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Exhibit 10.2
METABOLIX, INC.
2005 STOCK PLAN
1. DEFINITIONS.
Unless otherwise specified or unless the context otherwise requires, the
following terms, as used in this Metabolix, Inc. 2005 Stock Plan, have the
following meanings:
ADMINISTRATOR means the Board of Directors, unless it has delegated
power to act on its behalf to the Committee, in which case the
Administrator means the Committee.
AFFILIATE means a corporation which, for purposes of Section 424 of
the Code, is a parent or subsidiary of the Company, direct or
indirect.
AGREEMENT means an agreement between the Company and a Participant
delivered pursuant to the Plan, in such form as the Administrator
shall approve.
BOARD OF DIRECTORS means the Board of Directors of the Company.
CODE means the United States Internal Revenue Code of 1986, as
amended.
COMMITTEE means the committee of the Board of Directors to which the
Board of Directors has delegated power to act under or pursuant to the
provisions of the Plan.
COMMON STOCK means shares of the Company's common stock, $.01 par
value per share.
COMPANY means Metabolix, Inc., a Delaware corporation.
DISABILITY or DISABLED means permanent and total disability as defined
in Section 22(e)(3) of the Code.
EMPLOYEE means any employee of the Company or of an Affiliate
(including, without limitation, an employee who is also serving as an
officer or director of the Company or of an Affiliate), designated by
the Administrator to be eligible to be granted one or more Stock
Rights under the Plan.
FAIR MARKET VALUE of a Share of Common Stock means:
(1) If the Common Stock is listed on a national securities exchange
or traded in the over-the-counter market and sales prices are
regularly reported for the
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Common Stock, the closing or last price of the Common Stock on the
composite tape or other comparable reporting system for the trading
day immediately preceding the applicable date and if such date is not
a trading day, the last market trading day prior to such date;
(2) If the Common Stock is not traded on a national securities
exchange but is traded on the over-the-counter market, if sales prices
are not regularly reported for the Common Stock for the trading day
referred to in clause (1), and if bid and asked prices for the Common
Stock are regularly reported, the mean between the bid and the asked
price for the Common Stock at the close of trading in the
over-the-counter market for the trading day on which Common Stock was
traded immediately preceding the applicable date and if such date is
not a trading day, the last market trading day prior to such date; and
(3) If the Common Stock is neither listed on a national securities
exchange nor traded in the over-the-counter market, such value as the
Administrator, in good faith, shall determine.
ISO means an option meant to qualify as an incentive stock option
under Section 422 of the Code.
NON-QUALIFIED OPTION means an option which is not intended to qualify
as an ISO.
OPTION means an ISO or Non-Qualified Option granted under the Plan.
PARTICIPANT means an Employee, director or consultant of the Company
or an Affiliate to whom one or more Stock Rights are granted under the
Plan. As used herein, "Participant" shall include "Participant's
Survivors" where the context requires.
PLAN means this Metabolix, Inc. 2005 Stock Plan.
SHARES means shares of the Common Stock as to which Stock Rights have
been or may be granted under the Plan or any shares of capital stock
into which the Shares are changed or for which they are exchanged
within the provisions of Paragraph 3 of the Plan. The Shares issued
under the Plan may be authorized and unissued shares or shares held by
the Company in its treasury, or both.
STOCK-BASED AWARD means a grant by the Company under the Plan of an
equity award or equity based award which is not an Option or Stock
Grant.
STOCK GRANT means a grant by the Company of Shares under the Plan.
STOCK RIGHT means a right to Shares or the value of Shares of the
Company granted pursuant to the Plan -- an ISO, a Non-Qualified
Option, a Stock Grant or a Stock-Based Award.
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SURVIVOR means a deceased Participant's legal representatives and/or
any person or persons who acquired the Participant's rights to a Stock
Right by will or by the laws of descent and distribution.
2. PURPOSES OF THE PLAN.
The Plan is intended to encourage ownership of Shares by Employees and
directors of and certain consultants to the Company in order to attract such
people, to induce them to work for the benefit of the Company or of an Affiliate
and to provide additional incentive for them to promote the success of the
Company or of an Affiliate. The Plan provides for the granting of ISOs,
Non-Qualified Options, Stock Grants and Stock-Based Awards.
3. SHARES SUBJECT TO THE PLAN.
(a) The number of Shares which may be issued from time to time pursuant to
this Plan, shall be 2,250,000 plus the amount of shares of Common Stock, if any,
that are presently subject to awards under the Company's 1995 Stock Plan but
which become unissued upon the cancellation, surrender or termination of such
award for any reason whatsoever or the equivalent of such number of Shares after
the Administrator, in its sole discretion, has interpreted the effect of any
stock split, stock dividend, combination, recapitalization or similar
transaction in accordance with Paragraph 24 of the Plan. Notwithstanding the
foregoing, a maximum of 2,250,000 Shares may be issued pursuant to this Plan as
Stock Rights, including, but not limited to, ISOs.
(b) If an Option ceases to be outstanding, in whole or in part (other than
by exercise), or if the Company shall reacquire (at no more than its original
issuance price) any Shares issued pursuant to a Stock Grant or Stock-Based
Award, or if any Stock Right expires or is forfeited, cancelled, or otherwise
terminated or results in any Shares not being issued, the unissued Shares which
were subject to such Stock Right shall again be available for issuance from time
to time pursuant to this Plan.
4. ADMINISTRATION OF THE PLAN.
The Administrator of the Plan will be the Board of Directors, except to the
extent the Board of Directors delegates its authority to the Committee, in which
case the Committee shall be the Administrator. Subject to the provisions of the
Plan, the Administrator is authorized to:
a. Interpret the provisions of the Plan and all Stock Rights and to make
all rules and determinations which it deems necessary or advisable for
the administration of the Plan;
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b. Determine which Employees, directors and consultants shall be granted
Stock Rights;
c. Determine the number of Shares for which a Stock Right or Stock Rights
shall be granted; provided, however, that in no event shall Stock
Rights with respect to more than 125,000 Shares be granted to any
Participant in any fiscal year;
d. Specify the terms and conditions upon which a Stock Right or Stock
Rights may be granted;
e. to make changes to any outstanding Stock Right, including, without
limitation, to reduce or increase the exercise price or purchase
price, to accelerate the vesting schedule or to extend the expiration
date, provided that no such change shall impair the rights of a
Participant under any grant previously made without such Participant's
consent;
f. to buy out for a payment in cash or Shares, a Stock Right previously
granted and/or to cancel any such Stock Right and grant in
substitution therefor other Stock Rights, covering the same or a
different number of Shares and having an exercise price or purchase
price per share which may be lower or higher than the exercise price
or purchase price of the cancelled Stock Right, based on such terms
and conditions as the Administrator shall establish and the
Participant shall accept; and
g. Adopt any sub-plans applicable to residents of any specified
jurisdiction as it deems necessary or appropriate in order to comply
with or take advantage of any tax or other laws applicable to the
Company or to Plan Participants or to otherwise facilitate the
administration of the Plan, which sub-plans may include additional
restrictions or conditions applicable to Stock Rights or Shares
issuable pursuant to a Stock Right;
provided, however, that all such interpretations, rules, determinations, terms
and conditions shall be made and prescribed in the context of preserving the tax
status under Section 422 of the Code of those Options which are designated as
ISOs. Subject to the foregoing, the interpretation and construction by the
Administrator of any provisions of the Plan or of any Stock Right granted under
it shall be final, unless otherwise determined by the Board of Directors, if the
Administrator is the Committee. In addition, if the Administrator is the
Committee, the Board of Directors may take any action under the Plan that would
otherwise be the responsibility of the Committee.
To the extent permitted under applicable law, the Board of Directors or the
Committee may allocate all or any portion of its responsibilities and powers to
any one or more of its members and may delegate all or any portion of its
responsibilities and powers to any other person selected by it. The Board of
Directors or the Committee may revoke any such allocation or delegation at any
time.
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5. ELIGIBILITY FOR PARTICIPATION.
The Administrator will, in its sole discretion, name the Participants in
the Plan, provided, however, that each Participant must be an Employee, director
or consultant of the Company or of an Affiliate at the time a Stock Right is
granted. Notwithstanding the foregoing, the Administrator may authorize the
grant of a Stock Right to a person not then an Employee, director or consultant
of the Company or of an Affiliate; provided, however, that the actual grant of
such Stock Right shall be conditioned upon such person becoming eligible to
become a Participant at or prior to the time of the execution of the Agreement
evidencing such Stock Right. ISOs may be granted only to Employees.
Non-Qualified Options, Stock Grants and Stock-Based Awards may be granted to any
Employee, director or consultant of the Company or an Affiliate. The granting of
any Stock Right to any individual shall neither entitle that individual to, nor
disqualify him or her from, participation in any other grant of Stock Rights.
6. TERMS AND CONDITIONS OF OPTIONS.
Each Option shall be set forth in writing in an Option Agreement, duly
executed by the Company and, to the extent required by law or requested by the
Company, by the Participant. The Administrator may provide that Options be
granted subject to such terms and conditions, consistent with the terms and
conditions specifically required under this Plan, as the Administrator may deem
appropriate including, without limitation, subsequent approval by the
shareholders of the Company of this Plan or any amendments thereto. The Option
Agreements shall be subject to at least the following terms and conditions:
A. NON-QUALIFIED OPTIONS: Each Option intended to be a Non-Qualified
Option shall be subject to the terms and conditions which the
Administrator determines to be appropriate and in the best interest of
the Company, subject to the following minimum standards for any such
Non-Qualified Option:
a. OPTION PRICE: Each Option Agreement shall state the option price
(per share) of the Shares covered by each Option, which option
price shall be determined by the Administrator but shall not be
less than the Fair Market Value per share of Common Stock.
b. NUMBER OF SHARES: Each Option Agreement shall state the number of
Shares to which it pertains.
c. OPTION PERIODS: Each Option Agreement shall state the date or
dates on which it first is exercisable and the date after which
it may no longer be exercised, and may provide that the Option
rights accrue or become exercisable in installments over a period
of months or years, or upon the occurrence of certain conditions
or the attainment of stated goals or events.
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d. OPTION CONDITIONS: Exercise of any Option may be conditioned upon
the Participant's execution of a Share purchase agreement in form
satisfactory to the Administrator providing for certain
protections for the Company and its other shareholders, including
requirements that:
i. The Participant's or the Participant's Survivors' right to
sell or transfer the Shares may be restricted; and
ii. The Participant or the Participant's Survivors may be
required to execute letters of investment intent and must
also acknowledge that the Shares will bear legends noting
any applicable restrictions.
B. ISOs: Each Option intended to be an ISO shall be issued only to an Employee
and be subject to the following terms and conditions, with such additional
restrictions or changes as the Administrator determines are appropriate but
not in conflict with Section 422 of the Code and relevant regulations and
rulings of the Internal Revenue Service:
a. MINIMUM STANDARDS: The ISO shall meet the minimum standards required
of Non-Qualified Options, as described in Paragraph 6(A) above, except
clause (a) thereunder.
b. OPTION PRICE: Immediately before the ISO is granted, if the
Participant owns, directly or by reason of the applicable attribution
rules in Section 424(d) of the Code:
i. 10% OR LESS of the total combined voting power of all classes of
stock of the Company or an Affiliate, the Option price per share
of the Shares covered by each ISO shall not be less than 100% of
the Fair Market Value per share of the Shares on the date of the
grant of the Option; or
ii. More than 10% of the total combined voting power of all classes
of stock of the Company or an Affiliate, the Option price per
share of the Shares covered by each ISO shall not be less than
110% of the Fair Market Value on the date of grant.
c. TERM OF OPTION: For Participants who own:
i. 10% OR LESS of the total combined voting power of all classes of
stock of the Company or an Affiliate, each ISO shall terminate
not more than ten years from the date of the grant or at such
earlier time as the Option Agreement may provide; or
ii. More than 10% of the total combined voting power of all classes
of stock of the Company or an Affiliate, each ISO shall terminate
not
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more than five years from the date of the grant or at such
earlier time as the Option Agreement may provide.
d. LIMITATION ON YEARLY EXERCISE: The Option Agreements shall restrict
the amount of ISOs which may become exercisable in any calendar year
(under this or any other ISO plan of the Company or an Affiliate) so
that the aggregate Fair Market Value (determined at the time each ISO
is granted) of the stock with respect to which ISOs are exercisable
for the first time by the Participant in any calendar year does not
exceed $100,000.
7. TERMS AND CONDITIONS OF STOCK GRANTS.
Each offer of a Stock Grant to a Participant shall state the date prior to
which the Stock Grant must be accepted by the Participant, and the principal
terms of each Stock Grant shall be set forth in an Agreement, duly executed by
the Company and, to the extent required by law or requested by the Company, by
the Participant. The Agreement shall be in a form approved by the Administrator
and shall contain terms and conditions which the Administrator determines to be
appropriate and in the best interest of the Company, subject to the following
minimum standards:
(a) Each Agreement shall state the purchase price (per share), if any, of
the Shares covered by each Stock Grant, which purchase price shall be
determined by the Administrator but shall not be less than the minimum
consideration required by the Delaware General Corporation Law on the
date of the grant of the Stock Grant;
(b) Each Agreement shall state the number of Shares to which the Stock
Grant pertains; and
(c) Each Agreement shall include the terms of any right of the Company to
restrict or reacquire the Shares subject to the Stock Grant, including
the time and events upon which such rights shall accrue and the
purchase price therefor, if any.
8. TERMS AND CONDITIONS OF OTHER STOCK-BASED AWARDS.
The Board shall have the right to grant other Stock-Based Awards based upon
the Common Stock having such terms and conditions as the Board may determine,
including, without limitation, the grant of Shares based upon certain
conditions, the grant of securities convertible into Shares and the grant of
stock appreciation rights, phantom stock awards or stock units. The principal
terms of each Stock-Based Award shall be set forth in an Agreement, duly
executed by the Company and, to the extent required by law or requested by the
Company, by the Participant. The Agreement shall be in a form approved by the
Administrator and shall
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contain terms and conditions which the Administrator determines to be
appropriate and in the best interest of the Company.
9. EXERCISE OF OPTIONS AND ISSUE OF SHARES.
An Option (or any part or installment thereof) shall be exercised by giving
written notice to the Company or its designee, together with provision for
payment of the full purchase price in accordance with this Paragraph for the
Shares as to which the Option is being exercised, and upon compliance with any
other condition(s) set forth in the Option Agreement. Such notice shall be
signed by the person exercising the Option, shall state the number of Shares
with respect to which the Option is being exercised and shall contain any
representation required by the Plan or the Option Agreement. Payment of the
purchase price for the Shares as to which such Option is being exercised shall
be made (a) in United States dollars in cash or by check, or (b) at the
discretion of the Administrator, through delivery of shares of Common Stock
having a Fair Market Value equal as of the date of the exercise to the cash
exercise price of the Option, or (c) at the discretion of the Administrator, by
having the Company retain from the shares otherwise issuable upon exercise of
the Option, a number of shares having a Fair Market Value equal as of the date
of exercise to the exercise price of the Option, or (d) at the discretion of the
Administrator, by delivery of the grantee's personal recourse note, bearing
interest payable not less than annually at no less than 100% of the applicable
Federal rate, as defined in Section 1274(d) of the Code, with or without the
pledge of such Shares as collateral, or (e) at the discretion of the
Administrator, in accordance with a cashless exercise program established with a
securities brokerage firm, and approved by the Administrator, or (f) at the
discretion of the Administrator, by any combination of (a), (b), (c), (d) and
(e) above, or (g) at the discretion of the Administrator, payment of such other
lawful consideration as the Board may determine. Notwithstanding the foregoing,
the Administrator shall accept only such payment on exercise of an ISO as is
permitted by Section 422 of the Code.
The Company shall then reasonably promptly deliver the Shares as to which
such Option was exercised to the Participant (or to the Participant's Survivors,
as the case may be). In determining what constitutes "reasonably promptly," it
is expressly understood that the issuance and delivery of the Shares may be
delayed by the Company in order to comply with any law or regulation (including,
without limitation, state securities or "blue sky" laws) which requires the
Company to take any action with respect to the Shares prior to their issuance.
The Shares shall, upon delivery, be fully paid, non-assessable Shares.
The Administrator shall have the right to accelerate the date of exercise
of any installment of any Option; provided that the Administrator shall not
accelerate the exercise date of any installment of any Option granted to an
Employee as an ISO (and not previously converted into a Non-Qualified Option
pursuant to Paragraph 27) if such acceleration would violate the annual vesting
limitation contained in Section 422(d) of the Code, as described in Paragraph
6.B.d.
The Administrator may, in its discretion, amend any term or condition of an
outstanding Option provided (i) such term or condition as amended is permitted
by the Plan, (ii) any such
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amendment shall be made only with the consent of the Participant to whom the
Option was granted, or in the event of the death of the Participant, the
Participant's Survivors, if the amendment is adverse to the Participant, and
(iii) any such amendment of any ISO shall be made only after the Administrator
determines whether such amendment would constitute a "modification" of any
Option which is an ISO (as that term is defined in Section 424(h) of the Code)
or would cause any adverse tax consequences for the holder of such ISO.
10. ACCEPTANCE OF STOCK GRANTS AND STOCK-BASED AWARDS AND ISSUE OF SHARES.
A Stock Grant or Stock-Based Award (or any part or installment thereof)
shall be accepted by executing the applicable Agreement and delivering it to the
Company or its designee, together with provision for payment of the full
purchase price, if any, in accordance with this Paragraph for the Shares as to
which such Stock Grant or Stock-Based Award is being accepted, and upon
compliance with any other conditions set forth in the applicable Agreement.
Payment of the purchase price for the Shares as to which such Stock Grant or
Stock-Based Award is being accepted shall be made (a) in United States dollars
in cash or by check, or (b) at the discretion of the Administrator, through
delivery of shares of Common Stock having a Fair Market Value equal as of the
date of acceptance of the Stock Grant or Stock-Based Award to the purchase price
of the Stock Grant or Stock-Based Award, or (c) at the discretion of the
Administrator, by delivery of the grantee's personal recourse note bearing
interest payable not less than annually at no less than 100% of the applicable
Federal rate, as defined in Section 1274(d) of the Code, or (d) at the
discretion of the Administrator, by any combination of (a), (b) and (c) above.
The Company shall then, if required pursuant to the applicable Agreement,
reasonably promptly deliver the Shares as to which such Stock Grant or
Stock-Based Award was accepted to the Participant (or to the Participant's
Survivors, as the case may be), subject to any escrow provision set forth in the
applicable Agreement. In determining what constitutes "reasonably promptly," it
is expressly understood that the issuance and delivery of the Shares may be
delayed by the Company in order to comply with any law or regulation (including,
without limitation, state securities or "blue sky" laws) which requires the
Company to take any action with respect to the Shares prior to their issuance.
The Administrator may, in its discretion, amend any term or condition of an
outstanding Stock Grant, Stock-Based Award or applicable Agreement provided (i)
such term or condition as amended is permitted by the Plan, and (ii) any such
amendment shall be made only with the consent of the Participant to whom the
Stock Grant or Stock-Based Award was made, if the amendment is adverse to the
Participant.
11. RIGHTS AS A SHAREHOLDER.
No Participant to whom a Stock Right has been granted shall have rights as
a shareholder with respect to any Shares covered by such Stock Right, except
after due exercise of the Option
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or acceptance of the Stock Grant or as set forth in any Agreement and tender of
the full purchase price, if any, for the Shares being purchased pursuant to such
exercise or acceptance and registration of the Shares in the Company's share
register in the name of the Participant.
12. ASSIGNABILITY AND TRANSFERABILITY OF STOCK RIGHTS.
By its terms, a Stock Right granted to a Participant shall not be
transferable by the Participant other than (i) by will or by the laws of descent
and distribution, or (ii) as approved by the Administrator in its discretion and
set forth in the applicable Agreement. Notwithstanding the foregoing, an ISO
transferred except in compliance with clause (i) above shall no longer qualify
as an ISO. The designation of a beneficiary of a Stock Right by a Participant,
with the prior approval of the Administrator and in such form as the
Administrator shall prescribe, shall not be deemed a transfer prohibited by this
Paragraph. Except as provided above, a Stock Right shall only be exercisable or
may only be accepted, during the Participant's lifetime, by such Participant (or
by his or her legal representative) and shall not be assigned, pledged or
hypothecated in any way (whether by operation of law or otherwise) and shall not
be subject to execution, attachment or similar process. Any attempted transfer,
assignment, pledge, hypothecation or other disposition of any Stock Right or of
any rights granted thereunder contrary to the provisions of this Plan, or the
levy of any attachment or similar process upon a Stock Right, shall be null and
void.
13. EFFECT ON OPTIONS OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE" OR DEATH
OR DISABILITY.
Except as otherwise provided in a Participant's Option Agreement, in the
event of a termination of service (whether as an employee, director or
consultant) with the Company or an Affiliate before the Participant has
exercised an Option, the following rules apply:
a. A Participant who ceases to be an employee, director or consultant of
the Company or of an Affiliate (for any reason other than termination
"for cause", Disability, or death for which events there are special
rules in Paragraphs 14, 15, and 16, respectively), may exercise any
Option granted to him or her to the extent that the Option is
exercisable on the date of such termination of service, but only
within such term as the Administrator has designated in a
Participant's Option Agreement.
b. Except as provided in Subparagraph (c) below, or Paragraph 15 or 16,
in no event may an Option intended to be an ISO, be exercised later
than three months after the Participant's termination of employment.
c. The provisions of this Paragraph, and not the provisions of Paragraph
15 or 16, shall apply to a Participant who subsequently becomes
Disabled or dies after the termination of employment, director status
or consultancy; provided, however, in the case of a Participant's
Disability or death within three months after the
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termination of employment, director status or consultancy, the
Participant or the Participant's Survivors may exercise the Option
within one year after the date of the Participant's termination of
service, but in no event after the date of expiration of the term of
the Option.
d. Notwithstanding anything herein to the contrary, if subsequent to a
Participant's termination of employment, termination of director
status or termination of consultancy, but prior to the exercise of an
Option, the Board of Directors determines that, either prior or
subsequent to the Participant's termination, the Participant engaged
in conduct which would constitute "cause", then such Participant shall
forthwith cease to have any right to exercise any Option.
e. A Participant to whom an Option has been granted under the Plan who is
absent from the Company or an Affiliate because of temporary
disability (any disability other than a Disability as defined in
Paragraph 1 hereof), or who is on leave of absence for any purpose,
shall not, during the period of any such absence, be deemed, by virtue
of such absence alone, to have terminated such Participant's
employment, director status or consultancy with the Company or with an
Affiliate, except as the Administrator may otherwise expressly
provide.
f. Except as required by law or as set forth in a Participant's Option
Agreement, Options granted under the Plan shall not be affected by any
change of a Participant's status within or among the Company and any
Affiliates, so long as the Participant continues to be an employee,
director or consultant of the Company or any Affiliate.
14. EFFECT ON OPTIONS OF TERMINATION OF SERVICE "FOR CAUSE".
Except as otherwise provided in a Participant's Option Agreement, the
following rules apply if the Participant's service (whether as an employee,
director or consultant) with the Company or an Affiliate is terminated "for
cause" prior to the time that all his or her outstanding Options have been
exercised:
a. All outstanding and unexercised Options as of the time the Participant
is notified his or her service is terminated "for cause" will
immediately be forfeited.
b. For purposes of this Plan, "cause" shall include (and is not limited
to) dishonesty with respect to the Company or any Affiliate,
insubordination, substantial malfeasance or non-feasance of duty,
unauthorized disclosure of confidential information, breach by the
Participant of any provision of any employment, consulting, advisory,
nondisclosure, non-competition or similar agreement between the
Participant and the Company, and conduct substantially prejudicial to
the business of the Company or any Affiliate. The determination of the
Administrator as to the existence of "cause" will be conclusive on the
Participant and the Company.
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c. "Cause" is not limited to events which have occurred prior to a
Participant's termination of service, nor is it necessary that the
Administrator's finding of "cause" occur prior to termination. If the
Administrator determines, subsequent to a Participant's termination of
service but prior to the exercise of an Option, that either prior or
subsequent to the Participant's termination the Participant engaged in
conduct which would constitute "cause", then the right to exercise any
Option is forfeited.
d. Any provision in an agreement between the Participant and the Company
or an Affiliate, which contains a conflicting definition of "cause"
for termination and which is in effect at the time of such
termination, shall supersede the definition in this Plan with respect
to that Participant.
15. EFFECT ON OPTIONS OF TERMINATION OF SERVICE FOR DISABILITY.
Except as otherwise provided in a Participant's Option Agreement, a
Participant who ceases to be an employee, director or consultant of the Company
or of an Affiliate by reason of Disability may exercise any Option granted to
such Participant:
a. To the extent that the Option has become exercisable but has not been
exercised on the date of Disability; and
b. In the event rights to exercise the Option accrue periodically, to the
extent of a pro rata portion through the date of Disability of any
additional vesting rights that would have accrued on the next vesting
date had the Participant not become Disabled. The proration shall be
based upon the number of days accrued in the current vesting period
prior to the date of Disability.
A Disabled Participant may exercise such rights only within the period
ending one year after the date of the Participant's termination of employment,
directorship or consultancy, as the case may be, notwithstanding that the
Participant might have been able to exercise the Option as to some or all of the
Shares on a later date if the Participant had not become Disabled and had
continued to be an employee, director or consultant or, if earlier, within the
originally prescribed term of the Option.
The Administrator shall make the determination both of whether Disability
has occurred and the date of its occurrence (unless a procedure for such
determination is set forth in another agreement between the Company and such
Participant, in which case such procedure shall be used for such determination).
If requested, the Participant shall be examined by a physician selected or
approved by the Administrator, the cost of which examination shall be paid for
by the Company.
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16. EFFECT ON OPTIONS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.
Except as otherwise provided in a Participant's Option Agreement, in the
event of the death of a Participant while the Participant is an employee,
director or consultant of the Company or of an Affiliate, such Option may be
exercised by the Participant's Survivors:
a. To the extent that the Option has become exercisable but has not been
exercised on the date of death; and
b. In the event rights to exercise the Option accrue periodically, to the
extent of a pro rata portion through the date of death of any
additional vesting rights that would have accrued on the next vesting
date had the Participant not died. The proration shall be based upon
the number of days accrued in the current vesting period prior to the
Participant's date of death.
If the Participant's Survivors wish to exercise the Option, they must take
all necessary steps to exercise the Option within one year after the date of
death of such Participant, notwithstanding that the decedent might have been
able to exercise the Option as to some or all of the Shares on a later date if
he or she had not died and had continued to be an employee, director or
consultant or, if earlier, within the originally prescribed term of the Option.
17. EFFECT OF TERMINATION OF SERVICE ON UNACCEPTED STOCK GRANTS.
In the event of a termination of service (whether as an employee, director
or consultant) with the Company or an Affiliate for any reason before the
Participant has accepted a Stock Grant, such offer shall terminate.
For purposes of this Paragraph 17 and Paragraph 18 below, a Participant to
whom a Stock Grant has been offered and accepted under the Plan who is absent
from work with the Company or with an Affiliate because of temporary disability
(any disability other than a permanent and total Disability as defined in
Paragraph 1 hereof), or who is on leave of absence for any purpose, shall not,
during the period of any such absence, be deemed, by virtue of such absence
alone, to have terminated such Participant's employment, director status or
consultancy with the Company or with an Affiliate, except as the Administrator
may otherwise expressly provide.
In addition, for purposes of this Paragraph 17 and Paragraph 18 below, any
change of employment or other service within or among the Company and any
Affiliates shall not be treated as a termination of employment, director status
or consultancy so long as the Participant continues to be an employee, director
or consultant of the Company or any Affiliate.
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18. EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE" OR
DEATH OR DISABILITY.
Except as otherwise provided in a Participant's Agreement, in the event of
a termination of service (whether as an employee, director or consultant), other
than termination "for cause," Disability, or death for which events there are
special rules in Paragraphs 19, 20, and 21, respectively, before all Company
rights of repurchase shall have lapsed, then the Company shall have the right to
repurchase that number of Shares subject to a Stock Grant as to which the
Company's repurchase rights have not lapsed.
19. EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE "FOR CAUSE".
Except as otherwise provided in a Participant's Agreement, the following
rules apply if the Participant's service (whether as an employee, director or
consultant) with the Company or an Affiliate is terminated "for cause":
a. All Shares subject to any Stock Grant shall be immediately subject to
repurchase by the Company at the purchase price, if any, thereof.
b. For purposes of this Plan, "cause" shall include (and is not limited
to) dishonesty with respect to the employer, insubordination,
substantial malfeasance or non-feasance of duty, unauthorized
disclosure of confidential information, breach by the Participant of
any provision of any employment, consulting, advisory, nondisclosure,
non-competition or similar agreement between the Participant and the
Company, and conduct substantially prejudicial to the business of the
Company or any Affiliate. The determination of the Administrator as to
the existence of "cause" will be conclusive on the Participant and the
Company.
c. "Cause" is not limited to events which have occurred prior to a
Participant's termination of service, nor is it necessary that the
Administrator's finding of "cause" occur prior to termination. If the
Administrator determines, subsequent to a Participant's termination of
service, that either prior or subsequent to the Participant's
termination the Participant engaged in conduct which would constitute
"cause," then the Company's right to repurchase all of such
Participant's Shares shall apply.
d. Any provision in an agreement between the Participant and the Company
or an Affiliate, which contains a conflicting definition of "cause"
for termination and which is in effect at the time of such
termination, shall supersede the definition in this Plan with respect
to that Participant.
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20. EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE FOR DISABILITY.
Except as otherwise provided in a Participant's Agreement, the following
rules apply if a Participant ceases to be an employee, director or consultant of
the Company or of an Affiliate by reason of Disability: to the extent the
Company's rights of repurchase have not lapsed on the date of Disability, they
shall be exercisable; provided, however, that in the event such rights of
repurchase lapse periodically, such rights shall lapse to the extent of a pro
rata portion of the Shares subject to such Stock Grant through the date of
Disability as would have lapsed had the Participant not become Disabled. The
proration shall be based upon the number of days accrued prior to the date of
Disability.
The Administrator shall make the determination both of whether Disability
has occurred and the date of its occurrence (unless a procedure for such
determination is set forth in another agreement between the Company and such
Participant, in which case such procedure shall be used for such determination).
If requested, the Participant shall be examined by a physician selected or
approved by the Administrator, the cost of which examination shall be paid for
by the Company.
21. EFFECT ON STOCK GRANTS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.
Except as otherwise provided in a Participant's Agreement, the following
rules apply in the event of the death of a Participant while the Participant is
an employee, director or consultant of the Company or of an Affiliate: to the
extent the Company's rights of repurchase have not lapsed on the date of death,
they shall be exercisable; provided, however, that in the event such rights of
repurchase lapse periodically, such rights shall lapse to the extent of a pro
rata portion of the Shares subject to such Stock Grant through the date of death
as would have lapsed had the Participant not died. The proration shall be based
upon the number of days accrued prior to the Participant's death.
22. PURCHASE FOR INVESTMENT.
Unless the offering and sale of the Shares to be issued upon the particular
exercise or acceptance of a Stock Right shall have been effectively registered
under the Securities Act of 1933, as now in force or hereafter amended (the
"1933 Act"), the Company shall be under no obligation to issue the Shares
covered by such exercise unless and until the following conditions have been
fulfilled:
a. The person(s) who exercise(s) or accept(s) such Stock Right shall
warrant to the Company, prior to the receipt of such Shares, that such
person(s) are acquiring such Shares for their own respective accounts,
for investment, and not with a view to, or for sale in connection
with, the distribution of any such Shares, in which event the
person(s) acquiring such Shares shall be bound by the provisions of
the
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following legend which shall be endorsed upon the certificate(s)
evidencing their Shares issued pursuant to such exercise or such
grant:
"The shares represented by this certificate have been taken for
investment and they may not be sold or otherwise transferred by
any person, including a pledgee, unless (1) either (a) a
Registration Statement with respect to such shares shall be
effective under the Securities Act of 1933, as amended, or (b)
the Company shall have received an opinion of counsel
satisfactory to it that an exemption from registration under such
Act is then available, and (2) there shall have been compliance
with all applicable state securities laws."
b. At the discretion of the Administrator, the Company shall have
received an opinion of its counsel that the Shares may be issued upon
such particular exercise or acceptance in compliance with the 1933 Act
without registration thereunder.
23. DISSOLUTION OR LIQUIDATION OF THE COMPANY.
Upon the dissolution or liquidation of the Company, all Options granted
under this Plan which as of such date shall not have been exercised and all
Stock Grants and Stock-Based Awards which have not been accepted will terminate
and become null and void; provided, however, that if the rights of a Participant
or a Participant's Survivors have not otherwise terminated and expired, the
Participant or the Participant's Survivors will have the right immediately prior
to such dissolution or liquidation to exercise or accept any Stock Right to the
extent that the Stock Right is exercisable or subject to acceptance as of the
date immediately prior to such dissolution or liquidation. Upon the dissolution
or liquidation of the Company, any outstanding Stock-Based Awards shall
immediately terminate unless otherwise determined by the Administrator or
specifically provided in the applicable Agreement.
24. ADJUSTMENTS.
Upon the occurrence of any of the following events, a Participant's rights
with respect to any Stock Right granted to him or her hereunder shall be
adjusted as hereinafter provided, unless otherwise specifically provided in a
Participant's Agreement:
A. STOCK DIVIDENDS AND STOCK SPLITS. If (i) the shares of Common Stock
shall be subdivided or combined into a greater or smaller number of shares or if
the Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, or (ii) additional shares or new or different shares
or other securities of the Company or other non-cash assets are distributed with
respect to such shares of Common Stock, the number of shares of Common Stock
deliverable upon the exercise of an Option or acceptance of a Stock Grant may be
appropriately increased or decreased proportionately, and appropriate
adjustments may be made including, in the purchase price per share, to reflect
such events. The number of Shares
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subject to the limitation in Paragraphs 3 and 4(c) shall also be proportionately
adjusted upon the occurrence of such events.
B. CORPORATE TRANSACTIONS. If the Company is to be consolidated with or
acquired by another entity in a merger, sale of all or substantially all of the
Company's assets other than a transaction to merely change the state of
incorporation (a "Corporate Transaction"), the Administrator or the board of
directors of any entity assuming the obligations of the Company hereunder (the
"Successor Board"), shall, as to outstanding Options, either (i) make
appropriate provision for the continuation of such Options by substituting on an
equitable basis for the Shares then subject to such Options either the
consideration payable with respect to the outstanding shares of Common Stock in
connection with the Corporate Transaction or securities of any successor or
acquiring entity; or (ii) upon written notice to the Participants, provide that
all Options must be exercised (either (a) to the extent then exercisable or, (b)
at the discretion of the Administrator, all Options being made fully exercisable
for purposes of this Subparagraph), within a specified number of days of the
date of such notice, at the end of which period the Options shall terminate; or
(iii) terminate all Options in exchange for a cash payment equal to the excess
of the Fair Market Value of the Shares subject to such Options (either (a) to
the extent then exercisable or, (b) at the discretion of the Administrator, all
Options being made fully exercisable for purposes of this Subparagraph) over the
exercise price thereof.
With respect to outstanding Stock Grants, the Administrator or the
Successor Board, shall either (i) make appropriate provisions for the
continuation of such Stock Grants by substituting on an equitable basis for the
Shares then subject to such Stock Grants either the consideration payable with
respect to the outstanding Shares of Common Stock in connection with the
Corporate Transaction or securities of any successor or acquiring entity; or
(ii) upon written notice to the Participants, provide that all Stock Grants must
be accepted (to the extent then subject to acceptance) within a specified number
of days of the date of such notice, at the end of which period the offer of the
Stock Grants shall terminate; or (iii) terminate all Stock Grants in exchange
for a cash payment equal to the excess of the Fair Market Value of the Shares
subject to such Stock Grants over the purchase price thereof, if any. In
addition, in the event of a Corporate Transaction, the Administrator may waive
any or all Company repurchase rights with respect to outstanding Stock Grants.
C. RECAPITALIZATION OR REORGANIZATION. In the event of a recapitalization
or reorganization of the Company, other than a Corporate Transaction pursuant to
which securities of the Company or of another corporation are issued with
respect to the outstanding shares of Common Stock, a Participant upon exercising
an Option or accepting a Stock Grant after the recapitalization or
reorganization shall be entitled to receive for the purchase price paid upon
such exercise or acceptance the number of replacement securities which would
have been received if such Option had been exercised or Stock Grant accepted
prior to such recapitalization or reorganization.
D. ADJUSTMENTS TO STOCK-BASED AWARDS. Upon the happening of any of the
events described in Subparagraphs A, B or C above, any outstanding Stock-Based
Award shall be appropriately adjusted to reflect the events described in such
Subparagraphs. The Administrator
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or the Successor Board shall determine the specific adjustments to be made under
this Paragraph 24 and, subject to Paragraph 4, its determination shall be
conclusive.
E. MODIFICATION OF ISOs. Notwithstanding the foregoing, any adjustments
made pursuant to Subparagraph A, B or C above with respect to ISOs shall be made
only after the Administrator determines whether such adjustments would
constitute a "modification" of such ISOs (as that term is defined in Section
424(h) of the Code) or would cause any adverse tax consequences for the holders
of such ISOs. If the Administrator determines that such adjustments made with
respect to ISOs would constitute a modification of such ISOs, it may refrain
from making such adjustments, unless the holder of an ISO specifically requests
in writing that such adjustment be made and such writing indicates that the
holder has full knowledge of the consequences of such "modification" on his or
her income tax treatment with respect to the ISO.
25. ISSUANCES OF SECURITIES.
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 subject to Stock Rights. Except as
expressly provided herein, no adjustments shall be made for dividends paid in
cash or in property (including without limitation, securities) of the Company
prior to any issuance of Shares pursuant to a Stock Right.
26. FRACTIONAL SHARES.
No fractional shares shall be issued under the Plan and the person
exercising a Stock Right shall receive from the Company cash in lieu of such
fractional shares equal to the Fair Market Value thereof.
27. CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOs.
The Administrator, at the written request of any Participant, may in its
discretion take such actions as may be necessary to convert such Participant's
ISOs (or any portions thereof) that have not been exercised on the date of
conversion into Non-Qualified Options at any time prior to the expiration of
such ISOs, regardless of whether the Participant is an employee of the Company
or an Affiliate at the time of such conversion. At the time of such conversion,
the Administrator (with the consent of the Participant) may impose such
conditions on the exercise of the resulting Non-Qualified Options as the
Administrator in its discretion may determine, provided that such conditions
shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed to
give any Participant the right to have such Participant's ISOs converted into
Non-Qualified Options, and no such conversion shall occur until and unless the
Administrator
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takes appropriate action. The Administrator, with the consent of the
Participant, may also terminate any portion of any ISO that has not been
exercised at the time of such conversion.
28. WITHHOLDING.
In the event that any federal, state, or local income taxes, employment
taxes, Federal Insurance Contributions Act ("F.I.C.A.") withholdings or other
amounts are required by applicable law or governmental regulation to be withheld
from the Participant's salary, wages or other remuneration in connection with
the exercise or acceptance of a Stock Right or in connection with a
Disqualifying Disposition (as defined in Paragraph 29) or upon the lapsing of
any right of repurchase, the Company may withhold from the Participant's
compensation, if any, or may require that the Participant advance in cash to the
Company, or to any Affiliate of the Company which employs or employed the
Participant, the statutory minimum amount of such withholdings unless a
different withholding arrangement, including the use of shares of the Company's
Common Stock or a promissory note, is authorized by the Administrator (and
permitted by law). For purposes hereof, the fair market value of the shares
withheld for purposes of payroll withholding shall be determined in the manner
provided in Paragraph 1 above, as of the most recent practicable date prior to
the date of exercise. If the fair market value of the shares withheld is less
than the amount of payroll withholdings required, the Participant may be
required to advance the difference in cash to the Company or the Affiliate
employer. The Administrator in its discretion may condition the exercise of an
Option for less than the then Fair Market Value on the Participant's payment of
such additional withholding.
29. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.
Each Employee who receives an ISO must agree to notify the Company in
writing immediately after the Employee makes a Disqualifying Disposition of any
shares acquired pursuant to the exercise of an ISO. A Disqualifying Disposition
is defined in Section 424(c) of the Code and includes any disposition (including
any sale or gift) of such shares before the later of (a) two years after the
date the Employee was granted the ISO, or (b) one year after the date the
Employee acquired Shares by exercising the ISO, except as otherwise provided in
Section 424(c) of the Code. If the Employee has died before such stock is sold,
these holding period requirements do not apply and no Disqualifying Disposition
can occur thereafter.
30. TERMINATION OF THE PLAN.
The Plan will terminate on June 1, 2015, the date which is ten years from
the EARLIER of the date of its adoption by the Board of Directors and the date
of its approval by the shareholders of the Company. The Plan may be terminated
at an earlier date by vote of the shareholders or the Board of Directors of the
Company; provided, however, that any such earlier termination shall not affect
any Agreements executed prior to the effective date of such termination.
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31. AMENDMENT OF THE PLAN AND AGREEMENTS.
The Plan may be amended by the shareholders of the Company. The Plan may
also be amended by the Administrator, including, without limitation, to the
extent necessary to qualify any or all outstanding Stock Rights granted under
the Plan or Stock Rights to be granted under the Plan for favorable federal
income tax treatment (including deferral of taxation upon exercise) as may be
afforded incentive stock options under Section 422 of the Code, and to the
extent necessary to qualify the shares issuable upon exercise or acceptance of
any outstanding Stock Rights granted, or Stock Rights to be granted, under the
Plan for listing on any national securities exchange or quotation in any
national automated quotation system of securities dealers. Any amendment
approved by the Administrator which the Administrator determines is of a scope
that requires shareholder approval shall be subject to obtaining such
shareholder approval. Any modification or amendment of the Plan shall not,
without the consent of a Participant, adversely affect his or her rights under a
Stock Right previously granted to him or her. With the consent of the
Participant affected, the Administrator may amend outstanding Agreements in a
manner which may be adverse to the Participant but which is not inconsistent
with the Plan. In the discretion of the Administrator, outstanding Agreements
may be amended by the Administrator in a manner which is not adverse to the
Participant.
32. EMPLOYMENT OR OTHER RELATIONSHIP.
Nothing in this Plan or any Agreement shall be deemed to prevent the
Company or an Affiliate from terminating the employment, consultancy or director
status of a Participant, nor to prevent a Participant from terminating his or
her own employment, consultancy or director status or to give any Participant a
right to be retained in employment or other service by the Company or any
Affiliate for any period of time.
33. GOVERNING LAW.
This Plan shall be construed and enforced in accordance with the law of the
State of Delaware.
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