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Exhibit 10.20  

THE
SECURITIES REPRESENTED BY THIS DOCUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR REGISTERED OR QUALIFIED UNDER APPLICABLE STATE SECURITIES
LAWS IN RELIANCE UPON EXEMPTIONS THEREFROM. THE HOLDER MAY NOT OFFER, SELL, TRANSFER, ASSIGN, PLEDGE, HYPOTHECATE OR OTHERWISE DISPOSE OF OR ENCUMBER THE SECURITIES REPRESENTED BY THIS DOCUMENT EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS, OR UPON RECEIPT
BY THE ISSUER OF AN OPINION OF LEGAL COUNSEL FOR THE HOLDER REASONABLY SATISFACTORY TO THE ISSUER AND ITS LEGAL COUNSEL THAT SUCH OFFER, SALE, TRANSFER, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION OR ENCUMBRANCE IS EXEMPT FROM THE REGISTRATION PROVISIONS OF THE SECURITIES ACT AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER AND THE REGISTRATION AND/OR QUALIFICATION PROVISIONS OF
APPLICABLE STATE SECURITIES LAWS. 

 
 

MSC.SOFTWARE CORPORATION    
  

 
  WARRANT TO PURCHASE COMMON STOCK
  VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MAY 1, 2007    
  

        This certifies that, for value received, MICHAEL KORYBALSKI or registered assigns (the "Holder"), is entitled to
purchase from MSC.Software Corporation, a Delaware corporation (the "Company"), at any time on and after May 1, 2003, but no later than
5:00 P.M., Los Angeles time, on May 1, 2007 (the "Expiration Date"), at the purchase price of $15.00 per share (the
"Exercise Price"), up to 15,000 shares of Common Stock, par value $0.01 per share, of the Company (the "Warrant
Shares"). The number of Warrant Shares
purchasable upon exercise of this Warrant and the Exercise Price per share are subject to adjustment from time to time as set forth in this Warrant. 

 SECTION 1. Exercise

        1.1    Exercise. This Warrant may be exercised in whole or in part by presentation of this Warrant with the Purchase Form
attached hereto duly executed and simultaneous payment of the Exercise Price (subject to adjustment) at the principal executive offices of the Company, currently in the City of Santa Ana, California.
Payment of the Exercise Price shall be made at the option of the Holder hereof by certified or cashier's check or as provided in subsection 1.2 hereof. Upon any partial exercise of this Warrant, there
shall be countersigned and issued to the Holder hereof a new Warrant in respect of the Warrant Shares as to which this Warrant shall not have been exercised. 

        1.2    Alternative Exercise. In lieu of exercising this Warrant for cash as described in subsection 1.1, the Holder shall have
the right to exercise this Warrant or any portion thereof (the "Net Issuance Right") into shares of Common Stock as provided in this subsection 1.2 at any time or from time to time during the period
specified in the first paragraph of this Warrant by the surrender of this Warrant (properly endorsed) to the Company. Upon exercise of the Net Issuance Right with respect to a particular number of
shares subject to this Warrant (the "Net Issuance Warrant Shares"), the Company shall deliver to the Holder (without payment by the Holder of any Exercise Price or any cash or other consideration)
that number of shares of Common Stock equal to the quotient obtained by dividing (X) the value of this Warrant (or the specified portion hereof) on the Net Issuance Exercise Date, which value
shall be determined by subtracting (A) the aggregate Exercise Price of the Net Issuance Warrant Shares immediately prior to the exercise of the Net Issuance Right from (B) the aggregate
fair market value of the Net Issuable Warrant Shares issuable 

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upon exercise of this Warrant (or the specified portion hereof) on the date the Net Issuance Right is exercised as provided herein by (Y) the fair market value of one share of Common Stock on
the date the Net Issuance Right is exercised as provided herein. For purposes of this subsection 1.2, fair market value shall mean the Closing Price (as defined in subsection 4.1(c)) of the Common
Stock on the date the Net Issuance Right is exercised as provided herein. 

        1.3    Effect of Exercise. This Warrant shall be deemed to have been exercised immediately prior to the close of business on the
date of its surrender for exercise as provided in this Section 1 and the persons entitled to receive the shares of Common Stock issuable upon such exercise shall be treated for all purposes as
the holders of record of such shares as of the close of business on such date. As promptly as practicable on or after such date, the Company at its expense shall issue and deliver to the person or
persons entitled to receive the same a certificate or certificates for the number of shares of Common Stock issuable upon such exercise. 

 SECTION 2. Transfer of Exchange of Warrant

        2.1    Transfer. This Warrant shall be transferable only in the books of the Company upon delivery thereof duly endorsed by the
Holder or by his duly authorized attorney or legal representative. In all cases of transfer by an attorney, the original power of attorney, duly approved, or an official copy thereof, duly certified,
shall be deposited and remain with the Company. In case of transfer by executors, administrators, guardians or other legal representatives, duly authenticated evidence of their authority shall be
produced, and required to be deposited and remain with the Company. Upon any registration of transfer, the Company shall countersign and deliver a new Warrant to the person entitled thereto. Transfer
of this Warrant can be made only in compliance with all applicable federal and state securities laws. 

        2.2    Exchange of Warrant. This Warrant may be exchanged for another Warrant entitling the Holder thereof to purchase a like
aggregate number of Warrant Shares as the Warrant surrendered then entitles such Holder to purchase. Any Holder desiring to exchange this Warrant shall make such request in writing delivered to the
Company, and shall surrender this Warrant. Thereupon, the Company shall countersign and deliver to the person entitled thereto a new Warrant as so requested. 

 SECTION 3. Reservation of Shares of Common Stock

        There
have been reserved, and the Company shall at all times keep reserved out of its authorized Common Stock, a number of shares of Common Stock sufficient to provide for the exercise
of the right of purchase represented by this Warrant. The Company covenants that all shares of Common Stock issuable upon exercise of this Warrant will, upon issuance, be duly authorized, validly
issued, fully paid and nonassessable. The transfer agent for the Company's Common Stock and every subsequent transfer agent for any shares of the Company's capital stock issuable upon the exercise of
any of the rights of purchase aforesaid will be irrevocably authorized and directed at all times to reserve such number of authorized shares required for such purpose. 

 SECTION 4. Adjustment of Exercise Price and Number of Warrant Shares

        4.1    Adjustments. The number and kind of securities purchasable upon the exercise of this Warrant and the Exercise Price shall
be subject to adjustment as follows: 

        (a)  Stock Dividends, Splits, etc. In case the Company shall at any time after the date of this Warrant (i) pay a
dividend or make a distribution on its Common Stock which is paid or made (A) in Common Stock or other shares of the Company's capital stock or (B) in rights or warrants to purchase
Common Stock or other capital stock of the Company if such rights or warrants are not exercisable or separable from the Common Stock except upon the occurrence of a contingency, (ii) subdivide
its outstanding Common Stock into a greater number of shares of Common Stock, (iii) combine its outstanding shares into a smaller number of shares of Common Stock or (iv) issue by
reclassification of 

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its Common Stock other securities of the Company, then, in any such event the number of Warrant Shares purchasable upon exercise of this Warrant immediately prior thereto shall be adjusted so that
the Holder of this Warrant shall be entitled to receive, upon exercise of this Warrant, the kind and number of shares of the Company and rights to purchase Common Stock or other securities of the
Company (or, in the event of the redemption of any such rights, any cash paid in respect of such redemption) that he, she or it would have owned or been entitled to receive after the happening of any
of the events described above had this Warrant been exercised immediately prior to the happening of such event or any record date with respect thereto. An adjustment made pursuant to this
paragraph (a) shall become effective immediately after the opening of business on the next business day following the record date in the case of dividends or other distributions and shall
become effective immediately after the opening of business on the next business day following the effective date in the case of a subdivision or combination. 

        (b)  Distributions of Assets. In case the Company shall at any time after the date of this Warrant distribute to all holders
of its Common Stock evidences of indebtedness of the Company or assets of the Company (including cash dividends or distributions out of retained earnings other than cash dividends or distributions
made on a quarterly or other periodic basis) or warrants to subscribe for securities of the Company (excluding those referred to in paragraph (a) above), then in each case the Exercise Price
shall be adjusted to a price determined by multiplying the Exercise Price in effect immediately prior to such distribution by a fraction, of which the numerator shall be the then current Market Price
(as defined in paragraph (c) below) per share of Common Stock on the record date for determination of shareholders entitled to receive such distribution, less the then fair value (as determined
in good faith by the Board of Directors of the Company, whose determination shall be conclusive) of the portion of the assets or evidences of indebtedness so distributed or of such subscription rights
or warrants which are applicable to one share of Common Stock, and of which the denominator shall be such Market Price per share of Common Stock; provided, however, that if the then current Market
Price per share of Common Stock on the record date for determination of shareholders entitled to receive such distribution is less than the then fair value of the portion of the assets or evidences of
indebtedness so distributed or of such subscription rights or warrants which are applicable to one share of Common Stock, the foregoing adjustment of the Exercise Price shall not be made and in lieu
thereof the Holder shall be entitled to receive upon exercise of this Warrant in addition to the Common Stock the kind and number of assets, evidences of indebtedness, subscription rights and warrants
(or, in the event of the redemption of any such evidences of indebtedness, subscription rights and warrants, any cash paid in respect of such redemption) that he, she or it would have owned or have
been entitled to receive after the happening of such distribution had this Warrant been exercised immediately prior to the record date for such distribution. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would then be in effect if such
record date had not been fixed. 

        (c)  Computation of Market Price. For the purpose of any computation under this Warrant, the current Market Price per share of
Common Stock at any date shall be deemed to be the average of the daily Closing Price per share for the 15 consecutive Trading Days (as defined below) commencing 30 Trading Days before the date in
question. "Closing Price" is defined as the closing price for the Common Stock on the New York Stock Exchange. If Closing Price cannot be established as
described above, Market Price shall be the fair market value of the Common Stock as determined in good faith by the Board of Directors. "Trading Day"
shall mean a day on which the principal national securities exchange on which the Common Stock is listed or admitted to trading is open for the transaction of business. 

        (d)  Minimum Adjustment. No adjustment in the number of Warrant Shares purchasable hereunder or the Exercise Price shall be
required unless such adjustment would require an increase or decrease of at least 1.0% in the number of Warrant Shares purchasable upon the exercise of this Warrant, or the 

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Exercise Price, as the case may be; provided, however, that any adjustments which by reason of this
paragraph (d) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 4 shall be made to the nearest
cent or the nearest ten-thousandth of a share, as the case may be. 

        (e)  Warrant Share Adjustment. Upon each adjustment of the Exercise Price as a result of the calculations made in
paragraph (a) or (b) above, this Warrant shall thereafter evidence the right to purchase, at the adjusted Exercise Price, that number of shares (calculated to the nearest
ten-thousandth) obtained by (A) multiplying (x) the number of shares covered by this Warrant immediately prior to such adjustment of the Exercise Price by (y) the
Exercise Price in effect immediately prior to such adjustment of the Exercise Price and (ii) dividing the product so obtained by the Exercise Price in effect immediately after such adjustment
of the Exercise Price. 

        (f)    Notice of Adjustment. Whenever the number of Warrant Shares purchasable upon the exercise of this Warrant or the Exercise
Price of such Warrant Shares is adjusted, as herein provided, the Company shall promptly mail by first class mail, postage prepaid, to the Holder of this Warrant notice of such adjustment or
adjustments. Such certificate shall be conclusive evidence of the correctness of such adjustment. 

        (g)  Definition of Common Stock. For the purpose of this subsection 4.1 the term "Common
Stock" shall mean (A) the class of stock designated as the Common Stock of the Company at the date of this Warrant or (B) any other class of stock resulting from
successive changes or reclassifications of such shares consisting solely of changes in par value, or from par value to no par value or from no par value to par value. In the event that at any time, as
a result of an adjustment made pursuant to paragraph (a) above, above, the Holder of this Warrant shall become entitled to purchase any securities of the Company other than Common Stock,
thereafter the number of such other securities so purchasable upon exercise of this Warrant and the Exercise Price of such securities shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions with respect to the Warrant Shares contained in this subsection 4.1 and the provisions of subsections 4.2 and 4.3, inclusive, with
respect to the Warrant Shares, shall apply on like terms to any such other securities. 

        (h)  Company May Reduce Exercise Price or Increase Number of Warrant Shares Purchasable. The Company may, at its option, at
any time during the term of this Warrant, reduce the then current Exercise Price, or increase the number of Common Shares purchasable upon exercise of this Warrant, to any amount deemed appropriate by
the Board of Directors of the Company. 

        4.2    No Adjustment for Dividends. Except as provided in subsection 4.1, no adjustment in respect of any dividends made on a
quarterly or other periodic basis out of retained earnings shall be made during the term of this Warrant or upon the exercise of this Warrant. 

        4.3    Preservation of Purchase Rights and Adjustment of Exercise Price upon Merger, Consolidation, etc. In case the Company
shall consolidate or merge with or into any other corporation (other than a consolidation or merger in which the Company is the surviving corporation and each share of Common Stock outstanding
immediately prior to such consolidation or merger is to remain outstanding immediately after such consolidation or merger and no cash, securities or other property is distributed with respect to such
shares) or shall sell or transfer all or substantially all of its assets to any person or entity, the Company or such successor or purchasing person or entity, as the case may be (collectively, the
"acquiring person"), shall execute an agreement that the Holder shall have the right thereafter upon payment of the Exercise Price in effect immediately
prior to such action to purchase upon exercise of this Warrant the kind and amount of shares and other securities, cash and other property that he, she or it would have owned or have been entitled to
receive after the happening of such consolidation, merger or sale had this Warrant been exercised immediately prior to such action (assuming that such Holder, as a holder of Common Stock prior to such
action, would not have exercised any rights of election as a holder of Common Stock as to the kind or amount of securities, cash or other property receivable upon such consolidation, merger or sale;
provided, 

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that if the kind or amount of securities, cash or other property receivable upon such consolidation, merger or sale is not the same for each non-electing share of Common Stock, then the
kind and amount of securities, cash or other property receivable shall be deemed to be the kind and amount so receivable by a plurality of the non-electing shares). The provisions of this
subsection 4.3 shall similarly apply to successive consolidations, mergers, sales or conveyances. 

 SECTION 5. No Rights as Stockholders

        Nothing
contained in this Warrant shall be construed as conferring upon the Holder or his, her or its transferee the right to vote or to receive dividends or to consent or to receive
notice as shareholders in respect of any meeting of shareholders for the election of directors of the Company or any other matter, or any rights whatsoever as shareholders of the Company. 

 SECTION 6. Fractional Shares of Common Stock

        The
Company will not issue fractions of Warrant Shares. In lieu of such fractional Warrant Shares, there shall be paid to the Holder to whom fractional Warrant Shares would otherwise be
issuable an amount in cash equal to the product of such fraction of a Warrant Share multiplied by the Closing Price per share of Common Stock on the date this Warrant is exercised. 

 SECTION 7. Notices

        Any
notice pursuant to this Warrant by the Holder to the Company shall be in writing and shall be deemed to have been duly given if delivered or mailed by certified mail, return receipt
requested, to MSC.Software Corporation, 2 MacArthur Place, Santa Ana, California 92707, Attention: Louis A. Greco. Any notice mailed pursuant to this Warrant by the Company to the Holder shall be in
writing and shall be deemed to have been duly given if mailed by first-class mail, postage prepaid, to Holder at his, her or its address as it appears on the books of the Company. Each party hereto
may from time to time change the address to which notices to it are to be delivered or mailed hereunder by notice in writing to the other party. 

 SECTION 8. Applicable Law

        This
Warrant shall be deemed to be a contract made under the internal laws of the State of California (without preference to conflicts of law principles) and for all purposes shall be
construed in accordance with the laws of said State. 

        IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly authorized officers. 

	Dated:	 	MSC.SOFTWARE CORPORATION
	

 	
 	

By:	
 	

/s/  FRANK PERNA      
 Title:
	

 	
 	

ATTEST:	
 	

/s/  MARGARET WILLIAMS      
 Title:

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MSC.SOFTWARE CORPORATION
  PURCHASE FORM    
  

        The undersigned hereby irrevocably elects to exercise the right of purchase represented by the within Warrant for, and to purchase thereunder,
            
shares of Common Stock, provided for therein, and requests that certificates for such shares of Common Stock be issued in the name of: 

	Name:	 	

	Address:	 	

	Social Security or Taxpayer's Identification Number:	 	

and, if said number of shares of Common Stock shall not be all the Common Stock purchasable thereunder, that a new Warrant for the balance remaining of the Common Stock
purchasable under the within Warrant be registered in the name of the undersigned Warrantholder or his or her Assignee as below indicated and delivered to the address stated below. 

	Name of Warrantholder or Assignee:	 	

	Address:	 	

	 	 	

	Social Security or Taxpayer's Identification Number:	 	

	Signature:	 	
	 	 
	Dated:	 	
	 	 
	Signature Guaranteed:

	 	 	NOTICE:	 	The above signature must correspond with the name as written upon the face of this Warrant in every particular, without alteration or enlargement or any change whatever, unless this Warrant has been assigned.

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ASSIGNMENT  

(To be signed only upon

assignment of Warrant) 

        FOR
VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto 

(Name
of Assignee) 

(Address
and Social Security or other Taxpayer Identification Number of Assignee) 

the
within Warrant, hereby irrevocably constituting and appointing 

Attorney
to transfer said Warrant on the books of the Company, with full power of substitution in the premises. 

DATED:
                                        

	 	 	
 Signature of Registered Holder

Signature Guaranteed: 

	 	 	NOTICE:	 	The signature of this assignment must correspond with the name as it appears upon the face of the within Warrant in every particular, without alteration or enlargement or any change whatever.

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MSC.SOFTWARE CORPORATION

WARRANT TO PURCHASE COMMON STOCK VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MAY 1, 2007

MSC.SOFTWARE CORPORATION PURCHASE FORMExhibit 10.37

 

TITAN
PHARMACEUTICALS, INC.

 

2002
STOCK OPTION PLAN

1.             Purpose.  Titan Pharmaceuticals, Inc., a Delaware
corporation (“Titan”), desires to attract and retain the best available
talent and to encourage the highest level of performance.  The Titan Pharmaceuticals, Inc. 2002 Stock
Option Plan (the “Plan”) is intended to contribute significantly to the
attainment of these objectives by affording eligible employees and independent
contractors of Titan and its Affiliates (as defined in Section 23) (collectively,
with Titan, the “Company”) the opportunity to acquire a proprietary
interest in Titan through the grant of stock options (“Options”) to
purchase shares of common stock, $.001 par value per share, of Titan (the “Common
Stock”).

2.             Administration.

(a)           The Plan shall be administered by a
committee (the “Committee”) of not fewer than two members of the board
of directors of Titan (the “Board”) who shall be appointed by and serve
at the pleasure of the Board. To the extent necessary to comply with Rule 16b-3
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
with respect to Option grants to officers and directors, each member of the
Committee shall be a “non-employee director” within the meaning of Rule 16b-3
and, to the extent necessary to exclude Options granted under the Plan from the
calculation of the income tax deduction limit under Section 162(m) of the
Internal Revenue Code of 1986, as amended (the “Code”), each member of
the Committee shall be an “outside director” within the meaning of Section
162(m) of the Code and Treasury Regulations promulgated thereunder. A majority
of the Committee shall constitute a quorum.

(b)           The Committee shall have and may
exercise all of the powers of the Board under the Plan, other than the power to
appoint a director to Committee membership. The Committee shall have plenary
authority in its discretion, subject to and consistent with the express
provisions of the Plan, to direct the grants of options; to determine the
numbers of shares of Common Stock covered by each option or award, the purchase
price of the Common Stock covered by each option, the individuals to whom
(“Optionees”) and the time or times at which Options shall be granted or may be
exercised; to prescribe, amend and rescind rules and regulations relating
to the Plan, including, without limitation, such rules and regulations as
it shall deem advisable so that transactions involving options or awards may
qualify for exemption under such rules and regulations as the Securities and
Exchange Commission may promulgate from time to time exempting transactions
from Section 16(b) of the Exchange Act; to determine the terms and
provisions of, and to cause the Company to enter into, agreements with
Optionees in connection with Option grants under the Plan (“Option
Agreements”), which Option Agreements may vary from one another, as the
Committee shall deem appropriate; to amend any Option Agreement from time to
time  with the consent of the Optionee;
and to make all other determinations the Committee may deem necessary or
advisable for the administration of the Plan. Every action, decision,
interpretation or determination made by the Committee or the Board with respect
to the application or administration of the Plan shall be conclusive and
binding upon the Company and any person having or claiming any interest
pursuant to any Option granted under the Plan.

(c)           Except as otherwise required by law,
no member of the Board or the Committee shall be liable for anything whatsoever
in connection with the administration of the Plan other than such member’s own
willful misconduct.  Under no
circumstances shall any member of the Board or the Committee be liable for any
act or omission of any other member of the Board or the Committee. The Board
and the Committee shall be entitled to rely, in the performance of its
functions with respect to the Plan, upon information and advice furnished by
Titan’s officers, Titan’s accountants, Titan’s legal

 

 

counsel and any other party the Board and Committee
deems necessary. No member of the Board or Committee shall be liable for any
action taken or not taken in reliance upon any such advice.

(d)           Each Option under the Plan shall be
deemed to have been granted when the determination of the Committee with
respect to such Option is made. Once an option has been granted, all conditions
and requirements of the Plan with respect to such Option shall be deemed
conditions on exercise, not grant.

3.             Type of Options.  Options granted under the Plan may be either
incentive stock options (“ISOs”) intended to meet the requirements of
Code Section 422 or nonqualified stock options (“NSOs”) which are not
intended to meet such Code requirements.

4.             Eligible Persons.  Subject in the case of ISOs to Section
16(a), Options may be granted to employees, officers and directors of, and
consultants and advisors to, the Company. In determining the persons to whom
awards shall be made and the number of shares to be covered by each Option, the
Committee shall take into account the duties of the respective persons, their
present and potential contributions to the success of the Company and other
factors deemed relevant by the Committee in connection with accomplishing the
purposes of the Plan.

5.             Share Limitations under the Plan.

(a)           Subject to adjustment as provided in
Section 15 and the provisions of this Section 5, a maximum of two million
(2,000,000) shares of Common Stock shall be reserved for issuance pursuant to
the exercise of Options granted under the Plan. This amount shall be increased
by the residual shares remaining in all Predecessor Plans, regardless of
whether those shares (i) were available for transfer to this Plan upon the
Effective Date, or (ii) subsequently become available (e.g., by reason of
forfeiture of a grant).  It is intended
that no new grants shall be made under the Predecessor Plans.  If an Option is forfeited or expires without
being exercised, the shares of Common Stock subject to the Option shall be
available for additional Option grants under the Plan.  If an Option is exercised in whole or in
part by an Optionee tendering previously owned shares of Common Stock, or if
any shares are withheld in connection with the exercise of its Option to
satisfy the Optionee’s tax liability, the full number of shares in respect of
which the Option has been exercised shall be applied against the limit set
forth in this Section 5(a).

(b)           Titan may grant options under the
Plan in substitution for options held by employees of another corporation who
become employees of Titan or an Affiliate as the result of a merger or
consolidation of the employing corporation with Titan or an Affiliate, or as a
result of the acquisition by Titan or an Affiliate of property or stock of the
employing corporation.  Substitute
options be granted on such terms as the Committee considers appropriate in the
circumstances. Substitute options shall be in addition to the limit set forth
in Section 5(a).

(c)           The maximum aggregate number of
shares of Common Stock for which Options may be granted to any one individual
within one fiscal year of Titan shall be five hundred thousand (500,000).

(d)           The aggregate numbers set forth in
this Section 5 shall be subject to adjustment as provided in Section 15.

6.             Term of Options.  The term of each Option shall be fixed by the
Committee and specified in the applicable Option Agreement, but in no event
shall it be more than ten years from the date of grant, subject to earlier
termination as provided in Section 8. 
Subject in the case of ISOs to Section 16, the term

 

2

 

of an Option may be extended from time to time by the
Committee, provided that no extension shall extend the term beyond ten years
from the date of grant.

7.             Vesting.  The Committee shall determine the vesting schedule
applicable to a particular Option grant and specify the vesting schedule in the
applicable Option Agreement. 
Notwithstanding the foregoing the Committee may accelerate the vesting
of an Option at any time.

8.             Termination of Relationship to
the Company.

(a)           With respect to an Option granted to
an individual who is an employee of the Company at the time of Option grant,
unless the Option Agreement expressly provides to the contrary, (i) the Option
shall terminate immediately upon the Optionee’s termination of employment for
Cause (as defined in Section 23); (ii) subject in the case of ISOs to Section
16, the Option shall terminate two years following the Optionee’s termination
of employment by reason of death or Disability (as defined in Section 23);
(iii) subject in the case of ISOs to Section 16, the Option shall terminate two
years after Retirement (as defined in Section 23); (iv) the Option shall
terminate three months after the Optionee’s termination of employment for any
other reason; and (v) vesting of an Option will terminate in all cases
immediately upon termination of employment. 
In no event shall an Option remain exercisable beyond the expiration
date specified in the applicable Option Agreement.  An Option Agreement may contain such provisions as the Board
shall approve with reference to the determination of the date employment
terminates for purposes of the Plan and the effect of leaves of absence, which
provisions may vary from one another.

(b)           With respect to an Option granted to
an individual who is not an employee of the Company at the time of Option
grant, the Board shall determine and specify in the applicable Option Agreement
the consequences, if any, of the termination of the Optionee’s relationship
with the Company.

9.             Option Price.  Subject in the case of ISOs to Section 16,
the exercise price per share of Common Stock covered by an Option shall be
established by the Committee; provided, however, that (a) the exercise price
per share for any Option shall not be less than one-hundred-percent (100%) of
the Fair Market Value of a share of Common Stock on the date the Option is
granted and (b) no ISO granted to a 10% Shareholder (as defined in Section 16)
shall have a exercise price per share less than one hundred ten percent (110%)
of the Fair Market Value of a share of Common Stock on the date the Option is
granted.  Notwithstanding the foregoing,
an Option (whether an ISO or NSO) may be granted with an exercise price lower
than the minimum exercise price set forth above if such Option is granted
pursuant to an assumption or substitution for another option in a manner
qualifying under the provision of Section 424(a) of the Code.

10.           Exercise of Options.

(a)           An Option may be exercised at any
time and from time to time, in whole or in part, as to any or all full shares
as to which the Option is then exercisable. 
An Option may not be exercised with respect to a fractional share. An
Optionee (or other person who, pursuant to Section 13, may exercise the Option)
shall exercise the Option by delivering to Titan at the address provided in the
Option Agreement a written, signed notice of exercise, stating the number of
shares of Common Stock with respect to which the option exercise is being made,
and satisfy the requirements of paragraph (b) of this Section 10.  Upon receipt by Titan of any notice of
exercise, the exercise of the Option as set forth in that notice shall be
irrevocable.

(b)           Upon exercise of an Option, the
Optionee shall pay to Titan the Option exercise price per share of Common Stock
multiplied by the number of full shares as to which the Option is then

 

3

 

exercised.  An
Optionee may pay the Option exercise price by tendering or causing to be
tendered to Titan cash, by delivery or deemed delivery of shares of Common
Stock owned by the Optionee for at least six months preceding the date of
exercise of the Option (or such shorter or longer period as the Committee may
approve or require from time to time) having a Fair Market Value equal to the
exercise price or other property permitted by law and acceptable to the Board
or Committee, or by any other means which the Board or Committee determines are
consistent with the purpose of the Plan and with applicable laws and
regulations (including, without limitation, the provisions of Rule 16b-3 and
Regulation T promulgated by the Federal Reserve Board).

(c)           An Optionee shall, upon notification
of the amount due and prior to or concurrently with delivery of the certificate
representing the shares as to which the Option has been exercised, promptly pay
or cause to be paid the amount determined by the Company as necessary to
satisfy all applicable tax withholding requirements.  An Optionee may satisfy his or her tax withholding requirement in
any manner satisfactory to the Company.

(d)           The certificate representing the
shares as to which an Option has been exercised shall bear an appropriate
legend setting forth the restrictions applicable to such shares.

11.           Option Agreement.  The terms and conditions of each Option
shall be set forth in an Option Agreement in the form approved by the
Committee. Each Option Agreement shall, at a minimum, specify (i) the
number of shares of Common Stock subject to the Option, (ii) whether the
Option is intended to be an ISO or NSO, (iii) the provisions related to
vesting and exercisability of the Option, including the Option exercise price,
and (iv) that the Option is subject to the terms and provisions of the
Plan. Option Agreements may differ from one another.

12.           No Stockholder Rights.  No Optionee shall have the rights of a
stockholder with respect to shares covered by an Option until such person
becomes the holder of record of such shares.

13.           Nontransferability.

(a)           Except as provided in paragraph (b),
Options granted under the Plan shall not be assignable or transferable other
than by will or the laws of descent and distribution and Options may be
exercised during the lifetime of the Optionee only by the Optionee or by the
Optionee’s guardian or legal representative. 
In the event of any attempt by an Optionee to transfer, assign, pledge,
hypothecate or otherwise dispose of an Option or any right thereunder, except
as provided for herein, or in the event of the levy of any attachment,
execution or similar process upon the rights or interest hereby conferred,
Titan may terminate the Option by notice to the Optionee and it shall thereupon
become null and void.

(b)           Notwithstanding paragraph (a), if
(and on the terms) so provided in the applicable Option Agreement, an Optionee
may transfer a NSO, by gift or a domestic relations order, to a Family Member
of the Optionee (as defined in Section 23). 
If a NSO is transferred in accordance with this subparagraph, the Option
shall be exercisable solely by the transferee, but the determination of the
exercisability of the Option shall be based solely on the activities and state
of affairs of the Optionee.  Thus, for
example, if after a transfer the Optionee ceases to be an employee of the
Company, such termination shall trigger the provisions of Section 8
hereof.  Conversely, if after a transfer
the transferee ceases to be an employee of the Company, such termination shall
not trigger the provisions of Section 8 hereof.

14.           Compliance with Law; Registration
of Shares.

 

4

 

(a)           The Plan and any grant hereunder
shall be subject to all applicable laws, rules, and regulations of any
applicable jurisdiction or authority or agency thereof and to such approvals by
any regulatory or governmental agency which, in the opinion of Company’s
counsel, may be required or appropriate.

(b)           Notwithstanding any other provision
of the Plan or Option Agreements made pursuant hereto, the Company shall not be
required to issue or deliver any certificate or certificates for shares of
Common Stock under the Plan prior to fulfillment of all of the following
conditions:

i.              Effectiveness of any registration
or other qualification of such shares of the Company under any law or
regulation of any applicable jurisdiction or authority or agency thereof which
the Board shall, in its absolute discretion or upon the advice of counsel, deem
necessary or advisable; and

ii.             Grant of any other consent,
approval or permit from any applicable jurisdiction or authority or agency
thereof or securities exchange or quotation system which the Board shall, in
its absolute discretion or upon the advice of counsel, deem necessary or
advisable.

The Company shall use all
reasonable efforts to obtain any consent, approval or permit described above;
provided, however, that except to the extent as may be specified in an Option
Agreement with respect to any particular Option grant, the Company shall be
under no obligation to register or qualify any shares subject to an Option
under any federal or state securities law or on any exchange.

15.           Adjustments upon Changes in
Capitalization.

(a)           In the event that Titan or the
division, subsidiary or other Affiliate for which an Optionee performs services
is sold (including a stock or an asset sale), spun off, merged, consolidated,
reorganized or liquidated, the Board may determine that (i) the Option shall be
assumed, or a substantially equivalent Option shall be substituted, by an
acquiring or succeeding entity (or an affiliate thereof) on such terms as the
Board determines to be appropriate; 
(ii) upon written notice to the Optionee, provide that the Option shall
terminate immediately prior to the consummation of the transaction unless
exercised by the Optionee within a specified period following the date of the
notice;  (iii) in the event of a sale or
similar transaction under the terms of which holders of Common Stock receive a
payment for each share of Common Stock surrendered in the transaction (the “Sales
Price”), make or provide for a payment to each Optionee equal to the amount
by which (A) the Sales Price times the number of shares of Common Stock subject
to the Option (to the extent such Option is then exercisable) exceeds (B) the
aggregate exercise price for all such shares of Common Stock;  or (iv) may make such other equitable
adjustments as the Board deems appropriate.

(b)           In the event of any stock dividend or
split, recapitalization, combination, exchange or similar change affecting 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, the
Committee shall make any or all of the following adjustments as it deems
appropriate to equitably reflect such event: 
(i) adjust the aggregate number of shares (or such other security
as is designated by the Board) which may be acquired pursuant to the Plan,
(ii) adjust the purchase price to be paid for any or all such shares
subject to the then outstanding Options, (iii) adjust the number of shares
of Common Stock (or such other security as is designated by the Board) subject
to any or all of the then outstanding Options and (iv) make any other
equitable adjustments or take such other equitable action as the Board, in its
discretion, shall deem appropriate.  For
purposes hereof, the conversion of any convertible securities of the Company
shall not be deemed to have been “effected without receipt of consideration.”

 

5

 

(c)           Any and all adjustments or actions taken
by the Board pursuant to this Section 15 shall be conclusive and binding for
all purposes.

16.           ISO Provisions.

(a)           Employment Requirement;
Termination of Employment, Death or Disability.  ISOs may only be awarded to employees of Titan or a corporation
which, with respect to Titan, is a “parent corporation” or “subsidiary
corporation” within the meaning of Code Sections 424(e) and (f).  No ISO may be exercised unless, at the time
of such exercise, the Optionee is, and has been continuously since the date of
grant of his or her option, employed by the Company, except that:

i.              an ISO may be exercised within the
period of three months after the date the Optionee ceases to be an employee of
the Company (or within such lesser period as may be specified in the applicable
Option Agreement), provided, that the Option Agreement may designate a
longer exercise period and that the exercise after such three-month period
shall be treated as the exercise of a NSO under the Plan;

ii.             if the Optionee dies while in the
employ of the Company, or within three months after the Optionee ceases to be
such an employee, the ISO may be exercised by the person to whom it is
transferred by will or the laws of descent and distribution within the period
of one year after the date of death (or within such lesser period as may be
specified in the applicable Option Agreement); provided, that the Option
Agreement may designate a longer exercise period and that the exercise after
such one-year period shall be treated as the exercise of a NSO under the Plan;
and

iii.            if while in the employ of the
Company the Optionee becomes disabled within the meaning of Section 22(e)(3) of
the Code or any successor provisions thereto, the ISO may be exercised within
the period of one year after the date the Optionee ceases to be such an
employee because of such disability (or within such lesser period as may be
specified in the applicable Option Agreement) provided, that the Option
Agreement may designate a longer exercise period and that the exercise after such
one-year period shall be treated as the exercise of a NSO under the Plan.

For all purposes of the
Plan and any Option granted hereunder, “employment” shall be defined in
accordance with the provisions of Section 1.421-7(h) of the Income Tax
Regulations (or any successor regulations). 
Notwithstanding the foregoing provisions, no ISO may be exercised after
its expiration date.

(b)           10% Shareholders.  In the case of an individual who at the time
the Option is granted owns stock possessing more than 10% of the total combined
voting power of all classes of the stock of Titan or of a parent or subsidiary
corporation of Titan (a “10% Shareholder”), (i) the Option exercise price of
any ISO granted to such person shall in no event be less than 110% of the Fair
Market Value of the Common Stock on the date the ISO is granted and (ii) the
term of an ISO granted to such person may not exceed five years from the date
of grant.

(c)           $100,000 Limit.  The aggregate Fair Market Value (determined
at the time an ISO is granted) of the Common Stock covered by ISOs exercisable
for the first time by an employee during any calendar year (under all plans of
the Company) may not exceed $100,000.

(d)           Options Which Do Not Satisfy ISO
Requirements.  To the extent that
any Option which is issued under the Plan exceeds the limit set forth in
paragraph (c) or otherwise does not comply with the requirements of Code
Section 422, it shall be treated as a NSO.

 

6

 

17.           No Right to Continued Employment.  Neither the Plan nor any action taken
hereunder shall be construed as giving any employee or any independent
contractor any right to continue in the employ of or to be engaged as an
independent contractor by the Company or affect the right of the Company to
terminate such person’s employment or other relationship with the Company at
any time.

18.           Amendment; Early Termination.  Subject to Section 22, the Board may at any
time and from time to time alter, amend, suspend or terminate the Plan in whole
or in part; provided, however, that no amendment requiring stockholder approval
by law or by the rules of any stock exchange, inter-dealer quotation system, or
other market in which shares of Common Stock are traded, shall be effective
unless and until such stockholder approval has been obtained in compliance with
such rule or law; and provided, further, that no such amendment shall
materially adversely affect the rights of an Optionee in any Option previously
granted under the Plan without the Optionee’s written consent.

19.           Effective Date.  The Plan shall be effective as of the date
of its adoption by the Board (the “Effective Date”), subject to the
approval thereof by the stockholders of Titan entitled to vote thereon within
12 months of such date.  In the event
that such stockholder approval is not obtained within such time period, the
Plan and any Options granted under the Plan on or prior to the expiration of
such 12 month period shall be void and of no further force and effect.

20.           Termination of Plan.  Unless terminated earlier by the Board in
accordance with Section 18 above, the Plan shall terminate on, and no further
Options may be granted after, the tenth anniversary of the Effective Date.

21.           Severability.  In the event that any one or more provisions
of the Plan or an Option Agreement, or any action taken pursuant to the Plan or
an Option Agreement, should, for any reason, be unenforceable or invalid in any
respect under the laws of the United States, any state of the United States or
any other jurisdiction, such unenforceability or invalidity shall not affect
any other provision of the Plan or Option Agreement, but in such particular
jurisdiction and instance the Plan and/or Option Agreement, as applicable,
shall be construed as if such unenforceable or invalid provision had not been
contained therein or if the action in question had not been taken thereunder.

22.           Cancellation and New Grant of
Options, Etc. The Committee shall have the authority to effect, at any time
and from time to time, with the consent of the affected Optionees, (i) the
cancellation of any or all outstanding options under the Plan and the grant in
substitution therefor of new options under the Plan covering the same or
different numbers of shares of Common Stock and having an option exercise price
per share which may be lower or higher than the exercise price per share of the
cancelled options or (ii) the amendment of the terms of any and all outstanding
options under the Plan to provide an option exercise price per share which is
higher or lower than the then-current exercise price per share of such
outstanding options; provided, however, that the Committee shall
not take any of the actions described in (i) or (ii) hereof without receiving
the approval of Titan’s stockholders. The provisions of this Section 22 may not
be altered or amended without stockholder approval.

23.           Definitions.

(a)           Affiliate.  The term “Affiliate” means any entity,
whether or not incorporated, that directly or through one or more
intermediaries is controlled by Titan.

(b)           Cause.  The term “Cause” when used herein in
conjunction with termination of employment (or other service relationship)
means (i) if the Optionee is a party to an employment or similar agreement with
the Company which defines “cause” (or a similar term), the meaning set forth in
such agreement (other than death or disability), or (ii) otherwise, termination
by the Company of the

 

7

 

employment (or other service relationship) of the
Optionee by reason of the Optionee’s (1) intentional failure to perform
reasonably assigned duties, (2) dishonesty or willful misconduct in the
performance of his duties, (3) involvement in a transaction which is materially
adverse to the Company, (4) breach of fiduciary duty involving personal profit,
(5) willful violation of any law, rule, regulation or court order (other than
misdemeanor traffic violations and misdemeanors not involving misuse or
misappropriation of money or property), (6) commission of an act of fraud or
intentional misappropriation or conversion of any asset or opportunity of the
Company, or (7) material breach of any provision of the Company’s Stock Option
Plan, the Optionee’s Option Agreement or any other written agreement between
the Optionee and the Company, in each case as determined in good faith by the
Board, whose determination shall be final, conclusive and binding on all
parties.

(c)           Disability. Except as
otherwise specified in the applicable Option Agreement or in the Optionee’s
Employment Agreement with the Company, the Optionee shall be deemed to have a
“Disability” if the Optionee is unable to engage in any substantial gainful
activity by reason of any medically determined physical or mental impairment
which can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than twelve (12) months, as
reasonably determined by the Board in good faith and in its discretion.

(d)           Fair Market Value.  As used herein, the term “Fair Market Value”
of a share of Common Stock of the Company as of a specified date for the
purposes of the Plan shall mean the lower of (i) the average of the Closing
Prices (as defined below) for the five (5) trading days immediately preceding
the date of grant or (ii) the Closing Price on the date of grant. “Closing
Price” for purposes of the Plan shall mean the closing price of a share of the
Common Stock on the principal securities exchange (including the Nasdaq
National Market) on which such shares are traded on the relevant date for which
Fair Market Value is being determined, or on the next preceding date on which
such shares are traded if no shares were traded on such date, or if the shares
are not traded on a securities exchange, Fair Market Value shall be deemed to
be the average of the high bid and low asked prices of the shares in the
over-the-counter market on the relevant date for which Fair Market Value is
being determined or on the next preceding date on which such high bid and low
asked prices were recorded.  If the
shares are not publicly traded, Fair Market Value of a share of Common Stock
(including, in the case of any repurchase of shares, any distributions with
respect thereto which would be repurchased with the shares) shall be determined
in good faith by the Board or the Committee. 
In no case shall Fair Market Value be determined with regard to
restrictions other than restrictions which, by their terms, will never lapse.

(e)           Family Member of the Optionee.  As used herein, “Family Member of the Optionee”
means the Optionee’s child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law,
including adoptive relationships, any person sharing the Optionee’s household
(other than a tenant or employee), a trust in which these persons have more
than 50% of the beneficial interest, a foundation in which these persons (or
the Optionee) control the management of assets, and any other entity in which
these persons (or the Optionee) own more than 50% of the voting interests.

(f)            Predecessor Plans.  As used herein, “Predecessor Plans” means
Titan’s 1993 Stock Option Plan, 1995 Stock Option Plan and 1998 Stock Option
Plan, each as may have been amended through and including the Effective Date.

(g)           Retirement. As used herein,
“Retirement” means the termination of employment of an Optionee over the age of
62 with at least 10 years of continuous service to the Company.

 

 

 

8

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