EXHIBIT 10.22
ILLUMINA, INC.
2000 STOCK PLAN
AS AMENDED AND RESTATED THROUGH MARCH 21, 2002
1. PURPOSES OF THE PLAN. The purposes of this 2000 Stock Plan are:
- to attract and retain the best available personnel for
positions of substantial responsibility,
- to provide additional incentive to Service Providers, and
- to promote the success of the Company's business.
Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "ADMINISTRATOR" means the Board or any of its Committees
as shall be administering the Plan, in accordance with Section 4 hereof.
(b) "APPLICABLE LAWS" means the requirements relating to the
administration of stock option plans, the grant of Options and the issuance of
Shares under U. S. state corporate laws, U.S. federal and state securities laws,
the Code, any stock exchange or quotation system on which the Common Stock is
listed or quoted and the applicable laws of any other country or jurisdiction
where Options are granted under the Plan.
(c) "BOARD" means the Board of Directors of the Company.
(d) "CODE" means the Internal Revenue Code of 1986, as
amended.
(e) "COMMITTEE" means a committee of Directors appointed by
the Board in accordance with Section 4 hereof.
(f) "COMMON STOCK" means the common stock of the Company.
(g) "COMPANY" means Illumina, Inc., a Delaware corporation.
(h) "CONSULTANT" means any natural person, including an
advisor, engaged by the Company or a Parent or Subsidiary to render services to
such entity.
(i) "CORPORATE TRANSACTION" means a merger of the Company with
or into another corporation or the sale of substantially all of the assets of
the Company.
(j) "DIRECTOR" means a member of the Board.
(k) "DISABILITY" means total and permanent disability as
defined in Section 22(e)(3) of the Code.
(l) "EFFECTIVE DATE" means the date on which the Securities
and Exchange Commission ("SEC") declared the registration statement on Form S-1
filed with the SEC for the initial public offering of the Common Stock
effective.
(m) "EMPLOYEE" means any person, including Officers and Inside
Directors, employed by the Company or any Parent or Subsidiary of the Company.
An Employee shall not be deemed to cease Employee status by reason of (i) any
leave of absence approved by the Company or (ii) transfers between locations of
the Company or between the Company, its Parent, any Subsidiary, or any
successor. For purposes of Incentive Stock Options, no such leave may exceed
ninety days, unless reemployment upon expiration of such leave is guaranteed by
statute or contract. If reemployment upon expiration of a leave of absence
approved by the Company is not so guaranteed, then three (3) months following
the 91st day of such leave any Incentive Stock Option held by the Optionee shall
cease to be treated as an Incentive Stock Option and shall be treated for tax
purposes as a Nonstatutory Stock Option. Neither service as Director nor payment
of a director's fee by the Company shall be sufficient to constitute
"employment" by the Company.
(n) "EXCHANGE ACT" means the Securities Exchange Act of 1934,
0s amended.
(o) "FAIR MARKET VALUE" means, as of any date, the value of a
Share determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or traded on a national market system, including without limitation the
Nasdaq National Market or the Nasdaq SmallCap Market of The Nasdaq Stock Market,
the Fair Market Value of a Share shall be the closing selling price for such
stock (or the closing bid, if no sales were reported) as quoted on such exchange
or system on the day of determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable;
(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share shall be the mean between the high bid and low asked
prices for the Common Stock on the day of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable; or
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
(p) "INCENTIVE STOCK OPTION" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.
(q) "INSIDE DIRECTOR" means a Director who is an Employee.
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(r) "NONSTATUTORY STOCK OPTION" means an Option not intended
to qualify as an Incentive Stock Option.
(s) "NOTICE OF GRANT" means a written or electronic notice
evidencing certain terms and conditions of an individual Option grant. The
Notice of Grant is part of the Option Agreement.
(t) "OFFICER" means a person who is an executive officer of
the Company within the meaning of Section 16 of the Exchange Act and the rules
and regulations promulgated thereunder.
(u) "OPTION" means a stock option granted pursuant to the
Plan.
(v) "OPTION AGREEMENT" means an agreement between the Company
and an Optionee evidencing the terms and conditions of an individual Option
grant. The Option Agreement is subject to the terms and conditions of the Plan.
(w) "OPTIONED SHARES" means the Shares subject to an Option.
(x) "OPTIONEE" means the holder of an outstanding Option
granted under the Plan.
(y) "OUTSIDE DIRECTOR" means a Director who is not an
Employee.
(z) "PARENT" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(aa) "PLAN" means this 2000 Stock Plan.
(bb) "PREDECESSOR PLAN" means the Illumina, Inc. 1998
Incentive Stock Plan.
(cc) "RULE 16B-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.
(dd) "SERVICE PROVIDER" means (i) an individual rendering
services to the Company or any Parent or Subsidiary of the Company in the
capacity of an Employee or Consultant or (ii) an individual serving as a
Director.
(ee) "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 13 hereof.
(ff) "SUBSIDIARY" means a "subsidiary corporation," whether
now or hereafter existing, as defined in Section 424(f) of the Code.
(gg) "WITHHOLDING TAXES" means the Federal, state and local
income and employment withholding taxes to which the holder of an Option may be
subject in connection with the exercise of that Option.
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3. STOCK SUBJECT TO THE PLAN.
(a) Subject to the provisions of Section 13 hereof, the
maximum aggregate number of Shares that may be optioned and sold under the Plan
is 9,649,460 shares. Such share reserve consists of (i) the 2,649,460 reserved
but unissued Shares under the Predecessor Plan transferred to the Plan as of the
Effective Date, (ii) an additional 4,000,000 Shares, and (iii) the 1,500,000
Share automatic increase for the fiscal year 2001 and (iv) the 1,500,000 Share
automatic increase for the fiscal year 2002.
(b) An annual increase shall automatically occur on the first
day of each fiscal year of the Company, beginning with fiscal year 2001, equal
to the lesser of (i) 1,500,000 Shares, (ii) 5% of the outstanding Shares on the
last day of the immediately preceding fiscal year or (iii) an amount determined
by the Board. The Shares may be authorized, but unissued, or reacquired Shares,
including Shares repurchased by the Company on the open market.
(c) If an outstanding Option (including those granted under
the Predecessor Plan) expires or terminates for any reason prior to exercise in
full, the unpurchased Optioned Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan upon exercise of an Option shall not be returned to the Plan and shall
not become available for future distribution under the Plan, except that if
unvested Shares are repurchased by the Company at their original purchase price,
such Shares shall become available for future grant under the Plan. Should the
exercise price of an Option under the Plan be paid with Shares or should Shares
otherwise issuable under the Plan be withheld by the Company in satisfaction of
the Withholding Taxes incurred in connection with the exercise of an Option,
then the number of Shares available for issuance under the Plan shall be reduced
by the gross number of Shares for which the Option is exercised, and not by the
net number of Shares issued to the holder of such Option.
4. ADMINISTRATION OF THE PLAN.
(a) PROCEDURE.
(i) MULTIPLE ADMINISTRATIVE BODIES. Different Committees
with respect to different groups of Service Providers may administer the Plan.
(ii) SECTION 162(m). To the extent that the Administrator
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.
(iii) RULE 16B-3. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption under
Rule 16b-3.
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(iv) OTHER ADMINISTRATION. Other than as provided above,
the Plan shall be administered by (A) the Board or (B) a Committee, which
committee shall be constituted to satisfy Applicable Laws.
(b) POWERS OF THE ADMINISTRATOR.
(i) Subject to the provisions of the Plan, and in the case
of a Committee, subject to the specific duties delegated by the Board to such
Committee, the Administrator shall have the authority, in its discretion:
(A) to determine the Fair Market Value;
(B) to select the Service Providers to whom Options
may be granted hereunder;
(C) to determine the number of Shares to be covered by
each Option granted hereunder;
(D) to approve forms of Option Agreements for use
under the Plan;
(E) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Option granted hereunder, which
terms and conditions include, but are not limited to, the exercise price, the
time or times when Options may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Option or the Shares relating
thereto, based in each case on such factors as the Administrator, in its sole
discretion, shall determine;
(F) to construe and interpret the terms of the Plan
and awards granted pursuant to the Plan;
(G) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of satisfying applicable foreign laws;
(H) to modify or amend each Option (subject to Section
15(c) hereof), including the discretionary authority to extend the
post-termination exercisability period of Options longer than is otherwise
provided for in the Option Agreement;
(I) to allow Optionees to satisfy Withholding Tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option that number of Shares having a Fair Market
Value equal to the minimum amount required to be withheld. The Fair Market Value
of the Shares to be withheld shall be determined on the date that the amount of
Withholding Tax is to be determined. All elections by an Optionee to have Shares
withheld for this purpose shall be made in such form and under such conditions
as the Administrator may deem necessary or advisable;
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(J) to authorize any person to execute on behalf of
the Company any instrument required to effect the grant of an Option previously
granted by the Administrator;
(K) to make all other determinations deemed necessary
or advisable for administering the Plan.
(ii) Notwithstanding the foregoing, the Option grant
provisions of Section 11 hereof shall be self-executing, and no Administrator
shall exercise any discretionary functions with respect to such Option grants.
(c) EFFECT OF ADMINISTRATOR'S DECISION. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Shares issued under the Plan.
5. ELIGIBILITY. Nonstatutory Stock Options may be granted to
Service Providers. Incentive Stock Options may be granted only to Employees.
6. LIMITATIONS.
(a) Each Option shall be designated in the Option Agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, no installment under this Option shall qualify
for favorable tax treatment as an Incentive Stock Option if (and to the extent)
the aggregate Fair Market Value of the Shares (determined at the date of grant)
for which such installment first becomes exercisable hereunder would, when added
to the aggregate value (determined as of the respective date or dates of grant)
of the Shares or other securities for which this Option or any other Incentive
Stock Options granted to Optionee prior to the date of grant (whether under the
Plan or any other option plan of the Company or any Parent or Subsidiary of the
Company) first become exercisable during the same calendar year, exceed One
Hundred Thousand Dollars ($100,000) in the aggregate. Should such One Hundred
Thousand Dollar ($100,000) limitation be exceeded in any calendar year, the
Option shall nevertheless become exercisable for the excess Optioned Shares in
such calendar year as a Nonstatutory Stock Option. For purposes of this Section
6(a), Incentive Stock Options shall be taken into account in the order in which
they were granted.
(b) Neither the Plan nor any Option shall confer upon an
Optionee any right with respect to continuing the Optionee's relationship as a
Service Provider with the Company, nor shall they interfere in any way with the
Optionee's right or the Company's right to terminate such relationship at any
time, with or without cause.
(c) The following limitations shall apply to grants of
Options:
(i) No Service Provider shall be granted, in any fiscal
year of the Company, Options to purchase more than 500,000 Shares.
(ii) However, in connection with his or her commencement
of Service Provider status, an individual may be granted Options to purchase up
to an additional 1,000,000 Shares, which shall not count against the limit set
forth in subsection (i) above.
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7. TERM OF PLAN. Subject to Section 19 hereof, the Plan shall
become effective on the Effective Date. Unless the Plan is terminated earlier
pursuant to Section 15(a) hereof, the Plan shall terminate upon the earliest to
occur of (a) June 1, 2010, (b) the date on which all Shares available for
issuance under the Plan shall have been issued as fully vested Shares or (c) the
termination of all outstanding Options in connection with a dissolution or
liquidation pursuant to Section 13(b) hereof or a Corporate Transaction pursuant
to Section 13(c) hereof. Should the Plan terminate on June 1, 2010, then all
Options outstanding at that time shall continue to have force and effect in
accordance with the provisions of the applicable Option Agreement.
8. TERM OF OPTION. The term of each Option shall be stated in the
Option Agreement. In the case of an Incentive Stock Option, the term shall be
ten (10) years from the date of grant or such shorter term as may be provided in
the Option Agreement. Moreover, in the case of an Incentive Stock Option granted
to an Optionee who, at the time the Incentive Stock Option is granted, owns
stock representing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
term of the Incentive Stock Option shall be five (5) years from the date of
grant or such shorter term as may be provided in the Option Agreement.
9. OPTION EXERCISE PRICE AND CONSIDERATION.
(a) EXERCISE PRICE. The per share exercise price for the
Shares to be issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time the
Incentive Stock Option is granted, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the per Share exercise price shall be no less than 110% of the
Fair Market Value per Share on the date of grant.
(B) granted to any Employee other than an Employee
described in paragraph (A) immediately above, the per Share exercise price shall
be no less than 100% of the Fair Market Value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option, the per
Share exercise price shall be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
(iii) Notwithstanding the foregoing, Options may be
granted with a per Share exercise price of less than 100% of the Fair Market
Value per Share on the date of grant pursuant to a merger or other corporate
transaction.
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(b) WAITING PERIOD AND EXERCISE DATES. At the time an Option
is granted, the Administrator shall fix the period within which the Option may
be exercised and shall determine any conditions that must be satisfied before
the Option may be exercised.
(c) FORM OF CONSIDERATION. The Administrator shall determine
the acceptable form of consideration for exercising an Option, including the
method of payment. Such consideration may consist entirely of:
(i) cash;
(ii) promissory note;
(iii) other Shares which, in the case of Shares acquired
directly or indirectly from the Company, (A) have been owned by the Optionee for
more than six (6) months on the date of surrender, and (B) have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised;
(iv) consideration received through a special sale and
remittance procedure pursuant to which the Optionee shall concurrently provide
irrevocable instructions to (A) a Company-designated brokerage firm to effect
the immediate sale of the purchased Shares and remit to the Company, 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 Withholding
Taxes required to be withheld by the Company by reason of such exercise and (B)
the Company to deliver the certificates for the purchased Shares directly to
such brokerage firm in order to complete the sale;
(v) a reduction in the amount of any Company liability to
the Optionee, including any liability attributable to the Optionee's
participation in any Company-sponsored deferred compensation program or
arrangement;
(vi) any combination of the foregoing methods of payment;
or
(vii) such other consideration and method of payment for
the issuance of Optioned Shares to the extent permitted by Applicable Laws.
10. EXERCISE OF OPTION.
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER.
(i) Any Option granted hereunder shall be exercisable
according to the terms of the Plan and at such times and under such conditions
as determined by the Administrator and set forth in the Option Agreement. Unless
the Administrator provides otherwise, vesting of Options granted hereunder shall
be suspended during any unpaid leave of absence. An Option may not be exercised
for a fraction of a Share.
(ii) An Option shall be deemed exercised when the Company
receives: (A) written or electronic notice of exercise (in accordance with the
Option Agreement) from the person entitled to exercise the Option, and (B) full
payment for the Optioned Shares
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with respect to which the Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Plan and shall be set forth in the Option Agreement. Shares
issued upon exercise of an Option shall be issued in the name of the Optionee
or, if requested by the Optionee, in the name of the Optionee and his or her
spouse. Until the Shares are issued (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized transfer agent of the Company),
no right to vote or receive dividends or any other rights as a stockholder shall
exist with respect to the Optioned Shares, notwithstanding the exercise of the
Option. The Company shall issue (or cause to be issued) such Shares promptly
after the Option is exercised. No adjustment will be made for a dividend or
other right for which the record date is prior to the date the Shares are
issued, except as provided in Section 13 hereof.
(iii) Exercising an Option in any manner shall decrease
the number of Optioned Shares thereafter available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) TERMINATION OF RELATIONSHIP AS A SERVICE PROVIDER. If an
Optionee ceases to be a Service Provider, other than upon the Optionee's death
or Disability, such Optionee may exercise his or her Option for a period of
three (3) months measured from the date of termination, or such longer period of
time as specified in the Option Agreement, to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of the Option as set forth in the Option Agreement). If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Option shall immediately terminate as to all the unvested Optioned Shares
covered by the unvested portion of the Option, and those Optioned Shares shall
revert immediately to the Plan. To the extent the Optionee does not, within the
post-termination time period specified in the Option Agreement, exercise the
Option for the Optioned Shares in which Optionee is vested at the time of such
termination of Service Provider status, the Option shall terminate with respect
to those vested Optioned Shares at the end of such period, and those Optioned
Shares shall revert to the Plan.
(c) DISABILITY OF OPTIONEE. If an Optionee ceases to be a
Service Provider as a result of the Optionee's Disability, the Optionee may
exercise his or her Option within twelve (12) months of termination, or such
longer period of time as specified in the Option Agreement, to the extent the
Option is vested on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Option Agreement). If,
on the date of termination, the Optionee is not vested as to his or her entire
Option, the Option shall immediately terminate as to the Optioned Shares covered
by the unvested portion of the Option, and those Optioned Shares shall revert
immediately to the Plan. To the extent the Optionee does not, within the
post-termination time period specified in the Option Agreement, exercise the
Option for the Optioned Shares in which Optionee is vested at the time of such
termination of Service Provider status, the Option shall terminate with respect
to those vested Optioned Shares at the end of such period, and those Optioned
Shares shall revert to the Plan.
(d) DEATH OF OPTIONEE. If an Optionee dies while a Service
Provider, the Option may be exercised within twelve (12) months following
Optionee's death, or such longer period of time as specified in the Option
Agreement, to the extent that the Option is vested on the date of death (but in
no event later than the expiration of the term of such Option as set forth in
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the Option Agreement) by the Optionee's designated beneficiary, provided such
beneficiary has been designated prior to Optionee's death in a form acceptable
to the Administrator. If no such beneficiary has been designated by the
Optionee, then such Option may be exercised by the personal representative of
the Optionee's estate or by the person(s) to whom the Option is transferred
pursuant to the Optionee's will or in accordance with the laws of descent and
distribution. If, at the time of death, the Optionee is not vested as to his or
her entire Option, the Option shall immediately terminate as to the Optioned
Shares covered by the unvested portion of the Option, and those Optioned Shares
shall immediately revert to the Plan. To the extent the Option is not, within
the post-termination time period specified in the Option Agreement, exercised
for the Optioned Shares in which Optionee is vested at the time of such
termination of Service Provider status, the Option shall terminate with respect
to those vested Optioned Shares, and those Optioned Shares shall revert to the
Plan.
11. FORMULA OPTION GRANTS TO OUTSIDE DIRECTORS. Outside Directors
shall automatically be granted Options in accordance with the following
provisions:
(a) All Options granted pursuant to this Section shall be
Nonstatutory Stock Options and, except as otherwise provided in this Section 11,
shall be subject to the other terms and conditions of the Plan.
(b) Each individual shall be automatically granted an Option
to purchase 20,000 Shares (the "First Option") on the date such individual first
attends a Board meeting as an Outside Director, whether through election by the
stockholders of the Company or appointment by the Board to fill a vacancy;
provided, however, that an Inside Director who ceases to be an Inside Director
but who remains a Director shall not receive a First Option.
(c) On each annual stockholder meeting following the Effective
Date, each Outside Director who continues to serve in such capacity shall be
automatically granted an Option to purchase 10,000 Shares (a "Subsequent
Option").
(d) The terms of a First Option or a Subsequent Option granted
pursuant to this Section shall be as follows:
(i) The term of the Option shall be ten (10) years
measured from the date of grant.
(ii) The Option shall be exercisable only during the time
that the Outside Director remains a Director and for the six (6) month period
following the date of the Optionee's cessation of service as a Director,
provided, however, that the Option cannot be exercised after the termination of
the Option.
(iii) The exercise price per Share shall be 100% of the
Fair Market Value per Share on the date of grant of the Option.
(iv) Subject to Section 13 hereof, the Option shall become
exercisable as to 25% of the Optioned Shares on each anniversary of its date of
grant, provided that the Optionee continues to serve as a Director on such
dates.
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(v) If an Outside Director dies while holding any
outstanding Option under this Section 11, then that Option may be exercised
within six (6) months following his or her death, or such longer period of time
as specified in the Option Agreement, to the extent that the Option is vested on
the date of death (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement) by the Outside Director's
designated beneficiary, provided such beneficiary has been designated prior to
his or her death in a form acceptable to the Administrator. If no such
beneficiary has been designated by the Outside Director, then such Option may be
exercised by the personal representative of his or her estate or by the
person(s) to whom the Option is transferred pursuant to his or her will or in
accordance with the laws of descent and distribution. If, at the time of death,
the Outside Director is not vested as to his or her entire Option, Option shall
immediately terminate as to the Optioned Shares covered by the unvested portion
of the Option, and those Optioned Shares shall immediately revert to the Plan.
To the extent the Option is not, within the post-termination time period
specified in the Option Agreement, exercised for the Optioned Shares in which
the Outside Director is vested at the time of his or her cessation of Director
status, the Option shall terminate with respect to those vested Optioned Shares,
and those Optioned Shares shall revert to the Plan.
12. LIMITED TRANSFERABILITY OF OPTIONS. Unless determined
otherwise by the Administrator, an Option may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or by
the laws of descent or distribution and may be exercised, during the lifetime of
the Optionee, only by the Optionee. The Optionee may designate one or more
persons as the beneficiary or beneficiaries of his or her outstanding Options,
and those Options shall, in accordance with such designation, automatically be
transferred to such beneficiary or beneficiaries upon the Optionee's death while
holding those Options. Such beneficiary or beneficiaries shall take the
transferred Options subject to all the terms and conditions of the applicable
agreement evidencing each such transferred Option, including (without
limitation) the limited time period during which the Option may be exercised
following the Optionee's death. If the Administrator makes an Option
transferable, such Option shall contain such additional terms and conditions as
the Administrator deems appropriate.
13. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION,
CORPORATE TRANSACTION.
(a) CHANGES IN CAPITALIZATION. Subject to any required action
by the stockholders of the Company, (i) the number of Shares which have been
authorized for issuance under the Plan but as to which no Options have yet been
granted or which have been returned to the Plan upon cancellation or expiration
of an Option, (ii) the number of Shares that may be added annually to the Plan
pursuant to Section 3(i) hereof, (iii) the number of Optioned Shares granted
under First Options and Subsequent Options under Section 11 hereof, (iv) the
maximum number of Optioned Shares that may be granted to any Service Provider
within any fiscal year, (v) the maximum number of Optioned Shares that may be
granted to any Service Provider in connection with his or her commencement of
service and (vi) the number of Optioned Shares as well as the price per Share
subject to each outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued Shares resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock, or any other increase or decrease in the number of issued
Shares effected without receipt of consideration by
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the Company; provided, however, that conversion of any convertible securities of
the Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of Optioned Shares.
(b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Shares covered thereby, including Shares
as to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
unvested Shares purchased upon exercise of an Option shall lapse as to all such
Shares, provided the proposed dissolution or liquidation takes place at the time
and in the manner contemplated. To the extent it has not been previously
exercised, an Option will terminate immediately prior to the consummation of
such proposed action.
(c) CORPORATE TRANSACTION.
(i) In the event of a Corporate Transaction, each
outstanding Option shall be assumed or an equivalent option substituted by the
successor corporation or a Parent or Subsidiary of the successor corporation. In
the event that the successor corporation refuses to assume or substitute for the
Option, the Optionee shall fully vest in and have the right to exercise the
Option as to all of the Optioned Shares, including Shares as to which it would
not otherwise be vested or exercisable. If an Option becomes fully vested and
exercisable in lieu of assumption or substitution in the event of Corporate
Transaction, the Administrator shall notify the Optionee in writing or
electronically that the Option shall be fully vested and exercisable for a
period of fifteen (15) days from the date of such notice, and the Option shall
terminate upon the expiration of such period. For the purposes of this
paragraph, the Option shall be considered assumed if, following the Corporate
Transaction, the Option confers the right to purchase or receive, for each
Optioned Share immediately prior to the Corporate Transaction, the consideration
(whether stock, cash, or other securities or property) received in the Corporate
Transaction by holders of Common Stock for each Share held on the effective date
of the Corporate Transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received
in the Corporate Transaction is not solely common stock of the successor
corporation or its Parent, the Administrator may, with the consent of the
successor corporation, provide for the consideration to be received upon the
exercise of the Option, for each Optioned Share, to be solely common stock of
the successor corporation or its Parent equal in fair market value to the per
share consideration received by holders of Shares in the Corporate Transaction.
(ii) All outstanding repurchase rights of the Company
shall automatically terminate, and the unvested Shares subject to those
terminated rights shall
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immediately vest in full, in the event of a 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
Administrator at the time the repurchase right is issued.
(iii) Each Option which is assumed pursuant to this
Section 13(c) 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 (A) the exercise price payable per share under each outstanding Option,
provided the aggregate exercise price payable for such securities shall remain
the same, (B) the maximum number and/or class of securities available for
issuance over the remaining term of the Plan, (C) the maximum number and/or
class of securities for which any one person may be granted Options under the
Plan per year, (D) the maximum number and/or class of securities by which the
share reserve is to increase automatically each year and (E) the number and/or
class of securities subject to the Options granted under Section 11.
14. DATE OF GRANT. The date of grant of a First Option or
Subsequent Option shall be the date on which it was automatically granted
pursuant to Section 11 hereof. The date of grant of any other Option shall be,
for all purposes, the date on which the Administrator grants such Option. Notice
of the grant shall be provided to each Optionee within a reasonable time after
the date of such grant.
15. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AMENDMENT AND TERMINATION. The Board may at any time
amend, alter, suspend or terminate the Plan.
(b) STOCKHOLDER APPROVAL. The Company shall obtain stockholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.
(c) EFFECT OF AMENDMENT OR TERMINATION. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee and
the Company. Termination of the Plan shall not affect the Administrator's
ability to exercise the powers granted to it hereunder with respect to Options
granted under the Plan prior to the date of such termination.
16. CONDITIONS UPON ISSUANCE OF SHARES.
(a) Options shall not be granted and Shares shall not be
issued pursuant to the exercise of an Option unless the grant of the Option, the
exercise of such Option and the issuance and delivery of such Shares shall
comply with Applicable Laws and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
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(b) No Shares or other assets shall be issued or delivered
under the Plan unless and until there shall have been compliance with all
applicable requirements of Federal and state securities laws, including the
filing and effectiveness of the Form S-8 registration statement for the Shares,
and all applicable listing requirements of any stock exchange (or the Nasdaq
National Market, if applicable) on which Common Stock is then listed for
trading.
17. INABILITY TO OBTAIN AUTHORITY. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful grant of
Options and issuance and sale of any Shares hereunder shall relieve the Company
of any liability in respect of the failure to grant such Options or issue or
sell such Shares as to which such requisite authority shall not have been
obtained.
18. RESERVATION OF SHARES. The Company, during the term of this
Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.
19. STOCKHOLDER APPROVAL. The Plan shall be subject to approval by
the stockholders of the Company within twelve (12) months after the date the
Plan is adopted. Such stockholder approval shall be obtained in the manner and
to the degree required under Applicable Laws.
20. PREDECESSOR PLAN. The Plan shall serve as the successor to the
Predecessor Plan, and no further Option grants or direct stock issuances shall
be made under the Predecessor Plan after the Effective Date. All Options
outstanding under the Predecessor Plan on the Effective Date shall be
transferred to the Plan at that time and shall be treated as outstanding Options
under the Plan. However, each outstanding Option so transferred shall continue
to be governed solely by the terms of the documents evidencing such Option, and
no provision of the Plan shall be deemed to affect or otherwise modify the
rights or obligations of the holders of such transferred Options with respect to
their acquisition of Shares.
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