EXHIBIT 10.2
KINZAN, INC.
2000 STOCK PLAN
EFFECTIVE AS OF APRIL 28, 2000
TABLE OF CONTENTS
PAGE
Section 1. ESTABLISHMENT AND PURPOSE....................................1
Section 2. ADMINISTRATION...............................................1
(a) Committees of the Board of Directors.........................1
(b) Authority of the Board of Directors..........................1
Section 3. ELIGIBILITY..................................................1
(a) General Rule.................................................1
(b) Ten-Percent Stockholders.....................................1
Section 4. STOCK SUBJECT TO PLAN........................................2
(a) Basic Limitation.............................................2
(b) Additional Shares............................................2
(c) Acquisitions.................................................2
Section 5. MAXIMUM INDIVIDUAL GRANTS....................................2
Section 6. TERMS AND CONDITIONS OF AWARDS OR SALES......................2
(a) Stock Purchase Agreement.....................................2
(b) Duration of Offers and Nontransferability of Rights..........3
(c) Purchase Price...............................................3
(d) Withholding Taxes............................................3
(e) Restrictions on Transfer of Shares...........................3
(f) Accelerated Vesting..........................................3
Section 7. TERMS AND CONDITIONS OF OPTIONS..............................3
(a) Stock Option Agreement.......................................3
(b) Number of Shares.............................................3
(c) Exercise Price...............................................4
(d) Vesting......................................................4
(e) Withholding Taxes............................................4
(f) Exercisability...............................................4
(g) Accelerated Exercisability...................................4
(h) Basic Term...................................................4
(i) Nontransferability...........................................4
(j) Termination of Service (Except by Death or for Cause)........4
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TABLE OF CONTENTS
(CONTINUED)
PAGE
(k) Leaves of Absence............................................5
(l) Death of Optionee............................................5
(m) Termination for Cause........................................5
(n) No Rights as a Stockholder...................................5
(o) Modification, Extension and Assumption of Options............6
(p) Restrictions on Transfer of Shares...........................6
(q) Accelerated Vesting..........................................6
Section 8. PERFORMANCE MEASURES.........................................6
(a) In General...................................................6
(b) Certification of Achievement of Performance Measures.........6
(c) Committee....................................................7
Section 9. PAYMENT FOR SHARES...........................................7
(a) General Rule.................................................7
(b) Services Rendered............................................7
(c) Surrender of Stock...........................................7
(d) Promissory Note..............................................7
(e) Exercise/Sale................................................7
(f) Exercise/Pledge..............................................7
(g) Net Exercise.................................................8
Section 10. ADJUSTMENT OF SHARES.........................................8
(a) General......................................................8
(b) Mergers and Consolidations...................................8
(c) Reservation of Rights........................................8
Section 11. SECURITIES LAW REQUIREMENTS..................................9
Section 12. NO RETENTION RIGHTS..........................................9
Section 13. DURATION AND AMENDMENTS......................................9
(a) Term of the Plan.............................................9
(b) Right to Amend or Terminate the Plan.........................9
(c) Effect of Amendment or Termination...........................9
Section 14. DEFINITIONS..................................................9
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 15. EXECUTION...................................................12
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KINZAN, INC. 2000 STOCK PLAN
SECTION 1. ESTABLISHMENT AND PURPOSE.
The Plan provides both for the direct award or sale of Shares and for
the grant of Options to purchase Shares as incentives to persons who provide
services to the Company or its affiliates. Options granted under the Plan may
include Nonstatutory Options as well as ISOs intended to qualify under Section
422 of the Code. Capitalized terms are defined in Section 14.
SECTION 2. ADMINISTRATION.
(a) COMMITTEES OF THE BOARD OF DIRECTORS. The Plan may be administered by
one or more Committees. Each Committee shall consist of one or more members of
the Board of Directors who have been appointed by the Board of Directors. Each
Committee shall have such authority and be responsible for such functions as the
Board of Directors has assigned to it. If no Committee has been appointed, the
entire Board of Directors shall administer the Plan. Subject to the foregoing,
the Board of Directors shall establish a Committee comprised solely of not less
than two members of the Board of Directors who each shall qualify as (i) a
"non-employee director" within the meaning of Rule 16b-3(b)(3) or any successor
rule under the Securities Exchange Act of 1934, as amended from time to time,
and (ii) an "outside director" within the meaning of Section 162(m) of the Code,
and unless the Board of Directors determines otherwise, such Committee shall
have authority to make awards or sales of Shares or grants of Options to Covered
Employees. Any reference to the Board of Directors in the Plan shall be
construed as a reference to the Committee (if any) to whom the Board of
Directors has assigned a particular function.
(b) AUTHORITY OF THE BOARD OF DIRECTORS. Subject to the provisions of the
Plan, the Board of Directors shall have full authority and discretion to take
any actions it deems necessary or advisable for the administration of the Plan.
All decisions, interpretations and other actions of the Board of Directors shall
be final and binding on all Purchasers, all Optionees and all persons deriving
their rights from a Purchaser or Optionee.
SECTION 3. ELIGIBILITY.
(a) GENERAL RULE. Only Employees, Directors and Consultants shall be
eligible for the grant of Options or the direct award or sale of Shares, as
determined by the Board of Directors. Only Employees shall be eligible for the
grant of ISOs.
(b) TEN-PERCENT STOCKHOLDERS. An individual who owns more than 10% of the
total combined voting power of all classes of outstanding stock of the Company,
its Parent or any of its Subsidiaries shall not be eligible for designation as
an Optionee under an ISO unless the Exercise Price is at least 110% of the Fair
Market Value of a Share on the date of grant and the ISO is not exercisable
after the expiration of five (5) years from the date of grant. For purposes of
this subsection (b), in determining stock ownership, the attribution rules of
Section 424(d) of the Code shall be applied.
SECTION 4. STOCK SUBJECT TO PLAN.
(a) BASIC LIMITATION. Shares offered under the Plan may be authorized
but unissued Shares or treasury Shares. The aggregate number of Shares that
may be issued under the Plan (upon exercise of Options or other rights to
acquire Shares) shall not exceed 1,500,000 Shares, plus (i) an
additional number of Shares as of the first day of each calendar year equal
to 500,000 Shares, (ii) all Shares available for issuance under the Prior
Plan (including any Shares which become available by reason of any forfeiture
or cancellation) and (iii) any Shares issued or issuable under the Plan by
reason of any options or other rights assumed or substituted for in
accordance with Section 4(c) below, in all cases subject to adjustment
pursuant to 0. The number of Shares that are subject to Options or other
rights outstanding at any time under the Plan shall not exceed the number of
Shares that then remain available for issuance under the Plan.
(b) ADDITIONAL SHARES. In the event that any outstanding Option or other
right to acquire Shares for any reason expires or is cancelled or otherwise
terminated under the Plan, the Shares allocable to the unexercised portion of
such Option or other right shall again be available for the purposes of the
Plan. In the event that Shares issued under the Plan are reacquired by the
Company pursuant to any forfeiture provision, right of repurchase or right of
first refusal, such Shares shall again be available for the purposes of the
Plan. To the extent any Shares subject to outstanding options or other rights
under the Prior Plan for any reason expire or are cancelled or otherwise
terminated under such plan or any unvested Shares are issued under the Prior
Plan and subsequently repurchased by the Company, at the option exercise price
or direct issue price paid per Share, pursuant to the Company's repurchase
rights under such plan, such Shares shall be available for purposes of the Plan.
(c) ACQUISITIONS. In connection with the acquisition of any business by the
Company or any of its affiliates, any outstanding grants, awards or sales of
options, stock or other similar rights pertaining to such business may be
assumed or replaced by Options or Shares under the Plan upon such terms and
conditions as the Board of Directors determines. The date of any such grant,
award or sale shall relate back to the date of the initial grant, award or sale
being assumed or replaced, and service with the acquired business shall
constitute service with the Company and its affiliates for purposes of such
grant, award or sale.
SECTION 5. MAXIMUM INDIVIDUAL GRANTS.
The maximum aggregate number of Shares underlying all Options or
other rights under the Plan that may be granted to any single Employee,
including any Options or other rights that may have been granted to such
Employee as a Director or Consultant, over any three-year period during the
term of the Plan shall be 500,000 Shares, subject to adjustment
pursuant to Section 10. For purposes of the preceding sentence, any Options
or other rights that are cancelled or repriced shall continue to be counted
in determining such maximum limit.
SECTION 6. TERMS AND CONDITIONS OF AWARDS OR SALES.
(a) STOCK PURCHASE AGREEMENT. Each award or sale of Shares under the Plan
(other than upon exercise of an Option) shall be evidenced by a Stock Purchase
Agreement between the
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Purchaser and the Company. Such award or sale shall be subject to all
applicable terms and conditions of the Plan, and may be subject to any other
terms and conditions which are not inconsistent with the Plan and which the
Board of Directors deems appropriate for inclusion in a Stock Purchase
Agreement. The provisions of the various Stock Purchase Agreements entered
into under the Plan need not be identical.
(b) DURATION OF OFFERS AND NONTRANSFERABILITY OF RIGHTS. Any right to
acquire Shares under the Plan (other than an Option) shall automatically expire
if not exercised by the Purchaser within thirty (30) days after the grant of
such right was communicated to the Purchaser by the Company. Such right shall
not be transferable and shall be exercisable only by the Purchaser to whom such
right was granted, except in the case of a transfer by the Purchaser to its
affiliate with the prior written consent of the Board of Directors at its sole
discretion.
(c) PURCHASE PRICE. The Purchase Price of Shares to be offered under the
Plan shall be determined by the Board of Directors at its sole discretion. The
Purchase Price shall be payable in a form described in Section 9.
(d) WITHHOLDING TAXES. As a condition to the purchase of Shares, the
Purchaser shall make such arrangements as the Board of Directors may require for
the satisfaction of any federal, state, local or foreign withholding tax
obligations that may arise in connection with such purchase.
(e) RESTRICTIONS ON TRANSFER OF SHARES. Any Shares awarded or sold under
the Plan shall be subject to such vesting and special forfeiture conditions,
rights of repurchase, rights of first refusal and other transfer restrictions as
the Board of Directors may determine. Such restrictions shall be set forth in
the applicable Stock Purchase Agreement and shall apply in addition to any
restrictions that may apply to holders of Shares generally.
(f) ACCELERATED VESTING. Unless the applicable Stock Purchase Agreement
provides otherwise, any right to repurchase a Purchaser's Shares at the original
Purchase Price (if any) upon termination of the Purchaser's Service shall lapse
and all of such Shares shall become vested upon the consummation of a Change in
Control before the Purchaser's Service terminates, at the sole discretion of the
Board of Directors.
SECTION 7. TERMS AND CONDITIONS OF OPTIONS.
(a) STOCK OPTION AGREEMENT. Each grant of an Option 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 which are not inconsistent with
the Plan and which the Board of Directors 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.
(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 10. The Stock Option
Agreement shall also specify whether the Option is an ISO or a Nonstatutory
Option.
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(c) EXERCISE PRICE. Each Stock Option Agreement shall specify the Exercise
Price. The Exercise Price of an ISO shall not be less than 100% of the Fair
Market Value of a Share on the date of grant, and a higher percentage may be
required by 0. Subject to the preceding sentence, the Exercise Price under any
Option shall be determined by the Board of Directors at its sole discretion. The
Exercise Price shall be payable in a form described in Section 10.
(d) VESTING. Each Stock Option Agreement shall specify the date and events
on which all or any installment of the Option shall be vested and nonforfeitable
(except as provided in the Plan or the Stock Option Agreement). The vesting and
nonforfeitability provisions applicable to any Option shall be determined by the
Board of Directors at its sole discretion.
(e) WITHHOLDING TAXES. As a condition to the exercise of an Option, the
Optionee shall make such arrangements as the Board of Directors may require for
the satisfaction of any federal, state, local or foreign withholding tax
obligations that may arise in connection with such exercise. The Optionee shall
also make such arrangements as the Board of Directors may require for the
satisfaction of any federal, state, local or foreign withholding tax obligations
that may arise in connection with the disposition of Shares acquired by
exercising an Option.
(f) EXERCISABILITY. Each Stock Option Agreement shall specify the date when
all or any installment of the Option is to become exercisable. The
exercisability provisions of any Stock Option Agreement shall be determined by
the Board of Directors at its sole discretion.
(g) ACCELERATED EXERCISABILITY. Unless the applicable Stock Option
Agreement provides otherwise, all of an Optionee's Options shall become
exercisable in full if (i) the Company is subject to a Change in Control before
the Optionee's Service terminates, (ii) the Company or its parent does not
continue such Options, and (iii) any surviving corporation or its parent does
not assume such Options, or does not substitute options with substantially the
same terms for such Options.
(h) BASIC TERM. The Stock Option Agreement shall specify the term of the
Option. The term shall not exceed ten (10) years from the date of grant, and
a shorter term may be required by Section 3(b) for Ten-Percent Stockholders.
Subject to the preceding sentence, the Board of Directors at its sole
discretion shall determine when an Option is to expire.
(i) NONTRANSFERABILITY. No Option shall be transferable by the Optionee
other than by beneficiary designation, will or the laws of descent and
distribution. An Option may be exercised during the lifetime of the Optionee
only by the Optionee or by the Optionee's guardian or legal representative. No
Option or interest therein may be transferred, assigned, pledged or hypothecated
by the Optionee during the Optionee's lifetime, whether by operation of law or
otherwise, or be made subject to execution, attachment or similar process.
(j) TERMINATION OF SERVICE (EXCEPT BY DEATH OR FOR CAUSE). If an Optionee's
Service terminates for any reason other than the Optionee's death or for Cause,
then the Optionee's Options shall expire on the earliest of the following
occasions:
(i) The expiration date determined pursuant to subsection (h)
above;
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(ii) The date three (3) months after the termination of the
Optionee's Service for any reason other than Disability, or such later date as
the Board of Directors may determine; or
(iii) The date six (6) months after the termination of the
Optionee's Service by reason of Disability, or such later date as the Board of
Directors may determine.
The Optionee may exercise all or part of the Optionee's Options at any time
before the expiration of such Options under the preceding sentence, but only to
the extent that such Options had become exercisable before the Optionee's
Service terminated (or became exercisable as a result of the termination) and
the underlying Shares had vested before the Optionee's Service terminated (or
vested as a result of the termination). The balance of such Options shall lapse
when the Optionee's Service terminates. In the event that the Optionee dies
after the termination of the Optionee's Service but before the expiration of the
Optionee's Options, all or part of such Options may be exercised (prior to
expiration) by the executors or administrators of the Optionee's estate or by
any person who has acquired such Options directly from the Optionee by
beneficiary designation, bequest or inheritance, but only to the extent that
such Options had become exercisable before the Optionee's Service terminated (or
became exercisable as a result of the termination) and the underlying Shares had
vested before the Optionee's Service terminated (or vested as a result of the
termination).
(k) LEAVES OF ABSENCE. For purposes of subsection (j) above, Service
shall be deemed to continue while the Optionee is on a bona fide leave of
absence, if such leave was approved by the Company in writing and if
continued crediting of Service for this purpose is expressly required by the
terms of such leave or by applicable law (as determined by the Company).
(l) DEATH OF OPTIONEE. If an Optionee dies while the Optionee is in
Service, then the Optionee's Options shall expire on the earlier of the
following dates:
(i) The expiration date determined pursuant to subsection (h)
above; or
(ii) The date twelve (12) months after the Optionee's death.
All or part of the Optionee's Options may be exercised at any time before the
expiration of such Options under the preceding sentence by the executors or
administrators of the Optionee's estate or by any person who has acquired such
Options directly from the Optionee by beneficiary designation, bequest or
inheritance, but only to the extent that such Options had become exercisable
before the Optionee's death (or became exercisable as a result of the death) and
the underlying Shares had vested before the Optionee's death (or vested as a
result of the death). The balance of such Options shall lapse when the Optionee
dies.
(m) TERMINATION FOR CAUSE. Unless otherwise determined by the Board of
Directors, all of an Optionee's Options (both vested and unvested) shall be
cancelled and forfeited upon the Optionee's termination of Service for Cause.
(n) NO RIGHTS AS A STOCKHOLDER. An Optionee, or a transferee of an
Optionee, shall have no rights as a stockholder with respect to any Shares
covered by the Optionee's Option until such
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person becomes entitled to receive such Shares by filing a notice of exercise
and paying the Exercise Price pursuant to the terms of such Option.
(o) MODIFICATION, EXTENSION AND ASSUMPTION OF OPTIONS. Within the
limitations of the Plan, the Board of Directors may modify, extend or assume
outstanding Options or may provide for the cancellation of outstanding Options
(whether granted by the Company or another issuer) in return for the grant of
new Options for the same or a different number of Shares and at the same or a
different Exercise Price. The foregoing notwithstanding, no modification of an
Option shall, without the consent of the Optionee, materially impair the
Optionee's rights or increase the Optionee's obligations under such Option.
(p) RESTRICTIONS ON TRANSFER OF SHARES. Any Shares issued upon exercise of
an Option shall be subject to same vesting conditions as were applicable to the
Option and such special forfeiture conditions, rights of repurchase, rights of
first refusal and other transfer restrictions as the Board of Directors may
determine. Such restrictions shall be set forth in the applicable Stock Option
Agreement and shall apply in addition to any restrictions that may apply to
holders of Shares generally. Any right to repurchase the Optionee's Shares at
the original Exercise Price upon termination of the Optionee's Service may be
exercised only (i) for cash or for cancellation of indebtedness incurred in
purchasing the Shares and (ii) within ninety (90) days after the later of (A)
the termination of the Optionee's Service or (B) the date of the Option
exercise.
(q) ACCELERATED VESTING. Unless the applicable Stock Option Agreement
provides otherwise, any right to repurchase an Optionee's Shares at the original
Exercise Price upon termination of the Optionee's Service shall lapse and all of
such Shares shall become vested upon the consummation of a Change in Control
before the Optionee's Service terminates, at the sole discretion of the Board of
Directors.
SECTION 8. PERFORMANCE MEASURES.
(a) IN GENERAL. In the event of an award or sale of Shares or grant of
Options under the Plan with a Purchase Price or Exercise Price of less than
Fair Market Value at the time of such award, sale or grant, the Committee may
at its sole discretion determine and administer of the terms and conditions
of such award, sale or grant so as to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code. To that end,
the grant, payment, vesting and/or exercisability of such award, sale or
grant shall be subject to the achievement during a performance period or
periods of a level or levels of one or more Performance Measures, in each
case as established at the sole discretion of the Committee. The
establishment of Performance Measures applicable to any award, sale or grant
to which this Section 8 applies shall be made before either ninety (90) days
or 25% of the applicable performance period have elapsed. The amount of
compensation payable under the terms of any such award, sale or grant upon
the achievement of any applicable Performance Measure shall not be subject to
any increase as a result of discretion exercised, directly or indirectly, by
the Committee.
(b) CERTIFICATION OF ACHIEVEMENT OF PERFORMANCE MEASURES. No
compensation attributable to an award, sale or grant subject to this Section
8 shall be paid to or otherwise received by a Purchaser or an Optionee who is
a Covered Employee with respect to any
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performance period until the Committee certifies in writing that the
Performance Measures applicable to such award, sale or grant and such
performance period have been satisfied.
(c) COMMITTEE. All actions required or permitted to be taken by the
Committee under this Section 8 shall be undertaken by the Committee comprised
solely of non-employee directors and outside directors, as established pursuant
to Section 2.
SECTION 9. PAYMENT FOR SHARES.
(a) GENERAL RULE. The entire Purchase Price or Exercise Price of Shares
issued under the Plan shall be payable in cash or cash equivalents at the time
when such Shares are purchased, except as otherwise provided in this Section 9.
(b) SERVICES RENDERED. At the sole discretion of the Board of Directors,
Shares may be awarded under the Plan in consideration of services rendered to
the Company, a Parent or a Subsidiary prior to the award.
(c) SURRENDER OF STOCK. At the sole discretion of the Board of Directors,
all or any part of the Exercise Price may be paid by surrendering, or attesting
to the ownership of, Shares that are already owned by the Optionee. Such Shares
shall be surrendered to the Company in good form for transfer and shall be
valued at their Fair Market Value on the date when the Option is exercised. The
Optionee shall not surrender, or attest to the ownership of, Shares in payment
of the Exercise Price if such action would cause the Company, a Parent or a
Subsidiary to recognize compensation expense (or additional compensation
expense) with respect to the Option for financial reporting purposes that
otherwise would not have occurred.
(d) PROMISSORY NOTE. At the sole discretion of the Board of Directors, all
or a portion of the Purchase Price or Exercise Price (as the case may be) of
Shares issued under the Plan may be paid with a full-recourse promissory note.
However, the par value of the Shares, if newly issued, shall be paid in cash or
cash equivalents. The Shares shall be pledged as security for payment of the
principal amount of the promissory note and interest thereon. The interest rate
payable under the terms of the promissory note shall not be less than the
minimum rate (if any) required to avoid the imputation of additional interest
under the Code. Subject to the foregoing, the Board of Directors (at its sole
discretion) shall specify the term, interest rate, amortization requirements (if
any) and other provisions of such note.
(e) EXERCISE/SALE. At the sole discretion of the Board of Directors, and if
Stock is publicly traded, payment may be made all or in part by the delivery (on
a form prescribed by the Company) of an irrevocable direction to a securities
broker approved by the Company to sell Shares and to deliver all or part of the
sales proceeds to the Company in payment of all or part of the Exercise Price
and any withholding taxes.
(f) EXERCISE/PLEDGE. At the sole discretion of the Board of Directors, and
if Stock is publicly traded, payment may be made all or in part by the delivery
(on a form prescribed by the Company) of an irrevocable direction to pledge
Shares to a securities broker or lender approved by the Company, as security for
a loan, and to deliver all or part of the loan proceeds to the Company in
payment of all or part of the Exercise Price and any withholding taxes.
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(g) NET EXERCISE. At the sole discretion of the Board of Directors, and if
Stock is publicly traded, payment of all or any portion of the Exercise Price of
Shares issued under the Plan may be made by reducing the number of Shares
otherwise deliverable upon the exercise of such Option by the number of Shares
having a fair market value equal to the Exercise Price.
SECTION 10. ADJUSTMENT OF SHARES.
(a) GENERAL. In the event of a subdivision of the outstanding Stock, a
declaration of a dividend payable in Shares, a declaration of an
extraordinary dividend payable in a form other than Shares in an amount that
has a material effect on the Fair Market Value of the Stock, a combination or
consolidation of the outstanding Stock into a lesser number of Shares, a
recapitalization, a spin-off, a reclassification or a similar occurrence, the
Board of Directors shall make appropriate adjustments in one or more of (i)
the number of Shares available for future grants under Section 4, (ii) the
number of Shares covered by each outstanding Option, or (iii) the Exercise
Price under each outstanding Option.
(b) MERGERS AND CONSOLIDATIONS. In the event that the Company is a party to
a merger or consolidation, outstanding Options shall be subject to the agreement
of merger or consolidation. Such agreement, without the Optionees' consent, may
provide for:
(i) The continuation of such outstanding Options by the Company
(if the Company is the surviving corporation);
(ii) The assumption of the Plan and such outstanding Options by the
surviving corporation or its parent;
(iii) The substitution by the surviving corporation or its parent of
options with substantially the same terms for such outstanding Options; or
(iv) The cancellation of the vested portion (and not the unvested
portion) of such outstanding Options or other rights by a cash payment of the
excess, if any, of the fair market value of the Shares subject to the vested
portion of any such Option or other rights over the aggregate Exercise Price
with respect to such portion.
(c) RESERVATION OF RIGHTS. Except as provided in this Section 10, an
Optionee or Purchaser shall have no rights by reason of (i) any subdivision
or consolidation of shares of stock of any class, (ii) the payment of any
dividend, or (iii) any other increase or decrease in the number of shares of
stock of any class. Any issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall not
affect, and no adjustment by reason thereof shall be made with respect to,
the number or Exercise Price of Shares subject to an Option. The grant of an
Option pursuant to the Plan shall not affect in any way the right or power of
the Company to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure, to merge or consolidate or to
dissolve, liquidate, sell or transfer all or any part of its business or
assets.
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SECTION 11. SECURITIES LAW REQUIREMENTS.
Shares shall not be issued under the Plan unless the issuance and
delivery of such Shares comply with (or are exempt from) all applicable
requirements of law, including (without limitation) the Securities Act of 1933,
as amended from time to time, the rules and regulations promulgated thereunder,
state securities laws and regulations, and the regulations of any stock exchange
or other securities market on which the Company's securities may then be traded.
SECTION 12. NO RETENTION RIGHTS.
Nothing in the Plan or in any right or Option granted under the Plan
shall confer upon the Purchaser or Optionee any right to continue in Service for
any period of specific duration or interfere with or otherwise restrict in any
way the rights of the Company (or any Parent or Subsidiary employing or
retaining the Purchaser or Optionee) or of the Purchaser or Optionee, which
rights are hereby expressly reserved by each, to terminate his or her Service at
any time and for any reason, with or without cause.
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 of Directors, subject to the approval
of the Company's stockholders. In the event that the Company's stockholders fail
to approve the Plan within twelve (12) months after its adoption by the Board of
Directors, any sales or awards of Shares or grants of Options that have already
occurred shall be rescinded, and no additional sales, awards or grants shall be
made thereafter under the Plan. The Plan shall terminate automatically ten (10)
years after its adoption by the Board of Directors and may be terminated on any
earlier date pursuant to subsection (b) below.
(b) RIGHT TO AMEND OR TERMINATE THE PLAN. The Board of Directors may
amend, suspend or terminate the Plan at any time and for any reason;
provided, however, that any amendment of the Plan which increases the number
of Shares available for issuance under the Plan (except as provided in
Section 10), or which materially changes the class of persons who are
eligible for the grant of ISOs, shall be subject to the approval of the
Company's stockholders. Stockholder approval shall not be required for any
other amendment of the Plan.
(c) EFFECT OF AMENDMENT OR TERMINATION. No Shares shall be issued or sold
under the Plan after the termination thereof, except upon exercise of an Option
granted prior to such termination. The termination of the Plan, or any amendment
thereof, shall not affect any Share previously issued or any Option previously
granted under the Plan.
SECTION 14. DEFINITIONS.
(a) "BOARD OF DIRECTORS" shall mean the board of directors of the Company,
as constituted from time to time.
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(b) "CAUSE" shall mean with respect to an Optionee or Purchaser, unless
another meaning is otherwise specifically provided by the Board of Directors,
the earliest to occur of:
(i) any conviction of, or plea of guilty or nolo contendre to, a
felony in connection with the performance of services for the Company or any of
its affiliates; or
(ii) any willful breach of any written policy or any confidential
or proprietary information, non-compete or non-solicitation covenant with the
Company or any of its affiliates, in any case which is materially and
demonstrably injurious to the Company.
(c) "CHANGE IN CONTROL" shall mean:
(i) The consummation of a merger or consolidation of the Company
with or into another entity or any other corporate reorganization, if persons
who were not stockholders of the Company immediately prior to such merger,
consolidation or other reorganization own immediately after such merger,
consolidation or other reorganization 50% or more of the voting power of the
outstanding securities of each of (A) the continuing or surviving entity and (B)
any direct or indirect parent corporation of such continuing or surviving
entity; or
(ii) The sale, transfer or other disposition of all or
substantially all of the Company's assets.
A transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company's incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company's securities immediately before such transaction.
(d) "CODE" shall mean the Internal Revenue Code of 1986, as amended, from
time to time, and the regulations promulgated thereunder.
(e) "COMMITTEE" shall mean a committee of the Board of Directors, as
described in Section 2(a).
(f) "COMPANY" shall mean Kinzan, Inc., a Delaware corporation.
(g) "CONSULTANT" shall mean a person who performs bona fide services for
the Company, a Parent or a Subsidiary as a consultant or advisor, excluding
Employees and Directors.
(h) "COVERED EMPLOYEE" shall mean each Employee who, as of date of any
award or sale of Shares or grant of Options to such Employee, (i) is a "covered
employee" (as defined in Section 162(m) of the Code) and the recipient of
compensation in excess of $1,000,000 or (ii) is expected by the Board of
Directors to satisfy the requirements of clause (i) as of the end of the taxable
year of the Company, a Parent or a Subsidiary in which compensation attributable
to such Shares or Options (as the case may be) would be deductible without
regard to such Section.
(i) "DIRECTOR" shall mean a member of the board of directors of the
Company, a Parent or a Subsidiary who is not an Employee.
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(j) "DISABILITY" shall mean that the Optionee is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment as determined by the Board of Directors at its sole
discretion.
(k) "EMPLOYEE" shall mean an individual who is a common-law employee of the
Company, a Parent or a Subsidiary.
(l) "EXERCISE PRICE" shall mean the amount for which one Share may be
purchased upon exercise of an Option, as specified by the Board of Directors in
the applicable Stock Option Agreement.
(m) "FAIR MARKET VALUE" shall mean the fair market value of a Share, as
determined by such methods or procedures as shall be established from time to
time by the Board of Directors at its sole discretion. Such determination shall
be conclusive and binding on all persons.
(n) "ISO" shall mean an incentive stock option described in Section 422(b)
of the Code.
(o) "NONSTATUTORY OPTION" shall mean a stock option not described in
Sections 422(b) or 423(b) of the Code.
(p) "OPTION" shall mean an ISO or Nonstatutory Option granted under the
Plan and entitling the holder to purchase Shares.
(q) "OPTIONEE" shall mean an individual who holds an Option.
(r) "PARENT" shall mean 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 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.
(s) "PERFORMANCE MEASURES" shall mean any of the following: net sales;
pre-tax income before allocation of corporate overhead and bonus; budget; cash
flow; earnings per share; net income; division, group or corporate financial
goals; return on stockholders' equity; return on assets; attainment of strategic
and operational initiatives; appreciation in and/or maintenance of the price of
Shares or any other public-traded securities of the Company; earnings before
interest and taxes; earnings before interest, taxes, depreciation and
amortization; economic value-added models; comparisons with various stock market
indices; increase in number of customers; and/or reductions in costs.
(t) "PLAN" shall mean this Kinzan, Inc. 2000 Stock Plan.
(u) "PRIOR PLAN" shall mean the Kinzan.com 1999 Stock Option/Stock Issuance
Plan.
(v) "PURCHASE PRICE" shall mean the consideration for which one Share may
be acquired under the Plan (other than upon exercise of an Option), as specified
by the Board of Directors in the applicable Stock Purchase Agreement.
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(w) "PURCHASER" shall mean an individual to whom the Board of Directors has
offered the right to acquire Shares under the Plan (other than upon exercise of
an Option).
(x) "SELECTED AWARD" shall have the meaning ascribed in Section(a).
(y) "SERVICE" shall mean service as an Employee, Director or Consultant.
(z) "SHARE" shall mean one share of common stock of the Company, with a par
value of $0.001, as adjusted in accordance with Section 10 (if applicable).
(aa) "STOCK OPTION AGREEMENT" shall mean the agreement between the Company
and an Optionee which contains the terms, conditions and restrictions pertaining
to the Optionee's Option.
(bb) "STOCK PURCHASE AGREEMENT" shall mean the agreement between the Company
and a Purchaser who acquires Shares under the Plan which contains the terms,
conditions and restrictions pertaining to the acquisition of such Shares.
(cc) "SUBSIDIARY" shall mean 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 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.
(dd) "TEN-PERCENT STOCKHOLDER" shall mean an individual who owns more than
10% of the total combined voting power of all classes of outstanding stock of
the Company, its Parent or any of its Subsidiaries.
SECTION 15. EXECUTION.
To record the adoption of the Plan by the Board of Directors,
the Company has caused its authorized officer to execute the same.
KINZAN, INC.
By: /s/ Jeffrey P. Higgins
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Title: Vice President and General Counsel
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