EXHIBIT 10.4
PRIMUS KNOWLEDGE SOLUTIONS, INC.
1999 AMENDED AND RESTATED NONOFFICER EMPLOYEE
STOCK COMPENSATION PLAN
SECTION 1. PURPOSE
The purpose of the Primus Knowledge Solutions, Inc. 1999 Nonofficer
Employee Stock Compensation Plan (the "Plan") is to enhance the long-term
shareholder value of Primus Knowledge Solutions, Inc., a Washington corporation
(the "Company"), by offering opportunities to selected persons to participate in
the Company's growth and success, and to encourage them to remain in the service
of the Company and its Related Corporations (as defined in Section 2) and to
acquire and maintain stock ownership in the Company.
SECTION 2. DEFINITIONS
For purposes of the Plan, the following terms shall be defined as set
forth below:
"AWARD" means an award or grant made pursuant to the Plan, including,
without limitation, awards or grants of Stock Awards and Options, or any
combination of the foregoing.
"BOARD" means the Board of Directors of the Company.
"CAUSE" means dishonesty, fraud, misconduct, unauthorized use or
disclosure of confidential information or trade secrets, or conviction or
confession of a crime punishable by law (except minor violations), in each case
as determined by the Plan Administrator, and its determination shall be
conclusive and binding.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COMMON STOCK" means the common stock, par value $.025 per share, of the
Company.
"CORPORATE TRANSACTION" means any of the following events:
(a) Consummation of any merger or consolidation of the Company with or
into another corporation; or
(b) Consummation of any sale, lease, exchange or other transfer in one
transaction or a series of related transactions of all or substantially all of
the Company's assets other than a transfer of the Company's assets to a
majority-owned subsidiary corporation (as defined in Section 8.3) of the
Company.
"DISABILITY," unless otherwise defined by the Plan Administrator, means a
mental or physical impairment of the Participant that is expected to result in
death or that has lasted or is expected to last for a continuous period of 12
months or more and that causes the Participant to be unable, in the opinion of
the Company, to perform his or her duties for the Company or a Related
Corporation and to be engaged in any substantial gainful activity.
"EFFECTIVE DATE" has the meaning set forth in Section 15.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FAIR MARKET VALUE" shall be as established in good faith by the Plan
Administrator or (a) if the Common Stock is listed on the Nasdaq National
Market, the average of the high and low per share sales prices for the Common
Stock as reported by the Nasdaq National Market for a single trading day or (b)
if the Common Stock is listed on the New York Stock Exchange or the American
Stock Exchange, the average of the high and low per share sales prices for the
Common Stock as such price is officially quoted in the composite tape of
transactions on such exchange for a single trading day. If there is no such
reported price for the Common Stock for the date in question, then such price on
the last preceding date for which such price exists shall be determinative of
Fair Market Value.
"GRANT DATE" means the date on which the Plan Administrator completes the
corporate action relating to the grant of an Award and all conditions precedent
to the grant have been satisfied, provided that conditions to the exercisability
or vesting of Awards shall not defer the Grant Date.
"OPTION" means an option to purchase Common Stock granted under Section 7
that is not intended to qualify as an incentive stock option as that term is
defined in Section 422 of the Code.
"OPTION TERM" has the meaning set forth in Section 7.3.
"PARENT" means any entity, whether now or hereafter existing, that
directly or indirectly controls the Company.
"PARTICIPANT" means (a) the person to whom an Award is granted; (b) for a
Participant who has died, the personal representative of the Participant's
estate, the person(s) to whom the Participant's rights under the Award have
passed by will or by the applicable laws of descent and distribution, or the
beneficiary designated in accordance with Section 10; or (c) the person(s) to
whom an Award has been transferred in accordance with Section 10.
"PLAN ADMINISTRATOR" means the Board or any committee or committees
designated by the Board or any person to whom the Board has delegated authority
to administer the Plan under Section 3.1.
"RELATED CORPORATION" means any Parent or Subsidiary of the Company.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"STOCK AWARD" means shares of Common Stock or units denominated in Common
Stock granted under Section 8, the rights of ownership of which may be subject
to restrictions prescribed by the Plan Administrator.
"SUBSIDIARY" means any entity that is directly or indirectly controlled by
the Company.
"SUCCESSOR CORPORATION" has the meaning set forth in Section 11.3.
"TERMINATION DATE" has the meaning set forth in Section 7.6.
SECTION 3. ADMINISTRATION
3.1 PLAN ADMINISTRATOR
The Plan shall be administered by the Board and/or a committee or
committees (which term includes subcommittees) appointed by, and consisting of
two or more members of, the Board (a "Plan Administrator"). The Board may
delegate the responsibility for administering the Plan with respect to
designated classes of eligible persons to different committees consisting of two
or more members of the Board, subject to such limitations as the Board deems
appropriate. Committee members shall serve for such term as the Board may
determine, subject to removal by the Board at any time. To the extent consistent
with applicable law, the Board may authorize a senior executive officer of the
Company to grant Awards to specified eligible persons, within the limits
specifically prescribed by the Board.
3.2 ADMINISTRATION AND INTERPRETATION BY PLAN ADMINISTRATOR
Except for the terms and conditions explicitly set forth in the Plan, the
Plan Administrator shall have exclusive authority, in its discretion, to
determine all matters relating to Awards under the Plan, including the selection
of individuals to be granted Awards, the type of Awards, the number of shares of
Common Stock subject to an Award, all terms, conditions, restrictions and
limitations, if any, of an Award and the terms of any instrument that evidences
the Award. The Plan Administrator shall also have exclusive authority to
interpret the Plan and the terms of any instrument evidencing the Award and may
from time to time adopt, and change, rules and regulations of general
application for the Plan's administration. The Plan Administrator's
interpretation of the Plan and its rules and regulations, and all actions taken
and determinations made by the Plan Administrator pursuant to the Plan, shall be
conclusive and binding on all parties involved or affected. The Plan
Administrator may delegate administrative duties to such of the Company's
officers as it so determines.
SECTION 4. STOCK SUBJECT TO THE PLAN
4.1 AUTHORIZED NUMBER OF SHARES
Subject to adjustment from time to time as provided in Section 11.1, the
number of shares of Common Stock that shall be available for issuance under the
Plan shall be 2,000,000 shares.
No more than 30% of the Shares authorized for issuance under the Plan may
be issued to officers or directors of the Company.
Shares issued under the Plan shall be drawn from authorized and unissued
shares or shares now held or subsequently acquired by the Company.
4.2 REUSE OF SHARES
Any shares of Common Stock that have been made subject to an Award that
cease to be subject to the Award (other than by reason of exercise or payment of
the Award to the extent it is
exercised for or settled in vested and nonforfeitable shares) shall again be
available for issuance in connection with future grants of Awards under the
Plan.
SECTION 5. ELIGIBILITY
Awards may be granted under the Plan to any individual who, at the time of
the grant is an employee, director, consultant, agent, advisor, or independent
contractor who provides services to the Company or its Related Corporations;
provided, however, that such Participants render bona fide services that are not
in connection with the offer and sale of the Company's securities in a
capital-raising transaction and do not directly or indirectly promote or
maintain a market for the Company's securities.
SECTION 6. AWARDS
6.1 FORM AND GRANT OF AWARDS
The Plan Administrator shall have the authority, in its sole discretion,
to determine the type or types of Awards to be made under the Plan. Such Awards
may include, but are not limited to Options and Stock Awards. Awards may be
granted singly or in combination.
6.2 SETTLEMENT OF AWARDS
The Company may settle Awards through the delivery of shares of Common
Stock, cash payments, the granting of replacement Awards or any combination
thereof as the Plan Administrator shall determine. Any Award settlement,
including payment deferrals, may be subject to such conditions, restrictions and
contingencies as the Plan Administrator shall determine. The Plan Administrator
may permit or require the deferral of any Award payment, 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. The Plan Administrator may at any time
offer to buy out, for a payment in cash or Common Stock, an Award previously
granted based on such terms and conditions as the Plan Administrator shall
establish and communicate to the Participant at the time such offer is made.
6.3 ACQUIRED COMPANY AWARDS
Notwithstanding anything in the Plan to the contrary, the Plan
Administrator may grant Awards under the Plan in substitution for awards issued
under other plans, or assume under the Plan awards issued under other plans, if
the other plans are or were plans of other acquired entities ("Acquired
Entities") (or the parent of the Acquired Entity) and the new Award is
substituted, or the old award is assumed, by reason of a merger, consolidation,
acquisition of property or of stock, reorganization or liquidation (the
"Acquisition Transaction"). In the event that a written agreement pursuant to
which the Acquisition Transaction is completed is approved by the Board and said
agreement sets forth the terms and conditions of the substitution for or
assumption of outstanding awards of the Acquired Entity, said terms and
conditions shall be deemed to be the action of the Plan Administrator without
any further action by the Plan Administrator, except as may be required for
compliance with Rule 16b-3 under the Exchange Act, and the persons holding such
awards shall be deemed to be Participants.
SECTION 7. AWARDS OF OPTIONS
7.1 GRANT OF OPTIONS
The Plan Administrator is authorized under the Plan, in its sole
discretion, to issue Options.
7.2 OPTION EXERCISE PRICE
The exercise price for shares purchased under an Option shall be as
determined by the Plan Administrator, but shall not be less than 85% of the Fair
Market Value of the Common Stock on the Grant Date.
7.3 TERM OF OPTIONS
The term of each Option (the "Option Term") shall be as established by the
Plan Administrator or, if not so established, shall be ten years from the Grant
Date.
7.4 EXERCISE OF OPTIONS
The Plan Administrator shall establish and set forth in each instrument
that evidences an Option the time at which, or the installments in which, the
Option shall vest and become exercisable, which provisions may be waived or
modified by the Plan Administrator at any time. If not so established in the
instrument evidencing the Option, the Option shall vest and become exercisable
according to the following schedule, which may be waived or modified by the Plan
Administrator at any time:
PERIOD OF PARTICIPANT'S CONTINUOUS
EMPLOYMENT OR SERVICE WITH THE COMPANY
OR ITS RELATED CORPORATIONS FROM THE PERCENT OF TOTAL OPTION
OPTION GRANT DATE THAT IS VESTED AND EXERCISABLE
- --------------------------------------- ------------------------------
After 1 year 25%
Each additional one-month period of
continuous service completed thereafter An additional 1/48
After 4 years 100%
The Plan Administrator may adjust the vesting schedule of an Option held
by a Participant who works less than "full-time" as that term is defined by the
Plan Administrator.
To the extent that an Option has vested and become exercisable, the Option
may be exercised from time to time by delivery to the Company of a written stock
option exercise agreement or notice, in a form and in accordance with procedures
established by the Plan Administrator, setting forth the number of shares with
respect to which the Option is being exercised, the restrictions imposed on the
shares purchased under such exercise agreement, if any, and such representations
and agreements as may be required by the Plan Administrator, accompanied by
payment in full as described in Section 7.5. An Option may not be exercised as
to less than a reasonable number of shares at any one time, as determined by the
Plan Administrator.
7.5 PAYMENT OF EXERCISE PRICE
The exercise price for shares purchased under an Option shall be paid
in full to the Company by delivery of consideration equal to the product of the
Option exercise price and the number of shares purchased. Such consideration
must be paid in cash or by check or, unless the Plan Administrator in its sole
discretion determines otherwise, either at the time the Option is granted or at
any time before it is exercised, in any combination of
(a) cash or check;
(b) tendering (either actually or, if and so long as the Common Stock is
registered under Section 12(b) or 12(g) of the Exchange Act, by attestation)
shares of Common Stock already owned by the Participant for at least six months
(or any shorter period necessary to avoid a charge to the Company's earnings for
financial reporting purposes) having a Fair Market Value on the day prior to the
exercise date equal to the aggregate Option exercise price;
(c) if and so long as the Common Stock is registered under Section 12(b)
or 12(g) of the Exchange Act, delivery of a properly executed exercise notice,
together with irrevocable instructions, to (i) a brokerage firm designated by
the Company to deliver promptly to the Company the aggregate amount of sale or
loan proceeds to pay the Option exercise price and any withholding tax
obligations that may arise in connection with the exercise and (ii) the Company
to deliver the certificates for such purchased shares directly to such brokerage
firm, all in accordance with the regulations of the Federal Reserve Board; or
(d) such other consideration as the Plan Administrator may permit.
In addition, to assist a Participant (including a Participant who is an
officer or a director of the Company) in acquiring shares of Common Stock
pursuant to an Award granted under the Plan, the Plan Administrator, in its sole
discretion, may authorize, either at the Grant Date or at any time before the
acquisition of Common Stock pursuant to the Award, (i) the payment by a
Participant of a full-recourse promissory note, (ii) the payment by the
Participant of the purchase price, if any, of the Common Stock in installments,
or (iii) the guarantee by the Company of a loan obtained by the Participant from
a third party. Subject to the foregoing, the Plan Administrator shall in its
sole discretion specify the terms of any loans, installment payments or loan
guarantees, including the interest rate and terms of and security for repayment.
7.6 POST-TERMINATION EXERCISES
The Plan Administrator shall establish and set forth in each instrument
that evidences an Option whether the Option shall continue to be exercisable,
and the terms and conditions of such exercise, if a Participant ceases to be
employed by, or to provide services to, the Company or its Related Corporations,
which provisions may be waived or modified by the Plan Administrator at any
time. If not so established in the instrument evidencing the Option, the Option
shall be exercisable according to the following terms and conditions, which may
be waived or modified by the Plan Administrator at any time:
(a) Any portion of an Option that is not vested and exercisable on the
date of termination of the Participant's employment or service relationship (the
"Termination Date") shall expire on such date.
(b) Any portion of an Option that is vested and exercisable on the
Termination Date shall expire upon the earliest to occur of
(i) the last day of the Option Term;
(ii) if the Participant's Termination Date occurs for reasons other
than Cause, death or Disability, the three-month anniversary of such Termination
Date; and
(iii) if the Participant's Termination Date occurs by reason of
Disability or death, the one-year anniversary of such Termination Date.
Notwithstanding the foregoing, if the Participant dies after the Termination
Date while the Option is otherwise exercisable, the portion of the Option that
is vested and exercisable on such Termination Date shall expire upon the earlier
to occur of (y) the last day of the Option Term and (z) the first anniversary of
the date of death, unless the Plan Administrator determines otherwise.
Also notwithstanding the foregoing, in case of termination of the
Participant's employment or service relationship for Cause, the Option shall
automatically expire upon first notification to the Participant of such
termination, unless the Plan Administrator determines otherwise. If a
Participant's employment or service relationship with the Company is suspended
pending an investigation of whether the Participant shall be terminated for
Cause, all the Participant's rights under any Option likewise shall be suspended
during the period of investigation.
A Participant's transfer of employment or service relationship between or
among the Company and its Related Corporations, or a change in status from an
employee to a consultant, agent, advisor or independent contractor, shall not be
considered a termination of employment or service relationship for purposes of
this Section 7. Employment or service relationship shall be deemed to continue
while the Participant is on a bona fide leave of absence, if such leave was
approved by the Company or a Related Corporation in writing and if continued
crediting of service for purposes of this Section 7 is expressly required by the
terms of such leave or by applicable law (as determined by the Company). The
effect of a Company-approved leave of absence on the terms and conditions of an
Option shall be determined by the Plan Administrator, in its sole discretion.
SECTION 8. STOCK AWARDS
8.1 GRANT OF STOCK AWARDS
The Plan Administrator is authorized to make Awards of Common Stock or
Awards denominated in units of Common Stock on such terms and conditions and
subject to such restrictions, if any (which may be based on continuous service
with the Company or the achievement of performance goals), as the Plan
Administrator shall determine, in its sole discretion, which terms, conditions
and restrictions shall be set forth in the instrument evidencing the Award. The
terms, conditions and restrictions that the Plan Administrator shall have the
power to determine shall include, without limitation, the manner in which shares
subject to Stock Awards are held during the periods they are subject to
restrictions and the circumstances under which forfeiture of the Stock Award
shall occur by reason of termination of the Participant's employment or service
relationship.
8.2 ISSUANCE OF SHARES
Upon the satisfaction of any terms, conditions and restrictions prescribed
with respect to a Stock Award, or upon the Participant's release from any terms,
conditions and restrictions of a Stock Award, as determined by the Plan
Administrator, the Company shall release, as soon as practicable, to the
Participant or, in the case of the Participant's death, to the personal
representative of the Participant's estate or as the appropriate court directs,
the appropriate number of shares of Common Stock.
8.3 WAIVER OF RESTRICTIONS
Notwithstanding any other provisions of the Plan, the Plan Administrator
may, in its sole discretion, waive the forfeiture period and any other terms,
conditions or restrictions on any Stock Award under such circumstances and
subject to such terms and conditions as the Plan Administrator shall deem
appropriate.
SECTION 9. WITHHOLDING
The Company may require the Participant to pay to the Company the amount
of any withholding taxes that the Company is required to withhold with respect
to the grant, vesting or exercise of any Award. Subject to the Plan and
applicable law, the Plan Administrator may, in its sole discretion, permit the
Participant to satisfy withholding obligations (up to the minimum rate), in
whole or in part, by paying cash, by electing to have the Company withhold
shares of Common Stock or by transferring shares of Common Stock to the Company,
in such amounts as are equivalent to the Fair Market Value of the withholding
obligation. The Company shall have the right to withhold from any Award or any
shares of Common Stock issuable pursuant to an Award or from any cash amounts
otherwise due or to become due from the Company to the Participant an amount
equal to such taxes. The Company may also deduct from any Award any other
amounts due from the Participant to the Company or a Related Corporation.
SECTION 10. ASSIGNABILITY
Awards granted under the Plan and any interest therein may not be
assigned, pledged or transferred by the Participant and may not be made subject
to attachment or similar proceedings otherwise than by will or by the applicable
laws of descent and distribution, and, during the Participant's lifetime, such
Awards may be exercised only by the Participant. Notwithstanding the foregoing,
the Plan Administrator, in its sole discretion, may permit such assignment,
transfer and exercisability and may permit a Participant to designate a
beneficiary who may exercise the Award or receive compensation under the Award
after the Participant's death; provided, however, that any Award so assigned or
transferred shall be subject to all the same terms and conditions contained in
the instrument evidencing the Award.
SECTION 11. ADJUSTMENTS
11.1 ADJUSTMENT OF SHARES
In the event that, at any time or from time to time, a stock dividend,
stock split, spin-off, combination or exchange of shares, recapitalization,
merger, consolidation, distribution to shareholders other than a normal cash
dividend, or other change in the Company's corporate or
capital structure results in (a) the outstanding shares, or any securities
exchanged therefor or received in their place, being exchanged for a different
number or class of securities of the Company or of any other corporation or (b)
new, different or additional securities of the Company or of any other
corporation being received by the holders of shares of Common Stock of the
Company, then the Plan Administrator shall make proportional adjustments in (i)
the maximum number and kind of securities subject to the Plan as set forth in
Section 4.1 and (ii) the number and kind of securities that are subject to any
outstanding Award and the per share price of such securities, without any change
in the aggregate price to be paid therefor. The determination by the Plan
Administrator as to the terms of any of the foregoing adjustments shall be
conclusive and binding. Notwithstanding the foregoing, a dissolution or
liquidation of the Company or a Corporate Transaction shall not be governed by
this Section 11.1 but shall be governed by Sections 11.2 and 11.3, respectively.
11.2 DISSOLUTION OR LIQUIDATION
In the event of the proposed dissolution or liquidation of the Company,
the Plan Administrator shall notify each Participant as soon as practicable
prior to the effective date of such proposed transaction. The Plan Administrator
in its discretion may permit a Participant to exercise an Option until ten days
prior to such transaction with respect to all vested and exercisable shares of
Common Stock covered thereby and with respect to such number of unvested shares
as the Plan Administrator shall determine. In addition, the Plan Administrator
may provide that any forfeiture provision or Company repurchase option
applicable to any Award shall lapse as to such number of shares as the Plan
Administrator shall determine, contingent upon the occurrence of the proposed
dissolution or liquidation at the time and in the manner contemplated. To the
extent an Option has not been previously exercised, the Option shall terminate
automatically immediately prior to the consummation of the proposed action. To
the extent a forfeiture provision applicable to a Stock Award has not been
waived by the Plan Administrator, the Stock Award shall be forfeited
automatically immediately prior to the consummation of the proposed action.
11.3 CORPORATE TRANSACTION
In the event of a Corporate Transaction, except as otherwise provided in
the instrument evidencing the Award, each outstanding Option shall be continued,
assumed or an equivalent option or right substituted by the surviving
corporation, the successor corporation or its parent corporation, as applicable
(the "Successor Corporation"). In the event that the Successor Corporation
refuses to continue, assume or substitute for the Option, the Participant shall
fully vest in and have the right to exercise the Option as to all of the shares
of Common Stock subject thereto, including shares as to which the Option 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 a Corporate
Transaction, the Plan Administrator shall notify the Participant in writing or
electronically that the Option shall be fully vested and exercisable for a
specified time period after the date of such notice, and the Option shall
terminate upon the expiration of such period, in each case conditioned on the
consummation of the Corporate Transaction. For the purposes of this Section
11.3, the Option shall be considered assumed if, following the Corporate
Transaction, the option or right confers the right to purchase or receive, for
each share of Common Stock subject to the Option, immediately prior to the
Corporate Transaction, the consideration (whether stock, cash, or other
securities or property) received in the merger or sale
of assets by holders of Common Stock for each share held on the effective date
of the 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, the Plan
Administrator may, with the consent of the Successor Corporation, provide for
the consideration to be received upon the exercise of the Option, for each share
of Common Stock subject thereto, to be solely common stock of the Successor
Corporation equal in fair market value to the per share consideration received
by holders of Common Stock in the Corporate Transaction. All Options shall
terminate and cease to remain outstanding immediately following the consummation
of the Corporate Transaction, except to the extent assumed by the Successor
Corporation.
In the event of a Corporate Transaction, except as otherwise provided in
the instrument evidencing the Award, the vesting of Shares subject to Stock
Awards shall accelerate, and the forfeiture provisions to which such Shares are
subject shall lapse, if and to the same extent that the vesting of outstanding
Options accelerates in connection with the Corporate Transaction. If unvested
Options are to be assumed, continued or substituted by a Successor Corporation
without acceleration upon the occurrence of a Corporate Transaction, the
forfeiture provisions to which such shares are subject will continue with
respect to shares of the Successor Corporation that may be issued in exchange
for such Shares.
11.4 FURTHER ADJUSTMENT OF AWARDS
Subject to Sections 11.2 and 11.3, the Plan Administrator shall have the
discretion, exercisable at any time before a sale, merger, consolidation,
reorganization, liquidation or change in control of the Company, as defined by
the Plan Administrator, to take such further action as it determines to be
necessary or advisable, and fair and equitable to the Participants, with respect
to Awards. Such authorized action may include (but shall not be limited to)
establishing, amending or waiving the type, terms, conditions or duration of, or
restrictions on, Awards so as to provide for earlier, later, extended or
additional time for exercise, lifting restrictions and other modifications, and
the Plan Administrator may take such actions with respect to all Participants,
to certain categories of Participants or only to individual Participants. The
Plan Administrator may take such action before or after granting Awards to which
the action relates and before or after any public announcement with respect to
such sale, merger, consolidation, reorganization, liquidation or change in
control that is the reason for such action.
11.5 LIMITATIONS
The grant of Awards shall in no way affect the Company's right to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
SECTION 12. MARKET STANDOFF
In connection with any underwritten public offering by the Company of its
equity securities pursuant to an effective registration statement filed under
the Securities Act, a person shall not sell, make any short sale of, loan,
hypothecate, pledge, grant any option for the purchase of, or otherwise dispose
of or transfer for value or otherwise agree to engage in any of the
foregoing transactions with respect to any shares issued pursuant to an Award
granted under the Plan without the prior written consent of the Company or its
underwriters. Such limitations shall be in effect for such period of time as may
be requested by the Company or such underwriters and agreed to by the Company's
officers and directors with respect to their shares; provided, however, that in
no event shall such period exceed 180 days. The limitations of this paragraph
shall in all events terminate two years after the effective date of the
Company's initial public offering. Holders of shares issued pursuant to an Award
granted under the Plan shall be subject to the market standoff provisions of
this paragraph only if the officers and directors of the Company are also
subject to similar arrangements.
In the event of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
Company's outstanding Common Stock effected as a class without the Company's
receipt of consideration, any new, substituted or additional securities
distributed with respect to the purchased shares shall be immediately subject to
the provisions of this Section 12, to the same extent the purchased shares are
at such time covered by such provisions.
In order to enforce the limitations of this Section 12, the Company may
impose stop-transfer instructions with respect to the purchased shares until the
end of the applicable standoff period.
SECTION 13. AMENDMENT AND TERMINATION OF PLAN
13.1 AMENDMENT OF PLAN
The Plan may be amended only by the Board in such respects as it shall
deem advisable.
13.2 TERMINATION OF PLAN
The Board may suspend or terminate the Plan at any time. The Plan shall
have no fixed expiration date.
13.3 CONSENT OF PARTICIPANT
The amendment or termination of the Plan or the amendment of an
outstanding Award shall not, without the Participant's consent, impair or
diminish any rights or obligations under any Award theretofore granted to the
Participant under the Plan. Notwithstanding the foregoing, any adjustments made
pursuant to Section 11 shall not be subject to these restrictions.
SECTION 14. GENERAL
14.1 EVIDENCE OF AWARDS
Awards granted under the Plan shall be evidenced by a written instrument
that shall contain such terms, conditions, limitations and restrictions as the
Plan Administrator shall deem advisable and that are not inconsistent with the
Plan.
14.2 NO INDIVIDUAL RIGHTS
Nothing in the Plan or any Award granted under the Plan shall be deemed to
constitute an employment contract or confer or be deemed to confer on any
Participant any right to continue in the employ of, or to continue any other
relationship with, the Company or any Related Corporation or limit in any way
the right of the Company or any Related Corporation to terminate a Participant's
employment or other relationship at any time, with or without Cause.
14.3 REGISTRATION
Notwithstanding any other provision of the Plan, the Company shall have no
obligation to issue or deliver any shares of Common Stock under the Plan or make
any other distribution of benefits under the Plan unless such issuance, delivery
or distribution would comply with all applicable laws (including, without
limitation, the requirements of the Securities Act), and the applicable
requirements of any securities exchange or similar entity.
The Company shall be under no obligation to any Participant to register
for offering or resale or to qualify for exemption under the Securities Act, or
to register or qualify under state securities laws, any shares of Common Stock,
security or interest in a security paid or issued under, or created by, the
Plan, or to continue in effect any such registrations or qualifications if made.
The Company may issue certificates for shares with such legends and subject to
such restrictions on transfer and stop-transfer instructions as counsel for the
Company deems necessary or desirable for compliance by the Company with federal
and state securities laws.
To the extent that the Plan or any instrument evidencing an Award provides
for issuance of stock certificates to reflect the issuance of shares of Common
Stock, the issuance may be effected on a noncertificated basis, to the extent
not prohibited by applicable law or the applicable rules of any stock exchange.
14.4 NO RIGHTS AS A SHAREHOLDER
No Option or Stock Award denominated in units shall entitle the
Participant to any cash dividend, voting or other right of a shareholder unless
and until the date of issuance under the Plan of the shares that are the subject
of such Award.
14.5 PARTICIPANTS IN FOREIGN COUNTRIES
The Plan Administrator shall have the authority to adopt such
modifications, procedures and subplans as may be necessary or desirable to
comply with provisions of the laws of foreign countries in which the Company or
its Related Corporations may operate to assure the viability of the benefits
from Awards granted to Participants employed in such countries and to meet the
objectives of the Plan.
14.6 NO TRUST OR FUND
The Plan is intended to constitute an "unfunded" plan. Nothing contained
herein shall require the Company to segregate any monies or other property, or
shares of Common Stock, or to create any trusts, or to make any special deposits
for any immediate or deferred amounts
payable to any Participant, and no Participant shall have any rights that are
greater than those of a general unsecured creditor of the Company.
14.7 SEVERABILITY
If any provision of the Plan or any Award is determined to be invalid,
illegal or unenforceable in any jurisdiction, or as to any person, or would
disqualify the Plan or any Award under any law deemed applicable by the Plan
Administrator, such provision shall be construed or deemed amended to conform to
applicable laws, or, if it cannot be so construed or deemed amended without, in
the Plan Administrator's determination, materially altering the intent of the
Plan or the Award, such provision shall be stricken as to such jurisdiction,
person or Award, and the remainder of the Plan and any such Award shall remain
in full force and effect.
14.8 CHOICE OF LAW
The Plan and all determinations made and actions taken pursuant hereto, to
the extent not otherwise governed by the laws of the United States, shall be
governed by the laws of the State of Washington without giving effect to
principles of conflicts of laws.
SECTION 15. EFFECTIVE DATE
The Effective Date is the date on which the Plan is adopted by the Board.
PLAN ADOPTION AND AMENDMENTS/ADJUSTMENTS
SUMMARY PAGE
DATE OF BOARD ACTION ACTION SECTION/EFFECT OF AMENDMENT
December 3, 1999 Initial Plan Adoption Plan to be effective as of
December 3, 1999
May 12, 2000 Amendment and Restatement Amend to permit up to 30% of
shares to be issued to
officers and directors, and
increase number of shares
available for issuance to
2,000,000
October 12, 2000 Amendment Amend to increase number of
shares available for issuance
to 3,000,000
May 11, 2001 Amendment Amend to increase number of
shares available for issuance
to 3,600,000
December 14, 2001 Amendment Amend to increase number of
shares available for issuance
to 4,200,000
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