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Exhibit 10.1
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EARTHWATCH INCORPORATED
1995 STOCK OPTION/STOCK ISSUANCE PLAN
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ARTICLE ONE
GENERAL PROVISIONS
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I. PURPOSES OF THE PLAN
This 1995 Stock Option/Stock Issuance Plan is intended to promote the
interests of EarthWatch, Incorporated, a Delaware corporation, by providing a
method whereby eligible individuals who provide valuable services to the
Corporation (or any Parent or Subsidiary) may be offered incentives and rewards
which will encourage them to acquire a proprietary interest, or otherwise
increase their proprietary interest, in the Corporation and continue to render
services to the Corporation (or any Parent or Subsidiary).
II. DEFINITIONS
For the purposes of this Plan, the following definitions shall be in effect:
A. Board shall mean the Corporation's Board of Directors.
B. Code shall mean the Internal Revenue Code of 1986, as amended.
C. Committee(s) shall mean a committee of two (2) or more Board members
appointed by the Board to exercise one or more administrative
functions under the Plan.
D. Common Stock shall mean the Corporation's common stock.
E. Corporate Transaction shall mean either of the following shareholder
approved transactions to which the Corporation is a party:
1. a merger or consolidation in which securities possessing more
than fifty percent (50%) of the total combined voting power of
the Corporation's outstanding securities are transferred to a
person or persons different from those who held those securities
immediately prior to such transaction, or
2. the sale, transfer or other disposition of all or substantially
all of the Corporation's assets in complete liquidation or
dissolution of the Corporation.
F. Corporation shall mean EarthWatch Incorporated, a Delaware
corporation.
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G. Disability shall mean the inability of an individual to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment and shall be determined by the Plan
Administrator on the basis of such medical evidence as the Plan
Administrator deems warranted under the circumstances. Disability
shall be deemed to constitute Permanent Disability in the event that
such Disability is expected to result in death or has lasted or can be
expected to last for a continuous period of not less than twelve (12)
months.
H. Employee shall mean an individual who is in the employ of the
Corporation or any Parent or Subsidiary, subject to the control and
direction of the employer entity as to both the work to be performed
and the manner and method of performance.
I. Exchange Act shall mean the Securities Exchange Act of 1934, as
amended.
J. Exercise Date shall mean the date on which the Corporation shall have
received written notice of the option exercise.
K. Fair Market Value per share of Common Stock on any relevant date under
the Plan shall be the value determined in accordance with the
following provisions:
1. If the Common Stock is not at the time listed or admitted to
trading on any Stock Exchange but is traded on the Nasdaq
National Market, the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question,
as such price is reported by the National Association of
Securities Dealers through the Nasdaq National Market or any
successor system. If there is no closing selling price for the
Common Stock on the date in question, then the Fair Market Value
shall be the closing selling price on the last preceding date for
which such quotation exists.
2. If the Common Stock is at the time listed or admitted to trading
on any Stock Exchange, then the Fair Market Value shall be the
closing selling price per share of Common Stock on the date in
question on the Stock Exchange determined by the Plan
Administrator to be the primary market for the Common Stock, as
such price is officially quoted in the composite tape of
transactions on such exchange. If there is no closing selling
price for the Common Stock on the date in question, then the Fair
Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
3. If the Common Stock is at the time neither listed nor admitted to
trading on any Stock Exchange nor traded on the Nasdaq National
Market, then such Fair Market Value shall be determined by the
Plan Administrator after taking into account such factors as the
Plan Administrator shall deem appropriate.
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L. Incentive Option shall mean a stock option which satisfies the
requirements of Code Section 422.
M. Non-Statutory Option shall mean a stock option not intended to meet
the requirements of Code Section 422.
N. Optionee shall mean any person to whom an option is granted under the
Option Grant Program in effect under the Plan.
O. Parent shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided
each corporation in the unbroken chain (other than the Corporation)
owns, at the time of the determination, stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
P. Participant shall mean any person who receives a direct issuance of
Common Stock under the Stock Issuance Program in effect under the
Plan.
Q. Plan shall mean the Corporation's 1995 Stock Option/Stock Issuance
Plan, as set forth in this document.
R. Plan Administrator shall mean either the Board or the Committee(s), to
the extent the Committee(s) is at the time responsible for the
administration of the Plan in accordance with Section IV of Article
One.
S. Service shall mean the provision of services to the Corporation or any
Parent or Subsidiary by an individual in the capacity of an Employee,
a non-employee member of the board of directors or a consultant.
T. Stock Exchange shall mean either the American Stock Exchange or the
New York Stock Exchange.
U. Subsidiary shall mean each corporation (other than the Corporation) in
an unbroken chain of corporations beginning with the Corporation,
provided each such corporation (other than the last corporation) in
the unbroken chain owns, at the time of the determination, stock
possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other corporations in such
chain.
V. 10% Shareholder shall mean the owner of stock (as determined under
Code Section 424(d)) possessing ten percent (10%) or more of the total
combined voting power of all classes of stock of the Corporation or
any Parent or Subsidiary.
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III. STRUCTURE OF THE PLAN
A. The Plan shall be divided into two (2) separate components: the Option
Grant Program specified in Article Two and the Stock Issuance Program
specified in Article Three. Under the Option Grant Program, eligible
individuals may, at the discretion of the Plan Administrator, be
granted options to purchase shares of Common Stock in accordance with
the provisions of Article Two. Under the Stock Issuance Program,
eligible individuals may be issued shares of Common Stock directly,
either through the immediate purchase of such shares at a price not
less than eighty-five percent (85%) of the fair market value of the
shares at the time of issuance or as a bonus for services rendered the
Corporation without any cash payment required of the recipient.
B. The provisions of Articles One and Four of the Plan shall apply to
both the Option Grant Program and the Stock Issuance Program and shall
accordingly govern the interests of all individuals under the Plan.
IV. ADMINISTRATION OF THE PLAN
A. The Plan shall be administered by the Board. However, any or all
administrative functions otherwise exercisable by the Board may be
delegated to one or more Committees. Members of the Committee(s) shall
serve for such period of time as the Board may determine and shall be
subject to removal by the Board at any time. The Board may also at any
time terminate the functions of the Committee(s) and reassume all
powers and authority previously delegated to the Committee(s).
B. The Plan Administrator shall have full power and authority (subject to
the provisions of the Plan) to establish such rules and regulations as
it may deem appropriate for proper administration of the Plan and to
make such determinations under, and issue such interpretations of, the
Plan and any outstanding options as it may deem necessary or
advisable. Decisions of the Plan Administrator shall be final and
binding on all parties who have an interest in the Plan or any
outstanding option.
V. OPTION GRANTS AND SHARE ISSUANCES
A. The persons eligible to participate in the Option Grant Program and
the Stock Issuance Program shall be limited to the following:
1. Employees,
2. non-employee members of the Board or the non-employee members of
the board of directors of any Parent or Subsidiary, and
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3. consultants who provide valuable services to the Corporation (or
any Parent or Subsidiary).
B. The Plan Administrator shall have full authority to determine, (i)
with respect to the option grants under the Plan, which eligible
individuals are to receive option grants, the number of shares to be
covered by each such grant, the status of the granted option as either
an Incentive Option or a Non-Statutory Option, the time or times at
which each option is to become exercisable and the maximum term for
which the option is to remain outstanding, and (ii) with respect to
share issuances under the Stock Issuance Program, the number of shares
to be issued to each Participant, the vesting schedule (if any) to be
applicable to the issued shares and the consideration to be paid by
the Participant for such shares.
C. The Plan Administrator shall have the absolute discretion either to
grant options in accordance with Article Two or to effect share
issuances in accordance with Article Three.
VI. STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares of the Corporation's
authorized but unissued or reacquired Common Stock. The maximum number
of shares which may be issued over the term of the Plan shall not
exceed 2,200,000 shares, subject to adjustment from time to time in
accordance with the provisions Section VI.C of this Article One.
B. Shares subject to outstanding options shall be available for
subsequent issuance under the Plan to the extent (i) the options
expire or terminate for any reason prior to exercise in full or (ii)
the options are canceled in accordance with the cancellation-regrant
provisions of Section 4 of Article Two. All shares issued under the
Plan, whether or not those shares are subsequently repurchased by the
Corporation pursuant to its repurchase rights under the Plan, shall
reduce on a share-for-share basis the number of shares of Common Stock
available for issuance under the Plan.
C. to the Common Stock issuable under the Plan by reason of any stock
split, stock dividend, recapitalization, combination of shares,
exchange of shares or other change affecting the outstanding Common
Stock as a class without the Corporation's receipt of consideration,
appropriate adjustments shall be made to (i) the maximum number and/or
class of securities issuable under the Plan and (ii) the number and/or
class of securities and the exercise price per share in effect under
each outstanding option in order to prevent the dilution or
enlargement of benefits thereunder. The adjustments determined by the
Plan Administrator shall be final, binding and conclusive. In no event
shall any adjustments be made for the conversion of one or more
outstanding series of the Corporation's preferred stock into shares of
the Common Stock.
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ARTICLE TWO
OPTION GRANT PROGRAM
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I. TERMS AND CONDITIONS OF OPTIONS
II. Options granted pursuant to the Plan shall be authorized by action of the
Plan Administrator and may, at the Plan Administrator's discretion, be
either Incentive Options or Non-Statutory Options. Each granted option
shall be evidenced by one or more instruments in the form approved by the
Plan Administrator, provided, however, that each such instrument shall
comply with the terms and conditions specified below. Each instrument
evidencing an Incentive Option shall, in addition, be subject to the
applicable provisions of Section II of this Article Two.
A. Exercise Price.
1. The exercise price per share shall be fixed by the Plan
Administrator. In no event, however, shall the exercise price per
share be less than eighty-five percent (85%) of the Fair Market
Value per share of Common Stock on the date of the option grant.
2. If the individual to whom the option is granted is a 10%
Shareholder, then the exercise price per share shall not be less
than one hundred ten percent (110%) of the Fair Market Value per
share of Common Stock on the grant date.
3. The exercise price shall become immediately due upon exercise of
the option and shall, subject to the provisions of Section I of
Article Four and the agreement evidencing the grant, be payable
in cash or check made payable to the Corporation. Should the
Corporation's outstanding Common Stock be registered under
Section 12(g) of the Exchange Act at the time the option is
exercised, then the exercise price may also be paid as follows:
(i) in shares of Common Stock held by the Optionee for the
requisite period necessary to avoid a charge to the
Corporation's earnings for financial reporting purposes and
valued at Fair Market Value on the Exercise Date, or
(ii) through a special sale and remittance procedure pursuant to
which the Optionee shall concurrently provide irrevocable
written instructions (a) to a Corporation-designated
brokerage firm to effect the immediate sale of the purchased
shares and remit to the Corporation, out of the sale
proceeds available on the settlement
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date, sufficient funds to cover the aggregate exercise price
payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes
required to be withheld by the Corporation by reason of such
purchase and (b) to the Corporation to deliver the
certificates for the purchased shares directly to such
brokerage firm in order to complete the sale transaction.
Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.
B. Term and Exercise of Options.
Each option granted under the Plan shall be exercisable at such time or
times, during such period and for such number of shares as shall be
determined by the Plan Administrator and set forth in the stock option
agreement. However, no option shall have a term in excess of ten (10) years
measured from the grant date. The option shall be exercisable during the
Optionee's lifetime only by the Optionee and shall not be assignable or
transferable other than by will or by the laws of descent and distribution
following the Optionee's death.
C. Effect of Termination of Service.
1. Except to the extent otherwise provided pursuant to subsection
C.2 below, the following provisions shall govern the exercise
period applicable to any options held by the Optionee at the time
of cessation of Service or death:
(i) Should the Optionee cease to remain in Service for any
reason other than death or Disability, then the period
during which each outstanding option held by such Optionee
is to remain exercisable shall be limited to the three (3)-
month period following the date of such cessation of
Service.
(ii) Should such Service terminate by reason of Disability, then
the period during which each outstanding option held by the
Optionee is to remain exercisable shall be limited to the
six (6)-month period following the date of such cessation
of Service. However, should such Disability be deemed to
constitute Permanent Disability, then the period during
which each outstanding option held by the Optionee is to
remain exercisable shall be extended by an additional six
(6) months so that the exercise period shall be limited to
the twelve (12)-month period following the date of the
Optionee's cessation of Service by reason of such Permanent
Disability.
(iii) Should the Optionee die while holding one or more
outstanding options, then the period during which each such
option is to remain exercisable shall be limited to the
twelve (12)-month period following the date of the
Optionee's death. During such limited
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period, the option may be exercised by the personal
representative of the Optionee's estate or by the person or
persons to whom the option is transferred pursuant to the
Optionee's will or in accordance with the laws of descent
and distribution.
(iv) Under no circumstances, however, shall any such option be
exercisable after the specified expiration date of the
option term.
(v) During the applicable post-Service exercise period, the
option may not be exercised in the aggregate for more than
the number of vested shares for which the option is
exercisable on the date of the Optionee's cessation of
Service. Upon the expiration of the applicable exercise
period or (if earlier) upon the expiration of the option
term, the option shall terminate and cease to be exercisable
for any vested shares for which the option has not been
exercised. However, the option shall, immediately upon the
Optionee's cessation of Service, terminate and cease to be
outstanding with respect to any option shares for which the
option is not at that time exercisable or in which the
Optionee is not otherwise at that time vested.
2. The Plan Administrator shall have full power and authority to
extend the period of time for which the option is to remain
exercisable following the Optionee's cessation of Service or
death from the limited period in effect under subsection C.1 of
this Article Two to such greater period of time as the Plan
Administrator shall deem appropriate; provided, that in no event
shall such option be exercisable after the specified expiration
date of the option term.
D. Shareholder Rights.
An Optionee shall have no shareholder rights with respect to the shares
subject to the option until such individual shall have exercised the option
and paid the exercise price.
E. Unvested Shares.
The Plan Administrator shall have the discretion to authorize the issuance
of unvested shares of Common Stock under the Plan. Should the Optionee
cease Service while holding such unvested shares, the Corporation shall
have the right to repurchase, at the exercise price paid per share, all or
(at the discretion of the Corporation and with the consent of the Optionee)
any of those unvested shares. The terms and conditions upon which such
repurchase right shall be exercisable (including the period and procedure
for exercise and the appropriate vesting schedule for the purchased shares)
shall be established by the Plan Administrator and set forth in the
agreement evidencing such repurchase right. In no event, however, may the
Plan Administrator impose a vesting schedule upon any option granted under
the Plan or any shares of Common Stock subject to the option which is more
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restrictive than twenty percent (20%) per year vesting, beginning one (1)
year after the grant date. All outstanding repurchase rights under the Plan
shall terminate automatically upon the occurrence of any Corporate
Transaction, except to the extent the repurchase rights are expressly
assigned to the successor corporation (or parent thereof) in connection
with the Corporate Transaction.
F. First Refusal Rights.
Until such time as the Corporation's outstanding shares of Common Stock are
first registered under Section 12(g) of the Exchange Act, the Corporation
shall have the right of first refusal with respect to any proposed sale or
other disposition by the Optionee (or any successor in interest by reason
of purchase, gift or other transfer) of any shares of Common Stock issued
under the Plan. Such right of first refusal shall be exercisable in
accordance with the terms and conditions established by the Plan
Administrator and set forth in the agreement evidencing such right.
III. INCENTIVE OPTIONS
The terms and conditions specified below shall be applicable to all Incentive
Options granted under the Plan. Except as modified by the provisions of this
Section II, all the provisions of Articles One, Two and Four shall be applicable
to Incentive Options. Incentive Options may only be granted to individuals who
are Employees. Options which are specifically designated as Non-Statutory shall
not be subject to such terms and conditions.
A. Exercise Price.
The exercise price per share of the Common Stock subject to an Incentive
Option shall in no event be less than one hundred percent (100%) of the
Fair Market Value per share of Common Stock on the date of grant.
B. Dollar Limitation.
The aggregate Fair Market Value of the Common Stock (determined as of the
respective date or dates of grant) for which one (1) or more options
granted to any Employee under this Plan (or any other option plan of the
Corporation or any Parent or Subsidiary) may for the first time become
exercisable as Incentive Options during any one (1) calendar year shall not
exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent
the Employee holds two (2) or more such options which become exercisable
for the first time in the same calendar year, the foregoing limitation on
the exercisability of such options as Incentive Options shall be applied on
the basis of the order in which such options are granted. Should the
applicable One Hundred Thousand Dollar ($100,000) limitation in fact be
exceeded in any calendar year, then the option shall nevertheless become
exercisable for the excess number of shares in such calendar year as a Non-
Statutory Option.
C. 10% Shareholder.
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If any individual to whom an Incentive Option is granted is a 10%
Shareholder, then the option term shall not exceed five (5) years measured
from the grant date.
IV. CORPORATE TRANSACTION
A. Upon the occurrence of a Corporate Transaction, each option at the
time outstanding under the Plan shall terminate and cease to be
exercisable, except to the extent assumed by the successor corporation
or parent thereof.
B. Each outstanding option which is assumed in connection with a
Corporate Transaction or is otherwise to remain outstanding shall be
appropriately adjusted, immediately after such Corporate Transaction,
to apply and pertain to the number and class of securities which would
have been issuable to the Optionee in the consummation of such
Corporate Transaction, had the option been exercised immediately prior
to such Corporate Transaction. Appropriate adjustments shall also be
made to (i) the class and number of securities available for issuance
under the Plan following the consummation of such Corporate
Transaction, and (ii) the exercise price payable per share, provided
the aggregate exercise price payable for such securities shall remain
the same.
C. The grant of options under this Plan shall in no way affect the right
of the Corporation to adjust, reclassify, reorganize or otherwise
change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its
business or assets.
V. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any time and from
time to time, with the consent of the affected option holders, the cancellation
of any or all outstanding options under the Plan and to grant in substitution
therefor new options under the Plan covering the same or different numbers of
shares of Common Stock but with an exercise price per share not less than (i)
one hundred percent (100%) of the Fair Market Value per share of Common Stock on
the new grant date in the case of a grant of an Incentive Option, (ii) one
hundred ten percent (110%) of such Fair Market Value in the case of an option
grant to a 10% Shareholder or (iii) eighty-five percent (85%) of such Fair
Market Value in the case of all other grants.
ARTICLE THREE
STOCK ISSUANCE PROGRAM
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I. TERMS AND CONDITIONS OF STOCK ISSUANCES
Shares may be issued under the Stock Issuance Program through direct and
immediate issuances without any intervening stock option grants. Each such stock
issuance shall be evidenced by a Restricted Stock Purchase Agreement ("Purchase
Agreement") which complies with each of the terms and conditions of this Article
Three.
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A. Issue Price
1. The purchase price per share shall be fixed by the Plan
Administrator, but in no event shall it be less than eighty-five
percent (85%) of the Fair Market Value per share of Common Stock
on the date of issuance.
2. If the individual to whom a share issuance is made is a 10%
Shareholder, then the purchase price per share shall not be less
than one hundred ten percent (110%) of the Fair Market Value per
share of Common Stock on the issuance date.
3. Shares shall be issued under the Plan for such consideration as
the Plan Administrator shall from time to time determine,
provided that, except as set forth in Section I of Article Four,
in no event shall shares be issued for consideration other than
(i) cash or check made payable to the Corporation, or
(ii) past services rendered to the Corporation or any Parent or
Subsidiary.
B. Vesting Provisions
1. Shares of Common Stock issued under the Stock Issuance Program
may, in the absolute discretion of the Plan Administrator, be
fully and immediately vested upon issuance or may vest in one or
more installments over the Participant's period of Service. The
elements of the vesting schedule applicable to any unvested
shares of Common Stock issued under the Stock Issuance Program,
namely:
(i) the Service period to be completed by the Participant or
the performance objectives to be achieved by the
Corporation,
(ii) the number of installments in which the shares are to vest,
(iii) the interval or intervals (if any) which are to lapse
between installments, and
(iv) the effect which death, Disability or other event
designated by the Plan Administrator is to have upon the
vesting schedule,
(v) shall be determined by the Plan Administrator and
incorporated into the Purchase Agreement executed by the
Corporation and the Participant at the time such unvested
shares are issued. In no event, however, may the Plan
Administrator impose a vesting schedule upon any stock
issuance effected under the Stock Issuance Program
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which is more restrictive than twenty percent (20%) per year
annual vesting, beginning one (1) year after the issuance date.
2. The Participant shall have full shareholder rights with respect
to any shares of Common Stock issued to him or her under the
Plan, whether or not his or her interest in those shares is
vested. Accordingly, the Participant shall have the right to vote
such shares and to receive any regular cash dividends paid on
such shares. Any new, additional or different shares of stock or
other property (including money paid other than as a regular cash
dividend) which the Participant may have the right to receive
with respect to his unvested shares by reason of any stock
dividend, stock split, recapitalization, combination of shares,
exchange of shares or other change affecting the outstanding
Common Stock as a class without the Corporation's receipt of
consideration or by reason of any Corporate Transaction shall be
issued subject to (i) the same vesting requirements applicable to
the Participant's unvested shares and (ii) such escrow
arrangements as the Plan Administrator shall deem appropriate.
3. Should the Participant cease to remain in Service while holding
one or more unvested shares of Common Stock under the Stock
Issuance Program, then those shares shall be immediately
surrendered to the Corporation for cancellation, and the
Participant shall have no further shareholder rights with respect
to those shares. To the extent the surrendered shares were
previously issued to the Participant for consideration paid in
cash or cash equivalent (including the Participant's purchase-
money promissory note), the Corporation shall repay to the
Participant the cash consideration paid for the surrendered
shares and shall cancel the unpaid principal balance of any
outstanding purchase-money note of the Participant attributable
to such surrendered shares.
4. The Plan Administrator may in its discretion elect to waive the
surrender and cancellation of one or more unvested shares of
Common Stock (or other assets attributable thereto) which would
otherwise occur upon the non-completion of the vesting schedule
applicable to such shares. Such waiver shall result in the
immediate vesting of the Participant's interest in the shares of
Common Stock as to which the waiver applies. Such waiver may be
effected at any time, whether before or after the Participant's
cessation of Service or the attainment or non-attainment of the
applicable performance objectives.
C. First Refusal Rights.
Until such time as the Corporation's outstanding shares of Common
Stock are first registered under Section 12(g) of the Exchange Act,
the Corporation shall have a right of first refusal with respect to
any proposed disposition by the Participant (or
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any successor in interest by reason of purchase, gift or other
transfer) of any shares of Common Stock issued under the Plan. Such
right of first refusal shall be exercisable in accordance with the
terms and conditions established by the Plan Administrator and set
forth in the agreement evidencing such right.
II. SHARE ESCROW/TRANSFER RESTRICTIONS
A. Share Escrow.
Unvested shares may, in the Plan Administrator's discretion, be held in
escrow by the Corporation until the Participant's interest in such shares
vests or may be issued) directly to the Participant with restrictive
legends on the certificates evidencing such unvested shares. To the extent
an escrow arrangement is utilized, the unvested shares and any securities
or other assets issued with respect to such shares (other than regular cash
dividends) shall be delivered in escrow to the Corporation to be held until
the Participant's interest in such shares (or other securities or assets)
vests. Alternatively, if the unvested shares are issued directly to the
Participant, the restrictive legend on the certificates for such shares
shall read substantially as follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE UNVESTED AND ARE
ACCORDINGLY SUBJECT TO (I) CERTAIN TRANSFER RESTRICTIONS AND (II)
CANCELLATION OR REPURCHASE IN THE EVENT THE REGISTERED HOLDER (OR
HIS/HER PREDECESSOR IN INTEREST) CEASES TO REMAIN IN THE CORPORATION'S
SERVICE. SUCH TRANSFER RESTRICTIONS AND THE TERMS AND CONDITIONS OF
SUCH CANCELLATION OR REPURCHASE ARE SET FORTH IN A STOCK PURCHASE
AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED HOLDER (OR
HIS/HER PREDECESSOR IN INTEREST) DATED , 199 , A COPY OF WHICH IS
ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION."
B. Transfer Restrictions.
The Participant shall have no right to transfer any unvested shares of
Common Stock issued to him or her under the Stock Issuance Program. For
purposes of this restriction, the term "transfer" shall include (without
limitation) any sale, pledge, assignment, encumbrance, gift, or other
disposition of such shares, whether voluntary or involuntary. Upon any such
attempted transfer, the unvested shares shall immediately be canceled in
accordance with substantially the same procedure in effect under Section
I.B.3 of this Article Three, and neither the Participant nor the proposed
transferee shall have any rights with respect to such canceled shares.
However, the Participant shall have the right to make a gift of unvested
shares acquired under the Stock Purchase Program to his or her spouse or
issue, including adopted children, or to a trust established for such
spouse or issue, provided the donee of such shares delivers to the
Corporation a written agreement to be bound by all the provisions of the
Stock Issuance Program and the Purchase Agreement applicable to the gifted
shares.
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III. CORPORATE TRANSACTION
All of the Corporation's outstanding repurchase rights under this Article Three
shall automatically terminate upon the occurrence of a Corporate Transaction,
except to the extent the Corporation's outstanding repurchase rights are to be
assigned to the successor corporation (or parent thereof) in connection with the
Corporate Transaction.
ARTICLE FOUR
MISCELLANEOUS
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I. LOANS
A. The Plan Administrator may assist any Optionee or Participant in the
exercise of one or more options granted to the Optionee under Article
Two or the purchase of one or more shares issued to the Participant
under Article Three by:
1. authorizing the extension of a loan from the Corporation to the
Optionee or Participant, or
2. permitting the Optionee or Participant to pay the exercise price
or purchase price in installments over a period of years.
B. The terms of any loan or installment method of payment (including the
interest rate and terms of repayment) shall be established by the Plan
Administrator in its sole discretion. Loans or installment payments
may be authorized with or without security or collateral. However, any
loan made to a consultant or other non-employee advisor must be
secured by property other than the purchased shares of Common Stock.
In all events, the maximum credit available to each Optionee or
Participant may not exceed the sum of (i) the aggregate exercise price
or purchase price payable for the purchased shares plus (ii) any
Federal, state and local income and employment tax liability incurred
by the Optionee or Participant in connection with such exercise or
purchase.
C. The Plan Administrator may, in its absolute discretion, determine that
one or more loans extended under this Section I shall be subject to
forgiveness by the Corporation in whole or in part upon such terms and
conditions as the Plan Administrator may in its discretion deem
appropriate.
II. NO EMPLOYMENT OR SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee or the Participant any right
to continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation (or any Parent or
Subsidiary) or of the Optionee or the Participant, which rights are hereby
expressly reserved by each, to terminate the Service of the Optionee or
Participant at any time for any reason, with or without cause.
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III. AMENDMENT OF THE PLAN AND AWARDS
A. The Board shall have complete and exclusive power and authority to
amend or modify the Plan in any or all respects whatsoever. However,
no such amendment or modification shall adversely affect the rights
and obligations of an Optionee with respect to options at the time
outstanding under the Plan, nor adversely affect the rights of any
Participant with respect to Common Stock issued under the Plan prior
to such action, unless the Optionee or Participant consents to such
amendment. In addition, the Board shall not, without the approval of
the Corporation's shareholders, (i) increase the maximum number of
shares issuable under the Plan, except for permissible adjustments
under Section VI.C of Article One, (ii) materially modify the
eligibility requirements for participation in the Plan or (iii)
otherwise materially increase the benefits accruing to individuals who
participate in the Plan.
B. Options to purchase shares of Common Stock may be granted under
Article Two and shares of Common Stock may be issued under Article
Three that are in both instances in excess of the number of shares
then available for issuance under the Plan, provided any excess shares
actually issued are held in escrow until there is obtained shareholder
approval of an amendment sufficiently increasing the number of shares
of Common Stock available for issuance under the Plan. If such
shareholder approval is not obtained within twelve (12) months after
the date the initial excess issuances are made, whether as stock
option grants or direct stock issuances, then (i) any unexercised
options representing such excess shall terminate and cease to be
exercisable and (ii) the Corporation shall promptly refund to the
Optionees and Participants the exercise or purchase price paid for any
excess shares issued under the Plan and held in escrow, together with
interest (at the applicable Short-Term Federal Rate) for the period
the shares were held in escrow, and such shares shall thereupon be
automatically canceled and cease to be outstanding.
IV. EFFECTIVE DATE AND TERM OF PLAN
A. The Plan shall become effective when adopted by the Board, but no
option granted under the Plan shall become exercisable, and no shares
shall be issuable under the Stock Issuance Program, unless and until
the Plan shall have been approved by the Corporation's shareholders.
If such shareholder approval is not obtained within twelve (12) months
after the date of the Board's adoption of the Plan, then all options
previously granted under the Plan shall terminate, and no further
options shall be granted and no shares shall be issued under the Stock
Issuance Program. Subject to such limitation, the Plan Administrator
may grant options and issue shares under the Plan at any time after
the effective date and before the date fixed herein for termination of
the Plan.
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B. The Plan shall terminate upon the earliest of (i) the expiration of
the ten (10)-year period measured from the date the Plan is adopted
by the Board, (ii) the date on which all shares available for
issuance under the Plan shall have been issued or (iii) the
termination of all outstanding options under Section III of Article
Two. Each option and unvested share issuance outstanding under the
Plan at such time shall continue to have full force and effect in
accordance with the provisions of the agreements evidencing that
option or share issuance.
V. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares of Common
Stock under the Plan shall be used for general corporate purposes.
VI. WITHHOLDING
The Corporation's obligation to deliver shares upon the exercise of any options
granted under Article Two or upon the purchase of any shares issued under
Article Three shall be subject to the satisfaction of all applicable Federal,
state and local income and employment tax withholding requirements.
VII. REGULATORY APPROVALS
The implementation of the Plan, the granting of any options under Article Two
and the issuance of Common Stock upon (i) the exercise of any option or (ii) a
direct issuance under Article Three shall be subject to the Corporation's
procurement of all approvals and permits required by regulatory authorities
having jurisdiction over the Plan, the options granted under it and the Common
Stock issued pursuant to it.
VIII. FINANCIAL REPORTS
The Corporation shall deliver a balance sheet and an income statement at least
annually to each Optionee holding an outstanding option under the Plan and to
each Participant holding a right to purchase stock under the Plan, unless the
Optionee or Participant is a key employee whose duties in connection with the
Corporation assure such individual access to equivalent information.
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