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EXHIBIT 10.7
NEW ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED
2000 STOCK INCENTIVE PLAN
SECTION 1. PURPOSE
The purpose of the New ICO Global Communications (Holdings) Limited 2000
Stock Incentive Plan (the "Plan") is to enhance the long-term stockholder value
of New ICO Global Communications (Holdings) Limited, a Delaware corporation (the
"Company"), by offering opportunities to selected persons to participate in the
Company's growth and success, and to encourage them to remain in the service of
the Company and its Related Corporations (as defined in Section 2) and to
acquire and maintain stock ownership in the Company.
SECTION 2. DEFINITIONS
For purposes of the Plan, the following terms shall be defined as set
forth below:
"ACQUIRED ENTITY" has the meaning set forth in Section 6.3.
"ACQUISITION TRANSACTION" has the meaning set forth in Section 6.3.
"AWARD" means an award or grant made pursuant to the Plan, including
awards or grants of Stock Options, Awards, or any combination of the foregoing.
"BOARD" means the Board of Directors of the Company.
"CAUSE" means dismissal for willful material misconduct or failure to
discharge duties, conviction or confession of a crime punishable by law (except
minor violations), the performance of an illegal act while purporting to act in
the Company's behalf, or engaging in activities directly in competition or
antithetical to the best interests of the Company, such as dishonesty, fraud,
unauthorized use or disclosure of confidential information or trade secrets, in
each case as determined by the Plan Administrator, and its determination shall
be conclusive and binding.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COMMON STOCK" means the Class A common stock, par value $.01 per share,
of the Company.
"CORPORATE TRANSACTION" means any of the following events:
(a) Consummation of any merger or consolidation of the Company with or
into another corporation, including a COM Affiliate;
(b) Consummation of any sale, lease, exchange or other transfer in one
transaction or a series of related transactions of all or substantially all the
Company's outstanding securities or substantially all the Company's assets other
than a transfer of the Company's assets to a majority-owned subsidiary
corporation (as defined in Section 8.3) of the Company or a COM Affiliate; or
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(c) After the initial registration of the Common Stock under Section
12(b) or 12(g) of the Exchange Act, any acquisition by a person, other than
Craig O. McCaw or a COM Affiliate, within the meaning of Section 3(a)(9) or of
Section 13(d)(3) (as in effect on the date of adoption of the Plan) of the
Exchange Act of a majority or more of the Company's outstanding voting
securities (whether directly or indirectly, beneficially or of record).
Ownership of voting securities shall take into account and shall include
ownership as determined by applying Rule 13d-3(d)(1)(i) (as in effect on the
date of adoption of the Plan) under the Exchange Act.
For purposes of this definition, a "COM Affiliate" shall mean any entity
which Craig O. McCaw or Eagle River Investments LLC ("Eagle River") controls
directly or indirectly through one or more intermediaries. For purposes of this
definition, an entity shall be deemed to be controlled by Craig O. McCaw or
Eagle River if (and only for so long as) (x) Craig O. McCaw or Eagle River has
the right to vote by ownership, proxy or otherwise securities constituting 5% or
more of the voting power of such entity if such entity has equity securities
registered and files reports under the Exchange Act, as amended, or otherwise
owns securities constituting 50% or more of the voting power of such entity (if
not reporting); (y) Craig O. McCaw or Eagle River possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such entity, whether through the ownership of voting securities, by
contract or otherwise; or (z) with respect to a charitable trust, foundation or
nonprofit corporation, Craig O. McCaw or Eagle River is the sole trustee or
director or has the power to appoint a majority of the trustees or directors
thereof. Notwithstanding the foregoing, the following shall be deemed COM
Affiliates: New Satco Holdings, Inc., Teledesic Corporation, Teledesic LLC,
Teledesic Holdings Limited, Nextel Communications, Inc. and NEXTLINK
Communications, Inc.
"DISABILITY," unless otherwise defined by the Plan Administrator, means
a mental or physical impairment of the Participant that is expected to result in
death or that has lasted or is expected to last for a continuous period of 12
months or more and that causes the Participant to be unable, in the opinion of
the Plan Administrator, to perform his or her duties for the Company or a
Related Corporation and to be engaged in any substantial gainful activity.
"EARLY RETIREMENT" means termination of service prior to Retirement on
terms and conditions approved by the Plan Administrator.
"EFFECTIVE DATE" has the meaning set forth in Section 17.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FAIR MARKET VALUE" shall be as established in good faith by the Plan
Administrator or (a) if the Common Stock is listed on the Nasdaq National
Market, the closing sales price for the Common Stock as reported by the Nasdaq
National Market for a single trading day or (b) if the Common Stock is listed on
the New York Stock Exchange or the American Stock Exchange, the closing sales
price for the Common Stock as such price is officially quoted in the composite
tape of transactions on such exchange for a single trading day. If there is no
such reported price for the Common Stock for the date in question, then such
price on the last preceding date for which such price exists shall be
determinative of Fair Market Value.
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"GRANT DATE" means the date on which the Plan Administrator completes
the corporate action relating to the grant of an Award and all conditions
precedent to the grant have been satisfied, provided that conditions to the
exercisability or vesting of Awards shall not defer the Grant Date.
"INCENTIVE STOCK OPTION" means an Option to purchase Common Stock
granted under Section 7 with the intention that it qualify as an "incentive
stock option" as that term is defined in Section 422 of the Code.
"NONQUALIFIED STOCK OPTION" means an Option to purchase Common Stock
granted under Section 7 other than an Incentive Stock Option.
"OPTION" means the right to purchase Common Stock granted under Section
7.
"OPTION TERM" has the meaning set forth in Section 7.3.
"PARTICIPANT" means (a) the person to whom an Award is granted; (b) for
a Participant who has died, the personal representative of the Participant's
estate, the person(s) to whom the Participant's rights under the Award have
passed by will or by the applicable laws of descent and distribution, or the
beneficiary designated in accordance with Section 11; or (c) the person(s) to
whom an Award has been transferred in accordance with Section 11.
"PLAN ADMINISTRATOR" means the Board or any committee or committees
designated by the Board to administer the Plan under Section 3.1.
"RELATED CORPORATION" means any entity that, directly or indirectly, is
in control of, or is controlled by, or under common control with the Company.
"RETIREMENT" means retirement on or after an individual's normal
retirement date under the Company's 401(k) plan or other similar successor plan
applicable to salaried employees, unless otherwise defined by the Plan
Administrator from time to time for purposes of the Plan.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"STOCK AWARD" means an Award of shares of Common Stock or units
denominated in Common Stock granted under Section 9, the rights of ownership of
which may be subject to restrictions prescribed by the Plan Administrator.
"SUCCESSOR CORPORATION" has the meaning set forth in Section 12.3.
"TERMINATION DATE" has the meaning set forth in Section 7.6.
SECTION 3. ADMINISTRATION
3.1 PLAN ADMINISTRATOR
The Plan shall be administered by the Board and/or a committee or
committees (which term includes subcommittees) appointed by, and consisting of
two or more members of, the
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Board (a "Plan Administrator"). If and so long as the Common Stock is registered
under Section 12(b) or 12(g) of the Exchange Act, the Board shall consider in
selecting the members of any committee acting as Plan Administrator, with
respect to any persons subject or likely to become subject to Section 16 of the
Exchange Act, the provisions regarding (a) "outside directors" as contemplated
by Section 162(m) of the Code and (b) "nonemployee directors" as contemplated by
Rule 16b-3 under the Exchange Act. Notwithstanding the foregoing, the Board may
delegate the responsibility for administering the Plan with respect to
designated classes of eligible persons to different committees consisting of one
or more members of the Board, subject to such limitations as the Board deems
appropriate. Committee members shall serve for such term as the Board may
determine, subject to removal by the Board at any time.
3.2 ADMINISTRATION AND INTERPRETATION BY PLAN ADMINISTRATOR
Except for the terms and conditions explicitly set forth in the Plan,
the Plan Administrator shall have exclusive authority, in its discretion, to
determine all matters relating to Awards under the Plan, including the selection
of individuals to be granted Awards, the type of Awards, the number of shares of
Common Stock subject to an Award, all terms, conditions, restrictions and
limitations, if any, of an Award and the terms of any instrument that evidences
the Award. The Plan Administrator shall also have exclusive authority to
interpret the Plan and the terms of any instrument evidencing the Award and may
from time to time adopt and change rules and regulations of general application
for the Plan's administration. The Plan Administrator's interpretation of the
Plan and its rules and regulations, and all actions taken and determinations
made by the Plan Administrator pursuant to the Plan, shall be conclusive and
binding on all parties involved or affected. The Plan Administrator may delegate
administrative duties to such of the Company's officers as it so determines.
SECTION 4. STOCK SUBJECT TO THE PLAN
4.1 AUTHORIZED NUMBER OF SHARES
Subject to adjustment from time to time as provided in Section 12.1, a
maximum of 13,000,000 1 shares of Common Stock shall be available for issuance
under the Plan.
Shares issued under the Plan shall be drawn from authorized and unissued
shares or shares now held or subsequently acquired by the Company as treasury
shares.
4.2 REUSE OF SHARES
Any shares of Common Stock that have been made subject to an Award that
cease to be subject to the Award (other than by reason of exercise or settlement
of the Award to the extent it is exercised for or settled in vested and
nonforfeitable shares) shall again be available for issuance in connection with
future grants of Awards under the Plan. In the event shares issued under the
Plan are reacquired by the Company pursuant to any forfeiture or provision,
right of
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(1) Reflects 2-for-one stock dividend effective July 24, 2000.
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repurchase or right of first refusal, such shares shall again be available for
the purposes of the Plan; provided, that the aggregate number of shares that may
be issued upon the exercise of Incentive Stock Options shall in no event exceed
13,000,000, subject to adjustment from time to time as provided in Section 12.1.
SECTION 5. ELIGIBILITY
Awards may be granted under the Plan to those officers, directors and
employees of the Company and its Related Corporations as the Plan Administrator
from time to time selects. Awards may also be granted to consultants, agents,
advisors and independent contractors who provide services to the Company and its
Related Corporations; provided, however, that such Participants (i) are natural
persons or an alter-ego entity; (ii) render bona fide services that are not in
connection with the offer and sale of the Company's securities in a
capital-raising transaction; and (iii) render bona fide services that do not
directly or indirectly promote or maintain a market for the Company's
securities.
SECTION 6. AWARDS
6.1 FORM AND GRANT OF AWARDS
The Plan Administrator shall have the authority, in its sole discretion,
to determine the type or types of Awards to be made under the Plan. Such Awards
may include, but are not limited to, Incentive Stock Options, Nonqualified Stock
Options and Stock Awards. Awards may be granted singly or in combination.
6.2 SETTLEMENT OF AWARDS
The Company may settle Awards through the delivery of shares of Common
Stock, the granting of replacement Awards or any combination thereof as the Plan
Administrator shall determine. Any Award settlement, including payment
deferrals, may be subject to such conditions, restrictions and contingencies as
the Plan Administrator shall determine. The Plan Administrator may permit or
require the deferral of any Award payment, subject to such rules and procedures
as it may establish, which may include provisions for the payment or crediting
of interest, or dividend equivalents, including converting such credits into
deferred stock equivalents.
6.3 ACQUIRED COMPANY AWARDS
Notwithstanding anything in the Plan to the contrary, the Plan
Administrator may grant Awards under the Plan in substitution for awards issued
under other plans, or assume under the Plan awards issued under other plans, if
the other plans are or were plans of other acquired entities ("Acquired
Entities") (or the parent or subsidiary of the Acquired Entity) and the new
Award is substituted, or the old award is assumed, by reason of a merger,
consolidation, acquisition of property or stock, reorganization or liquidation
(the "Acquisition Transaction"). If a written agreement pursuant to which the
Acquisition Transaction is completed is approved by the Board and that agreement
sets forth the terms and conditions of the substitution for or assumption of
outstanding awards of the Acquired Entity, those terms and conditions shall be
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deemed to be the action of the Plan Administrator without any further action by
the Plan Administrator, except as may be required for compliance with Rule 16b-3
under the Exchange Act, and the persons holding such awards shall be deemed to
be Participants.
SECTION 7. AWARDS OF OPTIONS
7.1 GRANT OF OPTIONS
The Plan Administrator is authorized under the Plan, in its sole
discretion, to issue Options as Incentive Stock Options or as Nonqualified Stock
Options, which shall be appropriately designated.
7.2 OPTION EXERCISE PRICE
The exercise price for shares purchased under an Option shall be as
determined by the Plan Administrator, but shall not be less than 100% of the
Fair Market Value of the Common Stock on the Grant Date with respect to
Incentive Stock Options. For Incentive Stock Options granted to a more than 10%
stockholder, the Option exercise price shall be as specified in Section 8.2.
7.3 TERM OF OPTIONS
The term of each Option (the "Option Term") shall be as established by
the Plan Administrator or, if not so established, shall be ten years from the
Grant Date. For Incentive Stock Options, the Option Term shall be as specified
in Sections 8.2 and 8.4.
7.4 EXERCISE OF OPTIONS
The Plan Administrator shall establish and set forth in each instrument
that evidences an Option the time at which, or the installments in which, the
Option shall vest and become exercisable, which provisions may be waived or
modified by the Plan Administrator at any time. If not so established in the
instrument evidencing the Option, the Option shall vest and become exercisable
according to the following schedule, which may be waived or modified by the Plan
Administrator at any time:
<TABLE>
<CAPTION>
PERIOD OF PARTICIPANT'S CONTINUOUS
EMPLOYMENT OR SERVICE WITH THE COMPANY
OR ITS RELATED CORPORATIONS FROM THE PORTION OF TOTAL OPTION
OPTION GRANT DATE THAT IS VESTED AND EXERCISABLE
<S> <C>
After 1 year 1/4th
Each additional one-month period of An additional 1/48th
continuous service completed thereafter
After 4 years 100%
</TABLE>
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To the extent that an Option has vested and become exercisable, the
Option may be exercised from time to time by delivery to the Company of a
written stock option exercise agreement or notice, in a form and in accordance
with procedures established by the Plan Administrator, setting forth the number
of shares with respect to which the Option is being exercised, the restrictions
imposed on the shares purchased under such exercise agreement, if any, and such
representations and agreements as may be required by the Plan Administrator,
accompanied by payment in full as described in Section 7.5. The Plan
Administrator may prescribe, in lieu of or in addition to written agreements,
notices and forms, electronic or telephonic methods or procedures for Option
exercises. An Option may be exercised only for whole shares and may not be
exercised for less than a reasonable number of shares at any one time, as
determined by the Plan Administrator.
7.5 PAYMENT OF EXERCISE PRICE
The exercise price for shares purchased under an Option shall be paid in
full to the Company by delivery of consideration equal to the product of the
Option exercise price and the number of shares purchased. Such consideration
must be paid in cash or by check or, unless the Plan Administrator in its sole
discretion determines otherwise, either at the time the Option is granted or at
any time before it is exercised, in any combination of
(a) cash or check;
(b) tendering (either actually or, if and so long as the Common Stock is
registered under Section 12(b) or 12(g) of the Exchange Act, by attestation)
shares of Common Stock already owned by the Participant for at least six months
(or any shorter period necessary to avoid a charge to the Company's earnings for
financial reporting purposes) having a Fair Market Value on the day prior to the
exercise date equal to the aggregate Option exercise price;
(c) if and so long as the Common Stock is registered under Section 12(b)
or 12(g) of the Exchange Act, delivery of a properly executed exercise notice,
together with irrevocable instructions, to (i) a brokerage firm designated by
the Company to deliver promptly to the Company the aggregate amount of sale or
loan proceeds to pay the Option exercise price and any withholding tax
obligations that may arise in connection with the exercise and (ii) the Company
to deliver the certificates for such purchased shares directly to such brokerage
firm, all in accordance with the regulations of the Federal Reserve Board; or
(d) such other consideration as the Plan Administrator may permit.
In addition, to assist a Participant (including a Participant who is an
officer or a director of the Company) in acquiring shares of Common Stock
pursuant to an Award granted under the Plan, the Plan Administrator, in its sole
discretion, may authorize, either at the Grant Date or at any time before the
acquisition of Common Stock pursuant to the Award, (i) the payment by a
Participant of a full-recourse promissory note, (ii) the payment by the
Participant of the purchase price, if any, of the Common Stock in installments,
or (iii) the guarantee by the Company of a full-recourse loan obtained by the
Participant from a third party. Subject to the foregoing, the Plan Administrator
shall in its sole discretion specify the terms of any loans, installment
payments or loan guarantees, including the interest rate and terms of and
security for repayment.
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7.6 POST-TERMINATION EXERCISES
The Plan Administrator shall establish and set forth in each instrument
that evidences an Option whether the Option shall continue to be exercisable,
and the terms and conditions of such exercise, if a Participant ceases to be
employed by, or to provide services to, the Company or its Related Corporations,
which provisions may be waived or modified by the Plan Administrator at any
time. If not so established in the instrument evidencing the Option, the Option
shall be exercisable according to the following terms and conditions, which may
be waived or modified by the Plan Administrator at any time:
(a) Any portion of an Option that is not vested and exercisable on the
date of termination of the Participant's employment or service relationship (the
"Termination Date") shall expire on such date.
(b) Any portion of an Option that is vested and exercisable on the
Termination Date shall expire upon the earliest to occur of
(i) if the Participant's Termination Date occurs for reasons other
than Cause, death, Disability, Early Retirement or Retirement, the three-month
anniversary of such Termination Date;
(ii) if the Participant's Termination Date occurs by reason of
Retirement or Early Retirement, the one-year anniversary of such Termination
Date;
(iii) if the Participant's Termination Date occurs by reason of
Disability or death, the one-year anniversary of such Termination Date; and
(iv) the last day of the Option Term.
Notwithstanding the foregoing, if the Participant dies after the
Termination Date while the Option is otherwise exercisable, the portion of the
Option that is vested and exercisable on such Termination Date shall expire upon
the earlier to occur of (y) the last day of the Option Term and (z) the first
anniversary of the date of death, unless the Plan Administrator determines
otherwise.
Also notwithstanding the foregoing, in case of termination of the
Participant's employment or service relationship for Cause, the Option shall
automatically expire at the time the Company first notifies the Participant of
such termination, unless the Plan Administrator determines otherwise. If a
Participant's employment or service relationship with the Company is suspended
pending an investigation of whether the Participant shall be terminated for
Cause, all the Participant's rights under any Option likewise shall be suspended
during the period of investigation, unless the Plan Administrator determines
otherwise. If any facts that would constitute Cause for termination or removal
of a Participant are discovered after the Participant's relationship with the
Company or its Related Corporation has ended, any Option then held by the
Participant may be immediately terminated by the Plan Administrator, in its sole
discretion.
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A Participant's transfer of employment or service relationship between
or among the Company and its Related Corporations, or a change in status from an
employee to a consultant, agent, advisor or independent contractor or a change
in status from a consultant, agent, advisor or independent contractor to an
employee, shall not be considered a termination of employment or service
relationship for purposes of this Section 7. The effect of a Company-approved
leave of absence on the terms and conditions of an Option shall be determined by
the Plan Administrator, in its sole discretion.
SECTION 8. INCENTIVE STOCK OPTION LIMITATIONS
To the extent required by Section 422 of the Code, Incentive Stock
Options shall be subject to the following additional terms and conditions:
8.1 DOLLAR LIMITATION
To the extent the aggregate Fair Market Value (determined as of the
Grant Date) of Common Stock with respect to which Incentive Stock Options are
exercisable for the first time during any calendar year (under the Plan and all
other stock option plans of the Company) exceeds $100,000, such portion in
excess of $100,000 shall be treated as a Nonqualified Stock Option. In the event
the Participant holds two or more such Options that become exercisable for the
first time in the same calendar year, such limitation shall be applied on the
basis of the order in which such Options are granted.
8.2 MORE THAN 10% STOCKHOLDERS
If an individual owns more than 10% of the total combined voting power
of all classes of the stock of the Company or of its parent or subsidiary
corporations, then the exercise price per share of an Incentive Stock Option
granted to such individual shall not be less than 110% of the Fair Market Value
of the Common Stock on the Grant Date and the Option Term shall not exceed five
years. The determination of more than 10% ownership shall be made in accordance
with Section 422 of the Code.
8.3 ELIGIBLE EMPLOYEES
Individuals who are not employees of the Company or one of its parent
corporations or subsidiary corporations may not be granted Incentive Stock
Options.
8.4 TERM
Subject to Section 8.2, the Option Term shall not exceed ten years.
8.5 EXERCISABILITY
An Option designated as an Incentive Stock Option shall cease to qualify
for favorable tax treatment as an Incentive Stock Option to the extent it is
exercised (if permitted by the terms
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of the Option) (a) more than three months after the Termination Date for reasons
other than death or Disability, (b) more than one year after the Termination
Date by reason of Disability, or (c) after the Participant has been on leave of
absence for more than 90 days, unless the Participant's reemployment rights are
guaranteed by statute or contract.
8.6 TAXATION OF INCENTIVE STOCK OPTIONS
In order to obtain certain tax benefits afforded to Incentive Stock
Options under Section 422 of the Code, the Participant must hold the shares
issued upon the exercise of an Incentive Stock Option for two years after the
Grant Date and one year from the date of exercise. A Participant may be subject
to the alternative minimum tax at the time of exercise of an Incentive Stock
Option. The Participant shall give the Company prompt notice of any disposition
of shares acquired by the exercise of an Incentive Stock Option prior to the
expiration of such holding periods.
8.7 STOCKHOLDER APPROVAL
If the stockholders of the Company do not approve the Plan within 12
months after the Board of Director's adoption of the Plan, any Incentive Stock
Options will become Nonqualified Stock Options.
8.8 CODE DEFINITIONS
For purposes of this Section 8, "parent corporation," "subsidiary
corporation" and "Disability" shall have the meanings attributed to those terms
for purposes of Section 422 of the Code.
SECTION 9. STOCK AWARDS
9.1 GRANT OF STOCK AWARDS
The Plan Administrator is authorized to make Awards of Common Stock or
Awards denominated in units of Common Stock on such terms and conditions and
subject to such restrictions, if any (which may be based on continuous service
with the Company or the achievement of performance goals), as the Plan
Administrator shall determine, in its sole discretion, which terms, conditions
and restrictions shall be set forth in the instrument evidencing the Award. The
terms, conditions and restrictions that the Plan Administrator shall have the
power to determine shall include, without limitation, the manner in which shares
subject to Stock Awards are held during the periods they are subject to
restrictions and the circumstances under which forfeiture of the Stock Award
shall occur by reason of termination of the Participant's employment or service
relationship.
9.2 ISSUANCE OF SHARES
Upon the satisfaction of any terms, conditions and restrictions
prescribed in respect to a Stock Award, or upon the Participant's release from
any terms, conditions and restrictions of a Stock Award, as determined by the
Plan Administrator, the Company shall release, as soon as
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practicable, to the Participant or, in the case of the Participant's death, to
the personal representative of the Participant's estate or as the appropriate
court directs, the appropriate number of shares of Common Stock.
9.3 WAIVER OF RESTRICTIONS
Notwithstanding any other provisions of the Plan, the Plan Administrator
may, in its sole discretion, waive the forfeiture period and any other terms,
conditions or restrictions on any Stock Award under such circumstances and
subject to such terms and conditions as the Plan Administrator shall deem
appropriate.
SECTION 10. WITHHOLDING
The Company may require the Participant to pay to the Company the amount
of any withholding taxes that the Company is required to withhold with respect
to the grant, vesting or exercise of any Award. Subject to the Plan and
applicable law, the Plan Administrator may, in its sole discretion, permit the
Participant to satisfy withholding obligations, in whole or in part, (a) by
paying cash, (b) by electing to have the Company withhold shares of Common Stock
(up to the employer's minimum required tax withholding rate) or (c) by
transferring to the Company shares of Common Stock (already owned by the
Participant for the period necessary to avoid a charge to the Company's earnings
for financial reporting purposes), in such amounts as are equivalent to the Fair
Market Value of the withholding obligation. The Company shall have the right to
withhold from any Award or any shares of Common Stock issuable pursuant to an
Award or from any cash amounts otherwise due or to become due from the Company
to the Participant an amount equal to such taxes (up to the employer's minimum
required tax withholding rate). The Company may also deduct from any Award any
other amounts due from the Participant to the Company or a Related Corporation.
SECTION 11. ASSIGNABILITY
Awards granted under the Plan and any interest therein may not be
assigned, pledged or transferred by the Participant and may not be made subject
to attachment or similar proceedings otherwise than by will or by the applicable
laws of descent and distribution, and, during the Participant's lifetime, such
Awards may be exercised only by the Participant. Notwithstanding the foregoing,
and to the extent permitted by Section 422 of the Code with respect to incentive
stock options, the Plan Administrator, in its sole discretion, may permit such
assignment, transfer and exercisability and may permit a Participant to
designate a beneficiary who may exercise the Award or receive payment under the
Award after the Participant's death; provided, however, that any Award so
assigned or transferred shall be subject to all the same terms and conditions
contained in the instrument evidencing the Award.
SECTION 12. ADJUSTMENTS
12.1 ADJUSTMENT OF SHARES
In the event that, at any time or from time to time, a stock dividend,
stock split, spin-off, combination or exchange of shares, recapitalization,
merger, consolidation, distribution to
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stockholders other than a normal cash dividend, or other change in the Company's
corporate or capital structure results in (a) the outstanding shares, or any
securities exchanged therefor or received in their place, being exchanged for a
different number or kind of securities of the Company or of any other
corporation or (b) new, different or additional securities of the Company or of
any other corporation being received by the holders of shares of Common Stock of
the Company, then the Plan Administrator shall make proportional adjustments in
(i) the maximum number and kind of securities subject to the Plan and issuable
as Incentive Stock Options as set forth in Section 4.1 and (ii) the number and
kind of securities that are subject to any outstanding Award and the per share
price of such securities, without any change in the aggregate price to be paid
therefor. The determination by the Plan Administrator as to the terms of any of
the foregoing adjustments shall be conclusive and binding. Notwithstanding the
foregoing, a dissolution or liquidation of the Company or a Corporate
Transaction shall not be governed by this Section 12.1 but shall be governed by
Sections 12.2 and 12.3, respectively.
12.2 DISSOLUTION OR LIQUIDATION
To the extent not previously exercised or settled, and unless otherwise
determined by the Plan Administrator in its sole discretion, Options and Stock
Awards denominated in units shall terminate immediately prior to the dissolution
or liquidation of the Company. To the extent a forfeiture provision or
repurchase right applicable to an Award has not been waived by the Plan
Administrator, the Award shall be forfeited immediately prior to the
consummation of the dissolution or liquidation.
12.3 CORPORATE TRANSACTION
12.3.1 OPTIONS
(a) In the event of a Corporate Transaction as defined in Section 2
in clause (a) or (b), except as otherwise provided in the instrument evidencing
the Award, each outstanding Option shall be assumed or continued or an
equivalent option or right substituted by the surviving corporation, the
successor corporation or its parent corporation, as applicable (the "Successor
Corporation").
(b) In the event that the Successor Corporation refuses to assume,
continue or substitute for the Option, or in the event of a change in control as
defined in Section 2 in clause (c), the Participant shall fully vest in and have
the right to exercise the Option as to all of the shares of Common Stock subject
thereto, including shares as to which the Option would not otherwise be vested
or exercisable. In such case, the Plan Administrator shall notify the
Participant in writing or electronically that the Option shall be fully vested
and exercisable for a specified time period after the date of such notice, and
the Option shall terminate upon the expiration of such period, in each case
conditioned on the consummation of the Corporate Transaction.
(c) For the purposes of this Section 12.3, the Option shall be
considered assumed, continued or substituted if, following the Corporate
Transaction, the option or right confers the right to purchase or receive, for
each share of Common Stock subject to the Option, immediately prior to the
Corporate Transaction, the consideration (whether stock, cash, or other
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securities or property) received in the Corporate Transaction by holders of
Common Stock for each share held on the effective date of the transaction (and
if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding shares); provided,
however, that if such consideration received in the Corporate Transaction is not
solely common stock of the Successor Corporation, the Plan Administrator may,
with the consent of the Successor Corporation, provide for the consideration to
be received upon the exercise of the Option, for each share of Common Stock
subject thereto, to be solely common stock of the Successor Corporation equal in
fair market value to the per share consideration received by holders of Common
Stock in the Corporate Transaction. The determination of such substantial
equality of value of consideration shall be made by the Plan Administrator and
its determination shall be conclusive and binding.
(d) All Options shall terminate and cease to remain outstanding
immediately following the consummation of the Corporate Transaction, except to
the extent assumed by the Successor Corporation.
12.3.2 STOCK AWARDS
In the event of a Corporate Transaction, except as otherwise provided in
the instrument evidencing the Award, the vesting of shares subject to Stock
Awards shall accelerate, and the forfeiture provisions to which such shares are
subject shall lapse, if and to the same extent that the vesting of outstanding
Options accelerates in connection with the Corporate Transaction. If unvested
Options are to be assumed, continued or substituted by a Successor Corporation
without acceleration upon the occurrence of a Corporate Transaction, the
forfeiture provisions to which such Stock Awards are subject shall continue with
respect to shares of the Successor Corporation that may be issued in exchange
for such shares.
12.4 FURTHER ADJUSTMENT OF AWARDS
Subject to Sections 12.1 and 12.2, the Plan Administrator shall have the
discretion, exercisable at any time before a Corporate Transaction or other
sale, merger, consolidation, reorganization, liquidation or change in control of
the Company, as defined by the Plan Administrator, to take such further action
as it determines to be necessary or advisable, and fair and equitable to the
Participants, with respect to Awards. Such authorized action may include (but
shall not be limited to) establishing, amending or waiving the type, terms,
conditions or duration of, or restrictions on, Awards so as to provide for
earlier, later, extended or additional time for exercise, lifting restrictions
and other modifications, and the Plan Administrator may take such actions with
respect to all Participants, to certain categories of Participants or only to
individual Participants. The Plan Administrator may take such action before or
after granting Awards to which the action relates and before or after any public
announcement with respect to such sale, merger, consolidation, reorganization,
liquidation or change in control that is the reason for such action.
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12.5 LIMITATIONS
The grant of Awards shall in no way affect the Company's right to
adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.
12.6 FRACTIONAL SHARES
In the event of any adjustment in the number of shares covered by any
Award, each such Award shall cover only the number of full shares resulting from
such adjustment.
SECTION 13. REPURCHASE AND FIRST REFUSAL RIGHTS
13.1 REPURCHASE RIGHTS FROM TERMINATED PARTICIPANTS
Until the date on which the initial registration of the Common Stock
under Section 12(b) or 12(g) of the Exchange Act first becomes effective, if a
Participant ceases to be employed by or provide services to the Company, then
all shares of Common Stock issued pursuant to an Award (whether issued before or
after cessation of employment or services) shall be subject to repurchase by the
Company, at the Company's sole discretion, at the Fair Market Value of such
shares on the date of such repurchase. The terms and conditions upon which such
repurchase right shall be exercisable (including the period and procedure for
exercise) shall be established by the Plan Administrator.
13.2 FIRST REFUSAL RIGHTS
Until the date on which the initial registration of the Common Stock
under Section 12(b) or 12(g) of the Exchange Act first becomes effective, the
Company shall have the right of first refusal with respect to any proposed sale
or other disposition by the Participant of any shares of Common Stock issued
pursuant to an Award granted under the Plan. Such right of first refusal shall
be exercisable in accordance with the terms and conditions established by the
Plan Administrator and set forth in the agreement evidencing such right.
13.3 RESTRICTIONS ON RIGHTS
Repurchase or first refusal rights under this Section 13 may not be
exercised earlier than six months and one day following the date the shares were
purchased by the Participant, or such time period necessary to avoid charges to
the Company's earnings for financial reporting purposes.
SECTION 14. MARKET STANDOFF
In connection with any underwritten public offering by the Company of
its equity securities pursuant to an effective registration statement filed
under the Securities Act, including the Company's initial public offering, a
person shall not sell, make any short sale of, loan, hypothecate, pledge, grant
any option for the purchase of, or otherwise dispose of or transfer for value or
otherwise agree to engage in any of the foregoing transactions with respect to
any shares
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<PAGE> 15
issued pursuant to an Award granted under the Plan without the prior written
consent of the Company or its underwriters. Such limitations shall be in effect
for such period of time as may be requested by the Company or such underwriters
and agreed to by the Company's officers and directors with respect to their
shares; provided, however, that in no event shall such period exceed 180 days.
The limitations of this paragraph shall in all events terminate two years after
the effective date of the Company's initial public offering. Holders of shares
issued pursuant to an Award granted under the Plan shall be subject to the
market standoff provisions of this paragraph only if the officers and directors
of the Company are also subject to similar arrangements.
In the event of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
Company's outstanding Common Stock effected as a class without the Company's
receipt of consideration, any new, substituted or additional securities
distributed with respect to the purchased shares shall be immediately subject to
the provisions of this Section 14, to the same extent the purchased shares are
at such time covered by such provisions.
In order to enforce the limitations of this Section 14, the Company may
impose stop-transfer instructions with respect to the purchased shares until the
end of the applicable standoff period.
SECTION 15. AMENDMENT AND TERMINATION OF PLAN
15.1 AMENDMENT OF PLAN
The Plan may be amended only by the Board in such respects as it shall
deem advisable; provided, however, that to the extent required for compliance
with Section 422 of the Code or any applicable law or regulation, stockholder
approval shall be required for any amendment that would (a) increase the total
number of shares available for issuance under the Plan, (b) modify the class of
employees eligible to receive Options, or (c) otherwise require stockholder
approval under any applicable law or regulation. Any amendment made to the Plan
that would constitute a "modification" to Incentive Stock Options outstanding on
the date of such amendment shall not, without the consent of the Participant, be
applicable to such outstanding Incentive Stock Options but shall have
prospective effect only. Notwithstanding the foregoing, any adjustments made
pursuant to Section 12 shall not be subject to these restrictions.
15.2 TERMINATION OF PLAN
The Board may suspend or terminate the Plan at any time. The Plan shall
have no fixed expiration date; provided, however, that no Incentive Stock
Options may be granted more than ten years after the later of (a) the Plan's
adoption by the Board and (b) the adoption by the Board of any amendment to the
Plan that constitutes the adoption of a new plan for purposes of Section 422 of
the Code.
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15.3 CONSENT OF PARTICIPANT
The amendment or termination of the Plan or the amendment of an
outstanding Award shall not, without the Participant's consent, impair or
diminish any rights or obligations under any Award theretofore granted to the
Participant under the Plan. Any change or adjustment to an outstanding Incentive
Stock Option shall not, without the consent of the Participant, be made in a
manner so as to constitute a "modification" that would cause such Incentive
Stock Option to fail to continue to qualify as an Incentive Stock Option.
Notwithstanding the foregoing, any adjustments made pursuant to Section 12 shall
not be subject to these restrictions.
SECTION 16. GENERAL
16.1 EVIDENCE OF AWARDS
Awards granted under the Plan shall be evidenced by a written instrument
that shall contain such terms, conditions, limitations and restrictions as the
Plan Administrator shall deem advisable and that are not inconsistent with the
Plan.
16.2 NO INDIVIDUAL RIGHTS
Nothing in the Plan or any Award granted under the Plan shall be deemed
to constitute an employment contract or confer or be deemed to confer on any
Participant any right to continue in the employ of, or to continue any other
relationship with, the Company or any Related Corporation or limit in any way
the right of the Company or any Related Corporation to terminate a Participant's
employment or other relationship at any time, with or without Cause.
Neither a Participant nor any other person shall, by reason of
participation in the Plan, acquire any right in or title to any assets, funds or
property of the Company or any Related Corporation whatsoever including, without
limitation, any specific funds, assets or other property which the Company or
any Related Corporation, in its or their sole discretion, may set aside in
anticipation of a liability under the Plan. A Participant shall have only a
contractual right to the Common Stock or amounts, if any, payable under the
Plan, unsecured by any assets of the Company or any Related Corporation, and
nothing contained in the Plan shall constitute a representation of guarantee
that the assets of the Company or any Related Corporation shall be sufficient to
pay any benefits to any person.
Nothing in this Plan nor in any agreement evidencing an Award shall
confer upon any eligible employee or Participant any promise or commitment by
the Company or a Related Corporation regarding future positions, future work
assignments, future compensation or any other term or condition or employment or
affiliation.
The Company, in establishing and maintaining this Plan as a voluntary
and unilateral undertaking, expressly disavows the creation of any rights in
eligible employees, Participants or others claiming entitlement under the Plan
or any obligations on the part of the Company, any Related Corporation or the
Plan Administrator, except as expressly provided herein. In particular, no third
party beneficiary rights shall be created under the Plan. Without limiting the
generality of the foregoing, the Company disavows any undertaking to maintain
the tax-qualified
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status of Options designated as Incentive Stock Options or to assure the tax
treatment of any particular award, including the deferral or transfer of any
Award benefits, as may be permitted by the Plan Administrator.
16.3 ISSUANCE OF SHARES
Notwithstanding any other provision of the Plan, the Company shall have
no obligation to issue or deliver any shares of Common Stock under the Plan or
make any other distribution of benefits under the Plan unless such issuance,
delivery or distribution would comply with all applicable laws (including,
without limitation, the requirements of the Securities Act), and the applicable
requirements of any securities exchange or similar entity.
The Company shall be under no obligation to any Participant to register
for offering or resale or to qualify for exemption under the Securities Act, or
to register or qualify under state or foreign securities laws, any shares of
Common Stock, security or interest in a security paid or issued under, or
created by, the Plan, or to continue in effect any such registrations or
qualifications if made. The Company may issue certificates for shares with such
legends and subject to such restrictions on transfer and stop-transfer
instructions as counsel for the Company deems necessary or desirable for
compliance by the Company with federal, state and foreign securities laws.
To the extent that the Plan or any instrument evidencing an Award
provides for issuance of stock certificates to reflect the issuance of shares of
Common Stock, the issuance may be effected on a noncertificated basis, to the
extent not prohibited by applicable law or the applicable rules of any stock
exchange. As a condition to the exercise of an Option or any other receipt of
Common Stock pursuant to an Award under the Plan, the Company may require (i)
the Participant to represent and warrant at the time of any such exercise or
receipt that such shares are being purchased or received only for the
Participant's own account and without any present intention to sell or
distribute such shares and (ii) such other action or agreement by the
Participant as may from time to time be necessary to comply with the foreign,
federal and state securities laws. At the option of the Company, a stop-transfer
order against any such shares may be placed on the official stock books and
records of the Company, and a legend indicating that such shares may not be
pledged, sold or otherwise transferred, unless an opinion of counsel is provided
(concurred in by counsel for the Company) stating that such transfer is not in
violation of any applicable law or regulation, may be stamped on stock
certificates to ensure exemption from registration. The Plan Administrator may
also require the Participant to execute and deliver to the Company a purchase
agreement or such other agreement as may be in use by the Company at such time
that describes certain terms and conditions applicable to the shares.
16.4 NO RIGHTS AS A STOCKHOLDER
No Option or Stock Award denominated in units shall entitle the
Participant to any cash dividend, voting or other right of a stockholder unless
and until the date of issuance under the Plan of the shares that are the subject
of such Award.
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16.5 COMPLIANCE WITH LAWS AND REGULATIONS
Notwithstanding anything in the Plan to the contrary, the Plan
Administrator, in its sole discretion, may bifurcate the Plan so as to restrict,
limit or condition the use of any provision of the Plan to Participants who are
officers or directors subject to Section 16 of the Exchange Act without so
restricting, limiting or conditioning the Plan with respect to other
Participants. Additionally, in interpreting and applying the provisions of the
Plan, any Option granted as an Incentive Stock Option pursuant to the Plan
shall, to the extent permitted by law, be construed as an "incentive stock
option" within the meaning of Section 422 of the Code.
16.6 PARTICIPANTS IN FOREIGN COUNTRIES
The Plan Administrator shall have the authority to adopt such
modifications, procedures and subplans as may be necessary or desirable to
comply with provisions of the laws of foreign countries in which the Company or
its Related Corporations may operate to assure the viability of the benefits
from Awards granted to Participants employed in such countries and to meet the
objectives of the Plan.
16.7 NO TRUST OR FUND
The Plan is intended to constitute an "unfunded" plan. Nothing contained
herein shall require the Company to segregate any monies or other property, or
shares of Common Stock, or to create any trusts, or to make any special deposits
for any immediate or deferred amounts payable to any Participant, and no
Participant shall have any rights that are greater than those of a general
unsecured creditor of the Company.
16.8 SEVERABILITY
If any provision of the Plan or any Award is determined to be invalid,
illegal or unenforceable in any jurisdiction, or as to any person, or would
disqualify the Plan or any Award under any law deemed applicable by the Plan
Administrator, such provision shall be construed or deemed amended to conform to
applicable laws, or, if it cannot be so construed or deemed amended without, in
the Plan Administrator's determination, materially altering the intent of the
Plan or the Award, such provision shall be stricken as to such jurisdiction,
person or Award, and the remainder of the Plan and any such Award shall remain
in full force and effect.
16.9 CHOICE OF LAW
The Plan and all determinations made and actions taken pursuant hereto,
to the extent not otherwise governed by the laws of the United States, shall be
governed by the laws of the State of Washington without giving effect to
principles of conflicts of laws.
SECTION 17. EFFECTIVE DATE
The Effective Date is the date on which the Plan is adopted by the
Board, so long as it is approved by the Company's stockholders at any time
within 12 months of such adoption.
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PLAN ADOPTION AND AMENDMENTS/ADJUSTMENTS
SUMMARY PAGE
<TABLE>
<CAPTION>
SECTION/EFFECT OF DATE OF STOCKHOLDER
DATE OF BOARD ACTION ACTION AMENDMENT APPROVAL
<S> <C> <C> <C>
May 10, 2000 Initial Plan Adoption May 10, 2000
August 9, 2000 Approval of technical changes n/a
</TABLE>
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