Exhibit 10.1
LIGHT SCIENCES ONCOLOGY, INC.
2005 EQUITY INCENTIVE PLAN
SECTION 1. PURPOSE
The purpose of the Light Sciences Oncology, Inc. 2005 Equity Incentive Plan,
which is an amendment and restatement of the Light Sciences Oncology, Inc. 2005
Stock Plan, is to attract, retain and motivate employees, officers, directors,
consultants, agents, advisors and independent contractors of the Company and its
Related Companies by providing them the opportunity to acquire a proprietary
interest in the Company and to link their interests and efforts to the long-term
interests of the Company's shareholders.
SECTION 2. DEFINITIONS
Certain terms used in the Plan have the meanings set forth in Appendix A.
SECTION 3. ADMINISTRATION
3.1 ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board or the Compensation Committee, which
shall be composed of two or more directors, each of whom is a "non-employee
director" within the meaning of Rule 16b-3(b)(3) promulgated under the Exchange
Act, or any successor definition adopted by the Securities and Exchange
Commission. Notwithstanding the foregoing, the Board may delegate responsibility
for administering the Plan with respect to designated classes of Eligible
Persons to different committees consisting of two or more members of the Board,
subject to such limitations as the Board deems appropriate, except with respect
to Awards to Participants who are subject to Section 16 of the Exchange Act.
Members of any committee shall serve for such term as the Board may determine,
subject to removal by the Board at any time. To the extent consistent with
applicable law, the Board may authorize one or more senior executive officers of
the Company to grant Awards to designated classes of Eligible Persons, within
limits specifically prescribed by the Board; provided, however, that no such
officer shall have or obtain authority to grant Awards to himself or herself or
to any person subject to Section 16 of the Exchange Act. All references in the
Plan to the "Plan Administrator" shall be, as applicable, to the Board or any
committee or senior executive officer to whom the Board has delegated authority
to administer the Plan.
3.2 ADMINISTRATION AND INTERPRETATION BY PLAN ADMINISTRATOR
(a) Except for the terms and conditions explicitly set forth in the Plan, the
Plan Administrator shall have full power and exclusive authority, to the extent
permitted by applicable law and subject to such orders or resolutions not
inconsistent with the provisions of the Plan as may from time to time be adopted
by the Board or a committee comprised of
members of the Board to (i) select the Eligible Persons to whom Awards may from
time to time be granted under the Plan; (ii) determine the type or types of
Award to be granted to each Participant under the Plan; (iii) determine the
number of shares of Common Stock to be covered by each Award granted under the
Plan; (iv) determine the terms and conditions of any Award granted under the
Plan; (v) approve the forms of notice or agreement for use under the Plan; (vi)
determine whether, to what extent and under what circumstances Awards may be
settled in cash, shares of Common Stock or other property or canceled or
suspended; (vii) determine whether, to what extent and under what circumstances
cash, shares of Common Stock, other property and other amounts payable with
respect to an Award shall be deferred either automatically or at the election of
the Participant; (viii) interpret and administer the Plan and any instrument
evidencing an Award or notice or agreement entered into under the Plan; (ix)
establish such rules and regulations as it shall deem appropriate for the proper
administration of the Plan; (x) delegate ministerial duties to such of the
Company's employees as it so determines; and (xi) make any other determination
and take any other action that the Plan Administrator deems necessary or
desirable for administration of the Plan.
(b) The effect on the vesting of an Award of a Company-approved leave of absence
or a Participant's working less than full-time shall be determined by the
Company's chief human resources officer or other person performing that function
or, with respect to directors or executive officers, by the Compensation
Committee, whose determination shall be final.
(c) The Plan Administrator shall have the right, without shareholder approval,
to (i) cancel or amend outstanding Options or Stock Appreciation Rights for the
purpose of repricing, replacing or regranting such Options or Stock Appreciation
Rights with Options or Stock Appreciation Rights that have a purchase or grant
price that is less than the purchase or grant price for the original Options or
Stock Appreciation Rights or (ii) issue an Option or amend an outstanding Option
to provide for the grant or issuance of a new Option on exercise of the original
Option.
(d) Decisions of the Plan Administrator shall be final, conclusive and binding
on all persons, including the Company, any Participant, any shareholder and any
Eligible Person. A majority of the members of the Plan Administrator may
determine its actions.
SECTION 4. SHARES SUBJECT TO THE PLAN
4.1 AUTHORIZED NUMBER OF SHARES
Subject to adjustment from time to time as provided in Section 14.1, the number
of shares of Common Stock available for issuance under the Plan shall be:
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(a) 3,732,000 shares; plus
(b) an annual increase to be added as of the first day of the Company's fiscal
year beginning in 2007 equal to the least of (i) 1,500,000 shares, (ii) 4% of
the outstanding shares of Common Stock as the end of the Company's immediately
preceding fiscal year, (iii) any lesser number of shares determined by the
Board, or (iv) a number of shares that, when added to the sum of (x) the number
of shares subject to outstanding Awards as of the end of the Company's
immediately preceding fiscal year (other than Stock Awards not subject to
vesting or forfeiture conditions) and (y) the number of shares that could be
made subject to outstanding Awards as of the end of the Company's immediately
preceding fiscal year, does not exceed 20% of the outstanding shares of Common
Stock on a fully diluted basis as of the end of the Company's immediately
preceding fiscal year.
Shares issued under the Plan shall be drawn from authorized and unissued shares.
4.2 SHARE USAGE
(a) Shares of Common Stock covered by an Award shall not be counted as used
unless and until they are actually issued and delivered to a Participant. If any
Award lapses, expires, terminates or is canceled prior to the issuance of shares
thereunder or if shares of Common Stock are issued under the Plan to a
Participant and thereafter are forfeited to or otherwise reacquired by the
Company, the shares subject to such Awards and the forfeited or reacquired
shares shall again be available for issuance under the Plan. Any shares of
Common Stock (i) tendered by a Participant or retained by the Company as full or
partial payment to the Company for the purchase price of an Award or to satisfy
tax withholding obligations in connection with an Award or (ii) covered by an
Award that is settled in cash or in a manner such that some or all of the shares
covered by the Award are not issued, shall be available for Awards under the
Plan. The number of shares of Common Stock available for issuance under the Plan
shall not be reduced to reflect any dividends or dividend equivalents that are
reinvested into additional shares of Common Stock or credited as additional
shares of Common Stock subject or paid with respect to an Award.
(b) The Plan Administrator shall also, without limitation, have the authority to
grant Awards as an alternative to or as the form of payment for grants or rights
earned or due under other compensation plans or arrangements of the Company.
(c) Notwithstanding anything in the Plan to the contrary, the Plan Administrator
may grant Substitute Awards under the Plan. In the event that a written
agreement between the Company and an Acquired Entity pursuant to which a merger
or consolidation is completed is approved by the Board and said agreement sets
forth the terms and conditions of the substitution for or assumption of
outstanding awards of the Acquired Entity, said terms and conditions shall be
deemed to be the action of the Plan Administrator without any further action by
the Plan Administrator, except as may be required for compliance with Rule 16b-3
under the Exchange Act, and the persons holding such awards shall be deemed to
be Participants.
(d) Notwithstanding the foregoing, the maximum number of shares that may be
issued upon the exercise of Incentive Stock Options shall be typically amount
in (a) above and 4 times the number in (b) shares, subject to adjustment as
provided in Section 14.1.
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SECTION 5. ELIGIBILITY
An Award may be granted to any employee, officer or director of the Company or a
Related Company whom the Plan Administrator from time to time selects. An Award
may also be granted to any consultant, agent, advisor or independent contractor
for bona fide services rendered to the Company or any Related Company that (a)
are not in connection with the offer and sale of the Company's securities in a
capital-raising transaction and (b) do not directly or indirectly promote or
maintain a market for the Company's securities.
SECTION 6. AWARDS
6.1 FORM, GRANT AND SETTLEMENT OF AWARDS
The Plan Administrator shall have the authority, in its sole discretion, to
determine the type or types of Awards to be granted under the Plan. Such Awards
may be granted either alone, in addition to, or in tandem with, any other type
of Award. Any Award settlement may be subject to such conditions, restrictions
and contingencies as the Plan Administrator shall determine.
6.2 EVIDENCE OF AWARDS
Awards granted under the Plan shall be evidenced by a written, including an
electronic, agreement that shall contain such terms, conditions, limitations and
restrictions as the Plan Administrator shall deem advisable and that are not
inconsistent with the Plan.
6.3 DEFERRALS
The Plan Administrator may permit or require a Participant to defer receipt of
the payment of any Award. If any such deferral election is permitted or
required, the Plan Administrator, in its sole discretion, shall establish rules
and procedures for such payment deferrals, which may include the grant of
additional Awards or provisions for the payment or crediting of interest or
dividend equivalents, including converting such credits to deferred stock unit
equivalents. The value of any payment so deferred shall be allocated to a
deferred account established for a Participant under any deferred compensation
plan of the Company designated by the Plan Administrator. Notwithstanding the
foregoing, any deferral made under this Section 6.3 shall satisfy the
requirements for exemption under Section 409A of the Code or satisfy the
requirements of Section 409A determined by the Plan Administrator prior to such
deferral.
6.4 DIVIDENDS AND DISTRIBUTIONS
Participants may, if the Plan Administrator so determines, be credited with
dividends paid with respect to shares underlying an Award in a manner determined
by the Plan Administrator in its sole discretion. The Plan Administrator may
apply any restrictions to the dividends or dividend equivalents that the Plan
Administrator deems appropriate. The Plan Administrator, in its sole discretion,
may determine the form of payment of dividends or
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dividend equivalents, including cash, shares of Common Stock, Restricted Stock
or Stock Units. Notwithstanding the foregoing, the right to any dividends
declared and paid on the number of shares underlying an Option or Stock
Appreciation Right must be set forth as a separate arrangement in compliance
with the requirements of Section 409A of the Code, if applicable.
SECTION 7. OPTIONS
7.1 GRANT OF OPTIONS
The Plan Administrator may grant Options designated as Incentive Stock Options
or Nonqualified Stock Options.
7.2 OPTION EXERCISE PRICE
The exercise price for shares purchased under an Option shall be as determined
by the Plan Administrator, but shall not be less than 100% of the Fair Market
Value of the Common Stock on the Grant Date, except in the case of Substitute
Awards.
7.3 TERM OF OPTIONS
Subject to earlier termination in accordance with the terms of the Plan and the
instrument evidencing the Option, the maximum term of an Option (the "OPTION
TERM") shall be as established for that Option by the Plan Administrator or, if
not so established, shall be ten years from the Grant Date. For Incentive Stock
Options, the Option Term shall be as specified in Section 8.4.
7.4 EXERCISE OF OPTIONS
The Plan Administrator shall establish and set forth in each instrument that
evidences an Option the time at which, or the installments in which, the Option
shall vest and become exercisable, any of which provisions may be waived or
modified by the Plan Administrator at any time. If not so established in the
instrument evidencing the Option, the Option shall vest and become exercisable
according to the following schedule, which may be waived or modified by the Plan
Administrator at any time:
PERIOD OF PARTICIPANT'S CONTINUOUS
EMPLOYMENT OR SERVICE WITH THE
COMPANY OR ITS RELATED COMPANIES FROM PORTION OF TOTAL OPTION THAT IS VESTED
THE VESTING COMMENCEMENT DATE AND EXERCISABLE
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After 1 year 1/4
Each additional one-month period of An additional 1/48th of the total Option
continuous service completed
thereafter
After 4 years 100%
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To the extent an Option has vested and become exercisable, the Option may be
exercised in whole or from time to time in part by delivery to the Company or a
brokerage firm designated or approved by the Company of a properly executed
stock option exercise agreement or notice, in a form and in accordance with
procedures established by the Plan Administrator, setting forth the number of
shares with respect to which the Option is being exercised, the restrictions
imposed on the shares purchased under such exercise agreement or notice, if any,
and such representations and agreements as may be required by the Plan
Administrator, accompanied by payment in full as described in Sections 7.5 and
12. An Option may be exercised only for whole shares and may not be exercised
for less than a reasonable number of shares at any one time, as determined by
the Plan Administrator.
7.5 PAYMENT OF EXERCISE PRICE
The exercise price for shares purchased under an Option shall be paid in full to
the Company or a brokerage firm designated or approved by the Company by
delivery of consideration equal to the product of the Option exercise price and
the number of shares purchased. Such consideration must be paid before the
Company will issue the shares being purchased and must be in a form or a
combination of forms acceptable to the Plan Administrator for that purchase,
which forms may include:
(a) cash;
(b) check or wire transfer;
(c) tendering (either actually or, if and as so long as the Common Stock is
registered under Section 12(b) or 12(g) of the Exchange Act, by attestation)
shares of Common Stock already owned by the Participant, which on the day prior
to the exercise date have a Fair Market Value equal to the aggregate exercise
price of the shares being purchased under the Option (such shares must have been
owned by the Participant for at least six months or any shorter period necessary
to avoid adverse accounting consequences to the Company);
(d) if and so long as the Common Stock is registered under Section 12(b) or
12(g) of the Exchange Act, and to the extent permitted by law, delivery of a
properly executed exercise agreement or notice, together with irrevocable
instructions to a brokerage firm designated or approved by the Company to
deliver promptly to the Company the aggregate amount of proceeds to pay the
Option exercise price and any withholding tax obligations that may arise in
connection with the exercise, all in accordance with the regulations of the
Federal Reserve Board; or
(e) such other consideration as the Plan Administrator may permit.
In addition, to assist a Participant (other than, to the extent prohibited by
law, a Participant who is an executive officer of the Company or a member of the
Board) in acquiring shares of Common Stock pursuant to an Award granted under
the Plan, the Plan Administrator, in its sole discretion, may authorize, either
at the Grant Date or at any time before the acquisition of Common Stock pursuant
to the Award, (i) the payment by a Participant of the purchase
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price of the Common Stock by a promissory note or (ii) the guarantee by the
Company of a loan obtained by the Participant from a third party. Such notes or
loans must be full recourse to the extent necessary to avoid charges to the
Company's earnings for financial reporting purposes. Subject to the foregoing,
the Plan Administrator shall in its sole discretion specify the terms of any
loans or loan guarantees, including the interest rate and terms of and security
for repayment.
7.6 EFFECT OF TERMINATION OF SERVICE
The Plan Administrator shall establish and set forth in each instrument that
evidences an Option whether the Option shall continue to be exercisable, and the
terms and conditions of such exercise, after a Termination of Service, any of
which provisions may be waived or modified by the Plan Administrator at any
time. If not so established in the instrument evidencing the Option, the Option
shall be exercisable according to the following terms and conditions, which may
be waived or modified by the Plan Administrator at any time:
(a) Any portion of an Option that is not vested and exercisable on the date of a
Participant's Termination of Service shall expire on such date.
(b) Any portion of an Option that is vested and exercisable on the date of a
Participant's Termination of Service shall expire on the earliest to occur of
(i) if the Participant's Termination of Service occurs for reasons other
than Cause, Retirement, Disability or death, the date that is three months
after such Termination of Service;
(ii) if the Participant's Termination of Service occurs by reason of
Retirement, Disability or death, the one-year anniversary of such
Termination of Service; and
(iii) the last day of the Option Term (the "OPTION EXPIRATION DATE").
Notwithstanding the foregoing, if a Participant dies after the Participant's
Termination of Service but while an Option is otherwise exercisable, the portion
of the Option that is vested and exercisable on the date of such Termination of
Service shall expire upon the earlier to occur of (y) the Option Expiration Date
and (z) the one-year anniversary of the date of death, unless the Plan
Administrator determines otherwise.
Also notwithstanding the foregoing, in case a Participant's Termination of
Service occurs for Cause, all Options granted to the Participant shall
automatically expire upon first notification to the Participant of such
termination, unless the Plan Administrator determines otherwise. If a
Participant's employment or service relationship with the Company is suspended
pending an investigation of whether the Participant shall be terminated for
Cause, all the Participant's rights under any Option shall likewise be suspended
during the period of investigation. If any facts that would constitute
termination for Cause are discovered after a Participant's Termination of
Service, any Option then held by the Participant may be immediately terminated
by the Plan Administrator, in its sole discretion.
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(c) A Participant's change in status from an employee to a nonemployee director,
consultant, advisor or independent contractor or a change in status from a
nonemployee director, consultant, advisor or independent contractor to an
employee, shall not be considered a Termination of Service for purposes of this
Section 7.6.
SECTION 8. INCENTIVE STOCK OPTION LIMITATIONS
Notwithstanding any other provisions of the Plan, the terms and conditions of
any Incentive Stock Options shall in addition comply in all respects with
Section 422 of the Code, or any successor provision, and any applicable
regulations thereunder, including, to the extent required thereunder, the
following:
8.1 DOLLAR LIMITATION
To the extent the aggregate Fair Market Value (determined as of the Grant Date)
of Common Stock with respect to which a Participant's Incentive Stock Options
become exercisable for the first time during any calendar year (under the Plan
and all other stock option plans of the Company and its parent and subsidiary
corporations) exceeds $100,000, such portion in excess of $100,000 shall be
treated as a Nonqualified Stock Option. In the event the Participant holds two
or more such Options that become exercisable for the first time in the same
calendar year, such limitation shall be applied on the basis of the order in
which such Options are granted.
8.2 ELIGIBLE EMPLOYEES
Individuals who are not employees of the Company or one of its parent or
subsidiary corporations may not be granted Incentive Stock Options.
8.3 EXERCISE PRICE
The exercise price of an Incentive Stock Option shall be at least 100% of the
Fair Market Value of the Common Stock on the Grant Date, and in the case of an
Incentive Stock Option granted to a Participant who owns more than 10% of the
total combined voting power of all classes of the stock of the Company or of its
parent or subsidiary corporations (a "TEN PERCENT SHAREHOLDER"), shall not be
less than 110% of the Fair Market Value of the Common Stock on the Grant Date.
The determination of more than 10% ownership shall be made in accordance with
Section 422 of the Code.
8.4 OPTION TERM
Subject to earlier termination in accordance with the terms of the Plan and the
instrument evidencing the Option, the Option Term of an Incentive Stock Option
shall not exceed ten years, and in the case of an Incentive Stock Option granted
to a Ten Percent Shareholder, shall not exceed five years.
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8.5 EXERCISABILITY
An Option designated as an Incentive Stock Option shall cease to qualify for
favorable tax treatment as an Incentive Stock Option to the extent it is
exercised (if permitted by the terms of the Option) (a) more than three months
after the date of a Participant's Termination of Service if termination was for
reasons other than death or Disability, (b) more than one year after the date of
a Participant's Termination of Service if termination was by reason of
Disability, or (c) after the Participant has been on leave of absence for more
than 90 days, unless the Participant's reemployment rights are guaranteed by
statute or contract.
8.6 TAXATION OF INCENTIVE STOCK OPTIONS
In order to obtain certain tax benefits afforded to Incentive Stock Options
under Section 422 of the Code, the Participant must hold the shares acquired
upon the exercise of an Incentive Stock Option for two years after the Grant
Date and one year after the date of exercise.
A Participant may be subject to the alternative minimum tax at the time of
exercise of an Incentive Stock Option. The Participant shall give the Company
prompt notice of any disposition of shares acquired on the exercise of an
Incentive Stock Option prior to the expiration of such holding periods.
8.7 CODE DEFINITIONS
For the purposes of this Section 8, "disability," "parent corporation" and
"subsidiary corporation" shall have the meanings attributed to those terms for
purposes of Section 422 of the Code.
8.8 PROMISSORY NOTES
The amount of any promissory note delivered pursuant to Section 7.5 in
connection with an Incentive Stock Option shall bear interest at a rate
specified by the Plan Administrator, but in no case less than the rate required
to avoid imputation of interest (taking into account any exceptions to the
imputed interest rules) for federal income tax purposes.
SECTION 9. STOCK APPRECIATION RIGHTS
9.1 GRANT OF STOCK APPRECIATION RIGHTS
The Plan Administrator may grant Stock Appreciation Rights to Participants at
any time on such terms and conditions as the Plan Administrator shall determine
in its sole discretion. An SAR may be granted in tandem with an Option or alone
("FREESTANDING"). The grant price of a tandem SAR shall be equal to the exercise
price of the related Option. The grant price of a freestanding SAR shall be
equal to the Fair Market Value of the Common Stock on the Grant Date, except for
Substitute Awards. An SAR may be exercised upon such terms and conditions and
for the term as the Plan Administrator determines in its sole discretion;
provided, however, that, subject to earlier termination in accordance with the
terms of the
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Plan and the instrument evidencing the SAR, the term of a freestanding SAR shall
be as established for that SAR by the Plan Administrator or, if not so
established, shall be ten years, and in the case of a tandem SAR, (a) the term
shall not exceed the term of the related Option and (b) the tandem SAR may be
exercised for all or part of the shares subject to the related Option upon the
surrender of the right to exercise the equivalent portion of the related Option,
except that the tandem SAR may be exercised only with respect to the shares for
which its related Option is then exercisable.
9.2 PAYMENT OF SAR AMOUNT
Upon the exercise of an SAR, a Participant shall be entitled to receive payment
in an amount determined by multiplying: (a) the difference between the Fair
Market Value of the Common Stock for the date of exercise over the grant price
of the SAR by (b) the number of shares with respect to which the SAR is
exercised. At the discretion of the Plan Administrator as set forth in the
instrument evidencing the Award, the payment upon exercise of an SAR may be in
cash, in shares, in some combination thereof or in any other manner approved by
the Plan Administrator in its sole discretion.
9.3 POST-TERMINATION EXERCISE
The Plan Administrator shall establish and set forth in each instrument that
evidences a freestanding SAR whether the SAR shall continue to be exercisable,
and the terms and conditions of such exercise, after a Termination of Service,
any of which provisions may be waived or modified by the Plan Administrator at
any time.
SECTION 10. STOCK AWARDS, RESTRICTED STOCK AND STOCK UNITS
10.1 GRANT OF STOCK AWARDS, RESTRICTED STOCK AND STOCK UNITS
The Plan Administrator may grant Stock Awards, Restricted Stock and Stock Units
on such terms and conditions and subject to such repurchase or forfeiture
restrictions, if any, which may be based on continuous service with the Company
or a Related Company or the achievement of any performance goals, as the Plan
Administrator shall determine in its sole discretion, which terms, conditions
and restrictions shall be set forth in the instrument evidencing the Award.
10.2 VESTING OF RESTRICTED STOCK AND STOCK UNITS
Upon the satisfaction of any terms, conditions and restrictions prescribed with
respect to Restricted Stock or Stock Units, or upon a Participant's release from
any terms, conditions and restrictions of Restricted Stock or Stock Units, as
determined by the Plan Administrator, and subject to the provisions of Section
12, (a) the shares of Restricted Stock covered by each Award of Restricted Stock
shall become freely transferable by the Participant, and (b) Stock Units shall
be paid in shares of Common Stock or, if set forth in the instrument evidencing
the Awards, in cash or a combination of cash and shares of Common Stock. Any
fractional shares subject to such Awards shall be paid to the Participant in
cash.
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10.3 WAIVER OF RESTRICTIONS
Notwithstanding any other provisions of the Plan, the Plan Administrator, in its
sole discretion, may waive the repurchase or forfeiture period and any other
terms, conditions or restrictions on any Restricted Stock or Stock Unit under
such circumstances and subject to such terms and conditions as the Plan
Administrator shall deem appropriate.
SECTION 11. OTHER STOCK OR CASH-BASED AWARDS
Subject to the terms of the Plan and such other terms and conditions as the Plan
Administrator deems appropriate, the Plan Administrator may grant other
incentives payable in cash or in shares of Common Stock under the Plan as it
determines.
SECTION 12. WITHHOLDING
The Company may require a Participant to pay to the Company the amount of (a)
any taxes that the Company is required by applicable federal, state, local or
foreign law to withhold with respect to the grant, vesting or exercise of an
Award ("TAX WITHHOLDING OBLIGATIONS") and (b) any amounts due from the
Participant to the Company or to any Related Company ("OTHER OBLIGATIONS"). The
Company shall not be required to issue any shares of Common Stock or otherwise
settle an Award under the Plan until such tax withholding obligations and other
obligations are satisfied.
The Plan Administrator may permit or require a Participant to satisfy all or
part of the Participant's tax withholding obligations and other obligations by
(a) paying cash to the Company, (b) having the Company withhold an amount from
any cash amounts otherwise due or to become due from the Company to the
Participant, (c) having the Company withhold a number of shares of Common Stock
that would otherwise be issued to the Participant (or become vested in the case
of Restricted Stock) having a Fair Market Value equal to the tax withholding
obligations and other obligations, or (d) surrendering a number of shares of
Common Stock the Participant already owns having a value equal to the tax
withholding obligations and other obligations. The value of the shares so
withheld may not exceed the employer's minimum required tax withholding rate,
and the value of the shares so tendered may not exceed such rate to the extent
the Participant has owned the tendered shares for less than six months if such
limitation is necessary to avoid adverse accounting consequences to the Company.
SECTION 13. ASSIGNABILITY
No Award or interest in an Award may be sold, assigned, pledged (as collateral
for a loan or as security for the performance of an obligation or for any other
purpose) or transferred by a Participant or made subject to attachment or
similar proceedings otherwise than by will or by the applicable laws of descent
and distribution, except to the extent the Participant designates one or more
beneficiaries on a Company-approved form who may exercise the Award or receive
payment under the Award after the Participant's death. During a Participant's
lifetime, an Award may be exercised only by the Participant. Notwithstanding the
foregoing
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and to the extent permitted by Section 422 of the Code, the Plan Administrator,
in its sole discretion, may permit a Participant to assign or transfer an Award,
subject to such terms and conditions as the Plan Administrator shall specify.
SECTION 14. ADJUSTMENTS
14.1 ADJUSTMENT OF SHARES
In the event, at any time or from time to time, a stock dividend, stock split,
spin-off, combination or exchange of shares, recapitalization, merger,
consolidation, a statutory share exchange, distribution to shareholders other
than a normal cash dividend, or other change in the Company's corporate or
capital structure results in (a) the outstanding shares of Common Stock, or any
securities exchanged therefor or received in their place, being exchanged for a
different number or kind of securities of the Company or any other company or
(b) new, different or additional securities of the Company or any other company
being received by the holders of shares of Common Stock, then the Plan
Administrator shall make proportional adjustments in (i) the maximum number and
kind of securities available for issuance under the Plan; (ii) the maximum
number and kind of securities issuable as Incentive Stock Options as set forth
in Section 4.2(d); (iii) the number and kind of securities that are subject to
any outstanding Award and the per share price of such securities, without any
change in the aggregate price to be paid therefor; and (iv) the number and kind
of securities automatically granted pursuant to a formula program established
under the Plan. The determination by the Plan Administrator as to the terms of
any of the foregoing adjustments shall be conclusive and binding.
Notwithstanding the foregoing, the issuance by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, for cash
or property, or for labor or services rendered, 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, outstanding Awards. Also notwithstanding the foregoing, a
dissolution or liquidation of the Company or a Company Transaction shall not be
governed by this Section 14.1 but shall be governed by Sections 14.2 and 14.3,
respectively.
14.2 DISSOLUTION OR LIQUIDATION
To the extent not previously exercised or settled, and unless otherwise
determined by the Plan Administrator in its sole discretion, Options, Stock
Appreciation Rights and Stock Units shall terminate immediately prior to the
dissolution or liquidation of the Company. To the extent a vesting condition,
forfeiture provision or repurchase right applicable to an Award has not been
waived by the Plan Administrator, the Award shall be forfeited immediately prior
to the consummation of the dissolution or liquidation.
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14.3 COMPANY TRANSACTION
14.3.1 EFFECT OF A COMPANY TRANSACTION
(a) Notwithstanding any other provision of the Plan to the contrary, unless the
Plan Administrator shall determine otherwise at the time of grant with respect
to a particular Award or unless provided otherwise in a written employment,
services or other agreement between the Participant and the Company or a Related
Company, in the event of a Company Transaction that is not a Related Party
Transaction, all outstanding Awards shall become fully and immediately
exercisable or payable, and all applicable deferral and restriction limitations
or forfeiture provisions shall lapse, immediately prior to the Company
Transaction, and then terminate upon effectiveness of the Company Transaction,
unless such Awards are assumed or substituted for by the Successor Company.
Notwithstanding the foregoing, with respect to outstanding Options or Stock
Appreciation Rights, the Plan Administrator, in its sole discretion, may instead
provide that such Awards shall terminate upon consummation of such Company
Transaction and that each such Participant shall receive, in exchange therefor,
a cash payment equal to the amount (if any) by which (a) the Acquisition Price
multiplied by the number of shares of Common Stock subject to such outstanding
Options or SARs (either to the extent then vested and exercisable or whether or
not then vested and exercisable, as determined by the Plan Administrator in its
sole discretion) exceeds (b) the respective aggregate exercise price for such
Options or grant price for such SARs. If and to the extent the Successor Company
assumes or substitutes outstanding Awards, the forfeiture provisions applicable
to Restricted Stock shall not lapse, and all such restrictions shall continue
with respect to any shares of the Successor Company or other consideration that
may be issued in exchange or in substitution for such Restricted Stock.
(b) Unless the Plan Administrator determines otherwise at the time of grant with
respect to a particular Award or unless provided otherwise in a written
employment, services or other agreement between the Participant and the Company
or a Related Company, if a Successor Company assumes or substitutes outstanding
Awards in a Company Transaction that is not a Related Party Transaction,
outstanding Options shall automatically become fully vested and exercisable, and
all applicable deferral and restriction limitations or forfeiture provisions
applicable to outstanding Awards shall lapse, immediately prior to a
Participant's Termination of Service without Cause in connection with a Company
Transaction or within one year after a Company Transaction.
14.3.2 ASSUMPTION OR SUBSTITUTION
For the purposes of this Section 14.3, an Award shall be considered assumed or
substituted for if following the Company Transaction an option or right confers
the right to purchase or receive, for each Common Share subject to the Award
immediately prior to the Company Transaction, the consideration (whether stock,
cash, or other securities or property) received in the Company Transaction 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
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type of consideration chosen by the holders of a majority of the outstanding
shares); provided, however, that if such consideration received in the Company
Transaction is not solely common stock of the Successor Company, the Plan
Administrator may, with the consent of the Successor Company, provide for the
consideration to be received upon the exercise of the Option, for each share of
Common Stock subject thereto, to be solely common stock of the Successor Company
substantially equal in fair market value to the per share consideration received
by holders of Common Stock in the Company Transaction. The determination of such
substantial equality of value of consideration shall be made by the Plan
Administrator and its determination shall be conclusive and binding.
14.4 FURTHER ADJUSTMENT OF AWARDS
Subject to Sections 14.2 and 14.3, the Plan Administrator shall have the
discretion, exercisable at any time before a sale, merger, consolidation, a
statutory share exchange, reorganization, liquidation, dissolution or change in
control of the Company, as defined by the Plan Administrator, to take such
further action as it determines to be necessary or advisable with respect to
Awards. Such authorized action may include (but shall not be limited to)
establishing, amending or waiving the type, terms, conditions or duration of, or
restrictions on, Awards so as to provide for earlier, later, extended or
additional time for exercise, lifting restrictions and other modifications, and
the Plan Administrator may take such actions with respect to all Participants,
to certain categories of Participants or only to individual Participants. The
Plan Administrator may take such action before or after granting Awards to which
the action relates and before or after any public announcement with respect to
such sale, merger, consolidation, reorganization, liquidation, dissolution or
change in control that is the reason for such action.
14.5 NO LIMITATIONS
The grant of Awards shall in no way affect the Company's right to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
14.6 FRACTIONAL SHARES
In the event of any adjustment in the number of shares covered by any Award,
each such Award shall cover only the number of full shares resulting from such
adjustment.
SECTION 15. MARKET STANDOFF
In the event of an underwritten public offering by the Company of its equity
securities pursuant to an effective registration statement filed under the
Securities Act, including the Company's initial public offering, no person may
sell, make any short sale of, loan, hypothecate, pledge, grant any option for
the purchase of, or otherwise dispose of or transfer for value or otherwise
agree to engage in any of the foregoing transactions with respect to any shares
issued pursuant to an Award granted under the Plan without the prior written
consent of the Company or its underwriters. Such limitations shall be in effect
for such
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period of time as may be requested by the Company or such underwriters;
provided, however, that in no event shall such period exceed (i) one hundred
eighty (180) days following the effective date of the registration statement for
such initial public offering or (ii) such longer period requested by the
underwriters as is necessary to comply with regulatory restrictions on the
publication of research reports (including, but not limited to, NYSE Rule 472 or
NASD Conduct Rule 2711). The limitations of this Section 15 shall in all events
terminate two years after the effective date of the Company's initial public
offering.
In the event of any stock split, stock dividend, recapitalization, combination
of shares, exchange of shares or other change affecting the Company's
outstanding Common Stock effected as a class without the Company's receipt of
consideration, any new, substituted or additional securities distributed with
respect to the purchased shares shall be immediately subject to the provisions
of this Section 15, to the same extent the purchased shares are at such time
covered by such provisions.
In order to enforce the limitations of this Section 15, the Company may impose
stop-transfer instructions with respect to the purchased shares until the end of
the applicable standoff period.
SECTION 16. AMENDMENT AND TERMINATION
16.1 AMENDMENT, SUSPENSION OR TERMINATION
The Board may amend, suspend or terminate the Plan or any portion of the Plan at
any time and in such respects as it shall deem advisable; provided, however,
that, to the extent required by applicable law, regulation or stock exchange
rule, shareholder approval shall be required for any amendment to the Plan.
Subject to Section 16.3, the Board may amend the terms of any outstanding Award,
prospectively or retroactively.
16.2 TERM OF THE PLAN
Unless sooner terminated as provided herein, the Plan shall terminate ten years
from the Effective Date. After the Plan is terminated, no future Awards may be
granted, but Awards previously granted shall remain outstanding in accordance
with their applicable terms and conditions and the Plan's terms and conditions.
Notwithstanding the foregoing, no Incentive Stock Options may be granted more
than ten years after the later of (a) the adoption of the Plan by the Board and
(b) the adoption by the Board of any amendment to the Plan that constitutes the
adoption of a new plan for purposes of Section 422 of the Code.
16.3 CONSENT OF PARTICIPANT
The amendment, suspension or termination of the Plan or a portion thereof or the
amendment of an outstanding Award shall not, without the Participant's consent,
materially adversely affect any rights under any Award theretofore granted to
the Participant under the Plan. Any change or adjustment to an outstanding
Incentive Stock Option shall not, without the consent of the Participant, be
made in a manner so as to constitute a "modification" that would cause
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such Incentive Stock Option to fail to continue to qualify as an Incentive Stock
Option. Notwithstanding the foregoing, any adjustments made pursuant to Section
14 shall not be subject to these restrictions.
SECTION 17. GENERAL
17.1 NO INDIVIDUAL RIGHTS
No individual or Participant shall have any claim to be granted any Award under
the Plan, and the Company has no obligation for uniformity of treatment of
Participants under the Plan.
Furthermore, nothing in the Plan or any Award granted under the Plan shall be
deemed to constitute an employment contract or 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 Related Company or limit in any way the
right of the Company or any Related Company to terminate a Participant's
employment or other relationship at any time, with or without cause.
17.2 ISSUANCE OF SHARES
Notwithstanding any other provision of the Plan, the Company shall have no
obligation to issue or deliver any shares of Common Stock under the Plan or make
any other distribution of benefits under the Plan unless, in the opinion of the
Company's counsel, such issuance, delivery or distribution would comply with all
applicable laws (including, without limitation, the requirements of the
Securities Act or the laws of any state or foreign jurisdiction) and the
applicable requirements of any securities exchange or similar entity.
The Company shall be under no obligation to any Participant to register for
offering or resale or to qualify for exemption under the Securities Act, or to
register or qualify under the laws of any state or foreign jurisdiction, any
shares of Common Stock, security or interest in a security paid or issued under,
or created by, the Plan, or to continue in effect any such registrations or
qualifications if made. The Company may issue certificates for shares with such
legends and subject to such restrictions on transfer and stop-transfer
instructions as counsel for the Company deems necessary or desirable for
compliance by the Company with federal, state and foreign securities laws. The
Company may also require such other action or agreement from a Participant as
may from time to time be necessary to comply with applicable securities laws.
To the extent the Plan or any instrument evidencing an Award provides for
issuance of stock certificates to reflect the issuance of shares of Common
Stock, the issuance may be effected on a noncertificated basis, to the extent
not prohibited by applicable law or the applicable rules of any stock exchange.
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17.3 INDEMNIFICATION
Each person who is or shall have been a member of the Board, or a committee
appointed by the Board or an officer of the Company to whom authority was
delegated in accordance with Section 3, shall be indemnified and held harmless
by the Company against and from any loss, cost, liability or expense that may be
imposed upon or reasonably incurred by such person in connection with or
resulting from any claim, action, suit or proceeding to which such person may be
a party or in which such person may be involved by reason of any action taken or
failure to act under the Plan and against and from any and all amounts paid by
such person in settlement thereof, with the Company's approval, or paid by such
person in satisfaction of any judgment in any such claim, action, suit or
proceeding against such person; provided, however, that such person shall give
the Company an opportunity, at its own expense, to handle and defend the same
before such person undertakes to handle and defend it on such person's own
behalf. Notwithstanding the prior sentence, the indemnification provisions of
this Section 17.3 shall not apply if such loss, cost, liability or expense is a
result of such person's own willful misconduct.
The foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such person may be entitled under the
Company's articles of incorporation or bylaws, as a matter of law, or otherwise,
or of any power that the Company may have to indemnify or hold harmless.
17.4 NO RIGHTS AS A SHAREHOLDER
Unless otherwise provided by the Plan Administrator or in the instrument
evidencing the Award or in a written employment, services or other agreement, no
Option, Stock Appreciation Right or Stock Unit shall entitle the Participant to
any cash dividend, voting or other right of a shareholder unless and until the
date of issuance under the Plan of the shares that are the subject of such
Award.
17.5 COMPLIANCE WITH LAWS AND REGULATIONS
In interpreting and applying the provisions of the Plan, any Option granted as
an Incentive Stock Option pursuant to the Plan shall, to the extent permitted by
law, be construed as an "incentive stock option" within the meaning of Section
422 of the Code.
To the extent that the Plan Administrator determines that any Award granted
under this Plan is subject to Section 409A of the Code, the agreement evidencing
such Award shall incorporate the terms and conditions required by Section 409A.
Notwithstanding any provision of this Plan to the contrary, in the event that
the Plan Administrator determines that any Award may be subject to Section 409A,
the Plan Administrator may adopt such amendments to this Plan and the applicable
agreement evidencing the Award or adopt other policies and procedures (including
amendments, policies and procedures with retroactive effect), or take any other
actions, that the Plan Administrator determines are necessary or appropriate to
(a) exempt the Award from Section 409A or (b) comply with the requirements of
Section 409A.
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17.6 PARTICIPANTS IN OTHER COUNTRIES OR JURISDICTIONS
Without amending the Plan, the Plan Administrator may grant Awards to eligible
persons who are foreign nationals on such terms and conditions different from
those specified in the Plan, which may, in the judgement of the Plan
Administrator, be necessary or desirable to foster and promote achievement of
the purposes of the Plan and shall have the authority to adopt such
modifications, procedures, subplans and the like as may be necessary or
desirable to comply with provisions of the laws or regulations of other
countries or jurisdictions in which the Company or any Related Company may
operate or have employees to ensure the viability of the benefits from Awards
granted to Participants employed in such countries or jurisdictions, meet the
requirements that permit the Plan to operate in a qualified or tax efficient
manner, comply with applicable foreign laws or regulations and meet the
objectives of the Plan.
17.7 NO TRUST OR FUND
The Plan is intended to constitute an "unfunded" plan. Nothing contained herein
shall require the Company to segregate any monies or other property, or shares
of Common Stock, or to create any trusts, or to make any special deposits for
any immediate or deferred amounts payable to any Participant, and no Participant
shall have any rights that are greater than those of a general unsecured
creditor of the Company.
17.8 SUCCESSORS
All obligations of the Company under the Plan with respect to Awards shall be
binding on any successor to the Company, whether the existence of such successor
is the result of a direct or indirect purchase, merger, consolidation, or
otherwise, of all or substantially all the business and/or assets of the
Company.
17.9 SEVERABILITY
If any provision of the Plan or any Award is determined to be invalid, illegal
or unenforceable in any jurisdiction, or as to any person, or would disqualify
the Plan or any Award under any law deemed applicable by the Plan Administrator,
such provision shall be construed or deemed amended to conform to applicable
laws, or, if it cannot be so construed or deemed amended without, in the Plan
Administrator's determination, materially altering the intent of the Plan or the
Award, such provision shall be stricken as to such jurisdiction, person or
Award, and the remainder of the Plan and any such Award shall remain in full
force and effect.
17.10 CHOICE OF LAW AND VENUE
The Plan, all Awards granted thereunder and all determinations made and actions
taken pursuant hereto, to the extent not otherwise governed by the laws of the
United States, shall be governed by the laws of the State of Washington without
giving effect to principles of
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conflicts of law. Participants irrevocably consent to the nonexclusive
jurisdiction and venue of the state and federal courts located in the State of
Washington.
17.11 LEGAL REQUIREMENTS
The granting of Awards and the issuance of shares of Common Stock under the Plan
is subject to all applicable laws, rules and regulations, and to such approvals
by any governmental agencies or national securities exchanges as may be
required.
SECTION 18. EFFECTIVE DATE
The effective date of the Plan (the "EFFECTIVE DATE") is the date of
effectiveness of the initial registration of the Common Stock under Section
12(b) or 12(g) of the Exchange Act. If the shareholders of the Company do not
approve the Plan within 12 months after the Board's adoption of the Plan, any
Incentive Stock Options granted under the Plan will be treated as Nonqualified
Stock Options.
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APPENDIX A
"ACQUIRED ENTITY" means any entity acquired by the Company or a Related Company
or with which the Company or a Related Company merges or combines.
"ACQUISITION PRICE" means the fair market value of the securities, cash or other
property, or any combination thereof, receivable upon consummation of a Company
Transaction in respect of a share of Common Stock.
"AWARD" means any Option, Stock Appreciation Right, Stock Award, Restricted
Stock, Stock Unit or cash-based award or other incentive payable in cash or in
shares of Common Stock, as may be designated by the Plan Administrator from time
to time.
"BOARD" means the Board of Directors of the Company.
"CAUSE," unless otherwise defined in the instrument evidencing an Award or in a
written employment, services or other agreement between the Participant and the
Company or a Related Company, means dishonesty, fraud, serious or willful
misconduct, unauthorized use or disclosure of confidential information or trade
secrets, or conduct prohibited by law (except minor violations), in each case as
determined by the Company's chief human resources officer or other person
performing that function or, in the case of directors and executive officers,
the Board, whose determination shall be conclusive and binding.
"CODE" means the Internal Revenue Code of 1986, as amended from time to time.
"COMMON STOCK" means the common stock, par value $0.001 per share, of the
Company.
"COMPANY" means Light Sciences Oncology, Inc., a Washington corporation.
"COMPANY TRANSACTION," unless otherwise defined in the instrument evidencing the
Award or in a written employment, services or other agreement between the
Participant and the Company or a Related Company, means consummation of:
(a) a merger or consolidation of the Company with or into any other company or
other entity;
(b) a statutory share exchange pursuant to which the Company's outstanding
shares are acquired or a sale in one transaction or a series of transactions
undertaken with a common purpose of all of the Company's outstanding voting
securities; or
(c) a sale, lease, exchange or other transfer in one transaction or a series of
related transactions undertaken with a common purpose of all or substantially
all of the Company's assets.
Where a series of transactions undertaken with a common purpose is deemed to be
a Company Transaction, the date of such Company Transaction shall be the date on
which the last of such transactions is consummated.
"COMPENSATION COMMITTEE" means the compensation committee as designated by the
Board, which is authorized to administer the Plan, as described in Section 3
hereof.
"DISABILITY," unless otherwise defined by the Plan Administrator or in the
instrument evidencing the Award or in a written employment, services or other
agreement between the Participant and the Company or a Related Company, means a
mental or physical impairment of the Participant that is expected to result in
death or that has lasted or is expected to last for a continuous period of 12
months or more and that causes the Participant to be unable to perform his or
her material duties for the Company or a Related Company and to be engaged in
any substantial gainful activity, in each case as determined by the Company's
chief human resources officer or other person performing that function or, in
the case of directors and executive officers, the Compensation Committee, each
of whose determination shall be conclusive and binding.
"EFFECTIVE DATE" has the meaning set forth in Section 18.
"ELIGIBLE PERSON" means any person eligible to receive an Award as set forth in
Section 5.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from time
to time.
"FAIR MARKET VALUE" means the per share fair market value of the Common Stock as
established in good faith by the Plan Administrator or, if the Common Stock is
publicly traded, the closing price for the Common Stock on any given date during
regular trading, or if not trading on that date, such price on the last
preceding date on which the Common Stock was traded, unless determined otherwise
by the Plan Administrator using such methods or procedures as it may establish.
"GRANT DATE" means the later of (a) the date on which the Plan Administrator
completes the corporate action authorizing the grant of an Award or such later
date specified by the Plan Administrator or (b) the date on which all conditions
precedent to an Award have been satisfied, provided that conditions to the
exercisability or vesting of Awards shall not defer the Grant Date.
"INCENTIVE STOCK OPTION" means an Option granted with the intention that it
qualify as an "incentive stock option" as that term is defined for purposes of
Section 422 of the Code or any successor provision.
"NONQUALIFIED STOCK OPTION" means an Option other than an Incentive Stock
Option.
"OPTION" means a right to purchase Common Stock granted under Section 7.
"OPTION EXPIRATION DATE" has the meaning set forth in Section 7.6.
R-B
"OPTION TERM" means the maximum term of an Option as set forth in Section 7.3.
"PARTICIPANT" means any Eligible Person to whom an Award is granted.
"PLAN" means the Light Sciences Oncology, Inc. 2005 Equity Incentive Plan.
"PLAN ADMINISTRATOR" has the meaning set forth in Section 3.1.
"RELATED COMPANY" means any entity that, directly or indirectly, is in control
of, is controlled by or is under common control with the Company.
"RELATED PARTY TRANSACTION" means (a) a merger or consolidation of the Company,
or a statutory share exchange pursuant to which the Company's outstanding shares
are acquired, in which the holders of the outstanding voting securities of the
Company immediately prior to the merger or consolidation hold at least a
majority of the outstanding voting securities of the Successor Company
immediately after the merger, consolidation or statutory share exchange; (b) a
sale, lease, exchange or other transfer of all or substantially all of the
Company's assets to a majority-owned subsidiary company; or (c) a transaction
undertaken for the principal purpose of restructuring the capital of the
Company, including, but not limited to, reincorporating the Company in a
different jurisdiction, converting the Company to a limited liability company or
creating a holding company.
"RESTRICTED STOCK" means an Award of shares of Common Stock granted under
Section 10, the rights of ownership of which are subject to restrictions
prescribed by the Plan Administrator.
"RETIREMENT," unless otherwise defined in the instrument evidencing the Award or
in a written employment, services or other agreement between the Participant and
the Company or a Related Company, means "retirement" as defined for purposes of
the Plan by the Plan Administrator or the Company's chief human resources
officer or other person performing that function or, if not so defined, means
Termination of Service on or after the date the Participant reaches "normal
retirement age," as that term is defined in Section 411(a)(8) of the Code.
"SECTION 409A" means Section 409A of the Code, including any proposed and final
regulations and other guidance issued thereunder by the Department of the
Treasury and/or the Internal Revenue Service.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time to time.
"STOCK APPRECIATION RIGHT" or "SAR" means a right granted under Section 9.1 to
receive the excess of the Fair Market Value of a specified number of shares of
Common Stock over the grant price.
R-B
"STOCK AWARD" means an Award of shares of Common Stock granted under Section 10,
the rights of ownership of which are not subject to restrictions prescribed by
the Plan Administrator.
"STOCK UNIT" means an Award denominated in units of Common Stock granted under
Section 10.
"SUBSTITUTE AWARDS" means Awards granted or shares of Common Stock issued by the
Company in substitution or exchange for awards previously granted by an Acquired
Entity.
"SUCCESSOR COMPANY" means the surviving company, the successor company, the
acquiring company or its parent, as applicable, in connection with a Company
Transaction.
"TERMINATION OF SERVICE" means a termination of employment or service
relationship with the Company or a Related Company for any reason, whether
voluntary or involuntary, including by reason of death, Disability or
Retirement. Any question as to whether and when there has been a Termination of
Service for the purposes of an Award and the cause of such Termination of
Service shall be determined by the Company's chief human resources officer or
other person performing that function or, with respect to directors and
executive officers, by the Compensation Committee, whose determination shall be
conclusive and binding. Transfer of a Participant's employment or service
relationship between the Company and any Related Company shall not be considered
a Termination of Service for purposes of an Award. Unless the Plan Administrator
determines otherwise, a Termination of Service shall be deemed to occur if the
Participant's employment or service relationship is with an entity that has
ceased to be a Related Company.
"VESTING COMMENCEMENT DATE" means the Grant Date or such other date selected by
the Plan Administrator as the date from which an Award begins to vest.
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