EXHIBIT 4.5
AUTHORIZE.NET CORPORATION
1999 STOCK INCENTIVE PLAN
1. Purposes of the Plan. The purposes of this Stock Incentive Plan are to
attract and retain the best available personnel, to provide additional incentive
to Employees, Directors and Consultants and to promote the success of the
Company's business.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of the Committees
appointed to administer the Plan.
(b) "Applicable Laws" means the legal requirements relating to
the administration of stock incentive plans, if any, under applicable
provisions of federal securities laws, state corporate and securities
laws, the Code, the rules of any applicable stock exchange or national
market system, and the rules of any foreign jurisdiction applicable to
Awards granted to residents therein.
(c) "Award" means the grant of an Option, Restricted Stock, or
other right or benefit under the Plan.
(d) "Award Agreement" means the written agreement evidencing the
grant of an Award executed by the Company and the Grantee, including
any amendments thereto.
(e) "Board" means the Board of Directors of the Company.
(f) "Cause" means, with respect to the termination by the Company
or a Related Entity of the Grantee's Continuous Service, that such
termination is for "Cause" as such term is expressly defined in a
then-effective written agreement between the Grantee and the Company
or such Related Entity, or in the absence of such then-effective
written agreement and definition, is based on, in the determination of
the Administrator, the Grantee's: (i) refusal or failure to act in
accordance with any specific, lawful direction or order of the Company
or a Related Entity; (ii) unfitness or unavailability for service or
unsatisfactory performance (other than as a result of Disability);
(iii) performance of any act or failure to perform any act in bad
faith and to the detriment of the Company or a Related Entity; (iv)
dishonesty, intentional misconduct or material breach of any agreement
with the Company or a Related Entity; or (v) commission of a crime
involving dishonesty, breach of trust, or physical or emotional harm
to any person. At least thirty (30) days prior to the termination of
the Grantee's Continuous Service pursuant to (i) or (ii) above, the
Company shall provide the Grantee with notice of the Company's or such
Related Entity's intent to terminate, the reason therefor, and an
opportunity for the Grantee to cure such defects in his or her service
to the Company's or such Related Entity's satisfaction. During this
thirty (30) day (or longer) period, no Award issued to the Grantee
under the Plan may be exercised or purchased.
(g) "Code" means the Internal Revenue Code of 1986, as amended.
(h) "Committee" means any committee appointed by the Board to
administer the Plan.
(i) "Common Stock" means the common stock of the Company.
(j) "Company" means Authorize.Net Corporation, a Utah
corporation.
(k) "Consultant" means any person (other than an Employee or a
Director, solely with respect to rendering services in such person's
capacity as a Director) who is engaged by the Company or any Related
Entity to render consulting or advisory services to the Company or
such Related Entity.
(l) "Continuous Service" means that the provision of services to
the Company or a Related Entity in any capacity of Employee, Director
or Consultant, is not interrupted or terminated. Continuous Service
shall not be considered interrupted in the case of (i) any approved
leave of absence, (ii) transfers between locations of the Company or
among the Company, any Related Entity, or any successor, in any
capacity of Employee, Director or Consultant, or (iii) any change in
status as long as the individual remains in the service of the Company
or a Related Entity in any capacity of Employee, Director or
Consultant (except as otherwise provided in the Award Agreement). An
approved leave of absence shall include sick leave, military leave, or
any other authorized personal leave. For purposes of Incentive Stock
Options, no such leave may exceed ninety (90) days, unless
reemployment upon expiration of such leave is guaranteed by statute or
contract.
(m) "Corporate Transaction" means any of the following
transactions to which the Company is a party:
(i) a merger or consolidation in which the Company is not the surviving
entity, except for a transaction the principal purpose of which is to change the
state in which the Company is incorporated;
(ii) the sale, transfer or other disposition of all or substantially all of
the assets of the Company (including the capital stock of the Company's
subsidiary corporations) in connection with the complete liquidation or
dissolution of the Company;
(iii) any reverse merger in which the Company is the surviving entity but
in which securities possessing more than fifty percent (50%) of the total
combined voting power of the Company's outstanding securities are transferred to
a person or persons different from those who held such securities immediately
prior to such merger; or
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(iv) acquisition by any person or related group of persons (other than the
Company or by a Company- sponsored employee benefit plan) of beneficial
ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities
possessing more than fifty percent (50%) of the total combined voting power of
the Company's outstanding securities, but excluding any such transaction that
the Administrator determines shall not be a Corporate Transaction.
(n) "Director" means a member of the Board or the board of
directors of any Related Entity.
(o) "Disability" means that a Grantee is permanently unable to
carry out the responsibilities and functions of the position held by
the Grantee by reason of any medically determinable physical or mental
impairment. A Grantee will not be considered to have incurred a
Disability unless he or she furnishes proof of such impairment
sufficient to satisfy the Administrator in its discretion.
(p) "Employee" means any person, including an Officer or
Director, who is an employee of the Company or any Related Entity. The
payment of a director's fee by the Company or a Related Entity shall
not be sufficient to constitute "employment" by the Company.
(q) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(r) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(i) Where there exists a public market for the Common Stock, the Fair
Market Value shall be (A) the closing price for a Share for the last market
trading day prior to the time of the determination (or, if no closing price was
reported on that date, on the last trading date on which a closing price was
reported) on the stock exchange determined by the Administrator to be the
primary market for the Common Stock or the Nasdaq National Market, whichever is
applicable, or (B) if the Common Stock is not traded on any such exchange or
national market system, the average of the closing bid and asked prices of a
Share on the Nasdaq Small Cap Market for the day prior to the time of the
determination (or, if no such prices were reported on that date, on the last
date on which such prices were reported), in each case, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable; or
(ii) In the absence of an established market for the Common Stock of the
type described in (i), above, the Fair Market Value thereof shall be determined
by the Administrator in good faith.
(s) "Grantee" means an Employee, Director or Consultant who
receives an Award under the Plan.
(t) "Immediate Family" means any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in law, daughter-in-
law, brother-in-law, or sister-in-law,
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including adoptive relationships, any person sharing the Grantee's
household (other than a tenant or employee), a trust in which these
persons (or the Grantee) have more than fifty percent (50%) of the
beneficial interest, a foundation in which these persons (or the
Grantee) control the management of assets, and any other entity in
which these persons (or the Grantee) own more than fifty percent (50%)
of the voting interests.
(u) "Incentive Stock Option" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the
Code.
(v) "Non-Qualified Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
(w) "Officer" means a person who is an officer of the Company or
a Related Entity within the meaning of Section 16 of the Exchange Act
and the rules and regulations promulgated thereunder.
(x) "Option" means an option to purchase Shares pursuant to an
Award Agreement granted under the Plan.
(y) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(z) "Plan" means this 1999 Stock Incentive Plan.
(aa) "Post-Termination Exercise Period" means the period
specified in the Award Agreement of not less than three (3) months
commencing on the date of termination (other than termination by the
Company or any Related Entity for Cause) of the Grantee's Continuous
Service, or such longer period as may be applicable upon death or
Disability.
(bb) "Registration Date" means the first to occur of (i) the
closing of the first sale to the general public of (A) the Common
Stock or (B) the same class of securities of a successor corporation
(or its Parent) issued pursuant to a Corporate Transaction in exchange
for or in substitution of the Common Stock, pursuant to a registration
statement filed with and declared effective by the Securities and
Exchange Commission under the Securities Act of 1933, as amended; and
(ii) in the event of a Corporate Transaction, the date of the
consummation of the Corporate Transaction if the same class of
securities of the successor corporation (or its Parent) issuable in
such Corporate Transaction shall have been sold to the general public
pursuant to a registration statement filed with and declared effective
by the Securities and Exchange Commission under the Securities Act of
1933, as amended, on or prior to the date of consummation of such
Corporate Transaction.
(cc) "Related Entity" means any Parent, Subsidiary and any
business, corporation, partnership, limited liability company or other
entity in which the
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Company, a Parent or a Subsidiary holds a substantial ownership
interest, directly or indirectly.
(dd) "Restricted Stock" means Shares issued under the Plan to the
Grantee for such consideration, if any, and subject to such
restrictions on transfer, rights of first refusal, repurchase
provisions, forfeiture provisions, and other terms and conditions as
established by the Administrator.
(ee) "Share" means a share of the Common Stock.
(ff) "Subsidiary" means a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan.
(a) Subject to the provisions of Section 11 (a) below, the
maximum aggregate number of Shares which may be issued pursuant to all
Awards (including Incentive Stock Options) is 200,000 Shares. The
Shares may be authorized, but unissued, or reacquired Common Stock.
(b) Any Shares covered by an Award (or portion of an Award) which
is forfeited or canceled, expires or is settled in cash, shall be
deemed not to have been issued for purposes of determining the maximum
aggregate number of Shares which may be issued under the Plan. If any
unissued Shares are retained by the Company upon exercise of an Award
in order to satisfy the exercise price for such Award or any
withholding taxes due with respect to such Award, such retained Shares
subject to such Award shall become available for future issuance under
the Plan (unless the Plan has terminated). Shares that actually have
been issued under the Plan pursuant to an Award shall not be returned
to the Plan and shall not become available for future issuance under
the Plan, except that if unvested Shares are forfeited, or repurchased
by the Company at their original purchase price, such Shares shall
become available for future grant under the Plan.
4. Administration of the Plan.
(a) Plan Administrator. With respect to grants of Awards to
Employees, Directors, or Consultants, the Plan shall be administered
by (A) the Board or (B) a Committee (or a subcommittee of the
Committee) designated by the Board, which Committee shall be
constituted in such a manner as to satisfy Applicable Laws. Once
appointed, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board.
(b) Powers of the Administrator. Subject to Applicable Laws and
the provisions of the Plan (including any other powers given to the
Administrator hereunder), and except as otherwise provided by the
Board, the Administrator shall have the authority, in its discretion:
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(i) to select the Employees, Directors and Consultants to whom Awards may
be granted from time to time hereunder;
(ii) to determine whether and to what extent Awards are granted hereunder;
(iii) to determine the number of Shares or the amount of other
consideration to be covered by each Award granted hereunder;
(iv) to approve forms of Award Agreements for use under the Plan;
(v) to determine the terms and conditions of any Award granted hereunder;
(vi) to establish additional terms, conditions, rules or procedures to
accommodate the rules or laws of applicable foreign jurisdictions and to afford
Grantees favorable treatment under such rules or laws; provided, however, that
no Award shall be granted under any such additional terms, conditions, rules or
procedures with terms or conditions which are inconsistent with the provisions
of the Plan;
(vii) to amend the terms of any outstanding Award granted under the Plan,
provided that any amendment that would adversely affect the Grantee's rights
under an outstanding Award shall not be made without the Grantee's written
consent;
(viii) to construe and interpret the terms of the Plan and Awards,
including without limitation, any notice of award or Award Agreement, granted
pursuant to the Plan; and
(ix) to take such other action, not inconsistent with the terms of the
Plan, as the Administrator deems appropriate.
(c) Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be
conclusive and binding on all persons.
5. Eligibility. Awards other than Incentive Stock Options may be granted to
Employees, Directors and Consultants. Incentive Stock Options may be granted
only to Employees of the Company, a Parent or a Subsidiary. An Employee,
Director or Consultant who has been granted an Award may, if otherwise eligible,
be granted additional Awards. Awards may be granted to such Employees, Directors
or Consultants who are residing in foreign jurisdictions as the Administrator
may determine from time to time.
6. Terms and Conditions of Awards.
(a) Type of Awards. The Administrator is authorized under the
Plan to award any type of arrangement to an Employee, Director or
Consultant that is not inconsistent with the provisions of the Plan
and that by its terms involves or might involve the issuance of (i)
Shares, (ii) an Option, or similar right with a fixed or variable
price related to the Fair Market Value of the Shares and with an
exercise or conversion privilege related to the passage of time, the
occurrence of one or
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more events, or the satisfaction of performance criteria or other
conditions, or (iii) any other security with the value derived from
the value of the Shares. Such awards include, without limitation,
Options, or sales or bonuses of Restricted Stock, and an Award may
consist of one such security or benefit, or two (2) or more of them in
any combination or alternative.
(b) Designation Of Award. Each Award shall be designated in the
Award Agreement. In the case of an Option, the Option shall be
designated as either an Incentive Stock Option or a Non-Qualified
Stock Option. However, notwithstanding such designation, to the extent
that the aggregate Fair Market Value of Shares subject to Options
designated as Incentive Stock Options which become exercisable for the
first time by a Grantee during any calendar year (under all plans of
the Company or any Parent or Subsidiary) exceeds $100,000, such excess
Options, to the extent of the Shares covered thereby in excess of the
foregoing limitation, shall be treated as Non-Qualified Stock Options.
For this purpose, Incentive Stock Options shall be taken into account
in the order in which they were granted, and the Fair Market Value of
the Shares shall be determined as of the grant date of the relevant
Option.
(c) Conditions of Award. Subject to the terms of the Plan, the
Administrator shall determine the provisions, terms, and conditions of
each Award including, but not limited to, the Award vesting schedule,
repurchase provisions, rights of first refusal, forfeiture provisions,
form of payment (cash, Shares, or other consideration) upon settlement
of the Award, payment contingencies, and satisfaction of any
performance criteria. The performance criteria established by the
Administrator may be based on any one of, or combination of, increase
in share price, earnings per share, total shareholder return, return
on equity, return on assets, return on investment, net operating
income, cash flow, revenue, economic value added, personal management
objectives, or other measure of performance selected by the
Administrator. Partial achievement of the specified criteria may
result in a payment or vesting corresponding to the degree of
achievement as specified in the Award Agreement.
(d) Acquisitions and Other Transactions. The Administrator may
issue Awards under the Plan in settlement, assumption or substitution
for, outstanding awards or obligations to grant future awards in
connection with the Company or a Related Entity acquiring another
entity, an interest in another entity or an additional interest in a
Related Entity whether by merger, stock purchase, asset purchase or
other form of transaction.
(e) Deferral of Award Payment. The Administrator may establish
one or more programs under the Plan to permit selected Grantees the
opportunity to elect to defer receipt of consideration upon exercise
of an Award, satisfaction of performance criteria, or other event that
absent the election would entitle the Grantee to payment or receipt of
Shares or other consideration under an Award. The Administrator may
establish the election procedures, the timing of such
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elections, the mechanisms for payments of, and accrual of interest or
other earnings, if any, on amounts, Shares or other consideration so
deferred, and such other terms, conditions, rules and procedures that
the Administrator deems advisable for the administration of any such
deferral program.
(f) Award Exchange Programs. The Administrator may establish one
or more programs under the Plan to permit selected Grantees to
exchange an Award under the Plan for one or more other types of Awards
under the Plan on such terms and conditions as determined by the
Administrator from time to time.
(g) Separate Programs. The Administrator may establish one or
more separate programs under the Plan for the purpose of issuing
particular forms of Awards to one or more classes of Grantees on such
terms and conditions as determined by the Administrator from time to
time.
(h) Early Exercise. The Award Agreement may, but need not,
include a provision whereby the Grantee may elect at any time while an
Employee, Director or Consultant to exercise any part or all of the
Award prior to full vesting of the Award. Any unvested Shares received
pursuant to such exercise may be subject to a repurchase right in
favor of the Company or a Related Entity or to any other restriction
the Administrator determines to be appropriate.
(i) Term of Award. The term of each Award shall be the term
stated in the Award Agreement. However, in the case of an Incentive
Stock Option granted to a Grantee who, at the time the Option is
granted, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or
Subsidiary, the term of the Incentive Stock Option shall be five (5)
years from the date of grant thereof or such shorter term as may be
provided in the Award Agreement.
(j) Transferability of Awards. Incentive Stock Options 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, during the lifetime of the Grantee,
only by the Grantee; provided, however, that the Grantee may designate
a beneficiary of the Grantee's Incentive Stock Option in the event of
the Grantee's death on a beneficiary designation form provided by the
Administrator. Other Awards shall be transferred by will and by the
laws of descent and distribution, and during the lifetime of the
Grantee, by gift and or pursuant to a domestic relations order to
members of the Grantee's Immediate Family to the extent and in the
manner determined by the Administrator.
(k) Time of Granting Awards. The date of grant of an Award shall
for all purposes be the date on which the Administrator makes the
determination to grant such Award, or such other date as is determined
by the Administrator. Notice of the grant determination shall be given
to each Employee, Director or
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Consultant to whom an Award is so granted within a reasonable time
after the date of such grant.
7. Award Exercise or Purchase Price, Consideration, Taxes and Reload
Options.
(a) Exercise or Purchase Price. The exercise or purchase price, if
any, for an Award shall be as follows:
(i) In the case of an Incentive Stock Option:
(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 voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
per Share exercise price shall be not less than one hundred ten percent (110%)
of the Fair Market Value per Share on the date of grant; or
(B) granted to any Employee other than an Employee described in the
preceding paragraph, the per Share exercise price shall be not less than one
hundred percent (100%) of the Fair Market Value per Share on the date of grant.
(ii) In the case of a Non-Qualified Stock Option, the per Share exercise
price shall be not less than eighty-five percent (85%) of the Fair Market Value
per Share on the date of grant unless otherwise determined by the Administrator.
(iii) In the case of other Awards, such price as is determined by the
Administrator.
(iv) Notwithstanding the foregoing provisions of this Section 7(a), in the
case of an Award issued pursuant to Section 6(d), above, the exercise or
purchase price for the Award shall be determined in accordance with the
principles of Section 424(a) of the Code.
(b) Consideration. Subject to Applicable Laws, the consideration
to be paid for the Shares to be issued upon exercise or purchase of an
Award 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). In addition to any other types of
consideration the Administrator may determine, the Administrator is
authorized to accept as consideration for Shares issued under the Plan
the following:
(i) cash;
(ii) check;
(iii) delivery of Grantee's promissory note with such recourse, interest,
security, and redemption provisions as the Administrator determines as
appropriate;
(iv) if the exercise or purchase occurs on or after the Registration Date,
surrender of Shares or delivery of a properly executed form of attestation of
ownership of Shares as the
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Administrator may require (including withholding of Shares otherwise
deliverable upon exercise of the Award) which have a Fair Market Value on
the date of surrender or attestation equal to the aggregate exercise price
of the Shares as to which said Award shall be exercised (but only to the
extent that such exercise of the Award would not result in an accounting
compensation charge with respect to the Shares used to pay the exercise
price unless otherwise determined by the Administrator);
(v) with respect to Options, if the exercise occurs on or after the
Registration Date, payment through a broker-dealer sale and remittance
procedure pursuant to which the Grantee (A) shall provide written
instructions to a Company designated brokerage firm to effect the immediate
sale of some or all of the purchased Shares and remit to the Company, out
of the sale proceeds available on the settlement date, sufficient funds to
cover the aggregate exercise price payable for the purchased Shares and (B)
shall provide written directives to the Company to deliver the certificates
for the purchased Shares directly to such brokerage firm in order to
complete the sale transaction; or
(vi) any combination of the foregoing methods of payment. (c) Taxes.
No Shares shall be delivered under the Plan to any Grantee or other person
until such Grantee or other person has made arrangements acceptable to the
Administrator for the satisfaction of any foreign, federal, state, or local
income and employment tax withholding obligations, including, without
limitation, obligations incident to the receipt of Shares or the
disqualifying disposition of Shares received on exercise of an Incentive
Stock Option. Upon exercise of an Award the Company shall withhold or
collect from Grantee an amount sufficient to satisfy such tax obligations.
(d) Reload Options. In the event the exercise price or tax
withholding of an Option is satisfied by the Company or the Grantee's
employer withholding Shares otherwise deliverable to the Grantee, the
Administrator may issue the Grantee an additional Option, with terms
identical to the Award Agreement under which the Option was exercised,
but at an exercise price as determined by the Administrator in
accordance with the Plan.
8. Exercise of Award.
(a) Procedure for Exercise, Rights as a Shareholder.
(i) Any Award granted hereunder shall be exercisable at such times and
under such conditions as determined by the Administrator under the terms of
the Plan and specified in the Award Agreement.
(ii) An Award 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 Award by the person entitled to exercise the Award and full payment for
the Shares with respect to which the Award is exercised, including, to the
extent selected, use of the broker-dealer sale and remittance procedure to
pay the purchase price as provided in Section 7(b)(v). Until the issuance
(as evidenced by the appropriate entry on the books of the Company or of a
duly authorized
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transfer agent of the Company) of the stock certificate evidencing such
Shares, no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to Shares subject to an Award,
notwithstanding the exercise of an Option or other Award. The Company shall
issue (or cause to be issued) such stock certificate promptly upon exercise
of the Award. No adjustment will be made for a dividend or other right for
which the record date is prior to the date the stock certificate is issued,
except as provided in the Award Agreement or Section 10, below.
(b) Exercise of Award Following Termination of Continuous Service.
(i) An Award may not be exercised after the termination date of such
Award set forth in the Award Agreement and may be exercised following the
termination of a Grantee's Continuous Service only to the extent provided
in the Award Agreement.
(ii) Where the Award Agreement permits a Grantee to exercise an
Award following the termination of the Grantee's Continuous Service for a
specified period, the Award shall terminate to the extent not exercised on
the last day of the specified period or the last day of the original term
of the Award, whichever occurs first.
(iii) Any Award designated as an Incentive Stock Option to the extent
not exercised within the time permitted by law for the exercise of
Incentive Stock Options following the termination of a Grantee's Continuous
Service shall convert automatically to a Non-Qualified Stock Option and
thereafter shall be exercisable as such to the extent exercisable by its
terms for the period specified in the Award Agreement.
(c) Buyout Provisions. The Administrator may at any
time offer to buy out for a payment in cash or Shares, an Award
previously granted, based on such terms and conditions as the
Administrator shall establish and communicate to the Grantee at
the time that such offer is made.
9. Conditions Upon Issuance of Shares.
(a) Shares shall not be issued pursuant to the exercise
of an Award unless the exercise of such Award and the issuance
and delivery of such Shares pursuant thereto shall comply with
all Applicable Laws, and shall be further subject to the approval
of counsel for the Company with respect to such compliance.
(b) As a condition to the exercise of an Award, the
Company may require the person exercising such Award 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 any
Applicable Laws.
10. Adjustments Upon Changes in Capitalization or Corporate Transaction.
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(a) Adjustments upon Changes in Capitalization. Subject to any
required action by the shareholders of the Company, the number of
Shares covered by each outstanding Award, and the number of Shares
which have been authorized for issuance under the Plan but as to which
no Awards have yet been granted or which have been returned to the
Plan, the exercise or purchase price of each such outstanding Award,
as well as any other terms that the Administrator determines require
adjustment shall be proportionately adjusted for (i) any increase or
decrease in the number of issued Shares resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification
of the Shares, or similar transaction affecting the Shares, (ii) any
other increase or decrease in the number of issued Shares effected
without receipt of consideration by the Company, or (iii) as the
Administrator may determine in its discretion, any other transaction
with respect to Common Stock to which Section 424(a) of the Code
applies or a similar transaction; 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 Administrator and its determination shall be
final, binding and conclusive. Except as the Administrator determines,
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 hereof shall be made with respect
to, the number or price of Shares subject to an Award.
(b) Corporate Transaction. Except as provided otherwise in an
individual Award Agreement, in the event of a Corporate Transaction,
each Award will terminate immediately prior to the specified effective
date of the Corporate Transaction, unless the Award is assumed by the
successor corporation or Parent thereof in connection with the
Corporate Transaction.
11. Effective Date and Term of Plan. The Plan shall become effective upon
the earlier to occur of its adoption by the Board or its approval by the
shareholders of the Company. It shall continue in effect for a term of ten (10)
years unless sooner terminated. Subject to Section 16, below, and Applicable
Laws, Awards may be granted under the Plan upon its becoming effective.
12. Amendment, Suspension or Termination of the Plan.
(a) The Board may at any time amend, suspend or terminate the
Plan. To the extent necessary to comply with Applicable Laws, the
Company shall obtain shareholder approval of any Plan amendment in
such a manner and to such a degree as required.
(b) No Award may be granted during any suspension of the Plan or
after termination of the Plan.
(c) Any amendment, suspension or termination of the Plan
(including termination of the Plan under Section 12, above) shall not
affect Awards already granted, and such Awards shall remain in full
force and effect as if the Plan had
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not been amended, suspended or terminated, unless mutually agreed
otherwise between the Grantee and the Administrator, which agreement
must be in writing and signed by the Grantee and the Company.
13. Reservation of Shares.
(a) The Company, during the term of the Plan, will at all times
reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
(b) 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.
14. No Effect on Terms of Employment/Consulting Relationship. The Plan
shall not confer upon any Grantee any right with respect to the Grantee's
Continuous Service, nor shall it interfere in any way with his or her right or
the Company's right to terminate the Grantee's Continuous Service at any time,
with or without cause.
15. No Effect on Retirement and Other Benefit Plans. Except as specifically
provided in a retirement or other benefit plan of the Company or a Related
Entity, Awards shall not be deemed compensation for purposes of computing
benefits or contributions under any retirement plan of the Company or a Related
Entity, and shall not affect any benefits under any other benefit plan of any
kind or any benefit plan subsequently instituted under which the availability or
amount of benefits is related to level of compensation. The Plan is not a
"Retirement Plan" or "Welfare Plan" under the Employee Retirement Income
Security Act of 1974, as amended.
16. Shareholder Approval. The grant of Incentive Stock Options under the
Plan shall be subject to approval by the shareholders of the Company within
twelve (12) months before or after the date the Plan is adopted excluding
Incentive Stock Options issued in substitution for outstanding Incentive Stock
Options pursuant to Section 424(a) of the Code. Such shareholder approval shall
be obtained in the degree and manner required under Applicable Laws. The
Administrator may grant Incentive Stock Options under the Plan prior to approval
by the shareholders, but until such approval is obtained, no such Incentive
Stock Option shall be exercisable. In the event that shareholder approval is not
obtained within the twelve (12) month period provided above, all Incentive Stock
Options previously granted under the Plan shall be exercisable as Non-Qualified
Stock Options.
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