EXABYTE CORPORATION

2004 STOCK OPTION PLAN

Effective Date: May 4, 2004

Approved by Stockholders: June 11, 2004

 

Prepared by

HOLLAND & HART LLP

ATTORNEYS AT LAW

 

SUITE 3200

555 SEVENTEENTH STREET

DENVER, COLORADO 80202-3979

(303) 295-8000

 

ASPEN • BILLINGS • BOISE • BOULDER • CASPER • CHEYENNE • COLORADO SPRINGS •
DENVER

DENVER TECH CENTER • JACKSON HOLE • SALT LAKE CITY • SANTA FE • WASHINGTON, D.C.

 

--------------------------------------------------------------------------------

 

 

EXABYTE CORPORATION

2004 STOCK OPTION PLAN

TABLE OF CONTENTS

ARTICLE 1.

DEFINITIONS

1.1

Affiliate

1

1.2

Board of Directors

1

1.4

Cause

1

1.4

Change in Control

2

1.5

Code

2

1.6

Committee

2

1.7

Common Stock

2

1.8

Consultant

2

1.9

Continuous Service

2

1.10

Director

3

1.11

Disability

3

1.12

Effective Date

3

1.13

Employee

3

1.14

Exchange Act

3

1.15

Fair Market Value

3

1.16

Option or Stock Option

3

1.17

Option Agreement

3

1.19

Participant

3

1.21

Rule 16b-3

4

ARTICLE 2.

ADMINISTRATION

2.1

Committee

4

2.2

Meetings and Actions

4

2.3

Powers of the Committee

5

2.4

Indemnification

6

ARTICLE 3.

STOCK SUBJECT TO THE PLAN

3.1

Reserved Shares

6

3.2

Individual Limit

6

3.3

Unused Stock

6

3.4

Adjustment for Change in Outstanding Shares.

6

3.5

Retention of Rights

7

ARTICLE 4.

ELIGIBILITY

ARTICLE 5.

STOCK OPTION TERMS

5.1

Grant of Options

7

5.2

Option Agreement

7

5.3

Nontransferability of Options

8

5.4

Manner of Exercise

8

5.5

Discretionary Share Withholding

9

5.6

Termination of Continuous Service

10

 

 

 

Exabyte Corporation 2004 Stock Option Plan

4/2004

i

 

--------------------------------------------------------------------------------

 

 

ARTICLE 6.

CHANGE IN CONTROL

6.1

Substitution of Awards

11

6.2

Acceleration of Vesting

11

ARTICLE 7.

ISSUANCE OF SHARES

7.1

Transfer of Shares to Participant

11

7.2

Legend

11

7.3

Compliance with Laws

12

ARTICLE 8.

AMENDMENT AND TERMINATION

8.1

Amendment of the Plan

12

8.2

Termination of the Plan

12

ARTICLE 9.

GENERAL PROVISIONS

9.1

Withholding Obligations

12

9.2

No Employment Rights

13

9.3

Participants in Foreign Countries

13

9.4

Other Employee Benefits

13

9.5

Confidentiality of Information

13

9.6

Severability

13

9.7

Governing Law

13

9.8                                          
                                              Use of Proceeds13

 

 

Exabyte Corporation 2004 Stock Option Plan

4/2004

ii

 

--------------------------------------------------------------------------------

 

 

EXABYTE CORPORATION 2004 STOCK OPTION PLAN

INTRODUCTION

The purpose of the Exabyte Corporation 2004 Stock Option Plan (the “Plan”) is to
further the growth and development of Exabyte Corporation, a Delaware
corporation (the “Company”), by affording an opportunity for stock ownership to
selected Employees, Directors and Consultants of the Company and its
Subsidiaries who are responsible for the conduct and management of its business
or who are involved in endeavors significant to its success. The Plan is also
intended to assist the Company in attracting new Employees and Consultants and
retaining existing Employees and Consultants; to optimize the profitability and
growth of the Company through incentives that are consistent with the Company’s
goals; to provide incentives for excellence in individual performance; and to
promote teamwork.

ARTICLE 1.

DEFINITIONS

When used in this Plan, the following capitalized terms shall have the meanings
set forth below unless a different meaning is plainly required by the context:

1.1

Affiliate means, with respect to any person or entity, a person or entity that
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such person or entity.

1.2

Board of Directors. means the Board of Directors of the Company.

 

1.3

Cause shall have the meaning given such term in an Optionee’s employment
agreement with the Company or any successor entity, if applicable, or if such
Optionee has not entered into an employment agreement or such term is not
defined therein (as determined in the sole discretion of the Company), shall
mean (1) such Optionee’s repeated refusal to obey written directions of the
Board of Directors or a superior officer (so long as such directions do not
involve illegal or immoral acts); (2) such Optionee’s repeated acts of substance
abuse that are injurious to the Company or any of its Subsidiaries in any
significant respect; (3) such Optionee’s fraud or dishonesty that is injurious
to the Company or any of its Subsidiaries in any significant respect; (4) such
Optionee’s breach of any material obligation of noncompetition, nondisclosure or
confidentiality owed to the Company or any of its Subsidiaries; (5) such
Optionee’s breach of fiduciary duty owed to the Company or any of its
Subsidiaries; (6) such Optionee’s commission or confession of a criminal offense
involving money or other property of the Company (excluding any traffic
violations or similar violations); or (7) such Optionee’s commission or
confession of a criminal offense that constitutes a felony in the jurisdiction
in which the offense is committed, in each case as determined by the Committee
(whose determination shall be conclusive and binding). An Optionee who agrees to
resign from his or her affiliation with the Company in lieu of being terminated
for Cause may be deemed to have been terminated for Cause for purposes of the
Plan. For purposes of this definition, the term “Company” shall also refer to
any successor to the Company resulting from a Change in Control.

1.4

Change in Control means the occurrence, in a single transaction or in a series
of related transactions, of any one or more of the following:

 

(a)

A third person, including a “group” as defined in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended, other than a stockholder of the
Company on the Effective Date and/or its Affiliates, becomes the beneficial
owner of shares of the Company having 50% or more of the total number of votes
that may be cast for the election of Directors of the Company; or

 

(b)

The consummation of: (i) any merger or consolidation of the Company with another
entity, provided that there shall be no change of control if the persons and
entities who were the stockholders of the Company immediately before such merger
or consolidation continue to own, directly or indirectly, more than 50% of the
outstanding voting securities of the corporation resulting from such merger or
consolidation in substantially the same proportion as their

 

 

 

Exabyte Corporation 2004 Stock Option Plan

1

 

 

--------------------------------------------------------------------------------

 

ownership of the voting securities of the Company outstanding immediately before
such merger or consolidation; or (ii) any sale, exchange or other disposition of
all or substantially all of the Company’s assets.

The Committee’s reasonable determination as to whether such an event has
occurred shall be final and conclusive.

1.5

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

 

1.6

Committee means the body that is responsible for the administration of the Plan,
as determined pursuant to Section 2.1.

 

1.7

Common Stock means the Company’s common stock, $.001 par value, and any share or
shares of the Company’s capital stock hereafter issued or issuable in
substitution for such shares.

 

1.8

Consultant means a consultant, agent, advisor or independent contractor who
provides service to the Company and who do not receive wages subject to income
tax federal withholding under Code Section 3401; provided, however, that such
person renders bona fide services that are not in connection with the offer and
sale of the Company’s securities in a capital raising transaction and do not
directly or indirectly promote or maintain a market for the Company’s
securities.

 

1.9

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

 

1.10

Director. means a member of the Board of Directors.

 

1.11

Disability means disability within the meaning of the long-term disability
policy maintained by the Company, or if none, within the meaning of Code Section
22(e)(3).

 

1.12

Effective Date. means the effective date of the Plan, as first set forth above.

 

1.13

Employee means a common law employee of the Company or its Affiliate and any
person who has accepted a binding offer of employment from the Company or its
Affiliate, but excludes any individual classified by the Company or its
Affiliate as an independent contractor or leased employee.

 

1.14

Exchange Act. means the Securities Exchange Act of 1934, as amended from time to
time.

 

1.15

Fair Market Value. means the value of the Common Stock, determined in accordance
with the following:

 

(a)

Publicly Traded. If the Common Stock is listed on any established stock exchange
or traded on the Nasdaq National Market, Nasdaq SmallCap Market or OTC Bulletin
Board, then the Fair Market Value per share shall be deemed to be the closing
sales price for such stock as quoted on such exchange or market (or the exchange
or market with the greatest volume of trading in the Common Stock) on the last
market trading day prior to the day of determination, as reported in The Wall
Street Journal or such other source as the Board deems reliable. If the Common
Stock is not listed upon an established stock exchange but is traded in the
Nasdaq National Market, the Fair Market Value per share shall be deemed to be
the closing price of the Common Stock in the National Market System for the day
immediately preceding the day for which the determination is made.

 

 

 

 

Exabyte Corporation 2004 Stock Option Plan

2

 

 

--------------------------------------------------------------------------------

 

 

 

(b)

Not Publicly Traded. If none of these conditions apply, the Fair Market Value
per share shall be deemed to be an amount as determined in good faith by the
Committee by applying any reasonable valuation method.

1.16

Option or Stock Option means any option granted to an eligible Employee,
Director or Consultant under the Plan that is not intended by the Company at the
time the option is granted to be an incentive stock option within the meaning of
Code Section 422.

1.17

Option Agreement. means the agreement specified in Section 5.2.

 

1.18

Optionee means any Employee, Director or Consultant who is granted an Option
under the Plan. Optionee also means the personal representative of an Optionee
and any other person who acquires the right to exercise or receive payment
pursuant to an Option by bequest or inheritance.

1.19

Rule 16b-3 means Rule 16b-3 promulgated by the Securities Exchange Commission
under the Exchange Act, together with any successor rule, as in effect from time
to time.

1.20

Sale of the Company means a Change in Control transaction in which the Common
Stock is converted into, or is otherwise entitled to receive, other securities
or property.

1.21

Termination Event means, with respect to a particular Optionee (i) termination
by the Company or any successor entity of such Optionee’s Continuous Service
with the Company or such successor entity other than a termination for Cause;
(ii) a material reduction in such Optionee’s base salary without such Optionee’s
consent, except in the case of an across-the-board salary reduction for all
similarly situated employees; or (iii) in the case of an Optionee that is an
executive officer of the Company, a material and permanent reduction in such
Optionee’s responsibilities, authorities or duties or a required relocation of
such Optionee’s office outside of a 50-mile radius of the Company’s then-current
executive office location, in either case without such Optionee’s consent.

ARTICLE 2.

ADMINISTRATION

2.1

COMMITTEE. The Plan shall be administered by the Board of Directors, unless and
until such time as the Board of Directors delegates the administration of the
Plan to a committee, which shall be appointed by and shall serve at the pleasure
of the Board of Directors. To the extent the Board considers it desirable for
transactions relating to an Option to be eligible to qualify for an exemption
under Rule 16b-3, the Committee shall consist of a committee of two or more
Directors of the Company, all of whom qualify as “non-employee directors” within
the meaning of Rule 16b-3. To the extent the Board considers it desirable for
compensation delivered pursuant to an Option to be eligible to qualify for an
exemption under Code Section 162(m), the Committee shall consist of a committee
of two or more Directors of the Company, all of whom qualify as “outside
directors” within the meaning of Code Section 162(m). The Board may from time to
time remove members from or add members to any such committee; fill vacancies on
the committee, howsoever caused; and otherwise increase or decrease the number
of members of such committee, in each case as the Board deems appropriate to
permit transactions in Shares pursuant to the Plan and to satisfy such
conditions of Rule 16b-3 or Code Section 162(m) as then in effect.

2.2

MEETINGS AND ACTIONS. The Committee shall hold meetings at such times and places
as it may determine. A majority of the members of the Committee shall constitute
a quorum, and the acts of the majority of the members present at a meeting or a
consent in writing signed by all members of the Committee shall be the acts of
the Committee and shall be final, binding and conclusive upon all persons,
including the Company, its Subsidiaries, its stockholders, and all persons
having any interest in Options that may be or have been granted pursuant to the
Plan.

2.3

POWERS OF THE COMMITTEE. The Committee shall have the full and exclusive right
and authority, in its sole discretion subject to the terms of the Plan:

 

(a)

To determine the Employees, Directors and Consultants to whom Options may from
time to time be granted;

 

 

 

Exabyte Corporation 2004 Stock Option Plan

3

 

 

--------------------------------------------------------------------------------

 

 

(b)

To determine the terms and conditions of all Options granted under the Plan,
including the number of shares to be covered by each Option, subject to the
limitations of Article 3;

(c)

To determine whether, and to what extent and under what circumstances Options
may be settled in cash, shares or other property or cancelled or suspended;

(d)

To determine the existence or nonexistence of any fact or status relevant to
Options or the rights of Optionees thereunder, including whether a termination
of Continuous Service occurs by reason of Cause, retirement, death or
Disability;

(e)

To construe and interpret the Plan, any Option Agreement, and any other
instrument or agreement entered into under the Plan;

(f)

To adjust performance award criteria or the terms and conditions of Options in
recognition of unusual or nonrecurring events affecting the Company or its
financial statements or changes in applicable laws, regulations or accounting
principles;

(g)

To make such other determinations and waive such requirements as may be required
or permitted by Article 5 or Article 6 or other provisions of the Plan;

(h)

To administer the Plan and establish such rules and regulations, approve and
prescribe such forms, and appoint such agents as it shall deem appropriate for
the proper administration of the Plan;

(i)

To correct any defect, supply any omission or reconcile any inconsistency in the
Plan or any Award in the manner and to the extent it shall deem desirable to
carry it into effect;

(j)

To make any other determination and take any other action that the Committee
deems necessary or desirable for administration of the Plan.

In making such determinations, the Committee may take into consideration the
value of the services rendered by the respective individuals, their present and
potential contributions to the success of the Company and its Affiliates and
such other factors which the Committee may deem relevant in accomplishing the
purposes of the Plan. The Committee’s determinations under the Plan need not be
uniform. The Committee may make such determinations selectively among persons
who receive, or are eligible to receive, Awards (whether or not such persons are
similarly situated). Decisions of the Committee shall be final and binding upon
all Persons.

2.4

INDEMNIFICATION. Each person who is or shall have been a member of the Committee
or of the Board of Directors shall be indemnified and held harmless by the
Company against and from any loss, cost, liability or expense that may be
imposed upon or reasonably incurred in connection with or resulting from any
claim, action, suit or proceeding to which such person may be a party or in
which such person may be involved by reason of any action taken or failure to
act under the Plan and against and from any and all amounts paid in settlement
thereof, provided that the Company approved such settlement, or paid in
satisfaction of a judgment in any such action, suit or proceeding, provided such
person shall give the Company an opportunity, at its own expense, to handle and
defend the same before undertaking to handle and defend it on such person’s own
behalf. The foregoing right of indemnification shall not be exclusive of, and is
in addition to, any other rights of indemnification to which any person may be
entitled under the Company’s Certificate of Incorporation or Bylaws, as a matter
of law, or otherwise, or any power that the Company may have to indemnify them
or hold them harmless. The foregoing right of indemnification shall not apply to
any person in his or her capacity as an Optionee under the Plan.

ARTICLE 3.

STOCK SUBJECT TO THE PLAN

3.1

RESERVED SHARES. Subject to the provisions of Section 3.4, the aggregate number
of shares of Common Stock that may be issued under Options granted pursuant to
the Plan shall not exceed 25,000,000 shares. Shares that may be issued under
Options may consist, in whole or in part, of authorized but unissued stock or
treasury stock of the Company not reserved for any other purpose. In addition,
the Company may use the

 

 

 

Exabyte Corporation 2004 Stock Option Plan

4

 

 

--------------------------------------------------------------------------------

 

proceeds received from an Optionee upon the exercise of an Option to repurchase
shares of Stock in the open market, which shall be available for grant of
Options under the Plan.

3.2

INDIVIDUAL LIMIT. Subject to the provisions of Section 3.4, to the extent the
Board considers it desirable for compensation delivered pursuant to an Option to
be eligible to qualify for an exemption under Code Section 162(m), no
Participant shall be eligible to be granted Awards covering more than 8,000,000
shares of Common Stock during any calendar year.

3.3

UNUSED STOCK. If any outstanding Option under the Plan expires or for any other
reason ceases to be exercisable, is forfeited or repurchased by the Company, in
whole or in part (other than upon exercise of an Option), the shares that were
subject to such Option (and as to which the Option had not been exercised) shall
continue to be available under the Plan.

3.4

ADJUSTMENT FOR CHANGE IN OUTSTANDING SHARES.

 

 

(a)

In General. If there is any change, increase or decrease, in the outstanding
shares of Common Stock that is effected without receipt of additional
consideration by the Company, by reason of a stock dividend, subdivision,
reclassification, recapitalization, merger, consolidation, stock split,
combination or exchange of stock, or other similar circumstances not involving
the receipt of consideration by the Company, then in each such event, the
Committee shall make an appropriate adjustment in the aggregate number of shares
of Common Stock available under the Plan, the number of shares of Common Stock
subject to each outstanding Option and the Option prices in order to prevent the
dilution or enlargement of any Optionee’s rights. In the event of any adjustment
in the number of shares of Stock covered by any Option, each such Option shall
cover only the number of full shares resulting from such adjustment. The
Committee’s determinations in making any adjustment shall be final and
conclusive.

 

(b)

Exceptions to Adjustment. Except as expressly provided herein, the issuance by
the Company of shares of Common Stock of any class, or securities convertible
into or exchangeable for shares of Common Stock of any class, upon conversion of
shares or obligations of the Company convertible into or exchangeable for shares
of Common Stock of any class shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number of shares of Common Stock
subject to any Option granted under the Plan.

3.5

RETENTION OF RIGHTS. The existence of this Plan and any Option granted pursuant
to the Plan shall not affect the right or power of the Company or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations, or other change in the Company’s capital structure or its
business, or an merger or consolidation or the Company, or any issue of bonds,
debentures, or preferred or preference stock ranking before or affecting the
Common Stock, or the dissolution of the Company or any sale or transfer of all
or any part of the Company’s assets or business, or any other corporate act or
proceeding, whether similar or not.

ARTICLE 4.

ELIGIBILITY

All full-time and part-time Employees who are responsible for the conduct and
management of its business or who are involved in endeavors significant to its
success shall be eligible to receive any Option under the Plan. Directors and
Consultants who are not Employees shall be eligible to receive any Option under
the Plan; provided that non-employee Consultants shall not be eligible to
participate in the Plan to the extent necessary to meet the requirements of an
exemption from securities registration under state law. Any Director who is
otherwise eligible to participate, who makes an election in writing not to
receive any grants under the Plan, shall not be eligible to receive any such
grants during the period set forth in such election.

 

 

Exabyte Corporation 2004 Stock Option Plan

5

 

 

--------------------------------------------------------------------------------

 

 

ARTICLE 5.

STOCK OPTION TERMS

5.1

GRANT OF OPTIONS. The Committee may from time to time in its discretion
determine which of the eligible Employees, Directors and Consultants of the
Company or its Subsidiaries should receive Options, the type of Options to be
granted, the number of shares subject to such Options, and the dates on which
such Options are to be granted.

5.2

OPTION AGREEMENT. Each Option granted under the Plan shall be evidenced by a
written Option Agreement setting forth the terms upon which the Option is
granted. Each Option Agreement shall designate the type of Options being
granted, the number of shares of Common Stock to which that Option pertains, the
Option price and such other terms as determined by the Committee. More than one
Option, and any combination of Options, may be granted to an eligible person.

 

(a)

Option Price. The Option price for Options granted under the Plan shall not be
less than 100% of the Fair Market Value of the shares subject to the Option.

 

(b)

Duration of Options. Each Option shall be of a duration as specified in the
Option Agreement, but in no event to exceed ten years.

 

(c)

Vesting. Each Option shall vest as specified in the Option Agreement.

 

 

(d)

Rights as Stockholder. An Optionee shall have no rights as a stockholder of the
Company with respect to any shares of Common Stock covered by an Option until
the date of the issuance of the stock certificate for such shares.

 

(e)

Other Terms and Conditions. The Option Agreement may contain such other
provisions, which shall not be inconsistent with the Plan, as the Committee
shall deem appropriate, including, without limitation, provisions that relate to
the Optionee’s ability to exercise an Option in whole or in part to the passage
of time or the achievement of specific goals or the occurrence of certain
events, as specified by the Committee.

5.3

NONTRANSFERABILITY. The Option is not transferable by Optionee other than by
Will or the laws of descent and distribution, and the Option shall be
exercisable during the Optionee’s lifetime only by the Optionee; provided that,
with the approval of the Company in its sole and absolute discretion, an Option
may be transferred by an Optionee solely to (1) members of the Optionee’s
immediate family (children, grandchildren, or spouse); (2) trusts for the
benefit of such family members; (3) partnerships or limited liability companies
where the only equity owners are such family members; or (4) non-profit
charitiable organizations approved by the Company. Upon any attempt to transfer,
assign, pledge, hypothecate or otherwise dispose of the Option contrary to the
provisions hereof, or upon the levy of any attachment or similar process upon
the Option, the Option shall immediately become null and void.

5.4

MANNER OF EXERCISE. Subject to the limitations and conditions of the Plan or the
Option Agreement, an Option shall be exercisable, in whole or in part, from time
to time, by the delivery to the Company (or an agent of the Company) during the
period in which such Option is exercisable of:

 

(a)

a written notice of exercise in a form acceptable to the Committee for a
specific number of shares subject to the Option, and

 

(b)

payment in full of the Option price of such specific number of shares. Payment
for the shares with respect to which an Option is exercised may be made by any
one or more of the following means:

 

(1)

cash, negotiable personal check or electronic funds transfer;

 

 

(2)

the Committee in its sole discretion may permit payment through tender of
unencumbered shares of Common Stock held by the Optionee (which, in the case of
an executive officer or director, have been held for not less than six months)
valued at their Fair Market Value on the date of exercise; provided that the
Committee may impose whatever restrictions it deems necessary or desirable with
respect to such method of payment;

 

 

 

Exabyte Corporation 2004 Stock Option Plan

6

 

 

--------------------------------------------------------------------------------

 

 

 

(3)

the Committee in its sole discretion may permit payment through the sale of the
Shares acquired on exercise of the Option through a broker-dealer to whom the
Optionee has submitted an irrevocable notice of exercise and irrevocable
instructions to deliver promptly to the Company the amount of sale or loan
proceeds sufficient to pay for such shares, together with, if requested by the
Committee, the amount of federal, state, local or foreign withholding taxes
payable by Optionee by reason of such exercise; or

 

(4)

any other form of legal consideration that may be acceptable to the Committee in
its sole discretion.

5.5

DISCRETIONARY SHARE WITHHOLDING. The Committee in its sole discretion may
provide that when taxes are to be withheld in connection with the exercise of an
Option by delivering shares of Common Stock in payment of the Option price (the
date on which such exercise occurs shall be the “Tax Date”), the Optionee may
elect to make payment for the withholding of federal, state and local taxes,
including Social Security and Medicare (“FICA”) taxes, up to the Optionee’s
marginal tax rate, by one or both of the following methods:

 

(a)

delivering part or all of the payment in previously-owned shares of Common Stock
(which shall be valued at their Fair Market Value on the Tax Date);

 

(b)

requesting the Company to withhold from those shares that would otherwise be
received upon exercise of the Option, a number of shares having a Fair Market
Value on the Tax Date equal to the amount to be withheld.

The Committee in its sole discretion may provide that the amount of tax
withholding to be satisfied by withholding shares from the Option exercise shall
be the minimum amount of taxes, including FICA taxes, required to be withheld
under federal, state and local law, or shall be the entire amount of taxes,
including FICA taxes, required to be paid by Optionee under federal, state and
local law. An election by Optionee under this section is irrevocable. Any
fractional share amount and any additional withholding not paid by the
withholding or surrender of shares must be paid in cash. If no timely election
is made, cash must be delivered to satisfy all tax withholding requirements.

5.6

TERMINATION OF CONTINUOUS SERVICE. Any vesting of the Option shall cease upon
termination of the Optionee’s Continuous Service (except as provided in Section
5.6(b) below), and the Option shall be exercisable only to the extent that it
was exercisable on the date of such termination of Continuous Service. Any
Option not exercisable as of the date of termination, and any Option or portions
thereof not exercised within the period specified herein, shall terminate.

 

(a)

Termination Other than for Cause. Subject to any limitations set forth in the
Option Agreement, and provided that the Notice of Exercise is provided prior to
the expiration of the Option, the Optionee shall be entitled to exercise the
Option (i) during the Optionee’s Continuous Service, and (ii) for a period of
three months after the date of termination of the Optionee’s Continuous Service
for reason other than Cause, or such longer period as may be set forth in the
Option Agreement.

 

(b)

Termination by Death. Notwithstanding subsection (a), if an Optionee’s
Continuous Service should terminate as a result of the Optionee’s death, the
Options held by the Optionee shall continue to vest for a period of six months
following such termination and the personal representatives of the Optionee’s
estate or the person or persons who shall have acquired the Option from the
Optionee by bequest or inheritance may exercise the Option at any time prior to
30 days after the expiration of such six-month period, but not later than the
expiration date of the Option.

 

(c)

Termination by Disability. Notwithstanding subsection (a), if an Optionee’s
Continuous Service should terminate by reason of the Optionee’s Disability, the
Optionee may exercise the Option at any time within one year after the date of
termination but not later than the expiration date of the Option.

 

(d)

Termination for Cause; Breach of Covenant Not to Compete or Nondisclosure
Agreement. Notwithstanding anything herein to the contrary, and unless otherwise
provided by the Option

 

 

 

Exabyte Corporation 2004 Stock Option Plan

7

 

 

--------------------------------------------------------------------------------

 

Agreement, unexercised Options granted to the Optionee shall terminate
immediately if the Optionee is terminated for Cause, breaches any obligation
under a covenant not to compete with the Company or any of its Subsidiaries, or
breaches any obligation under an agreement not to use or disclose proprietary
information obtained from or through the Company or any of its Subsidiaries,
upon such occurrence.

(e)

Extension of Option Termination Date. The Committee, in its sole discretion, may
extend the termination date of an Option granted under the Plan without regard
to the preceding provisions of this section. Such extension may be made in the
Option Agreement as originally executed or by amendment to the Option Agreement,
either prior to or following termination of an Optionee’s Continuous Service.
The Committee shall have no power to extend the termination date of an Option
beyond the periods provided in subsections (a), (b) and (c) prior to the
termination of the Optionee’s Continuous Service or without the approval of the
Optionee, which may be granted or withheld in the Optionee’s sole discretion.

ARTICLE 6.

CHANGE IN CONTROL

6.1

SUBSTITUTION OF OPTIONS. In the event of a Sale of the Company, any surviving
corporation or acquiring corporation may elect to assume any outstanding Option
under the Plan or substitute similar stock awards on an equitable basis of
appropriate stock of the Company, or of the surviving corporation or acquiring
corporation, which will be issuable in respect of the Common Stock (including an
award to acquire the same consideration paid to the stockholders in the Sale of
the Company) for those outstanding under the Plan. Prior to a Sale of the
Company, the Committee may, in its sole discretion, and without the consent of
Optionees, terminate any or all unexercised Options in exchange for
consideration similar to that received by stockholders of Common Stock of the
Company in the Sale of the Company transaction, less the Option price.

6.2

ACCELERATION OF VESTING. Notwithstanding any vesting requirements contained in
the Plan and except as may be otherwise provided in an Optionee’s Option
Agreement, upon the occurrence of a Change in Control and the occurrence of a
Termination Event with respect to an Optionee within one year after such Change
in Control, all outstanding Options held by such Optionee shall vest and become
exercisable in full. In the event of a Sale of the Company, the Committee may,
upon written notice to all Optionees holding Options, provide that all
unexercised Options must be exercised within a specified number of days of the
date of such notice or such Options will terminate. In response to such a
notice, an Optionee may make an irrevocable election to exercise the Optionee’s
Option contingent upon and effective as of the effective date of the Sale of the
Company. If applicable, with respect to any Option that is not assumed by the
surviving entity, such Option shall terminate if not exercised prior to such
Sale of the Company. The Committee may, in its sole discretion, accelerate the
vesting of any outstanding Option in connection with any Change in Control,
whether or not consummated.

ARTICLE 7.

ISSUANCE OF SHARES

7.1

TRANSFER OF SHARES TO OPTIONEE. As soon as practicable after an Optionee has
given the Company written notice of exercise of an Option and has otherwise met
the requirements of Section 5.2 with respect to an Option, the Company shall
register a certificate in such Optionee’s name for the number of shares of
Common Stock as to which the Option has been exercised and shall, upon the
Optionee’s request, deliver such certificate to the Optionee. In no event shall
the Company be required to transfer fractional shares to the Optionee, and in
lieu thereof, the Company may pay an amount in cash equal to the Fair Market
Value of such fractional shares on the date of exercise, as applicable. To the
extent required by applicable state securities law, the Optionee shall become
entitled to receive financial statements of the Company at least annually.

7.2

LEGEND. All certificates evidencing shares of Common Stock originally issued
pursuant to this Agreement or subsequently transferred to any person or entity,
and any shares of capital stock received in respect

 

 

 

Exabyte Corporation 2004 Stock Option Plan

8

 

 

--------------------------------------------------------------------------------

 

thereof, may bear such legends and transfer restrictions as the Company shall
deem reasonably necessary or desirable, including, without limitation, legends
restricting transfer of the Common Stock until there has been compliance with
federal and state securities laws and until the Optionee or any other holder of
the Common Stock has paid the Company such amounts as may be necessary in order
to satisfy any withholding tax liability of the Company.

7.3

COMPLIANCE WITH LAWS. If the issuance or transfer of shares by the Company would
for any reason, in the opinion of counsel for the Company, violate any
applicable federal or state laws or regulations, the Company may delay issuance
or transfer of such shares to the Optionee until compliance with such laws can
reasonably be obtained. In no event shall the Company be obligated to effect or
obtain any listing, registration, qualification, consent or approval under any
applicable federal or state laws or regulations or any contract or agreement to
which the Company is a party with respect to the issuance of any such shares.
If, after reasonable efforts, the Company is unable to obtain the authority that
counsel for the Company deems necessary for the lawful issuance and sale of
shares upon exercise of Options, the Company shall be relieved from any
liability for failure to issue and sell shares upon exercise of such Options
unless and until such authority is obtained.

ARTICLE 8.

AMENDMENT AND TERMINATION

8.1

AMENDMENT OF THE PLAN. The Board of Directors may at any time and from time to
time alter, amend, suspend or terminate the Plan or any part thereof as it may
deem proper, except that no such action shall materially diminish or impair the
rights under an Option previously granted. Subject to the terms and conditions
of the Plan, the Board of Directors may modify, extend or renew outstanding
Options granted under the Plan, or accept the surrender of outstanding Options
in substitution therefor, except that no such action shall materially diminish
or impair the rights under an Option previously granted without the consent of
the Optionee.

8.2

TERMINATION OF THE PLAN. This Plan shall not have any fixed Termination Date.
The Board of Directors may at any time suspend or terminate the Plan. No such
suspension or termination shall diminish or impair the rights under an Option
previously granted without the consent of the Optionee.

ARTICLE 9.

GENERAL PROVISIONS

9.1

WITHHOLDING OBLIGATIONS. To the extent provided by the terms of an Option
Agreement, the Optionee may satisfy any federal, state or local tax withholding
obligation relating to the exercise of an Option by any of the following means
(in addition to the Company’s right to withhold from any compensation paid to
the Optionee by the Company or its Affiliate) or by a combination of such means
(a) tendering a cash payment; (b) authorizing the Company to withhold shares of
Common Stock (valued at Fair Market Value) from the shares of Common Stock
otherwise issuable to the Optionee pursuant to Section 5.5; or (c) delivering to
the Company owned and unencumbered shares of Common Stock (valued at Fair Market
Value).

9.2

NO EMPLOYMENT RIGHTS. Nothing contained in this Plan or in any Option granted
under the Plan shall confer upon any Optionee any right with respect to the
continuation of such Optionee’s Continuous Service by the Company or any of its
Affiliates or interfere in any way with the right of the Company or any of its
Affiliates, subject to the terms of any separate employment agreement to the
contrary, at any time to terminate such Continuous Service or to increase or
decrease the compensation of the Optionee from the rate in existence at the time
of the grant of the Option.

9.3

OPTIONEES IN FOREIGN COUNTRIES. The Committee 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 may
operate to assure the viability of the benefits from Options granted to
Optionees employed in such countries and to meet the objectives of the Plan.

 

 

 

Exabyte Corporation 2004 Stock Option Plan

9

 

 

--------------------------------------------------------------------------------

 

 

9.4

OTHER EMPLOYEE BENEFITS. Unless so provided by the applicable plan, the amount
of compensation deemed to be received by an Optionee as a result of the exercise
of an Option shall not constitute earnings with respect to which any other
employee benefits of the person are determined, including without limitation
benefits under any pension, profit sharing, life insurance, or disability or
other salary continuation plan.

9.5

CONFIDENTIALITY OF INFORMATION. Information regarding the grant of Options under
this Plan is confidential and may not be shared with anyone other than the
Optionee’s immediate family and personal financial advisor and other person(s)
designated by Optionee by power of attorney or assignment.

9.6

SEVERABILITY. If any provision of this Plan is held by any court or governmental
authority to be illegal or invalid for any reason, such illegality or invalidity
shall not affect the remaining provisions. Instead, each provision held to be
illegal or invalid shall, if possible, be construed and enforced in a manner
that will give effect to the terms of such provision to the fullest extent
possible while remaining legal and valid.

9.7

GOVERNING LAW. This Plan, and all Options granted under this Plan, shall be
construed and shall take effect in accordance with the laws of the State of
Delaware without regard to conflicts of laws principles.

9.8

USE OF PROCEEDS. Any cash proceeds received by the Company from the sale of
shares of Common Stock under the Plan shall be used for general corporate
purposes.

Adopted as of the Effective Date as first set forth above.

Exabyte Corporation

By:__________________________

Title: Corporate Secretary

 

 

 

Exabyte Corporation 2004 Stock Option Plan

10