Itemfield Inc.
TABLE OF CONTENTS
| Page No. | ||||||
| SECTION 1. Establishment And Purpose | 3 | |||||
| SECTION 2. Administration | 3 | |||||
| (a) | Committees of the Board of Directors |
3 | ||||
| (b) | Authority of the Board of Directors |
3 | ||||
| SECTION 3. Eligibility | 3 | |||||
| (a) | General Rule |
3 | ||||
| (b) | Ten-Percent Stockholders |
3 | ||||
| SECTION 4. Stock Subject To Plan | 4 | |||||
| (a) | Basic Limitation |
4 | ||||
| (b) | Additional Shares |
4 | ||||
| SECTION 5. | 4 | |||||
| (a) | Stock Purchase Agreement |
4 | ||||
| (b) | Duration of Offers and Nontransferability of Rights |
4 | ||||
| (c) | Purchase Price |
4 | ||||
| (d) | Withholding Taxes |
4 | ||||
| (e) | Restrictions on Transfer of Shares and Minimum Vesting |
4 | ||||
| SECTION 6. Terms And Conditions Of Options | 5 | |||||
| (a) | Stock Option Agreement |
5 | ||||
| (b) | Number of Shares |
5 | ||||
| (c) | Exercise Price |
5 | ||||
| (d) | Exercisability |
5 | ||||
| (e) | Accelerated Exercisability |
5 | ||||
| (f) | Basic Term |
6 | ||||
| (g) | Termination of Service (Except by Death) |
6 | ||||
| (h) | Leaves of Absence |
6 | ||||
| (i) | Death of Optionee |
6 | ||||
| (j) | Restrictions on Transfer of Shares and Minimum Vesting |
7 | ||||
| (k) | Transferability of Options |
7 | ||||
| (l) | Withholding Taxes |
7 | ||||
| (m) | No Rights as a Stockholder |
7 | ||||
| (n) | Modification, Extension and Assumption of Options |
8 | ||||
| Page No. | ||||||
| SECTION 7. Payment For Shares | 8 | |||||
| (a) | General Rule |
8 | ||||
| (b) | Surrender of Stock |
8 | ||||
| (c) | Services Rendered |
8 | ||||
| (d) | Promissory Note |
8 | ||||
| (e) | Exercise/Sale |
8 | ||||
| (f) | Exercise/Pledge |
8 | ||||
| SECTION 8. Adjustment Of Shares | 9 | |||||
| (a) | General |
9 | ||||
| (b) | Mergers and Consolidations |
9 | ||||
| (c) | Reservation of Rights |
10 | ||||
| SECTION 9. Securities Law Requirements | 10 | |||||
| (a) | General |
10 | ||||
| (b) | Financial Reports |
10 | ||||
| SECTION 10. No Retention Rights | 10 | |||||
| SECTION 11. Duration and Amendments | 11 | |||||
| (a) | Term of the Plan |
11 | ||||
| (b) | Right to Amend or Terminate the Plan |
11 | ||||
| (c) | Effect of Amendment or Termination |
11 | ||||
| SECTION 12. Restriction and Right of First Refusal | 11 | |||||
| SECTION 13. Definitions | 13 | |||||
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ITEMFIELD INC. 2003 STOCK PLAN
SECTION 1. ESTABLISHMENT AND PURPOSE.
The purpose of the Plan is to offer selected persons an opportunity to acquire a proprietary
interest in the success of the Company, or to increase such interest, by purchasing Shares of the
Company’s Stock. The Plan provides both for the direct award or sale of Shares and for the grant
of Options to purchase Shares. Options granted under the Plan may include Nonstatutory Options as
well as ISOs intended to qualify under Section 422 of the Code.
Capitalized terms are defined in Section 13.
SECTION 2. ADMINISTRATION.
(a) Committees of the Board of Directors. The Plan may be administered by one or more Committees.
Each Committee shall consist of one or more members of the Board of Directors who have been
appointed by the Board of Directors. Each Committee shall have such authority and be responsible
for such functions as the Board of Directors has assigned to it. If no Committee has been
appointed, the entire Board of Directors shall administer the Plan. Any reference to the Board of
Directors in the Plan shall be construed as a reference to the Committee (if any) to whom the Board
of Directors has assigned a particular function.
(b) Authority of the Board of Directors. Subject to the provisions of the Plan, the Board of
Directors shall have full authority and discretion to take any actions it deems necessary or
advisable for the administration of the Plan. All decisions, interpretations and other actions of
the Board of Directors shall be final and binding on all Purchasers, all Optionees and all persons
deriving their rights from a Purchaser or Optionee.
SECTION 3. ELIGIBILITY.
(a) General Rule. Only Employees, Outside Directors and Consultants shall be eligible for the
grant of Nonstatutory Options or the direct award or sale of Shares. Only Employees shall be
eligible for the grant of ISOs.
(b) Ten-Percent Stockholders. A person who owns more than 10% of the total combined voting power
of all classes of outstanding stock of the Company, its Parent or any of its Subsidiaries shall not
be eligible for designation as an Optionee or Purchaser unless (i) the Exercise Price is at least
110% of the Fair Market Value of a Share on the date of grant, (ii) the Purchase Price (if any) is
at least 100% of the Fair Market Value of a Share and (iii) in the case of an ISO, such ISO by its
terms is not exercisable after the
expiration of five years from the date of grant. For purposes of this Subsection (b), in
determining stock ownership, the attribution rules of Section 424(d) of the Code shall be applied.
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SECTION 4. STOCK SUBJECT TO PLAN.
(a) Basic Limitation. Not more than 3,524,486 Shares may be issued under the Plan (subject to
Subsection (b) below and Section 8). The number of Shares that are subject to Options or other
rights outstanding at any time under the Plan shall not exceed the number of Shares that then
remain available for issuance under the Plan. The Company, during the term of the Plan, shall at
all times reserve and keep available sufficient Shares to satisfy the requirements of the Plan.
Shares offered under the Plan may be authorized but unissued Shares or treasury Shares.
(b) Additional Shares. In the event that Shares previously issued under the Plan are reacquired by
the Company, such Shares shall be added to the number of Shares then available for issuance under
the Plan. However, the aggregate number of Shares issued upon the exercise of ISOs (including
Shares reacquired by the Company) shall in no event exceed 200% of the number specified in
Subsection (a) above. In the event that an outstanding Option or other right for any reason
expires or is canceled, the Shares allocable to the unexercised portion of such Option or other
right shall be added to the number of Shares then available for issuance under the Plan.
SECTION 5. TERMS AND CONDITIONS OF AWARDS OR SALES.
(a) Stock Purchase Agreement. Each award or sale of Shares under the Plan (other than upon
exercise of an Option) shall be evidenced by a Stock Purchase Agreement between the Purchaser and
the Company. Such award or sale shall be subject to all applicable terms and conditions of the Plan
and may be subject to any other terms and conditions which are not inconsistent with the Plan and
which the Board of Directors deems appropriate for inclusion in a Stock Purchase Agreement. The
provisions of the various Stock Purchase Agreements entered into under the Plan need not be
identical.
(b) Duration of Offers and Nontransferability of Rights. Any right to acquire Shares under the Plan
(other than an Option) shall automatically expire if not exercised by the Purchaser within 30 days
after the grant of such right was communicated to the Purchaser by the Company. Such right shall
not be transferable and shall be exercisable only by the Purchaser to whom such right was granted.
(c) Purchase Price. The Purchase Price of Shares to be offered under the Plan shall not be less
than 85% of the Fair Market Value of such Shares, and a higher percentage may be required by
Section 3(b). Subject to the preceding sentence, the Board of Directors shall determine the
Purchase Price at its sole discretion. The Purchase Price shall be payable in a form described in
Section 7.
(d) Withholding Taxes. As a condition to the purchase of Shares, the Purchaser shall make such
arrangements as the Board of Directors may require for the satisfaction of any federal, state,
local or foreign withholding tax obligations that may arise in connection with such purchase.
(e) Restrictions on Transfer of Shares and Minimum Vesting. Any Shares awarded or sold under the
Plan shall be subject to such special forfeiture conditions, rights of repurchase,
4
rights of first refusal and other transfer restrictions as the Board of Directors may determine. Such restrictions
shall be set forth in the applicable Stock Purchase Agreement and shall apply in addition to any
restrictions that may apply to holders of Shares generally. In the case of a Purchaser who is not
an officer of the Company, an Outside Director or a Consultant:
(i) Any right to repurchase the Purchaser’s Shares at the original Purchase Price (if any)
upon termination of the Purchaser’s Service shall lapse at least as rapidly as 20% per year
over the five-year period commencing on the date of the award or sale of the Shares;
(ii) Any such right may be exercised only for cash or for cancellation of indebtedness
incurred in purchasing the Shares; and
(iii) Any such right may be exercised only within 90 days after the termination of the
Purchaser’s Service.
SECTION 6. TERMS AND CONDITIONS OF OPTIONS.
(a) Stock Option Agreement. Each grant of an Option under the Plan shall be evidenced by a Stock
Option Agreement between the Optionee and the Company. The Option shall be subject to all
applicable terms and conditions of the Plan and may be subject to any other terms and conditions
which are not inconsistent with the Plan and which the Board of Directors deems appropriate for
inclusion in a Stock Option Agreement. The provisions of the various Stock Option Agreements
entered into under the Plan need not be identical.
(b) Number of Shares. Each Stock Option Agreement shall specify the number of Shares that are
subject to the Option and shall provide for the adjustment of such number in accordance with
Section 8. The Stock Option Agreement shall also specify whether the Option is an ISO or a
Nonstatutory Option.
(c) Exercise Price. Each Stock Option Agreement shall specify the Exercise Price. The Exercise
Price of an ISO shall not be less than 100% of the Fair Market Value of a Share on the date of
grant, and a higher percentage may be required by Section 3(b). The Exercise Price of a
Nonstatutory Option shall not be less than 85% of the Fair Market Value of a Share on the date of
grant, and a higher percentage may be required by Section 3(b). Subject to the preceding two
sentences, the Exercise Price under any Option shall be determined by the Board of Directors at its
sole discretion. The Exercise Price shall be payable in a form described in Section 7.
(d) Exercisability. Each Stock Option Agreement shall specify the date when all or any installment
of the Option is to become exercisable. No Option shall be exercisable unless the Optionee has
delivered an executed copy of the Stock Option Agreement to the Company. In the case of an
Optionee who is not an officer of the Company, an Outside Director or a Consultant, an Option shall
become exercisable at least as rapidly as 20% per year over the five-year period commencing on the
date of grant. Subject to the preceding sentence, the Board of Directors shall determine the
exercisability provisions of the Stock Option Agreement at its sole discretion.
(e) Accelerated Exercisability. Unless the applicable Stock Option Agreement provides otherwise,
if the Company is subject to a Change in Control before the Optionee’s Service
5
terminates, provision shall be made so that one of the following shall occur: (i) the Options shall remain
outstanding, (ii) the Options shall be assumed by the surviving corporation or its parent or (iii)
the surviving corporation or its parent shall substitute options with substantially the same terms
for such Options. In the absence of such provision, all of an Optionee’s Options shall become
exercisable in full, all as further detailed in Section 8(b) below.
(f) Basic Term. The Stock Option Agreement shall specify the term of the Option. The term shall
not exceed 10 years from the date of grant, and a shorter term may be required by Section 3(b).
Subject to the preceding sentence, the Board of Directors at its sole discretion shall determine
when an Option is to expire.
(g) Termination of Service (Except by Death). If an Optionee’s Service terminates for any reason
other than the Optionee’s death, then the Optionee’s Options shall expire on the earliest of the
following occasions:
(i) The expiration date determined pursuant to Subsection (f) above;
(ii) The date three months after the termination of the Optionee’s Service for any reason
other than Disability, or such later date as the Board of Directors may determine; or
(iii) The date six months after the termination of the Optionee’s Service by reason of
Disability, or such later date as the Board of Directors may determine.
The Optionee may exercise all or part of the Optionee’s Options at any time before the expiration
of such Options under the preceding sentence, but only to the extent that such Options had become
exercisable before the Optionee’s Service terminated (or became exercisable as a result of the
termination) and the underlying Shares had vested before the Optionee’s Service terminated (or
vested as a result of the termination). The balance of such Options shall lapse when the
Optionee’s Service terminates. In the event that the Optionee dies after the termination of the
Optionee’s Service but before the expiration of the Optionee’s Options, all or part of such Options
may be exercised (prior to expiration) by the executors or administrators of the Optionee’s estate
or by any person who has acquired such Options directly from the Optionee by beneficiary
designation, bequest or inheritance, but only to the extent that such Options had
become exercisable before the Optionee’s Service terminated (or became exercisable as a result of
the termination) and the underlying Shares had vested before the Optionee’s Service terminated (or
vested as a result of the termination).
(h) Leaves of Absence. For purposes of Subsection (g) above, Service shall be deemed to continue
while the Optionee is on a bona fide leave of absence, if such leave was approved by the Company in
writing and if continued crediting of Service for this purpose is expressly required by the terms
of such leave or by applicable law (as determined by the Company).
(i) Death of Optionee. If an Optionee dies while the Optionee is in Service, then the Optionee’s
Options shall expire on the earlier of the following dates:
(i) The expiration date determined pursuant to Subsection (f) above; or
6
(ii) The date six months after the Optionee’s death, or such later date as the Board of
Directors may determine.
All or part of the Optionee’s Options may be exercised at any time before the expiration of such
Options under the preceding sentence by the executors or administrators of the Optionee’s estate or
by any person who has acquired such Options directly from the Optionee by beneficiary designation,
bequest or inheritance, but only to the extent that such Options had become exercisable before the
Optionee’s death (or became exercisable as a result of the death) and the underlying Shares had
vested before the Optionee’s death (or vested as a result of the Optionee’s death). The balance of
such Options shall lapse when the Optionee dies.
(j) Restrictions on Transfer of Shares and Minimum Vesting. Any Shares issued upon exercise of an
Option shall be subject to such special forfeiture conditions, rights of repurchase, rights of
first refusal and other transfer restrictions as the Board of Directors may determine. Such
restrictions shall be set forth in the applicable Stock Option Agreement and shall apply in
addition to any restrictions that may apply to holders of Shares generally. In the case of an
Optionee who is not an officer of the Company, an Outside Director or a Consultant:
(i) Any right to repurchase the Optionee’s Shares at the original Exercise Price upon
termination of the Optionee’s Service shall lapse at least as rapidly as 20% per year over
the five-year period commencing on the date of the option grant;
(ii) Any such right may be exercised only for cash or for cancellation of indebtedness
incurred in purchasing the Shares; and
(iii) Any such right may be exercised only within 90 days after the later of (A) the
termination of the Optionee’s Service or (B) the date of the option exercise.
(k) Transferability of Options. An Option shall be transferable by the Optionee only by (i) a
beneficiary designation, (ii) a will or (iii) the laws of descent and distribution, except as
provided in the next sentence. If the
applicable Stock Option Agreement so provides, a Nonstatutory Option shall also be transferable by
gift or domestic relations order to a Family Member of the Optionee. An ISO may be exercised during
the lifetime of the Optionee only by the Optionee or by the Optionee’s guardian or legal
representative.
(l) Withholding Taxes. As a condition to the exercise of an Option, the Optionee shall make such
arrangements as the Board of Directors may require for the satisfaction of any federal, state,
local or foreign withholding tax obligations that may arise in connection with such exercise. The
Optionee shall also make such arrangements as the Board of Directors may require for the
satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in
connection with the disposition of Shares acquired by exercising an Option.
(m) No Rights as a Stockholder. An Optionee, or a transferee of an Optionee, shall have no rights
as a stockholder with respect to any Shares covered by the Optionee’s Option until such person
becomes entitled to receive such Shares by filing a notice of exercise and paying the Exercise
Price pursuant to the terms of such Option.
7
(n) Modification, Extension and Assumption of Options. Within the limitations of the Plan, the
Board of Directors may modify, extend or assume outstanding Options or may accept the cancellation
of outstanding Options (whether granted by the Company or another issuer) in return for the grant
of new Options for the same or a different number of Shares and at the same or a different Exercise
Price. The foregoing notwithstanding, no modification of an Option shall, without the consent of
the Optionee, impair the Optionee’s rights or increase the Optionee’s obligations under such
Option.
SECTION 7. PAYMENT FOR SHARES.
(a) General Rule. The entire Purchase Price or Exercise Price of Shares issued under the Plan
shall be payable in cash or cash equivalents at the time when such Shares are purchased, except as
otherwise provided in this Section 7.
(b) Surrender of Stock. To the extent that a Stock Option Agreement so provides, all or any part
of the Exercise Price may be paid by surrendering, or attesting to the ownership of, Shares that
are already owned by the Optionee. Such Shares shall be surrendered to the Company in good form
for transfer and shall be valued at their Fair Market Value on the date when the Option is
exercised. The Optionee shall not surrender, or attest to the ownership of, Shares in payment of
the Exercise Price if such action would cause the Company to recognize compensation expense (or
additional compensation expense) with respect to the Option for financial reporting purposes.
(c) Services Rendered. At the discretion of the Board of Directors, Shares may be awarded under
the Plan in consideration of services rendered to the Company, a Parent or a Subsidiary prior to
the award.
(d) Promissory Note. To the extent that a Stock Option Agreement or Stock Purchase Agreement so
provides, all or a portion of the Exercise Price or Purchase Price (as the case may be) of Shares
issued under the Plan may be paid with a full-recourse promissory note. However, the par value of
the Shares, if newly issued, shall be paid in cash or cash equivalents. The Shares shall be
pledged as security for payment of the principal amount of the promissory note and interest
thereon. The interest rate payable under the terms of the promissory note shall not be less than
the minimum rate (if any) required to avoid the imputation of additional interest under the Code.
Subject to the foregoing, the Board of Directors (at its sole discretion) shall specify the term,
interest rate, amortization requirements (if any) and other provisions of such note.
(e) Exercise/Sale. To the extent that a Stock Option Agreement so provides, and if Stock is
publicly traded, payment may be made all or in part by the delivery (on a form prescribed by the
Company) of an irrevocable direction to a securities broker approved by the Company to sell Shares
and to deliver all or part of the sales proceeds to the Company in payment of all or part of the
Exercise Price and any withholding taxes.
(f) Exercise/Pledge. To the extent that a Stock Option Agreement so provides, and if Stock is
publicly traded, payment may be made all or in part by the delivery (on a form prescribed by the
Company) of an irrevocable direction to pledge Shares to a securities broker or lender
8
approved by the Company, as security for a loan, and to deliver all or part of the loan proceeds to the Company
in payment of all or part of the Exercise Price and any withholding taxes.
SECTION 8. ADJUSTMENT OF SHARES.
(a) General. In the event of a subdivision of the outstanding Stock, a declaration of a dividend
payable in Shares or a combination or consolidation of the outstanding Stock into a lesser number
of Shares, corresponding adjustments shall automatically be made in each of (i) the number of
Shares available for future grants under Section 4, (ii) the number of Shares covered by each
outstanding Option and (iii) the Exercise Price under each outstanding Option. In the event of a
declaration of an extraordinary dividend payable in a form other than Shares in an amount that has
a material effect on the Fair Market Value of the Stock, a recapitalization, a spin-off, a
reclassification or a similar occurrence, the Board of Directors at its sole discretion may make
appropriate adjustments in one or more of (i) the number of Shares available for future grants
under Section 4, (ii) the number of Shares covered by each outstanding Option or (iii) the Exercise
Price under each outstanding Option.
(b) Mergers and Consolidations. In the event that the Company is a party to a merger or
consolidation, all outstanding Options shall be subject to the agreement of merger or
consolidation. Such agreement shall provide for one or more of the following:
(i) The continuation of such outstanding Options by the Company (if the Company is the
surviving corporation).
(ii) The assumption of such outstanding Options by the surviving corporation or its parent
in a manner that complies with Section 424(a) of the Code (whether or not such Options are
ISOs) and other applicable laws of any relevant jurisdiction.
(iii) The substitution by the surviving corporation or its parent of new options for such
outstanding Options in a manner that complies with Section 424(a) of the Code (whether or
not such Options are ISOs).
(iv) Full exercisability of such outstanding Options and full vesting of the Shares subject
to such Options, followed by the cancellation of such Options. The full exercisability of
such Options and full vesting of the Shares subject to such Options may be contingent on
the closing of such merger or consolidation. The Optionees shall be able to exercise such
Options during a period of not less than five full business days preceding the closing date
of such merger or consolidation, unless the Board of Directors determines in good faith
that (A) a shorter period is required to permit a timely closing of such merger or
consolidation and (B) such shorter period still offers the Optionees a reasonable
opportunity to exercise such Options. Any exercise of such Options during such period may
be contingent on the closing of such merger or consolidation.
(v) The cancellation of such outstanding Options and a payment to the Optionees equal to
the excess of (A) the Fair Market Value of the Shares subject to such Options (whether or
not such Options are then exercisable or such Shares are then vested) as of the closing
date of such merger or consolidation over (B) their Exercise Price. Such
9
payment shall be
made in the form of cash, cash equivalents, or securities of the surviving corporation or
its parent with a Fair Market Value equal to the required amount. Such payment may be made
in installments and may be deferred until the date or dates when such Options would have
become exercisable or such Shares would have vested. Such payment may be subject to
vesting based on the Optionee’s continuing Service, provided that the vesting schedule
shall not be less favorable to the Optionees than the schedule under which such Options
would have become exercisable or such Shares would have vested. If the Exercise Price of
the Shares subject to such Options exceeds the Fair Market Value of such Shares, then such
Options may be cancelled without making a payment to the Optionees. For purposes of this
Paragraph (v), the Fair Market Value of any security shall be determined without regard to
any vesting conditions that may apply to such security.
(c) Reservation of Rights. Except as provided in this Section 8, an Optionee or Purchaser shall
have no rights by reason of (i) any subdivision or consolidation of shares of stock of any class,
(ii) the payment of any dividend or (iii) any other increase or decrease in the number of shares
of stock of any class. Any issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or Exercise Price of Shares subject to an
Option. The grant of an Option pursuant to the Plan shall not affect in any way the right or
power of the Company to make adjustments, reclassifications, reorganizations or changes of its
capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer
all or any part of its business or assets.
SECTION 9. SECURITIES LAW REQUIREMENTS.
(a) General. Shares shall not be issued under the Plan unless the issuance and delivery of such
Shares comply with (or are exempt from) all applicable requirements of law, including (without
limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated
thereunder, state securities laws and regulations, and the regulations of any stock exchange or
other securities market on which the Company’s securities may then be traded.
(b) Financial Reports. The Company each year shall furnish to Optionees, Purchasers and
stockholders who have received Stock under the Plan its balance sheet and income statement, unless
such Optionees, Purchasers or stockholders are key Employees whose duties with the Company assure
them access to equivalent information. Such balance sheet and income statement need not be
audited.
SECTION 10. NO RETENTION RIGHTS.
Nothing in the Plan or in any right or Option granted under the Plan shall confer upon the
Purchaser or Optionee any right to continue in Service for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Company (or any Parent or
Subsidiary employing or retaining the Purchaser or Optionee) or of the Purchaser or Optionee, which
rights are hereby expressly reserved by each, to terminate his or her Service at any time and for
any reason, with or without cause.
10
SECTION 11. DURATION AND AMENDMENTS.
(a) Term of the Plan. The Plan, as set forth herein, shall become effective on the date of its
adoption by the Board of Directors, subject to the approval of the Company’s stockholders. If the
stockholders fail to approve the Plan within 12 months after its adoption by the Board of
Directors, then any grants, exercises or sales that have already occurred under the Plan shall be
rescinded and no additional grants, exercises or sales shall thereafter be made under the Plan. The
Plan shall terminate automatically 10 years after the later of (i) its adoption by the Board of
Directors or (ii) the most recent increase in the number of Shares reserved under Section 4 that
was approved by the Company’s stockholders. The Plan may be terminated on any earlier date pursuant
to Subsection (b) below.
(b) Right to Amend or Terminate the Plan. The Board of Directors may amend, suspend or terminate
the Plan at any time and for any reason; provided, however, that any amendment of the Plan shall be
subject to the approval of the Company’s stockholders if it (i) increases the number of Shares
available for issuance under the Plan (except as provided in Section 8) or (ii) materially changes
the class of persons who are eligible for the grant of ISOs. Stockholder approval shall not be
required for any other amendment of the Plan. If the stockholders fail to approve an increase in
the number of Shares reserved under Section 4 within 12 months after its adoption by the Board of
Directors,
then any grants, exercises or sales that have already occurred in reliance on such increase shall
be rescinded and no additional grants, exercises or sales shall thereafter be made in reliance on
such increase.
(c) Effect of Amendment or Termination. No Shares shall be issued or sold under the Plan after the
termination thereof, except upon exercise of an Option granted prior to such termination. The
termination of the Plan, or any amendment thereof, shall not affect any Share previously issued or
any Option previously granted under the Plan.
SECTION 12. RESTRICTION AND RIGHT OF FIRST REFUSAL.
12.1 Restriction. Notwithstanding anything to the the contrary herein, prior to the initial
public offering of the Company’s shares to the public, an Optionee or Purchaser may not sell,
pledge or otherwise transfer any shares issued under this Plan, or an interest in such Shares,
prior to the elapse of six (6) months from the date of issuance of such Shares.
12.2 Right of First Refusal. If the Optionee proposes to sell, pledge or otherwise transfer
to a third party any Shares acquired under this Plan, or any interest in such Shares, the
Repurchaser (as defined below) shall have a right of first refusal with respect to all (and not
less than all) of such. If the Optionee desires to transfer Shares acquired under this Agreement,
the Optionee shall give a written notice (the “Transfer Notice”) to the Company describing fully
the proposed transfer, including the number of Shares proposed to be transferred, the proposed
transfer price, the name and address of the proposed transferee and proof satisfactory to the
Company that the proposed sale or transfer will not violate any applicable national, federal or
state securities laws. The Transfer Notice shall be signed both by the Optionee and by the proposed
new Transferee and must constitute a binding commitment of both parties to the transfer of the
Shares. The Repurchaser shall have the right to purchase all, and not less than all,
11
of the Shares on the terms of the proposal described in the Transfer Notice (subject, however, to any change in
such terms permitted under Subsection 12.2 below) by delivery of a notice of exercise of the right
of first refusal within thirty (30) days after the date when the Transfer Notice was received by
the Company. The Repurchaser’s rights under this Section 12.2 shall be freely assignable, in whole
or in part.
12.3 Transfer of Shares. If the Repurchaser fails to exercise its right of first refusal
within thirty (30) days after the date when the Company received the Transfer Notice, the Optionee
may, not later than ninety (90) days following receipt of the Transfer Notice by the Company,
conclude a transfer of the Shares subject to the Transfer Notice on the terms and conditions
described in the Transfer Notice, provided that any such sale is made in compliance with applicable
national, federal and state securities laws and not in violation of any other contractual
restrictions to which the Optionee is bound. Any proposed transfer on terms and conditions
different from those described in the Transfer Notice, as well as any subsequent proposed transfer
by the Optionee, shall again be subject to the right of first refusal and shall require compliance
with the procedure described in Subsection 12.1 above. If the Repurchaser exercises its right of
first refusal, the parties shall consummate the sale of the Shares on the terms set forth in the
Transfer Notice within sixty (60) days after the date when the Company received
the Transfer Notice (or within such longer period as may have been specified in the Transfer
Notice); provided, however, that in the event the Transfer Notice provided that payment for the
Shares was to be made in a form other than cash or cash equivalents paid at the time of transfer,
the Repurchaser shall have the option of paying for the Shares with cash or cash equivalents equal
to the present value of the consideration described in the Transfer Notice.
12.4 Additional Shares or Substituted Securities. In the event of the declaration of a
dividend payable in Shares, the declaration of an extraordinary dividend payable in a form other
than Shares, a spin-off, a Share split, an adjustment in conversion ratio, a recapitalization or a
similar transaction affecting the Company’s outstanding securities without receipt of
consideration, any new, substituted or additional securities or other property (including money
paid other than as an ordinary cash dividend) which are by reason of such transaction distributed
with respect to any Shares subject to this Section 12 or into which such Shares thereby become
convertible shall immediately be subject to this Section 12. Appropriate adjustments to reflect
the distribution of such securities or property shall be made to the number and/or class of the
Shares subject to this Section 12.
12.5 Termination of Right of First Refusal. Any other provision of this Section 12
notwithstanding, in the event that the Shares are readily tradable on an established securities
market, the Repurchaser shall have no right of first refusal, and the Optionee shall have no
obligation to comply with the procedures prescribed by Subsections 12.1 and 12.2 above.
12.6 Permitted Transfers. Sections 12.2 to 12.5 above shall not apply to (i) a transfer by
beneficiary designation, will or intestate succession or (ii) a transfer to the Optionee’s spouse,
children or grandchildren or to a trust established by the Optionee for its own benefit or the
benefit of its spouse, children or grandchildren, provided in either case that the transferee
agrees in writing on a form prescribed by the Company to be bound by this Agreement.
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12.7 Termination of Rights as Shareholder. If the Repurchaser makes available, at the time
and place and in the amount and form provided in this Agreement, the consideration for the Shares
to be purchased in accordance with this Section 12, then after such time the person from whom such
Shares are to be purchased shall no longer have any rights as a holder of such Shares (other than
the right to receive payment of such consideration in accordance with this Agreement). Such Shares
shall be deemed to have been purchased in accordance with the applicable provisions hereof, whether
or not the certificate(s) therefor have been delivered as required by this Agreement.
12.8 Definition of Repurchaser. “Repurchaser” shall mean (i) the Company, (ii) any affiliate
or subsidiary of the Company determined by the Board of Directors of the Company or (iii) if the
majority of the Board of Directors of the Company so decides, one or more third parties designated
by the Board of Directors of the Company.
SECTION 13. DEFINITIONS.
a. “Board of Directors” shall mean the Board of Directors of the Company, as constituted from
time to time.
b. “Change in Control” shall mean (i) the consummation of a merger or consolidation of the
Company with or into another entity or (ii) the dissolution, liquidation or winding up of the
Company. The foregoing notwithstanding, a merger or consolidation of the Company shall not
constitute a “Change in Control” if immediately after such merger or consolidation a majority of
the voting power of the capital stock of the continuing or surviving entity, or any direct or
indirect parent corporation of such continuing or surviving entity, will be owned by the persons
who were the Company’s stockholders immediately prior to such merger or consolidation in
substantially the same proportions as their ownership of the voting power of the Company’s capital
stock immediately prior to such merger or consolidation.
c. “Code” shall mean the Internal Revenue Code of 1986, as amended.
d. “Committee” shall mean a committee of the Board of Directors, as described in Section 2(a).
e. “Company” shall mean Itemfield Inc., a Delaware corporation.
f. “Consultant” shall mean a person who performs bona fide services for the Company, a Parent
or a Subsidiary as a consultant or advisor, excluding Employees and Outside Directors.
g. “Disability” shall mean that the Optionee is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment.
h. “Employee” shall mean any individual who is a common-law employee of the Company, a Parent
or a Subsidiary.
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i. “Exercise Price” shall mean the amount for which one Share may be purchased upon exercise
of an Option, as specified by the Board of Directors in the applicable Stock Option Agreement.
j. “Fair Market Value” shall mean the fair market value of a Share, as determined by the Board
of Directors in good faith. Such determination shall be conclusive and binding on all persons.
k. “Family Member” shall mean (i) any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive relationships,
(ii) any person sharing the Optionee’s household (other than a tenant or employee), (iii) a trust
in which persons described in Clause (i) or (ii) have more than 50% of the beneficial interest,
(iv) a foundation in which persons described in Clause (i) or (ii) or the Optionee control the
management of assets and (v) any other entity in which persons described in Clause (i) or (ii) or
the Optionee own more than 50% of the voting interests.
l. “ISO” shall mean an employee incentive stock option described in Section 422(b) of the
Code.
m. “Nonstatutory Option” shall mean a stock option not described in Sections 422(b) or 423(b)
of the Code.
n. “Option” shall mean an ISO or Nonstatutory Option granted under the Plan and entitling the
holder to purchase Shares.
o. “Optionee” shall mean a person who holds an Option.
p. “Outside Director” shall mean a member of the Board of Directors who is not an Employee.
q. “Parent” shall mean any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, if each of the corporations other than the Company owns stock
possessing 50% or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain. A corporation that attains the status of a Parent on a date after
the adoption of the Plan shall be considered a Parent commencing as of such date.
r. “Plan” shall mean this Itemfield Inc. 2003 Stock Plan.
s. “Purchase Price” shall mean the consideration for which one Share may be acquired under the
Plan (other than upon exercise of an Option), as specified by the Board of Directors.
t. “Purchaser” shall mean a person to whom the Board of Directors has offered the right to
acquire Shares under the Plan (other than upon exercise of an Option).
u. “Service” shall mean service as an Employee, Outside Director or Consultant.
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v. “Share” shall mean one share of Stock, as adjusted in accordance with Section 8 (if
applicable).
w. “Stock” shall mean the Common Stock of the Company, with a par value of $0.01 per Share.
x. “Stock Option Agreement” shall mean the agreement between the Company and an Optionee that
contains the terms, conditions and restrictions pertaining to the Optionee’s Option.
y. “Stock Purchase Agreement” shall mean the agreement between the Company and a Purchaser who
acquires Shares under the Plan that contains the terms, conditions and restrictions pertaining to
the acquisition of such Shares.
z. “Subsidiary” shall mean any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company, if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain. 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.
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