1999 Share Option/Share Issuance Plan - OpenTV Corp.
OPENTV CORP.
AMENDED AND RESTATED
1999 SHARE OPTION/SHARE ISSUANCE PLAN
Adopted by the Board of Directors of OpenTV Corp. on October 22, 1999
ARTICLE ONE
GENERAL PROVISIONS
1. PURPOSE.
This AMENDED AND RESTATED 1999 SHARE OPTION/SHARE ISSUANCE PLAN is
intended to promote the interests Of OPENTV CORP., a British Virgin Island
corporation, by providing eligible persons with the opportunity to acquire a
proprietary interest, or otherwise increase their proprietary interest, in the
Corporation as an incentive for them to remain in the service of the
Corporation.
Capitalized terms herein shall have the meanings assigned to such
terms in the attached Appendix.
2. STRUCTURE OF PLAN.
a. The Plan shall be divided into two (2) separate equity programs:
(i) the OPTION GRANT PROGRAM under which eligible persons
may, at the discretion of the Board, be granted Options (an "Option")
to purchase shares of Class A Ordinary Shares, and
(ii) the SHARE ISSUANCE PROGRAM under which eligible
persons may, at the discretion of the Board, be issued shares of
Class A Ordinary Shares directly (a "Share Issuance"), either
through the immediate purchase of such shares or as a bonus for
services rendered the Corporation (or any Parent or Subsidiary).
b. Any right granted under the Plan, including Options and Share
Issuances, shall be referred to herein as a Share Award. The provisions of
Articles One and Four shall apply to all Share Awards under the Plan and shall
accordingly govern the interests of all Participants under the Plan.
3. ADMINISTRATION OF THE PLAN.
a. 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
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composed of not fewer than two (2) Directors (the "Committee"), and may also
be, in the discretion of the Board, Outside Directors. 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 (and
references in this Plan to the Board shall thereafter be to the Committee),
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. Additionally, prior to the date of the first registration of any
equity security of the Corporation under Section 12 of the Exchange Act, and
notwithstanding anything to the contrary contained herein, the Board may
delegate administration of the Plan to any person or persons or to a committee
of one or more members of the Board and the term "Committee" shall apply to
any person or persons to whom such authority has been delegated.
Notwithstanding anything in this Section 3 to the contrary, at any time the
Board or the Committee may delegate to a committee of one or more members of
the Board the authority to grant Share Awards to eligible persons who are
either (i) not then Covered Employees and are not expected to be Covered
Employees at the time of recognition of income resulting from such Share Award,
or (ii) not persons with respect to whom the Corporation wishes to avoid the
application of Section 162(m) of the Code.
b. The Board shall have full power and authority (subject to the
provisions of the Plan) to establish such rules and regulations as it may deem
appropriate for proper administration of the Plan and to make such
determinations under, and issue such interpretations of, the Plan and any
outstanding Share Awards thereunder as it may deem necessary or advisable.
Decisions of the Board shall be final and binding on all parties who have an
interest in the Plan or any Share Award thereunder.
4. ELIGIBILITY.
a. The persons eligible to participate in the Plan are as follows:
(i) Employees,
(ii) Outside Directors, non-employee Directors or the
non-employee members of the board of directors of any Parent or
Subsidiary, and
(iii) Consultants and other independent advisors who
provide services to the Corporation (or any Parent or Subsidiary).
b. The Board shall have full authority to determine, (i) with respect
to Options, which eligible persons are to receive the Options, the time or times
when the grants covering the Options are to be made, the number of shares to be
covered by each Option, the status of each Option as either an Incentive Option
or a Non-Statutory Option, the time or times when each Option is to become
exercisable, the vesting schedule (if any) applicable to each Option, the
exercise price of each Option and the maximum term for which each Option is to
remain outstanding, and (ii) with respect to Share Issuances, which eligible
persons are to receive Share Issuances, the time or times when such share
issuances are to be made, the number of shares covered by the Share Issuance,
the vesting schedule (if any) applicable to the Share Issuance and
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the consideration to be paid by the Participant for the shares covered by each
Share Issuance.
c. Incentive Options may only be granted to Employees. In addition, no
person shall be eligible for the grant of an Incentive Option if, at the time of
grant, such person owns (or is deemed to own pursuant to Section 424(d) of the
Code) shares possessing more than ten percent (10%) of the total combined voting
power of all classes of shares of the company or of any of its affiliates unless
the exercise price of such Option is at least one hundred ten percent (110%) of
the Fair Market Value of such shares at the date of grant and the Incentive
Option is not exercisable after the expiration of five (5) years from the date
of grant.
d. The Board shall have the absolute discretion to grant either
Options or Share Issuances.
5. SHARES SUBJECT TO THE PLAN
a. The shares issuable under the Plan shall be shares of authorized
but unissued or reacquired Class A Ordinary Shares. Subject to the provisions of
subsection 1.c. of this Section 5 relating to adjustments upon changes in
shares, the maximum number of shares of Class A Ordinary Shares which may be
issued over the term of the Plan shall not exceed 36,000,000 shares.
b. Shares of Class A Ordinary Shares subject to outstanding Options
shall be available for subsequent issuance under the Plan to the extent (i) the
Options expire or terminate for any reason prior to exercise in full or (ii) the
Options are cancelled in accordance with the cancellation-regrant provisions of
Article Two. Unvested shares issued under the Plan and subsequently repurchased
by the Corporation, at the Option exercise price or direct issue price paid per
share, pursuant to the Corporation's repurchase rights under the Plan shall be
added back to the number of shares of Class A Ordinary Shares reserved for
issuance under the Plan and shall accordingly be available for reissuance
through one or more subsequent Options or Share Issuances under the Plan.
c. If any change is made in the shares subject to the Plan, or subject
to any Share Award, without the receipt of consideration by the Corporation
(through merger, consolidation, reorganization, recapitalization,
reincorporation, share dividend, dividend in property other than cash, share
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction not involving the receipt of
consideration by the Corporation), the Plan will be appropriately adjusted in
the class(es) and number of shares and price per share of shares subject to such
outstanding Share Awards. Such adjustments shall be made by the Board or the
Committee, the determination of which shall be final, binding and conclusive.
The conversion of any convertible securities of the Corporation shall not be
treated as a "transaction not involving the receipt of consideration by the
Corporation."
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ARTICLE TWO
OPTION GRANT PROGRAM
1. OPTION TERMS
Each Option shall be evidenced by one or more documents in the form
approved by the Board; provided, however, that each such document shall comply
with the terms specified below. Each document evidencing an Incentive Option
shall, in addition, be subject to the provisions of the Plan applicable to such
Options.
a. Exercise Price.
1. The exercise price of each Incentive Option shall be not
less than one hundred percent (100%) of the Fair Market Value of the shares
subject to the Option on the date the Option is granted and the exercise price
of each Nonstatutory Option shall be at the price determined by the Board of
Directors. Notwithstanding the foregoing, an Incentive 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.
2. The exercise price shall become immediately due upon
exercise of the Option and shall, subject to the provisions of Section 1 of
Article Four and the documents evidencing the Option, be payable in cash or
check made payable to the Corporation. Should the Class A Ordinary Shares be
registered under Section 12(g) of the 1934 Act at the time the Option is
exercised, then the exercise price may also be paid as follows:
(i) in shares of Class A Ordinary Shares held for the
requisite period necessary to avoid a charge to the Corporation's
earnings for financial reporting purposes and valued at Fair Market
Value on the Exercise Date, or
(ii) to the extent the Option is exercised for vested
shares, through a special sale and remittance procedure pursuant to
which the Participant shall concurrently provide irrevocable
instructions (A) to a Corporation-designated brokerage firm to
effect the immediate sale of the purchased shares and remit to the
Corporation, out of the sale proceeds available on the settlement
date, sufficient funds to cover the aggregate exercise price payable
for the purchased shares plus all applicable Federal, state and local
income and employment taxes required to be withheld by the Corporation
by reason of such exercise and (B) to the Corporation to deliver the
certificates for the purchased shares directly to such brokerage firm
in order to complete the sale.
Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.
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b. Exercise and Term of Options. Each Option shall be exercisable at
such time or times, during such period and for such number of shares as shall be
determined by the Board and set forth in the documents evidencing the Option
grant. However, no Option shall have a term in excess of ten (10) years measured
from the Option grant date.
c. The aggregate Fair Market Value of the shares of Class A Ordinary
Shares (determined as of the respective date or dates of grant) for which one or
more Options granted to any Employee under the Plan (or any other Option plan of
the Corporation or any Parent or Subsidiary) may for the first time become
exercisable as Incentive Options during any one (1) calendar year shall not
exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the
Employee holds two (2) or more such Options which become exercisable for the
first time in the same calendar year, the foregoing limitation on the
exercisability of such Options as Incentive Options shall be applied on the
basis of the order in which such Options are granted. To the extent that the
aggregate Fair Market Value (determined at the time of grant) of shares with
respect to which Incentive Options are exercisable for the first time by any
Participant 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 Options.
d. Effect of Termination of Service.
1. The following provisions shall govern the exercise of
any Options held by the Participant at the time of cessation of Service or
death:
(i) Should the Participant cease to remain in Service
for any reason other than Disability, then the Participant shall have
a period of three (3) months following the date of such cessation of
Service during which to exercise each outstanding Option held by such
Participant.
(ii) Should the Participant's Service terminate by
reason of Disability, then the Participant shall have a period of
twelve (12) months following the date of such cessation of Service
during which to exercise each outstanding Option held by such
Participant.
(iii) If the Participant dies while holding an
outstanding Option, then the personal representative of his or her
estate or the person or persons to whom the Option is transferred
pursuant to the Participant's will or the laws of inheritance shall
have a twelve (12)-month period following the date of the
Participant's death to exercise such Option.
(iv) Under no circumstances, however, shall any such
Option be exercisable after the specified expiration of the Option
term.
(v) During the applicable post-Service exercise period,
the Option may not be exercised in the aggregate for more than the
number of vested shares for which the Option is exercisable on the
date of the Participant's
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cessation of Service. Upon the expiration of the applicable exercise
period or (if earlier) upon the expiration of the Option term, the
Option shall terminate and cease to be outstanding for any vested
shares for which the Option has not been exercised. However, the
Option shall, immediately upon the Participant's cessation of
Service, terminate and cease to be outstanding with respect to any
and all Option shares for which the Option is not otherwise at the
time exercisable or in which the Participant is not otherwise at that
time vested.
2. The Board shall have the discretion, exercisable either at the time
an Option is granted or at any time while the Option remains outstanding, to:
(i) extend the period of time for which the Option is to
remain exercisable following Participant's cessation of Service or
death from the limited period otherwise in effect for that Option to
such greater period of time as the Board shall deem appropriate, but
in no event beyond the expiration of the Option term, and/or
(ii) permit the Option to be exercised, during the
applicable post-Service exercise period, not only with respect to the
number of vested shares of Class A Ordinary Shares for which such
Option is exercisable at the time of the Participant's cessation of
Service but also with respect to one or more additional installments
in which the Participant would have vested under the Option had the
Participant continued in Service.
e. Shareholder Rights. The holder of an Option shall have no shareholder
rights with respect to the shares subject to the Option until such person shall
have exercised the Option, paid the exercise price and become a holder of record
of the purchased shares.
f. Unvested Shares. The Board shall have the discretion to grant Options
which are exercisable for unvested shares of Class A Ordinary Shares. Should the
Participant cease Service while holding such unvested shares, the Corporation
shall have the right to repurchase, at the exercise price paid per share, any or
all of those unvested shares. The terms upon which such repurchase right shall
be exercisable (including the period and procedure for exercise and the
appropriate vesting schedule for the purchased shares) shall be established by
the Board and set forth in the document evidencing such repurchase right. The
Board may not impose a vesting schedule upon any Option grant or the shares of
Class A Ordinary Shares subject to that Option which is more restrictive than
twenty percent (20%) per year vesting, with the initial vesting to occur not
later than one (1) year after the Option grant date. However, such limitation
shall not be applicable to any Option grants made to individuals who are
officers of The Corporation, non employee Board members or independent
consultants.
g. First Refusal Rights. Until such time as the Class A Ordinary Shares
are first registered under Section 12(g) of the 1934 Act, the Corporation shall
have the right of first refusal with respect to any proposed disposition by the
Participant (or any successor in interest) of any shares of Class A Ordinary
Shares issued under the Plan. Such right of first refusal shall be exercisable
in accordance with the terms established by the Board and set forth in the
document
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evidencing such right.
h. Limited Transferability of Options. During the lifetime of the
Participant, the Option shall be exercisable only by the Participant and shall
not be assignable or transferable other than by will or by the laws of descent
and distribution following the Participant's death.
i. Withholding. The Corporation's obligation to deliver shares of Class A
Ordinary Shares upon the exercise of any Options granted under the Plan shall be
subject to the satisfaction of all applicable federal, state and local income
and employment tax withholding requirements.
2. CORPORATE TRANSACTION
a. The shares subject to each Option outstanding under the Plan at the
time of a Corporate Transaction shall automatically vest in full so that each
such Option shall, immediately prior to the effective date of the Corporate
Transaction, become fully exercisable for all of the shares of Class A Ordinary
Shares at the time subject to that Option and may be exercised for any or all of
those shares as fully-vested shares of Class A Ordinary Shares. However, the
shares subject to an outstanding Option shall not vest on such an accelerated
basis if and to the extent: (i) such Option is assumed by the successor
corporation (or parent thereof) in the Corporate Transaction and the
Corporation's repurchase rights with respect to the unvested Option shares are
concurrently assigned to such successor corporation (or parent thereof) or (ii)
such Option is to be replaced with a cash incentive program of the successor
corporation which preserves the spread existing on the unvested Option shares at
the time of the Corporate Transaction and provides for subsequent payout in
accordance with the same vesting schedule applicable to those unvested Option
shares or (iii) the acceleration of such Option is subject to other limitations
imposed by the Board at the time of the Option grant.
b. All outstanding repurchase rights shall also terminate automatically,
and the shares of Class A Ordinary Shares subject to those terminated rights
shall immediately vest in full, in the event of any Corporate Transaction,
except to the extent: (i) those repurchase rights are assigned to the successor
corporation (or parent thereof) in connection with such Corporate Transaction or
(ii) such accelerated vesting is precluded by other limitations imposed by the
Board at the time the repurchase right is issued.
c. Immediately following the consummation of the Corporate Transaction,
all outstanding Options shall terminate and cease to be outstanding, except to
the extent assumed by the successor corporation (or parent thereof).
d. Each Option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Participant in consummation of such Corporate Transaction,
had the Option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments shall also be made to (i) the number and class of
securities available for issuance under the Plan following the consummation of
such Corporate Transaction and (ii) the exercise price payable per share under
each outstanding Option, provided the aggregate
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exercise price payable for such securities shall remain the same.
e. The Board shall have the discretion, exercisable either at the time
the Option is granted or at any time while the Option remains outstanding, to
provide for the automatic acceleration (in whole or in part) of one or more
outstanding Options (and the immediate termination of the Corporation's
repurchase rights with respect to the shares subject to those Options) upon the
occurrence of a Corporate Transaction, whether or not those Options are to be
assumed in the Corporate Transaction.
f. The Board shall also have full power and authority, exercisable either
at the time the Option is granted or at any time while the Option remains
outstanding, to structure such Option so that the shares subject to that Option
will automatically vest on an accelerated basis should the Participant's Service
terminate by reason of an Involuntary Termination within a designated period
(not to exceed eighteen (18) months) following the effective date of any
Corporate Transaction in which the Option is assumed and the repurchase rights
applicable to those shares do not otherwise terminate. Any Option so accelerated
shall remain exercisable for the fully-vested Option shares until the earlier of
(i) the expiration of the Option term or (ii) the expiration of the one (1)-year
period measured from the effective date of the Involuntary Termination. In
addition, the Board may provide that one or more of the outstanding repurchase
rights with respect to shares held by the Participant at the time of such
Involuntary Termination shall immediately terminate on an accelerated basis, and
the shares subject to those terminated rights shall accordingly vest at that
time.
g. The portion of any Incentive Option accelerated in connection with a
Corporate Transaction shall remain exercisable as an Incentive Option only to
the extent the applicable One Hundred Thousand Dollar limitation is not
exceeded. To the extent such dollar limitation is exceeded, the accelerated
portion of such Option shall be exercisable as a Non-Statutory Option under the
federal tax laws.
h. The grant of Options under the Plan shall in no way affect the right
of the Corporation to adjust, reclassify, reorganize or otherwise change its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.
3. CANCELLATION AND REGRANT OF OPTIONS
The Board shall have the authority to effect, at any time and from
time to time, with the consent of the affected Option holders, the cancellation
of any or all outstanding Options under the Plan and to grant in substitution
therefor new Options covering the same or different number of shares of Class A
Ordinary Shares but with an exercise price per share based on the Fair Market
Value per share of Class A Ordinary Shares on the new Option grant date.
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ARTICLE THREE
SHARE ISSUANCE PROGRAM
1. SHARE ISSUANCE TERMS
Shares of Class A Ordinary Shares may be issued under the Share
Issuance Program through direct and immediate issuances. Each such Share
Issuance shall be evidenced by a Share Issuance Agreement which complies with
the terms specified below.
a. Purchase Price
1. The purchase price per share shall be fixed by the
Board.
2. Subject to the provisions of Section 1. of Article Four,
shares of Class A Ordinary Shares may be issued under the Share Issuance Program
for any of the following items of consideration which the Board may deem
appropriate in each individual instance:
(i) cash or check made payable to the Corporation, or
(ii) past services rendered to the Corporation (or any
Parent or Subsidiary).
b. Vesting Provisions
1. Shares of Class A Ordinary Shares issued under the Share
Issuance Program may, in the discretion of the Board, be fully and immediately
vested upon issuance or may vest in one or more installments over the
Participant's period of Service or upon attainment of specified performance
objectives. However, the Board may not impose a vesting schedule upon any share
issuance effected under the Share Issuance Program which is more restrictive
than twenty percent (20%) per year vesting, with initial vesting to occur not
later than one (1) year after the issuance date. Such limitation shall not apply
to any Class A Ordinary Shares issuances made to the officers of the
Corporation, non-employee Board members or independent consultants.
2. Any new, substituted or additional securities or other
property (including money paid other than as a regular cash dividend) which the
Participant may have the right to receive with respect to the Participant's
unvested shares of Class A Ordinary Shares by reason of any share dividend,
share split, recapitalization, combination of shares, exchange of shares or
other change affecting the outstanding Class A Ordinary Shares as a class
without the Corporation's receipt of consideration shall be issued subject to
(i) the same vesting requirements applicable to the Participant's unvested
shares of Class A Ordinary Shares and (ii) such escrow arrangements as the Board
shall deem appropriate.
3. The Participant shall have full shareholder rights with
respect to any shares of Class A Ordinary Shares issued to the Participant under
the Share Issuance Program, whether or not the Participant's interest in those
shares is vested. Accordingly, the Participant shall
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have the right to vote such shares and to receive any regular cash dividends
paid on such shares.
4. Should the Participant cease to remain in Service while
holding one or more unvested shares of Class A Ordinary Shares issued under the
Share Issuance Program or should the performance objectives not be attained with
respect to one or more such unvested shares of Class A Ordinary Shares, then
those shares shall be immediately surrendered to the Corporation for
cancellation, and the Participant shall have no further shareholder rights with
respect to those shares. To the extent the surrendered shares were previously
issued to the Participant for consideration paid in cash or cash equivalent
(including the Participant's purchase-money indebtedness), the Corporation shall
repay to the Participant the cash consideration paid for the surrendered shares
and shall cancel the unpaid principal balance of any outstanding purchase-money
note of the Participant attributable to such surrendered shares.
5. The Board may in its discretion waive the surrender and
cancellation of one or more unvested shares of Class A Ordinary Shares (or other
assets attributable thereto) which would otherwise occur upon the non-completion
of the vesting schedule applicable to such shares. Such waiver shall result in
the immediate vesting of the Participant's interest in the shares of Class A
Ordinary Shares as to which the waiver applies. Such waiver may be effected at
any time, whether before or after the Participant's cessation of Service or the
attainment or non-attainment of the applicable performance objectives.
c. First Refusal Rights. Until such time as the Class A Ordinary
Shares are first registered under Section 12(g) of the 1934 Act, the Corporation
shall have the right of first refusal with respect to any proposed disposition
by the Participant (or any successor in interest) of any shares of Class A
Ordinary Shares issued under the Share Issuance Program. Such right of first
refusal shall be exercisable in accordance with the terms established by the
Board and set forth in the document evidencing such right.
2. CORPORATE TRANSACTION
a. Upon the occurrence of a Corporate Transaction, all outstanding
repurchase rights under the Share Issuance Program shall terminate
automatically, and the shares of Class A Ordinary Shares subject to those
terminated rights shall immediately vest in full, except to the extent: (i)
those repurchase rights are assigned to the successor corporation (or parent
thereof) in connection with such Corporate Transaction or (ii) such accelerated
vesting is precluded by other limitations imposed by the Board at the time the
repurchase right is issued.
b. The Board shall have the discretionary authority, exercisable
either at the time the unvested shares are issued or any time while the
Corporation's repurchase rights with respect to those shares remain outstanding,
to provide that those rights shall automatically terminate on an accelerated
basis, and the shares of Class A Ordinary Shares subject to those terminated
rights shall immediately vest, in the event the Participant's Service should
subsequently terminate by reason of an Involuntary Termination within a
designated period (not to exceed eighteen (18) months) following the effective
date of any Corporate Transaction in which those repurchase rights are assigned
to the successor corporation (or parent thereof).
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3. SHARE ESCROW/LEGENDS
Unvested shares may, in the Board's discretion, be held in escrow by
the Corporation until the Participant's interest in such shares vests or may be
issued directly to the Participant with restrictive legends on the certificates
evidencing those unvested shares.
ARTICLE FOUR
MISCELLANEOUS
1. FINANCING
The Board may permit any Participant or Participant to pay the Option
exercise price under the Option Grant Program or the purchase price of shares
issued under the Share Issuance Program by delivering a full-recourse, interest
bearing promissory note payable in one or more installments. The terms of any
such promissory note (including the interest rate and the terms of repayment)
shall be established by the Board in its sole discretion. In no event may the
maximum credit available to the Participant or Participant exceed the sum of (i)
the aggregate Option exercise price or purchase price payable for the purchased
shares (less the par value of those shares) plus (ii) any Federal, state and
local income and employment tax liability incurred by the Participant in
connection with the Option exercise or share purchase.
2. EFFECTIVE DATE AND TERM OF PLAN
a. The Plan shall become effective when adopted by the Board, but no
Option granted under the Plan may be exercised, and no Share Issuance shall be
issued under the Plan, until the Plan is approved by the Corporation's
shareholders. If such shareholder approval is not obtained within twelve (12)
months after the date of the Board's adoption of the Plan, then all Options
previously granted under the Plan shall terminate and cease to be outstanding,
and no further Options shall be granted and no shares shall be issued under the
Plan. Subject to such limitation, the Board may grant Options and issue shares
under the Plan at any time after the effective date of the Plan and before the
date fixed herein for termination of the Plan.
b. The Plan shall terminate upon the earliest of (i) January 25, 2008,
(ii) the date on which all shares available for issuance under the Plan shall
have been issued as vested shares or (iii) the termination of all outstanding
Options in connection with a Corporate Transaction. All Options and unvested
share issuances outstanding at that time under the Plan shall continue to have
full force and effect in accordance with the provisions of the documents
evidencing such Options or issuances.
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3. AMENDMENT OF THE PLAN
The Board shall have complete and exclusive power and authority to
amend or modify the Plan in any or all respects. However, no such amendment or
modification shall adversely affect the rights and obligations with respect to
Options or unvested share issuances at the time outstanding under the Plan
unless the Participant consents to such amendment or modification. In addition,
certain amendments may require shareholder approval pursuant to applicable laws
and regulations.
4. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares
of Class A Ordinary Shares under the Plan shall be used for general corporate
purposes.
5. WITHHOLDING
The Corporation's obligation to deliver shares of Class A Ordinary
Shares upon the exercise of any Options or upon the vesting of any shares issued
under the Plan shall be subject to the satisfaction of all applicable federal,
state and local income and employment tax withholding requirements.
6. REGULATORY APPROVALS
The implementation of the Plan, the granting of any Options under the
Plan and the issuance of any shares of Class A Ordinary Shares (i) upon the
exercise of any Option or (ii) under the Share Issuance Program shall be subject
to the Corporation's procurement of all approvals and permits required by
regulatory authorities having jurisdiction over the Plan, the Options granted
under it and the shares of Class A Ordinary Shares issued pursuant to it.
7. NO EMPLOYMENT OR SERVICE RIGHTS
Nothing in the Plan shall confer upon the Participant 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 Corporation (or any Parent or
Subsidiary employing or retaining such person) or of the Participant, which
rights are hereby expressly reserved by each, to terminate such person's Service
at any time for any reason, with or without cause.
8. FINANCIAL REPORTS
The Corporation shall deliver a balance sheet and an income statement
at least annually to each individual holding an outstanding Share Award under
the Plan, unless such individual is a key Employee whose duties in connection
with the Corporation (or any Parent or Subsidiary) assure such individual access
to equivalent information.
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APPENDIX
The following definitions shall be in effect under the Plan:
Affiliate shall mean any parent corporation or subsidiary corporation,
whether now or hereafter existing, as those terms are defined in Sections 424(e)
and (f) respectively, of the Code.
Board shall mean the Corporation's Board of Directors.
Code shall mean the Internal Revenue Code of 1986, as amended.
Committee shall have the meaning as set forth in Section 3 of Article One.
Class A Ordinary Shares shall mean the Corporation's Class A ordinary
shares.
Continuous Status as an Employee, Director or Consultant shall mean that
the service of an individual to the Company, whether as an Employee, Director or
Consultant, is not interrupted or terminated. The Board or the chief executive
officer of the Company may determine, in that party's sole discretion, whether
Continuous Status as an Employee, Director or Consultant shall be considered
interrupted in the case of: (i) any leave of absence approved by the Board or
the chief executive officer of the Company, including sick leave, military
leave, or any other personal leave; or (ii) transfer between the Company,
Affiliates or their successors.
Covered Employee shall mean 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 shareholders under the Exchange Act, as determined
for purposes of Section 162(m) of the Code.
Corporate Transaction shall mean either of the following shareholder-
approved transactions to which the Corporation is a party:
(a) a merger or consolidation in which securities possessing more than
fifty percent (50%) of the total combined voting power of the Corporation's
outstanding securities are transferred to a person or persons different
from the persons holding those securities immediately prior to such
transaction, or
(b) the sale, transfer or other disposition of all or substantially
all of the Corporation's assets in complete liquidation or dissolution of
the Corporation.
Corporation shall mean OpenTV Corp., a British Virgin Island corporation.
Director means a member of the Board.
Disability shall mean the inability of the Participant to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment and shall be
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determined by the Board on the basis of such medical evidence as the Board deems
warranted under the circumstances.
Employee shall mean an individual who is in the employ of the Corporation
(or any Parent or Subsidiary), subject to the control and direction of the
employer entity as to both the work to be performed and the manner and method of
performance.
Exercise Date shall mean the date on which the Corporation shall have
received written notice of the Option exercise.
Fair Market Value per share of Class A Ordinary Shares on any relevant date
shall be determined in accordance with the following provisions:
(a) If the Class A Ordinary Shares are at the time traded on the
Nasdaq National Market, then the Fair Market Value shall be the closing
selling price per share of Class A Ordinary Shares on the date in question,
as such price is reported by the National Association of Securities Dealers
on the Nasdaq National Market. If there is no closing selling price for the
Class A Ordinary Shares on the date in question, then the Fair Market Value
shall be the closing selling price on the last preceding date for which
such quotation exists.
(b) If the Class A Ordinary Shares are at the time listed on any Share
Exchange, then the Fair Market Value shall be the closing selling price per
share of Class A Ordinary Shares on the date in question on the Share
Exchange determined by the Board to be the primary market for the Class A
Ordinary Shares, as such price is officially quoted in the composite tape
of transactions on such exchange. If there is no closing selling price for
the Class A Ordinary Shares on the date in question, then the Fair Market
Value shall be the closing selling price on the last preceding date for
which such quotation exists.
(c) If the Class A Ordinary Shares are at the time neither listed on
any Share Exchange nor traded on the Nasdaq National Market, then the Fair
Market Value shall be determined by the Board after taking into account
such factors as the Board shall deem appropriate.
Incentive Option shall mean an Option which satisfies the requirements of
Code Section 422.
Involuntary Termination shall mean the termination of the Service of any
individual which occurs by reason of:
(a) such individual's involuntary dismissal or discharge by the
Corporation for reasons other than Misconduct, or
(b) such individual's voluntary resignation following (i) a change in
his or her position with the Corporation which materially reduces his or
her level of
<PAGE>
responsibility, (ii) a reduction in his or her level of compensation (including
base salary, fringe benefits and target bonuses under any corporate-performance
based bonus or incentive programs) by more than fifteen percent (15%) or (iii) a
relocation of such individual's place of employment by more than fifty (50)
miles, provided and only if such change, reduction or relocation is effected
without the individual's consent.
1934 Act shall mean the Securities Exchange Act of 1934, as amended.
Non-Statutory Option shall mean an Option not intended to satisfy the
requirements of Code Section 422.
Option Grant Program shall mean the Option grant program in effect under
the Plan.
Outside Director shall mean a Director who either (i) is not a current
employee of the Corporation 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 Corporation or a "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 Corporation 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.
Parent shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, share possessing fifty percent (50%) or more of the total
combined voting power of all classes of share in one of the other corporations
in such chain.
Participant shall mean any person to whom a Share Award is granted under
the Plan.
Plan shall mean the Corporation's 1998 Share Option/Share Issuance Plan, as
set forth in this document.
Service shall mean the provision of services to the Corporation (or any
Parent or Subsidiary) by a person in the capacity of an Employee, a non-employee
member of the board of directors or a consultant or independent advisor, except
to the extent otherwise specifically provided in the documents evidencing the
Option grant.
Share Exchange shall mean either the American Stock Exchange or the New
York Stock Exchange.
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Share Issuance Agreement shall mean the agreement entered into by the
Corporation and the Participant at the time of issuance of shares of Class A
Ordinary Shares under the Share Issuance Program.
Share Issuance Program shall mean the share issuance program in effect
under the Plan.
Subsidiary shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, shares possessing fifty percent (50%) or more of the
total combined voting power of all classes of shares in one of the other
corporations in such chain.
10% Shareholder shall mean the owner of shares (as determined under Code
Section 424(d)) possessing more than ten percent (10%) of the total combined
voting power of all classes of shares of the Corporation (or any Parent or
Subsidiary).