SECOND AMENDED AND RESTATED
FLARION TECHNOLOGIES, INC. 2000 STOCK OPTION AND
RESTRICTED STOCK PURCHASE PLAN
The purpose of the
Second Amended and Restated Flarion Technologies, Inc. 2000 Stock
Option and Restricted Stock Purchase Plan (the “ Plan
”) is to promote the interests of Flarion Technologies, Inc.
(the “ Company ”) and its shareholders by
providing employees and directors of the Company and consultants to
the Company with an increased incentive to contribute to the
Company’s performance and to attract and retain employees,
directors and consultants by affording them an opportunity to
acquire a proprietary interest in the Company’s business,
thereby better aligning the interests of the Company, its
shareholders, employees, directors and consultants. Except where
the context otherwise requires, the term “Company”
shall include the parent corporation and all subsidiary
corporations, if any, of the Company as defined in Sections 424(e)
and 424(f) of the Internal Revenue Code of 1986, as amended (the
“ Code ”).
Options granted
under the Plan may be either “incentive stock options”
(“ ISOs ”), intended to qualify as such under
the provisions of Section 422 of the Code, or
“non-qualified stock options” (“ NSOs
”), not intended to qualify as ISOs under Section 422 of
the Code.
(a) Board of
Directors/Committee .
Options and/or
Awards (as defined below) under the Plan shall be granted, and the
Plan shall be administered, by the Stock Option Committee of the
Board of Directors of the Company or such other committee as the
Board of Directors of the Company shall determine in its discretion
(the “ Committee ”). At any time in which either
no Committee has been appointed or is then constituted, references
to “Committee” shall be deemed to refer to the Board of
Directors of the Company (the “ Board ”). For
purposes of this Plan, the term “ Awards ” shall
mean an award of the right to purchase Common Stock granted under
the provisions of Section 6 of this Plan. Stock issued
pursuant to an Award is hereinafter referred to as “
Restricted Stock ”.
The Committee may
adopt such rules and regulations as it shall deem appropriate
concerning the administration of the Plan. The Committee’s
procedures for governance and requirements for action presently in
place, if any, are herein incorporated by reference, along with any
future amendments thereto.
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The Committee
shall have full power and authority to interpret the provisions of
the Plan and any Option Agreement (as defined in Section 6(c)
below) and Award Agreement (as defined in Section 6
(d) below), to prescribe, amend and rescind rules and
regulations relating to the Plan, and to resolve all questions
arising under the Plan. All decisions of the Committee shall be
conclusive and binding on all participants in the Plan.
4. SHARES OF
STOCK SUBJECT TO THE PLAN .
Subject to the
provisions of Section 12 below (relating to adjustment of
shares), the number of shares of common stock of the Company
(“ Common Stock ”) available for sale upon
exercise of options and/or the grant of Awards under the Plan shall
not exceed 69,341,588 shares. If and to the extent that options
and/or Awards granted under the Plan terminate, expire or are
canceled without having been fully exercised and/or are repurchased
or otherwise rescinded, new options and/or Awards may be granted
under the Plan with respect to the shares of Common Stock covered
by the unexercised portion of such terminated, expired or canceled
options and/or repurchased or otherwise rescinded Awards, all of
which may be granted as ISOs.
(b) Character
of Shares .
The shares of
Common Stock issuable upon the exercise of an option granted under
the Plan or pursuant to an Award may be (i) authorized but
unissued shares of Common Stock, (ii) shares of Common Stock
held in the Company’s treasury, or (iii) a combination
of both.
(c) Reservation
of Shares .
The number of
shares of Common Stock reserved by the Company for issuance under
the Plan shall at no time be less than the maximum number of shares
which may be purchased at any time pursuant to outstanding options
and Awards.
Options and Awards
may be granted under the Plan only to persons who are directors,
officers, employees or consultants to the Company at the time of
grant. Options granted to officers and key employees of the Company
shall be, in the discretion of the Committee, either ISOs or NSOs,
and options granted to directors who are not employees of the
Company, to employees of the Company who are not designated by the
Committee as key employees, and to consultants and advisors, shall
be NSOs. Notwithstanding anything herein to the contrary, ISOs
shall only be granted to those persons who qualify as an employee
under Section 3401(c) of the Code.
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6. GRANT OF
OPTIONS AND AWARDS .
Options and/or
Awards may be granted under the Plan at any time and from time to
time on or prior to the Expiration Date (as defined in
Section 15 below). Subject to the provisions of the Plan, the
Committee may, in its discretion, determine:
(i)
the persons (from among the class of persons eligible under
Section 5 above to receive options and/or Awards under the
Plan) to whom options shall be granted (the “
Optionees ”) and/or to whom Awards shall be granted
(the “ Participants ”);
(ii)
the time or times at which options and/or Awards shall be
granted;
(iii)
the number of shares subject to each option or granted pursuant to
each Award;
(iv)
the Option Price (as defined in Section 7 below) of the shares
subject to each option, which price, in the case of ISOs, shall be
not less than the minimum specified in Section 7 below, and
the Award Price (as defined below) of the shares granted pursuant
to each Award;
(v)
the time or times when each option shall become exercisable and the
duration of the exercise period; and
(vi)
any restrictions on the sale of shares and any repurchase rights
with respect to shares purchased upon exercise of an option, and
any restrictions on the sale or any repurchase rights with respect
to shares that may be purchased pursuant to an Award (including
without limitation, rights of refusal to purchase such shares), as
contemplated by Section 13 below.
The date of grant
of an option and/or Award under the Plan shall be the date on which
the Committee approves the grant.
Each option
granted under the Plan shall be designated as an ISO or an NSO and
shall be subject to the terms and conditions applicable to ISOs or
NSOs (as the case may be) set forth in the Plan, and each option
shall be evidenced by a written agreement (an “ Option
Agreement ”), containing such terms and conditions, not
inconsistent with the Plan, as the Committee may, in its
discretion, determine. Each Option Agreement shall be executed by
the Company and the Optionee. Option Agreements may differ among
Optionees.
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Each Award granted
under the Plan shall be subject to terms and conditions applicable
to Awards set forth in the Plan and each Award shall be evidenced
by a written agreement (an “ Award Agreement ”)
containing such terms and conditions not inconsistent with the
Plan, as the Committee may, in its discretion, determine. Each
Award Agreement shall be executed by the Company and the
Participant of the Award. Award Agreements may differ among
Participants.
(e) No Evidence
of Employment .
Neither
(i) the grant of an option and/or an Award nor (ii) any
provision of the Plan or any Option Agreement or Award Agreement
shall confer upon any Optionee or Participant any right with
respect to the continuation of his or her employment by, or his or
her consulting or advisory relationship to, the Company or
interfere in any way with the right of the Company at any time to
terminate such employment or other relationship or, in the case of
employees (including officers), to increase or decrease the
compensation of the Optionee or Participant, as the case may be,
from the rate in existence at the time of the grant of an option or
Award.
7. OPTION
PRICE; PURCHASE PRICE PURSUANT TO AN AWARD .
(a) The price
(the “ Option Price ”) at which each share of
Common Stock subject to an option granted under the Plan may be
purchased shall be determined by the Committee at the time the
option is granted; provided , however , that in the
case of an ISO, such Option Price shall in no event be less than
one hundred percent (100%) of the Fair Market Value (as defined
below) of such share of Common Stock at the time of grant and, in
the case of a ten percent (10%) owner (see Section 8(c) below),
such Option Price shall be at least one hundred ten percent (110%)
of the Fair Market Value of the Common Stock subject to such
options.
(b) The
amount to be paid by a Participant to acquire the shares of Common
Stock pursuant to an Award (the “ Award Price ”)
shall be fixed by the Committee at the time the Award is granted
and may be equal to, more than or less than 100% of the Fair Market
Value of the shares of Common Stock subject to the Award on the
date the Award is granted.
(c) For
purposes of this Plan, the term “ Fair Market Value
” shall mean the average of the closing prices of sales of
shares of Common Stock on all national securities exchanges on
which the Common Stock may at the time be listed or, if there shall
have been no sales on any such day, the average of the highest bid
and lowest asked prices on all such exchanges at the end of such
day or, if on any day the Common Stock shall not be so listed, the
average of the representative bid and asked prices quoted in the
NASDAQ system as of 3:30 p.m., New York time, on such day or, if on
any day the Common Stock shall not be quoted in the NASDAQ system,
the average of the high and low bid and asked prices on such day in
the over-the-counter market as reported by the National Quotation
Bureau Incorporated, or any similar successor organization. If at
any time the Common Stock is not listed on any national securities
exchange or quoted in the NASDAQ system or the over-the- counter
market, the Fair Market Value of the shares of Common Stock subject
to an option or Award shall be the fair market value thereof
determined in good faith by the Committee.
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8. EXERCISE
OF OPTIONS; PURCHASE OF STOCK PURSUANT TO AN AWARD .
Each option shall
be exercisable, in whole or in part, at such time or times, or
within such period or periods, or upon the occurrence of such event
or events, as determined in accordance herewith and as otherwise
determined by the Committee and set forth in the Option Agreement
evidencing such option. In the case of (i) Option grants
within 30 days of the adoption by the Company’s
stockholders of this Plan and (ii) Option grants to officers
and key employees of the right to purchase an amount of shares
equal to 1% or more of the shares of capital stock of the Company
on a fully diluted basis, Options granted may, in the sole
discretion of the Board, be exercisable immediately but subject to
repurchase pursuant to Section 20 hereof. If an option is not
at the time of grant immediately exercisable in full, the Committee
may (i) in the Option Agreement evidencing such option provide
for the acceleration of the exercise date or dates of such option,
in whole or in part, upon the occurrence of specified events, or
(ii) at any time prior to the complete expiration of an
option, accelerate, in whole or in part, the exercise date or dates
of such option.
(b) Restrictions
on Exercise.
(i)
No option by its terms shall be exercisable after the expiration of
ten years from the date such option is granted.
(ii)
No option may be exercised at a time when the exercise thereof or
the issuance or transfer of shares upon such exercise may, in the
reasonable judgment of the Committee, constitute a violation of any
law, federal, state, local or foreign, or any regulations
thereunder, or the requirements of the New York Stock Exchange or
any other national securities exchange or market.
(iii)
The Committee, in its discretion, may require an Optionee to (A)
represent in writing that the shares of Common Stock to be received
upon exercise of an option are being acquired for his or her own
account for investment and not with a view to distribution thereof,
nor with any present intention of distributing the same, and
(B) make such other representations and warranties as are
deemed necessary by counsel to the Company. Stock certificates
representing shares of Common Stock not registered under the
Securities Act of 1933, as amended (the “ 1933 Act
”), acquired upon the exercise of options shall bear a legend
in substantially the following form:
“THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH ACT
AND ALL SUCH APPLICABLE LAWS OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.”
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(iv)
No option may be exercised for any fractional share.
(c)
Limitation on Exercise of ISOs .
To the extent that
the aggregate Fair Market Value (as of the time the options with
respect to such stock were granted) of stock with respect to which
options intended to be ISOs are exercisable for the first time by
an Optionee during any calendar year (under all plans of the
Company) exceeds $100,000, such options shall be treated as NSOs.
An ISO may not be granted to an individual who, at the time an
option is granted, owns stock that has more than ten percent (10%)
of the voting power of all classes of stock of the Company (“
ten percent (10%) owner ”). An individual is
considered as owning stock, for purposes of the previous sentence,
owned directly or indirectly by or for his brothers, sisters,
spouse, ancestors and lineal descendants. An individual is also
deemed to own stock held by a foreign or domestic corporation,
partnership, trust or estate for which the individual is a
shareholder, partner or beneficiary proportionately to his interest
in the corporation, partnership, trust or estate as a shareholder,
partner or beneficiary. Notwithstanding the foregoing prohibition
on a “ten percent (10%) owner,” an ISO may be granted
to a “ten percent (10%) owner” if (i) the ISO so
granted is not exercisable after the expiration of five
(5) years from the date of grant and (ii) the Option
Price of such ISO is at least one hundred ten percent (110%) of the
Fair Market Value of the stock subject to the ISO (as provided in
Section 7 hereof).
(d)
Conditions to the Purchase of Stock Pursuant to an Award
.
The Committee, in
its discretion, may require a Participant to (A) represent in
writing that the shares of Common Stock to be purchased pursuant to
an Award are being acquired for his or her own account for
investment and not with a view to distribution thereof, nor with
any present intention of distributing the same, and (B) make
such other representations and warranties as are deemed necessary
by counsel to the Company. Stock certificates representing shares
of Common Stock not registered under the 1933 Act purchased
pursuant to an Award shall bear a legend in substantially the
following form:
“THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH ACT
AND ALL SUCH APPLICABLE LAWS OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.”
9. PROCEDURE
FOR EXERCISE OF OPTIONS AND PURCHASE OF RESTRICTED STOCK
.
At the time an
option or Award is granted, the Committee shall, in its discretion,
specify one or more of the following forms of payment which may be
used by an Optionee or Participant upon exercise of his or her
option or Award, as the case may be:
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(i) cash or
personal or certified check payable to the Company in an amount
equal to the aggregate Option Price of the shares with respect to
which the option is being exercised or the Award Price, as
applicable;
(ii) stock
certificates (in negotiable form) representing shares of Common
Stock having a fair market value (as determined by the Committee,
which determination, if the Common Stock is publicly traded, shall
be based upon market prices) equal to the aggregate Option Price of
the shares with respect to which the option is being exercised;
provided, however, that this method of payment may only be
implemented if the Optionee has owned such shares of Common Stock,
beneficially and of record, for a period of at least six
(6) consecutive months immediately prior to exercise of his or
her Option;
(iii) cash
proceeds equal to the aggregate Option Price of the shares with
respect to which the option is being exercised derived from the
simultaneous exercise of the option and sale of the underlying
shares; or
(iv) a combination
of any of such methods.
An Optionee may
exercise an option, and a Participant may purchase Restricted Stock
pursuant to an Award, in whole or in part, as provided in the
respective Option Agreement or Award Agreement evidencing such
option or Award, by delivering a written notice (the “
Notice ”) to the Secretary of the Company. The Notice
shall:
(i) state that the
Optionee or Participant elects to exercise the option or purchase
Restricted Stock pursuant to an Award, as the case may be, and, in
the case of an option, whether the option being exercised is an ISO
or an NSO;
(ii) state the
number of shares with respect to which the option is being
exercised (the “Optioned Shares”) or which the
Participant is purchasing pursuant to an Award (the “Awarded
Shares”);
(iii) state the
method of payment for the Optioned Shares or Awarded Shares (which
method must be available to the Optionee or Participant, as the
case may be, under the terms of his or her respective Option
Agreement or Award Agreement) and, if applicable, that cash or a
check (and, in the case of options, stock certificates) are
enclosed representing all or part of the aggregate Option Price or
Award Price of such Optioned Shares or Awarded Shares, as the case
may be;
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