Exhibit 10.1

 

ALLOS THERAPEUTICS, INC.
2000 STOCK INCENTIVE COMPENSATION PLAN, AS AMENDED

 

SECTION 1.  PURPOSE

 

The purpose of the Allos Therapeutics, Inc. 2000 Stock Incentive Compensation
Plan, as amended (the “Plan”) is to enhance the long-term stockholder value of
Allos Therapeutics, Inc., a Delaware corporation (the “Company”), by offering
opportunities to selected persons to participate in the Company’s growth and
success, and to encourage them to remain in the service of the Company and its
Related Corporations (as defined in Section 2) and to acquire and maintain stock
ownership in the Company.

 

SECTION 2.  DEFINITIONS

 

For purposes of the Plan, the following terms shall be defined as set forth
below:

 

“Award” means an award or grant made pursuant to the Plan, including, without
limitation, awards or grants of Stock Awards and Options, or any combination of
the foregoing.

 

“Board” means the Board of Directors of the Company.

 

“Cause” means dishonesty, fraud, misconduct, unauthorized use or disclosure of
confidential information or trade secrets, or conviction or confession of a
crime punishable by law (except minor violations), in each case as determined by
the Plan Administrator, and its determination shall be conclusive and binding.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

“Common Stock” means the common stock, par value $0.001 per share, of the
Company.

 

“Corporate Transaction” has the meaning set forth in Section 12.3(a).

 

“Disability,” unless otherwise defined by the Plan Administrator, means a mental
or physical impairment of the Participant that is expected to result in death or
that has lasted or is expected to last for a continuous period of 12 months or
more and that causes the Participant to be unable, in the opinion of the
Company, to perform his or her duties for the Company or a Related Corporation
and to be engaged in any substantial gainful activity.

 

“Effective Date” has the meaning set forth in Section 15.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Fair Market Value” shall be as established in good faith by the Plan
Administrator or (a) if the Common Stock is listed on the Nasdaq National
Market, the closing sales price for the Common Stock as reported by the Nasdaq
National Market for a single trading day or (b) if the Common Stock is listed on
the New York Stock Exchange or the American Stock Exchange, the closing sales
price for the Common Stock as such price is officially quoted in the composite
tape of transactions on such exchange for a single trading day. If there is no
such reported price for the Common Stock for the date in question, then such
price on the last preceding date for which such price exists shall be
determinative of Fair Market Value.

 

“Grant Date” means the date on which the Plan Administrator completes the
corporate action relating to the grant of an Award and all conditions precedent
to the grant have been satisfied, provided that conditions to the exercisability
or vesting of Awards shall not defer the Grant Date.

 

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“Incentive Stock Option” means an Option to purchase Common Stock granted under
Section 7 with the intention that it qualify as an “incentive stock option” as
that term is defined in Section 422 of the Code.

 

“Nonqualified Stock Option” means an Option to purchase Common Stock granted
under Section 7 other than an Incentive Stock Option.

 

“Option” means the right to purchase Common Stock granted under Section 7.

 

“Option Term” has the meaning set forth in Section 7.3.

 

“Parent,” except as otherwise provided in Section 8.3 in connection with
Incentive Stock Options, means any entity, whether now or hereafter existing,
that directly or indirectly controls the Company.

 

“Participant” means (a) the person to whom an Award is granted; (b) for a
Participant who has died, the personal representative of the Participant’s
estate, the person(s) to whom the Participant’s rights under the Award have
passed by will or by the applicable laws of descent and distribution, or the
beneficiary designated in accordance with Section 11; or (c) the person(s) to
whom an Award has been transferred in accordance with Section 11.

 

“Plan Administrator” means the Board or any committee or committees designated
by the Board to administer the Plan under Section 3.1.

 

“Related Corporation” means any Parent or Subsidiary of the Company.

 

“Retirement” means retirement as of the individual’s normal retirement date
under the Company’s 401(k) plan or other similar successor plan applicable to
salaried employees, unless otherwise defined by the Plan Administrator from time
to time for purposes of the Plan.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Stock Award” means shares of Common Stock or units denominated in Common Stock
granted under Section 9, the rights of ownership of which may be subject to
restrictions prescribed by the Plan Administrator.

 

“Subsidiary,” except as otherwise provided in Section 8.3 in connection with
Incentive Stock Options, means any entity that is directly or indirectly
controlled by the Company.

 

“Successor Corporation” has the meaning set forth in Section 12.3(b).

 

“Termination Date” has the meaning set forth in Section 7.6.

 

SECTION 3.  ADMINISTRATION

 

3.1                 Plan Administrator

 

The Plan shall be administered by the Board and/or a committee or committees
(which term includes subcommittees) appointed by, and consisting of two or more
members of, the Board (a “Plan Administrator”). If and so long as the Common
Stock is registered under Section 12(b) or 12(g) of the Exchange Act, the Board
shall consider in selecting the members of any committee acting as Plan
Administrator, with respect to any persons subject or likely to become subject
to Section 16 of the Exchange Act, the provisions regarding (a) ”outside
directors” as contemplated by Section 162(m) of the Code and (b) ”nonemployee
directors” as contemplated by Rule 16b-3 under the Exchange Act. Notwithstanding
the foregoing, the Board may delegate the responsibility for administering the
Plan with respect to designated classes of eligible persons to different
committees consisting of one or more members of the Board, subject to such
limitations as the Board deems appropriate. Committee members shall serve for
such term as the Board may determine, subject to removal by the Board at any
time.

 

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3.2                 Administration and Interpretation by Plan Administrator

 

Except for the terms and conditions explicitly set forth in the Plan, the Plan
Administrator shall have exclusive authority, in its discretion, to determine
all matters relating to Awards under the Plan, including the selection of
individuals to be granted Awards, the type of Awards, the number of shares of
Common Stock subject to an Award, all terms, conditions, restrictions and
limitations, if any, of an Award and the terms of any instrument that evidences
the Award. The Plan Administrator shall also have exclusive authority to
interpret the Plan and the terms of any instrument evidencing the Award and may
from time to time adopt and change rules and regulations of general application
for the Plan’s administration. The Plan Administrator’s interpretation of the
Plan and its rules and regulations, and all actions taken and determinations
made by the Plan Administrator pursuant to the Plan, shall be conclusive and
binding on all parties involved or affected. The Plan Administrator may delegate
administrative duties to such of the Company’s officers as it so determines.

 

SECTION 4.  STOCK SUBJECT TO THE PLAN

 

4.1                 Authorized Number of Shares

 

Subject to adjustment from time to time as provided in Section 12.1, the number
of shares of Common Stock that shall be available for issuance under the Plan
shall be:

 

(a)  3,500,100 shares plus;

 

(b)  an annual increase to be added as of the first day of the Company’s fiscal
year beginning in 2001 equal to the lesser of (i) 440,000 shares and (ii) 2% of
the adjusted average common shares outstanding of the Company used to calculate
fully diluted earnings per share as reported in the Annual Report to
stockholders for the preceding year or (iii) any lesser amount determined by the
Board; provided that any shares from any such increases in previous years that
are not actually issued shall be added to the aggregate number of shares
available for issuance under the Plan; plus

 

(c)  any authorized shares (i) not issued or subject to outstanding awards under
the Company’s 1995 Stock Option Plan (the “Prior Plan”) on the Effective Date
and (ii) any shares subject to outstanding awards under the Prior Plan on the
Effective Date that cease to be subject to such awards (other than by reason of
exercise or payment of the awards to the extent they are exercised for or
settled in shares), which shares shall cease, as of the date of stockholder
approval of the Plan, to be available for grant and issuance under the Prior
Plan, but shall be available for issuance under the Plan.

 

Shares issued under the Plan shall be drawn from authorized and unissued shares
or shares now held or subsequently acquired by the Company as treasury shares.

 

4.2                 Reuse of Shares

 

Any shares of Common Stock that have been made subject to an Award that cease to
be subject to the Award (other than by reason of exercise or payment of the
Award to the extent it is exercised for or settled in vested and nonforfeitable
shares) shall again be available for issuance in connection with future grants
of Awards under the Plan.

 

SECTION 5.  ELIGIBILITY

 

Awards may be granted under the Plan to those officers, directors and employees
of the Company and its Related Corporations as the Plan Administrator from time
to time selects. Awards may also be made to consultants, agents, advisors and
independent contractors who are engaged to provide services to the Company and
its Related Corporations; provided, however, that such Participants render bona
fide services that are not in connection with the offer and sale of the
Company’s securities in a capital-raising

 

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transaction and do not directly or indirectly promote or maintain a market for
the Company’s securities. Subject to adjustment from time to time as provided in
Section 12.1, no employee of the Company or its Related Corporations shall be
eligible to be granted Options or Stock Awards covering more than two million
(2,000,000) shares of Common Stock during any calendar year.

 

SECTION 6.  AWARDS

 

6.1                 Form and Grant of Awards

 

The Plan Administrator shall have the authority, in its sole discretion, to
determine the type or types of Awards to be made under the Plan. Such Awards may
include, but are not limited to, Incentive Stock Options, Nonqualified Stock
Options and Stock Awards. Awards may be granted singly or in combination.

 

6.2                 Settlement of Awards

 

The Company may settle Awards through the delivery of shares of Common Stock,
cash payments, the granting of replacement Awards or any combination thereof as
the Plan Administrator shall determine. Any Award settlement, including payment
deferrals, may be subject to such conditions, restrictions and contingencies as
the Plan Administrator shall determine. The Plan Administrator may permit or
require the deferral of any Award payment, subject to such rules and procedures
as it may establish, which may include provisions for the payment or crediting
of interest, or dividend equivalents, including converting such credits into
deferred stock equivalents. The Plan Administrator may at any time offer to buy
out, for a payment in cash or Common Stock, an Award previously granted based on
such terms and conditions as the Plan Administrator shall establish and
communicate to the Participant at the time such offer is made.

 

6.3                 Acquired Company Awards

 

Notwithstanding anything in the Plan to the contrary, the Plan Administrator may
grant Awards under the Plan in substitution for awards issued under other plans,
or assume under the Plan awards issued under other plans, if the other plans are
or were plans of other acquired entities (“Acquired Entities”) (or the parent of
the Acquired Entity) and the new Award is substituted, or the old award is
assumed, by reason of a merger, consolidation, acquisition of property or stock,
reorganization or liquidation (the “Acquisition Transaction”). In the event that
a written agreement pursuant to which the Acquisition Transaction is completed
is approved by the Board and said agreement sets forth the terms and conditions
of the substitution for or assumption of outstanding awards of the Acquired
Entity, said terms and conditions shall be deemed to be the action of the Plan
Administrator without any further action by the Plan Administrator, except as
may be required for compliance with Rule 16b-3 under the Exchange Act, and the
persons holding such awards shall be deemed to be Participants.

 

SECTION 7.  AWARDS OF OPTIONS

 

7.1                 Grant of Options

 

The Plan Administrator is authorized under the Plan, in its sole discretion, to
issue Options as Incentive Stock Options or as Nonqualified Stock Options, which
shall be appropriately designated.

 

7.2                 Option Exercise Price

 

The exercise price for shares purchased under an Option shall be as determined
by the Plan Administrator, but shall not be less than 100% of the Fair Market
Value of the Common Stock on the Grant Date with respect to Incentive Stock
Options and not less than 85% of the Fair Market Value of the Common Stock with
respect to Nonqualified Stock Options. For Incentive Stock Options granted to a
more than 10% stockholder, the Option exercise price shall be as specified in
Section 8.2.

 

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7.3                 Term of Options

 

The term of each Option (the “Option Term”) shall be as established by the Plan
Administrator or, if not so established, shall be ten years from the Grant Date.
For Incentive Stock Options, the maximum Option Term shall be as specified in
Sections 8.2 and 8.4.

 

7.4                 Exercise of Options

 

The Plan Administrator shall establish and set forth in each instrument that
evidences an Option the time at which, or the installments in which, the Option
shall vest and become exercisable, which provisions may be waived or modified by
the Plan Administrator at any time. If not so established in the instrument
evidencing the Option, the Option shall vest and become exercisable according to
the following schedule, which may be waived or modified by the Plan
Administrator at any time:

 

Period of Participant’s Continuous

 

 

 

Employment or Service With the

 

 

 

Company or Its Related Corporations

 

Percent of Total Option

 

From the Option Grant Date

 

That Is Vested and Exercisable

 

After 1 year

 

25%

 

Each additional one-month period of continuous service completed thereafter

 

An additional 1¤48

 

After 4 years

 

100%

 

 

The Plan Administrator may adjust the vesting schedule of an Option held by a
Participant who works less than “full-time” as that term is defined by the Plan
Administrator.

 

To the extent that an Option has vested and become exercisable, the Option may
be exercised from time to time by delivery to the Company of a written stock
option exercise agreement or notice, in a form and in accordance with procedures
established by the Plan Administrator, setting forth the number of shares with
respect to which the Option is being exercised, the restrictions imposed on the
shares purchased under such exercise agreement, if any, and such representations
and agreements as may be required by the Plan Administrator, accompanied by
payment in full as described in Section 7.5. An Option may not be exercised for
less than a reasonable number of shares at any one time, as determined by the
Plan Administrator.

 

7.5                 Payment of Exercise Price

 

The exercise price for shares purchased under an Option shall be paid in full to
the Company by delivery of consideration equal to the product of the Option
exercise price and the number of shares purchased. Such consideration must be
paid in cash or by check or, unless the Plan Administrator in its sole
discretion determines otherwise, either at the time the Option is granted or at
any time before it is exercised, in any combination of

 

(a)  cash or check;

 

(b)  tendering (either actually or, if and so long as the Common Stock is
registered under Section 12(b) or 12(g) of the Exchange Act, by attestation)
shares of Common Stock already owned by the Participant for at least six months
(or any shorter period necessary to avoid a charge to the Company’s earnings for
financial reporting purposes) having a Fair Market Value on the day prior to the
exercise date equal to the aggregate Option exercise price;

 

(c)  if and so long as the Common Stock is registered under Section 12(b) or
12(g) of the Exchange Act, delivery of a properly executed exercise notice,
together with irrevocable instructions, to (i) a brokerage firm designated by
the Company to deliver promptly to the Company the aggregate amount of sale or
loan proceeds to pay the Option exercise price and any withholding tax
obligations that may arise in

 

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connection with the exercise and (ii) the Company to deliver the certificates
for such purchased shares directly to such brokerage firm, all in accordance
with the regulations of the Federal Reserve Board; or

 

(d)  such other consideration as the Plan Administrator may permit.

 

In addition, to assist a Participant (including a Participant who is an officer
or a director of the Company) in acquiring shares of Common Stock pursuant to an
Award granted under the Plan, the Plan Administrator, in its sole discretion,
may authorize, either at the Grant Date or at any time before the acquisition of
Common Stock pursuant to the Award, (i) the payment by a Participant of a
full-recourse promissory note, (ii) the payment by the Participant of the
purchase price, if any, of the Common Stock in installments, or (iii) the
guarantee by the Company of a full-recourse loan obtained by the Participant
from a third party. Subject to the foregoing, the Plan Administrator shall in
its sole discretion specify the terms of any loans, installment payments or loan
guarantees, including the interest rate and terms of and security for repayment.

 

7.6                 Post-Termination Exercises

 

The Plan Administrator shall establish and set forth in each instrument that
evidences an Option whether the Option shall continue to be exercisable, and the
terms and conditions of such exercise, if a Participant ceases to be employed
by, or to provide services to, the Company or its Related Corporations, which
provisions may be waived or modified by the Plan Administrator at any time. If
not so established in the instrument evidencing the Option, the Option shall be
exercisable according to the following terms and conditions, which may be waived
or modified by the Plan Administrator at any time:

 

(a)  Any portion of an Option that is not vested and exercisable on the date of
termination of the Participant’s employment or service relationship (the
“Termination Date”) shall expire on such date.

 

(b)  Any portion of an Option that is vested and exercisable on the Termination
Date shall expire upon the earliest to occur of

 

(i)          the last day of the Option Term;

 

(ii)         if the Participant’s Termination Date occurs for reasons other than
Cause, death, Disability, or Retirement, the three-month anniversary of such
Termination Date; and

 

(iii)        if the Participant’s Termination Date occurs by reason of death,
Disability or Retirement, the one-year anniversary of such Termination Date.

 

Notwithstanding the foregoing, if the Participant dies after the Termination
Date while the Option is otherwise exercisable, the portion of the Option that
is vested and exercisable on such Termination Date shall expire upon the earlier
to occur of (y) the last day of the Option Term and (z) the first anniversary of
the date of death, unless the Plan Administrator determines otherwise.

 

Also notwithstanding the foregoing, in case of termination of the Participant’s
employment or service relationship for Cause, the Option shall automatically
expire upon first notification to the Participant of such termination, unless
the Plan Administrator determines otherwise. If a Participant’s employment or
service relationship with the Company is suspended pending an investigation of
whether the Participant shall be terminated for Cause, all the Participant’s
rights under any Option likewise shall be suspended during the period of
investigation.

 

A Participant’s transfer of employment or service relationship between or among
the Company and its Related Corporations, or a change in status from an employee
to a consultant, agent, advisor or independent contractor, shall not be
considered a termination of employment or service relationship for purposes of
this Section 7. The effect of a Company-approved leave of absence on the terms
and conditions of an Option shall be determined by the Plan Administrator, in
its sole discretion.

 

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SECTION 8.  INCENTIVE STOCK OPTION LIMITATIONS

 

To the extent required by Section 422 of the Code, Incentive Stock Options shall
be subject to the following additional terms and conditions:

 

8.1                 Dollar Limitation

 

To the extent the aggregate Fair Market Value (determined as of the Grant Date)
of Common Stock with respect to which Incentive Stock Options are exercisable
for the first time during any calendar year (under the Plan and all other stock
option plans of the Company) exceeds $100,000, such portion in excess of
$100,000 shall be treated as a Nonqualified Stock Option. In the event the
Participant holds two or more such Options that become exercisable for the first
time in the same calendar year, such limitation shall be applied on the basis of
the order in which such Options are granted.

 

8.2                 More Than 10% Stockholders

 

If an individual owns more than 10% of the total voting power of all classes of
the Company’s stock, then the exercise price per share of an Incentive Stock
Option shall not be less than 110% of the Fair Market Value of the Common Stock
on the Grant Date and the Option Term shall not exceed five years. The
determination of more than 10% ownership shall be made in accordance with
Section 422 of the Code.

 

8.3                 Eligible Employees

 

Individuals who are not employees of the Company or one of its parent
corporations or subsidiary corporations may not be granted Incentive Stock
Options. For purposes of this Section 8.3, “parent corporation” and “subsidiary
corporation” shall have the meanings attributed to those terms for purposes of
Section 422 of the Code.

 

8.4                 Term

 

Subject to Section 8.2, the Option Term shall not exceed ten years.

 

8.5                 Exercisability

 

An Option designated as an Incentive Stock Option shall cease to qualify for
favorable tax treatment as an Incentive Stock Option to the extent it is
exercised (if permitted by the terms of the Option) (a) more than three months
after the Termination Date for reasons other than death or Disability, (b) more
than one year after the Termination Date by reason of Disability, or (c) after
the Participant has been on leave of absence for more than 90 days, unless the
Participant’s reemployment rights are guaranteed by statute or contract.

 

For purposes of this Section 8.5, Disability shall mean “disability” as that
term is defined for purposes of Section 422 of the Code.

 

8.6                 Taxation of Incentive Stock Options

 

In order to obtain certain tax benefits afforded to Incentive Stock Options
under Section 422 of the Code, the Participant must hold the shares issued upon
the exercise of an Incentive Stock Option for two years after the Grant Date and
one year from the date of exercise. A Participant may be subject to the
alternative minimum tax at the time of exercise of an Incentive Stock Option.
The Participant shall give the Company prompt notice of any disposition of
shares acquired by the exercise of an Incentive Stock Option prior to the
expiration of such holding periods.

 

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8.7                 Promissory Notes

 

The amount of any promissory note delivered pursuant to Section 7.5 in
connection with an Incentive Stock Option shall bear interest at a rate
specified by the Plan Administrator, but in no case less than the rate required
to avoid imputation of interest (taking into account any exceptions to the
imputed interest rules) for federal income tax purposes.

 

SECTION 9.  STOCK AWARDS

 

9.1                 Grant of Stock Awards

 

The Plan Administrator is authorized to make Awards of Common Stock or Awards
denominated in units of Common Stock on such terms and conditions and subject to
such restrictions, if any (which may be based on continuous service with the
Company or the achievement of performance goals), as the Plan Administrator
shall determine, in its sole discretion, which terms, conditions and
restrictions shall be set forth in the instrument evidencing the Award. The
terms, conditions and restrictions that the Plan Administrator shall have the
power to determine shall include, without limitation, the manner in which shares
subject to Stock Awards are held during the periods they are subject to
restrictions and the circumstances under which forfeiture of the Stock Award
shall occur by reason of termination of the Participant’s employment or service
relationship.

 

9.2                 Issuance of Shares

 

Upon the satisfaction of any terms, conditions and restrictions prescribed in
respect to a Stock Award, or upon the Participant’s release from any terms,
conditions and restrictions of a Stock Award, as determined by the Plan
Administrator, the Company shall release, as soon as practicable, to the
Participant or, in the case of the Participant’s death, to the personal
representative of the Participant’s estate or as the appropriate court directs,
the appropriate number of shares of Common Stock.

 

9.3                 Waiver of Restrictions

 

Notwithstanding any other provisions of the Plan, the Plan Administrator may, in
its sole discretion, waive the forfeiture period and any other terms, conditions
or restrictions on any Stock Award under such circumstances and subject to such
terms and conditions as the Plan Administrator shall deem appropriate.

 

SECTION 10.  WITHHOLDING

 

The Company may require the Participant to pay to the Company the amount of any
withholding taxes that the Company is required to withhold with respect to the
grant, vesting or exercise of any Award. Subject to the Plan and applicable law,
the Plan Administrator may, in its sole discretion, permit the Participant to
satisfy withholding obligations, in whole or in part, (a) by paying cash, (b) by
electing to have the Company withhold shares of Common Stock (up to the minimum
required federal tax withholding rate) or (c) by transferring to the Company
shares of Common Stock (already owned by the Participant for the period
necessary to avoid a charge to the Company’s earnings for financial reporting
purposes), in such amounts as are equivalent to the Fair Market Value of the
withholding obligation. The Company shall have the right to withhold from any
Award or any shares of Common Stock issuable pursuant to an Award or from any
cash amounts otherwise due or to become due from the Company to the Participant
an amount equal to such taxes. The Company may also deduct from any Award any
other amounts due from the Participant to the Company or a Related Corporation.

 

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SECTION 11.  ASSIGNABILITY

 

Awards granted under the Plan and any interest therein may not be assigned,
pledged or transferred by the Participant and may not be made subject to
attachment or similar proceedings otherwise than by will or by the applicable
laws of descent and distribution, and, during the Participant’s lifetime, such
Awards may be exercised only by the Participant. Notwithstanding the foregoing,
and to the extent permitted by Section 422 of the Code, the Plan Administrator,
in its sole discretion, may permit such assignment, transfer and exercisability
and may permit a Participant to designate a beneficiary who may exercise the
Award or receive compensation under the Award after the Participant’s death;
provided, however, that any Award so assigned or transferred shall be subject to
all the same terms and conditions contained in the instrument evidencing the
Award.

 

SECTION 12.  ADJUSTMENTS

 

12.1          Adjustment of Shares

 

In the event that, at any time or from time to time, a stock dividend, stock
split, spin-off, combination or exchange of shares, recapitalization, merger,
consolidation, distribution to stockholders other than a normal cash dividend,
or other change in the Company’s corporate or capital structure results in
(a) the outstanding shares, or any securities exchanged therefor or received in
their place, being exchanged for a different number or class of securities of
the Company or of any other corporation or (b) new, different or additional
securities of the Company or of any other corporation being received by the
holders of shares of Common Stock of the Company, then the Plan Administrator
shall make proportional adjustments in (i) the maximum number and kind of
securities subject to the Plan as set forth in Section 4.1 and (ii) the number
and kind of securities that are subject to any outstanding Award and the per
share price of such securities, without any change in the aggregate price to be
paid therefor. The determination by the Plan Administrator as to the terms of
any of the foregoing adjustments shall be conclusive and binding.
Notwithstanding the foregoing, a dissolution or liquidation of the Company or a
Corporate Transaction shall not be governed by this Section 12.1 but shall be
governed by Sections 12.2 and 12.3, respectively.

 

12.2          Dissolution or Liquidation

 

In the event of the proposed dissolution or liquidation of the Company, the Plan
Administrator shall notify each Participant as soon as practicable prior to the
effective date of such proposed transaction. The Plan Administrator in its
discretion may permit a Participant to exercise an Option until ten days prior
to such transaction with respect to all vested and exercisable shares of Common
Stock covered thereby and with respect to such number of unvested shares as the
Plan Administrator shall determine. In addition, the Plan Administrator may
provide that any forfeiture provision or Company repurchase option applicable to
any Award shall lapse as to such number of shares as the Plan Administrator
shall determine, contingent upon the occurrence of the proposed dissolution or
liquidation at the time and in the manner contemplated. To the extent an Option
has not been previously exercised, the Option shall terminate automatically
immediately prior to the consummation of the proposed action. To the extent a
forfeiture provision applicable to a Stock Award has not been waived by the Plan
Administrator, the Stock Award shall be forfeited automatically immediately
prior to the consummation of the proposed action.

 

12.3          Corporate Transaction

 

(a)  Definition

 

“Corporate Transaction” means any of the following events:

 

(i)          Consummation of any merger or consolidation of the Company with or
into another corporation; or

 

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(ii)         Consummation of any sale, lease, exchange or other transfer in one
transaction or a series of related transactions of all or substantially all the
Company’s outstanding securities or substantially all the Company’s assets other
than a transfer of the Company’s assets to a majority-owned subsidiary
corporation (as defined in Section 8.3) of the Company.

 

(b)  Options

 

In the event of a Corporate Transaction, except as otherwise provided in the
instrument evidencing the Award, each outstanding Option shall be assumed or
continued or an equivalent option or right substituted by the surviving
corporation, the successor corporation or its parent corporation, as applicable
(the “Successor Corporation”). In the event that the Successor Corporation
refuses to assume, continue or substitute for the Option, the Participant shall
fully vest in and have the right to exercise the Option as to all of the shares
of Common Stock subject thereto, including shares as to which the Option would
not otherwise be vested or exercisable. If an Option will become fully vested
and exercisable in lieu of assumption or substitution in the event of a
Corporate Transaction, the Plan Administrator shall notify the Participant in
writing or electronically that the Option shall be fully vested and exercisable
for a specified time period after the date of such notice, and the Option shall
terminate upon the expiration of such period, in each case conditioned on the
consummation of the Corporate Transaction. For the purposes of this
Section 12.3, the Option shall be considered assumed if, following the Corporate
Transaction, the option or right confers the right to purchase or receive, for
each share of Common Stock subject to the Option, immediately prior to the
Corporate Transaction, the consideration (whether stock, cash, or other
securities or property) received in the Corporate Transaction 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 of consideration
chosen by the holders of a majority of the outstanding shares); provided,
however, that if such consideration received in the Corporate Transaction is not
solely common stock of the Successor Corporation, the Plan 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 Common Stock
subject thereto, to be solely common stock of the Successor Corporation equal in
fair market value to the per share consideration received by holders of Common
Stock in the Corporate Transaction. All Options shall terminate and cease to
remain outstanding immediately following the consummation of the Corporate
Transaction, except to the extent assumed by the Successor Corporation.

 

(c)  Stock Awards

 

In the event of a Corporate Transaction, except as otherwise provided in the
instrument evidencing the Award, the vesting of shares subject to Stock Awards
shall accelerate, and the forfeiture provisions to which such shares are subject
shall lapse, if and to the same extent that the vesting of outstanding Options
accelerates in connection with the Corporate Transaction. If unvested Options
are to be assumed, continued or substituted by a Successor Corporation without
acceleration upon the occurrence of a Corporate Transaction, the forfeiture
provisions to which such Stock Awards are subject shall continue with respect to
shares of the Successor Corporation that may be issued in exchange for such
shares.

 

12.4          Further Adjustment of Awards

 

Subject to Sections 12.2 and 12.3, the Plan Administrator shall have the
discretion, exercisable at any time before a sale, merger, consolidation,
reorganization, liquidation or change in control of the Company, as defined by
the Plan Administrator, to take such further action as it determines to be
necessary or advisable, and fair and equitable to the Participants, with respect
to Awards. Such authorized action may include (but shall not be limited to)
establishing, amending or waiving the type, terms, conditions or duration of, or
restrictions on, Awards so as to provide for earlier, later, extended or
additional time for exercise, lifting restrictions and other modifications, and
the Plan Administrator may take such actions with respect to all Participants,
to certain categories of Participants or only to individual Participants. The
Plan Administrator may take such action before or after granting Awards to which
the action relates and before or after any public announcement with respect to
such sale, merger, consolidation, reorganization, liquidation or change in
control that is the reason for such action.

 

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12.5          Limitations

 

The grant of Awards shall in no way affect the Company’s right to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.

 

12.6          Fractional Shares

 

In the event of any adjustment in the number of shares covered by any Award,
each such Award shall cover only the number of full shares resulting from such
adjustment.

 

SECTION 13.  AMENDMENT AND TERMINATION OF PLAN

 

13.1          Amendment of Plan

 

The Plan may be amended only by the Board in such respects as it shall deem
advisable; provided, however, that to the extent required for compliance with
Section 422 of the Code or any applicable law or regulation, stockholder
approval shall be required for any amendment that would (a) increase the total
number of shares available for issuance under the Plan, (b) modify the class of
persons eligible to receive Options, or (c) otherwise require stockholder
approval under any applicable law or regulation. Any amendment made to the Plan
that would constitute a “modification” to Incentive Stock Options outstanding on
the date of such amendment shall not, without the consent of the Participant, be
applicable to such outstanding Incentive Stock Options but shall have
prospective effect only.

 

13.2          Termination of Plan

 

The Board may suspend or terminate the Plan at any time. Unless sooner
terminated as provided herein, the Plan shall terminate ten years after the
earlier of the Plan’s adoption by the Board and approval by the stockholders.

 

13.3          Consent of Participant

 

The amendment or termination of the Plan or the amendment of an outstanding
Award shall not, without the Participant’s consent, impair or diminish any
rights or obligations under any Award theretofore granted to the Participant
under the Plan. Any change or adjustment to an outstanding Incentive Stock
Option shall not, without the consent of the Participant, be made in a manner so
as to constitute a “modification” that would cause such Incentive Stock Option
to fail to continue to qualify as an Incentive Stock Option. Notwithstanding the
foregoing, any adjustments made pursuant to Section 12 shall not be subject to
these restrictions.

 

SECTION 14.  GENERAL

 

14.1          Evidence of Awards

 

Awards granted under the Plan shall be evidenced by a written instrument that
shall contain such terms, conditions, limitations and restrictions as the Plan
Administrator shall deem advisable and that are not inconsistent with the Plan.

 

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14.2          No Individual Rights

 

Nothing in the Plan or any Award granted under the Plan shall be deemed to
constitute an employment contract or confer or be deemed to confer on any
Participant any right to continue in the employ of, or to continue any other
relationship with, the Company or any Related Corporation or limit in any way
the right of the Company or any Related Corporation to terminate a Participant’s
employment or other relationship at any time, with or without Cause.

 

14.3          Registration

 

Notwithstanding any other provision of the Plan, the Company shall have no
obligation to issue or deliver any shares of Common Stock under the Plan or make
any other distribution of benefits under the Plan unless such issuance, delivery
or distribution would comply with all applicable laws (including, without
limitation, the requirements of the Securities Act), and the applicable
requirements of any securities exchange or similar entity.

 

The Company shall be under no obligation to any Participant to register for
offering or resale or to qualify for exemption under the Securities Act, or to
register or qualify under state securities laws, any shares of Common Stock,
security or interest in a security paid or issued under, or created by, the
Plan, or to continue in effect any such registrations or qualifications if made.
The Company may issue certificates for shares with such legends and subject to
such restrictions on transfer and stop-transfer instructions as counsel for the
Company deems necessary or desirable for compliance by the Company with federal
and state securities laws.

 

To the extent that the Plan or any instrument evidencing an Award provides for
issuance of stock certificates to reflect the issuance of shares of Common
Stock, the issuance may be effected on a noncertificated basis, to the extent
not prohibited by applicable law or the applicable rules of any stock exchange.

 

14.4          No Rights as a Stockholder

 

No Option or Stock Award denominated in units shall entitle the Participant to
any cash dividend, voting or other right of a stockholder unless and until the
date of issuance under the Plan of the shares that are the subject of such
Award.

 

14.5          Compliance With Laws and Regulations

 

Notwithstanding anything in the Plan to the contrary, the Plan Administrator, in
its sole discretion, may bifurcate the Plan so as to restrict, limit or
condition the use of any provision of the Plan to Participants who are officers
or directors subject to Section 16 of the Exchange Act without so restricting,
limiting or conditioning the Plan with respect to other Participants.
Additionally, in interpreting and applying the provisions of the Plan, any
Option granted as an Incentive Stock Option pursuant to the Plan shall, to the
extent permitted by law, be construed as an “incentive stock option” within the
meaning of Section 422 of the Code.

 

14.6          Participants in Foreign Countries

 

The Plan Administrator shall have the authority to adopt such modifications,
procedures and subplans as may be necessary or desirable to comply with
provisions of the laws of foreign countries in which the Company or its Related
Corporations may operate to assure the viability of the benefits from Awards
granted to Participants employed in such countries and to meet the objectives of
the Plan.

 

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14.7          No Trust or Fund

 

The Plan is intended to constitute an “unfunded” plan. Nothing contained herein
shall require the Company to segregate any monies or other property, or shares
of Common Stock, or to create any trusts, or to make any special deposits for
any immediate or deferred amounts payable to any Participant, and no Participant
shall have any rights that are greater than those of a general unsecured
creditor of the Company.

 

14.8          Severability

 

If any provision of the Plan or any Award is determined to be invalid, illegal
or unenforceable in any jurisdiction, or as to any person, or would disqualify
the Plan or any Award under any law deemed applicable by the Plan Administrator,
such provision shall be construed or deemed amended to conform to applicable
laws, or, if it cannot be so construed or deemed amended without, in the Plan
Administrator’s determination, materially altering the intent of the Plan or the
Award, such provision shall be stricken as to such jurisdiction, person or
Award, and the remainder of the Plan and any such Award shall remain in full
force and effect.

 

14.9          Choice of Law

 

The Plan and all determinations made and actions taken pursuant hereto, to the
extent not otherwise governed by the laws of the United States, shall be
governed by the laws of the State of Colorado without giving effect to
principles of conflicts of laws.

 

SECTION 15.  EFFECTIVE DATE

 

The Effective Date is the date on which the Plan is adopted by the Board, so
long as it is approved by the Company’s stockholders at any time within 12
months of such adoption.

 

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