EXHIBIT 99.1
2000 STOCK OPTION PLAN
OF
CORCEPT THERAPEUTICS INCORPORATED
1. PURPOSES OF THE PLAN
The purposes of this 2000 Stock Option Plan (the "Plan") of
Corcept Therapeutics Incorporated, a Delaware corporation (the "Company"), are
to:
(a) Encourage selected employees, directors and consultants to
improve operations and increase profits of the Company;
(b) Encourage selected employees, directors and consultants to
accept or continue employment or association with the Company or its Affiliates;
and
(c) Increase the interest of selected employees, directors and
consultants in the Company's welfare through participation in the growth in
value of the common stock, par value $0.001 per share, of the Company (the
"Common Stock").
Options granted under this Plan ("Options") may be "incentive
stock options" ("ISOs") intended to satisfy the requirements of Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), or "nonqualified
options" ("NQOs").
2. ELIGIBLE PERSONS
Every person who at the date of grant of an Option is an
employee of the Company or of any Affiliate (as defined below) of the Company is
eligible to receive NQOs or ISOs under this Plan. Every person who at the date
of grant is a consultant to, or nonemployee director of, the Company or any
Affiliate (as defined below) of the Company is eligible to receive NQOs under
this Plan. The term "Affiliate" as used in the Plan means a parent or subsidiary
corporation as defined in the applicable provisions (currently Sections 424(e)
and (f), respectively) of the Code. The term "employee" refers to individuals
who are treated as employees for federal income tax purposes, and includes an
officer or director who is an employee of the Company. The term "consultant"
includes persons employed by, or otherwise affiliated with, a consulting firm.
3. STOCK SUBJECT TO THIS PLAN
Subject to the provisions of Section 6.1.1 of the Plan, the
total number of shares of stock which may be issued under options granted
pursuant to this Plan and the
total number of shares provided for issuance under this Plan shall be the lesser
of (i) 2,000,000 shares of Common Stock and (ii) the maximum number of shares as
calculated under section 260.140.45 of Chapter 3 of Title 10 of the California
Code of Regulations. The shares covered by the portion of any grant under the
Plan which expires unexercised shall become available again for grants under the
Plan.
4. ADMINISTRATION
4.1 General. This Plan shall be administered by the Board of
Directors of the Company (the "Board") or, either in its entirety or only
insofar as required pursuant to Section 4.2 hereof, by a committee (the
"Committee") of at least two Board members to which administration of the Plan,
or of part of the Plan, is delegated (in either case, the "Administrator").
4.2 Public Company. From and after such time as the Company
registers a class of equity securities under Section 12 of the Securities
Exchange Act of 1934 (the "Exchange Act"), the Committee shall consist of Board
members who are "Non-Employee Directors" as defined under Rule 16b-3 promulgated
by the Securities and Exchange Commission ("Rule 16b-3"), or any successor rule
thereto.
4.3 Authority of Administrator. Subject to the other
provisions of this Plan, the Administrator shall have the authority, in its
discretion: (i) to grant Options; (ii) to determine the fair market value of the
Common Stock subject to Options; (iii) to determine the exercise price of
Options granted; (iv) to determine the persons (each an "Optionee") to whom, and
the time or times at which, Options shall be granted, and the number of shares
subject to each Option; (v) to interpret this Plan; (vi) to prescribe, amend,
and rescind rules and regulations relating to this Plan; (vii) to determine the
terms and provisions of each Option granted (which need not be identical),
including but not limited to, the time or times at which Options shall be
exercisable; (viii) with the consent of the Optionee, to modify or amend any
Option; (ix) to accelerate or to defer (with the consent of the Optionee) the
exercise date of any Option; (x) to authorize any person to execute on behalf of
the Company any instrument evidencing the grant of an Option; and (xi) to make
all other determinations deemed necessary or advisable for the administration of
this Plan. The Administrator may delegate nondiscretionary administrative duties
to such employees of the Company as it deems proper.
4.4 Interpretation by Administrator. All questions of
interpretation, implementation, and application of this Plan shall be determined
by the Administrator. Such determinations shall be final and binding on all
persons.
4.5 Rule 16b-3. With respect to persons subject to Section 16
of the Exchange Act, if any, transactions under this Plan are intended to comply
with the applicable conditions of Rule 16b-3, or any successor rule thereto. To
the extent any
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provision of this Plan or action by the Administrator fails to so comply, it
shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Administrator. Notwithstanding the above, it shall be the
responsibility of such persons, not of the Company or the Administrator, to
comply with the requirements of Section 16 of the Exchange Act; and neither the
Company nor the Administrator shall be liable if this Plan or any transaction
under this Plan fails to comply with the applicable conditions of Rule 16b-3 or
any successor rule thereto, or if any such person incurs any liability under
Section 16 of the Exchange Act.
5. GRANTING OF OPTIONS; OPTION AGREEMENT
5.1 Termination of Plan. No options shall be granted under
this Plan after ten years from the date of adoption of this Plan by the Board.
5.2 Stock Option Agreement. Each Option shall be evidenced by
a written stock option agreement (the "Option Agreement"), in form satisfactory
to the Company, executed by the Company and the person to whom such Option is
granted; provided, however, that the failure by the Company, the Optionee, or
both, to execute the Option Agreement shall not invalidate the granting of an
Option, although the exercise of each option shall be subject to Section 6.1.3.
5.3 Type of Option. The Option Agreement shall specify whether
each Option it evidences is an NQO or an ISO.
5.4 Early Approval of Grants. Subject to Section 6.3.3 with
respect to ISOs, the Administrator may approve the grant of Options under this
Plan to persons who are expected to become employees, directors or consultants
of the Company, but are not employees, directors or consultants at the date of
approval, with such grant to specify whether it is effective immediately or
effective only on such person becoming an employee, director or consultant.
6. TERMS AND CONDITIONS OF OPTIONS
Each Option granted under this Plan shall be subject to the
terms and conditions set forth in Section 6.1. NQOs shall be also subject to the
terms and conditions set forth in Section 6.2, but not those set forth in
Section 6.3. ISOs shall also be subject to the terms and conditions set forth in
Section 6.3, but not those set forth in Section 6.2.
6.1 Terms and Conditions to Which All Options Are Subject.
Options granted under this Plan shall be subject to the following terms and
conditions:
6.1.1 Changes in Capital Structure. Subject to Section
6.1.2, if the stock of the Company is changed by reason of a stock split,
reverse stock split, stock
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dividend, or recapitalization, combination or reclassification,
appropriate adjustments shall be made by the Board in (a) the number and class
of shares of stock subject to this Plan and each Option outstanding under this
Plan, and (b) the exercise price of each outstanding Option; provided, however,
that the Company shall not be required to issue fractional shares as a result of
any such adjustments. Each such adjustment shall be subject to approval by the
Board in its absolute discretion.
6.1.2 Corporate Transactions.
(a) Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, the Administrator shall
notify each Optionee at least 30 days prior to such proposed action. To the
extent not previously exercised, all Options will terminate immediately prior to
the consummation of such proposed action.
(b) Merger or Asset Sale. In the event of (i) a sale
or other disposition of all or substantially all of the assets of the Company,
or (ii) a merger, consolidation, reorganization, sale or similar transaction or
series of related transactions in which the holders of the Company's outstanding
shares immediately before such transaction or series of transactions do not,
immediately after such transaction or series of transactions, retain stock
representing a majority of the voting power of the surviving entity:
(i) Options. If the successor entity to the
Company (including as a "successor" any purchaser of substantially all of the
assets of the Company), or a parent or subsidiary of the successor entity, does
not assume an Option or substitute an equivalent option for an Option, the
Optionee whose Option is not assumed or substituted for shall have the right to
exercise the Option as to 100% of the shares of Common Stock covered by the
Option, including shares as to which it would not otherwise be exercisable. If
an Option is exercisable in lieu of assumption or substitution in the event of a
merger, sale of assets or other transaction, the Administrator shall notify the
Optionee that the Option shall be fully exercisable for a period of at least 15
days from the date of such notice, and the Option shall terminate upon the
expiration of such period. For the purposes of this paragraph, an Option shall
be considered assumed if, following the merger, sale of assets, or other
transaction, the new option confers the right to purchase or receive, for each
share of Common Stock subject to the Option immediately prior to the merger,
sale of assets, or other transaction, the consideration (whether stock, cash, or
other securities or property) received in such transaction by holders of Common
Stock for each share held on the effective date of the transaction (and if
holders were offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding shares); provided, however, that
if such consideration received was not solely common stock of the successor
entity or its parent entity, the Option shall also be deemed assumed if the
Administrator, with the consent of
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the successor corporation, provides for the consideration to be received
upon the exercise of the Option, for each share of Common Stock subject to the
Option, to be solely common stock of the successor entity or its parent entity
equal in fair market value to the per share consideration received by holders of
Common Stock in the merger, sale of assets or other transaction.
(ii) Shares Subject to Right of Repurchase. Any
shares purchased upon exercise of an Option which are subject to a right of
repurchase of the Company shall be exchanged for the consideration (whether
stock, cash, or other securities or property) received in the merger, asset sale
or other transaction by the holders of the Company's Common Stock for each share
held on the effective date of the transaction, as described in the preceding
paragraph; provided, however, that if the consideration received by the holders
of the Company's Common Stock is not solely common stock, and the Administrator
provides, pursuant to paragraph (b)(i) above, that holders of Options shall
receive common stock of the successor entity or its parent entity upon exercise
of the Options, then any shares subject to a right of repurchase shall also be
exchanged for common stock of the successor or its parent. If in such exchange
the Optionee receives shares of stock of the successor or a parent or subsidiary
of such successor entity, and if the successor entity has agreed to assume or
substitute for Options as provided in paragraph (b)(i) above, such exchanged
shares shall continue to be subject to a right of repurchase as provided in the
Optionee's Stock Option Plan stock purchase agreement. If, as provided in the
preceding paragraph, the Optionee shall have the right to exercise an Option as
to all of the shares of Common Stock covered thereby, all shares that are
subject to a right of repurchase of the Company shall be released from such
right of repurchase and shall be fully vested.
6.1.3 Time of Option Exercise. Subject to Section 5 and
Section 6.3.4, Options granted under this Plan shall be exercisable (a)
immediately as of the effective date of the Option Agreement granting the
Option, or (b) in accordance with a schedule related to the date of the grant of
the Option, the date of first employment or service, or such other date as may
be set by the Administrator (in any case, the "Vesting Base Date") and specified
in the Option Agreement relating to such Option; provided, however, that with
respect to Options granted to employees who are not officers or directors, the
right to exercise an Option must vest at the rate of at least 20% per year over
five years from the date the Option was granted. Options granted to officers,
directors or consultants may become fully exercisable, subject to reasonable
conditions such as continued employment or service, at any time or during any
period established by the Board of the Administrator in accordance with this
Plan. In any case, no Option shall be exercisable until a written Option
Agreement in form satisfactory to the Company is executed by the Company and the
Optionee.
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6.1.4 Option Grant Date. Except in the case of grants
contingent on the beginning of employment or other service, as described in
Section 5.4, the date of grant of an Option under this Plan shall be the date as
of which the Administrator approves the grant.
6.1.5 Nonassignability of Option Rights. Except as otherwise
determined by the Administrator and expressly set forth in the Option Agreement,
no Option granted under this Plan shall be assignable or otherwise transferable
by the Optionee except by will or by the laws of descent and distribution.
During the life of the Optionee, except as otherwise determined by the
Administrator and expressly set forth in the Optionee's Option Agreement, an
Option shall be exercisable only by the Optionee.
6.1.6 Payment. Except as provided below, payment in full, in
cash, shall be made for all stock purchased at the time written notice of
exercise of an Option is given to the Company, and proceeds of any payment shall
constitute general funds of the Company. At the time an Option is granted or
exercised, the Administrator, in the exercise of its absolute discretion after
considering any tax or accounting consequences, may authorize any one or more of
the following additional methods of payment or such other methods as are
approved by the Administrator:
(a) Acceptance of the Optionee's full recourse
promissory note for all or part of the Option price, payable on such terms and
bearing such interest rate as determined by the Administrator (but in no event
less than the minimum interest rate specified under the Code at which no
additional interest would be imputed and in no event more than the maximum
interest rate allowed under applicable usury laws), which promissory note may be
either secured or unsecured in such manner as the Administrator shall approve
(including, without limitation, by a security interest in the shares of the
Company);
(b) Delivery (actual or constructive) by the Optionee
of Common Stock already owned by the Optionee for all or part of the Option
price, provided the value (determined as set forth in Section 6.1.11) of such
Common Stock is equal on the date of exercise to the Option price, or such
portion thereof as the Optionee is authorized to pay by delivery of such stock;
provided, however, that if an Optionee has exercised any portion of any Option
granted by the Company by delivery of Common Stock, the Optionee may not, within
six months following such exercise, exercise any Option granted under this Plan
by delivery of Common Stock without the consent of the Administrator; and
(c) Any other form of legal consideration determined
and permitted by the Administrator.
6.1.7 Termination of Employment.
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(a) If, for any reason other than death, disability
or termination for "cause" (as defined below), an Optionee ceases to be employed
by the Company or any of its Affiliates (such event being called a
"Termination"), Options held at the date of Termination (to the extent then
exercisable) may be exercised in whole or in part at any time within three
months of the date of such Termination, or such other period of not less than 30
days after the date of such Termination as is specified in the Option Agreement
(but in no event after the Expiration Date).
(b) If an Optionee dies while employed by the Company
or an Affiliate or within the period that the Option remains exercisable after
Termination, Options then held (to the extent then exercisable) may be
exercised, in whole or in part, by the Optionee, by the Optionee's personal
representative, or by the person to whom the Option is transferred by devise or
the laws of descent and distribution, at any time within 12 months after the
death of the Optionee, or such other period of not less than six months from the
date of Termination as is specified in the Option Agreement (but in no event
after the Expiration Date).
(c) If an Optionee ceases to be employed by the
Company as a result of his or her disability, the Optionee may, but only within
six months after the date of Termination (and in no event after the Expiration
Date), exercise the Option to the extent otherwise entitled to exercise it at
the date of 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 ISO such ISO shall automatically convert to an NQO on the day three
months and one day following such Termination.
(d) If an Optionee is terminated for "cause" all
Options then held by such Optionee shall terminate and no longer be exercisable
as of the date of Termination. For purposes of this Section 6.1.7, "cause" shall
mean Termination (i) by reason of Optionee's commission of a felony, misdemeanor
or other illegal conduct involving dishonesty, fraud or other matters of moral
turpitude, (ii) by reason of Optionee's dishonesty towards, fraud upon, or
deliberate injury or attempted injury to the Company or any of its Affiliates,
or (iii) by reason of Optionee's willfully engaging in misconduct which is
materially and demonstrably injurious to the Company or any of its Affiliates.
(e) To the extent that the Optionee was not entitled
to exercise the Option at the date of Termination or if the Optionee does not
exercise such Option to the extent so entitled within the time specified herein,
the Option shall terminate, and the shares covered by such Option shall revert
to the Plan.
(f) For purposes of this Section 6.1.7, "employment"
includes service as an employee, a director or a consultant. For purposes of
this Section 6.1.7, an Optionee's employment shall not be deemed to terminate by
reason of sick
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leave, military leave or other leave of absence approved by the Administrator,
if the period of any such leave does not exceed three months or, if longer, if
the Optionee's right to reemployment by the Company or any Affiliate is
guaranteed either contractually or by statute.
6.1.8 Repurchase of Stock.
(a) At the option of the Administrator, the stock to be
delivered pursuant to the exercise of any Option granted to an employee,
director or consultant under this Plan may be subject to a right of repurchase
in favor of the Company with respect to any employee, or director or consultant
whose employment, or director or consulting relationship with the Company is
terminated. With respect to shares issued to employees who are not officers or
directors, such right of repurchase shall be exercisable on the following terms,
as the Administrator may determine in the grant of the Option:
(i) at the Option exercise price and (i) shall lapse
at the rate of at least 20% per year over five years from the date the Option is
granted (without regard to the date it was exercised or becomes exercisable),
and must be exercised for cash or cancellation of purchase money indebtedness
within three months of such termination and (ii) if the right is assignable by
the Company, the assignee must pay the Company upon assignment of the right
(unless the assignee is a 100% owned subsidiary of the Company or is an
Affiliate) cash equal to the difference between the Option exercise price and
the value (determined as set forth in Section 6.1.11) of the stock to be
purchased if the Option exercise price is less than such value; and/or
(ii) at the higher of the Option exercise price or
the value (determined as set forth in Section 6.1.11) of the stock being
purchased on the date of termination, and must be exercised for cash or
cancellation of purchase money indebtedness within three months of termination
of employment (or in the case of securities issued upon exercise of options
after the date of termination, within three months after the date of exercise),
and such right shall terminate when the Company's securities become publicly
traded.
(b) Any shares which are issued to an officer, director
or consultant of the Company or an affiliate of the Company may be subject to a
right of repurchase on the terms set forth above, or on any other terms
determined by the Administrator, including terms containing additional or
greater restrictions, in the absolute discretion of the Administrator.
(c) Determination of the number of shares subject to any
such right of repurchase shall be made as of the date the employee's employment
by, director's director relationship with, or consultant's consulting
relationship with, the
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Company terminates, not as of the date that any Option granted to such employee,
director or consultant is thereafter exercised.
6.1.9 Withholding and Employment Taxes. At the time of
exercise of an Option or at such other time or times as the amount of such
obligations becomes determinable (the "Tax Date"), the Optionee shall remit to
the Company in cash all applicable federal and state withholding and employment
taxes due by reason of the exercise of an Option, the disposition of Common
Stock acquired through exercise of an Option, or the lapse of rights to
repurchase Common Stock. The Administrator may, in its absolute discretion after
considering any tax or accounting consequences, permit an Optionee to (i)
deliver a full recourse promissory note on such terms as the Administrator deems
appropriate, (ii) tender to the Company previously owned shares of Stock or
other securities of the Company, or (iii) have shares of Common Stock which are
acquired upon exercise of the Option withheld by the Company to pay some or all
of the amount of tax that is required by law to be withheld by the Company as a
result of the exercise of such Option, the disposition of Common Stock acquired
through exercise of an Option, or the lapse of rights to repurchase Common
Stock, subject to the following limitations:
(a) Any election pursuant to clause (ii) above, where the
Optionee is tendering Common Stock issued pursuant to the exercise of an Option,
shall require that such shares be held at least six months prior to the Tax
Date.
(b) Any of the foregoing limitations may be waived (or
additional limitations may be imposed) by the Administrator, in its absolute
discretion, if the Administrator determines that such foregoing limitations are
not required (or that such additional limitations are required) in order that
the transaction shall be exempt from Section 16(b) of the Exchange Act pursuant
to Rule 16b-3, or any successor rule thereto. In addition, any of the foregoing
limitations may be waived by the Administrator, in its sole discretion, if the
Administrator determines that Rule 16b-3, or any successor rule thereto, is not
applicable to the exercise of the Option by the Optionee or for any other
reason.
(c) Any securities tendered or withheld in accordance
with this Section 6.1.9 shall be valued by the Company as of the Tax Date.
6.1.10 Other Provisions. Each Option granted under this Plan
may contain such other terms, provisions, and conditions not inconsistent with
this Plan as may be determined by the Administrator, and each ISO granted under
this Plan shall include such provisions and conditions as are necessary to
qualify the Option as an "incentive stock option" within the meaning of Section
422 of the Code. If Options provide for a right of first refusal in favor of the
Company with respect to stock acquired by employees, directors or consultants,
such Options shall provide that the right of first
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refusal shall terminate upon the closing of the Company's initial registered
public offering to the public generally.
6.1.11 Determination of Value. For purposes of the Plan, the
value of Common Stock or other securities of the Company shall be determined as
follows:
(a) If the stock of the Company is listed on any
established stock exchange or a national market system, including without
limitation the Nasdaq Stock Market, its fair market value shall be the closing
sales price for such stock or the closing bid if no sales were reported, as
quoted on such system or exchange for the date the value is to be determined (or
if there are no sales for such date, then for the last preceding business day on
which there were sales), as reported in the Wall Street Journal or similar
publication.
(b) If the stock of the Company is regularly quoted by
a recognized securities dealer but selling prices are not reported, its fair
market value shall be the mean between the high bid and low asked prices for the
stock on the date the value is to be determined (or if there are no quoted
prices for the date of grant, then for the last preceding business day on which
there were quoted prices).
(c)In the absence of an established market for the
stock, the fair market value thereof shall be determined in good faith by the
Administrator, by consideration of such factors as the Administrator in its
discretion deems appropriate among the recent issue price of other securities of
the Company, the Company's net worth, prospective earning power, dividend-paying
capacity, and other relevant factors, including the goodwill of the Company, the
economic outlook in the Company's industry, the Company's position in the
industry and its management, and the values of stock of other corporations in
the same or a similar line of business.
6.1.12 Option Term. Subject to Section 6.3.5, no Option shall
be exercisable more than ten years after the date of grant, or such lesser
period of time as is set forth in the Option Agreement (the end of the maximum
exercise period stated in the stock option agreement is referred to in this Plan
as the "Expiration Date").
6.1.13 Exercise Price. The exercise price of any Option
granted to any person who owns, directly or by attribution under Section 424(d)
of the Code, stock possessing more than ten percent of the total combined voting
power of all classes of stock of the Company or of any Affiliate (a "Ten Percent
Stockholder") shall in no event be less than 110% of the fair market value
(determined in accordance with Section 6.1.11) of the stock covered by the
Option at the time the Option is granted.
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6.1.14 Limits on Grants for Qualified Incentive-Based
Compensation. The Company may not issue Options covering in the aggregate more
than 500,000 shares of Common Stock to any one participant in any calendar year.
6.2 Exercise Price of NQOs. Except as set forth in Section 6.1.13,
the exercise price of any NQO granted under this Plan shall be not less than 85%
of the fair market value (determined in accordance with Section 6.1.11) of the
stock subject to the Option on the date of grant.
6.3 Terms and Conditions to Which Only ISOs Are Subject. Options
granted under this Plan which are designated as ISOs shall be subject to the
following terms and conditions:
6.3.1 Exercise Price. Except as set forth in Section 6.1.13,
the exercise price of an ISO shall be determined in accordance with the
applicable provisions of the Code and shall in no event be less than the fair
market value (determined in accordance with Section 6.1.11) of the stock covered
by the Option at the time the Option is granted or deemed granted under Section
6.3.3.
6.3.2 Disqualifying Dispositions. If stock acquired by
exercise of an ISO granted pursuant to this Plan is disposed of in a
"disqualifying disposition" within the meaning of Section 422 of the Code, the
holder of the stock immediately before the disposition shall promptly notify the
Company in writing of the date and terms of the disposition and shall provide
such other information regarding the Option as the Company may reasonably
require.
6.3.3 Grant Date. If an ISO is granted in anticipation of
employment as provided in Section 5.4, the Option shall be deemed granted,
without further approval, on the date the grantee assumes the employment
relationship forming the basis for such grant, and, in addition, satisfies all
requirements of this Plan for Options granted on that date.
6.3.4 Vesting. Notwithstanding any other provision of this
Plan, ISOs granted under all incentive stock option plans of the Company and its
subsidiaries may not "vest" for more than $100,000 in fair market value of stock
(measured on the grant dates(s)) in any calendar year. For purposes of the
preceding sentence, an option "vests" when it first becomes exercisable. If, by
their terms, such ISOs taken together would vest to a greater extent in a
calendar year, and unless otherwise provided by the Administrator, the vesting
limitation described above shall be applied by deferring the exercisability of
those ISOs or portions of ISOs which have the highest per share exercise prices;
but in no event shall more than $100,000 in fair market value of stock (measured
on the grant date(s)) vest in any calendar year. The ISOs or portions of ISOs
whose exercisability is so deferred shall become exercisable on the first day of
the first
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subsequent calendar year during which they may be exercised, as determined by
applying these same principles and all other provisions of this Plan including
those relating to the expiration and termination of ISOs. In no event, however,
will the operation of this Section 6.3.4 cause an ISO to vest before its terms
or, having vested, cease to be vested.
6.3.5 Term. Notwithstanding Section 6.1.12, no ISO granted to
any Ten Percent Stockholder shall be exercisable more than five years after the
date of grant.
7. MANNER OF EXERCISE
7.1 Written Notice; Payment. An Optionee wishing to exercise
an Option shall give written notice to the Company at its principal executive
office, to the attention of the officer of the Company designated by the
Administrator, accompanied by payment of the exercise price as provided in
Section 6.1.6. The date the Company receives written notice of an exercise
hereunder accompanied by payment of the exercise price will be considered as the
date such Option was exercised.
7.2 Delivery of Stock. Promptly after receipt of written
notice of exercise of an Option, the Company shall, without stock issue or stock
transfer taxes to the Optionee or other person entitled to exercise the Option,
deliver to the Optionee or such other person a certificate or certificates for
the requisite number of shares of stock or register such Optionee as a
stockholder by book entry. An Optionee or permitted transferee of an Optionee
shall not have any privileges as a stockholder with respect to any shares of
stock covered by the Option until the date of issuance (as evidenced by the
appropriate entry on the books of the Company or a duly authorized transfer
agent) of such shares.
8. EMPLOYMENT OR CONSULTING RELATIONSHIP
Nothing in this Plan or any Option granted thereunder shall
interfere with or limit in any way the right of the Company or of any of its
Affiliates to terminate any Optionee's employment or consulting relationship at
any time, nor confer upon any Optionee any right to continue in the employ of,
or consult with, the Company or any of its Affiliates, nor interfere in any way
with provisions in the Company's charter documents or applicable law relating to
the election, appointment, terms of office, and removal of members of the Board.
9. FINANCIAL INFORMATION
The Company shall provide to each Optionee during the period
such Optionee holds an outstanding Option, and to each holder of Common Stock
acquired upon exercise of Options granted under the Plan for so long as such
person is a holder of such Common Stock, annual financial statements of the
Company as prepared either by the Company or independent certified public
accountants of the Company. Such financial
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statements shall include, at a minimum, a balance sheet and an income statement,
and shall be delivered as soon as practicable following the end of the Company's
fiscal year. The provisions of this Section 9 shall not apply with respect to
Optionees who are key employees of the Company whose duties in connection with
the Company assures them access to information equivalent to the information
provided in the financial statements.
10. CONDITIONS UPON ISSUANCE OF SHARES
Shares of Common Stock shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended (the "Securities Act").
11. NONEXCLUSIVITY OF THE PLAN
The adoption of the Plan shall not be construed as creating
any limitations on the power of the Company to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options other than under the Plan.
12. MARKET STANDOFF
Each Optionee, if so requested by the Company or any
representative of the underwriters in connection with any registration of the
offering of any securities of the Company under the Securities Act, shall not
sell or otherwise transfer any shares of Common Stock acquired upon exercise of
Options during the 180-day period following the effective date of a registration
statement of the Company filed under the Securities Act; provided, however, that
such restriction shall apply only to the first two registration statements of
the Company to become effective under the Securities Act which include
securities to be sold on behalf of the Company to the public in an underwritten
public offering under the Securities Act. The Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restriction
until the end of such 180-day period.
13. AMENDMENTS TO PLAN
The Board may at any time amend, alter, suspend or discontinue
this Plan. Without the consent of an Optionee, no amendment, alteration,
suspension or discontinuance may adversely affect outstanding Options except to
conform this Plan and ISOs granted under this Plan to the requirements of
federal or other tax laws relating to incentive stock options. No amendment,
alteration, suspension or discontinuance shall require stockholder approval
unless (a) stockholder approval is required to preserve incentive stock option
treatment for federal income tax purposes, or (b) shareholder
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approval is required to preserve option grants as "qualified performance-based
compensation" under Section 162(m) of the Code.
14. EFFECTIVE DATE OF PLAN
This Plan shall become effective upon adoption by the Board;
provided, however, that no Option shall be exercisable unless and until written
consent of the stockholders of the Company, or approval of stockholders of the
Company voting at a validly called stockholders' meeting, is obtained within 12
months after adoption by the Board. If such stockholder approval is not obtained
within such time, Options granted hereunder shall terminate and be of no force
and effect from and after expiration of such 12-month period. Options may be
granted and exercised under this Plan only after there has been compliance with
all applicable federal and state securities laws.
Plan adopted by the Board of Directors on: October 6, 2000
Plan approved by Stockholders on: October 7, 2000.
Amendments increasing number of shares to 2,000,000 approved by the Board of
Directors on May 3, 2001 and by the Stockholders on May 7, 2001.
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