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EXHIBIT 10.2
THE SILICON GROUP, INC. NONSTATUTORY STOCK OPTION PLAN
1. Purpose of the Plan. The purposes of this Nonstatutory Stock Option
Plan are to promote the interests of the Company by providing Employees and
Consultants of the Company with the opportunity to acquire a proprietary
interest, or otherwise increase their proprietary interest, in the Company as an
incentive for them to remain in the service of the Company.
2. Definitions. As used herein, the following definitions shall apply:
"Board" shall mean the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Common Stock" shall mean the common stock of the Company.
"Company" shall mean The Silicon Group, Inc., a Texas corporation.
"Consultant" shall mean any person who is engaged by the Company to render
services and is compensated for such services.
"Employee" shall mean any person, including officers and directors,
employed by the Company.
"Option" shall mean a stock option granted pursuant to the Plan.
"Optioned Stock" shall mean the Common Stock subject to an Option.
"Optionee" shall mean an Employee or Consultant who receives an Option.
"Plan" shall mean this Nonstatutory Stock Option Plan.
"Stock Option Agreement" shall mean a Stock Option Agreement, pursuant to
which Options are granted under the Plan.
"Share" shall mean a share of the 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 3,694,836 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.
(b) Powers of the Board. Subject to the provisions of the Plan, the
Board shall have the authority, in its discretion: (i) to grant stock options;
(ii) to determine the exercise price per share of Options to be granted; (iii)
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; (iv) to interpret the Plan; (v) to prescribe, amend and rescind
rules and regulations relating to the Plan; (vi) to determine the terms and
provisions of each Option granted (which need not be identical) and, with the
consent of the holder thereof, modify or amend each Option; (vii) to accelerate
or defer (with the consent of the Optionee) the exercise date of any Option;
(viii) 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 (ix) 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.
(a) Options may be granted only to Employees and Consultants. An
Employee or Consultant who has been granted an Option may, if he is otherwise
eligible, be granted an additional Option or Options.
(b) The Plan shall not confer upon any Optionee any right with
respect to continuation of employment or consulting relationship with the
Company nor shall it interfere in any way with his right or the Company's right
to terminate his employment or consulting relationship at any time.
6. Term of Plan. The Plan shall become effective upon its adoption by the
Board. It shall continue in effect for a term of ten (10) years unless sooner
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 Stock
Option Agreement.
8. Exercise Price and Consideration.
(a) The per Share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the Board.
(b) 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 cash, check, other shares of Common Stock
having 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, or any
combination of such methods of payment, or such other consideration and method
of payment for the issuance of Shares to the extent permitted under applicable
law.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. 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 or the Optionee, and as shall be permissible under the terms of the
Plan.
An Option may not be exercised for a fraction of a Share.
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, as authorized by the Board, may consist of a
consideration and method of payment allowable under section 8(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of the 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 shareholder 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. Prior to
the time of issuance, the Company shall satisfy its employment tax and other tax
withholding obligations by requiring the Optionee to pay the amount of
withholding tax, if any, that must be paid under federal, state and local law
due to the exercise of the Option, subject to such restrictions or procedures as
the Company deems necessary to satisfy Rule 16b-3 of the Exchange Act of 1934,
as amended. The payment of such withholding tax may be by certified or official
bank check or by the delivery of a number of shares of Common Stock (plus cash
if necessary) having a fair market value equal to the amount of such withholding
tax.
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.
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(b) Termination of Status as an Employee or Consultant. If any
Employee or Consultant ceases to serve as an Employee or Consultant (as the case
may be), then each Option granted to such Optionee and exercisable on the date
of such termination shall remain exercisable, and the Optionee may exercise each
such Option at any time within six (6) months after the date the Optionee ceases
to be an Employee or Consultant (as the case may be) of the Company; provided,
however, that if the Optionee is terminated other than for Cause (as defined
below) or voluntarily terminates as a result of a Constructive Termination (as
defined below), then the exercisability of each Option granted to such Optionee
and outstanding under the Plan on such date shall automatically accelerate so
that each such Option shall become fully exercisable with respect to the total
number of shares of Optioned Stock, and the Optionee may exercise each Option at
any time within six (6) months after the date the Optionee ceases to be an
Employee or Consultant (as the case may be) of the Company. To the extent that
the Optionee does not exercise such Option within the time specified herein, the
Option shall terminate.
For purposes of this Section 9(b), "Cause" shall mean: (i) any material
breach by the Optionee of his fiduciary duties and responsibilities to the
Company having a material adverse effect on the business, reputation or
operations of the Company; (ii) the Optionee's engagement in acts of
embezzlement, dishonesty or moral turpitude having a material adverse effect on
the business, reputation or operations of the Company, (iii) the conviction of
the Optionee for a felony or (iv) gross negligence, bad faith or the repeated
failure of the Optionee to perform his duties and responsibilities to the
reasonable satisfaction of the Company. For purposes of this Section 9(b),
"Constructive Termination" shall mean, if within 60 days prior to the
resignation of the Optionee, any of the following shall have occurred: (i) there
shall have been a material reduction in the Optionee's compensation, material
benefits, job responsibilities or duties as an employee with the Company or (ii)
the Company shall have required as a condition of the Optionee's continued
employment that he relocate to a location which is more than 50 miles from the
Company's current Austin, Texas office.
(c) Disability of Optionee. Notwithstanding the provisions of Section
9(b) above, in the event an Employee or Consultant is unable to continue his
employment or consulting relationship (as the case may be) with the Company as a
result of his total and permanent disability (as defined in Section 22(e)(3) of
the Code), then the exercisability of each Option granted to such Optionee and
outstanding under the Plan shall automatically accelerate so that each such
Option shall become fully exercisable with respect to the total number of shares
of Optioned Stock, and the Optionee may exercise each Option at any time within
twelve (12) months from the date of termination. To the extent that the Optionee
does not exercise such Option within the time specified herein, the Option shall
terminate.
(d) Death of Optionee. In the event of the death of an Optionee (i)
during the term of the Option who is at the time of his death an Employee or
Consultant of the Company or (ii) within six (6) months after the termination of
the employment or consulting relationship, then the exercisability of each
Option granted to such Optionee and outstanding under the Plan shall
automatically accelerate so that each such Option shall become fully exercisable
with respect to the total number of shares of Optioned Stock, and the Option may
be exercised at any time within twelve (12) months 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.
10. Non-Transferability of Options. 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.
11. Adjustments Upon Changes in Capitalization or Merger. Subject to any
required action by the shareholders of the Company, the number of shares of
Common Stock covered by each outstanding Option, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options have yet been granted or which have been returned to the Plan
upon cancellation or expiration of any Option, as well as the price per share of
Common Stock covered by each such outstanding Option, 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,
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,
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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 Option.
In the event of the proposed dissolution or liquidation of the Company, the
Option will terminate immediately prior to the consummation of such proposed
action, unless otherwise provided by the Board. The Board may, in the exercise
of its sole discretion in such instances, declare that any Option shall
terminate as of a date fixed by the Board and give each Optionee the right to
exercise his Option as to all or any part of the Optioned Stock, including
Shares as to which the Option would not otherwise be exercisable. In the event
of the proposed sale of all or substantially all of the equity securities or
assets of the Company, or the merger of the Company with or into another
corporation, the Option shall be assumed or an equivalent option shall be
substituted by such successor corporation, unless the Board determines, in the
exercise of its sole discretion and in lieu of such assumption or substitution,
that the Optionee shall have the right to exercise the Option as to all of the
Optioned Stock, including Shares as to which the Option would not otherwise be
exercisable. If the Board makes an Option fully exercisable in lieu of
assumption or substitution in the event of a merger or sale of securities or
assets, the Board shall notify the Optionee that the Option shall be fully
exercisable for a period of thirty (30) days from the date of such notice, and
the Option will terminate upon the expiration of such period.
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. The Board may amend or
terminate the Plan from time to time in such respects as the Board may deem
advisable. Any such amendment or termination of the Plan shall not affect
Options already granted and such Options shall remain in full force and effect
as if the Plan had not been amended or terminated, unless mutually agreed
otherwise between the Optionee and the Board, which agreement must be in writing
and signed by the Optionee and the Company.
14. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the rules and regulations promulgated thereunder, applicable
state securities laws, and the requirements of any stock exchange upon which the
Shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law.
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 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 as the Board shall approve.
17. Information to Optionees. The Company shall provide to each Optionee,
during the period for which such Optionee has one or more Options outstanding,
copies of all annual reports and other information which are provided to all
shareholders of the Company. The Company shall not be required to provide such
information if the issuance of Options under the Plan is limited to key
employees whose duties in connection with the Company assure their access to
equivalent information.
18. CHOICE OF LAW. THE CORPORATE LAW OF THE STATE OF TEXAS WILL GOVERN ALL
QUESTIONS CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS
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SHAREHOLDERS. ALL OTHER QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND
INTERPRETATION OF THIS PLAN AND THE INSTRUMENTS EVIDENCING OPTIONS WILL BE
GOVERNED BY THE INTERNAL LAW, AND NOT THE LAW OF CONFLICTS, OF THE STATE OF
TEXAS.
IN WITNESS WHEREOF, the Company has caused its duly authorized officer to
execute this Plan effective as of the ____ day of ______, 2000.
THE SILICON GROUP, INC.
By:
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Name:
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Title:
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