EXHIBIT 10.11

 

NVIDIA Corporation

2000 Nonstatutory Equity Incentive Plan

 

Adopted August 1, 2000

Amended December 22, 2000

Amended January 2, 2001

Amended January 28, 2001

Adjusted for 2-for-1 Stock Split on September 17, 2001

Amended November 6, 2001

Amended August 16, 2002

Amended November 7, 2002

Shareholder Approval Not Required

Termination Date: None

 

1.    PURPOSES.  

 

(a)    The purpose of the Plan is to provide a means by which eligible Employees
and Consultants to the Company and its Affiliates may be given an opportunity to
benefit from increases in value of the stock of the Company through the granting
of (i) Nonstatutory Stock Options, (ii) stock bonuses, and (iii) rights to
purchase restricted stock.

 

(b)    The Company, by means of the Plan, seeks to retain the services of
persons who are now Employees or Consultants to the Company or its Affiliates,
to secure and retain the services of new Employees and Consultants, and to
provide incentives for such persons to exert maximum efforts for the success of
the Company and its Affiliates.

 

(c)    The Company intends that the Stock Awards issued under the Plan shall, in
the discretion of the Board be either (i) Options granted pursuant to Section 6
hereof, or (ii) stock bonuses or rights to purchase restricted stock granted
pursuant to Section 7 hereof. All Options shall be designated Nonstatutory Stock
Options at the time of grant, and in such form as issued pursuant to Section 6.

 

2.    DEFINITIONS.  

 

(a)    Affiliate means any parent corporation or subsidiary corporation, whether
now or hereafter existing, as those terms are defined in Sections 424(e) and (f)
respectively, of the Code.

 

(b)    Board means the Board of Directors of the Company.

 

(c)    Code means the Internal Revenue Code of 1986, as amended.

 

(d)    Common Stock means the common stock of the Company.

 

(e)    Committee means a committee appointed by the Board in accordance with
subsection 3(c) of the Plan.

 

(f)    Company means NVIDIA Corporation.

 

(g)    Consultant means any person, including an advisor, engaged by the Company
or an Affiliate to render consulting services and who is compensated for such
services, provided that the term “Consultant” shall not

 

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include Directors who are paid only a director’s fee by the Company or who are
not compensated by the Company for their services as Directors. The term
“Consultant” shall include members of the Board of Directors of an Affiliate.

 

(h)    Continuous Service means that the Participant’s service with the Company
or an Affiliate, whether as an Employee or Consultant, is not interrupted or
terminated. The Participant’s Continuous Service shall not be deemed to have
terminated merely because of a change in the capacity in which the Participant
renders service to the Company or an Affiliate as an Employee or Consultant or a
change in the entity for which the Participant renders such service, provided
that there is no interruption or termination of the Participant’s Continuous
Service. For example, a change in status from an Employee of the Company to a
Consultant or a director of an Affiliate will not constitute an interruption of
Continuous Service as an Employee. The Board or the chief executive officer of
the Company, in that party’s sole discretion, may determine whether Continuous
Service shall be considered interrupted in the case of: (i) any leave of absence
approved by the Board or the chief executive officer of the Company, including
sick leave, military leave, or any other personal leave; or (ii) transfers
between the Company, its Affiliates or their successors.

 

(i)    Diluted Shares Outstanding means, as of any date, (i) the number of
outstanding shares of Common Stock of the Company on such Calculation Date (as
defined in Section 4(a) herein), plus (ii) the number of shares of Common Stock
issuable upon such Calculation Date assuming the conversion of all outstanding
Preferred Stock and convertible notes, plus (iii) the additional number of
dilutive Common Stock equivalent shares outstanding as the result of any options
or warrants outstanding during the fiscal year, calculated using the treasury
stock method.

 

(j)    Director means a member of the Board.

 

(k)    Disability means the permanent and total disability of a person within
the meaning of Section 22(e)(3) of the Code.

 

(l)    Employee means any person, including an Officer or Director, employed by
the Company or any Affiliate. Neither service as a Director nor payment of a
director’s fee by the Company shall be sufficient to constitute “employment” by
the Company.

 

(m)    Exchange Act means the Securities Exchange Act of 1934, as amended.

 

(n)    Fair Market Value means, as of any date, the value of the Common Stock
determined as follows:

 

(i)    If the Common Stock is listed on any established stock exchange or a
national market system, including without limitation the Nasdaq National Market,
the Fair Market Value of a share of Common Stock shall be the closing sales
price for such stock (or the closing bid, if no sales were reported) as quoted
on such system or exchange (or the exchange with the greatest volume of trading
in Common Stock) on the last market trading day prior to the day of
determination, as reported in the Wall Street Journal or such other source as
the Board deems reliable;

 

(ii)    If the Common Stock is quoted on the Nasdaq Small-Cap Market or is
regularly quoted by a recognized securities dealer but selling prices are not
reported, the Fair Market Value of a share of Common Stock shall be the mean
between the bid and asked prices for the Common Stock on the last market trading
day prior to the day of determination, as reported in the Wall Street Journal or
such other source as the Board deems reliable;

 

(iii)    In the absence of an established market for the Common Stock, the Fair
Market Value shall be determined in good faith by the Board.

 

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(o)    Listing Date means the first date upon which any security of the Company
is listed (or approved for listing) upon notice of issuance on any securities
exchange, or designated (or approved for designation) upon notice of issuance as
a national market security on an interdealer quotation system if such securities
exchange or interdealer quotation system has been certified in accordance with
the provisions of Section 25100(o) of the California Corporate Securities Law of
1968.

 

(p)    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.

 

(q)    Nonstatutory Stock Option means an Option not intended to qualify as an
Incentive Stock Option.

 

(r)    Officer means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder. Officer also means a person who possesses the authority
of an “officer” as that term is used in Rule 4460(i)(1)(A) of the Rules of the
National Association of Securities Dealers, Inc. For purposes of the Plan, a
person in the position of “Vice President” or higher shall be classified as an
“Officer” unless the Board expressly finds that such person does not possess the
authority of an “officer” as that term is used in Rule 4460(i)(1)(A) of the
Rules of the National Association of Securities Dealers, Inc.

 

(s)    Option means a stock option granted pursuant to the Plan.

 

(t)    Option Agreement means a written agreement between the Company and an
Optionholder evidencing the terms and conditions of an individual Option grant.
?Each Option Agreement shall be subject to the terms and conditions of the Plan.

 

(u)    Optionholder means an Employee or Consultant who holds an outstanding
Option.

 

(v)    Plan means this NVIDIA Corporation 2000 Nonstatutory Equity Incentive
Plan.

 

(w)    Stock Award means any right granted under the Plan, including any Option,
any stock bonus, and any right to purchase restricted stock.

 

(x)    Stock Award Agreement means a written agreement 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.

 

(y)    Ten Percent Shareholder means a person who owns (or is deemed to own
pursuant to Section 424(d) of the Code) stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or of any of its Affiliates.

 

3.    ADMINISTRATION.  

 

(a)    The Plan shall be administered by the Board unless and until the Board
delegates administration to a Committee, as provided in subsection 3(c).

 

(b)    The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:

 

(i)    To determine from time to time which of the persons eligible under the
Plan shall be granted Stock Awards; when and how each Stock Award shall be
granted; whether a Stock Award will be a Nonstatutory Stock Option, a stock
bonus, a right to purchase restricted stock, or a combination of the foregoing;
the

 

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provisions of each Stock Award granted (which need not be identical), including
the time or times when a person shall be permitted to receive stock pursuant to
a Stock Award; and the number of shares with respect to which a Stock Award
shall be granted to each such person.

 

(ii)    To construe and interpret the Plan and Stock Awards granted under it,
and to establish, amend and revoke rules and regulations for its administration.
The Board, in the exercise of this power, may correct any defect, omission or
inconsistency in the Plan or in any Stock Award Agreement, in a manner and to
the extent it shall deem necessary or expedient to make the Plan fully
effective.

 

(iii)    To amend the Plan or a Stock Award as provided in Section 13.

 

(iv)    Generally, to exercise such powers and to perform such acts as the Board
deems necessary or expedient to promote the best interests of the Company which
are not in conflict with the provisions of the Plan.

 

(c)    The Board may delegate administration of the Plan to a committee or
committees of one or more members of the Board, and the term “Committee” shall
apply to any person or persons to whom such authority has been delegated. If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board, including the power to delegate to a subcommittee any of the
administrative powers the Committee is authorized to exercise (and references in
this Plan to the Board shall thereafter be to the Committee or subcommittee),
subject, however, to such resolutions, not inconsistent with the provisions of
the Plan, as may be adopted from time to time by the Board. The Board may
abolish the Committee at any time and revest in the Board the administration of
the Plan.

 

(d)    All determinations, interpretations and constructions made by the Board
in good faith shall not be subject to review by any person and shall be final,
binding and conclusive on all persons.

 

4.    SHARES SUBJECT TO THE PLAN.

 

(a)    Subject to the provisions of Section 12 relating to adjustments upon
changes in stock, the stock that may be issued pursuant to Stock Awards shall
not exceed in the aggregate Twenty-One Million Nine Hundred Thirty-Nine Thousand
Two Hundred Two (21,939,202) shares1 of the Company’s Common Stock. If any Stock
Award shall for any reason expire or otherwise terminate, in whole or in part,
without having been exercised in full, the stock not acquired under such Stock
Award shall revert to and again become available for issuance under the Plan. If
the Company repurchases unvested shares acquired pursuant to a Stock Award, the
shares of Common Stock so repurchased shall revert to and again become available
for issuance under the Plan.

 

(b)    The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.

 

5.    ELIGIBILITY.  

 

(a)    Eligibility for Stock Awards. Stock Awards may be granted to Employees
and Consultants who are not Officers, Directors or Ten Percent Shareholders at
the time of grant.

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1   The initial 2,317,155 shares reserved for issuance were increased by the
Board of Directors on December 22, 2000 and on January 2, 2001 by 3,200,000
shares and 250,000 shares, respectively, so that an aggregate of 5,767,155
shares were reserved for issuance. The shares were increased by the Board of
Directors on January 28, 2001 by 2,327,446 shares to a total of 8,094,601 shares
were reserved for issuance. This number was adjusted to 16,189,202 shares
pursuant to the 2-for-1 stock split on September 11, 2001. On November 6, 2001,
the Board of Directors approved an increase of 750,000 shares to a total of
16,939,202 shares. On August 16, 2002, the Compensation Committee approved an
increase of 5,000,000 to a total of 21,939,202 shares.

 

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(b)    Consultants.

 

(i)    A Consultant shall not be eligible for the grant of a Stock Award if, at
the time of grant, a Form S-8 Registration Statement under the Securities Act
(“Form S-8”) is not available to register either the offer or the sale of the
Company’s securities to such Consultant because of the nature of the services
that the Consultant is providing to the Company, or because the Consultant is
not a natural person, or as otherwise provided by the rules governing the use of
Form S-8, unless the Company determines both (i) that such grant (A) shall be
registered in another manner under the Securities Act (e.g., on a Form S-3
Registration Statement) or (B) does not require registration under the
Securities Act in order to comply with the requirements of the Securities Act,
if applicable, and (ii) that such grant complies with the securities laws of all
other relevant jurisdictions.

 

(ii)    Form S-8 generally is available to consultants and advisors only if (1)
they are natural persons; (2) they provide bona fide services to the issuer, its
parents, its majority-owned subsidiaries and (3) the services are not in
connection with the offer or sale of securities in a capital-raising
transaction, and do not directly or indirectly promote or maintain a market for
the issuer’s securities.

 

6.    OPTION PROVISIONS.

 

Each Option shall be in such form and shall contain such terms and conditions as
the Board shall deem appropriate. The provisions of separate Options need not be
identical, but each Option shall include (through incorporation of provisions
hereof by reference in the Option or otherwise) the substance of each of the
following provisions:

 

(a)    Term.    The Board shall determine the term of each Option.

 

(b)    Price.    The Board shall determine the exercise price of each Option.

 

(c)    Consideration.

 

(i)    The purchase price of stock acquired pursuant to an Option shall be paid,
to the extent permitted by applicable statutes and regulations, either (1) in
cash at the time the Option is exercised, or (2) at the discretion of the Board
(a) by delivery to the Company of other Common Stock, (b) according to a
deferred payment or other arrangement (which may include, without limiting the
generality of the foregoing, the use of other Common Stock) with the person to
whom the Option is granted or to whom the Option is transferred pursuant to
subsection 6(d), or (c) in any other form of legal consideration that may be
acceptable to the Board.

 

(ii)    At any time that the Company is incorporated in Delaware, then payment
of the Common Stock’s “par value,” as defined in the Delaware General
Corporation Law, shall not be made by deferred payment. In the case of any
deferred payment arrangement, interest shall be compounded at least annually and
shall be charged at the minimum rate of interest necessary to avoid the
treatment as interest, under any applicable provisions of the Code, of any
amounts other than amounts stated to be interest under the deferred payment
arrangement.

 

(iii)    Unless otherwise specifically provided in the Option, the purchase
price of Common Stock acquired pursuant to an Option that is paid by delivery to
the Company of other Common Stock acquired, directly or indirectly from the
Company, shall be paid only by shares of the Common Stock of the Company that
have been held for more than six (6) months (or such longer or shorter period of
time required to avoid a charge to earnings for financial accounting purposes).

 

(d)    Transferability.    An Option shall be transferable to the extent
provided in the Option Agreement. If the Option does not provide for
transferability, then the Option shall not be transferable except by will or by
the laws of descent and distribution, and shall be exercisable during the
lifetime of the person to whom the Option is granted only by such person.
Notwithstanding the foregoing provisions of subsection 6(d), the person to whom
the

 

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Option is granted may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a third party who, in the event of the
death of the Optionholder, shall thereafter be entitled to exercise the Option.

 

(e)    Vesting.    The total number of shares of stock subject to an Option may,
but need not, be allotted in periodic installments (which may, but need not, be
equal). The Option Agreement may provide that from time to time during each of
such installment periods, the Option may become exercisable (“vest”) with
respect to some or all of the shares allotted to that period, and may be
exercised with respect to some or all of the shares allotted to such period
and/or any prior period as to which the Option became vested but was not fully
exercised. The Option may be subject to such other terms and conditions on the
time or times when it may be exercised which may be based upon performance or
other criteria as the Board may deem appropriate. The provisions of this
subsection 6(e) are subject to any Option provisions governing the minimum
number of shares as to which an Option may be exercised.

 

(f)    Termination Of Continuous Service.    In the event an Optionholder’s
Continuous Service terminates (other than upon the Optionholder’s death or
Disability), the Optionholder may exercise his or her Option (to the extent that
the Optionholder was entitled to exercise it at the date of termination) but
only within such period of time ending on the earlier of (i) the date three (3)
months after the termination of the Optionholder’s Continuous Service (or such
longer or shorter period specified in the Option Agreement), or (ii) the
expiration of the term of the Option as set forth in the Option Agreement. If,
after termination, the Optionholder does not exercise his or her Option within
the time specified in the Option Agreement, the Option shall terminate, and the
shares covered by such Option shall revert to and again become available for
issuance under the Plan.

 

(g)    Disability Of Optionholder.    In the event an Optionholder’s Continuous
Service terminates as a result of the Optionholder’s Disability, the
Optionholder may exercise his or her Option, (to the extent such Optionholder
was entitled to exercise it at the date of termination) but only within such
period of time ending on the earlier of (i) the date twelve (12) months
following such termination (or such longer or shorter period specified in the
Option Agreement) or (ii) the expiration of the term of the Option as set forth
in the Option Agreement. If, at the date of termination, the Optionholder is not
entitled to exercise his or her entire Option, the shares covered by the
unexercisable portion of the Option shall revert to and again become available
for issuance under the Plan. If, after termination, the Optionholder does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the shares covered by such Option shall revert to and again
become available for issuance under the Plan.

 

(h)    Death Of Optionholder.    In the event of the death of an Optionholder
during, or within a period specified in the Option after the termination of, the
Optionholder’s Continuous Status as an Employee, Director, or Consultant, the
Option may be exercised (to the extent the Optionholder was entitled to exercise
the Option at the date of death) by the Optionholder’s estate, by a person who
acquired the right to exercise the Option by bequest or inheritance or by a
person designated to exercise the option upon the Optionholder’s death pursuant
to subsection 6(d), but only within the period ending on the earlier of (i) the
date eighteen (18) months following the date of death (or such longer or shorter
period specified in the Option Agreement), or (ii) the expiration of the term of
such Option as set forth in the Option Agreement. If, at the time of death, the
Optionholder was not entitled to exercise his or her entire Option, the shares
covered by the unexercisable portion of the Option shall revert to and again
become available for issuance under the Plan. If, after death, the Option is not
exercised within the time specified herein, the Option shall terminate, and the
shares covered by such Option shall revert to and again become available for
issuance under the Plan.

 

(i)    Early Exercise.    The Option may, but need not, include a provision
whereby the Optionholder may elect at any time before the Optionholder’s
Continuous Service terminates to exercise the Option as to any part or all of
the shares subject to the Option prior to the full vesting of the Option. Any
unvested shares so purchased may be subject to a repurchase right in favor of
the Company or to any other restriction the Board determines to be appropriate.

 

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(j)    Re-Load Options.    Without in any way limiting the authority of the
Board to make or not to make grants of Options hereunder, the Board shall have
the authority (but not an obligation) to include as part of any Option Agreement
a provision entitling the Optionholder to a further Option (a “Re-Load Option”)
in the event the Optionholder exercises the Option evidenced by the Option
agreement, in whole or in part, by surrendering other shares of Common Stock in
accordance with this Plan and the terms and conditions of the Option Agreement.
Any such Re-Load Option (i) shall be for a number of shares equal to the number
of shares surrendered as part or all of the exercise price of such Option; (ii)
shall have an expiration date which is the same as the expiration date of the
Option the exercise of which gave rise to such Re-Load Option; and (iii) shall
have an exercise price which is equal to one hundred percent (100%) of the Fair
Market Value of the Common Stock subject to the Re-Load Option on the date of
exercise of the original Option.

 

7.    TERMS OF STOCK BONUSES AND PURCHASES OF RESTRICTED STOCK.

 

Each stock bonus or restricted stock purchase agreement shall be in such form
and shall contain such terms and conditions as the Board shall deem appropriate.
The terms and conditions of stock bonus or restricted stock purchase agreements
may change from time to time, and the terms and conditions of separate
agreements need not be identical, but each stock bonus or restricted stock
purchase agreement shall include (through incorporation of provisions hereof by
reference in the agreement or otherwise) the substance of each of the following
provisions as appropriate:

 

(a)    Purchase Price.    The Board shall determine the purchase price under
each restricted stock purchase agreement. The Board may determine that eligible
participants in the Plan may be awarded stock pursuant to a stock bonus
agreement in consideration for past services actually rendered to the Company or
for its benefit.

 

(b)    Transferability.    Rights to purchase shares under a stock bonus or
restricted stock purchase agreement shall be transferable by the grantee only
upon such terms and conditions as are set forth in the applicable Stock Award
Agreement, as the Board shall determine in its discretion, so long as stock
awarded under such Stock Award Agreement remains subject to the terms of the
agreement.

 

(c)    Consideration.    The purchase price of stock acquired pursuant to a
stock purchase agreement shall be paid either: (i) in cash at the time of
purchase; (ii) at the discretion of the Board, according to a deferred payment
or other arrangement with the person to whom the stock is sold; or (iii) in any
other form of legal consideration that may be acceptable to the Board in its
discretion. Notwithstanding the foregoing, the Board may award stock pursuant to
a stock bonus agreement in consideration for past services actually rendered to
the Company or for its benefit.

 

(d)    Vesting.    Shares of stock sold or awarded under the Plan may, but need
not, be subject to a repurchase option in favor of the Company in accordance
with a vesting schedule to be determined by the Board.

 

(e)    Termination Of Continuous Service.    In the event a Participant’s
Continuous Service terminates, the Company may repurchase or otherwise reacquire
any or all of the shares of stock held by that person which have not vested as
of the date of termination under the terms of the stock bonus or restricted
stock purchase agreement between the Company and such person.

 

8.    CANCELLATION AND RE-GRANT OF OPTIONS.

 

The Board or the Committee shall have the authority to effect, at any time and
from time to time with the consent of any adversely affected Optionholder, (i)
the reduction of the exercise price of any outstanding Option under the Plan to
the then Fair Market Value and/or (ii) the cancellation of any outstanding
Options under the Plan in exchange for (A) the grant of a stock bonus; (B) the
grant of restricted stock; (C) cash; (D) the grant in substitution therefor of
new Options under the Plan having an exercise price per share not less than as
provided for new option grants made under the Plan; or (E) any other valuable
consideration (as determined by the Board in its

 

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sole discretion). The Board shall determine the exchange ratio (which may be for
more or less shares of stock than those then subject to the outstanding Option)
in its sole discretion as well as all other terms of the exchange not
specifically provided for in this paragraph.

 

9.    COVENANTS OF THE COMPANY.

 

(a)    During the terms of the Stock Awards, the Company shall keep available at
all times the number of shares of stock required to satisfy such Stock Awards.

 

(b)    The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the Stock Award; provided,
however, that this undertaking shall not require the Company to register under
the Securities Act either the Plan, any Stock Award or any stock issued or
issuable pursuant to any such Stock Award. If, after reasonable efforts, the
Company is unable to obtain from any such regulatory commission or agency the
authority which counsel for the Company deems necessary for the lawful issuance
and sale of stock under the Plan, the Company shall be relieved from any
liability for failure to issue and sell stock upon exercise of such Stock Awards
unless and until such authority is obtained.

 

10.    USE OF PROCEEDS FROM STOCK.

 

Proceeds from the sale of stock pursuant to Stock Awards shall constitute
general funds of the Company.

 

11.    MISCELLANEOUS.

 

(a)    The Board shall have the power to accelerate the time at which a Stock
Award may first be exercised or the time during which a Stock Award or any part
thereof will vest in accordance with the Plan, notwithstanding the provisions in
the Stock Award stating the time at which it may first be exercised or the time
during which it will vest.

 

(b)    Neither an Employee or Consultant nor any person to whom a Stock Award is
transferred under subsection 6(d) or 7(b) shall be deemed to be the holder of,
or to have any of the rights of a holder with respect to, any shares subject to
such Stock Award unless and until such person has satisfied all requirements for
exercise of the Stock Award pursuant to its terms.

 

(c)    Nothing in the Plan or any instrument executed or Stock Award granted
pursuant thereto shall confer upon any Employee, Consultant or other holder of
Stock Awards any right to continue in the employ of the Company or any Affiliate
(or to continue acting as a Consultant) or shall affect the right of the Company
or any Affiliate to terminate the employment or relationship as a Consultant of
any Employee, Consultant or other holder of Stock Awards with or without cause.

 

(d)    The Company may require any person to whom a Stock Award is granted, or
any person to whom a Stock Award is transferred pursuant to subsection 6(d) or
7(b), as a condition of exercising or acquiring stock under any Stock Award, (i)
to give written assurances satisfactory to the Company as to such person’s
knowledge and experience in financial and business matters and/or to employ a
purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters, and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock Award; and (ii) to
give written assurances satisfactory to the Company stating that such person is
acquiring the stock subject to the Stock Award for such person’s own account and
not with any present intention of selling or otherwise distributing the stock.
The foregoing requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (1) the issuance of the shares upon the
exercise or acquisition of stock under the Stock Award has been registered under
a then currently effective registration statement under the Securities Act, or
(2) as to any particular requirement, a determination is made by counsel for the
Company that such requirement

 

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need not be met in the circumstances under the then applicable securities laws.
The Company may, upon advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws, including, but
not limited to, legends restricting the transfer of the stock.

 

(e)    To the extent provided by the terms of a Stock Award Agreement, the
person to whom a Stock Award is granted may satisfy any federal, state or local
tax withholding obligation relating to the exercise or acquisition of stock
under a Stock Award by any of the following means or by a combination of such
means: (1) tendering a cash payment; (2) authorizing the Company to withhold
shares from the shares of the Common Stock otherwise issuable to the participant
as a result of the exercise or acquisition of stock under the Stock Award,
provided, however, that no shares of Common Stock are withheld with a value
exceeding the minimum amount of tax required to be withheld by law; or (3)
delivering to the Company owned and unencumbered shares of Common Stock.

 

(i) The terms of any repurchase option shall be specified in the Stock Award and
may be either at fair market value or at not less than the original purchase
price.

 

12.    ADJUSTMENTS UPON CHANGES IN STOCK.

 

(a)    If any change is made in the stock subject to the Plan, or subject to any
Stock Award (through merger, consolidation, reorganization, recapitalization,
stock dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or otherwise), the Plan will be appropriately adjusted in the
class(es) and maximum number of shares subject to the Plan pursuant to
subsection 4(a) and the outstanding Stock Awards will be appropriately adjusted
in class(es) and number of shares and price per share of stock subject to such
outstanding Stock Awards.

 

(b)    In the event of a dissolution or liquidation of the Company, then, upon
advance written notice by the Company of at least ten (10) business days to the
holders of any Stock Awards outstanding under the Plan, such Stock Awards shall
be terminated if not exercised (if applicable) prior to such event.

 

(c)    In the event of (1) a sale of substantially all of the assets of the
Company, (2) a merger or consolidation in which the Company is not the surviving
corporation or (3) a reverse merger in which the Company is the surviving
corporation but the shares of Common Stock outstanding immediately preceding the
merger are converted by virtue of the merger into other property, whether in the
form of securities, cash or otherwise, then any surviving corporation or
acquiring corporation shall assume any Stock Awards outstanding under the Plan
or shall substitute similar stock awards (including an award to acquire the same
consideration paid to the shareholders in the transaction described in this
subsection for those outstanding under the Plan. In the event any surviving
corporation or acquiring corporation refuses to assume such Stock Awards or to
substitute similar stock awards for those outstanding under the Plan, then with
respect to Stock Awards held by persons whose Continuous Service has not
terminated, the vesting of such Stock Awards (and, if applicable, the time
during which such Stock Awards may be exercised) shall be accelerated upon prior
written notice by the Company to the holders of such Stock Awards at least five
(5) business days prior to such event and the Stock Awards shall terminate if
not exercised (if applicable) at or prior to such event. With respect to any
other Stock Awards outstanding under the Plan, upon advance written notice by
the Company of at least five (5) business days to the holders of such Stock
Awards, such Stock Awards shall terminate if not exercised (if applicable) prior
to such event.

 

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13.    AMENDMENT OF THE PLAN AND STOCK AWARDS.

 

(a)    The Board at any time, and from time to time, may amend the Plan.

 

(b)    Rights and obligations under any Stock Award granted before amendment of
the Plan shall not be impaired by any amendment of the Plan unless (i) the
Company requests the consent of the person to whom the Stock Award was granted
and (ii) such person consents in writing.

 

(c)    The Board at any time, and from time to time, may amend the terms of any
one or more Stock Award; provided, however that the rights and obligations under
any Stock Award shall not be impaired by any such amendment unless (i) the
Company requests the consent of the person to whom the Stock Award was granted
and (ii) such person consents in writing.

 

14. TERMINATION OR SUSPENSION OF THE PLAN.

 

(a)    The Board may suspend or terminate the Plan at any time.

 

(b)    Rights and obligations under any Stock Award granted while the Plan is in
effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom the Stock Award was granted.

 

15.    EFFECTIVE DATE OF PLAN.

 

The Plan shall become effective on the date adopted by the Board.

 

16.    CHOICE OF LAW.

 

The law of the State of Delaware shall govern all questions concerning the
construction, validity and interpretation of this Plan, without regard to such
state’s conflict of laws rules.

 

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