BROADVISION,
INC.
AMENDED
AND RESTATED 2006 EQUITY INCENTIVE PLAN
APPROVED
BY BOARD: JULY 7, 2006
APPROVED
BY STOCKHOLDERS: AUGUST 8, 2006
AMENDED
BY THE BOARD: APRIL 16, 2008
APPROVED
BY THE STOCKHOLDERS: JUNE 5, 2008
AMENDED
BY THE BOARD: JANUARY 21, 2009
APPROVED
BY THE STOCKHOLDERS: April 30, 2009
Reflects
the 25-to-one reverse stock split effected October 24, 2008
1.
GENERAL.
(a)
Eligible Award Recipients.
The
persons eligible to receive Awards are Employees, Directors and
Consultants.
(b)
Available Awards.
The Plan
provides for the grant of the following Awards: (i) Incentive Stock Options,
(ii) Nonstatutory Stock Options, (iii) Restricted Stock Awards, (iv) Restricted
Stock Unit Awards, (v) Stock Appreciation Rights, (vi) Performance Stock Awards,
(vii) Performance Cash Awards, and (viii) Other Stock Awards.
(c)
General Purpose.
The Company,
by means of the Plan, seeks to secure and retain the services of the group of
persons eligible to receive Awards as set forth in Section 1(a), to provide
incentives for such persons to exert maximum efforts for the success of the
Company and any Affiliate and to provide a means by which such eligible
recipients may be given an opportunity to benefit from increases in value of the
Common Stock through the granting of Stock Awards.
2.
ADMINISTRATION.
(a)
Administration by Board.
The
Board shall administer the Plan unless and until the Board delegates
administration of the Plan to a Committee or Committees, as provided in Section
2(c).
(b)
Powers of Board.
The Board
shall have the power, subject to, and within the limitations of, the express
provisions of the Plan:
(i)
To determine
from time to time (A) which of the persons eligible under the Plan shall be
granted Awards; (B) when and how each Award shall be granted; (C) what type or
combination of types of Award shall be granted; (D) the provisions of each Award
granted (which need not be identical), including the time or times when a person
shall be permitted to receive cash or Common Stock pursuant to a Stock Award;
and (E) the number of shares of Common Stock with respect to which a Stock Award
shall be granted to each such person; and (F) the Fair Market Value applicable
to a Stock Award.
(ii)
To construe
and interpret the Plan and Awards granted under it, and to establish, amend and
revoke rules and regulations for its administration. The Board, in the exercise
of this power, may correct any defect, omission or inconsistency in the Plan or
in any Stock Award Agreement or in the written terms of a Performance Cash
Award, in a manner and to the extent it shall deem necessary or expedient to
make the Plan or Award fully effective.
(iii)
To settle all
controversies regarding the Plan and Awards granted under it.
(iv)
To accelerate
the time at which a Stock Award may first be exercised or the time during which
an Award or any part thereof will vest in accordance with the Plan,
notwithstanding the provisions in the Award stating the time at which it may
first be exercised or the time during which it will vest.
(v)
To suspend or
terminate the Plan at any time. Suspension or termination of the Plan shall not
impair rights and obligations under any Stock Award granted while the Plan is in
effect except with the written consent of the affected Participant.
(vi)
To amend the
Plan in any respect the Board deems necessary or advisable, including, without
limitation, by adopting amendments relating to Incentive Stock Options and
certain nonqualified deferred compensation under Section 409A of the Code and/or
to bring the Plan or Awards granted under the Plan into compliance therewith,
subject to the limitations, if any, of applicable law. However, except as
provided in Section 9(a) relating to Capitalization Adjustments, to the extent
required by applicable law or listing requirements, stockholder approval shall
be required for any amendment of the Plan that either (A) materially increases
the number of shares of Common Stock available for issuance under the Plan, (B)
materially expands the class of individuals eligible to receive Awards under the
Plan, (C) materially increases the benefits accruing to Participants under the
Plan or materially reduces the price at which shares of Common Stock may be
issued or purchased under the Plan, (D) materially extends the term of the Plan,
or (E) expands the types of Awards available for issuance under the Plan. Except
as provided above, rights under any Award granted before amendment of the Plan
shall not be impaired by any amendment of the Plan unless (1) the Company
requests the consent of the affected Participant, and (2) such Participant
consents in writing.
(vii)
To submit any
amendment to the Plan for stockholder approval, including, but not limited to,
amendments to the Plan intended to satisfy the requirements of (A) Section
162(m) of the Code regarding the exclusion of performance-based compensation
from the limit on corporate deductibility of compensation paid to Covered
Employees, (B) Section 422 of the Code regarding “incentive stock options” or
(C) Rule 16b-3.
(viii)
To approve
forms of Award Agreements for use under the Plan and to amend the terms of any
one or more Awards, including, but not limited to, amendments to provide terms
more favorable to the Participant than previously provided in the Award
Agreement, subject to any specified limits in the Plan that are not subject to
Board discretion;
provided
however
, that except with respect to amendments that disqualify or impair
the status of an Incentive Stock Option, a Participant’s rights under any Award
shall not be impaired by any such amendment unless (A) the Company requests the
consent of the affected Participant, and (B) such Participant consents in
writing. Notwithstanding the foregoing, subject to the limitations of
applicable law, if any, the Board may amend the terms of any one or more Awards
without the affected Participant’s consent if necessary to maintain the
qualified status of the Award as an Incentive Stock Option or to bring the Award
into compliance with Section 409A of the Code.
(ix)
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 and that are not in
conflict with the provisions of the Plan or Awards.
(x)
To adopt
such procedures and sub-plans as are necessary or appropriate to permit
participation in the Plan by Employees, Directors or Consultants who are foreign
nationals or employed outside the United States.
(xi)
To effect, at
any time and from time to time, with the consent of any adversely affected
Participant, (A) the reduction of the exercise price (or strike price) of any
outstanding Option or SAR under the Plan; (B) the cancellation of any
outstanding Option or SAR under the Plan and the grant in substitution therefor
of (1) a new Option or SAR under the Plan or another equity plan of the Company
covering the same or a different number of shares of Common Stock, (2) a
Restricted Stock Award, (3) a Restricted Stock Unit Award, (4) an Other Stock
Award, (5) cash and/or (6) other valuable consideration (as determined by the
Board, in its sole discretion); or (C) any other action that is treated as a
repricing under generally accepted accounting principles.
(c)
Delegation to
Committee.
(i)
General.
The Board may
delegate some or all of the administration of the Plan to a Committee or
Committees. If administration of the Plan is delegated to a Committee, the
Committee shall have, in connection with the administration of the Plan, the
powers theretofore possessed by the Board that have been delegated to the
Committee, including the power to delegate to a subcommittee of the Committee
any of the administrative powers the Committee is authorized to exercise (and
references in this Plan to the Board shall thereafter be to the Committee or
subcommittee), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may retain the authority to concurrently administer the Plan with the
Committee and may, at any time, revest in the Board some or all of the powers
previously delegated.
(ii)
Section 162(m) and Rule 16b-3
Compliance.
In the sole discretion of the Board, the Committee may
consist solely of two or more Outside Directors, in accordance with Section
162(m) of the Code, or solely of two or more Non-Employee Directors, in
accordance with Rule 16b-3. In addition, the Board or the Committee, in its sole
discretion, may (A) delegate to a Committee of Directors who need not be Outside
Directors the authority to grant Awards to eligible persons who are either (I)
not then Covered Employees and are not expected to be Covered Employees at the
time of recognition of income resulting from such Stock Award, or (II) not
persons with respect to whom the Company wishes to comply with Section 162(m) of
the Code, or (B) delegate to a Committee of Directors who need not be
Non-Employee Directors the authority to grant Stock Awards to eligible persons
who are not then subject to Section 16 of the Exchange Act.
(d)
Delegation to an
Officer.
The Board may delegate to one (1) or more Officers the
authority to do one or both of the following: (i) designate Employees, who are
not Officers, to be recipients of Options and Stock Appreciation Rights (and, to
the extent permitted by applicable law, other Stock Awards) and the terms
thereof, and (ii) determine the number of shares of Common Stock to be subject
to such Stock Awards granted to such Employees;
provided, however,
that the
Board resolutions regarding such delegation shall specify the total number of
shares of Common Stock that may be subject to the Stock Awards granted by such
Officer and that such Officer may not grant a Stock Award to himself or
herself. Notwithstanding the foregoing, the Board may not delegate
authority to an Officer to determine the Fair Market Value pursuant to
Section 13(w)(iii) below.
(e)
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.
3.
SHARES SUBJECT TO THE
PLAN.
(a)
Share Reserve.
Subject to
the provisions of Section 9(a) relating to Capitalization Adjustments, the
aggregate number of shares of Common Stock that may be issued pursuant to Stock
Awards from and after the Effective Date shall not exceed, in the aggregate,
four hundred thirty-four thousand eight hundred seven (434,807) shares of Common
Stock. In addition, the number of shares of Common Stock available for issuance
under the Plan shall automatically increase on January 1st of each year for a
period of ten (10) years commencing on January 1, 2010 and ending on (and
including) January 1, 2019, in an amount equal to the lesser of: (i) four
percent (4%) of the total number of shares of Common Stock outstanding on
December 31st of the preceding calendar year, (ii) a number of shares such that,
following such increase, the aggregate number of shares that have been reserved
for issuance under the Plan equals twenty-five percent (25%) of the total number
of shares of Common Stock outstanding on December 31st of the preceding calendar
year and (iii) a number of shares such that, following such increase, the
aggregate number of shares available for issuance under the Plan and not subject
to outstanding Stock Awards equals ten percent (10%) of the total number of
shares of Common Stock outstanding on December 31
st
of the
preceding calendar year. Notwithstanding the foregoing, the Board may act prior
to the first day of any calendar year, to provide that there shall be no
increase in the share reserve for such calendar year or that the increase in the
share reserve for such calendar year shall be a lesser number of shares of
Common Stock than would otherwise occur pursuant to the preceding
sentence. For clarity, the limitation in this Section 3(a) is a
limitation in the number of shares of Common Stock that may be issued pursuant
to the Plan. Accordingly, this Section 3(a) does not limit the
granting of Stock Awards except as provided in Section 7(a). Shares
may be issued in connection with a merger or acquisition as permitted by NASDAQ
Marketplace Rule 4350(i)(1)(A)(iii), NYSE Listed Company Manual Section 303A.08,
AMEX Company Guide Section 711, as applicable, or other stock exchange rules,
and such issuance shall not reduce the number of shares available for issuance
under the Plan. Furthermore, if a Stock Award or any portion thereof
(i) expires or otherwise terminates without all of the shares covered by such
Stock Award having been issued or (ii) is settled in cash (
i.e.
, the Participant
receives cash rather than stock), such expiration, termination or settlement
shall not reduce (or otherwise offset) the number of shares Common Stock that
may be available for issuance under the Plan.
(b)
Reversion of Shares to the Share
Reserve.
(i)
Shares Available For Subsequent
Issuance.
If any (i) Stock Award shall for any reason expire or otherwise
terminate, in whole or in part, without having been exercised in full, (ii)
shares of Common Stock issued to a Participant pursuant to a Stock Award are
forfeited to or repurchased by the Company at their original exercise or
purchase price pursuant to the Company’s reacquisition or repurchase rights
under the Plan, including any forfeiture or repurchase caused by the failure to
meet a contingency or condition required for the vesting of such shares, or
(iii) Stock Award is settled in cash, then the shares of Common Stock not issued
under such Stock Award, or forfeited to or repurchased by the Company, shall
revert to and again become available for issuance under the Plan.
(ii)
Other Shares Available for Subsequent
Issuance.
If any shares subject to a Stock Award are not delivered to a
Participant because the Stock Award is exercised through a reduction of shares
subject to the Stock Award (
i.e
., “net exercised”) or an
appreciation distribution in respect of a Stock Appreciation Right is paid in
shares of Common Stock, the number of shares subject to the Stock Award that are
not delivered to the Participant shall remain available for subsequent issuance
under the Plan. If any shares subject to a Stock Award are not delivered to a
Participant because such shares are withheld in satisfaction of the withholding
of taxes incurred in connection with the exercise of an Option, Stock
Appreciation Right, or the issuance of shares under a Restricted Stock Award or
Restricted Stock Unit Award, the number of shares that are not delivered to the
Participant shall remain available for subsequent issuance under the Plan. If
the exercise price of any Stock Award is satisfied by tendering shares of Common
Stock held by the Participant (either by actual delivery or attestation), then
the number of shares so tendered shall remain available for subsequent issuance
under the Plan.
(c)
Incentive Stock Option
Limit.
Notwithstanding anything to the contrary in Section 3(b),
subject to the provisions of Section 9(a) relating to Capitalization
Adjustments, the aggregate maximum number of shares of Common Stock that may be
issued pursuant to the exercise of Incentive Stock Options shall be 1,300,000
shares of Common Stock.
(d)
Source of Shares
. The stock
issuable under the Plan shall be shares of authorized but unissued or reacquired
Common Stock, including shares repurchased by the Company on the open market or
otherwise.
4.
ELIGIBILITY.
(a)
Eligibility for Specific Stock
Awards
. Incentive Stock Options may be granted only to employees of
the Company or a “parent corporation” or “subsidiary corporation” thereof (as
such terms are defined in Sections 424(e) and (f) of the Code). Stock
Awards other than Incentive Stock Options may be granted to Employees, Directors
and Consultants;
provided,
however
, Nonstatutory Stock Options and SARs may not be granted to
Employees, Directors, and Consultants who are providing Continuous Services only
to any “parent” (as such term is defined in Rule 405 promulgated under the
Securities Act) of the Company, unless such Stock Awards comply with the
distribution requirements of Section 409A of the Code.
(b)
Ten Percent Stockholders.
A
Ten Percent Stockholder shall not be granted an Incentive Stock Option unless
the exercise price of such Option is at least one hundred ten percent (110%) of
the Fair Market Value on the date of grant and the Option is not exercisable
after the expiration of five (5) years from the date of
grant.
(c)
Consultants.
A Consultant
shall not be eligible for the grant of a Stock Award if, at the time of grant, a
Form S-8 Registration Statement under the Securities Act (
“Form
S-8”
) is not available to register either the offer or the sale of the
Company’s securities to such Consultant because of the nature of the services
that the Consultant is providing to the Company, because the Consultant is not a
natural person, or because of any other rule governing the use of Form
S-8.
(d)
Section 162(m) Limitation on Annual
Grants.
Subject to the provisions of Section
9(a) relating to Capitalization Adjustments, at such time as the Company
may be subject to the applicable provisions of Section 162(m) of the Code, no
Participant shall be eligible to be granted during any calendar year Options,
Stock Appreciation Rights and Other Stock Awards whose value is determined by
reference to an increase over an exercise or strike price of at least one
hundred percent (100%) of the Fair Market Value on the date the Stock Award is
granted covering more than four hundred thirty-four thousand eight hundred seven
(434,807) shares of Common Stock.
5.
PROVISIONS RELATING TO
OPTIONS.
Each
Option shall be in such form and shall contain such terms and conditions as the
Board shall deem appropriate. All Options shall be separately designated
Incentive Stock Options or Nonstatutory Stock Options at the time of grant and,
if certificates are issued, a separate certificate or certificates shall be
issued for shares of Common Stock purchased on exercise of each type of Option.
If an Option is not specifically designated as an Incentive Stock Option, then
the Option shall be a Nonstatutory Stock Option. The provisions of separate
Options need not be identical;
provided, however
, that each
Option Agreement shall include (through incorporation of provisions hereof by
reference in the Option Agreement 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 of its grant or
such shorter period specified in the Option Agreement. Options held
by Ten Percent Stockholders shall not be exercisable after the expiration of
five (5) years from the date of grant or such shorter period specified in the
Option Agreement, pursuant to Section 4(b).
(b)
Exercise Price.
The initial
exercise price of each Option shall be not less than one hundred percent (100%)
of the Fair Market Value of the Common Stock subject to the Option on the date
the Option is granted. Options held by Ten Percent Stockholders shall
not be less than one hundred ten percent (110%) of the Fair Market Value of
Common Stock subject to the Option on the date the Option is granted, pursuant
to Section 4(b). Notwithstanding the foregoing, an Option may be
granted with an exercise price lower than one hundred percent (100%) of the Fair
Market Value of the Common Stock subject to the Option if such Option granted
pursuant to an assumption of or substitution for another option pursuant to a
Corporate Transaction and in a manner consistent with the provisions of Sections
409A and, if applicable, 424(a) of the Code.
(c)
Purchase Price for
Options.
The purchase price of Common Stock acquired pursuant to the
exercise of an Option shall be paid, to the extent permitted by applicable law
and as determined by the Board in its sole discretion, by any combination of the
methods of payment set forth below. The Board shall have the
authority to grant Options that do not permit all of the following methods of
payment (or otherwise restrict the ability to use certain methods) and to grant
Options that require the consent of the Company to utilize a particular method
of payment. The permitted methods of payment are as
follows:
(i)
by cash, check,
bank draft or money order payable to the Company;
(ii)
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;
(iii)
by delivery
to the Company (either by actual delivery or attestation) of shares of Common
Stock;
(iv)
if the option
is a Nonstatutory Stock Option, by a “net exercise” arrangement pursuant to
which the Company will reduce the number of shares of Common Stock issuable upon
exercise by the largest whole number of shares with a Fair Market Value that
does not exceed the aggregate exercise price;
provided, however
, that the
Company shall accept a cash or other payment from the Participant to the extent
of any remaining balance of the aggregate exercise price not satisfied by such
reduction in the number of whole shares to be issued;
provided, further,
that
shares of Common Stock will no longer be subject to an Option and will not be
exercisable thereafter to the extent that (A) shares issuable upon exercise are
reduced to pay the exercise price pursuant to the “net exercise,” (B) shares are
delivered to the Participant as a result of such exercise, and (C) shares are
withheld to satisfy tax withholding obligations; or
(v)
in any other
form of legal consideration that may be acceptable to the Board.
(d)
Transferability of Options.
The Board may, in its sole discretion, impose such limitations on the
transferability of Options as the Board shall determine. In the absence of such
a determination by the Board to the contrary, the following restrictions on the
transferability of Options shall apply:
(i)
Restrictions on Transfer.
An
Option shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Optionholder
only by the Optionholder;
provided, however
, that the
Board may, in its sole discretion, permit transfer of the Option in a manner
consistent with applicable tax and securities laws upon the Optionholder’s
request. Except as explicitly provide herin, an Option may not be
transferred for consideration.
(ii)
Domestic Relations Orders.
Notwithstanding the foregoing, an Option may be transferred pursuant to a
domestic relations order;
provided, however
, that if an
Option is an Incentive Stock Option, such Option may be deemed to be a
Nonstatutory Stock Option as a result of such transfer.
(iii)
Beneficiary Designation.
Notwithstanding the foregoing, the Optionholder may, by delivering written
notice to the Company, in a form provided by or otherwise satisfactory to the
Company and any broker designated by the Company to effect Option exercises,
designate a third party who, in the event of the death of the Optionholder,
shall thereafter be entitled to exercise the Option and receive the Common Stock
or other consideration resulting from such exercise. In the absence
of such a designation, the executor or administrator of the Optionholder’s
estate shall be entitled to exercise the Option and receive the Common Stock or
other consideration resulting from such exercise.
(e)
Vesting Generally.
The
total number of shares of Common Stock subject to an Option may vest and
therefore become exercisable in periodic installments that may or may not be
equal. The Option may be subject to such other terms and conditions
on the time or times when it may or may not be exercised (which may be based on
the satisfaction of Performance Goals or other criteria) as the Board may deem
appropriate. The vesting provisions of individual Options may
vary. The provisions of this Section 5(e) are subject to any
Option provisions governing the minimum number of shares of Common Stock as to
which an Option may be exercised.
(f)
Termination of Continuous
Service.
Except as otherwise provided in the applicable Option
Agreement or other agreement between the Optionholder and the Company, if an
Optionholder’s Continuous Service terminates (other than for Cause or upon the
Optionholder's death or Disability), the Optionholder may exercise his or her
Option (to the extent that the Optionholder was entitled to exercise such Option
as of the date of termination of Continuous Service) but only within such period
of time ending on the earlier of (i) the date three (3) months following the
termination of the Optionholder’s Continuous Service (or such longer or shorter
period specified in the Option Agreement), or (ii) the expiration of the term of
the Option as set forth in the Option Agreement. If, after
termination of Continuous Service, the Optionholder does not exercise his or her
Option within the time specified herein or in the Option Agreement (as
applicable), the Option shall terminate.
(g)
Extension of Termination
Date.
An Optionholder’s Option Agreement may provide that if the
exercise of the Option following the termination of the Optionholder’s
Continuous Service (other than for Cause or upon the Optionholder’s death or
Disability) would be prohibited at any time solely because the issuance of
shares of Common Stock would violate the registration requirements under the
Securities Act, then the Option shall terminate on the earlier of (i) the
expiration of a period of three (3) months after the termination of the
Optionholder’s Continuous Service during which the exercise of the Option would
not be in violation of such registration requirements, or (ii) the expiration of
the term of the Option as set forth in the Option Agreement. In
addition, unless otherwise provided in a Optionholder’s Option Agreement, if the
sale of any Common Stock received upon exercise of an Option following the
termination of the Optionholder’s Continuous Service (other than for Cause)
would violate the Company’s insider trading policy, then the Option shall
terminate on the earlier of (i) the expiration of a period equal to the
applicable post-termination exercise period after the termination of the
Optionholder’s Continuous Service during which the exercise of the Option would
not be in violation of the Company’s insider trading policy, or (ii) the
expiration of the term of the Option as set forth in the Option
Agreement.
(h)
Disability of
Optionholder.
Except as otherwise provided in the Option Agreement
or other agreement between the Optionholder and the Company, if an
Optionholder’s Continuous Service terminates as a result of the Optionholder’s
Disability, the Optionholder may exercise his or her Option (to the extent that
the Optionholder was entitled to exercise such Option as of the date of
termination of Continuous Service), but only within such period of time ending
on the earlier of (i) the date twelve (12) months following such termination of
Continuous Service (or such longer or shorter period specified in the Option
Agreement), or (ii) the expiration of the term of the Option as set forth in the
Option Agreement. If, after termination of Continuous Service, the
Optionholder does not exercise his or her Option within the time specified
herein or in the Option Agreement, the Option shall terminate.
(i)
Death of
Optionholder.
Except as otherwise provided in the Option or other
agreement between the Optionholder and the Company, if (i) an Optionholder’s
Continuous Service terminates as a result of the Optionholder’s death, or (ii)
the Optionholder dies within the period (if any) specified in the Option
Agreement after the termination of the Optionholder’s Continuous Service for a
reason other than death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date of death) by
the Optionholder’s estate, by a person who acquired the right to exercise the
Option by bequest or inheritance or by a person designated to exercise the
Option upon the Optionholder’s death, but only within the period ending on the
earlier of (i) the date eighteen (18) months following the date of death (or
such longer or shorter period specified in the Option Agreement), or (ii) the
expiration of the term of such Option as set forth in the Option
Agreement. If, after the Optionholder’s death, the Option is not
exercised within the time specified herein or in the Option Agreement, the
Option shall terminate.
(j)
Termination for
Cause.
Except as explicitly provided otherwise in an Optionholder’s
Option Agreement, if an Optionholder’s Continuous Service is terminated for
Cause, the Option shall terminate upon the date on which the event giving rise
to the termination occurred, and the Optionholder shall be prohibited from
exercising his or her Option from and after the time of such termination of
Continuous Service.
(k)
Non-Exempt Employees
. No
Option granted to an Employee who is a non-exempt employee for purposes of the
Fair Labor Standards Act of 1938, as amended, shall be first exercisable for any
shares of Common Stock until at least six (6) months following the date of grant
of the Option. Notwithstanding the foregoing, consistent with the provisions of
the Worker Economic Opportunity Act, (i) in the event of the Optionholder’s
death or Disability, (ii) upon a Corporate Transaction in which such Option is
not assumed, continued, or substituted, (iii) upon a Change in Control, or (iv)
upon the Optionholder’s retirement (as such term may be defined in the
Optionholder’s Option Agreement or in another applicable agreement or in
accordance with the Company's then current employment policies and guidelines),
any such vested Options may be exercised earlier than six (6) months following
the date of grant. The foregoing provision is intended to operate so
that any income derived by a non-exempt employee in connection with the exercise
or vesting of an Option will be exempt from his or her regular rate of
pay.
(l)
Early Exercise.
The
Option may, but need not, include a provision whereby the Optionholder may elect
at any time before the Optionholder’s Continuous Service terminates to exercise
the Option as to any part or all of the shares of Common Stock subject to the
Option prior to the full vesting of the Option. Any unvested shares
of Common Stock so purchased may be subject to a repurchase option in favor of
the Company or to any other restriction the Board determines to be
appropriate. The Company will not exercise its repurchase option
until at least six (6) months (or such longer or shorter period of time required
to avoid a charge to earnings for financial accounting purposes) have elapsed
following exercise of the Option unless the Board otherwise specifically
provides in the Option.
6.
PROVISIONS OF STOCK AWARDS OTHER THAN
OPTIONS.
(a)
Restricted Stock Awards.
Each
Restricted Stock Award Agreement shall be in such form and shall contain such
terms and conditions as the Board shall deem appropriate. To the extent
consistent with the Company’s Bylaws, at the Board’s election, shares of Common
Stock may be (x) held in book entry form subject to the Company’s instructions
until any restrictions relating to the Restricted Stock Award lapse; or
(y) evidenced by a certificate, which certificate shall be held in such
form and manner as determined by the Board. The terms and conditions of
Restricted Stock Award Agreements may change from time to time, and the terms
and conditions of separate Restricted Stock Award Agreements need not be
identical,
provided,
however
, that each Restricted Stock Award Agreement shall include
(through incorporation of provisions hereof by reference in the agreement or
otherwise) the substance of each of the following provisions:
(i)
Consideration.
A
Restricted Stock Award may be awarded in consideration for (A) cash, check, bank
draft or money order payable to the Company, (B) past or future services
actually rendered to the Company or an Affiliate, or (C) any other form of legal
consideration that may be acceptable to the Board in its sole discretion and
permissible under applicable law.
(ii)
Vesting.
Shares of Common
Stock awarded under the Restricted Stock Award Agreement may be subject to
forfeiture to the Company in accordance with a vesting schedule to be determined
by the Board.
(iii)
Termination of Participant’s
Continuous Service.
If a Participant’s Continuous Service
terminates, the Company may receive through a forfeiture condition, or a
repurchase right any or all of the shares of Common Stock held by the
Participant that have not vested as of the date of termination of Continuous
Service under the terms of the Restricted Stock Award Agreement.
(iv)
Transferability.
Rights to
acquire shares of Common Stock under the Restricted Stock Award Agreement shall
be transferable by the Participant only upon such terms and conditions as are
set forth in the Restricted Stock Award Agreement, as the Board shall determine
in its sole discretion, so long as Common Stock awarded under the Restricted
Stock Award Agreement remains subject to the terms of the Restricted Stock Award
Agreement.
(b)
Restricted Stock Unit Awards.
Each Restricted Stock Unit Award Agreement shall be in such form and
shall contain such terms and conditions as the Board shall deem appropriate. The
terms and conditions of Restricted Stock Unit Award Agreements may change from
time to time, and the terms and conditions of separate Restricted Stock Unit
Award Agreements need not be identical;
provided, however,
that each
Restricted Stock Unit Award Agreement shall confirm to (through
incorporation of the provisions hereof by reference in the Agreement or
otherwise) the substance of each of the following provisions:
(i)
Consideration.
At the time of
grant of a Restricted Stock Unit Award, the Board will determine the
consideration, if any, to be paid by the Participant upon delivery of each share
of Common Stock subject to the Restricted Stock Unit Award. The consideration to
be paid (if any) by the Participant for each share of Common Stock subject to a
Restricted Stock Unit Award may be paid in any form of legal consideration that
may be acceptable to the Board in its sole discretion and permissible under
applicable law.
(ii)
Vesting.
At the time of the
grant of a Restricted Stock Unit Award, the Board may impose such restrictions
or conditions to the vesting of the Restricted Stock Unit Award as it, in its
sole discretion, deems appropriate.
(iii)
Payment
. A Restricted Stock
Unit Award may be settled by the delivery of shares of Common Stock, their cash
equivalent, any combination thereof or in any other form of consideration, as
determined by the Board and contained in the Restricted Stock Unit Award
Agreement.
(iv)
Additional Restrictions.
At
the time of the grant of a Restricted Stock Unit Award, the Board, as it deems
appropriate, may impose such restrictions or conditions that delay the delivery
of the shares of Common Stock (or their cash equivalent) subject to a Restricted
Stock Unit Award to a time after the vesting of such Restricted Stock Unit
Award.
(v)
Dividend Equivalents.
Dividend
equivalents may be credited in respect of shares of Common Stock covered by a
Restricted Stock Unit Award, as determined by the Board and contained in the
Restricted Stock Unit Award Agreement. At the sole discretion of the Board, such
dividend equivalents may be converted into additional shares of Common Stock
covered by the Restricted Stock Unit Award in such manner as determined by the
Board. Any additional shares covered by the Restricted Stock Unit Award credited
by reason of such dividend equivalents will be subject to all the terms and
conditions of the underlying Restricted Stock Unit Award Agreement to which they
relate.
(vi)
Termination of Participant’s
Continuous Service.
Except as otherwise provided in the applicable
Restricted Stock Unit Award Agreement, such portion of the Restricted Stock Unit
Award that has not vested will be forfeited upon the Participant’s termination
of Continuous Service.
(c)
Stock Appreciation Rights.
Each Stock Appreciation Right Agreement shall be in such form and shall
contain such terms and conditions as the Board shall deem appropriate. Stock
Appreciation Rights may be granted as stand-alone Stock Awards or in tandem with
other Stock Awards. The terms and conditions of Stock Appreciation Right
Agreements may change from time to time, and the terms and conditions of
separate Stock Appreciation Right Agreements need not be identical;
provided, however
, that each
Stock Appreciation Right Agreement shall include (through incorporation of the
provisions hereof by reference in the Agreement or otherwise) the substance of
each of the following provisions:
(i)
Term.
No Stock Appreciation
Right shall be exercisable after the expiration of ten (10) years from the date
of its grant or such shorter period specified in the Stock Appreciation Right
Agreement.
(ii)
Strike Price.
Each Stock
Appreciation Right will be denominated in shares of Common Stock equivalents.
The strike price of each Stock Appreciation Right granted as a stand-alone or
tandem Stock Award shall not be less than one hundred percent (100%) of the Fair
Market Value of the Common Stock equivalents subject to the Stock Appreciation
Right on the date of grant.
(iii)
Calculation of Appreciation.
The appreciation distribution payable on the exercise of a Stock Appreciation
Right will be not greater than an amount equal to the excess of (A) the
aggregate Fair Market Value (on the date of the exercise of the Stock
Appreciation Right) of a number of shares of Common Stock equal to the number of
shares of Common Stock equivalents in which the Participant is vested under such
Stock Appreciation Right, and with respect to which the Participant is
exercising the Stock Appreciation Right on such date, over (B) the strike price
that will be determined by the Board at the time of grant of the Stock
Appreciation Right.
(iv)
Vesting.
At the time of the
grant of a Stock Appreciation Right, the Board may impose such restrictions or
conditions to the vesting of such Stock Appreciation Right as it, in its sole
discretion, deems appropriate.
(v)
Exercise.
To exercise any
outstanding Stock Appreciation Right, the Participant must provide written
notice of exercise to the Company in compliance with the provisions of the Stock
Appreciation Right Agreement evidencing such Stock Appreciation
Right.
(vi)
Payment
. The appreciation
distribution in respect to a Stock Appreciation Right may be paid in Common
Stock, in cash, in any combination of the two or in any other form of
consideration, as determined by the Board and contained in the Stock
Appreciation Right Agreement evidencing such Stock Appreciation Right. An
appreciation distribution in respect to a Stock Appreciation Right that is paid
in a form of consideration other than Common Stock shall not reduce the share
reserve.
(vii)
Termination of Continuous
Service.
In the event that a Participant’s Continuous Service terminates
(other than for Cause), the Participant may exercise his or her Stock
Appreciation Right (to the extent that the Participant was entitled to exercise
such Stock Appreciation Right as of the date of termination) but only within
such period of time ending on the earlier of (A) the date three (3) months
following the termination of the Participant’s Continuous Service (or such
longer or shorter period specified in the Stock Appreciation Right Agreement),
or (B) the expiration of the term of the Stock Appreciation Right as set forth
in the Stock Appreciation Right Agreement. If, after termination, the
Participant does not exercise his or her Stock Appreciation Right within the
time specified herein or in the Stock Appreciation Right Agreement (as
applicable), the Stock Appreciation Right shall terminate.
(viii)
Termination for Cause.
Except
as explicitly provided otherwise in an Participant’s Stock Appreciation Right
Agreement, in the event that a Participant’s Continuous Service is terminated
for Cause, the Stock Appreciation Right shall terminate upon the termination
date of such Participant’s Continuous Service, and the Participant shall be
prohibited from exercising his or her Stock Appreciation Right from and after
the time of such termination of Continuous Service.
(d)
Performance
Awards
.
(i)
Performance Stock
Awards
. A Performance Stock Award is a Stock Award that may vest or
may be exercised contingent upon the attainment during a Performance Period of
certain Performance Goals. A Performance Stock Award may, but need
not, require the completion of a specified period of Continuous Service. The
length of any Performance Period, the Performance Goals to be achieved during
the Performance Period, and the measure of whether and to what degree such
Performance Goals have been attained shall be conclusively determined by the
Committee in its sole discretion. The maximum number of shares to be
received by any Participant in any calendar year attributable to Stock Awards
described in this Section 6(d)(i) (whether the grant, vesting, or exercise is
contingent upon the attainment during a Performance Period of the Performance
Goals) shall not exceed four hundred thirty-four thousand eight hundred seven
(434,807) shares of Common Stock. The Board may provide for or,
subject to such terms and conditions as the Board may specify, may permit a
Participant to elect for, the payment of any Performance Stock Award to be
deferred to a specified date or event. In addition, to the extent
permitted by applicable law and the applicable Award Agreement, the Board may
determine that cash may be used in payment of Performance Stock
Awards.
(ii)
Performance Cash
Awards
. A Performance Cash Award is a cash award that may be paid
contingent upon the attainment during a Performance Period of certain
Performance Goals. A Performance Cash Award may also require the
completion of a specified period of Continuous Service. At the time
of grant of a Performance Cash Award, the length of any Performance Period, the
Performance Goals to be achieved during the Performance Period, and the measure
of whether and to what degree such Performance Goals have been attained shall be
conclusively determined by the Committee in its sole discretion. In
any calendar year, the Committee may not grant a Performance Cash Award
that has a maximum value that may be paid to any Participant in
excess of five million dollars ($5,000,000).
The Board may provide
for or, subject to such terms and conditions as the Board may specify, may
permit a Participant to elect for, the payment of any Performance Cash Award to
be deferred to a specified date or event. The Committee may specify
the form of payment of Performance Cash Awards, which may be cash or other
property, or may provide for a Participant to have the option for his or her
Performance Cash Award, or such portion thereof as the Board may specify, to be
paid in whole or in part in cash or other property.
(e)
Section 162 (m)
Compliance
. Unless otherwise permitted in compliance with the
requirements of Section 162(m) of the Code with respect to an Award intended to
qualify as “performance-based compensation” thereunder, the Committee shall
establish the Performance Goals applicable to, and the formula for calculating
the amount payable under, the Award no later than the earlier of (a) the date
ninety (90) days after the commencement of the applicable Performance Period, or
(b) the date on which twenty-five (25%) of the Performance Period has elapsed,
and in any event at a time when the achievement of the applicable Performance
Goals remains substantially uncertain. Prior to the payment of any
compensation under an Award intended to qualify as “performance-based
compensation” under Section 162(m) of the Code, the Committee shall certify the
extent to which any Performance Goals and any other material terms under such
Award have been satisfied (other than in cases where such relate solely to the
increase in the value of the Common Stock). Notwithstanding satisfaction of any
completion of any Performance Goals, to the extent specified at the time of
grant of an Award to “covered employees” within the meaning of Section 162(m) of
the Code, the number of Shares, Options, cash or other benefits granted, issued,
retainable and/or vested under an Award on account of satisfaction of such
Performance Goals may be reduced by the Committee on the basis of such further
considerations as the Committee, in its sole discretion, shall
determine.
(f)
Other Stock Awards
. Other
forms of Stock Awards valued in whole or in part by reference to, or otherwise
based on, Common Stock, including the appreciation in value thereof (e.g.,
options or stock rights with an exercise price or strike price less than 100% of
the Fair Market Value of the Common Stock at the time of grant) may be granted
either alone or in addition to Stock Awards provided for under Section 5
and the preceding provisions of this Section 6. Subject to the
provisions of the Plan, the Board shall have sole and complete authority to
determine the persons to whom and the time or times at which such Other Stock
Awards will be granted, the number of shares of Common Stock (or the cash
equivalent thereof) to be granted pursuant to such Other Stock Awards and all
other terms and conditions of such Other Stock Awards.
7.
COVENANTS OF THE
COMPANY.
(a)
Availability of Shares.
During
the terms of the Stock Awards, the Company shall keep available at all times the
number of shares of Common Stock required to satisfy such Stock
Awards.
(b)
Securities Law
Compliance.
The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be
required to grant Stock Awards and to issue and sell shares of Common Stock upon
exercise of the Stock Awards;
provided, however,
that this
undertaking shall not require the Company to register under the Securities Act
the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable
to obtain from any such regulatory commission or agency the authority that
counsel for the Company deems necessary for the lawful issuance and sale of
Common Stock under the Plan, the Company shall be relieved from any liability
for failure to issue and sell Common Stock upon exercise of such Stock Awards
unless and until such authority is obtained. A Participant shall not
be eligible for the grant of a Stock Award or the subsequent issuance of Common
Stock pursuant to the Stock Award if such grant or issuance would be in
violation of any applicable securities law.
(c)
No Obligation to Notify or Minimize
Taxes.
The Company shall have no duty or obligation to any
Participant to advise such holder as to the time or manner of exercising such
Stock Award. Furthermore, the Company shall have no duty or
obligation to warn or otherwise advise such holder of a pending termination or
expiration of a Stock Award or a possible period in which the Stock Award may
not be exercised. The Company has no duty or obligation to minimize
the tax consequences of a Stock Award to the holder of such Stock
Award.
8.
MISCELLANEOUS.
(a)
Use of Proceeds from Sales of Common
Stock.
Proceeds from the sale of shares of Common Stock pursuant to Stock
Awards shall constitute general funds of the Company.
(b)
Corporate Action Constituting Grant
of Stock Awards.
Corporate action constituting a grant by the
Company of a Stock Award to any Participant shall be deemed completed as of the
date of such corporate action, unless otherwise determined by the Board,
regardless of when the instrument, certificate, or letter evidencing the Stock
Award is communicated to, or actually received or accepted by the
Participant.
(c)
Stockholder Rights.
No
Participant shall be deemed to be the holder of, or to have any of the rights of
a holder with respect to, any shares of Common Stock subject to such Stock Award
unless and until (i) such Participant has satisfied all requirements for
exercise of the Stock Award pursuant to its terms, if applicable, and (ii) the
issuance of the Common Stock subject to such Stock Award has been entered into
the books and records of the Company.
(d)
No Employment or Other Service
Rights.
Nothing in the Plan, any Stock Award Agreement or any other
instrument executed thereunder or in connection with any Award granted pursuant
thereto shall confer upon any Participant any right to continue to serve the
Company or an Affiliate in the capacity in effect at the time the Stock Award
was granted or shall affect the right of the Company or an Affiliate to
terminate (i) the employment of an Employee with or without notice and with or
without cause, (ii) the service of a Consultant pursuant to the terms of such
Consultant’s agreement with the Company or an Affiliate, or (iii) the service of
a Director pursuant to the Bylaws of the Company or an Affiliate, and any
applicable provisions of the corporate law of the state in which the Company or
the Affiliate is incorporated, as the case may be.
(e)
Incentive Stock Option $100,000
Limitation.
To the extent that the aggregate Fair Market Value
(determined at the time of grant) of Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by any Optionholder
during any calendar year (under all plans of the Company and any Affiliates)
exceeds one hundred thousand dollars ($100,000), the Options or portions thereof
that exceed such limit (according to the order in which they were granted) shall
be treated as Nonstatutory Stock Options, notwithstanding any contrary provision
of the applicable Option Agreement(s).
(f)
Investment
Assurances.
The Company may require a Participant, as a condition of
exercising or acquiring Common Stock under any Stock Award, (i) to give written
assurances satisfactory to the Company as to the Participant’s knowledge and
experience in financial and business matters and/or to employ a purchaser
representative reasonably satisfactory to the Company who is knowledgeable and
experienced in financial and business matters and that he or she is capable of
evaluating, alone or together with the purchaser representative, the merits and
risks of exercising the Stock Award; and (ii) to give written assurances
satisfactory to the Company stating that the Participant is acquiring Common
Stock subject to the Stock Award for the Participant’s own account and not with
any present intention of selling or otherwise distributing the Common
Stock. The foregoing requirements, and any assurances given pursuant
to such requirements, shall be inoperative if (A) the issuance of the shares
upon the exercise or acquisition of Common Stock under the Stock Award has been
registered under a then currently effective registration statement under the
Securities Act, or (B) as to any particular requirement, a determination is made
by counsel for the Company that such requirement need not be met in the
circumstances under the then applicable securities laws. The Company
may, upon advice of counsel to the Company, place legends on stock certificates
issued under the Plan as such counsel deems necessary or appropriate in order to
comply with applicable securities laws, including, but not limited to, legends
restricting the transfer of the Common Stock.
(g)
Withholding
Obligations.
Unless prohibited by the terms of a Stock Award
Agreement, the Company may, in its sole discretion, satisfy any federal, state
or local tax withholding obligation relating to
an Award by
any of the following means or by a combination of such means: (i) causing the
Participant to tender a cash payment; (ii) withholding shares of
Common Stock from the shares of Common Stock issued or otherwise issuable to the
Participant in connection with the Award;
provided, however,
that no
shares of Common Stock are withheld with a value exceeding the minimum amount of
tax required to be withheld by law (or such lesser amount as may be necessary to
avoid classification of the Stock Award as a liability for financial accounting
purposes); (iii) withholding cash from an Award settled in cash; (iv)
withholding payment from any amounts otherwise payable to the Participant; or
(v) by such other method as may be set forth in the Award
Agreement.
(h)
Electronic Delivery
. Any
reference herein to a “written” agreement or document shall include any
agreement or document delivered electronically or posted on the Company’s
intranet.
(i)
Deferrals.
To the extent
permitted by applicable law, the Board, in its sole discretion, may determine
that the delivery of Common Stock or the payment of cash, upon the exercise,
vesting or settlement of all or a portion of any Award may be deferred and may
establish programs and procedures for deferral elections to be made by
Participants. Deferrals by Participants will be made in accordance
with Section 409A of the Code. Consistent with Section 409A of the Code, the
Board may provide for distributions while a Participant is still an employee or
otherwise providing services to the Company. The Board is authorized
to make deferrals of Awards and determine when, and in what annual percentages,
Participants may receive payments, including lump sum payments, following the
Participant’s termination of Continuous Service, and implement such other terms
and conditions consistent with the provisions of the Plan and in accordance with
applicable law.
(j)
Compliance with 409A.
To
the extent that the Board determines that any Award granted hereunder is subject
to Section 409A of the Code, the Award Agreement evidencing such Award shall
incorporate the terms and conditions
necessary to
avoid the consequences specified in Section 409A(a)(1) of the
Code. To the extent applicable, the Plan and Award Agreements shall
be interpreted in accordance with Section 409A of the Code
.
Notwithstanding
any provision of the Plan to the contrary, in the event that following the
Effective Date the Board determines that any Award may be subject to Section
409A of the Code), the Board may adopt such amendments to the Plan and the
applicable Award Agreement or adopt other policies and procedures (including
amendments, policies and procedures with retroactive effect), or take any other
actions, that the Board determines are necessary or appropriate to (i) exempt
the Award from Section 409A of the Code and/or preserve the intended tax
treatment of the benefits provided with respect to the Award, or (ii) comply
with the requirements of Section 409A of the Code. Notwithstanding anything
to the contrary in this Plan (and unless the Award Agreement specifically
provides otherwise), if the Shares are publicly traded and a Participant holding
an Award that constitutes “deferred compensation” under Section 409A of the Code
is a “specified employee” for purposes of Section 409A of the Code, no
distribution or payment of any amount shall be made before a date that is six
(6) months following the date of such Participant's “separation from service”
(as defined in Section 409A of the Code without regard to alternative
definitions thereunder) or, if earlier, the date of the Participant's
death.
9.
ADJUSTMENTS UPON CHANGES IN COMMON
STOCK; OTHER CORPORATE EVENTS.
(a)
Capitalization
Adjustments
. In the event of a Capitalization Adjustment, the Board
shall appropriately and proportionately adjust: (i) the class(es) and maximum
number of securities subject to the Plan pursuant to Section 3(a), (ii) the
class(es) and maximum number of securities that may be issued pursuant to the
exercise of Incentive Stock Options pursuant to Section 3(c), (iii) the
class(es) and maximum number of securities that may be awarded to any person
pursuant to Section 4(d) and 6(d)(i), and (iv) the class(es) and number of
securities and price per share of stock subject to outstanding Stock
Awards. The Board shall make such adjustments, and its determination
shall be final, binding and conclusive.
(b)
Dissolution or
Liquidation
. Except as otherwise provided in the Stock Award
Agreement, in the event of a dissolution or liquidation of the Company, all
outstanding Stock Awards (other than Stock Awards consisting of vested and
outstanding shares of Common Stock not subject to a forfeiture condition or the
Company’s right of repurchase) shall terminate immediately prior to the
completion of such dissolution or liquidation, and the shares of Common Stock
subject to the Company’s repurchase rights or subject to a forfeiture condition
may be repurchased or reacquired by the Company notwithstanding the fact that
the holder of such Stock Award is providing Continuous Service;
provided, however,
that the
Board may, in its sole discretion, cause some or all Stock Awards to become
fully vested, exercisable and/or no longer subject to repurchase or forfeiture
(to the extent such Stock Awards have not previously expired or terminated)
before the dissolution or liquidation is completed but contingent on its
completion.
(c)
Corporate
Transaction.
The following provisions shall apply to Stock Awards in
the event of a Corporate Transaction unless otherwise provided in the instrument
evidencing the Stock Award or any other written agreement between the Company or
any Affiliate and the Participant or unless otherwise expressly provided by the
Board at the time of grant of a Stock Award.
(i)
Stock Awards May Be Assumed.
In the event of a Corporate Transaction, any surviving corporation or acquiring
corporation (or the surviving or acquiring corporation’s parent company) may
assume or continue any or all Stock Awards outstanding under the Plan or may
substitute similar stock awards for Stock Awards outstanding under the Plan
(including but not limited to, awards to acquire the same consideration paid to
the stockholders of the Company pursuant to the Corporate Transaction), and any
reacquisition or repurchase rights held by the Company in respect of Common
Stock issued pursuant to Stock Awards may be assigned by the Company to the
successor of the Company (or the successor’s parent company, if any), in
connection with such Corporate Transaction. A surviving corporation
or acquiring corporation (or its parent) may choose to assume or continue only a
portion of a Stock Award or substitute a similar stock award for only a portion
of a Stock Award, or may choose to assume or continue the Stock Awards held by
some, but not all Participants. The terms of any assumption,
continuation or substitution shall be set by the Board.
(ii)
Stock Awards Held by Current
Participants.
In the event of a Corporate Transaction in which the
surviving corporation or acquiring corporation (or its parent company) does not
assume or continue such outstanding Stock Awards or substitute similar stock
awards for such outstanding Stock Awards, then with respect to Stock Awards that
have not been assumed, continued or substituted and that are held by
Participants whose Continuous Service has not terminated prior to the effective
time of the Corporate Transaction (referred to as the “
Current
Participants
”), the vesting of such Stock Awards (and, with respect to
Options and Stock Appreciation Rights, the time when such Stock Awards may be
exercised) may in the Board’s sole discretion be accelerated in full to a date
prior to the effective time of such Corporate Transaction (contingent upon the
effectiveness of the Corporate Transaction) as the Board shall determine (or, if
the Board shall not determine such a date, to the date that is five (5) days
prior to the effective time of the Corporate Transaction), and such Stock Awards
shall terminate if not exercised (if applicable) at or prior to the effective
time of the Corporate Transaction, and any reacquisition or repurchase rights
held by the Company with respect to such Stock Awards shall lapse (contingent
upon the effectiveness of the Corporate Transaction).
(iii)
Stock Awards Held by Persons other
than Current Participants.
In the event of a Corporate Transaction in
which the surviving corporation or acquiring corporation (or its parent company)
does not assume or continue such outstanding Stock Awards or substitute similar
stock awards for such outstanding Stock Awards, then with respect to Stock
Awards that have not been assumed, continued or substituted and that are held by
persons other than Current Participants, the vesting of such Stock Awards (and,
if applicable, the time at which such Stock Award may be exercised) shall not be
accelerated and such Stock Awards (other than a Stock Award consisting of vested
and outstanding shares of Common Stock not subject to the Company’s right of
repurchase) shall terminate if not exercised (if applicable) prior to the
effective time of the Corporate Transaction;
provided, however,
that any
reacquisition or repurchase rights held by the Company with respect to such
Stock Awards shall not terminate and may continue to be exercised
notwithstanding the Corporate Transaction.
(iv)
Payment for Stock Awards in Lieu of
Exercise.
Notwithstanding the foregoing, in the event a Stock Award will
terminate if not exercised prior to the effective time of a Corporate
Transaction, the Board may provide, in its sole discretion, that the holder of
such Stock Award may not exercise such Stock Award but will receive a payment,
in such form as may be determined by the Board, equal in value, at the effective
time, to the excess, if any, of (A) the value of the property the Participant
would have received upon the exercise of the Stock Award (including, at the
discretion of the Board, any unvested portion of such Stock Award), over (B) any
exercise price payable by such holder in connection with such
exercise.
(d)
Change in Control.
A
Stock Award may be subject to additional acceleration of vesting and
exercisability upon or after a Change in Control as may be provided in the Stock
Award Agreement for such Stock Award or as may be provided in any other written
agreement between the Company or any Affiliate and the Participant, but in the
absence of such provision, no such acceleration shall occur.
10.
TERMINATION OR SUSPENSION OF THE
PLAN.
(a)
Plan Term.
The Plan shall
continue until such time as it is suspended or terminated by the
Board. Notwithstanding the foregoing, the Board may not grant any
Incentive Stock Options after the tenth (10
th
)
anniversary from the earlier of (i) the date the Plan is adopted by the Board,
or (ii) the date the Plan is approved by the stockholders of the
Company. No Awards may be granted under the Plan while the Plan is
suspended or after it is terminated.
(b)
No Impairment of
Rights.
Suspension or termination of the Plan shall not impair
rights and obligations under any Award granted while the Plan is in effect
except with the written consent of the affected Participant.
11.
EFFECTIVE DATE OF
PLAN.
This Plan shall become effective on the Effective Date.
12.
CHOICE OF LAW.
The law
of the State of California shall govern all questions concerning the
construction, validity and interpretation of this Plan, without regard to such
state’s conflict of laws rules.
13.
DEFINITIONS.
As used in the
Plan, the following definitions shall apply to the capitalized terms
indicated below:
(a)
“Affiliate”
means, at the time of determination, any “parent” or “subsidiary” as such terms
are defined in Rule 405 of the Securities Act. The Board shall have the
authority to determine the time or times at which “parent” or “subsidiary”
status is determined within the foregoing definition.
(b)
“Award”
means a Stock Award or a Performance Cash Award.
(c)
“Award
Agreement”
means a written agreement between the Company and a
Participant evidencing the terms and conditions of an Award.
(d)
“Board”
means the Board of Directors of the Company.
(e)
“Capitalization
Adjustment”
means any change that is made in, or other events that
occur with respect to, the Common Stock subject to the Plan or subject to any
Stock Award after the Effective Date without the receipt of consideration by the
Company (through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other similar transaction. Notwithstanding
the foregoing, the conversion of any convertible securities of the Company shall
not be treated as a Capitalization Adjustment.
(f)
“Cause”
shall
have the meaning ascribed to such term in any written agreement between the
Participant and the Company defining such term and, in the absence of such
agreement, such term shall mean, with respect to a Participant, the occurrence
of any of the following events that has a material negative impact on the
business or reputation of the Company: (i) such Participant’s
commission of any felony or any crime involving fraud, dishonesty or moral
turpitude under the laws of the United States or any state thereof; (ii) such
Participant’s attempted commission of, or participation in, a fraud or act of
dishonesty against the Company; (iii) such Participant’s intentional, material
violation of any contract or agreement between the Participant and the Company
or of any statutory duty owed to the Company; (iv) such Participant’s
unauthorized use or disclosure of the Company’s confidential information or
trade secrets; or (v) such Participant’s gross misconduct. The determination
that a termination of the Participant’s Continuous Service is either for Cause
or without Cause shall be made by the Company in its sole
discretion. Any determination by the Company that the Continuous
Service of a Participant was terminated with or without Cause for the purposes
of outstanding Awards held by such Participant shall have no effect upon any
determination of the rights or obligations of the Company or such Participant
for any other purpose.
(g)
“Change in
Control”
means the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events:
(i)
any Exchange
Act Person becomes the Owner, directly or indirectly, of securities of the
Company representing more than fifty percent (50%) of the combined voting power
of the Company’s then outstanding securities other than by virtue of a merger,
consolidation or similar transaction. Notwithstanding the foregoing,
a Change in Control shall not be deemed to occur (A) on account of the
acquisition of securities of the Company directly from the Company, (B) on
account of the acquisition of securities of the Company by an investor, any
affiliate thereof or any other Exchange Act Person that acquires the Company’s
securities in a transaction or series of related transactions the primary
purpose of which is to obtain financing for the Company through the issuance of
equity securities, or (C) solely because the level of Ownership held by any
Exchange Act Person (the “
Subject Person
”) exceeds the
designated percentage threshold of the outstanding voting securities as a result
of a repurchase or other acquisition of voting securities by the Company
reducing the number of shares outstanding, provided that if a Change in Control
would occur (but for the operation of this sentence) as a result of the
acquisition of voting securities by the Company, and after such share
acquisition, the Subject Person becomes the Owner of any additional voting
securities that, assuming the repurchase or other acquisition had not occurred,
increases the percentage of the then outstanding voting securities Owned by the
Subject Person over the designated percentage threshold, then a Change in
Control shall be deemed to occur;
(ii)
there is
consummated a merger, consolidation or similar transaction involving (directly
or indirectly) the Company and, immediately after the consummation of such
merger, consolidation or similar transaction, the stockholders of the Company
immediately prior thereto do not Own, directly or indirectly, either (A)
outstanding voting securities representing more than fifty percent (50%) of the
combined outstanding voting power of the surviving Entity in such merger,
consolidation or similar transaction or (B) more than fifty percent (50%) of the
combined outstanding voting power of the parent of the surviving Entity in such
merger, consolidation or similar transaction, in each case in substantially the
same proportions as their Ownership of the outstanding voting securities of the
Company immediately prior to such transaction;
(iii)
the
stockholders of the Company approve or the Board approves a plan of complete
dissolution or liquidation of the Company, or a complete dissolution or
liquidation of the Company shall otherwise occur, except for a liquidation into
a parent corporation;
(iv)
there is
consummated a sale, lease, exclusive license or other disposition of all or
substantially all of the consolidated assets of the Company and its
Subsidiaries, other than a sale, lease, license or other disposition of all or
substantially all of the consolidated assets of the Company and its Subsidiaries
to an Entity, more than fifty percent (50%) of the combined voting power of the
voting securities of which are Owned by stockholders of the Company in
substantially the same proportions as their Ownership of the outstanding voting
securities of the Company immediately prior to such sale, lease, license or
other disposition; or
(v)
individuals
who, on the date the Plan is adopted by the Board, are members of the Board (the
“
Incumbent
Board
”) cease for any reason to constitute at least a majority of the
members of the Board;
provided, however
, that if
the appointment or election (or nomination for election) of any new Board member
was approved or recommended by a majority vote of the members of the Incumbent
Board then still in office, such new member shall, for purposes of this Plan, be
considered as a member of the Incumbent Board.
Notwithstanding
the foregoing or any other provision of this Plan, (A) the term Change in
Control shall not include a sale of assets, merger or other transaction effected
exclusively for the purpose of changing the domicile of the Company, and (B) the
definition of Change in Control (or any analogous term) in an individual written
agreement between the Company or any Affiliate and the Participant shall
supersede the foregoing definition with respect to Awards subject to such
agreement;
provided,
however
, that if no definition of Change in Control or any analogous term
is set forth in such an individual written agreement, the foregoing definition
shall apply.
(h)
“Code”
means the Internal Revenue Code of 1986, as amended.
(i)
“Committee”
means a committee of one (1) or more Directors to whom authority has been
delegated by the Board in accordance with Section 2(c).
(j)
“Common
Stock”
means the common stock of the Company.
(k)
“Company”
means BroadVision, Inc., a Delaware corporation.
(l)
“Consultant”
means any person, including an advisor, who is (i) engaged by the Company
or an Affiliate to render consulting or advisory services and is compensated for
such services, or (ii) serving as a member of the board of directors of an
Affiliate and is compensated for such services. However, service
solely as a Director, or payment of a fee for such service, shall not cause a
Director to be considered a “Consultant” for purposes of the Plan.
Notwithstanding
the foregoing, a person is treated as a Consultant under this Plan only if a
Form S-8 Registration Statement under the Securities Act is available to
register the sale of the Company’s securities to such person.
(m)
“Continuous
Service”
means that the Participant’s service with the Company or an
Affiliate, whether as an Employee, Director or Consultant, is not interrupted or
terminated. A change in the capacity in which the Participant renders
service to the Company or an Affiliate as an Employee, Consultant or Director or
a change in the entity for which the Participant renders such service, provided
that there is no interruption or termination of the Participant’s service with
the Company or an Affiliate, shall not terminate a Participant’s Continuous
Service;
provided, however,
if the Entity for which a Participant is rendering services ceases to
qualify as an Affiliate, as determined by the Board, in its sole discretion,
such Participant’s Continuous Service shall be considered to have terminated on
the date such Entity ceases to qualify as an Affiliate. To the extent
permitted by law, the Board or the chief executive officer of the Company, in
that party’s sole discretion, may determine whether Continuous Service shall be
considered interrupted in the case of (i) any leave of absence approved by the
Board or Chief Executive Officer, including sick leave, military leave or any
other personal leave, or (ii) transfers between the Company, an Affiliate, or
their successors. Notwithstanding the foregoing, a leave of absence
shall be treated as Continuous Service for purposes of vesting in a Stock Award
only to such extent as may be provided in the Company’s leave of absence policy,
in the written terms of any leave of absence agreement or policy applicable to
the Participant, or as otherwise required by law.
(n)
“Corporate
Transaction”
means the occurrence, in a single transaction or in a series
of related transactions, of any one or more of the following
events:
(i)
the
consummation of a sale
or other disposition of
all or substantially all, as determined by the Board in its sole discretion, of
the consolidated assets of the Company and its Subsidiaries;
(ii)
the
consummation of a sale or other disposition of at least ninety percent (90%) of
the outstanding securities of the Company;
(iii)
the
consummation of a merger, consolidation or similar transaction following which
the Company is not the surviving corporation; or
(iv)
the
consummation of a merger, consolidation or similar transaction following which
the Company is the surviving corporation but the shares of Common Stock
outstanding immediately preceding the merger, consolidation or similar
transaction are converted or exchanged by virtue of the merger, consolidation or
similar transaction into other property, whether in the form of securities, cash
or otherwise.
(o)
“Covered
Employee”
shall have the meaning provided in Section 162(m)(3) of the
Code.
(p)
“Director”
means a member of the Board.
(q)
“Disability”
means,
with respect to a Participant, the inability of such Participant to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than twelve (12) months, as provided in Sections 22(e)(3) and
409A(a)(2)(c)(i) of the Code, and shall be determined by the Board on the basis
of such medical evidence as the Board deems warranted under the
circumstances.
(r)
“
Effective
Date
” means the effective date of this Plan document, which is the date
of the annual meeting of stockholders of the Company held in 2009 provided this
Plan is approved by the Company’s stockholders at such meeting.
(s)
“Employee”
means any person employed by the Company or an Affiliate. However, service
solely as a Director, or payment of a fee for such services, shall not cause a
Director to be considered an “Employee” for purposes of the Plan.
(t)
“Entity”
means a corporation, partnership, limited liability company or other
entity.
(u)
“Exchange
Act”
means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.
(v)
“Exchange Act
Person”
means any natural person, Entity or “group” (within the
meaning of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange
Act Person” shall not include (i) the Company or any Subsidiary of the Company,
(ii) any employee benefit plan of the Company or any Subsidiary of the Company
or any trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any Subsidiary of the Company, (iii) an underwriter
temporarily holding securities pursuant to a registered public offering of such
securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of
the Company in substantially the same proportions as their Ownership of stock of
the Company; or (v) any natural person, Entity or “group” (within the meaning of
Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is
the Owner, directly or indirectly, of securities of the Company representing
more than fifty percent (50%) of the combined voting power of the Company’s then
outstanding securities.
(w)
“Fair Market
Value”
means, as of any date, the value of the Common Stock determined as
follows:
(i)
If the
Common Stock is listed on any established stock exchange or traded on the NASDAQ
National Market or the NASDAQ SmallCap Market, the Fair Market Value of a share
of Common Stock, unless otherwise determined by the Board, shall be the closing
sales price for such stock 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 a source
the Board deems reliable.
(ii)
Unless
otherwise provided by the Board, if there is no closing sales price for the
Common Stock on the date of determination, then the Fair Market Value shall be
the closing selling price on the last preceding date for which such quotation
exists.
(iii)
In the
absence of such markets for the Common Stock, the Fair Market Value shall be
determined by the Board in good faith and in a manner that complies with Section
409A and 422 of the Code.
(x)
“Incentive Stock
Option”
means an Option intended to qualify as an “incentive stock
option” within the meaning of Section 422 of the Code and the regulations
promulgated thereunder.
(y)
“Non-Employee
Director”
means a Director
who either (i) is not a current employee or officer of the Company or an
Affiliate, does not receive compensation, either directly or indirectly, from
the Company or an Affiliate for services rendered as a consultant or in any
capacity other than as a Director (except for an amount as to which disclosure
would not be required under Item 404(a) of Regulation S-K promulgated pursuant
to the Securities Act (“
Regulation
S-K
”)), does not possess an interest in any other transaction for which
disclosure would be required under Item 404(a) of Regulation S-K, and is not
engaged in a business relationship for which disclosure would be required
pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered
a “non-employee director” for purposes of Rule 16b-3.
(z)
“Nonstatutory
Stock Option”
means any option granted pursuant to Section 5 of the
Plan that does not qualify as an Incentive Stock Option.
(aa)
“Officer”
means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act.
(bb)
“Option”
means an Incentive Stock Option or a Nonstatutory Stock Option to purchase
shares of Common Stock granted pursuant to the Plan.
(cc)
“Option
Agreement”
means a written agreement between the Company and an
Optionholder evidencing the terms and conditions of an Option grant. Each Option
Agreement shall be subject to the terms and conditions of the Plan.
(dd)
“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.
(ee)
“Other Stock
Award”
means an award based in whole or in part by reference to the
Common Stock that is granted pursuant to the terms and conditions of Section
6(f).
(ff)
“Other Stock
Award Agreement”
means a written agreement between the Company and a
holder of an Other Stock Award evidencing the terms and conditions of an Other
Stock Award grant. Each Other Stock Award Agreement shall be subject to the
terms and conditions of the Plan.
(gg)
“Outside
Director”
means a Director who either (i) is not a current employee
of the Company or an “affiliated corporation” (within the meaning of Treasury
Regulations promulgated under Section 162(m) of the Code), is not a former
employee of the Company or an “affiliated corporation” who receives compensation
for prior services (other than benefits under a tax-qualified retirement plan)
during the taxable year, has not been an officer of the Company or an
“affiliated corporation,” and does not receive remuneration from the Company or
an “affiliated corporation,” either directly or indirectly, in any capacity
other than as a Director, or (ii) is otherwise considered an “outside director”
for purposes of Section 162(m) of the Code.
(hh)
“Own,” “Owned,”
“Owner,” “Ownership”
A person or Entity shall
be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired
“Ownership” of securities if such person or Entity, directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise, has
or shares voting power, which includes the power to vote or to direct the
voting, with respect to such securities.
(ii)
“Participant”
means a person to whom an Award is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Stock Award.
(jj)
“Performance Cash
Award”
means an award of cash granted pursuant to the terms and
conditions of Section 6(d)(ii).
(kk)
“Performance
Criteria”
means the one or more criteria that the Board shall select
for purposes of establishing the Performance Goals for a Performance
Period. The Performance Criteria that shall be used to establish such
Performance Goals may be based on any one of, or combination of, the following
as determined by the Board: (i) earnings (including earnings per share and net
earnings); (ii) earnings before interest, taxes and depreciation; (iii) earnings
before interest, taxes, depreciation and amortization; (iv) total stockholder
return; (v) return on equity or average stockholder’s equity; (vi) return on
assets, investment, or capital employed; (vii) stock price; (viii) margin
(including gross margin); (ix) income (before or after taxes); (x) operating
income; (xi) operating income after taxes; (xii) pre-tax profit; (xiii)
operating cash flow; (xiv) sales or revenue targets; (xv) increases in revenue
or product revenue; (xvi) expenses and cost reduction goals; (xvii) improvement
in or attainment of working capital levels; (xiii) economic value added (or an
equivalent metric); (xix) market share; (xx) cash flow; (xxi) cash flow per
share; (xxii) share price performance; (xxiii) debt reduction; (xxiv)
implementation or completion of projects or processes; (xxv) customer
satisfaction; (xxvi) stockholders’ equity; (xxvii) capital expenditures; (xxiii)
debt levels; (xxix) operating profit or net operating profit; (xxx) workforce
diversity; (xxxi) growth of net income or operating income; (xxxii) billings;
and (xxxiii) to the extent that an Award is not intended to comply with Section
162(m) of the Code, other measures of performance selected by the
Board.
(ll)
“Performance
Goals”
means, for a Performance Period, the one or more goals
established by the Board for the Performance Period based upon the Performance
Criteria. Performance Goals may be based on a Company-wide basis,
with respect to one or more business units, divisions, Affiliates, or business
segments, and in either absolute terms or relative to the performance of one or
more comparable companies or the performance of one or more relevant
indices. At the time of the grant of any Award, the Board is
authorized to determine whether, when calculating the attainment of Performance
Goals for a Performance Period: (i) to exclude restructuring and/or other
nonrecurring charges; (ii) to exclude exchange rate effects, as applicable, for
non-U.S. dollar denominated Performance Goals; (iii) to exclude the effects of
changes to generally accepted accounting principles; (iv) to exclude the effects
of any statutory adjustments to corporate tax rates; and (v) to exclude the
effects of any “extraordinary items” as determined under generally accepted
accounting principles. In addition, the Board retains the discretion
to reduce or eliminate the compensation or economic benefit due upon attainment
of Performance Goals and to define the manner of calculating the Performance
Criteria it selects to use for such Performance Period. Partial achievement of
the specified criteria may result in the payment or vesting corresponding to the
degree of achievement as specified in the Stock Award Agreement or the written
terms of a Performance Cash Award.
(mm)
“Performance
Period”
means the period of time selected by the Board over which the
attainment of one or more Performance Goals will be measured for the purpose of
determining a Participant’s right to and the payment of a Stock Award or a
Performance Cash Award. Performance Periods may be of varying and overlapping
duration, at the sole discretion of the Board.
(nn)
“Performance
Stock Award”
means a Stock Award granted under the terms and conditions
of Section 6(d)(i).
(oo)
“Plan”
means this BroadVision, Inc. Amended and Restated 2006 Equity Incentive
Plan.
(pp)
“Restricted Stock
Award”
means an award of shares of Common Stock that is granted pursuant
to the terms and conditions of Section 6(a).
(qq)
“Restricted Stock
Award Agreement”
means a written agreement between the Company and a
holder of a Restricted Stock Award evidencing the terms and conditions of a
Restricted Stock Award grant. Each Restricted Stock Award Agreement shall be
subject to the terms and conditions of the Plan.
(rr)
“Restricted Stock
Unit Award”
means a right to receive shares of Common Stock that is
granted pursuant to the terms and conditions of Section 6(b).
(ss)
“Restricted Stock
Unit Award Agreement”
means a written agreement between the Company and a
holder of a Restricted Stock Unit Award evidencing the terms and conditions of a
Restricted Stock Unit Award grant. Each Restricted Stock Unit Award Agreement
shall be subject to the terms and conditions of the Plan.
(tt)
“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.
(uu)
“Securities
Act”
means the Securities Act of 1933, as amended.
(vv)
“Stock
Appreciation Right”
or
"SAR"
means a right to receive the appreciation on Common Stock that is granted
pursuant to the terms and conditions of Section 5.
(ww)
“Stock
Appreciation Right Agreement”
means a written agreement between the
Company and a holder of a Stock Appreciation Right evidencing the terms and
conditions of a Stock Appreciation Right grant. Each Stock Appreciation Right
Agreement shall be subject to the terms and conditions of the Plan.
(xx)
“Stock
Award”
means any right to receive Common Stock granted under the Plan,
including an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted
Stock Award, a Restricted Stock Unit Award, a Stock Appreciation Right, a
Performance Stock Award or any Other Stock Award.
(yy)
“Stock Award
Agreement”
means a written agreement between the Company and a
Participant evidencing the terms and conditions of a Stock Award grant. Each
Stock Award Agreement shall be subject to the terms and conditions of the
Plan.
(zz)
“Subsidiary”
means, with respect to the Company, (i) any corporation of which more than fifty
percent (50%) of the outstanding capital stock having ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether, at the time, stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, Owned by the Company, and
(ii) any partnership, limited liability company or other entity in which the
Company has a direct or indirect interest (whether in the form of voting or
participation in profits or capital contribution) of more than fifty percent
(50%).
(aaa)
“Ten Percent
Stockholder”
means a person who Owns (or is deemed to Own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or any
Affiliate.