2000 INCENTIVE PLAN
OF
ICRYSTAL, INC.
Section 1. PURPOSE OF PLAN
The purpose of this 2000 Incentive Plan (this "PLAN") of iCrystal, Inc., a
Delaware corporation (the "COMPANY"), is to enable the Company to attract,
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retain and motivate their employees and consultants by providing for or
increasing the proprietary interests of such employees and consultants in the
Company, and to enable the Company to attract, retain and motivate its
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non-employee directors and further align their interests with those of the
shareholders of the Company by providing for or increasing the proprietary
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interests of such directors in the Company. The Plan is intended to permit the
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grant of Awards (as defined below) meeting the requirements of (a) Rule 701
promulgated under the Securities Act of 1933, as amended (the "SECURITIES ACT"),
as such rule may be amended from time to time, and (b) Section 25102(o) of the
Corporations Code of the State of Delaware (the "CORPORATIONS CODE"), and thus
offers and sales of securities pursuant to the Plan are intended to be exempt
from (i) the registration requirements of the Securities Act if and for so long
as the Company is not subject to the reporting requirements of Section 13 or
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15(d) of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"),
and (ii) the qualification requirements of Section 25110 of the Corporations
Code. Nothing in this Plan shall be deemed, however, to prohibit the granting of
Awards in compliance with federal and state securities laws other than pursuant
to Rule 701 and Section 25102(o).
Section 2. PERSONS ELIGIBLE UNDER PLAN
Any employee, non-employee directors, independent contractors or consultants of
the Company or any of its subsidiaries (each, a "PARTICIPANT") shall be eligible
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to be considered for the grant of Awards (as defined in this Plan) under this
Plan.
Section 3. AWARDS
(a) The Administrator (as hereinafter defined), on behalf of the Company, is
authorized under this Plan to enter into any type of arrangement with a
Participant that is not inconsistent with the provisions of this Plan and
that, by its terms, involves or might involve the issuance of (i) shares of
Common Stock of the Company ("COMMON STOCK"), or (ii) a Derivative Security
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(as such term is defined in Rule 16a-1 promulgated under the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), as such Rule may be
amended from time to time) with an exercise or conversion privilege at a
price related to the Common Stock or with a value derived from the value of
the Common Stock. The entering into of any such arrangement is referred to
herein as the "GRANT" of an "AWARD."
(b) Awards are not restricted to any specified form or structure and may
include, without limitation, sales or bonuses of stock, restricted stock,
stock options, reload stock options, stock purchase warrants, other rights
to acquire stock, securities convertible into or redeemable for stock,
stock appreciation rights, limited stock appreciation rights, phantom
stock, dividend equivalents, performance units or performance shares, and
an Award may consist of one such security or benefit, or two or more of
them in tandem or in the alternative.
(c) Common Stock and Derivative Securities may be issued pursuant to an Award
for any lawful consideration as determined by the Administrator, including,
without limitation, services rendered by the recipient of such Award.
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(d) Subject to the provisions of this Plan, the Administrator, in its sole and
absolute discretion, shall determine all of the terms and conditions of
each Award granted under this Plan, which terms and conditions may include,
among other things:
(i) a provision permitting the recipient of such Award, including any
recipient who is a director or officer of the Company, to pay the
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purchase price of the Common Stock or Derivative Securities or other
property issuable pursuant to such Award, or such recipient's tax
withholding obligation with respect to such issuance, in whole or in
part, by any one or more of the following:
(A) the delivery of cash;
(B) the delivery of previously owned shares of capital stock of the
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Company (including "PYRAMIDING") or other property, provided that
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the Company is not then prohibited from purchasing or acquiring
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shares of its capital stock or such other property;
(C) a reduction in the amount of Common Stock or Derivative
Securities or other property otherwise issuable pursuant to such
Award; or
(D) the delivery of a promissory note, the terms and conditions of
which shall be determined by the Administrator;
(ii) a provision conditioning or accelerating the receipt of benefits
pursuant to such Award, either automatically or in the discretion of
the Administrator, upon the occurrence of specified events, including,
without limitation, a change of control of the Company, an acquisition
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of a specified percentage of the voting power of the Company, the
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dissolution or liquidation of the Company, a sale of substantially all
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of the property and assets of the Company or an event of the type
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described in Section 7 hereof; or
(iii)a provision required in order for such Award to qualify as an
incentive stock option (an "INCENTIVE STOCK OPTION") under Section 422
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of the Internal Revenue Code ("CODE"), provided that the recipient of
such Award is eligible under the Code to receive an Incentive Stock
Option. Stock options which do not so qualify are referred to as
"NONQUALIFIED STOCK OPTIONS."
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Section 4. STOCK SUBJECT TO PLAN
(a) The aggregate number of shares of Common Stock that may be issued or
issuable pursuant to all Awards (including Incentive Stock Options,
Nonqualified Stock Options and other Awards) granted under this Plan shall
not exceed three million (3,000,000) shares of Common Stock and all of
which shall be subject to adjustment as provided in Section 8 hereof.
(b) For purposes of Section 4(a) hereof, the aggregate number of shares of
Common Stock issued and issuable pursuant to all Awards granted under this
Plan shall at any time be deemed to be equal to the sum of the following:
(i) the number of shares of Common Stock that were issued prior to such
time pursuant to Awards granted under this Plan, other than Common
Stock that was subsequently reacquired by the Company pursuant to the
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terms and conditions of such Awards and with respect to which the
holder
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thereof received no benefits of ownership such as dividends; plus
(ii) the number of shares of Common Stock that were otherwise issuable
prior to such time pursuant to Awards granted under this Plan, but
that were withheld by the Company as payment of the purchase price of
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the Common Stock issued pursuant to such Awards or as payment of the
recipient's tax withholding obligation with respect to such issuance;
plus
(iii)the maximum number of shares of Common Stock issuable at or after
such time pursuant to Awards granted under this Plan prior to such
time.
(c) In the event any Participant is deemed to be a "COVERED EXECUTIVE" pursuant
to Section 162(m) of the Code and the exercise of all or a portion of the
Awards would preclude the Company from taking full advantage of the
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compensation deductions arising from the grant of such Awards, together
with all other taxable compensation payable to Participant by the Company,
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by virtue of the limitations imposed by Section 162(m) of the Code, then
the number of shares as to which Awards shall be exercisable during the
applicable tax year shall be reduced to such number as would allow the
Company to fully deduct the compensation payable to Participant.
(d) If and for so long as the Company is not subject to the reporting
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requirements of Section 13 or 15(d) of the Exchange Act, the amount of
securities offered and sold under the Plan shall not exceed the limitations
set forth in Rule 701 promulgated under the Securities Act, as such rule
may be amended from time to time.
Section 5. DURATION OF PLAN
No Awards shall be granted under this Plan after April 4, 2010. Although Common
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Stock may be issued after April 4, 2010 pursuant to Awards granted prior to such
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date, no Common Stock shall be issued under this Plan after April 4, 2010 (the
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"TERMINATION DATE").
Section 6. ADMINISTRATION OF PLAN
(a) This Plan shall be administered by an Administrator of the Board (the
"ADMINISTRATOR") consisting of two or more directors. In the event that the
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Company becomes "PUBLICLY HELD" within the meaning of Section 162(m) of the
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Code, then, with respect to any Awards intended to qualify for the
"PERFORMANCE-BASED COMPENSATION" exception in Section 162(m) of the Code,
the Administrator shall, to the extent necessary, consist of two or more
directors each of whom is an "OUTSIDE DIRECTOR" within the meaning of
Section 162(m) of the Code and such Award shall not be subject to Board
approval.
(b) Subject to the provisions of this Plan, the Administrator shall be
authorized and empowered to do all things necessary or desirable in
connection with the administration of this Plan, including, without
limitation, the following:
(i) adopt, amend and rescind rules and regulations relating to this Plan;
(ii) determine which persons are Participants and to which of such
Participants, if any, Awards shall be granted hereunder;
(iii)grant Awards to Participants and determine the terms and conditions
thereof, including the number of shares of Common Stock
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issuable pursuant thereto;
(iv) accelerate the exercisability of an Award or extend the period during
which an owner of an Award may exercise his or her rights under such
Award (but not beyond the Termination Date);
(v) determine whether, and the extent to which, adjustments are required
pursuant to Section 7 hereof; and
(vi) interpret and construe this Plan and the terms and conditions of all
Awards granted hereunder.
The interpretation and construction by the Administrator of any term or
provision of the Plan or of any Award granted under it, including without
limitation any determination of adjustments required pursuant to Section 7
hereof, shall be conclusive, unless otherwise determined by the Board of
Directors of the Company (the "BOARD") in which event such action by the
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Board shall be conclusive, and such interpretation and construction shall
be binding upon all those who hold or are eligible to receive options under
the Plan, and all persons claiming under them. The Board or Administrator
may from time to time adopt rules and regulations for carrying out this
Plan and, subject to the provisions of this Plan, may prescribe the form or
forms of the instruments evidencing any Award granted under this Plan.
(c) The Administrator will provide to each holder annual financial statements
of the Company to the extent required by law.
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Section 7. ADJUSTMENTS
If the outstanding securities of any class then subject to this Plan are
increased, decreased or exchanged for or converted into cash, property or a
different number or kind of securities, or if cash, property or securities are
distributed in respect of such outstanding securities, in either case as a
result of a reorganization, merger, consolidation, recapitalization,
restructuring, reclassification, dividend (other than a regular, quarterly cash
dividend) or other distribution, stock split, reverse stock split or the like,
or if substantially all of the property and assets of the Company are sold,
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then, unless the terms of such transaction shall provide otherwise, the
Administrator shall make appropriate and proportionate adjustments in (a) the
number and type of shares or other securities or cash or other property that may
be acquired pursuant to Incentive Stock Options and other Awards theretofore
granted under this Plan, (b) the maximum number and type of shares or other
securities that may be issued pursuant to Incentive Stock Options, Nonqualified
Stock Options and other Awards thereafter granted under this Plan, and (c) the
maximum number of Common Shares that may be subject to stock options or stock
appreciation rights granted during any twelve-month period to any Participant,
as provided in Section 4(c) hereof; provided, however, that no adjustment shall
be made to the number of shares of Common Stock that may be acquired pursuant to
outstanding Incentive Stock Options or the maximum number of shares of Common
Stock with respect to which Incentive Stock Options may be granted under this
Plan to the extent such adjustment would result in such options being treated as
other than Incentive Stock Options; provided, further, that no such adjustment
shall be made to the extent the Administrator determines that such adjustment
would result in the disallowance of a federal income tax deduction for
compensation attributable to Awards hereunder by causing such compensation to be
other than "PERFORMANCE-BASED COMPENSATION" within the meaning of Section
162(m)(4)(C) of the Code.
Section 8. OTHER PROVISIONS
Awards granted under this Plan shall contain such other terms and provisions
which are not inconsistent with this Plan as the Board or Administrator may
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authorize, including but not limited to (a) vesting schedules governing the
exercisability of such Awards, (b) provisions for acceleration of such vesting
schedules in certain events, (c) arrangements whereby the Company may fulfill
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any tax withholding obligations it may have in connection with the exercise of
such Awards, (d) provisions imposing restrictions upon the transferability of
stock acquired on exercise of such Award, whether required by this Plan or
applicable securities laws or imposed for other reasons, and (e) provisions
regarding the termination or survival of any such Award upon the optionee's
death, retirement or other terminations of employment and the extent, if any, to
which any such Award may be exercised after such event. Incentive Stock Options
shall contain the terms and provisions required of them under the Code.
Section 9. FINANCIAL ASSISTANCE
The Company is vested with authority under this Plan to assist any Participant
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to whom an Award is granted hereunder (including any director or officer of the
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Company or any of its subsidiaries who is also a Participant) in the payment of
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the purchase price payable on exercise of that Award, by lending the amount of
such purchase price to such Participant on such terms and at such rates of
interest and upon such security (or unsecured) as shall have been authorized by
or under authority of the Board.
Section 10. COMPANY'S RIGHT OF FIRST PURCHASE AND PARTICIPATION IN
COMMON STOCK TRANSACTIONS
(a) While and so long as the Common Stock or any stock of any other class
subject to this Plan has not been Publicly Traded (as hereinafter defined)
for at least ninety (90) days, any stock issued on exercise of any Award
granted under this Plan shall be subject to the Company's right of first
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purchase. By virtue of that right, (a) such stock may not be transferred
during the holder's lifetime to any person other than members of the
holder's Immediate Family, a partnership whose members are the holder
and/or members of the holder's Immediate Family, or a trust for the benefit
of the holder and/or members of the holder's Immediate Family, unless such
transfer occurs within fifteen (15) days following the expiration of thirty
(30) days after the Company has been given a written notice which correctly
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identified the prospective transferee or transferees and which offered the
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Company an opportunity to purchase such stock at its Fair Market Value in
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cash, and such offer was not accepted within thirty (30) days after the
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Company's receipt of that notice; and (b) upon the holder's death, the
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Company shall have the right to purchase all or some of such stock at its
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Fair Market Value within nine (9) months after the date of death. This
right of first purchase shall continue to apply to any such stock after the
transfer during the holder's lifetime of that stock to a member of the
holder's Immediate Family or to a family partnership or trust as aforesaid,
and after any transfer of that stock with respect to which the Company
expressly waived its right of first purchase without also waiving it as to
any subsequent transfers thereof, but it shall not apply after a transfer
of that stock with respect to which the Company was offered but did not
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exercise or waive its right of first purchase or more than nine months
after the holder's death. The Company may assign all or any portion of its
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right of first purchase to any one or more of its shareholders, or to a
pension or retirement plan or trust for Participants of the Company, who
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may then exercise the right so assigned. Stock certificates evidencing
stock subject to this right of first purchase shall be appropriately
legended to reflect that right.
(b) While and so long as the Common Stock or any stock of any other class
subject to this Plan has not been Publicly Traded (as hereinafter defined)
for at least ninety (90) days, upon the exercise of any Awards granted
under the Plan, the Company may require that the Awards granted to
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Participants be subject to such requirements as the Company may specify,
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including a requirement that a Participant participate in transactions
involving the purchase or exchange of all, or substantially all, of the
Common Stock of the Company (a "TRANSACTION"). To the full extent provided
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to any other holder of Common Stock of the Company on the date a
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Participant exercises the Award, Participants shall be entitled to
participate in any Transaction on the same basis as the other holders of
Common Stock of the Company.
Section 11. LIMITATIONS OF RIGHTS OF PARTICIPANTS
(a) A Participant under this Plan shall not have any interest in the shares or
in any dividends paid thereon, and shall not have any of the rights or
privileges of a shareholder with respect to such shares, until the
certificates therefor have been issued and delivered to him or her.
(b) No shares of stock issuable under the Plan shall be issued and no
certificate therefor delivered unless and until, in the opinion of legal
counsel for the Company, such securities may be issued and delivered
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without causing the Company to be in violation of or to incur any liability
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under any federal, state or other securities law, or any other requirement
of law or of any regulatory body having jurisdiction over the Company.
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(c) The receipt of an option does not give the holder any right to continued
employment by the Company or a subsidiary for any period, nor shall the
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granting of the option or the issuance of shares on exercise thereof give
the Company or any subsidiary any right to the continued services of the
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holder for any period.
(d) Nothing contained in this Plan shall constitute the granting of an Award
hereunder, which shall occur only pursuant to express authorization by the
Board or the Administrator.
Section 12. AMENDMENT AND TERMINATION
The Board may alter, amend, suspend or terminate this Plan, provided that no
such action shall deprive a holder who has not consented thereto of any Award
granted to the holder pursuant to this Plan or of any of the holder's rights
under such Award. Except herein provided, no such action of the Board, unless
taken with the approval of the shareholders of the Company, may:
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(a) increase the maximum number of shares for which Awards granted under this
Plan may be exercised;
(b) reduce the minimum permissible exercise price;
(c) extend the ten-year duration of the Plan set forth herein;
(d) alter the class of Employees eligible to receive Awards under the Plan; or
(e) amend the Plan in any other manner which the Board, in its discretion,
determines should become effective only if approved by the shareholders
even though such shareholder approval is not expressly required by this
Plan.
If an amendment to this Plan would (i) increase the maximum number of shares of
Common Stock that may be issued pursuant to (a) all Awards granted under this
Plan, (b) all Incentive Stock Options granted under this Plan, or (c) Awards
granted under this Plan during any calendar year to any one Participant, (ii)
change the class of persons eligible to receive Awards under this Plan,
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(iii) otherwise materially increase the benefits hereunder accruing to
participants who are subject to Section 16 of the Exchange Act in a manner not
specifically contemplated herein or (iv) affect this Plan's compliance with Rule
16b-3 or applicable provisions of the Code, as amended from time to time, the
amendment shall be subject to approval by the Company's shareholders to the
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extent required to comply with Rule 16b-3, Sections 422 and 162(m) of the Code,
and other applicable provisions of or rules under the Code, as amended from time
to time.
Section 13. CERTAIN DEFINITIONS
As used in this Plan, the following terms shall have the following meanings:
"FAIR MARKET VALUE" shall mean the fair market value of the Common Stock. If the
Common Stock is not publicly traded, fair market value shall be determined by
the Board or the Administrator and may be computed by any method which the Board
or the Administrator in good faith believes reflects the fair market value of
the Common Stock on the date of such determination, including without
limitation, reference to the book value of the Common Stock and reference to the
most recent price at which the Common Stock, or a Derivative Security of the
Company, has been issued in an arms-length transaction, provided however, that
Fair Market Value shall not be less than the exercise price paid by the
Participant to receive the subject Common Stock. If the Common Stock is publicly
traded, fair market value shall be the closing sale price per share of Common
Stock, if the Common Stock is listed on a national securities exchange or on the
NASDAQ National Market, or if the Common Stock is not then so listed, the
closing bid price per share of Common Stock, on the day in question (or, if such
day is not a trading day or if no sales of Common Stock were made on such day,
on the nearest preceding trading day on which sales of Common Stock were made),
as reported in THE WALL STREET JOURNAL, or, if trading in the Common Stock is
not then reported in THE WALL STREET JOURNAL, at such closing sale or bid price
as may then appear in what the Board or the Administrator in its judgment then
deems to be the most nearly comparable listing or reporting service.
An individual's "IMMEDIATE FAMILY" includes only his or her spouse, parents or
other ancestors, and children and other direct descendants of that individual or
of his or her spouse (including such ancestors and descendants by adoption).
Corporate stock is "PUBLICLY TRADED" if stock of that class is listed or
admitted to unlisted trading privileges on a national securities exchange or on
the NASDAQ National Market or if sales or bid and offer quotations are reported
for that class of stock in the automated quotation system ("NASDAQ") operated by
the National Association of Securities Dealers, Inc.
Section 14. EFFECTIVE DATE OF PLAN
This Plan shall be effective as of April 4, 2000, the date upon which it was
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approved by the Board of Directors of the Company, subject to approval by the
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Company's stockholders.
