EXHIBIT
4.4
I.D.
SYSTEMS, INC.
2007
EQUITY COMPENSATION PLAN
1.
Purposes
of the Plan
.
The
purposes of this I.D. Systems, Inc. 2007 Equity Compensation Plan (the
“
Plan
”)
are:
to attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentives to Employees and Consultants,
and to promote the success of the Company and any Parent or Subsidiary. Options
granted under the Plan may be Incentive Stock Options or Nonstatutory Stock
Options, as determined by the Administrator at the time of grant. Stock Awards
and Unrestricted Shares may also be granted under the Plan.
2.
Definitions
.
As used
herein, the following definitions shall apply:
“
Administrator
”
means
a
Committee which has been delegated the responsibility of administering the
Plan
in accordance with Section 4 of the Plan or, if there is no such Committee,
the
Board.
“
Applicable
Laws
”
means
the requirements relating to the administration of equity compensation plans
under the applicable corporate and securities laws of any of the states in
the
United States, U.S. federal securities laws, the Code, any stock exchange or
quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where Awards are, or
will
be, granted under the Plan.
“
Award
”
means
an Option, a Stock Award and/or the grant of Unrestricted Shares.
“
Board
”
means
the Board of Directors of the Company.
“
Cause
”,
with
respect to any Service Provider, means (unless otherwise determined by the
Administrator) such Service Provider’s (i) conviction of, or plea of nolo
contendere to, a felony or crime involving moral turpitude; (ii) fraud on
or misappropriation of any funds or property of the Company; (iii) personal
dishonesty, willful misconduct, willful violation of any law, rule or regulation
(other than minor traffic violations or similar offenses) or breach of fiduciary
duty which involves personal profit; (iv) willful misconduct in connection
with the Service Provider’s duties; (v)
chronic
use of alcohol, drugs or other similar substances which affects the
Service
Provider
’s
work
performance; or
(vi) material
breach of any provision of any employment, non-disclosure, non-competition,
non-solicitation or other similar agreement executed by the Service Provider
for
the benefit of the Company, all as reasonably determined by the Committee,
which
determination will be conclusive.
“
Code
”
means
the Internal Revenue Code of 1986, as amended.
“
Committee
”
means
a
committee of Directors appointed by the Board in accordance with Section 4
of
the Plan.
“
Common
Stock
”
means
the common stock, par value $.01 per share, of the Company.
“
Company
”
means
I.D. Systems, Inc., a Delaware corporation.
“
Consultant
”
means
any person, including an advisor, engaged by the Company or a Parent or
Subsidiary to render services to such entity, other than an Employee or a
Director.
“
Director
”
means
a
member of the Board.
“
Disability
”
means
total and permanent disability as defined in Section 22(e)(3) of the
Code.
“
Employee
”
means
any person, including officers and Directors, serving as an employee of the
Company or any Parent or Subsidiary. An individual shall not cease to be an
Employee in the case of (i) any leave of absence approved by the Company or
(ii)
transfers between locations of the Company or between the Company, its Parent,
any Subsidiary or any successor. For purposes of an Option initially granted
as
an Incentive Stock Option, if a leave of absence of more than three months
precludes such Option from being treated as an Incentive Stock Option under
the
Code, such Option thereafter shall be treated as a Nonstatutory Stock Option
for
purposes of this Plan. Neither service as a Director nor payment of a director's
fee by the Company shall be sufficient to constitute “employment” by the
Company.
“
Exchange
Act
”
means
the Securities Exchange Act of 1934, as amended.
“
Fair
Market Value
”
means,
as of any date, the value of Common Stock determined as follows:
(i)
if
the
Common Stock is listed on any established stock exchange or a national market
system, including without limitation the Nasdaq National Market or The Nasdaq
SmallCap Market of The Nasdaq Stock Market, the Fair Market Value of a Share
of
Common Stock shall be the closing sales price of a Share of Common Stock as
quoted on such exchange or system for such date (or the most recent trading
day
preceding such date if there were no trades on such date), as reported in
The
Wall Street Journal
or such
other source as the Committee deems reliable;
(ii)
if
the
Common Stock is regularly quoted by a recognized securities dealer but is not
listed in the manner contemplated by clause (i) above, the Fair Market Value
of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock for such date (or the most recent trading day
preceding such date if there were no trades on such date), as reported in
The
Wall Street Journal
or
such
other source as the Committee deems reliable; or
(iii)
if
neither clause (i) above nor clause (ii) above applies, the Fair Market Value
shall be determined in good faith by the Administrator based on the reasonable
application of a reasonable valuation method.
“
Incentive
Stock Option
”
means
an Option intended to qualify as an incentive stock option within the meaning
of
Section 422 of the Code and the regulations promulgated thereunder.
“
Nonstatutory
Stock Option
”
means
an Option not intended to qualify as an Incentive Stock Option.
“
Notice
of Grant
”
means
a
written or electronic notice evidencing certain terms and conditions of an
individual Option grant, Stock Award grant or grant of Unrestricted Shares.
The
Notice of Grant applicable to Stock Options shall be part of the Option
Agreement.
“
Option
”
means
a
stock option granted pursuant to the Plan.
“
Option
Agreement
”
means
an agreement between the Company and an Optionee evidencing the terms and
conditions of an individual Option grant. Each Option Agreement shall be subject
to the terms and conditions of the Plan.
“
Optioned
Stock
”
means
the Common Stock subject to an Option.
“
Optionee
”
means
the holder of an outstanding Option granted under the Plan.
“
Parent
”
means
a
“parent corporation” of the Company (or, in the context of Section 15(c) of the
Plan, of a successor corporation), whether now or hereafter existing, as defined
in Section 424(e) of the Code.
“
Participant
”
shall
mean any Service Provider who holds an Option, Restricted Stock, a Stock Award
or Unrestricted Shares granted or issued pursuant to the Plan.
“
Rule
16b-3
”
means
Rule 16b-3 of the Exchange Act or any successor to such Rule 16b-3, as such
rule
is in effect when discretion is being exercised with respect to the
Plan.
“
Section
16(b)
”
means
Section 16(b) of the Exchange Act.
“
Service
Provider
”
means
an Employee or Consultant.
“
Share
”
means
a
share of the Common Stock, as adjusted in accordance with Section 15 of the
Plan.
“
Stock
Award
”
means
an Award of Shares pursuant to Section 11 of the Plan or an award of Restricted
Stock Units pursuant to Section 12 of the Plan.
“
Stock
Award Agreement
”
means
an agreement, approved by the Administrator, providing the terms and conditions
of a Stock Award.
“
Stock
Award Shares
”
means
Shares subject to a Stock Award.
“
Stock
Awardee
”
means
the holder of an outstanding Stock Award granted under the Plan
“
Subsidiary
”
means
a
"subsidiary corporation" of the Company (or, in the context of Section 15(c)
of
the Plan, of a successor corporation), whether now or hereafter existing, as
defined in Section 424(f) of the Code.
“
Unrestricted
Shares
”
means
a
grant of Shares made on an unrestricted basis pursuant to Section 14 of the
Plan.
3.
Stock
Subject to the Plan
.
Subject
to the provisions of Section 15 of the Plan, the maximum aggregate number of
Shares that may be issued under the Plan is 2,000,000 Shares. The Shares may
be
authorized but unissued, or reacquired, shares of Common Stock. If an Option
expires or becomes unexercisable without having been exercised in full or is
canceled or terminated, or if any Shares of Restricted Stock or Shares
underlying a Stock Award are forfeited or reacquired by the Company, the Shares
that were subject thereto shall be added back to the Shares available for
issuance under the Plan.
4.
Administration
of the Plan
.
(a)
Procedure
.
(i)
Multiple
Administrative Bodies
.
Different Committees with respect to different groups of Service Providers
may
administer the Plan.
(ii)
Section
162(m)
.
To the
extent that the Administrator determines it to be desirable to qualify Awards
granted hereunder as “performance-based compensation” within the meaning of
Section 162(m) of the Code, the Plan shall be administered by a Committee of
two
or more “outside directors” within the meaning of Section 162(m) of the Code and
the regulations promulgated thereunder.
(iii)
Rule
16b-3
.
If the
Company is subject to Section 16(b), the transactions contemplated hereunder
shall (from the date that the Company is first subject to Section 16(b)), be
structured to satisfy the requirements for exemption under Rule
16b-3.
(iv)
Other
Administration
.
Other
than as provided above, the Plan shall be administered by (A) the Board or
(B) a
Committee, which committee shall be constituted to satisfy Applicable
Laws.
(b)
Powers
of the Administrator
.
Subject
to the provisions of the Plan, and in the case of a Committee, subject to 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;
(ii)
to
select
the Service Providers to whom Options, Stock Awards and Unrestricted Shares
may
be granted hereunder;
(iii)
to
determine the number of shares of Common Stock to be covered by each Award
granted hereunder;
(iv)
to
approve forms of agreement for use under the Plan;
(v)
to
determine the terms and conditions, not inconsistent with the terms of the
Plan
or of any Award granted hereunder. Such terms and conditions include, but are
not limited to, the exercise price, the time or times when Options may be
exercised (which may be based on performance criteria), any vesting,
acceleration or waiver of forfeiture provisions, and any restriction or
limitation regarding any Option or Stock Award, or the Shares of Common Stock
relating thereto, based in each case on such factors as the Administrator,
in
its sole discretion, shall determine;
(vi)
to
construe and interpret the terms of the Plan, Awards granted pursuant to the
Plan and agreements entered into pursuant to the Plan;
(vii)
to
prescribe, amend and rescind rules and regulations relating to the Plan,
including rules and regulations relating to sub-plans established for the
purpose of qualifying for preferred tax treatment under foreign tax
laws;
(viii)
to
modify
or amend each Award (subject to Section 19(c) of the Plan), including the
discretionary authority to extend the post-termination exercisability period
of
Options longer than is otherwise provided for in the Plan;
(ix)
to
allow
grantees to satisfy withholding tax obligations by having the Company withhold
from the Shares to be issued upon exercise of an Option that number of Shares
having a Fair Market Value equal to the amount required to be withheld, provided
that withholding is calculated at the minimum statutory withholding level.
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. All determinations
to
have Shares withheld for this purpose shall be made by the Administrator in
its
discretion;
(x)
to
reduce
the exercise price of any Option to the then current Fair Market Value if the
Fair Market Value of the Common Stock covered by such Option shall have declined
since the date the Option was granted;
(xi)
to
authorize any person to execute on behalf of the Company any agreement entered
into pursuant to the Plan and any instrument required to effect the grant of
an
Award previously granted by the Administrator; and
(xii)
to
make
all other determinations deemed necessary or advisable for administering the
Plan.
(c)
Effect
of Administrator's Decision
.
The
Administrator's decisions, determinations and interpretations shall be final
and
binding on all holders of Awards and Restricted Stock. None of the Board, the
Committee or the Administrator, nor any member or delegate thereof, shall be
liable for any act, omission, interpretation, construction or determination
made
in good faith in connection with the Plan, and each of the foregoing shall
be
entitled in all cases to indemnification and reimbursement by the Company in
respect of any claim, loss, damage or expense (including without limitation
reasonable attorneys’ fees) arising or resulting therefrom to the fullest extent
permitted by law and/or under any directors’ and officers’ liability insurance
coverage which may be in effect from time to time.
5.
Eligibility
.
Nonstatutory Stock Options, Stock Awards and Unrestricted Shares may be granted
to Service Providers. Incentive Stock Options may be granted only to Employees.
Notwithstanding anything contained herein to the contrary, an Award may be
granted to a person who is not then a Service Provider; provided, however,
that
the grant of such Award shall be conditioned upon such person becoming a Service
Provider at or prior to the time of the execution of the agreement evidencing
such Award.
6
.
Limitations
.
(a)
Each
Option shall be designated in the Option Agreement as either an Incentive Stock
Option or a Nonstatutory Stock Option. However, notwithstanding such
designation,
if
a
single Employee becomes eligible in any given year to exercise Incentive Stock
Options for Shares having a Fair Market Value in excess of $100,000, those
Options representing the excess shall be treated as Nonstatutory Stock Options.
In the previous sentence, “Incentive Stock Options” include Incentive Stock
Options granted under any plan of the Company or any Parent or any
Subsidiary.
For
the
purpose of deciding which Options apply to Shares that “exceed” the $100,000
limit, Incentive Stock Options shall be taken into account in the same order
as
granted.
The
Fair
Market Value of the Shares shall be determined as of the time the Option with
respect to such Shares is granted.
(b)
Neither
the Plan nor any Award nor any agreement entered into pursuant to the Plan
shall
confer upon a Participant any right with respect to continuing the grantee's
relationship as a Service Provider with the Company, nor shall they interfere
in
any way with the Participant's right or the Company's right to terminate such
relationship at any time, with or without cause.
(c)
No
Service Provider shall be granted, in any fiscal year of the Company, Options
to
purchase more than 300,000 Shares (subject to adjustment in accordance with
Section 15).
7.
Term
of the Plan
.
Subject
to Section 23 of the Plan, the Plan shall become effective upon its adoption
by
the Board. It shall continue in effect for a term of ten (10) years unless
terminated earlier under Section 19 of the Plan.
8.
Term
of Options
.
The
term of each Option shall be stated in the applicable Option Agreement. In
the
case of an Incentive Stock Option, the term shall be ten (10) years from the
date of grant or such shorter term as may be provided in the applicable Option
Agreement. However, in the case of an Incentive Stock Option granted to an
Optionee who, at the time the Incentive Stock Option is granted, owns, directly
or indirectly, stock representing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any Parent
or
Subsidiary, the term of the Incentive Stock Option shall be five (5) years
from
the date of grant or such shorter term as may be provided in the applicable
Option Agreement.
9.
Option
Exercise Price; Exercisability
.
(a)
Exercise
Price
.
The per
share exercise price for the Shares to be issued pursuant to exercise of an
Option shall be determined by the Administrator, subject to the following:
(i)
In
the
case of an Incentive Stock Option
(A)
granted
to an Employee who, at the time the Incentive Stock Option is granted, 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, 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 Employee other than an Employee described in paragraph (A) immediately
above, 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
determined by the Administrator; provided, however, that the per Share exercise
price of a Nonstatutory Stock Option shall be no less than 100% of the Fair
Market Value per Share on the date of grant as (determined by the Administrator
in good faith) in the case of a Nonstatutory Stock Option intended to qualify
as
"performance-based compensation" within the meaning of Section 162(m) of the
Code.
(iii)
Notwithstanding
the foregoing, Options may be granted with a per Share exercise price of less
than 100% (or 110%, if clause (i)(A) above applies) of the Fair Market Value
per
Share on the date of grant pursuant to a merger or other comparable corporate
transaction.
(b)
Exercise
Period and Conditions
.
At the
time that an Option is granted, the Administrator shall fix the period within
which the Option may be exercised and shall determine any conditions that must
be satisfied before the Option may be exercised.
10.
Exercise
of Options; Consideration.
(a)
Procedure
for Exercise; Rights as a Shareholder
.
Any
Option granted hereunder shall be exercisable according to the terms of the
Plan
and at such times and under such conditions as determined by the Administrator
and set forth in the Option Agreement. Unless the Administrator provides
otherwise, vesting of Options granted hereunder shall be tolled during any
unpaid leave of absence. An Option may not be exercised for a fraction of a
Share. An Option shall be deemed exercised when the Company receives: (i)
written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by
the
Administrator and permitted by the Option Agreement and Section 10(e) of the
Plan. Shares issued upon exercise of an Option shall be issued in the name
of
the Optionee. Until the Shares are issued (as evidenced by the appropriate
entry
on the books of the Company or of a duly authorized transfer agent of the
Company), no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock, notwithstanding
the
exercise of the Option. The Company shall issue (or cause to be issued) such
Shares promptly after the Option is exercised. No adjustment will be made for
a
dividend or other right for which the record date is prior to the date the
Shares are issued, except as provided in Section 15 of the Plan. Exercising
an
Option in any manner shall decrease the number of Shares thereafter 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 Relationship as a Service Provider
.
If an
Optionee ceases to be a Service Provider, other than upon the Optionee's death
or Disability or upon a termination of such Optionee’s employment with Cause,
the Optionee may exercise his or her Option within such period of time as is
specified in the Option Agreement to the extent that the Option is vested on
the
date of termination (but in no event later than the expiration of the term
of
such Option as set forth in the Option Agreement). In the absence of a specified
time in the Option Agreement and except as otherwise provided in Sections 10(c),
10(d) and 10(e) of this Plan, the Option shall remain exercisable for three
months following the Optionee's termination (but in no event later than the
expiration of the term of such Option). If, on the date of termination, the
Optionee is not vested as to his or her entire Option, the Shares covered by
the
unvested portion of the Option shall revert to the Plan. If, after termination,
the Optionee does not exercise his or her Option in full within the time
specified by the Administrator, the unexercised portion of the Option shall
terminate, and the Shares covered by such unexercised portion of the Option
shall revert to the Plan. An Optionee who changes his or her status as a Service
Provider (e.g., from being an Employee to being a Consultant) shall not be
deemed to have ceased being a Service Provider for purposes of this Section
10(b), nor shall a transfer of employment among the Company and any Subsidiary
be considered a termination of employment; however, if an Optionee owning
Incentive Stock Options ceases being an Employee but continues as a Service
Provider, such Incentive Stock Options shall be deemed to be Nonstatutory
Options three months after the date of such cessation.
(c)
Disability
of an Optionee
.
If an
Optionee ceases to be a Service Provider as a result of the Optionee's
Disability, the Optionee may exercise his or her Option within such period
of
time as is specified in the Option Agreement to the extent the Option is vested
on the date of termination (but in no event later than the expiration of the
term of such Option as set forth in the Option Agreement). In the absence of
a
specified time in the Option Agreement, the Option shall remain exercisable
for
twelve (12) months following the Optionee’s termination (but in no event later
than the expiration of the term of such Option). If, on the date of termination,
the Optionee is not vested as to his or her entire Option, the Shares covered
by
the unvested portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option in full within
the
time specified herein, the unexercised portion of the Option shall terminate,
and the Shares covered by such unexercised portion of the Option shall revert
to
the Plan.
(d)
Death
of an Optionee
.
If an
Optionee dies while a Service Provider, the Option may be exercised within
such
period of time as is specified in the Option Agreement (but in no event later
than the expiration of the term of such Option as set forth in the Notice of
Grant), by the Optionee's estate or by a person who acquires the right to
exercise the Option by bequest or inheritance, but only to the extent that
the
Option is vested on the date of death. In the absence of a specified time in
the
Option Agreement, the Option shall remain exercisable for twelve (12) months
following the Optionee's death ((but in no event later than the expiration
of
the term of such Option). If, at the time of death, the Optionee is not vested
as to his or her entire Option, the Shares covered by the unvested portion
of
the Option shall revert to the Plan. If the Option is not so exercised in full
within the time specified herein, the unexercised portion of the Option shall
terminate, and the Shares covered by the unexercised portion of such Option
shall revert to the Plan.
(e)
Termination
for Cause.
If
a
Service Provider’s relationship with the Company is terminated for Cause, then,
unless otherwise provided in such Service Provider’s Option Agreement, such
Service Provider shall have no right to exercise any of such Service Provider’s
Options at any time on or after the effective date of such termination.
(f)
Form
of Consideration
.
The
Administrator shall determine the acceptable form of consideration for
exercising an Option, including the method of payment. In the case of an
Incentive Stock Option, the Administrator shall determine the acceptable form
of
consideration at the time of grant. Such consideration may consist entirely
of:
(i)
cash;
(ii)
check;
(iii)
other
Shares which (A) in the case of Shares acquired upon exercise of an option
at a
time when the Company is subject to Section 16(b), have been owned by the
Optionee for more than six months on the date of surrender, and (B) have a
Fair
Market Value on the date of surrender equal to the aggregate exercise price
of
the Shares as to which said Option shall be exercised;
(iv)
consideration
received by the Company under a cashless exercise program implemented by the
Company in connection with the Plan;
(v)
a
reduction in the amount of any Company liability to the Optionee, including
any
liability attributable to the Optionee's participation in any Company-sponsored
deferred compensation program or arrangement;
(vi)
any
combination of the foregoing methods of payment; or
(vii)
such
other consideration and method of payment for the issuance of Shares to the
extent permitted by Applicable Laws.
11.
Stock
Awards
.
The
Administrator may, in its sole discretion, grant (or sell at par value or such
higher purchase price as it determines) Shares to any Service Provider subject
to such terms and conditions as the Administrator sets forth in a Stock Award
Agreement evidencing such grant. Stock Awards may be granted or sold in respect
of past services or other valid consideration or in lieu of any cash
compensation otherwise payable to such individual. The grant of Stock Awards
under this Section 11 shall be subject to the following provisions:
(a)
At
the time a
Stock Award under this Section 11 is made, the Administrator shall establish
a
vesting period (the "Restricted Period") applicable to the Stock Award Shares
subject to such Stock Award. The Administrator may, in its sole discretion,
at
the time a grant is made, prescribe restrictions in addition to the expiration
of the Restricted Period, including the satisfaction of corporate or individual
performance objectives. None of the Stock Award Shares may be sold, transferred,
assigned, pledged or otherwise encumbered or disposed of during the Restricted
Period applicable to such Stock Award Shares or prior to the satisfaction of
any
other restrictions prescribed by the Administrator with respect to such Stock
Award Shares.
(b)
The
Company
shall issue, in the name of each Service Provider to whom Stock Award Shares
have been granted, stock certificates representing the total number of Stock
Award Shares granted to such person, as soon as reasonably practicable after
the
grant. The Company, at the direction of the Administrator, shall hold such
certificates, properly endorsed for transfer, for the Stock Awardee's benefit
until such time as the Stock Award Shares are forfeited to the Company, or
the
restrictions lapse.
(c)
Unless
otherwise provided by the Administrator, holders of Stock Award Shares shall
have the right to vote such Shares and have the right to receive any cash
dividends with respect to such Shares. All distributions, if any, received
by a
Stock Awardee with respect to Stock Award Shares as a result of any stock split,
stock distribution, combination of shares, or other similar transaction shall
be
subject to the restrictions of this Section 11.
(d)
Any
Stock
Award Shares granted to a Service Provider pursuant to the Plan shall be
forfeited if the Stock Awardee voluntarily terminates employment with the
Company or its subsidiaries or resigns or voluntarily terminates his consultancy
arrangement or directorship with the Company or its subsidiaries, or if the
Stock Awardee's employment or the consultant's consultancy arrangement or
directorship is terminated for Cause prior to the expiration or termination
of
the applicable Restricted Period and the satisfaction of any other conditions
applicable to such Stock Award Shares. Upon such forfeiture, the Stock Award
Shares that are forfeited shall be retained in the treasury of the Company
and
be available for subsequent awards under the Plan. If the Stock Awardee's
employment, consultancy arrangement or directorship terminates for any other
reason, the Stock Award Shares held by such person shall be forfeited, unless
the Administrator, in its sole discretion, shall determine
otherwise.
(e)
Upon
the
expiration or termination of the Restricted Period and the satisfaction of
any
other conditions prescribed by the Committee, the restrictions applicable to
the
Stock Award Shares shall lapse and, at the Stock Awardee’s request, a stock
certificate for the number of Stock Award Shares with respect to which the
restrictions have lapsed shall be delivered, free of all such restrictions,
to
the Stock Awardee or his beneficiary or estate, as the case may be.
12.
Restricted
Stock Units
.
The
Committee may, in its sole discretion, grant Restricted Stock Units to a Service
Provider subject to such terms and conditions as the Committee sets forth in
a
Stock Award Agreement evidencing such grant. “Restricted Stock Units” are Awards
denominated in units evidencing the right to receive Shares of Common Stock,
which may vest over such period of time and/or upon satisfaction of such
performance criteria or objectives as is determined by the Committee at the
time
of grant and set forth in the applicable Stock Award Agreement, without payment
of any amounts by the Stock Awardee thereof (except to the extent required
by
law). Prior to delivery of shares of Common Stock with respect to an award
of
Restricted Stock Units, the Stock Awardee shall have no rights as a stockholder
of the Company.
Upon
satisfaction and/or achievement of the applicable vesting requirements relating
to an award of Restricted Stock Units, the Stock Awardee shall be entitled
to
receive a number of shares of Common Stock that are equal to the number of
Restricted Stock Units that became vested. To the extent, if any, set forth
in
the applicable Stock Award Agreement, cash dividend
equivalents
may be paid during, or may be accumulated and paid at the end of, the applicable
vesting period, as determined by the Committee.
Unless
otherwise provided by the Stock Award Agreement, any Restricted Stock Units
granted to a Service Provider pursuant to the Plan shall be forfeited if the
Stock Awardee terminates employment or his or her consultancy arrangement with
the Company or its subsidiaries terminates for any reason prior to the
expiration or termination of the applicable vesting period and/or the
achievement of such other vesting conditions applicable to the award.
Prior
to
the delivery of any shares of Common Stock in connection with an award of
Restricted Stock Units, the Stock Awardee shall pay or make adequate provision
acceptable to the Company for the satisfaction of the statutory minimum
prescribed amount of federal and state income tax and other withholding
obligations of the Company, including by having the Company withhold from the
number of shares of Common Stock otherwise deliverable in connection with an
award of Restricted Stock Units, a number of shares of Common Stock having
a
Fair Market Value equal to an amount sufficient to satisfy such tax withholding
obligations.
13.
Unrestricted
Shares
.
The
Administrator may grant Unrestricted Shares in accordance with the following
provisions:
(a)
The
Administrator may cause the Company to grant Unrestricted Shares to Service
Providers at such time or times, in such amounts and for such reasons as the
Administrator, in its sole discretion, shall determine. No payment shall be
required for Unrestricted Shares.
(b)
The
Company
shall issue, in the name of each Service Provider to whom Unrestricted Shares
have been granted, stock certificates representing the total number of
Unrestricted Shares granted to such individual, and shall deliver such
certificates to such Service Provider as soon as reasonably practicable after
the date of grant or on such later date as the Administrator shall determine
at
the time of grant.
14.
Non-Transferability
.
Unless
determined otherwise by the Administrator, an Option 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 and may be exercised, during
the
lifetime of the Optionee, only by the Optionee. If the Administrator makes
an
Option transferable, such Option shall contain such additional terms and
conditions as the Administrator deems appropriate. Notwithstanding the
foregoing, the Administrator, in its sole discretion, may provide in the Option
Agreement regarding a given Option that the Optionee may transfer, without
consideration for the transfer, his or her Nonstatutory Stock Options to members
of his or her immediate family, to trusts for the benefit of such family
members, or to partnerships in which such family members are the only partners,
provided that the transferee agrees in writing with the Company to be bound
by
all of the terms and conditions of this Plan and the applicable Option. During
the period when Shares of Restricted Stock and Stock Award Shares are restricted
(by virtue of vesting schedules or otherwise), such Shares 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.
15.
Adjustments
Upon Changes in Capitalization, Dissolution, Merger or Asset
Sale
.
(a)
Changes
in Capitalization
.
Subject
to any required action by the shareholders of the Company, the number of Shares
of Common Stock covered by each outstanding Option and Stock Award, the number
of Shares of Restricted Stock outstanding and the number of Shares of Common
Stock which have been authorized for issuance under the Plan but as to which
no
Options or Stock Awards have yet been granted or which have been returned to
the
Plan upon cancellation or expiration of
an
Option
or Stock Award, 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, 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 Award hereunder.
(b)
Dissolution
or Liquidation
.
In the
event of the proposed dissolution or liquidation of the Company, the
Administrator shall notify each Optionee as soon as practicable prior to the
effective date of such proposed dissolution or liquidation. The Administrator
in
its discretion may provide for an Optionee to have the right to exercise his
or
her Option until ten (10) days prior to such transaction as to all of the Shares
covered thereby, including Shares as to which an applicable Option would not
otherwise be exercisable. In addition, the Administrator may provide that any
Company repurchase option applicable to any Shares purchased upon exercise
of an
Option or applicable to any Stock Award shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time and
in
the manner contemplated. To the extent it has not been previously exercised,
an
Option will terminate immediately prior to the consummation of such proposed
action.
(c)
Merger
or Asset Sale
.
In the
event of a merger or consolidation of the Company with or into another
corporation or any other entity or the exchange of substantially all of the
outstanding stock of the Company for shares of another entity or other property
in which, after any such transaction the prior shareholders of the Company
own
less than fifty percent (50%) of the voting shares of the continuing or
surviving entity, or in the event of the sale of all or substantially all of
the
assets of the Company, (any such event, a “Change of Control”), then, absent a
provision to the contrary in any particular Option Agreement or Stock Award
(in
which case the terms of such Option Agreement or Stock Award shall supercede
each of the provisions of this Section 15(c) which are inconsistent with such
Option Agreement or Stock Award), the Optionees shall fully vest in and have
the
right to exercise each outstanding Option as to all of the Optioned Stock
covered thereby, including Shares which would not otherwise be vested or
exercisable, and all vesting periods under Stock Awards shall be deemed to
have
been satisfied. In the event that the Administrator determines that the
successor corporation or a Parent or a Subsidiary of the successor corporation
has refused to assume or substitute an equivalent option, then the Administrator
shall notify all Optionees that all outstanding Options shall be fully
exercisable for a period of fifteen (15) days from the date of such notice
and
that any Options that are not exercised within such period shall terminate
upon
the expiration of such period. For the purposes of this paragraph, all
outstanding Options shall be considered assumed if, following the consummation
of the Change of Control, the Option confers the right to purchase or receive,
for each Share of Optioned Stock subject to the Option immediately prior to
the
consummation of the Change of Control, the consideration (whether stock, cash,
or other property) received in the Change of Control by holders of Common Stock
for each Share held on the effective date of the transaction (and if holders
were offered a choice of consideration, the type chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the Change of Control is 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
the exercise of the Option, for each Share of Optioned Stock subject to the
Option, to be solely common stock of the successor corporation or its Parent
or
Subsidiary equal in fair market value to the per share consideration received
by
holders of Common Stock in the Change of Control.
16.
Substitute
Options
.
In the
event that the Company, directly or indirectly, acquires another entity, the
Board may authorize the issuance of stock options (“Substitute Options”) to the
individuals performing services for the acquired entity in substitution of
stock
options previously granted to those individuals in connection with their
performance of services for such entity upon such terms and conditions as the
Board shall determine, taking into account the conditions of Code Section
424(a), as from time to time amended or superceded, in the case of a Substitute
Option that is intended to be an Incentive Stock Option. Shares of capital
stock
underlying Substitute Stock Options shall not constitute Shares issued pursuant
to the Plan for any purpose.
17.
Date
of Grant
.
The
date of grant of an Option, Stock Award or Unrestricted Share shall be, for
all
purposes, the date on which the Administrator makes the determination granting
such Option, Stock Award or Unrestricted Share, or such other later date as
is
determined by the Administrator. Notice of the determination shall be provided
to each grantee within a reasonable time after the date of such
grant.
18.
Amendment
and Termination of the Plan
.
(a)
Amendment
and Termination
.
The
Board may at any time amend, alter, suspend or terminate the Plan.
(b)
Shareholder
Approval
.
The
Company shall obtain shareholder approval of any Plan amendment to the extent
necessary to comply with Applicable Laws.
(c)
Effect
of Amendment or Termination
.
No
amendment, alteration, suspension or termination of the Plan shall impair the
rights of any grantee, unless mutually agreed otherwise between the grantee
and
the Administrator, which agreement must be in writing and signed by the grantee
and the Company. Termination of the Plan shall not affect the Administrator's
ability to exercise the powers granted to it hereunder with respect to Awards
granted under the Plan prior to the date of such termination.
19.
Conditions
Upon Issuance of Shares
.
(a)
Legal
Compliance
.
Shares
shall not be issued in connection with the grant of any Stock Award or
Unrestricted Share or the exercise of any Option unless such grant or the
exercise of such Option and the issuance and delivery of such Shares shall
comply with Applicable Laws and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
(b)
Investment
Representations
.
As a
condition to the grant of any Stock Award or Unrestricted Share or the exercise
of any Option, the Company may require the person receiving such Award or
exercising such Option to represent and warrant at the time of any such exercise
or grant 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.
(c)
Additional
Conditions
.
The
Administrator shall have the authority to condition the grant of any Award
in
such other manner that the Administrator determines to be appropriate, provided
that such condition is not inconsistent with the terms of the Plan. Such
conditions may include, among other things, obligations of recipients to execute
lock-up agreements and shareholder agreements in the future.
(d)
Trading
Policy Restrictions
.
Option
exercises and other Awards under the Plan shall be subject to the terms and
conditions of any insider trading policy established by the Company or the
Administrator.
20.
Inability
to Obtain Authority
.
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.
21.
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.
22.
Shareholder
Approval
.
The
Plan shall be subject to approval by the shareholders of the Company within
twelve (12) months after the date the Plan is adopted. Such shareholder approval
shall be obtained in the manner and to the degree required under Applicable
Laws. Notwithstanding any provision in the Plan to the contrary, any exercise
of
an Option granted before the Company has obtained shareholder approval of the
Plan in accordance with this Section 22 shall be conditioned upon obtaining
such
shareholder approval of the Plan in accordance with this Section
22.
23.
Withholding;
Notice of Sale
.
The
Company shall be entitled to withhold from any amounts payable to an Employee
any amounts which the Company determines, in its discretion, are required to
be
withheld under any Applicable Law as a result of any action taken by a holder
of
an Award.
24.
Governing
Law
.
This
Plan shall be governed by the laws of the state of Delaware, without regard
to
conflict of law principles.