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EXHIBIT 4.04
NANOBIZ.COM, INC.
2000 STOCK INCENTIVE PLAN
1. Purposes of the Plan. The purposes of this Stock Incentive Plan
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are to attract and retain the best available personnel, to provide additional
incentive to Employees, Directors and Consultants and to promote the success of
the Company's business.
2. Definitions. As used herein, the following definitions shall
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apply:
a. "Administrator" means the Board or any of the Committees
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appointed to administer the Plan.
b. "Applicable Laws" means the legal requirements relating to the
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administration of stock incentive plans, if any, under applicable
provisions of federal and state securities laws, the corporate
laws of California and, to the extent other than California, the
corporate law of the state of the Company's incorporation, the
Code, the rules of any applicable stock exchange or national
market system, and the rules of any foreign jurisdiction
applicable to Awards granted to residents therein.
c. "Award" means the grant of an Option, Restricted Stock, SAR,
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Dividend Equivalent Right, Performance Unit, Performance Share,
or other right or benefit under the Plan.
d. "Award Agreement" means the written agreement evidencing the
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grant of an Award executed by the Company and the Grantee,
including any amendments thereto.
e. "Board" means the Board of Directors of the Company.
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f. "Cause" means, with respect to the termination by the Company or
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a Related Entity of the Grantee's Continuous Service, that such
termination is for "Cause" as such term is expressly defined in a
then-effective written agreement between the Grantee and the
Company or such Related Entity, or in the absence of such then-
effective written agreement and definition, is based on, in the
determination of the Administrator, the Grantee's: (i) refusal or
failure to act in accordance with any specific, lawful direction
or order of the Company or a Related Entity; (ii) unfitness or
unavailability for service or unsatisfactory performance (other
than as a result of Disability); (iii) performance of any act or
failure to perform any act in bad faith and to the detriment of
the Company or a Related Entity; (iv) dishonesty, intentional
misconduct or material breach of any agreement with the Company
or a Related Entity; or (v) commission of a crime involving
dishonesty, breach of trust, or physical or emotional harm to any
person. At least 30 days prior to the termination of the
Grantee's Continuous Service pursuant to (i) or (ii) above, the
Company shall provide the Grantee with notice of the Company's or
such Related Entity's intent to terminate, the reason therefor,
and an opportunity for the Grantee to cure such defects in his or
her service to the Company's or such Related Entity's
satisfaction. During this 30 day (or longer) period, no Award
issued to the Grantee under the Plan may be exercised or
purchased.
g. "Code" means the Internal Revenue Code of 1986, as amended.
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h. "Committee" means any committee appointed by the Board to
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administer the Plan.
i. "Common Stock" means the common stock of the Company.
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j. "Company" means Nanobiz, Inc., a Delaware corporation.
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k. "Consultant" means any person (other than an Employee or a
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Director, solely with respect to rendering services in such
person's capacity as a Director) who is engaged by the Company or
any Related Entity to render consulting or advisory services to
the Company or such Related Entity.
l. "Continuous Service" means that the provision of services to the
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Company or a Related Entity in any capacity of Employee, Director
or Consultant, is not interrupted or terminated. Continuous
Service shall not be considered interrupted in the case of (i)
any approved leave of absence, (ii) transfers among the Company,
any Related Entity, or any successor, in any capacity of
Employee, Director or Consultant, or (iii) any change in status
as long as the individual remains in the service of the Company
or a Related Entity in any capacity of Employee, Director or
Consultant (except as otherwise provided in the Award Agreement).
An approved leave of absence shall include sick leave, military
leave, or any other authorized personal leave. For purposes of
each Incentive Stock Option granted under the Plan, if such leave
exceeds ninety (90) days, and reemployment upon expiration of
such leave is not guaranteed by statute or contract, then the
Incentive Stock Option shall be treated as a Non-Qualified Stock
Option on the day three (3) months and one (1) day following the
expiration of such ninety (90) day period.
m. "Corporate Transaction" means any of the following transactions
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to which the Company is a party:
i. a merger or consolidation in which the Company is not
the surviving entity, except for a transaction the principal
purpose of which is to change the state in which the Company
is incorporated;
ii. the sale, transfer or other disposition of all or
substantially all of the assets of the Company (including
the capital stock of the Company's subsidiary corporations);
iii. approval by the Company's stockholders of any plan or
proposal for the complete liquidation or dissolution of the
Company;
iv. any reverse merger in which the Company is the
surviving entity but in which securities possessing more
than fifty percent (50%) of the total combined voting power
of the Company's outstanding securities are transferred to a
person or persons different from those who held such
securities immediately prior to such merger; or
v. acquisition by any person or related group of persons
(other than the Company or by a Company-sponsored employee
benefit plan) of beneficial ownership (within the meaning of
Rule 13d-3 of the Exchange Act) of securities possessing
more than fifty percent (50%) of the total combined voting
power of the Company's outstanding securities, but excluding
any such transaction that the Administrator determines shall
not be a Corporate Transaction.
n. "Director" means a member of the Board or the board of directors
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of any Related Entity.
o. "Disability" means a Grantee would qualify for benefit payments
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under the long-term disability policy of the Company or the
Related Entity to which the Grantee provides services regardless
of whether the Grantee is covered by such policy. If the Company
or the Related Entity to which the Grantee provides service does
not have a long-term disability plan in place, "Disability" means
that a Grantee is permanently unable to carry out the
responsibilities and functions of the position held by the
Grantee by reason of any medically determinable physical or
mental impairment. A Grantee will not be considered to have
incurred a Disability unless he or she furnishes proof of such
impairment sufficient to satisfy the Administrator in its
discretion.
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p. "Employee" means any person, including an Officer or Director,
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who is an employee of the Company or any Related Entity. The
payment of a director's fee by the Company or a Related Entity
shall not be sufficient to constitute "employment" by the
Company.
q. "Exchange Act" means the Securities Exchange Act of 1934, as
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amended.
r. "Fair Market Value" means, as of any date, the value of Common
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Stock determined as follows:
i. Where there exists a public market for the Common Stock,
the Fair Market Value shall be (A) the closing price for a
Share for the last market trading day prior to the time of
the determination (or, if no closing price was reported on
that date, on the last trading date on which a closing price
was reported) on the stock exchange determined by the
Administrator to be the primary market for the Common Stock
or the Nasdaq National Market, whichever is applicable or
(B) if the Common Stock is not traded on any such exchange
or national market system, the average of the closing bid
and asked prices of a Share on the Nasdaq Small Cap Market
for the day prior to the time of the determination (or, if
no such prices were reported on that date, on the last date
on which such prices were reported), in each case, as
reported in The Wall Street Journal or such other source as
the Administrator deems reliable; or
ii. In the absence of an established market for the Common
Stock of the type described in (i), above, the Fair Market
Value thereof shall be determined by the Administrator in
good faith and in a manner consistent with Section
260.140.50 of Title 10 of the California Code of
Regulations.
s. "Good Reason" means the occurrence after a Corporate Transaction
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of any of the following events or conditions unless consented to
by the Grantee:
i. (A) a change in the Grantee's status, title, position or
responsibilities which represents an adverse change from the
Grantee's status, title, position or responsibilities as in
effect at any time within six (6) months preceding the date
of a Corporate Transaction or at any time thereafter or (B)
the assignment to the Grantee of any duties or
responsibilities which are inconsistent with the Grantee's
status, title, position or responsibilities as in effect at
any time within six (6) months preceding the date of a
Corporate Transaction or at any time thereafter;
ii. reduction in the Grantee's base salary to a level below
that in effect at any time within six (6) months preceding
the date of a Corporate Transaction or at any time
thereafter; or
iii. requiring the Grantee to be based at any place outside
a 50-mile radius from the Grantee's job location prior to
the Corporate Transaction except for reasonably required
travel on business which is not materially greater than such
travel requirements prior to the Corporate Transaction.
t. "Grantee" means an Employee, Director or Consultant who receives
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an Award under the Plan.
u. "Incentive Stock Option" means an Option intended to qualify as
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an incentive stock option within the meaning of Section 422 of
the Code.
v. "Non-Qualified Stock Option" means an Option not intended to
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qualify as an Incentive Stock Option.
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w. "Officer" means a person who is an officer of the Company or a
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Related Entity within the meaning of Section 16 of the Exchange
Act and the rules and regulations promulgated thereunder.
x. "Option" means an option to purchase Shares pursuant to an Award
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Agreement granted under the Plan.
y. "Parent" means a "parent corporation," whether now or hereafter
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existing, as defined in Section 424(e) of the Code.
z. "Performance Shares" means Shares or an Award denominated in
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Shares which may be earned in whole or in part upon attainment of
performance criteria established by the Administrator.
aa. "Plan" means this 2000 Stock Incentive Plan.
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bb. "Post-Termination Exercise Period" means the period specified in
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the Award Agreement of not less than three (3) months commencing
on the date of termination (other than termination by the Company
or any Related Entity for Cause) of the Grantee's Continuous
Service, or such longer period as may be applicable upon death or
Disability.
cc. "Registration Date" means the first to occur of (i) the closing
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of the first sale to the general public of (A) the Common Stock
or (B) the same class of securities of a successor corporation
(or its Parent) issued pursuant to a Corporate Transaction in
exchange for or in substitution of the Common Stock, pursuant to
a registration statement filed with and declared effective by the
Securities and Exchange Commission under the Securities Act of
1933, as amended; and (ii) in the event of a Corporate
Transaction, the date of the consummation of the Corporate
Transaction if the same class of securities of the successor
corporation (or its Parent) issuable in such Corporate
Transaction shall have been sold to the general public pursuant
to a registration statement filed with and declared effective by
the Securities and Exchange Commission under the Securities Act
of 1933, as amended, on or prior to the date of consummation of
such Corporate Transaction.
dd. "Related Entity" means any Parent, Subsidiary and any business,
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corporation, partnership, limited liability company or other
entity in which the Company, a Parent or a Subsidiary holds a
substantial ownership interest, directly or indirectly.
ee. "Restricted Stock" means Shares issued under the Plan to the
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Grantee for such consideration, if any, and subject to such
restrictions on transfer, rights of first refusal, repurchase
provisions, forfeiture provisions, and other terms and conditions
as established by the Administrator.
ff. "Share" means a share of the Common Stock.
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gg. "Subsidiary" means a "subsidiary corporation," whether now or
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hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan.
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a. Subject to the provisions of Section 11 (a) below, the maximum
aggregate number of Shares which may be issued pursuant to all
Awards (including Incentive Stock Options) is three million three
hundred thousand (3,300,000) Shares. The Shares may be
authorized, but unissued, or reacquired Common Stock.
b. Any Shares covered by an Award (or portion of an Award) which is
forfeited or canceled, expires or is settled in cash, shall be
deemed not to have been issued for purposes of determining the
maximum aggregate number of Shares which may be issued under the
Plan. If any unissued
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Shares are retained by the Company upon exercise of an Award in
order to satisfy the exercise price for such Award or any
withholding taxes due with respect to such Award, such retained
Shares subject to such Award shall become available for future
issuance under the Plan (unless the Plan has terminated). Shares
that actually have been issued under the Plan pursuant to an
Award shall not be returned to the Plan and shall not become
available for future issuance under the Plan, except that if
unvested Shares are forfeited, or repurchased by the Company at
their original purchase price, such Shares shall become available
for future grant under the Plan.
4. Administration of the Plan.
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a. Plan Administrator. With respect to grants of Awards to
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Employees, Directors, or Consultants, the Plan shall be
administered by (A) the Board or (B) a Committee (or a
subcommittee of the Committee) designated by the Board, which
Committee shall be constituted in such a manner as to satisfy
Applicable Laws. Once appointed, such Committee shall continue to
serve in its designated capacity until otherwise directed by the
Board.
b. Multiple Administrative Bodies. The Plan may be administered by
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different bodies with respect to Directors, Officers,
Consultants, and Employees who are neither Directors nor
Officers.
c. Powers of the Administrator. Subject to Applicable Laws and the
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provisions of the Plan (including any other powers given to the
Administrator hereunder), and except as otherwise provided by the
Board, the Administrator shall have the authority, in its
discretion:
i. to select the Employees, Directors and Consultants to
whom Awards may be granted from time to time hereunder;
ii. to determine whether and to what extent Awards are
granted hereunder;
iii. to determine the number of Shares or the amount of
other consideration to be covered by each Award granted
hereunder;
iv. to approve forms of Award Agreements for use under
the Plan;
v. to determine the terms and conditions of any Award
granted hereunder;
vi. to establish additional terms, conditions, rules or
procedures to accommodate the rules or laws of applicable
foreign jurisdictions and to afford Grantees favorable
treatment under such rules or laws; provided, however, that
no Award shall be granted under any such additional terms,
conditions, rules or procedures with terms or conditions
which are inconsistent with the provisions of the Plan;
vii. to amend the terms of any outstanding Award granted
under the Plan, provided that any amendment that would
adversely affect the Grantee's rights under an outstanding
Award shall not be made without the Grantee's written
consent;
viii. to construe and interpret the terms of the Plan and
Awards, including without limitation, any notice of award or
Award Agreement, granted pursuant to the Plan; and
ix. to take such other action, not inconsistent with the
terms of the Plan, as the Administrator deems appropriate.
5. Eligibility. Awards other than Incentive Stock Options may be
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granted to Employees, Directors and Consultants. Incentive Stock Options may be
granted only to Employees of the Company, a Parent or a
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Subsidiary. An Employee, Director or Consultant who has been granted an Award
may, if otherwise eligible, be granted additional Awards. Awards may be granted
to such Employees, Directors or Consultants who are residing in foreign
jurisdictions as the Administrator may determine from time to time.
6. Terms and Conditions of Awards.
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a. Type of Awards. The Administrator is authorized under the Plan to
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award any type of arrangement to an Employee, Director or
Consultant that is not inconsistent with the provisions of the
Plan and that by its terms involves or might involve the issuance
of (i) Shares, (ii) an Option or similar right with a fixed or
variable price related to the Fair Market Value of the Shares and
with an exercise or conversion privilege related to the passage
of time, the occurrence of one or more events, or the
satisfaction of performance criteria or other conditions, or
(iii) any other security with the value derived from the value of
the Shares. Such awards include, without limitation, Options, or
sales or bonuses of Restricted Stock and an Award may consist of
one such security or benefit, or two (2) or more of them in any
combination or alternative.
b. Designation of Award. Each Award shall be designated in the Award
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Agreement. In the case of an Option, the Option shall be
designated as either an Incentive Stock Option or a Non-Qualified
Stock Option. However, notwithstanding such designation, to the
extent that the aggregate Fair Market Value of Shares subject to
Options designated as Incentive Stock Options which become
exercisable for the first time by a Grantee during any calendar
year (under all plans of the Company or any Parent or Subsidiary)
exceeds $100,000, such excess Options, to the extent of the
Shares covered thereby in excess of the foregoing limitation,
shall be treated as Non-Qualified Stock Options. For this
purpose, Incentive Stock Options shall be taken into account in
the order in which they were granted, and the Fair Market Value
of the Shares shall be determined as of the grant date of the
relevant Option.
c. Conditions of Award. Subject to the terms of the Plan, the
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Administrator shall determine the provisions, terms, and
conditions of each Award including, but not limited to, the Award
vesting schedule, repurchase provisions, rights of first refusal,
forfeiture provisions, form of payment (cash, Shares, or other
consideration) upon settlement of the Award, payment
contingencies, and satisfaction of any performance criteria. The
performance criteria established by the Administrator may be
based on any one of, or combination of, increase in share price,
earnings per share, total stockholder return, return on equity,
return on assets, return on investment, net operating income,
cash flow, revenue, economic value added, personal management
objectives, or other measure of performance selected by the
Administrator. Partial achievement of the specified criteria may
result in a payment or vesting corresponding to the degree of
achievement as specified in the Award Agreement.
d. Acquisitions and Other Transactions. The Administrator may issue
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Awards under the Plan in settlement, assumption or substitution
for, outstanding awards or obligations to grant future awards in
connection with the Company or a Related Entity acquiring another
entity, an interest in another entity or an additional interest
in a Related Entity whether by merger, stock purchase, asset
purchase or other form of transaction.
e. Deferral of Award Payment. The Administrator may establish one or
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more programs under the Plan to permit selected Grantees the
opportunity to elect to defer receipt of consideration upon
exercise of an Award, satisfaction of performance criteria, or
other event that absent the election would entitle the Grantee to
payment or receipt of Shares or other consideration under an
Award. The Administrator may establish the election procedures,
the timing of such elections, the mechanisms for payments of, and
accrual of interest or other earnings, if any, on amounts, Shares
or other consideration so deferred, and such other terms,
conditions, rules and procedures that the Administrator deems
advisable for the administration of any such deferral program.
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f. Award Exchange Programs. The Administrator may establish one or
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more programs under the Plan to permit selected Grantees to
exchange an Award under the Plan for one or more other types of
Awards under the Plan on such terms and conditions as determined
by the Administrator from time to time.
g. Separate Programs. The Administrator may establish one or more
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separate programs under the Plan for the purpose of issuing
particular forms of Awards to one or more classes of Grantees on
such terms and conditions as determined by the Administrator from
time to time.
h. Early Exercise. The Award Agreement may, but need not, include a
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provision whereby the Grantee may elect at any time while an
Employee, Director or Consultant to exercise any part or all of
the Award prior to full vesting of the Award. Any unvested Shares
received pursuant to such exercise may be subject to a repurchase
right in favor of the Company or a Related Entity or to any other
restriction the Administrator determines to be appropriate.
i. Term of Award. The term of each Award shall be the term stated in
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the Award Agreement, provided, however, that the term shall be no
more than ten (10) years from the date of grant thereof. However,
in the case of an Incentive Stock Option granted to a Grantee
who, at the time the Option is granted, owns stock representing
more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the
Incentive Stock Option shall be five (5) years from the date of
grant thereof or such shorter term as may be provided in the
Award Agreement.
j. Transferability of Awards. Non-Qualified Stock Options shall be
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transferable (i) to the extent provided in the Award Agreement
and in a manner consistent with Section 260.140.41 of Title 10 of
the California Code of Regulations and (ii) by will, and by the
laws of descent and distribution. Incentive Stock Options and
other Awards may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or
by the laws of descent or distribution and may be exercised,
during the lifetime of the Grantee, only by the Grantee.
k. Time of Granting Awards. The date of grant of an Award shall for
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all purposes be the date on which the Administrator makes the
determination to grant such Award, or such other date as is
determined by the Administrator. Notice of the grant
determination shall be given to each Employee, Director or
Consultant to whom an Award is so granted within a reasonable
time after the date of such grant.
7. Award Exercise or Purchase Price, Consideration and Taxes.
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a. Exercise or Purchase Price. The exercise or purchase price, if
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any, for an Award shall be as follows:
i. In the case of an Incentive Stock Option:
(1) granted to an Employee who, at the time of the
grant of such Incentive Stock Option owns stock
representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall
be not less than one hundred ten percent (110%) of the
Fair Market Value per Share on the date of grant; or
(2) granted to any Employee other than an Employee
described in the preceding paragraph, the per Share
exercise price shall be not less than one hundred
percent (100%) of the Fair Market Value per Share on the
date of grant.
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ii. In the case of a Non-Qualified Stock Option:
(1) granted to a person who, at the time of the grant of such
Option, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be
not less than one hundred ten percent (110%) of the Fair
Market Value per Share on the date of grant; or
(2) granted to any person other than a person described in the
preceding paragraph, the per Share exercise price shall be not
less than eighty-five percent (85%) of the Fair Market Value
per Share on the date of grant.
iii. In the case of the sale of Shares:
(1) granted to a person who, at the time of the grant of such
Award, or at the time the purchase is consummated, owns stock
representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or
Subsidiary, the per Share purchase price shall be not less
than one hundred percent (100%) of the Fair Market Value per
Share on the date of grant; or
(2) granted to any person other than a person described in the
preceding paragraph, the per Share purchase price shall be not
less than eighty-five percent (85%) of the Fair Market Value
per Share on the date of grant.
iv. In the case of other Awards, such price as is determined by
the Administrator.
v. Notwithstanding the foregoing provisions of this Section 7(a),
in the case of an Award issued pursuant to Section 6(d), above, the
exercise or purchase price for the Award shall be determined in
accordance with the principles of Section 424(a) of the Code.
b. Consideration. Subject to Applicable Laws, the consideration to be paid for
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the Shares to be issued upon exercise or purchase of an Award including the
method of payment, shall be determined by the Administrator (and, in the
case of an Incentive Stock Option, shall be determined at the time of
grant). In addition to any other types of consideration the Administrator
may determine, the Administrator is authorized to accept as consideration
for Shares issued under the Plan the following; provided that the portion
of the consideration equal to the par value of the Shares must be paid in
cash or other legal consideration permitted by the Delaware General
Corporation Law:
i. cash;
ii. check;
iii. delivery of Grantee's promissory note with such recourse,
interest, security, and redemption provisions as the Administrator
determines as appropriate;
iv. if the exercise or purchase occurs on or after the Registration
Date, surrender of Shares or delivery of a properly executed form of
attestation of ownership of Shares as the Administrator may require
(including withholding of Shares otherwise deliverable upon exercise of
the Award) which have a Fair Market Value on the date of surrender or
attestation equal to the aggregate exercise price of the Shares as to
which said Award shall be exercised (but only to the extent that such
exercise of the Award would not result in an
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accounting compensation charge with respect to the Shares used to
pay the exercise price unless otherwise determined by the
Administrator);
v. with respect to Options, if the exercise occurs on or after
the Registration Date, payment through a broker-dealer sale and
remittance procedure pursuant to which the Grantee (A) shall
provide written instructions to a Company designated brokerage
firm to effect the immediate sale of some or all of the purchased
Shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the
aggregate exercise price payable for the purchased Shares and (B)
shall provide written directives to the Company to deliver the
certificates for the purchased Shares directly to such brokerage
firm in order to complete the sale transaction; or
vi. any combination of the foregoing methods of payment.
c. Taxes. No Shares shall be delivered under the Plan to any Grantee or
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other person until such Grantee or other person has made arrangements
acceptable to the Administrator for the satisfaction of any foreign,
federal, state, or local income and employment tax withholding
obligations, including, without limitation, obligations incident to
the receipt of Shares or the disqualifying disposition of Shares
received on exercise of an Incentive Stock Option. Upon exercise of an
Award the Company shall withhold or collect from Grantee an amount
sufficient to satisfy such tax obligations.
d. Reload Options. In the event the exercise price or tax withholding of
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an Option is satisfied by the Company or the Grantee's employer
withholding shares otherwise deliverable to the Grantee, the
Administrator may issue the Grantee an additional Option, with terms
identical to the Award Agreement under which the Option was exercised,
but at an exercise price as determined by the Administrator in
accordance with the Plan.
8. Exercise of Award.
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a. Procedure for Exercise; Rights as a Stockholder.
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i. Any Award granted hereunder shall be exercisable at such
times and under such conditions as determined by the
Administrator under the terms of the Plan and specified in the
Award Agreement but in the case of an Option, in no case at a
rate of less than twenty percent (20%) per year over five (5)
years from the date the Option is granted, subject to reasonable
conditions such as continued employment. Notwithstanding the
foregoing, in the case of an Option granted to an Officer,
Director or Consultant, the Award Agreement may provide that the
Option may become exercisable, subject to reasonable conditions
such as such Officer's, Director's or Consultant's Continuous
Service, at any time or during any period established in the
Award Agreement.
ii. An Award shall be deemed to be exercised when written notice
of such exercise has been given to the Company in accordance with
the terms of the Award by the person entitled to exercise the
Award and full payment for the Shares with respect to which the
Award is exercised, including, to the extent selected, use of the
broker-dealer sale and remittance procedure to pay the purchase
price as provided in Section 7(b)(v). Until the issuance (as
evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive
dividends or any other rights as a stockholder shall exist with
respect to Shares subject to an Award, notwithstanding the
exercise of an Option or other Award. No adjustment will be made
for a dividend or other right for which the record date is prior
to the date the stock certificate is issued, except as provided
in the Award Agreement or Section 11(a), below.
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b. Exercise of Award Following Termination of Continuous Service. In the
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event of termination of a Grantee's Continuous Service for any reason
other than Disability or death (but not in the event of a Grantee's
change of status from Employee to Consultant or from Consultant to
Employee), such Grantee may, but only during the Post-Termination
Exercise Period (but in no event later than the expiration date of the
term of such Award as set forth in the Award Agreement), exercise the
Award to the extent that the Grantee was entitled to exercise it at
the date of such termination or to such other extent as may be
determined by the Administrator. The Grantee's Award Agreement may
provide that upon the termination of the Grantee's Continuous Service
for Cause, the Grantee's right to exercise the Award shall terminate
concurrently with the termination of Grantee's Continuous Service. In
the event of a Grantee's change of status from Employee to Consultant,
an Employee's Incentive Stock Option shall convert automatically to a
Non-Qualified Stock Option on the day three (3) months and one day
following such change of status. To the extent that the Grantee is not
entitled to exercise the Award at the date of termination, or if the
Grantee does not exercise such Award to the extent so entitled within
the Post-Termination Exercise Period, the Award shall terminate.
c. Disability of Grantee. In the event of termination of a Grantee's
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Continuous Service as a result of his or her Disability, Grantee may,
but only within twelve (12) months from the date of such termination
(and in no event later than the expiration date of the term of such
Award as set forth in the Award Agreement), exercise the Award to the
extent that the Grantee was otherwise entitled to exercise it at the
date of such termination; provided, however, that if such Disability
is not a "disability" as such term is defined in Section 22(e)(3) of
the Code, in the case of an Incentive Stock Option such Incentive
Stock Option shall automatically convert to a Non-Qualified Stock
Option on the day three (3) months and one day following such
termination. To the extent that the Grantee is not entitled to
exercise the Award at the date of termination, or if Grantee does not
exercise such Award to the extent so entitled within the time
specified herein, the Award shall terminate.
d. Death of Grantee. In the event of a termination of the Grantee's
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Continuous Service as a result of his or her death, or in the event of
the death of the Grantee during the Post-Termination Exercise Period
or during the twelve (12) month period following the Grantee's
termination of Continuous Service as a result of his or her
Disability, the Grantee's estate or a person who acquired the right to
exercise the Award by bequest or inheritance may exercise the Award,
but only to the extent that the Grantee was entitled to exercise the
Award as of the date of termination, within twelve (12) months from
the date of death (but in no event later than the expiration of the
term of such Award as set forth in the Award Agreement). To the extent
that, at the time of death, the Grantee was not entitled to exercise
the Award, or if the Grantee's estate or a person who acquired the
right to exercise the Award by bequest or inheritance does not
exercise such Award to the extent so entitled within the time
specified herein, the Award shall terminate.
9. Conditions Upon Issuance of Shares.
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a. Shares shall not be issued pursuant to the exercise of an Award unless
the exercise of such Award and the issuance and delivery of such
Shares pursuant thereto shall comply with all Applicable Laws, and
shall be further subject to the approval of counsel for the Company
with respect to such compliance.
b. As a condition to the exercise of an Award, the Company may require
the person exercising such Award to represent and warrant at the time
of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute
such Shares if, in the opinion of counsel for the Company, such a
representation is required by any Applicable Laws.
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10. Repurchase Rights. If the provisions of an Award Agreement grant to
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the Company the right to repurchase Shares upon termination of the Grantee's
Continuous Service, the Award Agreement shall (or may, with respect to Awards
granted or issued to Officers, Directors or Consultants) provide that:
a. the right to repurchase must be exercised, if at all, within ninety
(90) days of the termination of the Grantee's Continuous Service (or
in the case of Shares issued upon exercise of Awards after the date
of termination of the Grantee's Continuous Service, within ninety
(90) days after the date of the Award exercise);
b. the consideration payable for the Shares upon exercise of such
repurchase right shall be made in cash or by cancellation of
purchase money indebtedness within the ninety (90) day periods
specified in Section 10(a);
c. the amount of such consideration shall (i) be equal to the original
purchase price paid by Grantee for each such Share; provided, that
the right to repurchase such Shares at the original purchase price
shall lapse at the rate of at least twenty percent (20%) of the
Shares subject to the Award per year over five (5) years from the
date the Award is granted (without respect to the date the Award was
exercised or became exercisable), and (ii) with respect to Shares,
other than Shares subject to repurchase at the original purchase
price pursuant to clause (i) above, not less than the Fair Market
Value of the Shares to be repurchased on the date of termination of
Grantee's Continuous Service; and
d. the right to repurchase Shares, other than the right to repurchase
Shares at the original purchase price pursuant to clause (i) of
Section 10(c), shall terminate on the Registration Date.
11. Adjustments Upon Changes in Capitalization or Corporate Transaction.
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a. Adjustments upon Changes in Capitalization. Subject to any required
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action by the stockholders of the Company, the number of Shares
covered by each outstanding Award, and the number of Shares which
have been authorized for issuance under the Plan but as to which no
Awards have yet been granted or which have been returned to the
Plan, the exercise or purchase price of each such outstanding Award,
as well as any other terms that the Administrator determines require
adjustment shall be proportionately adjusted for (i) any increase or
decrease in the number of issued Shares resulting from a stock
split, reverse stock split, stock dividend, combination or
reclassification of the Shares, or similar transaction affecting the
Shares, (ii) any other increase or decrease in the number of issued
Shares effected without receipt of consideration by the Company, or
(iii) as the Administrator may determine in its discretion, any
other transaction with respect to Common Stock to which Section
424(a) of the Code applies or a similar transaction; provided,
however that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Administrator
and its determination shall be final, binding and conclusive. Except
as the Administrator determines, 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
hereof shall be made with respect to, the number or price of Shares
subject to an Award.
b. Corporate Transaction.
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i. Termination of Award if Not Assumed. In the event of a
-----------------------------------
Corporate Transaction, each Award will terminate upon the
consummation of the Corporate Transaction, unless the Award is
assumed by the successor corporation or Parent thereof in
connection with the Corporate Transaction, including
affirmation of the Award by the Company in the event of a
Corporate Transaction as defined in Section 2(m)(iv) and
2(m)(v), above ("Assumed").
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ii. Acceleration of Award Upon Corporate Transaction.
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Except as provided otherwise in a an individual Award
Agreement, in the event of a Corporate Transaction and in
the event an Award which is at the time outstanding under
the Plan is not assumed by the successor corporation or the
Parent thereof, each such Award shall automatically become
fully vested and exercisable and be released from any
restrictions on transfer (other than transfer restrictions
applicable to Incentive Stock Options) and repurchase or
forfeiture rights, immediately prior to the specified
effective date of such Corporate Transaction, for all of the
Shares at the time represented by such Award.
12. Effective Date and Term of Plan. The Plan shall become effective
-------------------------------
upon the earlier to occur of its adoption by the Board or its approval by the
stockholders of the Company. It shall continue in effect for a term of ten (10)
years unless sooner terminated. Subject to Section 17, below, and Applicable
Laws, Awards may be granted under the Plan upon its becoming effective.
13. Amendment, Suspension or Termination of the Plan.
------------------------------------------------
a. The Board may at any time amend, suspend or terminate the Plan.
To the extent necessary to comply with Applicable Laws, the
Company shall obtain stockholder approval of any Plan amendment
in such a manner and to such a degree as required. 14
b. No Award may be granted during any suspension of the Plan or
after termination of the Plan.
c. Any amendment, suspension or termination of the Plan (including
termination of the Plan under Section 12, above) shall not affect
Awards already granted, and such Awards shall remain in full
force and effect as if the Plan had not been amended, suspended
or terminated, unless mutually agreed otherwise between the
Grantee and the Administrator, which agreement must be in writing
and signed by the Grantee and the Company.
14. Reservation of Shares.
---------------------
a. The Company, during the term of the Plan, will at all times
reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
b. The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by
the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares
as to which such requisite authority shall not have been
obtained.
15. No Effect on Terms of Employment/Consulting Relationship. The
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Plan shall not confer upon any Grantee any right with respect to the Grantee's
Continuous Service, nor shall it interfere in any way with his or her right or
the Company's right to terminate the Grantee's Continuous Service at any time,
with or without Cause and with or without notice. The Company's ability to
terminate the employment of a Grantee who is employed at will is in no way
affected by its determination that the Grantee's Continuous Service has been
terminated for Cause for the purposes of this Plan.
16. No Effect on Retirement and Other Benefit Plans. Except as
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specifically provided in a retirement or other benefit plan of the Company or a
Related Entity, Awards shall not be deemed compensation for purposes of
computing benefits or contributions under any retirement plan of the Company or
a Related Entity, and shall not affect any benefits under any other benefit plan
of any kind or any benefit plan subsequently instituted under which the
availability or amount of benefits is related to level of compensation. The Plan
is not a "Retirement Plan" or "Welfare Plan" under the Employee Retirement
Income Security Act of 1974, as amended.
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17. Stockholder Approval. Continuance of the Plan shall be subject to
-------------------
approval by the stockholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such stockholder approval shall be obtained
in the degree and manner required under Applicable Laws. Any Award exercised
before stockholder approval is obtained shall be rescinded if stockholder
approval is not obtained within the time prescribed, and Shares issued on the
exercise of any such Award shall not be counted in determining whether
stockholder approval is obtained.
18. Information to Grantees. The Company shall provide to each
-----------------------
Grantee, during the period for which such Grantee has one or more Awards
outstanding, copies of financial statements at least annually.
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