EXHIBIT 99.1
COLDWATER CREEK INC.
1996 STOCK OPTION/STOCK ISSUANCE PLAN
ARTICLE ONE
GENERAL
I. PURPOSE OF THE PLAN
A. This 1996 Stock Option/Stock Issuance Plan (the "Plan") is
intended to promote the interests of Coldwater Creek Inc., a Delaware
corporation (the "Corporation"), by providing eligible individuals with the
opportunity to acquire a proprietary interest, or otherwise increase their
proprietary interest, in the Corporation as an incentive for them to remain
in the service of the Corporation (or its parent or subsidiary corporations).
B. The Discretionary Option Grant and Stock Issuance Programs of
the Plan became effective on March 4, 1996, upon the adoption of the Plan by
the Corporation's Board of Directors. Such date is hereby designated the
"Plan Effective Date." The Automatic Option Grant Program became effective
on January 28, 1997, the date on which the Underwriting Agreement for the
initial public offering of the Corporation's Common Stock was executed and
priced. Such date is hereby designated as the "Automatic Option Grant
Program Effective Date."
II. DEFINITIONS
A. For purposes of the Plan, the following definitions
shall be in effect:
AUTOMATIC OPTION GRANT PROGRAM EFFECTIVE DATE: January 28, 1997.
BOARD: the Corporation's Board of Directors.
CHANGE IN CONTROL: a change in ownership or control of the
Corporation effected through either of the following transactions at any time
after the Section 12(g) Registration Date:
(i) the acquisition directly or indirectly by
any person or related group of persons (other than the Corporation or a
person that directly or indirectly controls, is controlled by, or is
under common control with, the Corporation) of beneficial ownership
(within the meaning of Rule 13d-3 of the 1934 Act) of securities
possessing more than fifty percent (50%) of the total combined voting
power of the Corporation's outstanding securities pursuant to a tender
or exchange offer made directly to the Corporation's
stockholders which the Board does not recommend such stockholders to
accept; or
(ii) a change in the composition of the Board
over a period of thirty-six (36) consecutive months or less such that a
majority of the Board members ceases, by reason of one or more contested
elections for Board membership, to be comprised of individuals who either
(A) have been Board members continuously since the beginning of such
period or (B) have been elected or nominated for election as Board members
during such period by at least a majority of the Board members described
in clause (A) who were still in office at the time such election or
nomination was approved by the Board.
CODE: the Internal Revenue Code of 1986, as amended.
COMMITTEE: the committee of two (2) or more non-employee Board
members appointed by the Board to administer the Plan.
COMMON STOCK: shares of the Corporation's common stock.
CORPORATE TRANSACTION: either of the following stockholder-
approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities
possessing more than fifty percent (50%) of the total combined voting
power of the Corporation's outstanding securities are transferred to a
person or persons different from the persons holding those securities
immediately prior to such transaction, or
(ii) the sale, transfer or other disposition of
all or substantially all of the Corporation's assets in complete
liquidation or dissolution of the Corporation.
DISABILITY: the inability of an individual to engage in any
substantial gainful activity by reason of any medically determinable physical
or mental impairment which is expected to result in death or has lasted or
can be expected to last for a continuous period of not less than twelve (12)
months. However, for purposes of the Automatic Option Grant Program,
Disability shall mean the inability of the non-employee Board member to
perform his or her usual duties as a Board member by reason of any medically
determinable physical or mental impairment expected to result in death or to
be of continuous duration of twelve (12) months or more.
2.
EMPLOYEE: an individual who performs services while in the employ
of the Corporation or one or more parent or subsidiary corporations, subject
to the control and direction of the employer entity not only as to the work
to be performed but also as to the manner and method of performance.
EXERCISE DATE: the date on which the Corporation shall have
received written notice of the option exercise.
FAIR MARKET VALUE: the Fair Market Value per share of Common Stock
determined in accordance with the following provisions:
- If the Common Stock is not at the time listed
or admitted to trading on any national securities
exchange but is traded on the Nasdaq National Market,
then the Fair Market Value shall be the closing selling
price per share on the date in question, as such price is
reported by the National Association of Securities
Dealers on the Nasdaq National Market. If there is no
reported closing selling price for the Common Stock on
the date in question, then the closing selling price on
the last preceding date for which such quotation exists
shall be determinative of Fair Market Value.
- If the Common Stock is at the time listed or
admitted to trading on any national securities exchange,
then the Fair Market Value shall be the closing selling
price per share on the date in question on the exchange
determined by the Plan Administrator to be the primary
market for the Common Stock, as such price is officially
quoted in the composite tape of transactions on such
exchange. If there is no reported sale of Common Stock
on such exchange on the date in question, then the Fair
Market Value shall be the closing selling price on the
exchange on the last preceding date for which such
quotation exists.
- If the Common Stock is on the date in question
neither listed nor admitted to trading on any national
securities exchange nor traded on the Nasdaq National
Market, then the Fair Market Value of the Common Stock on
such date shall be determined by the Plan Administrator
after taking into account such factors as the Plan
Administrator shall deem appropriate.
- For any option granted on the Automatic Option
Grant Program Effective Date, the Fair Market Value per
share of Common Stock shall be deemed equal to the price
per share at which the Common Stock is sold in the
initial public offering pursuant to the Underwriting
Agreement.
INCENTIVE OPTION: a stock option which satisfies the requirements
of Code Section 422.
3.
INVOLUNTARY TERMINATION: the termination of any individual's
Service which occurs by reason of:
(i) such individual's involuntary dismissal or
discharge by the Corporation for reasons other than Misconduct, or
(ii) such individual's voluntary resignation
following (A) a change in his or her position with the
Corporation which materially reduces his or her level of
responsibility, (B) a reduction in his or her level of
compensation (including base salary, fringe benefits and
participation in corporate-performance based bonus or
incentive programs) by more than fifteen percent (15%) or
(C) a relocation of such individual's place of employment
by more than fifty (50) miles, provided and only if such
change, reduction or relocation is effected by the
Corporation without the individual's consent.
MISCONDUCT: the commission of any act of fraud, embezzlement or
dishonesty by the Optionee or Participant, any unauthorized use or disclosure
by such person of confidential information or trade secrets of the
Corporation (or any parent or subsidiary), or any other intentional
misconduct by such person adversely affecting the business or affairs of the
Corporation (or any parent or subsidiary) in a material manner. The
foregoing definition shall not be deemed to be inclusive of all the acts or
omissions which the Corporation (or any parent or subsidiary) may consider as
grounds for the dismissal or discharge of any Optionee, Participant or other
person in the Service of the Corporation (or any parent or subsidiary).
1933 ACT: the Securities Act of 1933, as amended from time to time.
1934 ACT: the Securities Exchange Act of 1934, as amended from
time to time.
NON-STATUTORY OPTION: a stock option not intended to meet the
requirements of Code Section 422.
OPTIONEE: a person to whom an option is granted under the
Discretionary Option Grant or Automatic Option Grant Program.
PARTICIPANT: a person who is issued Common Stock under the Stock
Issuance Program.
PLAN ADMINISTRATOR: either the Board or the Committee, to the
extent the Committee is at the time responsible for the administration of the
Plan in accordance with Section IV of Article One.
PLAN EFFECTIVE DATE: March 4, 1996.
4.
SECTION 12(g) REGISTRATION DATE: January 28, 1997, the date on
which the initial registration of the Common Stock under Section 12(g) of the
1934 Act became effective.
SERVICE: the performance of services on a periodic basis for the
Corporation (or any parent or subsidiary corporation) in the capacity of an
Employee, a non-employee member of the board of directors or an independent
consultant or advisor, except to the extent otherwise specifically provided
in the applicable stock option or stock issuance agreement.
10% STOCKHOLDER: the owner of stock (as determined under Code
Section 424(d)) possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Corporation or any parent or
subsidiary corporation.
B. The following provisions shall be applicable in determining
the parent and subsidiary corporations of the Corporation:
Any corporation (other than the Corporation) in
an unbroken chain of corporations ending with the
Corporation shall be considered to be a PARENT of the
Corporation, provided each such corporation in the
unbroken chain (other than the Corporation) owns, at the
time of the determination, stock possessing fifty percent
(50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such
chain.
Each corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the
Corporation shall be considered to be a SUBSIDIARY of the
Corporation, provided each such corporation (other than
the last corporation) in the unbroken chain owns, at the
time of the determination, stock possessing fifty percent
(50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such
chain.
III. STRUCTURE OF THE PLAN
A. STOCK PROGRAMS. The Plan shall be divided into three (3) se
parate components: the Discretionary Option Grant Program spec ified in
Article Two, the Stock Issuance Program specified in Article Three and the
Automatic Option Grant Program specified in Article Four. Under the
Discretionary Option Grant Program, eligible individuals may, at the
discretion of the Plan Administrator, be granted options to purchase shares
of Common Stock in accordance with the provisions of Article Two. Under the
Stock Issuance Program, eligible individuals may be issued shares of Common
Stock directly, either through the immediate purchase of such shares at a
price not less than one hundred percent (100%) of the Fair Market Value of
the shares at the time of issuance or as a bonus for services rendered the
Corporation. Under the Automatic Option Grant Program, each
5.
individual serving as a non-employee Board member on the Automatic Option
Grant Program Effective Date and each individual who first joins the Board as
a non-employee director at any time after such Effective Date shall at
periodic intervals receive option grants to purchase shares of Common Stock
in accordance with the provisions of the Automatic Option Grant Program of
Article Four, with the first such grants to be made on the Automatic Option
Grant Program Effective Date.
B. GENERAL PROVISIONS. Unless the context clearly indicates
otherwise, the provisions of Articles One and Five shall apply to the
Discretionary Option Grant Program, the Automatic Option Grant Program and
the Stock Issuance Program and shall accordingly govern the interests of all
individuals under the Plan.
IV. ADMINISTRATION OF THE PLAN
A. Until the Section 12(g) Registration Date, both the
Discretionary Option Grant and Stock Issuance Programs shall be administered
by the Board. From and after such Section 12(g) Registration Date, the
Discretionary Option Grant and Stock Issuance Programs shall be administered
solely and exclusively by the Committee, if appointed, or the Board, if a
Committee is not appointed.
B. Members of the Committee shall serve for such period of time
as the Board may determine and shall be subject to removal by the Board at
any time.
C. The Plan Administrator shall have full power and authority
(subject to the express provisions of the Plan) to establish rules and
regulations for the proper administration of the Discretionary Option Grant
and Stock Issuance Programs and to make such determinations under, and issue
such interpretations of, the provisions of such programs and any outstanding
option grants or stock issuances thereunder as it may deem necessary or
advisable. Decisions of the Plan Administrator shall be final and binding on
all parties who have an interest in the Discretionary Option Grant or Stock
Issuance Program or any outstanding option or share issuance thereunder.
D. Administration of the Automatic Option Grant Program shall be
self-executing in accordance with the express terms and conditions of Article
Four, and the Plan Administrator shall exercise no discretionary functions
with respect to the grant of options pursuant to that program, but may amend
such options in accordance with the provisions of Article Four.
V. OPTION GRANTS AND STOCK ISSUANCES
A. The persons eligible to participate in the Discretionary
Option Grant Program under Article Two and the Stock Issuance Program
under Article Three shall be limited to the following:
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(i) officers and other key employees of the Corporation (or
its parent or subsidiary corporations) who render services which
contribute to the management, growth and financial success of the
Corporation (or its parent or subsidiary corporations);
(ii) non-employee members of the Board; and
(iii) those consultants or other independent advisors
who provide valuable services to the Corporation (or its parent or
subsidiary corporations).
B. A Board member shall not vote as a member of the Board or a
member of the Committee concerning any award, or amendment of any award, to
such Board member pursuant to the Discretionary Option Grant Program or the
Stock Issuance Program, other than an award or amendment that applies
uniformly to all non-employee Board members and shall absent himself or
herself from the discussion of any such award.
C. The Plan Administrator shall have full authority to determine,
(i) with respect to the option grants made under the Discretionary Option
Grant Program, which eligible individuals are to receive option grants, the
time or times when such options are to be granted, the number of shares to be
covered by each such grant, the status of the granted option as either an
Incentive Option or a Non-Statutory Option, the time or times at which each
granted option is to become exercisable and the maximum term for which the
option may remain outstanding and (ii), with respect to stock issuances under
the Stock Issuance Program, the number of shares to be issued to each
Participant, the vesting schedule (if any) to be applicable to the issued
shares and the consideration for which such shares are to be issued.
VI. STOCK SUBJECT TO THE PLAN
A. Shares of Common Stock shall be available for issuance under
the Plan and shall be drawn from either the Corporation's authorized but
unissued shares of Common Stock or from reacquired shares of Common Stock,
including shares repurchased by the Corporation on the open market. The
maximum number of shares of Common Stock which may be issued over the term of
the Plan shall not exceed 1,111,847shares, subject to adjustment from time to
time in accordance with the provisions of this Section VI.
B. In no event shall the aggregate number of shares of Common
Stock for which any one individual participating in the Plan may be granted
stock options and direct stock issuances exceed 250,793(1)/ shares per calendar
year.
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(1)/Adjusted to reflect the .67195-for-1 forward stock split effected on
January 4, 1997.
7.
C. Should one or more outstanding options under this Plan expire
or terminate for any reason prior to exercise in full (including any option
cancelled in accordance with the cancellation-regrant provisions of Section
IV of Article Two of the Plan), then the shares subject to the portion of
each option not so exercised shall be available for subsequent option grants
under the Plan. All share issuances under the Plan, whether or not the
shares are subsequently repurchased by the Corporation pursuant to its
repurchase rights under the Plan, shall reduce on a share-for-share basis the
number of shares of Common Stock available for subsequent issuance under the
Plan. In addition, should the exercise price of an outstanding option under
the Plan be paid with shares of Common Stock or should shares of Common Stock
otherwise issuable under the Plan be withheld by the Corporation in
satisfaction of the withholding taxes incurred in connection with the
exercise of an outstanding option under the Plan or the vesting of a direct
share issuance made under the Plan, then the number of shares of Common Stock
available for issuance under the Plan shall be reduced by the gross number of
shares for which the option is exercised or which vest under the share
issuance, and not by the net number of shares of Common Stock actually issued
to the holder of such option or share issuance.
D. Should any change be made to the Common Stock issuable under
the Plan by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, then appropriate adjustments shall be made to (i) the maximum
number and/or class of securities issuable under the Plan, (ii) the maximum
number and/or class of securities for which any one individual participating
in the Plan may be granted stock options and direct stock issuances in the
aggregate per calendar year, (iii) the number and/or class of securities for
which automatic option grants are to be subsequently made per eligible
non-employee Board member under the Automatic Option Grant Program and (iv)
the number and/or class of securities and price per share in effect under
each option outstanding under either the Discretionary Option Grant or
Automatic Option Grant Program. Such adjustments to the outstanding options
are to be effected in a manner which shall preclude the enlargement or
dilution of rights and benefits under such options. The adjustments
determined by the Plan Administrator shall be final, binding and conclusive.
8.
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
I. TERMS AND CONDITIONS OF OPTIONS
Options granted pursuant to the Discretionary Option Grant Program
shall be authorized by action of the Plan Administrator and may, at the Plan
Administrator's discretion, be either Incentive Options or Non-Statutory
Options. Individuals who are not Employees of the Corporation or its parent
or subsidiary corporations may only be granted Non-Statutory Options. Each
granted option shall be evidenced by one or more instruments in the form
approved by the Plan Administrator; PROVIDED, however, that each such
instrument shall comply with the terms and conditions specified below. Each
instrument evidencing an Incentive Option shall, in addition, be subject to
the applicable provisions of Section II of this Article Two.
A. EXERCISE PRICE.
1. The exercise price per share shall be fixed by the Plan
Administrator in accordance with the following provisions:
(i) The exercise price per share of Common Stock
subject to an Incentive Option shall in no event be less than one
hundred percent (100%) of the Fair Market Value of such Common Stock on
the grant date.
(ii) The exercise price per share of Common Stock
subject to a Non-Statutory Option shall in no event be less than
eighty-five percent (85%) of the Fair Market Value of such Common Stock
on the grant date.
2. The exercise price shall become immediately due upon
exercise of the option and shall, subject to the provisions of Section I of
Article Five, be payable in cash or check made payable to the Corporation.
Should the Corporation's outstanding Common Stock be registered under Section
12(g) of the Exchange Act at the time the option is exercised, then the
exercise price may also be paid as follows:
(i) in shares of Common Stock held by the Optionee for
the requisite period necessary to avoid a charge to the Corporation's
earnings for financial reporting purposes and valued at Fair Market Value
on the Exercise Date, or
9.
(ii) to the extent the option is exercised for
vested shares, through a special sale and remittance procedure pursuant
to which the Optionee shall concurrently provide irrevocable written
instructions (a) to a Corporation-designated brokerage firm to effect
the immediate sale of the purchased shares and remit to the
Corporation, out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate exercise price payable for the
purchased shares plus all applicable Federal, state and local income and
employment taxes required to be withheld by the Corporation by
reason of such purchase and (b) to the Corporation to deliver the
certificates for the purchased shares directly to such brokerage firm in
order to complete the sale transaction.
3. Except to the extent such sale and remittance procedure
is utilized, payment of the exercise price for the purchased shares must be
made on the Exercise Date.
B. TERM AND EXERCISE OF OPTIONS. Each option granted under this
Discretionary Option Grant Program shall be exercisable at such time or times
and during such period as is determined by the Plan Administrator and set
forth in the instrument evidencing the grant. No such option, however, shall
have a maximum term in excess of ten (10) years from the grant date.
During the lifetime of the Optionee, Incentive Options shall be
exercisable only by the Optionee and shall not be assignable or transferable
by the Optionee other than by will or by the laws of descent and distribution
following the Optionee's death. However, a Non-Statutory Option may, in
connection with the Optionee's estate plan, be assigned in whole or in part
during the Optionee's lifetime to one or more members of the Optionee's
immediate family or to a trust established exclusively for one or more such
family members. The assigned portion may only be exercised by the person or
persons who acquire a proprietary interest in the option pursuant to the
assignment. The terms applicable to the assigned portion shall be the same as
those in effect for the option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Plan
Administrator may deem appropriate.
C. Termination of Service.
1. Except to the extent otherwise provided pursuant to
subsection C.2 below, the following provisions shall govern the exercise
period applicable to any options held by the Optionee at the time of
cessation of Service or death:
(i) Should the Optionee cease to remain in
Service for any reason other than death or Disability,
then the period during which each outstanding option held
by such Optionee is to remain exercisable shall be
10.
limited to the three (3)-month period following the date
of such cessation of Service.
(ii) Should such Service terminate by reason of
Disability, then the period during which each outstanding
option held by the Optionee is to remain exercisable
shall be limited to the twelve (12)-month period
following the date of such cessation of Service.
(iii) Should the Optionee die while holding one
or more outstanding options, then the period during which
each such option is to remain exercisable shall be
limited to the twelve (12)-month period following the
date of the Optionee's death. During such limited
period, the option may be exercised by the personal
representative of the Optionee's estate or by the person
or persons to whom the option is transferred pursuant to
the Optionee's will or in accordance with the laws of
descent and distribution.
(iv) Should the Optionee's Service be
terminated for Misconduct, then all outstanding options
held by the Optionee shall terminate immediately and
cease to be outstanding.
(v) Under no circumstances, however, shall any
such option be exercisable after the specified expiration
date of the option term.
(vi) During the applicable post-Service
exercise period, the option may not be exercised in the
aggregate for more than the number of vested shares for
which the option is exercisable on the date of the
Optionee's cessation of Service. Upon the expiration of
the applicable exercise period or (if earlier) upon the
expiration of the option term, the option shall terminate
and cease to be exercisable for any vested shares for
which the option has not been exercised. However, the
option shall, immediately upon the Optionee's cessation
of Service for any reason, terminate and cease to be
outstanding with respect to any option shares for which
the option is not at that time exercisable or in which
the Optionee is not otherwise at that time vested.
(vii) In the event of an Involuntary Termination
following a Corporate Transaction or a Change in Control,
the provisions of Section III of this Article Two shall
govern the period for which the outstanding options are
to remain exercisable following the Optionee's cessation
of Service and shall supersede any provisions to the
contrary in this Section.
2. The Plan Administrator shall have complete discretion,
exercisable either at the time the option is granted or at any time while the
option remains outstanding,
11.
- to extend the period of time for which the option is
to remain exercisable following the Optionee's cessation of Service or
death from the limited period in effect under subsection C.1 of this
Article Two to such greater period of time as the Plan Administrator
shall deem appropriate; PROVIDED, that in no event shall such option be
exercisable after the specified expiration date of the option term;
and/or
- to permit one or more options held by the Optionee
under this Article Two to be exercised, during the limited post-Service
exercise period applicable under this paragraph C., not only with
respect to the number of vested shares of Common Stock for which each
such option is exercisable at the time of the Optionee's cessation of
Service but also with respect to one or more subsequent installments
in which the Optionee would otherwise have vested had such cessation of
Service not occurred.
D. STOCKHOLDER RIGHTS. An Optionee shall have no stockholder
rights with respect to any shares covered by the option until such individual
shall have exercised the option, paid the exercise price and become the
holder of record of the purchased shares.
E. UNVESTED SHARES. The Plan Administrator shall have the
discretion to authorize the issuance of unvested shares of Common Stock under
this Discretionary Option Grant Program. Should the Optionee cease Service
while holding such unvested shares, the Corporation shall have the right to
repurchase, at the exercise price paid per share any or all of those unvested
shares. The terms and conditions upon which such repurchase right shall be
exercisable (including the period and procedure for exercise and the
appropriate vesting schedule for the purchased shares) shall be established
by the Plan Administrator and set forth in the agreement evidencing such
repurchase right.
II. INCENTIVE OPTIONS
Incentive Options may only be granted to individuals who are
Employees, and the terms and conditions specified below shall be applicable
to all Incentive Options granted under the Plan. Except as modified by the
provisions of this Section II, all provisions of Articles One, Two and Five
shall be applicable to Incentive Options. Any Options specifically
designated as Non-Statutory shall not be subject to such terms and conditions.
A. DOLLAR LIMITATION. The aggregate Fair Market Value
(determined as of the respective date or dates of grant) of the Common Stock
for which one or more options granted to any Employee under this Plan (or any
other option plan of the Corporation or its parent or subsidiary
corporations) may for the first time become exercisable as incentive stock
options under the Federal tax laws during any one calendar year shall not
exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the
Employee holds two (2) or more such options which become exercisable for the
first time in the same calendar year, the foregoing limitation on the
exercisability of such options
12.
as incentive stock options under the Federal tax laws shall be applied on the
basis of the order in which such options are granted. Should the number of
shares of Common Stock for which any Incentive Option first becomes
exercisable in any calendar year exceed the applicable One Hundred Thousand
Dollar ($100,000) limitation, then that option may nevertheless be exercised
in that calendar year for the excess number of shares as a Non-Statutory
Option under the Federal tax laws.
B. 10% STOCKHOLDER. If any individual to whom an Incentive
Option is granted is a 10% Stockholder, then the exercise price per share
shall not be less than one hundred-ten percent (110%) of the Fair Market
Value per share of Common Stock on the grant date, and the option term shall
not exceed five (5) years measured from the grant date.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. In the event of any Corporate Transaction, each outstanding
option shall automatically accelerate so that each such option shall,
immediately prior to the effective date of the Corporate Transaction, become
fully exercisable with respect to the total number of shares of Common Stock
at the time subject to such option and may be exercised for any or all of
those shares as fully-vested shares of Common Stock. However, an outstanding
option shall not so accelerate if and to the extent: (i) such option is, in
connection with the Corporate Transaction, either to be assumed by the
successor corporation (or parent thereof) or to be replaced with a comparable
option to purchase shares of the capital stock of the successor corporation
(or parent thereof), (ii) such option is to be replaced with a cash incentive
program of the successor corporation which preserves the spread existing on
the unvested option shares at the time of the Corporate Transaction and
provides for subsequent payout in accordance with the same vesting schedule
applicable to such option or (iii) the acceleration of such option is subject
to other limitations imposed by the Plan Administrator at the time of the
option grant. The determination of option comparability under clause (i)
above shall be made by the Plan Administrator, and its determination shall be
final, binding and conclusive.
B. All outstanding repurchase rights shall also terminate
automatically, and the shares of Common Stock subject to those terminated
rights shall immediately vest in full, in the event of any Corporate
Transaction, except to the extent: (i) those repurchase rights are to be
assigned to the successor corporation (or parent thereof) in connection with
such Corporate Transaction or (ii) such accelerated vesting is precluded by
other limitations imposed by the Plan Administrator at the time the
repurchase right is issued.
C. Immediately following the consummation of the Corporate
Transaction, all outstanding options shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation (or
parent thereof).
13.
D. Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in consummation of such Corporate Transaction
had the option been exercised immediately prior to such Corporate
Transaction. Appropriate adjustments to reflect such Corporate Transaction
shall also be made to (i) the exercise price payable per share under each
outstanding option, PROVIDED the aggregate exercise price payable for such
securities shall remain the same, (ii) the maximum number and/or class of
securities available for issuance under the remaining term of the Plan and
(iii) the maximum number and/or class of securities for which any one person
may be granted stock options and direct stock issuances under the Plan per
calendar year.
E. The Plan Administrator shall have full power and authority to
grant options under the Discretionary Option Grant Program which will
automatically accelerate in the event the Optionee's Service subsequently
terminates by reason of an Involuntary Termination within a designated period
(not to exceed twelve (12) months) following the effective date of any
Corporate Transaction in which those options are assumed or replaced and do
not otherwise accelerate. Any options so accelerated shall remain
exercisable for fully-vested shares until the EARLIER of (i) the expiration
of the option term or (ii) the expiration of the one (1)-year period measured
from the effective date of the Involuntary Termination. In addition, the
Plan Administrator may structure one or more of the Corporation's outstanding
repurchase rights so that those rights shall immediately terminate with
respect to any unvested shares held by the Optionee at the time of such
Involuntary Termination, and the shares subject to those terminated
repurchase rights shall accordingly vest in full upon such Involuntary
Termination.
F. The Plan Administrator shall have full power and authority to
grant options under the Discretionary Option Grant Program which will
automatically accelerate in the event the Optionee's Service subsequently
terminates by reason of an Involuntary Termination within a designated period
(not to exceed twelve (12) months) following the effective date of any Change
in Control. Each option so accelerated shall remain exercisable for
fully-vested shares until the EARLIER of (i) the expiration of the option
term or (ii) the expiration of the one (1)-year period measured from the
effective date of the Involuntary Termination. In addition, the Plan
Administrator may structure one or more of the Corporation's outstanding
repurchase rights so that those rights shall immediately terminate with
respect to any unvested shares held by the Optionee at the time of such
Involuntary Termination, and the shares subject to those terminated
repurchase rights shall accordingly vest in full.
G. The portion of any Incentive Option accelerated in connection
with a Corporate Transaction or Change in Control shall remain exercisable as
an Incentive Option only to the extent the applicable One Hundred Thousand
Dollar limitation is not exceeded. To the extent such dollar limitation is
exceeded, the accelerated portion of such option shall be exercisable as a
Non-Statutory Option under the Federal tax laws.
14.
H. The outstanding options shall in no way affect the right of
the Corporation to adjust, reclassify, reorganize or otherwise change its
capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.
IV. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any
time and from time to time, with the consent of the affected Optionees, the
cancellation of any or all outstanding options under this Article Two and to
grant in substitution new options under the Plan covering the same or
different numbers of shares of Common Stock but with an exercise price per
share not less than (i) one hundred percent (100%) of the Fair Market Value
per share of Common Stock on the new grant date in the case of a grant of an
Incentive Option, (ii) one hundred ten percent (110%) of such Fair Market
Value in the case of a grant of an Incentive Option to a 10% Stockholder or
(iii) eighty-five percent (85%) of such Fair Market Value in the case of all
other grants.
15.
ARTICLE THREE
STOCK ISSUANCE PROGRAM
I. TERMS AND CONDITIONS OF STOCK ISSUANCES
Shares of Common Stock may be issued under the Stock Issuance
Program directly without any intervening option grants. Each such stock
issuance shall be evidenced by a Stock Issuance Agreement which complies with
the terms specified below.
A. The shares shall be issued for such valid consideration as the
Plan Administrator may deem appropriate, but the value of such consideration
as determined by the Plan Administrator shall not be less than one hundred
percent (100%) of the Fair Market Value of the issued shares of Common Stock
on the issuance date.
B. The Plan Administrator shall have full power and authority to
issue shares of Common Stock under the Stock Issuance Program as a bonus for
past services rendered to the Corporation (or any parent or subsidiary). All
such bonus shares shall be fully and immediately vested upon issuance.
C. Subject to the provisions of Section I of Article Five, shares
of Common Stock may be issued under the Stock Issuance Program for any of the
following items of consideration which the Plan Administrator may deem
appropriate in each individual instance: (i) cash or check made payable to
the Corporation, or (ii) past services rendered to the Corporation (or any
Parent or Subsidiary).
D. Shares of Common Stock issued under the Stock Issuance Program
may, in the discretion of the Plan Administrator, be fully and immediately
vested upon issuance or may vest in one or more installments over the
Participant's period of Service or upon attainment of specified performance
objectives. The elements of the vesting schedule applicable to any unvested
shares of Common Stock issued under the Stock Issuance Program, namely:
(i) the Service period to be completed by
the Participant or the performance objectives to be attained,
(ii) the number of installments in which the
shares are to vest,
(iii) the interval or intervals (if any) which
are to lapse between installments, and
16.
(iv) the effect which death, Permanent Disability
or other event designated by the Plan Administrator is to have upon the
vesting schedule,
shall be determined by the Plan Administrator and incorporated into the Stock
Issuance Agreement.
E. Any new, substituted or additional securities or other
property (including money paid other than as a regular cash dividend) which
the Participant may have the right to receive with respect to the
Participant's unvested shares of Common Stock by reason of any stock
dividend, stock split, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class
without the Corporation's receipt of consideration shall be issued subject to
(i) the same vesting requirements applicable to the Participant's unvested
shares of Common Stock and (ii) such escrow arrangements as the Plan
Administrator shall deem appropriate.
F. The Participant shall have full stockholder rights with
respect to any shares of Common Stock issued to the Participant under the
Stock Issuance Program, whether or not the Participant's interest in those
shares is vested. Accordingly, the Participant shall have the right to vote
such shares and to receive any regular cash dividends paid on such shares.
G. Should the Participant cease to remain in Service while
holding one or more unvested shares of Common Stock issued under the Stock
Issuance Program or should the performance objectives not be attained with
respect to one or more such unvested shares of Common Stock, then those
shares shall be immediately surrendered to the Corporation for cancellation,
and the Participant shall have no further stockholder rights with respect to
those shares. To the extent the surrendered shares were previously issued to
the Participant for consideration paid in cash or cash equivalent (including
the Participant's purchase-money indebtedness), the Corporation shall repay
to the Participant the cash consideration paid for the surrendered shares and
shall cancel the unpaid principal balance of any outstanding purchase-money
note of the Participant attributable to such surrendered shares.
H. The Plan Administrator shall have full power and authority,
exercisable upon a Participant's termination of Service, to waive the
surrender and cancellation of any or all unvested shares of Common Stock (or
other assets attributable thereto) at the time held by that Participant, if
the Plan Administrator determines such waiver to be an appropriate severance
benefit for the Participant.
II. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. All of the Corporation's outstanding repurchase rights under
the Stock Issuance Program shall terminate automatically, and all the shares
of Common Stock subject to those terminated rights shall immediately vest in
full, in the event of any Corporate
17.
Transaction, except to the extent (i) those repurchase rights are assigned to
the successor corporation (or parent thereof) in connection with such
Corporate Transaction or (ii) such accelerated vesting is precluded by other
limitations imposed in the Stock Issuance Agreement.
B. The Plan Administrator shall have the discretionary authority
to structure one or more of the Corporation's repurchase rights under the
Stock Issuance Program in such manner that those repurchase rights shall
automatically terminate, and all the shares of Common Stock subject to those
terminated rights shall immediately vest in full, in the event the
Participant's Service should subsequently terminate by reason of an
Involuntary Termination within twelve (12) months following the effective
date of any Corporate Transaction in which those repurchase rights are
assigned to the successor corporation (or parent thereof).
C. The Plan Administrator shall have the discretionary authority
to structure one or more of the Corporation's repurchase rights under the
Stock Issuance Program in such manner that those repurchase rights shall
automatically terminate, and all the shares of Common Stock subject to those
terminated rights shall immediately vest in full, in the event the
Participant's Service should subsequently terminate by reason of an
Involuntary Termination within twelve (12) months following the effective
date of any Change in Control.
III. SHARE ESCROW/LEGENDS
Unvested shares may, in the Plan Administrator's discretion, be
held in escrow by the Corporation until the Participant's interest in such
shares vests or may be issued directly to the Participant with restrictive
legends on the certificates evidencing those unvested shares.
18.
ARTICLE FOUR
AUTOMATIC OPTION GRANT PROGRAM
I. ELIGIBILITY
The individuals eligible to receive automatic option grant s
pursuant to the provisions of this Article Four program shall be limited to
those individuals who are serving as non-employee Board members on the
Automatic Option Grant Program Effective Date or who are first elected or
appointed as non-employee Board members on or after such Effective Date,
whether through appointment by the Board or election by the Corporation's
stockholders.
II. TERMS AND CONDITIONS OF AUTOMATIC OPTION GRANTS
A. GRANT DATES. Option grants shall be made under this Article
Four on the dates specified below:
1. INITIAL GRANT. Each individual serving as a non-employee
Board member on the Automatic Option Grant Program Effective Date shall
automatically be granted on that date a Non-Statutory Option to purchase
13,376 shares of Common Stock upon the terms and conditions of this Article
Four. Each individual who is first elected or appointed as a non-employee
Board member after the Automatic Option Grant Program Effective Date shall
automatically be granted, on the date of such initial election or
appointment, a Non-Statutory Option to purchase 13,376 shares of Common Stock
upon the terms and con ditions of this Article Four. In no event, however,
shall a non-employee Board member be eligible to receive such an initial
option grant if such individual has at any time been in the prior employ of
the Corporation (or any parent or subsidiary corporation).
2. ANNUAL GRANT. On the date of each Annual Stockholders
Meeting, beginning with the first Annual Meeting held after the Section 12(g)
Registration Date, each individual who will continue to serve as a
non-employee Board member shall automatically be granted, whether or not
such individual is standing for re-election as a Board member at that Annual
Meeting, a Non-Statutory Option to purchase an additional 1,672 shares of
Common Stock upon the terms and conditions of this Article Four, provided he
or she has served as a non-employee Board member for at least six (6) months
prior to the date of such Annual Meeting. Non-employee Board members who have
previously been in the employ of the Corporation (or any parent or
subsidiary) shall be eligible to receive such annual option grants over their
continued period of Board service.
19.
There shall be no limit on the number of shares for which any o ne
non-employee Board member may be granted stock options under this Article
Four over his or her period of Board service.
B. EXERCISE PRICE. The exercise price per share of Common Stock
subject to each automatic option grant made under this Article Four shall be
equal to one hundred percent (100%) of the Fair Market Value per share of
Common Stock on the automatic grant date.
C. PAYMENT. The exercise price shall be payable in one of the
alternative forms specified below:
(i) full payment in cash or check drawn to the
Corporation's order;
(ii) full payment in shares of Common Stock held
for the requisite period necessary to avoid a charge to the
Corporation's earnings for financial reporting purposes and valued at
Fair Market Value on the Exercise Date (as such term is defined below);
(iii) full payment in a combination of shares of
Common Stock held for the requisite period necessary to avoid a charge
to the Corporation's earnings for financial reporting purposes and
valued at Fair Market Value on the Exercise Date and cash or check drawn
to the Corporation's order; or
(iv) to the extent the option is exercised for
vested shares, full payment through a sale and remittance procedure
pursuant to which the Optionee shall provide irrevocable written
instructions to (I) a Corporation-designated brokerage firm to effect
the immediate sale of the purchased shares and remit to the
Corporation, out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate exercise price payable for the
purchased shares and (II) the Corporation to deliver the certificates
for the purchased shares directly to such brokerage firm in order
to complete the sale transaction.
Except to the extent the sale and remittance procedure specified
above is used for the exercise of the option for vested shares, payment of
the exercise price for the purchased shares must accompany the exercise
notice.
D. OPTION TERM. Each automatic grant under this Article Four
shall have a maximum term of ten (10) years measured from the automatic grant
date.
20.
E. EXERCISABILITY/VESTING. Each automatic grant shall be
immediately exercisable for any or all of the option shares. However, any
shares purchased under the option shall be subject to repurchase by the
Corporation, at the exercise price paid per share, upon the Optionee's
cessation of Board service prior to vesting in those shares in accordance
with the applicable schedule below:
INITIAL GRANT. Each initial 13,376-share automatic grant
shall vest, and the Corporation's repurchase right shall lapse, in a series
of three (3) equal and successive annual installments over the Optionee's
period of continued service as a Board member, with the first such
installment to vest upon Optionee's completion of one (1) year of Board
service measured from the automatic grant date.
ANNUAL GRANT. Each additional 1,672-share automatic grant
shall vest, and the Corporation's repurchase right shall lapse, upon the
Optionee's completion of one (1) year of Board service measured from the
automatic grant date.
F. LIMITED TRANSFERABILITY. Each automatic option grant may, in
connection with the Optionee's estate plan, be assigned in whole or in part
during the Optionee's lifetime to one or more members of the Optionee's
immediate family or to a trust established exclusively for one or more such
family members. The assigned portion may only be exercised by the person or
persons who acquire a proprietary interest in the option pursuant to the
assignment. The terms applicable to the assigned portion shall be the same as
those in effect for the option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Plan
Administrator may deem appropriate.
G. EFFECT OF TERMINATION OF BOARD MEMBERSHIP. The following
provisions shall govern the exercise of any outstanding options held by the
Optionee under this Article Four at the time the Optionee ceases to serve as
a Board member:
(i) The Optionee (or, in the event of
Optionee's death, the personal representative of the Optionee's estate
or the person or persons to whom the option is transferred pursuant to
the Optionee's will or in accordance with the laws of descent and
distribution) shall have a two (2)-year period following the date of
such cessation of Board service in which to exercise each such option.
However, each option shall, immediately upon the Optionee's cessation of
Board service, terminate and cease to remain outstanding with respect to
any option shares in which the Optionee is not otherwise vested on
the date of such cessation of Board service.
(ii) During the two (2)-year period, the
option may not be exercised in the aggregate for more than the
number of vested shares for which the option is exercisable at the time
of the Optionee's cessation of Board service. However, should the
Optionee cease to serve as a Board
21.
member by reason of death or Disability, then all shares at the time
subject to the option shall immediately vest so that such option may,
during the two (2)-year exercise period following such cessation of
Board service, be exercised for all or any portion of such shares as
fully-vested shares.
(iii) In no event shall the option remain exercisable
after the expiration of the option term.
H. STOCKHOLDER RIGHTS. The holder of an automatic option grant
under this Article Three shall have none of the rights of a stockholder with
respect to any shares subject to such option until such individual shall have
exercised the option, paid the exercise price and become the holder of record
of the purchased shares.
I. REMAINING TERMS. The remaining terms and conditions of each
automatic option grant shall be the same as the terms for option grants made
under the Discretionary Option Grant Program.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. In the event of any Corporate Transaction, the shares of
Common Stock at the time subject to each outstanding option under this
Article Four but not otherwise vested shall automatically vest in full so
that each such option shall, immediately prior to the specified effective
date for the Corporate Transaction, become fully exercisable for all of the
shares of Common Stock at the time subject to that option and may be
exercised for all or any portion of those shares as fully-vested shares of
Common Stock. Immediately following the consummation of the Corporate
Transaction, all automatic option grants under this Article Four shall
terminate and cease to be outstanding, except to the extent assumed by the
successor corporation or parent thereof.
B. Each outstanding option under this Article Four which is
assumed in connection with a Corporate Transaction outstanding shall be
appropriately adjusted, immediately after such Corporate Transaction, to
apply and pertain to the number and class of securities which would have been
issuable to the Optionee in the consummation of such Corporate Transaction,
had the option been exercised immediately prior to such Corporate
Transaction. Appropriate adjustments shall also be made to (i) the class and
number of securities available for issuance under the Plan following th e
consummation of such Corporate Transaction, and (ii) the exercise price
payable per share, PROVIDED the aggregate exercise price payable for such
securities shall remain the same.
C. In connection with any Change in Control of the Corporation,
the shares of Common Stock at the time subject to each outstanding option
under this Article Four but not otherwise vested shall automatically vest in
full so that each such option shall, immediately prior to the specified
effective date for the Change in Control, become fully exercisable for all of
the shares of Common Stock at the time subject to that option and
22.
may be exercised for all or any portion of those shares as fully-vested
shares of Common Stock. Each such option shall remain so exercisable for all
the option shares following the Change in Control, until the expiration or
sooner termination of the option term.
D. The automatic option grants outstanding under this Article
Four shall in no way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure
or to merge, consolidate, dissolve, liquidate or sell or transfer all or
any part of its business or assets.
IV. AMENDMENT OF THE AUTOMATIC GRANT PROVISIONS
A. LIMITED AMENDMENTS. No amendment to the provisions of this
Automatic Option Grant Program may be made within six (6) months after a
previous amendment to such provisions that was made before August 15, 1996,
other than to the extent necessary to comply with applicable Federal income
tax laws and regulations.
B. AMENDMENT OF OPTIONS. Stock options granted under the
Automatic Grant Program may be amended at any time on or after the date of
their grant in any manner consistent with the provisions of this Plan
relating to options granted under the Discretionary Grant Program.
23.
ARTICLE FIVE
MISCELLANEOUS
I. LOANS OR INSTALLMENT PAYMENTS
A. The Plan Administrator may, in its discretion, assist any
Optionee or Participant (including an Optionee or Participant who is an
officer of the Corporation) in the exercise of one or more options granted to
such Optionee under the Discretionary Option Grant Program or the purchase of
one or more shares issued to such Participant under the Stock Issuance
Program, including the satisfaction of any Federal, state and local income
and employment tax obligations arising therefrom, by (i) authorizing the
extension of a loan from the Corporation to such Optionee or Participant or
(ii) permitting the Optionee or Participant to pay the exercise price or
purchase price for the purchased Common Stock in installments over a period
of years. The terms of any loan or installment method of payment (including
the interest rate and terms of repayment) shall be upon such terms as the
Plan Administrator specifies in the applicable option or issuance agreement
or otherwise deems appropriate at the time such exercise price or purchase
price becomes due and payable. Loans or installment payments may be
authorized with or without security or collateral. In all events, the
maximum credit available to the Optionee or Participant may not exceed the
option or purchase price of the acquired shares (less the par value of such
shares) plus any Federal, state and local income and employment tax
liability incurred by the Optionee or Participant in connection with the
acquisition of such shares.
B. The Plan Administrator may, in its absolute discretion,
determine that one or more loans extended under this financial assistance
program shall be subject to forgiveness in whole or in part upon such terms
and conditions as the Plan Administrator may deem appropriate.
II. AMENDMENT OF THE PLAN AND AWARDS
A. The Board has complete and exclusive power and authority to
amend or modify the Plan (or any component thereof) in any or all respects
whatsoever. However, (i) no such amendment or modification shall adversely
affect rights and obligations with respect to o ptions at the time
outstanding under the Plan, nor adversely af fect the rights of any
Participant with respect to Common Stock issued under the Stock Issuance
Program prior to such action, unless the Optionee or Participant consents to
such amendment, and (ii) any amendment made to the Automatic Option Grant
Program (or any options outstanding thereunder) shall be in compliance with
the limitation of Section IV of Article Four. In addition, the Board may
not, without the approval of the Corporation's stockholders, amend the Plan
(i) to materially increase the maximum number of shares issuable under the
Plan or the number of shares for which automatic options may be granted to
newly-elected or continuing Eligible Directors under Article Four of the Plan
or
24.
the maximum number of shares for which any one individual participating in
the Plan may be granted stock options and direct s tock issuances in the
aggregate per calendar year, except for permissible adjustments under Section
VI.C. of Article One, or (ii) in any manner that the Board determines
requires stockholder approval under applicable law or regulatory standards.
B. (i) Options to purchase shares of Common Stock may be granted
under the Discretionary Option Grant Program and (ii) shares of Common
Stock may be issued under the Stock Issuance Program, which are in both
instances in excess of the number of shares then available for issuance under
the Plan, provided any excess shares actually issued under the Discretionary
Option Grant Program or the Sto ck Issuance Program are held in escrow until
stockholder approval is obtained for a sufficient increase in the number of
shares available for issuance under the Plan. If such stockholder approv al
is not obtained within twelve (12) months after the date the first such
excess option grants or excess share issuances are made, then (I) any
unexercised excess options shall terminate and cease to be exercisable and
(II) the Corporation shall promptly refund the purchase price paid for any
excess shares actually issued under the Plan and held in escrow, together
with interest (at the applicable Short Term Federal Rate) for the period the
shares were held in escrow.
III. TAX WITHHOLDING
A. The Corporation's obligation to deliver shares of Common Stock
upon the exercise of stock options for such shares or the vesting of such
shares under the Plan shall be subject to the satisfaction of all applicable
Federal, state and local income tax and employment tax withholding
requirements.
B. The Plan Administrator may, in its discretion and in
accordance with the provisions of this Section III and such supplemental
rules as the Plan Administrator may from time to time adopt (including the
applicable safe-harbor provisions of Rule 16b-3 of the Securities and
Exchange Commission), provide any or all holders of Non-Statutory Options
(other than the automatic grants made pursuant to Article Four of the Plan)
or unvested shares under the Plan with the right to use shares of Common
Stock in satisfaction of all or part of the Federal, state and local income
and employment tax liabilities incurred by such holders in connection with
the exercise of their options or the vesting of their shares (the "Taxes").
Such right may be provided to any such holder in either or both of the
following formats:
- The holder of the Non-Statutory Option or unvested
shares may be provided with the election to have the Corporation
withhold, from the shares of Common Stock otherwise issuable upon the
exercise of such Non-Statutory Option or t he vesting of such shares, a
portion of those shares with an aggregate Fair Market Value equal to
the percentage of the applicable Taxes (not to exceed one hundred
percent (100%)) designated by the holder.
25.
- The Plan Administrator may, in its discretion,
provide the holder of the Non-Statutory Option or the unvested shares
with the election to deliver to the Corporation, at the time the
Non-Statutory Option is exercised or the shares vest, one or more shares
of Common Stock previously acquired by such individual (other than in
connection with the option exercise or share vesting triggering the
Taxes) with an aggregate Fair Market Value equal to the percentage of
the Taxes incurred in connection with such option exercise or share
vesting (not to exceed one hundred percent (100%)) designated by the
holder.
IV. EFFECTIVE DATE AND TERM OF PLAN
A. The Discretionary Option Grant and Stock Issuance Programs of
this Plan became effective immediately upon the Plan's adoption by the Board
on March 4, 1996 (the "Plan Effective Date"). The Plan was also approved by
the Corporation's stockholders on the Plan Effective Date. The Automatic
Option Grant Program became effective on January 28, 1997 (the "Automatic
Option Grant Program Effective Date").
B. The Plan shall terminate upon the EARLIER of (i) March 3, 2006
or (ii) the date on which all shares available for issuance und er the Plan
shall have been issued pursuant to the exercise of the options granted under
the Plan or the issuance of shares (whether vested or unvested) under the
Stock Issuance Program. If the date of termination is determined under
clause (i) above, then all option grants and unvested share issuances
outstanding on such date shall thereafter continue to have force and effect
in accordance with the provisions of the instruments evidencing such grants
or issuance.
V. REGULATORY APPROVALS
The implementation of the Plan and the granting of any option or
issuance of shares under the Plan shall be subject to the Corporation's
procurement of all approvals and permits required by regul atory authorities
having jurisdiction over the Plan, the options granted under it, and the
Common Stock issued pursuant to it.
VI. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of
shares pursuant to option grants or share issuances under the Plan
shall be used for general corporate purposes.
VII. NO EMPLOYMENT/SERVICE RIGHTS
Neither the action of the Corporation in establishing the Plan, nor
any action taken by the Plan Administrator hereunder, nor any provision of
the Plan shall be construed so as to grant any indiv idual the right to
remain in the employ or service of the Corporation (or any parent or
subsidiary corporation) for any period of specific duration, and the
26.
Corporation (or any parent or subsidiary corporation retaining the services
of such individual) may terminate such individual's employment or service at
any time and for any reason, with or without cause.
VIII. MISCELLANEOUS PROVISIONS
A. Except as otherwise expressly provided under the Plan, the
right to acquire Common Stock or other assets under the Plan may not be
assigned, encumbered or otherwise transferred by any Optionee or Participant.
B. The provisions of the Plan relating to the exercise of options
and the vesting of shares shall be governed by the laws of the State of
Delaware without resort to that State's conflict-of-laws rules.
C. The provisions of the Plan shall inure to the benefit of, and
be binding upon, the Corporation and its successors or assigns, whether by
Corporate Transaction or otherwise, and the Participants and Optionees, the
legal representatives of their respective estates, their respective heirs or
legatees and their permitted as signees.
27.