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Exhibit 10.51
TALITY HOLDINGS, INC.
2000 DIRECTORS STOCK OPTION PLAN
AS AMENDED AND RESTATED EFFECTIVE AS OF JULY 26, 2001
1. PURPOSE
This Tality Holdings, Inc. 2000 Directors Stock Option Plan (the "Plan")
represents the amendment and restatement of the Tality Corporation 2000
Directors Stock Option Plan (the "Former Plan") which, together with all
options outstanding thereunder, is being assumed by Tality Holdings,
Inc., a Delaware corporation (the "Company") in accordance with the
provisions of Section 9 of the Former Plan, as a result of the
restructuring of Tality Corporation and its affiliates ("Tality")
pursuant to a series of transactions whereby the assets and liabilities
of Tality have been assumed, directly or indirectly, by the Company. The
purpose of the Plan is to advance the interests of the Company by
enabling it to attract, retain and motivate qualified individuals to
serve on the Company's Board of Directors and to align the financial
interests of such individuals with those of the Company's stockholders
by providing for or increasing their proprietary interest in the
Company. The stock options granted pursuant to this Plan are not
qualified under Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").
2. DEFINITIONS
(a) "BOARD" means the Board of Directors of the Company.
(b) "CALIFORNIA COMMISSIONER" means the Commissioner of Corporations of
the State of California.
(c) "CALIFORNIA REGULATED PLAN" means this Plan at any time that Awards
and securities underlying Awards are California Regulated Securities and the
Company relies upon the exemption provided by Section 25102(o) of the California
Securities Law (or another exemption imposing comparable requirements) to exempt
the issuance of securities under this Plan from qualification under the
California Securities Law
(d) "CALIFORNIA REGULATED SECURITIES" means Awards and securities
underlying Awards that are subject to the California Securities Law or the
California Securities Rules.
(e) "CALIFORNIA SECURITIES LAW" means the California Corporate
Securities Law of 1968, as amended.
(f) "CALIFORNIA SECURITIES RULES" means the Rules of the California
Commissioner adopted under the California Securities Law.
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Exhibit 10.51
(g) "COMMITTEE" means the Board and/or a committee of the Board acting
pursuant to its authorization to administer this Plan under Section 9.
(h) "COMMON STOCK" means the Company's Class A Common Stock, as
presently constituted, subject to adjustment as provided in Section 11.
(i) "FAIR MARKET VALUE" means, as of any date, the mean average of the
high and low prices of the Common Stock for each of the last 20 trading days
prior to the such date on the national securities exchange, national market
system or other trading market on which the Common Stock has the highest average
trading volume; or, in the absence of such market for the Common Stock, the Fair
Market Value shall be determined in good faith by the Board; provided, however,
that when appropriate, the Board in determining Fair Market Value of the Common
Stock shall consider such factors as may be required by the California
Securities Law and the California Securities Rules while this Plan is a
California Regulated Plan, and may take into account such other factors as it
may deem appropriate under the circumstances.
(j) "NON-EMPLOYEE DIRECTOR" means a member of the Board who is not at
the time also an employee of the Company or any of its direct or indirect
majority-owned subsidiaries (regardless of whether such subsidiary is organized
as a corporation, partnership or other entity). For purposes of this Plan, the
Chairman of the Board's status as an employee shall be determined by the Board.
(k) "TEN PERCENT OWNER" means a Participant who owns, directly or by
reason of the applicable attribution rules of Code Section 424(d), more than 10%
of the total combined voting power of all classes of capital stock of the
Company or its parent or subsidiary corporations, if any, as defined in Code
Sections 424(e) and (f).
3. SHARES SUBJECT TO THE PLAN
Subject to adjustment as provided in Section 11, the maximum number of
shares of Common Stock which may be issued pursuant to this Plan shall
not exceed Six Hundred Seventy-Five Thousand (675,000) Shares issued
under this Plan may be authorized and unissued shares of Common Stock or
shares of Common Stock reacquired by the Company. All or any shares of
Common Stock subject to a stock option which for any reason are not
issued or are reacquired under the stock option may again be made
subject to a stock option under the Plan.
4. PARTICIPANTS
Any person who is a Non-Employee Director shall be eligible for the
award of stock options hereunder. Non-Employee Directors who are granted
stock options hereunder shall be referred to as "Participants."
5. NON-EMPLOYEE DIRECTOR AWARDS
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Exhibit 10.51
(a) Each person who becomes a Non-Employee Director during any calendar
year shall, upon election to the Board, automatically be granted an
option to purchase 50,000 shares of Common Stock. If such person is also
elected as the Chairman of the Board, such person shall, upon election
as Chairman of the Board, automatically be granted an additional option
to purchase 50,000 shares of Common Stock.
(b) Other than the calendar year in which such person becomes a
Non-Employee Director, each Non-Employee Director, on July 1 of each
calendar year, beginning July 1, 2001, shall automatically be granted an
option to purchase 12,500 shares of Common Stock. In addition, if such
Non-Employee Director is serving as Chairman of the Board, such
Non-Employee Director shall automatically be granted an option to
purchase an additional 12,500 shares of Common Stock.
6. TERMS AND CONDITIONS OF STOCK OPTIONS
(a) General Terms and Conditions: Stock options awarded pursuant to the
Plan need not be identical but each stock option shall be subject to the
following general terms and conditions:
(1) Terms and Restrictions Upon Shares: The Board may provide
that the shares of Common Stock issued upon exercise of a stock
option shall be subject to such further conditions, restrictions
or agreements as the Board in its discretion may specify prior to
the exercise of such stock option, including without limitation,
deferrals on issuance, conditions on vesting or transferability,
and forfeiture or repurchase provisions. The Committee may
establish rules for the deferred delivery of Common Stock upon
exercise of a stock option with the deferral evidenced by use of
"Stock Units" equal in number to the number of shares of Common
Stock whose delivery is so deferred. A "Stock Unit" is a
bookkeeping entry representing an amount equivalent to the Fair
Market Value of one share of Common Stock. Stock Units represent
an unfunded and unsecured obligation of the Corporation except as
otherwise provided by the Board. Settlement of Stock Units upon
expiration of the deferral period shall be made in Common Stock
or otherwise as determined by the Committee. The amount of Common
Stock, or other settlement medium, to be so distributed may be
increased by an interest factor or by dividend equivalents. Until
a Stock Unit is settled, the number of shares of Common Stock
represented by a Stock Unit shall be subject to adjustment
pursuant to Section 11.
(2) Transferability of Option: Unless otherwise specifically
provided by the Committee and the applicable option agreement,
each stock option shall be transferable only by will or the laws
of descent and distribution. Notwithstanding the foregoing, a
stock option that is a California Regulated Security granted at
any time that this Plan is a California Regulated Plan may not be
transferred other than by will or the laws of descent or
distribution.
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Exhibit 10.51
(3) Vesting: Options granted pursuant to Section 5 shall vest
over a four-year period, with 25% of the option vesting on the
first through fourth anniversaries of the date of grant of such
option.
(4) Other Terms and Conditions: No holder of a stock option shall
have any rights as a stockholder with respect to any shares of
Common Stock subject to a stock option hereunder until said
shares have been issued. Stock options may also contain such
other provisions, which shall not be inconsistent with any of the
foregoing terms, as the Board or the Committee shall deem
appropriate. The Board may waive conditions to and/or accelerate
exercisability of a stock option, either automatically upon the
occurrence of specified events (including in connection with a
change of control of the Company) or otherwise in its discretion.
No stock option, however, nor anything contained in the Plan,
shall confer upon any Participant any right to serve as a
director of the Company.
(b) Stock Option Price: The exercise price for each stock option shall
be established by the Board or under a formula established by the Board.
The exercise price of each stock option may be greater or lesser than
100% of the Fair Market Value of the Common Stock subject to the stock
option as of the date of grant, provided that the exercise price of an
option that is a California Regulated Security granted while this Plan
is a California Regulated Plan may not be less than 85% of the Fair
Market Value of the Common Stock on the date the option is granted. In
all cases, the exercise price shall not be less than 110% of the Fair
Market Value of the Common Stock as of the date of grant in the case of
a stock option granted to a Ten Percent Owner. The exercise price shall
be payable in cash, by payment under an arrangement with a broker where
payment is made pursuant to an irrevocable direction to the broker to
deliver all or part of the proceeds from the sale of the option shares
to the Company, by the surrender of shares of Common Stock owned by the
optionholder exercising the option and having a fair market value on the
date of exercise equal to the exercise price but only if such will not
result in an accounting charge to the Company, or by any combination of
the foregoing. In addition, the exercise price shall be payable in such
other form(s) of consideration as the Committee in its discretion shall
specify, including without limitation by loan (as described in Section
10) or by techniques that may result in an accounting charge to the
Company. For the purposes of determining the fair market value of shares
of Common Stock surrendered to pay the exercise price of an option,
"fair market value" shall mean the average of the high and low prices of
the Common Stock on the last trading day preceding the date of delivery
of such Common Stock to the Company on the national securities exchange,
national market system or other trading market on which the Common Stock
has the highest average trading volume.
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Exhibit 10.51
7. RIGHT OF FIRST REFUSAL.
(a) Offer of Sale; Notice of Proposed Sale. If at any time a
Participant desires to sell, transfer or otherwise dispose of any Shares
or any interest in such Shares, the Participant shall deliver written
notice of his or her desire to do so (the "Sale Notice") to the Company,
which Sale Notice must be accompanied by a binding agreement (the
"Binding Agreement"), which Binding Agreement shall be expressly subject
to the Participant's compliance with the provisions of this Agreement,
including this Section 7, with a bona fide purchaser reasonably capable
of completing such purchase (the "Proposed Transferee"). The Sale Notice
and Binding Agreement shall specify (i) the name and address of the
Proposed Transferee(s), (ii) the number of Shares the Participant
proposes to sell, transfer or otherwise dispose of (referred to herein
as "Offered Shares"), (iii) the consideration per Offered Share to be
delivered to the Participant for the proposed sale, transfer or
disposition and (iv) all other material terms and conditions of the
proposed transaction.
(b) Option to Purchase.
(i) The Company shall have the option to purchase all or
any portion of the Offered Shares for the consideration per share and on
the terms and conditions set forth in the Sale Notice. The Company may
only exercise such option by delivery of written notice to the
Participant prior to the date ten (10) days after the date of delivery
of the Sale Notice.
(ii) If the Company delivers written notice of its intent
to purchase all or any portion of the Offered Shares, then the closing
of the purchase of the Offered Shares by the Company shall take place at
the offices of the Company no later than ten (10) days after the
expiration of the applicable ten (10) day period.
(c) Form of Consideration. To the extent that the consideration
proposed to be paid by the Proposed Transferee for the Offered Shares
consists of property other than cash or a promissory note (the "Non-Cash
Consideration"), the consideration required to be paid by the Company
exercising its options under this Section 7 may consist of cash equal to
the value of the Non-Cash Consideration, as determined in good faith by
the Company's Chief Executive Officer or Chief Financial Officer.
Notwithstanding anything to the contrary set forth above, the ten (10)
day period described in Section 7(b)(i) shall commence when the value of
the Non-Cash Consideration is determined pursuant to this Section 7(c).
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Exhibit 10.51
(d) Sales to Proposed Transferee. To the extent the Company fails
(i) to deliver written notice or notices of intent to purchase any of
the Offered Shares within the ten (10) day period specified in Section
7(b)(i) or (ii) to close the purchase of the Offered Shares within the
applicable period specified in Section 7(b)(ii), then the Participant
may sell, transfer or otherwise dispose of the remaining Offered Shares
to the Proposed Transferee at any time within fifty (50) days after the
date of the delivery of the Sale Notice on the terms set forth in the
Sale Notice and Binding Agreement. Any Offered Shares not sold,
transferred or otherwise disposed of within the applicable fifty (50)
day period and any proposed transfer on terms more favorable to the
Proposed Transferee than those described in the Sale Notice shall
continue to be subject to all of the requirements of this Section 7 as
if there had been no prior offer or Sale Notice. Notwithstanding the
above, the Offered Shares shall not be sold, transferred or otherwise
disposed of unless such purchaser or acquiror is bound or agrees in
writing to be bound by the provisions of this Plan and the option
agreement (and, if the purchaser or acquiror is an entity, such other
terms reasonably imposed by the Company that are intended to circumvent
avoidance of these provisions by means of an indirect transfer of the
Shares), and any such sale, transfer or disposition where such purchaser
or acquiror is not bound or does not so agree to be bound shall be void.
(e) Permitted Transfers. Notwithstanding anything to the contrary
set forth herein, to the extent specifically so provided in the
applicable stock option agreement, the provisions of this Section 7
shall not apply to any transfer or distribution by a Participant of
Shares to: (a) a trust or similar entity directly or indirectly
controlled by the Participant primarily for estate planning purposes,
(b) the Participant's heirs, executors, administrators or beneficiaries
upon the Participant's death, and (c) a spouse, sibling, parent or
child, or to the spouse, sibling, parent or child of any such persons,
or to a trust or similar entity of which such persons are the
beneficiaries for estate planning purposes or domestic relations order
issued by any court or other governmental or administrative body;
provided, however, in the case of any such transfer that such transferee
or distributee agrees in writing to comply with the provisions of this
Agreement.
(f) Effect of Not Following Procedures. Any sale, transfer or
other disposition of Shares not in accordance with the foregoing
procedures of this Section 7 shall be null and void and of no force or
effect.
(g) Termination. The provisions of this Section 7 shall terminate
upon consummation of an initial public offering of the Company.
8. LOCK-UP AGREEMENTS
Each option agreement shall provide that, in connection with any public
offering by the Company of its equity securities, any shares of Common
Stock acquired or that may be acquired upon exercise or vesting of a
stock option may not be sold, offered for sale, encumbered, or otherwise
disposed of or subjected to any transaction that will involve any sales
of securities of the Company, without the prior written consent of the
Company
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Exhibit 10.51
or such underwriter, as the case may be, for a period of 180 days after
the effective date of the registration statement for such public
offering. Any attempted transfer in violation of this Section 8 shall be
null and void.
9. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board, except that as provided
herein the Plan may be administered by a Committee of the Board, as
appointed from time to time by the Board. The Board shall fill vacancies
on and from time to time may remove or add members to the Committee. The
Committee shall act pursuant to a majority vote or unanimous written
consent.
Subject to the express provisions of this Plan, the Committee shall be
authorized and empowered to do all things necessary or desirable in
connection with the administration of this Plan, including, without
limitation: (a) to prescribe, amend and rescind rules relating to this
Plan and to define terms not otherwise defined herein; (b) to prescribe
the form of documentation used to evidence any stock option awarded
hereunder, including provision for such terms as it considers necessary
or desirable, not inconsistent with the terms established by the Board;
(c) to establish and verify the extent of satisfaction of any conditions
to exercisability applicable to stock options; (d) to determine whether,
and the extent to which, adjustments are required pursuant to Section 11
hereof; and (e) to interpret and construe this Plan, any rules and
regulations under the Plan and the terms and conditions of any stock
option awarded hereunder, and to make exceptions to any procedural
provisions in good faith and for the benefit of the Company.
Notwithstanding any provision of this Plan, the Board may at any time
limit the authority of the Committee to administer this Plan.
The Board shall have the authority to establish subplans or other
arrangements not inconsistent with this Plan which the Board deems
necessary or advisable to comply with laws or requirements of foreign
jurisdictions.
All decisions, determinations and interpretations by the Board or,
except as to the Board, the Committee, regarding the Plan, any rules and
regulations under the Plan and the terms and conditions of any stock
option awarded hereunder, shall be final and binding on all Participants
and holders of stock options. The Board and the Committee may consider
such factors as it deems relevant, in its sole and absolute discretion,
in making such decisions, determinations and interpretations including,
without limitation, the recommendations or advice of any officer or
other employee of the Company and such attorneys, consultants and
accountants as it may select.
10. LOANS
The Company may, if authorized by the Board, make loans for the purpose
of enabling a Participant to exercise stock options and to pay the tax
liability resulting from a stock option exercise under the Plan. The
Board shall have full authority to determine the terms and
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Exhibit 10.51
conditions of such loans. Such loans may be secured by the shares of
Common Stock received upon exercise of such stock option.
11. ADJUSTMENT OF AND CHANGES IN THE STOCK
If the outstanding securities of the class then subject to this Plan are
increased, decreased or exchanged for or converted into cash, property
or a different number or kind of shares or securities, or if cash,
property or shares or securities are distributed in respect of such
outstanding securities, in either case as a result of a reorganization,
reclassification, dividend (other than a regular cash dividend) or other
distribution, stock split, reverse stock split, spin-off or the like, or
if substantially all of the property and assets of the Company are sold,
then, unless the terms of such transaction shall provide otherwise, the
maximum number and type of shares or other securities that may be issued
under this Plan shall be appropriately adjusted. The Committee shall
determine in its sole discretion the appropriate adjustment to be
effected pursuant to the immediately preceding sentence. In addition, in
connection with any such change in the class of securities then subject
to this Plan, the Committee may make appropriate and proportionate
adjustments in the number and type of shares or other securities or cash
or other property that may be acquired pursuant to stock options
theretofore awarded under this Plan and the exercise price of such stock
options.
No right to purchase or receive fractional shares shall result from any
adjustment in stock options pursuant to this Section 11. In case of any
such adjustment, the shares subject to the stock option shall be rounded
up to the nearest whole share of Common Stock.
12. REGISTRATION, LISTING OR QUALIFICATION OF STOCK
In the event that the Board or the Committee determines in its
discretion that the registration, listing or qualification of the shares
of Common Stock issuable under the Plan on any securities exchange or
under any applicable law or governmental regulation is necessary as a
condition to the issuance of such shares under the stock option, the
stock option shall not be exercisable or exercised in whole or in part
unless such registration, listing, qualification, consent or approval
has been unconditionally obtained.
13. TAXES
The Board or Committee may make such provisions or impose such
conditions as it may deem appropriate for the withholding or payment by
a Participant of any taxes which it determines are necessary or
appropriate in connection with any issuance of shares under this Plan,
and the rights of a holder of a stock option in any shares are subject
to satisfaction of such conditions. The Company shall not be required to
issue shares of Common Stock or to recognize the disposition of such
shares until such obligations are satisfied. At the Participant's
election, any such obligations may be satisfied by having the Company
withhold a portion of the shares of Common Stock that otherwise would be
issued to the holder of the stock option upon exercise of the stock
option or by surrendering to the Company shares of Common Stock
previously acquired. The Company and any affiliate of
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Exhibit 10.51
the Company shall not be liable to a Participant or any other persons as
to any tax consequence expected, but not realized, by any Participant or
other person due to the receipt of any stock options awarded hereunder.
14. EFFECTIVE DATE, AMENDMENT, AND TERMINATION OF THE PLAN
The Former Plan became effective upon its approval on September 22, 2000
by a majority of the outstanding shares of the Company in accordance
with applicable law. This amended and restated Plan is effective as of
July 26, 2001. Unless earlier suspended or terminated by the Board, no
stock options may be awarded after the tenth anniversary of the date the
Plan is approved by the Company's stockholders. The Board may
periodically amend the Plan as determined appropriate, without further
action by the Company's stockholders except to the extent required by
applicable law. Notwithstanding the foregoing, and subject to adjustment
pursuant to Section 11, the Plan may not be amended to materially
increase the number of shares of Common Stock authorized for issuance
under the Plan, unless any such amendment is approved by the Company's
stockholders. The Plan may be earlier terminated at such earlier time as
the Board may determine. Termination and expiration of the Plan will not
affect the rights and obligations arising under stock options
theretofore awarded and then in effect.
15. MISCELLANEOUS
(a) Provision of Information: The Board in its sole discretion may
determine what, if any, financial and other information is to be
provided to Participants and when such financial and other information
is to be provided after giving consideration to applicable federal and
state laws, rules and regulations, including, without limitation,
applicable federal and state securities laws, rules and regulations,
provided that during such times as this Plan is a California Regulated
Plan, holders of California Regulated Securities will receive financial
statements of the Company on an annual basis.
(b) Governing Law: The Plan shall be governed by the laws of the state
of Delaware, without giving effect to the principles of the conflicts of
laws thereof, provided that this will not be construed to apply the
California Securities Law or the California Securities Rules to
securities or holders thereof to which the California Securities Law or
California Securities Rules would not otherwise apply. In the event any
provision of the Plan shall be held invalid, illegal or unenforceable,
in whole or in part, for any reason, such determination shall not affect
the validity, legality or enforceability of any remaining provision,
portion of provision or the Plan overall, which shall remain in full
force and effect as if the Plan had been absent the invalid, illegal or
unenforceable provision or portion thereof.
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