECURITIES CANNOT BE OFFERED FOR SALE, SOLD OR TRANSFERRED OTHER THAN PURSUANT TO (A) AN EFFECTIVE REGISTRATION UNDER THE 1933 ACT OR IN A TRANSACTION WHICH IS OTHERWISE IN COMPLIANCE WITH THE 1933 ACT; AND (B) EVIDENCE SATISFACTORY TO THE ISSUER OF COMPLIANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY OTHER JURISDICTION. THE ISSUER SHALL BE ENTITLED TO RELY UPON AN OPINION OF COUNSEL TO THE ISSUER WITH RESPECT TO COMPLIANCE WITH THE ABOVE LAWS. (b) Rights of First Offer and First Refusal. A Grantee may not sell, exchange, or otherwise transfer the Common Stock acquired hereunder without first offering the Common Stock to the Company. The Company shall have sixty (60) days after receipt of written notification from the Grantee of his intention to transfer the Common Stock to elect to purchase all, but not less than all, of the Common Stock from the Grantee for the price and on the terms set forth in the Grantee's notice. In the event that the offer is not accepted by the Company, the Grantee shall thereafter have the right to negotiate a sale of such Common Stock to any other person; provided, however, that the Grantee shall not have the right to complete such sale without first presenting the Company with a bona fide written offer for such Common Stock from a third party, upon which the Company shall have the right, for a period of sixty (60) days thereafter, to purchase such Common Stock for the price and upon equivalent terms as set forth in the bona fide written offer. For purposes of this Paragraph 10(b), an offer from a third party to purchase all of the Grantee's Common Stock shall not be deemed to be a "bona fide written offer" until a deposit equal to ten percent (10%) of the purchase price stated in such offer is placed in escrow with the Grantee's counsel of choice. If the Company does not elect to exercise its right of first refusal within such 60-day period, then the Grantee shall be free to complete the proposed transfer or sale on the terms and conditions set forth in the bona fide written offer within ninety (90) days thereafter. If such transfer or sale is not completed within 90 days, the Grantee shall again be required to give notice of a bona fide written offer pursuant to this Paragraph 10(b), which notice will again give rise to the rights of first refusal provided above (for an additional 60 days), prior to completing -7- 8 such transfer. As a condition to the effectiveness of any such transfer, the transferee shall agree to take such Common Stock subject to all of the terms and conditions of this Paragraph 10, and shall execute and deliver to the Company an instrument acknowledging such acceptance, in form and substance acceptable to the Company. (c) Company's Right to Repurchase Common Stock. Upon termination of employment with the Company for any reason other than a termination by the Company for "Cause," as such term is defined herein, the Company may, at its election at any time during the ninety (90) day period commencing on and following the termination date, reacquire the Grantee's shares at a price equal to the then current Fair Market Value of such shares. Upon termination of employment with the Company for "Cause," as such term is defined herein, the Company may, at its election at any time during the ninety (90) day period commencing on and following the termination date, reacquire the Grantee's shares at a price equal to the lesser of (i) the then current Fair Market Value or (ii) the price the Grantee paid for such shares. The Company shall provide Grantee written notice of its intent to reacquire the Grantee's shares, and such notice shall specify the date upon which such purchase and sale shall take place. (d) Drag Along Rights Pertaining to Stockholders. If at any time any stockholder of the Company or group of stockholders owning a majority or more of the voting capital stock of the Company proposes to enter into any transaction involving (i) the sale of all or substantially all of the assets of the Company; (ii) the sale of more than fifty percent (50%) of the outstanding common stock of the Company in a non-public sale; (iii) any merger, share exchange, consolidation or other reorganization or business combination of the Company, if immediately after such transaction either (A) persons who were directors of the Company immediately prior to such transaction do not constitute at least a majority of the directors of the surviving entity, or (B) persons who hold a majority of the voting capital stock of the surviving entity are not persons who held a majority of the voting capital stock of the Company immediately prior to such transaction; or (iv) the dissolution or liquidation of the Company, the Company and/or the transferring stockholders may require the Grantee to participate in such transaction by giving the Grantee written notice thereof at least ten (10) days in advance of the date of the transaction or the date that tender is required, as the case may be. Upon receipt of such notice, the Grantee shall sell, assign, tender or transfer the same percentage of his shares Stock as the percentage of the shares of Stock proposed to be sold, assigned, tendered or transferred by the transferring stockholders collectively, upon the same terms and conditions applicable to the transferring stockholders and at a value equal to the value per share the transferring stockholders will receive pursuant to the terms of the transaction (whether such value is paid in cash or securities). The provisions of this Paragraph 10(d) shall apply in the event of the Grantee's death, to the Grantee's executor, personal representative or the person(s) to whom the Stock shall have been transferred by will or the laws of descent and distribution, as though such person is the Grantee. (e) Stock May be Pledged. Notwithstanding the foregoing, the Common Stock acquired through the exercise of an Award may be pledged by the Grantee as security for a loan. (f) Stock Not Registered. The shares of Common Stock acquired pursuant to this Plan, if not then registered under applicable securities laws, shall not be transferred unless registered under the applicable securities laws or unless an exemption from the registration requirements is available. (g) Restrictions Inoperative. The provisions of this Paragraph 10 shall become inoperative upon the effective date of the registration with the Securities and Exchange Commission of the stock subject to the Awards granted hereunder or acquired through the exercise of options granted hereunder. -8- 9 11. LOCK-UP AGREEMENT MAY BE REQUIRED. Each Award granted hereunder shall be subject to the requirement that, if in connection with an initial public offering of the Common Stock of the Company subject to the Awards granted hereunder or acquired through the exercise of Awards granted hereunder, the underwriter or marketing agent for such offering deems it advisable, he or she shall execute a "lock-up" agreement, pursuant to which each Grantee shall agree to refrain from selling or transferring any of the Common Stock acquired pursuant to this Plan for a given period of time not to exceed six (6) months after the date of the initial public offering. 12. MISCELLANEOUS (a) Withholding of Taxes. Grantees and holders of Awards shall pay to the Company or its Affiliate, or make provision satisfactory to the Administrator for payment of, any taxes required to be withheld in respect of Awards under the Plan no later than the date of the event creating the tax liability. The Company or its Affiliate may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the Grantee or holder of an Award. In the event that payment to the Company or its Affiliate of such tax obligations is made in shares of Common Stock, such shares shall be valued at Fair Market Value on the applicable date for such purposes. (b) Loans. The Company or its Affiliate may make or guarantee loans to Grantees to assist Grantees in exercising Awards and satisfying any withholding tax obligations. (c) Transferability. Except as otherwise determined by the Administrator, and in any event in the case of an incentive stock option or a stock appreciation right granted with respect to an incentive stock option, no Award granted under the Plan shall be transferable by a Grantee otherwise than by will or the laws of descent and distribution. Unless otherwise determined by the Administrator in accord with the provisions of the immediately preceding sentence, an Award may be exercised during the lifetime of the Grantee, only by the Grantee or, during the period the Grantee is under a legal disability, by the Grantee's guardian or legal representative. Upon any attempt so to transfer, assign, pledge, hypothecate, or otherwise dispose of the Award, or of any right or privilege conferred thereby, contrary to the provisions hereof, or upon the levy of any attachment or similar process upon such Award, right or privilege, the Award and such rights and privileges shall immediately become null and void. (d) Termination, Amendment and Modification of the Plan. The Board of Directors may at any time terminate or amend the Plan without stockholder approval; provided, however, that the Board of Directors may condition any amendment on the approval of stockholders of the Company if such approval is necessary or advisable with respect to tax, securities or other applicable laws. The termination or any modification or amendment of the Plan shall not, without the consent of a Grantee, materially adversely affect his rights under an Award previously granted to him. (e) Non-Guarantee of Employment or Service. Nothing in the Plan or in any Grant Agreement thereunder shall confer any right on an individual to continue in the service of the Company or shall interfere in any way with the right of the Company to terminate such service at any time. (f) Compliance with Securities Laws; Listing and Registration. Common Stock shall not be issued with respect to an Award granted under the Plan unless the exercise of such Award and the issuance and delivery of stock certificates for such Common Stock pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities Act of 1933 and the Exchange Act, the rules and regulations promulgated thereunder, and the requirements of any national securities exchange or any listing or quotation system established by the National Association of Securities Dealers, Inc. ("Nasdaq System") upon which the Common Stock may then be listed or quoted, and shall be further subject to the approval of counsel for the Company with respect to such compliance to the extent such approval is sought by the Committee. The Company may require that a Grantee, as a condition to exercise of an Award, and as a condition to the delivery of any share certificate, provide to the Company, -9- 10 at the time of each such exercise and each such delivery, a written representation that the shares of Common Stock being acquired shall be acquired by the Grantee solely for investment and will not be sold or transferred without registration or the availability of an exemption from registration under the Securities Act and applicable state securities laws. The stock certificates for any shares of Common Stock issued pursuant to this Plan may bear a legend restricting transferability of the shares of Common Stock unless such shares are registered or an exemption from registration is available under the Securities Act and applicable state securities laws. (g) No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a Grantee or any other person. To the extent that any Grantee or other person acquires a right to receive payments from the Company pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company. (h) Governing Law. The validity, construction and effect of the Plan, of Grant Agreements entered into pursuant to the Plan, and of any rules, regulations, determinations or decisions made by the Administrator relating to the Plan or such Grant Agreements, and the rights of any and all persons having or claiming to have any interest therein or thereunder, shall be determined exclusively in accordance with applicable federal laws and the laws of the State of Delaware, without regard to its conflict of laws principles. (i) Applications of Funds. The proceeds received by the Company from the sale of Common Stock pursuant to Awards will be used for general corporate purposes. (j) No Obligation to Exercise Award. The granting of an Award shall impose no obligation upon the Grantee to exercise such Award. (k) Effective Date; Termination Date. The Plan is effective as of the date on which the Plan was adopted by the Board, subject to approval of the stockholders within twelve months before or after such date. No Award shall be granted under the Plan after the close of business on the day immediately preceding the tenth anniversary of the effective date of the Plan. Subject to other applicable provisions of the Plan, all Awards made under the Plan prior to such termination of the Plan shall remain in effect until such Awards have been satisfied or terminated in accordance with the Plan and the terms of such Awards. Date Approved by the Board: January 1, 1998 Date Approved by the Stockholders: January 1, 1998 Date of Amendment reflected herein approved by Board and Stockholders on April 30, 1999 -10- EX-4.4 3 OPTION AGREEMENT DATED AS OF 12/1/97 1 Exhibit 4.4 EFFECTIVE DATE: _____________________ STOCK OPTION GRANTED BY SALIX TECHNOLOGIES, INC. TO EUGENE CARLOCK (HEREINAFTER CALLED THE "HOLDER") For valuable consideration, the receipt of which is hereby acknowledged, SALIX Technologies, Inc., a Delaware corporation (the "Company"), hereby grants to the Holder the following option: SECTION 1. GRANT OF OPTION; VESTING. Subject to the terms and conditions hereinafter set forth, the Holder is hereby given the right and option to purchase from the Company at the option price of One Dollar ($1.00) per share an aggregate of Seven Thousand Five Hundred (7,500) shares of the Company's Common Stock, par value $0.01 ("Common Stock"), during the period and in the manner hereinafter set forth. The Holder's rights to the option issued hereunder shall vest at a rate of twenty-five percent (25%) per Phase completed under that certain Agreement between Holder and the Company dated __________, 1997, such that, at the end of Phase 4, the Holder shall be 25% vested in his options; at the end of Phase 5, the Holder shall be 50% vested in his options, and so on until the end of Phase 7 when the Holder will be 100% vested in the options granted hereunder. SECTION 2. EXERCISE OF OPTION. The options granted hereunder, which have become vested, shall be exercisable only upon either of the following two events: (a) the Company receives funding of at least Two Million Dollars ($2,000,000) from a venture capital source; or (b) the Company participates in an initial public offering of its Common Stock (each of the foregoing, a "Triggering Event"). In order to exercise the options granted hereunder, Holder shall notify the Company in writing, which notice shall specify the number of shares of Common Stock the Holder then desires to purchase. Payment for the shares of Common Stock purchased pursuant to the exercise of options shall be made by either cash, certified or bank check or postal money order payable to the order of the Company for an amount equal to the option price of such shares. As promptly as practicable after receipt of the option notice from the Holder, the Company and the Holder shall agree upon a mutually convenient time to exchange payment and the investment letter referred to in Section 3, and the certificate(s) for the number of shares with respect to which the option has been exercised, registered in the name of the Holder. Such exchange shall take place at the principal offices of the Company. 2 SECTION 3. CONDITIONS AND LIMITATIONS. As a condition precedent to any exercise of this option, the Holder shall deliver to the Company an investment letter in form and substance satisfactory to the Company and its counsel which shall contain among other things a statement in writing to the following effects (to the extent then applicable): (a) that the option is then being exercised for the account of the Holder and only with a view to investment in, and not for, in connection with or with a view to the disposition of, the shares with respect to which the option is then being exercised; (b) that the Holder acknowledges that the restrictions on transfer of the Common Stock of the Company set forth in this Option Agreement shall apply to such shares; (c) if applicable, that the Holder understands that there is no assurance that the Company will ever become a reporting company under the Securities Exchange Act of 1934 and that the Company has no obligation to the Holder to do so; (d) that the Holder and Holder's representatives have fully investigated the Company and the business and financial conditions concerning it and have knowledge of the Company's then current corporate activities and financial condition; and (e) that the Holder believes that the nature and amount of the shares being purchased are consistent with Holder's investment objectives, abilities and resources. The restrictions imposed by this Section and any investment representation made pursuant to this Section shall be inoperative upon the registration with the Securities and Exchange Commission of the stock subject to the options granted hereunder or acquired through the exercise of options granted hereunder. SECTION 4. DILUTION OR OTHER AGREEMENT. The number of shares of Common Stock reserved for issuance upon the exercise of these options and the option price for these options shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a subdivision or combination of shares or the payment of a stock dividend in shares of Common Stock to holders of outstanding shares of Common Stock or any other increase or decrease in the number of shares of Common Stock outstanding effected without the receipt of consideration by the Company. Any adjustment pursuant to this Section 4, may provide, in the Board's discretion, for the elimination without payment therefor of any fractional shares that might otherwise become subject to this option, but shall not otherwise diminish the then value of the options granted hereunder. Subject to any required action by the stockholders, if the Company shall be the surviving corporation in any merger or consolidation in which the stockholders of the Company retain their Common Stock, this option shall pertain to and apply to the securities to which the Holder of the number of shares of Common Stock subject to options would have been entitled. A dissolution or liquidation of the Company or a merger or consolidation in which the Company is not the surviving Company or a merger or consolidation of the Company in which the stockholders of the Company surrender their Common Stock shall cause these options to terminate upon payment of the difference, if any, between the option price per share of each share covered by this option and the Fair Market Value of such stock on the date of dissolution, liquidation, merger or consolidation, as if the options had been exercised on the date of such dissolution, liquidation, merger or consolidation. To the extent that the foregoing adjustments relate to stock or securities of the Company, such adjustments shall be made by the Board of Directors whose determination in that respect shall be final. -2- 3 Notwithstanding anything contained herein to the contrary, the existence of this Option Agreement and the options granted pursuant hereto shall not affect in any way the right or power of the Company to make or authorize any adjustment, reclassification, reorganization or other change in its capital or business structure, any merger or consolidation of the Company, any issue of debt or equity securities having preferences or priorities as to the Common Stock or the rights thereof, the dissolution or liquidation of the Company, any sale or transfer of all or any part of its business or assets or any other corporate act or proceeding. Except as hereinbefore expressly provided in this Section 4, the Holder shall have no rights by reason of any subdivision or consolidation of shares of stock of any class or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class or by reason of any dissolution, liquidation, merger, or consolidation or spin-off of assets or stock of another corporation. SECTION 5. RIGHTS OF HOLDER. Holder shall have no rights as a stockholder with respect to any shares covered by these options until the date of issuance of a stock certificate to him for such shares. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights for which the record date is prior to the date such stock certificate is issued, except as provided in Section 4 hereof. Nothing herein contained shall impose any obligation upon the Holder to exercise the options. The Company makes no representation as to the tax treatment to the Holder upon receipt or exercise of the options or sale or other disposition of the shares covered by the options. The Company recommends that the Holder consult his personal tax advisor with regard to such tax matters. At all times while any portion of the options is outstanding, the Company shall: reserve and keep available, out of shares of its authorized and unissued stock or reacquired shares, a sufficient number of shares of its Common Stock to satisfy the requirements of the options granted hereunder; comply with the terms of these options promptly upon exercise of option rights; and pay all fees or expenses necessarily incurred by the Company in connection with the issuance and delivery of shares pursuant to the exercise of options hereunder. SECTION 6. TRANSFER, CERTAIN LIMITATIONS AND TERMINATION. During the lifetime of the Holder, this option is exercisable only by the Holder and shall not be assignable or transferable other than by will or the laws of descent and distribution; provided, however, that only vested options may pass by will or the laws of descent, and, provided, further, that the Holder agrees that in the event of Holder's death, the vested options shall be devised, in the aggregate, to only one heir or successor entity. Upon any attempt so to transfer, assign, pledge, hypothecate, or otherwise dispose of the option, or of any right or privilege conferred thereby, contrary to the provisions hereof, or upon the levy of any attachment or similar process upon such option, right or privilege, the option and such rights and privileges shall immediately become null and void. If the Holder shall die and shall not have exercised this option, the Company shall have the right, exercisable within ninety (90) days after Holder's death by written notice to the -3- 4 Holder's personal representative, to cancel this Option Agreement and terminate the options granted hereunder, whether or not vested, provided the Company pays to the Holder's estate an amount equal to One Dollar ($1.00) per share for each share for which this option has vested. The portion of this option that has not vested upon the death of the Holder shall automatically terminate without any compensation to the Holder's estate. If the Company does not elect to exercise its right hereunder to cancel the options within said 90-day period, then the vested options may be distributed to the Holder's estate and may be exercised, upon a Triggering Event, by the Holder's executors or administrators or by any person or persons who shall have acquired the options directly from the Holder by bequest or inheritance (provided such options have not otherwise expired). Notwithstanding anything contained in this Option Agreement to the contrary, if the Holder should die prior to the exercise of the options granted hereunder, this Option Agreement and the options granted hereunder shall expire one (1) year after the date of Holder's death. In the event vested options are transferred to the Holder's executor or administrator, to a distributee of the estate, or to a person upon whom such right devolves by reason of the Holder's death, then the options shall be nontransferable by the Holder's executor or administrator or by such person or entity. This Option Agreement, unless earlier terminated in the event of Holder's death as provided above, shall terminate in all respects, and all rights to purchase shares hereunder shall terminate, five (5) years after the Effective Date set forth above. SECTION 7. RESTRICTIONS ON STOCK IN THE COMPANY. Once the Holder has exercised the Option(s) granted hereunder, and has been issued a stock certificate for such shares, the following restrictions shall apply: (a) RESTRICTIVE LEGENDS. The certificates evidencing the shares purchased will bear the following legends: THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RIGHTS OF FIRST OFFER AND FIRST REFUSAL IN FAVOR OF SALIX TECHNOLOGIES, INC., AS SET FORTH IN AN OPTION AGREEMENT BETWEEN SALIX TECHNOLOGIES, INC. AND THE HOLDER OF THE SHARES. SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES") HAVE BEEN (I) ACQUIRED FOR INVESTMENT; AND (II) ISSUED AND SOLD IN RELIANCE UPON EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933 (THE "1933 ACT"). THE SECURITIES CANNOT BE OFFERED FOR SALE, SOLD OR TRANSFERRED OTHER THAN PURSUANT TO (I) AN EFFECTIVE REGISTRATION UNDER THE 1933 ACT OR IN A TRANSACTION WHICH IS OTHERWISE IN COMPLIANCE WITH THE 1933 ACT; AND (II) EVIDENCE SATISFACTORY TO THE ISSUER OF COMPLIANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY OTHER JURISDICTION. THE ISSUER SHALL BE ENTITLED TO RELY UPON AN OPINION OF COUNSEL TO THE ISSUER WITH RESPECT TO COMPLIANCE WITH THE ABOVE LAWS. -4- 5 (b) RIGHTS OF FIRST OFFER AND FIRST REFUSAL. The Holder may not sell, exchange, or otherwise transfer the Common Stock acquired through the exercise of such Option without first offering the Common Stock to the Company. The Company shall have sixty (60) days, after receipt of written notification from the Holder of his intention to transfer all, but not less than all, of the Common Stock, to elect to purchase the Common Stock from the Holder for the price and on the terms set forth in the Holder's notice. In the event that the offer is not accepted by the Company, the Holder shall thereafter have the right to negotiate a sale of all, but not less than all, of the Common Stock to any other person; provided, however, that the Holder shall not have the right to complete such sale without first presenting the Company with a bona fide written offer for such Common Stock from a third party, upon which the Company shall have the right, for a period of sixty (60) days thereafter, to purchase such Common Stock for the price and upon equivalent terms as set forth in the bona fide written offer. For purposes of this Section 7(b), an offer from a third party to purchase all of the Holder's Common Stock shall not be deemed to be a "bona fide written offer" until a deposit equal to ten percent (10%) of the purchase price stated in such offer is placed in escrow with the Holder's counsel of choice. If the Company does not elect to exercise its right of first refusal within such 60-day period, then the Holder shall be free to complete the proposed transfer or sale on the terms and conditions set forth in the bona fide written offer within ninety (90) days thereafter. If such transfer or sale is not completed within 90 days, the Holder shall again be required to give notice of a bona fide written offer pursuant to this Section 7(b), which notice will again give rise to the rights of first refusal provided above (for an additional 60 days), prior to completing such transfer. As a condition to the effectiveness of any such transfer, the transferee shall agree to take such Common Stock subject to all of the terms and conditions of this Section 7, and shall execute and deliver to the Company an instrument acknowledging such acceptance, in form and substance acceptable to the Company. (c) STOCK MAY BE PLEDGED WITH COMPANY'S CONSENT. Notwithstanding the foregoing, upon the Company's prior written consent, the Common Stock acquired through the exercise of such Option may be pledged by the Holder as security for a loan. (d) STOCK NOT REGISTERED. The shares of Common Stock acquired upon exercise of Options granted hereunder may not be registered under applicable securities laws, and may not be transferred unless registered under the applicable securities laws or unless an exemption from the registration requirements is available. SECTION 8. LISTING AND REGISTRATION OF SHARES. Each Option shall be subject to the requirement that if at any time the Board of Directors shall determine, in its discretion, that the listing, registration, or qualification of the shares covered thereby upon any securities exchange or under any state or federal law or the consent or approval of any governmental regulatory body, is necessary, or desirable as a condition of, or in connection with, the granting of such Option or the issue or purpose of shares thereunder, such Option may not be exercised in whole or in part unless and until such listing, registration, qualification, consent, or approval shall have been effected or obtained free of any conditions not acceptable to the Board of Directors of the Company. SECTION 9. NOTICE. Any notice to be given to the Company hereunder shall be deemed sufficient if addressed to the Company and delivered to the principal office of the Company, attention of the president, or such other address as the Company may hereafter designate. -5- 6 Any notice to be given to the Holder hereunder shall be deemed sufficient if delivered in person to the Holder or when deposited in the mail, postage prepaid, addressed to the Holder at the address furnished to the Company. SECTION 10. GOVERNING LAW. THIS OPTION AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE. SECTION 11. EFFECTIVE DATE. This Option Agreement shall be effective on the Effective Date set forth on page 1 hereof. SECTION 12. BINDING UPON ESTATE AND HEIRS. This Option Agreement and all restrictions contained herein shall be binding upon the Holder's estate, personal representatives and heirs. -6- 7 IN WITNESS WHEREOF, the parties have executed this Option Agreement, or caused this option agreement to be executed, as of the Effective Date. SALIX TECHNOLOGIES, INC. By: -------------------------- Name: Daniel S. Simpkins Title: President HOLDER: ----------------------------- EUGENE CARLOCK -7- 8 OPTION AGREEMENT AMENDMENT 1 The Stock Option Agreement by and between SALIX Technologies, Inc. and Allen Eugene Carlock for 7,500 shares at one dollar per share is hereby amended as follows: Effective Date The effective date of the Stock Option Agreement is December 1, 1997. The effective date of this amendment shall be December 1, 1997. SALIX TECHNOLOGIES, INC. CONTRACTORS: By: /s/ Daniel S. Simpkins /s/ A. Eugene Carlock - ------------------------------------ --------------------------------------- Daniel S. Simpkins A. Eugene Carlock 2/17/98 2/17/98 - ------------------------------------ --------------------------------------- Date Date EX-23.1 4 CONSENT OF ERNST & YOUNG LLP 1 Exhibit 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Post-Effective Amendment No. 1 on Form S-8 to the Registration Statement (Form S-4 No. 333-95135) of Tellabs, Inc. of our report dated November 8, 1999, with respect to the consolidated financial statements of Tellabs, Inc. included in its Current Report (Form 8-K) for the year ended January 1, 1999, filed with the Securities and Exchange Commission. /s/ Ernst & Young LLP Chicago, Illinois March 10, 2000 EX-23.2 5 CONSENT OF GRANT THORNTON LLP 1 Exhibit 23.2 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS We have issued our report dated November 5, 1999, accompanying the consolidated financial statements of Tellabs, Inc. and Subsidiaries as of December 27, 1996 and for the year then ended incorporated by reference in this Post-Effective Amendment on Form S-8 to the Registration Statement on Form S-4. We consent to the use of the aforementioned report in such filing. /s/ Grant Thornton LLP GRANT THORNTON LLP Chicago, Illinois March 9, 2000 EX-23.3 6 CONSENT OF PRICEWATERHOUSECOOPER LLP 1 Exhibit 23.3 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in this Post-Effective Amendment No. 1 on Form S-8 to the Registration Statement on Form S-4 (File No. 333-95135) of Tellabs, Inc. of our report dated April 29, 1999 relating to the financial statements of NetCore Systems, Inc., (which financial statements are not separately presented), which report appears in the Form 8-K of Tellabs, Inc. dated November 10, 1999. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Boston, Massachusetts March 13, 2000 EX-23.4 7 CONSENT OF KPMG LLP 1 Exhibit 23.4 The Board of Directors Tellabs, Inc. We consent to the incorporation by reference in the Post-Effective Amendment on Form S-8 to the Registration Statement (333-95135) on Form S-4 of Tellabs, Inc. of our report dated January 23, 1998 with respect to the consolidated balance sheet of Coherent Communications Systems Corporation as of December 31, 1997, and the related consolidated statements of operations, stockholder's equity, and cash flows for each of the years in the two-year period ended December 31, 1997, which report appears in the Form 8-K of Tellabs, Inc. dated November 10, 1999. /s/ KPMG LLP McLean, Virginia March 10, 2000 -----END PRIVACY-ENHANCED MESSAGE-----