Exhibit
10.20


 


RIGEL
PHARMACEUTICALS, INC.


 


2001 NON-OFFICER EQUITY INCENTIVE
PLAN


ADOPTED JULY 19, 2001


AMENDED DECEMBER 13, 2002


STOCKHOLDER APPROVAL NOT REQUIRED


1.                                      PURPOSES.


(a)           Eligible Stock Award Recipients. 
The persons eligible to receive Stock Awards are the Employees (other
than Officers) and Consultants of the Company and its Affiliates.


(b)           Available Stock Awards. 
The purpose of the Plan is to provide a means by which eligible
recipients of Stock Awards may be given an opportunity to benefit from
increases in value of the Common Stock through the granting of the following
Stock Awards: (i) Nonstatutory Stock Options, (ii) stock bonus awards and (iii)
rights to acquire restricted stock.


(c)           General Purpose. 
The Company, by means of the Plan, seeks to retain the services of the
group of persons eligible to receive Stock Awards, to secure and retain the
services of new members of this group and to provide incentives for such
persons to exert maximum efforts for the success of the Company and its Affiliates.


2.                                      DEFINITIONS.


(a)           “Affiliate” means any parent corporation or subsidiary
corporation of the Company, whether now or hereafter existing, as those terms
are defined in Sections 424(e) and (f), respectively, of the Code.


(b)           “Board” means the Board of Directors of the Company.


(c)           “Code” means the Internal Revenue Code of 1986, as amended.


(d)           “Committee” means a committee of one or more members of the Board
appointed by the Board in accordance with Section 3(c).


(e)           “Common Stock” means the common stock of the Company.


(f)            “Company” means Rigel Pharmaceuticals, Inc., a Delaware
corporation.


(g)           “Consultant” means any person, including an advisor,
engaged by the Company or an Affiliate to render consulting or advisory
services and who is compensated for such services.  However, the term “Consultant” shall not include either Directors
who are not compensated by the Company for their services as Directors or
Directors who are merely paid a director’s fee by the Company for their
services as Directors.


 


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


(i)            “Director” means a member of the Board of Directors of the
Company.


(j)            “Disability” means the inability of a person, in the
opinion of a qualified physician acceptable to the Company, to perform the
major duties of such person’s position with the Company or with an Affiliate
because of the sickness or injury of such person.


(k)           “Employee” means any person employed by the Company or an
Affiliate.  Mere service as a Director
or payment of a director’s fee by the Company or an Affiliate shall not be
sufficient to constitute “employment” by the Company or an Affiliate.


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


(m)          “Fair Market Value” means, as of any date, the value of the
Common Stock determined as follows:


(i)            If the Common Stock is listed on any established stock
exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap Market,
the Fair Market Value of a share of Common Stock shall be the closing sales
price for such stock (or the closing bid if no sales were reported) as quoted
on such exchange or market (or the exchange or market with the greatest volume
of trading in the Common Stock) on the day before the date of grant (the
“determination date”, or if the determination date is not a market trading day,
then the last market trading day prior to the determination, as reported in The Wall
Street Journal  or such other source as the Board deems reliable.


(ii)           In the absence of such markets for the Common Stock,
the Fair Market Value shall be determined in good faith by the Board.


(n)           “Non-Employee Director”  means a Director who either (i) is not a
current Employee or Officer of the Company or its parent or a subsidiary, does
not receive compensation (directly or indirectly) from the Company or its
parent or a subsidiary for services rendered as a consultant or in any capacity
other than as a Director (except for an amount as to which disclosure would not
be required under Item 404(a) of Regulation S-K promulgated under the federal
securities laws (“Regulation S-K”)), does not possess an interest in any other
transaction as to which disclosure would be required under Item 404(a) of
Regulation S-K and is not engaged in a business relationship as to which
disclosure would be required under Item 404(b) of 


 


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Regulation S-K; or
(ii) is otherwise considered a “non-employee director” for purposes of Rule
16b-3.


(o)           “Nonstatutory Stock Option” means an Option not intended to qualify
as an “incentive stock option” within the meaning of Section 422 of the Code
and the regulations promulgated thereunder.


(p)           “Officer” means a person who possesses the authority of an
“officer” as that term is used in Rule 4460(i)(1)(A) of the Rules of the
National Association of Securities Dealers, Inc.  For purposes of the Plan, a person employed by the Company in the
position of “Vice President” or higher shall be classified as an “Officer”
unless the Board or Committee expressly finds that such person does not possess
the authority of an “officer” as that term is used in Rule 4460(i)(1)(A) of the
Rules of the National Association of Securities Dealers, Inc.


(q)           “Option” means a Nonstatutory Stock Option granted pursuant to
the Plan.


(r)           “Option Agreement” means a written agreement between the
Company and an Optionholder evidencing the terms and conditions of an
individual Option grant.  Each Option
Agreement shall be subject to the terms and conditions of the Plan.


(s)           “Optionholder” means a person to whom an Option is
granted pursuant to the Plan or, if applicable, such other person who holds an
outstanding Option.


(t)            “Participant” means a person to whom a Stock Award is
granted pursuant to the Plan or, if applicable, such other person who holds an
outstanding Stock Award.


(u)           “Plan” means this Rigel Pharmaceuticals, Inc. 2001
Non-Officer Equity Incentive Plan.


(v)            “Rule 16b-3” means Rule 16b-3 promulgated under the
Exchange Act or any successor to Rule 16b-3, as in effect from time to time.


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


(x)           “Stock Award” means any right granted under the Plan,
including an Option, a restricted stock purchase award and a stock bonus award.


(y)           “Stock Award Agreement” means a written agreement between the
Company and a holder of a Stock Award evidencing the terms and conditions of an
individual Stock Award grant.  Each
Stock Award Agreement shall be subject to the terms and conditions of the Plan.


3.                                      ADMINISTRATION.


(a)           Administration by Board. 
The Board shall administer the Plan unless and until the Board delegates
administration to a Committee, as provided in Section 3(c).


(b)           Powers of Board. 
The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:


 


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(i)            To determine from time to time which of the persons
eligible under the Plan shall be granted Stock Awards; when and how each Stock
Award shall be granted; what type or combination of types of Stock Award shall
be granted; the provisions of each Stock Award granted, including the time or
times when a person shall be permitted to receive Common Stock pursuant to a
Stock Award; and the number of shares of Common Stock with respect to which a
Stock Award shall be granted to each such person.


(ii)           To construe and interpret the Plan and Stock Awards
granted under it, and to establish, amend and revoke rules and regulations for
its administration.  The Board, in the
exercise of this power, may correct any defect, omission or inconsistency in
the Plan or in any Stock Award Agreement, in a manner and to the extent it
shall deem necessary or expedient to make the Plan fully effective.


(iii)         To effect, at any time and from time to time, with the
consent of any adversely affected Optionholder, (1) the reduction of the
exercise price of any outstanding Option under the Plan, (2) the cancellation
of any outstanding Option under the Plan and the grant in substitution therefor
of (A) a new Option under the Plan covering the same or a different number of
shares of Common Stock, (B) a stock bonus, (C) the right to acquire restricted
stock, and/or (D) cash, or (3) any other action that is treated as a repricing
under generally accepted accounting principles.


(iv)          To amend the Plan or a Stock Award as provided in
Section 12.


(v)            Generally, to exercise such powers and to perform such
acts as the Board deems necessary or expedient to promote the best interests of
the Company which are not in conflict with the provisions of the Plan.


(c)           Delegation to Committee.


(i)            General. 
The Board may delegate administration of the Plan to a Committee or
Committees of one (1) or more members of the Board, and the term “Committee”
shall apply to any person or persons to whom such authority has been
delegated.  If administration is
delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board,
including the power to delegate to a subcommittee any of the administrative
powers the Committee is authorized to exercise (and references in this Plan to
the Board shall thereafter be to the Committee or subcommittee), subject,
however, to such resolutions, not inconsistent with the provisions of the Plan,
as may be adopted from time to time by the Board.  The Board may abolish the Committee at any time and revest in the
Board the administration of the Plan.


(ii)           Committee Composition when Common
Stock is Publicly Traded.  At such time as the Common
Stock is publicly traded, in the discretion of the Board, a Committee may
consist solely of two or more Non-Employee Directors, in accordance with Rule
16b-3.  Within the scope of such
authority, the Board or the Committee may delegate to a committee of one or
more members of the Board who are not Non-Employee Directors the authority to
grant Stock Awards to eligible persons who are not then subject to Section 16
of the Exchange Act.


 


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(d)           Effect of Board’s Decision.  All determinations, interpretations and constructions made by the
Board in good faith shall not be subject to review by any person and shall be
final, binding and conclusive on all persons.


4.                                      SHARES SUBJECT TO THE PLAN.


(a)           Share Reserve. 
Subject to the provisions of Section 11 relating to adjustments upon
changes in Common Stock, the Common Stock that may be issued pursuant to Stock
Awards shall not exceed in the aggregate three million five hundred thousand
(3,500,000) shares of Common Stock.


(b)           Reversion of Shares to the Share
Reserve.  If any Nonstatutory Stock Option shall for
any reason expire or otherwise terminate, in whole or in part, without having
been exercised in full, the shares of Common Stock not acquired under such
Nonstatutory Stock Option shall revert to and again become available for
issuance under the Plan.


(c)           Source of Shares. 
The shares of Common Stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.


5.                                      ELIGIBILITY.


(a)           Eligibility for Specific Stock
Awards.  Stock Awards may be granted to Employees,
who are not Officers, and Consultants; provided, however, that Officers who are
not previously employed by the Company may be granted Stock Awards as an
inducement essential to such individuals entering into employment contracts
with the Company.


(b)           Consultants.


(i)            A Consultant shall not be eligible for the grant of a
Stock Award if, at the time of grant, a Form S-8 Registration Statement under
the Securities Act (“Form S-8”) is not available to register either the offer
or the sale of the Company’s securities to such Consultant because of the
nature of the services that the Consultant is providing to the Company, or
because the Consultant is not a natural person, or as otherwise provided by the
rules governing the use of Form S-8, unless the Company determines both (i)
that such grant (A) shall be registered in another manner under the Securities
Act (e.g.,
on a Form S-3 Registration Statement) or (B) does not require registration
under the Securities Act in order to comply with the requirements of the
Securities Act, if applicable, and (ii) that such grant complies with the
securities laws of all other relevant jurisdictions.


(ii)           Form S-8 generally is available to consultants and
advisors only if (i) they are natural persons; (ii) they provide bona fide
services to the issuer, its parents, its majority-owned subsidiaries or
majority-owned subsidiaries of the issuer’s parent; and (iii) the services 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 issuer’s securities.


 


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6.                                      OPTION PROVISIONS.


Each Option shall be in
such form and shall contain such terms and conditions as the Board shall deem
appropriate.  The provisions of separate
Options shall include (through incorporation of provisions hereof by reference
in the Option or otherwise) the substance of each of the following provisions:


(a)           Term.  The term of
an Option shall not exceed 10 years, either at the time of grant of the Option
or as the Option may be amended thereafter.


(b)           Exercise Price of a Nonstatutory
Stock Option.  The exercise price of each Nonstatutory
Stock Option shall be not less than the Fair Market Value of the Common Stock
subject to the Option on the date the Option is granted.


(c)           Consideration. 
The purchase price of Common Stock acquired pursuant to an Option shall
be paid, to the extent permitted by applicable statutes and regulations, either
(i) in cash or by check at the time the Option is exercised or (ii) at the
discretion of the Board at the time of the grant of the Option or at any time
prior to the time of exercise in the case of a Nonstatutory Stock Option (1) by
delivery to the Company of other Common Stock, (2) according to a deferred
payment or other similar arrangement with the Optionholder or (3) in any other
form of legal consideration that may be acceptable to the Board.  Unless otherwise specifically provided in
the Option, the purchase price of Common Stock acquired pursuant to an Option
that is paid by delivery to the Company of other Common Stock acquired,
directly or indirectly from the Company, shall be paid only by shares of the
Common Stock of the Company that have been held for more than six (6) months
(or such longer or shorter period of time required to avoid a charge to
earnings for financial accounting purposes). 
At any time that the Company is incorporated in Delaware, payment of the
Common Stock’s “par value,” as defined in the Delaware General Corporation Law,
shall not be made by deferred payment.


In the case of any
deferred payment arrangement, interest shall be compounded at least annually
and shall be charged at the market rate of interest necessary to avoid a charge
to earnings for financial accounting purposes.


(d)           Transferability of a Nonstatutory
Stock Option. A
Nonstatutory Stock Option shall not be transferable except by will or by the
laws of descent and distribution and shall be exercisable during the lifetime
of the Optionholder only by the Optionholder. 
Notwithstanding the foregoing, the Optionholder may, by delivering
written notice to the Company, in a form satisfactory to the Company, designate
a third party who, in the event of the death of the Optionholder, shall
thereafter be entitled to exercise the Option.


(e)           Vesting Generally. 
Each Option shall be evidenced by an Option Agreement executed by the
Company and the Optionholder.  The total
number of shares of Common Stock subject to an Option may vest and therefore
become exercisable as set-forth in the Option Agreement. The Option may be
subject to such other terms and conditions on the time or times when it may be
exercised (which may be based on performance or other criteria) as the Board
may deem appropriate.   The provisions
of this Section 6(e) are subject to any Option provisions 


 


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governing the
minimum number of shares of Common Stock as to which an Option may be
exercised.


(f)            Termination of Continuous Service. 
In the event an Optionholder’s Continuous Service terminates for any
reason other than upon the Optionholder’s death or Disability, the Optionholder
may exercise his or her Option (to the extent that the Optionholder was
entitled to exercise such Option as of the date of termination or as otherwise
permitted by the Company) but only within such period of time ending on the
earlier of (i) the three (3) months following such termination (or such longer
or shorter period specified in the Option Agreement), or (ii) the expiration of
the term of the Option as set forth in the Option Agreement.  If, after termination, the Optionholder does
not exercise his or her Option within the time specified in the Option
Agreement, the Option shall terminate.


(g)           Extension of Termination Date. 
An Optionholder’s Option Agreement may also provide that if the exercise
of the Option following the termination of the Optionholder’s Continuous Service
(other than upon the Optionholder’s death or Disability) would be prohibited at
any time solely because the issuance of shares of Common Stock would violate
the registration requirements under the Securities Act or similar requirements
of applicable law of another jurisdiction to which the Option is subject, then
the Option shall terminate on the earlier of (i) the expiration of the term of
the Option set forth in the Option Agreement, or (ii) the expiration of a
period of three (3) months after the termination of the Optionholder’s
Continuous Service during which the exercise of the Option would not be in
violation of such registration requirements or similar requirements.


(h)           Disability of Optionholder. 
In the event that an Optionholder’s Continuous Service terminates as a
result of the Optionholder’s Disability, the Optionholder may exercise his or
her Option (to the extent that the Optionholder was entitled to exercise such
Option as of the date of termination or as otherwise permitted by the Company),
but only within such period of time ending on the earlier of (i) the twelve
(12) months following such termination (or such longer or shorter period
specified in the Option Agreement) or (ii) the expiration of the term of the
Option as set forth in the Option Agreement. 
If, after termination, the Optionholder does not exercise his or her
Option within the time specified herein, the Option shall terminate.


(i)            Death of Optionholder. 
In the event (i) an Optionholder’s Continuous Service terminates as a
result of the Optionholder’s death or (ii) the Optionholder dies within the
period (if any) specified in the Option Agreement after the termination of the
Optionholder’s Continuous Service for a reason other than death, then the
Option may be exercised (to the extent the Optionholder was entitled to
exercise such Option as of the date of death or as otherwise permitted by the
Company) by the Optionholder’s estate, by a person who acquired the right to
exercise the Option by bequest or inheritance or by a person designated to
exercise the Option upon the Optionholder’s death pursuant to Section 6(d), but
only within the period ending on the earlier of (1) the date eighteen (18)
moths following the date of death (or such longer or shorter period specified
in the Option Agreement) or (2) the expiration of the term of such Option as
set forth in the Option Agreement.  If,
after death, the Option is not exercised within the time specified herein, the
Option shall terminate.


 


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(j)            Early Exercise. 
The Option may include a provision whereby the Optionholder may elect at
any time before the Optionholder’s Continuous Service terminates to exercise
the Option as to any part or all of the shares of Common Stock subject to the
Option prior to the full vesting of the Option.  Any unvested shares of Common Stock so purchased may be subject
to a repurchase option in favor of the Company or to any other restriction the
Board determines to be appropriate.


7.                                      PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.


(a)           Stock Bonus Awards. 
Each stock bonus agreement shall be in such form and shall contain such
terms and conditions as the Board shall deem appropriate.  The terms and conditions of stock bonus agreements
may change from time to time, and the terms and conditions of separate stock
bonus agreements shall include (through incorporation of provisions hereof by
reference in the agreement or otherwise) the substance of each of the following
provisions:


(i)            Consideration. 
A stock bonus award may be awarded in consideration for past services
actually rendered to the Company or an Affiliate for its benefit.


(ii)           Vesting. 
Shares of Common Stock awarded under the stock bonus agreement may be
subject to a share repurchase option in favor of the Company in accordance with
a vesting schedule to be determined by the Board.


(iii)         Termination of Participant’s Continuous
Service.  In the event a Participant’s Continuous
Service terminates, the Company shall automatically reacquire any or all of the
shares of Common Stock held by the Participant which have not vested as of the
date of termination under the terms of the stock bonus agreement.


(iv)          Transferability. 
Rights to acquire shares of Common Stock under the stock bonus agreement
shall be transferable by the Participant only upon such terms and conditions as
are set forth in the stock bonus agreement, as the Board shall determine in its
discretion, so long as Common Stock awarded under the stock bonus agreement
remains subject to the terms of the stock bonus agreement.


(b)           Restricted Stock Purchase Awards. 
Each restricted stock purchase agreement shall be in such form and shall
contain such terms and conditions as the Board shall deem appropriate.  The terms and conditions of the restricted
stock purchase agreements may change from time to time, and the terms and
conditions of separate restricted stock purchase agreements need not be
identical, but each restricted stock purchase agreement shall include (through
incorporation of provisions hereof by reference in the agreement or otherwise)
the substance of each of the following provisions:


(i)            Purchase Price. 
The purchase price under each restricted stock purchase agreement shall
be such amount as the Board shall determine and designate in such restricted
stock purchase agreement.


(ii)           Consideration. 
The purchase price of Common Stock acquired pursuant to the restricted
stock purchase agreement shall be paid either: 
(i) in cash at the time of 


 


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purchase; (ii) at
the discretion of the Board, according to a deferred payment or other similar
arrangement with the Participant; or (iii) in any other form of legal
consideration that may be acceptable to the Board in its discretion; provided,
however, that at any time that the Company is incorporated in Delaware, then
payment of the Common Stock’s “par value,” as defined in the Delaware General
Corporation Law, shall not be made by deferred payment.


(iii)         Vesting.  Shares of
Common Stock acquired under the restricted stock purchase agreement may be
subject to a share repurchase option in favor of the Company in accordance with
a vesting schedule to be determined by the Board.


(iv)          Termination of Participant’s
Continuous Service.  In the event a Participant’s Continuous
Service terminates, the Company may repurchase or otherwise reacquire any or
all of the shares of Common Stock held by the Participant which have not vested
as of the date of termination under the terms of the restricted stock purchase
agreement.


(v)            Transferability. 
Rights to acquire shares of Common Stock under the restricted stock
purchase agreement shall be transferable by the Participant only upon such
terms and conditions as are set forth in the restricted stock purchase
agreement, as the Board shall determine in its discretion, so long as Common
Stock awarded under the restricted stock purchase agreement remains subject to
the terms of the restricted stock purchase agreement.


8.                                      COVENANTS OF THE COMPANY.


(a)           Availability of Shares. 
During the terms of the Stock Awards, the Company shall keep available
at all times the number of shares of Common Stock required to satisfy such
Stock Awards.


(b)           Securities Law Compliance. 
The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
grant Stock Awards and to issue and sell shares of Common Stock upon exercise
of the Stock Awards; provided, however, that this undertaking shall not require
the Company to register under the Securities Act the Plan, any Stock Award or
any Common Stock issued or issuable pursuant to any such Stock Award.  If, after reasonable efforts, the Company is
unable to obtain from any such regulatory commission or agency the authority
which counsel for the Company deems necessary for the lawful issuance and sale
of Common Stock under the Plan, the Company shall be relieved from any
liability for failure to grant Stock Awards in compliance with applicable law
or to issue and sell Common Stock upon exercise of such Stock Awards unless and
until such authority is obtained.


9.                                      USE OF PROCEEDS FROM STOCK.


Proceeds from the sale of
Common Stock pursuant to Stock Awards shall constitute general funds of the
Company.


10.                               MISCELLANEOUS.


(a)           Stockholder Rights. 
No Participant shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares of Common Stock subject to
such 


 


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Stock Award unless
and until such Participant has satisfied all requirements for exercise of the
Stock Award pursuant to its terms.


(b)           No Employment or other Service
Rights.  Nothing in the Plan or any instrument
executed or Stock Award granted pursuant thereto shall confer upon any Participant
any right to continue to serve the Company or an Affiliate in the capacity in
effect at the time the Stock Award was granted or shall affect the right of the
Company or an Affiliate to terminate (i) the employment of an Employee with or
without notice and with or without cause, (ii) the service of a Consultant
pursuant to the terms of such Consultant’s agreement with the Company or an
Affiliate or (iii) the service of a Director pursuant to the Bylaws of the
Company or an Affiliate, and any applicable provisions of the corporate law of
the state in which the Company or the Affiliate is incorporated, as the case
may be.


(c)           Investment Assurances. 
The Company may require a Participant, as a condition of exercising or
acquiring Common Stock under any Stock Award, (i) to give written assurances
satisfactory to the Company as to the Participant’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 the Stock Award; and (ii) to give written assurances satisfactory to
the Company stating that the Participant is acquiring Common Stock subject to
the Stock Award for the Participant’s own account and not with any present
intention of selling or otherwise distributing the Common Stock.  The foregoing requirements, and any assurances
given pursuant to such requirements, shall be inoperative if (1) the issuance
of the shares of Common Stock upon the exercise or acquisition of Common Stock
under the Stock Award has been registered under a then currently effective
registration statement under the Securities Act or (2) 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 Common Stock.


(d)           Withholding Obligations. 
To the extent provided by the terms of a Stock Award Agreement, the
Participant may satisfy any federal, state or local tax withholding obligation
relating to the exercise or acquisition of Common Stock under a Stock Award by
any of the following means (in addition to the Company’s right to withhold from
any compensation paid to the Participant by the Company) or by a combination of
such means:  (i) tendering a cash
payment; (ii) authorizing the Company to withhold shares of Common Stock from
the shares of Common Stock otherwise issuable to the Participant as a result of
the exercise or acquisition of Common Stock under the Stock Award, provided,
however, that no shares of Common Stock are withheld with a value exceeding the
minimum amount of tax required to be withheld by law; or (iii) delivering to
the Company owned and unencumbered shares of Common Stock.


 


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11.                               ADJUSTMENTS UPON CHANGES IN STOCK.


(a)           Capitalization Adjustments. 
If any change is made in the Common Stock subject to the Plan, or
subject to any Stock Award, without the receipt of consideration by the Company
(through merger, consolidation, reorganization, recapitalization, reincorporation,
stock dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by
the Company), the Plan will be appropriately adjusted in the type, class(es)
and maximum number of securities subject to the Plan pursuant to Section 4(a),
and the outstanding Stock Awards will be appropriately adjusted in the type,
class(es) and number of securities and price per share of securities subject to
such outstanding Stock Awards.  The
Board shall make such adjustments, and its determination shall be final,
binding and conclusive.  (The conversion
of any convertible securities of the Company shall not be treated as a
transaction “without receipt of consideration” by the Company.)


(b)           Dissolution or Liquidation. 
In the event of a dissolution or liquidation of the Company, then all
outstanding Stock Awards shall terminate immediately prior to such event.


(c)           Asset Sale, Merger, Consolidation or
Reverse Merger.  In the event of (i) a sale, exchange, lease
or other disposition of all or substantially all of the assets of the Company,
(ii) a merger or consolidation in which the Company is not the surviving
corporation or (iii) a reverse merger in which the Company is the surviving
corporation but the shares of Common Stock outstanding immediately preceding
the merger are converted by virtue of the merger into other property, whether
in the form of securities, cash or otherwise (individually, a “Corporate
Transaction”), then any surviving corporation or acquiring corporation shall
assume or continue any Stock Awards outstanding under the Plan or shall
substitute similar stock awards (including an award to acquire the same
consideration paid to the stockholders in the Corporate Transaction) for those
outstanding under the Plan.  In the
event any surviving corporation or acquiring corporation refuses to assume or
continue such Stock Awards or to substitute similar stock awards for those
outstanding under the Plan, then with respect to Stock Awards held by
Participants whose Continuous Service has not terminated, the vesting of such
Stock Awards (and, if applicable, the time during which such Stock Awards may
be exercised) shall be accelerated in full, and the Stock Awards shall
terminate if not exercised (if applicable) at or prior to the Corporate
Transaction.  With respect to any other
Stock Awards outstanding under the Plan, such Stock Awards shall terminate if
not exercised (if applicable) prior to the Corporate Transaction.


12.                               AMENDMENT OF THE PLAN AND STOCK AWARDS.


(a)           Amendment of Plan. 
The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 11 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the stockholders
of the Company to the extent stockholder approval is necessary for the Plan to
satisfy any Nasdaq or securities exchange listing requirements.  The Board may in its sole discretion submit
such amendment to the Plan for stockholder approval.


 


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(b)           No Impairment of Rights. 
Rights under any Stock Award granted before amendment of the Plan shall
not be materially impaired by any amendment of the Plan unless (i) the Company
requests the consent of the Participant and (ii) the Participant consents in
writing.


(c)           Amendment of Stock Awards. 
The Board at any time, and from time to time, may amend the terms of any
one or more Stock Awards; provided, however, that the rights under any Stock
Award shall not be materially impaired by any such amendment unless (i) the
Company requests the consent of the Participant and (ii) the Participant
consents in writing.


13.                               TERMINATION OR SUSPENSION OF THE PLAN.


(a)           Plan Term. 
The Board may suspend or terminate the Plan at any time.  No Stock Awards may be granted under the
Plan while the Plan is suspended or after it is terminated.


(b)           No Impairment of Rights. 
Suspension or termination of the Plan shall not impair rights and
obligations under any Stock Award granted while the Plan is in effect except
with the written consent of the Participant.


14.                               EFFECTIVE DATE OF PLAN.


The Plan shall
become effective immediately upon its adoption by the Board.


15.                               CHOICE OF LAW.


The law of the State of
California shall govern all questions concerning the construction, validity and
interpretation of this Plan, without regard to such state’s conflict of laws
rules.


 


 


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