Exhibit 10.24


 


ICO-TELEDESIC GLOBAL LIMITED


 


2000 STOCK INCENTIVE PLAN


 


SECTION 1. PURPOSE


 


The
purpose of the ICO-Teledesic Global Limited 2000 Stock Incentive Plan (the “Plan”)
is to enhance the long-term stockholder value of ICO-Teledesic Global Limited,
a Delaware corporation (the “Company”), by offering opportunities to selected
persons to participate in the Company’s growth and success, and to encourage
them to remain in the service of the Company and its Related Corporations (as
defined in Section 2) and to acquire and maintain stock ownership in the
Company.


 


SECTION 2. DEFINITIONS


 


For
purposes of the Plan, the following terms shall be defined as set forth below:


 


“Acquired Entity” has the meaning set forth in Section 6.3.


 


“Acquisition Transaction” has the meaning set forth in Section 6.3.


 


“Award” means an award or grant made pursuant to the Plan, including awards or
grants of Stock Options, Awards, or any combination of the foregoing.


 


“Board” means the Board of Directors of the Company.


 


“Cause” means dismissal for willful material misconduct or failure to discharge
duties, conviction or confession of a crime punishable by law (except minor
violations), the performance of an illegal act while purporting to act in the
Company’s behalf, or engaging in activities directly in competition or
antithetical to the best interests of the Company, such as dishonesty, fraud,
unauthorized use or disclosure of confidential information or trade secrets, in
each case as determined by the Plan Administrator, and its determination shall
be conclusive and binding.


 


“Code” means the Internal Revenue Code of 1986, as amended from time to time.


 


“Common Stock” means the Class A common stock, par value $.01 per share, of the
Company.


 


“Corporate Transaction” means any of the following events:


 


(a)                                  Consummation of any merger or consolidation
of the Company with or into another corporation, including a COM Affiliate;


 


(b)                                 Consummation of any sale, lease, exchange or
other transfer in one transaction or a series of related transactions of all or
substantially all the Company’s outstanding securities or substantially all the
Company’s assets other than a transfer of the Company’s assets to a
majority-owned subsidiary corporation (as defined in Section 8.3) of the
Company or a COM Affiliate; or


 

















 


(c)                                  After the initial registration of the Common
Stock under Section 12(b) or 12(g) of the Exchange Act, any acquisition by a
person, other than Craig O. McCaw or a COM Affiliate, within the meaning of
Section 3(a)(9) or of Section 13(d)(3) (as in effect on the date of adoption of
the Plan) of the Exchange Act, of a majority or more of the Company’s
outstanding voting securities (whether directly or indirectly, beneficially or
of record). Ownership of voting securities shall take into account and shall
include ownership as determined by applying Rule 13d-3(d)(l)(i) (as in effect
on the date of adoption of the Plan) under the Exchange Act.


 


For
purposes of this definition, a “COM Affiliate” shall mean any entity which
Craig O. McCaw or Eagle River Investments LLC (“Eagle River”) controls directly
or indirectly through one or more intermediaries. For purposes of this
definition, an entity shall be deemed to be controlled by Craig O. McCaw or
Eagle River if (and only for so long as) (x) Craig O. McCaw or Eagle River has
the right to vote by ownership, proxy or otherwise securities constituting 5%
or more of the voting power of such entity if such entity has equity securities
registered and files reports under the Exchange Act, as amended, or otherwise
owns securities constituting 50% or more of the voting power of such entity (if
not reporting); (y) Craig O. McCaw or Eagle River possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such entity, whether through the ownership of voting securities, by
contract or otherwise; or (z) with respect to a charitable trust, foundation or
nonprofit corporation, Craig O. McCaw or Eagle River is the sole trustee or
director or has the power to appoint a majority of the trustees or directors
thereof. Notwithstanding the foregoing, the following shall be deemed COM
Affiliates: New ICO Global Communications (Holdings) Limited, Inc., Teledesic
Corporation, Teledesic LLC, Teledesic Holdings Limited, Nextel Communications,
Inc. and XO Communications, Inc (formerly known as NEXTLINK Communications,
Inc.).


 


“Disability,”
unless otherwise defined by the Plan Administrator, means a mental or physical
impairment of the Participant that is expected to result in death or that has
lasted or is expected to last for a continuous period of 12 months or more and
that causes the Participant to be unable, in the opinion of the Plan
Administrator, to perform his or her duties for the Company or a Related
Corporation and to be engaged in any substantial gainful activity.


 


“Early Retirement” means Termination of Service (as defined below) prior to Retirement on
terms and conditions approved by the Plan Administrator.


 


“Effective Date”
has the meaning set forth in Section 17.


 


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


 


“Fair Market Value” shall be as established in good faith by the Plan Administrator or (a)
if the Common Stock is listed on the Nasdaq National Market, the closing sales
price for the Common Stock as reported by the Nasdaq National Market for a
single trading day or (b) if the Common Stock is listed on the New York Stock
Exchange or the American Stock Exchange, the closing sales price for the Common
Stock as such price is officially quoted in the composite tape of transactions
on such exchange for a single trading day. If there is no such reported price
for the Common Stock for the date in question, then such price on the last
preceding date for which such price exists shall be determinative of Fair
Market Value.


 

















 


“Grant Date” means
the date on which the Plan Administrator completes the corporate action
relating to the grant of an Award and all conditions precedent to the grant
have been satisfied, provided that conditions to the exercisability or vesting
of Awards shall not defer the Grant Date.


 


“Incentive Stock Option” means an Option to purchase Common Stock
granted under Section 7 with the intention that it qualify as an “incentive
stock option” as that term is defined in Section 422 of the Code.


 


“Nonqualified Stock Option” means an Option to purchase Common Stock
granted under Section 7 other than an Incentive Stock Option.


 


“Option” means the right to purchase Common Stock granted under Section 7.


 


“Option Term” has the meaning set forth in Section 7.3.


 


“Participant” means (a) the person to whom an Award is granted; (b) for a Participant
who has died, the personal representative of the Participant’s estate, the
person(s) to whom the Participant’s rights under the Award have passed by will
or by the applicable laws of descent and distribution, or the beneficiary
designated in accordance with Section 11; or (c) the person(s) to whom an Award
has been transferred in accordance with Section 11.


 


“Plan Administrator” means the Board or any committee or
committees designated by the Board to administer the Plan under Section 3.1.


 


“Related Corporation” means any entity that, directly or
indirectly, is in control of, or is controlled by, or under common control with
the Company.


 


“Retirement” means retirement on or after an individual’s normal retirement date
under the Company’s 401(k) plan or other similar plan applicable to salaried
employees, unless otherwise defined by the Plan Administrator from time to time
for purposes of the Plan.


 


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


 


“Stock Award” means an Award of shares of Common Stock or units denominated in Common
Stock granted under Section 9, the rights of ownership of which may be subject
to restrictions prescribed by the Plan Administrator.


 


“Successor Corporation” has the meaning set forth in Section 12.3.


 


“Termination of Service” means a termination of employment or service
relationship with the Company or a Related Corporation for any reason, whether
voluntary or involuntary, including death, Disability, Early Retirement or
Retirement, as determined by the Administrator in its sole discretion. Any
question as to whether and when there has been a Termination of Service for the
purposes of an Award and the cause of such Termination of Service shall be
determined by the Plan Administrator and its determination shall be final.
Transfer of the Participant’s employment or service relationship between
Related Corporations, or between the Company and


 

















 


any Related Corporation,
shall not be considered a Termination of Service for purposes of an Award;
unless the Plan Administrator determines otherwise, a Termination of Service
shall be deemed to occur if the Participant’s employment or service
relationship is with an entity that has ceased to be a Related Corporation.


 


SECTION 3. ADMINISTRATION


 


3.1                               Plan Administrator


 


The
Plan shall be administered by the Board and/or a committee or committees (which
term includes subcommittees) appointed by, and consisting of two or more members
of, the Board (a “Plan Administrator”). If and so long as the Common Stock is
registered under Section 12(b) or 12(g) of the Exchange Act, the Board shall
consider in selecting the members of any committee acting as Plan
Administrator, with respect to any persons subject or likely to become subject
to Section 16 of the Exchange Act, the provisions regarding (a) “outside
directors” as contemplated by Section 162(m) of the Code and (b) “nonemployee
directors” as contemplated by Rule 16b-3 under the Exchange Act.
Notwithstanding the foregoing, the Board may delegate the responsibility for
administering the Plan with respect to designated classes of eligible persons
to different committees consisting of one or more members of the Board, subject
to such limitations as the Board deems appropriate. Committee members shall
serve for such term as the Board may determine, subject to removal by the Board
at any time.


 


3.2                               Administration and
Interpretation by Plan Administrator


 


Except
for the terms and conditions explicitly set forth in the Plan, the Plan
Administrator shall have exclusive authority, in its discretion, to determine
all matters relating to Awards under the Plan, including the selection of
individuals to be granted Awards, the type of Awards, the number of shares of
Common Stock subject to an Award, all terms, conditions, restrictions and
limitations, if any, of an Award and the terms of any instrument that evidences
the Award. The Plan Administrator shall also have exclusive authority to
interpret the Plan and the terms of any instrument evidencing the Award and may
from time to time adopt and change rules and regulations of general application
for the Plan’s administration. The Plan Administrator’s interpretation of the
Plan and its rules and regulations, and all actions taken and determinations
made by the Plan Administrator pursuant to the Plan, shall be conclusive and
binding on all parties involved or affected. The Plan Administrator may
delegate administrative duties to such of the Company’s officers as it so
determines.


 


SECTION 4. STOCK SUBJECT TO THE
PLAN


 


4.1                               Authorized
Number of Shares


 


Subject
to adjustment from time to time as provided in Section 12.1, a maximum of
10,000,000 shares of Common Stock shall be available for issuance under the
Plan.


 


Shares
issued under the Plan shall be drawn from authorized and unissued shares or
shares now held or subsequently acquired by the Company as treasury shares.


 

















 


4.2                               Reuse of Shares


 


Any
shares of Common Stock that have been made subject to an Award that cease to be
subject to the Award (other than by reason of exercise or settlement of the
Award to the extent it is exercised for or settled in vested and nonforfeitable
shares) shall again be available for issuance in connection with future grants
of Awards under the Plan. In the event shares issued under the Plan are
reacquired by the Company pursuant to any forfeiture or similar provision,
right of repurchase or right of first refusal, such shares shall again be
available for the purposes of the Plan; provided, that the aggregate number of
shares that may be issued upon the exercise of Incentive Stock Options shall in
no event exceed 10,000,000, subject to adjustment from time to time as provided
in Section 12.1.


 


SECTION 5. ELIGIBILITY


 


Awards
may be granted under the Plan to those officers, directors and employees of the
Company and its Related Corporations as the Plan Administrator from time to
time selects. Awards may also be granted to consultants, agents, advisors and
independent contractors who provide services to the Company and its Related
Corporations; provided, however, that such Participants (i) are natural persons
or an alter-ego entity; (ii) render bona fide services that are not in
connection with the offer and sale of the Company’s securities in a
capital-raising transaction; and (iii) render bonafide services that do not
directly or indirectly promote or maintain a market for the Company’s
securities.


 


SECTION 6. AWARDS


 


6.1                               Form and Grant of Awards


 


The Plan Administrator shall have the authority, in its sole
discretion, to determine the type or types of Awards to be made under the Plan.
Such Awards may include, but are not limited to, Incentive Stock Options,
Nonqualified Stock Options and Stock Awards. Awards may be granted singly or in
combination.


 


6.2                           Settlement of Awards


 


The
Company may settle Awards through the delivery of shares of Common Stock, the
granting of replacement Awards or any combination thereof as the Plan
Administrator shall determine. Any Award settlement, including payment
deferrals, may be subject to such conditions, restrictions and contingencies as
the Plan Administrator shall determine. The Plan Administrator may permit or
require the deferral of any Award payment, subject to such rules and procedures
as it may establish, which may include provisions for the payment or crediting
of interest, or dividend equivalents, including converting such credits into
deferred stock equivalents.


 


6.3                               Acquired Company Awards


 


Notwithstanding
anything in the Plan to the contrary, the Plan Administrator may grant Awards
under the Plan in substitution for awards issued under other plans, or assume
under the Plan awards issued under other plans, if the other plans are or were
plans of other acquired


 

















 


entities (“Acquired Entities”)
(or the parent or subsidiary of the Acquired Entity) and the new Award is
substituted, or the old award is assumed, by reason of a merger, consolidation,
acquisition of property or stock, reorganization or liquidation (the “Acquisition
Transaction”). If a written agreement pursuant to which the Acquisition
Transaction is completed is approved by the Board and that agreement sets forth
the terms and conditions of the substitution for or assumption of outstanding
awards of the Acquired Entity, those terms and conditions shall be deemed to be
the action of the Plan Administrator without any further action by the Plan
Administrator, except as may be required for compliance with Rule 16b-3 under
the Exchange Act, and the persons holding such awards shall be deemed to be
Participants.


 


SECTION 7. AWARDS OF OPTIONS


 


7.1                               Grant of Options


 


The
Plan Administrator is authorized under the Plan, in its sole discretion, to
issue Options as Incentive Stock Options or as Nonqualified Stock Options,
which shall be appropriately designated.


 


7.2                               Option Exercise Price


 


The
exercise price for shares purchased under an Option shall be as determined by
the Plan Administrator, but shall not be less than 100% of the Fair Market
Value of the Common Stock on the Grant Date with respect to Incentive Stock
Options. For Incentive Stock Options granted to a more than 10% stockholder,
the Option exercise price shall be as specified in Section 8.2.


 


7.3                               Term of Options


 


The
term of each Option (the “Option Term”) shall be as established by the Plan Administrator
or, if not so established, shall be ten years from the Grant Date. For
Incentive Stock Options, the Option Term shall be as specified in Sections 8.2
and 8.4.


 


7.4                               Exercise of Options


 


The
Plan Administrator shall establish and set forth in each instrument that
evidences an Option the time at which, or the installments in which, the Option
shall vest and become exercisable which provisions may be waived or modified by
the Plan Administrator at any time. If not so established in the instrument
evidencing the Option, the Option shall vest and become exercisable according
to the following schedule, which may be waived or modified by the Plan
Administrator at any time:


 


	
  Period of Participant’s Continuous

  	
   

  	
   

  
	
  Employment or Service With the Company

  	
   

  	
   

  
	
  or Its Related Corporations From the

  	
   

  	
  Portion
  of Total Option

  
	
  Option Grant Date

  	
   

  	
  That Is
  Vested and Exercisable

  
	
   

  	
   

  	
   

  
	
  After
  1 year

  	
   

  	
  1/4th

  



 

















 


	
  Each
  additional one-month period of

  continuous service completed thereafter

  	
   

  	
  An additional l/48th

  
	
   

  	
   

  	
   

  
	
  After
  4 years

  	
   

  	
  100%

  



 


To
the extent that an Option has vested and become exercisable, the Option may be
exercised from time to time by delivery to the Company of a written stock
option exercise agreement or notice, in a form and in accordance with procedures
established by the Plan Administrator, setting forth the number of shares with
respect to which the Option is being exercised, the restrictions imposed on the
shares purchased under such exercise agreement, if any, and such
representations and agreements as may be required by the Plan Administrator,
accompanied by payment in full as described in Section 7.5. The Plan
Administrator may prescribe, in lieu of or in addition to written agreements,
notices and forms, electronic or telephonic methods or procedures for Option
exercises. An Option may be exercised only for whole shares and may not be
exercised for less than a reasonable number of shares at any one time, as
determined by the Plan Administrator.


 


7.5                               Payment of Exercise Price


 


The
exercise price for shares purchased under an Option shall be paid in full to
the Company by delivery of consideration equal to the product of the Option
exercise price and the number of shares purchased. Such consideration must be
paid in cash or by check or, unless the Plan Administrator in its sole
discretion determines otherwise, either at the time the Option is granted or at
any time before it is exercised, in any combination of


 


(a)                                  cash or check;


 


(b)                                 tendering (either actually or, if and so long
as the Common Stock is registered under Section 12(b) or 12(g) of the Exchange
Act, by attestation) shares of Common Stock already owned by the Participant
for at least six months (or any shorter period necessary to avoid a charge to
the Company’s earnings for financial reporting purposes) having a Fair Market
Value on the day prior to the exercise date equal to the aggregate Option
exercise price;


 


(c)                                  if and so long as the Common Stock is
registered under Section 12(b) or 12(g) of the Exchange Act, delivery of a
properly executed exercise notice, together with irrevocable instructions, to
(i) a brokerage firm designated by the Company to deliver promptly to the Company
the aggregate amount of sale or loan proceeds to pay the Option exercise price
and any withholding tax obligations that may arise in connection with the
exercise and (ii) the Company to deliver the certificates for such purchased
shares directly to such brokerage firm, all in accordance with the regulations
of the Federal Reserve Board; or


 


(d)                                 such other consideration as the Plan
Administrator may permit.


 


In
addition, to assist a Participant (including a Participant who is an officer or
a director of the Company) in acquiring shares of Common Stock pursuant to an
Award granted under the Plan, the Plan Administrator, in its sole discretion,
may authorize, either at the Grant Date or at any time before the acquisition
of Common Stock pursuant to the Award, (i) the payment by a


 

















 


Participant of a full-recourse promissory note, (ii) the payment by the
Participant of the purchase price, if any, of the Common Stock in installments,
or (iii) the guarantee by the Company of a full-recourse loan obtained by the
Participant from a third party. Subject to the foregoing, the Plan
Administrator shall in its sole discretion specify the terms of any loans,
installment payments or loan guarantees, including the interest rate and terms
of and security for repayment.


 


7.6                               Post-Termination Exercises


 


The
Plan Administrator shall establish and set forth in each instrument that evidences
an Option whether the Option shall continue to be exercisable, and the terms
and conditions of such exercise, if there has been a Termination of Service,
and which provisions may be waived or modified by the Plan Administrator at any
time. If not so established in the instrument evidencing the Option, the Option
shall be exercisable according to the following terms and conditions, which may
be waived or modified by the Plan Administrator at any time:


 


(a)                                  Any portion of an Option that is not vested and
exercisable on the date of a Participant’s Termination of Service shall expire
on such date.


 


(b)                                 Any portion of an Option that is vested and
exercisable on the date of a Participant’s Termination of Service shall expire
upon the earliest to occur of


 


(i)                                     if the Participant’s Termination of Service
occurs for reasons other than Cause, death, Disability, Early Retirement or
Retirement, the three-month anniversary of the date of such Termination of
Service;


 


(ii)                                  if the Participant’s Termination of Service
occurs by reason of Retirement or Early Retirement, the one-year anniversary of
the date of such Termination of Service;


 


(iii)                               if the Participant’s Termination of Service
occurs by reason of Disability or death, the one-year anniversary of the date
of such Termination of Service; and


 


(iv)                              the last day of the Option Term.


 


Notwithstanding
the foregoing, if the Participant dies after the Termination of Service while
the Option is otherwise exercisable, the portion of the Option that is vested
and exercisable on the date of such Termination of Service shall expire upon
the earlier to occur of (y) the last day of the Option Term and (z) the first
anniversary of the date of death, unless the Plan Administrator determines
otherwise.


 


Also
notwithstanding the foregoing, if the Participant’s Termination of Service is
for Cause, the Option shall automatically expire at the time the Company first
notifies the Participant of such termination, unless the Plan Administrator
determines otherwise. If a Participant’s employment or service relationship
with the Company is suspended pending an investigation of whether the Participant
shall be terminated for Cause, all the Participant’s rights under any Option
likewise shall be suspended during the period of investigation, unless the Plan
Administrator determines otherwise. If any facts that would constitute Cause
for termination or removal of a


 

















 


Participant are discovered after the Participant’s Termination of
Service, any Option then held by the Participant may be immediately terminated
by the Plan Administrator, in its sole discretion.


 


Unless
the Plan Administrator specifies otherwise, a Participant’s employment or
service relationship shall not be deemed terminated if at the Company’s request
Participant transfers to provide services to any partnership, joint venture or
corporation not meeting the requirements of a Related Corporation in which the
Corporation or a Related Corporation is a party and which is designated by the
Committee as subject to this provision, and such service shall be considered
employment or a service relationship for purposes of the Plan.


 


A
Participant’s change in status from an employee to a consultant, agent, advisor
or independent contractor, or a change in status from a consultant, agent, advisor
or independent contractor to an employee, shall not be considered a Termination
of Service for purposes of this Section 7. The effect of a Company-approved
leave of absence on the terms and conditions of an Option shall be determined
by the Plan Administrator, in its sole discretion.


 


SECTION 8. INCENTIVE STOCK OPTION LIMITATIONS


 


To
the extent required by Section 422 of the Code, Incentive Stock Options shall
be subject to the following additional terms and conditions:


 


8.1                               Dollar Limitation


 


To
the extent the aggregate Fair Market Value (determined as of the Grant Date) of
Common Stock with respect to which Incentive Stock Options are exercisable for
the first time during any calendar year (under the Plan and all other stock
option plans of the Company) exceeds $100,000, such portion in excess of
$100,000 shall be treated as a Nonqualified Stock Option. In the event the
Participant holds two or more such Options that become exercisable for the
first time in the same calendar year, such limitation shall be applied on the
basis of the order in which such Options are granted.


 


8.2                               More Than 10% Stockholders


 


If
an individual owns more than 10% of the total combined voting power of all
classes of the stock of the Company or of its parent or subsidiary corporations,
then the exercise price per share of an Incentive Stock Option granted to such
individual shall not be less than 110% of the Fair Market Value of the Common
Stock on the Grant Date and the Option Term shall not exceed five years. The
determination of more than 10% ownership shall be made in accordance with
Section 422 of the Code.


 


8.3                               Eligible Employees


 


Individuals
who are not employees of the Company or one of its parent corporations or
subsidiary corporations may not be granted Incentive Stock Options.


 

















 


8.4                               Term


 


Subject
to Section 8.2, the Option Term shall not exceed ten years.


 


8.5                               Exercisability


 


An
Option designated as an Incentive Stock Option shall cease to qualify for
favorable tax treatment as an Incentive Stock Option to the extent it is
exercised (if permitted by the terms of the Option) (a) more than three months
after the date of Termination of Service for reasons other than death or
Disability, (b) more than one year after the date of Termination of Service by
reason of Disability, or (c) after the Participant has been on leave of absence
for more than 90 days, unless the Participant’s reemployment rights are
guaranteed by statute or contract.


 


8.6                               Taxation of Incentive Stock
Options


 


In
order to obtain certain tax benefits afforded to Incentive Stock Options under
Section 422 of the Code, the Participant must hold the shares issued upon the
exercise of an Incentive Stock Option for two years after the Grant Date and
one year from the date of exercise. A Participant may be subject to the
alternative minimum tax at the time of exercise of an Incentive Stock Option.
The Participant shall give the Company prompt notice of any disposition of
shares acquired by the exercise of an Incentive Stock Option prior to the
expiration of such holding periods.


 


8.7                               Stockholder Approval


 


If
the stockholders of the Company do not approve the Plan within 12 months after
the Board of Director’s adoption of the Plan, any Incentive Stock Options will
become Nonqualified Stock Options.


 


8.8                               Code Definitions


 


For
purposes of this Section 8, “parent corporation,” “subsidiary corporation” and “Disability”
shall have the meanings attributed to those terms for purposes of Section 422
of the Code.


 


SECTION 9. STOCK AWARDS


 


9.1                               Grant of Stock Awards


 


The
Plan Administrator is authorized to make Awards of Common Stock or Awards
denominated in units of Common Stock on such terms and conditions and subject
to such restrictions, if any (which may be based on continuous service with the
Company or the achievement of performance goals), as the Plan Administrator
shall determine, in its sole discretion, which terms, conditions and
restrictions shall be set forth in the instrument evidencing the Award. The
terms, conditions and restrictions that the Plan Administrator shall have the
power to determine shall include, without limitation, the manner in which
shares subject to Stock Awards are held during the periods they are subject to
restrictions and the circumstances under


 

















 


which forfeiture of the Stock Award shall occur by reason of the
Participant’s Termination of Service.


 


9.2                               Issuance of Shares


 


Upon
the satisfaction of any terms, conditions and restrictions prescribed in
respect to a Stock Award, or upon the Participant’s release from any terms,
conditions and restrictions of a Stock Award, as determined by the Plan
Administrator, the Company shall release, as soon as practicable, to the
Participant or, in the case of the Participant’s death, to the personal
representative of the Participant’s estate or as the appropriate court directs,
the appropriate number of shares of Common Stock.


 


9.3                               Waiver of Restrictions


 


Notwithstanding
any other provisions of the Plan, the Plan Administrator may, in its sole discretion,
waive the forfeiture period and any other terms, conditions or restrictions on
any Stock Award under such circumstances and subject to such terms and
conditions as the Plan Administrator shall deem appropriate.


 


SECTION 10. WITHHOLDING


 


The
Company may require the Participant to pay to the Company the amount of any
withholding taxes that the Company is required to withhold with respect to the
grant, vesting or exercise of any Award. Subject to the Plan and applicable
law, the Plan Administrator may, in its sole discretion, permit the Participant
to satisfy withholding obligations, in whole or in part, (a) by paying cash,
(b) by electing to have the Company withhold shares of Common Stock (up to the
employer’s minimum required tax withholding rate) or (c) by transferring to the
Company shares of Common Stock (already owned by the Participant for the period
necessary to avoid a charge to the Company’s earnings for financial reporting
purposes), in such amounts as are equivalent to the Fair Market Value of the
withholding obligation. The Company shall have the right to withhold from any
Award or any shares of Common Stock issuable pursuant to an Award or from any
cash amounts otherwise due or to become due from the Company to the Participant
an amount equal to such taxes (up to the employer’s minimum required tax withholding
rate). The Company may also deduct from any Award any other amounts due from
the Participant to the Company or a Related Corporation.


 


SECTION 11. ASSIGNABILITY


 


Awards
granted under the Plan and any interest therein may not be assigned, pledged or
transferred by the Participant and may not be made subject to attachment or
similar proceedings otherwise than by will or by the applicable laws of descent
and distribution, and, during the Participant’s lifetime, such Awards may be
exercised only by the Participant. Notwithstanding the foregoing, and to the
extent permitted by Section 422 of the Code with respect to incentive stock
options, the Plan Administrator, in its sole discretion, may permit such
assignment, transfer and exercisability and may permit a Participant to
designate a beneficiary who may exercise the Award or receive payment under the
Award after the Participant’s death; provided, however, that any


 

















 


Award so assigned or transferred shall be subject to all the same terms
and conditions contained in the instrument evidencing the Award.


 


SECTION 12. ADJUSTMENTS


 


12.1                        Adjustment of Shares


 


In the event that, at any
time or from time to time, a stock dividend, stock split, spin-off combination
or exchange of shares, recapitalization, merger, consolidation, distribution to
stockholders other than a normal cash dividend, or other change in the Company’s
corporate or capital structure results in (a) the outstanding shares, or any
securities exchanged therefor or received in their place, being exchanged for a
different number or kind of securities of the Company or of any other
corporation or (b) new, different or additional securities of the Company or of
any other corporation being received by the holders of shares of Common Stock
of the Company, then the Plan Administrator shall make proportional adjustments
in (i) the maximum number and kind of securities subject to the Plan and
issuable as Incentive Stock Options as set forth in Section 4.1 and (ii) the
number and kind of securities that are subject to any outstanding Award and the
per share price of such securities, without any change in the aggregate price
to be paid therefor. The determination by the Plan Administrator as to the
terms of any of the foregoing adjustments shall be conclusive and binding. Not
withstanding the foregoing, a dissolution or liquidation of the Company or a
Corporate Transaction shall not be governed by this Section 12.1 but shall be
governed by Sections 12.2 and 12.3, respectively.


 


12.2                        Dissolution
or Liquidation


 


To the extent not
previously exercised or settled, and unless otherwise determined by the Plan
Administrator in its sole discretion, Options and Stock Awards denominated in
units shall terminate immediately prior to the dissolution or liquidation of
the Company. To the extent a forfeiture provision or repurchase right
applicable to an Award has not been waived by the Plan Administrator, the Award
shall be forfeited immediately prior to the consummation of the dissolution or
liquidation.


 


12.3                        Corporate
Transaction


 


12.3.1              Options


 


(a)                                  In
the event of a Corporate Transaction as defined in Section 2 in clause (a) or
(b), except as otherwise provided in the instrument evidencing the Award, each
outstanding Option shall be assumed or continued or an equivalent option or
right substituted by the surviving corporation, the successor corporation or
its parent corporation, as applicable (the “Successor Corporation”).


 


(b)                                 In
the event that the Successor Corporation refuses to assume, continue or
substitute for the Option, or in the event of a change in control as defined in
Section 2 in clause (c), the Participant shall fully vest in and have the right
to exercise the Option as to all of the shares of Common Stock subject thereto,
including shares as to which the Option would not otherwise be vested or
exercisable. In such case, the Plan Administrator shall notify the


 

















 


Participant in writing or electronically that the Option shall be fully
vested and exercisable for a specified time period after the date of such notice,
and the Option shall terminate upon the expiration of such period, in each case
conditioned on the consummation of the Corporate Transaction.


 


(c)                                  For the purposes of this Section 12.3, the
Option shall be considered assumed, continued or substituted if, following the
Corporate Transaction, the option or right confers the right to purchase or
receive, for each share of Common Stock subject to the Option, immediately
prior to the Corporate Transaction, the consideration (whether stock, cash, or
other securities or property) received in the Corporate Transaction by holders
of Common Stock for each share held on the effective date of the transaction
(and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares);
provided, however, that if such consideration received in the Corporate
Transaction is not solely common stock of the Successor Corporation, the Plan
Administrator may, with the consent of the Successor Corporation, provide for
the consideration to be received upon the exercise of the Option, for each
share of Common Stock subject thereto, to be solely common stock of the
Successor Corporation equal in fair market value to the per share consideration
received by holders of Common Stock in the Corporate Transaction. The
determination of such substantial equality of value of consideration shall be
made by the Plan Administrator and its determination shall be conclusive and
binding.


 


(d)                                 All Options shall terminate and cease to
remain outstanding immediately following the consummation of the Corporate
Transaction, except to the extent assumed by the Successor Corporation.


 


12.3.2              Stock Awards


 


In
the event of a Corporate Transaction, except as otherwise provided in the
instrument evidencing the Award, the vesting of shares subject to Stock Awards
shall accelerate, and the forfeiture provisions to which such shares are
subject shall lapse, if and to the same extent that the vesting of outstanding
Options accelerates in connection with the Corporate Transaction. If unvested
Options are to be assumed, continued or substituted by a Successor Corporation
without acceleration upon the occurrence of a Corporate Transaction, the
forfeiture provisions to which such Stock Awards are subject shall continue
with respect to shares of the Successor Corporation that may be issued in
exchange for such shares.


 


12.4                        Further Adjustment of Awards


 


Subject
to Sections 12.1 and 12.2, the Plan Administrator shall have the discretion,
exercisable at any time before a Corporate Transaction or other sale, merger,
consolidation, reorganization, liquidation or change in control of the Company,
as defined by the Plan Administrator, to take such further action as it
determines to be necessary or advisable, and fair and equitable to the
Participants, with respect to Awards. Such authorized action may include (but
shall not be limited to) establishing, amending or waiving the type, terms,
conditions or duration of, or restrictions on, Awards so as to provide for
earlier, later, extended or additional time for exercise, lifting restrictions
and other modifications, and the Plan Administrator may take


 

















 


such actions with respect to all Participants, to certain categories of
Participants or only to individual Participants. The Plan Administrator may
take such action before or after granting Awards to which the action relates
and before or after any public announcement with respect to such sale, merger,
consolidation, reorganization, liquidation or change in control that is the
reason for such action.


 


12.5                        Limitations


 


The
grant of Awards shall in no way affect the Company’s right 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.


 


12.6                        Fractional Shares


 


In
the event of any adjustment in the number of shares covered by any Award, each
such Award shall cover only the number of full shares resulting from such
adjustment.


 


SECTION 13. REPURCHASE AND FIRST REFUSAL RIGHTS


 


13.1                        Repurchase Rights From
Participants After Termination of Service


 


Until
the date on which the initial registration of the Common Stock under Section
12(b) or 12(g) of the Exchange Act first becomes effective, if a Participant’s
Termination of Service has occurred, then all shares of Common Stock issued to
the Participant pursuant to an Award (whether issued before or after the date
of such Termination of Service) shall be subject to repurchase by the Company,
at the Company’s sole discretion, at the Fair Market Value of such shares on
the date of such repurchase. The terms and conditions upon which such
repurchase right shall be exercisable (including the period and procedure for
exercise) shall be established by the Plan Administrator.


 


13.2                        First Refusal
Rights


 


Until
the date on which the initial registration of the Common Stock under Section
12(b) or 12(g) of the Exchange Act first becomes effective, the Company shall
have the right of first refusal with respect to any proposed sale or other
disposition by the Participant of any shares of Common Stock issued pursuant to
an Award granted under the Plan. Such right of first refusal shall be
exercisable in accordance with the terms and conditions established by the Plan
Administrator and set forth in the agreement evidencing such right.


 


13.3                        Restrictions on Rights


 


Repurchase
or first refusal rights under this Section 13 may not be exercised earlier than
six months and one day following the date the shares were purchased by the
Participant, or such time period necessary to avoid charges to the Company’s
earnings for financial reporting purposes.


 

















 


SECTION 14. MARKET STANDOFF


 


In
connection with any underwritten public offering by the Company of its equity securities
pursuant to an effective registration statement filed under the Securities Act,
including the Company’s initial public offering, a person shall not sell, make
any short sale of, loan, hypothecate, pledge, grant any option for the purchase
of, or otherwise dispose of or transfer for value or otherwise agree to engage
in any of the foregoing transactions with respect to any shares issued pursuant
to an Award granted under the Plan without the prior written consent of the
Company or its underwriters. Such limitations shall be in effect for such
period of time as may be requested by the Company or such underwriters and
agreed to by the Company’s officers and directors with respect to their shares;
provided, however, that in no event shall such period exceed 180 days. The
limitations of this paragraph shall in all events terminate two years after the
effective date of the Company’s initial public offering. Holders of shares
issued pursuant to an Award granted under the Plan shall be subject to the
market standoff provisions of this paragraph only if the officers and directors
of the Company are also subject to similar arrangements.


 


In
the event of any stock split, stock dividend, recapitalization, combination of
shares, exchange of shares or other change affecting the Company’s outstanding
Common Stock effected as a class without the Company’s receipt of
consideration, any new, substituted or additional securities distributed with
respect to the purchased shares shall be immediately subject to the provisions
of this Section 14, to the same extent the purchased shares are at such time
covered by such provisions.


 


In
order to enforce the limitations of this Section 14, the Company may impose
stop-transfer instructions with respect to the purchased shares until the end
of the applicable standoff period.


 


SECTION 15. AMENDMENT AND TERMINATION OF PLAN


 


15.1                        Amendment of Plan


 


The
Plan may be amended only by the Board in such respects as it shall deem
advisable; provided, however, that to the extent required for compliance with
Section 422 of the Code or any applicable law or regulation, stockholder
approval shall be required for any amendment that would (a) increase the total
number of shares available for issuance under the Plan, (b) modify the class of
employees eligible to receive Options, or (c) otherwise require stockholder
approval under any applicable law or regulation. Any amendment made to the Plan
that would constitute a “modification” to Incentive Stock Options outstanding
on the date of such amendment shall not, without the consent of the
Participant, be applicable to such outstanding Incentive Stock Options but
shall have prospective effect only. Notwithstanding the foregoing, any
adjustments made pursuant to Section 12 shall not be subject to these restrictions.


 


15.2                        Termination of Plan


 


The
Board may suspend or terminate the Plan at any time. The Plan shall have no
fixed expiration date; provided, however, that no Incentive Stock Options may
be granted more than ten years after the later of (a) the Plan’s adoption by
the Board and (b) the adoption by the Board


 

















 


of any amendment to the Plan that constitutes the adoption of a new
plan for purposes of Section 422 of the Code.


 


15.3                        Consent of Participant


 


The
amendment or termination of the Plan or the amendment of an outstanding Award
shall not, without the Participant’s consent, impair or diminish any rights or
obligations under any Award theretofore granted to the Participant under the
Plan. Any change or adjustment to an outstanding Incentive Stock Option shall
not, without the consent of the Participant, be made in a manner so as to
constitute a “modification” that would cause such Incentive Stock Option to
fail to continue to qualify as an Incentive Stock Option. Notwithstanding the
foregoing, any adjustments made pursuant to Section 12 shall not be subject to
these restrictions.


 


SECTION 16. GENERAL


 


16.1                        Evidence of Awards


 


Awards
granted under the Plan shall be evidenced by a written instrument that shall
contain such terms, conditions, limitations and restrictions as the Plan
Administrator shall deem advisable and that are not inconsistent with the Plan.


 


16.2                        No Individual Rights


 


Nothing
in the Plan or any Award granted under the Plan shall be deemed to constitute
an employment contract or confer or be deemed to confer on any Participant any
right to continue in the employ of, or to continue any other relationship with,
the Company or any Related Corporation or limit in any way the right of the
Company or any Related Corporation to terminate a Participant’s employment or
other relationship at any time, with or without Cause.


 


Neither
a Participant nor any other person shall, by reason of participation in the
Plan, acquire any right in or title to any assets, funds or property of the
Company or any Related Corporation whatsoever including, without limitation,
any specific funds, assets or other property which the Company or any Related
Corporation, in its or their sole discretion, may set aside in anticipation of
a liability under the Plan. A Participant shall have only a contractual right
to the Common Stock or amounts, if any, payable under the Plan, unsecured by
any assets of the Company or any Related Corporation, and nothing contained in
the Plan shall constitute a representation of guarantee that the assets of the
Company or any Related Corporation shall be sufficient to pay any benefits to
any person.


 


Nothing
in this Plan nor in any agreement evidencing an Award shall confer upon any
eligible employee or Participant any promise or commitment by the Company or a
Related Corporation regarding future positions, future work assignments, future
compensation or any other term or condition or employment or affiliation.


 


The
Company, in establishing and maintaining this Plan as a voluntary and unilateral
undertaking, expressly disavows the creation of any rights in eligible
employees, Participants or others claiming entitlement under the Plan or any
obligations on the part of the Company, any


 

















 


Related Corporation or the Plan Administrator, except as expressly
provided herein. In particular, no third party beneficiary rights shall be
created under the Plan. Without limiting the generality of the foregoing, the
Company disavows any undertaking to maintain the tax-qualified status of
Options designated as Incentive Stock Options or to assure the tax treatment of
any particular award, including the deferral or transfer of any Award benefits,
as may be permitted by the Plan Administrator.


 


16.3                        Issuance of Shares


 


Notwithstanding
any other provision of the Plan, the Company shall have no obligation to issue
or deliver any shares of Common Stock under the Plan or make any other
distribution of benefits under the Plan unless such issuance, delivery or
distribution would comply with all applicable laws (including, without
limitation, the requirements of the Securities Act), and the applicable
requirements of any securities exchange or similar entity.


 


The
Company shall be under no obligation to any Participant to register for
offering or resale or to qualify for exemption under the Securities Act, or to
register or qualify under state or foreign securities laws, any shares of
Common Stock, security or interest in a
security paid or issued under, or created by, the Plan, or to continue
in effect any such registrations or qualifications if made. The Company may
issue certificates for shares with such legends and subject to such
restrictions on transfer and stop-transfer instructions as counsel for the
Company deems necessary or desirable for compliance by the Company with
federal, state and foreign securities laws.


 


To
the extent that the Plan or any instrument evidencing an Award provides for
issuance of stock certificates to reflect the issuance of shares of Common
Stock, the issuance may be effected on a noncertificated basis, to the extent
not prohibited by applicable law or the applicable rules of any stock exchange.
As a condition to the exercise of an Option or any other receipt of Common
Stock pursuant to an Award under the Plan, the Company may require (i) the
Participant to represent and warrant at the time of any such exercise or
receipt that such shares are being purchased or received only for the
Participant’s own account and without any present intention to sell or
distribute such shares and (ii) such other action or agreement by the
Participant as may from time to time be necessary to comply with the foreign,
federal and state securities laws. At the option of the Company, a
stop-transfer order against any such shares may be placed on the official stock
books and records of the Company, and a legend indicating that such shares may
not be pledged, sold or otherwise transferred, unless an opinion of counsel is
provided (concurred in by counsel for the Company) stating that such transfer
is not in violation of any applicable law or regulation, may be stamped on
stock certificates to ensure exemption from registration. The Plan
Administrator may also require the Participant to execute and deliver to the
Company a purchase agreement or such other agreement as may be in use by the
Company at such time that describes certain terms and conditions applicable to
the shares.


 

















 


16.4                        No Rights as a Stockholder


 


No
Option or Stock Award denominated in units shall entitle the Participant to any
cash dividend, voting or other right of a stockholder unless and until the date
of issuance under the Plan of the shares that are the subject of such Award.


 


16.5                        Compliance With Laws and
Regulations


 


Notwithstanding
anything in the Plan to the contrary, the Plan Administrator, in its sole
discretion, may bifurcate the Plan so as to restrict, limit or condition the
use of any provision of the Plan to Participants who are officers or directors
subject to Section 16 of the Exchange Act without so restricting, limiting or
conditioning the Plan with respect to other Participants. Additionally, in
interpreting and applying the provisions of the Plan, any Option granted as an
Incentive Stock Option pursuant to the Plan shall, to the extent permitted by
law, be construed as an “incentive stock option” within the meaning of Section
422 of the Code.


 


16.6                        Participants in Foreign
Countries


 


The
Plan Administrator shall have the authority to adopt such modifications,
procedures and subplans as may be necessary or desirable to comply with provisions
of the laws of foreign countries in which the Company or its Related
Corporations may operate to assure the viability of the benefits from Awards
granted to Participants employed in such countries and to meet the objectives
of the Plan.


 


16.7                        No Trust or Fund


 


The
Plan is intended to constitute an “unfunded” plan. Nothing contained herein
shall require the Company to segregate any monies or other property, or shares
of Common Stock, or to create any trusts, or to make any special deposits for
any immediate or deferred amounts payable to any Participant, and no
Participant shall have any rights that are greater than those of a general
unsecured creditor of the Company.


 


16.8                        Severability


 


If
any provision of the Plan or any Award is determined to be invalid, illegal or
unenforceable in any jurisdiction, or as to any person, or would disqualify the
Plan or any Award under any law deemed applicable by the Plan Administrator,
such provision shall be construed or deemed amended to conform to applicable laws,
or, if it cannot be so construed or deemed amended without, in the Plan
Administrator’s determination, materially altering the intent of the Plan or
the Award, such provision shall be stricken as to such jurisdiction, person or
Award, and the remainder of the Plan and any such Award shall remain in full
force and effect.


 


16.9                        Choice of Law


 


The
Plan and all determinations made and actions taken pursuant hereto, to the
extent not otherwise governed by the laws of the United States, shall be
governed by the laws of the State of Washington without giving effect to
principles of conflicts of laws.


 

















 


SECTION 17. EFFECTIVE DATE


 


The
Effective Date is the date on which the Plan is adopted by the Board, so long
as it is approved by the Company’s stockholders at any time within 12 months of
such adoption.