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8-K - FORM 8-K - Alexza Pharmaceuticals Inc. | d83916e8vk.htm |
EX-3.1 - EX-3.1 - Alexza Pharmaceuticals Inc. | d83916exv3w1.htm |
EX-10.2 - EX-10.2 - Alexza Pharmaceuticals Inc. | d83916exv10w2.htm |
Exhibit 10.1
Alexza
Pharmaceuticals, Inc.
2005 Equity Incentive Plan, as amended
2005 Equity Incentive Plan, as amended
1. | General. |
(a) Eligible Stock Award Recipients. The
persons eligible to receive Stock Awards are Employees,
Directors and Consultants.
(b) Available Stock Awards. The Plan
provides for the grant of the following Stock Awards:
(i) Incentive Stock Options, (ii) Nonstatutory Stock
Options, (iii) Stock Purchase Awards, (iv) Stock Bonus
Awards, (v) Stock Appreciation Rights, (vi) Stock Unit
Awards, and (vii) Other Stock Awards.
(c) Purpose. The Company, by means of the
Plan, seeks to secure and retain the services of the group of
persons eligible to receive Stock Awards as set forth in
Section 1(a), to provide incentives for such persons to
exert maximum efforts for the success of the Company and any
Affiliate and to provide a means by which such eligible
recipients may be given an opportunity to benefit from increases
in value of the Common Stock through the granting of Stock
Awards.
2. | Definitions. |
As used in the Plan, the following definitions shall apply to
the capitalized terms indicated below:
(a) Affiliate means (i) any
corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, provided each corporation
in the unbroken chain (other than the Company) 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, and
(ii) any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company,
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. The Board shall have the authority
to determine (i) the time or times at which the ownership
tests are applied, and (ii) whether Affiliate
includes entities other than corporations within the foregoing
definition.
(b) Board means the Board of Directors
of the Company.
(c) Capitalization Adjustment has the
meaning ascribed to that term in Section 10(a).
(d) Change in Control means the
occurrence, in a single transaction or in a series of related
transactions, of any one or more of the following events:
(i) any Exchange Act Person becomes the Owner, directly or
indirectly, of securities of the Company representing more than
fifty percent (50%) of the combined voting power of the
Companys then outstanding securities other than by virtue
of a merger, consolidation or similar transaction.
Notwithstanding the foregoing, a Change in Control shall not be
deemed to occur (A) on account of the acquisition of
securities of the Company by an investor, any affiliate thereof
or any other Exchange Act Person from the Company in a
transaction or series of related transactions the primary
purpose of which is to obtain financing for the Company through
the issuance of equity securities or (B) solely because the
level of Ownership held by any Exchange Act Person (the
Subject Person) exceeds the designated
percentage threshold of the outstanding voting securities as a
result of a repurchase or other acquisition of voting securities
by the Company reducing the number of shares outstanding,
provided that if a Change in Control would occur (but for the
operation of this sentence) as a result of the acquisition of
voting securities by the Company, and after such share
acquisition, the Subject Person becomes the Owner of any
additional voting securities that, assuming the repurchase or
other acquisition had not occurred, increases the percentage of
the then outstanding voting securities Owned by the Subject
Person over the designated percentage threshold, then a Change
in Control shall be deemed to occur;
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(ii) there is consummated a merger, consolidation or
similar transaction involving (directly or indirectly) the
Company and, immediately after the consummation of such merger,
consolidation or similar transaction, the stockholders of the
Company immediately prior thereto do not Own, directly or
indirectly, either (A) outstanding voting securities
representing more than fifty percent (50%) of the combined
outstanding voting power of the surviving Entity in such merger,
consolidation or similar transaction or (B) more than fifty
percent (50%) of the combined outstanding voting power of the
parent of the surviving Entity in such merger, consolidation or
similar transaction, in each case in substantially the same
proportions as their Ownership of the outstanding voting
securities of the Company immediately prior to such transaction;
(iii) the stockholders of the Company approve or the Board
approves a plan of complete dissolution or liquidation of the
Company, or a complete dissolution or liquidation of the Company
shall otherwise occur;
(iv) there is consummated a sale, lease, exclusive license
or other disposition of all or substantially all of the
consolidated assets of the Company and its Subsidiaries, other
than a sale, lease, license or other disposition of all or
substantially all of the consolidated assets of the Company and
its Subsidiaries to an Entity, more than fifty percent (50%) of
the combined voting power of the voting securities of which are
Owned by stockholders of the Company in substantially the same
proportions as their Ownership of the outstanding voting
securities of the Company immediately prior to such sale, lease,
license or other disposition; or
(v) individuals who, on the date this Plan is adopted by
the Board, are members of the Board (the Incumbent
Board) cease for any reason to constitute at least
a majority of the members of the Board; provided, however,
that if the appointment or election (or nomination for
election) of any new Board member was approved or recommended by
a majority vote of the members of the Incumbent Board then still
in office, such new member shall, for purposes of this Plan, be
considered as a member of the Incumbent Board.
The term Change in Control shall not include a sale of assets,
merger or other transaction effected exclusively for the purpose
of changing the domicile of the Company.
Notwithstanding the foregoing or any other provision of this
Plan, the definition of Change in Control (or any analogous
term) in an individual written agreement between the Company or
any Affiliate and the Participant shall supersede the foregoing
definition with respect to Stock Awards subject to such
agreement; provided, however, that if no definition of
Change in Control or any analogous term is set forth in such an
individual written agreement, the foregoing definition shall
apply.
(e) Code means the Internal Revenue Code
of 1986, as amended.
(f) Committee means a committee of one
(1) or more members of the Board to whom authority has been
delegated by the Board in accordance with Section 3(c).
(g) Common Stock means the common stock
of the Company.
(h) Company means Alexza
Pharmaceuticals, Inc., a Delaware corporation.
(i) Consultant means any person,
including an advisor, who is (i) engaged by the Company or
an Affiliate to render consulting or advisory services and is
compensated for such services, or (ii) serving as a member
of the Board of Directors of an Affiliate and is compensated for
such services. However, service solely as a Director, or payment
of a fee for such service, shall not cause a Director to be
considered a Consultant for purposes of the Plan.
(j) Continuous Service means that the
Participants service with the Company or an Affiliate,
whether as an Employee, Director or Consultant, is not
interrupted or terminated. A change in the capacity in which the
Participant renders service to the Company or an Affiliate as an
Employee, Consultant or Director or a change in the entity for
which the Participant renders such service, provided that there
is no interruption or termination of the Participants
service with the Company or an Affiliate, shall not terminate a
Participants Continuous Service;
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provided, however, if the corporation for which a
Participant is rendering service ceases to qualify as an
Affiliate, as determined by the Board in its sole discretion,
such Participants Continuous Service shall be considered
to have terminated on the date such corporation ceases to
qualify as an Affiliate. For example, a change in status from an
employee of the Company to a consultant of an Affiliate or to a
Director shall not constitute an interruption of Continuous
Service. To the extent permitted by law, the Board or the chief
executive officer of the Company, in that partys sole
discretion, may determine whether Continuous Service shall be
considered interrupted in the case of any leave of absence
approved by that party, including sick leave, military leave or
any other personal leave. Notwithstanding the foregoing, a leave
of absence shall be treated as Continuous Service for purposes
of vesting in a Stock Award only to such extent as may be
provided in the Companys leave of absence policy or in the
written terms of the Participants leave of absence.
(k) Corporate Transaction means the
occurrence, in a single transaction or in a series of related
transactions, of any one or more of the following events:
(i) a sale or other disposition of all or substantially
all, as determined by the Board in its sole discretion, of the
consolidated assets of the Company and its Subsidiaries;
(ii) a sale or other disposition of a majority of the
outstanding securities of the Company;
(iii) the consummation of a merger, consolidation or
similar transaction following which the Company is not the
surviving corporation; or
(iv) the consummation of a merger, consolidation or similar
transaction following which the Company is the surviving
corporation but the shares of Common Stock outstanding
immediately preceding the merger, consolidation or similar
transaction are converted or exchanged by virtue of the merger,
consolidation or similar transaction into other property,
whether in the form of securities, cash or otherwise.
(l) Covered Employee means the chief
executive officer and the four (4) other highest
compensated officers of the Company for whom total compensation
is required to be reported to stockholders under the Exchange
Act, as determined for purposes of Section 162(m) of the
Code.
(m) Director means a member of the Board.
(n) Disability means the permanent and
total disability of a person within the meaning of
Section 22(e)(3) of the Code.
(o) Employee means any person employed
by the Company or an Affiliate. However, service solely as a
Director, or payment of a fee for such services, shall not cause
a Director to be considered an Employee for purposes
of the Plan.
(p) Entity means a corporation,
partnership or other entity.
(q) Exchange Act means the Securities
Exchange Act of 1934, as amended.
(r) Exchange Act Person means any
natural person, Entity or group (within the meaning
of Section 13(d) or 14(d) of the Exchange Act), except that
Exchange Act Person shall not include (i) the
Company or any Subsidiary of the Company, (ii) any employee
benefit plan of the Company or any Subsidiary of the Company or
any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any Subsidiary of the
Company, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities,
(iv) an Entity Owned, directly or indirectly, by the
stockholders of the Company in substantially the same
proportions as their Ownership of stock of the Company; or
(v) any natural person, Entity or group (within
the meaning of Section 13(d) or 14(d) of the Exchange Act)
that, as of the effective date of the Plan as set forth in
Section 13, is the Owner, directly or indirectly, of
securities of the Company representing more than fifty percent
(50%) of the combined voting power of the Companys then
outstanding securities.
(s) Fair Market Value means, as of any
date, the value of the Common Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or traded on the Nasdaq National Market or the Nasdaq
SmallCap Market, the Fair Market Value of a share of Common
Stock shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such
exchange or
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market (or the exchange or market with the greatest volume of
trading in the Common Stock) on the date in question, as
reported in The Wall Street Journal or such other source
as the Board deems reliable. Unless otherwise provided by the
Board, if there is no closing sales price (or closing bid if no
sales were reported) for the Common Stock on the date in
question, then the Fair Market Value shall be the closing sales
price (or closing bid if no sales were reported) on the last
preceding date for which such quotation exists.
(ii) In the absence of such markets for the Common Stock,
the Fair Market Value shall be determined by the Board in good
faith.
(t) Incentive Stock Option means an
Option intended to qualify as an incentive stock option within
the meaning of Section 422 of the Code and the regulations
promulgated thereunder.
(u) IPO Date means the date of the
underwriting agreement between the Company and the
underwriter(s) managing the initial public offering of the
Common Stock, pursuant to which the Common Stock is priced for
the initial public offering.
(v) Non-Employee Director means a
Director who either (i) is not a current employee or
officer of the Company or an Affiliate, does not receive
compensation, either directly or indirectly, from the Company or
an Affiliate for services rendered as a consultant or in any
capacity other than as a Director (except for an amount as to
which disclosure would not be required under Item 404(a) of
Regulation S-K
promulgated pursuant to the Securities Act
(Regulation S-K)),
does not possess an interest in any other transaction for which
disclosure would be required under Item 404(a) of
Regulation S-K,
and is not engaged in a business relationship for which
disclosure would be required pursuant to Item 404(b) of
Regulation S-K;
or (ii) is otherwise considered a non-employee
director for purposes of
Rule 16b-3.
(w) Nonstatutory Stock Option means an
Option not intended to qualify as an Incentive Stock Option.
(x) 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.
(y) Option means an Incentive Stock
Option or a Nonstatutory Stock Option to purchase shares of
Common Stock granted pursuant to the Plan.
(z) Option Agreement means a written
agreement between the Company and an Optionholder evidencing the
terms and conditions of an Option grant. Each Option Agreement
shall be subject to the terms and conditions of the Plan.
(aa) Optionholder means a person to whom
an Option is granted pursuant to the Plan or, if applicable,
such other person who holds an outstanding Option.
(bb) Other Stock Award means an award
based in whole or in part by reference to the Common Stock which
is granted pursuant to the terms and conditions of
Section 7(f).
(cc) Other Stock Award Agreement means a
written agreement between the Company and a holder of an Other
Stock Award evidencing the terms and conditions of an Other
Stock Award grant. Each Other Stock Award Agreement shall be
subject to the terms and conditions of the Plan.
(dd) Outside Director means a Director
who either (i) is not a current employee of the Company or
an affiliated corporation (within the meaning of
Treasury Regulations promulgated under Section 162(m) of
the Code), is not a former employee of the Company or an
affiliated corporation who receives compensation for
prior services (other than benefits under a tax-qualified
retirement plan) during the taxable year, has not been an
officer of the Company or an affiliated corporation,
and does not receive remuneration from the Company or an
affiliated corporation, either directly or
indirectly, in any capacity other than as a Director, or
(ii) is otherwise considered an outside
director for purposes of Section 162(m) of the Code.
(ee) Own, Owned,
Owner, Ownership A person or Entity
shall be deemed to Own, to have Owned,
to be the Owner of, or to have acquired
Ownership of securities if such person or Entity,
directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise, has or shares voting
power, which includes the power to vote or to direct the voting,
with respect to such securities.
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(ff) Participant means a person to whom
a Stock Award is granted pursuant to the Plan or, if applicable,
such other person who holds an outstanding Stock Award.
(gg) Performance Criteria means the one
or more criteria that the Board shall select for purposes of
establishing the Performance Goals for a Performance Period. The
Performance Criteria that shall be used to establish such
Performance Goals may be based on any one of, or combination of,
the following: (i) earnings per share; (ii) earnings
before interest, taxes and depreciation; (iii) earnings
before interest, taxes, depreciation and amortization (EBITDA);
(iv) net earnings; (v) return on equity;
(vi) return on assets, investment, or capital employed;
(vii) operating margin; (viii) gross margin;
(ix) operating income; (x) net income (before or after
taxes); (xi) net operating income; (xii) net operating
income after tax; (xiii) pre- and after-tax income;
(xiv) pre-tax profit; (xv) operating cash flow;
(xvi) sales or revenue targets; (xvii) increases in
revenue or product revenue; (xvii) expenses and cost
reduction goals; (xix) improvement in or attainment of
expense levels; (xx) improvement in or attainment of
working capital levels; (xxi) economic value added;
(xxii) market share; (xxiii) cash flow;
(xxiv) cash flow per share; (xxv) share price
performance; (xxvi) debt reduction;
(xxvii) implementation or completion of projects or
processes; (xxviii) customer satisfaction;
(xxix) total stockholder return;
(xxx) stockholders equity; and (xxxi) other
measures of performance selected by the Board. Partial
achievement of the specified criteria may result in the payment
or vesting corresponding to the degree of achievement as
specified in the Stock Award Agreement. The Board shall, in its
sole discretion, define the manner of calculating the
Performance Criteria it selects to use for such Performance
Period.
(hh) Performance Goals means, for a
Performance Period, the one or more goals established by the
Board for the Performance Period based upon the Performance
Criteria. Performance Goals may be based on a Company-wide
basis, with respect to one or more business units, divisions,
Affiliates, or business segments, and in either absolute terms
or relative to the performance of one or more comparable
companies or a relevant index. The Board is authorized to make
adjustments in the method of calculating the attainment of
Performance Goals for a Performance Period as follows:
(i) to exclude restructuring
and/or other
nonrecurring charges; (ii) to exclude exchange rate
effects, as applicable, for
non-U.S. dollar
denominated net sales and operating earnings; (iii) to
exclude the effects of changes to generally accepted accounting
standards required by the Financial Accounting Standards Board;
(iv) to exclude the effects of any statutory adjustments to
corporate tax rates; and (v) to exclude the effects of any
extraordinary items as determined under generally
accepted accounting principles. The Board also retains the
discretion to reduce or eliminate the compensation or economic
benefit due upon attainment of Performance Goals.
(ii) Performance Period means the one or
more periods of time, which may be of varying and overlapping
durations, as the Committee may select, over which the
attainment of one or more Performance Goals will be measured for
the purpose of determining a Participants right to and the
payment of a Stock Award.
(jj) Performance Stock Award means an
award of shares of Common Stock which is granted pursuant to the
terms and conditions of Section 7(e).
(kk) Plan means this Alexza
Pharmaceuticals, Inc. 2005 Equity Incentive Plan.
(ll) Prior Plans means the
Companys 2001 Equity Incentive Plan and 2002 Equity
Incentive Plan in effect immediately prior to the effective date
of the Plan as set forth in Section 13.
(mm) Rule 16b-3
means
Rule 16b-3
promulgated under the Exchange Act or any successor to
Rule 16b-3,
as in effect from time to time.
(nn) Securities Act means the Securities
Act of 1933, as amended.
(oo) Stock Appreciation Right means a
right to receive the appreciation on Common Stock that is
granted pursuant to the terms and conditions of
Section 7(d).
(pp) Stock Appreciation Right Agreement
means a written agreement between the Company and a holder of a
Stock Appreciation Right evidencing the terms and conditions of
a Stock Appreciation Right grant. Each Stock Appreciation Right
Agreement shall be subject to the terms and conditions of the
Plan.
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(qq) Stock Award means any right granted
under the Plan, including an Option, a Stock Purchase Award,
Stock Bonus Award, a Stock Appreciation Right, a Stock Unit
Award, Performance Stock Award, or any Other Stock Award.
(rr) Stock Award Agreement means a
written agreement between the Company and a Participant
evidencing the terms and conditions of a Stock Award grant. Each
Stock Award Agreement shall be subject to the terms and
conditions of the Plan.
(ss) Stock Bonus Award means an award of
shares of Common Stock which is granted pursuant to the terms
and conditions of Section 7(b).
(tt) Stock Bonus Award Agreement means a
written agreement between the Company and a holder of a Stock
Bonus Award evidencing the terms and conditions of a Stock Bonus
Award grant. Each Stock Bonus Award Agreement shall be subject
to the terms and conditions of the Plan.
(uu) Stock Purchase Award means an award
of shares of Common Stock which is granted pursuant to the terms
and conditions of Section 7(a).
(vv) Stock Purchase Award Agreement
means a written agreement between the Company and a holder of a
Stock Purchase Award evidencing the terms and conditions of a
Stock Purchase Award grant. Each Stock Purchase Award Agreement
shall be subject to the terms and conditions of the Plan.
(ww) Stock Unit Award means a right to
receive shares of Common Stock which is granted pursuant to the
terms and conditions of Section 7(c).
(xx) Stock Unit Award Agreement means a
written agreement between the Company and a holder of a Stock
Unit Award evidencing the terms and conditions of a Stock Unit
Award grant. Each Stock Unit Award Agreement shall be subject to
the terms and conditions of the Plan.
(yy) Subsidiary means, with respect to
the Company, (i) any corporation of which more than fifty
percent (50%) of the outstanding capital stock having ordinary
voting power to elect a majority of the board of directors of
such corporation (irrespective of whether, at the time, stock of
any other class or classes of such corporation shall have or
might have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, Owned by
the Company, and (ii) any partnership in which the Company
has a direct or indirect interest (whether in the form of voting
or participation in profits or capital contribution) of more
than fifty percent (50%).
(zz) Ten Percent Stockholder means a
person who Owns (or is deemed to Own pursuant to
Section 424(d) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes
of stock of the Company or any Affiliate.
3. | Administration. |
(a) Administration by Board. The Board
shall administer the Plan unless and until the Board delegates
administration of the Plan to a Committee, as provided in
Section 3(c).
(b) Powers of Board. The Board shall have
the power, subject to, and within the limitations of, the
express provisions of the Plan:
(i) To determine the provisions of each Stock Award to the
extent not specified in the Plan.
(ii) To construe and interpret the Plan and Stock Awards
granted under it, and to establish, amend and revoke rules and
regulations for its administration. The Board, in the exercise
of this power, may correct any defect, omission or inconsistency
in the Plan or in any Stock Award Agreement, in a manner and to
the extent it shall deem necessary or expedient to make the Plan
fully effective.
(iii) To determine from time to time (1) which of the
persons eligible under the Plan shall be granted Stock Awards;
(2) when and how each Stock Award shall be granted;
(3) what type or combination of types of Stock Award shall
be granted; (4) the provisions of each Stock Award granted
(which need not be identical), including the time or times when
a person shall be permitted to receive cash or Common Stock
pursuant to a
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Stock Award; and (5) the number of shares of Common Stock
with respect to which a Stock Award shall be granted to each
such person.
(iv) To accelerate the time at which a Stock Award may
first be exercised or the time during which a Stock Award or any
part thereof will vest in accordance with the Plan,
notwithstanding the provisions in the Stock Award stating the
time at which it may first be exercised or the time during which
it will vest.
(v) To effect, at any time and from time to time, with the
consent of any adversely affected Optionholder, (1) the
reduction of the exercise price of any outstanding Option under
the Plan; (2) the cancellation of any outstanding Option
under the Plan and the grant in substitution therefor of
(a) a new Option under the Plan or another equity plan of
the Company covering the same or a different number of shares of
Common Stock, (b) a Stock Purchase Award, (c) a Stock
Bonus Award, (d) a Stock Appreciation Right, (e) a
Stock Unit Award, (f) an Other Stock Award, (g) cash,
and/or
(h) other valuable consideration (as determined by the
Board, in its sole discretion); or (3) any other action
that is treated as a repricing under generally accepted
accounting principles.
(vi) To amend the Plan or a Stock Award as provided in
Section 11.
(vii) To terminate or suspend the Plan as provided in
Section 12.
(viii) Generally, to exercise such powers and to perform
such acts as the Board deems necessary or appropriate to promote
the best interests of the Company which are not in conflict with
the provisions of the Plan.
(ix) To adopt such procedures and
sub-plans as
are necessary or appropriate to permit participation in the Plan
by Employees who are foreign nationals or employed outside the
United States.
(c) Delegation to Committee.
(i) General. The Board may delegate some
or all of the administration of the Plan to a Committee or
Committees. If administration is delegated to a Committee, the
Committee shall have, in connection with the administration of
the Plan, the powers theretofore possessed by the Board that
have been delegated to the Committee, including the power to
delegate to a subcommittee any of the administrative powers the
Committee is authorized to exercise (and references in this Plan
to the Board shall thereafter be to the Committee or
subcommittee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted
from time to time by the Board. The Board may retain the
authority to concurrently administer the Plan with the Committee
and may, at any time, revest in the Board some or all of the
powers previously delegated.
(ii) Section 162(m) and
Rule 16b-3
Compliance. In the sole discretion of the Board,
the Committee may consist solely of two (2) or more Outside
Directors, in accordance with Section 162(m) of the Code,
and/or
solely of two or more Non-Employee Directors, in accordance with
Rule 16b-3.
In addition, the Board or the Committee, in its sole discretion,
may (1) delegate to a committee of one or more members of
the Board who need not be Outside Directors the authority to
grant Stock Awards to eligible persons who are either
(a) not then Covered Employees and are not expected to be
Covered Employees at the time of recognition of income resulting
from such Stock Award, or (b) not persons with respect to
whom the Company wishes to comply with Section 162(m) of
the Code,
and/or
(2) delegate to a committee of one or more members of the
Board who need not be Non-Employee Directors the authority to
grant Stock Awards to eligible persons who are not then subject
to Section 16 of the Exchange Act.
(d) Delegation to an Officer. The Board
may delegate to one or more Officers of the Company the
authority to do one or both of the following (i) designate
Officers and Employees of the Company or any of its Subsidiaries
to be recipients of Stock Awards and the terms thereof, and
(ii) determine the number of shares of Common Stock to be
subject to such Stock Awards granted to such Officers and
Employees; provided, however, that the Board resolutions
regarding such delegation shall specify the total number of
shares of Common Stock that may be subject to the Stock Awards
granted by such Officer and that such Officer may not grant a
Stock Award to himself or herself. Notwithstanding anything to
the contrary in this Section 3(d), the Board may not
delegate to an Officer authority to determine the Fair Market
Value of the Common Stock pursuant to Section 2(s)(ii)
above.
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(e) Effect of Boards Decision. All
determinations, interpretations and constructions made by the
Board in good faith shall not be subject to review by any person
and shall be final, binding and conclusive on all persons.
4. | Shares Subject to the Plan. |
(a) Share Reserve. Subject to the
provisions of Section 10(a) relating to Capitalization
Adjustments, the number of shares of Common Stock that may be
issued pursuant to Stock Awards shall not exceed, in the
aggregate, fifteen million seven hundred forty-seven eight
hundred and forty-seven (15,747,847) shares of Common Stock,
which number includes any shares of Common Stock that
(i) are issuable pursuant to stock awards outstanding under
the Companys Prior Plans as of the effective date of the
Plan (as set forth in Section 13), and (ii) but for
the amendment and restatement of the Prior Plans as of the
effective date of this Plan, would otherwise have reverted to
the share reserves of the Prior Plans. In addition, the number
of shares of Common Stock available for issuance under the Plan
shall automatically increase on January 1st of each
year commencing in 2012 and ending on (and including)
January 1, 2015, in an amount equal to the lesser of
(i) two percent (2.0%) of the total number of shares of
Common Stock outstanding on December 31st of the
preceding calendar year, or (ii) one million (1,000,000)
shares of Common Stock. Notwithstanding the foregoing, the Board
may act prior to the first day of any calendar year, to provide
that there shall be no increase in the share reserve for such
calendar year or that the increase in the share reserve for such
calendar year shall be a lesser number of shares of Common Stock
than would otherwise occur pursuant to the preceding sentence.
(b) Reversion of Shares to the Share
Reserve. If any Stock Award shall for any reason
expire or otherwise terminate, in whole or in part, without
having been exercised in full, if any shares of Common Stock
issued to a Participant pursuant to a Stock Award are forfeited
to or repurchased by the Company, including, but not limited to,
any repurchase or forfeiture caused by the failure to meet a
contingency or condition required for the vesting of such
shares, or if any shares of Common Stock are cancelled in
accordance with the cancellation and regrant provisions of
Section 3(b)(v), then the shares of Common Stock not issued
under such Stock Award, or forfeited to or repurchased by the
Company, shall revert to and again become available for issuance
under the Plan. If any shares subject to a Stock Award are not
delivered to a Participant because such shares are withheld for
the payment of taxes or the Stock Award is exercised through a
reduction of shares subject to the Stock Award (i.e.,
net exercised), the number of shares that are not
delivered to the Participant shall remain available for issuance
under the Plan. If the exercise price of any Stock Award is
satisfied by tendering shares of Common Stock held by the
Participant (either by actual delivery or attestation), then the
number of shares so tendered shall remain available for issuance
under the Plan. Notwithstanding anything to the contrary in this
Section 4(b), subject to the provisions of
Section 10(a) relating to Capitalization Adjustments the
aggregate maximum number of shares of Common Stock that may be
issued pursuant to the exercise of Incentive Stock Options shall
be fifteen million seven hundred forty-seven eight hundred and
forty-seven (15,747,847) shares of Common Stock plus the amount
of any increase in the number of shares that may be available
for issuance pursuant to Stock Awards pursuant to
Section 4(a).
(c) Source of Shares. The stock issuable
under the Plan shall be shares of authorized but unissued or
reacquired Common Stock, including shares repurchased by the
Company on the open market.
5. | Eligibility. |
(a) Eligibility for Specific Stock
Awards. Incentive Stock Options may be granted
only to Employees. Stock Awards other than Incentive Stock
Options may be granted to Employees, Directors and Consultants.
(b) Ten Percent Stockholders. A Ten
Percent Stockholder shall not be granted an Incentive Stock
Option unless the exercise price of such Option is at least one
hundred ten percent (110%) of the Fair Market Value of the
Common Stock on the date of grant and the Option is not
exercisable after the expiration of five (5) years from the
date of grant.
(c) Section 162(m) Limitation on Annual
Grants. Subject to the provisions of
Section 10(a) relating to Capitalization Adjustments, at
such time as the Company may be subject to the applicable
provisions of Section 162(m) of the Code, no Employee shall
be eligible to be granted Stock Awards whose value is determined
by reference to an increase over an exercise or strike price of
at least one hundred percent (100%) of the Fair Market
8
Value of the Common Stock on the date the Stock Award is granted
covering more than five hundred thousand (500,000) shares of
Common Stock during any calendar year.
(d) Consultants. A Consultant shall not
be eligible for the grant of a Stock Award if, at the time of
grant, a
Form S-8
Registration Statement under the Securities Act
(Form S-8)
is not available to register either the offer or the sale of the
Companys securities to such Consultant because of the
nature of the services that the Consultant is providing to the
Company, because the Consultant is not a natural person, or
because of any other rule governing the use of
Form S-8.
6. | Option Provisions. |
Each Option shall be in such form and shall contain such terms
and conditions as the Board shall deem appropriate. All Options
shall be separately designated Incentive Stock Options or
Nonstatutory Stock Options at the time of grant, and, if
certificates are issued, a separate certificate or certificates
shall be issued for shares of Common Stock purchased on exercise
of each type of Option. The provisions of separate Options need
not be identical; provided, however, that each Option
Agreement shall include (through incorporation of provisions
hereof by reference in the Option or otherwise) the substance of
each of the following provisions:
(a) Term. The Board shall determine the
term of an Option; provided, however, that subject to the
provisions of Section 5(b) regarding Ten Percent
Stockholders, no Incentive Stock Option shall be exercisable
after the expiration of ten (10) years from the date of
grant.
(b) Exercise Price of an Incentive Stock
Option. Subject to the provisions of
Section 5(b) regarding Ten Percent Stockholders, the
exercise price of each Incentive Stock Option shall be not less
than one hundred percent (100%) of the Fair Market Value of the
Common Stock subject to the Option on the date the Option is
granted. Notwithstanding the foregoing, an Incentive Stock
Option may be granted with an exercise price lower than that set
forth in the preceding sentence if such Option is granted
pursuant to an assumption or substitution for another option in
a manner consistent with the provisions of Section 424(a)
of the Code.
(c) Exercise Price of a Nonstatutory Stock
Option. The exercise price of each Nonstatutory
Stock Option shall be not less than one hundred percent (100%)
of the Fair Market Value of the Common Stock subject to the
Option on the date the Option is granted. Notwithstanding the
foregoing, a Nonstatutory Stock Option may be granted with an
exercise price lower than that set forth in the preceding
sentence if such Option is granted pursuant to an assumption or
substitution for another option in a manner consistent with the
provisions of Section 424(a) of the Code.
(d) Consideration. The purchase price of
Common Stock acquired pursuant to the exercise of an Option
shall be paid, to the extent permitted by applicable law and as
determined by the Board in its sole discretion, by any
combination of the methods of payment set forth below. The Board
shall have the authority to grant Options that do not permit all
of the following methods of payment (or otherwise restrict the
ability to use certain methods) and to grant Options that
require the consent of the Company to utilize a particular
method of payment. The methods of payment permitted by this
Section 6(d) are:
(i) by cash or check;
(ii) pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board
that, prior to the issuance of Common Stock, results in either
the receipt of cash (or check) by the Company or the receipt of
irrevocable instructions to pay the aggregate exercise price to
the Company from the sales proceeds; provided, however,
that such program is not in violation of the prohibition on
the extension of credit to the Companys executive officers
and Directors under Section 402 of the Sarbanes-Oxley Act
of 2002, in the opinion of counsel acceptable to the Company;
(iii) by delivery to the Company (either by actual delivery
or attestation) of shares of Common Stock;
(iv) by a net exercise arrangement pursuant to
which the Company will reduce the number of shares of Common
Stock issued upon exercise by the largest whole number of shares
with a Fair Market Value that does not exceed the aggregate
exercise price; provided, however, the Company shall
accept a
9
cash or other payment from the Participant to the extent of any
remaining balance of the aggregate exercise price not satisfied
by such reduction in the number of whole shares to be issued;
provided, however, shares of Common Stock will no longer
be outstanding under an Option and will not be exercisable
thereafter to the extent that (i) shares are used to pay
the exercise price pursuant to the net exercise,
(ii) shares are delivered to the Participant as a result of
such exercise, and (iii) shares are withheld to satisfy tax
withholding obligations; or
(v) in any other form of legal consideration that may be
acceptable to the Board.
(e) Transferability of Options. The Board
may, in its sole discretion, impose such limitations on the
transferability of Options as the Board shall determine. In the
absence of such a determination by the Board to the contrary,
the following restrictions on the transferability of Options
shall apply:
(i) Restrictions on Transfer. An Option
shall not be transferable except by will or by the laws of
descent and distribution and shall be exercisable during the
lifetime of the Optionholder only by the Optionholder.
(ii) Domestic Relations
Orders. Notwithstanding the foregoing, an Option
may be transferred pursuant to a domestic relations order.
(iii) Beneficiary
Designation. Notwithstanding the foregoing, the
Optionholder may, by delivering written notice to the Company,
in a form provided by or otherwise satisfactory to the Company,
designate a third party who, in the event of the death of the
Optionholder, shall thereafter be entitled to exercise the
Option.
(f) Vesting Generally. The total number
of shares of Common Stock subject to an Option may vest and
therefore become exercisable in periodic installments that may
or may not be equal. The Option may be subject to such other
terms and conditions on the time or times when it may or may not
be exercised (which may be based on performance or other
criteria) as the Board may deem appropriate. The vesting
provisions of individual Options may vary. The provisions of
this Section 6(f) are subject to any Option provisions
governing the minimum number of shares of Common Stock as to
which an Option may be exercised.
(g) Termination of Continuous Service. In
the event that an Optionholders Continuous Service
terminates (other than upon the Optionholders death or
Disability), the Optionholder may exercise his or her Option (to
the extent that the Optionholder was entitled to exercise such
Option as of the date of termination of Continuous Service) but
only within such period of time ending on the earlier of
(i) the date three (3) months following the
termination of the Optionholders Continuous Service (or
such longer or shorter period specified in the Option
Agreement), or (ii) the expiration of the term of the
Option as set forth in the Option Agreement. If, after
termination of Continuous Service, the Optionholder does not
exercise his or her Option within the time specified herein or
in the Option Agreement (as applicable), the Option shall
terminate.
(h) Extension of Termination Date. An
Optionholders Option Agreement may provide that if the
exercise of the Option following the termination of the
Optionholders Continuous Service (other than upon the
Optionholders death or Disability or upon a Change in
Control) would be prohibited at any time solely because the
issuance of shares of Common Stock would violate the
registration requirements under the Securities Act, then the
Option shall terminate on the earlier of (i) the expiration
of a period of three (3) months after the termination of
the Optionholders Continuous Service during which the
exercise of the Option would not be in violation of such
registration requirements, or (ii) the expiration of the
term of the Option as set forth in the Option Agreement.
(i) Disability of Optionholder. In the
event that an Optionholders Continuous Service terminates
as a result of the Optionholders Disability, the
Optionholder may exercise his or her Option (to the extent that
the Optionholder was entitled to exercise such Option as of the
date of termination of Continuous Service), but only within such
period of time ending on the earlier of (i) the date twelve
(12) months following such termination of Continuous
Service (or such longer or shorter period specified in the
Option Agreement), or (ii) the expiration of the term of
the Option as set forth in the Option Agreement. If, after
termination of
10
Continuous Service, the Optionholder does not exercise his or
her Option within the time specified herein or in the Option
Agreement (as applicable), the Option shall terminate.
(j) Death of Optionholder. In the event
that (i) an Optionholders Continuous Service
terminates as a result of the Optionholders death, or
(ii) the Optionholder dies within the period (if any)
specified in the Option Agreement after the termination of the
Optionholders Continuous Service for a reason other than
death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date
of death) by the Optionholders estate, by a person who
acquired the right to exercise the Option by bequest or
inheritance or by a person designated to exercise the option
upon the Optionholders death, but only within the period
ending on the earlier of (i) the date eighteen
(18) months following the date of death (or such longer or
shorter period specified in the Option Agreement), or
(ii) the expiration of the term of such Option as set forth
in the Option Agreement. If, after the Optionholders
death, the Option is not exercised within the time specified
herein or in the Option Agreement (as applicable), the Option
shall terminate.
(k) Early Exercise. The Option may
include a provision whereby the Optionholder may elect at any
time before the Optionholders Continuous Service
terminates to exercise the Option as to any part or all of the
shares of Common Stock subject to the Option prior to the full
vesting of the Option. Any unvested shares of Common Stock so
purchased may be subject to a repurchase option in favor of the
Company or to any other restriction the Board determines to be
appropriate. The Company shall not be required to exercise its
repurchase option until at least six (6) months (or such
longer or shorter period of time necessary to avoid a charge to
earnings for financial accounting purposes) have elapsed
following exercise of the Option unless the Board otherwise
specifically provides in the Option.
7. | Provisions of Stock Awards other than Options. |
(a) Stock Purchase Awards. Each Stock
Purchase Award Agreement shall be in such form and shall contain
such terms and conditions as the Board shall deem appropriate.
At the Boards election, shares of Common Stock may be
(i) held in book entry form subject to the Companys
instructions until any restrictions relating to the Stock
Purchase Award lapse; or (ii) evidenced by a certificate,
which certificate shall be held in such form and manner as
determined by the Board. The terms and conditions of Stock
Purchase Award Agreements may change from time to time, and the
terms and conditions of separate Stock Purchase Award Agreements
need not be identical; provided, however, that each Stock
Purchase Award Agreement shall include (through incorporation of
the provisions hereof by reference in the agreement or
otherwise) the substance of each of the following provisions:
(i) Purchase Price. At the time of the
grant of a Stock Purchase Award, the Board will determine the
price to be paid by the Participant for each share subject to
the Stock Purchase Award. To the extent required by applicable
law, the price to be paid by the Participant for each share of
the Stock Purchase Award will not be less than the par value of
a share of Common Stock.
(ii) Consideration. At the time of the
grant of a Stock Purchase Award, the Board will determine the
consideration permissible for the payment of the purchase price
of the Stock Purchase Award. The purchase price of Common Stock
acquired pursuant to the Stock Purchase Award shall be paid
either: (i) in cash or by check at the time of purchase,
(ii) at the discretion of the Board, according to a
deferred payment or other similar arrangement with the
Participant, (iii) by past or future services rendered to
the Company or an Affiliate, or (iv) in any other form of
legal consideration that may be acceptable to the Board in its
sole discretion and permissible under applicable law.
(iii) Vesting. Shares of Common Stock
acquired under a Stock Purchase Award may be subject to a share
repurchase right or option in favor of the Company in accordance
with a vesting schedule to be determined by the Board.
(iv) Termination of Participants Continuous
Service. In the event that a Participants
Continuous Service terminates, the Company shall have the right,
but not the obligation, to repurchase or otherwise reacquire,
any or all of the shares of Common Stock held by the Participant
that have not vested as of the date of termination under the
terms of the Stock Purchase Award Agreement. At the Boards
election, the price paid for all shares of Common Stock so
repurchased or reacquired by the Company may be at the lesser
of: (i) the
11
Fair Market Value on the relevant date, or (ii) the
Participants original cost for such shares. The Company
shall not be required to exercise its repurchase or
reacquisition option until at least six (6) months (or such
longer or shorter period of time necessary to avoid a charge to
earnings for financial accounting purposes) have elapsed
following the Participants purchase of the shares of stock
acquired pursuant to the Stock Purchase Award unless otherwise
determined by the Board or provided in the Stock Purchase Award
Agreement.
(v) Transferability. Rights to purchase
or receive shares of Common Stock granted under a Stock Purchase
Award shall be transferable by the Participant only upon such
terms and conditions as are set forth in the Stock Purchase
Award Agreement, as the Board shall determine in its sole
discretion, and so long as Common Stock awarded under the Stock
Purchase Award remains subject to the terms of the Stock
Purchase Award Agreement.
(b) Stock Bonus Awards. Each Stock Bonus
Award Agreement shall be in such form and shall contain such
terms and conditions as the Board shall deem appropriate. At the
Boards election, shares of Common Stock may be
(i) held in book entry form subject to the Companys
instructions until any restrictions relating to the Stock Bonus
Award lapse; or (ii) evidenced by a certificate, which
certificate shall be held in such form and manner as determined
by the Board. The terms and conditions of Stock Bonus Award
Agreements may change from time to time, and the terms and
conditions of separate Stock Bonus Award Agreements need not be
identical, provided, however, that each Stock Bonus Award
Agreement shall include (through incorporation of provisions
hereof by reference in the agreement or otherwise) the substance
of each of the following provisions:
(i) Consideration. A Stock Bonus Award
may be awarded in consideration for (i) past or future
services rendered to the Company or an Affiliate, or
(ii) any other form of legal consideration that may be
acceptable to the Board in its sole discretion and permissible
under applicable law.
(ii) Vesting. Shares of Common Stock
awarded under the Stock Bonus Award Agreement may be subject to
forfeiture to the Company in accordance with a vesting schedule
to be determined by the Board.
(iii) Termination of Participants Continuous
Service. In the event a Participants
Continuous Service terminates, the Company may receive via a
forfeiture condition, any or all of the shares of Common Stock
held by the Participant which have not vested as of the date of
termination of Continuous Service under the terms of the Stock
Bonus Award Agreement.
(iv) Transferability. Rights to acquire
shares of Common Stock under the Stock Bonus Award Agreement
shall be transferable by the Participant only upon such terms
and conditions as are set forth in the Stock Bonus Award
Agreement, as the Board shall determine in its sole discretion,
so long as Common Stock awarded under the Stock Bonus Award
Agreement remains subject to the terms of the Stock Bonus Award
Agreement.
(c) Stock Unit Awards. Each Stock Unit
Award Agreement shall be in such form and shall contain such
terms and conditions as the Board shall deem appropriate. The
terms and conditions of Stock Unit Award Agreements may change
from time to time, and the terms and conditions of separate
Stock Unit Award Agreements need not be identical, provided,
however, that each Stock Unit Award Agreement shall include
(through incorporation of the provisions hereof by reference in
the agreement or otherwise) the substance of each of the
following provisions:
(i) Consideration. At the time of grant
of a Stock Unit Award, the Board will determine the
consideration, if any, to be paid by the Participant upon
delivery of each share of Common Stock subject to the Stock Unit
Award. The consideration to be paid (if any) by the Participant
for each share of Common Stock subject to a Stock Unit Award may
be paid in any form of legal consideration that may be
acceptable to the Board in its sole discretion and permissible
under applicable law.
(ii) Vesting. At the time of the grant of
a Stock Unit Award, the Board may impose such restrictions or
conditions to the vesting of the Stock Unit Award as it, in its
sole discretion, deems appropriate.
(iii) Payment. A Stock Unit Award may be
settled by the delivery of shares of Common Stock, their cash
equivalent, any combination thereof or in any other form of
consideration, as determined by the Board and contained in the
Stock Unit Award Agreement.
12
(iv) Additional Restrictions. At the time
of the grant of a Stock Unit Award, the Board, as it deems
appropriate, may impose such restrictions or conditions that
delay the delivery of the shares of Common Stock (or their cash
equivalent) subject to a Stock Unit Award after the vesting of
such Stock Unit Award.
(v) Dividend Equivalents. Dividend
equivalents may be credited in respect of shares of Common Stock
covered by a Stock Unit Award, as determined by the Board and
contained in the Stock Unit Award Agreement. At the sole
discretion of the Board, such dividend equivalents may be
converted into additional shares of Common Stock covered by the
Stock Unit Award in such manner as determined by the Board. Any
additional shares covered by the Stock Unit Award credited by
reason of such dividend equivalents will be subject to all the
terms and conditions of the underlying Stock Unit Award
Agreement to which they relate.
(vi) Termination of Participants Continuous
Service. Except as otherwise provided in the
applicable Stock Unit Award Agreement, such portion of the Stock
Unit Award that has not vested will be forfeited upon the
Participants termination of Continuous Service.
(d) Stock Appreciation Rights. Each Stock
Appreciation Right Agreement shall be in such form and shall
contain such terms and conditions as the Board shall deem
appropriate. The terms and conditions of Stock Appreciation
Right Agreements may change from time to time, and the terms and
conditions of separate Stock Appreciation Right Agreements need
not be identical; provided, however, that each Stock
Appreciation Right Agreement shall include (through
incorporation of the provisions hereof by reference in the
agreement or otherwise) the substance of each of the following
provisions:
(i) Strike Price and Calculation of
Appreciation. Each Stock Appreciation Right will
be denominated in shares of Common Stock equivalents. The
appreciation distribution payable on the exercise of a Stock
Appreciation Right will be not greater than an amount equal to
the excess of (i) the aggregate Fair Market Value (on the
date of the exercise of the Stock Appreciation Right) of a
number of shares of Common Stock equal to the number of share of
Common Stock equivalents in which the Participant is vested
under such Stock Appreciation Right, and with respect to which
the Participant is exercising the Stock Appreciation Right on
such date, over (ii) an amount (the strike price) that will
be determined by the Board at the time of grant of the Stock
Appreciation Right.
(ii) Vesting. At the time of the grant of
a Stock Appreciation Right, the Board may impose such
restrictions or conditions to the vesting of such Stock
Appreciation Right as it, in its sole discretion, deems
appropriate.
(iii) Exercise. To exercise any
outstanding Stock Appreciation Right, the Participant must
provide written notice of exercise to the Company in compliance
with the provisions of the Stock Appreciation Right Agreement
evidencing such Stock Appreciation Right.
(iv) Payment. The appreciation
distribution in respect to a Stock Appreciation Right may be
paid by the delivery of shares of Common Stock, in cash, any
combination thereof or in any other form of consideration, as
determined by the Board and contained in the Stock Appreciation
Right Agreement evidencing such Stock Appreciation Right.
(v) Termination of Continuous Service. In
the event that a Participants Continuous Service
terminates, the Participant may exercise his or her Stock
Appreciation Right (to the extent that the Participant was
entitled to exercise such Stock Appreciation Right as of the
date of termination) but only within such period of time ending
on the earlier of (i) the date three (3) months
following the termination of the Participants Continuous
Service (or such longer or shorter period specified in the Stock
Appreciation Right Agreement), or (ii) the expiration of
the term of the Stock Appreciation Right as set forth in the
Stock Appreciation Right Agreement. If, after termination, the
Participant does not exercise his or her Stock Appreciation
Right within the time specified herein or in the Stock
Appreciation Right Agreement (as applicable), the Stock
Appreciation Right shall terminate.
(e) Performance Stock Awards. A
Performance Stock Award is any Stock Award that may be granted,
may vest, or may be exercised based upon service conditions,
upon the attainment during a Performance Period of certain
Performance Goals, or both. The length of any Performance
Period, the Performance Goals to be achieved
13
during the Performance Period, and the measure of whether and to
what degree such Performance Goals have been attained shall be
conclusively determined by the Board in its sole discretion. The
maximum benefit to be received by any individual in any calendar
year attributable to Performance Stock Awards shall not exceed
the value of five hundred thousand (500,000) shares of Common
Stock.
(f) Other Stock Awards. Other forms of
Stock Awards valued in whole or in part by reference to, or
otherwise based on, Common Stock may be granted either alone or
in addition to Stock Awards provided for under Section 6
and the preceding provisions of this Section 7. Subject to
the provisions of the Plan, the Board shall have sole and
complete authority to determine the persons to whom and the time
or times at which such Other Stock Awards will be granted, the
number of shares of Common Stock (or the cash equivalent
thereof) to be granted pursuant to such Other Stock Awards and
all other terms and conditions of such Other Stock Awards.
8. | Covenants of the Company. |
(a) Availability of Shares. During the
terms of the Stock Awards, the Company shall keep available at
all times the number of shares of Common Stock required to
satisfy such Stock Awards.
(b) Securities Law Compliance. The
Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may
be required to grant Stock Awards and to issue and sell shares
of Common Stock upon exercise of the Stock Awards; provided,
however, that this undertaking shall not require the Company
to register under the Securities Act the Plan, any Stock Award
or any Common Stock issued or issuable pursuant to any such
Stock Award. If, after reasonable efforts, the Company is unable
to obtain from any such regulatory commission or agency the
authority that counsel for the Company deems necessary for the
lawful issuance and sale of Common Stock under the Plan, the
Company shall be relieved from any liability for failure to
issue and sell Common Stock upon exercise of such Stock Awards
unless and until such authority is obtained.
9. | Miscellaneous. |
(a) Use of Proceeds. Proceeds from the
sale of shares of Common Stock pursuant to Stock Awards shall
constitute general funds of the Company.
(b) Stockholder Rights. No Participant
shall be deemed to be the holder of, or to have any of the
rights of a holder with respect to, any shares of Common Stock
subject to such Stock Award unless and until such Participant
has satisfied all requirements for exercise of the Stock Award
pursuant to its terms.
(c) No Employment or Other Service
Rights. Nothing in the Plan, any Stock Award
Agreement or other instrument executed thereunder or any Stock
Award granted pursuant thereto shall confer upon any Participant
any right to continue to serve the Company or an Affiliate in
the capacity in effect at the time the Stock Award was granted
or shall affect the right of the Company or an Affiliate to
terminate (i) the employment of an Employee with or without
notice and with or without cause, (ii) the service of a
Consultant pursuant to the terms of such Consultants
agreement with the Company or an Affiliate, or (iii) the
service of a Director pursuant to the Bylaws of the Company or
an Affiliate, and any applicable provisions of the corporate law
of the state in which the Company or the Affiliate is
incorporated, as the case may be.
(d) Incentive Stock Option $100,000
Limitation. To the extent that the aggregate Fair
Market Value (determined at the time of grant) of Common Stock
with respect to which Incentive Stock Options are exercisable
for the first time by any Optionholder during any calendar year
(under all plans of the Company and any Affiliates) exceeds one
hundred thousand dollars ($100,000), the Options or portions
thereof that exceed such limit (according to the order in which
they were granted) shall be treated as Nonstatutory Stock
Options, notwithstanding any contrary provision of the
applicable Option Agreement(s).
(e) Investment Assurances. The Company
may require a Participant, as a condition of exercising or
acquiring Common Stock under any Stock Award, (i) to give
written assurances satisfactory to the Company as to the
Participants knowledge and experience in financial and
business matters
and/or to
employ a purchaser representative reasonably satisfactory to the
Company who is knowledgeable and experienced in financial and
business matters and that he or she is capable of evaluating,
alone or together with the purchaser representative, the merits
and risks of exercising the Stock Award; and (ii) to give
written assurances satisfactory to the Company stating that the
Participant is acquiring Common Stock subject to the Stock Award
for the Participants own account
14
and not with any present intention of selling or otherwise
distributing the Common Stock. The foregoing requirements, and
any assurances given pursuant to such requirements, shall be
inoperative if (i) the issuance of the shares upon the
exercise or acquisition of Common Stock under the Stock Award
has been registered under a then currently effective
registration statement under the Securities Act, or (ii) as
to any particular requirement, a determination is made by
counsel for the Company that such requirement need not be met in
the circumstances under the then applicable securities laws. The
Company may, upon advice of counsel to the Company, place
legends on stock certificates issued under the Plan as such
counsel deems necessary or appropriate in order to comply with
applicable securities laws, including, but not limited to,
legends restricting the transfer of the Common Stock.
(f) Withholding Obligations. To the
extent provided by the terms of a Stock Award Agreement, the
Company may, in its sole discretion, satisfy any federal, state
or local tax withholding obligation relating to a Stock Award by
any of the following means (in addition to the Companys
right to withhold from any compensation paid to the Participant
by the Company) or by a combination of such means:
(i) causing the Participant to tender a cash payment;
(ii) withholding shares of Common Stock from the shares of
Common Stock issued or otherwise issuable to the Participant in
connection with the Stock Award; provided, however, that
no shares of Common Stock are withheld with a value exceeding
the minimum amount of tax required to be withheld by law (or
such lower amount as may be necessary to avoid variable award
accounting); or (iii) by such other method as may be set
forth in the Stock Award Agreement.
(g) Electronic Delivery. Any reference
herein to a written agreement or document shall
include any agreement or document delivered electronically or
posted on the Companys intranet.
10. | Adjustments upon Changes in Common Stock; Corporate Transactions. |
(a) Capitalization Adjustments. If any
change is made in, or other events occur with respect to, the
Common Stock subject to the Plan or subject to any Stock Award
after the effective date of the Plan set forth in
Section 13 without the receipt of consideration by the
Company (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in
property other than cash, stock split, liquidating dividend,
combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of
consideration by the Company (each a Capitalization
Adjustment)), the Board shall appropriately
adjust: (i) the class(es) and maximum number of securities
subject to the Plan pursuant to Section 4(a), (ii) the
class(es) and maximum number of securities by which the share
reserve is to increase automatically each year pursuant to
Section 4(a), (iii) the class(es) and number of
securities subject to each outstanding stock award under the
Prior Plans that are added from time to time to the share
reserve under the Plan pursuant to Section 4(a),
(iv) the class(es) and maximum number of securities that
may be issued pursuant to the exercise of Incentive Stock
Options pursuant to Section 4(b), (v) the class(es)
and maximum number of securities that may be awarded to any
person pursuant to Sections 5(c) and 7(e), and
(vi) the class(es) and number of securities and price per
share of stock subject to outstanding Stock Awards. The Board
shall make such adjustments, and its determination shall be
final, binding and conclusive. (Notwithstanding the foregoing,
the conversion of any convertible securities of the Company
shall not be treated as a transaction without receipt of
consideration by the Company.)
(b) Dissolution or Liquidation. In the
event of a dissolution or liquidation of the Company, all
outstanding Stock Awards (other than Stock Awards consisting of
vested and outstanding shares of Common Stock not subject to the
Companys right of repurchase) shall terminate immediately
prior to the completion of such dissolution or liquidation, and
the shares of Common Stock subject to the Companys
repurchase option may be repurchased by the Company
notwithstanding the fact that the holder of such Stock Award is
providing Continuous Service, provided, however, that the
Board may, in its sole discretion, cause some or all Stock
Awards to become fully vested, exercisable
and/or no
longer subject to repurchase or forfeiture (to the extent such
Stock Awards have not previously expired or terminated) before
the dissolution or liquidation is completed but contingent on
its completion.
(c) Corporate Transaction. The following
provisions shall apply to Stock Awards in the event of a
Corporate Transaction unless otherwise provided in a written
agreement between the Company or any Affiliate and the holder of
the Stock Award:
(i) Stock Awards May Be Assumed. In the
event of a Corporate Transaction, any surviving corporation or
acquiring corporation (or the surviving or acquiring
corporations parent company) may assume or continue any or
all Stock Awards outstanding under the Plan or may substitute
similar stock awards for Stock Awards
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outstanding under the Plan (including but not limited to, awards
to acquire the same consideration paid to the stockholders of
the Company pursuant to the Corporate Transaction), and any
reacquisition or repurchase rights held by the Company in
respect of Common Stock issued pursuant to Stock Awards may be
assigned by the Company to the successor of the Company (or the
successors parent company, if any), in connection with
such Corporate Transaction. A surviving corporation or acquiring
corporation may choose to assume or continue only a portion of a
Stock Award or substitute a similar stock award for only a
portion of a Stock Award. The terms of any assumption,
continuation or substitution shall be set by the Board in
accordance with the provisions of Section 3(b).
(ii) Stock Awards Held by Current
Participants. In the event of a Corporate
Transaction in which the surviving corporation or acquiring
corporation (or its parent company) does not assume or continue
such outstanding Stock Awards or substitute similar stock awards
for such outstanding Stock Awards, then with respect to Stock
Awards that have not been assumed, continued or substituted and
that are held by Participants whose Continuous Service has not
terminated prior to the effective time of the Corporate
Transaction (referred to as the Current
Participants), the vesting of such Stock Awards
(and, if applicable, the time at which such Stock Awards may be
exercised) shall (contingent upon the effectiveness of the
Corporate Transaction) be accelerated in full to a date prior to
the effective time of such Corporate Transaction as the Board
shall determine (or, if the Board shall not determine such a
date, to the date that is five (5) days prior to the
effective time of the Corporate Transaction), and such Stock
Awards shall terminate if not exercised (if applicable) at or
prior to the effective time of the Corporate Transaction, and
any reacquisition or repurchase rights held by the Company with
respect to such Stock Awards shall lapse (contingent upon the
effectiveness of the Corporate Transaction). No vested Stock
Unit Award shall terminate pursuant to this
Section 10(c)(ii) without being settled by delivery of
shares of Common Stock, their cash equivalent, any combination
thereof, or in any other form of consideration, as determined by
the Board, prior to the effective time of the Corporate
Transaction.
(iii) Stock Awards Held by Former
Participants. In the event of a Corporate
Transaction in which the surviving corporation or acquiring
corporation (or its parent company) does not assume or continue
such outstanding Stock Awards or substitute similar stock awards
for such outstanding Stock Awards, then with respect to Stock
Awards that have not been assumed, continued or substituted and
that are held by persons other than Current Participants, the
vesting of such Stock Awards (and, if applicable, the time at
which such Stock Award may be exercised) shall not be
accelerated and such Stock Awards (other than a Stock Award
consisting of vested and outstanding shares of Common Stock not
subject to the Companys right of repurchase) shall
terminate if not exercised (if applicable) prior to the
effective time of the Corporate Transaction; provided,
however, that any reacquisition or repurchase rights held by
the Company with respect to such Stock Awards shall not
terminate and may continue to be exercised notwithstanding the
Corporate Transaction. No vested Stock Unit Award shall
terminate pursuant to this Section 10(c)(iii) without being
settled by delivery of shares of Common Stock, their cash
equivalent, any combination thereof, or in any other form of
consideration, as determined by the Board, prior to the
effective time of the Corporate Transaction.
(iv) Payment for Stock Awards in Lieu of
Exercise. Notwithstanding the foregoing, in the
event a Stock Award will terminate if not exercised prior to the
effective time of a Corporate Transaction, the Board may
provide, in its sole discretion, that the holder of such Stock
Award may not exercise such Stock Award but will receive a
payment, in such form as may be determined by the Board, equal
in value to the excess, if any, of (i) the value of the
property the holder of the Stock Award would have received upon
the exercise of the Stock Award, over (ii) any exercise
price payable by such holder in connection with such exercise.
(d) Change in Control. A Stock Award may
be subject to additional acceleration of vesting and
exercisability upon or after a Change in Control as may be
provided in the Stock Award Agreement for such Stock Award or as
may be provided in any other written agreement between the
Company or any Affiliate and the Participant. A Stock Award may
vest as to all or any portion of the shares subject to the Stock
Award (i) immediately upon the occurrence of a Change in
Control, whether or not such Stock Award is assumed, continued,
or substituted by a surviving or acquiring entity in the Change
in Control, or (ii) in the event a Participants
Continuous Service is terminated, actually or constructively,
within a designated period following the occurrence of a Change
in Control. In the absence of such provisions, no such
acceleration shall occur.
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11. | Amendment of the Plan and Stock Awards. |
(a) Amendment of Plan. Subject to the
limitations, if any, of applicable law, the Board at any time,
and from time to time, may amend the Plan. However, except as
provided in Section 10(a) relating to Capitalization
Adjustments, no amendment shall be effective unless approved by
the stockholders of the Company to the extent stockholder
approval is necessary to satisfy applicable law.
(b) Stockholder Approval. The Board, in
its sole discretion, may submit any other amendment to the Plan
for stockholder approval, including, but not limited to,
amendments to the Plan intended to satisfy the requirements of
Section 162(m) of the Code and the regulations thereunder
regarding the exclusion of performance-based compensation from
the limit on corporate deductibility of compensation paid to
Covered Employees.
(c) Contemplated Amendments. It is
expressly contemplated that the Board may amend the Plan in any
respect the Board deems necessary or advisable to provide
eligible Employees with the maximum benefits provided or to be
provided under the provisions of the Code and the regulations
promulgated thereunder relating to Incentive Stock Options
and/or to
bring the Plan
and/or
Incentive Stock Options granted under it into compliance
therewith.
(d) No Impairment of Rights. Rights under
any Stock Award granted before amendment of the Plan shall not
be impaired by any amendment of the Plan unless (i) the
Company requests the consent of the affected Participant, and
(ii) such Participant consents in writing.
(e) Amendment of Stock Awards. The Board,
at any time and from time to time, may amend the terms of any
one or more Stock Awards, including, but not limited to,
amendments to provide terms more favorable than previously
provided in the Stock Award Agreement, subject to any specified
limits in the Plan that are not subject to Board discretion;
provided, however, that the rights under any Stock Award
shall not be impaired by any such amendment unless (i) the
Company requests the consent of the affected Participant, and
(ii) such Participant consents in writing.
12. | Termination or Suspension of the Plan. |
(a) Plan Term. The Board may suspend or
terminate the Plan at any time. Unless sooner terminated, the
Plan shall terminate on the day before the tenth (10th)
anniversary of the earlier of (i) the date the amended and
restated Plan is adopted by the Board, or (ii) the date the
Plan is approved by the stockholders of the Company. No Stock
Awards may be granted under the Plan while the Plan is suspended
or after it is terminated.
(b) No Impairment of Rights. Suspension
or termination of the Plan shall not impair rights and
obligations under any Stock Award granted while the Plan is in
effect except with the written consent of the affected
Participant.
13. | Effective Date of Plan. |
The 2001 Equity Incentive Plan was effective as of July 20,
2001 and the 2002 Equity Incentive Plan was effective as of
May 30, 2002, and the Prior Plans shall continue in their
amended and restated form as the 2005 Equity Incentive Plan,
with such amendment and restatement effective as of the IPO
Date, but no Stock Award shall be exercised (or, in the case of
a Stock Purchase Award, Stock Bonus Award, Stock Unit Award, or
Other Stock Award shall be granted) with respect to shares
exceeding the number of shares reserved for issuance under the
Prior Plans prior to the effective date of such amendment and
restatement unless and until the Plan, as amended and restated,
has been approved by the stockholders of the Company, which
approval shall be within twelve (12) months before or after
the date the amended and restated Plan is adopted by the Board.
Stock Awards outstanding prior to the effective date of the
amendment and restatement set forth on the first page shall be
governed in full by the provisions of the Prior Plan as in
effect prior to such amendment and restatement.
14. | Choice of Law. |
The law of the State of Delaware shall govern all questions
concerning the construction, validity and interpretation of this
Plan, without regard to that states conflict of laws rules.
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