Annual Report — Small Business — Form 10-KSB
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10KSB Annual Report -- Small Business 59 276K
2: EX-1 Underwriting Agreement 4 16K
3: EX-2 Plan of Acquisition, Reorganization, Arrangement, 31 109K
Liquidation or Succession
4: EX-3 Articles of Incorporation/Organization or By-Laws 20 69K
5: EX-4 Instrument Defining the Rights of Security Holders 6 32K
6: EX-5 Opinion re: Legality 6 32K
7: EX-6 Opinion re: Discount on Capital Shares 6 22K
8: EX-7 Opinion re: Liquidation Preference 13 76K
9: EX-8 Opinion re: Tax Matters 6 29K
10: EX-9 Voting Trust Agreement 4 23K
11: EX-10 Material Contract 6 25K
12: EX-11 Statement re: Computation of Earnings Per Share 21 83K
EX-7 — Opinion re: Liquidation Preference
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EXHIBIT 10.5
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Innovative Micro Technology, Inc.
2001 STOCK INCENTIVE PLAN
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Termination Date: November 16, 2011
1. PURPOSE OF THE PLAN.
The purpose of this 2001 Stock Incentive Plan (the "Plan") is to provide
incentives and rewards to selected eligible directors, officers, employees and
consultants of Innovative Micro Technology, Inc. (the "Company") or its
affiliates in order to assist the Company and its affiliates in attracting,
retaining and motivating those persons by providing for or increasing the
proprietary interests of those persons in the Company, and by associating their
interests in the Company with those of the Company's stockholders.
2. DEFINITIONS
(a) "Affiliate" means any parent corporation or subsidiary corporation of
the Company, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f), respectively, of the Code.
(b) "Bankruptcy Plan" means the Debtor's Plan of Bankruptcy under Chapter
11 of the Bankruptcy Code dated as of July 6, 2001 and filed with the Bankruptcy
Court for the Central District of California on September 24, 2001, as such Plan
may be modified from time to time.
(c) "Board" means the Board of Directors of the Company.
(d) "Cause," with respect to any Participant, means (except as otherwise
provided in the applicable Stock Award Agreement or an applicable written
employment contract executed by an authorized officer of the Company and such
Participant) such Participant's (i) conviction of any felony or any crime
involving moral turpitude or dishonesty, (ii) participation in a fraud or act of
dishonesty against the Company, (iii) conduct that, based upon a good faith and
reasonable factual investigation and determination by the Company, demonstrates
such Participant's gross unfitness to serve, (iv) failure, based upon a good
faith and reasonable factual determination by the Company, to meet the minimum
performance requirements of his or her position as established by the Company,
or (v) intentional, material violation of any contract between the Company and
such Participant or any statutory duty of such Participant to the Company that
such Participant does not correct within thirty (30) days after written notice
to such Participant thereof. A Participant's physical or mental disability shall
not constitute "Cause."
(e) "Code" means the Internal Revenue Code of 1986, as amended.
(f) "Committee" means a committee of one or more members of the Board
appointed by the Board in accordance with subsection 3(c).
(g) "Common Stock" means the Class A Common Stock, par value $.0001 per
share, of the Company.
(h) "Company" means Innovative Micro Technology, Inc., a Delaware
corporation.
(i) "Consultant" means any person, including an advisor, (i) engaged by
the Company or an Affiliate to render consulting or advisory services and who is
compensated for such services or (ii) who is a member of the Board of Directors
of an Affiliate. However, the term "Consultant" shall not include either
Directors who are not compensated by the Company for their services as Directors
or Directors who are merely paid a director's fee by the Company for their
services as Directors.
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(j) "Continuous Service" means that the Participant's service with the
Company or an Affiliate, whether as an Employee, Director or Consultant, is not
interrupted or terminated. The Participant's Continuous Service shall not be
deemed to have terminated merely because of 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 Participant's Continuous Service. For example, a change in status from an
Employee of the Company to a Consultant of an Affiliate or a Director will not
constitute an interruption of Continuous Service. The Board or the chief
executive officer of the Company, in that party's 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.
(k) "Corporate Transaction" means after the Effective Date, (i) a sale of
all or substantially all of the assets of the Company (in one or a series of
transactions), (ii) a transaction or a series of transactions whereby fifty
percent (50%) of the issued and outstanding shares of Common Stock (prior to any
dilution for unvested shares of Restricted Stock or unexercised Options) are
held by a Person (including such Person's affiliates), excluding that percent of
the issued and outstanding shares of Common Stock held by such Person as of the
Effective Date, unless such Person acquires additional shares of Common Stock
after the Effective Date and such shares of Common Stock, when combined with the
shares of Common Stock held by such Person as of the Effective Date, aggregate
more than 49.9% of the issued and outstanding shares of Common Stock (prior to
any dilution for unexercised Options, or (iii) a transaction or series of
transactions whereby fifty-one percent (51%) of the issued and outstanding
shares of Common Stock vote to sell the equity interests in or merge the Company
and such sale or merger results in Persons holding fifty percent (50%) or more
of the Common Stock that are other than the Persons holding fifty percent (50%)
or more of the Common Stock immediately prior to such sale or merger.
(l) "Covered Employee" means the chief executive officer, or an individual
acting in such capacity, 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 of Directors of the Company.
(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.
Mere service as a Director or payment of a director's fee by the Company or an
Affiliate shall not be sufficient to constitute "employment" by the Company or
an Affiliate.
(p) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(q) "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 market
(or the exchange or market with the greatest volume of trading
in the Common Stock) on the last market trading day prior to the
day of determination, as reported in The Wall Street Journal or
such other source as the Board deems reliable.
(ii) In the absence of such markets for the Common Stock, the Fair
Market Value shall be determined in good faith by the Board.
(r) "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.
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(s) "Non-Employee Director" means a Director who either (i) is not a
current Employee or Officer of the Company or its parent or a subsidiary, does
not receive compensation (directly or indirectly) from the Company or its parent
or a subsidiary for s 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 as to
which disclosure would be required under Item 404(a) of Regulation S-K and is
not engaged in a business relationship as to which disclosure would be required
under Item 404(b) of Regulation S-K; or (ii) is otherwise considered a
"non-employee director" for purposes of Rule 16b-3.
(t) "Nonstatutory Stock Option" means an Option not intended to qualify as
an Incentive Stock Option.
(u) "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.
(v) "Option" means an Incentive Stock Option or a Nonstatutory Stock
Option 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 individual 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) "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" receiving
compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an "affiliated corporation"
at any time and is not currently receiving direct or indirect remuneration from
the Company or an "affiliated corporation" for services 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.
(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 Innovative Micro Technology, Inc. 2001 Stock
Incentive Plan.
(bb) "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.
(cc) "Securities Act" means the Securities Act of 1933, as amended.
(dd) "Stock Award" means any right granted under the Plan, including an
Option, a stock bonus and a right to acquire restricted stock.
(ee) "Stock Award Agreement" means a written agreement between the Company
and a holder of a Stock Award evidencing the terms and conditions of an
individual Stock Award grant. Each Stock Award Agreement shall be subject to the
terms and conditions of the Plan.
(ff) "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 of any of its Affiliates.
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3. ADMINISTRATION.
(a) Administration by Board. The Board shall administer the Plan unless
and until the Board delegates administration to a Committee, as provided in
subsection 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 which of the persons eligible
under the Plan shall be granted Stock Awards; when and how each
Stock Award shall be granted; what type or combination of types
of Stock Award shall be granted; 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 Common
Stock pursuant to a Stock Award; and the number of shares of
Common Stock with respect to which a Stock Award shall be
granted to each such person.
(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 amend the Plan or a Stock Award as provided in Section 14.
(iv) 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 which are not in conflict with the
provisions of the Plan.
(c) Delegation to Committee.
(i) General. The Board may delegate administration of the Plan to a
Committee or Committees of one (1) or more members of the Board,
and the term "Committee" shall apply to any person or persons to
whom such authority has been delegated. 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, 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 abolish the
Committee at any time and revest in the Board the administration
of the Plan.
(ii) Committee Composition when Common Stock is Publicly Traded. At
such time as the Common Stock is publicly traded, in the
discretion of the Board, a Committee may consist solely of two
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. Within the scope of such
authority, the Board or the Committee may (1) delegate to a
committee of one or more members of the Board who are not
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 are not Non-Employee
Directors the authority to grant Stock Awards to eligible
persons who are not then subject to Section 16 of the Exchange
Act.
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(d) Effect of Board's 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. AVAILABLE AWARDS.
(a) Common Stock and Derivative Security Awards. Awards authorized under
the Plan shall consist of any type of arrangement with a Participant that is not
inconsistent with the provisions of the Plan and that, by its terms, include,
but need not be limited to, sales, bonuses and other transfers of stock,
restricted stock, stock options, reload stock options, stock purchase warrants,
other rights to acquire stock or securities convertible into or redeemable for
stock, stock appreciation rights, phantom stock, dividend equivalents,
performance units or performance shares, or any other type of Award which the
Board shall determine is consistent with the objectives and limitations of the
Plan. An Award may consist of one such security or benefit, or two or more of
them in tandem or in the alternative.
(b) Consideration. Common Stock may be issued pursuant to an Award for any
lawful consideration as determined by the Board, including, without limitation,
a cash payment, services rendered, or the cancellation of indebtedness.
(c) Guidelines. The Board may adopt, amend or revoke from time to time
written policies implementing the Plan. Such policies may include, but need not
be limited to, the type, size and term of Awards to be made to participants and
the conditions for payment of such Awards.
5. SHARES SUBJECT TO THE PLAN.
(a) Share Reserve. Subject to the provisions of Section 12 relating to
adjustments upon changes in Common Stock, the Common Stock that may be issued
pursuant to Stock Awards shall not exceed in the aggregate 2,250,000 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, the shares of Common Stock not acquired under such Stock
Award shall revert to and again become available for issuance under the Plan.
(c) Source of Shares. The shares of Common Stock subject to the Plan may
be unissued shares or reacquired shares, bought on the market or otherwise.
6. 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 at 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. Subject to the provisions of Section 12
relating to adjustments upon changes in the shares of Common Stock, no Employee
shall be eligible to be granted Options covering more than one million
(1,000,000) shares of Common Stock during any calendar year.
(d) Consultants.
(i) 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 Company's
securities to such Consultant because of the nature of the
services that the Consultant is providing to the Company, or
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because the Consultant is not a natural person, or as otherwise
provided by the rules governing the use of Form S-8, unless the
Company determines both (i) that such grant (A) shall be
registered in another manner under the Securities Act (e.g., on
a Form S-3 Registration Statement) or (B) does not require
registration under the Securities Act in order to comply with
the requirements of the Securities Act, if applicable, and (ii)
that such grant complies with the securities laws of all other
relevant jurisdictions.
(ii) Form S-8 generally is available to consultants and advisors only
if (i) they are natural persons; (ii) they provide bona fide
services to the issuer, its parents, its majority-owned
subsidiaries or majority-owned subsidiaries of the issuer's
parent; and (iii) the services are not in connection with the
offer or sale of securities in a capital-raising transaction,
and do not directly or indirectly promote or maintain a market
for the issuer's securities.
(e) Suspension or Termination of Awards. If the Company believes that a
Participant has committed an act of misconduct as described in the next
sentence, the Company may suspend the Participant's rights under any then
outstanding Award pending a determination by the Board. If the Board determines
that a Participant has committed an act of embezzlement, fraud, nonpayment of
any obligation owed to the Company or any subsidiary, breach of fiduciary duty
or deliberate disregard of the Company's rules resulting in loss, damage or
injury to the Company, or if a Participant makes an unauthorized disclosure of
trade secret or confidential information of the Company, engages in any conduct
constituting unfair competition, or induces any customer of the Company to
breach a contract with the Company, neither the Participant nor his or her
estate shall be entitled to exercise any rights whatsoever with respect to such
Award. In making such determination, the Board shall act fairly and shall give
the Participant a reasonable opportunity to appear and present evidence on his
or her behalf to the Board.
7. 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
will be issued for shares of Common Stock purchased on exercise of each type of
Option. The provisions of separate Options need not be identical, but each
Option 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 subsection 6(b) regarding Ten
Percent Stockholders, no Option shall be exercisable after the expiration of ten
(10) years from the date it was granted.
(b) Exercise Price of an Incentive Stock Option. Subject to the provisions
of subsection 6(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 satisfying 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 ninety-five percent (95%)
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 satisfying the provisions of Section
424(a) of the Code.
(d) Consideration. The purchase price of Common Stock acquired pursuant to
an Option shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the time the Option is exercised or (ii) at
the discretion of the Board at the time of the grant of the Option (or
subsequently in the case of a Nonstatutory Stock Option) (1) by delivery to the
Company of other Common Stock, (2) in any other form of legal consideration that
may be acceptable to the Board. Unless otherwise specifically provided in the
Option, the purchase price of Common Stock acquired pursuant to an Option that
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is paid by delivery to the Company of other Common Stock acquired, directly or
indirectly from the Company, shall be paid only by shares of the Common Stock
that have been held for more than six (6) months (or such longer or shorter
period of time required to avoid a charge to earnings for financial accounting
purposes). At any time that the Company is incorporated in Delaware, payment of
the Common Stock's "par value," as defined in the Delaware General Corporation
Law, shall not be made by deferred payment.
In the case of any deferred payment arrangement, interest shall be
compounded at least annually and shall be charged at the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement.
(e) Transferability of an Incentive Stock Option. An Incentive Stock
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. Notwithstanding the foregoing, the Optionholder may,
by delivering written notice to the Company, in a form 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, but need not, vest and therefore become exercisable in
periodic installments that may, but need not, be equal. The Option may be
subject to such other terms and conditions on the time or times when it may 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 subsection 7(g) 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 an Optionholder's
Continuous Service terminates (other than upon the Optionholder's 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) but only within such period of time ending on the earlier of (i)
the date ninety (90) days following the termination of the Optionholder's
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; provided however, that if the Participant is terminated for
reasons other than Cause and the Participant, upon such termination is entitled
under an employment contract to be automatically vested in any benefit program,
the Participant can exercise the Option (and any related warrants). If, after
termination, the Optionholder does not exercise his or her Option within the
time specified in the Option Agreement, the Option shall terminate.
(h) Extension of Termination Date. An Optionholder's Option Agreement may
also provide that if the exercise of the Option following the termination of the
Optionholder's Continuous Service (other than upon the Optionholder's 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 the term of the Option set forth in subsection 7(a) or (ii) the
expiration of a period of ninety (90) days after the termination of the
Optionholder's Continuous Service during which the exercise of the Option would
not be in violation of such registration requirements.
(i) Disability of Optionholder. In the event that an Optionholder's
Continuous Service terminates as a result of the Optionholder's 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), but only
within such period of time ending on the earlier of (i) the date twelve (12)
months following such termination (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, the Optionholder does not
exercise his or her Option within the time specified herein, the Option shall
terminate.
(j) Death of Optionholder. In the event (i) an Optionholder's Continuous
Service terminates as a result of the Optionholder's death or (ii) the
Optionholder dies within the period (if any) specified in the Option Agreement
after the termination of the Optionholder's 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 Optionholder's estate, by a person who acquired the right to exercise the
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Option by bequest or inheritance or by a person designated to exercise the
Option upon the Optionholder's death pursuant to subsection 6(e) or 6(f), but
only within the period ending on the earlier of (1) the date eighteen (18)
months following the date of death (or such longer or shorter period specified
in the Option Agreement) or (2) the expiration of the term of such Option as set
forth in the Option Agreement. If, after death, the Option is not exercised
within the time specified herein, the Option shall terminate.
(k) Early Exercise. The Option may, but need not, include a provision
whereby the Optionholder may elect at any time before the Optionholder's
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 will not exercise its repurchase
option until at least six (6) months (or such longer or shorter period of time
required 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.
(l) Re-Load Options.
(i) Without in any way limiting the authority of the Board to make
or not to make grants of Options hereunder, the Board shall
have the authority (but not an obligation) to include as part
of any Option Agreement a provision entitling the Optionholder
to a further Option (a "Re-Load Option") in the event the
Optionholder exercises the Option evidenced by the Option
Agreement, in whole or in part, by surrendering other shares of
Common Stock in accordance with this Plan and the terms and
conditions of the Option Agreement. Unless otherwise
specifically provided in the Option, the Optionholder shall not
surrender shares of Common Stock acquired, directly or
indirectly from the Company, unless such shares have been held
for more than six (6) months (or such longer or shorter period
of time required to avoid a charge to earnings for financial
accounting purposes).
(ii) Any such Re-Load Option shall (1) provide for a number of
shares of Common Stock equal to the number of shares of Common
Stock surrendered as part or all of the exercise price of such
Option; (2) have an expiration date which is the same as the
expiration date of the Option the exercise of which gave rise
to such Re-Load Option; and (3) have an exercise price which is
equal to one hundred percent (100%) of the Fair Market Value of
the Common Stock subject to the Re-Load Option on the date of
exercise of the original Option. Notwithstanding the foregoing,
a Re-Load Option shall be subject to the same exercise price
and term provisions heretofore described for Options under the
Plan.
(iii) Any such Re-Load Option may be an Incentive Stock Option or a
Nonstatutory Stock Option, as the Board may designate at the
time of the grant of the original Option; provided, however,
that the designation of any Re-Load Option as an Incentive
Stock Option shall be subject to the one hundred thousand
dollar ($100,000) annual limitation on the exercisability of
Incentive Stock Options described in subsection 9(d) and in
Section 422(d) of the Code. There shall be no Re-Load Options
on a Re-Load Option. Any such Re-Load Option shall be subject
to the availability of sufficient shares of Common Stock under
subsection 5(a) and the "Section 162(m) Limitation" on the
grants of Options under subsection 6(c) and shall be subject to
such other terms and conditions as the Board may determine
which are not inconsistent with the express provisions of the
Plan regarding the terms of Options.
8. PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.
(a) Stock Bonus Awards. Each stock bonus 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 bonus agreements may change from time to time,
and the terms and conditions of separate stock bonus agreements need not be
identical, but each stock bonus agreement shall include (through incorporation
of provisions hereof by reference in the agreement or otherwise) the substance
of each of the following provisions:
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(i) Consideration. A stock bonus may be awarded in consideration for
past services actually rendered to the Company or an Affiliate
for its benefit.
(ii) Vesting. Shares of Common Stock awarded under the stock bonus
agreement may, but need not, be subject to a share repurchase
option in favor of the Company in accordance with a vesting
schedule to be determined by the Board.
(iii) Termination of Participant's Continuous Service. In the event a
Participant's Continuous Service terminates, the Company may
reacquire any or all of the shares of Common Stock held by the
Participant which have not vested as of the date of termination
under the terms of the stock bonus agreement.
(iv) Transferability. Rights to acquire shares of Common Stock under
the stock bonus agreement shall be transferable by the
Participant only upon such terms and conditions as are set forth
in the stock bonus agreement, as the Board shall determine in
its discretion, so long as Common Stock awarded under the stock
bonus agreement remains subject to the terms of the stock bonus
agreement.
(b) Restricted Stock Awards. Each restricted stock purchase agreement
shall be in such form and shall contain such terms and conditions as the Board
shall deem appropriate. The terms and conditions of the restricted stock
purchase agreements may change from time to time, and the terms and conditions
of separate restricted stock purchase agreements need not be identical, but each
restricted stock purchase agreement shall include (through incorporation of
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:
(i) Purchase Price. The purchase price under each restricted stock
purchase agreement shall be such amount as the Board shall
determine and designate in such restricted stock purchase
agreement. The purchase price shall not be less than eighty-five
percent (85%) of the Common Stock's Fair Market Value on the
date such award is made or at the time the purchase is
consummated, provided that the purchase price of any Restricted
Stock established in the Bankruptcy Plan shall be conclusively
deemed to comply with this paragraph. .
(ii) Consideration. The purchase price of Common Stock acquired
pursuant to the restricted stock purchase agreement shall be
paid either: (i) in cash at the time of purchase; or (ii) in any
other form of legal consideration that may be acceptable to the
Board in its discretion; provided, however, that at any time
that the Company is incorporated in Delaware, then payment of
the Common Stock's "par value," as defined in the Delaware
General Corporation Law, shall not be made by deferred payment.
(iii) Vesting. Shares of Common Stock acquired under the restricted
stock purchase agreement may, but need not, be subject to a
share repurchase option in favor of the Company in accordance
with a vesting schedule to be determined by the Board.
(iv) Termination of Participant's Continuous Service. In the event a
Participant's Continuous Service terminates, the Company may
repurchase or otherwise reacquire any or all of the shares of
Common Stock held by the Participant which have not vested as of
the date of termination under the terms of the restricted stock
purchase agreement.
(v) Transferability. Rights to acquire shares of Common Stock under
the restricted stock purchase agreement shall be transferable by
the Participant only upon such terms and conditions as are set
forth in the restricted stock purchase agreement, as the Board
shall determine in its discretion, so long as Common Stock
awarded under the restricted stock purchase agreement remains
subject to the terms of the restricted stock purchase agreement.
-9-
9. COVENANTS OF THE COMPANY.
(a) Availability of Shares. During the terms of the Stock Awards, the
Company shall keep reserved and 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 which 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.
10. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of Common Stock pursuant to Stock Awards shall
constitute general funds of the Company.
11. MISCELLANEOUS.
(a) Acceleration of Exercisability and Vesting. The Board shall have the
power 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.
(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 or any
instrument executed or 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 Consultant's 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
its Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or
portions thereof which exceed such limit (according to the order in which they
were granted) shall be treated as Nonstatutory Stock Options.
(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 Participant's
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
-10-
is acquiring Common Stock subject to the Stock Award for the Participant's 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 (1) the issuance of the shares of
Common Stock 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 (2) 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 Participant may satisfy any federal, state or local
tax withholding obligation relating to the exercise or acquisition of Common
Stock under a Stock Award by any of the following means (in addition to the
Company's right to withhold from any compensation paid to the Participant by the
Company) or by a combination of such means: (i) tendering a cash payment; (ii)
authorizing the Company to withhold shares of Common Stock from the shares of
Common Stock otherwise issuable to the Participant as a result of the exercise
or acquisition of Common Stock under 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 (iii) delivering to the Company owned and
unencumbered shares of Common Stock.
(g) Cancellation and Re-Grant of Options.
(i) Authority to Reprice. The Board shall have the authority to
effect, at any time and from time to time, (1) the repricing of
any outstanding Options under the Plan and/or (2) with the
consent of any adversely affected holders of Options, the
cancellation of any outstanding Options under the Plan and the
grant in substitution therefor of new Options under the Plan
covering the same or different numbers of shares of Common
Stock. The exercise price per share of Common Stock shall be not
less than that specified under the Plan for newly granted Stock
Awards. Notwithstanding the foregoing, the Board may grant an
Option with an exercise price lower than that set forth above if
such Option is granted as part of a transaction to which Section
424(a) of the Code applies.
(ii) Effect of Repricing under Section 162(m) of the Code. Shares of
Common Stock subject to an Option which is amended or canceled
in order to set a lower exercise price per share of Common Stock
shall continue to be counted against the maximum award of
Options permitted to be granted pursuant to subsection 5(c). The
repricing of an Option under this subsection 10(g) resulting in
a reduction of the exercise price shall be deemed to be a
cancellation of the original Option and the grant of a
substitute Option; in the event of such repricing, both the
original and the substituted Options shall be counted against
the maximum awards of Options permitted to be granted pursuant
to subsection 5(c). The provisions of this subsection 11(g)(ii)
shall be applicable only to the extent required by Section
162(m) of the Code.
12. ADJUSTMENTS UPON CHANGES IN STOCK.
If any change is made in 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, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by the
Company), the Plan will be appropriately adjusted in the class(es) and maximum
number of securities subject to the Plan pursuant to subsection 5(a) and the
maximum number of securities subject to award to any person pursuant to
subsection 6(c), and the outstanding Stock Awards will be appropriately adjusted
in the class(es) and number of securities and price per share of Common Stock
subject to such outstanding Stock Awards. The Board shall make such adjustments,
and its determination shall be final, binding and conclusive. (The conversion of
any convertible securities of the Company shall not be treated as a transaction
"without receipt of consideration" by the Company.)
-11-
13. CORPORATE TRANSACTIONS.
(a) Except as otherwise provided for in the Optionee's Option Agreement,
in the event of a Corporate Transaction, the Company and the successor
corporation may agree:
(i) to terminate the Plan and cancel all outstanding Options and
unvested shares of Restricted Stock; provided, however, subject
to Subsection (b) below, the Company shall vest the Optionees in
their outstanding Options and unvested Shares and shall give the
Optionees 20 days to exercise their outstanding Options before
they are cancelled;
(ii) that the successor corporation or its parent will assume the
Plan and all outstanding Options and unvested shares of
Restricted Stock;
(iii) to terminate the Plan and cancel all outstanding Options and
unvested shares of Restricted Stock and replace such Options and
unvested shares of Restricted Stock with comparable options and
unvested shares in the successor corporation or parent thereof
(the determination of comparability shall be made by the
Administrator, and its determination shall be final, binding,
and conclusive); or
(iv) to terminate the Plan and cancel all outstanding Options and
unvested shares of Restricted Stock and deliver to the Optionee
in lieu thereof, (i) the difference between the Fair Market
Value of a share of Common Stock on the date of the Corporate
Transaction and the Exercise Price of the Optionee's Option,
multiplied by the number of shares to which the Option relates,
and (ii) cash equal to the Fair Market Value of a share of
Common Stock on the date of the Corporate Transaction multiplied
by the number of unvested Shares on such date.
(b) The acceleration of vesting of Options or unvested shares of
Restricted Stock provided for in subsection (a) above shall be subject to any
limitations in any Change in Control Agreement between the holder and the
Company.
14. AMENDMENT OF THE PLAN AND STOCK AWARDS.
(a) Amendment of Plan. Subject to the Bankruptcy Plan, the Board at any
time, and from time to time, may amend the Plan. However, except as provided in
Section 12 relating to adjustments upon changes in Common Stock, no amendment
shall be effective unless approved by the stockholders of the Company to the
extent stockholder approval is necessary to satisfy the requirements of Section
422 of the Code, Rule 16b-3 or any Nasdaq or securities exchange listing
requirements. With respect to Stock Awards issued prior to any such Plan
amendment and still outstanding at any time thereafter, except as provided in
subsection 14(d) below, such amendments shall apply to such Stock Awards.
(b) Stockholder Approval. The Board may, in its sole discretion, subject
to the Bankrupcy Plan, 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 certain executive
officers.
(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 Participant and (ii) the Participant
consents in writing.
-12-
(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 Participant and
(ii) the Participant consents in writing.
15. 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 date the Plan is adopted by the Board or approved by
the stockholders of the Company, whichever is earlier. No Stock Awards may be
granted under the Plan while the Plan is suspended or after it is terminated.
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 Participant.
16. EFFECTIVE DATE OF PLAN.
The Plan is effective on the "Effective Date" as defined in the Bankruptcy
Plan , as such Plan may be modified from time to time, subject to the approval
by the affirmative votes of the holders of a majority of the securities of the
Company entitled to vote.
17. FORM S-8 REGISTRATION STATEMENT.
The Company intends to file a Registration Statement on Form S-8, or such
other form as counsel for the Company determines appropriate, to register the
issuance of shares by the Company upon the exercise of any options granted
pursuant to the Plan. Prior to the filing and effectiveness of the Registration
Statement, any shares issued upon the exercise of options granted pursuant to
the Plan to U.S. resident shareholders will be issued pursuant to Section 4(2)
of the Securities Act of 1933 and will be subject to appropriate restrictions on
transfer. Any shares issued upon the exercise of options granted pursuant to the
Plan to persons who are not U.S. Persons, as defined in Regulation S promulgated
pursuant to the Securities Act of 1933, shall be issued in reliance of
Regulation S and subject to the conditions of Regulation S including the
agreement of the Participants not to resell the shares to a U.S. Person or for
the account or benefit of a U.S. Person until expiry of the distribution
compliance period.
18. GOVERNING LAW.
The law of the State of California shall govern all questions concerning
the construction, validity and interpretation of this Plan, without regard to
such state's conflict of laws rules.
-13-
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘10KSB’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 11/16/11 | | 1 |
| Filed on: | | 1/13/03 | | | | | | | 10KSB, 10QSB |
| For Period End: | | 9/29/01 |
| | 9/24/01 | | 1 |
| | 7/6/01 | | 1 |
| List all Filings |
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