Exhibit
10.1


 


ALLOS
THERAPEUTICS, INC.

2000 STOCK INCENTIVE COMPENSATION PLAN, AS AMENDED


 


SECTION 1.  PURPOSE


 


The
purpose of the Allos Therapeutics, Inc. 2000 Stock Incentive Compensation
Plan, as amended (the “Plan”) is to enhance the long-term stockholder value of
Allos Therapeutics, Inc., 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:


 


“Award” means an award or grant made pursuant to the Plan,
including, without limitation, awards or grants of Stock Awards and Options, or
any combination of the foregoing.


 


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


 


“Cause” means dishonesty, fraud, misconduct, unauthorized use
or disclosure of confidential information or trade secrets, or conviction or
confession of a crime punishable by law (except minor violations), 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 common stock, par value $0.001 per
share, of the Company.


 


“Corporate Transaction” has the meaning set forth in Section 12.3(a).


 


“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 Company, to perform his or her duties for the
Company or a Related Corporation and to be engaged in any substantial gainful
activity.


 


“Effective Date” has the meaning set forth in Section 15.


 


“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.


 


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“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.


 


“Parent,” except as otherwise provided in Section 8.3 in
connection with Incentive Stock Options, means any entity, whether now or
hereafter existing, that directly or indirectly controls the Company.


 


“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 Parent or Subsidiary of the
Company.


 


“Retirement” means retirement as of the individual’s normal
retirement date under the Company’s 401(k) plan or other similar successor
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 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.


 


“Subsidiary,” except as otherwise provided in Section 8.3
in connection with Incentive Stock Options, means any entity that is directly
or indirectly controlled by the Company.


 


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


 


“Termination Date” has the meaning set forth in Section 7.6.


 


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.


 


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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, the number of
shares of Common Stock that shall be available for issuance under the Plan
shall be:


 


(a)  3,500,100 shares plus;


 


(b)  an annual increase to be added as of the first
day of the Company’s fiscal year beginning in 2001 equal to the lesser of (i) 440,000
shares and (ii) 2% of the adjusted average common shares outstanding of
the Company used to calculate fully diluted earnings per share as reported in
the Annual Report to stockholders for the preceding year or (iii) any
lesser amount determined by the Board; provided that
any shares from any such increases in previous years that are not actually
issued shall be added to the aggregate number of shares available for issuance
under the Plan; plus


 


(c)  any authorized shares (i) not issued or
subject to outstanding awards under the Company’s 1995 Stock Option Plan (the “Prior
Plan”) on the Effective Date and (ii) any shares subject to outstanding
awards under the Prior Plan on the Effective Date that cease to be subject to
such awards (other than by reason of exercise or payment of the awards to the
extent they are exercised for or settled in shares), which shares shall cease,
as of the date of stockholder approval of the Plan, to be available for grant
and issuance under the Prior Plan, but 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 payment 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.


 


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 made to consultants, agents, advisors and
independent contractors who are engaged to provide services to the Company and
its Related Corporations; provided, however,
that such Participants render bona fide services that are not in connection
with the offer and sale of the Company’s securities in a capital-raising 


 


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transaction and do not
directly or indirectly promote or maintain a market for the Company’s
securities. Subject to adjustment from time to time as provided in Section 12.1,
no employee of the Company or its Related Corporations shall be eligible to be
granted Options or Stock Awards covering more than two million (2,000,000)
shares of Common Stock during any calendar year.


 


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, cash
payments, 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. The Plan Administrator may at any time
offer to buy out, for a payment in cash or Common Stock, an Award previously granted
based on such terms and conditions as the Plan Administrator shall establish
and communicate to the Participant at the time such offer is made.


 


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 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”). In the event
that a written agreement pursuant to which the Acquisition Transaction is
completed is approved by the Board and said agreement sets forth the terms and
conditions of the substitution for or assumption of outstanding awards of the
Acquired Entity, said 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
and not less than 85% of the Fair Market Value of the Common Stock with respect
to Nonqualified 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.


 


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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 maximum 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

  	
   

  	
  Percent of Total Option

  	
   

  
	
  From the Option Grant Date

  	
   

  	
  That Is Vested and Exercisable

  	
   

  
	
  After 1 year

  	
   

  	
  25%

  	
   

  
	
  Each additional one-month period of
  continuous service completed thereafter

  	
   

  	
  An
  additional 1¤48

  	
   

  
	
  After 4
  years

  	
   

  	
  100%

  	
   

  






 


The
Plan Administrator may adjust the vesting schedule of an Option held by a
Participant who works less than “full-time” as that term is defined by the Plan
Administrator.


 


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. An Option 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


 


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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 a Participant ceases to be
employed by, or to provide services to, the Company or its Related
Corporations, 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 termination of the Participant’s
employment or service relationship (the “Termination Date”) shall expire on
such date.


 


(b)  Any portion of an Option that is vested
and exercisable on the Termination Date shall expire upon the earliest to occur
of


 


(i)          the last day
of the Option Term;


 


(ii)         if the
Participant’s Termination Date occurs for reasons other than Cause, death,
Disability, or Retirement, the three-month anniversary of such Termination
Date; and


 


(iii)        if the
Participant’s Termination Date occurs by reason of death, Disability or
Retirement, the one-year anniversary of such Termination Date.


 


Notwithstanding
the foregoing, if the Participant dies after the Termination Date while the
Option is otherwise exercisable, the portion of the Option that is vested and
exercisable on such Termination Date 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, in case of termination of the Participant’s
employment or service relationship for Cause, the Option shall automatically
expire upon first notification to 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.


 


A
Participant’s transfer of employment or service relationship between or among
the Company and its Related Corporations, or a change in status from an
employee to a consultant, agent, advisor or independent contractor, shall not
be considered a termination of employment or service relationship 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.


 


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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 voting power of all classes of
the Company’s stock, then the exercise price per share of an Incentive Stock
Option 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. For
purposes of this Section 8.3, “parent corporation” and “subsidiary
corporation” shall have the meanings attributed to those terms for purposes of Section 422
of the Code.


 


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 Termination Date for reasons other than death or Disability, (b) more
than one year after the Termination Date 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.


 


For
purposes of this Section 8.5, Disability shall mean “disability” as that
term is defined for purposes of Section 422 of the Code.


 


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.


 


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8.7                 Promissory
Notes


 


The
amount of any promissory note delivered pursuant to Section 7.5 in
connection with an Incentive Stock Option shall bear interest at a rate
specified by the Plan Administrator, but in no case less than the rate required
to avoid imputation of interest (taking into account any exceptions to the
imputed interest rules) for federal income tax purposes.


 


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 termination of the Participant’s employment or service
relationship.


 


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 minimum required federal 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. The Company
may also deduct from any Award any other amounts due from the Participant to
the Company or a Related Corporation.


 


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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, 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 compensation 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 class 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 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.
Notwithstanding 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


 


In
the event of the proposed dissolution or liquidation of the Company, the Plan
Administrator shall notify each Participant as soon as practicable prior to the
effective date of such proposed transaction. The Plan Administrator in its
discretion may permit a Participant to exercise an Option until ten days prior
to such transaction with respect to all vested and exercisable shares of Common
Stock covered thereby and with respect to such number of unvested shares as the
Plan Administrator shall determine. In addition, the Plan Administrator may
provide that any forfeiture provision or Company repurchase option applicable
to any Award shall lapse as to such number of shares as the Plan Administrator
shall determine, contingent upon the occurrence of the proposed dissolution or
liquidation at the time and in the manner contemplated. To the extent an Option
has not been previously exercised, the Option shall terminate automatically
immediately prior to the consummation of the proposed action. To the extent a
forfeiture provision applicable to a Stock Award has not been waived by the
Plan Administrator, the Stock Award shall be forfeited automatically
immediately prior to the consummation of the proposed action.


 


12.3          Corporate
Transaction


 


(a)  Definition


 


“Corporate Transaction” means any of the following events:


 


(i)          Consummation
of any merger or consolidation of the Company with or into another corporation;
or


 


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(ii)         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.


 


(b)  Options


 


In
the event of a Corporate Transaction, 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”). In the event that the Successor Corporation
refuses to assume, continue or substitute for the Option, 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. If an Option will become fully vested
and exercisable in lieu of assumption or substitution in the event of a
Corporate Transaction, 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. For the purposes of this Section 12.3,
the Option shall be considered assumed 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. 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.


 


(c)  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 12.2 and 12.3, the Plan Administrator shall have the discretion,
exercisable at any time before a 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.


 


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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.  AMENDMENT AND TERMINATION OF PLAN


 


13.1          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 persons 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.


 


13.2          Termination
of Plan


 


The
Board may suspend or terminate the Plan at any time. Unless sooner terminated
as provided herein, the Plan shall terminate ten years after the earlier of the
Plan’s adoption by the Board and approval by the stockholders.


 


13.3          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 14.  GENERAL


 


14.1          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.


 


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14.2          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.


 


14.3          Registration


 


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 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
and state 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.


 


14.4          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.


 


14.5          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.


 


14.6          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.


 


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14.7          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.


 


14.8          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.


 


14.9          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 Colorado without giving effect to principles of
conflicts of laws.


 


SECTION 15.  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.


 


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