EXHIBIT 10.1
1995 STOCK OPTION PLAN
OF
ROCKFORD INDUSTRIES, INC.
(AMENDED AND RESTATED FEBRUARY 20, 1998)
1. PURPOSES OF THE PLAN. This 1995 Stock Option Plan of Rockford
Industries, Inc. (the "Plan") is designed to provide an incentive to employees
(including directors and officers who are employees) and to consultants,
advisors and directors who are not employees of Rockford Industries, Inc., a
California corporation (the "Company") and its present and future subsidiary
corporations, as defined in Paragraph 19 ("Subsidiaries"), and to offer an
additional inducement in obtaining the services of such individuals. The Plan
provides for the grant of "incentive stock options" ("ISOs") within the meaning
of Section 422 of the Internal Revenue code of 1986, as amended (the "Code"),
and nonqualified stock options ("NQSOs"), but the Company makes no warranty as
to the qualification of any option as an "incentive stock option" under the
Code.
2. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Paragraph 12,
the aggregate number of shares of Common Stock, no par value per share, of the
Company ("Common Stock") for which options may be granted under the Plan shall
not exceed 750,000. Such shares of Common Stock may, in the discretion of the
Board of Directors of the Company (the "Board of Directors"), consist either in
whole or in part of authorized but unissued shares of Common Stock or shares of
Common Stock held in the treasury of the Company. The Company shall at all
times during the term of the Plan reserve and keep available such number of
shares of Common Stock as will be sufficient to satisfy the requirements of this
Plan. Subject to the provisions of Paragraph 13, any shares of Common Stock
subject to an option which for any reason expires, is cancelled or is terminated
unexercised or which ceases for any reason to be exercisable shall again become
available for the granting of options under the Plan.
3. ADMINISTRATION OF THE PLAN. The Plan shall be administered by a
committee of the Board of Directors (the "Committee") consisting of not less
than two directors, each of whom (i) in respect of any decision at a time when
the participant affected by the decision may be subject to Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code") shall be an "outside
director" within the meaning of Code Section 162(m) and the regulations
promulgated under the Code and (ii) in respect of any decision at a time when
the participant affected by the decision may be subject to Section 16 of the
Securities Exchange Act of 1934 as amended (the "Exchange Act") shall be a "non-
employee director" within the meaning of Rule 16b-3 promulgated under the
Exchange Act. A majority of the
members of the Committee shall constitute a quorum, and the acts of a majority
of the members present at any meeting at which a quorum is present, and any acts
approved in writing by all members without a meeting, shall be the acts of the
Committee. No member or former member of the Committee shall be liable for any
action, failure to act or determination made in good faith with respect to the
Plan or any option hereunder.
Subject to the express provisions of the Plan, the Committee shall have the
authority, in its sole discretion, with respect to Employee Options and
Consultant Options (as defined in Paragraph 19): to determine the employees who
shall receive Employee Options and the consultants and advisors who shall
receive Consultant Options; the times when they shall receive options; whether
an Employee Option shall be an ISO or a NQSO; the number of shares of common
Stock to be subject to each option; the term of each option; the date each
option shall become exercisable; whether an option shall be exercisable in
whole, in part or in installments, and, if in installments, the number of shares
of Common Stock to be subject to each installment; whether the installments
shall be cumulative; the date each installment shall become exercisable and the
term of each installment; whether to accelerate or extend the exercisability or
extend the term of any or all outstanding options; whether shares of Common
Stock may be issued on exercise of an option as partly paid, and, if so, the
dates when future installments of the exercise price shall become due and the
amounts of such installments; the exercise price of each option; the form of
payment of the exercise price; whether to restrict the sale or other disposition
of the shares of Common Stock acquired upon the exercise of an option and to
waive any such restriction; whether to subject the exercise of all or any
portion of an option to the fulfillment of contingencies as specified in the
contract referred to in Paragraph 11 (the "Contract"), including without
limitation, contingencies relating to entering into a covenant not to compete
with the Company and its Parent (as defined in Paragraph 19) and Subsidiaries,
to financial objectives for the Company, a Subsidiary, a division, a product
line or other category, and/or the period of continued employment of the
optionee with the Company or its Subsidiaries, and to determine whether such
contingencies have been met; and with respect to Employee Options, Consultant
Options and Non-Employee Director Options (as defined in Paragraph 19): the
amount, if any, necessary to satisfy the Company's obligation to withhold taxes
or other amounts; the fair market value of a share of Common Stock; to construe
the respective Contracts and the Plan; with the consent of the optionee, to
cancel or modify an option, provided such option as modified would be permitted
to be granted on such date under the terms of the Plan; to prescribe, amend and
rescind rules and regulations relating to the Plan; and to make all other
determinations necessary or advisable for administering the Plan. The
determinations of the Committee on the matters referred to in this Paragraph 3
shall be conclusive.
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4. ELIGIBILITY; GRANTS.
(a) The Committee may from time to time, consistent with the
purposes of the Plan, grant Employee Options to employees (including
officers and directors who are employees), and Consultant Options to
consultants and advisors, of the Company or any of its Subsidiaries. Such
options granted shall cover such number of shares of Common Stock as the
Committee may determine; provided, however, that the maximum number of
shares subject to Employee Options that may be granted to any individual
during any calendar year under the Plan (the "162(m) Maximum") shall not
exceed 200,000 shares; and further provided that the aggregate market value
(determined at the time the option is granted) of the shares of Common
Stock for which any eligible employee may be granted ISOs under the Plan or
any other plan of the Company, or of a Parent or a Subsidiary of the
Company, which are exercisable for the first time by such optionee during
any calendar year shall not exceed $100,000. The $100,000 ISO limitation
shall be applied by taking ISOs into account in the order in which they
were granted. Any option (or the portion thereof) granted in excess of such
amount shall be treated as a NQSO. A Non-Employee Director shall not be
entitled to receive any options under the Plan other than Non-Employee
Director Options pursuant to Sections 4(b) or 4(c) hereof.
(b) The Board of Directors may, in its discretion, grant a Non-
Employee Director a Non-Employee Director Option for a number of shares and
upon such terms as the Board of Directors shall determine; provided,
however, that no more than one such discretionary option grant shall be
made with respect to any individual Non-Employee Director in any 12-month
period. On April 25, 1997, every person who, at such time, is a Non-
Employee Director shall be granted a Non-Employee Director Option to
purchase 20,000 shares of Common Stock at a per share exercise price that
is equal to 100% of the fair market value of a share of Common Stock on
such date. Each such option to purchase 20,000 shares of Common Stock shall
vest and become exercisable (i) as of the date of grant with respect to
5,000 shares, and (ii) 12 months after the date of grant with respect to
15,000 shares. Each such option to purchase 20,000 shares of Common Stock
shall terminate, to the extent not previously exercised, five years after
the date of grant (subject to earlier termination in accordance with the
provisions set forth herein).
(c) Immediately following each annual meeting of shareholders at
which directors are elected, every person who, at such time, is a Non-
Employee Director (as defined in Paragraph 19) shall be granted at such
time a Non-Employee Director Option to purchase 2,500 shares of Common
Stock
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upon such individual's first election as a director and a Non-Employee
Director Option to purchase 800 shares of Common Stock upon each subsequent
election as a director. Notwithstanding the foregoing, no option grants
shall be made pursuant to this Section 4(c) with respect to the 1997 Annual
Shareholders Meeting and, effective with the grants made after the 1997
Annual Shareholders Meeting, the number of shares subject to Non-Employee
Director Options specified in the preceding sentence shall be increased to
5,000 and 5,000, respectively. Non-Employee Director Options granted
pursuant to this Section 4(c) shall be fully vested and exercisable as of
the date of grant. In the event the remaining shares available for grant
under the Plan are not sufficient to grant the Non-Employee Director
Options to each such Non-Employee Director in any year, the number of
shares subject to the Non-Employee Director Options for such year shall be
reduced proportionately. The Committee shall not have any discretion with
respect to the selection of directors to receive Non-Employee Director
Options granted under this Section 4(c) or the amount, the price or the
timing with respect thereto.
5. EXERCISE PRICE. The exercise price of the shares of Common Stock
under each Employee Option and Consultant Option shall be determined by the
Committee; provided, however, that the exercise price of an option shall not be
less than the fair market value of the Common Stock subject to such option on
the date of grant; and further provided, that if, at the time an ISO is granted,
the optionee owns (or is deemed to own under Section 424(d) of the Code) stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company, of any of its Subsidiaries or of a Parent, the exercise
price of such ISO shall not be less than 110% of the fair market value of the
Common Stock subject to such ISO on the date of grant. The exercise price of
the shares of Common Stock under each Non-Employee Director Option shall be
equal to the fair market value of the Common Stock subject to such option on the
date of grant (other than Non-Employee Director Options granted pursuant to
Section 4(b), the exercise price of which shall be determined by the Board of
Directors, but shall not be less than the fair market value of the Common Stock
subject to such options as of the date of grant).
The fair market value of a share of common Stock on any day shall be
(a) if the principal market for the Common Stock is a national securities
exchange, the average of the highest and lowest sales prices per share of Common
Stock on such day as reported by such exchange or on a composite tape reflecting
transactions on such exchange, (b) if the principal market for the Common Stock
is not a national securities exchange and the Common Stock is quoted on the
National Association of Securities Dealers Automated Quotations System
("NASDAQ"), and (i) if actual sales price information available with respect to
the Common
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Stock, the average of the highest and lowest sales prices per share of Common
Stock on such day on the NASDAQ, or (ii) if such information is not available,
the average of the highest bid and lowest asked prices per share of Common Stock
on such day on the NASDAQ, or (c) if the principal market for the Common Stock
is not a national securities exchange and the Common Stock is not quoted on the
NASDAQ, the average of the highest bid and lowest asked prices per share of
Common Stock on such day as reported on the NASDAQ OTC Bulletin Board Service or
by the National Quotation Bureau, Incorporated or a comparable service;
provided, however,that if clauses (a), (b) and (c) of this Paragraph are all
inapplicable, or if no trades have been made or no quotes are available for such
day, the fair market value of the Common Stock shall be determined by the Board
of Directors of any method consistent with applicable regulations adopted by the
Treasury Department relating to stock options.
6. TERM. The term of each Employee Option and Consultant Option
granted pursuant to the Plan shall be such term as is established by the
Committee, in its sole discretion, at or before the time such option is granted;
provided, however, that the term of each ISO granted pursuant to the Plan shall
be for a period not exceeding 10 years from the date of grant thereof; and
further, provided, that if, at the time an ISO is granted, the optionee owns (or
is deemed to own under Section 424(d) of the Code) stock possessing more than
10% of the total combined voting power of all classes of stock of the Company,
of any of its Subsidiaries or of a Parent, the term of the ISO shall be for a
period not exceeding five years from the date of grant. Each Non-Employee
Director Option granted pursuant to Section 4(c) shall be exercisable for a term
of five years commencing on the date of grant. The term of Non-Employee
Director Options granted pursuant to Section 4(b) of the Plan shall be such term
as is established by the Board of Directors, in its sole discretion, at or
before the time such option is granted. Employee Options, Consultant Options
and Non-Employee Director Options shall be subject to earlier termination as
hereinafter provided.
7. EXERCISE. An option (or any part or installment thereof), to the
extent then exercisable, shall be exercised by giving written notice to the
Company at its principal office stating which option is being exercised,
specifying the number of shares of Common Stock as to which such option is being
exercised and accompanied by payment in full of the aggregate exercise price
therefor (or the amount due on exercise if the Contract with respect to an
Employee Option permits installment payments) (a) in cash or by certified check
or (b) in the case of an Employee Option or a Consultant Option, if the
applicable Contract permits, with previously acquired shares of Common Stock
having an aggregate fair market value, on the date of exercise, equal to the
aggregate exercise price of all options being exercised, or with any combination
of cash, the fair market value
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of the Common Stock shall be determined in accordance with Paragraph 5.
The Committee may, in its discretion, permit payment of the exercise
price of an option by delivery by the optionee of a properly executed notice,
together with a copy of his irrevocable instructions to a broker acceptable to
the Committee to deliver promptly to the Company the amount of sale or loan
proceeds sufficient to pay such exercise price. In connection therewith, the
Company may enter into agreements for coordinated procedures with one or more
brokerage firms.
A person entitled to receive Common Stock upon the exercise of an
option shall not have the rights of a stockholder with respect to such shares of
Common Stock until the date of issuance of a stock certificate to him for such
shares; provided, however, that until such stock certificate is issued, any
option holder using previously acquired shares of Common Stock in payment of an
option exercise price shall continue to have the rights of a stockholder with
respect to such previously acquired shares.
In no case may a fraction of a share of Common Stock be purchased or
issued under the Plan.
8. TERMINATION OF RELATIONSHIP. Except as may otherwise be
expressly provided in the applicable Contract, any holder of an Employee Option
whose employment with the Company (and its Parent and Subsidiaries) has
terminated for any reason other than his death or Disability (as defined in
Paragraph 19) may exercise such option, to the extent exercisable on the date of
such termination, at any time within three months after the date of termination,
but not thereafter and in no event after the date the option would otherwise
have expired; provided, however, that if his employment is terminated either (a)
for cause, or (b) without the consent of the Company, such option shall
terminate immediately. Except as may otherwise be expressly provided in the
applicable Contract, Employee Options granted under the Plan shall not be
affected by any change in the status of the holder so long as he continues to be
an employee or a consultant or advisor of the Company, its Parent or any of the
Subsidiaries (regardless of having been transferred from one corporation to
another).
For the purposes of the Plan, an employment relationship shall be
deemed to exist between an individual and a corporation if, at the time of the
determination, the individual was an employee of such corporation for purposes
of Section 422(a) of the Code. As a result, an individual on military, sick
leave or other bona fide leave of absence shall continue to be considered an
employee for purposes of the Plan during such leave if the period of the leave
does not exceed 90 days, or, if longer, so long as the individual's right to
reemployment with
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the Company (or a related corporation) is guaranteed either by statute or by
contract. If the period of leave exceeds 90 days and the individual's right to
reemployment is no guaranteed by statute or by contract, the employment
relationship shall be deemed to have terminated on the 91st day of such leave.
Except as may otherwise be expressly provided in the applicable
Contract, the holder of a Consultant Option whose consultant or advisory
relationship with the Company (and its Parent and Subsidiaries) has terminated
for any reason may exercise such option to the extent exercisable on the date of
such termination, at any time within three months after the date of termination,
but not thereafter and in no event after the date the option would otherwise
have expired; provided, however, that if such relationship was terminated either
(a) for cause or (b) without the consent of the Company (other than as a result
of the death or Disability of the holder or an employee of the holder) the
option shall terminate immediately. Except as may otherwise be expressly
provided in the applicable Contract, Consultant Options granted under the Plan
shall not be affected by a change in the relationship, so long as the holder of
the option continues to be a consultant or advisor of the Company, its Parent or
any of its Subsidiaries (regardless of having ceased to be a consultant or
advisor for any of such corporations).
Except as provided below, a Non-Employee Director Option may be
exercised at any time during its term (or, with respect to Non-Employee Director
Options granted pursuant to Section 4(b), except as provided below or as the
Board of Directors may otherwise provide in a related Contract). The Non-
Employee Director Option shall not be affected by the holder ceasing to be a
director of the Company or becoming an employee or consultant or advisor of the
Company or any of its Subsidiaries; provided, however, that if a Non-Employee
Director is terminated for cause, such option shall terminate immediately.
Nothing in the Plan or in any option granted under the Plan shall
confer on any individual any right to continue in the employ or as a consultant
or advisor of the Company, its Parent or any of its Subsidiaries, or as a
director of the Company, or interfere in any way with any right of the Company,
its Parent or any of its Subsidiaries to terminate the holder's relationship at
any time for any reason whatsoever without liability to the Company, its Parent
or any of its Subsidiaries.
9. DEATH OR DISABILITY OF AN OPTIONEE. Except as may otherwise be
expressly provided in the applicable Contract, if an optionee dies (a) while he
is employed by the Company, its Parent or any of its Subsidiaries, (b) within
three months after the termination of his employment (unless such termination
was for cause or without the consent of the Company) or (c) within one year
following the termination of his employment by reason of Disability, his
Employee Option may be exercised, to the extent
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exercisable on the date of his death, by his executor, administrator or other
person at the time entitled by law to his rights under such option, at any time
within one year after death, but not thereafter and in no event after the date
the option would otherwise have expired.
Except as may otherwise be expressly provided in the applicable
Contract, any optionee whose employment has terminated by reason of Disability
may exercise his Employee Option, to the extent exercisable upon the effective
date of such termination, at any time within one year after such date, but not
thereafter and in no event after the date the option would otherwise have
expired.
The term of a Non-Employee Director Option shall not be affected by
the death or Disability of the optionee. If an optionee holding a Non-Employee
Director Option dies during the term of such option, the option may be exercised
at any time during its term by his executor, administrator or other person at
the time entitled by law to his rights under such option. The termination of a
Consultant Option as a result of the death or Disability of the holder of the
option (or a key employee thereof) shall be governed by Paragraph 8.
10. COMPLIANCE WITH SECURITIES LAWS. The Committee may require, in
its discretion, as a condition to the exercise of any option that either (a) a
Registration Statement under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the shares of Common Stock to be issued upon
such exercise shall be effective and current at the time of exercise, or (b)
there is an exemption from registration under the Securities Act for the
issuance of shares of Common Stock upon such exercise. Nothing herein shall be
construed as requiring the Company to register shares subject to any option
under the Securities Act.
The Committee may require the optionee to execute and deliver to the
Company his representations and warranties, in form and substance satisfactory
to the Committee, that (a) the shares of Common Stock to be issued upon the
exercise of the option are being acquired by the optionee for his own account,
for investment only and not with a view to the resale or distribution thereof,
and (b) any subsequent resale or distribution of shares of Common Stock by such
optionee will be made only pursuant to (i) a Registration Statement under the
Securities Act which is effective and current with respect to the shares of
Common Stock being sold, or (ii) a specific exemption from the registration
requirements of the Securities Act, but in claiming such exemption, the optionee
shall prior to any offer of sale or sale of such shares of Common Stock provide
the Company with a favorable written option of counsel, in form and substance
satisfactory to the Company, as to the applicability of such exemption to the
proposed sale or distribution.
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In addition, if at any time the Committee shall determine in its
discretion that the listing or qualification of the shares of Common Stock
subject to such option on any securities exchange or under any applicable law,
or the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition to, or in connection with, the granting of an option or
the issue of shares of Common Stock thereunder, such option may not be exercised
in whole or in part unless such listing, qualification, consent or approval
shall have been effected or obtained free of any conditions not acceptable to
the Committee.
11. STOCK OPTION CONTRACTS. Each option shall be evidenced by an
appropriate Contract which shall be duly executed by the Company and the
optionee, and shall contain such terms and conditions not inconsistent herewith
as may be determined by the Committee (or, with respect to Non-Employee Director
Options, by the Board of Directors).
12. ADJUSTMENTS UPON CHANGES IN COMMON STOCK. Notwithstanding any
other provision of the Plan, in the event of any change in the outstanding
Common Stock by reason of a stock dividend, recapitalization, merger in which
the Company is the surviving corporation, split-up, combination or exchange of
shares or the like, the aggregate number and kind of shares subject to the Plan,
the aggregate number and kind of shares subject to each outstanding option and
the exercise price thereof, and the number and kind of shares subject to future
Non-Employee Director Options and the 162(m) Maximum shall be appropriately
adjusted by the Board of Directors, whose determination shall be conclusive.
In the event of (a) the liquidation or dissolution of the Company, or
(b) a merger in which the Company is not the surviving corporation or a
consolidation, any outstanding options shall terminate, unless other provision
is made therefor in the transaction.
13. AMENDMENTS AND TERMINATION OF THE PLAN. The Plan was adopted by
the Board of Directors on May 10, 1995. No option may be granted under the Plan
after May 9, 2005. The Board of Directors, without further approval of the
Company's shareholders, may at any time suspend or terminate the Plan, in whole
or in part, or amend it from time to time in such respects as it may deem
advisable, including, without limitation, in order that ISOs granted hereunder
meet the requirements for "incentive stock options" under the code, to comply
with the provisions of Rule 16b-3 promulgated under the Exchange Act or Section
162(m) of the Code, and to conform to any change in applicable law or to
regulations or rulings of administrative agencies; provided, however, that no
amendment shall be effective without the requisite prior or subsequent
stockholder approval which would (a) except as contemplated in Paragraph 12,
increase the maximum
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number of shares of Common Stock for which options may be granted under the Plan
or change the 162(m) Maximum, (b) materially increase the benefits to
participants under the Plan or (c) change the eligibility requirements to
receive options hereunder. No termination, suspension or amendment of the Plan
shall, without the consent of the holder of an existing option affected thereby,
adversely affect his rights under such option. The power of the Committee to
construe and administer any options granted under the Plan prior to the
termination or suspension of the Plan nevertheless shall continue after such
termination or during such suspension.
14. NON-TRANSFERABILITY OF OPTIONS. No option granted under the Plan
shall be transferable otherwise than by will or the laws of descent and
distribution, and options may be exercised, during the lifetime of the holder
thereof, only by him or his legal representatives. Except to the extent
provided above, options may not be assigned, transferred, pledged, hypothecated
or disposed of in any way (whether by operation of law or otherwise) and shall
not be subject to execution, attachment or similar process.
15. WITHHOLDING TAXES. The Company may withhold cash and/or shares
of Common Stock to be issued with respect thereto having an aggregate fair
market value equal to the amount which it determines is necessary to satisfy its
obligation to withhold Federal, state and local income taxes or other amounts
incurred by reason of the grant or exercise of an option, its disposition, or
the disposition of the underlying shares of Common Stock. Alternatively, the
Company may require the holder to pay to the Company such amount, in cash,
promptly upon demand. The Company shall not be required to issue any shares of
Common Stock pursuant to any such option until all required payments have been
made. Fair market value of the shares of Common Stock shall be determined in
accordance with Paragraph 5.
16. LEGENDS; PAYMENT OF EXPENSES. The Company may endorse such
legend or legends upon the certificates for shares of Common Stock issued upon
exercise of an option under the Plan and may issue such "stop transfer"
instructions to its transfer agent in respect of such shares as it determines,
in its discretion, to be necessary or appropriate to (a) prevent a violation of,
or to perfect an exemption from, the registration requirements of the Securities
Act, (b) implement the provisions of the Plan or any agreement between the
Company and the optionee with respect to such shares of Common Stock, or (c)
permit the Company to determine the occurrence of a "disqualifying disposition,"
as described in Section 421(b) of the Code, of the shares of Common Stock
transferred upon the exercise of an ISO granted under the Plan.
The Company shall pay all issuance taxes with respect to the issuance
of shares of Common Stock upon the exercise of an
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option granted under the Plan, as well as all fees and expenses incurred by the
Company in connection with such issuance.
17. USE OF PROCEEDS. The cash proceeds from the sale of shares of
Common Stock pursuant to the exercise of options under the Plan shall be added
to the general funds of the Company and used for such corporate purposes as the
Board of Directors may determine.
18. SUBSTITUTIONS AND ASSUMPTIONS OF OPTIONS OF CERTAIN CONSTITUENT
CORPORATIONS. Anything in this Plan to the contrary notwithstanding, the Board
of Directors may, without further approval by the shareholders, substitute new
options for prior options of a Constituent Corporation (as defined in Paragraph
19) or assume the prior options of such Constituent Corporation.
19. DEFINITIONS.
(a) Subsidiary. the term "Subsidiary" shall have the same
definition as "subsidiary corporation" in Section 424(f) of the Code.
(b) Parent. The term "Parent" shall have the same definition as
"parent corporation" in Section 424(e) of the Code.
(c) Constituent Corporation. The term "Constituent Corporation"
shall mean any corporation which engages with the Company, its Parent or any
Subsidiary in a transaction to which Section 424(a) of the Code applies (or
would apply if the option assumed or substituted were an ISO), or any Parent or
any Subsidiary of such corporation.
(d) Disability. The term "Disability" shall mean a permanent and
total disability within the meaning of Section 22(e)(3) of the Code.
(e) Employee Option. the term "Employee Option" shall mean an
option granted pursuant to the Plan to an individual who, at the time of grant,
is an employee of the Company or a Subsidiary of the Company.
(f) Consultant Option. The term "Consultant Option" shall mean a
NQSO granted pursuant to the Plan to a person who, at the time of grant, is a
consultant or advisor of the Company or a Subsidiary of the Company, and at such
time is neither a common law employee of the Company or any of its Subsidiaries
nor a director of the Company.
(g) Non-Employee Director Option. The term "non-Employee
Director Option" shall mean a NQSO granted pursuant to
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the Plan to a person who, at the time of the grant, is a Non-Employee Director.
(h) Non-Employee Director. The term "Non-Employee Director"
shall mean a person who is a director of the Company, but is not a common law
employee of the Company or of any of its Subsidiaries or its Parent.
20. GOVERNING LAW. The Plan, such options as may be granted
hereunder and all related matters shall be governed by, and construed in
accordance with, the laws of the State of California, without regard to conflict
of law provisions.
21. PARTIAL INVALIDITY. The invalidity or illegality of any
provision herein shall not affect the validity of any other provision.
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