Document:

exv10w3

 

Exhibit 10.3

GUARANTEE

The undersigned hereby irrevocably and unconditionally guarantees, as a primary obligor and not
merely as a surety, to Sigma Opportunity Fund, LLC (“Buyer”), its successors and assigns, the full
and prompt payment of all amounts owing under the Note and any and all other sums and charges
payable by Berliner Communications, Inc. (the “Company”) to Buyer pursuant to the Transaction
Documents, and the full performance and observance of all of the covenants, terms, conditions and
agreements to be performed and observed by the Company pursuant to the terms of the Transaction
Documents.

This Guaranty is an absolute and unconditional guaranty of payment and performance. It shall be
enforceable against the undersigned without the necessity of any suit or proceeding on the part of
Buyer against the Company or any other party.

Except for the right to receive notice of default by the Company, the undersigned waives any
necessity of notice of nonpayment, nonperformance or nonobservance by the Company of any term or
provision of any of the Transaction Documents. This Guaranty shall not be discharged by reason of
any assignment or modification of the Transaction Documents or by any waiver or forbearance of the
Buyer of any of the terms of the Transaction Documents, the notice of all of which the undersigned
hereby waives.

The undersigned acknowledges that it will receive substantial direct and indirect benefits from the
transactions contemplated by the Transaction Documents and that execution and delivery of this
Guarantee is a condition to the obligation of Buyer to consummate the transactions contemplated by
the Transaction Documents. The undersigned represents and warrants to Buyer that it has all right,
power and authority to enter into this Guarantee and perform its obligations hereunder and that
this Guarantee constitutes the legal, valid and binding obligation of the undersigned, enforceable
in accordance with its terms, except as may be limited by bankruptcy, insolvency, and other similar
laws of general application affecting the rights of creditors and by general equitable principles.

Capitalized terms used herein without definition are used as defined in the Note Purchase
Agreement, dated December 29, 2006, between Berliner Communications, Inc. and Buyer.

Dated: December 29, 2006

 

 

	 	 	 	 	 
	 	BCI COMMUNICATIONS, INC.

 	 
	 	By:  	/s/ Richard B. Berliner
 	 
	 	 	Name:  	Richard B. Berliner 	 
	 	 	Title:  	Chief Executive Officer 	 
	 

Accepted and Agreed:

SIGMA OPPORTUNITY FUND, LLC

	 	 	 	 	 
	By:

	 	/s/ Thom Waye
 

Name: Thom Waye
	 	 
	 

	 	Title: Managing Partnerexv4w2

 

Exhibit 4.2

SANPRO SYSTEMS, INC.

2001 U.S. STOCK OPTION PLAN

As Adopted                     , 2001

     1. PURPOSE. The purpose of this Plan is to provide incentives to attract, retain and
motivate eligible persons whose present and potential contributions are important to the success of
the Company, its Parent and Subsidiaries, by offering them an opportunity to participate in the
Company’s future performance through awards of Options. Capitalized terms not defined in the text
are defined in Section 21. This Plan is intended to be a written compensatory benefit plan within
the meaning of Rule 701 promulgated under the Securities Act.

     2. SHARES SUBJECT TO THE PLAN.

          2.1 Number of Shares Available. Subject to Sections 2.2 and 16, the total number of
Shares reserved and available for grant and issuance pursuant to this Plan (together with other
option plans of the Company) will be –[                    ] Shares or such lesser number of Shares as
permitted under Section 260.140.45 of Title 10 of the California Code of Regulations. Subject to
Sections 2.2 and 16, Shares will again be available for grant and issuance in connection with
future Options under this Plan that are subject to issuance upon exercise of an Option but cease to
be subject to such Option for any reason other than exercise of such Option. At all times the
Company will reserve and keep available a sufficient number of Shares as will be required to
satisfy the requirements of all outstanding Options granted under this Plan.

          2.2 Adjustment of Shares. In the event that the number of outstanding shares of the
Company’s Common Stock is changed by a stock dividend, recapitalization, stock split, reverse stock
split, subdivision, combination, reclassification or similar change in the capital structure of the
Company without consideration, then (a) the number of Shares reserved for issuance under this Plan
and (b) the Exercise Prices of and number of Shares subject to outstanding Options, will be
proportionately adjusted, subject to any required action by the Board or the stockholders of the
Company and compliance with applicable securities laws; provided, however, that
fractions of a Share will not be issued but will either be paid in cash at the Fair Market Value of
such fraction of a Share or will be rounded down to the nearest whole Share, as determined by the
Committee; and provided, further, that the Exercise Price of any Option may not be decreased to
below the par value of the Shares.

     3. ELIGIBILITY. ISOs (as defined in Section 5 below) may be granted only to employees
(including officers and directors who are also employees) of the Company or of a Parent or
Subsidiary of the Company. NQSOs (as defined in Section 5 below) may be granted to employees,
officers, directors and consultants of the Company or of any Parent or Subsidiary of

- 1 -

 

the Company;
provided such persons render bona fide services not in connection with the offer
and sale of securities in a capital-raising transaction. A person may be granted more than one
Option under this Plan.

     4. ADMINISTRATION.

          4.1 Committee Authority. This Plan will be administered by the Committee or the Board
acting as the Committee. Subject to the general purposes, terms and conditions of this Plan, and
to the direction of the Board, the Committee will have full power to implement and carry out this
Plan. Without limitation, the Committee will have the authority to:

	 	(a)	 	construe and interpret this Plan, any Stock Option Agreement
(as defined in Section 5 below) and any other agreement or document executed
pursuant to this Plan;
	 
	 	(b)	 	prescribe, amend and rescind rules and regulations relating to this Plan;
	 
	 	(c)	 	select persons to receive Options;
	 
	 	(d)	 	determine the form and terms of Options;
	 
	 	(e)	 	determine the number of Shares or other consideration subject to Options;
	 
	 	(f)	 	determine whether Options will be granted singly, in
combination with, in tandem with, in replacement of, or as alternatives to, any
other incentive or compensation plan of the Company or any Parent or Subsidiary
of the Company;
	 
	 	(g)	 	grant waivers of Plan or Option conditions;
	 
	 	(h)	 	determine the vesting and exercisability of Options;
	 
	 	(i)	 	correct any defect, supply any omission, or reconcile any
inconsistency in this Plan, any Option, any Stock Option Agreement (as defined
in Section 5 below) or any Exercise Agreement (as defined in Section 5 below);
	 
	 	(j)	 	determine whether an Option has been earned; and
	 
	 	(k)	 	make all other determinations necessary or advisable for the
administration of this Plan.

          4.2 Committee Discretion. Any determination made by the Committee with respect to any
Option will be made in its sole discretion at the time of grant of the Option or, unless in
contravention of any express term of this Plan or Option, and subject to Section 5.9, at any later
time, and such determination will be final and binding on the Company and on all persons having an
interest in any Option under this Plan. The Committee may delegate to one or more officers of the
Company the authority to grant Options under this Plan.

- 2 -

 

     5. OPTIONS. The Committee may grant Options to eligible persons and will determine
whether such Options will be Incentive Stock Options within the meaning of the Code (“ISOs”) or
Nonqualified Stock Options (“NQSOs”), the number of Shares subject to the Option, the Exercise
Price of the Option, the period during which the Option may be exercised, and all other terms and
conditions of the Option, subject to the following:

          5.1 Form of Option Grant. Each Option granted under this Plan will be evidenced by an
agreement which will expressly identify the Option as an ISO or an NQSO (“Stock Option Agreement”),
and will be in such form and contain such provisions (which need not be the same for each
Participant) as the Committee may from time to time approve, and which will comply with and be
subject to the terms and conditions of this Plan.

          5.2 Date of Grant. The date of grant of an Option will be the date on which the
Committee makes the determination to grant such Option, unless otherwise specified by the
Committee. The Stock Option Agreement and a copy of this Plan will be delivered to the Participant
within a reasonable time after the granting of the Option.

          5.3 Exercise Period. Options may be exercisable immediately (subject to repurchase
pursuant to Section 10 of this Plan) or may be exercisable within the times or upon the events
determined by the Committee as set forth in the Stock Option Agreement governing such Option;
provided, however, that no Option will be exercisable after the expiration of ten
(10) years from the date the Option is granted; and provided further that no ISO
granted to a person who directly or by attribution owns more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or of any Parent or Subsidiary of the
Company (“Ten Percent Stockholder”) will be exercisable after the expiration of five (5) years from
the date the ISO is granted. The Committee also may provide for Options to become exercisable at
one time or from time to time, periodically or otherwise, in such number of Shares or percentage of
Shares as the Committee determines. Subject to earlier termination of the Option as provided
herein, each Participant who is not an officer, director or consultant of the Company or of a
Parent or Subsidiary of the Company shall have the right to exercise an Option granted hereunder at
the rate of at least twenty percent (20%) per year over five (5) years from the date such Option is
granted.

          5.4 Exercise Price. The Exercise Price of an Option will be determined by the
Committee when the Option is granted and may not be less than 85% of the Fair Market Value of the
Shares on the date of grant; provided that (i) the Exercise Price of an ISO will not be less than
100% of the Fair Market Value of the Shares on the date of grant and (ii) the Exercise Price of any
Option granted to a Ten Percent Stockholder will not be less than 110% of the Fair Market Value of
the Shares on the date of grant. Payment for the Shares purchased must be made in accordance with
Section 6 of this Plan.

          5.5 Method of Exercise. Options may be exercised only by delivery to the Company of a
written stock option exercise agreement (the “Exercise Agreement”) in a form approved by the
Committee (which need not be the same for each Participant), stating the number of Shares being
purchased, the restrictions imposed on the Shares purchased under such Exercise
Agreement, if any, and such representations and agreements regarding Participant’s

- 3 -

 

investment
intent and access to information and other matters, if any, as may be required or desirable by the
Company to comply with applicable securities laws, together with payment in full of the Exercise
Price, and any applicable taxes, for the number of Shares being purchased.

          5.6 Termination. Subject to earlier termination pursuant to Sections 16 or 17 and
notwithstanding the exercise periods set forth in the Stock Option Agreement, exercise of an Option
will always be subject to the following:

          (a) If the Participant is Terminated for any reason except death, Disability or Cause,
then the Participant may exercise such Participant’s Options, only to the extent that such
Options are exercisable upon the Termination Date and such Options must be exercised by the
Participant, if at all, within three (3) months after the Termination Date (or within such
shorter time period, not less than thirty (30) days after the Termination Date, or such
longer time period not exceeding five (5) years after the Termination Date, as may be
determined by the Committee with any exercise after three (3) months after the Termination
Date deemed to be an NQSO), but in any event, no later than the expiration date of the
Options.

          (b) If the Participant is Terminated because of Participant’s death or Disability (or
the Participant dies within three (3) months after Participant’s Termination other than for
Cause or Participant’s Disability), then Participant’s Options may be exercised, only to the
extent that such Options are exercisable by Participant on the Termination Date and must be
exercised by Participant (or Participant’s legal representative or authorized assignee), if
at all, within twelve (12) months after the Termination Date or within such shorter time
period, not less than six (6) months after the Termination Date, or such longer time period
not exceeding five (5) years after the Termination Date, as may be determined by the
Committee, with any exercise after (a) three (3) months after the Termination Date when the
Termination is for any reason other than the Participant’s death or disability, within the
meaning of Code Section 22(e)(3), or (b) twelve (12) months after the Termination Date when
the Termination is because of Participant’s disability, within the meaning of Code Section
22(e)(3), deemed to be an NQSO, but in any event no later than the expiration date of the
Options.

          (c) If the Participant is terminated for Cause, then Participant’s Options shall expire
on such Participant’s Termination Date, or at such later time and on such conditions as are
determined by the Committee.

          5.7 Limitations on Exercise. The Committee may specify a reasonable minimum number of
Shares that may be purchased on exercise of an Option, provided that such minimum number will not
prevent Participant from exercising the Option for the full number of Shares for which it is then
exercisable.

          5.8 Limitations on ISOs. The aggregate Fair Market Value (determined as of the date
of grant) of Shares with respect to which ISOs are exercisable for the first time by a
Participant during any calendar year (under this Plan or under any other incentive stock option
plan of the Company or any Parent or Subsidiary of the Company) will not exceed $[100,000].

- 4 -

 

If the
Fair Market Value of Shares on the date of grant with respect to which ISOs are exercisable for the
first time by a Participant during any calendar year exceeds $[100,000], then the Options for the
first $[100,000] worth of Shares to become exercisable in such calendar year will be ISOs and the
Options for the amount in excess of $[100,000] that become exercisable in that calendar year will
be NQSOs. In the event that the Code or the regulations promulgated thereunder are amended after
the Effective Date (as defined in Section 17 below) to provide for a different limit on the Fair
Market Value of Shares permitted to be subject to ISOs, then such different limit will be
automatically incorporated herein and will apply to any Options granted after the effective date of
such amendment.

          5.9 Modification, Extension or Renewal. The Committee may modify, extend or renew
outstanding Options and authorize the grant of new Options in substitution therefor, provided that
any such action may not, without the written consent of a Participant, impair any of such
Participant’s rights under any Option previously granted. Any outstanding ISO that is modified,
extended, renewed or otherwise altered will be treated in accordance with Section 424(h) of the
Code. Subject to Section 5.10, the Committee may reduce the Exercise Price of outstanding Options
without the consent of Participants affected by a written notice to them; provided,
however, that the Exercise Price may not be reduced below the minimum Exercise Price that
would be permitted under Section 5.4 of this Plan for Options granted on the date the action is
taken to reduce the Exercise Price; provided, further, that the Exercise Price will not be reduced
below the par value of the Shares, if any.

          5.10 No Disqualification. Notwithstanding any other provision in this Plan, no term
of this Plan relating to ISOs will be interpreted, amended or altered, nor will any discretion or
authority granted under this Plan be exercised, so as to disqualify this Plan under Section 422 of
the Code or, without the consent of the Participant affected, to disqualify any ISO under Section
422 of the Code.

     6. PAYMENT FOR SHARE PURCHASES.

          6.1 Payment. Payment for Shares purchased pursuant to this Plan may be made in cash
(by check) or, where expressly approved for the Participant by the Committee and where permitted by
law:

	 	(a)	 	by cancellation of indebtedness of the Company to the Participant;
	 
	 	(b)	 	by surrender of shares that: (A) either have been owned by the
Participant for more than six (6) months and have been paid for within the
meaning of SEC Rule 144 (and, if such shares were purchased from the Company by
use of a promissory note, such note has been fully paid with respect to such shares; or (B) were obtained by the Participant in the public market; and (2)
are clear of all liens, claims, encumbrances or security interests.
	 
	 	(c)	 	by tender of a full recourse promissory note having such terms
as may be approved by the Committee and bearing interest at a rate sufficient
to avoid imputation of income under Sections 483 and 1274 of the Code;

- 5 -

 

	 	 	 	provided, however, that Participants who are not employees or directors of the
Company will not be entitled to purchase Shares with a promissory note unless
the note is adequately secured by collateral other than the Shares; provided,
further, that the portion of the Exercise Price equal to the par value of the
Shares must be paid in cash or other legal consideration permitted by the
Delaware General Corporation Law.
	 
	 	(d)	 	by waiver of compensation due or accrued to the Participant for
services rendered;
	 
	 	(e)	 	provided that a public market for the Company’s stock exists:

	 	(1)	 	through a “same day sale” commitment from the
Participant and a broker-dealer that is a member of the National
Association of Securities Dealers (an “NASD Dealer”) whereby the
Participant irrevocably elects to exercise the Option and to sell a
portion of the Shares so purchased to pay for the Exercise Price, and
whereby the NASD Dealer irrevocably commits upon receipt of such Shares
to forward the Exercise Price directly to the Company; or
	 
	 	(2)	 	through a “margin” commitment from the
Participant and an NASD Dealer whereby the Participant irrevocably
elects to exercise the Option and to pledge the Shares so purchased to
the NASD Dealer in a margin account as security for a loan from the
NASD Dealer in the amount of the Exercise Price, and whereby the NASD
Dealer irrevocably commits upon receipt of such Shares to forward the
Exercise Price directly to the Company; or

	 	(f)	 	by any combination of the foregoing.

          6.2 Loan Guarantees. The Committee may help the Participant pay for Shares purchased
under this Plan by authorizing a guarantee by the Company of a third-party loan to the Participant.

     7. WITHHOLDING TAXES.

          7.1 Withholding Generally. Whenever Shares are to be issued in satisfaction of
Options granted under this Plan, the Company may require the Participant to remit to the Company an
amount sufficient to satisfy federal, state and local withholding tax requirements prior to the
delivery of any certificate or certificates for such Shares. Whenever, under this Plan, payments
in satisfaction of Options are to be made in cash, such payment will be net of an amount sufficient
to satisfy federal, state, and local withholding tax requirements.

          7.2 Stock Withholding. When, under applicable tax laws, a Participant incurs tax
liability in connection with the exercise or vesting of any Option that is subject to tax
withholding and the Participant is obligated to pay the Company the amount required to be

- 6 -

 

withheld,
the Committee may in its sole discretion allow the Participant to satisfy the minimum withholding
tax obligation by electing to have the Company withhold from the Shares to be issued that number of
Shares having a Fair Market Value equal to the minimum amount required to be withheld, determined
on the date that the amount of tax to be withheld is to be determined. All elections by a
Participant to have Shares withheld for this purpose will be made in accordance with the
requirements established by the Committee and be in writing in a form acceptable to the Committee.

     8. PRIVILEGES OF STOCK OWNERSHIP.

          8.1 Voting and Dividends. No Participant will have any of the rights of a stockholder
with respect to any Shares until the Shares are issued to the Participant. After Shares are issued
to the Participant, the Participant will be a stockholder and have all the rights of a stockholder
with respect to such Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, however, that as a condition
precedent to the exercise of any Options granted and the issuance of Shares in respect thereof, the
Participant shall execute and deliver a voting proxy in a form that is appropriate under Delaware
law and that appoints a person or entity who is unrelated to the Company and its shareholders and
directors. The Company will comply with Section 260.140.1 of Title 10 of the California Code of
Regulations, to the extent applicable, with respect to the voting rights of Common Stock.

          8.2 Financial Statements. The Company will provide financial statements to each
Participant prior to such Participant’s purchase of Shares under this Plan, and to each Participant
annually during the period such Participant has Options outstanding, or as otherwise required or
permitted under Section 260.140.46 of Title 10 of the California Code of Regulations.
Notwithstanding the foregoing, the Company will not be required to provide such financial
statements to key employees whose services in connection with the Company assure them access to
equivalent information.

     9. TRANSFERABILITY. Options granted under this Plan, and any interest therein, will
not be transferable or assignable by Participant, and may not be made subject to execution,
attachment or similar process, otherwise than by will or by the laws of descent and distribution.
During the lifetime of the Participant, an Option will be exercisable only by the Participant or
Participant’s legal representative and any elections with respect to an Option may be made only by
the Participant or Participant’s legal representative.

     10. RESTRICTIONS ON SHARES.

          10.1 Transfer Restriction. Unless otherwise determined by the Board of Directors,
until the initial public offering of the Company’s Common Stock, a Participant shall not have the
right to sell Shares issued upon exercise of an Option within six (6) months after the date
of exercise of such Option or issuance of such Option.

          10.2 Right of First Refusal. After the six (6) month period and at the discretion of
the Committee, the Company may reserve to itself and/or its assignee(s) in the Stock Option

- 7 -

 

Agreement a right of first refusal to purchase all Shares that a Participant (or a subsequent
transferee) may propose to transfer to a third party, unless otherwise not permitted by Section
25102(o) of the California Corporations Code, provided, that such right of first refusal terminates
upon the Company’s initial public offering of Common Stock pursuant to an effective registration
statement filed under the Securities Act. In the event and to the extent of the non-exercise of
such right of first refusal, the transfer of any Shares shall be subject to the execution by a
transferee of a voting proxy in a form that is appropriate under Delaware law and that appoints a
person or entity who is unrelated to the Company and its shareholders and directors

     11. CERTIFICATES. All certificates for Shares or other securities delivered under
this Plan will be subject to such stock transfer orders, legends and other restrictions as the
Committee may deem necessary or advisable, including restrictions under any applicable federal,
state or foreign securities law, or any rules, regulations and other requirements of the SEC or any
stock exchange or automated quotation system upon which the Shares may be listed or quoted.

     12. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a Participant’s Shares,
the Committee may require the Participant to deposit all certificates representing Shares, together
with stock powers or other instruments of transfer approved by the Committee, appropriately
endorsed in blank, with the Company or an agent designated by the Company to hold in escrow until
such restrictions have lapsed or terminated, and the Committee may cause a legend or legends
referencing such restrictions to be placed on the certificates. Any Participant who is permitted
to execute a promissory note as partial or full consideration for the purchase of Shares under this
Plan will be required to pledge and deposit with the Company all or part of the Shares so purchased
as collateral to secure the payment of Participant’s obligation to the Company under the promissory
note; provided, however, that the Committee may require or accept other or
additional forms of collateral to secure the payment of such obligation and, in any event, the
Company will have full recourse against the Participant under the promissory note notwithstanding
any pledge of the Participant’s Shares or other collateral. In connection with any pledge of the
Shares, Participant will be required to execute and deliver a written pledge agreement in such form
as the Committee will from time to time approve. The Shares purchased with the promissory note may
be released from the pledge on a pro rata basis as the promissory note is paid.

     13. RESERVED.

     14. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. This Plan
is intended to comply with Section 25102(o) of the California Corporations Code. Any provision of
this Plan which is inconsistent with Section 25102(o) shall, without further act or amendment by
the Company or the Board, be reformed to comply with the requirements of Section 25102(o). An
Option will not be effective unless such Option is in compliance with all applicable federal and
state securities laws, rules and regulations of any governmental body, and the requirements of any
stock exchange or automated quotation system upon which the Shares may then be listed or
quoted, as they are in effect on the date of grant of the Option and also on the date of exercise
or other issuance. Notwithstanding any other provision in this Plan, the Company will have no
obligation to issue or deliver certificates for Shares under this Plan prior to (a) obtaining any
approvals from governmental agencies that the Company determines are necessary or advisable,

- 8 -

 

and/or
(b) compliance with any exemption, completion of any registration or other qualification of such
Shares under any state or federal law or ruling of any governmental body that the Company
determines to be necessary or advisable. The Company will be under no obligation to register the
Shares with the SEC or to effect compliance with the exemption, registration, qualification or
listing requirements of any state securities laws, stock exchange or automated quotation system,
and the Company will have no liability for any inability or failure to do so.

     15. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Option granted under this
Plan will confer or be deemed to confer on any Participant any right to continue in the employ of,
or to continue any other relationship with, the Company or any Parent or Subsidiary of the Company
or limit in any way the right of the Company or any Parent or Subsidiary of the Company to
terminate Participant’s employment or other relationship at any time, with or without cause.

     16. CORPORATE TRANSACTIONS.

          16.1 Assumption or Replacement of Options by Successor. In the event of (a) a
dissolution or liquidation of the Company, (b) a merger or consolidation in which the Company is
not the surviving corporation, (c) a merger in which the Company is the surviving corporation but
after which the stockholders of the Company immediately prior to such merger (other than any
stockholder which merges with the Company in such merger, or which owns or controls another
corporation which merges, with the Company in such merger) cease to own their shares or other
equity interests in the Company, or (d) the sale of all or substantially all of the assets of the
Company, any or all outstanding Options may be assumed, converted or replaced by the successor
corporation (if any), which assumption, conversion or replacement will be binding on all
Participants. In the alternative, the successor corporation may substitute equivalent Options or
provide substantially similar consideration to Participants as was provided to stockholders (after
taking into account the existing provisions of the Options). The successor corporation may also
issue, in place of outstanding Shares of the Company held by the Participant, substantially similar
shares or other property subject to repurchase restrictions and other provisions no less favorable
to the Participant than those which applied to such outstanding Shares immediately prior to such
transaction described in this Subsection 16.1. In the event such successor corporation (if any)
refuses to assume or substitute Options, as provided above, pursuant to a transaction described in
this Subsection 16.1, then notwithstanding any other provision in this Plan to the contrary, unless
otherwise set forth in the Stock Option Agreement, such Options will expire on such transaction at
such time and on such conditions as the Board will determine.

          16.2 Other Treatment of Options. Subject to any greater rights granted to
Participants under the foregoing provisions of this Section 16, in the event of the occurrence of
any transaction described in Section 16.1, any outstanding Options will be treated as provided in
the applicable agreement or plan of merger, consolidation, dissolution, liquidation or sale of
assets.

          16.3 Assumption of Options by the Company. The Company, from time to time, also may
substitute or assume outstanding options granted by another company, whether in connection with an
acquisition of such other company or otherwise, by either (a) granting an

- 9 -

 

Option under this Plan in
substitution of such other company’s option, or (b) assuming such option as if it had been granted
under this Plan if the terms of such assumed option could be applied to an Option granted under
this Plan. Such substitution or assumption will be permissible if the holder of the substituted or
assumed option would have been eligible to be granted an Option under this Plan if the other
company had applied the rules of this Plan to such grant. In the event the Company assumes an
option granted by another company, the terms and conditions of such option will remain unchanged
(except that the exercise price and the number and nature of shares issuable upon exercise
of any such option will be adjusted appropriately pursuant to Section 424(a) of the Code). In the
event the Company elects to grant a new Option rather than assuming an existing option, such new
Option may be granted with a similarly adjusted Exercise Price.

     17. ADOPTION AND STOCKHOLDER APPROVAL. This Plan will become effective on the date
that it is adopted by the Board (the “Effective Date”). This Plan will be approved by the
stockholders of the Company (excluding Shares issued pursuant to this Plan), consistent with
applicable laws, within twelve (12) months before or after the Effective Date. Upon the Effective
Date, the Board may grant Options pursuant to this Plan; provided, however, that:
(a) no Option may be exercised prior to initial stockholder approval of this Plan, and (b) no
Option granted pursuant to an increase in the number of Shares approved by the Board shall be
exercised prior to the time such increase has been approved by the stockholders of the Company. In
the event that initial stockholder approval is not obtained within twelve (12) months before or
after this Plan is adopted by the Board, all Options granted hereunder will be canceled.

     18. TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as provided herein, this
Plan will terminate ten (10) years from the Effective Date or, if earlier, the date of stockholder
approval. This Plan and all agreements hereunder shall be governed by and construed in accordance
with the laws of the State of California.

     19. AMENDMENT OR TERMINATION OF PLAN. Subject to Section 5.9, the Board may at any
time terminate or amend this Plan in any respect, including without limitation amendment of any
form of Stock Option Agreement or instrument to be executed pursuant to this Plan;
provided, however, that the Board will not, without the approval of the
stockholders of the Company, amend this Plan in any manner that requires such stockholder approval
pursuant to Section 25102(o) of the California Corporations Code or the Code or the regulations
promulgated thereunder as such provisions apply to ISO plans.

     20. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by the Board, the
submission of this Plan to the stockholders of the Company for approval, nor any provision of this
Plan will be construed as creating any limitations on the power of the Board to adopt such
additional compensation arrangements as it may deem desirable, including, without
limitation, the granting of stock options or any other equity awards outside of this Plan, and such
arrangements may be either generally applicable or applicable only in specific cases.

     21. DEFINITIONS. As used in this Plan, the following terms will have the following
meanings:

- 10 -

 

          “Board” means the Board of Directors of the Company.

          “Cause” means Termination because of (i) any willful material violation by the Participant of
any law or regulation applicable to the business of the Company or a Parent or Subsidiary of the
Company, the Participant’s conviction for or guilty plea to, a felony or a crime involving moral
turpitude or any willful perpetration by the Participant of a common law fraud, (ii) the
Participant’s commission of an act of personal dishonesty which involves a personal profit in
connection with the Company or any other entity having a business relationship with the Company,
(iii) any material breach by the Participant of any material provision of any agreement or
understanding between the Company or a Parent or Subsidiary of the Company and the Participant
regarding the terms of the Participant’s service as an employee, director or consultant to the
Company or a Parent or Subsidiary of the Company, including without limitation, the willful and
continued failure or refusal of the Participant to perform the material duties required of such
Participant as an employee, director or consultant of the Company or a Parent or Subsidiary of the
Company, other than as a result of having a Disability, or a breach of any applicable invention
assignment and confidentiality agreement or similar agreement between the Company or a Parent or
Subsidiary of the Company and the Participant, (iv) Participant’s intentional disregard of the
policies of the Company or a Parent or Subsidiary of the Company so as to cause loss, damage or
injury to the property, reputation or employees of the Company or a Parent or Subsidiary of the
Company, or (v) any other misconduct by the Participant which is materially injurious to the
financial condition or business reputation of, or is otherwise materially injurious to, the Company
or a Parent or Subsidiary of the Company.

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

          “Committee” means the committee appointed by the Board to administer this Plan, or if no
committee is appointed, the Board.

          “Company” means SANPro Systems, Inc. or any successor corporation.

          “Disability” means a disability, whether temporary or permanent, partial or total, as
determined by the Committee.

          “Exercise Price” means the price at which a holder of an Option may purchase the Shares
issuable upon exercise of the Option.

          “Fair Market Value” means, as of any date, the value of a share of the Company’s Common Stock
determined as follows:

	 	(a)	 	if such Common Stock is then quoted on the Nasdaq National
Market, its
closing price on the Nasdaq National Market on the date of determination as
reported in The Wall Street Journal;
	 
	 	(b)	 	if such Common Stock is publicly traded and is then listed on a
national securities exchange, its closing price on the date of determination on
the principal national securities exchange on which the Common Stock is listed
or admitted to trading as reported in The Wall Street Journal;

- 11 -

 

	 	(c)	 	if such Common Stock is publicly traded but is not quoted on
the Nasdaq National Market nor listed or admitted to trading on a national
securities exchange, the average of the closing bid and asked prices on the
date of determination as reported by The Wall Street Journal (or, if
not so reported, as otherwise reported by any newspaper or other source as the
Board may determine); or
	 
	 	(d)	 	if none of the foregoing is applicable, by the Committee in
good faith.

          “Option” means an award of an option to purchase Shares pursuant to Section 5.

          “Parent” means any corporation (other than the Company) in an unbroken chain of corporations
ending with the Company if each of such corporations other than the Company owns stock possessing
50% or more of the total combined voting power of all classes of stock in one of the other
corporations in such chain.

          “Participant” means a person who receives an Option under this Plan.

          “Plan” means this SANPro Systems, Inc. 2001 U.S. Stock Option Plan, as amended from time to
time.

          “SEC” means the Securities and Exchange Commission.

          “Securities Act” means the Securities Act of 1933, as amended.

          “Shares” means shares of the Company’s Common Stock, $0.001 par value reserved for issuance
under this Plan, as adjusted pursuant to Sections 2 and 16, and any successor security.

          “Subsidiary” means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if each of the corporations other than the last corporation
in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.

          “Termination” or “Terminated” means, for purposes of this Plan with respect to a Participant,
that the Participant has for any reason ceased to provide services as an employee, officer,
director or consultant to the Company or a Parent or Subsidiary of the Company. A Participant will
not be deemed to have ceased to provide services in the case of (i) sick leave, (ii)
military leave, or (iii) any other leave of absence approved by the Committee, provided that such
leave is for a period of not more than ninety (90) days unless reinstatement (or, in the case of an
employee with an ISO, reemployment) upon the expiration of such leave is guaranteed by contract or
statute, or unless provided otherwise pursuant to formal policy adopted from time to time by the
Company and issued and promulgated in writing. In the case of any Participant on (i) sick leave,
(ii) military leave or (iii) an approved leave of absence, the Committee may make such provisions
respecting suspension of vesting of the Option while on leave from the Company

- 12 -

 

or a Parent or
Subsidiary of the Company as it may deem appropriate, except that in no event may an Option be
exercised after the expiration of the term set forth in the Stock Option Agreement. The Committee
will have sole discretion to determine whether a Participant has ceased to provide services and the
effective date on which the Participant ceased to provide services (the “Termination Date”).

- 13 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}]]