As filed with the Securities and Exchange Commission on December 14, 2001 Registration No. 333-__________ ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________ FORM S-8 REGISTRATION STATEMENT Under The Securities Act of 1933 __________________ PC-TEL, INC. (Exact name of Registrant as specified in its charter) __________________ Delaware 77-0364943 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 1331 California Circle Milpitas, California 95035 (408) 965-2100 (Address of principal executive offices) __________________ Stock Option Agreement dated November 15, 2001 in favor of Jeffrey A. Miller for an option to purchase 150,000 shares of PC-Tel, Inc. Common Stock Stock Option Agreement dated November 15, 2001 in favor of John Schoen for an option to purchase 150,000 shares of PC-Tel, Inc. Common Stock __________________ Martin Singer Chairman of the Board and Chief Executive Officer 1331 California Circle Milpitas, CA 95035 (408) 965-2100 (Name and address and telephone number, including area code, of agent for service) __________________ Copy to: Douglas H. Collom, Esq. Wilson Sonsini Goodrich & Rosati Professional Corporation 650 Page Mill Road Palo Alto, CA 94304 (650) 493-9300 __________________ (1) Estimated in accordance with Rule 457(h) promulgated under the Securities Act of 1933, as amended (the "Securities Act"), solely for the purpose of computing the amount of the registration fee based on the exercise price of $8.00 per share covering authorized but unissued shares under the noted agreement. ================================================================================
CALCULATION OF REGISTRATION FEE ======================================================================================================================== Proposed Proposed Maximum Maximum Title of Each Class Amount Offering Aggregate Amount of of Securities to to be Price Offering Registration be Registered Registered Per Share Price Fee ======================================================================================================================== Common Stock ($0.001 par value) issuable under: - ------------------------------------------------------------------------------------------------------------------------ Stock Option Agreement dated November 15, 2001 in favor of Jeffrey A. Miller for an option to purchase 150,000 shares of PC-Tel, Inc. Common Stock ................ 150,000 $ 8.00/(1)/ $ 1,200,000/(1)/ $ 286.80 - ------------------------------------------------------------------------------------------------------------------------ Stock Option Agreement dated November 15, 2001 in favor of John Schoen for an option to purchase 150,000 shares of PC-Tel, Inc. Common Stock ................ 150,000 $ 8.00/(1)/ $ 1,200,000/(1)/ $ 286.80 - ------------------------------------------------------------------------------------------------------------------------ Total..................................... 300,000 $ 2,400,000 $ 573.60 ======================================================================================================================== PART II INFORMATION REQUIRED IN REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference. - ------ --------------------------------------- PC-Tel, Inc. ("PC-Tel") hereby incorporates by reference in this registration statement the following documents: (a) PC-Tel's Annual Report on Form 10-K for the fiscal year ended December 31, 2000, filed pursuant to Section 13 of the Securities Exchange Act of 1934 (the "Exchange Act"). (b) PC-Tel's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2001, June 30, 2001 and September 30, 2001, filed pursuant to Section 13 of the Exchange Act. (c) The description of PC-Tel's common stock contained in PC-Tel's Registration Statement on Form 8-A, filed August 23, 1999 pursuant to Section 12(g) of the Exchange Act. All documents subsequently filed by PC-Tel pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective amendment to this registration statement which indicates that all securities offered hereby have been sold or which deregisters all securities remaining unsold, shall be deemed to be incorporated by reference in this registration statement and to be a part hereof from the date of filing of such documents. Item 4. Description of Securities. - ------ ------------------------- Not applicable. Item 5. Interests of Named Experts and Counsel. - ------ -------------------------------------- Not applicable. Item 6. Indemnification of Directors and Officers. - ------ ----------------------------------------- Section 145 of the Delaware General Corporation Law permits a corporation to include in its charter documents and in agreements between the corporation and its directors and officers provisions expanding the scope of indemnification beyond that specifically provided by the current law. The Eighth Article of PC-Tel's Amended and Restated Certificate of Incorporation provides for the indemnification of directors and officers to the fullest extent permissible under Delaware law. Article VI of PC-Tel's Bylaws provides for the indemnification of directors, officers, employees and other agents acting on behalf of PC-Tel to the fullest extent permissible under the General Corporation Law of Delaware. PC-Tel's Bylaws also permit PC-Tel to secure insurance on behalf of any officer, director, employee or other agent against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not PC-Tel would have the power to indemnify him or her under the General Corporation Law of Delaware. PC-Tel has entered into indemnification agreements with its directors and executive officers, in addition to the indemnification provided for in PC-Tel's Bylaws, and intends to enter into indemnification agreements with any new directors and executive officers in the future. II-1 Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, or persons controlling PC-Tel pursuant to the foregoing provisions, we have been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. At present, there is no pending litigation or proceeding involving any of PC-Tel's directors, officers, employees or other agents in which indemnification is being sought, nor is PC-Tel aware of any threatened litigation that may result in a claim for indemnification by any of PC-Tel's directors, officers, employees or other agents. Item 7. Exemption From Registration Claimed. - ------ ----------------------------------- Not applicable. Item 8. Exhibits. - ------ -------- Exhibit Number Description -------------- ------------------------------------------------------- 5.1 Opinion of Wilson Sonsini Goodrich & Rosati, P.C. 10.1 Stock Option Agreement dated November 15, 2001 in favor of Jeffrey A. Miller for an option to purchase 150,000 shares of PC-Tel, Inc. Common Stock 10.2 Stock Option Agreement dated November 15, 2001 in favor of John Schoen for an option to purchase 150,000 shares of PC-Tel, Inc. Common Stock 23.1 Consent of Arthur Andersen LLP, Independent Public Accountants 23.2 Consent of Wilson Sonsini Goodrich and Rosati, P.C. (contained in Exhibit 5.1) 24.1 Power of Attorney (See page II-3) Item 9. Undertakings. - ------ ------------ PC-Tel hereby undertakes: (a) Rule 415 offering. (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement 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; (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. II-2 (b) Filing incorporating subsequent Exchange Act documents by reference. ------------------------------------------------------------------- PC-Tel hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of PC-Tel'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) Request for acceleration of effective date or filing of registration -------------------------------------------------------------------- statement on Form S-8. - --------------------- Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of PC-Tel pursuant to the foregoing provisions, or otherwise, PC-Tel has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of PC-Tel 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, PC-Tel 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. II-3 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 registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Milpitas, State of California, on this 14th day of December, 2001. PCTEL, INC. By: /s/ MARTIN SINGER ----------------------------------------- Martin Singer Chairman of the Board and Chief Executive Officer II-4 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Martin Singer and John Schoen and each one of them, acting individually and without the other, as his attorney-in-fact, each with full power of substitution, for him in any and all capacities, to sign any and all amendments to this Registration Statement on Form S-8, 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. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. II-5
Signature Title Date --------- ----- ---- /s/ MARTIN SINGER Chairman of the Board, Chief Executive Officer December 14, 2001 - --------------------------- (Principal Executive Officer) and Director Martin Singer /s/ JOHN SCHOEN Chief Operating Officer and Chief Financial December 14, 2001 - --------------------------- Officer (Principal Financial and Accounting John Schoen Officer) /s/ RICHARD C. ALBERDING Director December 14, 2001 - -------------------------- Richard C. Alberding /s/ PETER CHEN Director December 14, 2001 - --------------------------- Peter Chen /s/ GIACOMO MARINI Director December 14, 2001 - --------------------------- Giacomo Marini /s/ MIKE MIN-CHU CHEN Director December 14, 2001 - --------------------------- Mike Min-Chu Chen /s/ CARL A. THOMSEN Director December 14, 2001 - --------------------------- Carl A. Thomsen
EXHIBIT 5.1 WILSON SONSINI GOODRICH & ROSATI Professional Corporation 650 Page Mill Road Palo Alto, California 94304-1050 Telephone: (650) 496-9300 Facsimile: (650) 493-6811 December 13, 2001 PC-Tel, Inc. 1331 California Circle Milpitas, California 95035 Re: Registration Statement on Form S-8 Ladies and Gentlemen: We have examined the Registration Statement on Form S-8 to be filed by you with the Securities and Exchange Commission on or about December 13, 2001 (the "Registration Statement") in connection with the registration under the Securities Act of 1933, as amended, of an aggregate of 300,000 shares of your Common Stock (the "Shares") issuable under the Stock Option Agreement dated November 15, 2001 in favor of Jeffrey A. Miller for an option to purchase 150,000 shares of PC-Tel, Inc. Common Stock and the Stock Option Agreement dated November 15, 2001 in favor of John Schoen for an option to purchase 150,000 shares of PC-Tel, Inc. Common Stock (the "Agreements"). As your counsel in connection with this transaction, we have examined the proceedings taken and are familiar with the proceedings proposed to be taken by you in connection with the issuance and sale of the Shares pursuant to the Agreements. It is our opinion that, when issued and sold in the manner described in the Agreements, the Shares will be legally and validly issued, fully-paid and non-assessable. We consent to the use of this opinion as an exhibit to the Registration Statement, and further consent to the use of our name wherever appearing in the Registration Statement and any amendments thereto. Very truly yours, /s/ WILSON SONSINI GOODRICH & ROSATI WILSON SONSINI GOODRICH & ROSATI Professional Corporation
EXHIBIT 10.1 STOCK OPTION AGREEMENT All capitalized terms not otherwise defined herein shall, unless the context otherwise requires, have the meaning ascribed to them in Appendix 1 to ---------- this Option Agreement. I. NOTICE OF STOCK OPTION GRANT ---------------------------- Jeffrey A. Miller 47 Katrina Lane Sleepy Hollow, Illinois 60118 You have been granted an option to purchase Common Stock of the Company, subject to the terms and conditions of this Option Agreement, as follows: Grant Number: Date of Grant: November 15, 2001 Vesting Commencement Date: November 15, 2001 Exercise Price per Share: $8.00 Total Number of Shares Granted: 150,000 Total Exercise Price: $1,200,000 Type of Option: NSO Term/Expiration Date: November 15, 2011 Vesting Schedule: - ---------------- This Option may be exercised, in whole or in part, in accordance with the following schedule: 1/36/th/ of the Shares subject to the Option shall vest each month following the Vesting Commencement Date, subject to Optionee continuing to be a Service Provider on such dates. Termination Period: ------------------ This Option may be exercised for three (3) months after Optionee ceases to be a Service Provider. Upon the death or Disability of Optionee, this Option may be exercised for one (1) year after Optionee ceases to be a Service Provider. In no event shall this Option be exercised later than the Term/Expiration Date as provided above. II. AGREEMENT --------- 1. Grant of Option. The Administrator hereby grants Optionee an Option --------------- to purchase the number of Shares as set forth in the Notice of Grant, at the exercise price per share set forth in the Notice of Grant (the "Exercise Price"), subject to the terms and conditions of this Option Agreement. 2. Exercise of Option. ------------------ (a) Right to Exercise. This Option is exercisable during its term ----------------- in accordance with the Vesting Schedule set out in the Notice of Grant and the applicable provisions of this Option Agreement. Unless the Administrator provides otherwise, vesting of the Option shall be tolled during any unpaid leave of absence. The Option may not be exercised for a fraction of a share. Shares issued upon exercise of the Option shall be issued in the name of Optionee or, if requested by Optionee, in the name of Optionee and his spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Appendix 3 to this Option Agreement. ---------- Exercising the Option in any manner shall decrease the number of Shares thereafter available for sale under the Option by the number of Shares as to which the Option is exercised. (b) Method of Exercise. This Option is exercisable by delivery of ------------------ an exercise notice, in the form attached as Exhibit A (the "Exercise Notice"), --------- which shall state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised (the "Exercised Shares"), and such other representations and agreements as may be required by the Company pursuant to the provisions of this Option Agreement. The Exercise Notice shall be completed by Optionee and delivered to the Administrator of the Company. The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares. The Option shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by such aggregate Exercise Price. (c) Method of Payment. Payment of the aggregate Exercise Price ----------------- shall be by any of the following, or a combination thereof, at the election of Optionee: (i) cash; or (ii) check; or (iii) consideration received by the Company under a cashless exercise program implemented by the Company in connection with this Option Agreement; or -2- (iv) surrender of other Shares which (i) in the case of Shares acquired upon exercise of an option, have been owned by Optionee for more than six (6) months on the date of surrender, and (ii) have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the Exercised Shares. (d) Termination of Relationship as a Service Provider. If Optionee ------------------------------------------------- ceases to be a Service Provider, other than upon Optionee's death or Disability, Optionee may exercise his Option within such period of time as is specified in the Notice of Grant to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Notice of Grant). If, on the date of termination, Optionee is not vested as to his entire Option, the Shares covered by the unvested portion of the Option shall revert to the Company. If, after termination, Optionee does not exercise his Option within the time specified by the Administrator, the Option shall terminate, and the Shares covered by such Option shall revert to the Company. (e) Disability of Optionee. If Optionee ceases to be a Service ---------------------- Provider as a result of Optionee's Disability, Optionee may exercise his Option within such period of time as is specified in the Notice of Grant to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Notice of Grant). If, on the date of termination, Optionee is not vested as to his entire Option, the Shares covered by the unvested portion of Option shall revert to the Company. If, after termination, Optionee does not exercise his Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Company. (f) Death of Optionee. If Optionee dies while a Service Provider, the ----------------- Option may be exercised within such period of time as is specified in the Notice of Grant (but in no event later than the expiration of the term of such Option as set forth in the Notice of Grant), by Optionee's estate or by a person who acquires the right to exercise the Option by bequest or inheritance, but only to the extent that the Option is vested on the date of death. If, at the time of death, Optionee is not vested as to his entire Option, the Shares covered by the unvested portion of the Option shall immediately revert to the Company. The Option may be exercised by the executor or administrator of Optionee's estate or, if none, by the person(s) entitled to exercise the Option under Optionee's will or the laws of descent or distribution. If the Option is not so exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Company. (g) Buyout Provisions. The Administrator may at any time offer to buy ----------------- out the Option for a payment in cash or Shares based on such terms and conditions as the Administrator shall establish and communicate to Optionee at the time that such offer is made. 3. Stock Subject to the Option Agreement. If the Option expires or ------------------------------------- becomes unexercisable without having been exercised in full, or is surrendered pursuant to an Option Exchange Program, the unpurchased Shares which were subject thereto shall become available for future grant or sale by the Company; provided, however, that Shares that have actually been issued under the Option - -------- ------- Agreement, upon exercise of the Option, shall not become available for future distribution by the Company. -3- 4. Limitations. ----------- (a) The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted. (b) Neither the Option Agreement nor the Option shall confer upon Optionee any right with respect to continuing Optionee's relationship as a Service Provider with the Company, nor shall they interfere in any way with Optionee's right or the Company's right to terminate such relationship at any time, with or without cause. 5. Non-Transferability of Option. This Option may not be transferred in ----------------------------- any manner, otherwise than by will or by the laws of descent or distribution, and may be exercised during the lifetime of Optionee only by Optionee. The terms of this Option Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of Optionee. 6. Term of Option. This Option may be exercised only within the term set -------------- out in the Notice of Grant, and may be exercised during such term only in accordance with the terms of this Option Agreement. 7. Tax Consequences. Some of the federal tax consequences relating to this ---------------- Option, as of the date of this Option, are set forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES SUBJECT TO THE OPTION. (a) Exercising the Option. Optionee may incur regular federal income --------------------- tax liability upon exercise of a NSO. Optionee will be treated as having compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Exercised Shares on the date of exercise over their aggregate Exercise Price. If Optionee is an Employee or a former Employee, the Company will be required to withhold from his compensation or collect from Optionee and pay to the applicable taxing authorities an amount in cash equal to a percentage of this compensation income at the time of exercise, and may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise. (b) Disposition of Shares. If Optionee holds NSO Shares for at least --------------------- one year, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes. 8. Amendment and Termination of the Option Agreement. ------------------------------------------------- (a) Effect of Amendment or Termination. No amendment, alteration, ---------------------------------- suspension or termination of the Option Agreement shall impair the rights of Optionee, unless mutually agreed otherwise between the Administrator and Optionee, which agreement must be in writing and signed by the Company and Optionee. -4- 9. Conditions Upon Issuance of Shares. ---------------------------------- (a) Legal Compliance. Shares shall not be issued pursuant to the ---------------- exercise of an Option unless the exercise of such Option and the issuance and delivery of such Shares shall comply with Applicable Laws, and shall be further subject to the approval of counsel for the Company with respect to such compliance. Assuming such compliance, for income tax purposes the Exercised Shares shall be considered transferred to Optionee on the date the Option is exercised with respect to such Exercised Shares. (b) Investment Representations. As a condition to the exercise of an -------------------------- Option, the Company may require the person exercising such Option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required. 10. Inability to Obtain Authority. The inability of the Company to obtain ----------------------------- authority from any regulatory body having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares under this Option Agreement, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained. 11. Reservation of Shares. The Company, during the term of this Option --------------------- Agreement, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of this Option Agreement. 12. Entire Agreement; Governing Law. This Option Agreement constitutes the ------------------------------- entire agreement of the parties with respect to the subject matter hereof and supersedes in its entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof, and may not be modified adversely to Optionee's interest except by means of a writing signed by the Company and Optionee. This agreement is governed by the internal substantive laws, but not the choice of law rules, of Delaware. 13. NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES --------------------------------- THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE. -5- By your signature and the signature of the Company's representative below, you and the Company agree that this Option is granted under and governed by the terms and conditions of this Option Agreement. Optionee has reviewed this Option Agreement in its entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option Agreement and fully understands all provisions of this Option Agreement. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions relating to this Option Agreement. Optionee further agrees to notify the Company upon any change in the residence address indicated below. OPTIONEE: PC-TEL, INC. _________________________________ ______________________________________ Signature By _________________________________ ______________________________________ Print Name Title _________________________________ Residence Address _________________________________ -6- CONSENT OF SPOUSE ----------------- The undersigned spouse of Optionee has read and hereby approves the terms and conditions of this Option Agreement. In consideration of the Company's granting his spouse the right to purchase Shares as set forth in this Option Agreement, the undersigned hereby agrees to be irrevocably bound by the terms and conditions of this Option Agreement and further agrees that any community property interest shall be similarly bound. The undersigned hereby appoints the undersigned's spouse as attorney-in-fact for the undersigned with respect to any amendment or exercise of rights under this Option Agreement. _________________________________ Spouse of Optionee Appendix 1 ---------- Definitions As used in the Option Agreement, the following definitions shall apply: (a) "Administrator" means the Board or any of its Committees as shall ------------- be administering the Option Agreement, in accordance with the terms set forth in Appendix 2 to the Option Agreement. (b) "Applicable Laws" means the requirements relating to the --------------- administration of stock option plans under U. S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where, the Option is or will be, granted under the Option Agreement. (c) "Board" means the Board of Directors of the Company. ----- (d) "Code" means the Internal Revenue Code of 1986, as amended. ---- (e) "Committee" means a committee of Directors appointed by the Board --------- in accordance with the terms set forth in Appendix 2 to the Option Agreement. ---------- (f) "Common Stock" means the common stock of the Company. ------------ (g) "Company" means PC-Tel, Inc., a Delaware corporation. ------- (h) "Consultant" means any person, including an advisor, engaged by ---------- the Company or a Parent or Subsidiary to render services to such entity. (i) "Director" means a member of the Board. -------- (j) "Disability" means total and permanent disability as defined in ---------- Section 22(e)(3) of the Code. (k) "Employee" means any person, including Officers and Directors, -------- employed by the Company or any Parent or Subsidiary of the Company. A Service Provider shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company, or (ii) transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or any successor. Neither service as a Director nor payment of a director's fee by the Company shall be sufficient to constitute "employment" by the Company. (l) "Exchange Act" means the Securities Exchange Act of 1934, as ------------ amended. (m) "Fair Market Value" means, as of any date, the value of Common ----------------- Stock determined as follows: (i) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Gnostic SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system for the last market trading day prior to the time of determination, as reported in The Wall Street Journal or such other source as the Administrator deems - ----------------------- reliable; (ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the last market trading day prior to the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or (iii) In the absence of an established market for the Common Stock, the Fair Market Value shall be determined in good faith by the Administrator. (iv) In the case of a Nonstatutory Stock Option intended to qualify as "performance-based compensation" within the meaning of Section 162(m) of the Code, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant. (n) "NSO" means a nonstatutory stock option not intended to qualify as --- an incentive stock option. (o) "Notice of Grant" means the written or electronic notice --------------- evidencing certain terms and conditions of the Option grant, attached as Part I of the Option Agreement. The Notice of Grant is part of the Option Agreement. (p) "Officer" means the person who is an officer of the Company within ------- the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. (q) "Option" means the stock option granted pursuant to the Option ------ Agreement. (r) "Option Agreement" means the agreement between the Company and ---------------- Optionee evidencing the terms and conditions of the Option grant. (s) "Option Exchange Program" means a program whereby an outstanding ----------------------- Option is surrendered in exchange for an Option with a lower exercise price. (t) "Optioned Stock" means the Common Stock subject to the Option. -------------- (u) "Optionee" means the holder of the outstanding Option granted -------- under the Option Agreement and named in the Notice of Grant. (v) "Parent" means a "parent corporation," whether now or hereafter ------ existing, as defined in Section 424(e) of the Code. -2- (w) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any ---------- successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Option Agreement. (x) "Section 16(b)" means Section 16(b) of the Exchange Act. ------------- (y) "Service Provider" means an Employee, Director or Consultant. ---------------- (z) "Share" means a share of the Common Stock, as adjusted in ----- accordance with the terms set forth in Appendix 3 to the Option Agreement. ---------- (aa) "Subsidiary" means a "subsidiary corporation", whether now or ---------- hereafter existing, as defined in Section 424(f) of the Code. -3- Appendix 2 ---------- Administration of the Plan (a) Procedure. --------- (i) Section 162(m). To the extent that the Administrator --------------- determines it to be desirable to qualify Options granted under the Option Agreement as "performance-based compensation" within the meaning of Section 162 (m) of the Code, the Option Agreement shall be administered by a Committee of two or more "outside directors" within the meaning of Section 162(m) of the Code. (ii) Rule 16b-3. To the extent desirable to qualify transactions ---------- under the Option Agreement as exempt under Rule 16b-3, the transactions contemplated hereunder shall be structured to satisfy the requirements for exemption under Rule 16b-3. (iii) Administration. Other than as provided above, the Option Agreement shall be administered by the Board or a Committee, which committee shall be constituted to satisfy Applicable Laws. (b) Powers of the Administrator. Subject to the provisions of the --------------------------- Option Agreement, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator shall have the authority, in its discretion: (i) to determine the Fair Market Value; (ii) to select the Service Provider to whom the Option may be granted hereunder; (iii) to determine the number of shares of Common Stock to be covered by the Option granted hereunder; (iv) to approve forms of agreement for use under the Option Agreement; (v) to determine the terms and conditions, not inconsistent with the terms of the Option Agreement, of any Option granted hereunder. Such terms and conditions include, but are not limited to, the Exercise Price, the date of grant, the time or times when the Option may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding the Option or the shares of Common Stock relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine; (vi) to reduce the exercise price of the Option to the then current Fair Market Value if the Fair Market Value of the Common Stock covered by such Option shall have declined since the date the Option was granted; (vii) to institute an Option Exchange Program; (viii) to construe and interpret the terms of the Option granted pursuant to the Option Agreement; (ix) to prescribe, amend and rescind rules and regulations relating to the Option Agreement; (x) to modify or amend the Option (subject to the terms of the Option Agreement), including the discretionary authority to extend the post-termination exercisability period of the Option longer than is otherwise provided for in the Option Agreement; (xi) to allow Optionee to satisfy withholding tax obligations by electing to have the Company withhold from the Shares to be issued upon exercise of the Option that number of Shares having a Fair Market Value equal to the amount required to be withheld. The Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined. An election by Optionee to have Shares withheld for this purpose shall be made in such form and under such conditions as the Administrator may deem necessary or advisable; (xii) to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Option previously granted by the Administrator; (xiii) to make all other determinations deemed necessary or advisable for administering the Option Agreement. (c) Effect of Administrator's Decision. The Administrator's decisions, ---------------------------------- determinations and interpretations shall be final and binding on Optionee. -2- Appendix 3 ---------- Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset Sale (a) Changes in Capitalization. Subject to any required action by the ------------------------- shareholders of the Company, the number of shares of Common Stock covered by an outstanding Option, as well as the price per share of Common Stock covered by such outstanding Option, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company - -------- ------- shall not be deemed to have been "effected without receipt of consideration." Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to the Option. (b) Dissolution or Liquidation. In the event of the proposed dissolution or -------------------------- liquidation of the Company, the Administrator shall notify Optionee as soon as practicable prior to the effective date of such proposed transaction. The Administrator in its discretion may provide for Optionee to have the right to exercise his Option until ten (10) days prior to such transaction as to all of the Optioned Stock covered thereby, including Shares as to which the Option would not otherwise be exercisable. In addition, the Administrator may provide that any Company repurchase option applicable to any Shares purchased upon exercise of the Option shall lapse as to all such Shares, provided the proposed dissolution or liquidation takes place at the time and in the manner contemplated. To the extent it has not been previously exercised, the Option will terminate immediately prior to the consummation of such proposed action. (c) Merger or Asset Sale. In the event of a merger of the Company with or -------------------- into another corporation, or the sale of substantially all of the assets of the Company, an outstanding Option shall be assumed or an equivalent option or right substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the Option, Optionee shall fully vest in and have the right to exercise the Option as to all of the Optioned Stock, including Shares as to which it would not otherwise be vested or exercisable. If an Option becomes fully vested and exercisable in lieu of assumption or substitution in the event of a merger or sale of assets, the Administrator shall notify Optionee in writing or electronically that the Option shall be fully vested and exercisable for a period of fifteen (15) days from the date of such notice, and the Option shall terminate upon the expiration of such period. For the purposes of this paragraph, the Option shall be considered assumed if, following the merger or sale of assets, the option or right confers the right to purchase or receive, for each Share of Optioned Stock subject to the Option immediately prior to the merger or sale of assets, the consideration (whether stock, cash, or other securities or property) received in the merger or sale of assets by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the - -------- ------- merger or sale of assets is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option or Stock Purchase Right, for each Share of Optioned Stock subject to the Option or Stock Purchase Right, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger or sale of assets. -2- EXHIBIT A --------- EXERCISE NOTICE PC-Tel, Inc. 1331 California Circle Milpitas, CA 95035 Attention: Chief Financial Officer 1. Exercise of Option. Effective as of today, ________________, 20__, the ------------------ undersigned ("Purchaser") hereby elects to purchase ______________ shares (the "Shares") of the Common Stock of PC-Tel, Inc. (the "Company") under and pursuant to the Company's Stock Option Agreement between the Company and Purchaser, dated November 15, 2001 (the "Option Agreement"). The purchase price for the Shares shall be $ __________, as required by the Option Agreement. 2. Delivery of Payment. Purchaser herewith delivers to the Company the full ------------------- purchase price for the Shares. 3. Representations of Purchaser. Purchaser acknowledges that Purchaser has ---------------------------- received, read and understood the Option Agreement and agrees to abide by and be bound by its terms and conditions. 4. Rights as Shareholder. Until the issuance (as evidenced by the --------------------- appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the Shares, no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Shares so acquired shall be issued to Optionee as soon as practicable after exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date of issuance, except as provided in Appendix 3 to the Option ---------- Agreement. 5. Tax Consultation. Purchaser understands that Purchaser may suffer ---------------- adverse tax consequences as a result of Purchaser's purchase or disposition of the Shares. Purchaser represents that Purchaser has consulted with any tax consultants Purchaser deems advisable in connection with the purchase or disposition of the Shares and that Purchaser is not relying on the Company for any tax advice. 6. Entire Agreement; Governing Law. The Option Agreement is incorporated ------------------------------- herein by reference. This Agreement and the Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Purchaser with respect to the subject matter hereof, and may not be modified adversely to the Purchaser's interest except by means of a writing signed by the Company and Purchaser. This agreement is governed by the internal substantive laws, but not the choice of law rules, of Delaware. Submitted by: Accepted by: PURCHASER: PC-TEL, INC. ________________________________ _____________________________________ Signature By ________________________________ _____________________________________ Print Name Its Address: Address: - ------- ------- ________________________________ 1331 California Circle ________________________________ Milpitas, CA 95035 _____________________________________ Date Received -2-
EXHIBIT 10.2 STOCK OPTION AGREEMENT All capitalized terms not otherwise defined herein shall, unless the context otherwise requires, have the meaning ascribed to them in Appendix 1 to ---------- this Option Agreement. I. NOTICE OF STOCK OPTION GRANT ---------------------------- John Schoen 3 Sheffield Court Barrington, Illinois 60010 You have been granted an option to purchase Common Stock of the Company, subject to the terms and conditions of this Option Agreement, as follows: Grant Number: Date of Grant: November 15, 2001 Vesting Commencement Date: November 15, 2001 Exercise Price per Share: $8.00 Total Number of Shares Granted: 150,000 Total Exercise Price: $1,200,000 Type of Option: NSO Term/Expiration Date: November 15, 2011 Vesting Schedule: - ---------------- This Option may be exercised, in whole or in part, in accordance with the following schedule: 1/36/th/ of the Shares subject to the Option shall vest each month following the Vesting Commencement Date, subject to Optionee continuing to be a Service Provider on such dates. Termination Period: - ------------------ This Option may be exercised for three (3) months after Optionee ceases to be a Service Provider. Upon the death or Disability of Optionee, this Option may be exercised for one (1) year after Optionee ceases to be a Service Provider. In no event shall this Option be exercised later than the Term/Expiration Date as provided above. II. AGREEMENT --------- 1. Grant of Option. The Administrator hereby grants Optionee an Option --------------- to purchase the number of Shares as set forth in the Notice of Grant, at the exercise price per share set forth in the Notice of Grant (the "Exercise Price"), subject to the terms and conditions of this Option Agreement. 2. Exercise of Option. ------------------ (a) Right to Exercise. This Option is exercisable during its term ----------------- in accordance with the Vesting Schedule set out in the Notice of Grant and the applicable provisions of this Option Agreement. Unless the Administrator provides otherwise, vesting of the Option shall be tolled during any unpaid leave of absence. The Option may not be exercised for a fraction of a share. Shares issued upon exercise of the Option shall be issued in the name of Optionee or, if requested by Optionee, in the name of Optionee and his spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Appendix 3 to this Option Agreement. ---------- Exercising the Option in any manner shall decrease the number of Shares thereafter available for sale under the Option by the number of Shares as to which the Option is exercised. (b) Method of Exercise. This Option is exercisable by delivery of ------------------ an exercise notice, in the form attached as Exhibit A (the "Exercise Notice"), --------- which shall state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised (the "Exercised Shares"), and such other representations and agreements as may be required by the Company pursuant to the provisions of this Option Agreement. The Exercise Notice shall be completed by Optionee and delivered to the Administrator of the Company. The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares. The Option shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by such aggregate Exercise Price. (c) Method of Payment. Payment of the aggregate Exercise Price ----------------- shall be by any of the following, or a combination thereof, at the election of Optionee: (i) cash; or (ii) check; or (iii) consideration received by the Company under a cashless exercise program implemented by the Company in connection with this Option Agreement; or -2- (iv) surrender of other Shares which (i) in the case of Shares acquired upon exercise of an option, have been owned by Optionee for more than six (6) months on the date of surrender, and (ii) have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the Exercised Shares. (d) Termination of Relationship as a Service Provider. If Optionee ------------------------------------------------- ceases to be a Service Provider, other than upon Optionee's death or Disability, Optionee may exercise his Option within such period of time as is specified in the Notice of Grant to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Notice of Grant). If, on the date of termination, Optionee is not vested as to his entire Option, the Shares covered by the unvested portion of the Option shall revert to the Company. If, after termination, Optionee does not exercise his Option within the time specified by the Administrator, the Option shall terminate, and the Shares covered by such Option shall revert to the Company. (e) Disability of Optionee. If Optionee ceases to be a Service ---------------------- Provider as a result of Optionee's Disability, Optionee may exercise his Option within such period of time as is specified in the Notice of Grant to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Notice of Grant). If, on the date of termination, Optionee is not vested as to his entire Option, the Shares covered by the unvested portion of Option shall revert to the Company. If, after termination, Optionee does not exercise his Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Company. (f) Death of Optionee. If Optionee dies while a Service Provider, the ----------------- Option may be exercised within such period of time as is specified in the Notice of Grant (but in no event later than the expiration of the term of such Option as set forth in the Notice of Grant), by Optionee's estate or by a person who acquires the right to exercise the Option by bequest or inheritance, but only to the extent that the Option is vested on the date of death. If, at the time of death, Optionee is not vested as to his entire Option, the Shares covered by the unvested portion of the Option shall immediately revert to the Company. The Option may be exercised by the executor or administrator of Optionee's estate or, if none, by the person(s) entitled to exercise the Option under Optionee's will or the laws of descent or distribution. If the Option is not so exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Company. (g) Buyout Provisions. The Administrator may at any time offer to buy ----------------- out the Option for a payment in cash or Shares based on such terms and conditions as the Administrator shall establish and communicate to Optionee at the time that such offer is made. 3. Stock Subject to the Option Agreement. If the Option expires or ------------------------------------- becomes unexercisable without having been exercised in full, or is surrendered pursuant to an Option Exchange Program, the unpurchased Shares which were subject thereto shall become available for future grant or sale by the Company; provided, however, that Shares that have actually been issued under the Option - -------- ------- Agreement, upon exercise of the Option, shall not become available for future distribution by the Company. -3- 4. Limitations. ----------- (a) The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted. (b) Neither the Option Agreement nor the Option shall confer upon Optionee any right with respect to continuing Optionee's relationship as a Service Provider with the Company, nor shall they interfere in any way with Optionee's right or the Company's right to terminate such relationship at any time, with or without cause. 5. Non-Transferability of Option. This Option may not be transferred in ----------------------------- any manner, otherwise than by will or by the laws of descent or distribution, and may be exercised during the lifetime of Optionee only by Optionee. The terms of this Option Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of Optionee. 6. Term of Option. This Option may be exercised only within the term set -------------- out in the Notice of Grant, and may be exercised during such term only in accordance with the terms of this Option Agreement. 7. Tax Consequences. Some of the federal tax consequences relating to this ---------------- Option, as of the date of this Option, are set forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES SUBJECT TO THE OPTION. (a) Exercising the Option. Optionee may incur regular federal income --------------------- tax liability upon exercise of a NSO. Optionee will be treated as having compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Exercised Shares on the date of exercise over their aggregate Exercise Price. If Optionee is an Employee or a former Employee, the Company will be required to withhold from his compensation or collect from Optionee and pay to the applicable taxing authorities an amount in cash equal to a percentage of this compensation income at the time of exercise, and may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise. (b) Disposition of Shares. If Optionee holds NSO Shares for at least --------------------- one year, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes. 8. Amendment and Termination of the Option Agreement. ------------------------------------------------- (a) Effect of Amendment or Termination. No amendment, alteration, ---------------------------------- suspension or termination of the Option Agreement shall impair the rights of Optionee, unless mutually agreed otherwise between the Administrator and Optionee, which agreement must be in writing and signed by the Company and Optionee. -4- 9. Conditions Upon Issuance of Shares. ---------------------------------- (a) Legal Compliance. Shares shall not be issued pursuant to the ---------------- exercise of an Option unless the exercise of such Option and the issuance and delivery of such Shares shall comply with Applicable Laws, and shall be further subject to the approval of counsel for the Company with respect to such compliance. Assuming such compliance, for income tax purposes the Exercised Shares shall be considered transferred to Optionee on the date the Option is exercised with respect to such Exercised Shares. (b) Investment Representations. As a condition to the exercise of an -------------------------- Option, the Company may require the person exercising such Option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required. 10. Inability to Obtain Authority. The inability of the Company to obtain ----------------------------- authority from any regulatory body having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares under this Option Agreement, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained. 11. Reservation of Shares. The Company, during the term of this Option --------------------- Agreement, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of this Option Agreement. 12. Entire Agreement; Governing Law. This Option Agreement constitutes the ------------------------------- entire agreement of the parties with respect to the subject matter hereof and supersedes in its entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof, and may not be modified adversely to Optionee's interest except by means of a writing signed by the Company and Optionee. This agreement is governed by the internal substantive laws, but not the choice of law rules, of Delaware. 13. NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES --------------------------------- THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE. -5- By your signature and the signature of the Company's representative below, you and the Company agree that this Option is granted under and governed by the terms and conditions of this Option Agreement. Optionee has reviewed this Option Agreement in its entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option Agreement and fully understands all provisions of this Option Agreement. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions relating to this Option Agreement. Optionee further agrees to notify the Company upon any change in the residence address indicated below. OPTIONEE: PC-TEL, INC. __________________________________ _______________________________________ Signature By __________________________________ _______________________________________ Print Name Title __________________________________ Residence Address __________________________________ -6- CONSENT OF SPOUSE ----------------- The undersigned spouse of Optionee has read and hereby approves the terms and conditions of this Option Agreement. In consideration of the Company's granting his spouse the right to purchase Shares as set forth in this Option Agreement, the undersigned hereby agrees to be irrevocably bound by the terms and conditions of this Option Agreement and further agrees that any community property interest shall be similarly bound. The undersigned hereby appoints the undersigned's spouse as attorney-in-fact for the undersigned with respect to any amendment or exercise of rights under this Option Agreement. __________________________________ Spouse of Optionee Appendix 1 ---------- Definitions As used in the Option Agreement, the following definitions shall apply: (a) "Administrator" means the Board or any of its Committees as ------------- shall be administering the Option Agreement, in accordance with the terms set forth in Appendix 2 to the Option Agreement. ---------- (b) "Applicable Laws" means the requirements relating to the --------------- administration of stock option plans under U. S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where, the Option is or will be, granted under the Option Agreement. (c) "Board" means the Board of Directors of the Company. ----- (d) "Code" means the Internal Revenue Code of 1986, as amended. ---- (e) "Committee" means a committee of Directors appointed by the --------- Board in accordance with the terms set forth in Appendix 2 to the Option ---------- Agreement. (f) "Common Stock" means the common stock of the Company. ------------ (g) "Company" means PC-Tel, Inc., a Delaware corporation. ------- (h) "Consultant" means any person, including an advisor, engaged by ---------- the Company or a Parent or Subsidiary to render services to such entity. (i) "Director" means a member of the Board. -------- (j) "Disability" means total and permanent disability as defined in ---------- Section 22(e)(3) of the Code. (k) "Employee" means any person, including Officers and Directors, -------- employed by the Company or any Parent or Subsidiary of the Company. A Service Provider shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company, or (ii) transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or any successor. Neither service as a Director nor payment of a director's fee by the Company shall be sufficient to constitute "employment" by the Company. (l) "Exchange Act" means the Securities Exchange Act of 1934, as ------------ amended. (m) "Fair Market Value" means, as of any date, the value of Common ----------------- Stock determined as follows: (i) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Gnostic SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system for the last market trading day prior to the time of determination, as reported in The Wall Street Journal or such other source as the Administrator deems - ----------------------- reliable; (ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the last market trading day prior to the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or (iii) In the absence of an established market for the Common Stock, the Fair Market Value shall be determined in good faith by the Administrator. (iv) In the case of a Nonstatutory Stock Option intended to qualify as "performance-based compensation" within the meaning of Section 162(m) of the Code, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant. (n) "NSO" means a nonstatutory stock option not intended to qualify as --- an incentive stock option. (o) "Notice of Grant" means the written or electronic notice evidencing --------------- certain terms and conditions of the Option grant, attached as Part I of the Option Agreement. The Notice of Grant is part of the Option Agreement. (p) "Officer" means the person who is an officer of the Company within ------- the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. (q) "Option" means the stock option granted pursuant to the Option ------ Agreement. (r) "Option Agreement" means the agreement between the Company and ---------------- Optionee evidencing the terms and conditions of the Option grant. (s) "Option Exchange Program" means a program whereby an outstanding ----------------------- Option is surrendered in exchange for an Option with a lower exercise price. (t) "Optioned Stock" means the Common Stock subject to the Option. -------------- (u) "Optionee" means the holder of the outstanding Option granted under -------- the Option Agreement and named in the Notice of Grant. (v) "Parent" means a "parent corporation," whether now or hereafter ------ existing, as defined in Section 424(e) of the Code. -2- (w) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor ---------- to Rule 16b-3, as in effect when discretion is being exercised with respect to the Option Agreement. (x) "Section 16(b)" means Section 16(b) of the Exchange Act. ------------- (y) "Service Provider" means an Employee, Director or Consultant. ---------------- (z) "Share" means a share of the Common Stock, as adjusted in ----- accordance with the terms set forth in Appendix 3 to the Option Agreement. ---------- (aa) "Subsidiary" means a "subsidiary corporation", whether now or ---------- hereafter existing, as defined in Section 424(f) of the Code. -3- Appendix 2 ---------- Administration of the Plan (a) Procedure. --------- (i) Section 162(m). To the extent that the Administrator determines -------------- it to be desirable to qualify Options granted under the Option Agreement as "performance-based compensation" within the meaning of Section 162(m) of the Code, the Option Agreement shall be administered by a Committee of two or more "outside directors" within the meaning of Section 162(m) of the Code. (ii) Rule 16b-3. To the extent desirable to qualify transactions ---------- under the Option Agreement as exempt under Rule 16b-3, the transactions contemplated hereunder shall be structured to satisfy the requirements for exemption under Rule 16b-3. (iii) Administration. Other than as provided above, the Option Agreement shall be administered by the Board or a Committee, which committee shall be constituted to satisfy Applicable Laws. (b) Powers of the Administrator. Subject to the provisions of the Option --------------------------- Agreement, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator shall have the authority, in its discretion: (i) to determine the Fair Market Value; (ii) to select the Service Provider to whom the Option may be granted hereunder; (iii) to determine the number of shares of Common Stock to be covered by the Option granted hereunder; (iv) to approve forms of agreement for use under the Option Agreement; (v) to determine the terms and conditions, not inconsistent with the terms of the Option Agreement, of any Option granted hereunder. Such terms and conditions include, but are not limited to, the Exercise Price, the date of grant, the time or times when the Option may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding the Option or the shares of Common Stock relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine; (vi) to reduce the exercise price of the Option to the then current Fair Market Value if the Fair Market Value of the Common Stock covered by such Option shall have declined since the date the Option was granted; (vii) to institute an Option Exchange Program; (viii) to construe and interpret the terms of the Option granted pursuant to the Option Agreement; (ix) to prescribe, amend and rescind rules and regulations relating to the Option Agreement; (x) to modify or amend the Option (subject to the terms of the Option Agreement), including the discretionary authority to extend the post-termination exercisability period of the Option longer than is otherwise provided for in the Option Agreement; (xi) to allow Optionee to satisfy withholding tax obligations by electing to have the Company withhold from the Shares to be issued upon exercise of the Option that number of Shares having a Fair Market Value equal to the amount required to be withheld. The Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined. An election by Optionee to have Shares withheld for this purpose shall be made in such form and under such conditions as the Administrator may deem necessary or advisable; (xii) to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Option previously granted by the Administrator; (xiii) to make all other determinations deemed necessary or advisable for administering the Option Agreement. (c) Effect of Administrator's Decision. The Administrator's decisions, ---------------------------------- determinations and interpretations shall be final and binding on Optionee. -2- Appendix 3 ---------- Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset Sale (a) Changes in Capitalization. Subject to any required action by the ------------------------- shareholders of the Company, the number of shares of Common Stock covered by an outstanding Option, as well as the price per share of Common Stock covered by such outstanding Option, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company - -------- ------- shall not be deemed to have been "effected without receipt of consideration." Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to the Option. (b) Dissolution or Liquidation. In the event of the proposed dissolution or -------------------------- liquidation of the Company, the Administrator shall notify Optionee as soon as practicable prior to the effective date of such proposed transaction. The Administrator in its discretion may provide for Optionee to have the right to exercise his Option until ten (10) days prior to such transaction as to all of the Optioned Stock covered thereby, including Shares as to which the Option would not otherwise be exercisable. In addition, the Administrator may provide that any Company repurchase option applicable to any Shares purchased upon exercise of the Option shall lapse as to all such Shares, provided the proposed dissolution or liquidation takes place at the time and in the manner contemplated. To the extent it has not been previously exercised, the Option will terminate immediately prior to the consummation of such proposed action. (c) Merger or Asset Sale. In the event of a merger of the Company with or -------------------- into another corporation, or the sale of substantially all of the assets of the Company, an outstanding Option shall be assumed or an equivalent option or right substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the Option, Optionee shall fully vest in and have the right to exercise the Option as to all of the Optioned Stock, including Shares as to which it would not otherwise be vested or exercisable. If an Option becomes fully vested and exercisable in lieu of assumption or substitution in the event of a merger or sale of assets, the Administrator shall notify Optionee in writing or electronically that the Option shall be fully vested and exercisable for a period of fifteen (15) days from the date of such notice, and the Option shall terminate upon the expiration of such period. For the purposes of this paragraph, the Option shall be considered assumed if, following the merger or sale of assets, the option or right confers the right to purchase or receive, for each Share of Optioned Stock subject to the Option immediately prior to the merger or sale of assets, the consideration (whether stock, cash, or other securities or property) received in the merger or sale of assets by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the - -------- ------- merger or sale of assets is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option or Stock Purchase Right, for each Share of Optioned Stock subject to the Option or Stock Purchase Right, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger or sale of assets. -2- EXHIBIT A --------- EXERCISE NOTICE PC-Tel, Inc. 1331 California Circle Milpitas, CA 95035 Attention: Chief Financial Officer 1. Exercise of Option. Effective as of today, ________________, 20__, the ------------------ undersigned ("Purchaser") hereby elects to purchase ______________ shares (the "Shares") of the Common Stock of PC-Tel, Inc. (the "Company") under and pursuant to the Company's Stock Option Agreement between the Company and Purchaser, dated November 15, 2001 (the "Option Agreement"). The purchase price for the Shares shall be $ __________, as required by the Option Agreement. 2. Delivery of Payment. Purchaser herewith delivers to the Company the full ------------------- purchase price for the Shares. 3. Representations of Purchaser. Purchaser acknowledges that Purchaser has ---------------------------- received, read and understood the Option Agreement and agrees to abide by and be bound by its terms and conditions. 4. Rights as Shareholder. Until the issuance (as evidenced by the --------------------- appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the Shares, no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Shares so acquired shall be issued to Optionee as soon as practicable after exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date of issuance, except as provided in Appendix 3 to the Option ---------- Agreement. 5. Tax Consultation. Purchaser understands that Purchaser may suffer ---------------- adverse tax consequences as a result of Purchaser's purchase or disposition of the Shares. Purchaser represents that Purchaser has consulted with any tax consultants Purchaser deems advisable in connection with the purchase or disposition of the Shares and that Purchaser is not relying on the Company for any tax advice. 6. Entire Agreement; Governing Law. The Option Agreement is incorporated ------------------------------- herein by reference. This Agreement and the Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Purchaser with respect to the subject matter hereof, and may not be modified adversely to the Purchaser's interest except by means of a writing signed by the Company and Purchaser. This agreement is governed by the internal substantive laws, but not the choice of law rules, of Delaware. Submitted by: Accepted by: PURCHASER: PC-TEL, INC. ___________________________________ ____________________________________ Signature By ___________________________________ ____________________________________ Print Name Its Address: Address: - ------- ------- ___________________________________ 1331 California Circle ___________________________________ Milpitas, CA 95035 ____________________________________ Date Received -2-
EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this registration statement on Form S-8, pertaining to the Stock Option Agreement dated November 15, 2001 in favor of Jeffrey A. Miller for an option to purchase 150,000 shares of PC-Tel, Inc. Common Stock and the Stock Option Agreement dated November 15, 2001 in favor of John Schoen for an option to purchase 150,000 shares of PC-Tel, Inc. Common Stock, of our report dated January 26, 2001 with respect to the consolidated financial statements and schedules of PC-TEL, Inc. included in the Form 10-K filed with the Securities and Exchange Commission on March 28, 2001. /s/ ARTHUR ANDERSEN LLP San Jose, California December 13, 2001