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EXHIBIT 10.3
WAVESPLITTER TECHNOLOGIES, INC.
2000 STOCK INCENTIVE PLAN
Section 1. Purpose of Plan.
The name of this plan is the WaveSplitter Technologies, Inc. 2000
Stock Incentive Plan (the "Plan"). The Plan was adopted by the Board (as
hereinafter defined) on September 28, 2000. The purpose of the Plan is to
enable the Company (as hereinafter defined) and its Related Companies (as
hereinafter defined) to attract, retain and reward employees, directors,
advisors and consultants and to strengthen the existing mutuality of interests
between such persons and the Company's stockholders. To accomplish the
foregoing, the Plan provides that the Company may grant Incentive Stock Options,
Nonqualified Stock Options, Restricted Stock, Restricted Stock Units, Dividend
Equivalents and Other Awards (each as hereinafter defined). The Plan is
intended, to the extent applicable, to satisfy the requirements of section
162(m) of the Code (as hereinafter defined) and shall be interpreted in a manner
consistent with the requirements thereof.
Section 2. Definitions.
For purposes of the Plan, the following terms shall be defined as set
forth below:
(a) "Award" means an award of Incentive Stock Options,
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Nonqualified Stock Options, Restricted Stock, Restricted Stock Units, Dividend
Equivalents or Other Awards under the Plan.
(b) "Award Agreement" means, with respect to each Award, the
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written agreement between the Company and the Participant setting forth the
terms and conditions of the Award.
(c) "Board" means the board of directors of the Company.
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(d) "Cause" means, unless otherwise provided in an Award
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Agreement, (1) the willful and continued failure by the Participant to
substantially perform his or her duties and obligations to the Company,
including without limitation repeated refusal to follow the reasonable
directions of the employer or supervisor,
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knowing violation of law in the course of performance of the duties of
Participant's employment or service with the Company, repeated or excessive
absences from work without a reasonable excuse; (2) fraud or material dishonesty
against the Company; or (3) the commission of acts constituting, the indictment
or conviction of, or plea of guilty or nolo contendere for, the commission of a
felony or a crime involving material dishonesty. Determination of Cause shall be
made by the Committee in its sole discretion.
(e) "Change in Capitalization" means any increase, reduction, or
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change or exchange of Shares for a different number or kind of shares or other
securities or property by reason of a reclassification, recapitalization,
merger, consolidation, reorganization, issuance of warrants or rights, stock
dividend, stock split or reverse stock split, combination or exchange of shares,
repurchase of shares, change in corporate structure or otherwise; or any other
corporate action, such as declaration of a special dividend, that affects the
capitalization of the Company.
(f) "Change in Control" means the first to occur of any one of the
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events set forth in the following paragraphs, provided, however, that the first
underwritten initial public offering of Shares of the Company shall not
constitute a Change in Control:
(i) any Person is or becomes the "Beneficial Owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company (not including in the securities
Beneficially Owned by such Person any securities acquired
directly from the Company) representing 35% or more of the
Company's then outstanding securities, excluding any Person who
becomes such a Beneficial Owner in connection with a transaction
described in clause (A) of paragraph (iii) hereof; or
(ii) the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals
who, on the Effective Date (as defined in Section 15), constitute
the Board and any new director (other than a director whose
initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a
consent solicitation, relating to the election of directors of
the Company) whose appointment or election by the Board or
nomination for election by the Company's stockholders was
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approved or recommended by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors on
the Effective Date or whose appointment, election or nomination
for election was previously so approved or recommended; or
(iii) there is consummated a merger or consolidation of the Company
with any other corporation other than (A) a merger or
consolidation which results in the directors of the Company
immediately prior to such merger or consolidation continuing to
constitute at least a majority of the board of directors of the
Company, the surviving entity or any parent thereof, or (B) a
merger or consolidation effected to implement a recapitalization
of the Company (or similar transaction) in which no Person is or
becomes the Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the securities
Beneficially Owned by such Person any securities acquired
directly from the Company) representing 35% or more of the
combined voting power of the Company's then outstanding
securities; or
(iv) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated
an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets, other than a sale or
disposition by the Company of all or substantially all of the
Company's assets to an entity at least a majority of the board of
directors of which comprises individuals who were directors of
the Company immediately prior to such sale or disposition.
(g) "Code" means the Internal Revenue Code of 1986, as amended
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from time to time, or any successor thereto.
(h) "Committee" means the committee established by the Board to
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administer the Plan. Unless otherwise determined by the Board, the composition
of the Committee shall at all times consist solely of persons who are (i)
"Nonemployee Directors" as defined in Rule 16b-3 issued under the Exchange Act,
and (ii) "outside directors" as defined in section 162(m) of the Code.
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(i) "Common Stock" means the common stock, par value $.001 per
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share, of the Company.
(j) "Company" means WaveSplitter Technologies, Inc., a Delaware
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corporation (or any successor corporation).
(k) "Disability" means (1) any physical or mental condition that
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would qualify a Participant for a disability benefit under any long-term
disability plan maintained by the Company; (2) when used in connection with the
exercise of an Incentive Stock Option following termination of employment,
disability within the meaning of section 22(e)(3) of the Code; or (3) such other
condition as may be determined in the sole discretion of the Committee to
constitute Disability.
(l) "Dividend Equivalent" means a right granted under Section 9 to
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receive cash, Shares, or other property equal in value to dividends paid with
respect to a specified number of Shares. Dividend Equivalents may be awarded on
a free-standing basis or in connection with another Award, and may be paid
currently or on a deferred basis.
(m) "Eligible Recipient" means an officer, director, employee,
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consultant or advisor of the Company or of any Parent or Related Company.
(n) "Exchange Act" shall mean the Securities Exchange Act of 1934,
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as amended from time to time.
(o) "Exercise Price" means the per share price at which a holder
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of an Option may purchase the Shares issuable upon exercise of the Option.
(p) "Fair Market Value" as of a particular date shall mean the
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fair market value of a Share as determined by the Committee in its sole
discretion; provided that (i) if the Shares are admitted to trading on a
national securities exchange, fair market value of a Share on any date shall be
the closing sale price reported for such Share on such exchange on such date on
which a sale was reported, (ii) if the Shares are admitted to quotation on the
National Association of Securities Dealers Automated Quotation ("Nasdaq") System
or other comparable quotation system and has been designated as a National
Market System ("NMS") security, fair market value of a Share on any date shall
be the closing sale price reported for such Share on such system on such date on
which a sale was reported, or (iii) if the Shares are admitted to quotation on
the Nasdaq System but have not been designated as an
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NMS security, fair market value of a Share on any date shall be the average of
the highest bid and lowest asked prices of such Share on such system on such
date on which both bid and ask prices were reported.
(q) "Immediate Family" shall mean any child, stepchild,
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grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law,
father-in-law, daughter-in-law, son-in-law, brother-in-law, or sister-in-law,
including adoptive relationships and any person sharing the employee's household
(other than a tenant or employee).
(r) "Incentive Stock Option" shall mean an Option that is an
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"incentive stock option" within the meaning of section 422 of the Code, or any
successor provision, and that is designated by the Committee as an Incentive
Stock Option.
(s) "Nonqualified Stock Option" means any Option that is not an
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Incentive Stock Option, including any Option that provides (as of the time such
Option is granted) that it will not be treated as an Incentive Stock Option.
(t) "Option" means an Incentive Stock Option, a Nonqualified Stock
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Option, or either or both of them, as the context requires.
(u) "Other Award" means an Award granted pursuant to Section 10
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hereof.
(v) "Parent" means any corporation (other than the Company) in an
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unbroken chain of corporations ending with the Company, if each of the
corporations in the chain (other than the Company) owns stock possessing 50% or
more of the combined voting power of all classes of stock in one of the other
corporations in the chain.
(w) "Participant" means any Eligible Recipient selected by the
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Committee, pursuant to the Committee's authority in Section 3 hereof, to receive
Awards. A Participant who receives the grant of an Option is sometimes referred
to herein as "Optionee."
(x) "Person" shall have the meaning given in Section 3(a)(9) of
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the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof,
except that such term shall not include (i) the Company or any of its
subsidiaries, (ii) a trustee or
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other fiduciary holding securities under an employee benefit plan of the Company
or any of its affiliates, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) a corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company.
(y) "Plan" means this WaveSplitter Technologies, Inc. 2000 Stock
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Incentive Plan.
(z) "Related Company" means any corporation, partnership, joint
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venture or other entity in which the Company owns, directly or indirectly, at
least a 20% beneficial ownership interest.
(aa) "Restricted Stock" means Shares subject to certain
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restrictions granted pursuant to Section 8 hereof.
(bb) "Restricted Stock Units" means the right to receive in cash
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or Shares the Fair Market Value of a Share of Company Stock granted pursuant to
Section 8 hereof.
(cc) "Shares" means shares of Common Stock and any successor
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security.
(dd) "Subsidiary" means any corporation (other than the Company)
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in an unbroken chain of corporations beginning with the Company, if each of the
corporations (other than the last corporation) in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain.
Section 3. Administration.
(a) The Plan shall be administered by the Committee, which shall
serve at the pleasure of the Board. Pursuant to the terms of the Plan, and
except as provided in Section 7(k), the Committee shall have the power and
authority, without limitation:
(i) to select those Eligible Recipients who shall be
Participants;
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(ii) to determine whether and to what extent Options or awards
of Restricted Stock, Restricted Stock Units, Dividend Equivalents or Other
Awards are to be granted hereunder to Participants;
(iii) to determine the number of Shares to be covered by each
Award granted hereunder;
(iv) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of each Award granted hereunder;
(v) to determine the terms and conditions, not inconsistent with
the terms of the Plan, which shall govern all written instruments
evidencing Options or awards of Restricted Stock, Restricted Stock Units,
Dividend Equivalents or Other Awards granted hereunder;
(vi) to adopt, alter and repeal such administrative rules,
guidelines and practices governing the Plan as it shall from time to time
deem advisable; and
(vii) to interpret the terms and provisions of the Plan and any
Award issued under the Plan (and any Award Agreement relating thereto) in
its sole discretion and to otherwise supervise the administration of the
Plan.
(b) The Committee may, in its absolute discretion, without
amendment to the Plan, (i) accelerate the date on which any Option granted under
the Plan becomes exercisable, waive or amend the operation of Plan provisions
respecting exercise after termination of employment or otherwise adjust any of
the terms of such Option, and (ii) accelerate the lapse of restrictions, or
waive any condition imposed hereunder, with respect to any share of Restricted
Stock or Restricted Stock Unit or otherwise adjust any of the terms applicable
to any such Award; provided that no action under this Section 3(b) shall
adversely affect any outstanding Award without the consent of the holder
thereof.
(c) All decisions made by the Committee pursuant to the provisions
of the Plan shall be final, conclusive and binding on all persons, including the
Company and the Participants. No member of the Board or the Committee, nor any
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officer or employee of the Company 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 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 4. Shares Reserved for Issuance Under the Plan.
(a) The total number of Shares reserved and available for issuance
under the Plan shall be 16,000,000 Shares, provided, however, that on the first
day of each fiscal year of the Company (beginning in 2002) such number shall be
increased by an amount equal to the lesser of (i) 4,000,000 Shares or (ii) 4% of
the number of outstanding Shares on the last trading day of the immediately
preceding fiscal year. Such Shares may consist, in whole or in part, of
authorized and unissued Shares or treasury shares.
(b) To the extent that (i) an Option expires or is otherwise
cancelled or terminated without being exercised, or (ii) any Shares subject to
any award of Restricted Stock, Restricted Stock Units, Dividend Equivalents or
Other Awards are forfeited, such Shares shall again be available for issuance in
connection with future Awards granted under the Plan. If any Shares have been
pledged as collateral for indebtedness incurred by a Participant in connection
with the exercise of an Option and such Shares are returned to the Company in
satisfaction of such indebtedness, such Shares shall again be available for
issuance in connection with future Awards granted under the Plan.
(c) The aggregate number of Shares with respect to which Awards
may be granted to any individual Optionee during any fiscal year shall not
exceed 50% of the Shares available for issuance under the Plan.
Section 5. Equitable Adjustments; Change in Control
(a) In the event of any Change in Capitalization, an equitable
substitution or proportionate adjustment shall be made in (i) the aggregate
number and/or kind of Shares reserved for issuance under the Plan, (ii) the
kind, number and/or Exercise Price of Shares or other property subject to
outstanding Options granted under the Plan, and (iii) the kind, number and/or
purchase price of Shares or other property subject to outstanding awards of
Restricted Stock, Restricted Stock
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Units, Dividend Equivalents and Other Awards granted under the Plan, in each
case as may be determined by the Committee, in its sole discretion. Such other
equitable substitutions or adjustments shall be made as may be determined by the
Committee, in its sole discretion. Without limiting the generality of the
foregoing, in connection with a Change in Capitalization, the Committee may
provide, in its sole discretion, for the cancellation of any outstanding Awards
in exchange for payment in cash or other property of the Fair Market Value of
the Shares covered by such Awards, reduced, in the case of Options, by the
exercise price thereof.
(b) In the event of a Change of Control, unless an Award is
assumed or an equivalent award or right is substituted therefor, such Awards
shall become fully vested and exercisable and all restrictions on the vesting or
exercisability of such Awards shall lapse as of the date of the Change of
Control. Notwithstanding the foregoing, the Committee may, in its sole
discretion, at the time of grant or any time thereafter, accelerate vesting
and/or exercisability or provide for the lapsing in whole or in part of any or
all restrictions on vesting or exercisability of any Award granted pursuant to
this Plan in the event of a Change in Control.
Section 6. Eligibility.
The Participants under the Plan shall be selected from time to time by
the Committee, in its sole discretion, from among Eligible Recipients. The
Committee shall have the authority to grant to any Eligible Recipient Incentive
Stock Options, Nonqualified Stock Options, Restricted Stock, Restricted Stock
Units, Dividend Equivalents or Other Awards, provided that directors of the
Company or any Parent or Related Company who are not employees of the Company or
of any Parent or Related Company, and consultants or advisors to the Company or
to any Parent or Related Company may not be granted Incentive Stock Options and
further provided that Incentive Stock Options may not be granted to an employee
of a Related Company if such Related Company is not a Subsidiary.
Section 7. Options.
(a) General. Options may be granted alone or in addition to other
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Awards granted under the Plan. Any Option granted under the Plan shall be
evidenced by an Award Agreement in such form as the Committee may from time to
time approve. The provisions of each Option need not be the same with respect
to each Participant. Participants who are granted Options shall enter into an
Award Agreement with the Company, in such form as the Committee shall determine,
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which Award Agreement shall set forth, among other things, the Exercise Price of
the Option, the term of the Option and provisions regarding exercisability and
vesting of the Option granted thereunder. The Options granted under the Plan
may be of two types: (i) Incentive Stock Options and (ii) Nonqualified Stock
Options. To the extent that any Option does not qualify as an Incentive Stock
Option, it shall constitute a separate Nonqualified Stock Option. More than one
Option may be granted to the same Participant and be outstanding concurrently
hereunder. Options granted under the Plan shall be subject to the terms and
conditions set forth in paragraphs (b)-(j) of this Section 7 and the Award
Agreement shall contain such additional terms and conditions, not inconsistent
with the terms of the Plan, as the Committee shall deem desirable.
(b) Exercise Price. The per share Exercise Price of Shares
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purchasable under an Option shall be determined by the Committee in its sole
discretion at the time of grant but shall not, in the case of Incentive Stock
Options, be less than 100% of the Fair Market Value per Share on such date (110%
of the Fair Market Value per Share on such date if, on such date, the Eligible
Recipient owns (or is deemed to own under the Code) stock possessing more than
ten percent (a "Ten Percent Owner") of the total combined voting power of all
classes of Common Stock).
(c) Option Term. The term of each Option shall be fixed by the
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Committee, but no Option shall be exercisable more than ten years after the date
such Option is granted. If the Eligible Participant is a Ten Percent Owner, an
Incentive Stock Option may not be exercisable after the expiration of five years
from the date such Incentive Stock Option is granted.
(d) Exercisability. Options shall be exercisable at such time or
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times and subject to such terms and conditions, including the attainment of
preestablished corporate performance goals, as shall be determined by the
Committee in the Award Agreement or after the time of grant, provided that no
action under this Section 7(d) following the time of grant shall adversely
affect any outstanding Option without the consent of the holder thereof. The
Committee may also provide that any Option shall be exercisable only in
installments, and the Committee may waive such installment exercise provisions
at any time, in whole or in part, based on such factors as the Committee may
determine in its sole discretion.
The Committee may provide at the time of grant or anytime thereafter,
in its sole discretion, that any Option shall be exercisable with respect to
Shares
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that otherwise would not then be exercisable, provided that, in connection with
such exercise, the Optionee enters into a form of Restricted Stock Award
Agreement approved by the Committee.
(e) Method of Exercise. Options may be exercised in whole or in
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part by giving written notice of exercise to the Company specifying the number
of Shares to be purchased, accompanied by payment in full of the aggregate
Exercise Price of the Shares so purchased in cash or its equivalent, as
determined by the Committee. As determined by the Committee, in its sole
discretion, payment in whole or in part may also be made (i) by means of any
cashless exercise procedure approved by the Committee, (ii) in the form of
unrestricted Shares or Restricted Stock already owned by the Optionee which, (x)
in the case of unrestricted Shares acquired upon exercise of an Option, have
been owned by the Optionee for more than six months on the date of surrender,
and (y) has a Fair Market Value on the date of surrender equal to the aggregate
option price of the Shares as to which such Option shall be exercised, (iii)
loans pursuant to paragraph (g) of this Section 7, (iv) any other form of
consideration approved by the Committee and permitted by applicable law or (v)
any combination of the foregoing. If payment of the Exercise Price is made in
whole or in part in the form of Restricted Stock, the Shares received upon the
exercise of such Option shall be restricted in accordance with the original
terms of the Restricted Stock award in question, except that the Committee may
direct that such restrictions shall apply only to that number of Shares equal to
the number of Shares surrendered upon the exercise of such Option.
(f) Rights as Stockholder. An Optionee shall have no rights to
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dividends or any other rights of a stockholder with respect to the Shares
subject to the Option until the Optionee has given written notice of exercise,
has paid in full for such Shares, has satisfied the requirements of Section 13
hereof and, if requested, has given the representation described in paragraph
(b) of Section 14 hereof.
(g) Loans. The Company or any Parent or Related Company may make
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loans available to Optionees for the payment of the exercise price of
outstanding Options. Such loans shall (i) be evidenced by promissory notes
entered into by the Optionees in favor of the Company or any Parent or Related
Company, (ii) bear interest at the applicable federal interest rate or such
other rate as the Committee shall determine, (iii) be subject to such other
terms and conditions, not inconsistent with the Plan, as the Committee shall
determine, and (iv) be subject to Committee approval. Unless the Committee
determines otherwise, when a loan is made, Shares having an aggregate Fair
Market Value at least equal to the principal amount of the
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loan shall be pledged by the Optionee to the Company as security for payment of
the unpaid balance of the loan, and such pledge shall be evidenced by a pledge
agreement, the terms of which shall be determined by the Committee, in its sole
discretion; provided that 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.
(h) Nontransferability of Options. The Optionee shall not be
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permitted to sell, transfer, pledge or assign any Option other than by will and
the laws of descent and distribution (including, with respect to a Nonqualified
Stock Option only, by instrument to an inter vivos or testamentary trust in
which the Options are to be passed to beneficiaries upon the death of the
Participant) and all Options shall be exercisable during the Participant's
lifetime only by the Participant, in each case, except as set forth in the
following two sentences. During an Optionee's lifetime, the Committee may, in
its discretion, permit the transfer, assignment or other encumbrance of an
outstanding Option if such Option is a Nonqualified Stock Option or an Incentive
Stock Option that the Committee and the Participant intend to change to a
Nonqualified Stock Option. Subject to the approval of the Committee and to any
conditions that the Committee may prescribe, an Optionee may, upon providing
written notice to the Company, elect to transfer any or all Options described in
the preceding sentence to members of his or her Immediate Family, provided that
no such transfer by any Participant may be made in exchange for consideration.
(i) Termination of Employment or Service. Unless otherwise
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provided in an Award Agreement, if an Optionee's employment with, or service as
a director, consultant or advisor to, the Company or to any Parent or Related
Company terminates for any reason other than Cause, (i) Options granted to such
Participant, to the extent that they are exercisable at the time of such
termination, shall remain exercisable until the date set forth in the Award
Agreement, or such later date as is otherwise determined by the Committee, but
in no event shall such exercise period be less than 30 days after such
termination (six months in the case of termination by reason of death or
Disability), on which date they shall expire, and (ii) Options granted to such
Optionee, to the extent that they were not exercisable at the time of such
termination, shall expire on the date of such termination. The 30-day period
described in the preceding sentence (i) shall be extended to six months from the
date of such termination in the event of the Optionee's death or Disability
during such 30-day period. Notwithstanding the foregoing, no Option shall be
exercisable after the expiration of its term. Unless provided in an Award
Agreement or in the Commit-
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tee's discretion any time thereafter, in the event of the termination of an
Optionee's employment for Cause, all outstanding Options granted to such
Participant shall expire on the date of such termination.
(j) Limitation on Incentive Stock Options. To the extent that the
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aggregate Fair Market Value of Shares with respect to which Incentive Stock
Options are exercisable for the first time by an Optionee during any calendar
year under the Plan and any other stock option plan of the Company shall exceed
$100,000, such Options shall be treated as Nonqualified Stock Options. Such
Fair Market Value shall be determined as of the date on which each such
Incentive Stock Option is granted.
(k) Automatic Grants of Stock Options to Non-Employee Directors.
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The Company shall grant Nonqualified Stock Options to non-employee directors of
the Company pursuant to this Section 7(k), which grants shall be automatic and
nondiscretionary and otherwise subject to the terms and conditions set forth in
this Section 7(k) and the terms of the Plan ("Automatic Non-Employee Director
Options"). Upon initial election to the Board each non-employee director shall
be automatically granted a Nonqualified Stock Option to purchase 40,000 Shares
(an "Initial Option"). Commencing on the Company's first annual meeting of
stockholders immediately following the Effective Date, each non-employee
director shall be automatically granted a Nonqualified Stock Option to purchase
10,000 Shares (the "Annual Options") on the date immediately following the
Company's annual meeting of stockholders; provided, that he or she is then a
director of the Company and, provided, further, that as of such date, such
director shall have served on the Board for at least the preceding six (6)
months.
The term of each Automatic Non-Employee Director Option shall be five
(5) years, and the per Share Exercise Price of an Automatic Non-Employee
Director Option shall be no less than 100% of the Fair Market Value on the date
of grant, provided, however, in no event shall the Exercise Price of an
Automatic Non-Employee Director Option be less than the par value (if any) of
the Shares. Each Initial Option shall become vested and exercisable as to one-
third (1/3) of the Shares of the Initial Option on the first anniversary of the
date of grant, and shall become vested and exercisable as to an additional one-
third (1/3) of the Shares of the Initial Option on each of the subsequent two
(2) anniversaries of the date of grant. Each Annual Option shall become fully
vested and exercisable as to all of the Shares of the Annual Option on the first
anniversary of the date of grant of such Option.
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In the event that the number of Shares available for grant under the
Plan is not sufficient to accommodate the Automatic Non-Employee Director
Options, then the remaining Shares available for Automatic Non-Employee Director
Options shall be granted to non-employee directors on a pro-rata basis. No
further grants shall be made until such time, if any, as additional Shares
become available for grant under the Plan through action of the Board and/or the
stockholders of the Company to increase the number of Shares that may be issued
under the Plan or through cancellation or expiration of Awards previously
granted hereunder.
Section 8. Restricted Stock and Restricted Stock Units.
(a) General. Awards of Restricted Stock and Restricted Stock
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Units may be issued either alone or in addition to other Awards granted under
the Plan and shall be evidenced by an Award Agreement. The Committee shall
determine the Eligible Recipients to whom, and the time or times at which,
Awards of Restricted Stock and Restricted Stock Units shall be made; the number
of Shares and/or Units to be awarded; the price, if any, to be paid by the
Participant for the acquisition of Restricted Stock; and the Restricted Period
(as defined in Section 8(d)) applicable to awards of Restricted Stock and
Restricted Stock Units. The provisions of the awards of Restricted Stock or
Restricted Stock Units need not be the same with respect to each Participant.
(b) Purchase Price. The price per Share, if any, that a
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Participant must pay for Shares purchasable under an award of Restricted Stock
shall be determined by the Committee in its sole discretion at the time of
grant.
(c) Awards and Certificates. The prospective recipient of an
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Award of Restricted Stock shall not have any rights with respect to any such
Award, unless and until such recipient has executed an Award Agreement
evidencing the Award and delivered a fully executed copy thereof to the Company,
within such period as the Committee may specify after the award date. Each
Participant who is granted an award of Restricted Stock shall be issued a stock
certificate in respect of such shares of Restricted Stock, which certificate
shall be registered in the name of the Participant and shall bear an appropriate
legend referring to the terms, conditions, and restrictions applicable to any
such Award; provided that the Company may require that the stock certificates
evidencing Restricted Stock granted hereunder be held in the custody of the
Company until the restrictions thereon shall have lapsed, and that,
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as a condition of any award of Restricted Stock, the Participant shall have
delivered a stock power, endorsed in blank, relating to the Shares covered by
such Award.
(d) Nontransferability. The Awards of Restricted Stock and
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Restricted Stock Units granted pursuant to this Section 8 shall be subject to
the restrictions on transferability set forth in this paragraph (d). During
such period as may be set by the Committee in the Award Agreement (the
"Restricted Period"), the Participant shall not be permitted to sell, transfer,
pledge, hypothecate or assign shares of Restricted Stock or Restricted Stock
Units awarded under the Plan except by will or the laws of descent and
distribution; provided that 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 in its sole discretion. The
Committee may also impose such other restrictions and conditions, including the
achievement of preestablished corporate performance goals, on awarded Restricted
Stock and Restricted Stock Units as it deems appropriate. In no event shall the
Restricted Period end with respect to a Restricted Stock Award or Restricted
Unit Award prior to the satisfaction by the Participant of any liability arising
under Section 13 hereof. Any attempt to dispose of any Restricted Shares in
contravention of any such restrictions shall be null and void and without
effect.
(e) Rights as a Stockholder. Except as provided in Section 8(c)
-----------------------
or as otherwise provided in an Award Agreement, the Participant shall possess
all incidents of ownership with respect to Shares of Restricted Stock during the
Restricted Period, including the right to receive or reinvest dividends with
respect to such Shares and to vote such Shares. Certificates for unrestricted
Shares shall be delivered to the Participant promptly after, and only after, the
Restricted Period shall expire without forfeiture in respect of such awards of
Restricted Stock except as the Committee, in its sole discretion, shall
otherwise determine. A Participant who is awarded Restricted Stock Units shall
possess no incidents of ownership with respect to the Units, provided that the
Award Agreement may provide for payments in lieu of dividends to such
Participant.
(f) Termination of Employment. The rights of Participants granted
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Awards of Restricted Stock or Restricted Stock Units upon termination of
employment or service as a director, consultant or advisor to the Company or to
any Parent or Related Company for any reason during the Restricted Period shall
be set forth in the Award Agreement governing such Awards.
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(g) Loans. In the sole discretion of the Committee, loans may be
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made to Participants in connection with the purchase of Restricted Stock under
substantially the same terms and conditions as provided in Section 7(g) of the
Plan with respect to the exercise of Options.
(h) Early Exercise Options. The Committee shall award Restricted
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Stock to a Participant upon the Participant's early exercise of an Option.
Unless otherwise determined by the Committee, the lapse of restrictions with
respect to such Restricted Stock shall occur on the same schedule as the Option
for which the Restricted Stock was exercised.
Section 9. Dividend Equivalents.
The Committee is authorized to grant Dividend Equivalents to Eligible
Recipients. The Committee may provide, at the date of grant or thereafter, that
Dividend Equivalents shall be paid or distributed when accrued or shall be
deemed to have been reinvested in additional Shares, or other investment
vehicles as the Committee may specify, provided that Dividend Equivalents (other
than freestanding Dividend Equivalents) shall be subject to all conditions and
restrictions of the underlying Awards to which they relate.
Section 10. Other Awards.
Other forms of Awards ("Other Awards") valued in whole or in part by
reference to, or otherwise based on, Common Stock may be granted either alone or
in addition to other Awards under the Plan. Subject to the provisions of the
Plan, the Committee shall have sole and complete authority to determine the
persons to whom and the time or times at which such Other Awards shall be
granted, the number of Shares to be granted pursuant to such Other Awards and
all other conditions of such Other Awards.
Section 11. Amendment and Termination.
The Board may amend, alter or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made that would impair the rights of a
Participant under any Award theretofore granted without such Participant's
consent. Unless the Board determines otherwise, the Board shall obtain approval
of the Company's stockholders for any amendment that would require such approval
in order to satisfy the requirements of section 162(m), section 422 of the Code,
stock
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exchange rules or other applicable law. The Committee may amend the terms of any
Award theretofore granted, prospectively or retroactively, but, subject to
Section 5 of the Plan, no such amendment shall impair the rights of any
Participant without his or her consent.
Section 12. Unfunded Status of Plan.
The Plan is intended to constitute an "unfunded" plan for incentive
compensation. With respect to any payments not yet made to a Participant by the
Company, nothing contained herein shall give any such Participant any rights
that are greater than those of a general creditor of the Company.
Section 13. Withholding Taxes.
Whenever cash is to be paid pursuant to an Award, the Company shall
have the right to deduct therefrom an amount sufficient to satisfy any federal,
state, local and other withholding tax requirements related thereto. Whenever
Shares are to be delivered pursuant to an Award, the Company shall have the
right to require the Participant to remit to the Company in cash an amount
sufficient to satisfy any federal, state, local and other withholding tax
requirements related thereto. With the approval of the Committee, a Participant
may satisfy the foregoing requirement by electing to have the Company withhold
from delivery Shares or by delivering already owned unrestricted Shares, in each
case, having a value equal to the minimum amount of tax required to be withheld.
Such Shares shall be valued at their Fair Market Value on the date as of which
the amount of tax to be withheld is determined. Fractional share amounts shall
be settled in cash. Such an election may be made with respect to all or any
portion of the Shares to be delivered pursuant to an Award.
Section 14. General Provisions.
(a) Shares shall not be issued pursuant to the exercise of any
Award granted hereunder unless the exercise of such Award and the issuance and
delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act and the requirements of any stock exchange upon which
the Common Stock may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.
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(b) The Committee may require each person acquiring Shares to
represent to and agree with the Company in writing that such person is acquiring
the Shares without a view to distribution thereof. The certificates for such
Shares may include any legend that the Committee deems appropriate to reflect
any restrictions on transfer.
(c) All certificates for Shares delivered under the Plan shall be
subject to such stock-transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Common
Stock may then be listed, and any applicable federal or state securities law.
The Committee may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions.
(d) Nothing contained in the Plan shall prevent the Board from
adopting other or additional compensation arrangements, subject to stockholder
approval, if such approval is required; and such arrangements may be either
generally applicable or applicable only in specific cases. Neither the adoption
of the Plan nor the granting of any Award to an Eligible Recipient shall confer
upon any Eligible Recipient any right to continued employment or service with
the Company or any Parent or Related Company, as the case may be, nor shall it
interfere in any way with the right of the Company or any Parent or Related
Company to terminate the employment or service of any of its Eligible Recipients
at any time.
Section 15. Stockholder Approval; Effective Date of Plan.
(a) The grant of any Award hereunder shall be contingent upon
stockholder approval of the Plan being obtained within 12 months before or after
the date the Board adopts the Plan.
(b) Subject to the approval of the Plan by the stockholders of the
Company within twelve (12) months before or after the date the Plan is adopted
by the Board, the Plan shall be effective as of the consummation of the first
underwritten initial public offering of Shares of the Company (the "Effective
Date").
Section 16. Term of Plan.
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No Award shall be granted pursuant to the Plan on or after the tenth
anniversary of the Effective Date, but Awards theretofore granted may extend
beyond that date.
Section 17. Governing Law.
The Plan and all determinations made and actions taken pursuant hereto
shall be governed by the laws of the State of Delaware, without giving effect to
the conflict of laws principles thereof.
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