EXHIBIT 4.03
INSYNC SYSTEMS. INC.
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AMENDED AND RESTATED
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1993 STOCK OPTION PLAN
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1. Purpose and Definitions.
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(a) The 1993 Stock Option Plan (the "Option Plan" or the "Amended and
Restated Option Plan") of INSYNC Systems, Inc., a California corporation (the
"Company"), is hereby amended and restated in its entirety. The Option Plan
shall provide for the issuance of incentive stock options ("ISOs") and
nonqualified stock options ("NSOs"). The Option Plan was originally dated
August 9, 1993 for reference purposes. This amendment and restatement is
effective as of April 2, 1995.
(b) The Option Plan's purpose is to promote the long-term success of
the Company by attracting, motivating and retaining key executives, employees,
officers, directors, and consultants (the "Participants"). The Option Plan
seeks to balance Participants' and shareholder interests by providing incentives
to the Participants in the form of stock options which offer rewards for
achieving the Company's long-term strategic and financial objectives.
(c) The Option Plan is intended to give Participants an opportunity to
purchase shares of Company Stock (as defined in Section 3 below) pursuant to (i)
options which may qualify as incentive stock options ("ISOs") under Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"), or (ii)
nonstatutory stock options ("NSOs").
(d) The term "Affiliates" as used herein means parent or subsidiary
corporations, as such terms are defined in Section 424(e) and (f) of the Code,
including parents or subsidiaries which become such after adoption of the Option
Plan.
2. Administration of the Plan.
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(a) The Option Plan shall be administered by the Company's Board of
Directors (the "Board") until such time that the Company offers its shares in a
Public Offering. The period extending up to the Public Offering shall be
referred to as the "Private Term" and any subsequent period until the options
expire as the "Public Term." The term "Public Offering" means a public offering
of the Company's common stock of the same series as underlies options issued
under the Option Plan, which is registered on Form S-1 promulgated by the
Securities and Exchange Commission (or any successor form adopted after the date
of the Option Plan), is firmly underwritten pursuant to an agreement with one or
more nationally recognized or regionally recognized underwriting firms, and
results in gross aggregate proceeds, before deducting underwriting discounts and
expenses, of at least $10 million payable to the Company and to the Company's
shareholders.
(b) In the event the Company offers its shares in a Public Offering,
the Option Plan will be administered by a committee consisting entirely of
directors qualifying as "disinterested persons"
as such term is defined in Rule 16b-3 promulgated by the Securities and Exchange
Commission (the "Committee"). The Committee shall consist of at least two
persons. Members of the Committee shall serve at the pleasure of the Board. From
and after the date on which the Stock is registered under Section 12(g) of the
Securities Exchange Act of 1934 (the "1934 Act Effective Date") whether before
or after completion of a Public Offering, none of the members of the Committee
shall receive, while serving on the Committee, or with respect to any member of
the Committee appointed after the 1934 Act Effective Date, during the lesser of
(i) the one year period preceding appointment to the Committee and (ii) the
period commencing on the 1934 Act Effective Date and terminating on the date of
appointment to the Committee, a grant or award of equity securities under [x]
the Option Plan or [y] any other plan of the Company or its Affiliates under
which the participants are entitled to acquire Stock (including restricted
Stock), stock options, stock bonuses, related rights or stock appreciation
rights of the Company or any of its Affiliates, other than pursuant to
transactions in any such other plan which do not disqualify a director from
being a disinterested person under Rule 16b-3.
(c) The Board or the Committee may from time to time determine which
employees and consultants of the Company or of its Affiliates shall be granted
options under the Option Plan, the terms thereof (including without limitation
determining whether the option is an incentive stock option and the times at
which the options shall become exercisable), and the number of shares for which
an option or options may be granted.
(d) If the Company has a right of first refusal to purchase Stock
whether pursuant to Section 9 of this Option Plan or otherwise, the certificates
therefor shall have imprinted or typed thereon a legend or legends summarizing
or referring to such right.
(e) The Board or the Committee shall have the sole authority, in its
absolute discretion, to adopt, amend and rescind such rules and regulations,
consistent with the provisions of the Option Plan, as, in its opinion, may be
advisable in the administration of the Option Plan, to construe and interpret
the Option Plan, the rules and regulations, and the instruments evidencing
options granted under the Option Plan and to make all other determinations
deemed necessary or advisable for the administration of the Option Plan. All
decisions, determinations and interpretations of the Board or the Committee
shall be binding on all Participants in the Option Plan.
3. Stock Subject to the Plan.
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(a) "Stock" shall mean Common Stock of the Company or such stock as
may be changed as contemplated by Section 3(c) below. Stock shall include
shares drawn from either the Company's authorized but unissued shares of Common
Stock or from reacquired shares of Common Stock, including without limitation
shares repurchased by the Company in the open market.
(b) Options may be granted under the Option Plan from time to time to
eligible persons to purchase an aggregate of up to 2,900,000 shares of Stock.
Stock options awarded pursuant to the Option Plan which are forfeited,
terminated, surrendered or cancelled for any reason prior to
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exercise shall again become available for grants under the Option Plan
(including any option cancelled in accordance with the cancellation/re-grant
provisions of Section 6(e) herein).
(c) If there shall be any change in the Stock subject to the Option
Plan, including Stock subject to any option granted hereunder, through merger,
consolidation, recapitalization, reorganization, reincorporation, stock split,
reverse stock split, stock dividend, combination or reclassification of the
Company's Stock or other similar events, an appropriate adjustment shall be made
by the Board or the Committee in the number of shares and/or the option price
with respect to any unexercised shares of Stock. Consistent with the foregoing,
in the event that the outstanding Stock is changed into another class or series
of capital stock of the Company, outstanding options to purchase Stock granted
under the Option Plan shall become options to purchase such other class or
series and the provisions of this Section 3(c) shall apply to such new class or
series.
(d) the Company may grant options under the Option Plan in
substitution for options held by employees of another company who become
employees of the Company as a result of merger or consolidation. The Company
may direct that substitute options be granted on such terms and conditions as
deemed appropriate by the Board or the Committee.
(e) the aggregate number of shares approved for issuance pursuant to
the Option Plan may not be exceeded without amending the Option Plan and
obtaining shareholder approval within twelve months of such amendment.
4. Eligibility.
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Persons who shall be eligible to receive stock options granted under
the Option Plan shall be those employees, directors, and consultants as the
Board or the Committee in its discretion determines should be awarded such
incentives given the best interests of the Company; provided, however, that (i)
ISOs may only be granted to employees of the Company and its Affiliates and (ii)
any person holding capital stock possessing more than 10% of the total combined
voting power of all classes of Stock of the Company or any Affiliate shall not
be eligible to receive ISOs unless the exercise price per share of Stock is at
least 110% of the fair market value of the Stock on the date the option is
granted.
5. Exercise Price for Options Granted under the Plan.
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(a) All ISOs and NSOs will have per share exercise prices as
determined by the Board, subject to the following:
(i) NSOs shall not be granted at exercise prices per share less
than 85% of the per-share fair market value of the Stock on the date of grant.
(ii) ISOs shall not be granted at exercise prices per share less
than 100% of such fair market value.
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(iii) No ISOs or NSOs shall be granted under the Option Plan to
any person possessing more than 10% of the total combined voting power of all
classes of stock of the Company or any Affiliate at exercise prices per share
less than 110% of such fair market value.
(iv) The exercise prices of all ISOs or NSOs granted under the
Option Plan shall be subject to adjustment to the extent provided in Section
3(c), above.
(b) Fair market value of the Common Stock on the grant date shall be
determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System, its fair market value shall be the
closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system for the last market trading day
prior to the time of determination, as reported in The Wall Street Journal or
such other source as the Board of Directors deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ System (but not
on the Nasdaq National Market thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its fair market value
shall be the mean between the high bid and low asked prices for the Common Stock
on the last market trading day prior to the day of determination, or;
(ii) In the absence of an established market for the Common
Stock, the fair market value thereof shall be determined in good faith by the
Board of Directors.
6. Terms and Conditions of Options.
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(a) Each option granted pursuant to the Option Plan shall be evidenced
by a written stock option agreement (the "Option Agreement") executed by the
Company and the person to whom such option is granted. The option agreement
shall designate whether the option is an ISO or an NSO.
(b) The term of each ISO and each NSO shall be no more than 10 years,
except that the term of each ISO issued to any person possessing more than 10%
of the voting power of all classes of stock of the Company or any Affiliate
shall be no more than 5 years.
(c) In the case of ISOs, the aggregate fair market value (determined
as of the time such option is granted) of the Stock as to which ISOs are
exercisable for the first time by such individual during any calendar year
(under this Option Plan and any other plans of the Company or its Affiliates, if
any) shall not exceed the amount specified in Section 422(d) of the Code, or any
successor provision in effect at the time an ISO becomes exercisable.
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(d) Notwithstanding the designation of an option as an ISO in an
Option Agreement, such designations, to the extent that the aggregate fair
market value:
(i) of Stock subject to a Participant's ISO granted by the
Company, any Parent or Subsidiary, which
(ii) become exercisable for the first time during any calendar
year (under all plans of the Company or any Parent or Subsidiary) exceeds
$100,000, such excess options shall be treated as NSOs. For purposes of this
Section 6(d), ISOs shall be taken into account in the order in which they were
granted, and the fair market value of the Stock shall be determined as of the
time the option with respect to such Stock is granted.
(e) The Option Agreement may contain such other terms, provisions and
conditions regarding vesting, repurchase or other similar provisions, to the
extent consistent with the Option Plan, as may be determined by the Board or the
Committee. If an option, or any part thereof, is intended to qualify as an ISO,
the Option Agreement shall contain those terms and conditions which the Board or
the Committee determine are necessary to so qualify under Section 422 of the
Code. Should any provision of the Option Plan or the Option Agreement of any
option intended to qualify as an ISO conflict with the Code such that the option
would not so qualify, the Option Plan or Option Agreement, as the case may be,
shall be deemed automatically modified to the minimum extent necessary in order
for such option to so qualify.
(f) The Board or the Committee shall have full power and authority to
effect at any time and from time to time, with the consent of the affected
Participants, the cancellation of any or all outstanding options under the
Option Plan and to grant in substitution new options under the Option Plan
covering the same or different numbers of shares of Stock with the same or
different exercise prices.
(g) As a condition to option grants under the Option Plan, the
Participant agrees to grant the Company the repurchase rights contained in
Section 9 of this Option Plan.
(h) All options must become exercisable for Participants at least
twenty percent (20%) per year over the first five years from the date they are
granted. Except as otherwise provided herein or in the Option Agreement, an
exercisable option may be exercised at any time before the earlier of (i) the
expiration date of the option or (ii) 120 months after the date of grant.
(i) In the event of termination of a Participant's status as an
employee or consultant of the Company (but not in the event of a Participant's
change of status from employee to consultant (in which case a Participant's ISO
shall automatically convert to an NSO on the ninety-first (91st) day following
such change of status) or from consultant to employee), such Participant may
exercise his or her options, to the extent the Participant was entitled to
exercise such options at the date of such termination, during the period of time
determined by the Board. Such period of time shall be at least 30 days. In the
case of ISOs, such period shall be no longer than 90 days. In the case of NSOs,
such period of time shall be no longer than 180 days. However, in the case of
all ISOs and NSOs granted prior to
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the date on which this Amended and Restated Option Plan is adopted by the Board,
such period of time shall be 30 days. In no event shall options be exercisable
later than the expiration date set forth in the Option Agreement relating to
such options. To the extent that a Participant was not entitled to exercise an
option at the date of such termination, or if Participant does not exercise such
option to the extent so entitled within the time specified herein, such option
shall terminate.
(j) In the event of termination of a Participant's status as an
employee or consultant of the Company as a result of his or her disability, a
Participant may, but only within twelve (12) months from the date of such
termination, or, in the case of options granted before the Board adopts this
Amended and Restated Option Plan, six (6) months, (and in no event later than
the expiration date of the term of such options as set forth in the Option
Agreement), exercise the options to the extent otherwise exercisable at the date
of such termination; provided, however, that if such disability is not a
"disability" as such term is defined in Section 22(e)(3) of the Code, in the
case of an ISO such ISO shall automatically convert to an NSO on the day three
months and one day following such termination. To the extent that Participant is
not entitled to exercise the options at the date of termination, or if
Participant does not exercise such options to the extent so entitled within the
time specified herein, the options shall terminate.
(k) In the event of the death of a Participant, the options may be
exercised at any time within twelve (12) months or, in the case of options
granted before the Board adopts this Amended and Restated Option Plan, six (6)
months, following the date of death (but in no event later than the expiration
of the term of such options), by the Participant's estate or by a person who
acquired the right to exercise the options by bequest or inheritance, but only
to the extent that the Participant was entitled to exercise the options at the
date of death. If, after death, the Participant's estate or a person who
acquired the right to exercise the options by bequest or inheritance does not
exercise the options within the time specified herein, the options shall
terminate.
(l) No fractional shares shall be issued under the Option Plan,
whether by initial grants or any adjustments to the Option Plan.
7. Use of Proceeds.
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Cash proceeds realized from the sale of Stock under the Option Plan
shall constitute general funds of the Company.
8. Amendment, Suspension or Termination of the Plan.
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(a) The Board may at any time suspend or terminate the Option Plan,
and may amend it from time to time in such respects as the Board may deem
advisable provided that (i) such amendment, suspension or termination complies
with all applicable state and federal requirements and requirements of any stock
exchange on which the Stock is then listed, including any applicable requirement
that the Option Plan or an amendment to the Option Plan be approved by the
shareholders, and (ii) the Board
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shall not amend the Option Plan to increase the maximum number of shares subject
to ISOs under the Option Plan or to change the description or class of persons
eligible to receive ISOs under the Option Plan without the consent of the
shareholders of the Company sufficient to approve the Option Plan in the first
instance. The Option Plan shall terminate on the earlier of (i) ten (10) years
from the latest date on which the Option Plan or an amendment thereto is
approved by the Company's shareholders or (ii) the date on which no additional
shares of stock are available for issuance under the Option Plan.
(b) Any amendment or termination of the Option Plan shall not affect
options already granted, and such options shall remain in full force and effect
as if this Option Plan had not been amended or terminated, unless mutually
agreed otherwise between the optionee and the Board, which agreement must be in
writing and signed by the Participant and the Company.
9. Repurchase.
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If a holder of options who is an employee at the date of grant
terminates employment at any time during the Private Term, with or without
cause, the Company shall have a freely assignable option exercisable at any time
within three months following the date of termination to repurchase any shares
held as a consequence of the exercise of the options before or after
termination. The Company may exercise its options at any time during the three-
month period by delivering to the holder a written notice of exercise (the
"Notice of Exercise"). The Company's Notice of Exercise shall set forth the
Company's intention to repurchase the shares and shall contain a statement of
the repurchase price, in accordance with the following provisions of this
Section 9. The Company's statement of the repurchase price shall be final and
binding upon the holder, unless within thirty days following the date of the
Notice of Exercise the holder shall deliver to the Company a written notice
objecting to the statement and setting forth in reasonable detail the basis for
the objection (an "Objection Notice"). If the holder issues an Objection
Notice, the parties shall meet promptly thereafter to resolve their differences,
and in the absence of a resolution of the matter within an additional thirty
days following the date of the Objection Notice, either party may elect to
submit the matter of the repurchase price to arbitration in accordance with the
provisions of the Option Agreement. Upon the earliest of (i) the lapse of
thirty days following the issuance of a Notice of Objection without an
intervening Objection Notice, (ii) a written agreement between the Company and
the holder as to the proper repurchase price or (iii) a final award in
arbitration, the Company or its assignee shall pay the repurchase price to the
holder and title to the repurchased shares shall pass to the Company or its
assignee, as the case may be. Notwithstanding the foregoing, the Company shall
be entitled to withdraw its Notice of Exercise at any time up to the date when
shares are actually purchased by the Company or its assignee. All shares issued
upon the exercise of options shall be legended to reflect the existence of this
option, which will be binding on the original optionee and any subsequent holder
of the shares other than the Company or any assignee acquiring the shares
following a Notice of Exercise. The repurchase price shall be the higher of the
original exercise price or fair market value as of the date of termination, as
determined by the Board of Directors of the Company. If the Company or its
assignee does not exercise the right of repurchase within the three-month
period, the holder of the shares shall be entitled to retain the shares free and
clear of any and all claims by the Company pursuant to this Section 9 and shall
be entitled to have the legend which refers
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to the Company's option to repurchase the shares removed from the certificate
representing the shares. The Company shall have no repurchase rights once the
Public Term begins. In the discretion of the Board or the Committee, the Company
may or may not have repurchase rights with respect to options granted to persons
who were not employees on the date of grant.
10. Right of First Refusal.
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At the discretion of the Board or the Committee at the time the
options are granted, the transferability of shares issued pursuant to the
exercise of options may be restricted such that they may not be transferred to a
third party without first being offered to the Company at the same price and
terms upon which the Participant proposes to sell them to the third party, or
upon such other terms and conditions as the Board may deem appropriate. The
Company must exercise its option to purchase such shares within 30 days of
notice by the Participant that he or she proposes to sell the shares. The
Company may assign its rights under this paragraph to any person, including
shareholders in the Company. The Company will have no purchase right pursuant
to this paragraph once the Public Term begins.
11. Assignability of Options and Rights.
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Each option granted pursuant to this Option Plan shall, during the
Participant's lifetime, be exercisable only by the Participant, and neither the
option nor any right to purchase Stock shall be transferred, assigned or pledged
by the Participant, by operation of law or otherwise, other than by will upon a
beneficiary designation executed by the optionee and delivered to the Company or
the laws of descent and distribution.
12. Payment Upon Exercise.
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Payment of the purchase price upon exercise of any option or right to
purchase Stock granted under this Option Plan shall be made by giving the
Company written notice of such exercise, specifying the number of such shares as
to which the option is exercised. Such notice shall be accompanied by payment
of an amount equal to the Option Price of such shares. Such payment may be (i)
cash, (ii) check drawn against sufficient funds, (iii) delivery to the Company
of the Participant's promissory note, in which event the Participant must be an
employee or director of the Company, (iv) other Stock which (x) in the case of
Stock acquired upon exercise of options have been owned by the Participant for
more than six months on the date of surrender and (y) have a fair market value
on the date of surrender equal to the aggregate exercise price of the Stock as
to which said options shall be exer cised, (v) such other consideration as the
Board, in its sole discretion, determines and is consistent with the Option
Plan's purpose and applicable law, or (vi) in any combination of the foregoing.
Any Stock used to exercise options shall be valued in accordance with procedures
established by the Board. Any note used to exercise options to purchase Stock
shall be a full recourse, interest-bearing obligation secured by shares in the
Company and containing such terms as the Committee shall determine. If a note
is used to exercise options, the optionee agrees to execute such further
documents as the Company may deem necessary or appropriate in connection with
issuing the note, perfecting a security interest in the
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stock purchased with the note and any related terms the Company may propose.
Such further documents may include, without limitation, a security agreement, an
escrow agreement, and an assignment separate from certificate. If accepted by
the Committee in its discretion, such consideration also may be paid through a
broker-dealer sale and remittance procedure pursuant to which the Participant
(a) shall provide irrevocable written instructions to a designated brokerage
firm to effect the immediate sale of the purchased shares and remit to the
Company, out of the sale proceeds available on the settlement date, sufficient
funds to cover the aggregate option price payable for the purchased shares plus
all applicable Federal and State income and employment taxes required to be
withheld by the Company in connection with such purchase and (b) shall provide
written directives to the Company to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete the sale
transaction.
13. Withholding Taxes.
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(a) Shares of Stock issued hereunder shall be delivered to a
Participant only upon payment by such person to the Company of the amount of any
withholding tax required by applicable federal, state, local or foreign law.
The Company shall not be required to issue any Stock to a Participant until such
obligations are satisfied.
14. Ratification.
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This Option Plan and all options issued under this Option Plan shall
be void unless this Option Plan is approved or ratified by (i) the Board; and
(ii) a majority of the votes cast at a shareholder meeting at which a quorum
representing at least a majority of the outstanding shares of Stock is (either
in person or by proxy) present and voting on the Option Plan within twelve
months of the date this Option Plan is adopted by the Board. No ISOs shall be
exercisable prior to the date such shareholder approval is obtained.
15. Corporate Transactions.
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(a) For the purpose of this Section 15, a "Corporate Transaction"
shall include any of the following shareholder-approved transactions to which
the Company is a party:
(i) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which is to
change the state of the Company's incorporation;
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company in liquidation or dissolution of
the Company; or
(ii) any reverse merger in which the Company is the surviving
entity but in which securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities are
transferred to holders different from those who held such securities immediately
prior to such merger.
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(b) Upon the occurrence of a Corporate Transaction, if the surviving
corporation or the purchaser (the "Surviving Corporation"), as the case may be,
does not assume or provide a substitute for the obligations of the Company under
the Option Plan, then irrespective of the vesting provisions contained in
individual option agreements, all outstanding options shall immediately become
fully vested and exercisable, including for shares of Stock as to which such
options would not otherwise be vested and exercisable.
(c) To the extent that the Option Plan is unaffected and assumed by
the Surviving Corporation or its parent company, a Corporate Transaction shall
have no effect on outstanding options, and these options shall continue in
effect according to their terms. Each outstanding option under this Option Plan
which is assumed in connection with the Corporate Transaction or is otherwise to
continue in effect shall be appropriately adjusted, immediately after such
Corporate Transaction, to apply and pertain to the number and class of
securities which would have been issued to the Participant in connection with
the consummation of such Corporate Transaction had such person exercised the
option immediately prior to such Corporate Transaction. Appropriate adjustments
shall also be made to the option price payable per share, provided the aggregate
option price payable for such securities shall remain the same. In addition,
the class and number of securities available for issuance under this Option Plan
following the consummation of the Corporate Transaction shall be appropriately
adjusted. Furthermore, if the Participant's status as an employee of the Company
or employee of the Surviving Corporation, as applicable, is terminated by the
Successor Corporation as a result of an Involuntary Termination (as defined
below) other than for Cause (as defined below) within twelve months following a
Corporate Transaction, the Participant shall fully vest in and have the right to
exercise all his or her outstanding options, including for shares of Stock as to
which such options would not otherwise be vested or exercisable. Thereafter,
the option shall remain exercisable in accordance with Sections 6(i) through (k)
above.
For purposes of this section, any of the following events shall
constitute an "Involuntary Termination": (i) a significant reduction of the
Participant's duties, authority or responsibilities, relative to the
Participant's duties, authority or responsibilities as in effect immediately
prior to the Corporate Transaction, or the assignment to Participant of such
reduced duties, authority or responsibilities; (ii) a substantial reduction of
the facilities and perquisites (including office space and location) available
to the Participant immediately prior to the Corporate Transaction; (iii) a
reduction in the base salary of the Participant as in effect immediately prior
to the Corporate Transaction; (iv) a material reduction in the kind or level of
employee benefits, including bonuses, to which the Participant was entitled
immediately prior to the Corporate Transaction with the result that the
Participant's overall benefits package is sig nificantly reduced; (v) the
relocation of the Participant to a facility or a location more than fifty (50)
miles from the Participant's then present location, without the Participant's
express written consent; (vi) any purported termination of the Participant by
the Surviving Corporation which is not effected for disability or for Cause, or
any purported termination for which the grounds relied upon are not valid; (vii)
or any act or set of facts or circumstances which would, under California case
law or statute constitute a constructive termination of the Participant.
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For purposes of this section, "Cause" shall mean (i) any act of
personal dishonesty taken by the Participant in connection with his
responsibilities as an employee and intended to result in substantial personal
enrichment of the Participant, (ii) the conviction of a felony, (iii) a willful
act by the Participant which constitutes gross misconduct and which is injurious
to the Surviving Corporation, and (iv) following delivery to the Participant of
a written demand for performance from the Surviving Corporation which describes
the basis for the Surviving Corporation's belief that the Participant has not
substantially performed his duties, continued violations by the Participant of
the Participant's obligations to the Surviving Corporation which are
demonstrably willful and deliberate on the Participant's part.
(d) The grant of options under this Option Plan shall in no way affect
the right of the Company to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.
16. Loans or Guarantee of Loans.
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(a) The Board or the Committee may, in its absolute discretion, assist
any Participant in the exercise of options granted under this Option Plan,
including the satisfaction of any Federal and State income and employment tax
obligations arising therefrom by (i) authorizing the extension of a loan from
the Company to such Participant, (ii) permitting the Participant to pay the
exercise price for the Stock in installments over a period of years or (iii)
authorizing a guarantee by the Company of a third party loan to the Participant.
The terms of any loan, installment method of payment or guarantee (including the
interest rate and terms of repayment) will be upon such terms as the Board or
the Committee specifies in the applicable option or issuance agreement or
otherwise deems appropriate under the circumstances. Loans, installment
payments and guarantees may be granted with or without security or collateral
(other than to Participants who are not employees, in which event the loan must
be adequately secured by collateral other than the purchased shares). However,
the maximum credit available to the Participant may not exceed the exercise or
purchase price of the acquired shares of Stock plus any Federal and State income
and employment tax liability incurred by the Participant in connection with the
acquisition of such shares of Stock.
(b) The Board or the Committee may, in its absolute discretion,
determine that one or more loans extended under this financial assistance
program shall be subject to forgiveness by the Company in whole or in part upon
such terms and conditions as the Board or the Committee may deem appropriate.
17. Regulatory Approvals.
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The obligation of the Company with respect to common shares issued
under the Plan shall be subject to all applicable laws, rules and regulations
and such approvals by any governmental agencies or stock exchanges as may be
required. The Company reserves the right to restrict, in whole or in part, the
delivery of common shares under the Plan until such time as any legal
requirements or regulations have been met relating to the issuance of common
shares, to their registration or qualification under the
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Securities Exchange Act of 1934, if applicable, or any applicable state
securities laws, or to their listing on any stock exchange at which time such
listing may be applicable.
18. No Employment/Service Rights.
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Neither the action of the Company in establishing this Option Plan,
not any action taken by the Board or the Committee hereunder, nor any provision
of this Option Plan shall be construed so as to grant any individual the right
to remain in the employ or service of the Company (or any parent, subsidiary or
affiliated corporation) for any period of specific duration, and the Company (or
any parent, subsidiary or affiliated corporation retaining the services of such
individual) may terminate such individual's employment or service at any time
and for any reason, with or without cause.
19. Information to Participants. The Company shall provide to each
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Participant, not less frequently than annually, copies of annual financial
statements. The Company shall also provide such statements to each individual
who acquires Stock pursuant to the Option Plan while such individual owns such
Stock. The Company shall not be required to provide such statements to key
employees whose duties in connection with the Company assure their access to
equivalent information.
20. Miscellaneous Provisions.
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(a) The right to acquire Stock or other assets under this Option Plan
may not be assigned, encumbered or otherwise transferred by any Participant
except as specifically provided herein.
(b) The provisions of this Option Plan shall be governed by the laws
of the State of California, as such laws are applied to contracts entered into
and performed in such State.
(c) The provisions of this Option Plan shall inure to the benefit of,
and be binding upon, the Company and its successors or assigns, whether by
Corporate Transaction or otherwise, and the Participants, the legal
representatives of their respective estates, their respective heirs or legatees
and their permitted assignees.
(d) The Participants shall have no dividend rights, voting rights or
any other rights as a stockholder with respect to any options under the Option
Plan prior to the issuance of a stock certificate for such Stock.
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