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Exhibit 10.7
MILLENNIUM CELL INC.
AMENDED AND RESTATED
2000 STOCK OPTION PLAN
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TABLE OF CONTENTS
<TABLE>
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Section 1. Purpose.......................................................... 1
Section 2. Definitions...................................................... 1
Section 3. Administration................................................... 4
Section 4. Common Stock Subject to the Plan................................. 5
Section 5. Eligibility to Receive Awards.................................... 6
Section 6. Stock Options.................................................... 6
Section 7. Stock Appreciation Rights....................................... 10
Section 8. Performance Unit Awards......................................... 12
Section 9. Restricted Stock Awards......................................... 13
Section 10. Stock Bonus Awards.............................................. 14
Section 11. Loans........................................................... 15
Section 12. Securities Law Requirements..................................... 15
Section 13. Restrictions on Transfer; Representations of Participant;
Legends......................................................... 15
Section 14. Right of Repurchase............................................. 16
Section 15. Right of First Refusal.......................................... 18
Section 16. Single or Multiple Agreements................................... 19
Section 17. Rights of a Stockholder......................................... 19
Section 18. No Right to Continue Employment or Service...................... 19
Section 19. Withholding..................................................... 19
Section 20. Indemnification................................................. 19
Section 21. Non-Assignability............................................... 20
Section 22. Nonuniform Determinations....................................... 20
Section 23. Adjustments..................................................... 20
Section 24. Termination and Amendment....................................... 20
Section 25. Severability.................................................... 20
Section 26. Effect on Other Plans........................................... 21
Section 27. Effective Date of the Plan...................................... 21
Section 28. Governing Law................................................... 21
Section 29. Gender and Number............................................... 21
Section 30. Acceleration of Exercisability and Vesting...................... 21
Section 31. Modification of Awards.......................................... 21
Section 32. No Strict Construction.......................................... 22
Section 33. Successors...................................................... 22
Section 34. Plan Provisions Control......................................... 22
Section 35. Headings........................................................ 22
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MILLENNIUM CELL INC.
AMENDED AND RESTATED
2000 STOCK OPTION PLAN
SECTION 1. PURPOSE. The purpose of the Millennium Cell Inc. Amended and
Restated 2000 Stock Option Plan (the "Plan") is to foster and promote the
long-term financial success of Millennium Cell Inc., a Delaware corporation (the
"Company"), and its Subsidiaries and thereby increase stockholder value. The
Plan provides for the award of long-term incentives to those directors,
consultants, advisers, officers and other employees who make substantial
contributions to the Company or its Subsidiaries by their loyalty, industry and
invention.
SECTION 2. DEFINITIONS. For purposes of this Plan, the following terms
used herein shall have the following meanings, unless a different meaning is
clearly required by the context.
2.1 "Board" means the Board of Directors of the Company.
2.2 "Cause" means any one of the following: the Participant's conviction
for any felony crime, the Participant's refusal to perform his or her assigned
duties, engaging in any act of fraud injurious to the Company or any Subsidiary,
the Participant's breach of any contract where such breach is materially
injurious to the Company or any Subsidiary, engaging in any conduct that
constitutes willful gross neglect with respect to the Company or any Subsidiary
and engaging in willful misconduct that results in material economic harm to the
Company or any Subsidiary.
2.3 "Change of Control" means the occurrence of any of the following:
(i) the Board votes to approve:
(A) any consolidation or merger of the Company pursuant to
which less than 50% of the outstanding voting securities of the surviving or
resulting company are owned by the individuals or entities which were
shareholders of the Company prior to the consolidation or merger;
(B) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or substantially all,
of the assets of the Company other than any sale, lease, exchange or other
transfer to any company where the Company owns, directly or indirectly, 100% of
the outstanding voting securities of such company after any such transfer;
(ii) any person (as such term is used in Section 13(d) of the
Exchange Act), other than one or more current shareholders, the Company, a
Subsidiary, or one or more employee benefit plans established by the Company for
the benefit of employees of the Company or its subsidiaries, shall become the
beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act)
whether directly, indirectly, beneficially or of record, of 35% or more of
outstanding Common Stock (other than as the result of an initial public
offering);
(iii) commencement by any entity, person, or group (including any
affiliate thereof, other than the Company) of a tender offer or exchange offer
where the offeree acquires more than 50% of the outstanding voting securities of
the Company.
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2.4 "Code" means the Internal Revenue Code of 1986, as amended.
2.5 "Committee" shall have the meaning provided in Section 3 of the Plan.
2.6 "Common Stock" means the common stock, $.001 par value, of the
Company.
2.7 "Constructive Discharge" means upon or within 18 months of a "Change
in Control," the termination of a Participant's Continuous Service by the
Participant on account of (i) a material reduction in the Participant's
compensation, (ii) a material reduction in the level or scope of job
responsibility or status of the Participant occurring without the Participant's
consent, or (iii) the relocation of a Participant to a location which is more
than 50 miles from the office of the Company where the Participant was
previously located to which the Participant has not agreed.
2.8 "Continuous Service" means that the Participant's service with the
Company or any Subsidiary whether as an employee, officer, director, adviser or
consultant, is not interrupted or terminated. Subject to Section 2.7 above, the
Participant's Continuous Service shall not be deemed to have terminated merely
because of a change in the capacity in which the Participant renders service to
the Company or any Subsidiary as an employee, officer, consultant, adviser or
director or a change in the entity for which the Participant renders such
service, provided that there is no interruption or termination of the
Participant's Continuous Service. For example, a change in status from an
employee of the Company to a consultant of a Subsidiary or a director will not
constitute an interruption of Continuous Service. The Board or the chief
executive officer of the Company, in that party's sole discretion, may determine
whether Continuous Service shall be considered interrupted in the case of any
leave of absence approved by that party, including sick leave, military leave or
any other personal leave.
2.9 "Disability" means, as it relates to the exercise of an Incentive
Stock Option after termination of employment, a disability within the meaning of
Section 22(e)(3) of the Code, and for all other purposes, a mental or physical
condition which, in the opinion of the Committee, renders a Participant unable
or incompetent to carry out the job responsibilities which such Participant held
or the tasks to which such Participant was assigned at the time the disability
was incurred, and which is expected to be permanent or for an indefinite
duration exceeding one year.
2.10 "Effective Date" shall have the meaning provided in Section 27 of the
Plan.
2.11 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
2.12 "Fair Market Value" means, as determined by the Committee, the last
sale price as quoted on the National Market System on the trading day
immediately preceding the date for which the determination is being made or, in
the event that no such sale takes place on such day, the average of the reported
closing bid and asked prices on such day, or, if the Common Stock of the Company
is listed on a national securities exchange, the last reported sale price on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading on the trading day immediately preceding the date for which
the determination is being made or, if no such reported sale takes place on such
day, the average of the closing bid and asked prices on such day on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading, or if the Common Stock is not quoted on such National
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Market System nor listed or admitted to trading on a national securities
exchange, then the average of the closing bid and asked prices on the day
immediately preceding the date for which the determination is being made in the
over-the-counter market as reported by NASDAQ or, if bid and asked prices for
the Common Stock on such day shall not have been reported through NASDAQ, the
average of the bid and asked prices for such day as furnished by any New York
Stock Exchange member firm regularly making a market in the Common Stock
selected for such purpose by the Board or a committee thereof. If none of the
foregoing is applicable, then the fair market value of the Common Stock shall be
its value as determined in connection with the Company's most recent corporate
financing; provided, however, that if a significant event (as determined in good
faith by the Committee in its sole discretion) has occurred with respect to the
Company since the Company's most recent corporate financing, the value of the
Common Stock shall be determined in good faith by the Committee in its sole
discretion.
2.13 "Immediate Family" means the Participant's spouse, parents, children,
stepchildren, adoptive relationships, sisters, brothers and grandchildren (and,
for this purpose, shall also include the Participant.
2.14 "Incentive Stock Option" means a stock option granted under the Plan
which is intended to be designated as an "incentive stock option" within the
meaning of Section 422 of the Code.
2.15 "Listing Date" means the first date upon which any security of the
Company is listed (or approved for listing) upon notice of issuance on any
securities exchange or designated (or approved for designation) upon notice of
issuance as a national market security on an interdealer quotation system.
2.16 "Non-Qualified Stock Option" means a stock option granted under the
Plan which is not intended to be an Incentive Stock Option, including any stock
option that provides (as of the time such option is granted) that it will not be
treated as an Incentive Stock Option nor as an option described in Section
423(b) of the Code.
2.17 "Parent Company" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if, at the time of the
granting of the option, each of the corporations other than the Company owns
stock possessing 50 percent or more of the combined voting power of all classes
of stock in one of the other corporations in the chain.
2.18 "Participant" shall mean any employee, director or officer of, or key
adviser or consultant to, the Company or any Subsidiary to whom an award is
granted under the Plan.
2.19 "Performance Unit Award" means an award made pursuant to Section 8.
2.20 "Plan Year" means the twelve-month period beginning on January 1 and
ending on December 31; provided, however, that the first Plan Year shall be a
short Plan Year beginning on the Effective Date and ending on December 31, 2000.
2.21 "Restricted Stock Award" means an award of shares of Common Stock
pursuant to Section 9.
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2.22 "Retirement" means termination of a Participant's Continuous Service
on or after the Participant's 65th birthday other than as a result of death,
Disability or termination for Cause.
2.23 "Stock Appreciation Right" means an award made pursuant to Section 7.
2.24 "Stock Bonus Award" means an award made pursuant to Section 10.
2.25 "Stock Option" means any option to purchase Common Stock granted
pursuant to Section 6.
2.26 "Subsidiary" means: (i) as it relates to Incentive Stock Options, any
corporation (other than the Company) in an unbroken chain of corporations
beginning with the Company if, at the time of the granting of the option, each
of the corporations (other than the last corporation in the unbroken chain) owns
stock possessing 50 percent or more of the total combined voting power of all
classes of stock in one of the other corporations in the chain; and (ii) for all
other purposes, a company, domestic or foreign, of which not less than 50
percent of the voting shares are held by the Company or by a Subsidiary, whether
or not such company now exists or is hereafter organized or acquired by the
Company or by a Subsidiary .
2.27 "Term of the Plan" means the period beginning on the Effective Date
and ending on the earlier to occur of (i) the date the Plan is terminated by the
Committee in accordance with Section 24 and (ii) the date which is ten years
from the Effective Date.
SECTION 3. ADMINISTRATION. The Plan shall be administered by the Board or
a committee of the Board (as the Board in its sole discretion shall determine);
provided, however, that if the Company registers any class of equity security
pursuant to Section 12 of the Exchange Act, and if the Plan is to be
administered by a committee, then such committee shall consist of two or more
members of the Board, each of whom shall each qualify as a "Non-employee
Director" within the meaning of Rule 16b-3 of the Exchange Act and also qualify
as an "outside director" within the meaning of Section l62(m) of the Code and
regulations pursuant thereto. For purposes of the Plan, the Board acting in this
capacity or the Committee described in the preceding sentence shall be referred
to as the "Committee". The Committee shall have the power and authority to grant
to eligible persons pursuant to the terms of the Plan: (1) Stock Options, (2)
Stock Appreciation Rights, (3) Restricted Stock Awards, (4) Performance Unit
Awards, (5) Stock Bonus Awards, or (6) any combination of the foregoing.
The Committee shall have authority in its discretion to interpret the
provisions of the Plan and to decide all questions of fact arising in its
application; to select the persons to whom awards shall be made under the Plan;
to determine whether and to what extent awards shall be made under the Plan; to
determine the types of award to be made and the amount, size, terms and
conditions of each such award; to determine the time when the awards shall be
granted; to determine whether, to what extent and under what circumstances
Common Stock and other amounts payable with respect to an award under the Plan
shall be deferred either automatically or at the election of the Participant; to
adopt, alter and repeal such administrative rules, guidelines and practices
governing the Plan as it shall from time to time deem advisable; and to make all
other determinations necessary or advisable for the administration of the Plan.
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The Committee also shall have authority in its discretion to vary the
terms of the Plan to the extent necessary to comply with federal, state or local
law.
Notwithstanding anything in the Plan to the contrary, with respect to any
Participant or eligible person who is resident outside of the United States, the
Committee may, in its sole discretion, amend the terms of the Plan in order to
conform such terms with the requirements of local law or to meet the objectives
of the Plan. The Committee may, where appropriate, establish one or more
sub-plans for this purpose.
All decisions made by the Committee pursuant to the provisions of the Plan
shall be final and binding on all persons who participate in the Plan.
All expenses and liabilities incurred by the Committee in the
administration of the Plan shall be borne by the Company. The Committee may
employ attorneys, consultants, accountants or other persons in connection with
the administration of the Plan. The Company, and its officers and directors,
shall be entitled to rely upon the advice, opinions or valuations of any such
persons.
SECTION 4. COMMON STOCK SUBJECT TO THE PLAN.
4.1 Share Reserve. There shall be reserved and available for issuance
under the Plan 5,500,000 shares of Common Stock, subject to such adjustment as
may be made pursuant to Section 23.
4.2 Source of Shares/Reversion of Shares. Such shares may consist in whole
or in part of authorized and unissued shares or treasury shares or any
combination thereof as the Committee may determine. Except as otherwise provided
herein, any shares subject to an option or right which for any reason expires or
is terminated unexercised, becomes unexercisable, or is forfeited or otherwise
terminated, surrendered or canceled as to any shares, or if any shares of Common
Stock are surrendered to the Company in connection with any award (whether or
not such surrendered shares were acquired pursuant to any award), or if any
shares are withheld by the Company, the shares subject to such award and the
surrendered and withheld shares shall thereafter be available for further awards
under the Plan; provided, however, that any such shares that are surrendered to
or withheld by the Company in connection with any award or that are otherwise
forfeited after issuance shall not be available for purchase pursuant to
Incentive Stock Options. No awards may be granted following the end of the Term
of the Plan.
4.3 Code Section 162(m) Limitation. The total number of shares of Common
Stock for which (i) Stock Options, (ii) Stock Appreciation Rights, and (iii)
Restricted Stock Awards and Stock Bonus Awards that are subject to the
attainment of performance criteria to protect against loss of deductibility
under Section 162(m) of the Code, may be granted to any employee during any
twelve month period shall not exceed 1,100,000 in the aggregate, subject to
adjustment pursuant to Section 23. The maximum amount that may be earned under
Performance Unit Awards that are subject to the attainment of performance
criteria to protect against loss of deductibility under Section 162(m) of the
Code, by any employee during any twelve month period shall not exceed
$1,000,000. This Section 4.3 shall not apply prior to the Listing Date and,
following the Listing Date, this Section 4.3 shall not apply until (i) the
earliest of: (1) the
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first material modification of the Plan (including any increase in the number of
shares of Common Stock reserved for issuance under the Plan in accordance with
Section 4.1); (2) the issuance of all of the shares of Common Stock reserved for
issuance under the Plan; (3) the expiration of the Plan; or (4) the first
meeting of shareholders at which directors are to be elected that occurs after
the close of the third calendar year following the calendar year in which
occurred the first registration of an equity security under Section 12 of the
Exchange Act; or (ii) such other date required by Section 162(m) of the Code and
the rules and regulations promulgated thereunder.
SECTION 5. ELIGIBILITY TO RECEIVE AWARDS. An award may be granted to any
employee, director, or officer of, or key adviser or consultant to, the Company
or any Subsidiary, who is responsible for or contributes to the management,
growth or success of the Company or any Subsidiary, provided that bona fide
services shall be rendered by consultants or advisers to the Company or its
Subsidiaries and such services must not be in connection with the offer and sale
of securities in a capital-raising transaction and must not directly or
indirectly promote or maintain a market for the Company's securities. Subject to
the preceding sentence, the Committee shall have the sole authority to select
the persons to whom an award is to be granted hereunder and to determine what
type of award is to be granted to each such person. No person shall have any
right to participate in the Plan. Any person selected by the Committee for
participation during any one period will not by virtue of such participation
have the right to be selected as a Participant for any other period.
SECTION 6. STOCK OPTIONS. A Stock Option may be an Incentive Stock Option
or a Non-Qualified Stock Option. Only employees of the Company or any Parent or
Subsidiary of the Company are eligible to receive Incentive Stock Options. To
the extent that any Stock Option does not qualify as an Incentive Stock Option,
it shall constitute a separate Non-Qualified Stock Option. Stock Options may be
granted alone or in addition to other awards granted under the Plan. The terms
and conditions of each Stock Option granted under the Plan shall be specified by
the Committee, in its sole discretion, and shall be set forth in a written
option agreement between the Company and the Participant in such form as the
Committee shall approve from time to time. No person shall have any rights under
any Stock Option granted under the Plan unless and until the Company and the
person to whom such Stock Option shall have been granted shall have executed and
delivered an agreement expressly granting the Stock Option to such person and
containing provisions setting forth the terms for the Stock Option. The terms
and conditions of each Incentive Stock Option shall be such that each Incentive
Stock Option issued hereunder shall constitute and shall be treated as an
"incentive stock option" as defined in Section 422 of the Code. The terms and
conditions of each Non-Qualified Stock Option will be such that each
Non-Qualified Stock Option issued hereunder shall not constitute nor be treated
as an "incentive stock option" as defined in Section 422 of the Code or an
option described in Section 423(b) of the Code and will be a "non-qualified
stock option" for federal income tax purposes. The terms and conditions of any
Stock Option granted hereunder need not be identical to those of any other Stock
Option granted hereunder. The agreements shall contain in substance the
following terms and conditions and may contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Committee shall
deem desirable:
6.1 Type of Option. Each option agreement shall identify the option
represented thereby as an Incentive Stock Option or a Non-Qualified Stock
Option, as the case may be.
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6.2 Option Price. The Incentive Stock Option exercise price shall be fixed
by the Committee but shall in no event be less than 100 percent (or 110 percent
in the case of an employee referred to in Section 6.7(ii) below) of the Fair
Market Value of the shares of Common Stock subject to the Incentive Stock Option
on the date the Incentive Stock Option is granted. The Non-Qualified Stock
Option exercise price shall be fixed by the Committee but in no event shall be
less than the par value of the Common Stock.
6.3 Exercise Term. Each option agreement shall state the period or periods
of time within which the Stock Option may be exercised, in whole or in part,
which shall be such period or periods of time as may be determined by the
Committee, provided that no Stock Option shall be exercisable after ten years
from the date of grant thereof (or, in the case of an Incentive Stock Option
granted to an employee referred to in Section 6.7(ii) below, such term shall in
no event exceed five (5) years from the date on which such Incentive Stock
Option is granted); provided further, each option granted under the Plan shall
become exercisable six (6) months after the grant date, unless specifically
stipulated otherwise under the option agreement. The Committee shall have the
power to permit an acceleration of previously established exercise terms,
subject to the requirements set forth herein, upon such circumstances and
subject to such terms and conditions as the Committee deems appropriate.
6.4 Payment for Shares. A Stock Option shall be deemed to be exercised
when written notice of such exercise has been given to the Company in accordance
with the terms of the option agreement by the Participant entitled to exercise
the Stock Option and full payment for the shares of Common Stock with respect to
which the Stock Option is exercised has been received by the Company. The
Committee, in its sole discretion, may permit all or part of the payment of the
exercise price to be made, to the extent permitted by applicable statutes and
regulations, either: (i) in cash, by check or wire transfer, (ii) in any other
form of legal consideration as provided for under the terms of the Stock Option
agreement, or (iii) in the event the Common Stock is listed on any United States
securities exchange or traded on NASDAQ or on an over-the-counter quotation
system in the United States, through the delivery of irrevocable instructions to
a broker to deliver property to the Company in an amount equal to the aggregate
exercise price for the shares being purchased. In lieu of payment in fractions
of shares, payment of any fractional share amount shall be made in cash or check
payable to the Company. No shares of Common Stock shall be issued to any
Participant upon exercise of a Stock Option until the Company receives full
payment therefor as described above. Upon the receipt of notice of exercise and
full payment for the shares of Common Stock, the shares of Common Stock shall be
deemed to have been issued and the Participant shall be entitled to receive such
shares of Common Stock and shall be a stockholder with respect to such shares,
and the shares of Common Stock shall be considered fully paid and nonassessable.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date on which the stock certificate is issued, except as
provided in Section 23 of the Plan. Each exercise of a Stock Option shall
reduce, by an equal number, the total number of shares of Common Stock that may
thereafter be purchased under such Stock Option.
6.5 Rights upon Termination of Continuous Service or Change of Control. In
the event that a Participant's Continuous Service terminates for any reason,
other than death, Retirement, Disability, or for Cause, any rights of the
Participant under any Stock Option shall immediately terminate; provided,
however, that the Participant (or any successor or legal representative) shall
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have the right to exercise the Stock Option (to the extent that the Stock Option
was exercisable at the time of termination) within a period equal to the lesser
of: (i) three (3) months after the effective date of such termination of
Continuous Service, and (ii) the remainder of the term set forth in the Stock
Option agreement.
In the event that a Participant's Continuous Service terminates for
Cause, the Participant (or any successor or legal representative) shall not have
any rights under any Stock Option, and the Company shall not be obligated to
sell or deliver shares of Common Stock (or have any other obligation or
liability) under the Plan. The Committee shall determine in its sole discretion
whether the Participant's Continuous Service shall have been terminated for
Cause. In the event of such determination, the Participant (or any successor or
legal representative) shall have no right under any Stock Option to purchase any
shares of Common Stock regardless of whether the Participant (or any successor
or legal representative) shall have delivered a notice of exercise prior to the
making of such determination. Any Stock Option may be terminated entirely by the
Committee at the time or at any time subsequent to a determination by the
Committee under this Section 6.5 which has the effect of eliminating the
Company's obligation to sell or deliver shares of Common Stock under such Stock
Option.
In the event that a Participant's Continuous Service terminates due to a
Participant's Retirement prior to the expiration of the Stock Option and without
the Participant's having fully exercised the Stock Option, the Stock Option
shall be deemed to be fully exercisable, and the Participant or his successor or
legal representative shall have the right to exercise the Stock Option within a
period of three (3) months following such Retirement.
In the event that a Participant's Continuous Service terminates due to a
Participant's Disability prior to the expiration of the Stock Option and without
the Participant's having fully exercised the Stock Option, the Stock Option
shall be deemed to be exercisable as the Committee, in its sole discretion, may
determine, and the Participant or his successor or legal representative shall
have the right to exercise the Stock Option within the period determined by the
Committee.
In the event that a Participant's Continuous Service terminates due to a
Participant's death prior to the expiration of the Stock Option and without the
Participant's having fully exercised the Stock Option, the Stock Option shall be
deemed to be fully exercisable, and the Participant's successor or legal
representative shall have the right to exercise the Stock Option within a period
of twelve (12) months following the Participant's death.
The Stock Option agreement may, but need not, include a provision whereby
the Participant may elect at any time before the Participant's Continuous
Service terminates to exercise the Stock Option as to any part or all of the
shares of Common Stock subject to the Stock Option prior to the full vesting of
the Stock Option. Any unvested shares of Common Stock so purchased may be
subject to a repurchase option in favor of the Company (including but not
limited to the Right of Repurchase under Section 14) or to any other restriction
the Committee determines to be appropriate.
In the event of a Change of Control prior to the date a Participant's
Continuous Service terminates, each outstanding Stock Option granted to such
Participant shall be assumed or an
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equivalent Stock Option substituted by the successor corporation (or a parent or
subsidiary of the successor corporation). In the event that the successor
corporation (or a parent or subsidiary of the successor corporation) refuses to
assume or substitute for each Stock Option, each Stock Option shall continue to
vest and be exercisable in accordance with the terms and conditions of each such
Stock Option. Notwithstanding any provision of this Plan to the contrary, in the
event that any Participant who is an officer of the Company or a Subsidiary has
his or her Continuous Service terminated by reason of a Constructive Discharge,
each unexercised Stock Option granted to such Participant shall immediately
become 100% vested and exercisable as of the date of the termination of such
Participant's Continuous Service.
6.6 Re-load Options. Without in any way limiting the authority of the
Committee to make or not to make grants of Stock Options hereunder, the
Committee shall have the authority (but not an obligation) to include as part of
any Stock Option a provision entitling the Participant to a further Stock Option
(a "Re-Load Option") in the event the Participant exercises the original Stock
Option, in whole or in part, by surrendering other shares of Common Stock in
accordance with this Plan and the terms and conditions of the Stock Option
agreement. Any such Re-Load Option shall (i) provide for a number of shares of
Common Stock equal to the number of shares of Common Stock surrendered as part
or all of the exercise price of such Stock Option; (ii) have an expiration date
which is the same as the expiration date of the Stock Option the exercise of
which gave rise to such Re-Load Option; and (iii) have an exercise price fixed
by the Committee, but in no event shall the exercise price be less than the par
value of the Common Stock. Notwithstanding the foregoing, a Re-Load Option shall
be subject to the same exercise price and term provisions heretofore described
for Stock Options under the Plan.
Any such Re-Load Option may be an Incentive Stock Option or a
Non-Qualified Stock Option, as the Committee may designate at the time of the
grant of the original Stock Option; provided, however, the designation of any
Re-Load Option as an Incentive Stock Option shall be subject to the $100,000
annual limitation on the exercisability of Incentive Stock Options described in
Section 6.7 and in Section 422(d) of the Code. Furthermore, any Re-Load Option
designated as an Incentive Stock Option shall have an exercise price which is
equal to 100 percent of the Fair Market Value of the Common Stock subject to the
Re-Load Option on the date of exercise of the original Stock Option. There shall
be no Re-Load Options on a Re-Load Option. Any such Re-Load Option shall be
subject to the availability of sufficient shares of Common Stock under Section
4.1 and the limitation on the grants of Stock Options under Section 4.3 and
shall be subject to such other terms and conditions as the Committee may
determine which are not inconsistent with the express provisions of the Plan
regarding the terms of Stock Options.
6.7 Special Incentive Stock Option Rules. Notwithstanding the foregoing,
in the case of an Incentive Stock Option, each option agreement shall contain
such other terms, conditions and provisions as the Committee determines
necessary or desirable in order to qualify such Stock Option as an Incentive
Stock Option under the Code including, without limitation, the following:
(i) To the extent that the aggregate Fair Market Value (determined
as of the time the option is granted) of the Common Stock, with respect to which
Incentive Stock Options granted under this Plan (and all other plans of the
Company and its Subsidiaries) become exercisable for the first time by any
person in any calendar year, exceeds $100,000, such options shall be treated as
Non-Qualified Stock Options; and
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(ii) No Incentive Stock Option shall be granted to any employee if,
at the time the Incentive Stock Option is granted, the employee (by reason of
the attribution rules applicable under Section 424(d) of the Code) owns more
than 10 percent of the combined voting power of all classes of stock of the
Company or any Parent or Subsidiary unless at the time such Incentive Stock
Option is granted the option price is at least 110 percent of the Fair Market
Value (determined as of the time the Incentive Stock Option is granted) of the
shares of Common Stock subject to the Incentive Stock Option and such Incentive
Stock Option by its terms is not exercisable after the expiration of five years
from the date of grant.
If an Incentive Stock Option is exercised after the expiration of the exercise
periods that apply for purposes of Section 422 of the Code, such Stock Option
shall thereafter be treated as a Non-Qualified Stock Option.
SECTION 7. STOCK APPRECIATION RIGHTS. Stock Appreciation Rights entitle
Participants to increases in the Fair Market Value of shares of Common Stock.
The terms and conditions of each Stock Appreciation Right granted under the Plan
shall be specified by the Committee, in its sole discretion, and shall be set
forth in a written agreement between the Company and the Participant in such
form as the Committee shall approve from time to time. The agreements shall
contain in substance the following terms and conditions and may contain such
additional terms and conditions, not inconsistent with the terms of the Plan, as
the Committee shall deem desirable:
7.1 Award. Stock Appreciation Rights shall entitle the Participant,
subject to such terms and conditions determined by the Committee, to receive
upon exercise thereof an award equal to all or a portion of the excess of: (i)
the Fair Market Value of a specified number of shares of Common Stock at the
time of exercise, over (ii) a specified price which shall not be less than 100
percent of the Fair Market Value of the Common Stock at the time the right is
granted or, if connected with a previously issued Stock Option, not less than
100 percent of the Fair Market Value of the Common Stock at the time such Stock
Option was granted. Such amount may be paid by the Company in cash, Common Stock
(valued at its then Fair Market Value) or any combination thereof, as the
Committee may determine. Stock Appreciation Rights may be, but are not required
to be, granted in connection with a previously or contemporaneously granted
Stock Option. In the event of the exercise of a Stock Appreciation Right, the
number of shares reserved for issuance hereunder shall be reduced by the number
of shares covered by the Stock Appreciation Right.
7.2 Term. Each agreement shall state the period or periods of time within
which the Stock Appreciation Right may be exercised, in whole or in part,
subject to such terms and conditions prescribed for such purpose by the
Committee provided that no Stock Appreciation Right shall be exercisable prior
to six months nor after ten years from the date of grant thereof. The Committee
shall have the power to permit an acceleration of previously established
exercise terms, subject to the requirements set forth herein, upon such
circumstances and subject to such terms and conditions as the Committee deems
appropriate.
7.3 Rights upon Termination of Continuous Service or Change of Control. In
the event that a Participant's Continuous Service terminates for any reason,
other than death, Retirement, Disability or for Cause, any rights of the
Participant under any Stock Appreciation Right shall
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immediately terminate; provided, however, that the Participant (or any successor
or legal representative) shall have the right to exercise the Stock Appreciation
Right (to the extent that the Stock Appreciation Right was exercisable at the
time of termination) within a period equal to the lesser of (i) three (3) months
after the effective date of such termination of Continuous Service, and (ii) the
remainder of term set forth in the Stock Appreciation Right.
In the event that a Participant's Continuous Service terminates for Cause,
the Participant (or any successor or legal representative) shall not have any
rights under any Stock Appreciation Right, and the Company shall not be
obligated to pay or deliver any cash, Common Stock or any combination thereof
(or have any other obligation or liability) under any Stock Appreciation Right.
The Committee shall determine in its sole discretion whether the Participant's
Continuous Service shall have been terminated for Cause. In the event of such
determination, the Participant (or any successor or legal representative) shall
have no right under any Stock Appreciation Right to purchase any shares of
Common Stock regardless of whether the Participant (or any successor or legal
representative) shall have delivered a notice of exercise prior to the making of
such determination. Any Stock Appreciation Right may be terminated entirely by
the Committee at the time of or at any time subsequent to the determination by
the Committee under this Section 7.3 which has the effect of eliminating the
Company's obligations under such Stock Appreciation Right.
In the event that a Participant's Continuous Service terminates due to a
Participant's Retirement prior to the expiration of the Stock Appreciation Right
and without the Participant's having fully exercised the Stock Appreciation
Right, the Stock Appreciation Right shall be deemed to be fully exercisable, and
the Participant or his successor or legal representative shall have the right to
exercise the Stock Appreciation Right within a period of three (3) months
following such Retirement.
In the event that a Participant's Continuous Service terminates due to a
Participant's Disability prior to the expiration of the Stock Appreciation Right
and without the Participant's having fully exercised the Stock Appreciation
Right, the Stock Appreciation Right shall be deemed to be exercisable as the
Committee, in it's sole discretion, may determine, and the Participant or his
successor or legal representative shall have the right to exercise the Stock
Appreciation Right within the period determined by the Committee.
In the event that a Participant's Continuous Service terminates due to a
Participant's death prior to the expiration of the Stock Appreciation Right and
without the Participant's having fully exercised the Stock Appreciation Right,
the Stock Appreciation Right shall be deemed to be fully exercisable, and the
Participant's successor or legal representative shall have the right to exercise
the Stock Appreciation Right within a period of twelve (12) months following the
Participant's death.
In the event of a Change of Control prior to the date a Participant's
Continuous Service terminates, each outstanding Stock Appreciation Right granted
to such Participant shall be assumed or an equivalent Stock Appreciation Right
substituted by the successor corporation (or a parent or subsidiary of the
successor corporation). In the event that the successor corporation (or a parent
or subsidiary of the successor corporation) refuses to assume or substitute for
each Stock Appreciation Right, each Stock Appreciation Right shall continue to
vest and be exercisable in
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accordance with the terms and conditions of each such Stock Appreciation Right.
Notwithstanding any provision of this Plan to the contrary, in the event that
any Participant who is an officer of the Company or a Subsidiary has his or her
Continuous Service terminated by reason of a Constructive Discharge, each
unexercised Stock Appreciation Right granted to such Participant shall
immediately become 100% vested and exercisable as of the date of the termination
of such Participant's Continuous Service.
SECTION 8. PERFORMANCE UNIT AWARDS. Performance Unit Awards under the Plan
shall entitle Participants to future payments based upon the achievement of
preestablished long-term performance objectives. The terms and conditions of
each Performance Unit Award granted under the Plan shall be specified by the
Committee, in its sole discretion, and shall be set forth in a written agreement
between the Company and the Participant in such form as the Committee shall
approve from time to time. The agreements shall contain in substance the
following terms and conditions and may contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Committee shall
deem desirable:
8.1 Performance Period. The Committee shall establish with respect to each
Performance Unit Award a performance period as determined by the Committee in
its discretion.
8.2 Unit Value. The Committee shall establish with respect to each
Performance Unit Award a value for each unit which shall not thereafter change
or which may vary thereafter on the basis of criteria specified by the
Committee.
8.3 Performance Targets. The Committee shall establish with respect to
each Performance Unit Award maximum and minimum performance targets to be
achieved during the applicable performance period. The achievement of maximum
targets shall entitle a Participant to payment with respect to the full value of
a Performance Unit Award. The achievement of less than the maximum targets, but
in excess of the minimum targets, shall entitle a Participant to payment with
respect to a portion of a Performance Unit Award according to the level of
achievement of targets as specified by the Committee. To the extent the
Committee deems necessary or appropriate to protect against the loss of
deductibility pursuant to Section 162(m) of the Code, such targets shall be
established in conformity with the requirements of Section 162(m) of the Code.
8.4 Performance Measures. Performance targets established by the Committee
shall relate to corporate, division, subsidiary, group or unit performance and
may be established in terms of growth in gross revenue, earnings per share, or
ratios of earnings to equity or assets, net profits, stock price, market share,
sales or costs or, with respect to Participants not subject to Section 162(m) of
the Code, such other measures or standards determined by the Committee in its
discretion. Multiple targets may be used and may have the same or different
weighting, and they may relate to absolute performance or relative performance
measured against other companies or businesses.
8.5 Adjustments. At any time prior to payment of a Performance Unit Award,
the Committee may adjust previously established performance targets or other
terms and conditions, including the Company's or other company's financial
performance, for Plan purposes, in order to reduce or eliminate, but not to
increase, the payment with respect to a Performance Unit
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<PAGE> 15
Award that would otherwise be due upon attainment of a preestablished
performance objective. Such adjustments shall be made to reflect major
unforeseen events such as changes in laws, regulations or accounting practices,
mergers, acquisitions or divestitures or other extraordinary, unusual or
nonrecurring items or events.
8.6 Payment of Performance Unit Awards. Following the conclusion of each
performance period, the Committee shall determine the extent to which
performance targets have been attained, and any other terms and conditions
satisfied, for such period. The Committee shall determine what, if any, payment
is due on the Performance Unit Award and whether such payment shall be made in
cash, Common Stock or a combination thereof. Payment shall be made in a lump sum
or installments, as determined by the Committee, commencing as promptly as
practicable following the end of the performance period unless deferred subject
to such terms and conditions and in such form as may be prescribed by the
Committee.
8.7 Termination of Continuous Service or Change of Control. In the event
that a Participant's Continuous Service terminates for any reason, other than
death or Disability, any rights of the Participant or his successor or legal
representative under any Performance Unit Award shall immediately terminate.
In the event that a Participant's Continuous Service terminates because
such Participant dies or suffers a Disability, or in the event of a Change of
Control prior to the date a Participant's Continuous Service terminates, the
Committee may, in its sole discretion, pay to the Participant or his successor
or legal representative all or any portion of any Performance Unit Award to the
extent earned under the applicable performance targets regardless of whether the
applicable performance period has ended, pursuant to such terms as the Committee
in its sole discretion shall determine.
SECTION 9. RESTRICTED STOCK AWARDS. Restricted Stock Awards shall consist
of shares of Common Stock restricted against transfer ("Restricted Stock"),
subject to a substantial risk of forfeiture and other terms and conditions
intended to further the purpose of the Plan. The terms and conditions of each
Restricted Stock Award granted under the Plan shall be specified by the
Committee, in its sole discretion, and shall be set forth in a written agreement
between the Company and the Participant in such form as the Committee shall
approve from time to time. The agreements shall contain in substance the
following terms and conditions and may contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Committee shall
deem desirable:
9.1 Restriction Period. Restricted Stock Awards shall be subject to the
above-described restrictions over such period as the Committee determines. To
the extent the Committee deems necessary or appropriate to protect against loss
of deductibility pursuant to Section 162(m) of the Code, Restricted Stock Awards
to certain Participants may also be subject to certain conditions with respect
to attainment of one or more preestablished performance objectives which shall
relate to corporate, subsidiary, division, group or unit performance in terms of
growth in gross revenue, earnings per share or ratios of earnings to equity or
assets; provided that such objectives may be adjusted to reduce or eliminate,
but not to increase, an award in order to take into account unforeseen events or
changes in circumstances.
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9.2 Restriction upon Transfer. Shares awarded, and the right to vote such
shares and to receive dividends thereon, may not be sold, assigned, transferred,
exchanged, pledged, hypothecated or otherwise encumbered, except as herein
provided or as provided in any agreement entered into between the Company and a
Participant in connection with the Plan, during the restriction period
applicable to such shares. Notwithstanding the foregoing, and except as
otherwise provided in the Plan, the Participant shall have all the other rights
of a stockholder including, but not limited to, the right to receive dividends
and the right to vote such shares.
9.3 Certificates. Each certificate issued in respect of shares awarded to
a Participant shall be registered in the name of the Participant and deposited
with the Company, or its designee, and shall bear the following legend:
"This certificate and the shares of stock represented hereby are
subject to the terms and conditions (including forfeiture
provisions and restrictions against transfer) contained in the
Millennium Cell Inc. Amended and Restated 2000 Stock Option Plan
and a Restricted Stock Award Agreement entered into between the
registered owner and Millennium Cell Inc. Release from such terms
and conditions shall be obtained only in accordance with the
provisions of the Plan and Agreement, a copy of each of which is
on file in the office of the Secretary of Millennium Cell Inc."
Each Participant, as a condition of any Restricted Stock Award, shall have
delivered a stock power, endorsed in blank, relating to the Common Stock covered
by such award.
9.4 Lapse of Restrictions. Except for preestablished performance
objectives established with respect to awards to Participants subject to Section
162(m) of the Code, the Committee may, in its sole discretion, provide for the
lapse of such restrictions in installments and may accelerate or waive such
restrictions in whole or in part based on such factors and such circumstances as
the Committee may determine. Upon the lapse of such restrictions, shares of
Common Stock, free of the restrictive legend set forth in Section 9.3 above,
shall be issued to the Participant or his legal representative. The Committee
shall have the power to permit, in its discretion, an acceleration of the
expiration of the applicable restrictions period with respect to any part or all
of the shares awarded to a Participant, except, with respect to Participants
subject to Section 162(m) of the Code, to the extent such acceleration would
result in the loss of the deductibility of an award to the Company.
9.5 Termination of Continuous Service or Change of Control. In the event
that a Participant's Continuous Service terminates for any reason, other than
death or Disability, any rights of the Participant or his successors or legal
representatives under any Restricted Stock Award that remains subject to
restrictions shall immediately terminate and any Restricted Stock Award with
unlapsed restrictions shall be forfeited to the Company without payment of any
consideration.
In the event that a Participant's Continuous Service terminates because
such Participant dies or suffers a Disability, all remaining shares of a
Restricted Stock Award shall no longer be subject to any unlapsed restrictions.
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In the event of a Change of Control prior to the date a Participant's
Continuous Service terminates, each share of a Restricted Stock Award granted to
such Participant shall be assumed or an equivalent Restricted Stock Award
substituted by the successor corporation (or a parent or subsidiary of the
successor corporation). In the event that the successor corporation (or a parent
or subsidiary of the successor corporation) refuses to assume or substitute for
each Restricted Stock Award, each Restricted Stock Award shall continue to vest
and be exercisable in accordance with the terms and conditions of each such
Restricted Stock Award. Notwithstanding any provision of this Plan to the
contrary, in the event that any Participant who is an officer of the Company or
a Subsidiary has his or her Continuous Service terminated by reason of a
Constructive Discharge, each Restricted Stock Award granted to such Participant
shall immediately become 100% vested and the Common Stock subject to the
Restricted Stock Award shall be fully vested Common Stock as of the date of the
termination of such Participant's Continuous Service.
SECTION 10. STOCK BONUS AWARDS. The Committee may, in its sole discretion,
grant a Stock Bonus Award based upon corporate, division, subsidiary, group or
unit performance in terms of growth in gross revenue, earnings per share or
ratios of earnings to equity or assets or, with respect to Participants not
subject to Section 162(m) of the Code, such other measures or standards
determined by the Committee in its discretion; provided, that such performance
objectives may be adjusted to reduce or eliminate but not to increase an award
in order to take into account unforeseen events or changes in circumstances.
The terms and conditions of each Stock Bonus Award granted under the Plan
shall be specified by the Committee, in its sole discretion, and shall be set
forth in a written agreement between the Company and the Participant in such
form as the Committee shall approve from time to time. In addition to any
applicable performance goals, shares of Common Stock subject to a Stock Bonus
Award may be: (i) subject to additional restrictions (including, without
limitation, restrictions on transfer), or (ii) granted directly to a person free
of any restrictions, not inconsistent with the terms of the Plan, as the
Committee shall deem desirable.
SECTION 11. LOANS. The Committee may, in its sole discretion and to
further the purpose of the Plan, provide for loans to persons in connection with
all or any part of an award under the Plan. Any loan made pursuant to this
Section 11 shall be evidenced by a loan agreement, promissory note or other
instruments in such form and which shall contain such terms and conditions
(including, without limitation, provisions for interest, payment, schedules,
collateral, forgiveness, acceleration of such loans or parts thereof or
acceleration in the event of termination) as the Committee shall prescribe from
time to time. Notwithstanding the foregoing, each loan shall comply with all
applicable laws, regulations and rules of the Board of Governors of the Federal
Reserve System and any other governmental agency having jurisdiction.
SECTION 12. SECURITIES LAW REQUIREMENTS. No shares of Common Stock shall
be issued upon the exercise or payment of any Award unless and until:
(i) The shares of Common Stock underlying the Award have been
registered under the Securities Act of 1933, as amended (the "Act"), or the
Company has determined that an exemption from the registration requirements
under the Act is available or the registration requirements of the Act do not
apply to such exercise or payment;
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(ii) The Company has determined that all applicable
listing requirements of any stock exchange or quotation system on which the
shares of Common Stock are listed have been satisfied; and
(iii) The Company has determined that any other applicable
provision of state or Federal law, including without limitation applicable state
securities laws, has been satisfied.
SECTION 13. RESTRICTIONS ON TRANSFER; REPRESENTATIONS OF PARTICIPANT;
LEGENDS.
The Committee in its sole discretion may restrict the transferability
of shares until the Common Stock is listed on any United States securities
exchange or traded on NASDAQ or an over-the-counter quotation system in the
United States.
Regardless of whether the offering and sale of shares of Common Stock
has been registered under the Securities Act or has been registered or qualified
under the securities laws of any state, the Company may impose restrictions upon
the sale, pledge, or other transfer of such shares, including the placement of
appropriate legends on stock certificates, if, in the judgment of the Company
and its counsel, such restrictions are necessary or desirable in order to
achieve compliance with the provisions of the Securities Act, the securities
laws of any state, or any other law. As a condition to the Participant's receipt
of shares, the Company may require the Participant to represent that such shares
are being acquired for investment, and not with a view to the sale or
distribution thereof, except in compliance with the Securities Act, and to make
other representations as are deemed necessary or appropriate by the Company and
its counsel. Stock certificates evidencing shares acquired pursuant to an
unregistered transaction to which the Securities Act applies shall bear a
restrictive legend substantially in the following form and such other
restrictive legends as are required or deemed advisable under the Plan or the
provisions of any applicable law:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.
THESE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION
THEREOF, AND MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED
OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
UNDER THE ACT AND QUALIFICATION UNDER ANY APPLICABLE STATE
SECURITIES LAWS, OR WITHOUT AN OPINION OF COUNSEL ACCEPTABLE
TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION OR
QUALIFICATION IS NOT REQUIRED."
The Company shall also place legends on stock certificates representing its
right of repurchase under Section 14 hereof and the right of first refusal under
Section 15 hereof. Any determination
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by the Company and its counsel in connection with any of the matters set forth
in this Section 13 shall be conclusive and binding on all persons.
The Company may, but shall not be obligated to, register or qualify the
sale of shares under the Securities Act or any other applicable law.
SECTION 14. RIGHT OF REPURCHASE.
14.1 Repurchase Right. At the Committee's discretion, shares of
Common Stock issued to a Participant under this Plan may be subject to a right,
but not an obligation, of repurchase by the Company (the "Right of Repurchase"),
at the price specified in Section 14.2 below, if the Participant's Continuous
Service terminates for any reason ("Employment Termination"). Shares issued by
the Company shall be transferable only by the Participant subject to the Right
of Repurchase, and the Company shall legend the Right of Repurchase on the stock
certificates evidencing such shares and shall take such other steps as it deems
necessary to ensure compliance with this restriction. The Company's rights under
this Section 14.1 shall be freely assignable, in whole or in part.
14.2 Repurchase Price. The price per share at which the Company may
exercise the Right of Repurchase under Section 14.1 (the "Repurchase Price")
shall be:
(a) the lower of: (i) the exercise price of each share as
paid by the Participant (in the case of a Stock Option), or (ii) the Fair Market
Value of each share at the later of the date of the Participant's Employment
Termination or the date of issuance of such share to the Participant (provided,
the Company's ability to exercise the Right of Repurchase at the exercise price
of each share as paid by the Participant shall only apply to unvested shares
issued upon early exercise of the nonvested portion of the Participant's Stock
Option and shall lapse at a rate that will result in the same vesting as if
early exercise of the nonvested portion of the Participant's Stock Option had
not occurred); or
(b) such other price as the Committee in its sole
discretion shall determine in accordance with applicable state Blue Sky or other
laws.
14.3 Repurchase Procedure. The Company may exercise its Right of
Repurchase by sending a written notice to the Participant or his or her
successor or legal representative and to the escrow agent, if any, of its taking
such action and specifying the number of shares being repurchased. The Company's
Right of Repurchase with respect to vested shares at their Fair Market Value as
provided in clause (a)(ii) of Section 14.2 above shall terminate if not
exercised by written notice from the Company to the Participant or his or her
successor or legal representative within thirty (30) days of the effective date
of the Employment Termination. If the Company exercises its Right of Repurchase,
within ninety (90) days of the effective date of the Participant's Employment
Termination (or, in the case of Common Stock issued upon exercise of the Stock
Option after the effective date of the Participant's Employment Termination,
within ninety (90) days after the date of exercise), the Participant, or his or
her successor or legal representative, or if applicable, the escrow agent, shall
deliver to the Company every stock certificate representing the shares being
repurchased, together with appropriate assignments separate from certificates,
and the Company shall then promptly pay the total
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Repurchase Price in cash to the Participant, or if applicable, to the escrow
agent, for delivery to the Participant.
14.4 Escrow. To facilitate the consummation of the Company's Right
of Repurchase under this Section 14, at the request of the Committee, the
Participant and the Company shall execute joint escrow instructions and the
Participant shall deliver and deposit with the escrow agent named in the joint
escrow instructions two "Assignments Separate from Certificate", together with
all certificates evidencing the shares of Common Stock issued to the Participant
pursuant to the Plan, duly endorsed in blank. The escrow agent shall hold such
documents and deliver the same to the Company pursuant to the joint escrow
instructions and in accordance with the terms of this Section 14, as applicable.
14.5 Binding Effect. The Company's Right of Repurchase shall inure
to the benefit of its successors and assigns and shall be binding upon any
representative, executor, administrator, heir, or legatee of the Participant.
14.6 Termination of Right of Repurchase. Notwithstanding any other
provision of this Section 14, in the event that the Common Stock is listed on
any United States securities exchange or traded on any formal over-the-counter
market in general use in the United States at the time the Participant would
otherwise be required to transfer his or her vested shares to the Company at not
less than the Fair Market Value thereof as provided in clause (a)(ii) of Section
14.2 above, the Company shall no longer have the Right of Repurchase with
respect to such vested shares, and the Participant shall have no obligations to
comply with this Section 14 with respect to such vested shares. The Company's
Right of Repurchase at the exercise price of each unvested share issued upon
early exercise of the nonvested portion of a Participant's Stock Option as
provided in clause (a)(i) of Section 14.2 above shall not expire but shall
continue in full force and effect on and after the date the Common Stock becomes
publicly traded.
SECTION 15. RIGHT OF FIRST REFUSAL.
15.1 Right of First Refusal. At the Committee's discretion, shares
issued to a Participant under this Plan may be subject to a requirement that if
the Participant proposes to sell, pledge, or otherwise transfer any such shares
or any interest in such shares, to any person or entity, the Company shall have
a right of first refusal (the "Right of First Refusal") with respect to such
shares. Any Participant desiring to transfer shares subject to the Right of
First Refusal shall give a written notice (the "Transfer Notice") to the Company
describing fully the proposed transfer, including the number of shares proposed
to be transferred, the proposed transfer price, and the name and address of the
proposed transferee. The Transfer Notice shall be signed both by the Participant
and by the proposed transferee and must constitute a binding commitment of both
parties to the transfer of the shares. The Company shall have the right to
purchase all (but not less than all) the shares subject to the Transfer Notice
on the terms of the proposal referred to in the Transfer Notice, subject to any
change in such terms permitted under Section 15.2 hereof, by delivery of a
notice of exercise of the Right of First Refusal within thirty (30) days after
the date the Transfer Notice is received by the Company. The Company's rights
under this Section 15.1 shall be freely assignable, in whole or in part.
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15.2 Transfer of Shares. If the Company fails to exercise the Right
of First Refusal within thirty (30) days after the date on which it receives the
Transfer Notice, the Participant may, not later than six (6) months following
receipt of the Transfer Notice by the Company, consummate a transfer of the
shares subject to the Transfer Notice on the terms and conditions described in
the Transfer Notice, subject to restrictions on the transfer of such shares
imposed pursuant to Section 13. Any proposed transfer on terms and conditions
different from those described in the Transfer Notice, as well as any subsequent
proposed transfer by the Participant, shall again be subject to the Right of
First Refusal and shall again require compliance with the procedure described in
Section 15.1. If the Company exercises its Right of First Refusal, the
Participant shall immediately endorse and deliver to the Company every stock
certificate representing the shares being purchased, and the Company shall then
promptly pay the purchase price in accordance with the terms set forth in the
Transfer Notice.
15.3 Repurchase Payment. The amount payable to a Participant
pursuant to the Company's exercise of the Right of First Refusal shall be paid
to the Participant in accordance with the terms and conditions of the Transfer
Notice or may, at the election of the Company, be paid in full in cash.
15.4 Binding Effect. The Company's Right of First Refusal shall
inure to the benefit of its successors and assigns and shall be binding upon any
transferee of the shares, other than a transferee acquiring shares in a
transaction with respect to which the Company failed to exercise its Right of
First Refusal (a "Free Transferee") or a transferee of a Free Transferee.
15.5 Termination of Right of First Refusal. Notwithstanding any
other provision of this Section 15, if the Common Stock is listed on any United
States securities exchange or traded on any formal over-the-counter market in
general use in the United States at the time the Participant desires to transfer
his or her shares, the Company shall no longer have the Right of First Refusal,
and the Participant shall have no obligation to comply with this Section 15.
SECTION 16. SINGLE OR MULTIPLE AGREEMENTS. Multiple forms of awards
or combinations thereof may be evidenced by a single agreement or multiple
agreements, as determined by the Committee.
SECTION 17. RIGHTS OF A STOCKHOLDER. The recipient of any award under
the Plan, unless otherwise provided by the Plan, shall have no rights as a
stockholder with respect thereto unless and until certificates for shares of
Common Stock are issued to him.
SECTION 18. NO RIGHT TO CONTINUE EMPLOYMENT OR SERVICE. Nothing in
the Plan or any instrument executed or award granted pursuant thereto shall
confer upon any Participant any right to continue to serve the Company or any
Subsidiary in the capacity in effect at the time the award was granted or shall
affect the right of the Company or any Subsidiary to terminate (i) the
employment of an employee with or without notice and with or without cause, (ii)
the service of a consultant or adviser pursuant to the terms of such
consultant's or adviser's agreement with the Company or any Subsidiary or (iii)
the service of a director pursuant to the Bylaws of the Company or any
Subsidiary and any applicable provisions of the corporate law of the state in
which the Company or any Subsidiary is incorporated, as the case may be.
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SECTION 19. WITHHOLDING. The Company's obligation to (i) deliver
shares of Common Stock or pay cash upon the exercise of any Non-Qualified Stock
Option or any Stock Appreciation Right granted under the Plan, (ii) deliver
shares of Common Stock or pay cash in payment of any Performance Unit Award,
(iii) deliver stock certificates upon the vesting of any award of Restricted
Stock Award, and (iv) deliver shares of Common Stock upon the grant of any Stock
Bonus Award shall be subject to the minimum statutory withholding requirements
under applicable foreign, federal, state and local law. Foreign, federal, state
and local withholding tax due under the terms of the Plan may be paid in cash or
shares of Common Stock (either through the surrender of previously held shares
of Common Stock or the withholding of shares of Common Stock otherwise issuable
upon the exercise or payment of such award) having a Fair Market Value equal to
the required withholding and upon such other terms and conditions as the
Committee shall determine; provided, however, the Committee, in its sole
discretion, may require that such taxes be paid in cash; and provided, further,
any election by a Participant subject to Section 16(b) of the Exchange Act to
pay his withholding tax in shares of Common Stock shall be subject to and must
comply with Rule 16b-3(e) of the Exchange Act.
SECTION 20. INDEMNIFICATION. No member of the Board or the Committee,
nor any officer or employee of the Company or a Subsidiary acting on behalf of
the Board or the Committee, shall be personally liable for any action,
determination or interpretation taken or made in good faith with respect to the
Plan, and all members of the Board or the Committee and each and any officer or
employee of the Company or any Subsidiary acting on their behalf shall, to the
extent permitted by law, be fully indemnified and protected by the Company in
respect of any such action, determination or interpretation.
SECTION 21. NON-ASSIGNABILITY. No award under the Plan shall be
assignable or transferable by the recipient thereof except by will, by the laws
of descent and distribution and by such other means as the Committee may approve
from time to time. However, the Participant, with the approval of the Committee,
may transfer a Stock Option (other than an Incentive Stock Option) for no
consideration to or for the benefit of the Participant's Immediate Family
(including without limitation, to a trust for the benefit of a Participant's
Immediate Family or to a partnership or limited liability company for one or
more members of the Participant's Immediate Family), subject to such limits as
the Committee may establish, and the transferee shall remain subject to all the
terms and conditions applicable to the Stock Option prior to such transfer. The
foregoing right to transfer the Stock Option shall apply to the right to consent
to amendments to Plan and, in the discretion of the Committee, shall also apply
the right to transfer ancillary rights associated with the Stock Option.
SECTION 22. NONUNIFORM DETERMINATIONS. The Committee's determinations
under the Plan (including without limitation determinations of the persons to
receive awards, the form, amount and timing of such awards, the terms and
provisions of such awards and the agreements evidencing same, and the
establishment of values and performance targets) need not be uniform and may be
made by it selectively among persons who receive, or are eligible to receive,
awards under the Plan, whether or not such persons are similarly situated.
SECTION 23. ADJUSTMENTS. In the event of any change in the
outstanding shares of Common Stock, without the receipt of consideration by the
Company, by reason of a stock dividend, stock split, reverse stock split or
distribution, recapitalization, merger, reorganization,
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reclassification, consolidation, split-up, spin-off, combination of shares,
exchange of shares or other change in corporate structure affecting the Common
Stock and not involving the receipt of consideration by the Company, the
Committee shall make appropriate adjustments in (a) the aggregate number of
shares of Common Stock (i) reserved for issuance under the Plan, (ii) for which
grants or awards may be made to any Participant and (iii) covered by outstanding
awards and grants denominated in shares or units of Common Stock, (b) the
exercise or other applicable price related to outstanding awards or grants and
(c) the appropriate Fair Market Value and other price determinations relevant to
outstanding awards or grants and shall make such other adjustments as may be
appropriate under the circumstances; provided, that the number of shares subject
to any award or grant always shall be a whole number.
SECTION 24. TERMINATION AND AMENDMENT. The Board may terminate or
amend the Plan or any portion thereof at any time, including but not limited to
amendments to the Plan necessary to comply with the requirements of Section
16(b) of the Exchange Act or to correct any defect or supply an omission or
reconcile any inconsistency in the Plan or any award granted hereunder, without
approval of the shareholders of the Company, unless shareholder approval is
required by Rule 16b-3 of the Exchange Act, applicable stock exchange or NASDAQ
or other quotation system rules, or applicable Code provisions. No amendment,
termination or modification of the Plan shall affect any award theretofore
granted in any material adverse way without the consent of the recipient.
SECTION 25. SEVERABILITY. With respect to Participants subject to
Section 16 of the Exchange Act, (i) the Plan is intended to comply with all
applicable conditions of Rule 16b-3 or its successors, (ii) all transactions
involving Participants who are subject to Section 16(b) of the Exchange Act are
subject to such conditions, regardless of whether the conditions are expressly
set forth in the Plan, and (iii) any provision of the Plan that is contrary to a
condition of Rule 16b-3 shall not apply to Participants who are subject to
Section 16(b) of the Exchange Act. If any of the terms or provisions of this
Plan, or awards made under this Plan, conflict with the requirements of Section
162(m) or Section 422 of the Code with respect to awards subject to or governed
by Section 162(m) or Section 422 of the Code, then such terms or provisions
shall be deemed inoperative to the extent they so conflict with the requirements
of Section 162(m) or Section 422 of the Code. With respect to an Incentive Stock
Option, if this Plan does not contain any provision required to be included
herein under Section 422 of the Code (as the same shall be amended from time to
time), such provision shall be deemed to be incorporated herein with the same
force and effect as if such provision had been set out herein.
SECTION 26. EFFECT ON OTHER PLANS. Participation in this Plan shall
not affect an employee's eligibility to participate in any other benefit or
incentive plan of the Company or any Subsidiary and any awards made pursuant to
this Plan shall not be used in determining the benefits provided under any other
plan of the Company or any Subsidiary unless specifically provided.
SECTION 27. EFFECTIVE DATE OF THE PLAN. The Plan shall become
effective as determined by the Board, but no Stock Option shall be exercised and
no other awards shall be granted unless and until the Plan has been approved by
the shareholders of the Company, which approval shall be within twelve (12)
months before or after the date the Plan is adopted by the Board.
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SECTION 28. GOVERNING LAW. This Plan and all agreements executed in
connection with the Plan shall be governed by, and construed in accordance with,
the laws of the State of Delaware, without regard to its conflicts of law
doctrine.
SECTION 29. GENDER AND NUMBER. Words denoting the masculine gender
shall include the feminine gender, and words denoting the feminine gender shall
include the masculine gender. Words in the plural shall include the singular,
and the singular shall include the plural.
SECTION 30. ACCELERATION OF EXERCISABILITY AND VESTING. The Committee
shall have the power to accelerate the time at which an award may first be
exercised or the time during which an award or any part thereof will vest in
accordance with the Plan, notwithstanding the provisions in the award stating
the time at which it may first be exercised or the time during which it will
vest.
SECTION 31. MODIFICATION OF AWARDS. Within the limitations of the
Plan and subject to Section 23, the Committee may modify outstanding awards or
accept the cancellation of outstanding awards for the granting of new awards in
substitution therefor. Notwithstanding the preceding sentence, except for any
adjustment described in Section 23, no modification of an award shall, without
the consent of the Participant, alter or impair any rights or obligations under
any award previously granted under the Plan in any material adverse way without
the affected Participant's consent.
SECTION 32. NO STRICT CONSTRUCTION. No rule of strict construction
shall be applied against the Company, the Committee, or any other person in the
interpretation of any of the terms of the Plan, any agreement executed in
connection with the Plan, any award granted under the Plan, or any rule,
regulation or procedure established by the Committee.
SECTION 33. SUCCESSORS. This Plan is binding on and will inure to the
benefit of any successor to the Company, whether by way of merger,
consolidation, purchase, or otherwise.
SECTION 34. PLAN PROVISIONS CONTROL. The terms of the Plan govern all
awards granted under the Plan, and in no event will the Committee have the power
to grant any award under the Plan which is contrary to any of the provisions of
the Plan. In the event any provision of any award granted under the Plan shall
conflict with any term in the Plan as constituted on the grant date of such
award, the term in the Plan as constituted on the grant date of such award shall
control.
SECTION 35. HEADINGS. The headings used in the Plan are for
convenience only, do not constitute a part of the Plan, and shall not be deemed
to limit, characterize, or affect in any way any provisions of the Plan, and all
provisions of the Plan shall be construed as if no captions had been used in the
Plan.
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