sv8
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NETWORK APPLIANCE, INC.
(Exact name of registrant as specified in its charter)
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Delaware
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77-0307520 |
(State of Incorporation)
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(I.R.S. Employer Identification No.) |
495 East Java Drive,
Sunnyvale, California 94089
(Address of principal executive offices)
DECRU, INC. 2001 EQUITY INCENTIVE PLAN
(Full title of the plans)
Daniel J. Warmenhoven
Chief Executive Officer and Director
Network Appliance, Inc.
495 East Java Drive,
Sunnyvale, California 94089
(408) 822-6000
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Steven E. Bochner, Esq.
Wilson Sonsini Goodrich & Rosati, P. C.
650 Page Mill Road
Palo Alto, CA 94304
(650) 493-9300
CALCULATION OF REGISTRATION FEE
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Proposed Maximum |
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Proposed Maximum |
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Title of Securities |
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Amount to be |
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Offering Price Per |
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Aggregate Offering |
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Amount of |
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to be Registered |
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Registered (1) |
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Share |
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Price |
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Registration Fee |
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Stock Options and
Common Stock (par
value $0.001) |
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478,079 |
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$0.01(2) |
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$4,780.79 |
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$0.56 |
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Stock Options and
Common Stock (par
value $0.001) |
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933,738 |
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$23.39(2) |
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$21,840,131.82 |
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$2,570.58 |
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Stock Options and
Common Stock (par
value $0.001) |
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514,645 |
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$1.52(3) |
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$782,260.40 |
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$92.07 |
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(1) |
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This Registration Statement shall also cover any additional shares of Registrants common
stock in respect of the securities identified in the above table by reason of any stock
dividend, stock split, recapitalization or other similar transaction effected without the
Registrants receipt of consideration which results in an increase in the number of the
outstanding shares of Registrants common stock. |
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(2) |
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Calculated solely for the purposes of this offering under Rule 457(h) of the Securities Act
of 1933, as amended, on the basis of the exercise price of the outstanding options. |
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(3) |
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Calculated solely for the purposes of this offering under Rule 457(h) of the Securities Act
of 1933, as amended, on the basis of the weighted average exercise price of the outstanding
options. |
TABLE OF CONTENTS
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
The documents containing the information specified in this Item 1 will be sent or given to
employees, officers, directors or others as specified by Rule 428(b)(1). In accordance with the
rules and regulations of the Securities and Exchange Commission (the Commission) and the
instructions to Form S-8, such documents are not being filed with the Commission either as part of
this Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424.
Item 2. Registration Information and Employee Plan Annual Information.
The documents containing the information specified in this Item 2 will be sent or given to
employees, officers, directors or others as specified by Rule 428(b)(1). In accordance with the
rules and regulations of the
Commission and the instructions to Form S-8, such documents are not being filed with the
Commission either as part of this Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424. Such documents, together with the documents incorporated by
reference herein pursuant to Item 3 of Part II of this Registration Statement on Form S-8,
constitute a prospectus that meets the requirements of Section 10(a) of the Securities Act, and are
available upon written or oral request: Network Appliance, Inc., Attn: General Counsel, 495 East
Java Drive, Sunnyvale, CA 94089, Tel: 408.822.6000.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
Network Appliance, Inc. (the Registrant) hereby incorporates by reference into this
Registration Statement the following documents previously filed with the Commission:
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(a) |
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The Registrants Annual Report on Form 10-K for the fiscal year ended April 30, 2005, filed
with the Commission on July 8, 2005, pursuant to Section 13 of the Securities Exchange Act of
1934, as amended (the 1934 Act); |
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(b) |
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The Registrants Current Report on Form 8-K, filed with the Commission on August 4, 2005; |
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(c) |
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The Registrants Current Report on Form 8-K, filed with the Commission on September 1, 2005; and |
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(d) |
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The Registrants Registration Statement No. 000-27130 on Form 8-A filed with the Commission on
November 1, 1995, in which there is described the terms, rights and provisions applicable to
the Registrants Common Stock. |
All reports and definitive proxy or information statements filed pursuant to Section 13(a),
13(c), 14 or 15(d) of the 1934 Act after the date of this Registration Statement and prior to the
filing of a post-effective amendment which indicates that all securities offered hereby have been
sold or which de-registers all securities then remaining unsold shall be deemed to be incorporated
by reference into this Registration Statement and to be a part hereof from the date of filing of
such documents. Any statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in any subsequently filed document
which also is deemed to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law authorizes a court to award or a
corporations board of directors to grant indemnification to directors and officers in terms
sufficiently broad to permit the indemnification under some circumstances for liabilities
(including reimbursement for expenses incurred) arising under the Securities Act of 1933, as
amended. Article IX of the Certificate of Incorporation of the Registrant provides that, subject to
Delaware law, its directors will not be personally liable for monetary damages for breach of their
fiduciary duties to the Registrant and its stockholders. This provision does not eliminate any
directors fiduciary
duties and in appropriate circumstances, equitable remedies such as injunctive or other forms of
non-monetary relief will remain available under Delaware law. The provision also does not affect a
directors responsibilities under any other law, such as the federal securities laws or state or
federal environmental laws.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
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Exhibit |
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Number |
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Documents |
3.1
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Certificate of Incorporation of the Registrant (1). |
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3.2
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Bylaws of the Registrant (1). |
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3.3
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Certificate of Amendment to the Bylaws of the Registrant (2). |
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4.1
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The Registrants Registration Statement No. 000-27130 on Form 8-A, filed with the Commission
on November 1, 1995, in which there is described the terms, rights and provisions applicable
to the Registrants Common Stock. |
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5.1
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Opinion of Wilson Sonsini Goodrich & Rosati, P.C. |
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23.1
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Consent of Deloitte and Touche LLP |
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23.2
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Consent of Wilson Sonsini Goodrich & Rosati, P.C. is contained in Exhibit 5.1 to this
Registration Statement |
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24
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Power of Attorney is contained on the signature page |
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99.1
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Form of Stock Option Grant Notice and Option Agreement under the Decru, Inc. Amended and
Restated 2001 Equity Incentive Plan. |
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99.2
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Form of Stock Option Grant Notice and Option Agreement under the Decru, Inc. 2001 Equity
Incentive Plan. |
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99.3
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Form of Early Exercise Stock Purchase Agreement under the Decru, Inc. 2001 Equity Incentive
Plan. |
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99.4
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Form of Restricted Stock Bonus Grant Notice and Agreement under the Decru, Inc. 2001 Equity
Incentive Plan. |
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(1) |
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Previously filed as an exhibit with the Companys Current Report on Form 8-K dated December
4, 2001. |
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(2) |
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Previously filed as an exhibit with the Companys Current Report on Form 8-K dated May
4, 2005. |
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective
amendment to this Registration Statement to include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or any material change
to such information in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Registrants annual report pursuant
to Section 13(a) or Section 15(d) of the Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plans annual report pursuant to Section 15(d) of the Exchange Act of 1934)
that is incorporated by reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in the Securities Act of 1933
and is, therefore, unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Sunnyvale, State of California, on
September 2, 2005.
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Network Appliance, Inc.
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By: |
/s/Daniel J. Warmenhoven
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Daniel J. Warmenhoven |
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Title: |
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Chief Executive Officer and Director |
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENT, that each person whose signature appears below constitutes
and appoints Daniel J. Warmenhoven and Steven J. Gomo, and each of them, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement on Form S-8, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or
their or his substitutes, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Company and in the capacities and on the
dates indicated:
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Signatures |
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Title |
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Date |
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/s/ DANIEL J. WARMENHOVEN
(Daniel J. Warmenhoven) |
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Chief Executive Officer, Director
(Principal Executive Officer)
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September 2, 2005 |
/s/ DONALD T. VALENTINE
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Chairman of the Board, Director
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September 2, 2005 |
(Donald T. Valentine) |
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/s/ STEVEN J. GOMO
(Steven J. Gomo) |
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Executive Vice President of Finance
and Chief Financial Officer
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September 2, 2005 |
/s/ ALAN EARHART
(Alan Earhart) |
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Director
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September 2, 2005 |
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Signatures |
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Title |
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Date |
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/s/ CAROL A. BARTZ
(Carol A. Bartz) |
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Director
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September 2, 2005 |
/s/ NICHOLAS G. MOORE
(Nicholas G. Moore) |
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Director
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September 2, 2005 |
/s/ GEORGE T. SHAHEEN
(George T. Shaheen) |
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Director
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September 2, 2005 |
/s/ ROBERT T. WALL
(Robert T. Wall) |
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Director
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September 2, 2005 |
/s/ DR. SACHIO SEMMOTO
(Dr. Sachio Semmoto) |
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Director
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September 2, 2005 |
/s/ MARK LESLIE
(Mark Leslie) |
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Director
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September 2, 2005 |
/s/ JEFFRY R. ALLEN
(Jeffry R. Allen) |
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Director
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September 2, 2005 |
EXHIBIT INDEX
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Exhibit |
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Number |
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Description |
3.1
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Certificate of Incorporation of the Registrant (1). |
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3.2
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Bylaws of the Registrant (1). |
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3.3
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Certificate of Amendment to the Bylaws of the Registrant (2). |
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4.1
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The Registrants Registration Statement No. 000-27130 on Form 8-A,
filed with the Commission on November 1, 1995, in which there is
described the terms, rights and provisions applicable to the
Registrants Common Stock. |
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5.1
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Opinion of Wilson Sonsini Goodrich & Rosati, P.C. |
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23.1
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Consent of Deloitte and Touche LLP |
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23.2
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Consent of Wilson Sonsini Goodrich & Rosati, P. C., is
contained in Exhibit 5.1 to this Registration Statement |
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24
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Power of Attorney is contained on the signature page |
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99.1
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Form of Stock Option Grant Notice and Option Agreement under the
Decru, Inc. Amended and Restated 2001 Equity Incentive Plan |
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99.2
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Form of Stock Option Grant Notice and Option Agreement under the
Decru, Inc. 2001 Equity Incentive Plan |
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99.3
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Form of Early Exercise Stock Purchase Agreement under the Decru,
Inc. 2001 Equity Incentive Plan |
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99.4
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Form of Restricted Stock Bonus Grant Notice and Agreement under
the Decru, Inc. 2001 Equity Incentive Plan |
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(1) |
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Previously filed as an exhibit with the Companys Current Report on Form 8-K dated
December 4, 2001. |
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(2) |
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Previously filed as an exhibit with the Companys Current Report on Form 8-K dated May
4, 2005. |
exv5w1
EXHIBIT 5.1
September 2, 2005
Network Appliance, Inc.
495 East Java Drive
Sunnyvale, California 94089
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection with the filing by
Network Appliance, Inc. (the Company) of a Registration Statement on Form S-8 (the Registration
Statement) with the Securities and Exchange Commission covering the offering of up to 1,926,462
shares of the Companys Common Stock, $.001 par value, pursuant to the Decru, Inc. 2001 Equity
Incentive Plan, $.001 par value, (collectively, the Shares) (such plan, the Plan).
In connection with this opinion, we have examined the Registration Statement, your Certificate of
Incorporation and By-laws, as amended, and such other documents, records, certificates, memoranda
and other instruments as we deem necessary as a basis for this opinion. We have assumed the
genuineness and authenticity of all documents submitted to us as originals, the conformity to
originals of all documents submitted to us as copies thereof, and the due execution and delivery of
all documents where due execution and delivery are a prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion that the Shares, when
sold and issued in accordance with the Plans and the Registration Statement, will be validly
issued, fully paid, and nonassessable.
We consent to the filing of this opinion as an exhibit to the Registration Statement.
Very truly yours,
/s/ Wilson Sonsini Goodrich & Rosati, P.C.
Wilson Sonsini Goodrich & Rosati, P.C.
exv23w1
EXHIBIT 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in this Registration Statement on Form S-8 of our
reports dated July 7, 2005, relating to the financial statements and financial statement schedule
of Network Appliance, Inc. and managements report on the effectiveness of internal control over
financial reporting appearing in the Annual Report on Form 10-K of Network Appliance, Inc. for the
year ended April 30, 2005.
/s/ Deloitte and Touche LLP
Deloitte and Touche LLP
San Jose, California
August 31, 2005
exv99w1
Exhibit 99.1
Decru, Inc. 2001 Equity Incentive Plan
STOCK OPTION GRANT NOTICE
Decru, Inc. (the Company), pursuant to its 2001 Equity Incentive Plan (the Plan),
hereby grants to Optionholder an option to purchase the number of shares of the Companys Common
Stock set forth below. This option is subject to all of the terms and conditions as set forth
herein and in the Stock Option Agreement, the Plan and the Notice of Exercise, all of which are
attached hereto and incorporated herein in their entirety.
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Optionholder:
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Date of Grant: |
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Vesting Commencement Date: |
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Number of Shares Subject to Option: |
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Exercise Price (Per Share):
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$.001 |
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Total Exercise Price: |
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Expiration Date: |
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Type of Grant:
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Nonstatutory Stock Option |
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Exercise Schedule:
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Shares are automatically deemed exercised when
vested in accordance with the Vesting Schedule,
without any action on the part of the Optionholder
and in consideration for the Payment provided below. |
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Vesting Schedule:
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50% of the shares vest upon the
completion of one year of Continuous Service (as
defined in Section 2(h) the Plan) following the
Vesting Commencement Date.
50% of the shares vest upon the completion of two years of Continuous
Service (as defined in Section 2(h) the Plan) following the Vesting
Commencement Date. |
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Payment:
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In consideration for past services provided by Optionholder to the Company. |
Additional Terms/Acknowledgements: The undersigned Optionholder acknowledges receipt of, and
understands and agrees to, this Grant Notice, the Stock Option Agreement and the Plan.
Optionholder further acknowledges that as of the Date of Grant, this Grant Notice, the Stock Option
Agreement and the Plan set forth the entire understanding between Optionholder and the Company
regarding the acquisition of stock in the Company and supersede all prior oral and written
agreements on that subject.
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Decru, Inc. |
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Optionholder: |
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By: |
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Signature
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Signature |
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Title:
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Date: |
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Date: |
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Attachments: Stock Option Agreement and 2001 Equity Incentive Plan
Attachment I
Amended and Restated 2001 Equity Incentive Plan
STOCK OPTION AGREEMENT
Pursuant to your Stock Option Grant Notice (Grant Notice) and this Stock Option Agreement,
Decru, Inc. (the Company) has granted you an option under its 2001 Equity Incentive Plan
(the Plan) to purchase the number of shares of the Companys Common Stock indicated in your Grant
Notice at the exercise price indicated in your Grant Notice. Defined terms not explicitly defined
in this Stock Option Agreement but defined in the Plan shall have the same definitions as in the
Plan.
The details of your option are as follows:
1. Vesting. Subject to the limitations contained herein, your option will vest as
provided in your Grant Notice, provided that vesting will cease upon the termination of your
Continuous Service.
2. Number of Shares and Exercise Price. The number of shares of Common Stock subject
to your option and your exercise price per share referenced in your Grant Notice may be adjusted
from time to time for Capitalization Adjustments, as provided in the Plan.
3. Method of Payment. Payment of the exercise price is due in full upon exercise of
all or any part of your option. Payment of the exercise price will be made in the manner provided
by your Grant Notice.
4. Whole Shares. You may exercise your option only for whole shares of Common Stock.
5. Securities Law Compliance. Notwithstanding anything to the contrary contained
herein, you may not exercise your option unless the shares of Common Stock issuable upon such
exercise are then registered under the Securities Act or, if such shares of Common Stock are not
then so registered, the Company has determined that such exercise and issuance would be exempt from
the registration requirements of the Securities Act. The exercise of your option must also comply
with other applicable laws and regulations governing your option, and you may not exercise your
option if the Company determines that such exercise would not be in material compliance with such
laws and regulations.
6. Term. You may not exercise your option before the commencement of its term or
after its term expires. The term of your option commences on the Date of Grant and expires upon
the earliest of the following:
(a) three (3) months after the termination of your Continuous Service for any reason other
than your Disability or death, provided that if during any part of such three-month period your
option is not exercisable solely because of the condition set forth in the preceding paragraph
relating to Securities Law Compliance, your option shall not expire until the earlier of the
Expiration Date or until it shall have been exercisable for an aggregate period of three (3)
months after the termination of your Continuous Service;
(b) twelve (12) months after the termination of your Continuous Service due to your
Disability;
(c) eighteen (18) months after your death if you die either during your Continuous Service or
within three (3) months after your Continuous Service terminates;
(d) the Expiration Date indicated in your Grant Notice; or
(e) the day before the tenth (10th) anniversary of the Date of Grant.
7. Exercise.
(a) The vested portion of your option will be deemed automatically exercised as provided in
your Grant Notice.
(b) By exercising your option you agree (i) to provide such additional documents as the
Company may require pursuant to the terms of the 2001 Equity Incentive Plan, and (ii) to provide
for the payment by you to the Company (in the manner designated by the Company) of any tax
withholding obligation of the Company relating to (1) the exercise of this option, (2) the lapse of
any substantial risk of forfeiture to which the shares of Common Stock are subject at the time of
exercise, or (3) the disposition of shares of Common Stock acquired upon such exercise.
(c) By exercising your option you agree that the Company (or a representative of the
underwriter(s)) may, in connection with the first underwritten registration of the offering of any
securities of the Company under the Securities Act, require that you not sell, dispose of,
transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging
or similar transaction with the same economic effect as a sale, any shares of Common Stock or other
securities of the Company held by you, for a period of time specified by the underwriter(s) (not to
exceed one hundred eighty (180) days) following the effective date of the registration statement of
the Company filed under the Securities Act. You further agree to execute and deliver such other
agreements as may be reasonably requested by the Company and/or the underwriter(s) that are
consistent with the foregoing or that are necessary to give further effect thereto. In order to
enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to
your shares of Common Stock until the end of such period. The underwriters of the Companys stock
are intended third party beneficiaries of this Section 7(c) and shall have the right, power and
authority to enforce the provisions hereof as though they were a party hereto.
8. Transferability. Your option is not transferable, except by will or by the laws
of descent and distribution, and is exercisable during your life only by you. Notwithstanding the
foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you
may designate a third party who, in the event of your death, shall thereafter be entitled to
exercise your option.
9. Right of First Refusal. Shares of Common Stock that you acquire upon exercise of
your option are subject to any right of first refusal that may be described in the Companys bylaws
in effect at such time the Company elects to exercise its right. The Companys right of first
refusal shall expire on the Listing Date.
10. Right of Repurchase. To the extent provided in the Companys bylaws as amended
from time to time, the Company shall have the right to repurchase all or any part of the shares of
Common Stock you acquire pursuant to the exercise of your option.
11. Option not a Service Contract. Your option is not an employment or service
contract, and nothing in your option shall be deemed to create in any way whatsoever any obligation
on your part to continue in the employ of the Company or an Affiliate, or of the Company or an
Affiliate to continue your employment. In addition, nothing in your option shall obligate the
Company or an Affiliate, their respective shareholders, Boards of Directors, Officers or Employees
to continue any relationship that you might have as a Director or Consultant for the Company or an
Affiliate.
12. Withholding Obligations.
(a) At the time you exercise your option, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any other amounts
payable to you, and otherwise agree to make adequate provision for (including by means of a
cashless exercise pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if
any, which arise in connection with your option.
(b) Upon your request and subject to approval by the Company, in its sole discretion, and
compliance with any applicable conditions or restrictions of law, the Company may withhold from
fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a
number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of
the date of exercise, not in excess of the minimum amount of tax required to be withheld by law.
If the date of determination of any tax withholding obligation is deferred to a date later than the
date of exercise of your option, share withholding pursuant to the preceding sentence shall not be
permitted unless you make a proper and timely election under Section 83(b) of the Code, covering
the aggregate number of shares of Common Stock acquired upon such exercise with respect to which
such determination is otherwise deferred, to accelerate the determination of such tax withholding
obligation to the date of exercise of your option. Notwithstanding the filing of such election,
shares of Common Stock shall be withheld solely from fully vested shares of Common Stock determined
as of the date of exercise of your option that are otherwise issuable to you upon such exercise.
Any adverse consequences to you arising in connection with such share withholding procedure shall
be your sole responsibility.
(c) You may not exercise your option unless the tax withholding obligations of the Company
and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when
desired even though your option is vested, and the Company shall have no
obligation to issue a certificate for such shares of Common Stock or release such shares of
Common Stock from any escrow provided for herein.
13. Notices. Any notices provided for in your option or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by
mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company.
14. Governing Plan Document. Your option is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of your option, and is further subject to all
interpretations, amendments, rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of your option
and those of the Plan, the provisions of the Plan shall control.
Attachment II
Decru, inc.
2001 Equity Incentive Plan
Termination Date: September 5, 2011
1. Purposes.
(a) Eligible Stock Award Recipients. The persons eligible to receive Stock Awards are the
Employees, Directors and Consultants of the Company and its Affiliates.
(b) Available Stock Awards. The purpose of the Plan is to provide a means by which eligible
recipients of Stock Awards may be given an opportunity to benefit from increases in value of the
Common Stock through the granting of the following Stock Awards: (i) Incentive Stock Options, (ii)
Nonstatutory Stock Options, (iii) stock bonuses and (iv) rights to acquire restricted stock.
(c) General Purpose. The Company, by means of the Plan, seeks to retain the services of the
group of persons eligible to receive Stock Awards, to secure and retain the services of new members
of this group and to provide incentives for such persons to exert maximum efforts for the success
of the Company and its Affiliates.
2. Definitions.
(a) Affiliate means any parent corporation or subsidiary corporation of the Company, whether
now or hereafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of
the Code.
(b) Board means the Board of Directors of the Company.
(c) Code means the Internal Revenue Code of 1986, as amended.
(d) Committee means a committee of one or more members of the Board appointed by the Board
in accordance with subsection 3(c).
(e) Common Stock means the common stock of the Company.
(f) Company means Decru, Inc., a Delaware corporation.
(g) Consultant means any person, including an advisor, (i) engaged by the Company or an
Affiliate to render consulting or advisory services and who is compensated for such services or
(ii) who is a member of the Board of Directors of an Affiliate. However, the term Consultant
shall not include either Directors who are not compensated by the Company
for their services as Directors or Directors who are merely paid a directors fee by the
Company for their services as Directors.
(h) Continuous Service means that the Participants service with the Company or an
Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. The
Participants Continuous Service shall not be deemed to have terminated merely because of a change
in the capacity in which the Participant renders service to the Company or an Affiliate as an
Employee, Consultant or Director or a change in the entity for which the Participant renders such
service, provided that there is no interruption or termination of the Participants Continuous
Service. For example, a change in status from an Employee of the Company to a Consultant of an
Affiliate or a Director will not constitute an interruption of Continuous Service. The Board or
the chief executive officer of the Company, in that partys sole discretion, may determine whether
Continuous Service shall be considered interrupted in the case of any leave of absence approved by
that party, including sick leave, military leave or any other personal leave.
(i) Covered Employee means the chief executive officer and the four (4) other highest
compensated officers of the Company for whom total compensation is required to be reported to
stockholders under the Exchange Act, as determined for purposes of Section 162(m) of the Code.
(j) Director means a member of the Board of Directors of the Company.
(k) Disability means (i) before the Listing Date, the inability of a person, in the opinion
of a qualified physician acceptable to the Company, to perform the major duties of that persons
position with the Company or an Affiliate of the Company because of the sickness or injury of the
person and (ii) after the Listing Date, the permanent and total disability of a person within the
meaning of Section 22(e)(3) of the Code.
(l) Employee means any person employed by the Company or an Affiliate. Mere service as a
Director or payment of a directors fee by the Company or an Affiliate shall not be sufficient to
constitute employment by the Company or an Affiliate.
(m) Exchange Act means the Securities Exchange Act of 1934, as amended.
(n) Fair Market Value means, as of any date, the value of the Common Stock determined as
follows:
(i) If the Common Stock is listed on any established stock exchange or traded on the Nasdaq
National Market or the Nasdaq SmallCap Market, the Fair Market Value of a share of Common Stock
shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or market (or the exchange or market with the greatest volume of trading in
the Common Stock) on the last market trading day prior to the day of determination, as reported in
The Wall Street Journal or such other source as the Board deems reliable.
(ii) In the absence of such markets for the Common Stock, the Fair Market Value shall be
determined in good faith by the Board.
(iii) Prior to the Listing Date, the value of the Common Stock shall be determined in a manner
consistent with Section 260.140.50 of Title 10 of the California Code of Regulations.
(o) Incentive Stock Option means an Option intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code and the regulations promulgated thereunder.
(p) Listing Date means the first date upon which any security of the Company is listed (or
approved for listing) upon notice of issuance on any securities exchange or designated (or approved
for designation) upon notice of issuance as a national market security on an interdealer quotation
system if such securities exchange or interdealer quotation system has been certified in accordance
with the provisions of Section 25100(o) of the California Corporate Securities Law of 1968.
(q) Non-Employee Director means a Director who either (i) is not a current Employee or
Officer of the Company or its parent or a subsidiary, does not receive compensation (directly or
indirectly) from the Company or its parent or a subsidiary for services rendered as a consultant or
in any capacity other than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
(Regulation S-K)), does not possess an interest in any other transaction as to which disclosure
would be required under Item 404(a) of Regulation S-K and is not engaged in a business relationship
as to which disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is otherwise
considered a non-employee director for purposes of Rule 16b-3.
(r) Nonstatutory Stock Option means an Option not intended to qualify as an Incentive Stock
Option.
(s) Officer means a person who is an officer of the Company within the meaning of Section 16
of the Exchange Act and the rules and regulations promulgated thereunder.
(t) Option means an Incentive Stock Option or a Nonstatutory Stock Option granted pursuant
to the Plan.
(u) Option Agreement means a written agreement between the Company and an Optionholder
evidencing the terms and conditions of an individual Option grant. Each Option Agreement shall be
subject to the terms and conditions of the Plan.
(v) Optionholder means a person to whom an Option is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Option.
(w) Outside Director means a Director who either (i) is not a current employee of the
Company or an affiliated corporation (within the meaning of Treasury Regulations promulgated
under Section 162(m) of the Code), is not a former employee of the Company or an affiliated
corporation receiving compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an affiliated corporation at any time and is
not currently receiving direct or indirect remuneration from the Company or an
affiliated corporation for services in any capacity other than as a Director or (ii) is
otherwise considered an outside director for purposes of Section 162(m) of the Code.
(x) Participant means a person to whom a Stock Award is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Stock Award.
(y) Plan means this Decru, Inc. 2001 Equity Incentive Plan.
(z) Rule 16b-3 means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule
16b-3, as in effect from time to time.
(aa) Securities Act means the Securities Act of 1933, as amended.
(bb) Stock Award means any right granted under the Plan, including an Option, a stock bonus
and a right to acquire restricted stock.
(cc) Stock Award Agreement means a written agreement between the Company and a holder of a
Stock Award evidencing the terms and conditions of an individual Stock Award grant. Each Stock
Award Agreement shall be subject to the terms and conditions of the Plan.
(dd) Ten Percent Stockholder means a person who owns (or is deemed to own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of any of its Affiliates.
3. Administration.
(a) Administration by Board. The Board shall administer the Plan unless and until the Board
delegates administration to a Committee, as provided in subsection 3(c). Any interpretation of the
Plan by the Board and any decision by the Board under the Plan shall be final and binding on all
persons.
(b) Powers of Board. The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:
(i) To determine from time to time which of the persons eligible under the Plan shall be
granted Stock Awards; when and how each Stock Award shall be granted; what type or combination of
types of Stock Award shall be granted; the provisions of each Stock Award granted (which need not
be identical), including the time or times when a person shall be permitted to receive Common Stock
pursuant to a Stock Award; and the number of shares of Common Stock with respect to which a Stock
Award shall be granted to each such person.
(ii) To construe and interpret the Plan and Stock Awards granted under it, and to establish,
amend and revoke rules and regulations for its administration. The Board, in the exercise of this
power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award
Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.
(iii) To amend the Plan or a Stock Award as provided in Section 12.
(iv) Generally, to exercise such powers and to perform such acts as the Board deems necessary
or expedient to promote the best interests of the Company which are not in conflict with the
provisions of the Plan.
(c) Delegation to Committee.
(i) General. The Board may delegate administration of the Plan to a Committee or Committees
of one (1) or more members of the Board, and the term Committee shall apply to any person or
persons to whom such authority has been delegated. If administration is delegated to a Committee,
the Committee shall have, in connection with the administration of the Plan, the powers theretofore
possessed by the Board, including the power to delegate to a subcommittee any of the administrative
powers the Committee is authorized to exercise (and references in this Plan to the Board shall
thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board.
The Board may abolish the Committee at any time and revest in the Board the administration of the
Plan.
(ii) Committee Composition when Common Stock is Publicly Traded. At such time as the Common
Stock is publicly traded, in the discretion of the Board, a Committee may consist solely of two or
more Outside Directors, in accordance with Section 162(m) of the Code, and/or solely of two or more
Non-Employee Directors, in accordance with Rule 16b-3. Within the scope of such authority, the
Board or the Committee may (1) delegate to a committee of one or more members of the Board who are
not Outside Directors the authority to grant Stock Awards to eligible persons who are either (a)
not then Covered Employees and are not expected to be Covered Employees at the time of recognition
of income resulting from such Stock Award or (b) not persons with respect to whom the Company
wishes to comply with Section 162(m) of the Code and/or (2) delegate to a committee of one or more
members of the Board who are not Non-Employee Directors the authority to grant Stock Awards to
eligible persons who are not then subject to Section 16 of the Exchange Act.
4. Shares Subject to the Plan.
(a) Share Reserve. Subject to the provisions of Section 11 relating to adjustments upon
changes in Common Stock, the Common Stock that may be issued pursuant to Stock Awards shall not
exceed in the aggregate 13,561,511 shares of Common Stock.
(b) Reversion of Shares to the Share Reserve. If any Stock Award shall for any reason expire
or otherwise terminate, in whole or in part, without having been exercised in full, the shares of
Common Stock not acquired under such Stock Award shall revert to and again become available for
issuance under the Plan.
(c) Source of Shares. The shares of Common Stock subject to the Plan may be unissued shares
or reacquired shares, bought on the market or otherwise.
(d) Shares Reserve Limitation. Prior to the Listing Date and to the extent then required by
Section 260.140.45 of Title 10 of the California Code of Regulations, the total number of shares of
Common Stock issuable upon exercise of all outstanding Options and the total number of shares of
Common Stock provided for under any stock bonus or similar plan to
the Company shall not exceed the applicable percentage as calculated in accordance with the
conditions and exclusions of Section 260.140.45 of Title 10 of the California Code of Regulations,
based on the shares of Common Stock of the Company that are outstanding at the time the calculation
is made.
5. Eligibility.
(a) Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to
Employees. Stock Awards other than Incentive Stock Options may be granted to Employees, Directors
and Consultants.
(b) Ten Percent Stockholders.
(i) A Ten Percent Stockholder shall not be granted an Incentive Stock Option unless the
exercise price of such Option is at least one hundred ten percent (110%) of the Fair Market Value
of the Common Stock at the date of grant and the Option is not exercisable after the expiration of
five (5) years from the date of grant.
(ii) Prior to the Listing Date, a Ten Percent Stockholder shall not be granted a Nonstatutory
Stock Option unless the exercise price of such Option is at least (i) one hundred ten percent
(110%) of the Fair Market Value of the Common Stock at the date of grant or (ii) such lower
percentage of the Fair Market Value of the Common Stock at the date of grant as is permitted by
Section 260.140.41 of Title 10 of the California Code of Regulations at the time of the grant of
the Option.
(iii) Prior to the Listing Date, a Ten Percent Shareholder shall not be granted a restricted
stock award unless the purchase price of the restricted stock is at least (i) one hundred percent
(100%) of the Fair Market Value of the Common Stock at the date of grant or (ii) such lower
percentage of the Fair Market Value of the Common Stock at the date of grant as is permitted by
Section 260.140.41 of Title 10 of the California Code of Regulations at the time of the grant of
the Option.
(c) Section 162(m) Limitation. Subject to the provisions of Section 11 relating to
adjustments upon changes in the shares of Common Stock, no Employee shall be eligible to be granted
Options covering more than two million two hundred fifty thousand (2,250,000) shares of Common
Stock during any calendar year. This subsection 5(c) shall not apply prior to the Listing Date
and, following the Listing Date, this subsection 5(c) shall not apply until (i) the earliest of:
(1) the first material modification of the Plan (including any increase in the number of shares of
Common Stock reserved for issuance under the Plan in accordance with Section 4); (2) the issuance
of all of the shares of Common Stock reserved for issuance under the Plan; (3) the expiration of
the Plan; or (4) the first meeting of stockholders at which Directors are to be elected that occurs
after the close of the third calendar year following the calendar year in which occurred the first
registration of an equity security under Section 12 of the Exchange Act; or (ii) such other date
required by Section 162(m) of the Code and the rules and regulations promulgated thereunder.
(d) Consultants.
(i) Prior to the Listing Date, a Consultant shall not be eligible for the grant of a Stock
Award if, at the time of grant, either the offer or the sale of the Companys securities to such
Consultant is not exempt under Rule 701 of the Securities Act (Rule 701) because of the nature of
the services that the Consultant is providing to the Company, or because the Consultant is not a
natural person, or as otherwise provided by Rule 701, unless the Company determines that such grant
need not comply with the requirements of Rule 701 and will satisfy another exemption under the
Securities Act as well as comply with the securities laws of all other relevant jurisdictions.
(ii) From and after the Listing Date, a Consultant shall not be eligible for the grant of a
Stock Award if, at the time of grant, a Form S-8 Registration Statement under the Securities Act
(Form S-8) is not available to register either the offer or the sale of the Companys securities
to such Consultant because of the nature of the services that the Consultant is providing to the
Company, or because the Consultant is not a natural person, or as otherwise provided by the rules
governing the use of Form S-8, unless the Company determines both (i) that such grant (A) shall be
registered in another manner under the Securities Act (e.g., on a Form S-3 Registration Statement)
or (B) does not require registration under the Securities Act in order to comply with the
requirements of the Securities Act, if applicable, and (ii) that such grant complies with the
securities laws of all other relevant jurisdictions.
(iii) Rule 701 and Form S-8 generally are available to consultants and advisors only if (i)
they are natural persons; (ii) they provide bona fide services to the issuer, its parents, its
majority-owned subsidiaries or majority-owned subsidiaries of the issuers parent; and (iii) the
services are not in connection with the offer or sale of securities in a capital-raising
transaction, and do not directly or indirectly promote or maintain a market for the issuers
securities.
6. Option Provisions.
Each Option shall be in such form and shall contain such terms and conditions as the Board
shall deem appropriate. All Options shall be separately designated Incentive Stock Options or
Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate
certificate or certificates will be issued for shares of Common Stock purchased on exercise of each
type of Option. The provisions of separate Options need not be identical, but each Option shall
include (through incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:
(a) Term. Subject to the provisions of subsection 5(b) regarding Ten Percent Shareholders, no
Option granted prior to the Listing Date shall be exercisable after the expiration of ten (10)
years from the date it was granted, and no Incentive Stock Option granted on or after the Listing
Date shall be exercisable after the expiration of ten (10) years from the date it was granted.
(b) Exercise Price of an Incentive Stock Option. Subject to the provisions of subsection 5(b)
regarding Ten Percent Stockholders, the exercise price of each Incentive Stock
Option shall be not less than one hundred percent (100%) of the Fair Market Value of the
Common Stock subject to the Option on the date the Option is granted. Notwithstanding the
foregoing, an Incentive Stock Option may be granted with an exercise price lower than that set
forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution
for another option in a manner satisfying the provisions of Section 424(a) of the Code.
(c) Exercise Price of a Nonstatutory Stock Option. Subject to the provisions of
subsection 5(b) regarding Ten Percent Shareholders, the exercise price of each Nonstatutory Stock
Option granted prior to the Listing Date shall be not less than the par value per share of the
Common Stock equal to $0.001 per share. The exercise price of each Nonstatutory Stock Option
granted on or after the Listing Date shall be not less than eighty-five percent (85%) of the Fair
Market Value of the Common Stock subject to the Option on the date the Option is granted.
Notwithstanding the foregoing, a Nonstatutory Stock Option may be granted with an exercise price
lower than that set forth in the preceding sentence if such Option is granted pursuant to an
assumption or substitution for another option in a manner satisfying the provisions of Section
424(a) of the Code.
(d) Consideration. The purchase price of Common Stock acquired pursuant to an Option shall be
paid, to the extent permitted by applicable statutes and regulations, either (i) in cash at the
time the Option is exercised or (ii) at the discretion of the Board at the time of the grant of the
Option (or subsequently in the case of a Nonstatutory Stock Option) (1) by delivery to the Company
of other Common Stock, (2) according to a deferred payment or other similar arrangement with the
Optionholder or (3) in any other form of legal consideration that may be acceptable to the Board.
Unless otherwise specifically provided in the Option, the purchase price of Common Stock acquired
pursuant to an Option that is paid by delivery to the Company of other Common Stock acquired,
directly or indirectly from the Company, shall be paid only by shares of the Common Stock of the
Company that have been held for more than six (6) months (or such longer or shorter period of time
required to avoid a charge to earnings for financial accounting purposes). At any time that the
Company is incorporated in Delaware, payment of the Common Stocks par value, as defined in the
Delaware General Corporation Law, shall not be made by deferred payment.
In the case of any deferred payment arrangement, interest shall be compounded at least
annually and shall be charged at the market rate of interest necessary to avoid a charge to
earnings for financial accounting purposes.
(e) Transferability of an Incentive Stock Option. An Incentive Stock Option shall not be
transferable except by will or by the laws of descent and distribution and shall be exercisable
during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing,
the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the Optionholder, shall
thereafter be entitled to exercise the Option.
(f) Transferability of a Nonstatutory Stock Option. A Nonstatutory Stock Option granted prior
to the Listing Date shall not be transferable except by will or by the laws of descent and
distribution and, to the extent provided in the Option Agreement, to such further extent as
permitted by Section 260.140.41(d) of Title 10 of the California Code of Regulations at the time of
the grant of the Option, and shall be exercisable during the lifetime of the Optionholder only
by the Optionholder. A Nonstatutory Stock Option granted on or after the Listing Date shall
be transferable to the extent provided in the Option Agreement. If the Nonstatutory Stock Option
does not provide for transferability, then the Nonstatutory Stock Option shall not be transferable
except by will or by the laws of descent and distribution and shall be exercisable during the
lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the
Optionholder may, by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the Optionholder, shall
thereafter be entitled to exercise the Option.
(g) Vesting Generally. The total number of shares of Common Stock subject to an Option may,
but need not, vest and therefore become exercisable in periodic installments that may, but need
not, be equal. The Option may be subject to such other terms and conditions on the time or times
when it may be exercised (which may be based on performance or other criteria) as the Board may
deem appropriate. The vesting provisions of individual Options may vary. The provisions of this
subsection 6(g) are subject to any Option provisions governing the minimum number of shares of
Common Stock as to which an Option may be exercised.
(h) Minimum Vesting Prior to the Listing Date. Notwithstanding the foregoing subsection 6(g),
to the extent that the following restrictions on vesting are required by Section 260.140.41(f) of
Title 10 of the California Code of Regulations at the time of the grant of the Option, then:
(i) Options granted prior to the Listing Date to an Employee who is not an Officer, Director
or Consultant shall provide for vesting of the total number of shares of Common Stock at a rate of
at least twenty percent (20%) per year over five (5) years from the date the Option was granted,
subject to reasonable conditions such as continued employment; and
(ii) Options granted prior to the Listing Date to Officers, Directors or Consultants may be
made fully exercisable, subject to reasonable conditions such as continued employment, at any time
or during any period established by the Company.
(i) Termination of Continuous Service. In the event an Optionholders Continuous Service
terminates (other than upon the Optionholders death or Disability), the Optionholder may exercise
his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of
the date of termination) but only within such period of time ending on the earlier of (i) the date
three (3) months following the termination of the Optionholders Continuous Service (or such longer
or shorter period specified in the Option Agreement, which period shall not be less than thirty
(30) days for Options granted prior to the Listing Date unless such termination is for cause), or
(ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after
termination, the Optionholder does not exercise his or her Option within the time specified in the
Option Agreement, the Option shall terminate.
(j) Extension of Termination Date. An Optionholders Option Agreement may also provide that
if the exercise of the Option following the termination of the Optionholders Continuous Service
(other than upon the Optionholders death or Disability) would be prohibited at any time solely
because the issuance of shares of Common Stock would violate the
registration requirements under the Securities Act, then the Option shall terminate on the
earlier of (i) the expiration of the term of the Option set forth in subsection 6(a) or (ii) the
expiration of a period of three (3) months after the termination of the Optionholders Continuous
Service during which the exercise of the Option would not be in violation of such registration
requirements.
(k) Disability of Optionholder. In the event that an Optionholders Continuous Service
terminates as a result of the Optionholders Disability, the Optionholder may exercise his or her
Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of
termination), but only within such period of time ending on the earlier of (i) the date twelve (12)
months following such termination (or such longer or shorter period specified in the Option
Agreement, which period shall not be less than six (6) months for Options granted prior to the
Listing Date) or (ii) the expiration of the term of the Option as set forth in the Option
Agreement. If, after termination, the Optionholder does not exercise his or her Option within the
time specified herein, the Option shall terminate.
(l) Death of Optionholder. In the event (i) an Optionholders Continuous Service terminates
as a result of the Optionholders death or (ii) the Optionholder dies within the period (if any)
specified in the Option Agreement after the termination of the Optionholders Continuous Service
for a reason other than death, then the Option may be exercised (to the extent the Optionholder was
entitled to exercise such Option as of the date of death) by the Optionholders estate, by a person
who acquired the right to exercise the Option by bequest or inheritance or by a person designated
to exercise the option upon the Optionholders death pursuant to subsection 6(e) or 6(f), but only
within the period ending on the earlier of (1) the date eighteen (18) months following the date of
death (or such longer or shorter period specified in the Option Agreement, which period shall not
be less than six (6) months for Options granted prior to the Listing Date) or (2) the expiration of
the term of such Option as set forth in the Option Agreement. If, after death, the Option is not
exercised within the time specified herein, the Option shall terminate.
(m) Early Exercise. The Option may, but need not, include a provision whereby the
Optionholder may elect at any time before the Optionholders Continuous Service terminates to
exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior
to the full vesting of the Option. Subject to the Repurchase Limitation in subsection 10(h), any
unvested shares of Common Stock so purchased may be subject to a repurchase option in favor of the
Company or to any other restriction the Board determines to be appropriate.
(n) Right of Repurchase. Subject to the Repurchase Limitation in subsection 10(h), the
Option may, but need not, include a provision whereby the Company may elect, prior to the Listing
Date, to repurchase all or any part of the vested shares of Common Stock acquired by the
Optionholder pursuant to the exercise of the Option.
(o) Right of First Refusal. The Option may, but need not, include a provision whereby the
Company may elect, prior to the Listing Date, to exercise a right of first refusal following
receipt of notice from the Optionholder of the intent to transfer all or any part of the shares of
Common Stock received upon the exercise of the Option. Except as expressly provided
in this subsection 6(o), such right of first refusal shall otherwise comply with any
applicable provisions of the Bylaws of the Company.
7. Provisions of Stock Awards other than Options.
(a) Stock Bonus Awards. Each stock bonus agreement shall be in such form and shall contain
such terms and conditions as the Board shall deem appropriate. The terms and conditions of stock
bonus agreements may change from time to time, and the terms and conditions of separate stock bonus
agreements need not be identical, but each stock bonus agreement shall include (through
incorporation of provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:
(i) Consideration. A stock bonus may be awarded in consideration for past services actually
rendered to the Company or an Affiliate for its benefit.
(ii) Vesting. Subject to the Repurchase Limitation in subsection 10(h), shares of Common
Stock awarded under the stock bonus agreement may, but need not, be subject to a share repurchase
option in favor of the Company in accordance with a vesting schedule to be determined by the Board.
(iii) Termination of Participants Continuous Service. Subject to the Repurchase Limitation
in subsection 10(h), in the event a Participants Continuous Service terminates, the Company may
reacquire any or all of the shares of Common Stock held by the Participant which have not vested as
of the date of termination under the terms of the stock bonus agreement.
(iv) Transferability. For a stock bonus award made before the Listing Date, rights to acquire
shares of Common Stock under the stock bonus agreement shall not be transferable except by will or
by the laws of descent and distribution and shall be exercisable during the lifetime of the
Participant only by the Participant. For a stock bonus award made on or after the Listing Date,
rights to acquire shares of Common Stock under the stock bonus agreement shall be transferable by
the Participant only upon such terms and conditions as are set forth in the stock bonus agreement,
as the Board shall determine in its discretion, so long as Common Stock awarded under the stock
bonus agreement remains subject to the terms of the stock bonus agreement.
(b) Restricted Stock Awards. Each restricted stock purchase agreement shall be in such form
and shall contain such terms and conditions as the Board shall deem appropriate. The terms and
conditions of the restricted stock purchase agreements may change from time to time, and the terms
and conditions of separate restricted stock purchase agreements need not be identical, but each
restricted stock purchase agreement shall include (through incorporation of provisions hereof by
reference in the agreement or otherwise) the substance of each of the following provisions:
(i) Purchase Price. Subject to the provisions of subsection 5(b) regarding Ten Percent
Shareholders, the purchase price under each restricted stock purchase agreement shall be such
amount as the Board shall determine and designate in such restricted stock purchase agreement. For
restricted stock awards made prior to the Listing Date, the purchase
price shall not be less than eighty-five percent (85%) of the Common Stocks Fair Market Value
on the date such award is made or at the time the purchase is consummated. For restricted stock
awards made on or after the Listing Date, the purchase price shall not be less than eighty-five
percent (85%) of the Common Stocks Fair Market Value on the date such award is made or at the time
the purchase is consummated.
(ii) Consideration. The purchase price of Common Stock acquired pursuant to the restricted
stock purchase agreement shall be paid either: (i) in cash at the time of purchase; (ii) at the
discretion of the Board, according to a deferred payment or other similar arrangement with the
Participant; or (iii) in any other form of legal consideration that may be acceptable to the Board
in its discretion; provided, however, that at any time that the Company is incorporated in
Delaware, then payment of the Common Stocks par value, as defined in the Delaware General
Corporation Law, shall not be made by deferred payment.
(iii) Vesting. Subject to the Repurchase Limitation in subsection 10(h), shares of Common
Stock acquired under the restricted stock purchase agreement may, but need not, be subject to a
share repurchase option in favor of the Company in accordance with a vesting schedule to be
determined by the Board.
(iv) Termination of Participants Continuous Service. Subject to the Repurchase Limitation
in subsection 10(h), in the event a Participants Continuous Service terminates, the Company may
repurchase or otherwise reacquire any or all of the shares of Common Stock held by the Participant
which have not vested as of the date of termination under the terms of the restricted stock
purchase agreement.
(v) Transferability. For a restricted stock award made before the Listing Date, rights to
acquire shares of Common Stock under the restricted stock purchase agreement shall not be
transferable except by will or by the laws of descent and distribution and shall be exercisable
during the lifetime of the Participant only by the Participant. For a restricted stock award made
on or after the Listing Date, rights to acquire shares of Common Stock under the restricted stock
purchase agreement shall be transferable by the Participant only upon such terms and conditions as
are set forth in the restricted stock purchase agreement, as the Board shall determine in its
discretion, so long as Common Stock awarded under the restricted stock purchase agreement remains
subject to the terms of the restricted stock purchase agreement.
8. Covenants of the Company.
(a) Availability of Shares. During the terms of the Stock Awards, the Company shall keep
available at all times the number of shares of Common Stock required to satisfy such Stock Awards.
(b) Securities Law Compliance. The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be required to grant
Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards;
provided, however, that this undertaking shall not require the Company to register under the
Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable
to obtain from any such regulatory commission or agency the authority which counsel for the
Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the
Company shall be relieved from any liability for failure to issue and sell Common Stock upon
exercise of such Stock Awards unless and until such authority is obtained.
9. Use of Proceeds from Stock.
Proceeds from the sale of Common Stock pursuant to Stock Awards shall constitute general funds
of the Company.
10. Miscellaneous.
(a) Acceleration of Exercisability and Vesting. The Board shall have the power to accelerate
the time at which a Stock Award may first be exercised or the time during which a Stock Award or
any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Stock
Award stating the time at which it may first be exercised or the time during which it will vest.
(b) Stockholder Rights. No Participant shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares of Common Stock subject to such Stock Award
unless and until such Participant has satisfied all requirements for exercise of the Stock Award
pursuant to its terms.
(c) No Employment or other Service Rights. Nothing in the Plan or any instrument executed or
Stock Award granted pursuant thereto shall confer upon any Participant any right to continue to
serve the Company or an Affiliate in the capacity in effect at the time the Stock Award was granted
or shall affect the right of the Company or an Affiliate to terminate (i) the employment of an
Employee with or without notice and with or without cause, (ii) the service of a Consultant
pursuant to the terms of such Consultants agreement with the Company or an Affiliate or (iii) the
service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable
provisions of the corporate law of the state in which the Company or the Affiliate is incorporated,
as the case may be.
(d) Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market
Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by any Optionholder during any calendar year (under all
plans of the Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), the
Options or portions thereof which exceed such limit (according to the order in which they were
granted) shall be treated as Nonstatutory Stock Options.
(e) Investment Assurances. The Company may require a Participant, as a condition of
exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances
satisfactory to the Company as to the Participants knowledge and experience in financial and
business matters and/or to employ a purchaser representative reasonably satisfactory to the Company
who is knowledgeable and experienced in financial and business matters and that he or she is
capable of evaluating, alone or together with the purchaser representative, the merits and risks of
exercising the Stock Award; and (ii) to give written assurances satisfactory to the Company stating
that the Participant is acquiring Common Stock subject to the Stock Award for
the Participants own account and not with any present intention of selling or otherwise
distributing the Common Stock. The foregoing requirements, and any assurances given pursuant to
such requirements, shall be inoperative if (1) the issuance of the shares of Common Stock upon the
exercise or acquisition of Common Stock under the Stock Award has been registered under a then
currently effective registration statement under the Securities Act or (2) as to any particular
requirement, a determination is made by counsel for the Company that such requirement need not be
met in the circumstances under the then applicable securities laws. The Company may, upon advice
of counsel to the Company, place legends on stock certificates issued under the Plan as such
counsel deems necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of the Common Stock.
(f) Withholding Obligations. To the extent provided by the terms of a Stock Award Agreement,
the Participant may satisfy any federal, state or local tax withholding obligation relating to the
exercise or acquisition of Common Stock under a Stock Award by any of the following means (in
addition to the Companys right to withhold from any compensation paid to the Participant by the
Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the
Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to
the participant as a result of the exercise or acquisition of Common Stock under the Stock Award;
or (iii) delivering to the Company owned and unencumbered shares of Common Stock.
(g) Information Obligation. Prior to the Listing Date, to the extent required by Section
260.140.46 of Title 10 of the California Code of Regulations, the Company shall deliver financial
statements to Participants at least annually. This subsection 10(g) shall not apply to key
Employees whose duties in connection with the Company assure them access to equivalent information.
(h) Repurchase Limitation. The terms of any repurchase option shall be specified in the Stock
Award and may be either at Fair Market Value at the time of repurchase or at not less than the
original purchase price. To the extent required by Section 260.140.41 and Section 260.140.42 of
Title 10 of the California Code of Regulations at the time a Stock Award is made, any repurchase
option contained in a Stock Award granted prior to the Listing Date to a person who is not an
Officer, Director or Consultant shall be upon the terms described below:
(i) Fair Market Value. If the repurchase option gives the Company the right to repurchase the
shares of Common Stock upon termination of employment at not less than the Fair Market Value of the
shares of Common Stock to be purchased on the date of termination of Continuous Service, then (i)
the right to repurchase shall be exercised for cash or cancellation of purchase money indebtedness
for the shares of Common Stock within ninety (90) days of termination of Continuous Service (or in
the case of shares of Common Stock issued upon exercise of Stock Awards after such date of
termination, within ninety (90) days after the date of the exercise) or such longer period as may
be agreed to by the Company and the Participant (for example, for purposes of satisfying the
requirements of Section 1202(c)(3) of the Code regarding qualified small business stock) and (ii)
the right terminates when the shares of Common Stock become publicly traded.
(ii) Original Purchase Price. If the repurchase option gives the Company the right to
repurchase the shares of Common Stock upon termination of Continuous Service at the original
purchase price, then (i) the right to repurchase at the original purchase price shall lapse at the
rate of at least twenty percent (20%) of the shares of Common Stock per year over five (5) years
from the date the Stock Award is granted (without respect to the date the Stock Award was exercised
or became exercisable) and (ii) the right to repurchase shall be exercised for cash or cancellation
of purchase money indebtedness for the shares of Common Stock within ninety (90) days of
termination of Continuous Service (or in the case of shares of Common Stock issued upon exercise of
Options after such date of termination, within ninety (90) days after the date of the exercise) or
such longer period as may be agreed to by the Company and the Participant (for example, for
purposes of satisfying the requirements of Section 1202(c)(3) of the Code regarding qualified
small business stock).
11. Adjustments upon Changes in Stock.
(a) Capitalization Adjustments. If any change is made in the Common Stock subject to the
Plan, or subject to any Stock Award, without the receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend
in property other than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan will be appropriately adjusted in the class(es) and maximum
number of securities subject to the Plan pursuant to subsection 4(a) and the maximum number of
securities subject to award to any person pursuant to subsection 5(c), and the outstanding Stock
Awards will be appropriately adjusted in the class(es) and number of securities and price per share
of Common Stock subject to such outstanding Stock Awards. The Board shall make such adjustments,
and its determination shall be final, binding and conclusive. (The conversion of any convertible
securities of the Company shall not be treated as a transaction without receipt of consideration
by the Company.)
(b) Dissolution or Liquidation. In the event of a dissolution or liquidation of the Company,
then all outstanding Stock Awards shall terminate immediately prior to such event.
(c) Asset Sale, Merger, Consolidation or Reverse Merger. In the event of (i) a sale, lease or
other disposition of all or substantially all of the assets of the Company, (ii) a merger or
consolidation in which the Company is not the surviving corporation or (iii) a reverse merger in
which the Company is the surviving corporation but the shares of Common Stock outstanding
immediately preceding the merger are converted by virtue of the merger into other property, whether
in the form of securities, cash or otherwise (individually, a Corporate Transaction), then any
surviving corporation or acquiring corporation shall assume any Stock Awards outstanding under the
Plan or shall substitute similar stock awards (including an award to acquire the same consideration
paid to the shareholders in the Corporate Transaction) for those outstanding under the Plan. In
the event any surviving corporation or acquiring corporation refuses to assume such Stock Awards or
to substitute similar stock awards for those outstanding under the Plan, the Stock Awards shall
terminate if not exercised (if applicable) at or prior to the Corporate Transaction.
12. Amendment of the Plan and Stock Awards.
(a) Amendment of Plan. The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 11 relating to adjustments upon changes in Common Stock, no
amendment shall be effective unless approved by the stockholders of the Company to the extent
stockholder approval is necessary to satisfy the requirements of Section 422 of the Code, Rule
16b-3 or any Nasdaq or securities exchange listing requirements.
(b) Stockholder Approval. The Board may, in its sole discretion, submit any other amendment
to the Plan for stockholder approval, including, but not limited to, amendments to the Plan
intended to satisfy the requirements of Section 162(m) of the Code and the regulations thereunder
regarding the exclusion of performance-based compensation from the limit on corporate deductibility
of compensation paid to certain executive officers.
(c) Contemplated Amendments. It is expressly contemplated that the Board may amend the Plan
in any respect the Board deems necessary or advisable to provide eligible Employees with the
maximum benefits provided or to be provided under the provisions of the Code and the regulations
promulgated thereunder relating to Incentive Stock Options and/or to bring the Plan and/or
Incentive Stock Options granted under it into compliance therewith.
(d) No Impairment of Rights. Rights under any Stock Award granted before amendment of the
Plan shall not be impaired by any amendment of the Plan unless (i) the Company requests the consent
of the Participant and (ii) the Participant consents in writing.
(e) Amendment of Stock Awards. The Board at any time, and from time to time, may amend the
terms of any one or more Stock Awards; provided, however, that the rights under any Stock Award
shall not be impaired by any such amendment unless (i) the Company requests the consent of the
Participant and (ii) the Participant consents in writing.
13. Termination or Suspension of the Plan.
(a) Plan Term. The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate on the day before the tenth (10th) anniversary of the date the
Plan is adopted by the Board or approved by the stockholders of the Company, whichever is earlier.
No Stock Awards may be granted under the Plan while the Plan is suspended or after it is
terminated.
(b) No Impairment of Rights. Suspension or termination of the Plan shall not impair rights
and obligations under any Stock Award granted while the Plan is in effect except with the written
consent of the Participant.
14. Effective Date of Plan.
The Plan shall become effective as determined by the Board, but no Stock Award shall be
exercised (or, in the case of a stock bonus, shall be granted) unless and until the Plan has been
approved by the stockholders of the Company, which approval shall be within twelve (12) months
before or after the date the Plan is adopted by the Board.
15. Choice of Law.
The law of the State of California shall govern all questions concerning the construction,
validity and interpretation of this Plan, without regard to such states conflict of laws rules.
exv99w2
Exhibit 99.2
Decru, Inc. 2001 Equity Incentive Plan
STOCK OPTION GRANT NOTICE
Decru, Inc. (the Company), pursuant to its 2001 Equity Incentive Plan (the Plan),
hereby grants to Optionholder an option to purchase the number of shares of the Companys Common
Stock set forth below. This option is subject to all of the terms and conditions as set forth
herein and in the Stock Option Agreement, the Plan and the Notice of Exercise, all of which are
attached hereto and incorporated herein in their entirety.
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Optionholder: |
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Date of Grant: |
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Vesting Commencement Date: |
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Number of Shares Subject to Option: |
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Exercise Price (Per Share): |
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Total Exercise Price: |
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Expiration Date: |
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Type of Grant: |
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o Incentive Stock Option1 |
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o Nonstatutory Stock Option |
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Exercise Schedule: |
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o Same as Vesting Schedule |
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o Early Exercise Permitted |
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Vesting Schedule: |
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25% of the shares vest upon the completion of one year of Continuous Service (as defined in
Section 2(h) the Plan) following the Vesting Commencement Date.
2.083% of the shares vest for each full month of Continuous Service
completed by the Optionholder thereafter over the next three years. |
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Payment: |
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By one or a combination of the following items (described in the Stock Option Agreement): |
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By cash or check |
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Pursuant to a Regulation T Program if the Shares are publicly traded |
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By delivery of already-owned shares if the Shares are publicly traded |
Additional Terms/Acknowledgements: The undersigned Optionholder acknowledges receipt of, and
understands and agrees to, this Grant Notice, the Stock Option Agreement and the Plan.
Optionholder further acknowledges that as of the Date of Grant, this Grant Notice, the Stock Option
Agreement and the Plan set forth the entire understanding between Optionholder and the Company
regarding the acquisition of stock in the Company and supersede all prior oral and written
agreements on that subject.
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Decru, Inc. |
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Optionholder: |
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By: |
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Signature
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Signature |
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Title: |
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Date: |
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Date: |
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Attachments: Stock Option Agreement, 2001 Equity Incentive Plan and Notice of Exercise
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1 |
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If this is an incentive stock option, it
(plus your other outstanding incentive stock options) cannot be first
exercisable for more than $100,000 in any calendar year. Any excess
over $100,000 is a nonstatutory stock option. |
Attachment I
2001 Equity Incentive Plan
STOCK OPTION AGREEMENT
Pursuant to your Stock Option Grant Notice (Grant Notice) and this Stock Option Agreement,
Decru, Inc. (the Company) has granted you an option under its 2001 Equity Incentive Plan
(the Plan) to purchase the number of shares of the Companys Common Stock indicated in your Grant
Notice at the exercise price indicated in your Grant Notice. Defined terms not explicitly defined
in this Stock Option Agreement but defined in the Plan shall have the same definitions as in the
Plan.
The details of your option are as follows:
1. Vesting. Subject to the limitations contained herein, your option will vest as
provided in your Grant Notice, provided that vesting will cease upon the termination of your
Continuous Service.
2. Number of Shares and Exercise Price. The number of shares of Common Stock subject
to your option and your exercise price per share referenced in your Grant Notice may be adjusted
from time to time for Capitalization Adjustments, as provided in the Plan.
3. Exercise prior to Vesting (Early Exercise). If permitted in your Grant Notice
(i.e., the Exercise Schedule indicates that Early Exercise of your option is permitted) and
subject to the provisions of your option, you may elect at any time that is both (i) during the
period of your Continuous Service and (ii) during the term of your option, to exercise all or part
of your option, including the nonvested portion of your option; provided, however, that:
(a) a partial exercise of your option shall be deemed to cover first vested shares of Common
Stock and then the earliest vesting installment of unvested shares of Common Stock;
(b) any shares of Common Stock so purchased from installments that have not vested as of the
date of exercise shall be subject to the purchase option in favor of the Company as described in
the Companys form of Early Exercise Stock Purchase Agreement;
(c) you shall enter into the Companys form of Early Exercise Stock Purchase Agreement with a
vesting schedule that will result in the same vesting as if no early exercise had occurred; and
(d) if your option is an incentive stock option, then, as provided in the Plan, to the extent
that the aggregate Fair Market Value (determined at the time of grant) of the shares of Common
Stock with respect to which your option plus all other incentive stock options you hold are
exercisable for the first time by you during any calendar year (under all plans of the Company and
its Affiliates) exceeds one hundred thousand dollars ($100,000), your option(s) or portions thereof
that exceed such limit (according to the order in which they were granted) shall be treated as
nonstatutory stock options.
4. Method of Payment. Payment of the exercise price is due in full upon exercise of
all or any part of your option. You may elect to make payment of the exercise price in cash or by
check or in any other manner permitted by your Grant Notice, which may include one or more of the
following:
(a) In the Companys sole discretion at the time your option is exercised and provided that at
the time of exercise the Common Stock is publicly traded and quoted regularly in The Wall Street
Journal, pursuant to a program developed under Regulation T as promulgated by the Federal Reserve
Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check)
by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to
the Company from the sales proceeds.
(b) Provided that at the time of exercise the Common Stock is publicly traded and quoted
regularly in The Wall Street Journal, by delivery of already-owned shares of Common Stock either
that you have held for the period required to avoid a charge to the Companys reported earnings
(generally six months) or that you did not acquire, directly or indirectly from the Company, that
are owned free and clear of any liens, claims, encumbrances or security interests, and that are
valued at Fair Market Value on the date of exercise. Delivery for these purposes, in the sole
discretion of the Company at the time you exercise your option, shall include delivery to the
Company of your attestation of ownership of such shares of Common Stock in a form approved by the
Company. Notwithstanding the foregoing, you may not exercise your option by tender to the Company
of Common Stock to the extent such tender would violate the provisions of any law, regulation or
agreement restricting the redemption of the Companys stock.
5. Whole Shares. You may exercise your option only for whole shares of Common Stock.
6. Securities Law Compliance. Notwithstanding anything to the contrary contained
herein, you may not exercise your option unless the shares of Common Stock issuable upon such
exercise are then registered under the Securities Act or, if such shares of Common Stock are not
then so registered, the Company has determined that such exercise and issuance would be exempt from
the registration requirements of the Securities Act. The exercise of your option must also comply
with other applicable laws and regulations governing your option, and you may not exercise your
option if the Company determines that such exercise would not be in material compliance with such
laws and regulations.
7. Term. You may not exercise your option before the commencement of its term or
after its term expires. The term of your option commences on the Date of Grant and expires upon
the earliest of the following:
(a) three (3) months after the termination of your Continuous Service for any reason other
than your Disability or death, provided that if during any part of such three-month period your
option is not exercisable solely because of the condition set forth in the preceding paragraph
relating to Securities Law Compliance, your option shall not expire until the earlier of the
Expiration Date or until it shall have been exercisable for an aggregate period of three (3) months
after the termination of your Continuous Service;
(b) twelve (12) months after the termination of your Continuous Service due to your
Disability;
(c) eighteen (18) months after your death if you die either during your Continuous Service or
within three (3) months after your Continuous Service terminates;
(d) the Expiration Date indicated in your Grant Notice; or
(e) the day before the tenth (10th) anniversary of the Date of Grant.
If your option is an incentive stock option, note that, to obtain the federal income tax
advantages associated with an incentive stock option, the Code requires that at all times
beginning on the date of grant of your option and ending on the day three (3) months before the
date of your options exercise, you must be an employee of the Company or an Affiliate, except in
the event of your death or Disability. The Company has provided for extended exercisability of
your option under certain circumstances for your benefit but cannot guarantee that your option will
necessarily be treated as an incentive stock option if you continue to provide services to the
Company or an Affiliate as a Consultant or Director after your employment terminates or if you
otherwise exercise your option more than three (3) months after the date your employment
terminates.
8. Exercise.
(a) You may exercise the vested portion of your option (and the unvested portion of your
option if your Grant Notice so permits) during its term by delivering a Notice of Exercise (in a
form designated by the Company) together with the exercise price to the Secretary of the Company,
or to such other person as the Company may designate, during regular business hours, together with
such additional documents as the Company may then require.
(b) By exercising your option you agree that, as a condition to any exercise of your option,
the Company may require you to enter into an arrangement providing for the payment by you to the
Company of any tax withholding obligation of the Company arising by reason of (1) the exercise of
your option, (2) the lapse of any substantial risk of forfeiture to which the shares of Common
Stock are subject at the time of exercise, or (3) the disposition of shares of Common Stock
acquired upon such exercise.
(c) If your option is an incentive stock option, by exercising your option you agree that you
will notify the Company in writing within fifteen (15) days after the date of any disposition of
any of the shares of the Common Stock issued upon exercise of your option that occurs within two
(2) years after the date of your option grant or within one (1) year after such shares of Common
Stock are transferred upon exercise of your option.
(d) By exercising your option you agree that the Company (or a representative of the
underwriter(s)) may, in connection with the first underwritten registration of the offering of any
securities of the Company under the Securities Act, require that you not sell, dispose of,
transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging
or similar transaction with the same economic effect as a sale, any shares of Common Stock or other
securities of the Company held by you, for a period of time specified
by the underwriter(s)
(not to exceed one hundred eighty (180) days) following the effective date of the registration
statement of the Company filed under the Securities Act. You further agree to execute and deliver
such other agreements as may be reasonably requested by the Company and/or the underwriter(s) that
are consistent with the foregoing or that are necessary to give further effect thereto. In order
to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect
to your shares of Common Stock until the end of such period. The underwriters of the Companys
stock are intended third party beneficiaries of this Section 8(d) and shall have the right, power
and authority to enforce the provisions hereof as though they were a party hereto.
9. Transferability. Your option is not transferable, except by will or by the laws
of descent and distribution, and is exercisable during your life only by you. Notwithstanding the
foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you
may designate a third party who, in the event of your death, shall thereafter be entitled to
exercise your option.
10. Right of First Refusal. Shares of Common Stock that you acquire upon exercise of
your option are subject to any right of first refusal that may be described in the Companys bylaws
in effect at such time the Company elects to exercise its right. The Companys right of first
refusal shall expire on the Listing Date.
11. Right of Repurchase. To the extent provided in the Companys bylaws as amended
from time to time, the Company shall have the right to repurchase all or any part of the shares of
Common Stock you acquire pursuant to the exercise of your option.
12. Option not a Service Contract. Your option is not an employment or service
contract, and nothing in your option shall be deemed to create in any way whatsoever any obligation
on your part to continue in the employ of the Company or an Affiliate, or of the Company or an
Affiliate to continue your employment. In addition, nothing in your option shall obligate the
Company or an Affiliate, their respective shareholders, Boards of Directors, Officers or Employees
to continue any relationship that you might have as a Director or Consultant for the Company or an
Affiliate.
13. Withholding Obligations.
(a) At the time you exercise your option, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any other amounts
payable to you, and otherwise agree to make adequate provision for (including by means of a
cashless exercise pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if
any, which arise in connection with your option.
(b) Upon your request and subject to approval by the Company, in its sole discretion, and
compliance with any applicable conditions or restrictions of law, the Company may withhold from
fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a
number of whole shares of Common Stock having a Fair Market Value, determined by
the Company as of the date of exercise, not in excess of the minimum amount of tax required to
be withheld by law. If the date of determination of any tax withholding obligation is deferred to
a date later than the date of exercise of your option, share withholding pursuant to the preceding
sentence shall not be permitted unless you make a proper and timely election under Section 83(b) of
the Code, covering the aggregate number of shares of Common Stock acquired upon such exercise with
respect to which such determination is otherwise deferred, to accelerate the determination of such
tax withholding obligation to the date of exercise of your option. Notwithstanding the filing of
such election, shares of Common Stock shall be withheld solely from fully vested shares of Common
Stock determined as of the date of exercise of your option that are otherwise issuable to you upon
such exercise. Any adverse consequences to you arising in connection with such share withholding
procedure shall be your sole responsibility.
(c) You may not exercise your option unless the tax withholding obligations of the Company
and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when
desired even though your option is vested, and the Company shall have no obligation to issue a
certificate for such shares of Common Stock or release such shares of Common Stock from any escrow
provided for herein.
14. Notices. Any notices provided for in your option or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by
mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company.
15. Governing Plan Document. Your option is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of your option, and is further subject to all
interpretations, amendments, rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of your option
and those of the Plan, the provisions of the Plan shall control.
Attachment II
Decru, inc.
2001 Equity Incentive Plan
Termination Date: September 5, 2011
1. Purposes.
(a) Eligible Stock Award Recipients. The persons eligible to receive Stock Awards are the
Employees, Directors and Consultants of the Company and its Affiliates.
(b) Available Stock Awards. The purpose of the Plan is to provide a means by which eligible
recipients of Stock Awards may be given an opportunity to benefit from increases in value of the
Common Stock through the granting of the following Stock Awards: (i) Incentive Stock Options, (ii)
Nonstatutory Stock Options, (iii) stock bonuses and (iv) rights to acquire restricted stock.
(c) General Purpose. The Company, by means of the Plan, seeks to retain the services of the
group of persons eligible to receive Stock Awards, to secure and retain the services of new members
of this group and to provide incentives for such persons to exert maximum efforts for the success
of the Company and its Affiliates.
2. Definitions.
(a) Affiliate means any parent corporation or subsidiary corporation of the Company, whether
now or hereafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of
the Code.
(b) Board means the Board of Directors of the Company.
(c) Code means the Internal Revenue Code of 1986, as amended.
(d) Committee means a committee of one or more members of the Board appointed by the Board
in accordance with subsection 3(c).
(e) Common Stock means the common stock of the Company.
(f) Company means Decru, Inc., a Delaware corporation.
(g) Consultant means any person, including an advisor, (i) engaged by the Company or an
Affiliate to render consulting or advisory services and who is compensated for such services or
(ii) who is a member of the Board of Directors of an Affiliate. However, the term Consultant
shall not include either Directors who are not compensated by the Company
for their services as Directors or Directors who are merely paid a directors fee by the
Company for their services as Directors.
(h) Continuous Service means that the Participants service with the Company or an
Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. The
Participants Continuous Service shall not be deemed to have terminated merely because of a change
in the capacity in which the Participant renders service to the Company or an Affiliate as an
Employee, Consultant or Director or a change in the entity for which the Participant renders such
service, provided that there is no interruption or termination of the Participants Continuous
Service. For example, a change in status from an Employee of the Company to a Consultant of an
Affiliate or a Director will not constitute an interruption of Continuous Service. The Board or
the chief executive officer of the Company, in that partys sole discretion, may determine whether
Continuous Service shall be considered interrupted in the case of any leave of absence approved by
that party, including sick leave, military leave or any other personal leave.
(i) Covered Employee means the chief executive officer and the four (4) other highest
compensated officers of the Company for whom total compensation is required to be reported to
stockholders under the Exchange Act, as determined for purposes of Section 162(m) of the Code.
(j) Director means a member of the Board of Directors of the Company.
(k) Disability means (i) before the Listing Date, the inability of a person, in the opinion
of a qualified physician acceptable to the Company, to perform the major duties of that persons
position with the Company or an Affiliate of the Company because of the sickness or injury of the
person and (ii) after the Listing Date, the permanent and total disability of a person within the
meaning of Section 22(e)(3) of the Code.
(l) Employee means any person employed by the Company or an Affiliate. Mere service as a
Director or payment of a directors fee by the Company or an Affiliate shall not be sufficient to
constitute employment by the Company or an Affiliate.
(m) Exchange Act means the Securities Exchange Act of 1934, as amended.
(n) Fair Market Value means, as of any date, the value of the Common Stock determined as
follows:
(i) If the Common Stock is listed on any established stock exchange or traded on the Nasdaq
National Market or the Nasdaq SmallCap Market, the Fair Market Value of a share of Common Stock
shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or market (or the exchange or market with the greatest volume of trading in
the Common Stock) on the last market trading day prior to the day of determination, as reported in
The Wall Street Journal or such other source as the Board deems reliable.
(ii) In the absence of such markets for the Common Stock, the Fair Market Value shall be
determined in good faith by the Board.
(iii) Prior to the Listing Date, the value of the Common Stock shall be determined in a manner
consistent with Section 260.140.50 of Title 10 of the California Code of Regulations.
(o) Incentive Stock Option means an Option intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code and the regulations promulgated thereunder.
(p) Listing Date means the first date upon which any security of the Company is listed (or
approved for listing) upon notice of issuance on any securities exchange or designated (or approved
for designation) upon notice of issuance as a national market security on an interdealer quotation
system if such securities exchange or interdealer quotation system has been certified in accordance
with the provisions of Section 25100(o) of the California Corporate Securities Law of 1968.
(q) Non-Employee Director means a Director who either (i) is not a current Employee or
Officer of the Company or its parent or a subsidiary, does not receive compensation (directly or
indirectly) from the Company or its parent or a subsidiary for services rendered as a consultant or
in any capacity other than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
(Regulation S-K)), does not possess an interest in any other transaction as to which disclosure
would be required under Item 404(a) of Regulation S-K and is not engaged in a business relationship
as to which disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is otherwise
considered a non-employee director for purposes of Rule 16b-3.
(r) Nonstatutory Stock Option means an Option not intended to qualify as an Incentive Stock
Option.
(s) Officer means a person who is an officer of the Company within the meaning of Section 16
of the Exchange Act and the rules and regulations promulgated thereunder.
(t) Option means an Incentive Stock Option or a Nonstatutory Stock Option granted pursuant
to the Plan.
(u) Option Agreement means a written agreement between the Company and an Optionholder
evidencing the terms and conditions of an individual Option grant. Each Option Agreement shall be
subject to the terms and conditions of the Plan.
(v) Optionholder means a person to whom an Option is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Option.
(w) Outside Director means a Director who either (i) is not a current employee of the
Company or an affiliated corporation (within the meaning of Treasury Regulations promulgated
under Section 162(m) of the Code), is not a former employee of the Company or an affiliated
corporation receiving compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an affiliated corporation at any time and is
not currently receiving direct or indirect remuneration from the Company or an
affiliated corporation for services in any capacity other than as a Director or (ii) is
otherwise considered an outside director for purposes of Section 162(m) of the Code.
(x) Participant means a person to whom a Stock Award is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Stock Award.
(y) Plan means this Decru, Inc. 2001 Equity Incentive Plan.
(z) Rule 16b-3 means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule
16b-3, as in effect from time to time.
(aa) Securities Act means the Securities Act of 1933, as amended.
(bb) Stock Award means any right granted under the Plan, including an Option, a stock bonus
and a right to acquire restricted stock.
(cc) Stock Award Agreement means a written agreement between the Company and a holder of a
Stock Award evidencing the terms and conditions of an individual Stock Award grant. Each Stock
Award Agreement shall be subject to the terms and conditions of the Plan.
(dd) Ten Percent Stockholder means a person who owns (or is deemed to own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of any of its Affiliates.
3. Administration.
(a) Administration by Board. The Board shall administer the Plan unless and until the Board
delegates administration to a Committee, as provided in subsection 3(c). Any interpretation of the
Plan by the Board and any decision by the Board under the Plan shall be final and binding on all
persons.
(b) Powers of Board. The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:
(i) To determine from time to time which of the persons eligible under the Plan shall be
granted Stock Awards; when and how each Stock Award shall be granted; what type or combination of
types of Stock Award shall be granted; the provisions of each Stock Award granted (which need not
be identical), including the time or times when a person shall be permitted to receive Common Stock
pursuant to a Stock Award; and the number of shares of Common Stock with respect to which a Stock
Award shall be granted to each such person.
(ii) To construe and interpret the Plan and Stock Awards granted under it, and to establish,
amend and revoke rules and regulations for its administration. The Board, in the exercise of this
power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award
Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.
(iii) To amend the Plan or a Stock Award as provided in Section 12.
(iv) Generally, to exercise such powers and to perform such acts as the Board deems necessary
or expedient to promote the best interests of the Company which are not in conflict with the
provisions of the Plan.
(c) Delegation to Committee.
(i) General. The Board may delegate administration of the Plan to a Committee or Committees
of one (1) or more members of the Board, and the term Committee shall apply to any person or
persons to whom such authority has been delegated. If administration is delegated to a Committee,
the Committee shall have, in connection with the administration of the Plan, the powers theretofore
possessed by the Board, including the power to delegate to a subcommittee any of the administrative
powers the Committee is authorized to exercise (and references in this Plan to the Board shall
thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board.
The Board may abolish the Committee at any time and revest in the Board the administration of the
Plan.
(ii) Committee Composition when Common Stock is Publicly Traded. At such time as the Common
Stock is publicly traded, in the discretion of the Board, a Committee may consist solely of two or
more Outside Directors, in accordance with Section 162(m) of the Code, and/or solely of two or more
Non-Employee Directors, in accordance with Rule 16b-3. Within the scope of such authority, the
Board or the Committee may (1) delegate to a committee of one or more members of the Board who are
not Outside Directors the authority to grant Stock Awards to eligible persons who are either (a)
not then Covered Employees and are not expected to be Covered Employees at the time of recognition
of income resulting from such Stock Award or (b) not persons with respect to whom the Company
wishes to comply with Section 162(m) of the Code and/or (2) delegate to a committee of one or more
members of the Board who are not Non-Employee Directors the authority to grant Stock Awards to
eligible persons who are not then subject to Section 16 of the Exchange Act.
4. Shares Subject to the Plan.
(a) Share Reserve. Subject to the provisions of Section 11 relating to adjustments upon
changes in Common Stock, the Common Stock that may be issued pursuant to Stock Awards shall not
exceed in the aggregate four million four hundred sixty-six thousand one hundred fifty-seven
(4,466,157) shares of Common Stock.
(b) Reversion of Shares to the Share Reserve. If any Stock Award shall for any reason expire
or otherwise terminate, in whole or in part, without having been exercised in full, the shares of
Common Stock not acquired under such Stock Award shall revert to and again become available for
issuance under the Plan.
(c) Source of Shares. The shares of Common Stock subject to the Plan may be unissued shares
or reacquired shares, bought on the market or otherwise.
(d) Shares Reserve Limitation. Prior to the Listing Date and to the extent then required by
Section 260.140.45 of Title 10 of the California Code of Regulations, the total number of shares of
Common Stock issuable upon exercise of all outstanding Options and the
total number of shares of Common Stock provided for under any stock bonus or similar plan to
the Company shall not exceed the applicable percentage as calculated in accordance with the
conditions and exclusions of Section 260.140.45 of Title 10 of the California Code of Regulations,
based on the shares of Common Stock of the Company that are outstanding at the time the calculation
is made.
5. Eligibility.
(a) Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to
Employees. Stock Awards other than Incentive Stock Options may be granted to Employees, Directors
and Consultants.
(b) Ten Percent Stockholders.
(i) A Ten Percent Stockholder shall not be granted an Incentive Stock Option unless the
exercise price of such Option is at least one hundred ten percent (110%) of the Fair Market Value
of the Common Stock at the date of grant and the Option is not exercisable after the expiration of
five (5) years from the date of grant.
(ii) Prior to the Listing Date, a Ten Percent Stockholder shall not be granted a Nonstatutory
Stock Option unless the exercise price of such Option is at least (i) one hundred ten percent
(110%) of the Fair Market Value of the Common Stock at the date of grant or (ii) such lower
percentage of the Fair Market Value of the Common Stock at the date of grant as is permitted by
Section 260.140.41 of Title 10 of the California Code of Regulations at the time of the grant of
the Option.
(iii) Prior to the Listing Date, a Ten Percent Shareholder shall not be granted a restricted
stock award unless the purchase price of the restricted stock is at least (i) one hundred percent
(100%) of the Fair Market Value of the Common Stock at the date of grant or (ii) such lower
percentage of the Fair Market Value of the Common Stock at the date of grant as is permitted by
Section 260.140.41 of Title 10 of the California Code of Regulations at the time of the grant of
the Option.
(c) Section 162(m) Limitation. Subject to the provisions of Section 11 relating to
adjustments upon changes in the shares of Common Stock, no Employee shall be eligible to be granted
Options covering more than two million two hundred fifty thousand (2,250,000) shares of Common
Stock during any calendar year. This subsection 5(c) shall not apply prior to the Listing Date
and, following the Listing Date, this subsection 5(c) shall not apply until (i) the earliest of:
(1) the first material modification of the Plan (including any increase in the number of shares of
Common Stock reserved for issuance under the Plan in accordance with Section 4); (2) the issuance
of all of the shares of Common Stock reserved for issuance under the Plan; (3) the expiration of
the Plan; or (4) the first meeting of stockholders at which Directors are to be elected that occurs
after the close of the third calendar year following the calendar year in which occurred the first
registration of an equity security under Section 12 of the Exchange Act; or (ii) such other date
required by Section 162(m) of the Code and the rules and regulations promulgated thereunder.
(d) Consultants.
(i) Prior to the Listing Date, a Consultant shall not be eligible for the grant of a Stock
Award if, at the time of grant, either the offer or the sale of the Companys securities to such
Consultant is not exempt under Rule 701 of the Securities Act (Rule 701) because of the nature of
the services that the Consultant is providing to the Company, or because the Consultant is not a
natural person, or as otherwise provided by Rule 701, unless the Company determines that such grant
need not comply with the requirements of Rule 701 and will satisfy another exemption under the
Securities Act as well as comply with the securities laws of all other relevant jurisdictions.
(ii) From and after the Listing Date, a Consultant shall not be eligible for the grant of a
Stock Award if, at the time of grant, a Form S-8 Registration Statement under the Securities Act
(Form S-8) is not available to register either the offer or the sale of the Companys securities
to such Consultant because of the nature of the services that the Consultant is providing to the
Company, or because the Consultant is not a natural person, or as otherwise provided by the rules
governing the use of Form S-8, unless the Company determines both (i) that such grant (A) shall be
registered in another manner under the Securities Act (e.g., on a Form S-3 Registration Statement)
or (B) does not require registration under the Securities Act in order to comply with the
requirements of the Securities Act, if applicable, and (ii) that such grant complies with the
securities laws of all other relevant jurisdictions.
(iii) Rule 701 and Form S-8 generally are available to consultants and advisors only if (i)
they are natural persons; (ii) they provide bona fide services to the issuer, its parents, its
majority-owned subsidiaries or majority-owned subsidiaries of the issuers parent; and (iii) the
services are not in connection with the offer or sale of securities in a capital-raising
transaction, and do not directly or indirectly promote or maintain a market for the issuers
securities.
6. Option Provisions.
Each Option shall be in such form and shall contain such terms and conditions as the Board
shall deem appropriate. All Options shall be separately designated Incentive Stock Options or
Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate
certificate or certificates will be issued for shares of Common Stock purchased on exercise of each
type of Option. The provisions of separate Options need not be identical, but each Option shall
include (through incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:
(a) Term. Subject to the provisions of subsection 5(b) regarding Ten Percent Shareholders, no
Option granted prior to the Listing Date shall be exercisable after the expiration of ten (10)
years from the date it was granted, and no Incentive Stock Option granted on or after the Listing
Date shall be exercisable after the expiration of ten (10) years from the date it was granted.
(b) Exercise Price of an Incentive Stock Option. Subject to the provisions of subsection 5(b)
regarding Ten Percent Stockholders, the exercise price of each Incentive Stock
Option shall be not less than one hundred percent (100%) of the Fair Market Value of the
Common Stock subject to the Option on the date the Option is granted. Notwithstanding the
foregoing, an Incentive Stock Option may be granted with an exercise price lower than that set
forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution
for another option in a manner satisfying the provisions of Section 424(a) of the Code.
(c) Exercise Price of a Nonstatutory Stock Option. Subject to the provisions of subsection
5(b) regarding Ten Percent Shareholders, the exercise price of each Nonstatutory Stock Option
granted prior to the Listing Date shall be not less than eighty-five percent (85%) of the Fair
Market Value of the Common Stock subject to the Option on the date the Option is granted. The
exercise price of each Nonstatutory Stock Option granted on or after the Listing Date shall be not
less than eighty-five percent (85%) of the Fair Market Value of the Common Stock subject to the
Option on the date the Option is granted. Notwithstanding the foregoing, a Nonstatutory Stock
Option may be granted with an exercise price lower than that set forth in the preceding sentence if
such Option is granted pursuant to an assumption or substitution for another option in a manner
satisfying the provisions of Section 424(a) of the Code.
(d) Consideration. The purchase price of Common Stock acquired pursuant to an Option shall be
paid, to the extent permitted by applicable statutes and regulations, either (i) in cash at the
time the Option is exercised or (ii) at the discretion of the Board at the time of the grant of the
Option (or subsequently in the case of a Nonstatutory Stock Option) (1) by delivery to the Company
of other Common Stock, (2) according to a deferred payment or other similar arrangement with the
Optionholder or (3) in any other form of legal consideration that may be acceptable to the Board.
Unless otherwise specifically provided in the Option, the purchase price of Common Stock acquired
pursuant to an Option that is paid by delivery to the Company of other Common Stock acquired,
directly or indirectly from the Company, shall be paid only by shares of the Common Stock of the
Company that have been held for more than six (6) months (or such longer or shorter period of time
required to avoid a charge to earnings for financial accounting purposes). At any time that the
Company is incorporated in Delaware, payment of the Common Stocks par value, as defined in the
Delaware General Corporation Law, shall not be made by deferred payment.
In the case of any deferred payment arrangement, interest shall be compounded at least
annually and shall be charged at the market rate of interest necessary to avoid a charge to
earnings for financial accounting purposes.
(e) Transferability of an Incentive Stock Option. An Incentive Stock Option shall not be
transferable except by will or by the laws of descent and distribution and shall be exercisable
during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing,
the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the Optionholder, shall
thereafter be entitled to exercise the Option.
(f) Transferability of a Nonstatutory Stock Option. A Nonstatutory Stock Option granted prior
to the Listing Date shall not be transferable except by will or by the laws of descent and
distribution and, to the extent provided in the Option Agreement, to such further extent as
permitted by Section 260.140.41(d) of Title 10 of the California Code of Regulations at the
time of the grant of the Option, and shall be exercisable during the lifetime of the Optionholder
only by the Optionholder. A Nonstatutory Stock Option granted on or after the Listing Date shall
be transferable to the extent provided in the Option Agreement. If the Nonstatutory Stock Option
does not provide for transferability, then the Nonstatutory Stock Option shall not be transferable
except by will or by the laws of descent and distribution and shall be exercisable during the
lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the
Optionholder may, by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the Optionholder, shall
thereafter be entitled to exercise the Option.
(g) Vesting Generally. The total number of shares of Common Stock subject to an Option may,
but need not, vest and therefore become exercisable in periodic installments that may, but need
not, be equal. The Option may be subject to such other terms and conditions on the time or times
when it may be exercised (which may be based on performance or other criteria) as the Board may
deem appropriate. The vesting provisions of individual Options may vary. The provisions of this
subsection 6(g) are subject to any Option provisions governing the minimum number of shares of
Common Stock as to which an Option may be exercised.
(h) Minimum Vesting Prior to the Listing Date. Notwithstanding the foregoing subsection 6(g),
to the extent that the following restrictions on vesting are required by Section 260.140.41(f) of
Title 10 of the California Code of Regulations at the time of the grant of the Option, then:
(i) Options granted prior to the Listing Date to an Employee who is not an Officer, Director
or Consultant shall provide for vesting of the total number of shares of Common Stock at a rate of
at least twenty percent (20%) per year over five (5) years from the date the Option was granted,
subject to reasonable conditions such as continued employment; and
(ii) Options granted prior to the Listing Date to Officers, Directors or Consultants may be
made fully exercisable, subject to reasonable conditions such as continued employment, at any time
or during any period established by the Company.
(i) Termination of Continuous Service. In the event an Optionholders Continuous Service
terminates (other than upon the Optionholders death or Disability), the Optionholder may exercise
his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of
the date of termination) but only within such period of time ending on the earlier of (i) the date
three (3) months following the termination of the Optionholders Continuous Service (or such longer
or shorter period specified in the Option Agreement, which period shall not be less than thirty
(30) days for Options granted prior to the Listing Date unless such termination is for cause), or
(ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after
termination, the Optionholder does not exercise his or her Option within the time specified in the
Option Agreement, the Option shall terminate.
(j) Extension of Termination Date. An Optionholders Option Agreement may also provide that
if the exercise of the Option following the termination of the Optionholders
Continuous Service (other than upon the Optionholders death or Disability) would be
prohibited at any time solely because the issuance of shares of Common Stock would violate the
registration requirements under the Securities Act, then the Option shall terminate on the earlier
of (i) the expiration of the term of the Option set forth in subsection 6(a) or (ii) the expiration
of a period of three (3) months after the termination of the Optionholders Continuous Service
during which the exercise of the Option would not be in violation of such registration
requirements.
(k) Disability of Optionholder. In the event that an Optionholders Continuous Service
terminates as a result of the Optionholders Disability, the Optionholder may exercise his or her
Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of
termination), but only within such period of time ending on the earlier of (i) the date twelve (12)
months following such termination (or such longer or shorter period specified in the Option
Agreement, which period shall not be less than six (6) months for Options granted prior to the
Listing Date) or (ii) the expiration of the term of the Option as set forth in the Option
Agreement. If, after termination, the Optionholder does not exercise his or her Option within the
time specified herein, the Option shall terminate.
(l) Death of Optionholder. In the event (i) an Optionholders Continuous Service terminates
as a result of the Optionholders death or (ii) the Optionholder dies within the period (if any)
specified in the Option Agreement after the termination of the Optionholders Continuous Service
for a reason other than death, then the Option may be exercised (to the extent the Optionholder was
entitled to exercise such Option as of the date of death) by the Optionholders estate, by a person
who acquired the right to exercise the Option by bequest or inheritance or by a person designated
to exercise the option upon the Optionholders death pursuant to subsection 6(e) or 6(f), but only
within the period ending on the earlier of (1) the date eighteen (18) months following the date of
death (or such longer or shorter period specified in the Option Agreement, which period shall not
be less than six (6) months for Options granted prior to the Listing Date) or (2) the expiration of
the term of such Option as set forth in the Option Agreement. If, after death, the Option is not
exercised within the time specified herein, the Option shall terminate.
(m) Early Exercise. The Option may, but need not, include a provision whereby the
Optionholder may elect at any time before the Optionholders Continuous Service terminates to
exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior
to the full vesting of the Option. Subject to the Repurchase Limitation in subsection 10(h), any
unvested shares of Common Stock so purchased may be subject to a repurchase option in favor of the
Company or to any other restriction the Board determines to be appropriate.
(n) Right of Repurchase. Subject to the Repurchase Limitation in subsection 10(h), the
Option may, but need not, include a provision whereby the Company may elect, prior to the Listing
Date, to repurchase all or any part of the vested shares of Common Stock acquired by the
Optionholder pursuant to the exercise of the Option.
(o) Right of First Refusal. The Option may, but need not, include a provision whereby the
Company may elect, prior to the Listing Date, to exercise a right of first refusal
following receipt of notice from the Optionholder of the intent to transfer all or any part of
the shares of Common Stock received upon the exercise of the Option. Except as expressly provided
in this subsection 6(o), such right of first refusal shall otherwise comply with any applicable
provisions of the Bylaws of the Company.
7. Provisions of Stock Awards other than Options.
(a) Stock Bonus Awards. Each stock bonus agreement shall be in such form and shall contain
such terms and conditions as the Board shall deem appropriate. The terms and conditions of stock
bonus agreements may change from time to time, and the terms and conditions of separate stock bonus
agreements need not be identical, but each stock bonus agreement shall include (through
incorporation of provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:
(i) Consideration. A stock bonus may be awarded in consideration for past services actually
rendered to the Company or an Affiliate for its benefit.
(ii) Vesting. Subject to the Repurchase Limitation in subsection 10(h), shares of Common
Stock awarded under the stock bonus agreement may, but need not, be subject to a share repurchase
option in favor of the Company in accordance with a vesting schedule to be determined by the Board.
(iii) Termination of Participants Continuous Service. Subject to the Repurchase Limitation
in subsection 10(h), in the event a Participants Continuous Service terminates, the Company may
reacquire any or all of the shares of Common Stock held by the Participant which have not vested as
of the date of termination under the terms of the stock bonus agreement.
(iv) Transferability. For a stock bonus award made before the Listing Date, rights to acquire
shares of Common Stock under the stock bonus agreement shall not be transferable except by will or
by the laws of descent and distribution and shall be exercisable during the lifetime of the
Participant only by the Participant. For a stock bonus award made on or after the Listing Date,
rights to acquire shares of Common Stock under the stock bonus agreement shall be transferable by
the Participant only upon such terms and conditions as are set forth in the stock bonus agreement,
as the Board shall determine in its discretion, so long as Common Stock awarded under the stock
bonus agreement remains subject to the terms of the stock bonus agreement.
(b) Restricted Stock Awards. Each restricted stock purchase agreement shall be in such form
and shall contain such terms and conditions as the Board shall deem appropriate. The terms and
conditions of the restricted stock purchase agreements may change from time to time, and the terms
and conditions of separate restricted stock purchase agreements need not be identical, but each
restricted stock purchase agreement shall include (through incorporation of provisions hereof by
reference in the agreement or otherwise) the substance of each of the following provisions:
(i) Purchase Price. Subject to the provisions of subsection 5(b) regarding Ten Percent
Shareholders, the purchase price under each restricted stock purchase agreement
shall be such amount as the Board shall determine and designate in such restricted stock
purchase agreement. For restricted stock awards made prior to the Listing Date, the purchase price
shall not be less than eighty-five percent (85%) of the Common Stocks Fair Market Value on the
date such award is made or at the time the purchase is consummated. For restricted stock awards
made on or after the Listing Date, the purchase price shall not be less than eighty-five percent
(85%) of the Common Stocks Fair Market Value on the date such award is made or at the time the
purchase is consummated.
(ii) Consideration. The purchase price of Common Stock acquired pursuant to the restricted
stock purchase agreement shall be paid either: (i) in cash at the time of purchase; (ii) at the
discretion of the Board, according to a deferred payment or other similar arrangement with the
Participant; or (iii) in any other form of legal consideration that may be acceptable to the Board
in its discretion; provided, however, that at any time that the Company is incorporated in
Delaware, then payment of the Common Stocks par value, as defined in the Delaware General
Corporation Law, shall not be made by deferred payment.
(iii) Vesting. Subject to the Repurchase Limitation in subsection 10(h), shares of Common
Stock acquired under the restricted stock purchase agreement may, but need not, be subject to a
share repurchase option in favor of the Company in accordance with a vesting schedule to be
determined by the Board.
(iv) Termination of Participants Continuous Service. Subject to the Repurchase Limitation
in subsection 10(h), in the event a Participants Continuous Service terminates, the Company may
repurchase or otherwise reacquire any or all of the shares of Common Stock held by the Participant
which have not vested as of the date of termination under the terms of the restricted stock
purchase agreement.
(v) Transferability. For a restricted stock award made before the Listing Date, rights to
acquire shares of Common Stock under the restricted stock purchase agreement shall not be
transferable except by will or by the laws of descent and distribution and shall be exercisable
during the lifetime of the Participant only by the Participant. For a restricted stock award made
on or after the Listing Date, rights to acquire shares of Common Stock under the restricted stock
purchase agreement shall be transferable by the Participant only upon such terms and conditions as
are set forth in the restricted stock purchase agreement, as the Board shall determine in its
discretion, so long as Common Stock awarded under the restricted stock purchase agreement remains
subject to the terms of the restricted stock purchase agreement.
8. Covenants of the Company.
(a) Availability of Shares. During the terms of the Stock Awards, the Company shall keep
available at all times the number of shares of Common Stock required to satisfy such Stock Awards.
(b) Securities Law Compliance. The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be required to grant
Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards;
provided, however, that this undertaking shall not require the Company to
register under the Securities Act the Plan, any Stock Award or any Common Stock issued or
issuable pursuant to any such Stock Award. If, after reasonable efforts, the Company is unable to
obtain from any such regulatory commission or agency the authority which counsel for the Company
deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company shall
be relieved from any liability for failure to issue and sell Common Stock upon exercise of such
Stock Awards unless and until such authority is obtained.
9. Use of Proceeds from Stock.
Proceeds from the sale of Common Stock pursuant to Stock Awards shall constitute general funds
of the Company.
10. Miscellaneous.
(a) Acceleration of Exercisability and Vesting. The Board shall have the power to accelerate
the time at which a Stock Award may first be exercised or the time during which a Stock Award or
any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Stock
Award stating the time at which it may first be exercised or the time during which it will vest.
(b) Stockholder Rights. No Participant shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares of Common Stock subject to such Stock Award
unless and until such Participant has satisfied all requirements for exercise of the Stock Award
pursuant to its terms.
(c) No Employment or other Service Rights. Nothing in the Plan or any instrument executed or
Stock Award granted pursuant thereto shall confer upon any Participant any right to continue to
serve the Company or an Affiliate in the capacity in effect at the time the Stock Award was granted
or shall affect the right of the Company or an Affiliate to terminate (i) the employment of an
Employee with or without notice and with or without cause, (ii) the service of a Consultant
pursuant to the terms of such Consultants agreement with the Company or an Affiliate or (iii) the
service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable
provisions of the corporate law of the state in which the Company or the Affiliate is incorporated,
as the case may be.
(d) Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market
Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by any Optionholder during any calendar year (under all
plans of the Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), the
Options or portions thereof which exceed such limit (according to the order in which they were
granted) shall be treated as Nonstatutory Stock Options.
(e) Investment Assurances. The Company may require a Participant, as a condition of
exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances
satisfactory to the Company as to the Participants knowledge and experience in financial and
business matters and/or to employ a purchaser representative reasonably satisfactory to the Company
who is knowledgeable and experienced in financial and business matters and that he or she is
capable of evaluating, alone or together with the purchaser representative, the merits and
risks of exercising the Stock Award; and (ii) to give written assurances satisfactory to the
Company stating that the Participant is acquiring Common Stock subject to the Stock Award for the
Participants own account and not with any present intention of selling or otherwise distributing
the Common Stock. The foregoing requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (1) the issuance of the shares of Common Stock upon the
exercise or acquisition of Common Stock under the Stock Award has been registered under a then
currently effective registration statement under the Securities Act or (2) as to any particular
requirement, a determination is made by counsel for the Company that such requirement need not be
met in the circumstances under the then applicable securities laws. The Company may, upon advice
of counsel to the Company, place legends on stock certificates issued under the Plan as such
counsel deems necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of the Common Stock.
(f) Withholding Obligations. To the extent provided by the terms of a Stock Award Agreement,
the Participant may satisfy any federal, state or local tax withholding obligation relating to the
exercise or acquisition of Common Stock under a Stock Award by any of the following means (in
addition to the Companys right to withhold from any compensation paid to the Participant by the
Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the
Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to
the participant as a result of the exercise or acquisition of Common Stock under the Stock Award;
or (iii) delivering to the Company owned and unencumbered shares of Common Stock.
(g) Information Obligation. Prior to the Listing Date, to the extent required by Section
260.140.46 of Title 10 of the California Code of Regulations, the Company shall deliver financial
statements to Participants at least annually. This subsection 10(g) shall not apply to key
Employees whose duties in connection with the Company assure them access to equivalent information.
(h) Repurchase Limitation. The terms of any repurchase option shall be specified in the Stock
Award and may be either at Fair Market Value at the time of repurchase or at not less than the
original purchase price. To the extent required by Section 260.140.41 and Section 260.140.42 of
Title 10 of the California Code of Regulations at the time a Stock Award is made, any repurchase
option contained in a Stock Award granted prior to the Listing Date to a person who is not an
Officer, Director or Consultant shall be upon the terms described below:
(i) Fair Market Value. If the repurchase option gives the Company the right to repurchase the
shares of Common Stock upon termination of employment at not less than the Fair Market Value of the
shares of Common Stock to be purchased on the date of termination of Continuous Service, then (i)
the right to repurchase shall be exercised for cash or cancellation of purchase money indebtedness
for the shares of Common Stock within ninety (90) days of termination of Continuous Service (or in
the case of shares of Common Stock issued upon exercise of Stock Awards after such date of
termination, within ninety (90) days after the date of the exercise) or such longer period as may
be agreed to by the Company and the Participant (for example, for purposes of satisfying the
requirements of Section 1202(c)(3) of the Code regarding
qualified small business stock) and (ii) the right terminates when the shares of Common
Stock become publicly traded.
(ii) Original Purchase Price. If the repurchase option gives the Company the right to
repurchase the shares of Common Stock upon termination of Continuous Service at the original
purchase price, then (i) the right to repurchase at the original purchase price shall lapse at the
rate of at least twenty percent (20%) of the shares of Common Stock per year over five (5) years
from the date the Stock Award is granted (without respect to the date the Stock Award was exercised
or became exercisable) and (ii) the right to repurchase shall be exercised for cash or cancellation
of purchase money indebtedness for the shares of Common Stock within ninety (90) days of
termination of Continuous Service (or in the case of shares of Common Stock issued upon exercise of
Options after such date of termination, within ninety (90) days after the date of the exercise) or
such longer period as may be agreed to by the Company and the Participant (for example, for
purposes of satisfying the requirements of Section 1202(c)(3) of the Code regarding qualified
small business stock).
11. Adjustments upon Changes in Stock.
(a) Capitalization Adjustments. If any change is made in the Common Stock subject to the
Plan, or subject to any Stock Award, without the receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend
in property other than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan will be appropriately adjusted in the class(es) and maximum
number of securities subject to the Plan pursuant to subsection 4(a) and the maximum number of
securities subject to award to any person pursuant to subsection 5(c), and the outstanding Stock
Awards will be appropriately adjusted in the class(es) and number of securities and price per share
of Common Stock subject to such outstanding Stock Awards. The Board shall make such adjustments,
and its determination shall be final, binding and conclusive. (The conversion of any convertible
securities of the Company shall not be treated as a transaction without receipt of consideration
by the Company.)
(b) Dissolution or Liquidation. In the event of a dissolution or liquidation of the Company,
then all outstanding Stock Awards shall terminate immediately prior to such event.
(c) Asset Sale, Merger, Consolidation or Reverse Merger. In the event of (i) a sale, lease or
other disposition of all or substantially all of the assets of the Company, (ii) a merger or
consolidation in which the Company is not the surviving corporation or (iii) a reverse merger in
which the Company is the surviving corporation but the shares of Common Stock outstanding
immediately preceding the merger are converted by virtue of the merger into other property, whether
in the form of securities, cash or otherwise (individually, a Corporate Transaction), then any
surviving corporation or acquiring corporation shall assume any Stock Awards outstanding under the
Plan or shall substitute similar stock awards (including an award to acquire the same consideration
paid to the shareholders in the Corporate Transaction) for those outstanding under the Plan. In
the event any surviving corporation or acquiring corporation refuses to assume such Stock Awards or
to substitute similar stock awards for those outstanding
under the Plan, the Stock Awards shall terminate if not exercised (if applicable) at or prior
to the Corporate Transaction.
12. Amendment of the Plan and Stock Awards.
(a) Amendment of Plan. The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 11 relating to adjustments upon changes in Common Stock, no
amendment shall be effective unless approved by the stockholders of the Company to the extent
stockholder approval is necessary to satisfy the requirements of Section 422 of the Code, Rule
16b-3 or any Nasdaq or securities exchange listing requirements.
(b) Stockholder Approval. The Board may, in its sole discretion, submit any other amendment
to the Plan for stockholder approval, including, but not limited to, amendments to the Plan
intended to satisfy the requirements of Section 162(m) of the Code and the regulations thereunder
regarding the exclusion of performance-based compensation from the limit on corporate deductibility
of compensation paid to certain executive officers.
(c) Contemplated Amendments. It is expressly contemplated that the Board may amend the Plan
in any respect the Board deems necessary or advisable to provide eligible Employees with the
maximum benefits provided or to be provided under the provisions of the Code and the regulations
promulgated thereunder relating to Incentive Stock Options and/or to bring the Plan and/or
Incentive Stock Options granted under it into compliance therewith.
(d) No Impairment of Rights. Rights under any Stock Award granted before amendment of the
Plan shall not be impaired by any amendment of the Plan unless (i) the Company requests the consent
of the Participant and (ii) the Participant consents in writing.
(e) Amendment of Stock Awards. The Board at any time, and from time to time, may amend the
terms of any one or more Stock Awards; provided, however, that the rights under any Stock Award
shall not be impaired by any such amendment unless (i) the Company requests the consent of the
Participant and (ii) the Participant consents in writing.
13. Termination or Suspension of the Plan.
(a) Plan Term. The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate on the day before the tenth (10th) anniversary of the date the
Plan is adopted by the Board or approved by the stockholders of the Company, whichever is earlier.
No Stock Awards may be granted under the Plan while the Plan is suspended or after it is
terminated.
(b) No Impairment of Rights. Suspension or termination of the Plan shall not impair rights
and obligations under any Stock Award granted while the Plan is in effect except with the written
consent of the Participant.
14. Effective Date of Plan.
The Plan shall become effective as determined by the Board, but no Stock Award shall be
exercised (or, in the case of a stock bonus, shall be granted) unless and until the Plan has been
approved by the stockholders of the Company, which approval shall be within twelve (12) months
before or after the date the Plan is adopted by the Board.
15. Choice of Law.
The law of the State of California shall govern all questions concerning the construction,
validity and interpretation of this Plan, without regard to such states conflict of laws rules.
Attachment III
NOTICE OF EXERCISE
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Decru, Inc. |
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275 Shoreline Boulevard, Suite 450 |
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Redwood City, CA 94065
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Date of Exercise: ___ |
Ladies and Gentlemen:
This constitutes notice to Decru, Inc. (the Company) under my stock option that I elect to
purchase the number of shares for the price set forth below.
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Type of option (check one): |
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Nonstatutory ¨ |
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Stock option dated: |
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Number of shares as |
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to which option is |
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exercised: |
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Certificates to be |
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issued in name of: |
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Total exercise price:
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$ |
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Cash payment delivered |
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herewith:
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By this exercise, I agree (i) to provide such additional documents as you may require pursuant
to the terms of the 2001 Equity Incentive Plan, (ii) to provide for the payment by me to you (in
the manner designated by you) of your withholding obligation, if any, relating to the exercise of
this option, and (iii) if this exercise relates to an incentive stock option, to notify you in
writing within fifteen (15) days after the date of any disposition of any of the shares of Common
Stock issued upon exercise of this option that occurs within two (2) years after the date of grant
of this option or within one (1) year after such shares of Common Stock are issued upon exercise of
this option.
I hereby make the following certifications and representations with respect to the number of
shares of Common Stock of the Company listed above (the Shares), which are being acquired by me
for my own account upon exercise of the Option as set forth above:
I acknowledge that the Shares have not been registered under the Securities Act of 1933, as
amended (the Securities Act), and are deemed to constitute restricted securities under Rule 701
and control securities under Rule 144 promulgated under the Securities Act. I warrant and
represent to the Company that I have no present intention of distributing or selling said Shares,
except as permitted under the Securities Act and any applicable state securities laws.
I further acknowledge that I will not be able to resell the Shares for at least ninety days
(90) after the stock of the Company becomes publicly traded (i.e., subject to the reporting
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934) under Rule 701 and that
more restrictive conditions apply to affiliates of the Company under Rule 144.
I further acknowledge that all certificates representing any of the Shares subject to the
provisions of the Option shall have endorsed thereon appropriate legends reflecting the foregoing
limitations, as well as any legends reflecting restrictions pursuant to the Companys Certificate
of Incorporation, Bylaws and/or applicable securities laws.
I further agree that, if required by the Company (or a representative of the underwriters) in
connection with the first underwritten registration of the offering of any securities of the
Company under the Securities Act, I will not sell or otherwise transfer or dispose of any shares,
short sale or grant any option for the purchase of, or enter into any hedging or similar
transaction with the same economic effect as a sale, any shares of Common Stock or other securities
of the Company during such period (not to exceed one hundred eighty (180) days) following the
effective date of the registration statement of the Company filed under the Securities Act as may
be requested by the Company or the representative of the underwriters. I further agree to execute
and deliver such other agreements as may be reasonably requested by the Company and or the
representatives of underwriter(s) that are consistent with the foregoing or that are necessary to
give further effect thereto. I further agree that the Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions until the end of such
period.
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Very truly yours, |
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exv99w3
Exhibit 99.3
Decru, Inc.
Early Exercise Stock Purchase Agreement
under the 2001 Equity Incentive Plan
This Agreement is made by and between Decru, Inc., a Delaware corporation (the
Company), and (Purchaser).
Witnesseth:
Whereas, Purchaser holds a stock option dated to purchase shares of
common stock (Common Stock) of the Company (the Option) pursuant to the Companys 2001 Equity
Incentive Plan (the Plan); and
Whereas, the Option consists of a Stock Option Grant Notice and a Stock Option
Agreement; and
Whereas, Purchaser desires to exercise the Option on the terms and conditions
contained herein; and
Whereas, Purchaser wishes to take advantage of the early exercise provision of the
Purchasers Option and therefore to enter into this Agreement;
Now, therefore, it is agreed between the parties as follows:
1. Incorporation of Plan and Option by Reference. This Agreement is subject to all
of the terms and conditions as set forth in the Plan and the Option. If there is a conflict
between the terms of this Agreement and/or the Option and the terms of the Plan, the terms of the
Plan shall control. If there is a conflict between the terms of this Agreement and the terms of
the Option, the terms of the Option shall control. Defined terms not explicitly defined in this
Agreement but defined in the Plan shall have the same definitions as in the Plan. Defined terms
not explicitly defined in this Agreement or the Plan but defined in the Option shall have the same
definitions as in the Option.
2. Purchase and Sale of Common Stock.
(a) Agreement to purchase and sell Common Stock. Purchaser hereby agrees to purchase
from the Company, and the Company hereby agrees to sell to Purchaser, shares of the Common Stock of
the Company in accordance with the Notice of Exercise duly executed by Purchaser and attached
hereto as Exhibit A.
1.
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Value of ______ shares of Common Stock1 |
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Total Exercise Price |
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(b) Closing. The closing hereunder, including payment for and delivery of the Common
Stock, shall occur at the offices of the Company immediately following the execution of this
Agreement, or at such other time and place as the parties may mutually agree; provided, however,
that if stockholder approval of the Plan is required before the Option may be exercised, then the
Option may not be exercised, and the closing shall be delayed, until such stockholder approval is
obtained. If such stockholder approval is not obtained within the time limit specified in the
Plan, then this Agreement shall be null and void.
3. Unvested Share Repurchase Option
(a) Repurchase Option. In the event Purchasers Continuous Service terminates, then the
Company shall have an irrevocable option (the Repurchase Option) for a period of ninety (90) days
after said termination (or in the case of shares issued upon exercise of the Option after such date
of termination, within ninety (90) days after the date of the exercise), or such longer period as
may be agreed to by the Company and the Purchaser, to repurchase from Purchaser or Purchasers
personal representative, as the case may be, those shares that Purchaser received pursuant to the
exercise of the Option that have not as yet vested as of such termination date in accordance with
the Vesting Schedule indicated on Purchasers Stock Option Grant Notice (the Unvested Shares).
(b) Shares Repurchasable at Purchasers Original Exercise Price. The Company may
repurchase all or any of the Unvested Shares at a price (Option Price) equal to the Purchasers
Exercise Price for such shares as indicated on Purchasers Stock Option Grant Notice.
4. Exercise of Repurchase Option. The Repurchase Option shall be exercised by
written notice signed by an Officer of the Company and delivered or mailed as provided herein.
Such notice shall identify the number of shares of Common Stock to be purchased and shall notify
Purchaser of the time, place and date for settlement of such purchase, which shall be scheduled by
the Company within the term of the Repurchase Option set forth above. The Company shall be
entitled to pay for any shares of Common Stock purchased pursuant to its Repurchase Option at the
Companys option in cash or by offset against any indebtedness owing to the Company by Purchaser
(including without limitation any Note given in payment for the Common Stock), or by a combination
of both. Upon delivery of such notice and payment of the purchase price in any of the ways
described above, the Company shall become the legal and beneficial owner of the Common Stock being
repurchased and all rights and interest therein or
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Shares must meet the public trading
requirements set forth in the option. Shares must be valued in accordance with
the terms of the option being exercised, must have been owned for the minimum
period required in the option and must be owned free and clear of any liens,
claims, encumbrances or security interest. Certificates must be endorsed or
accompanied by an executed stock assignment. |
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related thereto, and the Company shall have the right to transfer to its own name the Common
Stock being repurchased by the Company, without further action by Purchaser.
5. Capitalization Adjustments to Common Stock. In the event of a Capitalization
Adjustment affecting the Companys outstanding Common Stock as a class as designated in the Plan,
then any and all new, substituted or additional securities or other property to which Purchaser is
entitled by reason of Purchasers ownership of Common Stock shall be immediately subject to the
Repurchase Option and be included in the word Common Stock for all purposes of the Repurchase
Option with the same force and effect as the shares of the Common Stock presently subject to the
Repurchase Option, but only to the extent the Common Stock is, at the time, covered by such
Repurchase Option. While the total Option Price shall remain the same after each such event, the
Option Price per share of Common Stock upon exercise of the Repurchase Option shall be
appropriately adjusted.
6. Corporate Transactions. In the event of a Corporate Transaction described in
subsection 11(c) of the Plan, then the Repurchase Option may be assigned by the Company to the
successor of the Company (or such successors parent company), if any, in connection with such
Corporate Transaction. To the extent the Repurchase Option remains in effect following such
Corporate Transaction, it shall apply to the new capital stock or other property received in
exchange for the Common Stock in consummation of the Corporate Transaction, but only to the extent
the Common Stock was at the time covered by such right. Appropriate adjustments shall be made to
the price per share payable upon exercise of the Repurchase Option to reflect the Corporate
Transaction upon the Companys capital structure; provided, however, that the aggregate Option
Price shall remain the same.
7. Escrow of Unvested Common Stock. As security for Purchasers faithful performance
of the terms of this Agreement and to insure the availability for delivery of Purchasers Common
Stock upon exercise of the Repurchase Option herein provided for, Purchaser agrees, at the closing
hereunder, to deliver to and deposit with the Secretary of the Company or the Secretarys designee
(Escrow Agent), as Escrow Agent in this transaction, three (3) stock assignments duly endorsed
(with date and number of shares blank) in the form attached hereto as Exhibit B, together with a
certificate or certificates evidencing all of the Common Stock subject to the Repurchase Option;
said documents are to be held by the Escrow Agent and delivered by said Escrow Agent pursuant to
the Joint Escrow Instructions of the Company and Purchaser set forth in Exhibit C, attached hereto
and incorporated by this reference, which instructions shall also be delivered to the Escrow Agent
at the closing hereunder.
8. Rights of Purchaser. Subject to the provisions of the Option, Purchaser shall
exercise all rights and privileges of a stockholder of the Company with respect to the shares
deposited in escrow. Purchaser shall be deemed to be the holder of the shares for purposes of
receiving any dividends that may be paid with respect to such shares and for purposes of exercising
any voting rights relating to such shares, even if some or all of such shares have not yet vested
and been released from the Companys Repurchase Option.
3.
9. Limitations on Transfer. In addition to any other limitation on transfer created
by applicable securities laws, Purchaser shall not sell, assign, hypothecate, donate, encumber or
otherwise dispose of any interest in the Common Stock while the Common Stock is subject to the
Repurchase Option. After any Common Stock has been released from the Repurchase Option, Purchaser
shall not sell, assign, hypothecate, donate, encumber or otherwise dispose of any interest in the
Common Stock except in compliance with the provisions herein and applicable securities laws.
Furthermore, the Common Stock shall be subject to any right of first refusal in favor of the
Company or its assignees that may be contained in the Companys Bylaws.
10. Restrictive Legends. All certificates representing the Common Stock shall have
endorsed thereon legends in substantially the following forms (in addition to any other legend
which may be required by other agreements between the parties hereto):
(a) THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN OPTION SET FORTH IN AN
AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR SUCH HOLDERS PREDECESSOR IN INTEREST,
A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THIS COMPANY. ANY TRANSFER OR ATTEMPTED
TRANSFER OF ANY SHARES SUBJECT TO SUCH OPTION IS VOID WITHOUT THE PRIOR EXPRESS WRITTEN CONSENT OF
THE COMPANY.
(b) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
(c) THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF FIRST REFUSAL OPTION
IN FAVOR OF THE CORPORATION AND/OR ITS ASSIGNEE(S), AS PROVIDED IN THE BYLAWS OF THE COMPANY.
(d) Any legend required by appropriate blue sky officials.
11. Investment Representations. In connection with the purchase of the Common Stock,
Purchaser represents to the Company the following:
(a) Purchaser is aware of the Companys business affairs and financial condition and has
acquired sufficient information about the Company to reach an informed and knowledgeable decision
to acquire the Common Stock. Purchaser is acquiring the Common Stock for investment for
Purchasers own account only and not with a view to, or for resale in connection with, any
distribution thereof within the meaning of the Securities Act.
4.
(b) Purchaser understands that the Common Stock has not been registered under the Securities
Act by reason of a specific exemption therefrom, which exemption depends upon, among other things,
the bona fide nature of Purchasers investment intent as expressed herein.
(c) Purchaser further acknowledges and understands that the Common Stock must be held
indefinitely unless the Common Stock is subsequently registered under the Securities Act or an
exemption from such registration is available. Purchaser further acknowledges and understands that
the Company is under no obligation to register the Common Stock. Purchaser understands that the
certificate evidencing the Common Stock will be imprinted with a legend that prohibits the transfer
of the Common Stock unless the Common Stock is registered or such registration is not required in
the opinion of counsel for the Company.
(d) Purchaser is familiar with the provisions of Rules 144 and 701, under the Securities Act,
as in effect from time to time, which, in substance, permit limited public resale of restricted
securities acquired, directly or indirectly, from the issuer thereof (or from an affiliate of such
issuer), in a non-public offering subject to the satisfaction of certain conditions. Rule 701
provides that if the issuer qualifies under Rule 701 at the time of issuance of the securities,
such issuance will be exempt from registration under the Securities Act. In the event the Company
becomes subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act
of 1934, the securities exempt under Rule 701 may be sold by Purchaser ninety (90) days thereafter,
subject to the satisfaction of certain of the conditions specified by Rule 144 and the market
stand-off provision described in Purchasers Stock Option Agreement.
(e) In the event that the sale of the Common Stock does not qualify under Rule 701 at the time
of purchase, then the Common Stock may be resold by Purchaser in certain limited circumstances
subject to the provisions of Rule 144, which requires, among other things: (i) the availability of
certain public information about the Company and (ii) the resale occurring following the required
holding period under Rule 144 after the Purchaser has purchased, and made full payment of (within
the meaning of Rule 144), the securities to be sold.
(f) Purchaser further understands that at the time Purchaser wishes to sell the Common Stock
there may be no public market upon which to make such a sale, and that, even if such a public
market then exists, the Company may not be satisfying the current public current information
requirements of Rule 144 or 701, and that, in such event, Purchaser would be precluded from selling
the Common Stock under Rule 144 or 701 even if the minimum holding period requirement had been
satisfied.
(g) Purchaser further warrants and represents that Purchaser has either (i) preexisting
personal or business relationships, with the Company or any of its officers, directors or
controlling persons, or (ii) the capacity to protect his own interests in connection with the
purchase of the Common Stock by virtue of the business or financial expertise of the Purchaser or
of professional advisors to Purchaser who are unaffiliated with and who are not compensated by the
Company or any of its affiliates, directly or indirectly.
5.
12. Section 83(b) Election. Purchaser understands that Section 83(a) of
the Code, taxes as ordinary income the difference between the amount paid for the Common Stock and
the fair market value of the Common Stock as of the date any restrictions on the Common Stock
lapse. In this context, restriction includes the right of the Company to buy back the Common
Stock pursuant to the Repurchase Option set forth above. Purchaser understands that Purchaser may
elect to be taxed at the time the Common Stock is purchased, rather than when and as the Repurchase
Option expires, by filing an election under Section 83(b) (an 83(b) Election) of the Code with
the Internal Revenue Service within thirty (30) days from the date of purchase, a form of which is
attached as Exhibit D. Even if the fair market value of the Common Stock at the time of the
execution of this Agreement equals the amount paid for the Common Stock, the 83(b) Election must be
made to avoid income under Section 83(a) in the future. Purchaser understands that failure to file
such an 83(b) Election in a timely manner may result in adverse tax consequences for Purchaser.
Purchaser further understands that Purchaser must file an additional copy of such 83(b) Election
with his or her federal income tax return for the calendar year in which the date of this Agreement
falls. Purchaser acknowledges that the foregoing is only a summary of the effect of United States
federal income taxation with respect to purchase of the Common Stock hereunder, and does not
purport to be complete. Purchaser further acknowledges that the Company has directed Purchaser to
seek independent advice regarding the applicable provisions of the Code, the income tax laws of any
municipality, state or foreign country in which Purchaser may reside, and the tax consequences of
Purchasers death. Purchaser assumes all responsibility for filing an 83(b) Election and paying
all taxes resulting from such election or the lapse of the restrictions on the Common Stock.
13. Refusal to Transfer. The Company shall not be required (a) to transfer on its
books any shares of Common Stock of the Company which shall have been transferred in violation of
any of the provisions set forth in this Agreement or (b) to treat as owner of such shares or to
accord the right to vote as such owner or to pay dividends to any transferee to whom such shares
shall have been so transferred.
14. No Employment Rights. This Agreement is not an employment contract and nothing
in this Agreement shall affect in any manner whatsoever the right or power of the Company (or a
parent or subsidiary of the Company) to terminate Purchasers employment for any reason at any
time, with or without cause and with or without notice.
15. Miscellaneous.
(a) Notices. All notices required or permitted hereunder shall be in writing and shall be
deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by
confirmed telex or facsimile if sent during normal business hours of the recipient, and if not
during normal business hours of the recipient, then on the next business day, (c) five (5) calendar
days after having been sent by registered or certified mail, return receipt requested, postage
prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All communications shall be
sent to the other party hereto at such partys address hereinafter set
6.
forth on the signature page hereof, or at such other address as such party may designate by
ten (10) days advance written notice to the other party hereto.
(b) Successors and Assigns. This Agreement shall inure to the benefit of the successors and
assigns of the Company and, subject to the restrictions on transfer herein set forth, be binding
upon Purchaser, Purchasers successors, and assigns. The Company may assign the Repurchase Option
hereunder at any time or from time to time, in whole or in part.
(c) Attorneys Fees; Specific Performance. Purchaser shall reimburse the Company for all
costs incurred by the Company in enforcing the performance of, or protecting its rights under, any
part of this Agreement, including reasonable costs of investigation and attorneys fees. It is the
intention of the parties that the Company, upon exercise of the Repurchase Option and payment of
the Option Price, pursuant to the terms of this Agreement, shall be entitled to receive the Common
Stock, in specie, in order to have such Common Stock available for future issuance without dilution
of the holdings of other stockholders. Furthermore, it is expressly agreed between the parties
that money damages are inadequate to compensate the Company for the Common Stock and that the
Company shall, upon proper exercise of the Repurchase Option, be entitled to specific enforcement
of its rights to purchase and receive said Common Stock.
(d) Governing Law; Venue. This Agreement shall be governed by and construed in accordance
with the laws of the State of California. The parties agree that any action brought by either
party to interpret or enforce any provision of this Agreement shall be brought in, and each party
agrees to, and does hereby, submit to the jurisdiction and venue of, the appropriate state or
federal court for the district encompassing the Companys principal place of business.
(e) Further Execution. The parties agree to take all such further action(s) as may reasonably
be necessary to carry out and consummate this Agreement as soon as practicable, and to take
whatever steps may be necessary to obtain any governmental approval in connection with or otherwise
qualify the issuance of the securities that are the subject of this Agreement.
(f) Independent Counsel. Purchaser acknowledges that this Agreement has been prepared on
behalf of the Company by Cooley Godward llp, counsel to the Company and that Cooley
Godward llp does not represent, and is not acting on behalf of, Purchaser. Purchaser has
been provided with an opportunity to consult with Purchasers own counsel with respect to this
Agreement.
(g) Entire Agreement; Amendment. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes and merges all prior agreements or
understandings, whether written or oral. This Agreement may not be amended, modified or revoked,
in whole or in part, except by an agreement in writing signed by each of the parties hereto.
7.
(h) Severability. If one or more provisions of this Agreement are held to be unenforceable
under applicable law, the parties agree to renegotiate such provision in good faith. In the event
that the parties cannot reach a mutually agreeable and enforceable replacement for such provision,
then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement
shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement
shall be enforceable in accordance with its terms.
(i) Counterparts. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original and all of which together shall constitute one instrument.
In witness whereof, the parties hereto have executed this Agreement as of
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Decru, Inc.
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By: |
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Dan Avida |
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Title:
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Chief Executive Officer |
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Address:
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275 Shoreline Boulevard |
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Redwood City, California |
Attachments:
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Exhibit A
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Notice of Exercise |
Exhibit B
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Assignment Separate from Certificate |
Exhibit C
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Joint Escrow Instructions |
Exhibit D
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83(b) Election Form |
8.
Exhibit A
NOTICE OF EXERCISE
NOTICE OF EXERCISE
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Decru, Inc. |
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275 Shoreline Boulevard |
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Redwood City, CA 94065
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Date of Exercise: |
Ladies and Gentlemen:
This constitutes notice to Decru, Inc. (the Company) under my stock option that I elect to
purchase the number of shares for the price set forth below.
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Type of option (check one): |
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Incentive |
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Nonstatutory |
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Stock option dated: |
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Number of shares as
to which option is
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Certificates to be
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Total exercise price: |
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$ |
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Cash payment delivered
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By this exercise, I agree (i) to provide such additional documents as you may require pursuant
to the terms of the 2001 Equity Incentive Plan, (ii) to provide for the payment by me to you (in
the manner designated by you) of your withholding obligation, if any, relating to the exercise of
this option, and (iii) if this exercise relates to an incentive stock option, to notify you in
writing within fifteen (15) days after the date of any disposition of any of the shares of Common
Stock issued upon exercise of this option that occurs within two (2) years after the date of grant
of this option or within one (1) year after such shares of Common Stock are issued upon exercise of
this option.
I hereby make the following certifications and representations with respect to the number of
shares of Common Stock of the Company listed above (the Shares), which are being acquired by me
for my own account upon exercise of the Option as set forth above:
I acknowledge that the Shares have not been registered under the Securities Act of 1933, as
amended (the Securities Act), and are deemed to constitute restricted securities under Rule 701
and control securities under Rule 144 promulgated under the Securities Act. I warrant and
represent to the Company that I have no present intention of distributing or selling said Shares,
except as permitted under the Securities Act and any applicable state securities laws.
I further acknowledge that I will not be able to resell the Shares for at least ninety days
(90) after the stock of the Company becomes publicly traded (i.e., subject to the reporting
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934) under Rule 701 and that
more restrictive conditions apply to affiliates of the Company under Rule 144.
I further acknowledge that all certificates representing any of the Shares subject to the
provisions of the Option shall have endorsed thereon appropriate legends reflecting the foregoing
limitations, as well as any legends reflecting restrictions pursuant to the Companys Certificate
of Incorporation, Bylaws and/or applicable securities laws.
I further agree that, if required by the Company (or a representative of the underwriters) in
connection with the first underwritten registration of the offering of any securities of the
Company under the Securities Act, I will not sell or otherwise transfer or dispose of any shares,
short sale or grant any option for the purchase of, or enter into any hedging or similar
transaction with the same economic effect as a sale, any shares of Common Stock or other securities
of the Company during such period (not to exceed one hundred eighty (180) days) following the
effective date of the registration statement of the Company filed under the Securities Act as may
be requested by the Company or the representative of the underwriters. I further agree to execute
and deliver such other agreements as may be reasonably requested by the Company and or the
representatives of underwriter(s) that are consistent with the foregoing or that are necessary to
give further effect thereto. I further agree that the Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions until the end of such
period.
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Very truly yours, |
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Print Name: |
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Exhibit B
STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE
STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE
For Value Received, hereby sells, assigns and transfers unto
Decru, Inc., a Delaware corporation (the Company), pursuant to the Repurchase Option under that
certain Early Exercise Stock Purchase Agreement, dated by and between the
undersigned and the Company (the Agreement), ( ) shares of Common
Stock of the Company standing in the undersigneds name on the books of the Company represented by
Certificate No(s). and does hereby irrevocably constitute and appoint the Companys
Secretary attorney to transfer said Common Stock on the books of the Company with full power of
substitution in the premises. This Assignment may be used only in accordance with and subject to
the terms and conditions of the Agreement, in connection with the repurchase of shares of Common
Stock issued to the undersigned pursuant to the Agreement, and only to the extent that such shares
remain subject to the Companys Repurchase Option under the Agreement.
Dated:
(Instruction: Please do not fill in any blanks other than the Signature line and the
Print Name line.)
STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE
For Value Received, hereby sells, assigns and transfers unto
Decru, Inc., a Delaware corporation (the Company), pursuant to the Repurchase Option under that
certain Early Exercise Stock Purchase Agreement, dated by and between the
undersigned and the Company (the Agreement), ( ) shares of Common
Stock of the Company standing in the undersigneds name on the books of the Company represented by
Certificate No(s). and does hereby irrevocably constitute and appoint the Companys
Secretary attorney to transfer said Common Stock on the books of the Company with full power of
substitution in the premises. This Assignment may be used only in accordance with and subject to
the terms and conditions of the Agreement, in connection with the repurchase of shares of Common
Stock issued to the undersigned pursuant to the Agreement, and only to the extent that such shares
remain subject to the Companys Repurchase Option under the Agreement.
Dated:
(Instruction: Please do not fill in any blanks other than the Signature line and the
Print Name line.)
STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE
For Value Received, hereby sells, assigns and transfers unto
Decru, Inc., a Delaware corporation (the Company), pursuant to the Repurchase Option under that
certain Early Exercise Stock Purchase Agreement, dated by and between the
undersigned and the Company (the Agreement), ( ) shares of Common
Stock of the Company standing in the undersigneds name on the books of the Company represented by
Certificate No(s). and does hereby irrevocably constitute and appoint the Companys
Secretary attorney to transfer said Common Stock on the books of the Company with full power of
substitution in the premises. This Assignment may be used only in accordance with and subject to
the terms and conditions of the Agreement, in connection with the repurchase of shares of Common
Stock issued to the undersigned pursuant to the Agreement, and only to the extent that such shares
remain subject to the Companys Repurchase Option under the Agreement.
Dated:
(Instruction: Please do not fill in any blanks other than the Signature line and the
Print Name line.)
Exhibit C
JOINT ESCROW INSTRUCTIONS
JOINT ESCROW INSTRUCTIONS
Mark P. Tanoury
Cooley Godward LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306
Dear Sir or Madam:
As Escrow Agent for both Decru, Inc., a Delaware corporation (Company), and the
undersigned purchaser of Common Stock of the Company (Purchaser), you are hereby authorized and
directed to hold the documents delivered to you pursuant to the terms of that certain Early
Exercise Stock Purchase Agreement (Agreement), dated to which a copy of these
Joint Escrow Instructions is attached as Exhibit C, in accordance with the following instructions:
1. In the event the Company or an assignee shall elect to exercise the Repurchase Option set
forth in the Agreement, the Company or its assignee will give to Purchaser and you a written notice
specifying the number of shares of Common Stock to be purchased, the purchase price, and the time
for a closing hereunder at the principal office of the Company. Purchaser and the Company hereby
irrevocably authorize and direct you to close the transaction contemplated by such notice in
accordance with the terms of said notice.
2. At the closing you are directed (a) to date any stock assignments necessary for the
transfer in question, (b) to fill in the number of shares being transferred, and (c) to deliver
same, together with the certificate evidencing the shares of Common Stock to be transferred, to the
Company against the simultaneous delivery to you of the purchase price (which may include suitable
acknowledgment of cancellation of indebtedness) of the number of shares of Common Stock being
purchased pursuant to the exercise of the Repurchase Option.
3. Purchaser irrevocably authorizes the Company to deposit with you any certificates
evidencing shares of Common Stock to be held by you hereunder and any additions and substitutions
to said shares as specified in the Agreement. Purchaser does hereby irrevocably constitute and
appoint you as the Purchasers attorney-in-fact and agent for the term of this escrow to execute
with respect to such securities and other property all documents of assignment and/or transfer and
all stock certificates necessary or appropriate to make all securities negotiable and complete any
transaction herein contemplated.
4. This escrow shall terminate upon expiration or exercise in full of the Repurchase Option,
whichever occurs first.
5. If at the time of termination of this escrow you should have in your possession any
documents, securities, or other property belonging to Purchaser, you shall deliver all of same to
Purchaser and shall be discharged of all further obligations hereunder; provided, however, that
1.
if at the time of termination of this escrow you are advised by the Company that the property
subject to this escrow is the subject of a pledge or other security agreement, you shall deliver
all such property to the pledgeholder or other person designated by the Company.
6. Except as otherwise provided in these Joint Escrow Instructions, your duties hereunder may
be altered, amended, modified or revoked only by a writing signed by all of the parties hereto.
7. You shall be obligated only for the performance of such duties as are specifically set
forth herein and may rely and shall be protected in relying or refraining from acting on any
instrument reasonably believed by you to be genuine and to have been signed or presented by the
proper party or parties or their assignees. You shall not be personally liable for any act you may
do or omit to do hereunder as Escrow Agent or as attorney-in-fact for Purchaser while acting in
good faith and any act done or omitted by you pursuant to the advice of your own attorneys shall be
conclusive evidence of such good faith.
8. You are hereby expressly authorized to disregard any and all warnings given by any of the
parties hereto or by any other person or corporation, excepting only orders or process of courts of
law, and are hereby expressly authorized to comply with and obey orders, judgments or decrees of
any court. In case you obey or comply with any such order, judgment or decree of any court, you
shall not be liable to any of the parties hereto or to any other person, firm or corporation by
reason of such compliance, notwithstanding any such order, judgment or decree being subsequently
reversed, modified, annulled, set aside, vacated or found to have been entered without
jurisdiction.
9. You shall not be liable in any respect on account of the identity, authority or rights of
the parties executing or delivering or purporting to execute or deliver the Agreement or any
documents or papers deposited or called for hereunder.
10. You shall not be liable for the outlawing of any rights under any statute of limitations
with respect to these Joint Escrow Instructions or any documents deposited with you.
11. Your responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be
Secretary of the Company or if you shall resign by written notice to each party. In the event of
any such termination, the Company may appoint any officer or assistant officer of the Company as
successor Escrow Agent and Purchaser hereby confirms the appointment of such successor or
successors as the Purchasers attorney-in-fact and agent to the full extent of your appointment.
12. If you reasonably require other or further instruments in connection with these Joint
Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in
furnishing such instruments.
13. It is understood and agreed that should any dispute arise with respect to the delivery
and/or ownership or right of possession of the securities, you are authorized and directed to
retain in your possession without liability to anyone all or any part of said securities
2.
until such dispute shall have been settled either by mutual written agreement of the parties
concerned or by a final order, decree or judgment of a court of competent jurisdiction after the
time for appeal has expired and no appeal has been perfected, but you shall be under no duty
whatsoever to institute or defend any such proceedings.
14. Any notice required or permitted hereunder shall be given in writing and shall be deemed
effectively given upon personal delivery, including delivery by express courier or five days after
deposit in the United States Post Office, by registered or certified mail with postage and fees
prepaid, addressed to each of the other parties hereunto entitled at the following addresses, or at
such other addresses as a party may designate by ten days advance written notice to each of the
other parties hereto:
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Company:
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Decru, Inc. |
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275 Shoreline Boulevard, Suite 450
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Redwood City, CA 94065 |
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Purchaser: |
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Escrow Agent:
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Mark P. Tanoury |
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Cooley Godward LLP |
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Five Palo Alto Square |
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3000 El Camino Real |
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Palo Alto, CA 94306 |
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15. By signing these Joint Escrow Instructions you become a party hereto only for the purpose
of said Joint Escrow Instructions; you do not become a party to the Agreement.
16. You shall be entitled to employ such legal counsel and other experts (including without
limitation the firm of Cooley Godward llp) as you may deem necessary properly to advise
you in connection with your obligations hereunder. You may rely upon the advice of such counsel,
and may pay such counsel reasonable compensation therefor. The Company shall be responsible for
all fees generated by such legal counsel in connection with your obligations hereunder.
17. This instrument shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns. It is understood and agreed that references to
you or your herein refer to the original Escrow Agent and to any and all successor Escrow
Agents. It is understood and agreed that the Company may at any time or from time to time assign
its rights under the Agreement and these Joint Escrow Instructions in whole or in part.
18. This Agreement shall be governed by and interpreted and determined in accordance with the
laws of the State of California, as such laws are applied by California courts to contracts made
and to be performed entirely in California by residents of that state.
3.
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Very truly yours, |
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Decru, Inc. |
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By |
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Title |
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Purchaser: |
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Escrow Agent: |
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4.
Exhibit D
FORM OF 83(B) ELECTION
83(b) ELECTION FORM
, 200_
Director of Internal Revenue
Internal Revenue Service Center
Fresno, CA 93888
Re: Election under Section 83(b)
Ladies and Gentlemen:
This statement constitutes an election pursuant to Section 83(b) of the Internal
Revenue Code of 1986, as amended from time to time.
Pursuant to Treasury Regulation Section 1.83-2, the following information is submitted:
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1.
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Name:
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(Purchaser) |
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Address:
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Social Security No.:
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2.
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Property Description:
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Shares of the Common Stock of Decru, Inc. |
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The date on which property was transferred is , 200_. |
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The taxable year for which the election is made is the calendar year 2002. |
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5.
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Restrictions: |
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Repurchase Option. In the event Purchasers Continuous Service terminates, then the
Company shall have an irrevocable option (the Repurchase Option) for a period of ninety (90) days
after said termination (or in the case of shares issued upon exercise of the Option after such date
of termination, within ninety (90) days after the date of the exercise), or such longer period as
may be agreed to by the Company and the Purchaser, to repurchase from Purchaser or Purchasers
personal representative, as the case may be, those shares that Purchaser received pursuant to the
exercise of the Option that have not as yet vested as of such termination date in accordance with
the Vesting Schedule indicated on Purchasers Stock Option Grant Notice (the Unvested Shares).
Shares Repurchasable at Purchasers Original Exercise Price. The Company may
repurchase all or any of the Unvested Shares at a price (Option Price) equal to the Purchasers
Exercise Price for such shares as indicated on Purchasers Stock Option Grant Notice.
Continuous Service means that the Participants service with the Company or an Affiliate,
whether as an Employee, Director or Consultant, is not interrupted or terminated. The
Participants Continuous Service shall not be deemed to have terminated merely because of a change
in the capacity in which the Participant renders service to the Company or an Affiliate as an
Employee, Consultant or Director or a change in the entity for which the Participant renders such
service, provided that there is no interruption or termination of the Participants Continuous
Service. For example, a change in status from an Employee of the Company to a Consultant of an
Affiliate or a Director will not constitute an interruption of Continuous Service. The Board or
the chief executive officer of the Company, in that partys sole discretion, may determine whether
Continuous Service shall be considered interrupted in the case of any leave of absence approved by
that party, including sick leave, military leave or any other personal leave.
6. The fair market value at the time of transfer of the property with respect to which this
election is being made, determined without regard to any restriction other than a restriction which
by its terms will never lapse, is $ .
7. The amount paid by the undersigned taxpayer for the property is $ .
8. A copy of this statement has been furnished to Decru, Inc., and the transferee of the
property if different from the Purchaser.
Dated: , 200___.
Very truly yours,
exv99w4
Exhibit 99.4
Decru, Inc.
Restricted Stock Bonus
Grant Notice
(2001 EQUITY INCENTIVE PLAN)
(Fully Vested)
Decru, Inc. (the Company), pursuant to its 2001 EQUITY INCENTIVE PLAN (the Plan), hereby
awards to Participant as a bonus the number of shares of the Companys Common Stock set forth below
(Award). This Award is subject to all of the terms and conditions as set forth herein and in the
Restricted Stock Bonus Agreement, the Plan, the form of Assignment Separate from Certificate and
the form of Joint Escrow Instructions, all of which are attached hereto and incorporated herein in
their entirety.
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Participant: |
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Date of Grant: |
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Vesting Commencement Date: |
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Number of Shares Subject to Award: |
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Consideration:
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Participants Past Services |
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Vesting Schedule:
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Fully Vested |
Additional Terms/Acknowledgements: The undersigned Participant acknowledges receipt of, and
understands and agrees to, this Grant Notice, the Restricted Stock Bonus Agreement and the Plan.
Participant further acknowledges that as of the Date of Grant, this Grant Notice, the Restricted
Stock Bonus Agreement and the Plan set forth the entire understanding between Participant and the
Company regarding the acquisition of stock in the Company and supersede all prior oral and written
agreements on that subject with the exception of (i) Awards previously granted and delivered to
Participant under the Plan, and (ii) the following agreements only:
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Decru, Inc. |
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Participant: |
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By: |
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Signature |
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Title:
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Date: |
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Date: |
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Attachments:
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Restricted Stock Bonus Agreement |
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2001 Equity Incentive Plan |
Attachment I
Restricted Stock Bonus Agreement
Decru, Inc.
2001 EQUITY INCENTIVE PLAN
Restricted Stock Bonus
Agreement
(Fully Vested)
Pursuant to the Restricted Stock Bonus Grant Notice (Grant Notice) and this Restricted Stock
Bonus Agreement (collectively, the Award) and in consideration of your past services, Decru, Inc.
(the Company) has awarded you a stock bonus under its 2001 EQUITY INCENTIVE PLAN (the Plan) for
the number of shares of the Companys Common Stock subject to the Award as indicated in the Grant
Notice. Defined terms not explicitly defined in this Restricted Stock Bonus Agreement but defined
in the Plan shall have the same definitions as in the Plan.
The details of your Award are as follows:
1. Vesting. Your Award will vest as provided in the Grant Notice, provided
that vesting will cease upon the termination of your Continuous Service.
2. Number of Shares. The number of shares subject to your Award may be
adjusted from time to time for Capitalization Adjustments, as provided in the Plan.
3. Securities Law Compliance. You may not be issued any shares under your
Award unless the shares are either (i) then registered under the Securities Act or (ii) the
Company has determined that such issuance would be exempt from the registration
requirements of the Securities Act. Your Award must also comply with other applicable laws
and regulations governing the Award, and you will not receive such shares if the Company
determines that such receipt would not be in material compliance with such laws and
regulations.
4. Restrictions on Transfer. You agree that the Company (or a representative
of the underwriters) may, in connection with the first underwritten registration of the
offering of any securities of the Company under the Securities Act, require that you not
sell, dispose of, transfer, make any short sale of, grant any option for the purchase of,
or enter into any hedging or similar transaction with the same economic effect as a sale,
any shares of Common Stock or other securities of the Company held by you under the Award,
for a period of time specified by the underwriter(s) (not to exceed one hundred eighty
(180) days) following the effective date of the registration statement of the Company filed
under the Securities Act. You further agree to execute and deliver such other agreements
as may be reasonably requested by the Company and/or the underwriter(s) that are consistent
with the foregoing or that are necessary to give further effect thereto. In order to
enforce the foregoing covenant, the Company may impose stop-transfer instructions with
respect to your Common Stock until the end of such period.
5. Right of First Refusal. Shares that are received under your Award are
subject to any right of first refusal that may be described in the Companys bylaws in
effect at such time the Company elects to exercise its right.
6. Restrictive Legends. The shares issued under your Award shall be endorsed
with appropriate legends determined by the Company.
7. Award not a Service Contract. Your Award is not an employment or service
contract, and nothing in your Award shall be deemed to create in any way whatsoever any
obligation on your part to continue in the employ of the Company or an Affiliate, or on the
part of the Company or an Affiliate to continue your employment. In addition, nothing in
your Award shall obligate the Company or an Affiliate, their respective shareholders,
boards of directors, Officers or Employees to continue any relationship that you might have
as a Director or Consultant for the Company or an Affiliate.
8. Withholding Obligations.
a. At the time your Award is made, or at any time thereafter as requested
by the Company, you hereby authorize withholding from payroll and any other amounts
payable to you, and otherwise agree to make adequate provision for any sums
required to satisfy the federal, state, local and foreign tax withholding
obligations of the Company or an Affiliate, if any, which arise in connection with
your Award.
b. Unless the tax withholding obligations of the Company and/or any
Affiliate are satisfied, the Company shall have no obligation to issue a
certificate for such shares or release such shares from any escrow provided for
herein.
9. Tax Consequences. The acquisition and vesting of the shares may have
adverse tax consequences to you that may avoided or mitigated by filing an election under
Section 83(b) of the Internal Revenue Code, as amended (the Code). Such election must be
filed within thirty (30) days after the date of your Award. YOU ACKNOWLEDGE THAT IT IS
YOUR OWN RESPONSIBILITY, AND NOT THE COMPANYS, TO FILE A TIMELY ELECTION UNDER CODE
SECTION 83(B), EVEN IF YOU REQUEST THE COMPANY TO MAKE THE FILING ON YOUR BEHALF.
10. Notices. Any notices provided for in your Award or the Plan shall be given
in writing and shall be deemed effectively given upon receipt or, in the case of notices
delivered by the Company to you, five (5) days after deposit in the United States mail,
postage prepaid, addressed to you at the last address you provided to the Company.
11. Miscellaneous.
a. The rights and obligations of the Company under your Award shall
be transferable to any one or more persons or entities, and all covenants and
agreements hereunder shall inure to the benefit of, and be enforceable by the
Companys successors and assigns. Your
rights and obligations under your Award may
only be assigned with the prior written consent of the Company.
b. You agree upon request to execute any further documents or instruments
necessary or desirable in the sole determination of the Company to carry out the
purposes or intent of your Award.
c. You acknowledge and agree that you have reviewed your Award in its
entirety, have had an opportunity to obtain the advice of counsel prior to
executing and accepting your Award and fully understand all provisions of your
Award.
12. Governing Plan Document. Your Award is subject to all the provisions of
the Plan, the provisions of which are hereby made a part of your Award, and is further
subject to all interpretations, amendments, rules and regulations which may from time to
time be promulgated and adopted pursuant to the Plan. In the event of any conflict between
the provisions of your Award and those of the Plan, the provisions of the Plan shall
control.
Attachment II
Decru, inc.
2001 Equity Incentive Plan
Termination Date: September 5, 2011
1. PURPOSES.
(a) Eligible Stock Award Recipients. The persons eligible to receive Stock Awards are the
Employees, Directors and Consultants of the Company and its Affiliates.
(b) Available Stock Awards. The purpose of the Plan is to provide a means by which eligible
recipients of Stock Awards may be given an opportunity to benefit from increases in value of the
Common Stock through the granting of the following Stock Awards: (i) Incentive Stock Options, (ii)
Nonstatutory Stock Options, (iii) stock bonuses and (iv) rights to acquire restricted stock.
(c) General Purpose. The Company, by means of the Plan, seeks to retain the services of the
group of persons eligible to receive Stock Awards, to secure and retain the services of new members
of this group and to provide incentives for such persons to exert maximum efforts for the success
of the Company and its Affiliates.
2. DEFINITIONS.
(a) Affiliate means any parent corporation or subsidiary corporation of the Company, whether
now or hereafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of
the Code.
(b) Board means the Board of Directors of the Company.
(c) Code means the Internal Revenue Code of 1986, as amended.
(d) Committee means a committee of one or more members of the Board appointed by the Board
in accordance with subsection 3(c).
(e) Common Stock means the common stock of the Company.
(f) Company means Decru, Inc., a Delaware corporation.
(g) Consultant means any person, including an advisor, (i) engaged by the Company or an
Affiliate to render consulting or advisory services and who is compensated for such services or
(ii) who is a member of the Board of Directors of an Affiliate. However, the term Consultant
shall not include either Directors who are not compensated by the Company