MACROVISION CORPORATION
1996 DIRECTORS STOCK OPTION PLAN
As Amended and Restated by the Board of Directors on
June 16, 2000, and Amended on February 16, 2001
1. Purpose. The purpose of the Macrovision Corporation 1996 Directors
Stock Option Plan (the "Plan") is to grant to non-employee members of the
Company's Board of Directors ("Outside Directors") of Macrovision Corporation, a
Delaware corporation (the "Company") the opportunity to acquire Common Stock of
the Company, thereby encouraging such persons to accept or continue their
service on the Company's Board of Directors; to align the interests of such
persons with those of the Company's stockholders through stock ownership; and to
furnish such persons an additional incentive to improve operations and increase
profits of the Company.
To accomplish the foregoing objectives, this Plan provides a means
whereby Outside Directors may receive options to purchase Common Stock. Options
granted under this Plan will be nonstatutory (nonqualified) stock options.
2. Administration. The Plan shall be administered by the Company's Board
of Directors (the "Administrator"), which shall have the power and authority to
grant stock options consistent with the terms of the Plan, including the power
and authority:
(a) to determine the terms and conditions of the stock option
agreements entered into between the Company and any Outside Director;
(b) to interpret the Plan;
(c) to modify or amend any such option; and
(d) to make all determinations necessary or advisable for the
administration of the Plan.
3. Eligibility; Number.
(a) Each Outside Director who first becomes a member of the
Company's Board of Directors after the effective date of the Registration
Statement on Form SB-2 for the initial public offering of the Company's Common
Stock (the "IPO Date") shall be granted options to purchase shares of the
Company's Common Stock effective as of the date he or she first becomes a member
of the Company's Board of Directors (the "Initial Grant Date"). On and after
April 23, 2000, the number of shares of the Company's Common Stock subject to
options granted to each such Outside Director on his or her Initial Grant Date
shall be forty thousand (40,000) shares.
(b) Each Outside Director who first becomes a member of the
Company's Board of Directors after the IPO Date shall be granted options to
purchase additional shares of the Company's Common Stock annually on each
successive anniversary of the Initial Grant Date commencing on the one (1) year
anniversary of the Initial Grant Date, provided that such Outside Director
continues to serve on the Company's Board of Directors on such dates. Each
Outside Director who is serving as a member of the Company's Board of Directors
on the IPO Date will be granted an option to purchase shares of the Company's
Common Stock annually on each successive anniversary
of the IPO Date commencing on the one (1) year anniversary of the IPO Date,
provided that such Outside Director continues to serve on the Company's Board of
Directors on such dates. Each employee member of the Company's Board of
Directors who becomes an Outside Director as a result of ceasing to be an
employee of the Company will be granted an option to purchase shares of the
Company's Common Stock annually on each successive anniversary of the IPO Date
commencing on the first anniversary of the IPO Date on which such individual
serves as an Outside Director, provided that such individual continues to serve
as an Outside Director on the Company's Board of Directors on such dates, but
such an individual will not receive any initial grant of an option to purchase
shares of the Company's Common Stock under Subsection 3(a) above. On and after
February 16, 2001, the number of shares of the Company's Common Stock subject to
options granted to each Outside Director annually under this Subsection 3(b)
shall be fifteen thousand (15,000) shares.
4. Exercise Price. The exercise price of each option to purchase a share
of the Company's Common Stock shall be the fair market value of a share of the
Company's Common Stock on the date on which such option is granted. For all
purposes of this Plan, the fair market value of the Company's Common Stock on
any particular date shall be the closing price on the trading day next preceding
that date on the principal securities exchange on which the Company's Common
Stock is listed, or, if such Common Stock is not then listed on any securities
exchange, then the fair market value of the Common Stock on such date shall be
the closing price as reported by the National Association of Securities Dealers,
Inc. Automated Quotation System ("NASDAQ") on the trading day next preceding
such date. In the event that the Company's Common Stock is neither listed on a
securities exchange nor quoted by NASDAQ, then the Administrator shall determine
the fair market value of the Company's Common Stock on such date.
5. Common Stock Subject to Plan.
(a) As of June 16, 2000, there shall be reserved for issue upon the
exercise of options granted under the Plan, including unexercised options
outstanding on such date, three hundred nineteen thousand thirty-six (319,036)
shares of Common Stock. If an option granted under the Plan shall expire or
terminate for any reason without having been exercised in full, the unpurchased
shares subject thereto shall again be available for the purposes of the Plan.
(b) Notwithstanding any other provisions of this Plan, the aggregate
number of shares of Common Stock subject to outstanding options granted under
this Plan, plus the aggregate number of shares issued upon the exercise of all
options granted under this Plan, shall never be permitted to exceed the number
of shares specified in the first sentence of Subsection 5(a) above.
6. Terms of Options. Each option granted under the Plan shall be evidenced
by a nonstatutory stock option agreement between the individual to whom the
option is granted (the "optionee") and the Company. Each such agreement shall
designate the option thereby granted as a nonstatutory stock option. Each such
agreement shall be subject to the terms and conditions set forth in this Section
6, and to such other terms and conditions not inconsistent herewith as the
Administrator may deem appropriate in each case. All options granted under this
Plan shall be subject to the following terms and conditions:
(a) Term of Options. The period or periods within which an option
may be exercised shall be determined by the Administrator at the time the option
is granted, but in no event shall such period extend beyond ten (10) years from
the date the option is granted.
(b) Method of Payment for Common Stock. Payment for stock purchased
upon any exercise of an option granted under this Plan shall be made in full
concurrently with such exercise by any one of the following methods: (i) in
cash; (ii) if and to the extent the instrument evidencing the option so provides
and if the Company is not then prohibited from purchasing or acquiring shares of
such stock, with shares of the same class of stock as are subject to the option
that have been held by the optionee for the requisite period necessary to avoid
a charge to the Company's earnings for financial reporting purposes, delivered
in lieu of cash, with the shares so delivered to be valued on the basis of the
fair market value of the stock (determined in a manner specified in the
instrument evidencing the option) on the date of exercise; (iii) through a "same
day sale" commitment from the optionee and a broker-dealer that is a member of
the National Association of Securities Dealers (the "NASD Dealer") whereby the
optionee irrevocably elects to exercise the option and to sell a portion of the
shares so purchased to pay for the exercise price, and whereby the NASD Dealer
irrevocably commits upon receipt of such shares to forward the exercise price
directly to the Company; (iv) through a "margin" commitment from the optionee
and a NASD Dealer whereby the optionee irrevocably elects to exercise the option
and to pledge the shares so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the amount of the exercise price ,
and whereby the NASD Dealer irrevocably commits upon receipt of such shares to
forward the exercise price directly to the Company; or (v) any combination of
the foregoing.
(c) Vesting. Options granted under this Plan on or before April 22,
1999, shall become first exercisable ratably over a four (4) year period such
that each option shall become first exercisable as to one forty-eighth (1/48) of
the option shares on the last day of each month, beginning with the first full
month following the date of grant, provided that the optionee continues to serve
on the Company's Board of Directors on such dates. Initial options granted under
Subsection 3(a) of this Plan on or after April 23, 1999, and annual options
granted under Subsection 3(b) of this Plan on or after April 23, 1999, but prior
to April 23, 2000, shall become first exercisable ratably over a three (3) year
period such that each option shall become first exercisable as to one
thirty-sixth (1/36) of the option shares on the last day of each month,
beginning with the first full month following the date of grant, provided that
the optionee continues to serve on the Company's Board of Directors on such
dates. Annual options granted under Subsection 3(b) of this Plan on or after
April 23, 2000, shall become first exercisable ratably over a one (1) year
period such that each option shall become first exercisable as to one twelfth
(1/12) of the option shares on the last day of each month, beginning with the
first full month following the date of grant, provided that the optionee
continues to serve on the Company's Board of Directors on such dates.
Notwithstanding the foregoing, all options granted to an optionee under this
Plan will become exercisable immediately upon the optionee's death or disability
while serving on the Company's Board of Directors.
(d) Death; Disability; Resignation. In the event of an optionee's
death or disability while serving on the Company's Board of Directors, all
options granted to that optionee under this Plan may be exercised by the
optionee or the optionee's estate for a period of one (1) year after the date on
which the optionee ceases to serve on the Company's Board and will terminate if
not exercised during such period, subject to termination on the expiration of
the stated term of the option, if earlier. If an optionee resigns from the
Company's Board of Directors or declines to stand for reelection, options that
have become exercisable through the last date on which the optionee serves on
the Company's Board may be exercised for a period of three (3) months thereafter
and will terminate if not exercised during such period, subject to termination
on the expiration of the stated term of the option, if earlier. If an optionee
is removed from the Board by action of the Company's Stockholders or Board of
Directors, options that have become exercisable through the date of such removal
may be exercised for a period of one (1) week thereafter and will terminate if
not exercised during such period, subject to termination on the expiration of
the stated term of the option, if earlier. The "optionee's estate" shall mean
the duly authorized conservator or guardian of the estate of the optionee or the
executor of the optionee's last will or the duly authorized administrator or
special administrator of the optionee's probate estate or any other legal
representative of the optionee's estate duly appointed as a result of
the optionee's death or incapacity or any person who acquires the right to
exercise this option by reason of the optionee's death under the optionee's will
or the laws of intestate succession.
(e) Withholding and Employment Taxes. At the time of exercise of an
option, the optionee shall remit to the Company in cash the amount of any and
all applicable federal and state withholding and employment taxes.
7. Stock Issuance and Rights as Stockholder. Notwithstanding any other
provisions of the Plan, no optionee shall have any of the rights of a
stockholder (including the right to vote and receive dividends) of the Company,
by reason of the provisions of this Plan or any action taken hereunder, until
the date such optionee shall both have paid the exercise price for the Common
Stock and shall have been issued (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company) the
stock certificate evidencing such shares.
8. Non-Transferability of Options. No option shall be transferable by the
optionee otherwise than by will or by the laws of descent and distribution and
all options shall be exercisable, during the optionee's lifetime, only by the
optionee. Notwithstanding the foregoing, the Administrator may provide in any
option agreement that the optionee may transfer, without consideration for the
transfer, such option to members of his immediate family, to trusts for the
benefit of such family members, to partnerships in which such family members are
the only partners, or to charitable organizations, provided that the transferee
agrees in writing with the Company to be bound by all of the terms and
conditions of the Plan and the applicable option agreement.
9. Adjustments Upon Changes in Capitalization or Merger.
(a) Subject to any required action by the Company's stockholders,
the number of shares of Common Stock covered by this Plan as provided in Section
5, the number of shares covered by each outstanding option granted hereunder and
the exercise price thereof shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a split,
reverse split, subdivision or consolidation of such shares or the payment of a
stock dividend (but only on the Common Stock) or any other increase or decrease
in the number of such outstanding shares of Common Stock effected without the
receipt of consideration by the Company; provided, however, that the conversion
of any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." The number of shares of Common
Stock, as provided in Section 3, covered by options to be granted after the date
of any event described in this Subsection 9(a) shall not be adjusted as a result
of such event, unless the Board determines that it is appropriate to make such
an adjustment and amends the Plan accordingly.
(b) In the event of (i) a dissolution or liquidation of the Company;
(ii) a merger or consolidation in which the Company is the not the surviving
corporation (other than a merger or consolidation with a wholly-owned
subsidiary, a reincorporation of the Company in a different jurisdiction, or
other transaction in which there is no substantial change in the stockholders of
the Company or their relative stock holdings and the options granted under this
Plan are assumed, converted or replaced by the successor corporation, which
assumption will be binding on all optionees); (iii) a merger in which the
Company is the surviving corporation but after which the stockholders of the
Company (other than any stockholder which merges (or which owns or controls
another corporation which merges) with the Company in such merger) cease to own
their shares or other equity interests in the Company; (iv) the sale of
substantially all of the assets of the Company; or (v) any other transaction
which qualifies as a "corporate transaction" under Section 424(a) of the
Internal Revenue Code of 1986, as amended, wherein the stockholders of the
Company give up all of their equity interest in the Company (except for the
acquisition, sale or transfer of all or substantially all of the outstanding
shares of the Company from or by the stockholders of the Company), any and all
outstanding options under this Plan shall become fully exercisable,
notwithstanding any other provision of this Plan and without regard to any
vesting provisions contained in the options, for a reasonable period of time
prior to the consummation of such event. Upon any such event, the successor
corporation (if any) may assume, convert or replace any outstanding options that
are not exercised prior to the consummation of the event or may substitute
equivalent options or provide substantially similar consideration to the
optionees as was provided to the stockholders (after taking into account the
existing provisions of the option grants). In the event such successor
corporation (if any) does not assume or substitute options, as provided above,
upon an event described in this Subsection 9(b), such options will terminate on
the consummation of such event at such time and on such conditions as the
Company's Board of Directors shall determine.
(c) To the extent that any adjustments described in this Section 9
relate to stock or securities of the Company, such adjustments shall be made by
the Company's Board of Directors, whose determination in that respect shall be
final, binding and conclusive.
(d) Except as expressly provided in this Section 9, no optionee
shall have any rights by reason of any subdivision or consolidation of shares of
the capital stock of any class or the payment of any stock dividend or any other
increase or decrease in the number of shares of any class or by reason of any
dissolution, liquidation, merger or consolidation or spin-off of assets or stock
of another corporation, and any issue by the Company of shares of stock of any
class or of 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 price of shares subject to any option granted hereunder.
(e) The grant of an option pursuant to this 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 or to merge or consolidate or to dissolve, liquidate, sell or transfer
all or any part of its business or assets.
10. Securities Law Requirements.
(a) The Administrator may require an individual as a condition of
the grant and of the exercise of an option, to represent and establish to the
satisfaction of the Administrator that all shares of Common Stock to be acquired
upon the exercise of such option will be acquired for investment and not for
resale. The Administrator shall cause such legends to be placed on certificates
evidencing shares of Common Stock issued upon exercise of an option as, in the
opinion of the Company's counsel, may be required by federal and applicable
state securities laws.
(b) No shares of Common Stock shall be issued upon the exercise of
any option unless and until counsel for the Company determines that: (i) the
Company and the optionee have satisfied all applicable requirements under the
Securities Act of 1933, as amended (the "Securities Act") and the Exchange Act;
(ii) any applicable listing requirement of any stock exchange on which the
Company's Common Stock is listed has been satisfied; and (iii) all other
applicable provisions of state and federal law have been satisfied.
11. Financial Assistance. The Company shall have the authority under this
Plan to assist any Outside Director to whom an option is granted hereunder in
the payment of the purchase price payable on exercise of that option, by lending
the amount of such purchase price to such Outside Director on such terms and at
such rates of interest and upon such security as shall have been authorized by
or under authority of the Company's Board of Directors.
12. Amendment. The Company's Board of Directors may terminate the Plan or
amend the Plan from time to time in such respects as the Board may deem
advisable.
13. Termination. The Plan shall terminate automatically on December 1,
2006, and may be terminated at any earlier date by the Company's Board of
Directors. No option shall be granted hereunder after termination of the Plan,
but such termination shall not affect the validity of any option then
outstanding.
14. Time of Granting Options. The date of grant of an option hereunder
shall, for all purposes, be the date on which the Administrator makes the
determination granting such option.
15. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of shares of its Common
Stock as shall be sufficient to satisfy the requirements of the Plan.
16. Effective Date. This Plan was adopted by the Company's Board of
Directors on December 3, 1996, and was approved by the stockholders of the
Company on February 25, 1997. The Plan was most recently restated by the
Company's Board of Directors on June 16, 2000, which restatement was approved by
the stockholders of the Company on August 24, 2000, and subsequently amended by
the Company's Board of Directors on February 16, 2001. However, no options shall
be granted under the Plan prior to the IPO Date.
1996 Directors Stock Option Plan - Macrovision Corp.
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