Exhibit 10.07
TALITY CORPORATION
2000 DIRECTORS STOCK OPTION PLAN
1. PURPOSE
The purpose of the Tality Corporation Directors Stock Option Plan (the
"Plan") is to advance the interests of Tality Corporation, a Delaware
corporation (hereinafter the "Company"), by enabling the Company to
attract, retain and motivate qualified individuals to serve on the
Company's Board of Directors and to align the financial interests of
such individuals with those of the Company's stockholders by providing
for or increasing their proprietary interest in the Company. The stock
options granted pursuant to this Plan are not qualified under Section
422 of the Internal Revenue Code of 1986, as amended (the "Code").
2. DEFINITIONS
(a) "Board" means the Board of Directors of the Company.
(b) "Committee" means the Board and/or a committee of the Board acting
pursuant to its authorization to administer this Plan under Section 7.
(c) "Common Stock" means the Company's Class A Common Stock, as
presently constituted, subject to adjustment as provided in Section 9.
(d) "Fair Market Value" means, as of any date, the mean average of the
high and low prices of the Common Stock for each of the last 20 trading
days prior to the such date on the national securities exchange,
national market system or other trading market on which the Common Stock
has the highest average trading volume. In the absence of such market
for the Common Stock, the Fair Market Value shall be determined in good
faith by the Board.
(e) "Non-Employee Director" means a member of the Board who is not at
the time also an employee of the Company or any of its direct or
indirect majority-owned subsidiaries (regardless of whether such
subsidiary is organized as a corporation, partnership or other entity).
For purposes of this Plan, the Chairman of the Board's status as an
employee shall be determined by the Board.
3. SHARES SUBJECT TO THE PLAN
Subject to adjustment as provided in Section 9, the maximum number of
shares of Common Stock which may be issued pursuant to this Plan shall
not exceed Six Hundred Seventy-Five Thousand (675,000) Shares issued
under this Plan may be authorized and unissued shares of Common Stock or
shares of Common Stock reacquired by the Company. All or any shares of
Common Stock subject to a stock option which for any reason are not
issued or are reacquired under the stock option may again be made
subject to a stock option under the Plan.
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4. PARTICIPANTS
Any person who is a Non-Employee Director shall be eligible for the
award of stock options hereunder. Non-Employee Directors who are granted
stock options hereunder shall be referred to as "Participants."
5. NON-EMPLOYEE DIRECTOR AWARDS
(a) Each person who becomes a Non-Employee Director during any calendar
year shall, upon election to the Board, automatically be granted an
option to purchase 50,000 shares of Common Stock. If such person is also
elected as the Chairman of the Board, such person shall, upon election
as Chairman of the Board, automatically be granted an additional option
to purchase 50,000 shares of Common Stock.
(b) Other than the calendar year in which such person becomes a
Non-Employee Director, each Non-Employee Director, on July 1 of each
calendar year, beginning July 1, 2001, shall automatically be granted an
option to purchase 12,500 shares of Common Stock. In addition, if such
Non-Employee Director is serving as Chairman of the Board, such
Non-Employee Director shall automatically be granted an option to
purchase an additional 12,500 shares of Common Stock.
6. TERMS AND CONDITIONS OF STOCK OPTIONS
(a) GENERAL TERMS AND CONDITIONS: Stock options awarded pursuant to the
Plan need not be identical but each stock option shall be subject to the
following general terms and conditions:
(1) TERMS AND RESTRICTIONS UPON SHARES: The Board may provide that
the shares of Common Stock issued upon exercise of a stock option
shall be subject to such further conditions, restrictions or
agreements as the Board in its discretion may specify prior to the
exercise of such stock option, including without limitation,
deferrals on issuance, conditions on vesting or transferability,
and forfeiture or repurchase provisions. The Committee may
establish rules for the deferred delivery of Common Stock upon
exercise of a stock option with the deferral evidenced by use of
"Stock Units" equal in number to the number of shares of Common
Stock whose delivery is so deferred. A "Stock Unit" is a
bookkeeping entry representing an amount equivalent to the Fair
Market Value of one share of Common Stock. Stock Units represent an
unfunded and unsecured obligation of the Corporation except as
otherwise provided by the Board. Settlement of Stock Units upon
expiration of the deferral period shall be made in Common Stock or
otherwise as determined by the Committee. The amount of Common
Stock, or other settlement medium, to be so distributed may be
increased by an interest factor or by dividend equivalents. Until a
Stock Unit is settled, the number of shares of Common Stock
represented by a Stock Unit shall be subject to adjustment pursuant
to Section 9.
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(2) TRANSFERABILITY OF OPTION: Unless otherwise provided by the
Committee, each stock option shall be transferable only by will or
the laws of descent and distribution.
(3) VESTING. Options granted pursuant to Section 5 shall vest over
a four year period, with 25% of each option vesting on the first
through fourth anniversaries of the date of grant of such option.
(4) OTHER TERMS AND CONDITIONS: No holder of a stock option shall
have any rights as a stockholder with respect to any shares of
Common Stock subject to a stock option hereunder until said shares
have been issued. Stock options may also contain such other
provisions, which shall not be inconsistent with any of the
foregoing terms, as the Board or the Committee shall deem
appropriate. The Board may waive conditions to and/or accelerate
exercisability of a stock option, either automatically upon the
occurrence of specified events (including in connection with a
change of control of the Company) or otherwise in its discretion.
No stock option, however, nor anything contained in the Plan, shall
confer upon any Participant any right to serve as a director of the
Company.
(b) STOCK OPTION PRICE: The exercise price for each stock option shall
be established by the Board or under a formula established by the Board.
The exercise price shall not be less than the Fair Market Value of the
stock on the date of grant. The exercise price shall be payable in cash,
by payment under an arrangement with a broker where payment is made
pursuant to an irrevocable direction to the broker to deliver all or
part of the proceeds from the sale of the option shares to the Company,
by the surrender of shares of Common Stock owned by the optionholder
exercising the option and having a fair market value on the date of
exercise equal to the exercise price but only if such will not result in
an accounting charge to the Company, or by any combination of the
foregoing. In addition, the exercise price shall be payable in such
other form(s) of consideration as the Committee in its discretion shall
specify, including without limitation by loan (as described in Section
8) or by techniques that may result in an accounting charge to the
Company. For the purposes of determining the fair market value of shares
of Common Stock surrendered to pay the exercise price of an option,
"fair market value" shall mean the average of the high and low prices of
the Common Stock on the last trading day preceding the date of delivery
of such Common Stock to the Company on the national securities exchange,
national market system or other trading market on which the Common Stock
has the highest average trading volume.
7. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board, except that as provided
herein the Plan may be administered by a Committee of the Board, as
appointed from time to time by the Board. The Board shall fill vacancies
on and from time to time may remove or add members to the Committee. The
Committee shall act pursuant to a majority vote or unanimous written
consent.
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Subject to the express provisions of this Plan, the Committee shall be
authorized and empowered to do all things necessary or desirable in
connection with the administration of this Plan, including, without
limitation: (a) to prescribe, amend and rescind rules relating to this
Plan and to define terms not otherwise defined herein; (b) to prescribe
the form of documentation used to evidence any stock option awarded
hereunder, including provision for such terms as it considers necessary
or desirable, not inconsistent with the terms established by the Board;
(c) to establish and verify the extent of satisfaction of any conditions
to exercisability applicable to stock options; (d) to determine whether,
and the extent to which, adjustments are required pursuant to Section 9
hereof; and (e) to interpret and construe this Plan, any rules and
regulations under the Plan and the terms and conditions of any stock
option awarded hereunder, and to make exceptions to any procedural
provisions in good faith and for the benefit of the Company.
Notwithstanding any provision of this Plan, the Board may at any time
limit the authority of the Committee to administer this Plan.
The Board shall have the authority to establish subplans or other
arrangements not inconsistent with this Plan which the Board deems
necessary or advisable to comply with laws or requirements of foreign
jurisdictions.
All decisions, determinations and interpretations by the Board or,
except as to the Board, the Committee, regarding the Plan, any rules and
regulations under the Plan and the terms and conditions of any stock
option awarded hereunder, shall be final and binding on all Participants
and holders of stock options. The Board and the Committee may consider
such factors as it deems relevant, in its sole and absolute discretion,
in making such decisions, determinations and interpretations including,
without limitation, the recommendations or advice of any officer or
other employee of the Company and such attorneys, consultants and
accountants as it may select.
8. LOANS
The Company may, if authorized by the Board, make loans for the purpose
of enabling a Participant to exercise stock options and to pay the tax
liability resulting from a stock option exercise under the Plan. The
Board shall have full authority to determine the terms and conditions of
such loans. Such loans may be secured by the shares of Common Stock
received upon exercise of such stock option.
9. ADJUSTMENT OF AND CHANGES IN THE STOCK
If the outstanding securities of the class then subject to this Plan are
increased, decreased or exchanged for or converted into cash, property
or a different number or kind of shares or securities, or if cash,
property or shares or securities are distributed in respect of such
outstanding securities, in either case as a result of a reorganization,
reclassification, dividend (other than a regular cash dividend) or other
distribution, stock split, reverse stock split, spin-off or the like, or
if substantially all of the property and assets of the Company are sold,
then, unless the terms of such transaction shall provide otherwise, the
maximum number and type of shares or other securities that may be issued
under this Plan shall be appropriately adjusted. The Committee shall
determine in its sole discretion the
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appropriate adjustment to be effected pursuant to the immediately
preceding sentence. In addition, in connection with any such change in
the class of securities then subject to this Plan, the Committee may
make appropriate and proportionate adjustments in the number and type of
shares or other securities or cash or other property that may be
acquired pursuant to stock options theretofore awarded under this Plan
and the exercise price of such stock options.
No right to purchase or receive fractional shares shall result from any
adjustment in stock options pursuant to this Section 9. In case of any
such adjustment, the shares subject to the stock option shall be rounded
up to the nearest whole share of Common Stock.
10. REGISTRATION, LISTING OR QUALIFICATION OF STOCK
In the event that the Board or the Committee determines in its
discretion that the registration, listing or qualification of the shares
of Common Stock issuable under the Plan on any securities exchange or
under any applicable law or governmental regulation is necessary as a
condition to the issuance of such shares under the stock option, the
stock option shall not be exercisable or exercised in whole or in part
unless such registration, listing, qualification, consent or approval
has been unconditionally obtained.
11. TAXES
The Board or Committee may make such provisions or impose such
conditions as it may deem appropriate for the withholding or payment by
a Participant of any taxes which it determines are necessary or
appropriate in connection with any issuance of shares under this Plan,
and the rights of a holder of a stock option in any shares are subject
to satisfaction of such conditions. The Company shall not be required to
issue shares of Common Stock or to recognize the disposition of such
shares until such obligations are satisfied. At the Participant's
election, any such obligations may be satisfied by having the Company
withhold a portion of the shares of Common Stock that otherwise would be
issued to the holder of the stock option upon exercise of the stock
option or by surrendering to the Company shares of Common Stock
previously acquired. The Company and any affiliate of the Company shall
not be liable to a Participant or any other persons as to any tax
consequence expected, but not realized, by any Participant or other
person due to the receipt of any stock options awarded hereunder.
12. EFFECTIVE DATE, AMENDMENT AND TERMINATION OF PLAN
This Plan shall become effective upon its approval by a majority of the
outstanding shares of the Company in accordance with applicable law. Any
stock options awarded prior to the such date shall be contingent on such
approval and, if such approval is not obtained, shall be null and of no
effect.
Unless earlier suspended or terminated by the Board, no stock options
may be awarded after the tenth anniversary of the date the Plan is
approved by the Company's stockholders. The Board may periodically amend
the Plan as determined appropriate, without further action by the
Company's stockholders except to the extent required by applicable law.
Notwithstanding the foregoing, and subject to adjustment pursuant to
Section 9, the Plan may not be amended
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to materially increase the number of shares of Common Stock authorized
for issuance under the Plan, unless any such amendment is approved by
the Company's stockholders. The Plan may be earlier terminated at such
earlier time as the Board may determine. Termination and expiration of
the Plan will not affect the rights and obligations arising under stock
options theretofore awarded and then in effect.
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