EXHIBIT 99.3
Published on January 10, 2008
Exhibit 99.3
Homestead Technologies Inc.
2006 Equity Incentive Plan
Adopted by the Board: January 26, 2006
Approved by the Stockholders: February 8, 2006
Amended by the Board: September 13, 2007
Approved by the Stockholders: October 30, 2007
Amended by the Board: November 20, 2007
Termination Date: February 7, 2016
Approved by the Stockholders: February 8, 2006
Amended by the Board: September 13, 2007
Approved by the Stockholders: October 30, 2007
Amended by the Board: November 20, 2007
Termination Date: February 7, 2016
1. General.
(a) Amendment and Restatement. The Plan is adopted to amend and restate the Homestead.com
Incorporated 1996 Stock Option Plan, adopted on September 20, 1996, as amended (the Original
Plan). All outstanding Stock Awards granted before the amendment and restatement of the Plan
shall continue to be governed by the terms of the Original Plan. All Stock Awards granted after the
date of the Plans amendment and restatement shall be governed by the terms contained herein.
(b) Eligible Stock Award Recipients. The persons eligible to receive Stock Awards are
Employees, Directors, and Consultants.
(c) Available Stock Awards. The Plan provides for the grant of the following Stock Awards:
(i) Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) Restricted Stock Awards
(including Restricted Stock Units), and (iv) Stock Appreciation Rights.
(d) 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(b), 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, at the time of determination, any parent or subsidiary of the
Company as such terms are defined in Rule 405 of the Securities Act. The Board shall have the
authority to determine the time or times at which parent or subsidiary status is determined
within the foregoing definition.
(b) Board means the Board of Directors of the Company.
1.
(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 that acquires the Companys securities 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;
(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; or
(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.
2.
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 or more Directors 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 Homestead Technologies 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; 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:
3.
(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 at least ninety percent (90%) 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) Director means a member of the Board.
(m) Disability means the inability of a Participant to engage in any substantially gainful
activity by reason of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a continuous period
of not less than twelve (12) months, and shall be determined by the Board on the basis of such
medical evidence as the Board deems warranted under the circumstances.
(n) 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.
(o) Entity means a corporation, partnership, limited liability company, or other entity.
(p) Exchange Act means the Securities Exchange Act of 1934, as amended.
(q) 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.
4.
(r) Fair Market Value means, as of any date, the value of the Common Stock determined by the
Board and (i) in a manner consistent with Section 260.140.50 of Title 10 of the California Code of
Regulations, and (ii) in compliance with Section 409A of the Code or, in the case of an Incentive
Stock Option, in compliance with Section 422 of the Code.
(s) Incentive Stock Option means an Option that qualifies as an incentive stock option
within the meaning of Section 422 of the Code and the regulations promulgated thereunder.
(t) Nonstatutory Stock Option means an Option that does not qualify as an Incentive Stock
Option.
(u) Officer means any person designated by the Company as an officer.
(v) Option means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares
of Common Stock granted pursuant to the Plan.
(w) 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.
(x) 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.
(y) 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.
(z) 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.
(aa) Plan means this Homestead Technologies Inc. 2006 Equity Incentive Plan.
(bb) Restricted Stock Award means an award of shares of Common Stock, which is granted
pursuant to the terms and conditions of Section 7(a) and which may take the form of rights to
purchase shares of Common Stock, a stock bonus, or a Restricted Stock Unit Award.
(cc) Restricted Stock Award Agreement means a written agreement between the Company and a
holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award.
Each Restricted Stock Award Agreement shall be subject to the terms and conditions of the Plan.
(dd) Restricted Stock Unit Award means a right to receive shares of Common Stock at a future
date, which is granted pursuant to the terms and conditions of Section 7(a).
5.
(ee) Securities Act means the Securities Act of 1933, as amended.
(ff) 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(b).
(gg) 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.
(hh) Stock Award means any right granted under the Plan, including an Option, a Restricted
Stock Award (including a Restricted Stock Unit Award), and a Stock Appreciation Right.
(ii) 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.
(jj) 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%).
(kk) 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 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 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.
6.
(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 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.
(iv) To effect, at any time and from time to time, with the consent of any adversely affected
Participant, (1) the reduction of the exercise price of any outstanding Option or the strike price
of any outstanding Stock Appreciation Right under the Plan; (2) the cancellation of any outstanding
Option or Stock Appreciation Right under the Plan and the grant in substitution therefor of (a) a
new Option or Stock Appreciation Right under the Plan or another equity plan of the Company
covering the same or a different number of shares of Common Stock, (b) a Restricted Stock Award,
(c) cash, and/or (d) 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.
(v) To amend the Plan or a Stock Award as provided in Section 11.
(vi) To terminate or suspend the Plan as provided in Section 12.
(vii) Generally, to exercise such powers and to perform such acts as the Board deems necessary
or expedient to promote the best interests of the Company and that are not in conflict with the
provisions of the Plan.
(viii) To adopt such procedures and sub-plans as are necessary or appropriate to permit
participation in the Plan by individuals who are foreign nationals or employed outside the United
States.
(c) Delegation to Committee. 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.
7.
(d) 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 Common Stock that may be issued pursuant to Stock Awards shall not exceed in the
aggregate thirty-one million nine hundred twenty-nine thousand four hundred forty-nine (31,929,449)
shares of Common Stock.
(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, or if any
shares of Common Stock issued to a Participant pursuant to a Stock Award are forfeited back to or
repurchased by the Company because of or in connection with the failure to meet a contingency or
condition required to vest such shares in the Participant, the shares of Common Stock not acquired,
such Stock Award or the shares of Common Stock forfeited or repurchased under such Stock Award
shall revert to and again become available for issuance under the Plan; provided, however, that
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 as Incentive Stock Options shall be
thirty-one million nine hundred twenty-nine thousand four hundred forty-nine (31,929,449) shares of
Common Stock.
(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.
(d) Share Reserve Limitation. To the extent required by Section 260.140.45 of Title 10 of the
California Code of Regulations, the total number of shares of Common Stock issuable upon exercise
of all outstanding Options and the total number of shares of Common Stock provided for under any
stock bonus or similar plan of the Company shall not exceed the applicable percentage as calculated
in accordance with the conditions and exclusions of Section 260.140.45 of Title 10 of the
California Code of Regulations, based on the shares of Common Stock of the Company that are
outstanding at the time the calculation is made.
5. Eligibility.
(a) Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to
Employees. Incentive Stock Options may be granted only to employees of the Company or a parent
corporation or subsidiary corporation thereof (as such terms are defined in Sections 424(e) and
(f) of the Code. Stock Awards other than Incentive Stock Options may be granted to Employees,
Directors and Consultants.
8.
(b) Ten Percent Stockholders.
(i) 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.
(ii) A Ten Percent Stockholder shall not be granted a Nonstatutory Stock Option unless the
exercise price of such Option is at least (i) one hundred ten percent (110%) of the Fair Market
Value of the Common Stock on the date of grant, or (ii) such lower percentage of the Fair Market
Value of the Common Stock on the date of grant as is permitted by Section 260.140.41 of Title 10 of
the California Code of Regulations at the time of the grant of the Option.
(iii) A Ten Percent Stockholder shall not be granted a Restricted Stock Award or Stock
Appreciation Right (if such award could be settled in shares of Common Stock), unless the purchase
price of the restricted stock is at least (i) one hundred percent (100%) of the Fair Market Value
of the Common Stock on the date of grant, or (ii) such lower percentage of the Fair Market Value of
the Common Stock on the date of grant as is permitted by Section 260.140.42 of Title 10 of the
California Code of Regulations at the time of the grant of the award.
(c) Consultants. A Consultant shall not be eligible for the grant of a Stock Award if, at the
time of grant, either the offer or the sale of the Companys securities to such Consultant is not
exempt under Rule 701 of the Securities Act (Rule 701) 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 provision of Rule 701, unless the Company determines that such grant need not
comply with the requirements of Rule 701 and will satisfy another exemption under the Securities
Act as well as comply with the securities laws of all other relevant jurisdictions.
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. Subject to the provisions of Section 5(b) regarding Ten Percent Stockholders, no
Option shall be exercisable after the expiration of ten (10) years from the date of grant.
9.
(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. Subject to the provisions of Section 5(b)
regarding Ten Percent Stockholders, 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;
(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 cash or other payment from the Participant to the extent of any remaining balance of
the aggregate exercise price not satisfied by such holding back of whole shares; 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;
10.
(v) according to a deferred payment or similar arrangement with the Optionholder; provided,
however, that interest shall compound at least annually and shall be charged at the minimum rate of
interest necessary to avoid (i) the imputation of interest income to the Company and compensation
income to the Optionholder under any applicable provisions of the Code, and (ii) the classification
of the Option as a liability for financial accounting purposes; or
(vi) 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; provided, however, that if an Option is an Incentive Stock
Option, such Option shall be deemed to be a Nonstatutory Stock Option as a result of such transfer.
(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. In the absence of such a designation, the executor
or administrator of the Optionholders estate shall be entitled to exercise the Option.
(f) Vesting of Options 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) Minimum Vesting. Notwithstanding the foregoing Section 6(f), to the extent that the
following restrictions on vesting are required by Section 260.140.41(f) of Title 10 of the
California Code of Regulations at the time of the grant of the Option, then:
(i) Options granted to an Employee who is not an Officer, Director or Consultant shall provide
for vesting of the total number of shares of Common Stock at a rate of
11.
at least twenty percent (20%) per year over five (5) years from the date the Option was
granted, subject to reasonable conditions such as continued employment; and
(ii) Options granted to Officers, Directors or Consultants may be made fully exercisable,
subject to reasonable conditions such as continued employment, at any time or during any period
established by the Company.
(h) 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 thirty (30) days following the termination of the Optionholders Continuous
Service (or such longer or shorter period specified in the Option Agreement, which period shall not
be less than thirty (30) days unless such termination is for cause), 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.
(i) Extension of Termination Date. An Optionholders Option Agreement may also provide that
if the exercise of the Option following the termination of the Optionholders Continuous Service
(other than upon the Optionholders death or Disability) 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 thirty (30) days 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.
(j) 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, which period shall not be less than six (6)
months), 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.
(k) 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
12.
inheritance or by a person designated to exercise the option upon the Optionholders death
pursuant to Section 6(e)(iii), 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, which period shall not be less than six (6) months), 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.
(l) 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. Subject to the Repurchase Limitation in Section 9(h), 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. Provided that the Repurchase Limitation in
Section 9(h) is not violated, 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 Agreement.
(m) Right of Repurchase. Subject to the Repurchase Limitation in Section 9(h), the Option
may include a provision whereby the Company may elect to repurchase all or any part of the vested
shares of Common Stock acquired by the Optionholder pursuant to the exercise of the Option.
Provided that the Repurchase Limitation in Section 9(h) is not violated, 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 classification of the Option as a liability for financial
accounting purposes) have elapsed following exercise of the Option unless otherwise specifically
provided in the Option Agreement.
(n) Right of First Refusal. The Option may include a provision whereby the Company may elect
to exercise a right of first refusal following receipt of notice from the Optionholder of the
intent to transfer all or any part of the shares of Common Stock received upon the exercise of the
Option. Except as expressly provided in this Section 6(n) or in the Stock Award Agreement for the
Option, such right of first refusal shall otherwise comply with any applicable provisions of the
Bylaws of the Company. The Company will not exercise its right of first refusal until at least six
(6) months (or such longer or shorter period of time necessary to avoid classification of the
Option as a liability for financial accounting purposes) have elapsed following exercise of the
Option unless otherwise specifically provided in the Option Agreement.
7. Provisions of Stock Awards other than Options.
(a) Restricted Stock Awards. Each Restricted Stock Award Agreement shall be in such form and
shall contain such terms and conditions as the Board shall deem appropriate. Restricted Stock
Awards may take the form of rights to purchase shares of Common Stock, a stock bonus, or a
Restricted Stock Unit Award (pursuant to which to a Participant is entitled to
13.
receive one share of Common Stock (or cash equivalent thereof) for each Restricted Stock Unit
awarded, with receipt made on a date determined in accordance with the provisions of this Section 7
and the terms of the Participants Restricted Stock Award Agreement). 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 Restricted Stock 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 the Restricted Stock Award agreements may change from time to time, and
the terms and conditions of separate Restricted Stock Award agreements need not be identical;
provided, however, that each Restricted Stock 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 Restricted Stock Award, the Board will
determine the price to be paid, if any, by the Participant for each share subject to the Restricted
Stock Award. Subject to the provisions of Section 5(b) regarding Ten Percent Stockholders and to
the extent required by applicable law, the price to be paid by the Participant for each share
subject to the Restricted Stock Award shall not be less than eighty-five percent (85%) of the
Common Stocks Fair Market Value on the date such award is made or at the time the purchase is
consummated. Notwithstanding the foregoing, a Restricted Stock Award may be awarded with no cash
purchase price to be paid, such as is the case with a stock bonus or a Restricted Stock Unit Award,
to the extent permissible under applicable law.
(ii) Consideration. At the time of the grant of a Restricted Stock Award, the Board will
determine the consideration permissible for the payment of the purchase price of the Restricted
Stock Award. The purchase price of Common Stock acquired pursuant to the Restricted Stock 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. Subject to the Repurchase Limitation in Section 9(h), shares of Common Stock
acquired, and/or rights to acquire shares of Common Stock, under a Restricted Stock Award or a
Restricted Stock Unit Award may be subject to a share repurchase right or option or forfeiture
provision in favor of the Company in accordance with a vesting schedule to be determined by the
Board.
(iv) Termination of Participants Continuous Service.
(1) With respect to Restricted Stock Unit Awards, and except as otherwise provided in the
applicable Restricted Stock Award Agreement, the portion of the Restricted Stock Unit Award that
has not vested will be forfeited without consideration upon the Participants termination of
Continuous Service.
(2) With respect to all other forms of Restricted Stock Awards, and except as otherwise
provided in the applicable Restricted Stock Award Agreement, and further
14.
subject to the Repurchase Limitation in Section 9(h), 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 Restricted Stock 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 Fair Market Value on the relevant
date, or (ii) the Participants original cost for such shares. Provided that the Repurchase
Limitation in Section 9(h) is not violated, 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 classification of the Restricted Stock Award as a liability for
financial accounting purposes) have elapsed following the Participants purchase of the shares
acquired pursuant to the Restricted Stock Award unless otherwise determined by the Board or
provided in the Restricted Stock Award Agreement.
(v) Transferability. Rights to purchase or acquire shares of Common Stock under the
Restricted Stock Award agreement shall not be transferable except by will or by the laws of descent
and distribution and shall be exercisable during the lifetime of the Participant only by the
Participant.
(vi) Payment. A Restricted 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 Restricted Stock Award Agreement.
(vii) Additional Restrictions. At the time of the grant of a Restricted Stock 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 Restricted Stock Award to a
time after the vesting of such Restricted Stock Award.
(viii) Dividend Equivalents. Dividend equivalents may be credited in respect of shares of
Common Stock covered by a Restricted Stock Unit Award, as determined by the Board and contained in
the Restricted Stock Award Agreement. At the sole discretion of the Board, such dividend
equivalents may be converted into additional shares of Common Stock covered by the Restricted Stock
Unit Award in such manner as determined by the Board. Any additional shares covered by the
Restricted Stock Unit Award credited by reason of such dividend equivalents will be subject to all
the terms and conditions of the underlying Restricted Stock Award Agreement to which they relate.
(ix) Compliance with Section 409A of the Code. Notwithstanding anything to the contrary set
forth herein, any Restricted Stock Award granted under the Plan that is not exempt from the
requirements of Section 409A of the Code shall contain such provisions so that such Restricted
Stock Award will comply with the requirements of Section 409A of the Code. Such restrictions, if
any, shall be determined by the Board and contained in the Restricted Stock Award Agreement
evidencing such Restricted Stock Award. For example, such restrictions may include, without
limitation, a requirement that any Common Stock that is to be issued in a year
15.
following the year in which the Restricted Stock Award vests must be issued in accordance with
a fixed pre-determined schedule.
(b) 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 but 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) Term. Subject to the provisions of Section 5(b) regarding Ten Percent Stockholders, no
Stock Appreciation Right shall be exercisable after the expiration of ten (10) years from the date
of grant, or such shorter period specified in the Stock Appreciation Right Agreement.
(ii) Strike Price. Each Stock Appreciation Right will be denominated in shares of Common
Stock equivalents. Subject to the provisions of Section 5(b) regarding Ten Percent Stockholders,
the strike price of each Stock Appreciation Right granted as a stand-alone or tandem Stock Award
shall not be less than one hundred percent (100%) of the Fair Market Value of the Common Stock
equivalents subject to the Stock Appreciation Right on the date of grant.
(iii) Calculation of Appreciation. 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 on the date of grant.
(iv) 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 deems
appropriate; provided, however, that a Stock Appreciation Right that could be settled in shares of
Common Stock shall be subject to the provision of Section 9(h).
(v) 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.
(vi) Payment. The appreciation distribution in respect to a Stock Appreciation Right may be
paid in Common Stock, in cash, in any combination of the two 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.
16.
(vii) 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 thirty (30)
days 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 of Continuous Service, 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.
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 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
any 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
17.
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 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 classification of the Stock Award as a liability for financial
accounting purposes); or (iii) by such other method as may be set forth in the Stock Award
Agreement.
(g) Information Obligation. To the extent required by Section 260.140.46 of Title 10 of the
California Code of Regulations, the Company shall deliver financial statements to
18.
Participants at least annually. This Section 9(g) shall not apply to key Employees whose
duties in connection with the Company assure them access to equivalent information.
(h) Repurchase Limitation. The terms of any repurchase option shall be specified in the Stock
Award, and the repurchase price may be either the Fair Market Value of the shares of Common Stock
on the date of termination of Continuous Service or the lower of (i) the Fair Market Value of the
shares of Common Stock on the date of repurchase, or (ii) their original purchase price. To the
extent required by Section 260.140.41 and Section 260.140.42 of Title 10 of the California Code of
Regulations at the time a Stock Award is made, any repurchase option contained in a Stock Award
granted to a person who is not an Officer, Director or Consultant shall be upon the terms described
below:
(i) Fair Market Value. If the repurchase option gives the Company the right to repurchase the
shares of Common Stock upon termination of Continuous Service at not less than the Fair Market
Value of the shares of Common Stock to be purchased on the date of termination of Continuous
Service, then (i) the right to repurchase shall be exercised for cash or cancellation of purchase
money indebtedness for the shares of Common Stock within ninety (90) days of termination of
Continuous Service (or in the case of shares of Common Stock issued upon exercise of Stock Awards
after such date of termination, within ninety (90) days after the date of the exercise) or such
longer period as may be agreed to by the Company and the Participant, and (ii) the right terminates
when the shares of Common Stock become publicly traded.
(ii) Original Purchase Price. If the repurchase option gives the Company the right to
repurchase the shares of Common Stock upon termination of Continuous Service at the lower of (i)
the Fair Market Value of the shares of Common Stock on the date of repurchase or (ii) their
original purchase price, then (x) the right to repurchase at the original purchase price shall
lapse at the rate of at least twenty percent (20%) of the shares of Common Stock per year over five
(5) years from the date the Stock Award is granted (without respect to the date the Stock Award was
exercised or became exercisable) and (y) the right to repurchase shall be exercised for cash or
cancellation of purchase money indebtedness for the shares of Common Stock within ninety (90) days
of termination of Continuous Service (or in the case of shares of Common Stock issued upon exercise
of Options after such date of termination, within ninety (90) days after the date of the exercise)
or such longer period as may be agreed to by the Company and the Participant.
(i) 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 without the receipt of
consideration by the Company (through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock split,
19.
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 Sections 4(a) and 4(b), and (ii) the class(es)
and number of securities and price per share of Common Stock subject to each outstanding Stock
Award. 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 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.
(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
20.
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).
(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.
(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.
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
21.
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.
(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; 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 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 Plan shall become effective as determined by the Board, but no Stock Award shall be
exercised (or, in the case of a Restricted Stock Award, shall be granted) unless and until the Plan
has been approved by the stockholders of the Company, which approval shall be within twelve (12)
months before or after the date the Plan is adopted by the Board.
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.
22.