WIND RIVER SYSTEMS, INC.
1998 NON-OFFICER STOCK OPTION PLAN
AS ADOPTED EFFECTIVE ON APRIL 23, 1998
STOCKHOLDER APPROVAL NOT REQUIRED
1. PURPOSES.
(a) The purpose of the Plan is to provide a means by which selected
Employees and Consultants who are not Officers or members of the Board of
Directors may be given an opportunity to benefit from increases in value of
the common stock of the Company through the granting of Nonstatutory Stock
Options. Only Nonstatutory Stock Options may be granted hereunder.
(b) The Company, by means of the Plan, seeks to retain the services of
persons who are now Employees or Consultants who are not Officers or members
of the Board of Directors, to secure and retain the services of such new
Employees and Consultants and to provide incentives for such persons to exert
maximum efforts for the success of the Company and its Affiliates.
2. DEFINITIONS. AS USED HEREIN, THE FOLLOWING DEFINITIONS SHALL APPLY:
(a) "AFFILIATE" shall mean any parent corporation or subsidiary
corporation, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f) respectively, of the Code, or such other parent
corporation or subsidiary corporation designated by the Board.
(b) "BOARD" shall mean the Committee, if one has been appointed, or the
Board of Directors, if no Committee is appointed.
(c) "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company.
(d) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
(e) "COMMITTEE" shall mean the Committee appointed by the Board of
Directors in accordance with paragraph (a) of Section 4 of the Plan, if one
is appointed.
(f) "COMMON STOCK" shall mean the Common Stock of the Company.
(g) "COMPANY" shall mean Wind River Systems, Inc., a Delaware
corporation.
(h) "CONSULTANT" shall mean any consultants, independent contractors or
advisers to the Company or an Affiliate (provided that such persons render
bona fide services not in connection with the offering and sale of securities
in capital raising transactions) excluding officers and directors of the
Company and stockholders beneficially owning 10% or more of the Company's
Common Stock.
(i) "CONTINUOUS SERVICE" shall mean the absence of any interruption or
termination of service to the Company, an Affiliate, or any successors thereto,
whether as an Employee or
Consultant. The Board or the Chief Executive Officer of the Company may
determine, in that party's sole discretion, whether Continuous Service as an
Employee or Consultant shall be considered interrupted in the case of: (i)
any leave of absence approved by the Board or the Chief Executive Officer of
the Company, including sick leave, military leave, or any other personal
leave; or (ii) transfers between the Company, Affiliates or their successors.
(j) "EMPLOYEE" shall mean any person employed by the Company or by any
Affiliate, excluding officers and directors of the Company and stockholders
beneficially owning 10% or more of the Company's Common Stock.
(k) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
(l) "FAIR MARKET VALUE" means, as of any date, the value of the Common
Stock of the Company determined as follows:
(i) If the Common Stock is listed on any established stock
exchange, or traded on the Nasdaq National Market or the Nasdaq SmallCap
Market, the Fair Market Value of a share of Common Stock shall be the closing
sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or market (or the exchange or market with the
greatest volume of trading in Common Stock) on the trading day prior to the
day of determination, as reported in the Wall Street Journal or such other
source as the Board deems reliable;
(ii) In the absence of such markets for the Common Stock, the Fair
Market Value shall be determined in good faith by the Board.
(m) "NONSTATUTORY STOCK OPTION" shall mean an Option not intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.
(n) "OFFICER" shall mean a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder and any other Employees of the Company
whom the Board or the Committee classifies as "Officer" in its sole
discretion.
(o) "OPTION" shall mean a Nonstatutory Stock Option granted pursuant to
the Plan.
(p) "OPTION AGREEMENT" shall mean a written agreement between the
Company and an Optionee evidencing the terms and conditions of an individual
Option grant. Each Option Agreement shall be subject to the terms and
conditions of the Plan.
(q) "OPTIONED STOCK" shall mean the Common Stock subject to an Option.
(r) "OPTIONEE" shall mean an Employee or Consultant who receives an
Option.
(s) "PLAN" shall mean this 1998 Non-Officer Stock Option Plan.
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(t) "SHARE" shall mean a share of Common Stock, as adjusted in
accordance with Section 11 of the Plan.
3. STOCK SUBJECT TO THE PLAN.
Subject to the provisions of Section 11 of the Plan, the maximum
aggregate number of Shares which may be optioned and sold under the Plan is
three hundred thousand (300,000) shares of Common Stock. The Shares may be
authorized, but unissued, or reacquired Common Stock. If an Option should
expire or become unexercisable for any reason without having been exercised
in full, the unpurchased Shares which were subject thereto shall, unless the
Plan shall have been terminated, become available for future grant under the
Plan.
4. ADMINISTRATION OF THE PLAN.
(a) PROCEDURE. The Plan shall be administered by the Board of
Directors. The Board of Directors may appoint a Committee consisting of not
less than two members of the Board of Directors to administer the Plan on
behalf of the Board of Directors, subject to such terms and conditions as the
Board of Directors may prescribe. Once appointed, the Committee shall
continue to serve until otherwise directed by the Board of Directors. From
time to time the Board of Directors may increase the size of the Committee
and appoint additional members thereof, remove members (with or without
cause), and appoint new members in substitution therefor, fill vacancies
however caused and remove all members of the Committee, and thereafter
directly administer the Plan. Notwithstanding anything in this Section 4 to
the contrary, at any time the Board of Directors or the Committee may
delegate to a committee of one or more members of the Board of Directors the
authority to grant Options to all Employees and Consultants or any portion or
class thereof.
(b) POWERS OF THE BOARD. Subject to the provisions of the Plan, the
Board shall have such authority with regard to the Plan and the options as
determined by the Board of Directors, including the authority, in its
discretion: (i) to grant options under the Plan, provided, however, that only
nonstatutory options may be granted under the Plan; (ii) to determine, upon
review of relevant information and in accordance with Section 8(c) of the
Plan, the Fair Market Value of the Common Stock; (iii) to determine the
exercise price per share of Options to be granted, which exercise price shall
be determined in accordance with Section 8(a) of the Plan; (iv) to determine
the Employees or Consultants to whom, and the time or times at which, Options
shall be granted and the number of Shares to be represented by each Option,
provided that no Options may be granted to persons who are neither Employees
nor Consultants; (v) to interpret the Plan; (vi) to prescribe, amend and
rescind rules and regulations relating to the Plan; (vii) to determine the
terms and provisions of each Option granted (which need not be identical) in
accordance with the Plan, and, with the consent of the holder thereof with
respect to any adverse change, modify or amend each Option; (viii) to
accelerate or defer (the latter with the consent of the Optionee) the
exercise date and vesting of any Option; (ix) to authorize any person to
execute on behalf of the Company any instrument required to effectuate the
grant of an Option previously granted by the Board; and (x) to make all other
determinations deemed necessary or advisable for the administration of the
Plan.
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(c) EFFECT OF BOARD'S DECISION. All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionees and
any other holders of any Options granted under the Plan.
5. ELIGIBILITY.
Options may be granted only to Employees or Consultants as defined in
Section 2 hereof. An Employee or Consultant who has been granted an Option
may, if he or she is otherwise eligible, be granted an additional Option or
Options. Notwithstanding the foregoing, no Employee who is an Officer of the
Company or who is a member of the Board of Directors shall be entitled to
receive the grant of an Option under the Plan.
The Plan shall not confer upon any Optionee any right with respect to
continuation of employment or consulting with the Company, nor shall it
interfere in any way with the Optionee's right or the Company's right to
terminate the Optionee's employment at any time or the Optionee's consulting
for the Company pursuant to the terms of the Consultant's agreement with the
Company.
6. TERM OF THE PLAN.
The Plan shall become effective upon its adoption by the Board of
Directors. It shall continue in effect until terminated under Section 13 of
the Plan.
7. TERM OF OPTION.
The term of each Option shall be ten (10) years from the date of grant
thereof or such shorter term as may be provided in the Option Agreement.
8. EXERCISE PRICE, CONSIDERATION AND VESTING.
(a) EXERCISE PRICE. The per Share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be no less than 85% of the
Fair Market Value per Share on the date of grant. Notwithstanding the
foregoing, an Option may be granted with an exercise price lower than that
set forth in the preceding sentence if such Option is granted pursuant to an
assumption or substitution for another option in a manner satisfying the
provisions of Section 424(a) of the Code.
(b) CONSIDERATION. The consideration to be paid for the Shares to be
issued upon exercise of an Option, including the method of payment, shall be
determined by the Board and may consist entirely of (i) cash or check; (ii)
other shares of the Common Stock of the Company having a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as
to which the Option shall be exercised, including by delivering to the
Company an attestation of ownership of owned and unencumbered shares of the
Common Stock of the Company in a form approved by the Company; (iii) payment
pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board which, prior to the issuance of Common Stock, results
in either the receipt of cash (or check) by the Company or the receipt of
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irrevocable instructions to pay the aggregate exercise price to the Company
from the sales proceeds; (iv) any combination of such methods of payment; or
(v) such other consideration and method of payment for the issuance of Shares
to the extent permitted under applicable law. In making its determination as
to the type of consideration to accept, the Board shall consider if
acceptance of such consideration may be reasonably expected to benefit the
Company.
(c) VESTING. The total number of Shares subject to an Option may, but
need not, be allotted in periodic installments (which may, but need not, be
equal). The Option Agreement may provide that, from time to time during each
of such installment periods, the Option may become exercisable ("vest") with
respect to some or all of the Shares allotted to that period, and may be
exercised with respect to some or all of the Shares allotted to such period
and/or any prior period as to which the Option became vested but was not
fully exercised. The Option may be subject to such other terms and
conditions on the time or times when it may be exercised (which may be based
on performance or other criteria) as the Board may deem appropriate. The
provisions of this Section 8(c) are subject to any Option provisions
governing the minimum number of Shares as to which an Option may be
exercised.
9. EXERCISE OF OPTION.
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER. Any Option
granted hereunder shall be exercisable at such times and under such
conditions as determined by the Board, including performance criteria with
respect to the Company and/or the Optionee, and as shall be permissible under
the terms of the Plan.
An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of
the Option by the person entitled to exercise the Option and full payment for
the Shares with respect to which the Option is exercised has been received by
the Company. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 8(c) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or
any other rights as a stockholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 11 of the
Plan. An Option may not be exercised for a fraction of a Share.
Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which
the Option is exercised.
The Option may, but need not, include a provision whereby the
Optionee may elect at any time while an Employee or Consultant (or while an
officer or director of the Company) to exercise the Option as to any part or
all of the shares subject to the Option, subject to a repurchase right in
favor of the Company on such terms as the Board shall establish.
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(b) TERMINATION OF SERVICE AS AN EMPLOYEE OR CONSULTANT. If an
Optionee's Continuous Service as an Employee or Consultant ceases for any
reason other than death or disability, the Optionee may, but only within
three (3) months (or such other period of time as is determined by the Board)
after the date the Optionee's Continuous Service as an Employee or Consultant
ceases, exercise the Option to the extent that the Optionee was entitled to
exercise it at the date of such termination. To the extent that the Optionee
was not entitled to exercise the Option at the date of such termination, or
if the Optionee does not exercise such Option (which the Optionee was
entitled to exercise) within the time specified herein, the Option shall
terminate.
(c) DEATH OF OPTIONEE. In the event of the death during the term of
the Option of an Optionee who is at the time of his or her death an Employee
or Consultant and who shall have been in Continuous Service as an Employee or
Consultant since the date of grant of the Option, or in the event of the
death of an Optionee within three (3) months following the termination of the
Optionee's Continuous Service as an Employee or Consultant for any other
reason, the Option may be exercised at any time within eighteen (18) months
(or such other period of time as is determined by the Board) following the
date of death by the Optionee's estate or by a person who acquired the right
to exercise the Option by bequest or inheritance, to the extent that the
Optionee was entitled to exercise it at the date of such termination. To the
extent that the Optionee was not entitled to exercise the Option at the date
of such termination, or if the Option is not exercised (to the extent the
Optionee was entitled to exercise) within the time specified herein, the
Option shall terminate.
(d) DISABILITY OF OPTIONEE. In the event of the disability during the
term of the Option of an Optionee who is at the time of his or her disability
an Employee or Consultant and who shall have been in Continuous Service as an
Employee or Consultant since the date of grant of the Option, the Optionee
may, but only within twelve (12) months (or such other period of time as is
determined by the Board) after the date the Optionee ceases to be an Employee
or Consultant on account of such disability, exercise the Option to the
extent that the Optionee was entitled to exercise it at the date of such
termination. To the extent that the Optionee was not entitled to exercise
the Option at the date of such termination, or if the Optionee does not
exercise such Option (which the Optionee was entitled to exercise) within the
time specified herein, the Option shall terminate.
(e) WITHHOLDING. To the extent provided by the terms of the Option
Agreement, the Optionee may satisfy any federal, state or local tax
withholding obligation relating to the exercise of such Option by any of the
following means ( in addition to the Company's right to withhold from any
compensation paid to Optionee by the Company)or by a combination of such
means: (i) tendering a cash payment; (ii) authorizing the Company to
withhold Shares from the Shares otherwise issuable to the Optionee as a
result of the exercise of the Option; or (iii) delivering to the Company
owned and unencumbered shares of the Common Stock of the Company.
10. TRANSFERABILITY OF OPTIONS.
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Except as otherwise expressly provided in the terms of the Option
Agreement, the Option may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws
of descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. Notwithstanding the foregoing, the Optionee
may, by delivering written notice to the Company, in a form satisfactory to
the Company, designate a third party who, in the event of the death of the
Optionee, shall thereafter be entitled to exercise the Option.
11. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or subject
to any Option, without the receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization, reincorporation,
stock dividend, dividend in property other than cash, stock split,
liquidating dividend, combination of shares, exchange of shares, change in
corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan and the outstanding Options will be
appropriately adjusted in the class(es) and number of securities and price
per share of stock subject to such outstanding Options. Such adjustments
shall be made by the Board, the determination of which shall be final,
binding and conclusive. (The conversion of convertible securities, cashless
exercise of options and net exercise of warrants shall not be treated as
transactions "without receipt of consideration" by the Company.)
(b) In the event of: (1) a dissolution or liquidation of the Company;
(2) a merger or consolidation in which the Company is not the surviving
corporation; or (3) a reverse merger in which the Company is the surviving
corporation but the shares of the Company's common stock outstanding
immediately preceding the merger are converted by virtue of the merger into
other property, whether in the form of securities, cash or otherwise, then,
subject to paragraph (c) of this Section 11, at the sole discretion of the
Board and to the extent permitted by applicable law: (i) any surviving
corporation shall assume any Options outstanding under the Plan or shall
substitute similar Options for those outstanding under the Plan, (ii) such
Stock Awards shall continue in full force and effect, or (iii) the time
during which such Stock Awards become vested or may be exercised shall be
accelerated and any outstanding unexercised rights under any Stock Awards
terminated if not exercised prior to such event. In the event any surviving
corporation or acquiring corporation refuses to assume such Options or to
substitute similar Options for those outstanding under the Plan, then with
respect to Options held by Optionees whose Continuous Service has not
terminated, the vesting shall be accelerated in full, and the Options shall
terminate if not exercised at or prior to such event. With respect to any
other Options outstanding under the Plan, such Options shall terminate if not
exercised prior to such event.
(c) In the event of either (i) the acquisition by any person, entity or
group within the meaning of Section 13(d) or 14(d) of the Exchange Act or any
comparable successor provisions (excluding any employee benefit plan, or
related trust, sponsored or maintained by the Company or an Affiliate of the
Company) of the beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act, or comparable successor rule) of
securities of the Company representing at least fifty percent (50%) of the
combined voting power entitled to vote
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in the election of directors, which acquisition has not been approved by
resolution of the Company's Board of Directors, or (ii) a change in a
majority of the membership of the Company's Board of Directors within a
twenty-four (24) month period where the selection of such majority either (A)
was not approved by a majority of the members of the Board of Directors at
the beginning of such twenty-four (24) month period or (B) occurred as the
result of an actual or threatened "Election Contest" (as described in Rule
14a-11 promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of any person other than
the Board (a "Proxy Contest"), including by reason of any agreement intended
to avoid or settle any Election Contest or Proxy Contest, then to the extent
not prohibited by applicable law, the time during which options outstanding
under the Plan may be exercised shall be accelerated prior to such event, but
only to the extent that such options would have become exercisable within
thirty (30) months of the date of such event, and the options terminated if
not exercised after such acceleration and at or prior to such event.
12. TIME OF GRANTING OPTIONS.
The date of grant of an Option shall, for all purposes, be the date on
which the Board makes the determination granting such Option. Notice of the
determination shall be given to each Employee or Consultant to whom an Option
is so granted within a reasonable time after the date of such grant.
13. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AMENDMENT AND TERMINATION. The Board may amend or terminate the
Plan from time to time in such respects as the Board may deem advisable.
(b) EFFECT OF AMENDMENT OR TERMINATION. Options granted before
amendment of the Plan shall not be impaired any amendment unless mutually
agreed otherwise between the Optionee and the Company, which agreement must
be in writing and signed by the Optionee and the Company.
14. SECURITIES LAW COMPLIANCE.
Notwithstanding any provisions relating to vesting contained herein or
in an Option, no Option granted hereunder may be exercised unless the shares
issuable upon exercise of such option are then registered under the
Securities Act of 1933, as amended.
15. RESERVATION OF SHARES.
The Company, during the term of this Plan, will at all times reserve
and keep available such number of Shares as shall be sufficient to satisfy
the requirements of the Plan.
Inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect
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of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
16. OPTION AGREEMENT.
Options shall be evidenced by written Option Agreements in such form
or forms as the Board or the Committee shall approve.
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