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EXHIBIT 10.9

 

GENENTECH, INC.

1999 STOCK PLAN,

AMENDED AND RESTATED AS OF 02/13/03

 

            1.  Purposes of the Plan.  The purposes of this 1999 Stock Plan are:

to attract and retain the best available personnel for positions of substantial
responsibility,

to provide additional incentive to Employees and Consultants, and

to promote the success of the Company's business.

                        Options granted under the Plan may be Incentive Stock
Options or Nonstatutory Stock Options, as determined by the Administrator at the
time of grant. Stock Purchase Rights may also be granted under the Plan.

            2.  Definitions.  As used herein, the following definitions shall
apply:

                        (a)  "Administrator" means the Board or any of its
Committees as shall be administering the Plan, in accordance with Section 4 of
the Plan.

                        (b)  "Applicable Laws" means the requirements relating
to the administration of stock option plans under U. S. state corporate laws,
U.S. federal and state securities laws, the Code, any stock exchange or
quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where Options or Stock
Purchase Rights are, or will be, granted under the Plan.

                        (c)  "Board" means the Board of Directors of the
Company.

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

                        (e)  "Committee" means a committee of Board members
appointed by the Board in accordance with Section 4 of the Plan.

                        (f)  "Common Stock" means the common stock of the
Company.

                        (g)  "Company" means Genentech, Inc., a Delaware
corporation.

                        (h)  "Director" means a member of the Board.

                        (i)  "Consultant" means any person, including an
advisor, engaged by the Company or Subsidiary to render services to such entity
but shall not include an Employee.

 

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                        (j)  "Disability" means total and permanent disability
as defined in Section 22(e)(3) of the Code.

                        (k)  "Employee" means any person, including Officers and
Directors, employed by the Company or Subsidiary of the Company. An individual
shall not cease to be an Employee in the case of (i) any leave of absence
approved by the Company or (ii) transfers between locations of the Company or
between the Company, any Subsidiary, or any successor. For purposes of Incentive
Stock Options, no such leave may exceed ninety days, unless reemployment upon
expiration of such leave is guaranteed by statute or contract. If reemployment
upon expiration of a leave of absence approved by the Company is not so
guaranteed, then three (3) months following the 91st day of such leave any
Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory
Stock Option. Neither service as a Director nor payment of a director's fee by
the Company shall be sufficient to constitute "employment" by the Company.

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

                        (m)  "Exchange Program" means a program under which (i)
the exercise price of an outstanding Option is immediately reduced (and the
Option otherwise is unchanged) or (ii) an Option is canceled in exchange for a
new Option with the same terms except that the new Option is granted at a lower
exercise price. No action described in Section 13 shall be considered part of an
Exchange Program.

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

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

                                    (ii)  If the Common Stock 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
high bid and low asked prices for the Common Stock on the day of determination,
as reported in The Wall Street Journal or such other source as the Administrator
deems reliable; or

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

                        (o)  "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.

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

 

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                        (q)  "Notice of Grant" means a written or electronic
notice evidencing certain terms and conditions of an individual Option or Stock
Purchase Right grant. The Notice of Grant is part of the Option Agreement.

                        (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.

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

                        (t)  "Option Agreement" means an agreement between the
Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of the
Plan.

                        (u)  "Optioned Stock" means the Common Stock subject to
an Option or Stock Purchase Right.

                        (v)  "Optionee" means the holder of an outstanding
Option or Stock Purchase Right granted under the Plan.

                        (w)  "Parent" means a "parent corporation," whether now
or hereafter existing, as defined in Section 424(e) of the Code.

                        (x)  "Plan" means this 1999 Stock Plan, as amended and
restated.

                        (y)  "Restricted Stock" means shares of Common Stock
acquired pursuant to a grant of Stock Purchase Rights under Section 11 of the
Plan.

                        (z)  "Restricted Stock Purchase Agreement" means a
written agreement between the Company and the Optionee evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase Right. The
Restricted Stock Purchase Agreement is subject to the terms and conditions of
the Plan and the Notice of Grant.

                        (aa)  "Retirement" means a Service Provider who leaves
the employment of the Company after reaching age sixty-five (65).

                        (bb)  "Rule 16b-3" means Rule 16b-3 of the Exchange Act
or any successor to Rule 16b-3, as in effect when discretion is being exercised
with respect to the Plan.

                        (cc)  "Section 16(b)" means Section 16(b) of the
Exchange Act.

                        (dd)  "Service Provider" means an Employee, Director or
Consultant.

                        (ee)  "Share" means a share of the Common Stock, as
adjusted in accordance with Section 13 of the Plan.

                        (ff)  "Stock Purchase Right" means the right to purchase
Common Stock pursuant to Section 11 of the Plan, as evidenced by a Notice of
Grant.

 

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                        (gg)  "Subsidiary" means a "subsidiary corporation",
whether now or hereafter existing, as defined in Section 424(f) of the Code.

            3.  Stock Subject to the Plan. Subject to the provisions of Section
13 of the Plan, the maximum aggregate number of Shares that may be optioned and
sold under the Plan is 88,000,000 Shares. The Shares may be authorized, but
unissued, or reacquired Common Stock.

                        If an Option or Stock Purchase Right expires or becomes
unexercisable without having been exercised in full, the unpurchased Shares
which were subject thereto shall become available for future grant or sale under
the Plan (unless the Plan has terminated); provided, however, that Shares that
have actually been issued under the Plan, whether upon exercise of an Option or
Right, shall not be returned to the Plan and shall not become available for
future distribution under the Plan, except that if Shares of Restricted Stock
are repurchased by the Company at their original purchase price, such Shares
shall become available for future grant under the Plan.

            4.  Administration of the Plan.

                        (a)  Procedure.

                                    (i)  Multiple Administrative Bodies. The
Plan may be administered by different Committees with respect to different
groups of Service Providers.

                                    (ii)  Section 162(m). To the extent that the
Administrator determines it to be desirable to qualify Options granted hereunder
as "performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.

                                    (iii)  Rule 16b-3. To the extent desirable
to qualify transactions hereunder as exempt under Rule 16b-3, the transactions
contemplated hereunder shall be structured to satisfy the requirements for
exemption under Rule 16b-3.

                                    (iv)  Other Administration. Other than as
provided above, the Plan shall be administered by (A) the Board or (B) a
Committee, which committee shall be constituted to satisfy Applicable Laws.

                        (b)  Powers of the Administrator. Subject to the
provisions of the Plan, and in the case of a Committee, subject to the specific
duties delegated by the Board to such Committee, the Administrator shall have
the authority, in its discretion:

                                    (i)  to determine the Fair Market Value;

                                    (ii)  to select the Service Providers to
whom Options and Stock Purchase Rights may be granted hereunder;

                                    (iii)  to determine the number of shares of
Common Stock to be covered by each Option and Stock Purchase Right granted
hereunder;

                                    (iv)   to approve forms of agreement for use
under the Plan;

 

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                                    (v)  to determine the terms and conditions,
not inconsistent with the terms of the Plan, of any Option or Stock Purchase
Right granted hereunder. Such terms and conditions include, but are not limited
to, the exercise price, the time or times when Options or Stock Purchase Rights
may be exercised (which may be based on performance criteria), any vesting
acceleration or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Option or Stock Purchase Right or the shares of Common
Stock relating thereto, based in each case on such factors as the Administrator,
in its sole discretion, shall determine;

                                    (vi)  to construe and interpret the terms of
the Plan and awards granted pursuant to the Plan;

                                    (vii)  to prescribe, amend and rescind rules
and regulations relating to the Plan, including rules and regulations relating
to sub-plans established for the purpose of qualifying for preferred treatment
under foreign laws;

                                    (viii)  to modify or amend each Option or
Stock Purchase Right (subject to Section 15(c) of the Plan), including the
discretionary authority to extend the post-termination exercisability period of
Options longer than is otherwise provided for in the Plan;

                                    (ix)  to allow Optionees to satisfy
withholding tax obligations by electing to have the Company withhold from the
Shares to be issued upon exercise of an Option or Stock Purchase Right that
number of Shares having a Fair Market Value equal to (or less than) the minimum
amount required to be withheld. The Fair Market Value of the Shares to be
withheld shall be determined on the date that the amount of tax to be withheld
is to be determined. All elections by an Optionee to have Shares withheld for
this purpose shall be made in such form and under such conditions as the
Administrator may deem necessary or advisable;

                                    (x)  to authorize any person to execute on
behalf of the Company any instrument required to effect the grant of an Option
or Stock Purchase Right previously granted by the Administrator;

                                    (xi)  to make all other determinations
deemed necessary or advisable for administering the Plan.

                       (c)  Effect of Administrator's Decision. The
Administrator's decisions, determinations and interpretations shall be final and
binding on all Optionees and any other holders of Options or Stock Purchase
Rights.

                        (d)  Shareholder Approval Requirement for Exchange
Program. Notwithstanding any contrary provision of the Plan, the Administrator
shall not implement an Exchange Program without the approval of the Company's
shareholders.

            5.  Eligibility. Nonstatutory Stock Options and Stock Purchase
Rights may be granted to Service Providers. Incentive Stock Options may be
granted only to Employees.

            6.  Limitations.

                        (a) Each Option shall be designated in the Option
Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designation, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.

 

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                        (b)  Neither the Plan nor any Option or Stock Purchase
Right shall confer upon an Optionee any right with respect to continuing the
Optionee's relationship as a Service Provider with the Company, nor shall they
interfere in any way with the Optionee's right or the Company's right to
terminate such relationship at any time, with or without cause.

                        (c)  The following limitations shall apply to grants of
Options:

                                    (i) No Service Provider shall be granted, in
any fiscal year of the Company, Options to purchase more than 2,000,000 Shares.

                                    (ii)  In connection with his or her initial
service, a Service Provider may be granted Options to purchase up to an
additional 1,000,000 Shares which shall not count against the limit set forth in
subsection (i) above.

                                    (iii)  The foregoing limitations shall be
adjusted proportionately in connection with any change in the Company's
capitalization as described in Section 13.

            7.  Term of Plan. The Plan shall become effective upon its adoption
by the Board. It shall continue in effect for a term of ten (10) years unless
terminated earlier under Section 15 of the Plan.

            8.  Term of Option. The term of each Option shall be stated in the
Option Agreement. In the case of an Incentive Stock Option, the term shall be
ten (10) years from the date of grant or such shorter term as may be provided in
the Option Agreement. Moreover, in the case of an Incentive Stock Option granted
to an Optionee who, at the time the Incentive Stock Option is granted, owns
stock representing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
term of the Incentive Stock Option shall be five (5) years from the date of
grant or such shorter term as may be provided in the Option Agreement.

            9.  Option Exercise Price and Consideration.

                        (a)  Exercise Price. The per share exercise price for
the Shares to be issued pursuant to exercise of an Option shall be determined by
the Administrator, subject to the following:

                                    (i)  In the case of an Incentive Stock
Option, the per Share exercise price shall be no less than 100% of the Fair
Market Value per Share on the date of grant.

                                    (ii)  In the case of a Nonstatutory Stock
Option, the per Share exercise price shall be determined by the Administrator.
In the case of a Nonstatutory Stock Option intended to qualify as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the per Share exercise price shall be no less than 100% of the Fair Market
Value per Share on the date of grant.

 

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                                    (iii)  Notwithstanding the foregoing,
Options may be granted with a per Share exercise price of less than 100% of the
Fair Market Value per Share on the date of grant pursuant to a merger or other
corporate transaction.

                        (b)  Waiting Period and Exercise Dates. At the time an
Option is granted, the Administrator shall fix the period within which the
Option may be exercised and shall determine any conditions that must be
satisfied before the Option may be exercised.

                        (c)  Form of Consideration. The Administrator shall
determine the acceptable form of consideration for exercising an Option,
including the method of payment. In the case of an Incentive Stock Option, the
Administrator shall determine the acceptable form of consideration at the time
of grant. Such consideration may consist entirely of:

                                    (i)  cash;

                                    (ii)  check;

                                    (iii)  promissory note;

                                    (iv)  other Shares which (A) in the case of
Shares acquired upon exercise of an option, have been owned by the Optionee for
more than six months on the date of surrender, and (B) have a Fair Market Value
on the date of surrender equal to the aggregate exercise price of the Shares as
to which said Option shall be exercised;

                                    (v)  consideration received by the Company
under a cashless exercise program implemented by the Company in connection with
the Plan;

                                    (vi)  a reduction in the amount of any
Company liability to the Optionee, including any liability attributable to the
Optionee's participation in any Company-sponsored deferred compensation program
or arrangement;

                                    (vii)  any combination of the foregoing
methods of payment; or

                                    (viii)   such other consideration and method
of payment for the issuance of Shares to the extent permitted by Applicable
Laws.

            10.  Exercise of Option.

                        (a)  Procedure for Exercise; Rights as a Shareholder.
Any Option granted hereunder shall be exercisable according to the terms of the
Plan and at such times and under such conditions as determined by the
Administrator and set forth in the Option Agreement. Unless the Administrator
provides in writing otherwise, vesting of Options granted hereunder shall be
suspended during any unpaid leave of absence. An Option may not be exercised for
a fraction of a Share.

 

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                                    An Option shall be deemed exercised when the
Company receives: (i) written or electronic notice of exercise (in accordance
with the Option Agreement) from the person entitled to exercise the Option, and
(ii) full payment for the Shares with respect to which the Option is exercised.
Full payment may consist of any consideration and method of payment authorized
by the Administrator and permitted by the Option Agreement and the Plan. Shares
issued upon exercise of an Option shall be issued in the name of the Optionee
or, if requested by the Optionee, in the name of the Optionee, his or her spouse
or in any other name or names designated by Optionee. Until the Shares are
issued (as evidenced by the appropriate entry on the books of the Company or of
a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided
in Section 13 of the Plan.

                                    Exercising an Option in any manner shall
decrease the number of Shares thereafter available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.

                        (b)  Termination of Relationship as a Service Provider.
If an Optionee ceases to be a Service Provider, other than upon the Optionee's
death, Disability, or Retirement, the Optionee may exercise his or her Option
within such period of time as is specified in the Option Agreement to the extent
that the Option is vested on the date of termination (but in no event later than
the expiration of the term of such Option as set forth in the Option Agreement).
In the absence of a specified time in the Option Agreement, the Option shall
remain exercisable for three (3) months following the Optionee's termination.
If, on the date of termination, the Optionee is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option shall
revert to the Plan. If, after termination, the Optionee does not exercise his or
her Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

                        (c)  Disability of Optionee. If an Optionee ceases to be
a Service Provider as a result of the Optionee's Disability, the Optionee may
exercise his or her Option within such period of time as is specified in the
Option Agreement to the extent the Option is vested on the date Optionee ceases
to be a Service Provider (but in no event later than the expiration of the term
of such Option as set forth in the Option Agreement). In the absence of a
specified time in the Option Agreement, the Option shall remain exercisable for
twelve (12) months following the date the Optionee ceases to be a Service
Provider. If, on the date Optionee ceases to be a Service Provider, the Optionee
is not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after Optionee ceases to be
a Service Provider, the Optionee 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 the Plan.

                        (d)  Death of Optionee. Unless otherwise provided by the
Administrator or in any Option Agreement, immediately upon Optionee's death, the
Option shall automatically accelerate and become fully-vested for all of the
Shares covered by such Option, and the expiration date of the Option shall
automatically be extended to the expiration date of the Option term specified in
the Option Agreement. If an Optionee dies while a Service Provider, the Option
may be exercised by the Optionee's designated beneficiary, provided such
beneficiary has been designated prior to Optionee's death in a form acceptable
by the Administrator. If no such beneficiary has been designated by the
Optionee, then such Option may be exercised by the personal representative of
the Optionee's estate or by the person or persons to whom the Option is
transferred pursuant to the Optionee's will or in accordance with the laws of
descent and distribution. If the Option is not exercised following Optionee's
death within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

 

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                        (e)  Retirement of Optionee. Unless otherwise provided
by the Administrator or in any Option Agreement, immediately upon Optionee's
Retirement, the Option shall automatically accelerate and become fully-vested
for that number of Shares covered by such Option which would otherwise vest
during the twelve (12) month period immediately following the date of Retirement
had the Optionee remained a Service Provider during that period, and the
expiration date of the Option shall automatically be extended to the expiration
date of the Option term specified in the Option Agreement. In the event Optionee
ceases to be a Service Provider by reason of Retirement, the Option may continue
to be exercised by Optionee during the terms of the Option. If the Option is not
exercised following Optionee's Retirement within the time specified, the Option
shall terminate, and the Shares covered by such Option shall revert to the Plan.

                        (f)  Buyout Provisions. The Administrator may at any
time offer to buy out for a payment in cash or Shares an Option previously
granted based on such terms and conditions as the Administrator shall establish
and communicate to the Optionee at the time that such offer is made.

            11.  Stock Purchase Rights.

                        (a)  Rights to Purchase. Stock Purchase Rights may be
issued either alone, in addition to, or in tandem with other awards granted
under the Plan and/or cash awards made outside of the Plan. After the
Administrator determines that it will offer Stock Purchase Rights under the
Plan, it shall advise the offeree in writing or electronically, by means of a
Notice of Grant, of the terms, conditions and restrictions related to the offer,
including the number of Shares that the offeree shall be entitled to purchase,
the price to be paid, and the time within which the offeree must accept such
offer. The offer shall be accepted by execution of a Restricted Stock Purchase
Agreement in the form determined by the Administrator.

                        (b)  Repurchase Option. Unless the Administrator
determines otherwise, the Restricted Stock Purchase Agreement shall grant the
Company a repurchase option exercisable upon the voluntary or involuntary
termination of the purchaser's service with the Company for any reason
(including death or Disability). Unless the Administrator determines otherwise,
the purchase price for Shares repurchased pursuant to the Restricted Stock
Purchase Agreement shall be the original price paid by the purchaser and may be
paid by cancellation of any indebtedness of the purchaser to the Company. The
repurchase option shall lapse at a rate or under such conditions as shall be
determined by the Administrator and set forth in the Restricted Stock Purchase
Agreement.

                        (c)  Other Provisions. The Restricted Stock Purchase
Agreement shall contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Administrator in its sole
discretion.

 

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                        (d)  Rights as a Shareholder. Once the Stock Purchase
Right is exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.

            12.  Transferability of Options and Stock Purchase Rights. Unless
determined otherwise by the Administrator, an Option or Stock Purchase Right may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, such Option
or Stock Purchase Right shall contain such additional terms and conditions as
the Administrator deems appropriate.

            13.  Adjustments Upon Changes in Capitalization, Dissolution, Merger
or Asset Sale.

                        (a)  Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the number of shares of Common Stock
covered by each outstanding Option and Stock Purchase Right, and the number of
shares of Common Stock which have been authorized for issuance under the Plan
but as to which no Options or Stock Purchase Rights have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option or Stock Purchase Right, as well as the price per share of Common Stock
covered by each such outstanding Option or Stock Purchase Right, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock subject to an
Option or Stock Purchase Right.

                        (b)  Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, the Administrator shall
notify each Optionee as soon as practicable prior to the effective date of such
proposed transaction. The Administrator in its discretion may provide for an
Optionee to have the right to exercise his or her Option until ten (10) days
prior to such transaction as to all of the Optioned Stock covered thereby,
including Shares as to which the Option would not otherwise be exercisable. In
addition, the Administrator may provide that any Company repurchase option
applicable to any Shares purchased upon exercise of an Option or Stock Purchase
Right shall lapse as to all such Shares, provided the proposed dissolution or
liquidation takes place at the time and in the manner contemplated. To the
extent it has not been previously exercised, an Option or Stock Purchase Right
will terminate immediately prior to the consummation of such proposed action.

 

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                        (c)  Merger or Asset Sale. In the event of a merger of
the Company with or into another corporation, or the sale of substantially all
of the assets of the Company, each outstanding Option and Stock Purchase Right
shall be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event
that the successor corporation refuses to assume or substitute for the Option or
Stock Purchase Right, the Optionee shall fully vest in and have the right to
exercise the Option or Stock Purchase Right as to all of the Optioned Stock,
including Shares as to which it would not otherwise be vested or exercisable. If
an Option or Stock Purchase Right becomes fully vested and exercisable in lieu
of assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option or Stock Purchase Right shall be fully vested and exercisable for a
period of fifteen (15) days from the date of such notice, and the Option or
Stock Purchase Right shall terminate upon the expiration of such period. For the
purposes of this paragraph, the Option or Stock Purchase Right shall be
considered assumed if, following the merger or sale of assets, the option or
right confers the right to purchase or receive, for each Share of Optioned Stock
subject to the Option or Stock Purchase Right immediately prior to the merger or
sale of assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets 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 merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option or Stock Purchase Right, for each Share
of Optioned Stock subject to the Option or Stock Purchase Right, to be solely
common stock of the successor corporation or its Parent equal in fair market
value to the per share consideration received by holders of Common Stock in the
merger or sale of assets.

            14.  Date of Grant. The date of grant of an Option or Stock Purchase
Right shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator. Notice of the determination shall be
provided to each Optionee within a reasonable time after the date of such grant.

            15.  Amendment and Termination of the Plan.

                        (a)  Amendment and Termination. The Board may at any
time amend, alter, suspend or terminate the Plan.

                        (b)  Shareholder Approval. The Company shall obtain
shareholder approval of any Plan amendment to the extent necessary and desirable
to comply with Applicable Laws.

                        (c)  Effect of Amendment or Termination. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee and
the Company. Termination of the Plan shall not affect the Administrator's
ability to exercise the powers granted to it hereunder with respect to Options
granted under the Plan prior to the date of such termination.

 

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            16.  Conditions Upon Issuance of Shares.

                        (a)  Legal Compliance. Shares shall not be issued
pursuant to the exercise of an Option or Stock Purchase Right unless the
exercise of such Option or Stock Purchase Right and the issuance and delivery of
such Shares shall comply with Applicable Laws and shall be further subject to
the approval of counsel for the Company with respect to such compliance.

                        (b)  Investment Representations. As a condition to the
exercise of an Option or Stock Purchase Right, the Company may require the
person exercising such Option or Stock Purchase Right to represent and warrant
at the time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is
required.

            17.  Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

            18.  Reservation of Shares. The Company, during the term of this
Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.

 

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