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EXHIBIT 10.2
TVIA, INC.
Amended and Restated
2000 STOCK INCENTIVE PLAN
(Adopted by the Board on March 20, 2000)
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TABLE OF CONTENTS
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SECTION 1. ESTABLISHMENT AND PURPOSE.................................. 1
SECTION 2. DEFINITIONS................................................ 1
(a) "Affiliate"................................................ 1
(b) "Award".................................................... 1
(c) "Board of Directors"....................................... 1
(d) "Change in Control"........................................ 1
(e) "Code"..................................................... 2
(f) "Committee"................................................ 2
(g) "Company".................................................. 2
(h) "Consultant"............................................... 2
(i) "Employee"................................................. 3
(j) "Exchange Act"............................................. 3
(k) "Exercise Price"........................................... 3
(l) "Fair Market Value"........................................ 3
(m) "ISO"...................................................... 3
(n) "Nonstatutory Option" or "NSO"............................. 3
(o) "Offeree".................................................. 3
(p) "Option"................................................... 3
(q) "Optionee"................................................. 4
(r) "Outside Director"......................................... 4
(s) "Parent"................................................... 4
(t) "Participant".............................................. 4
(u) "Plan"..................................................... 4
(v) "Purchase Price"........................................... 4
(w) "Restricted Share"......................................... 4
(x) "Restricted Share Agreement ".............................. 4
(y) "SAR"...................................................... 4
(z) "SAR Agreement"............................................ 4
(aa) "Service".................................................. 4
(bb) "Share".................................................... 4
(cc) "Stock".................................................... 4
(dd) "Stock Option Agreement"................................... 4
(ee) "Stock Purchase Agreement"................................. 4
(ff) "Stock Unit"............................................... 4
(gg) "Stock Unit Agreement"..................................... 5
(hh) "Subsidiary"............................................... 5
(ii) "Total and Permanent Disability"........................... 5
SECTION 3. ADMINISTRATION............................................. 5
(a) Committee Composition...................................... 5
(b) Committee Procedures....................................... 5
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(c) Committee Responsibilities................................. 5
SECTION 4. ELIGIBILITY................................................ 7
(a) General Rule............................................... 7
(b) Outside Directors.......................................... 7
(c) Limitation On Grants....................................... 9
(d) Ten-Percent Stockholders................................... 9
(e) Attribution Rules.......................................... 9
(f) Outstanding Stock.......................................... 9
SECTION 5. STOCK SUBJECT TO PLAN...................................... 9
(a) Basic Limitation........................................... 9
(b) Annual Increase in Shares.................................. 9
(c) Additional Shares.......................................... 10
(d) Dividend Equivalents....................................... 10
SECTION 6. RESTRICTED SHARES.......................................... 10
(a) Restricted Stock Agreement................................. 10
(b) Payment for Awards......................................... 10
(c) Vesting.................................................... 10
(d) Voting and Dividend Rights................................. 11
SECTION 7. OTHER TERMS AND CONDITIONS OF AWARDS OR SALES.............. 11
(a) Duration of Offers and Nontransferability of Rights........ 11
(b) Purchase Price............................................. 11
(c) Withholding Taxes.......................................... 11
(d) Restrictions on Transfer of Shares......................... 11
SECTION 8. TERMS AND CONDITIONS OF OPTIONS............................ 11
(a) Stock Option Agreement..................................... 11
(b) Number of Shares........................................... 11
(c) Exercise Price............................................. 12
(d) Withholding Taxes.......................................... 12
(e) Exercisability and Term.................................... 12
(f) Nontransferability......................................... 12
(g) Exercise of Options Upon Termination of Service............ 12
(h) Effect of Change in Control................................ 12
(i) Leaves of Absence.......................................... 13
(j) No Rights as a Stockholder................................. 13
(k) Modification, Extension and Renewal of Options............. 13
(l) Restrictions on Transfer of Shares......................... 13
(m) Buyout Provisions.......................................... 13
SECTION 9. PAYMENT FOR SHARES......................................... 14
(a) General Rule............................................... 14
(b) Surrender of Stock......................................... 14
(c) Services Rendered.......................................... 14
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(d) Cashless Exercise.......................................... 14
(e) Exercise/Pledge............................................ 14
(f) Promissory Note............................................ 14
(g) Other Forms of Payment..................................... 14
SECTION 10. STOCK APPRECIATION RIGHTS.................................. 14
(a) SAR Agreement.............................................. 14
(b) Number of Shares........................................... 15
(c) Exercise Price............................................. 15
(d) Exercisability and Term.................................... 15
(e) Effect of Change in Control................................ 15
(f) Exercise of SARs........................................... 15
(g) Special Holding Period..................................... 15
(h) Special Exercise Window.................................... 16
(i) Modification or Assumption of SARs......................... 16
SECTION 11. STOCK UNITS................................................ 16
(a) Stock Unit Agreement....................................... 16
(b) Payment for Awards......................................... 16
(c) Vesting Conditions......................................... 16
(d) Voting and Dividend Rights................................. 16
(e) Form and Time of Settlement of Stock Units................. 17
(f) Death of Recipient......................................... 17
(g) Creditors' Rights.......................................... 17
SECTION 12. ADJUSTMENT OF SHARES....................................... 17
(a) Adjustments................................................ 17
(b) Dissolution or Liquidation................................. 18
(c) Reorganizations............................................ 18
(d) Reservation of Rights...................................... 18
SECTION 13. DEFERRAL OF AWARDS......................................... 18
SECTION 14. AWARDS UNDER OTHER PLANS................................... 19
SECTION 15. PAYMENT OF DIRECTOR'S FEES IN SECURITIES................... 19
(a) Effective Date............................................. 19
(b) Elections to Receive NSOs, Restricted Shares or Stock Units 19
(c) Number and Terms of NSOs, Restricted Shares or Stock Units. 19
SECTION 16. LEGAL AND REGULATORY REQUIREMENTS.......................... 20
SECTION 17. WITHHOLDING TAXES.......................................... 20
(a) General.................................................... 20
(b) Share Withholding.......................................... 20
SECTION 18. LIMITATION ON PARACHUTE PAYMENTS........................... 20
(a) Scope of Limitation........................................ 20
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(b) Basic Rule................................................. 20
(c) Reduction of Payments...................................... 20
(d) Overpayments and Underpayments............................. 21
(e) Related Corporations....................................... 21
SECTION 19. NO EMPLOYMENT RIGHTS....................................... 21
SECTION 20. DURATION AND AMENDMENTS.................................... 22
(a) Term of the Plan........................................... 22
(b) Right to Amend or Terminate the Plan....................... 22
(c) Effect of Amendment or Termination......................... 22
SECTION 21. EXECUTION.................................................. 22
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TVIA, INC.
AMENDED AND RESTATED
2000 STOCK INCENTIVE PLAN
SECTION 1. ESTABLISHMENT AND PURPOSE.
The Plan was adopted by the Board of Directors effective March 20, 2000 and
most recently amended on July 11, 2000. The purpose of the Plan is to promote
the long-term success of the Company and the creation of stockholder value by
(a) encouraging Employees, Outside Directors and Consultants to focus on
critical long-range objectives, (b) encouraging the attraction and retention of
Employees, Outside Directors and Consultants with exceptional qualifications and
(c) linking Employees, Outside Directors and Consultants directly to stockholder
interests through increased stock ownership. The Plan seeks to achieve this
purpose by providing for Awards in the form of Restricted Shares, Stock Units,
Options (which may constitute incentive stock options or nonstatutory stock
options) or stock appreciation rights.
SECTION 2. DEFINITIONS.
(a) "Affiliate" shall mean any entity other than a Subsidiary, if the
Company and/or one of more Subsidiaries own not less than 50% of such entity.
(b) "Award" shall mean any award of an Option, a SAR, a Restricted Share
or a Stock Unit under the Plan.
(c) "Board of Directors" shall mean the Board of Directors of the
Company, as constituted from time to time.
(d) "Change in Control" shall mean the occurrence of any of the following
events:
(i) A change in the composition of the Board of Directors occurs, as
a result of which fewer than two-thirds of the incumbent directors are
directors who either:
(A) Had been directors of the Company on the "look-back date" (as
defined below) (the "original directors"); or
(B) Were elected, or nominated for election, to the Board of
Directors with the affirmative votes of at least a majority of the
aggregate of the original directors who were still in office at the
time of the election or nomination and the directors whose election
or nomination was previously so approved (the "continuing
directors"); or
(ii) Any "person" (as defined below) who by the acquisition or
aggregation of securities, is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 50% or
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more of the combined voting power of the Company's then outstanding
securities ordinarily (and apart from rights accruing under special
circumstances) having the right to vote at elections of directors (the
"Base Capital Stock"); except that any change in the relative beneficial
ownership of the Company's securities by any person resulting solely from
a reduction in the aggregate number of outstanding shares of Base Capital
Stock, and any decrease thereafter in such person's ownership of
securities, shall be disregarded until such person increases in any
manner, directly or indirectly, such person's beneficial ownership of any
securities of the Company;
(iii) The consummation of a merger or consolidation of the
Corporation 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
(iv) The sale, transfer or other disposition of all or substantially
all of the Company's assets.
For purposes of subsection (d)(i) above, the term "look-back" date shall
mean the later of (1) March 20, 2000 or (2) the date 24 months prior to the
date of the event that may constitute a Change in Control.
For purposes of subsections (d)(ii) above, the term "person" shall have the
same meaning as when used in Sections 13(d) and 14(d) of the Exchange Act but
shall exclude (1) a trustee or other fiduciary holding securities under an
employee benefit plan maintained by the Company or a Parent or Subsidiary and
(2) a corporation owned directly or indirectly by the stockholders of the
Company in substantially the same proportions as their ownership of the Stock.
Any other provision of this Section 2(d) notwithstanding, a transaction
shall not constitute a Change in Control 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.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(f) "Committee" shall mean the committee designated by the Board of
Directors, which is authorized to administer the Plan, as described in Section
3 hereof.
(g) "Company" shall mean Tvia, Inc., a Delaware corporation.
(h) "Consultant" shall mean a consultant or advisor who provides bona
fide services to the Company, a Parent, a Subsidiary or an Affiliate as an
independent contractor or a member of the board of directors of a Parent or a
Subsidiary who is not an Employee. Service as a Consultant shall be considered
Service for all purposes of the Plan.
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(i) "Employee" shall mean any individual who is a common-law employee of
the Company, a Parent or a Subsidiary.
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(k) "Exercise Price" shall mean, in the case of an Option, the amount for
which one Common Share may be purchased upon exercise of such Option, as
specified in the applicable Stock Option Agreement. "Exercise Price," in the
case of a SAR, shall mean an amount, as specified in the applicable SAR
Agreement, which is subtracted from the Fair Market Value of one Common Share
in determining the amount payable upon exercise of such SAR.
(l) "Fair Market Value" with respect to a Share, shall mean the market
price of one Share of Stock, determined by the Committee as follows:
(i) If the Stock was traded over-the-counter on the date in question
but was not traded on The Nasdaq Stock Market, then the Fair Market Value
shall be equal to the last transaction price quoted for such date by the
OTC Bulletin Board or, if not so quoted, shall be equal to the mean
between the last reported representative bid and asked prices quoted for
such date by the principal automated inter-dealer quotation system on
which the Stock is quoted or, if the Stock is not quoted on any such
system, by the "Pink Sheets" published by the National Quotation Bureau,
Inc.;
(ii) If the Stock was traded on The Nasdaq Stock Market, then the
Fair Market Value shall be equal to the last reported sale price quoted
for such date by The Nasdaq Stock Market;
(iii) If the Stock was traded on a United States stock exchange on
the date in question, then the Fair Market Value shall be equal to the
closing price reported for such date by the applicable composite-
transactions report; and
(iv) If none of the foregoing provisions is applicable, then the Fair
Market Value shall be determined by the Committee in good faith on such
basis as it deems appropriate.
In all cases, the determination of Fair Market Value by the Committee shall be
conclusive and binding on all persons.
(m) "ISO" shall mean an employee incentive stock option described in
Section 422 of the Code.
(n) "Nonstatutory Option" or "NSO" shall mean an employee stock option
that is not an ISO.
(o) "Offeree" shall mean an individual to whom the Committee has offered
the right to acquire Shares under the Plan (other than upon exercise of an
Option).
(p) "Option" shall mean an ISO or Nonstatutory Option granted under the
Plan and entitling the holder to purchase Shares.
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(q) "Optionee" shall mean an individual or estate who holds an Option or
SAR.
(r) "Outside Director" shall mean a member of the Board of Directors who
is not a common-law employee of the Company, a Parent or a Subsidiary. Service
as an Outside Director shall be considered Service for all purposes of the
Plan, except as provided in the second sentence of Section 4(a).
(s) "Parent" shall mean any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain. A corporation that attains the status of a Parent
on a date after the adoption of the Plan shall be a Parent commencing as of
such date.
(t) "Participant" shall mean an individual or estate who holds an Award.
(u) "Plan" shall mean this 2000 Stock Incentive Plan of Tvia, Inc., as
amended from time to time.
(v) "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 Committee.
(w) "Restricted Share" shall mean a Share awarded under the Plan.
(x) "Restricted Share Agreement " shall mean the agreement between the
Company and the recipient of a Restricted Share which contains the terms,
conditions and restrictions pertaining to such Restricted Shares.
(y) "SAR" shall mean a stock appreciation right granted under the Plan.
(z) "SAR Agreement" shall mean the agreement between the Company and an
Optionee which contains the terms, conditions and restrictions pertaining to
his or her SAR.
(aa) "Service" shall mean service as an Employee, Consultant or Outside
Director.
(bb) "Share" shall mean one share of Stock, as adjusted in accordance
with Section 9 (if applicable).
(cc) "Stock" shall mean the Common Stock of the Company.
(dd) "Stock Option Agreement" shall mean the agreement between the
Company and an Optionee that contains the terms, conditions and restrictions
pertaining to his Option.
(ee) "Stock Purchase Agreement" shall mean the agreement between the
Company and an Offeree who acquires Shares under the Plan that contains the
terms, conditions and restrictions pertaining to the acquisition of such
Shares.
(ff) "Stock Unit" shall mean a bookkeeping entry representing the
equivalent of one Share, as awarded under the Plan.
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(gg) "Stock Unit Agreement" shall mean the agreement between the Company
and the recipient of a Stock Unit which contains the terms, conditions and
restrictions pertaining to such Stock
Unit.
(hh) "Subsidiary" shall mean any corporation, if the Company and/or one
or more other Subsidiaries own not less than 50% of the total combined voting
power of all classes of outstanding stock of such corporation. A corporation
that attains the status of a Subsidiary on a date after the adoption of the
Plan shall be considered a Subsidiary commencing as of such date.
(ii) "Total and Permanent Disability" shall mean that the Optionee is
unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or that has lasted, or can be expected to last, for a
continuous period of not less than 12 months.
SECTION 3. ADMINISTRATION.
(a) Committee Composition. The Plan shall be administered by the
Committee. The Committee shall consist of two or more directors of the
Company, who shall be appointed by the Board. In addition, the composition of
the Committee shall satisfy
(i) such requirements as the Securities and Exchange Commission may
establish for administrators acting under plans intended to qualify for
exemption under Rule 16b-3 (or its successor) under the Exchange Act; and
(ii) such requirements as the Internal Revenue Service may establish
for outside directors acting under plans intended to qualify for
exemption under Section 162(m)(4)(C) of the Code.
(b) Committee for Non-Officer Grants. The Board may also appoint one or
more separate committees of the Board, each composed of one or more directors
of the Company who need not satisfy the requirements of Section 3(a), who may
administer the Plan with respect to Employees who are not considered officers
or directors of the Company under Section 16 of the Exchange Act, may grant
Awards under the Plan to such Employees and may determine all terms of such
grants. Within the limitations of the preceding sentence, any reference in the
Plan to the Committee shall include such committee or committees appointed
pursuant to the preceding sentence.
(c) Committee Procedures. The Board of Directors shall designate one of
the members of the Committee as chairman. The Committee may hold meetings at
such times and places as it shall determine. The acts of a majority of the
Committee members present at meetings at which a quorum exists, or acts
reduced to or approved in writing by all Committee members, shall be valid
acts of the Committee.
(d) Committee Responsibilities. Subject to the provisions of the Plan,
the Committee shall have full authority and discretion to take the following
actions:
(i) To interpret the Plan and to apply its provisions;
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(ii) To adopt, amend or rescind rules, procedures and forms relating
to the Plan;
(iii) To authorize any person to execute, on behalf of the Company,
any instrument required to carry out the purposes of the Plan;
(iv) To determine when Shares are to be awarded or offered for sale
and when Options are to be granted under the Plan;
(v) To select the Offerees and Optionees;
(vi) To determine the number of Shares to be offered to each Offeree
or to be made subject to each Option;
(vii) To prescribe the terms and conditions of each award or sale of
Shares, including (without limitation) the Purchase Price, the vesting of
the award (including accelerating the vesting of awards) and to specify
the provisions of the Stock Purchase Agreement relating to such award or
sale;
(viii) To prescribe the terms and conditions of each Option,
including (without limitation) the Exercise Price, the vesting or
duration of the Option (including accelerating the vesting of the
Option), to determine whether such Option is to be classified as an ISO
or as a Nonstatutory Option, and to specify the provisions of the Stock
Option Agreement relating to such Option;
(ix) To amend any outstanding Stock Purchase Agreement or Stock
Option Agreement, subject to applicable legal restrictions and to the
consent of the Offeree or Optionee who entered into such agreement;
(x) To prescribe the consideration for the grant of each Option or
other right under the Plan and to determine the sufficiency of such
consideration;
(xi) To determine the disposition of each Option or other right under
the Plan in the event of an Optionee's or Offeree's divorce or
dissolution of marriage;
(xii) To determine whether Options or other rights under the Plan
will be granted in replacement of other grants under an incentive or
other compensation plan of an acquired business;
(xiii) To correct any defect, supply any omission, or reconcile any
inconsistency in the Plan, any Stock Option Agreement or any Stock
Purchase Agreement; and
(xiv) To take any other actions deemed necessary or advisable for the
administration of the Plan.
Subject to the requirements of applicable law, the Committee may designate
persons other than members of the Committee to carry out its responsibilities
and may prescribe such conditions and limitations as it may deem appropriate,
except that the Committee may not delegate its
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authority with regard to the selection for participation of or the granting of
Options or other rights under the Plan to persons subject to Section 16 of the
Exchange Act. All decisions, interpretations and other actions of the
Committee shall be final and binding on all Offerees, all Optionees, and all
persons deriving their rights from an Offeree or Optionee. No member of the
Committee shall be liable for any action that he has taken or has failed to
take in good faith with respect to the Plan, any Option, or any right to
acquire Shares under the Plan.
SECTION 4. ELIGIBILITY.
(a) General Rule. Only Employees shall be eligible for the grant of ISOs.
Only Employees, Consultants and Outside Directors shall be eligible for the
grant of Restricted Shares, Stock Units, NSOs or SARs, and grants to Outside
Directors shall comply with the provisions of Section 4(b).
(b) Outside Directors. Any other provision of the Plan notwithstanding,
the participation of Outside Directors in the Plan shall be subject to the
following restrictions:
(i) Outside Directors shall only be eligible for the grant of
Restricted Shares, Stock Units, Nonstatutory Options and SARs.
(ii) Each Outside Director who first joins the Board of Directors
after the date of adoption of the Plan shall receive a Nonstatutory
Option, subject to approval of the Plan by the Company's stockholders, to
purchase 25,000 Shares (subject to adjustment under Section 12) on the
first business day after his or her election to the Board of Directors.
(iii) On the first business day following the conclusion of each
regular annual meeting of the Company's stockholders after such Outside
Director's appointment or election to the Board of Directors, commencing
with the annual meeting occurring after the adoption of the Plan, each
Outside Director who will continue serving as a member of the Board of
Directors thereafter shall receive an Option to purchase 7,500 Shares,
subject to adjustment under Section 12. Each Outside Director who is not
initially elected at a regular annual meeting of the Company's
stockholders shall receive an Option to purchase a pro rata portion of
25,000 Shares within ten business days of his or her election based on
the number of full months remaining from date of election until the next
regular annual meeting of the Company's stockholders divided by 12. Any
fractional shares resulting from such calculation shall be rounded up to
the nearest whole number.
(iv) The Exercise Price of all Nonstatutory Options granted to an
Outside Director under this Section 4(b) shall be equal to 100% of the
Fair Market Value of a Share on the date of grant, payable in one of the
forms described in Section 9(a), (b) and (d).
(v) Each Option granted under Section 4(b)(ii) shall become
exercisable in full on the first anniversary of the grant date. Except as
set forth in the next succeeding sentence, each Option granted under
Section 4(b)(iii) above shall become exercisable as to one-quarter of the
Options on the first anniversary of the grant date and the remaining
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Options shall vest ratably over the next 48 months. Each Option granted
to Outside Directors who were not initially elected at a regular annual
meeting of the Company's stockholders shall become exercisable in full at
the next regular annual meeting of the Company's stockholders following
the date of grant. Notwithstanding the foregoing, each Option that has
been outstanding for not less than six months shall become exercisable in
full in the event that a Change in Control occurs with respect to the
Company.
(vi) Subject to Sections 4(b)(vii) and (viii), all Nonstatutory
Options granted to an Outside Director under this Section 4(b) shall
terminate on the tenth anniversary of the date of grant of such Options.
(vii) If an Optionee's Service terminates for any reason other than
death, then his or her Options shall expire on the earliest of the
following occasions:
(A) The expiration date determined pursuant to Section 4(b)(vi)
above;
(B) The date 24 months after the termination of the Optionee's
Service, if the termination occurs because of his or her Total and
Permanent Disability; or
(C) The date six months after the termination of the Optionee's
Service for any reason other than Total and Permanent Disability.
The Optionee may exercise all or part of his or her Options at any time before
the expiration of such Options under the preceding sentence, but only to the
extent that such Options had become exercisable before his or her Service
terminated. The balance of such Options shall lapse when the Optionee's
Service terminates. In the event that the Optionee dies after the termination
of his or her Service but before the expiration of his or her Options, all or
part of such Options may be exercised at any time prior to their expiration by
the executors or administrators of the Optionee's estate or by any person who
has acquired such Options directly from him or her by bequest, inheritance or
beneficiary designation under the Plan, but only to the extent that such
Options had become exercisable before his or her Service terminated.
(viii) If an Optionee dies while he or she is in Service, then his or
her Options shall expire on the earlier of the following dates:
(A) The expiration date determined pursuant to Section
4(b)(vi) above; or
(B) The date 24 months after his or her death.
All or part of the Optionee's Options may be exercised at any time before the
expiration of such Options under the preceding sentence by the executors or
administrators of his or her estate or by any person who has acquired such
Options directly from him or her by bequest, inheritance or beneficiary
designation under the Plan.
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(ix) Except as otherwise provided by the Committee, no Option shall
be transferable by the Optionee other than by will, by written
beneficiary designation or by the laws of descent and distribution. An
Option may be exercised during the lifetime of the Optionee only by the
Optionee or by the Optionee's guardian or legal representative. No Option
or interest therein may be transferred, assigned, pledged or hypothecated
by the Optionee during his or her lifetime, whether by operation of law
or otherwise, or be made subject to execution, attachment or similar
process.
(c) Limitation On Grants. No Employee or Consultant shall be granted
Options to purchase more than 333,333 Shares in any fiscal year of the
Company, except that Options granted to a new Employee or Consultant in the
fiscal year of the Company in which his or her Service first commences shall
not cover more than 416,666 Shares (in each case subject to adjustment in
accordance with Section 12).
(d) Ten-Percent Stockholders. An Employee who owns more than 10% of the
total combined voting power of all classes of outstanding stock of the
Company, a Parent or Subsidiary shall not be eligible for the grant of an ISO
unless such grant satisfies the requirements of Section 422(c)(6) of the Code.
(e) Attribution Rules. For purposes of Section 4(d) above, in determining
stock ownership, an Employee shall be deemed to own the stock owned, directly
or indirectly, by or for such Employee's brothers, sisters, spouse, ancestors
and lineal descendants. Stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust shall be deemed to be owned
proportionately by or for its stockholders, partners or beneficiaries.
(f) Outstanding Stock. For purposes of Section 4(d) above, "outstanding
stock" shall include all stock actually issued and outstanding immediately
after the grant. "Outstanding stock" shall not include shares authorized for
issuance under outstanding options held by the Employee or by any other
person.
SECTION 5. STOCK SUBJECT TO PLAN.
(a) Basic Limitation. Shares offered under the Plan shall be authorized
but unissued Shares or treasury Shares. The maximum aggregate number of
Options, SARs, Stock Units and Restricted Shares awarded under the Plan shall
not exceed 2,333,333 Shares, plus the additional Shares described in Sections
(b) and (c), and any Shares available for future awards under the TVIA, Inc.
Amended and Restated 1999 Stock Incentive Plan (the "Prior Plan") as of the
effective date of this Plan and any Shares that are represented by awards
granted under the Prior Plan which are forfeited, expire or are canceled
without delivery of Shares or which result in the forfeiture of Shares back to
the Company, but in no event more than 10,000,000 Shares. The limitation of
this Section 5(a) shall be subject to adjustment pursuant to Section 12.
(b) Annual Increase in Shares. As of January 1 of each year, commencing
with the year 2001, the aggregate number of Options, SARs, Stock Units and
Restricted Shares that may be awarded under the Plan shall automatically
increase by a number equal to the lesser of (i) 73,000 shares, (ii) 3% of the
fully diluted outstanding shares of Stock of the Company on such date or (iii)
a lesser amount determined by the Board. The aggregate number of Shares that
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may be issued under the Plan shall at all times be subject to adjustment
pursuant to Section 12. The number of Shares that are subject to Options or
other rights outstanding at any time under the Plan shall not exceed the
number of Shares which then remain available for issuance under the Plan. The
Company, during the term of the Plan, shall at all times reserve and keep
available sufficient Shares to satisfy the requirements of the Plan.
(c) Additional Shares. If Restricted Shares or Shares issued upon the
exercise of Options are forfeited, then such Shares shall again become
available for Awards under the Plan. If Stock Units, Options or SARs are
forfeited or terminate for any other reason before being exercised, then the
corresponding Shares shall again become available for Awards under the Plan.
If Stock Units are settled, then only the number of Shares (if any) actually
issued in settlement of such Stock Units shall reduce the number available
under Section 5(a) and the balance shall again become available for Awards
under the Plan. If SARs are exercised, then only the number of Shares (if any)
actually issued in settlement of such SARs shall reduce the number available
in Section 5(a) and the balance shall again become available for Awards under
the Plan. The foregoing notwithstanding, the aggregate number of Shares that
may be issued under the Plan upon the exercise of ISOs shall not be increased
when Restricted Shares or other Shares are forfeited.
(d) Dividend Equivalents . Any dividend equivalents paid or credited
under the Plan shall not be applied against the number of Restricted Shares,
Stock Units, Options or SARs available for Awards, whether or not such
dividend equivalents are converted into Stock Units.
SECTION 6. RESTRICTED SHARES
(a) Restricted Stock Agreement. Each grant of Restricted Shares under the
Plan shall be evidenced by a Restricted Stock Agreement between the recipient
and the Company. Such Restricted Shares shall be subject to all applicable
terms of the Plan and may be subject to any other terms that are not
inconsistent with the Plan. The provisions of the various Restricted Stock
Agreements entered into under the Plan need not be identical.
(b) Payment for Awards. Subject to the following sentence, Restricted
Shares may be sold or awarded under the Plan for such consideration as the
Committee may determine, including (without limitation) cash, cash
equivalents, full-recourse promissory notes, past services and future
services. To the extent that an Award consists of newly issued Restricted
Shares, the Award recipient shall furnish consideration with a value not less
than the par value of such Restricted Shares in the form of cash, cash
equivalents, or past services rendered to the Company (or a Parent or
Subsidiary), as the Committee may determine.
(c) Vesting. Each Award of Restricted Shares may or may not be subject to
vesting. Vesting shall occur, in full or in installments, upon satisfaction of
the conditions specified in the Restricted Stock Agreement. A Restricted Stock
Agreement may provide for accelerated vesting in the event of the
Participant's death, disability or retirement or other events. The Committee
may determine, at the time of granting Restricted Shares of thereafter, that
all or part of such Restricted Shares shall become vested in the event that a
Change in Control occurs with respect to the Company.
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(d) Voting and Dividend Rights. The holders of Restricted Shares awarded
under the Plan shall have the same voting, dividend and other rights as the
Company's other stockholders. A Restricted Stock Agreement, however, may
require that the holders of Restricted Shares invest any cash dividends
received in additional Restricted Shares. Such additional Restricted Shares
shall be subject to the same conditions and restrictions as the Award with
respect to which the dividends were paid.
SECTION 7. OTHER TERMS AND CONDITIONS OF AWARDS OR SALES.
(a) 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 Offeree 30 days after the grant of such right
was communicated to him by the Committee. Such right shall not be transferable
and shall be exercisable only by the Offeree to whom such right was granted.
(b) Purchase Price. The Purchase Price shall be determined by the
Committee at its sole discretion. The Purchase Price shall be payable in one
of the forms described in Sections 6(b).
(c) Withholding Taxes. As a condition to the purchase of Shares, the
Offeree shall make such arrangements as the Committee may require for the
satisfaction of any federal, state or local withholding tax obligations that
may arise in connection with such purchase.
(d) Restrictions on Transfer of Shares. 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
Committee may determine. Such restrictions shall be set forth in the
applicable Stock Purchase Agreement and shall apply in addition to any general
restrictions that may apply to all holders of Shares.
SECTION 8. TERMS AND CONDITIONS OF OPTIONS.
(a) Stock Option Agreement. Each grant of an Option under the Plan shall
be evidenced by a Stock Option Agreement between the Optionee and the Company.
Such Option shall be subject to all applicable terms and conditions of the
Plan and may be subject to any other terms and conditions which are not
inconsistent with the Plan and which the Committee deems appropriate for
inclusion in a Stock Option Agreement. The Stock Option Agreement shall
specify whether the Option is an ISO or an NSO. The provisions of the various
Stock Option Agreements entered into under the Plan need not be identical.
Options may be granted in consideration of a reduction in the Optionee's other
compensation. A Stock Option Agreement may provide that a new Option will be
granted automatically to the Optionee when he or she exercises a prior Option
and pays the Exercise Price in a form described in Section 9(b).
(b) Number of Shares. Each Stock Option Agreement shall specify the
number of Shares that are subject to the Option and shall provide for the
adjustment of such number in accordance with Section 12. Options granted to an
Optionee in a single fiscal year of the Company shall not cover more than
333,333 Shares, except that Options granted to a new Employee or Consultant in
the fiscal year of the Company in which his or her Service first commences
shall not pertain to more than 416,666 Shares.
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(c) Exercise Price. Each Stock Option Agreement shall specify the
Exercise Price. The Exercise Price of an ISO shall not be less than 100% of
the Fair Market Value of a Share on the date of grant, except as otherwise
provided in Section 4(d) and the Exercise Price of an NSO shall not be less
than the par value of the Shares subject to such NSO. Subject to the foregoing
in this Section 8(c), the Exercise Price under any Option shall be determined
by the Committee at its sole discretion. The Exercise Price shall be payable
in one of the forms described in Section 9.
(d) Withholding Taxes. As a condition to the exercise of an Option, the
Optionee shall make such arrangements as the Committee may require for the
satisfaction of any federal, state or local withholding tax obligations that
may arise in connection with such exercise. The Optionee shall also make such
arrangements as the Committee may require for the satisfaction of any federal,
state or local withholding tax obligations that may arise in connection with
the disposition of Shares acquired by exercising an Option.
(e) Exercisability and Term. Each Stock Option Agreement shall specify
the date when all or any installment of the Option is to become exercisable.
The Stock Option Agreement shall also specify the term of the Option; provided
that the term of an ISO shall in no event exceed 10 years from the date of
grant (five years for Employees described in Section 4(d)). A Stock Option
Agreement may provide for accelerated exercisability in the event of the
Optionee's death, disability, or retirement or other events and may provide
for expiration prior to the end of its term in the event of the termination of
the Optionee's service. Options may be awarded in combination with SARs, and
such an Award may provide that the Options will not be exercisable unless the
related SARs are forfeited. Subject to the foregoing in this Section 8(e), the
Committee at its sole discretion shall determine when all or any installment
of an Option is to become exercisable and when an Option is to expire.
(f) Nontransferability. Except as otherwise provided by the Committee,
during an Optionee's lifetime, his or her Option(s) shall be exercisable only
by the Optionee and shall not be transferable. In the event of an Optionee's
death, his or her Option(s) shall not be transferable other than by will or by
the laws of descent and distribution.
(g) Exercise of Options Upon Termination of Service. Each Stock Option
Agreement shall set forth the extent to which the Optionee shall have the
right to exercise the Option following termination of the Optionee's Service
with the Company and its Subsidiaries, and the right to exercise the Option of
any executors or administrators of the Optionee's estate or any person who has
acquired such Option(s) directly from the Optionee by bequest or inheritance.
Such provisions shall be determined in the sole discretion of the Committee,
need not be uniform among all Options issued pursuant to the Plan, and may
reflect distinctions based on the reasons for termination of Service.
(h) Effect of Change in Control. The Committee may determine, at the time
of granting an Option or thereafter, that such Option shall become exercisable
as to all or part of the Shares subject to such Option in the event that a
Change in Control occurs with respect to the Company, subject to the
following limitations:
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(i) In the case of an ISO, the acceleration of exercisability shall
not occur without the Optionee's written consent.
(ii) If the Company and the other party to the transaction
constituting a Change in Control agree that such transaction is to be
treated as a "pooling of interests" for financial reporting purposes, and
if such transaction in fact is so treated, then the acceleration of
exercisability shall not occur to the extent that either the Company's
independent accountants or such other party's independent accountants
determine in good faith that such acceleration would preclude the use of
"pooling of interests" accounting.
(i) Leaves of Absence. An Employee's Service shall cease when such
Employee ceases to be actively employed by, or a consultant or adviser to, the
Company (or any subsidiary) as determined in the sole discretion of the Board
of Directors. For purposes of Options, Service does not terminate when an
Employee goes on a bona fide leave of absence, that was approved by the
Company in writing, if the terms of the leave provide for continued service
crediting, or when continued service crediting is required by applicable law.
However, for purposes of determining whether an Option is entitled to ISO
status, an Employee's Service will be treated as terminating 90 days after
such Employee went on leave, unless such Employee's right to return to active
work is guaranteed by law or by a contract. Service terminates in any event
when the approved leave ends, unless such Employee immediately returns to
active work. The Company determines which leaves count toward Service, and
when Service terminates for all purposes under the Plan.
(j) No Rights as a Stockholder. An Optionee, or a transferee of an
Optionee, shall have no rights as a stockholder with respect to any Shares
covered by his Option until the date of the issuance of a stock certificate
for such Shares. No adjustments shall be made, except as provided in Section
12.
(k) Modification, Extension and Renewal of Options. Within the
limitations of the Plan, the Committee may modify, extend or renew outstanding
options or may accept the cancellation of outstanding options (to the extent
not previously exercised), whether or not granted hereunder, in return for the
grant of new Options for the same or a different number of Shares and at the
same or a different exercise price. The foregoing notwithstanding, no
modification of an Option shall, without the consent of the Optionee, alter or
impair his or her rights or obligations under such Option.
(l) Restrictions on Transfer of Shares. Any Shares issued upon exercise
of an Option shall be subject to such special forfeiture conditions, rights of
repurchase, rights of first refusal and other transfer restrictions as the
Committee may determine. Such restrictions shall be set forth in the
applicable Stock Option Agreement and shall apply in addition to any general
restrictions that may apply to all holders of Shares.
(m) Buyout Provisions. The Committee may at any time (a) offer to buy
out for a payment in cash or cash equivalents an Option previously granted or
(b) authorize an Optionee to elect to cash out an Option previously granted,
in either case at such time and based upon such terms and conditions as the
Committee shall establish.
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SECTION 9. PAYMENT FOR SHARES.
(a) General Rule. The entire Exercise Price of Shares issued under the
Plan shall be payable in lawful money of the United States of America at the
time when such Shares are purchased, except as provided in Sections 9(b)
through 9(g) below.
(b) Surrender of Stock. To the extent that a Stock Option Agreement so
provides, payment may be made all or in part by surrendering, or attesting to
the ownership of, Shares which have already been owned by the Optionee or his
representative for more than 12 months. Such Shares shall be valued at their
Fair Market Value on the date when the new Shares are purchased under the
Plan. The Optionee shall not surrender, or attest to the ownership of, Shares
in payment of the Exercise Price if such action would cause the Company to
recognize compensation expense (or additional compensation expense) with
respect to the Option for financial reporting purposes.
(c) Services Rendered. At the discretion of the Committee, Shares may be
awarded under the Plan in consideration of services rendered to the Company or
a Subsidiary prior to the award. If Shares are awarded without the payment of
a Purchase Price in cash, the Committee shall make a determination (at the
time of the award) of the value of the services rendered by the Offeree and
the sufficiency of the consideration to meet the requirements of Section 6(c).
(d) Cashless Exercise. To the extent that a Stock Option Agreement so
provides, payment may be made all or in part by delivery (on a form prescribed
by the Committee) of an irrevocable direction to a securities broker to sell
Shares and to deliver all or part of the sale proceeds to the Company in
payment of the aggregate Exercise Price.
(e) Exercise/Pledge. To the extent that a Stock Option Agreement so
provides, payment may be made all or in part by delivery (on a form prescribed
by the Committee) of an irrevocable direction to a securities broker or lender
to pledge Shares, as security for a loan, and to deliver all or part of the
loan proceeds to the Company in payment of the aggregate Exercise Price.
(f) Promissory Note. To the extent that a Stock Option Agreement so
provides, payment may be made all or in part by delivering (on a form
prescribed by the Company) a full-recourse promissory note. However, the par
value of the Common Shares being purchased under the Plan, if newly issued,
shall be paid in cash or cash equivalents.
(g) Other Forms of Payment. To the extent that a Stock Option Agreement
so provides, payment may be made in any other form that is consistent with
applicable laws, regulations and rules.
SECTION 10. STOCK APPRECIATION RIGHTS.
(a) SAR Agreement. Each grant of a SAR under the Plan shall be evidenced
by a SAR Agreement between the Optionee and the Company. Such SAR shall be
subject to all applicable terms of the Plan and may be subject to any other
terms that are not inconsistent with the Plan. The provisions of the various
SAR Agreements entered into under the Plan need not be identical. SARs may be
granted in consideration of a reduction in the Optionee's other compensation.
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(b) Number of Shares. Each SAR Agreement shall specify the number of
Shares to which the SAR pertains and shall provide for the adjustment of such
number in accordance with Section 12. SARs granted to any Optionee in a single
calendar year shall in no event pertain to more than 333,333 Shares, except
that SARs granted to a new Employee or Consultant in the fiscal year of the
Company in which his or her Service first commences shall not pertain to more
than 416,666 Shares. The limitations set forth in the preceding sentence shall
be subject to adjustment in accordance with Section 12.
(c) Exercise Price. Each SAR Agreement shall specify the Exercise Price.
A SAR Agreement may specify an Exercise Price that varies in accordance with a
predetermined formula while the SAR is outstanding.
(d) Exercisability and Term. Each SAR Agreement shall specify the date
when all or any installment of the SAR is to become exercisable. The SAR
Agreement shall also specify the term of the SAR. A SAR Agreement may provide
for accelerated exercisability in the event of the Optionee's death,
disability or retirement or other events and may provide for expiration prior
to the end of its term in the event of the termination of the Optionee's
service. SARs may be awarded in combination with Options, and such an Award
may provide that the SARs will not be exercisable unless the related Options
are forfeited. A SAR may be included in an ISO only at the time of grant but
may be included in an NSO at the time of grant or thereafter. A SAR granted
under the Plan may provide that it will be exercisable only in the event of a
Change in Control.
(e) Effect of Change in Control. The Committee may determine, at the time
of granting a SAR or thereafter, that such SAR shall become fully exercisable
as to all Common Shares subject to such SAR in the event that a Change in
Control occurs with respect to the Company, subject to the following sentence.
If the Company and the other party to the transaction constituting a Change in
Control agree that such transaction is to be treated as a "pooling of
interests" for financial reporting purposes, and if such transaction in fact
is so treated, then the acceleration of exercisability shall not occur to the
extent that either the Company's independent accountants or such other party's
independent accountants determine in good faith that such acceleration would
preclude the use of "pooling of interests" accounting.
(f) Exercise of SARs. If, on the date when a SAR expires, the Exercise
Price under such SAR is less than the Fair Market Value on such date but any
portion of such SAR has not been exercised or surrendered, then such SAR shall
automatically be deemed to be exercised as of such date with respect to such
portion. Upon exercise of a SAR, the Optionee (or any person having the right
to exercise the SAR after his or her death) shall receive from the Company (a)
Shares, (b) cash or (c) a combination of Shares and cash, as the Committee
shall determine. The amount of cash and/or the Fair Market Value of Shares
received upon exercise of SARs shall, in the aggregate, be equal to the amount
by which the Fair Market Value (on the date of surrender) of the Shares
subject to the SARs exceeds the Exercise Price.
(g) Special Holding Period. To the extent required by Section 16 of the
Exchange Act or any rule thereunder, an SAR shall not be exercised for cash
unless both it and the related Option have been outstanding for more than six
months.
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(h) Special Exercise Window. To the extent required by Section 16 of the
Exchange Act or any rule thereunder, an SAR may only be exercised for cash
during a period which (a) begins on the third business day following a date
when the Company's quarterly summary statement of sales and earnings is
released to the public and (b) ends on the second business day following such
date. This Section 10(h) shall not apply if the exercise occurs automatically
on the date when the related Option expires, and the Committee may determine
that it shall not apply to limited SARs that are exercisable only in the event
of a Change in Control.
(i) Modification or Assumption of SARs. Within the limitations of the
Plan, the Committee may modify, extend or assume outstanding SARs or may
accept the cancellation of outstanding SARs (whether granted by the Company or
by another issuer) in return for the grant of new SARs for the same or a
different number of shares and at the same or a different exercise price. The
foregoing notwithstanding, no modification of a SAR shall, without the consent
of the Optionee, may alter or impair his or her rights or obligations under
such SAR.
SECTION 11. STOCK UNITS.
(a) Stock Unit Agreement. Each grant of Stock Units under the Plan shall
be evidenced by a Stock Unit Agreement between the recipient and the Company.
Such Stock Units shall be subject to all applicable terms of the Plan and may
be subject to any other terms that are not inconsistent with the Plan. The
provisions of the various Stock Unit Agreements entered into under the Plan
need not be identical. Stock Units may be granted in consideration of a
reduction in the recipient's other compensation.
(b) Payment for Awards. To the extent that an Award is granted in the
form of Stock Units, no cash consideration shall be required of the Award
recipients.
(c) Vesting Conditions. Each Award of Stock Units may or may not be
subject to vesting. Vesting shall occur, in full or in installments, upon
satisfaction of the conditions specified in the Stock Unit Agreement. A Stock
Unit Agreement may provide for accelerated vesting in the event of the
Participant's death, disability or retirement or other events. The Committee
may determine, at the time of granting Stock Units or thereafter, that all or
part of such Stock Units shall become vested in the event that a Change in
Control occurs with respect to the Company, except as provided in the next
following sentence. If the Company and the other party to the transaction
constituting a Change in Control agree that such transaction is to be treated
as a "pooling of interests" for financial reporting purposes, and if such
transaction in fact is so treated, then the acceleration of vesting shall not
occur to the extent that either the Company's independent accountants or such
other party's independent accountants determine in good faith that such
acceleration would preclude the use of "pooling of interests" accounting.
(d) Voting and Dividend Rights. The holders of Stock Units shall have no
voting rights. Prior to settlement or forfeiture, any Stock Unit awarded under
the Plan may, at the Committee's discretion, carry with it a right to dividend
equivalents. Such right entitles the holder to be credited with an amount
equal to all cash dividends paid on one Share while the Stock Unit is
outstanding. Dividend equivalents may be converted into additional Stock
Units. Settlement of dividend equivalents may be made in the form of cash, in
the form of Shares, or in a combination of both. Prior to distribution, any
dividend equivalents which are not paid shall be
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subject to the same conditions and restrictions (including without limitation,
any forfeiture conditions) as the Stock Units to which they attach.
(e) Form and Time of Settlement of Stock Units. Settlement of vested
Stock Units may be made in the form of (a) cash, (b) Shares or (c) any
combination of both, as determined by the Committee. The actual number of
Stock Units eligible for settlement may be larger or smaller than the number
included in the original Award, based on predetermined performance factors.
Methods of converting Stock Units into cash may include (without limitation) a
method based on the average Fair Market Value of Shares over a series of
trading days. Vested Stock Units may be settled in a lump sum or in
installments. The distribution may occur or commence when all vesting
conditions applicable to the Stock Units have been satisfied or have lapsed,
or it may be deferred to any later date. The amount of a deferred distribution
may be increased by an interest factor or by dividend equivalents. Until an
Award of Stock Units is settled, the number of such Stock Units shall be
subject to adjustment pursuant to Section 12.
(f) Death of Recipient. Any Stock Units Award that becomes payable after
the recipient's death shall be distributed to the recipient's beneficiary or
beneficiaries. Each recipient of a Stock Units Award under the Plan shall
designate one or more beneficiaries for this purpose by filing the prescribed
form with the Company. A beneficiary designation may be changed by filing the
prescribed form with the Company at any time before the Award recipient's
death. If no beneficiary was designated or if no designated beneficiary
survives the Award recipient, then any Stock Units Award that becomes payable
after the recipient's death shall be distributed to the recipient's estate.
(g) Creditors' Rights. A holder of Stock Units shall have no rights other
than those of a general creditor of the Company. Stock Units represent an
unfunded and unsecured obligation of the Company, subject to the terms and
conditions of the applicable Stock Unit Agreement.
SECTION 12. ADJUSTMENT OF SHARES.
(a) Adjustments. In the event of a subdivision of the outstanding Stock,
a declaration of a dividend payable in Shares, a declaration of a dividend
payable in a form other than Shares in an amount that has a material effect on
the price of Shares, a combination or consolidation of the outstanding Stock
(by reclassification or otherwise) into a lesser number of Shares, a
recapitalization, a spin-off or a similar occurrence, the Committee shall make
such adjustments as it, in its sole discretion, deems appropriate in one or
more of:
(i) The number of Options, SARs, Restricted Shares and Stock Units
available for future Awards under Section 5;
(ii) The limitations set forth in Sections 4(c), 8(b) and 10(b);
(iii) The number of NSOs to be granted to Outside Directors under
Section 4(b);
(iv) The number of Shares covered by each outstanding Option and SAR;
(v) The Exercise Price under each outstanding Option and SAR; or
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(vi) The number of Stock Units included in any prior Award which has
not yet been settled.
Except as provided in this Section 12, a Participant shall have no rights by
reason of any issue by the Company of stock of any class or securities
convertible into stock of any class, any subdivision or consolidation of shares
of stock of any class, the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class.
(b) Dissolution or Liquidation. To the extent not previously exercised
or settled, Options, SARs and Stock Units shall terminate immediately prior to
the dissolution or liquidation of the Company.
(c) Reorganizations. In the event that the Company is a party to a merger
or other reorganization, outstanding Awards shall be subject to the agreement
of merger or reorganization. Such agreement shall provide for:
(i) The continuation of the outstanding Awards by the Company, if the
Company is a surviving corporation;
(ii) The assumption of the outstanding Awards by the surviving
corporation or its parent or subsidiary;
(iii) The substitution by the surviving corporation or its parent or
subsidiary of its own awards for the outstanding Awards;
(iv) Full exercisability or vesting and accelerated expiration of the
outstanding Awards; or
(v) Settlement of the full value of the outstanding Awards in cash or
cash equivalents followed by cancellation of such Awards.
(d) Reservation of Rights. Except as provided in this Section 12, an
Optionee or Offeree shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class, the payment of any dividend or
any other increase or decrease in the number of shares of stock of any class.
Any issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or
Exercise Price of Shares subject to an Option. The grant of an Option pursuant
to the Plan shall not affect in any way the right or power of the Company to
make adjustments, reclassifications, reorganizations or changes of its capital
or business structure, to merge or consolidate or to dissolve, liquidate, sell
or transfer all or any part of its business or assets.
SECTION 13. DEFERRAL OF AWARDS.
The Committee (in its sole discretion) may permit or require a Participant
to:
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a) Have cash that otherwise would be paid to such Participant as a result
of the exercise of a SAR or the settlement of Stock Units credited to
a deferred compensation account established for such Participant by
the Committee as an entry on the Company's books;
b) Have Shares that otherwise would be delivered to such Participant as
a result of the exercise of an Option or SAR converted into an equal
number of Stock Units; or
c) Have Shares that otherwise would be delivered to such Participant as a
result of the exercise of an Option or SAR or the settlement of Stock
Units converted into amounts credited to a deferred compensation
account established for such Participant by the Committee as an entry
on the Company's books. Such amounts shall be determined by reference
to the Fair Market Value of such Shares as of the date when they
otherwise would have been delivered to such Participant.
A deferred compensation account established under this Section 13 may be
credited with interest or other forms of investment return, as determined by the
Committee. A Participant for whom such an account is established shall have no
rights other than those of a general creditor of the Company. Such an account
shall represent an unfunded and unsecured obligation of the Company and shall be
subject to the terms and conditions of the applicable agreement between such
Participant and the Company. If the deferral or conversion of Awards is
permitted or required, the Committee (in its sole discretion) may establish
rules, procedures and forms pertaining to such Awards, including (without
limitation) the settlement of deferred compensation accounts established under
this Section 13.
SECTION 14. AWARDS UNDER OTHER PLANS.
The Company may grant awards under other plans or programs. Such awards
may be settled in the form of Shares issued under this Plan. Such Shares shall
be treated for all purposes under the Plan like Shares issued in settlement of
Stock Units and shall, when issued, reduce the number of Shares available under
Section 5.
SECTION 15. PAYMENT OF DIRECTOR'S FEES IN SECURITIES.
(a) Effective Date. No provision of this Section 15 shall be effective
unless and until the Board has determined to implement such provision.
(b) Elections to Receive NSOs, Restricted Shares or Stock Units. An
Outside Director may elect to receive his or her annual retainer payments
and/or meeting fees from the Company in the form of cash, NSOs, Restricted
Shares or Stock Units, or a combination thereof, as determined by the Board.
Such NSOs, Restricted Shares and Stock Units shall be issued under the Plan.
An election under this Section 15 shall be filed with the Company on the
prescribed form.
(c) Number and Terms of NSOs, Restricted Shares or Stock Units. The
number of NSOs, Restricted Shares or Stock Units to be granted to Outside
Directors in lieu of annual retainers and meeting fees that would otherwise be
paid in cash shall be calculated in a manner
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determined by the Board. The terms of such NSOs, Restricted Shares or Stock
Units shall also be determined by the Board.
SECTION 16. LEGAL AND REGULATORY REQUIREMENTS.
Shares shall not be issued under the Plan unless the issuance and delivery
of such Shares complies with (or is exempt from) all applicable requirements of
law, including (without limitation) the Securities Act of 1933, as amended, the
rules and regulations promulgated thereunder, state securities laws and
regulations and the regulations of any stock exchange on which the Company's
securities may then be listed, and the Company has obtained the approval or
favorable ruling from any governmental agency which the Company determines is
necessary or advisable.
SECTION 17. WITHHOLDING TAXES.
(a) General. To the extent required by applicable federal, state, local
or foreign law, a Participant or his or her successor shall make arrangements
satisfactory to the Company for the satisfaction of any withholding tax
obligations that arise in connection with the Plan. The Company shall not be
required to issue any Shares or make any cash payment under the Plan until
such obligations are satisfied.
(b) Share Withholding. The Committee may permit a Participant to satisfy
all or part of his or her withholding or income tax obligations by having the
Company withhold all or a portion of any Shares that otherwise would be issued
to him or her or by surrendering all or a portion of any Shares that he or she
previously acquired. Such Shares shall be valued at their Fair Market Value on
the date when taxes otherwise would be withheld in cash.
SECTION 18. LIMITATION ON PARACHUTE PAYMENTS.
(a) Scope of Limitation. This Section 18 shall apply to an Award unless
the Committee, at the time of making an Award under the Plan or at any time
thereafter, specifies in writing that such Award shall not be subject to this
Section 18. If this Section 18 applies to an Award, it shall supersede any
contrary provision of the Plan or of any Award granted under the Plan.
(b) Basic Rule. In the event that the independent auditors most recently
selected by the Board (the "Auditors") determine that any payment or transfer
by the Company under the Plan to or for the benefit of a Participant (a
"Payment") would be nondeductible by the Company for federal income tax
purposes because of the provisions concerning "excess parachute payments" in
Section 280G of the Code, then the aggregate present value of all Payments
shall be reduced (but not below zero) to the Reduced Amount. For purposes of
this Section 18, the "Reduced Amount" shall be the amount, expressed as a
present value, which maximizes the aggregate present value of the Payments
without causing any Payment to be nondeductible by the Company because of
Section 280G of the Code.
(c) Reduction of Payments. If the Auditors determine that any Payment
would be nondeductible by the Company because of Section 280G of the Code,
then the Company shall promptly give the Participant notice to that effect and
a copy of the detailed calculation thereof
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and of the Reduced Amount, and the Participant may then elect, in his or her
sole discretion, which and how much of the Payments shall be eliminated or
reduced (as long as after such election the aggregate present value of the
Payments equals the Reduced Amount) and shall advise the Company in writing of
his or her election within 10 days of receipt of notice. If no such election
is made by the Participant within such 10-day period, then the Company may
elect which and how much of the Payments shall be eliminated or reduced (as
long as after such election the aggregate present value of the Payments equals
the Reduced Amount) and shall notify the Participant promptly of such
election. For purposes of this Section 18, present value shall be determined
in accordance with Section 280G(d)(4) of the Code. All determinations made by
the Auditors under this Section 18 shall be binding upon the Company and the
Participant and shall be made within 60 days of the date when a Payment
becomes payable or transferable. As promptly as practicable following such
determination and the elections hereunder, the Company shall pay or transfer
to or for the benefit of the Participant such amounts as are then due to him
or her under the Plan and shall promptly pay or transfer to or for the benefit
of the Participant in the future such amounts as become due to him or her
under the Plan.
(d) Overpayments and Underpayments. As a result of uncertainty in the
application of Section 280G of the Code at the time of an initial
determination by the Auditors hereunder, it is possible that Payments will
have been made by the Company that should not have been made (an
"Overpayment") or that additional Payments that will not have been made by the
Company could have been made (an "Underpayment"), consistent in each case with
the calculation of the Reduced Amount hereunder. In the event that the
Auditors, based upon the assertion of a deficiency by the Internal Revenue
Service against the Company or the Participant that the Auditors believe has a
high probability of success, determine that an Overpayment has been made, such
Overpayment shall be treated for all purposes as a loan to the Participant
which he or she shall repay to the Company, together with interest at the
applicable federal rate provided in Section 7872(f)(2) of the Code; provided,
however, that no amount shall be payable by the Participant to the Company if
and to the extent that such payment would not reduce the amount subject to
taxation under Section 4999 of the Code. In the event that the Auditors
determine that an Underpayment has occurred, such Underpayment shall promptly
be paid or transferred by the Company to or for the benefit of the
Participant, together with interest at the applicable federal rate provided in
Section 7872(f)(2) of the Code.
(e) Related Corporations. For purposes of this Section 18, the term
"Company" shall include affiliated corporations to the extent determined by
the Auditors in accordance with Section 280G(d)(5) of the Code.
SECTION 19. NO EMPLOYMENT RIGHTS.
No provision of the Plan, nor any right or Option granted under the Plan,
shall be construed to give any person any right to become, to be treated as, or
to remain an Employee. The Company and its Subsidiaries reserve the right to
terminate any person's Service at any time and for any reason, with or without
notice.
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SECTION 20. DURATION AND AMENDMENTS.
(a) Term of the Plan. The amended and restated Plan, as set forth herein,
shall terminate automatically on March 20, 2010 and may be terminated on any
earlier date pursuant to Subsection (b) below.
(b) Right to Amend or Terminate the Plan. The Board of Directors may
amend the Plan at any time and from time to time. Rights and obligations under
any Option granted before amendment of the Plan shall not be materially
impaired by such amendment, except with consent of the person to whom the
Option was granted. An amendment of the Plan shall be subject to the approval
of the Company's stockholders only to the extent required by applicable laws,
regulations or rules.
(c) Effect of Amendment or Termination. No Shares shall be issued or sold
under the Plan after the termination thereof, except upon exercise of an
Option granted prior to such termination. The termination of the Plan, or any
amendment thereof, shall not affect any Share previously issued or any Option
previously granted under the Plan.
SECTION 21. EXECUTION.
To record the adoption of the amended and restated Plan by the Board of
Directors effective as of July 11, 2000, the Company has caused its authorized
officer to execute the same.
TVIA, INC.
By
---------------------------------------
Michael Hoberg
Secretary
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