Exhibit 10.03


 


INSIGNIA SOLUTIONS plc


 


1995 INCENTIVE STOCK OPTION PLAN
FOR U.S. EMPLOYEES


 


As Adopted
February 9, 1995


Amended
April 20, 1999, April 12, 2000, June 8, 2001 and June 5,
2002

Amended and Restated April 30, 2004


 


1.                                       PURPOSE.  The purpose of the Plan is to provide
incentives to attract, retain and motivate eligible persons whose present and
potential contributions are important to the success of the Company, its
Parent, Subsidiaries and Affiliates, by offering them an opportunity to
participate in the Company’s future performance through awards of share
options.  Capitalized terms not defined
in the text are defined in Section 20.


 


2.                                       SHARES
SUBJECT TO THE PLAN.


 


2.1                                 Number of Shares Available.  Subject to Sections 2.2 and 14 of the Plan,
the total number of Shares issued and reserved and available for grant and
issue pursuant to options under the Plan, the UK Employee Share Option Scheme
1996 (the “UK Plan”), the 1988 U.S. Stock Option Plan (the “Prior
Plan”) and the Company’s Inland Revenue approved share option scheme (the “Inland
Revenue Plan”) (the “Plan”, the “UK Plan”, the “Prior Plan”
and the “Inland Revenue Plan”, collectively, the “Option Plans”),
shall be eight million seventy two thousand and seventy one (8,572,071)
Shares.  As of the Effective Date,
options will no longer be granted pursuant to the Prior Plan.  As of the date of expiration of the Inland
Revenue Plan in December 1996, options will no longer be granted pursuant
to the Inland Revenue Plan.  Shares
shall again be available for grant and issue in connection with future awards
of options under the Plan and the UK Plan if such Shares cease to be subject to
an option granted pursuant to the Option Plans.  To the extent Shares are subject to options granted pursuant to
the UK Plan, the Inland Revenue Plan or the Prior Plan, such Shares shall be
unavailable for issue under this Plan until such options expire or become
unexercisable without having been exercised in full.  To the extent Shares are subject to options granted pursuant to
this Plan, such Shares shall be unavailable for issue under the UK Plan until
such options expire or become unexercisable without having been exercised in
full.


 


2.2                                 Adjustment of Shares.  In the event that the number of Shares in
issue is changed by a consolidation or sub-division of ordinary shares of the
Company or any bonus or other capitalization issue of ordinary shares or any
similar change in the capital structure of the Company without consideration,
or by a Corporate Transaction (as defined in Section 14.1) then, unless
such change results in the termination of all outstanding Awards as a result of
the Corporate Transaction, (a) the number of Shares reserved for issue under
the Plan and (b) the Exercise Prices of and number of Shares subject to
outstanding Awards shall be proportionately adjusted, subject to any required
action by the Board or the shareholders of the Company and compliance with
applicable securities laws; provided, however, that fractions of
a Share shall not be issued but shall either be paid in cash at Fair Market
Value or shall be rounded


 

















 


up to the nearest Share,
as determined by the Committee; and provided, further, that the
Exercise Price of any Award may not be decreased to below the U.S. Dollar
equivalent of the par value of the Shares calculated by reference to the
Conversion Rate prevailing at the date of exercise of an Award.


 


3.                                       ELIGIBILITY.  ISOs (as defined in Section 5 below)
may be granted only to employees (including officers and directors who are also
employees) of the Company or of a Parent or Subsidiary of the Company.  NQSOs (as defined in Section 5 below)
may be granted to employees, officers, directors, consultants, independent
contractors and advisors of the Company or any Parent, Subsidiary or Affiliate
of the Company; provided such consultants, contractors and advisors
render bona fide services not in connection with the offer and sale of
securities in a capital-raising transaction. 
A person may be granted more than one Award under the Plan.  Each person is eligible to receive an Award
of up to an aggregate maximum of five hundred thousand (500,000) Shares per
fiscal year.


 


4.                                       ADMINISTRATION.


 


4.1                                 Committee Authority.  The Plan shall be administered by the
Committee.  Subject to the general
purposes, terms and conditions of the Plan, the Committee shall have full power
to implement and carry out the Plan. 
The Committee shall have the authority to:


 


(a)                                  construe
and interpret the Plan, any Stock Option Agreement and any other agreement or
document executed pursuant to the Plan;


 


(b)                                 prescribe,
amend and rescind rules and regulations relating to the Plan;


 


(c)                                  select
persons to receive Awards;


 


(d)                                 determine
the form and terms of Awards;


 


(e)                                  determine
the number of Shares subject to Awards;


 


(f)                                    determine
whether Awards will be granted in replacement of, or as alternatives to, other
Awards under the Plan or any other incentive or compensation plan of the
Company or any Parent, Subsidiary or Affiliate of the Company;


 


(g)                                 grant
waivers of Plan or Award conditions;


 


(h)                                 determine
the vesting and exercisability of Awards;


 


(i)                                     correct
any defect, supply any omission, or reconcile any inconsistency in the Plan,
any Award or any Stock Option Agreement;


 


(j)                                     determine
the disposition of Awards in the event of a Participant’s divorce or
dissolution of marriage; and


 


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(k)                                  make
all other determinations necessary or advisable for the administration of the
Plan.


 


4.2                                 Committee Discretion.  Any determination made by the Committee with
respect to any Award shall be made in its sole discretion at the time of grant
of the Award or, unless in contravention of any express term of the Plan or
Award, at any later time, and such determination shall be final and binding on
the Company and all persons having an interest in any Award under the
Plan.  The Committee may delegate to one
or more officers of the Company the authority to grant an Award under the Plan
to Participants who are not Insiders of the Company.


 


4.3                                 Committee Requirement.  If two or more members of the Board are
Outside Directors, the Committee shall be comprised of at least two members of
the Board, all of whom are Outside Directors.


 


5.                                       STOCK
OPTIONS.  The Committee may grant Awards
to eligible persons and shall determine whether such Awards shall be Incentive
Stock Options within the meaning of the Code (“ISOs”) or Nonqualified
Stock Options (“NQSOs”), the number of Shares subject to the Award, the
Exercise Price of the Award, the period during which the Award may be
exercised, and all other terms and conditions of the Award, subject to the
following:


 


5.1                                 Form of Option Grant.  Each Award granted under the Plan shall be
evidenced by a Stock Option Agreement which shall expressly identify the Award
as an ISO or NQSO, and be in such form and contain such provisions (which need
not be the same for each Participant) as the Committee shall from time to time
approve, and which shall comply with and be subject to the terms and conditions
of the Plan.


 


5.2                                 Date of Grant.  The date of grant of an Award shall be the
date on which the Committee makes the determination to grant such Award, unless
otherwise specified by the Committee. 
The Stock Option Agreement and a copy of the Plan will be delivered to
the Participant within a reasonable time after the granting of the Award.


 


5.3                                 Exercise Period.  Awards shall be exercisable within the times
or upon the events determined by the Committee as in the Stock Option
Agreement; provided, however, that no Award shall be exercisable
after the expiration of ten (10) years from the date the Award is granted; and provided
further that no ISO granted to a person who directly or by attribution
owns more than ten percent (10%) of the total combined voting power of all
classes of stock or shares of the Company or any Parent or Subsidiary of the
Company (“Ten Percent Shareholder”) shall be exercisable after the
expiration of five (5) years from the date the Award is granted.  The Committee also may provide for the
exercise of Awards to become exercisable at one time or from time to time,
periodically or otherwise, in such number or percentage as the Committee
determines.


 


5.4                                 Exercise Price.  The Exercise Price shall be determined by
the Committee when the Award is granted subject to the following:


 


(a)                                  The
Exercise Price shall not be less than 100% of the Fair Market Value of the
Shares on the date of grant; provided, that the Exercise Price of any
ISO


 


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granted to a Ten Percent
Shareholder shall not be less than 110% of the Fair Market Value of the Shares
on the date of grant.  Payment for the
Shares subscribed for may be made in accordance with Section 6 of the
Plan.


 


(b)                                 The
Exercise Price shall be in U.S. Dollars.


 


(c)                                  The
Exercise Price shall not be less than the U.S. Dollar equivalent of the par
value of the Shares calculated by reference to the Conversion Rate prevailing
at the date of exercise of an Award.


 


5.5                                 Method of Exercise.  Awards may be exercised only by delivery to
the Company of a written exercise agreement (the “Exercise Agreement”)
in a form approved by the Committee (which need not be the same for each
Participant), stating the number of Shares being subscribed for, the
restrictions imposed on the Shares, if any, and such representations and
agreements regarding Participant’s investment intent and access to information
and other matters, if any, as may be required or desirable by the Company to
comply with applicable securities laws, together with payment in full of the Exercise
Price for the number of Shares being subscribed for.


 


5.6                                 Termination.  Notwithstanding the exercise periods set
forth in the Stock Option Agreement, exercise of an Award shall always be
subject to the following:


 


(a)                                  If
the Participant is Terminated for any reason except death or Disability, then
Participant may exercise such Participant’s Awards only to the extent that such
Awards would have been exercisable upon the Termination Date no later than
three (3) months after the Termination Date (or such longer time period not
exceeding five (5) years as may be determined by the Committee), but in any
event, no later than the expiration date of the Awards.


 


(b)                                 If
the Participant is terminated because of death or Disability (or the
Participant dies within three (3) months of such termination), then
Participant’s Awards may be exercised only to the extent such Awards would have
been exercisable by Participant on the Termination Date and must be exercised
by Participant (or Participant’s legal representative or authorized assignee)
no later than  (i) twelve (12) months after the Termination Date in the case
of disability or (ii) eighteen (18) months after the Termination Date in the
case of death (or such longer time period not exceeding five (5) years as may be
determined by the Committee), but in any event no later than the expiration
date of the Awards.


 


5.7                                 Limitations on Exercise.  The Committee may specify a reasonable
minimum number of Shares that may be subscribed for on any exercise of an
Award; provided that such minimum number will not prevent Participant
from exercising the Award for the full number of Shares for which it is then
exercisable.


 


5.8                                 Limitations on ISOs.  The aggregate Fair Market Value (determined
as of the date of grant) of Shares with respect to which ISOs are exercisable
for the first time by a


 


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Participant during any
calendar year (under the Plan or under any other incentive stock option plan of
the Company or any Affiliate, Parent or Subsidiary of the Company) shall not
exceed $100,000.  If the Fair Market
Value of Shares on the date of grant with respect to which ISOs are exercisable
for the first time by a Participant during any calendar year exceeds $100,000,
the Awards for the first $100,000 worth of Shares to become exercisable in such
calendar year shall be ISOs and the Awards for the amount in excess of $100,000
that become exercisable in that calendar year shall be NQSOs.  In the event that the Code or the
regulations promulgated thereunder are amended after the Effective Date of the
Plan to provide for a different limit on the Fair Market Value of Shares
permitted to be subject to ISOs, such different limit shall be automatically
incorporated herein and shall apply to any Awards granted after the effective
date of such amendment.


 


5.9                                 Modification, Extension or Renewal.  The Committee may modify, extend or renew
outstanding Awards and authorize the grant of new Awards in substitution
therefor; provided that any such action may not, without the written
consent of Participant, impair any of Participant’s rights under any Award
previously granted.  Any outstanding ISO
that is modified, extended, renewed or otherwise altered shall be treated in
accordance with Section 424(h) of the Code.  The Committee may reduce the Exercise Price of outstanding Awards
without the consent of Participants affected by a written notice to them; provided,
however, that the Exercise Price may not be reduced below the minimum
Exercise Price that would be permitted under Section 5.4 of the Plan for
Awards granted on the date the action is taken to reduce the Exercise Price.


 


5.10                           No Disqualification.  Notwithstanding any other provision in the
Plan, no term of the Plan relating to ISOs shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be
exercised, so as to disqualify the Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any ISO under
Section 422 of the Code.


 


6.                                       PAYMENT
FOR SHARES.  Payment for Shares
subscribed for pursuant to the Plan may be made in cash (by check) or, where
expressly approved for the Participant by the Committee and where permitted by
law:


 


(a)                                  by
waiver of compensation due or accrued to Participant for services rendered;


 


(b)                                 provided
that a public market for the Shares exists:


 


(1)                                  through
a “same day sale” commitment from Participant and a broker-dealer that is a
member of the National Association of Securities Dealers (a “NASD Dealer”)
whereby the Participant irrevocably elects to exercise the Award and to sell a
portion of the Shares so subscribed for in order to pay for the Exercise Price,
and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the Exercise Price directly to the Company; or


 


(2)                                  through
a “margin” commitment from Participant and a NASD Dealer whereby Participant
irrevocably elects to exercise the Award


 


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and to pledge the Shares
so subscribed for to the NASD Dealer in a margin account as security for a loan
from the NASD Dealer in the amount of the Exercise Price, and whereby the NASD
Dealer irrevocably commits upon receipt of such Shares to forward the Exercise
Price directly to the Company; or


 


(c)                                  by
any combination of the foregoing.


 


7.                                       WITHHOLDING
TAXES.


 


7.1                                 Withholding Generally.  Whenever Shares are to be issued in
satisfaction of Awards granted under the Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. 
Whenever, under the Plan, payments in satisfaction of Awards are to be
made in cash, such payment shall be net of an amount sufficient to satisfy
federal, state, and local withholding tax requirements.


 


7.2                                 Stock Withholding.  When, under applicable tax laws, a
Participant incurs tax liability in connection with the exercise of any Award
that is subject to tax withholding and the Participant is obligated to pay the
Company the amount required to be withheld, the Committee may allow the
Participant to satisfy the minimum withholding tax obligation by electing to
have the Company withhold from the Shares to be issued that number of Shares
having a Fair Market Value equal to the minimum amount required to be withheld,
determined on the date that the amount of tax to be withheld is to be
determined (the “Tax Date”). 
All elections by a Participant to have Shares withheld for this purpose
shall be made in writing in a form acceptable to the Committee and shall be
subject to the following restrictions:


 


(a)                                  the
election must be made on or prior to the applicable Tax Date;


 


(b)                                 once
made, then except as provided below, the election shall be irrevocable as to
the particular Shares as to which the election is made;


 


(c)                                  all
elections shall be subject to the consent or disapproval of the Committee.


 


8.                                       PRIVILEGES
OF STOCK OWNERSHIP.


 


8.1                                 Voting and Dividends.  No Participant shall have any of the rights
of a shareholder with respect to any Shares until the Shares are issued to the
Participant.  After Shares are issued to
the Participant, the Participant shall be a shareholder and have all the rights
of a shareholder with respect to such Shares, including the right to vote and
receive all dividends or other distributions made or paid with respect to such
Shares.


 


8.2                                 Financial Statements.  The Company shall provide financial
statements to each Participant prior to such Participant’s subscription for
Shares under the Plan, and to each Participant annually during the period such
Participant has Awards outstanding; provided, however, the
Company shall not be required to provide such financial statements to
Participants whose services in connection with the Company assure them access
to equivalent information.


 


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9.                                       TRANSFERABILITY.  Subject to Section 4.1(j), Awards
granted under the Plan, and any interest therein, shall not: (a) be
transferable or assignable by the Participant, (b) be made subject to
execution, attachment or similar process, otherwise than by will or by the laws
of descent and distribution or as consistent with the specific Plan and Stock
Option Agreement provisions relating thereto or (c) during the lifetime of the
Participant, be exercisable by anyone other than the Participant, and any
elections with respect to an Award, may be made only by the Participant.


 


10.                                 CERTIFICATES.  All certificates for Shares or other
securities delivered under the Plan shall be subject to such stock transfer
orders, legends and other restrictions as the Committee may deem necessary or
advisable, including restrictions under any applicable federal, state or
foreign securities law, or any rules, regulations and other requirements of the
SEC or any stock exchange or automated quotation system upon which the Shares
may be listed.


 


11.                                 SECURITIES
LAW AND OTHER REGULATORY COMPLIANCE.  An
Award shall not be effective unless such Award is in compliance with all
applicable federal and state securities laws, rules and regulations of any
governmental body, and the requirements of any stock exchange or automated
quotation system upon which the Shares may then be listed, as they are in effect
on the date of grant of the Award and also on the date of exercise or other
issue.  Notwithstanding any other
provision in the Plan, the Company shall have no obligation to issue or deliver
certificates for Shares under the Plan prior to (a) obtaining any approvals
from governmental agencies that the Company determines are necessary or
advisable, and/or (b) completion of any registration or other
qualification of such shares under any state or federal law or ruling of any
governmental body that the Company determines to be necessary or
advisable.  The Company shall be under
no obligation to register the Shares with the SEC or to effect compliance with
the registration, qualification or listing requirements of any state securities
laws, stock exchange or automated quotation system, and the Company shall have
no liability for any inability or failure to do so.


 


12.                                 EMPLOYMENT
WITH COMPANY.


 


12.1                           No
Obligation to Employ.  Nothing in
the Plan or any Award granted under the Plan shall 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 Parent, Subsidiary or
Affiliate of the Company or limit in any way the right of the Company or any
Parent, Subsidiary or Affiliate of the Company to terminate Participant’s
employment or other relationship at any time, with or without cause.


 


12.2                           No
Right to Compensation.  In the event
that any person holding an Award under the Plan ceases to be employed by, or
otherwise has ceased to provide services to, the Company or a Parent,
Subsidiary or Affiliate for whatever reason, he shall have no right to any
compensation in respect of this loss of right to receive Shares under this
Plan.


 


13.                                 EXCHANGE
AND BUYOUT OF AWARDS.  The Committee may,
at any time or from time to time, authorize the Company, with the consent of
the respective Participants, to issue new Awards in exchange for the surrender
and cancellation of any or all outstanding Awards.  The Committee may at any time buy from a Participant an Award


 


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previously granted with
payment in cash, Shares or other consideration, based on such terms and
conditions as the Committee and the Participant shall agree.


 


14.                                 CORPORATE
TRANSACTIONS.


 


14.1                           Assumption
or Replacement of Awards by Successor. In the event of (a) a sale of the
entire share capital of the Company to another corporation (whether for
consideration in cash or in the form of securities of any kind), (b) a
dissolution or liquidation of the Company, (c) the sale of substantially all of
the assets of the Company, or (d) any other transaction which qualifies as a
“corporate transaction” under Section 424(a) of the Code wherein the
shareholders of the Company give up all of their equity interest in the Company
(“Corporate Transaction”), any or all outstanding Awards may be assumed
or replaced by the purchasing or successor corporation, which assumption or
replacement shall be binding on all Participants.  In the alternative, the purchasing or successor corporation may
substitute equivalent Awards or provide substantially similar consideration to
Participants as was provided to shareholders (after taking into account the
existing provisions of the Awards).  The
purchasing or successor corporation may also issue, in place of outstanding
Shares of the Company held by the Participant, substantially similar shares or
other property subject to repurchase restrictions no less favorable to the
Participant.


 


14.2                           Expiration of Awards.  In the event such purchasing or successor
corporation, if any, refuses to assume or substitute the Awards, as provided
above, pursuant to a transaction described in Subsection 14.1(a) above,
such Awards shall expire on such transaction at such time and on such conditions
as the Board shall determine.  In the
event such purchasing or successor corporation, if any, refuses to assume or
substitute the Awards as provided above, pursuant to a corporate transaction
described in Subsections 14.1(b), (c) or (d) above, or there is no purchasing
or successor corporation, and if the Company ceases to exist as a separate
corporate entity, then, notwithstanding any contrary terms in the Stock Option
Agreement, the Awards shall expire on a date at least twenty (20) days after
the Board gives written notice to Participants specifying the terms and
conditions of such termination.


 


14.3                           Other Treatment of Awards.  Subject to any greater rights granted to
Participants under the foregoing provisions of this Section 14, in the
event of the occurrence of any Corporate Transaction described in
Section 14.1, any outstanding Awards shall be treated as provided in the
applicable agreement or plan of such Corporate Transaction.


 


14.4                           Assumption of Awards by the Company.  The Company, from time to time, also may
substitute or assume outstanding awards granted by another company, whether in
connection with an acquisition of such other company or otherwise, by either
(a) granting an Award under the Plan in substitution of such other company’s
award, or (b) assuming such award as if it had been granted under the Plan if
the terms of such assumed award could be applied to an Award granted under the
Plan.  Such substitution or assumption
shall be permissible if the holder of the substituted or assumed award would
have been eligible to be granted an Award under the Plan if the other company
had applied the rules of the Plan to such grant.  In the event the Company


 


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assumes an award granted
by another company, the terms and conditions of such award shall remain
unchanged (except that the exercise price and the number and nature of
Shares issuable upon exercise of any such option will be adjusted appropriately
pursuant to Section 424(a) of the Code). 
In the event the Company elects to grant a new Award rather than
assuming an existing option, notwithstanding Section 5.4(a), such new
Award may be granted with a similarly adjusted Exercise Price.


 


15.                                 ADOPTION
AND SHAREHOLDER APPROVAL.  The Plan
shall become effective at such date and time as the Registration Statement
filed with the SEC relating to the Company’s securities is declared effective
(and then only provided that the initial public offering later closes) (the “Effective Date”).  The Plan shall be approved by the
shareholders of the Company (excluding Shares issued pursuant to this Plan),
consistent with applicable laws, within twelve months before or after the date
the Plan is adopted by the Board.  Upon
the Effective Date, the Board may grant Awards pursuant to the Plan; provided,
however, that: (a) no Award may be exercised prior to initial
shareholder approval of the Plan and (b) no Award granted pursuant to an
increase in the number of Shares approved by the Board shall be exercised prior
to the time such increase has been approved by the shareholders of the Company.


 


16.                                 TERM
OF PLAN.  The Plan will terminate ten
(10) years from the date the Plan (as amended and restated) is adopted by the
Board or, if earlier, the date of shareholder approval of the amended and
restated Plan.


 


17.                                 AMENDMENT
OR TERMINATION OF PLAN.  The Board may
at any time terminate or amend the Plan in any respect, including without
limitation amendment of any form of Stock Option Agreement or instrument to be
executed pursuant to the Plan; provided, however, that the Board
shall not, without the approval of the shareholders of the Company, amend the
Plan in any manner that requires such shareholder approval pursuant to
applicable corporate law or the Code or the regulations promulgated thereunder
as such provisions apply to ISO plans; provided, further, that no
amendment may be made to outstanding Awards without the consent of the
Participant.


 


18.                                 NONEXCLUSIVITY
OF THE PLAN.  Neither the adoption of
the Plan by the Board, the submission of the Plan to the shareholders of the
Company for approval, nor any provision of the Plan shall be construed as
creating any limitations on the power of the Board to adopt such additional
compensation arrangements as it may deem desirable, including, without
limitation, the granting of stock options otherwise than under the Plan, and
such arrangements may be either generally applicable or applicable only in
specific cases.


 


19.                                 GOVERNING
LAW.  The Plan and all agreements,
documents and instruments entered into pursuant to the Plan shall be governed
by and construed in accordance with the internal laws of the State of
California, excluding that body of law pertaining to conflict of laws.


 


20.                                 DEFINITIONS.  As used in the Plan, the following terms shall
have the following meanings:


 


“Affiliate” means
any corporation that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with
the Company


 


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where “control”
(including the terms “controlled by” and “under common control with”) means the
possession, direct or indirect, of the power to cause the direction of the
management and policies of the corporation, whether through the ownership of
voting securities, by contract or otherwise.


 


“Award” means an
award of an option to subscribe for Shares.


 


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


 


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


 


“Committee” means
the committee appointed by the Board to administer the Plan, or if no committee
is appointed, the Board.


 


“Company” means
Insignia Solutions plc, a corporation organized under the laws of England, or
any successor corporation.


 


“Conversion Rate”
means the average currency conversion rate quoted by the Bank of America in
London as the price for Pounds Sterling purchased with U.S. Dollars.


 


“Disability” means
a disability, whether temporary or permanent, partial or total, within the
meaning of Section 22(e)(3) of the Code, as determined by the Committee.


 


“Exercise Price”
means the price per share at which a holder of an Award may subscribe for the
Shares issuable upon exercise of the Award.


 


“Fair Market Value”
means the value of a share of the Company’s Ordinary Shares of 20p each
determined as follows:


 


(a)                                  if
such Ordinary Shares, or instruments evidencing such Ordinary Shares (e.g.,
American Depository Shares or American Depository Receipts), are then quoted on
the Nasdaq National Market the closing price on the Nasdaq National Market
System on the trading day immediately preceding the date on which Fair Market
Value is determined, or, if no such reported sale takes place on such date, the
closing price on the next preceding trading date on which a reported sale
occurred;


 


(b)                                 if
such Ordinary Shares, or instruments evidencing such Ordinary Shares (e.g.,
American Depository Shares or American Depository Receipts), are publicly
traded and are then listed on a national securities exchange, the closing price
or, if no reported sale takes place on such date, the closing price on the next
preceding trading day on which a reported sale occurred;


 


(c)                                  if
such Ordinary Shares, or instruments evidencing such Ordinary Shares (e.g.,
American Depository Shares or American Depository Receipts), are publicly
traded but are not quoted on the Nasdaq National Market nor listed or admitted
to trading on a national securities exchange, the average of the


 


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closing bid and asked
prices on such date, as reported by The Wall Street Journal, for the
over-the-counter market; or


 


(d)                                 if
none of the foregoing is applicable, by the Board in good faith.


 


“Insider” means an
officer or director of the Company or any other person whose transactions in
the Company’s ordinary shares are subject to Section 16 of the Securities
Exchange Act of 1934, as amended.


 


“Outside Director”
means any outside director as defined in Section 162(m) of the Code and
the regulations issued thereunder.


 


“Parent” means any
corporation (other than the Company) in an unbroken chain of corporations
ending with the Company, if at the time of the granting of an Award under the
Plan, each of such corporations other than the Company owns stock possessing
50% or more of the total combined voting power of all classes of stock in one
of the other corporations in such chain.


 


“Participant”
means a person who receives an Award under the Plan.


 


“Plan” means this
Insignia Solutions plc 1995 Incentive Stock Option Plan for U.S. Employees, as
amended from time-to-time.


 


“SEC” means the
Securities and Exchange Commission.


 


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


 


“Shares” means
Ordinary Shares of 20p each in the Company, reserved for issue under the Option
Plans, as adjusted pursuant to Sections 2 and 14 of the Plan, any instruments
evidencing such Ordinary Shares (e.g., American Depository Shares or American
Depository Receipts) and any successor security.


 


“Stock
Option Agreement” means, with respect to each Award, the signed written
agreement between the Company and the Participant setting forth the terms and
conditions of the Award.


 


“Subsidiary” means
any corporation (other than the Company) in an unbroken chain of corporations
beginning with the Company if, at the time of granting of the Award, each of
the corporations other than the last corporation in the unbroken chain owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.


 


“Termination” or “Terminated”
means, for purposes of the Plan with respect to a Participant, that the
Participant has ceased to provide services as an employee, director,
consultant, independent contractor or advisor, to the Company or a Parent,
Subsidiary or Affiliate of the Company, except in the case of sick leave,
military leave, or any other leave of absence approved by the Committee; provided,
that such leave is for a period of not more than ninety (90) days, or
reinstatement upon the expiration of such leave is guaranteed by contract or
statute.  The


 


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Committee shall have sole
discretion to determine whether a Participant has ceased to provide services
and the effective date on which the Participant ceased to provide services (the
“Termination Date”).


 


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