EXHIBIT
99.1
RITA
MEDICAL SYSTEMS, INC.
2005
STOCK AND INCENTIVE PLAN
Adopted
June 8, 2005
1.
Purposes
of the Plan
.
The
purposes of this 2005 Stock and Incentive Plan are to attract and retain the
best available personnel for positions of substantial responsibility, to provide
additional incentive to Employees and Consultants of the Company and its
Subsidiaries and to promote the success of the Company’s business. Options
granted under the Plan may be Incentive Stock Options (as defined under Section
422 of the Code) or Nonstatutory Stock Options, as determined by the
Administrator at the time of grant of an Option and subject to the applicable
provisions of Section 422 of the Code and the regulations promulgated
thereunder. Stock Awards (including Stock Grants, Stock Units, Stock
Appreciation Rights and Stock Purchase Rights) and Cash Awards may also be
granted under the Plan.
2.
Definitions
.
As used
herein, the following definitions shall apply:
(a)
“
Administrator
”
means
the Board or any of its Committees appointed pursuant to Section 4 of
the
Plan.
(b)
“
Applicable
Laws
”
means
the legal requirements relating to the administration of stock option and
restricted stock plans under applicable U.S. state corporate laws, U.S. federal
and applicable state securities laws, the Code, any Nasdaq National Market
or
stock exchange rules or regulations and the applicable laws of any other country
or jurisdiction where Options or Stock Awards are granted under the Plan, as
such laws, rules, regulations and requirements shall be in place from time
to
time.
(c)
“
Award
”
means
a
Stock Award, a Cash Award or an Option granted in accordance with the terms
of
the Plan.
(d)
“
Award
Agreement
”
means a
Stock Award Agreement, Cash Award Agreement and/or Option Agreement, which
may
be in written or electronic format, in such form and with such terms and
conditions as may be specified by the Administrator, evidencing the terms and
conditions of an individual Award. Each Award Agreement is subject to the terms
and conditions of the Plan.
(e)
“
Board
”
means
the Board of Directors of the Company.
(f)
“
Cash
Award
”
means a
bonus opportunity awarded under Section 14 pursuant to which a Participant
may
become entitled to receive an amount based on the satisfaction of such
performance criteria as are specified in the agreement or other documents
evidencing the Award (the “
Cash
Award Agreement
”).
(g)
“
Change
in Control
”
means
any of the following, unless the Administrator provides otherwise:
(i)
any
merger or consolidation in which the Company shall not be the surviving entity
(or survives only as a subsidiary of another entity whose stockholders did
not
own all or substantially all of the Common Stock in substantially the same
proportions as immediately prior to such transaction),
(ii)
the
sale of
all or substantially all of the Company’s assets to any other person or entity
(other than a wholly-owned subsidiary),
(iii)
the
acquisition of beneficial ownership of a controlling interest (including,
without limitation, power to vote) the outstanding shares of Common Stock by
any
person or entity (including a “group” as defined by or under
Section 13(d)(3) of the Exchange Act),
(iv)
a
contested election of Directors, as a result of which or in connection with
which the persons who were Directors before such election or their nominees
(the
“
Incumbent
Directors
”)
cease
to constitute a majority of the Board; provided however that if the election,
or
nomination for election by the Company’s stockholders, of any new director was
approved by a vote of at least fifty percent (50%) of the Incumbent Directors,
such new Director shall be considered as an Incumbent Director, or
(v)
any
other
event specified by the Board or a Committee, regardless of whether at the time
an Award is granted or thereafter.
(h)
“
Code
”
means
the Internal Revenue Code of 1986, as amended.
(i)
“
Committee
”
means
one or more committees or subcommittees appointed by the Board of Directors
to
administer the Plan in accordance with Section 4 below.
(j)
“
Common
Stock
”
means
the Common Stock of the Company.
(k)
“
Company
”
means
RITA Medical Systems, Inc., a Delaware corporation.
(l)
“
Consultant
”
means
any person, including an advisor, who is engaged by the Company or any Parent
or
Subsidiary to render services and is compensated for such services, and any
Director of the Company whether compensated for such services or
not.
(m)
“
Continuous
Service Status
”
means
the absence of any interruption or termination of service as an Employee or
Consultant. Continuous Service Status shall not be considered interrupted in
the
case of: (i) sick leave; (ii) military leave; (iii) any
other
leave of absence approved by the Administrator, provided that such leave is
for
a period of not more than 90 days, unless reemployment upon the expiration
of
such leave is guaranteed by contract or statute, or unless provided otherwise
pursuant to Company policy adopted from time to time; or (iv) in the
case
of transfers between locations of the Company or between the Company, its
Subsidiaries or their respective successors. For purposes of this Plan, a change
in status from an Employee to a Consultant or from a Consultant to an Employee
will not constitute an interruption of Continuous Service Status.
(n)
“
Director
”
means a
member of the Board of Directors of the Company.
(o)
“
Employee
”
means
any person employed by the Company or any Parent or Subsidiary of the Company,
with the status of employment determined based upon such minimum number of
hours
or periods worked as shall be determined by the Administrator in its discretion,
subject to any requirements of the Code or the Applicable Laws. The payment
by
the Company of a director’s fee to a Director shall not be sufficient to
constitute “employment” of such Director by the Company.
(p)
“
Exchange
Act
”
means
the Securities Exchange Act of 1934, as amended.
(q)
“
Fair
Market Value
”
means,
as of any date, the Fair Market Value of the Common Stock as determined by
the
Administrator in good faith on such basis as it deems appropriate and applied
consistently with respect to Participants. Whenever possible, the determination
of Fair Market Value shall be based upon the closing price for the Shares as
reported in the
Wall
Street Journal
for the
applicable date.
(r)
“
Incentive
Stock Option
”
means an
Option intended to qualify as an incentive stock option within the meaning
of
Section 422 of the Code, as designated in the applicable written Option
Agreement.
(s)
“
Named
Executive
”
means
any
individual who, on the last day of the Company’s fiscal year, is the chief
executive officer of the Company (or is acting in such capacity) or among the
four most highly compensated officers of the Company (other than the chief
executive officer).
Such
officer status shall be determined pursuant to the executive compensation
disclosure rules under the Exchange Act.
(t)
“
Nonstatutory
Stock Option
”
means an
Option not intended to qualify as an Incentive Stock Option, as designated
in
the applicable written Option Agreement.
(u)
“
Officer
”
means a
person who is an officer of the Company within the meaning of Section 16(a)
of the Exchange Act and the rules and regulations promulgated
thereunder.
(v)
“
Option
”
means a
stock option granted pursuant to the Plan.
(w)
“
Option
Agreement
”
means a
written agreement between an Optionee and the Company reflecting the terms
of an
Option granted under the Plan and includes any documents attached to such Option
Agreement, including, but not limited to, a notice of stock option grant and
a
form of exercise notice.
(x)
“
Optioned
Stock
”
means
the Common Stock subject to an Option.
(y)
“
Optionee
”
means an
Employee or Consultant who receives an Option.
(z)
“
Parent
”
means a
“parent corporation,” whether now or hereafter existing, as defined in
Section 424(e) of the Code, or any successor provision.
(aa)
“
Participant
”
means
any
holder of one or more Options or Stock Awards, or the Shares issuable or issued
upon exercise of such Awards, under the Plan.
(bb)
“
Plan
”
means
this 2005 Stock and Incentive Plan.
(cc)
“
Qualifying
Performance Criteria
”
means
any one or more of the following performance criteria, either individually,
alternatively or in any combination, applied to either the Company as a whole
or
to a business unit, Parent, Subsidiary or business segment, either individually,
alternatively or in any combination, and measured either annually or
cumulatively over a period of years, on an absolute basis or relative to a
pre-established target, to previous years' results or to a designated comparison
group, in each case as specified by the Committee in the Award: (i) cash
flow; (ii) earnings (including gross margin, earnings before interest
and
taxes, earnings before taxes, and net earnings); (iii) earnings per
share;
(iv) growth in earnings or earnings per share; (v) stock price;
(vi) return on equity or average stockholders' equity; (vii) total
stockholder return; (viii) return on capital; (ix) return on
assets or
net assets; (x) return on investment; (xi) revenue; (xii) income
or net income; (xiii) operating income or net operating income;
(xiv) operating profit or net operating profit; (xv) operating
margin;
(xvi) return on operating revenue; (xvii) market share;
(xviii) contract awards or backlog; (xix) overhead or other expense
reduction; (xx) growth in stockholder value relative to the moving average
of the S&P 500 Index or a peer group index; (xxi) credit rating;
(xxii) strategic plan development and implementation (including individual
performance objectives that relate to achievement of the Company’s or any
business unit’s strategic plan); (xxiii) improvement in workforce
diversity, and (xxiv) any other similar criteria as may be determined
by
the Administrator. The Committee may appropriately adjust any evaluation of
performance under a Qualifying Performance Criteria to exclude any of the
following events that occurs during a performance period: (A) asset
write-downs; (B) litigation or claim judgments or settlements; (C) the
effect of changes in tax law, accounting principles or other such laws or
provisions affecting reported results; (D) accruals for reorganization
and
restructuring programs; and (E) any gains or losses classified as
extraordinary or as discontinued operations in the Company’s financial
statements.
(dd)
“
Reporting
Person
”
means an
Officer, Director, or greater than 10% stockholder of the Company within the
meaning of Rule 16a-2 under the Exchange Act, who is required to file reports
pursuant to Rule 16a-3 under the Exchange Act.
(ee)
“
Restricted
Stock
”
means
shares of Common Stock acquired pursuant to a grant of a Stock Award under
Sections 11, 12 or 13 below.
(ff)
“
Rule
16b-3
”
means
Rule 16b-3 promulgated under the Exchange Act, as the same may be amended from
time to time, or any successor provision.
(gg)
“
Share
”
means a
share of the Common Stock, as adjusted in accordance with Section 17
of the
Plan.
(hh)
“
Stock
Appreciation Right
”
means a
right to receive cash and/or shares of Common Stock based on a change in the
Fair Market Value of a specific number of shares of Common Stock granted under
Section 13.
(ii)
“
Stock
Award
”
means a
Stock Grant, a Stock Unit, a Stock Appreciation Right or a Stock Purchase Right
granted under Sections 11, 12 or 13 below or other similar awards granted under
the Plan (including phantom stock rights).
(jj)
“
Stock
Award Agreement
”
means a
written agreement, the form(s) of which shall be approved from time to time
by
the Administrator, between the Company and a holder of a Stock Award evidencing
the terms and conditions of an individual Stock Award grant. Each Stock Award
Agreement shall be subject to the terms and conditions of the Plan.
(kk)
“
Stock
Exchange
”
means
any stock exchange or consolidated stock price reporting system on which prices
for the Common Stock are quoted at any given time.
(ll)
“
Stock
Grant
”
means
the award of a certain number of shares of Common Stock granted under Section
11
below.
(mm)
“
Stock
Purchase Right
”
means
the right to purchase Common Stock pursuant to Section 12
below.
(nn)
“
Stock
Unit
”
means a
bookkeeping entry representing an amount equivalent to the Fair Market Value
of
one Share, payable in cash, property or Shares. Stock Units represent an
unfunded and unsecured obligation of the Company, except as otherwise provided
for by the Administrator.
(oo)
“
Subsidiary
”
means a
“subsidiary corporation,” whether now or hereafter existing, as defined in
Section 424(f) of the Code, or any successor provision.
(pp)
“
Ten
Percent Holder
”
means a
person who owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or
Subsidiary.
(qq)
“
2000
Stock Plan
”
means
the 2000 Stock Plan, as amended, of the Company.
3.
Stock
Subject to the Plan
.
(a)
Subject
to the provisions of Section 17 of the Plan, the maximum aggregate number
of Shares that may be sold or issued under the Plan is 5,591,390 shares of
Common Stock. This maximum number of shares Stock Plan includes:
(i)
400,000
Shares being reserved in connection with adoption of the Stock Plan; and
(ii)
up
to
5,191,390 Shares reserved for issuance under the 2000 Stock Plan that as of
April 25, 2005 are either (i) available for grant pursuant to awards that may
be
made under the 2000 Stock Plan or (ii) are subject to outstanding options
granted under the 2000 Stock Plan which Shares might be returned to the 2000
Stock Plan if and to the extent the options to which they are subject terminate
or expire or become unexercisable for any reason without having been exercised
in full.
(b)
If
an
Award should expire or become unexercisable for any reason without having been
exercised in full or without the Shares subject thereto having been issued
in
full, the unpurchased or unissued Shares that were subject thereto shall, unless
the Plan shall have been terminated, become available for future grant under
the
Plan. Any Shares of Common Stock which are retained by the Company upon exercise
of an Award whether issued under the Plan or the 2000 Stock Plan in order to
satisfy the exercise or purchase price for such Award or any withholding taxes
due with respect to such exercise, purchase or issuance shall not continue
to be
available under the Plan. Shares issued under the Plan and later repurchased
by
the Company pursuant to any repurchase right which the Company may have shall
not be available for future grant under the Plan.
(c)
Notwithstanding
anything to the contrary in the Plan and subject to the provisions of Section
17
of the Plan, the maximum aggregate number of Shares that may be granted under
the Plan subject to Stock Grants, Stock Purchase Rights and Stock Units (or
any
other similar Award having an exercise or purchase price that is less than
the
Fair Market Value of the Common Stock measured as of the date of grant of the
Award, such as phantom stock rights) is 400,000 Shares. Stock-settled Stock
Appreciation Rights shall not be counted against this limit; provided however
that the total number of Shares to which a Stock Appreciation Right applies
(rather than the net number issued upon settlement) shall be deducted against
the number of Shares set forth in Section 3(a) above upon settlement of such
Award.
4.
Administration
of the Plan
.
(a)
General
.
The Plan
shall be administered by the Board or a Committee, or a combination thereof,
as
determined by the Board. The Plan may be administered by different
administrative bodies with respect to different classes of Participants and,
if
permitted by the Applicable Laws, the Board may authorize one or more officers
to grant Options, Stock Awards and Cash Awards under the Plan.
(b)
Administration
With Respect to Reporting Persons
.
With
respect to Options, Stock Awards and Cash Awards granted to Reporting Persons
and Named Executives, the Plan may (but need not) be administered so as to
permit such Options, Stock Awards and Cash Awards to qualify for the exemption
set forth in Rule 16b-3 and to qualify as performance-based compensation under
Section 162(m) of the Code.
(c)
Committee
Composition
.
If a
Committee has been appointed pursuant to this Section 4, such Committee shall
continue to serve in its designated capacity until otherwise directed by the
Board. From time to time the Board may increase the size of any Committee and
appoint additional members thereof, remove members (with or without cause)
and
appoint new members in substitution therefor, fill vacancies (however caused)
and remove all members of a Committee and thereafter directly administer the
Plan, all to the extent permitted by the Applicable Laws and, in the case of
a
Committee administering the Plan pursuant to Section 4(c) above, to the extent
permitted or required by Rule 16b-3 and Section 162(m) of the Code.
(d)
Powers
of the Administrator
.
Subject
to the provisions of the Plan and in the case of a Committee, the specific
duties delegated by the Board to such Committee, the Administrator shall have
the authority, in its discretion:
(i)
to
determine the Fair Market Value of the Common Stock, in accordance with
Section 2(q) of the Plan;
(ii)
to
select
the Consultants and Employees to whom Options, Stock Awards and Cash Awards
or
any combination thereof may from time to time be granted hereunder;
(iii)
to
determine whether and to what extent Options, Stock Awards and Cash Awards
or
any combination thereof are granted hereunder;
(iv)
to
determine the number of shares of Common Stock or amount of cash to be covered
by each Award granted hereunder;
(v)
to
approve forms of agreement for use under the Plan;
(vi)
to
determine the terms and conditions, not inconsistent with the terms of the
Plan,
of any Award granted hereunder. Such terms and conditions include, but are
not
limited to, the exercise and/or purchase price (if applicable), the time or
times when an Award may be exercised (which may or may not be based on
performance criteria), the vesting schedule, any vesting and/or exercisability
acceleration or waiver of forfeiture restrictions, the acceptable forms of
consideration, the term, and any restriction or limitation regarding any Award
or the Shares relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine and may be established
at
the time an Award is granted or thereafter;
(vii)
to
determine the terms and restrictions applicable to Stock Awards and the
Restricted Stock purchased or issued on exercise or settlement of such Stock
Awards;
(viii)
to
construe and interpret the terms of the Plan and Awards granted pursuant to
the
Plan;
(ix)
in
order
to fulfill the purposes of the Plan and without amending the Plan, to modify
grants of Options, Stock Awards or Cash Awards to Participants who are foreign
nationals or employed outside of the United States in order to recognize
differences in local law, tax policies or customs;
(x)
to
allow
Participants to satisfy withholding tax amounts by electing to have the Company
withhold from the Shares to be issued upon exercise of a Nonstatutory Stock
Option or vesting of a Stock Award that number of Shares having a Fair Market
Value equal to the amount required to be withheld. The Fair Market Value of
the
Shares to be withheld shall be determined in such manner and on such date that
the Administrator shall determine or, in the absence of provision otherwise,
on
the date that the amount of tax to be withheld is to be determined. All
elections by a Participant to have Shares withheld for this purpose shall be
made in such form and under such conditions as the Administrator may
provide;
(xi)
to
correct administrative errors;
(xii)
to
modify
or amend each Award, including, but not limited to, the acceleration of vesting
and/or exercisability, provided, however, that any such amendment is subject
to
Section 20 of the Plan and except as set forth in that Section, may
not
impair any outstanding Award unless agreed to in writing by the
Participant;
(xiii)
to
authorize conversion or substitution under the Plan of any or all options,
stock
appreciation rights or stock awards held by service providers of an entity
acquired by the Company (the “
Conversion
Awards
”).
Any
conversion or substitution shall be effective as of the close of the merger,
acquisition or other transaction. The Conversion Awards may be Nonstatutory
Stock Options or Incentive Stock Options, as determined by the Administrator,
with respect to options granted by the acquired entity; provided, however,
that
with respect to the conversion of stock appreciation rights in the acquired
entity, the Conversion Awards shall be Nonstatutory Stock Options. Unless
otherwise determined by the Administrator at the time of conversion or
substitution, all Conversion Awards shall have the same terms and conditions
as
Awards generally granted by the Company under the Plan;
(xiv)
to
authorize any person to execute on behalf of the Company any instrument required
to effect the grant of an Award previously granted by the
Administrator;
(xv)
to
impose
such restrictions, conditions or limitations as it determines appropriate as
to
the timing and manner of any resales by a Participant or other subsequent
transfers by the Participant of any Shares issued as a result of or under an
Award, including without limitation, (A) restrictions under an insider
trading policy and (B) restrictions as to the use of a specified brokerage
firm for such resales or other transfers;
(xvi)
to
provide, either at the time an Award is granted or by subsequent action, that
an
Award shall contain as a term thereof, a right, either in tandem with the other
rights under the Award or as an alternative thereto, of the Participant to
receive, without payment to the Company, a number of Shares, cash or a
combination thereof, the amount of which is determined by reference to the
value
of the Award; and
(xvii)
to
make
all other determinations deemed necessary or advisable for administering the
Plan and any Award granted hereunder.
(e)
Effect
of Administrator’s Decision
.
All
decisions, determinations and interpretations of the Administrator shall be
final and binding on all holders of Options, Stock Awards or Cash
Awards.
5.
Eligibility
.
(a)
Recipients
of Grants
.
Nonstatutory Stock Options and Stock Awards may be granted to Employees and
Consultants. Incentive Stock Options and Cash Awards may be granted only to
Employees. An Employee or Consultant who has been granted an Option, Stock
Award
or Cash Award may, if he or she is otherwise eligible, be granted additional
Options, Stock Awards or Cash Awards.
(b)
Type
of Option
.
Each
Option shall be designated in the Option Agreement as either an Incentive Stock
Option or a Nonstatutory Stock Option.
(c)
$100,000
Limitation
.
Notwithstanding any designation under Section 5(b), to the extent that the
aggregate Fair Market Value of Shares with respect to which Options designated
as Incentive Stock Options are exercisable for the first time by any Optionee
during any calendar year (under all plans of the Company or any Parent or
Subsidiary) exceeds $100,000, such excess Options shall be treated as
Nonstatutory Stock Options. For purposes of this Section 5(c), Incentive
Stock Options shall be taken into account in the order in which they were
granted, and the Fair Market Value of the Shares subject to an Incentive Stock
Option shall be determined as of the date of the grant of such
Option.
(d)
Employment
Relationship
.
The Plan
shall not confer upon the holder of any Award any right with respect to
continuation of an employment or consulting relationship with the Company,
nor
shall it interfere in any way with such holder’s right or the Company’s right to
terminate his or her employment or consulting relationship at any time, with
or
without cause.
6.
Term
of Plan
.
The Plan
shall become effective upon its approval by the stockholders of the Company
as
described in Section 24 of the Plan. It shall continue in effect for
a term
of ten (10) years from the date the Plan is approved by the stockholders of
the
Company unless sooner terminated under Section 20 of the Plan.
7.
Term
of Option
.
The term
of each Option shall be the term stated in the Option Agreement; provided,
however, that the term shall be no more than ten years from the date
of
grant thereof or such shorter term as may be provided in the Option Agreement
and provided further that, in the case of an Incentive Stock Option granted
to
an Optionee who, at the time the Option is granted, is a Ten Percent Holder,
the
term of the Option shall be five years from the date of grant thereof or such
shorter term as may be provided in the Option Agreement.
8.
Limitation
on Grants to Employees
.
Subject
to adjustment as provided in Section 17 below, the maximum number of
Shares
which may be subject to Options and Stock Awards granted to any one Employee
under this Plan for any fiscal year of the Company shall be 1,000,000
Shares.
9.
Option
Exercise Price and Consideration
.
(a)
Exercise
Price
.
The
per
Share exercise price for the Shares to be issued pursuant to exercise of an
Option shall be such price as is determined by the Board and set forth in the
Option Agreement, but shall be subject to the following:
(i)
In
the
case of an Incentive Stock Option that is:
(A)
granted
to an Employee who, at the time of the grant of such Incentive Stock Option,
is
a Ten Percent Holder, the per Share exercise price shall be no less than 110%
of
the Fair Market Value per Share on the date of grant; or
(B)
granted
to any other Employee, the per Share exercise price shall be no less than 100%
of the Fair Market Value per Share on the date of grant.
(ii)
In
the
case of a Nonstatutory Stock Option the per Share exercise price shall be no
less than 100% of the Fair Market Value per Share on the date of
grant.
(iii)
Notwithstanding
the foregoing, Options may be granted with a per Share exercise price other
than
as required above pursuant to a merger or other corporate
transaction.
(b)
No
Option Repricings
.
Other
than in connection with a change in the Company’s capitalization (as described
in Section 17(a) of the Plan), the exercise price of an Option may not be
reduced without stockholder approval.
(c)
Permissible
Consideration.
The
consideration to be paid for the Shares to be issued upon exercise of an Option,
including the method of payment, shall be determined by the Administrator (and,
in the case of an Incentive Stock Option, shall be determined at the time of
grant) and may consist entirely of (1) cash, (2) check,
(3) promissory note (subject to the provisions of Section 153
of the
Delaware General Corporation Law), (4) cancellation of indebtedness,
(5)
other Shares that (x) in the case of Shares acquired upon exercise of
an
Option, have been owned by the Optionee for more than six months on the date
of
surrender or such other period as may be required to avoid a charge to the
Company’s earnings, and (y) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which such
Option shall be exercised, (6) if as of the date of exercise of an Option the
Company then is permitting optionees to engage in a “same-day sale”
cashless-brokered exercise program involving one or more brokers, through such
a
program that complies with the Applicable Laws (including without limitation
the
requirements of Regulation T and other applicable regulations promulgated by
the
Federal Reserve Board) and that ensures prompt delivery to the Company of the
amount required to pay the exercise price and any applicable withholding taxes,
(7) provided that the Company’s allowing the optionee to do so does not result
in adverse accounting treatment to the Company relative to the treatment the
Option would have if it did not include such provision either at the time of
grant or while the Option remains outstanding, by the Company’s withholding from
the Shares subject to the Option that number of Shares having as of the date
of
exercise an aggregate fair market value equal to the aggregate exercise price
for the Shares being exercised, (8) any combination of the foregoing
methods of payment, or (9) such other consideration and method of payment
for the issuance of Shares to the extent permitted under the Applicable Laws.
In
making its determination as to the type of consideration to accept, the
Administrator shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company and the Administrator may, in its
sole discretion, refuse to accept a particular form of consideration at the
time
of any Option exercise.
10.
Exercise
of Option
.
(a)
Procedure
for Exercise; Rights as a Stockholder
.
Any
Option granted hereunder shall be exercisable at such times and under such
conditions as determined by the Administrator, including performance criteria
with respect to the Company and/or the Optionee, and as shall be permissible
under the terms of the Plan. The Administrator shall have the discretion to
determine whether and to what extent the vesting of Options shall be tolled
during any unpaid leave of absence; provided, however, that in the absence
of
such determination, vesting of Options shall be tolled during any leave that
is
not a leave required to be provided to the Participant under Applicable Law.
In
the event of military leave, vesting shall toll during any unpaid portion of
such leave, provided that, upon a Participant’s returning from military leave
(under conditions that would entitle him or her to protection upon such return
under the Uniform Services Employment and Reemployment Rights Act), he or she
shall be given vesting credit with respect to Options to the same extent as
would have applied had the Participant continued to provide services to the
Company throughout the leave on the same terms as he or she was providing
services immediately prior to such leave.
An
Option
may not be exercised for a fraction of a Share.
An
Option
shall be deemed to be exercised when written (including electronic) notice
of
such exercise has been given to the Company in accordance with the terms of
the
Option by the person entitled to exercise the Option and the Company has
received full payment for the Shares with respect to which the Option is
exercised. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 9(c) of
the
Plan. Until the issuance (as evidenced by the appropriate entry on the books
of
the Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or
any
other rights as a stockholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause
to
be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record
date
is prior to the date the stock certificate is issued, except as provided in
Section 17 of the Plan.
Exercise
of an Option in any manner shall result in a decrease in the number of Shares
that thereafter may be available, both for purposes of the Plan and for sale
under the Option, by the number of Shares as to which the Option is
exercised.
(b)
Termination
of Employment or Consulting Relationship
.
Subject
to Section 10(c) below, in the event of termination of an Optionee’s
Continuous Service Status, such Optionee may, but only within three months
(or
such other period of time as is determined by the Administrator) after the
date
of such termination (but in no event later than the expiration date of the
term
of such Option as set forth in the Option Agreement), exercise his or her Option
to the extent that the Optionee is vested in the Optioned Stock at the date
of
such termination. To the extent that the Optioned Stock is not vested at the
date of such termination, or if the Optionee does not exercise such Option
to
the extent the Optioned Stock is vested within the time specified herein, the
Option shall terminate. No termination shall be deemed to occur and this Section
10(b) shall not apply if (i) the Optionee is a Consultant who becomes
an
Employee, or (ii) the Optionee is an Employee who becomes a
Consultant.
(c)
Disability
of Optionee
.
(i)
Notwithstanding
Section 10(b) above, in the event of termination of an Optionee’s Continuous
Service Status as a result of his or her total and permanent disability (within
the meaning of Section 22(e)(3) of the Code), such Optionee may, but only within
six months from the date of such termination (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise the Option to the extent the Optioned Stock is vested
at
the date of such termination. To the extent that the Optioned Stock is not
vested at the date of termination, or if the Optionee does not exercise such
Option to the extent the Optioned Stock is vested within the time specified
herein, the Option shall terminate.
(ii)
In
the
event of termination of an Optionee’s Continuous Service Status as a result of a
disability which does not fall within the meaning of total and permanent
disability (as set forth in Section 22(e)(3) of the Code), such Optionee may,
but only within six months from the date of such termination (but in no event
later than the expiration date of the term of such Option as set forth in the
Option Agreement), exercise the Option to the extent the Optioned Stock is
vested at the date of such termination. However, to the extent that such
Optionee fails to exercise an Option which is an Incentive Stock Option
(“
ISO
”)
(within the meaning of Section 422 of the Code) within three months
of the
date of such termination, the Option will not qualify for ISO treatment under
the Code. To the extent that the Optioned Stock is not vested at the date of
termination, or if the Optionee does not exercise such Option to the extent
the
Optioned Stock is vested within six months from the date of termination, the
Option shall terminate.
(d)
Death
of Optionee
.
In the
event of the death of an Optionee during the period of Continuous Service Status
since the date of grant of the Option, or within 30 days following termination
of the Optionee’s Continuous Service Status, the Option may be exercised, at any
time within twelve months following the date of death (but in no event later
than the expiration date of the term of such Option as set forth in the Option
Agreement), by such Optionee’s estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent the
Optioned Stock is vested at the date of death or, if earlier, the date of
termination of the Optionee’s Continuous Status as an Employee or Consultant. To
the extent that the Optioned Stock is not vested at the date of death or
termination, as the case may be, or if the Optionee does not exercise such
Option to the extent the Optioned Stock is vested within the time specified
herein, the Option shall terminate.
(e)
Extension
of Exercise Period
.
The
Administrator shall have full power and authority to extend the period of time
for which an Option is to remain exercisable following termination of an
Optionee’s Continuous Service Status from the periods set forth in
Sections 10(b), 10(c) and 10(d) above or in the Option Agreement to
such
greater time as the Board shall deem appropriate, provided that in no event
shall such Option be exercisable later than the date of expiration of the term
of such Option as set forth in the Option Agreement.
(f)
Rule
16b-3
.
Options
granted to Reporting Persons shall comply with Rule 16b-3 and shall
contain
such additional conditions or restrictions as may be required thereunder to
qualify for the maximum exemption for Plan transactions.
11.
Stock
Grants and Stock Unit Awards
.
Each
Stock Award Agreement reflecting the issuance of a Stock Grant or Stock Unit
shall be in such form and shall contain such terms and conditions as the
Administrator shall deem appropriate. The terms and conditions of such
agreements may change from time to time, and the terms and conditions of
separate agreements need not be identical, but each such agreement shall include
(through incorporation of provisions hereof by reference in the agreement or
otherwise) the substance of each of the following provisions:
(a)
Consideration
.
A Stock
Grant or Stock Unit may be awarded in consideration for such property or
services as is permitted under Applicable Law, including for past services
actually rendered to the Company or a Subsidiary for its benefit.
(b)
Vesting
.
Shares
of Common Stock awarded under an agreement reflecting a Stock Grant and a Stock
Unit award may, but need not, be subject to a share repurchase option,
forfeiture restriction or other conditions in favor of the Company in accordance
with a vesting or lapse schedule to be determined by the
Administrator.
(c)
Termination
of Participant’s Continuous Service
.
In
the
event a Participant’s Continuous Service terminates, the Company may reacquire
any or all of the Shares held by the Participant which have not vested or which
are otherwise subject to forfeiture or other conditions as of the date of
termination under the terms of the agreement.
(d)
Transferability
.
Rights
to acquire Shares under a Stock Grant or a Stock Unit agreement shall be
transferable by the Participant only by will or by the laws of descent and
distribution.
12.
Stock
Purchase Rights
.
(a)
Rights
to Purchase
.
Stock
Purchase Rights may be issued either alone, in addition to, or in tandem with
other Awards granted under the Plan and/or cash awards made outside of the
Plan.
After the Administrator determines that it will offer Stock Purchase Rights
under the Plan, it shall advise the offeree in writing of the terms, conditions
and restrictions related to the offer, including the number of Shares that
such
person shall be entitled to purchase, the price to be paid, and the time within
which such person must accept such offer, which shall in no event exceed 30
days
from the date upon which the Administrator made the determination to grant
the
Stock Purchase Right. The purchase price of Shares subject to Stock Purchase
Rights shall be as determined by the Administrator. The offer to purchase Shares
subject to Stock Purchase Rights shall be accepted by execution of a Stock
Award
Agreement in the form determined by the Administrator.
(b)
Repurchase
Option
.
Unless
the Administrator determines otherwise, the Stock Award Agreement shall grant
the Company a repurchase option exercisable upon the voluntary or involuntary
termination of the purchaser’s employment with the Company for any reason
(including death or disability). The purchase price for Shares repurchased
pursuant to the Stock Award Agreement shall be the original purchase price
paid
by the purchaser or such other price as the Administrator determines and may
be
paid by cancellation of any indebtedness of the purchaser to the Company. The
repurchase option shall lapse at such rate as the Administrator may
determine.
(c)
Other
Provisions
.
The
Stock Award Agreement shall contain such other terms, provisions and conditions
not inconsistent with the Plan as may be determined by the Administrator in
its
sole discretion. In addition, the provisions of Stock Award Agreements need
not
be the same with respect to each purchaser.
(d)
Rights
as a Stockholder
.
Once the
Stock Purchase Right is exercised, the purchaser shall have the rights
equivalent to those of a stockholder, and shall be a stockholder when his or
her
purchase is entered upon the records of the duly authorized transfer agent
of
the Company. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Stock Purchase Right is exercised,
except as provided in Section 17 of the Plan.
13.
Stock
Appreciation Rights
.
(a)
General
.
Stock
Appreciation Rights may be granted either alone, in addition to, or in tandem
with other Awards granted under the Plan. The Administrator may grant Stock
Appreciation Rights to eligible Participants subject to terms and conditions
not
inconsistent with this Plan and determined by the Administrator. The specific
terms and conditions applicable to the Participant shall be provided for in
the
Stock Award Agreement. Stock Appreciation Rights shall be exercisable, in whole
or in part, at such times as the Administrator shall specify in the Stock Award
Agreement. Stock Appreciation Rights shall be subject to the final sentence
of
Section 3(c) above.
(b)
Exercise
of Stock Appreciation Right
.
Upon
the
exercise of a Stock Appreciation Right, in whole or in part, the Participant
shall be entitled to a payment in an amount equal to the excess of the Fair
Market Value on the date of exercise of a fixed number of Shares covered by
the
exercised portion of the Stock Appreciation Right, over the Fair Market Value
on
the grant date of the Shares covered by the exercised portion of the Stock
Appreciation Right (or such other amount calculated with respect to Shares
subject to the award as the Administrator may determine). The amount due to
the
Participant upon the exercise of a Stock Appreciation Right shall be paid in
such form of consideration as determined by the Administrator and may be in
cash, Shares or a combination thereof, over the period or periods, in each
case
as specified in the Stock Award Agreement. A Stock Award Agreement may place
limits on the amount that may be paid over any specified period or periods
upon
the exercise of a Stock Appreciation Right, on an aggregate basis or as to
any
Participant. A Stock Appreciation Right shall be considered exercised when
the
Company receives written notice of exercise in accordance with the terms of
the
Stock Award Agreement from the person entitled to exercise the Stock
Appreciation Right.
(c)
Nonassignability
of Stock Appreciation Rights
.
Except
as determined by the Board, no Stock Appreciation Right shall be assignable
or
otherwise transferable by the Participant except by will or by the laws of
descent and distribution.
14.
Cash
Awards
.
Each
Cash Award will confer upon the Participant the opportunity to earn a future
payment tied to the level of achievement with respect to one or more performance
criteria established for a performance period of not less than one
(1) year.
(a)
Cash
Award
.
Each
Cash Award shall contain provisions regarding (i) the target and maximum
amount payable to the Participant as a Cash Award, (ii) the Qualifying
Performance Criteria
and
level
of achievement versus these criteria which shall determine the amount of such
payment, (iii) the period as to which performance shall be measured
for
establishing the amount of any payment, (iv) the timing of any payment
earned by virtue of performance, (v) restrictions on the alienation
or
transfer of the Cash Award prior to actual payment, (vi) forfeiture
provisions, and (vii) such further terms and conditions, in each case
not
inconsistent with the Plan, as may be determined from time to time by the
Administrator. The maximum amount payable as a Cash Award may be a multiple
of
the target amount payable, but the maximum amount payable pursuant to that
portion of a Cash Award granted under this Plan for any fiscal year to any
Participant shall not exceed U.S. $500,000.
(b)
Performance
Criteria
. The
Administrator shall establish the Qualifying Performance Criteria and level
of
achievement versus these criteria which shall determine the target and the
minimum and maximum amount payable under a Cash Award. The Administrator may
specify the percentage of the target Cash Award that is intended to satisfy
the
requirements for “performance-based compensation” under Section 162(m) of
the Code. Notwithstanding anything to the contrary herein, the performance
criteria for any portion of a Cash Award that is intended to satisfy the
requirements for “performance-based compensation” under Section 162(m) of
the Code shall be a measure established by the Administrator based on one or
more Qualifying Performance Criteria selected by the Administrator and specified
in writing not later than 90 days after the commencement of the period
of
service to which the performance goals relates, provided that the outcome is
substantially uncertain at that time (or in such other manner that complies
with
Section 162(m)).
(c)
Timing
and Form of Payment
.
The
Administrator shall determine the timing of payment of any Cash Award. The
Administrator may provide for or, subject to such terms and conditions as the
Administrator may specify and Applicable Law, may permit a Participant to elect
for the payment of any Cash Award to be deferred to a specified date or event.
The Administrator may specify the form of payment of Cash Awards, which may
be
cash or other property, or may provide for a Participant to have the option
for
his or her Cash Award, or such portion thereof as the Administrator may specify,
to be paid in whole or in part in cash or other property.
(d)
Termination
of Employment
.
The
Administrator shall have the discretion to determine the effect a Termination
of
Employment due to (i) disability, (ii) death or (iii) otherwise
shall have on any Cash Award.
15.
Section
162(m) Compliance
.
Any
Stock
Award (other than an Option or any other Stock Award having a purchase price
equal to 100% of the Fair Market Value on the date such award is made) or Cash
Award that is intended as “qualified performance-based compensation” within the
meaning of Section 162(m) of the Code must vest or become exercisable contingent
on the achievement of one or more Qualifying Performance Criteria.
Notwithstanding anything to the contrary herein, the Committee shall have the
discretion to determine the time and manner of compliance with Section 162(m)
of
the Code as required under applicable regulations and to conform the procedures
related to the Award to the requirements of Section 162(m) and may reduce the
number of Shares granted or amount of cash or other property to which a
Participant may otherwise have been entitled with respect to an Award designed
to qualify as performance-based compensation under Section 162(m).
16.
Taxes
.
(a)
As
a
condition of the grant, vesting or exercise of an Option, Stock Award or Cash
Award granted under the Plan or issuance of Shares under the Plan, the
Participant (or in the case of the Participant’s death, the person exercising
the Option or Stock Award) shall make such arrangements as the Administrator
may
require for the satisfaction of any applicable federal, state, local or foreign
withholding tax obligations that may arise in connection with such grant,
vesting or exercise of the Option, Stock Award or Cash Award and the issuance
of
Shares. The Company shall not be required to issue any Shares or pay any cash
under the Plan until such obligations are satisfied.
(b)
In
the
case of an Employee and in the absence of any other arrangement, the Employee
shall be deemed to have directed the Company to withhold or collect from his
or
her compensation an amount sufficient to satisfy such tax obligations from
the
next payroll payment otherwise payable after the date of an exercise of the
Option or Stock Award.
(c)
In
the
case of Participant other than an Employee (or in the case of an Employee where
the next payroll payment is not sufficient to satisfy such tax obligations,
with
respect to any remaining tax obligations), in the absence of any other
arrangement and to the extent permitted under the Applicable Laws, the
Participant shall be deemed to have elected to have the Company withhold from
the Shares to be issued upon exercise of the Option or Stock Award that number
of Shares having a Fair Market Value determined as of the applicable Tax Date
(as defined below) or that amount of cash to be paid pursuant to a Cash Award
equal to the minimum statutory amounts required to be withheld. For purposes
of
this Section 16, the Fair Market Value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be determined
under the Applicable Laws (the “
Tax
Date
”).
(d)
I
f
permitted by the Administrator, in its discretion, a Participant may satisfy
his
or her tax withholding obligations upon exercise of an Option or Stock Award
by
surrendering to the Company Shares that (i) in the case of Shares
previously acquired from the Company, have been owned by the Participant for
more than six (6) months on the date of surrender, and (ii) have a Fair
Market Value determined as of the applicable Tax Date equal to the minimum
statutory amounts required to be withheld.
(e)
Any
election or deemed election by a
Participant
to
have
Shares or cash withheld to satisfy tax withholding obligations under Section
16(c) or (d) above shall be irrevocable as to the particular Shares or cash
as
to which the election is made and shall be subject to the consent or disapproval
of the Administrator. Any election by a
Participant
under
Section 16(d) above must be made on or prior to the applicable Tax
Date.
(f)
In
the
event an election to have Shares withheld is made by a Participant and the
Tax
Date is deferred under Section 83 of the Code because no election is filed
under
Section 83(b) of the Code, the Participant shall receive the full number of
Shares with respect to which the Option or Stock Award is exercised but such
Participant shall be unconditionally obligated to tender back to the Company
the
proper number of Shares on the applicable Tax Date.
17.
Adjustments
Upon Changes in Capitalization, Merger or Certain Other
Transactions
.
(a)
Changes
in Capitalization
.
Subject
to any required action by the stockholders of the Company, the number of shares
of Common Stock covered by each outstanding Option or Stock Award, the number
of
shares of Common Stock that have been authorized for issuance under the Plan
but
as to which no Options or Stock Awards have yet been granted or that have been
returned to the Plan upon cancellation or expiration of an Option or Stock
Award, and the number of shares set forth in Sections 3(c) and 8 above, as
well
as the price per share of Common Stock covered by each such outstanding Option
or Stock Award, shall be proportionately adjusted for any increase or decrease
in the number of issued shares of Common Stock resulting from a stock split,
reverse stock split, stock dividend, combination, recapitalization or
reclassification of the Common Stock, or any other increase or decrease in
the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been “effected
without receipt of consideration.” Such adjustment shall be made by the
Administrator, whose determination in that respect shall be final, binding
and
conclusive. Except as expressly provided herein, no issuance by the Company
of
shares of stock of any class, or securities convertible into shares of stock
of
any class, shall affect, and no adjustment by reason thereof shall be made
with
respect to, the number or price of shares of Common Stock subject to an Option
or Stock Award.
(b)
Dissolution
or Liquidation
.
In the
event of the proposed dissolution or liquidation of the Company, the Board
shall
notify the Participant at least 15 days prior to such proposed action. To the
extent it has not been previously exercised, the Option or Stock Award will
terminate immediately prior to the consummation of such proposed action unless
otherwise determined by the Administrator.
(c)
Change
in Control
.
In the
event there is a Change in Control of the Company, as determined by the Board
or
a Committee, the Board or Committee may, in its discretion, (i) provide
for
the assumption or substitution of, or adjustment to, each outstanding Award;
(ii) accelerate the vesting of Options and terminate any restrictions
on
Cash Awards or Stock Awards; and/or (iii) provide for termination of
Awards
as a result of the Change in Control on such terms and conditions as it deems
appropriate, including providing for the cancellation of Awards for a cash
payment to the Participant. For purposes of this Section 17(c), an Option or
a
Stock Award shall be considered assumed, without limitation, if, at the time
of
issuance of the stock or other consideration upon such merger or sale of assets,
each holder of an Option or a Stock Award would be entitled to receive upon
exercise of the Option or Stock Award the same number and kind of shares of
stock or the same amount of property, cash or securities as such holder would
have been entitled to receive upon the occurrence of such transaction if the
holder had been, immediately prior to such transaction, the holder of the number
of Shares of Common Stock covered by the Option or the Stock Award at such
time
(after giving effect to any adjustments in the number of Shares covered by
the
Option or Stock Award as provided for in this Section 17).
(d)
Certain
Distributions
.
In the
event of any distribution to the Company’s stockholders of securities of any
other entity or other assets (other than dividends payable in cash or stock
of
the Company) without receipt of consideration by the Company, the Administrator
may, in its discretion, appropriately adjust the price per share of Common
Stock
covered by each outstanding Option or Stock Award to reflect the effect of
such
distribution.
18.
Non-Transferability
of Awards
.
Except
as set forth in this Section 18, Awards may not be sold, pledged, assigned,
hypothecated, transferred or disposed of in any manner other than by will or
by
the laws of descent or distribution;
provided
however that Awards may be transferred
by
instrument to an inter vivos or testamentary trust in which the Awards are
to be
passed to beneficiaries upon the death of the trustor (settlor) or by gift
or
pursuant to domestic relations orders to “Immediate Family Members” (as defined
below) of the Participant. “
Immediate
Family
”
means
any child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law (including adoptive
relationships), a trust in which these persons have more than fifty percent
of
the beneficial interest, a foundation in which these persons (or the
Participant) control the management of assets, and any other entity in which
these persons (or the Participant) own more than fifty percent of the voting
interests. The designation of a beneficiary by a Participant will not constitute
a transfer. An Option or Stock Award may be exercised, during the lifetime
of
the holder of an Option or Stock Award, only by such holder or a transferee
permitted by this Section 18.
19.
Time
of Granting Awards
.
The date
of grant of an Award shall, for all purposes, be the date on which the
Administrator makes the determination granting such Award, or such other date
as
is determined by the Board; provided, however, that in the case of any Incentive
Stock Option, the grant date shall be the later of the date on which the
Administrator makes the determination granting such Incentive Stock Option
or
the date of commencement of the Optionee’s employment relationship with the
Company. Notice of the determination shall be given to each Employee or
Consultant to whom an Award is so granted within a reasonable time after the
date of such grant.
20.
Amendment
and Termination of the Plan
.
(a)
Authority
to Amend or Terminate
.
The
Board may at any time amend, alter, suspend or discontinue the Plan, but no
amendment, alteration, suspension or discontinuation shall be made that would
impair the rights of any Optionee or holder of Stock Awards or Cash Awards
under
any grant theretofore made, without his or her consent. In addition, to the
extent necessary and desirable to comply with the Applicable Laws, the Company
shall obtain stockholder approval of any Plan amendment in such a manner and
to
such a degree as required. In addition, unless approved by the stockholders
of
the Company, no amendment shall be made that would result in a repricing of
Options by (x) reducing the exercise price of outstanding Options or (y)
canceling an outstanding Option held by a Participant and re-granting to the
Participant a new Option with a lower exercise price, in either case other
than
in connection with a change in the Company’s capitalization pursuant to Section
17(a) of the Plan.
(b)
Effect
of Amendment or Termination
.
No
amendment or termination of the Plan shall adversely affect Options, Stock
Awards or Cash Awards already granted, unless mutually agreed otherwise between
the Optionee or holder of Stock Awards or Cash Awards and the Board, which
agreement must be in writing and signed by the Optionee or holder of Stock
Awards or Cash Awards and the Company.
21.
Conditions
upon Issuance of Shares
.
Shares
shall not be issued pursuant to the exercise of an Option or Stock Award unless
the exercise of such Option or Stock Award and the issuance and delivery of
such
Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any Stock Exchange. Notwithstanding any other provision of
the
Plan or any agreement entered into by the Company pursuant to the Plan, the
Company shall not be obligated, and shall have no liability for failure, to
issue or deliver any Shares under the Plan unless such issuance or delivery
would comply with the Applicable Laws, with such compliance determined by the
Company in consultation with its legal counsel.
As
a
condition to the exercise of an Option or Stock Award, the Company may require
the person exercising such Award to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by
law.
22.
Reservation
of Shares
.
The
Company, during the term of this Plan, will at all times reserve and keep
available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan. The inability of the Company to obtain authority
from
any regulatory body having jurisdiction, which authority is deemed by the
Company’s counsel to be necessary to the lawful issuance and sale of any Shares
hereunder, shall relieve the Company of any liability in respect of the failure
to issue or sell such Shares as to which such requisite authority shall not
have
been obtained.
23.
Agreements
.
Options,
Stock Awards and Cash Awards shall be evidenced by written Option Agreements,
Stock Award Agreements and Cash Award Agreements, respectively, in such form(s)
as the Administrator shall approve from time to time.
24.
Stockholder
Approval
.
If
required by Applicable Laws, continuance of the Plan shall be subject to
approval by the stockholders of the Company within twelve months before or
after
the date the Plan is adopted. Such stockholder approval shall be obtained in
the
degree and manner required under the Applicable Laws. All Options, Stock Awards
and Cash Awards issued under the Plan shall become void in the event such
approval is not obtained.
25.
Governing
Law
.
The Plan
and all determinations made and actions taken pursuant hereto shall be governed
by the substantive laws, but not the choice of law rules, of the state of
Delaware.
EXHIBIT
99.2
RITA
MEDICAL SYSTEMS, INC.
2000
DIRECTORS’ STOCK PLAN
Amended
June 8, 2005
1.
Purposes
of the Plan
.
The
purposes of this Directors’ Stock Plan are to attract and retain the best
available personnel for service as Directors of the Company, to provide
additional incentive to the Outside Directors of the Company to serve as
Directors, and to encourage their continued service on the Board.
All
options granted hereunder shall be nonstatutory stock options.
2.
Definitions
.
As used
herein, the following definitions shall apply:
(a)
“
Applicable
Laws
”
means
the legal requirements relating to the administration of stock option and
restricted stock plans under applicable U.S. state corporate laws, U.S. federal
and applicable state securities laws, the Code, any Nasdaq National Market
or
stock exchange rules or regulations and the applicable laws of any other country
or jurisdiction where Options or Stock Awards are granted under the Plan, as
such laws, rules, regulations and requirements shall be in place from time
to
time.
(b)
“
Award
”
means
an Option or Stock Award granted under the Plan.
(c)
“
Board
”
means
the Board of Directors of the Company.
(d)
“
Change
of Control
”
means
any
of the following, unless the Board provides otherwise:
(i)
any
merger or consolidation in which the Company shall not be the surviving entity
(or survives only as a subsidiary of another entity whose stockholders did
not
own all or substantially all of the Common Stock in substantially the same
proportions as immediately prior to such transaction),
(ii)
the
sale of
all or substantially all of the Company’s assets to any other person or entity
(other than a wholly-owned subsidiary),
(iii)
the
acquisition of beneficial ownership of a controlling interest (including,
without limitation, power to vote) the outstanding shares of Common Stock by
any
person or entity (including a “group” as defined by or under
Section 13(d)(3) of the Exchange Act), or
(iv)
a
contested election of Directors, as a result of which or in connection with
which the persons who were Directors before such election or their nominees
(the
“
Incumbent
Directors
”)
cease
to constitute a majority of the Board; provided however that if the election,
or
nomination for election by the Company’s stockholders, of any new director was
approved by a vote of at least fifty percent (50%) of the Incumbent Directors,
such new Director shall be considered as an Incumbent Director.
(e)
“
Code
”
means
the Internal Revenue Code of 1986, as amended.
(f)
“
Common
Stock
”
means
the Common Stock of the Company.
(g)
Committee
”
means
any committee of the Board established from time to time by the
Board.
(h)
“
Company
”
means
RITA Medical Systems, Inc., a Delaware corporation.
(i)
“
Continuous
Status as a Director
”
means
the absence of any interruption or termination of service as a
Director.
(j)
“
Director
”
means a
member of the Board.
(k)
“
Employee
”
means
any person, including any officer or Director, employed by the Company or any
Parent or Subsidiary of the Company. The payment of a director’s fee by the
Company shall not be sufficient in and of itself to constitute “employment” by
the Company.
(l)
“
Exchange
Act
”
means
the Securities Exchange Act of 1934, as amended.
(m)
“
Option
”
means a
stock option granted pursuant to the Plan. All options shall be nonstatutory
stock options (i.e., options that are not intended to qualify as incentive
stock
options under Section 422 of the Code).
(n)
“
Optioned Stock
”
means
the Common Stock subject to an Option.
(o)
“
Optionee
”
means
an Outside Director who receives an Option.
(p)
“
Outside
Director
”
means a
Director who is not an Employee.
(q)
“
Parent
”
means a
“parent corporation,” whether now or hereafter existing, as defined in
Section 424(e) of the Code.
(r)
“
Plan
”
means
this 2000 Directors’ Stock
Plan,
as
amended.
(s)
“
Retainer
”
means
any retainer paid from time to time by the Company to its Outside Directors
as
an annual retainer, a retainer in connection with committee service or as a
special-purpose retainer.
(t)
“
Share
”
means a
share of the Common Stock, as adjusted in accordance with Section 11
of the
Plan.
(u)
“
Stock
Award
”
means
Shares issued in payment of a Retainer under Section 13 of the
Plan.
(v)
“
Subsidiary
”
means a
“subsidiary corporation,” whether now or hereafter existing, as defined in
Section 424(f) of the Code.
3.
Stock
Subject to the Plan
.
Subject
to the provisions of Section 11 of the Plan, the maximum aggregate number
of Shares which may be issued or sold under the Plan is 1,000,000 Shares of
Common Stock (the “
Pool
”).
The
Shares may be authorized, but unissued, or reacquired Common Stock.
If
an
Option should expire or become unexercisable for any reason without having
been
exercised in full, the unpurchased Shares which were subject thereto shall,
unless the Plan has been terminated, become available for future grant under
the
Plan. Any Shares of Common Stock that are retained by the Company upon exercise
of an Option in order to satisfy the exercise price for such Option, or any
withholding taxes due with respect to such exercise, shall not continue to
be
available for issuance under the Plan. If Shares that were acquired upon
exercise of an Option are subsequently repurchased by the Company, such Shares
shall not in any event be returned to the Plan and shall not become available
for future grant under the Plan.
4.
Administration
of Awards under the Plan
.
(a)
Administrator
.
Except
as otherwise required herein, the Plan shall be administered by the
Board.
(b)
Powers
of the Board
.
Subject
to the provisions and restrictions of the Plan, the Board shall have the
authority, in its discretion: (i) to determine, upon review of relevant
information and in accordance with Section 8(b) of the Plan, the fair
market value of the Common Stock; (ii) to determine the exercise price per
Share
of Options to be granted, which exercise price shall be determined in accordance
with Section 8 of the Plan; (iii) to interpret the Plan; (iv) to
prescribe, amend and rescind rules and regulations relating to the Plan; (v)
to
establish (separate from the Plan) the amount of any Retainer, as well as
increase or decrease the amount of such Retainer and terminate the payment
of
any such Retainer at any time at its sole discretion, (vi) to authorize
any
person to execute on behalf of the Company any instrument required to effectuate
the grant of an Option or Stock Award hereunder; and (vii) to make all
other determinations deemed necessary or advisable for the administration of
the
Plan.
(c)
Effect
of Board’s Decision
.
All
decisions, determinations and interpretations of the Board shall be final and
binding on all Optionees and any other holders of Options, Retainers or Stock
Awards granted under the Plan.
5.
Grants
of Options under the Plan
.
(a)
Procedure
for Grants
.
All
grants of Options hereunder shall be automatic and nondiscretionary and shall
be
made strictly in accordance with the following provisions:
(i)
No
person
shall have any discretion to select which Outside Directors shall be granted
Options or to determine the number of Shares to be covered by Options granted
to
Outside Directors.
(ii)
Each
individual who becomes an Outside Director after June 8, 2005 and subject to
prior approval of the Plan by the stockholders of the Company, shall be
automatically granted an Option to purchase 35,000 Shares (subject to adjustment
as set forth in this Section 5(a)(ii) and Section 11 below) (the “
Initial
Option
”)
on the
date on which such person first becomes an Outside Director, whether through
election by the stockholders of the Company or appointment by the Board of
Directors to fill a vacancy. The number of Shares to be granted subject to
an
Initial Option shall automatically increase on the first day of each of the
Company’s fiscal years (commencing in 2006) by 3% of the number of Shares
(rounded down to the nearest whole Share) subject to the Initial Option for
the
prior fiscal year of the Company. An Outside Director who previously was an
Employee shall not receive a grant under this Section 5(a)(ii).
(iii)
On
the
date of each Annual Meeting of the Company’s stockholders (commencing with the
Annual Meeting of the Company’s stockholders for 2005 and subject to approval of
the Plan by the stockholders of the Company at such meeting) immediately
following which an Outside Director is serving on the Board, and provided that,
as of such date, he or she shall have served on the Board for at least six
(6)
months, each eligible Outside Director shall be automatically granted an Option
to purchase 20,000 Shares (subject to adjustment as set forth in this Section
5(a)(iii) and Section 11 below) (the “
Annual
Option
”);
provided that if the Outside Director is the Chairman of the Board of the
Company immediately following such Annual Meeting, the Annual Option for such
Outside Director will be to purchase 30,000 Shares (subject to adjustment as
set
forth in this Section 5(a)(iii) and Section 11 below). The number of Shares
to
be granted subject to an Annual Option (including the number of Shares subject
to the Annual Option granted to any person serving as Chairman of the Board)
shall automatically increase during each successive year (commencing with 2006)
by 3% of the number of Shares (rounded down to the nearest whole Share) subject
to the Annual Option as of the prior year. An Outside Director who previously
was an Employee shall be eligible to receive grants under this Section
5(a)(iii).
(iv)
Each
Outside Director who is serving as a member of a Committee of the Board
(including the chairperson) immediately following each Annual Meeting of the
Company’s stockholders (commencing with the Annual Meeting of the Company’s
stockholders for 2005 and subject to approval of the Plan by the stockholders
of
the Company at such meeting) shall be automatically granted an Option to
purchase 5,000 Shares (subject to adjustment as set forth in this Section
5(a)(iv) and Section 11 below) (the “
Annual
Committee Option
”)
on the
date of such Annual Meeting of the Company’s stockholders. The number of Shares
to be granted subject to an Annual Committee Option shall automatically increase
during each successive year (commencing with 2006) by 3% of the number of Shares
(rounded down to the nearest whole Share) subject to the Annual Committee Option
as of the prior year.
(v)
Each
Outside Director who is serving as a chairperson of a Committee of the Board
immediately
following each Annual Meeting of the Company’s stockholders (commencing with the
Annual Meeting of the Company’s stockholders for 2005 and subject to approval of
the Plan by the stockholders of the Company at such meeting) shall be
automatically granted (in addition to any Annual Committee Option to which
such
Outside Director is entitled under Section 5(a)(iv) above) an Option to purchase
2,000 Shares (subject to adjustment as set forth in this Section 5(a)(v) and
Section 11 below) (the “
Annual
Committee Chair Option
”)
on the
date of such Annual Meeting of the Company’s stockholders. The number of Shares
to be granted subject to an Annual Committee Chair Option shall automatically
increase during each successive year (commencing with 2006) by 3% of the number
of Shares (rounded down to the nearest whole Share) subject to the Annual
Committee Chair Option as of the prior year.
(vi)
Notwithstanding
the provisions of subsections (ii), (iii), (iv) and (v) hereof, in the event
that a grant would cause the number of Shares subject to outstanding Options
plus the number of Shares previously purchased upon exercise of Options and
issued as Stock Awards to exceed the Pool, then each such automatic Option
grant
otherwise required to be made as of any date shall be for that number of Shares
determined by multiplying the number of Shares subject to each such automatic
Option grant otherwise required to be made as of such date by a fraction the
numerator of which shall be the total number of Shares remaining available
for
grant as of such date and the denominator of which shall be the aggregate number
of Shares subject to automatic Option grants otherwise required to be made
as of
such date. Any further grants shall then be deferred until such time, if any,
as
additional Shares become available for grant under the Plan through action
of
the stockholders to increase the number of Shares which may be issued under
the
Plan or through cancellation or expiration of Options previously granted
hereunder.
(vii)
Notwithstanding
the provisions of subsections (ii), (iii), (iv) and (v) hereof, any
grant
of an Option made before the Company has obtained stockholder approval of the
Plan in accordance with Section 20 hereof shall be conditioned upon
obtaining such stockholder approval of the Plan in accordance with
Section 20 hereof.
(viii)
The
terms
of each Initial Option granted hereunder shall be as follows:
(1)
each
Initial Option shall be exercisable only while the Outside Director remains
a
Director of the Company, except as set forth in Section 9
below;
(2)
the
exercise price per Share of each Initial Option shall be 100% of the fair market
value per Share on the date of grant of each Initial Option, determined in
accordance with Section 8 hereof;
(3)
subject
to the Outside Director’s remaining in Continuous Status as a Director through
each such date, each Initial Option shall vest and become exercisable at the
rate of 1/36 of the Shares subject to the Initial Option on each monthly
anniversary of the date of grant of the Initial Option.
(ix)
The
terms
of each Annual Option, Annual Committee Option and Annual Committee Chair Option
granted hereunder shall be as follows:
(1)
each
Annual Option, Annual Committee Option and Annual Committee Chair Option shall
be exercisable only while the Outside Director remains a Director of the
Company, except as set forth in Section 9 below;
(2)
the
exercise price per Share of each Annual Option, Annual Committee Option and
Annual Committee Chair Option shall be 100% of the fair market value per Share
on the date of grant of each Annual Option, Annual Committee Option and Annual
Committee Chair Option, determined in accordance with Section 8
hereof;
(3)
subject
to the Outside Director’s remaining in Continuous Status as a Director through
each such date, each Annual Option, Annual Committee Option and Annual Committee
Chair Option shall vest and become exercisable at the rate of one hundred
percent (100%)
of
the
Shares subject to the Annual Option, Annual Committee Option and Annual
Committee Chair Option, respectively, on the earlier of (i) the one year
anniversary of the date of grant of the Option and (ii) the date immediately
preceding the date of the Annual Meeting of the Company’s stockholders for the
year following the year of grant for such Option.
(b)
Suspension
or Termination of Option
.
If the
Chairman of the Board or his or her designee (including a designee appointed
by
the Board in the event of alleged misconduct by the Chairman of the Board)
reasonably believes that an Optionee has committed an act of misconduct, the
Chairman of the Board or his or her designee may suspend the Optionee’s right to
exercise any option pending a determination by the Board (excluding the Outside
Director accused of such misconduct). If the Board (excluding the Outside
Director accused of such misconduct) determines an Optionee has committed an
act
of embezzlement, fraud, dishonesty, nonpayment of an obligation owed to the
Company, breach of fiduciary duty or deliberate disregard of the Company rules
resulting in loss, damage or injury to the Company, or if an Optionee makes
an
unauthorized disclosure of any Company trade secret or confidential information,
engages in any conduct constituting unfair competition, induces any Company
customer to breach a contract with the Company or induces any principal for
whom
the Company acts as agent to terminate such agency relationship, neither the
Optionee nor his or her estate shall be entitled to exercise any Option
whatsoever. In making such determination, the Board of Directors (excluding
the
Outside Director accused of such misconduct) shall act fairly and shall give
the
Optionee an opportunity to appear and present evidence on Optionee’s behalf at a
hearing before the Board or a committee of the Board.
6.
Eligibility
.
Awards
may be granted only to Outside Directors. All Options shall be automatically
granted in accordance with the terms set forth in Section 5(a) above.
An
Outside Director who has been granted an Option may, if he or she is otherwise
eligible, be granted an additional Option or Options in accordance with such
provisions.
The
Plan
shall not confer upon any Optionee any right with respect to continuation of
service as a Director or nomination to serve as a Director or on a Committee
of
the Board, nor shall it interfere in any way with any rights which the Director
or the Company may have to terminate his or her directorship at any
time.
7.
Term
of Options
.
The term
of each Option shall be ten (10) years from the date of grant thereof unless
an
Option terminates sooner pursuant to Section 9 below.
8.
Exercise
Price and Consideration
.
(a)
Exercise
Price
.
The per
Share exercise price for the Shares to be issued pursuant to exercise of an
Option shall be 100% of the fair market value per Share on the date of grant
of
the Option.
(b)
Fair
Market Value
.
The fair
market value shall be determined by the Board; provided however that in the
event the Common Stock is traded on the Nasdaq National Market or listed on
a
stock exchange, the fair market value per Share shall be the closing sales
price
on such system or exchange on the date of grant of the Option (or, in the event
that the Common Stock is not traded on such date, on the immediately preceding
trading date), as reported in
The
Wall Street Journal
,
or if
there is a public market for the Common Stock but the Common Stock is not traded
on the Nasdaq National Market or listed on a stock exchange, the fair market
value per Share shall be the mean of the bid and asked prices of the Common
Stock in the over-the-counter market on the date of grant, as reported in
The
Wall Street Journal
(or, if
not so reported, as otherwise reported by the National Association of Securities
Dealers Automated Quotation (“Nasdaq”) System).
(c)
Form
of Consideration
.
The
consideration to be paid for the Shares to be issued upon exercise of an Option
shall consist entirely of (i) cash, (ii) check, (iii) other Shares of Common
Stock having a fair market value on the date of surrender equal to the aggregate
exercise price of the Shares as to which the Option shall be exercised (which,
if acquired from the Company, shall have been held for at least six months),
(iv)
if
as of the date of exercise of an Option the Company then is permitting Optionees
to engage in a “same-day sale” cashless-brokered exercise program involving one
or more brokers, through such a program that complies with the Applicable Laws
(including without limitation the requirements of Regulation T and other
applicable regulations promulgated by the Federal Reserve Board) and that
ensures prompt delivery to the Company of the amount required to pay the
exercise price and any applicable withholding taxes or (v)
any
combination of such methods of payment and/or any other consideration or method
of payment as shall be permitted under the Applicable Laws.
9.
Exercise
of Option
.
(a)
Procedure
for Exercise; Rights as a Stockholder
.
Any
Option granted hereunder shall be exercisable at such times as are set forth
in
Section 5(a) above; provided however that no Options shall be exercisable
prior to stockholder approval of the Plan in accordance with Section 20
below has been obtained.
An
Option
may not be exercised for a fraction of a Share.
An
Option
shall be deemed to be exercised when written notice of such exercise has been
given to the Company in accordance with the terms of the Option by the person
entitled to exercise the Option and full payment (in a manner complying with
Section 8(c)) for the Shares with respect to which the Option is exercised
has
been received by the Company. Full payment may consist of any consideration
and
method of payment allowable under Section 8(c) of the Plan. Until the
issuance (as evidenced by the appropriate entry on the books of the Company
or
of a duly authorized transfer agent of the Company) of the stock certificate
evidencing such Shares, no right to vote or receive dividends or any other
rights as a stockholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. A share certificate for the number
of Shares so acquired shall be issued to the Optionee as soon as practicable
after exercise of the Option. No adjustment will be made for a dividend or
other
right for which the record date is prior to the date the stock certificate
is
issued, except as provided in Section
11
of
the
Plan.
Exercise
of an Option in any manner shall result in a decrease in the number of Shares
which thereafter may be available, both for purposes of the Plan and for sale
under the Option, by the number of Shares as to which the Option is
exercised.
(b)
Termination
of Continuous Status as a Director
.
If an
Outside Director ceases to serve as a Director, he or she may, but only within
ninety (90) days after the date he or she ceases to be a Director of the
Company, exercise his or her Option to the extent that he or she was vested
in
the Optioned Stock at the date of such termination. Notwithstanding the
foregoing, in no event may the Option be exercised after its term set forth
in
Section 7 has expired. To the extent that such Outside Director was not vested
in the Optioned Stock at the date of such termination, or does not exercise
such
Option (to the extent he or she was entitled to exercise) within the time
specified above, the Option shall terminate and the Shares underlying the
unexercised portion of the Option shall revert to the Plan.
(c)
Disability
of Optionee
.
Notwithstanding Section 9(b) above, in the event a Director is unable
to
continue his or her service as a Director with the Company as a result of his
or
her total and permanent disability (as defined in Section 22(e)(3) of
the
Code), he or she may, but only within twelve (12) months from the date of such
termination, exercise his or her Option to the extent he or she was vested
in
the Option Stock at the date of such termination. Notwithstanding the foregoing,
in no event may the Option be exercised after its term set forth in
Section 7 has expired. To the extent that he or she was not vested in
the
Optioned Stock at the date of termination, or if he or she does not exercise
such Option (to the extent he or she was entitled to exercise) within the time
specified above, the Option shall terminate and the Shares underlying the
unexercised portion of the Option shall revert to the Plan.
(d)
Death
of Optionee
.
In the
event of the death of an Optionee: (A) during the term of the Option
who
is, at the time of his or her death, a Director of the Company and who shall
have been in Continuous Status as a Director since the date of grant of the
Option, or (B) three (3) months after the termination of Continuous
Status
as a Director, the Option may be exercised, at any time within twelve (12)
months following the date of death, by the Optionee’s estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only
to
the extent the Director was vested in the Optioned Stock at the date of death
or
the date of termination, as applicable. Notwithstanding the foregoing, in no
event may the Option be exercised after its term set forth in Section 7
has
expired. To the extent that an Optionee was not vested in the Optioned Stock
at
the date of death or termination or if he or she does not exercise such Option
(to the extent he or she was entitled to exercise) within the time specified
above, the Option shall terminate and the Shares underlying the unexercised
portion of the Option shall revert to the Pool.
10.
Nontransferability
of Options
.
An
Option generally may not be sold, pledged, assigned, hypothecated, transferred
or disposed of in any manner other than by will or by the laws of descent or
distribution or pursuant to a qualified domestic relations order (as defined
by
the Code or the rules thereunder); provided however that Options may be
transferred
by
instrument to an inter vivos or testamentary trust in which the Options are
to
be passed to beneficiaries upon the death of the trustor (settlor) or by gift
or
pursuant to domestic relations orders to “Immediate Family Members” (as defined
below) of the Optionee. “
Immediate
Family
”
means
any child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law (including adoptive
relationships), a trust in which these persons have more than fifty percent
of
the beneficial interest, a foundation in which these persons (or the Optionee)
control the management of assets, and any other entity in which these persons
(or the Optionee) own more than fifty percent of the voting
interests
.
The
designation of a beneficiary by an Optionee does not constitute a transfer.
An
Option may be exercised during the lifetime of an Optionee only by the Optionee
or a transferee permitted by this Section.
11.
Adjustments
Upon Changes in Capitalization; Corporate Transactions
.
(a)
Adjustment
.
Subject
to any required action by the stockholders of the Company, the number of shares
of Common Stock covered by each outstanding Option, the number of Shares of
Common Stock set forth in Sections 5(a)(ii), (iii), (iv) and (v) above, and
the
number of Shares of Common Stock which have been authorized for issuance under
the Plan but which have not been issued or as to which no Options have yet
been
granted or which have been returned to the Plan upon cancellation or expiration
of an Option, as well as the price per Share of Common Stock covered by each
such outstanding Option, shall be proportionately adjusted for any increase
or
decrease in the number of issued Shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification
of
the Common Stock (including any such change in the number of Shares of Common
Stock effected in connection with a change in domicile of the Company) or any
other increase or decrease in the number of issued Shares of Common Stock
effected without receipt of consideration by the Company; provided however
that
conversion of any convertible securities of the Company shall not be deemed
to
have been “effected without receipt of consideration.” Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock issued under
the
Plan or subject to an Option granted under the Plan.
(b)
Change
of Control
.
In the
event of any transaction that qualifies as a Change of Control and
notwithstanding whether or not outstanding Options are assumed, substituted
for
or terminated in connection with the transaction, the vesting of each
outstanding Option shall accelerate in full such that each Optionee shall have
the right to exercise his or her Option as to all of the Optioned Stock,
including Shares as to which the Option would not otherwise be exercisable,
immediately prior to consummation of the transaction.
For
purposes of this Section 11(b), an Option shall be considered assumed, without
limitation, if, at the time of issuance of the stock or other consideration
upon
such Change of Control, each Optionee would be entitled to receive upon exercise
of an Option the same number and kind of shares of stock or the same amount
of
property, cash or securities as the Optionee would have been entitled to receive
upon the occurrence of such transaction if the Optionee had been, immediately
prior to such transaction, the holder of the number of Shares of Common Stock
covered by the Option at such time (after giving effect to any adjustments
in
the number of Shares covered by the Option as provided for in this Section
11);
provided however that if such consideration received in the transaction was
not
solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation, provide for
the consideration to be received upon exercise of the Option to be solely common
stock of the successor corporation or its Parent equal to the Fair Market Value
of the per Share consideration received by holders of Common Stock in the
transaction.
(c)
Certain
Distributions
.
In the
event of any distribution to the Company’s stockholders of securities of any
other entity or other assets (other than dividends payable in cash or stock
of
the Company) without receipt of consideration by the Company, the Administrator
may, in its discretion, appropriately adjust the price per Share of Common
Stock
covered by each outstanding Option to reflect the effect of such
distribution.
12.
Time
of Granting Options
.
The date
of grant of an Option shall, for all purposes, be the date determined in
accordance with Section 5(a) hereof. Notice of the determination shall
be
given to each Outside Director to whom an Option is so granted within a
reasonable time after the date of such grant.
13.
Annual
Retainer Program
.
(a)
Annual
Retainer
.
During
any period (beginning as of January 1, 2006) in which the Company is paying
a
Retainer, each Outside Director shall be eligible to receive payment of such
Retainer in the form of Shares issued subject to a Stock Award under this Plan
by electing to accept payment of the Retainer in fully-vested Shares as provided
for in this Section 13. Payment of a Retainer shall be made on a quarterly
basis
and shall be made with respect to service provided for a fiscal quarter as
soon
as practical after the last trading day of the applicable quarter (typically
on
the first trading day of the next succeeding fiscal quarter), provided that
to
be eligible to receive such payment the Outside Director must have continuously
served as an Outside Director throughout the quarter and on the first trading
day of the next fiscal quarter.
(b)
Payment
of Retainer in Shares in Lieu of Cash Compensation
.
With
respect to the quarterly payments of the Retainer payable under this Plan,
each
Outside Director, at his or her election, has the right to elect to accept
payment in fully vested Shares of the Company’s Common Stock equal
to
any percent
of the dollar value of the Retainer; provided that the Board may limit the
percentage that may be specified by an Outside Director. With respect to any
Retainer payable for a calendar-year period, each Outside Director must make
this election for each respective one (1) year period of the Plan before
or
during the fourth fiscal quarter preceding the beginning of the next succeeding
one-year period (or at such other time or during such other period as determined
by the Board). The election shall be made on the form attached hereto. An
individual who first becomes eligible to receive a Retainer after the beginning
of a calendar year shall make the election for his or her initial period of
receipt of the Retainer on or prior to the date on which he or she first becomes
eligible to receive the Retainer. To the extent that an Outside Director fails
to make an election to receive payment of a Retainer in fully vested Shares
hereunder, or to the extent that an Outside Director elects to be paid in fully
vested Shares as to less than 100% of the value of the Retainer, he or she
shall
be paid for the Retainer in cash or in such form of consideration as the Board
shall otherwise establish with respect to the Retainer.
The
number of Shares issued each quarter will equal the dollar amount of the
Retainer to be taken in Shares, divided by 100 percent of the fair market
value of the Shares on the first trading day after the end of each fiscal
quarter for which the Retainer is due (such date, the “
Payment
Date
”);
provided
however
that to
the extent stockholder approval of any amendment to the Plan is required before
payment of all or any portion of a Retainer payment can be made hereunder,
then
the applicable Payment Date with respect to such payment shall be the date
of
such stockholder approval. The fair market value shall be determined to be
the
closing sale price of the Shares on the Payment Date as such price is reported
by the Nasdaq National Market (or, if not so reported, as otherwise reported
by
the National Association of Securities Dealers Automated Quotation System),
or
in the event the Common Stock is listed on a stock exchange, the fair market
value shall be the closing sale price on such exchange on the Payment Date.
No
fractional Shares will be issued. The number of Shares issued will be rounded
down to the nearest number of whole Shares.
In
addition, in the event that the total number of Shares reserved for issuance
hereunder shall be insufficient to allow the Company to issue the full number
of
Shares otherwise required pursuant to existing elections made by participating
Outside Directors to receive the Retainer in Shares, then the Company shall
make
a pro rata allocation among participating Outside Directors of the Shares
available for issuance on such date or dates upon which it would otherwise
be
required to issue such Shares and pay the remainder of the amount owed with
respect to the Retainers in cash (unless and until additional Shares become
available for grant hereunder).
The
Shares will be issued in accordance with the instructions provided by the
Outside Director on the form attached hereto.
14.
Term
of Plan; Effective Date
.
The Plan
shall continue in effect for a term of ten (10) years
from
the
date of amendment by the stockholders of the Company
unless
sooner terminated under Section 15 of the Plan.
15.
Amendment
and Termination of the Plan
.
(a)
Amendment
and Termination
.
The
Board
may at any time amend, alter, suspend or discontinue the Plan, but no amendment,
alteration, suspension or discontinuation shall be made that would impair the
rights of any Optionee or holder of Stock Awards or Retainers under any grant
theretofore made, without his or her consent. In addition, to the extent
necessary and desirable to comply with the Applicable Laws, the Company shall
obtain stockholder approval of any Plan amendment in such a manner and to such
a
degree as required.
(b)
Effect
of Amendment or Termination
.
Any such
amendment or termination of the Plan that would impair the rights of any
Optionee shall not affect Options already granted such Optionee or determined
for such participant and such Options shall remain in full force and effect
as
if this Plan had not been amended or terminated, unless mutually agreed
otherwise between the Optionee or participant and the Board, which agreement
must be in writing and signed by the Optionee or effected participant and the
Company.
16.
Conditions
Upon Issuance of Shares
.
Notwithstanding any other provision of the Plan or any agreement entered into
by
the Company pursuant to the Plan, the Company shall not be obligated, and shall
have no liability for failure, to issue or deliver any Shares under the Plan
unless such issuance or delivery would comply with all Applicable Laws. Such
compliance shall be determined by the Company in consultation with its legal
counsel.
As
a
condition to the exercise of an Option or the issuance of any Shares hereunder,
the Company may require the person exercising such Option or receiving such
Shares to represent and warrant at the time of any such exercise or issuance
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required by law.
17.
Policy
on Purchase and Sale of Shares
.
Each
Director will comply with respect to any Shares issued under the Plan with
all
stock ownership guidelines, including but not limited to the Company’s insider
trading policy, established by the Company from time to time.
18.
Reservation
of Shares
.
The
Company, during the term of this Plan, will at all times reserve and keep
available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.
19.
Award
Agreement
.
Awards
shall be evidenced by written award agreements in such form as the Board shall
approve.
20.
Stockholder
Approval
.
If
required by the Applicable Laws, adoption, amendment or continuance of the
Plan
shall be subject to approval by the stockholders of the Company. Such
stockholder approval shall be obtained in the manner and to the degree required
under the Applicable Laws.
21.
Governing
Law
.
The Plan
and all determinations made and actions taken pursuant hereto shall be governed
by the substantive laws, but not the choice of law rules, of the state of
Delaware.
RITA
MEDICAL SYSTEMS, INC.
2000
DIRECTORS’ STOCK OPTION PLAN
NOTICE
OF STOCK OPTION GRANT
«Optionee»
«OptioneeAddress1»
«OptioneeAddress2»
You
have
been granted an option to purchase Common Stock of RITA Medical Systems, Inc.
(the “
Company
”)
as
follows:
|
|
Date of Grant
|
«GrantDate»
|
|
|
Vesting Commencement
Date
|
«VestingStartDate»
|
|
|
Exercise Price per Share
|
«ExercisePrice»
|
|
|
Total Number of Shares
Granted
|
«SharesGranted»
|
|
|
Total Exercise Price
|
«TotalExercisePrice»
|
|
|
Expiration Date
|
«ExpirDate»
|
|
|
Vesting
Schedule
:
|
This
Option may be exercised, in whole or in part, in accordance with
the
following schedule: [1/36 of the Option Shares shall vest and be
exercisable on each monthly anniversary of the Vesting Commencement
Date]
[100% of the Option Shares shall vest and be exercisable on the
earlier of
(i) the one year anniversary of the date of grant of this Option
and (ii)
the date immediately preceding the date of the annual meeting of
the
Company’s stockholders for the year following the year of grant of this
Option].
|
|
|
Termination
Period
:
|
This
Option may be exercised for 90 days after termination of Optionee’s
Continuous Status as a Director, or such longer period as may be
applicable upon death or Disability of Optionee as provided in the
Plan,
but in no event later than the Expiration Date as provided
above.
|
By
your
signature and the signature of the Company’s representative below, you and the
Company agree that this option is granted under and governed by the terms and
conditions of the 2000 Directors’ Stock Option Plan and the Nonstatutory Stock
Option Agreement, all of which are attached and made a part of this
document.
|
OPTIONEE
:
|
RITA MEDICAL SYSTEMS,
INC.
|
|
|
|
|
______________________________
|
By:______________________________
|
|
Signature
|
|
|
|
Title:_____________________________
|
|
______________________________
|
|
|
Print Name
|
|
RITA
MEDICAL SYSTEMS, INC.
NONSTATUTORY
STOCK OPTION AGREEMENT
1.
Grant
of Option
.
The
Board of Directors of the Company hereby grants to the Optionee named in the
Notice of Stock Option Grant attached as Part I of this Agreement (the
“
Optionee
”),
an
option (the “
Option
”)
to
purchase a number of Shares, as set forth in the Notice of Stock Option Grant,
at the exercise price per share set forth in the Notice of Stock Option Grant
(the “
Exercise
Price
”’),
subject to the terms and conditions of the 2000 Directors’ Stock Option Plan
(the “
Plan
”),
which
is incorporated herein by reference. (Capitalized terms not defined herein
shall
have the meanings ascribed to such terms in the Plan.) In the event of a
conflict between the terms and conditions of the Plan and the terms and
conditions of this Nonstatutory Stock Option Agreement, the terms and conditions
of the Plan shall prevail.
2.
Exercise
of Option
.
(a)
Right
to Exercise
.
This
Option is exercisable during its term in accordance with the Vesting Schedule
set out in the Notice of Stock Option Grant and the applicable provisions of
the
Plan and this Nonstatutory Stock Option Agreement. In the event of Optionee’s
death, disability or other termination of Optionee’s service as a Director, the
exercisability of the Option is governed by the applicable provisions of the
Plan and this Nonstatutory Stock Option Agreement.
(b)
Method
of Exercise
.
This
Option is exercisable by delivery of an exercise notice, in the form attached
as
Exhibit A
(the
“
Exercise
Notice
”),
which
shall state the election to exercise the Option, the number of Shares in respect
of which the Option is being exercised (the “
Exercised
Shares
”),
and
such other representations and agreements as may be required by the Company
pursuant to the provisions of the Plan. The Exercise Notice shall be signed
by
the Optionee and shall be delivered in person or by certified mail to the
Secretary of the Company. The Exercise Notice shall be accompanied by payment
of
the aggregate Exercise Price as to all Exercised Shares. This Option shall
be
deemed to be exercised upon receipt by the Company of such fully executed
Exercise Notice accompanied by such aggregate Exercise Price.
No
Shares
shall be issued pursuant to the exercise of this Option unless such issu-ance
and exercise complies with all relevant provisions of law and the requirements
of any stock exchange or quotation service upon which the Shares are then
listed. Assuming such compliance, for income tax purposes the Exercised Shares
shall be considered transferred to the Optionee on the date the Option is
exercised with respect to such Exercised Shares.
3.
Method
of Payment
.
Payment
of the aggregate Exercise Price shall be by any of the following, or a
combination thereof, at the election of the Optionee:
(a)
cash;
(b)
check;
(c)
delivery
of a properly executed exercise notice together with such other documentation
as
the Administrator and the broker, if applicable, shall require to effect an
exer-cise of the Option and delivery to the Company of the sale or loan proceeds
required to pay the exercise price; or
(d)
surrender
of other Shares which (i) in the case of Shares acquired directly or
indirectly from the Company, have been owned by the Optionee for more than
six
(6) months on the date of surrender, and (ii) have a Fair Market Value
on
the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares.
4.
Non-Transferability
of Option
.
This
Option may not be transferred in any manner otherwise than by will or by the
laws of descent or distribution or pursuant to a domestic relations order (as
defined by the Code or the rules thereunder); provided however that this Option
may be transferred
by
instrument to an inter vivos or testamentary trust in which this Option is
to be
passed to beneficiaries upon the death of the trustor (settlor) or by gift
or
pursuant to domestic relations orders to “Immediate Family Members” (as defined
below) of the Optionee. “
Immediate
Family
”
means
any child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law (including adoptive
relationships), a trust in which these persons have more than fifty percent
of
the beneficial interest, a foundation in which these persons (or the Optionee)
control the management of assets, and any other entity in which these persons
(or the Optionee) own more than fifty percent of the voting
interests
.
and may
be exercised during the lifetime of Optionee only by the Optionee or a
transferee permitted by Section 10 of the Plan. The designation of a
beneficiary by the Optionee does not constitute a transfer. The terms of the
Plan and this Nonstatutory Stock Option Agreement shall be binding upon the
executors, administrators, heirs, successors and assigns of the
Optionee.
5.
Term
of Option
.
This
Option may be exercised only within the term set out in the Notice of Stock
Option Grant, and may be exercised during such term only in accordance with
the
Plan and the terms of this Nonstatutory Stock Option Agreement.
6.
Tax
Consequences
.
Set
forth below is a brief summary of certain federal tax consequences relating
to
this Option under the law in effect as of the date of grant. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
OPTIONEE SHOULD CONSULT HIS OR HER OWN TAX ADVISER BEFORE EXERCISING THIS OPTION
OR DISPOSING OF THE SHARES.
(a)
Exercising
the Option
.
Since
this Option does not qualify as an incentive stock option under Section 422
of the Code, the Optionee may incur regular federal income tax liability upon
exercise. The Optionee will be treated as having received compensation income
(taxable at ordinary income tax rates) equal to the excess, if any, of the
fair
market value of the Exercised Shares on the date of exercise over their
aggregate Exercise Price.
(b)
Disposition
of Shares
.
If the
Optionee holds the Option Shares for more than one year, gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes.
By
your
signature and the signature of the Company’s representative below, you and the
Company agree that this Option is granted under and governed by the terms and
conditions of the Plan and this Nonstatutory Stock Option Agreement. Optionee
has reviewed the Plan and this Nonstatutory Stock Option Agreement in their
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Nonstatutory Stock Option Agreement and fully understands all
provisions of the Plan and Nonstatutory Stock Option Agreement. Optionee hereby
agrees to accept as binding, conclusive and final all decisions or
interpretations of the Administrator upon any questions relating to the Plan
and
Nonstatutory Stock Option Agreement.
|
|
RITA MEDICAL SYSTEMS, INC.
|
|
|
|
|
______________________________
|
By:______________________________
|
|
«Optionee»
|
|
|
|
Title:_____________________________
|
|
|
|
|
|
|
CONSENT
OF SPOUSE
The
undersigned spouse of Optionee has read and hereby approves the terms and
conditions of the Plan and this Nonstatutory Stock Option Agreement. In
consideration of the Company’s granting his or her spouse the right to purchase
Shares as set forth in the Plan and this Nonstatutory Stock Option Agreement,
the undersigned hereby agrees to be irrevocably bound by the terms and
conditions of the Plan and this Nonstatutory Stock Option Agreement and further
agrees that any community property interest shall be similarly bound. The
undersigned hereby appoints the undersigned’s spouse as attorney-in-fact for the
undersigned with respect to any amendment or exercise of rights under the Plan
or this Nonstatutory Stock Option Agreement.
|
|
|
|
|
______________________________
|
|
|
Spouse
of Optionee
|
|
|
|
|
|
|
EXHIBIT
A
NOTICE
OF EXERCISE
To:
RITA
Medical Systems, Inc.
Attn:
Stock
Option Administrator
Subject:
Notice
of Intention to Exercise Stock Option
This
is
official notice that the undersigned (“
Optionee
”)
intends to exercise Optionee’s option to purchase __________ shares of RITA
Medical Systems, Inc. Common Stock, under and pursuant to the Company’s 2000
Directors’ Stock Option Plan and the Nonstatutory Stock Option Agreement dated
_______________, as follows:
|
|
Grant
Number:
|
______________________________
|
|
|
Date
of Purchase:
|
______________________________
|
|
|
Number of Shares:
|
______________________________
|
|
|
Purchase
Price:
|
______________________________
|
|
|
Method
of Payment of Purchase Price:
|
______________________________
|
|
|
Social
Security No.:
|
______________________________
|
|
|
The
shares should be issued as follows:
|
|
|
|
Name:
|
______________________________
|
|
|
Address:
|
______________________________
|
|
|
Signed:
|
______________________________
|
|
|
Date:
|
______________________________
|