Document:

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Exhibit 4.5

DIGITAL MICROWAVE CORPORATION

1996 NON-OFFICER EMPLOYEE STOCK OPTION PLAN

ARTICLE ONE

GENERAL

	I.	 	PURPOSE OF THE PLAN

     A. This 1996 Non-Officer Employee Stock Option Plan (the “Plan”) is intended to promote the
interests of Digital Microwave Corporation, a Delaware corporation (the “Corporation”), by
providing key employees (excluding officers) of the Corporation (or its Parent or Subsidiary
corporations) who are responsible for the management, growth and financial success of the
Corporation with the opportunity to acquire a proprietary interest, or otherwise increase their
proprietary interest, in the Corporation as an incentive for them to remain in the service of the
Corporation (or its subsidiary corporations).

     B. The Effective Date of the Plan is April 18, 1996.

     C. Capitalized terms shall, except as otherwise specifically defined within the provisions of
the Plan, have the meanings assigned to such terms in the Glossary.

	II.	 	ADMINISTRATION OF THE PLAN

     A. The Committee shall have sole and exclusive authority to administer the Discretionary
Option Grant Program. Members of the Committee shall serve for such period as the Corporation’s
Board of Directors (the “Board”) may determine and shall be subject to removal by the Board at any
time.

     B. The Committee as Plan Administrator shall have full power and discretion (subject to the
express provisions of the Plan) to establish such rules and regulations as it may deem appropriate
for the proper administration of the Discretionary Option Grant Program and to make such
determinations under, and issue such interpretations of, the provisions of such program and any
outstanding option grants thereunder as it may deem necessary or advisable. Decisions of the Plan
Administrator shall be final and binding on all parties who have an interest in the program or any
outstanding option thereunder.

     C. Service on the Committee shall constitute service as a Board member, and members of the
Committee shall accordingly be entitled to full indemnification and reimbursement as Board members
for their service on the Committee. No member of the Committee shall be liable for any act or
omission made in good faith with respect to the Plan or any option grants under the Plan.

 

 

	III.	 	ELIGIBILITY

     A. The persons eligible to participate in the Discretionary Option Grant Program are key
employees (other than officers) of the Corporation (or any Parent or Subsidiary) who render
services which contribute to the management, growth and financial success of the Corporation.

     B. Non-employee Board members shall not be eligible to participate in the Discretionary Option
Grant Program.

     C. The Plan Administrator shall have full authority to determine, with respect to grants made
under the Discretionary Option Grant Program, which eligible individuals are to receive such
grants, the number of shares to be covered by each such grant, the time or times at which each
granted option is to become exercisable and the maximum term for which the option may remain
outstanding.

	IV.	 	STOCK SUBJECT TO THE PLAN

     A. Shares of Common Stock shall be available for issuance under the Plan and shall be drawn
from either the Corporation’s authorized but unissued shares of Common Stock or from reacquired
shares of Common Stock, including shares repurchased by the Corporation on the open market. The
number of shares of Common Stock reserved for issuance over the term of the Plan shall initially be
fixed at 500,000 shares.

     B. Should one or more outstanding options under this Plan expire or terminate for any reason
prior to exercise in full, then the shares subject to the portion of each option not so exercised
shall be available for subsequent issuance under the Plan. Shares subject to any stock
appreciation rights exercised under the Plan, whether or not the issued shares are subsequently
repurchased by the Corporation pursuant to its repurchase rights under the Plan, shall reduce on a
share-for-share basis the number of shares of Common Stock available for subsequent issuance under
the Plan. In addition, should the exercise price of an outstanding option under the Plan be paid
with shares of Common Stock or should shares of Common Stock otherwise issuable under the Plan be
withheld by the Corporation in satisfaction of the withholding taxes incurred in connection with
the exercise of an outstanding option under the Plan, then the number of shares of Common Stock
available for issuance under the Plan shall be reduced by the gross number of shares for which the
option is exercised, and not by the net number of shares of Common Stock actually issued to the
holder of such option.

     C. Should any change be made to the Common Stock issuable under the Plan 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, then appropriate adjustments shall be made to (i) the maximum number and/or class of
securities issuable under the Plan and (ii) the number and/or class of securities and price per
share in effect under each option outstanding under the Plan. Such adjustments to the outstanding
options are to be effected in a manner which shall preclude the enlargement or dilution of rights
and benefits under those options. The adjustments determined by the Plan Administrator shall be
final, binding and conclusive.

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ARTICLE TWO

DISCRETIONARY OPTION GRANT PROGRAM

	I.	 	TERMS AND CONDITIONS OF OPTIONS

          Options granted pursuant to the Discretionary Grant Program shall be authorized by action of
the Plan Administrator and shall be Non-Statutory Options. Each granted option shall be evidenced
by one or more instruments in the form approved by the Plan Administrator; provided, however, that
each such instrument shall comply with the terms and conditions specified below.

     A. Exercise Price.

          1. The exercise price per share of Common Stock subject to a Non-Statutory Option shall be
fixed by the Plan Administrator and in no event shall be less than eighty-five percent (85%) of the
Fair Market Value of such Common Stock on the grant date.

          2. The exercise price shall become immediately due upon exercise of the option and shall be
payable in one of the alternative forms specified below:

               (i) full payment in cash or check made payable to the Corporation’s order,

               (ii) full payment in shares of Common Stock held for the requisite period necessary to avoid a
charge to the Corporation’s earnings for financial reporting purposes and valued at Fair Market
Value on the date the option is exercised,

               (iii) full payment in a combination of shares of Common Stock held for the requisite period
necessary to avoid a charge to the Corporation’s earnings for financial reporting purposes and
valued at Fair Market Value on the date the option is exercised and cash or check made payable to
the Corporation’s order, or

               (iv) to the extent the option is exercised for vested shares, full payment through a
broker-dealer sale and remittance procedure pursuant to which the Optionee shall provide concurrent
irrevocable written instructions (I) to a Corporation-designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the Corporation, out of the sales proceeds
available on the settlement date, sufficient funds to cover the aggregate exercise price payable
for the purchased shares plus all applicable Federal, state and local income and employment taxes
required to be withheld by the Corporation in connection with such purchase and (II) to the
Corporation to deliver the certificates for the purchased shares directly to such brokerage firm in
order to complete the sale transaction.

     B. Term and Exercise of Options. Each option shall be exercisable at such time or times,
during such period and for such number of shares as shall be determined by the Plan Administrator
and set forth in the instrument evidencing such option. No option shall, however, have a maximum
term in excess of ten (10) years. During the lifetime of the Optionee, the option, together with
any stock appreciation rights pertaining to such option, shall be exercisable
only by the Optionee and shall not be assignable or transferable except for a transfer of the
option effected by will or by the laws of descent and distribution following the Optionee’s death,
except as the Plan Administrator may otherwise provide.

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     C. Termination of Service.

          1. Except to the extent otherwise expressly authorized by the Plan Administrator, no Optionee
shall have more than a thirty-six (36)-month period measured from the date of such individual’s
cessation of Service in which to exercise his or her outstanding options under the Plan.

          2. Any option exercisable in whole or in part by the Optionee at the time of death may be
subsequently exercised by the personal representative of the Optionee’s estate or by the person or
persons to whom the option is transferred pursuant to the Optionee’s will or in accordance with the
laws of descent and distribution. However, no such option shall remain exercisable for more than
thirty-six (36) months after the date of the Optionee’s death.

          3. Under no circumstances shall any such option be exercisable after the specified expiration
date of the option term.

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

          5. Should the Optionee’s Service be terminated for Misconduct, all outstanding options held by
that individual shall terminate immediately and cease to remain outstanding.

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

     - to permit one or more options to be exercised not only with respect to the
number of vested shares of Common Stock for which each such option is exercisable at
the time of the Optionee’s cessation of Service but also with respect to one or more
subsequent installments of vested shares for which the option would otherwise have
become exercisable had such cessation of Service not occurred,

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

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     D. Stockholder Rights. An Optionee shall have none of the rights of a stockholder with
respect to any option shares until such individual shall have exercised the option and paid the
exercise price for the purchased shares.

     E. Repurchase Rights. The shares of Common Stock acquired under this Discretionary Grant
Program may be subject to repurchase by the Corporation in accordance with the following
provisions:

          1. The Plan Administrator shall have the discretion to grant options which are exercisable for
unvested shares of Common Stock. Should the Optionee cease Service while holding any unvested
shares purchased under such options, then the Corporation shall have the right to repurchase any or
all of those unvested shares at the exercise price paid per share. The terms and conditions upon
which such repurchase right shall be exercisable (including the period and procedure for exercise
and the appropriate vesting schedule for the purchased shares) shall be established by the Plan
Administrator and set forth in the instrument evidencing such repurchase right.

          2. All of the Corporation’s outstanding repurchase rights shall automatically terminate, and
all shares subject to such terminated rights shall immediately vest in full, upon the occurrence of
a Corporate Transaction, except to the extent: (i) any such repurchase right is expressly assigned
to the successor corporation (or parent thereof) in connection with the Corporate Transaction or
(ii) such accelerated vesting is precluded by other limitations imposed by the Plan Administrator
at the time the repurchase right is issued.

          3. The Plan Administrator shall have the discretionary authority, exercisable either before or
after the Optionee’s cessation of Service, to cancel the Corporation’s outstanding repurchase
rights with respect to one or more shares purchased or purchasable by the Optionee under the Plan
and thereby accelerate the vesting of such shares in whole or in part at any time.

	II.	 	CORPORATE TRANSACTIONS/CHANGES IN CONTROL/HOSTILE TAKE-OVER

     A. In the event of any Corporate Transaction, each outstanding option shall automatically
accelerate so that each such option shall, immediately prior to the specified effective date for
such Corporate Transaction, become fully exercisable with respect to the total number of shares of
Common Stock at the time subject to such option and may be exercised for all or any portion of such
shares. However, an outstanding option shall not so accelerate if and to the extent: (i) such
option is, in connection with the Corporate Transaction, either to be assumed by the successor
corporation or parent thereof or to be replaced with a comparable option to purchase shares of the
capital stock of the successor corporation or parent thereof, (ii) such option is to be replaced
with a cash incentive program of the successor corporation which preserves the option spread
existing at the time of the Corporate Transaction and provides for subsequent payout in accordance
with the same vesting schedule applicable to such option or (iii) the acceleration of such option
is subject to other limitations imposed by the Plan Administrator at the time of the option grant.
The determination of option comparability under
clause (i) above shall be made by the Plan Administrator, and its determination shall be
final, binding and conclusive.

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     B. The Plan Administrator shall have the discretionary authority, exercisable either at the
time the option is granted or at any time while the option remains outstanding, to provide for the
automatic acceleration of one or more outstanding options upon the occurrence of a Corporate
Transaction, whether or not those options are to be assumed or replaced in the Corporate
Transaction. Alternatively, the Plan Administrator shall have the authority to provide for the
subsequent acceleration of any outstanding options which do not otherwise accelerate at the time of
the Corporate Transaction, or the subsequent termination of any of the Corporation’s outstanding
repurchase rights which do not otherwise terminate at the time of the Corporate Transaction, should
the Optionee’s Service terminate through an Involuntary Termination effected within a designated
period following the effective date of such Corporate Transaction.

     C. Immediately following the consummation of the Corporate Transaction, all outstanding
options shall terminate, except to the extent assumed by the successor corporation or its parent
company.

     D. Each outstanding option under this Discretionary Grant Program that is assumed in
connection with the Corporate Transaction or is otherwise to continue in effect shall be
appropriately adjusted, immediately after such Corporate Transaction, to apply and pertain to the
number and class of securities which would have been issued to the option holder, in consummation
of such Corporate Transaction, had such person exercised the option immediately prior to such
Corporate Transaction. Appropriate adjustments shall also be made to the exercise price payable
per share, provided the aggregate exercise price payable for such securities shall remain the same.
In addition, the class and number of securities available for issuance under the Plan on both an
aggregate and per individual basis following the consummation of the Corporate Transaction shall be
appropriately adjusted.

     E. The Plan Administrator shall have the discretionary authority, exercisable either at the
time the option is granted or at any time while the option remains outstanding, to provide for the
automatic acceleration of one or more outstanding options (and the termination of one or more of
the Corporation’s outstanding repurchase rights) upon the occurrence of a Change in Control. The
Plan Administrator shall also have full power and authority to condition any such option
acceleration (and the termination of any outstanding repurchase rights) upon the subsequent
termination of the Optionee’s Service through an Involuntary Termination effected within a
specified period following the Change in Control.

     F. Any options accelerated in connection with the Change in Control shall remain fully
exercisable until the expiration or sooner termination of the option term.

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

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	III.	 	STOCK APPRECIATION RIGHTS

     A. The Plan Administrator shall have full power and authority, exercisable in its sole
discretion, to grant to selected Optionees Tandem Stock Appreciation Rights (“Tandem Rights”).

     B. The following terms and conditions shall govern the grant and exercise of Tandem Rights:

     1. One or more Optionees may be granted the Tandem Right, exercisable upon such terms
and conditions as the Plan Administrator may establish, to elect between the exercise of the
underlying stock option for shares of Common Stock and the surrender of that option in
exchange for a distribution from the Corporation in an amount equal to the excess of (i) the
Fair Market Value (on the option surrender date) of the number of shares in which the
Optionee is at the time vested under the surrendered option (or surrendered portion thereof)
over (ii) the aggregate exercise price payable for such vested shares.

     2. No such option surrender shall be effective unless it is approved by the Plan
Administrator. If the surrender is so approved, then the distribution to which the Optionee
shall accordingly become entitled may be made in shares of Common Stock valued at Fair
Market Value on the option surrender date, in cash, or partly in shares and partly in cash,
as the Plan Administrator shall in its sole discretion deem appropriate.

     3. If the surrender of an option is rejected by the Plan Administrator, then the
Optionee shall retain whatever rights the Optionee had under the surrendered option (or
surrendered portion thereof) on the option surrender date and may exercise such rights at
any time prior to the later of (i) five (5) business days after the receipt of the rejection
notice or (ii) the last day on which the option is otherwise exercisable in accordance with
the terms of the instrument evidencing such option, but in no event may such rights be
exercised more than ten (10) years after the date of the option grant.

ARTICLE THREE

MISCELLANEOUS

	I.	 	LOANS OR INSTALLMENT PAYMENTS

     A. The Plan Administrator may, in its discretion, assist any Optionee in the exercise of one
or more options granted to such Optionee under the Discretionary Grant Program, including the
satisfaction of any Federal, state and local income and employment tax obligations arising
therefrom, by (i) authorizing the extension of a loan from the Corporation to such Optionee or (ii)
permitting the Optionee to pay the exercise price or purchase price for the acquired shares in
installments over a period of years. The terms of any loan or installment method of payment
(including the interest rate and terms of repayment) shall be upon such terms as the Plan
Administrator specifies in the applicable option agreement or otherwise deems appropriate under the
circumstances. Loans or installment payments may be authorized with or without security or
collateral. However, the maximum credit available to the Optionee may not exceed the exercise
price of the acquired shares (less the par value of such shares) plus any
Federal, state and local income and employment tax liability incurred by the Optionee in
connection with the acquisition of such shares.

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     B. The Plan Administrator may, in its absolute discretion, determine that one or more loans
extended under this financial assistance program shall be subject to forgiveness by the Corporation
in whole or in part upon such terms and conditions as the Plan Administrator may deem appropriate.

	II.	 	AMENDMENT OF THE PLAN AND AWARDS

          The Plan Administrator has complete authority to amend or modify the Plan (or any component
thereof) in any or all respects whatsoever. However, no such amendment or modification shall
adversely affect rights and obligations with respect to stock options or stock appreciation rights
at the time outstanding under the Plan, unless the Optionee consents to such amendment.

	III.	 	TAX WITHHOLDING

     A. The Corporation’s obligation to deliver shares of Common Stock upon the exercise of stock
options or stock appreciation rights under the Plan shall be subject to the satisfaction of all
applicable Federal, state and local income tax and employment tax withholding requirements.

     B. The Plan Administrator may, in its discretion, provide any or all holders of Non-Statutory
Options with the right to use shares of Common Stock in satisfaction of all or part of the Federal,
state and local income and employment tax liabilities (the “Taxes”) incurred by such holders in
connection with the exercise of their options or the vesting of their shares. Such right may be
provided to any such holder in either or both of the following formats:

          - Stock Withholding: The holder of the Non-Statutory Option may be provided with the
election to have the Corporation withhold, from the shares of Common Stock otherwise issuable upon
the exercise of such Non-Statutory Option or the vesting of such shares, a portion of those shares
with an aggregate Fair Market Value equal to the percentage of the Taxes (up to one hundred percent
(100%)) specified by such holder.

          - Stock Delivery: The holder of the Non-Statutory Option may be provided with the election
to deliver to the Corporation, at the time the Non-Statutory Option is exercised or the shares
vest, one or more shares of Common Stock previously acquired by such individual (other than in
connection with the option exercise or share vesting triggering the Taxes) with an aggregate Fair
Market Value equal to the percentage of the Taxes (up to one hundred percent (100%)) specified by
such holder.

	IV.	 	USE OF PROCEEDS

          Any cash proceeds received by the Corporation from the sale of shares pursuant to option
grants under the Plan shall be used for general corporate purposes.

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	V.	 	REGULATORY APPROVALS

     A. The implementation of the Plan, the granting of any option or stock appreciation right
under the Plan, and the issuance of Common Stock upon the exercise of the stock options and stock
appreciation rights granted hereunder shall be subject to the Corporation’s procurement of all
approvals and permits required by regulatory authorities having jurisdiction over the Plan, the
stock options and stock appreciation rights granted under it and the Common Stock issued pursuant
to it.

     B. No shares of Common Stock or other assets shall be issued or delivered under this Plan
unless and until there shall have been compliance with all applicable requirements of Federal and
state securities laws, including the filing and effectiveness of the Form S-8 registration
statement for the shares of Common Stock issuable under the Plan, and all applicable listing
requirements of any securities exchange on which the Common Stock is then listed for trading.

	VI.	 	NO EMPLOYMENT/SERVICE RIGHTS

          Neither the action of the Corporation in establishing the Plan, nor any action taken by the
Plan Administrator hereunder, nor any provision of the Plan shall be construed so as to grant any
individual the right to remain in the Service of the Corporation (or Subsidiary) for any period of
specific duration, and the Corporation (or any Subsidiary retaining the services of such
individual) may terminate such individual’s Service at any time and for any reason, with or without
cause.

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GLOSSARY

          The following definitions shall be in effect under the Plan:

          CHANGE IN CONTROL: a change in ownership or control of the Corporation effected through any
of the following transactions:

     - the direct or indirect acquisition 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 1934 Act) of securities
possessing more than fifty percent (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 which the Board does not recommend such
stockholders to accept, or

     - a change in the composition of the Board over a period of thirty-six (36)
months or less such that a majority of the Board members (rounded up to the next
whole number) ceases, by reason of one or more contested elections for Board
membership, to be comprised of individuals who either (a) have been Board members
continuously since the beginning of such period or (b) have been elected or
nominated for election as Board members during such period by at least a majority of
the Board members described in clause (a) who were still in office at the time such
election or nomination was approved by the Board.

          CODE: the Internal Revenue Code of 1986, as amended.

          COMMITTEE: a committee of two (2) or more Board members appointed by the Board to administer
the Plan.

          CORPORATE TRANSACTION: any of the following stockholder-approved transactions to which the
Corporation is a party:

     - a merger or consolidation in which the Corporation is not the surviving
entity, except for a transaction the principal purpose of which is to change the
state in which the Corporation is incorporated,

     - a sale, transfer or other disposition of all or substantially all of the
Corporation’s assets in complete liquidation or dissolution of the Corporation, or

     - any reverse merger in which the Corporation is the surviving entity but in
which securities possessing more than fifty percent (50%) of the total combined
voting power of the Corporation’s outstanding securities are transferred to a person
or persons different from the persons holding those securities immediately prior to
such merger.

          EMPLOYEE: an individual who performs services while in the employ of the Corporation or one
or more Subsidiaries, subject to the control and direction of the employer
entity not only as to the work to be performed but also as to the manner and method of
performance.

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          FAIR MARKET VALUE: the closing selling price per share on the date in question on the NASDAQ
National Market. If there is no reported 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.

          HOSTILE TAKE-OVER: a change in ownership of the Corporation effected through the following
transaction:

     - the direct or indirect acquisition by any person or related group of persons
of securities possessing more than fifty percent (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 which the Board does not
recommend such stockholders to accept, and

     - more than fifty percent (50%) of the acquired securities are accepted from
holders other than the officers and directors of the Corporation subject to the
short-swing profit restrictions of Section 16 of the 1934 Act.

          INVOLUNTARY TERMINATION: the termination of the Service of any Optionee which occurs by
reason of:

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

     - such individual’s voluntary resignation following (A) a change in his or her
position with the Corporation which materially reduces his or her level of
responsibility, (B) a reduction in his or her level of compensation (including base
salary, fringe benefits and any non-discretionary and objective-standard incentive
payment or bonus award) by more than five percent (5%) or (C) a relocation of such
individual’s place of employment by more than fifty (50) miles, provided and only if
such change, reduction or relocation is effected by the Corporation without the
individual’s consent.

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

          NEWLY ISSUED SHARES: shares of Common Stock drawn from the Corporation’s authorized but
unissued shares of Common Stock.

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          1934 ACT: the Securities and Exchange Act of 1934, as amended.

          NON-STATUTORY OPTION: a stock option not intended to meet the requirements of Code Section
422.

          OPTIONEE: any person to whom an option is granted under the Discretionary Grant Program in
effect under the Plan.

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

          PERMANENT DISABILITY OR PERMANENTLY DISABLED: the inability of the Optionee to engage in any
substantial gainful activity by reason of any medically determinable physical or mental impairment
expected to result in death or to be of continuous duration of twelve (12) months or more.

          PLAN ADMINISTRATOR: the committee of two (2) or more Board members appointed by the Board to
administer the Discretionary Option Grant Program.

          SERVICE: the provision of services on a periodic basis to the Corporation or any Parent or
Subsidiary in the capacity of an Employee, except to the extent otherwise specifically provided in
the applicable stock option agreement.

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

          TAKE-OVER PRICE: the greater of (i) the Fair Market Value per share of Common Stock on the
date the option is surrendered to the Corporation in connection with a Hostile Take-Over or (ii)
the highest reported price per share of Common Stock paid by the tender offer in effecting such
Hostile Take-Over. However, if the surrendered option is an Incentive Option, the Take-Over Price
shall not exceed the clause (i) price per share.

          TREASURY SHARES: shares of Common Stock reacquired by the Corporation and held as treasury
shares.

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Exhibit 4.6

DIGITAL MICROWAVE CORPORATION

1998 NON-OFFICER EMPLOYEE STOCK OPTION PLAN

ARTICLE ONE

GENERAL

I. PURPOSE OF THE PLAN

     A. This 1998 Non-Officer Employee Stock Option Plan (the “Plan”) is intended to promote the
interests of Digital Microwave Corporation, a Delaware corporation (the “Corporation”), by
providing key employees (excluding officers) of the Corporation (or its Parent or Subsidiary
corporations) who are responsible for the management, growth and financial success of the
Corporation with the opportunity to acquire a proprietary interest, or otherwise increase their
proprietary interest, in the Corporation as an incentive for them to remain in the service of the
Corporation (or its subsidiary corporations).

     B. The Effective Date of the Plan is January 2, 1998.

     C. Capitalized terms shall, except as otherwise specifically defined within the provisions of
the Plan, have the meanings assigned to such terms in the Glossary.

II. ADMINISTRATION OF THE PLAN

     A. The Committee shall have sole and exclusive authority to administer the Discretionary
Option Grant Program. Members of the Committee shall serve for such period as the Corporation’s
Board of Directors (the “Board”) may determine and shall be subject to removal by the Board at any
time.

     B. The Committee as Plan Administrator shall have full power and discretion (subject to the
express provisions of the Plan) to establish such rules and regulations as it may deem appropriate
for the proper administration of the Discretionary Option Grant Program and to make such
determinations under, and issue such interpretations of, the provisions of such program and any
outstanding option grants thereunder as it may deem necessary or advisable. Decisions of the Plan
Administrator shall be final and binding on all parties who have an interest in the program or any
outstanding option thereunder.

     C. Service on the Committee shall constitute service as a Board member, and members of the
Committee shall accordingly be entitled to full indemnification and reimbursement as Board members
for their service on the Committee. No member of the Committee shall be liable for any act or
omission made in good faith with respect to the Plan or any option grants under the Plan.

 

 

III. ELIGIBILITY

     A. The persons eligible to participate in the Discretionary Option Grant Program are key
employees (other than officers) of the Corporation (or any Parent or Subsidiary) who render
services which contribute to the management, growth and financial success of the Corporation.

     B. The Plan Administrator shall have full authority to determine, with respect to grants made
under the Discretionary Option Grant Program, which eligible individuals are to receive such
grants, the number of shares to be covered by each such grant, the time or times at which each
granted option is to become exercisable and the maximum term for which the option may remain
outstanding.

IV. STOCK SUBJECT TO THE PLAN

     A. Shares of Common Stock shall be available for issuance under the Plan and shall be drawn,
from either the Corporation’s authorized but unissued shares of Common Stock or from reacquired
shares of Common Stock, including shares repurchased by the Corporation on the open market. The
number of shares of Common Stock reserved for issuance over the term of the Plan shall initially be
fixed at 500,000 shares.

     B. Should one or more outstanding options under this Plan expire or terminate for any reason
prior to exercise in full, then the shares subject to the portion of each option not so exercised
shall be available for subsequent issuance under the Plan. Shares subject to any stock
appreciation rights exercised under the Plan, whether or not the issued shares are subsequently
repurchased by the Corporation pursuant to its repurchase rights under the Plan, shall reduce on a
share-for-share basis the number of shares of Common Stock available for subsequent issuance under
the Plan. In addition, should the exercise price of an outstanding option under the Plan be paid
with shares of Common Stock or should shares of Common Stock otherwise issuable under the Plan be
withheld by the Corporation in satisfaction of the withholding taxes incurred in connection with
the exercise of an outstanding option under the Plan, then the number of shares of Common Stock
available for issuance under the Plan shall be reduced by the gross number of shares for which the
option is exercised, and not by the net number of shares of Common Stock actually issued to the
holder of such option.

     C. Should any change be made to the Common Stock issuable under the Plan 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, then appropriate adjustments shall be made to (i) the maximum number and/or class of
securities issuable under the Plan and (ii) the number and/or class of securities and price per
share in effect under each option outstanding under the Plan. Such adjustments to the outstanding
options are to be effected in a manner which shall preclude the enlargement or dilution of rights
and benefits under those options. The adjustments determined by the Plan Administrator shall be
final, binding and conclusive.

 

 

ARTICLE TWO

DISCRETIONARY OPTION GRANT PROGRAM

I. TERMS AND CONDITIONS OF OPTIONS

     Options granted pursuant to the Discretionary Grant Program shall be authorized by action of
the Plan Administrator and shall be Non-Statutory Options. Each granted option shall be evidenced
by one or more instruments in the form approved by the Plan Administrator; provided, however, that
each such instrument shall comply with the terms and conditions specified below.

     A. Exercise Price.

          1. The exercise price per share of Common Stock subject to a Non-Statutory Option shall be
fixed by the Plan Administrator and in no event shall be less than eighty-five percent (85%) of the
Fair Market Value of such Common Stock on the grant date.

          2. The exercise price shall become immediately due upon exercise of the option and shall be
payable in one of the alternative forms specified below:

               (i) full payment in cash or check made payable to the Corporation’s order,

               (ii) full payment in shares of Common Stock held for the requisite period necessary to avoid a
charge to the Corporation’s earnings for financial reporting purposes and valued at Fair Market
Value on the date the option is exercised,

               (iii) full payment in a combination of shares of Common Stock held for the requisite period
necessary to avoid a charge to the Corporation’s earnings for financial reporting purposes and
valued at Fair Market Value on the date the option is exercised and cash or check made payable to
the Corporation’s order, or

               (iv) to the extent the option is exercised for vested shares, full payment through a
broker-dealer sale and remittance procedure pursuant to which the Optionee shall provide concurrent
irrevocable written instructions (I) to a Corporation-designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the Corporation, out of the sales proceeds
available on the settlement date, sufficient funds to cover the aggregate exercise price payable
for the purchased shares plus all applicable Federal, state and local income and employment taxes
required to be withheld by the Corporation in connection with such purchase and (II) to the
Corporation to deliver the certificates for the purchased shares directly to such brokerage firm in
order to complete the sale transaction.

     B. Term and Exercise of Options. Each option shall be exercisable at such time or times,
during such period and for such number of shares as shall be determined by the Plan Administrator
and set forth in the instrument evidencing such option. No option shall, however, have a maximum
term in excess of ten (10) years. During the lifetime of the Optionee, the option, together with
any stock appreciation rights pertaining to such option, shall be exercisable
only by the Optionee and shall not be assignable or transferable except for a transfer of the
option effected by will or by the laws of descent and distribution following the Optionee’s death,
except as the Plan Administrator may otherwise provide.

 

 

     C. Termination of Service.

          1. Except to the extent otherwise expressly authorized by the Plan Administrator, no Optionee
shall have more than a thirty-six (36)-month period measured from the date of such individual’s
cessation of Service in which to exercise his or her outstanding options under the Plan.

          2. Any option exercisable in whole or in part by the Optionee at the time of death may be
subsequently exercised by the personal representative of the Optionee’s estate or by the person or
persons to whom the option is transferred pursuant to the Optionee’s will or in accordance with the
laws of descent and distribution. However, no such option shall remain exercisable for more than
thirty-six (36) months after the date of the Optionee’s death.

          3. Under no circumstances shall any such option be exercisable after the specified expiration
date of the option term.

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

          5. Should the Optionee’s Service be terminated for Misconduct, all outstanding options held by
that individual shall terminate immediately and cease to remain outstanding.

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

     - to permit one or more options to be exercised not only with respect to the
number of vested shares of Common Stock for which each such option is exercisable at
the time of the Optionee’s cessation of Service but also with respect to one or more
subsequent installments of vested shares for which the option would otherwise have
become exercisable had such cessation of Service not occurred,

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

 

 

     D. Stockholder Rights. An Optionee shall have none of the rights of a stockholder with
respect to any option shares until such individual shall have exercised the option and paid the
exercise price for the purchased shares.

     E. Repurchase Rights. The shares of Common Stock acquired under this Discretionary Grant
Program may be subject to repurchase by the Corporation in accordance with the following
provisions:

          1. The Plan Administrator shall have the discretion to grant options which are exercisable for
unvested shares of Common Stock. Should the Optionee cease Service while holding any unvested
shares purchased under such options, then the Corporation shall have the right to repurchase any or
all of those unvested shares at the exercise price paid per share. The terms and conditions upon
which such repurchase right shall be exercisable (including the period and procedure for exercise
and the appropriate vesting schedule for the purchased shares) shall be established by the Plan
Administrator and set forth in the instrument evidencing such repurchase right.

          2. All of the Corporation’s outstanding repurchase rights shall automatically terminate, and
all shares subject to such terminated rights shall immediately vest in full, upon the occurrence of
a Corporate Transaction, except to the extent: (i) any such repurchase right is expressly assigned
to the successor corporation (or parent thereof) in connection with the Corporate Transaction or
(ii) such accelerated vesting is precluded by other limitations imposed by the Plan Administrator
at the time the repurchase right is issued.

          3. The Plan Administrator shall have the discretionary authority, exercisable either before or
after the Optionee’s cessation of Service, to cancel the Corporation’s outstanding repurchase
rights with respect to one or more shares purchased or purchasable by the Optionee under the Plan
and thereby accelerate the vesting of such shares in whole or in part at any time.

II. CORPORATE TRANSACTIONS/CHANGES IN CONTROL/HOSTILE TAKE-OVER

     A. In the event of any Corporate Transaction, each outstanding option shall automatically
accelerate so that each such option shall, immediately prior to the specified effective date for
such Corporate Transaction, become fully exercisable with respect to the total number of shares of
Common Stock at the time subject to such option and may be exercised for all or any portion of such
shares. However, an outstanding option shall not so accelerate if and to the extent: (i) such
option is, in connection with the Corporate Transaction, either to be assumed by the successor
corporation or parent thereof or to be replaced with a comparable option to purchase shares of the
capital stock of the successor corporation or parent thereof, (ii) such option is to be replaced
with a cash incentive program of the successor corporation which preserves the option spread
existing at the time of the Corporate Transaction and provides for subsequent payout in accordance
with the same vesting schedule applicable to such option or (iii) the acceleration of such option
is subject to other limitations imposed by the Plan Administrator at the time of the option grant.
The determination of option comparability under
clause (i) above shall be made by the Plan Administrator, and its determination shall be
final, binding and conclusive.

 

 

     B. The Plan Administrator shall have the discretionary authority, exercisable either at the
time the option is granted or at any time while the option remains outstanding, to provide for the
automatic acceleration of one or more outstanding options upon the occurrence of a Corporate
Transaction, whether or not those options are to be assumed or replaced in the Corporate
Transaction. Alternatively, the Plan Administrator shall have the authority to provide for the
subsequent acceleration of any outstanding options which do not otherwise accelerate at the time of
the Corporate Transaction, or the subsequent termination of any of the Corporation’s outstanding
repurchase rights which do not otherwise terminate at the time of the Corporate Transaction, should
the Optionee’s Service terminate through an Involuntary Termination effected within a designated
period following the effective date of such Corporate Transaction.

     C. Immediately following the consummation of the Corporate Transaction, all outstanding
options shall terminate, except to the extent assumed by the successor corporation or its parent
company.

     D. Each outstanding option under this Discretionary Grant Program that is assumed in
connection with the Corporate Transaction or is otherwise to continue in effect shall be
appropriately adjusted, immediately after such Corporate Transaction, to apply and pertain to the
number and class of securities which would have been issued to the option holder, in consummation
of such Corporate Transaction, had such person exercised the option immediately prior to such
Corporate Transaction. Appropriate adjustments shall also be made to the exercise price payable
per share, provided the aggregate exercise price payable for such securities shall remain the same.
In addition, the class and number of securities available for issuance under the Plan on both an
aggregate and per individual basis following the consummation of the Corporate Transaction shall be
appropriately adjusted.

     E. The Plan Administrator shall have the discretionary authority, exercisable either at the
time the option is granted or at any time while the option remains outstanding, to provide for the
automatic acceleration of one or more outstanding options (and the termination of one or more of
the Corporation’s outstanding repurchase rights) upon the occurrence of a Change in Control. The
Plan Administrator shall also have full power and authority to condition any such option
acceleration (and the termination of any outstanding repurchase rights) upon the subsequent
termination of the Optionee’s Service through an Involuntary Termination effected within a
specified period following the Change in Control.

     F. Any options accelerated in connection with the Change in Control shall remain fully
exercisable until the expiration or sooner termination of the option term.

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

 

 

III. STOCK APPRECIATION RIGHTS

     A. The Plan Administrator shall have full power and authority, exercisable in its sole
discretion, to grant to selected Optionees Tandem Stock Appreciation Rights (“Tandem Rights”).

     B. The following terms and conditions shall govern the grant and exercise of Tandem Rights:

          1. One or more Optionees may be granted the Tandem Right, exercisable upon such terms and
conditions as the Plan Administrator may establish, to elect between the exercise of the underlying
stock option for shares of Common Stock and the surrender of that option in exchange for a
distribution from the Corporation in an amount equal to the excess of (i) the Fair Market Value
(on the option surrender date) of the number of shares in which the Optionee is at the time vested
under the surrendered option (or surrendered portion thereof) over (ii) the aggregate exercise
price payable for such vested shares.

          2. No such option surrender shall be effective unless it is approved by the Plan
Administrator. If the surrender is so approved, then the distribution to which the Optionee shall
accordingly become entitled may be made in shares of Common Stock valued at Fair Market Value on
the option surrender date, in cash, or partly in shares and partly in cash, as the Plan
Administrator shall in its sole discretion deem appropriate.

          3. If the surrender of an option is rejected by the Plan Administrator, then the Optionee
shall retain whatever rights the Optionee had under the surrendered option (or surrendered portion
thereof) on the option surrender date and may exercise such rights at any time prior to the later
of (i) five (5) business days after the receipt of the rejection notice or (ii) the last day on
which the option is otherwise exercisable in accordance with the terms of the instrument evidencing
such option, but in no event may such rights be exercised more than ten (10) years after the date
of the option grant.

ARTICLE THREE

MISCELLANEOUS

I. LOANS OR INSTALLMENT PAYMENTS

     A. The Plan Administrator may, in its discretion, assist any Optionee in the exercise of one
or more options granted to such Optionee under the Discretionary Grant Program, including the
satisfaction of any Federal, state and local income and employment tax obligations arising
therefrom, by (i) authorizing the extension of a loan from the Corporation to such Optionee or (ii)
permitting the Optionee to pay the exercise price or purchase price for the acquired shares in
installments over a period of years. The terms of any loan or installment method of payment
(including the interest rate and terms of repayment) shall be upon such terms as the Plan
Administrator specifies in the applicable option agreement or otherwise deems appropriate under the
circumstances. Loans or installment payments may be authorized with or without security or
collateral. However, the maximum credit available to the Optionee may not exceed the exercise
price of the acquired shares (less the par value of such shares) plus any
Federal, state and local income and employment tax liability incurred by the Optionee in
connection with the acquisition of such shares.

 

 

     B. The Plan Administrator may, in its absolute discretion, determine that one or more loans
extended under this financial assistance program shall be subject to forgiveness by the Corporation
in whole or in part upon such terms and conditions as the Plan Administrator may deem appropriate.

II. AMENDMENT OF THE PLAN AND AWARDS

     The Plan Administrator has complete authority to amend or modify the Plan (or any component
thereof) in any or all respects whatsoever. However, no such amendment or modification shall
adversely affect rights and obligations with respect to stock options or stock appreciation rights
at the time outstanding under the Plan, unless the Optionee consents to such amendment.

III. TAX WITHHOLDING

     A. The Corporation’s obligation to deliver shares of Common Stock upon the exercise of stock
options or stock appreciation rights under the Plan shall be subject to the satisfaction of all
applicable Federal, state and local income tax and employment tax withholding requirements.

     B. The Plan Administrator may, in its discretion, provide any or all holders of Non-Statutory
Options with the right to use shares of Common Stock in satisfaction of all or part of the Federal,
state and local income and employment tax liabilities (the “Taxes”) incurred by such holders in
connection with the exercise of their options or the vesting of their shares. Such right may be
provided to any such holder in either or both of the following formats:

          - Stock Withholding: The holder of the Non-Statutory Option may be provided with the
election to have the Corporation withhold, from the shares of Common Stock otherwise issuable upon
the exercise of such Non-Statutory Option or the vesting of such shares, a portion of those shares
with an aggregate Fair Market Value equal to the percentage of the Taxes (up to one hundred percent
(100%)) specified by such holder.

          - Stock Delivery: The holder of the Non-Statutory Option may be provided with the election
to deliver to the Corporation, at the time the Non-Statutory Option is exercised or the shares
vest, one or more shares of Common Stock previously acquired by such individual (other than in
connection with the option exercise or share vesting triggering the Taxes) with an aggregate Fair
Market Value equal to the percentage of the Taxes (up to one hundred percent (100%)) specified by
such holder.

IV. USE OF PROCEEDS

     Any cash proceeds received by the Corporation from the sale of shares pursuant to option
grants under the Plan shall be used for general corporate purposes.

 

 

V. REGULATORY APPROVALS

     A. The implementation of the Plan, the granting of any option or stock appreciation right
under the Plan, and the issuance of Common Stock upon the exercise of the stock options and stock
appreciation rights granted hereunder shall be subject to the Corporation’s procurement of all
approvals and permits required by regulatory authorities having jurisdiction over the Plan, the
stock options and stock appreciation rights granted under it and the Common Stock issued pursuant
to it.

     B. No shares of Common Stock or other assets shall be issued or delivered under this Plan
unless and until there shall have been compliance with all applicable requirements of Federal and
state securities laws, including the filing and effectiveness of the Form S-8 registration
statement for the shares of Common Stock issuable under the Plan, and all applicable listing
requirements of any securities exchange on which the Common Stock is then listed for trading.

VI. NO EMPLOYMENT/SERVICE RIGHTS

     Neither the action of the Corporation in establishing the Plan, nor any action taken by the
Plan Administrator hereunder, nor any provision of the Plan shall be construed so as to grant any
individual the right to remain in the Service of the Corporation (or Subsidiary) for any period of
specific duration, and the Corporation (or any Subsidiary retaining the services of such
individual) may terminate such individual’s Service at any time and for any reason, with or without
cause.

 

 

GLOSSARY

The following definitions shall be in effect under the Plan:

CHANGE IN CONTROL: a change in ownership or control of the Corporation effected through any of the
following transactions:

     - the direct or indirect acquisition 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 1934 Act) of securities
possessing more than fifty percent (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 which the Board does not recommend such
stockholders to accept, or

     - a change in the composition of the Board over a period of thirty-six (36)
months or less such that a majority of the Board members (rounded up to the next
whole number) ceases, by reason of one or more contested elections for Board
membership, to be comprised of individuals who either (a) have been Board members
continuously since the beginning of such period or (b) have been elected or
nominated for election as Board members during such period by at least a majority of
the Board members described in clause (a) who were still in office at the time such
election or nomination was approved by the Board.

CODE: the Internal Revenue Code of 1986, as amended.

COMMITTEE: a committee of two (2) or more Board members appointed by the Board to administer the
Plan.

CORPORATE TRANSACTION: any of the following stockholder-approved transactions to which the
Corporation is a party:

     - a merger or consolidation in which the Corporation is not the surviving
entity, except for a transaction the principal purpose of which is to change the
state in which the Corporation is incorporated,

     - a sale, transfer or other disposition of all or substantially all of the
Corporation’s assets in complete liquidation or dissolution of the Corporation, or

     - any reverse merger in which the Corporation is the surviving entity but in
which securities possessing more than fifty percent (50%) of the total combined
voting power of the Corporation’s outstanding securities are transferred to a person
or persons different from the persons holding those securities immediately prior to
such merger.

 

 

EMPLOYEE: an individual who performs services while in the employ of the Corporation or one or
more Subsidiaries, subject to the control and direction of the employer entity not only as to the
work to be performed but also as to the manner and method of performance.

FAIR MARKET VALUE: the closing selling price per share on the date in question on the NASDAQ
National Market. If there is no reported 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.

INVOLUNTARY TERMINATION: the termination of the Service of any Optionee which occurs by reason of:

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

     - such individual’s voluntary resignation following (A) a change in his or her
position with the Corporation which materially reduces his or her level of
responsibility, (B) a reduction in his or her level of compensation (including base
salary, fringe benefits and any non-discretionary and objective-standard incentive
payment or bonus award) by more than five percent (5%) or (C) a relocation of such
individual’s place of employment by more than fifty (50) miles, provided and only if
such change, reduction or relocation is effected by the Corporation without the
individual’s consent.

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

NEWLY ISSUED SHARES: shares of Common Stock drawn from the Corporation’s authorized but unissued
shares of Common Stock.

1934 ACT: the Securities and Exchange Act of 1934, as amended.

NON-STATUTORY OPTION: a stock option not intended to meet the requirements of Code Section 422.

OPTIONEE: any person to whom an option is granted under the Discretionary Grant Program in effect
under the Plan.

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

 

 

PERMANENT DISABILITY OR PERMANENTLY DISABLED: the inability of the Optionee to engage in any
substantial gainful activity by reason of any medically determinable physical or mental impairment
expected to result in death or to be of continuous duration of twelve (12) months or more.

PLAN ADMINISTRATOR: the committee of two (2) or more Board members appointed by the Board to
administer the Discretionary Option Grant Program.

SERVICE: the provision of services on a periodic basis to the Corporation or any Parent or
Subsidiary in the capacity of an Employee, except to the extent otherwise specifically provided in
the applicable stock option agreement.

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

TAKE-OVER PRICE: the greater of (i) the Fair Market Value per share of Common Stock on the date
the option is surrendered to the Corporation in connection with a Hostile Take-Over or (ii) the
highest reported price per share of Common Stock paid by the tender offer in effecting such Hostile
Take-Over. However, if the surrendered option is an Incentive Option, the Take-Over Price shall
not exceed the clause (i) price per share.

TREASURY SHARES: shares of Common Stock reacquired by the Corporation and held as treasury shares.

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