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EXHIBIT 10.16
MAXIM INTEGRATED PRODUCTS, INC.
1996 STOCK INCENTIVE PLAN
Adopted August 16, 1996
Approved by Shareholders November 14, 1996
As further amended by the Board of Directors on April 16, 1997 and May 15, 1997
Approved by Shareholders November 13, 1997
As further amended by the Board of Directors on March 10, 1998,
May 14, 1998, and August 13, 1998
Approved by Shareholders November 19, 1998
As further amended by the Board of Directors on August 12, 1999.
Approved by Shareholders November 18, 1999
As further amended by the Board of Directors on June 8, 2000,
and August 17, 2000.
Approved by Shareholders November 16, 2000
As further amended by the Board of Directors on August 23, 2001
1. Purposes of the Plan. The purposes of this Stock Incentive Plan are
to attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees, Directors and
Consultants of the Company and its Subsidiaries and to promote the success of
the Company's business.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of the Committees
appointed to administer the Plan.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act.
(c) "Applicable Laws" means the legal requirements relating to the
administration of stock incentive plans, if any, under applicable provisions of
federal securities laws, state corporate and securities laws, the Code, the
rules of any applicable stock exchange or national market system, and the rules
of any foreign jurisdiction applicable to Options granted to residents therein.
(d) "Board" means the Board of Directors of the Company.
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(e) "Change in Control" means a change in ownership or control of
the Company effected through either of the following transactions:
(i) the direct or indirect acquisition by any person or
related group of persons (other than an acquisition from or by the Company or by
a Company-sponsored employee benefit plan or by a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Company) of beneficial ownership (within the meaning of Rule 13d-3 of the
Exchange Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities pursuant to
a tender or exchange offer made directly to the Company's stockholders which a
majority of the Continuing Directors who are not Affiliates or Associates of the
offeror do not recommend such stockholders accept, or
(ii) a change in the composition of the Board over a period of
thirty-six (36) months or less such that a majority of the Board members
(rounded up to the next whole number) ceases, by reason of one or more contested
elections for Board membership, to be comprised of individuals who are
Continuing Directors.
(f) "Code" means the Internal Revenue Code of 1986, as amended.
(g) "Committee" means any committee appointed by the Board to
administer the Plan.
(h) "Common Stock" means the common stock of the Company.
(i) "Company" means Maxim Integrated Products, Inc., a Delaware
corporation.
(j) "Consultant" means any person who is a consultant, advisor,
independent contractor, vendor, customer or other person having a past, current
or prospective business relationship with the Company or any Parent or
Subsidiary.
(k) "Continuing Directors" means members of the Board who either
(i) have been Board members continuously for a period of at least thirty-six
(36) months or (ii) have been Board members for less than thirty-six (36) months
and were elected or nominated for election as Board members by at least a
majority of the Board members described in clause (i) who were still in office
at the time such election or nomination was approved by the Board.
(l) "Continuous Status as an Employee, Director or Consultant"
means that the employment, director or consulting relationship with the Company,
any Parent, or Subsidiary, is not interrupted or terminated. Continuous Status
as an Employee, Director or Consultant shall not be considered interrupted in
the case of (i) any leave of absence approved by the Company or (ii) transfers
between locations of the Company or between the Company, its Parent, any
Subsidiary, or any successor. A leave of absence approved by the Company shall
include sick leave, military leave, or any other personal leave approved by an
authorized representative of the Company. For purposes of Incentive Stock
Options, no such leave may exceed ninety (90) days, unless reemployment upon
expiration of such leave is guaranteed by statute or contract.
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(m) "Corporate Transaction" means any of the following
stockholder-approved transactions to which the Company is a party:
(i) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which is to
change the state in which the Company is incorporated,
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company (including the capital stock of
the Company's subsidiary corporations) in connection with complete liquidation
or dissolution of the Company, or
(iii) any reverse merger in which the Company is the surviving
entity but in which securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities are
transferred to a person or persons different from those who held such securities
immediately prior to such merger.
(n) "Covered Employee" means any person who is a "covered
employee" under Section 162(m)(3) of the Code.
(o) "Director" means a member of the Board.
(p) "Employee" means any person, including an Officer or Director,
who is an employee of the Company or any Parent or Subsidiary of the Company for
purposes of Section 422 of the Code. The payment of a director's fee by the
Company shall not be sufficient to constitute "employment" by the Company.
Except for purposes of grants of Incentive Stock Options, "Employee" also
includes any person whom an officer identifies as a prospective employee of the
Company or any Parent or Subsidiary of the Company.
(q) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(r) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) Where there exists a public market for the Common Stock,
the Fair Market Value of a share of Common Stock shall be (A) the closing sale
price of the Common Stock for the last market trading day prior to the date of
the determination or on the date of the determination, as determined by the
Administrator at the time of the determination (or, if no sales were reported on
either such date, on the last trading date on which sales were reported) on the
stock exchange determined by the Administrator to be the primary market for the
Common Stock or the Nasdaq National Market, whichever is applicable or (B) if
the Common Stock is not traded on any such exchange or national market system,
the closing price of a Share on the Nasdaq Small Cap Market for the day prior to
the time of the determination (or, if no such price was reported on that date,
on the last date on which such price was reported), in each case, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable; or
(ii) In the absence of an established market of the type
described in (i), above, for the Common Stock, the Fair Market Value thereof
shall be determined by the Administrator in good faith.
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(s) "Grantee" means an Employee, Director or Consultant who
receives an Option under the Plan.
(t) "Incentive Stock Option" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code.
(u) "Non-Qualified Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
(v) "Officer" means 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.
(w) "Option" means a stock option granted pursuant to the Plan.
(x) "Option Agreement" means the written agreement evidencing the
grant of an Option executed by the Company and the Grantee, including any
amendments thereto.
(y) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(z) "Performance-Based Compensation" means compensation qualifying
as "performance-based compensation" under Section 162(m) of the Code.
(aa) "Plan" means this 1996 Stock Incentive Plan.
(bb) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange
Act or any successor thereto.
(cc) "Share" means a share of the Common Stock.
(dd) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
(ee) "Subsidiary Disposition" means the disposition by the Company
of its equity holdings in any subsidiary corporation effected by a merger or
consolidation involving that subsidiary corporation, the sale of all or
substantially all of the assets of that subsidiary corporation or the Company's
sale or distribution of substantially all of the outstanding capital stock of
such subsidiary corporation.
3. Stock Subject to the Plan.
(a) Subject to the provisions of Section 10 below, the maximum
aggregate number of Shares which may be issued pursuant to this Plan is
81,200,000 Shares [adjusted to reflect the stock dividend effective December 5,
1997, and November 30, 1999]; provided, however, that such maximum aggregate
number of Shares shall be increased by the number of Shares or options returned
to the Company's Incentive Stock Option Plan, 1987 Employee Stock Participation
Plan, and Supplemental Nonemployee Stock Option Plan. Notwithstanding the
foregoing, the maximum aggregate number of Shares available for grant of
Incentive Stock Options shall be 81,200,000 Shares, and such number shall not be
subject to increase as a result
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of return of Shares or options to the Company's Incentive Stock Option Plan,
1987 Employee Stock Participation Plan, and 1987 Supplemental Nonemployee Stock
Option Plan. The Shares to be issued pursuant to the Plan may be authorized, but
unissued, or reacquired Common Stock.
(b) If an Option expires or becomes unexercisable without having
been exercised in full, or is surrendered pursuant to an Option exchange
program, or if any unissued Shares are retained by the Company upon exercise of
an Option in order to satisfy the exercise price for such Option or any
withholding taxes due with respect to such Option, such unissued or retained
Shares shall become available for future grant under the Plan (unless the Plan
has terminated). Shares that actually have been issued under the Plan pursuant
to an Option shall not be returned to the Plan and shall not become available
for future distribution under the Plan, except that if unvested Shares are
forfeited, or repurchased by the Company at their original purchase price, such
Shares shall become available for future grant under the Plan.
4. Administration of the Plan.
(a) Plan Administrator.
(i) Administration with Respect to Directors and Officers.
With respect to grants of Options to Directors or Employees who are also
Officers or Directors of the Company, the Plan shall be administered by (A) the
Board or (B) a Committee designated by the Board, which Committee shall be
constituted in such a manner as to satisfy the Applicable Laws and to permit
such grants and related transactions under the Plan to be exempt from Section
16(b) of the Exchange Act in accordance with Rule 16b-3. Once appointed, such
Committee shall continue to serve in its designated capacity until otherwise
directed by the Board.
(ii) Administration With Respect to Consultants and Other
Employees. With respect to grants of Options to Employees or Consultants who are
neither Directors nor Officers of the Company, the Plan shall be administered by
(A) the Board or (B) a Committee designated by the Board, which Committee shall
be constituted in such a manner as to satisfy the Applicable Laws. Once
appointed, such Committee shall continue to serve in its designated capacity
until otherwise directed by the Board. The Board may authorize one or more
Officers to grant such Options and may limit such authority by requiring that
such Options must be reported to and ratified by the Board or a Committee within
six (6) months of the grant date, and if so ratified, shall be effective as of
the grant date.
(iii) Administration With Respect to Covered Employees.
Notwithstanding the foregoing, grants of Options to any Covered Employee
intended to qualify as Performance-Based Compensation shall be made only by a
Committee (or subcommittee of a Committee) which is comprised solely of two or
more Directors eligible to serve on a committee making Options qualifying as
Performance-Based Compensation. In the case of such Options granted to Covered
Employees, references to the "Administrator" or to a "Committee" shall be deemed
to be references to such Committee or subcommittee.
(iv) Administration Errors. In the event an Option is granted
in a manner inconsistent with the provisions of this subsection (a), such Option
shall be presumptively valid as of its grant date to the extent permitted by the
Applicable Laws.
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(b) Powers of the Administrator. Subject to Applicable Laws and
the provisions of the Plan (including any other powers given to the
Administrator hereunder), and except as otherwise provided by the Board, the
Administrator shall have the authority, in its discretion:
(i) to select the Employees, Directors and Consultants to whom
Options may be granted from time to time hereunder;
(ii) to determine whether and to what extent Options are
granted hereunder;
(iii) to determine the number of Shares or the amount of other
consideration to be covered by each Option granted hereunder;
(iv) to determine the Fair Market Value of the Common Stock in
accordance with Section 2(r) of the Plan;
(v) to approve forms of Option Agreement for use under the
Plan;
(vi) to determine the terms and conditions of any Option
granted hereunder;
(vii) to amend the terms of any outstanding Option granted
under the Plan in any lawful way, provided that any amendment that would
adversely affect the Grantee's rights under an outstanding Option shall not be
made without the Grantee's written consent and provided, further, that any
provision of the Plan to the contrary notwithstanding, the Administrator shall
not have the authority to reprice any outstanding option, it being understood
that "reprice" shall mean to amend any outstanding Option to reduce the exercise
price;
(viii) to construe and interpret the terms of the Plan and
Options granted pursuant to the Plan;
(ix) Notwithstanding any provision of the Plan to the
contrary, in order to facilitate compliance with the tax, securities, foreign
exchange, probate or other applicable provisions of the laws in other countries
in which the Company or its Affiliates operate or have key employees or
non-employee directors, the Committee, in its discretion, shall have the power
and authority to (A) determine which (if any) Employees, Directors, and/or
Consultants rendering services or employed outside the U.S. are eligible to
participate in the Plan or to receive any type of award hereunder; (B) determine
which non-U.S.-based Affiliates or operations (e.g., branches, representative
offices) participate in the Plan or any type of award hereunder; (C) modify the
terms and conditions of any awards made to such Employees, Directors, and/or
Consultants, or with respect to such non-U.S.-based Affiliates or operations;
and (D) establish sub-plans, modify methods of exercise, modify payment
restrictions on sale or transfer of shares and other terms and procedures to the
extent deemed necessary or desirable by the Committee to comply with applicable
laws of the non-U.S. jurisdiction. The Committee shall not, however, have the
power or authority to amend the Plan with respect to the maximum aggregate
number of Shares that may be issued under the Plan as set forth in Section
3.(a);
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increase the Individual Option Limit as set forth in Section 6.(c); or lengthen
the Term of the Option set forth in Section 6.(d). and
(x) to take such other action, not inconsistent with the terms
of the Plan, as the Administrator deems appropriate.
(c) Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be conclusive and
binding on all persons.
5. Eligibility. Non-Qualified Stock Options may be granted to
Employees, Directors and Consultants. Incentive Stock Options may be granted
only to Employees. An Employee, Director or Consultant who has been granted an
Option may, if otherwise eligible, be granted additional Options. Options may be
granted to such Employees of the Company and its subsidiaries who are residing
in foreign jurisdictions as the Administrator may determine from time to time.
6. Terms and Conditions of Options.
(a) Designation of Option. Each Option shall be designated in the
Option Agreement as either an Incentive Stock Option or a Non-Qualified Stock
Option. However, notwithstanding such designation, to the extent that the
aggregate Fair Market Value of Shares subject to Options designated as Incentive
Stock Options which become exercisable for the first time by a Grantee during
any calendar year (under all plans of the Company or any Parent or Subsidiary)
exceeds $100,000, such excess Options, to the extent of the Shares covered
thereby in excess of the foregoing limitation, shall be treated as Non-Qualified
Stock Options. For this purpose, Incentive Stock Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of
the Shares shall be determined as of the date the Option with respect to such
Shares is granted.
(b) Conditions of Option. Subject to the terms of the Plan, the
Administrator shall determine the provisions, terms and conditions of each
Option including, but not limited to, the Option vesting schedule, form of
payment upon exercise of the Option and satisfaction of any performance
criteria.
(c) Individual Option Limit. The maximum number of Shares with
respect to which Options may be granted to any individual in any fiscal year of
the Company shall be 12,000,000 [adjusted to reflect the stock dividend
effective December 5, 1997 and November 30, 1999]. The foregoing limitation
shall be adjusted proportionately in connection with any change in the Company's
capitalization pursuant to Section 10, below. To the extent required by Section
162(m) of the Code or the regulations thereunder, in applying the foregoing
limitation with respect to an individual, if any Option is canceled, the
canceled Option shall continue to count against the maximum number of Shares
with respect to which Options may be granted to the individual. For this
purpose, the repricing of an Option shall be treated as the cancellation of the
existing Option and the grant of a new Option.
(d) Term of Option. The term of each Option shall be ten (10)
years from the date of grant for all Grantees other than Directors who are not
Employees, in whose case the term shall be five (5) years from the date of
grant. However, in the case of an Incentive Stock Option granted to a Grantee
who, at the time the Option is granted, owns stock representing more than
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ten percent (10%) of the voting power of all classes of stock of the Company or
any Parent or Subsidiary, the term of the Incentive Stock Option shall be five
(5) years from the date of grant thereof or such shorter term as may be provided
in the Option Agreement.
(e) Transferability of Options. Incentive Stock Options 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 Grantee only by the Grantee. Non-Qualified
Stock Options shall be transferable to the extent provided in the Option
Agreement.
(f) Time of Granting Options. The date of grant of an Option shall
for all purposes be the date on which the Administrator makes the determination
to grant such Option, or such other date as is determined by the Administrator.
Notice of the grant determination shall be given to each Employee, Director or
Consultant to whom an Option is so granted within a reasonable time after the
date of such grant.
(g) Vesting During Leave of Absence. During any leave of absence
from employment, directorship or consulting arrangement with the Company or any
Parent or Subsidiary, vesting of such Grantee's Options shall cease, and shall
resume upon the Grantee's return to his or her relationship with the Company,
Parent or Subsidiary. The dates on which such Grantee's Options vest shall
thereafter be adjusted by the duration of the leave of absence.
7. Option Exercise Price, Consideration and Taxes.
(a) Exercise Price. The exercise price for an Option shall be as
follows:
(i) In the case of an Incentive Stock Option:
(A) granted to an Employee who, at the time of the grant
of such Incentive Stock Option owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the per Share exercise price shall be not less than one hundred
ten percent (110%) of the Fair Market Value per Share on the date of grant.
(B) granted to any Employee other than an Employee
described in the preceding paragraph, the per Share exercise price shall be not
less than one hundred percent (100%) of the Fair Market Value per Share on the
date of grant.
(ii) In the case of a Non-Qualified Stock Option, the per
Share exercise price shall be not less than eighty-five percent (85%) of the
Fair Market Value per Share on the date of grant unless otherwise determined by
the Administrator; provided, however, that in the case the per Share exercise
price is less than one hundred percent (100%) of the Fair Market Value per Share
on the date of the grant, the Administrator determines in writing and in good
faith that (A) such grants are made infrequently, (B) there is a good business
reason for the grant that outweighs the normal presumption of a per Share
exercise price of not less than one hundred percent (100%) of the Fair Market
Value per Share on the date of grant, and (C) the aggregate number of Shares
subject to such Options does not exceed five percent (5%) of the aggregate
maximum number of Shares under Section 3(a), above, as amended from time to
time.
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(iii) In the case of Options intended to qualify as
Performance-Based Compensation, the per Share exercise price shall be not less
than one hundred percent (100%) of the Fair Market Value per Share on the date
of grant.
(b) Consideration. Subject to Applicable Laws, 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 Administrator (and, in the case of
an Incentive Stock Option, shall be determined at the time of grant). In
addition to any other types of consideration the Administrator may determine,
the Administrator is authorized to accept as consideration for Shares issued
under the Plan the following:
(i) cash;
(ii) check;
(iii) delivery of Grantee's promissory note with such
recourse, interest, security, and redemption provisions as the Administrator
determines as appropriate;
(iv) surrender of Shares (including withholding of Shares
otherwise deliverable upon exercise of the Option) which 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 (but only to the extent that
such exercise of the Option would not result in an accounting compensation
charge with respect to the Shares used to pay the exercise price unless
otherwise determined by the Administrator);
(v) 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 and delivery to
the Company of the sale or loan proceeds required to pay the exercise price; or
(vi) any combination of the foregoing methods of payment.
(c) Taxes. In connection with each option granted pursuant to this
Plan, at any time when the Company could have any withholding obligation
(whether for Federal, state, local or foreign income, disability, Medicare,
employment or other taxes or otherwise) as a result of exercise of an option,
the lapse of any substantial risk of forfeiture to which the shares are subject
at the time of exercise, or the disposition of shares acquired upon such
exercise, the Company shall have no obligation to permit exercise of such option
or to issue any shares upon exercise of the option unless and until either the
exercise of the option is accompanied by sufficient payment, as determined by
the Company in its absolute discretion, to meet those withholding obligations on
such exercise, lapse or disposition or other arrangements are made that are
satisfactory to the Company in its absolute discretion to provide otherwise for
such payment. The Company shall have no liability to any optionee or transferee
for exercising the foregoing right not to permit exercise or issue shares.
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8. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder.
(i) Any Option granted hereunder shall be exercisable at such
times and under such conditions as determined by the Administrator under the
terms of the Plan and specified in the Option Agreement.
(ii) 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. 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 Shares subject to an Option, notwithstanding the exercise of an Option. The
Company shall issue (or cause to be issued) such stock certificate promptly upon
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 the Option Agreement or Section 10, below.
(b) Exercise of Option Following Termination of Employment,
Director or Consulting Relationship.
(i) An Option may not be exercised after the termination date
of such Option set forth in the Option Agreement and may be exercised following
the termination of a Grantee's Continuous Status as an Employee, Director or
Consultant only to the extent that the Grantee was entitled to exercise it at
the date of such termination (but in no event later than the expiration of the
term of such option as set forth in the Option Agreement). Options shall be
exercisable for a period of ninety (90) days following termination generally,
and for a period of five hundred forty-seven (547) days following termination
due to death of the Grantee or three hundred sixty-five (365) days following
termination due to the disability of the Grantee (or, in each case, such other
period of time as is determined by the Administrator, which such determination
in the case of an Incentive Stock Option shall be made at the time of grant of
the Option).
(ii) All Options shall terminate to the extent not exercised
on the last day of the period specified in paragraph (i) above or the last day
of the original term of the Option, whichever occurs first.
(iii) Any Option designated as an Incentive Stock Option to
the extent not exercised within the time permitted by law for the exercise of
Incentive Stock Options following the termination of a Grantee's Continuous
Status as an Employee, Director or Consultant shall convert automatically to a
Non-Qualified Stock Option and thereafter shall be exercisable as such to the
extent exercisable by its terms for the period specified in the Option
Agreement.
(c) Exercise of Option Following Termination of Employment,
Director or Consulting Relationship. In the event of termination of a Grantee's
Continuous Status as an Employee, Director or Consultant with the Company for
any reason other than disability or death
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(but not in the event of an Grantee's change of status from Employee to
Consultant or from Consultant to Employee), such Grantee may, but only within
ninety (90) days after the date of such termination (but in no event later than
the expiration date of the term of such Option as set forth in the Option
Agreement), exercise his or her Option to the extent that the Grantee was
entitled to exercise it at the date of such termination or to such other extent
as may be determined by the Administrator. If the Grantee should die within
ninety (90) days after the date of such termination, the Grantee's estate or the
person who acquired the right to exercise the Option by bequest or inheritance
may exercise the Option to the extent that the Grantee was entitled to exercise
it at the date of such termination within five hundred forty-seven (547) days of
the Grantee's date of death, but in no event later than the expiration date of
the term of such Option as set forth in the Option Agreement. In the event of an
Grantee's change of status from Employee to Consultant, an Employee's Incentive
Stock Option shall convert automatically to a Non-Qualified Stock Option on the
ninety-first (91st) day following such change of status. If the Grantee does not
exercise such Option to the extent so entitled within the time specified herein,
the Option shall terminate.
(d) Disability of Grantee. In the event of termination of a
Grantee's Continuous Status as an Employee, Director or Consultant as a result
of his or her disability, Grantee may, but only within three hundred sixty-five
(365) days from the date of such termination (and in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise the Option to the extent otherwise entitled to exercise it
at the date of such termination; provided, however, that if such disability is
not a "disability" as such term is defined in Section 22(e)(3) of the Code, in
the case of an Incentive Stock Option such Incentive Stock Option shall
automatically convert to a Non-Qualified Stock Option on the day three (3)
months and one day following such termination. To the extent that Grantee is not
entitled to exercise the Option at the date of termination, or if Grantee does
not exercise such Option to the extent so entitled within the time specified
herein, the Option shall terminate.
(e) Death of Grantee. In the event of the death of a Grantee, the
Option may be exercised at any time within five hundred forty-seven (547) days
following the date of death (but in no event later than the expiration of the
term of such Option as set forth in the Option Agreement), by the Grantee's
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance, but only to the extent that the Grantee was entitled to exercise
the Option at the date of death. If, at the time of death, the Grantee was not
entitled to exercise his or her entire Option, the Shares covered by the
unexercisable portion of the Option shall immediately revert to the Plan. If,
after death, the Grantee's estate or a person who acquired the right to exercise
the Option by bequest or inheritance does not exercise the Option within the
time specified herein, the Option shall terminate.
(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 Grantee at the time that such offer is made.
9. Conditions Upon Issuance of Shares.
(a) 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
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all Applicable Laws, and shall be further subject to the approval of counsel for
the Company with respect to such compliance.
(b) 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
Applicable Laws.
10. Adjustments Upon Changes in Capitalization. Subject to any required
action by the stockholders of the Company, the number of Shares covered by each
outstanding Option, and the number of Shares 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, 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 similar event resulting in
an increase or decrease in the number of issued shares of Common Stock. 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 hereof shall be made with respect to, the
number or price of Shares subject to an Option.
11. Corporate Transactions/Changes in Control/Subsidiary Dispositions.
(a) The Administrator shall have the authority, exercisable either
in advance of any actual or anticipated Corporate Transaction, Change in Control
or Subsidiary Disposition or at the time of an actual Corporate Transaction,
Change in Control or Subsidiary Disposition and exercisable at the time of the
grant of an Option under the Plan or any time while an Option remains
outstanding, to provide for the full automatic vesting and exercisability of one
or more outstanding unvested Options under the Plan and the release from
restrictions on transfer and repurchase or forfeiture rights of such Options in
connection with a Corporate Transaction, Change in Control or Subsidiary
Disposition, on such terms and conditions as the Administrator may specify. The
Administrator also shall have the authority to condition any such Option vesting
and exercisability or release from such limitations upon the subsequent
termination of the Continuous Status as an Employee or Consultant of the Grantee
within a specified period following the effective date of the Change in Control
or Subsidiary Disposition. The Administrator may provide that any Options so
vested or released from such limitations in connection with a Change in Control
or Subsidiary Disposition, shall remain fully exercisable until the expiration
or sooner termination of the Option. Effective upon the consummation of a
Corporate Transaction, all outstanding Options under the Plan shall terminate
unless assumed by the successor company or its Parent.
(b) The portion of any Incentive Stock Option accelerated under
this Section 11 in connection with a Corporate Transaction, Change in Control or
Subsidiary Disposition shall remain exercisable as an Incentive Stock Option
under the Code only to the extent the $100,000 dollar limitation of Section
422(d) of the Code is not exceeded. To the extent such dollar
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limitation is exceeded, the accelerated excess portion of such Option shall be
exercisable as a Non-Qualified Stock Option.
12. 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.
13. Amendment, Suspension or Termination of the Plan.
(a) The Board may at any time amend, suspend or terminate the
Plan. To the extent required to comply with Applicable Laws, the Company shall
obtain stockholder approval of any Plan amendment in such manner and to such a
degree as required.
(b) No Option may be granted during any suspension of the Plan or
after termination of the Plan.
(c) Any amendment, suspension 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, suspended or terminated, unless
mutually agreed otherwise between the Grantee and the Administrator, which
agreement must be in writing and signed by the Grantee and the Company.
14. Reservation of Shares.
(a) The Company, during the term of the Plan, will at all times
reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan.
(b) The 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.
15. No Effect on Terms of Employment. The Plan shall not confer upon
any Grantee any right with respect to continuation of employment or consulting
relationship with the Company, nor shall it interfere in any way with his or her
right or the Company's right to terminate his or her employment or consulting
relationship at any time, with or without cause.
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