VSOURCE, INC.
2000 STOCK OPTION PLAN
Adopted July 7, 2000
1. PURPOSES.
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(a) The purpose of the Vsource, Inc. 2000 Stock Option Plan (the
"PLAN") is to provide a means by which Employees and Directors of and
Consultants to the Company, and its Affiliates, may be given an opportunity to
benefit from increases in value of the stock of the Company through the granting
of (i) Incentive Stock Options and (ii) Nonstatutory Stock Options as defined
below.
(b) The Company, by means of the Plan, seeks to retain the
services of persons who are now Employees or Directors of or Consultants to the
Company, to secure and retain the services of new Employees, Directors and
Consultants, and to provide incentives for such persons to exert maximum efforts
for the success of the Company.
(c) The Company intends that the Options issued under the Plan
shall, in the discretion of the Board or any Committee to which responsibility
for administration of the Plan has been delegated pursuant to subsection 3(c),
be Options granted pursuant to Section 6 hereof. All Options shall be
separately designated Incentive Stock Options or Nonstatutory Stock Options at
the time of grant, and in such form as issued pursuant to Section 6. A
separate certificate or certificates will be issued for shares purchased on
exercise of each type of Option.
2. DEFINITIONS.
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(a) "AFFILIATE" means any parent corporation or subsidiary
corporation, 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) "CODE" means the Internal Revenue Code of 1986, as amended.
(d) "COMMITTEE" is defined in Section 3(c) of this Plan.
(e) "COMPANY" means Vsource, Inc., a Nevada corporation.
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(f) "CONSULTANT" means any person, including an advisor, engaged
by the Company or an Affiliate to render, and who does render, bonafide services
other than in connection with the offer and sale of securities in a
capital-raising transaction, and who is compensated for such services; and to
the extent the Company is seeking to grant an Option pursuant hereto under an
exemption from registration under Rule 701 promulgated under the Securities Act,
the term "Consultant" shall be limited to natural persons for so long as that is
a requirement under such Rule 701.
(g) "CONTINUOUS STATUS AS AN EMPLOYEE, DIRECTOR OR CONSULTANT"
means the employment or relationship as a Director or Consultant is not
interrupted or terminated by the Company or any Affiliate. The Board, in its
sole discretion, may determine whether Continuous Status as an Employee,
Director or Consultant shall be considered interrupted in the case of: (i) any
leave of absence approved by the Board, including sick leave, military leave, or
any other personal leave; provided, however, that for purposes of Incentive
Stock Options, any such leave may not exceed ninety (90) days, unless
reemployment upon the expiration of such leave is guaranteed by contract
(including certain Company policies) or statute; or (ii) transfers between
locations of the Company or between the Company, Affiliates or its successor.
(h) "DIRECTOR" means a member of the Board.
(i) "DISABILITY" means total and permanent disability as defined
in Section 22(e)(3) of the Code.
(j) "EMPLOYEE" means any person, including Officers and Directors,
employed by the Company or any Affiliate of the Company. Neither service as a
Director or Consultant nor payment of a director's fee or Consultant's fee by
the Company shall be sufficient to constitute "employment" by the Company.
(k) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(l) "FAIR MARKET VALUE" means, as of any date, the fair market
value of the common stock of the Company as determined in good faith by the
Board. At such time as the common stock of the Company is traded on an exchange
or nationally recognized trading system, the fair market value of the Company's
stock will be based on the prices at which the stock is traded in that market.
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(m) "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.
(n) "NON-EMPLOYEE DIRECTOR" means a Director who is not currently
an Officer or otherwise employed by the Company or a parent or subsidiary of the
Company, does not receive compensation directly or indirectly from the Company,
its parent or any subsidiary, for services as a consultant or in any other
capacity other than as a director, except for an amount for which disclosure
would not be required pursuant to Item 404(a) of Regulation S-K of the
Securities and Exchange Commission; does not possess an interest in any other
transaction for which disclosure would be required pursuant to said Item 404(a)
of Regulation S-K; and is not engaged in a business relationship for which
disclosure would be required pursuant to said Item 404(b) of Regulation S-K.
(o) "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an Incentive Stock Option.
(p) "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.
(q) "OPTION" means a stock option granted pursuant to the Plan.
(r) "OPTION AGREEMENT" means a written agreement between the
Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of
the Plan.
(s) "OPTIONEE" means an Employee, Director or Consultant who holds
an outstanding Option.
(t) "PLAN" means this Vsource, Inc. 2000 Stock Option Plan.
(u) "RULE 16B-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.
(v) "SECURITIES ACT" means the Securities Act of 1933, as
amended.
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3. ADMINISTRATION
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(a) The Plan shall be administered by the Board unless and until
the Board delegates administration to a Committee, as provided in subsection
3(c).
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the persons
eligible under the Plan shall be granted Options; whether an Option will be
granted as an Incentive Stock Option or a Nonstatutory Stock Option or any
combination of the two; when and how Options shall be granted; the provisions of
each Option Agreement (which need not be identical), including the time or times
when a person shall be permitted to receive stock pursuant to an Option; and the
number of shares with respect to which Options shall be granted to each such
person.
(2) To construe and interpret the Plan and Options 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 Option Agreement, in a
manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.
(3) To amend the Plan as provided in Section 14.
(4) 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.
(c) The Board may delegate administration of the Plan to a
committee composed of not fewer than two (2) members (the "COMMITTEE"), all of
the members of which Committee shall be Non-Employee Directors. 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 (and references in this Plan to the Board shall thereafter be to
the Committee), 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 abolish the Committee at any time and revest in the Board the
administration of the Plan. Additionally, prior to the date of the first
registration of an equity security of the Company under Section 12 of the
Exchange Act, and notwithstanding anything to the contrary herein, the Board may
delegate administration of the Plan to any person or persons and the term
"Committee" shall apply to any person or persons to whom such authority has been
delegated.
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4. SHARES SUBJECT TO THE PLAN.
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(a) Subject to the provisions of Section 11 relating to
adjustments upon changes in the common stock of the Company, the stock that may
be issued pursuant to Options granted hereunder shall be common stock of the
Company and shall not exceed in the aggregate the lesser of (i) seven hundred
ninety five thousand (795,000) shares of the Company's common stock, and (if
applicable) (ii) that number of shares that when added to the total number of
shares called for under any other stock bonus or similar plan of the Company
would equal 30% of outstanding shares of the Company (with convertible
preferred or convertible senior shares being counted on an as-converted basis),
as calculated in accordance with the conditions and exclusions of Title 10,
Section 260.140.45 of the California Code of Regulations, based upon the shares
of the Company which are outstanding at the time the calculation is made.
Subject to such overall limitation, shares of stock may be issued up to such
maximum number pursuant to any type or types of Options granted.
(b) The stock subject to the Plan shall be authorized but unissued
shares of Common Stock whether or not they are reacquired shares, bought on the
market or otherwise.
5. ELIGIBILITY.
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(a) Incentive Stock Options may be granted only to Employees.
Options other than Incentive Stock Options may be granted only to Employees,
Directors or Consultants.
(b) A Director shall not be eligible for the benefits of the Plan
if at the time discretion is exercised in (i) the selection of the Director as a
person to whom Options may be granted, or (ii) the determination of the number
of shares which may be covered by an Option granted to the Director, the Plan or
particular Options otherwise would not comply with the requirements of Rule
16b-3. The Board or Committee (as the case may be) shall comply with the
requirements of Rule 16b-3 in administering the Plan. This subsection 5(b)
shall not apply (1) prior to the date of the first registration of an equity
security of the Company under Section 12 of the Exchange Act, or (2) if the
Board or Committee expressly declares that it shall not apply.
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(c) No person shall be eligible for the grant of an Option if, at
the time of grant, such person 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 unless the exercise price in respect of the stock which is the
subject of such Option is at least one hundred ten percent (110%) of the Fair
Market Value of such stock at the date of grant and the Option is not
exercisable after the expiration of five (5) years from the date of grant.
6. OPTION PROVISIONS.
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Each Option Agreement shall be in such form and shall contain such
terms and conditions as the Board shall deem appropriate. The provisions of
separate Options and Option Agreements need not be identical, but subject to the
other provisions of the Plan, each Option Agreement shall include (through
incorporation of provisions hereof by reference in the Option Agreement or
otherwise) the substance of each of the following provisions:
(a) Term. No Option shall be exercisable after the expiration of
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ten (10) years from the date it was granted.
(b) Exercise Price. The exercise price of each Incentive Stock
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Option shall be not less than one hundred percent (100%) of the Fair Market
Value of the stock that is the subject of the Option on the date the Option is
granted; provided, however, if the Optionee owns (or is deemed to own pursuant
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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 any
of its Affiliates), the exercise price of the Option shall be not less than one
hundred ten percent (110%) of the Fair Market Value of the stock that is the
subject of the Option on the date the Option is granted. To the extent that
when issuing Nonstatutory Stock Options the Company relies on the exemption from
registration provided by Section 25102(o) of the California Corporations Code,
the exercise price of each Nonstatutory Stock Option shall be not less than
eighty-five percent (85%) of the Fair Market Value of the stock that is the
subject of the Option on the date the Option is granted, and the exercise price
of each Nonstatutory Stock Option of any person who owns stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company or its parent or subsidiary companies shall be 110% of the Fair Market
Value of the stock the subject of the Nonstatutory Option.
(c) Consideration. The exercise price of stock acquired pursuant
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to an Option shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the time the option is exercised, or (ii) at
the discretion of the Board or the Committee (such discretion being exercised
either at the time of the grant or exercise of the Option) (A) by delivery to
the Company of other common stock of the Company (provided that in the case of
an Incentive Stock Option, the stock must have been held for the period required
by Code Section 422(a)(1)), or (B) in any other form of legal consideration that
may be acceptable to the Board.
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(d) Method of Exercise. Stock Options may be exercised in whole
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or in part, by giving written notice of exercise to the Company in accordance
with the Stock Option Agreement pursuant to which they were granted.
(e) Nontransferability. An Option shall not be transferable
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except by will or by the laws of descent and distribution, by instrument to an
inter vivos or testamentary trust in which the Options are to be passed to
beneficiaries upon the death of the trustor (or "settlor"); except that to the
extent federal and state exemptions from registration are available,
Nonstatutory Stock Options also shall be transferable by gift to "immediate
family" as that term is defined in 17 C.F.R. 240.16a-1(e), or as may otherwise
be allowed by Title 10, Section 260.140.41 of the California Code of Regulations
or any successor regulation. Except as provided in Section 6(j) below, Options
shall be exercisable during the lifetime of the person to whom the Option is
granted only by such person.
(f) Vesting. The total number of shares of stock subject to an
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Option may, but need not, be allotted in periodic installments (which may, but
need not, be equal). The Option Agreement may provide that from time to time
during each of such installment periods, the Option may become exercisable
("VEST") with respect to some or all of the shares allotted to that period, and
may be exercised with respect to some or all of the shares allotted to such
period and/or any prior period as to which the Option became vested but was not
fully exercised. During the remainder of the term of the Option (if its term
extends beyond the end of the installment periods), the option may be exercised
from time to time with respect to any shares then remaining subject to the
Option. The provisions of this subsection 6(f) are subject to any Option
provisions governing the minimum number of shares as to which an Option
Agreement may be exercised.
(g) Securities Law Compliance. The Company may require any
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Optionee, or any person to whom an Option is transferred under subsection 6(e),
as a condition of exercising any such Option, (1) to give written assurances or
(2) make any representation or warranty satisfactory to the Company, if any,
that may be necessary, or deemed appropriate by the Board, in its discretion, to
ensure compliance with federal or state securities laws. The representations
and warranties may include, without limitation, a representation and warranty
that the Option and/or common stock of the Company are being acquired only for
investment and without any present intention to sell or distribute such Option
or common stock. These requirements, and any assurances, representations or
warranties given pursuant to such requirements, shall be inoperative if (i) the
issuance of the shares upon the exercise of the Option has been registered under
a then currently effective registration statement under the Securities Act, or
(ii) 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.
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(h) Termination of Employment or Relationship as a Director or
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Consultant. In the event an Optionee's Continuous Status as an Employee,
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Director or Consultant terminates (other than for cause or upon the Optionee's
death or Disability), the Optionee may exercise his or her Option, but only
within such period of time as is determined by the Board (which period shall not
be less than thirty (30) days from the date of such termination, nor in the case
of an Incentive Stock Option, more than three (3) months from and after the date
of termination), and only to the extent that the Optionee was entitled to
exercise it at the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Option Agreement). If
an Optionee's Continuous Status as an Employee, Director or Consultant
terminates for cause, then the Option shall terminate immediately upon such
termination for cause. If, at the date of termination described in this
subsection 6(h), the Optionee is not entitled to exercise his or her entire
Option, the shares covered by the unexercisable portion of the Option shall
revert to the Plan. If, after termination described in this subsection 6(h),
the Optionee does not exercise his or her Option within the time specified
herein, the Option shall terminate, and the shares covered by such Option shall
revert to the Plan.
(i) Disability of Optionee. In the event an Optionee's Continuous
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Status as an Employee, Director or Consultant terminates as a result of the
Optionee's Disability, the Optionee may exercise his or her Option, but only
within such period of time as is determined by the Board (which period shall not
be less than six (6) months from the date of such termination, nor more than one
(1) year from and after such termination), and only to the extent that the
Optionee was entitled to exercise it at the date of such termination (but in no
event later than the expiration of the term of such Option as set forth in the
Option Agreement). If, at the date of termination described in this subsection
6(h), the Optionee is not entitled to exercise his or her entire Option, the
shares covered by the unexercisable portion of the Option shall revert to the
Plan. If, after termination described in this subsection 6(i), the Optionee
does not exercise his or her Option within the time specified herein, the Option
shall terminate, and the shares covered by such Option shall revert to the Plan.
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(j) Death of Optionee. In the event of the death of an Optionee,
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the Option may be exercised, at any time within such period as is determined by
the Board (which period shall not be less than six (6) months following the date
of death) by the Optionee's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, and only to the extent the
Optionee was entitled to exercise the Option at the date of death (but in no
event later than the expiration of the term of such Option as set forth in the
Option Agreement). If, at the time of death, the Optionee was not entitled to
exercise his or her entire Option, the shares covered by the unexercisable
portion of the Option shall revert to the Plan. If, after death, the Optionee's
estate or a person who acquired the right to exercise the Option by bequest or
inheritance does not exercise the Option within the time specified herein, the
Option shall terminate, and the shares covered by such Option shall revert to
the Plan.
(k) Re-Load Options. Without in any way limiting the authority of
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the Board or Committee to make or not to make grants of Options hereunder, the
Board or Committee shall have the authority (but not an obligation) to include
as part of any Option Agreement a provision entitling the Optionee to a further
Option (a "RE-LOAD OPTION") in the event the Optionee exercises the Option
evidenced by the Option Agreement, in whole or in part, by surrendering other
shares of common stock of the Company in accordance with this Plan and the terms
and conditions of the Option Agreement. Any such Re-Load Option (i) shall be
for a number of shares equal to the number of shares surrendered as part or all
of the exercise price of such Option; (ii) shall have an expiration date which
is the same as the expiration date of the Option the exercise of which gave rise
to such Re-Load Option; and (iii) shall have an exercise price which is equal to
one hundred percent (100%) of the Fair Market Value of the common stock subject
to the Re-Load Option on the date the Re-Load Option is granted or, in the case
of a Re-Load Option which is granted to a ten percent (10%) shareholder (as
described in subparagraph 5(c)), shall have an exercise price which is equal to
one hundred ten percent (110%) of the Fair Market Value of the common stock
subject to the Re-Load Option on the date the Re-Load Option is granted.
Any such Re-Load Option may be an Incentive Stock Option or a
Nonstatutory Stock Option, as the Board or Committee may designate at the time
of the grant of the original Option, provided, however, that the designation of
any Re-Load Option as an Incentive Stock Option shall be subject to the one
hundred thousand dollars ($100,000) annual limitation on exercisability of
Incentive Stock Options described in subsection 16(c) of the Plan and in Section
422(d) of the Code. There shall be no Re-Load Options on a Re-Load Option. Any
such Re-Load Option shall be subject to the availability of sufficient shares
under subparagraph 4(a) and shall be subject to such other terms and conditions
as the Board or Committee may determine.
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7. CANCELLATION AND RE-GRANT OF OPTIONS.
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The Board or the Committee shall have the authority to effect, at any
time and from time to time, with the consent of the affected holders of Options,
(i) the repricing of any outstanding Options under the Plan and/or (ii) the
cancellation of any outstanding Options under the Plan and the grant in
substitution therefor of new Options under the Plan covering the same or
different numbers of shares of stock, but having an exercise price per share
which complies with the provisions of Section 6(b) hereof on the new grant date.
8. TAX WITHHOLDING
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(a) Payment by Participant. Each participant shall, no later than
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the date as of which the value of an Option granted hereunder, or of any stock
or other amounts received thereunder, first becomes includable in the gross
income of the participant for Federal income tax purposes, pay to the Company,
or make arrangements satisfactory to the Board or Committee regarding payment
of, any Federal, state, or local taxes of any kind required by law to be
withheld with respect to such income. The Company and its Affiliates shall, to
the extent permitted by law, have the right to deduct any such taxes from any
compensation or other payment of any kind otherwise due to the participant.
(b) Payment in Cash or Stock. To the extent provided by the terms
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of an Option Agreement, the Optionee may satisfy any Federal, state or local tax
withholding obligation relating to the exercise of such Option by any of the
following means or by a combination of such means: (1) tendering a cash
payment; (2) authorizing the Company to withhold such amounts from any
compensation or other payments due to the Optionee; (3) authorizing the Company
to withhold from shares of stock to be issued pursuant to any exercise of an
Option granted hereunder a number of shares with an aggregate Fair Market Value
(as of the date the withholding is effected) that would satisfy the withholding
amount due; or (4) transferring to the Company shares of stock owned by the
participant with an aggregate Fair Market Value (as of the date the withholding
is effected) that would satisfy the withholding amount due.
9. RESERVATION OF SHARES. During the terms of the Option Agreements,
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the Company shall keep available at all times the number of shares of stock
required to satisfy such Options granted hereunder up to the number of shares of
stock authorized under the Plan.
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10. USE OF PROCEEDS FROM STOCK. Proceeds from the sale of stock
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pursuant to the exercise Options shall constitute general funds of the Company.
11. ADJUSTMENTS UPON CHANGES IN STOCK.
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(a) Changes in Stock. If any change is made in the stock subject
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to the Plan, or subject to any Option Agreement (through merger, consolidation,
reorganization, recapitalization, reclassification, stock dividend, dividend in
property other than cash, stock split, reverse stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other corporate transaction within the meaning of Section
1.425-1(a)(i)(ii) of the Treasury Regulations), the Plan and outstanding Options
will be appropriately and proportionately adjusted in the class(es) and maximum
number of shares subject to the Plan and the class(es) and number of shares and
price per share of stock subject to outstanding Options.
(b) Certain Mergers or Consolidations. In the event of: (1) a
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merger or consolidation in which the Company is not the surviving corporation;
(2) a reverse merger in which the Company is the surviving corporation but the
shares of the Company's common stock outstanding immediately preceding the
merger are converted by virtue of the merger into other property, whether in the
form of securities, cash or otherwise; or (3) any transaction or series of
related transactions after which any person (as such term is used in Section
13(d)(3) of the Securities Act of 1934, as amended), other than any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
subsidiary of the Company, becomes the beneficial owner of voting securities of
the Company representing 50% or more of the combined voting power of all the
voting securities of the Company (a "Change of Control"), then, at the sole
discretion of the Board and to the extent permitted by applicable law: (i) any
surviving corporation shall assume any Options outstanding under the Plan or
shall substitute similar Options for those outstanding under the Plan or (ii)
such Options shall continue in full force and effect. In the event any
surviving corporation refuses or is not permitted under applicable law to assume
or continue such Options, or to substitute similar awards for those outstanding
under the Plan, then (x) the vesting date of all unexercised Options shall
accelerate automatically to the business day that is thirty (30) days preceding
the effective date of the merger or consolidation and (y) the Options shall be
terminated if not exercised in accordance with the terms of the Plan during the
30-day period prior to such merger or consolidation; provided, however, that in
the event of a Change of Control, then the holders of unexercised Options shall
have fifteen (15) days from the date of such Change of Control to exercise such
Options, after which time such Options shall be terminated. If the unexercised
Options are assumed by the surviving corporation, then any Options so assumed
shall be immediately exercisable and fully vested (whether or not such Options
were by their terms then exercisable).
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(c) Liquidation. In the event of a dissolution or liquidation of
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the Company, any Options outstanding under the Plan shall terminate if not
exercised in accordance with the terms of the Plan prior to such event.
12. SECURITIES LAW COMPLIANCE.
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(a) Regulatory Approvals. No Options will be granted or be
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exercisable under the Plan until there has been compliance with all applicable
requirements of the Securities Act, the California Corporate Securities Act of
1968, as amended, and any other requirement of law or of any regulatory body
with jurisdiction over such issuance and delivery, including without limitation,
and if applicable, Section 25102(o) of the California Corporations Code, and if
required, an appropriate permit has been issued by the Commissioner of
Corporations of the State of California.
(b) No Issuances or Exercise Until Compliance is Shown. The
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Company shall seek to obtain from each regulatory commission or agency having
jurisdiction over the Plan such authority as may be required, if any, to issue
and sell shares of stock under the Options; provided, however, that this
undertaking shall not require the Company to register under the Securities Act
either the Plan, any Option or any stock issued or issuable pursuant to any such
Option. 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 stock under the Plan, the
Company shall be relieved from any liability for failure to issue and sell stock
under such Options unless and until such authority is obtained.
(c) Exemptions. As provided in subsection (b) above, an Option
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may be issued only to the extent that the granting of such Option or the
exercise of such Option will qualify for an exemption from the Securities Act.
(d) Rule 16b-3. From and after the date of the first registration
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of an equity security of the Company under Section 12 of the Exchange Act,
Options shall be issued, to the extent possible, so as to qualify the
transaction for an exemption under Rule 16b-3.
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13. LEGENDS ON OPTIONS AND STOCK CERTIFICATES. Each Option Agreement,
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and each certificate representing common stock of the Company acquired upon
exercise of an Option, shall be endorsed with all legends, if any, required by
applicable federal and state securities laws to be placed on the Option
Agreement and/or the certificate. The determination of which legends, if any,
shall be placed upon Option Agreements and/or the certificates representing the
stock to be issued upon exercise of the Option shall be made by the Board in its
sole discretion and such decision shall be final and binding.
14. AMENDMENT, TERMINATION OR SUSPENSION OF THE PLAN.
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(a) Amendment, Termination or Suspension. The Board may amend,
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suspend or terminate the Plan at any time. To the extent necessary or desirable
to comply with Rule 16b-3, the Code, or any applicable law or regulation, the
Company shall obtain Shareholder approval of any amendment of the Plan. Unless
sooner terminated, the Plan shall terminate ten years from the earlier of the
date the Plan is adopted by the Board and the date the Plan is approved by the
shareholders of the Company. No Option may be granted under the Plan while the
Plan is suspended or after it is terminated.
(b) Then Outstanding Options. Rights and obligations under any
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Option granted while the Plan is in effect shall not, except as otherwise
expressly provided by the terms of the Plan, be altered or impaired by
suspension or termination of the Plan, except with the consent of the person to
whom the Option was granted.
15. INDEMNIFICATION. In addition to such other rights of
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indemnification as they may have as members of the Board or the Committee, the
members of the Board and the Committee shall be indemnified by the Company
against all costs and expenses reasonably incurred by them in connection with
any action, suit or proceeding to which they or any of them may be a party by
reason of any action taken or failure to act under or in connection with the
Plan or any Option granted hereunder and against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal
counsel selected by the Company) or paid by them in satisfaction of a judgment
in any such action, suit or proceeding; provided, however, that any such Board
or Committee member shall be entitled to the indemnification rights set forth in
this Section 15 only if such member has acted in good faith and in a manner that
such member reasonably believed to be in or not opposed to the best interests of
the Company and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that such conduct was unlawful, and further
provided, that upon the institution of any such action, suit or proceeding, a
Committee member shall give the Company written notice thereof and an
opportunity, at its own expense, to handle and defend the same before such
Committee member undertakes to handle and defend on his own behalf.
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16. MISCELLANEOUS.
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(a) No Shareholder Rights. Neither an Optionee nor any person to
----------------------
whom an Option is transferred under subsection 6(e) shall be deemed to be the
holder CommentCommentBlock protect turned off hereof, or to have any of the
rights or privileges of a holder with respect to, any common stock issuable upon
exercise of such Option unless and until such person has satisfied all
requirements for exercise of the Option pursuant to its terms and certificates
representing such common stock shall have been issued and delivered
notwithstanding exercise of the Option. No adjustment will be made for a
dividend or other rights where the record date is prior to the date such stock
certificates are issued, except as provided in Section 11.
(b) No Rights to Continued Employment or Relationship as Director
--------------------------------------------------------------
or Consultant. Nothing in the Plan or any instrument executed or Stock Award
--------------
granted pursuant thereto shall confer upon any Employee, Director, Consultant,
Optionee, or other holder of Stock Awards any right to continue in the employ of
the Company or any Affiliate (or to continue acting as a Director or Consultant)
or shall affect the right of the Company or any Affiliate to terminate the
employment of any Employee, or the relationship as a Director or Consultant of
any Director or Consultant, with or without cause.
(c) Maximum Number of Incentive Stock Options. To the extent that
-----------------------------------------
the aggregate Fair Market Value (determined at the time of grant) of stock with
respect to which Incentive Stock Options exercisable for the first time by any
Optionee 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 which exceed such limit (according to the order in which they
were granted) shall be treated as Nonstatutory Stock Options.
(d) Availability of Plan. A copy of this Plan shall be delivered
---------------------
by the Secretary of the Company to any eligible person making reasonable inquiry
concerning the Plan.
(e) Governing Law. This Plan and all actions taken thereunder
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shall be governed by California law, applied without regard to conflict of law
principles.
(f) Financial Statements. Throughout the term of any Option, the
---------------------
Company shall deliver to the holder of such Option, not later than one hundred
twenty (120) days after the close of each of the Company's fiscal years during
the term of such Option, a balance sheet and an income statement. This section
shall not apply when issuance is limited to key employees whose duties in
connection with the Company assure them access to equivalent information.
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17. EFFECTIVE DATE OF PLAN. The Plan shall become effective as
-------------------------
determined by the Board, but only after the date the shareholders of the Company
approve the Plan, by vote or written consent, which approval must be within
twelve (12) months after the Plan has been adopted by the Board.
Date Plan Adopted by the Board: July 7, 2000
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