CIRRUS LOGIC, INC.
1996 STOCK PLAN
1. Purposes of the Plan. The purposes of this Stock Plan are:
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. to attract and retain the best available personnel for positions of
substantial responsibility,
. to provide additional incentive to Employees and Consultants, and
. to promote the success of the Company's business.
Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time
of grant. Stock Purchase Rights may also be granted under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
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a) "Administrator" means the Board or any of its Committees as shall be
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administering the Plan, in accordance with Section 4 of the Plan.
b) "Applicable Laws" means the legal requirements relating to the
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administration of stock option plans under U. S. state corporate laws,
U.S. federal and state securities laws, the Code and the applicable
laws of any foreign country or jurisdiction where Options or Stock
Purchase Rights will be or are being granted under the Plan.
c) "Board" means the Board of Directors of the Company.
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d) "Code" means the Internal Revenue Code of 1986, as amended.
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e) "Committee" means a Committee appointed by the Board in accordance
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with Section 4 of the Plan.
f) "Common Stock" means the Common Stock of the Company.
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g) "Company" means Cirrus Logic, Inc., a California corporation.
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h) "Consultant" means any person, including an advisor, engaged by the
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Company or a Parent or Subsidiary to render services and who is
compensated for such services. The term "Consultant" shall not
include Directors who are paid only a director's fee by the Company or
who are not compensated by the Company for their services as
Directors.
i) "Continuous Status as an Employee or Consultant" means that the
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employment or consulting relationship with the Company, any Parent, or
Subsidiary, is not interrupted or terminated. Continuous Status as an
Employee or Consultant shall not be considered interrupted in the case
of (i) any leave of absence approved by the Company or (ii) transfers
between locations of the Company or between the Company, its Parent,
any Subsidiary, or any successor. A leave of absence approved by the
Company shall include sick leave, military leave, or any other
personal leave approved by an authorized representative of the
Company. For purposes of Incentive Stock Options, no such leave may
exceed ninety days, unless reemployment upon expiration of such leave
is guaranteed by statute or contract. If reemployment upon expiration
of a leave of absence approved by the Company is not so guaranteed, on
the 181st day of such leave any
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Incentive Stock Option held by the Optionee shall cease to be treated
as an Incentive Stock Option and shall be treated for tax purposes as
a Nonstatutory Stock Option.
j) "Director" means a member of the Board.
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k) "Disability" means total and permanent disability as defined in
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Section 22(e)(3) of the Code.
l) "Employee" means any person, including Officers and Directors,
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employed by the Company or any Parent or Subsidiary of the Company.
Neither service as a Director nor payment of a director's fee by the
Company shall be sufficient to constitute "employment" by the Company.
m) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
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n) "Fair Market Value" means, as of any date, the value of Common Stock
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determined as follows:
i) If the Common Stock is listed on any established stock exchange
or a national market system, including without limitation the
Nasdaq National Market or The Nasdaq SmallCap Market of The
Nasdaq Stock Market, its Fair Market Value shall be the closing
sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system for the day of
determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;
ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between
the high bid and low asked prices for the Common Stock on the day
of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;
iii) In the absence of an established market for the Common Stock, the
Fair Market Value shall be determined in good faith by the
Administrator.
o) "Incentive Stock Option" means an Option intended to qualify as an
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incentive stock option within the meaning of Section 422 of the Code
and the regulations promulgated thereunder.
p) "Nonstatutory Stock Option" means an Option not intended to qualify as
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an Incentive Stock Option.
q) "Notice of Grant" means a written notice evidencing certain terms and
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conditions of an individual Option or Stock Purchase Right grant. The
Notice of Grant is part of the Option Agreement.
r) "Officer" means a person who is an officer of the Company within the
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meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
s) "Option" means a stock option granted pursuant to the Plan.
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t) "Option Agreement" means a written agreement between the Company and
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an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and
conditions of the Plan.
u) "Optioned Stock" means the Common Stock subject to an Option or Stock
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Purchase Right.
v) "Optionee" means an Employee or Consultant who holds an outstanding
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Option or Stock Purchase Right.
w) "Parent" means a "parent corporation", whether now or hereafter
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existing, as defined in Section 424(e) of the Code.
x) "Plan" means this 1996 Stock Option Plan.
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y) "Restricted Stock" means shares of Common Stock acquired pursuant to a
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grant of Stock Purchase Rights under Section 11 below.
z) "Restricted Stock Purchase Agreement" means a written agreement
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between the Company and the Optionee evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase Right.
The Restricted Stock Purchase Agreement is subject to the terms and
conditions of the Plan and the Notice of Grant.
aa) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor to
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Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.
bb) "Section 16(b)" means Section 16(b) of the Securities Exchange Act of
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1934, as amended.
cc) "Share" means a share of the Common Stock, as adjusted in accordance
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with Section 13 of the Plan.
dd) "Stock Purchase Right" means the right to purchase Common Stock
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pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.
ee) "Subsidiary" means a "subsidiary corporation", whether now or
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hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 13 of the
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Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 2,500,000 Shares. The Shares may be authorized, but
unissued, or reacquired Common Stock.
a) If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, the unpurchased Shares which
were subject thereto shall become available for future grant or sale
under the Plan (unless the Plan has terminated); provided, however,
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that Shares that have actually been issued under the Plan, whether
upon exercise of an Option or Stock Purchase Right, shall not be
returned to the Plan and shall not become available for future
distribution under the Plan, except that if Shares of Restricted Stock
are repurchased by the Company at their original purchase price, and
the original purchaser of such Shares did not receive any benefits of
ownership of such Shares, such Shares shall become available for
future grant under the Plan. For
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purposes of the preceding sentence, voting rights shall not be
considered a benefit of Share ownership.
4. Administration of the Plan.
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a) Procedure.
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i) Multiple Administrative Bodies. If permitted by Rule 16b-3, the
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Plan may be administered by different bodies with respect to
Directors, Officers who are not Directors, and Employees who are
neither Directors nor Officers.
ii) Administration With Respect to Directors and Officers Subject to
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Section 16(b). With respect to Option or Stock Purchase Right
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grants made to Employees who are also Officers or Directors
subject to Section 16(b) of the Exchange Act, the Plan shall be
administered by (A) the Board, if the Board may administer the
Plan in a manner complying with the rules under Rule 16b-3
relating to the disinterested administration of employee benefit
plans under which Section 16(b) exempt discretionary grants and
awards of equity securities are to be made, or (B) a committee
designated by the Board to administer the Plan, which committee
shall be constituted to comply with the rules under Rule 16b-3
relating to the disinterested administration of employee benefit
plans under which Section 16(b) exempt discretionary grants and
awards of equity securities are to be made. Once appointed, such
Committee shall continue to serve in its designated capacity
until otherwise directed by the Board. From time to time the
Board may increase the size of the Committee and appoint
additional members, remove members (with or without cause) and
substitute new members, fill vacancies (however caused), and
remove all members of the Committee and thereafter directly
administer the Plan, all to the extent permitted by the rules
under Rule 16b-3 relating to the disinterested administration of
employee benefit plans under which Section 16(b) exempt
discretionary grants and awards of equity securities are to be
made.
iii) Administration With Respect to Other Persons. With respect to
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Option or Stock Purchase Right grants made to Employees or
Consultants who are neither Directors nor Officers of the
Company, the Plan shall be administered by (A) the Board or (B) a
committee designated by the Board, which committee shall be
constituted to satisfy Applicable Laws. Once appointed, such
Committee shall serve in its designated capacity until otherwise
directed by the Board. The Board may increase the size of the
Committee and appoint additional members, remove members (with or
without cause) and substitute new members, fill vacancies
(however caused), and remove all members of the Committee and
thereafter directly administer the Plan, all to the extent
permitted by Applicable Laws.
b) Powers of the Administrator. Subject to the provisions of the Plan,
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and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall have
the authority, in its discretion:
i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(n) of the Plan;
ii) to select the Consultants and Employees to whom Options and Stock
Purchase Rights may be granted hereunder;
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iii) to determine whether and to what extent Options and Stock
Purchase Rights or any combination thereof, are granted
hereunder;
iv) to determine the number of shares of Common Stock to be covered
by each Option and Stock Purchase Right granted hereunder;
v) to approve forms of agreement for use under the Plan;
vi) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any award granted hereunder. Such terms
and conditions include, but are not limited to, the exercise
price, the time or times when Options or Stock Purchase Rights
may be exercised (which may be based on performance criteria),
any vesting acceleration or waiver of forfeiture restrictions,
and any restriction or limitation regarding any Option or Stock
Purchase Right or the shares of Common Stock relating thereto,
based in each case on such factors as the Administrator, in its
sole discretion, shall determine;
vii) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;
viii) to prescribe, amend and rescind rules and regulations relating
to the Plan, including rules and regulations relating to sub-
plans established for the purpose of qualifying for preferred tax
treatment under foreign tax laws;
ix) to modify or amend each Option or Stock Purchase Right (subject
to Section 15(c) of the Plan), including the discretionary
authority to extend the post-termination exercisability period of
Options longer than is otherwise provided for in the Plan;
x) to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator;
xi) to determine the terms and restrictions applicable to Options and
Stock Purchase Rights and any Restricted Stock; and
xii) to make all other determinations deemed necessary or advisable
for administering the Plan.
c) Effect of Administrator's Decision. The Administrator's decisions,
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determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Stock Purchase Rights.
5. Eligibility. Nonstatutory Stock Options and Stock Purchase Rights may be
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granted to Employees and Consultants. Incentive Stock Options may be
granted only to Employees. If otherwise eligible, an Employee or
Consultant who has been granted an Option or Stock Purchase Right may be
granted additional Options or Stock Purchase Rights.
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6. Limitations.
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a) Each Option shall be designated in the written option agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designation, to the extent that the
aggregate Fair Market Value of the Shares with respect to which
Incentive Stock Options are exercisable for the first time by the
Optionee during any calendar year (under all plans of the Company and
any Parent or Subsidiary) exceeds $100,000, such Options shall be
treated as Nonstatutory Stock Options.
b) Neither the Plan nor any Option or Stock Purchase Right shall confer
upon an Optionee any right with respect to continuing the Optionee's
employment or consulting relationship with the Company, nor shall they
interfere in any way with the Optionee's right or the Company's right
to terminate such employment or consulting relationship at any time,
with or without cause.
c) The following limitations shall apply to grants of Options to
Employees:
i) No Employee shall be granted, in any fiscal year of the Company,
Options to purchase more than 400,000 Shares.
ii) In connection with his or her initial employment, an Employee may
be granted Options to purchase up to an additional 800,000 Shares
which shall not count against the limit set forth in subsection
(i) above.
iii) The foregoing limitations shall be adjusted proportionately in
connection with any change in the Company's capitalization as
described in Section 13.
iv) If an Option is cancelled in the same fiscal year of the Company
in which it was granted (other than in connection with a
transaction described in Section 13), the cancelled Option will
be counted against the limits set forth in subsections (i) and
(ii) above.
7. Term of Plan. Subject to Section 19 of the Plan, the Plan shall become
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effective upon the earlier to occur of its adoption by the Board or its
approval by the shareholders of the Company as described in Section 19 of
the Plan. It shall continue in effect for a term of ten (10) years unless
terminated earlier under Section 15 of the Plan.
8. Term of Option. The term of each Option shall be stated in the Notice of
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Grant; provided, however, that in the case of an Incentive Stock Option,
the term shall be ten (10) years from the date of grant or such shorter
term as may be provided in the Notice of Grant.
9. Option Exercise Price and Consideration.
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a) Exercise Price. The per share exercise price for the Shares to be
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issued pursuant to exercise of an Option shall be no less than 100% of
the Fair Market Value per Share on the date of grant.
b) Waiting Period and Exercise Dates. At the time an Option is granted,
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the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied
before the Option may be exercised. In so doing, the Administrator
may specify that an Option may not be exercised until either the
completion
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of a service period or the achievement of performance criteria with
respect to the Company or the Optionee.
c) Form of Consideration. The Administrator shall determine the
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acceptable form of consideration for exercising an Option, including
the method of payment. In the case of an Incentive Stock Option, the
Administrator shall determine the acceptable form of consideration at
the time of grant. Such consideration may consist entirely of:
i) cash;
ii) check;
iii) promissory note;
iv) other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more
than six months on the date of surrender, and (B) have a Fair
Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which said Option shall be
exercised;
v) delivery of a properly executed exercise notice together with
such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and
delivery to the Company of the sale or loan proceeds required to
pay the exercise price;
vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's
participation in any Company-sponsored deferred compensation
program or arrangement;
vii) any combination of the foregoing methods of payment; or
viii) such other consideration and method of payment for the issuance
of Shares to the extent permitted by Applicable Laws.
10. Exercise of Option.
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a) Procedure for Exercise; Rights as a Shareholder. Any Option granted
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hereunder shall be exercisable according to the terms of the Plan and
at such times and under such conditions as determined by the
Administrator and set forth in the Option Agreement.
i) An Option may not be exercised for a fraction of a Share.
ii) An Option shall be deemed exercised when the Company receives:
(i) written notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and
(ii) full payment for the Shares with respect to which the Option
is exercised. Full payment may consist of any consideration and
method of payment authorized by the Administrator and permitted
by the Option Agreement and the Plan. Shares issued upon
exercise of an Option shall be issued in the name of the Optionee
or, if requested by the Optionee, in the name of the Optionee and
his or her spouse. Until the stock certificate evidencing such
Shares is issued (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of
the Company), no
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right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) such stock certificate promptly
after the Option is exercised. No adjustment will be made for a
dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in
Section 13 of the Plan.
iii) Exercising an Option in any manner shall decrease the number of
Shares thereafter available, both for purposes of the Plan and
for sale under the Option, by the number of Shares as to which
the Option is exercised.
b) Termination of Employment or Consulting Relationship. Upon
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termination of an Optionee's Continuous Status as an Employee or
Consultant, other than upon the Optionee's death or Disability, the
Optionee may exercise his or her Option within such period of time as
is specified in the Notice of Grant to the extent that he or she is
entitled to exercise it on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in
the Notice of Grant). In the absence of a specified time in the
Notice of Grant, the Option shall remain exercisable for three (3)
months following the Optionee's termination. Notwithstanding the
above, in the event the Company is involved in a merger as a result of
which Optionees are precluded from selling shares of the acquiring
company until the publication of financial results covering post-
merger combined operations ("Pooling Restrictions"), options held by
Optionees subject to such Pooling Restrictions (including options that
are assumed or substituted pursuant to Section 13(c)) shall remain
exercisable until five (5) business days after the expiration of such
Pooling Restrictions (but not beyond the original term of the Option)
notwithstanding an earlier termination of such Optionee's Continuous
Status as an Employee or Consultant. If, on the date of termination,
the Optionee is not entitled to exercise his or her entire Option, the
Shares covered by the unexercisable portion of the Option shall revert
to the Plan. If, after termination, the Optionee does not exercise
his or her Option within the time specified by the Administrator, the
Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.
c) Notwithstanding the above, in the event of an Optionee's change in
status from Consultant to Employee or Employee to Consultant, the
Optionee's Continuous Status as an Employee or Consultant shall not
automatically terminate solely as a result of such change in status.
In such event, an Incentive Stock Option held by the Optionee shall
cease to be treated as an Incentive Stock Option and shall be treated
for tax purposes as a Nonstatutory Stock Option three months and one
day following such change of status.
d) Disability of Optionee. Upon termination of an Optionee's Continuous
----------------------
Status as an Employee or Consultant as a result of the Optionee's
Disability, the Optionee may exercise his or her Option at any time
within twelve (12) months (or such other period of time as is
determined by the Administrator) from the date of termination, but
only to the extent that the Optionee is entitled to exercise it on the
date of termination (and in no event later than the expiration of the
term of the Option as set forth in the Notice of Grant). If, on the
date of termination, the Optionee is not entitled to exercise his or
her entire Option, the Shares covered by the unexercisable portion of
the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified
herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.
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e) Death of Optionee. In the event of the death of an Optionee, the
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Option may be exercised at any time within twelve (12) months (or such
other period of time as is determined by the Administrator) following
the date of death (but in no event later than the expiration of the
term of such Option as set forth in the Notice of Grant), by the
Optionee's estate or by a person who acquired the right to exercise
the Option by bequest or inheritance, but only to the extent that the
Optionee was entitled to exercise the Option at the date of death.
If, at the time of death, the Optionee was not entitled to exercise
his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall immediately revert to the Plan. If, after
death, the Optionee's estate or a person who acquired the right to
exercise the Option by bequest or inheritance does not exercise the
Option within the time specified herein, the Option shall terminate,
and the Shares covered by such Option shall revert to the Plan.
f) Rule 16b-3. Options granted to individuals subject to Section 16 of
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the Exchange Act ("Insiders") must comply with the applicable
provisions of Rule 16b-3 and shall contain such additional conditions
or restrictions as may be required thereunder to qualify for the
maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
11. Stock Purchase Rights.
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a) Rights to Purchase. Stock Purchase Rights may be issued either alone,
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in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it
shall advise the offeree in writing, by means of a Notice of Grant, of
the terms, conditions and restrictions related to the offer, including
the number of Shares that the offeree shall be entitled to purchase,
the price to be paid, and the time within which the offeree must
accept such offer, which shall in no event exceed ninety (90) days
from the date upon which the Administrator made the determination to
grant the Stock Purchase Right. The offer shall be accepted by
execution of a Restricted Stock Purchase Agreement in the form
determined by the Administrator. The aggregate number of Shares
subject to grants of Stock Purchase Rights shall not exceed ten
percent (10%) of the Shares subject to the Plan pursuant to Section 3.
b) Repurchase Option. Unless the Administrator determines otherwise, the
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Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary
termination of the purchaser's employment with the Company for any
reason (including death or Disability); provided that the minimum
period of employment over which any such Company repurchase option
lapses shall not be less than three (3) years. The purchase price for
Shares repurchased pursuant to the Restricted Stock purchase agreement
shall be the original price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The
repurchase option shall lapse at a rate determined by the
Administrator.
c) Rule 16b-3. Stock Purchase Rights granted to Insiders, and Shares
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purchased by Insiders in connection with Stock Purchase Rights, shall
be subject to any restrictions applicable thereto in compliance with
Rule 16b-3. An Insider may only purchase Shares pursuant to the grant
of a Stock Purchase Right, and may only sell Shares purchased pursuant
to the grant of a Stock Purchase Right, during such time or times as
are permitted by Rule 16b-3.
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d) Other Provisions. The Restricted Stock Purchase Agreement shall
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contain such other terms, provisions and conditions not inconsistent
with the Plan as may be determined by the Administrator in its sole
discretion. In addition, the provisions of Restricted Stock Purchase
Agreements need not be the same with respect to each purchaser.
e) Rights as a Shareholder. Once the Stock Purchase Right is exercised,
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the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is
entered upon the records of the duly authorized transfer agent of the
Company. No adjustment will be made for a dividend or other right for
which the record date is prior to the date the Stock Purchase Right is
exercised, except as provided in Section 13 of the Plan.
f) Issuance of Shares. As soon as possible after full payment of the
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purchase price, the Shares purchased shall be duly issued; provided,
however, that the Administrator may require that the purchaser make
adequate provision for any Federal and State withholding obligations
of the Company as a condition to such purchase.
g) Shares Available Under the Plan. Exercise of a Stock Purchase Right in
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any manner shall result in a decrease in the number of Shares that
thereafter shall be available for reissuance under the Plan.
12. Non-Transferability of Options and Stock Purchase Rights. An Option or
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Stock Purchase Right may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws
of descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee.
13. Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset
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Sale.
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a) Changes in Capitalization. Subject to any required action by the
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shareholders of the Company, the number of shares of Common Stock covered
by each outstanding Option and Stock Purchase Right, and the number of
shares of Common Stock which have been authorized for issuance under the
Plan but as to which no Options or Stock Purchase Rights have yet been
granted or which have been returned to the Plan upon cancellation or
expiration of an Option or Stock Purchase Right, as well as the price per
share of Common Stock covered by each such outstanding Option or Stock
Purchase Right, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a
stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in
the number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made
by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of
Common Stock subject to an Option or Stock Purchase Right.
b) Dissolution or Liquidation. In the event of the proposed dissolution
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or liquidation of the Company, the Administrator shall notify each Optionee
as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an
Optionee to have the right to exercise his or her Option or Stock Purchase
Right until ten (10) days prior to such transaction as to all of the
Optioned Stock covered thereby, including Shares
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as to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to
any Shares purchased upon exercise of an Option or Stock Purchase Right
shall lapse as to all such Shares, provided the proposed dissolution or
liquidation takes place at the time and in the manner contemplated. To the
extent it has not been previously exercised, an Option or Stock Purchase
Right will terminate immediately prior to the consummation of such proposed
action.
c) Merger or Asset Sale. In the event of a merger of the Company with or
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into another corporation, or the sale of substantially all of the assets of
the Company, each outstanding Option and Stock Purchase Right shall be
assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation, or in
the event that the successor corporation refuses to assume or substitute
for the Option or Stock Purchase Right, the Optionee shall have the right
to exercise the Option or Stock Purchase Right as to all of the Optioned
Stock, including Shares as to which it would not otherwise be exercisable.
If an Option or Stock Purchase Right is exercisable in lieu of assumption
or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee that the Option or Stock Purchase
Right shall be fully exercisable for a period of fifteen (15) days from the
date of such notice, and the Option or Stock Purchase Right shall terminate
upon the expiration of such period. For the purposes of this paragraph,
the Option or Stock Purchase Right shall be considered assumed if,
following the merger or sale of assets, the option or right confers the
right to purchase or receive, for each Share of Optioned Stock subject to
the Option or Stock Purchase Right immediately prior to the merger or sale
of assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of Common
Stock for each Share held on the effective date of the transaction (and if
holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the merger or sale of
assets was not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor
corporation, provide for the consideration to be received upon the exercise
of the Option or Stock Purchase Right, for each Share of Optioned Stock
subject to the Option or Stock Purchase Right, to be solely common stock of
the successor corporation or its Parent equal in fair market value to the
per share consideration received by holders of Common Stock in the merger
or sale of assets.
14. Date of Grant. The date of grant of an Option or Stock Purchase Right
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shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator. Notice of the determination shall
be provided to each Optionee within a reasonable time after the date of such
grant.
15. Amendment and Termination of the Plan.
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a) Amendment and Termination. The Board may at any time amend, alter,
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suspend or terminate the Plan.
b) Shareholder Approval. The Company shall obtain shareholder approval of
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any Plan amendment to the extent necessary and desirable to comply with
Rule 16b-3 or with Sections 162(m) or 422 of the Code (or any successor
rule or statute or other applicable law, rule or regulation, including the
requirements of any exchange or quotation system on which the Common Stock
is listed or quoted). Such shareholder approval, if required, shall be
obtained in such a manner and to such a degree as is required by the
applicable law, rule or regulation.
c) Effect of Amendment or Termination. No amendment, alteration,
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suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise
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between the Optionee and the Administrator, which agreement must be in
writing and signed by the Optionee and the Company.
16. Conditions Upon Issuance of Shares.
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a) Legal Compliance. Shares shall not be issued pursuant to the exercise
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of an Option or Stock Purchase Right unless the exercise of such Option or
Stock Purchase Right and the issuance and delivery of such Shares shall
comply with all relevant provisions of law, including, without limitation,
the Securities Act of 1933, as amended, the Exchange Act, the rules and
regulations promulgated thereunder, Applicable Laws, and the requirements
of any stock exchange or quotation system upon which the Shares may then be
listed or quoted, and shall be further subject to the approval of counsel
for the Company with respect to such compliance.
b) Investment Representations. As a condition to the exercise of an
--------------------------
Option or Stock Purchase Right, the Company may require the person
exercising such Option or Stock Purchase Right to represent and warrant at
the time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation
is required.
17. Liability of Company.
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a) Inability to Obtain Authority. The inability of the Company to obtain
-----------------------------
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such
requisite authority shall not have been obtained.
b) Grants Exceeding Allotted Shares. If the Optioned Stock covered by an
--------------------------------
Option or Stock Purchase Right exceeds, as of the date of grant, the number
of Shares which may be issued under the Plan without additional shareholder
approval, such Option or Stock Purchase Right shall be void with respect to
such excess Optioned Stock, unless shareholder approval of an amendment
sufficiently increasing the number of Shares subject to the Plan is timely
obtained in accordance with Section 15(b) of the Plan.
18. Reservation of Shares. The Company, during the term of this Plan, will at
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all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
19. Shareholder Approval Continuance of the Plan shall be subject to approval
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by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be
obtained in the manner and to the degree required under applicable federal
and state law.
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