Document:

exv10w8

 

Exhibit 10.8

PRIVATE PLACEMENT WARRANT PURCHASE AGREEMENT

     PRIVATE PLACEMENT WARRANT PURCHASE AGREEMENT (this “Agreement”) made as of __________________, 2006
among General Finance Corporation, a Delaware corporation (the “Company”),
Morgan Joseph & Co. Inc. (“Morgan Joseph”) as representative of the underwriters of the IPO
(as defined below) (solely for the purposes of Sections 4 and 6
hereof), and Ronald F. Valenta and
John O. Johnson (the “Purchasers”).

     Whereas, the Company has filed with the Securities and Exchange Commission a registration
statement on Form S-1, as amended (File No. 333-129830) (the “Registration Statement”), in
connection with the Company’s initial public offering (the “IPO”) of units, each unit
(“Unit”) consisting of (i) one share of the Company’s common stock, $0.0001 par value (the
“Common Stock”), and (ii) one warrant (the “Warrant”), each Warrant to purchase one
share of Common Stock; and

     Whereas, pursuant to the terms and conditions hereof, the Company desires to sell, and the
Purchasers desire to acquire, in a private placement, an aggregate of 583,333 Warrants (sold
separately and not in combination with the Common Stock) (the “Placement Warrants”);

     Now, Therefore, for and in consideration of the premises and the mutual covenants hereinafter
set forth, the parties hereto do hereby agree as follows:

     1. Purchase of Placement Warrants. Each Purchaser hereby agrees to purchase the number of
Placement Warrants set forth under his name on the signature page hereof, at a purchase price of
$1.20 per Placement Warrant. (the “Purchase Price”). The Placement Warrants shall carry
rights and terms identical to those possessed by the Warrants issued in the IPO, except that (i) a
Purchaser may not sell, transfer, assign, gift, create a security interest in, or otherwise dispose
of, with or without consideration (collectively, “Transfer”) any Placement Warrant until
such time as the Company has completed a Business Combination (as defined in the Company’s Amended
and Restated Certificate of Incorporation), (ii) the Placement Warrants will not initially be
registered under the Securities Act of 1933, as amended (the
“Securities Act”) and (iii)  the shares of Common Stock issuable upon exercise of the Placement
Warrants (the “Warrant Shares”), will be entitled to registration rights under the Amended
and Restated Registration Rights Agreement (the “Registration Rights Agreement”) to be
signed contemporaneously herewith between the Purchasers, the Company and certain other parties
thereto. The Transfer restriction set forth in (i) above shall not apply, with respect to a
Purchaser, to Transfers (a) by gift to an immediate family member of such Purchaser or to a trust,
the beneficiary of which is such Purchaser or a member of the immediate family of such Purchaser;
(b) by virtue of the laws of descent and distribution upon death of any Purchaser, or (c) pursuant
to a qualified domestic relations order ; provided, however, that such permissive
Transfers may be implemented only upon the respective transferee’s written agreement to be bound by
the terms and conditions of this Agreement as a Purchaser. Except as specifically provided in this
Agreement, the terms of the Placement Warrants shall in all other respects be as set forth in the
Warrant Agreement relating to the Warrants issued in the IPO. In the event of any conflict between
this Agreement and the Warrant Agreement, the terms and provisions of which are incorporated herein
by reference, this Agreement shall control.

 

 

     2. Closing. The closing of the purchase and sale of the Placement Warrants (the
“Closing”) will take place immediately prior the closing of the IPO. At the Closing, the
Purchasers shall pay the Purchase Price by wire transfer of funds to the trustee of the trust
account described in the Registration Statement into which the Company will deposit a portion of
the net proceeds of the IPO (the “Trust Account”). The certificates for the Placement
Warrants shall be delivered to the Purchasers promptly after the closing of the IPO.

     3. Representations and Warranties of the Purchasers. Each Purchaser hereby represents and
warrants to the Company that:

          3.1 He is acquiring the Placement Warrants, and will acquire the Warrant Shares, for his own
account, for investment purposes only.

          3.2 He understands that an investment in the Placement Warrants and Warrant Shares involves a
high degree of risk, and he has the financial ability to bear the economic risk of this investment
in the Placement Warrants and Warrant Shares, including a complete loss of such investment. He has
adequate means for providing for his current financial needs and has no need for liquidity with
respect to this investment.

          3.3 He has such knowledge and experience in financial and business matters that he is capable
of evaluating the merits and risks of an investment in the Placement Warrants and Warrant Shares
and in protecting his own interest in connection with this transaction.

          3.4 He understands that the Placement Warrants have not been, and the Warrant Shares will not
be, registered under the Securities Act, or under any state securities laws. He is familiar with
the provisions of the Securities Act and Rule 144 thereunder and understands that the restrictions
on transfer on the Placement Warrants and Warrant Shares may result in his being required to hold
the Placement Warrants and Warrant Shares for an indefinite period of time.

          3.5 He is an “accredited investor” within the meaning of Regulation D under the Securities
Act.

          3.6 He agrees not to Transfer any of the Placement Warrants or the Warrant Shares except in
accordance with Section 1 hereof and pursuant to an effective registration statement under the
Securities Act or an exemption from registration. As a further condition to any such Transfer,
except in the event that such Transfer is made pursuant to an effective registration statement
under the Securities Act, if in the reasonable opinion of counsel to the Company any Transfer of
the Placement Warrants or Warrant Shares by the contemplated transferee thereof would not be exempt
from the registration and prospectus delivery requirements of the Securities Act, the Company may
require the contemplated transferee to furnish the Company with an investment letter setting forth
such information and agreements as may be reasonably requested by the Company to ensure compliance
by such transferee with the Securities Act.

          3.7 He has the full right, power and authority to enter into this Agreement, and this
Agreement is a valid and legally binding obligation enforceable against him in accordance with its
terms.

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     4. Waiver of Claims; Indemnification. The Purchasers hereby waive any and all rights to assert
any present or future claims, including any right of rescission, against the Company, Morgan Joseph
or the other underwriters in the IPO with respect to its purchase of the Placement Warrants, and
the Purchasers agree to indemnify and hold the Company, Morgan Joseph and the other underwriters in
the IPO harmless from all losses, damages or expenses that relate to claims or proceedings brought
against the Company, Morgan Joseph or such other underwriters by the Purchasers of the Placement
Warrants or its transferees, heirs, assigns or any subsequent holders of the Placement Warrants.

     5. Counterparts; Facsimile. This Agreement may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original and all of which taken together shall
constitute one and the same instrument. This Agreement or any counterpart may be executed via
facsimile transmission, and any such executed facsimile copy shall be treated as an original.

     6. Governing Law; Jurisdiction. This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of California, without giving effect to conflicts of law
principles that would result in the application of the substantive laws of another jurisdiction.
The Purchasers hereby (i) agree that any action, proceeding or claim against it arising out of or
relating in any way to this Agreement (a “Proceeding”) shall be brought and enforced in the
courts of the State of New York of the United States of America for the Southern District of New
York, and irrevocably submit to such jurisdiction, which jurisdiction shall be exclusive, (ii)
waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient
forum; and (iii) irrevocably agree to appoint, at the expense of the Company, prior to the
effectiveness of the Registration Statement, a person or entity acceptable to Morgan Joseph, as
agent for the service of process in the State of New York to receive, for the Purchasers and on
their behalf, service of process in any Proceeding (and Morgan Joseph agrees that CT Corporation
System is an acceptable agent). If for any reason such agent is unable to act as such, the
Purchasers will promptly notify the Company and Morgan Joseph and appoint a substitute agent
acceptable to Morgan Joseph within 30 days and nothing in this letter will affect the right of
either party to serve process in any other manner permitted by law.

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     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written
above.

	 	 	 	 	 
	GENERAL FINANCE CORPORATION
	 
	 	 	 	 
	 
	 	 	 	 
	By:

	 	 
	 	 
	 

	 	 
	 	 
	 

	 	Name: Ronald F. Valenta	 	          Ronald F. Valenta
	 

	 	Title:   President
	 	 
	 

	 	 	 	          Number of Placement Warrants To Be
	 

	 	 	 	          Purchased:    466,666
	 
	 	 	 	 
	MORGAN JOSEPH & CO. INC.
	as representative of the underwriters
	 
	 	 	 	 
	By:

	 	 
	 	 
	 

	 	 
	 	 
	 

	 	Name:
	 	          John O. Johnson
	 

	 	Title:	 	 
	 

	 	 	 	          Number of Placement Warrants To Be
	 

	 	 	 	          Purchased:    116,667

- 4 -exv10w1

 

QUOVADX, INC.

1997 STOCK PLAN

As Amended and Restated Effective February 10, 2000 and

Amended Effective November 19, 2001 and

As Amended and Restated Effective April 23, 2004 and

As Amended and Restated Effective December 12, 2005

	 	1.	 	Purposes of the Plan. The purposes of this Plan are:

	 	§	 	to attract and retain the best available personnel for positions of
substantial responsibility,
	 
	 	§	 	to provide additional incentive to Employees, Directors and Consultants, and
	 
	 	§	 	to promote the success of the Company’s business.

          The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Restricted
Stock, Stock Appreciation Rights, Performance Shares and Performance Units.

	 	2.	 	Definitions. As used herein, the following definitions shall apply:

          (a) “Administrator” means the Board or any of its Committees as shall be administering
the Plan in accordance with Section 4 hereof.

          (b) “Applicable Laws” means the requirements relating to the administration of equity
based awards under U. S. state corporate laws, U.S. federal and state securities laws, the Code,
any stock exchange or quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under
the Plan.

          (c) “Award” means, individually or collectively, a grant under the Plan of Options,
SARs, Restricted Stock, Performance Units or Performance Shares.

          (d) “Award Agreement” means the written or electronic agreement setting forth the
terms and provisions applicable to each Award granted under the Plan and shall include an Option
Agreement. The Award Agreement is subject to the terms and conditions of the Plan.

          (e) “Board” means the Board of Directors of the Company.

          (f) “Cash Position” means as to any Performance Period, the Company’s level of cash
and cash equivalents.

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

 

 

          (h) “Committee” means a committee of Directors or of other individuals satisfying
Applicable Laws appointed by the Board in accordance with Section 4 of the Plan.

          (i) “Common Stock” means the common stock of the Company.

          (j) “Company” means Quovadx, Inc., a Delaware corporation.

          (k) “Consultant” means any person who is engaged by the Company or any Parent or
Subsidiary to render consulting or advisory services to such entity.

          (l) “Director” means a member of the Board.

          (m) “Disability” means total and permanent disability as defined in Section 22(e)(3)
of the Code.

          (n) “Earnings Per Share” means as to any Performance Period, the Company’s or a
business unit’s Net Income, divided by a weighted average number of Common Stock outstanding and
dilutive common equivalent Shares deemed outstanding.

          (o) “Employee” means any person, including Officers and Directors, employed by the
Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a
director’s fee by the Company shall be sufficient to constitute “employment” by the Company.

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

          (q) “Fair Market Value” means, as of any date, the value of Common Stock determined as
follows:

                    (i) If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of
The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or
the closing bid, if no sales were reported) as quoted on such exchange or system for the day of
grant, as reported in The Wall Street Journal or such other source as the Administrator deems
reliable;

                    (ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, its Fair Market Value shall be the mean between the high bid and low asked
prices for the Common Stock on the day of determination; or

                    (iii) In the absence of an established market for the Common Stock, the Fair Market Value
thereof shall be determined in good faith by the Administrator.

          (r) “Fiscal Year” means the fiscal year of the Company.

          (s) “Incentive Stock Option” means an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code.

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          (t) “Net Income” means as to any Performance Period, the Company’s or a business
unit’s income after taxes.

          (u) “Nonstatutory Stock Option” means an Option not intended to qualify as an
Incentive Stock Option.

          (v) “Officer” means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

          (w) “Operating Cash Flow” means as to any Performance Period, the Company’s or a
business unit’s sum of Net Income plus depreciation and amortization less capital expenditures plus
changes in working capital comprised of accounts receivable, inventories, other current assets,
trade accounts payable, accrued expenses, product warranty, advance payments from customers and
long-term accrued expenses.

          (x) “Operating Income” means as to any Performance Period, the Company’s or a business
unit’s income from operations but excluding any unusual items.

          (y) “Option” means a stock option granted pursuant to the Plan.

          (z) “Option Agreement” means a written or electronic agreement between the Company and
a Participant evidencing the terms and conditions of an individual Option grant. The Option
Agreement is subject to the terms and conditions of the Plan.

          (aa) “Option Exchange Program” means a program whereby outstanding Options are
exchanged for Options with a lower exercise price.

          (bb) “Optioned Stock” means the Common Stock subject to an Award.

          (cc) “Optionee” means the holder of an outstanding Option or Restricted Stock granted
under the Plan.

          (dd) “Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code.

          (ee) “Participant” means the holder of an outstanding Award, which shall include an
Optionee.

          (ff) “Performance Goals” means the goal(s) (or combined goal(s)) determined by the
Administrator (in its discretion) to be applicable to a Participant with respect to an Award. As
determined by the Administrator, the Performance Goals applicable to an Award may provide for a
targeted level or levels of achievement using one or more of the following measures: (a) Cash
Position, (b) Earnings Per Share, (c) Net Income, (d) Operating Cash Flow, (e) Operating Income,
(f) Return on Assets, (g) Return on Equity, (h) Return on Sales, (i) Revenue, and (j) Total
Stockholder Return. The Performance Goals may differ from Participant to Participant and from
Award to Award. Prior to the Determination Date, the Plan Administrator shall determine whether
any significant element(s) shall be included in or excluded from the calculation of any Performance Goal with respect to any Participant. For example (but not by way of limitation), the
Administrator may determine that the measures for one or more Performance Goals shall be based upon
the Company’s pro-forma results and/or results in accordance with generally accepted accounting
principles.

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          (gg) “Performance Period” means any Fiscal Year of the Company or such other period as
determined by the Administrator in its sole discretion.

          (a) “Performance Share” means an Award granted to a Participant pursuant to Section 9.

          (hh) “Performance Unit” means an Award granted to a Participant pursuant to Section 9.

          (ii) “Period of Restriction” means the period during which the transfer of Shares of
Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial
risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of
target levels of performance, or the occurrence of other events as determined by the Administrator.

          (jj) “Plan” means this 1997 Stock Plan, as amended and restated.

          (kk) “Restricted Stock” means Shares issued pursuant to a Restricted Stock award under
Section 7 of the Plan, or issued pursuant to the early exercise of an Option.

          (ll) “Return on Assets” means as to any Performance Period, the percentage equal to
the Company’s or a business unit’s Operating Income before incentive compensation, divided by
average net Company or business unit, as applicable, assets.

          (mm) “Return on Equity” means as to any Performance Period, the percentage equal to
the Company’s Net Income divided by average stockholder’s equity.

          (nn) “Return on Sales” means as to any Performance Period, the percentage equal to the
Company’s or a business unit’s Operating Income before incentive compensation, divided by the
Company’s or the business unit’s, as applicable, revenue.

          (oo) “Revenue” means as to any Performance Period, the Company’s or business unit’s
net sales.

          (pp) “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3,
as in effect when discretion is being exercised with respect to the Plan.

          (qq)“Section 16(b) “ means Section 16(b) of the Exchange Act.

          (rr)“Service Provider” means an Employee, Director or Consultant.

          (ss) “Share” means a share of the Common Stock, as adjusted in accordance with Section
12 below.

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          (tt) “Stock Appreciation Right” or “SAR” means an Award, granted alone or in
connection with an Option, that pursuant to Section 8 is designated as an SAR.

          (uu) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing,
as defined in Section 424(f) of the Code.

          (vv) “Total Stockholder Return” means as to any Performance Period, the total return
(change in Share price plus reinvestment of any dividends) of a Share.

	 	3.	 	Stock Subject to the Plan.

          (a) Number of Shares. Subject to the provisions of Section 12 of the Plan, the
maximum aggregate number of Shares which may be subject to Awards and issued under the Plan is
2,200,000 Shares, plus an annual increase to be added on January 1 of each year, beginning in 2001,
equal to the lesser of (i) 1,224,000 shares, (ii), 5% of the outstanding shares on such date or
(iii) a lesser amount determined by the Board. The Shares may be authorized but unissued, or
reacquired Common Stock. Shares will not be deemed to have been issued pursuant to the Plan with
respect to any portion of an Award that is settled in cash. Upon payment in Shares pursuant to the
exercise of an SAR, the number of Shares available for issuance under the Plan will be reduced only
by the number of Shares actually issued in such payment. If the exercise price of an Award is paid
by tender to the Company, or attestation to the ownership, of Shares owned by the Participant, the
number of Shares available for issuance under the Plan will be reduced by the gross number of
Shares for which the Award is exercised.

          (b) Share Usage.

                    (i) If an Award expires or becomes unexercisable without having been exercised in full, or is
surrendered pursuant to an Option Exchange Program, the unpurchased Shares which were subject
thereto shall become available for future grant or sale under the Plan (unless the Plan has
terminated). However, Shares that have actually been issued under the Plan, upon exercise of an
Award, shall not be returned to the Plan and shall not become available for future distribution
under the Plan, except that if unvested Shares of Restricted Stock are repurchased by the Company,
such Shares shall become available for future grant under the Plan.

                    (ii) Notwithstanding the foregoing and, subject to adjustment provided in Section 12, the
maximum number of Shares that may be issued upon the exercise of Incentive Stock Options shall
equal the aggregate Share number stated in Section 3(a), plus, to the extent allowable under
Section 422 of the Code, any Shares that become available for issuance under the Plan under
subsection (i) above.

	 	4.	 	Administration of the Plan.

          (a) Procedure.

                    (i) Multiple Administrative Bodies. Different Committees with respect to different
groups of Service Providers may administer the Plan.

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                    (ii) Section 162(m). To the extent that the Administrator determines it to be
desirable to qualify Awards granted hereunder as “performance-based compensation” within the
meaning of Section 162(m) of the Code, the Plan shall be administered by a Committee of two or more
“outside directors” within the meaning of Section 162(m) of the Code.

                    (iii) Rule 16b-3. To the extent desirable to qualify transactions hereunder as exempt
under Rule 16b-3, the transactions contemplated hereunder shall be structured to satisfy the
requirements for exemption under Rule 16b-3.

                    (iv) Other Administration. Other than as provided above, the Plan shall be
administered by the (A) Board or (B) a Committee appointed by the Board, which Committee shall be
constituted to comply with Applicable Laws.

          (b) Powers of the Administrator. Subject to the provisions of the Plan and, in the
case of a Committee, the specific duties delegated by the Board to such Committee, and subject to
the approval of any relevant authorities, the Administrator shall have the authority in its
discretion:

                    (i) to determine the Fair Market Value;

                    (ii) to select the Service Providers to whom Awards may from time to time be granted
hereunder;

                    (iii) to determine the number of Shares to be covered by each such Award granted hereunder;

                    (iv) to approve forms of agreement for use under the Plan;

                    (v) to determine the terms and conditions, of any Award granted hereunder. Such terms and
conditions include, but are not limited to, the exercise price, the time or times when Awards may
be exercised (which may be based on performance criteria), any vesting acceleration or waiver of
forfeiture restrictions, and any restriction or limitation regarding any Award or the Shares
relating thereto, based in each case on such factors as the Administrator, in its sole discretion,
shall determine;

                    (vi) to determine whether and under what circumstances an Option may be settled in cash under
subsection 6(e) instead of Common Stock;

                    (vii) to reduce the exercise price of any Award to the then current Fair Market Value if the
Fair Market Value of the Common Stock covered by such Award has declined since the date the Award
was granted;

                    (viii) to initiate an Option Exchange Program;

                    (ix) to prescribe, amend and rescind rules and regulations relating to the Plan, including
rules and regulations relating to sub-plans established for the purpose of satisfying applicable
foreign laws;

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                    (x) to allow Participants to satisfy withholding tax obligations by electing to have the
Company withhold from the Shares to be issued upon exercise of an Award that number of Shares
having a Fair Market Value equal to the minimum amount required to be withheld. The Fair Market
Value of the Shares to be withheld shall be determined on the date that the amount of tax to be
withheld is to be determined. All elections by Participants to have Shares withheld for this
purpose shall be made in such form and under such conditions as the Administrator may deem
necessary or advisable; and

                    (xi) to construe and interpret the terms of the Plan and awards granted pursuant to the Plan.

          (c) Effect of Administrator’s Decision. All decisions, determinations and
interpretations of the Administrator shall be final and binding on all Participants.

     5.   Eligibility. Nonstatutory Stock Options, Restricted Stock, Stock Appreciation
Rights, Performance Shares, and Performance Units may be granted to Service Providers. Incentive
Stock Options may be granted only to Employees.

	 	6.	 	Stock Options.

          (a) Limitations.

                    (i) Each Option shall be designated in the Award Agreement as either an Incentive Stock Option
or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the
aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Participant during any calendar year (under all plans of the
Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated as
Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive Stock Options shall be
taken into account in the order in which they were granted. The Fair Market Value of the Shares
shall be determined as of the time the Option with respect to such Shares is granted.

                    (ii) The following limitations shall apply to grants of Options and Stock Appreciation Rights:

                         (A) No Service Provider shall be granted, in any Fiscal Year of the Company, Options or SARs
to purchase more than 1,500,000 Shares.

                         (B) In connection with his or her initial service, a Service Provider may be granted Options
or SARs to purchase up to an additional 1,500,000 Shares which shall not count against the limit
set forth in subsection (A) above.

                         (C) The foregoing limitations shall be adjusted proportionately in connection with any change
in the Company’s capitalization as described in Section 12.

                         (D) If an Option is cancelled in the same Fiscal Year of the Company in which it was granted
(other than in connection with a transaction described in Section 12), the cancelled Option will be
counted against the limits set forth in subsections (A) and (B) above. For this purpose, if the exercise price of an Option is reduced, the transaction
will be treated as a cancellation of the Option and the grant of a new Option.

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          (b) Term of Option. The term of each Option shall be stated in the Option Agreement;
provided, however, that the term shall be no more than ten (10) years from the date of grant
thereof. In the case of an Incentive Stock Option granted to a Participant who, at the time the
Option is granted, owns stock representing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Option
shall be five (5) years from the date of grant or such shorter term as may be provided in the
Option Agreement.

          (c) Option Exercise Price and Consideration.

                    (i) The per Share exercise price for the Shares to be issued upon exercise of an Option shall
be such price as is determined by the Administrator, but shall be subject to the following:

                         (A) In the case of an Incentive Stock Option

                              a) granted to an Employee who, at the time of grant of such Option, owns stock representing
more than ten percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the exercise price shall be no less than 110% of the Fair Market Value per
Share on the date of grant.

                              b) granted to any other Employee, the per Share exercise price shall be no less than 100% of
the Fair Market Value per Share on the date of grant.

                         (B) In the case of a Nonstatutory Stock Option, the per Share exercise price shall be
determined by the Administrator. In the case of a Nonstatutory Stock Option intended to qualify as
“performance-based compensation” within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.

                         (C) Notwithstanding the foregoing, Incentive Stock Options may be granted with a per Share
exercise price other than as required above pursuant to a merger or other corporate transaction.

                    (ii) The consideration to be paid for the Shares to be issued upon exercise of an Option,
including the method of payment, shall be determined by the Administrator (and, in the case of an
Incentive Stock Option, shall be determined at the time of grant). Such consideration may consist
of (1) cash, (2) check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired from the Company, have been owned by the Participant and not subject to a substantial risk
of forfeiture for more than six months on the date of surrender, and (y) have a Fair Market Value
on the date of surrender equal to the aggregate exercise price of the Shares as to which such
Option shall be exercised, (5) consideration received by the Company under a cashless exercise
program implemented by the Company in connection with the Plan, or (6) any combination of the
foregoing methods of payment. In making its determination as to the type of consideration to
accept, the Administrator shall consider if acceptance of such consideration may be reasonably
expected to benefit the Company.

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          (d) Exercise of Option.

                    (i) Procedure for Exercise; Rights as a Shareholder. Any Option granted hereunder
shall be exercisable according to the terms hereof at such times and under such conditions as
determined by the Administrator and set forth in the Option Agreement. An Option may not be
exercised for a fraction of a Share.

                    An Option shall be deemed exercised when the Company receives: (i) written or electronic
notice of exercise (in accordance with the Option Agreement) from the person entitled to exercise
the Option, and (ii) full payment for the Shares with respect to which the Option is exercised
(together with applicable withholding taxes). Full payment may consist of any consideration and
method of payment authorized by the Administrator and permitted by the Option Agreement and the
Plan. Shares issued upon exercise of an Option shall be issued in the name of the Participant or,
if requested by the Participant, in the name of the Participant and his or her spouse. Until the
Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends or any other
rights as a shareholder shall exist with respect to the Shares, notwithstanding the exercise of the
Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which the record date is
prior to the date the Shares are issued, except as provided in Section 12 of the Plan.

                    Exercise of an Option in any manner shall result in a decrease in the number of Shares
thereafter available, both for purposes of the Plan and for sale under the Option, by the number of
Shares as to which the Option is exercised.

                    (ii) Termination of Relationship as a Service Provider. If a Participant ceases to be
a Service Provider, other than upon the Participant’s death or Disability, such Participant may
exercise his or her Option within such period of time as is specified in the Option Agreement (of
at least thirty (30) days) to the extent that the Option is vested on the date of termination (but
in no event later than the expiration of the term of the Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain
exercisable for three (3) months following the Participant’s termination. If, on the date of
termination, the Participant is not vested as to his or her entire Option, the Shares covered by
the unvested portion of the Option shall revert to the Plan. If, after termination, the
Participant does not exercise his or her Option within the time specified by the Administrator, the
Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

                    (iii) Disability of Participant. If a Participant ceases to be a Service Provider as
a result of the Participant’s Disability, the Participant may exercise his or her Option within
such period of time as is specified in the Option Agreement to the extent the Option is vested on
the date of termination (but in no event later than the expiration of the term of such Option as
set forth in the Option Agreement). In the absence of a specified time in the Option Agreement,
the Option shall remain exercisable for twelve (12) months following the Participant’s termination.
If, on the date of termination, the Participant is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan. If, after
termination, the Participant does not exercise his or her Option within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

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                    (iv) Death of Participant. If a Participant dies while a Service Provider, the Option
may be exercised within such period of time as is specified in the Option Agreement (but in no
event later than the expiration of the term of such Option as set forth in the Option Agreement),
by the Participant’s estate or by a person who acquires the right to exercise the Option by bequest
or inheritance, but only to the extent that the Option is vested on the date of death. In the
absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve
(12) months following the Participant’s termination. If, at the time of death, the Participant is
not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option
shall immediately revert to the Plan. The Option may be exercised by the executor or administrator
of the Participant’s estate or, if none, by the person(s) entitled to exercise the Option under the
Participant’s will or the laws of descent or distribution. If the Option is not so exercised
within the time specified herein, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan.

          (e) Buyout Provisions. The Administrator may at any time offer to buy out for a
payment in cash or Shares, an Option previously granted, based on such terms and conditions as the
Administrator shall establish and communicate to the Participant at the time that such offer is
made.

	 	7.	 	Restricted Stock.

          (a) Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the
Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service
Providers in such amounts as the Administrator, in its sole discretion, will determine.

          (b) Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced by
an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and
such other terms and conditions as the Administrator, in its sole discretion, will determine.
Notwithstanding the foregoing, during any Fiscal Year no Participant will receive more than an
aggregate of 500,000 Shares of Restricted Stock; provided, however, that in connection with a
Participant’s initial service as an Employee, an Employee may be granted an aggregate of up to an
additional 500,000 Shares of Restricted Stock. Unless the Administrator determines otherwise,
Shares of Restricted Stock will be held by the Company as escrow agent until the restrictions on
such Shares have lapsed.

          (c) Transferability. Except as provided in this Section 7, Shares of Restricted Stock
may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the
end of the applicable Period of Restriction.

          (d) Other Provisions. The Award Agreement shall contain such other terms, provisions
and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole
discretion.

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                    (i) General Restrictions. The Administrator may set restrictions based upon the
achievement of specific performance objectives (Company-wide, divisional, or individual),
applicable federal or state securities laws, or any other basis determined by the Administrator in
its discretion.

                    (ii) Section 162(m) Performance Restrictions. For purposes of qualifying an Award of
Restricted Stock as “performance-based compensation” under Section 162(m) of the Code, the
Administrator, in its discretion, may set restrictions based upon the achievement of Performance
Goals. The Performance Goals will be set by the Administrator on or before the latest date
permissible to enable the Award of Restricted Stock to qualify as “performance-based compensation”
under Section 162(m) of the Code. In granting Awards of Restricted Stock which are intended to
qualify under Section 162(m) of the Code, the Administrator will follow any procedures determined
by it from time to time to be necessary or appropriate to ensure qualification of the Award of
Restricted Stock under Section 162(m) of the Code (e.g., in determining the Performance Goals).

          (e) Removal of Restrictions. Except as otherwise provided in this Section 7, Shares
of Restricted Stock covered by each Restricted Stock grant made under the Plan will be released
from escrow as soon as practicable after the last day of the Period of Restriction. The
Administrator, in its discretion, may accelerate the time at which any restrictions will lapse or
be removed.

          (f) Voting Rights. During the Period of Restriction, Service Providers holding Shares
of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares,
unless the Administrator determines otherwise.

          (g) Dividends and Other Distributions. During the Period of Restriction, Service
Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other
distributions paid with respect to such Shares unless otherwise provided in the Award Agreement.
If any such dividends or distributions are paid in Shares, the Shares will be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect
to which they were paid.

          (h) Return of Restricted Stock to Company. On the date set forth in the Award
Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company
and again will become available for grant under the Plan.

	 	8.	 	Stock Appreciation Rights.

          (a) Grant of SARs. Subject to the terms and conditions of the Plan, an SAR may be
granted to Service Providers at any time and from time to time as will be determined by the
Administrator, in its sole discretion.

          (b) Number of Shares. Subject to Section 6(a)(ii), the Administrator will have
complete discretion to determine the number of SARs granted to any Service Provider.

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          (c) Exercise Price and Other Terms. The Administrator, subject to the provisions of
the Plan, will have complete discretion to determine the terms and conditions of SARs granted under
the Plan.

          (d) SAR Agreement. Each SAR grant will be evidenced by an Award Agreement that will
specify the exercise price, the term of the SAR, the conditions of exercise, and such other terms
and conditions as the Administrator, in its sole discretion, will determine.

          (e) Expiration of SARs. An SAR granted under the Plan will expire upon the date
determined by the Administrator, in its sole discretion, and set forth in the Award Agreement.
Notwithstanding the foregoing, the rules of Section 6(d) also will apply to SARs.

          (f) Payment of SAR Amount. Upon exercise of an SAR, a Participant will be entitled to
receive payment from the Company in an amount determined by multiplying:

                    (i) The difference between the Fair Market Value of a Share on the date of exercise over the
exercise price; times

                    (ii) The number of Shares with respect to which the SAR is exercised.

               At the discretion of the Administrator, the payment upon SAR exercise may be in cash, in
Shares of equivalent value, or in some combination thereof.

	 	9.	 	Performance Units and Performance Shares.

          (a) Grant of Performance Units/Shares. Performance Units and Performance Shares may be
granted to Service Providers at any time and from time to time, as will be determined by the
Administrator, in its sole discretion. The Administrator will have complete discretion in
determining the number of Performance Units and Performance Shares granted to each Participant,
provided that during any Fiscal Year, (a) no Participant will receive Performance Units having an
initial value greater than $1,000,000 and (b) no Participant will receive more than 500,000
Performance Shares. Notwithstanding the foregoing limitation, in connection with a Participant’s
initial service as an Employee, an Employee may be granted up to an additional 500,000 Performance
Shares.

          (b) Value of Performance Units/Shares. Each Performance Unit will have an initial
value that is established by the Administrator on or before the date of grant. Each Performance
Share will have an initial value equal to the Fair Market Value of a Share on the date of grant.

          (c) Performance Objectives and Other Terms. The Administrator will set performance
objectives (including, without limitation, continued service) in its discretion which, depending on
the extent to which they are met, will determine the number or value of Performance Units/Shares
that will be paid out to the Participants. The time period during which the performance objectives
must be met will be called the “Performance Period.” Each Award of Performance Units/Shares will be
evidenced by an Award Agreement that will specify the Performance Period, and such other terms and
conditions as the Administrator, in its sole discretion, will determine.

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                    (i) General Performance Objectives. The Administrator may set performance objectives
based upon the achievement of Company-wide, divisional, or individual goals, applicable federal or
state securities laws, or any other basis determined by the Administrator in its discretion.

                    (ii) Section 162(m) Performance Objectives. For purposes of qualifying grants of
Performance Units/Shares as “performance-based compensation” under Section 162(m) of the Code, the
Administrator, in its discretion, may determine that the performance objectives applicable to
Performance Units/Shares will be based on the achievement of Performance Goals. The Performance
Goals will be set by the Administrator on or before the latest date permissible to enable the
Performance Units/Shares to qualify as “performance-based compensation” under Section 162(m) of the
Code. In granting Performance Units/Shares which are intended to qualify under Section 162(m) of
the Code, the Administrator will follow any procedures determined by it from time to time to be
necessary or appropriate to ensure qualification of the Performance Units/Shares under Section
162(m) of the Code (e.g., in determining the Performance Goals).

          (d) Earning of Performance Units/Shares. After the applicable Performance Period has
ended, the holder of Performance Units/Shares will be entitled to receive a payout of the number of
Performance Units/Shares earned by the Participant over the Performance Period, to be determined as
a function of the extent to which the corresponding performance objectives or other vesting
provisions have been achieved. After the grant of a Performance Unit/Share, the Administrator, in
its sole discretion, may reduce or waive any performance objectives or other vesting provisions for
such Performance Unit/Share.

          (e) Form and Timing of Payment of Performance Units/Shares. Payment of earned
Performance Units/Shares will be made as soon as practicable after the expiration of the applicable
Performance Period. The Administrator, in its sole discretion, may pay earned Performance
Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the
value of the earned Performance Units/Shares at the close of the applicable Performance Period) or
in a combination thereof.

          (f) Cancellation of Performance Units/Shares. On the date set forth in the Award
Agreement, all unearned or unvested Performance Units/Shares will be forfeited to the Company, and
again will be available for grant under the Plan.

     10.   Non-Transferability of Awards. Unless determined otherwise by the Administrator,
an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be exercised, during
the lifetime of the Participant, only by the Participant. If the Administrator makes an Award
transferable, such Award shall contain such additional terms and conditions as the Administrator
deems appropriate.

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     11.   Leaves of Absence. Unless the Administrator provides otherwise, vesting of Awards
granted hereunder will be suspended during any unpaid leave of absence. A Service Provider will not
cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii)
transfers between locations of the Company or between the Company, its Parent, or any Subsidiary. For purposes of Incentive Stock Options, no such leave may exceed ninety (90)
days, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If
reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed,
then three (3) months following the 91st day of such leave any Incentive Stock Option held by the
Participant will cease to be treated as an Incentive Stock Option and will be treated for tax
purposes as a Nonstatutory Stock Option.

	 	12.	 	Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset Sale.

          (a) Changes in Capitalization. Subject to any required action by the stockholders of
the Company, the number of shares of Common Stock that have been authorized for issuance under the
Plan but as to which no Awards have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Award, the number of Shares that may be added annually to the Plan
pursuant to Section 3(a), the number of shares of Common Stock as well as the price per share of
Common Stock covered by each such outstanding Award, and the numerical Share limits in Sections 3,
6(a), 7(a), 8(b), and 9(a), shall be proportionately adjusted for any change in, or increase or
decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock
split, stock dividend, spin-off, combination or reclassification of the Common Stock, or any other
change in, or increase or decrease in the number of issued shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of any convertible
securities of the Company shall not be deemed to have been “effected without receipt of
consideration.” Such adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number
or price of shares of Common Stock subject to an Award.

          (b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Participant as soon as practicable
prior to the effective date of such proposed transaction. The Administrator in its discretion may
provide for a Participant to have the right to exercise his or her Award until fifteen (15) days
prior to such transaction as to all of the Optioned Stock covered thereby, including Shares as to
which the Award would not otherwise be exercisable. In addition, the Administrator may provide
that all restrictions on Restricted Stock shall lapse, provided the proposed dissolution or
liquidation takes place at the time and in the manner contemplated. To the extent it has not been
previously exercised, an Award will terminate immediately prior to the consummation of such
proposed action.

          (c) Merger or Asset Sale. In the event of a merger of the Company with or into
another corporation, or the sale of substantially all of the assets of the Company, each
outstanding Award shall be assumed or an equivalent award substituted by the successor corporation
or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation
refuses to assume or substitute for the Award, the Participant shall fully vest in and have the
right to exercise his or her Option or Stock Appreciation Right as to all of the Optioned Stock,
including Shares as to which it would not otherwise be vested or exercisable, and all restrictions
on Restricted Stock and all performance goals or other vesting criteria with respect to Performance
Shares and Performance Units will be as determined by the Board. In addition, if an Option or
Stock Appreciation Right is not

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assumed or substituted for in the event of a merger or sale of assets, the Administrator shall
notify the Participant in writing or electronically that the Option or Stock Appreciation Right
shall be fully vested and exercisable for a period of fifteen (15) days from the date of such
notice, and the Option or Stock Appreciation Right shall terminate upon the expiration of such
period. For the purposes of this paragraph, an Award shall be considered assumed if, following the
merger or sale of assets, the Award confers the right to purchase or receive, for each Share
subject to the Award immediately prior to the merger or sale of assets (and in the case of
Performance Units, for each implied share determined by dividing the value of the Performance Unit
by the per Share consideration received by holders of Common Stock in the merger or asset sale), an
amount of consideration (whether stock, cash, or other securities or property) equal to the fair
market value of the consideration received in the merger or sale of assets by holders of Common
Stock for each Share held on the effective date of the transaction (and if holders were offered a
choice of consideration, the type of consideration chosen by the holders of a majority of the
outstanding Shares); provided, however, that if such consideration received in the merger or sale
of assets is not solely common stock of the successor corporation or its Parent, the Administrator
may, with the consent of the successor corporation, provide for the consideration to be received
upon the exercise of the Option or Stock Appreciation Right, or upon the payout of a Performance
Share or Performance Unit, for each Share subject to such Award (or in the case of Performance
Units, the number of implied shares determined by dividing the value of the Performance Units by
the per Share consideration received by holders of Common Stock in the merger or asset sale), to be
solely common stock of the successor corporation or its Parent equal in fair market value to the
per Share consideration received by holders of Common Stock in the merger or sale of assets.

          Notwithstanding anything in this Section 12(c) to the contrary, an Award that vests, is earned
or paid-out upon the satisfaction of one or more performance goals will not be considered assumed
if the Company or its successor modifies any of such performance goals without the Participant’s
consent; provided, however, a modification to such performance goals only to reflect the successor
corporation’s post-merger or post-asset sale corporate structure will not be deemed to invalidate
an otherwise valid Award assumption.

     13.   No Effect on Employment or Service. Neither the Plan nor any Award shall confer
upon a Participant any right with respect to continuing the Participant’s relationship as a Service
Provider with the Company, nor shall they interfere in any way with the Participant’s right or the
Company’s right to terminate such relationship at any time, with or without cause.

     14.   Date of Grant. The date of grant of an Award shall, for all purposes, be the date
on which the Administrator makes the determination granting such Award, or such other date as is
determined by the Administrator. Notice of the determination shall be given to each Service
Provider to whom an Award is so granted within a reasonable time after the date of such grant.

     15.   Term of Plan. Subject to Section 19 of the Plan, the Plan shall become effective
upon its original adoption by the Board. It shall continue in effect for a term of ten (10) years
unless terminated earlier under Section 16 of the Plan.

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	 	16.	 	Amendment and Termination of the Plan.

          (a) Amendment and Termination. The Board may at any time amend, alter, suspend or
terminate the Plan.

          (b) Shareholder Approval. The Board shall obtain shareholder approval of any Plan
amendment to the extent necessary and desirable to comply with Applicable Laws.

          (c) Effect of Amendment or Termination. No amendment, alteration, suspension or
termination of the Plan shall impair the rights of any Participant, unless mutually agreed
otherwise between the Participant and the Administrator, which agreement must be in writing and
signed by the Participant and the Company. Termination of the Plan shall not affect the
Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards
granted under the Plan prior to the date of such termination.

	 	17.	 	Conditions Upon Issuance of Shares.

          (a) Legal Compliance. Shares shall not be issued pursuant to the exercise of an Award
unless the exercise of such Award and the issuance and delivery of such Shares shall comply with
Applicable Laws and shall be further subject to the approval of counsel for the Company with
respect to such compliance.

          (b) Investment Representations. As a condition to the exercise of an Award, the
Administrator may require the person exercising such Award to represent and warrant at the time of
any such exercise that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.

          (c) Inability to Obtain Authority. The inability of the Company to obtain authority
from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of
any liability in respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

     18.   Reservation of Shares. The Company, during the term of this Plan, shall at all
times reserve and keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.

     19.   Shareholder Approval. The Plan shall be subject to approval by the shareholders
of the Company within twelve (12) months after the date the Plan is adopted. Such shareholder
approval shall be obtained in the degree and manner required under Applicable Laws.

- 16 -

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