Document:

Unassociated Document

Atomica
Corporation 2000 Stock Plan

 

Notice
of Stock Option Grant

 

 

You have
been granted the following option to purchase shares of the Common Stock of
Atomica Corporation (the “Company”):

 

	 	Name of Optionee: 	 	«Name» 
	 	 	 	 
	 	Total Number of Shares: 	 	«TotalShares» 
	 	 	 	 
	 	Type of Option: 	 	«ISO» Incentive
      Stock Option 
	 	 	 	 
	 	 	 	«NSO» Nonstatutory
      Stock Option 
	 	 	 	 
	 	 	 	
      «3(i)» Section 3(i)
      Option (Israeli Income Tax Ordinance)

	 	 	 	 
	 	Exercise Price Per Share: 	 	$«PricePerShare» 
	 	 	 	 
	 	Date of Grant: 	 	«DateGrant» 
	 	 	 	 
	 	
      Date
      Exercisable: 
	 	
      This
      option may be exercised at any time after the Date of Grant for all or any
      part of the Shares subject to this option. 

	 	 	 	 
	 	Vesting Commencement Date: 	 	«VestComDate» 
	 	 	 	 
	 	
      Vesting
      Schedule: 
	 	
      The
      Right of Repurchase shall lapse with respect to the first 25% of the
      Shares subject to this option when the Optionee completes 12 months of
      continuous Service after the Vesting Com-mencement Date. The Right of
      Repurchase shall lapse with respect to an additional 2.08333% of the
      Shares subject to this option when the Optionee completes each month of
      continuous Service thereafter. 

	 	 	 	 
	 	Expiration Date: 	 	«ExpDate» 

 

By your
signature and the signature of the Company’s representative below, you and the
Company agree that this option is granted under and governed by the terms and
conditions of the 2000 Stock Plan and the Stock Option Agreement, both of which
are attached to and made a part of this document.

 

	Optionee: 	 	Atomica Corporation 
	 	 	 
	                                                             
       	 	By:                                                               
	 	 	Title:                                                             

  

 

THE
OPTION GRANTED PURSUANT TO THIS AGREEMENT AND THE SHARES ISSUABLE UPON THE
EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.

 

Atomica
Corporation 2000 Stock Plan:

Stock
Option Agreement

 

SECTION
1.  
GRANT OF OPTION.

 

(a)  Option. On the
terms and conditions set forth in the Notice of Stock Option Grant and this
Agreement, the Company grants to the Optionee on the Date of Grant the option to
purchase at the Exercise Price the number of Shares set forth in the Notice of
Stock Option Grant. The Exercise Price is agreed to be at least 100% of the Fair
Market Value per Share on the Date of Grant (110% of Fair Market Value if
Section 3(b) of the Plan applies). This option is intended to be an ISO, a
Nonstatutory Option, or a Nonstatutory Option described in Section 14, as
provided in the Notice of Stock Option Grant.

 

(b)  Stock
Plan and Defined Terms. This
option is granted pursuant to the Plan, a copy of which the Optionee
acknowledges having received. The provisions of the Plan are incorporated into
this Agreement by this reference. Capitalized terms are defined in
Section 15 of this Agreement.

 

SECTION
2.  
RIGHT TO EXERCISE.

 

(a)  Exercisability. Subject
to Subsections (b) and (c) below and the other conditions set forth in this
Agreement, all or part of this option may be exercised prior to its expiration
at the time or times set forth in the Notice of Stock Option Grant. Shares
purchased by exercising this option may be subject to the Right of Repurchase
under Section 7.

 

(b)  $100,000
Limitation. If this
option is designated as an ISO in the Notice of Stock Option Grant, then the
Optionee’s right to exercise this option shall be deferred to the extent (and
only to the extent) that this option otherwise would not be treated as an ISO by
reason of the $100,000 annual limitation under Section 422(d) of the Code,
except that:

 

(i)  The
Optionee’s right to exercise this option shall in any event become exercisable
at least as rapidly as 20% per year over the five-year period commencing on the
Date of Grant, unless the Optionee is an officer of the Company, an Outside
Director or a Consultant; and

 

 

(ii)  The
Optionee’s right to exercise this option shall no longer be deferred if
(A) the Company is subject to a Change in Control before the Optionee’s
Service terminates, (B) this option does not remain outstanding,
(C) this option is not assumed by the surviving corporation or its parent
and (D) the surviving corporation or its parent does not substitute an
option with substantially the same terms for this option.

 

(c)  Stockholder
Approval. Any
other provision of this Agreement notwithstanding, no portion of this option
shall be exercisable at any time prior to the approval of the Plan by the
Company’s stockholders.

 

SECTION
3.  
NO TRANSFER OR ASSIGNMENT OF OPTION.

 

Except as
otherwise provided in this Agreement, this option and the rights and privileges
conferred hereby shall not be sold, pledged or otherwise transferred (whether by
operation of law or otherwise) and shall not be subject to sale under execution,
attachment, levy or similar process.

 

SECTION
4.  
EXERCISE PROCEDURES.

 

(a)  Notice
of Exercise. The
Optionee or the Optionee’s representative may exercise this option by giving
written notice to the Company pursuant to Section 13(c). The notice shall
specify the election to exercise this option, the number of Shares for which it
is being exercised and the form of payment. The person exercising this option
shall sign the notice. In the event that this option is being exercised by the
representative of the Optionee, the notice shall be accompanied by proof
(satisfactory to the Company) of the representative’s right to exercise this
option. The Optionee or the Optionee’s representative shall deliver to the
Company, at the time of giving the notice, payment in a form permissible under
Section 5 for the full amount of the Purchase Price.

 

(b)  Issuance
of Shares. After
receiving a proper notice of exercise, the Company shall cause to be issued a
certificate or certificates for the Shares as to which this option has been
exercised, registered in the name of the person exercising this option (or in
the names of such person and his or her spouse as community property or as joint
tenants with right of survivorship). The Company shall cause such certificate or
certificates to be deposited in escrow or delivered to or upon the order of the
person exercising this option.

 

(c)  Withholding
Taxes. In the
event that the Company determines that it is required to withhold any tax as a
result of the exercise of this option, the Optionee, as a condition to the
exercise of this option, shall make arrangements satisfactory to the Company to
enable it to satisfy all withholding requirements. The Optionee shall also make
arrangements satisfactory to the Company to enable it to satisfy any withholding
requirements that may arise in connection with the vesting or disposition of
Shares purchased by exercising this option.

 

SECTION
5.  
Payment For Stock.

 

(a)  Cash. All or
part of the Purchase Price may be paid in cash or cash equivalents.

 

2

 

(b)  Surrender
of Stock. All or
any part of the Purchase Price may be paid by surrendering, or attesting to the
ownership of, Shares that are already owned by the Optionee. Such Shares shall
be surrendered to the Company in good form for transfer and shall be valued at
their Fair Market Value on the date when this option is exercised. The Optionee
shall not surrender, or attest to the ownership of, Shares in payment of the
Purchase Price if such action would cause the Company to recognize compensation
expense (or additional compensation expense) with respect to this option for
financial reporting purposes.

 

(c)  Exercise/Sale. If
Stock is publicly traded, all or part of the Purchase Price and any withholding
taxes may be paid by the delivery (on a form prescribed by the Company) of an
irrevocable direction to a securities broker approved by the Company to sell
Shares and to deliver all or part of the sales proceeds to the
Company.

 

(d)  Exercise/Pledge. If
Stock is publicly traded, all or part of the Purchase Price and any withholding
taxes may be paid by the delivery (on a form prescribed by the Company) of an
irrevocable direction to pledge Shares to a securities broker or lender approved
by the Company, as security for a loan, and to deliver all or part of the loan
proceeds to the Company.

 

SECTION
6.  
Term And Expiration.

 

(a)  Basic
Term. This
option shall in any event expire on the expiration date set forth in the Notice
of Stock Option Grant, which date is 10 years after the Date of Grant (five
years after the Date of Grant if this option is designated as an ISO in the
Notice of Stock Option Grant and Section 3(b) of the Plan
applies).

 

(b)  Termination
of Service (Except by Death). If the
Optionee’s Service terminates for any reason other than death, then this option
shall expire on the earliest of the following occasions:

 

(i)  The
expiration date determined pursuant to Subsection (a) above;

 

(ii)  The date
three months after the termination of the Optionee’s Service for any reason
other than Disability; or

 

(iii)  The date
six months after the termination of the Optionee’s Service by reason of
Disability.

 

The
Optionee may exercise all or part of this option at any time before its
expiration under the preceding sentence, but only to the extent that this option
had become exercisable for vested shares before the Optionee’s Service
terminated. When the Optionee’s Service terminates, this option shall expire
immediately with respect to the number of Shares for which this option is not
yet exercisable and with respect to any Restricted Shares. In the event that the
Optionee dies after termination of Service but before the expiration of this
option, all or part of this option may be exercised (prior to expiration) by the
executors or administrators of the Optionee’s estate or by any person who has
acquired this option directly from the Optionee by beneficiary designation,
bequest or inheritance, but only to the extent that this option had become
exercisable before the Optionee’s Service terminated.

 

3

 

(c)  Death
of the Optionee. If the
Optionee dies while in Service, then this option shall expire on the earlier of
the following dates:

 

(i)  The
expiration date determined pursuant to Subsection (a) above;
or

 

(ii)  The date
12 months after the Optionee’s death.

 

All or
part of this option may be exercised at any time before its expiration under the
preceding sentence by the executors or administrators of the Optionee’s estate
or by any person who has acquired this option directly from the Optionee by
beneficiary designation, bequest or inheritance, but only to the extent that
this option had become exercisable before the Optionee’s death. When the
Optionee dies, this option shall expire immediately with respect to the number
of Shares for which this option is not yet exercisable and with respect to any
Restricted Shares.

 

(d)  Leaves
of Absence. For any
purpose under this Agreement, Service shall be deemed to continue while the
Optionee is on a bona fide leave of absence, if such leave was approved by the
Company in writing and if continued crediting of Service for such purpose is
expressly required by the terms of such leave or by applicable law (as
determined by the Company).

 

(e)  Notice
Concerning ISO Treatment. If this
option is designated as an ISO in the Notice of Stock Option Grant, it ceases to
qualify for favorable tax treatment as an ISO to the extent it is exercised
(i) more than three months after the date the Optionee ceases to be an
Employee for any reason other than death or permanent and total disability (as
defined in Section 22(e)(3) of the Code), (ii) more than 12 months
after the date the Optionee ceases to be an Employee by reason of such permanent
and total disability or (iii) after the Optionee has been on a leave of
absence for more than 90 days, unless the Optionee’s reemployment rights are
guaranteed by statute or by contract.

 

SECTION
7.  
RIGHT OF REPURCHASE.

 

(a)  Scope
of Repurchase Right. Unless
they have become vested in accordance with the Notice of Stock Option Grant and
Subsection (c) below, the Shares acquired under this Agreement initially
shall be Restricted Shares and shall be subject to a right (but not an
obligation) of repurchase by the Company. The Optionee shall not transfer,
assign, encumber or otherwise dispose of any Restricted Shares without the
Company’s written consent, except as provided in the following sentence. The
Optionee may transfer Restricted Shares (i) by beneficiary designation,
will or intestate succession or (ii) to the Optionee’s spouse, children or
grandchildren or to a trust established by the Optionee for the benefit of the
Optionee or the Optionee’s spouse, children or grandchildren, provided in either
case that the Transferee agrees in writing on a form prescribed by the Company
to be bound by all provisions of this Agreement. If the Optionee transfers any
Restricted Shares, then this Section 7 shall apply to the Transferee to the
same extent as to the Optionee.

 

4

 

(b)  Condition
Precedent to Exercise. The
Right of Repurchase shall be exercisable with respect to any Restricted Shares
only during the 60-day period next following the later of:

 

(i)  The date
when the Optionee’s Service terminates for any reason, with or without cause,
including (without limitation) death or disability; or

 

(ii)  The date
when such Restricted Shares were purchased by the Optionee, the executors or
administrators of the Optionee’s estate or any person who has acquired this
option directly from the Optionee by bequest, inheritance or beneficiary
designation.

 

(c)  Lapse
of Repurchase Right. The
Right of Repurchase shall lapse with respect to the Shares subject to this
option in accordance with the vesting schedule set forth in the Notice of Stock
Option Grant. In addition, the following rules shall apply if the Company is
subject to a Change in Control before the Optionee’s Service
terminates:

 

(i)  If the
Right of Repurchase is not assigned to the entity that employs the Optionee
immediately after the Change in Control or to its parent or subsidiary, then the
Right of Repurchase shall lapse and all of the remaining Restricted Shares shall
become vested.

 

(ii)  If the
Right of Repurchase is assigned to the entity that employs the Optionee
immediately after the Change in Control or to its parent or subsidiary, and if
the Optionee is subject to an Involuntary Termination within 12 months after the
Change in Control, then the vested portion of the Restricted Shares shall be
determined by adding 12 months to the Optionee’s actual Service.

 

(d)  Repurchase
Cost. If the
Company exercises the Right of Repurchase, it shall pay the Optionee an amount
equal to the Exercise Price for each of the Restricted Shares being
repurchased.

 

(e)  Exercise
of Repurchase Right. The
Right of Repurchase shall be exercisable only by written notice delivered to the
Optionee prior to the expiration of the 60-day period specified in
Subsection (b) above. The notice shall set forth the date on which the
repurchase is to be effected. Such date shall not be more than 30 days after the
date of the notice. The certificate(s) representing the Restricted Shares to be
repurchased shall, prior to the close of business on the date specified for the
repurchase, be delivered to the Company properly endorsed for transfer. The
Company shall, concurrently with the receipt of such certificate(s), pay to the
Optionee the purchase price determined according to Subsection (d) above.
Payment shall be made in cash or cash equivalents or by canceling indebtedness
to the Company incurred by the Optionee in the purchase of the Restricted
Shares. The Right of Repurchase shall terminate with respect to any Restricted
Shares for which it has not been timely exercised pursuant to this
Subsection (e).

 

(f)  Additional
Shares or Substituted Securities. In the
event of the declaration of a stock dividend, the declaration of an
extraordinary dividend payable in a form other than stock, a spin-off, a stock
split, an adjustment in conversion ratio, a recapitalization or a similar
transaction affecting the Company’s outstanding securities without receipt of
consideration, any new, substituted or additional securities or other property
(including money paid other than as an ordinary cash dividend) which are by
reason of such transaction distributed with respect to any Restricted Shares or
into which such Restricted Shares thereby become convertible shall immediately
be subject to the Right of Repurchase. Appropriate adjustments to reflect the
distribution of such securities or property shall be made to the number and/or
class of the Restricted Shares. Appropriate adjustments shall also, after each
such transaction, be made to the price per share to be paid upon the exercise of
the Right of Repurchase in order to reflect any change in the Company’s
outstanding securities effected without receipt of consideration therefor;
provided, however, that the aggregate purchase price payable for the Restricted
Shares shall remain the same.

 

5

 

(g)  Termination
of Rights as Stockholder. If the
Company makes available, at the time and place and in the amount and form
provided in this Agreement, the consideration for the Restricted Shares to be
repurchased in accordance with this Section 7, then after such time the
person from whom such Restricted Shares are to be repurchased shall no longer
have any rights as a holder of such Restricted Shares (other than the right to
receive payment of such consideration in accordance with this Agreement). Such
Restricted Shares shall be deemed to have been repurchased in accordance with
the applicable provisions hereof, whether or not the certificate(s) therefor
have been delivered as required by this Agreement.

 

(h)  Escrow. Upon
issuance, the certificates for Restricted Shares shall be deposited in escrow
with the Company to be held in accordance with the provisions of this Agreement.
Any new, substituted or additional securities or other property described in
Subsection (f) above shall immediately be delivered to the Company to be
held in escrow, but only to the extent the Shares are at the time Restricted
Shares. All regular cash dividends on Restricted Shares (or other securities at
the time held in escrow) shall be paid directly to the Optionee and shall not be
held in escrow. Restricted Shares, together with any other assets or securities
held in escrow hereunder, shall be (i) surrendered to the Company for
repurchase and cancellation upon the Company’s exercise of its Right of
Repurchase or Right of First Refusal or (ii) released to the Optionee upon
the Optionee’s request to the extent the Shares are no longer Restricted Shares
(but not more frequently than once every six months). In any event, all Shares
which have vested (and any other vested assets and securities attributable
thereto) shall be released within 60 days after the earlier of (i) the
Optionee's cessation of Service or (ii) the lapse of the Right of First
Refusal.

 

SECTION
8.  
RIGHT OF FIRST REFUSAL.

 

(a)  Right
of First Refusal. In the
event that the Optionee proposes to sell, pledge or otherwise transfer to a
third party any Shares acquired under this Agreement, or any interest in such
Shares, the Company shall have the Right of First Refusal with respect to all
(and not less than all) of such Shares. If the Optionee desires to transfer
Shares acquired under this Agreement, the Optionee shall give a written Transfer
Notice to the Company describing fully the proposed transfer, including the
number of Shares proposed to be transferred, the proposed transfer price, the
name and address of the proposed Transferee and proof satisfactory to the
Company that the proposed sale or transfer will not violate any applicable
federal or state securities laws. The Transfer Notice shall be signed both by
the Optionee and by the proposed Transferee and must constitute a binding
commitment of both parties to the transfer of the Shares. The Company shall have
the right to purchase all, and not less than all, of the Shares on the terms of
the proposal described in the Transfer Notice (subject, however, to any change
in such terms permitted under Subsection (b) below) by delivery of a notice
of exercise of the Right of First Refusal within 30 days after the date when the
Transfer Notice was received by the Company. The Company’s rights under this
Subsection (a) shall be freely assignable, in whole or in
part.

 

6

 

(b)  Transfer
of Shares. If the
Company fails to exercise its Right of First Refusal within 30 days after
the date when it received the Transfer Notice, the Optionee may, not later than
90 days following receipt of the Transfer Notice by the Company, conclude a
transfer of the Shares subject to the Transfer Notice on the terms and
conditions described in the Transfer Notice, provided that any such sale is made
in compliance with applicable federal and state securities laws and not in
violation of any other contractual restrictions to which the Optionee is bound.
Any proposed transfer on terms and conditions different from those described in
the Transfer Notice, as well as any subsequent proposed transfer by the
Optionee, shall again be subject to the Right of First Refusal and shall require
compliance with the procedure described in Subsection (a) above. If the
Company exercises its Right of First Refusal, the parties shall consummate the
sale of the Shares on the terms set forth in the Transfer Notice within
60 days after the date when the Company received the Transfer Notice (or
within such longer period as may have been specified in the Transfer Notice);
provided, however, that in the event the Transfer Notice provided that payment
for the Shares was to be made in a form other than cash or cash equivalents paid
at the time of transfer, the Company shall have the option of paying for the
Shares with cash or cash equivalents equal to the present value of the
consideration described in the Transfer Notice.

 

(c)  Additional
Shares or Substituted Securities. In the
event of the declaration of a stock dividend, the declaration of an
extraordinary dividend payable in a form other than stock, a spin-off, a stock
split, an adjustment in conversion ratio, a recapitalization or a similar
transaction affecting the Company’s outstanding securities without receipt of
consideration, any new, substituted or additional securities or other property
(including money paid other than as an ordinary cash dividend) which are by
reason of such transaction distributed with respect to any Shares subject to
this Section 8 or into which such Shares thereby become convertible shall
immediately be subject to this Section 8. Appropriate adjustments to
reflect the distribution of such securities or property shall be made to the
number and/or class of the Shares subject to this Section 8.

 

(d)  Termination
of Right of First Refusal. Any
other provision of this Section 8 notwithstanding, in the event that the
Stock is readily tradable on an established securities market when the Optionee
desires to transfer Shares, the Company shall have no Right of First Refusal,
and the Optionee shall have no obligation to comply with the procedures
prescribed by Subsections (a) and (b) above.

 

(e)  Permitted
Transfers. This
Section 8 shall not apply to (i) a transfer by beneficiary
designation, will or intestate succession or (ii) a transfer to the
Optionee’s spouse, children or grandchildren or to a trust established by the
Optionee for the benefit of the Optionee or the Optionee’s spouse, children or
grandchildren, provided in either case that the Transferee agrees in writing on
a form prescribed by the Company to be bound by all provisions of this
Agreement. If the Optionee transfers any Shares acquired under this Agreement,
either under this Subsection (e) or after the Company has failed to
exercise the Right of First Refusal, then this Section 8 shall apply to the
Transferee to the same extent as to the Optionee.

 

7

 

(f)  Termination
of Rights as Stockholder. If the
Company makes available, at the time and place and in the amount and form
provided in this Agreement, the consideration for the Shares to be purchased in
accordance with this Section 8, then after such time the person from whom
such Shares are to be purchased shall no longer have any rights as a holder of
such Shares (other than the right to receive payment of such consideration in
accordance with this Agreement). Such Shares shall be deemed to have been
purchased in accordance with the applicable provisions hereof, whether or not
the certificate(s) therefor have been delivered as required by this
Agreement.

 

SECTION
9.  
LEGALITY OF INITIAL ISSUANCE.

 

No Shares
shall be issued upon the exercise of this option unless and until the Company
has determined that:

 

(a)  It and
the Optionee have taken any actions required to register the Shares under the
Securities Act or to perfect an exemption from the registration requirements
thereof;

 

(b)  Any
applicable listing requirement of any stock exchange or other securities market
on which Stock is listed has been satisfied; and

 

(c)  Any other
applicable provision of state or federal law has been satisfied. 

 

SECTION
10.  
NO REGISTRATION RIGHTS.

 

The
Company may, but shall not be obligated to, register or qualify the sale of
Shares under the Securities Act or any other applicable law. The Company shall
not be obligated to take any affirmative action in order to cause the sale of
Shares under this Agreement to comply with any law.

 

SECTION
11.  
RESTRICTIONS ON TRANSFER.

 

(a)  Securities
Law Restrictions.
Regardless of whether the offering and sale of Shares under the Plan have been
registered under the Securities Act or have been registered or qualified under
the securities laws of any state, the Company at its discretion may impose
restrictions upon the sale, pledge or other transfer of such Shares (including
the placement of appropriate legends on stock certificates or the imposition of
stop-transfer instructions) if, in the judgment of the Company, such
restrictions are necessary or desirable in order to achieve compliance with the
Securities Act, the securities laws of any state or any other law.

 

(b)  Market
Stand-Off. In
connection with any underwritten public offering by the Company of its equity
securities pursuant to an effective registration statement filed under the
Securities Act, including the Company’s initial public offering, the Optionee
shall not directly or indirectly sell, make any short sale of, loan,
hypothecate, pledge, offer, grant or sell any option or other contract for the
purchase of, purchase any option or other contract for the sale of, or otherwise
dispose of or transfer, or agree to engage in any of the foregoing transactions
with respect to, any Shares acquired under this Agreement without the prior
written consent of the Company or its underwriters. Such restriction (the
“Market Stand-Off”) shall be in effect for such period of time following the
date of the final prospectus for the offering as may be requested by the Company
or such underwriters. In no event, however, shall such period exceed 180 days.
The Market Stand-Off shall in any event terminate two years after the date of
the Company’s initial public offering. In the event of the declaration of a
stock dividend, a spin-off, a stock split, an adjustment in conversion ratio, a
recapitalization or a similar transaction affecting the Company’s outstanding
securities without receipt of consideration, any new, substituted or additional
securities which are by reason of such transaction distributed with respect to
any Shares subject to the Market Stand-Off, or into which such Shares thereby
become convertible, shall immediately be subject to the Market Stand-Off. In
order to enforce the Market Stand-Off, the Company may impose stop-transfer
instructions with respect to the Shares acquired under this Agreement until the
end of the applicable stand-off period. The Company’s underwriters shall be
beneficiaries of the agreement set forth in this Subsection (b). This
Subsection (b) shall not apply to Shares registered in the public offering
under the Securities Act, and the Optionee shall be subject to this Subsection
(b) only if the directors and officers of the Company are subject to similar
arrangements.

 

8

 

(c)  Investment
Intent at Grant. The
Optionee represents and agrees that the Shares to be acquired upon exercising
this option will be acquired for investment, and not with a view to the sale or
distribution thereof.

 

(d)  Investment
Intent at Exercise. In the
event that the sale of Shares under the Plan is not registered under the
Securities Act but an exemption is available which requires an investment
representation or other representation, the Optionee shall represent and agree
at the time of exercise that the Shares being acquired upon exercising this
option are being acquired for investment, and not with a view to the sale or
distribution thereof, and shall make such other representations as are deemed
necessary or appropriate by the Company and its counsel.

 

(e)  Legends. All
certificates evidencing Shares purchased under this Agreement shall bear the
following legend:

 

“THE
SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED OR
IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE TERMS OF A WRITTEN
AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER OF THE SHARES (OR THE
PREDECESSOR IN INTEREST TO THE SHARES). SUCH AGREEMENT GRANTS TO THE COMPANY
CERTAIN RIGHTS OF FIRST REFUSAL UPON AN ATTEMPTED TRANSFER OF THE SHARES AND
CERTAIN REPURCHASE RIGHTS UPON TERMINATION OF SERVICE WITH THE COMPANY. THE
SECRETARY OF THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH
AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE.”

 

9

 

All
certificates evidencing Shares purchased under this Agreement in an unregistered
transaction shall bear the following legend (and such other restrictive legends
as are required or deemed advisable under the provisions of any applicable law):

 

“THE
SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT
AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.”

 

(f)  Removal
of Legends. If, in
the opinion of the Company and its counsel, any legend placed on a stock
certificate representing Shares sold under this Agreement is no longer required,
the holder of such certificate shall be entitled to exchange such certificate
for a certificate representing the same number of Shares but without such
legend.

 

(g)  Administration. Any
determination by the Company and its counsel in connection with any of the
matters set forth in this Section 11 shall be conclusive and binding on the
Optionee and all other persons.

 

SECTION
12.  
ADJUSTMENT OF SHARES.

 

In the
event of any transaction described in Section 8(a) of the Plan, the terms
of this option (including, without limitation, the number and kind of Shares
subject to this option and the Exercise Price) shall be adjusted as set forth in
Section 8(a) of the Plan. In the event that the Company is a party to a
merger or consolidation, this option shall be subject to the agreement of merger
or consolidation, as provided in Section 8(b) of the Plan.

 

SECTION
13.  
MISCELLANEOUS PROVISIONS.

 

(a)  Rights
as a Stockholder. Neither
the Optionee nor the Optionee’s representative shall have any rights as a
stockholder with respect to any Shares subject to this option until the Optionee
or the Optionee’s representative becomes entitled to receive such Shares by
filing a notice of exercise and paying the Purchase Price pursuant to
Sections 4 and 5.

 

(b)  No
Retention Rights. Nothing
in this option or in the Plan shall confer upon the Optionee any right to
continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Company (or any Parent or
Subsidiary employing or retaining the Optionee) or of the Optionee, which rights
are hereby expressly reserved by each, to terminate his or her Service at any
time and for any reason, with or without cause.

 

(c)  Notice. Any
notice required by the terms of this Agreement shall be given in writing and
shall be deemed effective upon personal delivery or upon deposit with the United
States Postal Service, by registered or certified mail, with postage and fees
prepaid. Notice shall be addressed to the Company at its principal executive
office and to the Optionee at the address that he or she most recently provided
to the Company.

 

10

 

(d)  Entire
Agreement. The
Notice of Stock Option Grant, this Agreement and the Plan constitute the entire
contract between the parties hereto with regard to the subject matter hereof.
They supersede any other agreements, representations or understandings (whether
oral or written and whether express or implied) which relate to the subject
matter hereof.

 

(e)  Choice
of Law. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of California, as such laws are applied to contracts entered into and
performed in such State.

 

SECTION
14.  
SPECIAL PROVISIONS FOR RESIDENTS OF ISRAEL.

 

(a)  Scope. This
Section 14 shall apply only if the Optionee is an Israeli resident
(“Israeli Optionee”) and shall be governed by, and interpreted in accordance
with, the laws of the State of Israel.

 

(b)  Applicable
Tax Law. The
provisions of the Plan and this Agreement shall not apply to an Israeli Optionee
to the extent that they address (i) the Code or other laws of the United
States or any State thereof, (ii) the tax consequences of this option under
the laws of the United States, (iii) the qualification of this option as an
ISO or Nonstatutory Option or (iv) eligibility to receive each type of
option. All options granted to an Israeli Optionee shall be granted pursuant to
Section 3(i) of the Israeli Income Tax Ordinance.

 

(c)  Trustee. If
designated in the Notice of Stock Option Grant as a “Section 3(i) Option,”
then this Agreement may be deposited with a trustee (the “Trustee”) selected by
the Board of Directors. If the Board of Directors chooses to deposit this option
with the Trustee, then (i) this option shall be exercised in accordance
with the procedures agreed upon by the Company and the Trustee in a trust
agreement executed between them and, if applicable, a Subsidiary (the “Trust
Agreement”), (ii) the Trustee shall hold this option in trust pursuant to
the Company’s instructions until exercised by the Optionee, (iii) if
determined by the Board of Directors, the Trustee shall be responsible for
withholding any taxes to which the Optionee may become liable upon the exercise
of this option, and the Trust Agreement shall govern such withholding
requirement, and (iv) grants of options shall be made pursuant to the Trust
Agreement, in addition to being made pursuant to the provisions of the Plan and
the Stock Option Agreement.

 

SECTION
15.  
DEFINITIONS.

 

(a)  “Agreement” shall
mean this Stock Option Agreement.

 

(b)  “Board
of Directors” shall
mean the Board of Directors of the Company, as constituted from time to time or,
if a Committee has been appointed, such Committee.

 

(c)  “Cause” shall
mean (i) the Optionee’s theft, dishonesty, or falsification of any Company
documents or records, (ii) the Optionee’s improper use or disclosure of the
Company’s confidential or proprietary information, (iii) any action by the
optionee that has a detrimental effect on the Company’s reputation or business,
(iv) the Optionee’s failure or inability to perform any reasonable assigned
duties after written notice from the Company of, and a reasonable opportunity to
cure, such failure or inability, (v) any material breach by the Optionee of
any employment agreement between the Optionee and the Company, which breach is
not cured pursuant to the terms of such agreement, or (vi) the Optionee’s
conviction (including any plea of guilty or nolo
contendere) of any
criminal act that impairs the Optionee’s ability to perform his or her duties
with the Company.

 

11

 

(d)  “Change
in Control” shall
mean:

 

(i)  The
consummation of a merger or consolidation of the Company with or into another
entity or any other corporate reorganization, if persons who were not
stockholders of the Company immediately prior to such merger, consolidation or
other reorganization own immediately after such merger, consolidation or other
reorganization 50% or more of the voting power of the outstanding securities of
each of (A) the continuing or surviving entity and (B) any direct or
indirect parent corporation of such continuing or surviving entity;
or

 

(ii)  The sale,
transfer or other disposition of all or substantially all of the Company’s
assets.

 

A
transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company’s incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company’s securities immediately before such transaction.

 

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

 

(f)  “Committee” shall
mean a committee of the Board of Directors, as described in Section 2 of
the Plan.

 

(g)  “Company” shall
mean Atomica Corporation, a Delaware corporation.

 

(h)  “Consultant” shall
mean a person who performs bona fide services for the Company, a Parent or a
Subsidiary as a consultant or advisor, excluding Employees and Outside
Directors.

 

(i)  “Date
of Grant” shall
mean the date specified in the Notice of Stock Option Grant, which date shall be
the later of (i) the date on which the Board of Directors resolved to grant this
option or (ii) the first day of the Optionee’s Service. 

 

(j)  “Disability” shall
mean that the Optionee is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental
impairment.

 

(k)  “Employee” shall
mean any individual who is a common-law employee of the Company, a Parent or a
Subsidiary.

 

(l)  “Exercise
Price” shall
mean the amount for which one Share may be purchased upon exercise of this
option, as specified in the Notice of Stock Option Grant.

 

12

 

(m)  “Fair
Market Value” shall
mean the fair market value of a Share, as determined by the Board of Directors
in good faith. Such determination shall be conclusive and binding on all
persons.

 

(n)  “Involuntary
Termination” shall
mean the termination of the Optionee’s Service by reason of:

 

(i)  The
involuntary discharge of the Optionee by the Company (or the Parent or
Subsidiary employing him or her) for reasons other than Cause; or

 

(ii)  The
resignation of the Optionee following (A) a change in his or her position
with the Company (or the Parent or Subsidiary employing him or her) that
materially reduces his or her level of authority or responsibility, (B) a
reduction in his or her aggregate compensation (including base salary, fringe
benefits and participation in bonus or other incentive programs based on
corporate performance) or (C) receipt of notice that his or her principal
workplace will be relocated more than 30 miles.

 

(o)  “ISO” shall
mean an employee incentive stock option described in Section 422(b) of the
Code.

 

(p)  “Nonstatutory
Option” shall
mean a stock option not described in Sections 422(b) or 423(b) of the Code
(including a stock option described in Section 14).

 

(q)  “Notice
of Stock Option Grant” shall
mean the document so entitled to which this Agreement is attached.

 

(r)  “Optionee” shall
mean the person named in the Notice of Stock Option Grant.

 

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

 

(t)  “Parent” shall
mean any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, if each of the 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.

 

(u)  “Plan” shall
mean the Atomica Corporation 2000 Stock Plan, as in effect on the Date of
Grant.

 

(v)  “Purchase
Price” shall
mean the Exercise Price multiplied by the number of Shares with respect to which
this option is being exercised.

 

(w)  “Restricted
Share” shall
mean a Share that is subject to the Right of Repurchase.

 

13

 

(x)  “Right
of First Refusal” shall
mean the Company’s right of first refusal described in
Section 8.

 

(y)  “Right
of Repurchase” shall
mean the Company’s right of repurchase described in Section 7.

 

(z)  “Securities
Act” shall
mean the Securities Act of 1933, as amended.

 

(aa)  “Service” shall
mean service as an Employee, Outside Director or Consultant.

 

(bb)  “Share” shall
mean one share of Stock, as adjusted in accordance with Section 8 of the
Plan (if applicable).

 

(cc)  “Stock” shall
mean the Common Stock of the Company, with a par value of $0.001 per
Share.

 

(dd)  “Subsidiary” shall
mean 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.

 

(ee)  “Transferee” shall
mean any person to whom the Optionee has directly or indirectly transferred any
Share acquired under this Agreement.

 

(ff)  “Transfer
Notice” shall
mean the notice of a proposed transfer of Shares described in
Section 8.

 

4Unassociated Document

Atomica
Corporation

 

2000
Stock Plan

 

Adopted
on June 29, 2000

Amended
and Restated on August 24, 2000

 

 

 

 

 

 

 

 

 

TABLE
OF CONTENTS

	 	 	 	Page
    No. 
	 	 	 	 
	SECTION 1. ESTABLISHMENT AND
      PURPOSE. 	 	1 
	 	 	 	 
	SECTION 2.
    ADMINISTRATION 	 	1 
	 	 	 	 
	 	(a) Committees of the Board of
      Directors. 	 	1 
	 	(b) Authority of the Board of
      Directors. 	 	1 
	 	 	 	 
	SECTION 3.
    ELIGIBILITY. 	 	1
	 	 	 	 
	 	(a) General Rule.  	 	1 
	 	(b) Ten-Percent Stockholders. 	 	1 
	 	 	 	 
	
      SECTION
      4. STOCK SUBJECT TO PLAN.
	 	2 
	 	 	 	 
	 	(a) Basic Limitation. 	 	2 
	 	(b) Additional Shares.  	 	2 
	 	 	 	 
	SECTION 5. TERMS AND CONDITIONS OF
      AWARDS OR SALES. 	 	2 
	 	 	 	 
	 	(a) Stock Purchase Agreement. 	 	2 
	 	(b) Duration of Offers and Nontransferability
      of Rights. 	 	2 
	 	(c) Purchase Price.  	 	2 
	 	(d) Withholding Taxes. 	 	2 
	 	(e) Restrictions on Transfer of Shares and
      Minimum Vesting. 	 	3 
	 	(f) Accelerated Vesting 	 	3 
	 	 	 	 
	SECTION 6. TERMS AND CONDITIONS OF
      OPTIONS. 	 	3 
	 	 	 	 
	 	(a) Stock Option Agreement. 	 	3 
	 	(b) Number of Shares.  	 	3 
	 	(c) Exercise Price.  	 	3 
	 	(d) Withholding Taxes.  	 	3 
	 	(e) Exercisability. 	 	4 
	 	(f) Accelerated Exercisability  	 	4 
	 	(g) Basic Term. 	 	4 
	 	(h) Transferability. 	 	4 
	 	(i) Termination of Service (Except by
      Death). 	 	4 
	 	(j) Leaves of Absence. 	 	5 
	 	(k) Death of Optionee. 	 	5 
	 	(l) No Rights as a
    Stockholder. 	 	5 
	 	(m) Modification, Extension and Assumption of
      Options.  	 	5 
	 	(n) Restrictions on Transfer of Shares and
      Minimum Vesting. 	 	6 
	 	(o) Accelerated Vesting 	 	6 

 

 

i

 

	 	 	 	 
	SECTION 7. PAYMENT FOR
      SHARES. 	 	6 
	 	 	 	 
	 	(a) General Rule. 	 	6 
	 	(b) Surrender of Stock.  	 	6 
	 	(c) Services Rendered. 	 	6 
	 	(d) Promissory Note. 	 	6 
	 	(e) Exercise/Sale.  	 	7 
	 	(f) Exercise/Pledge. 	 	7 
	 	 	 	 
	SECTION 8. ADJUSTMENT OF
      SHARES. 	 	7 
	 	 	 	 
	 	(a) General. 	 	7 
	 	(b) Mergers and
    Consolidations. 	 	7 
	 	(c) Reservation of Rights. 	 	8 
	 	 	 	 
	SECTION 9. SECURITIES LAW
      REQUIREMENTS. 	 	8 
	 	 	 	 
	 	(a) General  	 	8 
	 	(b) Financial Reports. 	 	8 
	 	 	 	 
	SECTION 10. NO RETENTION
      RIGHTS. 	 	8 
	 	 	 	 
	SECTION 11. DURATION AND
      AMENDMENTS. 	 	9 
	 	 	 	 
	 	(a)
      Term of the Plan. 	 	9 
	 	(b) Right to Amend or Terminate the
      Plan. 	 	9 
	 	(c) Effect of Amendment or
      Termination. 	 	9 
	 	 	 	 
	Section 12. SPECIAL PROVISIONS FOR
      ISRAELI RESIDENTS. 	 	9 
	 	 	 	 
	 	(a) Scope.  	 	9 
	 	(b) Grants Under Israeli Law.  	 	9 
	 	(c) Trust Under
    Section 102. 	 	9 
	 	(d) Trust Under
    Section 3(i). 	 	10 
	 	(e) Exercise.  	 	10 
	 	(f) Sale of Shares. 	 	10 
	 	(g) Applicable Law.  	 	10 
	 	(h) Tax Consequences.  	 	10 
	 	 	 	 
	SECTION 13.
    DEFINITIONS. 	 	10 

 

 

ii

 

Atomica
Corporation 2000 Stock Plan

 

SECTION
1.  ESTABLISHMENT
AND PURPOSE.

 

The
purpose of the Plan is to offer selected persons an opportunity to acquire a
proprietary interest in the success of the Company, or to increase such
interest, by purchasing Shares of the Company’s Stock. The Plan provides both
for the direct award or sale of Shares and for the grant of Options to purchase
Shares. Options granted under the Plan may be Nonstatutory Options (including
the Options described in Section 12) or ISOs intended to qualify under
Section 422 of the Code.

 

Capitalized
terms are defined in Section 13.

 

SECTION
2.  ADMINISTRATION.

 

(a)  Committees
of the Board of Directors. The
Plan may be administered by one or more Committees. Each Committee shall consist
of one or more members of the Board of Directors who have been appointed by the
Board of Directors. Each Committee shall have such authority and be responsible
for such functions as the Board of Directors has assigned to it. If no Committee
has been appointed, the entire Board of Directors shall administer the Plan. Any
reference to the Board of Directors in the Plan shall be construed as a
reference to the Committee (if any) to whom the Board of Directors has assigned
a particular function.

 

(b)  Authority
of the Board of Directors. Subject
to the provisions of the Plan, the Board of Directors shall have full authority
and discretion to take any actions it deems necessary or advisable for the
administration of the Plan. All decisions, interpretations and other actions of
the Board of Directors shall be final and binding on all Purchasers, all
Optionees and all persons deriving their rights from a Purchaser or
Optionee.

 

SECTION
3.  ELIGIBILITY.

 

(a)  General
Rule. Only
Employees, Outside Directors and Consultants
shall be
eligible for the grant of Options or the direct award or sale of Shares. Only
Employees shall be eligible for the grant of ISOs.

 

(b)  Ten-Percent
Stockholders. A
person who owns more than 10% of the total combined voting power of all classes
of outstanding stock of the Company, its Parent or any of its Subsidiaries shall
not be eligible for designation as an Optionee or Purchaser unless (i) the
Exercise Price is at least 110% of the Fair Market Value of a Share on the date
of grant, (ii) the Purchase Price (if any) is at least 100% of the Fair
Market Value of a Share and (iii) in the case of an ISO, such ISO by its
terms is not exercisable after the expiration of five years from the date of
grant. For purposes of this Subsection (b), in determining stock ownership,
the attribution rules of Section 424(d) of the Code shall be
applied.

 

 

SECTION
4.  STOCK
SUBJECT TO PLAN.

 

(a)  Basic
Limitation. Shares
offered under the Plan may be authorized but unissued Shares or treasury Shares.
The aggregate number of Shares that may be issued under the Plan (upon exercise
of Options or other rights to acquire Shares) shall not exceed 9,615,350
Shares,1 subject
to adjustment pursuant to Section 8. The number of Shares that are subject
to Options or other rights outstanding at any time under the Plan shall not
exceed the number of Shares that then remain available for issuance under the
Plan. The Company, during the term of the Plan, shall at all times reserve and
keep available sufficient Shares to satisfy the requirements of the
Plan.

 

(b)  Additional
Shares. In the
event that any outstanding Option or other right for any reason expires or is
canceled or otherwise terminated, the Shares allocable to the unexercised
portion of such Option or other right shall again be available for the purposes
of the Plan. In the event that Shares issued under the Plan are reacquired by
the Company pursuant to any forfeiture provision, right of repurchase or right
of first refusal, such Shares shall again be available for the purposes of the
Plan, except that the aggregate number of Shares which may be issued upon the
exercise of ISOs shall in no event exceed 9,615,350 Shares (subject to
adjustment pursuant to Section 8).

 

SECTION
5.  TERMS
AND CONDITIONS OF AWARDS OR SALES.

 

(a)  Stock
Purchase Agreement. Each
award or sale of Shares under the Plan (other than upon exercise of an Option)
shall be evidenced by a Stock Purchase Agreement between the Purchaser and the
Company. Such award or sale shall be subject to all applicable terms and
conditions of the Plan and may be subject to any other terms and conditions
which are not inconsistent with the Plan and which the Board of Directors deems
appropriate for inclusion in a Stock Purchase Agreement. The provisions of the
various Stock Purchase Agreements entered into under the Plan need not be
identical.

 

(b)  Duration
of Offers and Nontransferability of Rights. Any
right to acquire Shares under the Plan (other than an Option) shall
automatically expire if not exercised by the Purchaser within 30 days after the
grant of such right was communicated to the Purchaser by the Company. Such right
shall not be transferable and shall be exercisable only by the Purchaser to whom
such right was granted.

 

(c)  Purchase
Price. The
Purchase Price of Shares to be offered under the Plan shall not be less than 85%
of the Fair Market Value of such Shares, and a higher percentage may be required
by Section 3(b). Subject to the preceding sentence, the Board of Directors
shall determine the Purchase Price at its sole discretion. The Purchase Price
shall be payable in a form described in Section 7.

 

(d)  Withholding
Taxes. As a
condition to the purchase of Shares, the Purchaser shall make such arrangements
as the Board of Directors may require for the satisfaction of any federal,
state, local or foreign withholding tax obligations that may arise in connection
with such purchase.

 

1 Reflects
increase from 1,615,350 to 9,615,350 Shares approved by the Board of Directors
on August 24, 2000.

 

2

 

(e)  Restrictions
on Transfer of Shares and Minimum Vesting. Any
Shares awarded or sold under the Plan shall be subject to such special
forfeiture conditions, rights of repurchase, rights of first refusal and other
transfer restrictions as the Board of Directors may determine. Such restrictions
shall be set forth in the applicable Stock Purchase Agreement and shall apply in
addition to any restrictions that may apply to holders of Shares generally. In
the case of a Purchaser who is not an officer of the Company, an Outside
Director or a Consultant, any right to repurchase the Purchaser’s Shares at the
original Purchase Price (if any) upon termination of the Purchaser’s Service
shall lapse at least as rapidly as 20% per year over the five-year period
commencing on the date of the award or sale of the Shares. Any such right may be
exercised only within 90 days after the termination of the Purchaser’s Service
for cash or for cancellation of indebtedness incurred in purchasing the
Shares.

 

(f)  Accelerated
Vesting. Unless
the applicable Stock Purchase Agreement provides otherwise, any right to
repurchase a Purchaser’s Shares at the original Purchase Price (if any) upon
termination of the Purchaser’s Service shall lapse and all of such Shares shall
become vested if (i) the Company is subject to a Change in Control before
the Purchaser’s Service terminates and (ii) the repurchase right is not
assigned to the entity that employs the Purchaser immediately after the Change
in Control or to its parent or subsidiary.

 

SECTION
6.  TERMS
AND CONDITIONS OF OPTIONS.

 

(a)  Stock
Option Agreement. Each
grant of an Option under the Plan shall be evidenced by a Stock Option Agreement
between the Optionee and the Company. Such Option shall be subject to all
applicable terms and conditions of the Plan and may be subject to any other
terms and conditions which are not inconsistent with the Plan and which the
Board of Directors deems appropriate for inclusion in a Stock Option Agreement.
The provisions of the various Stock Option Agreements entered into under the
Plan need not be identical.

 

(b)  Number
of Shares. Each
Stock Option Agreement shall specify the number of Shares that are subject to
the Option and shall provide for the adjustment of such number in accordance
with Section 8. The Stock Option Agreement shall also specify whether the
Option is an ISO, a Nonstatutory Option, or a Nonstatutory Option described in
Section 12.

 

(c)  Exercise
Price. Each
Stock Option Agreement shall specify the Exercise Price. The Exercise Price of
an ISO shall not be less than 100% of the Fair Market Value of a Share on the
date of grant, and a higher percentage may be required by Section 3(b). The
Exercise Price of a Nonstatutory Option shall not be less than 85% of the Fair
Market Value of a Share on the date of grant, and a higher percentage may be
required by Section 3(b). Subject to the preceding two sentences, the
Exercise Price under any Option shall be determined by the Board of Directors at
its sole discretion. The Exercise Price shall be payable in a form described in
Section 7.

 

(d)  Withholding
Taxes. As a
condition to the exercise of an Option, the Optionee shall make such
arrangements as the Board of Directors may require for the satisfaction of any
federal, state, local or foreign withholding tax obligations that may arise in
connection with such exercise. The Optionee shall also make such arrangements as
the Board of Directors may require for the satisfaction of any federal, state,
local or foreign withholding tax obligations that may arise in connection with
the disposition of Shares acquired by exercising an Option.

 

3

 

(e)  Exercisability. Each
Stock Option Agreement shall specify the date when all or any installment of the
Option is to become exercisable. In the case of an Optionee who is not an
officer of the Company, an Outside Director or a Consultant, an Option shall
become exercisable at least as rapidly as 20% per year over the five-year period
commencing on the date of grant. Subject to the preceding sentence, the Board of
Directors shall determine the exercisability provisions of any Stock Option
Agreement at its sole discretion.

 

(f)  Accelerated
Exercisability. Unless
the applicable Stock Option Agreement provides otherwise, all of an Optionee’s
Options shall become exercisable in full if (i) the Company is subject to a
Change in Control before the Optionee’s Service terminates, (ii) such
Options do not remain outstanding, (iii) such Options are not assumed by
the surviving corporation or its parent and (iv) the surviving corporation
or its parent does not substitute options with substantially the same terms for
such Options.

 

(g)  Basic
Term. The
Stock Option Agreement shall specify the term of the Option. The term shall not
exceed 10 years from the date of grant, and a shorter term may be required by
Section 3(b). Subject to the preceding sentence, the Board of Directors at
its sole discretion shall determine when an Option is to expire.

 

(h)  Transferability. An
Option shall be transferable by the Optionee only by (i) a beneficiary
designation, (ii) a will or (iii) the laws of descent and
distribution, except as provided in the next sentence. If the applicable Stock
Option Agreement so provides, an NSO shall also be transferable by the Optionee
by (i) a gift to a member of the Optionee’s Immediate Family or (ii) a
gift to an inter
vivos or
testamentary trust in which members of the Optionee’s Immediate Family have a
beneficial interest of more than 50% and which provides that such NSO is to be
transferred to the beneficiaries upon the Optionee’s death. An ISO may be
exercised during the lifetime of the Optionee only by the Optionee or by the
Optionee’s guardian or legal representative.

 

(i)  Termination
of Service (Except by Death). If an
Optionee’s Service terminates for any reason other than the Optionee’s death,
then the Optionee’s Options shall expire on the earliest of the following
occasions:

 

(i)  The
expiration date determined pursuant to Subsection (g) above;

 

(ii)  The date
three months after the termination of the Optionee’s Service for any reason
other than Disability, or such later date as the Board of Directors may
determine; or

 

(iii)  The date
six months after the termination of the Optionee’s Service by reason of
Disability, or such later date as the Board of Directors may
determine.

 

4

 

The
Optionee may exercise all or part of the Optionee’s Options at any time before
the expiration of such Options under the preceding sentence, but only to the
extent that such Options had become exercisable before the Optionee’s Service
terminated (or became exercisable as a result of the termination) and the
underlying Shares had vested before the Optionee’s Service terminated (or vested
as a result of the termination). The balance of such Options shall lapse when
the Optionee’s Service terminates. In the event that the Optionee dies after the
termination of the Optionee’s Service but before the expiration of the
Optionee’s Options, all or part of such Options may be exercised (prior to
expiration) by the executors or administrators of the Optionee’s estate or by
any person who has acquired such Options directly from the Optionee by
beneficiary designation, bequest or inheritance, but only to the extent that
such Options had become exercisable before the Optionee’s Service terminated (or
became exercisable as a result of the termination) and the underlying Shares had
vested before the Optionee’s Service terminated (or vested as a result of the
termination).

 

(j)  Leaves
of Absence. For
purposes of Subsection (i) above, Service shall be deemed to continue while
the Optionee is on a bona fide leave of absence, if such leave was approved by
the Company in writing and if continued crediting of Service for this purpose is
expressly required by the terms of such leave or by applicable law (as
determined by the Company).

 

(k)  Death
of Optionee. If an
Optionee dies while the Optionee is in Service, then the Optionee’s Options
shall expire on the earlier of the following dates:

 

(i)  The
expiration date determined pursuant to Subsection (g) above;
or

 

(ii)  The date
12 months after the Optionee’s death.

 

All or
part of the Optionee’s Options may be exercised at any time before the
expiration of such Options under the preceding sentence by the executors or
administrators of the Optionee’s estate or by any person who has acquired such
Options directly from the Optionee by beneficiary designation, bequest or
inheritance, but only to the extent that such Options had become exercisable
before the Optionee’s death or became exercisable as a result of the death. The
balance of such Options shall lapse when the Optionee dies.

 

(l)  No
Rights as a Stockholder. An
Optionee, or a transferee of an Optionee, shall have no rights as a stockholder
with respect to any Shares covered by the Optionee’s Option until such person
becomes entitled to receive such Shares by filing a notice of exercise and
paying the Exercise Price pursuant to the terms of such Option.

 

(m)  Modification,
Extension and Assumption of Options. Within
the limitations of the Plan, the Board of Directors may modify, extend or assume
outstanding Options or may accept the cancellation of outstanding Options
(whether granted by the Company or another issuer) in return for the grant of
new Options for the same or a different number of Shares and at the same or a
different Exercise Price. The foregoing notwithstanding, no modification of an
Option shall, without the consent of the Optionee, impair the Optionee’s rights
or increase the Optionee’s obligations under such Option.

 

5

 

(n)  Restrictions
on Transfer of Shares and Minimum Vesting. Any
Shares issued upon exercise of an Option shall be subject to such special
forfeiture conditions, rights of repurchase, rights of first refusal and other
transfer restrictions as the Board of Directors may determine. Such restrictions
shall be set forth in the applicable Stock Option Agreement and shall apply in
addition to any restrictions that may apply to holders of Shares generally. In
the case of an Optionee who is not an officer of the Company, an Outside
Director or a Consultant:

 

(i)  Any right
to repurchase the Optionee’s Shares at the original Exercise Price upon
termination of the Optionee’s Service shall lapse at least as rapidly as 20% per
year over the five-year period commencing on the date of the option
grant;

 

(ii)  Any such
right may be exercised only for cash or for cancellation of indebtedness
incurred in purchasing the Shares; and

 

(iii)  Any such
right may be exercised only within 90 days after the later of (A) the
termination of the Optionee’s Service or (B) the date of the option
exercise.

 

(o)  Accelerated
Vesting. Unless
the applicable Stock Option Agreement provides otherwise, any right to
repurchase an Optionee’s Shares at the original Exercise Price upon termination
of the Optionee’s Service shall lapse and all of such Shares shall become vested
if (i) the Company is subject to a Change in Control before the Optionee’s
Service terminates and (ii) the repurchase right is not assigned to the
entity that employs the Optionee immediately after the Change in Control or to
its parent or subsidiary.

 

SECTION
7.  PAYMENT
FOR SHARES.

 

(a)  General
Rule. The
entire Purchase Price or Exercise Price of Shares issued under the Plan shall be
payable in cash or cash equivalents at the time when such Shares are purchased,
except as otherwise provided in this Section 7.

 

(b)  Surrender
of Stock. To the
extent that a Stock Option Agreement so provides, all or any part of the
Exercise Price may be paid by surrendering, or attesting to the ownership of,
Shares that are already owned by the Optionee. Such Shares shall be surrendered
to the Company in good form for transfer and shall be valued at their Fair
Market Value on the date when the Option is exercised. The Optionee shall not
surrender, or attest to the ownership of, Shares in payment of the Exercise
Price if such action would cause the Company to recognize compensation expense
(or additional compensation expense) with respect to the Option for financial
reporting purposes.

 

(c)  Services
Rendered. At the
discretion of the Board of Directors, Shares may be awarded under the Plan in
consideration of services rendered to the Company, a Parent or a Subsidiary
prior to the award.

 

(d)  Promissory
Note. To the
extent that a Stock Option Agreement or Stock Purchase Agreement so provides,
all or a portion of the Exercise Price or Purchase Price (as the case may be) of
Shares issued under the Plan may be paid with a full-recourse promissory note.
However, the par value of the Shares, if newly issued, shall be paid in cash or
cash equivalents. The Shares shall be pledged as security for payment of the
principal amount of the promissory note and interest thereon. The interest rate
payable under the terms of the promissory note shall not be less than the
minimum rate (if any) required to avoid the imputation of additional interest
under the Code. Subject to the foregoing, the Board of Directors (at its sole
discretion) shall specify the term, interest rate, amortization requirements (if
any) and other provisions of such note.

 

6

 

(e)  Exercise/Sale. To the
extent that a Stock Option Agreement so provides, and if Stock is publicly
traded, payment may be made all or in part by the delivery (on a form prescribed
by the Company) of an irrevocable direction to a securities broker approved by
the Company to sell Shares and to deliver all or part of the sales proceeds to
the Company in payment of all or part of the Exercise Price and any withholding
taxes.

 

(f)  Exercise/Pledge. To the
extent that a Stock Option Agreement so provides, and if Stock is publicly
traded, payment may be made all or in part by the delivery (on a form prescribed
by the Company) of an irrevocable direction to pledge Shares to a securities
broker or lender approved by the Company, as security for a loan, and to deliver
all or part of the loan proceeds to the Company in payment of all or part of the
Exercise Price and any withholding taxes.

 

SECTION
8.  ADJUSTMENT
OF SHARES.

 

(a)  General. In the
event of a subdivision of the outstanding Stock, a declaration of a dividend
payable in Shares, a declaration of an extraordinary dividend payable in a form
other than Shares in an amount that has a material effect on the Fair Market
Value of the Stock, a combination or consolidation of the outstanding Stock into
a lesser number of Shares, a recapitalization, a spin-off, a reclassification or
a similar occurrence, the Board of Directors shall make appropriate adjustments
in one or more of (i) the number of Shares available for future grants
under Section 4, (ii) the number of Shares covered by each outstanding
Option or (iii) the Exercise Price under each outstanding
Option.

 

(b)  Mergers
and Consolidations. In the
event that the Company is a party to a merger or consolidation, outstanding
Options shall be subject to the agreement of merger or consolidation. Such
agreement shall provide for:

 

(i)  The
continuation of such outstanding Options by the Company (if the Company is the
surviving corporation);

 

(ii)  The
assumption of the Plan and such outstanding Options by the surviving corporation
or its parent;

 

(iii)  The
substitution by the surviving corporation or its parent of options with
substantially the same terms for such outstanding Options;

 

7

 

(iv)  The full
exercisability of such outstanding Options and full vesting of the Shares
subject to such Options, followed by the cancellation of such Options;
or

 

(v)  The
settlement of the full value of such outstanding Options (whether or not then
exercisable) in cash or cash equivalents, followed by the cancellation of such
Options.

 

(c)  Reservation
of Rights. Except
as provided in this Section 8, an Optionee or Purchaser shall have no
rights by reason of (i) any subdivision or consolidation of shares of stock of
any class, (ii) the payment of any dividend or (iii) any other increase or
decrease in the number of shares of stock of any class. Any issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall not affect, and no adjustment by reason thereof
shall be made with respect to, the number or Exercise Price of Shares subject to
an Option. The grant of an Option pursuant to the Plan shall not affect in any
way the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, to merge or
consolidate or to dissolve, liquidate, sell or transfer all or any part of its
business or assets.

 

SECTION
9.  SECURITIES
LAW REQUIREMENTS.

 

(a)  General. Shares
shall not be issued under the Plan unless the issuance and delivery of such
Shares comply with (or are exempt from) all applicable requirements of law,
including (without limitation) the Securities Act of 1933, as amended, the rules
and regulations promulgated thereunder, state securities laws and regulations,
and the regulations of any stock exchange or other securities market on which
the Company’s securities may then be traded.

 

(b)  Financial
Reports. The
Company each year shall furnish to Optionees, Purchasers and stockholders who
have received Stock under the Plan its balance sheet and income statement,
unless such Optionees, Purchasers or stockholders are key Employees whose duties
with the Company assure them access to equivalent information. Such balance
sheet and income statement need not be audited.

 

SECTION
10.  
NO RETENTION RIGHTS.

 

Nothing
in the Plan or in any right or Option granted under the Plan shall confer upon
the Purchaser or Optionee any right to continue in Service for any period of
specific duration or interfere with or otherwise restrict in any way the rights
of the Company (or any Parent or Subsidiary employing or retaining the Purchaser
or Optionee) or of the Purchaser or Optionee, which rights are hereby expressly
reserved by each, to terminate his or her Service at any time and for any
reason, with or without cause.

 

8

 

SECTION
11.  
DURATION AND AMENDMENTS.

 

(a)  Term
of the Plan. The
Plan, as set forth herein, shall become effective on the date of its adoption by
the Board of Directors, subject to the approval of the Company’s stockholders.
If the stockholders fail to approve the Plan (or the most recent increase in the
number of Shares reserved under Section 4) within 12 months after its
adoption by the Board of Directors, then any grants of Options or sales or
awards of Shares that have already occurred under the Plan (or in reliance on
such increase) shall be rescinded, and no additional grants, sales or awards
shall be made thereafter under the Plan. The Plan shall terminate automatically
10 years after the later of (i) its adoption by the Board of Directors or
(ii) the most recent increase in the number of Shares reserved under
Section 4 that was approved by the Company’s stockholders. The Plan may be
terminated on any earlier date pursuant to Subsection (b)
below.

 

(b)  Right
to Amend or Terminate the Plan. The
Board of Directors may amend, suspend or terminate the Plan at any time and for
any reason; provided, however, that any amendment of the Plan which increases
the number of Shares available for issuance under the Plan (except as provided
in Section 8), or which materially changes the class of persons who are
eligible for the grant of ISOs, shall be subject to the approval of the
Company’s stockholders. Stockholder approval shall not be required for any other
amendment of the Plan.

 

(c)  Effect
of Amendment or Termination. No
Shares shall be issued or sold under the Plan after the termination thereof,
except upon exercise of an Option granted prior to such termination. The
termination of the Plan, or any amendment thereof, shall not affect any Share
previously issued or any Option previously granted under the Plan.

 

SECTION
12.      SPECIAL
PROVISIONS FOR ISRAELI RESIDENTS.

 

(a)  Scope. This
Section 12 shall apply only to Optionees who are residents of the State of
Israel.

 

(b)  Grants
Under Israeli Law. Any
other provision of the Plan notwithstanding, the Plan may also be administered
pursuant to the provisions of Section 102 (“Section 102”) or
Section 3(i) (“Section 3(i)”) of the Israeli Income Tax Ordinance (New
Version), 1961, the rules promulgated thereunder and the Israeli Companies Law
5759-1999 with respect to Employees who are Israeli residents. Details regarding
the terms and conditions of Options granted pursuant to the provisions of
Section 102 shall be delivered to the Optionees who are Israeli residents
and whose grants are made pursuant to Section 102, along with the remaining
terms and conditions.

 

(c)  Trust
Under Section 102. Any
other provision of the Plan notwithstanding, in the event that the Plan is
administered pursuant to the provisions of Section 102, each Option and
each Share with respect to which an Option has been exercised by an Optionee who
is an Israeli resident shall be issued by the Company to, and held in trust for
the benefit of, such Optionee by a trustee designated by the Board of Directors
or the board of directors of a Subsidiary, as appropriate, pursuant to
Section 102 and a trust agreement to be entered into between the Company or
such Subsidiary and such trustee.

 

9

 

(d)  Trust
Under Section 3(i). In the
event that the Plan is administered pursuant to the provisions of
Section 3(i), the Company may elect to enter into an agreement with a
trustee concerning the administration of the exercise of Options, the purchase
and sale of Shares, and the arrangements for payment of or withholding of taxes
due in connection with such exercise, purchase and sale. The trust agreement may
provide that the Company will issue the Shares to such trustee for the benefit
of the Optionees.

 

(e)  Exercise. At the
discretion of the Board of Directors, for purposes of simplicity and in order to
ensure compliance with Israel’s tax regulations, the exercise of the Options
granted under the Plan may be executed by the Company or a Subsidiary, as
appropriate.

 

(f)  Sale
of Shares. Upon
sale by an Optionee of any securities held in trust, the Company shall withhold
(or, if applicable, shall cause the trustee to withhold) from the proceeds of
such sale all applicable taxes, shall remit the amount withheld to the
appropriate Israeli tax authorities, shall pay the balance thereof directly to
such Optionee, and shall report to such Optionee the amount so withheld and paid
to such tax authorities.

 

(g)  Applicable
Law. With
respect to Optionees who are Israeli residents, the Plan and all instruments
issued thereunder or in connection therewith shall be governed by, and
interpreted in accordance with, the laws of the State of Israel.

 

(h)  Tax
Consequences. Any tax
consequences arising from the grant or exercise of an Option, from the payment
for Shares covered thereby or from any other event or act under the Plan
(whether of an Optionee or of the Company or a Subsidiary) shall be borne solely
by the Optionee. Furthermore, the Optionee shall agree to indemnify the Company
or the Subsidiary that employs the Optionee and the trustee, if applicable, and
hold them harmless against and from any and all liability for any tax or
interest or penalty thereon, including (without limitation) liabilities relating
to the necessity to withhold, or to have withheld, any tax from any payment made
to the Optionee.

 

SECTION
13.  
DEFINITIONS.

 

(a)  “Board
of Directors” shall
mean the Board of Directors of the Company, as constituted from time to
time.

 

(b)  “Change
in Control” shall
mean:

 

(i)  The
consummation of a merger or consolidation of the Company with or into another
entity or any other corporate reorganization, if persons who were not
stockholders of the Company immediately prior to such merger, consolidation or
other reorganization own immediately after such merger, consolidation or other
reorganization 50% or more of the voting power of the outstanding securities of
each of (A) the continuing or surviving entity and (B) any direct or
indirect parent corporation of such continuing or surviving entity;
or

 

10

 

(ii)  The sale,
transfer or other disposition of all or substantially all of the Company’s
assets.

 

A
transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company’s incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company’s securities immediately before such transaction.

 

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

 

(d)  “Committee” shall
mean a committee of the Board of Directors, as described in
Section 2(a).

 

(e)  “Company” shall
mean Atomica Corporation, a Delaware corporation.

 

(f)  “Consultant” shall
mean a person who performs bona fide services for the Company, a Parent or a
Subsidiary as a consultant or advisor, excluding Employees and Outside
Directors.

 

(g)  “Disability” shall
mean that the Optionee is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental
impairment.

 

(h)  “Employee” shall
mean any individual who is a common-law employee of the Company, a Parent or a
Subsidiary.

 

(i)  “Exercise
Price” shall
mean the amount for which one Share may be purchased upon exercise of an Option,
as specified by the Board of Directors in the applicable Stock Option
Agreement.

 

(j)  “Fair
Market Value” shall
mean the fair market value of a Share, as determined by the Board of Directors
in good faith. Such determination shall be conclusive and binding on all
persons.

 

(k)  “Immediate
Family” shall
mean any child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law and shall include adoptive
relationships.

 

(l)  “ISO” shall
mean an employee incentive stock option described in Section 422(b) of the
Code.

 

(m)  “Nonstatutory
Option” shall
mean a stock option not described in Sections 422(b) or 423(b) of the Code
(including a stock option described in Section 12).

 

(n)  “Option” shall
mean an ISO or Nonstatutory Option granted under the Plan and entitling the
holder to purchase Shares.

 

(o)  “Optionee” shall
mean a person who holds an Option.

 

11

 

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

 

(q)  “Parent” shall
mean any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, if each of the 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. A
corporation that attains the status of a Parent on a date after the adoption of
the Plan shall be considered a Parent commencing as of such date.

 

(r)  “Plan” shall
mean this Atomica Corporation 2000 Stock Plan.

 

(s)  “Purchase
Price” shall
mean the consideration for which one Share may be acquired under the Plan (other
than upon exercise of an Option), as specified by the Board of
Directors.

 

(t)  “Purchaser” shall
mean a person to whom the Board of Directors has offered the right to acquire
Shares under the Plan (other than upon exercise of an Option).

 

(u)  “Service” shall
mean service as an Employee, Outside Director or Consultant.

 

(v)  “Share” shall
mean one share of Stock, as adjusted in accordance with Section 8 (if
applicable).

 

(w)  “Stock” shall
mean the Common Stock of the Company, with a par value of $0.001 per
Share.

 

(x)  “Stock
Option Agreement” shall
mean the agreement between the Company and an Optionee that contains the terms,
conditions and restrictions pertaining to the Optionee’s Option.

 

(y)  “Stock
Purchase Agreement” shall
mean the agreement between the Company and a Purchaser who acquires Shares under
the Plan that contains the terms, conditions and restrictions pertaining to the
acquisition of such Shares.

 

(z)  “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 corpora-tions
in such chain. A corpo-ration that attains the status of a Subsidiary on a date
after the adoption of the Plan shall be considered a Subsidiary commencing as of
such date.

 

12

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