EXHIBIT 10.11
ADVANCED MICRO DEVICES, INC.
1996 STOCK INCENTIVE PLAN
1. PURPOSE
The purpose of this Plan is to encourage key personnel, Outside
Directors and advisors whose long-term service is considered essential to the
Company's continued progress, to remain in the service of the Company or its
Affiliates. By means of the Plan, the Company also seeks to attract new key
employees, Outside Directors and advisors whose future services are necessary
for the continued improvement of operations. The Company intends future
increases in the value of securities granted under this Plan to form part of
the compensation for services to be rendered by such persons in the future. It
is intended that this purpose will be effected through the granting of
Options.
2. DEFINITIONS
The terms defined in this Section 2 shall have the respective meanings
set forth herein, unless the context otherwise requires.
(a) "AFFILIATE" The term "Affiliate" shall mean any corporation,
partnership, joint venture or other entity in which the Company holds an
equity, profits or voting interest of thirty percent (30%) or more.
(b) "BOARD" The term "Board" shall mean the Company's Board of
Directors or its delegate as set forth in Sections 3(d) and 3(e) below.
(c) "CHANGE OF CONTROL" Unless otherwise defined in a Participant's
employment agreement, the term "Change of Control" shall be deemed to
mean any of the following events: (i) any "person" (as such term is used
in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company (not including in
the securities beneficially owned by such person any securities acquired
directly from the Company or any of its Affiliates) representing more
than 20% of either the then outstanding shares of the Common Stock of the
Company or the combined voting power of the Company's then outstanding
voting securities; (ii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board and
any new director (other than a director designated by a person who has
entered into an agreement or arrangement with the Company to effect a
transaction described in clause (i) or (ii) of this sentence) whose
appointment, election, or nomination for election by the Company's
stockholders, was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning
of the period or whose appointment, election or nomination for election
was previously so approved, cease for any reason to constitute a majority
of the Board; or (iii) there is consummated a merger or consolidation of
the Company or subsidiary thereof with or into any other corporation,
other than a merger or consolidation which would result in the holders of
the voting securities of the Company outstanding immediately prior
thereto holding securities which represent immediately after such
merger or consolidation more than 50% of the combined voting power of the
voting securities of either the Company or the other entity which
survives such merger or consolidation or the parent of the entity which
survives such merger or consolidation; or (iv) the stockholders of the
Company approve a plan of complete liquidation of the Company or there is
consummated the sale or disposition by the Company of all or
substantially all of the Company's assets, other than a sale or
disposition by the Company of all or substantially all of the Company's
assets to an entity, at least 80% of the combined voting power of the
voting securities of which are owned by persons in substantially the same
proportions as their ownership of the Company immediately prior to such
sale. Notwithstanding the foregoing (i) unless otherwise provided in a
Participant's employment agreement, no "Change of Control" shall be
deemed to have occurred if there is consummated any transaction or series
of integrated transactions immediately following which the record holders
of the Common Stock of the Company immediately prior to such transaction
or series of transactions continue to have substantially the same
proportionate ownership in an entity which owns all or substantially all
of the assets of the Company immediately prior to such transaction or
series of transactions and (ii) unless otherwise provided in a
Participant's employment agreement, "Change of Control" shall exclude the
acquisition of securities representing more than 20% of either the then
outstanding shares of the Common Stock of the Company or the combined
voting power of the Company's then outstanding voting securities by the
Company or any of its wholly owned subsidiaries, or any trustee or other
fiduciary holding securities of the Company under an employee benefit
plan now or hereafter established by the Company.
(d) "CODE" The term "Code" shall mean the Internal Revenue Code of
1986, as amended to date and as it may be amended from time to time.
(e) "COMPANY" The term "Company" shall mean Advanced Micro Devices,
Inc., a Delaware corporation.
(f) "CONSTRUCTIVE TERMINATION" The term "Constructive Termination"
shall mean a resignation by a Participant who has been elected by the
Board as a corporate officer of the Company due to diminution or adverse
change in the circumstances of such Participant's employment with the
Company, as determined in good faith by the Participant; including,
without limitation, reporting relationships, job description, duties,
responsibilities, compensation, perquisites, office or location of
employment. Constructive Termination shall be communicated by written
notice to the Company, and such termination shall be deemed to occur on
the date such notice is delivered to the Company.
(g) "DISINTERESTED DIRECTOR" The term "Disinterested Director" shall
mean a member of the Board who has not, during the one year prior to
service as an administrator of the Plan, or during such service, been
granted or awarded equity securities of the Company pursuant to this Plan
(except for automatic grants of options to Outside Directors pursuant to
Section 8 hereof) or any other plan of the Company or any of its
Affiliates.
(h) "FAIR MARKET VALUE PER SHARE" The term "Fair Market Value per
Share" shall mean as of any day (i) the closing price for Shares on the
New York Stock Exchange as reported on the composite tape on the day as
of which such determination is being made or, if there was no sale of
Shares reported on the composite tape on such day, on the most recently
preceding day
on which there was such a sale, or (ii) if the Shares are not listed or
admitted to trading on the New York Stock Exchange on the day as of which
the determination is made, the amount determined by the Board or its
delegate to be the fair market value of a Share on such day.
(i) "INSIDER" The term "Insider" means an officer or director of the
Company or any other person whose transactions in the Company's Common
Stock are subject to Section 16 of the Exchange Act.
(j) "ISO" The term "ISO" shall mean a stock option described in
Section 422(b) of the Code.
(k) "NSO" The term "NSO" shall mean a nonstatutory stock option not
described in Section 422(b) of the Code.
(l) "OPTION" The term "Option" shall mean (except as herein otherwise
provided) a stock option granted under this Plan.
(m) "OUTSIDE DIRECTOR" The term "Outside Director" shall mean a member
of the Board of Directors of the Company who is not also an employee of
the Company or an Affiliate.
(n) "PARTICIPANT" The term "Participant" shall mean any person who
holds an Option or Restricted Stock Award granted under this Plan.
(o) "PLAN" The term "Plan" shall mean this Advanced Micro Devices,
Inc. 1996 Stock Incentive Plan, as amended from time to time.
(p) "SHARES" The term "Shares" shall mean shares of Common Stock of
the Company and any shares of stock or other securities received as a
result of the adjustments provided for in Section 11 of this Plan.
3. ADMINISTRATION
(a) The Board, whose authority shall be plenary, shall administer the
Plan and may delegate part or all of its administrative powers with
respect to part or all of the Plan pursuant to Section 3(d); provided,
however, that the Board shall delegate administration of the Plan to the
extent required by Section 3(e).
(b) Except for automatic grants of Options to Outside Directors
pursuant to Section 8 hereof, the Board or its delegate shall have the
power, subject to and within the limits of the express provisions of the
Plan:
(1) To grant Options pursuant to the Plan.
(2) To determine from time to time which of the eligible persons
shall be granted Options under the Plan, the number of Shares for which
each Option shall be granted, the term of each granted Option and the
time or times during the term of each Option within which all or portions
of each Option may be exercised (which at the discretion of the Board of
its delegate may be accelerated.)
(3) To prescribe the terms and provisions of each Option granted
(which need not be identical) and the form of written instrument that
shall constitute the Option agreement.
(4) To take appropriate action to amend any Option hereunder,
including to amend the vesting schedule of any outstanding Option, or to
cause any Option granted hereunder to cease to be an ISO, provided that
no such action adverse to a Participant's interest may be taken by the
Board or its delegate without the written consent of the affected
Participant.
(5) To determine whether and under what circumstances an Option
may be settled in cash or Shares.
(c) The Board or its delegate shall also have the power, subject to
and within the limits of the express provisions of this Plan:
(1) To construe and interpret the Plan and Options granted under
the Plan, and to establish, amend and revoke rules and regulations for
administration of the Plan. The Board or its delegate, in the exercise of
this power, shall generally determine all questions of policy and
expediency that may arise and may correct any defect, omission or
inconsistency in the Plan or in any Option agreement in a manner and to
the extent it shall deem necessary or expedient to make the Plan fully
effective.
(2) Generally, to exercise such powers and to perform such acts
as are deemed necessary or expedient to promote the best interests of the
Company.
(d) The Board may, by resolution, delegate administration of the Plan
(including, without limitation, the Board's powers under Sections 3(b) and
(c) above), under either or both of the following:
(1) with respect to the participation of or granting of Options
to an employee, consultant or advisor who is not an Insider, to a
committee of one or more members of the Board, whether or not such
members of the Board are Disinterested Directors;
(2) with respect to matters other than the selection for
participation in the Plan, substantive decisions concerning the timing,
pricing, amount or other material term of an Option, to a committee of
one or more members of the Board, whether or not such members of the
Board are Disinterested Directors, or to one or more Insiders.
(e) Unless each member of the Board is a Disinterested Director, the
Board shall, by resolution, delegate administration of the Plan with
respect to the participation in the Plan of employees who are Insiders,
including its powers to select such employees for participation in the
Plan, to make substantive decisions concerning the timing, pricing,
amount or any other material term of an Option, to a committee of two or
more Disinterested Directors who are also "outside directors" within the
meaning of Section 162(m) of the Code. Any committee to which
administration of the Plan is so delegated pursuant to this Section 3(e)
may also administer the Plan with respect to an employee described in
Section 3(d)(1) above.
(f) Except as required by Section 3(e) above, the Board shall have
complete discretion to determine the composition, structure, form, term
and operations of any committee established to administer the Plan. If
administration is delegated to a committee, unless the Board otherwise
provides, the committee shall have, with respect to the administration of
the Plan, all of the powers and discretion theretofore possessed by the
Board and delegable to such committee, subject to any constraints which
may be adopted by the Board from time to time and which are not
inconsistent with the provisions of the Plan. The Board at any time may
revest in the Board any of its administrative powers under the Plan,
except under circumstances where a committee is required to administer
the Plan under Section 3(e) above.
(g) The determinations of the Board or its delegate shall be
conclusive and binding on all persons having any interest in this Plan or
in any awards granted hereunder.
4. SHARES SUBJECT TO PLAN
Subject to the provisions of Section 11 (relating to adjustments upon
changes in capitalization), the Shares which may be available for issuance
under the Plan shall not exceed in the aggregate 6,665,000 Shares of the
Company's authorized Common Stock and may be unissued Shares or reacquired
Shares or Shares bought on the market for the purposes of issuance under the
Plan. If any Options granted under the Plan shall for any reason be forfeited
or canceled, terminate or expire, the Shares subject to such Options shall be
available again for the purposes of the Plan. Shares which are delivered or
withheld from the Shares otherwise due on exercise of an Option shall become
available for future awards under the Plan. Shares that have actually been
issued under the Plan, upon exercise of an Option shall not in any event be
returned to the Plan and shall not become available for future awards under
the Plan.
5. ELIGIBILITY
Options may be granted only to full or part-time employees, officers,
directors, consultants and advisors of the Company and/or of any Affiliate;
provided such consultants and advisors render bona fide services not in
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connection with the offer and sale of securities in a capital-raising
transaction. Outside Directors shall not be eligible for the benefits of the
Plan, except as provided in Section 8 hereof. Any Participant may hold more
than one Option at any time; provided that the maximum number of shares which
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are subject to Options granted to any individual shall not exceed in the
aggregate two million (2,000,000) Shares over the full ten-year life of the
Plan.
6. STOCK OPTIONS -- GENERAL PROVISIONS
(a) Except for automatic grants of Options to Outside Directors under
Section 8 hereof, each Option granted pursuant to the Plan may, at the
discretion of the Board, be granted either as an ISO or as an NSO. No
Option may be granted alternatively as an ISO and as an NSO.
(b) To the extent that the aggregate exercise price for ISOs which are
exercisable for the first time by a Participant during any calendar year
(under this Plan or any other plans of the
Company or its subsidiaries or parent (as such terms are defined in
Section 424 of the Code) exceeds $100,000, such Options shall be treated
as NSOs.
(c) No ISO may be granted to a person who, at the time of grant, owns
stock possessing more than 10% of the total combined voting power of the
Company or any of its subsidiaries or parent (as such terms are defined
in Section 424 of the Code) unless the exercise price is at least 110% of
the Fair Market Value per Share of the stock subject to the Option and
the term of the Option does not exceed five (5) years from the date such
ISO is granted.
(d) Notwithstanding any other provision in this Plan, no term of this
Plan relating to ISOs will be interpreted, amended or altered, nor will
any discretion or authority granted under this Plan be exercised, so as
to disqualify this Plan under Section 422 of the Code or, without the
consent of the Participant affected, to disqualify an ISO under Section
422 of the Code.
7. TERMS OF OPTION AGREEMENT
Except as otherwise required by the terms of Section 8 hereof, each
Option agreement shall be in such form and shall contain such terms and
conditions as the Board from time to time shall deem appropriate, subject to
the following limitations:
(a) The term of any NSO shall not be greater than ten (10) years and
one day from the date it was granted. The term of any ISO shall not be
greater than ten (10) years from the date it was granted.
(b) The exercise price of each ISO shall be not less than the Fair
Market Value per Share of the stock subject to the Option on the date the
Option is granted. NSOs may be granted at an exercise price that is not
less than Fair Market Value per Share of the Shares at the time an NSO is
granted.
(c) Unless otherwise specified in the Option agreement, no Option
shall be transferable otherwise than by will, pursuant to the laws of
descent and distribution or pursuant to a qualified domestic relations
order as defined by the Code or Title I of the Employee Retirement Income
Security Act, or the rules thereunder, or as otherwise permitted by
regulations and interpretations under Section 16 of the Exchange Act.
(d) Except as otherwise provided in paragraph (e) of this Section 7 or
in a Participant's employment agreement, the rights of a Participant
(other than an Outside Director) to exercise an Option shall be limited
as follows:
(1) DEATH OR DISABILITY: If a Participant's service is terminated
by death or disability, then the Participant or the Participant's estate,
or such other person as may hold the Option, as the case may be, shall
have the right for a period of twelve (12) months following the date of
death or disability, or for such other period as the Board may fix, to
exercise the Option to the extent the Participant was entitled to
exercise such Option on the date of his death or disability, or to such
extent as may otherwise by specified by the Board (which may so specify
after the date of his death or disability but before expiration of the
Option), provided the actual date of exercise is in no event after
the expiration of the term of the Option. A Participant's estate shall
mean his legal representative or any person who acquires the right to
exercise an Option by reason of the Participant's death or disability.
(2) MISCONDUCT: If a Participant is determined by the Board to
have committed on act of theft, embezzlement, fraud, dishonesty, a breach
of fiduciary duty to the Company (or Affiliate), or deliberate disregard
of the rules of the Company (or Affiliate), or if a Participant makes any
unauthorized disclosure of any of the trade secrets or confidential
information of the Company (or Affiliate), engages in any conduct which
constitutes unfair competition with the Company (or Affiliate), induces
any customer of the Company (or Affiliate) to break any contract with the
Company (or Affiliate), or induces any principal for whom the Company (or
Affiliate) acts as agent to terminate such agency relationship, then,
unless otherwise provided in a Participant's employment agreement,
neither the Participant, the Participant's estate nor such other person
who may then hold the Option shall be entitled to exercise any Option
with respect to any Shares whatsoever, after termination of service,
whether or not after termination of service the Participant may receive
payment from the Company (or Affiliate) for vacation pay, for services
rendered prior to termination, for services rendered for the day on which
termination occurs, for salary in lieu of notice, or for any other
benefits. In making such determination, the Board shall give the
Participant an opportunity to present to the Board evidence on his
behalf. For the purpose of this paragraph, unless otherwise provided in a
Participant's employment agreement, termination of service shall be
deemed to occur on the date when the Company dispatches notice or advice
to the Participant that his service is terminated.
(3) TERMINATION FOR OTHER REASONS: If a Participant's service is
terminated for any reason other than those mentioned above under "DEATH
OR DISABILITY" or "MISCONDUCT," the Participant, the Participant's
estate, or such other person who may then hold the Option may, within
three months following such termination, or within such longer period as
the Board may fix, exercise the Option to the extent such Option was
exercisable by the Participant on the date of termination of his
employment or service, or to the extent otherwise specified by the Board
(which may so specify after the date of the termination but before
expiration of the Option) provided the date of exercise is in no event
after the expiration of the term of the Option.
(4) EVENTS NOT DEEMED TERMINATIONS: Unless otherwise provided in a
Participant's employment agreement, the service relationship shall not be
considered interrupted in the case of (i) a Participant who intends to
continue to provide services as a director, employee, consultant or advisor
to the Company or an Affiliate; (ii) sick leave; (iii) military leave; (iv)
any other leave of absence approved by the Board, provided such leave is
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for a period of not more than 90 days, unless reemployment upon the
expiration of such leave is guaranteed by contract or statute, or unless
provided otherwise pursuant to formal policy adopted from time to time by
the Company and issued and promulgated to employees in writing; or (v) in
the case of transfer between locations of the Company or between the
Company or its Affiliates. In the case of any employee on an approved
leave of absence, the Board may make such provisions respecting suspension
of vesting
of the Option while on leave from the employ of the Company or an
Affiliate as it may deem appropriate, except that in no event shall an
Option be exercised after the expiration of the term set forth in the
Option.
(e) Unless otherwise provided in a Participant's employment agreement,
if any Participant's employment is terminated by the Company for any
reason other than for Misconduct or, if applicable, by Constructive
Termination, within one year after a Change of Control has occurred, then
all Options held by such Participant shall become fully vested for
exercise upon the date of termination, irrespective of the vesting
provisions of the Participant's Option agreement. For purposes of this
subsection (e), the term "Change of Control" shall have the meaning
assigned by this Plan, unless a different meaning is defined in an
individual Participant's Option agreement or employment agreement.
(f) Options may also contain such other provisions, which shall not be
inconsistent with any of the foregoing terms, as the Board or its
delegate shall deem appropriate.
(g) The Board may modify, extend or renew outstanding Options and
authorize the grant of new Options in substitution therefor; provided
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that any such action may not, without the written consent of a
Participant, impair any such Participant's rights under any Option
previously granted.
8. AUTOMATIC GRANTS TO OUTSIDE DIRECTORS
(a) Each Outside Director shall be granted an Option to purchase
12,000 Shares under the Plan (the "FIRST OPTION") on the date such
Outside Director is first elected or appointed as a member of the Board;
provided that an Outside Director who has previously been elected as a
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member of the Board on the Effective Date set forth in Section 14 below
shall not be granted a First Option under the Plan. Thereafter, on the
first business day coincident with or following each annual meeting of
the Company's stockholders, each Outside Director reported as being
elected shall be granted an additional Option to purchase 3,000 Shares
under the Plan (the "ANNUAL OPTION"). Further, subject to the right of
any Outside Director who has not previously been elected as a member of
the Board to receive a First Option, if there are insufficient Shares
available under the Plan for each Outside Director who is eligible to
receive an Annual Option (as adjusted) in any year, the number of Shares
subject to each Annual Option in such year shall equal the total number
of available Shares then remaining under the Plan divided by the number
of Outside Directors who are eligible to receive an Annual Option on such
date, as rounded down to avoid fractional Shares. All Options granted to
Outside Directors shall be subject to the following terms and conditions
of this Section 8.
(b) All Options granted to Outside Directors pursuant to the Plan
shall be NSOs.
(c) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, may consist
entirely of (i) cash, (ii) certified or cashier's check, (iii) other
Shares which (x) either have been owned by the Participant for more than
six months on the date of surrender or were not acquired, directly or
indirectly, from the Company, and (y) have a Fair Market Value per Share
on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised, (iv) delivery of
a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company the amount of
sale or loan proceeds required to pay the exercise price, or (v) any
combination of the foregoing methods of payment.
(d) Each Option granted to an Outside Director shall be for a term of
ten years plus one day. Each First Option shall vest and become
exercisable on July 15 of subsequent calendar years, according to the
following schedule: 4,800 shares in the first calendar year following the
date of grant; 3,600 shares in the second such calendar year; 2,400
shares in the third such calendar year; and 1,200 shares in the fourth
such calendar year. Each Annual Option shall vest and become exercisable
on July 15 of subsequent calendar years according to the following
schedule: in equal installments of 1,000 shares each in the second, third
and fourth calendar years following the date of grant. Any Shares
acquired by an Outside Director upon exercise of an Option shall not be
freely transferable until six months after the date stockholder approval
referred to in Section 14 hereof is obtained.
(e) If an Outside Director's tenure on the Board is terminated for any
reason, then the Outside Director or the Outside Director's estate, as
the case may be, shall have the right for a period of twelve months
following the date such tenure is terminated to exercise the Option to
the extent the Outside Director was entitled to exercise such Option on
the date the Outside Director's tenure terminated; provided the actual
date of exercise is in no event after the expiration of the term of the
Option. An Outside Director's "estate" shall mean the Outside Director's
legal representative or any person who acquires the right to exercise an
Option by reason of the Outside Director's death or disability.
(f) Upon a Change of Control, all Options held by an Outside Director
shall become fully vested and exercisable upon such Change of Control,
irrespective of any other provisions of the Outside Director's Option
agreement.
(g) The automatic grants to Outside Directors pursuant to this Section
8 shall not be subject to the discretion of any person. The other
provisions of this Plan shall apply to the Options granted automatically
pursuant to this Section 8, except to the extent such other provisions
are inconsistent with this Section 8.
9. PAYMENTS AND LOANS UPON EXERCISE OF OPTIONS
With respect to Options other than Options granted to Outside Directors
pursuant to Section 8, the following provisions shall apply:
(a) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be
determined by the Board or its delegate (and, in the case of an ISO,
shall be determined at the time of grant) and may consist entirely of (i)
cash, (ii) certified or cashier's check, (iii) promissory note, (iv)
other Shares which (x) either have been owned by the Participant for more
than six months on the date of surrender or were not acquired, directly
or indirectly, from the Company, and (y) have a Fair Market Value per
Share on the date of surrender equal to the aggregate exercise price of
the Shares as to which said Option shall be exercised, (v) delivery of a
properly executed exercise notice together with irrevocable instructions
to a broker to promptly deliver to the Company the amount of sale or
loan proceeds required to pay the exercise price, or (vi) any combination
of the foregoing methods of payment. Any promissory note shall be a full
recourse promissory note having such terms as may be approved by the
Board and bearing interest at a rate sufficient to avoid imputation of
income under Sections 483, 1274 or 7872 of the Code; provided that
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Participants who are not employees or directors of the Company will not
be entitled to purchase Shares with a promissory note unless the note is
adequately secured by collateral other than the Shares; provided further,
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that the portion of the exercise price equal to the par value, if any, of
the Shares must be paid in cash;
(b) The Company may make loans or guarantee loans made by an appropriate
financial institution to individual Participants, including Insiders, on
such terms as may be approved by the Board for the purpose of financing the
exercise of Options granted under the Plan and the payment of any taxes
that may be due by reason of such exercise.
10. TAX WITHHOLDING
(a) Where, in the opinion of counsel to the Company, the Company has
or will have an obligation to withhold federal, state or local taxes
relating to the exercise of any Option, the Board may in its discretion
require that such tax obligation be satisfied in a manner satisfactory to
the Company. With respect to the exercise of an Option, the Company may
require the payment of such taxes before Shares deliverable pursuant to
such exercise are transferred to the holder of the Option.
(b) With respect to the exercise of an Option, a Participant may elect
(a "WITHHOLDING ELECTION") to pay his minimum statutory withholding tax
obligation by the withholding of Shares from the total number of Shares
deliverable pursuant to the exercise of such Option, or by delivering to
the Company a sufficient number of previously acquired Shares, and may
elect to have additional taxes paid by the delivery of previously
acquired Shares, in each case in accordance with rules and procedures
established by the Board. Previously owned Shares delivered in payment
for such additional taxes must have been owned for at least six months
prior to the delivery or must not have been acquired directly or
indirectly from the Company and may be subject to such other conditions
as the Board may require. The value of Shares withheld or delivered shall
be the Fair Market Value per Share on the date the Option becomes
taxable. All Withholding Elections are subject to the approval of the
Board must be made in compliance with rules and procedures established by
the Board.
11. ADJUSTMENTS OF AND CHANGES IN CAPITALIZATION
If there is any change in the Common Stock of the Company by reason of
any stock dividend, stock split, spin-off, split up, merger, consolidation,
recapitalization, reclassification, combination or exchange of Shares, or any
other similar corporate event, then the Board shall make appropriate
adjustments to the number of Shares theretofore appropriated or thereafter
subject or which may become subject to an Option under the Plan. Outstanding
Options shall also be automatically converted as to price and other terms if
necessary to reflect the foregoing events. No right to purchase fractional
Shares shall result from any adjustment in Options pursuant to this Section
11. In case of any such adjustment, the Shares subject to the Option shall be
rounded down to the nearest whole Share. Notice of any adjustment shall be
given by
the Company to each holder of any Option which shall have been so adjusted and
such adjustment (whether or not such notice is given) shall be effective and
binding for all purposes of the Plan.
12. PRIVILEGES OF STOCK OWNERSHIP
No Participant will have any rights of a stockholder with respect to
any Shares until the Shares are issued to the Participant. After Shares are
issued to the Participant, the Participant will be a stockholder and have all
the rights of a stockholder with respect to such Shares, including the right
to vote and receive all dividends or other distributions made or paid with
respect to such Shares.
13. EXCHANGE AND BUYOUT OF AWARDS; RULE 16b-3
The Board or its delegate may, at any time or from time to time,
authorize the Company, with the consent of the respective Participants, to
issue new Options in exchange for the surrender and cancellation of any or all
outstanding Options, except as otherwise provided in Section 7(i) with respect
to Insiders. The Board or its delegate may at any time buy from a Participant
an Option previously granted with payment in cash, Shares or other
consideration, based on such terms and conditions as the Board or its delegate
and the Participant may agree. Grants of Options to Insiders are intended to
comply with the applicable provisions of Rule 16b-3 and such Options shall
contain such additional conditions or restrictions, if any, as may be required
by Rule 16b-3 to be in the written agreement relating to such Options in order
to qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.
14. EFFECTIVE DATE OF THE PLAN
This Plan will become effective when adopted by the Board (the "EFFECTIVE
DATE"). This Plan must be approved by the stockholders of the Company,
consistent with applicable laws, within twelve (12) months before or after the
Effective Date. Upon the Effective Date, the Board or its delegate may grant
Options pursuant to this Plan; provided that no Option may be exercised prior to
the initial stockholder approval of this Plan. In the event that stockholder
approval is not obtained within the time period provided herein, all Options
granted hereunder will be canceled. So long as Insiders are Participants, the
Company will comply with the requirements of Rule 16b-3 with respect to
stockholder approval.
15. AMENDMENT OF THE PLAN
(a) The Board at any time, and from time to time, may amend the Plan;
provided that, except as provided in Section 11 (relating to adjustments
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upon changes in capitalization), no amendment for which stockholder
approval is required shall be effective unless such approval is obtained
within the required time period. Whether stockholder approval is required
shall be determined by the Board.
(b) It is expressly contemplated that the Board may, without seeking
approval of the Company's stockholders, amend the Plan in any respect
necessary to provide the Company's
employees with the maximum benefits provided or to be provided under
Section 422 of the Code or Section 16 of the Exchange Act and the
regulations promulgated thereunder and/or to bring the Plan or Options
granted under it into compliance therewith.
(c) Rights and obligations under any Option granted before any
amendment of the Plan shall not be altered or impaired by amendment of
the Plan, except with the consent of the person who holds the Option,
which consent may be obtained in any manner that the Board or its
delegate deems appropriate.
(d) To the extent required by Rule 16b-3, the Board may not amend the
provisions of Section 8 hereof more than once every six months, other than
to comport with changes in the Code, the Employee Retirement Income
Security Act, or the rules thereunder.
16. REGISTRATION, LISTING, QUALIFICATION, APPROVAL OF STOCK AND OPTIONS
An award under this Plan will not be effective unless such award is in
compliance with all applicable federal and state securities laws, rules and
regulations of any governmental body, and the requirements of any stock exchange
or automated quotation system upon which the Shares may then be listed or
quoted, as they are in effect on the date of grant of the award and also on the
date of exercise or other issuance. Notwithstanding any other provision in this
Plan, the Company will have no obligation to issue or deliver certificates for
Shares under this Plan prior to: (a) obtaining any approvals from governmental
agencies that the Company determines are necessary or advisable; and/or (b)
completion of any registration or other qualification of such Shares under any
state or federal law or ruling of any governmental body that the Company
determines to be necessary or advisable. The Company will be under no
obligation to register the Shares with the Securities and Exchange Commission or
to effect compliance with the registration, qualification or listing
requirements of any state securities laws, stock exchange or automated quotation
system, and the Company will have no liability for any inability or failure to
do so.
17. NO RIGHT TO EMPLOYMENT
Nothing in this Plan or in any Option shall be deemed to confer on any
employee any right to continue in the employ of the Company or any Affiliate
or to limit the rights of the Company or its Affiliates, which are hereby
expressly reserved, to discharge an employee at any time, with or without
cause, or to adjust the compensation of any employee.
18. MISCELLANEOUS
The use of any masculine pronoun or similar term is intended to be
without legal significance as to gender.