EXHIBIT 10.3
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CADIZ INC.
AMENDED AND RESTATED
1998 NON-QUALIFIED STOCK OPTION PLAN
1. PURPOSE
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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 and its
Subsidiaries and Affiliates, by offering them an opportunity to
participate in the Company's future performance through awards of
Options.
It is intended that Options issued pursuant to this Plan
shall constitute non-qualified stock options ("NQSOs") as
described in Treasury Regulation Section 1.83-7 to which Section
421 does not apply.
Capitalized terms not defined in the text are defined in
Section 20.
2. SHARES SUBJECT TO THE PLAN
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2.1 NUMBER OF SHARES AVAILABLE. Subject to Sections 2.2
and 14, the total number of Shares reserved and available for
grant and issuance pursuant to the Plan shall be 792,500 Shares;
provided, however, that the total number of options granted under
the Plan, when combined with the total number of options granted
(and not subsequently cancelled) by the Company under its 1996
Stock Option Plan, shall at no time exceed 4,000,000. Subject to
Sections 2.2 and 14, Shares reserved for issuance pursuant to
Options granted under this Plan shall again be available for
grant and issuance, in connection with future Options 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, or (b) are subject to an
Option that otherwise terminates without such Shares being issued
and for which the participant did not receive any benefits of
ownership.
2.2 ADJUSTMENT OF SHARES. In the event that the number of
outstanding shares of the Company's Common Stock 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, and (b) the Exercise Prices of and
number of Shares subject to outstanding Options, 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.
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3. ELIGIBILITY
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3.1 ELIGIBILITY OF EMPLOYEES, CONSULTANTS AND INDEPENDENT
CONTRACTORS; NON-ELIGIBILITY OF INSIDERS. NQSOs may be granted
to employees, consultants, independent contractors and advisers
of the Company or any Subsidiary or Affiliate of the Company
(other than Insiders, who shall not be eligible to receive
Options under the Plan); provided, however, that such
consultants, contractors and advisers render bona fide services
not in connection with the offer and sale of securities in a
capital-raising transaction.
4. ADMINISTRATION.
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4.1 COMMITTEE AUTHORITY. The Plan shall be administered by
the Committee or the Board acting as the Committee. Subject to
the 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 Option
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 Options;
(d) determine the form and terms of Options;
(e) determine the number of Shares or other
consideration subject to Options;
(f) determine whether Options will be granted
singly, in combination or in tandem with, in replacement
of, or as alternatives to, other Options under the Plan
or any other incentive or compensation plan of the
Company or any Subsidiary or Affiliate of the Company;
(g) grant waivers of Plan or Option conditions;
(h) determine the vesting, exercisability and
payment of Options and to accelerate the vesting and/or
exercisability of Options, as provided herein;
(i) correct, any defect, supply any omission, or
reconcile any inconsistency in the Plan, any Option or
any Option Agreement;
(j) determine whether an Option has been earned;
and
(k) make all other determinations necessary or
advisable for the administration of the Plan.
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4.2 COMMITTEE DISCRETION. Any determination permitted to
be made by the Committee under the Plan with respect to any
Option shall be made in its sole discretion at the time of grant
of the Option or, unless in contravention of any express term of
the Plan or Option, at any later time, and such determination
shall be final and binding on the Company and all persons having
an interest in any Option under the Plan.
4.3 COMPOSITION OF COMMITTEE. The Committee shall be
comprised of either (i) at least two members of the Board; or
(ii) the Board acting as the Committee.
5. GRANT AND EXERCISE OF OPTIONS
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5.1 GRANT OF OPTIONS. Except as otherwise limited herein,
the Committee may grant Options to eligible persons pursuant to
this Section 5.1 and shall determine 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, subject to the following:
5.1.1 FORM OF OPTION GRANT. Each Option granted shall
be evidenced by an Option Agreement, which shall expressly
identify the Option as an NQSO ("Stock Option Agreement"), and be
in such form and contain such provisions (which need not be the
same for each Participant receiving an Option) 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. The
Committee may in its discretion include in any NQSO granted under
the Plan a condition that the Participant shall agree to remain
in the employ of, and to render services to, the Company or any
of its Subsidiaries for a period of time (specified in the
agreement) following the date the NQSO is granted.
5.1.2 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. The Stock Option Agreement and a copy of
the Plan will be delivered to the Participant within a reasonable
time after the granting of such Option.
5.1.3 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 ten
(10) years from the date the Option is granted.
5.1.4 EXERCISE PRICE. The Exercise Price shall be
determined by the Committee when an Option is granted and may be
not less than the greater of (i) 100% of the Fair Market Value of
the Shares on the date of grant, or (ii) the par value of the
Shares. Payment for the Shares purchased may be made in
accordance with Section 6 of the Plan.
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5.1.5 METHOD OF EXERCISE. Options may be exercised only
by delivery 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 Participant
receiving an Option pursuant to the Plan), stating the number of
Shares being purchased, the restrictions imposed on the Shares,
if any, and such representations and agreements regarding
Participant's investment intent, access to information and other
matters, 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.
5.1.6 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 the Participant may
exercise such Participant's Options, only to the extent
that such Options would have been exercisable upon the
Termination Date, no later than ninty (90) days after the
Termination Date, but in any event, no later than the
expiration date of the Options.
(b) If the Participant is terminated because of
death or Disability, then the Participant's Options may
be exercised, only to the extent that such Options would
have been exercisable by Participant on the Termination
Date (whether through prior vesting or accelerated
vesting pursuant to Section 5.2.3 of the Plan), and must
be exercised by Participant (or Participant's legal
representative or authorized assignee) no later than one
hundred eighty (180) days after the Termination Date, but
in any event no later than the expiration date of the
Options.
5.1.7 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 Participant from exercising the
Option for the full number of Shares for which it is then
exercisable.
5.1.8 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 a
Participant, impair any of such Participant's rights under any
Option previously granted.
5.2 ACCELERATED VESTING.
5.2.1 The Committee shall have the authority to
accelerate the exercisability of Options granted pursuant to the
terms of this Plan.
5.2.2 Notwithstanding anything herein to the contrary,
if a Change in Control of the Company occurs or if the Committee
determines in its sole discretion that an Acceleration Event has
occurred, then all Options shall become fully exercisable as of
the date such Change in Control occurred or the Committee
determines that an Acceleration Event has occurred.
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5.2.3 Notwithstanding anything herein to the contrary,
any Options granted under the Plan, the vesting of which are
conditioned solely upon the passage of time and continued
employment of the Option holder, shall be accelerated and shall
be immediately exercisable upon the death or disability of such
Option holder (subject only to the limitations on exercise set
forth in Section 5.1.6 of the Plan).
6. PAYMENT FOR SHARE PURCHASES
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6.1 PAYMENT. Payment for Shares purchased pursuant to the
Plan may be made in cash (by check or equivalent) or, where
expressly approved by the Committee and permitted by law by:
(a) by cancellation of indebtedness of the Company
to the Participant;
(b) by surrender of shares of the Company's Common
Stock that either: (1) have been owned by Participant for
more than six (6) months and have been paid for within
the meaning of Rule 144 of the Securities Act; or were
obtained by Participant in the public market; and, (2)
are clear of all liens, claims, encumbrances or security
interests;
(c) by waiver of compensation due or accrued to
Participant for services rendered;
(d) provided that a public market for the Company's
stock exists and subject to the ability of the
Participant to sell Shares in compliance with applicable
securities laws:
(i) through a "same day sale" commitment from the
Participant and a broker-dealer that is a member of the
National Association of Securities Dealers (an "NASD
Dealer") whereby the Participant irrevocably elects to
exercise the Option and to sell a portion of the Shares
so purchased in order to pay 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
(ii) through a "margin" commitment from the
Participant and an NASD Dealer whereby Participant
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
(e) by any combination of the foregoing.
Notwithstanding the foregoing, if the payment for Shares
purchased pursuant to the Plan with respect to the exercise of any
Options by a Participant who has a deferral election in effect
under the Company's Deferred Compensation Plan (the "Deferral
Plan") is paid solely by surrendering Common Stock (which meets
the requirements set forth in the Deferral Plan), the Company
shall deliver to the trustee of the trust, if any, established
under the Deferral Plan, a certificate or certificates
representing such number of shares of
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Common Stock determined by dividing (i) the excess of
(A) the Fair Market Value of the shares of Common Stock purchased
pursuant to such Option exercise, over (B) the aggregate exercise
price of the shares of Common Stock purchased, by (ii) the Fair
Market Value of one share of Common Stock. In addition, as soon
as practicable after receipt of the shares of Common Stock representing
the Option exercise price, the Company shall deliver to the
Participant a certificate or certificates representing shares with
a Fair Market Value equal to the aggregate option exercise price
paid. For purposes of the foregoing, the exercise of any Option
will be deemed to have occurred at 5:00 p.m. Pacific Standard time
on the immediately preceding business day and Fair Market Value shall
be determined as of such time.
7. WITHHOLDING TAXES
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7.1 TAX WITHHOLDING. The Company may withhold, at the election
of the Participant, from Common Stock to be issued or cash to be paid
under the Plan, the number of shares of Common Stock having a Fair
Market Value equal to, or cash in the amount of, or a combination of
shares and cash equal to, the amount of tax required by any governmental
authority to be withheld to cover any applicable withholding and
employment taxes; provided, however, that in the event a deferral
election is in effect with respect to the shares of Common Stock
deliverable upon exercise of an Option, then the Participant may elect
to have any such withholding made from the Common Stock tendered to
exercise such Option. Alternatively, a Participant may pay to the
Company the amount of cash required to be withheld in lieu of any
withholding of distribution under the Plan.
8. PRIVILEGES OF STOCK OWNERSHIP
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8.1 VOTING AND DIVIDENDS. No Participant shall have any of
the rights of a stockholder with respect to any Shares until the
Shares are issued to the Participant. After Shares are issued to
the Participant, the Participant 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.
8.2 FINANCIAL STATEMENTS. The Company shall provide
financial statements to each Participant annually during the
period such Participant has Options outstanding, provided,
however, that the Company shall not be required to provide such
financial statements to Participants whose services in connection
with the Company assure them access to equivalent information.
9. TRANSFERABILITY
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Options granted under the Plan, and any interest therein,
shall not be transferable or assignable by Participant, and may
not be made subject to execution, attachment or similar process,
otherwise than by will or by the laws of descent and distribution
or as consistent with the specific Plan and Option Agreement
provisions relating thereto. During the lifetime of the
Participant, an Option shall be exercisable only by the
Participant, and any elections with respect to an Option, may be
made only by the Participant.
10. CERTIFICATES
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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
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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.
11. EXCHANGE AND BUYOUT OF OPTIONS
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The Committee may, at any time or from time to time,
authorize the Company, with the consent of the respective
Participants, to issue new Options in exchange for the surrender
and cancellation of any or all outstanding Options. The Committee
may at any time buy from a Participant an Option previously
granted with payment in cash, Shares or other consideration,
based on such terms and conditions as the Committee and the
Participant shall agree.
12. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE
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An Option shall not be effective unless such Option 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 Option 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 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.
13. NO OBLIGATION TO EMPLOY
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Nothing in the Plan or any Option granted under the Plan
shall confer or be deemed to confer on any Participant any right
to continue in the employ of, or to continue any other
relationship with, the Company, or any Subsidiary or Affiliate
of the Company or limit in any way the right of the Company or
any Subsidiary or Affiliate of the Company to terminate
Participant's employment or other relationship at any time, with
or without cause.
14. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE
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The existence of outstanding Options shall not affect in any
way the right or power of the Company or its stockholders to make
or authorize all adjustments, recapitalizations, reorganizations
or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stock
ahead of or affecting the Common Stock or the rights thereof, or
the dissolution or liquidation of the Company, or any other
corporate act or proceeding, whether of a similar character or
otherwise.
If the Company shall effect a subdivision or consolidation
of shares or other capital readjustment, the payment of a stock
dividend, or other increase or reduction of the number of shares
of its Common Stock outstanding, without receiving compensation
therefor in money, services or property, then (i) the number,
class, and per share price of Shares subject to outstanding
Options hereunder shall be appropriately adjusted in such a
manner as to entitle a
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Participant to receive upon exercise thereof (and, if relevant,
for the same aggregate cash consideration), the same total number
and class of shares as such Participant would have received had
such Participant exercised such Option in full immediately prior
to such event; and (ii) the number and class of shares with
respect to which Options may be granted under the Plan shall be
adjusted by substituting for the total number of shares of Common
Stock then reserved that number and class of shares of stock that
would have been received by the owner of an equal number of
outstanding shares of Common Stock as the result of the event
requiring the adjustment.
After a merger of one or more corporations into the Company,
or after a consolidation of the Company and one or more
corporations in which the Company shall be the surviving
corporation, each holder of an outstanding Option shall, at no
additional cost, be entitled to receive upon exercise of such
Option (subject to any required action by stockholders of the
Company) in, lieu of the number of Shares as to which such Option
shall then be so exercisable, the number and class of shares of
stock or other securities to which such holder would have been
entitled pursuant to the terms of the agreement of merger or
consolidation if, immediately prior to such merger or
consolidation, such holder had been the holder of record of a
number of shares of Common Stock equal to the number of shares as
to which such Option shall be so exercised.
If the Company is merged into or consolidated with another
corporation under circumstances where the Company is not the
surviving corporation, or if the Company is liquidated, or sells
or otherwise disposes of substantially all its assets to another
corporation while unexercised Options remain outstanding under
the Plan, (i) subject to the provisions of clause (ii) below,
after the effective date of such merger, consolidation or sale,
as the case may be, each holder of an outstanding Option shall be
entitled to receive upon exercise of such Option in lieu of
shares of Common Stock, shares of such stock or other securities,
cash or property as the holders of shares of Common Stock
received pursuant to the terms of the merger, consolidation or
sale; or (ii) all outstanding Options may be canceled by the
Board as of the effective date of any such merger, consolidation,
liquidation or sale provided that: (x) notice of such
cancellation shall be given to each holder of an Option, and (y)
each holder of an Option shall have the right to exercise such
Option to the extent that the same is then exercisable or, if the
Board shall have accelerated the time for exercise of all
unexercised and unexpired Options, in full during the 30-day
period preceding the effective date of such merger,
consolidation, liquidation or sale.
Except as expressly provided above, the issue by the Company
of shares of stock of any class, securities convertible into
shares of stock of any class, for cash, property or services,
either upon direct sale or upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or
obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of Shares then
subject to outstanding Options.
15. ADOPTION
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The Plan shall become effective on the date that it is
adopted by the Board (the "Effective Date").
16. TERM OF PLAN
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The Plan will terminate ten (10) years from the Effective Date.
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17. AMENDMENT OR TERMINATION OF PLAN
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The Board may at any time terminate or amend the Plan in any
respect, including without limitation amendment of any form of
Option Agreement or instrument to be executed pursuant to the
Plan; provided, however, that no termination or amendment to this
Plan may, without the consent of the holder of an outstanding
Option, terminate such Option or materially adversely affect the
rights of the holder under such Option.
18. NONEXCLUSIVITY OF THE PLAN
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Neither the adoption of the Plan by the Board 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.
19. GOVERNING LAW
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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.
20. DEFINITIONS
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As used in the Plan, the following terms shall have the
following meanings:
"ACCELERATION EVENT" means but is not limited to, any Change
of Control of the Company or other event determined in the
discretion of the Committee.
"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.
"BOARD" means the Board of Directors of the Company.
"CHANGE IN CONTROL" means the occurrence of any of the
following events:
(a) when the Company acquires actual knowledge that any
person (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the beneficial owner (as defined in
Rule 13d-3 of the Exchange Act) directly or indirectly, of
securities of the Company representing 25% or more of the
combined voting power of the Company's then-outstanding
securities;
(b) upon the first purchase of Common Stock pursuant to a
tender or exchange offer (other than a tender or exchange offer
made by the Company);
(c) upon the approval by the Company's shareholders of: (i)
a merger or consolidation of the Company with or into another
corporation, which does not result in any capital reorganization
or reclassification or other change in the Company's then-
outstanding shares of
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Common Stock), (ii) a sale or disposition of all or substantially
all of the Company's assets, or (iii) a plan of liquidation or
dissolution of the Company;
(d) if during any period of two consecutive years, the
individuals who at the beginning of such period constitute the
Board of Directors of the Company cease for any reason to
constitute at least a majority thereof, unless the election, or
the nomination for election by the Company's shareholders, of
each new director is approved by a vote of at least two-thirds of
the directors then still in office who were directors at the
beginning of the period; or
(e) if the Board of Directors or any designated committee
determines, in its sole discretion, that any person (such as that
term is used in Sections 13(d) and 14(d) of the Exchange Act)
directly or indirectly exercises a controlling influence over the
management or policies 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 Cadiz 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, but in no event shall such price be less than the par
value of the Common Stock.
"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 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
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 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.
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"INSIDER" means an officer or director of the Company or
other person whose transactions in the Company's Common Stock are
subject to Section 16 of the Exchange Act.
"OPTION" means an option to purchase Shares of Common Stock
of the Company pursuant to Section 5.
"OPTION AGREEMENT" means, with respect to each Option, the
signed written agreement between the Company and the Participant
setting forth the terms and conditions of the Option.
"PARTICIPANT" means a person who receives an Option under
the Plan.
"PLAN" means this Cadiz Inc., 1998 Non-Qualified Stock
Option Plan, as amended from time to time.
"SECURITIES ACT" means the Securities Act of 1933, as
amended.
"SHARES" means shares of the Company's Common Stock, $0.01
par value, reserved for issuance under the Plan, as adjusted
pursuant to Sections 2 and 14, and any security issued in respect
thereto or in replacement therefor.
"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 Option, 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.
"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 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").
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TABLE OF CONTENTS
1. PURPOSE. . . . . . . . . . . . . . . . . . . . . . . . . .1
2. SHARES SUBJECT TO THE PLAN. . . . . . . . . . . . . . . . .1
2.1 Number of Shares Available. . . . . . . . . . . . . . 1
2.2 Adjustment of Shares. . . . . . . . . . . . . . . . . 1
3. ELIGIBILITY. . . . . . . . . . . . . . . . . . . . . . . . 2
3.1 Eligibility of Employees, Consultants
and Independent Contractors;
Non-Eligibility of Insiders. . . . . . . . . . . . . .2
4. ADMINISTRATION. . . . . . . . . . . . . . . . . . . . . . .2
4.1 Committee Authority. . . . . . . . . . . . . . . . . .2
4.2 Committee Discretion . . . . . . . . . . . . . . . . .3
4.3 Composition of Committee . . . . . . . . . . . . . . .3
5. GRANT AND EXERCISE OF OPTIONS. . . . . . . . . . . . . . . 3
5.1 Grant of Options. . . . . . . . . . . . . . . . . . . 3
5.1.1Form of Option Grant. . . . . . . . . . . . . . .3
5.1.2Date of Grant . . . . . . . . . . . . . . . . . .3
5.1.3Exercise Period. . . . . . . . . . . . . . . . . 3
5.1.4Exercise Price. . . . . . . . . . . . . . . . . .3
5.1.5Method of Exercise. . . . . . . . . . . . . . . .4
5.1.6Termination. . . . . . . . . . . . . . . . . . . 4
5.1.7Limitations on Exercise. . . . . . . . . . . . . 4
5.1.8Modification, Extension or Renewal. . . . . . . .4
5.2 Accelerated Vesting. . . . . . . . . . . . . . . . . .4
6. PAYMENT FOR SHARE PURCHASES. . . . . . . . . . . . . . . . 5
6.1 Payment. . . . . . . . . . . . . . . . . . . . . . . .5
7. TAX WITHHOLDING. . . . . . . . . . . . . . . . . . . . . . 6
7.1 Withholding Generally. . . . . . . . . . . . . . . . .6
8. PRIVILEGES OF STOCK OWNERSHIP. . . . . . . . . . . . . . . 6
8.1 Voting and Dividends. . . . . . . . . . . . . . . . . 6
8.2 Financial Statements. . . . . . . . . . . . . . . . . 6
9. TRANSFERABILITY. . . . . . . . . . . . . . . . . . . . . . 6
10. CERTIFICATES. . . . . . . . . . . . . . . . . . . . . . . .6
11. EXCHANGE AND BUYOUT OF OPTIONS. . . . . . . . . . . . . . .7
12. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. . . . . . .7
13. NO OBLIGATION TO EMPLOY. . . . . . . . . . . . . . . . . . 7
14. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. . . . . . . . .7
15. ADOPTION. . . . . . . . . . . . . . . . . . . . . . . . . .8
16. TERM OF PLAN. . . . . . . . . . . . . . . . . . . . . . . .8
17. AMENDMENT OR TERMINATION OF PLAN. . . . . . . . . . . . . .9
18. NONEXCLUSIVITY OF THE PLAN. . . . . . . . . . . . . . . . .9
19. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . 9
20. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . 9