EXHIBIT 99.3
2002 STOCK PLAN
OF
BERKANA WIRELESS INC.
1. PURPOSES OF THE PLAN. The purposes of this 2002 Stock Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants 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 of an option and subject to the
applicable provisions of Section 422 of the Code and the regulations promulgated
thereunder. Stock purchase rights may also be granted under the Plan.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "ADMINISTRATOR" means the Board or its Committee appointed
pursuant to Section 4 of the Plan.
(b) "AFFILIATE" means an entity other than a Subsidiary (as defined
below) which, together with the Company, is under common control of a third
person or entity.
(c) "APPLICABLE LAWS" means the legal requirements relating to the
administration of stock option and restricted stock purchase plans under
applicable U.S. state corporate laws, U.S. federal and applicable state
securities laws, the Code, any Stock Exchange rules or regulations and the
applicable laws of any other country or jurisdiction where Options or Stock
Purchase Rights are granted under the Plan, as such laws, rules, regulations and
requirements shall be in place from time to time.
(d) "BOARD" means the Board of Directors of the Company.
(e) "CHANGE OF CONTROL" means a sale of all or substantially all of
the Company's assets, or any merger or consolidation of the Company with or into
another corporation other than a merger or consolidation in which the holders of
more than 50% of the shares of capital stock of the Company outstanding
immediately prior to such transaction continue to hold (either by the voting
securities remaining outstanding or by their being converted into voting
securities of the surviving entity) more than 50% of the total voting power
represented by the voting securities of the Company, or such surviving entity,
outstanding immediately after such transaction.
(f) "CODE" means the Internal Revenue Code of 1986, as amended.
(g) "COMMITTEE" means one or more committees or subcommittees of the
Board appointed by the Board to administer the Plan in accordance with Section 4
below.
(h) "COMMON STOCK" means the Common Stock of the Company.
(i) "COMPANY" means Berkana Wireless Inc., a Delaware corporation.
(j) "CONSULTANT" means any person, including an advisor, who is
engaged by the Company or any Parent, Subsidiary or Affiliate to render services
and is compensated for such services, and any director of the Company whether
compensated for such services or not.
(k) "CONTINUOUS SERVICE STATUS" means the absence of any
interruption or termination of service as an Employee or Consultant. Continuous
Service Status as an Employee or Consultant shall not be considered interrupted
in the case of: (i) sick leave; (ii) military leave; (iii) any other leave of
absence approved by the Administrator, provided that such leave is for a period
of not more than ninety (90) days, unless reemployment upon the expiration of
such leave is guaranteed by contract or statute, or unless provided otherwise
pursuant to Company policy adopted from time to time; or (iv) in the case of
transfers between locations of the Company or between the Company, its Parents,
Subsidiaries, Affiliates or their respective successors. A change in status from
an Employee to a Consultant or from a Consultant to an Employee will not
constitute an interruption of Continuous Service Status.
(l) "CORPORATE TRANSACTION" means a sale of all or substantially all
of the Company's assets, or a merger, consolidation or other capital
reorganization of the Company with or into another corporation and includes a
Change of Control.
(m) "DIRECTOR" means a member of the Board.
(n) "EMPLOYEE" means any person employed by the Company or any
Parent, Subsidiary or Affiliate, with the status of employment determined based
upon such factors as are deemed appropriate by the Administrator in its
discretion, subject to any requirements of the Code or the Applicable Laws. The
payment by the Company of a director's fee to a Director shall not be sufficient
to constitute "employment" of such Director by the Company.
(o) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(p) "FAIR MARKET VALUE" means, as of any date, the fair market value
of Common Stock as determined by the Administrator in good faith on such basis
as it deems appropriate and applied consistently with respect to Participants.
Whenever possible, the determination of Fair Market Value shall be based upon
the closing price for the Shares as reported in the Wall Street Journal for the
applicable date.
(q) "INCENTIVE STOCK OPTION" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code, as
designated in the applicable Option Agreement.
(r) "LISTED SECURITY" means any security of the Company that is
listed or approved for listing on a national securities exchange or designated
or approved for designation as a national market system security on an
interdealer quotation system by the National Association of Securities Dealers,
Inc.
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(s) "NAMED EXECUTIVE" means any individual who, on the last day of
the Company's fiscal year, is the chief executive officer of the Company (or is
acting in such capacity) or among the four most highly compensated officers of
the Company (other than the chief executive officer). Such officer status shall
be determined pursuant to the executive compensation disclosure rules under the
Exchange Act.
(t) "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an Incentive Stock Option, as designated in the applicable Option
Agreement.
(u) "OPTION" means a stock option granted pursuant to the Plan.
(v) "OPTION AGREEMENT" means a written document, the form(s) of
which shall be approved from time to time by the Administrator, reflecting the
terms of an Option granted under the Plan and includes any documents attached to
or incorporated into such Option Agreement, including, but not limited to, a
notice of stock option grant and a form of exercise notice.
(w) "OPTION EXCHANGE PROGRAM" means a program approved by the
Administrator whereby outstanding Options are exchanged for Options with a lower
exercise price or are amended to decrease the exercise price as a result of a
decline in the Fair Market Value of the Common Stock.
(x) "OPTIONED STOCK" means the Common Stock subject to an Option.
(y) "OPTIONEE" means an Employee or Consultant who receives an
Option.
(z) "PARENT" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code, or any successor provision.
(aa) "PARTICIPANT" means any holder of one or more Options or Stock
Purchase Rights, or the Shares issuable or issued upon exercise of such awards,
under the Plan.
(bb) "PLAN" means this 2002 Stock Plan.
(cc) "REPORTING PERSON" means an officer, Director, or greater than
ten percent stockholder of the Company within the meaning of Rule 16a-2 under
the Exchange Act, who is required to file reports pursuant to Rule 16a-3 under
the Exchange Act.
(dd) "RESTRICTED STOCK" means Shares of Common Stock acquired
pursuant to a grant of a Stock Purchase Right under Section 11 below.
(ee) "RESTRICTED STOCK PURCHASE AGREEMENT" means a written document,
the form(s) of which shall be approved from time to time by the Administrator,
reflecting the terms of a Stock Purchase Right granted under the Plan and
includes any documents attached to such agreement.
(ff) "RULE 16B-3" means Rule 16b-3 promulgated under the Exchange
Act, as amended from time to time, or any successor provision.
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(gg) "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 14 of the Plan.
(hh) "STOCK EXCHANGE" means any stock exchange or consolidated stock
price reporting system on which prices for the Common Stock are quoted at any
given time.
(ii) "STOCK PURCHASE RIGHT" means the right to purchase Common Stock
pursuant to Section 11 below.
(jj) "SUBSIDIARY" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code, or any successor
provision.
(kk) "TEN PERCENT HOLDER" means a person who 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.
3. STOCK SUBJECT TO THE PLAN. Subject to adjustment pursuant to Section
14, the aggregate number of Shares available for issuance as Grants under the
Plan shall not exceed 3,506,365 Shares (the "Reserve"), which Reserve initially
includes the 588,545 Shares transferred to the Plan from the 2001 Stock
Incentive Plan of Berkana Wireless Inc. (the "2001 Plan") upon the Effective
Date of the Plan, plus (i) any Shares subject to options granted under the 2001
Plan that have terminated or will terminate and were not initially included in
the Reserve as of the Effective Date, and (ii) any unvested Shares that have
been or will be repurchased pursuant to awards issued under the 2001 Plan that
were not initially included in the Reserve as of the Effective Date, not to
exceed in the aggregate 500,000 additional Shares. The Shares may be authorized
but unissued or reacquired Common Stock. If Options are forfeited or terminate
for any other reason before being exercised, then such Options shall again
become available for Grants under the Plan. In addition, any Shares of Common
Stock which are retained by the Company upon exercise of an award in order to
satisfy the exercise or purchase price for such award or any withholding taxes
due with respect to such exercise or purchase shall be treated as not issued and
shall continue to be available under the Plan. In the event Shares issued under
the Plan are reacquired by the Company pursuant to any forfeiture provision,
right of repurchase or right of first refusal, such Shares shall again become
available for Grants under the Plan; provided that the aggregate number of
Shares that may be issued upon the exercise of Incentive Stock Options shall in
no event exceed 4,006,365 Shares (including the Shares transferred to the Plan
from the 2001 Plan), subject to adjustment pursuant to Section 14.
4. ADMINISTRATION OF THE PLAN.
(a) GENERAL. The Plan shall be administered by the Board or a
Committee, or a combination thereof, as determined by the Board. The Plan may be
administered by different administrative bodies with respect to different
classes of Participants and, if permitted by the Applicable Laws, the Board may
authorize one or more officers to make awards under the Plan.
(b) COMMITTEE COMPOSITION. If a Committee has been appointed
pursuant to this Section 4, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board. From time to time the
Board may increase the size of any Committee and appoint additional members
thereof, remove members (with or without cause) and appoint new
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members in substitution therefor, fill vacancies (however caused) and remove all
members of a Committee and thereafter directly administer the Plan, all to the
extent permitted by the Applicable Laws and, in the case of a Committee
administering the Plan in accordance with the requirements of Rule 16b-3 or
Section 162(m) of the Code, to the extent permitted or required by such
provisions.
(c) POWERS OF THE ADMINISTRATOR. Subject to the provisions of the
Plan and in the case of a Committee, the specific duties delegated by the Board
to such Committee, the Administrator shall have the authority, in its
discretion:
(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(p) of the Plan, provided that such determination shall
be applied consistently with respect to Participants under the Plan;
(ii) to select the Employees and Consultants to whom Options
and Stock Purchase Rights may from time to time be granted;
(iii) to determine whether and to what extent Options and
Stock Purchase Rights are granted;
(iv) to determine the number of Shares of Common Stock to be
covered by each award granted;
(v) to approve the form(s) of agreement(s) used under the
Plan;
(vi) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder, which terms and
conditions include but are not limited to the exercise or purchase price, the
time or times when awards 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, Optioned Stock, Stock
Purchase Right or Restricted Stock, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;
(vii) to determine whether and under what circumstances an
Option may be settled in cash under Section 10(c) instead of Common Stock;
(viii) to implement an Option Exchange Program on such terms
and conditions as the Administrator in its discretion deems appropriate,
provided that no amendment or adjustment to an Option that would materially and
adversely affect the rights of any Optionee shall be made without the prior
written consent of the Optionee;
(ix) to adjust the vesting of an Option held by an Employee or
Consultant as a result of a change in the terms or conditions under which such
person is providing services to the Company;
(x) to construe and interpret the terms of the Plan and awards
granted under the Plan, which constructions, interpretations and decisions shall
be final and binding on all Participants; and
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(xi) in order to fulfill the purposes of the Plan and without
amending the Plan, to modify grants of Options or Stock Purchase Rights to
Participants who are foreign nationals or employed outside of the United States
in order to recognize differences in local law, tax policies or customs.
5. ELIGIBILITY.
(a) RECIPIENTS OF GRANTS. Nonstatutory Stock Options and Stock
Purchase Rights may be granted to Employees and Consultants. Incentive Stock
Options may be granted only to Employees, provided that Employees of Affiliates
shall not be eligible to receive Incentive Stock Options.
(b) TYPE OF OPTION. Each Option shall be designated in the Option
Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
(c) ISO $100,000 LIMITATION. Notwithstanding any designation under
Section 5(b), to the extent that the aggregate Fair Market Value of Shares with
respect to which Options designated as Incentive Stock Options are exercisable
for the first time by any Optionee during any calendar year (under all plans of
the Company or any Parent or Subsidiary) exceeds $100,000, such excess Options
shall be treated as Nonstatutory Stock Options. For purposes of this Section
5(c), Incentive Stock Options shall be taken into account in the order in which
they were granted, and the Fair Market Value of the Shares subject to an
Incentive Stock Option shall be determined as of the date of the grant of such
Option.
(d) NO EMPLOYMENT RIGHTS. The Plan shall not confer upon any
Participant any right with respect to continuation of an employment or
consulting relationship with the Company, nor shall it interfere in any way with
such Participant's right or the Company's right to terminate his or her
employment or consulting relationship at any time, with or without cause.
6. TERM OF PLAN. The Plan shall become effective upon its adoption by the
Board of Directors (the "Effective Date"). It shall continue in effect for a
term of ten (10) years unless sooner terminated under Section 16 of the Plan.
7. TERM OF OPTION. The term of each Option shall be the term stated in the
Option Agreement; provided that the term shall be no more than ten years from
the date of grant thereof or such shorter term as may be provided in the Option
Agreement and provided further that, in the case of an Incentive Stock Option
granted to a person who at the time of such grant is a Ten Percent Holder, the
term of the Option shall be five years from the date of grant thereof or such
shorter term as may be provided in the Option Agreement.
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8. [RESERVED.]
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 such price as is determined
by the Administrator and set forth in the Option Agreement, but shall be subject
to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who at the time of grant is a
Ten Percent Holder, the per Share exercise price shall be no less than 110% of
the Fair Market Value per Share on the date of grant; or
(B) granted to any other Employee, 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
(A) granted prior to the date, if any, on which the
Common Stock becomes a Listed Security to a person who is at the time of grant
is a Ten Percent Holder, the per Share exercise price shall be no less than 110%
of the Fair Market Value per Share on the date of grant if required by the
Applicable Laws and, if not so required, shall be such price as is determined by
the Administrator;
(B) granted prior to the date, if any, on which the
Common Stock becomes a Listed Security to any other eligible person, the per
Share exercise price shall be no less than 85% of the Fair Market Value per
Share on the date of grant if required by the Applicable Laws and, if not so
required, shall be such price as is determined by the Administrator; or
(C) granted on or after the date, if any, on which the
Common Stock becomes a Listed Security to any eligible person, the per share
Exercise Price shall be such price as determined by the Administrator provided
that if such eligible person is, at the time of the grant of such Option, a
Named Executive of the Company, the per share Exercise Price shall be no less
than 100% of the Fair Market Value on the date of grant if such Option is
intended to qualify as performance-based compensation under Section 162(m) of
the Code.
(iii) Notwithstanding the foregoing, Options may be granted
with a per Share exercise price other than as required above pursuant to a
merger or other corporate transaction.
(b) PERMISSIBLE CONSIDERATION. The consideration to be paid for the
Shares to be issued upon exercise of an Option, including the method of payment,
shall be determined by the Administrator (and, in the case of an Incentive Stock
Option, shall be determined at the time of grant) and may consist entirely of
(1) cash; (2) check; (3) delivery of Optionee's promissory note with such
recourse, interest, security and redemption provisions as the Administrator
determines to be appropriate (subject to the provisions of Section 153 of the
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Delaware General Corporation Law); (4) cancellation of indebtedness; (5) other
Shares that have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which the Option is exercised,
provided that in the case of Shares acquired, directly or indirectly, from the
Company, such Shares must have been owned by the Optionee for more than six
months on the date of surrender (or such other period as may be required to
avoid the Company's incurring an adverse accounting charge); (6) delivery of a
properly executed exercise notice together with such other documentation as the
Administrator and a securities broker approved by the Company shall require to
effect exercise of the Option and prompt delivery to the Company of the sale or
loan proceeds required to pay the exercise price and any applicable withholding
taxes; or (7) any combination of the foregoing methods of payment. In making its
determination as to the type of consideration to accept, the Administrator shall
consider if acceptance of such consideration may be reasonably expected to
benefit the Company and the Administrator may, in its sole discretion, refuse to
accept a particular form of consideration at the time of any Option exercise.
10. EXERCISE OF OPTION.
(a) GENERAL.
(i) EXERCISABILITY. Any Option granted hereunder shall be
exercisable at such times and under such conditions as determined by the
Administrator, consistent with the term of the Plan and reflected in the Option
Agreement, including vesting requirements and/or performance criteria with
respect to the Company and/or the Optionee; provided however that, if required
by the Applicable Laws, any Option granted prior to the date, if any, upon which
the Common Stock becomes a Listed Security shall become exercisable at the rate
of at least 20% per year over five years from the date the Option is granted. In
the event that any of the Shares issued upon exercise of an Option (which
exercise occurs prior to the date, if any, upon which the Common Stock becomes a
Listed Security) should be subject to a right of repurchase in the Company's
favor, such repurchase right shall, if required by the Applicable Laws, lapse at
the rate of at least 20% per year over five years from the date the Option is
granted. Notwithstanding the above, in the case of an Option granted to an
officer, Director or Consultant of the Company or any Parent, Subsidiary or
Affiliate of the Company, the Option may become fully exercisable, or a
repurchase right, if any, in favor of the Company shall lapse, at any time or
during any period established by the Administrator. The Administrator shall have
the discretion to determine whether and to what extent the vesting of Options
shall be tolled during any unpaid leave of absence; provided, however, that in
the absence of such determination, vesting of Options shall be tolled during any
such leave.
(ii) MINIMUM EXERCISE REQUIREMENTS. An Option may not be
exercised for a fraction of a Share. The Administrator may require that an
Option be exercised as to a minimum number of Shares, provided that such
requirement shall not prevent an Optionee from exercising the full number of
Shares as to which the Option is then exercisable.
(iii) PROCEDURES FOR AND RESULTS OF EXERCISE. An Option shall
be deemed exercised when written notice of such exercise has been given to the
Company in accordance with the terms of the Option by the person entitled to
exercise the Option and the Company has received full payment for the Shares
with respect to which the Option is exercised.
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Full payment may, as authorized by the Administrator, consist of any
consideration and method of payment allowable under Section 9(b) of the Plan,
provided that the Administrator may, in its sole discretion, refuse to accept
any form of consideration at the time of any Option exercise.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares that thereafter may be 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.
(iv) RIGHTS AS STOCKHOLDER. Until the issuance of the Shares
(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
Stock, notwithstanding the exercise of the Option. No adjustment will be made
for a dividend or other right for which the record date is prior to the date the
stock certificate is issued, except as provided in Section 14 of the Plan.
(b) TERMINATION OF EMPLOYMENT OR CONSULTING RELATIONSHIP. Except as
otherwise set forth in this Section 10(b), the Administrator shall establish and
set forth in the applicable Option Agreement the terms and conditions upon which
an Option shall remain exercisable, if at all, following termination of an
Optionee's Continuous Service Status, which provisions may be waived or modified
by the Administrator at any time. To the extent that the Optionee is not
entitled to exercise an Option at the date of his or her termination of
Continuous Service Status, or if the Optionee (or other person entitled to
exercise the Option) does not exercise the Option to the extent so entitled
within the time specified in the Option Agreement or below (as applicable), the
Option shall terminate and the Optioned Stock underlying the unexercised portion
of the Option shall revert to the Plan. In no event may any Option be exercised
after the expiration of the Option term as set forth in the Option Agreement
(and subject to Section 7).
The following provisions (1) shall apply to the extent an Option
Agreement does not specify the terms and conditions upon which an Option shall
terminate upon termination of an Optionee's Continuous Service Status, and (2)
establish the minimum post-termination exercise periods that may be set forth in
an Option Agreement:
(i) TERMINATION OTHER THAN UPON DISABILITY OR DEATH OR FOR
CAUSE (AS DEFINED IN SUBPARAGRAPH (IV) BELOW). In the event of termination of an
Optionee's Continuous Service Status, such Optionee may exercise an Option for
three months following such termination to the extent the Optionee was entitled
to exercise it at the date of such termination. No termination shall be deemed
to occur and this Section 10(b)(i) shall not apply if (i) the Optionee is a
Consultant who becomes an Employee, or (ii) the Optionee is an Employee who
becomes a Consultant.
(ii) DISABILITY OF OPTIONEE. In the event of termination of an
Optionee's Continuous Service Status as a result of his or her disability
(including a disability within the meaning of Section 22(e)(3) of the Code),
such Optionee may exercise an Option at any time within six months following
such termination to the extent the Optionee was entitled to exercise it at the
date of such termination.
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(iii) DEATH OF OPTIONEE. In the event of the death of an
Optionee during the period of Continuous Service Status since the date of grant
of the Option, or within thirty days following termination of Optionee's
Continuous Service Status, the Option may be exercised by Optionee's estate or
by a person who acquired the right to exercise the Option by bequest or
inheritance at any time within twelve months following the date of death, but
only to the extent of the right to exercise that had accrued at the date of
death or, if earlier, the date the Optionee's Continuous Service Status
terminated.
(iv) TERMINATION FOR CAUSE. In the event of termination of an
Optionee's Continuous Service Status for Cause (as defined below), any Option
(including any exercisable portion thereof) held by such Optionee shall
immediately terminate in its entirety upon first notification to the Optionee of
termination of the Optionee's Continuous Service Status. For purposes of this
Agreement, "Cause" for termination of a Participant's Continuous Service Status
will exist if the Participant is terminated for any of the following reasons:
(i) Participant's willful failure substantially to perform his or her duties and
responsibilities to the Company or deliberate violation of a Company policy;
(ii) Participant's commission of any act of fraud, embezzlement, dishonesty or
any other willful misconduct that has caused or is reasonably expected to result
in material injury to the Company; (iii) unauthorized use or disclosure by
Participant of any proprietary information or trade secrets of the Company or
any other party to whom the Participant owes an obligation of nondisclosure as a
result of his or her relationship with the Company; or (iv) Participant's
willful breach of any of his or her obligations under any written agreement or
covenant with the Company. The determination as to whether a Participant is
being terminated for Cause shall be made in good faith by the Company and shall
be final and binding on the Participant. The foregoing definition does not in
any way limit the Company's ability to terminate a Participant's employment or
consulting relationship at any time as provided in Section 5(d) of this
Agreement , and the term "Company" will be interpreted to include any
Subsidiary, Parent, Affiliate or successor thereto, if appropriate.
If an Optionee's employment or consulting relationship with
the Company is suspended pending an investigation of whether the Optionee shall
be terminated for Cause, all the Optionee's rights under any Option likewise
shall be suspended during the investigation period and the Optionee shall have
no right to exercise any Option. This Section 10(b)(iv) shall apply with equal
effect to vested Shares acquired upon exercise of an Option granted prior to the
date, if any, upon which the Common Stock becomes a Listed Security to a person
other than an officer, Director or Consultant, in that the Company shall have
the right to repurchase such Shares from the Participant upon the following
terms: (A) the repurchase is made within 90 days of termination of the
Participant's Continuous Service Status for Cause at the Fair Market Value of
the Shares as of the date of termination, (B) consideration for the repurchase
consists of cash or cancellation of purchase money indebtedness, and (C) the
repurchase right terminates upon the effective date of the Company's initial
public offering of its Common Stock. With respect to vested Shares issued upon
exercise of an Option granted to any officer, Director or Consultant, the
Company's right to repurchase such Shares upon termination of the Participant's
Continuous Service Status for Cause shall be made at the Participant's original
cost for the Shares and shall be effected pursuant to such terms and conditions,
and at such time, as the Administrator shall determine. Nothing in this Section
10(b)(iv) shall in any way limit the Company's right to purchase unvested Shares
issued upon exercise of an Option as set forth in the applicable Option
Agreement.
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(c) BUYOUT PROVISIONS. The Administrator may at any time offer to
buy out for a payment in cash or Shares an Option previously granted under the
Plan based on such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer is made.
11. STOCK PURCHASE RIGHTS.
(a) RIGHTS TO PURCHASE. When the Administrator determines that it
will offer Stock Purchase Rights under the Plan, it shall advise the offeree in
writing of the terms, conditions and restrictions related to the offer,
including the number of Shares that such person shall be entitled to purchase,
the price to be paid, and the time within which such person must accept such
offer. In the case of a Stock Purchase Right granted prior to the date, if any,
on which the Common Stock becomes a Listed Security and if required by the
Applicable Laws at that time, the purchase price of Shares subject to such Stock
Purchase Rights shall not be less than 85% of the Fair Market Value of the
Shares as of the date of the offer, or, in the case of a Ten Percent Holder, the
price shall not be less than 100% of the Fair Market Value of the Shares as of
the date of the offer. If the Applicable Laws do not impose the requirements set
forth in the preceding sentence and with respect to any Stock Purchase Rights
granted after the date, if any, on which the Common Stock becomes a Listed
Security, the purchase price of Shares subject to Stock Purchase Rights shall be
as determined by the Administrator. The offer to purchase Shares subject to
Stock Purchase Rights shall be accepted by execution of a Restricted Stock
Purchase Agreement in the form determined by the Administrator.
(b) REPURCHASE OPTION. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment with the Company for any reason (including death or
disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original purchase price paid by
the purchaser and may be paid by cancellation of any indebtedness of the
purchaser to the Company. The repurchase option shall lapse at such rate as the
Administrator may determine, provided that with respect to a Stock Purchase
Right granted prior to the date, if any, on which the Common Stock becomes a
Listed Security to a purchaser who is not an officer, Director or Consultant of
the Company or of any Parent or Subsidiary of the Company, it shall lapse at a
minimum rate of 20% per year if required by the Applicable Laws.
(c) OTHER PROVISIONS. The Restricted Stock Purchase Agreement shall
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion. In
addition, the provisions of Restricted Stock Purchase Agreements need not be the
same with respect to each purchaser.
(d) RIGHTS AS A STOCKHOLDER. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 14
of the Plan.
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12. TAXES.
(a) As a condition of the exercise of an Option or Stock Purchase
Right granted under the Plan, the Participant (or in the case of the
Participant's death, the person exercising the Option or Stock Purchase Right)
shall make such arrangements as the Administrator may require for the
satisfaction of any applicable federal, state, local or foreign withholding tax
obligations that may arise in connection with the exercise of the Option or
Stock Purchase Right and the issuance of Shares. The Company shall not be
required to issue any Shares under the Plan until such obligations are
satisfied. If the Administrator allows the withholding or surrender of Shares to
satisfy a Participant's tax withholding obligations under this Section 12
(whether pursuant to Section 12(c), (d) or (e), or otherwise), the Administrator
shall not allow Shares to be withheld in an amount that exceeds the minimum
statutory withholding rates for federal and state tax purposes, including
payroll taxes.
(b) In the case of an Employee and in the absence of any other
arrangement, the Employee shall be deemed to have directed the Company to
withhold or collect from his or her compensation an amount sufficient to satisfy
such tax obligations from the next payroll payment otherwise payable after the
date of an exercise of the Option or Stock Purchase Right.
(c) This Section 12(c) shall apply only after the date, if any, upon
which the Common Stock becomes a Listed Security. In the case of Participant
other than an Employee (or in the case of an Employee where the next payroll
payment is not sufficient to satisfy such tax obligations, with respect to any
remaining tax obligations), in the absence of any other arrangement and to the
extent permitted under the Applicable Laws, the Participant shall be deemed to
have elected to have the Company withhold from the Shares to be issued upon
exercise of the Option or Stock Purchase Right that number of Shares having a
Fair Market Value determined as of the applicable Tax Date (as defined below)
equal to the amount required to be withheld. For purposes of this Section 12,
the Fair Market Value of the Shares to be withheld shall be determined on the
date that the amount of tax to be withheld is to be determined under the
Applicable Laws (the "Tax Date").
(d) If permitted by the Administrator, in its discretion, a
Participant may satisfy his or her tax withholding obligations upon exercise of
an Option or Stock Purchase Right by surrendering to the Company Shares that
have a Fair Market Value determined as of the applicable Tax Date equal to the
amount required to be withheld. In the case of shares previously acquired from
the Company that are surrendered under this Section 12(d), such Shares must have
been owned by the Participant for more than six (6) months on the date of
surrender (or such other period of time as is required for the Company to avoid
adverse accounting charges).
(e) Any election or deemed election by a Participant to have Shares
withheld to satisfy tax withholding obligations under Section 12(c) or (d) above
shall be irrevocable as to the particular Shares as to which the election is
made and shall be subject to the consent or disapproval of the Administrator.
Any election by a Participant under Section 12(d) above must be made on or prior
to the applicable Tax Date.
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(f) In the event an election to have Shares withheld is made by a
Participant and the Tax Date is deferred under Section 83 of the Code because no
election is filed under Section 83(b) of the Code, the Participant shall receive
the full number of Shares with respect to which the Option or Stock Purchase
Right is exercised but such Participant shall be unconditionally obligated to
tender back to the Company the proper number of Shares on the Tax Date.
13. NON-TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS.
(a) GENERAL. Except as set forth in this Section 13, Options and
Stock Purchase Rights 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. The designation of a beneficiary by an Optionee will
not constitute a transfer. An Option or Stock Purchase Right may be exercised,
during the lifetime of the holder of an Option or Stock Purchase Right, only by
such holder or a transferee permitted by this Section 13.
(b) LIMITED TRANSFERABILITY RIGHTS. Notwithstanding anything else in
this Section 13, prior to the date, if any, on which the Common Stock becomes a
Listed Security, the Administrator may in its discretion grant Nonstatutory
Stock Options that may be transferred by instrument to an inter vivos or
testamentary trust in which the Options are to be passed to beneficiaries upon
the death of the trustor (settlor) or by gift to "Immediate Family" (as defined
below), on such terms and conditions as the Administrator deems appropriate.
Following the date, if any, on which the Common Stock becomes a Listed Security,
the Administrator may in its discretion grant transferable Nonstatutory Stock
Options pursuant to Option Agreements specifying the manner in which such
Nonstatutory Stock Options are transferable. "Immediate Family" means any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, and shall include adoptive relationships.
14. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, MERGER OR CERTAIN OTHER
TRANSACTIONS.
(a) CHANGES IN CAPITALIZATION. Subject to any required action by the
stockholders of the Company, the number of Shares of Common Stock covered by
each outstanding Option or Stock Purchase Right, and the number of Shares of
Common Stock that have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or that have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per Share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued Shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination, recapitalization or reclassification of the Common Stock, or any
other increase or decrease in the number of issued Shares of Common Stock
effected without receipt of consideration by 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 Administrator, 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,
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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 Shares of Common Stock subject to an Option or Stock Purchase Right.
(b) DISSOLUTION OR LIQUIDATION. In the event of the dissolution or
liquidation of the Company, each Option and Stock Purchase Right will terminate
immediately prior to the consummation of such action, unless otherwise
determined by the Administrator.
(c) CORPORATE TRANSACTION. In the event of a Corporate Transaction,
each outstanding Option or Stock Purchase Right shall be assumed or an
equivalent option or right shall be substituted by such successor corporation or
a parent or subsidiary of such successor corporation (the "Successor
Corporation"), unless the Successor Corporation does not agree to assume the
award or to substitute an equivalent option or right. If the Successor
Corporation does not agree to such assumption or substitution, (i) the vesting
of each Option shall accelerate and the Options shall become exercisable in full
(including with respect to Shares as to which an Option would not otherwise be
vested and exercisable), and any repurchase right in favor of the Company with
respect to any Shares purchased upon exercise of a Stock Purchase Right or early
exercise of an Option shall lapse in full, immediately prior to consummation of
the transaction, and (ii) each Participant shall be provided with at least five
(5) business days in which to exercise his or her Options or Stock Purchase
Right subject to such conditions as the Administrator shall determine, and (iii)
such Options and Stock Purchase Rights shall terminate upon the later of the
termination of such exercise period or the consummation of the transaction.
For purposes of this Section 14(c), an Option or a Stock Purchase
Right shall be considered assumed, without limitation, if, at the time of
issuance of the stock or other consideration upon a Corporate Transaction or a
Change of Control, as the case may be, each holder of an Option or Stock
Purchase Right would be entitled to receive upon exercise of the award the same
number and kind of shares of stock or the same amount of property, cash or
securities as such holder would have been entitled to receive upon the
occurrence of the transaction if the holder had been, immediately prior to such
transaction, the holder of the number of Shares of Common Stock covered by the
award at such time (after giving effect to any adjustments in the number of
Shares covered by the Option or Stock Purchase Right as provided for in this
Section 14); provided that if such consideration received in the transaction is
not solely common stock of the Successor Corporation, the Administrator may,
with the consent of the Successor Corporation, provide for the consideration to
be received upon exercise of the award to be solely common stock of the
Successor Corporation equal to the Fair Market Value of the per Share
consideration received by holders of Common Stock in the transaction.
(d) CERTAIN DISTRIBUTIONS. 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 Administrator may, in its discretion,
appropriately adjust the price per Share of Common Stock covered by each
outstanding Option or Stock Purchase Right to reflect the effect of such
distribution.
15. TIME OF GRANTING OPTIONS AND STOCK PURCHASE RIGHTS. The date of grant
of an Option or Stock Purchase Right shall, for all purposes, be the date on
which the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is
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determined by the Administrator, provided that in the case of any Incentive
Stock Option, the grant date shall be the later of the date on which the
Administrator makes the determination granting such Incentive Stock Option or
the date of commencement of the Optionee's employment relationship with the
Company. Notice of the determination shall be given to each Employee or
Consultant to whom an Option or Stock Purchase Right is so granted within a
reasonable time after the date of such grant.
16. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AUTHORITY TO AMEND OR TERMINATE. The Board may at any time
amend, alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation (other than an adjustment pursuant to Section 14
above) shall be made that would materially and adversely affect the rights of
any Optionee or holder of Stock Purchase Rights under any outstanding grant,
without his or her consent. In addition, to the extent necessary and desirable
to comply with the Applicable Laws, the Company shall obtain stockholder
approval of any Plan amendment in such a manner and to such a degree as
required.
(b) EFFECT OF AMENDMENT OR TERMINATION. No amendment or termination
of the Plan shall materially and adversely affect Options or Stock Purchase
Rights already granted, unless mutually agreed otherwise between the Optionee or
holder of the Stock Purchase Rights and the Administrator, which agreement must
be in writing and signed by the Optionee or holder and the Company.
17. CONDITIONS UPON ISSUANCE OF SHARES. Notwithstanding any other
provision of the Plan or any agreement entered into by the Company pursuant to
the Plan, the Company shall not be obligated, and shall have no liability for
failure, to issue or deliver any Shares under the Plan unless such issuance or
delivery would comply with the Applicable Laws, with such compliance determined
by the Company in consultation with its legal counsel. As a condition to the
exercise of an Option or Stock Purchase Right, the Company may require the
person exercising the award to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by law.
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. AGREEMENTS. Options and Stock Purchase Rights shall be evidenced by
Option Agreements and Restricted Stock Purchase Agreements, respectively, in
such form(s) as the Administrator shall from time to time approve.
20. STOCKHOLDER APPROVAL. If required by the Applicable Laws, continuance
of the Plan shall be subject to approval by the stockholders of the Company
within twelve (12) months before or after the date the Plan is adopted. Such
stockholder approval shall be obtained in the manner and to the degree required
under the Applicable Laws.
21. INFORMATION AND DOCUMENTS TO OPTIONEES AND PURCHASERS. Prior to the
date, if any, upon which the Common Stock becomes a Listed Security and if
required by the Applicable
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Laws, the Company shall provide financial statements at least annually to each
Optionee and to each individual who acquired Shares pursuant to the Plan, during
the period such Optionee or purchaser has one or more Options or Stock Purchase
Rights outstanding, and in the case of an individual who acquired Shares
pursuant to the Plan, during the period such individual owns such Shares. The
Company shall not be required to provide such information if the issuance of
Options or Stock Purchase Rights under the Plan is limited to key employees
whose duties in connection with the Company assure their access to equivalent
information.
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