Exhibit 10.1
VNUS MEDICAL TECHNOLOGIES, INC.
AMENDED AND RESTATED 2000 EQUITY INCENTIVE PLAN

 

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TABLE OF CONTENTS

                      Page
1.
  PURPOSES OF THE PLAN     1  
2.
  DEFINITIONS     1  
3.
  STOCK SUBJECT TO THE PLAN     4  
4.
  ADMINISTRATION OF THE PLAN     4  
5.
  ELIGIBILITY     6  
6.
  LIMITATIONS     6  
7.
  TERM OF PLAN     7  
8.
  TERM OF AWARDS     7  
9.
  OPTION EXERCISE PRICE AND CONSIDERATION     7  
10.
  EXERCISE OF OPTION     8  
11.
  NON-TRANSFERABILITY OF AWARDS     10  
12.
  GRANTING OF OPTIONS TO INDEPENDENT DIRECTORS     10  
13.
  TERMS OF OPTIONS GRANTED TO INDEPENDENT DIRECTORS     11  
14.
  STOCK PURCHASE RIGHTS     11  
15.
  RESTRICTED STOCK UNITS     12  
16.
  ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, MERGER OR ASSET SALE     12  
17.
  TIME OF GRANTING AWARDS     15  
18.
  AMENDMENT AND TERMINATION OF THE PLAN     15  
19.
  INABILITY TO OBTAIN AUTHORITY     16  
20.
  RESERVATION OF SHARES     16  
21.
  REPURCHASE PROVISIONS     16  
22.
  INVESTMENT INTENT     16  
23.
  GOVERNING LAW     16  

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VNUS MEDICAL TECHNOLOGIES, INC.
AMENDED AND RESTATED 2000 EQUITY INCENTIVE PLAN
     1. Purposes of the Plan. The purposes of the VNUS Medical Technologies,
Inc. Amended and Restated 2000 Equity Incentive Plan are to attract and retain
the best available personnel for positions of substantial responsibility, to
provide additional incentive to Employees, Directors and Consultants and to
promote the success of the Company’s business. Options granted under the Plan
may be Incentive Stock Options or Non-Qualified Stock Options, as determined by
the Administrator at the time of grant. Stock Purchase Rights and Restricted
Stock Units may also be granted under the Plan.
     2. Definitions. As used herein, the following definitions shall apply:
     (a) “Acquisition” means (i) any consolidation or merger of the Company with
or into any other corporation or other entity or person in which the
stockholders of the Company prior to such consolidation or merger own less than
fifty percent (50%) of the Company’s voting power immediately after such
consolidation or merger, excluding any consolidation or merger effected
exclusively to change the domicile of the Company; or (ii) a sale of all or
substantially all of the assets of the Company.
     (b) “Administrator” means the Board or the Committee responsible for
conducting the general administration of the Plan, as applicable, in accordance
with Section 4 hereof.
     (c) “Applicable Laws” means the requirements relating to the administration
of equity compensation 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, Stock Purchase Rights or Restricted Stock
Units are granted under the Plan.
     (d) “Award” means an Option, a Stock Purchase Right or a Restricted Stock
Unit award granted to an eligible individual under the Plan.
     (e) “Award Agreement” means any written agreement, contract, or other
instrument or document evidencing an Award.
     (f) “Board” means the Board of Directors of the Company.
     (g) “Code” means the Internal Revenue Code of 1986, as amended, or any
successor statute or statutes thereto. Reference to any particular Code section
shall include any successor section.
     (h) “Committee” means a committee appointed by the Board in accordance with
Section 4 hereof.
     (i) “Common Stock” means the Common Stock of the Company, par value $0.001
per share.

 

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     (j) “Company” means VNUS Medical Technologies, Inc., a Delaware
corporation.
     (k) “Consultant” means any consultant or adviser if: (i) the consultant or
adviser renders bona fide services to the Company or any Parent or Subsidiary of
the Company; (ii) the services rendered by the consultant or adviser are not in
connection with the offer or sale of securities in a capital-raising transaction
and do not directly or indirectly promote or maintain a market for the Company’s
securities; and (iii) the consultant or adviser is a natural person who has
contracted directly with the Company or any Parent or Subsidiary of the Company
to render such services.
     (l) “Director” means a member of the Board.
     (m) “Employee” means any person, including an Officer or Director, who is
an employee (as defined in accordance with Section 3401(c) of the Code) of the
Company or any Parent or Subsidiary of the Company. A Service Provider shall not
cease to be an Employee in the case of (i) any leave of absence approved by the
Company or (ii) transfers between locations of the Company or between the
Company, its Parent, any Subsidiary, or any successor. For purposes of Incentive
Stock Options, no such leave may exceed ninety (90) days, unless reemployment
upon expiration of such leave is guaranteed by statute or contract. Neither
service as a Director nor payment of a director’s fee by the Company shall be
sufficient, by itself, to constitute “employment” by the Company.
     (n) “Exchange Act” means the Securities Exchange Act of 1934, as amended,
or any successor statute or statutes thereto. Reference to any particular
Exchange Act section shall include any successor section.
     (o) “Fair Market Value” means, as of any date, the value of a share 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 a share of such stock (or the closing
bid, if no sales were reported) as quoted on such exchange or system for the
last market trading day prior to the time 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, its Fair Market Value shall be the
mean between the high bid and low asked prices for a share of the Common Stock
on the last market trading day prior to the day of determination; or
     (iii) In the absence of an established market for the Common Stock, the
Fair Market Value thereof shall be determined in good faith by the
Administrator.
     (p) “Holder” means a person who has been granted or awarded an Award or who
holds Shares acquired pursuant to an Award.

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     (q) “Incentive Stock Option” means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and which
is designated as an Incentive Stock Option by the Administrator.
     (r) “Independent Director” means a Director who is not an Employee of the
Company.
     (s) “Non-Qualified Stock Option” means an Option (or portion thereof) that
is not designated as an Incentive Stock Option by the Administrator, or which is
designated as an Incentive Stock Option by the Administrator but fails to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.
     (t) “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.
     (u) “Option” means a stock option granted pursuant to the Plan.
     (v) “Parent” means any corporation, whether now or hereafter existing
(other than the Company), in an unbroken chain of corporations ending with the
Company if each of the corporations other than the last corporation in the
unbroken chain owns stock possessing more than fifty percent of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
     (w) “Plan” means the VNUS Medical Technologies, Inc. Amended and Restated
2000 Equity Incentive Plan.
     (x) “Restricted Stock” means Shares acquired pursuant to the exercise of an
unvested Option in accordance with Section 10(h) below or pursuant to a Stock
Purchase Right granted under Section 14 below.
     (y) “Restricted Stock Unit” means a right to receive a specified number of
Shares awarded pursuant to Section 15 below.
     (z) “Rule 16b-3” means that certain Rule 16b-3 under the Exchange Act, as
such Rule may be amended from time to time.
     (aa) “Section 16(b)” means Section 16(b) of the Exchange Act, as such
Section may be amended from time to time.
     (bb) “Securities Act” means the Securities Act of 1933, as amended, or any
successor statute or statutes thereto. Reference to any particular Securities
Act section shall include any successor section.
     (cc) “Service Provider” means an Employee, Director or Consultant.
     (dd) “Share” means a share of Common Stock, as adjusted in accordance with
Section 16 below.

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     (ee) “Stock Purchase Right” means a right to purchase Common Stock pursuant
to Section 14 below.
     (ff) “Subsidiary” means any corporation, whether now or hereafter existing
(other than the Company), in an unbroken chain of corporations beginning with
the Company if each of the corporations other than the last corporation in the
unbroken chain owns stock possessing more than fifty percent of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
     3. Stock Subject to the Plan. Subject to the provisions of Section 16 of
the Plan, the shares of stock subject to Awards shall be Common Stock, initially
shares of the Company’s Common Stock, par value $.001 per share. Subject to the
provisions of Section 16 of the Plan, the maximum aggregate number of Shares
which may be issued pursuant to Awards is 2,378,666 Shares; provided, however,
that, during the term of the Plan, on each December 31 (commencing with December
31, 2005), such maximum aggregate number of Shares shall be increased by the
lower of (i) 800,000 Shares, (ii) 4% of the then-outstanding shares of the
Company’s Common Stock, and (iii) such other number of Shares as determined by
the Administrator; and provided further that the maximum aggregate number of
Shares which may be issued pursuant to Awards during the term of the Plan shall
not exceed 6,378,666; and provided further, that the maximum aggregate number of
Shares that may be issued upon the exercise of Incentive Stock Options during
the term of the Plan shall not exceed 6,378,666. Shares issued pursuant to
Awards may be authorized but unissued, or reacquired Common Stock. To the extent
that an Award terminates, expires, or lapses for any reason, any shares of
Common Stock then subject to such Award shall again be available for the grant
of an Award pursuant to the Plan (unless the Plan has terminated). Shares which
are delivered by the Holder or withheld by the Company in payment of the
exercise price of an Award or tax withholding with respect to an Award, may
again be optioned, granted or awarded hereunder, subject to the limitations of
this Section 3. 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. Notwithstanding the provisions of this Section 3, no
Shares may again be optioned, granted or awarded if such action would cause an
Incentive Stock Option to fail to qualify as an Incentive Stock Option under
Code Section 422.
     4. Administration of the Plan.
     (a) Administrator. A Committee of the Board shall administer the Plan and
the Committee shall consist solely of two or more Independent Directors each of
whom is both an “outside director,” within the meaning of Section 162(m) of the
Code, and a “non-employee director” within the meaning of Rule 16b-3. Within the
scope of such authority, the Committee may (i) delegate to a committee of one or
more members of the Board who are not Independent Directors the authority to
grant awards under the Plan to eligible persons who are either (1) not then
“covered employees,” within the meaning of Section 162(m) of the Code and are
not expected to be “covered employees” at the time of recognition of income
resulting from such award or (2) not persons with respect to whom the Company
wishes to comply with Section 162(m) of the Code and/or (ii) delegate to a
committee of one or more members of the Board who are not “non-employee
directors,” within the meaning of Rule 16b-3, the authority to grant awards
under the Plan to eligible persons who are not then subject to Section 16 of the
Exchange Act. The Board may abolish the Committee at any time and revest in the
Board the

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administration of the Plan. Appointment of Committee members shall be effective
upon acceptance of appointment. Committee members may resign at any time by
delivering written notice to the Board. Vacancies in the Committee may only be
filled by the Board. Notwithstanding the foregoing, the full Board, acting by a
majority of its members in office, shall conduct the general administration of
the Plan with respect to Awards granted to Independent Directors.
     (b) Powers of the Administrator. Subject to the provisions of the Plan and
the specific duties delegated by the Board to such Committee, and subject to the
approval of any relevant authorities, the Administrator shall have the authority
in its sole discretion:
     (i) to determine the Fair Market Value;
     (ii) to select the Service Providers to whom Awards may from time to time
be granted hereunder;
     (iii) to determine the number of Shares to be covered by each such Award
granted hereunder;
     (iv) to approve forms of agreement for use under the Plan;
     (v) to determine the terms and conditions of any Award granted hereunder
(such terms and conditions include, but are not limited to, the exercise price,
the time or times when Awards may vest or be exercised (which may be based on
performance criteria), any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation regarding any Award or the
Common Stock relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine);
     (vi) to determine whether to offer to buyout a previously granted Option as
provided in subsection 10(i) and to determine the terms and conditions of such
offer and buyout (including whether payment is to be made in cash or Shares);
     (vii) to prescribe, amend and rescind rules and regulations relating to the
Plan, including rules and regulations relating to sub-plans established for the
purpose of qualifying for preferred tax treatment under foreign tax laws;
     (viii) to allow Holders to satisfy withholding tax obligations by electing
to have the Company withhold from the Shares to be issued pursuant to an Award
that number of Shares having a Fair Market Value equal to the minimum amount
required to be withheld based on the statutory withholding rates for federal and
state tax purposes that apply to supplemental taxable income. 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 Holders 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;
     (ix) to amend the Plan or any Award granted under the Plan as provided in
Section 18; and

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     (x) to construe and interpret the terms of the Plan and Awards granted
pursuant to the Plan and to exercise such powers and perform such acts as the
Administrator deems necessary or desirable to promote the best interests of the
Company which are not in conflict with the provisions of the Plan.
     (c) Effect of Administrator’s Decision. All decisions, determinations and
interpretations of the Administrator shall be final and binding on all Holders.
     5. Eligibility. Non-Qualified Stock Options, Stock Purchase Rights and
Restricted Stock Units may be granted to Service Providers. Incentive Stock
Options may be granted only to Employees. If otherwise eligible, an Employee or
Consultant who has been granted an Award may be granted additional Awards. Each
Independent Director shall be eligible to be granted Options and Restricted
Stock Units at the times and in the manner set forth in Section 12.
     6. Limitations.
     (a) Each Option shall be designated by the Administrator in the Award
Agreement as either an Incentive Stock Option or a Non-Qualified Stock Option.
However, notwithstanding such designations, to the extent that the aggregate
Fair Market Value of Shares subject to a Holder’s Incentive Stock Options and
other incentive stock options granted by the Company, any Parent or Subsidiary,
which become exercisable for the first time during any calendar year (under all
plans of the Company or any Parent or Subsidiary) exceeds $100,000, such excess
Options or other options shall be treated as Non-Qualified 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, and the Fair Market Value
of the Shares shall be determined as of the time of grant.
     (b) Neither the Plan nor any Award shall confer upon a Holder any right
with respect to continuing the Holder’s employment or consulting relationship
with the Company, nor shall they interfere in any way with the Holder’s right or
the Company’s right to terminate such employment or consulting relationship at
any time, with or without cause.
     (c) No Service Provider shall be granted, in any calendar year, Awards to
acquire more than 666,666 Shares; provided, however, that the foregoing
limitation shall not apply until the earliest of: (i) the first material
modification of the Plan (including any increase in the number of shares
reserved for issuance under the Plan in accordance with Section 3); (ii) the
issuance of all of the shares of Common Stock reserved for issuance under the
Plan; (iii) the expiration of the Plan; (iv) the first meeting of stockholders
at which Directors of the Company are to be elected that occurs after the close
of the third calendar year following the calendar year in which occurred the
first registration of an equity security of the Company under Section 12 of the
Exchange Act; or (v) such other date required by Section 162(m) of the Code and
the rules and regulations promulgated thereunder. The foregoing limitation shall
be adjusted proportionately in connection with any change in the Company’s
capitalization as described in Section 16. For purposes of this Section 6(c), if
an Award is canceled in the same calendar year it was granted (other than in
connection with a transaction described in Section 16), the canceled Award will
be counted against the limit set forth in this Section 6(c). For this purpose,
if the

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exercise price of an Option is reduced, the transaction shall be treated as a
cancellation of the Option and the grant of a new Option.
     7. Term of Plan. The Plan became effective upon its initial adoption by the
Board on May 1, 2000 and shall continue in effect until it is terminated under
Section 18 of the Plan. No Awards may be issued under the Plan on or after
April 30, 2010, the tenth (10th) anniversary of the date upon which the Plan was
adopted by the Board.
     8. Term of Awards. The term of each Award shall be stated in the Award
Agreement; provided, however, that the term shall be no more than ten (10) years
from the date of grant thereof. In the case of an Incentive Stock Option granted
to a Holder who, at the time the Option is granted, owns (or is treated as
owning under Code Section 424) stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the term of the Option shall be five (5) years from the date of
grant or such shorter term as may be provided in the Award Agreement.
     9. Option Exercise Price and Consideration.
     (a) Except as provided in Section 13, the per share exercise price for the
Shares to be issued upon exercise of an Option shall be such price as is
determined by the Administrator, but shall be subject to the following:
     (i) In the case of an Incentive Stock Option
     (A) granted to an Employee who, at the time of grant of such Option, owns
(or is treated as owning under Code Section 424) stock representing more than
ten percent (10%) of the voting power of all classes of stock of the Company or
any Parent or Subsidiary, the per Share exercise price shall be no less than one
hundred ten percent (110%) of the Fair Market Value per Share on the date of
grant.
     (B) granted to any other Employee, the per Share exercise price shall be no
less than one hundred percent (100%) of the Fair Market Value per Share on the
date of grant.
     (ii) In the case of a Non-Qualified Stock Option the per share exercise
price shall be no less than the par value of the Common Stock on the date of
grant.
     (iii) Notwithstanding the foregoing, Options may be granted with a per
Share exercise price other than as required above pursuant to a merger or other
corporate transaction.
     (b) The consideration to be paid for the Shares to be issued upon exercise
of an Option, including the method of payment, shall be determined by the
Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant). Such consideration may consist of (1) cash,
(2) check, (3) with the consent of the Administrator, a full recourse promissory
note bearing interest (at no less than such rate as shall then preclude the
imputation of interest under the Code) and payable upon such terms as may be
prescribed by the Administrator, (4) with the consent of the Administrator,
other Shares which (x) in the case of

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Shares acquired from the Company, have been owned by the Holder for more than
six (6) months on the date of surrender, and (y) have a Fair Market Value on the
date of surrender equal to the aggregate exercise price of the Shares as to
which such Option shall be exercised, (5) with the consent of the Administrator,
surrendered Shares then issuable upon exercise of the Option having a Fair
Market Value on the date of exercise equal to the aggregate exercise price of
the Option or exercised portion thereof, (6) property of any kind which
constitutes good and valuable consideration, (7) with the consent of the
Administrator, delivery of a notice that the Holder has placed a market sell
order with a broker with respect to Shares then issuable upon exercise of the
Options and that the broker has been directed to pay a sufficient portion of the
net proceeds of the sale to the Company in satisfaction of the Option exercise
price, provided, that payment of such proceeds is then made to the Company upon
settlement of such sale, or (8) with the consent of the Administrator, any
combination of the foregoing methods of payment.
     10. Exercise of Option.
     (a) Vesting; Fractional Exercises. Except as provided in Section 13,
Options granted hereunder shall be vested and exercisable according to the terms
hereof at such times and under such conditions as determined by the
Administrator and set forth in the Award Agreement. An Option may not be
exercised for a fraction of a Share.
     (b) Deliveries upon Exercise. All or a portion of an exercisable Option
shall be deemed exercised upon delivery of all of the following to the Secretary
of the Company or his or her office:
     (i) A written or electronic notice complying with the applicable rules
established by the Administrator stating that the Option, or a portion thereof,
is exercised. The notice shall be signed by the Holder or other person then
entitled to exercise the Option or such portion of the Option;
     (ii) Such representations and documents as the Administrator, in its sole
discretion, deems necessary or advisable to effect compliance with Applicable
Laws. The Administrator may, in its sole discretion, also take whatever
additional actions it deems appropriate to effect such compliance, including,
without limitation, placing legends on share certificates and issuing stop
transfer notices to agents and registrars;
     (iii) Upon the exercise of all or a portion of an unvested Option pursuant
to Section 10(h), a Restricted Stock purchase agreement in a form determined by
the Administrator and signed by the Holder or other person then entitled to
exercise the Option or such portion of the Option; and
     (iv) In the event that the Option shall be exercised pursuant to Section
10(f) by any person or persons other than the Holder, appropriate proof of the
right of such person or persons to exercise the Option.
     (c) Conditions to Delivery of Share Certificates. The Company shall not be
required to issue or deliver any certificate or certificates for Shares
purchased upon the exercise of any Option or portion thereof prior to
fulfillment of all of the following conditions:

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     (i) The admission of such Shares to listing on all stock exchanges on which
such class of stock is then listed;
     (ii) The completion of any registration or other qualification of such
Shares under any state or federal law, or under the rulings or regulations of
the Securities and Exchange Commission or any other governmental regulatory body
which the Administrator shall, in its sole discretion, deem necessary or
advisable;
     (iii) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Administrator shall, in its sole
discretion, determine to be necessary or advisable;
     (iv) The lapse of such reasonable period of time following the exercise of
the Option as the Administrator may establish from time to time for reasons of
administrative convenience; and
     (v) The receipt by the Company of full payment for such Shares, including
payment of any applicable withholding tax, which in the sole discretion of the
Administrator may be in the form of consideration used by the Holder to pay for
such Shares under Section 9(b).
     (d) Termination of Relationship as a Service Provider. If a Holder ceases
to be a Service Provider other than by reason of the Holder’s disability or
death, such Holder may exercise his or her Option within such period of time as
is specified in the Award 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 the Option as set forth in the Award Agreement). In the absence of a
specified time in the Award Agreement, the Option shall remain exercisable for
three (3) months following the Holder’s termination. If, on the date of
termination, the Holder is not vested as to his or her entire Option, the Shares
covered by the unvested portion of the Option immediately cease to be issuable
under the Option and shall again become available for issuance under the Plan.
If, after termination, the Holder does not exercise his or her Option within the
time period specified herein, the Option shall terminate, and the Shares covered
by such Option shall again become available for issuance under the Plan.
     (e) Disability of Holder. If a Holder ceases to be a Service Provider as a
result of the Holder’s disability, the Holder may exercise his or her Option
within such period of time as is specified in the Award Agreement to the extent
the Option is vested on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Award Agreement). In
the absence of a specified time in the Award Agreement, the Option shall remain
exercisable for twelve (12) months following the Holder’s termination. If such
disability is not a “disability” as such term is defined in Section 22(e)(3) of
the Code, in the case of an Incentive Stock Option such Incentive Stock Option
shall automatically cease to be treated as an Incentive Stock Option and shall
be treated for tax purposes as a Non-Qualified Stock Option from and after the
day which is three (3) months and one (1) day following such termination. If, on
the date of termination, the Holder is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option shall
immediately cease to be issuable under the Option and shall again become
available for issuance under the Plan. If, after termination, the

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Holder does not exercise his or her Option within the time specified herein, the
Option shall terminate, and the Shares covered by such Option shall again become
available for issuance under the Plan.
     (f) Death of Holder. If a Holder dies while a Service Provider, the Option
may be exercised within such period of time as is specified in the Award
Agreement (but in no event later than the expiration of the term of such Option
as set forth in the Notice of Grant), by the Holder’s estate or by a person who
acquires the right to exercise the Option by bequest or inheritance, but only to
the extent that the Option is vested on the date of death. In the absence of a
specified time in the Award Agreement, the Option shall remain exercisable for
twelve (12) months following the Holder’s termination. If, at the time of death,
the Holder is not vested as to his or her entire Option, the Shares covered by
the unvested portion of the Option shall immediately cease to be issuable under
the Option and shall again become available for issuance under the Plan. The
Option may be exercised by the executor or administrator of the Holder’s estate
or, if none, by the person(s) entitled to exercise the Option under the Holder’s
will or the laws of descent or distribution. If the Option is not so exercised
within the time specified herein, the Option shall terminate, and the Shares
covered by such Option shall again become available for issuance under the Plan.
     (g) Regulatory Extension. A Holder’s Award Agreement may provide that if
the exercise of the Option following the termination of the Holder’s status as a
Service Provider (other than upon the Holder’s death or Disability) would be
prohibited at any time solely because the issuance of shares would violate the
registration requirements under the Securities Act, then the Option shall
terminate on the earlier of (i) the expiration of the term of the Option set
forth in Section 8 or (ii) the expiration of a period of three (3) months after
the termination of the Holder’s status as a Service Provider during which the
exercise of the Option would not be in violation of such registration
requirements.
     (h) Early Exercisability. The Administrator may provide in the terms of a
Holder’s Award Agreement that the Holder may, at any time before the Holder’s
status as a Service Provider terminates, exercise the Option in whole or in part
prior to the full vesting of the Option; provided, however, that Shares acquired
upon exercise of an Option which has not fully vested may be subject to any
forfeiture, transfer or other restrictions as the Administrator may determine in
its sole discretion.
     (i) Buyout Provisions. The Administrator may at any time offer to buyout
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
Holder at the time that such offer is made.
     11. Non-Transferability of Awards. Awards 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 Holder, only by the Holder.
     12. Granting of Options to Independent Directors. During the term of the
Plan, each person who first becomes an Independent Director automatically shall
be granted an Option to

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purchase eighteen thousand (18,000) shares of Stock (an “Initial Option”) and an
award of six thousand (6,000) Restricted Stock Units (an “Initial RSU”). During
the term of the Plan, upon the date of each annual meeting of stockholders,
Independent Directors automatically shall be granted an Option to purchase nine
thousand (9,000) shares of Stock effective as of each annual meeting of
stockholders (an “Annual Option”) and an award of three thousand (3,000)
Restricted Stock Units (an “Annual RSU”); provided, he or she has served as an
Independent Director for the six (6) months prior to such annual meeting of the
stockholders and continues to serve as member of the Board upon such date. For
the avoidance of doubt, an Independent Director elected for the first time to
the Board at an annual meeting of stockholders shall only receive an Initial
Option and an Initial RSU in connection with such election, and shall not
receive an Annual Option and Annual RSU on the date following such meeting as
well. Members of the Board who are employees of the Company who subsequently
retire from the Company and remain on the Board will not receive an Initial
Option grant or Initial RSU but to the extent they are otherwise eligible, will
receive, at each annual meeting of stockholders after his or her retirement from
employment with the Company, an Annual Option grant and Annual RSU.
     13. Terms of Options Granted to Independent Directors. The per Share price
of each Initial Option and Annual Option granted to an Independent Director
shall equal 100% of the Fair Market Value of a share of Common Stock on the date
the Option is granted. Initial Options and Initial RSUs (as defined in
Section 12) will become vested in three (3) equal, consecutive, annual
installments so that the Initial Option and Initial RSU shall become vested in
full on the three year anniversary of the date of the Initial Option and Initial
RSU grant date, contingent upon the director’s continued service on the Board
through such date. Annual Options and Annual RSUs (as defined in Section 12)
shall become vested in four (4), equal, consecutive, quarterly installments so
that such Annual Option and Annual RSU shall become vested in full on the one
year anniversary of the date of Annual Option and Annual RSU grant date,
contingent upon the director’s continued service on the Board through such date.
Subject to Section 10, the term of each Option granted to an Independent
Director shall be ten (10) years from the date the Option is granted. No portion
of an Option which is unexercisable at the time of an Independent Director’s
termination of membership on the Board shall thereafter become exercisable.
     14. Stock Purchase Rights.
     (a) Rights to Purchase. Stock Purchase Rights may be issued either alone,
in addition to, or in tandem with Options 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 of the terms, conditions and restrictions related to the offer,
including the number of Shares that such person shall be entitled to purchase,
the price to be paid, and the time within which such person 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 Right. Unless the Administrator determines otherwise, the
Restricted Stock purchase agreement shall grant the Company the right to
repurchase Shares acquired upon exercise of a Stock Purchase Right upon the
termination of the purchaser’s status as a Service Provider for any reason. The
purchase price for Shares repurchased by the Company pursuant to such repurchase
right and the rate at which such repurchase right shall

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lapse shall be determined by the Administrator in its sole discretion, and shall
be 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.
     (d) Rights as a Stockholder. Once the Stock Purchase Right is exercised,
the purchaser shall have rights equivalent to those of a stockholder and shall
be a stockholder when his or her purchase is entered upon the records of the
duly authorized transfer agent of the Company. No adjustment shall 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 16 of the Plan.
     15. Restricted Stock Units.
     Any Holder selected by the Administrator may be granted an award of
Restricted Stock Units in the manner determined from time to time by the
Administrator.
     (a) Vesting. The vesting of Restricted Stock Units shall be determined by
the Administrator and may be linked to specific performance criteria determined
to be appropriate by the Administrator, in each case on a specified date or
dates or over any period or periods determined by the Administrator. Common
Stock underlying a Restricted Stock Unit award will not be issued until the
Restricted Stock Unit award has vested, pursuant to a vesting schedule or
performance criteria set by the Administrator.
     (b) Other Provisions. All Restricted Stock Units shall be subject to such
additional terms and conditions as determined by the Administrator and shall be
evidenced by a written Award Agreement. Such Award Agreement may also include
limitations regarding the distribution of payments due pursuant to such
Restricted Stock Units and may provide that such payments are subject to an
election, by a certain date, of the Holder to whom such payment is to be
awarded, to the extent such limitations and elections are required so as to not
cause any Restricted Stock Unit Award or the shares of Common Stock issuable
pursuant to any Restricted Stock Unit Award (or other amounts issuable or
distributable) to be includable in the gross income of the Holder under Section
409A of the Code prior to such times or occurrence of such events, as permitted
by the Code and the regulations and other guidance thereunder (including,
without limitation, Section 409A of the Code, and the regulations and other
guidance issued by the Secretary of the Treasury thereunder).
     (c) Rights as a Stockholder. Unless otherwise provided by the
Administrator, a Holder awarded Restricted Stock Units shall have no rights as a
Company stockholder with respect to such Restricted Stock Units until such time
as the Restricted Stock Units have vested and the Common Stock underlying the
Restricted Stock Units has been issued.
     16. Adjustments upon Changes in Capitalization, Merger or Asset Sale.
     (a) In the event that the Administrator determines that any dividend or
other distribution (whether in the form of cash, Common Stock, other securities,
or other property),

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recapitalization, reclassification, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, liquidation, dissolution, or sale, transfer, exchange or other
disposition of all or substantially all of the assets of the Company, or
exchange of Common Stock or other securities of the Company, issuance of
warrants or other rights to purchase Common Stock or other securities of the
Company, or other similar corporate transaction or event, in the Administrator’s
sole discretion, affects the Common Stock such that an adjustment is determined
by the Administrator to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended by the Company to be
made available under the Plan or with respect to any Award, then the
Administrator shall, in such manner as it may deem equitable, adjust any or all
of:
     (i) the number and kind of shares of Common Stock (or other securities or
property) with respect to which Awards may be granted or awarded (including, but
not limited to, adjustments of the limitations in Section 3 on the maximum
number and kind of shares which may be issued and adjustments of the maximum
number of Shares that may be purchased by any Holder in any calendar year
pursuant to Section 6(c));
     (ii) the number and kind of shares of Common Stock (or other securities or
property) subject to outstanding Awards; and
     (iii) the grant or exercise price with respect to any Award.
     (b) In the event of any transaction or event described in Section 16(a),
the Administrator, in its sole discretion, and on such terms and conditions as
it deems appropriate, and to the extent allowed by Section 409A of the Code and
any applicable regulations thereunder, to the extent applicable, either by the
terms of the Award or by action taken prior to the occurrence of such
transaction or event and either automatically or upon the Holder’s request, is
hereby authorized to take any one or more of the following actions whenever the
Administrator determines that such action is appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended by the
Company to be made available under the Plan or with respect to any Award granted
or issued under the Plan or to facilitate such transaction or event:
     (i) To provide for either the purchase of any such Award for an amount of
cash equal to the amount that could have been obtained upon the exercise of such
Award or realization of the Holder’s rights had such Award been currently
exercisable or payable or fully vested or the replacement of such Award with
other rights or property selected by the Administrator in its sole discretion;
     (ii) To provide that such Award shall be exercisable as to all shares
covered thereby, notwithstanding anything to the contrary in the Plan or the
provisions of such Award;
     (iii) To provide that such Award be assumed by the successor or survivor
corporation, or a parent or subsidiary thereof, or shall be substituted for by
similar options, rights or awards covering the stock of the successor or
survivor corporation, or a parent

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or subsidiary thereof, with appropriate adjustments as to the number and kind of
shares and prices;
          (iv) To make adjustments in the number and type of shares of Common
Stock (or other securities or property) subject to outstanding Awards, and/or in
the terms and conditions of (including the grant or exercise price), and the
criteria included in, outstanding Awards or Awards which may be granted in the
future; and
          (v) To provide that immediately upon the consummation of such event,
such Award shall not be exercisable and shall terminate; provided, that for a
specified period of time prior to such event, such Award shall be exercisable as
to all Shares covered thereby, and the restrictions imposed under an Award
Agreement upon some or all Shares may be terminated and, in the case of
Restricted Stock, some or all shares of such Restricted Stock may cease to be
subject to repurchase, notwithstanding anything to the contrary in the Plan or
the provisions of such Award Agreement.
     (c) Subject to Section 3, the Administrator may, in its sole discretion,
include such further provisions and limitations in any Award Agreement or Common
Stock certificate, as it may deem equitable and in the best interests of the
Company.
     (d) If the Company undergoes an Acquisition, then any surviving corporation
or entity or acquiring corporation or entity, or affiliate of such corporation
or entity, may assume any Awards outstanding under the Plan or may substitute
similar stock awards (including an award to acquire the same consideration paid
to the stockholders in the transaction described in this subsection 16(d)) for
those outstanding under the Plan. In the event any surviving corporation or
entity or acquiring corporation or entity in an Acquisition, or affiliate of
such corporation or entity, does not assume such Awards or does not substitute
similar stock awards for those outstanding under the Plan, then with respect to
(i) Awards held by participants in the Plan whose status as a Service Provider
has not terminated prior to such event, the vesting of such Awards (and, if
applicable, the time during which such awards may be exercised) shall be
accelerated and made fully exercisable and all restrictions thereon shall lapse
at least ten (10) days prior to the closing of the Acquisition (and the Awards
terminated if not exercised prior to the closing of such Acquisition), and
(ii) any other Awards outstanding under the Plan, such Awards shall be
terminated if not exercised prior to the closing of the Acquisition.
     (e) The existence of the Plan or any Award Agreement and the Awards granted
hereunder shall not affect or restrict in any way the right or power of the
Company or the stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s capital
structure or its business, any merger or consolidation of the Company, any issue
of stock or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to or
affect the Common Stock or the rights thereof or which are convertible into or
exchangeable for Common Stock, or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise.

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     17. Time of Granting Awards. The date of grant of an Award shall, for all
purposes, be the date on which the Administrator makes the determination
granting such Award, or such other date as is determined by the Administrator.
Notice of the determination shall be given to each Employee or Consultant to
whom an Award is so granted within a reasonable time after the date of such
grant.
     18. Amendment and Termination of the Plan.
     (a) Amendment and Termination. The Board may at any time wholly or
partially amend, alter, suspend or terminate the Plan. However, without approval
of the Company’s stockholders given within twelve (12) months before or after
the action by the Board, no action of the Board may, except as provided in
Section 16, increase the limits imposed in Section 3 on the maximum number of
Shares which may be issued under the Plan or extend the term of the Plan under
Section 7.
     (b) Savings Clause. Notwithstanding anything to the contrary in the Plan or
any Award Agreement relating to an outstanding Award, if and to the extent the
Administrator shall determine that the terms of any Award may result in the
failure of the such Award to comply with the requirements of Section 409A of the
Code, or any applicable regulations or guidance promulgated by the Secretary of
the Treasury in connection therewith, the Administrator shall have authority to
take such action to amend, modify, cancel or terminate the Plan or any Award as
it deems necessary or advisable, including without limitation:
     (i) any amendment or modification of the Plan or any Award to conform the
Plan or such Award to the requirements of Section 409A of the Code or any
regulations or other guidance thereunder (including, without limitation, any
amendment or modification of the terms of any Award regarding vesting, exercise,
or the timing or form of payment);
     (ii) any cancellation or termination of any unvested Award, or portion
thereof, without any payment to the Holder holding such Award; and
     (iii) any cancellation or termination of any vested Award, or portion
thereof, with immediate payment to the Holder holding such Award of the amount
otherwise payable upon the immediate exercise of any such Award, or vested
portion thereof, by such Holder.
Any such amendment, modification, cancellation, or termination of the Plan or
any Award may adversely affect the rights of a Holder with respect to such Award
without the Holder’s consent.
     (c) Stockholder Approval. The Board shall obtain stockholder approval of
any Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.
     (d) Effect of Amendment or Termination. Except as provided in Section 18(b)
above, no amendment, alteration, suspension or termination of the Plan shall
impair the rights of any Holder, unless mutually agreed otherwise between the
Holder and the Administrator, which agreement must be in writing and signed by
the Holder and the Company. Termination of the Plan shall not affect the
Administrator’s ability to exercise the powers granted

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to it hereunder with respect to Options, Stock Purchase Rights or Restricted
Stock Units granted or awarded under the Plan prior to the date of such
termination.
     19. 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.
     20. Reservation of Shares. The Company, during the term of this Plan, shall
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
     21. Repurchase Provisions. The Administrator in its sole discretion may
provide that the Company may repurchase any unvested Shares acquired upon
exercise of an Option or Stock Purchase Right upon the occurrence of certain
specified events, including, without limitation, a Holder’s termination as a
Service Provider, divorce, bankruptcy or insolvency.
     22. Investment Intent. The Company may require a Holder, as a condition of
exercising or acquiring stock under any Award, (i) to give written assurances
satisfactory to the Company as to the Holder’s knowledge and experience in
financial and business matters and/or to employ a purchaser representative
reasonably satisfactory to the Company who is knowledgeable and experienced in
financial and business matters and that he or she is capable of evaluating,
alone or together with the purchaser representative, the merits and risks of
exercising rights under any Award; and (ii) to give written assurances
satisfactory to the Company stating that the Holder is acquiring the stock
subject to the Award for the participant’s own account and not with any present
intention of selling or otherwise distributing the stock. The foregoing
requirements, and any assurances given pursuant to such requirements, shall be
inoperative if (A) the issuance of the shares upon the exercise or acquisition
of stock under the applicable Award has been registered under a then currently
effective registration statement under the Securities Act or (B) as to any
particular requirement, a determination is made by counsel for the Company that
such requirement need not be met in the circumstances under the then applicable
securities laws. The Company may, upon advice of counsel to the Company, place
legends on stock certificates issued under the Plan as such counsel deems
necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of the stock.
     23. Governing Law. The validity and enforceability of this Plan shall be
governed by and construed in accordance with the laws of the State of Delaware
without regard to otherwise governing principles of conflicts of law.

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