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Exhibit
10.2
AMENDMENT TO
THE
KINTERA,
INC.
2000 STOCK OPTION
PLAN
This Amendment to the
Kintera, Inc. 2000 Stock Option Plan (the “Plan”) is
effective as of September 26, 2003.
Section 4.1 of the plan
shall be amended to state in its entirety as follows:
“4.1 Maximum Number of
Shares Issuable. Subject to adjustment as provided in
Section 4.2, the maximum aggregate number of shares of Stock
that may be issued under the plan shall be six million one hundred
twenty-eight thousand (6,128,000) and shall consist of
authorized but unissued or reacquired shares of Stock or any
combination thereof. If an outstanding Option for any reason
expires or is terminated or canceled or if shares of Stock are
acquired upon the exercise of an Option subject to a Company
repurchase option and are repurchased by the Company at the
Optionee’s exercise price, the shares of Stock allocable to
the unexercised portion of such Option or such repurchased shares
of Stock shall again be available for issuance under the Plan.
However, except as adjusted pursuant to Section 4.2, in no
event shall more than six million one hundred twenty-eight thousand
(6,128,000) shares of Stock be available for issuance pursuant
to the exercise of Incentive Stock Options (the “ISO Share
Issuance Limit”). Notwithstanding the foregoing, at any such
time as the offer and sale of securities pursuant to the Plan is
subject to compliance with Section 260.140.45 of Title 10 of
the California Code of Regulations (“Section
260.140.5”), the total number of shares of Stock issuable
upon the exercise of all outstanding Options (together with options
outstanding under any other stock option plan of the Company) and
the total number of shares provided for under any stock bonus or
similar plan of the Company shall not exceed thirty percent
(30%) (or such other higher percentage limitation as may be
approved by the stockholders of the Company pursuant to
Section 260.140.45) of the then outstanding shares of the
Company as calculated in accordance with the conditions and
exclusions of Section 260.140.45.”
IN WITNESS OF THE FOREGOING,
the undersigned Secretary of Kintera, Inc., a Delaware corporation
(the “Corporation”), certifies that the foregoing
amendment to the Kintera 2000 Stock Option Plan was duly adopted by
the Board of Directors of the Company on September 26, 2003
and approved by the stockholders of the Corporation on
October 30, 2003.
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/s/ ALLEN B.
GRUBER |
| Allen B.
Gruber, M.D. |
| Secretary |
A MENDMENT
N O . 2
TO
THE
K INTERA ,
I NC . A MENDED AND R
ESTATED 2000 S TOCK O
PTION P LAN
This Amendment to the
Kintera, Inc. 2000 Stock Option Plan (the “Plan”) is
effective as of July 21, 2005.
Section 3.3 of the Plan
is amended to add the following text as paragraph (j):
“(j) to:
(i) cancel Options issued and outstanding on or prior to
January 1, 2006 and that are not held by executive officers or
Directors, and grant in substitution therefore new Options having a
lower exercise price; and/or (ii) amend outstanding Options
issued and outstanding on or prior to January 1, 2006 and that
are not held by executive officers or Directors, to reduce the
exercise price thereof.”
IN WITNESS OF THE FOREGOING,
the undersigned Assistant Secretary of Kintera, Inc., a Delaware
corporation (the “Company”), certifies that the
foregoing amendment to the Kintera 2000 Stock Option Plan was duly
adopted by the Compensation Committee of the Board of Directors of
the Company on June 17, 2005 and approved by the stockholders
of the Company on July 21, 2005.
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/s/ Alexander
Fitzpatrick |
| Alexander
Fitzpatrick |
| Assistant
Secretary |
A MENDMENT
N O . 3
TO
THE
K INTERA ,
I NC . A MENDED AND R
ESTATED 2000 S TOCK O
PTION P LAN
This Amendment to the
Kintera, Inc. 2000 Stock Option Plan (the “Plan”) is
effective as of January 14, 2008.
Section 3.3 of the Plan
is amended to add the following text as paragraph (k):
to: amend outstanding Options
to reduce the exercise price thereof, subject to the following
conditions: (i) any such reduction in the exercise price shall
take place within one year of the date of stockholder approval of
this Amendment; and (ii) the exercise price of outstanding
Options shall be reduced to the price that is the greater of
(A) the price that is 10% higher than the trailing 30 trading
day average closing price of the Stock on the effective date of
such reduction in exercise price and (B) the price that is 5%
higher than the closing sales price of the Stock on the effective
date of such reduction in exercise price; provided ,
however , that in no event shall the price determined in
accordance with the foregoing be less than $2.25.
IN WITNESS OF THE FOREGOING,
the undersigned Secretary of Kintera, Inc., a Delaware corporation
(the “Company”), certifies that the foregoing amendment
to the Kintera 2000 Stock Option Plan was duly adopted by the Board
of Directors of the Company on November 26, 2007 and approved
by the stockholders of the Company on January 14,
2008.
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/s/ Alexander
Fitzpatrick |
| Alexander
Fitzpatrick |
| Secretary |
KINTERA,
INC.
2000 STOCK OPTION
PLAN
| 1. |
ESTABLISHMENT, PURPOSE AND TERM OF PLAN. |
1.1 Establishment. The
Kintera, Inc. 2000 Stock Option Plan (the “Plan”) is
hereby established effective as of October 16,
2000.
1.2 Purpose. The purpose of
the Plan is to advance the interests of the Participating Company
Group and its stockholders by providing an incentive to attract,
retain and reward persons performing services for the Participating
Company Group and by motivating such persons to contribute to the
growth and profitability of the Participating Company
Group.
1.3 Term of Plan. The Plan
shall continue in effect until the earlier of its termination by
the Board or the date on which all of the shares of Stock available
for issuance under the Plan have been issued and all restrictions
on such shares under the terms of the Plan and the agreements
evidencing Options granted under the Plan have lapsed. However, all
Options shall be granted, if at all, within ten (10) years
from the earlier of the date the Plan is adopted by the Board or
the date the Plan is duly approved by the stockholders of the
Company.
| 2. |
DEFINITIONS AND CONSTRUCTION. |
2.1 Definitions. Whenever
used herein, the following terms shall have their respective
meanings set forth below:
(a) “Board” means
the Board of Directors of the Company. If one or more Committees
have been appointed by the Board to administer the Plan,
“Board” also means such Committee(s).
(b) “Code” means
the Internal Revenue Code of 1986, as amended, and any applicable
regulations promulgated thereunder.
(c) “Committee”
means the Compensation Committee or other committee of the Board
duly appointed to administer the Plan and having such powers as
shall be specified by the Board. Unless the powers of the Committee
have been specifically limited, the Committee shall have all of the
powers of the Board granted herein, including, without limitation,
the power to amend or terminate the Plan at any time, subject to
the terms of the Plan and any applicable limitations imposed by
law.
(d) “Company”
means Kintera, Inc., a Delaware corporation, or any successor
corporation thereto.
(e) “Consultant”
means a person engaged under a written contract with the Company
that was executed by the Company’s Chief Executive Officer or
Chief Financial Officer to provide consulting or advisory services
(other than as an Employee or a Director) to a Participating
Company, provided that the identity of such person, the nature of
such services or the entity to which such services are provided
would not preclude the Company from offering or selling securities
to such person pursuant to the Plan in reliance on either the
exemption from registration provided by Rule 701 under the
Securities Act or, if the Company is required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act,
registration on a Form S-8 Registration Statement under the
Securities Act.
(f) “Director”
means a member of the Board or of the board of directors of any
other Participating Company.
(g) “Disability”
means the inability of the Optionee, in the opinion of a qualified
physician acceptable to the Company, to perform the major duties of
the Optionee’s position with the Participating Company Group
because of the sickness or injury of the Optionee.
(h) “Employee”
means any person treated as an employee (including an Officer or a
Director who is also treated as an employee) in the records of
Participating Company and, with respect to any Incentive Stock
Option granted to such person, who is an employee for purposes of
Section 422 of the Code; provided, however, that neither
service as a Director nor
payment of a director’s
fee shall be sufficient to constitute employment for purposes of
the Plan. The Company shall exercise its discretion as to whether
an individual has become or has ceased to be an Employee and the
effective date of such individual’s employment or termination
of employment, as the case may be. For purposes of an
individual’s rights, if any, under the Plan as of the time of
the Company’s determination, all such determinations by the
Company shall be final, binding and conclusive, notwithstanding
that the Company or any court of law or governmental agency
subsequently makes a contrary determination.
(i) “Exchange
Act” means the Securities Exchange Act of 1934, as
amended.
(j) “Fair Market
Value” means, as of any date, the value of a share of Stock
or other property as determined by the Board, in its discretion, or
by the Company, in its discretion, if such determination is
expressly allocated to the Company herein, subject to the
following:
(i) If, on such date, the
Stock is listed on a national or regional securities exchange or
market system, the Fair Market Value of a share of Stock shall be
the closing price of a share of Stock (or the mean of the closing
bid and asked prices of a share of Stock if the Stock is so quoted
instead) as quoted on the Nasdaq National Market, The Nasdaq
SmallCap Market or such other national or regional securities
exchange or market system constituting the primary market for the
Stock, as reported in The Wall Street Journal or such other source
as the Company deems reliable. If the relevant date does not fall
on a day on which the Stock has traded on such securities exchange
or market system, the date on which the Fair Market Value shall be
established shall be the last day on which the Stock was so traded
prior to the relevant date, or such other appropriate day as shall
be determined by the Board, in its discretion.
(ii) If, on such date, the
Stock is not listed on a national or regional securities exchange
or market system, the Fair Market Value of a share of Stock shall
be as determined by the Board in good faith without regard to any
restriction other than a restriction which, by its terms, will
never lapse.
(k) “Incentive Stock
Option” means an Option intended to be (as set forth in the
Option Agreement) and which qualifies as an incentive stock option
within the meaning of Section 422(b) of the Code.
(l) “Insider”
means an Officer, a Director of the Company or other person whose
transactions in Stock are subject to Section 16 of the
Exchange Act.
(m) “Nonstatutory Stock
Option” means an Option not intended to be (as set forth in
the Option Agreement) or which does not qualify as an Incentive
Stock Option.
(n) “Officer”
means any person designated by the Board as an officer of the
Company.
(o) “Option”
means a right to purchase Stock pursuant to the terms and
conditions of the Plan. An Option may be either an Incentive Stock
Option or a Nonstatutory Stock Option.
(p) “Option
Agreement” means a written agreement between the Company and
an Optionee setting forth the terms, conditions and restriction of
the Option granted to the Optionee and any shares acquired upon the
exercise thereof. An Option Agreement may consist of a form of
“Notice of Grant of Stock Option” and a form of
“Stock Option Agreement” incorporated therein by
reference, or such other form or forms as the Board may approve
from time to time.
(q) “Optionee”
means a person who has been granted one or more Options.
(r) “Parent
Corporation” means any present or future “parent
corporation” of the Company, as defined in
Section 424(e) of the Code.
(s) “Participating
Company” means the Company or any Parent Corporation or
Subsidiary Corporation.
(t) “Participating
Company Group” means, at any point in time, all corporations
collectively which are then Participating Companies.
(u) “Rule 16b-3”
means Rule 16b-3 under the Exchange Act, as amended from time to
time, or any successor rule or regulation.
(v) “Securities
Act” means the Securities Act of 1933, as amended.
(w) “Service”
means an Optionee’s employment or service with the
Participating Company Group, whether in the capacity of an
Employee, a Director or a Consultant. An Optionee’s Service
shall not be deemed to have terminated merely because of a change
in the capacity in which the Optionee renders Service to the
Participating Company Group or a change in the Participating
Company for which the Optionee renders such Service, provided that
there is no interruption or termination of the Optionee’s
Service. Furthermore, an Optionee’s Service with the
Participating Company Group shall not be deemed to have terminated
if the Optionee takes any military leave, sick leave, or other bona
fide leave of absence approved in advance in writing by the
Company; provided, however, that if any such leave exceeds ninety
(90) days, on the ninety-first (91st) day of such leave
the Optionee’s Service shall be deemed to have terminated
unless the Optionee’s right to return to Service with the
Participating Company Group is guaranteed by statute or contract.
Notwithstanding the foregoing, unless otherwise designated by the
Company or required by law, a leave of absence shall not be treated
as Service for purposes of determining vesting under the
Optionee’s Option Agreement. The Optionee’s Service
shall be deemed to have terminated either upon an actual
termination of Service or upon the corporation for which the
Optionee performs Service ceasing to be a Participating Company.
Subject to the foregoing, the Company, in its discretion, shall
determine whether the Optionee’s Service has terminated and
the effective date of such termination.
(x) “Stock” means
the common stock of the Company, as adjusted from time to time in
accordance with Section 4.2.
(y) “Subsidiary
Corporation” means any present or future “subsidiary
corporation” of the Company, as defined in
Section 424(f) of the Code.
(z) “Ten Percent Owner
Optionee” means an Optionee who, at the time an Option is
granted to the Optionee, owns stock possessing more than ten
percent (10%) of the total combined voting power of all
classes of stock of a Participating Company within the meaning of
Section 422(b)(6) of the Code.
2.2 Construction. Captions
and titles contained herein are for convenience only and shall not
affect the meaning or interpretation of any provision of the Plan.
Except when otherwise indicated by the context, the singular shall
include the plural and the plural shall include the singular. Use
of the term “or” is not intended to be exclusive,
unless the context clearly requires otherwise.
3.1 Administration by the
Board. The Plan shall be administered by the Board. All questions
of interpretation of the Plan or of any Option shall be determined
by the Board, and such determinations shall be final and binding
upon all persons having an interest in the Plan or such
Option.
3.2 Authority of Officers.
Any Officer shall have the authority to act on behalf of the
Company with respect to any matter, right, obligation,
determination or election which is the responsibility of or which
is allocated to the Company herein, provided the Officer has
apparent authority with respect to such matter, right, obligation,
determination or election.
3.3 Powers of the Board. In
addition to any other powers set forth in the Plan and subject to
the provisions of the Plan, the Board shall have the full and final
power and authority, in its discretion:
(a) to determine the persons
to whom, and the time or times at which, Options shall be granted
and the number of shares of Stock to be subject to each
Option;
(b) to designate Options as
Incentive Stock Options or Nonstatutory Stock Options;
(c) to determine the Fair
Market Value of shares of Stock or other property;
(d) to determine the terms,
conditions and restrictions applicable to each Option (which need
not be identical) and any shares acquired upon the exercise
thereof, including, without limitation, (i) the exercise price
of the Option, (ii) the method of payment for shares purchased
upon the exercise of the Option, (iii) the method for
satisfaction of any tax withholding obligation arising in
connection with the Option or such shares, including by the
withholding obligation arising in connection with the Option or
such shares, including by the withholding or delivery of shares of
stock, (iv) the timing, terms and conditions of the
exercisability of the Option or the vesting of any shares acquired
upon the exercise thereof, (v) the time of the expiration of
the Option, (vi) the effect of the Optionee’s
termination of Service with the Participating Company Group on any
of the foregoing, and (vii) all other terms, conditions and
restrictions applicable to the Option or such shares not
inconsistent with the terms of the Plan;
(e) to approve one or more
forms of Option Agreement;
(f) to amend, modify, extend,
cancel or renew any Option or to waive any restrictions or
conditions applicable to any Option or any shares acquired upon the
exercise thereof;
(g) to accelerate, continue,
extend or defer the exercisability of any Option or the vesting of
any shares acquired upon the exercise thereof, including with
respect to the period following an Optionee’s termination of
Service with the Participating Company Group;
(h) to prescribe, amend or
rescind rules, guidelines and policies relating to the Plan, or to
adopt supplements to, or alternative versions of, the Plan,
including, without limitation, as the Board deems necessary or
desirable to comply with the laws of, or to accommodate the tax
policy or custom of, foreign jurisdictions whose citizens may be
granted Options; and
(i) to correct any defect,
supply any omission or reconcile any inconsistency in the Plan or
any Option Agreement and to make all other determinations and take
such other actions with respect to the Plan or any Option as the
Board may deem advisable to the extent not inconsistent with the
provisions of the Plan or applicable law.
3.4 Administration with
Respect to Insiders. With respect to participation by Insiders in
the Plan, at any time that any class of equity security of the
Company is registered pursuant to Section 12 of the Exchange
Act, the Plan shall be administered in compliance with the
requirements, if any, of Rule 16b-3.
3.5 Indemnification. In
addition to such other rights of indemnification as they may have
as members of the Board or officers or employees of the
Participating Company Group, members of the Board and any officers
or employees of the Participating Company Group to whom authority
to act for the Board or the Company is delegated shall be
indemnified by the Company against all reasonable expenses,
including attorneys’ fees, actually and necessarily incurred
in connection with the defense of any action, suit or proceeding,
or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act
under or in connection with the Plan, or any right granted
hereunder, and against all amounts paid by them in settlement
thereof (provided such settlement is approved by independent legal
counsel selected by the Company) or paid by them in satisfaction of
a judgment in any such action, suit or proceeding, except in
relation to matter as to which it shall be adjudged in such action,
suit or proceeding that such person is liable for gross negligence,
bad faith or intentional misconduct in duties; provided, however,
that within sixty (60) days after the institution of such
action, suit or proceeding, such person shall offer to the Company,
in writing, the opportunity at its own expense to handle and defend
the same.
| 4. |
SHARES SUBJECT TO PLAN. |
4.1 Maximum Number of Shares
Issuable. Subject to adjustment as provided in Section 4.2,
the maximum aggregate number of shares of Stock that may be issued
under the Plan shall be One Million Six Hundred Twenty-Eight
Thousand (1,628,000) and shall consist of authorized but
unissued or reacquired shares of Stock or any combination thereof.
If an outstanding Option for any reason expires or is terminated or
canceled or if shares of Stock are acquired upon the exercise of an
Option subject to a Company repurchase option and are repurchased
by the Company at the Optionee’s exercise price, the shares
of Stock allocable to the unexercised portion of such Option or
such repurchased shares of Stock shall again be available for
issuance under the Plan. However, except as adjusted pursuant to
Section 4.2, in no event shall more than One Million Six
Hundred Twenty-Eight Thousand (1,628,000) shares of Stock be
available for issuance pursuant to the exercise of Incentive Stock
Options (the “ISO Share Issuance Limit”).
Notwithstanding the foregoing, at any such time as the offer and
sale of securities pursuant to the Plan is subject to compliance
with Section 260.140.45 of Title 10 of the California Code of
Regulations (“Section 260.140.45”), the total number of
shares of Stock issuable upon the exercise of all outstanding
Options (together with options outstanding under any other stock
option plan of the Company) and the total number of shares provided
for under any stock bonus or similar plan of the Company shall not
exceed thirty percent (30%) (or such other higher percentage
limitation as may be approved by the stockholders of the Company
pursuant to Section 260.140.45) of the then outstanding shares
of the Company as calculated in accordance with the conditions and
exclusions of Section 260.140.45.
4.2 Adjustments for Changes
in Capital Structure. In the event of any stock dividend, stock
split, reverse stock split, recapitalization, combination,
reclassification or similar change in the capital structure of the
Company, appropriate adjustments shall be made in the number and
class of shares subject to the Plan and to any outstanding Options,
in the ISO Share Issuance Limit set forth in Section 4.1, and
in the exercise price per share of any outstanding Options. If a
majority of the shares which are of the same class as the shares
that are subject to outstanding Options are exchanged for,
converted into, or otherwise become (whether or not pursuant to an
Ownership Change Event, as defined in Section 8.1) shares of
another corporation (the “New Shares”), the Board may
unilaterally amend the outstanding Options to provide that such
Options are exercisable for New Shares. In the event of any such
amendment, the number of shares subject to, and the exercise price
per share of, the outstanding Options shall be adjusted in a fair
and equitable manner as determined by the Board, in its discretion.
Notwithstanding the foregoing, any fractional share resulting from
an adjustment pursuant to this Section 4.2 shall be rounded
down to the nearest whole number, and in no event may the exercise
price of any Option be decreased to an amount less than the par
value, if any, of the stock subject to the Option. The adjustments
determined by the Board pursuant to this Section 4.2 shall be
final, binding and conclusive.
| 5. |
ELIGIBILITY AND OPTION LIMITATIONS. |
5.1 Persons Eligible for
Options. Options may be granted only to Employees, Consultants, and
Directors. For purposes of the foregoing sentence,
“Employees,” “Consultants” and
“Directors” shall include prospective Employees,
prospective Consultants and prospective Directors to whom Options
are granted in connection with written offers of an employment or
other service relationship with the Participating Company Group.
Eligible persons may be granted more than one (1) Option.
However, eligibility in accordance with this Section shall not
entitle any person to be granted an Option, or, having been granted
an Option, to be granted an additional Option.
5.2 Option Grant
Restrictions. Any person who is not an Employee on the effective
date of the grant of an Option to such person may be granted only a
Nonstatutory Stock Option. An Incentive Stock Option granted to a
prospective Employee upon the condition that such person become an
Employee shall be deemed granted effective on the date such person
commences Service with a Participating Company, with an exercise
price determined as of such date in accordance with
Section 6.1.
5.3 Fair Market Value
Limitation. To the extent that options designated as Incentive
Stock Options (granted under all stock option plans of the
Participating Company Group, including the Plan) become exercisable
by an Optionee for the first time during any calendar year for
stock having a Fair Market Value greater than One Hundred Thousand
Dollars ($100,000), the portions of such options which exceed such
amount shall be treated as Nonstatutory Stock Options. For purposes
of this Section 5.3, options designated as Incentive Stock
Options shall be taken into account in the order in which they
were
granted, and the Fair Market Value of
stock shall be determined as of the time the option with respect to
such stock is granted. If the Code in amended to provide for a
different limitation from that set forth in this Section 5.3,
such different limitation shall be deemed incorporated herein
effective as of the date and with respect to such Options as
required or permitted by such amendment to the Code. If an Option
is treated as an Incentive Stock Option in part and as a
Nonstatutory Stock Option in part by reason of the limitation set
forth in this Section 5.3, the Optionee may designate which
portion of such Option the Optionee is exercising. In the absence
of such designation, the Optionee shall be deemed to have exercised
the Incentive Stock Option portion of the Option first. Separate
certificates representing each such portion shall be issued upon
the exercise of the Option.
| 6. |
TERMS AND CONDITIONS OF OPTIONS. |
Options shall be evidenced by
Option Agreements specifying the number of shares of Stock covered
thereby, in such form as the Board shall from time to time
establish. No Option or purported Option shall be a valid and
binding obligation of the Company unless evidenced by a fully
executed Option Agreement. Option Agreements may incorporate all or
any of the terms of the Plan by reference and shall comply with and
be subject to the following terms and conditions:
6.1 Exercise Price. The
exercise price for each Option shall be established in the
discretion of the Board; provided, however, that (a) the
exercise price per share for an Incentive Stock Option shall be not
less than the Fair Market Value of a share of Stock on the
effective date of grant of the Option, (b) the exercise price
per share for a Nonstatutory Stock Option shall be not less than
eighty-five percent (85%) of the Fair Market Value of a share
of Stock on the effective date of grant of the Option, and
(c) no Option granted to a Ten Percent Owner Optionee shall
have an exercise price per share less than one hundred ten percent
(110%) of the Fair Market Value of a share of Stock on the
effective date of grant of the Option. Notwithstanding the
foregoing, an Option (whether an Incentive Stock Option or a
Nonstatutory Stock Option) may be granted with an exercise price
lower than the minimum exercise price set forth above if such
Option is granted pursuant to an assumption or substitution for
another option in a manner qualifying under the provisions of
Section 424(a) of the Code.
6.2 Exercisability and Term
of Options. Options shall be exercisable at such time or times, or
upon such event or events, and subject to such terms, conditions,
performance criteria and restrictions as shall be determined by the
Board and set forth in the Option Agreement evidencing such Option;
provided, however, that (a) no Option shall be exercisable
after the expiration of ten (10) years after the effective
date of grant of such Option, (b) no Incentive Stock Option
granted to a Ten Percent Owner Optionee shall be exercisable after
the expiration of five (5) years after the effective date of
grant of such Option, (c) no Option granted to a prospective
Employee, prospective Consultant or prospective Director may become
exercisable prior to the date on which such person commences
Service with a Participating Company, and (d) with the
exception of an Option granted to an Officer, a Director or a
Consultant, no Option shall become exercisable at a rate less than
twenty percent (20%) per year over a period of five
(5) years from the effective date of grant of such Option,
subject to the Optionee’s continued Service. Subject to the
foregoing, unless otherwise specified by the Board in the grant of
an Option, any Option granted hereunder shall terminate ten
(10) years after the effective date of grant of the Option,
unless earlier terminated in accordance with its
provisions.
6.3 Payment of Exercise
Price.
(a) Forms of consideration
Authorized. Except as otherwise provided below, payment of the
exercise price for the number of shares of Stock being purchased
pursuant to any Option shall be made (i) in cash, by check or
cash equivalent, (ii) by tender to the Company, or attestation
to the ownership, of shares of Stock owned by the Optionee having a
Fair Market Value not less than the exercise price, (iii) by
delivery of a properly executed notice together with irrevocable
instructions to a broker providing for the assignment to the
Company of the proceeds of a sale or loan with respect to some or
all of the shares being acquired upon the exercise of the Option
(including, without limitation, through an exercise complying with
the provisions of Regulation T as promulgated from time to time by
the Board of Governors of the Federal Reserve System) (a
“Cashless Exercise”), (iv) provided that the
Optionee is an Employee (unless otherwise not prohibited by law,
including, without limitation, any regulation promulgated by the
Board of Governors of the Federal Reserve System) and in the
Company’s sole discretion
at the time the Option is
exercised, by delivery of the Optionee’s promissory note in a
form approved by the Company for the aggregate exercise price,
provided that, if the Company is incorporated in the State of
Delaware, the Optionee shall pay in cash that portion of the
aggregate exercise price not less than the par value of the shares
being acquired, (v) by such other consideration as may be
approved by the Board from time to time to the extent permitted by
applicable law, or (vi) by any combination thereof. The Board
may at any time or from time to time, by approval of or by
amendment to the standard forms of Option Agreement described in
Section 7, or by other means, grant Options which do not
permit all of the foregoing forms of consideration to be used in
payment of the exercise price or which otherwise restrict one or
more forms of consideration.
(b) Limitations on Forms of
Consideration.
(i) Tender of Stock.
Notwithstanding the foregoing, an Option may not be exercised by
tender to the Company, or attestation to the ownership, of shares
of Stock to the extent such tender or attestation would constitute
a violation of the provisions of any law, regulation or agreement
restricting the redemption of the Company’s stock. Unless
otherwise provided by the Board, an Option may not be exercised by
tender to the Company, or attestation to the ownership, of shares
of Stock unless such shares either have been owned by the Optionee
for more than six (6) months (and not used for another Option
exercise by attestation during such period) or were not acquired,
directly or indirectly, from the Company.
(ii) Cashless Exercise. The
Company reserves, at any and all times, the right, in the
Company’s sole and absolute discretion, to establish, decline
to approve or terminate any program or procedures for the exercise
of Options by means of a Cashless Exercise.
(iii) Payment by Promissory
Note. No promissory note shall be permitted if the exercise of an
Option using a promissory note would be a violation of any law. Any
permitted promissory note shall be on such terms as the Board shall
determine. The Board shall have the authority to permit or require
the Optionee to secure any promissory note used to exercise an
Option with the shares of Stock acquired upon the exercise of the
Option or with other collateral acceptable to the Company. Unless
otherwise provided by the Board, if the Company at any time is
subject to the regulations promulgated by the Board of Governors of
the Federal Reserve System or any other governmental entity
affecting the extension of credit in connection with the
Company’s securities, any promissory note shall comply with
such applicable regulations, and the Optionee shall pay the unpaid
principal and accrued interest, if any, to the extent necessary to
comply with such applicable regulations.
6.4 Tax Withholding. The
Company shall have the right, but not the obligation, to deduct
from the shares of Stock issuable upon the exercise of an Option,
or to accept from the Optionee the tender of, a number of whole
shares of Stock having a Fair Market Value, as determined by the
Company, equal to all or any part of the federal, state, local and
foreign taxes, if any, required by law to be withheld by the
Participating Company Group with respect to such Option or the
shares acquired upon the exercise thereof. Alternatively or in
addition, in its discretion, the Company shall have the right to
require the Optionee, through payroll withholding, cash payment or
otherwise, including by means of a Cashless Exercise, to make
adequate provision for any such tax withholding obligations of the
Participating Company Group arising in connection with the Option
or the shares acquired upon the exercise thereof. The Fair Market
Value of any shares of Stock withheld or tendered to satisfy any
such tax withholding obligations shall not exceed the amount
determined by the applicable minimum statutory withholding rates.
The Company shall have no obligation to deliver shares of Stock or
to release shares of Stock from an escrow established pursuant to
the Option Agreement until the Participating Company Group’s
tax withholding obligations have been satisfied by the
Optionee.
6.5 Repurchase Rights. Shares
issued under the Plan may be subject to a right of first refusal,
one or more repurchase options, or other conditions and
restrictions as determined by the Board in its discretion at the
time the Option is granted. The Company shall have the right to
assign at any time any
right of first refusal or repurchase
right it may have, whether or not such right is then exercisable,
to one or more persons as may be selected by the Company. Upon
request by the Company, each Optionee shall execute any agreement
evidencing such transfer restrictions prior to the receipt of
shares of Stock hereunder and shall promptly present to the Company
any and all certificates representing shares of Stock acquired
hereunder for the placement on such certificates of appropriate
legends evidencing any such transfer restrictions.
6.6 Effect of Termination of
Service.
(a) Option Exercisability.
Subject to earlier termination of the Option as otherwise provided
herein and unless otherwise provided by the Board in the grant of
an Option and set forth in the Option Agreement, an Option shall be
exercisable after an Optionee’s termination of Service only
during the applicable time period determined in accordance with
this Section 6.6 and thereafter shall terminate:
(i) Disability. If the
Optionee’s Service terminates because of the Disability of
the Optionee, the Option, to the extent unexercised and exercisable
on the date on which the Optionee’s Service terminated, may
be exercised by the Optionee (or the Optionee’s guardian or
legal representative) at any time prior to the expiration of twelve
(12) months (or such longer period of time as determined by
the Board, in its discretion) after the date on which the
Optionee’s Service terminated, but in any event no later than
the date of expiration of the Option’s term as set forth in
the Option Agreement evidencing such Option (the “Option
Expiration Date”).
(ii) Death. If the
Optionee’s Service terminates because of the death of the
Optionee, the Option, to the extent unexercised and exercisable on
the date on which the Optionee’s Service terminated, may be
exercised by the Optionee’s legal representative or other
person who acquired the right to exercise the Option by reason of
the Optionee’s death at any time prior to the expiration of
twelve (12) months (or such longer period of time as
determined by the Board, in its discretion) after the date on which
the Optionee’s Service terminated, but in any event no later
than the Option Expiration Date. The Optionee’s Service shall
be deemed to have terminated on account of death if the Optionee
dies within three (3) months (or such longer period of time as
determined by the Board, in its discretion) after the
Optionee’s termination of Service.
(iii) Termination After
Change in Control. The Board may, in its discretion, provide in any
Option Agreement that if the Optionee’s Service ceases as a
result of “Termination After Change in Control” (as
defined in such Option Agreement) within two years of the
consummation of the Change in Control (as defined below in
Section 8.1(b)), then (1) the Option, to the extent
unexercised on the date on which the Optionee’s Service
terminated, may be exercised by the Optionee (or the
Optionee’s guardian or legal representative) at any time
prior to the expiration of six (6) months (or such longer
period of time as determined by the Board, in its discretion) after
the date on which the Optionee’s Service terminated, but in
any event no later than the Option Expiration Date, and
(2) the Unvested Shares shall fully and automatically vest and
the Unvested Share Repurchase Option shall terminate upon such
event. Notwithstanding the foregoing, if the Company and the other
party to the transaction constituting a Change in Control agree to
treat such transaction as a “pooling-of-interests” for
accounting purposes and it is determined that the provisions or
operation of this Section 6.6(a)(iii) would preclude treatment
of such transaction as a “pooling-of-interests” and
provided further that in the absence of the preceding sentence such
transaction would be treated as a
“pooling-of-interests,” then this
Section 6.6(a)(iii) shall be without force or effect, and the
vesting and exercisability of the Option shall be determined under
any other applicable provision of the Plan or the Option Agreement
evidencing such Option.
(iv) Other Termination of
Service. If the Optionee’s Service terminates for any reason,
except Disability or death, the Option, to the extent unexercised
and exercisable by the Optionee on the date on which the
Optionee’s Service terminated, may be exercised by the
Optionee at any time prior to the expiration of three
(3) months (or such longer period of time as determined by the
Board, in its discretion) after the date on which the
Optionee’s Service terminated, but in any event no later than
the Option Expiration Date.
(b) Extension if Exercise
Prevented by Law. Notwithstanding the foregoing, if the exercise of
an Option within the applicable time periods set forth in
Section 6.6(a) is prevented by the provisions of
Section 10 below, the Option shall remain exercisable until
three (3) months (or such longer period of time as determined
by the Board, in its discretion) after the date the Optionee is
notified by the Company that the Option is exercisable, but in any
event no later than the Option Expiration Date.
(c) Extension if Optionee
Subject to Section 16(b). Notwithstanding the foregoing, if a
sale within the applicable time periods set forth in
Section 6.6(a) of shares acquired upon the exercise of the
Option would subject the Optionee to suit under Section 16(b)
of the Exchange Act, the Option shall remain exercisable until the
earliest to occur of (i) the tenth (10th) day following
the date on which a sale of such shares by the Optionee would no
longer be subject to such suit, (ii) the one hundred and
ninetieth (190th) day after the Optionee’s termination
of Service, or (iii) the Option Expiration Date.
6.7 Transferability of
Options. During the lifetime of the Optionee, an Option shall be
exercisable only by the Optionee or the Optionee’s guardian
or legal representative. No Option shall be assignable or
transferable by the Optionee, except by will or by the laws of
descent and distribution. Notwithstanding the foregoing, to the
extent permitted by the Board, in its discretion, and set forth in
the Option Agreement evidencing such Option, a Nonstatutory Stock
Option shall be assignable or transferable subject to the
applicable limitations, if any, described in
Section 260.140.41 of Title 10 of the California Code of
Regulations, Rule 701 under the Securities Act, and the General
Instructions to Form S-8 Registration Statement under the
Securities Act.
| 7. |
STANDARD FORMS OF OPTION AGREEMENT. |
7.1 Option Agreement. Unless
otherwise provided by the Board at the time the Option is granted,
an Option shall comply with and be subject to the terms and
conditions set forth in the form of Option Agreement approved by
the Board concurrently with its adoption of the Plan and as amended
from time to time.
7.2 Authority to Vary Terms.
The Board shall have the authority from time to time to vary the
terms of any standard form of Option Agreement described in this
Section 7 either in connection with the grant or amendment of
an individual Option or in connection with the authorization of a
new standard form or forms; provided, however, that the terms and
conditions of any such new, revised or amended standard form or
forms of Option Agreement are not inconsistent with the terms of
the Plan.
8.1 Definitions.
(a) An “Ownership
Change Event” shall be deemed to have occurred if any of the
following occurs with respect to the Company: (i) the direct
or indirect sale or exchange in a single or series of related
transactions by the stockholders of the Company of more than fifty
percent (50%) of the voting stock of the Company; (ii) a
merger or consolidation in which the Company is a party;
(iii) the sale, exchange, or transfer of all or substantially
all of the assets of the Company; or (iv) a liquidation or
dissolution of the Company.
(b) A “Change in
Control” shall mean an Ownership Change Event or a series of
related Ownership Change Events (collectively, a
“Transaction”) wherein the stockholders of the Company
immediately before the Transaction do not retain immediately after
the Transaction, in substantially the same proportions as their
ownership of shares of the Company’s voting stock immediately
before the Transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting
power of the outstanding voting securities of the Company or, in
the case of a Transaction described in
Section 8.1(a)(iii),
the corporation or other
business entity to which the assets of the Company were transferred
(the “Transferee”), as the case may be. For purposes of
the preceding sentence, indirect beneficial ownership shall
include, without limitation, an interest resulting from ownership
of the voting securities of one or more corporations or other
business entities which own the Company or the Transferee, as the
case may be, either directly or through one or more subsidiary
corporations or other business entities. The Board shall have the
right to determine whether multiple sales or exchanges of the
voting securities of the Company or multiple Ownership Change
Events are related, and its determination shall be final, binding
and conclusive.
8.2 Effect of Change in
Control on Options. In the event of a Change in Control, the
surviving, continuing, successor, or purchasing corporation or
other business entity or parent thereof, as the case may be (the
“Acquiring Corporation”), may, without the consent of
any Optionee, either assume the Company’s rights and
obligations under outstanding Options or substitute for outstanding
Options substantially equivalent options for the Acquiring
Corporation’s stock. In the event that the Acquiring
Corporation elects to assume the outstanding Options, and the
Change of Control is consummated, then the vesting of the Unvested
Shares shall be accelerated by one year as set forth in the Option
Agreement. In the event the Acquiring Corporation elects not to
assume or substitute for outstanding Options in connection with a
Change in Control, the vesting of each such outstanding Option and
any shares acquired upon the exercise thereof held by Optionees
whose Service has not terminated prior to such date shall be
accelerated, effective as of the date ten (10) days prior to
the date of the Change in Control, to such extent, if any, as shall
have been determined by the Board, in its discretion, and set forth
in the Option Agreement evidencing such Option. The vesting of any
Option thereof that was permissible solely by reason of this
Section 8.2 and the provisions of such Option Agreement shall
be conditioned upon the consummation of the Change in Control. Any
Options which are neither assumed or substituted for by the
Acquiring Corporation in connection with the Change in Control nor
exercised as of the date of the Change in Control shall terminate
and cease to be outstanding effective as of the date of the Change
in Control. Notwithstanding the foregoing, shares acquired upon
exercise of an Option prior to the Change in Control and any
consideration received pursuant to the Change in Control with
respect to such shares shall continue to be subject to all
applicable provisions of the Option Agreement evidencing such
Option except as otherwise provided in such Option Agreement.
Furthermore, notwithstanding the foregoing, if the corporation the
stock of which is subject to the outstanding Options immediately
prior to an Ownership Change Event described in
Section 8.1(a)(i) constituting a Change in Control is the
surviving or continuing corporation and immediately after such
Ownership Change Event less than fifty percent (50%) of the
total combined voting power of its voting stock is held by another
corporation or by other corporations that are members of an
affiliated group within the meaning of Section 1504(a) of the
Code without regard to the provisions of Section 1504(b) of
the Code, the outstanding Options shall not terminate unless the
Board otherwise provides in its discretion.
| 9. |
PROVISION OF INFORMATION. |
At least annually, copies of
the Company’s balance sheet and income statement for the just
completed fiscal year shall be made available to each Optionee and
purchaser of shares of Stock upon the exercise of an Option. The
Company shall not be required to provide such information to key
employees whose duties in connection with the Company assure them
access to equivalent information. Furthermore, the Company shall
deliver to each Optionee such disclosures as are required in
accordance with Rule 701 under the Securities Act.
| 10. |
COMPLIANCE WITH SECURITIES LAW. |
The grant of Options and the
issuance of shares of Stock upon exercise of Options shall be
subject to compliance with all applicable requirements of federal,
state and foreign law with respect to such securities. Options may
not be exercised if the issuance of shares of Stock upon exercise
would constitute a violation of any applicable federal, state or
foreign securities laws or other law or regulations or the
requirements of any stock exchange or market system upon which the
Stock may then be listed. In addition, no Option may be exercised
unless (a) a registration statement under the Securities Act
shall at the time of exercise of the Option be in effect with
respect to the shares issuable upon exercise of the Option or
(b) in the opinion of legal counsel of the Company, the shares
issuable upon exercise of the Option may be issued in accordance
with the terms of an applicable exemption from the registration
requirements of the Securities Act. The inability of the Company to
obtain from any regulatory body having jurisdiction the authority,
if any, deemed by the Company’s legal counsel to be necessary
to the lawful issuance and sale of any shares hereunder shall
relieve the Company of any liability in respect of the failure to
issue
or sell such shares as to which such
requisite authority shall not have been obtained. As a condition to
the exercise of any Option, the Company may require the Optionee to
satisfy any qualifications that may be necessary or appropriate, to
evidence compliance with any applicable law or regulation and to
make any representation or warranty with respect thereto as may be
requested by the Company.
| 11. |
TERMINATION OR AMENDM |
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