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EXHIBIT 10.1
EPS SOLUTIONS CORPORATION 2000 STOCK PERFORMANCE PLAN
1. Purposes of the Plan. The purposes of this Plan are to promote the
interests of the Company and its stockholders by using equity interests in the
Company to attract, retain and motivate its management and other persons and to
encourage and reward their contributions to the performance of the Company.
2. Definitions. The following capitalized terms shall have the following
respective meanings when used in this Plan:
(a) "Administrator" means the entire Board or any committee
comprised solely of Non-employee Directors as shall be administering the
Plan, in accordance with Section 4 of the Plan.
(b) "Affiliate" means the Company and any Subsidiary of the
Company.
(c) "Applicable Laws" means the legal requirements relating to the
administration of plans providing one or more of the types of Awards
described in this Plan and the issuance of Shares thereunder pursuant to
U.S. state corporate laws, U.S. federal and state securities laws, the
Code and the applicable laws of any foreign country or jurisdiction
where Options, Stock Purchase Rights or other Awards are, or will be,
granted under the Plan.
(d) "Award" includes, without limitation, Incentive Stock Options,
Nonstatutory Stock Options, Stock Purchase Rights, stock appreciation
rights, performance share or unit awards, dividend or equivalent rights,
stock awards, restricted share or unit awards, or other awards that are
valued in whole or in part by reference to, or are otherwise based on,
the Common Stock ("other Common Stock-based Awards"), all on a stand
alone, combination or tandem basis, as described in or granted under the
Plan.
(e) "Award Agreement" means a written agreement between the
Company and a Recipient evidencing the terms and conditions of an
individual Award grant. Each Award Agreement is subject to the terms and
conditions of the Plan.
(f) "Awarded Stock" means the Common Stock subject to an Award.
(g) "Board" means the Board of Directors of the Company.
(h) "Code" means the Internal Revenue Code of 1986, as amended or
replaced from time to time.
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(i) "Common Stock" means the common stock of the Company.
(j) "Company" means EPS Solutions Corporation, a Delaware
corporation.
(k) "Consultant" means any person, including an advisor, engaged
by an Affiliate to render services and who is compensated for such
services. The term "Consultant" shall not include Directors who are paid
only a director's fee by the Company or who are not compensated by the
Company for their services as Directors.
(l) "Director" means a member of the Board.
(m) "Disability" means permanent and total disability as that term
is described in Section 22(e)(3) of the Code.
(n) "Employee" means any person, including Officers and Directors,
employed by an Affiliate. Neither service as a Director nor payment of a
director's fee by the Company, without more, shall constitute
"employment" by the Company.
(o) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(p) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation
The Nasdaq Stock Market or The Nasdaq SmallCap Market, its Fair
Market Value shall be the mean of the highest and lowest sale
prices of the stock (or the average of the closing bid and asked
price, if no sales were reported) as quoted on such exchange or
system for the last market trading day prior to the time of
determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between
the high bid and low asked prices for the Common Stock on the last
market trading day prior to the day of determination, as reported
in The Wall Street Journal or such other source as the
Administrator deems reliable; or
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by
the Administrator.
(q) "Incentive Stock Option" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.
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(r) "Non-employee Director" means a non-employee director as
defined under Section 16b-3(b)(3)(i) of the Exchange Act or any
successor provision.
(s) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
(t) "Notice of Grant" means a written notice evidencing certain
terms and conditions of an Award. The Notice of Grant is part of the
Award Agreement.
(u) "Officer" unless otherwise noted herein, means a person who is
an officer of the Company or a Subsidiary within the meaning of Section
16 of the Exchange Act and the rules and regulations promulgated
thereunder.
(v) "Option" means a stock option granted pursuant to the Plan.
(w) "Option Exchange Program" means a program whereby outstanding
options are surrendered in exchange for options with a lower exercise
price.
(x) "Plan" means this Stock Performance Plan.
(y) "Recipient" means an Employee, Director or a Consultant who
holds an outstanding Award.
(z) "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of Stock Purchase Rights under Section 11 below.
(aa) "Restricted Stock Purchase Agreement" means a written
agreement between the Company and the Recipient evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase Right.
The Restricted Stock Purchase Agreement is subject to the terms and
conditions of the Plan and the Notice of Grant.
(bb) "Retirement" means the termination of a Recipient's
relationship with an Affiliate on or after the Recipient's attainment of
age (i) 59-1/2, provided that the Recipient has completed ten (10) years
of service with an Affiliate or a predecessor to an Affiliate, or (ii)
age 62.
(cc) "Service Provider" means an Employee, Director, Officer or a
Consultant. A Service Provider who is an Employee or Consultant shall
not cease to be a Service Provider (i) during any leave of absence
approved by the Affiliate which employs the Service Provider; provided
that, for purposes of Incentive Stock Options, no such leave may exceed
ninety days, unless reemployment upon expiration of such leave is
guaranteed by statute or contract; or (ii) as a result of transfers
between locations of the Company or between the Company or any other
Affiliate. If reemployment upon expiration of a leave of absence
approved by the Affiliate which employs the Service Provider is not
guaranteed by statute or contract, on the 181st day of such leave any
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Incentive Stock Option held by the Recipient shall cease to be treated
as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option.
(dd) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 15 of the Plan.
(ee) "Stock Purchase Right" means the right to purchase Common
Stock pursuant to Section 11 of the Plan, as evidenced by a Notice of
Grant.
(ff) "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 15 of
the Plan, the maximum aggregate number of Shares available for grants of Awards
under the Plan is 3,500,000 Shares. The Shares may be authorized, but unissued,
or reacquired Common Stock. Except as otherwise provided in Section 15, no
Service Provider may be granted Awards in any calendar year in respect of more
than 875,000 Shares. In determining the number of Shares with respect to which a
Service Provider may be granted an Award in any calendar year, any Award which
is cancelled shall count against the maximum number of Shares for which an Award
may be granted to the Service Provider who previously held such cancelled Award.
If an Award expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Option Exchange Program, the
unpurchased Shares which were subject thereto shall become available for future
grant or sale under the Plan (unless the Plan has terminated); provided,
however, that Shares that have actually been issued under the Plan, whether upon
exercise of an Option, Stock Purchase Right or other Award, shall not be
returned to the Plan and shall not become available for future distribution
under the Plan, except that if Shares of Restricted Stock are repurchased by the
Company at their original purchase price, and the original Recipient of such
Shares did not receive any benefits of ownership of such Shares, such Shares
shall become available for future grant under the Plan. For purposes of the
preceding sentence, voting rights shall not be considered a benefit of Share
ownership.
4. Administration of the Plan.
(a) Administrator. The Plan shall be administered by the Board or
a Committee appointed by the Board, which Committee shall be constituted
to comply with Applicable Laws. Committee members shall serve for such
term as the Board may determine, subject to removal by the Board at any
time. Any such Committee shall act by a majority of its members, or if
there are only two members of such Committee, by unanimous consent of
both members.
(b) Powers of the Administrator. Except for the terms and
conditions explicitly set forth in the Plan, the Administrator shall
have exclusive authority, in its discretion, to determine the Fair
Market Value of the Common Stock, in accordance with Section 2(p) of the
Plan and to determine all matters relating to Awards under the Plan,
including the selection of individuals to be granted an Award, the type
of Award, the
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number of shares of Common Stock subject to an Award, all terms,
conditions, restrictions and limitations, if any, of an Award and the
terms of any instrument that evidences the Award. The Plan Administrator
shall also have authority, in its discretion, to reduce the exercise
price of any Option, Stock Purchase Right or other Award to the then
current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option, Stock Purchase Right or other Award shall have
declined since the date the Option, the Stock Purchase Right or other
Award was granted; to modify or amend each Option, Stock Purchase Right
or other Award, subject to Section 17(c) of the Plan; and to institute
an Option Exchange Program. The Administrator shall also have exclusive
authority to interpret the Plan and its rules and regulations, and to
make all other determinations deemed necessary or advisable under or for
administering the Plan. All actions taken and determinations made by the
Administrator pursuant to the Plan shall be conclusive and binding on
all parties involved or affected. The Administrator may delegate
administrative duties to such of the Company's officers as it so
determines.
5. Eligibility for Awards. Nonstatutory Stock Options, Stock Purchase
Rights, and other Awards may be granted to Employees, Directors, Officers and
Consultants. Incentive Stock Options may be granted only to Employees. In
addition, an Award may also be granted to a person who is offered employment by
an Affiliate, provided that such Award shall be immediately forfeited if such
person does not accept such offer of employment within such time period as such
Affiliate may establish.
6. Limitations on Options. Each Option shall be designated in the
written option agreement as either an Incentive Stock Option or a Nonstatutory
Stock Option. However, notwithstanding such designation, to the extent that the
aggregate Fair Market Value of the Awarded Stock with respect to which Incentive
Stock Options are exercisable for the first time by the Recipient during any
calendar year (under all plans of the Company and any Subsidiary) exceeds
$100,000, such Options shall be treated as Nonstatutory Stock Options. For
purposes of this Section 6, Incentive Stock Options shall be taken into account
in the order in which they were granted. The Fair Market Value of the Awarded
Stock shall be determined as of the time the Option with respect to such Awarded
Stock is granted. If an Option is granted hereunder that is part Incentive Stock
Option and part Nonstatutory Stock Option because the Option exceeds the
$100,000 per year limitation under Section 422 of the Code, the Incentive Stock
Option portion of such Option shall become exercisable first in such calendar
year, and the Nonstatutory Stock Option portion shall commence becoming
exercisable once the $100,000 limit has been reached.
7. Term of Plan. The Plan shall become effective upon the adoption by
the Board. It shall continue in effect for a term of ten (10) years unless
terminated earlier under Section 17 of the Plan. Unless otherwise provided
herein or in the Award Agreement, at the discretion of the Administrator,
Options outstanding at the time the Plan is terminated will remain in effect
until such Options are terminated or become unexercisable under the then current
terms of the Plan.
8. Term of Option. The term of each Option shall be stated in the Notice
of Grant but shall be no longer than ten (10) years from the date of grant or
such shorter term as may be provided in the Notice of Grant. Moreover, in the
case of an Incentive Stock Option granted to a
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Recipient who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Subsidiary, the term of the Incentive Stock Option
shall be five (5) years from the date of grant or such shorter term as may be
provided in the Notice of Grant.
9. Option Exercise Price and Consideration.
(a) Exercise Price. The per share exercise price for the Shares to
be issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:
(i) In the case of an Incentive Stock Option that is granted
to a Recipient who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the voting power of
all classes of stock of the Company or any Subsidiary, the per
Share exercise price shall be no less than 110% of the Fair Market
Value per Share on the date of grant; or
(ii) In the case of all other Options that are granted to
any Service Provider, the per Share exercise price shall be no
less than the Fair Market Value per Share on the date of grant.
(b) Waiting Period and Exercise Dates. Stock Options shall be
exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Administrator. If the
Administrator provides that any Option is exercisable in installments or
is exercisable only if certain financial or other performance goals are
attained, the Administrator may at any time waive such exercise
provisions, in whole or in part. In addition, the Administrator may
accelerate the exercisability of any Option.
(c) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the
method of payment. In the case of an Incentive Stock Option, the
Administrator shall determine the acceptable form of consideration at
the time of grant. Such consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) other Shares which (A) in the case of Shares acquired
upon exercise of an Option, have been owned by the Recipient for
more than six months on the date of surrender, and (B) have a Fair
Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which said Option shall be
exercised;
(iv) delivery of a properly executed exercise notice
together with such other documentation as the Administrator and
the broker, if applicable, shall require to effect an exercise of
the Option, sale of the
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issued Shares, and delivery to the Company of the sale or loan
proceeds required to pay the exercise price;
(v) a reduction in the amount of any Affiliate liability to
the Recipient including any liability attributable to the
Recipient's participation in any Affiliate-sponsored deferred
compensation program or arrangement;
(vi) surrender of the Option to the Company in exchange for
such number of Shares equal to the Awarded Stock subject to such
Option less such number of Shares that have a Fair Market Value
equal to the aggregate exercise price;
(vii) any combination of the foregoing methods of payment;
or
(viii) such other consideration and method of payment for
the issuance of Shares to the extent permitted by Applicable Laws.
10. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any Option
granted hereunder shall be exercisable according to the terms of the
Plan and at such times and under such conditions as determined by the
Administrator and set forth in the Award Agreement.
An Option may not be exercised for less than the lesser
of (i) 100 Shares or (ii) if the Recipient is fully vested, the total
number of Shares subject to such Option.
An Option shall be deemed exercised when the Company
receives: (i) written notice of exercise (in accordance with the Award
Agreement) from the person entitled to exercise the Option, and (ii)
full payment for the Shares with respect to which the Option is
exercised. Full payment may consist of any consideration and method of
payment authorized by the Administrator and permitted by the Award
Agreement and the Plan. Shares issued upon exercise of an Option shall
be issued in the name of the Recipient or, if requested by the
Recipient, in the name of the Recipient and his or her spouse. Until the
stock certificate evidencing such Shares is issued (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), 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. The Company
shall issue (or cause to be issued) such stock certificate promptly
after the Option is exercised. 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 15 of the Plan.
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Exercising an Option in any manner shall decrease the
number of Shares thereafter available, both for purposes of the Plan and
for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Relationship as Employee, Director or
Consultant. If a Recipient ceases to be a Service Provider, other than
upon the Recipient's Retirement, death or disability, the Recipient
shall forfeit his Options (whether vested or not vested) on the date he
ceases to be a Service Provider, and the Shares covered by the Option
shall revert to the Plan unless determined otherwise by the
Administrator. In addition, the Administrator may require that the
Recipient pay the Company certain financial gains realized from
exercising all or any portion of an Option during a specified period.
Notwithstanding the above, in the event of a Recipient's
change in status from such Recipient's current status to a different
status as a Service Provider, the Recipient shall not be deemed to have
terminated his relationship as a Service Provider solely as a result of
such change in status. In the event a Recipient's status changes from
Employee to Officer, Director or Consultant, an Incentive Stock Option
held by the Recipient shall cease to be treated as an Incentive Stock
Option and shall be treated for tax purposes as a Nonstatutory Stock
Option three months and one day following such change of status.
(c) Disability of Recipient. If a Recipient ceases to be a Service
Provider as a result of the Recipient's Disability, the Recipient may
exercise his or her Option subject to the restrictions of Section 10(b)
and within such period of time as is specified in the Award Agreement
whether the Option is vested or unvested on the date of Disability (but
in no event later than the expiration of the term of such Option as set
forth in the Award Agreement). In the absence of a specified time in the
Award Agreement, the Option shall remain exercisable for twelve (12)
months following the Recipient's Disability. If, after Disability, the
Recipient does not exercise his or her Option within the time specified
herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.
(d) Retirement of Recipient. If a Recipient ceases to be a Service
Provider as a result of the Recipient's Retirement, the Recipient may
exercise his or her Option subject to the restrictions of Section 10(b)
and within such period of time as is specified in the Award Agreement
(but in no event later than the expiration of the term of such Option as
set forth in the Award Agreement). In the absence of a specified time in
the Award Agreement, the Option shall remain exercisable for thirty-six
(36) months following the Recipient's Retirement. Options which are
unvested on the date of the Recipient's Retirement will continue to vest
as if the Recipient continued to be a Service Provider during such
period. If, after Retirement, the Recipient does not exercise his or her
Option within the time specified herein, the Option shall terminate, and
the Shares covered by such Option shall revert to the Plan.
(e) Death of Recipient. If a Recipient dies while a Service
Provider, the Option may be exercised subject to the restrictions of
Section 10(b) and within such
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period of time as is specified in the Award Agreement (but in no event
later than the expiration of the term of such Option as set forth in the
Notice of Grant), by the Recipient's estate or by a person who acquires
the right to exercise the Option by bequest or inheritance, whether the
Option is vested or unvested on the date of death. In the absence of a
specified time in the Award Agreement, the Option shall remain
exercisable for twelve (12) months following the Recipient's death. The
Option may be exercised by the executor or administrator of the
Recipient's estate or, if none, by the person(s) entitled to exercise
the Option under the Recipient's will or the laws of descent or
distribution. If the Option is not so exercised within the time
specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.
(f) Buyout Provisions. The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option previously granted
based on such terms and conditions as the Administrator shall establish
and communicate to the Recipient at the time that such offer is made.
11. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other Awards granted under the
Plan and/or cash awards made outside of the Plan. After the
Administrator determines that it will offer Stock Purchase Rights under
the Plan, it shall advise the offeree in writing, by means of a Notice
of Grant, of the terms, conditions and restrictions related to the
offer, including the number of Shares that the offeree shall be entitled
to purchase, the price to be paid, and the time within which the offeree
must accept such offer, which shall in no event exceed six (6) months
from the date upon which the Administrator made the determination to
grant the Stock Purchase Right. The offer shall be accepted by execution
of a Restricted Stock Purchase Agreement in the form determined by the
Administrator. The terms of the offer of Stock Purchase Rights under the
Plan shall comply in all respects with Applicable Law.
(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the
Company a repurchase option exercisable upon the voluntary or
involuntary termination of the purchaser's employment with the Company
for any reason (including death, Retirement or Disability). The purchase
price for Shares repurchased pursuant to the Restricted Stock Purchase
Agreement shall be the original price paid by the Recipient and may be
paid by cancellation of any indebtedness of the purchaser to the
Company. The repurchase option shall lapse at a rate determined by the
Administrator.
(c) Other Provisions. The Restricted Stock Purchase Agreement
shall contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Administrator in
its sole discretion. In addition, the provisions of Restricted Stock
Purchase Agreements need not be the same with respect to each purchaser.
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(d) Rights as a Stockholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is
entered upon the records of the duly authorized transfer agent of the
Company. No adjustment will be made for a dividend or other right for
which the record date is prior to the date the Stock Purchase Right is
exercised, except as provided in Section 15 of the Plan.
12. Other Awards. The Administrator, in its sole discretion, but subject
to the terms of the Plan, may grant the following types of Awards (in addition
to the Award of Options and Stock Purchase Rights described above) under this
Plan on a stand alone, combination or tandem basis:
(a) Stock Appreciation Right. A right to receive the excess of the
Fair Market Value of a share of Common Stock on the date the stock
appreciation right is exercised over the Fair Market Value of a share of
Common Stock on the date the stock appreciation right was granted.
(b) Restricted and Performance Shares. A transfer of Common Stock
to a Recipient, subject to such restrictions on transfer or other
incidents of ownership, or subject to specified performance standards,
for such periods of time as the Administrator may determine.
(c) Restricted and Performance Share Unit. A fixed or variable
share or dollar denominated unit subject to such conditions of vesting,
performance and time of payment as the Administrator may determine.
(d) Other Stock-Based Awards. Other Common Stock-based Awards
which are related to or serve a similar function to those Awards set
forth in this Section 12.
13. Non-Transferability of Awards. Unless otherwise specified by the
Administrator in the Notice of Grant (provided, however, that such determination
shall occur only on or after the date the Common Stock is listed on any
established stock exchange or a national market system), an Award 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 Recipient, only by the Recipient. If the
Administrator makes an Award transferable, such Award shall contain such
additional terms and conditions as the Administrator deems appropriate. Any
attempt to assign, pledge or otherwise transfer any Award or of any right or
privileges conferred thereby, contrary to this Plan, or the sale or levy or
similar process upon the rights and privileges conferred hereby, shall be void.
14. Effect of Change in Control.
(a) Notwithstanding any other provision of this Agreement, in the
event of a Change in Control (as defined below), at the sole discretion
of the Administrator, a Recipient may become 100% vested in all of his
or her Award. In addition or alternatively, in the event of a Change in
Control, the Administrator, in its sole discretion,
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shall provide for one of the following actions to be taken with respect
to any outstanding Award: (i) for a purchase of the Awards theretofore
granted under the Plan effected by means of a payment to each Recipient
(by the Company or any other person or entity involved in the Change in
Control), in exchange for the cancellation of the Awards held by such
Recipient, of the Value (as hereinafter defined) of such Award or (ii)
for substitution of appropriate new Awards covering (or based upon)
stock of a successor corporation to the Company or stock of an affiliate
of such successor corporation. The Administrator shall give notice to
each Recipient of whether the unvested Option will become vested, the
provisions of any purchase or substitution, and any adjustments made (A)
to the number and kind of shares subject to the outstanding Award (or to
the awards in substitution therefor), (B) to the exercise prices, and/or
(C) to the terms and conditions of the awards, which shall be binding on
the Recipients. The Value of an Option shall be an amount equal to the
difference between the then Fair Market Value of the aggregate number of
Awarded Stock then subject to such Options and the aggregate exercise
price that would have to be paid to exercise such Options, and in the
case of an Award which is not an Option, the value which such Recipient
would have received if the Recipient had exercised his or her Award
immediately prior to the Change in Control. Any action taken by the
Administrator shall be final, binding and conclusive.
(b) For purposes of this Plan, a "Change in Control" shall be
deemed to have occurred upon the completion of any of the following
events:
(i) any acquisition or series of related acquisitions
resulting in any person, entity or "group," within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act beneficially
owning (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) more than fifty percent (50%) of either the then
outstanding shares of Common Stock or the combined voting power of
then outstanding voting securities entitled to vote generally in
the election of directors of the Company, provided that a Change
in Control shall not be deemed to have occurred if the "person"
described in the preceding provisions is an underwriter or
underwriting syndicate that has acquired the ownership of voting
securities of the Company solely in connection with a public
offering of those securities; or
(ii) any reorganization, merger or consolidation of the
Company with any other person, entity or corporation, other than a
transaction which would result in the owners of voting securities
of the Company immediately prior thereto continuing to own
directly or indirectly more than fifty percent (50%) of the
combined voting power of the voting securities of the entity or
entities surviving such reorganization, merger or consolidation
that own and conduct the business owned and conducted by the
Company prior thereto; or
(iii) the sale or other disposition by the Company, in one
transaction or a series of related transactions, of all or
substantially all of the assets of the Company; or
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(iv) individuals who, as of the date this Plan becomes
effective pursuant to Section 7 ("Effective Date"), constitute the
Board (the "Incumbent Board of Directors") cease for any reason to
constitute at least a majority of the Board, provided that any
individual who becomes a director after the Effective Date whose
election, or nomination for election by stockholders, is approved
by a vote of at least a majority of the directors then comprising
the Incumbent Board of Directors shall be considered to be a
member of the Incumbent Board of Directors unless that individual
was nominated or elected by any person, entity or group (as
defined above) having the power to exercise, through beneficial
ownership, voting agreement and/or proxy, fifty percent (50%) or
more of either the outstanding shares of common stock of the
Company or the combined voting power of the outstanding securities
of the Company entitled to vote generally in the election of
directors, in which case that individual shall not be considered
to be a member of the Incumbent Board of Directors unless such
individual's election or nomination for election by the Company's
shareholders is approved by a vote of at least two-thirds of the
directors then comprising the Incumbent Board of Directors.
For purposes of this definition, references to
the Company shall also refer to its successors and assigns such
that successive reorganizations or other corporate transactions do
not impair the substantive intent of these provisions.
15. Adjustments Upon Changes in Capitalization. Subject to any required
action by the stockholders of the Company, the number of shares of Common Stock
covered by each outstanding Award, and the number of shares of Common Stock
which have been authorized for issuance under the Plan but as to which no Awards
have yet been granted or which have been returned to the Plan upon cancellation
or expiration of an Award, as well as the price per share of Common Stock
covered by each such outstanding Award, shall be proportionately adjusted for
any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split, reverse stock split, stock dividend, combination
or reclassification of the Common Stock, or any other increase or decrease in
the number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board in
its sole discretion, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock subject to an
Award.
16. Date of Grant. The date of grant of an Award shall be, for all
purposes, the date on which the Administrator makes the determination granting
such Award, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Recipient within a
reasonable time after the date of such grant.
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17. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.
(b) Stockholder Approval. The Company shall obtain stockholder
approval of any Plan amendment to the extent necessary or desirable to
comply with Section 422 of the Code (or any successor rule or statute)
or other Applicable Law, rule or regulation, including the requirements
of any exchange or quotation system on which the Common Stock is listed
or quoted. Such stockholder approval, if required, shall be obtained in
such a manner and to such a degree as is required by the applicable law,
rule or regulation.
(c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any
Recipient, unless mutually agreed otherwise between the Recipient and
the Administrator, which agreement must be in writing and signed by the
Recipient and the Company.
18. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Award unless the exercise of such Award and the issuance
and delivery of such Shares shall comply with all relevant provisions of
law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated
thereunder, Applicable Laws, and the requirements of any stock exchange
or quotation system upon which the Shares may then be listed or quoted
and shall be further subject to the approval of counsel for the Company
with respect to such compliance.
(b) Investment Representations. As a condition to the exercise of
an Award, the Company may require the person exercising such Award to
represent and warrant at the time of any such exercise, among other
things, that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in
the opinion of counsel for the Company, such a representation is
required.
(c) Withholding Obligations. No later than the date as of which an
amount first becomes includible in the gross income of the Recipient for
Federal income tax purposes with respect to any Award under the Plan,
the Recipient shall pay to the Company, or make arrangements
satisfactory to the Company regarding the payment of, any Federal,
state, local or foreign taxes of any kind required by law to be withheld
with respect to such amount. Unless otherwise determined by the
Administrator, withholding obligations may be settled with Common Stock,
including Common Stock that is part of the Award that gives rise to the
withholding requirement. The obligations of the Company under the Plan
shall be conditioned on such payment or arrangements, and the Company
and its Affiliates shall, to the extent permitted by law, have the right
to deduct any such taxes from any payment otherwise due to the
Recipient. The Administrator may
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establish such procedures as it deems appropriate, including the making
of irrevocable elections, for the settlement of withholding obligations
with Common Stock.
19. Requirements of Law and Excessive Grants.
(a) Requirements of Law. The shares of Common Stock acquirable
under the Plan may not be registered under the Act, or state securities
law. The Company is under no obligation to effect any such registration.
The Company shall not be required to sell or issue any shares under the
Plan if the issuance of such shares shall constitute a violation of any
provision of any law or regulation of any governmental authority. A
Recipient (or the person permitted to exercise an Award in the event of
the Recipient's death or incapacity), if requested by the Company to do
so, will execute and deliver to the Company in writing an agreement
containing such provisions as the Company may require to assure
compliance with applicable securities laws.
(b) Grants Exceeding Allotted Shares. If the Awarded Stock covered
by an Award exceeds, as of the date of grant, the number of Shares which
may be issued under the Plan without additional stockholder approval,
such Award shall be void with respect to such excess Awarded Stock,
unless stockholder approval of an amendment sufficiently increasing the
number of Shares subject to the Plan is timely obtained in accordance
with Section 17(b) of the Plan.
20. 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.
21. Information to Recipients and Purchasers. Prior to the date the
Common Stock is listed on any established stock exchange or a national market
system, the Company shall provide to each Recipient and to each individual who
acquires Shares pursuant to the Plan, not less frequently than annually during
the period such Recipient has one or more Awards outstanding, and, in the case
of an individual who acquires Shares pursuant to the Plan, during the period
such individual owns such Shares, copies of annual financial statements. The
Company shall not be required to provide such statements to key employees whose
duties in connection with the Company assure their access to equivalent
information.
22. Company's Repurchase Option. If a Recipient ceases to be a Service
Provider prior to the date of closing of a registered public offering of the
Company's Common Stock pursuant to the Securities Act of 1933, as amended, and
upon such other events as may be set forth in the Award Agreement, the Company
shall have the right to repurchase any Shares acquired by a Recipient pursuant
to the exercise of an Award under such terms and conditions as are set forth in
the Award Agreement.
23. No Contract of Employment. Neither the Plan nor any Award hereunder
shall confer upon any individual any right with respect to continuing such
individual's employment, directorship or consulting relationship with the
Company or any Affiliate, nor shall they interfere
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in any way with such individual's right or the Company's or any Affiliate's
right to terminate such employment, directorship or consulting relationship at
any time, with or without cause.
24. No Rights as Stockholder. Subject to the provisions of the
applicable Award, no individual shall have any rights as a stockholder with
respect to any shares of Common Stock to be issued under the Plan until he or
she becomes the holder thereof. Notwithstanding the foregoing, in connection
with each grant of Restricted Stock hereunder, the applicable Award shall
specify if and to what extent the individual shall not be entitled to the rights
of a stockholder in respect of such Restricted Stock Award.
25. Severability. In the event that any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
26. Governing Law. The Plan and all Awards made and actions thereon
thereunder shall be governed by and construed in accordance with the laws of the
State of Delaware.
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