Exhibit 10.3
DOT HILL SYSTEMS
CORP.
2000 AMENDED AND RESTATED
NON-EMPLOYEE DIRECTORS’
STOCK OPTION PLAN
Adopted by the Board of Directors
March 9, 2000
Approved By Stockholders May 8,
2000
Amendment and Restatement
Adopted
by the Board of Directors July 25, 2005 and
April 6, 2006
Amendment and Restatement Approved By
Stockholders May 8, 2006
Amendment Adopted by the Board of
Directors June 4, 2009
Effective Date: April 6,
2006
Termination Date: April 5, 2016
1. Purposes.
(a) Eligible Option
Recipients . The persons
eligible to receive Options are the Non-Employee Directors of the
Company.
(b) Available Options
. The purpose of the Plan is to
provide a means by which Non-Employee Directors may be given an
opportunity to benefit from increases in value of the Common Stock
through the granting of Nonstatutory Stock Options.
(c) General Purpose
. The Company, by means of the Plan,
seeks to retain the services of its Non-Employee Directors, to
secure and retain the services of new Non-Employee Directors and to
provide incentives for such persons to exert maximum efforts for
the success of the Company and its Affiliates.
2. Definitions.
(a) “ Affiliate ” means
any parent corporation or subsidiary corporation of the Company,
whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f), respectively, of the Code.
(b) “Annual
Grant” means an
Option granted pursuant to subsection 6(b) of the Plan.
(c) “Annual
Meeting” means
the annual meeting of the stockholders of the Company.
(d) “ Board ” means the
Board of Directors of the Company.
(e) “ Code ” means the
Internal Revenue Code of 1986, as amended.
1.
(f) “ Common Stock ” means
the common stock of the Company.
(g) “ Company ” means
D OT H ILL S YSTEMS C ORP ., a
Delaware corporation.
(h) “ Consultant ” means
any person, including an advisor, engaged by the Company or an
Affiliate to render consulting or advisory services and who is
compensated for such services. A person shall not be deemed a
“Consultant” solely by reason of the performance of
services as a Director and/or the payment of compensation in
relation thereto.
(i) “ Continuous Service ”
means that the Optionholder’s service with the Company as a
Non-Employee Director is not interrupted or terminated. The
Optionholder’s Continuous Service in any event shall not be
deemed to have been interrupted or terminated by reason of a change
in the capacity in which the Optionholder renders service to the
Company or an Affiliate of the Company. For example, a change in
status from a Non-Employee Director to an Employee or Consultant
will not constitute an interruption or termination of Continuous
Service. The Board, in its sole discretion, may determine whether
Continuous Service shall be considered interrupted or terminated in
the case of any leave of absence approved by the Board, including
sick leave, military leave or any other personal leave.
(j) “ Director ” means a
member of the Board of Directors of the Company.
(k) “ Disability ” means
the permanent and total disability of a person within the meaning
of Section 22(e)(3) of the Code.
(l) “ Employee ” means any
person employed by the Company or an Affiliate. Service as a
Director and/or payment of compensation in relation thereto, in and
of itself, shall not be sufficient to constitute
“employment” by the Company or an Affiliate.
(m) “ Exchange Act ” means
the Securities Exchange Act of 1934, as amended.
(n) “ Fair Market Value ”
means, as of any date, the value of the Common Stock determined as
follows:
(i) If the Common Stock is listed on any established
stock exchange, such as the New York Stock Exchange, or traded on
the Nasdaq National Market or the Nasdaq SmallCap Market, the Fair
Market Value of a share of Common Stock shall be the closing sales
price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or market (or the exchange or
market with the greatest volume of trading in the Common Stock) on
the last market trading day prior to the day of determination, as
reported in The Wall Street Journal or such other source as the
Board deems reliable.
(ii) In the absence of such markets for the Common
Stock, the Fair Market Value shall be determined in good faith by
the Board.
(o) “ Initial Grant ”
means an Option granted pursuant to section 6(a) of the
Plan.
2.
(p) “ Non-Employee Director
” means a Director who is not an Employee.
(q) “ Nonstatutory Stock Option
” means an Option not intended to qualify as an
“incentive stock option” within the meaning of
Section 422 of the Code and the regulations promulgated
thereunder.
(r) “ Option ” means a
Nonstatutory Stock Option granted pursuant to the Plan.
(s) “ Option Agreement ”
means a written agreement between the Company and an Optionholder
evidencing the terms and conditions of an individual Option grant.
Each Option Agreement shall be subject to the terms and conditions
of the Plan.
(t) “ Optionholder ” means
a person to whom an Option is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding
Option.
(u) “ Plan ” means this
D OT H ILL S YSTEMS C ORP . 2000
Non-Employee Directors’ Stock Option Plan.
(v) “ Rule 16b-3 ” means
Rule 16b-3 promulgated under the Exchange Act or any successor to
Rule 16b-3, as in effect from time to time.
(w) “ Securities Act ”
means the Securities Act of 1933, as amended.
3. Administration.
(a) Administration by
Board . The Board shall
administer the Plan. The Board may not delegate administration of
the Plan to a committee.
(b) Powers of Board
. The Board shall have the power,
subject to, and within the limitations of, the express provisions
of the Plan:
(i) To determine the provisions of each Option to
the extent not specified in the Plan.
(ii) To construe and interpret the Plan and Options
granted under it, and to establish, amend and revoke rules and
regulations for its administration. The Board, in the exercise of
this power, may correct any defect, omission or inconsistency in
the Plan or in any Option Agreement, in a manner and to the extent
it shall deem necessary or expedient to make the Plan fully
effective.
(iii) To amend the Plan or an Option as provided in
Section 12.
(iv) Generally, to exercise such powers and to
perform such acts as the Board deems necessary or expedient to
promote the best interests of the Company that are not in conflict
with the provisions of the Plan.
3.
(c) Effect of Board’s
Decision. All
determinations, interpretations and constructions made by the Board
in good faith shall not be subject to review by any person and
shall be final, binding and conclusive on all persons.
4. Shares Subject to the
Plan.
(a) Share Reserve
. Subject to the provisions of
Section 11 relating to adjustments upon changes in the Common
Stock, the Common Stock that may be issued pursuant to Options
shall not exceed in the aggregate one million
(1,000,000) shares of Common Stock.
(b) Reversion of Shares to the
Share Reserve . If any
Option shall for any reason expire or otherwise terminate, in whole
or in part, without having been exercised in full, the shares of
Common Stock not acquired under such Option shall revert to and
again become available for issuance under the Plan.
(c) Source of Shares
. The shares of Common Stock subject
to the Plan may be unissued shares or reacquired shares, bought on
the market or otherwise.
5. Eligibility.
Options shall automatically be
granted under the Plan to Non-Employee Directors in accordance with
Section 6.
6. Non-Discretionary
Grants.
(a) Initial Grants.
Without any further action of the
Board, each person who, at any time after the Company’s 2005
Annual Meeting, is duly elected or appointed by the Board of
Directors or stockholders of the Company to serve as a Non-Employee
Director and who, for at least one (1) year preceding such
election or appointment has at no time served as a Non-Employee
Director, shall, effective as of the effective date of such
election or appointment, automatically be granted an option to
purchase fifty thousand (50,000) shares of Common Stock on the
terms and conditions set forth in this Plan. Termination of a
Director’s status as an Employee shall not result in an
Initial Grant to such Director pursuant to this Subsection
6(a).
(b) Annual Grants.
Without any further action of the
Board, each person who, immediately following each Annual Meeting
commencing with the 2009 Annual Meeting, is a Non-Employee Director
and who has been a Non-Employee Director for at least four
(4) months prior to such Annual Meeting shall, effective as of
the date of such Annual Meeting, automatically be granted an option
to purchase ten thousand (10,000) shares of Common Stock on
the terms and conditions set forth in this Plan.
7. Option
Provisions.
Each Option shall be in such form
and shall contain such terms and conditions as required by the
Plan. Each Option shall contain such additional terms and
conditions, not inconsistent with the Plan, as the Board shall deem
appropriate. Each Option shall include (through incorporation of
provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:
(a) Term . No Option shall be exercisable after the
expiration of ten (10) years from the date it was
granted.
4.
(b) Exercise Price
. The exercise price of each Option
shall be one hundred percent (100%) of the Fair Market Value
of the stock subject to the Option on the date the Option is
granted. Notwithstanding the foregoing, an Option may be granted
with an exercise price lower than that set forth in the preceding
sentence if such Option is granted pursuant to an assumption or
substitution for another option in a manner satisfying the
provisions of Section 424(a) of the Code.
(c) Consideration
. The purchase price of stock
acquired pursuant to an Option may be paid, to the extent permitted
by applicable statutes and regulations, in any combination of the
following methods:
(i) By cash or check.
(ii) Provided that at the time of exercise the Common
Stock is publicly traded and quoted regularly in The Wall Street
Journal , by delivery of already-owned shares of Common Stock
either that the Optionholder has held for the period required to
avoid a charge to the Company’s reported earnings (generally
six months) or that the Optionholder did not acquire, directly or
indirectly from the Company, that are owned free and clear of any
liens, claims, encumbrances or security interests, and that are
valued at Fair Market Value on the date of exercise.
“Delivery” for these purposes shall include delivery to
the Company of the Optionholder’s attestation of ownership of
such shares of Common Stock in a form approved by the Company.
Notwithstanding the foregoing, the Optionholder may not exercise
the Option by tender to the Company of Common Stock to the extent
such tender would violate the provisions of any law, regulation or
agreement restricting the redemption of the Company’s
stock.
(iii) Provided that at the time of exercise the Common
Stock is publicly traded and quoted regularly in The Wall Street
Journal , pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board that, prior to the
issuance of Common Stock, results in either the receipt of cash (or
check) by the Company or the receipt of irrevocable instructions to
pay the aggregate exercise price to the Company from the sales
proceeds.
(iv) Pursuant to the following deferred payment
provisions:
(1) One hundred percent (100%) of the aggregate
exercise price, plus accrued interest, shall be due four
(4) years from date of exercise or upon termination of your
Continuous Service.
(2) Interest shall be compounded annually and shall
be charged at the minimum rate of interest necessary to avoid the
treatment as interest, under any applicable provisions of the Code,
of any portion of any amounts other than amounts stated to be
interest under the deferred payment arrangement.
5.
(3) At any time that the Company is incorporated in
Delaware, payment of the Common Stock’s “par
value,” as defined in the Delaware General Corporation Law,
shall be made in cash and not by deferred payment.
(4) The Optionholder must, as a part of his or her
written notice of exercise, give notice of the election of this
payment alternative and must tender to the Company a promissory
note and a security agreement covering the purchased shares of
Common Stock, both in form and substance satisfactory to the
Company, or such other or additional documentation as
the
