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EXHIBIT 4.05
1992 EQUITY INCENTIVE PLAN
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MACROMEDIA, INC.
1992 EQUITY INCENTIVE PLAN
As Adopted September 23, 1992
and Amended Through June 23, 2000
1. PURPOSE. The purpose of the Plan is to provide
incentives to attract, retain and motivate eligible persons whose present and
potential contributions are important to the success of the Company, its
Parent, Subsidiaries and Affiliates, by offering them an opportunity to
participate in the Company's future performance through awards of Options,
Restricted Stock and Stock Bonuses. Capitalized terms not defined in the text
are defined in Section 24.
2. SHARES SUBJECT TO THE PLAN.
2.1 NUMBER OF SHARES AVAILABLE. Subject to
Sections 2.2 and 18, the total number of Shares reserved and available for
grant and issuance pursuant to the Plan shall be 17,600,000 Shares. Any
Shares issuable upon exercise of options granted pursuant to the Authorware
1988 Stock Option Plan, the Macromind, Inc. 1989 Incentive Stock Option Plan
and 1989 Nonstatutory Stock Option Plan, and the Paracomp, Inc. 1989 Stock
Option Plan (the "PRIOR PLANS") that expire or become unexercisable for any
reason without having been exercised in full, shall no longer be available
for distribution under the Prior Plans, but shall be available for
distribution under this Plan. Subject to Sections 2.2 and 18, Shares shall
again be available for grant and issuance in connection with future Awards
under the Plan that: (a) are subject to issuance upon exercise of an Option
but cease to be subject to such Option for any reason other than exercise of
such Option, (b) are subject to an Award granted hereunder but are forfeited
or are repurchased by the Company at the original issue price, or (c) are
subject to an Award that otherwise terminates without Shares being issued.
2.2 ADJUSTMENT OF SHARES. In the event that the
number of outstanding Shares is changed by a stock dividend,
recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification or similar change in the capital structure of the Company
without consideration, then (a) the number of Shares reserved for issuance
under the Plan, (b) the Exercise Prices of and number of Shares subject to
outstanding Options, and (c) the number of Shares subject to other
outstanding Awards shall be proportionately adjusted, subject to any required
action by the Board or the stockholders of the Company and compliance with
applicable securities laws; PROVIDED, HOWEVER, that fractions of a Share
shall not be issued but shall either be paid in cash at Fair Market Value or
shall be rounded up to the nearest Share, as determined by the Committee; and
PROVIDED, FURTHER, that the Exercise Price of any Option may not be decreased
to below the par value of the Shares.
3. ELIGIBILITY. ISOs (as defined in Section 5 below) may
be granted only to employees (including officers and directors who are also
employees) of the Company or of a Parent or Subsidiary of the Company. All
other Awards may be granted to employees, officers, directors, consultants,
independent contractors and advisers of the Company or any Parent, Subsidiary
or Affiliate of the Company; PROVIDED such consultants, contractors and
advisers (a) are natural persons; (b) render bona fide services to the
Company; and (c) the services are not in connection with the offer and sale
of securities in a capital-raising transaction and do not directly or
indirectly promote or maintain a market for the Company's securities. No
"Named Executive Officer" (as that
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term is defined in Item 402(a)(3) of Regulation S-K promulgated under the
Exchange Act) shall be eligible to receive more than 1,800,000 Shares at any
time during the term of this Plan pursuant to the grant of Awards hereunder.
A person may be granted more than one Award under the Plan.
4. ADMINISTRATION.
4.1 COMMITTEE AUTHORITY. The Plan shall be
administered by the Committee or the Board acting as the Committee. Subject
to the general purposes, terms and conditions of the Plan, and to the
direction of the Board, the Committee shall have full power to implement and
carry out the Plan. The Committee shall have the authority to:
(a) construe and interpret the Plan, any Award Agreement and
any other agreement or document executed pursuant to the
Plan;
(b) prescribe, amend and rescind rules and regulations
relating to the Plan;
(c) select persons to receive Awards;
(d) determine the form and terms of Awards;
(e) determine the number of Shares or other consideration
subject to Awards;
(f) determine whether Awards will be granted singly, in
combination, in tandem, in replacement of, or as
alternatives to, other Awards under the Plan or any
other incentive or compensation plan of the Company or
any Parent, Subsidiary or Affiliate of the Company;
(g) grant waivers of Plan or Award conditions;
(h) determine the vesting, exercisability and payment of
Awards;
(i) correct any defect, supply any omission, or reconcile
any inconsistency in the Plan, any Award or any Award
Agreement;
(j) determine whether an Award has been earned; and
(k) make all other determinations necessary or advisable for
the administration of the Plan.
4.2 COMMITTEE DISCRETION. Any determination made
by the Committee with respect to any Award shall be made in its sole
discretion at the time of grant of the Award or, unless in contravention of
any express term of the Plan or Award, at any later time, and such
determination shall be final and binding on the Company and all persons
having an interest in any Award under the Plan. The Committee may delegate to
one or more officers of the Company the authority to grant an Award under the
Plan to Participants who are not Insiders of the Company.
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4.3 COMPLIANCE WITH CODE SECTION 162(m). If two
or more members of the Board are Outside Directors, the Committee shall be
comprised of at least two members of the Board, all of whom are Outside
Directors.
5. OPTIONS. The Committee may grant Options to eligible
persons and shall determine whether such Options shall be Incentive Stock
Options within the meaning of the Code ("ISOS") or Nonqualified Stock Options
("NQSOS"), the number of Shares subject to the Option, the Exercise Price of
the Option, the period during which the Option may be exercised, and all
other terms and conditions of the Option, including, in the case of a NQSO
and subject to the limits in Section 11 on such transfers, whether the Option
or an interest therein may be transferred during the Participant's lifetime,
all subject to the following:
5.1 FORM OF OPTION GRANT. Each Option granted
under the Plan shall be evidenced by an Award Agreement which shall expressly
identify the Option as an ISO or NQSO ("STOCK OPTION AGREEMENT"), and be in
such form and contain such provisions (which need not be the same for each
Participant) as the Committee shall from time to time approve, and which
shall comply with and be subject to the terms and conditions of the Plan.
5.2 DATE OF GRANT. The date of grant of an Option
shall be the date on which the Committee makes the determination to grant
such Option, unless otherwise specified by the Committee. The Stock Option
Agreement and a copy of the Plan will be delivered to the Participant within
a reasonable time after the granting of the Option.
5.3 EXERCISE PERIOD. Options shall be exercisable
within the times or upon the events determined by the Committee as set forth
in the Stock Option Agreement; PROVIDED, HOWEVER, that no Option shall be
exercisable after the expiration of one hundred twenty (120) months from the
date the Option is granted, and provided further that no Option granted to a
person who directly or by attribution owns more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or any
Parent or Subsidiary of the Company ("TEN PERCENT STOCKHOLDER") shall be
exercisable after the expiration of five (5) years from the date the Option
is granted. The Committee also may provide for the exercise of Options to
become exercisable at one time or from time to time, periodically or
otherwise, in such number or percentage as the Committee determines.
5.4 EXERCISE PRICE. The Exercise Price shall be
determined by the Committee when the Option is granted and may be not less
than 85% of the Fair Market Value of the Shares on the date of grant;
provided that (i) the Exercise Price of an ISO shall be not less than 100% of
the Fair Market Value of the Shares on the date of grant and (ii) the
Exercise Price of any Option granted to a Ten Percent Stockholder shall not
be less than 110% of the Fair Market Value of the Shares on the date of
grant. Payment for the Shares purchased may be made in accordance with
Section 8 of the Plan.
5.5 METHOD OF EXERCISE. Options may be exercised
only by delivery by the Holder to the Company of a written stock option
exercise agreement (the "EXERCISE AGREEMENT") in a form approved by the
Committee (which need not be the same for each Holder), stating the number of
Shares being purchased, the restrictions imposed on the Shares, if any, and
such
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representations and agreements regarding Holder's investment intent and
access to information, if any, as may be required or desirable by the Company
to comply with applicable securities laws, together with payment in full of
the Exercise Price for the number of Shares being purchased.
5.6 TERMINATION. Notwithstanding the exercise
periods set forth in the Stock Option Agreement, exercise of an Option shall
always be subject to the following:
(a) If the Participant is Terminated for any reason except
death or Disability, then Holder may exercise such
Holder's Options only to the extent that such Options
would have been exercisable upon the Termination Date no
later than ninety (90) days after the Termination Date
(or such shorter time period as may be specified in the
Stock Option Agreement or such longer time period, not
exceeding five (5) years, after the Termination Date as
may be determined by the Committee and specified in the
Stock Option Agreement, with any exercise beyond three
(3) months after the Termination Date deemed to be an
NQSO), but in any event, no later than the expiration
date of the Options.
(b) If the Participant is terminated because of death or
Disability (or the participant dies within three months
of such termination), then Participant's Options may be
exercised only to the extent that such Options would
have been exercisable by Participant on the Termination
Date and must be exercised by the Holder no later than
twelve (12) months after the Termination Date (or such
shorter time period as may be specified in the Stock
Option Agreement or such longer time period, not
exceeding five (5) years, after the Termination Date as
may be determined by the Committee and specified in the
Stock Option Agreement (with any exercise beyond (i)
three (3) months after the Termination Date when the
Termination is for any reason other than the
Participant's death or disability, within the meaning of
Section 22(e)(3) of the Code, or (ii) twelve (12) months
after the Termination Date when the Termination is for
Participant's death or disability, within the meaning of
Section 22(e)(3) of the Code, deemed to be an NQSO), but
in any event no later than the expiration date of the
Options.
5.7 LIMITATIONS ON EXERCISE. The Committee may
specify a reasonable minimum number of Shares that may be purchased on any
exercise of an Option, provided that such minimum number will not prevent
Holder from exercising the Option for the full number of Shares for which it
is then exercisable.
5.8 LIMITATIONS ON ISOS. The aggregate Fair
Market Value (determined as of the date of grant) of Shares with respect to
which ISOs are exercisable for the first time by a Participant during any
calendar year (under the Plan or under any other incentive stock option plan
of the Company or any Affiliate, Parent or Subsidiary of the Company) shall
not exceed $100,000. If the Fair Market Value of Shares on the date of grant
with respect to which ISOs are exercisable for the first time by a
Participant during any calendar year exceeds $100,000, the Options for the
first $100,000 worth of Shares to become exercisable in such calendar year
shall be ISOs and the Options for the amount in excess of $100,000 that
become exercisable in that calendar year shall be
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NQSOs. In the event that the Code or the regulations promulgated thereunder
are amended after the Effective Date of the Plan to provide for a different
limit on the Fair Market Value of Shares permitted to be subject to ISOs,
such different limit shall be automatically incorporated herein and shall
apply to any Options granted after the effective date of such amendment.
5.9 MODIFICATION, EXTENSION OR RENEWAL. The
Committee may modify, extend or renew outstanding Options and authorize the
grant of new Options in substitution therefor, provided that any such action
may not, without the written consent of Participant, impair any of
Participant's rights under any Option previously granted. Any outstanding ISO
that is modified, extended, renewed or otherwise altered shall be treated in
accordance with Section 424(h) of the Code. The Committee may reduce the
Exercise Price of outstanding Options without the consent of Participants
affected by a written notice to them; PROVIDED, HOWEVER, that the Exercise
Price may not be reduced below the minimum Exercise Price that would be
permitted under Section 5.4 of the Plan for Options granted on the date the
action is taken to reduce the Exercise Price; PROVIDED, FURTHER, that the
Exercise Price shall not be reduced below the par value of the Shares, if any.
5.10 NO DISQUALIFICATION. Notwithstanding any
other provision in the Plan, no term of the Plan relating to ISOs shall be
interpreted, amended or altered, nor shall any discretion or authority
granted under the Plan be exercised, so as to disqualify the Plan under
Section 422 of the Code or, without the consent of the Participant affected,
to disqualify any ISO under Section 422 of the Code.
6. RESTRICTED STOCK. A Restricted Stock Award is an
offer by the Company to sell to an eligible person Shares that are subject to
restrictions. The Committee shall determine to whom an offer will be made,
the number of Shares the person may purchase, the price to be paid (the
"PURCHASE PRICE"), the restrictions to which the Shares shall be subject, and
all other terms and conditions of the Restricted Stock Award, subject to the
following:
6.1 FORM OF RESTRICTED STOCK AWARD. All purchases
under a Restricted Stock Award made pursuant to the Plan shall be evidenced
by an Award Agreement ("RESTRICTED STOCK PURCHASE AGREEMENT") that shall be
in such form (which need not be the same for each Participant) as the
Committee shall from time to time approve, and shall comply with and be
subject to the terms and conditions of the Plan. The offer of Restricted
Stock shall be accepted by the Holder's execution and delivery of the
Restricted Stock Purchase Agreement and full payment for the Shares to the
Company within thirty (30) days from the date the Restricted Stock Purchase
Agreement is delivered to the person. If such person does not execute and
deliver the Restricted Stock Purchase Agreement along with full payment for
the Shares to the Company within thirty (30) days, then the offer shall
terminate, unless otherwise determined by the Committee.
6.2 PURCHASE PRICE. The Purchase Price of Shares
sold pursuant to a Restricted Stock Award shall be determined by the
Committee and shall be at least 85% of the Fair Market Value of the Shares
when the Restricted Stock Award is granted, except in the case of a sale to a
Ten Percent Stockholder, in which case the Purchase Price shall be 100% of
the Fair Market Value. Payment of the Purchase Price may be made in
accordance with Section 8 of the Plan.
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6.3 RESTRICTIONS. Restricted Stock Awards shall
be subject to such restrictions as the Committee may impose. The Committee
may provide for the lapse of such restrictions in installments and may
accelerate or waive such restrictions, in whole or part, based on length of
service, performance or such other factors or criteria as the Committee may
determine.
7. STOCK BONUSES.
7.1 AWARDS OF STOCK BONUSES. A Stock Bonus is an
award of Shares (which may consist of Restricted Stock) for services rendered
to the Company or any Parent, Subsidiary or Affiliate of the Company. A Stock
Bonus may be awarded for past services already rendered to the Company, or
any Parent, Subsidiary or Affiliate of the Company pursuant to an Award
Agreement (the "STOCK BONUS AGREEMENT") that shall be in such form (which
need not be the same for each Participant) as the Committee shall from time
to time approve, and shall comply with and be subject to the terms and
conditions of the Plan. A Stock Bonus may be awarded upon satisfaction of
such performance goals as are set out in advance in Participant's individual
Award Agreement (the "PERFORMANCE STOCK BONUS AGREEMENT") that shall be in
such form (which need not be the same for each Participant) as the Committee
shall from time to time approve, and shall comply with and be subject to the
terms and conditions of the Plan. Stock Bonuses may vary from Participant to
Participant and between groups of Participants, and may be based upon the
achievement of the Company, Parent, Subsidiary or Affiliate and/or individual
performance factors or upon such other criteria as the Committee may
determine.
7.2 TERMS OF STOCK BONUSES. The Committee shall
determine to whom a Stock Bonus shall be granted, the number of Shares to be
awarded to the Participant, whether such Shares shall be Restricted Stock and
all other terms and conditions of the Stock Bonus. If the Stock Bonus is
being earned upon the satisfaction of performance goals pursuant to a
Performance Stock Bonus Agreement, then the Committee shall determine: (a)
the nature, length and starting date of any period during which performance
is to be measured (the "PERFORMANCE PERIOD") for each Stock Bonus; (b) the
performance goals and criteria to be used to measure the performance, if any;
(c) the number of Shares that may be awarded to the Participant; and (d) the
extent to which such Stock Bonuses have been earned. Performance Periods may
overlap and Participants may participate simultaneously with respect to Stock
Bonuses that are subject to different Performance Periods and different
performance goals and other criteria. The number of Shares may be fixed or
may vary in accordance with such performance goals and criteria as may be
determined by the Committee. The Committee may adjust the performance goals
applicable to the Stock Bonuses to take into account changes in law and
accounting or tax rules and to make such adjustments as the Committee deems
necessary or appropriate to reflect the impact of extraordinary or unusual
items, events or circumstances to avoid windfalls or hardships.
7.3 FORM OF PAYMENT. The earned portion of a
Stock Bonus may be paid currently or on a deferred basis with such interest
or dividend equivalent, if any, as the Committee may determine. Payment may
be made in the form of cash, whole Shares, including Restricted Stock, or a
combination thereof, either in a lump sum payment or in installments, all as
the Committee shall determine.
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7.4 TERMINATION DURING PERFORMANCE PERIOD. If a
Participant is Terminated during a Performance Period for any reason, then
such Holder shall be entitled to payment (whether in Shares, cash or
otherwise) with respect to the Stock Bonus only to the extent earned as of
the date of Termination in accordance with the Performance Stock Bonus
Agreement, unless the Committee shall determine otherwise.
8. PAYMENT FOR SHARE PURCHASES.
8.1 PAYMENT. Payment for Shares purchased
pursuant to the Plan may be made in cash (by check) or, where expressly
approved for the Participant by the Committee and where permitted by law:
(a) in the case of exercise by the Participant,
Participant's guardian or legal representative or the
authorized legal representative of Participant's heirs
or legatees after Participant's death, by cancellation
of indebtedness of the Company to the Participant;
(b) by surrender of Shares that either: (1) have been owned
by Holder for more than six (6) months and have been
paid for within the meaning of SEC Rule 144 (and, if
such shares were purchased from the Company by use of a
promissory note, such note has been fully paid with
respect to such Shares); or (2) were obtained by Holder
in the public market;
(c) by tender of a full recourse promissory note having such
terms as may be approved by the Committee and bearing
interest at a rate sufficient to avoid imputation of
income under Sections 483 and 1274 of the Code;
PROVIDED, HOWEVER, that Holders who are not employees of
the Company shall not be entitled to purchase Shares
with a promissory note unless the note is adequately
secured by collateral other than the Shares; PROVIDED,
FURTHER, that the portion of the Purchase Price equal to
the par value of the Shares, if any, must be paid in
cash;
(d) in the case of exercise by the Participant,
Participant's guardian or legal representative or the
authorized legal representative of Participant's heirs
or legatees after Participant's death, by waiver of
compensation due or accrued to Participant for services
rendered;
(e) by tender of property;
(f) with respect only to purchases upon exercise of an
Option, and provided that a public market for the
Company's stock exists:
(1) through a "same day sale" commitment from Holder
and a broker-dealer that is a member of the
National Association of Securities Dealers (an
"NASD DEALER") whereby Holder irrevocably elects
to exercise the Option and to sell a portion of
the Shares so purchased to
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pay for the Exercise Price, and whereby the NASD
Dealer irrevocably commits upon receipt of such
Shares to forward the Exercise Price directly to
the Company; or
(2) through a "margin" commitment from Holder and an
NASD Dealer whereby Holder irrevocably elects to
exercise the Option and to pledge the Shares so
purchased to the NASD Dealer in a margin account
as security for a loan from the NASD Dealer in
the amount of the Exercise Price, and whereby
the NASD Dealer irrevocably commits upon receipt
of such Shares to forward the exercise price
directly to the Company; or
(g) by any combination of the foregoing.
8.2 LOAN GUARANTEES. The Committee may help the
Participant pay for Shares purchased under the Plan by authorizing a
guarantee by the Company of a third-party loan to the Participant.
9. WITHHOLDING TAXES.
9.1 WITHHOLDING GENERALLY. Whenever Shares are to
be issued in satisfaction of Awards granted under the Plan, the Company may
require the Holder to remit to the Company an amount sufficient to satisfy
federal, state and local withholding tax requirements prior to the delivery
of any certificate or certificates for such Shares. Whenever, under the Plan,
payments in satisfaction of Awards are to be made in cash, such payment shall
be net of an amount sufficient to satisfy federal, state, and local
withholding tax requirements.
9.2 STOCK WITHHOLDING. When, under applicable tax
laws, a Participant incurs tax liability in connection with the exercise or
vesting of any Award that is subject to tax withholding and the Participant
is obligated to pay the Company the amount required to be withheld, the
Committee may allow the Participant to satisfy the minimum withholding tax
obligation by electing to have the Company withhold from the Shares to be
issued that number of Shares having a Fair Market Value equal to the minimum
amount required to be withheld, determined on the date that the amount of tax
to be withheld is to be determined (the "TAX DATE"). All elections by a
Participant to have Shares withheld for this purpose shall be made in writing
in a form acceptable to the Committee and shall be subject to the following
restrictions:
(a) the election must be made on or prior to the applicable
Tax Date;
(b) once made the election shall be irrevocable as to the
particular Shares as to which the election is made; and
(c) all elections shall be subject to the consent or
disapproval of the Committee.
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10. PRIVILEGES OF STOCK OWNERSHIP.
10.1 VOTING AND DIVIDENDS. No Holder shall have
any of the rights of a stockholder with respect to any Shares until the
Shares are issued to the Holder. After Shares are issued to the Holder, the
Holder shall be a stockholder and have all the rights of a stockholder with
respect to such Shares, including the right to vote and receive all dividends
or other distributions made or paid with respect to such Shares; PROVIDED,
that if such Shares are Restricted Stock, then any new, additional or
different securities the Holder may become entitled to receive with respect
to such Shares by virtue of a stock dividend, stock split or any other change
in the corporate or capital structure of the Company shall be subject to the
same restrictions as the Restricted Stock; PROVIDED, FURTHER, that the Holder
shall have no right to retain such dividends or distributions with respect to
Shares that are repurchased at the Participant's original Purchase Price
pursuant to Section 12.
10.2 FINANCIAL STATEMENTS. The Company shall
provide financial statements to each Holder prior to such Holder 's purchase
of Shares under the Plan, and to each Holder annually during the period such
Holder has Options outstanding; PROVIDED, HOWEVER, the Company shall not be
required to provide such financial statements to Holders who are also
Participants and whose services in connection with the Company assure them
access to equivalent information.
11. TRANSFERABILITY. Except as otherwise provided in this
Section 11, no Award and no interest therein may be sold, pledged, assigned,
hypothecated, transferred or disposed of in any manner other than by will and
by the laws of descent and distribution and no Award may be made subject to
execution, attachment or similar process:
(a) ALL AWARDS OTHER THE NQSO'S. All Awards other
than NQSO's shall be exercisable: (i) during the Participant's lifetime, only
by (A) the Participant, or (B) the Participant's guardian or legal
representative; and (ii) after Participant's death, by the legal
representative of the Participant's heirs or legatees; and
(b) NQSOS. Unless otherwise restricted by the
Committee, an NQSO Option shall be exercisable: (i) during the Participant's
lifetime only by (A) the Participant, (B) the Participant's guardian or legal
representative, (C) a Family Member of the Participant who has acquired the
Option by Permitted Transfer; and (ii) after Participant's death, by the
legal representative of the Participant's heirs or legatees.
12. RESTRICTIONS ON SHARES. At the discretion of the
Committee, the Company may reserve to itself and/or its assignee(s) in the
Award Agreement (a) a right of first refusal to purchase all Shares that a
Holder may propose to transfer to a third party, and/or (b) a right to
repurchase a portion of or all Shares held by a Holder following the related
Participant's Termination at any time within ninety (90) days after the later
of Participant's Termination Date and the date Participant purchases Shares
under the Plan, for cash or cancellation of purchase money indebtedness, at:
(A) with respect to Shares that are "Vested" (as defined in the Award
Agreement), the higher of: (l) the original Purchase Price under the Award,
or (2) the Fair Market Value of such Shares on Participant's Termination
Date, PROVIDED, such right of repurchase terminates when the Company's
securities become publicly traded; or (B) with respect to Shares that are not
"Vested" (as
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defined in the Award Agreement), at the original Purchase Price under the
Award, PROVIDED, that the right to repurchase at the original Purchase Price
lapses at the rate of at least 20% per year over 5 years from the date the
Shares were purchased, and if the right to repurchase is assignable, the
assignee must pay the Company, upon assignment of the right to repurchase,
cash equal to the excess of the Fair Market Value of the Shares over the
original Purchase Price.
13. CERTIFICATES. All certificates for Shares or other
securities delivered under the Plan shall be subject to such stock transfer
orders, legends and other restrictions as the Committee may deem necessary or
advisable, including restrictions under any applicable federal, state or
foreign securities law, or any rules, regulations and other requirements of
the SEC or any stock exchange or automated quotation system upon which the
Shares may be listed.
14. ESCROW; PLEDGE OF SHARES. To enforce any restrictions
on a Holder's Shares, the Committee may require the Holder to deposit all
certificates, together with stock powers or other instruments of transfer
approved by the Committee, appropriately endorsed in blank, with the Company
or an agent designated by the Company to hold in escrow until such
restrictions have lapsed or terminated, and the Committee may cause a legend
or legends referencing such restrictions to be placed on the certificates.
Any Participant who is permitted to execute a promissory note as partial or
full consideration for the purchase of Shares under the Plan shall be
required to pledge and deposit with the Company all or part of the Shares so
purchased as collateral to secure the payment of Participant's obligation to
the Company under the promissory note; PROVIDED, HOWEVER, that the Committee
may require or accept other or additional forms of collateral to secure the
payment of such obligation and, in any event, the Company shall have full
recourse against the Participant under the promissory note notwithstanding
any pledge of the Participant's Shares or other collateral. In connection
with any pledge of the Shares, Participant shall be required to execute and
deliver a written pledge agreement in such form as the Committee shall from
time to time approve. The Shares purchased with the promissory note may be
released from the pledge on a pro-rata basis as the promissory note is paid.
15. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at
any time or from time to time, authorize the Company, with the consent of the
respective Holders, to issue new Awards in exchange for the surrender and
cancellation of any or all outstanding Awards. The Committee may at any time
buy from a Participant an Award previously granted with payment in cash,
Shares (including Restricted Stock) or other consideration, based on such
terms and conditions as the Committee and the Holder shall agree.
16. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An
Award shall not be effective unless such Award is in compliance with all
applicable federal and state securities laws, rules and regulations of any
governmental body, and the requirements of any stock exchange or automated
quotation system upon which the Shares may then be listed, as they are in
effect on the date of grant of the Award and also on the date of exercise or
other issuance. Notwithstanding any other provision in the Plan, the Company
shall have no obligation to issue or deliver certificates for Shares under
the Plan prior to (a) obtaining any approvals from governmental agencies that
the Company determines are necessary or advisable, and/or (b) completion of
any registration or other qualification of such shares under any state or
federal law or ruling of any governmental body that the Company determines to
be necessary or advisable. The Company shall be under no obligation
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to register the Shares with the SEC or to effect compliance with the
registration, qualification or listing requirements of any state securities
laws, stock exchange or automated quotation system, and the Company shall
have no liability for any inability or failure to do so.
17. NO OBLIGATION TO EMPLOY. Nothing in the Plan or any
Award granted under the Plan shall confer or be deemed to confer on any
Participant any right to continue in the employ of, or other relationship
with, the Company or any Parent, Subsidiary or Affiliate of the Company or
limit in any way the right of the Company or any Parent, Subsidiary or
Affiliate of the Company to terminate Participant's employment or other
relationship at any time, with or without cause.
18. CORPORATE TRANSACTIONS.
18.1 ASSUMPTION OR REPLACEMENT OF AWARDS BY
SUCCESSOR. In the event of (a) a merger or consolidation in which the Company
is not the surviving corporation (other than a merger or consolidation with a
wholly-owned subsidiary, a reincorporation of the Company in a different
jurisdiction, or other transaction in which there is no substantial change in
the stockholders of the Company and the Awards granted under the Plan are
assumed or replaced by the successor corporation, which assumption shall be
binding on all Holders), (b) a dissolution or liquidation of the Company, (c)
the sale of substantially all of the assets of the Company, or (d) any other
transaction which qualifies as a "corporate transaction" under Section 424(a)
of the Code wherein the stockholders of the Company give up all of their
equity interest in the Company (EXCEPT for the acquisition, sale or transfer
of all or substantially all of the outstanding shares of the Company), any or
all outstanding Awards may be assumed or replaced by the successor
corporation, which assumption or replacement shall be binding on all Holders.
In the alternative, the successor corporation may substitute equivalent
Awards or provide substantially similar consideration to Holders as was
provided to stockholders (after taking into account the existing provisions
of the Awards). The successor corporation may also issue, in place of
outstanding Shares of the Company held by the Holder, substantially similar
shares or other property subject repurchase restrictions no less favorable to
the Holder.
18.2 EXPIRATION OF OPTIONS. In the event such
successor corporation, if any, refuses to assume or substitute the Options,
as provided above, pursuant to a transaction described in Subsection 18.1(a)
above, such Options shall expire on such transaction at such time and on such
conditions as the Board shall determine. In the event such successor
corporation, if any, refuses to assume or substitute the Options as provided
above, pursuant to a transaction described in Subsections 18.1(b), (c) or (d)
above, or there is no successor corporation, and if the Company ceases to
exist as a separate corporate entity, then, notwithstanding any contrary
terms in the Award Agreement, the Options shall expire on a date at least
twenty (20) days after the Board gives written notice to Holders specifying
the terms and conditions of such termination.
18.3 OTHER TREATMENT OF AWARDS. Subject to any
greater rights granted to Holders under the foregoing provisions of this
Section 18, in the event of the occurrence of any transaction described in
Section 18.1, any outstanding Awards shall be treated as provided in the
applicable agreement or plan of merger, consolidation, dissolution,
liquidation, sale of assets or other "corporate transaction."
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18.4 ASSUMPTION OF AWARDS BY THE COMPANY. The
Company, from time to time, also may substitute or assume outstanding awards
granted by another company, whether in connection with an acquisition of such
other company or otherwise, by either (a) granting an Award under the Plan in
substitution of such other company's award, or (b) assuming such award as if
it had been granted under the Plan if the terms of such assumed award could
be applied to an Award granted under the Plan. Such substitution or
assumption shall be permissible if the holder of the substituted or assumed
award would have been eligible to be granted an Award under the Plan if the
other company had applied the rules of the Plan to such grant. In the event
the Company assumes an award granted by another company, the terms and
conditions of such award shall remain unchanged (EXCEPT that the exercise
price and the number and nature of Shares issuable upon exercise of any such
option will be adjusted appropriately pursuant to Section 424(a) of the
Code). In the event the Company elects to grant a new Option rather than
assuming an existing option, such new Option may be granted with a similarly
adjusted Exercise Price.
19. ADOPTION AND STOCKHOLDER APPROVAL. The Plan shall
become effective on the date that it is adopted by the Board (the "EFFECTIVE
DATE"). The Plan shall be approved by the stockholders of the Company
(excluding Shares issued pursuant to this Plan), consistent with applicable
laws, within twelve months before or after the Effective Date. Upon the
Effective Date, the Board may grant Awards pursuant to the Plan; PROVIDED,
HOWEVER, that: (a) no Option may be exercised prior to initial stockholder
approval of the Plan; (b) no Option granted pursuant to an increase in the
number of Shares approved by the Board shall be exercised prior to the time
such increase has been approved by the stockholders of the Company; and (c)
in the event that stockholder approval is not obtained within the time period
provided herein, all Awards granted hereunder shall be canceled, any Shares
issued pursuant to any Award shall be canceled and any purchase of Shares
hereunder shall be rescinded.
20. TERM OF PLAN. The Plan will terminate ten (10) years
from the Effective Date or, if earlier, the date of stockholder approval.
21. AMENDMENT OR TERMINATION OF PLAN. The Board may at
any time terminate or amend the Plan in any respect, including without
limitation amendment of any form of Award Agreement or instrument to be
executed pursuant to the Plan; PROVIDED, HOWEVER, that the Board shall not,
without the approval of the stockholders of the Company, amend the Plan in
any manner that requires such stockholder approval pursuant to the Code or
the regulations promulgated thereunder as such provisions apply to ISO plans.
22. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of
the Plan by the Board, the submission of the Plan to the stockholders of the
Company for approval, nor any provision of the Plan shall be construed as
creating any limitations on the power of the Board to adopt such additional
compensation arrangements as it may deem desirable, including, without
limitation, the granting of stock options and bonuses otherwise than under
the Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.
23. GOVERNING LAW. The Plan and all agreements, documents
and instruments entered into pursuant to the Plan shall be governed by and
construed in accordance with the internal laws of the State of California,
excluding that body of law pertaining to conflict of laws.
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24. DEFINITIONS. As used in the Plan, the following terms
shall have the following meanings:
"AFFILIATE" means any corporation that directly, or
indirectly through one or more intermediaries, controls or is controlled by,
or is under common control with, another corporation, where "control"
(including the terms "controlled by" and "under common control with") means
the possession, direct or indirect, of the power to cause the direction of
the management and policies of the corporation, whether through the ownership
of voting securities, by contract or otherwise.
"AWARD" means any award under the Plan, including any
Option, Restricted Stock or Stock Bonus.
"AWARD AGREEMENT" means, with respect to each Award,
the signed written agreement between the Company and the Participant setting
forth the terms and conditions of the Award.
"BOARD" means the Board of Directors of the Company.
"CODE" means the Internal Revenue Code of 1986, as
amended.
"COMMITTEE" means the committee appointed by the
Board to administer the Plan, or if no committee is appointed, the Board.
"COMPANY" means Macromedia, Inc., a corporation
organized under the laws of the State of Delaware, or any successor
corporation.
"DISABILITY" means a disability, whether temporary or
permanent, partial or total, within the meaning of Section 22(e)(3) of the
Code, as determined by the Committee.
"EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.
"EXERCISE PRICE" means the price at which a holder of
an Option may purchase the Shares issuable upon exercise of the Option.
"FAIR MARKET VALUE" means, as of any date, the value
of a share of the Company's Common Stock determined as follows:
(a) if such Common Stock is then quoted on the NASDAQ
National Market System, its last reported sale price on
the NASDAQ National Market System or, if no such
reported sale takes place on such date, the average of
the closing bid and asked prices;
(b) if such Common Stock is publicly traded and is then
listed on a national securities exchange, the last
reported sale
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price or, if no such reported sale takes place on such
date, the average of the closing bid and asked prices on
the principal national securities exchange on which the
Common Stock is listed or admitted to trading;
(c) if such Common Stock is publicly traded but is not
quoted on the NASDAQ National Market System nor listed
or admitted to trading on a national securities
exchange, the average of the closing bid and asked
prices on such date, as reported by THE WALL STREET
JOURNAL, for the over-the-counter market; or
(d) if none of the foregoing is applicable, by the Board of
Directors of the Company in good faith.
"FAMILY MEMBER" includes any of the following:
(a) child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law of the Participant, including any such person with such
relationship to the Participant by adoption;
(b) any person (other than a tenant or
employee) sharing the Participant's household;
(c) a trust in which the persons in (a)
and (b) have more than fifty percent of the beneficial interest;
(d) a foundation in which the persons in
(a) and (b) or the Participant control the management of assets; or
(e) any other entity in which the persons
in (a) and (b) or the Participant own more than fifty percent of the voting
interest.
"HOLDER" means the following person to the extent
such person has or controls an interest in an Award at the time in question:
(a) the Participant; (b) the Participant's guardian or legal representative;
(c) a Family Member who is a transferee of an Award from the Participant in a
Permitted Transfer, and (d) the authorized legal representative of such
person's heirs or legatees after such person's death.
"INSIDER" means an officer or director of the Company
or any other person whose transactions in the Company's Common Stock are
subject to Section 16 of the Exchange Act.
"OPTION" means an award of an option to purchase
Shares pursuant to Section 5.
"OUTSIDE DIRECTOR" shall mean any director who is not
(i) a current employee of the Company or any Parent, Subsidiary or Affiliate
of the Company, (ii) a former employee of
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the Company or any Parent, Subsidiary or Affiliate of the Company who is
receiving compensation for prior services (other than benefits under a
tax-qualified pension plan), (iii) a current or former officer of the Company
or any Parent, Subsidiary or Affiliate of the Company or (iv) currently
receiving compensation for personal services in any capacity, other than as a
director, from the Company or any Parent, Subsidiary or Affiliate of the
Company; provided, however, that at such time as the term "Outside Director",
as used in Section 162(m) is defined in regulations promulgated under Section
162(m) of the Code, "Outside Director" shall have the meaning set forth in
such regulations, as amended from time to time and as interpreted by the
Internal Revenue Service.
"PARENT" means any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company, if at
the time of the granting of an Award under the Plan, each of such
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
"PARTICIPANT" means a person who receives an Award
under the Plan.
"PERMITTED TRANSFER" means, as authorized by this
Plan and the Committee in an NQSO Option, any transfer effected by the
Participant during the Participant's lifetime of an interest in such Option
but only such transfers which are by gift or domestic relations order. A
Permitted Transfer does not include any transfer for value and neither of the
following are transfers for value: (a) a transfer of under a domestic
relations order in settlement of marital property rights or (b) a transfer to
an entity in which more than fifty percent of the voting interests are owned
by Family Members or the Participant in exchange for an interest in that
entity.
"PLAN" means this Macromedia, Inc. 1992 Equity
Incentive Plan, as amended from time to time.
"RESTRICTED STOCK AWARD" means an award of Shares
pursuant to Section 6.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as
amended.
"SHARES" means shares of the Company's Common Stock,
$0.001 par value, reserved for issuance under the Plan, as adjusted pursuant
to Sections 2 and 15, and any successor security.
"STOCK BONUS" means an award of Shares, or cash in
lieu of Shares, pursuant to Section 7.
"SUBSIDIARY" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company if,
at the time of granting of the Award, 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 such chain.
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"TERMINATION" or "TERMINATED" means, for purposes of
the Plan with respect to a Participant, that the Participant has ceased to
provide services as an employee, director, consultant, independent contractor
or adviser, to the Company or a Parent, Subsidiary or Affiliate of the
Company, except in the case of sick leave, military leave, or any other leave
of absence approved by the Committee, PROVIDED, that such leave is for a
period of not more than ninety (90) days, or reinstatement upon the
expiration of such leave is guaranteed by contract or statute. The Committee
shall have sole discretion to determine whether a Participant has ceased to
provide services and the effective date on which the Participant ceased to
provide services (the "TERMINATION DATE").
