CDEX INC.
THE TECHNOLOGY DEVELOPMENT COMPANY
CDEX INC.
2002 STOCK OPTION PLAN
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TABLE OF CONTENTS
Page
1. PURPOSE........................................................................................4
2. DEFINITIONS....................................................................................4
3. ADMINISTRATION OF THE PLAN.....................................................................6
3.1 Board.................................................................................6
3.2 Committee.............................................................................6
3.3 Grants................................................................................7
3.4 Deferral Arrangement..................................................................8
3.5 NO Liability..........................................................................8
4. STOCK SUBJECT TO THE PLAN......................................................................8
5. GRANT ELIGIBILITY..............................................................................8
5.1 Employees and Other Service Providers.................................................8
5.2 Successive Grants.....................................................................8
5.3 Limitations On Incentive Stock Options................................................8
6. AWARD AGREEMENT................................................................................9
7. TERMS AND CONDITIONS OF OPTIONS................................................................9
7.1 Option Price..........................................................................9
7.2 Vesting...............................................................................9
7.3 Term..................................................................................9
7.4 Exercise of Options On Termination of Service.........................................9
7.5 Limitations On Exercise of Option.....................................................10
7.6 Exercise Procedure....................................................................10
7.7 Right of Holders of Options...........................................................10
7.8 Delivery of Stock Certificates........................................................10
8. TRANSFERABILITY OF OPTIONS.....................................................................10
8.1 Transferability of Option.............................................................10
8.2 Family Transfers......................................................................10
9. RESTRICTED STOCK...............................................................................11
9.1 Grant of Restricted Stock.............................................................11
9.2 Restrictions..........................................................................11
9.3 Restricted Stock Certificates.........................................................11
9.4 Rights of Holders of Restricted Stock.................................................11
9.5 Termination of Service................................................................12
9.6 Purchase and Delivery of Stock........................................................12
10. FORM OF PAYMENT................................................................................12
10.1 General Rule..........................................................................12
10.2 Surrender of Stock....................................................................12
10.3 Cashless Exercise.....................................................................12
10.4 Promissory Note.......................................................................13
11. WITHHOLDING TAXES..............................................................................13
12. RESTRICTIONS ON TRANSFER OF SHARES OF STOCK....................................................13
12.1 Right of First Refusal................................................................13
12.2 Repurchase and Other Rights...........................................................13
12.3 Payments for Repurchase...............................................................14
12.4 Publicly Traded Stock.................................................................14
12.5 Legend................................................................................14
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13. PARACHUTE LIMITATIONS..........................................................................14
14. REQUIREMENTS OF LAW............................................................................15
14.1 General...............................................................................15
14.2 Rule 16B-3............................................................................15
14.3 Financial Reports.....................................................................15
15. EFFECT OF CHANGES IN CAPITALIZATION............................................................15
15.1 Changes in Stock......................................................................15
15.2 Reorganization in Which the Company is the Surviving Entity and in Which No
Change of Control Occurs..............................................................16
15.3 Reorganization, Sale of Assets or Sale of Stock Which Involves a Change of Control....16
15.4 Adjustments...........................................................................17
15.5 No Limitations On Company.............................................................17
16. DURATION AND AMENDMENTS........................................................................17
16.1 Term of the Plan......................................................................17
16.2 Amendment and Termination of the Plan.................................................17
17. GENERAL PROVISIONS.............................................................................17
17.1 Disclaimer of Rights..................................................................17
17.2 Nonexclusivity of the Plan............................................................18
17.3 Captions..............................................................................18
17.4 Other Award Agreement Provisions......................................................18
17.5 Number and Gender.....................................................................18
17.6 Severability..........................................................................18
17.7 Pooling...............................................................................18
17.8 Governing Law.........................................................................18
18. EXECUTION......................................................................................19
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CDEX, INC.
2002 STOCK INCENTIVE PLAN
CDEX, Inc., a Nevada corporation (the "COMPANY"), sets forth herein the
terms of its 2002 Stock Incentive Plan (the "PLAN") as follows:
1. PURPOSE
The Plan is intended to enhance the Company's and its Affiliates' (as
defined herein) ability to attract and retain highly qualified officers,
directors, key employees, and other persons, and to motivate such officers,
directors, key employees, and other persons to serve the Company and its
Affiliates and to expend maximum effort to improve the business results and
earnings of the Company, by providing to such officers, directors, key employees
and other persons an opportunity to acquire or increase a direct proprietary
interest in the operations and future success of the Company. To this end, the
Plan provides for the grant of stock options and restricted stock in accordance
with the terms hereof. Stock options granted under the Plan may be nonqualified
stock options or incentive stock options, as provided herein.
2. DEFINITIONS
For purposes of interpreting the Plan and related documents (including
Award Agreements), the following definitions shall apply:
2.1 "AFFILIATE" means, with respect to the Company, any company or other
trade or business that controls, is controlled by or is under common control
with the Company within the meaning of Rule 405 of Regulation C under the
Securities Act, including, without limitation, any Subsidiary.
2.2 "AWARD AGREEMENT" means the stock option agreement, restricted stock
agreement or other written agreement between the Company and a Grantee that
evidences and sets out the terms and conditions of a Grant.
2.3 "BENEFIT ARRANGEMENT" shall have the meaning set forth in SECTION 13
hereof.
2.4 "BOARD" means the Board of Directors of the Company.
2.5 "CAUSE" means, as determined by the Board and unless otherwise provided
in an applicable employment agreement with the Company or an Affiliate, (i)
gross negligence or willful misconduct in connection with the performance of
duties; (ii) conviction of a criminal offense (other than minor traffic
offenses); or (iii) material breach of any term of any employment, consulting or
other services, confidentiality, intellectual property or non-competition
agreements, if any, between the Service Provider and the Company or an
Affiliate.
2.6 "CHANGE OF CONTROL" means (i) the dissolution or liquidation of the
Company or a merger, consolidation, or reorganization of the Company with one or
more other entities in which the Company is not the surviving entity, (ii) a
sale of substantially all of the assets of the Company to another person or
entity, or (iii) any transaction (including without limitation a merger or
reorganization in which the Company is the surviving entity) which results in
any person or entity (other than persons who are shareholders or Affiliates
immediately prior to the transaction) owning [50%] or more of the combined
voting power of all classes of stock of the Company.
2.7 "CODE" means the Internal Revenue Code of 1986, as now in effect or as
hereafter amended.
2.8 "COMMITTEE" means a committee of, and designated from time to time by
resolution of the Board, which shall consist of one or more members of the
Board.
2.9 "COMPANY" means CDEX, Inc.
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2.10 "DISABILITY" means the Grantee is unable to perform each of the
essential duties of such Grantee's position by reason of a medically
determinable physical or mental impairment which is potentially permanent in
character or which can be expected to last for a continuous period of not less
than 12 months; PROVIDED, HOWEVER, that, with respect to rules regarding
expiration of an Incentive Stock Option following termination of the Grantee's
Service, Disability shall mean the Grantee is unable to engage in any
substantial gainful activity by reason of a medically determinable physical or
mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than 12 months.
2.11 "EFFECTIVE DATE" means December 28, 2001, the date the Plan is
approved by the Board.
2.12 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as now in
effect or as hereafter amended.
2.13 "FAIR MARKET VALUE" means the value of a share of Stock, determined as
follows: if on the Grant Date or other determination date the Stock is listed on
an established national or regional stock exchange, is admitted to quotation on
The Nasdaq Stock Market, Inc., or is publicly traded on an established
securities market, the Fair Market Value of a share of Stock shall be the
closing price of the Stock on such exchange or in such market (if there is more
than one such exchange or market the Board shall determine the appropriate
exchange or market) on the Grant Date or such other determination date (or if
there is no such reported closing price, the Fair Market Value shall be the mean
between the highest bid and lowest asked prices or between the high and low sale
prices on such trading day) or, if no sale of Stock is reported for such trading
day, on the next preceding day on which any sale shall have been reported. If
the Stock is not listed on such an exchange, quoted on such system or traded on
such a market, Fair Market Value shall be the value of the Stock as determined
by the Board in good faith.
2.14 "FAMILY MEMBER" means a person who is a spouse, former spouse, child,
stepchild, grandchild, parent, stepparent, grandparent, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother, sister,
brother-in-law, or sister-in-law, including adoptive relationships, of the
Grantee, any person sharing the Grantee's household (other than a tenant or
employee), a trust in which any one or more these persons have more than fifty
percent of the beneficial interest, a foundation in which any one or more of
these persons (or the Grantee) control the management of assets, and any other
entity in which one or more these persons (or the Grantee) own more than fifty
percent of the voting interests; provided, however, that to the extent required
by applicable law, the term Family Member shall be limited to a person who is a
spouse, former spouse, child, stepchild, grandchild, parent, stepparent,
grandparent, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother,
sister, brother-in-law, or sister-in-law, including adoptive relationships, of
the Grantee or a trust or foundation for the exclusive benefit of any one or
more of these persons.
2.15 "GRANT" means an award of an Option or Restricted Stock under the
Plan.
2.16 "GRANT DATE" means, as determined by the Board, the latest to occur of
(i) the date as of which the Board approves a Grant, (ii) the date on which the
recipient of a Grant first becomes eligible to receive a Grant under SECTION 5
hereof, or (iii) such other date as may be specified by the Board.
2.17 "GRANTEE" means a person who receives or holds an Option or Restricted
Stock under the Plan.
2.18 "INCENTIVE STOCK OPTION" means an "incentive stock option" within the
meaning of Section 422 of the Code, or the corresponding provision of any
subsequently enacted tax statute, as amended from time to time.
2.19 "NONQUALIFIED STOCK OPTION" means a stock option that is not an
Incentive Stock Option.
2.20 "OPTION" means an option to purchase one or more shares of Stock
pursuant to the Plan.
2.21 "OPTION PRICE" means the purchase price for each share of Stock
subject to an Option.
2.22 "OTHER AGREEMENT" shall have the meaning set forth in SECTION 13
hereof.
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2.23 "PLAN" means this CDEX, Inc. 2002 Stock Incentive Plan.
2.24 "PURCHASE PRICE" means the purchase price for each share of Stock
pursuant to a Grant of Restricted Stock.
2.25 "REPORTING PERSON" means a person who is required to file reports
under Section 16(a) of the Exchange Act.
2.26 "RESTRICTED STOCK" means shares of Stock, awarded to a Grantee
pursuant to SECTION 9 hereof, that are subject to restrictions and to a risk of
forfeiture.
2.27 "SECURITIES ACT" means the Securities Act of 1933, as now in effect or
as hereafter amended.
2.28 "SERVICE" means service as an employee, officer, director or other
Service Provider of the Company or an Affiliate. Unless otherwise stated in the
applicable Award Agreement, a Grantee's change in position or duties shall not
result in interrupted or terminated Service, so long as such Grantee continues
to be an employee, officer, director or other Service Provider of the Company or
an Affiliate. Subject to the preceding sentence, whether a termination of
Service shall have occurred for purposes of the Plan shall be determined by the
Board, which determination shall be final, binding and conclusive.
2.29 "SERVICE PROVIDER" means an employee, officer or director of the
Company or an Affiliate, or a consultant or adviser currently providing services
to the Company or an Affiliate.
2.30 "STOCK" means the common stock, $0.001 par value per share, of the
Company.
2.31 "SUBSIDIARY" means any "subsidiary corporation" of the Company within
the meaning of Section 424(f) of the Code.
2.32 "TEN-PERCENT STOCKHOLDER" means an individual who owns more than ten
percent (10%) of the total combined voting power of all classes of outstanding
stock of the Company, its parent or any of its Subsidiaries. In determining
stock ownership, the attribution rules of Section 424(d) of the Code shall be
applied.
3. ADMINISTRATION OF THE PLAN
3.1 BOARD.
The Board shall have such powers and authorities related to the
administration of the Plan as are consistent with the Company's certificate of
incorporation and by-laws and applicable law. The Board shall have full power
and authority to take all actions and to make all determinations required or
provided for under the Plan, any Grant or any Award Agreement, and shall have
full power and authority to take all such other actions and make all such other
determinations not inconsistent with the specific terms and provisions of the
Plan that the Board deems to be necessary or appropriate to the administration
of the Plan, any Grant or any Award Agreement. All such actions and
determinations shall be by the affirmative vote of a majority of the members of
the Board present at a meeting or by unanimous consent of the Board executed in
writing in accordance with the Company's certificate of incorporation and
by-laws and applicable law. The interpretation and construction by the Board of
any provision of the Plan, any Grant or any Award Agreement shall be final,
binding and conclusive. To the extent permitted by law, the Board may delegate
its authority under the Plan to a member of the Board or an executive officer of
the Company who is a member of the Board.
3.2 COMMITTEE.
The Board from time to time may delegate to one or more Committees such
powers and authorities related to the administration and implementation of the
Plan, as set forth in SECTION 3.1 above and in other applicable
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provisions, as the Board shall determine, consistent with the certificate of
incorporation and by-laws of the Company and applicable law. In the event that
the Plan, any Grant or any Award Agreement entered into hereunder provides for
any action to be taken by or determination to be made by the Board, such action
may be taken by or such determination may be made by the applicable Committee if
the power and authority to do so has been delegated to the Committee by the
Board as provided for in SECTION 3.1. Unless otherwise expressly determined by
the Board, any such action or determination by the Committee shall be final,
binding and conclusive. To the extent permitted by law, the Committee may
delegate its authority under the Plan to a member of the Board or an executive
officer of the Company who is a member of the Board.
3.3 GRANTS.
Subject to the other terms and conditions of the Plan, the Board shall have
full and final authority to:
(i) designate Grantees,
(ii) determine the type or types of Grants to be made to a Grantee,
(iii) determine the number of shares of Stock to be subject to a Grant,
(iv) establish the terms and conditions of each Grant (including, but not
limited to, the Option Price of any Option, the nature and duration of
any restriction or condition (or provision for lapse thereof) relating
to the vesting, exercise, transfer, or forfeiture of a Grant or the
shares of Stock subject thereto, and any terms or conditions that may
be necessary to qualify Options as Incentive Stock Options),
(v) prescribe the form of each Award Agreement evidencing a Grant, and
(vi) amend, modify, or supplement the terms of any outstanding Grant.
Such authority specifically includes the authority, in order to effectuate
the purposes of the Plan but without amending the Plan, to modify Grants to
eligible individuals who are foreign nationals or are individuals who are
employed outside the United States to recognize differences in local law, tax
policy, or custom. As a condition to any Grant, the Board shall have the right,
at its discretion, to require Grantees to return to the Company Grants
previously awarded under the Plan. Subject to the terms and conditions of the
Plan, any such subsequent Grant shall be upon such terms and conditions as are
specified by the Board at the time the new Grant is made. The Board shall have
the right, in its discretion, to make Grants in substitution or exchange for any
other grant under another plan of the Company, any Affiliate, or any business
entity to be acquired by the Company or an Affiliate. The Company may retain the
right in an Award Agreement to cause a forfeiture of the gain realized by a
Grantee on account of actions taken by the Grantee in violation or breach of or
in conflict with any non-competition agreement, any agreement prohibiting
solicitation of employees or clients of the Company or any Affiliate thereof or
any confidentiality obligation with respect to the Company or any Affiliate
thereof or otherwise in competition with the Company or any Affiliate thereof,
to the extent specified in such Award Agreement applicable to the Grantee.
Furthermore, the Company may annul a Grant if the Grantee is an employee of the
Company or an Affiliate thereof and is terminated for Cause as defined in the
applicable Award Agreement or the Plan, as applicable.
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3.4 DEFERRAL ARRANGEMENT.
The Board may permit or require the deferral of any award payment into a
deferred compensation arrangement, subject to such rules and procedures as it
may establish, which may include provisions for the payment or crediting of
interest or dividend equivalents, including converting such credits into
deferred Stock equivalents and restricting deferrals to comply with hardship
distribution rules affecting 401(k) plans.
3.5 NO LIABILITY.
No member of the Board or of the Committee shall be liable for any action
or determination made in good faith with respect to the Plan or any Grant or
Award Agreement.
4. STOCK SUBJECT TO THE PLAN
Subject to adjustment as provided in SECTION 15 hereof and the limitation
of the next paragraph relating to Restricted Stock, the number of shares of
Stock available for issuance under the Plan shall be 3,500,000 (Three Million
Five Hundred Thousand). Stock issued or to be issued under the Plan shall be
authorized but unissued shares or, to the extent permitted by applicable law,
issued shares that have been reacquired by the Company. If any shares covered by
a Grant are not purchased or are forfeited, or if a Grant otherwise terminates
without delivery of any Stock subject thereto, then the number of shares of
Stock counted against the aggregate number of shares available under the Plan
with respect to such Grant shall, to the extent of any such forfeiture or
termination, again be available for making Grants under the Plan. If the
exercise price of any Option granted under the Plan is satisfied by tendering
shares of Stock to the Company (by either actual delivery or by attestation),
only the number of shares of Stock issued net of the shares of Stock tendered
shall be deemed delivered for purposes of determining the maximum number of
shares of Stock available for delivery under the Plan.
5. GRANT ELIGIBILITY
5.1 EMPLOYEES AND OTHER SERVICE PROVIDERS.
Grants (including Grants of Incentive Stock Options, subject to SECTION
5.3) may be made under the Plan to any employee, officer or director of, or
other Service Provider providing services to the Company or any Affiliate. To
the extent required by applicable state law, Grants within certain states may be
limited to employees and officers or employees, officers and directors.
5.2 SUCCESSIVE GRANTS.
An eligible person may receive more than one Grant, subject to such
restrictions as are provided herein.
5.3 LIMITATIONS ON INCENTIVE STOCK OPTIONS.
An Option shall constitute an Incentive Stock Option only (i) if the
Grantee of such Option is an employee of the Company or any Subsidiary of the
Company; (ii) to the extent specifically provided in the related Award
Agreement; and (iii) to the extent that the aggregate Fair Market Value
(determined at the time the Option is granted) of the shares of Stock with
respect to which all Incentive Stock Options held by such Grantee become
exercisable for the first time during any calendar year (under the Plan and all
other plans of the Grantee's employer and its affiliates) does not exceed
$100,000. This limitation shall be applied by taking Options into account in the
order in which they were granted.
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6. AWARD AGREEMENT
Each Grant pursuant to the Plan shall be evidenced by an Award Agreement,
in such form or forms as the Board shall from time to time determine, which
specifies the number of shares subject to the Grant and provides for adjustment
in accordance with SECTION 15. Award Agreements granted from time to time or at
the same time need not contain similar provisions but shall be consistent with
the terms of the Plan. Each Award Agreement evidencing a Grant of Options shall
specify whether such Options are intended to be Nonqualified Stock Options or
Incentive Stock Options, and in the absence of such specification such options
shall be deemed Nonqualified Stock Options.
7. TERMS AND CONDITIONS OF OPTIONS
7.1 OPTION PRICE.
The Option Price of each Option shall be fixed by the Board and stated in
the Award Agreement evidencing such Option. In the case of an Incentive Stock
Option the Option Price shall not be less than the Fair Market Value on the
Grant Date of a share of Stock; provided, however, that in the event that a
Grantee is a Ten-Percent Stockholder, the Option Price of an Incentive Stock
Option granted to such Grantee shall be not less than 110 percent of the Fair
Market Value of a share of Stock on the Grant Date. In the case of a
Nonqualified Stock Option, the Option Price shall be not less than 85 percent of
the Fair Market Value on the Grant Date of a share of Stock; PROVIDED, HOWEVER,
that in the event that a Grantee is a Ten-Percent Stockholder, the Option Price
shall be not less than 110 percent of the Fair Market Value of a share of Stock
on the Grant Date. In no case shall the Option Price of any Option be less than
the par value of a share of Stock.
7.2 VESTING.
Subject to SECTIONS 7.3 and 15.3 hereof, each Option granted under the Plan
shall become exercisable at such times and under such conditions as shall be
determined by the Board and stated in the Award Agreement. For purposes of this
SECTION 7.2, fractional numbers of shares of Stock subject to an Option shall be
rounded down to the next nearest whole number. To the extent required by
applicable law, each Option shall become exercisable no less rapidly than the
rate of twenty percent (20%) per year for each of the first five (5) years from
the Grant Date based on continued Service. Subject to the preceding sentence,
the Board may provide, for example, in the Award Agreement for (i) accelerated
exercisability of the Option in the event the Grantee's Service terminates on
account of death, Disability or another event, (ii) expiration of the Option
prior to its term in the event of the termination of the Grantee's Service,
(iii) immediate forfeiture of the Option in the event the Grantee's Service is
terminated for Cause or (iv) unvested Options to be exercised subject to the
Company's right of repurchase with respect to unvested shares of Stock.
7.3 TERM.
Each Option granted under the Plan shall terminate, and all rights to
purchase shares of Stock thereunder shall cease, upon the expiration of ten
years from the Grant Date, or under such circumstances and on such date prior
thereto as is set forth in the Plan or as may be fixed by the Board and stated
in the Award Agreement relating to such Option; provided, however, that in the
event that the Grantee is a Ten-Percent Stockholder, an Option granted to such
Grantee that is intended to be an Incentive Stock Option shall not be
exercisable after the expiration of five years from its Grant Date.
7.4 EXERCISE OF OPTIONS ON TERMINATION OF SERVICE.
Each Award Agreement shall set forth the extent to which the Grantee shall
have the right to exercise the Option following termination of the Grantee's
Service. Such provisions shall be determined in the sole discretion of the
Board, need not be uniform among all Options issued pursuant to the Plan, and
may reflect distinctions based on the reasons for termination of Service.
Notwithstanding the foregoing each Option shall provide that the Grantee
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shall have the right to exercise the vested portion of any Option held at
termination for at least sixty (60) days following termination of Service with
the Company for any reason (other than for Cause), and that the Grantee shall
have the right to exercise the Option for at least twelve (12) months if the
Grantee's Service terminates due to death or Disability.
7.5 LIMITATIONS ON EXERCISE OF OPTION.
Notwithstanding any other provision of the Plan, in no event may any Option
be exercised, in whole or in part, prior to the date the Plan is approved by the
shareholders of the Company, or after ten years following the Grant Date, or
after the occurrence of an event referred to in SECTION 15 hereof which results
in termination of the Option.
7.6 EXERCISE PROCEDURE.
An Option that is exercisable may be exercised by the Grantee's delivery to
the Company of written notice of exercise on any business day, at the Company's
principal office. Such notice shall specify the number of shares of Stock with
respect to which the Option is being exercised and shall be accompanied by
payment in full of the Option Price of the shares for which the Option is being
exercised. The minimum number of shares of Stock with respect to which an Option
may be exercised, in whole or in part, at any time shall be the lesser of (i)
100 shares or such lesser number set forth in the applicable Award Agreement and
(ii) the maximum number of shares available for purchase under the Option at the
time of exercise. The Option Price shall be payable in a form described in
SECTION 10.
7.7 RIGHT OF HOLDERS OF OPTIONS.
Unless otherwise stated in the applicable Award Agreement, an individual
holding or exercising an Option shall have none of the rights of a shareholder
(for example, the right to cash or dividend payments or distributions
attributable to the subject shares of Stock or to direct the voting of shares of
Stock) until the shares of Stock covered thereby are fully paid and issued to
such individual.
7.8 DELIVERY OF STOCK CERTIFICATES.
Promptly after the exercise of an Option by a Grantee and the payment in
full of the Option Price, such Grantee shall be entitled to the issuance of a
stock certificate or certificates evidencing such Grantee's ownership of the
shares of Stock purchased upon such exercise of the Option.
8. TRANSFERABILITY OF OPTIONS
8.1 TRANSFERABILITY OF OPTIONS.
Except as provided in SECTION 8.2, during the lifetime of a Grantee, only
the Grantee (or, in the event of legal incapacity or incompetency, the Grantee's
guardian or legal representative) may exercise an Option. Except as provided in
SECTION 8.2, no Option shall be assignable or transferable by the Grantee to
whom it is granted, other than by will or the laws of descent and distribution.
8.2 FAMILY TRANSFERS.
If authorized in the applicable Award Agreement, a Grantee may transfer,
not for value, all or part of an Option that is not an Incentive Stock Option to
any Family Member. For the purpose of this SECTION 8.2, a "not for value"
transfer is a transfer which is (i) a gift, (ii) a transfer under a domestic
relations order in settlement of marital property rights; or (iii) unless
applicable law does not permit such transfers, a transfer to an entity in which
more than fifty percent of the voting interests are owned by Family Members (or
the Grantee) in exchange for an interest
July 1, 2002
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in that entity. Following a transfer under this SECTION 8.2, any such Option
shall continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer, and shares of Stock acquired pursuant to the
Option shall be subject to the same restrictions on transfer of shares as would
have applied to the Grantee. Subsequent transfers of transferred Options are
prohibited except to Family Members of the original Grantee in accordance with
this SECTION 8.2 or by will or the laws of descent and distribution. The events
of termination of Service under an Option shall continue to be applied with
respect to the original Grantee, following which the Option shall be exercisable
by the transferee only to the extent, and for the periods specified in the
applicable Award Agreement, and the shares may be subject to repurchase by the
Company or its assignee.
9. RESTRICTED STOCK
9.1 GRANT OF RESTRICTED STOCK.
The Board may from time to time grant Restricted Stock to persons eligible
to receive Grants under SECTION 5 hereof, subject to such restrictions,
conditions and other terms as the Board may determine.
9.2 RESTRICTIONS.
At the time a Grant of Restricted Stock is made, the Board shall establish
a restriction period applicable to such Restricted Stock. Each Grant of
Restricted Stock may be subject to a different restriction period. The Board
may, in its sole discretion, at the time a Grant of Restricted Stock is made,
prescribe conditions that must be satisfied prior to the expiration of the
restriction period, including the satisfaction of corporate or individual
performance objectives or continued Service, in order that all or any portion of
the Restricted Stock shall vest. Notwithstanding the previous sentence, the
vesting restrictions applicable to a Grant of Restricted Stock to a Service
Provider who is not an officer, director or consultant to the Company shall
lapse no less rapidly than the rate of twenty percent (20%) per year for each of
the first five (5) years from the Grant Date, based on continued Service.
The Board also may, in its sole discretion, shorten or terminate the
restriction period or waive any of the conditions applicable to all or a portion
of the Restricted Stock. The Restricted Stock may not be sold, transferred,
assigned, pledged or otherwise encumbered or disposed of during the restriction
period or prior to the satisfaction of any other conditions prescribed by the
Board with respect to such Restricted Stock.
9.3 RESTRICTED STOCK CERTIFICATES.
The Company shall issue, in the name of each Grantee to whom Restricted
Stock has been granted, stock certificates representing the total number of
shares of Restricted Stock granted to the Grantee, as soon as reasonably
practicable after the Grant Date. The Board may provide in an Award Agreement
that either (i) the Secretary of the Company shall hold such certificates for
the Grantee's benefit until such time as the Restricted Stock is forfeited to
the Company, or the restrictions lapse, or (ii) such certificates shall be
delivered to the Grantee, provided, however, that such certificates shall bear a
legend or legends that complies with the applicable securities laws and
regulations and makes appropriate reference to the restrictions imposed under
the Plan and the Award Agreement.
9.4 RIGHTS OF HOLDERS OF RESTRICTED STOCK.
Unless the Board otherwise provides in an Award Agreement, holders of
Restricted Stock shall have the right to vote such Stock and the right to
receive any dividends declared or paid with respect to such Stock. The Board may
provide that any dividends paid on Restricted Stock must be reinvested in shares
of Stock, which may or may not be subject to the same vesting conditions and
restrictions applicable to such Restricted Stock. All distributions, if any,
received by a Grantee with respect to Restricted Stock as a result of any stock
split, stock dividend, combination of shares, or other similar transaction shall
be subject to the restrictions applicable to the original Grant.
July 1, 2002
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9.5 TERMINATION OF SERVICE.
Unless otherwise provided by the Board in the applicable Award Agreement,
upon the termination of a Grantee's Service with the Company or an Affiliate,
any shares of Restricted Stock held by such Grantee that have not vested, or
with respect to which all applicable restrictions and conditions have not
lapsed, shall immediately be deemed forfeited. Upon forfeiture of Restricted
Stock, the Grantee shall have no further rights with respect to such Grant,
including but not limited to any right to vote Restricted Stock or any right to
receive dividends with respect to shares of Restricted Stock.
9.6 PURCHASE AND DELIVERY OF STOCK.
The Grantee shall be required to purchase the Restricted Stock from the
Company at a Purchase Price equal to the greater of (i) the aggregate par value
of the shares of Stock represented by such Restricted Stock or (ii) the Purchase
Price, if any, specified in the Award Agreement relating to such Restricted
Stock. The Purchase Price shall be payable in a form described in SECTION 10 or,
in the discretion of the Board, in consideration for past Services rendered to
the Company or an Affiliate. To the extent required by applicable law, the
Purchase Price of a share of Restricted Stock shall be not less than 85 percent
of the Fair Market Value on the Grant Date of a share of Stock; provided,
however, that in the event that the Grantee is a Ten-Percent Stockholder, the
Purchase Price shall be not less than 100 percent of the Fair Market Value on
the Grant Date of a share of Stock.
Upon the expiration or termination of the restriction period and the
satisfaction of any other conditions prescribed by the Board, having properly
paid the Purchase Price, the restrictions applicable to shares of Restricted
Stock shall lapse, and, unless otherwise provided in the Award Agreement, a
stock certificate for such shares shall be delivered, free of all such
restrictions, to the Grantee or the Grantee's beneficiary or estate, as the case
may be.
10. FORM OF PAYMENT
10.1 GENERAL RULE.
Payment of the Option Price for the shares purchased pursuant to the
exercise of an Option or the Purchase Price for Restricted Stock shall be made
in cash or in cash equivalents acceptable to the Company.
10.2 SURRENDER OF STOCK.
To the extent the Award Agreement so provides, payment of the Option Price
for shares purchased pursuant to the exercise of an Option or the Purchase Price
for Restricted Stock may be made all or in part through the tender to the
Company of shares of Stock, which shares, if acquired from the Company, shall
have been held for at least six months at the time of tender and which shall be
valued, for purposes of determining the extent to which the Option Price or
Purchase Price has been paid thereby, at their Fair Market Value on the date of
exercise.
10.3 CASHLESS EXERCISE.
With respect to an Option only (and not with respect to Restricted Stock),
to the extent the Award Agreement so provides and the shares of Stock have
become publicly traded, payment of the Option Price for shares purchased
pursuant to the exercise of an Option may be made all or in part by delivery (on
a form acceptable to the Board) of an irrevocable direction to a licensed
securities broker acceptable to the Company to sell shares of Stock and to
deliver all or part of the sales proceeds to the Company in payment of the
Option Price and any withholding taxes described in SECTION 11.
July 1, 2002
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10.4 PROMISSORY NOTE.
To the extent the Award Agreement so provides, payment of the Option Price
for shares purchased pursuant to the exercise of an Option or the Purchase Price
for Restricted Stock may be made all or in part with a full recourse promissory
note executed by the Grantee. The interest rate and other terms and conditions
of such note shall be determined by the Board. The Board may require that the
Grantee pledge the Stock subject to the Grant for the purpose of securing
payment of the note. In no event shall stock certificate(s) representing the
Stock be released to the Grantee until such note is paid in full.
11. WITHHOLDING TAXES
The Company or any Affiliate, as the case may be, shall have the right to
deduct from payments of any kind otherwise due to a Grantee any Federal, state,
or local taxes of any kind required by law to be withheld with respect to the
vesting of or other lapse of restrictions applicable to Restricted Stock or upon
the issuance of any shares of Stock upon the exercise of an Option. At the time
of such vesting, lapse, or exercise, the Grantee shall pay to the Company or
Affiliate, as the case may be, any amount that the Company or Affiliate may
reasonably determine to be necessary to satisfy such withholding obligation.
Subject to the prior approval of the Company or the Affiliate, which may be
withheld by the Company or the Affiliate, as the case may be, in its sole
discretion, the Grantee may elect to satisfy such obligations, in whole or in
part, (i) by causing the Company or the Affiliate to withhold shares of Stock
otherwise issuable to the Grantee or (ii) by delivering to the Company or the
Affiliate shares of Stock already owned by the Grantee. The shares of Stock so
delivered or withheld shall have an aggregate Fair Market Value equal to such
withholding obligations. The Fair Market Value of the shares of Stock used to
satisfy such withholding obligation shall be determined by the Company or the
Affiliate as of the date that the amount of tax to be withheld is to be
determined. A Grantee who has made an election pursuant to this SECTION 11 may
satisfy his or her withholding obligation only with shares of Stock that are not
subject to any repurchase, forfeiture, unfulfilled vesting, or other similar
requirements.
12. RESTRICTIONS ON TRANSFER OF SHARES OF STOCK
12.1 RIGHT OF FIRST REFUSAL.
Subject to SECTION 12.4 below, a Grantee (or such other individual who is
entitled to exercise an Option or otherwise acquire shares pursuant to a Grant
under the terms of this Plan) shall not sell, pledge, assign, gift, transfer, or
otherwise dispose of any shares of Stock acquired pursuant to a Grant to any
person or entity without first offering such shares to the Company for purchase
on the same terms and conditions as those offered the proposed transferee. The
Company may assign its right of first refusal under this SECTION 12.1 in whole
or in part, to (1) any holder of stock or other securities of the Company (a
"Stockholder"), (2) any Affiliate or (3) any other person or entity that the
Board determines has a sufficient relationship with or interest in the Company.
The Company shall give reasonable written notice to the Grantee of any such
assignment of its rights. The restrictions of this SECTION 12.1 apply to any
person to whom Stock that was originally acquired pursuant to a Grant is sold,
pledged, assigned, bequeathed, gifted, transferred or otherwise disposed of,
without regard to the number of such subsequent transferees or the manner in
which they acquire the Stock, but the restrictions of this SECTION 12.1 do not
apply to a transfer of Stock that occurs as a result of the death of the Grantee
or of any subsequent transferee (but shall apply to the executor, the
administrator or personal representative, the estate, and the legatees,
beneficiaries and assigns thereof).
12.2 REPURCHASE AND OTHER RIGHTS.
Stock issued upon exercise of an Option or pursuant to the Grant of
Restricted Stock may be subject to such right of repurchase or other transfer
restrictions as the Board may determine, consistent with applicable law. Any
such additional restriction shall be set forth in the Award Agreement.
July 1, 2002
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12.3 PAYMENTS FOR REPURCHASE
Upon the Grantee's termination of Service, payment shall be made in cash or
by cancellation of indebtedness within the ninety (90) days after the date of
termination of Service or ninety (90) days after the date of exercise or
purchase, as the case may be, for the repurchase of shares of Stock acquired by
the Grantee pursuant to the exercise of an Option or under a Grant of Restricted
Stock.
12.4 PUBLICLY TRADED STOCK.
If the Stock is listed on an established national or regional stock
exchange or is admitted to quotation on The Nasdaq Stock Market, Inc., or is
publicly traded in an established securities market, the foregoing transfer
restrictions of SECTIONS 12.1 and 12.2 shall terminate as of the first date that
the Stock is so listed, quoted or publicly traded.
12.5 LEGEND.
In order to enforce the restrictions imposed upon shares of Stock under
this Plan or as provided in an Award Agreement, the Board may cause a legend or
legends to be placed on any certificate representing shares issued pursuant to
this Plan that complies with the applicable securities laws and regulations and
makes appropriate reference to the restrictions imposed under it.
13. PARACHUTE LIMITATIONS
Notwithstanding any other provision of this Plan or of any other agreement,
contract, or understanding heretofore or hereafter entered into by a Grantee
with the Company or any Affiliate, except an agreement, contract, or
understanding hereafter entered into that expressly modifies or excludes
application of this paragraph (an "Other Agreement"), and notwithstanding any
formal or informal plan or other arrangement for the direct or indirect
provision of compensation to the Grantee (including groups or classes of
participants or beneficiaries of which the Grantee is a member), whether or not
such compensation is deferred, is in cash, or is in the form of a benefit to or
for the Grantee (a "Benefit Arrangement"), if the Grantee is a "disqualified
individual," as defined in Section 280G(c) of the Code, any Options or
Restricted Stock held by that Grantee and any right to receive any payment or
other benefit under this Plan shall not become exercisable or vested (i) to the
extent that such right to exercise, vesting, payment, or benefit, taking into
account all other rights, payments, or benefits to or for the Grantee under this
Plan, all Other Agreements, and all Benefit Arrangements, would cause any
payment or benefit to the Grantee under this Plan to be considered a "parachute
payment" within the meaning of Section 280G(b)(2) of the Code as then in effect
(a "Parachute Payment") and (ii) if, as a result of receiving a Parachute
Payment, the aggregate after-tax amounts received by the Grantee from the
Company under this Plan, all Other Agreements, and all Benefit Arrangements
would be less than the maximum after-tax amount that could be received by the
Grantee without causing any such payment or benefit to be considered a Parachute
Payment. In the event that the receipt of any such right to exercise, vesting,
payment, or benefit under this Plan, in conjunction with all other rights,
payments, or benefits to or for the Grantee under any Other Agreement or any
Benefit Arrangement would cause the Grantee to be considered to have received a
Parachute Payment under this Plan that would have the effect of decreasing the
after-tax amount received by the Grantee as described in clause (ii) of the
preceding sentence, then the Grantee shall have the right, in the Grantee's sole
discretion, to designate those rights, payments, or benefits under this Plan,
any Other Agreements, and any Benefit Arrangements that should be reduced or
eliminated so as to avoid having the payment or benefit to the Grantee under
this Plan be deemed to be a Parachute Payment.
July 1, 2002
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14. REQUIREMENTS OF LAW
14.1 GENERAL.
The Company shall not be required to sell or issue any shares of Stock
under any Grant if the sale or issuance of such shares would constitute a
violation by the Grantee, any other individual exercising a right emanating from
such Grant, or the Company of any provision of any law or regulation of any
governmental authority, including without limitation any federal or state
securities laws or regulations. If at any time the Company shall determine, in
its discretion, that the listing, registration or qualification of any shares
subject to a Grant upon any securities exchange or under any governmental
regulatory body is necessary or desirable as a condition of, or in connection
with, the issuance or purchase of shares hereunder, no shares of Stock may be
issued or sold to the Grantee or any other individual exercising an Option
pursuant to such Grant unless such listing, registration, qualification, consent
or approval shall have been effected or obtained free of any conditions not
acceptable to the Company, and any delay caused thereby shall in no way affect
the date of termination of the Grant. Specifically, in connection with the
Securities Act, upon the exercise of any right emanating from such Grant or the
delivery of any shares of Restricted Stock, unless a registration statement
under the Securities Act is in effect with respect to the shares of Stock
covered by such Grant, the Company shall not be required to sell or issue such
shares unless the Board has received evidence satisfactory to it that the
Grantee or any other individual exercising an Option may acquire such shares
pursuant to an exemption from registration under the Securities Act. Any
determination in this connection by the Board shall be final, binding, and
conclusive. The Company may, but shall in no event be obligated to, register any
securities covered hereby pursuant to the Securities Act. The Company shall not
be obligated to take any affirmative action in order to cause the exercise of an
Option or the issuance of shares of Stock pursuant to the Plan to comply with
any law or regulation of any governmental authority. As to any jurisdiction that
expressly imposes the requirement that an Option shall not be exercisable until
the shares of Stock covered by such Option are registered or are exempt from
registration, the exercise of such Option (under circumstances in which the laws
of such jurisdiction apply) shall be deemed conditioned upon the effectiveness
of such registration or the availability of such an exemption.
14.2 RULE 16b-3.
During any time when the Company has a class of equity security registered
under Section 12 of the Exchange Act, it is the intent of the Company that
Grants pursuant to the Plan and the exercise of Options granted hereunder will
qualify for the exemption provided by Rule 16b-3 under the Exchange Act. To the
extent that any provision of the Plan or action by the Board does not comply
with the requirements of Rule 16b-3, it shall be deemed inoperative to the
extent permitted by law and deemed advisable by the Board, and shall not affect
the validity of the Plan. In the event that Rule 16b-3 is revised or replaced,
the Board may exercise its discretion to modify this Plan in any respect
necessary to satisfy the requirements of, or to take advantage of any features
of, the revised exemption or its replacement.
14.3 FINANCIAL REPORTS.
To the extent required by applicable law, not less often than annually, the
Company shall furnish to Grantees summary financial information including a
balance sheet regarding the Company's financial condition and results of
operations, unless such Grantees have duties with the Company that assure them
access to equivalent information. Such financial statements need not be audited.
15. EFFECT OF CHANGES IN CAPITALIZATION
15.1 CHANGES IN STOCK.
The number of shares for which Grants of Options and Restricted Stock may
be made under the Plan shall be proportionately increased or decreased for any
increase or decrease in the number of shares of Stock on account
July 1, 2002
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of any recapitalization, reclassification, stock split, reverse split,
combination of shares, exchange of shares, stock dividend or other distribution
payable in capital stock, or for any other increase or decrease in such shares
effected without receipt of consideration by the Company occurring after the
Effective Date (any such event hereafter referred to as a "CORPORATE EVENT"). In
addition, subject to the exception set forth in the last sentence of SECTION
15.4, the number of shares for which Grants are outstanding shall be
proportionately increased or decreased for any increase or decrease in the
number of shares of Stock on account of any Corporate Event. Any such adjustment
in outstanding Options shall not change the aggregate Option Price payable with
respect to shares that are subject to the unexercised portion of an Option
outstanding but shall include a corresponding proportionate adjustment in the
Option Price per share. The conversion of any convertible securities of the
Company shall not be treated as an increase in shares effected without receipt
of consideration. In the event of any distribution to the Company's stockholders
of securities of any other entity or other assets (other than dividends payable
in cash or stock of the Company) without receipt of consideration by the
Company, the Company may, in such manner as the Company deems appropriate,
adjust (i) the number and kind of shares subject to outstanding Awards and/or
(ii) the exercise price of outstanding Options to reflect such distribution.
15.2 REORGANIZATION IN WHICH THE COMPANY IS THE SURVIVING ENTITY AND IN
WHICH NO CHANGE OF CONTROL OCCURS.
Subject to the exception set forth in the last sentence of SECTION 15.4, if
the Company shall be the surviving entity in any reorganization, merger, or
consolidation of the Company with one or more other entities and in which no
Change of Control occurs, any Grant theretofore made pursuant to the Plan shall
pertain to and apply solely to the common stock shares to which a holder of the
number of shares of Stock subject to such Grant would have been entitled
immediately following such reorganization, merger, or consolidation, and in the
case of Options, with a corresponding proportionate adjustment of the Option
Price per share so that the aggregate Option Price thereafter shall be the same
as the aggregate Option Price of the shares remaining subject to the Option
immediately prior to such reorganization, merger, or consolidation. Subject to
any contrary language in an Award Agreement evidencing a Grant of Restricted
Stock, any restrictions applicable to such Restricted Stock shall apply as well
to any replacement shares received by the Grantee as a result of the
reorganization, merger or consolidation.
15.3 REORGANIZATION, SALE OF ASSETS OR SALE OF STOCK WHICH INVOLVES A
CHANGE OF CONTROL.
Subject to the exceptions set forth in the last sentence of this SECTION
15.3 and the last sentence of Section 15.4, (i) upon the occurrence of a Change
of Control, all outstanding shares of Restricted Stock shall be deemed to have
vested, and, with the exception of such restrictions imposed under SECTION 12,
all restrictions and conditions applicable to such shares of Restricted Stock
shall be deemed to have lapsed, immediately prior to the occurrence of such
Change of Control, and (ii) either of the following two actions shall be taken:
(A) fifteen days prior to the scheduled consummation of a Change of Control, all
Options outstanding hereunder shall become immediately exercisable and shall
remain exercisable for a period of fifteen days, or (B) the Board may elect, in
its sole discretion, to cancel any outstanding Grants and pay or deliver, or
cause to be paid or delivered, to the holder thereof an amount in cash or
securities having a value (as determined by the Board acting in good faith), in
the case of Restricted Stock, equal to the formula or fixed price per share paid
to holders of shares of Stock and, in the case of Options, equal to the product
of the number of shares of Stock subject to the Option (the "OPTION SHARES")
multiplied by the amount, if any, by which (I) the formula or fixed price per
share paid to holders of shares of Stock pursuant to such transaction exceeds
(II) the Option Price applicable to such Option Shares. With respect to the
Company's establishment of an exercise window, (i) any exercise of an Option
during such fifteen-day period shall be conditioned upon the consummation of the
event and shall be effective only immediately before the consummation of the
event, and (ii) upon consummation of any Change of Control the Plan, and all
outstanding but unexercised Options shall terminate. The Board shall send
written notice of an event that will result in such a termination to all
individuals who hold Options not later than the time at which the Company gives
notice thereof to its shareholders. This SECTION 15.3 shall not apply to any
Change of Control to the extent that provision is made in writing in connection
with such Change of Control for the assumption or continuation of the Options
and Restricted Stock theretofore granted, or for the substitution for such
Options and Restricted Stock for new common stock options and new common stock
restricted stock relating to the stock of a successor entity, or a parent or
subsidiary thereof, with appropriate adjustments as to the number of shares
(disregarding any consideration that is not common
July 1, 2002
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stock) and option prices, in which event the Plan and Options and Restricted
Stock theretofore granted shall continue in the manner and under the terms so
provided.
15.4 ADJUSTMENTS.
Adjustments under SECTION 15 related to shares of Stock or securities of
the Company shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. No fractional shares or other securities
shall be issued pursuant to any such adjustment, and any fractions resulting
from any such adjustment shall be eliminated in each case by rounding downward
to the nearest whole share. The Board may provide in the Award Agreements at the
time of Grant, or any time thereafter with the consent of the Grantee, for
different provisions to apply to a Grant in place of those described in SECTIONS
15.1, 15.2 and 15.3.
15.5 NO LIMITATIONS ON COMPANY.
The making of Grants pursuant to the Plan shall not affect or limit in any
way the right or power of the Company to make adjustments, reclassifications,
reorganizations, or changes of its capital or business structure or to merge,
consolidate, dissolve, or liquidate, or to sell or transfer all or any part of
its business or assets.
16. DURATION AND AMENDMENTS
16.1 TERM OF THE PLAN.
The Effective Date of this Plan is the date of its adoption by the Board,
subject to the approval of the Plan by the Company's stockholders. In the event
that the stockholders fail to approve the Plan within twelve (12) months after
its adoption by the Board, any Grants already made shall be null and void, and
no additional Grants shall be made after such date. The Plan shall terminate
automatically ten (10) years after its adoption by the Board and may be
terminated on any earlier date as next provided.
16.2 AMENDMENT AND TERMINATION OF THE PLAN.
The Board may, at any time and from time to time, amend, suspend, or
terminate the Plan as to any shares of Stock as to which Grants have not been
made. An amendment to the Plan shall be contingent on approval of the Company's
stockholders only to the extent required by applicable law, regulations or
rules. No Grants shall be made after the termination of the Plan. No amendment,
suspension, or termination of the Plan shall, without the consent of the
Grantee, alter or impair rights or obligations under any Grant theretofore
awarded under the Plan.
17. GENERAL PROVISIONS
17.1 DISCLAIMER OF RIGHTS
No provision in the Plan or in any Grant or Award Agreement shall be
construed to confer upon any individual the right to remain in the employ or
service of the Company or any Affiliate, or to interfere in any way with any
contractual or other right or authority of the Company either to increase or
decrease the compensation or other payments to any individual at any time, or to
terminate any employment or other relationship between any individual and the
Company or any Affiliate. The obligation of the Company to pay any benefits
pursuant to this Plan shall be interpreted as a contractual obligation to pay
only those amounts described herein, in the manner and under the conditions
prescribed herein. The Plan shall in no way be interpreted to require the
Company to transfer any amounts to a third party trustee or otherwise hold any
amounts in trust or escrow for payment to any participant or beneficiary under
the terms of the Plan.
July 1, 2002
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17.2 NONEXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan nor the submission of the Plan to the
shareholders of the Company for approval shall be construed as creating any
limitations upon the right and authority of the Board to adopt such other
incentive compensation arrangements (which arrangements may be applicable either
generally to a class or classes of individuals or specifically to a particular
individual or particular individuals) as the Board in its discretion determines
desirable, including, without limitation, the granting of stock options
otherwise than under the Plan.
17.3 CAPTIONS
The use of captions in this Plan or any Award Agreement is for the
convenience of reference only and shall not affect the meaning of any provision
of the Plan or such Award Agreement.
17.4 OTHER AWARD AGREEMENT PROVISIONS
Each Grant awarded under the Plan may contain such other terms and
conditions not inconsistent with the Plan as may be determined by the Board, in
its sole discretion.
17.5 NUMBER AND GENDER
With respect to words used in this Plan, the singular form shall include
the plural form, the masculine gender shall include the feminine gender, etc.,
as the context requires.
17.6 SEVERABILITY
If any provision of the Plan or any Award Agreement shall be determined to
be illegal or unenforceable by any court of law in any jurisdiction, the
remaining provisions hereof and thereof shall be severable and enforceable in
accordance with their terms, and all provisions shall remain enforceable in any
other jurisdiction.
17.7 POOLING
In the event any provision of the Plan or an Award Agreement would prevent
the use of pooling of interests accounting in a corporate transaction involving
the Company or its Affiliates and such transaction is contingent upon pooling of
interests accounting, then that provision shall be deemed amended or revoked to
the extent required to preserve such pooling of interests. The Company may
require in an Award Agreement that a Grantee who receives a Grant under the Plan
shall, upon advice from the Company, take (or refrain from taking, as
appropriate) all actions necessary or desirable to ensure that pooling of
interests accounting is available.
17.8 GOVERNING LAW
The validity and construction of this Plan and the instruments evidencing
the Grants awarded hereunder shall be governed by the laws of the State of
Delaware other than any conflicts or choice of law rule or principle that might
otherwise refer construction or interpretation of this Plan and the instruments
evidencing the Grants awarded hereunder to the substantive laws of any other
jurisdiction.
July 1, 2002
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18. EXECUTION
To record adoption of the Plan by the Board as of December 28, 2001, and
approval of the Plan by the stockholders on July 1, 2002, the Company has caused
its authorized officer to execute the Plan.
CDEX, INC.
By:
----------------------------------------
Name: Malcolm H. Philips
Title: President, CEO and Chairman
July 1, 2002
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