Annual Report — Form 10-K Filing Table of Contents
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1: 10-K Annual Report HTML 1.14M
2: EX-10.03 Material Contract HTML 67K
3: EX-10.04 Material Contract HTML 79K
4: EX-10.07 Material Contract HTML 32K
5: EX-10.09 Material Contract HTML 38K
6: EX-10.10 Material Contract HTML 70K
7: EX-10.12 Material Contract HTML 89K
8: EX-10.13 Material Contract HTML 62K
9: EX-10.15 Material Contract HTML 56K
10: EX-21.01 Subsidiaries of the Registrant HTML 75K
11: EX-23.01 Consent of Experts or Counsel HTML 11K
12: EX-31.01 Certification per Sarbanes-Oxley Act (Section 302) HTML 13K
13: EX-31.02 Certification per Sarbanes-Oxley Act (Section 302) HTML 13K
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1. PURPOSE. The purpose of
this Plan is to provide incentives to attract, retain and
motivate eligible persons whose present and potential
contributions are important to the success of the Company, its
Parent and Subsidiaries, by offering them an opportunity to
participate in the Company’s future performance through
awards of Options. Capitalized terms not defined in the text are
defined in Section 21 hereof. This Plan is intended to be a
written compensatory benefit plan within the meaning of
Rule 701 promulgated under the Securities Act.
2. SHARES SUBJECT TO THE PLAN.
2.1 Number of
Shares Available. Subject to
Sections 2.2 and 16 hereof, the total number of Shares
reserved and available for grant and issuance pursuant to this
Plan will be Two Million One Hundred Ninety-Eight Shares or such
lesser number of Shares as permitted under
Section 260.140.45 of Title 10 of the California Code
of Regulations. Subject to Sections 2.2 and 16 hereof,
Shares that are subject to issuance upon exercise of an Option
but cease to be subject to such Option for any reason other than
exercise of such Option will be available for grant and issuance
in connection with future Options under this Plan. At all times
the Company will reserve and keep available a sufficient number
of Shares as will be required to satisfy the requirements of all
outstanding Options granted under this Plan.
2.2 Adjustment of Shares.
(a) In the event that any dividend or other distribution,
reorganization, merger, consolidation, combination, repurchase,
or exchange of Common Stock or other securities of the Company,
or other change in the corporate structure of the Company
affecting the Company’s Common Stock (other than an Equity
Restructuring) occurs such that an adjustment is determined by
the Committee (in its sole discretion) to be appropriate in
order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan,
then the Committee shall, in such manner as it may deem
equitable, adjust the number and class of Common Stock which may
be delivered under the Plan, the purchase price per Share and
the number of Shares covered by each Option which has not yet
been exercised, and the numerical limits of Section 2.1.
(b) In connection with the occurrence of any Equity
Restructuring, and notwithstanding anything to the contrary in
Sections 2.2(a) and 16, the number and type of
securities subject to each outstanding Option and the exercise
price thereof will be equitably adjusted by the Committee. The
adjustments provided under this Section 2.2(b) shall be
nondiscretionary and shall be final and binding on the affected
Participant and the Company.
3. ELIGIBILITY. ISOs (as
defined in Section 5 hereof) may be granted only to
employees (including officers and directors who are also
employees) of the Company or of a Parent or Subsidiary of the
Company. NQSOs (as defined in Section 5 hereof) may be
granted to employees, officers, directors and consultants of the
Company or of any Parent or Subsidiary of the Company; provided
such consultants render bona fide services not in connection
with the offer and sale of securities in a capital-raising
transaction. A person may be granted more than one Option under
this Plan.
4. ADMINISTRATION.
4.1 Committee
Authority. This Plan will be administered by
the Committee or the Board acting as the Committee. Subject to
the general purposes, terms and conditions of this Plan, and to
the direction of the
Board, the Committee has full power to implement and carry out
this Plan. Without limitation, the Committee has the
authority to:
(a) construe and interpret this Plan, any Stock Option
Agreement or Exercise Agreement (each as defined in
Section 5 hereof) and any other agreement or document
executed pursuant to this Plan;
(b) prescribe, amend and rescind rules and regulations
relating to this Plan;
(c) select persons to receive Options;
(d) determine the form and terms of Options;
(e) determine the number of Shares or other consideration
subject to Options;
(f) determine whether Options will be granted singly, in
combination with, in tandem with, in replacement of, or as
alternatives to, any Options granted under this Plan or any
awards under any other incentive or compensation plan of the
Company or any Parent or Subsidiary of the Company;
(g) grant waivers of Plan or Option conditions;
(h) determine the vesting and exercisability of Options;
(i) correct any defect, supply any omission, or reconcile
any inconsistency in this Plan, any Option or any Stock Option
Agreement or Exercise Agreement (each as defined in
Section 5 hereof);
(j) determine whether an Option has been earned; and
(k) make all other determinations necessary or advisable
for the administration of this Plan.
4.2 Committee
Discretion. Any determination made by the
Committee with respect to any Option will be made in its sole
discretion at the time of grant of the Option or, unless in
contravention of any express term of this Plan or Option, and
subject to Section 5.9 hereof, at any later time, and such
determination will be final and binding on the Company and on
all persons having an interest in any Option under this Plan.
The Committee may delegate to one or more officers of the
Company the authority to grant Options under this Plan.
5. OPTIONS. The Committee
may grant Options to eligible persons and will determine whether
such Options will be Incentive Stock Options within the meaning
of the Code (“ISOs”) or Nonqualified
Stock Options (“NQSOs”), the number of
Shares subject to the Option, the Exercise Price of the Option,
the period during which the Option may be exercised, and all
other terms and conditions of the Option, subject to the
following:
5.1 Form of Option
Grant. Each Option granted under this Plan
will be evidenced by an Agreement which will expressly identify
the Option as an ISO or an NQSO (“Stock Option
Agreement”), and will be in such form and contain
such provisions (which need not be the same for each
Participant) as the Committee may from time to time approve, and
which will comply with and be subject to the terms and
conditions of this Plan.
5.2 Date of Grant. The date
of grant of an Option will be the date on which the Committee
makes the determination to grant such Option, unless otherwise
specified by the Committee. The Stock Option Agreement and a
copy of this Plan will be delivered to the Participant within a
reasonable time after the granting of the Option.
5.3 Exercise Period. Options
may be exercisable immediately (subject to repurchase pursuant
to Section 10 hereof) or may be exercisable within the
times or upon the events determined by the Committee as set
forth in the Stock Option Agreement governing such Option;
provided, however, that no Option will be exercisable after the
expiration of ten (10) years from the date the Option is
granted; and provided further that no ISO granted to a person
who directly or by attribution owns more than ten percent (10%)
of the total combined voting power of all classes of stock of
the Company or of any Parent or Subsidiary of the Company(“Ten Percent Shareholder”) will be
exercisable after the expiration of five (5) years from the
date the ISO is granted. The Committee may provide for Options
to become exercisable at one time or from time to time,
periodically or otherwise, in such number of Shares or
percentage of Shares as the Committee determines. Subject to
earlier termination of the Option as provided herein, each
Participant who is not an officer, director or consultant of the
Company or of a Parent or Subsidiary of the Company shall have
the right to exercise an
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Option granted hereunder at the rate of at least twenty percent
(20%) per year over five (5) years from the date such
Option is granted.
5.4 Exercise Price. The
Exercise Price of an Option will be determined by the Committee
when the Option is granted and may not be less than eighty five
percent (85%) of the Fair Market Value of the Shares on the date
of grant; provided that (a) the Exercise Price of an ISO
will not be less than one hundred percent (100%) of the Fair
Market Value of the Shares on the date of grant and (b) the
Exercise Price of any Option granted to a Ten Percent
Shareholder will not be less than one hundred ten percent (110%)
of the Fair Market Value of the Shares on the date of grant.
Payment for the Shares purchased must be made in accordance with
Section 6 hereof.
5.5 Method of
Exercise. Options may be exercised only by
delivery to the Company of a written stock option exercise
agreement (the “Exercise Agreement”) in
a form approved by the Committee (which need not be the same for
each Participant), stating the number of Shares being purchased,
the restrictions imposed on the Shares purchased under such
Exercise Agreement, if any, and such representations and
agreements regarding Participant’s investment intent and
access to information and other matters, if any, as may be
required or desirable by the Company to comply with applicable
securities laws, together with payment in full of the Exercise
Price, and any applicable taxes, for the number of Shares being
purchased.
5.6 Termination. Subject to
earlier termination pursuant to Sections 16 or 17 hereof
and notwithstanding the exercise periods set forth in the Stock
Option Agreement, exercise of an Option will always be subject
to the following:
(a) If the Participant is Terminated for any reason except
death, Disability or Cause, then the Participant may exercise
such Participant’s Options, only to the extent that such
Options are exercisable on the Termination Date and such Options
must be exercised by the Participant, if at all, as to all or
some of the Vested Shares calculated as of the Termination Date,
within three (3) months after the Termination Date (or
within such shorter time period, not less than thirty
(30) days after the Termination Date, or such longer time
period not exceeding five (5) years after the Termination
Date as may be determined by the Committee, with any exercise
after three (3) months after the Termination Date deemed to
be an NQSO), but in any event, no later than the expiration date
of the Options.
(b) If the Participant is Terminated because of
Participant’s death or Disability (or the Participant dies
within three (3) months after Participant’s
Termination other than for Cause), then Participant’s
Options may be exercised, only to the extent that such Options
are exercisable by Participant on the Termination Date and must
be exercised by Participant (or Participant’s legal
representative or authorized assignee), if at all, as to all or
some of the Vested Shares calculated as of the Termination Date,
within twelve (12) months after the Termination Date (or
within such shorter time period, not less than six
(6) months after the Termination Date, or such longer time
period not exceeding five (5) years after the Termination
Date as may be determined by the Committee, with any exercise
after (i) three (3) months after the Termination Date
when the Termination is for any reason other than the
Participant’s death or disability, within the meaning of
Code Section 22(e)(3), or (ii) twelve (12) months
after the Termination Date when the Termination is because of
Participant’s disability, within the meaning of Code
Section 22(e)(3), deemed to be an NQSO), but in any event
no later than the expiration date of the Options.
(c) If the Participant is terminated for Cause, then
Participant’s Options shall expire on such
Participant’s Termination Date, or at such later time and
on such conditions as are determined by the Committee.
5.7 Limitations on
Exercise. The Committee may specify a
reasonable minimum number of Shares that may be purchased on
exercise of an Option, provided that such minimum number will
not prevent Participant from exercising the Option for the full
number of Shares for which it is then exercisable.
5.8 Limitations on ISOs. The
aggregate Fair Market Value (determined as of the date of grant)
of Shares with respect to which ISOs are exercisable for the
first time by a Participant during any calendar year (under this
Plan or under any other incentive stock option plan of the
Company or any Parent or Subsidiary of
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the Company) will not exceed $100,000. If the Fair Market Value
of Shares on the date of grant with respect to which ISOs are
exercisable for the first time by a Participant during any
calendar year exceeds $100,000, then the Options for the first
$100,000 worth of Shares to become exercisable in such calendar
year will be ISOs and the Options for the amount in excess of
$100,000 that become exercisable in that calendar year will be
NQSOs. In the event that the Code or the regulations promulgated
thereunder are amended after the Effective Date (as defined in
Section 17 hereof) to provide for a different limit on the
Fair Market Value of Shares permitted to be subject to ISOs,
then such different limit will be automatically incorporated
herein and will apply to any Options granted after the effective
date of such amendment.
5.9 Modification, Extension or
Renewal. The Committee may modify, extend or
renew outstanding Options and authorize the grant of new Options
in substitution therefor, provided that any such action may not,
without the written consent of a Participant, impair any of such
Participant’s rights under any Option previously granted.
Any outstanding ISO that is modified, extended, renewed or
otherwise altered will be treated in accordance with
Section 424(h) of the Code. Subject to Section 5.10
hereof, the Committee may reduce the Exercise Price of
outstanding Options without the consent of Participants affected
by a written notice to them; provided, however, that the
Exercise Price may not be reduced below the minimum Exercise
Price that would be permitted under Section 5.4 hereof for
Options granted on the date the action is taken to reduce the
Exercise Price.
5.10 No
Disqualification. Notwithstanding any other
provision in this Plan, no term of this Plan relating to ISOs
will be interpreted, amended or altered, nor will any discretion
or authority granted under this Plan be exercised, so as to
disqualify this Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify
any ISO under Section 422 of the Code.
6. PAYMENT FOR SHARE PURCHASES.
6.1 Payment. Payment for
Shares purchased pursuant to this Plan may be made in cash (by
check) or, where expressly approved for the Participant by the
Committee and where permitted by law:
(a) by cancellation of indebtedness of the Company to the
Participant;
(b) by surrender of shares that: (i) either
(A) have been owned by the Participant for more than six
(6) months and have been paid for within the meaning of SEC
Rule 144 (and, if such shares were purchased from the
Company by use of a promissory note, such note has been fully
paid with respect to such shares) or (B) were obtained by
the Participant in the public market and (ii) are clear of
all liens, claims, encumbrances or security interests;
(c) by tender of a full recourse promissory note having
such terms as may be approved by the Committee and bearing
interest at a rate sufficient to avoid imputation of income
under Sections 483 and 1274 of the Code; provided, however,
that Participants who are not employees or directors of the
Company will not be entitled to purchase Shares with a
promissory note unless the note is adequately secured by
collateral other than the Shares.
(d) by waiver of compensation due or accrued to the
Participant for services rendered;
(e) provided that a public market for the Company’s
stock exists:
(1) through a “same day sale” commitment from the
Participant and a broker-dealer that is a member of the National
Association of Securities Dealers (an “NASD
Dealer”) whereby the Participant irrevocably elects
to exercise the Option and to sell a portion of the Shares so
purchased to pay for the Exercise Price, and whereby the NASD
Dealer irrevocably commits upon receipt of such Shares to
forward the Exercise Price directly to the Company; or
(2) through a “margin” commitment from the
Participant and an NASD Dealer whereby the Participant
irrevocably elects to exercise the Option and to pledge the
Shares so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the amount of the
Exercise Price, and whereby the NASD Dealer irrevocably commits
upon receipt of such Shares to forward the Exercise Price
directly to the Company; or
(f) by any combination of the foregoing.
6.2 Loan Guarantees. The
Committee may help the Participant pay for Shares purchased
under this Plan by authorizing a guarantee by the Company of a
third-party loan to the Participant.
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7. WITHHOLDING TAXES.
7.1 Withholding
Generally. Whenever Shares are to be issued
in satisfaction of Options granted under this Plan, the Company
may require the Participant to remit to the Company an amount
sufficient to satisfy federal, state and local withholding tax
requirements prior to the delivery of any certificate or
certificates for such Shares. Whenever, under this Plan,
payments in satisfaction of Options are to be made in cash, such
payment will be net of an amount sufficient to satisfy federal,
state, and local withholding tax requirements.
7.2 Stock Withholding. When,
under applicable tax laws, the Participant incurs tax liability
in connection with the exercise or vesting of any Option that is
subject to tax withholding and the Participant is obligated to
pay the Company the amount required to be withheld, the
Committee may in its sole discretion allow the Participant to
satisfy the minimum withholding tax obligation by electing to
have the Company withhold from the Shares to be issued that
number of Shares having a Fair Market Value equal to the minimum
amount required to be withheld, determined on the date that the
amount of tax to be withheld is to be determined. All elections
by a Participant to have Shares withheld for this purpose will
be made in accordance with the requirements established by the
Committee and be in writing in a form acceptable to the
Committee.
8. PRIVILEGES OF STOCK
OWNERSHIP.
8.1 Voting and Dividends. No
Participant will have any of the rights of a shareholder with
respect to any Shares until the Shares are issued to the
Participant. After Shares are issued to the Participant, the
Participant will be a shareholder and have all the rights of a
shareholder with respect to such Shares, including the right to
vote and receive all dividends or other distributions made or
paid with respect to such Shares; provided, that the Participant
will have no right to retain such stock dividends or stock
distributions with respect to Unvested Shares that are
repurchased pursuant to Section 10 hereof. The Company will
comply with Section 260.140.1 of Title 10 of the
California Code of Regulations with respect to the voting rights
of Common Stock.
8.2 Financial
Statements.The Company will provide
financial statements to each Participant prior to such
Participant’s purchase of Shares under this Plan, and to
each Participant annually during the period such Participant has
Options outstanding, or as otherwise required under
Section 260.140.46 of Title 10 of the California Code
of Regulations. Notwithstanding the foregoing, the Company will
not be required to provide such financial statements to
Participants when issuance is limited to key employees whose
services in connection with the Company assure them access to
equivalent information.
9. TRANSFERABILITY. Options
granted under this Plan, and any interest therein, will not be
transferable or assignable by Participant, and may not be made
subject to execution, attachment or similar process, otherwise
than by will or by the laws of descent and distribution. During
the lifetime of the Participant an Option will be exercisable
only by the Participant or Participant’s legal
representative and any elections with respect to an Option may
be made only by the Participant or Participant’s legal
representative.
10. RESTRICTIONS ON SHARES.
10.1 Right of First
Refusal. At the discretion of the Committee,
the Company may reserve to itself
and/or its
assignee(s) in the Stock Option Agreement a right of first
refusal to purchase all Shares that a Participant (or a
subsequent transferee) may propose to transfer to a third party,
unless otherwise not permitted by Section 25102(o) of the
California Corporations Code, provided, that such right of first
refusal terminates upon the Company’s initial public
offering of Common Stock pursuant to an effective registration
statement filed under the Securities Act.
10.2 Right of Repurchase. At
the discretion of the Committee, the Company may reserve to
itself
and/or its
assignee(s) in the Stock Option Agreement a right to repurchase
Unvested Shares held by a Participant following such
Participant’s Termination at any time within ninety
(90) days after Participant’s Termination Date (or in
the case of securities issued upon exercise of an Option after
the Participant’s Termination Date, within ninety
(90) days after the date of such exercise) for cash
and/or
cancellation of purchase money indebtedness, at the
Participant’s Exercise Price, provided, that to the extent
the Participant is not an officer, director or consultant of the
Company or of a Parent or Subsidiary of the Company such right
to
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repurchase Unvested Shares lapses at the rate of at least twenty
percent (20%) per year over five (5) years from the date of
grant of the Option.
10.2 Right of Repurchase. At
the discretion of the Committee, the Company may reserve to
itself
and/or its
assignee(s) in the Stock Option Agreement a right to repurchase
Shares held by a Participant following such Participant’s
Termination at any time within ninety (90) days after
Participant’s Termination Date (or in the case of
securities issued upon exercise of an Option after the
Participant’s Termination Date, within ninety
(90) days after the date of such exercise) for cash
and/or
cancellation of purchase money indebtedness, at: (a) with
respect to Vested Shares, the Fair Market Value of such Shares
on Participant’s Termination Date, provided, that such
right to repurchase Vested Shares terminates when the
Company’s securities become publicly traded; or
(b) with respect to Unvested Shares, the Participant’s
Exercise Price, provided, that to the extent the Participant is
not an officer, director or consultant of the Company or of a
Parent or Subsidiary of the Company such right to repurchase
Unvested Shares at the Exercise Price lapses at the rate of at
least twenty percent (20%) per year over five (5) years
from the date of grant of the Option.
11. CERTIFICATES. All
certificates for Shares or other securities delivered under this
Plan will be subject to such stock transfer orders, legends and
other restrictions as the Committee may deem necessary or
advisable, including restrictions under any applicable federal,
state or foreign securities law, or any rules, regulations and
other requirements of the SEC or any stock exchange or automated
quotation system upon which the Shares may be listed or quoted.
12. ESCROW; PLEDGE OF
SHARES. To enforce any restrictions on a
Participant’s Shares, the Committee may require the
Participant to deposit all certificates representing Shares,
together with stock powers or other instruments of transfer
approved by the Committee, appropriately endorsed in blank, with
the Company or an agent designated by the Company to hold in
escrow until such restrictions have lapsed or terminated, and
the Committee may cause a legend or legends referencing such
restrictions to be placed on the certificates. Any Participant
who is permitted to execute a promissory note as partial or full
consideration for the purchase of Shares under this Plan will be
required to pledge and deposit with the Company all or part of
the Shares so purchased as collateral to secure the payment of
Participant’s obligation to the Company under the
promissory note; provided, however, that the Committee may
require or accept other or additional forms of collateral to
secure the payment of such obligation and, in any event, the
Company will have full recourse against the Participant under
the promissory note notwithstanding any pledge of the
Participant’s Shares or other collateral. In connection
with any pledge of the Shares, Participant will be required to
execute and deliver a written pledge agreement in such form as
the Committee will from time to time approve. The Shares
purchased with the promissory note may be released from the
pledge on a pro rata basis as the promissory note is paid.
13. EXCHANGE AND BUYOUT OF
OPTIONS. The Committee may, at any time or
from time to time, authorize the Company, with the consent of
the respective Participants, to issue new Options in exchange
for the surrender and cancellation of any or all outstanding
Options. The Committee may at any time buy from a Participant an
Option previously granted with payment in cash, shares of Common
Stock of the Company (including restricted stock) or other
consideration, based on such terms and conditions as the
Committee and the Participant may agree.
14. SECURITIES LAW AND OTHER REGULATORY
COMPLIANCE. This Plan is intended to comply
with Section 25102(o) of the California Corporations Code.
Any provision of this Plan which is inconsistent with
Section 25102(o) shall, without further act or amendment by
the Company or the Board, be reformed to comply with the
requirements of Section 25102(o). An Option will not be
effective unless such Option is in compliance with all
applicable federal and state securities laws, rules and
regulations of any governmental body, and the requirements of
any stock exchange or automated quotation system upon which the
Shares may then be listed or quoted, as they are in effect on
the date of grant of the Option and also on the date of exercise
or other issuance. Notwithstanding any other provision in this
Plan, the Company will have no obligation to issue or deliver
certificates for Shares under this Plan prior to
(a) obtaining any approvals from governmental agencies that
the Company determines are necessary or advisable,
and/or
(b) compliance with any exemption, completion of any
registration or other qualification of such Shares under any
state or federal law or ruling of any governmental body that the
Company determines to be necessary or advisable. The Company
will be under no obligation to register the Shares with the SEC
or to effect compliance with the exemption, registration,
qualification or listing requirements of any state securities
laws, stock exchange or automated quotation system, and the
Company will have no liability for any inability or failure to
do so.
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15. NO OBLIGATION TO
EMPLOY. Nothing in this Plan or any Option
granted under this Plan will confer or be deemed to confer on
any Participant any right to continue in the employ of, or to
continue any other relationship with, the Company or any Parent
or Subsidiary of the Company or limit in any way the right of
the Company or any Parent or Subsidiary of the Company to
terminate Participant’s employment or other relationship at
any time, with or without cause.
16. CORPORATE TRANSACTIONS.
16.1 Assumption or Replacement of Options by
Successor or Acquiring Company. In the event
of (a) a dissolution or liquidation of the Company,
(b) a merger or consolidation in which the Company is not
the surviving corporation (otherthan a merger or
consolidation with a wholly-owned subsidiary, a reincorporation
of the Company in a different jurisdiction, or other transaction
in which there is no substantial change in the shareholders of
the Company or their relative stock holdings and the Options
granted under this Plan are assumed, converted or replaced by
the successor or acquiring corporation, which assumption,
conversion or replacement will be binding on all Participants),
(c) a merger in which the Company is the surviving
corporation but after which the shareholders of the Company
immediately prior to such merger (other than any shareholder
which merges with the Company in such merger, or which owns or
controls another corporation which merges, with the Company in
such merger) cease to own their shares or other equity interests
in the Company, or (d) the sale of all or substantially all
of the assets of the Company, any or all outstanding Options may
be assumed, converted or replaced by the successor or acquiring
corporation (if any), which assumption, conversion or
replacement will be binding on all Participants. In the
alternative, the successor or acquiring corporation may
substitute equivalent Options or provide substantially similar
consideration to Participants as was provided to shareholders
(after taking into account the existing provisions of the
Options). The successor or acquiring corporation may also issue,
in place of outstanding Shares of the Company held by the
Participant, substantially similar shares or other property
subject to repurchase restrictions and other provisions no less
favorable to the Participant than those which applied to such
outstanding Shares immediately prior to such transaction
described in this Section 16.1. In the event such successor
or acquiring corporation (if any) does not assume or substitute
Options, as provided above, pursuant to a transaction described
in this Section 16.1, then notwithstanding any other
provision in this Plan to the contrary, the vesting of such
Options will accelerate and the Options will become exercisable
in full prior to the consummation of such event at such times
and on such conditions as the Committee determines, and if such
Options are not exercised prior to the consummation of the
corporate transaction, they shall terminate in accordance with
the provisions of this Plan.
16.2 Other Treatment of
Options. Subject to any greater rights
granted to Participants under the foregoing provisions of this
Section 16, in the event of the occurrence of any
transaction described in Section 16.1 hereof, any
outstanding Options will be treated as provided in the
applicable agreement or plan of merger, consolidation,
dissolution, liquidation or sale of assets.
16.3 Assumption of Options by the
Company.The Company, from time to time, also
may substitute or assume outstanding options granted by another
company, whether in connection with an acquisition of such other
company or otherwise, by either (a) granting an Option
under this Plan in substitution of such other company’s
option, or (b) assuming such option as if it had been
granted under this Plan if the terms of such assumed option
could be applied to an Option granted under this Plan. Such
substitution or assumption will be permissible if the holder of
the substituted or assumed option would have been eligible to be
granted an Option under this Plan if the other company had
applied the rules of this Plan to such grant. In the event the
Company assumes an option granted by another company, the terms
and conditions of such option will remain unchanged
(except that the exercise price and the number and nature
of shares issuable upon exercise of any such option will be
adjusted appropriately pursuant to Section 424(a) of the
Code). In the event the Company elects to grant a new Option
rather than assuming an existing option, such new Option may be
granted with a similarly adjusted Exercise Price.
17. ADOPTION AND SHAREHOLDER
APPROVAL. This Plan will become effective on
the date that it is adopted by the Board (the
“Effective Date”). This Plan will be
approved by the shareholders of the Company (excluding Shares
issued pursuant to this Plan), consistent with applicable laws,
within twelve (12) months before or after the Effective
Date. Upon the Effective Date, the Board may grant Options
pursuant to this Plan; provided, however, that:
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(a) no Option may be exercised prior to initial shareholder
approval of this Plan, and (b) no Option granted pursuant
to an increase in the number of Shares approved by the Board
shall be exercised prior to the time such increase has been
approved by the shareholders of the Company. In the event that
initial shareholder approval is not obtained within twelve
(12) months before or after this Plan is adopted by the
Board, all Options granted hereunder will be canceled.
18. TERM OF PLAN/GOVERNING
LAW. Unless earlier terminated as provided
herein, this Plan will terminate ten (10) years from the
Effective Date or, if earlier, the date of shareholder approval.
This Plan and all agreements hereunder shall be governed by and
construed in accordance with the laws of the State of California.
19. AMENDMENT OR TERMINATION OF
PLAN. Subject to Section 5.9 hereof, the
Board may at any time terminate or amend this Plan in any
respect, including without limitation amendment of any form of
Stock Option Agreement or instrument to be executed pursuant to
this Plan; provided, however, that the Board will not, without
the approval of the shareholders of the Company, amend this Plan
in any manner that requires such shareholder approval pursuant
to Section 25102(o) of the California Corporations Code or
the Code or the regulations promulgated thereunder as such
provisions apply to ISO plans.
20. NONEXCLUSIVITY OF THE
PLAN. Neither the adoption of this Plan by
the Board, the submission of this Plan to the shareholders of
the Company for approval, nor any provision of this Plan will be
construed as creating any limitations on the power of the Board
to adopt such additional compensation arrangements as it may
deem desirable, including, without limitation, the granting of
stock options or any other equity awards outside of this Plan,
and such arrangements may be either generally applicable or
applicable only in specific cases.
21. DEFINITIONS. As used in
this Plan, the following terms will have the following meanings:
“Board” means the Board of Directors of the
Company.
“Cause” means Termination because of
(i) any willful material violation by the Participant of
any law or regulation applicable to the business of the Company
or a Parent or Subsidiary of the Company, the Participant’s
conviction for or guilty plea to, a felony or a crime involving
moral turpitude or any willful perpetration by the Participant
of a common law fraud, (ii) the Participant’s
commission of an act of personal dishonesty which involves a
personal profit in connection with the Company or any other
entity having a business relationship with the Company,
(iii) any material breach by the Participant of any
material provision of any agreement or understanding between the
Company or a Parent or Subsidiary of the Company and the
Participant regarding the terms of the Participant’s
service as an employee, director or consultant to the Company or
a Parent or Subsidiary of the Company, including without
limitation, the willful and continued failure or refusal of the
Participant to perform the material duties required of such
Participant as an employee, director or consultant of the
Company or a Parent or Subsidiary of the Company, other than as
a result of having a Disability, or a breach of any applicable
invention assignment and confidentiality agreement or similar
agreement between the Company or a Parent or Subsidiary of the
Company and the Participant, (iv) Participant’s
intentional disregard of the policies of the Company or a Parent
or Subsidiary of the Company so as to cause loss, damage or
injury to the property, reputation or employees of the Company
or a Parent or Subsidiary of the Company, or (v) any other
misconduct by the Participant which is materially injurious to
the financial condition or business reputation of, or is
otherwise materially injurious to, the Company or a Parent or
Subsidiary of the Company.
“Code” means the Internal Revenue Code of 1986,
as amended.
“Committee” means the committee appointed by
the Board to administer this Plan, or if no committee is
appointed, the Board.
“Company” means eBay, Inc. or any successor or
acquiring corporation.
“Disability” means a disability, whether
temporary or permanent, partial or total, as determined by the
Committee.
“Equity Restructuring” means a non-reciprocal
transaction (i.e. a transaction in which the Company does not
receive consideration or other resources in respect of the
transaction approximately equal to and in exchange for the
consideration or resources the Company is relinquishing in such
transaction) between the Company and its stockholders, such as a
stock split, spin-off, rights offering, nonrecurring stock
dividend or
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recapitalization through a large, nonrecurring cash dividend,
that affects the shares of the Company’s Common Stock (or
other securities of the Company) or the share price of the
Company’s Common Stock (or other securities) and causes a
change in the per share value of the Shares underlying
outstanding Options.
“Exercise Price” means the price at which a
holder of an Option may purchase the Shares issuable upon
exercise of the Option.
“Fair Market Value” means, as of any date, the
value of a share of the Company’s Common Stock determined
as follows:
(a) if such Common Stock is then quoted on the Nasdaq
National Market, its closing price on the Nasdaq National Market
on the date of determination as reported in The Wall Street
Journal;
(b) if such Common Stock is publicly traded and is then
listed on a national securities exchange, its closing price on
the date of determination on the principal national securities
exchange on which the Common Stock is listed or admitted to
trading as reported in The Wall Street Journal;
(c) if such Common Stock is publicly traded but is not
quoted on the Nasdaq National Market nor listed or admitted to
trading on a national securities exchange, the average of the
closing bid and asked prices on the date of determination as
reported by The Wall Street Journal (or, if not so
reported, as otherwise reported by any newspaper or other source
as the Board may determine); or
(d) if none of the foregoing is applicable, by the
Committee in good faith.
“Option” means an award of an option to
purchase Shares pursuant to Section 5 hereof.
“Parent” means any corporation (other than the
Company) in an unbroken chain of corporations ending with the
Company if each of such corporations other than the Company owns
stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the
other corporations in such chain.
“Participant” means a person who receives an
Option under this Plan.
“Plan” means this eBay, Inc. 1997 Stock Option
Plan, as amended from time to time.
“SEC” means the Securities and Exchange
Commission.
“Securities Act” means the Securities Act of
1933, as amended.
“Shares” means shares of the Company’s
Common Stock reserved for issuance under this Plan, as adjusted
pursuant to Sections 2 and 16 hereof, and any successor
security.
“Subsidiary” or “Subsidiaries”
means any corporation or corporations (other than the Company)
in an unbroken chain of corporations beginning with the Company
if each of the corporations other than the last corporation in
the unbroken chain owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
“Termination” or “Terminated”
means, for purposes of this Plan with respect to a Participant,
that the Participant has for any reason ceased to provide
services as an employee, officer, director or consultant to the
Company or a Parent or Subsidiary of the Company. A Participant
will not be deemed to have ceased to provide services in the
case of (i) sick leave, (ii) military leave, or
(iii) any other leave of absence approved by the Committee,
provided that such leave is for a period of not more than ninety
(90) days, unless reinstatement (or, in the case of an
employee with an ISO, reemployment) upon the expiration of such
leave is guaranteed by contract or statute or unless provided
otherwise pursuant to formal policy adopted from time to time by
the Company and issued and promulgated in writing. In the case
of any Participant on (i) sick leave, (ii) military
leave or (iii) an approved leave of absence, the Committee
may make such provisions respecting suspension of vesting of the
Option while the Participant is on leave from the Company or a
Parent or Subsidiary of the Company as the Committee may deem
appropriate, except that in no event may an Option be exercised
after the expiration of the term set forth in the Stock Option
Agreement. The Committee will have sole discretion to determine
whether a Participant has ceased to provide services and the
effective date on which the Participant ceased to provide
services (the “Termination Date”).
“Unvested Shares” means “Unvested
Shares” as defined in Section 2.2 of the Stock Option
Agreement.
“Vested Shares” means “Vested Shares”
as defined in Section 2.2 of the Stock Option Agreement.
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Dates Referenced Herein and Documents Incorporated by Reference