Exhibit 10.3
GOAMERICA, INC.
2005 EQUITY COMPENSATION PLAN
(As amended and restated through October 9, 2007)
1. Purposes of the Plan. The purposes of this GoAmerica, Inc. 2005 Equity
Compensation Plan (the "Plan") are to attract and retain the best available
personnel for positions of substantial responsibility, to provide additional
incentives to Employees, Directors and Consultants, and to promote the success
of the Company and any Affiliate. 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, Stock Awards and
Unrestricted Shares may also be granted under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
"Administrator" means the committee which has been delegated the
responsibility of administering the Plan in accordance with Section 4 of the
Plan.
"Affiliate" means any Parent and/or Subsidiary.
"Applicable Laws" means the requirements relating to the
administration of equity compensation plans under the applicable corporate and
securities laws of any of the states in the United States, U.S. federal
securities laws, the Code, any stock exchange or quotation system on which the
Common Stock is listed or quoted and the applicable laws of any foreign country
or jurisdiction where Awards are, or will be, granted under the Plan.
"Award" means an Option, a Stock Purchase Right, a Stock Award
and/or the grant of Unrestricted Shares.
"Board" means the Board of Directors of the Company.
"Cause" means, unless otherwise specifically provided in the
Participant's Option Agreement, Restricted Stock Purchase Agreement or Stock
Award Agreement, a finding by the Administrator that the Participant's
employment or service with the Company or any Affiliate was terminated due to
one or more of the following: (i) the Participant's performance of duties in an
incompetent manner; (ii) the Participant's commission of any act of fraud,
insubordination, misappropriation or personal dishonesty relating to or
involving the Company or any Affiliate in any material way; (iii) the
Participant's gross negligence; (iv) the Participant's violation of any express
direction of the Company or of any Affiliate or any material violation of any
rule, regulation, policy or plan established by the Company or any Affiliate
from time to time regarding the conduct of its employees or its business; (v)
the Participant's disclosure or use of confidential information of the Company
or any Affiliate, other than as required in the performance of the Participant's
duties; (vi) actions by the Participant that are clearly contrary to the best
interests of the Company and/or its Affiliates; (vii) the Participant's
conviction of a crime constituting a felony or any other crime involving moral
turpitude, or no conviction, but the substantial weight of credible evidence
indicates that the Participant has committed such a crime; (viii) the
Participant's use of alcohol or any unlawful controlled substance to an extent
that it interferes with the performance of the Participant's duties; or (ix) any
other act or omission which in the determination of the Administrator is
materially detrimental to the business of the Company or of an Affiliate.
Notwithstanding the foregoing, if a Participant has entered into a written
employment or service agreement with the Company that specifies the conditions
or circumstances under which the Participant's service may be terminated for
cause, then the terms of such
agreement shall apply for purposes of determining whether "Cause" shall have
occurred for purposes of this Plan.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the common stock, par value $.01 per share, of
the Company.
"Company" means GoAmerica, Inc., a Delaware corporation.
"Consultant" means any person, including an advisor, engaged by the
Company or an Affiliate to render services to such entity, other than an
Employee or a Director.
"Director" means a member of the Board.
"Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
"Employee" means any person, including officers and Directors,
serving as an employee of the Company or an Affiliate. An individual shall not
cease to be an Employee 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. For purposes of an Option
initially granted as an Incentive Stock Option, if a leave of absence of more
than three months precludes such Option from being treated as an Incentive Stock
Option under the Code, such Option thereafter shall be treated as a Nonstatutory
Stock Option for purposes of this Plan. Neither service as a Director nor
payment of a director's fee by the Company shall be sufficient to constitute
"employment" by the Company.
"Fair Market Value" means, as of any date, the value of Common Stock
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 Capital Market of The Nasdaq Stock Market, the
Fair Market Value of a Share of Common Stock shall be the closing sales price of
a Share of Common Stock (or the closing bid, if no such sales were reported) as
quoted on such exchange or system for the last market trading day prior to the
time 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 is not listed in the manner contemplated by clause (i)
above, 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 last
market trading day prior to the day of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable; or
(iii) if neither clause (i) above nor clause (ii) above
applies, the Fair Market Value shall be determined in good faith by the
Administrator based on the reasonable application of a reasonable valuation
method.
"Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
"Nonstatutory Stock Option" means an Option not intended to qualify
as an Incentive Stock Option.
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"Notice of Grant" means a written or electronic notice evidencing
certain terms and conditions of an individual Option grant, Stock Purchase Right
grant, Stock Award grant or grant of Unrestricted Shares. The Notice of Grant
applicable to Stock Options shall be part of the Option Agreement.
"Option" means a stock option granted pursuant to the Plan.
"Option Agreement" means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. Each
Option Agreement shall be subject to the terms and conditions of the Plan.
"Optioned Stock" means the Common Stock subject to an Option or
Stock Purchase Right.
"Optionee" means the holder of an outstanding Option or Stock
Purchase Right granted under the Plan.
"Parent" means a "parent corporation" of the Company (or, in the
context of Section 15(c) of the Plan, of a successor corporation), whether now
or hereafter existing, as defined in Section 424(e) of the Code.
"Participant" shall mean any Service Provider who holds an Option, a
Stock Purchase Right, Restricted Stock, a Stock Award or Unrestricted Shares
granted or issued pursuant to the Plan.
"Restricted Stock" means shares of Common Stock acquired pursuant to
a grant of Stock Purchase Rights under Section 11 of the Plan.
"Restricted Stock Purchase Agreement" means a written agreement
between the Company and an Optionee evidencing the terms and restrictions
applicable to stock purchased under a Stock Purchase Right. Each Restricted
Stock Purchase Agreement shall be subject to the terms and conditions of the
Plan and the applicable Notice of Grant.
"Service Provider" means an Employee, Director or Consultant.
"Share" means a share of the Common Stock, as adjusted in accordance
with Section 15 of the Plan.
"Stock Award" means an Award of Shares pursuant to Section 12 of the
Plan.
"Stock Award Agreement" means an agreement, approved by the
Administrator, providing the terms and conditions of a Stock Award.
"Stock Award Shares" means Shares subject to a Stock Award.
"Stock Awardee" means the holder of an outstanding Stock Award
granted under the Plan.
"Stock Purchase Right" means the right to purchase Common Stock
pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.
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"Subsidiary" means a "subsidiary corporation" of the Company (or, in
the context of Section 15(c) of the Plan, of a successor corporation), whether
now or hereafter existing, as defined in Section 424(f) of the Code.
"Unrestricted Shares" means a grant of Shares made on an
unrestricted basis pursuant to Section 13 of the Plan.
3. Stock Subject to the Plan. Subject in all cases to Section 15 of the
Plan, the number of Shares subject to the Plan shall be governed by this Section
3. The maximum number of Shares of Common Stock that may be issued under the
Plan shall be 2,600,000. For purposes of the foregoing limitation, the Shares of
Common Stock underlying any Awards which are forfeited, canceled, reacquired by
the Company, satisfied without the issuance of Common Stock or otherwise
terminated (other than by exercise) shall be added back to the number of Shares
of Common Stock available for issuance under the Plan. All Shares of Common
Stock that may be issued under the Plan shall be available for grant as
Incentive Stock Options. Notwithstanding the foregoing, Options with respect to
no more than 400,000 Shares of Common Stock may be granted to any one individual
Participant during any one (1) calendar year period. Common Stock to be issued
under the Plan may be either authorized and unissued Shares or Shares held in
treasury by the Company.
4. Administration of the Plan.
(a) Administration. The Plan shall be administered by a committee of
the Board comprised of two or more "outside directors" within the meaning of
Section 162(m) of the Code and the regulations promulgated thereunder.
(b) Powers of the Administrator. Subject to the provisions of the
Plan, the Administrator shall have the authority, in its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Options, Stock
Purchase Rights, Stock Awards and Unrestricted Shares may be granted hereunder;
(iii) to determine the number of Shares of Common Stock to be
covered by each Award granted hereunder;
(iv) to approve forms of agreement for use under the Plan;
(v) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any Award granted hereunder and of any Restricted
Stock Purchase Agreement. 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 provisions, and any restriction or
limitation regarding any Option, Stock Purchase Right or Stock Award, or the
Shares of Common Stock relating thereto, based in each case on such factors as
the Administrator, in its sole discretion, shall determine;
(vi) to construe and interpret the terms of the Plan, Awards
granted pursuant to the Plan and agreements entered into pursuant to the Plan;
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(vii) 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;
(viii) to modify or amend each Award (subject to Section 18(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;
(ix) to allow grantees to satisfy withholding tax obligations
by having the Company withhold from the Shares to be issued upon exercise of an
Option that number of Shares having a Fair Market Value equal to the amount
required to be withheld, provided that withholding is calculated at the minimum
statutory withholding level. The Fair Market Value of the Shares to be withheld
shall be determined on the date that the amount of tax to be withheld is to be
determined. All determinations to have Shares withheld for this purpose shall be
made by the Administrator in its discretion;
(x) to reduce the exercise price of any Option or Stock
Purchase Right to the then current Fair Market Value if the Fair Market Value of
the Common Stock covered by such Option or Stock Purchase Right shall have
declined since the date the Option or Stock Purchase Right was granted;
(xi) to authorize any person to execute on behalf of the
Company any agreement entered into pursuant to the Plan and any instrument
required to effect the grant of an Award previously granted by the
Administrator; 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, determinations and interpretations shall be final and binding on all
holders of Awards and Restricted Stock. Neither the Administrator nor any member
or delegate thereof, shall be liable for any act, omission, interpretation,
construction or determination made in good faith in connection with the Plan,
and each of the foregoing shall be entitled in all cases to indemnification and
reimbursement by the Company in respect of any claim, loss, damage or expense
(including without limitation reasonable attorneys' fees) arising or resulting
therefrom to the fullest extent permitted by law and/or under any directors' and
officers' liability insurance coverage which may be in effect from time to time.
5. Eligibility. Nonstatutory Stock Options, Stock Purchase Rights, Stock
Awards and Unrestricted Shares may be granted to Service Providers. Incentive
Stock Options may be granted only to Employees. Notwithstanding anything
contained herein to the contrary, an Award may be granted to a person who is not
then a Service Provider; provided, however, that the grant of such Award shall
be conditioned upon such person becoming a Service Provider at or prior to the
time of the execution of the agreement evidencing such Award.
6. Limitations.
(a) Each Option shall be designated in the Option Agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, if a single Employee becomes eligible in any
given year to exercise Incentive Stock Options for Shares having a Fair Market
Value in excess of $100,000, those Options representing the excess shall be
treated as Nonstatutory Stock Options. In the previous sentence, "Incentive
Stock Options" include Incentive Stock Options granted under any plan of the
Company or any Affiliate. For the purpose of deciding which Options apply to
Shares that "exceed" the $100,000 limit, Incentive Stock Options shall be taken
into
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account in the same order as granted. The Fair Market Value of the Shares shall
be determined as of the time the Option with respect to such Shares is granted.
(b) Neither the Plan nor any Award nor any agreement entered into
pursuant to the Plan shall confer upon a Participant any right with respect to
continuing the grantee's relationship as a Service Provider with the Company or
any Affiliate, nor shall they interfere in any way with the Participant's right
or the right of the Company or any Affiliate to terminate such relationship at
any time, with or without cause.
7. Term of the Plan. Subject to Section 22 of the Plan, the Plan shall
become effective upon its adoption by the Board. It shall continue in effect for
a term of ten (10) years unless terminated earlier under Section 18 of the Plan.
8. Term of Options. The term of each Option shall be stated in the
applicable Option Agreement. 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 applicable Option Agreement. However, in the case of an
Incentive Stock Option granted to an Optionee who, at the time the Incentive
Stock Option is granted, owns, directly or indirectly, stock representing more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Incentive
Stock Option shall be five (5) years from the date of grant or such shorter term
as may be provided in the applicable Option Agreement.
9. Option Exercise Price; Exercisability.
(a) Exercise Price. The per Share exercise price for the Shares to
be issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:
(i) In the case of an Incentive Stock Option:
(A) granted to an Employee who, at the time the
Incentive Stock Option is granted, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any
Affiliate, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant, or
(B) granted to any Employee other than an Employee
described in paragraph (A) immediately above, the per Share exercise price shall
be no less than 100% of the Fair Market Value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option, the per Share
exercise price shall be determined by the Administrator; provided, however, that
the per Share exercise price of a Nonstatutory Stock Option shall be no less
than 100% of the Fair Market Value per Share on the date of grant as (determined
by the Administrator in good faith) in the case of a Nonstatutory Stock Option
intended to qualify as "performance-based compensation" within the meaning of
Section 162(m) of the Code.
(iii) Notwithstanding the foregoing, Options may be granted
with a per Share exercise price of less than 100% (or 110%, if clause (i)(A)
above applies) of the Fair Market Value per Share on the date of grant pursuant
to a merger or other comparable corporate transaction.
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(b) Exercise Period and Conditions. At the time that an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions that must be satisfied before the
Option may be exercised.
10. Exercise of Options; Consideration.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted 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; provided, however, that unless otherwise
determined by the Administrator, each Option shall vest and become exercisable
as to 25% of the Shares subject to such Option on the first anniversary of its
date of grant, and as to 1/36th of the remaining Shares subject to such Option
each full month thereafter. Unless the Administrator provides otherwise, vesting
of Options granted hereunder shall be tolled during any unpaid leave of absence.
An Option may not be exercised for a fraction of a Share. An Option shall be
deemed exercised when the Company receives: (i) written or electronic 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 Section 10(f) of the Plan. Shares issued upon exercise of an
Option shall be issued in the name of the Optionee. Until the Shares are issued
(as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no 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 Shares 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 Shares are issued, except as provided in Section 15 of
the Plan. 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 Relationship as a Service Provider. If an
Optionee ceases to be a Service Provider, other than as a result of the
Optionee's death, Disability or termination for Cause, the Optionee may exercise
his or her Option within such period of time as is specified in the Option
Agreement to the extent that the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set
forth in the Option Agreement). In the absence of a specified time in the Option
Agreement and except as otherwise provided in Sections 10(c), 10(d) and 10(e) of
this Plan, the Option shall remain exercisable for three months following the
Optionee's termination (but in no event later than the expiration of the term of
such Option). If, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option in full within the time specified by the
Administrator, the unexercised portion of the Option shall terminate, and the
Shares covered by such unexercised portion of the Option shall revert to the
Plan. An Optionee who changes his or her status as a Service Provider (e.g.,
from being an Employee to being a Consultant) shall not be deemed to have ceased
being a Service Provider for purposes of this Section 10(b), nor shall a
transfer of employment among the Company and any Affiliate be considered a
termination of employment; provided, however, that if an Optionee owning
Incentive Stock Options ceases being an Employee but continues as a Service
Provider, such Incentive Stock Options shall be deemed to be Nonstatutory
Options three months after the date of such cessation.
(c) Disability of an Optionee. If an Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option Agreement
to the extent the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement). In
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the absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee's termination (but in
no event later than the expiration of the term of such Option). If, on the date
of termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option in full
within the time specified herein, the unexercised portion of the Option shall
terminate, and the Shares covered by such unexercised portion of the Option
shall revert to the Plan.
(d) Death of an Optionee. If an Optionee dies while a Service
Provider, the Option may be exercised within such period of time as is specified
in the Option Agreement (but in no event later than the expiration of the term
of such Option as set forth in the Option Agreement), by the Optionee's estate
or by a person who acquires the right to exercise the Option by bequest or
inheritance, but only to the extent that the Option is vested on the date of
death. In the absence of a specified time in the Option Agreement, the Option
shall remain exercisable for twelve (12) months following the Optionee's death
(but in no event later than the expiration of the term of such Option). If, at
the time of death, the Optionee is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall revert to the
Plan. If the Option is not so exercised in full within the time specified
herein, the unexercised portion of the Option shall terminate, and the Shares
covered by the unexercised portion of such Option shall revert to the Plan.
(e) Termination for Cause. Unless otherwise provided in a Service
Provider's Option Agreement, if a Service Provider's relationship with the
Company is terminated for Cause, then such Service Provider shall have no right
to exercise any of such Service Provider's Options at any time on or after the
effective date of such termination.
(f) Form of Consideration. The Administrator shall determine the
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) other Shares which (A) 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;
(iv) consideration received by the Company under a cashless
exercise program permitted by the Administrator;
(v) 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;
(vi) any combination of the foregoing methods of payment; or
(vii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.
11. Stock Purchase Rights.
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(a) Rights to Purchase. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with Options or 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 or electronically, by means of a Notice of Grant
and/or a Restricted Stock Purchase Agreement in the form determined by the
Administrator, of the terms, conditions and restrictions related to the offer,
including the number of Shares that the offeree shall be entitled to purchase
and the price to be paid for such Shares. The offer shall be accepted by
execution of a Restricted Stock Purchase Agreement in the form determined by the
Administrator.
(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's service with the Company for any reason (including death or
Disability). 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; provided, however, that unless otherwise determined by the
Administrator, the restrictions shall lapse as to 25% of the Shares subject to
such Restricted Stock Purchase Agreement on the first anniversary of its date of
grant, and as to 1/36th of the remaining Shares subject to such Restricted Stock
Purchase Agreement each full month thereafter.
(c) Other Provisions. The Restricted Stock Purchase Agreement shall
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.
(d) Rights as a Shareholder. Once the Stock Purchase Right is
exercised, 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 15
of the Plan.
12. Stock Awards. The Administrator may, in its sole discretion, grant (or
sell at par value or such higher purchase price as it determines) Shares to any
Service Provider, as defined herein, subject to such terms and conditions as the
Administrator sets forth in a Stock Award Agreement evidencing such grant. Stock
Awards may be granted or sold in respect of past services or other valid
consideration or in lieu of any cash compensation otherwise payable to such
individual. The grant of Stock Awards shall be subject to the following
provisions:
(a) At the time a Stock Award is made, the Administrator shall
establish a vesting period (the "Restricted Period") applicable to the Stock
Award Shares subject to such Stock Award. Subject to the right of the
Administrator to establish a different Restricted Period, the Restricted Period
of a Stock Award shall lapse as follows: the restrictions shall lapse as to 25%
of the Shares subject to such Stock Award on the first anniversary of its date
of grant, and as to 1/36th of the remaining Shares subject to such Stock Award
each full month thereafter. The Administrator may, in its sole discretion, at
the time a grant is made, prescribe restrictions in addition to the expiration
of the Restricted Period, including the satisfaction of corporate or individual
performance objectives. None of the Stock Award Shares may be sold, transferred,
assigned, pledged or otherwise encumbered or disposed of during the Restricted
Period applicable to such Stock Award Shares or prior to the satisfaction of any
other restrictions prescribed by the Administrator with respect to such Stock
Award Shares.
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(b) The Company shall issue, in the name of each Service Provider to
whom Stock Award Shares have been granted, stock certificates representing the
total number of Stock Award Shares granted to such person, as soon as reasonably
practicable after the grant. The Company, at the direction of the Administrator,
shall hold such certificates, properly endorsed for transfer, for the Stock
Awardee's benefit until such time as the Stock Award Shares are forfeited to the
Company, or the restrictions lapse.
(c) Unless otherwise provided by the Administrator, holders of Stock
Award Shares shall have the right to vote such Shares and have the right to
receive any cash dividends with respect to such Shares. All distributions, if
any, received by a Stock Awardee with respect to Stock Award Shares as a result
of any stock split, stock distribution, combination of shares, or other similar
transaction shall be subject to the restrictions of this Section 12.
(d) Any Stock Award Shares granted to a Service Provider pursuant to
the Plan shall be forfeited if the Stock Awardee voluntarily terminates
employment with the Company or its Affiliates or resigns or voluntarily
terminates his consultancy arrangement or directorship with the Company or its
Affiliates, or if the Stock Awardee's employment or consultancy arrangement or
directorship is terminated for Cause prior to the expiration or termination of
the applicable Restricted Period and the satisfaction of any other conditions
applicable to such Stock Award Shares. Upon such forfeiture, the Stock Award
Shares that are forfeited shall be retained in the treasury of the Company and
be available for subsequent awards under the Plan. If the Stock Awardee's
employment, consultancy arrangement or directorship terminates for any other
reason, the Stock Award Shares held by such person shall be forfeited, unless
the Administrator, in its sole discretion, shall determine otherwise.
(e) Upon the expiration or termination of the Restricted Period and
the satisfaction of any other conditions prescribed by the Administrator, the
restrictions applicable to the Stock Award Shares shall lapse and, at the Stock
Awardee's request, a stock certificate for the number of Stock Award Shares with
respect to which the restrictions have lapsed shall be delivered, free of all
such restrictions, to the Stock Awardee or his beneficiary or estate, as the
case may be.
13. Unrestricted Shares. The Administrator may grant Unrestricted Shares
in accordance with the following provisions:
(a) The Administrator may cause the Company to grant Unrestricted
Shares to Service Providers at such time or times, in such amounts and for such
reasons as the Administrator, in its sole discretion, shall determine. No
payment shall be required for Unrestricted Shares.
(b) The Company shall issue, in the name of each Service Provider to
whom Unrestricted Shares have been granted, stock certificates representing the
total number of Unrestricted Shares granted to such individual, and shall
deliver such certificates to such Service Provider as soon as reasonably
practicable after the date of grant or on such later date as the Administrator
shall determine at the time of grant.
14. Non-Transferability. Unless determined otherwise by the Administrator,
an Option and 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. If the Administrator makes an Option or
Stock Purchase Right transferable, such Option or Stock Purchase Right shall
contain such additional terms and conditions as the Administrator deems
appropriate. Notwithstanding the foregoing, the Administrator, in its sole
discretion, may provide in the Option Agreement regarding a given Option that
the Optionee may transfer, without consideration for the transfer, his or her
Nonstatutory Stock Options to members of his or her immediate family, to trusts
for the benefit of such family members, or to partnerships in which such
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family members are the only partners, provided that the transferee agrees in
writing with the Company to be bound by all of the terms and conditions of this
Plan and the applicable Option. During the period when Shares of Restricted
Stock and Stock Award Shares are restricted (by virtue of vesting schedules or
otherwise), such Shares 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.
15. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.
(a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of Shares of Common Stock covered by
each outstanding Option, Stock Purchase Right and Stock Award, the number of
Shares of Restricted Stock outstanding and the number of Shares of Common Stock
which have been authorized for issuance under the Plan but as to which no
Options, Stock Purchase Rights or Stock Awards have yet been granted or which
have been returned to the Plan upon cancellation or expiration of an Option,
Stock Purchase Right, Restricted Stock Purchase Agreement or Stock Award, 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
Administrator, 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 Award
hereunder.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee and holder of Stock Purchase Rights as soon as practicable prior to the
effective date of such proposed dissolution or liquidation. The Administrator in
its discretion may provide for an Optionee to have the right to exercise his or
her Option and for a holder of a Stock Purchase Right to exercise his or her
Stock Purchase Right until ten (10) days prior to such transaction as to all of
the Shares covered thereby, including Shares as to which an applicable 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 or applicable to any Stock Award
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 or consolidation
of the Company with or into another corporation or any other entity or the
exchange of substantially all of the outstanding stock of the Company for shares
of another entity or other property in which, after any such transaction the
prior shareholders of the Company own less than fifty percent (50%) of the
voting shares of the continuing or surviving entity, or in the event of the sale
of all or substantially all of the assets of the Company, (any such event, a
"Change of Control"), then, absent a provision to the contrary in any particular
Option Agreement or Stock Award (in which case the terms of such Option
Agreement or Stock Award shall supercede each of the provisions of this Section
15(c) which are inconsistent with such Option Agreement or Stock Award), each
outstanding Option, Stock Purchase Right and Stock Award shall be assumed or an
equivalent option, right or award substituted by the successor corporation or a
Parent or Subsidiary of the successor corporation. In the event that the
Administrator determines that the successor corporation or a Parent or a
Subsidiary of the successor corporation has refused to assume or
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substitute an equivalent option, right or award for each outstanding Option,
Stock Purchase Right and Stock Award, the Optionees shall fully vest in and have
the right to exercise each outstanding Option and Stock Purchase Right as to all
of the Optioned Stock covered thereby, including Shares which would not
otherwise be vested or exercisable, and all vesting periods under Stock Awards
shall be deemed to have been satisfied. In the event of a Change of Control,
then, absent a provision to the contrary in any particular Restricted Stock
Purchase Agreement (in which case the terms of such Restricted Stock Purchase
Agreement shall supercede each of the provisions of this Section 15(c) which are
inconsistent with such Restricted Stock Purchase Agreement), all vesting periods
under Restricted Stock Purchase Agreements shall be deemed to have been
satisfied. If an Option and/or Stock Purchase Right becomes fully vested and
exercisable in lieu of assumption or substitution in the event of a Change of
Control, the Administrator shall notify all Optionees that all outstanding
Options and Stock Purchase Rights shall be fully exercisable for a period of
fifteen (15) days from the date of such notice and that any Options and Stock
Purchase Rights that are not exercised within such period shall terminate upon
the expiration of such period. For the purposes of this paragraph, all
outstanding Options and Stock Purchase Rights shall be considered assumed if,
following the consummation of the Change of Control, the Option and Stock
Purchase 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 consummation of the Change of Control, the consideration (whether stock,
cash, or other property) received in the Change of Control 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 chosen by the holders
of a majority of the outstanding Shares); provided, however, that if such
consideration received in the Change of Control is 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 or Subsidiary equal in fair market
value to the per share consideration received by holders of Common Stock in the
Change of Control.
16. Substitute Options. In the event that the Company, directly or
indirectly, acquires another entity, the Board may authorize the issuance of
stock options ("Substitute Options") to the individuals performing services for
the acquired entity in substitution of stock options previously granted to those
individuals in connection with their performance of services for such entity
upon such terms and conditions as the Board shall determine, taking into account
the conditions of Code Section 424(a), as from time to time amended or
superceded, in the case of a Substitute Option that is intended to be an
Incentive Stock Option. Shares of capital stock underlying Substitute Stock
Options shall not constitute Shares issued pursuant to the Plan for any purpose.
17. Date of Grant. The date of grant of an Option, Stock Purchase Right,
Stock Award or Unrestricted Share shall be, for all purposes, the date on which
the Administrator makes the determination granting such Option, Stock Purchase
Right, Stock Award or Unrestricted Share, or such other later date as is
determined by the Administrator. Notice of the determination shall be provided
to each grantee within a reasonable time after the date of such grant.
18. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.
(b) Shareholder Approval. The Company shall obtain shareholder
approval of any Plan amendment to the extent necessary to comply with Applicable
Laws.
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(c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any grantee,
unless mutually agreed otherwise between the grantee and the Administrator,
which agreement must be in writing and signed by the grantee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Awards granted under the Plan
prior to the date of such termination.
19. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued in connection with
the grant of any Stock Award or Unrestricted Share or the exercise of any Option
or Stock Purchase Right unless such grant or the exercise of such Option or
Stock Purchase Right and the issuance and delivery of such Shares shall comply
with Applicable Laws 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 grant of any
Stock Award or Unrestricted Share or the exercise of any Option or Stock
Purchase Right, the Company may require the person receiving such Award or
exercising such Option or Stock Purchase Right to represent and warrant at the
time of any such exercise or grant 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.
(c) Additional Conditions. The Administrator shall have the
authority to condition the grant of any Award or rights under any Restricted
Stock Purchase Agreement in such other manner that the Administrator determines
to be appropriate, provided that such condition is not inconsistent with the
terms of the Plan. Such conditions may include, among other things, obligations
of recipients to execute lock-up agreements and shareholder agreements in the
future.
(d) Trading Policy Restrictions. Option and Stock Purchase Right
exercises and other Awards under the Plan shall be subject to the terms and
conditions of any insider trading policy established by the Company or the
Administrator.
20. 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.
21. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
22. Shareholder Approval. The Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months after the date the Plan is
adopted. Such shareholder approval shall be obtained in the manner and to the
degree required under Applicable Laws. Notwithstanding any provision in the Plan
to the contrary, any exercise of an Option or Stock Purchase Right granted
before the Company has obtained shareholder approval of the Plan in accordance
with this Section 22 shall be conditioned upon obtaining such shareholder
approval of the Plan in accordance with this Section 22.
23. Withholding; Notice of Sale. The Company shall be entitled to withhold
from any amounts payable to an Employee any amounts which the Company
determines, in its discretion, are required to be withheld under any Applicable
Law as a result of any action taken by a holder of an Award.
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24. Governing Law. This Plan shall be governed by the laws of the state of
Delaware, without regard to conflict of law principles.
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