{"id":38280,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/1997-stock-option-plan-amazon-com-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"1997-stock-option-plan-amazon-com-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/1997-stock-option-plan-amazon-com-inc.html","title":{"rendered":"1997 Stock Option Plan &#8211; Amazon.com Inc."},"content":{"rendered":"<pre>\n                                AMAZON.COM, INC.\n\n                             1997 STOCK OPTION PLAN\n\n                               SECTION 1. PURPOSE\n\n      The purpose of the Amazon.com, Inc. 1997 Stock Option Plan (the 'Plan') is\nto enhance the long-term stockholder value of Amazon.com, Inc., a Delaware\ncorporation (the 'Company'), by offering opportunities to employees, directors,\nofficers, consultants, agents, advisors and independent contractors of the\nCompany and its Subsidiaries (as defined in Section 2) to participate in the\nCompany's growth and success, and to encourage them to remain in the service of\nthe Company and its Subsidiaries and to acquire and maintain stock ownership in\nthe Company.\n\n                             SECTION 2. DEFINITIONS\n\n      For purposes of the Plan, the following terms shall be defined as set\nforth below:\n\n2.1   BOARD\n\n      'Board' means the Board of Directors of the Company.\n\n2.2   CAUSE\n\n      'Cause' means dishonesty, fraud, misconduct, unauthorized use or\ndisclosure of confidential information or trade secrets, or conviction or\nconfession of a crime punishable by law (except minor violations), in each case\nas determined by the Plan Administrator, and its determination shall be\nconclusive and binding.\n\n2.3   CODE\n\n      'Code' means the Internal Revenue Code of 1986, as amended from time to\ntime.\n\n2.4   COMMON STOCK\n\n      'Common Stock' means the common stock, par value $.01 per share, of the\nCompany.\n\n2.5   CORPORATE TRANSACTION\n\n      'Corporate Transaction' means any of the following events:\n\n            (a) Consummation of any merger or consolidation of the Company in\n      which the Company is not the continuing or surviving corporation, or\n      pursuant to which shares of the Common Stock are converted into cash,\n      securities or other property (other than a merger of the Company in which\n      the holders of Common Stock immediately prior to the \n\n\n\n\n      merger have the same proportionate ownership of capital stock of the\n      surviving corporation immediately after the merger);\n\n            (b) Consummation of any sale, lease, exchange or other transfer in\n      one transaction or a series of related transactions of all or\n      substantially all of the Company's assets other than a transfer of the\n      Company's assets to a majority-owned subsidiary corporation (as the term\n      'subsidiary corporation' is defined in Section 8.3) of the Company; or\n\n            (c)   Approval by the holders of the Common Stock of any plan or\n      proposal for the liquidation or dissolution of the Company.\n\n      Ownership of voting securities shall take into account and shall include\nownership as determined by applying Rule 13d-3(d)(1)(i) (as in effect on the\ndate of adoption of the Plan) under the Exchange Act.\n\n2.6   DISABILITY\n\n      'Disability' means 'disability' as that term is defined for purposes of\nSection 22(e)(3) of the Code.\n\n2.7   EARLY RETIREMENT\n\n      'Early Retirement' means early retirement as that term is defined by the\nPlan Administrator from time to time for purposes of the Plan.\n\n2.8   EXCHANGE ACT\n\n      'Exchange Act' means the Securities Exchange Act of 1934, as amended.\n\n2.9   FAIR MARKET VALUE\n\n      The 'Fair Market Value' shall be as established in good faith by the Plan\nAdministrator or (a) if the Common Stock is listed on the Nasdaq National\nMarket, the average of the high and low per share sales prices for the Common\nStock as reported by the Nasdaq National Market for a single trading day or (b)\nif the Common Stock is listed on the New York Stock Exchange or the American\nStock Exchange, the average of the high and low per share sales prices for the\nCommon Stock as such price is officially quoted in the composite tape of\ntransactions on such exchange for a single trading day. If there is no such\nreported price for the Common Stock for the date in question, then such price on\nthe last preceding date for which such price exists shall be determinative of\nthe Fair Market Value.\n\n2.10  GRANT DATE\n\n      'Grant Date' means the date the Plan Administrator adopted the granting\nresolution. If, however, the Plan Administrator designates in a resolution a\nlater date as the date an Option is to be granted, then such later date shall be\nthe 'Grant Date.'\n\n\n                                      -2-\n\n\n2.11  INCENTIVE STOCK OPTION\n\n      'Incentive Stock Option' means an Option to purchase Common Stock granted\nunder Section 7 with the intention that it qualify as an 'incentive stock\noption' as that term is defined in Section 422 of the Code.\n\n2.12  NONQUALIFIED STOCK OPTION\n\n      'Nonqualified Stock Option' means an Option to purchase Common Stock\ngranted under Section 7 other than an Incentive Stock Option.\n\n2.13  OPTION\n\n      'Option' means the right to purchase Common Stock granted under\nSection 7.\n\n2.14  OPTIONEE\n\n      'Optionee' means (i) the person to whom an Option is granted; (ii) for an\nOptionee who has died, the personal representative of the Optionee's estate, the\nperson(s) to whom the Optionee's rights under the Option have passed by will or\nby the applicable laws of descent and distribution, or the beneficiary\ndesignated in accordance with Section 9; or (iii) person(s) to whom an Option\nhas been transferred in accordance with Section 9.\n\n2.15  PLAN ADMINISTRATOR\n\n      'Plan Administrator' means the Board or any committee of the Board\ndesignated to administer the Plan under Section 3.1.\n\n2.16  RETIREMENT\n\n      'Retirement' means retirement as of the individual's normal retirement\ndate as that term is defined by the Plan Administrator from time to time for\npurposes of the Plan.\n\n2.17  SECURITIES ACT\n\n      'Securities Act' means the Securities Act of 1933, as amended.\n\n2.18  SUBSIDIARY\n\n      'Subsidiary,' except as provided in Section 8.3 in connection with\nIncentive Stock Options, means any entity that is directly or indirectly\ncontrolled by the Company or in which the Company has a significant ownership\ninterest, as determined by the Plan Administrator, and any entity that may\nbecome a direct or indirect parent of the Company.\n\n\n\n                                      -3-\n\n\n                            SECTION 3. ADMINISTRATION\n\n3.1   PLAN ADMINISTRATOR\n\n      The Plan shall be administered by the Board or a committee or committees\n(which term includes subcommittees) appointed by, and consisting OF two or more\nmembers of, the Board. If and so long as the Common Stock is registered under\nSection 12(b) or 12(g) of the Exchange Act, the Board shall consider in\nselecting the Plan Administrator and the membership of any committee acting as\nPlan Administrator, with respect to any persons subject or likely to become\nsubject to Section 16 of the Exchange Act, the provisions regarding (a) 'outside\ndirectors' as contemplated by Section 162(m) of the Code and (b) 'nonemployee\ndirectors' as contemplated by Rule 16b-3 under the Exchange Act. The Board may\ndelegate the responsibility for administering the Plan with respect to\ndesignated classes of eligible persons to different committees consisting of one\nor more members of the Board, subject to such limitations as the Board deems\nappropriate. Committee members shall serve for such term as the Board may\ndetermine, subject to removal by the Board at any time.\n\n3.2   ADMINISTRATION AND INTERPRETATION BY THE PLAN ADMINISTRATOR\n\n      Except for the terms and conditions explicitly set forth in the Plan, the\nPlan Administrator shall have exclusive authority, in its discretion, to\ndetermine all matters relating to Options under the Plan, including the\nselection of individuals to be granted Options, the type of Options, the number\nof shares of Common Stock subject to an Option, all terms, conditions,\nrestrictions and limitations, if any, of an Option and the terms of any\ninstrument that evidences the Option. The Plan Administrator shall also have\nexclusive authority to interpret the Plan and may from time to time adopt, and\nchange, rules and regulations of general application for the Plan's\nadministration. The Plan Administrator's interpretation of the Plan and its\nrules and regulations, and all actions taken and determinations made by the Plan\nAdministrator pursuant to the Plan, shall be conclusive and binding on all\nparties involved or affected. The Plan Administrator may delegate administrative\nduties to such of the Company's officers as it so determines.\n\n                      SECTION 4. STOCK SUBJECT TO THE PLAN\n\n4.1   AUTHORIZED NUMBER OF SHARES\n\n      Subject to adjustment from time to time as provided in Section 10.1, a\nmaximum of 4 million shares of Common Stock shall be available for issuance\nunder the Plan, except that any shares of Common Stock that, as of the date the\nPlan is approved by the Company's stockholders, are available for issuance under\nthe Company's Amended and Restated 1994 Stock Option Plan (or that thereafter\nbecome available for issuance under that Plan in accordance with its terms as in\neffect on such date) and that are not issued under that Plan shall be added to\nthe aggregate number of shares available for issuance under the Plan. Shares\nissued under the Plan shall be drawn from authorized and unissued shares or\nshares now held or subsequently acquired by the Company as treasury shares.\n\n\n\n                                      -4-\n\n\n4.2   LIMITATIONS\n\n      Subject to adjustment from time to time as provided in Section 10.1, not\nmore than 250,000 shares of Common Stock may be made subject to Options under\nthe Plan to any individual in the aggregate in any one fiscal year of the\nCompany, except that the Company may make additional one-time grants of up to 1\nmillion shares to newly hired individuals, such limitation to be applied in a\nmanner consistent with the requirements of, and only to the extent required for\ncompliance with, the exclusion from the limitation on deductibility of\ncompensation under Section 162(m) of the Code.\n\n4.3   REUSE OF SHARES\n\n      Any shares of Common Stock that have been made subject to an Option that\ncease to be subject to the Option (other than by reason of exercise of the\nOption to the extent it is exercised for shares) and\/or shares of Common Stock\nsubject to repurchase which are subsequently repurchased by the Company, shall\nagain be available for issuance in connection with future grants of Options\nunder the Plan; provided, however, that for purposes of Section 4.2, any such\nshares shall be counted in accordance with the requirements of Section 162(m) of\nthe Code.\n\n                             SECTION 5. ELIGIBILITY\n\n      Options may be granted under the Plan to those officers, directors and\nemployees of the Company and its Subsidiaries as the Plan Administrator from\ntime to time selects. Options may also be granted to consultants, agents,\nadvisors and independent contractors who provide services to the Company and its\nSubsidiaries.\n\n                                SECTION 6. AWARDS\n\n6.1   FORM AND GRANT OF OPTIONS\n\n      The Plan Administrator shall have the authority, in its sole discretion,\nto determine the type or types of awards to be made under the Plan. Such awards\nmay consist of Incentive Stock Options and\/or Nonqualified Stock Options.\nOptions may be granted singly or in combination.\n\n6.2   ACQUIRED COMPANY OPTION AWARDS\n\n      Notwithstanding anything in the Plan to the contrary, the Plan\nAdministrator may grant Options under the Plan in substitution for awards issued\nunder other plans, or assume under the Plan awards issued under other plans, if\nthe other plans are or were plans of other acquired entities ('Acquired\nEntities') (or the parent of an Acquired Entity) and the new Option is\nsubstituted, or the old award is assumed, by reason of a merger, consolidation,\nacquisition of property or of stock, reorganization or liquidation (the\n'Acquisition Transaction'). In the event that a written agreement pursuant to\nwhich the Acquisition Transaction is completed is approved by the Board and said\nagreement sets forth the terms and conditions of the substitution for or\nassumption of outstanding awards of the Acquired Entity, said terms and\nconditions shall be deemed to be the action of the Plan Administrator without\nany further action by the Plan \n\n\n\n                                      -5-\n\n\nAdministrator, except as may be required for compliance with Rule 16b-3 under\nthe Exchange Act, and the persons holding such awards shall be deemed to be\nOptionees.\n\n                  SECTION 7. TERMS AND CONDITIONS OF OPTIONS\n\n7.1   GRANT OF OPTIONS\n\n      The Plan Administrator is authorized under the Plan, in its sole\ndiscretion, to issue Options as Incentive Stock Options or as Nonqualified Stock\nOptions, which shall be appropriately designated.\n\n7.2   OPTION EXERCISE PRICE\n\n      The exercise price for shares purchased under an Option shall be as\ndetermined by the Plan Administrator, but shall not be less than 100% of the\nFair Market Value of the Common Stock on the Grant Date with respect to\nIncentive Stock Options.\n\n7.3   TERM OF OPTIONS\n\n      The term of each Option shall be as established by the Plan Administrator\nor, if not so established, shall be 10 years from the Grant Date.\n\n7.4   EXERCISE AND VESTING OF OPTIONS\n\n      The Plan Administrator shall establish and set forth in each instrument\nthat evidences an Option the time at which or the installments in which the\nOption shall vest and become exercisable, which provisions may be waived or\nmodified by the Plan Administrator at any time. If not so established in the\ninstrument evidencing the Option, the Option will be immediately exercisable and\nthe shares subject to the Option will vest according to the following schedule,\nwhich may be waived or modified by the Plan Administrator at any time:\n\n\n\n Period of Optionee's Continuous Employment\n     or Service With the Company or Its               \n                Subsidiaries                          Percent of Total Option  \n             From the Grant Date                          That Is Vested       \n             -------------------                          --------------       \n                                                   \n                After 1 year                                    20%\n                After 2 years                                   40%\nEach three-month period completed thereafter             An additional 5%\n                After 5 years                                  100%\n\n\nAny unvested shares acquired upon exercise of an Option shall be subject to\nrepurchase by the Company upon termination of the Optionee's employment or\nservices in accordance with the provisions of Section 13.1.\n\n\n\n                                      -6-\n\n\n      To the extent that the right to purchase shares has accrued thereunder, an\nOption may be exercised from time to time by written notice to the Company, in\naccordance with procedures established by the Plan Administrator, setting forth\nthe number of shares with respect to which the Option is being exercised and\naccompanied by payment in full as described in Section 7.5. The Plan\nAdministrator may determine at any time that an Option may not be exercised as\nto less than 100 shares at any one time for vested shares and any number in its\ndiscretion for unvested shares (or the lesser number of remaining shares covered\nby the Option).\n\n      To the extent required by the Plan Administrator, as a condition to\nexercise by the Optionee of an Option, the Optionee shall execute and deliver to\nthe Company a Shareholders Agreement in substantially the form in use at the\ntime of exercise, unless either (i) the Optionee has previously executed and\ndelivered such Shareholder Agreement and it is in effect at the time the\nOptionee exercises the Option or (ii) such Shareholders Agreement is no longer\nin effect with respect to other holders of Common Stock.\n\n7.5   PAYMENT OF EXERCISE PRICE\n\n      The exercise price for shares purchased under an Option shall be paid in\nfull to the Company by delivery of consideration equal to the product of the\nOption exercise price and the number of shares purchased. Such consideration\nmust be paid in cash or by check or, unless the Plan Administrator in its sole\ndiscretion determines otherwise, either at the time the Option is granted or at\nany time before it is exercised, a combination of cash and\/or check (if any) and\none or both of the following alternative forms: (a) tendering (either actually\nor, if and so long as the Common Stock is registered under Section 12(b) or\n12(g) of the Exchange Act, by attestation) Common Stock already owned by the\nOptionee for at least six months (or any shorter period necessary to avoid a\ncharge to the Company's earnings for financial reporting purposes) having a Fair\nMarket Value on the day prior to the exercise date equal to the aggregate Option\nexercise price or (b) if and so long as the Common Stock is registered under\nSection 12(b) or 12(g) of the Exchange Act, delivery of a properly executed\nexercise notice, together with irrevocable instructions, to (i) a brokerage firm\ndesignated by the Company to deliver promptly to the Company the aggregate\namount of sale or loan proceeds to pay the Option exercise price and any\nwithholding tax obligations that may arise in connection with the exercise and\n(ii) the Company to deliver the certificates for such purchased shares directly\nto such brokerage firm, all in accordance with the regulations of the Federal\nReserve Board. In addition, the exercise price for shares purchased under an\nOption may be paid, either singly or in combination with one or more of the\nalternative forms of payment authorized by this Section 7.5, by (y) a promissory\nnote delivered pursuant to Section 12 or (z) such other consideration as the\nPlan Administrator may permit.\n\n7.6   POST-TERMINATION EXERCISES\n\n      The Plan Administrator shall establish and set forth in each instrument\nthat evidences an Option whether the Option will continue to be exercisable, and\nthe terms and conditions of such exercise, if an Optionee ceases to be employed\nby, or to provide services to, the Company or its Subsidiaries, which provisions\nmay be waived or modified by the Plan Administrator at any time. If not so\nestablished in the instrument evidencing the Option, the Option will be\nexercisable \n\n\n\n                                      -7-\n\n\naccording to the following terms and conditions, which may be waived or modified\nby the Plan Administrator at any time.\n\n      In case of termination of the Optionee's employment or services other than\nby reason of death or Cause, the Option shall be exercisable, to the extent of\nthe number of shares vested at the date of such termination, only (a) within one\nyear if the termination of the Optionee's employment or services is coincident\nwith Retirement, Early Retirement at the Company's request or Disability or (b)\nwithin three months after the date the Optionee ceases to be an employee,\ndirector, officer, consultant, agent, advisor or independent contractor of the\nCompany or a Subsidiary if termination of the Optionee's employment or services\nis for any reason other than Retirement, Early Retirement at the Company's\nrequest or Disability, but in no event later than the remaining term of the\nOption. Any Option exercisable at the time of the Optionee's death may be\nexercised, to the extent of the number of shares vested at the date of the\nOptionee's death, by the personal representative of the Optionee's estate, the\nperson(s) to whom the Optionee's rights under the Option have passed by will or\nthe applicable laws of descent and distribution or the beneficiary designated\npursuant to Section 9 at any time or from time to time within one year after the\ndate of death, but in no event later than the remaining term of the Option. Any\nportion of an Option that is not vested on the date of termination of the\nOptionee's employment or services shall terminate on such date, unless the Plan\nAdministrator determines otherwise. In case of termination of the Optionee's\nemployment or services for Cause, the Option shall automatically terminate upon\nfirst notification to the Optionee of such termination, unless the Plan\nAdministrator determines otherwise. If an Optionee's employment or services with\nthe Company are suspended pending an investigation of whether the Optionee shall\nbe terminated for Cause, all the Optionee's rights under any Option likewise\nshall be suspended during the period of investigation.\n\n      With respect to employees, unless the Plan Administrator at any time\ndetermines otherwise, 'termination of the Optionee's employment or services' for\npurposes of the Plan (including without limitation this Section 7 and Section\n13) shall mean any reduction in the Optionee's regular hours of employment to\nless than thirty (30) hours per week. A transfer of employment or services\nbetween or among the Company and its Subsidiaries shall not be considered a\ntermination of employment or services. The effect of a Company-approved leave of\nabsence on the terms and conditions of an Option shall be determined by the Plan\nAdministrator, in its sole discretion.\n\n                SECTION 8. INCENTIVE STOCK OPTION LIMITATIONS\n\n      To the extent required by Section 422 of the Code, Incentive Stock Options\nshall be subject to the following additional terms and conditions:\n\n8.1   DOLLAR LIMITATION\n\n      To the extent the aggregate Fair Market Value (determined as of the Grant\nDate) of Common Stock with respect to which Incentive Stock Options are\nexercisable for the first time during any calendar year (under the Plan and all\nother stock option plans of the Company) exceeds $100,000, such portion in\nexcess of $100,000 shall be subject to delayed exercisability or treated as a\nNonqualified Stock Option as set forth by the Plan Administrator in the\nagreement(s) \n\n\n\n                                      -8-\n\n\nevidencing the Option. In the event the Optionee holds two or more such Options\nthat become exercisable for the first time in the same calendar year, such\nlimitation shall be applied on the basis of the order in which such Options are\ngranted.\n\n8.2   10% STOCKHOLDERS\n\n      If an individual owns more than 10% of the total voting power of all\nclasses of the Company's stock, then the exercise price per share of an\nIncentive Stock Option shall not be less than 110% of the Fair Market Value of\nthe Common Stock on the Grant Date and the Option term shall not exceed five\nyears. The determination of 10% ownership shall be made in accordance with\nSection 422 of the Code.\n\n8.3   ELIGIBLE EMPLOYEES\n\n      Individuals who are not employees of the Company or one of its parent\ncorporations or subsidiary corporations may not be granted Incentive Stock\nOptions. For purposes of this Section 8.3, 'parent corporation' and 'subsidiary\ncorporation' shall have the meanings attributed to those terms for purposes of\nSection 422 of the Code.\n\n8.4   TERM\n\n      The term of an Incentive Stock Option shall not exceed 10 years.\n\n8.5   EXERCISABILITY\n\n      To qualify for Incentive Stock Option tax treatment, an Option designated\nas an Incentive Stock Option must be exercised within three months after\ntermination of employment for reasons other than death, except that, in the case\nof termination of employment due to total disability, such Option must be\nexercised within one year after such termination. Employment shall not be deemed\nto continue beyond the first 90 days of a leave of absence unless the Optionee's\nreemployment rights are guaranteed by statute or contract. For purposes of this\nSection 8.5, 'total disability' shall mean a mental or physical impairment of\nthe Optionee that is expected to result in death or that has lasted or is\nexpected to last for a continuous period of 12 months or more and that causes\nthe Optionee to be unable, in the opinion of the Company, to perform his or her\nduties for the Company and to be engaged in any substantial gainful activity.\nTotal disability shall be deemed to have occurred on the first day after the\nCompany has furnished its opinion of total disability to the Plan Administrator.\n\n8.6   TAXATION OF INCENTIVE STOCK OPTIONS\n\n      In order to obtain certain tax benefits afforded to Incentive Stock\nOptions under Section 422 of the Code, the Optionee must hold the shares issued\nupon the exercise of an Incentive Stock Option for two years after the Grant\nDate of the Incentive Stock Option and one year from the date of exercise. An\nOptionee may be subject to the alternative minimum tax at the time of exercise\nof an Incentive Stock Option. The Plan Administrator may require an Optionee to\ngive the Company prompt notice of any disposition of shares acquired by the\nexercise of an Incentive Stock Option prior to the expiration of such holding\nperiods.\n\n\n\n                                      -9-\n\n\n8.7   PROMISSORY NOTES\n\n      The amount of any promissory note delivered pursuant to Section 12 in\nconnection with an Incentive Stock Option shall bear interest at a rate\nspecified by the Plan Administrator but in no case less than the rate required\nto avoid imputation of interest (taking into account any exceptions to the\nimputed interest rules) for federal income tax purposes.\n\n                            SECTION 9. ASSIGNABILITY\n\n      No Option granted under the Plan may be assigned, pledged or transferred\nby the Optionee other than by will or by the applicable laws of descent and\ndistribution, and, during the Optionee's lifetime, such Option may be exercised\nonly by the Optionee or a permitted assignee or transferee of the Optionee (as\nprovided below). Notwithstanding the foregoing, and to the extent permitted by\nSection 422 of the Code, the Plan Administrator, in its sole discretion, may\npermit such assignment, transfer and exercisability and may permit an Optionee\nto designate a beneficiary who may exercise the Option after the Optionee's\ndeath; provided, however, that any Option so assigned or transferred shall be\nsubject to all the same terms and conditions contained in the instrument\nevidencing the Option.\n\n                             SECTION 10. ADJUSTMENTS\n\n10.1  ADJUSTMENT OF SHARES\n\n      In the event that, at any time or from time to time, a stock dividend,\nstock split, spin-off, combination or exchange of shares, recapitalization,\nmerger, consolidation, distribution to stockholders other than a normal cash\ndividend, or other change in the Company's corporate or capital structure\nresults in (a) the outstanding shares, or any securities exchanged therefor or\nreceived in their place, being exchanged for a different number or class of\nsecurities of the Company or of any other corporation or (b) new, different or\nadditional securities of the Company or of any other corporation being received\nby the holders of shares of Common Stock of the Company, then the Plan\nAdministrator shall make proportional adjustments in (i) the maximum number and\nkind of securities subject to the Plan as set forth in Section 4.1, (ii) the\nmaximum number and kind of securities that may be made subject to Options to any\nindividual as set forth in Section 4.2, and (iii) the number and kind of\nsecurities that are subject to any outstanding Option and the per share price of\nsuch securities, without any change in the aggregate price to be paid therefor.\nThe determination by the Plan Administrator as to the terms of any of the\nforegoing adjustments shall be conclusive and binding.\n\n10.2  CORPORATE TRANSACTION\n\n      Except as otherwise provided in the instrument that evidences the Option,\nin the event of a Corporate Transaction, the Plan Administrator shall determine\nwhether provision will be made in connection with the Corporate Transaction for\nan appropriate assumption of the Options theretofore granted under the Plan\n(which assumption may be effected by means of a payment to each Optionee (by the\nCompany or any other person or entity involved in the Corporate Transaction), in\nexchange for the cancellation of the Options held by such Optionee, of the\n\n\n\n\n                                      -10-\n\n\ndifference between the then Fair Market Value of the aggregate number of shares\nof Common Stock then subject to such Options and the aggregate exercise price\nthat would have to be paid to acquire such shares) or for substitution of\nappropriate new options covering stock of a successor corporation to the Company\nor stock of an affiliate of such successor corporation. If the Plan\nAdministrator determines that such an assumption or substitution will be made,\nthe Plan Administrator shall give notice of such determination to the Optionees,\nand the provisions of such assumption or substitution, and any adjustments made\n(i) to the number and kind of shares subject to the outstanding Options (or to\nthe options in substitution therefor), (ii) to the exercise prices, and\/or (iii)\nto the terms and conditions of the stock options, shall be binding on the\nOptionees. Any such determination shall be made in the sole discretion of the\nPlan Administrator and shall be final, conclusive and binding on all Optionees.\nIf the Plan Administrator, in its sole discretion, determines that no such\nassumption or substitution will be made, the Plan Administrator shall give\nnotice of such determination to the Optionees, and each Option that is at the\ntime outstanding shall automatically accelerate so that each such Option shall,\nimmediately prior to the specified effective date for the Corporate Transaction,\nbecome 100% vested and exercisable, except that such acceleration will not occur\nif, in the opinion of the Company's outside accountants, it would render\nunavailable 'pooling of interest' accounting for a Corporate Transaction that\nwould otherwise qualify for such accounting treatment. All such Options shall\nterminate and cease to remain outstanding immediately following the consummation\nof the Corporate Transaction, except to the extent assumed by the successor\ncorporation or an affiliate thereof.\n\n10.3  FURTHER ADJUSTMENT OF OPTIONS\n\n      Subject to Section 10.2, the Plan Administrator shall have the discretion,\nexercisable at any time before a sale, merger, consolidation, reorganization,\nliquidation or change in control of the Company, as defined by the Plan\nAdministrator, to take such further action as it determines to be necessary or\nadvisable, and fair and equitable to Optionees, with respect to Options. Such\nauthorized action may include (but shall not be limited to) establishing,\namending or waiving the type, terms, conditions or duration of, or restrictions\non, Options so as to provide for earlier, later, extended or additional time for\nexercise and other modifications, and the Plan Administrator may take such\nactions with respect to all Optionees, to certain categories of Optionees or\nonly to individual Optionees. The Plan Administrator may take such action before\nor after granting Options to which the action relates and before or after any\npublic announcement with respect to such sale, merger, consolidation,\nreorganization, liquidation or change in control that is the reason for such\naction.\n\n10.4  LIMITATIONS\n\n      The grant of Options will in no way affect the Company's right to adjust,\nreclassify, reorganize or otherwise change its capital or business structure or\nto merge, consolidate, dissolve, liquidate or sell or transfer all or any part\nof its business or assets.\n\n                             SECTION 11. WITHHOLDING\n\n      The Company may require the Optionee to pay to the Company the amount of\nany withholding taxes that the Company is required to withhold with respect to\nthe grant or exercise \n\n\n\n\n                                      -11-\n\n\nof any Option. Subject to the Plan and applicable law, the Plan Administrator\nmay, in its sole discretion, permit the Optionee to satisfy withholding\nobligations, in whole or in part, by paying cash, by electing to have the\nCompany withhold shares of Common Stock or by transferring shares of Common\nStock to the Company, in such amounts as are equivalent to the Fair Market Value\nof the withholding obligation. The Company shall have the right to withhold from\nany shares of Common Stock issuable pursuant to an Option or from any cash\namounts otherwise due or to become due from the Company to the Optionee an\namount equal to such taxes. The Company may also deduct from any Option any\nother amounts due from the Optionee to the Company or a Subsidiary.\n\n         SECTION 12. LOANS, INSTALLMENT PAYMENTS AND LOAN GUARANTEES\n\n      To assist an Optionee (including an Optionee who is an officer or a\ndirector of the Company) in acquiring shares of Common Stock pursuant to an\nOption granted under the Plan, the Plan Administrator, in its sole discretion,\nmay authorize, either at the Grant Date or at any time before the acquisition of\nCommon Stock pursuant to the Option, (a) the extension of a loan to the Optionee\nby the Company, (b) the payment by the Optionee of the purchase price, if any,\nof the Common Stock in installments, or (c) the guarantee by the Company of a\nloan obtained by the Optionee from a third party. The terms of any loans,\ninstallment payments or loan guarantees, including the interest rate and terms\nof repayment, will be subject to the Plan Administrator's discretion. Loans,\ninstallment payments and loan guarantees may be granted with or without\nsecurity. The maximum credit available is the purchase price, if any, of the\nCommon Stock acquired, plus the maximum federal and state income and employment\ntax liability that may be incurred in connection with the acquisition.\n\n                      SECTION 13. REPURCHASE RIGHTS; ESCROW\n\n13.1  REPURCHASE RIGHTS\n\n      The Plan Administrator shall have the discretion to authorize the issuance\nof unvested shares of Common Stock pursuant to the exercise of an Option. In the\nevent of termination of the Optionee's employment or services, all shares of\nCommon Stock issued upon exercise of an Option which are unvested at the time of\ncessation of employment or services shall be subject to repurchase at the\nexercise price paid for such shares. The terms and conditions upon which such\nrepurchase right shall be exercisable (including the period and procedure for\nexercise) shall be established by the Plan Administrator and set forth in the\nagreement evidencing such right.\n\n      All of the Company's outstanding repurchase rights under this Section 13.1\nare assignable by the Company at any time and shall remain in full force and\neffect in the event of a Corporate Transaction; provided that if the vesting of\nOptions is accelerated pursuant to Section 10.2, the repurchase rights under\nthis Section 13.1 shall terminate and all shares subject to such terminated\nrights shall immediately vest in full.\n\n      The Plan Administrator shall have the discretionary authority, exercisable\neither before or after the Optionee's cessation of employment or services, to\ncancel the Company's outstanding \n\n\n\n                                      -12-\n\n\nrepurchase rights with respect to one or more shares purchased or purchasable by\nthe Optionee under an Option and thereby accelerate the vesting of such shares\nin whole or in part at any time.\n\n13.2  ESCROW\n\n      To ensure that shares of Common Stock acquired upon exercise of an Option\nthat are subject to any repurchase right, stockholders agreement and\/or security\nfor any promissory note will be available for repurchase, the Plan Administrator\nmay require the Optionee to deposit the certificate or certificates evidencing\nsuch shares with an agent designated by the Plan Administrator under the terms\nand conditions of escrow and security agreements approved by the Plan\nAdministrator. If the Plan Administrator does not require such deposit as a\ncondition of exercise of an Option, the Plan Administrator reserves the right at\nany time to require the Optionee to so deposit the certificate or certificates\nin escrow. The Company shall bear the expenses of the escrow.\n\n      As soon as practicable after the expiration of any repurchase rights or\nstockholders agreement, and after full repayment of any promissory note secured\nby the shares in escrow, the agent shall deliver to the Optionee the shares no\nlonger subject to such restrictions and no longer security for any promissory\nnote.\n\n      In the event shares held in escrow are subject to the Company's exercise\nof a repurchase option or stockholders agreement, the notices required to be\ngiven to the Optionee shall be given to the agent and any payment required to be\ngiven to the Optionee shall be given to the agent. Within 30 days after payment\nby the Company, the agent shall deliver the shares which the Company has\npurchased to the Company and shall deliver the payment received from the Company\nto the Optionee.\n\n      In the event of any stock dividend, stock split or consolidation of shares\nor any like capital adjustment of any of the outstanding securities of the\nCompany, any and all new, substituted or additional securities or other property\nto which the Optionee is entitled by reason of ownership of shares acquired upon\nexercise of an Option shall be subject to any repurchase rights, stockholders\nagreement, and\/or security for any promissory note with the same force and\neffect as the shares subject to such repurchase rights, stockholders agreement\nand\/or security interest immediately before such event.\n\n                           SECTION 14. MARKET STANDOFF\n\n      In connection with any underwritten public offering by the Company of its\nequity securities pursuant to an effective registration statement filed under\nthe Securities Act, including the Company's initial public offering, a person\nshall not sell, or make any short sale of, loan, hypothecate, pledge, grant any\noption for the purchase of, or otherwise dispose or transfer for value or\notherwise agree to engage in any of the foregoing transactions with respect to,\nany shares issued pursuant to an Option granted under the Plan without the prior\nwritten consent of the Company or its underwriters. Such limitations shall be in\neffect only if and to the extent and for such period of time as may be requested\nby the Company or such underwriters and agreed to by the Company's officers and\ndirectors; provided, however, that in no event shall the weighted \n\n\n\n                                      -13-\n\n\naverage number of days in such period exceed 180 days. The limitations of this\nparagraph shall in all events terminate two years after the effective date of\nthe Company's initial public offering.\n\n      In the event of any stock split, stock dividend, recapitalization,\ncombination of shares, exchange of shares or other change affecting the\nCompany's outstanding Common Stock effected as a class without the Company's\nreceipt of consideration, then any new, substituted or additional securities\ndistributed with respect to the purchased shares shall be immediately subject to\nthe provisions of this Section 14, to the same extent the purchased shares are\nat such time covered by such provisions.\n\n      In order to enforce the limitations of this Section 14, the Company may\nimpose stop-transfer instructions with respect to the purchased shares and any\nnew, substituted or additional securities distributed with respect to the\npurchased shares until the end of the applicable standoff period.\n\n                SECTION 15. AMENDMENT AND TERMINATION OF PLAN\n\n15.1  AMENDMENT OF PLAN\n\n      The Plan may be amended only by the Board in such respects as it shall\ndeem advisable; however, to the extent required for compliance with Section 422\nof the Code or any applicable law or regulation, stockholder approval will be\nrequired for any amendment that will (a) increase the total number of shares as\nto which Options may be granted under the Plan, (b) modify the class of persons\neligible to receive Options, or (c) otherwise require stockholder approval under\nany applicable law or regulation.\n\n15.2  TERMINATION OF PLAN\n\n      The Board may suspend or terminate the Plan at any time. The Plan will\nhave no fixed expiration date; provided, however, that no Incentive Stock\nOptions may be granted more than 10 years after the earlier of the Plan's\nadoption by the Board and approval by the stockholders.\n\n15.3  CONSENT OF OPTIONEE\n\n      The amendment or termination of the Plan shall not, without the consent of\nthe Optionee, impair or diminish any rights or obligations under any Option\ntheretofore granted under the Plan.\n\n      Any change or adjustment to an outstanding Incentive Stock Option shall\nnot, without the consent of the Optionee, be made in a manner so as to\nconstitute a 'modification' that would cause such Incentive Stock Option to fail\nto continue to qualify as an Incentive Stock Option.\n\n\n\n                                      -14-\n\n\n                               SECTION 16. GENERAL\n\n16.1  OPTION AGREEMENTS\n\n      Options granted under the Plan shall be evidenced by a written agreement\nthat shall contain such terms, conditions, limitations and restrictions as the\nPlan Administrator shall deem advisable and that are not inconsistent with the\nPlan.\n\n16.2  CONTINUED EMPLOYMENT OR SERVICES; RIGHTS IN OPTIONS\n\n      None of the Plan, participation in the Plan or any action of the Plan\nAdministrator taken under the Plan shall be construed as giving any person any\nright to be retained in the employ of the Company or limit the Company's right\nto terminate the employment or services of any person.\n\n16.3  REGISTRATION\n\n      The Company shall be under no obligation to any Optionee to register for\noffering or resale or to qualify for exemption under the Securities Act, or to\nregister or qualify under state securities laws, any shares of Common Stock,\nsecurity or interest in a security paid or issued under, or created by, the\nPlan, or to continue in effect any such registrations or qualifications if made.\nThe Company may issue certificates for shares with such legends and subject to\nsuch restrictions on transfer and stop-transfer instructions as counsel for the\nCompany deems necessary or desirable for compliance by the Company with federal\nand state securities laws.\n\n      Inability of the Company to obtain, from any regulatory body having\njurisdiction, the authority deemed by the Company's counsel to be necessary for\nthe lawful issuance and sale of any shares hereunder or the unavailability of an\nexemption from registration for the issuance and sale of any shares hereunder\nshall relieve the Company of any liability in respect of the nonissuance or sale\nof such shares as to which such requisite authority shall not have been\nobtained.\n\n      As a condition to the exercise of an Option, the Company may require the\nOptionee to represent and warrant at the time of any such exercise or receipt\nthat such shares are being purchased or received only for the Optionee's own\naccount and without any present intention to sell or distribute such shares if,\nin the opinion of counsel for the Company, such a representation is required by\nany relevant provision of the aforementioned laws. At the option of the Company,\na stop-transfer order against any such shares may be placed on the official\nstock books and records of the Company, and a legend indicating that such shares\nmay not be pledged, sold or otherwise transferred, unless an opinion of counsel\nis provided (concurred in by counsel for the Company) stating that such transfer\nis not in violation of any applicable law or regulation, may be stamped on stock\ncertificates to ensure exemption from registration. The Plan Administrator may\nalso require such other action or agreement by the Optionee as may from time to\ntime be necessary to comply with the federal and state securities laws.\n\n\n\n                                      -15-\n\n\n16.4  NO RIGHTS AS A STOCKHOLDER\n\n      No Option shall entitle the Optionee to any dividend, voting or other\nright of a stockholder unless and until the date of issuance under the Plan of\nthe shares that are the subject of such Option, free of all applicable\nrestrictions.\n\n16.5  COMPLIANCE WITH LAWS AND REGULATIONS\n\n      Notwithstanding anything in the Plan to the contrary, the Board, in its\nsole discretion, may bifurcate the Plan so as to restrict, limit or condition\nthe use of any provision of the Plan to Optionees who are officers or directors\nsubject to Section 16 of the Exchange Act without so restricting, limiting or\nconditioning the Plan with respect to other Optionees. Additionally, in\ninterpreting and applying the provisions of the Plan, any Option granted as an\nIncentive Stock Option pursuant to the Plan shall, to the extent permitted by\nlaw, be construed as an 'incentive stock option' within the meaning of Section\n422 of the Code.\n\n16.6  NO TRUST OR FUND\n\n      The Plan is intended to constitute an 'unfunded' plan. Nothing contained\nherein shall require the Company to segregate any monies or other property, or\nshares of Common Stock, or to create any trusts, or to make any special deposits\nfor any immediate or deferred amounts payable to any Optionee, and no Optionee\nshall have any rights that are greater than those of a general unsecured\ncreditor of the Company.\n\n16.7  SEVERABILITY\n\n      If any provision of the Plan or any Option is determined to be invalid,\nillegal or unenforceable in any jurisdiction, or as to any person, or would\ndisqualify the Plan or any Option under any law deemed applicable by the Plan\nAdministrator, such provision shall be construed or deemed amended to conform to\napplicable laws, or, if it cannot be so construed or deemed amended without, in\nthe Plan Administrator's determination, materially altering the intent of the\nPlan or the Option, such provision shall be stricken as to such jurisdiction,\nperson or Option, and the remainder of the Plan and any such Option shall remain\nin full force and effect.\n\n                           SECTION 17. EFFECTIVE DATE\n\n      The Plan's effective date is the date on which it is adopted by the Board,\nso long as it is approved by the Company's stockholders at any time within 12\nmonths of such adoption.\n\n      Adopted by the Board on February 25, 1997 and approved by the Company's\nstockholders on February 25, 1997.\n\n\n\n                                      -16-\n\n                   PLAN ADOPTION AND AMENDMENTS\/ADJUSTMENTS\n\n\n\n      Date of\n     Adoption\/                                                    Date of  \n     Amendment\/                                                 Stockholder\n     Adjustment           Section       Effect of Amendment      Approval\n     ----------           -------       -------------------      --------\n                                                        \n\n\n\n\n\n                                      -1-\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6645],"corporate_contracts_industries":[9492],"corporate_contracts_types":[9539,9545],"class_list":["post-38280","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-amazoncom-inc","corporate_contracts_industries-retail__books","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\/38280","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=38280"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=38280"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=38280"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=38280"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}