Exhibit 4.13
1995
----
INCENTIVE STOCK OPTION PLAN OF
----------------------------------
CLARINET COMMUNICATIONS CORP.
-------------------------------
Purpose of Plan
1. The purpose of this Plan is to strengthen Clarinet Communications
Corp. (hereafter "Corporation") by providing incentive stock options as a
means to attract, retain and motivate corporate personnel. The Plan is hereby
declared to be an "incentive stock option" plan pursuant to Section 422 of the
Internal Revenue Code and the regulations promulgated thereunder.
Administration of Plan
2. This Plan shall be administered by the Board of Directors. The Board
shall have the power to make all determinations necessary for the
administration of the Plan, subject to the restrictions on Board powers set
forth in Corporations Code Section 311.
Grant of Options
3. The Corporation is hereby authorized to grant incentive stock options
as defined in Internal Revenue Code Section 422 to any full-time employee.
Options may not be granted to employees who own stock possessing more than 10
percent of the total combined voting power of all classes of stock of the
Corporation, or of its parent or subsidiary, except pursuant to the
restrictions set forth in paragraphs 5 and 6. Any option granted under this
Plan shall be granted within ten years from the date this Plan is adopted, or
the date this Plan is approved by the shareholders pursuant to paragraph 13,
whichever is earlier. Each grant of options pursuant to this Plan is subject
to ratification and approval by the Board of Directors.
Stock Subject to Plan
4. The aggregate number of shares that may be issued pursuant to options
granted under this Plan shall be ONE MILLION (1,000,000) shares of the
Corporation's voting common stock, based on a capital structure of the
Corporation authorizing a total of 10,000,000 (Ten Million) shares of voting
common stock.
Exercise of Option
5. Any option granted pursuant to this Plan shall contain provisions,
established by the Board, setting forth the manner of exercising the option.
However, no option granted under this Plan shall be exercisable by its terms
after the expiration of ten years from the grant of the option, and no option
granted to a person who owns stock possessing more than ten percent of the
total combined voting power of all classes of the Corporation's stock shall be
exercisable by its terms after the expiration of five years from the date of
the grant. The option may be subject to earlier termination as provided in
paragraphs 8 and 12. The options may not be exercised unless in accordance
with the laws of the State of California and the Securities Act of 1993, as
amended.
Option Price
6. The price for a share of stock subject to an option granted pursuant
to this Plan shall not be less than the fair market value for the stock at the
time the option is granted, as determined in good faith by the Board at the
time the option is granted. However, when an option is granted to a person
who owns stock possessing more than ten percent of the total combined voting
power of all classes of the Corporation's stock, the purchase price per share
of the stock subject to the option shall not be less than one hundred ten
percent of the fair market value of the stock at the time the option is
granted, as determined by the Board in good faith at the time the option is
granted.
Options Nontransferable
7. The terms of any option granted under this Plan shall make the option
nontransferable by the optionee except by will or the laws of descent and
distribution, and exercisable only by the optionee during his or her lifetime.
Termination of Employment
8. An optionee's option shall expire thirty days after termination of
employment for reasons other than death or disability, subject to earlier
termination pursuant to paragraph 5 of this Plan. An optionee's option shall
expire twelve months after termination of employment due to permanent and
total disability, as defined in Internal Revenue Code Section 22(e)(3),
subject to earlier termination pursuant to paragraph 5 of this Plan. If an
optionee should die while employed by the Corporation, or its parent,
subsidiary, or successor as defined in Section 424 of the Internal Revenue
Code, or within the three-month period after termination of employment, the
person to whom the optionee's rights pass by will or the laws of descent and
distribution may exercise the option for any of the shares not previously
exercised during employee's lifetime, within one year after the optionee's
death, subject to earlier termination pursuant to paragraph 5 of this Plan.
Stock Subject to Option
9. The Corporation shall at all times during the term of this Plan
reserve the stock designated in paragraph 4 to meet the requirements of this
Plan, and shall pay all fees and expenses necessarily incurred by the
Corporation in connection with the exercise of options under this Plan.
In the event of a stock split, reverse stock split, stock dividend,
combination, or reclassification of the Corporation's stock, an appropriate
and proportionate adjustment shall be made in the number of shares to which
stock options may be granted. A corresponding change shall be made to the
number and kind of shares, and the exercise price per share, of unexercised
options.
This Plan shall be qualified by the Corporation as an exempt transaction under
federal and state securities laws. Any failure by the Corporation to qualify
for such exemption shall void this Plan.
Merger, Consolidation, or Dissolution of the Corporation
10. Following the merger of one or more corporations in the Corporation,
or any consolidation of the Corporation and one or more other corporations,
the exercise of options under this Plan shall apply to the shares of the
surviving Corporation in proportionate numbers of shares.
Code Section 25102(f), including, but not limited to, the provision that
the stock is for the optionee's own account and not with a view to or for sale
in connection with the distribution of the stock. Any option granted pursuant
to this Plan shall contain any other terms that the Board of Directors and/or
the Corporation's legal counsel deems necessary.
Restrictions on Transfer of Shares
12. All options and shares issued pursuant to this Plan shall be subject
to the following restrictions:
a. Neither the optionee nor the optionee's heirs, executors, or
administrators shall sell, exchange, give, transfer, pledge, hypothecate, or
otherwise dispose of any options or shares in the Corporation or any interest
in the options or shares except as provided in this Plan.
b. Upon termination of employment or death of optionee, the shares
acquire by the optionee pursuant to this Plan shall be subject to a
right of repurchase by the Corporation on the terms and conditions set
forth Herein.
c. Any sale or transfer of shares by the optionee shall be subject to a
right by the Corporation to repurchase such shares at the greater of the price
paid for such shares by the optionee or the purchase price determined by
subparagraph (d).
d. The repurchase price to be paid by the Corporation for the shares of
an optionee shall be an amount equal to the number of shares of stock in the
Corporation owned by that optionee on the Purchase Date multiplied by the
greater of (1) the purchase price paid by the optionee, or (2) the book value
of a single share of the Corporation's stock as determined hereunder.
"Book value", for the purposes of repurchase of shares by the Corporation
means the value of the capital stock of the Corporation as of the valuation
date, after deducting the sum of all the Corporation's liabilities from the
sum of all of the Corporation's assets and property as shown on the
Corporation's books, except that the Corporation's capital stock shall not be
deducted as a liability, nor shall any surplus or undivided profits be
deducted. The book value of any single share of capital stock of the
Corporation shall be its proportionate share of the book value of all the
outstanding stock of the Corporation as of the valuation date.
To determine book value, the inventory of the Corporation reflecting the
property, assets and liabilities of the Corporation last compiled by the
Corporation's accountant shall be used. Accounts receivables shall not be
included. All other sums owed to the Corporation shall be valued as they are
carried gross on the books. Furniture, fixtures, equipment and other fixed
assets on hand shall be valued as they appear on the books of the Corporation,
being original cost less depreciation. Goodwill and trade names shall be
deemed of no value unless they have been acquired and paid for in cash, and in
that event, the sum shall be computed at the amount paid for them. All state
and other taxes and assessments that are unpaid shall be apportioned. The
usual accounting practices employed by the accountant auditing the books of
the Corporation shall be employed in the determination of the foregoing
values.
e. The restrictions on transfer of shares set forth herein shall not be
applicable in the event of merger or acquisition of the Corporation by terms
of which a general offer to purchase shares is extended to all shareholders of
the Corporation.
f. The restrictions on transfer of shares set forth herein shall not be
applicable to the sale of shares by optionee to another shareholder of the
Corporation, except that as to any such sale, the Corporation shall have a
right of first refusal for a period of thirty (30) days following notice of
any such proposed sale, upon substantially the same terms and conditions of
such proposed sale.
Effective Date of Plan
13. This Plan shall be effective on approval by the outstanding shares
or unanimous written consent of the shareholders of the Corporation.
Amendment and Termination of the Plan
14. The Board of Directors may at any time amend or terminate this Plan.
No option may be granted after termination. The amendment or termination of
the Plan shall not, however, alter any optionee's rights or obligations under
an option previously granted, unless the optionee consents to that alteration.
Financial Statements
15. Optionees under this Plan shall receive financial statements
annually regarding the Corporation during the period the options are
outstanding. The financial statements provided need not comply with Title 10,
Section 260.613 of the California Code of Regulations.
No Right of Employment
16. Nothing in this Plan or any grant made pursuant to this Plan
shall confer on the optionee any right to continue in the employment of the
Corporation, or limit in any way the right of the Corporation to terminate the
optionee's employment or other relationship at any time, with or without
cause.