Document:

Exhibit
4.1

TRIQUINT SEMICONDUCTOR,
INC.

1996 STOCK INCENTIVE
PROGRAM

(AS
AMENDED EFFECTIVE FEBRUARY 2003)

1.             Purposes
of the Program.  The purposes of
this Stock Incentive Program are to attract and retain the best available
personnel for positions of substantial responsibility, to provide additional
incentive to the Employees, Consultants and certain Outside Directors of the
Company and to promote the success of the Company’s business.

Options granted hereunder may be either Incentive Stock Options or Nonstatutory
Stock Options, at the discretion of the Board and as reflected in the terms of
the written option agreement.  The
Program also provides for automatic grants of Nonstatutory Stock Options to
Outside Directors who are neither representatives nor employees or stockholders
owning more than one percent (1%) of the outstanding shares of the Company.

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

(a)           “Administrator”
shall mean the Board or any of its Committees as shall be administering the
Program, in accordance with Section 4 of the Program.

(b)           “Applicable
Laws” means the requirements relating to the administration of stock option
plans 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 Options or Stock Purchase Rights are, or will be, granted under the
Program.

(c)           “Board”
shall mean the Board of Directors of the Company.

(d)           “Code”
shall mean the Internal Revenue Code of 1986, as amended.

(e)           “Common
Stock” shall mean the Common Stock of the Company.

(f)            “Company”
shall mean TriQuint Semiconductor, Inc., a Delaware corporation.

(g)           “Committee”
shall mean a Committee appointed by the Board of Directors in accordance with
Section 4 of the Program.

(h)           “Consultant”
shall mean any person who is engaged by the Company or any Parent or Subsidiary
to render consulting services and is compensated for such consulting services;
provided that the term Consultant shall not include directors who are not
compensated for their services; or are paid only a director’s fee by the
Company.

(i)            “Director”
shall mean a member of the Board.

 

 

(j)            “Continuous
Status as an Employee, Consultant or Outside Director” shall mean the absence
of any interruption or termination of service as an Employee, Consultant or
Outside Director.  Continuous Status as
an Employee, Consultant or Outside Director shall not be considered interrupted
in the case of sick leave, military leave, or any other leave of absence
approved by the Administrator; provided that such leave is for a period of not
more than 90 days or reemployment upon the expiration of such leave is
guaranteed by contract or statute.

(k)           “Employee”
shall mean any person, including officers and directors, employed by the
Company or any Parent or Subsidiary of the Company.  The payment of a director’s fee by the Company shall not be
sufficient to constitute “employment” by the Company.

(l)            “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.

(m)          “Incentive
Stock Option” shall mean an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code and the regulations promulgated
thereunder.

(n)           “Nonstatutory
Stock Option” shall mean an Option not intended to qualify as an Incentive
Stock Option.

(o)           “Officer”
shall mean 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.

(p)           “Option”
shall mean a stock option granted pursuant to the Program.

(q)           “Optioned
Stock” shall mean the Common Stock subject to an Option.

(r)            “Optionee”
shall mean an Employee, Consultant or Outside Director who holds an outstanding
Option.

(s)           “Outside
Director” shall mean a member of the Board of Directors of the Company who is
not an Employee.

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

(u)           “Program”
shall mean this 1996 Stock Incentive Program.

(v)           “Rule
16b-3” shall mean 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 Program.

(w)          “Share”
shall mean a share of the Common Stock, as adjusted in accordance with
Section 10 of the Program.

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

 

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3.             Stock
Subject to the Program.  Subject to
the provisions of Section 10 of the Program, the maximum aggregate number
of shares under the Program is 31,050,000 shares of Common Stock.  The Shares may be authorized, but unissued,
or reacquired Common Stock.

If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were
subject thereto shall, unless the Program shall have been terminated, become
available for future grant under the Program. 
Notwithstanding the above, however, if Shares are issued upon exercise
of an Option and later repurchased by the Company, such Shares shall not become
available for future grant or sale under the Program.

4.             Administration
of the Program.

(a)           Procedure.

(i)    Multiple
Administrative Bodies.  The Program
may be administered by different Committees with respect to different groups of
Service Providers.

(ii)   Section 162(m).  To the extent that the Administrator
determines it to be desirable to qualify Options granted hereunder as
“performance-based compensation” within the meaning of Section 162(m) of
the Code, the Program 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 Program
shall be administered by (A) the Board or (B) a Committee, which
committee shall be constituted to satisfy Applicable Laws.

(b)           Power
of the Administrator.  Subject to
the provisions of the Program, the Administrator shall have the authority, in
its discretion: (i) to grant Incentive Stock Options or Nonstatutory Stock
Options; (ii) to determine, upon review of relevant information and in
accordance with Section 7 of the Program, the fair market value of the
Common Stock; (iii) to determine the exercise price per share of Options
to be granted, which exercise price shall be determined in accordance with
Section 7 of the Program; (iv) to determine the Employees or
Consultants to whom, and the time or times at which, Options shall be granted
and the number of shares to be represented by each Option (except with respect
to automatic Option grants made to certain Outside Directors); (v) to
interpret the Program; (vi) to prescribe, amend and rescind rules and
regulations relating to the Program; (vii) to determine the terms and
provisions of each Option granted (which need not be identical) and, with the
consent of the holder thereof, modify or amend each Option; (viii) to
authorize any person to execute on behalf of the Company any instrument
required to effectuate the grant of an Option previously granted by the
Administrator; (ix) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option that number of Shares having a Fair Market
Value equal to the amount required to be withheld; (x) to reduce the
exercise price of any Option to the then current Fair Market Value if the Fair
Market Value of the Common Stock covered by such Option shall have declined
since the date the Option was granted; provided, however, that
the 

 

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Administrator
must seek the prior consent of the Board of Directors and stockholders of the
Company to effect such action; and (xi) to make all other determinations
deemed necessary or advisable for the administration of the Program.  However, with respect to Options granted to
certain Outside Directors pursuant to Section 8(b)(ii) hereof, the
Administrator shall exercise no discretion and such awards shall be
administered solely according to their terms.

(c)           Effect
of Administrator’s Decision.  All
decisions, determinations and interpretations of the Administrator shall be
final and binding on all Optionees and any other holders of any Options granted
under the Program.

5.             Eligibility.

(a)           Options
may be granted to Employees and Consultants; Options may also be granted to
Outside Directors who are neither employees nor representatives of stockholders
owning more than one percent (1%) of the outstanding shares of the
Company.  However, (i) Incentive
Stock Options may be granted only to Employees, and (ii) Options may only
be granted to Outside Directors who are neither employees nor representatives
of stockholders owning more than one percent (1%) of the outstanding shares of
the Company in accordance with the provisions of
Section 8(b)(ii) hereof.  An
Employee, Consultant or Outside Director who has been granted an Option may, if
he is otherwise eligible, be granted an additional Option or Options.

(b)           To
the extent that the aggregate fair market value of Shares subject to an
Optionee’s incentive stock options granted by the Company, any Parent or
Subsidiary, which become exercisable for the first time during any calendar
year (under all plans or programs of the Company or any Parent or Subsidiary)
exceeds $100,000, such excess Options shall be treated as Nonstatutory Stock
Options.  For purposes of this Section 5(b),
incentive stock options shall be taken into account in the order in which they
were granted, and the fair market value of the Shares shall be determined as of
the time of grant.

(c)           Neither
the Program nor any Option shall confer upon any Optionee any right with
respect to continuation of employment or consulting relationship with the
Company, nor shall it interfere in any way with the Optionee’s right or the
Company’s right to terminate such employment or consulting relationship at any
time with or without cause.

(d)           The
following limitations shall apply to grants of Options under the Program
(defined below):

(i)    The
President of the Company shall not be granted, in any fiscal year of the
Company, options to purchase more than 1,500,000 Shares, and no other Employee
shall be granted, in any fiscal year of the Company, Options to purchase more
than 750,000 Shares.

(ii)   The
foregoing limitations shall be adjusted proportionately in connection with any
change in the Company’s capitalization as described in Section 10.

(iii)  If an
Option is canceled in the same fiscal year of the Company in which it was
granted (other than in connection with a transaction described in
Section 10), the canceled Option will be counted against the limit set
forth in Section (i) above. 
For this purpose, if 

 

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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.

(iv)  The
foregoing limitations set forth in this Section 5(d) are intended to
satisfy the requirements applicable to Options intended to qualify as
“performance-based compensation” (within the meaning of Section 162(m) of
the Code).  In the event the
Administrator determines that such limitations are not required to qualify Options
as performance-based compensation, the Administrator may modify or eliminate
such limitations.

6.             Term
of Program.  The Program shall
become effective upon the earlier to occur of its adoption by the Board of
Directors or its approval by vote of the stockholders of the Company as
described in Section 16 of the Program. 
It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 12 of the Program.

7.             Exercise
Price and Consideration of Shares.

(a)           The
per Share exercise price for the Shares to be issued pursuant to exercise of a
Nonstatutory Stock Option shall be such price as is determined by the
Administrator, but in no event shall it be (i) less than 100% of the fair
market value per Share on the date of grant and (ii) in the case of an
Incentive Stock Option, not less than 100% of the fair market value per Share
on the date of grant.  In the case of an
Incentive Stock Option granted to an Employee who, at the time of grant of such
Incentive Stock 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 per Share exercise price shall be no less than 110% of the fair
market value per Share on the date of grant.

(b)           The
fair market value shall be determined by the Administrator; provided, however,
in the event that 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
trading day that is the time of determination (or if such time of determination
does not occur on a trading day, the last trading day prior to the time of
determination), as reported in THE WALL STREET JOURNAL or such other source as
the Administrator deems reliable; or in the event that the Common Stock is regularly
quoted by a recognized securities dealer but selling prices are not reported,
the fair market value of a Share of Common Stock shall be the mean between the
high bid and low asked prices for the Common Stock on the last market trading
day prior to the day of determination, as reported in THE WALL STREET JOURNAL
or such other source as the Administrator deems reliable.

(c)           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 Board and
may consist entirely of:

(i)    cash,

(ii)   check,

(iii)  promissory
note,

 

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(iv)  other
Shares of Common Stock which (i) either have been owned by the Optionee
for more than six (6) months on the date of surrender or were not acquired,
directly or indirectly, from the Company, and (ii) have a fair market
value on the date of surrender equal to the aggregate exercise price of the
Shares as to which said option shall be exercised,

(v)   delivery of
a properly executed exercise notice together with such other documentation as
the Administrator and the broker, if applicable, shall require to effect an
exercise of the Option and delivery to the Company of the sale or loan proceeds
required to pay the exercise price, or

(vi)  any
combination of such methods of payment, or such other consideration and method
of payment for the issuance of Shares to the extent permitted under
Sections 408 and 409 of the California General Corporation Law.

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.

However, with respect to Options granted to certain Outside Directors
pursuant to Section 8(b)(ii) hereof, the consideration to be paid for
the Shares to be issued upon exercise of an Option, including the method of
payment, shall consist entirely of:

(i)    cash,

(ii)   check,

(iii)  other Shares of Common Stock which
(i) either have been owned by the Optionee for more than six (6) months on
the date of surrender or were not acquired, directly or indirectly, from the
Company, and (ii) have a fair market value on the date of surrender equal
to the aggregate exercise price of the Shares as to which said option shall be
exercised,

(iv)  delivery of a properly executed exercise
notice together with such other documentation as the Administrator and the
broker, if applicable, shall require to effect an exercise of the Option and
delivery to the Company of the sale or loan proceeds required to pay the
exercise price, or

(v)   any combination of such methods of payment.

8.             Options.

(a)           Term
of Option.  The term of each Option
shall be ten (10) years from the date of grant thereof or such shorter term as
may be provided in the Incentive Stock Option Agreement in the form attached
hereto as Exhibit A.  The term of
each Option that is not an Incentive Stock Option shall be ten (10) years and
one (1) day from the date of grant thereof or such shorter term as may be
provided in the Nonstatutory Stock Option Agreement in the form attached hereto
as Exhibit B-1 or B-2.  However, in
the case of an Option granted to an Optionee who, at the time the Option is
granted, 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,
(a) if the Option is an Incentive Stock Option, the term of the Option
shall be five (5) years from the date of grant thereof or such 

 

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shorter
time as may be provided in the Incentive Stock Option Agreement, or (b) if
the Option is not an Incentive Stock Option, the term of the Option shall be
five (5) years and one (1) day from the date of grant thereof or such shorter
term as may be provided in the Nonstatutory Stock Option Agreement.  However, with respect to Options granted to
certain Outside Directors pursuant to Section 8(b)(ii) hereof the
term shall be as stated in such Section.

(b)           Exercise
of Option.

(i)    Procedure
for Exercise; Rights as a Stockholder. 
Any Option granted hereunder, except for Options granted to certain
Outside Directors in accordance with Section 8(b)(ii) below, shall be
exercisable at such times and under such conditions as determined by the
Administrator, including performance criteria with respect to the Company
and/or the Optionee, and shall be permissible under the terms of the Program.

An Option may not be exercised for a fraction of a Share.

An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company either by a signed writing or electronic
transmission in accordance with the terms of the Option by the person entitled
to exercise the Option and full payment for the Shares with respect to which
the Option is exercised has been received by the Company.  Full payment may, as authorized by the
Administrator, consist of any consideration and method of payment allowable
under Section 7(c) of the Program. 
Until the issuance (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company) of the
stock certificate evidencing such Shares, which issuance shall be made as soon
as is practicable, no right to vote or receive dividends or any other rights as
a stockholder shall exist with respect to the Optioned Stock, notwithstanding
the exercise of the Option.  The Company
shall issue (or cause to be issued) such stock certificate promptly upon exercise
of the Option.  No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 10 of
the Program.

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

(ii)   Automatic
Option Grants to Certain Outside Directors.  The provisions set forth in this Section 8(b)(ii) shall
not be amended more than once every six months, other than to comport with
changes in the Code, the Employee Retirement Income Security Act of 1974 as
amended, or the rules or regulations promulgated thereunder.  All grants of Options to Outside Directors
under this Program shall be automatic and non-discretionary and shall be made
strictly in accordance with the following provisions:

(A)          No
person shall have any discretion to select which Outside Directors shall be
granted Options or to determine the number of shares to be covered by Options
granted to Outside Directors; provided, however, that nothing in this Program
shall be construed to prevent an Outside Director from declining to receive an
Option under this Program.

(B)           On
the date of each annual meeting of the Company’s stockholders, each person who
is then an Outside Director (including any person who first becomes 

 

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an
Outside Director as of such date) and who is not a representative of
stockholders owning more than one percent (1%) of the outstanding shares of the
Company shall automatically receive an Option to purchase 17,500 Shares (the
“Complete Annual Grant”).

(C)           Each
Outside Director who is not a representative of stockholders owning more than
one percent (1%) of the outstanding shares of the Company and who first becomes
an Outside Director as of a date other than the date of an annual meeting of
the Company’s stockholders shall automatically receive, upon such date, an Option
(the “Partial Annual Grant” and collectively with the Complete Annual Grant,
the “Annual Grants”) to purchase that number of Shares obtained by multiplying
17,500 by a fraction, the numerator of which is the difference obtained by
subtracting from 12 the number of whole calendar months that have elapsed since
the date of the previous annual meeting of the Company’s stockholders and the
denominator of which is 12.

(D)          Upon
such person’s election or appointment as an Outside Director, each person who
becomes an Outside Director shall automatically receive an Option (the Initial
Grant”) to purchase 33,000 Shares; provided, however that an Inside Director
who ceases to be an Inside Director but who remains a Director shall not
receive such automatic grant.

(E)           Immediately
following the 1999 Annual Meeting of Stockholders upon the approval of a
related proposal at such meeting, each person who is then an Outside Director
(including any person who first becomes an Outside Director as of such date)
and who is not a representative of stockholders owning more than one percent
(1%) of the outstanding shares of the Company shall automatically receive an
Option to purchase 72,000 Shares (the “One-Time Grant”).

(F)           The
terms of an Option granted pursuant to this Section 8(b)(ii) shall be
as follows:

(1)           the
term of the Annual Grants shall be five (5) years and the term of the Initial
Grants and the One-Time Grants shall be 10 years;

(2)           except
as provided in Sections 8(b)(iii) and 8(b)(iv) of this Program,
the Option shall be exercisable only while the Outside Director remains a
director;

(3)           the
exercise price per share of Common Stock shall be 100% of the fair market value
on the date of grant of the Option, provided that, with respect to the Options
granted on the date on which the Company’s registration statement on Form S-1
(or any successor form thereof) is declared effective by the Securities and
Exchange Commission, the fair market value of the Common Stock shall be the
Price to Public as set forth in the final prospectus filed with the Securities
and Exchange Commission pursuant to Rule 424 under the Securities Act of
1933, as amended;

(4)           the
Annual Grants shall become exercisable in installments cumulatively with
respect to twenty-five percent (25%) of the Optioned Stock six months after the
date of grant and as to an additional twelve and one-half percent (12.5%) of
the Optioned Stock each calendar quarter thereafter, so that one hundred
percent (100%) of the Optioned 

 

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Stock
shall be exercisable two years after the date of grant; provided, however, that
in no event shall any Option be exercisable prior to obtaining stockholder
approval of the Program.

(5)           the
One-Time Grants and the Initial Grants shall become exercisable in installments
cumulatively with respect to twenty-eight percent (28%) of the Optioned Stock
one year after the date of grant and as to an additional two percent (2%) of
the Optioned Stock each calendar month thereafter, so that one hundred percent
(100%) of the Optioned Stock shall be exercisable four years after the date of
grant.

(iii)  Termination
of Status as an Employee, Consultant or Outside Director.  Unless otherwise provided by the
Administrator, in the event of termination of an Optionee’s Continuous Status
as an Employee, Consultant or Outside Director, such Optionee may, but only
within three (3) months (or, for Options not granted pursuant to
Section 8(b)(ii) hereof, for such other period of time, not exceeding
three (3) months in the case of an Incentive Stock Option or six (6) months in
the case of a Nonstatutory Stock Option, as is determined by the Administrator,
with such determination in the case of an Incentive Stock Option being made at
the time of grant of the Option) after the date of such termination (but in no
event later than the date of expiration of the term of such Option as set forth
in the Option Agreement), exercise his or her Option to the extent that the
Optionee was entitled to exercise it as of the date of such termination.  To the extent that the Optionee was not
entitled to exercise the Option at the date of such termination, or if the
Optionee does not exercise such Option (which the Optionee was entitled to
exercise) within the time specified herein, the Option shall terminate.

(iv)  Disability
of Optionee.  Notwithstanding the
provisions of Section 8(b)(iii) above, unless otherwise provided by
the Administrator, in the event of termination of an Optionee’s Continuous
Status as an Employee, Consultant or Outside Director as a result of his or her
total and permanent disability (as defined in Section 22(e)(3) of the
Code), the Optionee may, but only within six (6) months (or, for Options not
granted pursuant to Section 8(b)(ii) hereof, for such other period of
time not exceeding twelve (12) months as is determined by the Board, with such
determination in the case of an Incentive Stock Option being made at the time
of grant of the Option) from the date of such termination (but in no event
later than the date of expiration of the term of such Option as set forth in
the Option Agreement), exercise his or her Option to the extent the Optionee
was entitled to exercise it at the date of such termination.  To the extent that the Optionee was not
entitled to exercise the Option at the date of termination, or if the Optionee
does not exercise such Option (which the Optionee was entitled to exercise)
within the time specified herein, the Option shall terminate.

(v)   Death of
Optionee.  In the event of the death
of an Optionee:

(A)          during
the term of the Option, where the Optionee is at the time of his or her death
an Employee, Consultant or Outside Director of the Company and where such
Optionee shall have been in Continuous Status as an Employee, Consultant or
Outside Director since the date of grant of the Option, the Option may be
exercised, at any time within one (1) year following the date of death, by the
Optionee’s estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, to the extent that he and she was entitled to
exercise it at the date of death; or

 

9

 

(B)           within
three (3) months after the termination of Continuous Status as an Employee,
Consultant or Outside Director for any reason other than for cause or a
voluntary termination initiated by the Optionee, the Option may be exercised,
at any time within one (1) year following the date of death, by the Optionee’s
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance, but only to the extent of the right to exercise that had
accrued at the date of termination.

(vi)  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 Optionee at the time that such offer is
made; provided, however, that the Administrator shall not offer to buy out any
Options granted pursuant to Section 8(b)(ii) of the Program.

9.             Non-Transferability
of Options.  During the lifetime of
the Optionee, an Option shall be exercisable only by the Optionee or the
Optionee’s guardian, legal representative or permitted transferees.  Except as specified below, no Option shall
be assignable or transferable by the Optionee except by will or by the laws of
descent and distribution.  At the sole
discretion of the Administrator, and subject to such terms and conditions as
the Administrator deems advisable, the Administrator may allow, by means of a
writing to the Optionee, for all or part of a vested Nonstatutory Stock Option
to be assigned or transferred, including by means of sale, during an Optionee’s
lifetime to a member of the Optionee’s immediate family or to a trust, LLC or partnership
for the benefit of any one or more members of such Optionee’s immediate
family.  “Immediate family” as used
herein means the spouse, lineal descendants, father, mother, brothers and
sisters of the Optionee.  In such case,
the transferee shall receive and hold the Option subject to the provisions of
this Section 9, and there shall be no further assignation or transfer of the
Option.  The terms of Options granted
hereunder shall be binding upon the transferees, purchasers, executors,
administrators, heirs, successors and assigns of the Optionee.

10.           Adjustments
Upon Changes In Capitalization or Merger. 
Subject to any required action by the stockholders of the Company, the
number of shares of Common Stock covered by each outstanding Option, and the
number of shares of Common Stock which have been authorized for issuance under
the Program but as to which no Options have yet been granted or which have been
returned to the Program upon cancellation or expiration of an Option, as well
as the price per share of Common Stock covered by each such outstanding Option,
shall be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse stock
split, stock dividend, combination or reclassification of the Common Stock, or
any other 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 Administrator, 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
Option.

 

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In the event of
the proposed dissolution or liquidation of the Company, the Board shall notify
the holder of an Option at least fifteen (15) days prior to such proposed
action.  To the extent it has not been
previously exercised, the Option will terminate immediately prior to the
consummation of such proposed action.

In the event of a merger of the Company with or into another
corporation, or the sale of all or substantially all of the Company’s assets,
the Option shall be assumed or an equivalent option shall be substituted by
such successor corporation or a parent or subsidiary of such successor
corporation, unless the Board determines, in the exercise of its sole
discretion and in lieu of such assumption or substitution, that the Optionee
shall have the right to exercise the Option as to all of the Optioned Stock,
including as to Shares as to which the Option would not otherwise be
exercisable.  If the Board makes an
Option fully exercisable in lieu of assumption or substitution in the event of
a merger or sale of assets, the Board shall notify the Optionee that the Option
shall be fully exercisable for a period of thirty (30) days from the date of
such notice, and the Option will terminate upon the expiration of such
period.  Provided, however, that
notwithstanding any other provision of this Program, Options granted pursuant
to Section 8(b)(ii) hereof shall, in the event of a merger of the
Company with or into another corporation or the sale of all or substantially
all of the Company’s assets, be assumed or an equivalent option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation; provided, further, however, that in the event the
successor corporation or a parent or subsidiary of such successor corporation
refuses to so assume or substitute such options, such options shall become
fully vested and exercisable including as to Shares as to which such options
would not otherwise be exercisable.  For
the purposes of this paragraph, the Option shall be considered assumed if,
following the merger or asset sale, the option confers the right to purchase,
for each Share of Optioned Stock subject to the Option immediately prior to the
merger or asset sale, the consideration (whether stock, cash, or other
securities or property) received in the merger or asset sale 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
was 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, for each
Share of Optioned Stock subject to the Option, 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.

11.           Time
of Granting Options.  The date of
grant of an Option shall be the date on which the Administrator makes the
determination granting such Option, except with respect to the date of grant of
Options to certain Outside Directors, which is set by the terms of the
Program.  Notice of the determination
shall be given to each Employee or Consultant to whom an Option is granted within
a reasonable time after the date of such grant.

12.           Amendment
and Termination of the Program.

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

 

11

 

(b)           Stockholder
Approval.  The Company shall obtain
stockholder approval of any Program amendment to the extent necessary and
desirable to comply with Section 422 of the Code (or any successor rule or
statute or other applicable law, rule or regulation, including the requirements
of any exchange or quotation system on which the Common Stock is listed or
quoted).  Such stockholder approval, if
required, shall be obtained in such a manner and to such a degree as is required
by the applicable law, rule or regulation. 
In addition, should the Administrator determine that it is appropriate
to reduce the exercise price of any Option pursuant to Section 4(b)(xi) of the
Program, the Administrator shall seek the prior consent of the stockholders to
effect such action.

(c)           Effect
of Amendment or Termination.  No
amendment, alteration, suspension or termination of the Program shall impair
the rights of any Optionee, unless mutually agreed otherwise between the
Optionee and the Administrator, which agreement must be in writing and signed
by the Optionee and the Company.

13.           Conditions
Upon Issuance of Shares.  Shares
shall not be issued pursuant to the exercise of an Option unless the exercise
of such Option and the issuance and delivery of such Shares pursuant thereto
shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended (the “Securities Act”), the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the Shares may then be listed,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.

As a condition to the exercise of an Option, the Company may require
the person exercising such Option or making such purchase 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 by any of the aforementioned relevant provisions of law.

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

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.

15.           Option
Agreements.  Each Option shall be
designated in a written option agreement as either an Incentive Stock Option or
a Nonstatutory Stock Option.  Such
agreements shall be subject to amendment from time to time as shall be
determined by the Administrator; provided, however, that agreements reflecting
option grants pursuant to Section 8(b)(ii) hereof shall contain only
the terms and conditions as set forth in this Program.

16.           Stockholder
Approval.  Continuance of the
Program shall be subject to approval by the stockholders of the Company within
twelve months before or after the date the Program is adopted.  Such stockholder approval shall be obtained
in the manner and to the degree required under applicable federal and state
law.

 

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Exhibit 10.26  

 
  Form of Change of Control Letter Agreement    
    

Dear
                        : 

        In
the event of a Change of Control, fifty percent (50%) of the unvested portion of any outstanding stock options granted under SeeBeyond's stock option plan you hold shall vest and
become exercisable. Change of Control is defined as a merger or consolidation of the Company (SeeBeyond) with any other corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at
least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger of consolidation. Any
transaction for the purpose of providing capital financing to SeeBeyond shall not constitute a Change of Control. 

	 	Sincerely yours,
	

 	

/s/  JAMES T. DEMETRIADES      
	

 	

James T. Demetriades
	

 	

CEO and President
	

 	

 
	

 	

 

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Form of Change of Control Letter Agreement

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