Exhibit 10.9
EXAR CORPORATION
2000 EQUITY INCENTIVE PLAN
Adopted September 7, 2000
Amended and Restated Effective December 6, 2000
Amended and Restated Effective January 26, 2001
Amended and Restated Effective June 21, 2001
Amended and Restated Effective March 21, 2002
Stockholder Approval Not Required
1. Purposes.
The persons eligible to receive Stock Awards are the Employees and
Consultants of the Company. The purpose of the Plan is to provide a means by
which eligible recipients of Stock Awards may be given an opportunity to benefit
from increases in value of the stock of the Company through the granting of (i)
Nonstatutory Stock Options, (ii) stock bonuses and (iii) rights to purchase
restricted stock, all as described below. The Plan is also intended to provide a
means by which the Company may grant Stock Awards to persons not previously
employed by the Company as an inducement essential to those persons entering
employment contracts with the Company. Such inducement grants may be made to
persons who ultimately are employed by the Company as Officers.
The Company, by means of the Plan, seeks to retain the services of persons
who are or will become Employees of or Consultants to the Company or an
Affiliate, and to provide incentives for such persons to exert maximum efforts
for the success of the Company and its Affiliates.
The Company intends that the Stock Awards issued under the Plan shall, in
the discretion of the Board or any Committee to which responsibility for
administration of the Plan has been delegated pursuant to subsection 3(c), be
either (i) Options granted pursuant to Section 6 hereof or (ii) stock bonuses or
rights to purchase restricted stock granted pursuant to Section 8 hereof.
2. Definitions.
(a) "Affiliate" means any parent corporation or subsidiary corporation of
the Company, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f) respectively, of the Code.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means a committee or subcommittee appointed by the Board in
accordance with subsection 3(c) of the Plan.
(e) "Company" means Exar Corporation, a Delaware corporation.
1.
(f) "Consultant" means any person, including an advisor, engaged by the
Company or an Affiliate to render consulting services and who is compensated for
such services.
(g) "Continuous Service" means that the service of an individual to the
Company, whether as an Employee, Officer, Director or Consultant, is not
interrupted or terminated. The Board or the Committee may determine, in that
party's sole discretion, whether Continuous Service shall be considered
interrupted in the case of any leave of absence approved by the Board or the
Committee, including sick leave, military leave, or any other personal leave.
Continuous Service shall not be deemed to have terminated merely because of a
change in the capacity in which a person renders service to the Company or an
Affiliate, whether such service is as an Employee, Officer, Director or
Consultant or a change in the entity for which the person renders such service,
provided that there is no interruption in the person's service relationship with
the Company or an Affiliate.
(h) "Director" means a member of the Board.
(i) "Employee" means any person employed by the Company or any Affiliate of
the Company. Mere service as a Director or payment of a Director's fee by the
Company or an Affiliate shall not be sufficient to constitute "employment" by
the Company or an Affiliate.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(k) "Fair Market Value" means, as of any date, the lower of (1) the last
quoted per share selling price for the Company's Common Stock on the Nasdaq
National Market on the relevant date; or (2) the arithmetic mean of the highest
and lowest quoted selling prices on the Nasdaq National Market on the relevant
date. If there were no sales on such date, then "Fair Market Value" means on the
nearest trading day before the lower of (1) the last quoted per share selling
price for the Company's Common Stock on the Nasdaq National Market; or (2) the
arithmetic mean of the highest and lowest quoted selling prices on the Nasdaq
National Market.
Notwithstanding the preceding, for federal, state, and local income tax
purposes, fair market value shall be determined by the Board (or its delegate)
in accordance with uniform and nondiscriminatory standards adopted from time to
time.
(l) "Non-Employee Director" means a Director who either (i) is not a
current Employee or Officer of the Company or its parent or subsidiary, does not
receive compensation (directly or indirectly) from the Company or its parent or
subsidiary for services rendered as a consultant or in any capacity other than
as a Director (except for an amount as to which disclosure would not be required
under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
("Regulation S-K")), does not possess an interest in any other transaction as to
which disclosure would be required under Item 404(a) of Regulation S-K, and is
not engaged in a business relationship as to which disclosure would be required
under Item 404(b) of Regulation S-K; or (ii) is otherwise considered a
"non-employee director" for purposes of Rule 16b-3.
(m) "Nonstatutory Stock Option" means a stock option not intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.
2.
(n) "Officer" means a person who possesses the authority of an "officer" as
that term is used in Rule 4460(i)(1)(A) of the Rules of the National Association
of Securities Dealers, Inc. For purposes of the Plan, a person in the position
of "Vice President" or higher shall be classified as an "Officer" unless the
Board or Committee expressly finds that such person does not possess the
authority of an "officer" as that term is used in Rule 4460(i)(1)(A) of the
Rules of the National Association of Securities Dealers, Inc.
(o) "Option" means a Nonstatutory Stock Option granted pursuant to the
Plan.
(p) "Option Agreement" means a written agreement between the Company and an
Optionholder evidencing the terms and conditions of an individual Option grant.
Each Option Agreement shall be subject to the terms and conditions of the Plan.
(q) "Optionholder" means a person to whom an Option is granted pursuant to
the Plan or, if applicable, such other person who holds an outstanding Option.
(r) "Plan" means this 2000 Equity Incentive Plan.
(s) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor to
Rule 16b-3, as in effect with respect to the Company at the time discretion is
being exercised regarding the Plan.
(t) "Securities Act" means the Securities Act of 1933, as amended.
(u) "Stock Award" means any right granted under the Plan, including any
Option, any stock bonus, and any right to purchase restricted stock.
(v) "Stock Award Agreement" means a written agreement between the Company
and a holder of a Stock Award evidencing the terms and conditions of an
individual Stock Award grant. Each Stock Award Agreement shall be subject to the
terms and conditions of the Plan.
3. Administration.
(a) The Plan shall be administered by the Board unless and until the Board
delegates administration to a Committee, as provided in subsection 3(c).
(b) The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:
(1) To determine from time to time which of the persons eligible under
the Plan shall be granted Stock Awards; when and how each Stock Award shall be
granted; whether a Stock Award will be an Option, a stock bonus, a right to
purchase restricted stock, or a combination of the foregoing; the provisions of
each Stock Award granted (which need not be identical), including the time or
times when a person shall be permitted to receive stock pursuant to a Stock
Award; and the number of shares with respect to which a Stock Award shall be
granted to each such person.
3.
(2) To construe and interpret the Plan and Stock Awards granted under
it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Stock Award Agreement,
in a manner and to the extent it shall deem necessary or expedient to make the
Plan fully effective.
(3) To amend the Plan or a Stock Award as provided in Section 13.
(4) To terminate or suspend the Plan as provided in Section 14.
(5) Generally, to exercise such powers and to perform such acts as the
Board deems necessary or expedient to promote the best interests of the Company
which are not in conflict with the provisions of the Plan.
(c) The Board may delegate administration of the Plan to a committee of
the Board composed of two (2) or more members (the "Committee"), all of the
members of which Committee may be, in the discretion of the Board, Non-Employee
Directors. If administration is delegated to a Committee, the Committee shall
have, in connection with the administration of the Plan, the powers theretofore
possessed by the Board, including the power to delegate to a subcommittee any of
the administrative powers the Committee is authorized to exercise (and
references in this Plan to the Board shall thereafter be to the Committee or
such a subcommittee), subject, however, to such resolutions, not inconsistent
with the provisions of the Plan, as may be adopted from time to time by the
Board. The Board may abolish the Committee at any time and revest in the Board
the administration of the Plan. In addition, notwithstanding anything in this
Section 3 to the contrary, the Board or the Committee may delegate to a
subcommittee of one or more members of the Board the authority to grant Stock
Awards to eligible persons who are not then subject to Section 16 of the
Exchange Act.
4. Shares Subject to the Plan.
(a) Subject to the provisions of Section 12 relating to adjustments upon
changes in stock, the stock that may be issued pursuant to Stock Awards shall
not exceed in the aggregate five million seven hundred thousand (5,700,000)
shares of the Company's Common Stock. If any Stock Award shall for any reason
expire or otherwise terminate, in whole or in part, without having been
exercised in full, the stock not acquired under such Stock Award shall revert to
and again become available for issuance under the Plan.
(b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.
5. Eligibility.
(a) Stock Awards may be granted only to Employees or Consultants.
(b) The aggregate number of shares issued pursuant to Stock Awards granted
to Officers shall not exceed forty percent (40%) of the number of shares
reserved for issuance under the Plan, as determined at the time of each such
issuance to an Officer, except that there shall be excluded from this
calculation shares issued to Officers not previously employed by the
4.
Company pursuant to Stock Awards granted as an inducement essential to such
individuals entering into employment relationships with the Company.
(c) A Consultant shall not be eligible for the grant of a Stock Award if,
at the time of grant, a Form S-8 Registration Statement under the Securities Act
("Form S-8") is not available to register either the offer or the sale of the
Company's securities to such Consultant because of the nature of the services
that the Consultant is providing to the Company, or because the Consultant is
not a natural person, or as otherwise provided by the rules governing the use of
Form S-8, unless the Company determines both (i) that such grant (A) shall be
registered in another manner under the Securities Act (e.g., on a Form S-3
Registration Statement) or (B) does not require registration under the
Securities Act in order to comply with the requirements of the Securities Act,
if applicable, and (ii) that such grant complies with the securities laws of all
other relevant jurisdictions.
6. Option Provisions.
Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. The provisions of separate
Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:
(a) Term. No Option shall be exercisable after the expiration of ten (10)
years from the date it was granted.
(b) Price. Except as otherwise provided in Section 7 of the Plan, the
exercise price of each Option shall be not less than one hundred percent (100%)
of the Fair Market Value of the stock subject to the Option on the date of
grant.
(c) Consideration. The purchase price of stock acquired pursuant to an
Option shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the time the Option is exercised, or (ii) at
the discretion of the Board or the Committee, at the time of the grant of the
Option, (A) by delivery to the Company of other common stock of the Company, (B)
according to a deferred payment arrangement (however, in the event the Company
is then incorporated in the state of Delaware, then payment of the common
stock's "par value" as defined in the Delaware General Corporation Law shall not
be made by deferred payment), or other arrangement (which may include, without
limiting the generality of the foregoing, the use of other common stock of the
Company) with the person to whom the Option is granted or to whom the Option is
transferred pursuant to subsection 6(d) or (C) in any other form of legal
consideration that may be acceptable to the Board. Unless otherwise specifically
provided in the Option, the purchase price of common stock of the Company
acquired pursuant to an Option that is paid by delivery to the Company of other
Company common stock acquired directly or indirectly from the Company, shall be
paid only by shares of common stock of the Company that have been held for more
than six (6) months (or such longer or shorter period of time required to avoid
a charge to earnings for financial accounting purposes). In the case of any
deferred payment arrangement, interest shall be compounded at least annually and
shall be charged at the minimum rate of interest necessary to avoid the
treatment as interest, under any applicable
5.
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement.
(d) Transferability. An Option shall not be transferable except by will or
by the laws of descent and distribution, and shall be exercisable during the
lifetime of the person to whom the Option is granted only by such person;
provided, however, that an Option may be transferred to the extent provided in
the Option Agreement. The person to whom the Option is granted may, but need
not, designate, by delivering written notice of the same to the Company (in a
form acceptable to the Company) during such person's lifetime, a third party
who, in the event of the death of the Optionholder, shall thereafter be entitled
to exercise the Option and receive any and all proceeds thereof. If no such
designation is made during the Optionholder's lifetime, the estate or the person
to whom the Option is transferred by will or by the laws of descent and
distribution shall, in the event of the death of the Optionholder, thereafter be
entitled to exercise the Option and receive any and all proceeds thereof.
(e) Vesting. The total number of shares of stock subject to an Option may,
but need not, be allotted in periodic installments (which may, but need not, be
equal). From time to time during each of such installment periods, the Option
may become exercisable ("vest") with respect to some or all of the shares
allotted to that period, and may be exercised with respect to some or all of the
shares allotted to such period and/or any prior period as to which the Option
was not fully exercised. During the remainder of the term of the Option (if its
term extends beyond the end of the installment periods), the Option may be
exercised from time to time with respect to any shares then remaining subject to
the Option. The provisions of this subsection 6(e) are subject to any Option
provisions governing the minimum number of shares as to which an Option may be
exercised.
(f) Termination of Employment or Relationship as a Director or Consultant.
In the event an Optionholder's Continuous Service terminates (other than upon
the Optionholder's death or disability), the Optionholder may exercise the
Option (to the extent that the Optionholder was entitled to exercise it as of
the date of termination) but only within such period of time ending on the
earlier of (i) the date three (3) months following the termination of the
Optionholder's Continuous Service (or such longer or shorter period as specified
in the Option Agreement), or (ii) the expiration of the term of the Option as
set forth in the Option Agreement; provided, however, if the Optionholder is
terminated for cause, then the Option shall terminate on the date Optionholder's
Continuous Service ceases. If, at the date of termination, the Optionholder is
not entitled to exercise the entire Option, the shares covered by the
unexercisable portion of the Option shall revert to and again become available
for issuance under the Plan. If, after termination, the Optionholder does not
exercise the Option within the time specified in the Option Agreement, the
Option shall terminate, and the shares covered by such Option shall revert to
and again become available for issuance under the Plan.
An Optionholder's Option Agreement may also provide that if the exercise of
the Option following the termination of the Optionholder's Continuous Service
(other than upon the Optionholder's death or disability) would result in
liability under Section 16(b) of the Exchange Act, then the Option shall
terminate on the earlier of (i) the expiration of the term of the Option set
forth in the Option Agreement, or (ii) the tenth (10th) day after the last date
on which such exercise would result in such liability under Section 16(b) of the
Exchange Act. Finally, an
6.
Optionholder's Option Agreement may also provide that if the exercise of the
Option following the termination of the Optionholder's Continuous Service (other
than upon the Optionholder's death or disability) would be prohibited at any
time solely because the issuance of shares would violate the registration
requirements under the Securities Act, then the Option shall terminate on the
earlier of (i) the expiration of the term of the Option set forth in the first
paragraph of this subsection 6(f), or (ii) the expiration of a period of three
(3) months after the termination of the Optionholder's Continuous Service during
which the exercise of the Option would not be in violation of such registration
requirements.
(g) Disability of Optionholder. In the event an Optionholder's Continuous
Service terminates as a result of the Optionholder's disability, the
Optionholder may exercise the Option (to the extent that the Optionholder was
entitled to exercise it as of the date of termination), but only within such
period of time ending on the earlier of (i) the date twelve (12) months
following such termination (or such longer or shorter period specified in the
Option Agreement), or (ii) the expiration of the term of the Option as set forth
in the Option Agreement. If, at the date of termination, the Optionholder is not
entitled to exercise the entire Option, the shares covered by the unexercisable
portion of the Option shall revert to and again become available for issuance
under the Plan. If, after termination, the Optionholder does not exercise the
Option within the time specified herein, the Option shall terminate, and the
shares covered by such Option shall revert to and again become available for
issuance under the Plan.
(h) Death of Optionholder. In the event of the death of an Optionholder
during, or within a period specified in the Option Agreement after the
termination of, the Optionholder's Continuous Service, the Option may be
exercised (to the extent the Optionholder was entitled to exercise the Option as
of the date of death) by the Optionholder's estate, by a person who acquired the
right to exercise the Option by bequest or inheritance or by a person designated
to exercise the Option upon the Optionholder's death pursuant to subsection
6(d), but only within the period ending on the earlier of (i) the date eighteen
(18) months following the date of death (or such longer or shorter period
specified in the Option Agreement), or (ii) the expiration of the term of such
Option as set forth in the Option Agreement. If, at the time of death, the
Optionholder was not entitled to exercise the entire Option, the shares covered
by the unexercisable portion of the Option shall revert to and again become
available for issuance under the Plan. If, after death, the Option is not
exercised within the time specified herein, the Option shall terminate, and the
shares covered by such Option shall revert to and again become available for
issuance under the Plan.
7. Deferred Salary Grants.
(a) Any Employee who is selected by the Board or Committee ("Deferral
Participant") may elect to apply a portion of his or her base salary, in an
amount equal to at least five thousand dollars ($5,000) but in no event more
than fifty thousand dollars ($50,000), to the acquisition of an Option to
purchase shares of the Company's common stock pursuant to the terms of this
Section 7 ("Deferred Salary Option"). Such election is irrevocable and must be
filed with the Company prior to the commencement of the calendar year in which
the base salary to be deferred is earned. Notwithstanding the foregoing, a newly
hired, elected or appointed Deferral Participant may file an irrevocable
election with the Company within thirty (30) days of the date the Deferral
Participant commences employment with the Company.
7.
Each Deferral Participant who files such a timely election shall
automatically be granted an Option under this Section 7 on (i) the first trading
day in January of the calendar year for which the deferral election is to be in
effect; or (ii) for a newly hired Deferral Participant, the first trading day of
the month following the month the Deferral Participant files such election.
(b) The number of shares of Company common stock subject to a Deferred
Salary Option shall be determined pursuant to the following formula (rounded
down to the nearest whole number):
X= A / (B x 66-2/3%), where
X is the number of Option shares,
A is the maximum amount of base salary subject to the deferral
election, and
B is the Fair Market Value per share of the common stock on the Option
grant date.
(c) The purchase price per share of common stock of the Company for the
shares to be purchased pursuant to the exercise of any Deferred Salary Option
shall be thirty three and one third percent (33-1/3%) of the fair market value
of the Company's common stock on the date such Deferred Salary Option is
granted.
(d) Each Deferred Salary Option shall vest (become exercisable) equally
over the twelve (12) month period that is the calendar year in which salary is
deferred, and shall terminate on the earlier of (i) ten (10) years from the date
the Option was granted, or (ii) three (3) years following termination of the
Deferral Participant's employment with the Company or an Affiliate. If the
Deferred Salary Option is not exercised during the applicable period, it shall
be deemed to have been forfeited and of no further force or effect.
8. Terms of Stock Bonuses and Purchases of Restricted Stock.
Each stock bonus or restricted stock purchase agreement shall be in such
form and shall contain such terms and conditions as the Board or the Committee
shall deem appropriate. The terms and conditions of stock bonus or restricted
stock purchase agreements may change from time to time, and the terms and
conditions of separate agreements need not be identical, but each stock bonus or
restricted stock purchase agreement shall include (through incorporation of
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions as appropriate:
(a) Purchase Price. The purchase price under each restricted stock purchase
agreement shall be such amount as the Board or Committee shall determine and
designate in such Stock Award Agreement. Notwithstanding the foregoing, the
Board or the Committee may determine that eligible participants in the Plan may
be awarded stock pursuant to a stock bonus agreement in consideration for past
services actually rendered to the Company or for its benefit.
(b) Transferability. No rights under a stock bonus or restricted stock
purchase agreement shall be transferable by any participant under the Plan,
either voluntarily or by operation of law, except where such assignment is
required by law or expressly authorized by the terms of the applicable Stock
Award Agreement.
8.
(c) Consideration. The purchase price of stock acquired pursuant to a stock
purchase agreement shall be paid either: (i) in cash at the time of purchase;
(ii) at the discretion of the Board or the Committee, according to a deferred
payment arrangement or other arrangement with the person to whom the stock is
sold; or (iii) in any other form of legal consideration that may be acceptable
to the Board or the Committee in its discretion. Notwithstanding the foregoing,
the Board or the Committee to which administration of the Plan has been
delegated may award stock pursuant to a stock bonus agreement in consideration
for past services actually rendered to the Company or for its benefit.
(d) Vesting. Shares of stock sold or awarded under the Plan may, but need
not, be subject to a repurchase option in favor of the Company in accordance
with a vesting schedule to be determined by the Board or the Committee.
(e) Termination of Employment or Relationship as a Director or Consultant.
In the event an Optionholder's Continuous Service terminates, the Company may
repurchase or otherwise reacquire any or all of the shares of stock held by that
person which have not vested as of the date of termination under the terms of
the stock bonus or restricted stock purchase agreement between the Company and
such person.
9. Covenants of the Company.
(a) During the terms of the Stock Awards, the Company shall keep available
at all times the number of shares of stock required to satisfy such Stock Awards
up to the number of shares of stock authorized under the Plan.
(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the Stock Award; provided,
however, that this undertaking shall not require the Company to register under
the Securities Act either the Plan, any Stock Award granted under the Plan or
any stock issued or issuable pursuant to any such Stock Award. If, after
reasonable efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority which counsel for the Company deems necessary
for the lawful issuance and sale of stock under the Plan, the Company shall be
relieved from any liability for failure to issue and sell stock upon exercise of
such Stock Awards unless and until such authority is obtained.
10. Use of Proceeds From Stock.
Proceeds from the sale of stock pursuant to Stock Awards shall constitute
general funds of the Company.
11. Miscellaneous.
(a) The Board shall have the power to accelerate the time at which a Stock
Award may first be exercised or the time during which a Stock Award or any part
thereof will vest, notwithstanding the provisions in the Stock Award stating the
time at which it may first be exercised or the time during which it will vest.
9.
(b) No Employee, Director or Consultant or any person to whom a Stock Award
is transferred under subsection 6(d) or 8(b) shall be deemed to be the holder
of, or to have any of the rights of a holder with respect to, any shares subject
to such Stock Award unless and until such person has satisfied all requirements
for exercise of the Stock Award pursuant to its terms.
(c) Nothing in the Plan or any instrument executed or Stock Award granted
pursuant thereto shall confer upon any Employee or Consultant or other holder of
Stock Awards any right to continue to serve the Company or any Affiliate in the
capacity in effect at the time the Stock Award was granted or shall affect the
right of the Company or any Affiliate to terminate (i) the employment of any
Employee with or without cause, or (ii) the service of a Consultant subject to
the terms of such Consultant's agreement with the Company or any Affiliate. In
the event that a holder of Stock Awards is permitted or otherwise entitled to
take a leave of absence, the Board or Committee shall have the unilateral right
to (i) determine whether such leave of absence will be treated as a termination
of employment or relationship as consultant for purposes of the Plan and
corresponding provisions of any outstanding Stock Awards, and (ii) suspend or
otherwise delay the time or times at which the shares subject to the Stock
Awards would otherwise vest. The status of any person as an eligible Employee or
Consultant shall not be construed as a commitment that any Stock Award will be
granted under the Plan to such eligible Employee or Consultant, or to eligible
Employees or Consultants generally.
(d) Payments and other benefits received by an Optionholder under the Plan
or under an Option granted pursuant to the Plan shall not be deemed a part of an
Optionholder's regular, recurring compensation for purposes of the termination,
indemnity or severance pay law of any country and shall not be included in, nor
have any effect on, the determination of benefits under any other employee
benefit plan, contract or similar arrangement provided by the Company or a Group
Company, unless expressly so provided by such other plan, contract or
arrangement, or unless the Board expressly determines that an Option or portion
of an Option should be included to reflect competitive compensation practices or
to recognize that an Option has been granted in lieu of a portion of competitive
cash compensation.
(e) The Company may require any person to whom a Stock Award is granted, or
any person to whom a Stock Award is transferred pursuant to subsection 6(d) or
8(b), as a condition of exercising or acquiring stock under any Stock Award, (1)
to give written assurances satisfactory to the Company as to such person's
knowledge and experience in financial and business matters and/or to employ a
purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters, and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock Award; and (2) to
give written assurances satisfactory to the Company stating that such person is
acquiring the stock subject to the Stock Award for such person's own account and
not with any present intention of selling or otherwise distributing the stock.
The foregoing requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (i) the issuance of the shares upon the
exercise of the Option has been registered under a then currently effective
registration statement under the Securities Act, or (ii) as to any particular
requirement, a determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then applicable
securities laws.
10.
(f) To the extent provided by the terms of a Stock Award Agreement, the
person to whom a Stock Award is granted may satisfy any federal, state or local
tax withholding obligation relating to the exercise or acquisition of stock
under a Stock Award by any of the following means or by a combination of such
means: (1) tendering a cash payment; (2) authorizing the Company to withhold
shares from the shares of the common stock otherwise issuable to the participant
as a result of the exercise or acquisition of stock under the Stock Award; or
(3) delivering to the Company owned and unencumbered shares of Company common
stock. Notwithstanding the foregoing, the Company shall not be authorized to
withhold shares of Common Stock at rates in excess of the minimum statutory
withholding rates for federal and state tax purposes, including payroll taxes.
12. Adjustments Upon Changes in Stock.
(a) If any change is made in the stock subject to the Plan, or subject to
any Stock Award (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Plan shall automatically be
adjusted as appropriate in the type(s) and maximum number of securities subject
to the Plan pursuant to subsection 4(a) and the outstanding Stock Awards will be
appropriately adjusted in the type(s) and number of securities and price per
share of stock subject to such outstanding Stock Awards. (The conversion of any
convertible securities of the Company shall not be treated as a "transaction not
involving the receipt of consideration by the Company.")
(b) In the event of (1) a dissolution or liquidation of the Company; (2) a
merger or consolidation in which the Company is not the surviving corporation;
(3) a reverse merger in which the Company is the surviving corporation but the
shares of the Company's common stock outstanding immediately preceding the
merger are converted by virtue of the merger into other property, whether in the
form of securities, cash or otherwise; or (4) any other capital reorganization
in which more than fifty percent (50%) of the shares of the Company entitled to
vote are exchanged, excluding in each case a capital reorganization in which the
sole purpose is to change the state of incorporation of the Company, then all
outstanding Stock Awards shall become vested and exercisable in full for a
period of at least ten (10) days. Outstanding Stock Awards that have not been
exercised prior to such event shall terminate on the date of such event unless
assumed by a successor corporation.
13. Amendment of the Plan and Stock Awards.
(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 12 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the stockholders of
the Company to the extent stockholder approval is necessary for the Plan to
satisfy the requirements of Rule 16b-3 of the Exchange Act or any Nasdaq or
securities exchange listing requirements.
(b) Rights and obligations under any Stock Award granted before amendment
of the Plan shall not be impaired by any amendment of the Plan unless (i) the
Company requests the
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consent of the person to whom the Stock Award was granted and (ii) such person
consents in writing.
(c) The Board at any time, and from time to time, may amend the terms of
any one or more Stock Award; provided, however, that the rights and obligations
under any Stock Award shall not be impaired by any such amendment unless (i) the
Company requests the consent of the person to whom the Stock Award was granted
and (ii) such person consents in writing.
14. Termination or Suspension of the Plan.
(a) The Board may suspend or terminate the Plan at any time. No Stock
Awards may be granted under the Plan while the Plan is suspended or after it is
terminated.
(b) Rights and obligations under any Stock Award granted while the Plan is
in effect shall not be impaired by suspension or termination of the Plan, except
with the written consent of the person to whom the Stock Award was granted.
15. Effective Date of Plan.
The Plan shall become effective on the date on which it is adopted by the
Board.
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