Exhibit
10.5


 


TANGOE, INC.


 


AMENDED AND RESTATED

EXECUTIVE STOCK OPTION/STOCK ISSUANCE PLAN


 


1.                                      Purposes of the Plan. The purposes of
this Amended and Restated Executive Stock Option/Stock
Issuance Plan are to attract and retain the best available personnel for
positions of substantial responsibility, to provide additional incentive to key
Employees and to select Directors and Consultants and to promote the success of
the Company’s business. Options granted under the Plan may be Incentive Stock
Options or Nonstatutory Stock Options, as determined by the Administrator at
the time of grant of an option and subject to the applicable provisions of Section 422
of the Code and the regulations promulgated thereunder. Stock purchase rights
may also be granted under the Plan.


 


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


 


(a)                                  “Administrator”
means the Board or its Committee
appointed pursuant to Section 4 of the Plan.


 


(b)                                 “Affiliate”
means an entity other than a Subsidiary (as defined below) which,
together with the Company, is under common control of a third person or entity.


 


(c)                                  “Applicable
Laws” means the legal requirements relating to the
administration of stock option and restricted stock purchase plans under
applicable U.S. state corporate laws, U.S. federal and applicable state
securities laws, the Code, any Stock Exchange rules or regulations and the
applicable laws of any other country or jurisdiction where Options or Stock
Purchase Rights are granted under the Plan, as such laws, rules, regulations
and requirements shall be in place from time to time.


 


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


 


(e)                                  “Cause”
for termination of a Participant’s Continuous Service Status will exist
if the Participant is terminated for any of the following reasons: (i) Participant’s
willful failure substantially to perform his or her duties and responsibilities
to the Company or deliberate violation of a Company policy; (ii) Participant’s
commission of any act of fraud, embezzlement, dishonesty or any other willful
misconduct that has caused or is reasonably expected to result in material
injury to the Company; (iii) unauthorized use or disclosure by Participant
of any proprietary information or trade secrets of the Company or any other
party to whom the Participant owes an obligation of nondisclosure as a result
of his or her relationship with the Company; or (iv) Participant’s willful
breach of any of his or her obligations under any written agreement or covenant
with the Company. The determination as to whether a Participant is being
terminated for Cause shall be made in good faith by the Company and shall be
final and binding on the Participant. The foregoing definition does not in any
way limit the Company’s ability to terminate a Participant’s employment or
consulting relationship at any time as provided in Section 5(d) below,
and the term “Company” will be interpreted to include any Subsidiary, Parent,
Affiliate or successor thereto, if appropriate.


 

















 


(f)                                    “Change
of Control” means (i) a sale of all or substantially all of
the Company’s assets, (ii) any merger or consolidation of the Company with
or into another corporation other than a merger or consolidation in which the
holders of more than 50% of the shares of capital stock of the Company
outstanding immediately prior to such transaction continue to hold (either by
the voting securities remaining outstanding or by their being converted into
voting securities of the surviving entity) more than 50% of the total voting
power represented by the voting securities of the Company, or such surviving
entity, outstanding immediately after such transaction, or (iii) any
person or group (as such terms are used in and under Section 13(d) of
the Exchange Act), other than a person or group that is a stockholder of the
Company as of December 10, 2004, becomes the beneficial owner (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing more than 50% of the total voting power
represented by the then outstanding voting securities of the Company.


 


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


 


(h)                                 “Committee”
means one or more committees or subcommittees of the Board appointed by
the Board to administer the Plan in accordance with Section 4 below.


 


(i)                                     “Common
Stock” means the Common Stock of the Company,


 


(j)                                     “Company”
means Tangoe, Inc., a Delaware corporation.


 


(k)                                  “Consultant”
means any person, including an advisor, who is engaged by the Company
or any Parent, Subsidiary or Affiliate to render services and is compensated
for such services.


 


(1)                                  “Continuous
Service Status” means the absence of any interruption or termination
of service as an Employee, Director or Consultant. Continuous Service Status
shall not be considered interrupted in the case of: (i) sick leave; (ii) military
leave; (iii) any other leave of absence approved by the Administrator,
provided that such leave is for a period of not more than ninety (90) days,
unless reemployment or reengagement upon the expiration of such leave is
guaranteed by contract or statute, or unless provided otherwise pursuant to
Company policy adopted from time to time; (iv) in the case of transfers
between locations of the Company or between the Company, its Parents,
Subsidiaries, Affiliates or their respective successors; or (v) changes in
status between service as an Employee, Director or Consultant, provided,
however, that the amendments to this definition adopted on December 10,
2004 shall not apply to Options granted prior to December 10, 2004.


 


(m)                               “Corporate
Transaction” means a sale of all or substantially all of the
Company’s assets, or a merger, consolidation or other capital reorganization of
the Company with or into another corporation and includes a Change of Control.


 


(n)                                 “Director”
means a member of the Board.


 


(o)                                 “Employee”
means any person employed by the Company or any Parent, Subsidiary or
Affiliate, with the status of employment determined based upon such factors as
are deemed appropriate by the Administrator in its discretion, subject to any


 

















 


requirements of the Code or
the Applicable Laws. The payment by the Company of a director’s fee to a
Director shall not be sufficient to constitute “employment” of such Director by
the Company.


 


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


 


(q)                                 “Fair
Market Value” means, as of any date, the fair market value of the
Common Stock, as determined by the Administrator in good faith on such basis as
it deems appropriate and applied consistently with respect to Participants.
Whenever possible, the determination of Fair Market Value shall be based upon
the closing price for the Shares as reported in the Wall Street Journal
for the applicable date.


 


(r)                                    “Incentive
Stock Option” means an Option intended to qualify as an incentive
stock option within the meaning of Section 422 of the Code, as designated
in the applicable Option Agreement.


 


(s)                                  “Involuntary
Termination” means termination of a Participant’s Continuous
Service Status under the following circumstances: (i) termination without
Cause by the Company or a Subsidiary, Parent, Affiliate or successor thereto,
as appropriate; or (ii) voluntary termination by the Participant within 60
days following (A) a material reduction in the Participant’s job
responsibilities, provided that neither a mere change in title alone nor
reassignment following a Change of Control to a position that is substantially
similar to the position held prior to the Change of Control shall constitute a
material reduction in job responsibilities; (B) relocation by the Company
or a Subsidiary, Parent, Affiliate or successor thereto, as appropriate, of the
Participant’s work site to a facility or location more than 50 miles from the
Participant’s principal work site for the Company at the time of the Change of
Control; or (C) a reduction in Participant’s then-current total
compensation by at least 15%, provided that an across-the-board reduction in
the compensation of all other Employees or Consultants in positions similar to
the Participant’s by the same percentage amount as part of a general salary
level reduction shall not constitute such a salary reduction.


 


(t)                                    “Listed
Security” means any security of the Company that is listed or
approved for listing on a national securities exchange or designated or
approved for designation as a national market system security on an interdealer
quotation system by the National Association of Securities Dealers, Inc.


 


(u)                                 “Named
Executive” means any individual who, on the last day of the
Company’s fiscal year, is the chief executive officer of the Company (or is
acting in such capacity) or among the four most highly compensated officers of
the Company (other than the chief executive officer). Such officer status shall
be determined pursuant to the executive compensation disclosure rules under
the Exchange Act.


 


(v)                                 “Nonstatutory
Stock Option” means an Option not intended to qualify as an
Incentive Stock Option, as designated in the applicable Option Agreement.


 


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


 

















 


(x)                                   “Option Agreement” means a written document,
the form(s) of which shall be approved from time to time by the
Administrator, reflecting the terms of an Option granted under the Plan and
includes any documents attached to or incorporated into such Option Agreement,
including, but not limited to, a notice of stock option grant and a form of
exercise notice.


 


(y)                                 “Option
Exchange Program” means a program approved by the Administrator
whereby outstanding Options are exchanged for Options with a lower exercise
price or are amended to decrease the exercise price as a result of a decline in
the Fair Market Value of the Common Stock.


 


(z)                                   “Optioned
Stock” means the Common Stock subject to an Option.


 


(aa)                            “Optionee”
means an Employee, Consultant or Director who receives an Option.


 


(bb)                          “Parent”
means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code, or any successor provision.


 


(cc)                            “Participant”
means any holder of one or more Options or Stock Purchase Rights, or
the Shares issuable or issued upon exercise of such awards, under the Plan.


 


(dd)                          “Plan”
means this Tangoe, Inc. Amended and Restated Executive Stock
Option/Stock Issuance Plan.


 


(ee)                            “Reporting
Person” means an officer, Director, or greater than ten
percent stockholder of the Company within the meaning of Rule 16a-2 under
the Exchange Act, who is required to file reports pursuant to Rule 16a-3
under the Exchange Act.


 


(ff)                                “Restricted
Stock” means Shares of Common Stock acquired pursuant to a
grant of a Stock Purchase Right under Section 11 below.


 


(gg)                          “Restricted
Stock Purchase Agreement” means a written document,
the form(s) of which shall be approved from time to time by the
Administrator, reflecting the terms of a Stock Purchase Right granted under the
Plan and includes any documents attached to such agreement.


 


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


 


(ii)                                  “Share”
means a share of the Common Stock, as adjusted in accordance with Section 14
of the Plan.


 


(jj)                                  “Stock
Exchange” means any national securities exchange or
consolidated stock price reporting system on which prices for the Common Stock
are quoted at any given time.


 

















 


(kk)                            “Stock
Purchase Right” means the right to purchase Common Stock pursuant
to Section 11 below.


 


(ll)                                  “Subsidiary” means a “subsidiary
corporation,” whether now or hereafter existing, as defined in Section 424(f) of
the Code, or any successor provision.


 


(mm)                      “Ten
Percent Holder” means a person who owns stock representing more
than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary.


 


3.                                       Stock Subject to the Plan. Subject to the provisions
of Section 14 of the Plan, the maximum aggregate number of Shares that may
be sold under the Plan is 4,650,000. The Shares may be authorized, but
unissued, or reacquired Shares. If an award should expire or become
unexercisable for any reason without having been exercised in full, or is surrendered
pursuant to an Option Exchange Program, the unpurchased Shares that were
subject thereto shall, unless the Plan shall have been terminated, become
available for future grant under the Plan. In addition, any Shares which are
retained by the Company upon exercise of an award in order to satisfy any
withholding taxes due with respect to such exercise or purchase shall be
treated as not issued and shall continue to be available under the Plan. Shares
issued under the Plan and later repurchased by the Company pursuant to any
repurchase right which the Company may have shall not be available for future
grant under the Plan.


 


4.                                       Administration of the Plan.


 


(a)                                  General. The Plan
shall be administered by the Board or a Committee, or a combination thereof, as
determined by the Board. The Plan may be administered by different
administrative bodies with respect to different classes of Participants and, if
permitted by the Applicable Laws, the Board may authorize one or more officers
to make awards under the Plan.


 


(b)                                 Committee
Composition. If a Committee has been appointed pursuant to this
Section 4, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board. From time to time the Board may
increase the size of any Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies (however caused) and remove all members of a Committee
and thereafter directly administer the Plan, all to the extent permitted by the
Applicable Laws and, in the case of a Committee administering the Plan in
accordance with the requirements of Rule 16b-3 or Section 162(m) of
the Code, to the extent permitted or required by such provisions.


 


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


 


(i)  to determine the Fair Market Value
of the Common Stock, in accordance with Section 2(q) of the Plan,
provided that such determination shall be applied consistently with respect to
Participants under the Plan;


 

















 


(ii)                                  to select the Employees,
Directors and Consultants to whom Options and Stock Purchase Rights may from
time to time be granted;


 


(iii)                               to determine whether and to
what extent Options and Stock Purchase Rights are granted;


 


(iv)                              to determine the number of
Shares of Common Stock to be covered by each award granted;


 


(v)                                 to approve the form(s) of
agreement(s) used under the Plan;


 


(vi)                              to determine the terms and
conditions, not inconsistent with the terms of the Plan, of any award granted
hereunder, which terms and conditions include but are not limited to the
exercise or purchase price, the time or times when awards may be exercised
(which may be based on performance criteria), any vesting, acceleration or
waiver of forfeiture restrictions, and any restriction or limitation regarding
any Option, Optioned Stock, Stock Purchase Right or Restricted Stock, based in
each case on such factors as the Administrator, in its sole discretion, shall
determine;


 


(vii)                           to determine whether and
under what circumstances an Option may be settled in cash under Section 10(c) instead
of Common Stock;


 


(viii)                        to implement an Option
Exchange Program on such terms and conditions as the Administrator in its
discretion deems appropriate, provided that no amendment or adjustment to an
Option that would materially and adversely affect the rights of any Optionee
shall be made without the prior written consent of the Optionee;


 


(ix)                                to adjust the vesting of an
Option held by an Employee, Director or Consultant as a result of a change in
the terms or conditions under which such person is providing services to the Company;


 


(x)                                   to construe and interpret
the terms of the Plan and awards granted under the Plan, which constructions,
interpretations and decisions shall be final and binding on all Participants;
and


 


(xi)                                in order to fulfill the
purposes of the Plan and without amending the Plan, to modify grants of Options
or Stock Purchase Rights to Participants who are foreign nationals or employed
outside of the United States in order to recognize differences in local law,
tax policies or customs.


 


5.                                       Eligibility.


 


(a)                                  Recipients
of Grants. Nonstatutory Stock Options and Stock Purchase
Rights may be granted to any Employee, Director or Consultant. Incentive Stock
Options may be granted only to Employees, provided that Employees of Affiliates
shall not be eligible to receive Incentive Stock Options.


 

















 


(b)                                 Type of
Option. Each Option shall be
designated in the Option Agreement as either an Incentive Stock Option or a
Nonstatutory Stock Option.


 


(c)                                  ISO
$100,000 Limitation. Notwithstanding
any designation under Section 5(b), to the extent that the aggregate Fair
Market Value of Shares with respect to which Options designated as Incentive
Stock Options are exercisable for the first time by any Optionee during any
calendar year (under all plans of the Company or any Parent or Subsidiary)
exceeds $100,000, such excess Options shall be treated as Nonstatutory Stock
Options. For purposes of this Section 5(c), Incentive Stock Options shall
be taken into account in the order in which they were granted, and the Fair
Market Value of the Shares subject to an Incentive Stock Option shall be
determined as of the date of the grant of such Option.


 


(d)                                 No
Employment Rights. The Plan shall
not confer upon any Participant any right with respect to continuation of an
employment or consulting relationship with the Company, nor shall it interfere
in any way with such Participant’s right or the Company’s right to terminate
his or her employment or consulting relationship at any time, with or without
Cause.


 


6.                                       Term of Plan. The Plan shall
become effective upon its adoption by the Board of Directors. It shall continue
in effect for a term often (10) years unless sooner terminated under Section 16
of the Plan.


 


7.                                       Term of Option. The term of
each Option shall be the term stated in the Option Agreement; provided that the
term shall be no more than ten years from the date of grant thereof or such
shorter term as may be provided in the Option Agreement and provided further
that, in the case of an Incentive Stock Option granted to a person who at the time
of such grant is a Ten Percent Holder, the term of the Option shall be five
years from the date of grant thereof or such shorter term as may be provided in
the Option Agreement.


 


8.                                       [Reserved]


 


9.                                       Option Exercise Price and Consideration.


 


(a)                                  (Exercise Price. The per Share
exercise price for the Shares to be issued pursuant to exercise of an Option
shall be such price as is determined by the Administrator and set forth in the
Option Agreement, 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 is a Ten Percent Holder, the per Share exercise price
shall be no less than 110% of the Fair Market Value per Share on the date of
grant; or


 


(B)                                granted to any other
Employee, the per Share exercise price shall be no less than 100% of the Fair
Market Value per Share on the date of grant.


 


(ii)                                  In the case of a
Nonstatutory Stock Option


 

















 


(A)                              granted prior to the date,
if any, on which the Common Stock becomes a Listed Security to a person who is
at the time of grant is a Ten Percent Holder, the per Share exercise price
shall be no less than 110% of the Fair Market Value per Share on the date of
grant if required by the Applicable Laws and, if not so required, shall be such
price as is determined by the Administrator;


 


(B)                                granted prior to the date,
if any, on which the Common Stock becomes a Listed Security to any other
eligible person, the per Share exercise price shall be no less than 85% of the
Fair Market Value per Share on the date of grant if required by the Applicable
Laws and, if not so required, shall be such price as is determined by the
Administrator; or


 


(C)                                granted on or after the
date, if any, on which the Common Stock becomes a Listed Security to any
eligible person, the per share Exercise Price shall be such price as determined
by the Administrator provided that if such eligible person is, at the time of
the grant of such Option, a Named Executive of the Company, the per share
Exercise Price shall be no less than 100% of the Fair Market Value on the date
of grant if such Option is intended to qualify as performance-based
compensation under Section 162(m) of the Code.


 


(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.


 


(iv)                              In the event an Option is
granted with an Exercise Price that is below the Fair Market Value per Share on
the date of grant, and subject to Section 12(g) below, the Option
shall be subject to any terms and conditions that the Administrator may in his
discretion determine to be necessary to avoid the income tax penalties set
forth under Section 409A of the Code.


 


(b)                                 Permissible
Consideration. 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) and may
consist entirely of (1) cash; (2) check; (3) delivery of
Optionee’s promissory note with such recourse, interest, security and
redemption provisions as the Administrator determines to be appropriate
(subject to the provisions of Section 153 of the Delaware General
Corporation Law); (4) cancellation of indebtedness; (5) other Shares
that have a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which the Option is exercised, provided that
in the case of Shares acquired, directly or indirectly, from the Company, such
Shares must have been owned by the Optionee for more than six months on the
date of surrender (or such other period as may be required to avoid the Company’s
incurring an adverse accounting charge); (6) delivery of a properly
executed exercise notice together with such other documentation as the
Administrator and a securities broker approved by the Company shall require to
effect exercise of the Option and prompt delivery to the Company of the sale or
loan proceeds required to pay the exercise price and any applicable withholding
taxes; or (7) any combination of the foregoing methods of payment. In
making its


 

















 


determination as to the type
of consideration to accept, the Administrator shall consider if acceptance of
such consideration may be reasonably expected to benefit the Company and the
Administrator may, in its sole discretion, refuse to accept a particular form
of consideration at the time of any Option exercise.


 


10.                                 Exercise of
Option.


 


(a)                                  General.


 


(i)                                     Exercisability. Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator, consistent with the term of the Plan and
reflected in the Option Agreement, including vesting requirements and/or
performance criteria with respect to the Company and/or the Optionee; provided
however that, if required by the Applicable Laws, any Option granted prior to
the date, if any, upon which the Common Stock becomes a Listed Security shall
become exercisable at the rate of at least 20% per year over five years from
the date the Option is granted. In the event that any of the Shares issued upon
exercise of an Option granted prior to the date, if any, upon which the Common
Stock becomes a Listed Security should be subject to a right of repurchase in
the Company’s favor, (A) such repurchase right shall, if required by the
Applicable Laws, lapse at the rate of at least 20% per year over five years
from the date the Option is granted, (B) the purchase price for the shares
repurchased shall be the original purchase price paid by the purchaser and may
be paid in cash or by cancellation of any indebtedness of the purchaser to the
Company and (C) the right to repurchase shall only be exercisable within
90 days of termination of Continuous Service Status (or in the case of
securities issued upon the exercise of Options, within 90 days after the date
of exercise). Notwithstanding the above, in the case of an Option granted to an
officer, Director or Consultant of the Company or any Parent, Subsidiary or
Affiliate of the Company, the Option may become fully exercisable, or a
repurchase right, if any, in favor of the Company shall lapse, at any time or
during any period established by the Administrator. The Administrator shall
have the discretion to determine whether and to what extent the vesting of
Options shall be tolled during any unpaid leave of absence; provided, however,
that in the absence of such determination, vesting of Options shall be tolled
during any such leave.


 


(ii)                                  Minimum
Exercise Requirements. An Option may
not be exercised for a fraction of a Share. The Administrator may require that
an Option be exercised as to a minimum number of Shares, provided that such
requirement shall not prevent an Optionee from exercising the full number of
Shares as to which the Option is then exercisable.


 


(iii)                               Procedures
for and Results of Exercise. An Option shall
be deemed exercised when written notice of such exercise has been given to the
Company in accordance with the terms of the Option by the person entitled to
exercise the Option and the Company has received full payment for the Shares
with respect to which the Option is exercised. Full payment may, as authorized
by the Administrator, consist of any consideration and method of payment
allowable under Section 9(b) of the


 

















 


Plan, provided that the
Administrator may, in its sole discretion, refuse to accept any form of
consideration at the time of any Option exercise.


 


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


 


(iv)                              Rights as
Stockholder. Until the issuance of the
Shares (as evidenced by the appropriate entry on the books of the Company or of
a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option. No adjustment will
be made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 14 of
the Plan.


 


(b)                                 Termination
of Continuous Service Status. Except as
otherwise set forth in this Section 10(b), the Administrator shall
establish and set forth in the applicable Option Agreement the terms and
conditions upon which an Option shall remain exercisable, if at all, following
termination of an Optionee’s Continuous Service Status, which provisions may be
waived or modified by the Administrator at any time. To the extent that the
Optionee is not entitled to exercise an Option at the date of his or her
termination of Continuous Service Status, or if the Optionee (or other person
entitled to exercise the Option) does not exercise the Option to the extent so
entitled within the time specified in the Option Agreement or below (as
applicable), the Option shall terminate and the Optioned Stock underlying the
unexercised portion of the Option shall revert to the Plan. In no event may any
Option be exercised after the expiration of the Option term as set forth in the
Option Agreement (and subject to Section 7).


 


The following provisions (1) shall apply
to the extent an Option Agreement does not specify the terms and conditions
upon which an Option shall terminate upon termination of an Optionee’s
Continuous Service Status, and (2) establish the minimum post-termination
exercise periods that may be set forth in an Option Agreement:


 


(i)                                     Termination other than Upon Disability or Death or for Cause. In the event of termination of an Optionee’s
Continuous Service Status (other than as a result of Optionee’s death or
disability or as a result of termination by the Company of the Optionee’s Continuous
Service Status for Cause), such Optionee may exercise an Option for 30 days
following such termination to the extent the Optionee was entitled to exercise
such Option at the date of such termination.


 


(ii)                                  Termination
Upon Disability of Optionee. In the event of
termination of an Optionee’s Continuous Service Status as a result of his or
her disability (including a disability within the meaning of Section 22(e)(3) of
the Code), such Optionee may exercise an Option at any time within six months
following such termination to the extent the Optionee was entitled to exercise
such Option at the date of such termination.


 














 


(iii)                               Termination
Upon Death of Optionee. In the event of the death
of an Optionee during the period of Continuous Service Status or within thirty
days following termination of Optionee’s Continuous Service Status (other than
in the case of termination for Cause), the Option may be exercised by Optionee’s
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance at any time within twelve months following the date of death,
but only to the extent of the right to exercise that had accrued at the date of
death or, if earlier, the date the Optionee’s Continuous Service Status
terminated.


 


(iv)                              Termination
for Cause. In the event of termination of an Optionee’s
Continuous Service Status by the Company for Cause, all Options held by such
Optionee shall terminate immediately upon such termination for Cause, provided,
however, that the provisions of this Section 10(b)(iv) shall not
apply to Options granted prior to December 10, 2004.


 


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


 


11.                                 Stock Purchase
Rights.


 


(a)                                  Rights to
Purchase. When 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. In the case of a Stock Purchase Right granted prior to the date, if any,
on which the Common Stock becomes a Listed Security and if required by the
Applicable Laws at that time, the purchase price of Shares subject to such
Stock Purchase Rights shall not be less than 85% of the Fair Market Value of
the Shares as of the date of the offer, or, in the case of a Ten Percent
Holder, the price shall not be less than 100% of the Fair Market Value of the
Shares as of the date of the offer. If the Applicable Laws do not impose the
requirements set forth in the preceding sentence and with respect to any Stock
Purchase Rights granted after the date, if any, on which the Common Stock
becomes a Listed Security, the purchase price of Shares subject to Stock
Purchase Rights shall be as determined by the Administrator. The offer to
purchase Shares subject to Stock Purchase Rights shall be accepted by execution
of a Restricted Stock Purchase Agreement in the form determined by the
Administrator.


 


(b)                                 Repurchase
Option. Unless the Administrator determines otherwise, the
Restricted Stock Purchase Agreement shall grant the Company a repurchase option
exercisable upon the voluntary or involuntary termination of the purchaser’s
Continuous Service Status for any reason (including death or disability). The
purchase price for Shares repurchased pursuant to the Restricted Stock Purchase
Agreement shall be the original purchase price paid by the purchaser and may be
paid in cash or by cancellation of any indebtedness of the purchaser to the
Company. The repurchase option shall lapse at such rate as the Administrator
may determine, provided that with respect to a Stock Purchase Right granted
prior to the date, if any, on which the Common Stock becomes a Listed Security
to a purchaser who is not an 


 

















 


officer, Director or
Consultant of the Company or of any Parent or Subsidiary of the Company, it shall
lapse at a minimum rate of 20% per year over five years if required by the
Applicable Laws. The right to repurchase shall only be exercisable within 90
days of termination of Continuous Service Status.


 


(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. In addition, the provisions of Restricted Stock Purchase
Agreements need not be the same with respect to each purchaser.


 


(d)                                 Rights as a Stockholder. Once the Stock Purchase Right is exercised, the
purchaser shall have the 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 will be made for a
dividend or other right for which the record date is prior to the date the
Stock Purchase Right is exercised, except as provided in Section 14 of the
Plan.


 


12.                                 Taxes.


 


(a)                                  As a condition of the
exercise of an Option or Stock Purchase Right granted under the Plan, the
Participant (or in the case of the Participant’s death, the person exercising
the Option or Stock Purchase Right) shall make such arrangements as the Administrator
may require for the satisfaction of any applicable federal, state, local or
foreign withholding tax obligations that may arise in connection with the
exercise of the Option or Stock Purchase Right and the issuance of Shares. The
Company shall not be required to issue any Shares under the Plan until such
obligations are satisfied. If the Administrator allows the withholding or
surrender of Shares to satisfy a Participant’s tax withholding obligations
under this Section 12 (whether pursuant to Section 12(c), (d) or
(e), or otherwise), the Administrator shall not allow Shares to be withheld in
an amount that exceeds the minimum statutory withholding rates for federal and
state tax purposes, including payroll taxes.


 


(b)                                 In the case of an Employee and
in the absence of any other arrangement, the Employee shall be deemed to have
directed the Company to withhold or collect from his or her compensation an
amount sufficient to satisfy such tax obligations from the next payroll payment
otherwise payable after the date of an exercise of the Option or Stock Purchase
Right.


 


(c)                                  This Section 12(c) shall
apply only after the date, if any, upon which the Common Stock becomes a Listed
Security. In the case of Participant other than an Employee (or in the case of
an Employee where the next payroll payment is not sufficient to satisfy such
tax obligations, with respect to any remaining tax obligations), in the absence
of any other arrangement and to the extent permitted under the Applicable Laws,
the Participant shall be deemed to have elected to have the Company withhold
from the Shares to be issued upon exercise of the Option or Stock Purchase
Right that number of Shares having a Fair Market Value determined as of the
applicable Tax Date (as defined below) equal to the amount required to be
withheld. For purposes of this Section 12, 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 under the
Applicable Laws (the “Tax Date”).


 


(d)                                 If permitted by the
Administrator, in its discretion, a Participant may satisfy his or her tax
withholding obligations upon exercise of an Option or Stock Purchase Right by
surrendering to the Company Shares that have a Fair Market Value determined as
of the applicable Tax Date equal to the amount required to be withheld. In the
case of Shares previously acquired from the Company that are surrendered under
this Section 12(d), such Shares must have been owned by the Participant
for more than six (6) months on the date of surrender (or such other
period of time as is required for the Company to avoid adverse accounting
charges).


 


(e)                                  Any election or deemed
election by a Participant to have Shares withheld to satisfy tax withholding
obligations under Section 12(c) or (d) above shall be
irrevocable as to the particular Shares as to which the election is made and
shall be subject to the consent or disapproval of the Administrator. Any
election by a Participant under Section 12(d) above must be made on
or prior to the applicable Tax Date.


 


(f)                                    In the event an election to
have Shares withheld is made by a Participant and the Tax Date is deferred
under Section 83 of the Code because no election is filed under Section 83(b) of
the Code, the Participant shall receive the full number of Shares with respect
to which the Option or Stock Purchase Right is exercised but such Participant
shall be unconditionally obligated to tender back to the Company the proper
number of Shares on the Tax Date.


 


(g)                                 Neither the Company nor the
Administrator shall, however, have any obligation whatsoever to grant or modify
any Option or Stock Purchase Right in a manner that avoids penalties that may
arise under Section 409A of the Code.


 


13.                                 Non-Transferability
of Options and Stock Purchase Rights.


 


(a)                                  General. Except as set
forth in this Section 13, Options and Stock Purchase Rights 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. The designation
of a beneficiary by an Optionee will not constitute a transfer. An Option or
Stock Purchase Right may be exercised, during the lifetime of the holder of an
Option or Stock Purchase Right, only by such holder or a transferee permitted
by this Section 13.


 


(b)                                 Limited
Transferability Rights. Notwithstanding anything
else in this Section 13, prior to the date, if any, on which the Common
Stock becomes a Listed Security, the Administrator may in its discretion grant
Nonstatutory Stock Options that may be transferred by instrument to an inter
vivos or testamentary trust in which the Options are to be passed to
beneficiaries upon the death of the trustor (settlor) or by gift to “Immediate
Family” (as defined below), on such terms and conditions as the Administrator
deems appropriate. Following the date, if any, on which the Common Stock
becomes a Listed Security, the Administrator may in its discretion grant
transferable Nonstatutory Stock Options pursuant to Option Agreements
specifying the manner in which such Nonstatutory Stock Options are
transferable. “Immediate 


 

















 


Family” means any
child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, and shall include adoptive relationships.


 


14.                                 Adjustments
Upon Changes in Capitalization, Merger or Certain Other Transactions.


 


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


 


(b)                                 Dissolution
or Liquidation. In the event of
the dissolution or liquidation of the Company, each Option and Stock Purchase
Right will terminate immediately prior to the consummation of such action,
unless otherwise determined by the Administrator.


 


(c)                                  Corporate
Transaction; Change of Control. In the event of
a Corporate Transaction, each outstanding Option or Stock Purchase Right shall
be assumed or an equivalent option or right shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation
(the “Successor Corporation”), unless the Successor Corporation does not
agree to assume the award or to substitute an equivalent option or right, in
which case such Option or Stock Purchase Right shall terminate upon the
consummation of the transaction; provided however that, in the case of a Change
of Control in which outstanding awards are neither being assumed nor replaced
with equivalent awards by the Successor Corporation, the vesting of such awards
shall accelerate in full as of immediately prior to the consummation of the
Change of Control so that Options shall vest and become exercisable as to all
of the Shares that otherwise would have been unvested as of immediately prior
to such consummation and any repurchase right of the Company with respect to
Shares issued upon exercise of an Option or Stock Purchase Right shall lapse as
to all of the Shares subject to such repurchase right as of immediately prior
to such consummation. To the extent that an Option or Stock Purchase Right is
not exercised prior to consummation of a transaction in which the Option or
Stock Purchase Right is not being assumed or substituted, such Option or Stock
Purchase Right shall terminate upon such consummation.


 

















 


Notwithstanding the above, in the event a
Participant holding an Option or Stock Purchase Right assumed or substituted by
the Successor Corporation in a Change of Control, or holding Restricted Stock
issued upon exercise of an Option or Stock Purchase Right with respect to which
the Successor Corporation has succeeded to a repurchase right as a result of a
Change of Control, is Involuntarily Terminated by the Successor Corporation in
connection with, or within 12 months following consummation of, the
transaction, then any assumed or substituted Option or Stock Purchase Right
held by the terminated Participant at the time of termination shall accelerate
and become exercisable in full, and any repurchase right applicable to any
Shares shall lapse in full. The acceleration of vesting and lapse of repurchase
rights provided for in the previous sentence shall occur immediately prior to
the effective date of the Participant’s termination.


 


For purposes of this Section 14(c), an
Option or a Stock Purchase Right shall be considered assumed, without
limitation, if, at the time of issuance of the stock or other consideration
upon a Corporate Transaction or a Change of Control, as the case may be, each
holder of an Option or Stock Purchase Right would be entitled to receive upon
exercise of the award the same number and kind of shares of stock or the same
amount of property, cash or securities as such holder would have been entitled
to receive upon the occurrence of the transaction if the holder had been,
immediately prior to such transaction, the holder of the number of Shares of
Common Stock covered by the award at such time (after giving effect to any
adjustments in the number of Shares covered by the Option or Stock Purchase
Right as provided for in this Section 14); provided that if such
consideration received in the transaction is not solely common stock of the
Successor Corporation, the Administrator may, with the consent of the Successor
Corporation, provide for the consideration to be received upon exercise of the
award to be solely common stock of the Successor Corporation equal to the Fair
Market Value of the per Share consideration received by holders of Common Stock
in the transaction.


 


(d)                                 Limitation
on Payments. In the event that the vesting, acceleration or
lapse of a repurchase right provided for in Section 14(c) above (x) constitutes
“parachute payments” within the meaning of Section 280G of the Code, and (y) but
for this Section 14(d) would be subject to the excise tax imposed by Section 4999
of the Code (or any corresponding provisions of state income tax law), then
such vesting, acceleration or lapse of a repurchase right shall be either


 


(i)                                     delivered in full, or


 


(ii)                                  delivered as to such lesser
extent which would result in no portion of such severance benefits being
subject to excise tax under Code Section 4999,


 


whichever amount, taking into account the applicable
federal, state and local income taxes and the excise tax imposed by Code Section 4999,
results in the receipt by the Participant on an after-tax basis of the greater
amount of acceleration or lapse of repurchase rights benefits, notwithstanding
that all or some portion of such benefits may be taxable under Code Section 4999.
Any determination required under this Section 14(d) shall be made in
writing by the Company’s independent accountants, whose determination shall be
conclusive and binding for all purposes on the Company and any affected
Participant. In the event that (i) above applies, then the Participant
shall be responsible for any excise taxes imposed with respect to such 


 

















 


benefits. In the event that (ii) above applies,
then each benefit provided hereunder shall be proportionately reduced to the
extent necessary to avoid imposition of such excise taxes.


 


(e)                                  Certain
Distributions. In the event of any distribution to the Company’s
stockholders of securities of any other entity or other assets (other than
dividends payable in cash or stock of the Company) without receipt of
consideration by the Company, the Administrator may, in its discretion,
appropriately adjust the price per Share covered by each outstanding Option or
Stock Purchase Right to reflect the effect of such distribution.


 


15.                                 Time of
Granting Options and Stock Purchase Rights. The date of grant of an
Option or Stock Purchase Right shall, for all purposes, be the date on which
the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Administrator,
provided that in the case of any Incentive Stock Option, the grant date shall
be the later of the date on which the Administrator makes the determination
granting such Incentive Stock Option or the date of commencement of the
Optionee’s employment relationship with the Company. Notice of the
determination shall be given to each Employee or Consultant to whom an Option
or Stock Purchase Right is so granted within a reasonable time after the date
of such grant.


 


16.                                 Amendment
and Termination of the Plan.


 


(a)                                  Authority
to Amend or Terminate. The Board may at any time amend, alter,
suspend or discontinue the Plan, but no amendment, alteration, suspension or
discontinuation (other than an adjustment pursuant to Section 14 above)
shall be made that would materially and adversely affect the rights of any
Optionee or holder of Stock Purchase Rights under any outstanding grant,
without his or her consent. In addition, to the extent necessary and desirable
to comply with the Applicable Laws, the Company shall obtain stockholder
approval of any Plan amendment in such a manner and to such a degree as
required.


 


(b)                                 Effect of
Amendment or Termination. No amendment or
termination of the Plan shall materially and adversely affect Options or Stock
Purchase Rights already granted, unless mutually agreed otherwise between the
Optionee or holder of the Stock Purchase Rights and the Administrator, which
agreement must be in writing and signed by the Optionee or holder and the
Company.


 


17.                                 Conditions
Upon Issuance of Shares. Notwithstanding any other
provision of the Plan or any agreement entered into by the Company pursuant to
the Plan, the Company shall not be obligated, and shall have no liability for
failure, to issue or deliver any Shares under the Plan unless such issuance or
delivery would comply with the Applicable Laws, with such compliance determined
by the Company in consultation with its legal counsel. As a condition to the exercise
of an Option or Stock Purchase Right, the Company may require the person
exercising the award to represent and warrant at the time of any such exercise
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required by law.


 

















 


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


 


19.                                 Agreements. Options and
Stock Purchase Rights shall be evidenced by Option Agreements and Restricted
Stock Purchase Agreements, respectively, in such form(s) as the
Administrator shall from time to time approve.


 


20.                                 Stockholder
Approval. If required by the
Applicable Laws, continuance of the Plan shall be subject to approval by the
stockholders of the Company within twelve (12) months before or after the date
the Plan is adopted. Such stockholder approval shall be obtained in the manner
and to the degree required under the Applicable Laws.


 


21.                                 Information
and Documents to Optionees and Purchasers. Prior to the
date, if any, upon which the Common Stock becomes a Listed Security and if
required by the Applicable Laws, the Company shall provide financial statements
at least annually to each Optionee and to each individual who acquired Shares
pursuant to the Plan, during the period such Optionee or purchaser has one or
more Options or Stock Purchase Rights outstanding, and in the case of an
individual who acquired Shares pursuant to the Plan, during the period such
individual owns such Shares. The Company shall not be required to provide such
information if the issuance of Options or Stock Purchase Rights under the Plan
is limited to key employees whose duties in connection with the Company assure
their access to equivalent information.