EXHIBIT 99.1
SBE, INC.
1998 NON-OFFICER STOCK OPTION PLAN
Adopted by the Board of Directors on June 15, 1998
2. Purposes.
(a) Eligible Option Recipients. The persons eligible to
receive Options are the non-officer Employees and Consultants of the
Company and its Affiliates.
(b) Available Options. The purpose of the Plan is to provide a
means by which eligible recipients of Options may be given an
opportunity to benefit from increases in value of the Common Stock
through the granting of Nonstatutory Stock Options.
(c) General Purpose. The Company, by means of the Plan, seeks
to retain the services of the group of persons eligible to receive
Options, to secure and retain the services of new members of this group
and to provide incentives for such persons to exert maximum efforts for
the success of the Company and its Affiliates.
3. Definitions.
(a) "Affiliate" means any parent corporation or subsidiary
corporation of the Company, whether now or hereafter existing, as those
terms are defined in Sections 424(e) and (f), respectively, of the
Code.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means a Committee appointed by the Board in
accordance with subsection 3(c).
(e) "Common Stock" means the common stock of the Company.
(f) "Company" means SBE, Inc., a Delaware corporation.
(g) "Consultant" means any person, including an advisor,
engaged by the Company or an Affiliate to render consulting or advisory
services and who is compensated for such services, provided that the
term "Consultant" shall not include a Director.
(h) "Continuous Service" means that the Optionholder's service
with the Company or an Affiliate, whether as an Employee, Director or
Consultant, is not interrupted or terminated. The Optionholder's
Continuous Service shall not be deemed to have terminated merely
because of a change in the capacity in which the Optionholder renders
service to the Company or an Affiliate as an Employee, Consultant or
Director or a change in the entity for which the Optionholder renders
such service, provided that there is no interruption or termination of
the Optionholder's Continuous Service. For example, a change in status
from an Employee of the Company to a Consultant of an Affiliate or a
Director of the Company will not constitute an interruption of
Continuous Service. The Board or the chief executive officer of the
Company, in that party's sole discretion, may determine whether
Continuous Service shall be considered interrupted in the case of any
leave of absence approved by that party, including sick leave, military
leave or any other personal leave.
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(i) "Director" means a member of the Board of Directors of the
Company.
(j) "Disability" means the permanent and total disability of a
person within the meaning of Section 22(e)(3) of the Code.
(k) "Employee" means any person employed by the Company or an
Affiliate. Mere service as a Director or payment of a director's fee
by the Company or an Affiliate shall not be sufficient to constitute
"employment" by the Company or an Affiliate.
(l) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(m) "Fair Market Value" means, as of any date, the value of the
Common Stock determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or traded on the Nasdaq National Market System or the
Nasdaq SmallCap Market, the Fair Market Value of a share of Common
Stock shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such exchange or market
(or the exchange or market with the greatest volume of trading in the
Common Stock) on the last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such other
source as the Board deems reliable.
(ii) In the absence of such markets for the Common Stock,
the Fair Market Value shall be determined in good faith by the Board.
(n) "Nonstatutory Stock Option" means an Option not intended to
qualify as an incentive stock option within the meaning of Section 422
of the Code and the regulations promulgated thereunder.
(o) "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder, and each other person who is an
officer within the meaning of Rule 4460(i)(1) of the National
Association of Securities Dealers, Inc. Manual or such other similar
rule, regulation or requirement applicable to the Company in connection
with the listing of the Common Stock for trading on an established
stock exchange or other market.
(p) "Option" means a Nonstatutory Stock Option granted pursuant
to the Plan.
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(q) "Option Agreement" means a written agreement between the
Company and an Optionholder evidencing the terms and conditions of an
individual Option grant. Each Option Agreement shall be subject to the
terms and conditions of the Plan.
(r) "Optionee" means a person to whom an Option is granted
pursuant to the Plan.
(s) "Optionholder" means a person who holds an outstanding
Option granted under the Plan, including (as applicable) the Optionee's
estate, person who acquired the right to exercise the Option by bequest
or inheritance, or person designated to exercise the option upon the
Optionee's death pursuant to subsection 6(d).
(t) "Plan" means this SBE, Inc. 1998 Non-Officer Stock Option
Plan.
(u) "Securities Act" means the Securities Act of 1933, as
amended.
4. Administration.
(a) Administration by Board. The Board will administer the
Plan unless and until the Board delegates administration to a
Committee, as provided in subsection 3(c).
(b) Powers of Board. The board shall have the power, subject
to, and within the limitations of, the express provisions of the Plan:
(i) To determine from time to time which of the persons
eligible under the Plan shall be granted Options; when and how each
Option shall be granted; the provisions of each Option granted (which
need not be identical), including the time or times when a person shall
be permitted to receive stock pursuant to an Option; and the number of
shares with respect to which an Option shall be granted to each such
person.
(ii) To construe and interpret the Plan and Options
granted under it, and to establish, amend and revoke rules and
regulations for its administration. The Board, in the exercise of this
power, may correct any defect, omission or inconsistency in the Plan or
in any Option Agreement, in a manner and to the extent it shall deem
necessary or expedient to make the Plan fully effective.
(iii) To amend the Plan or an Option as provided in Section
11.
(iv) Generally, to exercise such powers and to perform
such acts as the Board deems necessary or expedient to promote the best
interests of the Company which are not in conflict with the provisions
of the Plan.
(c) Delegation to Committee. The Board may delegate
administration of the Plan to a Committee or Committees of one or more
members of the Board, and the term "Committee" shall apply to any
person or persons to whom such authority has been delegated. If
administration is delegated to a Committee, the Committee shall have,
in connection with the administration of the Plan, the powers
theretofore possessed by the Board, including the power to delegate to
a subcommittee any of the administrative powers the Committee is
authorized to exercise (and references in this Plan to the Board shall
thereafter be to the Committee or subcommittee), subject, however, to
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such resolutions, not inconsistent with the provisions of the Plan, as
may be adopted from time to time by the Board. The Board may abolish
the Committee at any time and revest in the Board the administration of
the Plan.
5. Shares Subject to the Plan.
(a) Share Reserve. Subject to the provisions of Section 10
relating to adjustments upon changes in stock, the stock that may be
issued pursuant to Options shall not exceed in the aggregate three
hundred thousand (300,000) shares of Common Stock.
(b) Reversion of Shares to the Share Reserve. If any Option
shall for any reason expire or otherwise terminate, in whole or in
part, without having been exercised in full, the stock not acquired
under such Option shall revert to and again become available for
issuance under the Plan. If any Common Stock acquired pursuant to the
exercise of an Option shall for any reason be repurchased by the
Company under an unvested share repurchase option provided under the
Plan, the stock repurchased by the Company under such repurchase option
shall not revert to and again become available for issuance under the
Plan.
(c) Source of Shares. The stock subject to the Plan may be
unissued shares or reacquired shares, bought on the market or
otherwise.
6. Eligibility.
Options may be granted only to Employees or Consultants who are
not, at the time of such grants, (i) Directors or (ii) Officers.
7. Option Provisions.
Each Option shall be in such form and shall contain such terms
and conditions as the Board shall deem appropriate. The provisions of
separate Options need not be identical, but each Option shall include
(through incorporation of provisions hereof by reference in the Option
or otherwise) the substance of each of the following provisions:
(a) Term. No Option shall be exercisable after the expiration
of ten (10) years from the date it was granted, or such longer or
shorter period as may be provided in the Option Agreement.
(b) Exercise Price. The exercise price of each Option shall be
not less than eighty-five percent (85%) of the Fair Market Value of the
stock subject to the Option on the date the Option is granted.
Notwithstanding the foregoing, an Option may be granted with an
exercise price lower than that set forth in the preceding sentence if
such Option is granted pursuant to an assumption or substitution for
another option in a manner satisfying the provisions of Section 424(a)
of the Code.
(c) Consideration. The purchase price of stock acquired
pursuant to an Option shall be paid, to the extent permitted by
applicable statutes and regulations, either (i) in cash at the time the
Option is exercised or (ii) at the discretion of the Board, by delivery
to the Company of other Common Stock, according to a deferred payment
or other arrangement (which may include, without limiting the
generality of the foregoing, the use of other Common Stock) with the
Optionholder or in any other form of legal consideration that may be
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acceptable to the Board; provided, however, that at any time that the
Company is incorporated in Delaware, payment of the Common Stock's "par
value," as defined in the Delaware General Corporation Law, shall not
be made by deferred payment.
In the case of any deferred payment arrangement, interest shall
be compounded at least annually and shall be charged at the minimum
rate of interest necessary to avoid the treatment as interest, under
any applicable provisions of the Code, of any amounts other than
amounts stated to be interest under the deferred payment arrangement.
(d) Transferability. An Option shall be transferable except by
will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Optionee only by the Optionee.
Notwithstanding the foregoing provisions of this subsection 6(d), the
Optionee may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a third party who, in the event
of the death of the Optionee, shall thereafter be entitled to exercise
the Option.
(e) Vesting Generally. The total number of shares of Common
Stock subject to an Option may, but need not, vest and therefore become
exercisable in periodic installments which may, but need not, be equal.
The Option may be subject to such other terms and conditions on the
time or times when it may be exercised (which may be based on
performance or other criteria) as the Board may deem appropriate. The
vesting provisions of individual Options may vary. The provisions of
this subsection 6(e) are subject to any Option provisions governing the
minimum number of shares as to which an Option may be exercised.
(f) Termination of Continuous Service. In the event an
Optionee's Continuous Service terminates (other than upon the
Optionee's death or Disability), the Optionholder may exercise his or
her Option (to the extent that the Optionholder was entitled to
exercise it as of the date of termination) but only within such period
of time ending on the earlier of (i) the date three (3) months
following the termination of the Optionee's Continuous Service (or such
longer or shorter period specified in the Option Agreement), or (ii)
the expiration of the term of the Option as set forth in the Option
Agreement. If, after such termination, the Optionholder does not
exercise his or her Option within the time specified in the Option
Agreement, the Option shall terminate.
(g) Extension of Termination Date. An Optionee's Option
Agreement may also provide that if the exercise of the Option following
the termination of the Optionee's Continuous Service (other than upon
the Optionee's death or Disability) would be prohibited at any time
solely because the issuance of shares would violate the registration
requirements under the Securities Act, then the Option shall terminate
on the earlier of (i) the expiration of the term of the Option set
forth in subsection 6(a) or (ii) the expiration of a period of three
(3) months after the termination of the Optionee's Continuous Service
during which the exercise of the Option would not be in violation of
such registration requirements.
(h) Disability of Optionee. In the event an Optionee's
Continuous Service terminates as a result of the Optionee's Disability,
the Optionholder may exercise his or her Option (to the extent that the
Optionholder was entitled to exercise it as of the date of such
termination), but only within such period of time ending on the earlier
of (i) the date twelve (12) months following such termination (or such
longer or shorter period specified in the Option Agreement) or (ii) the
expiration of the term of the Option as set forth in the Option
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Agreement. If, after termination, the Optionholder does not exercise
his or her Option within the time specified herein, the Option shall
terminate.
(i) Death of Optionee. In the event (i) an Optionee's
Continuous Service terminates as a result of the Optionee's death or
(ii) the Optionee dies within the period (if any) specified in the
Option Agreement after the termination of the Optionee's Continuous
Service for a reason other than death, then the Option may be exercised
(to the extent the Optionholder was entitled to exercise the Option as
of the date of death) by the Optionholder but only within the period
ending on the earlier of (1) the date twelve (12) months following the
date of death (or such longer or shorter period specified in the Option
Agreement) or (2) the expiration of the term of such Option as set
forth in the Option Agreement. If, after death, the Option is not
exercised within the time specified herein, the Option shall terminate.
(j) Early Exercise. The Option may, but need not, include a
provision whereby the Optionholder may elect at any time before the
Optionee's Continuous Service terminates to exercise the Option as to
any part or all of the shares subject to the Option prior to the full
vesting of the Option. Any unvested shares so purchased may be subject
to an unvested share repurchase option in favor of the Company or to
any other restriction the Board determines to be appropriate.
8. Covenants of the Company.
(a) Availability of Shares. During the terms of the Options,
the Company shall keep available at all times the number of shares of
Common Stock required to satisfy such Options.
(b) Securities Law Compliance. The Company shall seek to
obtain from each regulatory commission or agency having jurisdiction
over the Plan such authority as may be required to grant Options and to
issue and sell shares of Common Stock upon exercise of the Options;
provided, however, that this undertaking shall not require the Company
to register under the Securities Act the Plan, any Option or any stock
issued or issuable pursuant to any such Option. If, after reasonable
efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority which counsel for the Company deems
necessary for the lawful issuance and sale of stock under the Plan, the
Company shall be relieved from any liability for failure to issue and
sell stock upon exercise of such Options unless and until such
authority is obtained.
9. Use of Proceeds from Stock.
Proceeds from the sale of stock pursuant to Options shall
constitute general funds of the Company.
10. Miscellaneous.
(a) Acceleration of Exercisability and Vesting. The Board
shall have the power to accelerate the time at which an Option may
first be exercised or the time during which an Option or any part
thereof will vest in accordance with the Plan, notwithstanding the
provisions in the Option stating the time at which it may first be
exercised or the time during which it will vest.
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(b) Stockholder Rights. No Optionholder shall be deemed to be
the holder of, or to have any of the rights of a holder with respect
to, any shares subject to such Option unless and until such
Optionholder has satisfied all requirements for exercise of the Option
pursuant to its terms.
(c) No Employment or other Service Rights. Nothing in the Plan
or any instrument executed or Option granted pursuant thereto shall
confer upon any Optionee or Optionholder any right to continue to serve
the Company or an Affiliate in the capacity in effect at the time the
Option was granted (or to serve the Company in any other capacity) or
shall affect the right of the Company or an Affiliate to terminate (i)
the employment of an Employee with or without notice and with or
without cause or (ii) the service of a Consultant pursuant to the terms
of such Consultant's agreement with the Company or an Affiliate.
(d) Investment Assurances. The Company may require an
Optionholder, as a condition of exercising or acquiring stock under any
Option, (i) to give written assurances satisfactory to the Company as
to the Optionholder's knowledge and experience in financial and
business matters and/or to employ a purchaser representative reasonably
satisfactory to the Company who is knowledgeable and experienced in
financial and business matters and that he or she is capable of
evaluating, alone or together with the purchaser representative, the
merits and risks of exercising the Option; and (ii) to give written
assurances satisfactory to the Company stating that the Optionholder is
acquiring the stock subject to the Option for the Optionholder's own
account and not with any present intention of selling or otherwise
distributing the stock. The foregoing requirements, and any assurances
given pursuant to such requirements, shall be inoperative if (iii) the
issuance of the shares upon the exercise or acquisition of stock under
the Option has been registered under a then currently effective
registration statement under the Securities Act or (iv) as to any
particular requirement, a determination is made by counsel for the
Company that such requirement need not be met in the circumstances
under the then applicable securities laws. The Company may, upon
advice of counsel to the Company, place legends on stock certificates
issued under the Plan as such counsel deems necessary or appropriate in
order to comply with applicable securities laws, including, but not
limited to, legends restricting the transfer of the stock.
(e) Withholding Obligations. To the extent provided by the
terms of an Option Agreement, the Optionholder may satisfy any federal,
state or local tax withholding obligation relating to the exercise or
acquisition of stock under an Option by any of the following means (in
addition to the Company's right to withhold from any compensation paid
to the Optionholder by the Company) or by a combination of such means:
(i) tendering a cash payment; (ii) authorizing the Company to withhold
shares from the shares of the Common Stock otherwise issuable to the
Optionholder as a result of the exercise or acquisition of stock under
the Option; or (iii) delivering to the Company owned and unencumbered
shares of the Common Stock.
(f) Repricing of Options. The Board or the Committee shall
have the authority to effect, at any time and from time to time (i) the
repricing of any outstanding Options under the Plan and/or (ii) with
the consent of the affected Optionholders, the cancellation of any
outstanding Options and the grant in substitution therefor of new
Options under the Plan covering the same or different numbers of shares
of Common Stock, but having an exercise price per share not less than
eighty-five percent (85%) of the Fair Market Value.
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11. Adjustments upon Changes in Stock.
(a) Capitalization Adjustments. If any change is made in the
stock subject to the Plan, or subject to any Option, without the
receipt of consideration by the Company (through merger, consolidation,
reorganization, recapitalization, reincorporation, stock dividend,
dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in
corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan will be appropriately adjusted
in the class(es) and maximum number of securities subject to the Plan
pursuant to subsection 4(a), and the outstanding Options will be
appropriately adjusted in the class(es) and number of securities and
price per share of stock subject to such outstanding Options. Such
adjustments shall be made by the Board, the determination of which
shall be final, binding and conclusive. (The conversion of any
convertible securities of the Company shall not be treated as a
transaction "without receipt of consideration" by the Company.)
(b) Change in Control. In the event of: (1) a dissolution,
liquidation or sale of substantially all of the assets of the Company;
(2) a merger or consolidation in which the Company is not the surviving
corporation; or (3) a reverse merger in which the Company is the
surviving corporation but the shares of the Company's common stock
outstanding immediately preceding the merger are converted by virtue of
the merger into other property, whether in the form of securities, cash
or otherwise, then to the extent permitted by applicable law: (i) any
surviving corporation shall assume any Options outstanding under the
Plan or shall substitute similar Options for those outstanding under
the Plan, or (ii) such Options shall continue in full force and effect.
In the event any surviving corporation refuses to assume or continue
such Options, or to substitute similar options for those outstanding
under the Plan, then, with respect to Options held by persons then
performing services as Employees, Directors or Consultants, the time
during which such Options may be exercised shall be accelerated and the
Options terminated if not exercised prior to such event.
12. Amendment of the Plan and Options.
(a) Amendment of Plan. The Board at any time, and from time to
time, may amend the Plan.
(b) Stockholder Approval. The Board may, in its sole
discretion, submit any amendment to the Plan for stockholder approval.
(c) No Impairment of Rights. Rights under any Option granted
before amendment of the Plan shall not be impaired by any amendment of
the Plan unless (i) the Company requests the consent of the
Optionholder and (ii) the Optionholder consents in writing.
(d) Amendment of Options. The Board at any time, and from time
to time, may amend the terms of any one or more Options; provided,
however, that the rights under any Option shall not be impaired by any
such amendment unless (i) the Company requests the consent of the
Optionholder and (ii) the Optionholder consents in writing.
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13. Termination or Suspension of the Plan.
(a) Plan Term. The Board may suspend or terminate the Plan at
any time. Unless sooner terminated, the Plan shall terminate on the
date ten (10) years from the date of adoption by the Board. No Options
may be granted under the Plan while the Plan is suspended or after it
is terminated.
(b) No Impairment of Rights. Rights and obligations under any
Option granted while the Plan is in effect shall not be impaired by
suspension or termination of the Plan, except with the written consent
of the Optionholder.
14. Effective Date of Plan.
The Plan shall become effective on the date it is adopted by the
Board.
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