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EXHIBIT 10.10
PDF SOLUTIONS, INC.
2001 STOCK PLAN
EFFECTIVE AS OF [DATE OF INITIAL PUBLIC OFFERING], 2001
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PDF SOLUTIONS, INC.
2001 STOCK PLAN
EFFECTIVE AS OF [DATE OF INITIAL PUBLIC OFFERING], 2001
SECTION 1. INTRODUCTION.
The Company's Board of Directors adopted the PDF Solutions, Inc. 2001
Stock Plan on June 12, 2001 (the "Adoption Date"), and the Company's
stockholders approved the Plan on [APPROVAL DATE]. The Plan is effective
on the date of our initial public offering.
The purpose of the Plan is to promote the long-term success of the
Company and the creation of shareholder value by offering Key Employees
an opportunity to acquire a proprietary interest in the success of the
Company, or to increase such interest, and to encourage such selected
persons to continue to provide services to the Company and to attract
new individuals with outstanding qualifications.
The Plan seeks to achieve this purpose by providing for Awards in the
form of Stock Purchase Rights granting Restricted Stock and Options
which may be Incentive Stock Options or Nonstatutory Stock Options.
The Plan shall be governed by, and construed in accordance with, the
laws of the State of Delaware (except its choice-of-law provisions).
Capitalized terms shall have the meaning provided in Section 2 unless
otherwise provided in this Plan or the applicable Stock Option Agreement
or Restricted Stock Agreement.
SECTION 2. DEFINITIONS.
(a) "AFFILIATE" means any entity other than a Subsidiary, if the Company
and/or one or more Subsidiaries own not less than 50% of such entity.
For purposes of determining an individual's "Service," this definition
shall include any entity other than a Subsidiary, if the Company, a
Parent and/or one or more Subsidiaries own not less than 50% of such
entity.
(b) "AWARD" means any award of an Option or Stock Purchase Right under
the Plan.
(c) "BOARD" means the Board of Directors of the Company, as constituted
from time to time.
(d) "CHANGE IN CONTROL" except as may otherwise be provided in a Stock
Option Agreement or Restricted Stock Agreement, means the occurrence of
any of the following:
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(i) The consummation of a merger or consolidation of the
Company with or into another entity or any other corporate
reorganization, if more than 50% of the combined voting power of
the continuing or surviving entity's securities outstanding
immediately after such merger, consolidation or other
reorganization is owned by persons who were not stockholders of
the Company immediately prior to such merger, consolidation or
other reorganization;
(ii) The sale, transfer or other disposition of all or
substantially all of the Company's assets;
(iii) A change in the composition of the Board, as a
result of which fewer that one-half of the incumbent directors
are directors who either (i) had been directors of the Company
on the date 24 months prior to the date of the event that may
constitute a Change in Control (the "original directors") or
(ii) were elected, or nominated for election, to the Board with
the affirmative votes of at least a majority of the aggregate of
the original directors who were still in office at the time of
the election or nomination and the directors whose election or
nomination was previously so approved;
(iv) Any transaction as a result of which any person
becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the
Company representing at least 20% of the total voting power
represented by the Company's then outstanding voting securities.
For purposes of this Paragraph (iii), the term "person" shall
have the same meaning as when used in sections 13(d) and 14(d)
of the Exchange Act but shall exclude:
(A) A trustee or other fiduciary holding
securities under an employee benefit plan of the Company
or a subsidiary of the Company;
(B) A corporation owned directly or indirectly
by the stockholders of the Company in substantially the
same proportions as their ownership of the common stock
of the Company; and
(C) The Company; or
(v) A complete liquidation or dissolution of the
Company.
(e) "CODE" means the Internal Revenue Code of 1986, as amended.
(f) "COMMITTEE" means a committee consisting of one or more members of
the Board that is appointed by the Board (as described in Section 3) to
administer the Plan.
(g) "COMMON STOCK" means the Company's common stock.
(h) "COMPANY" means PDF Solutions, Inc.
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(i) "CONSULTANT" means an individual who performs bona fide services to
the Company, a Parent, a Subsidiary or an Affiliate other than as an
Employee or Director or Non-Employee Director.
(j) "DIRECTOR" means a member of the Board who is also an Employee.
(k) "DISABILITY" means that the Key Employee is unable to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death
or which has lasted or can be expected to last for a continuous period
of not less than 12 months.
(l) "EMPLOYEE" means any individual who is a common-law employee of the
Company, a Parent, a Subsidiary or an Affiliate.
(m) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(n) "EXERCISE PRICE" means, in the case of an Option, the amount for
which a Share may be purchased upon exercise of such Option, as
specified in the applicable Stock Option Agreement.
(o) "FAIR MARKET VALUE" means the market price of Shares, determined by
the Committee as follows:
(i) If the Shares were traded on a stock exchange on the date in
question, then the Fair Market Value shall be equal to the last trading
price reported by the applicable composite transactions report for such
date;
(ii) If the Shares were traded over-the-counter on the date in
question and were classified as a national market issue, then the Fair
Market Value shall be equal to the last trading price quoted by the
NASDAQ system for such date;
(iii) If the Shares were traded over-the-counter on the date in
question but were not classified as a national market issue, then the
Fair Market Value shall be equal to the mean between the last reported
representative bid and asked prices quoted by the NASDAQ system for such
date; and
(iv) If none of the foregoing provisions is applicable, then the
Fair Market Value shall be determined by the Committee in good faith on
such basis as it deems appropriate.
Whenever possible, the determination of Fair Market Value by the
Committee shall be based on the prices reported in the Wall Street
Journal. Such determination shall be conclusive and binding on all
persons.
(p) "GRANT" means any grant of an Award under the Plan.
(q) "INCENTIVE STOCK OPTION" or "ISO" means an incentive stock option
described in Code section 422(b).
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(r) "KEY EMPLOYEE" means an Employee, Director, Non-Employee Director or
Consultant who has been selected by the Committee to receive an Award
under the Plan.
(s) "NON-EMPLOYEE DIRECTOR" means a member of the Board who is not an
Employee.
(t) "NONSTATUTORY STOCK OPTION" or "NSO" means a stock option that is
not an ISO.
(u) "OPTION" means an ISO or NSO granted under the Plan entitling the
Optionee to purchase Shares.
(v) "OPTIONEE" means an individual, estate or other entity that holds an
Option.
(w) "PARENT" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain. A corporation that
attains the status of a Parent on a date after the adoption of the Plan
shall be considered a Parent commencing as of such date.
(x) "PARTICIPANT" means an individual or estate or other entity that
holds an Award.
(y) "PLAN" means this PDF Solutions, Inc. 2001 Stock Incentive Plan as
it may be amended from time to time.
(z) "RESTRICTED STOCK" means a Share awarded under the Plan pursuant to
a Stock Purchase Right.
(aa) "RESTRICTED STOCK AGREEMENT" means the agreement described in
Section 8 evidencing Restricted Stock that may be purchased following
the Award of a Stock Purchase Right.
(bb) "SECURITIES ACT" means the Securities Act of 1933, as amended.
(cc) "SERVICE" means service as an Employee, Director, Non-Employee
Director or Consultant.
(dd) "SHARE" means one share of Common Stock.
(ee) "STOCK OPTION AGREEMENT" means the agreement described in Section 6
evidencing each Grant of an Option.
(ff) "STOCK PURCHASE RIGHT" means the right to acquire Restricted Stock
pursuant to Section 8.
(gg) "SUBSIDIARY" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of
the corporations other than the last corporation in the unbroken chain
owns stock possessing fifty percent (50%) or
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more of the total combined voting power of all classes of stock in one
of the other corporations in such chain. A corporation that attains the
status of a Subsidiary on a date after the adoption of the Plan shall be
considered a Subsidiary commencing as of such date.
(hh) "10-PERCENT SHAREHOLDER" means an individual who owns more than ten
percent (10%) of the total combined voting power of all classes of
outstanding stock of the Company, its Parent or any of its subsidiaries.
In determining stock ownership, the attribution rules of section 424(d)
of the Code shall be applied.
SECTION 3. ADMINISTRATION.
(a) COMMITTEE COMPOSITION. A Committee appointed by the Board shall
administer the Plan. The Board shall designate one of the members of the
Committee as chairperson. If no Committee has been approved, the entire
Board shall constitute the Committee. Members of the Committee shall
serve for such period of time as the Board may determine and shall be
subject to removal by the Board at any time. The Board may also at any
time terminate the functions of the Committee and reassume all powers
and authority previously delegated to the Committee.
With respect to officers or directors subject to Section 16 of the
Exchange Act, the Committee shall consist of those individuals who shall
satisfy the requirements of Rule 16b-3 (or its successor) under the
Exchange Act with respect to Awards granted to persons who are officers
or directors of the Company under Section 16 of the Exchange Act.
Notwithstanding the previous sentence, failure of the Committee to
satisfy the requirements of Rule 16b-3 shall not invalidate any Awards
granted by such Committee.
The Board may also appoint one or more separate committees of the Board,
each composed of one or more directors of the Company who need not
qualify under Rule 16b-3, who may administer the Plan with respect to
Key Employees who are not considered officers or directors of the
Company under Section 16 of the Exchange Act, may grant Awards under the
Plan to such Key Employees and may determine all terms of such Awards.
Notwithstanding the foregoing, the Board shall constitute the Committee
and shall administer the Plan with respect to all Awards granted to
Non-Employee Directors.
(b) AUTHORITY OF THE COMMITTEE. Subject to the provisions of the Plan,
the Committee shall have full authority and discretion to take any
actions it deems necessary or advisable for the administration of the
Plan. Such actions shall include:
(i) selecting Key Employees who are to receive Awards under the
Plan;
(ii) determining the type, number, vesting requirements and
other features and conditions of such Awards;
(iii) interpreting the Plan; and
(iv) making all other decisions relating to the operation of the
Plan.
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The Committee may adopt such rules or guidelines, as it deems
appropriate to implement the Plan. The Committee's determinations under
the Plan shall be final and binding on all persons.
(c) INDEMNIFICATION. Each member of the Committee, or of the Board,
shall be indemnified and held harmless by the Company against and from
(i) any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him or her in connection with or resulting from
any claim, action, suit, or proceeding to which he or she may be a party
or in which he or she may be involved by reason of any action taken or
failure to act under the Plan or any Stock Option Agreement or
Restricted Stock Agreement, and (ii) from any and all amounts paid by
him or her in settlement thereof, with the Company's approval, or paid
by him or her in satisfaction of any judgment in any such claim, action,
suit, or proceeding against him or her, provided he or she shall give
the Company an opportunity, at its own expense, to handle and defend the
same before he or she undertakes to handle and defend it on his or her
own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons
may be entitled under the Company's Certificate of Incorporation or
Bylaws, by contract, as a matter of law, or otherwise, or under any
power that the Company may have to indemnify them or hold them harmless.
SECTION 4. ELIGIBILITY.
(a) GENERAL RULES. Only Employees, Directors, Non-Employee Directors and
Consultants shall be eligible for designation as Key Employees by the
Committee.
(b) INCENTIVE STOCK OPTIONS. Only Key Employees who are common-law
employees of the Company, a Parent or a Subsidiary shall be eligible for
the grant of ISOs. In addition, a Key Employee who is a 10-Percent
Shareholder shall not be eligible for the grant of an ISO unless the
requirements set forth in section 422(c)(5) of the Code are satisfied.
(c) NON-EMPLOYEE DIRECTOR OPTIONS. Non-Employee Directors shall also be
eligible to receive Options as described in this Section 4(c) from and
after the date the Board has determined to implement this provision.
(i) Each eligible Non-Employee Director elected or appointed
after the effective date of the Company's initial public offering shall
automatically be granted an NSO to purchase 30,000 Shares (after giving
effect to the June 2001 stock split) (subject to adjustment under
Section 9) as a result of his or her initial election or appointment as
a Non-Employee Director. Upon the conclusion of each regular annual
meeting of the Company's stockholders following his or her initial
appointment, each eligible Non-Employee Director who will continue
serving as a member of the Board and who received an initial grant
thereafter shall receive an NSO to purchase 7,500 Shares (after giving
effect to the June 2001 stock split) (subject to adjustment under
Section 9). All NSOs granted pursuant to this Section 4 shall vest and
become exercisable provided the individual is serving as a director of
the Company as of the vesting date as follows: 25% one year
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from the date of grant, then in 36 equal monthly installments commencing
on the date one month and one year after the date of grant.
(ii) All NSOs granted to Non-Employee Directors under this
Section 4(c) shall become exercisable in full in the event of Change in
Control with respect to the Company.
(iii) The Exercise Price under all NSOs granted to a
Non-Employee Director under this Section 4(c) shall be equal to one
hundred percent (100%) of the Fair Market Value of a Share of Common
Stock on the date of grant, payable in one of the forms described in
Section 7.
(iv) All NSOs granted to a Non-Employee Director under this
Section 4(c) shall terminate on the earlier of:
(1) The 10th anniversary of the date of grant; or
(2) The date ninety (90) days after the termination of
such Non-Employee Director's Service for any reason.
SECTION 5. SHARES SUBJECT TO PLAN.
(a) BASIC LIMITATION. The stock issuable under the Plan shall be
authorized but unissued Shares or treasury Shares. The aggregate number
of Shares reserved for Awards under the Plan shall not exceed 3,000,000
Shares (after giving effect to the June 2001 stock split).
(b) ANNUAL ADDITION. Beginning with the first fiscal year of the Company
beginning after the Effective Date, on the first day of each fiscal
year, Shares will be added to the Plan equal to the lesser of (i)
3,000,000 Shares (after giving effect to the June 2001 stock split),
(ii) five percent (5%) of the outstanding shares in the last day of the
prior fiscal year, or (iii) such lesser number of Shares as may be
determined by the Board in its sole discretion.
(c) ADDITIONAL SHARES. If Awards are forfeited or terminate for any
other reason before being exercised, then the Shares underlying such
Awards shall again become available for Awards under the Plan.
(d) LIMITS ON OPTIONS. No Key Employee shall receive Options to purchase
Shares during any fiscal year covering in excess of 1,000,000 Shares
(after giving effect to the June 2001 stock split), or 2,000,000 Shares
(after giving effect to the June 2001 stock split) in the first fiscal
year of a Key Employee's employment with Company.
(e) LIMITS ON STOCK PURCHASE RIGHTS. No Key Employee shall receive an
Award of Stock Purchase Rights during any fiscal year covering in excess
of 500,000 Shares (after giving effect to the June 2001 stock split), or
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1,000,000 Shares (after giving effect to the June 2001 stock split) in
the first fiscal year of a Key Employee's employment with Company.
SECTION 6. TERMS AND CONDITIONS OF OPTIONS.
(a) STOCK OPTION AGREEMENT. Each Grant under the Plan shall be evidenced
by a Stock Option Agreement between the Optionee and the Company. Such
Option shall be subject to all applicable terms and conditions of the
Plan and may be subject to any other terms and conditions that are not
inconsistent with the Plan and that the Committee deems appropriate for
inclusion in a Stock Option Agreement. The provisions of the various
Stock Option Agreements entered into under the Plan need not be
identical. A Stock Option Agreement may provide that new Options will be
granted automatically to the Optionee when he or she exercises the prior
Options. The Stock Option Agreement shall also specify whether the
Option is an ISO or an NSO.
(b) NUMBER OF SHARES. Each Stock Option Agreement shall specify the
number of Shares that are subject to the Option and shall provide for
the adjustment of such number in accordance with Section 9.
(c) EXERCISE PRICE. An Option's Exercise Price shall be established by
the Committee and set forth in a Stock Option Agreement. The Exercise
Price of an ISO shall not be less than 100% of the Fair Market Value
(110% for 10-Percent Shareholders) of a Share on the date of Grant. In
the case of an NSO, a Stock Option Agreement may specify an Exercise
Price that varies in accordance with a predetermined formula while the
NSO is outstanding.
(d) EXERCISABILITY AND TERM. Each Stock Option Agreement shall specify
the date when all or any installment of the Option is to become
exercisable. The Stock Option Agreement shall also specify the term of
the Option; provided that the term of an ISO shall in no event exceed
ten (10) years from the date of Grant. An ISO that is granted to a
10-Percent Shareholder shall have a maximum term of five (5) years. No
Option can be exercised after the expiration date provided in the
applicable Stock Option Agreement. A Stock Option Agreement may provide
for accelerated exercisability in the event of the Optionee's death,
disability or retirement or other events and may provide for expiration
prior to the end of its term in the event of the termination of the
Optionee's service. A Stock Option Agreement may permit an Optionee to
exercise an Option before it is vested, subject to the Company's right
of repurchase over any Shares acquired under the unvested portion of the
Option (an "early exercise"), which right of repurchase shall lapse at
the same rate the Option would have vested had there been no early
exercise. In no event shall the Company be required to issue fractional
Shares upon the exercise of an Option.
(e) MODIFICATIONS OR ASSUMPTION OF OPTIONS. Within the limitations of
the Plan, the Committee may modify, extend or assume outstanding options
or may accept the cancellation of outstanding options (whether granted
by the Company or by another issuer) in return for the grant of new
Options for the same or a different number of Shares
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and at the same or a different Exercise Price. The foregoing
notwithstanding, no modification of an Option shall, without the consent
of the Optionee, alter or impair his or her rights or obligations under
such Option.
(f) TRANSFERABILITY OF OPTIONS. Except as otherwise provided in the
applicable Stock Option Agreement and then only to the extent permitted
by applicable law, no Option shall be transferable by the Optionee other
than by will or by the laws of descent and distribution. Except as
otherwise provided in the applicable Stock Option Agreement, an Option
may be exercised during the lifetime of the Optionee only or by the
guardian or legal representative of the Optionee. No Option or interest
therein may be assigned, pledged or hypothecated by the Optionee during
his lifetime, whether by operation of law or otherwise, or be made
subject to execution, attachment or similar process.
(g) NO RIGHTS AS STOCKHOLDER. An Optionee, or a transferee of an
Optionee, shall have no rights as a stockholder with respect to any
Common Stock covered by an Option until such person becomes entitled to
receive such Common Stock by filing a notice of exercise and paying the
Exercise Price pursuant to the terms of such Option.
(h) RESTRICTIONS ON TRANSFER. Any Shares issued upon exercise of an
Option shall be subject to such rights of repurchase, rights of first
refusal and other transfer restrictions as the Committee may determine.
Such restrictions shall apply in addition to any restrictions that may
apply to holders of Shares generally and shall also comply to the extent
necessary with applicable law.
SECTION 7. PAYMENT FOR OPTION SHARES.
(a) GENERAL RULE. The entire Exercise Price of Shares issued upon
exercise of Options shall be payable in cash at the time when such
Shares are purchased, except as follows:
(i) In the case of an ISO granted under the Plan, payment shall
be made only pursuant to the express provisions of the applicable Stock
Option Agreement. The Stock Option Agreement may specify that payment
may be made in any form(s) described in this Section 7.
(ii) In the case of an NSO granted under the Plan, the Committee
may in its discretion, at any time accept payment in any form(s)
described in this Section 7.
(b) SURRENDER OF STOCK. To the extent that this Section 7(b) is
applicable, payment for all or any part of the Exercise Price may be
made with Shares which have already been owned by the Optionee for such
duration as shall be specified by the Committee. Such Shares shall be
valued at their Fair Market Value on the date when the new Shares are
purchased under the Plan.
(c) PROMISSORY NOTE. To the extent that this Section 7(c) is applicable,
payment for all or any part of the Exercise Price may be made with a
full-recourse promissory note.
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(d) OTHER FORMS OF PAYMENT. To the extent that this Section 7(d) is
applicable, payment may be made in any other form that is consistent
with applicable laws, regulations and rules.
SECTION 8. TERMS AND CONDITIONS FOR AWARDS OF STOCK PURCHASE RIGHTS.
(a) TIME, AMOUNT AND FORM OF AWARDS. Awards under this Section 8 may be
granted in the form of Stock Purchase Rights pursuant to which
Restricted Stock will be awarded to a Key Employee. Such Rights may also
be awarded in combination with NSOs, and such an Award may provide that
the Restricted Stock will be forfeited in the event that the related
NSOs is exercised.
(b) AGREEMENTS. Each Award of a Stock Purchase Right under the Plan
shall be evidenced by a Restricted Stock Agreement between the
Participant and the Company. Such Awards shall be subject to all
applicable terms and conditions of the Plan and may be subject to any
other terms and conditions that are not inconsistent with the Plan and
that the Committee deems appropriate for inclusion in the applicable
Agreement. The provisions of the various Agreements entered into under
the Plan need not be identical.
(c) PAYMENT FOR RESTRICTED STOCK. Restricted Stock may be issued
pursuant to the Award of a Stock Purchase Right with or without cash
consideration under the Plan.
(d) VESTING CONDITIONS. Each Award of Restricted Stock shall become
vested, in full or in installments, upon satisfaction of the conditions
specified in the applicable Agreement. An Agreement may provide for
accelerated vesting in the event of the Participant's death, Disability
or retirement or other events.
(e) ASSIGNMENT OR TRANSFER OF RESTRICTED STOCK. Except as provided in
Section 13, or in a Restricted Stock Agreement, or as required by
applicable law, an Award granted under this Section 8 shall not be
anticipated, assigned, attached, garnished, optioned, transferred or
made subject to any creditor's process, whether voluntarily,
involuntarily or by operation of law. Any act in violation of this
Section 8(e) shall be void. However, this Section 8(e) shall not
preclude a Participant from designating a beneficiary who will receive
any outstanding Restricted Stock in the event of the Participant's
death, nor shall it preclude a transfer of Restricted Stock by will or
by the laws of descent and distribution.
(f) TRUSTS. Neither this Section 8 nor any other provision of the Plan
shall preclude a Participant from transferring or assigning Restricted
Stock to (a) the trustee of a trust that is revocable by such
Participant alone, both at the time of the transfer or assignment and at
all times thereafter prior to such Participant's death, or (b) the
trustee of any other trust to the extent approved in advance by the
Committee in writing. A transfer or assignment of Restricted Stock from
such trustee to any person other than such Participant shall be
permitted only to the extent approved in advance by the Committee in
writing, and Restricted Stock held by such trustee shall be subject to
all of the conditions and
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restrictions set forth in the Plan and in the applicable Restricted
Stock Agreement, as if such trustee were a party to such Agreement.
(g) VOTING AND DIVIDEND RIGHTS. The holders of Restricted Stock acquired
pursuant to a Stock Purchase Right awarded under the Plan shall have the
same voting, dividend and other rights as the Company's other
stockholders. A Restricted Stock Agreement, however, may require that
the holders of Restricted Stock invest any cash dividends received in
additional Restricted Stock. Such additional Restricted Stock shall be
subject to the same conditions and restrictions as the Award with
respect to which the dividends were paid. Such additional Restricted
Stock shall not reduce the number of Shares available under Section 5.
SECTION 9. PROTECTION AGAINST DILUTION.
(a) ADJUSTMENTS. In the event of a subdivision of the outstanding
Shares, a declaration of a dividend payable in Shares, a declaration of
a dividend payable in a form other than Shares in an amount that has a
material effect on the price of Shares, a combination or consolidation
of the outstanding Shares (by reclassification or otherwise) into a
lesser number of Shares, a recapitalization, reorganization, merger,
liquidation, spin-off or a similar occurrence, the Committee shall make
such adjustments as it, in its reasonable discretion, deems appropriate
in order to prevent the dilution or enlargement of rights hereunder in
one or more of:
(i) the number of Shares available for future Awards and the per
person Share limits under Section 5;
(ii) the number of Shares covered by each outstanding Award; or
(iii) the Exercise Price under each outstanding Option.
(b) PARTICIPANT RIGHTS. Except as provided in this Section 9, a
Participant shall have no rights by reason of any issue by the Company
of stock of any class or securities convertible into stock of any class,
any subdivision or consolidation of shares of stock of any class, the
payment of any stock dividend or any other increase or decrease in the
number of shares of stock of any class.
SECTION 10. EFFECT OF A CHANGE IN CONTROL.
(a) MERGER OR REORGANIZATION. In the event that the Company is a party
to a merger or other reorganization, outstanding Awards shall be subject
to the agreement of merger or reorganization. Such agreement may
provide, without limitation, for the assumption of outstanding Awards by
the surviving corporation or its parent, for their continuation by the
Company (if the Company is a surviving corporation), for accelerated
vesting or for their cancellation with or without consideration.
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(b) ACCELERATION. Except as otherwise provided in the applicable Stock
Option Agreement or Restricted Stock Agreement, in the event that a
Change in Control occurs with respect to the Company and the applicable
agreement of merger or reorganization provides for assumption or
continuation of Awards pursuant to Section 10(a), no acceleration of
vesting shall occur. In the event that a Change in Control occurs with
respect to the Company and there is no assumption or continuation of
Awards pursuant to Section 10(a), all Awards shall vest and become
immediately exercisable.
SECTION 11. LIMITATIONS ON RIGHTS.
(a) RETENTION RIGHTS. Neither the Plan nor any Award granted under the
Plan shall be deemed to give any individual a right to remain an
employee, consultant or director of the Company, a Parent, a Subsidiary
or an Affiliate. The Company and its Parents and Subsidiaries and
Affiliates reserve the right to terminate the Service of any person at
any time, and for any reason, subject to applicable laws, the Company's
Certificate of Incorporation and Bylaws and a written employment
agreement (if any).
(b) STOCKHOLDERS' RIGHTS. A Participant shall have no dividend rights,
voting rights or other rights as a stockholder with respect to any
Shares covered by his or her Award prior to the issuance of a stock
certificate for such Shares. No adjustment shall be made for cash
dividends or other rights for which the record date is prior to the date
when such certificate is issued, except as expressly provided in Section
9.
(c) REGULATORY REQUIREMENTS. Any other provision of the Plan
notwithstanding, the obligation of the Company to issue Shares under the
Plan shall be subject to all applicable laws, rules and regulations and
such approval by any regulatory body as may be required. The Company
reserves the right to restrict, in whole or in part, the delivery of
Shares pursuant to any Award prior to the satisfaction of all legal
requirements relating to the issuance of such Shares, to their
registration, qualification or listing or to an exemption from
registration, qualification or listing.
SECTION 12. WITHHOLDING TAXES.
(a) GENERAL. A Participant shall make arrangements satisfactory to the
Company for the satisfaction of any withholding tax obligations that
arise in connection with his or her Award. The Company shall not be
required to issue any Shares or make any cash payment under the Plan
until such obligations are satisfied.
(b) SHARE WITHHOLDING. If a public market for the Company's Shares
exists, the Committee may permit a Participant to satisfy all or part of
his or her withholding or income tax obligations by having the Company
withhold all or a portion of any Shares that otherwise would be issued
to him or her or by surrendering all or a portion of any Shares that he
or she previously acquired. Such Shares shall be valued at their Fair
Market Value on the date when taxes otherwise would be withheld in cash.
In no event may the Company allow Shares to be withheld in an amount
that exceeds the minimum statutory withholding rates for federal and
state tax purposes, including payroll taxes. Any payment of taxes by
assigning Shares to the Company may be subject to restrictions,
including, but
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not limited to, any restrictions required by rules of the Securities and
Exchange Commission.
SECTION 13. DURATION AND AMENDMENTS.
(a) TERM OF THE PLAN. The Plan, as set forth herein, shall become
effective on the date of its adoption by the Board, subject to the
approval of the Company's stockholders. No Options shall be exercisable
until such stockholder approval is obtained. In the event that the
stockholders fail to approve the Plan within twelve (12) months after
its adoption by the Board, any Awards made shall be null and void and no
additional Awards shall be made. The Plan shall terminate on the date
that is ten (10) years after its adoption by the Board and may be
terminated on any earlier date pursuant to Section 13(b).
(b) RIGHT TO AMEND OR TERMINATE THE PLAN. The Board may amend or
terminate the Plan at any time and for any reason. The termination of
the Plan, or any amendment thereof, shall not affect any Award
previously granted under the Plan. No Awards shall be granted under the
Plan after the Plan's termination. An amendment of the Plan shall be
subject to the approval of the Company's stockholders only to the extent
required by applicable laws, regulations or rules.
13
15
GRANT NO. ________
PDF SOLUTIONS, INC.
2001 STOCK PLAN
INCENTIVE STOCK OPTION AGREEMENT
PDF Solutions, Inc. (the "Company"), hereby grants an Option to purchase
shares of its common stock (the "Shares") to the Optionee named below. The terms
and conditions of the Option are set forth in this cover sheet, in the
attachment and in the Company's 2001 Stock Plan (the "Plan").
Date of Option Grant: __________________, 2001
Name of Optionee: _________________________________________________
Optionee's Social Security Number: _____-____-_____
Number of Shares Covered by Option: ______________
Exercise Price per Share: $_____.___
Vesting Start Date: _____________, 2001
Vesting Schedule:
Subject to all the terms of the attached Agreement, your right to
purchase Shares under this Option vests as to ONE-FOURTH (1/4) of the total
number of Shares covered by this Option, as shown above, on the one-year
anniversary of the Vesting Start Date. Thereafter, the number of Shares which
you may purchase under this Option shall vest at the rate of ONE-FORTY-EIGHTH
(1/48) per month on the 1st day of each of the THIRTY-SIX (36) MONTHS following
the month of the one-year anniversary of the Vesting Start Date. The resulting
aggregate number of vested Shares will be rounded to the nearest whole number.
No additional Shares will vest after your Service has terminated for any reason.
BY SIGNING THIS COVER SHEET, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED IN THE ATTACHED AGREEMENT AND IN THE PLAN, A COPY OF WHICH
IS ALSO ENCLOSED.
Optionee:_______________________________________________________
(Signature)
Company:________________________________________________________
(Signature)
Title:__________________________________________________
Attachment
16
PDF SOLUTIONS, INC.
2001 STOCK PLAN
STOCK OPTION AGREEMENT
THE PLAN AND The text of the Plan is incorporated in this
OTHER AGREEMENTS Agreement by reference. Certain capitalized
terms used in this Agreement are defined in
the Plan.
This Agreement and the Plan constitute the
entire understanding between you and the
Company regarding this Option. Any prior
agreements, commitments or negotiations
concerning this Option are superseded.
INCENTIVE STOCK OPTION This Option is intended to be an Incentive
Stock Option under section 422 of the Internal
Revenue Code and will be interpreted
accordingly. If you cease to be an employee of
the Company, a Subsidiary or of a Parent but
continue to provide Service, this Option will
be deemed a Nonstatutory Stock Option on the
90th day after you cease to be an employee. In
addition, to the extent that all or part of
this Option exceeds the $100,000 rule of
section 422(d) of the Code, this Option or the
lesser excess part will be treated as a
Nonstatutory Stock Option.
VESTING This Option is only exercisable before it
expires and then only with respect to the
vested portion of the Option. This Option will
vest according to the Vesting Schedule on the
attached cover sheet.
TERM Your Option will expire in any event at the
close of business at Company headquarters on
the day before the 10th anniversary of the
Date of Option Grant, as shown on the cover
sheet. Your Option will expire earlier if your
Service terminates, as described below.
REGULAR TERMINATION If your Service terminates for any reason,
other than death, Disability or Cause, as
defined below, then your Option will expire at
the close of business at Company headquarters
on the 90th day after your termination date.
TERMINATION FOR If your Service is terminated for Cause,
CAUSE as determined by the Board in its sole
discretion, then you shall immediately forfeit
all rights to your Option and the Option shall
immediately expire. For purposes of this
Agreement, "Cause" shall mean the termination
of your Service due to your commission of any
act of fraud, embezzlement or dishonesty; any
unauthorized use
2
17
or disclosure of confidential information or
trade secrets of the Company (or any Parent,
Subsidiary or Affiliate); or any other
intentional misconduct adversely affecting the
business or affairs of the Company (or any
Parent, Subsidiary or Affiliate) in a material
manner. This definition shall not restrict in
any way the Company's or any Parent's,
Subsidiary's or Affiliate's right to discharge
you for any other reason, nor shall this
definition be deemed to be inclusive of all
the acts or omissions which constitute "cause"
for purposes other than this Agreement.
DEATH If your Service terminates because of your
death, then your Option will expire at the
close of business at Company headquarters on
the date twelve (12) months after the date of
death. During that twelve (12) month period,
your estate or heirs may exercise the vested
portion of your Option.
DISABILITY If your Service terminates because of your
Disability, then your Option will expire at
the close of business at Company headquarters
on the date twelve (12) months after your
termination date.
LEAVES OF ABSENCE For purposes of this Option, your Service does
not terminate when you go on a bona fide leave
of absence that was approved by the Company in
writing, if the terms of the leave provide for
continued Service crediting, or when continued
Service crediting is required by applicable
law. However, your Service will be treated as
terminating ninety (90) days after you went on
leave, unless your right to return to active
work is guaranteed by law or by a contract.
Your Service terminates in any event when the
approved leave ends unless you immediately
return to active work.
The Company determines which leaves count for
this purpose, and when your Service terminates
for all purposes under the Plan.
NOTICE OF EXERCISE When you wish to exercise this Option, you
must notify the Company by filing the proper
"Notice of Exercise" form at the address given
on the form. Your notice must specify how many
Shares you wish to purchase. Your notice must
also specify how your Shares should be
registered (in your name only or in your and
your spouse's names as community property or
as joint tenants with right of survivorship).
The notice will be effective when it is
received by the Company.
If someone else wants to exercise this Option
after your death,
3
18
that person must prove to the Company's
satisfaction that he or she is entitled to do
so.
Form of Payment When you submit your notice of exercise, you
must include payment of the Exercise Price for
the Shares you are purchasing. Payment may be
made in one (or a combination) of the
following forms:
- Cash, your personal check, a cashier's
check or a money order.
- Shares which have already been owned by
you for more than six months and which are
surrendered to the Company. The value of
the Shares, determined as of the effective
date of the Option exercise, will be
applied to the Exercise Price.
- To the extent a public market for the
Shares exists as determined by the
Company, by delivery (on a form prescribed
by the Company) of an irrevocable
direction to a securities broker to sell
Shares and to deliver all or part of the
sale proceeds to the Company in payment of
the aggregate Exercise Price.
Withholding Taxes You will not be allowed to exercise this
Option unless you make acceptable arrangements
to pay any withholding or other taxes that may
be due as a result of the Option exercise or
sale of Shares acquired under this Option.
Restrictions on Exercise and By signing this Agreement, you agree not to
Resale exercise this Option or sell any Shares
acquired under this Option at a time when
applicable laws, regulations or Company or
underwriter trading policies prohibit
exercise, sale or issuance of Shares. The
Company will not permit you to exercise this
Option if the issuance of Shares at that time
would violate any law or regulation. The
Company shall have the right to designate one
or more periods of time, each of which shall
not exceed one hundred eighty (180) days in
length, during which this Option shall not be
exercisable if the Company determines (in its
sole discretion) that such limitation on
exercise could in any way facilitate a
lessening of any restriction on transfer
pursuant to the Securities Act or any state
securities laws with respect to any issuance
of securities by the Company, facilitate the
registration or qualification of any
securities by the Company under the Securities
Act or any state securities laws, or
facilitate the perfection of any exemption
from the registration or qualification
requirements of the Securities Act or any
applicable state securities laws for the
issuance or transfer of
4
19
any securities. Such limitation on exercise
shall not alter the vesting schedule set forth
in this Agreement other than to limit the
periods during which this Option shall be
exercisable.
If the sale of Shares under the Plan is not
registered under the Securities Act, but an
exemption is available which requires an
investment or other representation, you shall
represent and agree at the time of exercise
that the Shares being acquired upon exercise
of this Option are being acquired for
investment, and not with a view to the sale or
distribution thereof, and shall make such
other representations as are deemed necessary
or appropriate by the Company and its counsel.
5
20
Transfer of Option Prior to your death, only you may exercise
this Option. You cannot transfer or assign
this Option. For instance, you may not sell
this Option or use it as security for a loan.
If you attempt to do any of these things, this
Option will immediately become invalid. You
may, however, dispose of this Option in your
will.
Regardless of any marital property settlement
agreement, the Company is not obligated to
honor a notice of exercise from your spouse,
nor is the Company obligated to recognize your
spouse's interest in your Option in any other
way.
Retention Rights Your Option or this Agreement does not
give you the right to be retained by the
Company (or any Parent or any Subsidiaries or
Affiliates) in any capacity. The Company (or
any Parent and
6
21
any Subsidiaries or Affiliates) reserves the
right to terminate your Service at any time
and for any reason.
Stockholder Rights You, or your estate or heirs, have no rights
as a stockholder of the Company until a
certificate for your Option's Shares has been
issued. No adjustments are made for dividends
or other rights if the applicable record date
occurs before your stock certificate is
issued, except as described in the Plan.
Adjustments In the event of a stock split, a stock
dividend or a similar change in the Company
stock, the number of Shares covered by this
Option and the exercise price per Share may be
adjusted (and rounded down to the nearest
whole number) pursuant to the Plan. Your
Option shall be subject to the terms of the
agreement of merger, liquidation or
reorganization in the event the Company is
subject to such corporate activity.
Legends All certificates representing the Shares
issued upon exercise of this Option shall,
where applicable, have endorsed thereon the
following legends:
"THE SHARES REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFER AND OPTIONS TO PURCHASE SUCH
SHARES SET FORTH IN AN AGREEMENT BETWEEN
THE COMPANY AND THE REGISTERED HOLDER, OR
HIS OR HER PREDECESSOR IN INTEREST. A COPY
OF SUCH AGREEMENT IS ON FILE AT THE
PRINCIPAL OFFICE OF THE COMPANY AND WILL BE
FURNISHED UPON WRITTEN REQUEST TO THE
SECRETARY OF THE COMPANY BY THE HOLDER OF
RECORD OF THE SHARES REPRESENTED BY THIS
CERTIFICATE."
"THE SHARES REPRESENTED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD,
PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT
AN EFFECTIVE REGISTRATION THEREOF UNDER
SUCH ACT OR AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED."
7
22
Applicable Law This Agreement will be interpreted and
enforced under the laws of the State of
California.
By signing the cover sheet of this Agreement, you agree to all of the
terms and conditions described above and in the Plan.
8
23
GRANT NO. ________
PDF SOLUTIONS, INC.
2001 STOCK PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
PDF Solutions, Inc. (the "Company"), hereby grants an Option to purchase
shares of its common stock (the "Shares") to the Optionee named below. The terms
and conditions of the Option are set forth in this cover sheet, in the
attachment and in the Company's 2001 Stock Plan (the "Plan").
Date of Option Grant: __________________, 2001
Name of Optionee: _________________________________________________
Optionee's Social Security Number: _____-____-_____
Number of Shares Covered by Option: ______________
Exercise Price per Share: $_____.___
Vesting Start Date: _____________, 2001
Vesting Schedule:
Subject to all the terms of the attached Agreement, your right to
purchase Shares under this Option vests as to one-fourth (1/4) of the total
number of Shares covered by this Option, as shown above, on the one-year
anniversary of the Vesting Start Date. Thereafter, the number of Shares which
you may purchase under this Option shall vest at the rate of one-forty-eighth
(1/48) per month on the 1st day of each of the thirty-six (36) months following
the month of the one-year anniversary of the Vesting Start Date. The resulting
aggregate number of vested Shares will be rounded to the nearest whole number.
No additional Shares will vest after your Service has terminated for any reason.
BY SIGNING THIS COVER SHEET, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED IN THE ATTACHED AGREEMENT AND IN THE PLAN, A COPY OF WHICH
IS ALSO ENCLOSED.
Optionee:_______________________________________________________
(Signature)
Company:________________________________________________________
(Signature)
Title:__________________________________________________
24
PDF SOLUTIONS, INC.
2001 STOCK PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
THE PLAN AND The text of the Plan is incorporated in this
OTHER AGREEMENTS Agreement by reference. Certain capitalized
terms used in this Agreement are defined in
the Plan.
This Agreement and the Plan constitute the
entire understanding between you and the
Company regarding this Option. Any prior
agreements, commitments or negotiations
concerning this Option are superseded.
NONSTATUTORY STOCK OPTION This Option is not intended to be an Incentive
Stock Option under section 422 of the Internal
Revenue Code and will be interpreted
accordingly.
VESTING This Option is only exercisable before it
expires and then only with respect to the
vested portion of the Option. This Option will
vest according to the Vesting Schedule on the
attached cover sheet.
TERM Your Option will expire in any event at the
close of business at Company headquarters on
the day before the 10th anniversary of the
Date of Option Grant, as shown on the cover
sheet. Your Option will expire earlier if your
Service terminates, as described below.
REGULAR TERMINATION If your Service terminates for any reason,
other than death, Disability or Cause, as
defined below, then your Option will expire at
the close of business at Company headquarters
on the 90th day after your termination date.
TERMINATION FOR If your Service is terminated for Cause, as
CAUSE determined by the Board in its sole
discretion, then you shall immediately forfeit
all rights to your Option and the Option shall
immediately expire. For purposes of this
Agreement, "Cause" shall mean the termination
of your Service due to your commission of any
act of fraud, embezzlement or dishonesty; any
unauthorized use or disclosure of confidential
information or trade secrets of the Company
(or any Parent, Subsidiary or Affiliate); or
any other intentional misconduct adversely
affecting the business or affairs of the
Company (or any Parent, Subsidiary or
Affiliate) in a material manner. This
definition shall not restrict in any way the
Company's or any Parent's, Subsidiary's or
Affiliate's
2
25
right to discharge you for any other reason,
nor shall this definition be deemed to be
inclusive of all the acts or omissions which
constitute "cause" for purposes other than
this Agreement.
DEATH If your Service terminates because of your
death, then your Option will expire at the
close of business at Company headquarters on
the date twelve (12) months after the date of
death. During that twelve (12) month period,
your estate or heirs may exercise the vested
portion of your Option.
DISABILITY If your Service terminates because of your
Disability, then your Option will expire at
the close of business at Company headquarters
on the date twelve (12) months after your
termination date.
LEAVES OF ABSENCE For purposes of this Option, your Service does
not terminate when you go on a bona fide leave
of absence that was approved by the Company in
writing, if the terms of the leave provide for
continued Service crediting, or when continued
Service crediting is required by applicable
law. Your Service terminates in any event when
the approved leave ends unless you immediately
return to active work.
The Company determines which leaves count for
this purpose, and when your Service terminates
for all purposes under the Plan.
NOTICE OF EXERCISE When you wish to exercise this Option, you
must notify the Company by filing the proper
"Notice of Exercise" form at the address given
on the form. Your notice must specify how many
Shares you wish to purchase. Your notice must
also specify how your Shares should be
registered (in your name only or in your and
your spouse's names as community property or
as joint tenants with right of survivorship).
The notice will be effective when it is
received by the Company.
If someone else wants to exercise this Option
after your death, that person must prove to
the Company's satisfaction that he or she is
entitled to do so.
FORM OF PAYMENT When you submit your notice of exercise, you
must include payment of the Exercise Price for
the Shares you are purchasing. Payment may be
made in one (or a combination) of the
following forms:
- Cash, your personal check, a cashier's
check or a money
3
26
order.
- Shares which have already been owned by
you for more than six months and which are
surrendered to the Company. The value of
the Shares, determined as of the effective
date of the Option exercise, will be
applied to the Exercise Price.
- To the extent a public market for the
Shares exists as determined by the
Company, by delivery (on a form prescribed
by the Company) of an irrevocable
direction to a securities broker to sell
Shares and to deliver all or part of the
sale proceeds to the Company in payment of
the aggregate exercise price.
WITHHOLDING TAXES You will not be allowed to exercise this
Option unless you make acceptable arrangements
to pay any withholding or other taxes that may
be due as a result of the Option exercise or
sale of Shares acquired under this Option.
RESTRICTIONS ON EXERCISE AND By signing this Agreement, you agree not to
RESALE exercise this Option or sell any Shares
acquired under this Option at a time when
applicable laws, regulations or Company or
underwriter trading policies prohibit
exercise, sale or issuance of Shares. The
Company will not permit you to exercise this
Option if the issuance of Shares at that time
would violate any law or regulation. The
Company shall have the right to designate one
or more periods of time, each of which shall
not exceed one hundred eighty (180) days in
length, during which this Option shall not be
exercisable if the Company determines (in its
sole discretion) that such limitation on
exercise could in any way facilitate a
lessening of any restriction on transfer
pursuant to the Securities Act or any state
securities laws with respect to any issuance
of securities by the Company, facilitate the
registration or qualification of any
securities by the Company under the Securities
Act or any state securities laws, or
facilitate the perfection of any exemption
from the registration or qualification
requirements of the Securities Act or any
applicable state securities laws for the
issuance or transfer of any securities. Such
limitation on exercise shall not alter the
vesting schedule set forth in this Agreement
other than to limit the periods during which
this Option shall be exercisable.
If the sale of Shares under the Plan is not
registered under the Securities Act, but an
exemption is available which requires an
investment or other representation, you shall
represent and agree at the time of exercise
that the Shares being acquired upon exercise
of this Option are being acquired for
investment,
4
27
and not with a view to the sale or
distribution thereof, and shall make such
other representations as are deemed necessary
or appropriate by the Company and its counsel.
5
28
TRANSFER OF OPTION Prior to your death, only you may exercise
this Option. You cannot transfer or assign
this Option. For instance, you may not sell
this Option or use it as security for a loan.
If you attempt to do any of these things, this
Option will immediately become invalid. You
may, however, dispose of this Option in your
will. Regardless of any marital property
settlement agreement, the Company is not
obligated to honor a notice of exercise from
your spouse, nor is the Company obligated to
recognize your spouse's interest in your
Option in any other way.
RETENTION RIGHTS Your Option or this Agreement does not give
you the right to be retained by the Company
(or any Parent or any Subsidiaries or
Affiliates) in any capacity. The Company (or
any Parent and any Subsidiaries or Affiliates)
reserves the right to terminate your Service
at any time and for any reason.
STOCKHOLDER RIGHTS You, or your estate or heirs, have no rights
as a stockholder of the Company until a
certificate for your Option's Shares has been
issued. No adjustments are made for dividends
or other rights if the applicable record date
occurs before your stock certificate is
issued, except as described in the Plan.
ADJUSTMENTS In the event of a stock split, a stock
dividend or a similar
6
29
change in the Company stock, the number of
Shares covered by this Option and the exercise
price per Share may be adjusted (and rounded
down to the nearest whole number) pursuant to
the Plan. Your Option shall be subject to the
terms of the agreement of merger, liquidation
or reorganization in the event the Company is
subject to such corporate activity.
LEGENDS All certificates representing the Shares
issued upon exercise of this Option shall,
where applicable, have endorsed thereon the
following legends:
"THE SHARES REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFER AND OPTIONS TO PURCHASE SUCH
SHARES SET FORTH IN AN AGREEMENT BETWEEN
THE COMPANY AND THE REGISTERED HOLDER, OR
HIS OR HER PREDECESSOR IN INTEREST. A COPY
OF SUCH AGREEMENT IS ON FILE AT THE
PRINCIPAL OFFICE OF THE COMPANY AND WILL BE
FURNISHED UPON WRITTEN REQUEST TO THE
SECRETARY OF THE COMPANY BY THE HOLDER OF
RECORD OF THE SHARES REPRESENTED BY THIS
CERTIFICATE."
"THE SHARES REPRESENTED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD,
PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT
AN EFFECTIVE REGISTRATION THEREOF UNDER
SUCH ACT OR AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED."
APPLICABLE LAW This Agreement will be interpreted and
enforced under the laws of the State of
California.
BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE
TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.
7