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EXHIBIT 4.3
CONVOY CORPORATION
1997 STOCK OPTION PLAN
As Adopted Effective January 2, 1997
As Amended on July 9, 1998
1. Purpose. The purpose of the Convoy Corporation 1997 Stock Option
Plan (the "Plan") is to provide incentives to attract, retain and motivate
eligible employees, officers and directors of, and consultants to, Convoy
Corporation, a Delaware corporation (the "Company"), and its Affiliates, if any.
To accomplish the foregoing objectives, the Plan provides a means whereby
eligible employees, directors and consultants may receive stock options
("Options") to purchase shares of the Company's common stock ("Common Stock").
As used in the Plan, the term "Affiliates" shall mean any parent corporation or
subsidiary corporation of the Company as those terms are defined in Sections
424(e) and (f) of the Internal Revenue Code of 1986, as amended (the "Code").
The Plan is intended to be a written compensatory benefit plan within the
meaning of Rule 701 promulgated under the Securities Act of 1933, as amended
(the "Securities Act").
2. Stock Options. Stock Options granted pursuant to the Plan may, at
the discretion of the Board of Directors of the Company ("Board"), be granted as
either an Incentive Stock Option ("ISO") or a Nonstatutory Stock Option ("NSO").
An ISO shall mean an option described in Section 422 of the Code. An NSO shall
mean any option not meeting the requirements of Section 422 of the Code and any
other option designated as an NSO in the document by which it is granted.
3. Administration. The Board, whose authority shall be plenary, shall
administer the Plan unless and until such time as the Board delegates
administration of the Plan pursuant to subsection 3(b), below.
(a) Subject to and within the limits of the express provisions
of the Plan, the Board, whose determinations shall be conclusive, shall have the
power to:
(i) Grant Options pursuant to the Plan;
(ii) Determine from time to time which of the
eligible persons are to receive Options under the Plan (such persons upon such
grants becoming "Optionees"), the number of shares of Common Stock subject to
each Option grant, the price at which the holder of an Option may purchase the
shares of Common Stock issuable upon exercise of the Option ("Exercise Price"),
the time or times within which all or portions of each Option may be exercised,
and the other terms and conditions of each Option;
(iii) Construe and interpret the Plan and Options
granted under it and to establish, amend, and revoke rules and regulations for
its administration. The Board, in the exercise of this power, shall generally
determine all questions of policy and expediency that may arise and may correct
any defect, omission or inconsistency in the Plan, any Option or any exercise
document in a manner and to the extent it shall deem necessary or expedient to
make the Plan fully effective;
(iv) Grant Options in exchange for cancellation of
Options granted earlier at the same or different Exercise Prices; provided,
however, nothing contained herein shall empower the Board to
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grant an ISO under conditions or pursuant to terms that are inconsistent with
the requirements of subsection 4(b), below, or Section 422 of the Code;
(v) Determine the vesting and exercisability of
Options;
(vi) Prescribe the forms of written instruments that
shall constitute the stock option acceptance letters ("Stock Option Acceptance
Letters") and the stock restriction agreements ("Stock Restriction Agreements"),
standard forms of which shall be attached hereto from time to time, and all
other documents used in conjunction with Option grants and exercises under the
Plan;
(vii) Amend the Plan as provided in Section 14 below;
(viii) Generally, to exercise such powers and to
perform such acts as are deemed necessary or expedient to promote the best
interests of the Company;
(ix) Take appropriate action to cause any Option
granted hereunder to cease to be an ISO; provided, however, no such action may
be taken by the Board without the written consent of the affected Optionee; and
(x) To accelerate the vesting of any or all unvested
Options or Restricted Shares (as defined in the Plan documents referenced
herein) to the fullest extent permissible pursuant to Section 260.140.41(f) of
Title 10, California Code of Regulations, or any replacement regulation, for
officers, directors and consultants of the Company, notwithstanding anything to
the contrary contained herein.
(b) The Board may delegate administration of the Plan
(including, without limitation, the Board's powers under subsection 3(a) above)
to committee acting under the authority of the Board. In the event that the
Company has registered any equity security under Section 12 of the Securities
and Exchange Act of 1934, as amended (the "Exchange Act"), such committee shall
consist of not less than two (2) members of the Board, each of whom shall be a
"disinterested person" within the meaning of Rule 16b-3 of the Exchange Act and
an "outside director" as such term is defined for purposes of Section 162(m) of
the Code. The Board shall have complete discretion to determine the composition,
structure, form, term and operation of any committee established to administer
the Plan. The Board may, at any time, terminate the functions of the committee
and reassume all powers and authority previously delegated to the committee. For
purposes of the Plan, the "Plan Administrator" shall mean the Board or any
committee administering the Plan under the authority of the Board, as the case
may be.
4. Common Stock Subject to Plan and to Option.
(a) Subject to the provisions of Section 13 below (relating to
adjustments upon changes in stock), the total number of shares reserved and
available for grants of Options and issuance pursuant to the Plan shall not
exceed an aggregate of one million five hundred thousand (1,500,000) shares of
Common Stock. If any Options granted under the Plan shall for any reason
terminate or expire without having been exercised in full, or if any shares of
Common Stock are issued upon the exercise of an Option and repurchased by the
Company pursuant to Section 9(b) below, then the shares of Common Stock not
purchased under such Options or the shares of Common Stock issued upon Option
exercise and then repurchased by the Company, as the case may be, shall be
available again for the purpose of the Plan.
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(b) The aggregate fair market value (determined as of the
respective dates of grant) of shares of Common Stock with respect to which ISOs
are exercisable for the first time by an Optionee during any calendar year
(under the Plan, and under any other incentive stock option plans of the Company
and its Affiliates) cannot exceed $100,000. If the aggregate fair market value
(determined as of the respective dates of grant) of shares of Common Stock with
respect to which Options that otherwise would be ISOs are exercisable for the
first time by an Optionee during any calendar year exceeds $100,000, then the
Options for $100,000 worth of shares of Common Stock becoming exercisable in
such calendar year that were granted earliest will be ISOs and the Options for
the amount in excess of $100,000 that become exercisable in that calendar year
will be NSOs. In the event that the Code or the regulations promulgated
thereunder are amended after the effective date of the Plan to provide for a
different limit (or no limit) on the fair market value of shares of Common Stock
permitted to be subject to ISOs, then such different limit automatically will be
incorporated herein and will apply to any Options to which such amendment
applies.
5. Eligibility.
(a) All employees of the Company and its Affiliates (including
officers and directors who are also employees of the Company) are eligible to
receive ISOs. NSOs (as defined in Section 2 of the Plan) may be granted to
employees, directors and consultants of the Company and its Affiliates;
provided, however, any such consultants must render bona fide services
("Services") to the Company not in connection with the offer and sale of
securities in a capital raising transaction. A person may be granted more than
one Option under the Plan and may hold more than one Option at any time.
(b) No Option granted under the Plan may be granted to a
person who, at the time such Option is granted, owns stock possessing more than
ten percent (10%) of the total combined voting power of all classes of
outstanding capital stock of the Company or any of its Affiliates, unless the
Exercise Price is at least one hundred percent (100%) in the case of an NSO, or
one hundred ten percent (110%) in the case of an ISO, of the fair market value
of the stock subject to the Option and such Option by its terms is not
exercisable after five (5) years from the date such Option is granted. For
purposes of this subsection 5(b), in determining stock ownership, an Optionee
shall be considered as owning the voting capital stock owned, directly or
indirectly, by or for his or her brothers and sisters, spouse, ancestors and
lineal descendants. Voting capital stock owned, directly or indirectly, by or
for a corporation, partnership, estate or trust shall be considered as being
owned proportionately by or for its stockholders, partners or beneficiaries, as
applicable. For purposes of this subsection 5(b), outstanding capital stock
shall include all capital stock actually issued and outstanding at the time of
the grant of the Option to the Optionee. Outstanding capital stock shall not
include capital stock authorized for issue under outstanding Options held by the
Optionee or by any other person.
6. Terms of Options. Options granted pursuant to the Plan need not be
identical, but each Option shall be granted within ten (10) years from the date
the Plan is adopted by the Board or approved by the stockholders, whichever is
earlier, shall specify the number of shares of Common Stock to which it pertains
and shall be subject to the following terms and conditions:
(a) Options shall become exercisable at such times (including,
if the Board so determines, immediately, subject to repurchase pursuant to
Section 9 below) and upon such events as may be determined by the Board and set
forth in the respective Stock Option Acceptance Letters governing such Options.
(b) The Exercise Price for shares of Common Stock under each
Option shall be determined by the Plan Administrator at the time the Option is
granted. In no event shall such Exercise
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Price be less than eighty-five percent (85%) in the case of an NSO, or one
hundred percent (100%) in the case of an ISO, of the fair market value of the
shares of Common Stock subject to the Option on the date the Option is granted,
or, if applicable, such greater amount as is set forth in Section 5(b) above.
For all purposes of the Plan, the fair market value of the Common Stock shall be
determined as follows:
(i) if such Common Stock is publicly traded and is
then listed or admitted to trading on a national securities exchange, then its
closing price on the principal national securities exchange on which the Common
Stock is listed or admitted to trading as reported in The Wall Street Journal
for the last trading date immediately preceding the date of determination;
(ii) if such Common Stock is publicly traded and is
then quoted on the NASDAQ National Market System, but is not then listed or
admitted to trading on a national securities exchange, then its closing price on
the NASDAQ National Market System as reported in The Wall Street Journal for the
last trading date immediately preceding the date of determination;
(iii) if such Common Stock is publicly traded but is
not then quoted on the NASDAQ National Market System nor listed or admitted to
trading on a national securities exchange, the average of the closing bid and
asked prices on the last trading date immediately preceding the date of
determination as reported by The Wall Street Journal (or, if not so reported, as
otherwise reported by any newspaper or other source as the Board may determine);
or
(iv) if none of the foregoing is applicable, then by
the Board in good faith taking into consideration the following factors: the
Company's net worth, prospective earning power and dividend-paying capacity, and
other relevant factors including the goodwill of the business; the economic
outlook in the particular industry; the Company's position in the industry and
its management; the degree of control of the business represented by the block
of stock to be valued; and the values of securities of corporations engaged in
the same or similar lines of business which are listed on a stock exchange. In
addition to the relevant factors described above, consideration also shall be
given to nonoperating assets including proceeds of life insurance policies
payable to or for the benefit of the Company, to the extent such nonoperating
assets have not been taken into account in the determination of net worth,
prospective earning power, and dividend-paying capacity.
(c) The term of any Option shall not be greater than ten (10)
years from the date it is granted, or, if applicable, such shorter period as is
set forth in Section 5(b) above.
(d) An Option by its terms, shall not be transferable
otherwise than by will or the laws of descent and distribution and may be
exercisable, during the lifetime of the Optionee, only by the Optionee.
Notwithstanding the above, if an Optionee is determined to be incompetent by a
court of proper jurisdiction, his or her legal representative may exercise the
Option on his or her behalf.
(e) Each Option shall become exercisable on an annual basis as
to not less than twenty percent (20%) of the total number of shares of Common
Stock subject thereto.
(f) Subject to the restrictions set forth in Section 6(g)
below, Options under the Plan may be exercised by an Optionee regardless of
whether he or she is employed or retained by the Company or its Affiliates at
the time of exercise.
(g) Upon an Optionee's Separation (as defined below), the
Optionee's right to exercise an Option shall be as follows:
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(i) If an Optionee is Separated (as defined below)
for any reason other than the death or Disability (as defined herein) of the
Optionee, then, within three (3) months following the date of such Separation,
or within such longer period as the Plan Administrator may fix, the Optionee
shall have the right to exercise the Option to the extent such Option was
exercisable on Optionee's Separation Date (as defined below).
(ii) If an Optionee is Separated due to disability
(as defined in Section 22(e)(3) of the Code and determined by the Plan
Administrator) ("Disability"), then, within twelve (12) months following the
date of such Separation, or within such longer period as the Plan Administrator
may fix, the Optionee shall have the right to exercise the Option to the extent
such Option was exercisable on the Optionee's Separation Date.
(iii) If an Optionee is Separated as a result of the
Optionee's death, the Optionee's estate shall have the right for a period of
twelve (12) months following the date of death, or for such longer period as the
Plan Administrator may fix, to exercise the Option to the extent such Option was
exercisable on the Optionee's Separation Date, or to the extent otherwise
specified by the Plan Administrator. An Optionee's estate shall mean his or her
legal representative or any person who acquires the right to exercise an Option
by reason of the Optionee's death.
(iv) Notwithstanding the foregoing, in no event may
an Option be exercised after the expiration of the term of the Option.
(v) For purposes of this Plan, "Separated" or
"Separation" shall mean with respect to an Optionee, that such Optionee has
ceased to provide services as an employee, officer, director or consultant to
the Company or its Affiliates for any reason. Subject to applicable law, the
Plan Administrator will have sole discretion to determine whether an Optionee
has ceased to provide services and the effective date on which the Optionee
ceased to provide services (the "Separation Date")
(h) In the event of any of the following transactions (each a
"Corporate Transaction"):
(i) a merger or consolidation or other form of
business combination in which the Company is not the surviving entity, or the
Company's stockholders do not own a majority of the voting securities of the
resulting entity, except for a transaction the principal purpose of which is to
change the State of the Company's incorporation;
(ii) the sale, transfer or other disposition of all
or substantially all of the assets of the Company;
(iii) the dissolution or complete liquidation of the
Company; or
(iv) any reverse merger in which the Company is the
surviving entity but in which all of the Company's outstanding voting stock is
transferred to the acquiring entity or its wholly-owned subsidiary,
then, any or all outstanding Options may be assumed, converted or replaced by
the successor corporation, (if any), which assumption, conversion or replacement
will be binding on all Optionees. In the alternative, the successor corporation
may substitute equivalent Options or provide substantially similar
considerations to Optionees as was provided to stockholders (after taking into
account the existing provisions of the Options).
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The successor corporation may also issue, in place of outstanding shares of
Common Stock held by the Optionee, substantially similar shares or other
property subject to repurchase restrictions and other provisions no less
favorable to the Optionee than those which applied to such outstanding shares of
Common Stock immediately prior to such Corporate Transaction. In the event such
successor corporation (if any) fails or refuses to assume or substitute Options,
as provided above pursuant to a Corporate Transaction, then notwithstanding any
other provision in this Plan to the contrary, such Options will expire on such
Corporate Transaction at such time and on such conditions as the Board will
determine.
Each outstanding Option which is assumed in connection with the
Corporate Transaction or is otherwise to continue in effect shall be
appropriately adjusted immediately after such Corporate Transaction to apply and
pertain to the number and class of securities which would have been issuable, in
consummation of such Corporate Transaction, to an actual holder of the same
number of shares of Common Stock as are subject to such Option immediately prior
to such Corporate Transaction. Appropriate adjustments shall also be made to the
Exercise Price payable per share, provided the aggregate Exercise Price payable
for such securities shall remain the same. In addition, the class and number of
securities available for issuance under the Plan following consummation of the
Corporate Transaction shall be appropriately adjusted.
The grant of Options under the Plan shall in no way affect the right of
the Company to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate, sell or
transfer all or any part of its business or assets.
7. Payments and Loans Upon Exercise.
(a) Payment. Payment for Common Stock purchased pursuant to
the Plan may be made in cash (by check) or, where expressly approved by the
Board for an Optionee and where permitted by law:
(1) by cancellation of indebtedness of the Company to
the Optionee;
(2) by surrender of Common Stock that either: (1) is
owned by Optionee and has been paid for within
the meaning of the United States Securities and
Exchange Commission ("SEC") Rule 144 (and, if
such Common Stock were purchased from the Company
by use of a promissory note, such note has been
fully paid with respect to such Common Stock); or
(2) was obtained by the Optionee in the public
market;
(3) by tender of a full recourse promissory note
having such terms as may be approved by the Board
and bearing interest at a rate sufficient to
avoid imputation of income under Sections 483,
1274 and 7872 of the Code; provided, however,
that Optionees who are not employees or directors
of the Company will not be entitled to purchase
Common Stock with a promissory note unless the
note is adequately secured by collateral other
than the Common Stock;
(4) by waiver of compensation due or accrued to the
Optionee for services rendered;
(5) provided that a public market exists for the
Company's stock:
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(i) through a "same day sale" commitment from
the Optionee and a broker-dealer that is a
member of the National Association of
Securities Dealers (an "NASD Dealer")
whereby the Optionee irrevocably elects to
exercise the Option and to sell a portion of
the Common Stock so purchased to pay for the
Exercise Price, and whereby the NASD Dealer
irrevocably commits upon receipt of such
Common Stock to forward the Exercise Price
directly to the Company; or
(ii) through a margin commitment from the
Optionee and a NASD Dealer whereby the
Optionee irrevocably elects to exercise the
Option and to pledge the Common Stock so
purchased to the NASD Dealer in a margin
account as security for a loan from the NASD
Dealer in the amount of the Exercise Price,
and whereby the NASD Dealer irrevocably
commits upon receipt of such Common Stock to
forward the Exercise Price directly to the
Company; or
(6) by any combination of the foregoing.
8. Use of Proceeds from Stock. Proceeds from the sale of stock pursuant
to Options granted under the Plan shall be used for general corporate purposes,
or as determined by the Board.
9. Stock Transfer Restrictions; Repurchase Provisions. At the
discretion of the Plan Administrator, the Company may reserve to itself and/or
its assignee(s) (a) a right of first refusal to purchase all shares of Common
Stock issued pursuant to the exercise of Options granted under the Plan that
Optionee (or a subsequent transferee) may propose to transfer to a third party,
unless otherwise not permitted by Title 10, Section 260.140.42 of the California
Code of Regulations or any successor or other regulation with respect thereto,
and/or (b) in case of immediately exercisable Options, a right to repurchase
shares of Common Stock issued pursuant to the exercise of Options granted under
the Plan which are held by such Optionee following such Optionee's Separation at
any time within the later of (i) ninety (90) days after Optionee's Separation
Date, or (ii) ninety (90) days after such Optionee's exercise of an Option, in
each case, for cash and/or cancellation of indebtedness arising from the
purchase of such shares upon such exercise, at the Optionee's Exercise Price,
provided, that such right of repurchase shall lapse at the rate of at least
twenty percent (20%) per year over five (5) years from the date of grant of the
Option. Common Stock issued pursuant to the exercise of an Option granted under
the Plan shall be subject to such stock transfer restrictions and repurchase
rights as shall be set forth in the respective Stock Restriction Agreement
applicable to the exercise of such Option. Each Optionee exercising an Option
shall be required to execute such Stock Restriction Agreement prior to receiving
his or her Common Stock.
10. Market Stand-Off. Optionee agrees in connection with any
registration of the Company's securities that, upon the request of the Company
or the underwriters managing any public offering of the Company's securities,
Optionee will not sell or otherwise dispose of any Common Stock without the
prior written consent of the Company or such underwriters, as the case may be,
for such period of time (not to exceed one hundred eighty (180) days) after the
effective date of such registration requested by such managing underwriters and
subject to all restrictions as the Company or the underwriters may specify.
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11. Withholding Taxes. Whenever Common Stock is to be issued to an
Optionee upon exercise of an Option, the Company may require the Optionee to
remit to the Company cash in an amount sufficient to satisfy any federal, state
and local withholding tax requirements prior to the Company's delivery to the
Optionee of any certificate or certificates for such Common Stock. Whenever,
under the Plan, a cash payment is to be made to any Optionee in cancellation of
an Option or for the repurchase of shares of Common Stock acquired upon exercise
of an Option, such payment may be made net of any amount necessary to satisfy
any federal, state and local withholding tax requirements.
When, under applicable tax laws, an Optionee incurs tax liability in
connection with the exercise or vesting of any outstanding Option or any shares
of Common Stock acquired upon exercise of an Option that is subject to tax
withholding and the Optionee is obligated to pay the Company the amount required
to be withheld, the Board may, in its sole discretion, allow the Optionee to
satisfy the minimum withholding tax obligation by electing to have the Company
withhold from the shares of Common Stock to be issued or becoming vested that
number of shares of Common Stock having a fair market value equal to the minimum
amount required to be withheld, determined as of the date that the amount of tax
to be withheld is determined. All elections by an Optionee to have Common Stock
withheld for this purpose will be made in accordance with the requirements
established by the Board and be in writing in a form acceptable to the Board.
12. Voting and Dividends. No Optionee will have any of the rights of a
stockholder with respect to any shares of Common Stock until the shares of
Common Stock are issued to the Optionee. After shares of Common Stock are issued
to the Optionee, the Optionee will be a stockholder and have all of the rights
of a stockholder with respect to such shares of Common Stock, including the
right to vote and to receive all dividends or other distributions made or paid
with respect to such shares of Common Stock; provided, however, that the
Optionee will have no right to retain stock dividends or other distributions of
stock made with respect to shares of Common Stock that are repurchased or
subject to repurchase pursuant to Section 9(b) of the Plan until such repurchase
provisions lapse.
13. Adjustments of and Changes in the Stock. In the event that shares
of Common Stock, as presently constituted, shall be changed into or exchanged
for a different number or kind of common stock or other securities of the
Company or of another corporation (whether by reason of merger, consolidation,
recapitalization, reclassification, split-up, combination of Common Stock, or
otherwise), or if the outstanding Common Stock is increased through the payment
of a stock dividend or stock split, then there shall be substituted for or added
to each share of Common Stock theretofore appropriated or thereafter subject or
which may become subject to an Option under the Plan, the number and kind of
common stock or other securities into which each outstanding share of Common
Stock shall be so changed, or for which each such share shall be exchanged or to
which each such share shall be entitled, as the case may be. Outstanding Options
shall also be appropriately amended as to Exercise Price and other terms if
necessary to reflect the foregoing events. In the event there shall be any other
change in the number or kind of shares of the outstanding Common Stock, or of
any stock or other securities into which such Common Stock shall have been
changed, or for which it shall have been exchanged, then if the Board shall, in
its sole discretion, determine that such change equitably requires an adjustment
in any Option theretofore granted or which may be granted under the Plan, such
adjustment shall be made in accordance with such determination. No right to
purchase any fractional share of Common Stock shall result from any adjustment
in Options pursuant to this Section 13. In case of any such adjustment, the
shares of Common Stock subject to the Option shall be rounded down to the
nearest whole share. Notice of any adjustment shall be given by the Company to
each holder of an Option which shall have been so adjusted and such adjustment
(whether or not such notice is given) shall be effective and binding for all
purposes of the Plan.
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14. Amendment of the Plan. The Board may, at any time, amend the Plan
in any respect, including, without limitation, amendment of any form of Stock
Option Acceptance Letter, Stock Restriction Agreement or other document relating
to its administration and grants under the Plan, or any exercise instrument;
provided, however, that the Board alone cannot, without the applicable approval
of the stockholders of the Company, amend any provision of the Plan as it
applies to ISOs in any manner that requires such stockholder approval pursuant
to the Code or the regulations promulgated thereunder.
It is expressly contemplated that the Board may amend the Plan in any
respect necessary to provide the Company's employees with the maximum benefits
provided or to be provided under Section 422 of the Code and the regulations
promulgated thereunder relating to ISOs and/or to bring the Plan or Options
granted under the Plan into compliance therewith.
Rights and obligations under any Option granted before any amendment of
the Plan shall not be altered or impaired by amendment of the Plan, except with
the consent of the Optionee, which consent may be obtained in any manner the
Board considers to be appropriate.
15. Certificates. All certificates for shares of Common Stock or other
securities delivered under the Plan will be subject to such stock transfer
orders, legends and other restrictions as the Board may deem necessary or
advisable, including restrictions under any applicable federal, state or foreign
securities laws, or any rules, regulations and other requirements of the SEC or
any stock exchange or automated quotation system upon which the Common Stock may
be listed or quoted.
16. Escrow; Pledge of Common Stock. To enforce any restrictions on
shares of Common Stock acquired by an Optionee on exercise of an Option, the
Board may require the Optionee to deposit all certificates representing such
shares of Common Stock, together with stock powers or other instruments or
transfer approved by the Board, appropriately endorsed in blank, with the
Company or an agent designated by the Company to hold such shares of Common
Stock in escrow until such restrictions have lapsed or terminated, and the Board
may cause a legend or legends referencing such restrictions to be placed on the
certificates. Any Optionee who is permitted to execute a promissory note as
partial or full consideration for the purchase of the shares of Common Stock
under this Plan will be required to pledge and deposit with the Company all or
part of the shares of Common Stock so purchased as collateral to secure the
payment of the Optionee's obligation to the Company under the promissory note;
provided, however, that the Board may require or accept other or additional
forms of collateral to secure the payment of such obligation and, in any event,
the Company will have full recourse against the Optionee under the promissory
note notwithstanding any pledge of the Optionee's shares of Common Stock or
other collateral. In connection with any pledge of shares of Common Stock,
Optionee will be required to execute and deliver a written pledge agreement.
Shares of Common Stock purchased with a promissory note may be released from the
pledge on a pro rata basis as the promissory note is paid.
17. Exchange and Buyout of Options. The Board may, at any time,
authorize the Company, with the consent of the respective Optionees, to issue
new Options in exchange for the surrender and cancellation of any and/or all
outstanding Options. The Board may, at any time, acquire from an Optionee an
Option previously granted with payment in cash, Common Stock (including
restricted stock) or other consideration, based on such terms and conditions as
the Board and the Optionee may agree.
18. Securities Law and Other Regulatory Compliance. The Plan is
intended to comply with Section 25102(o) of the California Corporations Code.
Any provision of the Plan which is inconsistent with Section 25102(o) shall,
without further act or amendment by the Company or the Board, be reformed to
comply with the requirements of Section 25102(o). An Option issued under the
Plan will not be effective unless such Option is in compliance with all
applicable federal and state securities laws, rules and regulations of any
governmental body, and the requirements of any stock exchange or automated
quotation
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system upon which the Common Stock may then be listed or quoted, as they are in
effect on the date of grant of the Option and also on the date of exercise or
other issuance. Notwithstanding any other provision in the Plan, the Company
will have no obligation to issue or deliver certificates for shares of Common
Stock under the Plan prior to (a) obtaining any approvals from governmental
agencies that the Company determines are necessary or advisable, and/or (b)
compliance with any exemption, completion of any registration or other
qualification of such shares of Common Stock under any state or federal law or
ruling of any governmental body that the Company determines to be necessary or
advisable. The Company will be under no obligation to register the Common Stock
with the SEC or to effect compliance with the exemption, registration,
qualification or listing requirements of any state securities laws, stock
exchange or automated quotation system, and the Company will have no liability
for any inability or failure to do so.
19. No Obligation to Employ. Nothing in the Plan or any Option granted
under the Plan will (a) confer or be deemed to confer on any Optionee any right
to continue in the employ of, or to continue any other relationship with, the
Company or its Affiliates; (b) limit in any way the right of the Company or its
Affiliates, to terminate Optionee's employment or other relationship at any time
for any reason or no reason; or (c) alter an Optionee's "at-will" employment or
contract status.
20. Termination or Suspension of the Plan. The Board may, at any time,
suspend or terminate the Plan. The Plan, unless sooner terminated, shall
terminate at the end of ten (10) years from the date the Plan is adopted by the
Board or approved by the stockholders of the Company, whichever is earlier. An
Option may not be granted under the Plan while the Plan is suspended or after it
is terminated.
Rights and obligations under any Option granted while the Plan is in
effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the Optionee, which consent may be obtained in
any manner the Board considers to be appropriate.
21. Time of Granting Options. The date of grant of an Option hereunder,
for all purposes, shall be the date on which the Board (or committee under
authority of the Board) makes the determination granting such Option.
22. Effective Date of Plan. The Plan will become effective on the date
that it is adopted by the Board (the "Effective Date"). The Plan will be
approved by the stockholders of the Company, consistent with applicable laws,
within twelve (12) months of the Effective Date. If such stockholder approval is
not obtained within the time period referenced above, then all Options
previously granted under the Plan shall terminate, and no further Options shall
be granted and no Common Stock shall be issued under the Plan. Subject to such
limitation, the Board may grant Options under the Plan at any time after the
Effective Date and before the date fixed herein for termination of the Plan;
provided; however, that no Option may be exercised prior to stockholder approval
of the Plan.
23. Gender. The use of any gender specific pronoun or similar term is
intended to be without legal significance as to gender.
24. Financial Reports. The Company shall provide financial and other
information regarding the Company, on an annual or more frequent basis, to each
person holding an outstanding Option under the Plan as required pursuant to
Section 260.140.46 of Title 10, California Code of Regulations.
EXHIBITS
EXHIBIT A - INCENTIVE STOCK OPTION ACCEPTANCE LETTER
(IMMEDIATELY EXERCISABLE)
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EXHIBIT B -NONSTATUTORY STOCK OPTION ACCEPTANCE LETTER
(IMMEDIATELY EXERCISABLE)
EXHIBIT C- STOCK RESTRICTION AGREEMENT
(IMMEDIATELY EXERCISABLE)
EXHIBIT D - INCENTIVE STOCK OPTION ACCEPTANCE LETTER
EXHIBIT E- NONSTATUTORY STOCK OPTION ACCEPTANCE LETTER
EXHIBIT F -STOCK RESTRICTION AGREEMENT
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