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8-K - CURRENT REPORT - GigWorld Inc. | http_8k.htm |
Exhibit 10.1
HOTAPP BLOCKCHAIN INC.
2018 EQUITY INCENTIVE PLAN
1. DEFINITIONS.
Unless
otherwise specified or unless the context otherwise requires, the
following terms, as used in this HotApp Blockchain Inc. 2018 Equity
Incentive Plan, have the following meanings:
Administrator means
the Board of Directors, unless it has delegated power to act on its
behalf to the Committee, in which case the Administrator means the
Committee.
Affiliate means a corporation which, for purposes of
Section 424 of the Code, is a parent or subsidiary of the
Company, direct or indirect.
Agreement means an agreement between the Company and a
Participant delivered pursuant to the Plan, in such form as the
Administrator shall approve.
Board of
Directors means the Board
of Directors of the Company.
Code means the United States Internal Revenue
Code of 1986, as amended.
Committee means the committee of the Board of
Directors to which the Board of Directors has delegated power to
act under or pursuant to the provisions of the
Plan.
Common
Stock means shares of the
Company’s common stock, $0.0001 par value per
share.
Company means HotApp Blockchain Inc. a Delaware
corporation.
Disability or Disabled means permanent and total disability as
defined in Section 22(e)(3) of the Code.
Employee means any employee of the Company or of an
Affiliate (including, without limitation, an employee who is also
serving as an officer or director of the Company or of an
Affiliate), designated by the Administrator to be eligible to be
granted one or more Stock Rights under the
Plan.
Fair Market
Value of a Share of Common
Stock means:
(1)
If the Common Stock is listed on a national securities exchange or
traded in the over-the-counter market and sales prices are
regularly reported for the Common Stock, the average of the closing
or last price of the Common Stock on the composite tape or other
comparable reporting system for the five (5) trading days,
consisting of (i) the two (2) trading days immediately
following the applicable date, (ii) the trading day that is
the applicable date, and (iii) the two (2) trading days
immediately preceding the applicable date;
(2)
If the Common Stock is not traded on a national securities exchange
but is traded on the over-the-counter market, if sales prices are
not regularly reported for the Common Stock for the trading day
referred to in clause (1), and if bid and asked prices for the
Common Stock are regularly reported, the mean between the bid and
the asked price for the Common Stock at the close of trading in the
over-the-counter market for the trading day on which Common Stock
was traded immediately preceding the applicable date;
and
(3)
If the Common Stock is neither listed on a national securities
exchange nor traded in the over-the-counter market, such value as
the Administrator, in good faith, shall determine.
ISO means an option meant to qualify as an
incentive stock option under Section 422 of the
Code.
Non-Qualified
Option means an option
which is not intended to qualify as an ISO.
Option means an ISO or Non-Qualified Option granted
under the Plan.
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Participant means an Employee, director or consultant of
the Company or an Affiliate to whom one or more Stock Rights are
granted under the Plan. As used herein, “Participant”
shall include “Participant’s Survivors” where the
context requires.
Plan means this HotApp Blockchain Inc. 2018
Equity Incentive Plan.
Shares means shares of the Common Stock as to which
Stock Rights have been or may be granted under the Plan or any
shares of capital stock into which the Shares are changed or for
which they are exchanged within the provisions of Paragraph 3 of
the Plan. The Shares issued under the Plan may be authorized and
unissued shares or shares held by the Company in its treasury, or
both.
Stock-Based
Award means a grant by the
Company under the Plan of an equity award or an equity based award
which is not an Option or a Stock Grant.
Stock Grant means a grant by the Company of Shares under
the Plan.
Stock Right means a right to Shares or the value of
Shares of the Company granted pursuant to the Plan—an ISO, a
Non-Qualified Option, a Stock Grant or a Stock-Based
Award.
Survivor means a deceased Participant’s legal
representatives and/or any person or persons who acquired the
Participant’s rights to a Stock Right by will or by the laws
of descent and distribution.
2. PURPOSES OF THE
PLAN.
The
Plan is intended to encourage ownership of Shares by Employees and
directors of and certain consultants to the Company in order to
attract and retain such people, to induce them to work for the
benefit of the Company or of an Affiliate and to provide additional
incentive for them to promote the success of the Company or of an
Affiliate. The Plan provides for the granting of ISOs,
Non-Qualified Options, Stock Grants and Stock-Based
Awards.
3. SHARES SUBJECT TO THE
PLAN.
(a)
The
number of Shares which may be issued from time to time pursuant to
this Plan shall be 50,000,000, or the equivalent of such number of
Shares after the Administrator, in its sole discretion, has
interpreted the effect of any stock split, stock dividend,
combination, recapitalization or similar transaction in accordance
with Paragraph 24 of the Plan.
(b)
If an
Option ceases to be “outstanding,” in whole or in part
(other than by exercise), or if the Company shall reacquire (at not
more than its original issuance price) any Shares issued pursuant
to a Stock Grant or Stock-Based Award, or if any Stock Right
expires or is forfeited, cancelled, or otherwise terminated or
results in any Shares not being issued, the unissued Shares which
were subject to such Stock Right shall again be available for
issuance from time to time pursuant to this Plan. Notwithstanding
the foregoing, if a Stock Right is exercised in whole or in part,
by tender of Shares or if the Company’s tax withholding
obligation is satisfied by withholding Shares, the number of Shares
needed to have been issued under the Plan for purposes of the
limitation set forth in Paragraph 3(a) above shall be the number of
Shares that were subject to the Stock Right or portion thereof, and
not the net number of Shares actually issued.
4. ADMINISTRATION OF THE
PLAN.
The
Administrator of the Plan will be the Board of Directors, except to
the extent the Board of Directors delegates its authority to the
Committee, in which case the Committee shall be the Administrator.
Subject to the provisions of the Plan, the Administrator is
authorized to:
a.
Interpret
the provisions of the Plan and all Stock Rights and to make all
rules and determinations which it deems necessary or advisable for
the administration of the Plan;
b.
Determine
which Employees, directors and consultants shall be granted Stock
Rights;
c.
Determine
the number of Shares for which a Stock Right or Stock Rights shall
be granted, provided, however, that in no event shall Stock Rights
with respect to more than 1,000,000 Shares be granted to any
Participant in any fiscal year;
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d.
Specify
the terms and conditions upon which a Stock Right or Stock Rights
may be granted;
e.
Make
changes to any outstanding Stock Right, including, without
limitation, to reduce or increase the exercise price or purchase
price, accelerate the vesting schedule or extend the expiration
date, provided that no such change shall impair the rights of a
Participant under any grant previously made without such
Participant’s consent;
f.
Buy out
for a payment in cash or Shares, a Stock Right previously granted
and/or cancel any such Stock Right and grant in substitution
therefor other Stock Rights, covering the same or a different
number of Shares and having an exercise price or purchase price per
share which may be lower or higher than the exercise price or
purchase price of the cancelled Stock Right, based on such terms
and conditions as the Administrator shall establish and the
Participant shall accept; and
g.
Adopt
any sub-plans applicable to residents of any specified jurisdiction
as it deems necessary or appropriate in order to comply with or
take advantage of any tax or other laws applicable to the Company
or to Plan Participants or to otherwise facilitate the
administration of the Plan, which sub-plans may include additional
restrictions or conditions applicable to Stock Rights or Shares
issuable pursuant to a Stock Right.
Provided,
however, that all such interpretations, rules, determinations,
terms and conditions shall be made and prescribed in the context of
preserving the tax status under Section 422 of the Code of
those Options which are designated as ISOs. Subject to the
foregoing, the interpretation and construction by the Administrator
of any provisions of the Plan or of any Stock Right granted under
it shall be final, unless otherwise determined by the Board of
Directors, if the Administrator is the Committee. In addition, if
the Administrator is the Committee, the Board of Directors may take
any action under the Plan that would otherwise be the
responsibility of the Committee.
To
the extent permitted under applicable law, the Board of Directors
or the Committee may allocate all or any portion of its
responsibilities and powers to any one or more of its members and
may delegate all or any portion of its responsibilities and powers
to any other person selected by it. The Board of Directors or the
Committee may revoke any such allocation or delegation at any
time.
The
Committee and the Board, and each member thereof, shall be entitled
to, in good faith, rely or act upon any report or other information
furnished to him or her by any officer or Employee, the
Company’s independent auditors, Consultants or any other
agents assisting in the administration of the Plan. Members of the
Committee and the Board, and any officer or Employee acting at the
direction or on behalf of the Committee or the Board, shall not be
personally liable for any action or determination taken or made in
good faith with respect to the Plan, and shall, to the extent
permitted by law, be fully indemnified and protected by the Company
with respect to any such action or determination.
5. ELIGIBILITY FOR
PARTICIPATION.
The
Administrator will, in its sole discretion, name the Participants
in the Plan, provided, however, that each Participant must be an
Employee, director or consultant of the Company or of an Affiliate
at the time a Stock Right is granted. Notwithstanding the
foregoing, the Administrator may authorize the grant of a Stock
Right to a person not then an Employee, director or consultant of
the Company or of an Affiliate; provided, however, that the actual
grant of such Stock Right shall be conditioned upon such person
becoming eligible to become a Participant at or prior to the time
of the execution of the Agreement evidencing such Stock Right. ISOs
may be granted only to Employees. Non-Qualified Options, Stock
Grants and Stock-Based Awards may be granted to any Employee,
director or consultant of the Company or an Affiliate. The granting
of any Stock Right to any individual shall neither entitle that
individual to, nor disqualify him or her from, participation in any
other grant of Stock Rights.
6. TERMS AND CONDITIONS OF
OPTIONS.
Each
Option shall be set forth in writing in an Option Agreement, duly
executed by the Company and, to the extent required by law or
requested by the Company, by the Participant. The Administrator may
provide that Options be granted subject to such terms and
conditions, consistent with the terms and conditions specifically
required under this Plan, as the Administrator may deem appropriate
including, without limitation, subsequent approval by the
shareholders of the Company of this Plan or any amendments thereto.
The Option Agreements shall be subject to at least the following
terms and conditions:
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A. Non-Qualified
Options: Each Option intended
to be a Non-Qualified Option shall be subject to the terms and
conditions which the Administrator determines to be appropriate and
in the best interest of the Company, subject to the following
minimum standards for any such Non-Qualified
Option:
a.
Option Price : Each Option Agreement shall state the option
price (per share) of the Shares covered by each Option, which
option price shall be determined by the Administrator but shall not
be less than the Fair Market Value per share of Common
Stock.
b.
Number of Shares : Each Option Agreement shall state the
number of Shares to which it pertains.
c.
Option Periods : Each Option Agreement shall state the date
or dates on which it first is exercisable and the date after which
it may no longer be exercised, and may provide that the Option
rights accrue or become exercisable in installments over a period
of months or years, or upon the occurrence of certain conditions or
the attainment of stated goals or events.
d.
Option Conditions : Exercise of any Option may be
conditioned upon the Participant’s execution of a Share
purchase agreement in form satisfactory to the Administrator
providing for certain protections for the Company and its other
shareholders, including requirements that:
i.
The
Participant’s or the Participant’s Survivors’
right to sell or transfer the Shares may be restricted;
and
ii.
The
Participant or the Participant’s Survivors may be required to
execute letters of investment intent and must also acknowledge that
the Shares will bear legends noting any applicable
restrictions.
B. ISOs: Each Option intended to be an ISO shall be
issued only to an Employee and be subject to the following terms
and conditions, with such additional restrictions or changes as the
Administrator determines are appropriate but not in conflict with
Section 422 of the Code and relevant regulations and rulings
of the Internal Revenue Service:
a.
Minimum standards : The ISO shall meet the minimum standards
required of Non-Qualified Options, as described in Paragraph 6(A)
above, except clauses (a) thereunder.
b.
Option Price : Immediately before the ISO is granted, if the
Participant owns, directly or by reason of the applicable
attribution rules in Section 424(d) of the Code:
i.
10%
or less of the total
combined voting power of all classes of stock of the Company or an
Affiliate, the Option price per share of the Shares covered by each
ISO shall not be less than 100% of the Fair Market Value per share
of the Shares on the date of the grant of the Option;
or
ii.
More
than 10% of the total combined voting power of all classes of stock
of the Company or an Affiliate, the Option price per share of the
Shares covered by each ISO shall not be less than 110% of the Fair
Market Value on the date of grant.
c.
Term of Option : For Participants who own:
i.
10%
or less of the total
combined voting power of all classes of stock of the Company or an
Affiliate, each ISO shall terminate not more than ten years from
the date of the grant or at such earlier time as the Option
Agreement may provide; or
ii.
More
than 10% of the total combined voting power of all classes of stock
of the Company or an Affiliate, each ISO shall terminate not more
than five years from the date of the grant or at such earlier time
as the Option Agreement may provide.
d.
Limitation on Yearly Exercise : The Option Agreements shall
restrict the amount of ISOs which may become exercisable in any
calendar year (under this or any other ISO plan of the Company or
an Affiliate) so that the aggregate Fair Market Value (determined
at the time each ISO is granted) of the stock with respect to which
ISOs are exercisable for the first time by the Participant in any
calendar year does not exceed $100,000.
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7. TERMS AND CONDITIONS OF
STOCK GRANTS.
Each
offer of a Stock Grant to a Participant shall state the date prior
to which the Stock Grant must be accepted by the Participant, and
the principal terms of each Stock Grant shall be set forth in an
Agreement, duly executed by the Company and, to the extent required
by law or requested by the Company, by the Participant. The
Agreement shall be in a form approved by the Administrator and
shall contain terms and conditions which the Administrator
determines to be appropriate and in the best interest of the
Company, subject to the following minimum standards:
(a)
Each Agreement shall state the purchase price (per share), if any,
of the Shares covered by each Stock Grant, which purchase price
shall be determined by the Administrator but shall not be less than
the minimum consideration required by the Delaware General
Corporation Law on the date of the grant of the Stock
Grant;
(b)
Each Agreement shall state the number of Shares to which the Stock
Grant pertains; and
(c)
Each Agreement shall include the terms of any right of the Company
to restrict or reacquire the Shares subject to the Stock Grant,
including the time and events upon which such rights shall accrue
and the purchase price therefor, if any.
8. TERMS AND CONDITIONS OF
OTHER STOCK-BASED AWARDS.
The
Board shall have the right to grant other Stock-Based Awards based
upon the Common Stock having such terms and conditions as the Board
may determine, including, without limitation, the grant of Shares
based upon certain conditions, the grant of securities convertible
into Shares and the grant of stock appreciation rights, phantom
stock awards or stock units. The principal terms of each
Stock-Based Award shall be set forth in an Agreement, duly executed
by the Company and, to the extent required by law or requested by
the Company, by the Participant. The Agreement shall be in a form
approved by the Administrator and shall contain terms and
conditions which the Administrator determines to be appropriate and
in the best interest of the Company.
9. EXERCISE OF OPTIONS AND
ISSUE OF SHARES.
An
Option (or any part or installment thereof) shall be exercised by
giving written notice to the Company or its designee, together with
provision for payment of the full purchase price in accordance with
this Paragraph for the Shares as to which the Option is being
exercised, and upon compliance with any other condition(s) set
forth in the Option Agreement. Such notice shall be signed by the
person exercising the Option, shall state the number of Shares with
respect to which the Option is being exercised and shall contain
any representation required by the Plan or the Option Agreement.
Payment of the purchase price for the Shares as to which such
Option is being exercised shall be made (a) in United States
dollars in cash or by check, or (b) at the discretion of the
Administrator, through delivery of shares of Common Stock having a
Fair Market Value equal as of the date of the exercise to the cash
exercise price of the Option and held for at least six months, or
(c) at the discretion of the Administrator, by having the
Company retain from the shares otherwise issuable upon exercise of
the Option, a number of shares having a Fair Market Value equal as
of the date of exercise to the exercise price of the Option, or
(d) at the discretion of the Administrator, in accordance with
a cashless exercise program established with a securities brokerage
firm, and approved by the Administrator, or (e) at the
discretion of the Administrator, by any combination of (a), (b),
(c) and (d) above or (f) at the discretion of the
Administrator, payment of such other lawful consideration as the
Administrator may determine. Notwithstanding the foregoing, the
Administrator shall accept only such payment on exercise of an ISO
as is permitted by Section 422 of the Code.
The
Company shall then reasonably promptly deliver the Shares as to
which such Option was exercised to the Participant (or to the
Participant’s Survivors, as the case may be). In determining
what constitutes “reasonably promptly,” it is expressly
understood that the issuance and delivery of the Shares may be
delayed by the Company in order to comply with any law or
regulation (including, without limitation, state securities or
”blue sky” laws) which requires the Company to take any
action with respect to the Shares prior to their issuance. The
Shares shall, upon delivery, be fully paid, non-assessable
Shares.
The
Administrator shall have the right to accelerate the date of
exercise of any installment of any Option; provided that the
Administrator shall not accelerate the exercise date of any
installment of any Option granted to an Employee as an ISO (and not
previously converted into a Non-Qualified Option pursuant to
Paragraph 27) if such acceleration would violate the annual vesting
limitation contained in Section 422(d) of the Code, as
described in Paragraph 6.B.d.
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The
Administrator may, in its discretion, amend any term or condition
of an outstanding Option provided (i) such term or condition
as amended is permitted by the Plan, (ii) any such amendment
shall be made only with the consent of the Participant to whom the
Option was granted, or in the event of the death of the
Participant, the Participant’s Survivors, if the amendment is
adverse to the Participant, and (iii) any such amendment of
any Option shall be made only after the Administrator determines
whether such amendment would constitute a
“modification” of any Option which is an ISO (as that
term is defined in Section 424(h) of the Code) or would cause
any adverse tax consequences for the holder of such Option
including, but not limited to, pursuant to Section 409A of the
Code.
10. ACCEPTANCE OF STOCK
GRANTS AND STOCK-BASED AWARDS AND ISSUE OF
SHARES.
A
Stock Grant or Stock-Based Award (or any part or installment
thereof) shall be accepted by executing the applicable Agreement
and delivering it to the Company or its designee, together with
provision for payment of the full purchase price, if any, in
accordance with this Paragraph for the Shares as to which such
Stock Grant or Stock-Based Award is being accepted, and upon
compliance with any other conditions set forth in the applicable
Agreement. Payment of the purchase price for the Shares as to which
such Stock Grant or Stock-Based Award is being accepted shall be
made (a) in United States dollars in cash or by check, or
(b) at the discretion of the Administrator, through delivery
of shares of Common Stock held for at least six months and having a
Fair Market Value equal as of the date of acceptance of the Stock
Grant or Stock Based-Award to the purchase price of the Stock Grant
or Stock-Based Award, or (c) at the discretion of the
Administrator, by delivery of the grantee’s personal recourse
note bearing interest payable not less than annually at no less
than 100% of the applicable Federal rate, as defined in
Section 1274(d) of the Code, or (d) at the discretion of
the Administrator, by any combination of (a), (b) and
(c) above; or (e) at the discretion of the Administrator,
payment of such other lawful consideration as the Administrator may
determine.
The
Company shall then, if required by the applicable Agreement,
reasonably promptly deliver the Shares as to which such Stock Grant
or Stock-Based Award was accepted to the Participant (or to the
Participant’s Survivors, as the case may be), subject to any
escrow provision set forth in the applicable Agreement. In
determining what constitutes “reasonably promptly,” it
is expressly understood that the issuance and delivery of the
Shares may be delayed by the Company in order to comply with any
law or regulation (including, without limitation, state securities
or “blue sky” laws) which requires the Company to take
any action with respect to the Shares prior to their
issuance.
The
Administrator may, in its discretion, amend any term or condition
of an outstanding Stock Grant, Stock-Based Award or applicable
Agreement provided (i) such term or condition as amended is
permitted by the Plan, and (ii) any such amendment shall be
made only with the consent of the Participant to whom the Stock
Grant or Stock-Based Award was made, if the amendment is adverse to
the Participant.
11. RIGHTS AS A
SHAREHOLDER.
No
Participant to whom a Stock Right has been granted shall have
rights as a shareholder with respect to any Shares covered by such
Stock Right, except after due exercise of the Option or acceptance
of the Stock Grant or as set forth in any Agreement, and tender of
the full purchase price, if any, for the Shares being purchased
pursuant to such exercise or acceptance and registration of the
Shares in the Company’s share register in the name of the
Participant.
12. ASSIGNABILITY AND
TRANSFERABILITY OF STOCK RIGHTS.
By
its terms, a Stock Right granted to a Participant shall not be
transferable by the Participant other than (i) by will or by
the laws of descent and distribution, or (ii) as approved by
the Administrator in its discretion and set forth in the applicable
Agreement. Notwithstanding the foregoing, an ISO transferred except
in compliance with clause (i) above shall no longer qualify as
an ISO. The designation of a beneficiary of a Stock Right by a
Participant, with the prior approval of the Administrator and in
such form as the Administrator shall prescribe, shall not be deemed
a transfer prohibited by this Paragraph. Except as provided above,
a Stock Right shall only be exercisable or may only be accepted,
during the Participant’s lifetime, by such Participant (or by
his or her legal representative) and shall not be assigned, pledged
or hypothecated in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or
similar process. Any attempted transfer, assignment, pledge,
hypothecation or other disposition of any Stock Right or of any
rights granted thereunder contrary to the provisions of this Plan,
or the levy of any attachment or similar process upon a Stock
Right, shall be null and void.
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13. EFFECT ON OPTIONS OF
TERMINATION OF SERVICE OTHER THAN “FOR CAUSE” OR DEATH
OR DISABILITY.
Except
as otherwise provided in a Participant’s Option Agreement, in
the event of a termination of service (whether as an employee,
director or consultant) with the Company or an Affiliate before the
Participant has exercised an Option, the following rules
apply:
a.
A
Participant who ceases to be an employee, director or consultant of
the Company or of an Affiliate (for any reason other than
termination “for cause”, Disability, or death for which
events there are special rules in Paragraphs 14, 15, and 16,
respectively), may exercise any Option granted to him or her to the
extent that the Option is exercisable on the date of such
termination of service, but only within such term as the
Administrator has designated in a Participant’s Option
Agreement.
b.
Except
as provided in Subparagraph (c) below, or Paragraph 15 or 16, in no
event may an Option intended to be an ISO, be exercised later than
three months after the Participant’s termination of
employment.
c.
The
provisions of this Paragraph, and not the provisions of Paragraph
15 or 16, shall apply to a Participant who subsequently becomes
Disabled or dies after the termination of employment, director
status or consultancy; provided, however, in the case of a
Participant’s Disability or death within three months after
the termination of employment, director status or consultancy, the
Participant or the Participant’s Survivors may exercise the
Option within one year after the date of the Participant’s
termination of service, but in no event after the date of
expiration of the term of the Option.
d.
Notwithstanding
anything herein to the contrary, if subsequent to a
Participant’s termination of employment, termination of
director status or termination of consultancy, but prior to the
exercise of an Option, the Board of Directors determines that,
either prior or subsequent to the Participant’s termination,
the Participant engaged in conduct which would constitute
“cause”, then such Participant shall forthwith cease to
have any right to exercise any Option.
e.
A
Participant to whom an Option has been granted under the Plan who
is absent from the Company or an Affiliate because of temporary
disability (any disability other than a Disability as defined in
Paragraph 1 hereof), or who is on leave of absence for any purpose,
shall not, during the period of any such absence, be deemed, by
virtue of such absence alone, to have terminated such
Participant’s employment, director status or consultancy with
the Company or with an Affiliate, except as the Administrator may
otherwise expressly provide.
f.
Except
as required by law or as set forth in a Participant’s Option
Agreement, Options granted under the Plan shall not be affected by
any change of a Participant’s status within or among the
Company and any Affiliates, so long as the Participant continues to
be an employee, director or consultant of the Company or any
Affiliate.
14. EFFECT ON OPTIONS OF
TERMINATION OF SERVICE “FOR CAUSE”.
Except
as otherwise provided in a Participant’s Option Agreement,
the following rules apply if the Participant’s service
(whether as an employee, director or consultant) with the Company
or an Affiliate is terminated “for cause” prior to the
time that all his or her outstanding Options have been
exercised:
a.
All
outstanding and unexercised Options as of the time the Participant
is notified his or her service is terminated “for
cause” will immediately be forfeited.
b.
For
purposes of this Plan, “cause” shall include (and is
not limited to) dishonesty with respect to the Company or any
Affiliate, insubordination, substantial malfeasance or non-feasance
of duty, unauthorized disclosure of confidential information,
breach by the Participant of any provision of any employment,
consulting, advisory, nondisclosure, non-competition or similar
agreement between the Participant and the Company, and conduct
substantially prejudicial to the business of the Company or any
Affiliate. The determination of the Administrator as to the
existence of “cause” will be conclusive on the
Participant and the Company.
c.
“Cause”
is not limited to events which have occurred prior to a
Participant’s termination of service, nor is it necessary
that the Administrator’s finding of “cause” occur
prior to termination. If the Administrator determines, subsequent
to a Participant’s termination of service but prior to the
exercise of an Option, that either prior or subsequent to the
Participant’s termination the Participant engaged in onduct
which would constitute “cause”, then the right to
exercise any Option is forfeited.
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d.
Any
provision in an agreement between the Participant and the Company
or an Affiliate, which contains a conflicting definition of
“cause” for termination and which is in effect at the
time of such termination, shall supersede the definition in this
Plan with respect to that Participant.
15. EFFECT ON OPTIONS OF
TERMINATION OF SERVICE FOR DISABILITY.
Except
as otherwise provided in a Participant’s Option
Agreement:
a.
A
Participant who ceases to be an employee, director or consultant of
the Company or of an Affiliate by reason of Disability may exercise
any Option granted to such Participant:
(i)
To the
extent that the Option has become exercisable but has not been
exercised on the date of Disability; and
(ii)
In the
event rights to exercise the Option accrue periodically, to the
extent of a pro rata portion through the date of Disability of any
additional vesting rights that would have accrued on the next
vesting date had the Participant not become Disabled. The proration
shall be based upon the number of days accrued in the current
vesting period prior to the date of Disability.
b.
A
Disabled Participant may exercise such rights only within the
period ending one year after the date of the Participant’s
termination of employment, directorship or consultancy, as the case
may be, notwithstanding that the Participant might have been able
to exercise the Option as to some or all of the Shares on a later
date if the Participant had not become Disabled and had continued
to be an employee, director or consultant or, if earlier, within
the originally prescribed term of the Option.
c.
The
Administrator shall make the determination both of whether
Disability has occurred and the date of its occurrence (unless a
procedure for such determination is set forth in another agreement
between the Company and such Participant, in which case such
procedure shall be used for such determination). If requested, the
Participant shall be examined by a physician selected or approved
by the Administrator, the cost of which examination shall be paid
for by the Company.
16. EFFECT ON OPTIONS OF
DEATH WHILE AN EMPLOYEE, DIRECTOR OR
CONSULTANT.
Except
as otherwise provided in a Participant’s Option
Agreement:
a.
In the
event of the death of a Participant while the Participant is an
employee, director or consultant of the Company or of an Affiliate,
such Option may be exercised by the Participant’s
Survivors:
(i)
To the
extent that the Option has become exercisable but has not been
exercised on the date of death; and
(ii)
In the
event rights to exercise the Option accrue periodically, to the
extent of a pro rata portion through the date of death of any
additional vesting rights that would have accrued on the next
vesting date had the Participant not died. The proration shall be
based upon the number of days accrued in the current vesting period
prior to the Participant’s date of death.
b.
If the
Participant’s Survivors wish to exercise the Option, they
must take all necessary steps to exercise the Option within one
year after the date of death of such Participant, notwithstanding
that the decedent might have been able to exercise the Option as to
some or all of the Shares on a later date if he or she had not died
and had continued to be an employee, director or consultant or, if
earlier, within the originally prescribed term of the
Option.
17. EFFECT OF TERMINATION OF
SERVICE ON UNACCEPTED STOCK GRANTS.
In
the event of a termination of service (whether as an employee,
director or consultant) with the Company or an Affiliate for any
reason before the Participant has accepted a Stock Grant, such
offer shall terminate.
For
purposes of this Paragraph 17 and Paragraph 18 below, a Participant
to whom a Stock Grant has been offered and accepted under the Plan
who is absent from work with the Company or with an Affiliate
because of temporary disability (any disability other than a
Disability as defined in Paragraph 1 hereof), or who is on leave of
absence for any purpose, shall not, during the period of any such
absence, be deemed, by virtue of such absence alone, to have
terminated such Participant’s employment, director status or
consultancy with the Company or with an Affiliate, except as the
Administrator may otherwise expressly provide.
8
In
addition, for purposes of this Paragraph 17 and Paragraph 18 below,
any change of employment or other service within or among the
Company and any Affiliates shall not be treated as a termination of
employment, director status or consultancy so long as the
Participant continues to be an employee, director or consultant of
the Company or any Affiliate.
18. EFFECT ON STOCK GRANTS
OF TERMINATION OF SERVICE OTHER THAN “FOR CAUSE” OR
DEATH OR DISABILITY.
Except
as otherwise provided in a Participant’s Stock Grant
Agreement, in the event of a termination of service (whether as an
employee, director or consultant), other than termination
“for cause,” Disability, or death for which events
there are special rules in Paragraphs 19, 20, and 21, respectively,
before all Company rights of repurchase shall have lapsed, then the
Company shall have the right to repurchase that number of Shares
subject to a Stock Grant as to which the Company’s repurchase
rights have not lapsed.
19. EFFECT ON STOCK GRANTS
OF TERMINATION OF SERVICE “FOR
CAUSE”.
Except
as otherwise provided in a Participant’s Stock Grant
Agreement, the following rules apply if the Participant’s
service (whether as an employee, director or consultant) with the
Company or an Affiliate is terminated “for
cause”:
a.
All
Shares subject to any Stock Grant shall be immediately subject to
repurchase by the Company at the purchase price, if any,
thereof.
b.
For
purposes of this Plan, “cause” shall include (and is
not limited to) dishonesty with respect to the employer,
insubordination, substantial malfeasance or non-feasance of duty,
unauthorized disclosure of confidential information, breach by the
Participant of any provision of any employment, consulting,
advisory, nondisclosure, non-competition or similar agreement
between the Participant and the Company, and conduct substantially
prejudicial to the business of the Company or any Affiliate. The
determination of the Administrator as to the existence of
“cause” will be conclusive on the Participant and the
Company.
c.
“Cause”
is not limited to events which have occurred prior to a
Participant’s termination of service, nor is it necessary
that the Administrator’s finding of “cause” occur
prior to termination. If the Administrator determines, subsequent
to a Participant’s termination of service, that either prior
or subsequent to the Participant’s termination the
Participant engaged in conduct which would constitute
“cause,” then the Company’s right to repurchase
all of such Participant’s Shares shall apply.
d.
Any
provision in an agreement between the Participant and the Company
or an Affiliate, which contains a conflicting definition of
“cause” for termination and which is in effect at the
time of such termination, shall supersede the definition in this
Plan with respect to that Participant.
20. EFFECT ON STOCK GRANTS
OF TERMINATION OF SERVICE FOR DISABILITY.
Except
as otherwise provided in a Participant’s Stock Grant
Agreement, the following rules apply if a Participant ceases to be
an employee, director or consultant of the Company or of an
Affiliate by reason of Disability: to the extent the
Company’s rights of repurchase have not lapsed on the date of
Disability, they shall be exercisable; provided, however, that in
the event such rights of repurchase lapse periodically, such rights
shall lapse to the extent of a pro rata portion of the Shares
subject to such Stock Grant through the date of Disability as would
have lapsed had the Participant not become Disabled. The proration
shall be based upon the number of days accrued prior to the date of
Disability.
The
Administrator shall make the determination both of whether
Disability has occurred and the date of its occurrence (unless a
procedure for such determination is set forth in another agreement
between the Company and such Participant, in which case such
procedure shall be used for such determination). If requested, the
Participant shall be examined by a physician selected or approved
by the Administrator, the cost of which examination shall be paid
for by the Company.
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21. EFFECT ON STOCK GRANTS
OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR
CONSULTANT.
Except
as otherwise provided in a Participant’s Stock Grant
Agreement, the following rules apply in the event of the death of a
Participant while the Participant is an employee, director or
consultant of the Company or of an Affiliate: to the extent the
Company’s rights of repurchase have not lapsed on the date of
death, they shall be exercisable; provided, however, that in the
event such rights of repurchase lapse periodically, such rights
shall lapse to the extent of a pro rata portion of the Shares
subject to such Stock Grant through the date of death as would have
lapsed had the Participant not died. The proration shall be based
upon the number of days accrued prior to the Participant’s
death.
22. PURCHASE FOR
INVESTMENT.
Unless
the offering and sale of the Shares to be issued upon the
particular exercise or acceptance of a Stock Right shall have been
effectively registered under the Securities Act of 1933, as now in
force or hereafter amended (the “1933 Act”), the
Company shall be under no obligation to issue the Shares covered by
such exercise unless and until the following conditions have been
fulfilled:
a.
The
person(s) who exercise(s) or accept(s) such Stock Right shall
warrant to the Company, prior to the receipt of such Shares, that
such person(s) are acquiring such Shares for their own respective
accounts, for investment, and not with a view to, or for sale in
connection with, the distribution of any such Shares, in which
event the person(s) acquiring such Shares shall be bound by the
provisions of the following legend
which shall be endorsed upon the certificate(s) evidencing their
Shares issued pursuant to such exercise or such grant:
“The
shares represented by this certificate have been taken for
investment and they may not be sold or otherwise transferred by any
person, including a pledgee, unless (1) either (a) a
Registration Statement with respect to such shares shall be
effective under the Securities Act of 1933, as amended, or
(b) the Company shall have received an opinion of counsel
satisfactory to it that an exemption from registration under such
Act is then available, and (2) there shall have been
compliance with all applicable state securities
laws.”
b.
At the
discretion of the Administrator, the Company shall have received an
opinion of its counsel that the Shares may be issued upon such
particular exercise or acceptance in compliance with the 1933 Act
without registration thereunder.
23. DISSOLUTION OR
LIQUIDATION OF THE COMPANY.
Upon
the dissolution or liquidation of the Company, all Options granted
under this Plan which as of such date shall not have been exercised
and all Stock Grants and Stock-Based Awards which have not been
accepted will terminate and become null and void; provided,
however, that if the rights of a Participant or a
Participant’s Survivors have not otherwise terminated and
expired, the Participant or the Participant’s Survivors will
have the right immediately prior to such dissolution or liquidation
to exercise or accept any Stock Right to the extent that the Stock
Right is exercisable or subject to acceptance as of the date
immediately prior to such dissolution or liquidation. Upon the
dissolution or liquidation of the Company, any outstanding
Stock-Based Awards shall immediately terminate unless otherwise
determined by the Administrator or specifically provided in the
applicable Agreement.
24. ADJUSTMENTS.
Upon
the occurrence of any of the following events, a
Participant’s rights with respect to any Stock Right granted
to him or her hereunder shall be adjusted as hereinafter provided,
unless otherwise specifically provided in a Participant’s
Agreement:
A. Stock Dividends and Stock
Splits. If (i) the shares
of Common Stock shall be subdivided or combined into a greater or
smaller number of shares or if the Company shall issue any shares
of Common Stock as a stock dividend on its outstanding Common
Stock, or (ii) additional shares or new or different shares or
other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock, the number
of shares of Common Stock deliverable upon the exercise of an
Option or acceptance of a Stock Grant shall be appropriately
increased or decreased proportionately, and appropriate adjustments
shall be made including, in the purchase price per share, to
reflect such events. The number of Shares subject to the limitation
in Paragraph 4(c) shall also be proportionately adjusted upon the
occurrence of such events.
10
B. Corporate
Transactions. If the Company is
to be consolidated with or acquired by another entity in a merger,
sale of all or substantially all of the Company’s assets
other than a transaction to merely change the state of
incorporation (a “Corporate Transaction”), the
Administrator or the board of directors of any entity assuming the
obligations of the Company hereunder (the “Successor
Board”), shall, as to outstanding Options, either
(i) make appropriate provision for the continuation of such
Options by substituting on an equitable basis for the Shares then
subject to such Options either the consideration payable with
respect to the outstanding shares of Common Stock in connection
with the Corporate Transaction or securities of any successor or
acquiring entity; or (ii) upon written notice to the
Participants, provide that all Options must be exercised (either
(a) to the extent then exercisable or, (b) at the
discretion of the Administrator, all Options being made fully
exercisable for purposes of this Subparagraph), within a specified
number of days of the date of such notice, at the end of which
period the Options shall terminate; or (iii) terminate all
Options in exchange for a cash payment equal to the excess of the
Fair Market Value of the Shares subject to such Options (either
(a) to the extent then exercisable or, (b) at the
discretion of the Administrator, all Options being made fully
exercisable for purposes of this Subparagraph) over the exercise
price thereof.
With
respect to outstanding Stock Grants, the Administrator or the
Successor Board, shall either (i) make appropriate provisions
for the continuation of such Stock Grants on the same terms and
conditions by substituting on an equitable basis for the Shares
then subject to such Stock Grants either the consideration payable
with respect to the outstanding Shares of Common Stock in
connection with the Corporate Transaction or securities of any
successor or acquiring entity; or (ii) terminate all Stock
Grants in exchange for a cash payment equal to the excess of the
Fair Market Value of the Shares subject to such Stock Grants over
the purchase price thereof, if any. In addition, in the event of a
Corporate Transaction, the Administrator may waive any or all
Company repurchase rights with respect to outstanding Stock
Grants.
C. Recapitalization or
Reorganization. In the event of
a recapitalization or reorganization of the Company other than a
Corporate Transaction pursuant to which securities of the Company
or of another corporation are issued with respect to the
outstanding shares of Common Stock, a Participant upon exercising
an Option or accepting a Stock Grant after the recapitalization or
reorganization shall be entitled to receive for the purchase price
paid upon such exercise or acceptance of the number of replacement
securities which would have been received if such Option had been
exercised or Stock Grant accepted prior to such recapitalization or
reorganization.
D. Adjustments to Stock-Based
Awards. Upon the happening of
any of the events described in Subparagraphs A, B or C above, any
outstanding Stock-Based Award shall be appropriately adjusted to
reflect the events described in such Subparagraphs. The
Administrator or the Successor Board shall determine the specific
adjustments to be made under this Paragraph 24, and subject to
Paragraph 4, its determination shall be
conclusive.
E. Modification of
ISOs. Notwithstanding the
foregoing, any adjustments made pursuant to Subparagraph A, B or C
above with respect to ISOs shall be made only after the
Administrator determines whether such adjustments would constitute
“modification” of such ISOs (as that term is defined in
Section 424(h) of the Code) or would cause any adverse tax
consequences for the holders of such ISOs. If the Administrator
determines that such adjustments made with respect to ISOs would
constitute a modification of such ISOs, it may refrain from making
such adjustments, unless the holder of an ISO specifically requests
in writing that such adjustment be made and such writing indicates
that the holder has full knowledge of the consequences of such
“modification” on his or her income tax treatment with
respect to the ISO.
25. ISSUANCES OF
SECURITIES.
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 subject to Stock Rights. Except as expressly provided
herein, no adjustments shall be made for dividends paid in cash or
in property (including without limitation, securities) of the
Company prior to any issuance of Shares pursuant to a Stock
Right.
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26. FRACTIONAL
SHARES.
No
fractional shares shall be issued under the Plan and the person
exercising a Stock Right shall receive from the Company cash in
lieu of such fractional shares equal to the Fair Market Value
thereof.
27. CONVERSION OF ISOs INTO
NON-QUALIFIED OPTIONS; TERMINATION OF ISOs.
The
Administrator, at the written request of any Participant, may in
its discretion take such actions as may be necessary to convert
such Participant’s ISOs (or any portions thereof) that have
not been exercised on the date of conversion into Non-Qualified
Options at any time prior to the expiration of such ISOs,
regardless of whether the Participant is an employee of the Company
or an Affiliate at the time of such conversion. At the time of such
conversion, the Administrator (with the consent of the Participant)
may impose such conditions on the exercise of the resulting
Non-Qualified Options as the Administrator in its discretion may
determine, provided that such conditions shall not be inconsistent
with this Plan. Nothing in the Plan shall be deemed to give any
Participant the right to have such Participant’s ISOs
converted into Non-Qualified Options, and no such conversion shall
occur until and unless the Administrator takes appropriate action.
The Administrator, with the consent of the Participant, may also
terminate any portion of any ISO that has not been exercised at the
time of such conversion.
28. WITHHOLDING.
In
the event that any federal, state, or local income taxes,
employment taxes, Federal Insurance Contributions Act
(“F.I.C.A.”) withholdings or other amounts are required
by applicable law or governmental regulation to be withheld from
the Participant’s salary, wages or other remuneration in
connection with the exercise or acceptance of a Stock Right or in
connection with a Disqualifying Disposition (as defined in
Paragraph 29) or upon the lapsing of any right of repurchase, the
Company may withhold from the Participant’s compensation, if
any, or may require that the Participant advance in cash to the
Company, or to any Affiliate of the Company which employs or
employed the Participant, the statutory minimum amount of such
withholdings unless a different withholding arrangement, including
the use of shares of the Company’s Common Stock or a
promissory note, is authorized by the Administrator (and permitted
by law). For purposes hereof, the fair market value of the shares
withheld for purposes of payroll withholding shall be determined in
the manner provided in Paragraph 1 above, as of the most recent
practicable date prior to the date of exercise. If the fair market
value of the shares withheld is less than the amount of payroll
withholdings required, the Participant may be required to advance
the difference in cash to the Company or the Affiliate employer.
The Administrator in its discretion may condition the exercise of
an Option for less than the then Fair Market Value on the
Participant’s payment of such additional
withholding.
29. NOTICE TO COMPANY OF
DISQUALIFYING DISPOSITION.
Each
Employee who receives an ISO must agree to notify the Company in
writing immediately after the Employee makes a Disqualifying
Disposition of any shares acquired pursuant to the exercise of an
ISO. A Disqualifying Disposition is defined in Section 424(c)
of the Code and includes any disposition (including any sale or
gift) of such shares before the later of (a) two years after
the date the Employee was granted the ISO, or (b) one year
after the date the Employee acquired Shares by exercising the ISO,
except as otherwise provided in Section 424(c) of the Code. If
the Employee has died before such stock is sold, these holding
period requirements do not apply and no Disqualifying Disposition
can occur thereafter.
30. TERMINATION OF THE
PLAN.
The
Plan will terminate on 10 years after adoption, the date which is
ten years from the earlier of the date of its adoption by the Board
of Directors and the date of its approval by the shareholders of
the Company. The Plan may be terminated at an earlier date by vote
of the shareholders or the Board of Directors of the Company;
provided, however, that any such earlier termination shall not
affect any Agreements executed prior to the effective date of such
termination.
12
31. AMENDMENT OF THE PLAN
AND AGREEMENTS.
The
Plan may be amended by the shareholders of the Company. The Plan
may also be amended by the Administrator, including, without
limitation, to the extent necessary to qualify any or all
outstanding Stock Rights granted under the Plan or Stock Rights to
be granted under the Plan for favorable federal income tax
treatment (including deferral of taxation upon exercise) as may be
afforded incentive stock options under Section 422 of the
Code, and to the extent necessary to qualify the shares issuable
upon exercise or acceptance of any outstanding Stock Rights
granted, or Stock Rights to be granted, under the Plan for listing
on any national securities exchange or quotation in any national
automated quotation system of securities dealers. Any amendment
approved by the Administrator which the Administrator determines is
of a scope that requires shareholder approval shall be subject to
obtaining such shareholder approval. Any modification or amendment
of the Plan shall not, without the consent of a Participant,
adversely affect his or her rights under a Stock Right previously
granted to him or her. With the consent of the Participant
affected, the Administrator may amend outstanding Agreements in a
manner which may be adverse to the Participant but which is not
inconsistent with the Plan. In the discretion of the Administrator,
outstanding Agreements may be amended by the Administrator in a
manner which is not adverse to the Participant.
32. EMPLOYMENT OR OTHER
RELATIONSHIP.
Nothing
in this Plan or any Agreement shall be deemed to prevent the
Company or an Affiliate from terminating the employment,
consultancy or director status of a Participant, nor to prevent a
Participant from terminating his or her own employment, consultancy
or director status or to give any Participant a right to be
retained in employment or other service by the Company or any
Affiliate for any period of time.
33. GOVERNING
LAW.
This
Plan shall be construed and enforced in accordance with the law of
the State of Delaware.
13