Document:

Exhibit 10.2

 

INTRUSION INC.

 

NOTICE OF GRANT OF STOCK OPTION

 

Notice is hereby given of the following option grant (the “Option”) to
purchase shares of the Common Stock of Intrusion Inc. (the “Corporation”):

 

	
  OPTIONEE:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  GRANT
  NUMBER:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  GRANT DATE:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXERCISE
  PRICE:

  	
   

  	
  $

  	
   

  	
   per share

  
	
   

  	
   

  	
   

  	
   

  
	
  NUMBER OF
  OPTION SHARES:

  	
   

  	
   

  	
   shares

  
	
   

  	
   

  	
   

  	
   

  
	
  EXPIRATION
  DATE:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TYPE OF
  OPTION:

  	
   

  	
   

  	
   Incentive Stock Option

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   Non-Statutory Stock Option

  
	
   

  	
   

  	
   

  	
   

  
	
  VESTING
  SCHEDULE:

  	
   

  	
   

  
						

 

Optionee understands and agrees that the Option is granted subject to
and in accordance with the terms of the Intrusion Inc. 2005 Stock Incentive
Plan (the “Plan”).  Optionee further
agrees to be bound by the terms of the Plan and the terms of the Option as set
forth in the Stock Option Agreement attached hereto as EXHIBIT A.  Optionee hereby acknowledges the receipt of a
copy of the official prospectus for the Plan in the form attached hereto as EXHIBIT B.  A copy of the Plan is available upon request
made to the Corporate Secretary at the Corporation’s principal offices.

 

REPURCHASE RIGHTS.  Optionee
hereby agrees that the shares acquired upon the exercise of the Option may be
subject to certain repurchase rights set forth in the Stock Option Agreement.

 

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

 

 

DEFINITIONS.  All capitalized terms in this Notice shall
have the meaning assigned to them in this Notice or in the attached Stock
Option Agreement.

 

	
  DATED:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INTRUSION
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OPTIONEE

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature:

  	
   

  
	
   

  	
  Printed
  Name:

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
												

 

ATTACHMENTS

EXHIBIT A - STOCK OPTION AGREEMENT

EXHIBIT B - PLAN SUMMARY AND PROSPECTUSExhibit 10.3

 

INTRUSION INC.

 

STOCK OPTION AGREEMENT

 

RECITALS

 

A.                                   The
Board has adopted the Plan for the purpose of retaining the services of
selected Employees, non-employee members of the Board (or the board of
directors of any Parent or Subsidiary) and consultants and other independent
advisors who provide services to the Corporation (or any Parent or Subsidiary).

 

B.                                     Optionee
is to render valuable services to the Corporation (or a Parent or Subsidiary),
and this Agreement is executed pursuant to, and is intended to carry out the
purposes of, the Plan in connection with the Corporation’s grant of an option
to Optionee.

 

C.                                     All
capitalized terms in this Agreement shall have the meaning assigned to them in
the attached Appendix.

 

NOW, THEREFORE, it is hereby agreed as follows:

 

1.                                       GRANT OF OPTION. 
The Corporation hereby grants to Optionee, as of the Grant Date, an
option to purchase up to the number of Option Shares specified in the Grant
Notice.  The Option Shares shall be
purchasable from time to time during the option term specified in Paragraph 2
at the Exercise Price.

 

2.                                       OPTION TERM. 
This option shall have a maximum term of ten (10) years measured
from the Grant Date and shall accordingly expire at the close of business on
the Expiration Date, unless sooner terminated in accordance with Paragraph 5 or
6.

 

3.                                       LIMITED TRANSFERABILITY.

 

(a)                                  This
option shall be neither transferable nor assignable by Optionee other than by
will or the laws of inheritance following Optionee’s death and may be
exercised, during Optionee’s lifetime, only by Optionee.  However, Optionee may designate one or more
persons as the beneficiary or beneficiaries of this option,
and this option shall, in accordance with such designation, automatically be
transferred to such beneficiary or beneficiaries upon the Optionee’s death
while holding this option.  Such
beneficiary or beneficiaries shall take the transferred option subject to all
the terms and conditions of this Agreement, including (without limitation) the
limited time period during which this option may, pursuant to Paragraph 5, be
exercised following Optionee’s death.

 

(b)                                 If
this option is designated a Non-Statutory Option in the Grant Notice, then this
option may be assigned in whole or in part during Optionee’s lifetime to one or
more members of Optionee’s family or to a trust established for the exclusive
benefit of one or more such family members or to Optionee’s former spouse, to
the extent such

 

 

assignment is in connection with the
Optionee’s estate plan or pursuant to a domestic relations order.  The assigned portion shall be exercisable
only by the person or persons who acquire a proprietary interest in the option
pursuant to such assignment.  The terms
applicable to the assigned portion shall be the same as those in effect for
this option immediately prior to such assignment.

 

4.                                       DATES OF EXERCISE. 
This option shall become exercisable for the Option Shares in one or
more installments as specified in the Grant Notice.  As the option becomes exercisable for such
installments, those installments shall accumulate, and the option shall remain
exercisable for the accumulated installments until the Expiration Date or
sooner termination of the option term under Paragraph 5 or 6.

 

5.                                       CESSATION OF SERVICE.  The option term specified in Paragraph 2
shall terminate (and this option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:

 

(a)                                  Should
Optionee cease to remain in Service for any reason (other than death or
Permanent Disability) while this option is outstanding, then Optionee (or any
person or persons to whom this option is transferred pursuant to a permitted
transfer under Paragraph 3) shall have a period of three (3) months
(commencing with the date of such cessation of Service) during which to
exercise this option, but in no event shall this option be exercisable at any
time after the Expiration Date.

 

(b)                                 Should
Optionee die while this option is outstanding, then the personal representative
of Optionee’s estate or the person or persons to whom the option is transferred
pursuant to Optionee’s will or the laws of inheritance following Optionee’s
death or to whom the option is transferred during Optionee’s lifetime pursuant
to a permitted transfer under Paragraph 3 shall have the right to exercise this
option.  However, if Optionee dies while
holding this option and has an effective beneficiary designation in effect for
this option at the time of his or her death, then the designated beneficiary or
beneficiaries shall have the exclusive right to exercise this option following
Optionee’s death.  Any such right to
exercise this option shall lapse, and this option shall cease to be
outstanding, upon the earlier of (i) the
expiration of the twelve (12)-month period measured from the date of Optionee’s
death or (ii) the Expiration Date.

 

(c)                                  Should
Optionee cease Service by reason of Permanent Disability while this option is
outstanding, then Optionee (or any person or persons to whom this option is
transferred pursuant to a permitted transfer under Paragraph 3) shall have a
period of twelve (12) months (commencing with the date of such cessation of
Service) during which to exercise this option. 
In no event shall this option be exercisable at any time after the Expiration
Date.

 

(d)                                 During
the limited period of post-Service exercisability, this option may not be
exercised in the aggregate for more than the number of Option Shares for which
the option is exercisable at the time of Optionee’s cessation of Service.  Upon the expiration of such limited exercise
period or (if earlier) upon the Expiration Date, this

 

2

 

option shall terminate and cease to be
outstanding for any exercisable Option Shares for which the option has not been
exercised.  However, this option shall,
immediately upon Optionee’s cessation of Service for any reason, terminate and
cease to be outstanding with respect to any Option Shares for which this option
is not otherwise at that time exercisable.

 

6.                                       SPECIAL ACCELERATION OF OPTION.

 

(a)                                  This
option, to the extent outstanding at the time of a Change in Control but not
otherwise fully exercisable, shall automatically accelerate so that this option
shall, immediately prior to the effective date of such Change in Control,
become exercisable for all of the Option Shares at the time subject to this
option and may be exercised for any or all of those Option Shares as fully
vested shares of Common Stock.  However,
this option shall not become exercisable on such an accelerated basis, if and
to the extent:  (i) this option is
to be assumed by the successor corporation (or parent thereof) or is otherwise
to be continued in full force and effect pursuant to the terms of the Change in
Control transaction or (ii) this option is to be replaced with a cash
incentive program of the successor corporation which preserves the spread
existing at the time of the Change in Control on any Option Shares for which
this option is not otherwise at that time exercisable (the excess of the Fair
Market Value of those Option Shares over the aggregate Exercise Price payable
for such shares) and provides for subsequent payout of that spread in
accordance with the same option exercise/vesting schedule for those Option
Shares set forth in the Grant Notice.

 

(b)                                 Immediately
following the Change in Control, this option shall terminate and cease to be
outstanding, except to the extent assumed by the successor
corporation (or parent thereof) or otherwise continued in effect
pursuant to the terms of the Change in Control transaction.

 

(c)                                  If
this option is assumed in connection with a Change in Control or otherwise
continued in effect, then this option shall be appropriately adjusted,
immediately after such Change in Control, to apply to the number and class of
securities which would have been issuable to Optionee in consummation of such
Change in Control had the option been exercised immediately prior to such
Change in Control, and appropriate adjustments shall also be made to the
Exercise Price, provided the
aggregate Exercise Price shall remain the same. 
To the extent the actual holders of the Corporation’s outstanding Common
Stock receive cash consideration for their Common Stock in consummation of the
Change in Control, the successor corporation may, in connection with the
assumption of this option, substitute one or more shares of its own common
stock with a fair market value equivalent to the cash consideration paid per
share of Common Stock in such Change in Control.

 

(d)                                 This
Agreement shall not in any way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.

 

3

 

7.                                       ADJUSTMENT IN OPTION SHARES.  Should any change be made to the Common Stock
by reason of any stock split, stock dividend, recapitalization, combination of
shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without the Corporation’s receipt of consideration,
appropriate adjustments shall be made to (i) the total number and/or class
of securities subject to this option and (ii) the Exercise Price in order
to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.

 

8.                                       STOCKHOLDER RIGHTS.  The holder of this option shall not have any
stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of
record of the purchased shares.

 

9.                                       MANNER OF EXERCISING OPTION.

 

(a)                                  In
order to exercise this option with respect to all or any part of the Option
Shares for which this option is at the time exercisable, Optionee (or any other
person or persons exercising the option) must take the following actions:

 

(i)                                     Execute
and deliver to the Corporation a Notice of Exercise (see attached form) for the
Option Shares for which the option is exercised.

 

(ii)                                  Pay
the aggregate Exercise Price for the purchased shares in one or more of the
following forms:

 

(A)                              cash
or check made payable to the Corporation (includes cash paid from Optionee’s
brokerage pursuant to a presale of shares in a so-called “cashless” exercise);

 

(B)                                a promissory note payable to the Corporation, but only to
the extent authorized by the Plan Administrator in accordance with Paragraph
13;

 

(C)                                shares
of Common Stock held by Optionee (or any other person or persons exercising the
option) for the requisite period necessary to avoid a charge to the Corporation’s
earnings for financial reporting purposes and valued at Fair Market Value on
the Exercise Date; or

 

(D)                               through
a special sale and remittance procedure pursuant to which Optionee (or any
other person or persons exercising the option) shall concurrently provide
irrevocable instructions (i) to a brokerage firm to effect the immediate
sale of the purchased shares and remit to the Corporation, out of the sale
proceeds available on the settlement date, sufficient funds to cover the
aggregate Exercise Price payable for the purchased shares plus all applicable
income and employment taxes required to be withheld by the Corporation by
reason of such exercise and (ii) to the Corporation to deliver the
certificates for the 

 

4

 

purchased shares directly to such brokerage
firm in order to complete the sale.

 

(E)                                 Except
to the extent the sale and remittance procedure is utilized in connection with
the option exercise, payment of the Exercise Price must accompany the Notice of
Exercise delivered to the Corporation in connection with the option exercise.

 

Payment forms (B), (C) and (D) above shall be accepted solely
at the option of the Plan Administrator.

 

(iii)                               Furnish
to the Corporation appropriate documentation that the person or persons
exercising the option (if other than Optionee) have the right to exercise this
option.

 

(iv)                              Make
appropriate arrangements with the Corporation (or Parent or Subsidiary
employing or retaining Optionee) for the satisfaction of all applicable income
and employment tax withholding requirements applicable to the option exercise.

 

(b)                                 As
soon as practical after the Exercise Date, the Corporation shall issue to or on
behalf of Optionee (or any other person or persons exercising this option) a
certificate for the purchased Option Shares, with the appropriate legends
affixed thereto.

 

(c)                                  In
no event may this option be exercised for any fractional shares.

 

10.                                 COMPLIANCE WITH LAWS AND REGULATIONS.

 

(a)                                  The
exercise of this option and the issuance of the Option Shares upon such
exercise shall be subject to compliance by the Corporation and Optionee with
all applicable requirements of law relating thereto and with all applicable
regulations of any stock exchange or quotation system on which the Common Stock
may be listed for trading at the time of such exercise and issuance.

 

(b)                                 The
inability of the Corporation to obtain approval from any regulatory body having
authority deemed by the Corporation to be necessary to the lawful issuance and
sale of any Common Stock pursuant to this option shall relieve the Corporation
of any liability with respect to the non-issuance or sale of the Common Stock
as to which such approval shall not have been obtained.  The Corporation, however, shall use its best
efforts to obtain all such approvals.

 

11.                                 SUCCESSORS AND ASSIGNS.  Except to the extent otherwise provided in
Paragraphs 3 and 6, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the Corporation and its successors and assigns and
Optionee, Optionee’s assigns, the legal representatives, heirs and legatees of
Optionee’s estate and any beneficiaries of this option designated by Optionee.

 

5

 

12.                                 NOTICES. 
Any notice required to be given or delivered to the Corporation under
the terms of this Agreement shall be in writing and addressed to the
Corporation at its principal corporate offices. 
Any notice required to be given or delivered to Optionee shall be in
writing and addressed to Optionee at the address indicated below Optionee’s
signature line on the Grant Notice.  All
notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.

 

13.                                 FINANCING. 
To the extent permitted by law, the Plan Administrator may, in its
absolute discretion and without any obligation to do so, permit Optionee to pay
the Exercise Price for the purchased Option Shares (to the extent such Exercise
Price is in excess of the par value of those shares) by delivering a
full-recourse promissory note payable to the Corporation and bearing a market
rate of interest, compounded semi-annually, as determined by the Plan Administrator.  The remaining terms of any such promissory
note (including the requirements for collateral and the terms of repayment)
shall be established by the Plan Administrator in its sole discretion.

 

14.                                 CONSTRUCTION. 
This Agreement and the option evidenced hereby are made and granted
pursuant to the Plan and are in all respects limited by and subject to the
terms of the Plan.  All decisions of the
Plan Administrator with respect to any question or issue arising under the Plan
or this Agreement shall be conclusive and binding on all persons having an
interest in this option.

 

15.                                 GOVERNING LAW. 
The interpretation, performance and enforcement of this Agreement shall
be governed by the laws of the State of Texas without resort to that State’s
conflict-of-laws rules.

 

16.                                 EXCESS SHARES. 
If the Option Shares covered by this Agreement exceed, as of the Grant
Date, the number of shares of Common Stock which may without stockholder
approval be issued under the Plan, then this option shall be void with respect
to those excess shares, unless stockholder approval of an amendment
sufficiently increasing the number of shares of Common Stock issuable under the
Plan is obtained in accordance with the provisions of the Plan.

 

17.                                 ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE
OPTION.  In the event this option is
designated an Incentive Option in the Grant Notice, the following terms and
conditions shall also apply to the grant:

 

(a)                                  This
option shall cease to qualify for favorable tax treatment as an Incentive
Option if (and to the extent) this option is exercised for one or more Option
Shares:  (A) more than three (3) months
after the date Optionee ceases to be an Employee for any reason other than
death or Permanent Disability or (B) more than twelve (12) months after
the date Optionee ceases to be an Employee by reason of Permanent Disability.

 

(b)                                 No
installment under this option shall qualify for favorable tax treatment as an
Incentive Option if (and to the extent) the aggregate Fair Market Value
(determined

 

6

 

at the Grant
Date) of the Common Stock for which such installment first becomes exercisable
hereunder would, when added to the aggregate value (determined as of the
respective date or dates of grant) of the Common Stock or other securities for
which this option or any other Incentive Options granted to Optionee prior to
the Grant Date (whether under the Plan or any other option plan of the
Corporation or any Parent or Subsidiary) first become exercisable during the
same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the
aggregate.  Should such One Hundred
Thousand Dollar ($100,000) limitation be exceeded in any calendar year, this
option shall nevertheless become exercisable for the excess shares in such
calendar year as a Non-Statutory Option.

 

(c)                                  Should
the exercisability of this option be accelerated upon a Change in Control, then
this option shall qualify for favorable tax treatment as an Incentive Option
only to the extent the aggregate Fair Market Value (determined at the Grant
Date) of the Common Stock for which this option first becomes exercisable in
the calendar year in which the Change in Control transaction occurs does not,
when added to the aggregate value (determined as of the respective date or
dates of grant) of the Common Stock or other securities for which this option
or one or more other Incentive Options granted to Optionee prior to the Grant
Date (whether under the Plan or any other option plan of the Corporation or any
Parent or Subsidiary) first become exercisable during the same calendar year,
exceed One Hundred Thousand Dollars ($100,000) in the aggregate.  Should the applicable One Hundred Thousand
Dollar ($100,000) limitation be exceeded in the calendar year of such Change in
Control, the option may nevertheless be exercised for the excess shares in such
calendar year as a Non-Statutory Option.

 

(d)                                 Should
Optionee hold, in addition to this option, one or more other options to
purchase Common Stock which become exercisable for the first time in the same
calendar year as this option, then the foregoing limitations on the
exercisability of such options as Incentive Options shall be applied on the
basis of the order in which such options are granted.

 

7

 

EXHIBIT I

 

NOTICE OF EXERCISE

 

I hereby notify Intrusion Inc. (the “Corporation”) that I elect to
purchase                      
shares of the Corporation’s Common Stock (the “Purchased Shares”) at the option
exercise price of $
                     
 per share (the “Exercise Price”)
pursuant to that certain option (the “Option”) granted to me under the
Corporation’s 2005 Stock Incentive Plan on                      
,              
..

 

Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise.  Alternatively, I may
utilize the special broker-dealer sale and remittance procedure specified in my
agreement to effect payment of the Exercise Price.

 

	
   

  	
  ,

  	
   

  	
   

  	
   

  
	
  Date

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Optionee:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Print name
  in exact manner it is to 

  appear on the stock certificate:

  	
   

  
	
   

  	
   

  
	
  Address to
  which certificate is to 

  be sent, if different from address above:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Social
  Security Number:

  	
   

  

 

 

APPENDIX

 

The following definitions shall be in effect under the Agreement:

 

A.                                   “Agreement” shall mean
this Stock Option Agreement.

 

B.                                     “Board” shall mean the
Corporation’s Board of Directors.

 

C.                                     “Change in Control”
shall mean a change in ownership or control of the Corporation effected through any of the following transactions:

 

(i)                                     a merger,
consolidation or other reorganization approved by the Corporation’s
stockholders, unless securities
representing more than 50% of the total combined voting power of the voting
securities of the successor corporation are immediately thereafter beneficially
owned, directly or indirectly, by the persons who beneficially owned the
Corporation’s outstanding voting securities immediately prior to such
transaction;

 

(ii)                                  the sale, transfer
or other disposition of all or substantially all of the Corporation’s assets;
or

 

(iii)                               the
acquisition, directly or indirectly by any person or related group of persons
(other than the Corporation or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Corporation), of beneficial
ownership (within the meaning of Rule 13d-3 of the Exchange Act) of
securities possessing more than 50% of the total combined voting power of the
Corporation’s outstanding securities pursuant to a tender or exchange offer
made directly to the Corporation’s stockholders.

 

D.                                    “Code” shall mean the
Internal Revenue Code of 1986, as amended.

 

E.                                      “Common Stock” shall
mean shares of the Corporation’s common stock, par value $0.01 per share.

 

F.                                      “Corporation” shall
mean Intrusion Inc., a Delaware corporation, and any
corporate successor to all or substantially all of the assets or voting stock
of Intrusion Inc. which has by appropriate action assumed the Plan.

 

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

 

H.                                    “Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended.

 

I.                                         “Exercise Date” shall
mean the date on which the option shall have been exercised in accordance with
Paragraph 9 of the Agreement.

 

 

J.                                        “Exercise Price” shall
mean the exercise price per Option Share as specified in the Grant Notice.

 

K.                                    “Expiration Date”
shall mean 5:00 p.m. Central Time on the date on which the option expires
as specified in the Grant Notice.

 

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

 

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

 

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

 

(iii)                               If the
Common Stock is at the time neither listed on any stock exchange or the Nasdaq
Stock Market, then the Fair Market Value shall be determined by the Plan
Administrator after taking into account such factors as the Plan Administrator
shall deem appropriate.

 

M.                                 “Grant Date” shall
mean the date of grant of the option as specified in the Grant Notice.

 

N.                                    “Grant Notice” shall
mean the Notice of Grant of Stock Option accompanying the Agreement, pursuant
to which Optionee has been informed of the basic terms of the option evidenced
hereby.

 

O.                                    “Incentive Option”
shall mean an option that satisfies the requirements of Code Section 422.

 

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

 

Q.                                    “Notice of Exercise”
shall mean the notice of exercise in the form attached hereto as Exhibit I.

 

 

R.                                     “Option Shares” shall
mean the number of shares of Common Stock subject to the option as specified in
the Grant Notice.

 

S.                                      “Optionee” shall mean
the person to whom the option is granted as specified in the Grant Notice.

 

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

 

U.                                    “Permanent Disability”
shall mean the inability of Optionee to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which is expected to result in death or has lasted or can be expected to last
for a continuous period of twelve (12) months or more.

 

V.                                     “Plan” shall mean the
Corporation’s 2005 Stock Incentive Plan.

 

W.                                “Plan Administrator”
shall mean either the Board or a committee of the Board acting in its capacity
as administrator of the Plan.

 

X.                                    “Service” shall mean
the Optionee’s performance of services for the Corporation (or any Parent or
Subsidiary) in the capacity of an Employee, a non-Employee member of the Board
or an independent contractor.  Service
shall not be deemed to cease during a period of military leave, sick leave or
other personal leave approved by the Corporation; provided, however, that for a
leave which exceeds ninety (90) days, Service shall be deemed to cease, if the
Option is designated an Incentive Stock Option in the Grant Notice, on the
ninety-first (91st) day of such leave, unless the Optionee’s right to return to
Service following such leave is guaranteed by law or statute.  Except to the extent otherwise required by
law, no Service credit shall be given for vesting purposes hereunder for any
period the Optionee is on a leave of absence.

 

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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}]]