EXHIBIT 99.1
SPIKE TECHNOLOGIES, INC.
1998 STOCK OPTION PLAN
1. PURPOSE
The purpose of the Spike Technologies, Inc. 1998 Stock Option Plan (the
"Plan") of Spike Technologies, Inc., a California corporation (the
"Corporation"), is to encourage ownership in the Corporation by key employees
and nonemployee directors of the Corporation, because long-term employment of
key employees and retention of directors is considered essential to the
Corporation's continued progress. The Plan provides a further incentive for key
employees and nonemployee directors to continue in the service of the
Corporation. Where permitted by applicable laws, the Plan allows the
participation of certain selected consultants in the Corporation's success
through their participation in the growth in the value of the Common Stock of
the Corporation.
2. ADMINISTRATION
The Board of Directors of the Corporation (the "Board") shall supervise
and administer the Plan. The Board shall from time to time designate the key
employees and nonemployee directors of the Corporation who shall be granted
stock options under the Plan and the amount of stock to be optioned to each. If
permitted by Rule 16b-3 of the Securities Exchange Act of 1934, the Plan may be
administered by different bodies with respect to directors, non-director
officers and employees who are neither directors nor officers. The Corporation
shall give notice of the stock option grant to the employee or nonemployee
director. All questions of interpretation of the Plan or of any options issued
under it shall be determined by the Board, and that determination shall be final
and binding upon all persons having an interest in the Plan. Any or all powers
and discretion vested in the Board under the Plan may be exercised by any
subcommittee of the Board so authorized by the Board.
3. STOCK SUBJECT TO THE PLAN
The maximum number of shares of the Common Stock of the Corporation that
may be optioned under the Plan shall be three million (3,000,000) shares (the
"Shares"). The limitation on the number of Shares that may be optioned under the
Plan shall be subject to adjustment as provided in Section 13 of the Plan. If
any outstanding option under the Plan for any reason expires or is terminated
without having been exercised in full, the Shares allocable to the unexercised
portion of that option shall again become available for option pursuant to the
Plan.
4. PARTICIPATION IN THE PLAN
A. INCENTIVE STOCK OPTIONS. Only employees may be granted Incentive Stock
Options. Except where options are stated to be nonqualified stock options,
options granted to employees are intended to qualify as Incentive Stock Options,
to the extent permitted under applicable laws. No consultant or non-employee
director may be granted incentive stock options.
B. NONSTATUTORY STOCK OPTIONS. Employees, directors, and consultants may
be granted nonstatutory stock options, which may also be called "nonqualified
stock options".
5. TIME FOR GRANTING OPTIONS
All options for Shares subject to the Plan shall be granted, if at all,
not later than ten (10) years after the approval of the Plan by the shareholders
of the Corporation.
6. INCENTIVE STOCK OPTION TERMS AND CONDITIONS
Options granted to employees (but not to nonemployee directors) under the
terms and conditions of this Section 6 are intended to be incentive stock
options ("ISOs") under section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"). Each incentive stock option granted under the Plan shall
be authorized by action of the Board and shall be evidenced by a written
agreement in such form as the Board shall from time to time approve, which
agreement shall comply with and be subject to the following terms and
conditions:
A. EXERCISE PRICE. The exercise price of each incentive stock option shall
be at least one hundred percent (100%) of the fair market value of a Share of
the Corporation on the date the option is granted; provided, however, that the
exercise price of an incentive stock option granted to an individual who owns
stock possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Corporation, as determined under the stock
ownership rules specified in Subsection 6.C, shall be one hundred ten percent
(110%) of the fair market value of a Share of the Corporation on the date the
option is granted. The fair market value shall be determined by the Board.
B. DURATION OF OPTIONS. No incentive stock option shall be exercisable
after the expiration often (10) years from the date on which that option is
granted; provided, however, that no incentive stock option granted to an
individual who owns stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Corporation, as determined
under the stock ownership rules specified in Subsection 6.C, shall be
exercisable after the expiration of five (5) years from the date on which that
option is granted.
C. DETERMINATION OF STOCK OWNERSHIP. For purposes of determining in
Subsections 6.A and 6.B whether an employee owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Corporation, an employee shall be considered as owning the stock owned, directly
or indirectly, by or for his or her brothers and sisters (whether by the whole
or half blood), spouse, ancestors, and lineal descendants. Stock owned, directly
or indirectly, by or for a corporation, partnership, estate, or trust shall be
considered as being owned proportionately by or for its shareholders, partners,
or beneficiaries. Stock with respect to which the employee holds an option shall
not be counted.
D. RIGHT TO EXERCISE. Each incentive stock option shall become exercisable
and vest according to the terms and conditions established by the Board and
reflected in the written agreement evidencing the option. Notwithstanding the
preceding sentence, after an initial public offering, all outstanding incentive
stock options shall immediately become exercisable in full in the event that a
tender within the meaning of section 14 of the Securities Exchange Act of 1934,
as amended, is made for five percent (5%) or more of the Corporation's
outstanding capital stock
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by any person other than the Corporation or an affiliate. Each incentive stock
option shall be subject to termination before its date of expiration as provided
in Subsection 6.E.
E. TERMINATIONS OF OPTIONS. If an optionee ceases to be an employee of the
Corporation, his or her rights to exercise an incentive stock option then held
shall be only as follows:
i. DEATH: If an optionee dies while he or she is employed by the
Corporation, the optionee's estate shall have the right for a period of six (6)
months (or such longer period as the Board may determine at the date of grant or
during the term of the option) after the date of death to exercise the option to
the extent the optionee was entitled to exercise the option on that date,
provided the date of exercise is in no event after the expiration of the term of
the option. To the extent the option is not exercised within this period, the
option will terminate. An optionee's "estate" shall mean the optionee's legal
representative or any person who acquires the right to exercise an option by
reason of the optionee's death.
ii. DISABILITY: If an optionee's employment with the Corporation
ends because the optionee becomes disabled, the optionee or his or her qualified
representative (in the event of the optionee's mental disability) shall have the
right for a period of six (6) months after the date on which the optionee's
employment ends to exercise the option to the extent the optionee was entitled
to exercise the option on that date, provided the date of exercise is in no
event after the expiration of the term of the option. To the extent the option
is not exercised within this period, the option will terminate.
iii. RESIGNATION: If an optionee voluntarily resigns from the
Corporation, the optionee shall have the right for a period of two (2) months
after the date of resignation to exercise the option to the extent the optionee
was entitled to exercise the option on that date, provided the date of exercise
is in no event after the expiration of the term of the option. To the extent the
option is not exercised within this period, the option will terminate.
iv. TERMINATION FOR REASONS OTHER THAN CAUSE: If an optionee's
employment is terminated by the Corporation for reasons other than cause, the
optionee shall have the right for a period of two (2) months after the date of
termination to exercise the option to the extent the optionee was entitled to
exercise the option on that date, provided the date of exercise is in no event
after the expiration of the term of the option. To the extent the option is not
exercised within this period, the option will terminate. The termination of an
optionee's employment by the Corporation will be for reasons other than cause if
the termination is NOT due to an act by the optionee of embezzlement, fraud,
dishonesty, or breach of fiduciary duty to the Corporation, or to deliberate
disregard by the optionee of the rules of the Corporation resulting in loss,
damage, or injury to the Corporation, or to any unauthorized disclosure by the
optionee of any of the secrets or confidential information of the Corporation,
or to the optionee's having induced any client or customer of the Corporation to
break any contract with the Corporation, or to the optionee's having induced any
principal for whom the Corporation acts as agent to terminate the agency
relationship, or to any conduct of the optionee that constitutes unfair
competition with the Corporation.
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v. OTHER REASONS: If an optionee's employment with the Corporation
ends for any reason not mentioned above in this Subsection 6.E, (including
without limitation, termination for cause), all rights of the optionee in an
incentive stock option, to the extent that it has not been exercised, shall
terminate on the date the optionee's employment ends.
F. NOTICE OF SALE. If an optionee sells or otherwise disposes of any
Shares acquired upon exercise of an incentive stock option, the optionee shall
give the Corporation notice of the sale or disposition within five (5) days
thereafter.
G. LIMIT ON EXERCISE OF INCENTIVE STOCK OPTIONS. To the extent that the
aggregate fair market value (determined as of the time the option is granted) of
the Stock with respect to which incentive stock options are exercisable for the
first time by any individual during any calendar year (under all plans of the
Corporation and its parent and subsidiary corporations) exceeds One Hundred
Thousand Dollars ($100,000), the options shall be treated as options that are
not incentive stock options.
7. NONQUALIFIED STOCK OPTION TERMS AND CONDITIONS
The options granted under the terms and conditions of this Section 7 are
nonqualified stock options and are not intended to qualify as either a qualified
stock option or an incentive stock option as those terms are defined by
applicable provisions of the Code. Each nonqualified stock option granted under
the Plan shall be authorized by action of the Board and shall be evidenced by a
written agreement in such form as the Board shall from time to time approve,
which agreement shall comply with and be subject to the following terms and
conditions:
A. EXERCISE PRICE. The exercise price of each nonqualified stock option
shall not be less than forty-six cents ($0.46) per Share.
B. DURATION OF OPTIONS. Each nonqualified stock option shall be for a term
determined by the Board; provided, however, that the term of any option may not
exceed ten (10) years.
C. RIGHT TO EXERCISE. Each nonqualified stock option shall become
exercisable and vest according to the terms and conditions established by the
Board and reflected in the written agreement evidencing the option.
Notwithstanding the preceding sentence, after an initial public offering, all
outstanding nonqualified stock options shall immediately become exercisable in
full in the event that a tender within the meaning of section 14 of the
Securities Exchange Act of 1934, as amended, is made for five percent (5%) or
more of the Corporation's outstanding capital stock by any person other than the
Corporation or an affiliate. Each nonqualified stock option shall be subject to
termination before its date of expiration as provided in Subsection 7.D.
D. TERMINATIONS OF OPTIONS. If an optionee ceases to be an employee of the
Corporation, his or her rights to exercise a nonqualified stock option then held
shall be only as follows:
i. DEATH: If an optionee dies while he or she is employed by the
Corporation, the optionee's estate shall have the right for a period of six (6)
months (or such longer period as the Board may determine at the date of grant or
during the term of the option)
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after the date of death to exercise the option to the extent the optionee was
entitled to exercise the option on that date, provided the date of exercise is
in no event after the expiration of the term of the option. To the extent the
option is not exercised within this period, the option will terminate. An
optionee's "estate" shall mean the optionee's legal representative or any person
who acquires the right to exercise an option by reason of the optionee's death.
ii. DISABILITY: If an optionee's employment with the Corporation
ends because the optionee becomes disabled, the optionee or his or her qualified
representative (in the event of the optionee's mental disability) shall have the
right for a period of six (6) months after the date on which the optionee's
employment ends to exercise the option to the extent the optionee was entitled
to exercise the option on that date, provided the date of exercise is in no
event after the expiration of the term of the option. To the extent the option
is not exercised within this period, the option will terminate.
iii. RESIGNATION: If an optionee voluntarily resigns from the
Corporation, the optionee shall have the right for a period of two (2) months
after the date of resignation to exercise the option to the extent the optionee
was entitled to exercise the option on that date, provided the date of exercise
is in no event after the expiration of the term of the option. To the extent the
option is not exercised within this period, the option will terminate.
iv. TERMINATION FOR REASONS OTHER THAN CAUSE: If an optionee's
employment is terminated by the Corporation for reasons other than cause, the
optionee shall have the right for a period of two (2) months after the date of
termination to exercise the option to the extent the optionee was entitled to
exercise the option on that date, provided the date of exercise is in no event
after the expiration of the term of the option. To the extent the option is not
exercised within this period, the option will terminate. The termination of an
optionee's employment by the Corporation will be for reasons other than cause if
the termination is NOT due to an act by the optionee of embezzlement, fraud,
dishonesty, or breach of fiduciary duty to the Corporation, or to deliberate
disregard by the optionee of the rules of the Corporation resulting in loss,
damage, or injury to the Corporation, or to any unauthorized disclosure by the
optionee of any of the secrets or confidential information of the Corporation,
or to the optionee's having induced any client or customer of the Corporation to
break any contract with the Corporation, or to the optionee's having induced any
principal for whom the Corporation acts as agent to terminate the agency
relationship, or to any conduct of the optionee that constitutes unfair
competition with the Corporation,
v. OTHER REASONS: If an optionee's employment with the Corporation
ends for any reason not mentioned above in this Subsection 7.D, all rights of
the optionee in a nonqualified stock option, to the extent that it has not been
exercised, shall terminate on the date the optionee's employment ends.
8. GRANTS TO NONEMPLOYEE DIRECTORS
All options granted to nonemployee directors shall be subject to the
following terms and conditions:
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A. NONQUALIFIED OPTIONS. All stock options granted to nonemployee
directors pursuant to the Plan shall be nonqualified stock options.
B. EXERCISE PRICE. The exercise price of each option granted to a
nonemployee director shall not be less than forty-six cents ($0.46) per Share.
C. DURATION OF OPTIONS. Each option granted to a nonemployee director
shall be for a term determined by the Board; provided, however, that the term of
any option may not exceed ten (10) years.
D. RIGHT TO EXERCISE. Each option granted to a nonemployee director shall
become exercisable and vest according to the terms and conditions established by
the Board and reflected in the written agreement evidencing the option.
Notwithstanding the preceding sentence, after an initial public offering, all
outstanding nonemployee directors' options shall immediately become exercisable
in full in the event that a tender within the meaning of section 14 of the
Securities Exchange Act of 1934, as amended, is made for five percent (5%) or
more of the Corporation's outstanding capital stock by any person other than the
Corporation or an affiliate. Each option granted to a nonemployee director shall
be subject to termination before its date of expiration as provided in
Subsection 8.E.
E. TERMINATIONS OF OPTIONS. If a nonemployee director ceases to be a
director of the Corporation, his or her rights to exercise an option then held
shall be only as follows:
i. DEATH: If a nonemployee director dies while he or she is serving
on the Board of the Corporation, the director's estate shall have the right for
a period of six (6) months (or such longer period as the Board may determine at
the date of grant or during the term of the option) after the date of death to
exercise the option to the extent the director was entitled to exercise the
option on that date, provided the date of exercise is in no event after the
expiration of the term of the option. To the extent the option is not exercised
within this period, the option will terminate. A director's "estate" shall mean
the director's legal representative or any person who acquires the right to
exercise an option by reason of the director's death.
ii. DISABILITY: If a nonemployee director's Board membership ends
because the director becomes disabled, the director or his or her qualified
representative (in the event of the director's mental disability) shall have the
right for a period of six (6) months after the date on which the director's
Board membership ends to exercise the option to the extent the director was
entitled to exercise the option on that date, provided the date of exercise is
in no event after the expiration of the term of the option. To the extent the
option is not exercised within this period, the option will terminate.
iii. RESIGNATION: If a nonemployee director voluntarily resigns from
the Corporation's Board, the director shall have the right for a period of two
(2) months after the date of resignation to exercise the option to the extent
the director was entitled to exercise the option on that date, provided the date
of exercise is in no event after the expiration of the term of the option. To
the extent the option is not exercised within this period, the option will
terminate.
iv. TERMINATION FOR REASONS OTHER THAN CAUSE: If a nonemployee
director's Board membership is terminated by the Corporation for reasons other
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than cause, the director shall have the right for a period of two (2) months
after the date of termination to exercise the option to the extent the director
was entitled to exercise the option on that date, provided the date of exercise
is in no event after the expiration of the term of the option. To the extent the
option is not exercised within this period, the option will terminate. The
termination of a nonemployee director's Board membership will be for reasons
other than cause if the termination is NOT due to an act by the director of
embezzlement, fraud, dishonesty, or breach of fiduciary duty to the Corporation,
or to deliberate disregard by the director of the rules of the Corporation
resulting in loss, damage, or injury to the Corporation, or to any unauthorized
disclosure by the director of any of the secrets or confidential information of
the Corporation, or to the director's having induced any client or customer of
the Corporation to break any contract with the Corporation, or to the director's
having induced any principal for whom the Corporation acts as agent to terminate
the agency relationship, or to any conduct of the director that constitutes
unfair competition with the Corporation.
v. OTHER REASONS: If a nonemployee director's Board membership ends
for any reason not mentioned above in this Subsection 8.E, all rights of the
director in an option, to the extent that it has not been exercised, shall
terminate on the date the director's Board membership ends.
9. EXERCISE OF OPTIONS
Optionees may exercise options only by providing written notice to the
Corporation at the address specified in the written agreement evidencing the
option. The notice must be accompanied by full payment in cash for the Shares as
to which the options are exercised.
10. TRANSFERABILITY
Each option granted under the Plan by its terms shall not be transferable
by the optionee and shall be exercisable only by the optionee during his or her
lifetime. No option or interest therein may be transferred, assigned, pledged,
or hypothecated by the optionee, whether by operation of law or otherwise, or be
made subject to execution, attachment, or similar process.
11. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS
The Board shall have the power to modify, extend, or renew outstanding
options and authorize the grant of new options in substitution therefor,
provided that any such action may not have the effect of altering or impairing
any rights or obligations of any option previously granted without the consent
of the optionee.
12. LIMITATION OF RIGHTS
A. NO RIGHT TO AN OPTION. Nothing in the Plan shall be construed to give
any employee or any nonemployee director of the Corporation any right to be
granted an option.
B. NO EMPLOYMENT RIGHTS. Neither the Plan nor the granting of an option
nor any other action taken pursuant to the Plan shall constitute or be evidence
of any agreement or understanding, express or implied, that the Corporation will
employ or continue the Board
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membership of an optionee for any period of time, or in any position, or at any
particular rate of compensation.
C. NO SHAREHOLDERS' RIGHTS. An optionee shall have no rights as a
shareholder with respect to the Shares covered by his or her options until the
date of the issuance to him or her of a share certificate for the Shares, and no
adjustment will be made for dividends or other rights for which the record date
is prior to the date the certificate is issued.
13. CHANGES IN PRESENT SHARES
A. The grant of a stock option pursuant to the Plan shall not affect in
any way the right or power of the Corporation to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or consolidate or to dissolve, liquidate, sell or transfer
all or any part of its business or assets.
B. In the event of any merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, or other change in the corporate
structure or capitalization affecting the Corporation's present Shares,
appropriate adjustment shall be made by the Board in the kind, option price, and
number of Shares (including the maximum number of Shares that may be optioned
under the Plan, as specified in Section 3) that are or may become subject to
options granted or to be granted under the Plan.
C. In the event of the proposed dissolution or liquidation of the
Corporation, the Board shall notify the optionee at least fifteen (15) days
prior to such proposed action. To the extent it has not been previously
exercised, the stock option shall terminate immediately prior to the
consummation of such proposed action.
D. In the event of a merger of the Corporation with or into another
corporation, the stock option shall be assumed or an equivalent option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation. In the event that such successor corporation does not
agree to assume the stock option or to substitute an equivalent option, the
Board may, in lieu of such assumption or substitution, provide for the optionee
to have the right to exercise the stock option as to all of the options granted,
including shares which would not otherwise be exercisable.
i. If the Board does not make a stock option fully exercisable in
lieu of assumption or substitution in the event of a merger, the Board shall
notify the optionee at least fifteen (15) days prior to such proposed action. To
the extent it has not been previously exercised, the stock option shall
terminate immediately upon the expiration of such fifteen-day period.
ii. If the Board makes a stock option fully exercisable in lieu of
assumption or substitution in the event of a merger, the Board shall notify the
optionee that the stock option shall be fully exercisable for a period of
fifteen (15) days from the date of such notice, and the stock option will
terminate upon the expiration of such period.
iii. For the purposes of this Paragraph 13.D, the stock option shall
be considered assumed if, following the merger, the option confers the right to
purchase, for each
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share of stock subject to the option immediately prior to the merger, the
consideration (whether stock, cash, or other securities or property) received in
the merger 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 merger
was not solely common stock of the successor corporation or its parent, the
Board may, with the consent of the successor corporation and the participant,
provide for the consideration to be received upon the exercise of the stock
option, for each share of stock subject to the option, 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 Common Stock in the merger.
14. EFFECTIVE DATE OF THE PLAN
The Plan will become effective upon approval by the Corporation's
shareholders within twelve (12) months of the date the Plan is adopted by the
Corporation's Board of Directors. Options may be granted under the Plan at any
time after the Plan becomes effective and before the termination of the Plan.
15. AMENDMENT 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 shall be made that would impair the rights of any optionee
under any grant theretofore made, with his or her consent. In addition, to the
extend necessary and desirable to comply with Rule 16b-3 of the Securities and
Exchange Act of 1934 or with Section 422 of the Internal revenue Code (or any
applicable law or regulation, including the requirements of any Stock Exchange),
the Company shall be required to obtain shareholder 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 adversely affect Options already granted, unless mutually agreed
otherwise between the Optionee and the Board, Which agreement must be in writing
and signed by the Optionee and the Company.
Date Plan Approved by the Board: March 1, 1998
Date Plan Approved by Shareholders: March 1, 1998
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