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8-K - MultiCell Technologies, Inc. | v195818_8k.htm |
EX-3.1 - MultiCell Technologies, Inc. | v195818_ex3-1.htm |
Exhibit
10.1
Multicell Technologies,
Inc.
2004 Equity Incentive
Plan
Adopted by the Board of Directors on
March 3, 2004
Approved by Stockholders on June 16,
2004
Amended by the Board of Directors on
March 4, 2005
Approved by the Stockholders on May 18,
2005
Amended by the Board of Directors on
June 25, 2009
Approved by the Stockholders on june 25,
2009
Amended by the Board of Directors on May
18, 2010
Approved by the Stockholders on August
26, 2010
Termination
Date: March 2,
2014
1. Purposes.
(a) Eligible Stock Award
Recipients. The
persons eligible to receive Stock Awards are Employees, Directors and
Consultants.
(b) Available Stock
Awards. The
purpose of the Plan is to provide a means by which eligible recipients of Stock
Awards may be given an opportunity to benefit from increases in the value of the
Common Stock through the granting of the following Stock Awards: (i)
Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) Stock Purchase
Awards, (iv) Stock Bonus Awards, (v) Stock Appreciation Rights, (vi) Stock Unit
Awards and (vii) Other Stock Awards.
(c) General
Purpose. The
Company, by means of the Plan, seeks to retain the services of the group of
persons eligible to receive Stock Awards, to secure and retain the services of
new members of this group and to provide incentives for such persons to exert
maximum efforts for the success of the Company and its
Affiliates.
2. Definitions.
(a) “Affiliate” means any parent corporation or
subsidiary corporation of the Company, whether now or hereafter existing, as
those terms are defined in Sections 424(e) and (f), respectively, of the
Code.
(b) “Board” means the Board of Directors of the
Company.
(c) “Capitalization
Adjustment” has the meaning
ascribed to that term in Section 11(a).
(d) “Cause” means, with respect to a Participant,
the occurrence of any of the following: (i) such Participant’s
commission of any felony or any crime involving fraud, dishonesty or moral
turpitude under the laws of the United States or any state therof; (ii) such
Participant’s attempted commission of, or participation in, a fraud or act of
dishonesty against the Company; (iii) such Participant’s intentional, material
violation of any contract or agreement between the Participant and the Company
or any statutory duty owed to the Company; (iv) such Participant’s unauthorized
use or disclosure of the Company’s confidential information or trade secrets;
(v) such Participant’s gross misconduct; or (vi) such Participant’s conduct that
constitutes gross insubordination, incompetence or habitual neglect of duties
and that results in (or might reasonably result in) material harm to the
business of the Company. The determination that a
termination is for Cause shall be made by the Company in its sole and exclusive
judgment and discretion. Any determination by the Company that
the Continuous Service of a Participant was terminated by reason of dismissal
without Cause for the purposes of outstanding Stock Awards held by such
Participant shall have no effect upon any determination of the rights or
obligations of the Company or such Participant for any other
purpose.
(e) “Change
in Control” means the
occurrence, in a single transaction or in a series of related transactions, of
any one or more of the following events:
(i) any Exchange Act Person becomes the
Owner, directly or indirectly, of securities of the Company representing more
than fifty percent (50%) of the combined voting power of the Company’s then
outstanding securities other than by virtue of a merger, consolidation or
similar transaction. Notwithstanding the foregoing, a Change in
Control shall not be deemed to occur (A) on account of the acquisition of
securities of the Company by an investor, any affiliate thereof or any other
Exchange Act Person from the Company in a transaction or series of related
transactions the primary purpose of which is to obtain financing for the Company
through the issuance of equity securities or (B) solely because the level of
Ownership held by any Exchange Act Person (the “Subject
Person”) exceeds the
designated percentage threshold of the outstanding voting securities as a result
of a repurchase or other acquisition of voting securities by the Company
reducing the number of shares outstanding, provided that if a Change in Control
would occur (but for the operation of this sentence) as a result of the
acquisition of voting securities by the Company, and after such share
acquisition, the Subject Person becomes the Owner of any additional voting
securities that, assuming the repurchase or other acquisition had not occurred,
increases the percentage of the then outstanding voting securities Owned by the
Subject Person over the designated percentage threshold, then a Change in
Control shall be deemed to occur;
(ii) there is consummated a merger,
consolidation or similar transaction involving (directly or indirectly) the
Company and, immediately after the consummation of such merger, consolidation or
similar transaction, the stockholders of the Company immediately prior thereto
do not Own, directly or indirectly, either (A) outstanding voting securities
representing more than fifty percent (50%) of the combined outstanding voting
power of the surviving Entity in such merger, consolidation or similar
transaction or (B) more than fifty percent (50%) of the combined outstanding
voting power of the parent of the surviving Entity in such merger, consolidation
or similar transaction, in each case in substantially the same proportions as
their Ownership of the outstanding voting securities of the Company immediately
prior to such transaction;
(iii) the
stockholders of the Company approve or the Board approves a plan of complete
dissolution or liquidation of the Company, or a complete dissolution or
liquidation of the Company shall otherwise occur;
(iv) there is consummated a sale, lease,
license or other disposition of all or substantially all of the consolidated
assets of the Company and its Subsidiaries, other than a sale, lease, license or
other disposition of all or substantially all of the consolidated assets of the
Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the
combined voting power of the voting securities of which are Owned by
stockholders of the Company in substantially the same proportions as their
Ownership of the outstanding voting securities of the Company immediately prior
to such sale, lease, license or other disposition; or
(v) individuals who, on the date this Plan
is adopted by the Board, are members of the Board (the “Incumbent
Board”) cease for any
reason to constitute at least a majority of the members of the Board;
provided,
however, that if the
appointment or election (or nomination for election) of any new Board member was
approved or recommended by a majority vote of the members of the Incumbent Board
then still in office, such new member shall, for purposes of this Plan, be
considered as a member of the Incumbent Board.
Notwithstanding the foregoing or any
other provision of this Plan, the definition of Change in Control (or any
analogous term) in an individual written agreement between the Company or any
Affiliate and the Participant shall supersede the foregoing definition with
respect to Stock Awards subject to such agreement (it being understood, however,
that if no definition of Change in Control or any analogous term is set forth in
such an individual written agreement, the foregoing definition shall
apply).
(f) “Code” means the Internal Revenue Code of
1986, as amended.
(g) “Committee” means a committee of one (1) or more
members of the Board appointed by the Board in accordance with
Section 3(c).
(h) “Common
Stock” means the common
stock of the Company.
(i) “Company” means Multicell Technologies, Inc., a
Delaware corporation.
(j) “Consultant” means any person, including an advisor,
who (i) is engaged by the Company or an Affiliate to render consulting or
advisory services and is compensated for such services or (ii) is serving
as a member of the Board of Directors of an Affiliate and is compensated for
such services. However,
service solely as a Director, or payment of a fee for such services, shall not
cause a Director to be considered a “Consultant” for purposes of the
Plan.
(k) “Continuous
Service” means that the
Participant’s service with the Company or an Affiliate, whether as an Employee,
Director or Consultant, is not interrupted or terminated. A change in
the capacity in which the Participant renders service to the Company or an
Affiliate as an Employee, Consultant or Director or a change in the entity for
which the Participant renders such service, provided that there is no
interruption or termination of the Participant’s service with the Company or an
Affiliate, shall not terminate a Participant’s Continuous
Service. For example, a change in status from an Employee of the
Company to a Consultant of an Affiliate or to a Director shall not constitute an
interruption of Continuous Service. The Board or the chief executive
officer of the Company, in that party’s sole discretion, may determine whether
Continuous Service shall be considered interrupted in the case of any leave of
absence approved by that party, including sick leave, military leave or any
other personal leave. Notwithstanding the foregoing, a leave of
absence shall be treated as Continuous Service for purposes of vesting in a
Stock Award only to such extent as may be provided in the Company’s leave of
absence policy or in the written terms of the Participant’s leave of
absence.
(l) “Corporate
Transaction” means the
occurrence, in a single transaction or in a series of related transactions, of
any one or more of the following events:
(i) a sale or other disposition of all or
substantially all, as determined by the Board in its discretion, of the
consolidated assets of the Company and its Subsidiaries;
(ii) a sale or other disposition of at least
ninety percent (90%) of the outstanding securities of the
Company;
(iii) a merger, consolidation or similar
transaction following which the Company is not the surviving corporation;
or
(iv) a merger, consolidation or similar
transaction following which the Company is the surviving corporation but the
shares of Common Stock outstanding immediately preceding the merger,
consolidation or similar transaction are converted or exchanged by virtue of the
merger, consolidation or similar transaction into other property, whether in the
form of securities, cash or otherwise.
(m) “Covered
Employee” means the chief
executive officer and the four (4) other highest compensated officers of the
Company for whom total compensation is required to be reported to stockholders
under the Exchange Act, as determined for purposes of Section 162(m) of the
Code.
(n) “Director” means a member of the
Board.
(o) “Disability” means the permanent and total
disability of a person within the meaning of Section 22(e)(3) of the
Code.
(p) “Effective
Date” means the date on
which this Plan is originally approved by the Company’s stockholders (on or
about June 16, 2004).
(q) “Employee” means any person employed by the
Company or an Affiliate. However, service solely as a Director, or
payment of a fee for such services, shall not cause a Director to be considered
an “Employee” for purposes of the Plan.
(r) “Entity” means a corporation, partnership or
other entity.
(s) “Exchange
Act” means the Securities
Exchange Act of 1934, as amended.
(t) “Exchange
Act Person” means any
natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d)
of the Exchange Act), except that “Exchange Act Person” shall not include (A)
the Company or any Subsidiary of the Company, (B) any employee benefit plan of
the Company or any Subsidiary of the Company or any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
Subsidiary of the Company, (C) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (D) an Entity Owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their Ownership of stock of the Company.
(u) “Fair
Market Value” means, as of
any date, the value of the Common Stock determined as
follows:
(i) If the Common Stock is listed on any
established stock exchange or traded on the Nasdaq National Market or the Nasdaq
SmallCap Market, the Fair Market Value of a share of Common Stock shall be the
closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or market (or the exchange or market with
the greatest volume of trading in 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 Board deems reliable.
(ii) In the absence of such markets for the
Common Stock, the Fair Market Value shall be determined by the Board in good
faith.
(v)
“Incentive Stock Option”
means an Option intended to qualify as an incentive stock option within the
meaning of Section 422 of the Code and the regulations promulgated
thereunder.
(w)
“Non-Employee Director” means a Director who either (i) is not a
current Employee or Officer of the Company or an Affiliate, does not receive
compensation, either directly or indirectly, from the Company or an Affiliate
for services rendered as a consultant or in any capacity other than as a
Director (except for an amount as to which disclosure would not be required
under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
(“Regulation
S-K”)), does not possess an
interest in any other transaction for which disclosure would be required under
Item 404(a) of Regulation S-K, and is not engaged in a business relationship for
which disclosure would be required pursuant to Item 404(b) of Regulation
S-K; or (ii) is otherwise considered a “non-employee director” for purposes of
Rule 16b-3.
(x) “Nonstatutory
Stock Option” means an
Option not intended to qualify as an Incentive Stock Option.
(y) “Officer” means a 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.
(z) “Option” means an Incentive Stock Option or a
Nonstatutory Stock Option to purchase shares of Common Stock granted pursuant to
the Plan.
(aa) “Option
Agreement” means a written
agreement between the Company and an Optionholder evidencing the terms and
conditions of an Option grant. Each Option Agreement shall be subject
to the terms and conditions of the Plan.
(bb) “Optionholder” means a person to whom an Option is
granted pursuant to the Plan or, if applicable, such other person who holds an
outstanding Option.
(cc) “Other
Stock Award” means an award
based in whole or in part by reference to the Common Stock which is granted
pursuant to the terms and conditions of Section 7(e).
(dd) “Other
Stock Award Agreement” means a written agreement between the
Company and a holder of an Other Stock Award evidencing the terms and conditions
of an Other Stock Award grant. Each Other Stock Award Agreement shall
be subject to the terms and conditions of the Plan.
(ee) “Outside
Director” means a Director
who either (i) is not a current employee of the Company or an “affiliated
corporation” (within the meaning of Treasury Regulations promulgated under
Section 162(m) of the Code), is not a former employee of the Company or an
“affiliated corporation” who receives compensation for prior services (other
than benefits under a tax-qualified retirement plan) during the taxable year,
has not been an officer of the Company or an “affiliated corporation”, and does
not receive remuneration from the Company or an “affiliated corporation,” either
directly or indirectly, in any capacity other than as a Director or (ii) is
otherwise considered an “outside director” for purposes of Section 162(m) of the
Code.
(ff) “Own,”
“Owned,” “Owner,” “Ownership” A person or Entity shall be deemed to
“Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of
securities if such person or Entity, directly or indirectly, through any
contract, arrangement, understanding, relationship or otherwise, has or shares
voting power, which includes the power to vote or to direct the voting, with
respect to such securities.
(gg) “Participant” means a person to whom a Stock Award is
granted pursuant to the Plan or, if applicable, such other person who holds an
outstanding Stock Award.
(hh)
“Plan” means this Multicell
Technologies, Inc. 2004 Equity Incentive Plan, as amended.
(ii)
“Rule 16b-3” means Rule
16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in
effect from time to time.
(jj) “Securities
Act” means the Securities
Act of 1933, as amended.
(kk) “Stock
Appreciation Right” means a
right to receive the appreciation of Common Stock that is granted pursuant to
the terms and conditions of Section 7(d).
(ll) “Stock
Appreciation Right Agreement” means a written agreement between the
Company and a holder of a Stock Appreciation Right evidencing the terms and
conditions of a Stock Appreciation Right grant. Each Stock
Appreciation Right Agreement shall be subject to the terms and conditions of the
Plan.
(mm) “Stock
Award” means any right
granted under the Plan, including an Option, a Stock Purchase Award, Stock Bonus
Award, a Stock Appreciation Right, a Stock Unit Award or any Other Stock
Award.
(nn) “Stock
Award Agreement” means a
written agreement between the Company and a Participant evidencing the terms and
conditions of a Stock Award grant. Each Stock Award Agreement shall
be subject to the terms and conditions of the Plan.
(oo) “Stock
Bonus Award” means an award
of shares of Common Stock which is granted pursuant to the terms and conditions
of Section 7(b).
(pp) “Stock
Bonus Award Agreement”
means a written agreement between the Company and a holder of a Stock Bonus
Award evidencing the terms and conditions of a Stock Bonus Award
grant. Each Stock Bonus Award Agreement shall be subject to the terms
and conditions of the Plan.
(qq) “Stock
Purchase Award” means an
award of shares of Common Stock which is granted pursuant to the terms and
conditions of Section 7(a).
(rr) “Stock
Purchase Award Agreement”
means a written agreement between the Company and a holder of a Stock Purchase
Award evidencing the terms and conditions of a Stock Purchase Award
grant. Each Stock Purchase Award Agreement shall be subject to the
terms and conditions of the Plan.
(ss) “Stock
Unit Award” means a right
to receive shares of Common Stock which is granted pursuant to the terms and
conditions of Section 7(c).
(tt) “Stock
Unit Award Agreement” means
a written agreement between the Company and a holder of a Stock Unit Award
evidencing the terms and conditions of a Stock Unit Award grant. Each
Stock Unit Award Agreement shall be subject to the terms and conditions of the
Plan.
(uu) “Subsidiary” means, with respect to the Company, (i)
any corporation of which more than fifty percent (50%) of the outstanding
capital stock having ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether, at the time, stock of
any other class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the time, directly or
indirectly, Owned by the Company, and (ii) any partnership in which the Company
has a direct or indirect interest (whether in the form of voting or
participation in profits or capital contribution) of more than fifty percent
(50%).
(vv) “Ten
Percent Stockholder” means
a person who Owns (or is deemed to Own pursuant to Section 424(d) of the Code)
stock possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or of any of its
Affiliates.
3. Administration.
(a) Administration by
Board. The Board
shall administer the Plan unless and until the Board delegates administration of
the Plan to a Committee, as provided in Section 3(c).
(b) Powers of
Board. The Board
shall have the power, subject to, and within the limitations of, the express
provisions of the Plan:
(i) To determine from time to time which of
the persons eligible under the Plan shall be granted Stock Awards; when and how
each Stock Award shall be granted; what type or combination of types of Stock
Award shall be granted; the provisions of each Stock Award granted (which need
not be identical), including the time or times when a person shall be permitted
to receive Common Stock pursuant to a Stock Award; and the number of shares of
Common Stock with respect to which a Stock Award shall be granted to each such
person.
(ii) To
construe and interpret the Plan and Stock Awards granted under it, and to
establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct
any defect, omission or inconsistency in the Plan or in any Stock Award
Agreement, in a manner and to the extent it shall deem necessary or expedient to
make the Plan fully effective.
(iii) To
effect, at any time and from time to time, with the consent of any adversely
affected Optionholder, (1) the reduction of the exercise price of any
outstanding Option under the Plan, (2) the cancellation of any outstanding
Option under the Plan and the grant in substitution therefor of (A) a new Option
under the Plan or another equity plan of the Company covering the same or a
different number of shares of Common Stock, (B) a Stock Purchase Award, (C) a
Stock Bonus Award, (D) a Stock Appreciation Right, (E) a Stock Unit Award (F) an
Other Stock Award, (G) cash and/or (H) other valuable consideration (as
determined by the Board, in its sole discretion), or (3) any other action that
is treated as a repricing under generally accepted accounting
principles.
(iv) To amend the Plan or a Stock Award as
provided in Section 12.
(v) To terminate or suspend the Plan as
provided in Section 13.
(vi) Generally, to exercise such powers and
to perform such acts as the Board deems necessary or expedient to promote the
best interests of the Company and that are not in conflict with the provisions
of the Plan.
(vii) To
adopt such procedures and sub-plans as are necessary or appropriate to permit
participation in the Plan by Employees who are foreign nationals or employed
outside the United States.
(c) Delegation to
Committee.
(i) General. The Board may delegate some
or all of the administration of the Plan to a Committee or Committees of one (1)
or more members of the Board, and the term “Committee” shall apply to any person or persons to
whom such authority has been delegated. If administration is
delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board that
have been delegated to the Committee, including the power to delegate to a
subcommittee any of the administrative powers the Committee is authorized to
exercise (and references in this Plan to the Board shall thereafter be to the
Committee or subcommittee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board. The Board may retain the authority to concurrently
administer the Plan with the Committee and may, at any time, revest in the Board
some or all of the powers previously delegated.
(ii) Section 162(m) and
Rule 16b-3 Compliance. In the discretion of the
Board, the Committee may consist solely of two or more Outside Directors, in
accordance with Section 162(m) of the Code, and/or solely of two or more
Non-Employee Directors, in accordance with Rule 16b-3. In addition,
the Board or the Committee, in its discretion, may (1) delegate to a committee
of one or more members of the Board who need not be Outside Directors the
authority to grant Stock Awards to eligible persons who are either (a) not then
Covered Employees and are not expected to be Covered Employees at the time of
recognition of income resulting from such Stock Award, or (b) not persons with
respect to whom the Company wishes to comply with Section 162(m) of the Code,
and/or (2) delegate to a committee of one or more members of the Board who need
not be Non-Employee Directors the authority to grant Stock Awards to eligible
persons who are not then subject to Section 16 of the Exchange
Act.
(d) Delegation to an
Officer. The
Board may delegate to one or more Officers of the Company the authority to do
one or both of the following (i) designate Officers and Employees of the Company
or any of its Subsidiaries to be recipients of Stock Awards and (ii) determine
the number of shares of Common Stock to be subject to such Stock Awards granted
to such Officers and Employees of the Company; provided, however,
that the Board resolutions
regarding such delegation shall specify the total number of shares of Common
Stock that may be subject to the Stock Awards granted by such Officer and that
such Officer may not grant a Stock Award to himself or
herself. Notwithstanding anything to the contrary in this Section
3(d), the Board may not delegate to an Officer authority to determine the Fair
Market Value of the Common Stock pursuant to Section 2(t)(ii)
above.
(e) Effect of Board’s
Decision. All
determinations, interpretations and constructions made by the Board in good
faith shall not be subject to review by any person and shall be final, binding
and conclusive on all persons.
(f) Arbitration. Any
and all disputes, claims, or causes of action, in law or equity, concerning any
Stock Awards granted (or not granted) pursuant to the Plan or any disputes or
claims relating to or arising out of the Plan shall be resolved, to the fullest
extent permitted by law, by final, binding arbitration in San Diego, California
conducted by the Judicial Arbitration and Mediation Services (“JAMS”), or its successors, under
the then current rules of JAMS; provided that the arbitrator
shall: (a) have the authority to compel adequate discovery for the
resolution of the dispute and to award such relief as would otherwise be
permitted by law; and (b) issue a written arbitration decision including the
arbitrator’s essential findings and conclusions and a statement of the
award. Both the Participant and the Company shall be entitled to all
rights and remedies that either the Participant or the Company would be entitled
to pursue in a court of law.
4. Shares Subject
to the Plan.
(a) Share
Reserve. Subject to the provisions
of Section 11(a) relating to Capitalization Adjustments, the shares of Common
Stock that may be issued pursuant to Stock Awards shall not exceed in the
aggregate fifty-seven million (57,000,000) shares of Common Stock plus an annual
increase to be added on the first day of each Company fiscal year, beginning in
2005 and ending in (and including) 2013, equal to the least of the following
amounts: (A) two percent (2%) of the Company’s outstanding shares of Common
Stock on the day preceding the first day of such fiscal year (rounded to the
nearest whole share), (B) one million five hundred thousand (1,500,000) shares
of Common Stock, or (C) an amount determined by the Board. In addition, the share
reserve under this Plan shall be increased from time to time by such number of shares of Common Stock as
is equal to the number of shares of Common Stock that, but for the termination
of the 2000 Stock Incentive Plan (the “2000
Plan”) as of the Effective
Date, would otherwise have reverted to the share reserve of the 2000 Plan
pursuant to the terms thereof.
(b) Reversion of Shares to the Share
Reserve. If any Stock Award shall for any reason expire or
otherwise terminate, in whole or in part, without having been exercised in full,
or if any shares of Common Stock issued to a Participant pursuant to a Stock
Award are forfeited to or repurchased by the Company, including, but not limited
to, any repurchase or forfeiture caused by the failure to meet a contingency or
condition required for the vesting of such shares, then the shares of Common
Stock not issued under such Stock Award, or forfeited to or repurchased by the
Company, shall revert to and again become available for issuance under the
Plan. If any shares subject to a Stock Award are not delivered to a
Participant because such shares are withheld for the payment of taxes or the
Stock Award is exercised through a reduction of shares subject to the Stock
Award (i.e., “net
exercised”), the number of shares that are not delivered to the Participant
shall remain available for issuance under the Plan. If the exercise
price of any Stock Award is satisfied by tendering shares of Common Stock held
by the Participant (either by actual delivery or attestation), then the number
of shares so tendered shall remain available for issuance under the
Plan. Notwithstanding anything to the contrary in this Section 4(b),
subject to the provisions of Section 11(a) relating to Capitalization
Adjustments the aggregate maximum number of shares of Common Stock that may be
issued as Incentive Stock Options shall be fifty-seven million (57,000,000)
shares of Common Stock.
(c) Source of
Shares. The
shares of Common Stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.
5. Eligibility.
(a) Eligibility for
Specific Stock Awards. Incentive Stock Options may
be granted only to Employees. Stock Awards other than Incentive Stock
Options may be granted to Employees, Directors and
Consultants.
(b) Ten Percent
Stockholders. A
Ten Percent Stockholder shall not be granted an Incentive Stock Option unless
the exercise price of such Option is at least one hundred ten percent (110%) of
the Fair Market Value of the Common Stock on the date of grant and the Option is
not exercisable after the expiration of five (5) years from the date of
grant.
(c) Section 162(m)
Limitation on Annual Grants. Subject to the provisions
of Section 11(a) relating to Capitalization Adjustments, at such time as the
Company may be subject to the applicable provisions of Section 162(m) of the
Code, no Employee shall be eligible to be granted Options or Stock Appreciation
Rights covering more than two million (2,000,000) shares of Common Stock during
any calendar year.
(d) Consultants. A Consultant shall not be
eligible for the grant of a Stock Award if, at the time of grant, a Form S-8
Registration Statement under the Securities Act (“Form
S-8”) is not available to
register either the offer or the sale of the Company’s securities to such
Consultant because of the nature of the services that the Consultant is
providing to the Company, because the Consultant is not a natural person, or
because of any other rule governing the use of Form S-8.
6. Option
Provisions.
Each Option shall be in such form and
shall contain such terms and conditions as the Board shall deem
appropriate. All Options shall be separately designated Incentive
Stock Options or Nonstatutory Stock Options at the time of grant, and, if
certificates are issued, a separate certificate or certificates shall be issued
for shares of Common Stock purchased on exercise of each type of
Option. The provisions of separate Options need not be identical, but
each Option shall include (through incorporation of provisions hereof by
reference in the Option or otherwise) the substance of each of the following
provisions:
(a) Term. The Board shall determine
the term of an Option; provided however
that, subject to the
provisions of Section 5(b) regarding Ten Percent Stockholders, no Incentive
Stock Option shall be exercisable after the expiration of ten (10) years from
the date on which it was granted.
(b) Exercise Price of an
Incentive Stock Option. Subject to the provisions of
Section 5(b) regarding Ten Percent Stockholders, the exercise price of each
Incentive Stock Option shall be not less than one hundred percent (100%) of the
Fair Market Value of the Common Stock subject to the Option on the date the
Option is granted. Notwithstanding the foregoing, an Incentive Stock
Option may be granted with an exercise price lower than that set forth in the
preceding sentence if such Option is granted pursuant to an assumption or
substitution for another option in a manner satisfying the provisions of Section
424(a) of the Code.
(c) Exercise Price of a
Nonstatutory Stock Option. The Board, in its
discretion, shall determine the exercise price of each Nonstatutory Stock
Option.
(d) Consideration. The purchase price of Common
Stock acquired pursuant to an Option shall be paid, to the extent permitted by
applicable law, either (i) in cash at the time the Option is exercised or (ii)
at the discretion of the Board at the time of the grant of the Option (or
subsequently in the case of a Nonstatutory Stock Option) (1) by delivery to the
Company (either by actual delivery or attestation) of other Common Stock at the time the
Option is exercised, (2) according to a deferred payment or other similar
arrangement with the Optionholder, (3) by a “net exercise” of the Option (as
further described below), (4) pursuant to a program developed under Regulation T
as promulgated by the Federal Reserve Board that, prior to the issuance of
Common Stock, results in either the receipt of cash (or check) by the Company or
the receipt of irrevocable instructions to pay the aggregate exercise price to
the Company from the sales proceeds or (5) in any other form of legal
consideration that may be acceptable to the Board. Unless otherwise
specifically provided in the Option, the purchase price of Common Stock acquired
pursuant to an Option that is paid by delivery to the Company of other Common
Stock acquired, directly or indirectly from the Company, shall be paid only by
shares of the Common Stock of the Company that have been held for more than six
(6) months (or such longer or shorter period of time required to avoid a charge
to earnings for financial accounting purposes). At any time that the
Company is incorporated in Delaware, payment of the Common Stock’s “par value,”
as defined in the Delaware General Corporation Law, shall not be made by
deferred payment.
In the case of any deferred payment
arrangement, interest shall be compounded at least annually and shall be charged
at the minimum rate of interest necessary to avoid (1) the treatment as
interest, under any applicable provisions of the Code, of any amounts other than
amounts stated to be interest under the deferred payment arrangement and (2) the
treatment of the Option as a variable award for financial accounting
purposes.
In the
case of a “net exercise” of an Option, the Company will not require a payment of
the exercise price of the Option from the Participant but will reduce the number
of shares of Common Stock issued upon the exercise by the largest number of
whole shares that has a Fair Market Value that does not exceed the aggregate
exercise price. With respect to any remaining balance of the
aggregate exercise price, the Company shall accept a cash payment from the
Participant. Shares of Common Stock will no longer be outstanding
under an Option (and will therefore not thereafter be exercisable) following the
exercise of such Option to the extent of (i) shares used to pay the exercise
price of an Option under the “net exercise”, (ii) shares actually delivered to
the Participant as a result of such exercise and (iii) shares withheld for
purposes of tax withholding.
(e) Transferability of an
Incentive Stock Option. An Incentive Stock Option
shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Optionholder
only by the Optionholder. Notwithstanding the foregoing, the
Optionholder may, by delivering written notice to the Company, in a form
provided by or otherwise satisfactory to the Company, designate a third party
who, in the event of the death of the Optionholder, shall thereafter be entitled
to exercise the Option.
(f) Transferability of a
Nonstatutory Stock Option. A Nonstatutory Stock Option
shall be transferable to the extent provided in the Option
Agreement. If the Nonstatutory Stock Option does not provide for
transferability, then the Nonstatutory Stock Option shall not be transferable
except by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Optionholder only by the
Optionholder. Notwithstanding the foregoing, the Optionholder may, by
delivering written notice to the Company, in a form provided by or otherwise
satisfactory to the Company, designate a third party who, in the event of the
death of the Optionholder, shall thereafter be entitled to exercise the
Option.
(g) Vesting
Generally. The
total number of shares of Common Stock subject to an Option may vest and
therefore become exercisable in periodic installments that may be
equal. The Option may be subject to such other terms and conditions
on the time or times when it may be exercised (which may be based on performance
or other criteria) as the Board may deem appropriate. The vesting
provisions of individual Options may vary. The provisions of this
Section 6(g) are subject to any Option provisions governing the minimum number
of shares of Common Stock as to which an Option may be
exercised.
(h) Termination of
Continuous Service. In the event that an
Optionholder’s Continuous Service terminates (for reasons other than Cause or
upon the Optionholder’s death or Disability), the Optionholder may exercise his
or her Option (to the extent that the Optionholder was entitled to exercise such
Option as of the date of termination of Continuous Service) but only within such
period of time ending on the earlier of (i) the expiration of the term of the
Option as set forth in the Option Agreement or (ii) the date three (3) months
following the termination of the Optionholder’s Continuous Service (or such
longer or shorter period specified in the Option Agreement). If,
after termination of Continuous Service, the Optionholder does not exercise his
or her Option within the time specified herein or in the Option Agreement (as
applicable), the Option shall terminate.
(i) Extension of
Termination Date. An Optionholder’s Option
Agreement may provide that if the exercise of the Option following the
termination of the Optionholder’s Continuous Service (for reasons other than
Cause or upon the Optionholder’s death or Disability) would be prohibited at any
time solely because the issuance of shares of Common Stock would violate the
registration requirements under the Securities Act, then the Option shall
terminate on the earlier of (i) the expiration of the term of the Option set
forth in the Option Agreement or (ii) the expiration of a period of three (3)
months after the termination of the Optionholder’s Continuous Service during
which the exercise of the Option would not be in violation of such registration
requirements.
(j) Disability of
Optionholder. In
the event that an Optionholder’s Continuous Service terminates as a result of
the Optionholder’s Disability, the Optionholder may exercise his or her Option
(to the extent that the Optionholder was entitled to exercise such Option as of
the date of termination of Continuous Service), but only within such period of
time ending on the earlier of (i) the expiration of the term of the Option as
set forth in the Option Agreement or (ii) the date twelve (12) months following
such termination of Continuous Service (or such longer or shorter period
specified in the Option Agreement). If, after termination of
Continuous Service, the Optionholder does not exercise his or her Option within
the time specified herein or in the Option Agreement (as applicable), the Option
shall terminate.
(k) Death of
Optionholder. In
the event that (i) an Optionholder’s Continuous Service terminates as a result
of the Optionholder’s death or (ii) the Optionholder dies within the period (if
any) specified in the Option Agreement after the termination of the
Optionholder’s Continuous Service for a reason other than death, then the Option
may be exercised (to the extent the Optionholder was entitled to exercise such
Option as of the date of death) by the Optionholder’s estate, by a person who
acquired the right to exercise the Option by bequest or inheritance or by a
person designated to exercise the option upon the Optionholder’s death pursuant
to Section 6(e) or 6(f), but only within the period ending on the earlier of (i)
the expiration of the term of such Option as set forth in the Option Agreement
or (ii) the date eighteen (18) months following the date of death (or such
longer or shorter period specified in the Option Agreement). If,
after the Optionholder’s death, the Option is not exercised within the time
specified herein or in the Option Agreement (as applicable), the Option shall
terminate.
(l) Termination for
Cause. In the
event that an Optionholder’s Continuous Service is terminated for Cause, the
Option shall terminate upon the termination date of such Optionholder’s
Continuous Service, and the Optionholder shall be prohibited from exercising his
or her Option from and after the time of such termination of Continuous
Service.
(m) Early
Exercise. The
Option may include a provision whereby the Optionholder may elect at any time
before the Optionholder’s Continuous Service terminates to exercise the Option
as to any part or all of the shares of Common Stock subject to the Option prior
to the full vesting of the Option. Any unvested shares of Common
Stock so purchased may be subject to a repurchase option in favor of the Company
or to any other restriction the Board determines to be
appropriate. The Company shall not be required to exercise its
repurchase option until at least six (6) months (or such longer or shorter
period of time required to avoid a charge to earnings for financial accounting
purposes) have elapsed following exercise of the Option unless the Board
otherwise specifically provides in the Option.
7. Provisions of
Stock Awards other than Options.
(a) Stock Purchase
Awards. Each
Stock Purchase Award Agreement shall be in such form and shall contain such
terms and conditions as the Board shall deem appropriate. At the
Board’s election, shares of Common Stock may be (i) held in book entry form
subject to the Company’s instructions until any restrictions relating to the
Stock Purchase Award lapse; or (ii) evidenced by a certificate, which
certificate shall be held in such form and manner as determined by the
Board. The terms and conditions of Stock Purchase Award Agreements
may change from time to time, and the terms and conditions of separate Stock
Purchase Award Agreements need not be identical, provided, however,
that each Stock Purchase
Award Agreement shall include (through incorporation of the provisions hereof by
reference in the agreement or otherwise) the substance of each of the following
provisions:
(i) Purchase
Price. At the
time of the grant of a Stock Purchase Award, the Board will determine the price
to be paid by the Participant for each share subject to the Stock Purchase
Award. To the extent required by applicable law, the price to be paid
by the Participant for each share of the Stock Purchase Award will not be less
than the par value of a share of Common Stock.
(ii) Consideration. At the time of the grant of
a Stock Purchase Award, the Board will determine the consideration permissible
for the payment of the purchase price of the Stock Purchase
Award. The purchase price of Common Stock acquired pursuant to the
Stock Purchase Award shall be paid either: (i) in cash at the time of purchase
or (ii) in any other form of legal consideration that may be acceptable to the
Board and permissible under the Delaware General Corporation
Law.
(iii) Vesting. Shares of Common Stock acquired under a
Stock Purchase Award may be subject to a share repurchase right or option in
favor of the Company in accordance with a vesting schedule to be determined by
the Board.
(iv) Termination of
Participant’s Continuous Service. In the event that a Participant’s
Continuous Service terminates, the Company shall have the right, but not the
obligation, to repurchase or otherwise reacquire, any or all of the shares of
Common Stock held by the Participant that have not vested as of the date of
termination under the terms of the Stock Purchase Award Agreement. At
the Board’s election, the repurchase right may be at the least of: (i) the Fair
Market Value on the relevant date or (ii) the Participant’s original
cost. The Company shall not be required to exercise its repurchase
option until at least six (6) months (or such longer or shorter period of time
required to avoid a charge to earnings for financial accounting purposes) have
elapsed following the purchase of the restricted stock unless otherwise
determined by the Board or provided in the Stock Purchase Award
Agreement.
(v) Transferability. Rights to purchase or receive shares of
Common Stock granted under a Stock Purchase Award shall be transferable by the
Participant only upon such terms and conditions as are set forth in the Stock
Purchase Award Agreement, as the Board shall determine in its discretion, and so
long as Common Stock awarded under the Stock Purchase Award remains subject to
the terms of the Stock Purchase Award Agreement.
(b) Stock Bonus
Awards. Each Stock Bonus Award Agreement shall be in such form
and shall contain such terms and conditions as the Board shall deem
appropriate. At the Board’s election, shares of Common Stock may be
(i) held in book entry form subject to the Company’s instructions until any
restrictions relating to the Stock Bonus Award lapse; or (ii) evidenced by a
certificate, which certificate shall be held in such form and manner as
determined by the Board. The terms and conditions of Stock Bonus
Award Agreements may change from time to time, and the terms and conditions of
separate Stock Bonus Award Agreements need not be identical, but each Stock
Bonus Award Agreement shall include (through incorporation of provisions hereof
by reference in the agreement or otherwise) the substance of each of the
following provisions:
(i) Consideration. A
Stock Bonus Award may be awarded in consideration for past services actually
rendered to the Company or an Affiliate.
(ii) Vesting. Shares of
Common Stock awarded under the Stock Bonus Award Agreement may be subject to
forfeiture to the Company in accordance with a vesting schedule to be determined
by the Board.
(iii) Termination of Participant’s
Continuous Service. In the event a Participant’s Continuous
Service terminates, the Company may receive via a forfeiture condition, any or
all of the shares of Common Stock held by the Participant which have not vested
as of the date of termination of Continuous Service under the terms of the Stock
Bonus Award Agreement.
(iv) Transferability. Rights
to acquire shares of Common Stock under the Stock Bonus Award Agreement shall be
transferable by the Participant only upon such terms and conditions as are set
forth in the Stock Bonus Award Agreement, as the Board shall determine in its
discretion, so long as Common Stock awarded under the Stock Bonus Award
Agreement remains subject to the terms of the Stock Bonus Award
Agreement.
(c) Stock Unit
Awards. Each
Stock Unit Award Agreement shall be in such form and shall contain such terms
and conditions as the Board shall deem appropriate. The terms and
conditions of Stock Unit Award Agreements may change from time to time, and the
terms and conditions of separate Stock Unit Award Agreements need not be
identical, provided, however,
that each Stock Unit Award
Agreement shall include (through incorporation of the provisions hereof by
reference in the agreement or otherwise) the substance of each of the following
provisions:
(i) Consideration. At the time of grant of a
Stock Unit Award, the Board will determine the consideration, if any, to be paid
by the Participant upon delivery of each share of Common Stock subject to the
Stock Unit Award. To the extent required by applicable law, the consideration to
be paid by the Participant for each share of Common Stock subject to a Stock
Unit Award will not be less than the par value of a share of Common
Stock. The consideration may be paid in any form permitted under
applicable law.
(ii) Vesting. At the time of the grant of a Stock Unit
Award, the Board may impose such restrictions or conditions to the vesting of
the Stock Unit Award as it, in its absolute discretion, deems
appropriate.
(iii) Payment. A Stock Unit Award may be
settled by the delivery of shares of Common Stock, their cash equivalent, any
combination thereof or in any other form of consideration as determined by the
Board and contained in the Stock Unit Award Agreement.
(iv) Additional
Restrictions. At
the time of the grant of a Stock Unit Award, the Board, as it deems appropriate,
may impose such restrictions or conditions that delay the delivery of the shares
of Common Stock (or their cash equivalent) subject to a Stock Unit Award after
the vesting of such Stock Unit Award.
(v) Dividend
Equivalents. Dividend equivalents may be credited in
respect of shares of Common Stock covered by a Stock Unit Award, as determined
by the Board and contained in the Stock Unit Award Agreement. At the
discretion of the Board, such dividend equivalents may be converted into
additional shares of Common Stock covered by the Stock Unit Award in such manner
as determined by the Board. Any additional shares covered by the
Stock Unit Award credited by reason of such dividend equivalents will be subject
to all the terms and conditions of the underlying Stock Unit Award Agreement to
which they relate.
(vi) Termination of
Participant’s Continuous Service. Except as otherwise provided in the
applicable Stock Unit Award Agreement, such portion of the Stock Unit Award that
has not vested will be forfeited upon the Participant’s termination of
Continuous Service for any reason.
(d) Stock Appreciation
Rights. Each
Stock Appreciation Right Agreement shall be in such form and shall contain such
terms and conditions as the Board shall deem appropriate. The terms
and conditions of Stock Appreciation Right Agreements may change from time to
time, and the terms and conditions of separate Stock Appreciation Right
Agreements need not be identical, provided,
however, that each Stock
Appreciation Right Agreement shall include (through incorporation of the
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:
(i) Strike Price and
Calculation of Appreciation. Each Stock Appreciation
Right will be denominated in share of Common Stock equivalents. The
appreciation distribution payable on the exercise of a Stock Appreciation Right
will be not greater than an amount equal to the excess of (A) the aggregate Fair
Market Value (on the date of the exercise of the Stock Appreciation Right) of a
number of shares of Common Stock equal to the number of share of Common Stock
equivalents in which the Participant is vested under such Stock Appreciation
Right, and with respect to which the Participant is exercising the Stock
Appreciation Right on such date, over (B) an amount (the strike price) that will
be determined by the Board at the time of grant of the Stock Appreciation
Right.
(ii) Vesting. At the time of the grant of a Stock
Appreciation Right, the Board may impose such restrictions or conditions to the
vesting of such Stock Appreciation Right as it, in its absolute discretion,
deems appropriate.
(iii) Exercise. To exercise any outstanding
Stock Appreciation Right, the Participant must provide written notice of
exercise to the Company in compliance with the provisions of the Stock
Appreciation Right Agreement evidencing such Stock Appreciation
Right.
(iv) Payment. The appreciation
distribution in respect to a Stock Appreciation Right may be paid in Common
Stock, in cash, in any combination of the two or in any other form of
consideration as determined by the Board and contained in the Stock Appreciation
Right Agreement evidencing such Stock Appreciation Right.
(v) Termination of
Continuous Service. In the event that a
Participant’s Continuous Service terminates, the Participant may exercise his or
her Stock Appreciation Right (to the extent that the Participant was entitled to
exercise such Stock Appreciation Right as of the date of termination) but only
within such period of time ending on the earlier of (i) the date three (3)
months following the termination of the Participant’s Continuous Service (or
such longer or shorter period specified in the Stock Appreciation Right
Agreement) or (ii) the expiration of the term of the Stock Appreciation Right as
set forth in the Stock Appreciation Right Agreement. If, after
termination, the Participant does not exercise his or her Stock Appreciation
Right within the time specified herein or in the Stock Appreciation Right
Agreement (as applicable), the Stock Appreciation Right shall
terminate.
(e) Other Stock
Awards. Other
forms of Stock Awards valued in whole or in part by reference to, or otherwise
based on, Common Stock may be granted either alone or in addition to Stock
Awards provided for under Section 6 and the preceding provisions of this Section
7. Subject to the provisions of the Plan, the Board shall have sole
and complete authority to determine the persons to whom and the time or times at
which such Other Stock Awards will be granted, the number of shares of Common
Stock (or the cash equivalent thereof) to be granted pursuant to such Awards and
all other terms and conditions of such Awards.
8. Covenants of
the Company.
(a) Availability of
Shares. During
the terms of the Stock Awards, the Company shall keep available at all times the
number of shares of Common Stock required to satisfy such Stock
Awards.
(b) Securities Law
Compliance. The
Company shall seek to obtain from each regulatory commission or agency having
jurisdiction over the Plan such authority as may be required to grant Stock
Awards and to issue and sell shares of Common Stock upon exercise of the Stock
Awards; provided,
however, that this
undertaking shall not require the Company to register under the Securities Act
the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable
to obtain from any such regulatory commission or agency the authority which
counsel for the Company deems necessary for the lawful issuance and sale of
Common Stock under the Plan, the Company shall be relieved from any liability
for failure to issue and sell Common Stock upon exercise of such Stock Awards
unless and until such authority is obtained.
9. Use of
Proceeds from Stock.
Proceeds from the sale of Common Stock
pursuant to Stock Awards shall constitute general funds of the
Company.
10. Miscellaneous.
(a) Acceleration of
Exercisability and Vesting. The Board shall have the
power to accelerate the time at which a Stock Award may first be exercised or
the time during which a Stock Award or any part thereof will vest in accordance
with the Plan, notwithstanding the provisions in the Stock Award stating the
time at which it may first be exercised or the time during which it will
vest.
(b) Stockholder
Rights. No
Participant shall be deemed to be the holder of, or to have any of the rights of
a holder with respect to, any shares of Common Stock subject to such Stock Award
unless and until such Participant has satisfied all requirements for exercise of
the Stock Award pursuant to its terms.
(c) No Employment or
other Service Rights. Nothing in the Plan, any
Stock Award Agreement or other instrument executed thereunder or any Stock Award
granted pursuant thereto shall confer upon any Participant any right to continue
to serve the Company or an Affiliate in the capacity in effect at the time the
Stock Award was granted or shall affect the right of the Company or an Affiliate
to terminate (i) the employment of an Employee with or without notice and with
or without cause, (ii) the service of a Consultant pursuant to the terms of such
Consultant’s agreement with the Company or an Affiliate or (iii) the service of
a Director pursuant to the Bylaws of the Company or an Affiliate, and any
applicable provisions of the corporate law of the state in which the Company or
the Affiliate is incorporated, as the case may be.
(d) Incentive Stock
Option $100,000 Limitation. To the extent that the
aggregate Fair Market Value (determined at the time of grant) of Common Stock
with respect to which Incentive Stock Options are exercisable for the first time
by any Optionholder during any calendar year (under all plans of the Company and
its Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or
portions thereof that exceed such limit (according to the order in which they
were granted) shall be treated as Nonstatutory Stock Options, notwithstanding
any contrary provision of the applicable Option
Agreement(s).
(e) Investment
Assurances. The
Company may require a Participant, as a condition of exercising or acquiring
Common Stock under any Stock Award, (i) to give written assurances satisfactory
to the Company as to the Participant’s knowledge and experience in financial and
business matters and/or to employ a purchaser representative reasonably
satisfactory to the Company who is knowledgeable and experienced in financial
and business matters and that he or she is capable of evaluating, alone or
together with the purchaser representative, the merits and risks of exercising
the Stock Award; and (ii) to give written assurances satisfactory to the Company
stating that the Participant is acquiring Common Stock subject to the Stock
Award for the Participant’s own account and not with any present intention of
selling or otherwise distributing the Common Stock. The foregoing
requirements, and any assurances given pursuant to such requirements, shall be
inoperative if (1) the issuance of the shares of Common Stock upon the exercise
or acquisition of Common Stock under the Stock Award has been registered under a
then currently effective registration statement under the Securities Act or (2)
as to any particular requirement, a determination is made by counsel for the
Company that such requirement need not be met in the circumstances under the
then applicable securities laws. The Company may, upon advice of
counsel to the Company, place legends on stock certificates issued under the
Plan as such counsel deems necessary or appropriate in order to comply with
applicable securities laws, including, but not limited to, legends restricting
the transfer of the Common Stock.
(f) Withholding
Obligations. To
the extent provided by the terms of a Stock Award Agreement, the Company may in
its sole discretion, satisfy any federal, state or local tax withholding
obligation relating to a Stock Award by any of the following means (in addition
to the Company’s right to withhold from any compensation paid to the Participant
by the Company) or by a combination of such means: (i) causing the
Participant to tender a cash payment; (ii) withholding shares of Common Stock
from the shares of Common Stock issued or otherwise issuable to the Participant
in connection with the Stock Award; or (iii) by such other method as may be set
forth in the Stock Award Agreement.
11. Adjustments
upon Changes in Stock.
(a) Capitalization
Adjustments. If
any change is made in, or other event occurs with respect to, the Common Stock
subject to the Plan or subject to any Stock Award without the receipt of
consideration by the Company (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company (each a “Capitalization
Adjustment”), the Plan will
be appropriately adjusted in the class(es) and maximum number of securities
subject to the Plan pursuant to Sections 4(a) and 4(b) and the maximum number of
securities subject to award to any person pursuant to Section 5(c), and the
outstanding Stock Awards will be appropriately adjusted in the class(es) and
number of securities and price per share of Common Stock subject to such
outstanding Stock Awards. The Board shall make such adjustments, and
its determination shall be final, binding and
conclusive. (Notwithstanding the foregoing, the conversion of any
convertible securities of the Company shall not be treated as a transaction
“without receipt of consideration” by the Company.)
(b) Dissolution or
Liquidation. In
the event of a dissolution or liquidation of the Company, then all outstanding
Stock Awards shall terminate immediately prior to the completion of such
dissolution or liquidation.
(c) Corporate
Transaction. In
the event of a Corporate Transaction, any surviving corporation or acquiring
corporation may assume or continue any or all Stock Awards outstanding under the
Plan or may substitute similar stock awards for Stock Awards outstanding under
the Plan (including but not limited to, awards to acquire the same consideration
paid to the stockholders of the Company, as the case may be, pursuant to the
Corporate Transaction), and any reacquisition or repurchase rights held by the
Company in respect of Common Stock issued pursuant to Stock Awards may be
assigned by the Company to the successor of the Company (or the successor’s
parent company), if any, in connection with such Corporate
Transaction. In the event that any surviving corporation or acquiring
corporation does not assume or continue all such outstanding Stock Awards or
substitute similar stock awards for all such outstanding Stock Awards, then with
respect to Stock Awards that have been not assumed, continued or substituted and
that are held by Participants whose Continuous Service has not terminated prior
to the effective time of the Corporate Transaction, the vesting of such Stock
Awards (and, if applicable, the time at which such Stock Awards may be
exercised) shall (contingent upon the effectiveness of the Corporate
Transaction) be accelerated in full to a date prior to the effective time of
such Corporate Transaction as the Board shall determine (or, if the Board shall
not determine such a date, to the date that is five (5) days prior to the
effective time of the Corporate Transaction), and such Stock Awards shall
terminate if not exercised (if applicable) at or prior to such effective time,
and any reacquisition or repurchase rights held by the Company with respect to
such Stock Awards shall (contingent upon the effectiveness of the Corporate
Transaction) lapse. With respect to any other Stock Awards
outstanding under the Plan that have not been assumed, continued or substituted,
the vesting of such Stock Awards (and, if applicable, the time at which such
Stock Award may be exercised) shall not be accelerated, unless otherwise
provided in a written agreement between the Company or any Affiliate and the
holder of such Stock Award, and such Stock Awards shall terminate if not
exercised (if applicable) prior to the effective time of the Corporate
Transaction.
(d) Change in
Control. A Stock
Award may be subject to additional acceleration of vesting and exercisability
upon or after a Change in Control as may be provided in the Stock Award
Agreement for such Stock Award or as may be provided in any other written
agreement between the Company or any Affiliate and the Participant, but in the
absence of such provision, no such acceleration shall occur.
12. Amendment of
the Plan and Stock Awards.
(a) Amendment of
Plan. Subject to
the limitations, if any, of applicable law, the Board at any time, and from time
to time, may amend the Plan. However, except as provided in Section
11(a) relating to Capitalization Adjustments, no amendment shall be effective
unless approved by the stockholders of the Company to the extent stockholder
approval is necessary to satisfy applicable law.
(b) Stockholder
Approval. The
Board, in its sole discretion, may submit any other amendment to the Plan for
stockholder approval, including, but not limited to, amendments to the Plan
intended to satisfy the requirements of Section 162(m) of the Code and the
regulations thereunder regarding the exclusion of performance-based compensation
from the limit on corporate deductibility of compensation paid to Covered
Employees.
(c) Contemplated
Amendments. It
is expressly contemplated that the Board may amend the Plan in any respect the
Board deems necessary or advisable to (i) to bring the Plan and/or Stock Awards
granted under it into compliance with the provisions of any law, rule or
regulation, including but not limited to any state “blue sky” law, rule or
regulation, and/or (ii) provide eligible Employees with the maximum benefits
provided or to be provided under the provisions of the Code and the regulations
promulgated thereunder relating to Incentive Stock Options and/or to bring the
Plan and/or Incentive Stock Options granted under it into compliance
therewith.
(d) No Impairment of
Rights. Rights
under any Stock Award granted before amendment of the Plan shall not be impaired
by any amendment of the Plan unless (i) the Company requests the consent of the
Participant and (ii) the Participant consents in writing.
(e) Amendment of Stock
Awards. The
Board at any time, and from time to time, may amend the terms of any one or more
Stock Awards, including, but not limited to, amendments to provide terms more
favorable than previously provided in the agreement evidencing a Stock Award,
subject to any specified limits in the Plan that are not subject to Board
discretion; provided,
however, that the rights under any Stock Award shall not be impaired by
any such amendment unless (i) the Company requests the consent of the
Participant and (ii) the Participant consents in writing.
13. Termination or
Suspension of the Plan.
(a) Plan
Term. The Board
may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate on the day before the tenth (10th)
anniversary of the date the Plan is adopted by the Board or approved by the
stockholders of the Company, whichever is earlier. No Stock Awards
may be granted under the Plan while the Plan is suspended or after it is
terminated.
(b) No Impairment of
Rights. Suspension or termination of
the Plan shall not impair rights and obligations under any Stock Award granted
while the Plan is in effect except with the written consent of the
Participant.
14. Effective Date
of Plan.
The Plan shall become effective on the
Effective Date.
15. Choice of
Law.
The law of the State of California shall
govern all questions concerning the construction, validity and interpretation of
this Plan, without regard to such state’s conflict of laws
rules.