Exhibit 10.4
VYYO INC.
AMENDED AND RESTATED
2000 EMPLOYEE AND CONSULTANT EQUITY INCENTIVE PLAN
1. SECTION GENERAL PURPOSE OF PLAN; DEFINITIONS.
The name of this plan is the Vyyo Inc. Amended and Restated
2000 Employee and Consultant Equity Incentive Plan (the "Plan"). The Plan was
adopted by the Board (defined below) and approved by the stockholders of the
Company (defined below) on November 22, 1999. The Board subsequently amended
and restated Plan in its entirety on February 2, 2000 (the "Amendment"), and
such Amendment was approved by the stockholders of the Company on the same
date. The purpose of the Plan is to enable the Company to attract and retain
highly qualified personnel who will contribute to the Company's success and
to provide incentives to Participants (defined below) that are linked
directly to increases in stockholder value and will therefore inure to the
benefit of all stockholders of the Company. The Company wishes the issuance
of Awards (defined below) to its employees in Israel to conform with the
requirements of Section 3(9) of the Israeli Income Tax Ordinance, and for
this purpose the appended document Annex A amends this Plan to so conform.
For purposes of the Plan, the following terms shall be
defined as set forth below:
(a) "ADMINISTRATOR" means the Board, or if and to the
extent the Board does not administer the Plan, the Committee in accordance
with Section 2 below.
(b) "AFFILIATE" means any corporation that directly, or
indirectly through one or more intermediaries, controls or is controlled by,
or is under common control with, another corporation, where "control"
(including the terms "controlled by" and "under common control with") means
the possession, direct or indirect, of the power to cause the direction of
the management and policies of the corporation, whether through the ownership
of voting securities, by contract or otherwise.
(c) "AWARD" means any award under the Plan.
(d) "AWARD AGREEMENT" means, with respect to each Award,
the signed written agreement between the Company and the Participant setting
forth the terms and conditions of the Award.
(e) "BOARD" means the Board of Directors of the Company.
(f) "CODE" means the Internal Revenue Code of 1986, as
amended from time to time, or any successor thereto.
(g) "COMMITTEE" means any committee the Board may appoint
to administer the Plan. To the extent necessary and desirable, the Committee
shall be composed entirely of individuals who meet the qualifications
referred to in Section 162(m) of the Code and Rule 16b-3 under the Exchange
Act. If at any time or to any extent the Board shall not administer the Plan,
then the functions of the Board specified in the Plan shall be exercised by
the Committee.
(h) "COMMON STOCK" means the common stock, par value
$0.0001 per share, of the Company.
(i) "COMPANY" means Vyyo Inc., a Delaware corporation (or
any successor corporation).
(j) "DEFERRED STOCK" means the right to receive Shares at
the end of a specified deferral period granted pursuant to Section 8 below.
(k) "DISABILITY" means the inability of a Participant to
perform substantially his or her duties and responsibilities to the Company
or to any Parent or Subsidiary by reason of a physical or mental disability
or infirmity (i) for a continuous period of six months, or (ii) at such
earlier time as the Participant submits medical evidence satisfactory to the
Administrator that the Participant has a physical or mental disability or
infirmity that will likely prevent the Participant from returning to the
performance of the Participant's work duties for six months or longer. The
date of such Disability shall be the last day of such six-month period or the
day on which the Participant submits such satisfactory medical evidence, as
the case may be.
(l) "ELIGIBLE RECIPIENT" means an officer, director,
employee, consultant or advisor of the Company or of any Parent or Subsidiary.
(m) "EMPLOYEE DIRECTOR" means any director of the Company
who is also an employee of the Company or of any Parent or Subsidiary.
(n) "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended from time to time.
(o) "EXERCISE PRICE" means the per share price at which a
holder of an Award may purchase the Shares issuable upon exercise of the
Award.
(p) "FAIR MARKET VALUE" as of a particular date shall mean
the fair market value of a share of Common Stock as determined by the
Administrator in its sole discretion; PROVIDED, HOWEVER, that (i) if the
Common Stock is admitted to trading on a national securities exchange, fair
market value of a share of Common Stock on any date shall be the closing sale
price reported for such share on such exchange on such date or, if no sale
was reported on such date, on the last date preceding such date on which a
sale was reported, (ii) if the Common Stock is admitted to quotation on the
National Association of Securities Dealers Automated Quotation ("Nasdaq")
System or other comparable quotation system and has been designated as a
National Market System ("NMS") security, fair market value of a share of
Common Stock on any date shall be the closing sale price reported for such
share on such system on such date or, if no sale was reported on such date,
on the last date preceding such date on which a sale was reported, (iii) if
the Common Stock is admitted to quotation on the Nasdaq System but has not
been designated as an NMS security, fair market value of a share of Common
Stock on any date shall be the average of the highest bid and lowest asked
prices of such share on such system on such date or, if no bid and ask prices
were reported on such date, on the last date preceding such date on which
both bid and ask prices were reported; (iv) in the case of a Limited Stock
Appreciation Right, the fair market value of a share of Common Stock shall be
the "Change in Control Price" (as defined in the Award Agreement evidencing
such Limited Stock Appreciation Right) of a share of Common Stock as of the
date of exercise.
(q) "INCENTIVE STOCK OPTION" means any Option intended to
be designated as an "incentive stock option" within the meaning of Section
422 of the Code.
(r) "LIMITED STOCK APPRECIATION RIGHT" means a Stock
Appreciation Right that can be exercised only in the event of a "Change in
Control" (as defined in the Award Agreement evidencing such Limited Stock
Appreciation Right).
(s) "NON-EMPLOYEE DIRECTOR" means a director of the Company
who is not an employee of the Company or of any Parent or Subsidiary.
(t) "NON-QUALIFIED STOCK OPTION" means any Option that is
not an Incentive Stock Option, including any Option that provides (as of the
time such Option is granted) that it will not be treated as an Incentive
Stock Option.
(u) "OPTION" means an option to purchase Shares granted
pursuant to Section 6 below.
(v) "PARENT" means any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company, if each of the
corporations in the chain (other than the Company) owns stock possessing 50%
or more of the combined voting power of all classes of stock in one of the
other corporations in the chain.
(w) "PARTICIPANT" means (i) any Eligible Recipient selected
by the Administrator, pursuant to the Administrator's authority in Section 2
below, to receive grants of Options, Stock Appreciation Rights, Limited Stock
Appreciation Rights, awards of Restricted Stock, Deferred Stock, or
Performance Shares or any combination of the foregoing, or (ii) any
Non-Employee Director who is eligible to receive grants of Options pursuant
to Section 6(i) below.
(x) "PERFORMANCE SHARES" means Shares that are subject to
restrictions based upon the attainment of specified performance objectives
granted pursuant to Section 8 below.
(y) "REGISTRATION STATEMENT" means the registration
statement on Form S-1 filed with the Securities and Exchange Commission for
the initial underwritten public offering of the Common Stock.
(z) "RESTRICTED STOCK" means Shares subject to certain
restrictions granted pursuant to Section 8 below.
(aa) "SHARES" means shares of Common Stock reserved for
issuance under the Plan, as adjusted pursuant to Sections 3 and 4, and any
successor security.
(bb) "STOCK APPRECIATION RIGHT" means the right pursuant to
an Award granted under Section 7 below to receive an amount equal to the
excess, if any, of (i) the Fair Market Value, as of the date such Stock
Appreciation Right or portion thereof is surrendered, of the Shares covered
by such right or such portion thereof, over (ii) the aggregate Exercise Price
of such right or such portion thereof.
(cc) "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 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain.
2. SECTION ADMINISTRATION.
The Plan shall be administered in accordance with the
requirements of Section 162(m) of the Code (but only to the extent necessary
and desirable to maintain qualification of Awards under the Plan under
Section 162(m) of the Code) and, to the extent applicable, Rule 16b-3 under
the Exchange Act ("Rule 16b-3"), by the Board or, at the Board's sole
discretion, by the Committee, which shall be appointed by the Board, and
which shall serve at the pleasure of the Board.
Pursuant to the terms of the Plan, the Administrator shall
have the power and authority to grant to Eligible Recipients Options, Stock
Appreciation Rights or Limited Stock Appreciation Rights, Awards of
Restricted Stock, Deferred Stock or Performance Shares or any combination of
the foregoing; PROVIDED, HOWEVER, that automatic, nondiscretionary grants of
Options shall be made to Non-Employee Directors pursuant to and in accordance
with the terms of Section 6(i) below. Except as otherwise provided in Section
6(i) below, the Administrator shall have the authority:
(a) to select those Eligible Recipients who shall be
Participants;
(b) to determine whether and to what extent Options, Stock
Appreciation Rights, Limited Stock Appreciation Rights, Awards of Restricted
Stock,
Deferred Stock or Performance Shares or a combination of any of the
foregoing, are to be granted hereunder to Participants;
(c) to determine the number of Shares to be covered by each
Award granted hereunder;
(d) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of each Award granted hereunder (including, but
not limited to, (x) the restrictions applicable to Awards of Restricted Stock
or Deferred Stock and the conditions under which restrictions applicable to
such Awards of Restricted Stock or Deferred Stock shall lapse, and (ii) the
performance goals and periods applicable to Awards of Performance Shares);
(e) to determine the terms and conditions, not inconsistent
with the terms of the Plan, which shall govern all written instruments
evidencing Options, Stock Appreciation Rights, Limited Stock Appreciation
Rights, Awards of Restricted Stock, Deferred Stock or Performance Shares or
any combination of the foregoing granted hereunder;
(f) to reduce the Exercise Price of any Option to the then
current Fair Market Value if the Fair Market Value of the Shares covered by
such Option has declined since the date such Option was granted; and
(g) the Committee may, at any time or from time to time,
authorize the Company, with the consent of the respective Participants, to
issue new Awards in exchange for the surrender and cancellation of any or all
outstanding Awards. The Committee may at any time buy from a Participant an
Award previously granted with payment in cash, Shares (including Restricted
Stock) or other consideration, based on such terms and conditions as the
Committee and the Participant shall agree.
(h) The Administrator shall have the authority, in its sole
discretion, to adopt, alter and repeal such administrative rules, guidelines
and practices governing the Plan as it shall from time to time deem
advisable; to interpret the terms and provisions of the Plan and any Award
issued under the Plan (and any Award Agreement relating thereto); and to
otherwise supervise the administration of the Plan.
(i) All decisions made by the Administrator pursuant to the
provisions of the Plan shall be final, conclusive and binding on all persons,
including the Company and the Participants.
3. SECTION SHARES SUBJECT TO PLAN.
(a) The total number of shares of Common Stock reserved and
available for issuance under the Plan shall be 5,000,000 shares, plus an
annual increase to be added on the first day of the Company's fiscal year
(beginning 2001) equal to the lesser of (i) 900,000 shares or (ii) five
percent (5%) of the number of outstanding shares of Common Stock on the last
day of the immediately preceding fiscal year. Such shares may consist, in
whole or in part, of authorized and unissued shares or treasury shares. The
aggregate number of Shares as to which Options, Stock Appreciation Rights,
and Awards of Restricted Stock, Deferred Stock and Performance Shares may be
granted to any Participant during any calendar year may not, subject to
adjustment as provided in this Section 3, exceed 80% of the Shares reserved
for the purposes of the Plan.
(b) Consistent with the provisions of Section 162(m) of the
Code, as from time to time applicable, to the extent that (i) an Option
expires or is otherwise terminated without being exercised, or (ii) any
Shares subject to any Award of Restricted Stock, Deferred Stock or
Performance Shares granted hereunder are forfeited, such Shares shall again
be available for issuance in connection with future Awards granted under the
Plan. If any Shares have been pledged as collateral for indebtedness incurred
by a Participant in connection with the exercise of an Option and such Shares
are returned to the Company in satisfaction of such indebtedness, such Shares
shall again be available for issuance in connection with future Awards
granted under the Plan.
(c) In the event of any stock dividend, recapitalization,
stock split, reverse stock split, subdivision, combination, reclassification
or similar change in the capital structure of the Company without
consideration, an equitable substitution or proportionate adjustment shall be
made in (i) the aggregate number of Shares reserved for issuance under the
Plan, (ii) the kind, number and Exercise Prices of Shares subject to
outstanding Options, and (iii) the kind, number and Exercise Prices of Shares
subject to outstanding Awards of Restricted Stock, Deferred Stock and
Performance Shares, in each case as may be determined by the Administrator,
in its sole discretion, subject to any required action by the Board or the
stockhold-
ers of the Company and in compliance with applicable securities laws;
PROVIDED, HOWEVER, that fractions of a Share shall not be issued but shall
either be paid in cash at Fair Market Value or shall be rounded up to the
nearest whole share, as determined by the Committee. An adjusted Exercise
Price shall also be used to determine the amount payable by the Company upon
the exercise of any Stock Appreciation Right or Limited Stock Appreciation
Right related to any Option.
4. SECTION CORPORATE TRANSACTIONS
(a) ASSUMPTION OR REPLACEMENT OF AWARDS BY SUCCESSOR. In
the event of (i) a merger or consolidation in which the Company is not the
surviving corporation (other than a merger or consolidation with a
wholly-owned subsidiary, a reincorporation of the Company in a different
jurisdiction, or other transaction in which there is no substantial change in
the stockholders of the Company and the Awards granted under the Plan are
assumed or replaced by the successor corporation, which assumption shall be
binding on all Participants); (ii) a dissolution or liquidation of the
Company; (iii) the sale of substantially all of the assets of the Company; or
(iv) any other transaction which qualifies as a "corporate transaction" under
Section 424(a) of the Code wherein the stockholders of the Company give up
all of their equity interest in the Company (EXCEPT for the acquisition, sale
or transfer of all or substantially all of the outstanding shares of the
Company), any or all outstanding Awards may be assumed or replaced by the
successor corporation (if any) or Parent thereof, which assumption or
replacement shall be binding on all Participants. In the alternative, the
successor corporation or Parent thereof may substitute equivalent awards or
provide substantially similar consideration to Participants as was provided
to stockholders of the Company (after taking into account the existing
provisions of the Awards). The successor corporation or Parent thereof may
also issue, in place of outstanding shares of the Company held by the
Participant, substantially similar shares or other property subject to
repurchase restrictions no less favorable to the Participant. In the event
such successor corporation (if any) or Parent thereof does not assume or
substitute awards, as provided above, pursuant to a transaction described in
this Section 4(a), such Awards shall automatically become fully vested and
exercisable and be released from any restrictions on transfer and repurchase
or forfeiture rights, immediately prior to the specified effective date of
such transaction, for all the Shares at the time represented by such Awards.
In such event, effective upon the consummation of the transaction, or at such
other time and on such conditions as the Board shall determine, all
outstanding Awards under the Plan shall terminate and cease to remain
outstanding, except to the extent assumed by the successor corporation or its
Parent.
(b) OTHER TREATMENT OF AWARDS. Subject to any greater
rights granted to Participants under the foregoing provisions of this Section
4, in the event of the occurrence of any transaction described in Section
4(a), any outstanding Awards shall be treated as provided in the applicable
Award Agreement or plan of merger, consolidation, dissolution, liquidation,
sale of assets or other "corporate transaction."
(c) ASSUMPTION OF AWARDS BY THE COMPANY. The Company, from
time to time, also may substitute or assume outstanding awards granted by
another company, whether in connection with an acquisition of such other
company or otherwise, by either (i) granting an Award under the Plan in
substitution of such other company's award; or (ii) assuming such award as if
it had been granted under the Plan if the terms of such assumed award could
be applied to an award granted under the Plan. Such substitution or
assumption shall be permissible if the holder of the substituted or assumed
award would have been eligible to be granted an Award under the Plan if the
other company had applied the rules of the Plan to such grant. In the event
the Company assumes an award granted by another company, the terms and
conditions of such award shall remain unchanged (EXCEPT that the exercise
price and the number and nature of Shares issuable upon exercise of any such
option will be adjusted approximately pursuant to Section 424(a) of the
Code). In the event the Company elects to grant a new Option rather than
assuming an existing option, such new Option may be granted with a similarly
adjusted Exercise Price.
5. SECTION ELIGIBILITY.
Eligible Recipients shall be eligible to be granted
Options, Stock Appreciation Rights, Limited Stock Appreciation Rights, Awards
of Restricted Stock, Deferred Stock or Performance Shares or any combination
of the foregoing hereunder. The Participants under the Plan shall be selected
from time to time by the Administrator, in its sole discretion, from among
the Eligible Recipients, and the Administrator shall determine, in its sole
discretion, the number of Shares covered by each such Award.
6. SECTION OPTIONS.
Options may be granted alone or in addition to other Awards
granted under the Plan. Any Option granted under the Plan shall be in such
form as the Administrator may from time to time approve, and the provisions
of each Option need not be the same with respect to each Participant.
Participants who are granted Options shall enter into an Award Agreement with
the Company, in such form as the Administrator shall determine, which Award
Agreement shall set forth, among other things, the Exercise Price of the
Option, the term of the Option and provisions regarding exercisability of the
Option granted thereunder.
The Options granted under the Plan may be of two types: (i)
Incentive Stock Options and (ii) Non-Qualified Stock Options.
The Administrator shall have the authority to grant to any
officer or employee of the Company or of any Parent or Subsidiary (including
directors who are also officers of the Company) Incentive Stock Options,
Non-Qualified Stock Options, or both types of Options (in each case with or
without Stock Appreciation Rights or Limited Stock Appreciation Rights).
Directors who are not also officers of the Company or of any Parent or
Subsidiary, consultants or advisors to the Company or to any Parent or
Subsidiary may only be granted Non-Qualified Stock Options (with or without
Stock Appreciation Rights or Limited Stock Appreciation Rights). To the
extent that any Option does not qualify as an Incentive Stock Option, it
shall constitute a separate Non-Qualified Stock Option. More than one Option
may be granted to the same Participant and be outstanding concurrently
hereunder.
Options granted under the Plan shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Administrator
shall deem desirable:
(a) OPTION EXERCISE PRICE. The per share Exercise Price of
Shares purchasable under an Option shall be determined by the Administrator in
its sole discretion at the time of grant but shall not, (i) in the case of
Incentive Stock Options, be less than 100% of the Fair Market Value of the
Common Stock on such date, (ii) in the case of Non-Qualified Stock Options
intended to qualify as "performance-based compensation" within the meaning of
Section 162(m) of the Code, be less than 100% of the Fair Market Value of the
Common Stock on such date
and (iii) in any event, be less than the par value (if any) of the Common
Stock. If a Participant owns or is deemed to own (by reason of the
attribution rules applicable under Section 424(d) of the Code) more than 10%
of the combined voting power of all classes of stock of the Company or of any
Parent or Subsidiary and an Incentive Stock Option is granted to such
Participant, the per share Exercise Price of such Incentive Stock Option (to
the extent required at the time of grant by the Code shall be no less than
110% of the Fair Market Value of the Common Stock on the date such Incentive
Stock Option is granted.
(b) OPTION TERM. The term of each Option shall be fixed by
the Administrator, but no Option shall be exercisable more than ten years
after the date such Option is granted; PROVIDED, HOWEVER, that if an employee
owns or is deemed to own (by reason of the attribution rules of Section
424(d) of the Code) more than 10% of the combined voting power of all classes
of stock of the Company or of any Parent or Subsidiary and an Incentive Stock
Option is granted to such employee, the term of such Incentive Stock Option
(to the extent required by the Code at the time of grant) shall be no more
than five years from the date of grant.
(c) EXERCISABILITY. Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be determined
by the Administrator at or after the time of grant. The Administrator may
provide at the time of grant, in its sole discretion, that any Option shall
be exercisable only in installments, and the Administrator may waive such
installment exercise provisions at any time, in whole or in part, based on
such factors as the Administrator may determine, in its sole discretion,
including but not limited to in connection with any "change in control" of
the Company (as defined in the Award Agreement evidencing such Option).
(d) METHOD OF EXERCISE. Subject to Section 6(c), Options
may be exercised in whole or in part at any time during the Option period, by
giving written notice of exercise to the Company specifying the number of
Shares to be purchased, accompanied by payment in full of the aggregate
Exercise Price of the Shares so purchased in cash or its equivalent, as
determined by the Administrator. In addition, payment for Shares purchased
pursuant to the Plan may be made, where expressly approved for the
Participant by the Committee and where permitted by law:
(i) by cancellation of indebtedness of the Company to
the Participant;
(ii) by surrender of shares of Common Stock that
either (1) have been owned by Participant for more than six
(6) months and have been paid for within the meaning of SEC
Rule 144 (and, if such shares were purchased from the Company
by use of a promissory note, such note has been fully paid
with respect to such Shares); or (2) were obtained by
Participant in the public market;
(iii) by waiver of compensation due or accrued to
Participant for services rendered;
(iv) by tender of property;
(v) with respect only to purchases upon exercise of
an Option, and provided that a public market for the Common
Stock exists: (i) through a "same day sale" commitment from
Participant and a broker-dealer that is a member of the
National Association of Securities Dealers (an "NASD Dealer")
whereby the Participant irrevocably elects to exercise the
Option and to sell a portion of the Shares so purchased to pay
for the aggregate Exercise Price of the Shares so purchased,
and whereby the NASD Dealer irrevocably commits upon receipt
of such Shares to forward such Exercise Price directly to the
Company; or (ii) through a "margin" commitment from
Participant and an NASD Dealer whereby Participant irrevocably
elects to exercise the Option and to pledge the Shares so
purchased to the NASD Dealer in a margin account as security
for a loan from the NASD Dealer in the amount of the aggregate
Exercise Price of the Shares so purchased, and whereby the
NASD Dealer irrevocably commits upon receipt of such Shares to
forward such Exercise Price directly to the Company;
(vi) in the case of the exercise of a Non-Qualified
Stock Option, in the form of Restricted Stock or Performance
Shares subject to an Award hereunder (based, in each case, on
the Fair Market Value of the Common Stock on the date the
Option is exercised); PROVIDED, HOWEVER, that in the case of
an Incentive Stock Option, the right to make payment in the
form of already owned shares of
Common Stock may be authorized only at the time of grant.
If payment of the Exercise Price of a Non-Qualified Stock
Option is made in whole or in part in the form of
Restricted Stock or Performance Shares, the Shares received
upon the exercise of such Option shall be restricted in
accordance with the original terms of the Restricted Stock
Award or Performance Shares Award in question, except that
the Administrator may direct that such restrictions shall
apply only to that number of Shares equal to the number of
shares surrendered upon the exercise of such Option.
(vii) by any combination of the foregoing or
(viii) by any other form of consideration permitted
by applicable law.
A Participant shall generally have the rights to dividends
and any other rights of a stockholder with respect to the Shares subject to
the Option only after the Participant has given written notice of exercise,
has paid in full for such Shares, and, if requested, has given the
representation described in Section 11(b).
The Administrator may require the surrender of all or a
portion of any Option granted under the Plan as a condition precedent to the
grant of a new Option. Subject to the provisions of the Plan, such new Option
shall be exercisable at the Exercise Price, during such period and on such
other terms and conditions as are specified by the Administrator at the time
the new Option is granted. Consistent with the provisions of Section 162(m),
to the extent applicable, upon their surrender, Options shall be canceled and
the Shares previously subject to such canceled Options shall again be
available for future grants of Options and other Awards hereunder.
(e) LOANS. The Company or any Parent or Subsidiary may make
loans available to Option holders in connection with the exercise of
outstanding Options, as the Administrator, in its sole discretion, may
determine. Such loans shall (i) be evidenced by promissory notes entered into
by the Option holders in favor of the Company or any Parent or Subsidiary,
(ii) be subject to the terms and conditions set forth in this Section 6(e)
and such other terms and conditions, not inconsistent with the Plan, as the
Administrator shall determine, (iii) bear interest at the applicable Federal
interest rate or such other rate as the Administrator shall
determine, and (iv) be subject to Board approval (or to approval by the
Administrator to the extent the Board may delegate such authority). In no
event may the principal amount of any such loan exceed the sum of (x) the
aggregate Exercise Price less the par value (if any) of the Shares covered by
the Option, or portion thereof, exercised by the holder, and (y) any Federal,
state, and local income tax attributable to such exercise. The initial term
of the loan, the schedule of payments of principal and interest under the
loan, the extent to which the loan is to be with or without recourse against
the holder with respect to principal and/or interest and the conditions upon
which the loan will become payable in the event of the holder's termination
of service to the Company or to any Parent or Subsidiary shall be determined
by the Administrator. Unless the Administrator determines otherwise, when a
loan is made, Shares having an aggregate Fair Market Value at least equal to
the principal amount of the loan shall be pledged by the holder to the
Company as security for payment of the unpaid balance of the loan, and such
pledge shall be evidenced by a pledge agreement, the terms of which shall be
determined by the Administrator, in its sole discretion; PROVIDED, HOWEVER,
that each loan shall comply with all applicable laws, regulations and rules
of the Board of Governors of the Federal Reserve System and any other
governmental agency having jurisdiction.
(f) NON-TRANSFERABILITY OF OPTIONS. Except under the laws
of descent and distribution, the Participant shall not be permitted to sell,
transfer, pledge or assign any Option, and all Options shall be exercisable,
during the Participant's lifetime, only by the Participant; PROVIDED,
HOWEVER, that the Participant shall be permitted to transfer one or more
Non-Qualified Stock Options to a trust controlled by the Participant during
the Participant's lifetime for estate planning purposes.
(g) TERMINATION OF EMPLOYMENT OR SERVICE. If a
Participant's employment with or service as a director, consultant or advisor
to the Company or to any Parent or Subsidiary terminates by reason of his or
her death, Disability or for any other reason, the Option may thereafter be
exercised to the extent provided in the Award Agreement evidencing such
Option, or as otherwise determined by the Administrator.
(h) ANNUAL LIMIT ON INCENTIVE STOCK OPTIONS. To the extent
that the aggregate Fair Market Value (determined as of the date the Incentive
Stock Option is granted) of Shares with respect to which Incentive Stock
Options granted to a Participant under this Plan and all other option plans
of the Company or of any Parent or Subsidiary become exercisable for the
first time by the Participant during
any calendar year exceeds $100,000 (as determined in accordance with Section
422(d) of the Code), the portion of such Incentive Stock Options in excess of
$100,000 shall be treated as Non-Qualified Stock Options.
(i) AUTOMATIC GRANTS OF OPTIONS TO NON-EMPLOYEE DIRECTORS.
The Company shall grant Non-Qualified Stock Options to Non-Employee Directors
pursuant to this Section 6(i), which grants shall be automatic and
nondiscretionary and otherwise subject to the terms and conditions set forth
in this subsection (i) and the terms of the Plan (the "Automatic Non-Employee
Director Options"). Each Non-Employee Director who first becomes a director
of the Company following the Effective Date (as defined in Section 12) shall
be automatically granted a Non-Qualified Stock Option to purchase 50,000
Shares (an "Initial Option"). Each Non-Employee Director shall be
automatically granted a Non-Qualified Stock Option to purchase 15,000 Shares
(the "Annual Options") on the date immediately following the Company's annual
meeting of stockholders; PROVIDED, HOWEVER, that he or she is then a director
of the Company and, PROVIDED, FURTHER, that as of such date, such director
shall have served on the Board for at least the preceding six (6) months.
(j) The term of each Automatic Non-Employee Director Option
shall be ten (10) years, and the Exercise Price purchasable under an
Automatic Non-Employee Director Option shall be no less than 100% of the Fair
Market Value of the Common Stock on the date of grant, PROVIDED, HOWEVER, in
no event shall the Exercise Price purchasable under an Automatic Non-Employee
Director Option be less than the par value (if any) of the Common Stock. The
Initial Options shall vest and become exercisable in four equal annual
installments on each of the first four anniversaries of the date of grant.
The Annual Options shall be 100% vested and fully exercisable as of the date
of grant.
(k) In the event that the number of Shares available for
grant under the Plan is not sufficient to accommodate the Automatic
Non-Employee Director Options, then the remaining Shares available for
Automatic Non-Employee Director Options shall be granted to Non-Employee
Directors on a pro-rata basis. No further grants shall be made until such
time, if any, as additional Shares become available for grant under the Plan
through action of the Board and/or the stockholders of the Company to
increase the number of Shares that may be issued under the Plan or through
cancellation or expiration of Awards previously granted hereunder.
7. SECTION STOCK APPRECIATION RIGHTS AND LIMITED STOCK APPRECIATION RIGHTS.
Stock Appreciation Rights and Limited Stock Appreciation
Rights may be granted either alone ("Free Standing Rights") or in conjunction
with all or part of any Option granted under the Plan ("Related Rights"). In
the case of a Non-Qualified Stock Option, Related Rights may be granted
either at or after the time of the grant of such Option. In the case of an
Incentive Stock Option, Related Rights may be granted only at the time of the
grant of the Incentive Stock Option. The Administrator shall determine the
Eligible Recipients to whom, and the time or times at which, grants of Stock
Appreciation Rights or Limited Stock Appreciation Rights shall be made; the
number of Shares to be awarded, the Exercise Price (or, in the case of a
Limited Stock Appreciation Right, the "Change in Control" price), and all
other conditions of Stock Appreciation Rights and Limited Stock Appreciation
Rights. The provisions of Stock Appreciation Rights and Limited Stock
Appreciation Rights need not be the same with respect to each Participant.
Stock Appreciation Rights and Limited Stock Appreciation
Rights granted under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Administrator shall deem
desirable:
(a) AWARDS. The prospective recipient of a Stock
Appreciation Right or Limited Stock Appreciation Right shall not have any
rights with respect to such Award, unless and until such recipient has
executed an Award Agreement evidencing the Award (a "Stock Appreciation Right
Agreement" or "Limited Stock Appreciation Right Agreement," as appropriate)
and delivered a fully executed copy thereof to the Company, within a period
of sixty days (or such other period as the Administrator may specify) after
the award date. Participants who are granted Stock Appreciation Rights or
Limited Stock Appreciation Rights shall have no rights as stockholders of the
Company with respect to the grant or exercise of such rights.
(b) EXERCISABILITY.
(i) Stock Appreciation Rights that are Free Standing
Rights ("Free Standing Stock Appreciation Rights") shall be
exercisable at such time or times and subject to such terms
and conditions
as shall be determined by the Administrator at or after
grant; PROVIDED, HOWEVER, that no Free Standing Stock
Appreciation Right shall be exercisable during the first
six months of its term, except that this additional
limitation shall not apply in the event of a Participant's
death or Disability prior to the expiration of such
six-month period.
(ii) Stock Appreciation Rights that are Related
Rights ("Related Stock Appreciation Rights") shall be
exercisable only at such time or times and to the extent that
the Options to which they relate shall be exercisable in
accordance with the provisions of Section 6 above and this
Section 7 of the Plan; PROVIDED, HOWEVER, that a Related Stock
Appreciation Right granted in connection with an Incentive
Stock Option shall be exercisable only if and when the Fair
Market Value of the Common Stock subject to the Incentive
Stock Option exceeds the Exercise Price of such Option;
PROVIDED, FURTHER, that no Related Stock Appreciation Right
shall be exercisable during the first six months of its term,
except that this additional limitation shall not apply in the
event of a Participant's death or Disability prior to the
expiration of such six-month period.
(iii) Limited Stock Appreciation Rights shall only be
exercised within the 30-day period following a "Change in
Control" (as defined by the Administrator in the Limited Stock
Appreciation Right Agreement evidencing such right) and, with
respect to Limited Stock Appreciation Rights that are Related
Rights ("Related Limited Stock Appreciation Rights"), only to
the extent that the Options to which they relate shall be
exercisable in accordance with the provisions of Section 6
above and this Section 7 of the Plan.
(c) PAYMENT UPON EXERCISE.
(i) Upon the exercise of a Free Standing Stock
Appreciation Right, the Participant shall be entitled to
receive up to, but not more than, an amount in cash or that
number of Shares (or any combination of cash and Shares) equal
in value to the excess of the Fair Market Value as of the date
of exercise over the per share Exercise Price specified in the
Free Standing Stock Appreciation Right
(which Exercise Price shall be no less than 100% of the
Fair Market Value of the Common Stock on the date of grant)
multiplied by the number of Shares in respect of which the
Free Standing Stock Appreciation Right is being exercised,
with the Administrator having the right to determine the
form of payment.
(ii) A Related Right may be exercised by a
Participant by surrendering the applicable portion of the
related Option. Upon such exercise and surrender, the
Participant shall be entitled to receive up to, but not more
than, an amount in cash or that number of Shares (or any
combination of cash and Shares) equal in value to the excess
of the Fair Market Value as of the date of exercise over the
per share Exercise Price specified in the related Option
multiplied by the number of Shares in respect of which the
Related Stock Appreciation Right is being exercised, with the
Administrator having the right to determine the form of
payment. Options which have been so surrendered, in whole or
in part, shall no longer be exercisable to the extent the
Related Rights have been so exercised.
(iii) Upon the exercise of a Limited Stock
Appreciation Right, the Participant shall be entitled to
receive an amount in cash equal in value to the excess of the
"Change in Control Price" (as defined in the Award Agreement
evidencing such Limited Stock Appreciation Right) of a share
of Common Stock Share as of the date of exercise over (A) the
per share Exercise Price specified in the related Option, or
(B) in the case of a Limited Stock Appreciation Right which is
a Free Standing Stock Appreciation Right, the per share
Exercise Price specified in the Free Standing Stock
Appreciation Right, such excess to be multiplied by the number
of Shares in respect of which the Limited Stock Appreciation
Right shall have been exercised.
(d) NON-TRANSFERABILITY.
(i) Free Standing Stock Appreciation Rights shall be
transferable only when and to the extent that an Option would
be transferable under Section 6(f) of the Plan.
(ii) Related Stock Appreciation Rights shall be
transferable only when and to the extent that the underlying
Option would be transferable under Section 6(f) of the Plan.
(iii) Limited Stock Appreciation Rights shall be
transferable only when and to the extent that an Option would
be transferable under Section 6(f) of the Plan.
(e) TERMINATION OF EMPLOYMENT OR SERVICE
(i) In the event of the termination of employment or
service of a Participant who has been granted one or more Free
Standing Stock Appreciation Rights, such rights shall be
exercisable at such time or times and subject to such terms
and conditions as shall be determined by the Administrator at
or after grant.
(ii) In the event of the termination of employment or
service of a Participant who has been granted one or more
Related Stock Appreciation Rights, such rights shall be
exercisable at such time or times and subject to such terms
and conditions as set forth in the related Options.
(iii) In the event of the termination of employment
or service of a Participant who has been granted one or more
Limited Stock Appreciation Rights, such rights shall be
exercisable at such time or times and subject to such terms
and conditions as shall be determined by the Administrator at
or after grant.
(f) TERM.
(i) The term of each Free Standing Stock
Appreciation Right shall be fixed by the Administrator, but
no Free Standing Stock Appreciation Right shall be
exercisable more than ten years after the date such right
is granted.
(ii) The term of each Related Stock Appreciation
Right shall be the term of the Option to which it relates, but
no Related
Stock Appreciation Right shall be exercisable more than ten
years after the date such right is granted.
(iii) The term of each Limited Stock Appreciation
Right shall be fixed by the Administrator, but no Limited
Stock Appreciation Right shall be exercisable more than ten
years after the date such right is granted.
8. SECTION RESTRICTED STOCK, DEFERRED STOCK AND PERFORMANCE SHARES.
Awards of Restricted Stock, Deferred Stock or Performance
Shares may be issued either alone or in addition to other Awards granted
under the Plan. The Administrator shall determine the Eligible Recipients to
whom, and the time or times at which, Awards of Restricted Stock, Deferred
Stock or Performance Shares shall be made; the number of Shares to be
awarded; the Exercise Price, if any, to be paid by the Participant for the
acquisition of Restricted Stock, Deferred Stock or Performance Shares; the
Restricted Period (as defined in Section 8(b)) applicable to Awards of
Restricted Stock or Deferred Stock; the performance objectives applicable to
Awards of Deferred Stock or Performance Shares; and all other conditions of
the Awards of Restricted Stock, Deferred Stock and Performance Shares.
Subject to the requirements of Section 162(m) of the Code, as applicable, the
Administrator may also condition the grant of the Award of Restricted Stock,
Deferred Stock or Performance Shares upon the exercise of Options, or upon
such other criteria as the Administrator may determine, in its sole
discretion. The provisions of the Awards of Restricted Stock, Deferred Stock
or Performance Shares need not be the same with respect to each Participant.
In the sole discretion of the Administrator, loans may be made to
Participants in connection with the purchase of Restricted Stock under
substantially the same terms and conditions as provided in Section 6(e) of
the Plan with respect to the exercise of Options.
(a) AWARDS AND CERTIFICATES. The prospective recipient of
Awards of Restricted Stock, Deferred Stock or Performance Shares shall not
have any rights with respect to any such Award, unless and until such
recipient has executed an Award Agreement evidencing the Award (a "Restricted
Stock Award Agreement," "Deferred Stock Award Agreement" or "Performance
Shares Award Agreement," as appropriate) and delivered a fully executed copy
thereof to the Company, within a period of sixty days (or such other period
as the Administrator may specify) after the award date. Except as otherwise
provided below in Section
8(b), (i) each Participant who is granted an Award of Restricted Stock or
Performance Shares shall be issued a stock certificate in respect of such
shares of Restricted Stock or Performance Shares; and (ii) such certificate
shall be registered in the name of the Participant, and shall bear an
appropriate legend referring to the terms, conditions, and restrictions
applicable to any such Award.
(b) The Company may require that the stock certificates
evidencing Restricted Stock or Performance Shares granted hereunder be held
in the custody of the Company until the restrictions thereon shall have
lapsed, and that, as a condition of any Award of Restricted Stock or
Performance Shares, the Participant shall have delivered a stock power,
endorsed in blank, relating to the Shares covered by such Award.
(c) With respect to Awards of Deferred Stock, at the
expiration of the Restricted Period, stock certificates in respect of such
Shares of Deferred Stock shall be delivered to the Participant, or his legal
representative, in a number equal to the number of Shares covered by the
Deferred Stock Award.
(d) RESTRICTIONS AND CONDITIONS. The Awards of Restricted
Stock, Deferred Stock and Performance Shares granted pursuant to this Section
8 shall be subject to the following restrictions and conditions:
(i) Subject to the provisions of the Plan and the
Restricted Stock Award Agreement, Deferred Stock Award
Agreement or Performance Shares Award Agreement, as
appropriate, governing any such Award, during such period as
may be set by the Administrator commencing on the date of
grant (the "Restricted Period"), the Participant shall not be
permitted to sell, transfer, pledge or assign shares of
Restricted Stock, Deferred Stock or Performance Shares awarded
under the Plan; PROVIDED, HOWEVER, that the Administrator may,
in its sole discretion, provide for the lapse of such
restrictions in installments and may accelerate or waive such
restrictions in whole or in part based on such factors and
such circumstances as the Administrator may determine, in its
sole discretion, including, but not limited to, the attainment
of certain performance related goals, the Participant's
termination of employment or service as a director, consultant
or advisor to the Company or any Parent or Subsidiary, the
Participant's death or Disability or the occurrence of a
"change in control" as defined in the Restricted Stock Award
Agreement,
Deferred Stock Award Agreement or Performance Shares Award
Agreement, as appropriate, evidencing such Award.
(ii) Except as provided in Section 8(c)(i), the
Participant shall generally have the rights of a stockholder
of the Company with respect to Restricted Stock or Performance
Shares during the Restricted Period. The Participant shall
generally not have the rights of a stockholder with respect to
Shares subject to Awards of Deferred Stock during the
Restricted Period; PROVIDED, HOWEVER, that dividends declared
during the Restricted Period with respect to the number of
Shares covered by Awards of Deferred Stock shall be paid to
the Participant. Certificates for unrestricted Shares shall be
delivered to the Participant promptly after, and only after,
the Restricted Period shall expire without forfeiture in
respect of such Awards of Restricted Stock, Deferred Stock or
Performance Shares except as the Administrator, in its sole
discretion, shall otherwise determine.
(iii) The rights of Participants granted Awards of
Restricted Stock, Deferred Stock or Performance Shares upon
termination of employment or service as a director, consultant
or advisor to the Company or to any Parent or Subsidiary
terminates for any reason during the Restricted Period shall
be set forth in the Restricted Stock Award Agreement, Deferred
Stock Award Agreement or Performance Shares Award Agreement,
as appropriate, governing such Awards.
9. SECTION AMENDMENT AND TERMINATION.
The Board may amend, alter or discontinue the Plan, but no
amendment, alteration, or discontinuation shall be made that would impair the
rights of a Participant under any Award theretofore granted without such
Participant's consent, or that, without the approval of the stockholders (as
described below), would:
(a) except as provided in Section 3 of the Plan, increase
the total number of Shares reserved for issuance under the Plan;
(b) change the class of officers, directors, employees,
consultants and advisors eligible to participate in the Plan; or
(c) extend the maximum Option period under Section 6(b) of
the Plan.
(d) Notwithstanding the foregoing, stockholder approval
under this Section 9 shall only be required at such time and under such
circumstances as stockholder approval would be required under Section 162(m)
of the Code or other applicable law, rule or regulation with respect to any
material amendment to an employee benefit plan of the Company.
(e) The Administrator may amend the terms of any Award
theretofore granted, prospectively or retroactively, but, subject to Section
3 of Plan, no such amendment shall impair the rights of any Participant
without his or her consent.
10. SECTION UNFUNDED STATUS OF PLAN.
The Plan is intended to constitute an "unfunded" plan for
incentive compensation. With respect to any payments not yet made to a
Participant by the Company, nothing contained herein shall give any such
Participant any rights that are greater than those of a general creditor of
the Company.
11. SECTION GENERAL PROVISIONS.
(a) Shares shall not be issued pursuant to the exercise of
any Award granted hereunder unless the exercise of such Award and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act
of 1933, as amended, the Exchange Act and the requirements of any stock
exchange upon which the Common Stock may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
(b) The Administrator may require each person acquiring
Shares to represent to and agree with the Company in writing that such person
is acquiring the Shares without a view to distribution thereof. The
certificates for such Shares may include any legend which the Administrator
deems appropriate to reflect any restrictions on transfer.
(c) All certificates for Shares delivered under the Plan
shall be subject to such stock-transfer orders and other restrictions as the
Administrator may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange
upon which the Common Stock is then listed, and any applicable Federal or
state securities law, and the Administrator may cause a legend or legends to
be placed on any such certificates to make appropriate reference to such
restrictions.
(d) Nothing contained in the Plan shall prevent the Board
from adopting other or additional compensation arrangements, subject to
stockholder approval, if such approval is required; and such arrangements may
be either generally applicable or applicable only in specific cases. The
adoption of the Plan shall not confer upon any Eligible Recipient any right
to continued employment or service with the Company or any Parent or
Subsidiary, as the case may be, nor shall it interfere in any way with the
right of the Company or any Parent or Subsidiary to terminate the employment
or service of any of its Eligible Recipients at any time.
(e) Each Participant shall, no later than the date as of
which the value of an Award first becomes includible in the gross income of
the Participant for Federal income tax purposes, pay to the Company, or make
arrangements satisfactory to the Administrator regarding payment of, any
Federal, state, or local taxes of any kind required by law to be withheld
with respect to such Award. The obligations of the Company under the Plan
shall be conditional on the making of such payments or arrangements, and the
Company shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to the Participant.
(f) No member of the Board or the Administrator, nor any
officer or employee of the Company acting on behalf of the Board or the
Administrator, shall be personally liable for any action, determination, or
interpretation taken or made in good faith with respect to the Plan, and all
members of the Board or the Administrator and each and any officer or
employee of the Company acting on their behalf shall, to the extent permitted
by law, be fully indemnified and protected by the Company in respect of any
such action, determination or interpretation.
12. SECTION STOCKHOLDER APPROVAL; EFFECTIVE DATE OF PLAN; EFFECTIVE DATE OF
AMENDMENTS.
(a) The grant of any Award hereunder shall be contingent
upon stockholder approval of the Plan being obtained within 12 months before
or after the date the Board adopts the Plan.
(b) Subject to the approval of the Plan by the stockholders
of the Company within twelve (12) months before or after the date the Plan is
adopted by the Board, the Plan shall be effective as of November 22, 1999.
(c) Subject to the approval of the Amendments by the
stockholders of the Company within twelve (12) months before or after the
date the Amendments are adopted by the Board, the Amendments to the Plan
shall be effective as of the first trading day on or after the date on which
the Securities and Exchange Commission declares the Company's Registration
Statement effective (the "Effective Date").
13. SECTION TERM OF PLAN.
No Option, Stock Appreciation Right, Limited Stock
Appreciation Right, or Awards of Restricted Stock, Deferred Stock or
Performance Shares shall be granted pursuant to the Plan on or after November
22, 2009, but Awards theretofore granted may extend beyond that date.