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Exhibit 10.29
OPLINK COMMUNICATIONS, INC.
1998 STOCK PLAN
SECTION 1. PURPOSE
The purpose of the Plan is to offer selected employees, directors and
consultants an opportunity to acquire a proprietary interest in the success
of the Company, to encourage such selected persons to remain in the employ of
the Company and to attract new employees by allowing such persons to purchase
Shares of the Company's Common Stock. The Plan provides for the grant of
Options to purchase Shares. Options granted under the Plan may be Incentive
Stock Options or Nonstatutory Stock Options. Stock Purchase Rights may also
be granted under the Plan.
SECTION 2. DEFINITIONS
(a) "BOARD" means the Board of Directors of the Company.
(b) "CODE" means the Internal Revenue Code of 1986, as amended.
(c) "COMMITTEE" means a committee of the Board of Directors which is
authorized to administer the Plan under Section 4 herein. In the event the
Company becomes subject to Section 16 of the Exchange Act, the Committee
shall have a membership composition which will enable the Plan to qualify
under Rule 16b-3 with regard to Options granted to persons who are subject to
Section 16 of the Exchange Act.
(d) "COMMON STOCK" means the Common Stock of the Company.
(e) "COMPANY" means Oplink Communications, Inc.
(f) "CONSULTANT" means any person, including an advisor, who is engaged
by the Company or Subsidiary to render consulting or advisory services and is
compensated for such services.
(g) "CONTINUOUS STATUS AS AN EMPLOYEE" means the absence of any
interruption or termination of the employment relationship by the Company or
any Subsidiary. Continuous Status as an Employee shall not be considered
interrupted in the case of: sick leave, military leave or any other leave of
absence approved by the Board, provided that such leave is for a period of
not more than ninety (90) days, unless reemployment upon the expiration of
such leave is guaranteed by contract or statute, or unless provided otherwise
pursuant to Company policy adopted from time to time; or in the case of
transfers between locations of the Company or between the Company, its
Subsidiaries or its successor.
(h) "EMPLOYEE" means any person, including officers and directors,
employed by the Company or Subsidiary of the Company. The payment of a
director's fee by the Company shall not be sufficient to constitute
"employment" by the Company.
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(i) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
(j) "FAIR MARKET VALUE" means, as of any date, the value of Common Stock
determined as follows:
(i) If the Common Stock is listed on any established stock exchange
or a national market system including without limitation the National Market
System of the National Association of Securities Dealers, Inc. Automated
Quotation ("Nasdaq") System, its Fair Market Value shall be the closing sales
price for such stock (or the closing bid, if no sales were reported, as
quoted on such system or exchange for the last market trading day prior to
the time of determination) as reported in the Wall Street Journal or such
other source as the Administrator deems reliable;
(ii) If the Common Stock is quoted on the Nasdaq System (but not on
the Nasdaq National Market thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high and low asked prices for the Common Stock;
or
(iii) in the absence of an established market for the Common Stock,
the Fair Market Value thereof shall be determined in good faith by the Board.
(k) "INCENTIVE STOCK OPTION" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
(l) "NONSTATUTORY STOCK OPTION" means an Option not intended to qualify
as an Incentive Stock Option.
(m) "OPTION" means a stock option granted pursuant to the Plan that
entitles the holder to purchase Shares.
(n) "OPTIONED STOCK" means the Common Stock subject to an Option.
(o) "OPTIONEE" means an Employee or Consultant who receives an Option.
(p) "PLAN" means the Oplink Communications, Inc. 1998 Stock Plan, as
amended from time to time.
(q) "PURCHASER" means an Employee or Consultant who exercises a Stock
Purchase Right.
(r) "RESTRICTED STOCK" means Shares purchased pursuant to the grant of a
Stock Purchase Right.
(s) "SHARE" means a share of the Common Stock, as adjusted in accordance
with Section 13 of the Plan.
(t) "STOCK PURCHASE RIGHT" means the right to purchase Restricted Stock
granted pursuant to Section 11 of the Plan.
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(u) "SUBSIDIARY" means any corporation of which the Company and/or one
or more other Subsidiaries own not less than 50 percent of the total combined
voting power of all classes of outstanding stock of such corporation. A
corporation that attains the status of a Subsidiary on a date after the
adoption of the plan shall be considered a Subsidiary commencing as of such
date.
(v) "TAX DATE" means the date upon which the withholding tax obligation
is determined pursuant to Section 12(b) herein.
SECTION 3. STOCK SUBJECT TO THE PLAN
Subject to the provisions of Section 13 of the Plan, the maximum
aggregate number of shares which may be optioned and sold under the Plan is
16,900,000 Shares of Common Stock. The shares may be authorized, but
unissued, or reacquired Common Stock. If an Option or Stock Purchase Right
should expire or become unexercisable for any reason without having been
exercised in full, the unpurchased Shares which were subject thereto shall,
unless the Plan shall have been terminated, become available for future grant
under the Plan. The Company, during the term of this Plan, will at all times
reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan.
SECTION 4. ADMINISTRATION
(a) COMMITTEE MEMBERSHIP. The Plan shall be administered by the
Committee, which shall consist of members of the Board. The members of the
Committee shall be appointed by the Board. If no Committee has been
appointed, the entire Board shall constitute the Committee.
(b) POWERS OF THE COMMITTEE. Subject to the provisions of the Plan and
the specific duties delegated by the Board, the Committee shall have full
authority and discretion to take the following actions:
(i) to determine the Fair Market Value of the Common Stock;
(ii) to select the officers, Consultants and Employees to whom
Options and Stock Purchase Rights may from time to time be granted under the
Plan;
(iii) to determine whether and to what extent Options and Stock
Purchase Rights or any combination thereof, are granted under the Plan;
(iv) to determine the number of Shares to be covered by each such
award granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder including, but not
limited to, the share price and any restriction or limitation, based in each
case on such factors as the Committee shall determine in its sole discretion;
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(vii) to determine the terms and restrictions applicable to Stock
Purchase Rights and the Restricted Stock purchased by exercising such Stock
Purchase Rights; and
(viii) to make any other such determinations with respect to awards
under the Plan as it shall deem appropriate.
(c) EFFECT OF COMMITTEE'S DECISION. All decisions, determinations and
interpretations of the Committee shall be final and binding on all Optionees
and Purchasers and any other holders of any Options or Stock Purchase Rights.
SECTION 5. ELIGIBILITY.
(a) GENERAL RULE. Nonstatutory Stock Options and stock Purchase Rights
may be granted to Employees and Consultants. Incentive Stock Options may be
granted only to Employees. An Employee or Consultant who has been granted an
Option or Stock Purchase Right may, if he is otherwise eligible, be granted
an additional Option, Options, Stock Purchase Right or Rights.
(b) STOCK OPTION AGREEMENT. Each grant of an Option under the Plan shall
be evidenced by a stock option agreement between the Optionee and the
Company. All stock option agreements shall be subject to all applicable terms
and conditions of the Plan and may be subject to any other terms and
conditions which are not inconsistent with the Plan and which the Committee
deems appropriate. The provisions of the various stock option agreements
entered into under the Plan are not required to be identical.
(c) INCENTIVE STOCK OPTION LIMITATION. Each Option shall be designated
in the written option agreement as either an Incentive Stock Option or a
Nonstatutory Stock Option. However, notwithstanding such designations, to the
extent that the aggregate Fair Market Value of the Shares with respect to
which Options designated as Incentive Stock Options are exercisable for the
first time by any Optionee during any calendar year (under all plans of the
Company or any Parent or Subsidiary) exceeds $100,000, such excess Options
shall be treated as Nonstatutory Stock Options.
(d) TIME OF GRANTING OPTIONS. The date of grant of an Option shall, for
all purposes, be the date on which the Committee makes the determination
granting such Option, or such other date as is determined by the Board.
Notice of the determination shall be given to each Employee or Consultant to
whom an Option is so granted within a reasonable time after the date of such
grant.
SECTION 6. TERM OF PLAN
The Plan shall become effective on the date of its adoption by the Board
subject to its approval by the shareholders of the Company as described in
Section 17 of the Plan. In the event that the shareholders fail to approve
the Plan within twelve (12) months after its adoption by the Board, any
Options or Stock Purchase Rights granted during such period shall be null and
void. The Plan shall continue in effect for a term often (10) years unless
sooner terminated under Section 14 of the Plan.
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SECTION 7. TERM OF OPTION
The term of each Option shall be the term stated in the Optionee's
option agreement; provided however, the term shall be no more than ten (10)
years from the date of grant thereof or such shorter term as may be provided
in the option agreement. However, in the case of an Option granted to an
Optionee 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 Subsidiary, the term of the Option shall be five (5) years
from the date of grant thereof or such shorter term as may be provided in the
option agreement.
SECTION 8. EXERCISE PRICE AND CONSIDERATION
(a) BOARD DETERMINATION. With respect to each Option, the per share
exercise price for the Shares shall be determined by the Board.
(b) INCENTIVE STOCK OPTIONS. In the case of an Incentive Stock Option,
the exercise price per Share shall be not less than 100% of the Fair Market
Value of such Share on the date of grant. Notwithstanding the above, if an
Incentive Stock Option is granted to an Employee who owns more than ten
percent of the total combined voting power of all classes of stock of the
Company or any Subsidiary, the exercise price per Share shall be not less
than 110% of the Fair Market Value of such Share on the date of grant.
(c) NONSTATUTORY STOCK OPTIONS. The exercise price per Share of a
Nonstatutory Stock Option shall not be less than 85% of the Fair Market Value
of such Share on the date of grant. Notwithstanding the above, if a
Nonstatutory Stock Option is granted to a person who owns more than ten
percent (10%) of the total combined voting power of all classes of stock of
the Company or any Subsidiary, the exercise price per Share shall be not less
than 110% of the Fair Market Value of such Share on the date of grant.
(d) CONSIDERATION. The consideration to be paid for Shares issued upon
the exercise of an Option and the method of payment for such Shares shall be
determined by the Committee and, in the case of an Incentive Stock Option,
shall be determined at the time of grant. The consideration to purchase
Shares may consist of, cash, check, recourse or nonrecourse promissory note,
the surrender of other Shares, or any combination of the foregoing methods of
payment. In the case where the exercise price is paid by the surrender of
Shares, the Shares surrendered must (i) have been owned by the Optionee for
more than six months on the date of surrender or were not acquired, directly
or indirectly, from the Company, and (ii) have a Fair Market Value on the
date of surrender equal to the aggregate exercise price of the new Shares to
be acquired.
SECTION 9. EXERCISE OF OPTION
(a) PROCEDURE FOR EXERCISE. Any Option granted hereunder shall be
exercisable at such times and under such conditions as determined by the
Board and as permissible under the terms of the Plan, but in no case at a
rate of less than 20% per year over five (5) years from the date of the
Option is granted. An Option may not be exercised for a fraction of a Share.
An Option 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
Option and full payment for the Shares with
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respect to which the Option is exercised has been received by the Company.
Until the issuance of the stock certificate evidencing such Shares, no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the
Option, 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 Section 13 of the Plan.
(b) TERMINATION OF EMPLOYMENT. In the event of termination of an
Optionee's consulting relationship or Continuous Status as an Employee with
the Company, such Optionee may within ninety (90) days after the date of such
termination (or such other period as set forth in the Option Agreement, but
in no event later than the expiration date of the term of such Option as set
forth in the Option Agreement), exercise the Option to the extent that
Optionee was entitled to exercise it at the date of such termination. To the
extent that Optionee was not entitled to exercise the Option at the date of
such termination, or if Optionee does not exercise such Option to the extent
so entitled within the time specified herein, the Option shall terminate.
(c) DISABILITY OF OPTIONEE. Notwithstanding the provisions of Section
9(b) above, if an Optionee's Consulting relationship or Continuous Status as
an Employee is terminated as a result of disability (as determined by the
Board in accordance with the policies of the Company), Optionee may within
six (6) months from the date of such termination (or such other longer period
as set forth in the Option Agreement, but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise the Option to the extent otherwise entitled to exercise
it at the date of such termination. To the extent that Optionee was not
entitled to exercise the Option at the date of termination, or if Optionee
does not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate.
(d) DEATH OF OPTIONEE. In the event of the death of an Optionee, the
Option may be exercised within twelve (12) months following the date of
death, (but in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), by the Optionee's estate or by
a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent the Optionee was entitled to exercise the
Option at the date of death. To the extent that Optionee was not entitled to
exercise the Option at the date of termination, or if Optionee does not
exercise such Option to the extent so entitled within the time specified
herein, the Option shall terminate.
(e) RULE 16B-3. Options granted to persons subject to Section 16(b) of
the Exchange Act must comply with Rule 16b-3 and shall contain such
additional conditions or restrictions as may be required thereunder to
qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.
SECTION 10. RIGHT OF FIRST REFUSAL
(a) RIGHT OF FIRST REFUSAL. Unless the Committee determines otherwise,
all Shares acquired under the Plan by an Optionee or Purchaser (both being
referred to herein as "Holder") shall be subject to the right of first
refusal set forth in this Section 10. Before any Shares may be sold or
transferred (including transfer by operation of law other than as excepted
pursuant to Section 10(e) hereof), Holder must first obtain the written
consent of the Company. If such
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written consent is not given, then the Company shall have a right of first
refusal to purchase all, but not less than all, of the Shares for the same
price and, to the extent practicable, on substantially the same terms and
conditions offered to such prospective purchaser, in accordance with the
procedures set forth below.
(b) PURCHASE PRICE. If the proposed price per share is to be other than
in cash, then an equivalent cash value shall be determined in good faith by
the Board. If a transfer other than a voluntary sale is proposed to be made,
then the price per Share for purposes of the right of first refusal shall be
determined by the mutual agreement of Holder and the Company or, if no
agreement can be reached, the price shall be the fair market value of such
shares; as determined in good faith by the Board.
(c) OFFER NOTICE. Prior to any sale or transfer of any Shares, Holder,
or the legal representative of Holder, shall promptly deliver to the
Secretary of the Company a written notice of the price and other terms and
conditions of the offer by the prospective purchaser, the identity of the
prospective purchaser, and, in the case of a sale, Holder's bona fide
intention to sell or dispose of such shares together with a copy of a written
agreement between Holder and the prospective purchaser conditioned only upon
the satisfaction of the procedures set forth in this right of first refusal.
If the Company does not give its written consent to such transfer, then the
Company (or its assignees) shall, for thirty (30) days after such notice from
Holder, have the right under this Section 10 to purchase all such Shares, as
set forth herein.
(d) HOLDER'S RIGHT TO TRANSFER. After the expiration of the Rights of
First Refusal, or upon the written consent of the Company to the proposed
transfer, Holder may sell or transfer the Shares specified in the notice to
the Company, on the terms and conditions specified in such notice; provided,
however, that the sale must be consummated within three (3) months after the
date of the notice and that all Shares sold or transferred shall remain
subject to the applicable provisions and restrictions of this Plan, including
restrictions on further transfer as provided in this Section 10, and shall
carry a legend to that effect. If the right of first refusal under this
Section 10 are not exercised, but Holder fails to consummate such sale on the
same terms and conditions as set forth in the notice to the Company within
three (3) months after the date of the notice, then such right of first
refusal shall be reinstated.
(e) TERMINATION; EXCEPTIONS. The provisions of this Section 10 shall
terminate on the closing date of an underwritten public offering of Common
Stock of the Company. The provisions of Section 10(a) shall not apply to a
transfer of any Shares by Holder, either during his or her lifetime or on
death to his or her ancestors, descendants or spouse, or any custodian or
trustee for the account of Holder or Holder's ancestors, descendants or
spouse; provided, in each such case a transferee shall receive and hold such
Shares subject to the provisions and restrictions on transfer under this
Section 10 and there shall be no further transfer of such Shares except in
accordance herewith.
(f) EFFECT OF TRANSFERS NOT IN COMPLIANCE. The Company shall not be
required to transfer on its books any Shares which shall have been sold or
transferred in violation of any of the provisions set forth in this Section
10, or to treat as owner of such Shares, or to accord the right to vote as
such owner or to pay dividends to, any transferee to whom such Shares shall
have been so transferred.
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SECTION 11. STOCK PURCHASE RIGHTS AND REPURCHASE OPTION
(a) RIGHTS TO PURCHASE RESTRICTED STOCK. Stock Purchase Rights may be
issued either alone, in addition to, or in tandem with other awards granted
under the Plan and/or cash awards made outside of the Plan. After the
Committee determines that it will offer Stock Purchase Rights under the Plan,
it shall advise the offeree in writing of the terms, conditions and
restrictions related to the offer, including the number of Shares that such
person shall be entitled to purchase, the price to be paid (which price shall
not be less than 85% of the Fair Market Value of the Shares as of the date of
this offer, or, in the case of a person owning stock representing more than
ten percent (10%) the total combined Voting Power of all classes of stock of
the Company or any Subsidiary, the price shall not be less than one hundred
percent (100%) of the Fair Market Value of the shares as of the date of the
offer), and the time within which such person must accept such offer, which
shall in no event exceed thirty (30) days from the date of grant of the Stock
Purchase Right. The offer shall be accepted by execution of a stock purchase
agreement in the form determined by the Committee.
(b) REPURCHASE OPTION. Unless the Committee determines otherwise, the
stock purchase agreement shall grant the Company a repurchase option
exercisable upon the voluntary or involuntary termination of the Purchaser's
employment with the Company for any reason (including death or disability).
The purchase price for unvested Shares repurchased pursuant to the stock
purchase agreement shall be the original price paid by the Purchaser and may
be paid by cancellation of any indebtedness of the purchaser to the Company.
The repurchase option with respect to the Restricted Stock shall lapse at
such rate as the Committee may determine, but in any event at a minimum rate
of twenty percent (20%) per year.
(c) OTHER PROVISIONS. The stock purchase agreement shall contain such
other terms, provisions and conditions not inconsistent with the Plan as may
be determined by the Committee in its sole discretion. In addition, the
provisions of stock purchase agreements need not be the same with respect to
each Purchaser.
(d) RIGHTS AS A SHAREHOLDER. Once the Stock Purchase Right is exercised,
the Purchaser shall have the rights equivalent to those of a shareholder, and
shall be a shareholder when his or her purchase is entered upon the records
of the duly authorized transfer agent of the Company. No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.
SECTION 12. WITHHOLDING TAXES
(a) OBLIGATION OF OPTIONEES AND PURCHASERS. As a condition to the
exercise of an Option or Stock Purchase Right, the Optionees and Purchasers
shall make such arrangements as the Committee may require to the satisfaction
of any federal, state, local or foreign withholding tax obligations that may
arise in connection with exercise. The Optionees shall also make such
arrangements as the Committee may require for the satisfaction of any
federal, state, local or foreign withholding tax obligations that may arise
in connection with the disposition of Shares acquired by exercising an Option.
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(b) STOCK WITHHOLDING TO SATISFY WITHHOLDING TAX OBLIGATIONS. At the
discretion of the Committee, Optionees or Purchasers may satisfy withholding
obligations as provided in this paragraph. When an Optionee or Purchaser
incurs a tax liability in connection with an Option or Stock Purchase Right,
which tax liability is subject to tax withholding under applicable tax laws,
and the Optionee or Purchaser is obligated to pay the Company an amount
required to be withheld under applicable tax laws, the Optionee or Purchaser
may satisfy the withholding tax obligation by electing to have the Company
withhold from the Shares to be issued upon exercise of the Option, or the
Shares to be issued in connection with the Stock Purchase Right, if any, that
number of Shares having a Fair Market Value equal to the amount required to
be withheld. The Fair Market Value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be
determined (the "Tax Date").
All elections by an Optionee or Purchaser to
have Shares withheld for this purpose shall be made in writing in a form
acceptable to the Committee and shall be subject to the following
restrictions:
(i) the election must be made on or prior to the Tax Date;
(ii) once made, the election shall be irrevocable as to the
particular Shares of the Option or Stock Purchase Right as to which the
election is made;
(iii) all elections shall be subject to the consent or disapproval
of the Committee;
(iv) if the Optionee is subject to Rule 16b-3 of the Exchange Act,
the election must comply with the applicable provisions of Rule 16b-3 and
shall be subject to such additional conditions or restrictions as may be
required thereunder to qualify for the maximum exemption from Section 16 of
the Exchange Act with respect to Plan transactions.
In the event the election to have Shares withheld is made by an Optionee
or Purchaser and no election is filed under Section 83(b) of the Code, the
Optionee or Purchaser shall receive the full number of Shares with respect to
which the Option or Stock Purchase Right is exercised, but such Optionee or
Purchaser shall be unconditionally obligated to tender back to the Company
the proper number of Shares at the time when the amount of withholding tax
becomes due and payable.
SECTION 13. ADJUSTMENT OF SHARES
(a) CHANGES IN CAPITALIZATION OR MERGER. Subject to any required action
by the shareholders of the Company, the number of Shares covered by each
outstanding Option or Stock Purchase Right, and the number of Shares which
have been authorized for issuance under the Plan but as to which no Options
or Stock Purchase Rights have yet been granted or which have been returned to
the Plan upon cancellation or expiration of an Option or Stock Purchase
Right, as well as the price per Share covered by each such outstanding Option
or Stock Purchase Right, shall be proportionately adjusted for 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
Common Stock, or any other increase or decrease in the number of issued
Shares effected without receipt of consideration by the Company; provided,
however, that
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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 Board, whose determination in that respect shall be
final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or
price of Shares subject to an Option or Stock Purchase Right. In the event of
a merger of the Company with or into another corporation, the Option shall be
assumed or an equivalent option shall be substituted by such successor
corporation or a parent or subsidiary of such successor corporation.
(b) DISSOLUTION, LIQUIDATION OR OTHER MERGER. In the event of the
proposed dissolution or liquidation of the Company, or of a merger in which
the successor corporation does not agree to assume the Option or Stock
Purchase Right or substitute an equivalent Option or Stock Purchase Right,
the Board shall notify Optionees and Purchasers at least thirty (30) days
prior to such proposed action. To the extent it has not been previously
exercised, the Option or Stock Purchase Right will terminate immediately
prior to the consummation of such proposed action.
SECTION 14. AMENDMENT AND TERMINATION OF PLAN.
(a) AMENDMENT AND TERMINATION. The Board may at any time amend, alter,
suspend or discontinue the Plan, but no amendment, alteration, suspension or
discontinuation shall be made which would impair the rights of any Optionee
or Purchaser under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with Rule 16b-3
under the Exchange Act or with Section 422 of the Code (or any other
applicable law or regulation, including the requirements of the NASD or an
established stock exchange), the Company shall obtain shareholder approval of
any Plan amendment in such a manner and to such a degree as required.
(b) EFFECT OF AMENDMENT OR TERMINATION. Any such amendment or
termination of the Plan shall not affect Options and Stock Purchase Rights
already granted and such Options and Stock Purchase Rights shall remain in
full force and effect as if this Plan had not been amended or terminated,
unless mutually agreed otherwise between the Optionee or Purchaser and the
Board, which agreement must be in writing and signed by the Optionee or
Purchaser and the Company.
SECTION 15. NONTRANSFERABILITY
All Options and Stock Purchase Rights granted under the Plan 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 Optionee or Stock Purchase Rights
Holder only by the Optionee or Stock Purchase Rights Holder.
SECTION 16. ISSUANCE OF SHARES
(a) Legal Requirements. Shares shall not be issued pursuant to the
exercise of an Option or Stock Purchase Right unless the exercise of such
Option or Stock Purchase Right and the issuance and delivery of such Shares
pursuant thereto shall comply with all relevant
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provisions of law, including, without limitation, the Securities Act of 1933,
as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares
may then be listed, and shall be further subject to the approval of counsel
for the Company with respect to such compliance.
(b) INVESTMENT REPRESENTATIONS. As a condition to the exercise of an
Option or Stock Purchase Right, the Committee may require the person
exercising such Option or Stock Purchase Right 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 of the aforementioned relevant provisions of law.
(c) REGULATORY APPROVAL. 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.
SECTION 17. NO EMPLOYMENT RIGHTS
No provision of the Plan, nor any Option or Stock Purchase Right granted
under the Plan shall confer upon any Optionee, Stock Purchaser Right Holder
or Purchaser any right with respect to continuation of employment or
consulting relationship with the Company, nor shall it interfere in any way
with his right or the Company's right to terminate his employment or
consulting relationship at any time, with or without cause.
SECTION 18. SHAREHOLDER APPROVAL
Continuance of the Plan shall be subject to approval by the shareholders
of the Company within twelve (12) months before or after the date the Plan is
adopted. Such shareholder approval shall be obtained in the degree and manner
required under applicable state and federal law and the rules of any stock
exchange upon which the Common Stock is listed.
SECTION 19. INFORMATION TO HOLDER AND PURCHASERS
The Company shall provide to each Holder and Purchaser, during the
period for which such Holder has one or more Options or Stock Purchase Rights
outstanding, and in the case of a Purchaser, during the period such
individual owns such Shares, annual financial statements of the Company. The
Company shall not be required to provide such information if the issuance of
Options under the Plan is limited to key employees whose duties in connection
with the Company assure their access to equivalent information.
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