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EXHIBIT 99.4
PIVOTAL TECHNOLOGIES CORP.
1998 STOCK OPTION PLAN
1 Purposes of the Plan. This 1998 Stock Option Plan is
designed to attract and retain the best available personnel for positions of
substantial responsibility and to promote the success of the Company's business.
Options granted under the Plan may only be Incentive Stock Options or
Non-qualified Stock Options as determined by the Administrator at the time of
grant of an Option and subject to the applicable provisions of Section 422 of
the Code and the regulations promulgated thereunder.
2 Definitions. As used herein, the following definitions shall
apply:
(a) "Administrator" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.
(b) "Applicable Laws" means the legal requirements relating to
the administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code and the applicable laws of any
foreign country or jurisdiction where Options are, or will be, granted under the
Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as
amended.
(e) "Committee" means a Committee appointed by the Board of
Directors in accordance with Section 4 of the Plan.
(f) "Common Stock" means the Common Stock of the Company.
(g) "Company" means Pivotal Technologies Corporation, a
Delaware corporation.
(h) "Consultant" means any person who is engaged by the
Company or any Parent or Subsidiary to render consulting or advisory services
and is compensated for such services, and any Director of the Company whether
compensated for such services or not. If the Company registers any class of any
equity security pursuant to the Exchange Act, the term Consultant shall
thereafter not include Directors who are not compensated for their services or
are paid only a Director's fee by the Company.
(i) "Continuous Status as an Employee or Consultant" means
that the employment or consulting relationship with the Company, any Parent or
Subsidiary is not interrupted or terminated. Continuous Status as an Employee or
Consultant shall not be considered interrupted in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor. A
leave of absence approved by the Company shall include sick leave, military
leave, or any other personal leave approved by an authorized representative of
the Company. For purposes of Incentive Stock Options, no such leave may exceed
three months, unless reemployment upon expiration of such leave is guaranteed by
statute or contract, including Company policies. If reemployment upon expiration
of a leave of absence approved by the Company is not so guaranteed, on the day
three months after the first day of such leave any Incentive Stock Option held
by the Optionee shall cease to be treated as an Incentive Stock Option and shall
be treated for tax purposes as a Nonstatutory Stock Option.
(j) "Director" means a member of the Board of Directors of the
Company.
(k) "Employee" means any person, including Officers and
Directors, employed by the Company or any Parent 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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(l) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(m) "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 Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, 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 exchange or system 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 regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock
on the last market trading day prior to the day of determination; 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
Administrator.
(n) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.
(o) "Non-qualified Stock Option" means an Option not intended
to qualify as an incentive stock option within the meaning of Section 422 of the
Code.
(p) "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(q) "Option" means a stock option granted pursuant to the
Plan.
(r) "Optioned Stock" means the Common Stock subject to an
Option.
(s) "Optionee" means an Employee or Consultant who receives an
Option or who acquires shares of Restricted Stock subject to a Repurchase
Option.
(t) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(u) "Plan" means this Stock Option Plan.
(v) "Restricted Stock" means shares of Common Stock subject to
the Company's repurchase option (a "Repurchase Option") acquired by an Optionee
upon such Optionee's Early Exercise (defined below) of an Option.
(w) "Section 16(b)" means Section 16(b) of the Exchange Act.
(x) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 12 below.
(y) "Subsidiary" means a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3 Stock Subject to the Plan. Subject to the provisions of
Section 11 of the Plan, the maximum aggregate number of Shares that may be
subject to option and sold under the Plan is Two million Eight hundred and Ten
thousand Five hundred (2,810,500) Shares. The Shares may be authorized but
unissued, or reacquired Common Stock.
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If an Option expires or becomes unexercisable without having
been exercised in full, or is surrendered pursuant to an option exchange
program, the unpurchased Shares that were subject thereto shall become available
for future grant or sale under the Plan (unless the Plan has terminated).
However, Shares that have actually been issued under the Plan upon exercise of
an Option, shall not be returned to the Plan and shall not become available for
future distribution under the Plan, except that if Shares are repurchased by the
Company at their original purchase price, such Shares shall become available for
future grant under the Plan. For purposes of the preceding sentence, voting
rights shall not be considered a benefit of Share ownership.
4 Administration of the Plan.
4.1 Initial Plan Procedure. Prior to the date, if any, upon
which the Company becomes subject to the Exchange Act, the Plan shall be
administered by the Board or a Committee appointed by the Board.
4.2 Plan Procedure after the Date, if any, upon which the
Company becomes subject to the Exchange Act.
4.2.1 Multiple Administrative Bodies. If permitted by Rule
16b-3 promulgated under the Exchange Act or any successor thereto ("Rule
16b-3"), the Plan may be administered by different bodies with respect to
Directors, Officers and Employees who are neither Directors nor Officers.
4.2.2 Administration with Respect to Directors and Officers.
With respect to grants of Options to Employees who are also Officers or
Directors of the Company, the Plan shall be administered by (A) the Board if the
Board may administer the Plan in compliance with the rules under Rule 16b-3
relating to the disinterested administration of employee benefit plans under
which Section 16(b) exempt discretionary grants and awards of equity securities
are to be made, or (B) a Committee designated by the Board to administer the
Plan, which Committee shall be constituted to comply with the rules under Rule
16b-3 relating to the disinterested administration of employee benefit plans
under which Section 16(b) exempt discretionary grants and awards of equity
securities are to be made. Once appointed, such Committee shall continue to
serve in its designated capacity until otherwise directed by the Board. From
time to time the Board may increase the size of the Committee and appoint
additional members thereof, remove members (with or without cause) and appoint
new members in substitution therefor, fill vacancies, however caused, and remove
all members of the Committee and thereafter directly administer the Plan, all to
the extent permitted by the rules under Rule 16b-3 relating to the disinterested
administration of employee benefit plans under which Section 16(b) exempt
discretionary grants and awards of equity securities are to be made.
4.2.3 Administration with Respect to Other Employees and
Consultants. With respect to grants of Options and to Employees or Consultants
who are neither Directors nor Officers of the Company, the Plan shall be
administered by (A) the Board or (B) a 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. From time to time the Board may
increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies, however caused, and remove all members of the
Committee and thereafter directly administer the Plan, all to the extent
permitted by the Applicable Laws.
4.3 Powers of the Administrator. Subject to the provisions of
the Plan and, in the case of a Committee, the specific duties delegated by the
Board to such Committee, and subject to the approval of any relevant
authorities, including the approval, if required, of any stock exchange upon
which the Common Stock is listed, the Administrator shall have the authority in
its discretion:
(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(m) of the Plan;
(ii) to select the Consultants and Employees to whom Options
may from time to time be granted hereunder;
(iii) to determine whether and to what extent Options are
granted hereunder;
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(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 of any award
granted hereunder;
(vii) to determine whether and under what circumstances an
Option may be settled in cash under subsection 9.6 instead of Common Stock;
(viii) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option has declined since the date the Option was granted;
(ix) to provide for the early exercise of Options for the
purchase of unvested shares (an "Early Exercise") subject to such terms and
conditions as the Administrator may determine; and
(x) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan.
4.4 Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees and any other holders of any Options.
5 Eligibility.
5.1 Non-qualified Stock Options may be granted to Employees
and Consultants. Incentive Stock Options may only be granted to Employees. An
Employee or Consultant who has been granted an Option may, if otherwise
eligible, be granted additional Options.
5.2 Each Option shall be designated in the written option
agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designation, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 5(b), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.
5.3 NEITHER THE PLAN NOR ANY OPTION SHALL CONFER UPON ANY
OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF HIS OR HER EMPLOYMENT OR
CONSULTING RELATIONSHIP WITH THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH
HIS OR HER RIGHT OR THE COMPANY'S RIGHT TO TERMINATE HIS OR HER EMPLOYMENT OR
CONSULTING RELATIONSHIP AT ANY TIME, WITH OR WITHOUT CAUSE.
5.4 Upon the Company or a successor corporation issuing any
class of common equity securities required to be registered under Section 12 of
the Exchange Act or upon the Plan being assumed by a corporation having a class
of common equity securities required to be registered under Section 12 of the
Exchange Act, the following limitations shall apply to grants of Options to
Employees:
5.4.1 No Employee shall be granted, in any fiscal year of the
Company, Options to purchase more than Seven hundred Fifty thousand (750,000)
Shares; provided that a new employee of the Company may be granted in a single
year upon joining the Company Options to purchase One million Five hundred
thousand (1,500,000) Shares.
5.4.2 The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 11.
5.4.3 If an Option is canceled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 11), the canceled Option shall be counted against
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the limit set forth in Section 5.4.1 above. For this purpose, if the exercise
price of an Option is reduced, such reduction will be treated as a cancellation
of the Option and the grant of a new Option.
6 Term of Plan. The Plan shall become effective upon the
earlier to occur of its adoption by the Board of Directors or its approval by
the stockholders of the Company, as described in Section 17 of the Plan. It
shall continue in effect for a term of ten (10) years unless sooner terminated
under Section 13 of the Plan.
7 Term of Option. The term of each Option shall be the term
stated in the Option Agreement; provided, however, that the term shall be no
more than ten (10) years from the date of grant thereof. In the case of an
Incentive Stock 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 Parent or 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.
8 Option Exercise Price and Consideration.
8.1 The per share exercise price for the Shares to be issued
upon exercise of an Option shall be such price as is determined by the
Administrator, but in no event shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of 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 no less than 110% of the Fair Market Value
per Share on the date of grant.
(B) granted to any other Employee, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
(ii) In the case of a Nonstatutory Stock Option
(A) granted to a person who, at the time of 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 no less than 110% of the Fair Market Value per
Share on the date of the grant.
(B) granted to any other person, the per Share
exercise price shall be no less than 85% of the Fair Market Value per Share (or
such lower percentage of the Fair Market Value per share as may be allowed by
California law, as amended from time to time) on the date of grant.
8.2 The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be determined
by the Administrator. Such consideration may consist of (1) cash, (2) check, (3)
other Shares that (x) in the case of Shares acquired upon exercise of an Option,
have been owned by the Optionee for more than six months on the date of
surrender, and (y) have a Fair Market Value on the date of surrender equal to
the aggregate exercise price of the Shares as to which such Option shall be
exercised, (4) any other legal consideration approved by the Administrator, or
(5) any combination of the foregoing methods of payment accomplished by delivery
of a properly executed exercise notice together with such other documentation as
the Administrator and a broker, if applicable, shall require to effect an
exercise of the Option and delivery to the Company of the sale or loan proceeds
required to pay the exercise price. In making its determination as to the type
of consideration to accept, the Administrator shall consider if acceptance of
such consideration may be reasonably expected to benefit the Company.
9 EXERCISE OF OPTION.
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9.1 PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER. ANY
OPTION GRANTED HEREUNDER SHALL BE EXERCISABLE AT SUCH TIMES AND UNDER SUCH
CONDITIONS AS DETERMINED BY THE ADMINISTRATOR, INCLUDING PERFORMANCE CRITERIA
WITH RESPECT TO THE COMPANY AND/OR THE OPTIONEE, AND AS SHALL BE PERMISSIBLE
UNDER THE TERMS OF THE PLAN. 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 BY THE PERSON ENTITLED TO EXERCISE THE OPTION AND FULL PAYMENT FOR THE
SHARES WITH RESPECT TO WHICH THE OPTION IS EXERCISED HAS BEEN RECEIVED BY THE
COMPANY. 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, RECEIVE DIVIDENDS OR
ANY OTHER RIGHTS AS A STOCKHOLDER SHALL EXIST WITH RESPECT TO THE OPTIONED
STOCK, NOTWITHSTANDING THE EXERCISE OF THE OPTION. NO ADJUSTMENT SHALL 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 11 HEREOF.
Exercise of an Option in any manner shall result in a decrease
in the number of Shares that thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
9.2 TERMINATION OF EMPLOYMENT OR CONSULTING RELATIONSHIP. IN
THE EVENT OF TERMINATION OF AN OPTIONEE'S CONTINUOUS STATUS AS AN EMPLOYEE OR
CONSULTANT (BUT NOT IN THE EVENT OF AN OPTIONEE'S CHANGE OF STATUS FROM EMPLOYEE
TO CONSULTANT (IN WHICH CASE AN EMPLOYEE'S INCENTIVE STOCK OPTION SHALL
AUTOMATICALLY CONVERT TO A NONSTATUTORY STOCK OPTION ON THE DATE THREE (3)
MONTHS AND ONE DAY FOLLOWING SUCH CHANGE OF STATUS) OR FROM CONSULTANT TO
EMPLOYEE), SUCH OPTIONEE MAY, BUT ONLY WITHIN SUCH PERIOD OF TIME AS IS
DETERMINED BY THE ADMINISTRATOR, OF AT LEAST THIRTY (30) DAYS, WITH SUCH
DETERMINATION IN THE CASE OF AN INCENTIVE STOCK OPTION NOT EXCEEDING THREE (3)
MONTHS AFTER THE DATE OF SUCH TERMINATION (BUT IN NO EVENT LATER THAN THE
EXPIRATION DATE OF THE TERM OF SUCH OPTION AS SET FORTH IN THE OPTION
AGREEMENT), EXERCISE HIS OR HER OPTION TO THE EXTENT THAT THE OPTIONEE WAS
ENTITLED TO EXERCISE IT AT THE DATE OF SUCH TERMINATION. TO THE EXTENT THAT THE
OPTIONEE WAS NOT ENTITLED TO EXERCISE THE OPTION AT THE DATE OF SUCH
TERMINATION, OR IF THE OPTIONEE DOES NOT EXERCISE SUCH OPTION TO THE EXTENT SO
ENTITLED WITHIN THE TIME SPECIFIED HEREIN, THE OPTION SHALL TERMINATE, AND THE
SHARES COVERED BY SUCH OPTION SHALL REVERT TO THE PLAN.
9.3 DISABILITY OF OPTIONEE. IN THE EVENT OF TERMINATION OF AN
OPTIONEE'S CONTINUOUS STATUS AS AN EMPLOYEE OR CONSULTANT AS A RESULT OF HIS OR
HER DISABILITY, THE OPTIONEE MAY, BUT ONLY WITHIN SIX (6) MONTHS FROM THE DATE
OF SUCH TERMINATION (AND 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. 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 CEASE TO BE TREATED AS AN INCENTIVE STOCK
OPTION AND SHALL BE TREATED FOR TAX PURPOSES AS A NONSTATUTORY STOCK OPTION ON
THE DAY THREE MONTHS AND ONE DAY FOLLOWING SUCH TERMINATION. TO THE EXTENT THAT
THE OPTIONEE WAS NOT ENTITLED TO EXERCISE THE OPTION AT THE DATE OF TERMINATION,
OR IF THE OPTIONEE DOES NOT EXERCISE SUCH OPTION TO THE EXTENT SO ENTITLED
WITHIN THE TIME SPECIFIED HEREIN, THE OPTION SHALL TERMINATE, AND THE SHARES
COVERED BY SUCH OPTION SHALL REVERT TO THE PLAN.
9.4 DEATH OF OPTIONEE. IN THE EVENT OF THE DEATH OF AN
OPTIONEE, THE OPTION MAY BE EXERCISED AT ANY TIME WITHIN TWELVE (12) MONTHS
FOLLOWING THE DATE
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OF DEATH (BUT IN NO EVENT LATER THAN THE EXPIRATION OF THE TERM OF SUCH OPTION
AS SET FORTH IN THE NOTICE OF GRANT) 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 THAT THE OPTIONEE WAS ENTITLED TO EXERCISE THE OPTION ON THE DATE OF
DEATH. IF, AT THE TIME OF DEATH, THE OPTIONEE WAS NOT ENTITLED TO EXERCISE HIS
OR HER ENTIRE OPTION, THE SHARES COVERED BY THE UNEXERCISABLE PORTION OF THE
OPTION SHALL IMMEDIATELY REVERT TO THE PLAN. IF, AFTER THE OPTIONEE'S DEATH, THE
OPTIONEE'S ESTATE OR A PERSON WHO ACQUIRES THE RIGHT TO EXERCISE THE OPTION BY
BEQUEST OR INHERITANCE DOES NOT EXERCISE THE OPTION WITHIN THE TIME SPECIFIED
HEREIN, THE OPTION SHALL TERMINATE, AND THE SHARES COVERED BY SUCH OPTION SHALL
REVERT TO THE PLAN.
9.5 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.
9.6 BUYOUT PROVISIONS. THE ADMINISTRATOR MAY AT ANY TIME OFFER
TO BUY OUT FOR A PAYMENT IN CASH OR SHARES, AN OPTION PREVIOUSLY GRANTED, BASED
ON SUCH TERMS AND CONDITIONS AS THE ADMINISTRATOR SHALL ESTABLISH AND
COMMUNICATE TO THE OPTIONEE AT THE TIME THAT SUCH OFFER IS MADE.
10 Non-Transferability of Options. Options 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, only by the Optionee.
11 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, MERGER OR ASSET
SALE.
11.1 IN THE EVENT THAT THE ADMINISTRATOR DETERMINES THAT ANY
DIVIDEND OR OTHER DISTRIBUTION (WHETHER IN THE FORM OF CASH, COMMON STOCK, OTHER
SECURITIES, OR OTHER PROPERTY), RECAPITALIZATION, RECLASSIFICATION, STOCK SPLIT,
REVERSE STOCK SPLIT, REORGANIZATION, MERGER, CONSOLIDATION, SPLIT-UP, SPIN-OFF,
COMBINATION, REPURCHASE, LIQUIDATION, DISSOLUTION, OR SALE, TRANSFER, EXCHANGE
OR OTHER DISPOSITION OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE COMPANY,
OR EXCHANGE OF COMMON STOCK OR OTHER SECURITIES OF THE COMPANY, ISSUANCE OF
WARRANTS OR OTHER RIGHTS TO PURCHASE COMMON STOCK OR OTHER SECURITIES OF THE
COMPANY, OR OTHER SIMILAR CORPORATE TRANSACTION OR EVENT, IN THE ADMINISTRATOR'S
SOLE DISCRETION, AFFECTS THE COMMON STOCK SUCH THAT AN ADJUSTMENT IS DETERMINED
BY THE ADMINISTRATOR TO BE APPROPRIATE IN ORDER TO PREVENT DILUTION OR
ENLARGEMENT OF THE BENEFITS OR POTENTIAL BENEFITS INTENDED TO BE MADE AVAILABLE
UNDER THE PLAN OR WITH RESPECT TO ANY OPTION OR RESTRICTED STOCK, THEN THE
ADMINISTRATOR SHALL, IN SUCH MANNER AS IT MAY DEEM EQUITABLE, ADJUST ANY OR ALL
OF:
11.1.1 THE NUMBER AND KIND OF SHARES OF COMMON STOCK (OR OTHER
SECURITIES OR PROPERTY) WITH RESPECT TO WHICH OPTIONS OR STOCK PURCHASE RIGHTS
MAY BE GRANTED OR AWARDED (INCLUDING, BUT NOT LIMITED TO, ADJUSTMENTS OF THE
LIMITATIONS IN SECTION 3 ON THE MAXIMUM NUMBER AND KIND OF SHARES WHICH MAY BE
ISSUED AND ADJUSTMENTS OF THE MAXIMUM NUMBER OF SHARES THAT MAY BE PURCHASED BY
ANY HOLDER IN ANY FISCAL YEAR PURSUANT TO SECTION 5.41);
11.1.2 THE NUMBER AND KIND OF SHARES OF COMMON STOCK (OR OTHER
SECURITIES OR PROPERTY) SUBJECT TO OUTSTANDING OPTIONS OR RESTRICTED STOCK; AND
11.1.3 THE GRANT OR EXERCISE PRICE WITH RESPECT TO ANY OPTION.
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11.2 IN THE EVENT OF ANY TRANSACTION OR EVENT DESCRIBED IN
SECTION 11.1, THE ADMINISTRATOR, IN ITS SOLE AND ABSOLUTE DISCRETION, AND ON
SUCH TERMS AND CONDITIONS AS IT DEEMS APPROPRIATE, EITHER BY THE TERMS OF THE
OPTION OR RESTRICTED STOCK OR BY ACTION TAKEN PRIOR TO THE OCCURRENCE OF SUCH
TRANSACTION OR EVENT AND EITHER AUTOMATICALLY OR UPON THE HOLDER'S REQUEST, IS
HEREBY AUTHORIZED TO TAKE ANY ONE OR MORE OF THE FOLLOWING ACTIONS WHENEVER THE
ADMINISTRATOR DETERMINES THAT SUCH ACTION IS APPROPRIATE IN ORDER TO PREVENT
DILUTION OR ENLARGEMENT OF THE BENEFITS OR POTENTIAL BENEFITS INTENDED TO BE
MADE AVAILABLE UNDER THE PLAN OR WITH RESPECT TO ANY OPTION OR RESTRICTED STOCK
GRANTED OR ISSUED UNDER THE PLAN OR TO FACILITATE SUCH TRANSACTION OR EVENT:
11.2.1 To provide for either the purchase of any such Option
or Restricted Stock for an amount of cash equal to the amount that could have
been obtained upon the exercise of such Option or realization of the Holder's
rights had such Option or Restricted Stock been currently exercisable or payable
or fully vested or the replacement of such Option or Restricted Stock with other
rights or property selected by the Administrator in its sole discretion;
11.2.2 To provide that such Option shall be exercisable as to
all shares covered thereby, notwithstanding anything to the contrary in the Plan
or the provisions of such Option;
11.2.3 To provide that such Option or Restricted Stock be
assumed by the successor or survivor corporation, or a parent or subsidiary
thereof, or shall be substituted for by similar options, rights or awards
covering the stock of the successor or survivor corporation, or a parent or
subsidiary thereof, with appropriate adjustments as to the number and kind of
shares and prices;
11.2.4 To make adjustments in the number and type of shares of
Common Stock (or other securities or property) subject to outstanding Options,
and/or in the terms and conditions of (including the grant or exercise price),
and the criteria included in, outstanding Options or Restricted Stock or Options
or Restricted Stock which may be granted in the future; and
11.2.5 To provide that immediately upon the consummation of
such event, such Option shall not be exercisable and shall terminate; provided,
that for a specified period of time prior to such event, such Option or Stock
Purchase Right shall be exercisable as to all Shares covered thereby which are
vested, and the restrictions imposed under an Option Agreement or Restricted
Stock purchase agreement upon some or all Shares may be terminated and, in the
case of Restricted Stock, some or all shares of such Restricted Stock may cease
to be subject to repurchase, notwithstanding anything to the contrary in the
Plan or the provisions of such Option or Restricted Stock purchase agreement.
11.3 Subject to Section 3, the Administrator may, in its
discretion, include such further provisions and limitations in any Option or
Restricted Stock agreement or certificate, as it may deem equitable and in the
best interests of the Company.
11.4 NOTWITHSTANDING THE FOREGOING, IN THE EVENT THAT THE
COMPANY BECOMES A PARTY TO A TRANSACTION THAT IS INTENDED TO QUALIFY FOR
"POOLING OF INTERESTS" ACCOUNTING TREATMENT AND, BUT FOR ONE OR MORE OF THE
PROVISIONS OF THIS PLAN OR ANY OPTION AGREEMENT OR ANY RESTRICTED STOCK PURCHASE
AGREEMENT WOULD SO QUALIFY, THEN THIS PLAN AND ANY SUCH AGREEMENT SHALL BE
INTERPRETED SO AS TO PRESERVE SUCH ACCOUNTING TREATMENT, AND TO THE EXTENT THAT
ANY PROVISION OF THE PLAN OR ANY SUCH AGREEMENT WOULD DISQUALIFY THE TRANSACTION
FROM POOLING OF INTERESTS ACCOUNTING TREATMENT (INCLUDING, IF APPLICABLE, AN
ENTIRE OPTION AGREEMENT OR RESTRICTED STOCK PURCHASE AGREEMENT), THEN SUCH
PROVISION SHALL BE NULL AND VOID. ALL DETERMINATIONS TO BE MADE IN CONNECTION
WITH THE PRECEDING SENTENCE SHALL BE MADE BY THE INDEPENDENT ACCOUNTING FIRM
WHOSE OPINION WITH RESPECT TO "POOLING OF INTERESTS" TREATMENT IS REQUIRED AS A
CONDITION TO THE COMPANY'S CONSUMMATION OF SUCH TRANSACTION.
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11.5 The existence of the Plan, any Option Agreement or
Restricted Stock purchase agreement and the Options granted hereunder shall not
affect or restrict in any way the right or power of the Company or the
stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger or consolidation of the Company, any issue
of stock or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to or
affect the Common Stock or the rights thereof or which are convertible into or
exchangeable for Common Stock, or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise.
12 Time of Granting Options. The date of grant of an Option
shall, for all purposes, be the date on which the Administrator makes the
determination granting such Option, or such other date as is determined by the
Administrator. 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.
13 Amendment and Termination of the Plan.
13.1 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 that would impair the rights of any
Optionee 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 stockholder approval of any Plan amendment
in such a manner and to such a degree as required.
13.2 Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted, and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Administrator, which agreement must be in writing and signed by the Optionee
and the Company.
14 Conditions upon Issuance of Shares. Shares shall not be
issued pursuant to the exercise of an Option unless the exercise of such Option
and the issuance and delivery of such Shares pursuant thereto shall comply with
all relevant 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. As a condition to the exercise of an
Option, the Company may require the person exercising such Option 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.
15 Reservation of Shares. The Company, during the term of this
Plan, shall at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan. 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.
16 Agreements. Options shall be evidenced by written
agreements in such form as the Administrator shall approve from time to time.
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 and the rules
of any stock exchange upon which the Common Stock is listed.
