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Exhibit 10.3
WALL DATA INCORPORATED
1993 STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
AS AMENDED AND RESTATED ON OCTOBER 15, 1996
SECTION 1. PURPOSES
The purposes of the Wall Data Incorporated 1993 Stock Option Plan for
Non-Employee Directors (the "Plan") are to attract and retain the services of
experienced and knowledgeable non-employee directors of Wall Data Incorporated
(the "Corporation") and to provide an incentive for such directors to increase
their proprietary interests in the Corporation's long-term success and
progress.
SECTION 2. SHARES SUBJECT TO THE PLAN
Subject to adjustment in accordance with Section 6 hereof, the total
number of shares of the Corporation's common stock, no par value per share (the
"Common Stock"), for which options may be granted under the Plan is one hundred
fifty thousand (150,000) (the "Shares"). The Shares shall be shares presently
authorized but unissued and shall include shares representing the unexercised
portion of any option granted under the Plan which expires or terminates
without being exercised in full.
SECTION 3. ADMINISTRATION OF THE PLAN
The administrator of the Plan (the "Plan Administrator") shall be the
Board of Directors of the Corporation (the "Board"). Subject to the terms of
the Plan, the Plan Administrator shall have the power to construe the
provisions of the Plan, to determine all questions arising thereunder and to
adopt and amend such rules and regulations for the administration of the Plan
as it may deem desirable. No member of the Plan Administrator shall
participate in any vote by the Plan Administrator on any matter materially
affecting the rights of any such member under the Plan.
SECTION 4. PARTICIPATION IN THE PLAN
Each member of the Board elected or appointed who is not otherwise an
employee of the Corporation or any parent or subsidiary corporation (an
"Eligible Director") shall automatically receive the grant of an option (the
"First Option") to purchase 2,500 shares if such director is elected as a
director at this Corporation's Annual Meeting of Shareholders on January 28,
1993. The First Option shall be automatically granted on the first day on
which the Corporation's Common Stock is publicly traded. Each Eligible
Director whose initial election or appointment to the
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Stock Option Plan For Non-Employee Directors
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Board of Directors occurs on or after January 29, 1993 and before March 15,
1996, shall automatically receive the grant of an option (the "Initial Option")
to purchase 5,000 shares; each Eligible Director whose initial election or
appointment to the Board of Directors occurs on or after March 15, 1996 shall
receive an Initial Option to purchase 10,000 shares. The Initial Option shall
be automatically granted on the day such Eligible Director is so elected or
appointed.
Commencing with the Annual Meeting of Shareholders as described in the
Corporation's Bylaws (the "Annual Meeting") for 1993 through the Annual Meeting
for 1995, each Eligible Director shall automatically receive the grant of an
option (the "Annual Option") to purchase 1,250 shares, except that the Annual
Options for 1993 shall be granted on the first day on which the Corporation's
Common Stock is publicly traded; and commencing with the Annual Meeting for
1996 (May 1996) each Eligible Director shall automatically receive an Annual
Option to purchase 2,500 shares. Each Eligible Director shall be entitled to
receive an Annual Option notwithstanding the receipt of a First Option or
Initial Option in the same calendar year.
SECTION 5. OPTION TERMS
Each option granted to an Eligible Director under the Plan and the
issuance of Shares thereunder shall be subject to the following terms:
5.1 OPTION AGREEMENT
Each option granted under the Plan shall be evidenced by an option
agreement (an "Agreement") duly executed on behalf of the Corporation. Each
Agreement shall comply with and be subject to the terms and conditions of the
Plan. Any Agreement may contain such other terms, provisions and conditions
not inconsistent with the Plan as may be determined by the Plan Administrator.
5.2 OPTION EXERCISE PRICE
The option exercise price for each option granted under the Plan shall
be the fair market value of the Shares covered by the option at the time the
option is granted. For purposes of the Plan, "fair market value" shall be the
average of the high and low sales prices at which the Common Stock was sold on
such date as reported by the NASDAQ National Market System on such date or, if
no Common Stock was traded on such date, on the next preceding date on which
Common Stock was so traded.
5.3 VESTING AND EXERCISABILITY
A First Option for an Eligible Director shall vest and become
exercisable 180 days after the date of grant of the First Option.
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An Initial Option to an Eligible Director shall vest and become
exercisable in accordance with the following schedule:
Period of Eligible Directors' Continuous
Service as a Director With the Company From
the Date the Initial Option Portion of Total Option Which Is
is Granted Exercisable
------------------------------------------- --------------------------------
upon the first anniversary date of the Initial 25%
Option grant date
each completed month after such first An additional
anniversary date 2.0833%
An Annual Option to an Eligible Director shall vest and become
exercisable upon the date of the Annual Meeting next following the date of
grant of such Annual Option.
5.4 TIME AND MANNER OF EXERCISE OF OPTION
Each option may be exercised in whole or in part at any time and from
time to time; provided, however, that no fewer than 100 Shares (or the
remaining Shares then purchasable under the option, if less than 100 Shares)
may be purchased upon any exercise of option rights hereunder and that only
whole Shares will be issued pursuant to the exercise of any option.
Any option may be exercised by giving written notice, signed by the
person exercising the option, to the Corporation stating the number of Shares
with respect to which the option is being exercised, accompanied by payment in
full for such Shares, which payment may be in whole or in part (i) in cash or
by check, (ii) in shares of Common Stock already owned for at least six (6)
months by the person exercising the option, valued at fair market value at the
time of such exercise, or (iii) by delivery of a properly executed exercise
notice, together with irrevocable instructions to a broker, to properly deliver
to the corporation the amount of sale or loan proceeds to pay the exercise
price, all in accordance with the regulations of the Federal Reserve Board.
5.5 TERM OF OPTIONS
Each option shall expire five years from the date of the granting
thereof, but shall be subject to earlier termination as follows:
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(a) In the event that an optionee ceases to be a director
of the Corporation for any reason other than the death or total
disability of the optionee, the unvested portion of the options
granted to such optionee shall terminate immediately and the vested
portion of the options granted to such optionee may be exercised by
him or her only within three months after the date such optionee
ceases to be a director of the Corporation.
(b) In the event of the death of an optionee, whether
during the optionee's service as a director or during the three-month
period referred to in Section 5.5(a), the unvested portion of the
options granted to such optionee shall terminate immediately and the
vested portion of the options granted to such optionee shall be
exercisable, and such options shall expire unless exercised within one
year after the date of the optionee's death, by the legal
representatives or the estate of such optionee, by any person or
persons whom the optionee shall have designated in writing on forms
prescribed by and filed with the Corporation or, if no such
designation has been made, by the person or persons to whom the
optionee's rights have passed by will or the laws of descent and
distribution.
(c) If an Eligible Director's service as a Director of
the Company ceases because of a total disability, the unvested portion
of the options granted to such optionee shall terminate immediately
and the vested portion of the Eligible Director's option shall not
terminate until the end of the 12-month period following such
cessation (unless by its terms it sooner terminates and expires). As
used in this Plan, the term "total disability" refers to a mental or
physical impairment of the Eligible Director which is expected to
result in death or which has lasted or is expected to last for a
continuous period of 12 months or more and which causes the Eligible
Director to be unable, in the opinion of the Company and two
independent physicians, to perform his or her duties for the Company.
Total disability shall be deemed to have occurred on the first day
after the Company and the independent physicians have furnished their
opinion of total disability to the Plan Administrator.
5.6 TRANSFERABILITY
During an optionee's lifetime, an option may be exercised only by the
optionee or a permitted assignee or transferee (as provided below). Options
granted under the Plan and the rights and privileges conferred thereby shall
not be subject to execution, attachment or similar process and may not be
transferred, assigned, pledged or hypothecated in any manner (whether by
operation of law or otherwise) other than by (a) will or the applicable laws of
descent and distribution, (b) pursuant to a qualified domestic relation order,
or (c) by gift or other transfer to either (i) a spouse or other
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immediate family member or (ii) any trust, partnership or other entity in which
the optionee or such optionee's spouse or other immediate family member has a
substantial beneficial interest; provided, however, that any option so assigned
or transferred shall be subject to all the same terms and conditions contained
in the instrument evidencing the award. In addition, a recipient of an option
may designate in writing during the optionee's lifetime a beneficiary to
receive and exercise options in the event of the optionee's death (as provided
in Section 5.5(b)). Any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of any option under the Plan or of any right or privilege
conferred thereby, contrary to the provisions of the Plan, or the sale or levy
or any attachment or similar process upon the rights and privileges conferred
hereby, shall be null and void.
5.7 HOLDING PERIOD
If an individual subject to Section 16 of the Exchange Act sells
shares of Common Stock obtained upon the exercise of any option granted under
the Plan within six (6) months after the date the option was granted, such sale
may result in short-swing profit liability under Section 16(b) of the Exchange
Act.
5.8 PARTICIPANT'S OR SUCCESSOR'S RIGHTS AS STOCKHOLDER
Neither the recipient of an option under the Plan nor the optionee's
successor(s) in interest shall have any rights as a stockholder of the
Corporation with respect to any Shares subject to an option granted to such
person until such person becomes a holder of record of such Shares.
5.9 LIMITATION AS TO DIRECTORSHIP
Neither the Plan, nor the granting of an option, nor any other action
taken pursuant to the Plan shall constitute or be evidence of any agreement or
understanding, express or implied, that an optionee has a right to continue as
a director for any period of time or at any particular rate of compensation.
5.10 REGULATORY APPROVAL AND COMPLIANCE
The Corporation shall not be required to issue any certificate or
certificates for Shares upon the exercise of an option granted under the Plan,
or record as a holder of record of Shares the name of the individual exercising
an option under the Plan, without obtaining to the complete satisfaction of the
Plan Administrator the approval of all regulatory bodies deemed necessary by
the Plan Administrator, and without complying, to the Plan Administrator's
complete satisfaction, with all rules and regulations under federal, state or
local law deemed applicable by the Plan Administrator.
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SECTION 6. CAPITAL ADJUSTMENTS
The aggregate number of Shares with respect to which options may be
granted under the Plan, as provided in Section 2, the number of Shares subject
to each outstanding option and the price per share specified in such options,
shall all be proportionately adjusted for any increase or decrease in the
number of issued shares of common stock of the Corporation resulting from a
subdivision or consolidation of shares or any other similar capital adjustment
or the payment of a stock dividend.
In the event of any adjustment in the number of Shares covered by any
option, any fractional Shares resulting from such adjustment shall be
disregarded and each such option shall cover only the number of full Shares
resulting from such adjustment.
Upon a merger (other than a merger of the Corporation in which the
holders of the Corporation's common stock immediately prior to the merger have
the same proportionate ownership of sommon stock in the surviving corporation
immediately after the merger), consolidation, acquisition of property or stock,
separation, reorganization(other than a mere reincorporation or the creation of
a holding company) or liquidation of the Corporation (each a "corporate
transaction"), as a result of which the shareholders of the Corporation receive
cash, stock or other property in exchange for or in connection with their
shares of the Corporation's common stock, then the exercisability of each
option outstanding under the Plan shall be automatically accelerated so that
each such option shall, immediately prior to the specified effective date for
any such corporate transaction, become fully exercisable with respect to the
total number of Shares purchasable under such option and may be exercised for
all or any portion of such Shares. To the extent such option is not exercised,
it shall terminate, except that in the event of a corporate transaction in
which shareholders of the Corporation receive capital stock of another
corporation in exchange for their shares of the Corporation's common stock,
such unexercised option shall be assumed or an equivalent option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation. Any such assumed or equivalent option shall be fully
exercisable with respect to the total number of Shares purchasable under such
option.
Upon a merger of the Company in which the holders of the Corporation's
common stock immediately prior to the merger have the same proportionate
ownership of common stock in the surviving corporation immediately after the
merger, a mere reincorporation or the creation of a holding company, each
option outstanding under the Plan shall be assumed or an equivalent option
shall be substituted by the successor corporation or a parent or subsidiary of
such corporation, and the vesting schedule set forth herein shall continue to
apply to such assumed or equivalent option.
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SECTION 7. EXPENSES OF THE PLAN
All costs and expenses of the adoption and administration of the Plan
shall be borne by the Corporation; none of such expenses shall be charged to
any optionee.
SECTION 8. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall be effective upon adoption by the Corporation's
shareholders. The Plan shall continue in effect until it is terminated by
action of the Board or the Corporation's shareholders, but such termination
shall not affect the then-outstanding terms of any options.
SECTION 9. COMPLIANCE WITH RULE 16B-3
It is the intention of the Corporation that the Plan comply in all
respects with the requirements for a "formula plan" within the meaning
attributed to that term for purposes of Rule 16b-3 promulgated under Section
16(b) of the Exchange Act. Therefore, if any Plan provision is later found not
to be in compliance with such requirements, that provision shall be deemed null
and void, and in all events the Plan shall be construed in favor of its meeting
such requirements.
SECTION 10. TERMINATION AND AMENDMENT OF THE PLAN
The Board may amend, terminate or suspend the Plan at any time, in its
sole and absolute discretion; provided, however, that if required to qualify
the Plan as a formula plan for purposes of Rule 16b-3 promulgated under Section
16(b) of the Exchange Act, no amendment may be made more than once every six
(6) months that would change the amount, price, timing or vesting of the
options, other than to comport with changes in the Internal Revenue Code of
1986, as amended, or the rules and regulations promulgated thereunder; and
provided, further, that no amendment that would
(a) materially increase the number of Shares that may be issued
under the Plan, or
(b) otherwise require shareholder approval under any applicable
law or regulation shall be made without the approval of the
Corporation's shareholders.
* * * * *
Adopted by the Corporation's Board of Directors on January 7, 1993 and
approved by the Corporation's shareholders on January 28, 1993.
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Amendment No. 1 adopted by the Corporation's Board of Directors on
March 18, 1996 and approved by the Corporation's shareholders on May 21, 1996.
Restated to incorporate Amendment No. 1 on March 18, 1996. Amended and
Restated on October 15, 1996.
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