EXHIBIT 4.3
SILICON INVESTOR, INC.
1996 STOCK PLAN
1. Purposes of the Plan. The purposes of this 1996 Stock Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and its Subsidiaries and to promote the success of the Company's
business. Options granted under the Plan may be incentive stock options (as
defined under Section 422 of the Code) or nonstatutory stock options, as
determined by the Administrator at the time of grant of an option and subject to
the applicable provisions of Section 422 of the Code, as amended, and the
regulations promulgated thereunder. Stock purchase rights may also be granted
under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its
Committees appointed pursuant to Section 4 of the Plan.
(b) "Board"' means the Board of Directors of the Company.
(c) "Code"' means the Internal Revenue Code of 1986, as
amended.
(d) "Committee" means the Committee appointed by the Board
of Directors in accordance with Section 4(a) of the Plan.
(e) "Common Stock" means the Common Stock of the Company.
(f) "Company" means Silicon Investor, Inc., a Delaware
corporation.
(g) "Consultant" means any person, including an advisor,
who is engaged by the Company or any Parent or Subsidiary to
render services and is compensated for such services, and any
director of the Company whether compensated for such services or
not.
(h) "Continuous Status as an Employee or Consultant" means
the absence of any interruption or termination of service as an
Employee or Consultant. Continuous Status as an Employee or
Consultant shall not be considered interrupted in the case of (i)
sick leave; (ii) military leave-(iii) any other leave of absence
approved by the Administrator, provided that such leave is for a
period of not more than ninety (90) days, unless reemployment
upon the expiration of such leave is guaranteed by contract or
statute, or unless provided otherwise pursuant to Company policy
adopted from time to time; or (iv) in the case of transfers
between locations of the Company or between the Company, its
Subsidiaries or their respective successors. For purposes of this
Plan, a change in
status from an Employee to a Consultant or from a Consultant to
an Employee will not constitute an interruption of Continuous
Status as an Employee or Consultant.
(i) "Employee" means any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of
the Company, with the status of employment determined based upon
such minimum number of hours or periods worked as shall be
determined by the Administrator in its discretion, subject to any
requirements of the Code. The payment by the Company of a
director's fee to a Director shall not be sufficient to
constitute "employment" of such Director by the Company.
(j) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(k) "Fair Market Value" means, as of any date, the fair
market value of Common Stock determined as follows:
(i) If the Common Stock is listed on any
established stock exchange or a national market system
including without limitation the 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 system or
exchange, or the exchange with the greatest volume of
trading in Common Stock 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 Administrator
deems reliable;
(ii) If the Common Stock is quoted on the Nasdaq
System (but not on the 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 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 Administrator
deems reliable; or
(iii) In the absence of an established market for
the Common Stock, the Fair Market Value thereof shall be
determined in good faith by the Administrator.
(l) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of
Section 422 of the Code, as designated in the applicable written
option agreement.
-2-
(m) "Nonstatutory Stock Option" means an Option not
intended to qualify as an Incentive Stock Option, as designated
in the applicable written option agreement.
(n) "Option" means a stock option granted pursuant to the
Plan.
(o) "Optioned Stock" means the Common Stock subject to an
Option or a Stock Purchase Right.
(p) "Optionee" means an Employee or Consultant who receives
an Option or a Stock Purchase Right.
(q) "Parent" means a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code, or
any successor provision.
(r) "Plan," means this 1996 Stock Plan.
(s) "Reporting Person" means an officer, director, or
greater than ten percent stockholder of the Company within the
meaning of Rule 16a-2 under the Exchange Act, who is required to
file reports pursuant to Rule l6a-3 under the Exchange Act.
(t) "Restricted Stock" means shares of Common Stock
acquired pursuant to a grant of a Stock Purchase Right under
Section 10 below.
(u) "Rule 16b-3" means Rule 16b-3 promulgated under the
Exchange Act, as the same may be amended from time to time, or
any successor provision.
(v) "Share" means a share of the Common Stock, as adjusted
in accordance with Section 12 of the Plan.
(w) "Stock Exchange" means any stock exchange or
consolidated stock price reporting system on which prices for the
Common Stock are quoted at any given time.
(x) "Stock Purchase Right" means the right to purchase
Common Stock pursuant to Section 10 below.
(y) "Subsidiary" means a "subsidiary corporation," whether
now or hereafter existing, as defined in Section 424(f) of the
Code, or any successor provision.
3. Stock Subject to the Plan. Subject to the provisions of Section 12 of
the Plan, the maximum aggregate number of Shares that may be optioned and sold
under the Plan is 1,500,000 shares of Common Stock. The Shares may be
authorized, but unissued, or reacquired Common Stock. If an Option should expire
or become unexercisable for any reason without having been exercised in full,
the unpurchased Shares that were subject thereto shall, unless the Plan shall
have
-3-
been terminated, become available for future grant under the Plan. In addition,
any Shares of Common Stock which are retained by the Company upon exercise of an
Option or Stock Purchase Right in order to satisfy the exercise or purchase
price for such Option or Stock Purchase Right or any withholding taxes due with
respect to such exercise shall be treated as not issued and shall continue to be
available under the Plan. Shares repurchased by the Company pursuant to any
repurchase right which the Company may have shall not be available for future
grant under the Plan.
4. Administration of the Plan.
(a) Initial Plan Procedure. Prior to the date, if any, upon
which the Company becomes subject to the Exchange Act, the Plan
shall be administered by the Board or a committee appointed by
the Board.
(b) Plan Procedure After the Date, if any, Upon Which the
Company Becomes Subject to the Exchange Act.
(i) Multiple Administrative Bodies. If permitted
by Rule 16b-3, grants under the Plan may be made by
different bodies with respect to directors, non-director
officers and Employees or Consultants who are not Reporting
Persons.
(ii) Administration With Respect to Reporting
Persons. With respect to grants of Options or Stock
Purchase Rights to Employees who are Reporting Persons,
such grants shall be made by (A) the Board if the Board may
make grants to Reporting Persons under the Plan in
compliance with Rule 16b-3, or (B) a committee designated
by the Board to make such grants under the Plan, which
committee shall be constituted in such a manner as to
permit grants under the Plan to comply with Rule 16b-3.
Once appointed, such committee shall continue to serve in
its designated capacity until otherwise directed by the
Board. From time to time the Board may increase the size of
the committee and appoint additional members thereof,
remove members (with or without cause) and appoint new
members in substitution therefor, fill vacancies, however
caused, and remove all members of the committee and
thereafter directly make grants to Reporting Persons under
the Plan, all to the extent permitted by Rule 16b-3.
(iii) Administration With Respect to Consultants and
Other Employees. With respect to grants of Options or Stock
Purchase Rights to Employees or Consultants who are not
Reporting Persons, the Plan shall be administered by (A)
the Board or (B) a committee designated by the Board, which
committee shall be constituted in such a manner as to
satisfy the legal requirements relating to the
administration of incentive stock option plans, if any, of
California corporate and securities laws, of the Code and
of any applicable Stock Exchange (the "Applicable Laws").
Once appointed, such Committee shall continue to serve in
its
-4-
designated capacity until otherwise directed by the Board.
From time to time the Board may increase the size of the
Committee and appoint additional members thereof, remove
members (with or without cause) and appoint new members in
substitution therefor, fill vacancies, however caused, and
remove all members of the Committee and thereafter directly
administer the Plan, all to the extent permitted by the
Applicable Laws.
(c) Powers of the Administrator. Subject to the provisions
of the Plan and in the case of a Committee, the specific duties
delegated by the Board to such Committee, and subject to the
approval of any relevant authorities, including the approval, if
required, of any Stock Exchange, the Administrator shall have the
authority, in its discretion:
(i) to determine the Fair Market Value of the
Common Stock, in accordance with Section 2(k) of the Plan;
(ii) to select the Consultants and Employees to
whom Options and Stock Purchase Rights may from time to
time be granted hereunder,
(iii) to determine whether and to what extent
Options and Stock Purchase Rights or any combination
thereof are granted hereunder,
(iv) to determine the number of shares of Common
Stock to be covered by each such award granted hereunder;
(v) to approve forms of agreement for use under
the Plan;
(vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award
granted hereunder;
(vii) to determine whether and under what
circumstances an Option may be settled in cash under
Section 9(f) instead of Common Stock;
(viii) to reduce the exercise p ice of any Option to
the then current Fair Market Value if the Fair Market Value
of the Common Stock covered by such Option shall have
declined since the date the Option was granted;
(ix) to determine the terms and restrictions
applicable to Stock Purchase Rights and the Restricted
Stock purchased by exercising such Stock Purchase Rights,
and
(x) to construe and interpret the terms of the
Plan and awards granted pursuant to the Plan; and
-5-
(xi) in order to fulfill the purposes of the Plan
and without amending the Plan, to modify grants of Options
or Stock Purchase Rights to participants who are foreign
nationals or employed outside of the United States in order
to recognize differences in local law, tax policies or
customs.
(d) Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be
final and binding on all holders of Options or Stock Purchase
Rights.
5. Eligibility.
(a) Recipients of Grants. Nonstatutory Stock Options and
Stock Purchase Rights may be granted to Employees and
Consultants. Incentive Stock Options may be granted only to
Employees. An Employee or Consultant who has been granted an
Option or Stock Purchase Right may, if he or she is otherwise
eligible, be granted additional Options or Stock Purchase Rights.
(b) Type of Option. Each Option shall be designated in the
written option agreement as either an incentive Stock Option or a
Nonstatutory Stock Option. However, notwithstanding such
designations, to the extent that the aggregate Fair Market Value
of Shares with respect to which Options designated as Incentive
Stock Options are exercisable for the first time by any Optionee
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 Nonstatutory Stock Options. For purposes of this
Section 5(b), Incentive Stock Options shall be taken into account
in the order in which they were granted, and the Fair Market
Value of the Shares subject to an Incentive Stock Option shall be
determined as of the date of the grant of such Option.
(c) The Plan shall not confer upon any Optionee any right
with respect to continuation of employment or consulting
relationship with the Company, nor shall it interfere in any way
with such Optionee's right or the Company's right to terminate
his or her employment or consulting relationship at any time,
with or without cause.
6. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
stockholders of the Company as described in Section 19 of the Plan. It shall
continue in effect for a term of ten (IO) years unless sooner terminated under
Section 15 of the Plan.
7. Term of 0ption. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof or such shorter term as may be
provided in the Option Agreement and provided further that, in the case of an
Incentive Stock Option granted to an Optionee who, at the time the Option is
granted, owns stock representing more than ten percent (10%) of the total
combined voting power of
-6-
all classes of stock of the Company or any Parent or Subsidiary, the term of the
Option shall be five (5) years from the date of grant thereof or such shorter
term as may be provided in the written option agreement.
8. Option Exercise Price and Consideration.
(a) The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be such price as
is determined by the Board and set forth in the applicable
agreement, but shall be subject to the following:
(i) In the case of an Incentive Stock Option that
is:
(A) granted to an Employee who, at the
time of the grant of such Incentive Stock
Option, owns stock representing more than ten
percent (10%) of the total combined voting power
of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise
price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.
(B) granted to any other Employee, the
per Share exercise price shall be no less than
100% of the Fair Market Value per Share on the
date of grant.
(ii) In the case of a Nonstatutory Stock Option
that is:
(A) granted to a person who, at the
time of the grant of such Option, owns stock
representing more than ten percent (10%) of the
total combined voting power of all classes of
stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall
be no less than I 10% of the Fair Market Value
per Share on the date of the grant.
(B) granted to any person, the per
Share exercise price shall be no less than 85%
of the Fair Market Value per Share on the date
of grant.
(b) The consideration to be paid for the Shares to be
issued upon exercise of an Option, including the method of
payment, shall be determined by the Administrator (and, in the
case of an Incentive Stock Option, shall be determined at the
time of grant) and may consist entirely of (1) cash, (2) check,
(3) promissory note (subject to the provisions of Section 153 of
the Delaware General Corporation Law), (4) other Shares that (x)
in the case of Shares acquired upon exercise of an Option, have
been owned by the Optionee for more than six months on the date
of surrender or such other period as may be required to avoid a
charge to the Company's earnings, and (y) have a Fair Market
Value on the date of surrender equal to the aggregate exercise
price of the Shares as to which such Option shall be exercised,
(5) authorization for the Company to retain from the
-7-
total number of Shares as to which the Option is exercised that
number of Shares having a Fair Market Value on the date of
exercise equal to the exercise price for the total number of
Shares as to which the Option is exercised, (6) delivery of a
properly executed exercise notice together with such other
documentation as the Administrator and the broker, if applicable,
shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the
exercise price and any applicable income or employment taxes, (7)
delivery of an irrevocable subscription agreement for the Shares
that irrevocably obligates the option holder to take and pay for
the Shares not more than twelve months after the date of delivery
of the subscription agreement, (8) any combination of the
foregoing methods of payment, or (9) such other consideration and
method of payment for the issuance of Shares to the extent
permitted under Applicable Laws. In making its determination as
to the type of consideration to accept, the Administrator shall
consider if acceptance of such consideration may be reasonably
expected to benefit the Company.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any
Option granted hereunder shall be exercisable at such times and
under such conditions as determined by the Administrator, and
reflected in the written option agreement, which may include
vesting requirements and/or performance criteria with respect to
the Company and/or the Optionee; provided that such Option shall
become exercisable at the rate of at least twenty percent (20%)
per year over five (5) years from the date the Option is granted.
In the event that any of the Shares issued upon exercise of an
Option should be subject to a right of repurchase in the
Company's favor, such repurchase right shall lapse at the rate of
at least twenty percent (20%) per year over five (5) years from
the date the Option is granted. An Option may not be exercised
for a fraction of a Share.
An Option shall be deemed to be exercised when written
notice of such exercise has been given to the Company in
accordance with the terms of the Option by the person entitled to
exercise the Option and the Company has received full payment for
the Shares with respect to which the Option is exercised. Full
payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 8(b)
of the Plan. Until the issuance (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate
evidencing such Shares, no right to vote or receive dividends or
any other fights as a stockholder shall exist with respect to the
Optioned Stock, not withstanding the exercise of the Option. The
Company shall issue (or cause to be issued) such stock
certificate promptly upon exercise of the Option. No adjustment
will be made for a dividend or other fight for which the record
date is prior to the date the stock certificate is issued, except
as provided in Section 12 of the Plan.
-8-
Exercise of an Option in any manner shall result in a
decrease in the number of Shares that thereafter may be
available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is
exercised.
(b) Termination of Employment or Consulting Relationship.
Subject to Section 9(c), in the event of termination of an
Optionee's Continuous Status as an Employee or Consultant with
the Company, such Optionee may, but only within three (3) months
(or such other period of time not less than thirty (30) days as
is determined by the Administrator, with such determination in
the case of an Incentive Stock Option being made at the time of
grant of the Option and not exceeding three (3) months) after the
date of such termination (but in no event later than the
expiration date of the term of such Option as set forth in the
Option Agreement), exercise his or her Option to the extent that
the Optionee was entitled to exercise it at the date of such
termination. To the extent that Optionee was not entitled to
exercise the Option at the date of such termination, or if
Optionee does not exercise such Option to the extent so entitled
within the time specified herein, the Option shall terminate. No
termination shall be deemed to occur and this Section 9(b) shall
not apply if (i) the Optionee is a Consultant who becomes an
Employee; or (ii) the Optionee is an Employee who becomes a
Consultant.
(c) Disability of Optionee.
(i) Notwithstanding Section 9(b) above, in the
event of termination of an Optionee's Continuous Status as
an Employee or Consultant as a result of his or her total
and permanent disability (within the meaning of Section
22(e)(3) of the Code), Optionee may, but only within twelve
(12) months from the date of such termination (but in no
event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise the
Option to the extent otherwise entitled to exercise it at
the date of such termination. To the extent that Optionee
was not entitled to exercise the Option at the date of
termination, or if Optionee does not exercise such Option
to the extent so entitled within the time specified herein,
the Option shall terminate.
(ii) In the event of termination of an Optionee's
Continuous Status as an Employee or Consultant as a result
of a disability which does not fall within the meaning of
total and permanent disability (as set forth in Section
22(e)(3) of the Code), Optionee may, but only within six
(6) months from the date of such termination (but in no
event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise the
Option to the extent otherwise entitled to exercise it at
the date of such termination. However, to the extent that
such Optionee fails to exercise an Option which is an
Incentive Stock Option ("ISO") (within the meaning of
Section 422 of the Code) within three (3) months of the
date of such termination, the Option will not
-9-
qualify for ISO treatment under the Code. To the extent
that Optionee was not entitled to exercise the Option at
the date of termination, or if Optionee does not exercise
such Option to the extent so entitled within six months (6)
from the date of termination, the Option shall terminate.
(d) Death of 0ptionee. In the event of the death of an
Optionee during the period of Continuous Status as an Employee or
Consultant since the date of grant of the Option, or within
thirty (30) days following termination of Optionee's Continuous
Status as an Employee or Consultant, the Option may be exercised,
at any time within six (6) months following the date of death
(but in no event later than the expiration date of the term of
such Option as set forth in the Option Agreement), by Optionee's
estate or by a person who acquired the right to exercise the
Option by bequest or inheritance, but only to the extent of the
right to exercise that had accrued at the date of death or, if
earlier, the date of termination of Optionee's Continuous Status
as an Employee or Consultant. To the extent that Optionee was not
entitled to exercise the Option at the date of death or
termination, as the case may be, or if Optionee does not exercise
such Option to the extent so entitled within the time specified
herein, the Option shall terminate.
(e) Rule 16b-3. Options granted to Reporting Persons shall
comply with Rule 16b-3 and shall contain such additional
conditions or restrictions as may be required thereunder to
qualify for the maximum exemption for Plan transactions.
(f) Buyout Provisions. The Administrator may at any time
offer to buy out for a payment in cash or Shares, an Option
previously granted, based on such terms and conditions as the
Administrator shall establish and communicate to the Optionee at
the time that such offer is made.
10. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be
issued either alone, in addition to, or in tandem with other
awards granted under the Plan and/or cash awards made outside of
the Plan, After the Administrator determines that it will offer
Stock Purchase Rights under the Plan, it shall advise the offeree
in writing of the terms, conditions and restrictions related to
the offer, including the number of Shares that such person shall
be entitled to purchase, the price to be paid (which price shall
not be less than 85% of the Fair Market Value of the Shares as of
the date of the offer, or, in the case of a person owning stock
representing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or any Parent
or Subsidiary, the price shall not be less than one hundred
percent (100%) of the Fair Market Value of the Shares as of the
date of the offer), and the time within which such person must
accept such offer, which shall in no event exceed thirty (30)
days from the date upon which the Administrator made the
determination to grant the Stock Purchase Right. The offer shall
be accepted by execution of a Restricted Stock purchase agreement
in the form determined by the Administrator. Shares purchased
-10-
pursuant to the grant of a Stock Purchase Right shall be referred
to herein as "Restricted Stock."
(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock purchase agreement shall grant
the Company a repurchase option exercisable upon the voluntary or
involuntary termination of the purchaser's employment with the
Company for any reason (including death or disability). The
purchase price for Shares repurchased pursuant to the Restricted
Stock purchase agreement shall be the original purchase price
paid by the purchaser and may be paid by cancellation of any
indebtedness of the purchaser to the Company. The repurchase
option shall lapse at such rate as the Administrator may
determine, but at a minimum rate of 20% per year.
(c) Other Provisions. The Restricted Stock purchase
agreement shall contain such other terms, provisions and
conditions not inconsistent with the Plan as may be determined by
the Administrator in its sole discretion. In addition, the
provisions of Restricted Stock purchase agreements need not be
the same with respect to each purchaser.
(d) Rights as a Stockholder. Once the Stock Purchase Right
is exercised, the purchaser shall have the rights equivalent to
those of a stockholder, and shall be a stockholder when his or
her purchase is entered upon the records of the duly authorized
transfer agent of the Company. No adjustment will be made for a
dividend or other right for which the record date is prior to the
date the Stock Purchase Right is exercised, except as provided in
Section 12 of the Plan.
11. Stock Withholding to Satisfy Withholding Tax Obligations. At the
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph. When an Optionee incurs tax liability in
connection with an Option or Stock Purchase Right, which tax liability is
subject to tax withholding under applicable tax laws, and the Optionee is
obligated to pay the Company an amount required to be withheld under applicable
tax laws, the Optionee may satisfy the withholding tax obligation by one or some
combination of the following methods: (a) by cash payment, or (b) out of
Optionee's current compensation, (c) if permitted by the Administrator, in its
discretion, by surrendering to the Company Shares that (i) in the case of Shares
previously acquired from the Company, have been owned by the Optionee for more
than six months on the date of surrender, and (ii) have a fair market value on
the date of surrender equal to or less than Optionee's marginal tax rate times
the ordinary income recognized, or (d) by electing to have the Company withhold
from the Shares to be issued upon exercise of the Option, or the Shares to be
issued in connection with the Stock Purchase Right, if any, that number of
Shares having a fair market value equal to the amount required to be withheld.
For this purpose, the fair market value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be determined
(the "Tax Date").
-11-
Any surrender by a Reporting Person of previously owned Shares to satisfy
tax withholding obligations arising upon exercise of this Option must comply
with the applicable provisions of Rule 16b-3.
All elections by an Optionee to have Shares withheld to satisfy tax
withholding obligations shall be made in writing in a form acceptable to the
Administrator and shall be subject to the following restrictions:
(a) the election must be made on or prior to the applicable
Tax Date;
(b) once made, the election shall be irrevocable as to the
particular Shares of the Option or Stock Purchase Right as to
which the election is made; and
(c) all elections shall be subject to the consent or
disapproval of the Administrator.
In the event the election to have Shares withheld is made by an Optionee
and the Tax Date is deferred under Section 83 of the Code because no election is
filed under Section 83(b) of the Code, the Optionee shall receive the full
number of Shares-with respect to which the Option or Stock Purchase Right is
exercised but such Optionee shall be unconditionally obligated to tender back to
the Company the proper number of Shares on the Tax Date.
12. Adjustments Upon Changes in Capitalization, Merger or Certain Other
Transactions.
(a) Changes in Capitalization. Subject to any required
action by the stockholders of the Company, the number of shares
of Common Stock covered by each outstanding Option or Stock
Purchase Right, and the number of shares of Common Stock that
have been authorized for issuance under the Plan but as to which
no Options or Stock Purchase Rights have yet been granted or that
have been returned to the Plan upon cancellation or expiration of
an Option or Stock Purchase Right, as well as the price per share
of Common Stock covered by each such outstanding Option or Stock
Purchase Right, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock
dividend, combination, recapitalization or reclassification of
the Common Stock, or any other increase or decrease in the number
of issued shares of Common Stock effected without receipt of
consideration by the Company-provided, however, that conversion
of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in
that respect shall be final, binding and conclusive. Except as
expressly provided herein, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of
stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of
shares of Common Stock subject to an Option or Stock Purchase
Right.
-12-
(b) Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, the Board
shall notify the Optionee at least fifteen (15) days prior to
such proposed action. To the extent it has not been previously
exercised, the Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.
(c) Merger or Sale of Assets. In the event of a proposed
sale of all or substantially all of the Company's assets or a
merger of the Company with or into another corporation where the
successor corporation issues its securities to the Company's
stockholders, each outstanding Option or Stock Purchase Right
shall be assumed or an equivalent option or right shall be
substituted by such successor corporation or a parent or
subsidiary of such successor corporation, unless the successor
corporation does not agree to assume the Option or Stock Purchase
Right or to substitute an equivalent option or fight, in which
case such Option or Stock Purchase Right shall terminate upon the
consummation of the merger or sale of assets.
(d) Certain Distributions. In the event of any distribution
to the Company's stockholders of securities of any other entity
or other assets (other than dividends payable in cash or stock of
the Company) without receipt of consideration by the Company, the
Administrator may, in its discretion, appropriately adjust the
price per share of Common Stock covered by each outstanding
Option or Stock Purchase Right to reflect the effect of such
distribution.
13. Non-Transferability of Options and Stock Purchase Rights. Options and
Stock Purchase Rights may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised or purchased during the lifetime of
the Optionee or Stock Purchase Rights Holder only by the Optionee or Stock
Purchase Rights Holder.
14. Time of Granting Options and Stock Purchase Rights. The date of grant
of an Option or Stock Purchase Right shall, for all purposes, be the date on
which the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Board; provided
however that in the case of any Incentive Stock Option, the grant date shall be
the later of the date on which the Administrator makes the determination
granting such Incentive Stock Option or the date of commencement of the
Optionee's employment relationship with the Company. Notice of the determination
shall be given to each Employee or Consultant to whom an Option or Stock
Purchase Right is so granted within a reasonable time after the date of such
grant.
15. Amendment and Termination of the Plan.
(a) Authority to Amend or Terminate. The Board may at any
time amend, alter, suspend or discontinue the Plan, but no
amendment, alteration, suspension or discontinuation shall be
made that would impair the rights of any Optionee under any grant
theretofore made, without his or her consent. In addition, to the
extent necessary and desirable to comply with Rule 16b-3 or with
Section 422 of
-13-
the Code (or any other applicable law or regulation, including
the requirements of any Stock Exchange), the Company shall obtain
stockholder approval of any Plan amendment in such a manner and
to such a degree as required.
(b) Effect of Amendment or Termination. No amendment or
termination of the Plan shall adversely affect Options already
granted, unless mutually agreed otherwise between the Optionee
and the Board, which agreement must be in writing and signed by
the Optionee and the Company.
16. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option or Stock Purchase Right unless the
exercise of such Option or Stock Purchase Right and the issuance and delivery of
such Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any Stock Exchange. As a condition to the exercise of an Option,
the Company may require the person exercising such Option to represent and
warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required by law.
17. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. The inability of the Company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
18. Agreements. Options and Stock Purchase Rights shall be evidenced by
written agreements in such form as the Administrator shall approve from time to
time.
19. Stockholder Approval. Continuance of the Plan shall be subject to
approval by the stockholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such stockholder approval shall be obtained
in the degree and manner required under applicable state and federal law and the
rules of any Stock Exchange upon which the Common Stock is listed. All Options
and Stock Purchase Rights issued under the Plan shall become void in the event
such approval is not obtained.
20. Information and Documents to Optionees and Purchasers. The Company
shall provide financial statements at least annually to each Optionee and to
each individual who acquired Shares Pursuant to the Plan, during the period such
Optionee or purchaser has one or more Options or Stock Purchase Rights
outstanding, and in the case of an individual who acquired Shares pursuant to
the Plan, during the period such individual owns such Shares. The Company shall
not be required to provide such information if the issuance of Options or Stock
Purchase Rights under the Plan is limited to key employees whose duties in
connection with the Company assure their access to equivalent information. In
addition, at the time of issuance of any securities under the Plan, the
-14-
Company shall provide to the Optionee or the Purchaser a copy of the Plan and
any agreement(s) pursuant to which securities under the Plan are issued.
-15-