Exhibit 99.3
T-SPAN SYSTEMS CORPORATION
1998 STOCK INCENTIVE PLAN
Amended as of December 1998
(Effective October 24, 1998)
TABLE OF CONTENTS
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SECTION 1 PURPOSE |
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SECTION 2 DEFINITIONS |
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(a) Board |
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(b) Code |
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(c) Committee |
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(d) Common Stock |
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(e) Company |
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(f) Consultant |
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(g) Employee |
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(h) Exercise Price |
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(i) Fair Market Value |
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(j) Incentive Stock Option or ISO |
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(k) Non-Employee Director |
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(l) Nonstatutory Option or NSO |
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(m) Offeree |
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(n) Option |
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(o) Optionee |
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(p) Parent |
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(q) Plan |
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(r) Purchase Price |
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(s) Service |
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(t) Stock Option Agreement |
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(u) Stock Purchase Agreement |
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(v) Subsidiary |
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(w) Ten Percent Stockholder |
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SECTION 3 ADMINISTRATION |
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(a) Committees of the Board |
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(b) Authority of the Board |
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SECTION 4 ELIGIBILITY |
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SECTION 5 STOCK SUBJECT TO PLAN |
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(a) Basic Limitation |
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(b) Additional Shares |
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SECTION 6 TERMS AND CONDITIONS OF GRANTS OR SALES |
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(a) Stock Purchase Agreement |
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(b) Duration of Offers and Nontransferability of Rights |
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(c) Purchase Price |
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(d) Withholding Taxes |
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(e) Restrictions on Transfer of Common Stock |
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SECTION 7 TERMS AND CONDITIONS OF OPTIONS |
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(a) Stock Option Agreement |
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(b) Number of Shares |
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(c) Exercise Price |
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(d) Withholding Taxes |
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(e) Exercisability |
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(f) Term |
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(g) Nontransferability |
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(h) Exercise of Options on Termination of Service |
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(i) No Rights as a Stockholder |
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(j) Modification, Extension and Assumption of Options |
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(k) Restrictions on Transfer |
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SECTION 8 FORMS OF PAYMENT |
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(a) General Rule |
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(b) Surrender of Stock |
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(c) Promissory Notes |
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(d) Cashless Exercise |
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SECTION 9 ADJUSTMENTS UPON CHANGES IN COMMON STOCK |
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(a) General |
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(b) Mergers and Consolidations |
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(c) Reservation of Rights |
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SECTION 10 LEGAL REQUIREMENTS |
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(a) Restrictions on Issuance |
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(b) Financial Reports |
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SECTION 11 NO EMPLOYMENT RIGHTS |
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SECTION 12 DURATION AND AMENDMENTS |
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(a) Term of the Plan |
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(b) Right to Amend or Terminate the Plan |
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(c) Effect of Amendment or Termination |
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SECTION 13 EXECUTION |
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T-SPAN SYSTEMS CORPORATION
1998 STOCK INCENTIVE PLAN
Adopted By the Board October 24, 1998
Approved By Stockholders October 24, 1998
SECTION 1. PURPOSE.
The purpose of the Plan is to offer selected employees, directors and consultants an
opportunity to acquire a proprietary interest in the success of the Company, or to increase such
interest, to encourage such persons to remain in the employ of the Company and to attract new
employees with outstanding qualifications.
The Plan provides for the direct grant or sale of Common Stock and for the grant of
Options to purchase Common Stock. Options granted under the Plan may include Nonstatutory Options
as well as Incentive Stock Options intended to qualify under section 422 of the Internal Revenue
Code.
SECTION 2. DEFINITIONS.
(a) Board shall mean the Board of Directors of the Company, as constituted from time to
time.
(b) Code shall mean the Internal Revenue Code of 1986, as amended.
(c) Committee shall mean a committee consisting of one or more members of the Board
that is appointed by the Board to administer the Plan.
(d) Common Stock means the Companys common stock.
(e) Company shall mean T-Span Systems Corporation, a Delaware corporation.
(f) Consultant shall mean an individual who performs bona fide services to the Company,
a Parent or a Subsidiary other than as an Employee or a member of the Board.
(g) Employee shall mean any individual who is a common-law employee of the Company, a
Parent or a Subsidiary.
(h) Exercise Price shall mean the amount for which one share of Common Stock may be
purchased upon exercise of an Option, as specified by the Board in the applicable Stock Option
Agreement.
(i) Fair Market Value shall mean the fair market value of a share of Common Stock, as
determined by the Board in good faith. Such determination shall be conclusive and binding on all
persons.
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(j) Incentive Stock Option or ISO shall mean an incentive stock option described in Code
section 422(b).
(k) Non-Employee Director shall mean a member of the Board who is not an Employee.
(l) Nonstatutory Option or NSO shall mean a stock option that is not an ISO.
(m) Offeree shall mean an individual to whom the Board has offered the right to acquire
Common Stock other than upon exercise of an Option.
(n) Option shall mean an ISO or NSO granted under the Plan entitling the holder to
purchase Common Stock.
(o) Optionee shall mean an individual who holds an Option.
(p) Parent shall have the meaning set forth in Section 424(e) of the Code.
(q) Plan(q) Plan shall mean this 1998 Stock Incentive Plan.
(r) Purchase Price shall mean the consideration for which one share of Common Stock may
be acquired under the Plan pursuant to a grant or sale under Section 6, as specified by the Board.
(s) Service shall mean service as an Employee, Non-Employee Director or Consultant.
(t) Stock Option Agreement shall mean the agreement between the Company and an Optionee
that contains the terms, conditions and restrictions pertaining to an Option.
(u) Stock Purchase Agreement shall mean the agreement between the Company and an
Offeree who acquires Common Stock under the Plan (other than pursuant to an Option) that contains
the terms, conditions and restrictions pertaining to the acquisition of such Common Stock.
(v) Subsidiary shall have the meaning set forth in Section 424(f) of the Code. A
corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall
be considered a Subsidiary commencing as of such date.
(w) Ten Percent Stockholder means an individual who owns more than ten percent (10%) of
the total combined voting power of all classes of outstanding stock of the Company, its Parent or
any of its Subsidiaries. In determining stock ownership, the attribution rules of Section 424(d) of
the Code shall be applied.
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SECTION 3. ADMINISTRATION
(a) Committees of the Board. The Plan shall be administered by the Board. However, any or
all administrative functions otherwise exercisable by the Board may be delegated to a Committee.
Members of the Committee shall serve for such period of time as the Board may determine and shall
be subject to removal by the Board at any time. The Board may also at any time terminate the
functions of the Committee and reassume all powers and authority previously delegated to the
Committee. Any reference to the Board in the Plan shall be construed as a reference to the
Committee (if any) to whom the Board has assigned a particular function.
(b) Authority of the Board. Subject to the provisions of the Plan, the Board shall have
full authority and discretion to take any actions it deems necessary or advisable for the
administration of the Plan. All decisions, interpretations and other actions of the Board shall be
final and binding on all parties who have an interest in the Plan or any option or shares issued
thereunder.
SECTION 4. ELIGIBILITY.
Only Employees, Non-Employee Directors and Consultants shall be eligible for the grant of
Options or the direct grant or sale of Common Stock. Only Employees shall be eligible for the grant
of ISOs.
SECTION 5. STOCK SUBJECT TO PLAN.
(a) Basic Limitation. The stock issuable under the Plan shall be shares of authorized but
unissued or reacquired Common Stock. The maximum number of shares of Common Stock which may be
issued under the Plan shall not exceed Five Million One Hundred Thousand (5,100,000) shares,
subject to adjustment pursuant to Section 9.
(b) Additional Shares. If any outstanding Option or other right to acquire Common Stock
for any reason expires or is canceled, forfeited or otherwise terminated, the Common Stock
allocable to the unexercised portion of such Option or other right shall again be available for the
purposes of the Plan. If shares of Common Stock issued under the Plan are reacquired by the Company
pursuant to any right of repurchase or right of first refusal, such shares of Common Stock shall
again be available for the purposes of the Plan, except such shares shall not be available for
ISOs.
SECTION 6. TERMS AND CONDITIONS OF GRANTS OR SALES.
(a) Stock Purchase Agreement. Each grant or sale of Common Stock under the Plan other
than upon exercise of an Option shall be evidenced by a Stock Purchase Agreement between the
Offeree and the Company. Such grant or sale shall be subject to all applicable terms and conditions
of the Plan and may be subject to any other terms and conditions that are not inconsistent with the
Plan and that the Board deems appropriate for inclusion in a Stock Purchase Agreement. The
provisions of the various Stock Purchase Agreements entered into under the Plan need not be
identical.
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(b) Duration of Offers and Nontransferability of Rights. Any right to acquire Common Stock
under the Plan other than an Option shall automatically expire if not exercised by the Offeree
within the number of days specified by the Board and communicated to the Offeree. Such right shall
not be transferable and shall be exercisable only by the Offeree to whom such right was granted.
(c) Purchase Price. The Purchase Price shall be established by the Board and set forth in
the Stock Purchase Agreement and, to the extent required to comply with the California Corporations
Code or the regulations thereunder, shall not be less than eighty-five percent (85%) of Fair Market
Value (one hundred percent (100%) for Ten Percent Stockholders). The Purchase Price shall be
payable in a form described in Section 8 or, in the discretion of the Board, in consideration for
past services rendered to the Company or for its benefit.
(d) Withholding Taxes. As a condition to the purchase of Common Stock, the Offeree shall
make such arrangements as the Board may require for the satisfaction of any federal, state or local
withholding tax obligations that may arise in connection with such purchase.
(e) Restrictions on Transfer of Common Stock. No Common Stock granted or sold under the
Plan may be sold, made the subject of any short sale or loan, hypothecated, pledged, optioned or
otherwise transferred or disposed of by the Offeree for such period of time (not to exceed one
hundred eighty (180) days) following the effective date of a registration statement covering
securities of the Company filed under the Securities Act of 1933, as amended, unless such
restriction is consented to or waived by the managing underwriter. Subject to the preceding
sentence, any Common Stock granted or sold under the Plan shall be subject to such special
conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the
Board may determine. Such restrictions shall apply in addition to any general restrictions that may
apply to all holders of Common Stock.
SECTION 7. TERMS AND CONDITIONS OF OPTIONS.
(a) Stock Option Agreement. Each grant of an Option under the Plan shall be evidenced by
a Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all
applicable terms and conditions of the Plan and may be subject to any other terms and conditions
that are not inconsistent with the Plan and that the Board deems appropriate for inclusion in a
Stock Option Agreement. The provisions of the various Stock Option Agreements entered into under
the Plan need not be identical.
(b) Number of Shares. Each Stock Option Agreement shall specify the number of shares of
Common Stock that are subject to the Option and shall provide for the adjustment of such number in
accordance with Section 9. The Stock Option Agreement shall also specify whether the Option is an
ISO or a NSO.
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(c) Exercise Price. An Options Exercise Price shall be established by the Board and set forth
in a Stock Option Agreement. The Exercise Price of an ISO shall not be less than one hundred
percent (100%) of the Fair Market Value (one hundred ten percent (110%) for Ten Percent
Stockholders) on the date of grant. The Exercise Price of a NSO shall not be less than eight-five
percent (85%) of the Fair Market Value (one hundred ten percent (110%) for Ten Percent
Stockholders) on the date of grant. The Exercise Price shall be payable in a form described in
Section 8. Notwithstanding the foregoing, an Option may be granted with an exercise price lower
than that set prescribed in this paragraph if the Option grant is attributable to the issuance or
assumption of an option in a transaction to which Code section 424(a) applies.
(d) Withholding Taxes. As a condition to the exercise of an Option, the Optionee shall
make such arrangements as the Board may require for the satisfaction of any federal, state, local
or foreign withholding tax obligations that may arise in connection with such exercise. The
Optionee shall also make such arrangements as the Board may require for the satisfaction of any
federal, state, local or foreign withholding tax obligations that may arise in connection with the
disposition of Common Stock acquired by exercising an Option.
(e) Exercisability. Each Stock Option Agreement shall specify the date when all or any
installment of the Option is to vest or become exercisable. To the extent required to comply with
the California Corporations Code or the regulations thereunder, an Option granted to Employees who
are not officers shall vest and become exercisable no less rapidly than the rate of twenty percent
(20%) per year for each of the first five (5) years from the date of grant. Subject to the
preceding sentence, the vesting of any Option shall be determined by the Board in its sole
discretion. A Stock Option Agreement may permit an Optionee to exercise an Option before it is
vested, subject to the Companys right of repurchase over any shares acquired under the unvested
portion of the Option (an early exercise), which right of repurchase shall lapse at the same rate
the Option would have vested had there been no early exercise.
(f) Term. The Stock Option Agreement shall specify the term of the Option. The term shall
not exceed ten (10) years from the date of grant (five (5) years in the case of an ISO granted to a
Ten Percent Stockholder). Subject to the preceding sentence, the Board at its sole discretion shall
determine when an Option is to expire.
(g) Nontransferability. No Option shall be transferable by the Optionee other than by
will or by the laws of descent and distribution. An Option may be exercised during the lifetime of
the Optionee only or by the guardian or legal representative of the Optionee. No Option or interest
therein may be transferred, assigned, pledged or hypothecated by the Optionee during his lifetime,
whether by operation of law or otherwise, or be made subject to execution, attachment or similar
process.
(h) Exercise of Options on Termination of Service. To the extent required to comply with
the California Corporations Code or the regulations thereunder, each Stock Option Agreement shall
provide that the Optionee shall have the right to exercise the Option following termination of the
Optionees Service, during the Options term, for at least thirty (30) days following termination
of Service for any reason except cause, death or disability, and for at least six (6) months
following termination of Service due to death or disability.
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(i) No Rights as a Stockholder. An Optionee, or a transferee of an Optionee, shall have no
rights as a stockholder with respect to any Common Stock covered by an Option until such person
becomes entitled to receive such Common Stock by filing a notice of exercise and paying the
Exercise Price pursuant to the terms of such Option.
(j) Modification, Extension and Assumption of Options. Within the limitations of the
Plan, the Board may modify, extend or assume outstanding Options or may accept the cancellation of
outstanding Options (whether granted by the Company or another issuer) in return for the grant of
new Options for the same or a different number of shares of Common Stock and at the same or a
different Exercise Price. Notwithstanding the foregoing, no modification of an Option shall,
without the consent of the Optionee, impair the Optionees rights or increase the Optionees
obligations under such Option.
(k) Restrictions on Transfer. No shares of Common Stock issued upon exercise of an Option
may be sold or otherwise transferred or disposed of by the Optionee during the one hundred eighty
(180) day period following the effective date of a registration statement covering securities of
the Company filed under the Securities Act of 1933 (unless such restriction is consented to or
waived by the managing underwriter). Subject to the preceding sentence, any Common Stock issued
upon exercise of an Option shall be subject to such rights of repurchase, rights of first refusal
and other transfer restrictions as the Board may determine. Such restrictions shall apply in
addition to any restrictions that may apply to holders of Common Stock generally. Any right to
repurchase an Optionees Common Stock at the original Exercise Price upon termination of the
Optionees Service shall lapse at least as rapidly as the schedule set forth in Subsection (e)
above. Any such repurchase right may be exercised only within ninety (90) days after the
termination of the Optionees Service for cash or for cancellation of indebtedness incurred in
purchasing the Common Stock.
SECTION 8. FORMS OF PAYMENT.
(a) General Rule. The entire Purchase Price or Exercise Price shall be payable in cash or
cash equivalents acceptable to the Company at the time of exercise or purchase, except as otherwise
provided in this Section 8.
(b) Surrender of Stock. To the extent that a Stock Option Agreement or Stock Purchase
Agreement so provides, payment may be made all or in part with Common Stock that has already been
owned by the Optionee or the Optionees representative for any time period specified by the Board
and that are surrendered to the Company in good form for transfer. Such Common Stock shall be
valued at Fair Market Value on the date when the new Common Stock is purchased under the Plan.
(c) Promissory Notes. To the extent that a Stock Option Agreement or Stock Purchase
agreement so provides, payment may be made all or in part with a full recourse promissory note
executed by the Optionee. The interest rate and other terms and conditions of such note shall be
determined by the Board. The Board may require that the Optionee pledge his or her Common Stock to
the Company for the purpose of securing the payment of such note. In no event shall the stock
certificate(s) representing such Common Stock be released to the Optionee until such note is paid
in full, unless otherwise provided in the Stock Option Agreement or Stock Purchase Agreement.
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(d) Cashless Exercise. To the extent that a Stock Option Agreement so provides and a public
market for the Common Stock exists, payment may be made all or in part by delivery (on a form
acceptable to the Board) of an irrevocable direction to a securities broker to sell Common Stock
and to deliver all or part of the sale proceeds to the Company in payment of the aggregate Exercise
Price.
SECTION 9. ADJUSTMENTS UPON CHANGES IN COMMON STOCK.
(a) General. In the event of a subdivision of the outstanding Common Stock, a declaration
of a dividend payable in Common Stock, a declaration of an extraordinary dividend payable in a form
other than Common Stock in an amount that has a material effect on the value of Common Stock, a
combination or consolidation of the outstanding Common Stock into a lesser number of shares, a
recapitalization, a reclassification or a similar occurrence, the Board shall make appropriate
adjustments in one or more of (i) the number of shares of Common Stock available for future grants
of Options or other rights to acquire Common Stock under Section 5, (ii) the number of shares of
Common Stock covered by each outstanding Option or other right to acquire Common Stock or (iii) the
Exercise Price of each outstanding Option or the Purchase Price of each other right to acquire
Common Stock.
(b) Mergers and Consolidations. In the event that the Company is a party to a merger or
consolidation, outstanding Options or other rights to acquire Common Stock shall be subject to the
agreement of merger or reorganization. Such agreement, without an Optionees consent, may provide
for:
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The continuation of such outstanding Options by the Company (if the Company is
the surviving corporation); |
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The assumption of the Plan and such outstanding Options by the surviving
corporation or its parent; |
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The substitution by the surviving corporation or its parent of options with
substantially the same terms for such outstanding Options; or |
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The cancellation of such outstanding Options, provided that the Company shall
permit an Optionee to exercise vested Options either at or before the merger or consolidation. |
(c) Reservation of Rights. Except as provided in this Section 9, an Optionee or Offeree
shall have no rights by reason of (i) any subdivision or consolidation of shares of stock of any
class, (ii) the payment of any dividend, or (iii) any other increase or decrease in the number of
shares of stock of any class. Any issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number of shares of Common Stock subject to an
Option, or the number of shares subject to any other right to acquire Common Stock and/or the
Exercise Price or Purchase Price. The grant of an Option or other right to acquire Common Stock
pursuant to the Plan shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital or business structure, to
merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or
assets.
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SECTION 10. LEGAL REQUIREMENTS.
(a) Restrictions on Issuance. Common Stock shall not be issued under the Plan unless the
issuance and delivery of such Common Stock complies with (or is exempt from) all applicable
requirements of law, including (without limitation) the Securities Act of 1933, as amended, the
rules and regulations promulgated thereunder, state securities laws and regulations, and the
regulations of any stock exchange on which the Companys securities may then be listed, and the
Company has obtained the approval or favorable ruling from any governmental agency that the Company
determines is necessary or advisable.
(b) Financial Reports. To the extent required to comply with the California Corporations
Code or the regulations thereunder, not less often than annually the Company shall furnish to
Optionees and Offerees Company summary financial information including a balance sheet regarding
the Companys financial condition and results of operations, unless such Optionees or Offerees have
duties with the Company that assure them access to equivalent information. Such financial
statements need not be audited.
SECTION 11. NO EMPLOYMENT RIGHTS.
No provision of the Plan, nor any Option granted or other right to acquire Common Stock
granted under the Plan, shall be construed to give any person any right to become, to be treated
as, or to remain an Employee, Consultant or Non-Employee Director. The Company and its Subsidiaries
reserve the right to terminate any persons Service at any time and for any reason.
SECTION 12. DURATION AND AMENDMENTS.
(a) Term of the Plan. The Plan, as set forth herein, shall become effective on the date
of its adoption by the Board, subject to the approval of the Companys stockholders. In the event
that the stockholders fail to approve the Plan within twelve (12) months after its adoption by the
Board, any Option grants or other right to acquire Common Stock already made shall be null and
void, and no additional Option grants or other right to acquire Common Stock shall be made after
such date. The Plan shall terminate automatically ten (10) years after its adoption by the Board
and may be terminated on any earlier date pursuant to Subsection (b) below.
(b) Right to Amend or Terminate the Plan. The Board may amend or terminate the Plan at
any time. Rights under any Option granted or other right to acquire Common Stock granted before
amendment of the Plan shall not be materially altered, or impaired adversely, by such amendment,
except with consent of the Optionee or Offeree. An amendment of the Plan shall be subject to the
approval of the Companys stockholders only to the extent required by applicable laws, regulations
or rules.
(c) Effect of Amendment or Termination. No Common Stock shall be issued or sold under the
Plan after the termination thereof, except upon exercise of an Option granted prior to such
termination. The termination of the Plan, or any amendment thereof, shall not affect any Common
Stock previously issued or Option previously granted under the Plan.
SECTION 13. EXECUTION.
To record the adoption of the Plan, the Company has caused its authorized officer to
execute the same.
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T-SPAN SYSTEMS CORPORATION.
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By: |
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Name: |
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Title: |
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