exv10w2






Exhibit 10.2




VNUS MEDICAL TECHNOLOGIES, INC. 

AMENDED AND RESTATED 2000 EQUITY INCENTIVE PLAN




 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	1.
	 	Purposes of the Plan	 	 	1	 
	2.
	 	Definitions	 	 	1	 
	3.
	 	Stock Subject to the Plan	 	 	5	 
	4.
	 	Administration of the Plan	 	 	5	 
	5.
	 	Eligibility	 	 	7	 
	6.
	 	Limitations	 	 	7	 
	7.
	 	Term of Plan	 	 	8	 
	8.
	 	Term of Awards	 	 	8	 
	9.
	 	Option Exercise Price and Consideration	 	 	8	 
	10.
	 	Exercise of Option	 	 	9	 
	11.
	 	Non-Transferability of Awards	 	 	12	 
	12.
	 	Granting of Options to Independent Directors	 	 	13	 
	13.
	 	Terms of Options Granted to Independent Directors	 	 	13	 
	14.
	 	Stock Purchase Rights	 	 	13	 
	15.
	 	Restricted Stock Units	 	 	14	 
	16.
	 	Adjustments upon Changes in Capitalization, Merger or Asset Sale	 	 	15	 
	17.
	 	Time of Granting Awards	 	 	17	 
	18.
	 	Amendment and Termination of the Plan	 	 	17	 
	19.
	 	Inability to Obtain Authority	 	 	18	 
	20.
	 	Reservation of Shares	 	 	19	 
	21.
	 	Repurchase Provisions	 	 	19	 
	22.
	 	Investment Intent	 	 	19	 
	23.
	 	Governing Law	 	 	19	 






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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.



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     (i) “Common Stock” means the Common Stock of the Company, par value $0.001 per
share.




     (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.




     (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) “Equity Restructuring” shall mean a non-reciprocal transaction between the
Company and its stockholders, such as a stock dividend, stock split, spin-off, rights
offering or recapitalization through a large, nonrecurring cash dividend, that affects the
shares of Common Stock (or other securities of the Company) or the share price of Common
Stock (or other securities) and causes a change in the per share value of the Common Stock
underlying outstanding awards granted under the Plan.




     (o) “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.




     (p) “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 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



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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.




     (q) “Holder” means a person who has been granted or awarded an Award or who
holds Shares acquired pursuant to an Award.




     (r) “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.




     (s) “Independent Director” means a Director who is not an Employee of the
Company.




     (t) “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.




     (u) “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.




     (v) “Option” means a stock option granted pursuant to the Plan.




     (w) “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.




     (x) “Plan” means the VNUS Medical Technologies, Inc. Amended and Restated 2000
Equity Incentive Plan.




     (y) “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.



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     (z) “Restricted Stock Unit” means a right to receive a specified number of
Shares awarded pursuant to Section 15 below.




     (aa) “Rule 16b-3” means that certain Rule 16b-3 under the Exchange Act, as such
Rule may be amended from time to time.




     (bb) “Section 16(b)” means Section 16(b) of the Exchange Act, as such Section
may be amended from time to time.




     (cc) “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.




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




     (ee) “Share” means a share of Common Stock, as adjusted in accordance with
Section 16 below.




     (ff) “Stock Purchase Right” means a right to purchase Common Stock pursuant to
Section 14 below.




     (gg) “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.



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     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 (the “ISO Issuance Limit”). 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 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.



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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;



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     (ix) to amend the Plan or any Award granted under the Plan as provided in
Section 18; and




     (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



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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 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.



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     (ii) In the case of a Non-Qualified Stock Option 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.




     (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
preclude the imputation of interest under the Code), payable upon such terms as may be
prescribed by the Administrator and structured to comply with Applicable Laws, (4) with the
consent of the Administrator, other Shares which (x) in the case of Shares acquired from the
Company, have been owned by the Holder for more than the amount of time which shall not
result in any adverse accounting consequences to the Company 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:




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     (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:




     (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).



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     (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
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



11









 







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 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 subject to Section 21 hereof, 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.



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     12.Granting of Awards to Independent Directors. During the term of the Plan, each person
who first becomes an Independent Director automatically shall be granted an Option to purchase nine
thousand (9,000) shares of Stock (an “Initial Option”) and an award of three thousand (3,000)
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 award of
five thousand (5,000) 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 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 RSU.



     13.Terms of Options Granted to Independent Directors. The per Share price of each
Initial 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 Initial Option and Initial RSU grant date, contingent upon the director’s continued service
on the Board through such date. Annual RSUs (as defined in Section 12) shall become vested in four
(4) equal, consecutive, quarterly installments so that such Annual RSU shall become vested in full
on the one-year anniversary of the 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.



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     (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. Subject to Section 21 hereof, the purchase
price for Shares repurchased by the Company pursuant to such repurchase right and the rate
at which such repurchase right shall 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).



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     (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 other than an Equity
Restructuring any dividend or other distribution (whether in the form of cash, Common Stock,
other securities, or other property), reorganization, merger, consolidation, 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, the ISO Issuance Limit 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:



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     (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 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) In connection with the occurrence of any Equity Restructuring, and notwithstanding
anything to the contrary in Section 16(a) and 16(b) hereof:




     (i) The number and type of securities subject to each outstanding Award and the
exercise price or grant price thereof, if applicable, will be proportionately
adjusted. The adjustments provided under this Section 16(c)(i) shall be
nondiscretionary and shall be final and binding on the affected Holder and the
Company.




     (ii) The Administrator shall make such proportionate adjustments, if any, as
the Administrator in its discretion may deem appropriate to reflect such Equity
Restructuring with respect to the aggregate number and kind of shares that may be
issued under the Plan



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(including, but not limited to, adjustments of the limitations in Section 3 hereof).




     (d) 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.




     (e) 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.




     (f) 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.



     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.



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     (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 and the ISO
Issuance Limit or extend the term of the Plan under Section 7.




     (b) Section 409A. To the extent that the Administrator determines that any
Award granted or awarded under the Plan is subject to Section 409A of the Code, the Award
Agreement shall incorporate the terms and conditions required by Section 409A of the Code.
To the extent applicable, the Plan and the Award Agreement shall be interpreted in
accordance with Section 409A of the Code and the Department of Treasury regulations and
other interpretive guidance issued thereunder. Notwithstanding any provision of the Plan to
the contrary, in the event that the Administrator determines that any Award may be subject
to Section 409A of the Code and related Department of Treasury regulations and other
interpretive guidance issued thereunder, the Administrator may adopt such amendments to the
Plan and the applicable agreement or adopt other policies and procedures (including
amendments, policies and procedures with retroactive effect), or take any other actions,
that the Administrator determines are necessary or appropriate to (a) exempt the Award from
Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided
with respect to the Award, or (b) comply with the requirements of Section 409A of the Code
and related Department of Treasury regulations and other interpretive guidance thereunder
and thereby avoid the application of any penalty taxes under such Section.




     (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 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.



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     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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