Exhibit 10.12


 


CHICORY SYSTEMS, INC.



1999 EMPLOYEE
STOCK OPTION/STOCK ISSUANCE PLAN

(amended and restated as of August 4, 2000)


ARTICLE
ONE


GENERAL
PROVISIONS


I.              PURPOSE OF THE PLAN


 


This 1999 Employee Stock
Option/Stock Issuance Plan (amended and restated as of August 4, 2000) is
intended to promote the interests of Chicory Systems, Inc., a Delaware
corporation, by providing eligible persons in the Corporation’s employ or
service with the opportunity to acquire a proprietary interest, or otherwise
increase their proprietary interest, in the Corporation as an incentive for
them to continue in such employ or service.


Capitalized terms herein
shall have the meanings assigned to such terms in the attached Appendix.


II.                                     STRUCTURE
OF THE PLAN


A.            The Plan shall be divided into two
(2) separate equity programs:


(i)            the Option Grant
Program under which eligible persons may, at the discretion of the Plan
Administrator, be granted options to purchase shares of Common Stock, and


(ii)           the Stock Issuance
Program under which eligible persons may, at the discretion of the Plan
Administrator, be issued shares of Common Stock directly, either through the
immediate purchase of such shares or as a bonus for services rendered the
Corporation (or any Parent or Subsidiary).


B.            The provisions of Articles One and
Four shall apply to both equity programs under the Plan and shall accordingly
govern the interests of all persons under the Plan.


III.                                 ADMINISTRATION
OF THE PLAN


A.            The Plan shall be administered by
the Board.  However, any or all
administrative functions otherwise exercisable by the Board may be delegated to
the Committee.  Members of the Committee
shall serve for such period of time as the Board may determine and shall be
subject to removal by the Board at any time. 
The Board may also at any time terminate the functions of the Committee
and reassume all powers and authority previously delegated to the Committee.


 


 

















 


B.            The Plan Administrator shall have
full power and authority (subject to the provisions of the Plan) to establish
such rules and regulations as it may deem appropriate for proper administration
of the Plan and to make such determinations under, and issue such
interpretations of, the Plan and any outstanding options or stock issuances
thereunder as it may deem necessary or advisable.  Decisions of the Plan Administrator shall be final and binding on
all parties who have an interest in the Plan or any option grant or stock
issuance thereunder.


IV.                                ELIGIBILITY


A.            The persons eligible to participate
in the Plan are as follows:


(i)            Employees,


(ii)           non-employee
members of the Board or the non-employee members of the board of directors of
any Parent or Subsidiary, and


(iii)          consultants and
other independent advisors who provide services to the Corporation (or any Parent
or Subsidiary).


B.            The Plan Administrator shall have
full authority to determine, (i) with respect to the grants made under the
Option Grant Program, which eligible persons are to receive such  grants, the time or times when those grants
are to be made, the number of shares to be covered by each such grant, the
status of the granted option as either an Incentive Option or a Non-Statutory
Option, the time or times when each option is to become exercisable, the
vesting schedule (if any) applicable to the option shares and the maximum term
for which the option is to remain outstanding, and (ii) with respect to stock
issuances made under the Stock Issuance Program, which eligible persons are to
receive such issuances, the time or times when those issuances are to be made,
the number of shares to be issued to each Participant, the vesting schedule (if
any) applicable to the issued shares and the consideration to be paid by the
Participant for such shares.


C.            The Plan Administrator shall have
the absolute discretion either to grant options in accordance with the Option
Grant Program or to effect stock issuances in accordance with the Stock
Issuance Program.


V.                                    STOCK
SUBJECT TO THE PLAN


A.            The stock issuable
under the Plan shall be shares of authorized but unissued or reacquired Common
Stock.  The maximum number of shares of
Common Stock which may be issued over the term of the Plan shall not exceed One
Million (1,000,000) shares.


B.            Shares of Common Stock subject to
outstanding options shall be available for subsequent issuance under the Plan
to the extent (i) the options expire or terminate for any reason prior to
exercise in full or (ii) the options are cancelled in accordance with the
cancellation-regrant provisions of Article Two.  Unvested shares issued under the Plan and subsequently
repurchased by the Corporation, at the option exercise or direct issue price
paid 


 


 


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per share, pursuant to the Corporation’s repurchase
rights under the Plan shall be added back to the number of shares of Common
Stock reserved for issuance under the Plan and shall accordingly be available
for reissuance through one or more subsequent option grants or direct stock
issuances under the Plan.


C.            Should any change be made to the Common
Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation’s receipt of
consideration, appropriate adjustments shall be made to (i) the maximum number
and/or class of securities issuable under the Plan and (ii) the number and/or
class of securities and the exercise price per share in effect under each
outstanding option in order to prevent the dilution or enlargement of benefits
thereunder.  The adjustments determined
by the Plan Administrator shall be final, binding and conclusive.  In no event shall any such adjustments be
made in connection with the conversion of one or more outstanding shares of the
Corporation’s preferred stock into shares of Common Stock.


 


 


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ARTICLE TWO


OPTION
GRANT PROGRAM


I.              OPTION TERMS


 


Each option shall be
evidenced by one or more documents in the form approved by the Plan
Administrator; provided, however, that each such document shall comply
with the terms specified below.  Each
document evidencing an Incentive Option shall, in addition, be subject to the
provisions of the Plan applicable to such options.


A.            Exercise
Price.


1.             The exercise price per share shall be fixed by the Plan
Administrator in accordance with the following provisions:


(i)            The exercise price
per share shall not be less than eighty-five percent (85%) of the Fair Market
Value per share of Common Stock on the option grant date.


(ii)           If the person to
whom the option is granted is a 10% Stockholder, then the exercise price per
share shall not be less than one hundred ten percent (110%) of the Fair Market
Value per share of Common Stock on the option grant date.


2.             The exercise price shall become immediately due upon
exercise of the option and shall, subject to the provisions of Section I of
Article Four and the documents evidencing the option, be payable in cash or
check made payable to the Corporation. 
Should the Common Stock be registered under Section 12 of the 1934 Act
at the time the option is exercised, then the exercise price may also be paid
as follows:


(i)            in shares of Common
Stock held for the requisite period necessary to avoid a charge to the
Corporation’s earnings for financial reporting purposes and valued at Fair
Market Value on the Exercise Date, or


(ii)           to the extent the
option is exercised for vested shares, through a special sale and remittance
procedure pursuant to which the Optionee shall concurrently provide irrevocable
instructions (A) to a Corporation-designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the Corporation, out of the
sale proceeds available on the settlement date, sufficient funds to cover the
aggregate exercise price payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes required to be withheld by
the Corporation by reason of such exercise and (B) to the Corporation to
deliver the certificates for the purchased shares directly to such brokerage
firm in order to complete the sale.


 


 


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Except to the extent such
sale and remittance procedure is utilized, payment of the exercise price for
the purchased shares must be made on the Exercise Date.


B.            Exercise
and Term of Options. 
Each option shall be exercisable at such time or times, during such
period and for such number of shares as shall be determined by the Plan
Administrator and set forth in the documents evidencing the option grant.  However, no option shall have a term in
excess of ten (10) years measured from the option grant date.


C.            Effect of
Termination of Service.


1.             The following provisions shall govern the exercise of
any options held by the Optionee at the time of cessation of Service or death:


(i)            Should the Optionee
cease to remain in Service for any reason other than death, Disability or
Misconduct, then the Optionee shall have a period of three (3) months following
the date of such cessation of Service during which to exercise each outstanding
option held by such Optionee.


(ii)           Should Optionee’s
Service terminate by reason of Disability, then the Optionee shall have a
period of twelve (12) months following the date of such cessation of Service
during which to exercise each outstanding option held by such Optionee.


(iii)          If the Optionee
dies while holding an outstanding option, then the personal representative of
his or her estate or the person or persons to whom the option is transferred
pursuant to the Optionee’s will or the laws of inheritance or the Optionee’s
designated beneficiary or beneficiaries of that option shall have a twelve
(12)-month period following the date of the Optionee’s death to exercise such
option.


(iv)          Under no circumstances,
however, shall any such option be exercisable after the specified expiration of
the option term.


(v)           During the
applicable post-Service exercise period, the option may not be exercised in the
aggregate for more than the number of vested shares for which the option is
exercisable on the date of the Optionee’s cessation of Service.  Upon the expiration of the applicable
exercise period or (if earlier) upon the expiration of the option term, the
option shall terminate and cease to be outstanding for any vested shares for
which the option has not been exercised. 
However, the option shall, immediately upon the Optionee’s cessation of
Service, terminate and cease to be outstanding with respect to any and all
option shares for which the option is not otherwise at the time exercisable or
in which the Optionee is not otherwise at that time vested.


 


 


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(vi)          Should Optionee’s
Service be terminated for Misconduct or should Optionee otherwise engage in
Misconduct while holding one or more outstanding options under the Plan, then
all those options shall terminate immediately and cease to remain outstanding.


2.             The Plan Administrator shall have the discretion,
exercisable either at the time an option is granted or at any time while the
option remains outstanding, to:


(i)            extend the period
of time for which the option is to remain exercisable following Optionee’s
cessation of Service or death from the limited period otherwise in effect for
that option to such greater period of time as the Plan Administrator shall deem
appropriate, but in no event beyond the expiration of the option term, and/or


(ii)           permit the option
to be exercised, during the applicable post-Service exercise period, not only
with respect to the number of vested shares of Common Stock for which such
option is exercisable at the time of the Optionee’s cessation of Service but
also with respect to one or more additional installments in which the Optionee
would have vested under the option had the Optionee continued in Service.


D.            Stockholder
Rights.  The
holder of an option shall have no stockholder rights with respect to the shares
subject to the option until such person shall have exercised the option, paid
the exercise price and become the recordholder of the purchased shares.


E.             Unvested
Shares.  The Plan
Administrator shall have the discretion to grant options which are exercisable
for unvested shares of Common Stock. 
Should the Optionee cease Service while holding such unvested shares,
the Corporation shall have the right to repurchase, at the exercise price paid
per share, any or all of those unvested shares.  The terms upon which such repurchase right shall be exercisable
(including the period and procedure for exercise and the appropriate vesting
schedule for the purchased shares) shall be established by the Plan
Administrator and set forth in the document evidencing such repurchase
right.  The Plan Administrator may not
impose a vesting schedule upon any option grant or the shares of Common Stock
subject to that option which is more restrictive than twenty percent (20%) per
year vesting, with the initial vesting to occur not later than one (1) year
after the option grant date.  However,
such limitation shall not be applicable to any option grants made to
individuals who are officers of the Corporation, non-employee Board members or
independent consultants.


F.             First
Refusal Rights. 
Until such time as the Common Stock is first registered under Section 12
of the 1934 Act, the Corporation shall have the right of first refusal with
respect to any proposed disposition by the Optionee (or any successor in
interest) of any shares of Common Stock issued under the Plan.  Such right of first refusal shall be
exercisable in accordance with the terms established by the Plan Administrator
and set forth in the document evidencing such right.


 


 


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G.            Limited
Transferability of Options.  An Incentive Stock Option shall be exercisable only by the
Optionee during his or her lifetime and shall not be assignable or transferable
other than by will or by the laws of inheritance following the Optionee’s
death. A Non-Statutory Option may be assigned in whole or in part during the
Optionee’s lifetime to one or more members of the Optionee’s family or to a
trust established exclusively for one or more such family members or to
Optionee’s former spouse, to the extent such assignment is in connection with
the Optionee’s estate plan or pursuant to a domestic relations order.  The assigned portion may only be exercised
by the person or persons who acquire a proprietary interest in the
Non-Statutory Option pursuant to the assignment. The terms applicable to the
assigned portion shall be the same as those in effect for the option immediately
prior to such assignment and shall be set forth in such documents issued to the
assignee as the Plan Administrator may deem appropriate.  Notwithstanding the foregoing, the Optionee
may also designate one or more persons as the beneficiary or beneficiaries of
his or her outstanding options under the Plan, and  those options shall, in accordance with such designation,
automatically be transferred to such beneficiary or beneficiaries upon the
Optionee’s death while holding those options. 
Such beneficiary or beneficiaries shall take the transferred options
subject to all the terms and conditions of the applicable agreement evidencing
each such transferred option, including (without limitation) the limited time
period during which the option may be exercised following the Optionee’s death.


 


II.            INCENTIVE OPTIONS


 


The terms specified below
shall be applicable to all Incentive Options. 
Except as modified by the provisions of this Section II, all the
provisions of Articles One, Two and Four shall be applicable to Incentive
Options.  Options which are specifically
designated as Non-Statutory Options shall not be subject to the terms of this
Section II.


A.            Eligibility.  Incentive Options may only be granted to
Employees.


B.            Exercise
Price.  The
exercise price per share shall not be less than one hundred percent (100%) of
the Fair Market Value per share of Common Stock on the option grant date.


C.            Dollar
Limitation.  The
aggregate Fair Market Value of the shares of Common Stock (determined as of the
respective date or dates of grant) for which one or more options granted to any
Employee under the Plan (or any other option plan of the Corporation or any
Parent or Subsidiary) may for the first time become exercisable as Incentive
Options during any one (1) calendar year shall not exceed the sum of One
Hundred Thousand Dollars ($100,000).  To
the extent the Employee holds two (2) or more such options which become
exercisable for the first time in the same calendar year, the foregoing
limitation on the exercisability of such options as Incentive Options shall be
applied on the basis of the order in which such options are granted.


D.            10%
Stockholder.  If
any Employee to whom an Incentive Option is granted is a 10% Stockholder, then
the option term shall not exceed five (5) years measured from the option grant
date.


 


 


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III.                                 CORPORATE
TRANSACTION


A.            The shares subject to each option
outstanding under the Plan at the time of a Corporate Transaction shall
automatically vest in full so that each such option shall, immediately prior to
the effective date of the Corporate Transaction, become exercisable for all of
the shares of Common Stock at the time subject to that option and may be
exercised for any or all of those shares as fully-vested shares of Common
Stock.  However, the shares subject to
an outstanding option shall not vest on such an accelerated basis if
and to the extent:  (i) such option is
assumed by the successor corporation (or parent thereof) in the Corporate
Transaction and any repurchase rights of the Corporation with respect to the
unvested option shares are concurrently assigned to such successor corporation
(or parent thereof) or (ii) such option is to be replaced with a cash incentive
program of the successor corporation which preserves the spread existing on the
unvested option shares at the time of the Corporate Transaction and provides
for subsequent payout in accordance with the same vesting schedule applicable
to those unvested option shares or (iii) the acceleration of such option is
subject to other limitations imposed by the Plan Administrator at the time of
the option grant.


B.            All outstanding repurchase rights
shall also terminate automatically, and the shares of Common Stock subject to
those terminated rights shall immediately vest in full, in the event of any
Corporate Transaction, except to the extent: (i) those repurchase rights are
assigned to the successor corporation (or parent thereof) in connection with
such Corporate Transaction or (ii) such accelerated vesting is precluded by
other limitations imposed by the Plan Administrator at the time the repurchase
right is issued.


C.            Immediately following the
consummation of the Corporate Transaction, all outstanding options shall
terminate and cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof).


D.            Each option which is assumed in
connection with a Corporate Transaction shall be appropriately adjusted,
immediately after such Corporate Transaction, to apply to the number and class
of securities which would have been issuable to the Optionee in consummation of
such Corporate Transaction, had the option been exercised immediately prior to
such Corporate Transaction.  Appropriate
adjustments shall also be made to (i) the number and class of securities
available for issuance under the Plan following the consummation of such
Corporate Transaction and (ii) the exercise price payable per share under each
outstanding option, provided the aggregate
exercise price payable for such securities shall remain the same.  To the extent the actual holders of the
Corporation’s outstanding Common Stock receive cash consideration for their
Common Stock in consummation of the Corporate Transaction, the successor
corporation may, in connection with the assumption of the outstanding options
under this Plan, substitute one or more shares of its own common stock with a
fair market value equivalent to the cash consideration paid per share of Common
Stock in such Corporate Transaction.


 


 


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E.             The Plan Administrator shall have
the discretion, exercisable either at the time the option is granted or at any
time while the option remains outstanding, to structure one or more options so
that those options shall automatically accelerate and vest in full (and any
repurchase rights of the Corporation with respect to the unvested shares
subject to those options shall immediately terminate) upon the occurrence of a
Corporate Transaction, whether or not those options are to be assumed in the
Corporate Transaction.


F.             The Plan Administrator shall also
have full power and authority, exercisable either at the time the option is
granted or at any time while the option remains outstanding, to structure such
option so that the shares subject to that option will automatically vest on an
accelerated basis should the Optionee’s Service terminate by reason of an
Involuntary Termination within a designated period (not to exceed eighteen (18)
months) following the effective date of any Corporate Transaction in which the
option is assumed and the repurchase rights applicable to those shares do not
otherwise terminate.  Any option so
accelerated shall remain exercisable for the fully-vested option shares until
the expiration or sooner termination of the option term.  In addition, the Plan Administrator may
provide that one or more of the Corporation’s outstanding repurchase rights
with respect to shares held by the Optionee at the time of such Involuntary
Termination shall immediately terminate on an accelerated basis, and the shares
subject to those terminated rights shall accordingly vest at that time.


G.            The portion of any Incentive Option
accelerated in connection with a Corporate Transaction shall remain exercisable
as an Incentive Option only to the extent the applicable One Hundred Thousand
Dollar limitation is not exceeded.  To
the extent such dollar limitation is exceeded, the accelerated portion of such
option shall be exercisable as a Non-Statutory Option under the Federal tax
laws.


H.            The grant of options under the Plan
shall in no way affect the right of the Corporation to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.


 


IV.           CANCELLATION AND REGRANT OF OPTIONS


 


The Plan Administrator
shall have the authority to effect, at any time and from time to time, with the
consent of the affected option holders, the cancellation of any or all
outstanding options under the Plan and to grant in substitution therefor new
options covering the same or different number of shares of Common Stock but
with an exercise price per share based on the Fair Market Value per share of
Common Stock on the new option grant date.


 


 


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ARTICLE THREE


STOCK
ISSUANCE PROGRAM


I.              STOCK ISSUANCE TERMS


 


Shares of Common Stock
may be issued under the Stock Issuance Program through direct and immediate
issuances without any intervening option grants.  Each such stock issuance shall be evidenced by a Stock Issuance
Agreement which complies with the terms specified below.


A.            Purchase
Price.


1.             The purchase price per share shall be fixed by the Plan
Administrator but shall not be less than eighty-five percent (85%) of the Fair
Market Value per share of Common Stock on the issue date.  However, the purchase price per share of
Common Stock issued to a 10% Stockholder shall not be less than one hundred and
ten percent (110%) of such Fair Market Value.


2.             Subject to the provisions of Section I of Article Four,
shares of Common Stock may be issued under the Stock Issuance Program for any
of the following items of consideration which the Plan Administrator may deem
appropriate in each individual instance:


(i)            cash or check made
payable to the Corporation, or


(ii)           past services
rendered to the Corporation (or any Parent or Subsidiary).


B.            Vesting
Provisions.


1.             Shares of Common Stock issued under the Stock Issuance
Program may, in the discretion of the Plan Administrator, be fully and
immediately vested upon issuance or may vest in one or more installments over
the Participant’s period of Service or upon attainment of specified performance
objectives.  However, the Plan Administrator
may not impose a vesting schedule upon any stock issuance effected under the
Stock Issuance Program which is more restrictive than twenty percent (20%) per
year vesting, with initial vesting to occur not later than one (1) year after
the issuance date.  Such limitation
shall not apply to any Common Stock issuances made to the officers of the
Corporation, non-employee Board members or independent consultants.


2.             Any new, substituted or additional securities or other
property (including money paid other than as a regular cash dividend) which the
Participant may have the right to receive with respect to the Participant’s
unvested shares of Common Stock by reason of any stock dividend, stock split,
recapitalization, combination of shares, exchange of shares or 


 


 


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other change affecting the outstanding Common Stock as
a class without the Corporation’s receipt of consideration shall be issued
subject to (i) the same vesting requirements applicable to the Participant’s
unvested shares of Common Stock and (ii) such escrow arrangements as the Plan
Administrator shall deem appropriate.


3.             The Participant shall have full stockholder rights with
respect to any shares of Common Stock issued to the Participant under the Stock
Issuance Program, whether or not the Participant’s interest in those shares is
vested.  Accordingly, the Participant
shall have the right to vote such shares and to receive any regular cash
dividends paid on such shares.


4.             Should the Participant cease to remain in Service while
holding one or more unvested shares of Common Stock issued under the Stock
Issuance Program or should the performance objectives not be attained with
respect to one or more such unvested shares of Common Stock, then those shares
shall be immediately surrendered to the Corporation for cancellation, and the
Participant shall have no further stockholder rights with respect to those
shares.  To the extent the surrendered
shares were previously issued to the Participant for consideration paid in cash
or cash equivalent (including the Participant’s purchase-money indebtedness),
the Corporation shall repay to the Participant the cash consideration paid for
the surrendered shares and shall cancel the unpaid principal balance of any outstanding
purchase-money note of the Participant attributable to such surrendered shares.


5.             The Plan Administrator may in its discretion waive the
surrender and cancellation of one or more unvested shares of Common Stock (or
other assets attributable thereto) which would otherwise occur upon the
non-completion of the vesting schedule applicable to those shares.  Such waiver shall result in the immediate
vesting of the Participant’s interest in the shares of Common Stock as to which
the waiver applies.  Such waiver may be
effected at any time, whether before or after the Participant’s cessation of
Service or the attainment or non-attainment of the applicable performance
objectives.


C.            First
Refusal Rights. 
Until such time as the Common Stock is first registered under Section 12
of the 1934 Act, the Corporation shall have the right of first refusal with
respect to any proposed disposition by the Participant (or any successor in
interest) of any shares of Common Stock issued under the Stock Issuance Program.  Such right of first refusal shall be
exercisable in accordance with the terms established by the Plan Administrator
and set forth in the document evidencing such right.


II.                                     CORPORATE
TRANSACTION


A.            Upon the occurrence of a Corporate
Transaction, all outstanding repurchase rights under the Stock Issuance Program
shall terminate automatically, and the shares of Common Stock subject to those
terminated rights shall immediately vest in full, except to the extent: (i)
those repurchase rights are assigned to the successor corporation (or parent
thereof) in connection with such Corporate Transaction or (ii) such accelerated
vesting is precluded by other limitations imposed by the Plan Administrator at
the time the repurchase right is issued.


 


 


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B.            The Plan Administrator shall have
the discretionary authority, exercisable either at the time the unvested shares
are issued or any time while the Corporation’s repurchase rights with respect
to those shares remain outstanding, to provide that those rights shall
automatically terminate on an accelerated basis, and the shares of Common Stock
subject to those terminated rights shall immediately vest, in the event the
Participant’s Service should subsequently terminate by reason of an Involuntary
Termination within a designated period (not to exceed eighteen (18) months)
following the effective date of any Corporate Transaction in which those
repurchase rights are assigned to the successor corporation (or parent
thereof).


 


III.           SHARE ESCROW/LEGENDS


 


Unvested shares may, in
the Plan Administrator’s discretion, be held in escrow by the Corporation until
the Participant’s interest in such shares vests or may be issued directly to
the Participant with restrictive legends on the certificates evidencing those
unvested shares.


 


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ARTICLE FOUR


MISCELLANEOUS


I.              FINANCING


 


The Plan Administrator
may permit any Optionee or Participant to pay the option exercise price under
the Option Grant Program or the purchase price for shares issued under the
Stock Issuance Program by delivering a full-recourse, interest bearing
promissory note payable in one or more installments and secured by the
purchased shares.  In no event, however,
may the maximum credit available to the Optionee or Participant exceed the sum
of (i) the aggregate option exercise price or purchase price payable for the
purchased shares (less the par value of those shares) plus (ii) any Federal,
state and local income and employment tax liability incurred by the Optionee or
the Participant in connection with the option exercise or share purchase.


II.                                     EFFECTIVE
DATE AND TERM OF PLAN


A.            The Plan shall become effective when
adopted by the Board, but no option granted under the Plan may be exercised,
and no shares shall be issued under the Plan, until the Plan is approved by the
Corporation’s stockholders.  If such
stockholder approval is not obtained within twelve (12) months after the date
of the Board’s adoption of the Plan, then all options previously granted under
the Plan shall terminate and cease to be outstanding, and no further options
shall be granted and no shares shall be issued under the Plan.  Subject to such limitation, the Plan Administrator
may grant options and issue shares under the Plan at any time after the
effective date of the Plan and before the date fixed herein for termination of
the Plan.


B.            The Plan shall terminate upon the earliest of (i) the expiration of the ten
(10)-year period measured from the date the Plan is adopted by the Board, (ii)
the date on which all shares available for issuance under the Plan shall have
been issued as vested shares or (iii) the termination of all outstanding
options in connection with a Corporate Transaction.  All options and unvested stock issuances outstanding at the time
of a clause (i) termination event shall continue to have full force and effect
in accordance with the provisions of the documents evidencing those options or
issuances.


III.                                 AMENDMENT
OF THE PLAN


A.            The Board shall have complete and
exclusive power and authority to amend or modify the Plan in any or all
respects.  However, no such amendment or
modification shall adversely affect the rights and obligations with respect to options
or unvested stock issuances at the time outstanding under the Plan unless the
Optionee or the Participant consents to such amendment or modification.  In addition, certain amendments may require
stockholder approval pursuant to applicable laws and regulations.


 


 


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B.            Options may be granted under the
Option Grant Program and shares may be issued under the Stock Issuance Program
which are in each instance in excess of the number of shares of Common Stock
then available for issuance under the Plan, provided any excess shares actually
issued under those programs shall be held in escrow until there is obtained
stockholder approval of an amendment sufficiently increasing the number of
shares of Common Stock available for issuance under the Plan.  If such stockholder approval is not obtained
within twelve (12) months after the date the first such excess grants or
issuances are made, then (i) any unexercised options granted on the basis of
such excess shares shall terminate and cease to be outstanding and (ii) the
Corporation shall promptly refund to the Optionees and the Participants the
exercise or purchase price paid for any excess shares issued under the Plan and
held in escrow, together with interest (at the applicable Short Term Federal
Rate) for the period the shares were held in escrow, and such shares shall
thereupon be automatically cancelled and cease to be outstanding.


 


IV.           USE OF PROCEEDS


 


Any cash proceeds
received by the Corporation from the sale of shares of Common Stock under the
Plan shall be used for general corporate purposes.


V.            WITHHOLDING


 


The Corporation’s
obligation to deliver shares of Common Stock upon the exercise of any options
granted under the Plan or upon the issuance or vesting of any shares issued
under the Plan shall be subject to the satisfaction of all applicable Federal,
state and local income and employment tax withholding requirements.


VI.           REGULATORY APPROVALS


 


The implementation of the
Plan, the granting of any options under the Plan and the issuance of any shares
of Common Stock (i) upon the exercise of any option or (ii) under the Stock
Issuance Program shall be subject to the Corporation’s procurement of all
approvals and permits required by regulatory authorities having jurisdiction
over the Plan, the options granted under it and the shares of Common Stock
issued pursuant to it.


VII.         NO EMPLOYMENT OR SERVICE RIGHTS


 


Nothing in the Plan shall
confer upon the Optionee or the Participant any right to continue in Service
for any period of specific duration or interfere with or otherwise restrict in
any way the rights of the Corporation (or any Parent or Subsidiary employing or
retaining such person) or of the Optionee or the Participant, which rights are
hereby expressly reserved by each, to terminate such person’s Service at any
time for any reason, with or without cause.


 


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VIII.        FINANCIAL REPORTS


 


The Corporation shall
deliver a balance sheet and an income statement at least annually to each
individual holding an outstanding option under the Plan, unless such individual
is a key Employee whose duties in connection with the Corporation (or any
Parent or Subsidiary) assure such individual access to equivalent information.


 


 


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APPENDIX


The following definitions
shall be in effect under the Plan:


A.            Board shall mean the
Corporation’s Board of Directors.


B.            Code shall mean the
Internal Revenue Code of 1986, as amended.


C.            Committee shall mean a
committee of one (1) or more Board members appointed by the Board to exercise
one or more administrative functions under the Plan.


D.            Common Stock shall mean
the Corporation’s common stock.


E.             Corporate Transaction
shall mean either of the following stockholder-approved transactions to which
the Corporation is a party:


(i)            a merger or
consolidation in which securities possessing more than fifty percent (50%) of
the total combined voting power of the Corporation’s outstanding securities are
transferred to a person or persons different from the persons holding those
securities immediately prior to such transaction, or


(ii)           the sale, transfer
or other disposition of all or substantially all of the Corporation’s assets in
complete liquidation or dissolution of the Corporation.


F.             Corporation shall mean
Chicory Systems, Inc., a Delaware corporation, and any successor corporation to
all or substantially all of the assets or voting stock of Chicory Systems, Inc.
which shall by appropriate action adopt the Plan.


G.            Disability shall mean the
inability of the Optionee or the Participant to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment and shall be determined by the Plan Administrator on the basis of
such medical evidence as the Plan Administrator deems warranted under the
circumstances.


H.            Employee shall mean an
individual who is in the employ of the Corporation (or any Parent or
Subsidiary), subject to the control and direction of the employer entity as to
both the work to be performed and the manner and method of performance.


I.              Exercise Date shall mean
the date on which the Corporation shall have received written notice of the
option exercise.


 


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J.             Fair Market Value
per share of Common Stock on any relevant date shall be determined in
accordance with the following provisions:


(i)            If the Common Stock
is at the time traded on the Nasdaq National Market, then the Fair Market Value
shall be the closing selling price per share of Common Stock on the date in
question, as such price is reported by the National Association of Securities
Dealers on the Nasdaq National Market and published in The Wall Street
Journal.  If there is no closing
selling price for the Common Stock on the date in question, then the Fair
Market Value shall be the closing selling price on the last preceding date for
which such quotation exists.


(ii)           If the Common Stock
is at the time listed on any Stock Exchange, then the Fair Market Value shall
be the closing selling price per share of Common Stock on the date in question
on the Stock Exchange determined by the Plan Administrator to be the primary
market for the Common Stock, as such price is officially quoted in the
composite tape of transactions on such exchange and published in The Wall
Street Journal.  If there is no
closing selling price for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on the last preceding date
for which such quotation exists.


(iii)          If the Common Stock
is at the time neither listed on any Stock Exchange nor traded on the Nasdaq
National Market, then the Fair Market Value shall be determined by the Plan
Administrator after taking into account such factors as the Plan Administrator
shall deem appropriate.


K.            Incentive Option shall
mean an option which satisfies the requirements of Code Section 422.


L.             Involuntary
Termination shall mean the termination of the Service of any
individual which occurs by reason of:


(i)            such individual’s
involuntary dismissal or discharge by the Corporation for reasons other than
Misconduct, or


(ii)           such individual’s
voluntary resignation following (A) a change in his or her position with the
Corporation which materially reduces his or her duties and responsibilities or
the level of management to which he or she reports, (B) a reduction in his or
her level of compensation (including base salary, fringe benefits and target
bonus under any corporate-performance based bonus or incentive programs) by
more than fifteen percent (15%) or (C) a relocation of such individual’s place
of employment by more than fifty (50) miles, provided and only if such
change, reduction or relocation is effected without the individual’s consent.


 


 


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M.           Misconduct shall mean the
commission of any act of fraud, embezzlement or dishonesty by the Optionee or
Participant, any unauthorized use or disclosure by such person of confidential
information or trade secrets of the Corporation (or any Parent or Subsidiary),
or any other intentional misconduct by such person adversely affecting the
business or affairs of the Corporation (or any Parent or Subsidiary) in a
material manner.  The foregoing
definition shall not be deemed to be inclusive of all the acts or omissions
which the Corporation (or any Parent or Subsidiary) may consider as grounds for
the dismissal or discharge of any Optionee, Participant or other person in the
Service of the Corporation (or any Parent or Subsidiary).


N.            1934 Act shall mean the
Securities Exchange Act of 1934, as amended.


O.            Non-Statutory Option
shall mean an option not intended to satisfy the requirements of Code Section
422.


P.             Option Grant Program
shall mean the option grant program in effect under the Plan.


Q.            Optionee shall mean any
person to whom an option is granted under the Plan.


R.            Parent shall mean any
corporation (other than the Corporation) in an unbroken chain of corporations
ending with the Corporation, provided each corporation in the unbroken chain (other
than the Corporation) owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.


S.             Participant shall mean
any person who is issued shares of Common Stock under the Stock Issuance
Program.


T.            Plan shall mean the
Corporation’s 1999 Employee Stock Option/Stock Issuance Plan (as amended and
restated as of August 4, 2000), as set forth in this document.


U.            Plan Administrator shall
mean either the Board or the Committee acting in its capacity as administrator
of the Plan.


V.            Service shall mean the
provision of services to the Corporation (or any Parent or Subsidiary) by a
person in the capacity of an Employee, a non-employee member of the board of
directors or a consultant or independent advisor, except to the extent
otherwise specifically provided in the documents evidencing the option grant.


W.           Stock Exchange shall mean
either the American Stock Exchange or the New York Stock Exchange.


X.            Stock Issuance Agreement
shall mean the agreement entered into by the Corporation and the Participant at
the time of issuance of shares of Common Stock under the Stock Issuance
Program.


 


 


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Y.            Stock Issuance Program
shall mean the stock issuance program in effect under the Plan.


Z.            Subsidiary shall mean any
corporation (other than the Corporation) in an unbroken chain of corporations
beginning with the Corporation, provided each corporation (other than the last
corporation) in the unbroken chain owns, at the time of the determination,
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.


AA.        10% Stockholder shall
mean the owner of stock (as determined under Code Section 424(d)) possessing
more than ten percent (10%) of the total combined voting power of all classes
of stock of the Corporation (or any Parent or Subsidiary).


 


 


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