{"id":38258,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/1996-stock-option-plan-network-computer-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"1996-stock-option-plan-network-computer-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/1996-stock-option-plan-network-computer-inc.html","title":{"rendered":"1996 Stock Option Plan &#8211; Network Computer Inc."},"content":{"rendered":"<pre>\n                             NETWORK COMPUTER, INC.\n\n                             1996 STOCK OPTION PLAN\n                     (As amended through February 11, 1999)\n\n      1. Purposes of the Plan. The purposes of this 1996 Stock Option Plan are\nto attract and retain the best available personnel for positions of substantial\nresponsibility, to provide additional incentive to Employees and Consultants of\nthe Company and its Subsidiaries and to promote the success of the Company's\nbusiness. Options granted under the Plan may be incentive stock options (as\ndefined under Section 422 of the Code) or nonqualified stock options, as\ndetermined by the Administrator at the time of grant of an option and subject to\nthe applicable provisions of Section 422 of the Code, as amended, and the\nregulations promulgated thereunder.\n\n      2. Definitions. As used herein, the following definitions shall apply:\n\n            (a) 'Administrator' means the Board or any of its Committees\nappointed pursuant to Section 4 of the Plan.\n\n            (b) 'Board' means the Board of Directors of the Company.\n\n            (c) 'Code' means the Internal Revenue Code of 1986, as amended.\n\n            (d) 'Committee' means the Committee appointed by the Board of\nDirectors in accordance with Section 4 of the Plan.\n\n            (e) 'Common Stock' means the Common Stock of the Company.\n\n            (f) 'Company' means Network Computer, Inc., a Delaware corporation.\n\n            (g) 'Consultant' means any person, including an advisor, who is\nengaged by the Company or any Parent or Subsidiary to render services and is\ncompensated for such services, and any director of the Company whether\ncompensated for such services or not, provided that if and in the event the\nCompany registers any class of any equity security pursuant to the Exchange Act,\nthe term Consultant shall thereafter not include directors who are not\ncompensated for their services or are paid only a director's fee by the Company.\n\n            (h) 'Continuous Status as an Employee or Consultant' means the\nabsence of any interruption or termination of service as an Employee or\nConsultant. Continuous Status as an Employee or Consultant shall not be\nconsidered interrupted in the case of: (i) sick leave; (ii) military leave;\n(iii) any other leave of absence approved by the Administrator, provided that\nsuch leave is for a period of not more than ninety (90) days, unless\nreemployment upon the expiration of such leave is guaranteed by contract or\nstatute, or unless provided otherwise pursuant to Company policy adopted from\ntime to time; or (iv) in the case of transfers between locations of the Company\nor between the Company, its Subsidiaries or their respective successors. For\npurposes of this Plan, a change in status from an Employee to a Consultant or\n\n\nfrom a Consultant to an Employee will not constitute an interruption of\nContinuous Status as an Employee or Consultant.\n\n            (i) 'Employee' means any person, including officers and directors,\nemployed by the Company or any Parent or Subsidiary of the Company, with the\nstatus of employment determined based upon such minimum number of hours or\nperiods worked as shall be determined by the Administrator in its discretion,\nsubject to any requirements of the Code. The payment by the Company of a\ndirector's fee to a Director shall not be sufficient to constitute 'employment'\nof such Director by the Company.\n\n            (j) 'Exchange Act' means the Securities Exchange Act of 1934, as\namended.\n\n            (k) 'Fair Market Value' means, as of any date, the fair market value\nof Common Stock determined as follows:\n\n                  (i) If the Common Stock is listed on any established stock\nexchange or a national market system including without limitation the National\nMarket of the National Association of Securities Dealers, Inc. Automated\nQuotation ('Nasdaq') System, its Fair Market Value shall be the closing sales\nprice for such stock (or the closing bid, if no sales were reported), as quoted\non such system or exchange, or the exchange with the greatest volume of trading\nin Common Stock for the last market trading day prior to the time of\ndetermination, as reported in The Wall Street Journal or such other source as\nthe Administrator deems reliable;\n\n                  (ii) If the Common Stock is quoted on the Nasdaq System (but\nnot on the National Market thereof) or regularly quoted by a recognized\nsecurities dealer but selling prices are not reported, its Fair Market Value\nshall be the mean between the high bid and low asked prices for the Common Stock\nfor the last market trading day prior to the time of determination, as reported\nin The Wall Street Journal or such other source as the Administrator deems\nreliable; or\n\n                  (iii) In the absence of an established market for the Common\nStock, the Fair Market Value thereof shall be determined in good faith by the\nAdministrator at the Administrator's discretion. In making any such\ndetermination, the Administrator may elect, but shall not be obligated, to\nengage an appraiser or investment banking firm to make the determination of Fair\nMarket Value and such determination shall be conclusive and binding for all\npurposes under the Plan.\n\n            (1) 'Incentive Stock Option' or 'ISO' means an Option intended to\nqualify as an incentive stock option within the meaning of Section 422 of the\nCode, as designated in the applicable written option agreement.\n\n            (m) 'Nonqualified Stock Option' means an Option not intended to\nqualify as an Incentive Stock Option, as designated in the applicable written\noption agreement.\n\n            (n) 'Option' means a stock option granted pursuant to the Plan.\n\n            (o) 'Optioned Stock' means the Common Stock subject to an Option.\n\n\n                                       2\n\n\n            (p) 'Optionee' means an Employee or Consultant who receives an\nOption.\n\n            (q) 'Parent' means a 'parent corporation,' whether now or hereafter\nexisting, as defined in Section 424(e) of the Code, or any successor provision.\n\n            (r) 'Plan' means this 1996 Stock Option Plan.\n\n            (s) 'Reporting Person' means an officer, director, or greater than\nten percent shareholder of the Company within the meaning of Rule 16a-2 under\nthe Exchange Act, who is required to file reports pursuant to Rule 16a-3 under\nthe Exchange Act.\n\n            (t) 'Rule 16b-3' means Rule 16b-3 promulgated under the Exchange\nAct, as the same may be amended from time to time, or any successor provision.\n\n            (u) 'Share' means a share of the Common Stock, as adjusted in\naccordance with Section 11 of the Plan.\n\n            (v) 'Stock Exchange' means any stock exchange or consolidated stock\nprice reporting system on which prices for the Common Stock are quoted at any\ngiven time.\n\n            (w) 'Subsidiary' means a 'subsidiary corporation,' whether now or\nhereafter existing, as defined in Section 424(f) of the Code, or any successor\nprovision.\n\n      3. Stock Subject to the Plan. Subject to the provisions of Section 11 of\nthe Plan, the maximum aggregate number of Shares that may be optioned and sold\nunder the Plan is thirty-five million (35,000,000)(1) shares of Common Stock.\nThe Shares may be authorized, but unissued, or reacquired Common Stock. If an\nOption should expire or become unexercisable for any reason without having been\nexercised in full, the unpurchased Shares that were subject thereto shall,\nunless the Plan shall have been terminated, become available for future grant\nunder the Plan. In addition, any Shares of Common Stock which are retained by\nthe Company upon exercise of an Option in order to satisfy the exercise or\npurchase price for such Option or any withholding taxes due with respect to such\nexercise shall be treated as not issued and shall continue to be available under\nthe Plan.\n\n      4. Administration of the Plan.\n\n            (a) Initial Plan Procedure. Prior to the date, if any, upon which\nthe Company becomes subject to the Exchange Act, the Plan shall be administered\nby the Board or a committee appointed by the Board.\n\n----------\n(1) The Board approved a 5,000,000-share increase on October 15, 1998 to\nincrease the maximum aggregate number of Shares authorized from 15,000,000 to\n20,000,000 Shares. The Board approved a 15,000,000-share increase on February\n11, 1999 to increase the maximum aggregate number of Shares authorized from\n20,000,000 to 35,000,000 Shares.\n\n\n                                       3\n\n\n            (b) Plan Procedure After the Date, if any, Upon Which the Company\nBecomes Subject to the Exchange Act.\n\n                  (i) Multiple Administrative Bodies. If permitted by Rule\n16b-3, grants under the Plan may be made by different bodies with respect to\ndirectors, non-director officers and Employees or Consultants who are not\nReporting Persons.\n\n                  (ii) Administration With Respect to Reporting Persons. With\nrespect to grants of Options to Employees who are Reporting Persons, such grants\nshall be made by (A) the Board if the Board may make grants to Reporting Persons\nunder the Plan in compliance with Rule 16b-3, or B) a committee designated by\nthe Board to make such grants to the Plan, which committee shall be constituted\nin such a manner as to permit grants under the Plan to comply with Rule 16b-3.\nOnce appointed, such committee shall continue to serve in its designated\ncapacity until otherwise directed by the Board. From time to time the Board may\nincrease the size of the committee and appoint additional members thereof,\nremove members (with or without cause) and appoint new members in substitution\ntherefor, fill vacancies, however caused, and remove all members of the\ncommittee and thereafter directly make grants to Reporting Persons under the\nPlan, all to the extent permitted by Rule 16b-3.\n\n                  (iii) Administration With Respect to Consultants and Other\nEmployees. With respect to grants of Options to Employees or Consultants who are\nnot Reporting Persons, the Plan shall be administered by (A) the Board or (B) a\ncommittee designated by the Board, which committee shall be constituted in such\na manner as to satisfy the legal requirements relating to the administration of\nincentive stock option plans, if any, of California corporate and securities\nlaws, of other applicable corporate and securities laws, of the Code and of any\napplicable Stock Exchange (the 'Applicable Laws'). Once appointed, such\nCommittee shall continue to serve in its designated capacity until otherwise\ndirected by the Board. From time to time the Board may increase the size of the\nCommittee and appoint additional members thereof, remove members (with or\nwithout cause) and appoint new members in substitution therefor, fill vacancies,\nhowever caused, and remove all members of the Committee and thereafter directly\nadminister the Plan, all to the extent permitted by the Applicable Laws.\n\n            (c) Powers of the Administrator. Subject to the provisions of the\nPlan and in the case of a Committee, the specific duties delegated by the Board\nto such Committee, and subject to the approval of any relevant authorities,\nincluding the approval, if required, of any Stock Exchange, the Administrator\nshall have the authority, in its discretion:\n\n                  (i) to determine the Fair Market Value of the Common Stock, in\naccordance with Section 2(k) of the Plan;\n\n                  (ii) to select the Consultants and Employees to whom Options\nmay from time to time be granted hereunder;\n\n                  (iii) to determine whether and to what extent Options are\ngranted hereunder;\n\n\n                                       4\n\n\n                  (iv) to determine the number of shares of Common Stock to be\ncovered by each such award granted hereunder;\n\n                  (v) to approve forms of agreement for use under the Plan;\n\n                  (vi) to determine the terms and conditions, not inconsistent\nwith the terms of the Plan, of any award granted hereunder;\n\n                  (vii) to reduce the exercise price of any Option to the then\ncurrent Fair Market Value if the Fair Market Value of the Common Stock covered\nby such Option shall have declined since the date the Option was granted;\n\n                  (viii) to construe and interpret the terms of the Plan and\nawards granted pursuant to the Plan;\n\n                  (ix) in order to fulfill the purposes of the Plan and without\namending the Plan, to modify grants of Options to participants who are foreign\nnationals or employed outside of the United States in order to recognize\ndifferences in local law, tax policies or customs; and\n\n                  (x) to modify, extend or renew outstanding Options and to\nauthorize the grant of new Options in substitution thereof, provided that any\nsuch action may not, without the written consent of the Optionee, impair any\nrights under any Option previously granted.\n\n            (d) Effect of Administrator's Decision. All decisions,\ndeterminations and interpretations of the Administrator shall be final and\nbinding on all holders of Options.\n\n      5. Eligibility.\n\n            (a) Recipients of Grants. Nonqualified Stock Options may be granted\nto Employees and Consultants. Incentive Stock Options may be granted only to\nEmployees. An Employee or Consultant who has been granted an Option may, if he\nor she is otherwise eligible, be granted additional Options.\n\n            (b) Type of Option. Each Option shall be designated in the written\noption agreement as either an Incentive Stock Option or a Nonqualified Stock\nOption. However, notwithstanding such designations, to the extent that the\naggregate Fair Market Value of Shares with respect to which Options designated\nas Incentive Stock Options are exercisable for the first time by any Optionee\nduring any calendar year (under all plans of the Company or any Parent or\nSubsidiary) exceeds $100,000, such excess Options shall be treated as\nNonqualified Stock Options. For purposes of this Section 5(b), Incentive Stock\nOptions shall be taken into account in the order in which they were granted, and\nthe Fair Market Value of the Shares subject to an Incentive Stock Option shall\nbe determined as of the date of the grant of such Option.\n\n            (c) The Plan shall not confer upon any Optionee any right with\nrespect to continuation of employment or consulting relationship with the\nCompany, nor shall it interfere in\n\n\n                                       5\n\n\nany way with such Optionee's right or the Company's right to terminate his or\nher employment or consulting relationship at any time, with or without cause.\n\n      6. Term of Plan. The Plan shall become effective upon the earlier to occur\nof its adoption by the Board of Directors or its approval by the shareholders of\nthe Company as described in Section 18 of the Plan. It shall continue in effect\nfor a term of ten (10) years unless sooner terminated under Section 14 of the\nPlan.\n\n      7. Term of Option. The term of each Option shall be the term stated in the\nOption Agreement; provided, however, that the term shall be no more than ten\n(10) years from the date of grant thereof or such shorter term as may be\nprovided in the Option Agreement or as may be required by local law, and\nprovided further that, in the case of an Option granted to an Optionee who, at\nthe time the Option is granted, owns stock representing more than ten percent\n(10%) of the voting power of all classes of stock of the Company or any Parent\nor Subsidiary, the term of the Option shall be five (5) years from the date of\ngrant thereof or such shorter term as may be provided in the written option\nagreement.\n\n      8. Option Exercise Price and Consideration.\n\n            (a) The per share exercise price for the Shares to be issued\npursuant to exercise of an Option shall be such price as is determined by the\nBoard and set forth in the applicable agreement, but shall be subject to the\nfollowing:\n\n                  (i) In the case of an Incentive Stock Option that is:\n\n                        (A) granted to a U.S. Employee who, at the time of the\ngrant of such Incentive Stock Option, owns stock representing more than ten\npercent (10%) of the voting power of all classes of stock of the Company or any\nParent or Subsidiary, the per Share exercise price shall be no less than 110% of\nthe Fair Market Value per Share on the date of grant.\n\n                        (B) granted to any other U.S. Employee, the per Share\nexercise price shall be no less than 100% of the Fair Market Value per Share on\nthe date of grant.\n\n                  (ii) In the case of a Nonqualified Stock Option that is:\n\n                        (A) granted to a person who, at the time of the grant of\nsuch Option, owns stock representing more than ten percent (10%) of the voting\npower of all classes of stock of the Company or any Parent or Subsidiary, the\nper Share exercise price shall be no less than 110% of the Fair Market Value per\nShare on the date of the grant.\n\n                        (B) granted to any other person, the per Share exercise\nprice shall be no less than 85% of the Fair Market Value per Share on the date\nof grant.\n\n            (b) The consideration to be paid for the Shares to be issued upon\nexercise of an Option, including the method of payment, shall be determined by\nthe Administrator (and, in the case of an Incentive Stock Option, shall be\ndetermined at the time of grant) and may consist entirely of (1) cash, (2)\ncheck, (3) promissory note, (4) other Shares that (x) in the case of Shares\n\n\n                                       6\n\n\nacquired upon exercise of an Option, have been owned by the Optionee for more\nthan six months on the date of surrender or such other period as may be required\nto avoid a charge to the Company's earnings, and (y) have a Fair Market Value on\nthe date of surrender equal to the aggregate exercise price of the Shares as to\nwhich such Option shall be exercised, (5) authorization for the Company to\nretain from the total number of Shares as to which the Option is exercised that\nnumber of Shares having a Fair Market Value on the date of exercise equal to the\nexercise price for the total number of Shares as to which the Option is\nexercised, (6) delivery of a properly executed exercise notice together with\nsuch other documentation as the Administrator and the broker, if applicable,\nshall require to effect an exercise of the Option and delivery to the Company of\nthe sale or loan proceeds required to pay the exercise price and any applicable\nincome or employment taxes, (7) delivery of an irrevocable subscription\nagreement for the Shares that irrevocably obligates the option holder to take\nand pay for the Shares not more than twelve months after the date of delivery of\nthe subscription agreement, (8) any combination of the foregoing methods of\npayment, or (9) such other consideration and method of payment for the issuance\nof Shares to the extent permitted under Applicable Laws. In making its\ndetermination as to the type of consideration to accept, the Administrator shall\nconsider if acceptance of such consideration may be reasonably expected to\nbenefit the Company.\n\n      9. Exercise of Option.\n\n            (a) Procedure for Exercise Rights; as a Shareholder. Any Option\ngranted hereunder shall be exercisable at such times and under such conditions\nas determined by the Administrator and reflected in the written option\nagreement, which may include vesting requirements and\/or performance criteria\nwith respect to the Company and\/or the Optionee; provided that such Option shall\nbecome exercisable not less rapidly than twenty-five percent (25%) at the end of\nthe first year after the date the Option is granted and in equal monthly\nincrements over the next three (3) years.\n\n                  An Option may not be exercised for a fraction of a Share.\n\n                  An Option shall be deemed to be exercised when written notice\nof such exercise has been given to the Company in accordance with the terms of\nthe Option by the person entitled to exercise the Option and the Company has\nreceived full payment for the Shares with respect to which the Option is\nexercised. Full payment may, as authorized by the Board, consist of any\nconsideration and method of payment allowable under Section 8(b) of the Plan.\nUntil the issuance (as evidenced by the appropriate entry on the books of the\nCompany or of a duly authorized transfer agent of the Company) of the stock\ncertificate evidencing such Shares, no right to vote or receive dividends or any\nother rights as a shareholder shall exist with respect to the Optioned Stock,\nnot withstanding the exercise of the Option. The Company shall issue (or cause\nto be issued) such stock certificate promptly upon exercise of the Option. No\nadjustment will be made for a dividend or other right for which the record date\nis prior to the date the stock certificate is issued, except as provided in\nSection 11 of the Plan.\n\n                  Exercise of an Option in any manner shall result in a decrease\nin the number of Shares that thereafter may be available, both for purposes of\nthe Plan and for sale under the Option, by the number of Shares as to which the\nOption is exercised.\n\n\n                                       7\n\n\n            (b) Termination of Employment or Consulting Relationship. Subject to\nSection 9(c), in the event of termination of an Optionee's Continuous Status as\nan Employee or Consultant with the Company, such Optionee may, but only within\nthree (3) months (or such other period of time not less than thirty (30) days as\nis determined by the Administrator, with such determination in the case of an\nIncentive Stock Option being made at the time of grant of the Option and not\nexceeding three (3) months) after the date of such termination (but in no event\nlater than the expiration date of the term of such Option as set forth in the\nOption Agreement), exercise his or her Option to the extent that the Optionee\nwas entitled to exercise it at the date of such termination. To the extent that\nOptionee was not entitled to exercise the Option at the date of such\ntermination, or if Optionee does not exercise such Option to the extent so\nentitled within the time specified herein, the Option shall terminate. No\ntermination shall be deemed to occur and this Section 9(b) shall not apply if\n(i) the Optionee is a Consultant who becomes an Employee; or (ii) the Optionee\nis an Employee who becomes a Consultant.\n\n            (c) Disability of Option.\n\n                  (i) Notwithstanding Section 9(b) above, in the event of\ntermination of an Optionee's Continuous Status as an Employee or Consultant as a\nresult of his or her total and permanent disability (within the meaning of\nSection 22(e)(3) of the Code), Optionee may, but only within twelve (12) months\nfrom the date of such termination (but in no event later than the expiration\ndate of the term of such Option as set forth in the Option Agreement), exercise\nthe Option to the extent otherwise entitled to exercise it at the date of such\ntermination. To the extent that Optionee was not entitled to exercise the Option\nat the date of termination, or if Optionee does not exercise such Option to the\nextent so entitled within the time specified herein, the Option shall terminate.\n\n                  (ii) In the event of termination of an Optionee's Continuous\nStatus as an Employee or Consultant as a result of a disability which does not\nfall within the meaning of total and permanent disability (as set forth in\nSection 22(e)(3) of the Code), Optionee may, but only within six (6) months from\nthe date of such termination (but in no event later than the expiration date of\nthe term of such Option as set forth in the Option Agreement), exercise the\nOption to the extent otherwise entitled to exercise it at the date of such\ntermination. However, to the extent that such Optionee fails to exercise an\nOption which is an ISO (within the meaning of Section 422 of the Code) within\nthree (3) months of the date of such termination, the Option will not qualify\nfor ISO treatment under the Code. To the extent that Optionee was not entitled\nto exercise the Option at the date of termination, or if Optionee does not\nexercise such Option to the extent so entitled within six months (6) from the\ndate of termination, the Option shall terminate.\n\n            (d) Death of Optionee. In the event of the death of an Optionee\nduring the period of Continuous Status as an Employee or Consultant since the\ndate of grant of the Option, or within thirty (30) days following termination of\nOptionee's Continuous Status as an Employee or Consultant, the Option may be\nexercised, at any time within six (6) months following the date of death (but in\nno event later than the expiration date of the term of such Option as set forth\nin the Option Agreement), by Optionee's estate or by a person who acquired the\nright to exercise the Option by bequest or inheritance, but only to the extent\nof the right to exercise that had accrued at the date of death or, if earlier,\nthe date of termination of Optionee' s Continuous Status\n\n\n                                       8\n\n\nas an Employee or Consultant. To the extent that Optionee was not entitled to\nexercise the Option at the date of death or termination, as the case may be, or\nif Optionee does not exercise such Option to the extent so entitled within the\ntime specified herein, the Option shall terminate.\n\n            (e) Rule 16b-3. Options granted to Reporting Persons shall comply\nwith Rule 16b-3 and shall contain such additional conditions or restrictions as\nmay be required thereunder to qualify for the maximum exemption for Plan\ntransactions.\n\n            (f) Buyout Provisions. The Administrator may at any time offer to\nbuy out for a payment in Shares, an Option previously granted, based on such\nterms and conditions as the Administrator shall establish and communicate to the\nOptionee at the time that such offer is made.\n\n      10. Stock Withholding to Satisfy Withholding Tax Obligations. At the\ndiscretion of the Administrator, Optionees may satisfy withholding obligations\nas provided in this paragraph. When an Optionee incurs tax liability in\nconnection with an Option, which tax liability is subject to tax withholding\nunder applicable tax laws, and the Optionee is obligated to pay the Company an\namount required to be withheld under applicable tax laws, the Optionee may\nsatisfy the withholding tax obligation by one or some combination of the\nfollowing methods: (a) by cash payment, or (b) out of Optionee's current\ncompensation, (c) if permitted by the Administrator, in its discretion, by\nsurrendering to the Company Shares that (i) in the case of Shares previously\nacquired from the Company, have been owned by the Optionee for more than six\nmonths on the date of surrender, and (ii) have a fair market value on the date\nof surrender equal to or less than Optionee's marginal tax rate times the\nordinary income recognized, (d) by electing to have the Company withhold from\nthe Shares to be issued upon exercise of the Option, if any, that number of\nShares having a fair market value equal to the amount required to be withheld,\nor (e) as otherwise determined by the Administrator. For this purpose, the fair\nmarket value of the Shares to be withheld shall be determined on the date that\nthe amount of tax to be withheld is to be determined (the 'Tax Date').\n\n            Any surrender by a Reporting Person of previously owned Shares to\nsatisfy tax withholding obligations arising upon exercise of this Option must\ncomply with the applicable provisions of Rule 16b-3 and shall be subject to such\nadditional conditions or restrictions as may be required thereunder to qualify\nfor the maximum exemption from Section 16 of the Exchange Act with respect to\nPlan transactions.\n\n            All elections by an Optionee to have Shares withheld to satisfy tax\nwithholding obligations shall be made in writing in a form acceptable to the\nAdministrator and shall be subject to the following restrictions:\n\n            (a) the election must be made on or prior to the applicable Tax\nDate;\n\n            (b) once made, the election shall be irrevocable as to the\nparticular Shares of the Option as to which the election is made;\n\n            (c) all elections shall be subject to the consent or disapproval of\nthe Administrator;\n\n\n                                       9\n\n\n            (d) if the Optionee is a Reporting Person, the election must comply\nwith the applicable provisions of Rule 16b-3 and shall be subject to such\nadditional conditions or restrictions as may be required thereunder to qualify\nfor the maximum exemption from Section 16 of the Exchange Act with respect to\nPlan transactions.\n\n            In the event the election to have Shares withheld is made by an\nOptionee and the Tax Date is deferred under Section 83 of the Code because no\nelection is filed under Section 83(b) of the Code, the Optionee shall receive\nthe full number of Shares with respect to which the Option is exercised but such\nOptionee shall be unconditionally obligated to tender back to the Company the\nproper number of Shares on the Tax Date.\n\n      11. Adjustments Upon Changes in Capitalization, Merger or Certain Other\nTransactions.\n\n            (a) Changes in Capitalization. Subject to any required action by the\nshareholders of the Company, the number of shares of Common Stock covered by\neach outstanding Option, and the number of shares of Common Stock that have been\nauthorized for issuance under the Plan but as to which no Options have yet been\ngranted or that have been returned to the Plan upon cancellation or expiration\nof an Option, as well as the price per share of Common Stock covered by each\nsuch outstanding Option, shall be proportionately adjusted for any increase or\ndecrease in the number of issued shares of Common Stock resulting from a stock\nsplit, reverse stock split, stock dividend, combination, recapitalization or\nreclassification of the Common Stock, or any other increase or decrease in the\nnumber of issued shares of Common Stock effected without receipt of\nconsideration by the Company; provided, however, that conversion of any\nconvertible securities of the Company shall not be deemed to have been 'effected\nwithout receipt of consideration.' Such adjustment shall be made by the Board,\nwhose determination in that respect shall be final, binding and conclusive.\nExcept as expressly provided herein, no issuance by the Company of shares of\nstock of any class, or securities convertible into shares of stock of any class,\nshall affect, and no adjustment by reason thereof shall be made with respect to,\nthe number or price of shares of Common Stock subject to an Option.\n\n            (b) Dissolution or Liquidation. In the event of the proposed\ndissolution or liquidation of the Company, the Board shall notify the Optionee\nat least fifteen (15) days prior to such proposed action. To the extent it has\nnot been previously exercised, the Option will terminate immediately prior to\nthe consummation of such proposed action.\n\n            (c) Merger or Sale of Assets. In the event of a proposed sale of all\nor substantially all of the Company's assets or a merger of the Company with or\ninto another corporation where the successor corporation issues its securities\nto the Company's shareholders, each outstanding Option shall be assumed or an\nequivalent option or right shall be substituted by such successor corporation or\na parent or subsidiary of such successor corporation, unless the successor\ncorporation does not agree to assume the Option or to substitute an equivalent\noption or right, in which case such Option shall terminate upon the consummation\nof the merger or sale of assets.\n\n            (d) Certain Distributions. In the event of any distribution to the\nCompany's shareholders of securities of any other entity or other assets (other\nthan dividends payable in cash\n\n\n                                       10\n\n\nor stock of the Company) without receipt of consideration by the Company, the\nAdministrator may, in its discretion, appropriately adjust the price per share\nof Common Stock covered by each outstanding Option to reflect the effect of such\ndistribution.\n\n      12. Non-Transferability of Options. Options may not be sold, pledged,\nassigned, hypothecated, transferred, or disposed of in any manner other than by\nwill or by the laws of descent or distribution and may be exercised or purchased\nduring the lifetime of the Optionee only by the Optionee.\n\n      13. Time of Granting Options. The date of grant of an Option shall, for\nall purposes, be the date on which the Administrator makes the determination\ngranting such Option, or such other date as is determined by the Board. Notice\nof the determination shall be given to each Employee or Consultant to whom an\nOption is so granted within a reasonable time after the date of such grant.\n\n      14. Amendment and Termination of the Plan.\n\n            (a) Authority to Amend or Terminate. The Board may at any time\namend, alter, suspend or discontinue the Plan, but no amendment, alteration,\nsuspension or discontinuation shall be made that would impair the rights of any\nOptionee under any grant theretofore made, without his or her consent. In\naddition, to the extent necessary and desirable to comply with Rule 16b-3 or\nwith Section 422 of the Code (or any other applicable law or regulation,\nincluding the requirements of any Stock Exchange), the Company shall obtain\nshareholder approval of any Plan amendment in such a manner and to such a degree\nas required.\n\n            (b) Effect of Amendment or Termination. No amendment or termination\nof the Plan shall adversely affect Options already granted, unless mutually\nagreed otherwise between the Optionee and the Board, which agreement must be in\nwriting and signed by the Optionee and the Company.\n\n      15. Conditions Upon Issuance of Shares. Shares shall not be issued\npursuant to the exercise of an Option unless the exercise of such Option and the\nissuance and delivery of such Shares pursuant thereto shall comply with all\nrelevant provisions of law, including, without limitation, the Securities Act of\n1933, as amended, the Exchange Act, the roles and regulations promulgated\nthereunder, and the requirements of any Stock Exchange. As a condition to the\nexercise of an Option, the Company may require the person exercising such Option\nto represent and warrant at the time of any such exercise that the Shares are\nbeing purchased only for investment and without any present intention to sell or\ndistribute such Shares if, in the opinion of counsel for the Company, such a\nrepresentation is required by law.\n\n      16. Reservation of Shares. The Company, during the term of this Plan, will\nat all times reserve and keep available such number of Shares as shall be\nsufficient to satisfy the requirements of the Plan. The inability of the Company\nto obtain authority from any regulatory body having jurisdiction, which\nauthority is deemed by the Company's counsel to be necessary to the lawful\nissuance and sale of any Shares hereunder, shall relieve the Company of any\nliability\n\n\n                                       11\n\n\nin respect of the failure to issue or sell such Shares as to which such\nrequisite authority shall not have been obtained.\n\n      17. Agreements. Options shall be evidenced by written agreements in such\nform as the Administrator shall approve from time to time.\n\n      18. Shareholder Approval. Continuance of the Plan shall be subject to\napproval by the shareholders of the Company within twelve (12) months before or\nafter the date the Plan is adopted. Such shareholder approval shall be obtained\nin the degree and manner required under applicable state and federal law and the\nroles of any Stock Exchange upon which the Common Stock is listed. All Options\nissued under the Plan shall become void in the event such approval is not\nobtained.\n\n      19. Information to Optionees and Purchasers. The Company shall provide\nfinancial statements at least annually to each Optionee during the period such\nOptionee has one or more Options outstanding. The Company shall not be required\nto provide such information if the issuance of Options under the Plan is limited\nto key employees whose duties in connection with the Company assure their access\nto equivalent information.\n\n\n                                       12\n\n\n                       WRITTEN CONSENT OF THE STOCKHOLDERS\n                  OF NETWORK COMPUTER, INC. ON OCTOBER 15, 1998\n\n            Pursuant to Section 228 of the Delaware General Corporation Law and\nthe Bylaws of Network Computer, Inc. (the 'Corporation'), the undersigned\nstockholders of the Corporation do hereby, pursuant to this Written Consent,\nvote all shares of the Corporation's outstanding voting stock held of record by\nthem FOR the adoption and approval of the following resolution, without a formal\nmeeting and without prior notice:\n\n      WHEREAS, the Board of Directors of the Corporation (the 'Board')\n      previously adopted the Corporation's 1996 Stock Option Plan (the 'Plan')\n      as an equity incentive program under which employees of the Corporation or\n      its subsidiary corporations (including officers), non-employee members of\n      the Board, and consultants to the Corporation or its subsidiary\n      corporations may be offered the opportunity to acquire shares of the\n      Corporation's Common Stock; and\n\n      WHEREAS, the Board, subject to the approval of the stockholders of the\n      Corporation, has amended the Plan to increase the maximum number of shares\n      of Common Stock authorized for issuance over the term of the Plan by\n      5,000,000 shares from 15,000,000 to 20,000,000 shares.\n\n      NOW, THEREFORE, BE IT RESOLVED that the amendment to the Plan, in\n      substantially the form approved by the Board and attached hereto as\n      Exhibit A, be, and it hereby is, approved in its entirety.\n\n            This Written Consent may be executed in one or more counterparts,\neach of which shall be deemed an original but all of which together shall\nconstitute one and the same written consent.\n\n            IN WITNESS WHEREOF the undersigned stockholders of the Corporation,\nhereby voting the full number of shares of each class of the Corporation's\noutstanding voting stock held of record by them, have executed this Written\nConsent and direct that this Written Consent be filed with the minutes of the\nproceedings of the Corporation's stockholders and that prompt notice of this\naction be given to stockholders of the Corporation who have not executed this\nWritten Consent.\n\n\/s\/ Daniel Cooperman                         Daniel Cooperman\n-----------------------------------------    -----------------------------------\n        (Signature)                                 (Name--PLEASE PRINT)\n\nSenior Vice President, General \n  Counsel &amp; Secretary                                       October 20, 1998\n-----------------------------------------             --------------------------\n         (Title, if applicable)                                (Date)\n\n\n                                                                       Exhibit A\n\n                             NETWORK COMPUTER, INC.\n\n                             1996 STOCK OPTION PLAN\n                      (As amended through October 15, 1998)\n\n      1. Purposes of the Plan. The purposes of this 1996 Stock Option Plan are\nto attract and retain the best available personnel for positions of substantial\nresponsibility, to provide additional incentive to Employees and Consultants of\nthe Company and its Subsidiaries and to promote the success of the Company's\nbusiness. Options granted under the Plan may be incentive stock options (as\ndefined under Section 422 of the Code) or nonqualified stock options, as\ndetermined by the Administrator at the time of grant of an option and subject to\nthe applicable provisions of Section 422 of the Code, as amended, and the\nregulations promulgated thereunder.\n\n      2. Definitions. As used herein, the following definitions shall apply:\n\n            (a) 'Administrator' means the Board or any of its Committees\nappointed pursuant to Section 4 of the Plan.\n\n            (b) 'Board' means the Board of Directors of the Company.\n\n            (c) 'Code' means the Internal Revenue Code of 1986, as amended.\n\n            (d) 'Committee' means the Committee appointed by the Board of\nDirectors in accordance with Section 4 of the Plan.\n\n            (e) 'Common Stock' means the Common Stock of the Company.\n\n            (f) 'Company' means Network Computer, Inc., a Delaware corporation.\n\n            (g) 'Consultant' means any person, including an advisor, who is\nengaged by the Company or any Parent or Subsidiary to render services and is\ncompensated for such services, and any director of the Company whether\ncompensated for such services or not, provided that if and in the event the\nCompany registers any class of any equity security pursuant to the Exchange Act,\nthe term Consultant shall thereafter not include directors who are not\ncompensated for their services or are paid only a director's fee by the Company.\n\n\n            (h) 'Continuous Status as an Employee or Consultant' means the\nabsence of any interruption or termination of service as an Employee or\nConsultant. Continuous Status as an Employee or Consultant shall not be\nconsidered interrupted in the case of: (i) sick leave; (ii) military leave;\n(iii) any other leave of absence approved by the Administrator, provided that\nsuch leave is for a period of not more than ninety (90) days, unless\nreemployment upon the expiration of such leave is guaranteed by contract or\nstatute, or unless provided otherwise pursuant to Company policy adopted from\ntime to time; or (iv) in the case of transfers between locations of the Company\nor between the Company, its Subsidiaries or their respective successors. For\npurposes of this Plan, a change in status from an Employee to a Consultant or\n\n\nfrom a Consultant to an Employee will not constitute an interruption of\nContinuous Status as an Employee or Consultant.\n\n            (i) 'Employee' means any person, including officers and directors,\nemployed by the Company or any Parent or Subsidiary of the Company, with the\nstatus of employment determined based upon such minimum number of hours or\nperiods worked as shall be determined by the Administrator in its discretion,\nsubject to any requirements of the Code. The payment by the Company of a\ndirector's fee to a Director shall not be sufficient to constitute 'employment'\nof such Director by the Company.\n\n            (j) 'Exchange Act' means the Securities Exchange Act of 1934, as\namended.\n\n            (k) 'Fair Market Value' means, as of any date, the fair market value\nof Common Stock determined as follows:\n\n                  (i) If the Common Stock is listed on any established stock\nexchange or a national market system including without limitation the National\nMarket of the National Association of Securities Dealers, Inc. Automated\nQuotation ('Nasdaq') System, its Fair Market Value shall be the closing sales\nprice for such stock (or the closing bid, if no sales were reported), as quoted\non such system or exchange, or the exchange with the greatest volume of trading\nin Common Stock for the last market trading day prior to the time of\ndetermination, as reported in The Wall Street Journal or such other source as\nthe Administrator deems reliable;\n\n                  (ii) If the Common Stock is quoted on the Nasdaq System (but\nnot on the National Market thereof) or regularly quoted by a recognized\nsecurities dealer but selling prices are not reported, its Fair Market Value\nshall be the mean between the high bid and low asked prices for the Common Stock\nfor the last market trading day prior to the time of determination, as reported\nin The Wall Street Journal or such other source as the Administrator deems\nreliable; or\n\n                  (iii) In the absence of an established market for the Common\nStock, the Fair Market Value thereof shall be determined in good faith by the\nAdministrator at the Administrator's discretion. In making any such\ndetermination, the Administrator may elect, but shall not be obligated, to\nengage an appraiser or investment banking firm to make the determination of Fair\nMarket Value and such determination shall be conclusive and binding for all\npurposes under the Plan.\n\n            (1) 'Incentive Stock Option' or 'ISO' means an Option intended to\nqualify as an incentive stock option within the meaning of Section 422 of the\nCode, as designated in the applicable written option agreement.\n\n            (m) 'Nonqualified Stock Option' means an Option not intended to\nqualify as an Incentive Stock Option, as designated in the applicable written\noption agreement.\n\n            (n) 'Option' means a stock option granted pursuant to the Plan.\n\n            (o) 'Optioned Stock' means the Common Stock subject to an Option.\n\n\n                                       2\n\n\n            (p) 'Optionee' means an Employee or Consultant who receives an\nOption.\n\n            (q) 'Parent' means a 'parent corporation,' whether now or hereafter\nexisting, as defined in Section 424(e) of the Code, or any successor provision.\n\n            (r) 'Plan' means this 1996 Stock Option Plan.\n\n            (s) 'Reporting Person' means an officer, director, or greater than\nten percent shareholder of the Company within the meaning of Rule 16a-2 under\nthe Exchange Act, who is required to file reports pursuant to Rule 16a-3 under\nthe Exchange Act.\n\n            (t) 'Rule 16b-3' means Rule 16b-3 promulgated under the Exchange\nAct, as the same may be amended from time to time, or any successor provision.\n\n            (u) 'Share' means a share of the Common Stock, as adjusted in\naccordance with Section 11 of the Plan.\n\n            (v) 'Stock Exchange' means any stock exchange or consolidated stock\nprice reporting system on which prices for the Common Stock are quoted at any\ngiven time.\n\n            (w) 'Subsidiary' means a 'subsidiary corporation,' whether now or\nhereafter existing, as defined in Section 424(f) of the Code, or any successor\nprovision.\n\n      3. Stock Subject to the Plan. Subject to the provisions of Section 11 of\nthe Plan, the maximum aggregate number of Shares that may be optioned and sold\nunder the Plan is twenty million (20,000,000)(l) shares of Common Stock. The\nShares may be authorized, but unissued, or reacquired Common Stock. If an Option\nshould expire or become unexercisable for any reason without having been\nexercised in full, the unpurchased Shares that were subject thereto shall,\nunless the Plan shall have been terminated, become available for future grant\nunder the Plan. In addition, any Shares of Common Stock which are retained by\nthe Company upon exercise of an Option in order to satisfy the exercise or\npurchase price for such Option or any withholding taxes due with respect to such\nexercise shall be treated as not issued and shall continue to be available under\nthe Plan.\n\n      4. Administration of the Plan.\n\n            (a) Initial Plan Procedure. Prior to the date, if any, upon which\nthe Company becomes subject to the Exchange Act, the Plan shall be administered\nby the Board or a committee appointed by the Board.\n\n----------\n(1) The Board approved a 5,000,000-share increase on October 15, 1998 to\nincrease the maximum aggregate number of Shares authorized from 15,000,000 to\n20,000,000 Shares.\n\n\n                                       3\n\n\n            (b) Plan Procedure After the Date if any, Upon Which the Company\nBecomes Subject to the Exchange Act.\n\n                  (i) Multiple Administrative Bodies. If permitted by Rule\n16b-3, grants under the Plan may be made by different bodies with respect to\ndirectors, non-director officers and Employees or Consultants who are not\nReporting Persons.\n\n                  (ii) Administration With Respect to Reporting Persons. With\nrespect to grants of Options to Employees who are Reporting Persons, such grants\nshall be made by (A) the Board if the Board may make grants to Reporting Persons\nunder the Plan in compliance with Rule 16b-3, or (B) a committee designated by\nthe Board to make such grants to the Plan, which committee shall be constituted\nin such a manner as to permit grants under the Plan to comply with Rule 16b-3.\nOnce appointed, such committee shall continue to serve in its designated\ncapacity until otherwise directed by the Board. From time to time the Board may\nincrease the size of the committee and appoint additional members thereof,\nremove members (with or without cause) and appoint new members in substitution\ntherefor, fill vacancies, however caused, and remove all members of the\ncommittee and thereafter directly make grants to Reporting Persons under the\nPlan, all to the extent permitted by Rule 16b-3.\n\n                  (iii) Administration With Respect to Consultants and Other\nEmployees. With respect to grants of Options to Employees or Consultants who are\nnot Reporting Persons, the Plan shall be administered by (A) the Board or (B) a\ncommittee designated by the Board, which committee shall be constituted in such\na manner as to satisfy the legal requirements relating to the administration of\nincentive stock option plans, if any, of California corporate and securities\nlaws, of other applicable corporate and securities laws, of the Code and of any\napplicable Stock Exchange (the 'Applicable Laws'). Once appointed, such\nCommittee shall continue to serve in its designated capacity until otherwise\ndirected by the Board. From time to time the Board may increase the size of the\nCommittee and appoint additional members thereof, remove members (with or\nwithout cause) and appoint new members in substitution therefor, fill vacancies,\nhowever caused, and remove all members of the Committee and thereafter directly\nadminister the Plan, all to the extent permitted by the Applicable Laws.\n\n            (c) Powers of the Administrator. Subject to the provisions of the\nPlan and in the case of a Committee, the specific duties delegated by the Board\nto such Committee, and subject to the approval of any relevant authorities,\nincluding the approval, if required, of any Stock Exchange, the Administrator\nshall have the authority, in its discretion:\n\n                  (i) to determine the Fair Market Value of the Common Stock, in\naccordance with Section 2(k) of the Plan;\n\n                  (ii) to select the Consultants and Employees to whom Options\nmay from time to time be granted hereunder;\n\n                  (iii) to determine whether and to what extent Options are\ngranted hereunder;\n\n\n                                       4\n\n\n                  (iv) to determine the number of shares of Common Stock to be\ncovered by each such award granted hereunder;\n\n                  (v) to approve forms of agreement for use under the Plan;\n\n                  (vi) to determine the terms and conditions, not inconsistent\nwith the terms of the Plan, of any award granted hereunder;\n\n                  (vii) to reduce the exercise price of any Option to the then\ncurrent Fair Market Value if the Fair Market Value of the Common Stock covered\nby such Option shall have declined since the date the Option was granted;\n\n                  (viii) to construe and interpret the terms of the Plan and\nawards granted pursuant to the Plan;\n\n                  (ix) in order to fulfill the purposes of the Plan and without\namending the Plan, to modify grants of Options to participants who are foreign\nnationals or employed outside of the United States in order to recognize\ndifferences in local law, tax policies or customs; and\n\n                  (x) to modify, extend or renew outstanding Options and to\nauthorize the grant of new Options in substitution thereof, provided that any\nsuch action may not, without the written consent of the Optionee, impair any\nrights under any Option previously granted.\n\n            (d) Effect of Administrator's Decision. All decisions,\ndeterminations and interpretations of the Administrator shall be final and\nbinding on all holders of Options.\n\n      5. Eligibility.\n\n            (a) Recipients of Grants. Nonqualified Stock Options may be granted\nto Employees and Consultants. Incentive Stock Options may be granted only to\nEmployees. An Employee or Consultant who has been granted an Option may, if he\nor she is otherwise eligible, be granted additional Options.\n\n            (b) Type of Option. Each Option shall be designated in the written\noption agreement as either an Incentive Stock Option or a Nonqualified Stock\nOption. However, notwithstanding such designations, to the extent that the\naggregate Fair Market Value of Shares with respect to which Options designated\nas Incentive Stock Options are exercisable for the first time by any Optionee\nduring any calendar year (under all plans of the Company or any Parent or\nSubsidiary) exceeds $100,000, such excess Options shall be treated as\nNonqualified Stock Options. For purposes of this Section 5(b), Incentive Stock\nOptions shall be taken into account in the order in which they were granted, and\nthe Fair Market Value of the Shares subject to an Incentive Stock Option shall\nbe determined as of the date of the grant of such Option.\n\n            (c) The Plan shall not confer upon any Optionee any right with\nrespect to continuation of employment or consulting relationship with the\nCompany, nor shall it interfere in\n\n\n                                       5\n\n\nany way with such Optionee's right or the Company's right to terminate his or\nher employment or consulting relationship at any time, with or without cause.\n\n      6. Term of Plan. The Plan shall become effective upon the earlier to occur\nof its adoption by the Board of Directors or its approval by the shareholders of\nthe Company as described in Section 18 of the Plan. It shall continue in effect\nfor a term of ten (10) years unless sooner terminated under Section 14 of the\nPlan.\n\n      7. Term of Option. The term of each Option shall be the term stated in the\nOption Agreement; provided, however, that the term shall be no more than ten\n(10) years from the date of grant thereof or such shorter term as may be\nprovided in the Option Agreement or as may be required by local law, and\nprovided further that, in the case of an Option granted to an Optionee who, at\nthe time the Option is granted, owns stock representing more than ten percent\n(10%) of the voting power of all classes of stock of the Company or any Parent\nor Subsidiary, the term of the Option shall be five (5) years from the date of\ngrant thereof or such shorter term as may be provided in the written option\nagreement.\n\n      8. Option Exercise Price and Consideration.\n\n            (a) The per share exercise price for the Shares to be issued\npursuant to exercise of an Option shall be such price as is determined by the\nBoard and set forth in the applicable agreement, but shall be subject to the\nfollowing'\n\n                  (i) In the case of an Incentive Stock Option that is:\n\n                        (A) granted to a U.S. Employee who, at the time of the\ngrant of such Incentive Stock Option, owns stock representing more than ten\npercent (10%) of the voting power of all classes of stock of the Company or any\nParent or Subsidiary, the per Share exercise price shall be no less than 110% of\nthe Fair Market Value per Share on the date of grant.\n\n                        (B) granted to any other U.S. Employee, the per Share\nexercise price shall be no less than 100% of the Fair Market Value per Share on\nthe date of grant.\n\n                  (ii) In the case of a Nonqualified Stock Option that is:\n\n                        (A) granted to a person who, at the time of the grant of\nsuch Option, owns stock representing more than ten percent (10%) of the voting\npower of all classes of stock of the Company or any Parent or Subsidiary, the\nper Share exercise price shall be no less than 110% of the Fair Market Value per\nShare on the date of the grant.\n\n                        (B) granted to any other person, the per Share exercise\nprice shall be no less than 85% of the Fair Market Value per Share on the date\nof grant.\n\n            (b) The consideration to be paid for the Shares to be issued upon\nexercise of an Option, including the method of payment, shall be determined by\nthe Administrator (and, in the case of an Incentive Stock Option, shall be\ndetermined at the time of grant) and may consist entirely of (1) cash, (2)\ncheck, (3) promissory note, (4) other Shares that (x) in the case of Shares\n\n\n                                       6\n\n\nacquired upon exercise of an Option, have been owned by the Optionee for more\nthan six months on the date of surrender or such other period as may be required\nto avoid a charge to the Company's earnings, and (y) have a Fair Market Value on\nthe date of surrender equal to the aggregate exercise price of the Shares as to\nwhich such Option shall be exercised, (5) authorization for the Company to\nretain from the total number of Shares as to which the Option is exercised that\nnumber of Shares having a Fair Market Value on the date of exercise equal to the\nexercise price for the total number of Shares as to which the Option is\nexercised, (6) delivery of a properly executed exercise notice together with\nsuch other documentation as the Administrator and the broker, if applicable,\nshall require to effect an exercise of the Option and delivery to the Company of\nthe sale or loan proceeds required to pay the exercise price and any applicable\nincome or employment taxes, (7) delivery of an irrevocable subscription\nagreement for the Shares that irrevocably obligates the option holder to take\nand pay for the Shares not more than twelve months after the date of delivery of\nthe subscription agreement, (8) any combination of the foregoing methods of\npayment, or (9) such other consideration and method of payment for the issuance\nof Shares to the extent permitted under Applicable Laws. In making its\ndetermination as to the type of consideration to accept, the Administrator shall\nconsider if acceptance of such consideration may be reasonably expected to\nbenefit the Company.\n\n      9. Exercise of Option.\n\n            (a) Procedure for Exercise; Rights as a Shareholder. Any Option\ngranted hereunder shall be exercisable at such times and under such conditions\nas determined by the Administrator and reflected in the written option\nagreement, which may include vesting requirements and\/or performance criteria\nwith respect to the Company and\/or the Optionee; provided that such Option shall\nbecome exercisable not less rapidly than twenty-five percent (25%) at the end of\nthe first year after the date the Option is granted and in equal monthly\nincrements over the next three (3) years.\n\n                  An Option may not be exercised for a fraction of a Share.\n\n                  An Option shall be deemed to be exercised when written notice\nof such exercise has been given to the Company in accordance with the terms of\nthe Option by the person entitled to exercise the Option and the Company has\nreceived full payment for the Shares with respect to which the Option is\nexercised. Full payment may, as authorized by the Board, consist of any\nconsideration and method of payment allowable under Section 8(b) of the Plan.\nUntil the issuance (as evidenced by the appropriate entry on the books of the\nCompany or of a duly authorized transfer agent of the Company) of the stock\ncertificate evidencing such Shares, no right to vote or receive dividends or any\nother rights as a shareholder shall exist with respect to the Optioned Stock,\nnot withstanding the exercise of the Option. The Company shall issue (or cause\nto be issued) such stock certificate promptly upon exercise of the Option. No\nadjustment will be made for a dividend or other right for which the record date\nis prior to the date the stock certificate is issued, except as provided in\nSection 11 of the Plan.\n\n                  Exercise of an Option in any manner shall result in a decrease\nin the number of Shares that thereafter may be available, both for purposes of\nthe Plan and for sale under the Option, by the number of Shares as to which the\nOption is exercised.\n\n\n                                       7\n\n\n            (b) Termination of Employment or Consulting Relationship. Subject to\nSection 9(c), in the event of termination of an Optionee's Continuous Status as\nan Employee or Consultant with the Company, such Optionee may, but only within\nthree (3) months (or such other period of time not less than thirty (30) days as\nis determined by the Administrator, with such determination in the case of an\nIncentive Stock Option being made at the time of grant of the Option and not\nexceeding three (3) months) after the date of such termination (but in no event\nlater than the expiration date of the term of such Option as set forth in the\nOption Agreement), exercise his or her Option to the extent that the Optionee\nwas entitled to exercise it at the date of such termination. To the extent that\nOptionee was not entitled to exercise the Option at the date of such\ntermination, or if Optionee does not exercise such Option to the extent so\nentitled within the time specified herein, the Option shall terminate. No\ntermination shall be deemed to occur and this Section 9(b) shall not apply if\n(i) the Optionee is a Consultant who becomes an Employee; or (ii) the Optionee\nis an Employee who becomes a Consultant. '\n\n            (c) Disability of Optionee.\n\n                  (i) Notwithstanding Section 9(b) above, in the event of\ntermination of an Optionee's Continuous Status as an Employee or Consultant as a\nresult of his or her total and permanent disability (within the meaning of\nSection 22(e)(3) of the Code), Optionee may, but only within twelve (12) months\nfrom the date of such termination (but in no event later than the expiration\ndate of the term of such Option as set forth in the Option Agreement), exercise\nthe Option to the extent otherwise entitled to exercise it at the date of such\ntermination. To the extent that Optionee was not entitled to exercise the Option\nat the date of termination, or if Optionee does not exercise such Option to the\nextent so entitled within the time specified herein, the Option shall terminate.\n\n                  (ii) In the event of termination of an Optionee's Continuous\nStatus as an Employee or Consultant as a result of a disability which does not\nfall within the meaning of total and permanent disability (as set forth in\nSection 22(e)(3) of the Code), Optionee may, but only within six (6) months from\nthe date of such termination (but in no event later than the expiration date of\nthe term of such Option as set forth in the Option Agreement), exercise the\nOption to the extent otherwise entitled to exercise it at the date of such\ntermination. However, to the extent that such Optionee fails to exercise an\nOption which is an ISO (within the meaning of Section 422 of the Code) within\nthree (3) months of the date of such termination, the Option will not qualify\nfor ISO treatment under the Code. To the extent that Optionee was not entitled\nto exercise the Option at the date of termination, or if Optionee does not\nexercise such Option to the extent so entitled within six months (6) from the\ndate of termination, the Option shall terminate.\n\n            (d) Death of Optionee. In the event of the death of an Optionee\nduring the period of Continuous Status as an Employee or Consultant since the\ndate of grant of the Option, or within thirty (30) days following termination of\nOptionee's Continuous Status as an Employee or Consultant, the Option may be\nexercised, at any time within six (6) months following the date of death (but in\nno event later than the expiration date of the term of such Option as set forth\nin the Option Agreement), by Optionee's estate or by a person who acquired the\nright to exercise the Option by bequest or inheritance, but only to the extent\nof the right to exercise that had accrued at the date of death or, if earlier,\nthe date of termination of Optionee's Continuous Status\n\n\n                                       8\n\n\nas an Employee or Consultant. To the extent that Optionee was not entitled to\nexercise the Option at the date of death or termination, as the case may be, or\nif Optionee does not exercise such Option to the extent so entitled within the\ntime specified herein, the Option shall terminate.\n\n            (e) Rule 16b-3. Options granted to Reporting Persons shall comply\nwith Rule 16b-3 and shall contain such additional conditions or restrictions as\nmay be required thereunder to qualify for the maximum exemption for Plan\ntransactions.\n\n            (f) Buyout Provisions. The Administrator may at any time offer to\nbuy out for a payment in Shares, an Option previously granted, based on such\nterms and conditions as the Administrator shall establish and communicate to the\nOptionee at the time that such offer is made.\n\n      10. Stock Withholding to Satisfy Withholding Tax Obligations. At the\ndiscretion of the Administrator, Optionees may satisfy withholding obligations\nas provided in this paragraph. When an Optionee incurs tax liability in\nconnection with an Option, which tax liability is subject to tax withholding\nunder applicable tax laws, and the Optionee is obligated to pay the Company an\namount required to be withheld under applicable tax laws, the Optionee may\nsatisfy the withholding tax obligation by one or some combination of the\nfollowing methods: (a) by cash payment, or (b) out of Optionee's current\ncompensation, (c) if permitted by the Administrator, in its discretion, by\nsurrendering to the Company Shares that (i) in the case of Shares previously\nacquired from the Company, have been owned by the Optionee for more than six\nmonths on the date of surrender, and (ii) have a fair market value on the date\nof surrender equal to or less than Optionee's marginal tax rate times the\nordinary income recognized, (d) by electing to have the Company withhold from\nthe Shares to be issued upon exercise of the Option, if any, that number of\nShares having a fair market value equal to the amount required to be withheld,\nor (e) as otherwise determined by the Administrator. For this purpose, the fair\nmarket value of the Shares to be withheld shall be determined on the date that\nthe amount of tax to be withheld is to be determined (the 'Tax Date').\n\n            Any surrender by a Reporting Person of previously owned Shares to\nsatisfy tax withholding obligations arising upon exercise of this Option must\ncomply with the applicable provisions of Rule 16b-3 and shall be subject to such\nadditional conditions or restrictions as may be required thereunder to qualify\nfor the maximum exemption from Section 16 of the Exchange Act with respect to\nPlan transactions.\n\n            All elections by an Optionee to have Shares withheld to satisfy tax\nwithholding obligations shall be made in writing in a form acceptable to the\nAdministrator and shall be subject to the following restrictions:\n\n            (a) the election must be made on or prior to the applicable Tax\nDate;\n\n            (b) once made, the election shall be irrevocable as to the\nparticular Shares of the Option as to which the election is made;\n\n            (c) all elections shall be subject to the consent or disapproval of\nthe Administrator;\n\n\n                                       9\n\n\n            (d) if the Optionee is a Reporting Person, the election must comply\nwith the applicable provisions of Rule 16b-3 and shall be subject to such\nadditional conditions or restrictions as may be required thereunder to qualify\nfor the maximum exemption from Section 16 of the Exchange Act with respect to\nPlan transactions.\n\n            In the event the election to have Shares withheld is made by an\nOptionee and the Tax Date is deferred under Section 83 of the Code because no\nelection is filed under Section 83(b) of the Code, the Optionee shall receive\nthe full number of Shares with respect to which the Option is exercised but such\nOptionee shall be unconditionally obligated to tender back to the Company the\nproper number of Shares on the Tax Date.\n\n      11. Adjustments Upon Changes in Capitalization, Merger or Certain Other\nTransactions.\n\n            (a) Changes in Capitalization. Subject to any required action by the\nshareholders of the Company, the number of shares of Common Stock covered by\neach outstanding Option, and the number of shares of Common Stock that have been\nauthorized for issuance under the Plan but as to which no Options have yet been\ngranted or that have been returned to the Plan upon cancellation or expiration\nof an Option, as well as the price per share of Common Stock covered by each\nsuch outstanding Option, shall be proportionately adjusted for any increase or\ndecrease in the number of issued shares of Common Stock resulting from a stock\nsplit, reverse stock split, stock dividend, combination, recapitalization or\nreclassification of the Common Stock, or any other increase or decrease in the\nnumber of issued shares of Common Stock effected without receipt of\nconsideration by the Company; provided, however, that conversion of any\nconvertible securities of the Company shall not be deemed to have been 'effected\nwithout receipt of consideration.' Such adjustment shall be made by the Board,\nwhose determination in that respect shall be final, binding and conclusive.\nExcept as expressly provided herein, no issuance by the Company of shares of\nstock of any class, or securities convertible into shares of stock of any class,\nshall affect, and no adjustment by reason thereof shall be made with respect to,\nthe number or price of shares of Common Stock subject to an Option.\n\n            (b) Dissolution or Liquidation. In the event of the proposed\ndissolution or liquidation of the Company, the Board shall notify the Optionee\nat least fifteen (15) clays prior to such proposed action. To the extent it has\nnot been previously exercised, the Option will terminate immediately prior to\nthe consummation of such proposed action.\n\n            (c) Merger or Sale of Assets. In the event of a proposed sale of all\nor substantially all of the Company's assets or a merger of the Company with or\ninto another corporation where the successor corporation issues its securities\nto the Company's shareholders, each outstanding Option shall be assumed or an\nequivalent option or right shall be substituted by such successor corporation or\na parent or subsidiary of such successor corporation, unless the successor\ncorporation does not agree to assume the Option or to substitute an equivalent\noption or right, in which case such Option shall terminate upon the consummation\nof the merger or sale of assets.\n\n            (d) Certain Distributions. In the event of any distribution to the\nCompany's shareholders of securities of any other entity or other assets (other\nthan dividends payable in cash\n\n\n                                       10\n\n\nor stock of the Company) without receipt of consideration by the Company, the\nAdministrator may, in its discretion, appropriately adjust the price per share\nof Common Stock covered by each outstanding Option or Stock Purchase Right to\nreflect the effect of such distribution.\n\n      12. Non-Transferability of Options. Options may not be sold, pledged,\nassigned, hypothecated, transferred, or disposed of in any manner other than by\nwill or by the laws of descent or distribution and may be exercised or purchased\nduring the lifetime of the Optionee only by the Optionee.\n\n      13. Time of Granting Options. The date of grant of an Option shall, for\nall purposes, be the date on which the Administrator makes the determination\ngranting such Option, or such other date as is determined by the Board. Notice\nof the determination shall be given to each Employee or Consultant to whom an\nOption is so granted within a reasonable time after the date of such grant.\n\n      14. Amendment and Termination of the Plan.\n\n            (a) Authority to Amend or Terminate. The Board may at any time\namend, alter, suspend or discontinue the Plan, but no amendment, alteration,\nsuspension or discontinuation shall be made that would impair the rights of any\nOptionee under any grant theretofore made, without his or her consent. In\naddition, to the extent necessary and desirable to comply with Rule 16b-3 or\nwith Section 422 of the Code (or any other applicable law or regulation,\nincluding the requirements of any Stock Exchange), the Company shall obtain\nshareholder approval of any Plan amendment in such a manner and to such a degree\nas required.\n\n            (b) Effect of Amendment or Termination. No amendment or termination\nof the Plan shall adversely affect Options already granted, unless mutually\nagreed otherwise between the Optionee and the Board, which agreement must be in\nwriting and signed by the Optionee and the Company.\n\n      15. Conditions Upon Issuance of Shares. Shares shall not be issued\npursuant to the exercise of an Option unless the exercise of such Option and the\nissuance and delivery of such Shares pursuant thereto shall comply with all\nrelevant provisions of law, including, without limitation, the Securities Act of\n1933, as amended, the Exchange Act, the roles and regulations promulgated\nthereunder, and the requirements of any Stock Exchange. As a condition to the\nexercise of an Option, the Company may require the person exercising such Option\nto represent and warrant at the time of any such exercise that the Shares are\nbeing purchased only for investment and without any present intention to sell or\ndistribute such Shares if, in the opinion of counsel for the Company, such a\nrepresentation is required by law.\n\n      16. Reservation of Shares. The Company, during the term of this Plan, will\nat all times reserve and keep available such number of Shares as shall be\nsufficient to satisfy the requirements of the Plan. The inability of the Company\nto obtain authority from any regulatory body having jurisdiction, which\nauthority is deemed by the Company's counsel to be necessary to the lawful\nissuance and sale of any Shares hereunder, shall relieve the Company of any\nliability\n\n\n                                       11\n\n\nin respect of the failure to issue or sell such Shares as to which such\nrequisite authority shall not have been obtained.\n\n      17. Agreements. Options shall be evidenced by written agreements in such\nform as the Administrator shall approve from time to time.\n\n      18. Shareholder Approval. Continuance of the Plan shall be subject to\napproval by the shareholders of the Company within twelve (12) months before or\nafter the date the Plan is adopted. Such shareholder approval shall be obtained\nin the degree and manner required under applicable state and federal law and the\nroles of any Stock Exchange upon which the Common Stock is listed. All Options\nissued under the Plan shall become void in the event such approval is not\nobtained.\n\n      19. Information to Optionees and Purchasers. The Company shall provide\nfinancial statements at least annually to each Optionee during the period such\nOptionee has one or more Options outstanding. The Company shall not be required\nto provide such information if the issuance of Options under the Plan is limited\nto key employees whose duties in connection with the Company assure their access\nto equivalent information.\n\n\n                                       12\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8051],"corporate_contracts_industries":[9513],"corporate_contracts_types":[9539,9545],"class_list":["post-38258","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-liberate-technologies","corporate_contracts_industries-technology__software","corporate_contracts_types-compensation","corporate_contracts_types-compensation__esp"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/38258","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=38258"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=38258"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=38258"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=38258"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}