EXHIBIT 4.3
VITALSIGNS SOFTWARE, INC.
1996 STOCK OPTION PLAN
(AMENDED AND RESTATED AS OF AUGUST 6, 1998)
1. PURPOSE AND TYPES OF OPTIONS. This 1996 Stock Option Plan (the
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"PLAN") is intended to increase the incentives of, and encourage stock ownership
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by, employees, consultants and other independent contractors (including members
of the Company's Board of Directors who are not employees of the Company)
providing services to VitalSigns Software, Inc., a Delaware corporation (the
"COMPANY"), or to corporations which are or become subsidiary corporations of
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the Company. The term "subsidiary corporation" as used in this Plan shall have
the meaning specified in Section 4.2 hereof. The Plan is intended to provide
such employees and consultants and other independent contractors with a
proprietary interest (or to increase their proprietary interest) in the Company,
and to encourage them to continue their employment or engagement by the Company
or its subsidiaries. Options granted pursuant to the Plan, at the discretion of
the Company's Board of Directors ("BOARD"), may be either incentive stock
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options within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended ("INTERNAL REVENUE CODE"), or options that do not so qualify as
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incentive stock options and which are referred to herein as non-qualified stock
options.
2. STOCK. The capital stock subject to the Plan shall be shares of the
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Company's authorized but unissued Common Stock ("COMMON STOCK") or treasury
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shares of Common Stock. The maximum aggregate number of shares of Common Stock
which may be issued under the Plan is Three Million Nine Hundred Forty-Eight
Thousand Five Hundred (3,948,500), subject to adjustments pursuant to Section 8
hereof. In the event that any outstanding option under the Plan shall expire by
its terms or is otherwise terminated for any reason (or if shares of Common
Stock of the Company which are issued upon exercise of an option granted
hereunder are subsequently reacquired by the Company pursuant to contractual
rights of the Company under the particular stock option agreement), the shares
of the Common Stock allocated to the unexercised portion of such option (or the
shares so reacquired by the Company pursuant to the terms of the stock option
agreement) shall again become available to be made subject to options granted
under the Plan. Notwithstanding any other provision of this Plan, the aggregate
number of shares of Common Stock subject to outstanding options granted under
this Plan at any given time, plus the aggregate number of shares which have been
issued upon exercise of all options granted under this Plan and which remain
outstanding, shall never be permitted to exceed the maximum number of shares
specified above in this Section 2 (subject to adjustments under Section 8).
3. ADMINISTRATION. The Plan shall be administered by the Board. The
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interpretation and construction by the Board of any provision of this Plan, or
of any option granted pursuant hereto, shall be final, binding and conclusive.
No member of the Board shall be liable to the Company or to any subsidiary or
parent corporation, or to the holder of any option granted hereunder, for any
action, inaction, determination or interpretation made in good faith with
respect to the Plan or any transaction hereunder. Notwithstanding the
foregoing, the Board shall have the authority to delegate some or all of its
duties to administer this Plan and to exercise its powers hereunder to a
committee ("COMMITTEE") appointed by the Board. For purposes of this Plan, all
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references herein to "Board" shall be deemed to also refer to any such
Committee. Any Committee charged with administration of the Plan shall have all
the powers and protections provided to the Board under this Plan until the Board
shall revoke or restrict such powers or protections. More specifically, the
Board, subject to compliance with the remaining provisions of this Plan, shall
have the following powers and authority (which listing is provided by way of
example and is not intended to be comprehensive or limiting to the extent of
powers not included):
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VitalSigns Software, Inc.
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3.1 SELECTION OF OPTIONEES. To determine the persons providing
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services to the Company to whom, and the time or times at which, options to
purchase Common Stock of the Company shall be granted;
3.2 NUMBER OF OPTION SHARES. To determine the number of shares of
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Common Stock to be subject to options granted to each such person;
3.3 EXERCISE PRICE. To determine the price to be paid for the shares
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of Common Stock upon the exercise of each option;
3.4 TERM AND EXERCISE SCHEDULE. To determine the term and the
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exercise schedule of each option;
3.5 OTHER TERMS OF OPTIONS. To determine the terms and conditions of
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each stock option agreement (which need not be identical) entered into between
the Company and any person to whom the Board determines to grant an option;
3.6 INTERPRETATION OF PLAN. To interpret the Plan and to prescribe,
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amend and rescind rules and regulations relating to the Plan;
3.7 AMENDMENT OF OPTIONS. With the consent of the holder thereof, to
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modify or amend any option granted under the Plan; and
3.8 GENERAL AUTHORITY. To take such actions and make such
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determinations deemed necessary or advisable by the Board for the administration
of the Plan, subject to complying with the Plan and with applicable legal
requirements.
4. ELIGIBILITY AND AWARD OF OPTIONS.
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4.1 AUTHORITY TO GRANT AND ELIGIBILITY. The Board shall have full
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and final authority, in its discretion and at any time and from time to time
during the term of this Plan, to grant or authorize the granting of options to
such officers, directors and employees of, and consultants and other independent
contractors retained by, the Company or its subsidiary corporations as it may
select, and to determine the number of shares of Common Stock to be subject to
each option. Any individual who is eligible to receive a stock option under
this Plan shall be eligible to hold more than one option at any given time, in
the discretion of the Board. The Board shall have full and final authority in
its discretion to determine, in the case of employees (including employees that
are officers or directors), whether such options shall be incentive stock
options or non-qualified stock options; however, no incentive stock option may
be granted to any person who is not a bona fide employee of the Company or of a
subsidiary corporation of the Company. Persons selected by the Board who are
prospective employees of, or consultants or other independent contractors to be
retained by, the Company or its subsidiaries, including members of the Board,
shall be eligible to receive non-qualified stock options; provided, however,
that in the case of such prospective employment or other engagement, the
exercisability of such options shall be
1996 Stock Option Plan
VitalSigns Software, Inc.
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subject in each case to such person in fact becoming an employee or consultant
or other independent contractor, as applicable, of the Company or its
subsidiaries.
4.2 CERTAIN RESTRICTIONS APPLICABLE TO STOCK OPTIONS. No incentive
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stock option shall be granted to any employee who, at the time such incentive
stock option is granted, owns stock possessing more than ten percent (10%) of
the total combined voting power of all classes of outstanding capital stock of
the Company, or of any parent corporation or subsidiary corporation of the
Company, unless the exercise price (as provided in Section 5.1 hereof) is not
less than one hundred ten percent (110%) of the fair market value of the Common
Stock on the date the incentive stock option is granted and the period within
which the incentive stock option may be exercised (as provided in Section 5.2
hereof) does not exceed five (5) years from the date the incentive stock option
is granted. As used in this Plan, the terms "PARENT CORPORATION" and
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"SUBSIDIARY CORPORATION" shall have the meanings set forth in Sections 424(e)
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and (f), respectively, of the Internal Revenue Code. For purposes of this
Section 4.2, in determining stock ownership, an employee shall be considered as
owning the voting capital stock owned, directly or indirectly, by or for his or
her brothers and sisters, spouse, ancestors and lineal descendants. Voting
capital stock owned, directly or indirectly, by or for a corporation,
partnership, estate or trust shall be considered as being owned proportionately
by or for its stockholders, partners or beneficiaries, as applicable.
Additionally, for purposes of this Section 4.2, outstanding capital stock shall
include all capital stock actually issued and outstanding immediately after the
grant of the option to the employee. Outstanding capital stock shall not
include capital stock authorized for issue under outstanding options held by the
employee or by any other person. Additionally, the aggregate fair market value
(determined as of the date an option is granted) of the Common Stock with
respect to which incentive stock options granted are exercisable for the first
time by an employee during any one calendar year (under this Plan and under all
other incentive stock option plans of the Company and of any parent or
subsidiary corporation) shall not exceed One Hundred Thousand Dollars
($100,000). If the aggregate fair market value (determined as of the date an
option is granted) of the Common Stock with respect to which incentive stock
options granted are exercisable for the first time by an employee during any
calendar year exceeds One Hundred Thousand Dollars ($100,000), the options for
the first One Hundred Thousand Dollars ($100,000) worth of shares of Common
Stock to become exercisable in such calendar year shall be incentive stock
options and the options for the amount in excess of One Hundred Thousand Dollars
($100,000) that become exercisable in that calendar year shall be non-qualified
stock options. In the event that the Internal Revenue Code or the regulations
promulgated thereunder are amended after the effective date of the Plan to
provide for a different limit on the fair market value of shares of Common Stock
permitted to be subject to incentive stock options, such different limit shall
be automatically incorporated herein and shall apply to options granted after
the effective date of such amendment.
4.3 DATE OF GRANT. The date on which an option shall be granted
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shall be stated in each option agreement and shall be the date of the Board's
authorization of such grant or such later date as may be set by the Board at the
time such grant is authorized.
5. TERMS AND PROVISIONS OF OPTION AGREEMENTS. Each option granted under
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the Plan shall be evidenced by a stock option agreement between the person to
whom the option is granted and the Company. Each such agreement shall be
subject to the following terms and conditions, and to such other terms and
conditions not inconsistent herewith as the Board may deem appropriate in each
case:
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VitalSigns Software, Inc.
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5.1 EXERCISE PRICE. The price to be paid for each share of Common
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Stock upon the exercise of an option shall be determined by the Board at the
time the option is granted; provided however that (1) no non-qualified stock
option shall have an exercise price less than eighty-five percent (85%) of the
fair market value of the Common Stock on the date the option is granted; (2) no
incentive stock option shall have an exercise price less than one hundred
percent (100%) of the fair market value of the Common Stock on the date the
option is granted; and (3) all incentive stock options granted to the ten
percent (10%) stockholders shall have the exercise price set at not less than
one hundred ten percent (110%) of fair market value at the date of the grant, as
provided in Section 4.2 hereof. For all purposes of this Plan, the fair market
value of the Common Stock on any particular date shall be the closing price on
the trading day immediately preceding that date on the principal securities
exchange on which the Company's Common Stock is listed, or, if such Common Stock
is not then listed on any securities exchange, the fair market value of the
Common Stock on such date shall be the mean of the closing bid and asked prices
as reported by the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") on the trading day immediately preceding such date.
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In the event that the Company's Common Stock is neither listed on a securities
exchange nor quoted by NASDAQ, then the Board shall in good faith determine the
fair market value of the Company's Common Stock on such date, with such
determination being based upon factors considered relevant in determining the
Company's fair value; provided, however, that any individual form of option
agreement may provide for alternative means of valuation for the purpose of
repurchase at fair market value of shares acquired.
5.2 TERM OF OPTIONS. The period or periods within which an option
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may be exercised shall be determined by the Board at the time the option is
granted, but no exercise period shall exceed ten (10) years from the date the
option is granted (or five (5) years in the case of any stock option granted to
a ten percent (10%) stockholder as described in Section 4.2 hereof).
5.3 EXERCISABILITY. Stock options granted under this Plan shall be
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exercisable at such future time or times (or may be fully exercisable upon
grant), whether or not in installments, as shall be determined by the Board and
provided in the form of stock option agreement, subject, however, to the
requirement that all options granted under this Plan shall provide a right to
exercise that accrues at a rate of at least twenty percent (20%) of the number
of shares subject to the option for each year after the date of grant (i.e., at
a rate so as to become fully exercisable at the end of five (5) years).
Likewise, to the extent that options are immediately exercisable and shares
purchased thereunder have vesting schedules such that the Company is entitled to
repurchase at original exercise price a portion of the shares so acquired, all
such option agreements shall provide for the lapsing of such purchase rights at
a rate of at least twenty percent (20%) of the number of shares subject to the
option for each year after the date of grant. Notwithstanding any other
provisions of this Plan, no option may be exercised after the expiration of ten
(10) years from the date of grant.
5.4 METHOD OF PAYMENT FOR COMMON STOCK UPON EXERCISE. Except as
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otherwise provided in the applicable stock option agreement (subject to the
limitations of this Plan), the exercise price for each share of Common Stock
purchased under an option shall be paid in full in cash at the time of purchase
(or by check acceptable to the Board). At the discretion of the Board, the
stock option agreement may provide for (or the Board may permit) the exercise
price to be paid by one or more of the following additional alternative methods:
(i) the surrender of shares of the Company's Common Stock, in
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VitalSigns Software, Inc.
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proper form for transfer, owned by the person exercising the option and having
a fair market value on the date of exercise equal to the exercise price,
provided that such shares (a) have been outstanding for more than six (6)
months and have been paid for within the meaning of Rule 144 under the
Securities Act of 1933, as amended (the "SECURITIES ACT") (and, if such shares
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were purchased from the Company by use of a promissory note, such note has
been fully paid with respect to such shares) or (b) were obtained by the
optionee in the public market, (ii) to the extent permitted under the
applicable provisions of the Delaware General Corporation Law, the delivery by
the person exercising the option of a full recourse promissory note executed
by such person, bearing interest at a per annum rate which is not less than
the "test rate" as set by the regulations promulgated under Sections 483 or
1274, as applicable, of the Internal Revenue Code and as in effect on the date
of exercise, or (iii) any combination of cash, shares of Common Stock or
promissory notes, so long as the sum of the cash so paid, plus the fair market
value of the shares of Common Stock so surrendered and the principal amounts
of the promissory notes so delivered, is equal to the aggregate exercise
price. Without limiting the generality of the foregoing, the form of option
agreement may provide (or the Board may otherwise permit, in its discretion)
that the option be exercised through a "net issue" exercise procedure (cash-
less exercise), whereby the optionee may elect to receive shares of the
Company's Common Stock having an aggregate fair market value at the date of
exercise equal to the net value of the portion of the option so exercised as
of the exercise date. For purposes of the foregoing, the net value of any
option (or portion thereof) as of such exercise date shall be equal to the
aggregate fair market value of the shares subject to the option (or portion
thereof being exercised) less the aggregate exercise price of the option (or
portion thereof). In such event the Company shall issue to the optionee a
number of shares of the Company's Common Stock having a fair market value as
of the date of exercise equal to the net value of the option (or portion
thereof being exercised). No share of Common Stock shall be issued under any
option until full payment therefor has been made in accordance with the terms
of the stock option agreement (and in compliance with the Plan).
Notwithstanding the foregoing, an Option may not be exercised by surrender to
the Company of shares of the Company's Common Stock to the extent such
surrender of stock would constitute a violation of the provisions of any law,
regulation and/or agreement restricting the redemption of the Company's Common
Stock. Additionally, if permitted by the form of stock option agreement, or at
the Board's discretion, any promissory note may permit the payment of
principal and interest accruing thereunder by surrender of shares of the
Company's Common Stock, in proper form for transfer, and having a fair market
value on the date of payment and surrender equal to the dollar amount to be
applied to principal and accrued interest thereunder.
5.5 NON-ASSIGNABILITY. No stock option granted under the Plan shall
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be assignable or transferable by an optionee except by will or the laws of
descent and distribution, unless such assignment or transfer is approved by the
Board of Directors at the time of the grant of the option, and each stock option
granted under the Plan shall be exercisable only by the optionee (or any
approved assignee) during his or her lifetime.
5.6 TERMINATION OF EMPLOYMENT PROVISIONS APPLICABLE TO STOCK OPTIONS.
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Each stock option agreement shall comply with the following provisions relating
to early termination of the option based upon termination of the employee's
employment with the Company:
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VitalSigns Software, Inc.
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5.6.1 DEATH. Upon the death of an employee of the Company, any
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stock option which such employee holds may be exercised, to the extent it was
vested and exercisable as of the date of death, within such period after the
date of death as the Board shall prescribe in the stock option agreement (but
not less than six (6) months nor more than twelve (12) months after death), by
the employee's representative or by the person entitled thereto under the
employee's will or the laws of intestate succession. If the option is not so
exercised in accordance with the foregoing, it shall terminate upon the
expiration of such prescribed period.
5.6.2 DISABILITY. If the employee's employment with the Company
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is terminated because of the disability of the employee, any stock option which
the employee holds may be exercised by the employee or the employee's estate
within such period after the date of termination of employment resulting from
such disability (but not less than six (6) months nor more than twelve (12)
months after termination by reason of disability) as the Board shall prescribe
in the stock option agreement, to the extent such option would otherwise be
vested and exercisable on the date of such termination. If the option is not so
exercised in accordance with the foregoing, it shall terminate upon the
expiration of such prescribed period, unless the employee dies prior thereto, in
which event the employee shall be treated as though his or her death occurred on
the date of termination resulting from such disability and the provisions of
Section 5.6.1 hereof shall apply.
5.6.3 TRANSFER TO RELATED CORPORATION. In the event that an
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employee of the Company leaves the employ of the Company to become an employee
of any parent or subsidiary corporation of the Company, or if the employee
leaves the employ of any such parent or subsidiary corporation to become an
employee of the Company or of another parent or subsidiary corporation, such
employee shall be deemed to continue as an employee of the Company for all
purposes of this Plan, and any reference to employment by the Company shall also
be deemed to refer to employment by any parent or subsidiary of the Company.
5.6.4 OTHER SEVERANCE. In the event an employee of the Company
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leaves the employ of the Company for any reason other than as set forth above in
this Section 5.6, any stock option which such employee holds must be exercised,
to the extent it was vested and exercisable at the date such employee left the
employ of the Company, not later than three (3) months after the date on which
the employee's employment terminates (or such shorter period as may be
prescribed in the option agreement, the minimum specified period being thirty
(30) days). The stock option shall terminate upon the expiration of such
prescribed period. In the event that an employee of the Company leaves the
employ of the Company for any reason other than as set forth above in this
Section 5.6, any non-qualified stock option which such employee holds shall
terminate in accordance with such provisions as the Board deems appropriate with
respect to termination prior to normal expiration upon termination of
employment.
5.6.5 EFFECT OF TERMINATION OF ENGAGEMENT OF NON-EMPLOYEES ON
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NON-QUALIFIED STOCK OPTIONS. The Board, in its discretion, may provide in each
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non-qualified stock option agreement issued to a consultant, non-employee
Director or other independent contractor retained by the Company such
provisions as the Board deems appropriate with respect to whether, and if so
when, the option (or any portion thereof) shall be terminated prior to normal
expiration (or otherwise affected) upon any termination of the optionee's
engagement as a consultant or other independent contractor
1996 Stock Option Plan
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providing services to the Company. Any reference in this Plan to services of a
consultant or other independent contractor to the Company shall be deemed (for
all purposes of this Plan) to mean and include the existence of a consulting
or other independent contractor relationship with any parent corporation or
subsidiary corporation of the Company.
5.7 ALL OPTIONS SUBJECT TO TERMS OF THIS PLAN. In addition to the
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provisions contained in any option agreement granted under this Plan, each such
stock option agreement shall provide that the same is subject to the terms and
conditions of this Plan and each optionee shall be given a copy of this Plan.
Further, any terms or conditions contained in any such stock option agreement
granted hereunder which are inconsistent in any respect with the provisions of
this Plan shall be disregarded and void, or shall be deemed amended to the
extent necessary to comply with the provisions of this Plan and the intent of
the Board.
5.8 OTHER PROVISIONS. Option agreements under the Plan shall contain
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such other provisions, including, without limitation: (i) restrictions and
conditions upon the exercise of the option, (ii) rights of first refusal in
favor of the Company (or its assignees) applicable to shares of Common Stock
acquired upon exercise of an option which are subsequently proposed to be
transferred by the optionee, (iii) lock-up agreements (applicable in the event
of the public offering of the Common Stock of the Company) restricting an
optionee from any sales or other transfers of option stock for a designated
period of time following the effective date of a registration statement under
the Securities Act, (iv) other restrictions on the transferability or right to
retain shares of the Common Stock received upon the exercise of the option,
including repurchase rights at original cost based on a vesting schedule, (v)
commitments to pay cash bonuses, make loans or transfer other property to an
optionee upon exercise of any option, and (vi) restrictions required by federal
and applicable state securities laws, all as the Board shall deem necessary or
advisable; provided that no such additional provision shall be inconsistent with
any other term or condition of this Plan and no such additional provision shall
cause any incentive stock option granted pursuant to this Plan to fail to
qualify as an incentive stock option under Section 422 of the Internal Revenue
Code. Without limiting the generality of the foregoing, the Board may provide
in the form of stock option agreement that, in lieu of an exercise schedule, the
option may immediately be exercisable in full and provide a "vesting schedule"
with respect to the stock so purchased, giving the Company (or its assignees)
the right to repurchase the shares of Common Stock at cost (or some other
specified amount) to the extent such shares have not become vested upon any
termination of the optionee's employment or other engagement with the Company,
which vesting may depend upon or be related to the attainment of performance
goals or other conditions (such as the passage of stated time periods) pursuant
to which the obligation to resell such shares to the Company shall lapse.
6. SECURITIES LAW REQUIREMENTS. The Board shall require any potential
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optionee, as a condition of the exercise of an option, to represent and
establish to the satisfaction of the Board that all shares of Common Stock to be
acquired upon the exercise of such option will be acquired for investment and
not for resale. No shares of Common Stock shall be issued upon the exercise of
any option unless and until: (i) the Company and the optionee have satisfied all
applicable requirements under the Securities Act of 1933 and the Securities
Exchange Act of 1934, as amended, (ii) any applicable listing requirement of any
stock exchange on which the Company's Common Stock is listed has been satisfied,
and (iii) all other applicable provisions of state and federal law have been
satisfied. The Board shall cause such
1996 Stock Option Plan
VitalSigns Software, Inc.
Page 8
legends to be placed on certificates evidencing shares of Common Stock issued
upon exercise of an option as, in the opinion of the Company's counsel, may be
required by federal and applicable state securities laws.
7. WITHHOLDING TAXES. The exercise of any option granted under this Plan
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shall be conditioned upon the optionee's payment to the Company of all amounts
(in addition to the exercise price) required to meet federal, state, local or
foreign taxes of any kind required by law to be withheld with respect to shares
to be issued on exercise of such option. The Board, in its discretion, may
declare cash bonuses to an optionee to satisfy any such withholding requirements
or may incorporate provisions in the form of stock option agreement allowing (or
after grant of the option may permit, in its discretion) an optionee to satisfy
any such withholding obligations, in whole or in part, by delivery of shares of
the Company's Common Stock already owned by the optionee and which are not
subject to repurchase, forfeiture, vesting or other similar requirements or
restrictions. The fair market value of any such shares used to satisfy such
withholding obligations shall be determined as of the date the amount of tax to
be withheld is to be determined. The Company shall have the right to deduct
from payments of any kind otherwise due to the optionee (whether regular salary,
commissions, or otherwise) any federal, state or local taxes of any kind
required by law to be withheld with respect to any shares issued upon exercise
of options granted under the Plan.
8. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.
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8.1 STOCK SPLITS AND SIMILAR EVENTS. Subject to any required action
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by the Board and stockholders, the number of shares of Common Stock covered by
outstanding options granted under this Plan and the exercise price thereof shall
be proportionately adjusted for any increase or decrease in the number of issued
and outstanding shares of Common Stock resulting from a subdivision or
combination of such shares or the payment of a stock dividend (but only on the
Common Stock) or any other increase or decrease in the number of such
outstanding shares of Common Stock effected without the receipt of consideration
by the Company; provided, however, that the conversion of any convertible
securities of the Company shall not be deemed to have been "effected without
receipt of consideration."
8.2 MERGERS AND ACQUISITIONS. Subject to any required action by the
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Board and stockholders, if the Company shall be the surviving corporation in any
merger or consolidation which results in the holders of the outstanding voting
securities of the Company (determined immediately prior to such merger or
consolidation) owning, directly or indirectly, at least a majority of the
beneficial interest in the outstanding voting securities of the surviving
corporation or its parent corporation (determined immediately after such merger
or consolidation), the options granted under this Plan shall pertain and apply
to the securities or other property to which a holder of the number of shares
subject to the unexercised portion of such options would have been entitled. A
dissolution or liquidation of the Company or a sale of all or substantially all
its business and assets or a merger or consolidation which results in the
holders of the outstanding voting securities of the Company (determined
immediately prior to such merger or consolidation) owning, directly or
indirectly, less than a majority of the beneficial interest in the outstanding
voting securities of the surviving corporation or its parent corporation
(determined immediately after such merger or consolidation) will cause the
options granted hereunder to
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terminate, unless the agreement of such sale, merger, consolidation or other
acquisition otherwise provides.
8.3 BOARD'S DETERMINATION FINAL AND BINDING UPON OPTIONEES. The
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foregoing determinations and adjustments in this Section 8 relating to stock or
securities of the Company shall be made by the Board, whose determination in
that respect shall be final, binding and conclusive. The Company shall give
notice of any such adjustment or action to each optionee; provided, however,
that any such adjustment or action shall be effective and binding for all
purposes, whether or not such notice is given or received.
8.4 NO FRACTIONS OF SHARES. Fractions of shares shall not be issued
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by the Company. Instead, such fractions of shares shall either be paid in cash
at fair market value or shall be rounded up or down to the nearest share, as
determined by the Board.
8.5 NO RIGHTS EXCEPT AS EXPRESSLY STATED. Except as hereinabove
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expressly provided in this Section 8, no additional rights shall accrue to any
optionee by reason of any subdivision or combination of shares of the capital
stock of any class or the payment of any stock dividend or any other increase or
decrease in the number of shares of any class or by reason of any dissolution,
liquidation, merger or consolidation or spin-off of assets or of stock of
another corporation, and any issue by the Company of shares of stock of any
class or of securities convertible into shares of stock of any class shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number or exercise price of shares subject to options granted hereunder.
8.6 NO LIMITATIONS ON COMPANY'S DISCRETION. The grant of options
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under this Plan shall not affect in any way the right or power of the Company to
make adjustments, reclassifications, reorganizations or changes of its capital
or business structure or to merge or consolidate or to dissolve, liquidate, sell
or transfer all or any part of its business or assets.
9. NO ADDITIONAL EMPLOYMENT RELATED RIGHTS OR BENEFITS.
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9.1 NO SPECIAL EMPLOYMENT RIGHTS. Nothing contained in this Plan or
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in any option granted hereunder shall confer upon any optionee any right with
respect to the continuation of his or her employment or other engagement by the
Company or interfere in any way with the right of the Company, subject to the
terms of any separate employment or consulting agreement to the contrary, at any
time to terminate such employment or consulting or other relationship or to
increase or decrease the compensation of any optionee. Whether an authorized
leave of absence, or absence in military or government service, shall constitute
termination of an optionee's employment or other engagement shall be determined
by the Board.
9.2 OTHER EMPLOYEE BENEFITS. The amount of any compensation deemed
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to be received by any employee or consultant as a result of the exercise of an
option or the sale of shares received upon such exercise will not constitute
compensation with respect to which any other employment (or other engagement)
related benefits of such optionee are determined, including, without limitation,
benefits under any bonus, pension, profit-sharing, life insurance or salary
continuation plan,
1996 Stock Option Plan
VitalSigns Software, Inc.
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except as otherwise specifically determined by the Board or as expressly
provided for in the option agreement. The granting of an option shall impose
no obligation upon the optionee to exercise such option.
10. RIGHTS AS A STOCKHOLDER AND ACCESS TO INFORMATION. No optionee and no
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person claiming under or through any such optionee shall be, or have any of the
rights or privileges of, a stockholder of the Company in respect of any of the
shares issuable upon the exercise of any option granted under this Plan, unless
and until the option is properly and lawfully exercised and a certificate
representing the shares so purchased is duly issued to the optionee or to his or
her estate. No adjustment shall be made for dividends or any other rights if
the record date relating to such dividend or other right is before the date the
optionee became a stockholder. Holders of options granted under this Plan shall
be provided annual financial statements. Upon written request to the Secretary
of the Company, any optionee shall be entitled to inspect, at the executive
offices of the Company, the information made available to stockholders of the
Company pursuant to Section 220 or any other applicable provision of the
Delaware General Corporation Law. The Company shall deliver to each optionee
during the period for which he or she has one or more options outstanding,
copies of all annual reports and other information which are provided to all
stockholders of the Company, except the Company shall not be required to deliver
such information to key employees whose duties in connection with the Company
assure their access to equivalent information.
11. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Subject to the
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limitations of this Plan, the Board may modify, extend or renew outstanding
options granted under the Plan. Furthermore, the Board may, subject to the other
provisions of this Plan, upon the cancellation of previously granted options
having higher per share exercise prices, regrant options at a lower price;
provided, however, that no such modification or cancellation and regrant of an
option shall, without the written consent of the optionee, alter or impair any
rights of the optionee under any option previously granted under the Plan.
12. USE OF PROCEEDS. The proceeds received from the sale of shares of the
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Common Stock upon exercise of options granted under the Plan shall be used for
general corporate purposes.
13. RESERVATION OF SHARES. The Company, during the term of this Plan,
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will at all times reserve and keep available such number of shares of its Common
Stock as shall be sufficient to satisfy the requirements of the Plan and all
options issued hereunder.
14. TERM OF PLAN.
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14.1 EFFECTIVE DATES. The Plan became effective when adopted by the
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Board on December 17, 1996, but no stock option granted under the Plan shall
become exercisable unless and until the Plan shall have been approved by the
Company's stockholders by the vote of the holders of a majority of the
outstanding shares of the Company present and entitled to vote at a duly held
meeting of the Company's stockholders (or by consent of the holders of the
outstanding shares of the Company entitled to vote) in accordance with the
requirements of the Company's Bylaws and the Delaware General Corporation Law.
If such stockholder approval is not obtained within twelve (12) months after the
date of the Board's adoption of the Plan, any incentive stock options previously
granted under the Plan shall
1996 Stock Option Plan
VitalSigns Software, Inc.
Page 11
become non-qualified options and no further incentive stock options shall be
granted. Subject to the foregoing limitation, options may be granted under the
Plan at any time after the effective date and before the date fixed for
termination of the Plan.
14.2 TERMINATION. Unless sooner terminated in accordance with Section
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15, the Plan shall terminate upon the earlier of: (i) the close of business on
the last business day preceding the tenth (10th) anniversary of the date of the
Plan's adoption by the Board, or (ii) the date on which all shares available for
issuance under the Plan shall have been issued pursuant to options granted under
the Plan and none of such shares shall remain subject to contractual repurchase
rights of the Company pursuant to "vesting" or other similar provisions. If the
date of termination is determined under clause (i) above, then any options
outstanding on such date shall continue to have force and effect in accordance
with the provisions of the option agreements evidencing such options.
15. EARLY TERMINATION AND AMENDMENT OF THE PLAN. The Board may from time
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to time suspend or terminate the Plan or revise or amend it; provided, however,
that, without the approval of the Company's stockholders (except as to 15.1
below, which also requires the consent of the affected optionees) at a duly held
meeting of the Company's stockholders by the vote of a majority of the shares
present and entitled to vote (or by written consent of the holders entitled to
vote) in compliance with the requirements of the Company's Bylaws and the
Delaware General Corporation Law, no such action of the Board shall:
15.1 MODIFICATIONS OF OUTSTANDING OPTIONS. Without the consent of
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each affected optionee, alter or impair any rights of an optionee under any
option previously granted under the Plan;
15.2 INCREASES IN NUMBER OF SHARES SUBJECT TO THE PLAN. Increase the
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aggregate number of shares of the Common Stock which may be issued upon exercise
of options granted under the Plan (except for adjustments made pursuant to
Section 8 hereof);
15.3 CHANGES IN ELIGIBILITY. Change the designation of employees
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eligible to receive incentive stock options under the Plan;
15.4 PLAN DURATION. Extend the termination date beyond that provided
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in Section 14.2;
15.5 CHANGES NOT APPROVED BY LEGAL COUNSEL. Otherwise amend or modify
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the Plan (or outstanding options) under circumstances where stockholder approval
is considered necessary in the opinion of legal counsel to the Company; or
15.6 CHANGES TO THIS SECTION. Amend this Section 15 to defeat its
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purposes.