Document:

Exhibit 4.1

 

 

	
  SPI

  	
  S U N
  E S I S

  SUNESIS PHARMACEUTICALS, INC.

  INCORPORATED UNDER THE  LAWS OF THE STATE OF DELAWARE

  	
  867328
  50 2

  

 

 

 

	
  This Certified that

   

   

   

   

   

   

   

  Is the record holder of 

  

FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK, $0.0001 PAR VALUE,
OF

 

--------------------- SUNESIS PHARMACEUTICALS, INC.
--------------------

 

Transferable
on the books of the Corporation by the holder hereof in person or by duly
authorized attorney upon surrender of this certificate properly endorsed.  This certificate is not valid until
countersigned by the Transfer Agent and registered by the Registrar.

        WITNESS the facsimile seal of the Corporation and the
facsimile signatures of its duly authorized officers.

 

        Dated:

 

 

 

 

 

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECRETARY

  	
   

  	
  PRESIDENT

  
	
   

  	
   

  	
   

  

 

 

 

SUNESIS PHARMACEUTICALS, INC.

 

The
Corporation shall furnish without charge to each stockholder who so requests a
statement of the powers, designations, preferences and relative, participating,
optional or other special rights of each class of stock of the Corporation or
series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights. Such requests shall be made to the Corporation’s
Secretary at the principal office of the Corporation.

The
following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations: 

	
  TEN COM

  	
  —

  	
  as tenants in common

  	
  UNIF GIFT MIN ACT—

  	
  ..................

  	
  Custodian

  	
  ..........................

  
	
  TEN ENT

  	
  —

  	
  as tenants by the entireties

  	
   

  	
   

  
	
  (Cust)

  	
   

  	
  (Minor)

  
	
  JT
  TEN

  	
  —

  	
  as joint tenants with right of underUniform
  Gifts to Minors survivorship and not as tenants in common

  	
   

  	
  under
  Uniform Gifts to Minors Act..................................................................

                                  (State)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  UNIF TRF MIN ACT—

  	
  .................

  	
  Custodian
  (until age .........................)

  
	
   

  	
   

  	
   

  	
   

  	
  (Cust)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  ...........................under
  Uniform Transfers to

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Minor)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Minors Act 

  	
  ....................................................

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (State)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
								

 

 

 

 

Additional abbreviations may also be used though
not in the above list.

FOR VALUE RECEIVED,                                     hereby sell, assign and transfer unto

PLEASE
INSERT SOCIAL SECURITY OR OTHER

IDENTIFYING NUMBER OF ASSIGNEE

 

 

 

 

 

                                                                                                                                                                                                

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS,
INCLUDING ZIP CODE, OF ASSIGNEE)

                                                                                                                                                                                                

                                                                                                                                                                                                

                                                                                                                                                                                                

                                                                                                                                                                                 __ Shares of the common stock represented by the
within Certificate, and do hereby irrevocably constitute and appoint

                                                                                                                                                                                    Attorney to
transfer the said stock on the books of the within named Corporation with full
power of substitution in the premises.

 

 

Dated                                                     

X                                                                                             

 

X                                                                                             

THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE
NAME(S) AS WRITTEN UPON THE NOTICE FACE OF THE CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

Signature(s) Guaranteed

 

 

By                                                                           

THE SIGNATURE(S) SHOULD BE
GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCK­BROKERS, SAVINGS
AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.Exhibit
10.1

 

SUNESIS PHARMACEUTICALS
INCORPORATED

 

1998 STOCK PLAN

(amended as of October 4, 2001)

 

1.             Purposes of the Plan.  The purposes of this 1998 Stock Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and its Subsidiaries and to promote the success of the Company’s
business.  Options granted under the Plan
may be Incentive Stock Options (as defined under Section 422 of the Code)
or Nonstatutory Stock Options, as determined by the Administrator at the time
of grant of an option and subject to the applicable provisions of Section 422
of the Code, as amended, and the regulations promulgated thereunder.  Stock purchase rights may also be granted
under the Plan.

 

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

 

(a)           “Administrator” means the Board or any of its
Committees appointed pursuant to Section 4 of the Plan.

 

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

 

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

 

(d)           “Committee” means the Committee appointed by the
Board of Directors in accordance with Section 4(a) and (b) of the Plan.

 

(e)           “Common Stock” means the Common Stock of the Company.

 

(f)            “Company” means Sunesis Pharmaceuticals Incorporated,
a Delaware corporation.

 

(g)           “Consultant” means any person, including an advisor,
who is engaged by the Company or any Parent or Subsidiary to render services
and is compensated for such services, and any director of the Company whether
compensated for such services or not.

 

(h)           “Continuous Status as an Employee or Consultant”
means the absence of any interruption or termination of service as an Employee
or Consultant.  Continuous Status as an
Employee or Consultant shall not be considered interrupted in the case of:  (i) sick leave; (ii) military
leave; (iii) any other leave of absence approved by the Administrator,
provided that such leave is for a period of not more than 90 days, unless
reemployment upon the expiration of such leave is guaranteed by contract or
statute, or unless provided otherwise pursuant to Company policy adopted from
time to time; or (iv) in the case of transfers between locations of the
Company or between the Company, its Subsidiaries or their respective
successors.  For purposes of this Plan, a
change in status from an Employee to a Consultant or from a Consultant to an
Employee will not constitute an interruption of Continuous Status as an
Employee or Consultant.

 

 

(i)            “Employee” means any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of the Company,
with the status of employment determined based upon such minimum number of
hours or periods worked as shall be determined by the Administrator in its
discretion, subject to any requirements of the Code.  The payment by the Company of a director’s
fee to a director shall not be sufficient to constitute “employment” of such
director by the Company.

 

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

 

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

 

(i)            If the
Common Stock is listed on any established stock exchange or a national market
system including without limitation the National Market of the National
Association of Securities Dealers, Inc. Automated Quotation (“Nasdaq”)
System, its Fair Market Value shall be the closing sales price for such stock
(or the closing bid, if no sales were reported), as quoted on such system or
exchange, or the exchange with the greatest volume of trading in Common Stock
for the last market trading day prior to the time of determination, as reported
in The Wall Street Journal or such other
source as the Administrator deems reliable;

 

(ii)           If the
Common Stock is quoted on the Nasdaq System (but not on the National Market
thereof) or regularly quoted by a recognized securities dealer but selling
prices are not reported, its Fair Market Value shall be the mean between the
high bid and low asked prices for the Common Stock for the last market trading
day prior to the time of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems
reliable; or

 

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

 

(l)            “Incentive Stock Option” means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of
the Code, as designated in the applicable written Option Agreement.

 

(m)          “Nonstatutory Stock Option” means an Option not
intended to qualify as an Incentive Stock Option, as designated in the
applicable written Option Agreement.

 

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

 

(o)           “Option Agreement” means a written agreement between
an Optionee and the Company reflecting the terms of an Option granted under the
Plan and includes any documents attached to such Option Agreement, including,
but not limited to, a notice of stock option grant and a form of exercise
notice.

 

(p)           “Optioned Stock” means the Common Stock subject to an
Option or a Stock Purchase Right.

 

2

 

(q)           “Optionee” means an Employee or Consultant who
receives an Option or a Stock Purchase Right.

 

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

 

(s)           “Plan” means this 1998 Stock Plan.

 

(t)            “Reporting Person” means an officer, director, or
greater than 10% stockholder of the Company within the meaning of Rule 16a-2
under the Exchange Act, who is required to file reports pursuant to Rule 16a-3
under the Exchange Act.

 

(u)           “Restricted Stock” means shares of Common Stock
acquired pursuant to a grant of a Stock Purchase Right under Section 10
below.

 

(v)           “Restricted Stock Purchase Agreement” means a written
agreement between a holder of a Stock Purchase Right and the Company reflecting
the terms of a Stock Purchase Right granted under the Plan and includes any
documents attached to such agreement.

 

(w)          “Rule 16b-3” means Rule 16b-3 promulgated under the
Exchange Act, as the same may be amended from time to time, or any successor
provision.

 

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

 

(y)           “Stock Exchange” means any stock exchange or
consolidated stock price reporting system on which prices for the Common Stock
are quoted at any given time.

 

(z)            “Stock Purchase Right” means the right to purchase
Common Stock pursuant to Section 10 below.

 

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

 

3.             Stock Subject to the Plan.  Subject to the provisions of Section 12
of the Plan, the maximum aggregate number of Shares that may be optioned and
sold under the Plan is 10,341,350 shares of Common Stock.  The Shares may be authorized, but unissued,
or reacquired Common Stock.  If an Option
should expire or become unexercisable for any reason without having been
exercised in full, the unpurchased Shares that were subject thereto shall,
unless the Plan shall have been terminated, become available for future grant
under the Plan.  In addition, any Shares
of Common Stock which are retained by the Company upon exercise of an Option or
Stock Purchase Right in order to satisfy the exercise or purchase price for such
Option or Stock Purchase Right or any withholding taxes due with respect to
such exercise shall be treated as not issued and shall continue to be available
under the Plan.  Shares of Restricted
Stock or restricted stock issued pursuant to an Option which are repurchased by
the Company at their original purchase price shall become available for future
grant under the Plan.

 

3

 

4.             Administration of the Plan.

 

(a)           Initial Plan Procedure.  Prior to the date, if any, upon which the
Company becomes subject to the Exchange Act, the Plan shall be administered by
the Board or a Committee appointed by the Board.

 

(b)           Plan Procedure After the Date, if any, Upon Which
the Company Becomes Subject to the Exchange Act.

 

(i)            Multiple Administrative Bodies.  If permitted by Rule 16b-3, grants under the
Plan may be made by different bodies with respect to directors, non-director
officers and Employees or Consultants who are not Reporting Persons.

 

(ii)           Administration With Respect to Reporting Persons.  With respect to grants of Options or Stock
Purchase Rights to Employees who are Reporting Persons, such grants shall be
made by (A) the Board if the Board may make grants to Reporting Persons
under the Plan in compliance with Rule 16b-3, or (B) a Committee designated
by the Board to make grants to Reporting Persons under the Plan, which
Committee shall be constituted in such a manner as to permit grants under the
Plan to comply with Rule 16b-3. 
Once appointed, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board. 
From time to time the Board may increase the size of the Committee and
appoint additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies, however caused,
and remove all members of the Committee and thereafter directly make grants to
Reporting Persons under the Plan, all to the extent permitted by
Rule 16b-3.

 

(iii)          Administration With Respect to Consultants and
Other Employees.  With
respect to grants of Options or Stock Purchase Rights to Employees or
Consultants who are not Reporting Persons, the Plan shall be administered by
(A) the Board or (B) a Committee designated by the Board, which
Committee shall be constituted in such a manner as to satisfy the legal
requirements relating to the administration of Incentive Stock Option plans, if
any, of applicable corporate and securities laws, of the Code and of any
applicable Stock Exchange (the “Applicable Laws”).  Once appointed, such Committee shall continue
to serve in its designated capacity until otherwise directed by the Board.  From time to time the Board may increase the
size of the Committee and appoint additional members thereof, remove members (with
or without cause) and appoint new members in substitution therefor, fill
vacancies, however caused, and remove all members of the Committee and
thereafter directly administer the Plan, all to the extent permitted by the
Applicable Laws.

 

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

 

(i)            to
determine the Fair Market Value of the Common Stock, in accordance with Section 2(k)
of the Plan;

 

4

 

(ii)           to select
the Consultants and Employees to whom Options and Stock Purchase Rights or any
combination thereof may from time to time be granted hereunder;

 

(iii)          to
determine whether and to what extent Options and Stock Purchase Rights or any
combination thereof are granted hereunder;

 

(iv)          to
determine the number of shares of Common Stock to be covered by each such award
granted hereunder;

 

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

 

(vi)          to
determine the terms and conditions, not inconsistent with the terms of the
Plan, of any award granted hereunder;

 

(vii)         to
determine whether and under what circumstances an Option may be settled in cash
under Section 9(f) instead of Common Stock;

 

(viii)        to
reduce the exercise price of any Option to the then current Fair Market Value
if the Fair Market Value of the Common Stock covered by such Option shall have
declined since the date the Option was granted;

 

(ix)           to
determine the terms and restrictions applicable to Stock Purchase Rights and
the Restricted Stock purchased by exercising such Stock Purchase Rights;

 

(x)            to
construe and interpret the terms of the Plan and awards granted pursuant to the
Plan; and

 

(xi)           in order
to fulfill the purposes of the Plan and without amending the Plan, to modify
grants of Options or Stock Purchase Rights to participants who are foreign
nationals or employed outside of the United States in order to recognize
differences in local law, tax policies or customs.

 

(d)           Effect of Administrator’s Decision.  All decisions, determinations and
interpretations of the Administrator shall be final and binding on all holders
of Options or Stock Purchase Rights.

 

5.             Eligibility.

 

(a)           Recipients of Grants.  Nonstatutory Stock Options and Stock Purchase
Rights may be granted to Employees and Consultants.  Incentive Stock Options may be granted only
to Employees.  An Employee or Consultant
who has been granted an Option or Stock Purchase Right may, if he or she is
otherwise eligible, be granted additional Options or Stock Purchase Rights.

 

(b)           Type of Option.  Each Option shall be designated in the Option
Agreement as either an Incentive Stock Option or a Nonstatutory Stock
Option.  However, notwithstanding such
designations, to the extent that the aggregate Fair Market Value of Shares

 

5

 

with respect to which
Options designated as Incentive Stock Options are exercisable for the first
time by any Optionee during any calendar year (under all plans of the Company
or any Parent or Subsidiary) exceeds $100,000, such excess Options shall be
treated as Nonstatutory Stock Options. 
For purposes of this Section 5(b), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares subject to an Incentive Stock Option shall be determined as
of the date of the grant of such Option.

 

(c)           The Plan
shall not confer upon the holder of any Option or Stock Purchase Right any
right with respect to continuation of employment or consulting relationship
with the Company, nor shall it interfere in any way with such holder’s right or
the Company’s right to terminate his or her employment or consulting
relationship at any time, with or without cause.

 

6.             Term of Plan.  The Plan shall become effective upon the
earlier to occur of its adoption by the Board of Directors or its approval by
the stockholders of the Company as described in Section 19 of the
Plan.  It shall continue in effect for a
term of ten years unless sooner terminated under Section 15 of the Plan.

 

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

 

8.             Option Exercise Price and Consideration.

 

(a)           The per
share exercise price for the Shares to be issued pursuant to exercise of an
Option shall be such price as is determined by the Board and set forth in the
applicable agreement, but shall be subject to the following:

 

(i)            In the
case of an Incentive Stock Option that is:

 

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

 

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

 

(ii)           In the
case of a Nonstatutory Stock Option that is:

 

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

 

6

 

(B)           granted to
any person, the per Share exercise price shall be no less than 85% of the Fair
Market Value per Share on the date of grant.

 

(b)           The
consideration to be paid for the Shares to be issued upon exercise of an
Option, including the method of payment, shall be determined by the
Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash,
(2) check, (3) promissory note (subject to the provisions of Section 153
of the Delaware General Corporation Law), (4) other Shares that
(x) in the case of Shares acquired upon exercise of an Option, have been
owned by the Optionee for more than six months on the date of surrender or such
other period as may be required to avoid a charge to the Company’s earnings,
and (y) have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which such Option shall be
exercised, (5) authorization for the Company to retain from the total
number of Shares as to which the Option is exercised that number of Shares
having a Fair Market Value on the date of exercise equal to the exercise price
for the total number of Shares as to which the Option is exercised,
(6) delivery of a properly executed exercise notice together with such
other documentation as the Administrator and the broker, if applicable, shall
require to effect an exercise of the Option and delivery to the Company of the
sale or loan proceeds required to pay the exercise price and any applicable
income or employment taxes, (7) delivery of an irrevocable subscription
agreement for the Shares that irrevocably obligates the option holder to take
and pay for the Shares not more than twelve months after the date of delivery
of the subscription agreement, (8) any combination of the foregoing
methods of payment, or (9) such other consideration and method of payment
for the issuance of Shares to the extent permitted under the Applicable
Laws.  In making its determination as to
the type of consideration to accept, the Administrator shall consider if
acceptance of such consideration may be reasonably expected to benefit the
Company.

 

9.             Exercise of Option.

 

(a)           Procedure for Exercise; Rights as a Stockholder.  Any Option granted hereunder shall be
exercisable at such times and under such conditions as determined by the
Administrator and reflected in the Option Agreement, which may include vesting
requirements and/or performance criteria with respect to the Company and/or the
Optionee; provided, however, that such Option shall become exercisable at the
rate of at least 20% per year over five years from the date the Option is
granted. In the event that any of the Shares issued upon exercise of an Option
should be subject to a right of repurchase in the Company’s favor, such
repurchase right shall lapse at the rate of at least 20% per year over five
years from the date the Option is granted. Notwithstanding the above, in the
case of an Option granted to an officer, director or Consultant of the Company
or any Parent or Subsidiary of the Company, the Option may become fully
exercisable, and a repurchase right, if any, in favor of the Company shall
lapse, at any time or during any period established by the Administrator.

 

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

 

An Option shall be deemed
to be exercised when written notice of such exercise has been given to the
Company in accordance with the terms of the Option by the person entitled to
exercise the Option and the Company has received full payment for the Shares
with respect to which the Option is exercised. 
Full payment may, as authorized by the Board, consist of any

 

7

 

consideration and method
of payment allowable under Section 8(b) of the Plan.  Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the stock certificate evidencing such Shares, no right
to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Optioned Stock, not withstanding the exercise of the
Option.  The Company shall issue (or cause
to be issued) such stock certificate promptly upon exercise of the Option.  No adjustment will be made for a dividend or
other right for which the record date is prior to the date the stock
certificate is issued, except as provided in Section 12 of the Plan.

 

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

 

(b)           Termination of Employment or Consulting Relationship.  Subject to Section 9(c) below, in the
event of termination of an Optionee’s Continuous Status as an Employee or
Consultant with the Company, such Optionee may, but only within three months
(or such other period of time not less than 30 days as is determined by the
Administrator, with such determination in the case of an Incentive Stock Option
being made at the time of grant of the Option and not exceeding three months)
after the date of such termination (but in no event later than the expiration
date of the term of such Option as set forth in the Option Agreement), exercise
his or her Option to the extent that the Optionee was entitled to exercise it
at the date of such termination.  To the
extent that the Optionee was not entitled to exercise the Option at the date of
such termination, or if the Optionee does not exercise such Option to the
extent so entitled within the time specified herein, the Option shall
terminate.  No termination shall be
deemed to occur and this Section 9(b) shall not apply if (i) the
Optionee is a Consultant who becomes an Employee, or (ii) the Optionee is
an Employee who becomes a Consultant.

 

(c)           Disability of Optionee.

 

(i)            Notwithstanding
Section 9(b) above, in the event of termination of an Optionee’s
Continuous Status as an Employee or Consultant as a result of his or her total
and permanent disability (within the meaning of Section 22(e)(3) of the
Code), such Optionee may, but only within twelve months from the date of such
termination (but in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise the Option to the extent
otherwise entitled to exercise it at the date of such termination.  To the extent that the Optionee was not
entitled to exercise the Option at the date of termination, or if the Optionee
does not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate.

 

(ii)           In the
event of termination of an Optionee’s Continuous Status as an Employee or Consultant
as a result of a disability which does not fall within the meaning of total and
permanent disability (as set forth in Section 22(e)(3) of the Code), such
Optionee may, but only within six months from the date of such termination (but
in no event later than the expiration date of the term of such Option as set
forth in the Option Agreement), exercise the Option to the extent otherwise
entitled to exercise it at the date of such termination.  However, to the extent that such Optionee
fails to exercise an Option which is an Incentive Stock Option (“ISO”)
(within the meaning of Section 422 of the Code) within three months of the
date of such

 

8

 

termination, the Option
will not qualify for ISO treatment under the Code.  To the extent that the Optionee was not
entitled to exercise the Option at the date of termination, or if the Optionee
does not exercise such Option to the extent so entitled within six months from
the date of termination, the Option shall terminate.

 

(d)           Death of Optionee.  In the event of the death of an Optionee
during the period of Continuous Status as an Employee or Consultant since the
date of grant of the Option, or within 30 days following termination of the
Optionee’s Continuous Status as an Employee or Consultant, the Option may be
exercised, at any time within six months following the date of death (but in no
event later than the expiration date of the term of such Option as set forth in
the Option Agreement), by such Optionee’s estate or by a person who acquired
the right to exercise the Option by bequest or inheritance, but only to the
extent of the right to exercise that had accrued at the date of death or, if
earlier, the date of termination of the Optionee’s Continuous Status as an
Employee or Consultant.  To the extent
that the Optionee was not entitled to exercise the Option at the date of death
or termination, as the case may be, or if the Optionee does not exercise such
Option to the extent so entitled within the time specified herein, the Option
shall terminate.

 

(e)           Rule 16b-3.  Options granted to Reporting Persons shall
comply with Rule 16b-3 and shall contain such additional conditions or
restrictions as may be required thereunder to qualify for the maximum exemption
for Plan transactions.

 

10.           Stock Purchase Rights.

 

(a)           Rights to Purchase.  Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. 
After the Administrator determines that it will offer Stock Purchase
Rights under the Plan, it shall advise the offeree in writing of the terms,
conditions and restrictions related to the offer, including the number of
Shares that such person shall be entitled to purchase, the price to be paid
(which price shall not be less than 85% of the Fair Market Value of the Shares
as of the date of the offer, or, in the case of a person owning stock
representing more than 10% of the total combined voting power of all classes of
stock of the Company or any Parent or Subsidiary, the price shall not be less
than 100% of the Fair Market Value of the Shares as of the date of the offer),
and the time within which such person must accept such offer, which shall in no
event exceed 30 days from the date upon which the Administrator made the
determination to grant the Stock Purchase Right.  The offer shall be accepted by execution of a
Restricted Stock Purchase Agreement in the form determined by the Administrator.

 

(b)           Repurchase Option.  Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser’s employment with the Company for any reason (including death or
disability).  The purchase price for
Shares repurchased pursuant to the Restricted Stock Purchase Agreement shall be
the original purchase price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The
repurchase option shall lapse at such rate as the Administrator may determine;
provided, however, that with respect to an Optionee who is not an officer,
director or Consultant

 

9

 

of the Company or of any
Parent or Subsidiary of the Company, it shall lapse at a minimum rate of 20%
per year.

 

(c)           Other Provisions.  The Restricted Stock Purchase Agreement shall
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.  In addition, the provisions of Restricted
Stock Purchase Agreements need not be the same with respect to each purchaser.

 

(d)           Rights as a Stockholder.  Once the Stock Purchase Right is exercised, the
purchaser shall have the rights equivalent to those of a stockholder, and shall
be a stockholder when his or her purchase is entered upon the records of the
duly authorized transfer agent of the Company. 
No adjustment will be made for a dividend or other right for which the
record date is prior to the date the Stock Purchase Right is exercised, except
as provided in Section 12 of the Plan.

 

11.           Stock Withholding to Satisfy Withholding Tax
Obligations.  At the
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph.  When an
Optionee incurs tax liability in connection with an Option or Stock Purchase
Right, which tax liability is subject to tax withholding under applicable tax
laws, and the Optionee is obligated to pay the Company an amount required to be
withheld under applicable tax laws, the Optionee may satisfy the withholding
tax obligation by one or some combination of the following methods:  (a) by cash or check payment, or
(b) out of the Optionee’s current compensation, (c) if permitted by
the Administrator, in its discretion, by surrendering to the Company Shares
that (i) in the case of Shares previously acquired from the Company, have
been owned by the Optionee for more than six months on the date of surrender,
and (ii) have a fair market value on the date of surrender equal to or
less than the Optionee’s marginal tax rate times the ordinary income
recognized, or (d) by electing to have the Company withhold from the
Shares to be issued upon exercise of the Option, or the Shares to be issued in
connection with the Stock Purchase Right, if any, that number of Shares having
a fair market value equal to the amount required to be withheld.  For this purpose, the fair market value of
the Shares to be withheld shall be determined on the date that the amount of
tax to be withheld is to be determined (the “Tax Date”).

 

Any surrender by a
Reporting Person of previously owned Shares to satisfy tax withholding
obligations arising upon exercise of this Option must comply with the
applicable provisions of Rule 16b-3.

 

All elections by an
Optionee to have Shares withheld to satisfy tax withholding obligations shall
be made in writing in a form acceptable to the Administrator and shall be
subject to the following restrictions:

 

(a)           the
election must be made on or prior to the applicable Tax Date;

 

(b)           once made,
the election shall be irrevocable as to the particular Shares of the Option or
Stock Purchase Right as to which the election is made; and

 

(c)           all
elections shall be subject to the consent or disapproval of the Administrator.

 

10

 

In the event the election
to have Shares withheld is made by an Optionee and the Tax Date is deferred
under Section 83 of the Code because no election is filed under Section 83(b)
of the Code, the Optionee shall receive the full number of Shares with respect
to which the Option or Stock Purchase Right is exercised but such Optionee
shall be unconditionally obligated to tender back to the Company the proper
number of Shares on the Tax Date.

 

12.           Adjustments Upon Changes in Capitalization, Merger
or Certain Other Transactions.

 

(a)           Changes in Capitalization.  Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option or Stock Purchase Right, and the number of shares of
Common Stock that have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or that have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination, recapitalization or reclassification of the Common Stock, or any
other increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be
deemed to have been “effected without receipt of consideration.”  Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and
conclusive.  Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to an Option or Stock Purchase Right.

 

(b)           Dissolution or Liquidation.  In the event of the proposed dissolution or
liquidation of the Company, the Board shall notify the Optionee at least 15
days prior to such proposed action.  To
the extent it has not been previously exercised, the Option or Stock Purchase
Right will terminate immediately prior to the consummation of such proposed
action.

 

(c)           Merger or Sale of Assets.  In the event of a proposed sale of all or
substantially all of the Company’s assets or a merger of the Company with or
into another corporation where the successor corporation issues its securities
to the Company’s stockholders, each outstanding Option or Stock Purchase Right
shall be assumed or an equivalent option or right shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation,
unless the successor corporation does not agree to assume the Option or Stock
Purchase Right or to substitute an equivalent option or right, in which case
such Option or Stock Purchase Right shall terminate upon the consummation of
the merger or sale of assets. For purposes of this Section 12(c), an
Option or a Stock Purchase Right shall be considered assumed, without
limitation, if, at the time of issuance of the stock or other consideration
upon such merger or sale of assets, each holder of an Option or a Stock Purchase
Right would be entitled to receive upon exercise of the Option or Stock
Purchase Right the same number and kind of shares of stock or the same amount
of property, cash or securities as such holder would have been entitled to
receive upon the occurrence of such transaction if the holder had been,
immediately

 

11

 

prior to such
transaction, the holder of the number of Shares of Common Stock covered by the
Option or the Stock Purchase Right at such time (after giving effect to any
adjustments in the number of Shares covered by the Option or Stock Purchase
Right as provided for in this Section 12).

 

(d)           Certain Distributions.  In the event of any distribution to the
Company’s stockholders of securities of any other entity or other assets (other
than dividends payable in cash or stock of the Company) without receipt of
consideration by the Company, the Administrator may, in its discretion,
appropriately adjust the price per share of Common Stock covered by each
outstanding Option or Stock Purchase Right to reflect the effect of such
distribution.

 

13.           Non-Transferability of Options and Stock Purchase
Rights.  Options and Stock
Purchase Rights may not be sold, pledged, assigned, hypothecated, transferred,
or disposed of in any manner other than by will or by the laws of descent or
distribution and may be exercised or purchased during the lifetime of the
Optionee or Stock Purchase Rights Holder only by the Optionee or Stock Purchase
Rights Holder.

 

14.           Time of Granting Options and Stock Purchase Rights.  The date of grant of an Option or Stock
Purchase Right shall, for all purposes, be the date on which the Administrator
makes the determination granting such Option or Stock Purchase Right, or such
other date as is determined by the Board; provided, however, that in the case
of any Incentive Stock Option, the grant date shall be the later of the date on
which the Administrator makes the determination granting such Incentive Stock
Option or the date of commencement of the Optionee’s employment relationship
with the Company.  Notice of the
determination shall be given to each Employee or Consultant to whom an Option
or Stock Purchase Right is so granted within a reasonable time after the date of
such grant.

 

15.           Amendment and Termination of the Plan.

 

(a)           Authority to Amend or Terminate.  The Board may at any time amend, alter,
suspend or discontinue the Plan, but no amendment, alteration, suspension or
discontinuation shall be made that would impair the rights of any Optionee
under any grant theretofore made, without his or her consent.  In addition, to the extent necessary and
desirable to comply with Rule 16b-3 or with Section 422 of the Code (or
any other applicable law or regulation, including the requirements of any Stock
Exchange), the Company shall obtain stockholder approval of any Plan amendment
in such a manner and to such a degree as required.

 

(b)           Effect of Amendment or Termination.  No amendment or termination of the Plan shall
adversely affect Options already granted, unless mutually agreed otherwise
between the Optionee and the Board, which agreement must be in writing and
signed by the Optionee and the Company.

 

16.           Conditions Upon Issuance of Shares.  Shares shall not be issued pursuant to the
exercise of an Option or Stock Purchase Right unless the exercise of such
Option or Stock Purchase Right and the issuance and delivery of such Shares
pursuant thereto shall comply with all relevant provisions of law, including,
without limitation, the Securities Act of 1933, as

 

12

 

amended, the Exchange
Act, the rules and regulations promulgated thereunder, and the requirements of
any Stock Exchange.

 

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

 

17.           Reservation of Shares.  The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.  The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

 

18.           Agreements.  Options and Stock Purchase Rights shall be
evidenced by written Option Agreements and Restricted Stock Purchase Agreements,
respectively, in such form(s) as the Administrator shall approve from time to
time.

 

19.           Stockholder Approval.  Continuance of the Plan shall be subject to
approval by the stockholders of the Company within twelve months before or
after the date the Plan is adopted.  Such
stockholder approval shall be obtained in the degree and manner required under
applicable state and federal law and the rules of any Stock Exchange upon which
the Common Stock is listed.  All Options
and Stock Purchase Rights issued under the Plan shall become void in the event
such approval is not obtained.

 

20.           Information and Documents to Optionees and
Purchasers.  The Company
shall provide financial statements at least annually to each Optionee and to
each individual who acquired Shares Pursuant to the Plan, during the period
such Optionee or purchaser has one or more Options or Stock Purchase Rights
outstanding, and in the case of an individual who acquired Shares pursuant to
the Plan, during the period such individual owns such Shares.  The Company shall not be required to provide
such information if the issuance of Options or Stock Purchase Rights under the
Plan is limited to key employees whose duties in connection with the Company
assure their access to equivalent information. 
In addition, at the time of issuance of any securities under the Plan,
the Company shall provide to the Optionee or the Purchaser a copy of the Plan
and any agreement(s) pursuant to which securities granted under the Plan are
issued.

 

13

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