APPENDIX "A"
SAIPH CORPORATION
2002 STOCK OPTION/STOCK ISSUANCE PLAN
I. GENERAL PROVISIONS
A. PURPOSE OF THE PLAN
This 2002 Stock Option/Stock Issuance Plan (the "Plan") is intended to
aid the Corporation (or any Parent or Subsidiary) in maintaining and
developing a management team, attracting qualified officers and employees
capable of assisting in the future success of the Corporation, and
rewarding those individuals who have contributed, or may contribute in the
future, to the success of the Corporation (or any Parent or Subsidiary).
It is designed to aid the Corporation (and any Parent or Subsidiary) in
retaining the services of executives and Employees and in attracting new
personnel when needed for future operations and growth and to provide such
personnel with an incentive to remain Employees of the Corporation, to use
their best efforts to promote the success of the Corporation's business,
and to provide them with an opportunity to obtain or increase a proprietary
interest in the Corporation. It is further designed to attract and retain
the best available personnel for service as directors of the Corporation
(or any Parent or Subsidiary), whether or not such individuals may
otherwise be Employees. It is also designed to permit the Corporation to
reward those consultants or other independent advisors who are not
Employees but who are perceived by management as having contributed to the
success of the Corporation (or any Parent or Subsidiary) or who are
important to the continued business and operations of the Corporation (or
any Parent or Subsidiary).
Capitalized terms herein shall have the meanings assigned to such
terms in the attached Appendix.
B. STRUCTURE OF THE PLAN
1. The Plan shall be divided into two (2) separate equity
programs:
a. the Option Grant Program under which eligible persons
may, at the discretion of the Plan Administrator, be granted options to
purchase shares of Common Stock, and
b. the Stock Issuance Program under which eligible persons
may, at the discretion of the Plan Administrator, be issued shares of
Common Stock directly, either through the immediate purchase of such shares
or as a bonus for services rendered to the Corporation (or any Parent or
Subsidiary) or as an incentive to perform services for the Corporation (or
any Parent or Subsidiary).
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2. The provisions of Sections I and IV shall apply to both
equity programs under the Plan and shall accordingly govern the interests
of all persons under the Plan.
C. ADMINISTRATION OF THE PLAN
1. The Plan shall be administered by the Board. However, any
or all administrative functions otherwise exercisable by the Board may be
delegated to the Committee. Members of the Committee shall serve for such
period of time as the Board may determine and shall be subject to removal
by the Board at any time. The Board may also at any time terminate the
functions of the Committee and reassume all powers and authority previously
delegated to the Committee.
2. The Plan Administrator shall have full power and authority
(subject to the provisions of the Plan) to establish such rules and
regulations as it may deem appropriate for proper administration of the
Plan and to make such determinations under, and issue such interpretations
of, the Plan and any outstanding options thereunder as it may deem
necessary or advisable. Decisions of the Plan Administrator shall be final
and binding on all parties who have an interest in the Plan or any option
thereunder.
D. ELIGIBILITY
1. The Plan Administrator shall have full authority to
determine, (i) with respect to the option grants under the Option Grant
Program, which eligible persons are to receive option grants, the time or
times when such option grants are to be made, the number of shares to be
covered by each such grant, the status of the granted option as either an
Incentive Option or a Non-Statutory Option, the time or times at which each
option is to become exercisable, the vesting schedule (if any) applicable
to the option shares and the maximum term for which the option is to remain
outstanding, and (ii) with respect to stock issuances under the Stock
Issuance Program, which eligible persons are to receive stock issuances,
the time or times when such issuances are to be made, the number of shares
to be issued to each Participant, the vesting schedule (if any) applicable
to the issued shares and the consideration to be paid or given by the
Participant for such shares.
2. The Plan Administrator shall have the absolute discretion
either to grant options in accordance with the Option Grant Program or to
effect stock issuances in accordance with the Stock Issuance Program.
E. STOCK SUBJECT TO THE PLAN
1. The stock issuable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock. The maximum number of
shares of Common Stock which may be issued over the term of the Plan shall
not exceed 3,000,000 shares.
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2. Shares of Common Stock subject to outstanding options shall
be available for subsequent issuance under the Plan to the extent (i) the
options expire or terminate for any reason prior to exercise in full or
(ii) the options are canceled in accordance with the cancellation-re-grant
provisions of Section II(E).
3. Should any change be made to the Common Stock by reason of
any stock split, stock dividend, recapitalization, combination of shares,
exchange of shares or other change affecting the outstanding Common Stock
as a class without the Corporation's receipt of consideration, appropriate
adjustments shall be made to the maximum number and/or class of securities
issuable under the Plan. The adjustments determined by the Plan
Administrator shall be final, binding and conclusive.
II. OPTION GRANT PROGRAM
A. TYPES OF OPTIONS
The Option Grant Program shall be comprised of two types of options as
follows:
1. Incentive Options which are options intended to qualify
under the Code, subject to limiting conditions, for favorable tax treatment
in respect of the recognition of ordinary income, gain, or loss and
withholding requirements applicable to the exercise of the options and
disposition of the shares of Common Stock acquired upon exercise of
Incentive Options.
2. Non-Statutory Options which are those options that are not
intended to qualify under the Code for favorable tax treatment in respect
of the recognition of ordinary income, gain, or loss and withholding
requirements applicable to the exercise of options and disposition of
shares of Common Stock acquired pursuant to the exercise of the Non-
Statutory options. The Option grant program intends that the treatment of
such transactions in respect of Non-Statutory Options will be governed by
the taxation rules applicable to the transfer of property in connection
with the performance of services.
B. OPTION TERMS APPLICABLE TO BOTH INCENTIVE AND NON-STATUTORY
OPTIONS
1. Option Agreements.
Each option shall be evidenced by one or more option agreements
between the Corporation and the Optionee. Option agreements shall
designate the number of shares and the exercise price of the Option to
which it pertains, and shall set forth the vesting schedule of the Option
or state that the Option is vested immediately. The option agreements
shall be in writing, dated as of the date the option is granted, and shall
be executed on behalf of the Corporation by such officers as the Board
shall authorize. Option agreements shall be in such form and contain such
additional provisions as the Plan Administrator shall prescribe, but in no
event shall they contain provisions inconsistent with the provisions of
this Plan.
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2. Exercise Price.
a. The exercise price per share shall be fixed by the Plan
Administrator for Incentive and Non-Statutory Options as set forth below.
b. The exercise price shall become immediately due upon
exercise of the option and shall, subject to the provisions of Section
IV(A) and the documents evidencing the option, be payable in cash or check
made payable to the Corporation. The Plan Administrator, in its
discretion, may also permit the exercise price to be paid partly in cash
and/or as follows:
(1) in shares of Common Stock valued at Fair Market
Value on the Exercise Date, or
(2) to the extent the option is exercised for vested
shares, through a special sale and remittance procedure pursuant to which
the Optionee shall concurrently provide irrevocable written instructions
(A) to a Corporation-designated brokerage firm to effect the immediate sale
of the purchased shares and remit to the Corporation, out of the sale
proceeds available on the settlement date, sufficient funds to cover the
aggregate exercise price payable for the purchased shares plus all
applicable Federal, state and local income and employment taxes required to
be withheld by the Corporation by reason of such exercise, and (B) to the
Corporation to deliver the certificates for the purchased shares directly
to such brokerage firm in order to complete the sale.
c. Except to the extent such sale and remittance procedure
is utilized, payment of the exercise price for the purchased shares must be
made on the Exercise Date.
3. Exercise and Term of Options.
Each option shall be exercisable at such time or times, during such
period and for such number of shares as shall be determined by the Plan
Administrator and set forth in the documents evidencing the option grant.
However, no option shall have a term in excess of ten (10) years measured
from the option grant date. The terms of Incentive and Non-Qualified
Options shall be fixed by the Plan Administrator within the limits
specified below.
4. Effect of Termination of Service.
a. The following provisions shall govern the exercise of
any options held by the Optionee at the time of cessation of Service or
death:
(1) Should the Optionee cease to remain in Service for
Misconduct, then the options shall terminate on the date of cessation of
the Service.
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(2) Should the Optionee cease to remain in Service for
any reason other than Misconduct, Disability or death, then the Optionee
shall have a period of three (3) months following the date of such
cessation of Service during which to exercise each outstanding option held
by such Optionee.
(3) Should Optionee's Service terminate by reason of
Disability, then the Optionee shall have a period of twelve (12) months
following the date of such cessation of Service during which to exercise
each outstanding option held by such Optionee.
(4) If the Optionee dies while holding an outstanding
option, then the personal representative of his or her estate or the person
or persons to whom the option is transferred pursuant to the Optionee's
will or the laws of inheritance shall have a twelve (12) month period
following the date of the Optionee's death to exercise such option.
(5) Under no circumstances, however, shall any such
option be exercisable after the specified expiration of the option term.
(6) During the applicable post-Service exercise
period, the option may not be exercised in the aggregate for more than the
number of vested shares for which the option is exercisable on the date of
the Optionee's cessation of Service. Upon the expiration of the applicable
exercise period or (if earlier) upon the expiration of the option term, the
option shall terminate and cease to be outstanding for any vested shares
for which the option has not been exercised. However, the option shall,
immediately upon the Optionee's cessation of Service, terminate and cease
to be outstanding with respect to any and all option shares for which the
option is not otherwise at the time exercisable or in which the Optionee is
not otherwise at that time vested.
b. The Plan Administrator shall have the discretion,
exercisable either at the time an option is granted or at any time while
the option remains outstanding, to:
(1) extend the period of time for which the option is
to remain exercisable following Optionee's cessation of Service or death
from the limited period otherwise in effect for that option to such greater
period of time as the Plan Administrator shall deem appropriate, but in no
event beyond the expiration of the option term; and/or
(2) permit the option to be exercised, during the
applicable post-Service exercise period, not only with respect to the
number of vested shares of Common Stock for which such option is
exercisable at the time of the Optionee's cessation of Service but also
with respect to one or more additional installments in which the Optionee
would have vested under the option had the Optionee continued in Service.
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5. Shareholder Rights. The holder of an option shall have no
shareholder rights with respect to the shares subject to the option until
such person shall have exercised the option, paid the exercise price, and
become a holder of record of the purchased shares.
6. Vesting Provisions. The Plan Administrator may not impose a
vesting schedule upon any option grant which is more restrictive than
twenty percent (20%) per year vesting, with the initial vesting to occur
not later than one (1) year after the option grant date.
7. Limited Transferability of Options. During the lifetime of
the Optionee, the option shall be exercisable only by the Optionee and
shall not be assignable or transferable other than by will or by the laws
of descent and distribution following the Optionee's death.
8. Withholding. The Corporation's obligation to deliver shares
of Common Stock upon the exercise of any options granted under the Plan
shall be subject to the satisfaction of all applicable Federal, state and
local income and employment tax withholding requirements.
C. INCENTIVE OPTIONS
The terms specified below shall be applicable to all Incentive
Options. Except as modified by the provisions of this Section II(C), all
the provisions of the Plan shall be applicable to Incentive Options.
Options which are specifically designated as Non-Statutory Options shall
not be subject to the terms of this Section II (C).
1. Eligibility. Incentive Options may only be granted to
Employees.
2. Exercise Price. The exercise price per share shall not be
less than one hundred percent (100%) of the Fair Market Value per share of
Common Stock on the option grant date. For options granted to a 10%
Shareholder, the exercise price per share shall not be less than one
hundred ten percent (110%) of the Fair Market Value per share of Common
Stock on the option grant date.
3. Dollar Limitation. The aggregate Fair Market Value of the
shares of Common Stock (determined as of the respective date or dates of
grant) for which one or more options granted to any Employee under the Plan
(or any other option plan of the Corporation or any Parent or Subsidiary)
may for the first time become exercisable as Incentive Options during any
one (1) calendar year shall not exceed the sum of One Hundred Thousand
Dollars ($100,000). To the extent the Employee holds two (2) or more such
options which become exercisable for the first time in the same calendar
year, the foregoing limitation on the exercisability of such options as
Incentive Options shall be applied on the basis of the order in which such
options are granted.
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4. Option Term for 10% Shareholder. If any Employee to whom an
Incentive Option is granted is a 10% Shareholder, then the option term
shall not exceed five (5) years measured from the option grant date.
D. NON-STATUTORY OPTIONS
The terms specified below shall be applicable to all Non-Statutory
Options. Except as modified by the provisions of this Section II(D), all
the provisions of the Plan shall be applicable to Non-Statutory Options.
1. Eligibility. Non-Statutory Options may be granted to the
following persons:
a. Employees,
b. non-employee members of the Board or the non-employee
members of the board of directors of any Parent or Subsidiary, and
c. consultants and other independent advisors who provide
services to the Corporation (or any Parent or Subsidiary), provided that
such consultants or advisors are natural persons; that they provide bona
fide services to the Corporation (or the Parent or Subsidiary); and that
the services are not in connection with the offer or sale of securities in
a capital-raising transaction, and do not directly or indirectly promote or
maintain a market for the Corporation's securities.
2. Exercise Price. The exercise price per share covered by a
Non-Statutory Option shall not be less than eighty-five percent (85%) of
the Fair Market Value per share of Common Stock on the option grant date.
E. CORPORATE TRANSACTION
1. The Plan and each option outstanding under the Plan at the
time of a Corporate Transaction shall terminate and cease to be
outstanding, but only after each Optionee (or the successor in interest)
has been given, for the period of ten (10) days ending five (5) days before
the effective date of the Corporate Transaction (or such longer period as
the Board may specify), the right to exercise any unexpired option in full
or in part, but only to the extent that, on the date of such Corporate
Transaction, such Optionee's right to exercise such option has vested
pursuant the terms of the applicable option agreement and has not
previously been exercised. However, the outstanding options shall not
terminate and cease to be outstanding on such an accelerated basis if and
to the extent such options are assumed by the successor corporation (or
parent thereof) in the Corporate Transaction.
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2. Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such
Corporate Transaction, to apply to the number and class of securities which
would have been issuable to the Optionee in consummation of such Corporate
Transaction, had the option been exercised immediately prior to such
Corporate Transaction. Appropriate adjustments shall also be made to (i)
the number and class of securities available for issuance under the Plan
following the consummation of such Corporate Transaction and (ii) the
exercise price payable per share under each outstanding option, provided
the aggregate exercise price payable for such securities shall remain the
same.
3. The Plan Administrator shall have the discretion,
exercisable either at the time the option is granted or at any time while
the option remains outstanding, to provide for the automatic acceleration
(in whole or in part) of one or more outstanding options upon the
occurrence of a Corporate Transaction, whether or not those options are to
be assumed or replaced in the Corporate Transaction.
4. The portion of any Incentive Option accelerated in
connection with a Corporate Transaction shall remain exercisable as an
Incentive Option only to the extent the applicable One Hundred Thousand
Dollar ($100,000) limitation is not exceeded. To the extent such dollar
limitation is exceeded, the accelerated portion of such option shall be
exercisable as a Non-Statutory Option under the Federal tax laws.
5. Subject to Section II(F) below, the grant of options under
the Plan shall in no way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer
all or any part of its business or assets.
F. ADJUSTMENTS
1. If the Corporation shall at any time subdivide its
outstanding shares of Common Stock by recapitalization, reclassification or
split-up thereof, or if the Corporation shall declare a stock dividend or
distribute shares of Common Stock to its stockholders, the number of shares
of Common Stock purchasable upon exercise of the options immediately prior
to such subdivision shall be proportionately increased in each instance,
and if the Corporation shall at any time combine the outstanding shares of
Common Stock by recapitalization, reclassification or combination thereof,
the number of shares of Common Stock purchasable upon exercise of the
options immediately prior to such combination shall be proportionately
decreased in each instance. Any adjustment which is the result of a stock
dividend or distribution shall be effective on the record date therefor.
2. Whenever the number of shares of Common Stock purchasable
upon the exercise of any of the options is required to be adjusted as
provided in Section II(F)(1) above, the exercise price per share shall be
adjusted (to the nearest cent) in each instance by multiplying such
exercise price per share immediately prior to such adjustment by a fraction
(x) the numerator of which shall be the number of shares of Common Stock
purchasable upon the exercise of the options immediately prior to such
adjustment, and (y) the denominator of which shall be the number of shares
of Common Stock so purchasable immediately thereafter.
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3. In case the Corporation shall, at any time prior to the
expiration date of the options, and prior to the exercise thereof, offer to
the holders of its Common Stock any right to subscribe for additional
shares of any class of the Corporation, then the Corporation shall give
written notice thereof to the registered holders of the options not less
than thirty (30) days prior to the date on which the books of the
Corporation are closed or a record date fixed for the determination of
stockholders entitled to such subscription rights. Such notice shall
specify the date as to which the books shall be closed or record date be
fixed with respect to such offer or subscription, and the right of the
holders to participate in such offer or subscription shall terminate if the
options shall not be exercised on before the date of such closing of the
books or such record date.
4. If the Corporation shall take any action affecting the
shares of its Common Stock, other than that action described in this Plan,
which, in the opinion of the Plan Administrator, would materially affect
the rights of the holders of the options or the exercise price per share,
the number of shares of Common Stock purchasable on exercise of the options
shall be adjusted in each instance and at such time as the Plan
Administrator, in good faith, may determine to be equitable under the
circumstances. The adjustments determined by the Plan Administrator shall
be final, binding, and conclusive.
5. Any changes or adjustments in the number of shares of Common
Stock purchasable upon the exercise of the options or in the exercise price
of options, as required or authorized by this Section II(F), shall be made
with respect to all authorized options whether or not they have yet been
issued or outstanding at the time of the occurrence of the circumstance
leading to such change or adjustment.
G. CANCELLATION AND RE-GRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any time
and from time to time, with the consent of the affected option holders and
subject to approval of the shareholders of the Corporation, the
cancellation of any or all outstanding options under the Plan and to grant
in substitution therefor new options covering the same or different number
of shares of Common Stock but with an exercise price per share based on the
Fair Market Value per share of Common Stock on the new option grant date.
The type and amount of consideration for the substituted options shall be
subject to the approval of the Plan Administrator.
III. STOCK ISSUANCE PROGRAM
A. STOCK ISSUANCE TERMS
Shares of Common Stock may be issued under the Stock Issuance Program
through direct and immediate issuances without any intervening option
grants. Each such stock issuance shall be evidenced by a Stock Issuance
Agreement which complies with the terms specified below.
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1. Cost of Shares. Grants of shares of Common Stock under the
Stock Issuance Program shall be made at such cost as the Plan Administrator
shall determine and may be issued for no monetary consideration, subject to
applicable state law.
2. Vesting Provisions.
a. Shares of Common Stock issued under the Stock Issuance
Program may, in the discretion of the Plan Administrator, be fully and
immediately vested upon issuance or may vest in one or more installments
over the Participant's period of Service or upon attainment of specified
performance objectives. However, the Plan Administrator may not impose a
vesting schedule upon any stock issuance effected under the Stock Issuance
Program which is more restrictive than twenty percent (20%) per year
vesting, with initial vesting to occur not later than one (1) year after
the issuance date.
b. Any new, substituted or additional securities or other
property (including money paid other than as a regular cash dividend) which
the Participant may have the right to receive with respect to the
Participant's unvested shares of Common Stock by reason of any stock
dividend, stock split, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class
without the Corporation's receipt of consideration shall be issued subject
to (i) the same vesting requirements applicable to the Participant's
unvested shares of Common Stock and (ii) such escrow arrangements as the
Plan Administrator shall deem appropriate.
c. Unless specified otherwise in the Stock Issuance
Agreement, the Participant shall have full shareholder rights with respect
to any shares of Common Stock issued to the Participant under the Stock
Issuance Program, whether or not the Participant's interest in those shares
is vested, and accordingly, the Participant shall have the right to vote
such shares and to receive any regular cash dividends paid on such shares.
d. Should the Participant cease to remain in Service while
holding one or more unvested shares of Common Stock issued under the Stock
Issuance Program or should the performance objectives not be attained with
respect to one or more such unvested shares of Common Stock, then those
shares shall be immediately surrendered to the Corporation for
cancellation, and the Participant shall have no further shareholder rights
with respect to those shares. To the extent the surrendered shares were
previously issued to the Participant for consideration paid in cash or cash
equivalent (including the Participant's purchase-money indebtedness), the
Corporation shall repay to the Participant the cash consideration paid for
the surrendered shares and shall cancel the unpaid principal balance of any
outstanding purchase-money note of the Participant attributable to such
surrendered shares.
e. The Plan Administrator may in its discretion waive the
surrender and cancellation of one or more unvested shares of Common Stock
(or other assets attributable thereto) which would otherwise occur upon the
non-completion of the vesting schedule applicable to such shares. Such
waiver shall result in the immediate vesting of the Participant's
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interest in the shares of Common Stock as to which the waiver applies. Such
waiver may be effected at any time, whether before or after the Participant's
cessation of Service or the attainment or non-attainment of the applicable
performance objectives.
3. Non-transferability. Shares of Common Stock granted under
the Stock Issuance program shall not be transferable until the shares are
vested.
B. CORPORATE TRANSACTION
1. Upon the occurrence of a Corporate Transaction all unvested
shares not assumed by the successor corporation (or parent thereof) shall
be immediately surrendered to the Corporation for cancellation, and the
Participant shall have no further shareholder rights with respect to those
shares. To the extent the surrendered shares were previously issued to the
Participant for consideration paid in cash or cash equivalent (including
the Participant's purchase-money indebtedness), the Corporation shall repay
to the Participant the cash consideration paid for the surrendered shares
and shall cancel the unpaid principal balance of any outstanding purchase-
money note of the Participant attributable to such surrendered shares.
2. The Plan Administrator shall have the discretionary
authority, exercisable either at the time the unvested shares are issued or
any time while the Corporation's repurchase rights with respect to those
shares remaining outstanding, to provide that those rights shall
automatically terminate on an accelerated basis, and the shares of Common
Stock subject to those terminated rights shall immediately vest, in the
event of a Corporate Transaction or in the event that the Participant's
Service should subsequently terminate by reason of an Involuntary
Termination within a period designated by the Plan Administrator following
the effective date of any Corporate Transaction in which those repurchase
rights are assumed by the successor corporation (or parent thereof).
C. SHARE ESCROW/LEGENDS
Unvested shares may, in the Plan Administrator's discretion, be held
in escrow by the Corporation until the Participant's interest in such
shares vests or may be issued directly to the Participant with restrictive
legends on the certificates evidencing those unvested shares.
IV. MISCELLANEOUS
A. FINANCING
The Plan Administrator may permit any Optionee or Participant to pay
the option exercise price or the purchase price for shares issued to such
person under the by delivering a full-recourse, interest-bearing promissory
note payable in one or more installments and secured by the purchased
shares. In no event shall the maximum credit available to the Optionee or
Participant exceed the sum of (i) the aggregate option exercise price or
purchase price payable for the purchased shares plus (ii) any Federal,
state and local income and employment tax liability incurred by the
Optionee or the Participant in connection with the option exercise or share
purchase.
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B. EFFECTIVE DATE AND TERM OF PLAN
1. The Plan shall become effective when adopted by the Board,
but no option granted under the Plan may be exercised, and no shares shall
be issued under the Plan, until the Plan is approved by the Corporation's
shareholders. If such shareholder approval is not obtained within twelve
(12) months after the date of the Board's adoption of the Plan, then all
options previously granted under the Plan shall terminate and cease to be
outstanding, and no further options shall be granted and no shares shall be
issued under the Plan. Subject to such limitation, the Plan Administrator
may grant options and issue shares under the Plan at any time after the
effective date of the Plan and before the date fixed herein for termination
of the Plan.
2. The Plan shall terminate upon the earliest of (i) December
1, 2010, (ii) the date on which all shares available for issuance under the
Plan shall have been issued, or (iii) the termination of all outstanding
options in connection with a Corporate Transaction. All options and
unvested stock issuances outstanding at that time under the Plan shall
continue to have full force and effect in accordance with the provisions of
the documents evidencing such options or issuances.
C. AMENDMENT OF THE PLAN
1. The Board shall have complete and exclusive power and
authority to amend or modify the Plan in any or all respects, except as set
forth herein. However, no such amendment or modification shall adversely
affect the rights and obligations with respect to options or unvested stock
issuances at the time outstanding under the Plan unless the Optionee or the
Participant consents to such amendment or modification. In addition, the
Board shall not amend the Plan, without approval of the shareholders of the
Corporation, in a manner which would:
a. Cause Options which are intended to qualify as
Incentive Options to fail to qualify;
b. increase the number of shares of Common Stock issuable
over the term of the Plan;
c. cause the Plan to fail to meet the requirements of Rule
16b-3; or
d. violate applicable law.
2. Options may be granted under the Option Grant Program and
shares may be issued under the Stock Issuance Program which are in each
instance in excess of the number of shares of Common Stock then available
for issuance under the Plan, provided any excess shares actually issued
under those programs shall be held in escrow until there is obtained
shareholder approval of an amendment sufficiently increasing the number of
shares of Common Stock available for issuance under the Plan. If such
shareholder approval is not obtained within
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twelve (12) months after the date the first such excess issuances are made,
then (i) any unexercised options granted on the basis of such excess shares
shall terminate and cease to be outstanding and (ii) the Corporation shall
promptly refund to the Optionees and the Participants the exercise or purchase
price paid for any excess shares issued under the Plan and held in escrow,
together with interest (at the applicable Short Term Federal Rate) for the
period the shares were held in escrow, and such shares shall thereupon be
automatically canceled and cease to be outstanding.
D. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares
of Common Stock under the Plan shall be used for general corporate
purposes.
E. WITHHOLDING
The Corporation's obligation to deliver shares of Common Stock upon
the exercise of any options or upon the vesting of any shares issued under
the Plan shall be subject to the satisfaction of all applicable Federal,
state and local income and employment tax withholding requirements.
F. REGULATORY APPROVALS
The implementation of the Plan, the granting of any options under the
Plan and the issuance of any shares of Common Stock (i) upon the exercise
of any option or (ii) under the Stock Issuance Program shall be subject to
the Corporation's procurement of all approvals and permits required by
regulatory authorities having jurisdiction over the Plan, the options
granted under it and the shares of Common Stock issued pursuant to it.
G. NO EMPLOYMENT OR SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee or the Participant
any right to continue in Service for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the
Corporation (or any Parent or Subsidiary employing or retaining such
person) or of the Optionee or the Participant, which rights are hereby
expressly reserved by each, to terminate such person's Service at any time
for any reason, with or without cause.
H. INDEMNIFICATION
In addition to such other rights as they may have as directors or as
members of the Committee, the members of the Plan Administrator shall be
indemnified by the Corporation against the reasonable expenses, including
attorneys' fees, actually and necessarily incurred in connection with the
defense of any action, suit, or proceeding, and in connection with any
appeal therein, to which they or any of them may be a party by reason of
any action or failure to act under or in connection with this Plan or any
option or stock award granted hereunder, and against all amounts paid by
them in settlement thereof (provided such settlement is approved by
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independent legal counsel selected by the Corporation) or paid by them in
satisfaction of a judgement in any such action, suit, or proceeding, except
in relation to matters as to which it shall be finally adjudged in such
action, suit, or proceeding that such member of the Plan Administrator is
liable for gross negligence or willful misconduct in the performance of his
duties; provided that within 60 days after institution of any such action,
suit, or proceeding (or within 30 days after service upon such member of
legal process in such case, if later) a member of the Plan Administrator
shall in writing offer the Corporation the opportunity, at its own expense,
to handle and defend the same.
I. RULE 16b-3
With respect to Participates subject to Rule 16b-3, transactions under
the Plan are intended to comply with all applicable provisions of Rule 16b-
3. To the extent any provision of the Plan or action by the Plan
Administrator fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Plan Administrator.
J. RELATIONSHIP TO OTHER PLANS
Nothing in this Plan shall prevent the Corporation (or any Parent or
Subsidiary) from adopting or continuing other or additional compensation
arrangements, including without limitation plans providing for the granting
of restricted stock awards, options, cash, or Common Stock performance
bonuses. Grants under the Plan may form a part of or otherwise be related
to such other or additional compensation arrangements.
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APPENDIX
The following definitions shall be in effect under the Plan:
Board shall mean the Corporation's Board of Directors.
Code shall mean the Internal Revenue Code of 1986, as amended.
Committee shall mean a committee of two (2) or more non-employee Board
members appointed by the Board to exercise one or more administrative
functions under the Plan.
Common Stock shall mean the Corporation's common stock.
Corporate Transaction shall mean either of the following shareholder
approved transactions to which the Corporation is a party:
(a) a merger or consolidation in which securities possessing more
than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or
persons different from the persons holding those securities
immediately prior to such transaction, or
(b) the sale, transfer or other disposition of all or substantially
all of the Corporation's assets in complete liquidation or dissolution
of the Corporation.
Corporation shall mean Saiph Corporation, a Nevada corporation.
Disability shall mean the inability of the Optionee or the Participant
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment and shall be determined by the
Plan Administrator on the basis of such medical evidence as the Plan
Administrator deems warranted under the circumstances.
Employee shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and
direction of the employer entity as to both the work to be performed and
the manner and method of performance.
Exercise Date shall mean the date on which the Corporation shall have
received written notice of the option exercise.
Fair Market Value per share of Common Stock on any relevant date shall
be determined in accordance with the following provisions:
(a) If the Common Stock is at the time traded on the NASDAQ National
Market, then the Fair Market Value shall be the closing selling price
per share of Common Stock on the date in question, as such price is
reported by the National Association of Securities
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Dealers on the NASDAQ National Market or any successor system. If
there is no closing selling price for the Common Stock on the date in
question, then the Fair Market Value shall be the closing selling price
on the last preceding date for which such quotation exists.
(b) If the Common Stock is at the time listed on any Stock Exchange,
then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question on the Stock Exchange
determined by the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape
of transactions on such exchange. If there is no closing selling
price for the Common Stock on the date in question, then the Fair
Market Value shall be the closing selling price on the last preceding
date for which such quotation exists.
(c) If the Common Stock is at the time neither listed on any Stock
Exchange nor traded on the NASDAQ National Market, then the Fair
Market Value shall be determined by the Plan Administrator after
taking into account such factors as the Plan Administrator shall deem
appropriate.
Incentive Option shall mean an option which satisfies the requirements
of Code Section 422.
Involuntary Termination shall mean the termination of the Service of
any individual which occurs by reason of :
(a) such individual's involuntary dismissal or discharge by the
Corporation for reasons other than Misconduct, or
(b) such individual's voluntary resignation following (A) a change in
his or her position with the Corporation which materially reduces his
or her level of responsibility, (B) a reduction in his or her level of
compensation (including base salary, fringe benefits and target
bonuses under any corporate performance based bonus or incentive
programs) by more than fifteen percent (15%), or (c) a relocation of
such individual's place of employment by more than fifty (50) miles,
provided and only if such change, reduction or relocation is effected
without the individual's consent.
The Plan Administrator shall be entitled to revise the definition of
Involuntary Termination and Misconduct with respect to individual
Optionees or Participants under the Plan.
Misconduct shall mean the commission of any act of fraud, embezzlement
or dishonesty by the Optionee or Participant, any unauthorized use or
disclosure by such person of confidential information or trade secrets of
the Corporation (or any Parent or Subsidiary), or any other intentional
misconduct by such person adversely affecting the business or affairs of
the Corporation (or any Parent or Subsidiary) in a material manner. The
foregoing definition
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shall not be deemed to be inclusive of all the acts or omissions which the
Corporation (or any Parent or Subsidiary) may consider as grounds for the
dismissal or discharge of any Optionee, Participant or other person in the
Service of the Corporation (or any Parent or Subsidiary).
1934 Act shall mean the Securities Exchange Act of 1934, as amended.
Non-Statutory Option shall mean an option not intended to satisfy the
requirements of Code Section 422.
Option Grant Program shall mean the option grant program in effect
under the Plan.
Optionee shall mean any person to whom an option is granted under the
Plan.
Parent shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the
time of the determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.
Participant shall mean any person who is issued shares of Common Stock
under the Stock Issuance Program.
Plan shall mean the Corporation's 2002 Stock Option/Stock Issuance
Plan, as set forth in this document.
Plan Administrator shall mean either the Board or the Committee acting
in its capacity as administrator of the Plan.
Rule 16b-3 shall mean Rule 16b-3 promulgated under the 1934 Act by the
U.S. Securities and Exchange Commission, as amended, or any successor rule
in effect from time to time.
Service shall mean the provision of services to the Corporation (or
any Parent or Subsidiary) by a person in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or
independent advisor, except to the extent otherwise specifically provided
in the documents evidencing the option grant.
Stock Exchange shall mean either the American Stock Exchange or the
New York Stock Exchange.
Stock Issuance Agreement shall mean the agreement entered into by the
Corporation and the Participant at the time of issuance of shares of Common
Stock under the Stock Issuance Program.
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Stock Issuance Program shall mean the stock issuance program in effect
under the Plan.
Subsidiary shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain
owns, at the time of the determination, stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock in
one of the other corporations in such chain.
10% Shareholder shall mean the owner of stock (as determined under
Code Section 424(d)) possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Corporation (or any
Parent or Subsidiary).
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