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EXHIBIT 4.5
IC GLOBAL SERVICES, INC.
1998 STOCK PLAN
(Amended and Restated April 6, 1999)
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TABLE OF CONTENTS
Page
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1. Names and Purposes of the Plan ......................................... 1
2. Definitions ............................................................ 1
3. Administration of Plan ................................................. 2
(a) Procedure ........................................................ 2
(b) Limitations on Members of Board .................................. 3
(c) Powers of the Board .............................................. 3
(d) Effect of the Board's or Committee's Decision .................... 3
4. Stock Subject to the Plan .............................................. 3
5. Eligibility ............................................................ 4
6. Term of the Plan ....................................................... 4
7. Option Agreement and Option Period ..................................... 4
8. Price and Consideration ................................................ 4
(a) Price ............................................................ 4
(b) Fair Market Value ................................................ 5
(c) Form of Consideration ............................................ 5
(d) Promissory Notes ................................................. 5
(e) Surrendered Common Stock ......................................... 5
(f) Exercise/Sale .................................................... 5
(g) Exercise/Pledge .................................................. 5
9. Limit on Value of Incentive Options .................................... 6
10. Exercise of Option ..................................................... 6
(a) General Terms .................................................... 6
(b) Survival of Options .............................................. 6
(c) Partial Exercise ................................................. 6
(d) Time of Exercise ................................................. 6
(e) No Rights as Stockholder Until Exercise .......................... 6
(f) Issuance of Share Certificates ................................... 6
(g) Reduction of Shares Upon Exercise ................................ 7
11. Termination of Employment; Death or Disability ......................... 7
(a) General .......................................................... 7
(b) Death or Disability .............................................. 7
(c) Definition of Termination ........................................ 7
12. Non-Transferability of Options ......................................... 7
13. Adjustment Upon Changes in Capitalization .............................. 7
(a) Reorganizations, Recapitalizations, Etc. ......................... 7
(b) Corporate Transactions ........................................... 8
(c) No Fractional Shares ............................................. 8
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(d) Binding Effect of Board Determinations ........................... 8
(e) No Other Adjustments ............................................. 8
14. Amendment and Termination of the Plan .................................. 8
(a) Amendment and Termination ........................................ 8
(b) Effect of Termination ............................................ 9
15. Conditions Upon Issuance of Shares ..................................... 9
16. Reservation of Shares .................................................. 9
17. Taxes and Withholding of Taxes ......................................... 9
18. Stockholder Approval of the Plan ....................................... 9
19. Liability of Company ................................................... 9
20. Notices ................................................................ 9
21. Terms and Conditions of Stock Purchase Rights .......................... 10
(a) Stock issuance Agreement ......................................... 10
(b) Duration of Offers and Nontransferability of Rights .............. 10
(c) Purchase Price ................................................... 10
(d) Withholding Taxes ................................................ 10
(e) Restrictions on Transfer of Shares and Minimum Vesting ........... 10
(f) Accelerated Vesting .............................................. 10
22. No Enlargement of Service Rights ....................................... 10
23. Legends on Certificates ................................................ 11
(a) Federal Law ...................................................... 11
(b) State Legend ..................................................... 11
24. Invalid Provisions ..................................................... 11
25. Financial Reports ...................................................... 11
26. Modification, Extension and Assumption of Options ...................... 11
27. Repurchase of Vested Shares ............................................ 11
28. Governing Law .......................................................... 12
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1. Names and Purposes of the Plan. The Plan provides for the granting of
options that are intended to qualify as incentive stock options within the
meaning of Section 422(b) of the Internal Revenue Code of 1986, as amended, and
options that are not intended to so qualify. The Plan also provides for the
grant of Stock Purchase Rights. The purposes of the Plan are: (a) to attract and
retain the best available people for positions with the Company; and (b) to
provide additional incentive to Employees, Outside Directors and Consultants of
the Company and any future Parents and Subsidiaries, and to promote the success
of the Company's business.
2. Definitions. For purposes of the Plan, the following terms will have
the respective meanings indicated:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Buy-Sell Provisions" shall mean the buy-sell provisions which
are to be a condition of purchasing Optioned Shares upon the exercise of an
Option under the Plan.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(d) "Common Stock" shall mean the common stock of the Company.
(e) "Committee" shall mean the committee appointed by the Board in
accordance with Paragraph 3(a) of this Plan, if one is appointed.
(f) "Consultant" shall mean a person who performs bona fide services
for the Company, a Parent or a Subsidiary as a consultant or advisor, excluding
Employees and Outside Directors.
(g) "Corporate Transaction" shall mean the consummation of a merger
or consolidation of the Company with or into another entity or any other
corporate reorganization, if persons who were not stockholders of the Company
immediately prior to such merger, consolidation or other reorganization own
immediately after such merger, consolidation or other reorganization 50% or more
of the voting power of the outstanding securities of each of (A) the continuing
or surviving entity and (B) any direct or indirect parent corporation of such
continuing or surviving entity; or the sale, transfer or other disposition of
all or substantially all of the Company's assets. A transaction shall not
constitute a Corporate Transaction if its sole purpose is to change the state of
the Company's incorporation or to create a holding company that will be owned in
substantially the same proportions by the persons who held the Company's
securities immediately before such transaction.
(h) "Eligible Person" shall mean a person eligible to be granted
Options pursuant to Paragraph 5 hereof or Stock Purchase Rights pursuant to
Paragraph 21 hereof.
(i) "Employee" shall mean any person, including an officer or
director, who is an employee (within the meaning of Section 422 of the Code) of
the Company, any Parent, any Subsidiary or any Successor Corporation to any of
the foregoing.
(j) "Incentive Option" shall mean an incentive stock option as
defined in Section 422(b) of the Code.
(k) "Non-Statutory Option" shall mean an option which does not
qualify as an Incentive Option.
(l) "Option" shall mean a stock option granted pursuant to the Plan,
whether an Incentive Option or a Non-Statutory Option.
(m) "Option Agreement" shall mean an agreement evidencing an Option.
(n) "Option Grant Date" shall mean the date on which an Option is
granted by the Board.
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(o) "Option Period" shall mean the period in which an Option may be
exercised, to be established by the Board, subject to Paragraph 7 hereof.
(p) "Option Price" shall mean the per share price of Shares (as
hereinafter defined) to be issued pursuant to an Option, as determined by the
Board subject to Paragraph 8 hereof.
(q) "Optioned Stock" shall mean the Common Stock subject to an
Option granted pursuant to the Plan.
(r) "Optionee" shall mean an Eligible Person who receives an Option.
(s) "Outside Director" shall mean a member of the Board of Directors
who is not an Employee.
(t) "Parent" shall mean a "parent corporation" as defined in Section
424(e) of the Code.
(u) "Plan" shall mean this IC Global Services, Inc. 1998 Stock Plan.
(v) "Predecessor Corporation" shall mean a corporation which is a
party to a transaction described in Code Section 424(a) (or which would be so
described if a substitution or assumption under such section had been effected)
with the Company, a Parent, a Subsidiary or a predecessor corporation of any
such corporations.
(w) "Purchaser" shall mean a person to whom the Board has offered
the right to acquire Shares under the Plan (other than upon exercise of an
Option).
(x) "Purchase Price" shall mean the consideration for which one
Share may be acquired under the Plan (other than upon exercise of an Option), as
specified by the Board.
(y) "Service" shall mean service as an Employee, Outside Director or
Consultant.
(z) "Share" shall mean a share of Common Stock, as adjusted in
accordance with Paragraph 13 of this Plan.
(aa) "Stock Issuance Agreement" shall mean the agreement between the
Company and a Purchaser who acquires Shares under the Plan (other than upon
exercise of an Option) that contains the terms, conditions and restrictions
pertaining to the acquisition of such Shares.
(bb) "Stock Purchase Agreement" shall mean an agreement that is to
be executed as a condition of purchasing Optioned Stock upon exercise of an
Option as provided in this Plan.
(cc) "Stock Purchase Right" shall mean the right to purchase Shares
pursuant to Paragraph 21.
(dd) "Subsidiary" shall mean a subsidiary corporation as defined in
Section 424(f) of the Code.
(ee) "Successor Corporation" shall mean the corporation which
acquires the outstanding stock or assets of the Company in a Corporate
Transaction.
3. Administration of Plan.
(a) Procedure. The Plan shall be administered by the Board. The
Board may appoint a Committee consisting of not less than two (2) members of the
Board to administer the Plan on behalf of the Board, subject to such terms and
conditions as the Board may prescribe. Once appointed, the Committee shall
continue to serve 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
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substitution therefor, fill vacancies, however caused, and remove all members of
the Committee, and thereafter, directly administer the Plan. Any references
herein to the Board shall refer to the Committee, if one is appointed, to the
extent of the Committee's authority.
(b) Limitations on Members of Board. Members of the Board who either
are eligible for Options or have been granted Options may vote on any matters
affecting the administration of the Plan or the grant of any Options pursuant to
the Plan, except that no such member shall act in connection with an Option
granted to himself or herself, but any such member may be counted in determining
the existence of a quorum at any meeting of the Board during which action is
taken with respect to Options of such member.
(c) Powers of the Board. Subject to the provisions of the Plan, the
Board shall have the authority, in its discretion, to make all determinations
necessary or advisable for the administration of the Plan including, without
limitation:
(i) to determine, upon review of relevant information,
the then fair market value per Share of Common Stock
so long as the Common Stock is neither listed nor
admitted to trading on any stock exchange nor traded
in the over-the-counter market.
(ii) to determine the Option Price of the Options or
Purchase Price of Stock Purchase Rights to be
granted, subject to the provisions of Paragraph 8 of
this Plan;
(iii) to determine the Eligible Persons to whom, and the
time or times at which, Options or Stock Purchase
Rights shall be granted, and the size of each such
grant;
(iv) to determine whether Options granted hereunder shall
be Incentive Options or Non-Statutory Options;
(v) to prescribe, amend and rescind rules and
regulations relating to the Plan;
(vi) to determine the terms and provisions of each Option
or Stock Purchase Right granted under the Plan,
which terms and conditions need not be identical,
and to modify or amend each Option or Stock Purchase
Right, with consent of the Optionee or Purchaser;
(vii) to construe and interpret the Plan, the Option
Agreements, the Stock Purchase Agreements, and any
other agreement provided for hereunder; and
(viii) to authorize any person to execute on behalf of the
Company any instrument required to effectuate the
grant of an Option or Stock Purchase Right
previously granted by the Board or to take such
other actions as may be necessary or advisable with
respect to the Company's rights pursuant to the
Option, Stock Purchase Right, Option Agreement,
Stock Purchase Agreement, Stock Issuance Agreement
or any other agreement approved hereunder.
(d) Effect of the Board's or Committee's Decision. All decisions,
determinations and interpretations of the Board, or the Committee at the
direction of the Board, regarding the Plan shall be final and binding on all
Optionees and Purchasers and any other holders of Shares issued under the Plan.
4. Stock Subject to the Plan. Subject to the provisions of Paragraph 13 of
the Plan, the maximum aggregate number of Shares which may be issued under the
Plan is One Million Eight Hundred Ninety-Nine Thousand Seven Hundred Twenty-Nine
(1,899,729) Shares. This constitutes an absolute cumulative limitation on the
total number of Shares that may be optioned or granted under a Stock Purchase
Right under the Plan and,
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therefore, at any particular date the maximum aggregate number of Shares which
may be optioned or granted under a Stock Purchase Right under the Plan is equal
to Two Hundred Fifty Thousand (250,000) Shares minus the number of Shares
previously optioned under the Plan and Shares that were issued under the
exercise of an Option or Stock Purchase Right. Shares that are not purchased by
the Optionee prior to the expiration of the applicable Option Period or Shares
that are issued and subsequently repurchased by the Company pursuant to the
Buy-Sell Provisions or otherwise shall again become available to be covered by
Options or Stock Purchase Rights to be issued hereunder and shall not, as of the
effective date of such expiration, be counted as having been previously optioned
or issued for purposes of the above-described maximum number of Shares which may
be issued hereunder.
5. Eligibility. Options and Stock Purchase Rights may be granted to any
Employee, Outside Director or Consultant who is designated by the Board in its
discretion. Only Employees may be granted Incentive Options. Employees, Outside
Directors and Consultants may be granted Non-Statutory Options and Stock
Purchase Rights.
6. Term of the Plan. The Plan shall become effective immediately upon the
earlier to occur of its adoption by the Board or its approval by vote of a
majority of the outstanding Shares of the Company entitled to vote on the
adoption of such Plan. The Plan shall continue in effect until ten (10) years
from its respective date of establishment unless sooner terminated under
Paragraphs 13, 14 or 18 of this Plan. No Option or Stock Purchase Right may be
granted under the Plan after its expiration.
7. Option Agreement and Option Period. Each Option granted pursuant to the
Plan shall be evidenced by an Option Agreement. Unless otherwise expressly
provided in this Plan, each Option shall expire and all rights thereunder shall
cease to exist at the expiration of the Option Period which shall in no event be
more than ten (10) years after the Option Grant Date as fixed by the Board,
subject in all cases to earlier expiration as provided in Paragraph 11 of this
Plan, Notwithstanding the foregoing, the term of each Incentive Option granted
to an Employee who, at the time the Incentive Option is granted, owns stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or any Parent or Subsidiary (determined as
required by the Code as applied to Incentive Options) shall not be more than
five (5) years from the Option Grant Date.
8. Price and Consideration.
(a) Price. The per Share Option Price and the per share Purchase
Price for the Shares to be issued under the Plan shall be such price as is
determined by the Board but shall be subject to the following:
(i) with respect to Incentive Options:
(A) the Option Price shall in no event be less than one
hundred percent (100%) of the fair market value per Share of the Company's
Common Stock on the Option Grant Date, as determined by the Board; and
(B) granted to an Employee who, at the time the Option
is granted, owns stock representing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any Parent,
Subsidiary or Predecessor Corporation (determined as required by the Code as
applied to Incentive Options), the Option Price shall be at least one hundred
ten percent (110%) of the fair market value per Share of the Company's Common
Stock as of the Option Grant Date, as determined by the Board;
(ii) with respect to Non-Statutory Options and Stock Purchase
Rights:
(A) the Option Price and Purchase Price shall in no
event be less than eighty-five percent (85%) of the fair market value per Share
of the Company's Common Stock on the Option Grant Date or the date on which the
Stock Purchase Right is granted, as determined by the Board; and
(B) granted to an Optionee or Purchaser who, at the time
the Option is granted, owns stock representing more than ten percent (10%) of
the total combined voting power of all classes of Stock of the Company or any
Parent, Subsidiary or Predecessor Corporation, the Option Price shall be at
least one
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hundred ten percent (110%) and the Purchase Price shall be at least one hundred
percent (100%) of the fair market value per Share of the Company's Common Stock
on the Option Grant Date or the date on which the Stock Purchase Right is
granted, as determined by the Board.
(b) Fair Market Value. As provided herein, the "fair market value"
shall be determined by the Board; provided, however, that where there is a
public market for the Common Stock, the fair market value per Share shall be the
mean of the bid and asked prices (or the closing price per share if the Common
Stock is listed on the National Association of Securities Dealers Automated
Quotation National Market System of the Common Stock for the date of grant, as
reported in the Wall Street Journal (or, if not so reported, as otherwise
reported by the Nasdaq System) or, in the event the Common Stock is listed on a
stock exchange, the fair market value per Share shall be the closing price on
such exchange on the date of grant of the Option or Stock Purchase Right, as
reported in the Wall Street Journal.
(c) Form of Consideration. The form of consideration to be paid for
the Shares to be issued upon exercise of an Option or Stock Purchase Right,
including the method of payment, shall be determined by the Board and may
consist of cash, check, money order, promissory notes, Service previously
rendered or the surrender of Shares having a fair market value on the date of
surrender equal to the purchase price of the Shares, a combination thereof, or
such other consideration and method of payment for the issuance of Shares as is
permitted under applicable law.
(d) Promissory Notes. If the consideration for the Option Price or
Purchase Price is a promissory note, such note shall be a full recourse
promissory note executed by the Optionee or Purchaser. If a promissory note is
given as consideration, the Company may retain the Shares purchased upon
exercise of the Option or Stock Purchase Right in escrow as security for payment
of the amount due under the promissory note. The par value of the Shares, if
newly issued, shall be paid in cash or cash equivalents. The interest rate
payable under the terms of the promissory note shall not be less than the
minimum rate (if any) required to avoid the imputation of additional interest
under the Code. Subject to the foregoing, the Board (at its sole discretion)
shall specify the term, interest rate, amortization requirements (if any) and
other provisions of such note.
(e) Surrendered Common Stock. If the consideration for the Option
Price or Purchase Price is the surrender of previously acquired and owned Shares
of the Company, the Optionee or Purchaser will be required to make
representations and warranties satisfactory to the Company regarding the
Optionee's or Purchaser's title to the Shares used to effect the purchase
including, without limitation, representations and warranties that the Optionee
or Purchaser has good and marketable title to such Shares free and clear of any
and all liens, encumbrances, charges, equities, claims, security interests,
options or restrictions and has full power to deliver such Shares without
obtaining the consent or approval of any person or governmental authority other
than those which have already given consent or approval in a form satisfactory
to the Company. The value of the Shares used to effect the purchase shall be the
fair market value of those Shares as determined by the Board.
(f) Exercise/Sale. To the extent that an Option Agreement so
provides, and if the Shares are publicly traded, payment may be made all or in
part by the delivery (on a form prescribed by the Company) of an irrevocable
direction to a securities broker approved by the Company to sell Shares and to
deliver all or part of the sales proceeds to the Company in payment of all or
part of the Option Price and any withholding taxes.
(g) Exercise/Pledge. To the extent that an Option Agreement so
provides, and if the Shares are publicly traded, payment may be made all or in
part by the delivery (on a form prescribed by the Company) of an irrevocable
direction to pledge Shares to a securities broker or lender approved by the
Company, as security for a loan, and to deliver all or part of the loan proceeds
to the Company in payment of all or part of the Option Price and any withholding
taxes.
9. Limit on Value of Incentive Options. The aggregate fair market value
(determined as of the Option Grant Date of each Option) of the Shares with
respect to which Incentive Options are exercisable for the first time by the
Optionee during any calendar year shall not exceed One Hundred Thousand Dollars
($100,000), as determined pursuant to Section 422(d)(3) of the Code.
10. Exercise of Option.
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(a) General Terms. Any Option granted hereunder shall be exercisable
at such times and under such conditions as may be determined by the Board, which
conditions may include, without limitation, performance criteria with respect to
the Company and/or the Optionee or provisions for vesting over a period of time
conditioned upon continued Service. In all events, in order to exercise an
Option hereunder the Optionee shall execute a Stock Purchase Agreement and shall
deliver the required (or permitted) consideration to the Company. As a condition
to the exercise of an Option, the Board may require the Optionee pursuant to the
Option Agreement to agree to restrictions on the sale or other transfer of
ownership of the Common Stock acquired by an Optionee or to sell such Shares to
the Company upon termination of Service. In the case of an Optionee who is not
an officer of the Company, an Outside Director or a Consultant, an Option shall
become exercisable at least as rapidly as 20% per year over the five-year period
commencing on the Grant Date. Subject to the preceding sentence, the
exercisability provisions of any Option Agreement shall be determined by the
Board at its sole discretion.
(b) Survival of Options. Once an Option is granted, it may not be
terminated or cancelled prior to expiration of the Option Period set forth in
the Option Agreement; provided, however, that (i) an Option will terminate upon
termination of the Optionee's Eligible Person status as provided in the Option
Agreement pursuant to Paragraph 11 of this Plan; (ii) in no event shall the
Option term exceed 120 months from the Option Grant Date; and (iii) the
occurrence of a merger, reorganization. sale or other event as described in
Paragraph 13(b) of this Plan may result in termination of the Plan and Options
issued in accordance with the terms of Paragraph 13(b).
(c) Partial Exercise. An Option may be exercised from time to time
during the term of the Option in accordance with the provisions of the Plan as
to all or any portion of the Shares then exercisable under an Option. An Option
may not be exercised for a fraction of a Share.
(d) Time of Exercise. An Option shall be deemed to be exercised when
the Company has received at its principal business office: (i) written notice of
such exercise in accordance with the terms of the applicable Option Agreement
and given by the person entitled to exercise the Option; (ii) full payment for
the Shares with respect to which the Option is exercised; (iii) the executed
Stock Purchase Agreement; and (iv) any other representations or agreements
required by the terms of this Plan or the Option Agreement. Full payment may
consist of such consideration as is authorized by the Board as provided
hereunder.
(e) No Rights as Stockholder Until Exercise. 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 for which the Option is exercised, no right to receive dividends or
any other rights as a stockholder shall exist with respect to the Optioned
Stock. No adjustment will be made for a dividend or other right for which the
record date is prior to the date of issuance of the stock certificate evidencing
the shares for which the Option is exercised, except as provided in Paragraph 13
of this Plan.
(f) Issuance of Share Certificates. As soon as practicable after any
proper exercise of an Option in accordance with the provisions of this Plan and
payment in full for the exercised Shares, the Company shall deliver to the
Optionee at the principal business office of the Company, or such other place as
shall be mutually acceptable, a certificate or certificates representing the
Shares of Common Stock as to which the Option has been exercised, The time of
issuance and delivery of the certificate(s) representing the Shares of Common
Stock may be postponed by the Company for such period as may be required for it,
with reasonable diligence, to comply with any applicable listing requirements of
any national or regional securities exchange and any law or regulation
applicable to the issuance and delivery of such Shares.
(g) Reduction of Shares Upon Exercise. Exercise of an Option in any
manner shall result in a decrease in the number of Shares which 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.
11. Termination of Employment; Death or Disability.
(a) General. If an Optionee ceases to be an Eligible Person then,
except as provided in this Paragraph 11(a) or Paragraph 11(b) hereof, any Option
of the Optionee issued under the Plan, whether vested or non-vested, shall
terminate upon the terms set forth in the Option Agreement between the Company
and such Eligible Person. Unless such Option Agreement provides otherwise,
however, upon termination of the Optionee's
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Eligible Person status, any Option of the Optionee may be exercised no later
than the earlier of (i) thirty (30) days following the date of termination of
Eligible Person status; or (ii) the time such Option expires by its terms, to
the extent the Option was vested and exercisable on the date of termination of
Eligible Person status.
(b) Death or Disability. If an Optionee dies or becomes disabled,
the Optionee or such person or persons to whom the Optionee's rights under the
Option shall pass by the Optionee's will or by the laws of descent and
distribution, may exercise the Option to the extent it was vested and
exercisable on the date of death or disability no later than the earlier of (i)
six (6) months following the date of such death or disability; or (ii) the time
the Option expires by its terms.
(c) Definition of Termination. For purposes of the Plan, except as
provided in Paragraph 11(b) hereof, an Employee shall be deemed terminated as an
Eligible Person when such Employee's employment is deemed to no longer continue
within the meaning of Code Section 422 and the rules and regulations thereunder.
An Eligible Person who is not an Employee shall be deemed terminated when such
person no longer provides Service.
12. Non-Transferability of Options. The Options and any rights and
privileges granted under any Option Agreement are not transferable by the
Optionee, either voluntarily or by operation of law, other than by will and the
laws of descent and distribution and shall be exercisable during Optionee's
lifetime only by Optionee.
13. Adjustments Upon Changes in Capitalization.
(a) Reorganizations, Recapitalizations, Etc. If the outstanding
Shares of the Company are increased, decreased, changed into or exchanged for a
different number or kind of Shares of securities of the Company through
reorganization, recapitalization, reclassification, stock dividend (but only on
Common Stock), stock split, reverse stock split or other similar transaction,
or, if any other increase or decrease occurs in the number of Shares of the
Company without the receipt of consideration by the Company, then an appropriate
and proportional adjustment shall be made in: (i) the number and kind of Shares
covered by each outstanding Option; (ii) the number and kind of Shares available
for future grant of Options or Stock Purchase Rights; and (iii) the exercise
price per Share of Stock covered by each such outstanding Option. The granting
of stock options or bonuses to Eligible Persons and the conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without the receipt of consideration" for the purposes of this Paragraph 13. Any
new Shares that are made available or issued as a result of the appropriate
adjustments under this Paragraph (a) shall immediately become subject to the
terms and restrictions of the Plan, and Stock Option Agreement, Stock Purchase
Agreement (including the Buy-Sell Provision) and the Stock Issuance Agreement,
as applicable. Furthermore, and notwithstanding the foregoing, no adjustment
need be made under this Paragraph 13 if, upon the advice of counsel, the Board
determines that such adjustment may result in federal taxable income to the
holders of Options or Common Stock or other classes of the Company's securities.
(b) Corporate Transactions. Unless the applicable Stock Option
Agreement provides otherwise, in the event of a Corporate Transaction that
occurs before the Optionee's Service terminates, the Options may be assumed or
comparable options or awards substituted by the Successor Corporation, or a
parent or subsidiary thereof. The determination of option or award comparability
shall be made by the Board, and its determination shall be final, binding and
conclusive. In the event that such Successor Corporation refuses to assume all
Options on to substitute the Options with comparable options, the Options shall
become fully vested and exercisable immediately before the closing of the
Corporate Transaction. In any event, if the Options are not assumed or
substituted and were not exercised prior to the closing of the Corporate
Transaction, the Options will then terminate and cease to be exercisable on the
closing date of the Corporate Transaction. For purposes of this Paragraph, an
Option granted under the Plan shall be deemed to be assumed if, following a sale
of assets or merger, the Option confers the right to purchase, for each Share of
Optioned Stock subject to the Option immediately prior to such sale of assets or
merger, the consideration (whether stock, cash or other securities or property)
received in the sale of assets or merger by holders of Common Stock for each
Share held on the effective date of the Corporate transaction (and, if such
holders were offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding Shares); provided, however, that
if such consideration received in the sale of assets or merger was not solely
Common Stock of the Successor Corporation or its parent or subsidiary, the Board
may, with the consent of the Successor Corporation and the Optionee, provide for
the per share consideration to be
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received upon exercise of the Option to be solely Common Stock of the Successor
Corporation or its parent or subsidiary equal in fair market value (determined
as set forth in Section 8(b) hereof) to the per share consideration received by
holders of Common Stock in the sale of assets or merger. The Company can give no
assurance that any Options will be assumed or comparable options substituted by
the Successor Corporation or its parent or subsidiary.
(c) No Fractional Shares. No fractional Shares shall be issuable on
account of any action or occurrence under this Paragraph 13, and the aggregate
number of Shares into which Shares then covered by an Option, when changed as
the result of such action or occurrence, shall be reduced to the largest number
of whole Shares resulting from such action.
(d) Binding Effect of Board Determinations. All adjustments under
this Paragraph 13 shall be made by the Board, whose determination in that
respect shall be final and binding.
(e) No Other Adjustments. Except as expressly provided herein, no
issue 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
the Plan or any Options.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination, The Board may at any time and from
time to time suspend or terminate the Plan. The Board may also amend or revise
the Plan from time to time in such respects as the Board may deem advisable, but
any suspension, termination or revision of the Plan shall not affect the terms
of any Option or Stock Purchase Right previously granted under the Plan, unless
such suspension, termination on revision is pursuant to Paragraph 13(b) of this
Plan. Furthermore, without approval of the holders of the majority of the
outstanding Shares of the Company's Common Stock, no such revision or amendment
by the Board shall amend the Plan so as to:
(i) Increase the number of Shares subject to the Plan other
than in connection with an adjustment under Paragraph 13
of this Plan; or
(ii) Extend the term of the Plan beyond that provided in
Paragraph 6 hereof.
If required by applicable law, stockholder approval shall be
obtained of any amendments to the Plan.
(b) Effect of Termination. Except as otherwise provided in Paragraph
13 hereof, without the written consent of the Optionee, any such termination of
the Plan pursuant to this Paragraph 14 shall not affect Options or Stock
Purchase Rights already granted and such Options or Stock Purchase Rights shall
remain in full force and effect as if the Plan had not been terminated.
15. Conditions Upon Issuance of Shares. Options and Stock Purchase Rights
granted under the Plan are conditioned upon the Company obtaining any required
permit, if any, from appropriate governmental agencies, authorizing the Company
to grant such Options and Stock Purchase Rights upon terms and conditions
acceptable to the Company. Shares shall not be issued with respect to an Option
or Stock Purchase Right granted under the Plan 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 provisions of law, including,
without limitation, the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, the rules and regulations promulgated
thereunder by the United States government, the requirements of any stock
exchange upon which the Shares may then be listed, and any applicable state laws
and regulations 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 or a Stock Purchase Right, the Board may require the person exercising
such Option or Stock Purchase Right to execute any agreements approved by the
Board, and may require the person exercising such Option or Stock Purchase Right
to make any representation and warranty to the Company as may, in the judgment
of counsel to the Company, be required under applicable laws or regulations.
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16. Reservation of Shares. During the term of the Plan, the Company will
at all times reserve and keep available the number of Shares as shall be
sufficient to satisfy the requirements of the Plan. During the term of the Plan,
the Company will use its best efforts to seek to obtain from appropriate
regulatory agencies any requisite authorization in order to issue and sell such
number of Shares as shall be sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain from any such regulatory agency the
requisite authorization(s) deemed by the Company's counsel to be necessary to
the lawful issuance and sale of any Shares hereunder, or the inability of the
Company to confirm to its satisfaction that any issuance and sale of any Shares
hereunder will meet applicable legal requirements, shall relieve the Company of
any liability in respect to the non-issuance or sale of such Shares as to which
such requisite authority shall not have been obtained.
17. Taxes and Withholding of Taxes.
The grant of Options hereunder and the issuance of Shares pursuant
to the exercise of such Options on Stock Purchase Rights are conditioned upon
the Company reservation of the right to withhold, in accordance with any
applicable law, from any compensation payable to the Optionee or Purchaser any
taxes required to be withheld by federal, state, local or foreign law as a
result of the grant or exercise of such Options or Stock Purchase Rights.
18. Stockholder Approval of the Plan. Continuance of the Plan shall be
subject to approval by the holders of the outstanding voting stock of the
Company in accordance with applicable law within twelve (12) months before or
after the date the Plan is adopted by the Board. Any Options granted under the
Plan prior to obtaining such stockholder approval shall be granted upon the
conditions that the Options so granted: (a) shall not be exercisable prior to
such approval; and (b) shall become null and void ab initio if such stockholder
approval is not obtained.
19. Liability of Company. The Company, its Parent or any Subsidiary, in
existence or which hereafter comes into existence, will not be liable to an
Optionee granted an Incentive Option or other person if it is determined for any
reason by the Internal Revenue Service or any court having jurisdiction that any
Incentive Options granted hereunder are not incentive stock options under the
Code.
20. Notices. Any notice to be given to the Company pursuant to the
provisions of the Plan shall be delivered personally and addressed to the
Company at its principal office and any notice to be given to an Optionee or
Purchaser shall be delivered personally or addressed to such Optionee or
Purchaser at the address last given to the Company by such Optionee or Purchaser
in writing. Any notice under this Agreement shall be deemed duly given when
enclosed in a properly sealed envelope or wrapper addressed as aforesaid,
registered or certified, and deposited, postage and registry or certification
fee prepaid, in a post office, branch post office on mailbox regularly
maintained by the United States Postal Service. It shall be the obligation of
each Optionee and Purchaser and each transferee holding Shares to give written
notice of such person's direct mailing address to the Company.
21. Terms and Conditions of Stock Purchase Rights.
(a) Stock Issuance Agreement. Each award or sale of Shares under the
Plan (other than upon exercise of an Option) shall be evidenced by a Stock
Issuance Agreement between the Purchaser and the Company. Such award or sale
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 Board deems appropriate for inclusion in a Stock Issuance
Agreement. The provisions of the various Stock Issuance Agreements entered into
under the Plan need not be identical.
(b) Duration of Offers and Nontransferability of Rights. Any right
to acquire Shares under the Plan (other than an Option) shall automatically
expire if not exercised by the Purchaser within 30 days after the grant of such
right was communicated to the Purchaser by the Company. Such right shall not be
transferable and shall be exercisable only by the Purchaser to whom such right
was granted.
(c) Purchase Price. The Purchase Price of Shares to be offered under
the Plan and the form of payment are described in Paragraph 8.
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<PAGE>
(d) Withholding Taxes. As a condition to the exercise of the Stock
Purchase Right and the purchase of Shares, the Purchaser shall make such
arrangements as the Board may require for the satisfaction of any federal,
state, local or foreign withholding tax obligations that may arise in connection
with such purchase.
(e) Restrictions on Transfer of Shares and Minimum Vesting. Any
Shares awarded or sold under the Plan shall be subject to such special
forfeiture conditions, rights of repurchase, rights of first refusal and other
transfer restrictions as the Board may determine. Such restrictions shall be set
forth in the applicable Stock Issuance Agreement and shall apply in addition to
any restrictions that may apply to holders of Shares generally. In the case of a
Purchaser who is not an officer of the Company, an Outside Director or a
Consultant, any right to repurchase the Purchaser's Shares at the original
Purchase Price (if any) upon termination of the Purchaser's Service shall lapse
at least as rapidly as 20% per year over the five-year period commencing on the
date of the award or sale of the Shares. Any such right may be exercised only
within 90 days after the termination of the Purchaser's Service for cash or for
cancellation of indebtedness incurred in purchasing the Shares.
(f) Accelerated Vesting. Unless the applicable Stock Issuance
Agreement provides otherwise, any right to repurchase a Purchaser's unvested
Shares at the original Purchase Price (if any) upon termination of the
Purchaser's Service shall lapse and all of such Shares shall become vested if
(i) the Company is subject to a Corporate Transaction before the Purchaser's
Service terminates and (ii) the repurchase right is not assigned to the
Successor Corporation or to its parent or subsidiary.
22. No Enlargement of Service Rights. The establishment and maintenance of
the Plan is purely voluntary on the part of the Company, and the continuance of
the Plan shall not be deemed to constitute a contract between the Company and
any Optionee or Purchaser, or to be consideration for or a condition of the
Service of any Optionee or Purchaser. Nothing contained in the Plan shall be
deemed to give any Optionee or Purchaser the right to be retained in the Service
of the Company, its Parent, Subsidiary or a Successor Corporation, or to
interfere with the right of the Company or any such corporations to discharge or
retire any Optionee or Purchaser at any time for any reason, with or without
cause.
23. Legends on Certificates.
(a) Federal Law, All certificates evidencing Shares issued under the
Plan shall bear the following legend:
"THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED,
ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE
TERMS OF WRITTEN AGREEMENTS BETWEEN THE COMPANY AND THE REGISTERED HOLDER
OF THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES). SUCH
AGREEMENTS GRANT TO THE COMPANY CERTAIN RIGHTS OF FIRST REFUSAL UPON AN
ATTEMPTED TRANSFER OF THE SHARES AND CERTAIN REPURCHASE RIGHTS UPON
TERMINATION OF SERVICE WITH THE COMPANY. THE SECRETARY OF THE COMPANY WILL
UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENTS TO THE HOLDER
HEREOF WITHOUT CHARGE."
All certificates evidencing Shares in an unregistered transaction shall bear the
following legend (and such other restrictive legends as are required or deemed
advisable under the provisions of any applicable law):
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH
ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL,
THAT SUCH REGISTRATION IS NOT REQUIRED."
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(b) State Legend. If required by applicable state authorities, each
certificate representing the Options and Shares issuable under the Plan shall be
endorsed on its face with any legends required by such authorities.
24. Invalid Provisions. In the event that any provision of the Plan is
found to be invalid or otherwise unenforceable under any applicable law, such
invalidity or unenforceability shall not be construed as rendering any other
provisions contained herein as invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid or unenforceable provision was not contained herein.
25. Financial Reports. The Company each year shall furnish to Optionees,
Purchasers and stockholders who have received Shares under the Plan its balance
sheet and income statement, unless such Optionees, Purchasers or stockholders
are key Employees whose duties with the Company assure them access to equivalent
information. Such balance sheet and income statement need not be audited.
26. Modification, Extension and Assumption of Options. Within the
limitations of the Plan, the Board may modify, extend or assume outstanding
Options or may accept the cancellation of outstanding Options (whether granted
by the Company or another issuer) in return for the grant of new Options for the
same or a different number of Shares and at the same or a different Option
Price. The foregoing notwithstanding, no modification of an Option shall,
without the consent of the Optionee, impair the Optionee's rights or increase
the Optionee's obligations under such Option. In connection with a corporate
reorganization, merger, consolidation, acquisition or similar event, the Board
may also assume or substitute outstanding options granted by the Company or by
another issuer for options granted under the Plan, in compliance with Section
424 of the Code.
27. Repurchase of Vested Shares, In the event that the Company elects to
repurchase any vested Shares upon a termination of Service, the Company shall
pay to the Optionee (or Purchaser) the higher of the Option Price (or Purchase
Price) and the fair market value of such Shares on the date this Company
exercises its repurchase right. Such repurchase right shall be exercised within
sixty (60) days after termination of Service.
28. Governing Law. The Plan shall be governed and construed in accordance
with the laws of Delaware (except for its choice-of-law provisions).
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